Our Service Continues 2020 ANNUAL REPORT ABOUT THE COVER – OUR TABLE OF CONTENTS SERVICE CONTINUES 1 Company Profile 1 Mission, Vision and Values In these unprecedented times we are reminded of the 2 Joint Leadership Message critical role that infrastructure 10 Core Assets – Simplified Ownership Structure plays in the lives of millions. 11 Consolidated Financial Highlights By powering commerce 12 Portfolio Company Highlights and households, delivering 12 Meralco clean and affordable water, 14 Global Business Power Corporation (GBP) connecting people and places, and making excellent 16 Metro Pacific Tollways Corporation (MPTC) healthcare available to everyone, MPIC is doing its humble 18 Maynilad Water Services, Inc. (Maynilad) part in contributing to national progress and improving the 20 Light Rail Corporation (LRMC) quality of life of Filipinos. 22 Metro Pacific Hospital Holdings Inc. (MPHHI)

This year, focus was purposely directed on service 24 Positive Community Advocacies and Programs continuity amidst the pandemic. Together with partners 28 MPIC Heroes in Government, MPIC worked tirelessly to ensure that 32 Sustainability every Filipino has access to the essential services we offer 35 Corporate Governance especially at the height of this crisis, 39 Risk Management 40 Leadership ABOUT THIS REPORT 40 Board of Directors 44 Senior Management This report focuses on the essential information our 45 Management Teams investors need to make informed decisions about our business. This should be read in conjunction with our 47 Financial Review 47 Management’s Discussion and Analysis of Financial SEC Form 17A and our 2020 Information Statement, Condition and Results of Operations among others. 91 Statement of Management’s Responsibility for Consolidated Financial Statements Details about MPIC’s management approaches to 93 Independent Auditor’s Report Environmental, Social and Governance issues are outlined 101 Consolidated Statements of Financial Position in our 2020 Sustainability Report. In that separate report, 103 Consolidated Statements of Comprehensive Income we have disclosed key performance indicators that help us 105 Consolidated Statements of Changes in Equity quantify and evaluate our impacts in these areas. 108 Consolidated Statements of Cash Flows 110 Notes To Consolidated Financial Statements

For more information, please refer to our: • Investor Presentation – available upon request through [email protected] • Corporate Website – www.mpic.com.ph Quarterly Reports, Annual Reports, Annual Corporate Governance Reports, SEC Form 17A, Information Statement, Sustainability Report Company Profile

Metro Pacific Investments Corporation (MPIC) is MISSION, VISION, AND VALUES a Philippine-based, publicly listed investment management and holding company registered with Our Mission the Philippine Securities and Exchange Commission We are the leading Philippine infrastructure investment (SEC) on March 20, 2006. firm. We manage, transform and grow our companies while continuously seeking investment opportunities to Through acquisitions and strategic partnerships, create long-term value for our shareholders. we seek to create value by upgrading infrastructure, improving operational efficiency, increasing customer Our Vision coverage, and working closely with regulators and We have a stellar portfolio of infrastructure assets, each other partners in government. The overarching being the dominant player in its field. We are admired objective of our investment and management globally for excellence in investing in and transforming strategy is to contribute to national progress and infrastructure. We attract, retain and develop world- improve the lives of Filipinos while creating value class talent. Through our companies and foundation, we for our stakeholders by achieving long-term significantly contribute to the economic development economic success. of the and thereby uplift the quality of life of every Filipino. We operate in a number of highly-regulated sectors within a framework of national laws and Our Values regulations including various concession and franchise agreements. We work hard to uphold our Teamwork And Empowerment commitments under these agreements, and continue • We recognize the diverse strength and abilities within to deliver on our promises to rehabilitate, maintain, the team. strengthen and improve vital services that help • We enable and inspire people to achieve superior to form the backbone of the Philippine economy results. and society. Integrity And Transparency Through our operating companies, we strive to • We adhere to the highest ethical and corporate deliver high quality and affordable services for governance standards. customers, provide safe workplaces and merit- based opportunities for employees, and generate Entrepreneurship reasonable returns for business partners and other • We innovate, take risks, act quickly and decisively, and stakeholders. We make a difference to the lives are customer focused. of millions of Filipinos, powering commerce and households, connecting people and places, delivering Financial Discipline and Accountability clean and affordable water, and making excellent • We employ rigorous financial analysis to arrive at sound healthcare available to all. business decisions. • We are results driven and meet our commitments.

1 Joint Leadership Message

Chaye A. Cabal – Revilla Manuel V. Pangilinan Jose Ma. K. Lim Chief Finance Officer and Chairman of the Board President and Chief Chief Sustainability Officer of Directors Executive Officer

To our fellow shareholders,

We will certainly remember 2020 as one of the most challenging. We started the year with much enthusiasm after having successfully completed the transaction with KKR and an affiliate of GIC for our Hospitals business. Armed with a stronger balance sheet, we were prepared to embrace our strategic role in Philippine infrastructure through innovative and inclusive solutions in power, water, transportation, and other services. Then the pandemic happened, and we found ourselves even more determined to make a difference.

2 In these unprecedented times we are reminded of as restrictions were eased. For the fourth quarter in the critical role that infrastructure plays in the lives particular, contributions from the Power and Toll Roads of millions. By powering commerce and households, businesses have already recovered to its pre-pandemic delivering clean and affordable water, connecting levels. The water business however has been affected people and places, and making excellent healthcare by low water production driven by higher turbidity available to everyone, we are doing our humble part levels caused by successive typhoons. Growth also in contributing to national progress and improving the generally slowed down because of usual year-end quality of life of Filipinos. adjustments to the books.

While earnings – for the first time in our history – have POWER been less than ideal, we purposely directed our focus on service continuity amidst the pandemic. Together Our power business contributed P10.5 billion to with our partners in Government, we worked tirelessly earnings. This is 9% lower than 2019, with reduced to ensure that every Filipino has access to the essential contributions from both Meralco and Global Business services we offer especially at the height of this crisis. Power.

FY2020 FINANCIAL RESULTS Meralco’s Core Income declined 9% to P21.7 billion, driven mainly by a 7% decrease in total energy sales MPIC reported consolidated Core Income of and higher provisions for doubtful accounts due to the P10.2 billion pesos for the year 2020, down 34% current strain on the economy. Residential volumes rose from P15.6 billion in 2019 owing largely to the 13% due to the shift to work-from-home set-up and economic contraction stemming from the Philippine online learning; and accounted for 38% of total sales Government’s response to COVID-19. volume. Commercial and Industrial sales volumes fell 20% and 11%, respectively. The various quarantine measures implemented throughout the year reduced toll road traffic, mandated Global Business Power recorded a 13% decline in Core the suspension and subsequent reduction in ridership Income to P2.4 billion. Energy sales increased 2% to capacity for our light rail services, and decreased 4,929 gigawatt hours on the strength of additional commercial and industrial demand for water and power supply and ancillary service agreements that power resulting in a 26% decline in contribution from commenced in the latter part of 2019. Despite the operations. increase in energy sales, revenues declined 13% to P21.1 billion due to lower WESM prices and demand. Our earnings contribution mix was as follows: Power accounted for P10.5 billion or 69% of operating WATER income, Water contributed P3.1 billion or 20%, and Toll roads contributed P2.4 billion or 16%. MPIC’s other The water segment’s contribution to Core Income businesses, mainly Hospitals, Light Rail, and Logistics, decreased 14% to P3.1 billion. Revenues slipped 4% incurred an overall loss of P709 million. to P22.9 billion due to lower average tariffs on flat volumes. Core Income fell 15% to P6.5 billion because As expected, quarterly performance shows that of higher amortization and depreciation expenses as operations were hardest hit at the height of the a consequence of its substantial investment in Non- quarantine measures in the second quarter but started Revenue Water reduction and continuing upgrades to to gradually recover in the second half of the year facilities.

3 Joint Leadership Message

TOLL ROADS Metro Pacific Hospitals’ Consolidated Core Income declined 82% to P262 million, mostly because of two Metro Pacific Tollways Corporation recorded Core Income major factors. First is the sharp drop in the number of of P2.7 billion, down 49% from 2019 driven by lower traffic patient admissions and outpatient census; and second, on all roads due to the implementation of community the significant increases in personnel costs and medical quarantines and higher interest costs on additional debt supplies such as personal protective equipment which to finance ongoing road expansion projects. are heavily used to ensure stringent health and safety protocols for our employees, healthcare practitioners Average daily vehicle entries on our Philippine toll and patients. MPHHI experienced a 46% decline in roads declined 28% to 389 thousand. Traffic averaged inpatient admissions to 107 thousand and a 36% 574 thousand for the first two months of 2020, an decline in outpatient visits to 2.5 million. increase of 14% over the same period last year but declined to 86 thousand a day when the strictest level We have come through the most difficult year we have of quarantine was implemented in the second quarter. ever seen as the operations of our portfolio companies have been significantly affected by the pandemic. At the As for toll road investments outside the Philippines, parent level however, we endeavored to preserve our average daily vehicle entries declined 26% to 300 balance sheet and optimize capital allocation as evidenced thousand due to ongoing construction and road by our recent asset monetization efforts. It is difficult to integration within their concession areas. The ascertain the pace of growth in economic activity so we implementation of various measures – from curfews to believe it is prudent to ensure that our financial position regional lockdowns – to limit movement of people and is robust and can sustain operations and expansion even vehicles in response to the pandemic also contributed in a prolonged period of recovery. You can rest assured to the reduced traffic. that despite the temporary dip in earnings, your company remains to be in good financial shape. LIGHT RAIL RESPONSE TO COVID-19 PANDEMIC Light Rail Manila reported a Core Loss of P689 million following the suspension of operations throughout Humanity continues to be tested to its core by the various periods. LRT-1 initially operated at 13% challenges caused by the virus. We strongly believe that capacity beginning June to comply with Department more than these financial indicators, the strength of the of Transportation guidelines and worked closely with company can better be measured during this time based government to gradually increase capacity to 30% on how well it has responded to the crisis at hand. in October. Average daily ridership was down to 186 thousand during the 274 operating days in 2020 The entire MPIC group mobilized all its available compared with 447 thousand during the 361 operating resources and personnel to support the Philippine days in 2019. government’s fight against COVID-19. Driven by the value of compassion, we embraced our mission LOGISTICS AND HEALTHCARE to, first and foremost, ensure the health, safety and continued livelihood of our employees; prioritize And lastly for Logistics and Hospitals – Metropac service continuity; execute on expansion and enable Movers reported Core Loss of P358 million, lower by economic growth from infrastructure development; and 47% from 2019 driven by business rationalization lastly, help uplift communities through various positive activities in the second half of 2019 and winding down impact programs. of trucking operations in 2020.

4 Our 2020 Priorities

Ensure the health, safety and continued livelihood of our employees

Prioritize service continuity

Execute on expansion and enable economic growth from infrastructure development

Help uplift communities through various positive impact programs and work. We employed online and mobile platforms for communication and consultations. To facilitate social distancing, we limited the number of people in our HEALTH, SAFETY AND CONTINUED LIVELIHOOD offices and field locations, restricted non-essential travel, OF EMPLOYEES canceled group meetings, implemented shift rotations and compressed work weeks, and encouraged flexible Our own people are at the heart of our business. Our work-from-home arrangements whenever possible. To employees are our frontliners. They are, therefore, our top ensure service continuity, we allowed employees to stay priority as we navigate through the COVID-19 pandemic. in our offices and facilities, and those who stayed within MPIC is committed to protecting and promoting the our premises were given all the basic amenities necessary health, safety, and well-being of our workforce. All including meals and medicines. We provided shuttle operating companies immediately took swift, decisive services to other essential personnel that needed to report actions that put into place measures that prevented the to our offices for mission-critical work. risk of exposure, transmission, outbreak, and spread of the COVID-19 virus among our employees and within our Given the emerging challenges of remote work for workspaces and premises. employees, especially with regard to their mental health, our companies also initiated teleconsultation services, Our ability to keep our workforce safe was critical to mental health surveys, and COVID-19 medical hotlines our next priority, which was to continue delivering the to help employees manage the crisis’ impacts on their essential services that we provide. Our people’s dedication physical and mental health. and resilience proved invaluable in helping MPIC and its companies prevail through the pandemic. They went on Other notable initiatives we instituted include, to deliver exceptional, uninterrupted service to the public, MPIC S.A.G.I.P or Self-Assessment on General even if some of them had to say goodbye to families and health Information Program. MPIC IT and HR Teams friends because of COVID-19. collaborated to launch this Daily Health Check Platform to easily identify team members in need of We responded to the advisory of health authorities healthcare assistance. This system allows employees on the necessary protocols to minimize infection risk to report on their daily health disposition – including including regular testing, social distancing, monitoring body temperatures and other symptoms. When of temperatures, regular disinfection of premises, and employees experience any form of symptoms, they are the wearing of personal protective equipment, such as redirected to a page where they can request for tele- face masks and face shields. We instituted the regular consultations and testing, as necessary. This platform release of guidance, updates, and reports about health also facilitates proper contact tracing for those who

5 Joint Leadership Message

physically report to the office as it has an integrated attendance platform that monitors the time spent by the employees in the office.

Meralco also launched “Code Light Bot” – an integrated communications-work-health tracker app built using Microsoft technology which releases timely COVID-19 related information and updates to Meralco employees. The application serves as a centralized system to keep Meralco attuned to its employees’ well-being. Code Light’s chatbot feature allows employees to report daily work, signify their workplace arrangement, and update SERVICE CONTINUITY their health status and wellness during quarantine. By monitoring the health status of their employees, Apart from the pandemic, natural calamities such Meralco is able to minimize incidents of COVID-19, as the Taal eruption in January and the two super assist in the provision of prompt medical care to typhoons that hit the Philippines in 2020 further those who are infected, and conduct contact tracing aggravated circumstances by damaging vital whenever necessary. infrastructure in various parts of the country. Amid these daunting challenges, we successfully responded Due to the pandemic, unemployment rate in the and powered through the disruptions and maintained Philippines has reached a high of 17.6%. Recognizing high service delivery rates, within limits prescribed to that now more than ever, people need stable sources protect people’s health and lives, in all our businesses. of income, the MPIC group prioritized the preservation We have always taken our duty to deliver essential of livelihood for all its employees especially during the services very seriously because we know that our height of the crisis. Not a single employee lost their job customers deserve continuous service. As such, due to the pandemic. delivery of power and water remained stable and roads stayed open most importantly for the entire MPIC group prioritized the preservation of healthcare community who were in the front line of livelihood for all its employees especially during the battle against COVID-19. the height of the crisis. Not a single employee lost their job due to the pandemic. Delivery of power and water remained stable and roads stayed open most importantly for the In this report, we will especially honor our employees, who entire healthcare community who were in the front line of the battle against COVID-19. among many others, went over and beyond the call of duty. We acknowledge everyone’s resolve to sustain our business operations, resulting in uninterrupted service, For both Meralco and Maynilad, we proactively extended preservation of livelihood for all our employees, and the installment schemes to provide payment relief to our continued achievement of our goals. customers and subsequently complied with government- mandated moratorium on disconnections for non- We are therefore most grateful to all our incredible payment. people, from our courageous frontline employees to our hardworking management, who have all delivered their To reduce face-to-face interaction during the pandemic, best during these difficult times. and instead encourage customers to use online platforms

6 for bills payment, Meralco shouldered convenience fees charged by third party payment gateway partners of Meralco of P75 million for 1.9 million Meralco Online payment transactions.

While personal interactions were limited during the community quarantine, enhanced customer service was made possible through technology. We ensured that customers could continuously transact and engage with our operating companies using our various online portals and applications that utilize Robotic Process Automation (RPA) and Artificial Intelligence (AI). EXECUTING ON EXPANSION TO SPUR ECONOMIC GROWTH In Meralco, for example, RPA was used to help resolve billing discrepancy cases. AI, on the other hand, was Despite the challenges brought about by mobility used to support “Operation Brotherhood” to resolve restrictions, our operating teams ensured continuity pending customer questions and concerns received of projects under development while adhering to during community quarantine. These technologies all the necessary measures based on Government helped speed up the process of responding to guidelines to promote the health and safety of voluminous backlog and incoming concerns from workers. We have persevered in our commitment various channels. to spur economic growth through infrastructure development, proceeding with our projects where We further improved our “My Water Bill Portal” on possible despite pandemic-related risks. Years of the Maynilad website to allow customers to view sustained capital investments have proven that we and pay their bills online. We also developed the are resilient and robust enough to withstand a crisis. “ikotMNL” application for our LRT-1 riders, a digital There is no room for complacency. one-stop source of information. It enables users to plan their trips and commutes ahead of schedule as Meralco proceeded with the construction of their it provides data on actual train arrival and departure first solar investment under PowerSource First times, fare information, crowd situation at train Solar, Inc. This P4.3 billion plant, which began stations, safety reminders, and real-time advisories and operations in May 2021, sits on a 72-hectare land and announcements. It also features a chat box for customer will produce up to 50 MWac of power. service assistance and feedback. Metro Pacific Tollways continued with construction Through the years, we have continuously invested in activities on major toll projects. In addition to the further improving service quality and service delivery, roads that were completed in 2020, we also recently developing processes and technologies that recognize completed Phase 2 of our NLEX Lane Widening and satisfy the rapidly changing needs, demands, and Project and are on track to complete additional satisfaction levels of our customers. We also strive sections of the Cavite Laguna Expressway and to strengthen our relationships with customers by substantially complete the Cebu Cordova Link providing timely information and engaging with them Expressway (CCLEX) in 2022. In April 2021, we in positive ways through effective and innovative conducted a blessing and ceremonial lighting of actions. eight crosses on top of CCLEX’s twin pylons for a

7 Joint Leadership Message

historical commemoration of the 500th anniversary of Christianity in the Philippines.

Maynilad also continued construction and rehabilitation work on major projects. This includes the P969-million Central Manila Sewerage System Rehabilitation Project which involves the upgrade of approximately 9.6 kilometers of sewer lines within 30 barangays in parts of Sta. Cruz and Malate in Manila. Targeted for completion in June 2021, the project is intended to accommodate a larger volume of wastewater and ensure the sewerage system’s continued reliability.

POSITIVE IMPACT PROGRAMS

As the Dalai Lama once said, “Our world and our lives have become increasingly interdependent, so when our neighbor is harmed, it affects us too. Therefore, we have to abandon outdated notions of ‘them’ and ‘us’ and think of our world much more in terms of a great ‘US’, a greater human family.”

Recognizing that we have a bigger role to play in our society, your Company is also going above and beyond its core business functions to give back more to the people we serve. We continuously invest in initiatives that cater to the most vulnerable, partnering with them and providing them with tools that lift themselves out We are also targeting to partially operate some of poverty through livelihood, education, community stations of the 11.7 kilometer LRT-1 South Extension development, disaster response, and environmental project by the end of the year. The accelerated pace programs that promote social justice and shared of construction also includes the expansion of the wealth. existing depot in Baclaran, and the building of a new satellite depot at Zapote. Once finished, the line will We extended our full support to the government cut travel time from Baclaran to Bacoor from over in their response to the pandemic – powering and an hour by car to 25 minutes. This expanded railway supplying water to various temporary healthcare system is expected to serve approximately 500,000 to facilities. We provided housing, meals, transportation, 800,000 passengers per day. and free tollway access to frontliners. We also donated testing kits and personal protective equipment to These are just some of the priority projects that your various local government units. More importantly, company is working on. We are carefully studying our network of 18 hospitals swiftly responded to other opportunities in the infrastructure space where the public health emergency by ramping up their we believe we are best positioned to make a difference dedicated COVID-19 bed capacities to treat their in the lives of our countrymen. patients. At the height of the pandemic, total allocation

8 CLOSING

Our path ahead has been made even more clear by the lessons from the year before. Your Company has chosen to transform, perform and grow instead of allowing the setbacks to hinder us. Despite the challenges, we will carry on with our purpose of contributing to national progress and improving the quality of life of the public we serve. Together, we will thrive – and not just survive.

The road to recovery will not be easy but you can rest assured that we will work even harder to within the network reached 850 beds. MPHHI also deserve your trust and support. We will emerge opened multiple wards for patient isolation, deployed victorious from this pandemic as a stronger and additional nurses, and distributed medical supplies more resilient Company. and personal protective equipment to ensure the health and safety of its medical workers. It also secured We hope that you will continue to stay with us on DOH accreditation for most of its hospitals to operate this journey. as COVID-19 testing facilities. We look forward to seeing you all again face to face. All these were in addition to our recurring programs In the meantime, please stay safe and well. centered on environmental protection, education and livelihood.

RENEWED FOCUS ON SUSTAINABILITY

Manuel V. Pangilinan Before the year 2020 ended, the Board appointed Chairman of the Board of Directors Chaye Cabal-Revilla as MPIC’s new Chief Financial Officer and Chief Sustainability Officer, reinvigorating our initiatives for accomplishing goals based on our enhanced sustainability pillars. Chaye is a fierce champion of sustainable business practices. Under Jose Ma. K. Lim her stewardship, the PLDT Group reaped numerous President and Chief Executive Officer recognitions for its sustainability programs and disclosures. She brings to MPIC her uncompromising commitment to current global reporting standards, aligning ours to the world’s best practices to enable responsible business practices and contribute toward Chaye A. Cabal – Revilla a more sustainable world. In just a few short months, Chief Finance Officer and Chief Sustainability Officer Chaye has already streamlined and further improved our finance functions, spearheaded the establishment of the Group Sustainability Council and enhanced our sustainability framework.

9 Core Assets–Simplified Ownership Structure as of December 31, 2020

POWER TOLL ROADS WATER Distribution and Generation Network of toll roads Treatment and Distribution

99.9% 45.5% Philippine Toll Roads 52.8% 75.1% – 100% International Investments 29.5%* – 76% 62.4%* 100% * In March 2021, MPIC completed the sale of its * In February 2021, MPTC sold its entire 29.45% direct ownership in GBP to Meralco PowerGen indirect stake in Don Muang Public Company Corp., a wholly owned subsidiary of Meralco Ltd. in Thailand

OTHERS Logistics Light Rail Healthcare

100% 35.8% 20.0%

10 Consolidated Financial Highlights

Revenues Core income Reported income Diluted reported income In P millions In P millions In P millions per common share 62,512 15,602 In P centavos 15,060 23,856 75.61 14,104 49,276* 12,106 44,820 43,257* 40,855* 10,238 14,130 44.76 13,151 41.67 11,456 38.06

4,748 15.16

2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020** *Pertains to continuing operations only

Total consolidated assets Short and Long-term debts Net debt Total consolidated equity In P millions In P millions In P millions In P millions 182,544 175,212 246,045 611,778 617,796 249,909 167,572 239,003 244,347 557,946 231,366 215,093 215,679 503,751 139,766 189,083 188,081

351,602 77,547 97,016

2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020**

Dividends per share In P centavos Earnings Contribution Mix Power Toll Roads Water Healthcare/Light Rail/Others 11.05 11.05 11.05 11.05 In P millions 10.00 515 523 5,236 835 4,423 823 3,901 2,445 2016 2017 2018 2019 2020** 3,569 3,794 3,517 3,082 3,733 Market capitalization In P millions 3,564

209,815 215,847 10,823 11,571 10,547 146,232 9,378 131,262 7,229 109,861

(709)

2016 2017 2018 2019 2020** 2016 2017 2018 2019 2020**

**COVID-19 Pandemic Year

11 Reliable, Affordable, and Low-carbon Power

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC 43,572 GWh 7.1 million Energy sales Number of customers

30.5 million 6.08% Estimated population System Loss served Meralco put in place a moratorium on service disconnections for unpaid bills through end-2020, and provided installment plan payment options. The company also P20.8 billion suspended the implementation of the Capital expenditure Guaranteed Minimum Billing Demand (GMBD) charges since March 2020 to ease the payment burden of business customers with demand-based billing. A total of P3.2 Meralco is the Philippines’ largest electric distribution utility, servicing billion was waived, benefiting more than Bulacan, Cavite, , Rizal and individual cities and municipalities 94,000 business customers. in Batangas, Laguna, , and Quezon, covering an area of around 9,685 square kilometers. Meralco serves a total of 7.1 million residential, commercial, and industrial customers. As the largest power distributor in the Philippines, Meralco contributes to nation-building by supplying electric power to government agencies, central business districts, industrial parks, schools and hospitals. Meralco’s total primary circuit length covers 19,436 kilometers within its franchise area. Meralco collaborates with various partners to ensure safe, reliable, and quality delivery of service, while In partnership with the Department of compliant with the rates defined by the Energy Regulatory Commission. The Transportation (DOTr) and with Local Government Unit (LGU) leaders, Meralco company aims to provide accessible energy at a reasonable cost, especially to deployed e-Sakay electric jeeps and drivers unserved and underserved communities. to transport more than 76,000 health frontliners and other essential personnel (in Pasig, , and other special routes designated by the DOTr), at no cost.

Meralco delivered uninterrupted supply of electricity to temporary urgent care facilities and to temporary COVID-19 treatment centers.

12 Revenues Core EBITDA Core Income (In P millions) (In P millions) (In P millions)

318,315 23,832 37,165 38,026 22,408 304,454 35,287 21,711 275,304

5% 2% 6% 14% 7% 9%

2018 2019 2020 2018 2019 2020 2018 2019 2020 “We hail our superheroes, the 662 employees on critical posts living inside Meralco premises. It is not FINANCIAL AND OPERATIONAL PERFORMANCE easy being away from your families, taking shifts within social distancing • Total revenues declined by • Core Net Income declined 9% to measures. To the 2,521 skeletal force 14% reflecting lower pass- P21.7 billion due to lower volume employees, mostly supported by through generation charges sold and higher provision for Meralco’s fleet, we salute you for due to the implementation of doubtful accounts braving the open environment daily. new PSAs, decrease in prices in And to the 2,631 employees who the Wholesale Electricity Spot are on a work from home (WFH) Market (“WESM”) on account arrangement, we equally thank you of the reduction in the Luzon for we know that all your hands are demand, lower fuel prices, peso on deck to ensure that Meralco runs appreciation and force majeure like clockwork. Know that your hard claims invoked by Meralco work and dedication are greatly against its power suppliers. appreciated!” • Total energy sales decreased 7% RAY C. ESPINOSA - Residential volumes rose 13%, President and Chief Executive Officer accounting for 38% of total sales volume in 2020 - Commercial and Industrial sales volumes fell 20% and 11%, respectively

13 Reliable, Affordable, and Low-carbon Power

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC

4,929 GWh 27 Energy sales Number of customers

Before the ECQ was announced in their out of respective provinces, Emergency Response P0.4 billion 4.57 5 Teams in Cebu, Iloilo, Aklan, and Mindoro Capital expenditure Customer satisfaction have already been housed within the index premises of its power plants as part of GBP’s Business Continuity Plan. This move ensured power supply remained available and stable in these provinces during the quarantine. GBP provided everyone with accommodations, complete meals with Global Business Power Corporation (GBP), with a total gross capacity of vitamins, and daily health monitors. 1,091 MW, is a leading independent power producer in the Visayas, with presence in Mindanao and Mindoro islands. Having diversified power generation facilities that are capable of supplying base, intermediate, peak load and ancillary support, GBP is one of the few to offer flexible energy solutions for varying power requirements. Committed to serve the nation with its power supply requirements, GBP has expanded outside the Visayas region to include foothold in the emerging Mindanao market through a 50% equity stake in Alsons Thermal Energy Corporation (ATEC). ATEC owns GBP fast-tracked remittance of the financial Sarangani Energy Corporation and San Ramon Power, Inc. benefits of the local governments of Cebu, Iloilo, Aklan and Mindoro under DOE GBP sets its sights on becoming a total sustainable energy solutions provider Energy Regulation No. 1-94 to help in their by pursuing diversified technologies that include renewable energy sources, COVID-19 response. by delivering energy services beyond power generation and by incorporating innovation at the heart of its strategy to grow the business.

Through GBP’s Adopt-a-Health Center Program, it constructed a new center in Barangay Hinactacan in Iloilo and built handwashing stations in at least seven barangays in Cebu.

14 Revenues Core EBITDA Core Income (In P millions) (In P millions) (In P millions)

24,223 2,725 9,159 9,871 2,458 26,822 8,669 2,361 21,069

10% 8% 11% 13% 12% 13%

2018 2019 2020 2018 2019 2020 2018 2019 2020 “For GBP, our people have been our greatest asset during these trying times. Through their efforts, FINANCIAL AND OPERATIONAL PERFORMANCE we were able to continue with our business operations and provide • Volume sold increased 2% to • In December 2020, MPIC agreed uninterrupted power supply to 4,929 GWh on the strength of to sell its entire 56% stake in GBP our consumers. We honor our additional power supply and to Meralco for P22.4 billion people’s sacrifices from having to ancillary service agreements that - GBP’s operational expertise stay inside the plant sites during commenced in the latter part of in running power generation the lockdown, to having to perform 2019 facilities in Visayas and in-house plant maintenance despite • Despite the increase in volume Mindanao complements MGen’s the health risk, and having to deal sold, Revenues declined 13% to strong presence in Luzon with various challenges in working P21.1 billion due to lower WESM - Simplifies MPIC’s power from home just so we fulfill GBP’s prices and demand portfolio with all power commitment of enlightening lives • Core Net Income dropped 13% to generation assets under one and empowering progress.” P2.4 billion vehicle JAIME T. AZURIN President

15 Clean Water and Sanitation

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC 536 MCM 1,484,128 Billed volume Billed customers

31% 9.8 million Non-revenue water at District Estimated population Metered Area level (period end) served

In partnership with community-based 26% P7.8 billion enterprises Kapwa and Green Badge, Non-revenue water at District Capital expenditure directly procured soaps, alcohols, hand disinfectants, and face masks from the Metered Area level (average) two groups, which were then distributed to hospitals, treatment centers, and communities. Maynilad is the Philippines’ largest private water concessionaire in terms of customer base, with the longest ISO-certified water distribution system. It consistently provides 9.8 million residents in 17 cities and municipalities with water that is clean, safe, and fully satisfies the national drinking water standards of the Department of Health. Since MPIC’s entry in Maynilad in 2007, Maynilad has invested more than P130 billion in rehabilitating the crumbling colonial water infrastructure of Metro Manila’s West Zone, turning it into a modern and robust water and sanitation system serving Maynilad supplied free water to testing millions of Filipinos, especially low-income communities who need these laboratories and makeshift treatment services the most. centers in Palacio de Manila, Rizal Memorial Sports Complex, Philippine International Convention Center, World Trade Center, Bagong Nayong Pilipino, and Mall of Asia.

In partnership with De Los Santos Medical Center, constructed a P15-million laboratory for RT-PCR tests of suspected COVID-19 patients, doubling the testing capacity of the Philippines at the time.

16 “My deepest gratitude goes Revenues Core EBITDA Core Income out to all Maynilad employees, (In P millions) (In P millions) (In P millions) especially our frontliners, for your diligence and hard work, and for 16,294 7,731 7,723 23,992 15,454 15,524 22,937 heeding the call of duty despite 22,024 6,530 the uncertain times. At the height of the pandemic, you kept your eyes on the mission, enabling us to maintain our vital role of providing 9% 5% 0% 15% water and wastewater services to 4% 5% millions of households. Everyone got used to wearing PPEs, and adjusted to unfamiliar work-from- home conditions. Some even had 2018 2019 2020 2018 2019 2020 2018 2019 2020 to make our treatment plants their home during the strictest phase of the lockdown, just to make FINANCIAL AND OPERATIONAL PERFORMANCE sure our facilities kept running. Notwithstanding the physical • Revenues slipped 4% to P22.9 • Water coverage has grown nearly distance, the collaboration among billion with lower average tariffs one-third under MPIC’s 13 years those working from home, manning • Higher residential demand at of management to 9.8 million facilities, and doing field work grew a lower average tariff offset people, while 17 kilometers of stronger, as employees trusted our lower demand in commerce and new pipes have been laid own efforts to ensure their safety industry with the implementation • Average non-revenue water at and well-being. Year 2020 was of community quarantine the district metered area level difficult for all of us and, indeed, for the entire world. But the courage • Core Net Income fell 15% to P6.5 was at 26% as at December 2020 and dedication you exhibited billion down from 68% fourteen years ago, saving 1 billion liters of water gives me confidence that we can - Higher amortization and every day overcome this and grow all the depreciation expenses due better for it.” to its substantial investments in water source (Putatan 2); RAMONCITO S. FERNANDEZ wastewater reclamation ( President and Chief Executive Officer and Paranaque); and continuing upgrades to facilities

17 Transport and Mobility Infrastructure Development

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC 209,720 8,520 Average daily vehicle Average daily vehicle entries – NLEX entries – CALAX 44,784 300,467 Average daily vehicle Average daily vehicle MPTC promoted the strict implementation entries – SCTEX entries – DMT/CII/NUS of hygiene and COVID-19 prevention protocols which included regular disinfection of customer-facing facilities 125,797 P23.3 billion such as toll booths and customer service Average daily vehicle Capital expenditure centers, installation of thermal scanners, entries – CAVITEX foot baths, hand sanitizers and transparent protective curtains at workstations, and the provision of masks and PPE to all Metro Pacific Tollways Corporation (MPTC) holds the concession rights employees. to construct, operate, and maintain the (NLEX), Subic-Clark- Expressway (SCTEX), Cavite Expressway (CAVITEX), Cavite- Laguna Expressway (CALAX) and the Cebu Cordova Link Expressway (CCLEX). Considered as one of the largest toll road developers in the Philippines in terms of combined length of expressways, MPTC continues to develop the country’s road infrastructure, significantly improving the safe and rapid movement of goods and services, and connecting and integrating even more people, value chains, and markets. Today, NLEX is the main artery connecting Metro Manila MPTC also granted special access to to North and , including three of the top economic zones in the NLEX to over 300 vehicles of the Inter- region: the Subic Bay Freeport, the Clark Freeport Zone, and the Central Techno Agency Task Force for the Management Park in Tarlac. Meanwhile south of Metro Manila, CAVITEX and the recently of Emerging Infectious Diseases (IATF), completed sections of CALAX connect the national capital with the booming DOH, and other groups going to and from provinces of Cavite, Laguna, and Batangas. Lastly, CCLEX is set to be the new the quarantine facility in Philippine Arena landmark in the country, it will connect mainland Cebu from Cebu City to the Complex in Bulacan. Municipality of Cordova in Mactan Island.

MPTC provided about P3 million worth of tollfree access to all expressways to over 3,600 medical frontliners.

18 Revenues Core EBITDA Core Income (In P millions) (In P millions) (In P millions)

18,503 13,267 5,265

15,486 10,474 4,450 13,564 8,771 2,697 19% 27% 18% 27% 34% 49%

2018 2019 2020 2018 2019 2020 2018 2019 2020

FINANCIAL AND OPERATIONAL PERFORMANCE

• Revenues declined 27% to P13.6 • Traffic on international toll billion due to reduced traffic roads (Vietnam, Indonesia and caused by movement restrictions Thailand) during prolonged periods of - Average daily vehicle entries “In the tollway business, we daily quarantine declined 26% to 300,467 rise to the level of excellent service, • Traffic on toll roads in the in 2020 compared with enabling people to be on the move Philippines 404,634 in 2019 due to safely, comfortably—and without delay. During this pandemic, our - Average daily vehicle entries ongoing construction and people have learned that serving declined 28% to 388,821 in 2020 road integration within their our motorists entail sacrifice, to compared with 536,850 in 2019 concession areas whom we now execute a snappy - Implementation of various - Daily vehicle entries averaged salute for their quiet heroism.” 574,100 for the first two months measures (from curfews of 2020, an increase of 14% from to regional lockdowns) to RODRIGO E. FRANCO 2019 but declined to 86,000 limit movement of people President and Chief Executive Officer when the strictest level of and vehicles in response to quarantine was implemented the threat of COVID-19 also reduced traffic - Traffic gradually recovered as restrictions were eased with • Core Net Income dropped 49% to traffic averaging at 480,643 in P2.7 billion December 2020 (down 18% versus December 2019)

19 Transport and Mobility Infrastructure Development

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC 116 51 million Number of light rail Total number of riders vehicles

186,021 P3.9 billion Average daily ridership Capital expenditure

UVC technology was adopted in the disinfection and sanitation activities for the 119,329 Light Rail Vehicles (LRVs) at the revenue line Total passenger trips and depot. Advance filtration technology using high efficiency particulate air and activated carbon filters was utilized for the air conditioning units (ACU) of the LRVs. Light Rail Transit Line 1 (LRT-1), on the other hand, used to be hobbled by poorly maintained trains, long queues, and constant customer complaints. Through LRMC, MPIC took on the operations and maintenance of LRT-1 after winning the project as the lone bidder in 2015. The concession covered the original 18 passenger stations from Baclaran to Monumento plus the North Line Extension (NLE), which has passenger stations at Balintawak and Roosevelt with track miles of 12.21 kilometers. Likewise, its LRT-1 Cavite Extension achieved 50% progress as of December 31, 2020. LRMC modernized LRT-1 and LRMC provided shuttle services for introduced innovations that resulted in a marked increase in trains and trips, healthcare workers of MPIC hospitals from ridership, and customer satisfaction in less than two years. It reduced passenger 5:00 AM until 7:00 PM. waiting time, improved safety and cleanliness, extended operating hours, and garnered ISO certifications for quality (ISO 9001:2015) and environment (ISO 14001:2015) management. All these milestones are unprecedented in the 32- year history of Manila’s oldest light rail system.

Strict implementation of physical distancing, mandatory face masks and face shields, no eating, talking and use of mobile phones inside the train. As well as provision of alcohol dispensers, thermal scanners and isolation areas at the stations; disinfection of end terminals and frequently touched areas are among the measures implemented.

20 Revenues Core EBITDA Core Income (In P millions) (In P millions) (In P millions) 988 716 3,310 3,287 645 744

25% 10%

“Our 1,200 strong team at LRMC – 1% 1,263 from our station tellers to the train 194% 207% operators, engineering, and support 62% teams – each one contributed in (700) (689) providing trips for over 12 million 2018 2019 2020 2018 2019 2020 2018 2019 2020 passengers many of whom are frontliners. All have contributed to our country in its time of need. I am thankful for everyone at LRMC, FINANCIAL AND OPERATIONAL PERFORMANCE who continue to be in the service of giving people safe and efficient • Revenues declined 62% to P1.3 with 446,943 during the 361 transport. I am inspired by how billion due to suspended and then operating days in 2019. Ridership our team members have remained reduced services as mandated by was limited to 13% capacity in resilient in serving our passengers quarantine protocols June and then increased to 30% in despite the challenging times. October 2020 • Average daily ridership was Every LRMC team member is a down to 186,021 during the 274 • Reported a Core Net Loss of P689 valuable piece in delivering our operating days of 2020 compared million bigger purpose. All of us can make a difference in whatever work we do. This is our country, and it is upon us to make it better for the next generation.”

JUAN F. ALFONSO President and Chief Executive Officer

21 All-inclusive and Affordable Health Care

OUR RESPONSE TO THE KEY PERFORMANCE HIGHLIGHTS COVID-19 PANDEMIC 3,590 2.5 million Number of beds Number of out-patients

43% 107 thousand Average occupancy rate Number of in-patients

170,000 individuals were tested for Covid-19 by MPHHI Hospitals. More than 23,000 tested COVID-19 positive and 5,000 were admitted 9,095 P2.8 billion across the network. Number of accredited Capital expenditure doctors

MPIC is committed to promoting health and wellness for all Filipinos, regardless of income status or demographic profile. Metro Pacific Hospitals Holdings, Inc. (MPHHI) is the largest private hospital operator in the Philippines, with 18 hospitals across the country serving an average of 2.8 million patients every year. It has consistently delivered outstanding MPHHI hospitals swiftly responded to the healthcare services at affordable rates to every patient. public health emergency by ramping up their dedicated COVID-19 bed capacities to treat their patients. At the height of the pandemic, total allocation within the network reached 850 beds. MPHHI opened multiple wards for patient isolation, deployed additional nurses, and distributed medical supplies and personal protective equipment (PPE) to ensure the health and safety of its medical workers.

MPHHI secured DOH accreditation for the majority of its hospitals to operate as COVID-19 testing facilities.

22 Revenues Core EBITDA Core Income (In P millions) (In P millions) (In P millions)

15,921 4,241 1,486 14,799 1,277 12,922 3,314

2,480 23% 28% 7% 16% 42% 262 82% “We can never thank all our 2018 2019 2020 2018 2019 2020 2018 2019 2020 colleagues enough for their dedication to our mission of saving lives -- from our hardworking MPHHI FINANCIAL AND OPERATIONAL PERFORMANCE frontliners, nurses, doctors, other medical professionals, all hospital • Revenues decreased 7% to P14.8 staff, our indefatigable management billion teams, our head office staff, to • In-patient admissions dropped our other friends outside MPHHI 46% to 106,546 while out-patient including our outsourced service visits fell 36% to 2.5 million as providers, other companies within patients opted to defer elective the group, led by our Chairman procedures and all our Group officers and staff, and all other parties who have • Consolidated Core Net Income contributed one way or another to declined 82% to P262 million supporting us during these most - There were significant difficult of times. Maraming salamat increases in personnel costs sa inyong lahat.” and medical supplies such as personal protective equipment AUGUSTO P. PALISOC JR. which are heavily used to President and Chief Executive Officer ensure health and safety for our healthcare practitioners and patients

23 Positive Community Advocacies and Programs

Metro Pacific Investments Foundation (MPIF) continues its corporate social responsibility efforts as a means of giving back to its partner communities. These programs, built upon the Foundation’s pillars of Environment, Education and Economic empowerment/entrepreneurship, bring about significant and sustainable changes in the lives of our partner sites and organizations. MPIF’s initiatives provide access to better education and more livelihood opportunities, while also ensuring the protection of our environment and the conservation of our resources.

COVID-19 INITIATIVES In March of 2020, the COVID-19 pandemic brought the whole world to a standstill, putting the country in a time of uncertainty and anxiety. Though no one was completely prepared for this situation, it has opened the opportunity to turn MPIF’s corporate social responsibility programs into more collaborative efforts with key partners, primarily Tulong Kapatid.

Guided by the Filipino custom of bayanihan, the mutual help and concern for fellowmen, Tulong Kapatid (TK), the alliance of foundations under the Manuel V. Pangilinan group sought out communities that have received little to no social amelioration from the government or other organizations. The group focused on aiding the vulnerable sector: senior citizens and the disabled, pregnant/ breastfeeding mothers, indigenous communities, informal settlers, homeless individuals, and displaced / laid-off workers.

Aside from TK and the MVP group, the Foundation was able to successfully carry out these initiatives with key collaborators such as partner LGUs, government and non- government agencies, company sponsors, and suppliers whose services also helped other sectors in need.

Thank you for Being our Heroes: PPE Distribution for Frontliners MPIF delivered approximately 5,000 PPEs to over 14 hospitals, healthcare centers, quarantine facilities, and LGUs. Beneficiaries included the Research Institute for Tropical Medicine, Philippine Genome Center, Our Lady of Lourdes Hospital, Candelaria Municipal Hospital, Dr. Jorge P. Royeca Hospital - General Santos City, Cotabato Regional Medical Center, Bishop Joseph Regan Memorial Hospital - Tagum, Kidapawan Doctors Hospital, Zamboanga City Medical Center, South Cotabato Provincial Hospital - Koronadal, Northern Mindanao Medical Center - Cagayan de Oro City, Butuan City LGU, the Province of Agusan del Norte, Province of Surigao del Norte, Pampanga.

Items provided include 1,000 virus specimen test tubes, 500 boxes of Clusivol, 400 coveralls, 100 pairs of protective eyewear, 800 pairs of gloves, over 1,000 PPE kits, 10 Tulip Tabletop water filters, and 300 face shields.

24 Kaya Natin ‘To: MPIF’s relief support for the marginalized sector / OPLANILAO: Relief Support for Displaced/Stranded Workers in Batangas Kaya Natin ‘To is a relief program launched during the onset of the quarantine, to help marginalized and vulnerable sectors cope with the impact on livelihood of the COVID-19 pandemic, by providing basic needs such as food and personal care items.

MPIF delivered more than 3,700 relief packs, including over 8,000 kgs of vegetables sourced directly from Agrea Agricultural System International Inc., supporting the livelihood of farmers from . Aside from tourism workers and low-income households, the program also prioritized the vulnerable population comprised of persons with disabilities, informal settlers, senior citizens, pregnant and lactating mothers, and indigenous minorities - particularly, the remote Aeta community in .

Bayan Tanim!: MPIF’s fundraising drive for sustainable living Bayan Tanim! forms the third phase of MPIF’s COVID-19 response strategy. The initiative taps the potential of small-scale gardening to help disadvantaged communities cope with the adverse impacts of the pandemic, providing them with the resources to cultivate food sustainably. It was “Amid this pandemic, our corporate designed to distribute planting crates containing essentials such as seeds, social responsibility initiatives seedlings, fertilizer, and potting mix. Through Bayan Tanim!, beneficiaries can were mobilized with the spirit of become self-sufficient with food thereby improving their food security and bayanihan in mind - the same spirit long-term resilience. that extends a hand whenever we fall, prospers more amidst adversity. This program delivered over 500 crates in seven communities - benefitting These are trying times, but they are an estimated 800 households across Metro Manila. MPIF intends to carry on obstacles we can conquer when we the initiative through community markets as livelihood in the future, and work hand-in-hand.” to expand distribution. The program was also done in partnership with the Department of Agriculture, First Pacific Co. Ltd., Light Rail Manila Corporation, MELODY M. DEL ROSARIO and AGREA Agricultural International System Inc. VP, Public Relations and Corporate Communications, MPIC Tuloy Pa Rin Ang Pasko (TPRAP) President, MPIF With the pandemic and various typhoons afflicting the country in 2020, many Filipinos have been left with very little, making the holiday season difficult to celebrate. The MVP Group embarked on a country-wide donation drive called Tuloy Pa Rin Ang Pasko (TPRAP), where 22 companies and foundations under the leadership of Manuel V. Pangilinan, united to pool funds and provide Noche Buena packs for families to enjoy despite trying times.

MPIF brought Christmas cheer and hope by distributing noche buena packs to 100 street dwellers/homeless individuals in Manila and 203

25 Positive Community Advocacies and Programs

boatmen, dive resort personnel, and their families in the coastal barangays of Mabini, Batangas, who were badly affected by the pandemic and the calamities.

The Foundation also called for donations of clothes, toys, and books from MPIC Employees and purchased sacks of rice from Cropital, a platform that helps finance local farmers whose livelihoods have also been compromised by the pandemic. The donations and rice sacks were donated to 232 families residing in Montalban, Rizal.

Additionally, MPIF also continued its support for its Shore It Up! Front- liners – the Mangrove Eco-guides in Siargao; and the Marine Protection, Inspection, and Conservation guardians in Oriental Mindoro - by providing them and their local government unit counterparts with Noche Buena packs.

SHORE IT UP! Shore It Up! (SIU), MPIF’s flagship environmental program for more than a decade now, helps coastal communities employ better and more sustainable environmental protection and conservation practices with a focus on marine life. Due to the pandemic, MPIF’s annual SIU events have been postponed in 2020, to prioritize more pressing efforts to help those most in need.

However, MPIF maintained its commitment to its Shore It Up! frontliners – the Mangrove Eco-Guides and Marine, Protection, Conservation, and Inspection (MPIC) Guardians – by ensuring that their livelihoods continue amid the pandemic. These individuals serve as the local environment stewards of their community and MPIF made certain that they were not left behind.

Marine Protection, Inspection and Conservation Guardians The 36 MPIC Guardians (27 in Medina, Misamis Oriental and 9 in Puerto Galera, Oriental Mindoro) were continuously provided with their monthly allowances, as well as two waves of support in the form of grocery packages to help sustain them and their families amid the pandemic.

Mangrove Eco-Guides The six (6) Mangrove eco-guides who work in the Mangrove Protection/ Propagation and Information Centers (two in Alaminos, Pangasinan and four in Del Carmen, Siargao) were continuously provided with their monthly allowances. They were also provided with relief support in the

26 form of grocery packages to help sustain them and their families amid the pandemic.

CALAMITY AND OTHER SOCIAL DEVELOPMENT

Taal Relief Operations Metro Pacific Investments Foundation (“MPIF”) organized a relief support program for victims of the Taal volcano eruption and mobilized resources to distribute blankets, mats, shirts, food, and water filters. MPIF provided quality medical consultations to residents, through the Makati Medical Center’s doctors and healthcare staff.

Upon identifying communities that have received little to no assistance from other companies, the Foundation redirected undistributed surplus from some evacuation centers to more than 1,000 affected residents of barangays Poblacion, Majuben, San Jose, and Anilao East in Mabini, Batangas.

Calamity Response for Typhoon Victims After the successive onslaught of typhoons Quinta, Rolly, Siony, Tonyo and Ulysses during the COVID-19 pandemic, many provinces experienced losses of billions of pesos in damages and millions of families lost their homes, livelihoods, and their loved ones.

In coordination with Tulong Kapatid, MPIF distributed 500 kgs of vegetables to boatmen, crew, and their families in Batangas. 500 bottles of water from Maynilad. 200 grocery packs from One Meralco Foundation (“OMF”) were also distributed to these typhoon victims who had already lost their livelihoods due to the subsequent lockdowns.

MANO AMIGA

Mano Amiga Scholarship Support MPIF continues to provide scholarship for 23 scholars, now in Grade 10, and teacher’s professional development at the Mano Amiga Academy, Parañaque City. The educational scholarship started when they were in kindergarten and the Foundation intends to see them through until they graduate high school. An annual grant of P500,000.00 is further provided for teacher trainings that are held four times a year. Mano Amiga also provides the Foundation with yearly reports on the scholars’ academic progress.

27 4 MPIC Heroes 5

8

3 6

1 7 2

We honor our employees across the group who have gone above and beyond the call of duty to ensure that we were able to deliver essential services despite the daunting challenges brought about by the COVID-19 pandemic. We acknowledge everyone’s resolve to sustain our business operations and exemplify resilience in this unprecedented time. You truly are our HEROES!

Leonyrick T. • Leader of the Stay-in Skeletal Work Force Jesus M. Manuel 5 • Rendered 23 years of service in Nazareno 1 of South Maintenance team which repairs Leadman; Customer Maynilad as a leadman in the Fairview/ WM Technician highly critical equipment of four Sewage Experience and Retail Commonwealth Business Area Treatment Plants (STPs) Operations (CXRO) • Tested positive for COVID-19 and • Stayed for six straight months in experienced liver disease complications Maynilad’s STPs at the height of the on August 2020. He succumbed to the lockdown to ensure that facilities would disease in September 2020. continue operating • Maynilad provided financial assistance Joben Ryan • Initiated the creation of additional and organized donation drives among Padre 2 Safety Operational Procedures and Work employees to help the Manuel family WM Engineer Instructions for Maynilad’s desludging settle their hospital bills operations Martin S. • Continued reporting for work during • This prevented the spread of COVID-19 Quintano 6 ECQ as part of La Mesa Treatment Plant’s among desludging personnel and service Engineer, Water maintenance team providers Production; Water • Quintano is no stranger to critical Rolly Carillas 3 • Operated vacuum truck units (VTU) Supply Operations missions; in 2019, he was a member of WM Technician; WMD and dump trucks, among other heavy (WSO) the relief team deployed to Kidapawan equipment, to desludge or siphon septic City, Cotabato to bring and operate a tanks in quarantine facilities and hospitals mobile treatment plant that provided in Metro Manila potable water for the earthquake- displaced families Paolo R. Gojar 4 • Headed the team that goes out in the Head, Leak Detection field to detect pipe leaks across the West Stephanee Joy • Continued reporting for work to ensure Services; Central Non- Concession area, ensuring uninterrupted B. Zerrudo 7 that Maynilad customers get 24/7 Revenue Water water supply for households Chemist; WSO access to safe and potable water • Strictly enforced health and safety Jackilyn Cudia 8 • Served as part of the skeletal workforce protocols within his 17-person team, Specialist, South who went back to the office after the resulting to zero COVID-19 cases among BA; CXRO ECQ and attended to the deluge of them customer questions about post-ECQ bills, among other concerns • Braved the frontline duties for three straight weeks since her fellow frontliners had to stay in quarantine

28 13 12 10 11 9

17 18 15 16

14

20 22 23 21 19

25

24 Donna Mae • A multi-awarded ER nurse from De Guia 12 Los Banos Doctors Hospital and Emergency Room Nurse; Medical Center who has earned the Emergency Department Natatanging Juana and the Antonio Luna Front Line Medical Hero awards • Embodied courage and passion to serve as a medical front liner despite having gotten sick Allan Dollete 9 • A pioneering NLEX patrol crew who Head • These Iso heroes—the Nursing Senior Patrol Officer; stepped up during a manpower Geofrey Maglalang 13 Service staff of Los Banos Doctors Traffic Operations shortage and volunteered to serve as Hospital and Medical Center’s 5th Department a temporary toll teller and installer of Staff nurses Floor Isolation Ward—displayed RFID stickers Lourdes Delantar 14 bravery and camaraderie amidst the James Carlo pandemic Andrea Mellind • Developed the guidelines and action Crisostomo 15 • With their drill of having 3 straight C. Madrid 10 plans for LRMC during the early stages Ma. Regina Claire 12-hour shifts, the team earned the Technical Adviser to the of the pandemic Villanueva 16 Jose Rizal Bayaning Frontliners Award President and CEO; Office • Led the HSEQ team for COVID Measure Thrisha Mae for proving their excellence and of the President and CEO Implementation and an ad hoc team Cabuscabus 17 professionalism which contributed to for contact tracing Jennil Legaspi 18 the overall success of the hospital’s • Established the Online Daily Health endeavor Check and Online Teleconsultation Nursing assistants • Team Head Geofrey Maglalang also Platform Evelyn Hernandez 19 garnered the Antonio Luna Front Jaspher Padua 20 Line Medical Hero Award while Staff Louernie F. • Spearheaded the enhancements of Edgie Laksamana 21 Nurses Lourdes Delantar and JC De Sales 11 air-conditioning units in the LRVs with Hector Habacon 22 Crisostomo bagged the Melchora Head of Health, Safety, the use of UVC technology, HEPA and Agustin Magsino Jr. 23 Aquino Nursing Care Hero Award as Environment, and Quality Activated Carbon filters well. Department; Health, • Conducted a research on Safety, Environment, and nanomaterials for surface disinfection Renato B. • A 60-year old widower suffering from Quality Department with UV light as catalyst which Bautista 24 kidney failure, who continuously has been recently accepted in an Internal Messenger reported to work and performed his international journal for the Adoption job well despite his condition. of Technologies in COVID-19 Jezreel Pitt • A 30-year old Operating Room Clerk Management S. Cocal 25 with Chronic Kidney Disease who • Mobilized the installation of bike racks Operating Room (OR) never stopped performing his duty in all stations and depot to facilitate Clerk despite his high-risk condition that inclusive mobility to the employees requires dialysis weekly

29 MPIC Heroes

29

27 28

26

31 32 30

36

35 33 34

40

39 38 37

30 Nursing Officers • Braved the COVID-19 ward of Sacred Luz C. Urgel 34 • Under her supervision, COVID-19 and Ivan Louie O. Heart Hospital of Malolos at the onset of Nurse Supervisor Non-COVID-19 operating rooms and Pascual 26 the pandemic. and Cardiovascular delivery rooms operated as usual amidst Joemelle R. OR Nurse; Operating the pandemic. Open heart surgery and Reyes 27 Room (OR) Unit kidney transplantation operations never Patrick John ceased and were conducted without any U. Cruz 28 complications post-operatively. Alyssa Marie • A 25-year-old Intensive Care Unit Nurse Ma. Cecilia dela • Prepared all PhilHealth, PCSO, and other Lungca 29 and the first Asian Hospital and Medical Pasion 35 NGO requirements where patients can Nurse; Intensive Care Center nurse to be infected by COVID-19 Nurse Supervisor; request for financial support, especially Unit • After recovering, she continued to provide Hemodialysis Unit when PhilHealth coverage has already the best care for their patients and treated been exhausted them like family • Regularly monitors the status of the water Jeddalyn • Planned the whole setup of the De Los treatment facility for patient safety and L. Campos 30 Santos Medical Center’s ER and the compliance to DOH requirements for Nurse Supervisor; placement of the transparent barriers, accreditation Emergency guided the triage team who classified Maverick B. • Spreads joy and creates a positive Department and assigned patients to different areas and devised a plan of care, and allocated Calamaan 36 environment that served as a coping personal protective equipment amid Staff Nurse; 4th Floor mechanism and help in the mental well- supply shortages Nurse Station being of his colleagues Jenny Lyn • Led the coordination of the Nursing Team • Participated in online corporate activities P. Toldo 31 with the Infection Control Committee that promote mental and psychological Nurse Supervisor; which ensured that the staff were well-being of front-line workers Critical Care Units properly educated and trained about Michael Bautista 37 • Responsible for the regular and proper current Infection Control protocols Housekeeping disinfection of the private rooms of • Participated in the laying out of the floor COVID-19 positive patients, proper waste plan and the processes for COVID-19 and disposal, and ensuring that the rooms are Non-COVID ICUs which helped prevent 100% infection-free all through out the cross contamination patient’s admission • Her leadership assured thoraco-vascular surgeons to conduct open heart surgeries Racielle Silverio 38 • Responsible for the regular and proper in De Los Santos Medical Center during Housekeeping disinfection inside and outside the the height of the pandemic Emergency Rooms, and ensuring that Joseph T. Usi 32 • Dialyzed patients suspected of or the area is 100% infection-free and Staff Nurse; confirmed to be COVID-positive at a time safe for employees, patients, and their Hemodialysis Unit when guidelines for dialysis treatment companions for COVID-19 patients were just being Ruth dela Cruz 39 • Sacrificed her rest days to augment developed Chief Medical staffing and worked both admin and • Sacrificed his personal comfort for the Technologist technical functions at the height of the sake of his patients; he gave up the room pandemic when manpower was limited he occupied to be converted into a COVID-19 facility Thasmira • Facilitated the provision of shuttle services, de Guzman 40 temporary housing of HCWs, provision Kevin Gabriel • Cared for patients suspected of or HR Officer of grocery packs, timely issuance of PPEs B. Melegrito 33 confirmed to be COVID-positive at the Staff Nurse; COVID-19 onset of the pandemic when guidelines and vitamins, CAMP financial assistance Unit were just barely being made approval for affected employees, • Experienced the ups and downs of being processing of High Risk Allowance and a frontliner, including having to go on 24- Hazard Pay, scheduling of periodic RT-PCR hour straight duty wearing PPE tests, and counselling, among others

31 Sustainability

We began reporting on our sustainability impacts in 2016 and each year, we strived to improve our disclosures further. In line with our commitment toward perpetuating global standards of monitoring the sustainability initiatives of corporations, this year, aside from being guided by the principles of the Global Reporting Initiatives (GRI) Standards, we also endeavored to adhere to the Sustainability Accounting Standards Board (SASB) Framework and was admitted as the first conglomerate SASB alliance member globally. Furthermore, we also committed to the United Nations Global Compact (UNGC) as a Participant, to allow the Company to actively engage at the global level.

2016 to 2019

32 Our sustainability framework was improved to further Our sustainability thrusts have now been defined sharpen its investment focus of sustainably increasing as: Transform, Perform, and Grow, hinged on our the infrastructure capacity of the Philippines. From being commitment to help the country achieve UN SDG 9, purely investment or business driven, our new framework which seeks to “build resilient infrastructure, promote now focuses on how MPIC can become part of the inclusive and sustainable industrialization, and foster solution to the biggest societal needs and challenges. innovation.”

2020 ONWARDS

CONTRIBUTE TO NATIONAL PROGRESS AND IMPROVE THE QUALITY OF LIFE OF FILIPINOS

SUSTAINABILE PORTFOLIO MANAGEMENT

Investment Acquisition Asset Realization

Parent Parent Due diligence Transition

Company screening decision management and exit

SUSTAINABILITY THRUST

Transform Perform Grow

SUSTAINABILITY PILLARS Good Responsible Effective Positive Governance Exceptional Human Capital and Efficient Environmental Community and Ethical Service Excellence Operations Stewardship Impact Business Practices

FOCUS AREAS PROGRESS PLANET PEOPLE

Enable genuine progress Protect our planet Build resilience through

GROUP (Parent Company + Operating Companies) + Operating Company GROUP (Parent and development through in conducting our business human capital and strong our service and businesses and through technology communities

33 Sustainability

Furthermore, the framework’s alignment with the global We recognize our role as stewards of the environment and Economic, Environment, Social, and Governance themes invest in programs that can meaningfully contribute to the are now clearly defined into six pillars, with corresponding areas of focus that matter most to us: Enabling genuine measurable focus areas that can be tracked and compared, progress and development through our services and year after year. businesses; Protecting our planet in the conduct of our business and through technology; and Building resilience SUSTAINABILITY PILLARS through human capital and strong communities. But our work does not end here. Responsible and Efficient Operations Human Capital Excellence FOCUS AREAS PROGRESS PLANET PEOPLE Positive Community Exceptional Service Impact

Effective Environmental Good Governance and Stewardship Ethical Business Practices We are driven by our passion to make a difference, thus proactively supporting local communities through Livelihood generation; Climate adaptation and flood With its diverse portfolio of assets, MPIC is united by one control; Environmental protection initiatives; Quality purpose: to contribute to national progress and improve education; Leadership and youth advancement; and the quality of life of Filipinos. Our new Sustainability Sports development. Framework is anchored on the strength of the essential services we deliver, all of which are vital for any The Board also approved the Charter of the MPIC Group community to thrive and be sustainable. Sustainability Council to support the Company’s renewed focus on Sustainability. The main objective of the Council We manage the key impacts of these business activities by is to harmonize and coordinate the sustainability initiatives prioritizing our stakeholders and promoting a culture of of the MPIC Group for a wider positive impact. accountability across the Group. Details about MPIC’s management approaches to We ensure the welfare and safety of our employees and Sustainability issues are outlined in our 2020 Sustainability enable job creation through the continuous expansion of Report which is published in the corporate website. In our services. We are committed to delivering an excellent that separate report, we have disclosed key performance customer experience and aspire to elevate the standards indicators that help us quantify and evaluate our impacts of service in our country. in these areas.

34 Corporate Governance

Corporate Governance at MPIC is defined as the framework FOR SHAREHOLDERS we use to ensure the following: We keep a running two-way dialogue with shareholders. We update minority shareholders Internal Standards External Evaluation of developments and any changes to strategy. 1 1 From numerous meetings we have had with them Long-term strategy is for the Clearly communicate in 2020, we aggregate their concerns and bring benefit of all stakeholders strategy and business drivers those up to Senior Management and our Board for – with shareholders at the to equity analysts and consideration. Although we do not run our company forefront shareholders via focus group discussions, these concerns are taken into consideration when we implement our 2 2 strategy. In the process, management has aggressive Align the interests of Join organizations to management with shareholders benchmark versus best targets and provides constant updates in order to practices and peers measure progress and quickly address any concerns. 3 Management compensation is driven by a mixture Sufficient Board oversight of core income progression targets and share price of management’s tactical performance. implementation FOR MANAGEMENT Our commitment to Corporate Governance is borne out of Having clear moral guidelines, aggressive targets and a our belief in its importance to our success. We invest in and transparent culture make for a fertile ground to nurture manage companies that provide basic services and are, to and sustain talent. Cream rises to the top and self- one extent or another, regulated by Government. Because policing becomes the norm as everyone is incentivized of this, we and our investee companies operate under to push the company forward and keep stakeholders intense government and public scrutiny. In addition, our happy. We continuously initiated measures in order situation is different to most companies listed in developed to improve access to information and strengthen markets because of our engagement in businesses that processes for our shareholders. may be considered to be imbued with public interest. To improve access to information, we consistently As a result, we focus on putting together a framework that update our website. Statistics on financial and emphasizes transparency, accountability and integrity. operating information is now more easily viewable for The Company confirms its full compliance with its Revised each of our investee companies and we included the Manual on Corporate Governance as mandated by the ability to download historical information. Our Board Securities and Exchange Commission, the Philippine Stock regularly reviews the risk profile of the Company and its Exchange and other applicable government regulatory investments. agencies. BOARD OF DIRECTORS FOR THE GOVERNMENT AND THE PUBLIC Our Board sets strategy, oversees implementation All our dealings with Government are in the public domain by management and ensures that the Company and we provide consumers with enough information implements a robust governance framework. It is made for them to determine our performance versus service up of fifteen members, three of whom are independent standards. Our companies stand behind their services and directors. They represent a wide spectrum of skills at take pro-active steps to rectify any performance issues. In the highest level (descriptions of each Board member addition, we are invested in the country just as much as are included in pages 42 to 43 of this report) and in our companies and we are always pushing ourselves to include leaders of each of our business lines to ensure take positions that benefit everyone. the Board is in tune with developments in our portfolio.

35 Corporate Governance

BOARD ATTENDANCE The MPIC Board meetings for 2020 and the corresponding attendance of our directors are summarized below:

Number of Meetings Board Position Name Date of Election % Held Attended Chairman Mr. Manuel V. Pangilinan 29 May 2020 12 12 100% Member Jose Ma. K. Lim 29 May 2020 12 12 100% Member David J. Nicol (1) 29 May 2020 12 12 100% Member Ray C. Espinosa 29 May 2020 12 12 100% Member Ramoncito S. Fernandez 29 May 2020 12 11 92% Member Augusto P. Palisoc Jr. 29 May 2020 12 11 92% Member Alfred V. Ty 29 May 2020 12 12 100% Independent Director Lydia B. Echauz 29 May 2020 12 12 100% Independent Director Edward S. Go 29 May 2020 12 12 100% Director Jose Jesus G. Laurel 29 May 2020 12 12 100% Lead Independent Director Artemio V. Panganiban 29 May 2020 12 12 100% Member Albert F. Del Rosario 29 May 2020 12 12 100% Member Rodrigo E. Franco 29 May 2020 12 10 83% Member Francisco C. Sebastian 29 May 2020 12 12 100% Member Christopher H. Young 29 May 2020 12 12 100%

(1) Mr. David J. Nicol retired as Executive Vice-President – Chief Finance Officer and Director of Metro Pacific Investments Corporation effective November 30, 2020. His retirement was accepted by the Board of Directors of MPIC during its special meeting on November 26, 2020. During the same meeting, the Board of Directors of MPIC also elected Ms. June Cheryl A. Cabal-Revilla as its Chief Finance Officer, Chief Sustainability Officer and member of the Board of Directors, effective December 1, 2020.

Various Board committees help the Board oversee and evaluate the performance of the Company and management. Each committee is chaired by a Non-Executive Director, majority of whom are Independent Directors, to ensure impartial execution of each committee’s function.

Governance and Sustainability Committee – ensures overall governance framework is robust and compares favorably with best in class practices. An integral part of that is the annual review and implementation of the Company’s Revised Manual on Corporate Governance and sponsorship of any improvements for the Board of Directors’ approval. Pursuant to the mandate of

36 its Charter, the Governance and Sustainability Committee stand for re-election or have been dismissed or where designed an orientation program for new directors to brief the Company had any disagreement with its public and update them on important details and processes relating accountants on financial disclosure issues. to the Company, the functions and relevant mechanisms of the Company’s board committees and the dealings of the The Company’s Internal Auditor reports directly to the Company with its investors and business partners. Audit Committee on the soundness and adequacy of the Company’s internal control processes and procedures. Number of Meetings Name % Number of Meetings Held Attended Name % Artemio V. Panganiban 2 2 100% Held Attended Edward S. Go 2 2 100% Edward S. Go 4 4 100% Lydia B. Echauz 2 2 100% Lydia B. Echauz 4 4 100% Francisco C. Sebastian 4 4 100% Audit Committee – has oversight of financial reporting and internal controls of the Company. It is responsible for Risk Management Committee - assists the Board in recommending the external auditor and ensuring that non fulfilling its oversight responsibilities over the Company’s audit work does not compromise their independence. The enterprise risk management policy and execution of risk Audit Committee also approves the Internal Audit function management strategies and practices including regulatory and its scope of work. and ethical compliance monitoring. The Committee investigates the risk exposures of the Company and The Audit Committee reviews and pre-approves all evaluates the steps the management is taking in audit services of our independent and external auditor, managing and controlling such exposures. Sycip Gorres Velayo & Co. (SGV) before these services are performed. In connection with this, the Committee approved For Risk Management, the goal is to identify risk exposures the audit and non-audit related fees of P51.1 million for 2020 and the steps that need to be undertaken to monitor and and P32.2 million for 2019, broken down as follows: mitigate them. The Chief Risk Officer periodically conducts a company-wide risk assessment for evaluation by the Risk Year Audit Fees Non-Audit Fees Management Committee. 2020 P26.5 million P24.6 million Number of Meetings 2019 P26.5 million P5.7 million Name % Held Attended The audit fees include the year-end audit and quarterly Edward S. Go 4 4 100% Lydia B. Echauz 4 4 100% review of the Company’s financial statements, and other Alfred V. Ty 4 4 100% services that are normally provided by the independent auditor in connection with statutory and regulatory filings Compensation Committee – directly oversees or engagements. This category also includes advice on the compensation of senior executives and overall audit and accounting matters that arose during, or as compensation framework for all employees. They a result of, the audit or the review of interim financial ensure targets are set aggressively and management is statements. motivated to perform for the long term. As mandated by its Charter, the Compensation Committee also exercises There was no instance when the Company’s external functional oversight on matters pertaining to the areas auditor resigned or have indicated that they decline to of leadership development, including but not limited

37 Corporate Governance

to the development and administration of leadership/ Number of Meetings Name % succession. Held Attended Lydia B. Echauz 2 2 100% Number of Meetings Artemio V. Panganiban 2 2 100% Name % Held Attended Edward S. Go 2 2 100% Francisco C. Sebastian 2 2 100% Albert F. Del Rosario 2 2 100% Jose Ma. K. Lim 2 2 100% Lydia B. Echauz 2 2 100% June Cheryl Cabal-Revilla 2 2 100% Manuel V. Pangilinan 2 2 100% (alternate of Jose Ma. K. Lim)

Nomination Committee – responsible for vetting and Each of the six committees adopted its own Charter to guide recommending members for nomination to the Board the Committee members in the performance of their functions of Directors, including membership in the various and to formalize the applicable procedural mechanisms and Board Committees. The Nomination Committee has oversight function of each committee. All of the Charters were the authority to utilize professional search firms or presented to and approved by the Board. other external sources of candidates when searching for candidates to the board of directors pursuant to its As we implement our governance framework, we continuously Charter which provides that the Nomination Committee test against best practices and peers by joining organizations has the authority to avail of resources and authorities focused on Corporate Governance and submitting to outside appropriate to discharge its functions, duties and evaluation against our peers and recognized standards. To date responsibilities including the authority to obtain advice we have joined, through our Corporate Governance Officer, the from external consultants and functional specialists Institute of Corporate Directors and the Ethics and Compliance within the Corporation. Prior to the scheduled Annual Initiative and the Good Governance Advocates and Practitioners Stockholders’ Meeting, the Nomination Committee of the Philippines. These institutions regularly meet to discuss review the qualifications of the individuals nominated current best practices and conduct seminars on developments as the Corporation’s regular and independent directors. in Corporate Governance. In addition, our employees have Particularly for the latter, the Committee assesses the attended various seminars on governance throughout the independence of Independent Directors. year in order to expand their knowledge of past misdeeds and potential pitfalls in order to better prepare for any eventuality. Number of Meetings Name % Held Attended Recognizing that employees may be discouraged to report Christopher H. Young 2 2 100% irregularities for various reasons, the Company adopted a Lydia B. Echauz 2 2 100% Whistle-blowing Policy (“Whistle-blowing Policy”) as an internal Edward S. Go 2 2 100% control mechanism, consistent with the purpose of maintaining Jose Ma. K. Lim* 2 2 100% internal corporate justice. The Whistle-blowing Policy provides *non-voting an internal and confidential reporting channel to report any serious concerns about any suspected misconduct, malpractice Finance Committee – reviews the Company’s key or irregularity in the Company. In line with its thrust to adopt best financial and investment strategies, including capital practices not just in the head office but also in all its subsidiaries, allocation decisions and monitoring investment the Company encouraged all its operating companies to adopt performances. It also identifies any related matters or develop their own Whistle-Blowing Policy that is tailor-fitted for referral to the Board for review and further to the individual operation of each company. MPIC’s Whistle- consideration. Its creation was approved by the Board on Blowing Policy is available in the Company’s website (http:// February 4, 2020. www.mpic.com.ph/corporate-governance-our-policies/).

38 Risk Management

RISK MANAGEMENT GOVERNANCE STRUCTURE

President MPIC Head Office and CEO Department Heads (Risk Owners) Board of Chief Risk Officer/ ERM Office (Also CFO/CSO) Directors Investees’ / Operating Risk Management companies’ CROs/ Committee Designated risk champions

RESPONSIBILITIES OVERVIEW OF RISK MANAGEMENT AT MPIC The Board of Directors of Metro Pacific Investments As an investment management and holding Corporation (MPIC or the Company), through the Risk company, MPIC undertakes risk management at a Management Committee (RMC), oversees and monitors number of distinct levels: MPIC management’s adoption of a risk management system. Management is primarily responsible for • On entering new investments the design, implementation, and maintenance of • Ongoing management of the financial stability of risk management procedures and their continuous the holding company improvement. • Risk management within the operating companies • Financial risk management MPIC’s Chief Risk Officer (CRO) leads the implementation of the ERM Policy, as approved by the RMC of the holding The risk management of the operations is primarily company and advocates adoption of the same by the managed within each portfolio company with MPIC investee companies. the most material risks being reported to the Risk Management Committee of MPIC. Each of MPIC’s principal operating companies has their own ERM unit and ERM Policy, under the oversight The active risk management for MPIC itself is focused of their respective RMCs. Regular reviews of the ERM on new investments and holding company liquidity. Policies and risk management practices of MPIC’s major investees are conducted by the CRO to ensure The specific key risks identified by the Group and consistency of the salient provisions of the holding approved by the MPIC RMC include political and Company’s ERM Policy and if possible, align certain risk regulatory, liquidity, competition, current portfolio management practices across the Group. operational execution, and climate change and related issues. These are dealt with in the Risk Factors MPIC’s ERM system aims to identify, analyze, evaluate section of the Company’s 2020 SEC Form 17-A, which and manage risks that may affect the achievement of can be accessed on PSE’s edge website (http://edge. the Company’s business objectives, through a practical pse.com.ph/). approach. The ERM process implemented is based on International Standards Organization (ISO) 31000 : 2018 Risk Management Guidelines.

39 Board of Directors

1. MANUEL V. PANGILINAN Chairman of the Board of Directors

2. ALFRED V. TY Vice-Chairman of the Board of Directors 1 2 3. JOSE MA. K. LIM Executive Director, President and Chief Executive Officer

4. JUNE CHERYL A. CABAL – REVILLA Executive Director, Chief Finance Officer 3 4 and Chief Sustainability Officer

5. JOSE JESUS G. LAUREL Non-Executive Director

6. ALBERT F. DEL ROSARIO Non-Executive Director

7. RODRIGO E. FRANCO 5 6 Non-Executive Director

8. FRANCISCO C. SEBASTIAN Non-Executive Director

7 8

40 9. RAY C. ESPINOSA Non-Executive Director

10. RAMONCITO S. FERNANDEZ Non-Executive Director

11. AUGUSTO P. PALISOC JR. 9 10 Non-Executive Director

12. CHRISTOPHER H. YOUNG Non-Executive Director

13. ARTEMIO V. PANGANIBAN Lead Independent Director

14. EDWARD S. GO 11 12 Independent Director

15. LYDIA B. ECHAUZ Independent Director

13 14

15

41 Board of Directors Expertise Profile

Director Primary Occupation & Other Number of Meetings Name Age A C N R F GS Since Public Company Boards Held Attended Manuel V. 74 2006 Chairman of The Board of M 12 12 Pangilinan Directors Non-Executive Director Board: Philippine Long Distance Telephone Company, Manila Electric Company, Philex Mining Corporation, Philex Petroleum Corporation, Roxas Holdings, Inc Alfred V. Ty 54 2015 Vice Chairman of the Board of M 12 12 Directors Board: Metropolitan Bank & Trust Company, GT Capital Holdings, Inc. Jose Ma. K. 69 2006 President and Chief Executive M M 12 12 Lim Officer (1) (3) Executive Director Board: Manila Electric Company David J. Nicol(2) 61 2010 Executive Vice President and Chief 12 12 Finance Officer Executive Director Jose Jesus G. 66 2018 Non-Executive Director 12 12 Laurel

Albert F. Del 81 2016 Non-Executive Director C 12 12 Rosario Board: Philippine Long Distance Telephone Company, Inc., Rockwell Land Corporation Rodrigo E. 61 2016 Non-Executive Director 12 10 Franco

Francisco C. 65 2016 Non-Executive Director M M 12 12 Sebastian GT Capital Holdings, Inc., Metropolitan Bank & Trust Company

(1) Mr. Jose Ma. K. Lim is a non-voting member of the Nomination Committee (2) Mr. David J. Nicol retired as Executive Vice-President – Chief Finance Officer and Director of Metro Pacific Investments Corporation effective November 30, 2020. His retirement was accepted by the Board of Directors of MPIC during its special meeting on November 26, 2020. During the same meeting, the Board of Directors of MPIC also elected Ms. June Cheryl A. Cabal-Revilla as its Chief Finance Officer, Chief Sustainability Officer and member of the Board of Directors, effective December 1, 2020. (3) Ms. June Cheryl A. Cabal-Revilla is the alternate of Mr. Jose Ma. K. Lim

42 Director Primary Occupation & Other Number of Meetings Name Age A C N R F GS Since Public Company Boards Held Attended Ray C. 65 2009 Non-Executive Director 12 12 Espinosa Board: Roxas Holdings, Inc., Lepanto Consolidated Mining Corporation, Philippine Long Distance Telephone Company, Manila Electric Company Ramoncito S. 65 2009 Non-Executive Director 12 11 Fernandez

Augusto P. 63 2006 Non-Executive Director 12 11 Palisoc, Jr

Christopher H. 63 2019 Non-Executive Director C 12 12 Young Board: Roxas Holdings, Inc.

Artemio V. 84 2007 Lead Independent Director M C 12 12 Panganiban Board: Manila Electric Company, Asian Terminals, Inc., GMA Holdings, Inc., GMA Network, Inc., First Philippine Holdings Corporation, Petron Corporation, Robinsons Land Corporation; Jollibee Foods Corporation, Philippine Long Distance Telephone Company Edward S. Go 82 2006 Independent Director C M M M M 12 12 Board: PHINMA Petroleum & Geothermal Corporation, Filipino Fund Inc., PHINMA Energy Corporation Lydia B. 73 2009 Independent Director M M M C C M 12 12 Echauz Board: DNL Industries, Inc., Pilipinas Shell Petroleum Corp.

Qualifications: Committee Position A Audit Committee M Member Industry & Operations Risk Management C Compensation Committee C Chairman Finance & Accounting Government & Regulatory N Nomination Committee R Risk Committee F Finance Committee GS Governance and Sustainability Committee

43 Senior Management

1. MAIDA B. BRUCE Vice President, Strategic Finance for Subsidiaries and Affiliates

2. MARISA V. CONDE Vice President, Technical Finance

3. MELODY M. DEL 1 2 3 ROSARIO Vice President, Public Relations and Corporate Communications

4. KARIM G. GARCIA Vice President, Business Development

5. RICARDO M. PILARES III Vice President, Legal and Compliance Officer 4 5 6 6. MARICRIS C. ALDOVER-YSMAEL Vice President, Investor Relations

7. LOUDETTE T. MALIKSI- ZOILO Vice President, Human Resources

8. KRISTINE A. PINEDA- FRAGANTE 7 8 9 Assistant Vice President, Finance

9. EDISON R. MATEO Assistant Vice President, Information Technology

10. JOSE JESUS G. LAUREL Corporate Governance Officer

11. ANTONIO A. PICAZO Corporate Secretary 10 11

44 Management Teams

RAY C. ESPINOSA President and Chief Executive Officer BETTY C. SIY-YAP Chief Financial Officer ROGELIO L. SINGSON President and Chief Executive Officer, MERALCO Powergen

JAIME T. AZURIN President DOMINADOR M. CAMU, JR. Chief Operating Officer ROCHEL DONATO R. GLORIA Chief Financial Officer

RODRIGO E. FRANCO President and Chief Executive Officer CHRISTOPHER C. LIZO Chief Financial Officer

RAMONCITO S. FERNANDEZ President and Chief Executive Officer RANDOLPH T. ESTRELLADO Chief Operating Officer

RICARDO F. DELOS REYES Chief Financial Officer

45 Management Teams

ERIBERTO R. CALUBAQUIB President and Chief Executive Officer MAIDA B. BRUCE Chief Financial Officer

AUGUSTO P. PALISOC, JR. President and Chief Executive Officer REYMUNDO S. COCHANGCO Chief Financial Officer JOSE NOEL C. DE LA PAZ Director for Business Development DR. JEFFREY H. STAPLES Chief Operating Officer CELSO G. LOPEZ Director for Special Projects

JUAN F. ALFONSO President and Chief Executive Officer ENRICO R. BENIPAYO Chief Operating Officer MARCO D. DUAY Chief Financial Officer

JOSE MA. K. LIM President and Chief Executive Officer RIVIERA H. RATHORE Chief Operations and Transformation Officer MAIDA B. BRUCE Chief Financial Officer

46 Financial Review

Management’s Discussion and Analysis of Financial Item 6. Management’sItem 6. Management’s Discussion Discussion and Analysis and Analysis of Financial of Financial Condition Condition and Results and Resultsof Operations of Operations (MD &Condition A)(MD & A) and Results of Operations

FinancialFinancial Highlights Highlights and Key and Performance Key Performance Indicators Indicators

The followingThe following discussion discussion and analysis and analysisof the Group’s of the Group’sfinancial financial condition condition and results and of results operations of operations should should be read inbe conjunction read in conjunction with the withaccompanying the accompanying 2020 Audited 2020 ACuditedonsolidated Consolidated Financial F inancialStatements Statements and the and the related notesrelated included notes included in this Report. in this Report.Key perfor Keymance perfor indicatorsmance indicators of the Group of the are Group as follows: are as follows:

2020 202020 19 2019201 8 2018 AuditedAudited (in Php (inMillions) Php Millions) Operating Operating Revenues Revenues 61,924 61,92488,157 88,15783,029 83,029 Net income Net attributableincome attributable to owners to ofowners the Parent of the Parent 4,748 4,74823,856 23,85614,130 14,130 CompanyCompany Core EBITDA Core EBITDA 30,642 30,42,260642 42,26037,665 37,665 Core income Core income 10,238 10,23815,602 15,60215,060 15,060 Non-recurring Non-recurring income (expense)income (expense) (5,490) (5,490)8,254 8,254(930) (930) Core EBITDA Core EBITDA margin margin 49% 49%48% 48%45% 45%

OverviewOverview

The Group’sThe Group’sconsolidated consolidated Core Net Core Income Net andIncome Reported and Reported Income declinedIncome declined owing largely owing to largely the to the economiceconomic contraction contraction brought broughtabout by about the COVID by the -COVID19 pandemic-19 pandemic resulting resulting in the following: in the following: (i) reduced(i) rtolleduced road toll traffic road; (ii) traffic suspended; (ii) suspended and then and reduced then reducedlight rail light services rail ;services and (iii); anddecreased (iii) decreased commercialcommercial and industrial and industrial demand demandfor water for and water power and. power.

AdoptionAdoption of New Standardsof New Standards and Interpretations and Interpretations

The CompanyThe Company’s accounting’s accounting policies policiesare consistent are consistent with those with followed those followed in the preparation in the preparation of the of the Company’sCompany’s most recent most annual recent consolidated annual consolidated financial financial statements, statements, taking into taking account into accountthe changes the changesin in accountingaccounting policies policiesand the adoptionand the adoption of the new of theand new amended and amended Philippine Philippine Financial Finan Reportingcial Reporting Standards Standards (PFRS), (PFRS),which became which effectivebecame effective on January on January1, 2020. 1, A 20doption20. A ofdoption new standards of new standards did not have did not a material have a material impact onimpact the Company’s on the Company’s financial financial results. results.Refer to RNoteefer 3to9 ,Note Significant 39, Significant Accounting Accounting Policies Policiesto the to the 2020 Audited2020 AuditedConsolidated Consolidated Financial Financial Statements. Statements.

DescriptionDescription of Operati of Operating Segmentsng Segments of the Group of the Group

As discussedAs discussed under Item under 1 – ItemB. Business 1 – B. Business of Issuer of, t heIssuer Group, the is Group organized is organized into the followinginto the following segments segments based onbased services on servicesand products and products: power,: toll power, operations toll operations, water, rail, water,, logistics rail, logistics and others and. others.

47

49 49

Operational Review Operational Review

I - MPIC Consolidated

The Company’s 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 Company’s results of its operations as presented in its consolidated financial statements as well as management’s assessments of the performance of the Group which is translated to core (or recurring) profit and non-core (or non-recurring) profit.

48 50

2020 versus 2019

MPIC Consolidated Statements of Income

Increase 2020 2019 (Decrease) Audited Amount % (in Php Millions) Operating Revenues 61,924 88,157 (26,233) (30) Continuing operations 40,855 49,276 (8,421) (17) Operations under PFRS 5 21,069 38,881 (17,812) (46) Cost of Sales and Services 30,597 43,721 (13,124) (30) Continuing operations 17,023 19,087 (2,604) (11) Operations under PFRS 5 13,574 24,634 (11,060) (45) General and administrative expenses 12,072 14,779 (2,707) (18) Continuing operations 8,652 8,850 (198) (2) Operations under PFRS 5 3,420 5,929 (2,509) (2) Interest expense 11,760 11,994 (234) (2) Continuing operations 10,010 9,779 231 2 Operations under PFRS 5 1,750 2,215 (465) (21) Share in net earnings of associates and joint 10,732 11,656 (924) (8) ventures Continuing operations 9,802 11,007 (1,205) (11) Operations under PFRS 5 930 649 281 43 Interest income 1,369 2,304 (935) (41) Continuing operations 1,229 1,793 (564) (31) Operations under PFRS 5 140 511 (371) (73) Construction revenue 33,988 42,795 (8,807) (21) Construction costs (33,988) (42,795) 8,807 (21) Other income (expense) - net (942) 9,552 (10,494) (110) Continuing operations: Provision for decline in (1,685) (22,020) 20,335 (92) value of assets Gain on deconsolidation of MPHHI - 32,031 (32,031) (100) Others 743 (459) 1,202 (262) Provision for income tax 4,768 7,778 (3,010) (39) Continuing operations 3,768 5,916 (2,148) (36) Operations under PFRS 5 1,000 1,862 (862) (46) Net income attributable to owners of the Parent 4,748 23,856 (19,108) (80) Company Other comprehensive loss (4,414) (1,476) (2,938) 199 Total comprehensive income attributable to 1,170 22,549 (21,379) (95) owners of the Parent Company Core income 10,238 15,602 (5,364) (34) Non-recurring income (expense) (5,490) 8,254 (13,744) (167)

49

51

Revenues The Company’s revenues from continuing operations decreased by 17% to P=40,855 million reflecting the impact of COVID-19 related quarantine measures on the following segments:

▪ Toll revenues declined by 27% to P=13.6 billion. Average daily entries for 2020 were down by 26% on the NLEX and 37% on the SCTEX. CAVITEX average daily entries for 2020 was also down by 31% despite the opening of the C5 Southlink 3A-1. ▪ Water utilities posted a 3% decrease in revenues due to Maynilad’s decline in commercial and industrial demand slightly offset by the increase in residential demand which were all due to the effect of the community quarantine. The decline in Maynilad’s revenue was partially offset by revenue contribution from MPW’s businesses. ▪ Rail revenues declined by 62% due to suspension of operations from community quarantine in March 17 to May 31 and August 4 to 18. During resumption of operations, the train capacity was limited to 13% as per DOTr directive. ▪ Logistics revenues during 2020 declined by 29% to P=1.1 billion due to winding down of trucking business.

See the relevant segment information under section II - OPERATING SEGMENTS OF THE GROUP.

Cost of Sales and Services Cost of sales and services from continuing operations decreased by 11% to P=17,023 million driven mainly by the decreases in the following accounts: ▪ Grantors’ toll revenue share (PNCC and BCDA fees) and the amortization of service concession assets (using units of production method) both declined with the decrease in road traffic during the community quarantine; ▪ Repairs and maintenance with reduced activities as movements were restricted during the quarantine; ▪ Depreciation and amortization and personnel costs as the logistics segment scaled down the trucking operations; and ▪ Utilities costs with the implementation of work from home arrangements.

See Note 21 - Costs of Sales and Services to the 2020 Audited Consolidated Financial Statements.

General and administrative expenses General and administrative expenses from continuing operations decreased by 2% to P=8,652 million driven mainly by cost rationalization efforts in response to the global pandemic: ▪ Personnel cost reduction as the group pushed for manpower optimization; ▪ Travel-related costs as movements were restricted during the quarantine, and ▪ Advertising and marketing costs were reduced in line with the reduction in the advertising revenues for the toll and rail segment.

See details in Note 22 – General and Administrative Expenses to the 2020 Audited Consolidated Financial Statements.

Interest expense The Company’s consolidated interest expense from continuing operations increased by 2% to P=10,010 million with financing on completed concession projects/segments no longer eligible for capitalization (see Note 12 - Service to the 2020 Audited Consolidated Financial Statements).

Completed projects included the following roads: ▪ Segment 10, a portion of Phase II, which is a 5.76-km four-lane, elevated expressway that starts from the terminal of Segment 9 in Valenzuela City going to Circumferential Road 3 (C-3 Road) in Caloocan City above the alignment of Philippine National Railway (PNR) tracks, was completed in February 2019. ▪ NLEX Corp’s Harbor Link C3-R10 Section completion in June 2020.

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Share in net earnings of associates and joint ventures Share in net earnings of equity method investees from continuing operations decreased by 8% to P=10,732 million mainly due to MERALCO’s full impairment of its investment in Pacific Light Power (PLP), a gas-fired power plant in Singapore (see discussion under section II - OPERATING SEGMENTS OF THE GROUP).

Other income (expense) - net Consolidated other income (expense) for 2020 mainly pertains to additional provisions for decline in value of advances in Landco while 2019 included gain on the deconsolidation of MPHHI, partially offset by provisions for decline in value of assets in water and logistics businesses and penalties for loan prepayment (see Notes 24 and 32 to the 2020 Audited Consolidated Financial Statements).

Consolidated net income attributable to equity holders of the Parent Company Impact of the implementation of quarantine on the Company’s operations and the full provisioning of MERALCO’s investment in PLP resulted in a significant decline of 58% to P=5,009 million in the Company’s consolidated net income attributable to equity holders of MPIC.

Other comprehensive loss - net The Company recognized a net other comprehensive loss of P=4,414 million in 2020 as compared with the net comprehensive loss of P=1,476 million in 2019. Year 2020 includes higher share in actuarial valuation adjustment from MERALCO and cumulative translation adjustments from DMT, CII B&R, PT Nusantara and PNW.

Core Income attributable to equity holders of the Parent Company MPIC’s consolidated core income of P=10,238 million in 2020 declined by 34% as compared with 2019 owing largely to the economic contraction stemming from the Philippine Government’s quarantines to contain the spread of COVID-19. The quarantine reduced toll road traffic, mandated the suspension of rail services, and decreased commercial and industrial demand for water and power resulting in a decrease in contribution from operations of 26%.

Power accounted for =P10.5 billion or 69% of net operating income, its highest-ever proportion. Water contributed P=3.1 billion or 20%, and Tollroads contributed P=2.4 billion or 16%. MPIC’s other businesses, mainly Hospitals, Rail, and Logistics, incurred an overall loss of P=709 million.

The figures referred to above represent MPIC’s share in the stand-alone core income of the operating companies, net of consolidation adjustments. See the relevant segment information under section II - OPERATING SEGMENTS OF THE GROUP.

Non-recurring income (expense) Non-recurring expense amounting to P=5,490 million for 2020 is mainly attributable to the provisioning in full for the remaining carrying value of MERALCO’s investment in PLP and various provisions for impairment.

2019 non-recurring income amounting to P=8,254 million in 2020 is primarily due to deconsolidating the Group's investment in the Hospitals portfolio partly offset by restructuring costs of logistics business and reduction in the carrying values of some of the Group’s water investments.

II - Operating Segments of the Group

Power

MPIC’s power business contributed P=10.5 billion to Core Income for 2020, 9% lower than last year, with reduced contributions from both MERALCO and GBPC.

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MERALCO GBPC Increase 2020 2019 (Decrease) Increase MERALCO Audited Amount % 2020 2019 (Decrease) GBPC Audited Amount % (in Php Millions) (in Php Millions) Revenues 275,304 318,315 (43,011) (14) Revenues 21,069 24,223 (3,154) (13) Expenses 254,313 287,076 (32,763) (11) Expenses 16,421 17,568 (1,147) (7) Core Income 21,711 23,832 (2,121) (9) EBITDA Core 8,669 9,871 (1,202) (12) Reported net income attributable to equity holders Core Income 2,361 2,725 (364) (13) of MERALCO 16,316 23,285 (6,969) (30) Reported Net Income attributable to Capital Expenditures 20,833 20,233 600 3 equity holders of GBPC 2,222 2,628 (406) (15)

Increase Increase Key Performance Indicators (Decrease) Key Performance Indicators (Decrease) 2020 2019 Amount % 2020 2019 Amount % Electricity Sold (consolidated; GWh) 4,929 4,818 111 2 Volume Sold (in mln kwh) 43,572 46,871 (3,299) (7) Bilateral – Generation 3,972 4,005 (33) (1) System Loss (12-month moving average) 6.08% 5.54% 0.54% 10 Bilateral – WESM 496 236 260 110 WESM – Spot Sales 461 577 (116) (20)

MERALCO’s Core Income in 2020 declined 9% to ₱21.7 billion, driven mainly by a 7% decrease in volume sold and higher provision for doubtful accounts. GBPC recorded a 13% decline in Core Net Income to ₱2.4 billion in 2020 down from ₱2.7 billion a year ago. Gross revenues for the year ended December 31, 2020 was at ₱275.3 billion, 14% lower than 2019 while volume dropped by 7% to 43,572 GWh. Total electricity revenues amounted to ₱267.9 billion, 14% Volume sold increased 2% to 4,929 GWh on the strength of additional power supply and ancillary lower reflecting the reduction in purchased power costs. MERALCO’s distribution charge per kWh service agreements that commenced in the latter part of 2019. Despite the increase in volume sold, remains unchanged with aggregate distribution revenues in 2020 lower by 8% at ₱60.6 billion compared revenues declined 13% to ₱21.1 billion as a result of lower WESM prices and demand. with 2019 due to lower volumes sold. The 50%-owned Alsons Thermal Energy Corporation (“ATEC”) increased its contribution to With the easing of community quarantine restrictions beginning May 2020, certain commercial and ₱639 million from ₱434 million a year earlier following the entry into commercial operation of its industrial establishments slowly resumed operations. By end of 2020, residential volumes accounted for 118.5 MW expansion plant through Sarangani Energy Corporation. Volume sold from ATEC’s 38%, commercial at 34% and industrial at 28% of the total, significantly different from the pre-pandemic Mindanao power plants rose 44% to 952 GWh in 2020. share of 30%, 40% and 30%, respectively. In December 2020, MPIC agreed to sell its entire 56% stake in GBPC to Meralco for ₱22.4 billion. MERALCO’s Reported Net Income in 2020 further declined to 30% to ₱16.3 billion owing to non- Management considers that the sale of GBPC to Meralco represents a unification of the group’s strategy recurring charges including a ₱2.7 billion reduction in the carrying value of its investment in PLP in on power generation. The disposal will consolidate the Group’s power generation portfolio and assets, Singapore. with all of the power distribution and generation assets to be held by Meralco. Such consolidation of power distribution and generation assets in Meralco is expected to yield scale and cost efficiencies to the MERALCO spent ₱20.8 billion on capital expenditures in 2020, just 3% higher than in 2019 with the Group while at the same time streamline capital for MPIC’s other growth areas. limited resumption of projects and operations across all sectors during quarantine. Capital expenditures addressed critical loading of existing facilities and supported new demand and customer connections.

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GBPC

Increase 2020 2019 (Decrease) GBPC Audited Amount % (in Php Millions) Revenues 21,069 24,223 (3,154) (13) Expenses 16,421 17,568 (1,147) (7) EBITDA Core 8,669 9,871 (1,202) (12) Core Income 2,361 2,725 (364) (13) Reported Net Income attributable to equity holders of GBPC 2,222 2,628 (406) (15)

Increase Key Performance Indicators (Decrease) 2020 2019 Amount % Electricity Sold (consolidated; GWh) 4,929 4,818 111 2 Bilateral – Generation 3,972 4,005 (33) (1) Bilateral – WESM 496 236 260 110 WESM – Spot Sales 461 577 (116) (20)

GBPC recorded a 13% decline in Core Net Income to ₱2.4 billion in 2020 down from ₱2.7 billion a year ago.

Volume sold increased 2% to 4,929 GWh on the strength of additional power supply and ancillary service agreements that commenced in the latter part of 2019. Despite the increase in volume sold, revenues declined 13% to ₱21.1 billion as a result of lower WESM prices and demand.

The 50%-owned Alsons Thermal Energy Corporation (“ATEC”) increased its contribution to ₱639 million from ₱434 million a year earlier following the entry into commercial operation of its 118.5 MW expansion plant through Sarangani Energy Corporation. Volume sold from ATEC’s Mindanao power plants rose 44% to 952 GWh in 2020.

In December 2020, MPIC agreed to sell its entire 56% stake in GBPC to Meralco for ₱22.4 billion. Management considers that the sale of GBPC to Meralco represents a unification of the group’s strategy on power generation. The disposal will consolidate the Group’s power generation portfolio and assets, with all of the power distribution and generation assets to be held by Meralco. Such consolidation of power distribution and generation assets in Meralco is expected to yield scale and cost efficiencies to the Group while at the same time streamline capital for MPIC’s other growth areas.

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Toll Operations

Increase 2020 2019 (Decrease) Metro Pacific Tollways Corporation Audited Amount % (in Php Millions) Consolidated Statements of Income Net toll revenues 13,564 18,503 (4,939) (27) Cost of Services 7,942 9,060 (1,118) (12) Core EBITDA 8,771 13,267 (4,496) (34) Core Income 2,697 5,265 (2,568) (49) Reported net income attributable to equity holders of MPTC 2,296 4,926 (2,630) (53) Capital Expenditures 23,254 26,172 (2,918) (11)

Increase Key Performance Indicators (Decrease) 2020 2019 Amount % Average Daily Vehicle Entries: NLEX 209,720 283,296 (73,576) (26) SCTEX 44,784 70,551 (25,767) (37) CAVITEX 125,797 183,003 (57,206) (31) CALAX 8,519 - 8,519 100 DMT 58,140 92,914 (34,774) (37) CII B&R 42,266 40,982 1,284 3 PT Nusantara 200,061 270,738 (70,677) (26)

MPTC operates a network of toll roads predominantly in the Philippines and a few in Southeast Asia. MPTC recorded Core Income of ₱2.7 billion in 2020, down 49% from ₱5.3 billion a year earlier as a result of lower traffic on all roads due to movement restrictions during prolonged periods of quarantine. Tollroads in the Philippines: Average daily vehicle entries declined 28% to 388,820 in 2020 compared with 536,850 in 2019. Daily vehicle entries averaged 574,100 for the first two months of 2020, an increase of 14% from 2019 but declined to 86,000 when the strictest level of quarantine was implemented. Traffic gradually recovered as restrictions were eased with traffic averaging at 480,643 in December 2020 (down 18% versus December 2019). MPTC has implemented physical and system improvements to ensure smooth implementation of the “all-RFID toll collection system” in line with the Department Order 2020-012 issued by the Department of Transportation (DOTr). While the implementation of the cashless toll collection has not been without challenges, we are grateful to the local government for working with us in finding workable solutions in improving local traffic conditions by reducing toll plaza congestion, managing RFID sticker issues, and responding to motorist reloading requests. Significant progress in expansion projects was achieved with the full commercial operation for the first sub-section of the Cavite Laguna Expressway and the opening of the NLEX Harbour Link C3-R10 road which directly connects to ports and shortens travel from Manila port to NLEX to only 10 minutes from over one hour.

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Tollroads outside the Philippines: Average daily vehicle entries for MPIC’s toll investments outside the Philippines declined 26% to 300,467 in 2020 compared with 404,634 a year earlier due to ongoing construction and road integration within their concession areas. The implementation of various measures (from curfews to regional lockdowns) to limit movement of people and vehicles in response to the threat of COVID-19 also reduced traffic. In February 2021, MPTC sold its entire 29.45% indirect stake in Don Muang Public Company Ltd. In Thailand for =P7.2 billion. Proceeds from this sale will be used to fund MPTC’s expansion projects.

Water

Maynilad Water Services, Inc. 2020 2019 Increase (Decrease) Audited Amount % (in Php Millions) Consolidated Statements of Income Revenues 22,937 23,992 (1,055) (4) Costs and Expenses 11,335 10,616 719 7 Core EBITDA 15,524 16,294 (770) (5) Core Income 6,530 7,723 (1,193) (15) Reported Net Income 6,425 7,316 (891) (12) Capital Expenditure 7,794 12,380 (4,586) (37)

Key Performance Indicators Increase (Decrease) 2020 2019 Amount % Volume of water supplied (MCM) 725.8 727.3 (1.4) (0) Volume of water billed (MCM) 536.4 535.3 1.1 0 Volume of water billed (MCM) - Consolidated 555.5 553.6 1.9 0 Non revenue water % (average) 26.1% 26.4% -0.3% (1) Non revenue water % (period end) 30.9% 25.3% 5.5% 22 Billed customers (period end) 1,484,128 1,453,979 30,149 2 Customer mix (% based on billed volume) Domestic (residential and semi-business) 83.8% 80.0% 3.8% 5 Non-domestic (commercial and industrial) 16.2% 19.7% -3.5% (18)

MPIC’s water business comprises investments in Maynilad, the biggest water utility in the Philippines, and MetroPac Water Investments Corporation (“MPW”), focused on building new water businesses outside Metro Manila. The water segment’s contribution to Core Income amounted to ₱3.1 billion in 2020, 14% lower than last year, with reduced contribution from Maynilad.

Maynilad Revenues slipped 4% to ₱22.9 billion with lower average tariffs. Higher residential demand at a lower average tariff offset lower demand in commerce and industry with the implementation of community quarantine.

Maynilad’s Core Net Income in 2020 fell 15% to ₱6.5 billion as a result of higher amortization and depreciation expenses as a consequence of its substantial investments in water source (Putatan 2) and waste water reclamation (Pasay and Paranaque) and continuing upgrades to facilities.

Water coverage has grown by nearly one-third under MPIC’s 13 years of management to 9.8 million people, while 17 kilometers of new pipes have been laid. Average non-revenue water at the district

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metered area level was at 26% as at December 2020 down from 68% fourteen years ago, saving 1 billion liters of water every day.

Review of the water concession contracts is ongoing with the Asian Development Bank assisting the Government on the economic and financial aspects of the agreement. As we wait for the final resolution of this matter, Maynilad’s services continue.

Capital expenditures in 2020 amounted to P=7.8 billion. In 2020, Maynilad completed the realignment, replacement and relocation of around 6.7 kilometers of water pipelines to help fast-track the implementation of several government infrastructure projects such as the construction of the Philippine National Railways North, MRT-7, and LRT-1 Extension. The reconfiguration of these pipelines were done in portions of Caloocan, , Valenzuela, Parañaque and Las Piñas to give way for ongoing construction works of these vital projects.

In January 2021, Maynilad’s Putatan Water Treatment Plant 2 (PWTP 2) was conferred an award of distinction under the “Water Project of the Year” category of the Global Water Awards 2020. The Global Water Awards recognize the most important achievements in the international water industry. PWTP 2, Maynilad’s second facility to tap Laguna Lake as raw water source, gained recognition for its crucial role in addressing water security in Metro Manila. The facility was built to help moderate over- dependence on Angat Dam and expand water service to Maynilad customers in the southern part of its West Concession area. This recognition is a testament to Maynilad’s projects stand side-by-side with the best water initiatives in the world.

Rail Increase 2020 2019 (Decrease) Rail Audited Amount % (in Php Millions) Farebox revenues 1,263 3,287 (2,024) (62) Expenses 2,018 2,810 (792) (28) Core EBITDA (700) 744 (1,444) (194) Core Income (loss) (689) 645 (1,334) (207) Reported Net Income (loss) (713) 629 (1,342) (213)

Increase Key Performance Indicators (Decrease) 2020 2019 Amount % Average daily ridership 186,021 446,943 (260,922) (58) Operating days 274 361 (87) (24)

LRMC currently operates LRT-1, a 20-station light rail line traversing from Pasay to Quezon City in Metro Manila.

LRMC reported a Core Loss of ₱689 million in 2020 following the suspension of operations from 17th March to 31st May due to the strict community quarantine. Operations resumed on 1st June 2020, but with ridership limited to 13% of capacity to comply with DOTr guidelines and were again suspended from 4th August to 18th August 2020 with the reimplementation of Modified Enhanced Community Quarantine. In October 2020, following the DOTr’s directive to gradually increase maximum passenger capacities, LRMC adjusted passenger loading capacity to 30%. With the suspension of operations and reduced services mandated by quarantine protocols, revenues declined 62% to ₱1.3 billion. Average daily ridership was down to 186,021 during the 274 operating days of 2020 compared with 446,943 during the 361 operating days in 2019.

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Progress on the upgrading and expansion of the LRT1 continues with the arrival in January 2021 of the first of the thirty (30) Generation-4 (Gen-4) train sets committed by the Government. The state-of-the- art passenger train sets, each with 4 light rail vehicles has a maximum design speed of up to 70 kph and can accommodate around 1,400 passengers per trip. These new trains will undergo rigorous testing and commissioning before it is used for commercial operations.

Construction activities for the LRT-1 Cavite Extension project are currently in various stages of development and continue to achieve progress even amid the community quarantine. Since the start of the civil works in September 2019, the project completion rate has already reached 50%.

Hospitals Metro Pacific Hospital Holdings Inc. operates the largest private hospital network in the Philippines with 18 hospitals and 6 cancer centers nationwide. • Revenues decreased 7% to P=14.8 billion • In-patient admissions dropped 46% to 106,546 while out-patient visits fell 36% to 2.5 million as patients opted to defer elective procedures • Consolidated Core Income declined 85% to P=224 million o There were significant increases in personnel costs and medical supplies such as personal protective equipment which are heavily used to ensure health and safety for our healthcare practitioners and patients • The healthcare sector is at the epicenter of the COVID-19 crisis and our hospital group continues to rise to the occasion to meet the needs of the communities we serve in terms of testing, treatment and preparation for the vaccination drive

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III. MPIC Consolidated Statement of Financial Position

Assets

The following table summarizes the individual increase (decrease) of consolidated asset accounts.

Increase Audited Audited (Decrease) 2020 % 2019 % Amount % (in Php Millions) ASSETS Current assets Cash and cash equivalents and short-term deposits 48,822 34 74,697 71 (25,875) (35) Restricted cash 1,852 1 5,011 5 (3,159) (63) Receivables 8,228 6 14,624 14 (6,396) (44) Other current assets 8,007 6 10,905 10 (2,898) (27) 66,909 47 105,237 100 (38,328) (36) Assets under PFRS 5 75,969 53 - - 75,969 100 142,878 100 105,237 100 37,641 36

Noncurrent Assets Investments and advances 159,474 34 169,092 33 (9,618) (6) Service concession assets 275,864 59 240,489 47 35,375 15 Property, plant and equipment 6,878 1 58,591 12 (51,713) (88) Goodwill 15,337 3 15,676 3 (339) (2) Intangible assets 705 - 3,279 1 (2,574) (78) Deferred tax assets 201 - 927 - (726) (78) Other noncurrent assets 16,459 3 18,487 4 (2,028) (11) 474,918 100 506,541 100 (31,623) (6)

On December 23, 2020, BPHI entered into a share purchase agreement with Meralco PowerGen Corporation (“MGen”), a wholly-owned subsidiary of MERALCO, for the sale by BPHI of 56% of the issued and outstanding shares of GBPC. Upon completion of the transaction, MPIC shall deconsolidate GBPC. Accordingly, GBPC qualified as a group held for deemed disposal as of December 31, 2020 with GBPC’s assets and liabilities previously consolidated in the Company’s statement of financial position reclassified to “Assets under PFRS 5” and “Liabilities under PFRS 5”, respectively, as at December 31, 2020. Hence, significant decreases in the asset and liability accounts are partly attributable to the reclassification of GBPC’s assets and liabilities.

Other movements in the accounts are explained as follows:

• Cash and cash equivalents and short-term deposits – (Decrease) The economic contraction stemming from the Philippine Government’s response to COVID-19 had impacted cash flow from operations (see section Liquidity and Capital Resources for the summary of the Group’s statement of cash flows for 2020).

• Receivables – current and noncurrent portions – (Decrease) Aside from the reclassification of GBPC’s receivables to “Assets under PFRS 5”, the full collection of the receivable from Buhay

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resulted to the decrease in this account (see Notes 8 and 32 to the 2020 Audited Consolidated Financial Statements).

• Other current assets – (Decrease) Decrease attributable to the reclassification of GBPC’s inventories to “Assets under PFRS 5”. GBPC’s inventories include power plant spare parts, consumables, coal and fuel (see Note 9 to the 2020 Audited Consolidated Financial Statements).

• Investments and advances – (Decrease) Decrease in this account is attributable to the following: (i) reclassification of the investment in ATEC to “Assets under PFRS 5”; and (ii) recognition of the share in the investees’ other comprehensive income” (see Note 10 to the 2020 Audited Consolidated Financial Statements).

• Service concession assets – (Increase) Mainly due to the additional capital expenditures (see Note 12 to the 2020 Audited Consolidated Financial Statements for the nature of the additions to the service concession assets).

Aside from the capitalized borrowing costs, significant additions to the service concession asset account include the following: o Toll Operations. Ongoing construction of the following: (i) CALAX; (ii) NLEX Corp’s Segment 10 R10 section project, Subic Freeport Expressway expansion, and the NLEX Connector Road Project; (iii) CIC’s CAVITEX R1 and R1 Enhancement, C5 South Link and Segment 4 extension & Segment 5; (iv) CCLEC’s Cebu Cordova Link Expressway; and (v) PT Nusantara’s Pettarani, Makassar. o Water. For Maynilad: (i) the cost of rehabilitation works and additional construction; (ii) concession fee drawdown for Angat Water Transmission Improvement Project (AWTIP), advance payment for Kaliwa Dam construction and various local component costs. For MPW: (i) additions from the implementation of the water concession project of MPIWI with Metro Iloilo Water District (MIWD) and (ii) various development cost for MPDW. o Rail. Additions substantially pertain to the on-going rehabilitation of the LRT-1 existing line and the construction of the Cavite Extension.

• Property, plant and equipment – (Decrease) Significant decrease attributable to the reclassification of GBPC’s power plant assets and other fixed assets to “Assets under PFRS 5” (see Notes 13 and 33 to the 2020 Audited Consolidated Financial Statements).

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Liabilities and Equity

The following table summarizes the individual increase (decrease) of consolidated liability and equity accounts.

Increase Audited Audited (Decrease) 2020 % 2019 % Amount % (in Php millions) Current Liabilities Accounts payable and other current liabilities 35,172 30 36,363 48 (1,191) (3) Income tax payable 927 1 1,639 2 (712) (43) Due to related parties 2,481 2 5,638 8 (3,157) (56) Short-term and current portion of long-term debt 23,961 21 18,459 25 5,502 30 Liabilities under PFRS 5 40,519 35 - - 40,519 100 Current portion of: Provisions 6,708 6 6,742 9 (34) (1) Service concession fees payable 5,826 5 6,277 8 (451) (7) 115,594 100 75,118 100 40,476 54

Noncurrent Liabilities Noncurrent portion of: Provisions 3,416 1 4,997 2 (1,581) (32) Service concession fees payable 23,608 9 26,621 9 (3,013) (11) Long-term debt 207,405 81 231,450 79 (24,045) (10) Due to related parties - - 2,240 1 (2,240) (100) Deferred tax liabilities 11,161 4 14,170 5 (3,009) (21) Other long-term liabilities 12,265 5 11,137 4 1,128 10 257,855 100 290,615 100 (32,760) (11)

Equity Capital stock 31,661 17 31,661 17 - - Additional paid-in capital 68,638 37 68,638 36 - - Treasury shares (3,420) (2) (4) - (3,416) >100 Equity reserves (943) (1) (574) - (369) 64 Retained earnings 91,898 51 90,650 47 1,248 1 Other comprehensive income (loss) reserve (3,103) (2) 591 - (3,694) >100 Reserves under PFRS 5 129 - - - 129 100 Total equity attributable to owners of the Parent Company 184,860 100 190,962 100 (6,102) >100

Non-controlling interest 59,487 55,083 4,404 8

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• Service concession fees payable – current and noncurrent portions – (Decrease) Decrease pertains to the scheduled payment of service concession fees payable of CALAX and Maynilad net of interest accretion. For the movement in the service concession fees payable, see Notes 17 and 37 to the 2020 Audited Consolidated Financial Statements.

• Due to related parties – (Decrease) The decrease is mainly driven by the scheduled payment of payable to PCEV in relation to the acquisition of shares in Beacon (see Notes 19 and 37 to the 2020 Audited Consolidated Financial Statements).

• Provisions – current and noncurrent portions – (Decrease) Significant decrease attributable to the reclassification of GBPC’s provisions to “Liabilities under PFRS 5” (see Notes 16 and 33 to the 2020 Audited Consolidated Financial Statements).

• Short-term and long-term debt – current and noncurrent portions – (Decrease) Long term debt of GBPC was reclassified to “Liabilities under PFRS 5” (see Notes 18 and 33 to the 2020 Audited Consolidated Financial Statements).

• Treasury Shares – (Increase) Implementation of the Share Buyback Program in 2020 (see Note 20 to the 2020 Audited Consolidated Financial Statements).

• Non-controlling interest – (Increase) Increase is mainly due to the partial disposal of interest in subsidiaries (Note 4 to the 2020 Audited Consolidated Financial Statements and the Consolidated Statements of Changes in Equity for the other movements in the NCI account).

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IV. Liquidity and Capital Resources

The following table shows a summary of the Group’s audited statements of cash flows for the years ended 2020 and 2019 as well as the consolidated capitalization as at December 31, 2020 and 2019:

Increase Audited (Decrease) 2020 2019 Amount % (in Php Millions) Cash Flows Net cash provided by operating activities 21,727 41,020 (19,293) (47) Net cash used in investing activities (31,793) (23,460) 8,333 36 Net cash provided by (used in) financing activities (14,951) 9,044 (23,995) 265 Net increase in cash and cash equivalents (25,017) 26,604 (51,621) (194) Capital expenditures 37,044 52,057 (15,013) (29)

Capitalization Long-term debt net of current portion 207,405 231,450 (24,045) (10) Short-term and current portion of long-term debt 23,961 18,459 5,502 30 Total 231,366 249,909 (18,543) (7) Non-controlling interest 59,487 55,083 4,404 8 Total equity attributable to owners of the Parent Company 184,860 190,962 (6,102) (3)

Cash and cash equivalents 41,539 73,211 (31,672) (43) Short-term deposits 7,283 1,486 5,797 390

As at December 31, 2020, MPIC’s consolidated cash and cash equivalents and short-term deposits totaled P=48,822 million, a decrease of P=25,875 million from P=74,697 million as at December 31, 2019. Lower cash level is due to the decrease in cash provided by operations as the community quarantine impacted earnings and collection of receivables in addition to the scheduled payments and prepayments of loans. Refer to the Company’s Consolidated Statements of Cash Flows in the 2020 Audited Consolidated Financial Statements.

Operating Activities

MPIC’s consolidated net operating cash flow in 2020 posted a 47% decrease from P=41,020 million to P=21,727 largely attributable to the decline in operating results and the lower collection rate due to the ECQ. Lockdown restrictions temporarily disrupted capacity to read water meters and limited ability to collect payments from customers.

Investing activities

Net cash used in investing activities amounted to P=31,793 million during 2020, a 36% increase from 2019 despite lower expenditure in service concession assets and property, plant and equipment in 2020 due to delays brought by ECQ. 2019 benefitted from the proceeds of Exchangeable Bond issued to Buhay which provided significant cash inflow of P=26,091 million (see Note 32 to the 2020 Audited Consolidated Financial Statements).

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Financing Activities

The Company’s consolidated net cash used in financing activities amounted to P=14,951 million in 2020. Significant outflows during the current period included: (i) prepayment of MPIC’s =P6.48 Billion, 10- Year Notes Facility Agreement and AIF’s THB loan; (ii) debt servicing; (iii) scheduled payment of amount due PCEV; (iv) scheduled payment of service concession fees payable; (v) dividends paid; and (vi) acquisition of MPIC shares under the share buyback program.

V. Comparison of Other Financial Years

V(i) 2019 versus 2018: V(i) MPIC Consolidated Statements of Income

Increase 2019 2018 (Decrease) Audited Amount % (in Php Millions) Operating Revenues 88,157 83,029 5,128 6 Continuing operations 49,276 43,257 6,019 14 Operations under PFRS 5 38,881 39,772 (891) (2) Cost of Sales and Services 43,720 42,714 1,006 2 Continuing operations 19,086 16,352 2,734 17 Operations under PFRS 5 24,634 26,362 (1,728) (7) General and administrative expenses 16,272 14,972 1,300 9 Continuing operations 10,183 8,581 1,602 19 Operations under PFRS 5 6,089 6,391 (302) (5) Interest expense 11,994 10,388 1,606 15 Continuing operations 9,779 8,412 1,367 16 Operations under PFRS 5 2,215 1,976 239 12 Share in net earnings of associates and joint 11,402 11,073 329 3 ventures Continuing operations 10,754 10,542 212 2 Operations under PFRS 5 648 531 117 22 Interest income 2,304 1,496 808 54 Continuing operations 1,793 1,059 734 69 Operations under PFRS 5 511 437 74 17 Construction revenue 42,795 27,363 15,432 56 Construction costs (42,795) (27,362) (15,433) 56 Other income (expense) - net 9,552 1,660 7,892 >100 Continuing operations: Provision for decline in (22,020) (798) (21,222) >100 value of assets Gain on deconsolidation of MPHHI 32,031 - 32,031 100 Others (459) 2,458 (2,917) (119) Provision for income tax 11,611 7,008 4,603 66 Continuing operations 3,584 5,375 (1,791) (33) Operations under PFRS 5 8,027 1,633 6,394 392 Net income attributable to owners of the Parent 23,856 14,130 9,726 69 Company Other comprehensive income (loss) (1,476) 321 (1,797) (560) Total comprehensive income attributable to 22,549 14,307 8,242 58 owners of the Parent Company Core income 15,602 15,060 542 4 Non-recurring income (expense) 8,254 (930) 9,184 (988)

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Revenues The Company’s revenues from continuing operations increased by 14% to P=49,276 million in 2019, reflecting improved performances from the following operating segments. ▪ Water utilities posted an 11% increase in revenues on the strength of Maynilad’s 2% billed volume growth together with basic and inflation-linked tariff increases; and (ii) MPW’s Bulk water and Sewage Treatment Plant services contribution. ▪ Toll revenues are higher by 19% with average daily entries for 2019 up by 7% on the NLEX, 13% on the SCTEX and 24% on the CAVITEX compared with 2018 and toll rate increases in NLEX in March 2019, SCTEX in June 2019 and CAVITEX in October 2019. In addition, full year revenues from the consolidation of PT Nusantara beginning July 2018. ▪ Logistics and other revenues during 2019 increased by 20% to P=2,010 million.

The above improvements in revenues were partially offset by the decline in LRMC’s earnings. Rail revenues decreased by 1% driven by decrease in ridership due to shortened operating hours and fewer running LRVs.

See the relevant segment information under section V(i) 2019 versus 2018: Operating Segments of the Group.

Cost of Sales and Services Cost of sales and services from continuing operations increased by 17% to P=19,086 million mainly due to the consolidation of PT Nusantara and increase in concession amortization from continued growth of concession assets through ongoing capital expenditures, as well as increased traffic and billed volume of water (amortization on U-o-P basis) (see Note 21 to the 2020 Audited Consolidated Financial Statements).

General and administrative expenses General and administrative expenses from continuing operations increased by 19% to P=10,183 million in 2019 mainly due to consolidation of PT Nusantara beginning July 2018 and inflationary growth in personnel costs (see Note 22 to the 2020 Audited Consolidated Financial Statements).

Interest expense The Company’s consolidated interest expense from continuing operations increased by 16% to P=9,779 million with new bank loans (see Note 18 to the 2020 Audited Consolidated Financial Statements).

Share in net earnings of associates and joint ventures Share in net earnings of equity method investees from continuing operations increased by 2% to P=10,754 million. In 2018, the Company recognized its share in losses of PT Nusantara under the equity method prior to its consolidation in July 2018.

Other income (expense) - net Consolidated other income (expense) from continuing operations for 2019 provisions for decline in value of assets in water and logistics businesses and penalties for loan prepayment (see Note 24 to the 2020 Audited Consolidated Financial Statements).

For operations under PFRS 5, gain on deconsolidation of MPHHI was recognized in 2019 (see Note 32 to the 2020 Audited Consolidated Financial Statements).

Consolidated net income attributable to equity holders of the Parent Company The increase in this account from P=14,130 million in 2018 to P=23,856 million in 2019 is primarily attributable to the gain on deconsolidation of MPHHI (see Note 32 to the 2020 Audited Consolidated Financial Statements).

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Other comprehensive income (loss) - net The Company recognized a net other comprehensive loss of P=1,476 million in 2019 as compared with the net comprehensive income of P=321 million in 2018. Year 2019 includes higher share in actuarial valuation adjustment from MERALCO and cumulative translation adjustments from foreign operations.

Core Income attributable to equity holders of the Parent Company MPIC’s share in the consolidated core income increased by 4% from P=15,060 million in 2018 to P=15,602 million in 2019 primarily reflecting the following: ▪ Power (distribution and generation) accounted for P=11.7 billion or 55% of the aggregate contribution; ▪ Toll operations contributed P=5.1 billion or 25% of the total; ▪ Water (distribution, production and sewerage treatment) contributed P=3.6 billion or 17% of the total; ▪ Hospital group contributed P=867 million or 4% of the total; and, ▪ the Rail, Logistics and others contributed combined net loss of P=352 million.

The figures referred to above represent MPIC’s share in the stand-alone core income of the operating companies, net of consolidation adjustments. See the relevant segment information under section V(i) 2019 versus 2018: Operating Segments of the Group.

Non-recurring income (expense) Non-recurring income amounting to P=8,254 million in 2019 is primarily due to the deconsolidation of the Group’s investment in the Hospitals portfolio partly offset by restructuring costs of logistics business and reduction in the carrying values of some of our water investments. 2018 non-recurring expenses of P=930 million were primarily due to the net effect of Philippine Peso weakening, project write-downs, loan refinancing and provisions for asset impairment.

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GBPC

V(i) 2019 versus 2018: Operating Segments of the Group Increase 2019 2018 (Decrease) Power GBPC Audited Amount %

MPIC’s power business contributed P=11.7 billion to Core Net Income in 2019, a 7% increase driven (in Php Millions) largely by MERALCO. Revenue 24,223 26,822 (2,599) (10) Expenses 17,568 20,598 (3,030) (15) EBITDA Core 9,871 9,159 712 8 MERALCO Core Income 2,725 2,458 267 11 Increase Reported Net Income attributable to 2019 2018 (Decrease) equity holders of GBPC 2,628 2,431 197 8

MERALCO Audited Amount % Increase (in Php Millions) Key Performance Indicators (Decrease) Revenues 318,315 304,454 13,861 5 2019 2018 Amount % Expenses 287,076 276,012 11,064 4 Electricity Sold (consolidated; GWh) 4,818 4,822 (4) (0) Core Income 23,832 22,408 1,424 6 Bilateral – Generation 4,005 3,688 317 9 Reported net income attributable to equity holders Bilateral – WESM 236 524 (288) (55) of MERALCO 23,285 23,017 268 1 WESM – Spot Sales 577 610 (33) (5)

Capital Expenditure 20,233 13,669 6,564 48

GBPC recorded an 11% growth in Core Income of P=2.7 billion in 2019 from P=2.5 billion in 2018 despite Increase flat sales volumes. Key Performance Indicators (Decrease)

2019 2018 Amount % Core Income remains positive with higher margins on increased WESM prices and ancillary service Volume Sold (in mln kwh) 46,871 44,313 2,558 6 agreements which largely offset the end of various short-term power supply agreements and rising depreciation and interest expenses. System Loss (12-month moving average) 5.54% 5.67% -0.13% (2)

Contribution from 50%-owned Alsons Thermal Energy Corporation (“ATEC”) rose to P=418 million MERALCO’s Core Net Income in 2019 rose 6% to P=23.8 billion, driven by a 6% increase in energy from last year’s P=249 million due to the earnings from ATEC’s expansion plant which started sales, lower borrowing costs on lower debt, and higher investment returns. commercial operations on October 10, 2019. ATEC’s second 105 MW (80 MW contracted) expansion Energy sales rose across all of MERALCO’s customer classes. Residential sector growth accelerated due plant currently supplies electricity to an additional 4 million people in Mindanao. to warmer weather and new customer connections. Commercial sector sales grew on continued GBPC plans to invest in renewable energy projects to complement its current fossil fuel capacity. expansion of business-to-consumer services, while growth in the industrial sector was broadly based.

Lower fuel prices and a stronger Philippine Peso reduced pass-through generation charges with the result that the 5% increase in total revenues to P=318.3 billion was outpaced by the 6% increase in energy sales.

MERALCO spent P=20.2 billion on capital expenditures in 2019 to address critical loading of existing facilities and to support growing demand and customer connections.

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GBPC

Increase 2019 2018 (Decrease) GBPC Audited Amount % (in Php Millions) Revenue 24,223 26,822 (2,599) (10) Expenses 17,568 20,598 (3,030) (15) EBITDA Core 9,871 9,159 712 8 Core Income 2,725 2,458 267 11 Reported Net Income attributable to equity holders of GBPC 2,628 2,431 197 8

Increase Key Performance Indicators (Decrease) 2019 2018 Amount % Electricity Sold (consolidated; GWh) 4,818 4,822 (4) (0) Bilateral – Generation 4,005 3,688 317 9 Bilateral – WESM 236 524 (288) (55) WESM – Spot Sales 577 610 (33) (5)

GBPC recorded an 11% growth in Core Income of P=2.7 billion in 2019 from P=2.5 billion in 2018 despite flat sales volumes.

Core Income remains positive with higher margins on increased WESM prices and ancillary service agreements which largely offset the end of various short-term power supply agreements and rising depreciation and interest expenses.

Contribution from 50%-owned Alsons Thermal Energy Corporation (“ATEC”) rose to P=418 million from last year’s P=249 million due to the earnings from ATEC’s expansion plant which started commercial operations on October 10, 2019. ATEC’s second 105 MW (80 MW contracted) expansion plant currently supplies electricity to an additional 4 million people in Mindanao.

GBPC plans to invest in renewable energy projects to complement its current fossil fuel capacity.

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Toll Operations

Increase 2019 2018 (Decrease) Metro Pacific Tollways Corporation Audited Amount % (in Php Millions) Consolidated Statements of Income Net toll revenues 18,503 15,486 3,017 19 Cost of Services 9,060 7,645 1,415 19 Core EBITDA 13,267 10,474 2,793 27 Core Income 5,265 4,450 815 18 Reported net income attributable to equity holders of MPTC 4,926 4,274 652 15 Capital Expenditures 26,172 11,795 14,377 122

Increase Key Performance Indicators (Decrease) 2019 2018 Amount % Average Daily Vehicle Entries: NLEX 283,296 265,530 17,765 7 SCTEX 70,551 62,684 7,867 13 CAVITEX 181,656 146,315 35,341 24 DMT 92,914 99,479 (6,565) (7) CII B&R 40,982 33,007 7,975 24 PT Nusantara 278,309 306,086 (27,776) (9)

Metro Pacific Tollways Corporation (“MPTC”) recorded Core Net Income of P=5.3 billion in 2019, an 18% increase from P=4.5 billion a year earlier, as a result of higher traffic on domestic roads and tariff adjustments in NLEX, SCTEX and CAVITEX, offset by lower traffic on our regional roads and higher borrowing costs. Overall, MPTC’s system-wide vehicle entries, including both our domestic and regional road networks, averaged 947,708 a day in 2019 versus 913,101 in 2018.

Tollroads in the Philippines: Average daily vehicle entries on all three of our domestic tollways (NLEX, CAVITEX and SCTEX) rose 13% to 535,503 in 2019 compared with 474,529 in 2018.

In 2019, MPTC opened three road developments – (i) the NLEX Harbor Link Segment 10 in February; (ii) in July, the first section of CAVITEX C5 South Link, the 2.2 – kilometer flyover crossing (SLEX) traversing and Pasay City; and (iii) in October, the first 10.7 km of the Cavite-Laguna Expressway (CALAX). The first sub-section of the CALAX, which received authority to start full commercial operations on 11th February 2020, provides travelers with an alternative route between Sta. Rosa-Tagaytay Road and Mamplasan Road, helping to decongest Aguinaldo hi-way and Sta. Rosa-Tagaytay road.

C3-R10 Section of NLEX Harbor Link Segment 10, the elevated expressway that provides direct access between R10 in City and NLEX, had a partial opening in February 2020. MPTC is on track to fully operationalize the entire C3-R10 Section by March 2020. With full completion of this project, travel time from the Port Area to NLEX will be reduced to 10 minutes, significantly benefitting the transport logistics industry as cargo trucks are spared from the truck ban and congestion on local roads.

Meanwhile, construction continues on MPTC’s other road projects – the NLEX , remaining portions of the CAVITEX C5 South Link, CALAX, and the Cebu Cordova Link Expressway. Our tollways management is focused on speeding up Right of Way acquisition to meet Target Completion dates.

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MPTC expects to spend an additional P=25 billion on building roads if it secures the Cavite-Tagaytay- Batangas Expressway (CTBEx), for which it was awarded Original Proponent status. The final award of the CTBEx Project will be subject to a Swiss Challenge expected before the second quarter of 2020.

In 2019, MPTC also made meaningful progress on regulatory matters on our toll roads with the approval and implementation of the new toll rate matrices for NLEX, SCTEX, CAVITEX R-1 and C5 South Link Express Way. The new toll rate matrix for the NLEX addresses toll increases due in 2012 and 2014, albeit on a staggered basis, and also includes recovery of investment in the NLEX Harbor Link Segment 10. The resolution of various regulatory matters encourages us to remain on track with investment programs geared towards increasing the productivity of the economy.

Tollroads outside the Philippines: Average daily vehicle entries for the toll investments outside the Philippines declined 6% to 412,205 in 2019 compared with 438,572 in 2018. Lower traffic volumes on DMT (Bangkok) and PT Nusantara (Indonesia) were due to construction and road integration within their concession areas.

In September 2019, MPTC increased its effective ownership of PT Margautama Nusantara (MUN) from 56.2% to 81.9%. MUN is PT Nusantara’s holding company for toll roads investment.

Water

Maynilad Water Services, Inc. 2019 2018 Increase (Decrease) Audited Amount % (in Php Millions) Consolidated Statements of Income Revenues 23,992 22,024 1,968 9 Costs and Expenses 10,616 9,606 1,010 11 Core EBITDA 16,294 15,454 840 5 Core Income 7,723 7,731 (8) (0) Reported Net Income 7,316 7,368 (52) (1) Capital Expenditure 12,380 11,944 436 4

Key Performance Indicators Increase (Decrease) 2019 2018 Amount % Volume of water supplied (MCM) 727.3 750.8 (23.6) (3) Volume of water billed (MCM) 535.3 527.2 8.2 2 Volume of water billed (MCM) - Consolidated 553.6 546.1 7.5 1 Non revenue water % (average) 26.4% 29.8% -3.4% (11) Non revenue water % (period end) 25.3% 27.1% -1.7% (6) Billed customers (period end) 1,453,979 1,407,503 46,476 3 Customer mix (% based on billed volume) Domestic (residential and semi-business) 80.0% 80.5% -0.5% (1) Non-domestic (commercial and industrial) 19.7% 19.5% 0.2% 1

MPIC’s water business comprises investments in Maynilad, the biggest water utility in the Philippines, and MetroPac Water Investments Corporation (MPW), focused on building new water businesses outside Metro Manila. The water segment’s contribution to Core Income amounted to ₱3.6 billion in 2019, most of it from Maynilad.

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Maynilad Maynilad’s Core Income for 2019 remained flat at P=7.7 billion. While revenues rose 9% to P=24.0 billion Increase from P=22.0 billion in 2018 as a result of the combined effect of increases in tariff (basic and inflation- Key Performance Indicators (Decrease) linked) and the number of water connections, Maynilad’s Core Income remained flat as a result of higher amortization and depreciation expenses as a consequence of Maynilad’s heavy investments in Non- 2019 2018 Amount % Revenue Water Reduction Program and continuing facilities upgrades. Occupancy rate (%) - Standard Beds 71% 68% 4% 5 Total beds available 3,235 3,200 35 1 In September 2019, Maynilad received a copy of a Supreme Court decision that the water No. of Patients – In patient 201,131 193,824 7,307 4 concessionaires and MWSS are jointly and severally liable for violating Section 8 of the Clean Water No. of Patients – Out patient 3,686,721 3,323,104 363,617 11 Act. In October 2019, Maynilad filed a Motion for Reconsideration of the decision to the Supreme Court. Before Maynilad was re-privatized in 2007, there were only two operating sewage treatment No. of Accredited Doctors 8,561 8,373 188 2 plants (“STPs”), sewerage coverage in the West Zone was only 6% of the then 677,930 water-served No. of Enrollees (schools) - average YTD 8,288 7,506 782 10 domestic accounts. Maynilad has since built several new STPs, and, as of December 2019, has expanded its sewerage coverage to 21.2% of the now 9.7 million water-served population. MPHHI reported a 12% rise in aggregate revenues in 2019 on an 11% increase in outpatient visits to 3,686,721 and 4% growth in inpatient admissions to 201,131. Core income rose 14% to P=2.7 billion. Water coverage has grown nearly one-third under MPIC management to 9.7 million people and 3,137 kilometers of new pipes have been laid. NRW at the DMA level has been reduced to 25.3% as at end of MPHHI continues to improve patient care across its network of hospitals and is establishing new service December 2019 from 68% 13 years ago, saving almost 1 billion liters of water every day, or enough centers. water to provide the needs of a large city. On December 9, 2019, Buhay completed its investment in MPHHI through a series of transactions in Despite Maynilad’s excellent record of service delivery, the matter of Maynilad’s two related arbitration common shares in MPHHI and in mandatorily exchangeable bonds issued by MPIC. A significant awards in its favor, has been set aside as the Government conducts a review of the concession proportion of the proceeds will be directed towards investment for further growth and improvement in agreement. patient care.

Maynilad nevertheless remains focused on programs to maximize water distribution from the limited Rail resources provided by the Angat Dam, where water levels have declined to disturbing lows. Maynilad Increase will continue its mission to provide safe, affordable and sustainable water solutions for healthier, safer, 2019 2018 (Decrease) and more comfortable life. Rail Audited Amount %

(in Php Millions) MPW Farebox revenues 3,287 3,310 (23) (1) Outside the Maynilad concession which currently bills approximately 1,470 MLD, MPW currently bills 325 MLD, with planned expansion of up to 633 MLD capacity in the Philippines and 660 MLD in Expenses 2,810 2,567 243 9 Vietnam under current plans. Core EBITDA 744 988 (244) (25) Core Income 645 716 (71) (10) MPIWI, a joint venture between Metro Iloilo Water District and MPW, commenced operation in July Reported Net Income 629 645 (16) (2) 2019. This 25-year joint venture concession aims to improve water delivery, expand service coverage, and reduce NRW from its current level of 50%. MPIWI has a current volume capacity of 90 MLD and serves approximately 210,000 people in its service area. Increase Key Performance Indicators (Decrease) On September 3, 2019, MPW signed a joint venture agreement with Dumaguete City Water District for 2019 2018 Amount % the rehabilitation, operation, maintenance, and expansion of the existing water distribution system and Average daily ridership 446,943 458,021 (11,078) (2) the development of wastewater facilities for P=1.6 billion over 25 years. Available LRV (period end) 116 112 4 4

MPW’s contribution to MPIC is currently immaterial but as these new projects are completed, it is LRMC served an average daily ridership of 446,943 in 2019 peaking at 596,500 riders. While LRMC expected to become a major profit contributor. contributed P=319 million to MPIC’s Core Income in 2019, all earnings are fully reinvested in improving train operations and passenger experience. Healthcare Increase As at December 31, 2019, LRMC had successfully restored 39 Light Rail Vehicles (LRVs), bringing the 2019 2018 (Decrease) total available to 116 from the 77 it inherited in 2015. The resulting surge in available capacity has Healthcare Group Audited Amount % reduced passenger waiting time to less than three and a half minutes during peak hours from more than (in Php Millions) five minutes four years ago. In 2019 alone, LRMC deployed P=8.4 billion of capital expenditures for the Gross Revenues 28,802 25,655 3,147 12 rehabilitation of the train system, structural repairs and improvements, and an extension of the line to Cavite. Expenses 23,002 20,331 2,671 13 Core EBITDA 6,506 5,559 947 17 Most of LRMC’s Station Improvement Project has been completed ahead of a mid-2020 due date with Core Income 2,685 2,357 328 14 the completion of expansion work on the EDSA Station, the line’s second-busiest. Reported Net Income 2,683 2,363 320 14

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Increase Key Performance Indicators (Decrease) 2019 2018 Amount % Occupancy rate (%) - Standard Beds 71% 68% 4% 5 Total beds available 3,235 3,200 35 1 No. of Patients – In patient 201,131 193,824 7,307 4 No. of Patients – Out patient 3,686,721 3,323,104 363,617 11 No. of Accredited Doctors 8,561 8,373 188 2 No. of Enrollees (schools) - average YTD 8,288 7,506 782 10

MPHHI reported a 12% rise in aggregate revenues in 2019 on an 11% increase in outpatient visits to 3,686,721 and 4% growth in inpatient admissions to 201,131. Core income rose 14% to P=2.7 billion.

MPHHI continues to improve patient care across its network of hospitals and is establishing new service centers.

On December 9, 2019, Buhay completed its investment in MPHHI through a series of transactions in common shares in MPHHI and in mandatorily exchangeable bonds issued by MPIC. A significant proportion of the proceeds will be directed towards investment for further growth and improvement in patient care.

Rail Increase 2019 2018 (Decrease) Rail Audited Amount % (in Php Millions) Farebox revenues 3,287 3,310 (23) (1) Expenses 2,810 2,567 243 9 Core EBITDA 744 988 (244) (25) Core Income 645 716 (71) (10) Reported Net Income 629 645 (16) (2)

Increase Key Performance Indicators (Decrease) 2019 2018 Amount % Average daily ridership 446,943 458,021 (11,078) (2) Available LRV (period end) 116 112 4 4

LRMC served an average daily ridership of 446,943 in 2019 peaking at 596,500 riders. While LRMC contributed P=319 million to MPIC’s Core Income in 2019, all earnings are fully reinvested in improving train operations and passenger experience.

As at December 31, 2019, LRMC had successfully restored 39 Light Rail Vehicles (LRVs), bringing the total available to 116 from the 77 it inherited in 2015. The resulting surge in available capacity has reduced passenger waiting time to less than three and a half minutes during peak hours from more than five minutes four years ago. In 2019 alone, LRMC deployed P=8.4 billion of capital expenditures for the rehabilitation of the train system, structural repairs and improvements, and an extension of the line to Cavite.

Most of LRMC’s Station Improvement Project has been completed ahead of a mid-2020 due date with the completion of expansion work on the EDSA Station, the line’s second-busiest.

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Construction work for the LRT-1 Cavite Extension covering the five stations from Pasay City to Paranaque City has started, although long-overdue tariff increases will be necessary to secure financing for this project.

Logistics Metropac Movers, Inc. (“MMI”) is focused on providing our clients with first-class warehousing and cold storage facilities. Optimum locations for distribution centers are currently being evaluated.

MMI is not yet contributing positively to MPIC’s Core Income but following an extensive restructuring in 2019, we expect better in the years ahead.

V(i) 2019 versus 2018: MPIC Consolidated Statement of Financial Position

Assets

The following table summarizes the individual increase (decrease) of consolidated asset accounts.

Increase Audited Audited (Decrease) 2019 % 2018 % Amount % (in Php Millions) ASSETS Current assets Cash and cash equivalents and short-term deposits 74,697 71 47,521 59 27,176 57 Restricted cash 5,011 5 5,421 7 (410) (8) Receivables 14,624 14 12,495 16 2,129 17 Other current assets 10,905 10 12,892 16 (1,987) (15) 105,237 100 78,329 98 26,908 34 Asset held for sale – – 1,250 2 (1,250) (100) 105,237 100 79,579 100 25,658 32

Noncurrent Assets Investments and advances 169,092 33 152,993 32 16,099 11 Service concession assets 240,489 47 205,992 43 34,497 17 Property, plant and equipment 58,591 12 71,926 15 (13,335) (19) Goodwill 15,676 3 27,856 6 (12,180) (44) Intangible assets 3,279 1 3,897 1 (618) (16) Deferred tax assets 927 0 1,270 0 (343) (27) Other noncurrent assets 18,487 4 14,433 3 4,054 28 506,541 100 478,367 100 28,174 6

• Cash and cash equivalents and short-term deposits – (Increase) The significant increase in cash and cash equivalents is attributable to the proceeds from MPIC’s issuance of a Mandatorily Exchangeable Bond to Buhay in relation to the latter’s investment in MPHHI. P=26,091 million out of the total subscription price of P=30.1 billion was settled in December 2019 (see Note 32 to the 2020 Audited Consolidated Financial Statements). Other transactions that contributed to increase in cash included loan drawdowns during the period (with proceeds at approximately P=59 billion) net of scheduled payment of loans and interest, payable to PCEV and additional capital expenditures (see

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section V(i) 2019 versus 2018: Liquidity and Capital Resources for the summary of the Group’s statement of cash flows for 2019).

• Receivables – current and noncurrent portions – (Increase) Mainly driven by the receivable portion of the Exchangeable Bond issued by MPIC to Buhay. As at December 31, 2019, receivable portion of the Exchangeable Bond’s subscription price amounted to P=3,872.5 million.

• Other current assets – (Decrease) Mainly driven by the application of the advances to contractors and suppliers to the relevant asset accounts and deconsolidation of the hospital group.

• Assets held for sale – (Decrease) In December 2019, CEDC concluded the transfer of the transmission assets to the National Grid Corporation of the Philippines (NGCP). The remaining transmission assets were reclassified back to property, plant and equipment.

• Investments and advances – (Increase) Increase significantly attributable to value of the retained investment in MPHHI amounting to P=16,695 million (see Notes 10 and 32 to the 2020 Audited Consolidated Financial Statements).

• Service concession assets – (Increase) Mainly due to the additional capital expenditures, implementation of new water concession project and consolidation of PNW, net of amortization and impairment (see Note 12 to the 2020 Audited Consolidated Financial Statements for the nature of the additions to the service concession assets).

• Property, plant and equipment – (Decrease) Significant decrease attributable to the deconsolidation of the hospital group. Deconsolidated Hospital fixed assets amounted to P=15,083 million (see Notes 13 and 32).

• Goodwill – (Decrease) Mainly driven by the impairment charge recognized in 2019 amounting to P=9,825 million and the deconsolidation of the goodwill attributable to the hospital segment (see Notes 11, 14 and 32).

• Other noncurrent assets – (Increase) Mainly driven by the increase in advances made to contractors for the ongoing construction of service concession assets.

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Liabilities and Equity

The following table summarizes the individual increase (decrease) of consolidated liability and equity accounts.

Increase Audited Audited (Decrease) 2019 % 2018 % Amount % (in Php millions) Current Liabilities Accounts payable and other current liabilities 36,363 48 31,951 56 4,412 14 Income tax payable 1,639 2 1,533 3 106 7 Due to related parties 5,638 8 4,462 8 1,176 26 Current portion of: Provisions 6,742 9 6,004 11 738 12 Service concession fees payable 6,277 8 693 1 5,584 806 Long-term debts 18,459 25 11,619 21 6,840 59 75,118 100 56,262 100 18,856 34

Noncurrent Liabilities Noncurrent portion of: Provisions 4,997 2 2,528 1 2,469 98 Service concession fees payable 26,621 9 29,946 11 (3,325) (11) Long-term debts 231,450 79 203,474 77 27,976 14 Due to related parties 2,240 1 7,392 3 (5,152) (70) Deferred tax liabilities 14,170 5 9,930 4 4,240 43 Other long-term liabilities 11,137 4 9,411 4 1,726 18 290,615 100 262,681 100 27,934 11

Equity Capital stock 31,661 17 31,633 18 28 – Additional paid-in capital 68,638 36 68,494 40 144 – Treasury Shares (4) – (178) – 174 (98) Equity reserves (574) – 6,968 4 (7,542) (108) Retained earnings 90,650 47 64,533 37 26,117 40 Other comprehensive income reserve 591 – 1,861 1 (1,270) (68) Total equity attributable to owners of the Parent Company 190,962 100 173,311 100 17,651 10

Non-controlling interest 55,083 65,692 (10,609) (16)

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• Accounts payable and other current liabilities – (Increase) Mainly due to the increase in accrued construction costs and retention payable attributable to Toll Roads, Maynilad and Rail.

• Service concession fees payable – current and noncurrent portions – (Increase) Aside from the interest accretion that increases the liability, additions to service concession fees payable was attributable to increase in concession fees for Maynilad (see Note 29, MWSS JBIC Loan to the 2020 Audited Consolidated Financial Statements) and the recognition of annual service fees under the service contract agreement between MPIWI and MIWD (see Notes 17 and 37 to the 2020 Audited Consolidated Financial Statements).

• Due to related parties – (Decrease) The decrease is mainly driven by the scheduled payment of payable to PCEV in relation to the acquisition of shares in Beacon.

• Provisions – current and noncurrent portions – (Increase) Includes provision arising from the exchangeable bonds issued to Buhay for estimated tax warranties and indemnities (See Note 32, Deconsolidation of MPHHI in 2019 and Note 16, Provisions to the 2020 Audited Consolidated Financial Statements).

• Long-term debt – current and noncurrent portions – (Increase) See Note 18 to the 2020 Audited Consolidated Financial Statements for details of the Company’s new loan facilities and borrowings.

• Equity reserves – (Decrease) Dilution gain of P=5,726 million which was originally recognized in equity reserve, was directly charged to retained earnings in relation to the deconsolidation of MPHHI (see Note 32 to the 2020 Audited Consolidated Financial Statements).

• Non-controlling interest – (Decrease) Decrease is mainly due to the derecognition of NCI from the deconsolidation of the hospital segment (see Note 32 and the Consolidated Statements of Changes in Equity for the other movements in the NCI account).

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Liquidity and Capital Resources

The following table shows a summary of the Group’s audited statements of cash flows for the years ended 2019 and 2018 as well as the consolidated capitalization as at December 31, 2019 and 2018:

Increase Audited (Decrease) 2019 2018 Amount % (in Php Millions) Cash Flows Net cash provided by operating activities 41,020 31,996 9,024 28 Net cash used in investing activities (23,460) (25,441) (1,981) (8) Net cash provided by (used in) financing activities 9,044 (783) 9,827 >100 Net increase in cash and cash equivalents 26,604 5,772 20,832 >100 Capital expenditures 51,247 34,234 17,013 50

Capitalization Long-term debt net of current portion 231,450 203,474 27,976 14 Current portion of long-term debt 18,459 11,619 6,840 59 Total 249,909 215,093 34,816 16 Non-controlling interest 55,083 65,692 (10,609) (16) Total equity attributable to owners of the Parent Company 190,962 173,311 17,651 10

Cash and cash equivalents 73,211 46,607 26,604 57 Short-term deposits 1,486 914 572 63

As at December 31, 2019, MPIC’s consolidated cash and cash equivalents and short-term deposits totaled P=74,697 million, an increase of P=27,176 million from P=47,521 million as at December 31, 2018. This increase mainly resulted from the proceeds in relation to the issuance of Exchangeable Bonds to Buhay. Refer to the Company’s Consolidated Statements of Cash Flows in the 2020 Audited Consolidated Financial Statements.

Operating Activities

MPIC’s consolidated net operating cash flow in 2019 posted a 28% increase from P=31,996 million to P=41,020 largely attributable to the improvement in the operating results. Total revenues (both from continuing operations and operations under PFRS 15) for 2019 increased by P=5,128 million to P=88,157 million which is mainly driven by the increased volume and improvement in operating performance of the subsidiaries.

Investing activities

Net cash used in investing activities amounted to =P23,460 million during 2019. Proceeds from the Exchangeable Bond issued to Buhay provided significant cash inflow of P=26,091 million (see Note 32 to the 2020 Audited Consolidated Financial Statements). Cash outflows included CAPEX spending on service concession assets with significant progress made towards completion of on-going toll concession projects.

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Financing Activities

The Company’s consolidated net cash provided by financing activities amounted to P=9,044 million in 2019. See Note 37 to the 2020 Audited Consolidated Financial Statements for details of the significant changes in liabilities arising from financing activities.

V(ii) 2018 versus 2017

MPIC Consolidated Statements of Income

Increase 2018 2017 (Decrease) Audited Amount % (in Php Millions) Operating Revenues 83,029 62,512 20,517 33 Cost of Sales and Services 42,714 29,374 13,340 45 General and administrative expenses 14,972 12,126 2,846 23 Interest expense 10,388 7,995 2,393 30 Share in net earnings of associates and joint ventures 11,073 8,045 3,028 38 Dividend income 172 2,631 (2,459) (93) Interest income 1,496 623 873 140 Others 1,488 360 1,128 313 Provision for income tax 7,008 5,649 1,359 24 Net income attributable to owners of the Parent Company 14,130 13,151 979 7 Other comprehensive income (loss ) 321 (466) 787 169 Total comprehensive income attributable to owners of the Parent Company 14,307 12,864 1,443 11 Core income 15,060 14,104 956 7 Non-recurring income (expense) (930) (953) (23) (2) Amounts presented above represent both continuing and discontinued operations.

The significant increases in the accounts enumerated in the above table are primarily attributable to the step-acquisitions of Beacon Electric, BPHI and GBPC on June 27, 2017 and PT Nusantara on July 2, 2018. Other factors contributing to the increases (or decreases, as applicable) are discussed below.

Revenues The Company’s revenues increased by 33% to P=83,029 million in 2018, reflecting consolidation of GBPC in June 2017 which contributed 22% or P=21,026 million to the group’s revenues together with improved performances from the following operating segments. ▪ Water utilities posted an 8% increase in revenues on the strength of Maynilad’s 3% billed volume growth together with basic and inflation-linked tariff increases; and (ii) MPW’s Bulk water and Sewage Treatment Plant services contribution. ▪ Toll revenues are higher by 18% with average daily entries for 2018 up by 7% on the NLEX, 15% on the SCTEX and 5% on the CAVITEX compared with 2017 and a P=0.25/km add-on toll rate on NLEX Closed system beginning November 6, 2017. ▪ Hospital revenues increased by 21% to P=12,950 million driven by (i) contributions from St. Elizabeth Hospital (acquired in October 2017) and DDH (step-acquisition in August 2018); and (ii) increased number of patients served across all hospitals. ▪ Rail revenues growth at 5% at par with the average daily ridership growth. ▪ Logistics revenues during 2018 increased by 9% to P=1,242 million.

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See the relevant segment information under section V(ii) 2018 versus 2017 - Operating Segments of the Group.

Cost of Sales and Services Cost of sales and services increased by 45% to P=42,714 million. Out of the total increase in expenses, 51% or P=9,760 million is attributable to GBPC. 2018 reflected full consolidation of GBPC’s operations as compared to 2017 when GBPC was consolidated only beginning June 27, 2017. As a result of GBPC’s consolidation, there were significant increases in expenses such as depreciation expense and purchased power and transmission charges. Other factors contributing to the increase in cost of services included: (i) consolidation of PT Nusantara and DDH, and (ii) trucking and warehousing with the expansion of logistics segment.

General and administrative expenses General and administrative expenses increased by 23% to P=14,972 million in 2018 mainly due to consolidation of GBPC and PT Nusantara.

Interest expense The Company’s consolidated interest expense increased by 30% to P=10,388 million with the additions of debt from the consolidation of Beacon Electric, BPHI and GBPC (starting June 2017), new bank loans drawn for capital expenditure (net of the capitalized interest) and interest charge accreting from MPIC’s payable to PCEV.

Share in net earnings of associates and joint ventures Share in net earnings of equity method investees increased by 38% to P=11,073 million mainly due to the combined impact of the increase in effective ownership in MERALCO beginning June 27, 2017 and improvement in MERALCO’s operating results (see discussion under section V(ii) 2018 versus 2017 - Operating Segments of the Group). Share in the net earnings of MERALCO amounted to P=10,412 million for 2018 while the combined share in the net earnings of MERALCO and Beacon Electric amounted to P=7,236 million during the same period last year.

Dividend income Dividend income in 2018 was mainly from the Company’s investment in Citra Metro Manila Tollways Corporation (2% equity interest). Dividend income in 2017 was significantly higher as this included dividend income from the Company’s investment in Beacon Electric preferred shares amounting to P=2,541 million.

Other income (expense) - net Other income (net) for 2018 included forex gain, net gain on prepayment of loan, gain on remeasurement of previously held interest in PT Nusantara and DDH and proceeds from indemnity claim.

Consolidated net income attributable to equity holders of the Parent Company The increase in this account is mainly attributable to (i) an expanded power portfolio through increased investment in Beacon Electric; (ii) continuing traffic growth on all domestic roads; and (iii) steady volume growth coupled with inflation-linked tariff increases at Maynilad.

Other comprehensive income (loss) - net The Company recognized a net other comprehensive income of P=321 million in 2018 as compared with the net comprehensive loss of P=466 million in 2017. Year 2018 includes higher share in actuarial valuation adjustment from MERALCO and cumulative translation adjustments from DMT, CII B&R, PT Nusantara and MERALCO.

Core Income attributable to equity holders of the Parent Company MPIC’s share in the consolidated core income increased by 7% from P=14,104 million in 2017 to P=15,060 million in 2018 primarily reflecting the following: ▪ Power (distribution and generation) accounted for P=10.8 billion or 55% of the aggregate contribution; ▪ Toll operations contributed P=4.4 billion or 23% of the total;

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▪ Water (distribution, production and sewerage treatment) contributed P=3.8 billion or 19% of the total; ▪ Hospital group contributed P=771 million or 4% of the total; and, ▪ the Rail, Logistics and others contributed combined net loss of P=248 million.

The figures referred to above represent MPIC’s share in the stand-alone core income of the operating companies, net of consolidation adjustments. See the relevant segment information under section V(ii) 2018 versus 2017 - Operating Segments of the Group).

Non-recurring expenses Non-recurring expense amounting to P=930 million in 2018 primarily due to the net effect of a weaker peso, project write-downs, loan refinancing and provisions for asset impairment.

V(ii) 2018 versus 2017 - Operating Segments of the Group

Power

MPIC’s power business contributed P=10.8 billion to Core Net Income in 2018, an increase of 15% driven by the June 2017 purchase of the last 25% in Beacon Electric not already owned by MPIC and good results at MERALCO which more than offset a decline at GBPC.

MERALCO

Increase 2018 2017 (Decrease) MERALCO Audited Amount % (in Php Millions) Revenues 304,454 282,556 21,898 8 Expenses 276,012 256,109 19,903 8 Core Income 22,408 21,213 1,195 6 Reported net income attributable to equity holders of MERALCO 23,017 20,384 2,633 13 Capital Expenditures 13,669 12,127 1,542 13

Increase Key Performance Indicators (Decrease) 2018 2017 Amount % Volume Sold (in mln kwh) 44,313 42,102 2,211 5 System Loss (12-month moving average) 5.67% 5.91% -0.24% (4)

MERALCO’s Core Net Income for 2018 rose 6% to P=22.4 billion. Core Net Income growth was driven by a 5% increase in energy sales, slightly lower tariffs, and a reversal of provisions following the adoption of a new accounting standard.

Energy sales rose across all customer classes. Residential growth was driven by expansion in the south section of MERALCO’s franchise while the commercial sector grew on continued expansion of the real estate, retail trade, and hotel sectors, with Industrial sector growth rooted in the healthy performance of the semiconductor, food & beverage, and rubber and plastics industries.

Total revenues rose 8% to P=304.5 billion on higher energy sales together with increased pass-through generation charges partly offset by customers transitioning to other retail electricity sellers.

MERALCO spent P=13.7 billion on capital expenditures in 2018 to address critical loading of existing facilities and to support growth in demand and customer connections.

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GBPC

Increase 2018 2017 (Decrease) GBPC Audited Amount % (in Php Millions) Revenues 26,822 23,794 3,028 13 Expenses 20,598 17,168 3,430 20 EBITDA Core 9,159 9,184 (25) (0) Core Income 2,458 2,883 (425) (15) Reported Net Income attributable to equity holders of GBPC 2,431 2,808 (377) (13)

Increase Key Performance Indicators (Decrease) 2018 2017 Amount % Electricity Sold (consolidated; GWh) 4,822 4,466 356 8 Bilateral – Generation 3,688 3,758 (70) (2) Bilateral – WESM 524 351 173 49 WESM – Spot Sales 610 357 253 71

GBPC sold 4,822 GWH in 2018, an increase of 8% from a year earlier. However, Core Net Income for 2018 declined 15% to P=2.5 billion due to depreciation and interest costs for Panay Energy Development Corporation’s 150 MW plant from June 1, 2018 onwards and lower margins from WESM sales due to higher coal and fuel costs.

Alsons Thermal Energy Corporation, in which GBPC has a 50% interest, is on track to commence operation of its second 105 MW (80 MW contracted) expansion plant in Maasim, Saranggani by the second half of this year.

GBPC plans to invest in renewable energy projects to complement its current fossil fuel capacity.

Toll Operations

Increase 2018 2017 (Decrease) Metro Pacific Tollways Corporation Audited Amount % (in Php Millions) Consolidated Statements of Income Net toll revenues 15,486 13,107 2,379 18 Cost of Services 7,645 6,228 1,417 23 Core EBITDA 10,474 8,607 1,867 22 Core Income 4,450 3,935 515 13 Reported net income attributable to equity holders of MPTC 4,274 5,423 (1,149) (21) Capital Expenditure 11,795 4,425 7,370 167

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Increase Key Performance Indicators (Decrease) 2018 2017 Amount % Average Daily Vehicle Entries: NLEX 253,577 237,046 16,531 7 SCTEX 62,684 54,566 8,118 15 CAVITEX 146,315 139,208 7,107 5 DMT 99,479 97,919 1,560 2 CII B&R 33,007 52,788 (19,781) (37) PT Nusantara 306,085 307,468 (1,383) (0)

Metro Pacific Tollways Corporation (“MPTC”) recorded Core Income of P=4.5 billion in 2018, a 13% increase from P=3.9 billion a year earlier. MPTC’s system-wide vehicle entries averaged 916,886 a day, including road networks in the Philippines, Indonesia, Thailand and Vietnam.

Tollroads in the Philippines:

Average daily vehicle entries for all three of our domestic tollways system (NLEX, CAVITEX and SCTEX) rose 7% to 478,315 compared with 445,350 in 2017.

Traffic rose 7% on the NLEX and surged by 15% on the SCTEX following integration of these two roads and the opening of additional lanes in 2017. Traffic on the CAVITEX rose 5% driven by growth in residential communities in Cavite and tourism in Batangas.

MPTC expects to spend approximately P=104.3 billion on road projects over the next five years, although this figure could rise by a further =P25 billion if MPTC were to secure the Cavite-Tagaytay- Batangas Expressway for which it was recently awarded Original Proponent status.

The estimates for planned road investments assume satisfactory resolution of various overdue tariff adjustments, now ranging between 20% and 48% on different parts of the network, without which further investment will be delayed. MPTC is waiting for notice to publish increased toll rates for NLEX coinciding with the opening of the NLEX Harbour Link and implemented on a staggered basis. Full implementation of overdue tariff adjustments on all roads has yet to be agreed.

Tollroads outside the Philippines: DMT in Bangkok reported a 2% increase in daily traffic to 99,479 in 2018.

In Vietnam, CII B&R saw a decline in vehicle entries to 33,007 due to the end of the concession for the Rach Chiec Bridge. Traffic is expected to improve again by approximately 32,000 with the opening of part of the Hanoi Highway Expansion later in 2019.

Nusantara’s traffic in Indonesia averaged at 306,085 vehicle entries per day in 2018. In July of 2018, MPTC increased its interest in Nusantara from 48.3% to 53.3% on a fully-diluted basis. This step-up acquisition triggered the need for a General Offer which further increased MPTC’s ownership of Nusantara to 77.9%.

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Water

Maynilad Water Services, Inc. 2018 2017 Increase (Decrease) Audited Amount % (in Php Millions) Consolidated Statements of Income Revenues 22,024 20,774 1,250 6 Costs and Expenses 9,606 9,166 440 5 Core EBITDA 15,454 14,136 1,318 9 Core Income 7,731 7,379 352 5 Reported Net Income 7,368 6,853 515 8 Capital Expenditures 11,944 12,006 (62) (1)

Key Performance Indicators Increase (Decrease) 2018 2017 Amount % Volume of water supplied (MCM) 750.8 755.4 (4.6) (1) Volume of water billed (MCM) 527.2 511.7 15.5 3 Volume of water billed (MCM) - Consolidated 546.1 528.3 17.8 3 Non revenue water % (average) 29.8% 32.3% -2.5% (8) Non revenue water % (period end) 27.1% 31.7% -4.6% (15) Billed customers (period end) 1,407,503 1,358,758 48,745 4 Customer mix (% based on billed volume) Domestic (residential and semi-business) 80.5% 80.9% -0.4% (0) Non-domestic (commercial and industrial) 19.5% 19.1% 0.4% 2

MPIC’s water business comprises investments in Maynilad, the biggest water utility in the Philippines, and MetroPac Water Investments Corporation, focused on building new water businesses outside Metro Manila. The water segment’s contribution to Core Net Income amounted to ₱3.8 billion in 2018, most of it from Maynilad.

Maynilad – 1 million people receiving water at P=1 centavo per liter In September 2018, MWSS approved Maynilad’s Rebasing adjustment for the Fifth Rate Rebasing Period (2018 to 2022) of P=5.73 per cubic meter which will be implemented on a staggered basis over four years.

However, the matter of Maynilad’s tariffs for the entire 2013-2017 five-year Business Plan period and two related arbitration awards in its favor, remain unresolved. In summary:

• In 2015, Maynilad received an arbitration award in its favor against the Metropolitan Waterworks and Sewerage System (“MWSS”), which centered on treatment of Corporate Income Tax as an expense to be recovered through the tariff. The dispute on implementing this tariff is working its way through the Philippine Court System with MWSS now seeking recourse to the Supreme Court following awards in Maynilad’s favor by lower courts.

• On July 24, 2017, Maynilad was notified by an arbitration panel in Singapore that it had ruled in Maynilad’s favor on its claim to recover from the Republic of the Philippines (“RoP”) revenues forgone because of the failure to increase tariff (P=6.7 billion as of 31st December 2017). On 4th October 2018, the Singapore High Court upheld the award in favor of Maynilad and dismissed RoP’s Setting Aside Application in February 2018.

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Maynilad is striving to meet its service obligations but financing these requires resolution of the remaining claim and tax recovery matters.

Maynilad’s revenues in 2018 rose 6% to P=22.0 billion from P=20.8 billion in 2017, lifted by a 3% increase in volume sold and a combination of basic and inflation-linked tariff increases of 1.9% in April 2017, 2.8% in January 2018 and 2.7% in October 2018. The number of water connections (or billed customers) rose 4% to 1,407,503 at the end of 2018.

Core Income for 2018 rose 5% to P=7.7 billion, driven by revenue growth, lower provisions and lower interest expense.

Non-Revenue Water (“NRW”) measured at the District Metered Area level fell to 27.1% as at the end of 2018 from 31.7% at the end of 2017 while total NRW is now down to 38.5%.

Capital expenditures stood at P=11.9 billion in 2018, much of it directed to upgrading and building reservoirs and pumping stations, laying primary pipelines, and constructing wastewater facilities to improve public health.

For the Fifth Rate Rebasing Period, Maynilad is set to build three new sewage treatment plants and upgrade one sewage treatment plant. Once completed, these new wastewater facilities will be able to serve approximately 2 million customers.

MetroPac Water Investments Corporation Outside the Maynilad concession which currently bills 1,444 Million Liters per Day (MLD), MPWIC currently bills 253 MLD. MPW is expanding MPIC’s water investment portfolio with up to 393 MLD of installed capacity in the Philippines and 660 MLD in Vietnam, when these projects are completed. A further 430 MLD of projects around the Philippines are under negotiation and awaiting final award.

MPW’s contribution to MPIC is currently immaterial but as these new projects are completed, it is expected to become a major profit contributor.

Healthcare Increase 2018 2017 (Decrease) Healthcare Group Audited Amount % (in Php Millions) Gross Revenues 25,655 22,464 3,191 14 Expenses 20,331 17,784 2,547 14 Core EBITDA 5,559 4,924 635 13 Core Income 2,357 2,046 311 15 Reported Net Income 2,363 2,052 311 15

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Increase Key Performance Indicators (Decrease) 2018 2017 Amount % Occupancy rate (%) - Standard Beds 68% 68% 0% (1) Total beds available 3,200 3,211 (11) (0) No. of Patients – In patient 193,824 173,939 19,885 11 No. of Patients – Out patient 3,323,104 3,085,638 237,466 8 No. of Accredited Doctors 8,373 8,057 316 4 No. of Enrollees (schools) - average YTD 7,506 6,640 866 13

MPHHI reported a 14% rise in aggregate revenues in 2018 on the strength of an 8% increase in out- patient visits to 3,323,104 and 11% growth in in-patient admissions to 193,824. Investments made in Jesus Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City in 2017 contributed significantly to this improvement.

In 2018, MPHHI increased its ownership in DDH from 35.16% to 49.91%.

MPHHI is rolling out improved patient care across its network of hospitals and establishing new service centers in the communities it serves. This is bringing new patients to our network, but startup costs for some of these new programs restrained growth in Core Income to 15%.

Rail Increase 2018 2017 (Decrease) Rail Audited Amount % (in Php Millions) Farebox revenues 3,310 3,155 155 5 Expenses 2,567 2,355 212 9 Core EBITDA 988 961 27 3 Core Income 716 514 202 39 Reported Net Income 645 507 138 27

Increase Key Performance Indicators (Decrease) 2018 2017 Amount % Average daily ridership 458,021 435,199 22,822 5 Available LRV (period end) 112 108 4 4

As at December 31, 2018, LRMC had successfully restored 35 Light Rail Vehicles (LRVs), bringing the total available LRVs to 112 from the 77 it inherited in 2015. The resulting surge in available capacity has reduced passenger waiting time to 3.45 minutes during peak hours from more than five minutes when LRMC took over.

The majority of the P=750 million Station Improvement Project has been substantially completed with remaining work expected to be finished by mid-2019. LRMC is currently undertaking pre-construction preparations for the LRT-1 Cavite Extension. On-site construction works will begin this year but long- overdue tariff increases must be resolved to make this financeable.

LRMC served an average daily ridership of 458,021 in 2018, an improvement of 5% from a year earlier while the highest daily ridership was 613,000, up from 578,000 a year earlier.

LRMC contributed P=394 million to MPIC’s Core Income for 2018.

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Logistics MMI is now an established force in the Philippine logistics sector. Average warehouse dispatch for 2018 rose 3% to over 60.2 million cases from 58.7 million cases last year. The focus of this business is to provide our clients with first-class transportation, warehousing and order fulfillment as we broaden our service offering to include cross docking and freight forwarding.

MMI has acquired over 400,000 square meters of land in Cavite and Bulacan for developing into covered warehouse space to be utilized by MMI to build the leading logistics firm in the Philippines.

MMI is not yet contributing to MPIC’s Core Net Income as our focus has been on getting established and building a best-in-class customer service platform and culture.

MPIC Consolidated Statement of Financial Position

Assets

The following table summarizes the individual increase (decrease) of consolidated asset accounts.

Increase Audited Audited (Decrease) 2018 % 2017 % Amount % (in Php Millions) ASSETS Current assets Cash and cash equivalents and short-term deposits 47,521 59 49,317 66 (1,796) (4) Restricted cash 5,421 7 4,047 5 1,374 34 Receivables 12,495 16 10,899 15 1,596 15 Other current assets 12,892 16 10,432 14 2,460 24 78,329 98 74,695 100 3,634 5 Asset held for sale 1,250 2 250 0 1,000 400 79,579 100 74,945 100 4,634 6

Noncurrent Assets Investments and advances 152,993 32 150,971 35 2,022 1 Service concession assets 205,992 43 168,783 40 37,209 22 Property, plant and equipment 71,926 15 67,606 16 4,320 6 Goodwill 27,856 6 25,384 6 2,472 10 Intangible assets 3,897 1 4,637 1 (740) (16) Deferred tax assets 1,270 0 1,045 0 225 22 Other noncurrent assets 14,433 3 10,380 2 4,053 39 478,367 100 428,806 100 49,561 12

The significant increases in the accounts in the above table are primarily attributable to the step- acquisitions of PT Nusantara and DDH. Other factors contributing to the increases (or decreases, as applicable) are discussed below.

• Cash and cash equivalents and short-term deposits – (Decrease) Mainly due to Beacon Electric’s loan prepayment, MPIC’s scheduled settlement of the amount owed to PCEV and acquisitions of TLW, PNW and JLB.

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• Restricted Cash – (Increase) Restricted cash pertains to sinking fund or debt service account (DSA) representing amounts set aside for principal and interest payments of certain long-term debt. This DSA is maintained and replenished in accordance with the provision of the loan agreements.

• Receivables – (Increase) Mainly driven by the increase in trade receivables in relation to the improvement in revenues particularly on the power generation business.

• Asset held for sale – (Increase) Mainly driven by GBPC’s reclassification to Asset held for sale of transmission facilities to be transferred to NGCP.

• Other current assets – (Increase) Mainly driven by the increase in advances to contractors and consultants of Maynilad and GBPC and reclassification of the deposits for various incentive plans from noncurrent to current assets as these plans were to be settled in March 2019.

• Investments and advances – (Increase) Mainly due to the combined effects of the acquisition of new associates (TLW and PNW) and associates acquired through the step acquisition of PT Nusantara and share in net earnings partially offset by the dividend income for the period step acquisitions of PT Nusantara and DDH.

• Property, plant and equipment – (Increase) Aside from the step acquisition of PT Nusantara and DDH, contributing to the increase is MMI’s acquisition of land.

• Service concession assets – (Increase) Aside from the step acquisition of PT Nusantara, increase is due to the on-going construction of toll, water and rail concession assets.

• Goodwill – (Increase) Step acquisitions of PT Nusantara and DDH and acquisition of PT Rezeki through PT Nusantara.

• Other noncurrent assets – (Increase) Mainly driven by the increase in advances made to contractors for the ongoing construction of MPTC’s toll road and LRMC’s LRT-1 rehabilitation and extension projects.

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Liabilities and Equity

The following table summarizes the individual increase (decrease) of consolidated liability and equity accounts.

Increase Audited Audited (Decrease) 2018 % 2017 % Amount % (in Php millions) Current Liabilities Accounts payable and other current liabilities 31,951 56 27,142 49 4,809 18 Income tax payable 1,533 3 1,415 3 118 8 Due to related parties 4,462 8 3,879 7 583 15 Current portion of: Provisions 6,004 11 5,997 11 7 0 Service concession fees payable 693 1 871 2 (178) (20) Long-term debts 11,619 21 15,573 28 (3,954) (25) 56,262 100 54,877 100 1,385 3

Noncurrent Liabilities Noncurrent portion of: Provisions 2,528 1 2,106 1 422 20 Service concession fees payable 29,946 11 28,873 12 1,073 4 Long-term debts 203,474 77 173,510 75 29,964 17 Due to related parties 7,392 3 11,767 5 (4,375) (37) Deferred tax liabilities 9,930 4 6,836 3 3,094 45 Other long-term liabilities 9,411 4 10,103 4 (692) (7) 262,681 100 233,195 100 29,486 13

Equity Capital stock 31,633 18 31,626 20 7 0 Additional paid-in capital 68,494 40 68,465 42 29 0 Treasury Shares (178) 0 (167) 0 (11) 7 Equity reserves 6,968 4 5,742 4 1,226 21 Retained earnings 64,533 37 53,894 33 10,639 20 Other comprehensive income reserve 1,861 1 1,684 1 177 11 Total equity attributable to owners of the Parent Company 173,311 100 161,244 100 12,067 7

Non-controlling interest 65,692 54,435 11,257 21

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The significant increases in the accounts enumerated in the above table are primarily attributable to the step-acquisitions of PT Nusantara and DDH. Other factors contributing to the increases (or decreases, as applicable) are discussed below.

• Accounts payable and other current liabilities – (Increase) Mainly due to the increase in accrued construction costs attributable to Toll Roads, Maynilad and Rail.

• Service concession fees payable – current and noncurrent portions – (Increase) Represents movement in foreign exchange and interest accretion net of actual payment of concession fees.

• Due to related parties – (Decrease) The decrease is mainly driven by the scheduled payment of payable to PCEV in relation to the acquisition of shares in Beacon.

• Long-term debt – current and noncurrent portions – (Increase) Additions included MPIC’s P=21.4 billion loan drawdown, proceeds from NLEX Corp’s bond issuance and loans through step acquisition of PT Nusantara.

• Equity reserves – (Increase) Change in ownership in subsidiaries charged to equity (see Consolidated Statements of Changes in Equity for other movements in the Equity reserves account).

• Non-controlling interest – (Increase) Aside from the NCI’s share in Net Income, additions to NCI included NCI in the step acquisitions of PT Nusantara and DDH, and infusion of the other shareholders of LRMH and LRMC into the LRT-1 project. Refer to the Statements of Changes in Equity for the other movements in the NCI account.

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Liquidity and Capital Resources

The following table shows a summary of the Group’s audited statements of cash flows for the years ended 2018 and 2017 as well as the consolidated capitalization as at December 31, 2018 and 2017:

Increase Audited (Decrease) 2018 2017 Amount % (in Php Millions) Cash Flows Net cash provided by operating activities 31,996 26,508 5,488 21 Net cash used in investing activities (25,441) (12,848) 12,593 98 Net cash provided by (used in) financing activities (783) 11,720 (12,503) 107 Net increase in cash and cash equivalents 5,772 25,380 (19,608) (77) Capital expenditures 34,171 22,396 11,775 53

Capitalization Long-term debt net of current portion 203,474 173,510 29,964 17 Current portion of long-term debt 11,619 15,573 (3,954) (25) Total 215,093 189,083 26,010 14 Non-controlling interest 65,692 54,435 11,257 21 Total equity attributable to owners of the Parent Company 173,311 161,244 12,067 7

Cash and cash equivalents 46,607 40,835 5,772 14 Short-term deposits 914 8,482 (7,568) (89)

As at December 31, 2018, MPIC’s consolidated cash and cash equivalents and short-term deposits totaled P=47,521 million, a decrease of P=1,796 million from P=49,317 million as at December 31, 2017. This decrease mainly resulted from increased CAPEX spending, acquisition of new investments (TLW, PNW and JLB), scheduled payment of amount owed to PCEV and the prepayment of certain borrowings. Refer to the Company’s Consolidated Statements of Cash Flows in the 2020 Audited Consolidated Financial Statements.

Operating Activities

MPIC’s consolidated net operating cash flow in 2018 posted a 21% increase from P=26,508 million to P=31,996 largely attributable to the improvement in the operating results. Total revenues for 2018 increased by P=20,517 million to P=83,029 million owing to the consolidation of GBPC beginning June 27, 2017 and improved operating performance.

Investing activities

Net cash used in investing activities amounted to =P25,441 million during 2018. Cash outflows included CAPEX spending comprising of additions to service concession and hospital assets and acquisitions of TLW, PNW and JLB.

Financing Activities

The Company’s consolidated net cash used in financing activities amounted to P=783 million in 2018. Significant outflows included: (i) scheduled payments of debt (including interest), portion of Maynilad’s service concession fees and payable to PCEV; (ii) Beacon Electric’s prepayment of loan; and (iii)

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dividendsdividends paid to both paid owners to both ofowners the parent of the company parent company and to non and-controlling to non-controlling shareholders shareholders. .

Item 7. ConsolidatedItem 7. Consolidated Financial Financial Statements Statements

See ExhibitSee IExhibit - 2020 IAudited - 2020 AuditedConsolidated Consolidated Financial Financial Statements Statements

Item 8. ChangesItem 8. Changes in and Disagreements in and Disagreements with Accountants with Accountants on Accounting on Accounting and Financial and Financial Disclosures Disclosures

InformationInformation of Independent of Independent Accountant Accountant and Other and Related Other RelatedMatters Matters

1. External1. External Audit Fees Audit and Fees Services and Services

Below areBelow the fees are paidthe fees for paidby the for Registrant by the Registrant to its External to its External Auditor: Auditor:

Type of TypeService of Service Nature ofNature Service of Service 2020 2020 2019 2019 2018 2018 Audit andAudit Audit and Audit Audit ofAudit registrant’s of registrant’s P=2 6,500,000P=26,500,000 P=26,500,000 P=26,500,000 P=25,600,000 P=25,600,000 related feesrelated fees annual financialannual financial statementsstatements and review and review of quarterlyof quarterly results results Non-AuditNon Fees-Audit Fees FinancialFinancial accounting accounting 3,642,0003,642,000 860,795 860,7954,1 00,0004, 100,000 and advisoryand advisory services services for a bidfor project a bid project FinancialFinancial and Tax andDue Tax Due20,756,400 20,756,400 - - - - DiligenceDiligence Agreed UponAgreed Upon 201,600 201,6003,250,000 3,250,000 - - ProcedureProcedure Tax AdvisorTax yAdvisor servicesy services - 1,600,000- 1,600,000 700,000 700,000

The individualThe individual audit committees audit committees of the registrant of the registrant and subsidiaries and subsidiaries review and review approve and approvethe audit the audit plan andplan scope and of scopework offor work the above for the services above servicesand ensure and that ensure the ratesthat theare ratescompetitive are competitive as as comparedcompared to the fees to chargedthe fees chargedby other byequally other competentequally competent external externalauditors auditorsperforming performing similar similar nature andnature volume and ofvolume activities. of activities.

2. Changes2. Changes in and Disagreements in and Disagreements with Independent with Independent Auditors Auditors on Accounting on Accounting and Financial and Financial Disclosure Disclosure

The auditingThe auditingfirm of SGV firm &of CoSGV. (SGV) & Co .is (SGV) MPIC’s is MPIC’sindependent independent auditors auditorssince 2006. since 2006.

RepresentativesRepresentatives of the said of firmthe said are firmexpected are expected to be present to be atpresent the annual at the stockholders’ annual stockholders’ meeting meeting and will andhave will the haveopportunity the opportunity to make toa statement make a statement if they desire if they to desire do so, to and do are so, expectedand are expected to be to be availableavailable to respo ndto respoto appropriatend to appropriate questions. questions.

During theDuring Parent the Company’s Parent Company’s three most three recent most years recent or yearsany subsequent or any subsequent interim periods,interim periods,there there was no instancewas no instancewhen the when Parent the Company’s Parent Company’s independent independent auditors auditorshave resigned have resigned or have or have indicatedindicated that they that decline they todecline stand tofor stand re-ele forction re- eleor havection beenor have dismissed been dismissed or where or the where Parent the Parent CompanyCompany had any haddisagreement any disagreement with its independentwith its independent auditors auditorsor financial or financial disclosure disclosure issue. issue. The 2020The audit 20 20of theaudit Company of the Company is in compliance is in compliance with paragraph with paragraph (3)(b)(ix) (3)(b)(ix) of the Securities of the Securities RegulationRegulation Code Rule Code 68, Rule as amended, 68, as amended, which provides which provides that the externalthat the externalauditor should auditor be should be rotated, orrotated, the handling or the handling partner changed, partner changed, every five every (5) yearsfive (5) or yearsearlier. or earlier.

SGV is willingSGV is to willing stand tofor stand re-election for re- electionas external as externalauditor of auditor MPIC of for MPIC the ensuing for the year.ensuing year.

90 92 92 Statement of Management’s Responsibility for Consolidated Financial Statements

91 92 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, SyCip6760 Ayala Gorres Avenue Velayo & Co. Tel:Fax: (632) (632) 8891 8819 0307 0872 BOA/PRC October 4,Reg. 2018, No. valid 0001, until August 24, 2021 67601226 MakatiAyala Avenue City Fax:ey.com/ph (632) 8819 0872 SEC October Accreditation 4, 2018, No.valid 0012-FR-5 until August (Group 24, 2021 A), 1226Philippines Makati City ey.com/ph SECNovember Accreditation6, 201 No.8, valid 0012-FR-5 until November (Group A),5, 2021 Philippines November 6, 2018, valid until November 5, 2021

SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, 6760 Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A), Philippines November 6, 2018, valid until November 5, 2021

INDEPENDENT AUDITOR’S REPORT IndependentINDEPENDENT AUDITOR’S Auditor’s REPORT Report

The Board of Directors and Stockholders MetroINDEPENDENTThe Board Pacific of DirectorsInvestments AUDITOR’S and Corporation Stockholders REPORT 10thMetroFloor, Pacific MGO Investments Building Corporation Legaspi10th Floor, corner MGO Dela Building Rosa Streets Legaspi Village,corner Dela Makati Rosa City Streets TheLegaspi Board Village, of Directors Makati and City Stockholders Metro Pacific Investments Corporation Opinion10th Floor, MGO Building LegaspiOpinion corner Dela Rosa Streets WeLegaspi have Village, audited Makatithe consolidated City financial statements of Metro Pacific Investments Corporation and its subsidiariesWe have audited (the Company),the consolidated which financial comprise statements the consolidated of Metro statements Pacific Investments of financial Corporation position as atand its Decembersubsidiaries 31, (the 2020 Company), and 2019, which and thecomprise consolidated the consolidated statements statements of comprehensive of financial income, position consolidated as at statementsOpinionDecember 31,of changes 2020 and in 2019, equity and and the consolidated consolidated statements statements of ofcash comprehensive flows for each income, of the threeconsolidated years in thestatements period endedof changes December in equity 31, 2020,and consolidated and notes to statements the consolidated of cash financialflows for statements, each of the including three years a in summaryWethe periodhave auditedof ended significant Decemberthe consolidated accounting 31, 2020, financial policies. and notes statements to the consolidatedof Metro Pacific financial Investments statements, Corporation including and a its subsidiariessummary of (thesignificant Company), accounting which policies.comprise the consolidated statements of financial position as at InDecember our opinion, 31, 2020 the accompanying and 2019, and consolidatedthe consolidated financial statements statements of comprehensive present fairly, income, in all material consolidated respects, thestatementsIn our consolidated opinion, of changes the financial accompanying in equity position and consolidatedof consolidated the Company financial statements as at Decemberstatements of cash 31,presentflows 2020 for fairly, and each 2019, inof all the and material three its years respects, in consolidatedthe periodconsolidated ended financial financialDecember performance position 31, 2020, of and theand its Company notes consolidated to the as atconsolidated cashDecember flows for31,financial each2020 of andstatements, the 2019, three and yearsincluding its in the a periodsummaryconsolidated ended of significant financialDecember performance accounting31, 2020 in policies. andaccordance its consolidated with Philippine cash flows Financial for each Reporting of the three Standards years in (PFRSs). the period ended December 31, 2020 in accordance with Philippine Financial Reporting Standards (PFRSs). BasisIn our foropinion, Opinion the accompanying consolidated financial statements present fairly, in all material respects, theBasis consolidated for Opinion financial position of the Company as at December 31, 2020 and 2019, and its Weconsolidated conducted financial our audits performance in accordance and withits consolidated Philippine Standardscash flows on for Auditing each of the(PSAs). three Ouryears in the responsibilitiesperiodWe conducted ended December our under audits those 31, in standardsaccordance2020 in accordance are with further Philippine with described Philippine Standards in the FinancialAuditor’s on Auditing Reporting Responsibilities (PSAs). Standards Our for (PFRSs).the Audit ofresponsibilities the Consolidated under Financial those standards Statements are furthersection describedof our report. in the WeAuditor’s are independent Responsibilities of the Company for the Audit in accordanceofBasis the forConsolidated Opinion with the FinancialCode of Ethics Statements for Professional section of ourAccountants report. We in arethe independentPhilippines (Code of the ofCompany Ethics) in togetheraccordance with with the theethical Code requirements of Ethics for that Professional are relevant Accountants to our audit in of the the Philippines consolidated (Code financial of Ethics) statementstogetherWe conducted with in the our Philippines,ethical audits requirements in accordance and we have that with arefulfilled Philippine relevant our tootherStandards our ethicalaudit on of responsibilities Auditingthe consolidated (PSAs). in accordancefinancial Our with thesestatementsresponsibilities requirements in the under Philippines, and those the Code standards and of we Ethics. haveare further fulfilled We believe described our otherthat in the ethicalthe auditAuditor’s responsibilities evidence Responsibilities we have in accordance obtained for the is withAudit sufficientofthese the requirementsConsolidated and appropriate and Financial the to Code provide Statements of Ethics. a basis section Wefor ourbelieve of opinion.our thatreport. the auditWe are evidence independent we have of theobtained Company is in accordancesufficient and with appropriate the Code toof provideEthics for a basis Professional for our opinion. Accountants in the Philippines (Code of Ethics) Keytogether Audit with Matters the ethical requirements that are relevant to our audit of the consolidated financial statementsKey Audit inMatters the Philippines, and we have fulfilled our other ethical responsibilities in accordance with Keythese audit requirements matters are and those the Code matters of Ethics.that, in ourWe professional believe that judgment,the audit evidence were of wemost have significance obtained isin our auditsufficientKey audit of the andmatters consolidated appropriate are those financial to matters provide statements that, a basis in our for of professional ourthe opinion.current period.judgment, These were matters of most were significance addressed in in our the contextaudit of ofthe our consolidated audit of the financial consolidated statements financial of the statements current period.as a whole, These and matters in forming were ouraddressed opinion in the thereon,Keycontext Audit of and our Matters we audit do not of theprovide consolidated a separate financial opinion statements on these matters. as a whole, For andeach in matter forming below, our opinionour descriptionthereon, and of we how do ournot auditprovide addressed a separate the opinion matter ison provided these matters. in that Forcontext. each matter below, our Keydescription audit matters of how are our those audit matters addressed that, the in matterour professional is provided judgment, in that context. were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

*SGVFSM006036* A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited *SGVFSM006036* 93

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We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the ConsolidatedWe have fulfilled Financial the responsibilities Statements section described of our in report,the Auditor’s including Responsibilities in relation to forthese the matters. Audit of the Accordingly,Consolidated ourFinancial audit included Statements the sectionperformance of our of report,- procedures2 - including designed in relation to respond to these to matters.our assessment of theAccordingly, risks of material our audit misstatement included the of performance the consolidated of procedures financial statements.designed to Therespond results to ourof our assessment audit of procedures,the risks of materialincluding misstatement the procedures of theperformed consolidated to address financial the mattersstatements. below, The provide results the of ourbasis audit for our auditWeprocedures, have opinion fulfilled including on the the accompanying responsibilitiesthe procedures consolidated performeddescribed in tofinancial the addressAuditor’s statements. the matters Responsibilities below, provide for the the Audit basis of forthe our Consolidatedaudit opinion onFinancial the accompanying Statements sectionconsolidated of our financial report, including statements. in relation to these matters. RecoverabilityAccordingly, our of auditgoodwill, included services the performanceconcession assets of procedures (SCAs) not designed yet available to respond for use, to our and assessment SCA related of totheRecoverability West risks Zone of material Concession of goodwill, misstatement services of concession the consolidated assets financial (SCAs) not statements. yet available The for results use, ofand our SCA audit related procedures,to West Zone including Concession the procedures performed to address the matters below, provide the basis for our Theaudit Company opinion on has the goodwill accompanying and SCAs consolidated not yet available financial for statements. use which are required to be tested for impairmentThe Company at leasthas goodwill annually. and In addition,SCAs not as yet discussed available in for Note use 30, which there are is requiredan ongoing to be discussion tested for with the MetropolitanRecoverabilityimpairment at Waterworks leastof goodwill, annually. and services In Sewerage addition, concession System as discussed assets (MWSS) (SCAs)in Note on the not30, provisions yetthere available is an of ongoing Mayniladfor use, discussion and Water SCA Services, relatedwith the Inc.toMetropolitan West (Maynilad)’s Zone ConcessionWaterworks Concession and AgreementSewerage System identified (MWSS) for renegotiation on the provisions and amendment. of Maynilad This Water is an Services, impairmentInc. (Maynilad)’s indicator Concession which requires Agreement also anidentified assessment for renegotiation of the recoverability and amendment. of the Company’s This is an SCA relatedTheimpairment Company to Maynilad. indicator has goodwill Thesewhich impairmentandrequires SCAs also not tests an yet assessmentare available significant forof the useto ourrecoverability which audit are because required of the these to Company’s be require tested for SCA managementimpairmentrelated to Maynilad. at to least make annually. Thesesignificant impairment In addition, estimates tests as and discussed are assumptions significant in Note toon our30, the there auditdetermination isbecause an ongoing these of the discussionrequire recoverable with the amountsMetropolitanmanagement of the toWaterworks cash-generatingmake significant and Sewerage units estimates (CGUs) System and to assumptions which(MWSS) the ongoodwill on the the provisions determination belongs ofor Mayniladas of it relatesthe recoverable Water to the Services, SCAs. TheseInc.amounts (Maynilad)’s estimates of the cash-generating are Concession subject to Agreementhigher units (CGUs)level identified of estimationto which for therenegotiation uncertainty goodwill belongsdue and to amendment. the or currentas it relates economicThis to is the an SCAs. conditionsimpairmentThese estimates which indicator are have subject which been torequiresimpacted higher alsolevel by thean of assessment coronavirusestimation ofuncertainty pandemic, the recoverability specificallydue to the of current thediscount Company’s economic rate and SCA revenue growth,relatedconditions to mainly Maynilad. which relating have These been to the impairmentimpacted expected by volumetests the coronavirusare of significant traffic forpandemic, to the our toll audit specificallyroads, because ridership discountthese for require the rate rail and and revenue billed watermanagementgrowth, volume mainly to for relatingmake the watersignificant to the concession, expected estimates volumeand and capital assumptions of traffic expenditures. for onthe the toll In determination roads,addition, ridership the ofvaluation thefor recoverablethe ofrail the and billed recoverableamountswater volume of theamount for cash-generating the of water Maynilad’s concession, units SCA (CGUs) and requires capital to which judgment expenditures. the goodwillas to the In remainingbelongsaddition, or the periodas valuationit relates of the to ofconcession thethe SCAs. agreementTheserecoverable estimates and amount assumption are subjectof Maynilad’s on to revenuehigher SCA level growth requires of estimation as judgmentit relates uncertainty to as tariff to the rate. remainingdue to the currentperiod of economic the concession conditionsagreement andwhich assumption have been on impacted revenue bygrowth the coronavirus as it relates pandemic, to tariff rate. specifically discount rate and revenue Refergrowth, to mainlyNotes 3, relating 14 and to 30 the to expectedthe consolidated volume financialof traffic statementsfor the toll forroads, the ridershipdetails on for goodwill, the rail SCAsand billed not yetwaterRefer available volumeto Notes for for 3, use, 14the andandwater 30 SCA concession,to therelated consolidated to and Maynilad. capital financial expenditures. statements In foraddition, the details the valuation on goodwill, of the SCAs not recoverableyet available amount for use, of and Maynilad’s SCA related SCA to requiresMaynilad. judgment as to the remaining period of the concession Auditagreement response and assumption on revenue growth as it relates to tariff rate. Audit response WeRefer involved to Notes our 3, internal14 and 30 specialist to the consolidated in evaluating financial the methodologies statements forand the the details assumptions on goodwill, used in SCAs the not determinationyetWe availableinvolved forour of use,theinternal recoverableand SCAspecialist related amounts in evaluatingto Maynilad. of the CGUs.the methodologies These assumptions and the assumptionsinclude the expected used in the volume ofdetermination traffic for the of tollthe roadsrecoverable and ridership amounts for of the the rail, CGUs. billed These water assumptions volume for theinclude water the concession, expected volume growth rateAuditof traffic and response discount for the toll rates. roads For and the ridership West Zone for Concession,the rail, billed assumptions water volume include for the the water concession concession, period, growth forecastedrate and discount cashflows rates. with For probability-weighted the West Zone Concession, scenarios, assumptions and the discount include rate the consideringconcession period,the risks surroundingWeforecasted involved cashflows the our Concession internal with specialist probability-weighted Agreement. in evaluating We compared scenarios, the methodologies the andforecasted the discount and revenue the assumptionsrate growth considering against used the inthe risksthe historicaldeterminationsurrounding data the of Concession the recoverableCGUs, Agreement.taking amounts into consideration We of thecompared CGUs. the the These impact forecasted assumptions associated revenue withinclude growth the thecoronavirus against expected the volume pandemic,ofhistorical traffic fordata and the ofinquired toll the roadsCGUs, from and taking management ridership into considerationfor and the operationsrail, billed the impactpersonnelwater volumeassociated about for the withthe plans water the tocoronavirus concession, support the growth forecastedratepandemic, and discount revenues.and inquired rates. We fromFor also the management compared West Zone the andConcession, Company’s operations assumptionskey personnel assumptions about include such the the plansas concession traffic to support volume, period, the rail ridershipforecasted and cashflowsrevenues. water volume withWe also probability-weighted against compared historical the Company’s data scenarios, and against key and assumptions available the discount studies such rate asby considering traffic independent volume, the parties risksrail thatsurroundingridership were andcommissioned the water Concession volume by theagainstAgreement. respective historical We subsidiaries. compareddata and against theIn cases forecasted available where revenue volumestudies growthbywas independent determined against the partiesby managementhistoricalthat were commissioneddata specialists, of the CGUs, weby thereviewedtaking respective into the consideration reportssubsidiaries. of the the managementIn impact cases whereassociated specialists volume with wasand the determined gainedcoronavirus an by understandingpandemic,management and specialists, ofinquired the methodology from we reviewed management and the the reports basisand operations of of computing the management personnel the forecasted aboutspecialists the volume. plans and gainedto We support tested an the the weightedforecastedunderstanding average revenues. of the cost methodologyWe of capitalalso compared (WACC) and the the usedbasis Company’s in of the computing impairment key assumptions the forecastedtest by comparingsuch volume. as traffic it We with volume, tested WACC the rail of otherridershipweighted comparable andaverage water companiescost volume of capital against in the (WACC) region.historical used For data inthe theand West impairment against Zone available Concession, test by studies comparing we discussedby independent it with with WACC parties of managementthatother were comparable commissioned and itscompanies legal by counsel the in respectivethe the region. status subsidiaries. Forof the the review West In Zone of cases the Concession, Concessionwhere volume we Agreement discussedwas determined and with inquired by of anymanagement correspondences specialists,and its legal with we counselMWSS reviewed theduring statusthe thereports of year; the of reviewand the reviewed management of the Concessionthe basesspecialists of Agreement the and cash gained flow and scenariosan inquired of includingunderstandingany correspondences the probabilities of the methodologywith MWSSassigned duringand to eachthe the basis scenario. year; of andcomputing reviewed the the forecasted bases of volume.the cash Weflow tested scenarios the weightedincluding averagethe probabilities cost of capital assigned (WACC) to each used scenario. in the impairment test by comparing it with WACC of other comparable companies in the region. For the West Zone Concession, we discussed with management and its legal counsel the status of the review of the Concession Agreement and inquired of any correspondences with MWSS during the year; and reviewed the bases of *SGVFSM006036*the cash flow scenarios including the probabilities assigned to each scenario. *SGVFSM006036* A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited 94 *SGVFSM006036*

A member firm of Ernst & Young Global Limited - 3 - - 3 -

Furthermore, we reviewed the Company’s disclosures about those assumptions to which the outcome of theFurthermore, impairment we test reviewed is most the sensitive, Company’s specifically disclosures those about that have those the assumptions most significant to which effect the onoutcome of determiningthe impairment the testrecoverable is most sensitive, amounts specificallyof the goodwill, those- 3 SCAs- that have not yet the available most significant for use, effectand SCA on related to Maynilad.determining the recoverable amounts of the goodwill, SCAs not yet available for use, and SCA related to Maynilad. AmortizationFurthermore, ofwe SCAs reviewed using the the Company’s ‘units of production disclosures (UOP)’ about methodthose assumptions to which the outcome of theAmortization impairment of testSCAs is mostusing sensitive,the ‘units specifically of production those (UOP)’ that havemethod the most significant effect on Thedetermining SCAs related the recoverable to the toll amountsroads and of water the goodwill, concession SCAs agreements not yet availableof the Company for use, are and being SCA amortizedrelated to usingMaynilad.The SCAs the UOP related method. to the tollFor roadsthe toll and roads water concession concession assets, agreements amortization of the isCompany generally are based being on amortized the ratio ofusing the theactual UOP traffic method. volume For to the the toll total roads expected concession traffic assets, volume amortization of the underlying is generally toll expressways based on the over ratio theAmortizationof the remaining actual traffic of period SCAs volume of using the toconcessionthe the ‘units total of expectedagreement. production traffic On (UOP)’ thevolume other method of hand, the underlying for the water-related toll expressways concession over assets,the remaining amortization period is of based the concession on the actual agreement. billed volume On the over other the hand, estimated for the billable water-related water volume concession for remainingTheassets, SCAs amortization periodrelated ofto isthethe based concessiontoll roadson the and agreement.actual water billed concession The volume UOP agreementsover amortization the estimated of themethod Company billable is a keywater are audit being volume matter amortized for as the methodusingremaining the involves UOP period method. significantof the concessionFor managementthe toll agreement. roads judgment concession The and UOP assets, estimates, amortization amortization particularly method is generally in is determininga key based audit onmatter the the total ratioas the expectedofmethod the actual involves traffic traffic volume significant volume and tomanagementthe the total total estimated expected judgment volume traffic and volume ofestimates, billable of thewaterparticularly underlying over the in tolldeterminingremaining expressways periods the total over of the concessiontheexpected remaining traffic agreements. period volume of the andIn addition,concession the total becauseestimated agreement. of volume the Oncoronavirus theof billable other pandemic,hand, water for over the there thewater-related isremaining heightened concessionperiods level of the uncertaintyassets,concession amortization agreements.on the future is based Ineconomic addition, on the outlookactual because billed and of marketthevolume coronavirus forecast. over the pandemic, Theestimated Company therebillable reviewsis heightened water annually volume level thefor of total expectedremaininguncertainty traffic period on the volume of future the concessionwith economic reference outlookagreement. to traffic and Themarketprojection UOP forecast. amortization reports The and Company billablemethod wateris reviews a key volume audit annually matterwith the as total the referencemethodexpected involves trafficto water volume significant volume with forecasts. management reference It toconsiders judgmenttraffic projection different and estimates, factorsreports suchparticularlyand billableas population inwater determining volumegrowth, withsupplythe total and consumption,expectedreference trafficto water and volume servicevolume and coverage forecasts. the total including estimatedIt considers ongoing volume different and of billablefuturefactors expansions. suchwater as over population the remaining growth, periods supply of and the concessionconsumption, agreements. and service In coverage addition, including because ofongoing the coronavirus and future pandemic, expansions. there is heightened level of Referuncertainty to Note on 12 the to future the consolidated economic outlook financial and statements market forecast. for the details The Company of SCAs reviewsand Note annually 3 for the the total discussionexpectedRefer to Note traffic of management12 volume to the consolidated with estimate reference relating financial to traffic to statements amortization projection for reports of the SCAs. details and billableof SCAs water and Notevolume 3 for with the referencediscussion to of water management volume forecasts.estimate relating It considers to amortization different factors of SCAs. such as population growth, supply and consumption,Audit response and service coverage including ongoing and future expansions. Audit response ReferWe reviewed to Note the12 toreport the consolidatedof the management’s financial specialistsstatements and for gainedthe details an understanding of SCAs and Note of the 3 methodologyfor the discussionandWe reviewedthe basis of ofmanagementthe computing report of the estimatethe management’s forecasted relating traffic to specialists amortization volume andand of gainedbillable SCAs. an water, understanding taking into of consideration the methodology the impactand the associatedbasis of computing with the coronavirusthe forecasted pandemic. traffic volume We evaluated and billable the competence,water, taking capabilities, into consideration and the objectivityAuditimpact response associated of management’s with the coronavirus specialists pandemic. who estimated We evaluatedthe forecasted the competence, volumes by consideringcapabilities, theirand qualifications,objectivity of management’s experience and specialists reporting whoresponsibilities. estimated the Furthermore, forecasted volumes we compared by considering the billable their water volumeWequalifications, reviewed and traffic the experience report volume of and theduring reportingmanagement’s the year responsibilities. against specialists the data and Furthermore, generated gained an from weunderstanding comparedthe billing the systemof thebillable methodology for water andvolume thefrom basisand the traffic tollof computing collection volume duringthesystem forecasted the for year tollways. traffic against volumeWe the recalculated data and generated billable the water,fromamortization the taking billing intoexpense system consideration for for the water year the andimpact thefrom associatedSCAs the toll as ofcollection with year-end the coronavirus system based foron the tollways.pandemic. established We We recalculatedtraffic evaluated volume the the andcompetence, amortization billable water capabilities, expense volume. for andthe year objectivityand the SCAs of management’sas of year-end basedspecialists on the who established estimated traffic the forecasted volume and volumes billable by water considering volume. their Provisionsqualifications, and experience contingencies and reporting responsibilities. Furthermore, we compared the billable water volumeProvisions and and traffic contingencies volume during the year against the data generated from the billing system for water Theand fromCompany the toll is involvedcollection in system certain for claims tollways. and/or We proceedings recalculated and the dispute amortization arbitration expense for which for the it hasyear eitherandThe theCompany recognized SCAs asis ofinvolved provisions year-end in forcertainbased probable on claims the costsestablished and/or and/or proceedings trafficexpenses, volume and which dispute and may billable arbitration be incurred, water for volume. and/or which has it has disclosedeither recognized relevant provisions information for about probable such costscontingencies. and/or expenses, This matter which is may significant be incurred, to our and/or audit becausehas theProvisionsdisclosed assessment relevant and ofcontingencies potentialinformation outcome about orsuch liability contingencies. involves significant This matter management is significant judgment to our audit and because estimation.the assessment The of inherent potential uncertainty outcome or over liability the outcome involves of significant these matters management is brought judgment about by andthe differencesTheestimation. Company inThe theis inherentinvolved interpretation uncertainty in certain and implementationclaims over the and/or outcome proceedings of theof these relevant andmatters disputelaws is and brought arbitration regulations. about for by which the it has Refereitherdifferences torecognized Notes in the 16 provisionsinterpretationand 30 to the for consolidated andprobable implementation costs financial and/or of expenses,statements the relevant which for laws the may andrelevant be regulations. incurred, disclosures and/or related has to thisdisclosedRefer matter. to Notes relevant 16 andinformation 30 to the about consolidated such contingencies. financial statements This matter for the is significantrelevant disclosures to our audit related because to thethis assessmentmatter. of potential outcome or liability involves significant management judgment and estimation. The inherent uncertainty over the outcome of these matters is brought about by the differences in the interpretation and implementation of the relevant laws and regulations. Refer to Notes 16 and 30 to the consolidated financial statements for the relevant disclosures related to this matter.

*SGVFSM006036* A member firm of Ernst & Young Global Limited

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Audit response Audit response We involved our internal specialist in evaluating management’s- 4 - assessment on whether any provision for contingenciesWe involved our should internal be recognized, specialist in and evaluating the estimation management’s of such amount. assessment We on also whether discussed any withprovision for Company’scontingencies management should be recognized, the status of and the the claims estimation and/ or of regulatory such amount. proceedings We also and discussed dispute witharbitration. InAuditCompany’s addition, response wemanagement obtained correspondencesthe status of the claimswith the and/ relevant or regulatory government proceedings agencies, and including dispute taxarbitration. authorities,In addition, replieswe obtained from thirdcorrespondences party legal counsels, with the relevantand any relevantgovernment historical agencies, and includingrecent judgments tax issuedWeauthorities, involved by the replies ourcourts/tax internal from authoritiesthird specialist party oninlegal evaluatingsimilar counsels, matters. management’s and any relevant assessment historical on and whether recent any judgments provision for contingenciesissued by the courts/tax should be authoritiesrecognized, on and similar the estimation matters. of such amount. We also discussed with WestCompany’s Service management Area water andthe statussewerage of the service claims revenue and/ or recognition regulatory proceedings and dispute arbitration. InWest addition, Service we Area obtained water correspondencesand sewerage service with therevenue relevant recognition government agencies, including tax Aboutauthorities, 56% repliesof the Company’s from third party consolidated legal counsels, revenues and comprises any relevant water historical and sewerage and recent service judgments revenues fromissuedAbout the by56% Metropolitan the of courts/tax the Company’s Waterworks authorities consolidated onand similar Sewerage revenues matters. System comprises (MWSS) water West and Service sewerage Area. service This revenues matter is significantfrom the Metropolitan to our audit Waterworksbecause water and and Sewerage sewerage System service (MWSS) revenue Westrecognition Service is Area. affected This by matter the: is (a)Westsignificant completeness Service to Areaour ofaudit water data because capturedand sewerage water during and service meter sewerage revenuereadings, service recognition which revenue involves recognition processing is affected large volume by the: of data from(a) completeness multiple locations of data and captured different during billing meter cut-off readings, dates whichfor different involves customers; processing large volume of data (b)Aboutfrom propriety multiple 56% of of locationsthe the Company’s application and different consolidated of the billingrelevant revenues cut-off rates todates comprises the forbillable different water consumption andcustomers; sewerage of different service customersrevenues classifiedfrom(b) propriety the Metropolitan as residential,of the application Waterworks semi-business, of the and relevant commercialSewerage rates System toor theindustrial; billable(MWSS) and consumption West (c) reliabilityService of Area. different of the This systems customers matter is involvedsignificantclassified in as to processing residential, our audit billsbecause semi-business, and waterrecording and commercial seweragerevenues. serviceor industrial; revenue and recognition (c) reliability is affected of the systems by the: (a)involved completeness in processing of data bills captured and recording during meter revenues. readings, which involves processing large volume of data Notesfrom multiple 3 and 39 locations to the consolidated and different financial billing statementscut-off dates provide for different the relevant customers; disclosures related to this matter.(b)Notes propriety 3 and 39 of tothe the application consolidated of the financial relevant statements rates to the provide billable the consumption relevant disclosures of different related customers to this classifiedmatter. as residential, semi-business, commercial or industrial; and (c) reliability of the systems Auditinvolved response in processing bills and recording revenues. Audit response WeNotes obtained 3 and 39 an to understanding the consolidated of the financial water and statements sewerage provide service the revenue relevant process, disclosures which related includes to this maintainingmatter.We obtained the an customerunderstanding database, of the capturing water and billable sewerage water service consumption, revenue process,uploading which captured includes billable watermaintaining consumption the customer to the billingdatabase, system, capturing calculating billable billable water consumption, amounts based uploading on MWSS captured approved billable rates, andAuditwater uploading responseconsumption data fromto the the billing billing system, system calculating to the financial billable reporting amounts system. based on We MWSS also evaluated approved the rates, designand uploading of and tested data from the relevant the billing controls system over to thethis financial process. reporting In addition, system. on a sampleWe also basis, evaluated we performed the recalculationWedesign obtained of and an oftested theunderstanding billed the relevant amounts, of controls the including water over and the this sewerage estimated process. service billingsIn addition, revenue during on process, thea sample community which basis, includes lockdownwe performed and themaintainingrecalculation subsequent the of actualization thecustomer billed database,amounts, thereto, capturingincluding using the billablethe MWSS estimated water approved billingsconsumption, rates during and formulaeuploading the community and captured compared lockdown billable them and withwaterthe subsequent the consumption amounts actualization reflected to the billing in thereto, the system,billing using statements. calculating the MWSS billableMoreover, approved amounts werates involved andbased formulae onour MWSS internal and approvedcompared specialist rates, themin performingandwith uploading the amounts the data procedures reflected from the onin billing thethe billingcomputer system statements. toapplication the financial Moreover, automated reporting we aspects involved system. of our thisWe internal process.also evaluated specialist the in designperforming of and the tested procedures the relevant on the controls computer over application this process. automated In addition, aspects on of a samplethis process. basis, we performed Investmentrecalculation in ofa significantthe billed amounts, associate including the estimated billings during the community lockdown and theInvestment subsequent in a actualizationsignificant associate thereto, using the MWSS approved rates and formulae and compared them Thewith Companythe amounts has reflected an investment in the inbilling Manila statements. Electric Company Moreover, (Meralco) we involved that ouris accounted internal specialist for under in the equityperformingThe Company method. the has procedures For an the investment year on ended the incomputer DecemberManila Electricapplication 31, 2020, Company automated the Company’s (Meralco) aspects effective that of thisis accounted process.share in thefor netunder income the ofequity Meralco method. amounted For the to year =7.0P ended billion December and accounts 31, 2020,for 68% the of Company’s the Company’s effective consolidated share in the net net income. income Investmentof Meralco inamounted a significant to =7.0P associate billion and accounts for 68% of the Company’s consolidated net income. The Company’s share in Meralco’s net income is significantly affected by Meralco’s revenue recognition, provisionsThe CompanyCompany’s and hascontingencies, share an investment in Meralco’s and in expected netManila income Electriccredit is significantlylosses Company (ECL) (Meralco)affected for receivables. by that Meralco’s is accounted revenue for recognition,under the equityprovisions method. and contingencies, For the year ended and expected December credit 31, 2020,losses the(ECL) Company’s for receivables. effective share in the net income Meralco’sof Meralco revenues amounted from to =7.0P the salebillion of electricityand accounts arise for from 68% its of service the Company’s contracts consolidatedwith large number net income. of customersMeralco’s revenuesthat are classified from the assale either of electricity commercial, arise industrial from its orservice residential, contracts located with withinlarge number Meralco’s of franchiseThecustomers Company’s area. that areThis share classified matter in Meralco’s is as significant either net commercial, income to our auditis significantly industrial because orthe affected residential, revenue by recognized Meralco’slocated within dependsrevenue Meralco’s recognition,on (a) the completeprovisionsfranchise area.capture and Thiscontingencies, of matterelectric is consumption significant and expected to based our credit audit on losses the because meter (ECL) thereadings for revenue receivables. over recognized the franchise depends area takenon (a) on the variouscomplete dates capture including of electric the reasonableness consumption based of the on estimated the meter billings readings during over thethe communityfranchise area lockdown; taken on Meralco’svarious dates revenues including from the the reasonableness sale of electricity of the arise estimated from its billings service during contracts the withcommunity large number lockdown; of customers that are classified as either commercial, industrial or residential, located within Meralco’s franchise area. This matter is significant to our audit because the revenue recognized depends on (a) the complete capture of electric consumption based on the meter readings over the*SGVFSM006036* franchise area taken on various dates including the reasonableness of the estimated billings during the*SGVFSM006036* community lockdown; A member firm of Ernst & Young Global Limited

A member firm of Ernst & Young Global Limited 96 *SGVFSM006036*

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(b) the propriety of rates computed and applied across customer classes including the application of adjustments(b) the propriety promulgated of rates computed by the Energy and applied Regulatory across Commission customer classes (ERC); including and (c) the the reliability application of theof informationadjustments technologypromulgated (IT) by systemsthe Energy involved Regulatory in processing- Commission5 - the billing (ERC); transactions. and (c) the Inreliability addition, of Meralco the isinformation involved in technology certain proceedings (IT) systems and involved claims for in processingwhich it recognized the billing provisions transactions. for probableIn addition, costs Meralco and/or expenses,is involved which in certain may proceedingsbe incurred, andand/or claims has disclosedfor which relevant it recognized information provisions about for such probable contingencies. costs and/or This(b)expenses, the matter propriety which is important mayof rates be toincurred,computed our audit and/or and because applied has thedisclosed across determination customer relevant of informationclasses whether including any about provision thesuch application contingencies. should be of recognizedadjustmentsThis matter and ispromulgated important the estimation to by our the of audit Energy the becausepotential Regulatory the liability determination Commission resulting offrom (ERC); whether these and anyassessments (c) provision the reliability require should of significant be the judgmentinformationrecognized which and technology the will estimation significantly (IT) systems of the affect potentialinvolved Meralco’s liabilityin processing net resultingincome. the frombillingThe inherentthese transactions. assessments uncertainty In addition, require over the significant Meralco outcomeisjudgment involved of which inthese certain will matters significantlyproceedings is brought andaffect about claims Meralco’s by thefor whichdifferences net income. it recognized in the The interpretation inherent provisions uncertainty for and probable implementation over costs the and/or of theexpenses,outcome relevant of which theselaws mayandmatters regulations.be incurred, is brought Further,and/or about has byin 2020,disclosedthe differences Meralco relevant reassessedin theinformation interpretation its approach about and such in implementation calculating contingencies. ECL. of Meralco’sThisthe relevant matter allowance islaws important and forregulations. toECL our and audit Further,the because provision in 2020,the for determination MeralcoECL as ofreassessed and of whetherfor the its year approachany endedprovision in December calculating should 31,be ECL. 2020 amountedrecognizedMeralco’s toallowance and =4.3P the billion estimation for ECLand P=1.9 andof the thebillion, potential provision respectively. liability for ECL resulting The as of use and from of for ECL these the model year assessments ended is significant December require to significant our31, audit2020 judgmentasamounted it involves whichto =4.3P the will exercise billion significantly and of significantP=1.9 affectbillion, managementMeralco’s respectively. net judgment. income. The use TheKeyof ECL inherent areas model of uncertaintyjudgment is significant include: over to the our audit outcomesegmentingas it involves of theseMeralco’s the exercisematters credit isof brought significantrisk exposures; about management by defining the differences judgment.default; in determining the Key interpretation areas assumptions of judgment and implementation toinclude: be used in the of theECLsegmenting relevant model; Meralco’s lawsand incorporatingand regulations. credit risk forward-looking exposures;Further, in defining2020, information Meralco default; reassessed(called determining overlays), its approachassumptions including in calculating to the be impact used ECL.in of the Meralco’scoronavirusECL model; allowance pandemic,and incorporating for in ECL calculating and forward-looking the ECL. provision informationfor ECL as of (called and for overlays), the year includingended December the impact 31, of2020 amountedcoronavirus to pandemic, =4.3P billion in andcalculating P=1.9 billion, ECL. respectively. The use of ECL model is significant to our audit Noteas it involves 30 to the the consolidated exercise of financial significant statements management provides judgment. the relevant Key areasdisclosures of judgment related include: to this matter. segmentingNote 30 to the Meralco’s consolidated credit financial risk exposures; statements defining provides default; the relevantdetermining disclosures assumptions related to to be this used matter. in the AuditECL model; response and incorporating forward-looking information (called overlays), including the impact of coronavirusAudit response pandemic, in calculating ECL. We obtained the consolidated financial information of Meralco for the year ended December 31, 2020 andNoteWe obtainedperformed 30 to the the consolidatedrecomputation consolidated financial financialof the Company’s statements information providesequity of Meralco in thenet relevantearnings for the disclosures yearof Meralco. ended relatedDecember to this 31, matter. 2020 and performed recomputation of the Company’s equity in net earnings of Meralco. ForAudit Meralco’s response revenue, we obtained an understanding and evaluated the design of, as well as tested the controlsFor Meralco’s over, therevenue, customer we obtainedmaster file an maintenance, understanding accumulation and evaluated and the processing design of, ofas meterwell as data, tested and the interfaceWecontrols obtained over,of data the the fromconsolidated customer the billing master financial system file maintenance,information to the financial of accumulation Meralco reporting for system. andthe yearprocessing In ended addition, Decemberof meter on a data,sample 31, and2020 basis, weandinterface performed performed of data recalculation recomputation from the billing of ofthe thesystem bill Company’s amounts to the financialusing equity the in reporting ERC-approved net earnings system. of rates, Meralco. In addition, adjustments on a andsample formulae, basis, aswe well performed as actual recalculation pass-through of coststhe bill incurred, amounts and using compared the ERC-approved them with the rates, amounts adjustments reflected and in formulae,the billing statements.Foras well Meralco’s as actual We revenue, involvedpass-through we our obtained internal costs incurred,an specialist understanding and in compared understanding and evaluated them thewith theIT the processes design amounts of, and as reflected well in understanding as intested the billingthe andcontrolsstatements. testing over, the We the controls involved customer over our master the internal IT filesystems specialist maintenance, supporting in understanding accumulation the revenue the andprocess. IT processing processes andof meter in understanding data, and interfaceand testing of thedata controls from the over billing the ITsystem systems to the supporting financial the reporting revenue system. process. In addition, on a sample basis, Forwe performedMeralco’s recalculationprovisions, we of examined the bill amounts its assessment using the of ERC-approvedthe possible outcomes rates, adjustments and the related and formulae,estimates ofasFor thewell Meralco’s probable as actual provisions, costs pass-through and/or we expenses examinedcosts incurred, that its are assessment andrecognized compared of and/orthe them possible disclosed with outcomes the inamounts its financialand reflected the related statements. in theestimates billing In addition,statements.of the probable we Weevaluated costs involved and/or the our input expenses internal data supportingthatspecialist are recognized in the understanding assumptions and/or disclosed used,the IT such processes in as its tariffs, financial and taxin understanding statements.rates, historical In experience,andaddition, testing we theregulatory evaluated controls rulingsthe over input the and ITdata other systems supporting developments, supporting the assumptions theagainst revenue Meralco’s used, process. such internal as tariffs, and taxexternal rates, data, historical and performedexperience, recalculations regulatory rulings and inspection and other developments,of relevant supporting against documents.Meralco’s internal and external data, and Forperformed Meralco’s recalculations provisions, and we inspectionexamined itsof relevantassessment supporting of the possible documents. outcomes and the related estimates Forof the Meralco’s probable ECL, costs weand/or obtained expenses an understanding that are recognized of the and/ormethodologies disclosed and in itsmodels financial used statements. for Meralco’s In differentaddition,For Meralco’s creditwe evaluated ECL, exposures we the obtained and input assessed data an understanding supporting whether thesethe of assumptions consideredthe methodologies theused, requirements such and as models tariffs, of usedPFRS tax rates,for 9 toMeralco’s historicalreflect an unbiasedexperience,different creditand regulatory probability-weighted exposures rulings and assessedand otheroutcome whether developments, and these the best considered against available Meralco’s the forward-looking requirements internal andof information. PFRS external 9 to data, reflect and an performedunbiased and recalculations probability-weighted and inspection outcome of relevant and the supportingbest available documents. forward-looking information. We (a) assessed the Meralco’s segmentation of its credit risk exposures based on homogeneity of credit riskForWe Meralco’s(a)characteristics; assessed ECL, the (b) Meralco’swe tested obtained the segmentation andefinition understanding of of default its credit of theagainst risk methodologies exposureshistorical analysisbased and models on of homogeneity accounts used for and Meralco’s of credit credit riskdifferent managementcharacteristics; credit exposures policies (b) tested and thepracticesassessed definition whetherin place; of default these (c) tested consideredagainst historical historical the lossrequirements analysis rates by of inspecting ofaccounts PFRS 9 andhistorical to reflectcredit an collections,unbiasedrisk management and recoveries probability-weighted policies and and write-offs; practices outcome (d) in checkedplace; and the(c) the testedbest classification available historical forward-looking ofloss outstanding rates by inspecting exposuresinformation. historical to their correspondingcollections, recoveries aging buckets; and write-offs; and (e) checked (d) checked the forward-lookingthe classification information of outstanding used exposures for overlay to theirthrough Wecorresponding (a) assessed aging the Meralco’s buckets; and segmentation (e) checked of the its forward-lookingcredit risk exposures information based on used homogeneity for overlay of through credit risk characteristics; (b) tested the definition of default against historical analysis of accounts and credit risk management policies and practices in place; (c) tested historical loss rates by inspecting historical collections, recoveries and write-offs; (d) checked the classification of outstanding exposures to their corresponding aging buckets; and (e) checked the forward-looking information*SGVFSM006036* used for overlay through A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited *SGVFSM006036* 97

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statistical test and corroboration using publicly available information and our understanding of Meralco’s receivablestatistical test portfolios and corroboration and industry, using including publicly the available impact of information the coronavirus and our pandemic. understanding of Meralco’s receivable portfolios and industry, including the impact- 6 - of the coronavirus pandemic. Further, we checked the data used in the ECL models, such as the historical aging analysis and default andFurther, recovery we checked data, by the reconciling data used data in the from ECL the models, billing suchsystem as theto the historical loss allowance aging analysis analysis/models and default and financialstatisticaland recovery reporting test data, and corroborationbysystems. reconciling To theusing data extent publiclyfrom that the the availablebilling loss systemallowance information to the analysis loss and allowanceour is based understanding on analysis/models credit ofexposures Meralco’s and thatreceivablefinancial have reportingbeen portfolios disaggregated systems. and industry, To into the subsets including extent with that the similarthe impact loss risk allowance of thecharacteristics, coronavirus analysis weispandemic. based traced on the credit disaggregation exposures fromthat have source been systems disaggregated to the loss into allowance subsets with analysis. similar risk characteristics, we traced the disaggregation Further,from source we checkedsystems theto the data loss used allowance in the ECL analysis. models, such as the historical aging analysis and default Otherand recovery Information data, by reconciling data from the billing system to the loss allowance analysis/models and financialOther Information reporting systems. To the extent that the loss allowance analysis is based on credit exposures Managementthat have been is disaggregated responsible for into the subsets other information. with similar riskThe characteristics,other information we comprises traced the thedisaggregation information includedfromManagement source in the systems is SECresponsible Formto the 20-IS lossfor theallowance (Definitive other information. analysis. Information The Statement), other information SEC Form comprises 17-A and the Annual information Report forincluded the year in theended SEC December Form 20-IS 31, (Definitive2020, but does Information not include Statement), the consolidated SEC Form financial 17-A andstatements Annual andReport our auditor’sOtherfor the Informationyear report ended thereon. December The 31,SEC 2020, Form but 20-IS does (Definitive not include Information the consolidated Statement), financial SEC statements Form 17-A and and our Annualauditor’s Report report for thereon. the year The ended SEC December Form 20-IS 31, (Definitive 2020 are expected Information to be Statement), made available SEC toForm us after17-A the and dateManagementAnnual of thisReport auditor’s is forresponsible the report. year endedfor the December other information. 31, 2020 areThe expected other information to be made comprises available the to usinformation after the includeddate of this in auditor’sthe SEC Formreport. 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report Ourfor the opinion year ended on the December consolidated 31, financial2020, but statements does not include does not the cover consolidated the other financial information statements and we andwill ournot expressauditor’sOur opinion any report formon thethereon. of consolidated assurance The SEC conclusion financial Form 20-IS statementsthereon. (Definitive does notInformation cover the Statement), other information SEC Form and we17-A will and not Annualexpress Reportany form for of the assurance year ended conclusion December thereon. 31, 2020 are expected to be made available to us after the Indate connection of this auditor’s with our report. audits of the consolidated financial statements, our responsibility is to read the otherIn connection information with identified our audits above of the when consolidated it becomes financial available statements, and, in doing our responsibility so, consider whetheris to read the the other informationOurother opinion information ison materially the identified consolidated inconsistent above financial when with it statements becomesthe consolidated available does not financial and,cover in the statementsdoing other so, information consider or our knowledge whether and we the will other not obtainedexpressinformation any in theformis materially audits, of assurance or otherwiseinconsistent conclusion appears with thereon. the to beconsolidated materially financialmisstated. statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated. ResponsibilitiesIn connection with of our Management audits of the and consolidated Those Charged financial with statements, Governance our responsibilityfor the Consolidated is to read the FinancialotherResponsibilities information Statements of identified Management above andwhen Those it becomes Charged available with Governanceand, in doing for so, theconsider Consolidated whether the other informationFinancial Statements is materially inconsistent with the consolidated financial statements or our knowledge obtainedManagement in the is audits,responsible or otherwise for the preparationappears to beand materially fair presentation misstated. of the consolidated financial statementsManagement in isaccordance responsible with for PFRSs, the preparation and for such and fairinternal presentation control as of management the consolidated determines financial is Responsibilitiesnecessarystatements to in enable accordance of Managementthe preparation with PFRSs, and of consolidated andThose for Chargedsuch internalfinancial with control statementsGovernance as management that for are the free Consolidated determines from material is Financialmisstatement,necessary toStatements enable whether the duepreparation to fraud ofor consolidatederror. financial statements that are free from material misstatement, whether due to fraud or error. ManagementIn preparing the is responsibleconsolidated for financial the preparation statements, and managementfair presentation is responsible of the consolidated for assessing financial the statementsCompany’sIn preparing in ability the accordance consolidated to continue with financial PFRSs,as a going andstatements, concern, for such disclosing,management internal control as isapplicable, responsible as management matters for assessing determines related tothe going is necessaryconcernCompany’s and to abilityusingenable theto the continue going preparation concern as a goingof basis consolidated concern, of accounting disclosing, financial unless statements as management applicable, that mattersare either free intends relatedfrom material to liquidategoing misstatement,theconcern Company and using orwhether to thecease going due operations, to concern fraud or orbasis error. has ofno accounting realistic alternative unless management but to do so. either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. InThose preparing charged the with consolidated governance financial are responsible statements, for management overseeing the is responsibleCompany’s forfinancial assessing reporting the process. Company’sThose charged ability with to governance continue as are a going responsible concern, for disclosing, overseeing as the applicable, Company’s matters financial related reporting to going process. concernAuditor’s and Responsibilities using the going forconcern the Audit basis ofof theaccounting Consolidated unless Financialmanagement Statements either intends to liquidate Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements the Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a Thosewhole chargedare free fromwith governancematerial misstatement, are responsible whether for overseeingdue to fraud the or Company’s error, and to financial issue an reporting auditor’s process.report thatwhole includes are free our from opinion. material Reasonable misstatement, assurance whether is a due high to level fraud of or assurance, error, and butto issue is not an a guaranteeauditor’s report that an Auditor’sauditthat includes conducted Responsibilities our in opinion. accordance Reasonable for with the AuditPSAs assurance willof the always isConsolidated a high detect level a material ofFinancial assurance, misstatement Statements but is not when a guarantee it exists. that an Misstatementsaudit conducted can in accordancearise from fraud with orPSAs error will and always are considered detect a material material misstatement if, individually when or in it theexists. aggregate,OurMisstatements objectives they can arecould toarise obtainreasonably from reasonable fraud be orexpected error assurance and to areinfluence about considered whether the economic material the consolidated if,decisions individually financialof users or in takenstatements the on the as a basiswholeaggregate, of are these freethey consolidated from could material reasonably financial misstatement, be expectedstatements. whether to influence due to the fraud economic or error, decisions and to issue of users an auditor’s taken on report the thatbasis includes of these our consolidated opinion. Reasonablefinancial statements. assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually*SGVFSM006036* or in the aggregate, they could reasonably be expected to influence the economic decisions*SGVFSM006036* of users taken on the Abasis member offirm ofthese Ernst & Youngconsolidated Global Limited financial statements. A member firm of Ernst & Young Global Limited 98 *SGVFSM006036*

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As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professionalAs part of an skepticism audit in accordance throughout with the PSAs, audit. we We exercise also: professional judgment and maintain professional skepticism throughout the audit. We also:- 7 - x Identify and assess the risks of material misstatement of the consolidated financial statements, x whetherIdentify anddue assessto fraud the or risks error, of design material and misstatement perform audit of procedures the consolidated responsive financial to those statements, risks, and As partobtainwhether of anaudit due audit evidenceto infraud accordance orthat error, is sufficient with design PSAs, and and weperform appropriate exercise audit professional to procedures provide a judgment responsivebasis for andour to opinion. maintainthose risks, The and risk of professionalnotobtain detecting audit skepticism evidence a material throughout that misstatement is sufficient the audit. resulting and We appropriate also: from fraud to provide is higher a basisthan forfor oneour opinion.resulting fromThe risk error, of asnot fraud detecting may involvea material collusion, misstatement forgery, resulting intentional from omissions, fraud is higher misrepresentations, than for one resulting or the overridefrom error, of x Identifyinternalas fraud control.andmay assess involve the collusion, risks of material forgery, misstatement intentional omissions, of the consolidated misrepresentations, financial statements,or the override of whetherinternal control.due to fraud or error, design and perform audit procedures responsive to those risks, and x obtainObtain auditan understanding evidence that of is internal sufficient control and appropriate relevant to tothe provide audit in a orderbasis tofor design our opinion. audit procedures The risk of x notthatObtain detectingare anappropriate understanding a material in the misstatement of circumstances, internal control resulting but relevant not from for tofraudthe the purpose isaudit higher in of order expressingthan tofor design one an resulting opinionaudit procedures fromon the error, aseffectivenessthat fraud are appropriatemay involveof the inCompany’s collusion, the circumstances, forgery,internal control.intentional but not for omissions, the purpose misrepresentations, of expressing an opinion or the override on the of internaleffectiveness control. of the Company’s internal control. x Evaluate the appropriateness of accounting policies used and the reasonableness of accounting x ObtainestimatesEvaluate an the andunderstanding appropriateness related disclosures of internal of accounting made control by management. policiesrelevant usedto the and audit the in reasonableness order to design of audit accounting procedures thatestimates are appropriate and related in disclosures the circumstances, made by but management. not for the purpose of expressing an opinion on the x effectivenessConclude on theof the appropriateness Company’s internal of management’s control. use of the going concern basis of accounting and, x basedConclude on the on auditthe appropriateness evidence obtained, of management’s whether a material use of uncertaintythe going concern exists related basis of to accounting events or and, x Evaluateconditionsbased on the that appropriatenessaudit may evidence cast significant obtained, of accounting doubt whether on policies the a material Company’s used anduncertainty abilitythe reasonableness to exists continue related asof a toaccounting going events concern. or estimatesIfconditions we conclude and that related maythat acast disclosuresmaterial significant uncertainty made doubt by exists,onmanagement. the Company’swe are required ability to drawto continue attention as ain going our auditor’s concern. reportIf we conclude to the related that adisclosures material uncertainty in the consolidated exists, we financial are required statements to draw or, attention if such disclosuresin our auditor’s are x Concludeinadequate,report to the on to relatedthe modify appropriateness disclosures our opinion. in of the Ourmanagement’s consolidated conclusions usefinancial are of based the statements going on the concern audit or, evidenceif basis such of disclosures accountingobtained upare and, to basedtheinadequate, date on of the our to audit modifyauditor’s evidence our report. opinion. obtained, However, Our whether conclusions future a material events are orbased uncertainty conditions on the exists auditmay causeevidencerelated the to obtained Companyevents or up to to conditionsceasethe date to ofcontinue thatour auditor’smay as casta going report.significant concern. However, doubt onfuture the Company’sevents or conditions ability to maycontinue cause as the a goingCompany concern. to Ifcease we concludeto continue that as a a material going concern. uncertainty exists, we are required to draw attention in our auditor’s x reportEvaluate to the relatedoverall disclosurespresentation, in structurethe consolidated and content financial of the statements consolidated or, iffinancial such disclosures statements, are x inadequate,includingEvaluate the the to overall disclosures, modify presentation, our andopinion. whether structure Our the conclusions consolidated and content are of financialbased the consolidated on statements the audit evidencefinancial represent statements,obtained the underlying up to thetransactionsincluding date of the our and disclosures, auditor’s events in report. anda manner whether However, that the achieves consolidatedfuture eventsfair presentation. financialor conditions statements may cause represent the Company the underlying to ceasetransactions to continue and events as a going in a mannerconcern. that achieves fair presentation. x Obtain sufficient appropriate audit evidence regarding the financial information of the entities or x EvaluatebusinessObtain sufficient activitiesthe overall appropriate within presentation, the Companyaudit structure evidence to express and regarding content an opinion the of thefinancial onconsolidated the information consolidated financial of financial the statements, entities or includingstatements.business activities the We disclosures, are within responsible theand Company whether for the the direction,to expressconsolidated supervision an opinion financial andon the statementsperformance consolidated represent of financialthe audit. the underlying We transactionsremainstatements. solely Weand responsible areevents responsible in fora manner our for audit thethat opinion.direction, achieves supervisionfair presentation. and performance of the audit. We remain solely responsible for our audit opinion. xWe communicateObtain sufficient with appropriate those charged audit with evidence governance regarding regarding, the financial among information other matters, of thethe entitiesplanned or scope We communicate with those charged with governance regarding, among other matters, the planned scope and businesstiming of activities the audit withinand significant the Company audit tofindings, express including an opinion any on significant the consolidated deficiencies financial in internal and timing of the audit and significant audit findings, including any significant deficiencies in internal controlstatements. that we identify We are duringresponsible our audit. for the direction, supervision and performance of the audit. We control that we identify during our audit. remain solely responsible for our audit opinion. We also provide those charged with governance with a statement that we have complied with relevant Weethical communicatealso requirements provide those with regarding chargedthose charged independence,with governance with governance and with to communicate a regarding,statement thatamong with we them otherhave all matters,complied relationships the with planned relevantand other scope andmattersethical timing requirements that of may the reasonablyaudit regarding and significant be independence,thought audit to bear findings, and on toour communicate including independence, any with significant and them where all deficiencies applicable,relationships inrelated andinternal other controlsafeguards.matters thatthat wemay identify reasonably during be ourthought audit. to bear on our independence, and where applicable, related safeguards. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

*SGVFSM006036* A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited *SGVFSM006036* 99

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From the matters communicated with those charged with governance, we determine those matters that wereFrom ofthe most matters significance communicated in the auditwith thoseof the chargedconsolidated with governance,financial statements we determine of the thosecurrent matters period that and arewere therefore of most thesignificance key audit inmatters. the audit We of describe the consolidated these- 8 -matters financial in our statements auditor’s ofreport the current unless lawperiod or and regulationare therefore precludes the key publicaudit matters. disclosure We about describe the matter these mattersor when, in inour extremely auditor’s rare report circumstances, unless law or we determineregulation thatprecludes a matter public should disclosure not be communicated about the matter in orour when, report in because extremely the rareadverse circumstances, consequences we of Fromdoingdetermine theso wouldmatters that a reasonably matter communicated should be expectednot with be communicatedthose to outweigh charged thewith in ourpublic governance, report interest because we benefits determine the adverse of such those consequences communication. matters that of weredoing of so most would significance reasonably in be the expected audit of to the outweigh consolidated the public financial interest statements benefits of of the such current communication. period and areThe therefore engagement the keypartner audit on matters. the audit We resulting describe in thesethis independent matters in our auditor’s auditor’s report report is Marydith unless law C. or Miguel. regulationThe engagement precludes partner public on disclosurethe audit resulting about the in matter this independent or when, in auditor’s extremely report rare iscircumstances, Marydith C. Miguel.we determine that a matter should not be communicated in our report because the adverse consequences of doingSYCIP so GORRES would reasonably VELAYO be & expected CO. to outweigh the public interest benefits of such communication. SYCIP GORRES VELAYO & CO. The engagement partner on the audit resulting in this independent auditor’s report is Marydith C. Miguel.

SYCIPMarydith GORRES C. Miguel VELAYO & CO. PartnerMarydith C. Miguel CPAPartner Certificate No. 65556 SECCPA AccreditationCertificate No. No. 65556 0087-AR-5 (Group A), SEC January Accreditation 10, 2019, No. valid 0087-AR-5 until January (Group 9, A), 2022 MarydithTax JanuaryIdentification C. 10,Miguel 2019, No. valid102-092-270 until January 9, 2022 PartnerBIRTax IdentificationAccreditation No.No. 102-092-27008-001998-055-2020, CPA BIR DecemberAccreditation Certificate 3, No. 2020, No. 65556 08-001998-055-2020,valid until December 2, 2023 SECPTR December AccreditationNo. 8534334, 3, 2020, No.January 0087-AR-5valid 4, until 2021, December (Group Makati A), City 2, 2023 PTR January No. 8534334, 10, 2019, January valid 4,until 2021, January Makati 9, 2022City TaxMarch Identification 19, 2021 No. 102-092-270 BIRMarch Accreditation 19, 2021 No. 08-001998-055-2020, December 3, 2020, valid until December 2, 2023 PTR No. 8534334, January 4, 2021, Makati City

March 19, 2021

*SGVFSM006036* A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited 100 *SGVFSM006036*

A member firm of Ernst & Young Global Limited METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Metro(AmountsMETRO Pacific inPACIFIC Millions) InvestmentsINVESTMENTS CORPORATIONCorporation andAND SubsidiariesSUBSIDIARIES ConsolidatedCONSOLIDATEDMETRO PACIFIC Statements STATEMENTSINVESTMENTS of OF CORPORATION Financial FINANCIAL Position POSITION AND SUBSIDIARIES CONSOLIDATED(Amounts in Millions) STATEMENTS OF FINANCIAL POSITION (Amounts in Millions) December 31 2020 2019 December 31 ASSETS 2020 December 31 2019 2020 2019 ASSETSCurrent Assets Cash and cash equivalents and short-term deposits (Notes 7, 34 and 35) P=48,822 P=74,697 ASSETS CurrentRestricted Assets cash (Notes 7, 30, 34 and 35) 1,852 5,011 Receivables (Notes 8, 19, 34 and 35) 8,228 14,624 CurrentCash and Assetscash equivalents and short-term deposits (Notes 7, 34 and 35) P=48,822 P=74,697 Other current assets (Notes 9, 10, 34 and 35) 8,007 10,905 CashRestricted and cash cash equivalents (Notes 7, 30, and 3 4shortand -3term5) deposits (Notes 7, 34 and 35) P=48,8221,852 P=74,6975,011 Assets under PFRS 5* (Note 33) 75,969 – RestrictedReceivables cash (Notes (Notes 8, 19,7, 30,34 and34 and 35) 35) 1,8528,228 14,6245,011 ReceivablesOther currentTotal (Notes assetsCurrent 8,(Notes 19,Assets3 49,and10, 3354)and 35) 148,2288,0072,878 105,23714,62410,905 OtherAssets current under PFRSassets 5(Notes* (Note 9, 310,3) 34 and 35) 75,9698,007 10,905– AssetsNoncurrent underTotal AssetsPFRS Current 5* Assets(Note 33) 1475,9692,878 105,237– Investments and advances (Notes 10, 32, 33, and 34 169,092 Total Current Assets 14159,4742,878 105,237 NoncurrentService concession Assets assets (Notes 1, 12 and 14) 275,864 240,489 Property, plant and equipment (Note 13) 6,878 58,591 NoncurrentInvestments andAssets advances (Notes 10, 32, 33, and 34 159,474 169,092 Goodwill (Note 11) 15,337 15,676 InvestmentsService concession and advances assets (Notes(Notes 1,10, 1232, and 33, 14)and 34 159,474275,864 169,092240,489 Intangible assets (Note 11) 705 3,279 ServiceProperty, concession plant and assetsequipment (Notes (Note 1, 12 13) and 14) 275,8646,878 240,48958,591 Deferred tax assets (Note 26) 201 927 Property,Goodwill plant(Note and 11) equipment (Note 13) 15,3376,878 58,59115,676 Other noncurrent assets (Notes 8, 9, 10, 23, 32, 34 and 35) 16,459 18,487 GoodwillIntangible (Note assets 11) (Note 11) 15,337705 15,6763,279 IntangibleDeferredTotal tax assets assets Noncurrent (Note (Note 11) 26)Assets 474,918705201 506,5413,279927 DeferredOther noncurrent tax assets assets (Note (Notes 26) 8, 9, 10, 23, 32, 34 and 35) 16,459201 18,487927 Other noncurrentTotal Noncurrent assets (Notes Assets 8, 9, 10, 23, 32, 34 and 35) P=474,918617,79616,459 P=506,541611,77818,487 Total Noncurrent Assets 474,918 506,541 P=617,796 P=611,778 LIABILITIES AND EQUITY P=617,796 P=611,778

LIABILITIESCurrent Liabilities AND EQUITY Accounts payable and other current liabilities (Notes 15, 19, 34 and 35) P=35,172 P=36,363 LIABILITIES AND EQUITY CurrentIncome tax Liabilities payable 927 1,639 Due to related parties (Notes 19, 34 and 35) 2,481 5,638 CurrentAccounts Liabilities payable and other current liabilities (Notes 15, 19, 34 and 35) P=35,172 P=36,363 long-term debt AccountsIncomeShort-term tax payable payableand current and other portion current of liabilities (Notes 15, 19, 34 and 35) P=35,927172 P=36,3631,639 IncomeDue (Notesto related tax 18,payable parties34 and (Notes35) 19, 34 and 35) 23,92,48192761 18,4591,6395,638 Current portion of: DueShort-term to related and parties current (Notes portion 19, of34long-termand 35) debt 2,481 5,638 Provisions (Note 16) 6,708 6,742 Short-term(Notes 18,and 3 current4 and 3 5portion) of long-term debt 23,961 18,459 Service concession fees payable (Notes 17, 34 and 35) 5,826 6,277 Current(Notes portion 18, 3 of:4 and 35) 23,961 18,459 Liabilities under PFRS 5* (Note 33) 40,519 – CurrentProvisions portion (Note of: 16) 6,708 6,742 ProvisionsServiceTotalconcession Current (Note 16) Liabilities fees payable (Notes 17, 34 and 35) 116,7085,8265,594 75,1186,7426,277 LiabilitiesService underconcession PFRS 5fees* (Note payable 33) (Notes 17, 34 and 35) 45,8260,519 6,277– Liabilities(Forward)Total under Current PFRS Liabilities 5* (Note 33) 1140,5195,594 75,118– Total Current Liabilities 115,594 75,118 (Forward) (Forward)

*SGVFSM006036* *SGVFSM006036* *SGVFSM006036* 101 - 2 -

- 2 - December 31 2020 2019 December 31 Noncurrent Liabilities 2020 2019 Noncurrent portion of: NoncurrentProvisions Liabilities (Note 16) P=3,416 P=4,997 NoncurrentService portionconcession of: fees payable (Notes 17, 34 and 35) 23,608 26,621 ProvisionsLong-term (Notedebt (Notes16) 18, 34 and 35) 207,405P=3,416 231,450P=4,997 Due Serviceto related concession parties (Notes fees payable19, 34 and (Notes 35) 17, 34 and 35) 23,608– 26,6212,240 DeferredLong tax-term liabilities debt (Notes (Note18,26) 34 and 35) 207,40511,161 231,45014,170 DueOther to long related-term parties liabilities (Notes (Notes19, 315,4 and 23, 329,5) 34, 35 and 36) 12,265– 11,1372,240 DeferredTotal tax liabilities Noncurrent (Note Liabilities26) 257,85511,161 290,61514,170 Other longTotal-term Liabilities liabilities (Notes 15, 23, 29, 34, 35 and 36) 3712,2653,449 365,73311,137 Total Noncurrent Liabilities 257,855 290,615 Equity (NoteTotal 20)Liabilities 373,449 365,733 Owners of the Parent Company: EquityCapital(Note stock 20) 31,661 31,661 OwnersAdditional of the Parent paid-in Company: capital 68,638 68,638 CapitalTreasury stock shares 31,66(3,4201) 31,661(4) AdditionalEquity reserves paid-in capital 68,638(943) 68,638(574) TreasuryRetained sharesearnings 91,898(3,420) 90,650(4) EquityOther comprehensive reserves income (loss) reserve (3,10(9433) (574)591 RetainedReserves earniunderngs PFRS 5* (Note 33) 91,898129 90,650– OtherTotal comprehensive equity attributable income to(loss owners) reserve of the Parent Company 184,860(3,103) 190,962591 NonReserves-controlling under interest PFRS 5* (Note 33) 59,481297 55,083– Total Equityequity attributable to owners of the Parent Company 184,860244,347 190,962246,045 Non-controlling interest 59,487 55,083 Total Equity P=617,796244,347 P=246,045611,778

*As a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 forP=617,796 details). P=611,778

See accompanying Notes to Consolidated Financial Statements. *As a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details).

See accompanying Notes to Consolidated Financial Statements.

*SGVFSM006036* *SGVFSM006036* 102 METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Metro(AmountsMETRO Pacific inPACIFIC Millions, ExceptInvestments INVESTMENTS Earnings Per ShareCORPORATIONCorporation Figures) and AND SubsidiariesSUBSIDIARIES ConsolidatedMETROCONSOLIDATED PACIFIC Statements STATEMENTSINVESTMENTS of OF CORPORATION Comprehensive COMPREHENSIVE AND IncomeSUBSIDIARIESINCOME CONSOLIDATED(Amounts in Millions, ExceptSTATEMENTS Earnings Per OF Share COMPREHENSIVE Figures) INCOME (Amounts in Millions, Except Earnings Per Share Figures) Years Ended December 31 2019 2018 2020 Years*Re -Endedpresented December*Re-presented 31 CONTINUING OPERATIONS Years Ended2019 December 31 2018 OPERATING REVENUES (Notes 1, 5 and 37) P=40,8552020 *Re-presentedP=49,2201976 *Re-presentedP=43,2572018 COSTCONTINUING OF SALES OPERATIONS AND SERVICES (Note 21) (17,269)2020 *Re-presented(19,086) *Re-presented(16,352) CONTINUINGGROSSOPERATING PROFIT REVENUES OPERATIONS(Notes 1, 5 and 37) P=40,85523,586 P=30,19049,276 P=26,90543,257 OPERATINGGeneralCOST OF and SALES administrative REVENUES AND SERVICES expenses(Notes 1,(Note (Note5 and 22) 21)37) P=40,855(17,269)(9,589) P=((19,086)49,210,18376) P=(16,352)43,257(8,581) COSTGROSSInterest OF expense PROFIT SALES (Note AND 24) SERVICES (Note 21) (17,269)(10,010)23,586 (19,086)30,190(9,779) (16,352)26,905(8,412) Share in net earnings of equity method investees (Note 10) 7,337 10,754 10,542 GROSSGeneral andPROFIT administrative expenses (Note 22) 23,586(9,589) (30,19010,183) 26,905(8,581) Interest income (Note 24) 1,229 1,793 1,059 GeneralInterest expenseand administrative (Note 24) expenses (Note 22) (10,010)(9,589) (10,183(9,779) (8,5818,412) Construction revenue (Note 3) 33,988 42,795 27,363 InterestShare in expense net earnings (Note of 24) equity method investees (Note 10) (10,010)7,337 10,754(9,779) 10,542(8,412) Construction costs (Note 3) (33,988) (42,795) (27,362) ShareInterest in income net earnings (Note of 24) equity method investees (Note 10) 7,3371,229 10,7541,793 10,5421,059 Provision for decline in value of assets (Note 24) (1,685) (22,020) (798) InterestConstruction income revenue (Note (Note24) 3) 33,9881,229 42,7951,793 27,3631,059 Others (Note 24) (323) (1,302) 1,531 Construction revenuecosts (Note (Note 3) 3) (33,988)33,988 (42,795)42,795 (27,362)27,363 ConstructionINCOMEProvision for (LOSS) costsdecline (Note BEFORE in value 3) ofINCOME assets (Note TAX 24) FROM (33,988)(1,685) (42,795)(22,020) (27,362)(798) ProvisionOthersCONTINUING (Note for 24)decline inOPERATIONS value of assets (Note 24) 10,545(1,685)(323) (22,020)(1,3(547)02) 22,2471,531(798) OthersPROVISIONINCOME (Note (LOSS) 24) FOR BEFORE INCOME INCOME TAX (Note TAX26) FROM 3,728(323) (1,33,58402) 1,5315,375 INCOMENETCONTINUING INCOME (LOSS) (LOSS) BEFORE OPERATIONS FROM INCOME CONTINUING TAX FROM 10,545 (547) 22,247 PROVISIONCONTINUINGOPERATIONS FOR INCOME OPERATIONS TAX (Note 26) 10,5453,7286,817 (4,131)3,584(547) 22,24716,8725,375 PROVISIONNETOPERATIONS INCOME FOR (LOSS)OF INCOMEENTITIES FROM TAX UNDERCONTINUING(Note PFRS26) 5 : 3,728 3,584 5,375 NETOPERATIONS ResultINCOME of operations (LOSS) FROM(Notes 32CONTINUING and 33) 3,4306,817 (4,131)6,041 16,8725,305 OPERATIONSOPERATIONSGain on deconsolidation OF ENTITIES(Note UNDER 32) PFRS 5 : 6,817– 25,908(4,131) 16,872– OPERATIONSResult of operations OF ENTITIES(Notes UNDER32 and 33) PFRS 5 : 3,430 31,9496,041 5,305 NET ResultGainINCOME on of deconsolidation operations (Notes(Note32 and32) 33) 10,2473,430– 27,81825,9086,041 22,1775,305– 3,430 31,949 5,305 OTHERGain COMPREHENSIVE on deconsolidation (Note INCOME 32) (LOSS) – 25,908 – NET– NETINCOME(Note 25): 10,2473,430 31,94927,818 22,1775,305 NETOTHERFrom INCOME Continuing COMPREHENSIVE Operations: INCOME (LOSS) 10,247 27,818 22,177 OTHERTo –be NET reclassified COMPREHENSIVE(Note 25): to profit or loss INCOME in subsequent (LOSS) periods (2,486) 756 (578) FromNot– to NET Continuingbe reclassified(Note 25): Operations: to profit or loss in subsequent periods (1,890) (1,902) 726 FromTo be reclassifiedContinuing to Operations: profit or loss in subsequent periods (2,486)(4,376) (1,756146) (578)148 ToFromNot be to reclassified Operationsbe reclassified to of profit Entitiesto profit or loss orUnder loss in subsequent inPFRS subsequent 5: periods periods (2,486)(1,890) (1,902756) (578)726 Not to be reclassified to profit or loss in subsequent periods (1,890)(4,376) ((1,1,902146) 726148 From(Notes Operations 32 and of33) Entities Under PFRS 5: (4,376)(38) (1,(146330) 148173 FromNot to Operationsbe reclassified of Entitiesto profit Underor loss inPFRS subsequent 5: periods (4,414) (1,476) 321 NotTOTAL to(Notes be COMPREHENSIVEreclassified 32 and 33) to profit or INCOME loss in subsequent periods P=5,833(38) P=26,342(330) P=22,498173 (Notes 32 and 33) (4,414)(38) (1(,330476)) 173321 NetTOTAL income COMPREHENSIVE attributable to: INCOME P=5,833(4,414) P=26,342(1,476) P=22,498321 TOTALOwners of COMPREHENSIVE the Parent Company INCOME P=5,833P=4,748 P=26,34223,856 P=22,49814,130 NetNon -incomecontrolling attributable interest to: 5,499 3,962 8,047 NetOwners income of the attributable Parent Company to: P=10,247P=4,748 P=23,85627,818 P=14,13022,177 OwnersNon-controlling of the Parent interest Company P=4,7485,499 P=23,8563,962 P=14,1308,047 NonTotal-controlling comprehensive interest income attributable to: P=10,2475,499 P=27,8183,962 P=22,1778,047 Owners of the Parent Company P=10,247P=1,170 P=27,81822,549 P=22,17714,307 TotalNon-controlling comprehensive interest income attributable to: 4,663 3,793 8,191 TotalOwners comprehensive of the Parent Company income attributable to: P=1,170P=5,833 P=22,54926,342 P=14,30722,498 OwnersNon-controlling of the Parent interest Company P=1,1704,663 P=22,5493,793 P=14,3078,191 Non-controlling interest P=5,8334,663 P=26,3423,793 P=22,4988,191 P=5,833 P=26,342 P=22,498 *SGVFSM006036* *SGVFSM006036* *SGVFSM006036* 103 - 2 -

- 2 - Years Ended December 31 2019 2018 2020 Years*Re -Endedpresented December*Re-presented 31 Total comprehensive income (loss) attributable to 2019 2018 Parent Company: 2020 *Re-presented *Re-presented TotalFrom continuingcomprehensive operations income (loss) attributable to (P=369) (P=5,894) P=11,804 FromParentoperations Company:of entities under PFRS 5 1,539 28,443 2,503 From continuing operations P=1,170(P=369) P=(P=22,5495,894) P=11,80414,307 From operations of entities under PFRS 5 1,539 28,443 2,503 BASIC EARNINGS (LOSS) PER COMMON P=1,170 P=22,549 P=14,307 SHARE (Note 27) BASICFrom continuing EARNINGS operations (LOSS) PER COMMON P=0.0750 (P=0.1519) P=0.3716 FromSHARE operations(Noteof entities27) under PFRS 5 0.0766 0.9080 0.0765 From continuing operations P=0.1516P=0.0750 (P=P=0.0.75611519) P=0.0.44813716 From operations of entities under PFRS 5 0.0766 0.9080 0.0765 DILUTED EARNINGS (LOSS) PER COMMON P=0.1516 P=0.7561 P=0.4481 SHARE (Note 27) DILUTEDFrom continuing EARNINGS operations (LOSS) PER COMMON P=0.0750 (P=0.1519) P=0.3712 FromSHARE operations(Noteof entities27) under PFRS 5 0.0766 0.9080 0.0764 From continuing operations P=P=0.07500.1516 (P=P=0.1519)0.7561 P=0.0.44763712 From operations of entities under PFRS 5 0.0766 0.9080 0.0764 *Comparative years re-presented as a result of a subsidiary qualifying as a group held forP= deemed0.1516 disposal underP= 0.7561PFRS 5 (see Note 33P= for0.4476 details).

See*Comparative accompanying years re-presented Notes to Consolidated as a result of aFinancial subsidiary Statements.qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details).

See accompanying Notes to Consolidated Financial Statements.

*SGVFSM006036* *SGVFSM006036* 104 105

MetroMETRO PACIFICPacific INVESTMENTSInvestments CORPORATION Corporation AND and SUBSIDIARIES Subsidiaries ConsolidatedCONSOLIDATEDMETRO PACIFIC STATEMENTSINVESTMENTSStatements OF CORPORATIONof CHANGES Changes IN EQUITY inAND Equity SUBSIDIARIES FORCONSOLIDATED THE YEARS ENDED STATEMENTS DECEMBER 31,OF 2020, CHANGES 2019 AND IN 2018 EQUITY (AmountsFOR THE in YEARS Millions) ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in Millions)

Year Ended December 31, 2020 Attributable to Owners Yearof the Ended Parent December Company 31, 2020 Attributable to Owners of the Parent CompanyOther Additional Comprehensive Non- Other Paid-in Treasury Retained Income (OCI) Reserves Under controlling Additional Comprehensive Non- Capital Stock Capital Shares Equity Earnings Reserve PFRS 5 (Note Interest Total Paid-in Treasury Retained Income (OCI) Reserves Under controlling (Note 20) (Note 20) (Note 20) Reserves (Note 20) (Note 20) 33) Total (NCI) Equity Capital Stock Capital Shares Equity Earnings Reserve PFRS 5 (Note Interest Total At January 1, 2020 (NoteP=31,661 20) (NoteP=68,638 20) (Note(P=4) 20) Reserves(P=574) (NoteP=90,650 20) (NoteP=591 20) P=33) – P=190,962Total P=55,083(NCI) P=246,045Equity Total comprehensive income for the year: At January 1, 2020 P=31,661 P=68,638 (P=4) (P=574) P=90,650 P=591 P= – P=190,962 P=55,083 P=246,045 Net income – – – – 4,748 – – 4,748 5,499 10,247 Total comprehensive income for the year: OCI (Notes 25 and 33) – – – – – (3,578) – (3,578) (836) (4,414) Net income – – – – 4,748 – – 4,748 5,499 10,247 Restricted Stock Unit Plan (RSUP) (Note 28) – – 4 64 – – – 68 – 68 OCI (Notes 25 and 33) – – – – – (3,578) – (3,578) (836) (4,414) Treasury shares – – (3,420) – – – – (3,420) – (3,420) Restricted Stock Unit Plan (RSUP) (Note 28) – – 4 64 – – – 68 – 68 Cash dividends declared (Note 20) – – – – (3,487) – – (3,487) – (3,487)) Treasury shares – – (3,420) – – – – (3,420) – (3,420) Partial disposal of interest in subsidiaries (Note 4) – – – 458 – – – 458 4,193 4,651 Cash dividends declared (Note 20) – – – – (3,487) – – (3,487) – (3,487)) Recognition of financial liability on NCI put option Partial disposal of interest in subsidiaries (Note 4) – – – 458 – – – 458 4,193 4,651 (Note 4) – – – (916) – – – (916) (2,651) (3,567) Recognition of financial liability on NCI put option Acquisition of and other movements in NCI (Note 4) – – – (916) – – – (916) (2,651) (3,567) (Notes 4 and 41) – – – 25 (13) 13 – 25 898 923 Acquisition of and other movements in NCI Dividends declared to non-controlling (Notes 4 and 41) – – – 25 (13) 13 – 25 898 923 stockholders (Note 6) – – – – – – – – (2,699) (2,699) Dividends declared to non-controlling Reserves under PFRS 5* (Note 33) – – – – – (129) 129 – – – stockholders (Note 6) – – – – – – – – (2,699) (2,699) AtReserves December under 31, PFRS 2020 5* (Note 33) P=31,661– P=68,638– (P=3,420)– (P=943)– P=91,898– (P=3,103)(129) P=129129 P=184,860– P=59,487– P=244,347– At December 31, 2020 P=31,661 P=68,638 (P=3,420) (P=943) P=91,898 (P=3,103) P=129 P=184,860 P=59,487 P=244,347 *As a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). *As a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details).

*SGVFSM006036* *SGVFSM006036* - 2 -

Year Ended December 31, 2019 Attributable to Owners of the Parent Company Additional Paid-in Treasury Retained Capital Stock Capital Shares Equity Earnings OCI Reserve Total (Note 20) (Note 20) (Note 20) Reserves (Note 20) (Note 20) Total NCI Equity At January 1, 2019 P=31,633 P=68,494 (P=178) P=6,968 P=64,533 P=1,861 P=173,311 P=65,692 P=239,003 Total comprehensive income for the year: Net income – – – – 23,856 – 23,856 3,962 27,818 OCI (Note 25) – – – – – (1,307) (1,307) (169) (1,476) Executive Stock Option Plan (ESOP) (Note 28): Exercise of ESOP 28 121 – (23) – – 126 – 126 Expiration of ESOP – 13 – (58) 45 – – – – Cost of ESOP – – – – – – – – – RSUP (Note 28) – 10 177 (196) 9 – – – – Treasury shares – – (3) – – – (3) – (3) Deconsolidation of subsidiary (5,723) 5,700 37 14 (9,121) (9,107) Cash dividends declared (Note 20) – – – – (3,493) – (3,493) – (3,493) Business combinations and other movements in NCI (Note 4) – – – – – – – 1,993 1,993 Acquisition of NCI (Notes 4 and 41) – – – (1,542) – – (1,542) (1,241) (2,783) Dividends declared to non-controlling stockholders (Note 6) – – – – – – – (6,033) (6,033) At December 31, 2019 P=31,661 P=68,638 (P=4) (P=574) P=90,650 P=591 P=190,962 P=55,083 P=246,045

*SGVFSM006036* 106 107

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Year Ended December 31, 2018 Attributable to Owners of the Parent Company Additional Paid-in Treasury Retained Capital Stock Capital Shares Equity Earnings OCI Reserve Total (Note 20) (Note 20) (Note 20) Reserves (Note 20) (Note 20) Total NCI Equity At January 1, 2018 P=31,626 P=68,465 (P=167) P=5,742 P=53,894 P=1,684 P=161,244 P=54,435 P=215,679 Total comprehensive income for the year: Net income – – – – 14,130 – 14,130 8,047 22,177 OCI (Note 25) – – – – – 177 177 144 321 ESOP (Note 28): Exercise of ESOP 7 29 – (4) – – 32 – 32 Cost of ESOP – – – 24 – – 24 – 24 RSUP (Note 28) – – – 67 – – 67 – 67 Treasury shares – – (11) – – – (11) – (11) Cash dividends declared (Note 20) – – – – (3,491) – (3,491) – (3,491) Business combinations and other movements in NCI (Note 4) – – – – – – – 8,382 8,382 Acquisition of NCI (Notes 4 and 41) – – – 1,139 – – 1,139 (774) 365 Dividends declared to non-controlling stockholders (Note 6) – – – – – – – (4,542) (4,542) At December 31, 2018 P=31,633 P=68,494 (P=178) P=6,968 P=64,533 P=1,861 P=173,311 P=65,692 P=239,003

See accompanying Notes to Consolidated Financial Statements.

*SGVFSM006036* METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES - 2 - CONSOLIDATED STATEMENTS OF CASH FLOWS - 2 - Metro(AmountsMETRO Pacific inPACIFIC Millions) InvestmentsINVESTMENTS CORPORATIONCorporation andAND SubsidiariesSUBSIDIARIES Years Ended December 31 ConsolidatedCONSOLIDATEDMETRO PACIFIC Statements STATEMENTSINVESTMENTS of OF CORPORATION Cash CASH Flows FLOWS AND SUBSIDIARIES CONSOLIDATED(Amounts in Millions) STATEMENTS OF CASH FLOWS 2020 2019 2018 Additions to/issuance of: Years Ended December 31 (Amounts in Millions) Service concession assets (Note 12) (P=34,078)2020 (P=45,602)2019 (P=27,710)2018 Years Ended December 31 AdditionsFinancial to/issuance assets (Note of: 35) (15,649) (3,549) (6,545) 2020 2019 2018 ServiceProperty, concession plant and equipmentassets (Note (Note 12) 13) (P=34,078)(2,842) (P=45,602)(5,645) (P=27,710)(6,524) Years Ended December 31 CASH FLOWS FROM OPERATING ACTIVITIES FInvestmentsinancial assets in equity (Note method35) investees (Note 10) (15,649)(60) (3,549)(796) (6,545)(4,603) 2020 2019 2018 Income (loss) before income tax from continuing operations P=10,545 Years Ended(P=5 47)December 31P=22,247 DecreaseProperty, (increase) plant andin: equipment (Note 13) (2,842) (5,645) (6,524) Short-term deposits (35) (896) 1,859 CASHIncome FLOWSbefore income FROM tax OPERATING from ACTIVITIES 2020 2019 2018 Investments in equity method investees (Note 10) (60) (796) (4,603) operations of entities under PFRS 5 (Notes 32 and 33) 4,418 39,976 6,938 DecreaseOther (increase) noncurrent in: assets (1,609) (2,552) (2,293) CASHIncome FLOWS(loss) before FROM income OPERATING tax from continuing ACTIVITIES operations P=10,545 (P=547) P=22,247 Income before income tax from 14,963 39,429 29,185 Net cashShort used-term in deposits investing activities (31,793)(35) (23,460)(896) (25,441)1,859 Income (loss) before income tax from continuing operations P=10,545 (P=547) P=22,247 Other noncurrent assets (1,609) (2,552) (2,293) IncomeAdjustmentsoperations before for: incomeof entities tax under from PFRS 5 (Notes 32 and 33) 4,418 39,976 6,938 NetCASH cash FLOWS used in investingFROM FINANCING activities ACTIVITIES (31,793) (23,460) (25,441) Income Provisionoperations before forincomeof entitiesdeclinetax inunder value PFRS of assets 5 (Notes 32 and 33) 14,9634,418 339,4299,976 29,1856,938 (Notes 3, 9, 10 and 11) 1,685 22,020 798 Receipt of or proceeds from: IncomeAdjustments before for:income tax 14,963 39,429 29,185 Interest expense (Note 24) 9,779 8,412 Short-term and long-term debt (Notes 18 and 35) 50,535 58,633 70,327 Adjustments Provision for: for decline in value of assets 10,010 CASH FLOWS FROM FINANCING ACTIVITIES Amortization of service concession assets (Note 21) 5,520 4,514 ReceiptSale ofto ornon proceeds-controlling from: interest (Note 4) 4,651 – – Provision(Notes for 3, decline9, 10 and in 11)value of assets 1,6855,261 22,020 798 Depreciation and amortization (Notes 1, 13, 21 and 22) 5,185 6,386 5,604 ContributionShort-term and from long non-controlling-term debt (Notes stockholders 18 and 35) 50,535 58,633 70,327 Interest(Notes expense 3, 9, (Note10 and 24) 11) 10,0101,685 229,779,020 8,412798 Long term incentive plan expense (Note 23) 539 837 623 Saleand to nonother-controlling movements interest (Notes(Note 4, 6 and4) 30) 4,651831 2,027– 1,354– InterestAmortization expense of service(Note 24) concession assets (Note 21) 10,0105,261 9,7795,520 8,4124,514 Unrealized foreign exchange loss (gain) - net (239) (215) 837 ContributionIssuance of shares from (Notesnon-controlling 20 and 28) stockholders – 126 32 AmortizationDepreciation andof service amortization concession (Notes assets 1, 13, (Note 21 and 21) 22) 5,2615,185 5,6,386520 4,5145,604 Share in net earnings of equity method investees Paymentsand of/for: other movements (Notes 4, 6 and 30) 831 2,027 1,354 DepreciationLong term incentive and amortizationplan expense (Notes (Note 1, 23)13, 21 and 22) 5,185539 6,386837 5,604623 (Notes 10, 32 and 33) (7,337) (11,402) (11,073) IssuanceShort-term of andshares long (Notes-term 20debt and (Notes 28) 18 and 37) (39,725)– (22,307)126 (46,751)32 LongUnrealizedterm iforeignncentive exchangeplan expense loss (gain)(Note -23)net (239)539 (215)837 623837 Dividend income (Note 10) (55) (66) (172) PaymentsInterest of/for: and other financing charges (8,745) (9,502) (9,534) ShareUnrealized in net foreign earnings exchange of equity loss method (gain) investees- net (239) (215) 837 Gain on sale of investments (Note 10) – (32,028) – ShortService-term concession and long fees-term payable debt (Notes (Notes 18 17 and and 3 73)7) (39,725)(5,801) (22,307)(1,673) (46,751)(1,007) Share(Note in nets 10 earnings, 32 and of 33 equity) method investees (7,337) (11,402) (11,073) Interest income (Note 24) (1,229) (1,793) (1,059) InterestDue to related and other parties financing (Note charges37) (8,745)(5,646) (9,502)(4,451) (9,534)(4,458) Dividend(Note incomes 10, 32 (Noteand 33 10)) (7,337)(55) (11,402)(66) (11,073)(172) Gain on remeasurement of previously held ServiceDividends concession paid to non fees-controlling payable (Notes stockholders 17 and 3(Note7) 6) (5,801)(3,175) (1,673)(5,647) (1,007)(5,399) DividendGain on sale income of investments (Note 10) (Note 10) (55)– (32,028)(66) (172)– interest (Notes 4 and 24) – – (721) DividendsDue to related paid parties to owners (Note of 3the7) Parent Company (5,646) (4,451) (4,458) GainInterest on incomesale of investments(Note 24) (Note 10) (1,229)– (32,028)(1,793) (1,05–9) Others (6) 21 (591) Dividends(Note 20) paid to non-controlling stockholders (Note 6) (3,175)(3,487) (5,647)(3,493) (5,399)(3,491) GainInterest on incomeremeasurement (Note 24) of previously held (1,229) (1,793) (1,059) DividendsTreasury shares paid to(Note owners20) of the Parent Company (3,420) (3) (11) Operating Gaininterest on income remeasurement (Notes before 4 workingand of 24) previously capital changes held 28,777– 38,488– 36,357(721) Lease(Noteliability20) (3,487)(496) (3,493)(597) (3,491)– DecreaseOthersinterest (increase) (Notes in: 4 and 24) (6)– 21– (721)(591) TreasuryDebt issuance shares cost (Note (Note20) 18) (3,420)(392) (592)(3) (789)(11) OperatingOthersRestricted income cash before working capital changes 28,7771,108(6) 38,48841021 36,357(1,124)(591) Receivables (2,345) (761) (787) LeaseAcquisitionliability of non-controlling interests (Note 4) (496)(81) (3,477)(597) (1,056)– OperatingDecrease (increase) income before in: working capital changes 28,777 38,488 36,357 Other current assets (476) (1,951) NetDebt cash issuancefrom (used cost in) (Note financing 18) activities (14,951)(392) 9,044(592) (789)(783) DecreaseRestricted (increase) cash in: (2,354)1,108 410 (1,124) Increase in accounts payable, provisions and other current Acquisition of non-controlling interests (Note 4) (81) (3,477) (1,056) RestrictedReceivables cash (2,345)1,108 (761)410 (1,124)(787) liabilities 1,201 8,172 4,570 NetNET cash INCREASE from (used (DECREASE) in) financing activities IN CASH AND (14,951) 9,044 (783) ReceivablesOther current assets (2,345)(2,354) (761)(476) (1,951)(787) CASH EQUIVALENTS (25,017) 26,604 5,772 IncreaseNet cashOther ingenerated current accounts assets from payable, operations provisions and other current 26,387(2,354) 45,833(476) 37,065(1,951) IncreaseIncomeliabilities taxes in accounts paid payable, provisions and other current (5,906)1,201 (7,062)8,172 (6,531)4,570 NET INCREASE (DECREASE) IN CASH AND CASH AND CASH EQUIVALENTS NetInterest cashliabilities received generated from operations 26,3871,2461,201 45,8332,2498,172 37,0651,4624,570 CASH EQUIVALENTS (25,017) 26,604 5,772 AT BEGINNING OF YEAR (Note 7) 73,211 46,607 40,835 NetIncome cash taxes fromgenerated paid operating from activitiesoperations 26,38721,727(5,906) 45,83341,020(7,062) 37,06531,996(6,531) Interest received 1,246 2,249 1,462 CASH AND CASH EQUIVALENTS CASHIncome FLOWStaxes paid FROM INVESTING ACTIVITIES (5,906) (7,062) (6,531) InterestNet cash received from operating activities 21,7271,246 41,0202,249 31,9961,462 CASHAT ANDBEGINNING CASH EQUIVALENTS OF YEAR (Note 7) 73,211 46,607 40,835 Dividends received from: AT END OF YEAR (Note 7) P=48,194 P=73,211 P=46,607 Net cashEquity from method operating investees activities (Note 10) 21,7278,545 41,0209,027 31,9968,589 CASH FLOWS FROM INVESTING ACTIVITIES CASH AND CASH EQUIVALENTS Financial assets (Notes 34 and 35) 55 66 172 CASHDividends FLOWS received FROM from: INVESTING ACTIVITIES AT END OF YEAR (Note 7) P=48,194 P=73,211 P=46,607 Collection of or proceeds from sale/disposal of: See accompanying Notes to Consolidated Financial Statements. DividendsEquity received method investeesfrom: (Note 10) 8,545 9,027 8,589 Financial assets (Notes 34 and 35) 9,338 4,274 12,366 EquityFinancial method assets investees (Notes 3 4(Noteand 310)5) 8,54555 9,02766 8,589172 Investment in a subsidiary (net of transaction costs, See accompanying Notes to Consolidated Financial Statements. CollectionFinancial of or assetsproceeds (Notes from 34 andsale/disposal 35) of: 55 66 172 Note 32) 21,881 – CollectionFinancial of or assetsproceeds (Notes from 34 andsale/disposal 35) of: 9,3384,006 4,274 12,366 Property, plant and equipment (Note 13) 600 346 55 FinancialInvestment assets in a subsidiary(Notes 34 and(net 35)of transaction costs, 9,338 4,274 12,366 Acquisition of subsidiaries, net of cash acquired (Note 4) (14) (807) InvestmentNote 32) in a subsidiary (net of transaction costs, 4,006(64) 21,881 – Property,Note plant32) and equipment (Note 13) 4,006600 21,881346 55– Acquisition(Forward)Property, of plantsubsidiaries, and equipment net of cash (Note acquired 13) (Note 4) 600(64) 346(14) (807)55 Acquisition of subsidiaries, net of cash acquired (Note 4) (64) (14) (807) (Forward) (Forward)

*SGVFSM006036* *SGVFSM006036* *SGVFSM006036* *SGVFSM006036* 108 *SGVFSM006036* - 2 -

- 2 - Years Ended December 31 2020 2019 2018 Additions to/issuance of: Years Ended December 31 Service concession assets (Note 12) (P=34,078)2020 (P=45,602)2019 (P=27,710)2018 AdditionsFinancial to/issuance assets (Note of: 35) (15,649) (3,549) (6,545) ServiceProperty, concession plant and equipmentassets (Note (Note 12) 13) (P=34,078)(2,842) (P=45,602)(5,645) (P=27,710)(6,524) FInvestmentsinancial assets in equity (Note method35) investees (Note 10) (15,649)(60) (3,549)(796) (6,545)(4,603) DecreaseProperty, (increase) plant andin: equipment (Note 13) (2,842) (5,645) (6,524) InvestmentsShort-term deposits in equity method investees (Note 10) (60)(35) (796)(896) (4,603)1,859 DecreaseOther (increase) noncurrent in: assets (1,609) (2,552) (2,293) Net cashShort used-term in deposits investing activities (31,793)(35) (23,460)(896) (25,441)1,859 Other noncurrent assets (1,609) (2,552) (2,293) NetCASH cash FLOWS used in investingFROM FINANCING activities ACTIVITIES (31,793) (23,460) (25,441) Receipt of or proceeds from: CASHSho rFLOWSt-term and FROM long-term FINANCING debt (Notes ACTIVITIES 18 and 35) 50,535 58,633 70,327 ReceiptSale ofto ornon proceeds-controlling from: interest (Note 4) 4,651 – – ContributionShort-term and from long non-controlling-term debt (Notes stockholders 18 and 35) 50,535 58,633 70,327 Saleand to nonother-controlling movements interest (Notes(Note 4, 6 and4) 30) 4,651831 2,027– 1,354– ContributionIssuance of shares from (Notesnon-controlling 20 and 28) stockholders – 126 32 Paymentsand of/for: other movements (Notes 4, 6 and 30) 831 2,027 1,354 IssuanceShort-term of andshares long (Notes-term 20debt and (Notes 28) 18 and 37) (39,725)– (22,307)126 (46,751)32 PaymentsInterest of/for: and other financing charges (8,745) (9,502) (9,534) ShortService-term concession and long fees-term payable debt (Notes (Notes 18 17 and and 3 73)7) (39,725)(5,801) (22,307)(1,673) (46,751)(1,007) InterestDue to related and other parties financing (Note charges37) (8,745)(5,646) (9,502)(4,451) (9,534)(4,458) ServiceDividends concession paid to non fees-controlling payable (Notes stockholders 17 and 3(Note7) 6) (5,801)(3,175) (1,673)(5,647) (1,007)(5,399) DividendsDue to related paid parties to owners (Note of 3the7) Parent Company (5,646) (4,451) (4,458) Dividends(Note 20) paid to non-controlling stockholders (Note 6) (3,175)(3,487) (5,647)(3,493) (5,399)(3,491) DividendsTreasury shares paid to(Note owners20) of the Parent Company (3,420) (3) (11) Lease(Noteliability20) (3,487)(496) (3,493)(597) (3,491)– TreasuryDebt issuance shares cost (Note (Note20) 18) (3,420)(392) (592)(3) (789)(11) LeaseAcquisitionliability of non-controlling interests (Note 4) (496)(81) (3,477)(597) (1,056)– NetDebt cash issuancefrom (used cost in) (Note financing 18) activities (14,951)(392) 9,044(592) (789)(783) Acquisition of non-controlling interests (Note 4) (81) (3,477) (1,056) NetNET cash INCREASE from (used (DECREASE) in) financing activities IN CASH AND (14,951) 9,044 (783) CASH EQUIVALENTS (25,017) 26,604 5,772 NET INCREASE (DECREASE) IN CASH AND CASHCASH AND EQUIVALENTS CASH EQUIVALENTS (25,017) 26,604 5,772 AT BEGINNING OF YEAR (Note 7) 73,211 46,607 40,835 CASH AND CASH EQUIVALENTS CASHAT ANDBEGINNING CASH EQUIVALENTS OF YEAR (Note 7) 73,211 46,607 40,835 AT END OF YEAR (Note 7) P=48,194 P=73,211 P=46,607 CASH AND CASH EQUIVALENTS See ATaccompanying END OF NotesYEAR to Consolidated(Note 7) Financial Statements. P=48,194 P=73,211 P=46,607

See accompanying Notes to Consolidated Financial Statements.

*SGVFSM006036* *SGVFSM006036* 109 METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MetroMETRO Pacific PACIFIC InvestmentsINVESTMENTS CORPORATIONCorporation andAND SubsidiariesSUBSIDIARIES NotesNOTES ToTO ConsolidatedCONSOLIDATED Financial FINANCIAL Statements STATEMENTS 1. Corporate Information

1. CorporateGeneral Information Metro Pacific Investments Corporation (the Parent Company or MPIC) was incorporated in the PhilippinesGeneral and registered with the Philippines Securities and Exchange Commission (SEC) on MarchMetro Pacific20, 2006 Investments as an investment Corporation holding (the company. Parent Company MPIC’s orcommon MPIC) shares was incorporated of stock are inlisted the in andPhilippines traded through and registered the Philippine with the Stock Philippines Exchange Securities (PSE). and On ExchangeAugust 6, Commission2012, MPIC (SEC)launched on SponsoredMarch 20, 2006Level as 1 anAmerican investment Depositary holding Receipt company. (ADR) MPIC’s Program common with sharesDeutsche of stock Bank are as thelisted in appointedand traded depositarythrough the bank Philippine in line withStock the Exchange Parent Company’s (PSE). On thrustAugust to 6,widen 2012, the MPIC availability launched of its sharesSponsored to investors Level 1 inAmerican the United Depositary States. Receipt (ADR) Program with Deutsche Bank as the appointed depositary bank in line with the Parent Company’s thrust to widen the availability of its Theshares principal to investors activities in the of United the Parent States. Company’s subsidiaries and equity method investees are described below (see Company’s Operating Segments) and in Notes 10 and 41. The Parent Company andThe itsprincipal subsidiaries activities are collectivelyof the Parent referred Company’s to as subsidiaries“the Company”. and equity method investees are described below (see Company’s Operating Segments) and in Notes 10 and 41. The Parent Company Metroand its Pacificsubsidiaries Holdings, are collectively Inc. (MPHI) referred owns 43.1%to as “the and Company”. 41.9% of the total issued and outstanding common shares of MPIC as at December 31, 2020 and 2019, respectively. As sole holder of the votingMetro PacificClass A Holdings, Preferred Inc.Shares, (MPHI) MPHI’s owns combined 43.1% and voting 41.9% interest of the as total a result issued of andall ofoutstanding its shareholdingscommon shares is ofestimated MPIC as at at 56.2% December and 55.0% 31, 2020 as atand December 2019, respectively. 31, 2020 and As 2019, sole holder of the respectivelyvoting Class (seeA Preferred Note 20). Shares, MPHI’s combined voting interest as a result of all of its shareholdings is estimated at 56.2% and 55.0% as at December 31, 2020 and 2019, MPHIrespectively is a Philippine (see Note corporation 20). 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%MPHI isinterest). a Philippine First corporationPacific Company whose Limited stockholders (FPC), are a Enterprisecompany incorporated Investment Holdings,in Bermuda Inc. and listed(EIH; in60.0% Hong interest), Kong, through Intalink its B.V. subsidiaries, (26.7% interest) Intalink and B.V. First and Pacific FPIL, Internationalholds 40.0% equityLimited interest (FPIL; in EIH13.3% and interest). investment First financing Pacific Company which under Limited Hong (FPC), Kong Generallya company Accepted incorporated Accounting in Bermuda Principles, and requirelisted in FPC Hong to Kong,account through for the its results subsidiaries, and assets Intalink and liabilities B.V. and of FPIL, EIH holdsand its 40.0% subsidiaries equity asinterest part of in FPCEIH andgroup investment of companies financing in Hong which Kong. 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 TheFPC registeredgroup of companies office address in Hong of the Kong. Parent Company is 10th Floor, MGO Building, Legaspi corner Dela Rosa Streets, Legaspi Village, Makati City. The registered office address of the Parent Company is 10th Floor, MGO Building, Legaspi corner TheDela accompanying Rosa Streets, Legaspi consolidated Village, financial Makati statements City. as at December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020 were approved and authorized for issuance byThe the accompanying Board of Directors consolidated (BOD) financial on March statements 19, 2021. as at December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020 were approved and authorized for issuance Company’sby the Board Operating of Directors Segments (BOD) on March 19, 2021. For management purposes, the Company is organized into the following segments based on services andCompany’s products: Operating Segments For management purposes, the Company is organized into the following segments based on services ƒand Powerproducts:, which primarily relates to the operations of Manila Electric Company (MERALCO) in relation to the distribution, supply and generation of electricity and Global Business Power ƒ CorporationPower, which (GBPC) primarily in relationrelates to to the power operations generation. of Manila The investment Electric Company in MERALCO (MERALCO) is held bothin directlyrelation andto the indirectly distribution, through supply Beacon and generationElectric Asset of electricity Holdings, and Inc. Global (Beacon Business Electric) Power (seeCorporation Note 10) (GBPC) while the in investmentrelation to powerin GBPC generation. is held through The investment Beacon Electric’s in MERALCO wholly-owned is held both entity,directly Beacon and indirectly PowerGen through Holdings Beacon Inc. Electric (BPHI). Asset Holdings, Inc. (Beacon Electric) (see Note 10) while the investment in GBPC is held through Beacon Electric’s wholly-owned entity, Beacon PowerGen Holdings Inc. (BPHI).

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On December 23, 2020, BPHI entered into a share purchase agreement with Meralco PowerGen OnCorporation December (“MGen”), 23, 2020, aBPHI wholly-owned entered into subsidiary a share purchase of MERALCO, agreement for withthe sale Meralco by BPHI PowerGen of 56% Corporationof the issued (“MGen”),and outstanding a wholly-owned shares of GBPC. subsidiary The oftransaction MERALCO, is subject for the to sale customary by BPHI closing of 56% ofconditions, the issued including and outstanding regulatory shares and ofthird-party GBPC. Theapprovals transaction and is is expected subject to to customary close within closing the first conditions,quarter of 2021, including barring regulatory any unforeseen and third-party circumstances. approvals Upon and completionis expected ofto closethe transaction, within the first quarterMERALCO of 2021, shall barring have control any unforeseen over GBPC. circumstances. Accordingly, Upon GBPC completion qualified of as the a group transaction, held for MERALCOdeemed disposal shall as have of December control over 31, GBPC. 2020 with Accordingly, GBPC’s assets GBPC and qualified liabilities as previouslya group held for deemedconsolidated disposal in the as Company’sof December statement 31, 2020 of with financial GBPC’s position assets reclassified and liabilities to “Assetspreviously under consolidatedPFRS 5” and in“Liabilities the Company’s under statementPFRS 5”, ofrespectively. financial position reclassified to “Assets under PFRS 5” and “Liabilities under PFRS 5”, respectively. MPIC continues to take up the full profit and loss of GBPC until December 31, 2020 because MPICcontrol continues is not yet totransferred take up the as fullof year-end. profit and GBPC’s loss of GBPC results until of operations December are 31, presented 2020 because under control“Operations is not of yet entities transferred under as PFRS of year-end. 5” in the GBPC’sCompany’s results consolidated of operations statements are presented of under “Operationscomprehensive of entitiesincome underfor the PFRS years 5” ended in the December Company’s 31, consolidated 2020, 2019 and statements 2018 (see of Note 33). comprehensive income for the years ended December 31, 2020, 2019 and 2018 (see Note 33). ƒ Toll operations, which primarily relate to operations and maintenance of toll facilities by Metro ƒ TollPacific operations Tollways, which Corporation primarily (MPTC) relate andto operations its subsidiaries and maintenance NLEX Corporation of toll facilities (NLEX by Corp), Metro PacificCavitex Tollways Infrastructure Corporation Corporation (MPTC) (CIC), and and its subsidiariesforeign investees, NLEX CII Corporation Bridges and (NLEX Roads Corp), CavitexInvestment Infrastructure Joint Stock Corporation Company (CII (CIC), B&R), and Donforeign Muang investees, Tollway CII Public Bridges Ltd and (DMT) Roads and PT InvestmentNusantara Infrastructure Joint Stock Company Tbk (PT (CIINusantara) B&R), (seeDon Notes Muang 4 andTollway 10). PublicCertain Ltd toll (DMT) projects and are PT either Nusantaraunder pre-construction Infrastructure or Tbk on-going (PT Nusantara) construction (see as Notes at December 4 and 10). 31, Certain2020 (see toll Note projects 29 for are the either underConcession pre-construction Arrangements or on-going). construction as at December 31, 2020 (see Note 29 for the Concession Arrangements). ƒ Water, which relates to the provision of water and sewerage services by Maynilad Water Holding ƒ WaterCompany,, which Inc. relates (MWHC) to the and provision its subsidiaries, of water Mayniladand sewerage Water services Services, by MayniladInc. (Maynilad) Water andHolding Company,Philippine Hydro,Inc. (MWHC) Inc. (PHI), and andits subsidiaries, other water-related Maynilad services Water byServices, MetroPac Inc. Water (Maynilad) Investments and PhilippineCorporation Hydro, (MPW) Inc. and (PHI), its foreign and other investees, water-related B.O.O. servicesPhu Ninh by Water MetroPac Treatment Water PlantInvestments Joint CorporationStock Company (MPW) (PNW) and (see its foreign Note 4) investees, and Tuan B.O.O. Loc Water Phu ResourcesNinh Water Investment Treatment Joint Plant Stock Joint StockCompany Company (TLW) (PNW) (see Note (see 29 Note for 4)the andConcession Tuan Loc Arrangements Water Resources). Investment Joint Stock Company (TLW) (see Note 29 for the Concession Arrangements). ƒ Rail, which primarily relates to Metro Pacific Light Rail Corporation (MPLRC) and its ƒ Railsubsidiary,, which Light primarily Rail relatesManila to Corporation Metro Pacific (LRMC), Light Railthe concessionaireCorporation (MPLRC) for the operations and its and subsidiary,maintenance Light of the Rail Light Manila Rail CorporationTransit – Line (LRMC), 1 (LRT-1) the andconcessionaire construction for of the the operations LRT-1 south and maintenanceextension (see of Note the Light 29 for Rail the TransitConcession – Line Arrangements 1 (LRT-1) and). construction of the LRT-1 south extension (see Note 29 for the Concession Arrangements). ƒ Logistics, which primarily relates to the Company’s logistics business through MetroPac ƒ Logistics, Company,which primarily Inc. (MPLC) relates toand the its Company’s subsidiaries. logistics However, business given through that the MetroPac logistics business Logisticsdoes not yet Company, meet the Inc. quantitative (MPLC) thresholdsand its subsidiaries. to qualify However,as an operating given segment,that the logistics the results business of the doeslogistics not operationsyet meet the are quantitative included in thresholds the ‘other tobusinesses’ qualify as column.an operating segment, the results of the logistics operations are included in the ‘other businesses’ column. ƒ Others, which represent holding companies and operations of subsidiaries and other investees ƒ Othersinvolved, which in real represent estate, provision holding companiesof services andand operationswaste-to-energy of subsidiaries projects. and other investees involved in real estate, provision of services and waste-to-energy projects. After its deconsolidation starting December 2019, the Healthcare segment no longer qualified as Afteran operating its deconsolidation segment starting starting January December 2020 (see2019, Note the Healthcare32). After deconsolidation,segment no longer Metro qualified Pacific as anHospital operating Holdings, segment Inc. starting (MPHHI) January has been2020 accounted(see Note 32).for as After an investment deconsolidation, in an associate Metro Pacific Hospital(see Note Holdings, 10) and equity Inc. (MPHHI) in net earnings has been in MPHHIaccounted is includedfor as an ininvestment the ‘other in businesses’ an associate column. (see Note 10) and equity in net earnings in MPHHI is included in the ‘other businesses’ column. See Note 41 for the complete list of the Company’s subsidiaries. The list of the Company’s Seeassociates Note 41 and for joint the completeventures are list disclosed of the Company’s in Note 10. subsidiaries. The list of the Company’s associates and joint ventures are disclosed in Note 10.

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2. Basis of Preparation, Consolidation and Statement of Compliance 2. Basis of Preparation, Consolidation and Statement of Compliance Basis of Preparation TheBasis consolidated of Preparation financial statements are prepared in compliance with Philippine Financial Reporting StandardsThe consolidated (PFRS). financial The Company’s statements significant are prepared accounting in compliance policies with are Philippinedisclosed in Financial Note 39. Reporting Standards (PFRS). The Company’s significant accounting policies are disclosed in Note 39. The consolidated financial statements are prepared on a historical cost basis, except for certain debt andThe equityconsolidated financial financial assets andstatements financial are liabilities prepared that on aare historical measured cost at basis,fair value. except The for consolidated certain debt financialand equity statements financial assetsare presented and financial in Philippine liabilities Peso, that which are measured is MPIC’s at fairfunctional value. andThe presentationconsolidated currency,financial statementsand all values are presentedare rounded in toPhilippine the nearest Peso, million which peso is MPIC’s (P=000,000), functional except and when presentation otherwise indicated.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 in respect to the previous periods.The consolidated financial statements provide comparative information in respect to the previous periods. Basis of Consolidation TheBasis consolidated of Consolidation financial statements of the Company include the accounts of the Parent Company andThe itsconsolidated subsidiaries. financial statements of the Company include the accounts of the Parent Company and its subsidiaries. Subsidiaries are all entities (including structured entities) over which the Company has control. The CompanySubsidiaries controls are all anentities entity (including when the Companystructured isentities) exposed over to, orwhich has rightsthe Company to, variable has control.returns from The itsCompany involvement controls with an the entity entity when and the has Company the ability is to exposed affect thoseto, or returnshas rights through to, variable its power returns to direct from theits involvement activities of thewith entity. the entity Subsidiaries and has the are ability fully consolidated to affect those from returns the date through on which its power control to direct is transferredthe activities to of the the Company. entity. Subsidiaries These are deconsolidatedare fully consolidated from the from date the that date control on which ceases. control is transferred to the Company. These are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Company. The acquisition method of accounting is used to account for business combinations by the Company. Intercompany transactions, balances and unrealized gains on transactions between companies are eliminated.Intercompany Unrealized transactions, losses balances are also and eliminated unrealized unless gains the on transactiontransactions provides between evidence companies of anare impairmenteliminated. ofUnrealized the transferred losses asset. are also Accounting eliminated policies unless theof subsidiariestransaction provideshave been evidence changed of where an necessaryimpairment to of ensure the transferred consistency asset. with Accounting the policies policiesadopted ofby subsidiaries the Company. have been changed where necessary to ensure consistency with the policies adopted by the Company. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidatedNon-controlling statement interests of incomprehensive the results and income, equity ofconsolidated subsidiaries statement are shown of separatelychanges in in equity the and consolidated statement of financialcomprehensive position, income, respectively. consolidated statement of changes in equity and consolidated statement of financial position, respectively. A complete list of the Company’s subsidiaries is provided for in Note 41. A complete list of the Company’s subsidiaries is provided for in Note 41.

3. Management’s Use of Judgments and Estimates 3. Management’s Use of Judgments and Estimates The preparation of the consolidated financial statements in compliance with PFRS requires managementThe preparation to makeof the judgments consolidated and financial estimates statements that affect in the compliance reported amounts with PFRS of revenues,requires expenses, assetsmanagement and liabilities, to make the judgments disclosure and of estimates contingent that liabilities affect the and reported other significant amounts of disclosures. revenues, expenses, Uncertaintyassets and liabilities, about these the assumptionsdisclosure of and contingent estimates liabilities could result and otherin outcomes significant that disclosures.require a material adjustmentUncertainty to about the carrying these assumptions amount of andassets estimates or liabilities could affected result in in outcomes future periods. that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Judgments InJudgments the process of applying the Company’s accounting policies, management has made the following judgments,In the process apart of applyingfrom those the involving Company’s estimations, accounting which policies, have managementthe most significant has made effect the onfollowing the amounts recognizedjudgments, inapart the fromconsolidated those involving financial estimations, statements. which have the most significant effect on the amounts recognized in the consolidated financial statements.

*SGVFSM006036* *SGVFSM006036*

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Service Concession Arrangements under the Intangible Asset Model. In applying Philippine InterpretationService Concession IFRIC Arrangements 12, Service Concession under the IntangibleArrangements Asset, the Model. CompanyIn applying has made Philippine a judgment that certainInterpretation service IFRIC concession 12, Service arrangements Concession of the Arrangements Company’s ,water, the Company tollway andhas maderail businesses a judgment (see that Notecertain 29) service qualify concession under the arrangementsintangible asset of modelthe Company’s as these companies water, tollway receive and the rail right businesses to charge (see users ofNote public 29) qualifyservice. under Details the of intangible the Company’s asset model accounting as these policy companies in respect receive of the the service right to concession charge users arrangementsof public service. are set Details out in of Note the Company’s39 to the consolidated accounting financial policy in statements. respect of the Other service significant concession judgmentsarrangements and are estimates set out inmade Note in 39 relation to the toconsolidated concession financialarrangements statements. are as follows: Other significant judgments and estimates made in relation to concession arrangements are as follows: ƒ Amortization of Service Concession Assets. The methods of amortization that the Company uses ƒ dependsAmortization on which of Service method Concession best reflects Assets. the patternThe methods of consumption of amortization of the concession that the Company assets. uses depends on which method best reflects the pattern of consumption of the concession assets. The straight-line method is currently being used to amortize the water concession assets in relationThe straight-line with the provisionmethod is ofcurrently bulk water being services used to [PHI, amortize Metro the Iloilo water Bulk concession Water Supply assets in Corporationrelation with (MIBWS),the provision Metro of bulk Pacific water Iloilo services Water, [PHI, Inc. Metro(MPIWI) Iloilo and Bulk PNW] Water and Supply PT Nusantara’s waterCorporation treatment (MIBWS), plant. The Metro estimated Pacific useful Iloilo Water,lives used Inc. by (MPIWI) the Company and PNW] to amortize and PT the Nusantara’s service concessionwater treatment assets plant. are based The estimatedon the terms useful of the lives service used concessionby the Company contracts. to amortize the service concession assets are based on the terms of the service concession contracts. The Units of Production (UOP) method is being used for the toll (NLEX Corp, CIC and PT Nusantara)The Units of and Production water concession (UOP) method assets (Maynilad).is being used The for theCompany toll (NLEX annually Corp, reviews CIC and the PT estimatedNusantara) billable and water water concession volume in assets the case (Maynilad). of the water The concession Company withannually reference reviews to waterthe volumeestimated forecasts, billable andwater the volume total expected in the case traffic of the volume/kilometers water concession travelled with reference in the caseto water of the toll concessionvolume forecasts, with reference and the totalto traffic expected projection traffic reports, volume/kilometers based on factors travelled that includein the case market of the toll conditionsconcession suchwith asreference population to traffic growth, projection supply and reports, consumption based on offactors water/usage that include of the market toll facility, andconditions service such coverage as population including growth, ongoing supply and future and consumption expansions. ofThe water/usage Company ofmakes the toll appropriate facility, adjustmentsand service coverage to the assumptions including ongoingof the water/traffic and future volumeexpansions. with referenceThe Company to the makes latest appropriatestudies, if any.adjustments It is possible to the thatassumptions future results of the of water/traffic operations couldvolume be withmaterially reference affected to the by latest changes studies, in the if Company’sany. It is possible estimates that brought future results about byof operationschanges in couldthe aforementioned be materially affectedfactors. byFurthermore, changes in the CompanyCompany’s also estimates considered brought the changeabout by in changes the forecasted in the aforementionedtraffic reports and factors. billed Furthermore,volume mix in the the immediateCompany also succeeding considered years the due change to the in on-going the forecasted COVID-19 traffic pandemic. reports and billed volume mix in the immediate succeeding years due to the on-going COVID-19 pandemic. The Company has not started amortization of service concession assets under on-going rehabilitationThe Company or has construction. not started amortization The amortization of service period concession for the service assets concession under on-going assets will beginrehabilitation upon identification or construction. that the The assets amortization are ready period for their for intendedthe service use. concession For the LRT-1 assets Existingwill System,begin upon amortization identification may that be triggeredthe assets upon are ready receipt for of their Safety intended Assessor’s use. Forcertification the LRT-1 that Existing the speedSystem, can amortization be raised to may 60 kilometers be triggered per upon hour. receipt For the of service Safety concessionAssessor’s certificationasset related thatto the the constructionspeed can be ofraised the LRT-1to 60 kilometers Cavite Extension,certain per hour. For the toll service roads concession[the Connector asset Road, related Cavite to the Lagunaconstruction Expressway of the LRT-1 (CALAX), Cavite Cebu Extension,certain Cordova Link toll Expressway roads [the (CCLEX) Connector and Road, C5 SouthCavite Link Project];Laguna Expressway and water concession (CALAX), of Cebu Metro Cordova Pacific Link Dumaguete Expressway Water (CCLEX) Services andInc. C5(MPWD) South Linkthe amortizationProject]; and willwater start concession upon full of completion Metro Pacific of the Dumaguete construction Water regardless Services of Inc. partial (MPWD) opening the of certainamortization segments will asstart these upon were full considered completion as of a thesingle construction intangible regardless asset. of partial opening of certain segments as these were considered as a single intangible asset. The total carrying values of service concession assets amounted to =275,864P million and TheP=240,489 total carryingmillion asvalues at December of service 31, concession 2020 and assets2019, respectivelyamounted to (see=275,864P Note 12).million and P=240,489 million as at December 31, 2020 and 2019, respectively (see Note 12). ƒ Service Concession Asset as Qualifying Asset and Capitalization of Borrowing Costs. The ƒ CompanyService Concession has made Asseta judgment as Qualifying to apply Asset Philippine and Capitalization Accounting Standards of Borrowing (PAS) Costs. 23, BorrowingThe CostsCompany, in classifying has made athe judgment service toconcession apply Philippine assets’ componentsAccounting undergoingStandards (PAS) rehabilitation 23, Borrowing (in the caseCosts of, in the classifying existing LRT-1) the service and concessionpre/on-going assets’ construction components (in the undergoing case of the rehabilitation construction (inof thethe LRT-1case of extension,the existing the LRT-1) Connector and pre/on-goingRoad, CALAX, construction CCLEX and (in theC5 Southcase of Link the constructionProject) as of the qualifyingLRT-1 extension, assets. theThe Connector existing LRT-1 Road, isCALAX, severely CCLEX deteriorated and C5when South turned Link over Project) to LRMC as and thequalifying intention assets. of management The existing to LRT-1bring it is at severely par with deteriorated the standard when for rail turned system over played to LRMC a key and factor inthe the intention designation of management of the rehabilitation to bring it of at the par existing with the LRT-1 standard system for rail as asystem qualifying played asset. a key factor in the designation of the rehabilitation of the existing LRT-1 system as a qualifying asset. *SGVFSM006036*

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The Company capitalizes borrowing costs that are directly attributable to the acquisition or constructionThe Company of capitalizes the qualifying borrowing asset as costs part thatof the are cost directly of that attributable asset using to the the specific acquisition borrowing or approach,construction as ofthe the Company qualifying uses asset specific as part borrowings of the cost to of finance that asset its qualifyingusing the specificassets. Capitalizedborrowing borrowingapproach, ascosts the forCompany the years uses ended specific December borrowings 31, 2020 to finance and 2019 its qualifyingamounted assets.to P=8,955 Capitalized million andborrowing P=5,011 costs million, for therespectively years ended (see December Note 12). 31, Capitalization 2020 and 2019 of borrowing amounted coststo P=8,955 ceases million when substantiallyand P=5,011 million, all the activitiesrespectively necessary (see Note to prepare12). Capitalization the components of borrowing of the service costs concession ceases when asset forsubstantially its intended all usethe areactivities complete necessary. to prepare the components of the service concession asset for its intended use are complete. ƒ Construction Revenue and Costs. The Company recognizes construction revenues and costs in ƒ accordanceConstruction with Revenue PFRS and15, Costs.RevenueThe from Company Contracts recognizes with Customers construction, beginning revenues January and costs1, 2018 in accordance(PAS 11, Construction with PFRS ,15, ContractsRevenueprior from to Contracts adoption ofwith PFRS Customers 15; see, Notebeginning 39). GivenJanuary that 1, 2018the (PASrehabilitation 11, Construction and construction, Contracts worksprior have to adoptionbeen subcontracted of PFRS 15; to see outside Note contractors 39). Given (excluding that the therehabilitation cost of some and materials construction for some works contractors), have been subcontracted the recognized to construction outside contractors revenue (excluding substantiallythe cost of some approximates materials forthe some related contractors), construction the cost. recognized Construction construction revenue revenue recognized in the consolidatedsubstantially statementsapproximates of comprehensivethe related construction income amountedcost. Construction to =33,988P revenue million, recognized P=42,795 million in the andconsolidated P=27,363 millionstatements for ofthe comprehensive years ended December income amounted 31, 2020, to2019 =33,988P and 2018, million, respectively. P=42,795 million Constructionand P=27,363 millioncosts recognized for the years in the ended consolidated December statements 31, 2020, of2019 comprehensive and 2018, respectively. income amounted toConstruction =33,988P million, costs recognized P=42,795 million in the andconsolidated P=27,362 millionstatements for theof comprehensive years ended December income amounted31, 2020, 2019to =33,988P and 2018, million, respectively. P=42,795 million and P=27,362 million for the years ended December 31, 2020, 2019 and 2018, respectively. ƒ Provision for Heavy Maintenance. The Company also recognizes its contractual obligations to ƒ restoreProvision the for toll Heavy roads Maintenance.to a specified level The Companyof serviceability. also recognizes NLEX Corp, its contractual CIC and PTobligations Nusantara to recognizerestore the provision toll roads following to a specified PAS level 37, Provisions, of serviceability. Contingent NLEX Liabilities Corp, CIC and and Contingent PT Nusantara Assets, asrecognize the obligation provision arises following which isPAS a consequence 37, Provisions, of the Contingent use of the Liabilities toll roads and Contingenttherefore it Assetsis , proportionalas the obligation to the arises number which of isvehicles a consequence using the of roads the use and of increasing the toll roads in measurable and therefore annual it is increments.proportional Provisionto the number for heavy of vehicles maintenance using the amounted roads and to increasingP=747 million in measurable and =511P million annual as at Decemberincrements. 31, Provision 2020 and for 2019, heavy respectively maintenance (see amounted Note 16). to P=747 million and =511P million as at December 31, 2020 and 2019, respectively (see Note 16). Claims from the Grantor/s. Sizeable pending claims have accumulated for the Company’s water, toll andClaims rail frombusinesses: the Grantor/s. Sizeable pending claims have accumulated for the Company’s water, toll and rail businesses: ƒ Maynilad. On December 29, 2014, Maynilad’s proposed adjustment to its tariff for the rate ƒ rebasingMaynilad. period On December 2013 to 2017 29, 2014,was upheld Maynilad’s against proposed the Metropolitan adjustment Waterworks to its tariff andfor theSewerage rate Systemrebasing (“MWSS”)-approved period 2013 to 2017 tariffwas upheld adjustment against in thearbitration Metropolitan proceedings Waterworks in the andPhilippines. Sewerage However,System (“MWSS”)-approved MWSS did not implement tariff adjustment the awarded in arbitrationtariff increase. proceedings Consequently, in the Philippines. Maynilad called onHowever, the Letter MWSS of Undertaking did not implement (the “Undertaking”) the awarded whichtariff increase. the Republic Consequently, of the Philippines Maynilad (the called “Republic”),on the Letter throughof Undertaking the Department (the “Undertaking”) of Finance (“DOF”), which the issued Republic in favor of the of Philippines Maynilad. (theFor refusing“Republic”), to compensate through the Maynilad Department for itsof Financeforegone (“DOF”), revenues issuedarising in from favor the of refusal Maynilad. of MWSS For to implementrefusing to thecompensate awarded Mayniladtariff increase, for its Maynilad foregone initiated revenues arbitration arising from proceedings the refusal against of MWSS the to ROPimplement in Singapore, the awarded pursuant tariff to increase, the Undertaking. Maynilad initiatedThe arbitration arbitration hearings proceedings were completed against the in DecemberROP in Singapore, 2016. On pursuant July 24, to 2017, the Undertaking. the three-person The Arbitral arbitration Tribunal hearings (the were “Tribunal”) completed in unanimouslyDecember 2016. upheld On theJuly validity 24, 2017, of Maynilad’sthe three-person claim Arbitral against theTribunal Undertaking, (the “Tribunal”) and ordered the Republic,unanimously through upheld the the DOF, validity to compensate of Maynilad’s Maynilad claim foragainst its foregone the Undertaking, revenues. and The ordered Tribunal the orderedRepublic, the through Republic the to DOF, reimburse to compensate Maynilad Maynilad P=3.4 billion for (subsequentlyits foregone revenues. corrected The to P=3.2 Tribunal billion withordered cost the of Republicmoney as to of reimburse August 31, Maynilad 2016) for P=3.4 losses billion from (subsequently March 11, 2015 corrected to August to P=3.2 31, billion2016, withoutwith cost prejudice of money to as any of rightsAugust that 31, Maynilad 2016) for may losses have from to seekMarch recourse 11, 2015 against to August the MWSS 31, 2016, for losseswithout incurred prejudice from to anyJanuary rights 2013 that to Maynilad March 10, may 2015. have Further, to seek recoursethe Tribunal against ruled the that MWSS Maynilad for islosses entitled incurred to recover from Januaryfrom the 2013 Republic to March its losses 10, 2015. from SeptemberFurther, the 1, Tribunal 2016. ruled that Maynilad is entitled to recover from the Republic its losses from September 1, 2016.

*SGVFSM006036*

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The Company capitalizes borrowing costs that are directly attributable to the acquisition or On December 10, 2019, during a joint hearing of the Congressional Committees on Public constructionThe Company of capitalizes the qualifying borrowing asset as costs part thatof the are cost directly of that attributable asset using to the the specific acquisition borrowing or AccountsOn December and Good10, 2019, Government during a jointand Public hearing Accountability, of the Congressional Maynilad Committees made an oral on Public offer to approach,construction as ofthe the Company qualifying uses asset specific as part borrowings of the cost to of finance that asset its qualifyingusing the specificassets. Capitalizedborrowing Accountswaive its claimsand Good against Government ROP amounting and Public to =6.7P Accountability, billion which Maynilad represents made Maynilad’s an oral offer foregone to borrowingapproach, ascosts the forCompany the years uses ended specific December borrowings 31, 2020 to finance and 2019 its qualifyingamounted assets.to P=8,955 Capitalized million waiverevenues its forclaims the periodagainst March ROP amounting 11, 2015 to to December =6.7P billion 31, which 2017 represents(see Note 30).Maynilad’s foregone andborrowing P=5,011 costs million, for therespectively years ended (see December Note 12). 31, Capitalization 2020 and 2019 of borrowing amounted coststo P=8,955 ceases million when revenues for the period March 11, 2015 to December 31, 2017 (see Note 30). substantiallyand P=5,011 million, all the activitiesrespectively necessary (see Note to prepare12). Capitalization the components of borrowing of the service costs concession ceases when asset On January 2, 2020, Maynilad executed the Release From and Waiver of Claim on Arbitral forsubstantially its intended all usethe areactivities complete necessary. to prepare the components of the service concession asset OnAward January (“Waiver”) 2, 2020, in Maynilad favor of theexecuted ROP. theThe Release waiver Fromwas unanimously and Waiver ofratified Claim on on March Arbitral 2, 2020 for its intended use are complete. byAward the Maynilad(“Waiver”) Board in favor of Directors of the ROP. after The consultation waiver was with unanimously the three major ratified shareholders on March of2, 2020 ƒ Construction Revenue and Costs. The Company recognizes construction revenues and costs in Mayniladby the Maynilad namely, Board MPIC, of DMCIDirectors Holdings, after consultation Inc. and Marubeni with the Corp.three major shareholders of ƒ accordanceConstruction with Revenue PFRS and15, Costs.RevenueThe from Company Contracts recognizes with Customers construction, beginning revenues January and costs1, 2018 in Maynilad namely, MPIC, DMCI Holdings, Inc. and Marubeni Corp. (PASaccordance 11, Construction with PFRS ,15, ContractsRevenueprior from to Contracts adoption ofwith PFRS Customers 15; see, Notebeginning 39). GivenJanuary that 1, 2018the ƒ NLEX Corp. and CIC. In August 2015, for failure to implement toll rate adjustments, NLEX (PASrehabilitation 11, Construction and construction, Contracts worksprior have to adoptionbeen subcontracted of PFRS 15; to see outside Note contractors 39). Given (excluding that the ƒ NLEXCorp. andCorp. CIC and filed CIC. notices In August with the2015, Toll for Regulatory failure to implementBoard (TRB) toll and rate Department adjustments, of NLEX therehabilitation cost of some and materials construction for some works contractors), have been subcontracted the recognized to construction outside contractors revenue (excluding TransportationCorp. and CIC filedand Communications notices with the Toll(DOTC) Regulatory demanding Board settlement (TRB) and of Departmentthe past due oftariff substantiallythe cost of some approximates materials forthe some related contractors), construction the cost. recognized Construction construction revenue revenue recognized in the increases.Transportation Meaningful and Communications progress on regulatory (DOTC) demandingmatters on thesettlement toll road of tariff the pasthas beendue tariff made in consolidatedsubstantially statementsapproximates of comprehensivethe related construction income amountedcost. Construction to =33,988P revenue million, recognized P=42,795 million in the increases.2019. Meaningful progress on regulatory matters on the toll road tariff has been made in andconsolidated P=27,363 millionstatements for ofthe comprehensive years ended December income amounted 31, 2020, to2019 =33,988P and 2018, million, respectively. P=42,795 million 2019. Constructionand P=27,363 millioncosts recognized for the years in the ended consolidated December statements 31, 2020, of2019 comprehensive and 2018, respectively. income amounted For the NLEX case, on August 15, 2020, the Arbitral Tribunal informed the parties that it is in the toConstruction =33,988P million, costs recognized P=42,795 million in the andconsolidated P=27,362 millionstatements for theof comprehensive years ended December income amounted31, 2020, processFor the NLEXof finalizing case, onits Augustdeliberations, 15, 2020, is currently the Arbitral exchanging Tribunal notes informed on the the draft parties award, that andit is in the 2019to =33,988P and 2018, million, respectively. P=42,795 million and P=27,362 million for the years ended December 31, 2020, processwould do of its finalizing utmost toits issue deliberations, the award is in currently the following exchanging months. notes The on arbitration the draft caseaward, remains and 2019 and 2018, respectively. pendingwould do as its at utmost March to19, issue 2021 the (see award Note in 30). the following months. The arbitration case remains ƒ Provision for Heavy Maintenance. The Company also recognizes its contractual obligations to pending as at March 19, 2021 (see Note 30). ƒ restoreProvision the for toll Heavy roads Maintenance.to a specified level The Companyof serviceability. also recognizes NLEX Corp, its contractual CIC and PTobligations Nusantara to For CIC, on December 23, 2020, it filed its Manifestation of Withdrawal with the Permanent Court recognizerestore the provision toll roads following to a specified PAS level 37, Provisions, of serviceability. Contingent NLEX Liabilities Corp, CIC and and Contingent PT Nusantara Assets, Forof Arbitration: CIC, on December (i) stating 23, that 2020, its withdrawal it filed its Manifestation of its claims in of the Withdrawal arbitration with is without the Permanent prejudice Court to its asrecognize the obligation provision arises following which isPAS a consequence 37, Provisions, of the Contingent use of the Liabilities toll roads and Contingenttherefore it Assetsis , legalof Arbitration: positions (i)under stating law thatand itscontract; withdrawal and (ii) of requestingits claims in the the Permanent arbitration Court is without of Arbitration prejudice to to issue its proportionalas the obligation to the arises number which of isvehicles a consequence using the of roads the use and of increasing the toll roads in measurable and therefore annual it is alegal resolution positions in accordanceunder law and with contract; the Manifestation and (ii) requesting of Withdrawal the Permanent (see Note Court 30). of Arbitration to issue increments.proportional Provisionto the number for heavy of vehicles maintenance using the amounted roads and to increasingP=747 million in measurable and =511P million annual as at a resolution in accordance with the Manifestation of Withdrawal (see Note 30). Decemberincrements. 31, Provision 2020 and for 2019, heavy respectively maintenance (see amounted Note 16). to P=747 million and =511P million as at ƒ LRMC. On various dates in 2015 through 2020, LRMC submitted letters to the Department of December 31, 2020 and 2019, respectively (see Note 16). ƒ TransportationLRMC. On various (DOTr) dates representing in 2015 through its claim 2020, for LRMC costs incurred submitted and letters estimated to the in Department relation to of Claims from the Grantor/s. Sizeable pending claims have accumulated for the Company’s water, toll ExistingTransportation System (DOTr) Requirement representing (ESR) its and claim Light for Rail costs Vehicle incurred (LRV) and estimatedshortfall on in the relation premise to of andClaims rail frombusinesses: the Grantor/s. Sizeable pending claims have accumulated for the Company’s water, toll theExisting Grantors’ System obligation Requirement in relation (ESR) to and the Lightcondition Rail of Vehicle the Existing (LRV) System shortfall as on at the premiseEffective of and rail businesses: theDate Grantors’ (September obligation 12, 2015) in relationfare deficit, to the Structural condition Defect of the RestorationExisting System (SDR) as costs, at the and Effective contractor ƒ Maynilad. On December 29, 2014, Maynilad’s proposed adjustment to its tariff for the rate andDate other (September additional 12, costs2015) incurred fare deficit, less KeyStructural Performance Defect RestorationIndicator (KPI) (SDR) charges costs, (see and Notes contractor 29 ƒ rebasingMaynilad. period On December 2013 to 2017 29, 2014,was upheld Maynilad’s against proposed the Metropolitan adjustment Waterworks to its tariff andfor theSewerage rate and 30).other additional costs incurred less Key Performance Indicator (KPI) charges (see Notes 29 Systemrebasing (“MWSS”)-approved period 2013 to 2017 tariffwas upheld adjustment against in thearbitration Metropolitan proceedings Waterworks in the andPhilippines. Sewerage and 30). However,System (“MWSS”)-approved MWSS did not implement tariff adjustment the awarded in arbitrationtariff increase. proceedings Consequently, in the Philippines. Maynilad called Except for portion of the fare deficit claim recognized under the balancing payment mechanism onHowever, the Letter MWSS of Undertaking did not implement (the “Undertaking”) the awarded whichtariff increase. the Republic Consequently, of the Philippines Maynilad (the called Except(see Notes for portion17 and 29,of theas atfare December deficit claim 31, 2020 recognized and 2019, under the the consolidated balancing paymentfinancial mechanismstatements do not “Republic”),on the Letter throughof Undertaking the Department (the “Undertaking”) of Finance (“DOF”), which the issued Republic in favor of the of Philippines Maynilad. (theFor include(see Notes any 17 adjustments and 29, as forat December the abovementioned 31, 2020 and claims 2019, pending the consolidated outcome of financial the discussions statements with do the not refusing“Republic”), to compensate through the Maynilad Department for itsof Financeforegone (“DOF”), revenues issuedarising in from favor the of refusal Maynilad. of MWSS For to Grantor/s.include any adjustments for the abovementioned claims pending outcome of the discussions with the implementrefusing to thecompensate awarded Mayniladtariff increase, for its Maynilad foregone initiated revenues arbitration arising from proceedings the refusal against of MWSS the to Grantor/s. ROPimplement in Singapore, the awarded pursuant tariff to increase, the Undertaking. Maynilad initiatedThe arbitration arbitration hearings proceedings were completed against the in Obligation to Purchase NCI. On May 28, 2020, MPIC entered into an agreement with Sumitomo DecemberROP in Singapore, 2016. On pursuant July 24, to 2017, the Undertaking. the three-person The Arbitral arbitration Tribunal hearings (the were “Tribunal”) completed in CorporationObligation to (Sumitomo) Purchase NCI for. theOn acquisitionMay 28, 2020, by Sumitomo MPIC entered of a into34.9% an interestagreement in MPLRC. with Sumitomo The unanimouslyDecember 2016. upheld On theJuly validity 24, 2017, of Maynilad’sthe three-person claim Arbitral against theTribunal Undertaking, (the “Tribunal”) and ordered the agreementCorporation also (Sumitomo) provides forfor Sumitomo’sthe acquisition right by to Sumitomo issue a put of notice a 34.9% for interest all the MPLRCin MPLRC. shares The it owns Republic,unanimously through upheld the the DOF, validity to compensate of Maynilad’s Maynilad claim foragainst its foregone the Undertaking, revenues. and The ordered Tribunal the agreementin the event also of aprovides deadlock for (following Sumitomo’s unsuccessful right to issue mediation a put notice procedures) for all theand MPLRC in the event shares of MPIC’sit owns orderedRepublic, the through Republic the to DOF, reimburse to compensate Maynilad Maynilad P=3.4 billion for (subsequentlyits foregone revenues. corrected The to P=3.2 Tribunal billion defaultin the event on its of obligations a deadlock under (following the shareholders’ unsuccessful agreement. mediation procedures) and in the event of MPIC’s withordered cost the of Republicmoney as to of reimburse August 31, Maynilad 2016) for P=3.4 losses billion from (subsequently March 11, 2015 corrected to August to P=3.2 31, billion2016, default on its obligations under the shareholders’ agreement. withoutwith cost prejudice of money to as any of rightsAugust that 31, Maynilad 2016) for may losses have from to seekMarch recourse 11, 2015 against to August the MWSS 31, 2016, for While management believes that the contingent events that will lead to the exercise of the put option losseswithout incurred prejudice from to anyJanuary rights 2013 that to Maynilad March 10, may 2015. have Further, to seek recoursethe Tribunal against ruled the that MWSS Maynilad for hasWhile nil managementto minimal probability believes that of happening,the contingent under events PFRS, that the will probability lead to the of exercise the event(s) of the happening put option or islosses entitled incurred to recover from Januaryfrom the 2013 Republic to March its losses 10, 2015. from SeptemberFurther, the 1, Tribunal 2016. ruled that Maynilad hasnot happeningnil to minimal does probability not influence of happening, the value of under the financial PFRS, the liability probability in the ofconsolidated the event(s) financial happening or is entitled to recover from the Republic its losses from September 1, 2016. statements.not happening Any does contractual not influence obligation the value to purchase of the financial NCI gives liability rise to in a the financial consolidated liability financial measured at amountsstatements. not Anyless thancontractual the amount obligation payable to purchaseon demand NCI (see gives Note rise 4). to a financial liability measured at amounts not less than the amount payable on demand (see Note 4).

*SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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Issuance of Exchangeable Bonds as Equity Transactions. Under PFRS, the treatment of convertible bondsIssuance which of Exchangeable compel the holder Bonds to as convert Equity the Transactions. bond (ratherUnder than being PFRS, at thethe treatmentholder’s option) of convertible depends bondson whether which the compel number the of holder shares to issued convert on theconversion bond (rather are variable than being or fixed:at the holder’s option) depends on whether the number of shares issued on conversion are variable or fixed: ƒ If the mandatorily convertible bond can only be settled by the issue of a variable amount of ƒ ordinaryIf the mandatorily shares calculated convertible to equal bond a can fixed only amount be settled in the by issuer’s the issue functional of a variable currency amount (that of is, ordinarythere is a sharesrepayment calculated of principal, to equal albeit a fixed in shares),amount thein the instrument issuer’s functionalis a liability. currency (that is, ƒ Ifthere the ismandatorily a repayment convertible of principal, bond albeit can inonly shares), be settled the instrument by the issue is ofa liability. a fixed number of ordinary ƒ shares,If the mandatorily that part of convertiblethe instrument bond is canan equity only be component. settled by the issue of a fixed number of ordinary shares, that part of the instrument is an equity component. In 2014 and 2019, MPIC issued Exchangeable Bonds with aggregate principal amount of P=36.6In 2014 billion. and 2019, These MPIC Exchangeable issued Exchangeable Bonds are instrumentsBonds with that,aggregate at a certain principal time amount in the future,of mandatorilyP=36.6 billion. convert These intoExchangeable a fixed number Bonds of are MPHHI instruments common that, shares at a certain(see Note time 32). in the The future, Exchangeablemandatorily convert Bonds into are forwarda fixed number contracts of toMPHHI deliver common fixed number shares of (see shares Note for 32). which The consideration Exchangeablehas been received Bonds in advance, are forward and contracts hence, are to effectively deliver fixed accounted number forof sharesas equity for transactionswhich consideration in the Company’shas been received consolidated in advance, financial and hence,statements. are effectively accounted for as equity transactions in the Company’s consolidated financial statements. Accounting for Arrangements as a Single Transaction. In determining whether to account for the Accountingarrangements for as Arrangements a single transaction, as a Single an entity Transaction. considersIn all determining the terms and whether conditions to account of the for the arrangements andas a theirsingle economic transaction, effects. an entity One considersor more of all the the following terms and circumstances conditions of indicatethe that it isarrangements appropriate andto account their economic for multiple effects. arrangements One or more as a of single the following transaction: circumstances indicate that it is appropriate to account for multiple arrangements as a single transaction: ƒ they are entered into at the same time or in contemplation of each other; ƒ they formare entered a single into transaction at the same designed time or to in achieve contemplation an overall of eachcommercial other; effect; ƒ thethey occurrence form a single of one transaction arrangement designed is dependent to achieve on an the overall occurrence commercial of at least effect; one other ƒ arrangement;the occurrence or, of one arrangement is dependent on the occurrence of at least one other ƒ arrangement;one arrangement or, considered on its own is not economically justified, but it is economically ƒ justifiedone arrangement when considered considered together on its ownwith isother not economicallyarrangements. justified, but it is economically justified when considered together with other arrangements. These indicators clarify that arrangements that are part of a package are accounted for as a single transaction.These indicators clarify that arrangements that are part of a package are accounted for as a single transaction. The series of transactions entered into by MPIC together with MPHHI for the investment and entry of TheKKR series and Co. of transactions (“KKR”), alongside entered into Arran by InvestmentsMPIC together Private with LimitedMPHHI (“Arran”), for the investment in and to and MPHHI, entry of wereKKR assessedand Co. (“KKR”),to be linked alongside agreements Arran and Investments thus, were Privateaccounted Limited for as (“Arran”), a single transaction in and to MPHHI,that resultedwere assessed to the todeconsolidation be linked agreements of MPHHI and considering thus, were accounted MPIC’s loss for ofas controla single over transaction MPHHI that with the remainingresulted to interestthe deconsolidation accounted for of as MPHHI investment considering in associate. MPIC’s Management’s loss of control judgements over MPHHI in concluding with the remainingthe loss of interestcontrol overaccounted MPHHI for and as investment the accounting in associate. for the remaining Management’s investment judgements are discussed in concluding in Notethe loss 32. of control over MPHHI and the accounting for the remaining investment are discussed in Note 32. GBPC as a Group Held for Deemed Disposal. On December 23, 2020, BPHI entered into an share GBPCpurchase as agreementa Group Held with for MGen, Deemed a wholly-owned Disposal. On subsidiary December of 23, MERALCO, 2020, BPHI for entered the sale into by an BPHI share of 56%purchase of the agreement issued and with outstanding MGen, a wholly-ownedshares of GBPC. subsidiary The transaction of MERALCO, is subject for to the customary sale by BPHI closing of conditions,56% of the issuedincluding and regulatory outstanding and shares third-party of GBPC. approvals The transaction and is expected is subject to close to customary within the closing first quarterconditions, of 2021, including barring regulatory any unforeseen and third-party circumstances. approvals and is expected to close within the first quarter of 2021, barring any unforeseen circumstances. As a result of the execution of the share purchase agreement, GBPC qualified as a group held for deemedAs a result disposal of the andexecution since the of theoperations share purchase of GBPC agreement, represents GBPC significant qualified portion as a of group the Company’s held for powerdeemed generation disposal and business, since theit qualifies operations as aof discontinued GBPC represents operation significant as at December portion of 31, the 2020. Company’s power generation business, it qualifies as a discontinued operation as at December 31, 2020.

*SGVFSM006036* *SGVFSM006036*

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GBPC shares are available for immediate sale as of December 31, 2020 with the customary conditionsGBPC shares for arethe availableconsummation for immediate of the sale. sale The as of sale December is highly 31, probable 2020 with given the commitment customary of both shareholdersconditions for as the evidenced consummation by the shareof the purchasesale. The agreement. sale is highly As probableof December given 31, commitment 2020, the Company of both isshareholders in the process as evidenced of securing by all the the share required purchase pre-approvals agreement. and As expect of December to obtain 31, these 2020, on the Companybasis of theis in status the process of discussions of securing (see all Note the 33).required pre-approvals and expect to obtain these on the basis of the status of discussions (see Note 33). Consolidation of CIC in which the Company Holds No Voting Rights. The Company considers that it controlsConsolidation CIC even of CIC though in which it does the not Company own any Holds voting No rights Voting by Rightsvirtue .of The a Management Company considers Letter that it Agreementcontrols CIC (MLA). even though Under it the does MLA, not own MPTC any has voting the powerrights byto solelyvirtue directof a Management the entire operations, Letter includingAgreement the (MLA). capital Underexpenditure the MLA, and expansionMPTC has plans the power of CIC. to solelyMPTC direct shall thethen entire receive operations, all the financialincluding benefits the capital from expenditure CIC’s operations and expansion and all lossesplans of incurred CIC. MPTC by CIC shall are tothen be receiveborne by all MPTC. the financial benefits from CIC’s operations and all losses incurred by CIC are to be borne by MPTC. Definition of Default and Credit-impaired Financial Assets upon Adoption of PFRS 9, Financial Instruments.Definition ofThe Default Company and Credit-impaired considers a financial Financial asset Assets in default, upon whichAdoption is fully of PFRS aligned 9, Financial with the definitionInstruments. of Thecredit-impaired, Company considers when contractual a financial payments asset in default, are more which than is60 fully to 180 aligned days withpast due.the However,definition ofin certaincredit-impaired, cases, the when Company contractual may also payments consider are a financialmore than asset 60 to to 180 be indays default past whendue. internalHowever, or inexternal certain information cases, the Company indicates maythat alsothe Company consider ais financial unlikely assetto receive to be thein default outstanding when contractualinternal or external amounts information in full before indicates taking intothat accountthe Company any credit is unlikely enhancements to receive held the byoutstanding the Company. contractual amounts in full before taking into account any credit enhancements held by the Company. Estimates TheEstimates key assumptions concerning the future and other key sources of estimation uncertainty at the reportingThe key assumptions date, that have concerning a significant the futurerisk of and causing other a key material sources adjustment of estimation to the uncertainty carrying amounts at the of assetsreporting and date, liabilities that have within a significant the next financial risk of causing year, are a describedmaterial adjustment below. The to Companythe carrying based amounts its of assumptionsassets and liabilities and estimates within onthe parameters next financial available year, arewhen described the consolidated below. The financial Company statements based its were prepared.assumptions Existing and estimates circumstances on parameters and assumptions available whenabout thefuture consolidated developments, financial however, statements may change were due toprepared. market changesExisting or circumstances circumstances and arising assumptions beyond aboutthe control future of developments, the Company. however, Such changes may change are due reflectedto market in changes the assumptions or circumstances when they arising occur. beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Determination of Fair Value of Financial Instruments. The Company initially records all financial instrumentsDetermination at fairof Fair value Value and subsequentlyof Financial Instruments.carries certainThe financial Company assets initially and financial records liabilitiesall financial at fairinstruments value, which at fair requires value and extensive subsequently use of carriesaccounting certain estimates financial and assets judgment. and financial Valuation liabilities techniques at arefair usedvalue, particularly which requires for financial extensive assets use ofand accounting financial liabilitiesestimates thatand arejudgment. not quoted Valuation in an active techniques market.are used particularlyWhere valuation for financial techniques assets are andused financial to determine liabilities fair valuesthat are (e.g., not quoteddiscounted in an cash active flow and optionmarket. pricing Where models), valuation they techniques are periodically are used reviewed to determine by qualified fair values personnel (e.g., discounted who are independent cash flow and of theoption persons pricing that models), initiated they the transactions.are periodically All reviewed models are by calibratedqualified personnel to ensure whothat outputsare independent reflect of actualthe persons data andthat comparative initiated the markettransactions. prices. All To models the extent are practicable,calibrated to models ensure usethat only outputs observable reflect dataactual as data valuation and comparative inputs. However, market otherprices. inputs To the such extent as credit practicable, risk (whether models that use of only the observableCompany or thedata counterparties), as valuation inputs. forward However, prices, volatilitiesother inputs and such correlations, as credit risk require (whether management that of the to Companydevelop or estimatesthe counterparties), or make adjustments forward prices, to observable volatilities data and of correlations, comparable require instruments. management The amount to develop of changes inestimates fair values or make would adjustments differ if the to Company observable uses data different of comparable valuation instruments. assumptions The or otheramount acceptable of changes methodologies.in fair values would Any differ change if thein fair Company value of uses these different financial valuation instruments assumptions would affect or other either acceptable the consolidatedmethodologies. statement Any change of comprehensive in fair value incomeof these orfinancial consolidated instruments statement would of changesaffect either in equity. 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 36. Fair values of financial assets and financial liabilities are presented in Note 36. Purchase Price Allocation in Business Combinations and Goodwill. The Company accounts for the Purchaseacquired businesses Price Allocation using the in Businessacquisition Combinations method which and requires Goodwill. extensiveThe Company use of accounting accounts for the judgmentsacquired businesses and estimates using to the allocate acquisition the purchase method pricewhich to requires the fair extensivemarket values use of of accounting the acquiree’s identifiablejudgments and assets estimates and liabilities to allocate and the contingent purchase liabilities, price to the if any,fair marketat the acquisition values of the date. acquiree’s Any differenceidentifiable in assets the purchase and liabilities price andand thecontingent fair values liabilities, of the net if any,assets at acquiredthe acquisition is recorded date. as Any either goodwill,difference ain separate the purchase account price in theand consolidated the fair values statement of the net of assetsfinancial acquired position, is recorded or gain on as bargaineither purchasegoodwill, in a separateprofit or accountloss. Thus, in the the consolidated numerous judgments statement madeof financial in estimating position, the or fair gain value on bargain to be purchase in profit or loss. Thus, the numerous judgments made in estimating the fair value to be *SGVFSM006036* *SGVFSM006036*

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assigned to the acquiree’s assets and liabilities can materially affect the Company’s financial position andassigned performance. to the acquiree’s assets and liabilities can materially affect the Company’s financial position and performance. The Company’s acquisitions of certain subsidiaries have resulted in recognition of goodwill. The carryingThe Company’s value of acquisitions goodwill amounted of certain to subsidiaries =15,337P million have andresulted =15,676P in recognition million as ofat goodwill. The carryingDecember value 31, 2020of goodwill and 2019, amounted respectively to =15,337P (see Note million 11). and =15,676P million as at December 31, 2020 and 2019, respectively (see Note 11). Provision for Expected Credit Losses (ECL) of Receivables upon Adoption of PFRS 9. The Company usesProvision a provision for Expected matrix Creditto calculate Losses ECLs (ECL) for of receivables. Receivables The upon provision Adoption rates of PFRSare based 9. Theon days Company past due foruses groupings a provision of matrixvarious to customer/counterparty calculate ECLs for receivables. segments thatThe haveprovision similar rates loss are patterns based on(i.e., days by location,past due servicefor groupings type, customer of various type customer/counterparty and rating). segments that have similar loss patterns (i.e., by location, service type, customer type and rating). The provision matrix is initially based on the Company’s historical observed default rates. The Company willThe provisioncalibrate the matrix matrix is initiallyto adjust based the historical on the Company’s credit loss historicalexperience observed with forward-looking default rates. The information. Company Atwill every calibrate reporting the matrix date, theto adjust historical the historical observed creditdefault loss rates experience are updated with and forward-looking changes in the information. forward-lookingAt every reporting estimates date, the are historical analyzed. observed default rates are updated and changes in the forward-looking estimates are analyzed. The assessment of the correlation between historical observed default rates, forecast economic conditions andThe ECLsassessment is a significant of the correlation estimate. between The amount historical of ECLs observed is sensitive default to rates, changes forecast in circumstances economic conditions and of forecastand ECLs economic is a significant conditions. estimate. The Company’s The amount historical of ECLs creditis sensitive loss experience to changes and in circumstancesforecast of economic and of conditionsforecast economic may also conditions. not be representative The Company’s of customer’s historical actual credit defaultloss experience in the future. and forecast The information of economic aboutconditions the ECLs may alsoon the not Company’s be representative receivables of customer’s is disclosed actual in Note default 34. in the future. The information about the ECLs on the Company’s receivables is disclosed in Note 34. The economic impact of COVID-19 pandemic to the Company’s customers, specifically to the water concession’sThe economic customers, impact of togetherCOVID-19 with pandemic the order to from the Company’sthe MWSS Regulatorycustomers, specificallyOffice directing to the Maynilad water toconcession’s extend payment customers, terms together(see Note with 5), thenecessitated order from reassessment the MWSS ofRegulatory Maynilad’s Office ECL directing model in Maynilad 2020. to extend payment terms (see Note 5), necessitated reassessment of Maynilad’s ECL model in 2020. There have been no significant changes in estimation techniques or significant assumptions in Maynilad’sThere have beenassessment no significant during thechanges reporting in estimation year. techniques or significant assumptions in Maynilad’s assessment during the reporting year. The assessment of the correlation between historical observed default rates, forecast economic conditions andThe ECLsassessment is a significant of the correlation estimate. between The amount historical of ECLs observed is sensitive default to rates, changes forecast in circumstances economic conditions and of forecastand ECLs economic is a significant conditions. estimate. The Company’sThe amount historical of ECLs iscredit sensitive loss experience to changes andin circumstances forecast of economic and of conditionsforecast economic may also conditions. not be representative The Company’s of customer’s historical actual credit default loss experience in the future. and forecast of economic conditions may also not be representative of customer’s actual default in the future. As discussed in Note 5, the Maynilad extended assistance to its customers in the form of payment due dateAs discussed extensions in andNote a 5,moratorium the Maynilad on disconnectionsextended assistance during to the its ECQ.customers Disconnections in the form resumedof payment on due Decemberdate extensions 17, 2020. and a Thesemoratorium factors on were disconnections incorporated during in the theCompany’s ECQ. Disconnections determination resumed of historical on observedDecember default 17, 2020. rates. These factors were incorporated in the Company’s determination of historical observed default rates. Incorporation of Forward-looking Information upon Adoption of PFRS 9. To capture the effect of changesIncorporation to the ofeconomic Forward-looking environment Information in the future, upon the Adoption computation of PFRS of Probability 9. To capture of Default the effect (PD), of Loss Givenchanges Default to the (LGD)economic and environment ECL, incorporates in the future, forward-looking the computation information; of Probability assumptions of Default on the (PD), path Lossof economicGiven Default variables (LGD) that and are ECL, likely incorporates to have an effectforward-looking on the repayment information; ability assumptions of the Company’s on the path of counterparties.economic variables The thatstarting are likelypoint tofor have the projections an effect on of the economic repayment variables ability isof based the Company’s on management’s view,counterparties. which underlies The starting the plan point to deliverfor the theprojections Company’s of economic strategy andvariables ensures is itbased has sufficienton management’s capital over theview, medium which term.underlies Management’s the plan to deliver view covers the Company’s a core set strategyof economic and ensuresvariables it requiredhas sufficient to set capital the over strategicthe medium plan. term. Management’s view covers a core set of economic variables required to set the strategic plan.

*SGVFSM006036* *SGVFSM006036*

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Recoverability of Goodwill, Service Concession Assets not yet Available for Use, and Service ConcessionRecoverability Assets of Goodwill, related to Service West Zone Concession Concession. AssetsGoodwill not yet Available and service for concessionUse, and Service assets not yet availableConcession for Assets use are related subject to to West annual Zone impairment Concession. test.Goodwill In addition, and asservice discussed concession in Note assets 30, there not yet is anavailable ongoing for discussion use are subject with theto annualMWSS impairment on the provisions test. In of addition, West Zone as discussed concession in agreementNote 30, there for is renegotiationan ongoing discussion and amendment with the which MWSS is anon impairmentthe provisions indicator of West requiring Zone concession assessment agreement of the for recoverabilityrenegotiation and of the amendment service concession which is an assets impairment related toindicator West Zone requiring concession. assessment of the recoverability of the service concession assets related to West Zone concession. These require estimation of the value in use (VIU) of the cash generating units (CGUs) to which the goodwillThese require is allocated estimation or to of which the value the servicein use (VIU)concession of the assets cash generatingbelong. Estimating units (CGUs) the VIU to which requires the thegoodwill Company is allocated to estimate or to the which expected the service future concessioncash flows assetsfrom the belong. CGU, Estimating considering the the VIU impact requires of the ongoingthe Company COVID-19 to estimate pandemic the expected on the operations future cash of flows the Company, from the CGU,and to considering choose an appropriate the impact of the discountongoing COVID-19rate in order pandemic to calculate on the presentoperations value of ofthe those Company, cash flows. and to Forchoose the Westan appropriate Zone concessiondiscount rate asset in order where to the calculate VIU is the calculated present valueusing ofthe those expected cash cashflows. flow For approach, the West management Zone determinedconcession assetprobability-weighted where the VIU is cash calculated flow scenarios using the with expected assumptions cash flow including approach, the managementconcession perioddetermined and theprobability-weighted discount rate considering cash flow the scenariosrisks surrounding with assumptions the concession including agreement. the concession period and the discount rate considering the risks surrounding the concession agreement. Impairment of goodwill amounted to P=167 million, =9,825P million and P=43 million in 2020, 2019 and 2018,Impairment respectively of goodwill while amounted impairment to ofP=167 West million, Zone concession=9,825P million asset and amounted P=43 million to P=11,417 in 2020, million 2019 inand 2019.2018, respectivelyThe carrying while values impairment of goodwill of amountedWest Zone to concession P=15,337 million asset amounted and P=15,676 to P=11,417 million asmillion at in December2019. The 31,carrying 2020 andvalues 2019, of goodwill respectively amounted (see Note to P=15,337 11). The million aggregate and carryingP=15,676 millionvalue of as service at concessionDecember 31, assets 2020 not and yet 2019, available respectively for use amounted (see Note to11). =99,886P The aggregate million and carrying P=70,326 value million of service as at Decemberconcession 31, assets 2020 not and yet 2019, available respectively for use amounted (see Note to14). =99,886P million and P=70,326 million as at December 31, 2020 and 2019, respectively (see Note 14). Impairment of Nonfinancial Assets. Impairment review is performed when certain impairment indicators areImpairment present. ofDetermining Nonfinancial the Assets. recoverableImpairment value of review assets is requires performed the estimationwhen certain of cashimpairment flows expected indicators toare be present. generated Determining from the continued the recoverable use and value ultimate of assets disposition requires of the such estimation assets. 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 recoverable values reflected in the consolidatedWhile it is believed financial that statements the assumptions are appropriate used in theand estimation reasonable, of significant recoverable changes values inreflected these in the assumptionsconsolidated mayfinancial materially statements affect are the appropriate assessment and of recoverablereasonable, valuessignificant and anychanges resulting in these impairment lossassumptions could have may a materialmaterially adverse affect impactthe assessment on the results of recoverable of operations. values and any resulting impairment loss could have a material adverse impact on the results of operations. The carrying values of non-financial assets subject to impairment review when impairment indicators are presentThe carrying are as values follows: of non-financial assets subject to impairment review when impairment indicators are present are as follows: 2020 2019 2020 (In Millions) 2019 (In Millions) Service concession assets (see Note 12) P=275,864 P=240,489 InvestmentsService concession and advances assets (see(see NoteNote 12)10) P=275,864159,474 P=169,092240,489 Property,Investments plant and and advancesequipment(see (seeNote Note 10) 13) 159,4746,878 169,09258,591 IntangibleProperty, plant assets and(seeequipment Note 11) (see Note 13) 6,878705 58,5913,279 DeferredIntangible project assets costs*(see Note 11) 1,954705 1,1403,279 Deferred*Included under project “Other costs*noncurrent assets”. 1,954 1,140 *Included under “Other noncurrent assets”. In 2020, 2019 and 2018, impairment loss on nonfinancial assets (other than goodwill) amounted to P=1,518In 2020, million, 2019 and P=12,195 2018, millionimpairment and P=755loss on million, nonfinancial respectively assets (see(other Notes than 10, goodwill) 12 and 24).amounted to P=1,518 million, P=12,195 million and P=755 million, respectively (see Notes 10, 12 and 24). Estimated Useful Lives of Property, Plant and Equipment and Intangible Assets. The useful lives of each ofEstimated the item Useful of the Company’sLives of Property, property, Plant plant and and Equipment equipment and and Intangible intangible Assets. assets Theare estimateduseful lives based of each on theof the period item over of the which Company’s the asset property, is expected plant to and be availableequipment for and use. intangible Such estimation assets are is estimatedbased on abased on collectivethe period assessmentover which ofthe similar asset is businesses, expected to internal be available technical for evaluationuse. Such estimationand experience is based with on similar a assets.collective The assessment estimated ofuseful similar life businesses, of each asset internal is reviewed technical at each evaluation financial and year-end experience and withupdated similar if expectationsassets. The estimated differ from useful previous life of estimates each asset due is toreviewed physical at wear each and financial tear, technical year-end or and commercial updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial *SGVFSM006036*

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obsolescence and legal or other limits on the use of the asset. It is possible, however, that future results ofobsolescence operations couldand legal be materially or other limits affected on the by usechanges of the in asset. the amounts It is possible, and timing however, of recorded that future expenses results broughtof operations about could by changes be materially in the factors affected mentioned by changes above. in the A amounts reduction and in timingthe estimated of recorded useful expenses life of any thesebrought items about would by changes increase in the the recorded factors mentioneddepreciation above. and amortization A reduction expensein the estimated and decrease useful the life carrying of any valuesthese items of these would assets. increase the recorded depreciation and amortization expense and decrease the carrying values of these assets. There were no changes in the estimated useful lives of these assets for all the periods presented. There were no changes in the estimated useful lives of these assets for all the periods presented. Taxes. Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws,Taxes. andUncertainties the amount existand timing with respect of future to thetaxable interpretation income. Givenof complex the diversity tax regulations, of the Company’s changes in tax businesseslaws, and the and amount the long-term and timing nature of futureand complexity taxable income. of existing Given contractual the diversity agreements of the Company’s or the nature of thebusinesses business and itself, the changeslong-term in nature differences and complexity arising between of existing the actual contractual results agreementsand the assumptions or the nature made, of or futurethe business changes itself, to such changes assumptions, in differences could arising necessitate between future the adjustments actual results to andtax incomethe assumptions and expense made, or alreadyfuture changes recorded. to such The assumptions,Company establishes could necessitate provisions, future based adjustments on reasonable to tax estimates, income andfor possibleexpense consequencesalready recorded. of audits The Companyby the tax establishesauthorities provisions,under which based the Company on reasonable operates. estimates, The amount for possible of such provisionsconsequences is based of audits on various by the taxfactors, authorities such as under experience which ofthe previous Company tax operates. audits and The differing amount of such interpretationsprovisions is based of tax on regulations various factors, by the such taxable as experience entity and ofthe previous responsible tax auditstax authority. and differing Such differences ininterpretations interpretation of may tax regulationsarise for a wide by the variety taxable of entityissues anddepending the responsible on the conditions tax authority. prevailing Such differencesin the respectivein interpretation domicile may or arise to the for operations a wide variety of the of Company. 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 willDeferred be available tax assets against are recognized which the forlosses unused can betax utilized. losses to Significant the extent thatmanagement it is probable judgement that taxable is required profit towill determine be available the amountagainst whichof deferred the losses tax assets can be that utilized. can be recognized,Significant managementbased upon the judgement likely timing is required and theto determine level of future the amount taxable of profits deferred together tax assets with thatfuture can tax be planning recognized, strategies. based upon The thecarrying likely amount timing andof deferredthe level taxof future assets taxable is reviewed profits at togethereach end with of the future reporting tax planning period and strategies. reduced The to the carrying extent amountthat it is of no longerdeferred probable tax assets that is sufficientreviewed taxableat each incomeend of the will reporting be available period to andallow reduced all or part to the of extentthe deferred that it taxis no assetslonger toprobable be utilized. that sufficientThe Company taxable performs income an will annual be available evaluation to allow of the all realizability or part of theof deferreddeferred incometax taxassets assets to be in utilized. determining The theCompany portion performs of deferred an taxannual assets evaluation which should of the be realizability recognized. of Thedeferred Company’s income assessmenttax assets in on determining the recognition the portion of deferred of deferred income tax tax assets assets which on deductible should be temporary recognized. differences The Company’s is based onassessment the forecasted on the taxable recognition income of deferredof the following income periods.tax assets This on deductible forecast is temporary based on the differences Company’s is based past resultson the forecastedand future taxableexpectations income on of revenue the following and expenses. periods. This forecast is based on the Company’s past results and future expectations on revenue and expenses. Certain of the Company’s subsidiaries are entitled to income tax holiday period. The Company recognizedCertain of the deferred Company’s tax assets subsidiaries on deductible are entitled temporary to income differences tax holiday expected period. to reverse The Company after the income taxrecognized holiday deferredperiod, while tax assets deferred on deductible taxes on deductible temporary temporary differences differences expected toexpected reverse to after reverse the income during thetax holidayincome taxperiod, holiday while and deferred to items taxes where on doubtdeductible exists temporary as to the tax differences benefits theyexpected will bringto reverse in the during future, arethe notincome recognized. tax holiday and to items where doubt exists as to the tax benefits they will bring in the future, are not recognized. Deferred tax assets amounted to P=201 million and P=927 million as at December 31, 2020 and 2019, respectively.Deferred tax assets The Company’s amounted todeductible P=201 million temporary and P=927 difference, million includingas at December unused 31, NOLCO 2020 and and 2019, MCIT, forrespectively. which no deferredThe Company’s tax assets deductible have been temporary recognized difference, amounted including to P=17,895 unused million NOLCO and P=20,924 and MCIT, million asfor at which December no deferred 31, 2020 tax andassets 2019, have respectively been recognized (see Note amounted 26). to P=17,895 million and P=20,924 million as at December 31, 2020 and 2019, respectively (see Note 26). Long-Term Incentives Plan (LTIP). The LTIP for key executives of MPIC and certain subsidiaries Long-Termundergo approval Incentives by the Plan Compensation (LTIP). The Committee LTIP for key and executives the BOD andof MPIC is based and on certain profit subsidiaries targets for the coveredundergo performanceapproval by thecycle. Compensation The cost of Committee LTIP is determined and the BOD using and the is projected based on unit profit credit targets method for the basedcovered on performance prevailing discount cycle. Therates cost and of profit LTIP targets. is determined While management’susing the projected assumptions unit credit are method believed tobased be reasonable on prevailing and discount appropriate, rates significant and profit differencestargets. While in actual management’s results or assumptionschanges in assumptions are believed mayto be materially reasonable affect and appropriate, the Company’s significant other long-term differences incentive in actual benefits. results or changes in assumptions may materially affect the Company’s other long-term incentive benefits.

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LTIP expense from continuing operations for the years ended December 31, 2020, 2019 and 2018 amountedLTIP expense to =539P from million, continuing P=837 operations million and for =623P the years million, ended respectively, December and31, 2020,presented 2019 as and “Personnel 2018 amountedcosts and employeeto =539P million, benefits” P=837 under million “General and =623 Pand administrative million, respectively, expenses” and in presented the consolidated as “Personnel statementscosts and employee of comprehensive benefits” incomeunder “General (see Note and 23). administrative expenses” in the consolidated statements of comprehensive income (see Note 23). LTIP payable as at December 31, 2020 and 2019 amounted to =1,555P million and P=1,259 million, respectively,LTIP payable and as atis Decemberpresented under31, 2020 “Other and long-term2019 amounted liabilities” to =1,555P account million in the and consolidated P=1,259 million, statementsrespectively, of andfinancial is presented position. under “Other long-term liabilities” account in the consolidated statements of financial position. Provisions. The Company recognizes provisions based on estimates of whether it is probable that an outflowProvisions. of resourcesThe Company will be recognizes required to provisions settle an obligation. based on estimates Where the of whetherfinal outcome it is probable of these that an mattersoutflow isof different resources from will the be amountsrequired tothat settle were an initially obligation. recognized, Where suchthe final differences outcome will of theseimpact the financialmatters is performance different from in the amountscurrent period that were in which initially such recognized, determination such is differences made. 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 debtProvisions settlement mainly negotiations consist of andprovision certain for warranties estimated and expenses guarantees, related claims to the and concluded potential and claims ongoing againstdebt settlement the Company, negotiations provision and forcertain heavy warranties maintenance and guarantees,and decommissioning claims and liability. potential claims against the Company, provision for heavy maintenance and decommissioning liability. ƒ Heavy Maintenance. The provisions for the heavy maintenance require an estimation of the periodic ƒ cost,Heavy generally Maintenance. estimated The to provisions be every fivefor theto sevenheavy years maintenance or the expected require heavyan estimation maintenance of the dates,periodic to restorecost, generally the assets estimated to a level to of be serviceability every five to duringseven years the concession or the expected term andheavy in goodmaintenance condition dates, before to turnoverrestore the to assetsthe Grantor. to a level This of serviceabilityis based on the during best estimate the concession of management term and to in be good the conditionamount expected before toturnover be incurred to the to Grantor. settle the This obligation is based at on every the bestheavy estimate maintenance of management dates discounted to be the using amount a pre-tax expected rateto be that incurred reflects to thesettle current the obligation market assessment at every heavy of the maintenance time value of dates money discounted and the riskusing specific a pre-tax to the liability.rate that reflects the current market assessment of the time value of money and the risk specific to the liability. ƒ Decommissioning Liability. Certain of GBPC’s subsidiaries have legal obligations to decommission ƒ orDecommissioning dismantle the power Liability plant. Certainassets at of the GBPC’s end of subsidiariestheir estimated have useful legal lives. obligations The Company to decommission recognizesor dismantle the the present power value plant ofassets the obligationat the end toof dismantletheir estimated the power useful plant lives. assets The andCompany capitalizes the presentrecognizes value the of present this cost value as part of the of obligationthe balance to of dismantle the related the power power plant plant assets, assets which and capitalizes are being the depreciatedpresent value and of amortizedthis cost as on part a straight-line of the balance basis of theover related the useful power lives plant of assets,the related which assets. are being depreciated and amortized on a straight-line basis over the useful lives of the related assets. Cost estimates expressed at the current price levels at the date of the estimate are discounted using a rateCost of estimates interest rangingexpressed from at the 0.30% current and price 3.0% levels in 2020 at theand date 1.71% of theand estimate 3.37% in are 2019 discounted to take intousing a accountrate of interest the timing ranging of payments. from 0.30% Each and year, 3.0% the in provision2020 and is1.71% increased and 3.37% to reflect in 2019 accretion to take of intodiscount andaccount to accrue the timing an estimate of payments. for the effectsEach year, of inflation, the provision with chargesis increased being to recognized reflect accretion as accretion of discount expense,and to accrue included an estimate under “Interest for the effects expense” of inflation, in the consolidated with charges statements being recognized of comprehensive as accretion income. Changesexpense, inincluded the decommissioning under “Interest liabilityexpense” that in theresult consolidated from a change statements in the currentof comprehensive best estimate income. of cashChanges flow in required the decommissioning to settle the obligation liability orthat a changeresult from in the a changediscount in rate the arecurrent added best to estimate(or deducted of from)cash flow the amountrequired recognized to settle the as obligation the related or asset a change and the in theperiodic discount unwinding rate are ofadded the discount to (or deducted on the liabilityfrom) the is amountrecognized recognized in the consolidated as the related statements asset and ofthe comprehensive periodic unwinding income of asthe it discountoccurs. on the liability is recognized in the consolidated statements of comprehensive income as it occurs. While the Company has made its best estimate in establishing the decommissioning provision becauseWhile the of Company potential changeshas made in its the best technology estimate asin wellestablishing as safety the and decommissioning environmental requirements, provision plusbecause the actualof potential time scalechanges to complete in the technology decommissioning as well as activities, safety and the environmental ultimate provision requirements, requirementsplus the actual could time eitherscale toincrease complete or decreasedecommissioning significantly activities, from the the Company’s ultimate provision estimates. The amountsrequirements and timingcould eitherof recorded increase expenses or decrease for any significantly period would from be the affected Company’s by the estimates. changes in The these factorsamounts and and circumstances. timing of recorded expenses for any period would be affected by the changes in these factors and circumstances. Decommissioning liability as at December 31, 2020 and 2019 amounting to =924P million and P=614Decommissioning million is included liability in as “Liabilities at December under 31, PFRS 2020 and5” and 2019 “Provisions” amounting into the=924P consolidated million and statementsP=614 million of isfinancial included position, in “Liabilities repectively under (seePFRS Notes 5” and 16 “Provisions”and 33). in the consolidated statements of financial position, repectively (see Notes 16 and 33). *SGVFSM006036*

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Additional provisions including those arising from acquisitions (see Note 4), for the years ended The decrease in effective ownership in MUN was accounted for as an equity transaction in the DecemberAdditional 31,provisions 2020 and including 2019 amounted those arising to P=1,438 from millionacquisitions and P=3,708 (see Note million, 4), for respectively. the years ended Cumulative Theconsolidated decrease financialin effective statements ownership with in theMUN difference was accounted between for the as carrying an equity value transaction of the interest in the provisionsDecember 31,amounted 2020 and to P=10,1242019 amounted million toand P=1,438 P=11,739 million million and as P=3,708 at December million, 31, respectively. 2020 and 2019, Cumulative consolidateddisposed and financialthe total considerationstatements with received, the difference recognized between in equity. the carrying value of the interest respectivelyprovisions amounted (see Note to 16). P=10,124 million and P=11,739 million as at December 31, 2020 and 2019, disposed and the total consideration received, recognized in equity. respectively (see Note 16). (In Millions) Contingencies. Certain subsidiaries of the Parent Company are parties to certain lawsuits or claims Gross consideration received (In MilliP=1,775ons) arisingContingencies. from the Certainordinary subsidiaries course of business. of the Parent However, Company the Company’sare parties to management certain lawsuits and legalor claims GrossLess: considerationTransaction costs received P=1,775(93) counselarising from believe the thatordinary the eventual course ofliabilities business. under However, these lawsuits the Company’s or claims, management if any, will andnot legalhave a Less: CarryingTransaction value costs of net assets disposed (10.32%) (1,414)(93) materialcounsel believeeffect on that the the consolidated eventual liabilities financial under statements these lawsuits(see Note or 30). claims, if any, will not have a Less:Difference Carrying recognized value of in net equity assets reserves disposed (10.32%) (1,414)P=268 material effect on the consolidated financial statements (see Note 30). Difference recognized in equity reserves P=268 Disposition of 34.9% Interest in MPLRC by MPIC. On May 28, 2020, MPIC entered into an 4. Business Combinations and Changes in Non-controlling Interests Dispositionagreement with of 34.9% Sumitomo Interest Corporation in MPLRC (Sumitomo) by MPIC. On for Maythe acquisition 28, 2020, MPIC by Sumitomo entered intoof a an34.9% 4. Business Combinations and Changes in Non-controlling Interests agreementinterest in MPLRC.with Sumitomo MPLRC Corporation has an aggregate (Sumitomo) 55% interestfor the acquisition in LRMC. by Sumitomo of a 34.9% The Company’s intention is to maintain and continue to develop a diverse set of infrastructure assets interest in MPLRC. MPLRC has an aggregate 55% interest in LRMC. throughThe Company’s its investments intention in iswater, to maintain toll roads, and power continue distribution to develop and a diversegeneration, set of health infrastructure care services, assets Sumitomo is one of the largest Japanese trading and investment firms and is listed on the Tokyo rail,through logistics its investments and other businessesin water, toll that roads, complement power distribution the current andinfrastructure generation, business health care of the services, SumitomoStock Exchange. is one of the largest Japanese trading and investment firms and is listed on the Tokyo Company.rail, logistics The and Company other businesses is therefore that committed complement to theinvesting current through infrastructure acquisitions business and of strategic the Stock Exchange. partnershipsCompany. The in prime Company infrastructure is therefore assets committed with the to potential investing to through provide acquisitions synergies with and its strategic existing The decrease in effective ownership in MPLRC was accounted for as an equity transaction in the operations.partnerships Accordingly,in prime infrastructure the following assets transactions with the potential were entered to provide into in synergies 2020 and with 2019. its existing Theconsolidated decrease financialin effective statements ownership with in theMPLRC difference was accountedbetween the for carrying as an equity value transaction of the interest in the operations. Accordingly, the following transactions were entered into in 2020 and 2019. consolidateddisposed and financialthe total considerationstatements with received, the difference recognized between in equity. the carrying value of the interest Transactions in 2020 disposed and the total consideration received, recognized in equity. Transactions in 2020 (In Millions) Acquisition of NCI in PT Inpola Meka Energi (IME). On February 24, 2020, MPTC, through PT Gross consideration received (In Millions)P=3,044 AcquisitionEnergi Infranusantara of NCI in PT(EI), Inpola acquired Meka additional Energi (IME). 64,000 On shares February in IME 24, amounting 2020, MPTC, to IDR through 6.4 billion PT GrossLess: Transactionconsideration costs received P=3,044(75) (equivalentEnergi Infranusantara to approximately (EI), acquired P=21.9 million). additional This 64,000 transaction shares in resulted IME amounting to an increase to IDR in ownership6.4 billion Less: Transaction Carrying value costs of net assets disposed (2,779)(75) interest(equivalent from to 56.23% approximately to 61.23%. P=21.9 This million). was accounted This transaction for as an resulted equity transaction to an increase with in a ownership net premium Less:Difference Carrying recognized value of in net equity assetsreserves disposed (2,779)P=190 ofinterest IDR 4,373.0from 56.23% million to (equivalent 61.23%. This to approximately was accounted P=4.3 for asmillion) an equity recognized transaction in equity with a under net premium “Equity Difference recognized in equity reserves P=190 reserves”of IDR 4,373.0 account. million (equivalent to approximately P=4.3 million) recognized in equity under “Equity The agreement also provides for Sumitomo’s right to issue a put notice for all the MPLRC shares it reserves” account. Theowns agreement in the event also of provides a deadlock for (following Sumitomo’s unsuccessful right to issue mediation a put notice procedures) for all the and MPLRC in the event shares of it Disposition of 10.32% shares in PT Margautama Nusantara (MUN) by MPTC. On March 30, 2020, ownsMPIC’s in thedefault event on of its a obligationsdeadlock (following under the unsuccessfulshareholders’ mediation agreement. procedures) The exercise and pricein the for event the ofput DispositionMPTC, through of 10.32% its wholly shares owned in PT subsidiary, Margautama CIIF Nusantara Infrastructure (MUN) Holdings by MPTC. Sdn. Bhd.On March (CIIF), 30, entered 2020, MPIC’soption is default determined on its as obligations a percentage under of thethe fairshareholders’ value of the agreement. MPLRC shares The exercise (ranging price from for 87% the to put intoMPTC, a Share through Purchase its wholly Agreement owned withsubsidiary, West Nippon CIIF Infrastructure Expressway Holdings(NEXCO-West), Sdn. Bhd. Japan (CIIF), Expressway entered option100%) iswith determined the fair value as a percentagedetermination of the in accordancefair value of with the MPLRCthe shareholders’ shares (ranging agreement. from 87% to Internationalinto a Share Purchase Co., Ltd., Agreement (JEXWAY), with and West Japan Nippon Overseas Expressway Infrastructure (NEXCO-West), Investment CorporationJapan Expressway for 100%) with the fair value determination in accordance with the shareholders’ agreement. TransportInternational & UrbanCo., Ltd., Development (JEXWAY), (JOIN), and Japan for the Overseas partial acquisition Infrastructure by NEXCO-West,Investment Corporation JEXWAY for and The Company recognizes NCI, including an update to reflect allocations of profit or loss, allocations JOINTransport from & CIIF Urban of 10.32%Development MUN (JOIN),shares (the for the“Transaction”). partial acquisition The value by NEXCO-West, of the Transaction JEXWAY is and Theof changes Company in OCI recognizes and dividends NCI, including declared an for update the reporting to reflect period, allocations as required of profit by orPFRS loss, 10, allocations approximatelyJOIN from CIIF US$33.4 of 10.32% million MUN (equivalent shares (the to “Transaction”). P=1.7 billion). The value of the Transaction is ofConsolidated changes in FinancialOCI and dividends Statements declared. However, for the while reporting the put period, option as remains required unexercised, by PFRS 10, the approximately US$33.4 million (equivalent to P=1.7 billion). ConsolidatedCompany’s accounting Financial atStatements the end of. eachHowever, reporting while period the put is asoption follows: remains unexercised, the On April 29, 2020, MUN issued 278 new shares to PT Nusantara Infrastructure Tbk (PT Nusantara). Company’sa) Derecognition accounting of at thethe carryingend of each value reporting of the non-controlling period is as follows: interest as if NCI was acquired at OnThis April transaction 29, 2020, resulted MUN to issued a further 278 dilutionnew shares in MPTC’s to PT Nusantara effective Infrastructure ownership interest Tbk (PT from Nusantara). 82.20% to a) Derecognitionthat date; of the carrying value of the non-controlling interest as if NCI was acquired at This81.85% transaction and was resultedaccounted to afor further as an dilutionequity transaction. in MPTC’s Thiseffective transaction ownership was interestaccounted from for 82.20% as an to b) thatRecognition date; of a financial liability at the present value of the amount payable on exercise of 81.85%equity transaction and was accounted with a net for discount as an equity of IDR12,079.1 transaction. million This transaction(equivalent was to approximately accounted for as an b) Recognitionthe NCI put inof accordancea financial liabilitywith PFRS at the 9; andpresent value of the amount payable on exercise of equityP=36.3 million)transaction recognized with a net in discountequity under of IDR12,079.1 “Equity reserves”. million (equivalent to approximately c) theThe NCI difference put in accordancebetween (a) with and (b)PFRS as an9; andequity transaction. P=36.3 million) recognized in equity under “Equity reserves”. c) The difference between (a) and (b) as an equity transaction. Following the Transaction, on May 8, 2020, MPTC, through its indirect subsidiaries, CIIF disposed As at December 31, 2020, the option liability under “Accounts payable and other current liabilities” Following474 shares theor 10.32%Transaction, interest on inMay MUN. 8, 2020, This MPTC,transaction through resulted its indirect to a decrease subsidiaries, in MPTC’s CIIF effectivedisposed Asaccount at December amounting 31, to 2020, P=3,567 the millionoption liabilitywas recognized under “Accounts in relation payable to the NCI and putother option current (see liabilities” Note 15). 474ownership shares interestor 10.32% from interest 81.85% in MUN.to 71.53%. This transaction resulted to a decrease in MPTC’s effective accountThe difference amounting between to P=3,567 the financial million liabilitywas recognized and the non-controllingin relation to the interest NCI put attributable option (see to Note 15). ownership interest from 81.85% to 71.53%. TheSumitomo difference amounting between to the =916P financial million, liability was recognized and the non-controlling in equity reserve interest as at Decemberattributable 31, to 2020. Sumitomo amounting to =916P million, was recognized in equity reserve as at December 31, 2020. Acquisition of NCI in PNW. In 2020, MPW increased its ownership interest in PNW from 52.549% to Acquisition55.41% through of NCI subscription in PNW. Into 2020,additional MPW 3.5 increased million sharesits ownership for VND35 interest billion in PNW (P=74.9 from million). 52.549% to 55.41%MPW paid through VND5 subscription billion (P=10.8 to additional million) as 3.5 partial million payment shares forfor theVND35 subscription billion (P=74.9to the newmillion). shares. The MPWremaining paid VND30 VND5 billionbillion (P=10.8(P=64.1 million)million) aswas partial paid paymenton July 16, for 2020. the subscription to the new shares. The remaining VND30 billion (P=64.1 million) was paid on July 16, 2020. *SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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The decrease in effective ownership in MUN was accounted for as an equity transaction in the Theconsolidated decrease financialin effective statements ownership with in theMUN difference was accounted between for the as carrying an equity value transaction of the interest in the consolidateddisposed and financialthe total considerationstatements with received, the difference recognized between in equity. the carrying value of the interest disposed and the total consideration received, recognized in equity. (In Millions) Gross consideration received (In MilliP=1,775ons) GrossLess: considerationTransaction costs received P=1,775(93) Less: CarryingTransaction value costs of net assets disposed (10.32%) (1,414)(93) Less:Difference Carrying recognized value of in net equity assets reserves disposed (10.32%) (1,414)P=268 Difference recognized in equity reserves P=268 Disposition of 34.9% Interest in MPLRC by MPIC. On May 28, 2020, MPIC entered into an Dispositionagreement with of 34.9% Sumitomo Interest Corporation in MPLRC (Sumitomo) by MPIC. On for Maythe acquisition 28, 2020, MPIC by Sumitomo entered intoof a an34.9% agreementinterest in MPLRC.with Sumitomo MPLRC Corporation has an aggregate (Sumitomo) 55% interestfor the acquisition in LRMC. by Sumitomo of a 34.9% interest in MPLRC. MPLRC has an aggregate 55% interest in LRMC. Sumitomo is one of the largest Japanese trading and investment firms and is listed on the Tokyo SumitomoStock Exchange. is one of the largest Japanese trading and investment firms and is listed on the Tokyo Stock Exchange. The decrease in effective ownership in MPLRC was accounted for as an equity transaction in the Theconsolidated decrease financialin effective statements ownership with in theMPLRC difference was accountedbetween the for carrying as an equity value transaction of the interest in the consolidateddisposed and financialthe total considerationstatements with received, the difference recognized between in equity. the carrying value of the interest disposed and the total consideration received, recognized in equity. (In Millions) Gross consideration received (In Millions)P=3,044 GrossLess: Transactionconsideration costs received P=3,044(75) Less: Transaction Carrying value costs of net assets disposed (2,779)(75) Less:Difference Carrying recognized value of in net equity assetsreserves disposed (2,779)P=190 Difference recognized in equity reserves P=190 The agreement also provides for Sumitomo’s right to issue a put notice for all the MPLRC shares it Theowns agreement in the event also of provides a deadlock for (following Sumitomo’s unsuccessful right to issue mediation a put notice procedures) for all the and MPLRC in the event shares of it ownsMPIC’s in thedefault event on of its a obligationsdeadlock (following under the unsuccessfulshareholders’ mediation agreement. procedures) The exercise and pricein the for event the ofput MPIC’soption is default determined on its as obligations a percentage under of thethe fairshareholders’ value of the agreement. MPLRC shares The exercise (ranging price from for 87% the to put option100%) iswith determined the fair value as a percentagedetermination of the in accordancefair value of with the MPLRCthe shareholders’ shares (ranging agreement. from 87% to 100%) with the fair value determination in accordance with the shareholders’ agreement. The Company recognizes NCI, including an update to reflect allocations of profit or loss, allocations Theof changes Company in OCI recognizes and dividends NCI, including declared an for update the reporting to reflect period, allocations as required of profit by orPFRS loss, 10, allocations ofConsolidated changes in FinancialOCI and dividends Statements declared. However, for the while reporting the put period, option as remains required unexercised, by PFRS 10, the ConsolidatedCompany’s accounting Financial atStatements the end of. eachHowever, reporting while period the put is asoption follows: remains unexercised, the Company’sa) Derecognition accounting of at thethe carryingend of each value reporting of the non-controlling period is as follows: interest as if NCI was acquired at a) Derecognitionthat date; of the carrying value of the non-controlling interest as if NCI was acquired at b) thatRecognition date; of a financial liability at the present value of the amount payable on exercise of b) Recognitionthe NCI put inof accordancea financial liabilitywith PFRS at the 9; andpresent value of the amount payable on exercise of c) theThe NCI difference put in accordancebetween (a) with and (b)PFRS as an9; andequity transaction. c) The difference between (a) and (b) as an equity transaction. As at December 31, 2020, the option liability under “Accounts payable and other current liabilities” Asaccount at December amounting 31, to 2020, P=3,567 the millionoption liabilitywas recognized under “Accounts in relation payable to the NCI and putother option current (see liabilities” Note 15). accountThe difference amounting between to P=3,567 the financial million liabilitywas recognized and the non-controllingin relation to the interest NCI put attributable option (see to Note 15). TheSumitomo difference amounting between to the =916P financial million, liability was recognized and the non-controlling in equity reserve interest as at Decemberattributable 31, to 2020. Sumitomo amounting to =916P million, was recognized in equity reserve as at December 31, 2020. Acquisition of NCI in PNW. In 2020, MPW increased its ownership interest in PNW from 52.549% to 55.41%Acquisition through of NCI subscription in PNW. Into 2020,additional MPW 3.5 increased million sharesits ownership for VND35 interest billion in PNW (P=74.9 from million). 52.549% to MPW55.41% paid through VND5 subscription billion (P=10.8 to additional million) as 3.5 partial million payment shares forfor theVND35 subscription billion (P=74.9to the newmillion). shares. The remainingMPW paid VND30 VND5 billionbillion (P=10.8(P=64.1 million)million) aswas partial paid paymenton July 16, for 2020. the subscription to the new shares. The remaining VND30 billion (P=64.1 million) was paid on July 16, 2020. *SGVFSM006036* *SGVFSM006036*

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The increase in effective ownership in PNW was accounted for as an equity transaction in the Theconsolidated increase infinancial effective statements, ownership with in PNW the difference was accounted between for the as carryingan equity value transaction of the inadditional the consolidatedinterest acquired financial and the statements, total consideration with the difference paid, recognized between in the equity. carrying value of the additional interest acquired and the total consideration paid, recognized in equity. (In Millions) Gross consideration paid (In Millions)P=75 GrossLess: considerationCarrying valuepaid of net assets acquired P=(7205) Less:Difference Carryingrecognized value of in netequity assets reserves acquired P=(2055) Difference recognized in equity reserves P=55 Acquisition of NCI in NLEX Ventures Corp.(NVC). On December 29, 2020, MPTC acquired Acquisition2,000,000 shares of NCI of in stock NLEX representing Ventures Corp.(NVC). 100% ownershipOn Decemberof NVC for 29, a total2020, consideration MPTC acquired of 2,000,000P=544.0 million shares from of stock NLEX representing Corp, which 100% is 75.13% ownership owned of byNVC MPTC. for a totalIn addition, consideration NLEX of Corp. P=544.0assigned million stock subscriptionfrom NLEX rightsCorp, forwhich an additionalis 75.13% 1,000,000owned by sharesMPTC. to InMPTC addition, for aNLEX total Corp. assignedconsideration stock of subscription =200.0P million. rights for an additional 1,000,000 shares to MPTC for a total consideration of =200.0P million. This transaction was accounted for as an equity transaction with impact to “Non-controlling interest” Thisand “Equity transaction reserves” was accounted accounts foramounting as an equity to =144.1P transaction million with and impact P=111.2 to million “Non-controlling (net of P=32.9 interest” million andtransaction “Equity costs). reserves” accounts amounting to =144.1P million and P=111.2 million (net of P=32.9 million transaction costs). Acquisition of DibzTech, Inc. (Dibztech). On November 27, 2020, MPTC acquired 1,980,000 shares Acquisitionof stock representing of DibzTech, 100% Inc. ownership (Dibztech) of. DibztechOn November for a total27, 2020, consideration MPTC acquired of P=63.6 1,980,000 million, of shares ofwhich stock =55.1P representing million was100% paid ownership outright andof Dibztech the remaining for a total balance consideration of P=8.5 million of P=63.6 is included million, inof which“Accounts =55.1P payable million and was other paid current outright liabilities” and the remaining account as balance at December of P=8.5 31, million 2020. is Theincluded transaction in “Accountswas accounted payable for using and other the acquisition current liabilities” method underaccount PFRS as at 3, DecemberBusiness 31,Combinations 2020. The. transaction was accounted for using the acquisition method under PFRS 3, Business Combinations. Dibztech is a tech mobility service provider engaged in operation and maintenance of parking Dibztechfacilities withinis a tech Metro mobility Manila. service provider engaged in operation and maintenance of parking facilities within Metro Manila. The provisional fair values of the identifiable assets and liabilities as at the date of acquisition: The provisional fair values of the identifiable assets and liabilities as at the date of acquisition: Provisional ProvisionalValues (in Millions)Values Assets (in Millions) AssetsCash and cash equivalents P=1.0 CashReceivables and cash equivalents P=1.00.6 ReceivablesOther current assets 0.60.1 OtherProperty current and equipmentassets 0.13.6 PropertyIntangible and asset equipment 3.6− Intangible asset 5.3− Liabilities 5.3 LiabilitiesAccounts payable and other current liabilities 15.7 AccountsTotal identifiable payable netand assets other atcurrent fair value liabilities (10.4)15.7 TotalGoodwill identifiable arising onnet acquisition assets at fair (see value Note 11) (10.4)74.0 GoodwillConsideration arising transferred on acquisition (see Note 11) 74.063.6 ConsiderationIntercompany accounttransferred settled 63.6− IntercompanyTotal consideration account on settledacquisition P=63.6− Total consideration on acquisition P=63.6

*SGVFSM006036* *SGVFSM006036*

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The fair value of intangible asset (software) is provisional pending final valuation. The provisional goodwillThe fair value arising of fromintangible the acquisition asset (software) is attributable is provisional to synergies pending and final other valuation. benefits fromThe provisionalcombining goodwillthe assets arisingand activities from the of acquisitionDibztech to is MPTC. attributable None to of synergies the goodwill and other recognized benefits is fromexpected combining to be deductiblethe assets and for activitiesincome tax of purposes.Dibztech to MPTC. None of the goodwill recognized is expected to be deductible for income tax purposes. From the date of acquisition, Dibztech has contributed =2.2P million to the consolidated revenue and Fromnet loss the of date P=1.8 of million acquisition, to the Dibztech consolidated has contributednet income. =2.2P If the million combination to the consolidated had taken place revenue at the and beginningnet loss of ofP=1.8 2020, million contributions to the consolidated to the consolidated net income. revenue If the and combination consolidated had net taken income place would at the have beenbeginning P=14.4 of million 2020, andcontributions P=12.2 million, to the respectively, consolidated for revenue the year and ended consolidated December net 31, income 2020. would Total have beentransaction P=14.4 costmillion amounting and P=12.2 to =0.9Pmillion, million, respectively, has been for expensed the year and ended is included December as part31, 2020.of “General Total and transactionadministrative cost expenses” amounting account to =0.9P in million, the consolidated has been expensedstatement and of comprehensive is included as part income of “General and is part and ofadministrative operating cash expenses” flows for account the year in endedthe consolidated December statement31, 2020. of comprehensive income and is part of operating cash flows for the year ended December 31, 2020. Transactions in 2019 Transactions in 2019 Step Acquisition of BOO Phu Ninh Water Treatment Plant Joint Stock Company (PNW). On StepMay Acquisition14, 2018, MPW, of BOO through Phu Ninh its subsidiary Water Treatment Metro Pacific Plant WaterJoint Stock International Company Limited (PNW). (MPWIL),On Maycompleted 14, 2018, the acquisitionMPW, through of 45.0% its subsidiary of the outstanding Metro Pacific capital Water stock International of PNW. The Limited transaction (MPWIL), was completed thethrough acquisition the acquisition of 45.0% of of 9,900,000 the outstanding shares capitalfrom an stock existing of PNW. shareholder The transaction of PNW forwas completed272 billion throughVietnamese the acquisition Dong (VND) of 9,900,000(equivalent shares to =622P from million), an existing subject shareholder to price adjustment of PNW for 272through billion an escrowVietnamese mechanism Dong (VND) depending (equivalent on the fulfillment to =622P million), of certain subject conditions. to price Thisadjustment initial throughinvestment an escrowin PNW mechanism was accounted depending for as anon investmentthe fulfillment in an of associate certain conditions. (see Note 10). This initial investment in PNW was accounted for as an investment in an associate (see Note 10). Pursuant to a conditional Share Subscription Agreement dated March 21, 2019 which was completed Pursuanton September to a conditional 5, 2019, MPW Share acquired Subscription an additional Agreement 7.549% dated ownership March 21, interest 2019 whichfor =78P was million completed which onincreased September its shareholding 5, 2019, MPW from acquired 45.0% anto 52.549%.additional 7.549% ownership interest for =78P million which increased its shareholding from 45.0% to 52.549%. With MPW acquiring control over PNW, this transaction was accounted for using the acquisition Withmethod MPW under acquiring PFRS 3. control In accordance over PNW, with this PFRS transaction 3, PNW was was accounted fully consolidated for using from the acquisition methodSeptember under 5, 2019. PFRS 3. In accordance with PFRS 3, PNW was fully consolidated from September 5, 2019. Below are the fair values of the identifiable assets and liabilities as at the date of acquisition: Below are the fair values of the identifiable assets and liabilities as at the date of acquisition: Final ValuesFinal (In Millions)Values Assets (In Millions) AssetsCash and cash equivalents P=156 CashReceivables and cash equivalents P=15146 OtherReceivables current assets 1014 Property,Other current plant assets and equipment 106 ServiceProperty, concession plant and assetsequipment 1,7836 ServiceOther noncurrent concession assets assets 1,78314 Other noncurrent assets 1,98314 Liabilities 1,983 LiabilitiesAccounts payable and other current liabilities 237 AccountsLong-term payable debt (current and other and currentnoncurrent liabilities portions) 237824 DeferredLong-term tax debt liabilities (current and noncurrent portions) 137824 Deferred tax liabilities 1,198137 1,198 (Forward) (Forward) *SGVFSM006036* *SGVFSM006036*

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Final This indirect acquisition of equity interest in MUN through CIIF and CAIF III was in addition to the ValuesFinal existingThis indirect indirect acquisition equity interest of equity of MPTCinterest in in MUN MUN through through PT CIIF Metro and CAIFPacific III Tollwayswas in addition Indonesia to the (In Millions)Values existing(MPTC’s indirect wholly-owned equity interest Indonesian of MPTC subsidiary), in MUN which through holds PT an Metro equity Pacific interest Tollways of 75.89% Indonesia of PT Total identifiable net assets at fair value (In Millions)P=785 (MPTC’sNusantara, wholly-owned which then holds Indonesian 74.98% subsidiary), equity interest which in MUN. holds an The equity resulting interest effective of 75.89% ownership of PT of NoncontrollingTotal identifiable interest net assets at fair value P=(372)785 Nusantara,MPTC in MUN which after then the holds transaction 74.98% isequity 81.88%. interest in MUN. The resulting effective ownership of FairNoncontrolling value of previously interest held interest (454)(372) MPTC in MUN after the transaction is 81.88%. FairGoodwill value arisingof previously on acquisition held interest (454)119 The increase in effective ownership in MUN is accounted for as an equity transaction in the CashGoodwill transferred arising on acquisition P=11978 Theconsolidated increase infinancial effective statements ownership with in MUNthe difference is accounted between for asthe an carrying equity transactionvalue of the in additional the Cash transferred P=78 consolidatedinterest acquired financial and the statements total consideration with the difference recognized between in equity: the carrying value of the additional The fair value and gross amount of the receivables amounted to =14P million. The non-controlling interest acquired and the total consideration recognized in equity: interestThe fair representingvalue and gross the minorityamount of shareholders the receivables who amounted did not participate to =14P million. in the additional The non-controlling shares (In Millions) Total consideration P=3,487 interestsubscription representing was measured the minority at the correspondingshareholders who proportionate did not participate share in inPNW the additionalnet assets measuredshares as at (In Millions) acquisitionsubscription date. was measured at the corresponding proportionate share in PNW net assets measured as at TotalCarrying consideration value of net assets acquired (24.98%) P=(3,0013,487) acquisition date. CarryingDifference value recognized of net ass in etsequity acquired reserves (24.98%) (3,001P=486) Net cash inflow on acquisition is as follows: Difference recognized in equity reserves P=486 Net cash inflow on acquisition is as follows: Acquisition of Southbend Express Services Inc. (SESI). On February 26, 2019, Metro Pacific (In Millions) AcquisitionTollways Management of Southbend Services Express Inc. Services (MPTMSI), Inc. (SESI) a wholly-owned. On February subsidiary 26, 2019, of Metro MPTC, Pacific acquired Cash acquired with the subsidiary(a) (In Millions)P=156 Tollways100% of SESI Management for a purchase Services price Inc. of (MPTMSI), =93P million. a wholly-ownedSESI is engaged subsidiary in providing of MPTC, manpower acquired services TotalCash acquiredcash transferred with the subsidiary(a) P=15(78)6 100%to public of SESIand private for a purchase offices, industrial,price of =93P commercial million. SESI and other is engaged establishments. in providing The manpower transaction services was NetTotal cash cash inflow transferred P=(78)78 toaccounted public and for privateusing the offices, acquisition industrial, method commercial under PFRS and 3.other establishments. The transaction was Net(a) Cash cash acquired inflow with the subsidiary is included in cash flows from investing activities. P=78 accounted for using the acquisition method under PFRS 3. (a) Cash acquired with the subsidiary is included in cash flows from investing activities. The final fair values of the identifiable assets and liabilities as at the date of acquisition: The net assets recognized in the December 31, 2019 consolidated financial statements were based on The final fair values of the identifiable assets and liabilities as at the date of acquisition: aThe provisional net assets assessment recognized of in fair the valueDecember while 31, MPW 2019 sought consolidated an independent financial valuation statements for were the assets based ofon Fair Values thea provisional acquired businesses. assessment Theof fair valuation value while had not MPW been sought completed an independent by the date valuation the 2019 forconsolidated the assets of Fair(in Millions)Values financialthe acquired statements businesses. were The approved valuation for hadissue not by been the BOD. completed by the date the 2019 consolidated Assets (in Millions) financial statements were approved for issue by the BOD. AssetsCash and cash equivalents P=3 In 2020, the valuation was completed. Based on the final valuation, there were changes in the fair CashReceivables and cash equivalents P=363 valuesIn 2020, of the the valuation following was accounts completed. which Basedprovisional on the fair final values valuation, are as therefollows: were (i) changes service in concession the fair ReceivablesOther current assets 363 assetsvalues amountingof the following to =1,363P accounts million; which (ii) provisionaldeferred tax fair liability values amounting are as follows: to =53P (i) million; service and concession (iii) OtherProperty, current plant assets and equipment 36 assetsgoodwill amounting amounting to =1,363Pto =295P million; million (ii)(see deferred Note 11). tax liability amounting to =53P million; and (iii) Property,Other noncurrent plant and assets equipment 166 goodwill amounting to =295P million (see Note 11). Other noncurrent assets 1664 The goodwill is attributable to the synergies and other benefits from combining the assets and Liabilities 64 activitiesThe goodwill of PNW is attributable to the Company. to the synergies None of theand goodwill other benefits recognized from combiningis expected the to beassets deductible and for LiabilitiesAccounts payable and other current liabilities 21 incomeactivities tax of purposes. PNW to the Company. None of the goodwill recognized is expected to be deductible for AccountsLong-term payable debt (current and other and currentnoncurrent liabilities portions) 213 income tax purposes. LongOther- termlong -debtterm (currentliabilities and noncurrent portions) 213 PNW started supplying water in July 2019. If the step acquisition had taken place at the beginning of Other long-term liabilities 2145 2019,PNW startedgross revenue supplying contribution water in July would 2019. have If beenthe step P=0.5 acquisition million for had the taken year placeended at the beginning of Total identifiable net assets at fair value 4519 December2019, gross 31, revenue 2019. contributionSince this is woulda step acquisition,have been P=0.5 the incrementalmillion for the contribution year ended to the net income TotalGoodwill identifiable arising onnet acquisition assets at fair(see value Note 11) 1942 Decemberattributable 31, to MPW2019. Since(pertaining this is to a stepthe additional acquisition, 7.549% the incremental effective ownership contribution interest to the in net PNW) income for GoodwillConsideration arising transferred on acquisition (see Note 11) 4261 theattributable year ended to MPWDecember (pertaining 31, 2019 to theamounted additional to P=0.5 7.549% million effective net income ownership from interestdate of acquisitionin PNW) for and Intercompany account settled 32 P=0.8the year million ended net December loss had the31, transaction 2019 amounted taken to place P=0.5 at million the beginning net income of 2019. from date of acquisition and Consideration transferred 61 Total consideration on acquisition P=93 P=0.8 million net loss had the transaction taken place at the beginning of 2019. Intercompany account settled 32 Acquisition of NCI in MUN. On September 23, 2019, MPTC, through its Singaporean subsidiary, Total consideration on acquisition P=93 MetroAcquisition Pacific of TollwaysNCI in MUN Asia,. On Corporation September Pte. 23, Ltd. 2019, (MPT MPTC, Asia), through acquired its Singaporean100% equity subsidiary, interest in The fair value and gross amount of the receivables amounted to =36P million. None of the receivables eachMetro of Pacific CIIF and Tollways CAIF IIIAsia, Infrastructure Corporation Holdings Pte. Ltd. Sdn (MPT Bhd Asia), (CAIF acquired III), respectively. 100% equity Each interest of CIIF in Thehave fair been value impaired and gross and itamount is expected of the that receivables the full contractual amounted toamounts =36P million. can be Nonecollected. of the receivables andeach CAIF of CIIF III andholds CAIF 20% III and Infrastructure 4.98% (or an Holdings aggregate Sdn of Bhd24.98%) (CAIF equity III), respectively.interest in MUN, Each respectively. of CIIF have been impaired and it is expected that the full contractual amounts can be collected. MUNand CAIF is a privateIII holds company 20% and in 4.98% Indonesia (or an engaged aggregate in the of 24.98%)development equity and interest operation in MUN, of toll respectively. roads. The goodwill of P=42 million that arose on the acquisition is attributed to the expected synergies MUN currentlyis a private manages company four in strategicIndonesia toll engaged roads inin Indonesia.the development and operation of toll roads. Thearising goodwill from the of acquisition.P=42 million thatNone arose of the on goodwill the acquisition recognized is attributed is expected to the to expected be deductible synergies for MUN currently manages four strategic toll roads in Indonesia. arisingincome fromtax purposes. the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

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This indirect acquisition of equity interest in MUN through CIIF and CAIF III was in addition to the existingThis indirect indirect acquisition equity interest of equity of MPTCinterest in in MUN MUN through through PT CIIF Metro and CAIFPacific III Tollwayswas in addition Indonesia to the (MPTC’sexisting indirect wholly-owned equity interest Indonesian of MPTC subsidiary), in MUN which through holds PT an Metro equity Pacific interest Tollways of 75.89% Indonesia of PT Nusantara,(MPTC’s wholly-owned which then holds Indonesian 74.98% subsidiary), equity interest which in MUN. holds an The equity resulting interest effective of 75.89% ownership of PT of MPTCNusantara, in MUN which after then the holds transaction 74.98% isequity 81.88%. interest in MUN. The resulting effective ownership of MPTC in MUN after the transaction is 81.88%. The increase in effective ownership in MUN is accounted for as an equity transaction in the consolidatedThe increase infinancial effective statements ownership with in MUNthe difference is accounted between for asthe an carrying equity transactionvalue of the in additional the interestconsolidated acquired financial and the statements total consideration with the difference recognized between in equity: the carrying value of the additional interest acquired and the total consideration recognized in equity: (In Millions) Total consideration (In Millions)P=3,487 TotalCarrying consideration value of net assets acquired (24.98%) P=(3,0013,487) CarryingDifference value recognized of net ass in etsequity acquired reserves (24.98%) (3,001P=486) Difference recognized in equity reserves P=486 Acquisition of Southbend Express Services Inc. (SESI). On February 26, 2019, Metro Pacific TollwaysAcquisition Management of Southbend Services Express Inc. Services (MPTMSI), Inc. (SESI) a wholly-owned. On February subsidiary 26, 2019, of Metro MPTC, Pacific acquired Tollways100% of SESI Management for a purchase Services price Inc. of (MPTMSI), =93P million. a wholly-ownedSESI is engaged subsidiary in providing of MPTC, manpower acquired services to100% public of SESIand private for a purchase offices, industrial,price of =93P commercial million. SESI and other is engaged establishments. in providing The manpower transaction services was toaccounted public and for privateusing the offices, acquisition industrial, method commercial under PFRS and 3.other establishments. The transaction was accounted for using the acquisition method under PFRS 3. The final fair values of the identifiable assets and liabilities as at the date of acquisition: The final fair values of the identifiable assets and liabilities as at the date of acquisition: Fair Values Fair(in Millions)Values Assets (in Millions) AssetsCash and cash equivalents P=3 CashReceivables and cash equivalents P=363 ReceivablesOther current assets 363 OtherProperty, current plant assets and equipment 36 Property,Other noncurrent plant and assets equipment 166 Other noncurrent assets 1664 Liabilities 64 LiabilitiesAccounts payable and other current liabilities 21 AccountsLong-term payable debt (current and other and currentnoncurrent liabilities portions) 213 LongOther- termlong -debtterm (currentliabilities and noncurrent portions) 213 Other long-term liabilities 2145 Total identifiable net assets at fair value 4519 TotalGoodwill identifiable arising onnet acquisition assets at fair(see value Note 11) 1942 GoodwillConsideration arising transferred on acquisition (see Note 11) 4261 ConsiderationIntercompany accounttransferredsettled 6132 IntercompanyTotal consideration account on settledacquisition P=3293 Total consideration on acquisition P=93 The fair value and gross amount of the receivables amounted to =36P million. None of the receivables haveThe fair been value impaired and gross and itamount is expected of the that receivables the full contractual amounted toamounts =36P million. can be Nonecollected. of the receivables have been impaired and it is expected that the full contractual amounts can be collected. The goodwill of P=42 million that arose on the acquisition is attributed to the expected synergies Thearising goodwill from the of acquisition.P=42 million thatNone arose of the on goodwill the acquisition recognized is attributed is expected to the to expected be deductible synergies for arisingincome fromtax purposes. the acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes.

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From the date of acquisition, SESI contributed consolidated revenue of P=94 million after elimination. March 25, 2020, while Cebu City imposed its own ECQ measure starting March 28, 2020. ECQ is FromSESI derivesthe date most of acquisition, of its revenues SESI from contributed its services consolidated to NLEX revenue Corp., CIC of P=94 and million MPT MSI after and elimination. therefore effectivelyMarch 25, 2020,a total while lockdown, Cebu Cityrestricting imposed the itsmovement own ECQ of measure the population starting in March response 28, to2020. the growing ECQ is SESIeliminated derives at mostconsolidated of its revenues level. Meanwhile, from its services the contribution to NLEX Corp., to the CICconsolidated and MPT net MSI income and therefore pandemiceffectively of a totalcoronavirus lockdown, disease restricting 2019 (COVID-19) the movement in ofthe the country. population Lockdown in response restrictions to the growing eliminatedamounted to at =89Pconsolidated million net level. loss Meanwhile, for the year theended contribution December to 31, the 2019. consolidated If the combination net income had temporarilypandemic of disrupted coronavirus capacity disease to 2019read water(COVID-19) and electric in the meters country. and Lockdown limited ability restrictions to collect takenamounted place to at =89P the millionbeginning net ofloss 2019, for thecontributions year ended to December the consolidated 31, 2019. revenue If the andcombination consolidated had net paymentstemporarily from disrupted customers. capacity to read water and electric meters and limited ability to collect takenincome place would at thehave beginning been =108P of million2019, contributions of revenue and to the =110P consolidated million of revenuenet loss forand the consolidated year ended net payments from customers. Decemberincome would 31, 2019.have been Total =108P transaction million costof revenue amounting and =110Pto =0.2P million million, of nethas lossbeen for expensed the year and ended is The National Capital Region (NCR) was then placed under general community quarantine (GCQ) Decemberincluded in 31, the 2019. “General Total and transaction administrative cost amountingexpenses” toin =0.2Pthe consolidated million, has statementbeen expensed of and is startingThe National June 1,Capital 2020. Region Likewise, (NCR) Davao was City, then Regionplaced underII, Region general III, communityRegion IVA, quarantine Pangasinan (GCQ) and includedcomprehensive in the “Generalincome and and is administrative part of operating expenses” cash flows in the for consolidated the year ended statement December of 31, 2019. Albaystarting were June placed 1, 2020. under Likewise, GCQ. TheDavao rest City, of the Region country II, wasRegion placed III, underRegion modified IVA, Pangasinan general and comprehensive income and is part of operating cash flows for the year ended December 31, 2019. communityAlbay were quarantineplaced under (MGCQ). GCQ. The GCQ rest is ofthe the implementation country was placed of temporary under modified measures general limiting Other Acquisitions of NCI. The Company increased its ownership interest in the following entities: movementcommunity and quarantine transportation, (MGCQ). and GCQ regulation is the implementationof operating industries. of temporary MGCQ, measures on the limitingother hand, Otherx AcquisitionsIn February of 2019, NCI. MPHHIThe Company acquired increased an additional its ownership 35,674 commoninterest in shares the following of De Los entities: Santos refersmovement to the and transition transportation, between and GCQ regulation and the Newof operating Normal, industries. when the temporaryMGCQ, on measures the other are hand, relaxed x InMedical February Center 2019, Inc. MPHHI (DLSMC) acquired which an increased additional its 35,674 ownership common interest shares from of 58% De Los to 61%. Santos andrefers become to the transitionless necessary. between GCQ and the New Normal, when the temporary measures are relaxed MedicalTotal consideration Center Inc. for(DLSMC) the acquisition which increasedof NCI amounted its ownership to P=18 interest million. from 58% to 61%. and become less necessary. x TotalIn May consideration 2019, PT Energi for the Infranusantara acquisition of acquired NCI amounted an additional to P=18 228,000 million. shares of PT Inpola However, on August 4, 2020, NCR, Bulacan, Cavite, Laguna and Rizal were placed back to a stricter x InMeka May Energi 2019, whichPT Energi increased Infranusantara its ownership acquired interest an additionalfrom 54.6% 228,000 to 56.2%. shares Total of PT Inpola “modifiedHowever, onenhanced August community4, 2020, NCR, quarantine” Bulacan, (MECQ) Cavite, Laguna after an and appeal Rizal made were by placed medical back societies to a stricter led Mekaconsideration Energi whichfor the increased transaction its amountedownership to interest IDR22.8 from billion 54.6% (P=84 to 56.2%.million). Total by“modified the Philippine enhanced College community of Physicians quarantine” to place (MECQ) NCR underafter an ECQ appeal due made to rising by medicalCOVID-19 societies cases. led On x considerationIn June 2019, forPT thePotum transaction Mundi Infranusantara amounted to IDR22.8 agreed to billion purchase (P=84 24,000 million). shares of PT Dain Augustby the Philippine 19, 2020, Collegethe said ofcities Physicians and municipalities to place NCR were under transitioned ECQ due back to rising to GCQ COVID-19 after the cases. On x InCelicani June 2019, Cemerlang PT Potum (DCC) Mundi at a purchaseInfranusantara price agreedof IDR3.7 to purchase billion (P =1424,000 million). shares Theof PT Dain recommendationAugust 19, 2020, ofthe the said local cities authorities. and municipalities were transitioned back to GCQ after the Celicaniacquisition Cemerlang of NCI resulted (DCC) toat increasea purchase in priceownership of IDR3.7 in DCC billion from (P =1451.0% million). to 74.5%. The recommendation of the local authorities. x acquisitionIn December of 2019, NCI resultedMPTC, tothrough increase MUN, in ownership acquired 390,000in DCC fromshares 51.0% of PT to Bosowa 74.5%. Marga As at March 19, 2021, Metro Manila remains under GCQ. x InNusantara December (BMN) 2019, amountingMPTC, through to IDR MUN, 390.0 acquired billion (equivalent 390,000 shares to approximately of PT Bosowa Marga As at March 19, 2021, Metro Manila remains under GCQ. NusantaraP=1,428.1 million). (BMN) amountingThis transaction to IDR resulted 390.0 billionto an increase (equivalent in ownership to approximately interest from 98.53% For operations outside of the Philippines, governments of Indonesia, Vietnam and Thailand have P=1,428.1to 99.46%. million). This was This accounted transaction for asresulted an equity to an transaction increase in with ownership a net discount interest of from IDR 98.53% 2.6 declaredFor operations states outsideof national of the emergency Philippines, (SONE). governments of Indonesia, Vietnam and Thailand have tobillion 99.46%. (equivalent This was to approximatelyaccounted for as=9.5P an equitymillion). transaction with a net discount of IDR 2.6 declared states of national emergency (SONE). x billionIn December (equivalent 2019, to PT approximately MPTI acquired =9.5P 72,219,200 million). million shares from the public ƒ The governor of Indonesia’s capital Jakarta declared a two-week state of emergency in the city on ƒ The governor of Indonesia’s capital Jakarta declared a two-week state of emergency in the city on x Inrepresenting December 0.42%2019, PTof PT MPTI Nusantara’s acquired issued72,219,200 capital. million As at shares December from 31,the 2019,public PT MPTI’s March 20, 2020, weeks ahead before the declaration of SONE of the president of Indonesia March 20, 2020, weeks ahead before the declaration of SONE of the president of Indonesia representingownership interest 0.42% increased of PT Nusantara’s from 75.89% issued to 76.31%capital. (onAs atthe December basis of issued 31, 2019, and outstandingPT MPTI’s starting March 31, 2020 with toll roads, public transportation and airports remaining open. The starting March 31, 2020 with toll roads, public transportation and airports remaining open. The ownershipshares). This interest was accountedincreased fromfor as 75.89% an equity to transaction76.31% (on with the basisa net ofdiscount issued ofand outstanding country started to lift the restrictions on May 29, 2020. country started to lift the restrictions on May 29, 2020. shares).IDR 0.3 billionThis was (equivalent accounted to for approximately as an equity =1.1Ptransaction million). with a net discount of ƒ Vietnam introduced social isolation measures on April 1, 2020 with factories and establishments IDR 0.3 billion (equivalent to approximately =1.1P million). ƒ The increases in effective ownership in these companies were accounted for as equity transactions. providingVietnam introduced essential goods social remaining isolation measures operational on andApril was 1, lifted2020 withon April factories 22, 2020 and butestablishments continued to providing essential goods remaining operational and was lifted on April 22, 2020 but continued to The increases in effective ownership in these companies were accounted for as equity transactions. take precautions by limiting the gathering of people and mandating the wearing of face masks. Bytake end precautions of July 2020, by limiting with new the coronavirus gathering of outbreak, people and social mandating distancing the measureswearing of were face applied masks. By end of July 2020, with new coronavirus outbreak, social distancing measures were applied 5. Operating Segment Information again for affected provinces in the central and north of Vietnam until end of August 2020. With theagain second for affected COVID-19 provinces outbreak in the brought central under and north control, of Vietnamthe affected until provinces end of August eased 2020.social With 5. Operating Segment Information An operating segment is a component of the Company that engages in business activities from which distancingthe second restrictionsCOVID-19 andoutbreak all passenger brought transportationunder control, andthe affectedbusiness provincesenterprises eased have social resumed itAn may operating earn revenue segment and is incura component expenses, of whosethe Company operating that results engages are inregularly business reviewed activities by from the which operations.distancing restrictions On January and 28, all2021, passenger the third transportation COVID-19 outbreakand business began. enterprises Entire Hai have Duong resumed Company’sit may earn revenuechief operating and incur decision expenses, maker whose who operating makes decisions results areabout regularly how resources reviewed are by to the be provinceoperations. applied On January social 28,isolation 2021, for the 15 third days COVID-19 while Hanoi outbreak and Ho began. Chi Minh Entire City Hai stopped Duong all allocatedCompany’s to chiefthe segment operating and decision assesses maker its performance, who makes and decisions for which about discrete how resources financial areinformation to be is entertainmentprovince applied activities social isolationstarting February for 15 days 15, while2021. Hanoi and Ho Chi Minh City stopped all available.allocated to the segment and assesses its performance, and for which discrete financial information is entertainment activities starting February 15, 2021. available. ƒ Thailand was put into a state of emergency starting March 26, 2020, with land borders with For management purposes, the Company is organized into the following segments based on services ƒ adjacentThailand countrieswas put into ordered a state closed. of emergency The country starting started March to gradually 26, 2020, lift with the land restrictions borders on with andFor managementproducts namely: purposes, power, the toll Company operations, is organized water, healthcare, into the following rail, logistics segments and others based (see on servicesNote 1). Mayadjacent 3, 2020 countries and eased ordered it further closed. starting The country June 1, started 2020. to However, gradually the lift Thai the restrictionsgovernment on extended However,and products given namely: that the power, logistics toll businessoperations, does water, not yethealthcare, meet the rail, quantitative logistics thresholdsand others to(see qualify Note as1). itsMay state 3, 2020of emergency and eased until it further November starting 30, June 2020 1, despite 2020. However,the lockdown the Thaieasing. government By the end extended of anHowever, operating given segment, that the the logistics results ofbusiness the logistics does not operations yet meet are the included quantitative in the thresholds ‘other businesses’ to qualify as Decemberits state of 2020,emergency a new until wave November of COVID-19 30, 2020 outbreak despite emerged, the lockdown which easing.resulted By the the government end of to column.an operating segment, the results of the logistics operations are included in the ‘other businesses’ imposeDecember new 2020, restrictions a new wave such asof COVID-19widespread outbreakshutdown, emerged, including which schools, resulted bars theand government other to column. entertainmentimpose new restrictions venues, massage such as andwidespread beauty parlors shutdown, and departmentincluding schools, stores and bars checkpoints and other at entry Impact of COVID-19 to MPIC’s Businesses and Operations. On March 16, 2020, the Philippine andentertainment exit points venues, to some massage provinces and seeking beauty to parlors prevent and further department spread stores of the and virus. checkpoints On February at entry 1, GovernmentImpact of COVID-19 declared tothe MPIC’s entire Luzon Businesses area inand the Operations. Philippines Onunder March an “enhanced 16, 2020, communitythe Philippine 2021,and exit the points country to somestarted provinces to lift the seeking restrictions to prevent in most further provinces. spread of the virus. On February 1, quarantine”Government (ECQ). declared In the other entire parts Luzon of the area country, in the IloiloPhilippines province under and an Iloilo “enhanced City imposed community an ECQ in 2021, the country started to lift the restrictions in most provinces. theirquarantine” jurisdictions (ECQ). starting In other March parts 21, of 2020.the country, Cebu provinceIloilo province was placed and Iloilo under City an ECQimposed on an ECQ in their jurisdictions starting March 21, 2020. Cebu province was placed under an ECQ on *SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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March 25, 2020, while Cebu City imposed its own ECQ measure starting March 28, 2020. ECQ is effectivelyMarch 25, 2020,a total while lockdown, Cebu Cityrestricting imposed the itsmovement own ECQ of measure the population starting in March response 28, to2020. the growing ECQ is pandemiceffectively of a totalcoronavirus lockdown, disease restricting 2019 (COVID-19) the movement in ofthe the country. population Lockdown in response restrictions to the growing temporarilypandemic of disrupted coronavirus capacity disease to 2019read water(COVID-19) and electric in the meters country. and Lockdown limited ability restrictions to collect paymentstemporarily from disrupted customers. capacity to read water and electric meters and limited ability to collect payments from customers. The National Capital Region (NCR) was then placed under general community quarantine (GCQ) startingThe National June 1,Capital 2020. Region Likewise, (NCR) Davao was City, then Regionplaced underII, Region general III, communityRegion IVA, quarantine Pangasinan (GCQ) and Albaystarting were June placed 1, 2020. under Likewise, GCQ. TheDavao rest City, of the Region country II, wasRegion placed III, underRegion modified IVA, Pangasinan general and communityAlbay were quarantineplaced under (MGCQ). GCQ. The GCQ rest is ofthe the implementation country was placed of temporary under modified measures general limiting movementcommunity and quarantine transportation, (MGCQ). and GCQ regulation is the implementationof operating industries. of temporary MGCQ, measures on the limitingother hand, refersmovement to the and transition transportation, between and GCQ regulation and the Newof operating Normal, industries. when the temporaryMGCQ, on measures the other are hand, relaxed andrefers become to the transitionless necessary. between GCQ and the New Normal, when the temporary measures are relaxed and become less necessary. However, on August 4, 2020, NCR, Bulacan, Cavite, Laguna and Rizal were placed back to a stricter “modifiedHowever, onenhanced August community4, 2020, NCR, quarantine” Bulacan, (MECQ) Cavite, Laguna after an and appeal Rizal made were by placed medical back societies to a stricter led by“modified the Philippine enhanced College community of Physicians quarantine” to place (MECQ) NCR underafter an ECQ appeal due made to rising by medicalCOVID-19 societies cases. led On Augustby the Philippine 19, 2020, Collegethe said ofcities Physicians and municipalities to place NCR were under transitioned ECQ due back to rising to GCQ COVID-19 after the cases. On recommendationAugust 19, 2020, ofthe the said local cities authorities. and municipalities were transitioned back to GCQ after the recommendation of the local authorities. As at March 19, 2021, Metro Manila remains under GCQ. As at March 19, 2021, Metro Manila remains under GCQ. For operations outside of the Philippines, governments of Indonesia, Vietnam and Thailand have declaredFor operations states outsideof national of the emergency Philippines, (SONE). governments of Indonesia, Vietnam and Thailand have declared states of national emergency (SONE). ƒ The governor of Indonesia’s capital Jakarta declared a two-week state of emergency in the city on ƒ MarchThe governor 20, 2020, of Indonesia’sweeks ahead capital before Jakarta the declaration declared ofa two-week SONE of statethe president of emergency of Indonesia in the city on startingMarch 20, March 2020, 31, weeks 2020 ahead with toll before roads, the public declaration transportation of SONE and of theairports president remaining of Indonesia open. The countrystarting Marchstarted 31,to lift 2020 the with restrictions toll roads, on Maypublic 29, transportation 2020. and airports remaining open. The country started to lift the restrictions on May 29, 2020. ƒ Vietnam introduced social isolation measures on April 1, 2020 with factories and establishments ƒ providingVietnam introduced essential goods social remaining isolation measures operational on andApril was 1, lifted2020 withon April factories 22, 2020 and butestablishments continued to takeproviding precautions essential by goodslimiting remaining the gathering operational of people and andwas mandating lifted on April the wearing 22, 2020 of but face continued masks. to Bytake end precautions of July 2020, by limiting with new the coronavirus gathering of outbreak, people and social mandating distancing the measureswearing of were face applied masks. againBy end for of affected July 2020, provinces with new in thecoronavirus central and outbreak, north of social Vietnam distancing until end measures of August were 2020. applied With theagain second for affected COVID-19 provinces outbreak in the brought central under and north control, of Vietnamthe affected until provinces end of August eased 2020.social With distancingthe second restrictionsCOVID-19 andoutbreak all passenger brought transportationunder control, andthe affectedbusiness provincesenterprises eased have social resumed operations.distancing restrictions On January and 28, all2021, passenger the third transportation COVID-19 outbreakand business began. enterprises Entire Hai have Duong resumed provinceoperations. applied On January social 28,isolation 2021, for the 15 third days COVID-19 while Hanoi outbreak and Ho began. Chi Minh Entire City Hai stopped Duong all entertainmentprovince applied activities social isolationstarting February for 15 days 15, while2021. Hanoi and Ho Chi Minh City stopped all entertainment activities starting February 15, 2021. ƒ Thailand was put into a state of emergency starting March 26, 2020, with land borders with ƒ adjacentThailand countrieswas put into ordered a state closed. of emergency The country starting started March to gradually 26, 2020, lift with the land restrictions borders on with Mayadjacent 3, 2020 countries and eased ordered it further closed. starting The country June 1, started 2020. to However, gradually the lift Thai the restrictionsgovernment on extended itsMay state 3, 2020of emergency and eased until it further November starting 30, June 2020 1, despite 2020. However,the lockdown the Thaieasing. government By the end extended of Decemberits state of 2020,emergency a new until wave November of COVID-19 30, 2020 outbreak despite emerged, the lockdown which easing.resulted By the the government end of to imposeDecember new 2020, restrictions a new wave such asof COVID-19widespread outbreakshutdown, emerged, including which schools, resulted bars theand government other to entertainmentimpose new restrictions venues, massage such as andwidespread beauty parlors shutdown, and departmentincluding schools, stores and bars checkpoints and other at entry andentertainment exit points venues, to some massage provinces and seeking beauty to parlors prevent and further department spread stores of the and virus. checkpoints On February at entry 1, 2021,and exit the points country to somestarted provinces to lift the seeking restrictions to prevent in most further provinces. spread of the virus. On February 1, 2021, the country started to lift the restrictions in most provinces.

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The impact of the community quarantine (and various regional lockdowns) on MPIC’s businesses is asThe follows: impact of the community quarantine (and various regional lockdowns) on MPIC’s businesses is as follows: ƒ Power - MERALCO. In Luzon, reduction in the demand from the commercial and industrial ƒ sectorsPower -partially MERALCO offset. In by Luzon, increased reduction demand in fromthe demand residential from customers the commercial as a direct and consequenceindustrial of thesectors NCR-wide partially ECQ. offset by increased demand from residential customers as a direct consequence of the NCR-wide ECQ. Extension of payment due dates for billings during the ECQ period provided to customers in accordanceExtension of with payment the advisories due dates issued for billings by the during Department the ECQ of Energyperiod providedand Energy to customersRegulatory in Commissionaccordance with (ERC). the advisories issued by the Department of Energy and Energy Regulatory Commission (ERC). ƒ Power - GBPC. In the Visayas, energy demand decreased after the start of the ECQ imposed in ƒ IloiloPower and - GBPC Cebu.. InGBPC’s the Visayas, operating energy plants demand located decreased in Cebu, after Iloilo, the Aklan start ofand the Mindoro ECQ imposed initiated in a plantIloilo lockdownand Cebu. to GBPC’s ensure continuedoperating operations.plants located For in Cebu Cebu, operations, Iloilo, Aklan the andlockdown Mindoro was initiated from a Marchplant lockdown 23 to May to 29,ensure 2020, continued while for operations. Panay operations, For Cebu the operations, lockdown thewas lockdown from March was 20 from to JuneMarch 12, 23 2020. to May 29, 2020, while for Panay operations, the lockdown was from March 20 to June 12, 2020. In its Advisory dated April 15, 2020, the ERC stated that “Retail Electricity Suppliers (RES) are directedIn its Advisory to provide dated a graceApril period15, 2020, to all the customers ERC stated through that “Retail the deferment Electricity of theirSuppliers electricity (RES) bill are fallingdirected due to providewithin the a grace period period of the to ECQ all customers or from March through 16 theto April deferment 30, 2020, of their without electricity interest, bill penalties,falling due fees within and theother period charges. of the The ECQ cumulative or from March amount 16 of to electricity April 30, bills2020, that without was supposed interest, to havepenalties, fallen fees due and within other the charges. ECQ shall The be cumulative amortized amount in four of(4) electricity equal monthly bills that installments, was supposed to payablehave fallen in the due four within (4) thesucceeding ECQ shall billing be amortized months following in four (4) the equal end ofmonthly the ECQ. installments, This shall be reflectedpayable in as the a separate four (4) itemsucceeding in the electricity billing months bill due following on those the succeeding end of the months, ECQ. This provided shall bethat thereflected first billing as a separate due date item following in the electricity the ECQ shallbill due be noon earlierthose succeeding than May 15, months, 2020.” provided In the same that Advisory,the first billing the ERC due datestated following that “Generators the ECQ shall shall extend be no earlierthe same than payment May 15, scheme 2020.” as In provided the same in theAdvisory, preceding the paragraph,ERC stated to that the “Generators RES, DU and shall other extend customers.” the same payment scheme as provided in the preceding paragraph, to the RES, DU and other customers.” Following Republic Act No. 11494 entitled “Bayanihan to Recover as One Act” (“Bayanihan”), theFollowing DOE issued Republic an Advisory Act No. 11494directing entitled Generation “Bayanihan Companies, to Recover among as others,One Act” to implement(“Bayanihan”), a minimumthe DOE issued of a thirty an Advisory (30)-day directing grace period Generation and staggered Companies, payment among without others, interests, to implement penalties a and otherminimum charges of a to thirty all payments (30)-day duegrace within period the and period staggered of Community payment withoutQuarantine. interests, penalties and other charges to all payments due within the period of Community Quarantine. ƒ Toll Operations. NLEX, SCTEX, CAVITEX and the Cavite Laguna Expressway (CALAX) have ƒ remainedToll Operations open to. NLEX,facilitate SCTEX, unhampered CAVITEX movement and the of essentialCavite Laguna goods Expresswayand transit of (CALAX) medical have workersremained amid open the to Luzon-widefacilitate unhampered ECQ. Average movement daily of vehicle essential entries goods since and implementation transit of medical of ECQ andworkers declaration amid the of Luzon-wide SONE resulted ECQ. in aAverage decline indaily domestic vehicle and entries foreign since traffic, implementation respectively. of ECQ and declaration of SONE resulted in a decline in domestic and foreign traffic, respectively. ƒ Water - Maynilad. ECQ resulted in higher residential demand but at a lower average tariff rate ƒ becauseWater - Mayniladof the closure. ECQ of resultednon-essential in higher businesses residential which demand affected but the at anon-domestic lower average customer tariff rate segment.because of the closure of non-essential businesses which affected the non-domestic customer segment. In the absence of meter readings for the domestic customers during the ECQ, Maynilad estimated theIn the billing absence affected of meter by the readings ECQ period for the using domestic average customers historical during consumption the ECQ, pursuant Maynilad to estimated the policythe billing of the affected MWSS by Regulatory the ECQ period Office. using For averagenon-domestic historical customers, consumption Maynilad pursuant used toa the combinationpolicy of the ofMWSS electromagnetic Regulatory flowOffice. meter For readings, non-domestic actual customers, readings by Maynilad the technical used team,a and customercombination photographs of electromagnetic of meter readings. flow meter Maynilad readings, resumed actual readings the conduct by the of technicalactual meter team, reading and andcustomer onsite photographs billing activities of meter beginning readings. June Maynilad 1, 2020 and resumed corrections the conduct for over/under of actual registrationmeter reading of consumptionand onsite billing from activities when water beginning bills were June averaged 1, 2020 wereand corrections reflected in for the over/under customer’s registration June 2020 of Statementconsumption of Accountfrom when (SOA). water bills were averaged were reflected in the customer’s June 2020 Statement of Account (SOA).

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Maynilad also extended assistance to its customers in the form of payment due date extensions andMaynilad a moratorium also extended on disconnections assistance to during its customers the ECQ. in the In itsform letter of paymentdated September due date 29, extensions 2020, the andMWSS a moratorium Regulatory on Office disconnections ordered a graceduring period the ECQ. of thirty In its (30) letter days dated for theSeptember payment 29, of 2020,water the billsMWSS falling Regulatory due within Office the orderedperiod of a graceECQ orperiod MECQ of thirtyfor all (30) types days of customersfor the payment pursuant of waterto the provisionsbills falling of due Republic within theAct period No. 11494. of ECQ After or MECQthe grace for period, all types a three-month of customers installment pursuant to scheme the provisionsshall be provided of Republic to the Act following No. 11494. customers: After thedomestic, grace period, micro, asmall, three-month and medium installment enterprises scheme (MSMEs)shall be provided and cooperatives to the following until December customers: 16, domestic, 2020. Because micro, ofsmall, the shortand medium lead time enterprises and the operational(MSMEs) and issues cooperatives involved, untilMaynilad December opted 16, to defer2020. disconnection Because of the until short December lead time 17, and 2020. the operational issues involved, Maynilad opted to defer disconnection until December 17, 2020. On November 3, 2020, Maynilad also announced that it shall forego the rate increase it is qualifiedOn November to implement 3, 2020, inMaynilad 2021, specifically also announced the already that it approvedshall forego rebasing the rate adjustment increase it for is 2021, asqualified well as to the implement mandated in consumer 2021, specifically price index the (CPI) already inflation approved increase rebasing of the adjustment year. for 2021, as well as the mandated consumer price index (CPI) inflation increase of the year. ƒ Rail. With the ECQ implementation, operations were suspended starting March 17, 2020. ƒ OperationsRail. With resumedthe ECQ onimplementation, June 1, 2020 but operations at a limited were capacity suspended of 13% starting per directiveMarch 17, of 2020. the DOTr. Operations resumed on June 1, 2020 but at a limited capacity of 13% per directive of the DOTr. With the implementation of MECQ in NCR, LRT-1 operations were again suspended from WithAugust the 4, implementation 2020 to August of 18, MECQ 2020. in On NCR, August LRT-1 19, 2020,operations LRT-1 were resumed again suspendedoperations afterfrom placingAugust 4,NCR 2020 back to Augustto GCQ. 18, In 2020. October On 2020,August following 19, 2020, the LRT-1 DOTr’s resumed directive operations to gradually after increaseplacing NCR maximum back topassenger GCQ. In capacities, October 2020, LRMC following adjusted the passenger DOTr’s loading directive capacity to gradually to 30%. increase maximum passenger capacities, LRMC adjusted passenger loading capacity to 30%. In addition, starting March 2020 upon ECQ implementation, LRMC provides rental assistance to itsIn addition,retail customers starting in March the form 2020 of upon reduced ECQ lease implementation, payments. LRMC provides rental assistance to its retail customers in the form of reduced lease payments. Segment Performance and Monitoring. The Company’s chief operating decision maker is the BOD. TheSegment BOD Performance monitors the and operating Monitoring results. Theof each Company’s business chief unit separatelyoperating decisionfor the purpose maker isof the making BOD. decisionsThe BOD aboutmonitors resource the operating allocation results and performance of each business assessment. unit separately Segment for performance the purpose isof evaluatedmaking decisionsbased on: aboutconsolidated resource net allocation income forand the performance year; earnings assessment. before interest, Segment taxes performance and depreciation is evaluated and amortization,based on: consolidated or Core EBITDA; net income Core for EBITDAthe year; margin;earnings and before core interest, income taxes (loss). and Net depreciation income for and the yearamortization, is measured or Core consistent EBITDA; with Coreconsolidated EBITDA net margin; income and in corethe consolidated income (loss). financial Net income statements. for the year is measured consistent with consolidated net income in the consolidated financial statements. Core EBITDA is measured as consolidated net income excluding depreciation and amortization of Coreproperty, EBITDA plant isand measured equipment as consolidatedand intangible net assets, income asset excluding impairment depreciation on noncurrent and amortization assets, financing of costs,property, interest plant income, and equipment equity in and net intangible earnings (losses)assets, assetof associates impairment and onjoint noncurrent ventures, assets, net foreign financing exchangecosts, interest gains income, (losses), equity net gains in net (losses) earnings on (losses) derivative of associatesfinancial instruments, and joint ventures, provision net for foreign (benefit exchangefrom) income gains tax (losses), and other net non-recurringgains (losses) gainson derivative (losses). financial Core EBITDA instruments, margin provision pertains forto Core(benefit EBITDAfrom) income divided tax byand operating other non-recurring revenues. gains (losses). Core EBITDA margin pertains to Core EBITDA divided by operating revenues. Performance of the operating segments is also assessed based on a measure of recurring profit or core income.Performance Core of income the operating is measured segments as net is incomealso assessed attributable based toon owners a measure of the of Parentrecurring Company profit or core income.excluding Core the effectsincome of is foreign measured exchange as net incomeand derivative attributable gains to or owners losses ofand the non-recurring Parent Company items (NRI),excluding net theof taxeffects effect of offoreign the aforementioned. exchange and derivative NRI represent gains gains or losses or losses and non-recurring that, through itemsoccurrence or(NRI), size, netare ofnot tax considered effect of theusual aforementioned. operating items. 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. TheseSegment transfers expenses are andalso segment eliminated results for purposesexclude transfers of the consolidated or charges betweenfinancial businessstatements. segments. These transfers are also eliminated for purposes of the consolidated financial statements. There are no revenue transactions with a single customer that accounted for 10% or more of the ThereCompany’s are no consolidated revenue transactions revenues withand noa single material customer inter-segment that accounted revenue for transactions 10% or more for ofthe the years endedCompany’s December consolidated 31, 2020, revenues 2019 and and 2018. no material The Company’s inter-segment revenue revenue substantially transactions comprises for the ofyears servicesended December which revenue 31, 2020, recognition 2019 and is 2018. over time. The Company’s revenue substantially comprises of services which revenue recognition is over time.

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Segment capital expenditure is the total cost incurred during the period to acquire service concession assets,Segment property, capital expenditureplant and equipment, is the total and cost intangible incurred assetsduring other the period than goodwill. to acquire For service the consolidated concession assets,statements property, of financial plant and position, equipment, difference and intangiblebetween the assets combined other than segment goodwill. assets Forand the the consolidated consolidatedstatements of assets financial consist position, of adjustments difference and between eliminations the combined comprising segment of goodwill assets and and the deferred tax assets.consolidated Difference assets between consist ofthe adjustments combined segmentand eliminations liabilities comprising and the consolidated of goodwill liabilities and deferred largely tax assets.consist ofDifference deferred betweentax liabilities. the combined segment liabilities and the consolidated liabilities largely consist of deferred tax liabilities. The following table shows the reconciliations of the Company’s consolidated Core EBITDA to consolidatedThe following net table income shows for the the reconciliations years ended December of the Company’s 31, 2020, consolidated 2019 and 2018. Core EBITDA to consolidated net income for the years ended December 31, 2020, 2019 and 2018. 2020 2019 2018 2020 (In 201Millions)9 2018 Consolidated Core EBITDA P=30,642 P=(In42,260 Millions) P=37,665 ConsolidatedDepreciation andCore amortization EBITDA P=(10,446)30,642 P=(11,948)42,260 P=(10,119)37,665 DepreciationConsolidated andEBIT amortization (10,446)20,196 (11,948)30,312 (10,119)27,546 ConsolidatedAdjustments toEBIT reconcile with 20,196 30,312 27,546 Adjustmentsconsolidated to reconcile net income: with consolidatedInterest income net income: 1,362 2,291 1,494 InterestShare in income net earnings of equity 1,362 2,291 1,494 Sharemethod in net earningsinvestees of equity 10,732 11,656 11,511 Interestmethod expense investees (11,650)10,732 (11,949)11,656 (10,388)11,511 InterestNon-recurring expense gains (losses) – net* (11,650)(5,625) (11,949)3,286 (10,388)(1,053) NonProvision-recurring for income gains (losses) tax – net* (5,625)(4,768) (7,778)3,286 (1,053)(6,933) ConsolidatedProvision net forincomeincome for tax the year P=10,247(4,768) P=27,818(7,778) P=22,177(6,933) Consolidated*Includes net foreign net income exchange for gainsthe year (losses) P=10,247 P=27,818 P=22,177 *Includes net foreign exchange gains (losses) The following table shows the reconciliations of Company’s consolidated core income to the Company’sThe following consolidated table shows net the income reconciliations for the years of Company’s ended December consolidated 31, 2020, core 2019 income and to2018. the Company’s consolidated net income for the years ended December 31, 2020, 2019 and 2018. 2020 2019 2018 2020 (In Millions)2019 2018 Consolidated core income (In Millions) Consolidatedattributable core to incomeowners of the Parentattributable Company to owners of the P=10,238 P=15,602 P=15,060 Non-Parentrecurring Company expenses – net P=10,238(5,490) P=15,6028,254 P=15,060(930) NonConsolidated-recurring net expenses income– attributablenet (5,490) 8,254 (930) Consolidatedto owners net of incomethe Parent attributable Companyto owners of the Parent 4,748 23,856 14,130 ConsolidatedCompany net income attributable 4,748 23,856 14,130 Consolidatedto non-controlling net income interest attributable 5,499 3,962 8,047 Consolidatedto non-controlling net income interest for the year P=10,2475,499 P=27,8183,962 P=22,1778,047 Consolidated net income for the year P=10,247 P=27,818 P=22,177 The segment revenues, net income for the year, assets, liabilities, and other segment information of theThe Company’s segment revenues, reportable net operating income for segments the year, as assets, at and liabilities, for the years and ended other segmentDecember information 31, 2020, 2019of andthe Company’s2018 are detailed reportable in the operating succeeding segments tables. as at and for the years ended December 31, 2020, 2019 and 2018 are detailed in the succeeding tables.

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The following table presents consolidated information on core income and certain assets and liabilities regarding business segments for the years ended December 31, 2020, 2019 and 2018:

Year Ended December 31, 2020 (In Millions) Toll Other Adjustments/ Continuing Power Operations Water Rail Businesses Eliminations Consolidated GBPC Operations Total revenue from external sales P=21,400 P=13,564 P=24,561 P=1,263 P=1,136 P= – P=61,924 P=21,069 P=40,855 Cost of sales and services (13,834) (5,583) (8,787) (1,361) (1,032) – (30,597) (13,574) (17,023) Gross Margin 7,566 7,981 15,774 (98) 104 – 31,327 7,495 23,832 General and administrative expenses (3,502) (1,882) (4,385) (658) (1,645) – (12,072) (3,420) (8,652) Other income (charges) – net 1,086 493 (530) (115) 7 – 941 1,086 (145) Profit before Financing Charges 5,150 6,592 10,859 (871) (1,534) – 20,196 5,161 15,035 Interest expense – net (2,043) (2,604) (2,092) (26) (3,523) – (10,288) (1,610) (8,678) Profit before NCI and Income Tax 3,107 3,988 8,767 (897) (5,057) – 9,908 3,551 6,357 Non-controlling interest (1,892) (1,139) (3,006) 402 1 – (5,634) (1,896) (3,738) Provision for income tax (1,014) (788) (2,584) 155 (537) – (4,768) (1,000) (3,768) Contribution from Subsidiaries 201 2,061 3,177 (340) (5,593) – (494) 655 (1,149) Share in net earnings (losses) of equity method investees 10,393 293 (48) – 94 – 10,732 930 9,802 Contribution from Operations – Core Income (Loss) 10,594 2,354 3,129 (340) (5,499) – 10,238 1,585 8,653 Non-recurring charges (2,650) (393) (200) (13) (2,234) – (5,490) (28) (5,462) Segment Income (Loss) Attributable to owners of the Parent Company P=7,944 P=1,961 P=2,929 (P=353) (P=7,733) P= – P=4,748 P=1,557 P=3,191

Core EBITDA P=8,852 P=8,247 P=15,522 (P=752) (P=1,227) P= – P=30,642 P=8,859 P=21,783 Core EBITDA Margin 41% 61% 63% –% –% –% 49% 42% 53%

Non-recurring Charges (P=2,685) (P=432) (P=294) (P=38) (P=2,228) P= – (P=5,677) (P=64) (P=5,613) Provision for (benefit from) income tax 12 (4) 40 4 (1) – 51 12 39 Non-controlling interest 23 43 54 21 (5) – 136 24 112 Net Non-recurring Charges (P=2,650) (P=393) (P=200) (P=13) (P=2,234) P= – (P=5,490) (P=28) (P=5,462)

Assets and Liabilities Segment assets P=74,627 P=158,503 P=138,136 P=35,599 P=30,875 P=15,538 P=453,278 P=70,925 P=382,353 Investments and advances 129,867 14,748 2,036 – 17,867 – 164,518 5,044 159,474 Consolidated Total Assets P=204,494 P=173,251 P=140,172 P=35,599 P=48,742 P=15,538 P=617,796 P=75,969 P=541,827

Segment Liabilities P=53,972 P=119,261 P=74,141 P=24,671 P=90,243 P=11,161 P=373,449 P=40,519 P=332,930 Other Segment Information Capital expenditures - Service concession assets and property, plant and equipment P=399 P=28,016 P=9,354 P=5,829 P=459 P= – P=44,057 P=399 P=43,658 Depreciation and amortization 3,702 1,655 4,663 119 307 – 10,446 3,698 6,748

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Year Ended December 31, 2019 (In Millions) Toll Other Adjustments/ Operations Continuing Power Operations Water Healthcare Rail Businesses Eliminations Consolidated under PFRS 5 Operations Total revenue from external sales P=24,648 P=18,503 P=25,469 P=14,658 P=3,287 P=1,592 P= – P=88,157 P=38,881 P=49,276 Cost of sales and services (16,018) (6,524) (8,544) (8,895) (2,042) (1,698) – (43,721) (24,634) (19,087) Gross Margin 8,630 11,979 16,925 5,763 1,245 (106) – 44,436 14,247 30,189 General and administrative expenses (2,354) (2,046) (4,153) (3,663) (767) (1,796) – (14,779) (5,929) (8,850) Other income (charges) – net 380 691 (932) 327 87 102 – 655 707 (52) Profit before Financing Charges 6,656 10,624 11,840 2,427 565 (1,800) – 30,312 9,025 21,287 Interest expense – net (2,204) (2,027) (1,639) (147) 112 (3,753) – (9,658) (1,704) (7,954) Profit before NCI and Income Tax 4,452 8,597 10,201 2,280 677 (5,553) – 20,654 7,321 13,333 Non-controlling interest (2,436) (1,857) (3,470) (906) (261) – – (8,930) (3,331) (5,599) Provision for income tax (1,171) (2,256) (3,048) (745) (97) (461) – (7,778) (1,862) (5,916) Contribution from Subsidiaries 845 4,484 3,683 629 319 (6,014) – 3,946 2,128 1,818 Share in net earnings (losses) of equity method investees 10,824 605 (64) 238 – 53 – 11,656 649 11,007 Contribution from Operations – Core Income (Loss) 11,669 5,089 3,619 867 319 (5,961) – 15,602 2,777 12,825 Non-recurring charges (304) (331) (12,752) 25,837 (18) (4,178) – 8,254 25,859 (17,605) Segment Income (Loss) Attributable to owners of the Parent Company P=11,365 P=4,758 (P=9,133) P=26,704 P=301 (P=10,139) P=– P=23,856 P=28,636 (P=4,780)

Core EBITDA P=10,020 P=12,643 P=16,344 P=3,780 P=678 (P=1,205) P= – P=42,260 P=13,738 P=28,522 Core EBITDA Margin 41% 68% 64% 26% 21% –% –% 48% 35% 58%

Non-recurring Charges (P=219) (P=184) (P=20,106) P=31,915 (P=36) (P=4,250) P=– P=7,120 P=32,007 (P=24,887) Provision for (benefit from) income tax (58) (172) 2,504 (6,123) 3 12 – (3,834) (6,166) 2,332 Non-controlling interest (27) 25 4,850 45 15 60 – 4,968 19 4,949 Net Non-recurring Charges (P=304) (P=331) (P=12,752) P=25,837 (P=18) (P=4,178) P= – P=8,254 P=25,860 (P=17,606)

Assets and Liabilities Segment assets P=78,137 P=136,080 P=130,466 P=– P=30,870 P=50,530 P=16,603 P=442,686 P=– P=442,686 Investments and advances 132,156 16,031 2,131 16,695 – 2,079 – 169,092 16,695 152,397 Consolidated Total Assets P=210,293 P=152,111 P=132,597 P=16,695 P=30,870 P=52,609 P=16,603 P=611,778 P=16,695 P=595,083

Segment Liabilities P=55,448 P=102,398 P=73,162 P= – P=17,291 P=103,264 P=14,170 P=365,733 P= – P=365,733 Other Segment Information Capital expenditures - Service concession assets and property, plant and equipment P=939 P=23,796 P=16,432 P=1,806 P=7,593 P=103 P= – P=50,669 P=1,806 P=48,863 Depreciation and amortization 3,364 2,019 4,504 1,353 113 595 – 11,948 4,713 7,235

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Year Ended December 31, 2018 (In Millions) Toll Other Adjustments/ Operations Continuing Power Operations Water Healthcare Rail Businesses Eliminations Consolidated under PFRS 5 Operations Total revenue from external sales P=27,026 P=15,486 P=22,894 P=12,950 P=3,310 P=1,363 P=– P=83,029 P=39,772 P=43,257 Cost of sales and services (18,968) (5,345) (7,527) (7,512) (1,900) (1,455) – (42,707) (26,362) (16,345) Gross Margin 8,058 10,141 15,367 5,438 1,410 (92) – 40,322 13,410 26,912 General and administrative expenses (2,622) (2,103) (3,409) (3,818) (669) (1,752) – (14,373) (6,389) (7,984) Other income (charges) – net 614 602 (102) 328 154 1 – 1,597 671 926 Profit before Financing Charges 6,050 8,640 11,856 1,948 895 (1,843) – 27,546 7,692 19,854 Interest expense – net (2,394) (1,667) (1,602) (113) (10) (3,108) – (8,894) (1,539) (7,355) Profit before NCI and Income Tax 3,656 6,973 10,254 1,835 885 (4,951) – 18,652 6,153 12,499 Non-controlling interest (2,068) (1,572) (3,478) (735) (322) 5 – (8,170) (2,798) (5,372) Provision for income tax (1,068) (1,823) (2,933) (611) (169) (329) – (6,933) (1,623) (5,310) Contribution from Subsidiaries 520 3,578 3,843 489 394 (5,275) – 3,549 1,732 1,817 Share in net earnings (losses) of equity method investees 10,382 816 (20) 282 – 51 – 11,511 531 10,980 Contribution from Operations – Core Income (Loss) 10,902 4,394 3,823 771 394 (5,224) – 15,060 2,263 12,797 Non-recurring charges 292 (184) (301) 138 (63) (812) – (930) 148 (1,078) Segment Income (Loss) Attributable to owners of the Parent Company P=11,194 P=4,210 P=3,522 P=909 P=331 (P=6,036) P=– P=14,130 P=2,411 P=11,719

Core EBITDA P=9,652 P=10,072 P=15,518 P=3,028 P=987 (P=1,592) P=– P=37,665 P=12,349 P=25,316 Core EBITDA Margin 36% 65% 68% 23% 30% –% –% 45% 31% 59%

Non-recurring Charges P=301 (P=109) (P=472) P=233 (P=121) (P=810) P=– (P=978) P=254 (P=1,232) Provision for (benefit from) income tax (6) (76) (1) (2) 11 (1) – (75) (10) (65) Non-controlling interest (3) 1 172 (93) 47 (1) – 123 (96) 219 Net Non-recurring Charges P=292 (P=184) (P=301) P=138 (P=63) (P=812) P=– (P=930) P=148 (P=1,078)

Assets and Liabilities Segment assets P=83,428 P=107,777 P=126,789 P=19,686 P=21,372 P=16,775 P=29,126 P=404,953 P=19,686 P=385,267 Investments and advances 131,444 14,125 3,110 2,734 – 1,580 – 152,993 2,734 150,259 Consolidated Total Assets P=214,872 P=121,902 P=129,899 P=22,420 P=21,372 P=18,355 P=29,126 P=557,946 P=22,420 P=535,526

Segment Liabilities P=67,167 P=77,877 P=61,608 P=7,099 P=12,125 P=83,137 P=9,930 P=318,943 P=7,099 P=311,844 Other Segment Information Capital expenditures - Service concession assets and property, plant and equipment P=1,115 P=8,347 P=12,747 P=2,692 P=6,233 P=1,562 P=– P=32,696 P=2,692 P=30,004 Depreciation and amortization 3,602 1,433 3,665 1,077 92 250 – 10,119 4,657 5,462

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The following table shows the analysis and allocation of the consolidated results of operations of the Company to core and NRI and is provided to reconcile the preceding consolidated segment information, amounts and balances with the consolidated statements of comprehensive income:

2020 2019 2018 Core NRI Reclassification Consolidated Core NRI Reclassification Consolidated Core NRI Reclassification Consolidated (In Millions)

CONTINUING OPERATIONS OPERATING REVENUES Water and sewerage services revenue P=24,561 P= – (P=258) P=24,303 P=25,469 P=− (P=418) P=25,051 P=22,894 P=- (P=319) P=22,575 Toll fees 13,564 – – 13,564 18,503 − − 18,503 15,486 − − 15,486 Rail revenue 1,263 – – 1,263 3,287 − − 3,287 3,310 − − 3,310 Logistics revenues 1,136 – – 1,136 1,592 − − 1,592 1,363 − − 1,363 Other revenues 331 – 258 589 425 − 418 843 204 − 319 523 40,855 – – 40,855 49,276 − − 49,276 43,257 − − 43,257 COST OF SALES AND SERVICES (17,023) (246) – (17,269) (19,087) 1 − (19,086) (16,345) (7) − (16,352)

GROSS PROFIT (LOSS) 23,832 (246) – 23,586 30,189 1 − 30,190 26,912 (7) − 26,905 General and administrative expenses (8,652) (937) – (9,589) (8,850) (1,333) − (10,183) (7,984) (597) − (8,581) Interest expense (9,900) (110) – (10,010) (9,734) (45) − (9,779) (8,412) − − (8,412) Share in net earnings (losses) of equity method investees 9,802 (2,465) – 7,337 11,007 (253) − 10,754 10,980 (438) − 10,542 Interest income 1,222 7 – 1,229 1,780 13 − 1,793 1,056 3 − 1,059 Construction revenue 33,988 – – 33,988 42,795 − − 42,795 27,363 − − 27,363 Construction costs (33,988) – – (33,988) (42,795) − − (42,795) (27,362) − − (27,362) Others (146) (1,862) – (2,008) (52) (23,270) − (23,322) 926 (193) − 733

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX 16,158 (5,613) – 10,545 24,340 (24,887) − (547) 23,479 (1,232) − 22,247

PROVISION FOR (BENEFIT FROM) INCOME TAX (3,767) 39 – (3,728) (5,916) (2,332) − (3,584) (5,310) (65) − (5,375)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 12,391 (5,574) – 6,817 18,424 (22,555) − (4,131) 18,169 (1,297) − 16,872

NET INCOME (LOSS) FROM OPERATIONS OF ENTITIES UNDER PFRS 5 3,481 (51) – 3,430 6,108 25,841 − 31,949 5,061 244 − 5,305

NET INCOME (LOSS) P=15,872 (P=5,625) P= – P=10,247 P=24,532 P=3,286 − P=27,818 P=23,230 (P=1,053) − P=22,177

Net Income Attributable to: Owners of the Parent Company P=10,238 (P=5,490) P= – P=4,748 P=15,602 P=8,254 − P=23,856 P=15,060 (P=930) − P=14,130 NCI 5,634 (135) – 5,499 8,930 (4,968) − 3,962 8,170 (123) − 8,047 P=15,872 (P=5,625) P= – P=10,247 P=24,532 P=3,286 − P=27,818 P=23,230 (P=1,053) − P=22,177

*SGVFSM006036* 136 - 28 - - 28 -

By Geographical Market WhileBy Geographical the Company’s Market geographic focus is still predominantly the Philippines, MPIC has started increasingWhile the Company’sits presence geographicin Southeast focus Asia is with still itspredominantly investments inthe Indonesia Philippines, (PT MPIC Nusantara, has started which was consolidatedincreasing its beginningpresence in July Southeast 2018), ThailandAsia with (DMT; its investments see Note in10) Indonesia and Vietnam (PT Nusantara,(CII B&R, whichTuan Locwas Waterconsolidated Resources beginning Investment July 2018), Joint Stock Thailand Company (DMT; and see BOO Note Phu10) Ninhand Vietnam Water Treatment (CII B&R, Plant Tuan Joint Loc StockWater Company;Resources seeInvestment Notes 4 Jointand 10). Stock Company and BOO Phu Ninh Water Treatment Plant Joint Stock Company; see Notes 4 and 10). 2020 2019 2018 2020 (In 201Millions)9 2018 Revenue (In Millions) RevenueFrom Continuing Operations: FromPhilippines Continuing Operations: P=39,186 P=47,118 P=42,149 PhilippinesIndonesia P=39,1861,658 P=47,1182,153 P=42,1491,108 VietnamIndonesia 1,65811 2,1535 1,108– Vietnam 40,85511 49,2765 43,257– From Operations of Entities under PFRS 5 40,855 49,276 43,257 FromPhilippines Operations(seeof Entities Notes 32 underand 33PFRS) 5 21,069 38,881 39,772 Philippines (see Notes 32 and 33) P=61,92421,069 P=38,88188,157 P=39,77283,029 P=61,924 P=88,157 P=83,029 Share in net earnings (losses) of equity Sharemethod in net earningsinvestees (losses) (see Note of 10)equity Frommethod Continuing investees Operations (see Note: 10) FromPhilippines Continuing Operations: P=7,104 P=10,234 P=10,475 PhilippinesIndonesia P=7,104104 P=10,234217 P=10,(479)475 IndonesiaThailand 104265 217445 (479)593 ThailandVietnam (136)265 (142)445 593(47) Vietnam 7,337(136) 10,754(142) 10,542(47) From Operations of Entities under PFRS 5 7,337 10,754 10,542 FromPhilippines Operations(seeof Entities Notes 32 underand 33PFRS) 5 930 648 531 Philippines (see Notes 32 and 33) P=8,267930 P=11,402648 P=11,073531 P=8,267 P=11,402 P=11,073 Non-current assets (a): Non-Philippinescurrent assets (a): P=432,536 P=466,177 P=440,608 PhilippinesIndonesia P=432,53626,943 P=466,17725,728 P=440,60821,172 IndonesiaThailand 26,9437,061 25,7288,079 21,1726,852 ThailandVietnam 7,0616,050 8,0793,482 6,8525,542 Vietnam P=472,5906,050 P=503,4663,482 P=474,1745,542 (a) Excluding financial instruments and deferred tax assets. P=472,590 P=503,466 P=474,174 (a) Excluding financial instruments and deferred tax assets.

6. Material Partly-owned Subsidiaries 6. Material Partly-owned Subsidiaries In determining whether an NCI is material to the Company, management employs both quantitative andIn determining qualitative factorswhether to an evaluate NCI is materialthe nature to of, the and Company, risks associated management with, employs the Company’s both quantitative interests in theseand qualitative entities; and factors the effectsto evaluate of those the natureinterests of, on and the risks Company’s associated financial with, the position. Company’s Factors interests in consideredthese entities; include, and the but effects not limited of those to, interestscarrying onvalue the ofCompany’s the subsidiary’s financial NCI position. relative Factorsto the NCI recognizedconsidered include,in the Company’s but not limited consolidated to, carrying financial value statements, of the subsidiary’s the subsidiary’s NCI relative contribution to the NCI to the Company’srecognized in consolidated the Company’s revenues consolidated and net income,financial and statements, other relevant the subsidiary’s qualitative contributionrisks associated to the with theCompany’s subsidiary’s consolidated nature, purpose revenues and and size net of income, activities. and other relevant qualitative risks associated with the subsidiary’s nature, purpose and size of activities.

*SGVFSM006036* *SGVFSM006036*

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Based on management’s assessment, the Company has concluded that the following are the subsidiariesBased on management’s with NCI that assessment, are material the to Company the Company: has concluded (i) MWHC, that (ii) the NLEX following Corp, are (iii) the PT subsidiariesNusantara, (iv) with GBPC NCI that(up toare December material to 31, the 2019; Company: see Notes (i) MWHC, 1 and 33), (ii) (v) NLEX MPLRC Corp, (starting (iii) PT 2020; seeNusantara, Note 4), (iv) (vi) GBPC LRMC (up (up to to December December 31, 31, 2019; 2019; see included Notes 1 in and MPLRC 33), (v) in MPLRC 2020; see (starting Note 4), 2020; and (vii)see Note MPHHI 4), (vi) (up LRMC to December (up to 31,December 2018; see 31, Note 2019; 32). included in MPLRC in 2020; see Note 4), and (vii) MPHHI (up to December 31, 2018; see Note 32). The ability of these subsidiaries to pay dividends or make other distributions or payments to their shareholdersThe ability of (including these subsidiaries the Company) to pay isdividends subject toor applicable make other laws distributions and other orrestrictions payments contained to their in shareholdersfinancing agreements, (including shareholder the Company) agreements is subject and to otherapplicable agreements laws and that other prohibit restrictions or limit containedthe in paymentfinancing of agreements, dividends orshareholder other transfers agreements of funds. and Such other applicable agreements restrictions that prohibit are oras limitfollows: the payment of dividends or other transfers of funds. Such applicable restrictions are as follows: ƒ Under the financing agreements as disclosed in Note 18, which include satisfying certain ƒ financialUnder the ratios financing and other agreements covenants as disclosed to be able in to Note declare 18, orwhich pay includecash dividends; satisfying certain financial ratios and other covenants to be able to declare or pay cash dividends; ƒ Under Philippine law, a corporation is permitted to declare dividends only to the extent that it has ƒ unrestrictedUnder Philippine retained law, earnings a corporation that represent is permitted the undistributed to declare dividends earnings only of the to corporationthe extent that which it has haveunrestricted not been retained allocated earnings for any that managerial, represent contractualthe undistributed or legal earnings purposes of theand corporationwhich are free which for distributionhave not been to allocatedthe shareholders for any asmanagerial, dividends; contractual and or legal purposes and which are free for distribution to the shareholders as dividends; and ƒ Under NLEX Corp’s shareholders’ agreement, unless otherwise agreed upon by the shareholders, ƒ noUnder amounts NLEX shall Corp’s be distributed shareholders’ by way agreement, of dividends unless until otherwise PNCC’s agreed share upon in the by project the shareholders, revenue nocollection amounts has shall been be repaid distributed in full. by way of dividends until PNCC’s share in the project revenue collection has been repaid in full. Maynilad’s appropriated retained earnings as of December 31, 2020 and 2019 amounted to P=1.75Maynilad’s billion appropriated and =7.0P billion, retained respectively. earnings as Appropriation of December 31,of the 2020 retained and 2019 earnings amounted as of to DecemberP=1.75 billion 31, and 2020 =7.0P has billion, been made respectively. for pipelaying Appropriation projects expectedof the retained to be implemented earnings as of in the next Decembertwo years. 31, 2020 has been made for pipelaying projects expected to be implemented in the next two years. As at December 31, 2020 and 2019, NLEX Corp. has unpaid dividends to non-controlling shareholdersAs at December amounting 31, 2020 to and P=473 2019, million NLEX and Corp. =770P has million, unpaid respectively. dividends to As non-controlling at shareholdersDecember 31, amounting 2019, GBPC to P=473 had unpaid million dividends and =770P to million, non-controlling respectively. shareholders As at amounting to P=2,095December million 31, 2019, (see Note GBPC 15). had As unpaid discussed dividends in Note to 1,non-controlling GBPC qualified shareholders as a group amountingheld for deemed to disposalP=2,095 million as of December (see Note 31,15). 2020 As discussedwith GBPC’s in Note assets 1, andGBPC liabilities qualified previously as a group consolidated held for deemed in the disposalCompany’s as of consolidated December 31,statement 2020 with of financial GBPC’s position assets and reclassified liabilities to previously “Assets under consolidated PFRS 5” in and the “LiabilitiesCompany’s underconsolidated PFRS 5”, statement respectively, of financial as at December position reclassified 31, 2020 (see to “Assets Note 33). under PFRS 5” and “Liabilities under PFRS 5”, respectively, as at December 31, 2020 (see Note 33). For years ended December 31, 2020 and 2019, equity infusion of NCI into MPLRC, LRMH and LRMCFor years with ended an aggregate December amount 31, 2020 of =815andP 2019, million equity and infusionP=2,027 million,of NCI intorespectively, MPLRC, are LRMH included and in LRMC“Other movementswith an aggregate in NCI” amount in the ofconsolidated =815P million statements and P=2,027 of changes million, in respectively, equity. are included in “Other movements in NCI” in the consolidated statements of changes in equity.

*SGVFSM006036* *SGVFSM006036*

138 139

- 30 -

The summarized financial information are presented before inter-company eliminations but after consolidation adjustments for goodwill, other fair value adjustments on acquisition and adjustments required to apply uniform accounting policies at group level.

December 31, 2020 December 31, 2019 December 31, 2018 NLEX PT NLEX PT NLEX PT MWHC Corp Nusantara MPLRC GBPC MWHC Corp Nusantara LRMC GBPC MWHC Corp Nusantara MPHHI(a) LRMC Equity share held by NCI 47.2% 24.9% 23.7% 65.1% 37.6% 47.2% 24.9% 23.7% 45.0% 37.6% 47.2% 24.9% 24.8% 39.9% 45.0% Summarized statements of financial position Current assets P=18,795 P=4,256 P=2,300 P=1,592 P=20,230 P=16,174 P=5,867 P=3,080 P=2,341 P=22,316 P=17,421 P=4,216 P=4,014 P=5,468 P=2,241 Non-current assets(b) 118,963 62,267 26,964 33,224 60,139 103,681 55,845 24,719 28,066 61,533 109,209 48,845 21,321 19,424 18,873 Current liabilities 22,585 12,817 1,694 2,069 11,441 20,672 8,199 1,750 2,115 10,783 17,913 5,675 1,395 5,104 802 Non-current liabilities 49,922 30,270 8,737 18,947 34,099 48,434 30,646 7,521 15,293 38,570 44,133 25,453 5,453 2,283 11,515 Total equity 65,251 23,436 18,833 13,800 34,829 50,749 22,867 18,528 12,999 34,496 64,584 21,933 18,486 17,505 8,797 Attributable to: Equity holders of MPIC 34,288 19,856 11,294 7,597 17,397 26,631 19,366 14,426 7,148 17,259 36,659 18,723 11,585 8,760 4,837 NCI 30,963 3,580 7,539 6,203 17,432 24,118 3,501 4,102 5,851 17,237 27,925 3,210 6,901 8,745 3,960 Revenues 22,937 10,860 1,839 1,263 24,223 23,992 15,056 2,382 3,287 26,822 22,024 13,049 1,118 12,950 3,310 Net income (loss) 6,424 3,564 352 (721) 4,283 (8,739) 6,605 513 611 3,624 7,000 5,729 234 1,733 628 Total comprehensive income (loss) 6,343 3,537 316 (713) 4,283 (8,820) 6,531 515 595 2,923 7,114 5,661 282 1,783 652 Net income (loss) attributable to NCI 3,366 889 186 (451) 2,431 (1,401) 1,639 156 278 2,088 3,303 1,421 123 825 283 Dividends declared to NCI – 738 – – 2,095 2,352 1,399 – – 2,041 1,417 1,020 – 96 – Dividends paid to NCI – 1,170 – – 1,961 2,352 1,170 36 – 2,107 1,417 956 – 130 – Summarized statements of cash flows Operating 14,261 5,662 4,538 (2,909) 6,534 15,766 10,335 1,346 224 3,783 17,231 6,233 638 2,248 735 Investing (9,016) (7,119) (9,215) (3,893) (396) (14,227) (7,719) (2,728) (7,636) (1,656) (10,619) (3,960) (312) (2,652) (6,301) Financing (4,706) (601) 3,771 5,976 (6,892) (1,655) (665) 1,117 7,471 (6,471) 1,396 (2,539) (230) (129) 5,945 Net increase (decrease) in cash and cash equivalents 539 (2,058) (906) (826) (754) (116) 1,951 (265) 59 (4,344) 8,008 (266) 97 (533) 379 Cash and cash equivalents – beginning 11,426 4,400 2,158 1,657 9,070 11,542 2,449 2,423 1,580 13,414 3,534 2,715 2,326 2,991 1,201 Cash and cash equivalents – end P=11,965 P=2,342 P=1,252 P=831 P=8,316 P=11,426 P=4,400 P=2,158 P=1,639 P=9,070 P=11,542 P=2,449 P=2,423 P=2,458 P=1,580 (a) Includes the 25.51% equivalent shares of the Exchangeable bond (see Notes 30, 32 and 40) (b) Includes goodwill recognized as at acquisition date (see Note 11)

*SGVFSM006036* - 31 -

- 31 - 7. Cash and Cash Equivalents, Short-term Deposits and Restricted Cash

7. Cash andand CashCash Equivalents Equivalents, and Short-term Short-term Deposits Deposits. and This Restricted account consists Cash of:

Cash and Cash Equivalents and Short-term Deposits. This account consists2020 of: 2019 (In Millions) 2020 2019 Cash and cash equivalents P=41,539 P=73,211 (In Millions) Short-term deposits 7,283 1,486 Cash and cash equivalents P=48,822P=41,539 P=74,69773,211 Short-term deposits 7,283 1,486 Cash and cash equivalents include cash in banks and temporary placementsP=48,822 that are madeP=74,697 for varying periods of up to three months depending on the immediate cash requirements of the Company. Cash inCash banks and and cash temporary equivalents placements include cash earn in interest banks atand the temporary prevailing placements bank and temporarythat are made placements for varying rates,periods respectively. 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 Short-termrates, respectively. deposits are deposits with original maturities of more than three months to one year from dates of acquisition and earn interest at the prevailing short-term deposits rates. Short-term deposits accountShort-term also deposits included are investments deposits with in Unitoriginal Investment maturities Trust of moreFund than(UITF). three While months the to UITF one year was from classifieddates of acquisition as financial and asset earn at interest fair value at thethrough prevailing profit short-term or loss (FVPL), deposits the rates. entire Short-terminvestment depositsin UITF isaccount presented also underincluded the investmentsshort-term deposits in Unit accountInvestment as the Trust fund Fund comprises (UITF). of While short-term the UITF money was market securities,classified astime financial and special asset depositat fair value accounts through with profit average or loss maturity (FVPL), of less the thanentire 30 investment days and is in part UITF of theis presented Company’s under cash the management short-term deposits policy (see account Note as34). the fund comprises of short-term money market securities, time and special deposit accounts with average maturity of less than 30 days and is part of Forthe Company’sthe purpose cashof the management consolidated policy statements (see Note of cash 34). flows, cash and cash equivalents comprise of the following as at December 31: For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise of the following as at December 31: 2020 2019 2018 (In Millions) 2020 2019 2018 Cash on hand and in banks P=9,317 P=9,441 P=8,718 (In Millions) Short-term deposits that qualify Cashas on cash hand equivalents and in banks P=9,31732,222 P=63,7709,441 P=37,8898,718 Short-term deposits that qualify 41,539 73,211 46,607 Cashas and cash cash equivalents equivalents – entity 32,222 63,770 37,889 under PFRS 5 (see Note 33) 41,5396,655 73,211– 46,607– Cash and cash equivalents – entity P=48,194 P=73,211 P=46,607 under PFRS 5 (see Note 33) 6,655 – – Restricted Cash. Restricted cash classified underP=48,194 current assets pertainsP=73,211 to sinking fundP=46,607 or debt service account (DSA) representing amounts set aside for semi-annual principal and interest paymentsRestricted ofCash. certain Restricted long-term cash debt. classified This DSA under is maintainedcurrent assets and pertains replenished to sinking in accordance fund or debt with the provisionservice account of the (DSA)loan agreements. 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 Interestprovision income of the fromloan agreements.the restricted cash is for the account of the Company.

Interest earnedincome from from cash the restrictedand cash cashequivalents, is for the short-term account of deposits the Company. and restricted cash from continuing operations amounted to =1,083P million, P=1,570 million and P=987 million for the years endedInterest December earned from 31, cash2020, and 2019 cash and equivalents, 2018, respectively short-term (see deposits Note 24). and restricted cash from continuing operations amounted to =1,083P million, P=1,570 million and P=987 million for the years ended December 31, 2020, 2019 and 2018, respectively (see Note 24).

*SGVFSM006036* *SGVFSM006036* 140 - 32 - - 32 -

8. Receivables 8. Receivables This account consists of: This account consists of: 2020 2019 2020 (In Millions) 2019 Trade: (In Millions) TradeWater: P=5,068 P=2,436 LogisticsWater P=5,068832 P=2,436933 PowerLogistics (see Note 33) 832– 4,786933 OthersPower (see Note 33) 674– 4,786649 ReceivableOthers from Buhay Ventures Holdings (PH) Inc. 674 649 Receivable(Buhay ;fromsee NoteBuhay 32) Ventures Holdings (PH) Inc. – 3,873 Contract(Buhay assets/unbilled; see Note 32) receivables 1,332– 1,2273,873 ConcessionContract assets/unbilled financial receivable receivables 1,3322,435 1,1171,227 AdvancesConcession to financial Department receivable of Public Works and 2,435 1,117 AdvancesHighways to Department (DPWH) of Public Works and 285 238 NotesHighways (DPWH) 285– 150238 NontradeNotes 1,478– 2,150241 Nontrade 12,1041,478 17,6502,241 Less allowance for ECL (see Note 34) 12,1041,506 17,6501,752 Less allowance for ECL (see Note 34) 10,5981,506 15,8981,752 Less current portion 10,5988,228 14,62415,898 NoncurrentLess current portion portion* P=2,3708,228 P=14,6241,274 *IncludedNoncurrent in “Other portion noncurrent* assets” account P=2,370 P=1,274 *Included in “Other noncurrent assets” account Trade Receivables. Trade receivables which are non-interest bearing, included receivables arising fromTrade the Receivables following:. Trade receivables which are non-interest bearing, included receivables arising from the following: ƒ Water. Receivables from water service customers with generally a 60-day term. For bulk water ƒ services,Water. Receivables with generally from 45 water to 60-day service term. customers As discussed with generally in Note 5,a 60-dayMaynilad term. extended For bulk assistance water toservices, its customers with generally in the form 45 to of 60-day payment term. due Asdate discussed extensions in Noteand a 5,moratorium Maynilad extendedon disconnections assistance duringto its customers the community in the formquarantines. of payment due date extensions and a moratorium on disconnections during the community quarantines. ƒ Logistics. Receivables from freight forwarding, warehousing and trucking services. Generally ƒ Logistics30-day credit. Receivables term with from settlement freight period forwarding, of 60 towarehousing 120 days. and trucking services. Generally 30-day credit term with settlement period of 60 to 120 days. ƒ Power. Outstanding billings for energy fees and pass-through fuel costs arising from the delivery ƒ Power.of electricity Outstanding to customers billings and for energy energy sales fees to and the pass-through Wholesale Electricity fuel costs Spot arising Market from (WESM).the delivery Normalof electricity credit to term customers is 15 to and 30 energydays from sales the to date the Wholesaleof receipt of Electricity billing. As Spot discussed Market in(WESM). Note 1, GBPCNormal qualified credit term as ais group 15 to held30 days for deemedfrom the disposal date of receiptas of December of billing. 31, As 2020 discussed with GBPC’s in Note 1, assetsGBPC and qualified liabilities as a previouslygroup held consolidated for deemed disposal in the Company’s as of December consolidated 31, 2020 statement with GBPC’s of financialassets and position liabilities reclassified previously to consolidated “Assets under in PFRSthe Company’s 5” and “Liabilities consolidated under statement PFRS 5”, of respectively,financial position as at reclassifiedDecember 31, to “Assets2020 (see under Note PFRS 33). 5” and “Liabilities under PFRS 5”, respectively, as at December 31, 2020 (see Note 33). ƒ Others. Other trade receivables account included receivables arising from operations and ƒ maintenanceOthers. Other (O&M) trade receivables and construction account services included of receivableswater and waste arising treatment from operations facilities and(with 30 to 60-daymaintenance credit (O&M) term) and construction services of water and waste treatment facilities (with 30 to 60-day credit term) Contract Assets/Unbilled Receivables. Unbilled receivables represent right to consideration in exchangeContract Assets/Unbilledfor water services Receivables. that are yet Unbilledto be billed receivables to customers. represent right to consideration in exchange for water services that are yet to be billed to customers. *SGVFSM006036* *SGVFSM006036*

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Concession Financial Receivable. Concession financial receivable pertains to the guaranteed minimumConcession payment Financial that Receivable. will be receivedConcession by the Companyfinancial receivable from grantors pertains under to thethe followingguaranteed service concessionminimum payment arrangements: that will be received by the Company from grantors under the following service concession arrangements: ƒ On April 24, 2012, PT Dain Celicani Cemerlang (DCC), a subsidiary of PT Nusantara entered ƒ intoOn April a Cooperation 24, 2012, AgreementPT Dain Celicani for the Cemerlang supply of treated (DCC), water a subsidiary to PT Kawasan of PT Nusantara Industri Medan entered (Persero)into a Cooperation (KIM) for Agreement a period of for 20 theyears supply (excluding of treated construction water to PT phase). Kawasan The Industriagreement Medan states that(Persero) DCC (KIM)shall build for a a period water treatmentof 20 years plant (excluding on the landconstruction owned by phase). KIM under The agreement build-operate- states transferthat DCC (BOT) shall scheme.build a water Both treatment parties agree plant the on minimumthe land owned supply by of KIM treated under water build-operate- volume at transfer point(BOT) is scheme. 250,000 Bothcubic parties meter (m3)agree per the month minimum at IDR supply 5,800 of pertreated m3 (excludingwater volume VAT). at The pricetransfer will point be evaluated is 250,000 and cubic adjusted meter at (m3) 10% per in everymonth three at IDR (3) 5,800 years peror atm3 the (excluding time of the VAT). increase The inprice electricity, will be evaluated fuel and other and adjusted tariff which at 10% affect in everyproduction three costs(3) years directly. or at theThe time concession of the increase financialin electricity, receivable fuel and pertains other tariffto the which guaranteed affect minimumproduction payment costs directly. that will The be concessionreceived by DCC fromfinancial KIM receivable under the pertains water supply to the agreement. guaranteed minimum payment that will be received by DCC from KIM under the water supply agreement. ƒ In August 2018, PT Energi Infranusantara, a wholly-owned subsidiary of PT Nusantara, acquired ƒ 80%In August of the 2018, capital PT stock Energi of RPSL,Infranusantara, a biomass a wholly-ownedpower plant operator. subsidiary RPSL of PT has Nusantara, an Electrical acquired Power Purchase80% of the Agreement capital stock with of PT RPSL, Perusahaan a biomass Listrik power Negara plant (Persero) operator. (PLN) RPSL for has the an constructionElectrical Power and operationPurchase Agreementof a Biomass with Power PT Perusahaan Plant for a periodListrik ofNegara twenty (Persero) (20) years (PLN) from for the the start construction of operations. and Underoperation the ofagreement, a Biomass RPSL Power will Plant supply for aa periodportion of of twenty the generated (20) years power from from the startthe power of operations. plant to PLNUnder in the accordance agreement, with RPSL the termswill supply and conditions a portion of the agreement.generated power The concession from the power financial plant to receivablePLN in accordance pertains towith the the guaranteed terms and minimum conditions payment of the agreement.that will be The received concession by RPSL financial from PLN underreceivable the electrical pertains topower the guaranteed purchase agreement. minimum payment that will be received by RPSL from PLN under the electrical power purchase agreement. Finance income amounting to P=145 million, P=153 million and =30P million for the years ended DecemberFinance income 31, 2020, amounting 2019 and to P=1452018, million, respectively, P=153 weremillion recognized and =30P millionunder “Interest for the years income” ended in the consolidatedDecember 31, statement 2020, 2019 of comprehensiveand 2018, respectively, income were recognized under “Interest income” in the (seeconsolidated Note 24). statement of comprehensive income (see Note 24). Advances to DPWH. Advances to DPWH include (i) advances in order to fast track the acquisition of right-of-wayAdvances to DPWHfor the .construction Advances to of DPWH Segments include 9 and (i) 10, advances portions in of order Phase to IIfast of trackNLEX the pursuant acquisition to the of Reimbursementright-of-way for Agreementthe construction entered of Segmentsinto by NLEX 9 and Corp. 10, portions with DPWH of Phase in 2013; II of (ii)NLEX direct pursuant advances to theto certainReimbursement Segment Agreement9 landowners entered as consideration into by NLEX for Corp.the grant with of DPWH immediate in 2013; right-of-way (ii) direct possession advances to NLEXcertain Corp.Segment ahead 9 landowners of the expropriation as consideration proceedings. for the Undergrant of a Deedimmediate of Assignment right-of-way (DOA) possession with to SpecialNLEX Corp. Power ahead of Attorney of the expropriation (SPA) agreement, proceedings. these landowners Under a Deedagreed of to Assignment assign their (DOA) receivables with fromSpecial DPWH Power to of NLEX Attorney Corp. (SPA) in consideration agreement, thesefor the landowners direct advances agreed received to assign from their NLEX receivables Corp.; and (iii)from advances DPWH to and NLEX reimbursement Corp. in consideration agreement between for the directMPCALA advances and DPWHreceived where from theNLEX parties Corp.; have and agreed(iii) advances that DPWH and reimbursement shall execute its agreement power to betweenacquire theMPCALA necessary and right-of-way DPWH where while the MPCALAparties have shallagreed advance that DPWH the amounts shall execute negotiated its power for such to acquire and shall the be necessary later reimbursed right-of-way by DPWH while MPCALAwithin 60 days fromshall advancethe receipt the of amounts the MPCALA’s negotiated request for such for andreimbursement. shall be later Thesereimbursed advances by DPWH to DPWH within are 60 days noninterest-bearingfrom the receipt of the and MPCALA’s are collectible request within for a reimbursement.year. These advances to DPWH are noninterest-bearing and are collectible within a year. Notes Receivable. Notes receivable aggregating =150P million comprising of defaulted loans are fully providedNotes Receivable. with allowance Notes asreceivable at December aggregating 31, 2019. =150P A settlementmillion comprising of =30P million of defaulted was agreed loans and are fully collectedprovided within 2020 allowance and the asremaining at December balance 31, of2019. the note A settlement receivable of amounting =30P million to wasP=120 agreed million and was writtencollected off. in 2020 and the remaining balance of the note receivable amounting to P=120 million was written off. Nontrade Receivables. Nontrade receivables also included (i) advances to customers, affiliates and officersNontrade and Receivables. employees Nontradethat are generally receivables collectible also included within (i) a yearadvances and (ii) to customers,advances to affiliates former and subsidiariesofficers and andemployees related thatparties are (seegenerally Note 19).collectible Portion within of advances a year and to former (ii) advances subsidiaries to former and affiliatessubsidiaries of theand Company related parties are fully (see provided Note 19). with Portion allowance. of advances to former subsidiaries and affiliates of the Company are fully provided with allowance. *SGVFSM006036* *SGVFSM006036*

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The noncurrent portion of the receivables are included under the “Other noncurrent assets” account in Thethe consolidated noncurrent portion statements of the of receivablesfinancial position. are included under the “Other noncurrent assets” account in the consolidated statements of financial position.

9. Other Current Assets 9. Other Current Assets This account consists of the following: This account consists of the following: 2020 2019 2020 (In Millions) 2019 Input value-added tax (VAT) (a) P=4,395 (In Millions) 4,210 (b) InputInventories value-added tax (VAT) (a) P=4,395881 4,2103,066 (c) InventoriesPrepaid expenses(b) 1,010881 3,01,08766 (d) PrepaidCreditable expenses withholding(c) tax (CWT) 1,010753 1,995087 (e) CreditableDeferred financing withholding cost tax (CWT) (d) 753348 995369 (f) DeferredAdvances financing to contractors cost (ande) consultants 348335 369454 AdvancesFinancial assetsto contractors at Fair value and consultantsthrough other(f) 335 454 Financialcomprehensive assets at Fair income value (FVOCI) through other 155 300 Duecomprehensive from related parties income (see (FVOCI)Note 19) 155279 300273 DueOthers from related parties (see Note 19) 279337 273482 Others 8,493337 11,236482 (d) Less allowance for decline in value 8,493486 11,236331 Less allowance for decline in value (d) P=8,007486 P=10,905331 P=8,007 P=10,905 a. Input VAT pertains to VAT imposed on purchases of goods and services. These are expected to a. Inputbe offset VAT against pertains output to VAT VAT imposed (see Note on 15) purchases arising offrom goods the Company’sand services. revenue/income These are expected subject to beto VAToffset in against the future. output Noncurrent VAT (see portionNote 15) as arising at December from the 31, Company’s 2020 and 2019 revenue/income amounted to subject toP=114 VAT million in the and future. P=182 Noncurrent million, respectively, portion as atand December is included 31, under 2020 “Otherand 2019 noncurrent amounted assets”. to P=114The noncurrent million and portion P=182 million,pertains respectively,to input VAT and that is can included be offset under against “Other output noncurrent VAT beyond assets”. one Theyear noncurrentand those that portion can bepertains claimed to inputas tax VAT credits. that can be offset against output VAT beyond one year and those that can be claimed as tax credits. b. Inventories as at December 31, 2019 inlcuded GBPC’s power plant spare parts, consumables, b. Inventoriescoal and fuel as amounting at December to P=2,372.31, 2019 As inlcuded discussed GBPC’s in Note power 1, GBPC plant qualifiedspare parts, as aconsumables, group held for coaldeemed and disposal fuel amounting as of December to P=2,372. 31, As 2020 discussed with GBPC’s in Note assets 1, GBPC previously qualified consolidated as a group inheld the for deemedCompany’s disposal statement as of ofDecember financial 31, position 2020 withreclassified GBPC’s to assets “Assets previously under PFRS consolidated 5” (see Note in the 33). Company’sRemaining inventoriesstatement of as financial at December position 31, 2020,reclassified mainly to pertains “Assets tounder LRMC’s PFRS rail 5” engineering(see Note 33). Remainingsupplies and inventories others. as at December 31, 2020, mainly pertains to LRMC’s rail engineering supplies and others. c. Prepaid expenses mainly pertain to insurance, premium bond and various deposits. c. Prepaid expenses mainly pertain to insurance, premium bond and various deposits. d. This represents amount withheld by counterparty for services rendered by the Company which d. Thiscan be represents claimed asamount tax credits. withheld Management by counterparty provided for servicesallowance rendered for decline by the in Companyvalue representing which canCWT be recognized claimed as intax prior credits. years Management that the Company provided may allowance no longer for be declineable to utilize.in value representing CWT recognized in prior years that the Company may no longer be able to utilize. e. These pertain to debt issue costs of undrawn amounts of the loan facilities. e. These pertain to debt issue costs of undrawn amounts of the loan facilities. f. Noncurrent portion included under “Other noncurrent assets” as at December 31, 2020 and 2019 f. Noncurrentamounted to portion =6,900P included million andunder =10,581P “Other million, noncurrent respectively. assets” as at December 31, 2020 and 2019 amounted to =6,900P million and =10,581P million, respectively.

*SGVFSM006036* *SGVFSM006036*

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10. Investments and Advances 10. Investments and Advances This account consists of the following: This account consists of the following: 2020 2019 2020 (In Millions) 2019 Equity method investees: (In Millions) EquityAssociates method: investees: AssociatesMaterial: MaterialPower PowerMERALCO P=124,823 P=127,509 MERALCOAlsons Thermal Energy Corporation P=124,823 P=127,509 Alsons(ATEC Thermal; see NoteEnergy 33 Corporation) − 2,768 Toll (ATEC; see Note 33) − 2,768 TollDMT 7,088 7,266 DMTPT Jakarta Lingkar Baratsatu (JLB) 7,0884,953 7,5,255266 PTCII JakartaB&R Lingkar Baratsatu (JLB) 4,9532,707 5,2553,364 HealthcareCII B&R– MPHHI (see Note 32) 16,7402,707 16,6953,364 OthersHealthcare – MPHHI (see Note 32) 16,7403,163 16,6953,312 JointOthers ventures: 3,163 3,312 JointOthers ventures: − − Others 159,474− 166,169− Advances to equity method investees (see Note 33) 159,474− 166,1692,923 Advances to equity method investees (see Note 33) P=159,474− P=169,0922,923 P=159,474 P=169,092 In determining whether an equity method investee is material to the Company, management employs Inboth determining quantitative whether and qualitative an equity factors method to investee evaluate is the material nature toof, the and Company, risks associated management with, theemploys bothCompany’s quantitative interests and inqualitative these entities; factors and to the evaluate effects the of naturethose interestof, and onrisks the associated Company’s with, financial the Company’sposition. Factors interests considered in these include,entities; andbut notthe limitedeffects ofto, those carrying interest value on of the the Company’s investee relative financial to the position.total equity Factors method considered investments include, recognized but not in limited the Company’s to, carrying consolidated value of the financial investee statements, relative to thethe totalequity equity investee’s method contribution investments to recognizedthe Company’s in the consolidated Company’s netconsolidated income, and financial other relevant statements, the equityqualitative investee’s risks associated contribution with to thethe equityCompany’s investee’s consolidated nature, purpose net income, and sizeand ofother activities. relevant qualitative risks associated with the equity investee’s nature, purpose and size of activities. Equity Method Investees EquityInvestments Method in equityInvestees method investees pertain to the Company’s investments in associates and joint Investmentsventures. in equity method investees pertain to the Company’s investments in associates and joint ventures. Movements in this account: Movements in this account: 2020 2019 2020 (In Millions) 2019 Acquisition costs (In Millions) AcquisitionBalance at beginning costs of year P=161,727 P=145,935 BalanceAdditions at duringbeginning the yearof year: P=161,727 P=145,935 AdditionsEquity during infusion the intoyear existing: investees 60 244 EquityAcquisitions infusion into existing investees 60− 1,163244 AssetsAcquisitionsunder PFRS 5 - ATEC (see Note 33) (2,551)− 1,163− AssetsInvestmentunder retained PFRS 5in- MPHHIATEC (see (see Note Note 3 32)3) (2,551)− 16,688− InvestmentDeconsolidation retained of MPHHI in MPHHI (see (see Note Note 32) 32) − 16,688(1,788) DeconsolidationStep acquisition -ofPNW MPHHI(see (seeNote Note 4) 32) − (1,788)(478) Step acquisition - PNW (see Note 4) − (478) (Forward) (Forward) *SGVFSM006036* *SGVFSM006036*

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2020 2019 2020 (In Millions) 2019 Reclassification ( P= −) (In Millions) (=P37) BalanceReclassification at end of year 159,236( P= −) 161,727(=P37) AccumulatedBalance at end equityof year in net earnings 159,236 161,727 AccumulatedBalance at beginning equity ofin yearnet earnings 4,376 3,205 ShareBalance in atnet beginningearnings (losses)of year for the year: 4,376 3,205 ShareContinuing in net earnings operations:(losses) for the year: ContinuingMERALCO operations: 7,002 10,164 DMTMERALCO 7,002266 10,164445 JLBDMT 110266 178445 JLBMPHHI 11044 1787 CIIMPHHI B&R (72)44 (39)7 OthersCII B&R (13)(72) (39)(1) OperationsOthers of entities under PFRS 5 (13) (1) Operations(see Note ofs entities32 and under33) PFRS 5 930 648 Dividends:(see Notes 32 and 33) 930 648 Dividends:MERALCO (7,734) (8,229) MERALCOATEC (7,734)(540) (8,229)(278) CIIATEC B&R (214)(540) (278)− DMTCII B&R (214)(71) (202)− DMTJLB (71)(72) (202)(128) OthersJLB (72−) (116)(128) AssetsOthersunder PFRS 5 -ATEC (see Note 33) (606)− (116)− AssetsStep-upunder acquisition PFRS 5 -ATEC (see Note 33) (606)− 14− DeconsolidationStep-up acquisition of MPHHI (see Note 32) − (1,292)14 BalanceDeconsolidation at end of o yearf MPHHI (see Note 32) 3,406− (1,292)4,376 AccumulatedBalance at end shareof year in the investees’ OCI 3,406 4,376 AccumulatedBalance at beginning share inof theyear investees’ OCI 1,700 2,650 ShareBalance in atinvestees’ beginning OCI of duringyear the year (3,179)1,700 2,650(947) ReservesShare in investees’under PFRS OCI 5 (seeduring Note the 33) year (3,179)5 (947)− DeconsolidationReserves under PFRS of MPHHI 5 (see Note 33) −5 (3)− BalanceDeconsolidation at end of of year MPHHI (1,474)− 1,700(3) LessBalance allowance at end of for year impairment loss (1,474) 1,700 LessBalance allowance at beginning for impairment of year loss 1,634 1,323 ProvisionBalance at (see beginning Note 24) of year 1,63460 1,323311 BalanceProvision at (see end Noteof year 24) 1,69460 1,634311 Balance at end of year P=159,4741,694 P=166,1691,634 P=159,474 P=166,169 Material Associates. The Company’s investments in material associates substantially comprise of MaterialMPIC’s investments Associates. in:The Company’s investments in material associates substantially comprise of MPIC’s investments in: Place of Ownership Interest in % PlaceIncorporation of Principal Activities Ownership2020 Interest in %2019 Associates: Incorporation Principal Activities 2020 2019 Associates: MERALCO – Direct Philippines Power 10.5 10.5 (a) MERALCO – DirectIndirect Philippines Power 35.010.5 10.535.0 MERALCOATEC – Indirect (a) Philippines Power 35.050.0 35.050.0 ATEC Philippines Power 50.0 50.0

*SGVFSM006036* *SGVFSM006036*

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Place of Ownership Interest in % PlaceIncorporation of Principal Activities Ownership2020 Interest in %2019 DMT IncorporationThailand PrincipalTollways Activities 202029.4 20129.49 DMTCII B&R VietnamThailand Tollways 44.929.4 29.444.9 PTCII JakartaB&R Lingkar Baratsatu Vietnam Tollways 44.9 44.9 PT (JLB)Jakarta Lingkar Baratsatu Indonesia Tollways 35.0 35.0 (b) MPHHI(JLB) IndonesiaPhilippines TollwaysHealthcare 35.020.0 35.020.0 (a) MPHHIHeld through(b) Beacon Electric. Philippines Healthcare 20.0 20.0 (a)(b) HeldInterest through in MPHHI Beacon has Electric. been effectively diluted to 20.0% on account of KKR’s investment in MPHHI on December 9, 2019 (see Note 32). (b) Interest in MPHHI has been effectively diluted to 20.0% on account of KKR’s investment in MPHHI on December 9, 2019 (see Note 32). MERALCO MERALCO is a Philippine corporation with its shares listed in the PSE. It is the largest distributor of MERALCOelectricity in isthe a PhilippinePhilippines corporation with its franchise with its valid shares until listed June in 2028. the PSE. It is the largest distributor of electricity in the Philippines with its franchise valid until June 2028. The fair value of the Company’s effective investment in MERALCO at 45.5% amounted to P=150The fair billion value and of P=162the Company’s billion as ateffective December investment 31, 2020 in and MERALCO 2019, respectively, at 45.5% amountedbased on the to quoted priceP=150 ofbillion MERALCO and P=162 as billion at those as dates. at December 31, 2020 and 2019, respectively, based on the quoted price of MERALCO as at those dates. A pledge on Beacon Electric’s investments in MERALCO shares secured Beacon Electric’s loan facilitiesA pledge withon Beacon a syndicate Electric’s of various investments financial in institutions.MERALCO sharesIn 2019, secured the pledge Beacon on theElectric’s MERALCO loan sharesfacilities have with been a syndicate terminated of variousupon full financial and final institutions. discharge of In the 2019, obligation the pledge under on thethe NoteMERALCO Facility sharesAgreements have been(see Noteterminated 18). upon full and final discharge of the obligation under the Note Facility Agreements (see Note 18). ATEC OnATEC November 27, 2017, GBPC completed the acquisition of a 50% less one share stake in ATEC, the Onholding November company 27, for2017, Alsons GBPC Consolidated completed Resources,the acquisition Inc’s of (ACR) a 50% baseloadless one sharecoal-fired stake power in ATEC, plant the holdingassets for company a total consideration for Alsons Consolidated of =4.3P billion Resources, allocated Inc’s as follows: (ACR) (i)baseload P=2.4 billion coal-fired for the power common plant assetsshares forand a (ii) total =1.9P consideration billion for theof =4.3P assignment billion allocatedof certain as advances follows: of (i) ACR P=2.4 tobillion ATEC. for the common shares and (ii) =1.9P billion for the assignment of certain advances of ACR to ATEC. ATEC has ownership in the following companies: (i) 75% in Sarangani Energy Corporation which ATECowns a has2x118.5 ownership MW (grossin the capacity)following baseload companies: coal-fired (i) 75% (with in Sarangani the second Energy 118.5 Corporation MW unit declaring which ownscommercial a 2x118.5 operations MW (gross on October capacity) 10, baseload 2019) in coal-fired Maasim, (withSarangani the second Province; 118.5 (ii) MW 100% unit in declaringSan commercialRamon Power, operations Inc. (SRPI) on October which is 10, developing 2019) in aMaasim, 120 MW Sarangani baseload Province;coal-fired (ii)plant 100% in Zamboanga in San RamonCity; and Power, (iii) 100% Inc. (SRPI) in ACES which Technical is developing Services a Corporation.120 MW baseload coal-fired plant in Zamboanga City; and (iii) 100% in ACES Technical Services Corporation. In July and August 2020, ATEC declared dividends of which =540P million was attributable to GBPC. In July and August 2020, ATEC declared dividends of which =540P million was attributable to GBPC. As disclosed in Note 1, GBPC qualified as a group held for deemed disposal as of December 31, As2020. disclosed Accordingly, in Note the 1, GBPCinvestment qualified in ATEC as a group(including held forthe deemedadvances) disposal was included as of December in the “Assets 31, 2020.under PFRS Accordingly, 5” (see Notethe investment 33). in ATEC (including the advances) was included in the “Assets under PFRS 5” (see Note 33). DMT DMT is a major toll road operator in Bangkok, Thailand. The concession for DMT runs until 2034 forDMT the is operation a major toll of a road 21.9-kilometer operator in six-laneBangkok, elevated Thailand. toll Theroad concession from central for Bangkok DMT runs to Donuntil Muang2034 Internationalfor the operation Airport of a and21.9-kilometer further to the six-lane National elevated Monument, toll road north from of centralBangkok. Bangkok to Don Muang International Airport and further to the National Monument, north of Bangkok. On February 16, 2021, FPM Tollway (Thailand) Limited (FPM), a 100% indirect subsidiary of MPTC,On February entered 16, into 2021, SPAs FPM with Tollway several (Thailand) third parties Limited for the (FPM), sale of a its 100% 100% indirect ownership subsidiary in AIF of Toll RoadsMPTC, Holdings entered into (Thailand) SPAs with Co., several Ltd. (AIF). third partiesThe total for price the sale for sharesof its 100% amounted ownership to US$ in 149.3 AIF Tollmillion (equivalentRoads Holdings to approximately (Thailand) Co., =7.2P Ltd. billion) (AIF). which The wastotal paid price in for cash shares by the amounted buyers onto US$ 149.3 million February(equivalent 19, to 2021, approximately the closing =7.2P date billion) of the transaction.which was paid The in transaction cash by the resulted buyers to on a disposal of 100% ownership,February 19, upon 2021, which, the closing the consolidation date of the transaction.of these entities The also transaction ceases. resultedAIF owns to approximatelya disposal of 100% ownership, upon which, the consolidation of these entities also ceases. AIF owns approximately *SGVFSM006036* *SGVFSM006036*

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29.45% of the outstanding shares of DMT. Effective February 2021, DMT is no longer an associate of29.45% the Company. of the outstanding shares of DMT. Effective February 2021, DMT is no longer an associate of the Company. CII B&R CII B&R and its subsidiaries are primarily engaged in the construction, development and operation in urbanCII B&R infrastructure and its subsidiaries sector under are primarilythe BOT contractsengaged inand the built-transfer construction, contracts. development CII B&R and operationis in urbanincorporated infrastructure in Vietnam sector and under listed the in BOT Ho Chi contracts Minh Cityand built-transferStock Exchange. contracts. CII B&R is incorporated in Vietnam and listed in Ho Chi Minh City Stock Exchange. The fair value of CII B&R shares held by the Company (including the equivalent shares of the potentialThe fair value voting of rights) CII B&R based shares on quoted held by market the Company price amounted (including to VND5,980the equivalent billion shares (P=12.4 of the billion) potentialand VND3,423 voting billionrights) (P=7.5based billion) on quoted as at market December price 31,amounted 2020 and to VND5,9802019, respectively. billion (P=12.4 billion) and VND3,423 billion (P=7.5 billion) as at December 31, 2020 and 2019, respectively. JLB JLB is a toll road company that operates a 9.7 km length toll road that connects Kebon Jeruk (West JLBJakarta) is a withtoll road Penjaringan company (Soekarno- that operates Hatta a 9.7 International km length tollAirport road area, that connectsCengkareng). Kebon Jeruk (West Jakarta) with Penjaringan (Soekarno- Hatta International Airport area, Cengkareng).

*SGVFSM006036* *SGVFSM006036*

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Material Investees – Summarized Financial Information The tables below provide summarized financial information for the Company’s material investees. The information disclosed reflects the amounts presented in the financial statements of the relevant investees and not the Company’s share of those amounts.

December 31, 2020 December 31, 2019

MERALCO MPHHI DMT CII B&R JLB MERALCO MPHHI ATEC DMT CII B&R JLB (In Millions) Summarized statements of financial position Current assets P=128,382 P=6,502 P=1,034 P=1,372 P=2,274 P=117,689 P=7,991 P=3,815 P=1,073 P=2,017 P=2,464 Non-current assets(a) 267,689 29,122 24,473 11,190 14,832 246,000 22,416 28,248 25,385 16,454 16,070 Current liabilities 142,601 6,686 5,873 3,328 186 127,561 5,879 7,827 6,092 4,894 201 Non-current liabilities 168,676 4,279 992 6,125 6,597 146,218 2,919 16,469 1,029 9,006 7,148 Net assets 84,794 24,659 18,642 3,109 10,323 89,910 21,609 7,767 19,337 4,571 11,185 Less: Equity attributable to NCI (1,494) (5,999) – – – (1,011) (3,217) (2,689) – – – Net assets attributable to common shareholders of investee 83,300 18,660 18,642 3,109 10,323 88,899 18,392 5,078 19,337 4,571 11,185 Ownership interest in investee 45.47% 20.00% 29.45% 44.94% 35.00% 45.47% 20.00% 50.00% 29.45% 44.94% 35.00% MPIC’s share in net assets of investee 37,877 3,732 5,490 1,397 3,613 40,422 3,678 2,539 5,695 2,054 3,915 Goodwill and other adjustments 86,946 13,008 1,598 1,310 1,340 87,087 13,017 229 1,571 1,310 1,340 Carrying amount of the Company’s investment P=124,823 P=16,740 P=7,088 P=2,707 P=4,953 P=127,509 P=16,695 P=2,768 P=7,266 P=3,364 P=5,255

Statements of comprehensive income Revenues P=275,304 P=14,809 P=3,285 P=1,054 P=1,358 P=318,315 P=15,921 P=5,411 P=4,668 P=1,109 P=1,919 Income before income tax 22,415 608 1,218 (150) 452 31,915 2,560 1,303 1,977 (135) 727 Net income (loss) 16,149 339 904 (160) 317 23,372 1,762 1,225 1,511 (210) 509 OCI (loss) (4,299) (28) (1,357) (825) (972) (2,998) (81) (13) 672 687 9 Total comprehensive income (loss) 11,850 311 (453) (985) (655) 20,374 1,681 1,212 2,183 477 518 Total comprehensive income attributable to common shareholders of investee 12,017 217 (453) (985) (655) 20,287 1,377 902 2,183 477 518 Dividends received 7,733 – 71 214 72 8,229 – 277 202 – 128 (a) Includes “Investments in associates”

*SGVFSM006036* 148 - 40 - - 40 -

Individually immaterial investees. The Company has interests in the following individually immaterialIndividually investments immaterial ininvestees associates. The and Company joint ventures: has interests in the following individually immaterial investments in associates and joint ventures: Place of Ownership Interest in % PlaceIncorporation of Principal Activities Ownership2020 Interest 201in %9 Associates: Incorporation Principal Activities 2020 2019 Associates: Water (a) WaterEquiPacific HoldCo Inc. (EHI) Philippines Investment holding/ Water 30.0 30.0 Tuan Loc Water Resources Investment(a) Joint Stock Vietnam Investment holding/ Water EquiPacific HoldCo Inc.(b) (EHI) Philippines Investment holding/ Water 30.0 30.0 Tuan Company Loc Water (TLW) Resources Investment Joint Stock Vietnam Investment holding/ Water 49.0 49.0 (c) Manila Company Water (TLW)Consortium(b) Inc. (MWCI) Philippines Investment holding/ Water 39.0 39.049.0 (c) 49.0 Karayan Diliman Management, Inc. (KDMI)(c) Philippines Engineering consultancy 40.0 40.0 Manila Water Consortium Inc. (MWCI) (c) Philippines Investment holding/ Water 39.0 39.0 WatergyKarayan DilimanBusiness Management, Solutions, Inc. Inc. (WBSI) (KDMI) (c) Philippines EngineeringInvestment holding/ consultancy Water – 40.049.0 (h) 40.0 WatergyPT Tirta KencanaBusiness CahayaSolutions, Mandiri Inc. (WBSI) (TKC) (c) PhilippinesIndonesia WaterInvestment treatment holding/ Water 28.0– 28.049.0 Others (h) PT Tirta Kencana Cahaya (d)Mandiri (TKC) Indonesia Water treatment 28.0 28.0 Others AF Payments Inc. (AFPI) Philippines Operator of contactless payment AF Payments Inc. (AFPI) (d) Philippines Operatorsystem of contactless payment 20.0 20.0 Indra Philippines, Inc. (Indra Phils.) (e) Philippines Management and IT consultancy 25.0 25.0 (f) system 20.0 20.0 CostaIndra Philippines,De Madera Inc. (Indra Phils.) (e) Philippines ManagementReal estate and IT consultancy 62.0 25.062.0 (i) 25.0 CostaPT Intisentosa De Madera Alam(f) Bahtera (IAB) PhilippinesIndonesia PortReal servicesestate 62.039.0 39.062.0 FirstPT Intisentosa Gen Northern Alam Energy Bahtera Corp. (IAB) (FGNEC)(i) IndonesiaPhilippines PortUnder services liquidation (corporate 39.0 39.0 First Gen Northern Energy Corp. (FGNEC) Philippines Underlife liquidation ended December (corporate 31, 2016)life ended December 31, 33.3 33.3 Metro Pacific Land Holdings, Inc. Philippines Under2016) liquidation (corporate 33.3 33.3 Metro Pacific Land Holdings, Inc. Philippines Underlife liquidation ended July (corporate 31, 2019) 49.0 49.0 PH Renewables, Inc. (see Note 33) Philippines Powerlife Generation ended July 31, 2019) 26.549.0 49.0– Joint Ventures:PH Renewables, Inc. (see Note 33) Philippines Power Generation 26.5 – Joint Others Ventures: (g) OthersLandco Pacific Corporation (Landco) Philippines Real estate 38.1 38.1 Landco Pacific Corporation (Landco) (g) Philippines Real estate 38.1 38.1 a. EHI and the Laguna Water District (LWD) entered into a Joint Venture Agreement a. (JVEHI Agreement)and the Laguna on November Water District 3, 2015. (LWD) Pursuant entered to into the JVa Joint Agreement, Venture EHIAgreement and LWD, at (JVownership Agreement) interest on of November 90% and 3,10%, 2015. respectively, Pursuant toestablished the JV Agreement, Laguna Water EHI andDistrict LWD, Aquatech at Resourcesownership Corp.interest (LARC) of 90% which and 10%, shall respectively, be responsible established for the financing, Laguna Water rehabilitation, District Aquatech improvement,Resources Corp. expansion, (LARC) operationwhich shall and be maintenance responsible forof LWD’sthe financing, water supplyrehabilitation, system. Theimprovement, JV Agreement expansion, is for aoperation term of twenty-five and maintenance (25) years of LWD’s from January water supply 1, 2016. system. The JV Agreement is for a term of twenty-five (25) years from January 1, 2016. b. On June 11, 2018, MPW completed the acquisition of 49% of the outstanding capital stock of b. TLW.On June The 11, transaction 2018, MPW was completed completed the through acquisition the acquisition of 49% of theof 37,926,000 outstanding shares capital from stock an of existingTLW. The shareholder transaction of wasTLW completed for VND866 through billion the (equivalent acquisition to of =2P 37,926,000 billion). TLWshares is from one anof the existinglargest water shareholder companies of TLW in Vietnam, for VND866 with 310billion MLD (equivalent of installed to =2Pcapacity billion). and TLW a billed is onevolume of the of approximatelylargest water companies 102 MLD in for Vietnam, the year withended 310 December MLD of 31,installed 2020. capacity and a billed volume of approximately 102 MLD for the year ended December 31, 2020. c. MPW has investments in the following entities which were fully impaired as of c. DecemberMPW has investments31, 2020 and in 2019 the following (see Note entities24): which were fully impaired as of Decemberƒ MWCI 31, has 2020 51.0% and voting 2019 interest(see Note and 24): 70.6% economic interest in Cebu Manila Water ƒ Development,MWCI has 51.0% Inc. voting(CMWD). interest CMWD and 70.6% has a economic20-year Water interest Purchase in Cebu Agreement Manila Water with the MetropolitanDevelopment, Cebu Inc. (CMWD).Water District CMWD for the has supply a 20-year of 18 Water million Purchase liters of Agreement water per daywith for the the firstMetropolitan year and Cebu35 million Water liters District of water for the per supply day for of years 18 million two (2) liters up toof twentywater per (20). day CMWD for the firstmade year its initialand 35 delivery million ofliters water of waterin January per day 2015. for yearsAs of twoDecember (2) up to31, twenty 2019, (20).MPW CMWD made a fullmade impairment its initial delivery provision of amounting water in January to =172P 2015. million As givenof December the initiated 31, 2019, contract MPW termination made a offull MWCI’s impairment Joint provision Investment amounting Agreement to =172P by the million Cebu givenProvincial the initiated Government. contract termination of MWCI’s Joint Investment Agreement by the Cebu Provincial Government.

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ƒ KDMI was incorporated in 2016 with MPW investing =40P million. In 2019, with continuing ƒ KDMIlosses and was accumulated incorporated deficit, in 2016 MPW with recognizedMPW investing full impairment =40P million. on In investment 2019, with and continuing lossesadvances and amounting accumulated to =15Pdeficit, million MPW and recognized P=10 million, full respectively. impairment on investment and advances amounting to =15P million and P=10 million, respectively. ƒ In December 2015, MPW completed the acquisition of common shares representing 49% ƒ ownershipIn December stake 2015, in WBSIMPW fromcompleted seller, the MacroAsia acquisition Properties of common Development shares representing Corporation 49% ownership(MAPDC). stake WBSI in isWBSI a party from to theseller, Contractual MacroAsia Joint Properties Venture Development Agreement (Contractual Corporation JVA) which(MAPDC). purpose WBSI was isto a develop party to a the bulk Contractual water supply Joint project Venture to beAgreement sourced from (Contractual the JVA) Maragondonwhich purpose River. was to In develop 2019, with a bulk no waterdevelopment supply projectsince acquisition to be sourced of the from investment, the MPW Maragondonrecognized impairment River. In 2019,of P=30 with million. no development since acquisition of the investment, MPW recognized impairment of P=30 million. In August 2020, MPW sold back all of WBSI common shares to MAPDC for a total considerationIn August 2020, of =37.1PMPW million.sold back MAPDC all of WBSI and MPWcommon also shares terminated to MAPDC the Cooperation for a total Agreementconsideration that of governs =37.1P million. the joint MAPDC conduct andof due MPW diligence also terminated investigation the Cooperationof opportunities in AgreementDumaguete. that As governs a result, the MPW joint reimbursed conduct of MAPDC due diligence for expenses investigation incurred of opportunitiesin the engagement in ofDumaguete. advisors and As other a result, business MPW development reimbursed MAPDCactivities foramounting expenses to incurred P=15.8 million. in the engagement of advisors and other business development activities amounting to P=15.8 million. d. AFPI was granted the rights and obligations to design, finance, construct, operate, and maintain d. AFPIthe Automated was granted Fare the Collection rights and System obligations (AFCS) to design, Project finance, for LRT-1, construct, LRT-2, operate, and Metro and Railwaymaintain Transitthe Automated Line 3 (MRT-3). Fare Collection The AFCS System Project (AFCS) accommodates Project for LRT-1, a contactless LRT-2, smartcard and Metro technology Railway forTransit stored Line value 3 (MRT-3). ridership andThe contactlessAFCS Project medium accommodates technology a contactlessfor single journey smartcard ridership. technology This forsystem stored shall value be expandableridership and to contactlessallow the inclusion medium oftechnology accepted participantsfor single journey and issuers ridership. into aThis genericsystem shallmicropayment be expandable solution to allow fulfilling the inclusion other commercial of accepted functions. participants AFPI and had issuers its Full into System a Acceptancegeneric micropayment (FSA) on December solution fulfilling 16, 2015. other Unless commercial otherwise functions. extended AFPIor terminated had its Full in System accordanceAcceptance with(FSA) the on Service December Concession 16, 2015. Agreement, Unless otherwise the concession extended period or terminated shall commence in on accordanceFSA date and with end the 10 Service years from Concession the FSA Agreement, date. In 2020 the and concession 2019, due period to the shall lower commence than expected on penetrationFSA date and rate end into 10 the years micropayments from the FSA business, date. In the2020 Company and 2019, recognized due to the additional lower than allowance expected forpenetration decline inrate value into of the investment micropayments amounting business, to =60P the million Company and recognizedP=94 million, additional respectively allowance (see forNote decline 24). in value of investment amounting to =60P million and P=94 million, respectively (see Note 24). e. Indra Phils. is a subsidiary of Indra Sistemas, S.A., which has international knowledge, e. experienceIndra Phils. and is a tracksubsidiary record of in Indra the information Sistemas, S.A., technology which hasbusiness. international Indra Phils.knowledge, is one of the leadingexperience providers and track of informationrecord in the technology information solutions technology to various business. businesses Indra Phils. and industries is one of thein the leadingPhilippines, providers with engagementsof information in technology utilities and solutions telecommunications, to various businesses financial andservices industries and public in the administration.Philippines, with engagements in utilities and telecommunications, financial services and public administration. f. Neo Oracle Holdings, Inc. (NOHI) has 62% interest in Costa de Madera but was accounted for as f. Neoan investment Oracle Holdings, in associate Inc. as(NOHI) control has and 62% management interest in restsCosta with de Madera the other but shareholders was accounted of Costa for as dean investmentMadera. in associate as control and management rests with the other shareholders of Costa de Madera. g. Landco is primarily engaged in all aspects of real estate business which includes real estate g. Landcoconsultancy is primarily encompassing engaged project in all managementaspects of real and estate business business planning which services; includes dealingreal estate in and disposingconsultancy of encompassingall kinds of real project estate managementprojects involving and business commercial, planning industrial, services; urban, dealing residential in and or otherdisposing kinds of of all real kinds property; of real construction,estate projects management, involving commercial, operation and industrial, leasing urban,tenements residential of the or corporationother kinds ofor realother property; persons; construction, and acting as management, real estate broker operation on a commissionand leasing tenementsbasis. of the corporation or other persons; and acting as real estate broker on a commission basis.

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Additional allowance in decline in value with respect to various interests in Landco of AdditionalP=1,403.2 million allowance was recognizedin decline in in value 2020. with The respect impairment to various loss comprisesinterests in of Landco write-down of of the P=1,403.2following million assets towas zero: recognized (i) advances in 2020. to Landco The impairment amounting lossto =1,043.4P comprises million; of write-down and (ii) of the followingreceivables assets from toAB zero: Holdings (i) advances Corporation to Landco (ABHC; amounting a shareholder to =1,043.4P in Landco) million; amounting and (ii) to receivablesP=359.8 million from included AB Holdings under theCorporation “Other noncurrent (ABHC; aassets” shareholder account. in Landco) With the amounting impact of to P=359.8COVID-19 million on theincluded real estate, under hospitality the “Other and noncurrent tourism assets”industries account. and with With the thedecision impact to of no longer COVID-19push through on with the realthe investmentestate, hospitality agreement and withtourism Dusit industries (which projectsand with would the decision have made to no use longer of pushcertain through Landco with assets), the investment management agreement performed with an Dusit impairment (which testing projects for would its advances have made in Landco use of certainand receivable Landco fromassets), ABHC. management The recoverable performed amount an impairment of the advances testing forto Landco its advances together in Landco with the andreceivable receivable from from ABHC ABHC. was measured The recoverable using the amount estimate of theof the advances VIU of to the Landco investment together in joint with the receivableventure. The from valuation ABHC analysis was measured involved using discounting the estimate estimates of the ofVIU free of cash the investmentflows by the in joint venture.appropriate The discount valuation rate analysis that reflects involved the discountingrisk and return estimates profile ofof freeLandco cash as flows of testing by the date. The appropriateestimates of discount cash flows rate comprise that reflects revenue the risk projections, and return related profile costs of Landco and expenses, as of testing net working date. The estimatescapital requirements of cash flows and comprise capital expenditures revenue projections, expected related to be incurred costs and from expenses, Landco’s net projects.working capitalThese cash requirements flows were and discounted capital expenditures using pre-tax expected weighted to beaverage incurred cost from of capital Landco’s of 14.8% projects. as the Thesediscount cash rate flows as of were testing discounted date. using pre-tax weighted average cost of capital of 14.8% as the discount rate as of testing date. h. TKC owns a Water Treatment Plant at Cikokol, Tangerang, Banten, which operates at h. TKC1,275 owns liter pera Water second Treatment capacity Plantbulk waterat Cikokol, supplying Tangerang, clean water Banten, to PDAM which operatesTirta Kerta at Raharja 1,275(TKR) liter Tangerang. per second capacity bulk water supplying clean water to PDAM Tirta Kerta Raharja (TKR) Tangerang. i. IAB is mainly engaged in the port services, warehousing, loading and unloading services, and i. IABstorage is mainlytank rental engaged services in the with port its services, operations warehousing, located in Lampung. loading and unloading services, and storage tank rental services with its operations located in Lampung. The following table analyzes, in aggregate, the Company’s share in the net income and OCI of these Theindividually following immaterial table analyzes, investees in aggregate, for the years the endedCompany’s December share 31: in the net income and OCI of these individually immaterial investees for the years ended December 31: 2020 2019 Joint Venture2020 Associate Joint Venture2019 Associate Joint Venture Associate (In Millions)Joint Venture Associate Carrying amount of investment P= – P=3,162 (In Millions) P=– P=3,166 CarryingShare in: amount of investment P= – P=3,162 P=– P=3,166 ShareNet in: income (loss) – (14) – 5 NetOCI income (loss) – (109)(14) – (74)5 OCITotal comprehensive loss – (109)(123) – (74)(69) Total comprehensive loss – (123) – (69) The following table summarizes, in aggregate, the assets and liabilities of these individually Theimmaterial following investees: table summarizes, in aggregate, the assets and liabilities of these individually immaterial investees: 2020 2019 Joint Venture2020 Associate Joint Venture2019 Associate Joint Venture Associate (In Millions)Joint Venture Associate Current assets P=3,246 P=2,752 (In Millions) P=3,329 P=2,960 CurrentNoncurrent assets assets P=3,246716 P=2,7525,817 P=3,3291,972 P=2,9609,652 NoncurrentCurrent liabilities assets 1,418716 5,8172,052 1,9721,601 9,6521,786 CurrentNoncurrent liabilities liabilities 1,4182,756 2,0523,337 1,6012,284 1,7864,380 NoncurrentDividend income liabilities 2,756– 3,337– 2,284– 4,380117 Dividend income – – – 117 Other transactions with these individually immaterial investees are disclosed in Note 19. Other transactions with these individually immaterial investees are disclosed in Note 19.

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11. Goodwill and Intangible Assets 11. Goodwill and Intangible Assets 2020 Intangible2020 Assets Customer Intangible Assets Goodwill CustomerContracts Others Total Goodwill Contracts (In Millions)Others Total Cost: (In Millions) Cost:Balance at beginning of year P=25,868 P=3,850 P=859 P=4,709 BalanceAdjustment at beginning(see Note of 4) year P=25,868(176) P=3,850− P=859− P=4,709− AdAdditionsjustment (see Note 4) (176)74 − 43− 43− AssetsAdditions under PFRS 5 74 − 43 43 Assets(see under Note PFRS 33) 5 − (3,417) (38) (3,455) Exchange(see Note differences 33) (70)− (3,417)− (38)− (3,455)− BalanceExchange at differences end of year 25,696(70) 433− 864− 1,297− Accumulated Balance atamortization: end of year 25,696 433 864 1,297 AccumulatedBalance atamortization: beginning of year − 1,046 364 1,410 BalanceAdditions at (see beginning Note 21) of year − 1,046163 36483 1,410246 AssetsAdditions under (see PFRS Note 521) − 163 83 246 Assets(see under Note PFRS 33) 5 − (1,056) (31) (1,087) Balance(see at Note end 33)of year − (1,056)153 (31)416 (1,087)569 Impairment:Balance at end of year − 153 416 569 Impairment:Balance at beginning of year 10,192 20 − 20 AdditionsBalance at (see beginning Notes 14of yearand 24) 10,192167 20− −3 203 BalanceAdditions at (see end Notesof year 14 and 24) 10,359167 20− 3 233 Balance at end of year P=15,33710,359 P=26020 P=4453 P=70523 P=15,337 P=260 P=445 P=705 2019 Intangible2019 Assets Customer PropertyIntangible Use Assets Goodwill CustomerContracts PropertyRights Use Others Total Goodwill Contracts Rights(In Millions) Others Total Cost: (In Millions) Cost:Balance at beginning of year P=28,223 P=3,850 P=748 P=904 P=5,502 BalanceAdjustment at beginning (see Note of 4) year P=28,223(722) P=3,850− P=748− P=904− P=5,502− AdditionsAdjustment (see Note 4) (722)337 − − 179− 179− DeconsolidationAdditions of MPHHI (1,963)337 − (748)− (224)179 (972)179 Deconsolidation(see Note 32) of MPHHI (1,963) (748) (224) (972) Exchange(see Note differences 32) (7) − − − − ExchangeBalance at differences end of year 25,868(7) 3,850− − 859− 4,709− AccumulatedBalance atamortization: end of year 25,868 3,850 − 859 4,709 Accumulated Balance atamortization: beginning of year − 866 307 432 1,605 BalanceAdditions at (see beginning Note 2 of1) year − 180866 30737 43293 1,605310 DeconsolidationAdditions (see Note of MPHHI 21) − 180 37 93 310 Deconsolidation(see Note 32) of MPHHI − − (344) (161) (505) Balance(see at Note end 32)of year − 1,046− (344)− (161)364 1,410(505) Impairment:Balance at end of year − 1,046 − 364 1,410 Impairment: Balance at beginning of year 367 − − − − BalanceAddition ats (seebeginning Notes 14of yearand 24) 9,825367 20− − − 20− AdditionBalance ats (seeend Noteof years 14 and 24) 10,1929,825 20 − − 20 Balance at end of year P=10,19215,676 P=2,78420 P=− P=495− P=3,27920 P=15,676 P=2,784 P=− P=495 P=3,279

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Goodwill. The carrying amount of goodwill allocated to each of the CGU (determined to be at the subsidiaryGoodwill. level)The carrying as of December amount of 31: goodwill allocated to each of the CGU (determined to be at the subsidiary level) as of December 31: 2020 2019 2020 (In Millions) 2019 Power: (In Millions) Power:RPSL P=153 P=164 TollRPSL operations: P=153 P=164 Toll MPTC/operations: Tollways Management MPTC/Corporation Tollways(TMC) Management 8,859 8,859 CICCorporation (TMC) 8,8594,966 8,8594,966 PTCIC Nusantara 4,966855 4,966914 EasytripPT Nusantara Services Corporation (ESC) 388855 388914 DibzEasytriptech Services(see Note Corporation 4) (ESC) 38874 388– DibzSESItech (see(see Note Note 4) 4) 7442 42– Water:SESI (see Note 4) 42 42 Water:PNW (see Note 4) – 287 Logistics:PNW (see Note 4) – 287 Logistics:PremierLogisctics, Inc. (Premier) – 56 PremierLogisctics, Inc. (Premier) P=15,337– P=15,67656 P=15,337 P=15,676 Goodwill acquired from certain acquisition in 2019, which included acquisition of PNW, is based on provisionalGoodwill acquired values. from The purchasecertain acquisition price allocation in 2019, for which the acquisition included acquisitionof PNW was of finalizedPNW, is inbased 2020 on provisional(see Note 4). values. Goodwill The acquiredpurchase from price certain allocation acquisition for the acquisitionin 2020, which of PNW included was finalizedacquisition in of2020 Dibztech,(see Note 4).is based Goodwill on provisional acquired fromvalues certain and will acquisition be finalized in 2020, in 2021. which included acquisition of Dibztech, is based on provisional values and will be finalized in 2021. An impairment charge of =167P million and P=9,825 million was recognized in 2020 and 2019, respectively.An impairment Impairment charge of =167Panalyses million are providedand P=9,825 in Notemillion 14. was recognized in 2020 and 2019, respectively. Impairment analyses are provided in Note 14. Customer Contracts. The customer contracts were acquired as part of a business combination. They areCustomer recognized Contracts. at their The fair customervalue at the contracts date of wereacquisition acquired and as are part subsequently of a business amortized combination. on a They straight-lineare recognized over at their fairestimated value atuseful the date lives. of Asacquisition disclosed and in Noteare subsequently 1, GBPC qualified amortized as a on group a straight-lineheld for deemed over disposal their estimated as of December useful lives. 31, 2020. As disclosed Accordingly, in Note the 1, customerGBPC qualified contracts as attributablea group toheld MPIC’s for deemed acquisition disposal of GBPCas of December was included 31, 2020.in the “AssetsAccordingly, under the PFRS customer 5” (see contracts Note 33). attributable to MPIC’s acquisition of GBPC was included in the “Assets under PFRS 5” (see Note 33). In 2019, the cash flow projections for MMI’s logistics business have been impacted by the InCompany’s 2019, the decisioncash flow to projections rationalize forand MMI’s scale-down logistics its trucking business and have freightforwarding been impacted by businesses. the ImpairmentCompany’s decisionloss of P=20 to rationalizemillion was and recognized scale-down to write-downits trucking theand logistics freightforwarding contracts that businesses. were acquiredImpairment as partloss ofof theP=20 business million combinationwas recognized (see to Note write-down 24). the logistics contracts that were acquired as part of the business combination (see Note 24). Property Use Rights. Certain subsidiaries entered into lease agreements for the operation and managementProperty Use of Rights. hospitals. Certain The subsidiaries lease agreements entered qualified into lease as agreementsbusiness combinations for the operation where and the managementidentifiable assets of hospitals. consist of The property lease agreements use rights for qualified the use as of business existing combinationsland and building where over the the term ofidentifiable the lease. assets Property consist use ofrights property attributable use rights to the for entities the use ofof theexisting Healthcare land and segment building were over the term derecognizedof the lease. Propertyin relation use ot rights the dilution attributable in MPIC’s to the investmententities of thein MPHHIHealthcare in 2019 segment (see wereNote 32). derecognized in relation ot the dilution in MPIC’s investment in MPHHI in 2019 (see Note 32). Other Intangible Assets. Comprises of license and technology, software and franchise. OtherThe basketball Intangible franchise Assets. amountingComprises P=100of license million and represents technology, cost software of MPTC’s and basketballPhilippine franchise.Basketball TheAssociation basketball Franchise franchise named amounting “NLEX P=100 Road million Warriors” represents and is cost not beingof MPTC’s amortized Philippine but is testedBasketball annuallyAssociation for Franchiseimpairment named (see Note“NLEX 14). Road Warriors” and is not being amortized but is tested annually for impairment (see Note 14).

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12. Service Concession Assets 12. Service Concession Assets This account consists of the following: This account consists of the following: 2020 2019 2020 (In Millions) 2019 Water: (In Millions) Water:Maynilad P=102,194 P=97,347 MPIWIMaynilad P=102,1941,703 P=97,3471,656 MPIWIPNW (see Note 4) 1,7031,720 1,6561,365 MIBWSCPNW (see Note 4) 1,0811,720 1,0421,365 PHIMIBWSC 1,081510 1,042475 PHIPT Nusantara 510426 475469 MPDWPT Nusantara 42698 46939 TollMPDWoperations: 98 39 TollNLEXoperations Corp.: (NLEX, SCTEX and Connector) 51,991 45,093 MPCALANLEX Corp. (CALAX)(NLEX, SCTEX and Connector) 36,92451,991 32,52245,093 CCLECMPCALA (CCLEX) (CALAX) 19,35936,924 32,5229,706 PTCCLEC Nusantara (CCLEX) 17,39219,359 14,9469,706 PTCIC Nusantara (CAVITEX) 17,39211,748 14,94610,898 Rail:CIC (CAVITEX) 11,748 10,898 Rail:LRMC (LRT-1) 30,718 24,931 LRMC (LRT-1) P=275,86430,718 P=240,48924,931 P=275,864 P=240,489 The movements in the service concession assets follow: The movements in the service concession assets follow: 2020 Water Toll 2020 Rail Total Water Toll(In Millions) Rail Total Cost: (In Millions) Cost:Balance at beginning of year P=143,302 P=122,803 P=24,931 P=291,036 BalanceAdditions at beginning of year P=143,3028,256 P=122,80319,723 P=24,9314,135 P=291,03632,114 AdditionsAdditions: PPA finalization (see Note 4) 8,256364 19,723– 4,135– 32,114364 Additions:Capitalized PPAborrowing finalization cost (see Note 4) 364671 6,851– 1,652– 9,174364 CapitalizedExchange differences borrowing cost 671(73) 6,851(989) 1,652– (1,062)9,174 ExchangeBalance at differences end of year 152,520(73) 148,388(989) 30,718– 331,626(1,062) AccumulatedBalance at amortization:end of year 152,520 148,388 30,718 331,626 AccumulatedBalance at amortization:beginning of year 29,492 9,638 – 39,130 BalanceAdditions at (see beginning Note 21) of year 29,4923,881 9,6381,380 – 39,1305,261 AdditionsExchange (seedifferences Note 21) 3,881(8) 1,380(44) – 5,261(52) ExchangeBalance at differences end of year 33,365(8) 10,974(44) – 44,339(52) Impairment:Balance at end of year 33,365 10,974 – 44,339 Impairment:Balance at beginning of year 11,417 – – 11,417 BalanceAdditions at (see beginning Notes 14of yearand 24) 11,4176 – – 11,4176 AdditionsBalance at (see end Notesof year 14 and 24) 11,4236 – – 11,4236 Balance at end of year P=107,73211,423 P=137,414– P=30,718– P=275,86411,423 P=107,732 P=137,414 P=30,718 P=275,864

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2019 Water Toll 2019 Rail Total Water Toll(In Millions) Rail Total Cost: (In Millions) Cost:Balance at beginning of year P=127,001 P=96,409 P=16,204 P=239,614 AdditionsBalance at beginning of year P=127,00114,425 P=96,40922,682 P=16,2047,557 P=239,61444,664 Additions: Step acquisition (see Note 4) 14,4251,363 22,682– 7,557– 44,6641,363 AdditionsAdditions:: SPPAtep acquisitionfinalization (see(see NoteNote 4)4) 1,36358 393– – 1,363451 AdditionCapitalizeds: PPAborrowing finalization cost (see Note 4) 51958 3,322393 1,170– 5,011451 CapitalizedExchange differences borrowing cost 519(64) 3,322(3) 1,170– 5,011(67) ExchangeBalance at differences end of year 143,30(64)2 122,80(3) 24,931– 291,036(67) AccumulatedBalance at amortization:end of year 143,302 122,803 24,931 291,036 AccumulatedBalance at amortization:beginning of year 25,667 7,955 – 33,622 BalanceAdditions at (see beginning Note 21) of year 25,6673,824 7,9551,696 – 33,6225,520 Additions :(seePPA Note finalization 21) (see Note 4) 3,8241 1,6956 – 5,5206 AdditionsExchange :differencesPPA finalization (see Note 4) 1– (158) – (168) ExchangeBalance at differences end of year 29,492– 9,638(18) – 39,130(18) Impairment:Balance at end of year 29,492 9,638 – 39,130 Impairment:Balance at beginning of year – – – – BalanceAdditions at (see beginning Notes 14of yearand 24) 11,417– – – 11,417– AdditionsBalance at (see end Noteof years 14 and 24) 11,417 – – 11,417 Balance at end of year P=102,3911,4173 P=113,165– P=24,931– P=240,48911,417 P=102,393 P=113,165 P=24,931 P=240,489 Service concession assets that are not yet available for use are subjected to impairment testing under PASService 36, concessionImpairment assets of Assets that are(see not Note yet 14). available for use are subjected to impairment testing under PAS 36, Impairment of Assets (see Note 14). Service concession assets still under on-going construction and rehabilitation (see Note 29) amounting to P=91,926Service concession million and assets P=80,998 still millionunder on-going as at December construction 31, 2020 and andrehabilitation 2019, respectively, (see Note are 29) considered amounting as to contractP=91,926 assetsmillion under and P=80,998PFRS 15. million Details as ofat theDecember significant 31, provisions2020 and 2019, of the respectively, service concession are considered as arrangementscontract assets are under provided PFRS in15. Note Details 29. of the significant provisions of the service concession arrangements are provided in Note 29.

13. Property, Plant and Equipment 13. Property, Plant and Equipment This account consists of: This account consists of: Assets under Disposals/ January 1, PFRS 5 Reclassi- December 31, (a) Assets under Disposals/(b) January2020 1, Additions (NotePFRS 33 5) ficationsReclassi- December2020 31, 2020 Additions(a) (In Millions)(Note 33) fications(b) 2020 Cost (In Millions) CostLand and land improvements P=2,802 P=106 (P=1,327) P=124 P=1,705 GenerationLand and land assets improvements P=57,3172,802 P=106151 (P=1,327)(57,583) P=124115 P=1,705– GenerationBuilding and assets building improvements 57,3172,046 1,450151 (57,583)(248) (1,717)115 1,531– BuildingInstruments, and toolsbuilding and improvementsother equipment 2,0462,578 1,450204 (248)– (1,717)(46) 2,7361,531 Instruments,Office and other tools equipment, and other equipmentfurniture 2,578 204 – (46) 2,736 Officeand and fixtures other equipment, furniture 2,935 305 (255) 5 2,990 Transportationand fixtures equipment 2,9352,160 305168 (255)(77) (574)5 1,6772,990 TransportationLeasehold improvements equipment 2,160320 1686 (77)(23) (574)4 1,677307 RightLeasehold of use improvements (ROU) asset 1,505320 1,0496 (74)(23) (130)4 2,350307 Right of use (ROU) asset 71,6631,505 1,0493,439 (59,587)(74) (2,219)(130) 13,2962,350 Accumulated Depreciation 71,663 3,439 (59,587) (2,219) 13,296 AccumulatedGeneration assets Depreciation 7,367 3,220 (10,587) – – BuildingGeneration and assets building improvements 7,367328 3,22087 (10,587)(223) (6)– 186– BuildingInstruments, and toolsbuilding and improvementsother equipment 1,628328 14787 (223)– (29)(6) 1,746186 Instruments,Office and other tools equipment, and other equipmentfurniture 1,628 147 – (29) 1,746 Officeand and fixtures other equipment, furniture 1,795 739 (346) (36) 2,152 and fixtures 1,795 739 (346) (36) 2,152 (Forward) (Forward)

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Assets under Disposals/ January 1, PFRS 5 Reclassi- December 31, (a) Assets under Disposals/(b) January2020 1, Additions (NotePFRS 33 5) ficationsReclassi- December2020 31, 2020 Additions(a) (In Millions)(Note 33) fications(b) 2020 Transportation equipment P=969 P=313 (In Millions)(P=47) (P=271) P=964 TransportationLeasehold and landequipment improvements P=969203 P=31332 (P=47)(7) (P=271)(39) P=964189 LeaseholdROU asset and land improvements 203529 40032 (63)(7) (39)(34) 189832 ROU asset 12,819529 4,938400 (11,273)(63) (415)(34) 6,069832 12,81958,844 (1,499)4,938 (11,273)(48,314) (1,804)(415) 6,0697,227 Allowance for impairment loss 58,844(437) (1,499)– (48,314)– (1,804)– 7,227(437) AllowanceConstruction for-in impairment-progress loss (437)184 390– (223)– (263)– (437)88 Construction-in-progress P=58,591184 (P=1,109)390 (P=48,537)(223) (P=2,067)(263) P=6,87888 P=58,591 (P=1,109) (P=48,537) (P=2,067) P=6,878 Adoption of Deconsolidation Disposals/ January 1, AdoptionNew Lease of Deconsolidationof MPHHI Disposals/Reclassi- December 31, (a) (b) January201 1,9 NewStandard Lease Additions of(Note MPHHI 32) ficationsReclassi- December2019 31, 2019 Standard Additions(In Millions)(a) (Note 32) fications(b) 2019 Cost (In Millions) CostLand and land improvements P=5,222 P=– P=564 (P=2,984) P=– P=2,802 LandGeneration and land assets improvements P=55,0285,222 P=– P=564653 (P=2,984)– 1,636P=– P=57,3172,802 GenerationBuilding and assets building improvements 55,0289,100 – 976653 (8,464)– 1,636434 57,3172,046 BuildingInstruments, and toolsbuilding and improvementsother equipment 9,1007,717 – 1,260976 (8,464)(6,563) 434164 2,0462,578 Instruments,Office and other tools equipment, and other equipmentfurniture 7,717 – 1,260 (6,563) 164 2,578 Officeand and fixtures other equipment, furniture 3,545 – 633 (1,069) (174) 2,935 Transportationand fixtures equipment 3,5451,900 5– 633490 (1,069)(116) (119)(174) 2,9352,160 TransportationLeasehold improvements equipment 1,900708 5– 49082 (116)(559) (119)89 2,160320 LeaseholdROU asset improvements 708– 1,513– 32882 (559)(305) (31)89 1,505320 ROU asset 83,220– 1,5181,513 4,986328 (20,060)(305) 1,999(31) 71,6631,505 Accumulated Depreciation 83,220 1,518 4,986 (20,060) 1,999 71,663 AccumulatedGeneration assets Depreciation 3,964 – 3,127 – 276 7,367 GenerationBuilding and assets building improvements 3,9641,828 – 3,127426 (1,915)– 276(11) 7,367328 BuildingInstruments, and toolsbuilding and improvementsother equipment 3,8081,828 – 995426 (3,016)(1,915) (159)(11) 1,628328 OfficeInstruments, and other tools equipment, and other equipmentfurniture 3,808 – 995 (3,016) (159) 1,628 Officeand and fixtures other equipment, furniture 1,903 – 482 (569) (21) 1,795 Transportationand fixtures equipment 1,903762 – 482344 (569)(62) (21)(75) 1,795969 TransportationLeasehold and landequipment improvements 762360 – 134344 (287)(62) (75)(4) 969203 LeaseholdROU asset and land improvements 360– – 134555 (287)(26) (4)– 529203 ROU asset 12,625– – 6,063555 (5,875)(26) –6 12,819529 12,62570,595 1,518– (1,077)6,063 (14,185)(5,875) 1,9936 58,84412,819 Allowance for impairment loss 70,595(23) 1,518– (1,077)– (14,185)23 1,993(437) 58,844(437) AllowanceConstruction-in-progress for impairment loss 1,354(23) – 1,389– (921)23 (1,638)(437) (437)184 Construction-in-progress P=71,9261,354 P=1,518– 1,389P=312 (P=15,083)(921) (1,638)(P=82) P=58,591184 (a)Includes acquisitions through business combinationP= (see71,926 Note 4) and exchangeP=1,518 differences. P=312 (P=15,083) (P=82) P=58,591 (b)Includes completion of purchase price allocation. (a)Includes acquisitions through business combination (see Note 4) and exchange differences. (b)Includes completion of purchase price allocation. The recognized ROU assets relate to the following types of assets: The recognized ROU assets relate to the following types of assets: December 31, December 31, December2020 31, December2019 31, 2020 (in Millions) 2019 Building and building improvements P=943 (in Millions) P=440 TransportationBuilding and building equipment improvements P=94376 P=139440 TransportationLand equipment 22576 139123 TotalLand ROU assets* P=1,244225 P=702123 Total*Gross ROU of allowance assets for* impairment loss. P=1,244 P=702 *Gross of allowance for impairment loss. In 2019, MMI’s logistics business have been impacted by the Company’s decision to rationalize and scale-downIn 2019, MMI’s its trucking logistics and business freightforwarding have been impacted businesses. by the Impairment Company’s loss decision on warehouses to rationalize leases and and trucksscale-down amounting its trucking P=437 millionand freightforwarding was recognized businesses. for the year Impairment ended December loss on 31, warehouses 2019 (see leasesNote 24). and trucks amounting P=437 million was recognized for the year ended December 31, 2019 (see Note 24).

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In 2020, MMI’s trucking subsidiaries sold 434 trucks (which carrying value as at prior to disposal amountedIn 2020, MMI’s to =306P trucking million subsidiaries for net proceeds sold 434of P=342 trucks million (which (net carrying of transaction value as costs). at prior The to disposalCompany amountedrecorded a togain =306P amounting million for to P=36net proceedsmillion recognized of P=342 million under (net“Others” of transaction account incosts). the statements The Company of comprehensiverecorded a gain incomeamounting for theto P=36 year million ended recognizedDecember 31,under 2020. “Others” account in the statements of comprehensive income for the year ended December 31, 2020. As disclosed in Note 1, GBPC qualified as a group held for deemed disposal as of December 31, 2020.As disclosed Accordingly, in Note the 1, GBPCproperty, qualified plant and as aequipment group held attributable for deemed to disposal MPIC’s as acquisition of December of GBPC 31, were2020. included Accordingly, in the the“Assets property, under plant PFRS and 5” equipment (see Note attributable33). to MPIC’s acquisition of GBPC were included in the “Assets under PFRS 5” (see Note 33).

14. Impairment of Goodwill and Intangible Assets 14. Impairment of Goodwill and Intangible Assets The Company performs its annual impairment test close to year-end, after finalizing the annual financialThe Company budgets performs and forecasts. its annual The impairment key assumptions test close used to year-end,to determine after the finalizing recoverable the annualamount for thefinancial different budgets CGUs and are forecasts. discussed The below. key assumptions used to determine the recoverable amount for the different CGUs are discussed below. Except for the impairment charge on goodwill and service concession assets in 2020 and 2019 (see NoteExcept 11), for management the impairment did chargenot identify on goodwill any other and impairment service concession losses for assets goodwill in 2020 and andand 2019service (see concessionNote 11), management assets nor impairment did not identify for service any other concession impairment assets losses not yet for in goodwill use. Management and and service also believesconcession that assets no reasonably nor impairment possible for change service in concession any of the assetskey assumptions not yet in use. would Management cause the carrying also valuesbelieves of that the noCGUs reasonably and the possibleservice concession change in anyassets of thenot keyyet inassumptions use to materially would exceedcause the their carrying respectivevalues of the recoverable CGUs and amounts. the service concession assets not yet in use to materially exceed their respective recoverable amounts. Goodwill acquired from certain acquisitions in 2020 are based on provisional values (see Note 4). TheGoodwill Company acquired performs from annualcertain impairmentacquisitions testing in 2020 of are the based acquired on provisional goodwill (whether values (see provisionally Note 4). determinedThe Company or final).performs If theannual initial impairment allocation testing of goodwill of the acquiredacquired ingoodwill a business (whether combination provisionally cannot bedetermined reliably madeor final). before If the initialend of allocationthe annual of period goodwill in which acquired the businessin a business combination combination is effected cannot andbe reliably the Company made before assessed the that end thereof the are annual no indicators period in of which impairment, the business such combinationgoodwill may is noteffected be testedand the for Company impairment assessed test until that thatthere allocation are no indicators shall be ofcompleted impairment, before such the goodwill end of the may first not annual be periodtested forbeginning impairment after test the untilacquisition that allocation date. shall be completed before the end of the first annual period beginning after the acquisition date. Goodwill Goodwill Pre-tax Growth Average DiscountPre-tax Growthrate forecastAverage period Discountrate December 31, 2020: rate forecast period rate DecemberToll 31, 2020: 2.5% to 4.8% 8 to 28 years 9.4% to 12.0% Toll (non-concession) 2.5% to 3.0%4.8% 8 toSee 28 belowyears 8.1%9.4% to 12.3%12.0% TollWater (non-concession) See below3.0% See45 belowyears 8.1% to11.29% 12.3% WaterPower 1.2%See to 11.7% below 1745 years 11.29%12.3% Power 1.2% to 11.7% 17 years 12.3% December 31, 2019: DecemberToll 31, 2019: 2.6% to 23.0% 9 to 29 years 13.9% to 20.0% Toll (non-concession) 2.6% to 23.0%2.6% 9 toSee 29 below years 13.9%11.6% to 20.0%11.9% TollWater(non-concession) 2.1% to 2.6%2.4% 16 toSee 18 below years 11.6%11.1% to 11.9%16.0% Water (non-concession) 2.1% to 3.0%2.4% 16 toSee 18 below years 11.1% to 14.4%16.0% WaterLogistics (non-concession) 3.0%2.0% See below 14.4%12.7% LogisticsPower 1.2% to 112.0%.7% See18 below years 12.7%12.2% Power 1.2% to 11.7% 18 years 12.2% In assessing the impairment for goodwill, the Company compares the carrying amounts of the underlyingIn assessing assets the impairment against their for recoverable goodwill, the amounts Company (the compareshigher of the carryingassets’ fair amounts value lessof the costs of disposalunderlying and assets their againstVIU). their recoverable amounts (the higher of the assets’ fair value less costs of disposal and their VIU). *SGVFSM006036* *SGVFSM006036*

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The recoverable amounts for the toll and water businesses have been determined based on VIU calculationsThe recoverable using amounts cash flow for projectionsthe toll and covering water businesses the concession have been periods determined for the Company’s based on VIU water andcalculations toll road using businesses. cash flow The projections discount rates covering applied the to concession cash flow periodsprojections for thereflect Company’s the weighted water averageand toll roadcost ofbusinesses. capital of Thethe relevant discount businesses. rates applied In tothe cash assessment flow projections of the recoverable reflect the amountweighted of the wateraverage and cost toll of road capital businesses, of the relevant their VIUs businesses. were calculated In the assessment based on theirof the cash recoverable flow projections amount asof perthe thewater most and recent toll road financial businesses, budgets their and VIUs forecasts, were calculatedwhich management based on believestheir cash are flow reasonable projections and as are per management’sthe most recent best financial estimates budgets of the and ranges forecasts, of economic which management conditions that believes will exist are reasonable over the forecast and are period.management’s The forecasted best estimates periods of for the the ranges Company’s of economic water conditions and toll road that businesses will exist areover more the forecast than five (5)period. years The as management forecasted periods can reliably for the estimate Company’s the cashwater flows and tollfor theirroad businessesentire concession are more periods. than five The cash(5) years flows as during management the projection can reliably periods estimate are derived the cash using flows estimated for their average entire concessiongrowth rates periods. which doThe notcash exceed flows duringthe long-term the projection average periods growth are rate derived of the industryusing estimated in the country average where growth the rates businesses which do operate.not exceed For the the long-term impairment average testing growth of the rate goodwill of the inindustry PHI in in 2019 the countryamounting where to =245P the businesses million, the operate.projections For are the based impairment on the existingtesting of Bulk the Watergoodwill Supply in PHI Agreements in 2019 amounting and Memorandum to =245P million, of the Agreement.projections are The based forecasted on the periodexisting is Bulk greater Water than Supply five (5) Agreements years as management and Memorandum can reliably of estimate theAgreement. cash flow The for theforecasted entire duration period is of greater PHI’s thanconcession five (5) period years ascovered management by the Bulk can reliably Water Supply estimate Agreementsthe cash flow and for Memorandumthe entire duration of Agreement. of PHI’s concession For the impairment period covered testing by of the the Bulk goodwill Water in Supply PNW in 2020,Agreements assumed and water Memorandum rates are based of Agreement. on contracted For bulkthe impairment water stipulations testing and/orof the goodwillreasonable in estimatesPNW in for2020, tariff assumed increases water with rates the are growth based in on billed contracted volumes bulk in linewater with stipulations technical and/orexpectations. reasonable As a estimates result of thefor tariffanalysis, increases the Company with the recognized growth in billed impairment volumes charges in line of with =167P technical million, expectations. P=9,825 million As anda result of P=43the analysis, million (seethe CompanyNote 24) onrecognized goodwill impairmentin 2020, 2019 charges and 2018, of =167P respectively. million, P=9,825 million and P=43 million (see Note 24) on goodwill in 2020, 2019 and 2018, respectively. Impairment loss was also recognized for the West Zone water service concession asset and related goodwillImpairment for loss the yearwas also2019 recognized amounting for to theP=11,417 West millionZone water and P=6,803service million,concession respectively asset and (seerelated Notes 12goodwill and 24). for Inthe addition, year 2019 as amountingdiscussed in to Note P=11,417 30, there million is anand on-going P=6,803 million,discussion respectively with the MWSS (see Notes on the12 andprovisions 24). In ofaddition, the West as Zonediscussed concession in Note agreement 30, there isfor an renegotiation on-going discussion and amendment with the which MWSS is onan impairmentthe provisions indicator of the Westrequiring Zone assessment concession of agreement the recoverability for renegotiation of the service and amendment concession whichasset asis ofan Decemberimpairment 31, indicator 2020. Forrequiring purposes assessment of the impairment of the recoverability testing in 2020,of the the service Company concession used the asset expected as of cashDecember flow approach31, 2020. which For purposes uses a probability of the impairment weighted testing net present in 2020, value the approach. Company This used approach the expected uses allcash expectations flow approach about which possible uses casha probability flows instead weighted of a singlenet present most valuelikely approach.cash flow Thisand assignsapproach uses probabilitiesall expectations to eachabout cash possible flow scenariocash flows to insteadarrive at of a aprobability single most weighted likely cash net flowpresent and value. assigns Pre-tax weightedprobabilities average to each cost cash of capitalflow scenario ranged tofrom arrive 12.5% at a toprobability 15.6%. Based weighted on the net testing, present no value. additional Pre-tax impairmentweighted average loss on cost the of West capital Zone ranged service from concession 12.5% to asset 15.6%. was Based recognized on the in testing, 2020. no additional impairment loss on the West Zone service concession asset was recognized in 2020. In 2020, impairment loss for PNW’s service concession assets amounting to P=6 million. In 2020, impairment loss for PNW’s service concession assets amounting to P=6 million. In the assessment of the recoverable amount of the toll non-concession (which basically pertains to goodwillIn the assessment from acquisitions of the recoverable of SESI and amount Dibztech) of the andtoll waternon-concession non-concession (which business basically (which pertains to basicallygoodwill pertainsfrom acquisitions to ESTII’s of goodwill), SESI and ESCDibztech) and logistics, and water their non-concession VIUs were calculated business (whichbased on cash flowbasically projections pertains as to per ESTII’s the most goodwill), recent financial ESC and budgets logistics, and their forecasts VIUs werecovering calculated a five-year based period, on cash whichflow projections management as perbelieves the most are reasonablerecent financial and arebudgets management’s and forecasts best covering estimates a offive-year the ranges period, of economicwhich management conditions believes that will are exist reasonable over the andforecast are management’s period. Cash flowsbest estimates beyond the of thefive-year ranges period of wereeconomic extrapolated conditions using that a willgrowth exist rate over that the is forecast consistent period. with theCash average flows growthbeyond ratethe five-yearof the industry. period Aswere a resultextrapolated of the analysis, using a growth the Company rate that recognized is consistent an withimpairment the average charge growth of rate of the industry. P=1,227As a result million of the (see analysis, Note 24) the on Company goodwill recognized of ESTII in an 2019. impairment charge of P=1,227 million (see Note 24) on goodwill of ESTII in 2019. In 2019, the cash flow projections for MMI’s logistics business have been impacted by the Company’sIn 2019, the decisioncash flow to projections rationalize forand MMI’s scale-down logistics its trucking business and have freightforwarding been impacted by businesses. the MMI’sCompany’s cash decisionflows yielded to rationalize a net cash and outflow scale-down and hence, its trucking prompted and freightforwardingfull impairment of businesses. the goodwill on MMIMMI’s amounting cash flows to yielded P=1,366 amillion, net cash additional outflow and impairment hence, prompted for its other full assetsimpairment amounting of the goodwill on P=457MMI millionamounting (see to Note P=1,366 13) million,and partial additional impairment impairment of PLI’s for goodwill its other amounting assets amounting to =184P million. WithP=457 themillion planned (see liquidationNote 13) and of partialPLI, additional impairment impairment of PLI’s chargegoodwill to amountingfully write-off to =184P PLI’s million. remaining goodwillWith the plannedwas made liquidation in 2020 amounting of PLI, additional to P=56 million impairment (see Notes charge 11 to and fully 24). write-off PLI’s remaining goodwill was made in 2020 amounting to P=56 million (see Notes 11 and 24). *SGVFSM006036* *SGVFSM006036*

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Service Concession Assets not yet Available for Use Service Concession Assets not yet Available for Use Pre-tax Capitalized Net Carrying Growth Average Forecast DiscountPre-tax ProjectCapitalized Cost (a) Net Carryingvalue (b) GrowthRate Average ForecastPeriod Discountrate Project Cost (a) value (b) Rate Period rate December 31, 2020: DecemberToll 31, 2020:P=65,249 P=46,492 1.0% to 15.7% 26 to 36 years 10.1% to 11.2% RailToll P=65,24930,718 P=46,49227,225 1.0% to 15.7%6.0% 26 to 2736 years 10.1% to 10.9%11.2% WaterRail 30,7182,762 27,2252,762 7.4% to 15.7%6.0% 34 to 2745 years 9.0% to 10.9%11.3% Water P=98,7292,762 P=76,4792,762 7.4% to 15.7% 34 to 45 years 9.0% to 11.3% P=98,729 P=76,479 December 31, 2019: DecemberToll 31, 2019: P=47,163 P=28,406 1.0% to 15.7% 27 to 37 years 11.0% to 12.3% RailToll P=24,9347,1630 P=21,28,406387 1.0% to 15.7%5.7% 27 to 2837 years 11.0% to 12.0%12.3% WaterRail 24,932,3340 21,2,334387 8.5.27% 3528 years 112.0%0.9% Water P=74,4272,334 P=52,1272,334 8.2% 35 years 10.9% P=74,427 P=52,127 (a) Included in the carrying value of the ‘service concession assets’ account in the consolidated statement of financial position (a)(see Included Note 12) in the carrying value of the ‘service concession assets’ account in the consolidated statement of financial position (b)(see Represents Note 12) difference between the service concession assets and the corresponding net present value of the service concession (b)fee Represents payment (see difference Note 17) between the service concession assets and the corresponding net present value of the service concession fee payment (see Note 17) In assessing the impairment for service concession assets not yet available for use, the Company comparesIn assessing the the carrying impairment amounts for ofservice the underlying concession assets assets against not yet their available recoverable for use, amounts the Company (the higher ofcompares the assets’ the faircarrying value amounts less costs of of the disposal underlying and theirassets VIU). against Risks their related recoverable to the amountsexpected (the variations higher inof the timingassets’ offair cash value flows less have costs been of disposal incorporated and their in computing VIU). Risks for related the recoverable to the expected amounts variations of the relevantin the timing assets. of cashAverage flows growth have beenfor the incorporated toll, rail and in water computing businesses for the represents recoverable expected amounts growth of the in traffic,relevant ridership assets. Averagefor the rail growth business for theand toll, billed rail volume and water for businessesthe water business, represents respectively. expected growth The in averagetraffic, ridership forecast forperiod the israil consistent business withand billedthe period volume covered for the by water the concession business, respectively.agreements The (seeaverage Note forecast 29). period is consistent with the period covered by the concession agreements (see Note 29). Philippine Basketball Association Franchise. The recoverable amount of the franchise cost has been determinedPhilippine Basketball using its FVLCD Association as of Franchise.impairment The testing recoverable date. The amount Company of the used franchise market cost approach has been in determiningdetermined using the fair its valueFVLCD of theas ofintangible impairment asset testing (franchise date. cost) The Companyin reference used to pricesmarket generated approach in in similardetermining recent the transactions fair value offrom the otherintangible market asset participants (franchise involving cost) in referenceidentical orto pricescomparable generated assets. in Thesimilar Company recent transactionsadjusted the from price other to account market for participants costs of disposal involving to determine identical orFVLCD comparable as one assets. of the measuresThe Company of recoverable adjusted the amount price requiredto account by for PAS costs 36. of Based disposal on theto determine impairment FVLCD testing, as management one of the didmeasures not identify of recoverable any impairment amount lossrequired for this by intangiblePAS 36. Basedasset (franchise on the impairment cost) as FVLCD testing, managementexceeds the carryingdid not identify amount any of theimpairment intangible loss asset for (franchise this intangible cost). asset The (franchise FVLCD of cost) the franchiseas FVLCD cost exceeds is the classifiedcarrying amount under Level of the 2 intangible of fair value asset hierarchy. (franchise cost). The FVLCD of the franchise cost is classified under Level 2 of fair value hierarchy.

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15. Accounts Payable and Other Current Liabilities 15. Accounts Payable and Other Current Liabilities 2020 2019 2020 (In Millions) 2019 (In Millions) Accrued construction costs (a) P=8,451 (a) P=10,033 TradeAccrued and construction accounts payable costs (b) P=10,033 P=6,4438,451 (b) 5,695 RetentionTrade and payableaccounts(c )payable 5,695 3,4426,443 (c) 3,830 OptionRetention liabilities payable(see Notes 4 and 32) 3,5733,830 3,44246 AccruedOption liabilities expenses(see(d) Notes 4 and 32) 3,573 2,22346 (d) 2,776 InterestAccrued and expenses other financing charges (see Note 18) 2,5782,776 2,4432,223 AccruedInterest and personnel other financing costs charges (see Note 18) 1,3722,578 1,6812,443 OutputAccrued taxes personnel payable costs 1,372873 2,4221,681 AccruedOutput taxes outside payable services and professional fees 792873 1,8862,422 WithholdingAccrued outside taxes services payable and professional fees 528792 1,886992 DividendsWithholding payable taxes payable 509528 2,900992 AccruedDividends PNCC payableand BCDA fees (see Note 29) 458509 2,900893 LeaseAccrued liabilities PNCC and(e) BCDA fees (see Note 29) 458 348893 (e) 294 LoanLease prepayment liabilities and refinancing costs payable 294 348 Loan(see prepayment Note 18) and refinancing costs payable 128 461 Unearned(see Note revenues 18) 12898 46171 ContractUnearned liabilities/unearned revenues connection and 98 71 Contractinstallation liabilities/unearned fees (f) connection and 27 (f) 37 Depositinstallation from National fees Grid Corporation of the 37 27 DepositPhilippines from National (NGCP; Grid Note Corporation33) of the − 126 OthersPhilippines (NGCP; Note 33) 1,598− 1,508126 Others P=35,1721,598 P=36,3631,508 P=35,172 P=36,363 a. Accrued construction costs represent unbilled construction costs from contractors and normally a. settledAccrued upon construction receipt of costs billings. represent unbilled construction costs from contractors and normally settled upon receipt of billings. b. This account includes unpaid billings of creditors, suppliers and contractors. It also includes b. liabilitiesThis account relating includes to assets unpaid held billings in trust of used creditors, in Maynilad’s suppliers operations and contractors. amounting It also to includes=97P million asliabilities at December relating 31, to 2020 assets and held 2019 in trust(see usedNote in30). Maynilad’s Trade and operations accounts amountingpayables are to non-interest =97P million bearingas at December and are normally31, 2020 andsettled 2019 on (see 30 to Note 60 day30). terms. Trade and accounts payables are non-interest bearing and are normally settled on 30 to 60 day terms. c. Retention payable is the amount withheld by the Company until the completion of the c. constructionRetention payable of a specific is the amount project. withheld by the Company until the completion of the construction of a specific project. d. This account includes accrued utilities, marketing, and repairs and maintenance charges. d. This account includes accrued utilities, marketing, and repairs and maintenance charges. e. The noncurrent portion of lease liabilities amounted to P=1,204 million and P=652 million as at e. DecemberThe noncurrent 31, 2020 portion and of 2019, lease respectively liabilities amounted and included to P=1,204 under million“Other andlong-term P=652 millionliabilities” as at account.December 31, 2020 and 2019, respectively and included under “Other long-term liabilities” account. f. Unearned connection and installation fees are initially recognized from the collection of the fees f. andUnearned is then connection recognized and as revenueinstallation over fees the areremaining initially concession recognized period from the as thecollection Company of theprovides fees waterand is andthen sewerage recognized services as revenue to customers. over the remainingThe noncurrent concession portion period amounted as the to Company =570P million provides and P=442water millionand sewerage as at December services to 31, customers. 2020 and 2019The noncurrent and is reported portion under amounted “Other tolong-term =570P million and liabilities”.P=442 million as at December 31, 2020 and 2019 and is reported under “Other long-term liabilities”.

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16. Provisions 16. Provisions The table below presents the movements in this account: The table below presents the movements in this account: Heavy Decommissioning Other MaintenanceHeavy(a) DecommissioningLiability(b) ProvisionsOther(c) Total Balance at January 1, 2019 MaintenanceP=445(a) LiabilityP=548(b) ProvisionsP=7,539(c) P=8,532Total BalanceAdditions* at Januaryand accretion 1, 2019 P=445340 P=54866 P=7,5393,302 P=8,5323,708 Additions*Payments and accretion (274)340 66– 3,302(227) 3,708(501) PaymentsBalance at December 31, 2019 P=511(274) P=614– P=10,614(227) P=11,739(501) BalanceAdditions* at December and accretion 31, 2019 P=511334 P=614310 P=10,614885 P=11,7391,529 PaymentsAdditions* and and reversals accretion 334(98) 310– (1,191)885 (1,289)1,529 LiabilitiesPayments andunder reversals PFRS 5 (see Note 33) (98)– (924)– (1,191)(931) (1,855)(1,289) BalanceLiabilities at underDecember PFRS 31, 5 2020(see Note 33) P=747– (924)P= – P=9,377(931) P=10,124(1,855) Balance*Included at additions December by way 31, of2020 acquisitions (see Note 4) P=747 P= – P=9,377 P=10,124 *Included additions by way of acquisitions (see Note 4) Heavy Decommissioning Other MaintenanceHeavy(a) DecommissioningLiability(b) ProvisionsOther(c) Total At December 31, 2019: Maintenance (a) Liability(b) Provisions (c) Total At DecemberCurrent portion31, 2019: P= – P= – P=6,742 P=6,742 CurrentNoncurrent portion portion 511P= – 614P= – P=6,7423,872 P=6,7424,997 At DecemberNoncurrent 31, portion 2020: 511 614 3,872 4,997 At DecemberCurrent 31,portion 2020: P= – P= – P=6,708 P=6,708 CurrentNoncurrent portion portion 747P= – P= – P=6,7082,669 P=6,7083,416 Noncurrent portion 747 – 2,669 3,416 a. This pertains to the contractual obligations of segments to restore the toll service concession a. assetsThis pertains to a specified to the contractuallevel of serviceability obligations duringof segments the service to restore concession the toll term service and concession to maintain the sameassets assets to a specified in good conditionlevel of serviceability prior to turnover during of thethe serviceassets toconcession Grantor/s. term and to maintain the same assets in good condition prior to turnover of the assets to Grantor/s. b. Decommissioning liability pertains to GBPC’s estimated liability to decommission or dismantle b. theDecommissioning power plants at liability the end pertainsof their usefulto GBPC’s lives. estimated As disclosed liability in Note to decommission 1, GBPC qualified or dismantle as a groupthe power held plants for deemed at the enddisposal of their as ofuseful December lives. 31,As disclosed2020. Accordingly, in Note 1, GBPCthe decommissioning qualified as a liabilitygroup held was for included deemed in disposal the “Liabilities as of December under PFRS 31, 2020. 5” as atAccordingly, December 31, the 2020 decommissioning (see Note 33). liability was included in the “Liabilities under PFRS 5” as at December 31, 2020 (see Note 33). c. These consist of estimated liabilities for losses on claims by third parties. The information c. usuallyThese consist required of byestimated PAS 37, liabilitiesProvisions, for lossesContingent on claims Liabilities by third and parties. Contingent The informationAssets, is not disclosedusually required as it may by prejudicePAS 37, Provisions,the Company’s Contingent negotiation Liabilities with third and parties.Contingent Assets, is not disclosed as it may prejudice the Company’s negotiation with third parties. Included in the additions and accretion to the other provisions for the year ended DecemberIncluded in 31, the 2020 additions and 2019 and accretionis the estimated to the other tax warranties provisions and for indemnities the year ended in relation to the deconsolidationDecember 31, 2020 of MPHHI and 2019 (see is theNote estimated 32). tax warranties and indemnities in relation to the deconsolidation of MPHHI (see Note 32).

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17. Service Concession Fees Payable 17. Service Concession Fees Payable This account consists of: This account consists of: 2020 Toll Operations Water2020 Rail Total Toll Operations Water(In Millions) Rail Total (In Millions) Balance at beginning of year P=21,991 P=7,364 P=3,543 P=32,898 AdditionsBalance at beginning of year P=21,991– P=7,364730 P=3,543– P=32,898730 AdditionsInterest accretion – capitalized (see – 730 – 730 Interest accretionNote 12) – capitalized (see 1,134 – 214 1,348 Interest accretionNote 12) (see Note 24) 1,134– 628– 214‒ 1,348628 ForeignInterest accretionexchange (seedifferential Note 24) – (105)628 ‒– (105)628 PaymentForeign exchange differential (4,368)– (1,433)(105) (264)– (6,065)(105) Payment 18,757(4,368) (1,433)7,184 3,493(264) 29,434(6,065) Less current portion 18,7574,368 1,2017,184 3,493257 29,4345,826 Less current portion P=14,3894,368 P=5,9831,201 P=3,236257 P=23,6085,826 P=14,389 P=5,983 P=3,236 P=23,608 2019 Toll Operations Water2019 Rail Total Toll Operations Water(In Millions) Rail Total (In Millions) Balance at beginning of year P=20,784 P=6,459 P=3,396 P=30,639 AdditionsBalance at beginning of year P=20,784– P=2,1326,459 P=3,396– P=30,6392,132 InterestAdditions accretion – capitalized (see – 2,132 – 2,132 Interest accretionNote 12) – capitalized (see 1,207 – 214 1,421 Interest accretionNote 12) (see Note 24) 1,207– 582– 214‒ 1,421582 ForeignInterest accretionexchange (seedifferential Note 24) – (136)582 –‒ (136)582 PaymentForeign exchange differential – (1,673(136)) (67)– (1,740(136)) Payment 21,991– (7,3641,673) 3,543(67) 32,898(1,740) Less current portion 21,9914,368 1,6527,364 3,543257 32,8986,277 Less current portion P=17,6234,368 P=5,7121,652 P=3,286257 P=26,6216,277 P=17,623 P=5,712 P=3,286 P=26,621 Toll Operations Toll Operations ƒ CALAX. In consideration for granting the concession, MPCALA shall pay DPWH a concession fee ƒ totalingCALAX. P=27.3 In consideration billion, 20% for or grantingP=5.5 billion the concession,of which was MPCALA settled upon shall signing pay DPWH of the aconcession concession fee agreementtotaling P=27.3 (July billion, 10, 2015). 20% orThe P=5.5 balance billion of of the which concession was settled fee (nominal upon signing amount of theof P=21.8concession billion) is payableagreement in equal(July 10,annual 2015). installments The balance beginning of the concessionon the 5th year fee (nominal(2020) over amount a period of P=21.8 of 9 years billion) from is thepayable signing in equal of the annual concession installments agreement. beginning Service on concession the 5th year fee (2020) payable over was a period initially of recognized9 years from at itsthe present signing value of the as concession at signing agreement.date of the concession Service concession agreement. fee Forpayable failure was to initiallypay the recognizedconcession atfee onits presentor before value the agreedas at signing upon dates,date of MPCALA the concession shall payagreement. interest atFor the failure rate of to one pay year the concessionPhilippine fee Dealingon or before System the agreedTreasury upon Reference dates, MPCALA Rate PM (PDST-R2)shall pay interest plus 1.75%. at the rate The of interest one year at suchPhilippine rate shall continueDealing System to accrue Treasury until the Reference remaining Rate concession PM (PDST-R2) fee is paid, plus or 1.75%. until a noticeThe interest of default at such and rate shall terminationcontinue to accrueis received until bythe MPCALA. remaining concessionIn the event fee of isoccurrence paid, or until of a a DPWH notice ofdefault, default the and obligation oftermination MPCALA is toreceived pay the by concession MPCALA. fee Inshall the beevent suspended of occurrence until such of a default DPWH has default, been curedthe obligation by the DPWH.of MPCALA MPCALA to pay shallthe concession no longer feebe obligated shall be suspended to pay any until amount such of default unpaid has concession been cured fee by to thethe DPWHDPWH. in MPCALA case this concession shall no longer agreement be obligated is terminated to pay anypursuant amount to aof DPWH unpaid defaultconcession or due fee to to a the voluntaryDPWH in terminationcase this concession by the DPWH. agreement On Julyis terminated 7, 2020, MPCALApursuant to paid a DPWH the first default installment or due ofto a CALAXvoluntary concession termination fee by amounting the DPWH. to OnP=4.4 July billion 7, 2020, to DPWH. MPCALA paid the first installment of CALAX concession fee amounting to P=4.4 billion to DPWH.

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ƒ Connector Project. Under the concession agreement, NLEX Corp. shall pay periodic payments to ƒ DPWHConnector representing Project. Underthe consideration the concession for grantingagreement, the NLEX concession Corp. and shall basic pay right periodic of way payments in the to ConnectorDPWH representing Road Project. the consideration Total payments for togranting be made the to concession DPWH amount and basic to P=8.5 right billion of way payable in the at P=243.2Connector million Road per Project. annum. Total The payments payment shallto be commencemade to DPWH on the amount first anniversary to P=8.5 billion of the payable construction at completionP=243.2 million deadline, per annum. as extended, The payment until the shall expiry commence of the concession on the first period anniversary and shall of bethe subject construction to an agreedcompletion escalation deadline, every as twoextended, years baseduntil the on expirythe prevailing of the concession CPI for the period two-year and periodshall be immediately subject to an precedingagreed escalation the adjustment every two or yearsescalation. based on the prevailing CPI for the two-year period immediately preceding the adjustment or escalation. The service concession fees payable is based on the discounted value of future fixed cash flows using theThe prevailing service concession peso interest fees rates payable on November is based on 23, the 2016. discounted The undiscounted value of future estimated fixed cash future flows periodic using payments,the prevailing excluding peso interest the effect rates of on the November CPI, is P=8,510.4 23, 2016. million. The undiscounted estimated future periodic payments, excluding the effect of the CPI, is P=8,510.4 million. Water Water ƒ Maynilad. Concession fees relating to Maynilad’s service concession agreement are denominated in ƒ Maynilad.various currencies Concession and arefees non-interest relating to Maynilad’sbearing. These service are concessionpayable monthly agreement following are denominated an in amortizationvarious currencies table upand to are the non-interest end of the concessionbearing. These period. are payable monthly following an amortization table up to the end of the concession period. ƒ MPIWI. Under the service contract agreement between MPIWI and MIWD, MPIWI shall pay ƒ annualMPIWI. serviceUnder fee the to service MIWD contract representing agreement the sum between of the MPIWI contract and monitoring MIWD, feesMPIWI and shallfixed pay lease fees.annual The service annual fee fixed to MIWD lease paymentsrepresenting represent the sum rentals of the for contract MIWD’s monitoring making feesthe existingand fixed facilities lease availablefees. The for annual the exclusive fixed lease use payments and possession represent of MPIWIrentals for throughout MIWD’s themaking operational the existing period facilities of twentyavailable five for (25) the years.exclusive The use contract and possession monitoring of feesMPIWI cover throughout the day-to-day the operational expenses ofperiod MIWD of (residualtwenty five office) (25) asyears. it retains The contractits function monitoring as regulator fees ofcover MPIWI. the day-to-day It is fixed atexpenses P=76 million of MIWD for the first year(residual and P=54.8office) million as it retains for the its second function year as withregulator the succeeding of MPIWI. years It is fixedadjusted at P=76 for millionCPI. An for initial the first serviceyear and fee P=54.8 of P=350 million million for the was second settled year within with a monththe succeeding from the years signing adjusted of the forservice CPI. contract An initial agreement.service fee of P=350 million was settled within a month from the signing of the service contract agreement. Rail. Under LRMC’s concession agreement for the LRT-1 Project, LRMC is required to pay the bid premiumRail. Under of P=9.35LRMC’s billion concession (inclusive agreement of VAT) for as concessionthe LRT-1 Project,fee, 20% LRMC or =1.87P is requiredbillion of to which pay the was bid settledpremium as ofat EffectiveP=9.35 billion Date (inclusive in accordance of VAT) with as the concession LRT-1 Concession fee, 20% orAgreement. =1.87P billion The of balance which was of the concessionsettled as at fee Effective (nominal Date amount in accordance of =7.5P billion, with the inclusive LRT-1 Concessionof VAT) is payableAgreement. in equal The quarterly balance of the installmentsconcession fee over (nominal the concession amount ofperiod =7.5P with billion, the inclusivefirst quarterly of VAT) payment is payable due beginning in equal quarterlythe fourth quarterinstallments of 2019. over Settlementthe concession of the period concession with the fee first is through quarterly the payment quarterly due balancing beginning payment the fourth mechanismquarter of 2019. reflecting Settlement netting of of the payments concession due feeto Grantors is through against the quarterly receivable balancing from Grantors. payment mechanism reflecting netting of payments due to Grantors against receivable from Grantors. The schedule of undiscounted estimated future concession fee payments, based on the term of the concessionThe schedule agreements of undiscounted are disclosed estimated in Note future 34, concessionFinancial feeRisk payments, Management based Objectives on the term and of Policies the –concession Liquidity Riskagreements. are disclosed in Note 34, Financial Risk Management Objectives and Policies – Liquidity Risk.

18. Short-term and Long-term Debt 18. Short-term and Long-term Debt This account consists of: This account consists of: 2020 2019 2020 (In Millions) 2019 (In Millions) Short-term and current portions of long-term debt P=23,961 P=18,459 NoncurrentShort-term andportions currentof portionslong-termof debt long-term debt P=23,961207,405 P=231,45018,459 Noncurrent portions of long-term debt P=231,366207,405 P=249,909231,450 P=231,366 P=249,909

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Details of the debt per company/segment are as follows: Details of the debt per company/segment are as follows: December 31, 2020 DecemberLong- 31,term 2020 Loans LongBonds-term Total Loans (In Millions)Bonds Total MPIC P=79,674 (In Millions)P= – P=79,674 PowerMPIC (see Note 33) P=79,6748,640 P= – P=79,6748,640 TollPower Operations (see Note 33) 73,4698,640 12,957– 86,4268,640 WaterToll Operations 41,39673,469 12,957– 41,39686,426 RailWater 16,47841,396 – 16,47841,396 LogisticsRail 16,478543 – 16,478543 Logistics 220,200543 12,957– 233,157543 Less unamortized debt issue cost 220,2001,723 12,95768 233,1571,791 Less unamortized debt issue cost P=218,4771,723 P=12,88968 P=231,3661,791 P=218,477 P=12,889 P=231,366 December 31, 2019 DecemberLong -31,term 2019 Loans LongBonds-term Total Loans (In Millions)Bonds Total MPIC P=85,771 (In Millions)P=– P=85,771 PowerMPIC P=41,54485,771 P=– P=41,54485,771 TollPower Operations 55,31741,544 12,957– 68,27441,544 WaterToll Operations 42,89155,317 12,957– 42,89168,274 RailWater 11,98342,891 – 11,98342,891 LogisticsRail 11,9831,055 – 11,9831,055 Logistics 238,5611,055 12,957– 251,5181,055 Less unamortized debt issue cost 238,5611,521 12,95788 251,5181,609 Less unamortized debt issue cost P=237,0401,521 P=12,86988 P=249,9091,609 P=237,040 P=12,869 P=249,909 The table below presents the movements in unamortized debt issue costs: The table below presents the movements in unamortized debt issue costs: 2020 2019 2020 (In Millions) 2019 Balance at beginning of year P=1,609 (In Millions)P=1,201 DebtBalance issue at costsbeginning incurred of year during the year P=1,609449 P=1,201592 AmortizationDebt issue costs during incurred the year during charged the year to interest expense 449 592 Amortization(see Note durings 24 and the37 year) charged to interest expense (147) (125) Amortization(see Note durings 24 and the37 year) capitalized to service (147) (125) Amortizationconcession during assets the (see year Note capitalized 12) to service (28) (52) Derecognizedconcession assets (see Note 12) (76)(28) (52)(7) LiabilitiesDerecognized under PFRS 5 (see Note 33) (16)(76) (7)– BalanceLiabilities at underend of PFRS year 5 (see Note 33) P=1,791(16) P=1,609– Balance at end of year P=1,791 P=1,609 The schedule of repayments of loans based on existing terms are provided in Note 34, Financial Risk ManagementThe schedule Objectivesof repayments and ofPolicies loans based– Liquidity on existing Risk. terms are provided in Note 34, Financial Risk Management Objectives and Policies – Liquidity Risk.

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Interest rates and maturity of the borrowings per company/segment as follows: Interest rates and maturity of the borrowings per company/segment as follows: Interest rate per annum Maturity Interest20rate20per annum 2019 20Maturity20 2019 Loans: 2020 2019 2020 2019 Loans:MPIC 4.6% to 9.2% 4.9% to 9.2% 2025 to 2033 2023 to 2033 MPICToll Operations 2.5%4.6% to to 12.5% 9.2% 2.1%4.9% to to 12.5% 9.2% 20252020 to 20332034 20232020 to 20332034 TollWater Operations 2.5%0.9% to to 12.5% 8.2% 2.1%0.9% to to 12.5% 9.0% 20202022 to 20342037 20202022 to 20342037 WaterRail 0.9%7.0% to 8.2%7.5% 0.9%7.0% to 9.0%7.5% 2022 to 20312037 2022 to 20372031 RailLogistics 7.0%5.3% to 7.5%7.3% 7.0%4.9% to 7.5%7.3% 2022 to 20312023 2019 to 20232031 PowerLogistics - GBPC (see 5.3% to 7.3% 4.9% to 7.3% 2022 to 2023 2019 to 2023 PowerNote - GBPC 33) (see – 5.2% to 10.9% – 2021 to 2029 PowerNote- BPHI 33) 5.5%– 5.2% to 10.9%5.5% 2026– 2021 to 20292026 LongPower-term bonds:- BPHI 5.5% 5.5% 2026 2026 LongToll-term Operations bonds: 5.1% to 6.9% 5.1% to 6.9% 2021 to 2028 2021 to 2028 Toll Operations 5.1% to 6.9% 5.1% to 6.9% 2021 to 2028 2021 to 2028 An analysis of the carrying amounts of borrowings into fixed and variable interest rates per company/segmentAn analysis of the carryingas follows: amounts of borrowings into fixed and variable interest rates per company/segment as follows: Fixed Variable Total 2020Fixed 2019 2020Variable 2019 2020Total 2019 MPIC P=79,1162020 P=85,1982019 2020P= – 201P=–9 P=79,1162020 P=85,1982019 MPICToll Operations P=79,11668,500 P=85,19856,677 17,261P= – 11,134P=– P=79,11685,761 P=85,19867,811 TollWater Operations 68,50034,294 56,67734,990 17,2616,794 11,1347,551 41,08885,761 42,54167,811 WaterRail 16,21834,294 11,77934,990 6,794– 7,551– 41,08816,218 42,54111,779 RailLogistics 16,218543 11,7791,055 – – 16,218543 11,7791,055 LogisticsPower - BPHI 8,640543 1,0559,079 – – 8,640543 1,0559,079 Power -– BPHIGBPC 8,640 9,079 – – 8,640 9,079 Power(see – NoteGBPC 33) – 32,446 – – – 32,446 (see Note 33) P=207,311– P=231,22432,446 P=24,055– P=18,685– P=231,366– P=249,90932,446 P=207,311 P=231,224 P=24,055 P=18,685 P=231,366 P=249,909 The carrying amounts of the borrowings are denominated in the following currencies: The carrying amounts of the borrowings are denominated in the following currencies: December 31, 2020 Philippine Indonesian U.S. DecemberThai Japanese 31, 2020 Vietnamese PhilippinePeso IndonesianRupiah DollarsU.S. BahtThai JapaneseYen VietnameseDong Euro Total MPIC P=79,116Peso RupiahP= – DollarsP= – BahtP= – YenP= – DongP= – EuroP= – P=79,116Total MPICPower (see Note 33) P=79,1168,640 P= – P= – P= – P= – P= – P= – P=79,1168,640 PowerToll Operations(see Note 33) 78,9068,640 6,855– – – – – – 85,7618,640 TollWater Operations 78,90629,831 6,855– 6,034– – 4,463– 760– – 41,08885,761 WaterRail 29,83116,218 – 6,034– – 4,463– 760– – 41,08816,218 RailLogistics 16,218543 – – – – – – 16,218543 Logistics P=213,254543 P=6,855– P=6,034– P=– P=4,463– P=760– P=– P=231,366543 P=213,254 P=6,855 P=6,034 P= – P=4,463 P=760 P= – P=231,366 December 31, 2019 Philippine Indonesian U.S. DecemberThai Japanese31, 2019 Vietnamese PhilippinePeso IndonesianRupiah DollarsU.S. BahtThai JapaneseYen VietnameseDong Euro Total MPIC P=85,198Peso RupiahP= – DollarsP= – BahtP= – YenP= – DongP= – EuroP= – P=85,198Total MPICPower P=85,19841,525 P= – P= – P= – P=– P=– P=– P=85,19841,525 PowerToll Operations 41,52559,807 4,849– 1,520– 1,512– – – 123– 41,52567,811 TollWater Operations 59,80730,054 4,849– 1,5206,749 1,512– 4,936– 802– 123– 67,81142,541 WaterRail 30,05411,779 – 6,749– – 4,936– 802– – 42,54111,779 RailLogistics 11,7791,055 – – – – – – 11,7791,055 Logistics P=229,4181,055 P=4,849– P=8,269– P=1,512– P=4,936– P=802– P=123– P=249,9091,055 P=229,418 P=4,849 P=8,269 P=1,512 P=4,936 P=802 P=123 P=249,909

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Other relevant information on the Company’s long-term borrowings are provided below: AIF’s outstanding loans were secured by a pledge on AIF and DMT shares. In August 2020, the Other relevant information on the Company’s long-term borrowings are provided below: AIF’spledge outstanding on AIF and loansDMT were shares secured have beenby a pledgeterminated on AIF upon and full DMT settlement shares. of In the August Thai Baht2020, loan the ƒ As disclosed in Note 1, GBPC qualified as a group held for deemed disposal as of pledgeamounting on AIF to THB710 and DMT million shares (approximately have been terminated P=1,108 million)upon full with settlement a maturity of the date Thai of MayBaht 2022.loan ƒ AsDecember disclosed 31, in 2020. Note 1,Accordingly, GBPC qualified the loans as a weregroup included held for indeemed the “Liabilities disposal asunder of PFRS 5” as at amounting to THB710 million (approximately P=1,108 million) with a maturity date of May 2022. December 31, 20202020. (see Accordingly, Note 33). the loans were included in the “Liabilities under PFRS 5” as at ƒ Other relevant information PT Nusantara’s term loan facilities are provided below: December 31, 2020 (see Note 33). ƒ Other relevant information PT Nusantara’s term loan facilities are provided below: ƒ Certain loan facilities were identified to have embedded derivatives such as prepayment options o The outstanding loan of PT Nusantara is secured by the office space purchased through the proceeds of the loan. ƒ Certainand interest loan rate facilities floors. were These identified embedded to have derivatives, embedded however, derivatives are not such required as prepayment to be bifurcated options o The outstanding loan of PT Nusantara is secured by the office space purchased through fromand interest the host rate loan floors. since: These (1) the embedded exercise derivatives,price of the however,prepayment are option not required approximates to be bifurcated the the proceeds of the loan. carryingfrom the amounthost loan of since: the loan (1) atthe each exercise exercise price date; of theand prepayment (2) interest optionrate floor approximates is out of the the money, o Toll road concession rights under MUN are pledged as collateral for MUN’s loans. carryinghence, identified amount ofembedded the loan derivativesat each exercise are clearly date; andand (2)closely interest related rate tofloor the ishost out loan. of the Certain money, o Toll road concession rights under MUN are pledged as collateral for MUN’s loans. loanshence, bear identified a fixed embedded rate for the derivatives first five years are clearly but is andsubject closely to an related interest to ratethe hostrepricing loan. after Certain five o Outstanding loan of the MUN is secured by all shares of JLB, debt service payment and reserve accounts, dividend settlement accounts and all operating cash accounts. The loan (5)loans years bear (see a fixed Note rate 34, forFinancial the first Risk five Managementyears but is subject Objectives to an and interest Policies rate –repricingInterest afterRate fiveRisk). o Outstanding loan of the MUN is secured by all shares of JLB, debt service payment and (5) years (see Note 34, Financial Risk Management Objectives and Policies – Interest Rate Risk). reserveis also subject accounts, to unlimiteddividend settlementcorporate guarantees accounts and from all BMN,operating PT Jalancash accounts.Tol Seksi TheEmpat loan ƒ The credit agreements provide for certain restrictions with respect to, among others, obtaining is(JTSE) also subject and PT to Bintaro unlimited Serpong corporate Damai guarantees (BSD). from BMN, PT Jalan Tol Seksi Empat ƒ Theprior credit written agreements consent from provide lenders for certainprior to restrictions cash dividend with payment, respect to,availing among other others, loans obtaining or (JTSE) and PT Bintaro Serpong Damai (BSD). advancesprior written to any consent of the from Company’s lenders prioraffiliates, to cash subsidiaries, dividend payment, stockholders, availing directors other andloans officers or o The outstanding loans of BMN, JTSE, and BSD are secured by their respective concession rights, all revenues derived therefrom, and any indemnity insurance exceptadvances in tocompliance any of the with Company’s formally affiliates, established subsidiaries, and existing stockholders, fringe benefit directors program and of officers the o The outstanding loans of BMN, JTSE, and BSD are secured by their respective exceptCompany. in compliance These restrictions with formally were complied established with and by existing the Company. fringe benefit program of the concessionreceivable from rights, the all Indonesian revenues derivedGovernment. therefrom, and any indemnity insurance Company. These restrictions were complied with by the Company. receivable from the Indonesian Government. ƒ The loan agreements contain among others, covenants regarding the maintenance of certain o The outstanding loan of DCC is secured by its concession right, receivables from the Grantor, and all assets of the concession financed by BCA. ƒ financialThe loan ratiosagreements such as contain debt-to-equity among others, ratio, debtcovenants service regarding coverage the ratio maintenance (DSCR) and of maintenancecertain o The outstanding loan of DCC is secured by its concession right, receivables from the financialof debt service ratios reservesuch as accountdebt-to-equity (see Note ratio, 34, debtFinancial service Risk coverage Management ratio (DSCR) Objectives and maintenance and Policies Grantor, and all assets of the concession financed by BCA. –of Capital debt service Management reserve ).account (see Note 34, Financial Risk Management Objectives and Policies o The outstanding loan of PT Inpola Meka Energi (IME) is secured by shares of EI in the debtor, fixed asset’s financed by BCA and other operating accounts. The outstanding – Capital Management). o The outstanding loan of PT Inpola Meka Energi (IME) is secured by shares of EI in the On November 9, 2020, MPTC requested a waiver for its compliance with the required DSCR for debtor,loan if RPSLfixed asset’sis secured financed by its bybiomass BCA andpower other plant, operating consisting accounts. of land, The building, outstanding theOn fourthNovember (4th) 9,quarter 2020, of MPTC 2020. requested In December a waiver 2020, for the its local compliance banks expressed with the requiredtheir agreement DSCR forto loanmachineries if RPSL and is secured equipment. by its The biomass loan facilitypower plant,obtained consisting by RPSL of withland, BCA building, in 2017 the fourthwaiver, (4 respectively.th) quarter of 2020.On December In December 17, 2019, 2020, AIFT the local requested banks a expressed waiver for their its compliance agreement to machineriesended in March and 2019.equipment. The loan facility obtained by RPSL with BCA in 2017 withthe waiver, the required respectively. DSCR for On the December year 2019 17, due 2019, to lower AIFT dividends requested froma waiver DMT. for its compliance ended in March 2019. Onwith December the required 27, DSCR 2019, Mizuhofor the year Bank, 2019 Ltd. due and to Sumitomo lower dividends Mitsui fromBanking DMT. Corporation ƒ In 2016, LRMC signed a 15-year Omnibus Loan and Security Agreement (OLSA) with various Onexpressed December their 27, agreement 2019, Mizuho to the waiver.Bank, Ltd. and Sumitomo Mitsui Banking Corporation ƒ Infinancial 2016, LRMCinstitutions signed (collectively, a 15-year Omnibus as “Lenders”) Loan amountingand Security to Agreement =24.0P billion, (OLSA) =15.3P with billion various of expressed their agreement to the waiver. financialwhich is allocatedinstitutions for (collectively, the Cavite Extension as “Lenders”) and =8.7P amounting billion forto =24.0 Pthe rehabilitation billion, =15.3P of billionthe existing of Except as discussed above, MPIC and its subsidiaries are in compliance with the required whichLRT-1 is system. allocated Cumulative for the Cavite drawn Extension amount fromand =8.7P this billionfacility for as atthe December rehabilitation 31, 2020 of the and existing 2019 financialExcept as ratios discussed and other above, loan MPIC covenants and its assubsidiaries at December are 31,in compliance2020 and 2019. with the required LRT-1amounted system. to =16,086P Cumulative million drawn and =11,983P amount million,from this respectively. facility as at The December loan has 31, a sponsors’2020 and 2019 financial ratios and other loan covenants as at December 31, 2020 and 2019. amountedfunding commitment to =16,086P whereinmillion andfor each=11,983P drawdown million, until respectively. end of the The construction loan has aperiod, sponsors’ the ƒ MPIC does not gurantee the borrowings of its investee companies but there are standard cross- fundingsponsors/shareholders commitment wherein shall infuse for each additional drawdown equity until or extendend of debtthe construction to LRMC in period, an amount the ƒ MPICdefault does and cross-accelerationnot gurantee the borrowings provisions of in its its investee loan agreements. companies but there are standard cross- sponsors/shareholdersnecessary to meet the debt-to-equityshall infuse additional ratio. Additional equity or equityextend investment debt to LRMC of the in sponsorsan amount shall not default and cross-acceleration provisions in its loan agreements. necessaryexceed P=15,346 to meet million, the debt-to-equity of which =8,440P ratio. million Additional is effectively equity investment allocated ofto MPLRC.the sponsors shall not ƒ Certain bank borrowings were secured Company’s interests in GBPC (56%, held by BPHI), exceed P=15,346 million, of which =8,440P million is effectively allocated to MPLRC. ƒ LRMCCertain (35.8%bank borrowings and 55% heldwere by secured MPLRC Company’s as of December interests 31, in 2020GBPC and (56%, 2019, held respectively), by BPHI), On July 31, 2019, LRMC, together with its shareholders and lenders, signed an amendment LRMCMPCALA (35.8% (100%, and held 55% through held by MPTC) MPLRC and as CCLECof December (100%, 31, held 2020 by and MPTC). 2019, respectively), Onagreement July 31, to 2019, the OLSA. LRMC, The together amendments with its include,shareholders but are and not lenders, limited signed to, update an amendment of terms and MPCALA (100%, held through MPTC) and CCLEC (100%, held by MPTC). agreementdefinition, tosplit the of OLSA. portions The of theamendments Cavite Extension include, facilitybut are tonot “other limited than to, theupdate remaining of terms Tranche and Certain long-term debt of MIB and MPIWI with the Development Bank of the Philippines are definition,B facility” splitand “theof portions remaining of the Tranche Cavite B Extension facility”, changefacility into applicable“other than interest the remaining rate for Tranchethe securedCertain long-termby leasehold debt rights, of MIB project and MPIWIaccounts, with project the Development assets with value Bank of of up the to Philippines=1.35P billion, are and Bremaining facility” Trancheand “the Bremaining facility and Tranche update B in facility”, the drawdown change schedule.in applicable interest rate for the insurancesecured by policies. leasehold rights, project accounts, project assets with value of up to =1.35P billion, and remaining Tranche B facility and update in the drawdown schedule. insurance policies. ƒ Loan Prepayment. In 2020, 2019 and 2018, certain loans were prepaid with combined Beacon Electric’s outstanding loans were secured by a pledge on MERALCO shares. In 2019, ƒ Loanoutstanding Prepayment. balance In of 2020, =4,996P 2019 million, and 2018, =9,684P certain million loans and were =35,746P prepaid million, with respectively,combined prior to theBeacon pledge Electric’s on the MERALCOoutstanding sharesloans were have secured been terminated by a pledge upon on fullMERALCO and final shares.discharge In of2019, the outstandingrepayment). balance Prepayment of =4,996P penalties million, and =9,684Pother related million costs and (including =35,746P million, derecognition respectively, of prior to obligationthe pledge underon the the MERALCO Note Facility shares Agreements. have been terminated upon full and final discharge of the repayment).unamortized debtPrepayment issue costs penalties and PFRS and other3 fair related value increment) costs (including were recognizedderecognition under of “Others” obligation under the Note Facility Agreements. unamortizedin the consolidated debt issue statement costs andof comprehensive PFRS 3 fair value income increment) (see Note were 24). recognized under “Others” in the consolidated statement of comprehensive income (see Note 24).

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AIF’s outstanding loans were secured by a pledge on AIF and DMT shares. In August 2020, the AIF’spledge outstanding on AIF and loansDMT were shares secured have beenby a pledgeterminated on AIF upon and full DMT settlement shares. of In the August Thai Baht2020, loan the pledgeamounting on AIF to THB710 and DMT million shares (approximately have been terminated P=1,108 million)upon full with settlement a maturity of the date Thai of MayBaht 2022.loan amounting to THB710 million (approximately P=1,108 million) with a maturity date of May 2022. ƒ Other relevant information PT Nusantara’s term loan facilities are provided below: ƒ Other relevant information PT Nusantara’s term loan facilities are provided below: o The outstanding loan of PT Nusantara is secured by the office space purchased through the proceeds of the loan. o The outstanding loan of PT Nusantara is secured by the office space purchased through the proceeds of the loan. o Toll road concession rights under MUN are pledged as collateral for MUN’s loans. o Toll road concession rights under MUN are pledged as collateral for MUN’s loans. o Outstanding loan of the MUN is secured by all shares of JLB, debt service payment and reserve accounts, dividend settlement accounts and all operating cash accounts. The loan o Outstanding loan of the MUN is secured by all shares of JLB, debt service payment and reserveis also subject accounts, to unlimiteddividend settlementcorporate guarantees accounts and from all BMN,operating PT Jalancash accounts.Tol Seksi TheEmpat loan is(JTSE) also subject and PT to Bintaro unlimited Serpong corporate Damai guarantees (BSD). from BMN, PT Jalan Tol Seksi Empat (JTSE) and PT Bintaro Serpong Damai (BSD). o The outstanding loans of BMN, JTSE, and BSD are secured by their respective concession rights, all revenues derived therefrom, and any indemnity insurance o The outstanding loans of BMN, JTSE, and BSD are secured by their respective concessionreceivable from rights, the all Indonesian revenues derivedGovernment. therefrom, and any indemnity insurance receivable from the Indonesian Government. o The outstanding loan of DCC is secured by its concession right, receivables from the Grantor, and all assets of the concession financed by BCA. o The outstanding loan of DCC is secured by its concession right, receivables from the Grantor, and all assets of the concession financed by BCA. o The outstanding loan of PT Inpola Meka Energi (IME) is secured by shares of EI in the debtor, fixed asset’s financed by BCA and other operating accounts. The outstanding o The outstanding loan of PT Inpola Meka Energi (IME) is secured by shares of EI in the debtor,loan if RPSLfixed asset’sis secured financed by its bybiomass BCA andpower other plant, operating consisting accounts. of land, The building, outstanding loanmachineries if RPSL and is secured equipment. by its The biomass loan facilitypower plant,obtained consisting by RPSL of withland, BCA building, in 2017 machineriesended in March and 2019.equipment. The loan facility obtained by RPSL with BCA in 2017 ended in March 2019. ƒ In 2016, LRMC signed a 15-year Omnibus Loan and Security Agreement (OLSA) with various ƒ Infinancial 2016, LRMCinstitutions signed (collectively, a 15-year Omnibus as “Lenders”) Loan amountingand Security to Agreement =24.0P billion, (OLSA) =15.3P with billion various of financialwhich is allocatedinstitutions for (collectively, the Cavite Extension as “Lenders”) and =8.7P amounting billion forto =24.0 Pthe rehabilitation billion, =15.3P of billionthe existing of whichLRT-1 is system. allocated Cumulative for the Cavite drawn Extension amount fromand =8.7P this billionfacility for as atthe December rehabilitation 31, 2020 of the and existing 2019 LRT-1amounted system. to =16,086P Cumulative million drawn and =11,983P amount million,from this respectively. facility as at The December loan has 31, a sponsors’2020 and 2019 amountedfunding commitment to =16,086P whereinmillion andfor each=11,983P drawdown million, until respectively. end of the The construction loan has aperiod, sponsors’ the fundingsponsors/shareholders commitment wherein shall infuse for each additional drawdown equity until or extendend of debtthe construction to LRMC in period, an amount the sponsors/shareholdersnecessary to meet the debt-to-equityshall infuse additional ratio. Additional equity or equityextend investment debt to LRMC of the in sponsorsan amount shall not necessaryexceed P=15,346 to meet million, the debt-to-equity of which =8,440P ratio. million Additional is effectively equity investment allocated ofto MPLRC.the sponsors shall not exceed P=15,346 million, of which =8,440P million is effectively allocated to MPLRC. On July 31, 2019, LRMC, together with its shareholders and lenders, signed an amendment Onagreement July 31, to 2019, the OLSA. LRMC, The together amendments with its include,shareholders but are and not lenders, limited signed to, update an amendment of terms and agreementdefinition, tosplit the of OLSA. portions The of theamendments Cavite Extension include, facilitybut are tonot “other limited than to, theupdate remaining of terms Tranche and definition,B facility” splitand “theof portions remaining of the Tranche Cavite B Extension facility”, changefacility into applicable“other than interest the remaining rate for Tranchethe Bremaining facility” Trancheand “the Bremaining facility and Tranche update B in facility”, the drawdown change schedule.in applicable interest rate for the remaining Tranche B facility and update in the drawdown schedule. ƒ Loan Prepayment. In 2020, 2019 and 2018, certain loans were prepaid with combined ƒ Loanoutstanding Prepayment. balance In of 2020, =4,996P 2019 million, and 2018, =9,684P certain million loans and were =35,746P prepaid million, with respectively,combined prior to outstandingrepayment). balance Prepayment of =4,996P penalties million, and =9,684Pother related million costs and (including =35,746P million, derecognition respectively, of prior to repayment).unamortized debtPrepayment issue costs penalties and PFRS and other3 fair related value increment) costs (including were recognizedderecognition under of “Others” unamortizedin the consolidated debt issue statement costs andof comprehensive PFRS 3 fair value income increment) (see Note were 24). recognized under “Others” in the consolidated statement of comprehensive income (see Note 24).

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In December 2019, as part of the Company’s plans to reduce its existing debts, MPIC sought Inconsent December from 2019,all of itsas lenderspart of theas itCompany’s intended to plans prepay to reducethe outstanding its existing portion debts, of MPIC the debt sought under consentthe =6.48P from Billion, all of 10-Year its lenders Notes as itFacility intended Agreement to prepay dated the outstanding June 19, 2013 portion with of BDO the debtUnibank, under theInc.=6.48P MPIC Billion, also sought 10-Year consent Notes from Facility its lenders Agreement for the dated refinancing June 19, of 2013 a portion with BDO of its Unibank,long-term Inc.debt whichMPIC italso intended sought to consent implement from by its Junelenders 2020. for Inthe connection refinancing with of athe portion prepayment of its long-term and debtrefinancing, which it the intended Company to implement recognized by estimated June 2020. prepayment In connection penalties with andthe prepaymentinterests of and refinancing,P=460.5 million the included Company as recognized loan repayment estimated and refinancing prepayment costs penalties under and “Accounts interests payableof and P=460.5other current million liabilities” included accountas loan repaymentin the consolidated and refinancing statement costs of comprehensiveunder “Accounts income payable for and the otheryear ended current December liabilities” 31, account 2019 (see in the Note consolidated 24) In February statement 2020, of comprehensiveMPIC effected incomeand for the yearimplemented ended December the debt reduction31, 2019 (seeexercise. Note 24)In November In February 2020, 2020, MPIC MPIC entered effected into, and a implemented=14.5P Billion, the 10-Year debt reduction Term Loan exercise. from Philippine In November National 2020, Bank. MPIC The entered proceeds into, from a the loan =14.5wereP used Billion, by MPIC 10-Year to refinanceTerm Loan existing from Philippine term loans, National and for Bank.other generalThe proceeds corporate from purposes. the loan were used by MPIC to refinance existing term loans, and for other general corporate purposes. In 2020, in connection with the planned sale of the GBPC shares (see Note 32), BPHI sought consent Infrom 2020, its creditorin connection to prepay with the the outstanding planned sale portion of the ofGBPC its debt shares (P=8,640 (see million,Note 32), at BPHI nominal sought amount). consent Prepaymentfrom its creditor is scheduled to prepay in the 2021, outstanding with proceeds portion from of its the debt sale (P =8,640of GBPC million, shares at to nominal be used amount).to prepay Prepaymentthe debt. The is pledgescheduled on the in 2021,GBPC with shall proceeds be terminated from the upon sale full of andGBPC final shares discharge to be ofused the to obligation prepay theunder debt. the TheLoan pledge Facility on Agreement. the GBPC shall In connection be terminated with upon the prepayment full and final and discharge refinancing, of the the obligation underCompany the Loanrecognized Facility estimated Agreement. prepayment In connection penalties with and the interests prepayment of P=128 and million refinancing, and accelerated the Companyamortization recognized of the of estimatedthe remaining prepayment balance penaltiesof the debt and issuance interests cost of P=128in the million statements and ofaccelerated amortizationcomprehensive of incomethe of the for remaining the year ended balance December of the debt 31, issuance 2020. The cost Company in the statements also classified of the comprehensivelong-term debt asincome current for liability the year as ended at December December 31, 31, 2020 2020. in the The Company’s Company statement also classified of financial the long-termposition. debt as current liability as at December 31, 2020 in the Company’s statement of financial position. The Company has access to the following undrawn borrowing facilities as at December 31, 2020: The Company has access to the following undrawn borrowing facilities as at December 31, 2020: Expiring Expiring withinExpiring2021 BeyondExpiring2021 Total within 2021 Beyond(In Millions)2021 Total Toll Operations P=5,900 (In P=Millions)58,370 P=64,270 TollWater Operations P=5,900200 P=58,3705,646 P=64,2705,846 WaterLogistics 200– 5,646– 5,846– LogisticsRail 6,750– 1,164– 7,914– Rail P=12,8506,750 P=65,1801,164 P=78,0307,914 P=12,850 P=65,180 P=78,030

19. Related Party Transactions 19. Related Party Transactions On October 18, 2019, MPIC’s Audit Committee acting through the authority granted by MPIC’s BODOn October in its BOD 18, 2019, meeting MPIC’s held Auditon August Committee 1, 2019, acting approved through and the adopted authority the “Revisedgranted by Related MPIC’s Party TransactionBOD in its BOD Policy” meeting in compliance held on August with the 1, Philippine2019, approved SEC Memorandumand adopted the Circular “Revised No. Related 10, Series Party of 2019,Transaction or the Policy”Rules on in Material compliance Related with Party the Philippine Transactions SEC (MRPT) Memorandum for Publicly-Listed Circular No. Companies10, Series of. 2019, or the Rules on Material Related Party Transactions (MRPT) for Publicly-Listed Companies. This MRPT Policy applies to MPIC and covers related party transactions that meet the Materiality ThresholdThis MRPT of Policy 10% of applies MPIC’s to MPICtotal consolidated and covers relatedassets. partyIt defines transactions the processes, that meet controls the Materiality and safeguardsThreshold offor 10% the properof MPIC’s handling, total consolidated including review, assets. approval It defines and the disclosure, processes, of controls such related and party transactionssafeguards for in theaccordance proper handling, with applicable including laws review, and regulations. approval and disclosure, of such related party transactions in accordance with applicable laws and regulations. MPIC’s Revised Related Party Transaction Policy also provides for the guidelines and the necessary approvalsMPIC’s Revised for transactions Related Party involving Transaction an amount Policy below also the provides Materiality for the Threshold. guidelines and the necessary approvals for transactions involving an amount below the Materiality Threshold.

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Transactions with related parties are disclosed below. See tabular presentation for the recorded Transactionstransactions with with these related related parties parties. are disclosed below. See tabular presentation for the recorded transactions with these related parties. Transactions with PLDT, SMART and Digitel Mobile Philippines, Inc. (Digitel). The Company’s Transactionsprimary telecommunications with PLDT, SMART carriers and are Digitel PLDT Mobile (an associate Philippines, of FPC) Inc. for (Digitel). its wireline The and Company’s SMART primary(PLDT’s telecommunications subsidiary) for its wireless carriers services. are PLDT The (an Company associate ofalso FPC) has transactionsfor its wireline with and Digitel, SMART a (PLDT’ssubsidiary subsidiary) of PLDT. forSuch its serviceswireless areservices. covered The by Companystandard service also has contracts transactions between with the Digitel, a subsidiarytelecommunications of PLDT. carriers Such services and each are entity covered within by standardthe Company. service Other contracts than betweenthese service the contracts, telecommunicationsthe Company also has carriers the following and each transactions entity within with the these Company. telecommunication Other than these carriers: service contracts, the Company also has the following transactions with these telecommunication carriers: ƒ Utilities Facilities Contract between NLEX Corp. and PLDT for the Fiber Optic Overlay along ƒ PhaseUtilities I of Facilities the NLEX. Contract PLDT between pays an NLEX annual Corp. fee presented and PLDT as “Others”for the Fiber in the Optic consolidated Overlay along Phasestatements I of theof comprehensiveNLEX. PLDT income.pays an annual Pursuant fee to presented the agreement, as “Others” PLDT in shall the consolidated pay NLEX Corp. statementsfixed annual of fee comprehensive which shall then income. be escalated Pursuant annually to the agreement, by a percentage PLDT indicated shall pay in NLEX the Corp. fixedagreement. annual The fee whichcontract shall shall then be beeffective escalated for annuallya period ofby 20 a percentage years from indicated April 15, in2010 the and may agreement.be renewed orThe extended contract upon shall mutual be effective agreement for a periodby NLEX of 20 Corp. years and from PLDT. April On 15, 2010 and may beSeptember renewed 19, or extended2016, the uponcontract mutual was agreementrenewed for by a NLEX period Corp.of 5 years and PLDT.up to April On 26, 2020. The Septembercontract renewal 19, 2016, is still the on contract going aswas of renewedMarch 19, for 2021. a period of 5 years up to April 26, 2020. The contract renewal is still on going as of March 19, 2021. ƒ Utilities Facilities Contract between NLEX Corp. and SMART whereby NLEX Corp. provides ƒ UtilitiesSMART Facilitiesan access Contractfor the construction, between NLEX operation Corp. andand maintenance SMART whereby of a cellsite NLEX inside Corp. the provides NLEX SMARTright of way an accessfor a fixed for the annual construction, fee which operation shall then and be maintenanceescalated annually of a cellsite starting inside on the the NLEX rightfourth of year way of for the a contractfixed annual and everyfee which year shallthereafter. then be The escalated contract annually is effective starting for aon period the of fourthfive (5) year years of fromthe contract April 27, and 2015 every and year may thereafter. be renewed The or contract extended is upon effective mutual for agreementa period of by fiveNLEX (5) Corp. years andfrom SMART. April 27, The 2015 contract and may was be renewed renewed for or anotherextended 5 uponyears mutualafter its agreement expiration by on NLEXApril 26, Corp. 2020. and SMART. The contract was renewed for another 5 years after its expiration on April 26, 2020. ƒ Advertising arrangements of NLEX Corp. with SMART related to various advertising mediums ƒ whichAdvertising include arrangements rental, material of NLEX production, Corp. installationwith SMART and related maintenance to various at several advertising locations mediums along whichNLEX. include rental, material production, installation and maintenance at several locations along NLEX. ƒ NLEX Corp. has investment in corporate notes of PLDT with fair value of =192P million as at ƒ NLEXDecember Corp. 31, has 2018. investment Investment in corporate was sold notes in September of PLDT 2019. with fair value of =192P million as at December 31, 2018. Investment was sold in September 2019. Transactions with D.M. Consunji, Inc. (Consunji). Maynilad, entered into certain construction Transactionscontracts with with Consunji, D.M. Consunji, a subsidiary Inc. of (Consunji). DMCI Holdings,Maynilad, Inc. (aentered non-controlling into certain shareholder construction in contractsMWHC), within relation Consunji, to the a subsidiaryprovision ofof engineering,DMCI Holdings, procurement Inc. (a non-controlling and construction shareholder services to in MWHC),Maynilad. in relation to the provision of engineering, procurement and construction services to Maynilad. Consunji also entered into construction contracts with MPCALA and NLEX Corp. for the Consunjiconstruction also of entered the Laguna into construction Segment of thecontracts CALAX with and MPCALA first section and of NLEX the NLEX-SLEX Corp. for the Connector constructionRoad. The contract of the Laguna price for Segment the CALAX of the and CALAX NLEX-SLEX and first Connectorsection of theRoad NLEX-SLEX amounted to Connector Road.P=7.2 billion The contract and =8.0P price billion, for therespectively, CALAX andsubject NLEX-SLEX to adjustments Connector as provided Road foramounted in the contract. to P=7.2The contract billion and prices =8.0P were billion, determined respectively, after negotiationssubject to adjustments between parties as provided and were for basedin the oncontract. normal Thecommercial contract terms. prices were determined after negotiations between parties and were based on normal commercial terms. Advances to DMCI in relation to the toll projects are included under the account “Advances to AdvancesContractors” to DMCIpresented in relation under “Other to the tollnoncurrent projects assets” are included account under in the the consolidated account “Advances statements to of Contractors”financial position presented as at Decemberunder “Other 31, noncurrent2020 and 2019. assets” account in the consolidated statements of financial position as at December 31, 2020 and 2019.

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Transactions with MERALCO. MERALCO sells electricity to the Company for the Company’s Transactionsfacilities within with MERALCO’s MERALCO. franchise MERALCO area. sells The electricity rates charged to the by Company MERALCO for theare Company’sthe same facilitiesmandated within rates byMERALCO’s the ERC applicable franchise to area. customers The rates within charged the franchise by MERALCO area. Aside are thefrom same this mandatedtransaction, rates listed by belowthe ERC are applicablethe Company’s to customers transactions within with the MERALCO franchise area. and Asideits subsidiaries: from this transaction, listed below are the Company’s transactions with MERALCO and its subsidiaries: ƒ As at December 31, 2020 and 2019, NLEX Corp. has advances to MERALCO amounting to ƒ AsP=22 at million December and P=1831, 2020 million, and respectively, 2019, NLEX which Corp. washas advancesincluded asto partMERALCO of “Advances amounting to to P=22contractors million and and consultants” P=18 million, presented respectively, under which “Other was current included assets” as part in ofthe “Advances consolidated to contractorsstatements ofand financial consultants” position. presented The advances under “Other relate current to electric assets” line inapplications the consolidated for Segment 9 statementsof the NLEX, of financialand the Balintawak position. The and advances Valenzuela relate drainage to electric system. line Theseapplications advances for areSegment either 9 ofrefundable the NLEX, or consumableand the Balintawak upon activation and Valenzuela of the electric drainage lines. system. These advances are either refundable or consumable upon activation of the electric lines. ƒ NLEX Corp. has investment in corporate notes of MERALCO with fair value of P=193 million as ƒ NLEXat December Corp. 31,has 2018.investment The investmentin corporate was notes redeemed of MERALCO in 2019. with fair value of P=193 million as at December 31, 2018. The investment was redeemed in 2019. ƒ Maynilad has outstanding payable to Meralco Industrial Engineering Services Corporation ƒ Maynilad(MIESCOR, has a outstanding subsidiary ofpayable MERALCO) to Meralco amounting Industrial to P=7Engineering million and Services P=6 million Corporation as at (MIESCOR,December 31, a 2020subsidiary and 2019 of MERALCO) relating to construction amounting tocosts P=7 millionon pipelaying. and P=6 million as at December 31, 2020 and 2019 relating to construction costs on pipelaying. ƒ GBPC’s transactions with MERALCO: ƒ GBPC’s transactions with MERALCO: o In 2016, GBPC’s subsidiaries PPC and TPC entered into Interim Power Supply Agreements (IPSAs) with MERALCO for the intermediate and peak power requirements o In 2016, GBPC’s subsidiaries PPC and TPC entered into Interim Power Supply Agreementsof MERALCO (IPSAs) with the with combined MERALCO maximum for the capacity intermediate of 73MW and peak covering power the requirements period ofFebruary MERALCO 2016 upwith to theFebruary combined 2017. maximum Both IPSAs capacity were of extended 73MW coveringup to February the period 2018. FebruaryAlso in 2016, 2016 GBPC’s up to February subsidiary 2017. PEDC Both entered IPSAs into were a 20-yearextended Power up to SupplyFebruary Agreement 2018. Also(PSA) in with 2016, MERALCO GBPC’s subsidiary with a Contract PEDC Capacityentered into of 70MW.a 20-year The Power PSA Supply was implemented Agreement (PSA)in January with 2017 MERALCO at a rate withbased a onContract the provisional Capacity authorityof 70MW. granted The PSA by the was ERC implemented in ERC inCase January No. 2016-114 2017 at a RC. rate based on the provisional authority granted by the ERC in ERC Case No. 2016-114 RC. In 2018, GBPC’s subsidiary PEDC entered into a 3-month IPSA with MERALCO Inthrough 2018, itsGBPC’s retail electricity subsidiary supply PEDC business entered intosegment, a 3-month MPower, IPSA for with the MERALCOpurchase of up to through50MW covering its retail theelectricity period Aprilsupply to business June 2018. segment, MPower, for the purchase of up to 50MW covering the period April to June 2018. o GBPC’s subsidiary Global Luzon Energy Development Corporation (GLEDC) entered into a 20-year PSA with MERALCO in 2016 for the purchase of up to 600MW of o GBPC’s subsidiary Global Luzon Energy Development Corporation (GLEDC) entered intoelectrical a 20-year output. PSA The with approval MERALCO of PSA in is2016 pending for the with purchase the ERC. of upThis to is600MW one of ofthe PSAs electricalaffected by output. the Supreme The approval Court Decisionof PSA is in pending ABP vs. with ERC, the et ERC. al (GR This No. is 227670).one of the As PSAs a affectedresult, GLEDC by the Supremeand MERALCO Court Decision filed a Joint in ABP Motion vs. ERC, to Withdraw et al (GR Joint No. Application227670). As a result,before GLEDCthe ERC. and The MERALCO Joint Motion filed was a grantedJoint Motion by the to ERC Withdraw in an Order Joint datedApplication August 13, before2019. the ERC. The Joint Motion was granted by the ERC in an Order dated August 13, 2019. o GBPC’s subsidiary Panay Energy Development Corporation (PEDC) entered into a 20- year PSA with MERALCO in 2016 for the purchase of up to 70MW of electrical output. o GBPC’s subsidiary Panay Energy Development Corporation (PEDC) entered into a 20- yearThis PSAis one with of the MERALCO PSAs affected in 2016 by thefor Supremethe purchase Court of Decisionup to 70MW in ABP of electrical vs. ERC, output. et al This(GR No.is one 227670). of the PSAs MERALCO affected filed by the an Supremeapplication Court before Decision the DOE in ABPto be vs.granted ERC, a et al (GRCertificate No. 227670). of Exemption MERALCO from the filed conduct an application of competitive before selectionthe DOE processto be granted to allow a Certificatecontinued implementation of Exemption from of the the PSA conduct with ofPEDC, competitive and was selection granted processin a letter to fromallow the continuedDOE dated implementation 15 January 2020. of theA Certificate PSA with ofPEDC, Exemption and was was granted issued in by a theletter DOE from for the a DOEperiod dated of one 15 (1) January year from 2020. August A Certificate 26, 2019 of to Exemption August 25, was 2020. issued Upon by expirationthe DOE for of athe periodCertificate of one of Exemption,(1) year from the August parties 26, executed 2019 to an August agreement 25, 2020. for continued Upon expiration of the Certificateimplementation of Exemption, of the 20-year the parties PSA from executed August an 26,agreement 2020 to for January continued 25, 2021. The implementation of the 20-year PSA from August 26, 2020 to January 25, 2021. The *SGVFSM006036* *SGVFSM006036*

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parties filed a Joint Manifestation with Motion before the ERC seeking approval of the partiesagreement filed for a Jointcontinued Manifestation implementation with Motion of the beforePSA. the ERC seeking approval of the agreement for continued implementation of the PSA. ƒ In 2017, LRMC entered into a memorandum of agreement with MERALCO to pay in advance all ƒ Incosts 2017, and LRMC expenses entered to be intoincurred a memorandum for the relocation of agreement of its electrical with MERALCO sub-transmission to pay in and advance all costsdistribution and expenses facilities to affected be incurred by the for construction the relocation works of its of electrical the LRT-1 sub-transmission Cavite Extension. and The distributionadvance payment facilities shall affected be returned by the to construction LRMC by MERALCO works of the upon LRT-1 payment Cavite of Extension. the applicable The advancerelocation payment charges shall by LRTA be returned to MERALCO, to LRMC asby stated MERALCO in the LRTA-MERALCO upon payment of the memorandum applicable of relocationagreement. charges As at December by LRTA 31,to MERALCO, 2020 and 2019, as stated receivable in the from LRTA-MERALCO MERALCO amounted memorandum to of agreement.P=171 million As and at P=83December million, 31, respectively. 2020 and 2019, receivable from MERALCO amounted to P=171 million and P=83 million, respectively. ƒ Colinas Healthcare, Inc. (CHI) (a wholly-owned subsidiary of CVHMC) operates and manages ƒ Colinasthe MERALCO Healthcare, Corporate Inc. (CHI) Wellness (a wholly-owned Center (Wellness subsidiary Center), of CVHMC) an outpatient operates diagnostic and manages and theconsultation MERALCO center Corporate for its employees Wellness Centerand their (Wellness dependents. Center), Income, an outpatient comprising diagnostic of management and consultationand retainer’s center fee, pharmacy for its employees handling and and their manpower dependents. and administrative Income, comprising reimbursement of management plus andmargin, retainer’s that was fee, recognized pharmacy forhandling this arrangement and manpower in 2019 and andadministrative 2018 amounted reimbursement to plus margin,P=49 million, that wasand isrecognized included asfor part this ofarrangement “Operations in of 2019 Entities and 2018under amounted PFRS 5” into the consolidated P=49statements million, of and comprehensive is included as income part of (see “Operations Note 32). of Entities under PFRS 5” in the consolidated statements of comprehensive income (see Note 32). Transactions with PCEV. Due to PCEV represents the present value of the outstanding amount for Transactionsthe purchase pricewith PCEVof Beacon. Due Electric to PCEV shares represents acquired the in present May 2016 value and of Junethe outstanding 2017: amount for the purchase price of Beacon Electric shares acquired in May 2016 and June 2017: ƒ On May 30, 2016, MPIC acquired from PCEV 645,756,250 common shares and 458,370,086 ƒ Onpreferred May 30, shares 2016, of MPICBeacon acquired Electric from for the PCEV total 645,756,250 consideration common of =26.2P shares billion. and Of 458,370,086 the total considerationpreferred shares of of=26.2P Beacon billion, Electric =17.0P for billion the total was consideration settled immediately of =26.2P while billion. the remainingOf the total payable toconsideration PCEV shall of be =26.2P paid asbillion, follows: =17.0P (a) billion P=2.0 billion was settled in June immediately 2017, (b) P=2.0 while billion the remaining in June 2018, payable to(c) PCEV =2.0P billion shall be in paidJune as 2019, follows: and (d) (a) P=3.2 P=2.0 billion billion in in June June 2020. 2017, The(b) P=2.0 outstanding billion in balance June 2018, as at (c)December =2.0P billion 31, 2019 in June amounting 2019, and to (d)=3.2P P=3.2 billion billion (at nominalin June 2020. amount) The was outstanding fully settled balance in June as at2020. December 31, 2019 amounting to =3.2P billion (at nominal amount) was fully settled in June 2020. ƒ On June 13, 2017, MPIC entered into a Share Purchase Agreement with PCEV for the purchase ƒ Onof PCEV’s June 13, 25% 2017, remaining MPIC entered interest into in Beacona Share PurchaseElectric for Agreement a total purchase with PCEV price forof =21.8Pthe purchase billion, ofP=12.0 PCEV’s billion 25% was remaining settled immediately interest in Beaconwhile the Electric remaining for a payable total purchase to PCEV price shall of be=21.8P settled billion, P=12.0equally billion over thewas next settled four immediately years beginning while June the 30,remaining 2018. The payable outstanding to PCEV balance shall be as settled at equallyDecember over 31, the 2020 next and four 2019 years amounted beginning to JuneP=2.4 30,billion 2018. and The =4.9P outstanding billion (at balancenominal as amounts). at PCEVDecember shall 31, retain 2020 the and voting 2019 rights amounted over tothese P=2.4 shares billion until and full =4.9P payment billion of(at the nominal total consideration. amounts). PCEV shall retain the voting rights over these shares until full payment of the total consideration. Transactions with Indra Phils. Indra Phils renders services to MPIC’s subsidiaries for the Transactionsimplementation with of Indrainformation Phils. systemsIndra Phils and renders the conduct services of business to MPIC’s process subsidiaries analysis for and the other implementationIT-related services. of information Services were systems provided and theto toll, conduct water of and business logistics process segments analysis of the and Company. other IT-related services. Services were provided to toll, water and logistics segments of the Company. Transactions with AFPI. As discussed in Note 10, AFPI was granted the rights and obligations to Transactionsdesign, finance, with construct, AFPI. As operate discussed and maintainin Note 10, the AFPI AFCS was Project granted for theLRT-1, rights LRT and 2, obligations and MRT to3. design,LRMC asfinance, the concessionaire construct, operate for the and LRT-1 maintain Project the usesAFCS the Project AFCS forat noLRT-1, consideration. LRT 2, and The MRT balance 3. LRMCpayable as to theAFPI concessionaire represents amount for the payable LRT-1 Projectby LRMC uses for the the AFCS purchase at no of consideration. stored value cards The balanceand payablesettlement to arisingAFPI represents from the railamount revenue payable operations. by LRMC for the purchase of stored value cards and settlement arising from the rail revenue operations. Transactions with ATEC. Refer to Notes 10 and 33. Transactions with ATEC. Refer to Notes 10 and 33. Transaction with Landco. Refer to Note 10. Transaction with Landco. Refer to Note 10. Transaction with TKC. Revenue from management fee represents fee for management services providedTransaction by PTwith Tirta TKC. BangunRevenue Nusantara from management (TBN) to TKC. fee represents fee for management services provided by PT Tirta Bangun Nusantara (TBN) to TKC. *SGVFSM006036* *SGVFSM006036*

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Transaction with IAB. In 2012, PT Portco Infranusantara, a wholly-owned subsidiary of PT TransactionNusantara, made with advancesIAB. In 2012, to IAB PT forPortco the latter’sInfranusantara, working acapital. wholly-owned The nontrade subsidiary receivables of PT are Nusantara,interest bearing made with advances interest to computed IAB for the at latter’sUSD LIBOR working plus capital. 3.5% perThe annum. nontrade The receivables term of the are interestreceivable bearing is up withto May interest 2022. computed at USD LIBOR plus 3.5% per annum. The term of the receivable is up to May 2022. Transactions with MPHHI and subsidiaries. Beginning December 2019, from a subsidiary, MPIC Transactionsstarted to account with forMPHHI its investment and subsidiaries in MPHHI. Beginning as an investment December in an2019, associate from a (see subsidiary, Note 10). MPIC startedDisclosures to account below for in relationits investment to MPHHI in MPHHI and its as subsidiaries an investment in relation in an associate to PAS 24 (see apply Note to 10). periods Disclosuresafter MPHHI’s below deconsolidation: in relation to MPHHI and its subsidiaries in relation to PAS 24 apply to periods after MPHHI’s deconsolidation: ƒ MPIC provides legal, human resources, treasury and accounting functions to MPHHI. ƒ MPIC provides legal, human resources, treasury and accounting functions to MPHHI. ƒ MPIC as an employer, provides annual physical and medical examination to its employees as part ƒ MPICof the employeeas an employer, benefits. provides Employees annual may physical choose and the medical service examination provider, not to necessarily its employees hospitals as part ofoperated the employee by MPHHI. benefits. For employeesEmployees whomay chosechoose to the use service MPHHI provider, operated not hospitals, necessarily the rateshospitals operatedcharged are by theMPHHI. same rates For employeesprovided to who all otherchose patients. to use MPHHI operated hospitals, the rates charged are the same rates provided to all other patients. Other transactions with related parties. Metro Pacific Investments Foundation, Inc. (MPIFI), OtherIdeaspace transactions Foundation, with Inc. related (Ideaspace; parties. Philippines’Metro Pacific largest Investments privately–funded Foundation, idea Inc. incubator (MPIFI), supported Ideaspaceby FPC), Lucena Foundation, Land Inc.Corporation (Ideaspace; (LLC; Philippines’ a subsidiary largest of Landco), privately–funded FPC and othersidea incubator mainly relate supported to byadvances FPC), Lucenato finance Land various Corporation projects (LLC; as well a assubsidiary intercompany of Landco), charges FPC for andshare others in certain mainly operating relate to advancesand administrative to finance expenses. various projects as well as intercompany charges for share in certain operating and administrative expenses. Revenue from water and sewer services. In the ordinary course of business, Maynilad provides water servicesRevenue tofrom its affiliateswater and located sewer withinservices. the InWest the Zoneordinary of thecourse Metropolitan of business, Manila Maynilad area atprovides the same water servicesapproved to rates its affiliates applicable located to customers within the within West the Zone concession of the Metropolitan area. Manila area at the same approved rates applicable to customers within the concession area.

*SGVFSM006036* *SGVFSM006036*

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The following table provides the total amount of transactions with related parties, other than advances, for the years ended December 31, 2020, 2019 and 2018 (amounts in millions):

Income Income Contracted Utilities Rentals Hospital Management from from Construction services (see Notes 21 (see Notes 21 Name Revenues Revenues Fees* Utility Facilities* Advertising* Cost (see Note 21) and 22) and 22) Associates and Joint Venture (see Note 10): MERALCO (including MIESCOR) 2020 P=1,815 P= – P= – P= – P= – P= – P= – (P=1,050) P= – 2019 1,784 49 – – – – – (1,597) – 2018 2,323 49 – – – – – (1,642) –

TKC 2020 – – – – – – – – – 2019 – – 10 – – – – – – 2018 – – – – – – – – –

Indra 2020 – – – – – – (379) – – 2019 – – – – – – (422) – – 2018 – – – – – – (318) – –

Other related parties: SMART 2020 – – – – – – – (92) – 2019 – – – – – – – (114) – 2018 – – – – 2 – – (53) –

PLDT 2020 – – – 2 – – – (56) (2) 2019 – – – 2 2 – – (78) (4) 2018 – – – 2 1 – – (79) (18)

Consunji 2020 – – – – – (7,019) – – – 2019 – – – – – (5,081) – – – 2018 – – – – – (1,157) – – – Total 2020 P=1,815 P= – P= – P= 2 P= – (P=7,019) (P=379) (P=1,198) ( P= 2 ) 2019 1,784 49 10 2 2 (5,081) (422) (1,789) (4) 2018 2,323 49 – 2 3 (1,157) (318) (1,774) (18) *Included as “Others” in the consolidated statements of comprehensive income.

*SGVFSM006036* - 65 - - 65 -

Outstanding balances of transactions with related parties are carried in the consolidated statements of financialOutstanding position balances under of thetransactions following with accounts related provided parties arebelow carried (amounts in the in consolidated millions). Tradestatements of financialreceivable, position accounts under payable the following and due to/from accounts related provided parties below are (amountsdue and demandable, in millions). non-interest Trade bearing,receivable, unsecured accounts and payable requires and cash due settlement.to/from related Except parties for arereceivables due and fromdemandable, Landco, non-interest all receivables frombearing, related unsecured parties and are requiresnot impaired. cash settlement. Except for receivables from Landco, all receivables from related parties are not impaired. Accounts Payable and Other Trade Receivables Current Liabilities (see Note 8) Due from related Parties* Accounts(see Payable Note 15and) Other Due to related Parties Trade Receivables Current Liabilities Company 2020 2019 2020 2019 2020 2019 2020 2019 (see Note 8) Due from related Parties* (see Note 15) Due to related Parties Associates and Joint Venture Company 2020 2019 2020 2019 2020 2019 2020 2019 MERALCO (including Associates and Joint Venture MIESOR) P= 4 7 P=363 P= 5 P=– P=128 P=81 P= 3 P=– MERALCO (including AFPI 5 – – – – 25 – – MIESOR) P=363 P=– P=81 P=– Indra Phils. P= 4– 7 1 P=– 5 – P=12833 89 P=– 3 – AFPI – – 25 – MPHHI –5 – 1– 97 – – – – Indra Phils. – 1 – – 33 89 – – TKC – – 20 22 – – – – MPHHI – 97 – – IAB – – 1041 122 – – 1– – TKC – – 20 22 – – – – OtherIAB related parties: – – 104 122 – – 1 – PCEV – – – – – – 2,388 7,791 Other related parties: Consunji 6 432 – – 495 455 – – PCEV – – – 7,791 FPC – – 1– 1 – – 2,388– – Consunji 432 – 455 – LLC –6 – – – 495– – – – FPC – 1 – – PLDT 4– 3 –1 – 14– 7 – – LLC – – – – Smart 1– 3 – – 10– 12 72– 72 PLDT 3 – 7 – Landco –4 – 133– 46 14– – 15– 15 Smart 3 – 12 72 Others –1 – 46– 16 10– – 722 – Landco – – 133 46 – – 15 15 63 802 310 304 680 669 2,481 7,878 Others – – 46 16 – – 2 – Less allowance for impairment – – 31 31 – – – – 63 802 310 304 680 669 2,481 7,878 Total 63 802 279 273 680 669 2,481 7,878 Less allowance for impairment – – 31 31 – – – – Less current portion 63 802 279 273 680 669 2,481 5,638 Total 63 802 279 273 680 669 2,481 7,878 Noncurrent portion P= – P=– P= – P=– P= – P=– P= – P=2,240 Less current portion 63 802 279 273 680 669 2,481 5,638 No*Includedncurrentunder portion“Other current assets” in the consolidatedP= – statementsP=– of financialP= – position (seeP= –Note 9). P= – P=– P= – P=2,240 *Included under “Other current assets” in the consolidated statements of financial position (see Note 9). Directors’ Remuneration AnnualDirectors’ remuneration Remuneration of the directors amounted to =8P million, P=8 million and P=6 million in 2020, Annual2019 and remuneration 2018, respectively. of the directors Directors amounted were also to allocated=8P million, common P=8 million shares and under P=6 million the Company’s in 2020, ESOP2019 and and 2018, RSUP respectively. (see Note 28). Directors were also allocated common shares under the Company’s ESOP and RSUP (see Note 28). Non-executive directors are entitled to a per diem allowance of =100,000P for each attendance in the ParentNon-executive Company’s directors BOD aremeetings entitled and to =50,000Pa per diem for allowance each attendance of =100,000P in the for Company’s each attendance Committee in the Parentmeetings. Company’s The Parent BOD Company’s meetings By-Lawsand =50,000P provide for eachthat anattendance amount equivalentin the Company’s to 1.0% Committeeof net profit aftermeetings. tax of The the Parent CompanyCompany’s shall By-Laws be allocated provide and that distributed an amount among equivalent the directors to 1.0% of of the net Parent profit Companyafter tax of who the Parentare not Companyofficers of shall the Parentbe allocated Company and ordistributed its subsidiaries among and the affiliates,directors ofin thesuch Parent Companymanner as whothe BOD are not may officers deem ofproper. the Parent No accruals Company were or itsmade subsidiaries with respect and toaffiliates, this scheme in such for the yearsmanner ended as the December BOD may 31, deem 2020, proper. 2019 and No 2018accruals in the were absence made ofwith resolution respect tofrom this the scheme BOD. for There the areyears no ended other Decemberspecial arrangements 31, 2020, 2019 pursuant and 2018to which in the any absence director of will resolution be compensated. from the BOD. There are no other special arrangements pursuant to which any director will be compensated. Compensation of Key Management Personnel Compensation of keyKey management Management personnel Personnel of the Company is as follows: Compensation of key management personnel of the Company is as follows: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re(In-presented Millions) *Re-presented Short-term employee benefits P=1,238 (In Millions)P=1,094 P=1,119 ShortShare--termbased employee payment benefits(see Note 28) P=1,238– P=1,094– P=1,11990 SharePost employment-based payment benefits (see -NoteRetirement 28) costs 45– 47– 9058 PostOther employment long-term benefits benefits - -LTIPRetirement expense costs 45 47 58 Other(see long-term Note 23) benefits - LTIP expense 539 837 623 (see Note 23) P=1,822539 P=1,837978 P=1,689023 *Comparative years re-presented as a result of a subsidiary qualifyingP=1,822 as a group held forP=1 deemed,978 disposal underP=1,890 *ComparativePFRS 5 (see Note years 33 re-presentedfor details) as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details) *SGVFSM006036* *SGVFSM006036*

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20. Equity 20. Equity Details of authorized and issued capital stock are in the following tables: Details of authorized and issued capital stock are in the following tables: 2020 2019 No. of Shares Amount No. of Shares 2020 Amount 2019 (In Millions except for number of shares) No. of Shares Amount No. of Shares Amount (In Millions except for number of shares) Authorized common shares - P=1.00 par value 38,500,000,000 P=38,500 38,500,000,000 P=38,500 Authorized preferred shares: Authorized common shares - P=1.00 par value 38,500,000,000 P=38,500 38,500,000,000 P=38,500 Class A - P=0.01 par value 20,000,000,000 200 20,000,000,000 200 Authorized preferred shares: Class B - P=1.00 par value 1,350,000,000 1,350 1,350,000,000 1,350 Class A - P=0.01 par value 20,000,000,000 200 20,000,000,000 200 Balance at December 31 59,850,000,000 P=40,050 59,850,000,000 P=40,050 Class B - P=1.00 par value 1,350,000,000 1,350 1,350,000,000 1,350 BalanceIssued and at DecemberOutstanding 31 - common shares: 59,850,000,000 P=40,050 59,850,000,000 P=40,050 Balance at beginning of year 31,569,338,752 P=31,570 31,541,548,752 P=31,542 Issued and Outstanding - common shares: Exercise of stock option plan (see Note 28) − − 27,790,000 28 Balance at beginning of year 31,569,338,752 P=31,570 31,541,548,752 P=31,542 ExerciseIssued - common of stock optionshares plan (see Note 28) 31,569,338,752− 31,570− 31,569,338,75227,790,000 31,57028 Less: Treasury Shares (900,540,000) (901) (600,000) (1) Issued - common shares 31,569,338,752 31,570 31,569,338,752 31,570 Balance at end of year 30,668,798,752 P=30,669 31,568,738,752 P=31,569 Less: Treasury Shares (900,540,000) (901) (600,000) (1) BalanceTreasury at shares end of - commonyear shares: 30,668,798,752 P=30,669 31,568,738,752 P=31,569 Balance at beginning of year 600,000 P= 4 26,100,000 P=178 Treasury shares - common shares: Share buy-back (see Note 28) 900,540,000 3,420* 600,000 3 Balance at beginning of year 600,000 P= 4 26,100,000 P=178 Share grant issuance (see Note 28) (600,000) (4) (26,100,000) (177) Share buy-back (see Note 28) 900,540,000 3,420* 600,000 3 Balance at end of year 600,000 P= 4 Share grant issuance (see Note 28) 900,540,000(600,000) P=3,420(4) (26,100,000) (177) BalanceIssued - preferredat end of yearshares - Class A: 900,540,000 P=3,420 600,000 P= 4 Balance at beginning and end of year 9,128,105,319 P= 9 1 9,128,105,319 P=91 Issued - preferred shares - Class A: Balance at beginning and end of year 9,128,105,319 P= 9 1 9,128,105,319 P=91 Total number of stockholders 1,291 − 1,307 − Total*Including number transaction of stockholders costs 1,291 − 1,307 − *Including transaction costs Common Shares CommonIn 2019, a Shares total of 27.8 million common shares, were issued in connection with MPIC’s stock option Inplan 2019, (see aNote total 28). of 27.8 In 2020,million MPIC common issued shares, 600,000 were common issued inshares connection from treasury with MPIC’s shares stockin option planconnection (see Note with 28). MPIC’s In 2020, stock MPIC option issued plan. 600,000 In June common 2019, MPIC’s shares eligible from treasury past and shares present in directors connectionand senior officerswith MPIC’s were grantedstock option MPIC plan. shares In totalingJune 2019, 26,100,000 MPIC’s commoneligible past shares and pursuant present directorsto andMPIC’s senior LTIP officers (see Notewere 28).granted MPIC shares totaling 26,100,000 common shares pursuant to MPIC’s LTIP (see Note 28). Class A Preferred Shares ClassHolders A Preferredof Class A Shares Preferred Shares are entitled to vote and shall receive preferential cash dividends Holdersat the rate of of Class 10.0% A Preferredper annum Shares based are on entitledshare’s parto vote value, and upon shall declaration receive preferential made at the cash sole dividends option atof thethe rateBOD. of 10.0%Dividends per annumon these based preferred on share’s shares, par which value, shall upon be declaration paid out of madethe Parent at the Company’s sole option ofunrestricted the BOD. retained Dividends earnings, on these are preferred cumulative shares, whether which or shallnot in be any paid period out of the the amount Parent is Company’s covered by unrestrictedavailable unrestricted retained earnings, retained earnings.are cumulative No dividends whether oror notother in distributionsany period the shall amount be paid is covered or declared by availableand set apart unrestricted for payment retained in respect earnings. of the No common dividends shares, or other unless distributions the full accumulated shall be paid dividends or declared on andall Class set apart A Preferred for payment Shares in respectshall have of thebeen common paid or shares,declared. unless Holders the full of Classaccumulated A Preferred dividends Shares on alldo Classnot have A Preferred right to participate Shares shall in anyhave additional been paid dividends or declared. declared Holders for ofcommon Class A shareholders. Preferred Shares MPHI doholds not all have of theright Parent to participate Company’s in any Class additional A Preferred dividends Shares. declared for common shareholders. MPHI holds all of the Parent Company’s Class A Preferred Shares. There are no undeclared dividends as at December 31, 2020, 2019 and 2018. There are no undeclared dividends as at December 31, 2020, 2019 and 2018.

*SGVFSM006036* *SGVFSM006036*

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Class B Preferred Shares ClassThe Parent B Preferred Company Shares may issue one or more series of Class B Preferred Shares, as the BOD may Thedetermine. Parent CompanyThe BOD mayshall issue also determineone or more (a) series cash dividendof Class Brate Preferred of such Shares, preferred as share,the BOD which may in no determine.case to exceed The 10.0% BOD pershall annum; also determine and (b) period (a) cash and dividend manner rateof conversion of such preferred to common share, shares which or in no caseredemption. to exceed Dividends 10.0% per on annum; these preferred and (b) period shares, and which manner shall of be conversion paid out of to the common Parent sharesCompany’s or redemption.unrestricted retained Dividends earnings, on these are preferred cumulative shares, whether which or shallnot in be any paid period out of the the amount Parent isCompany’s covered by unrestrictedavailable unrestricted retained earnings, retained earnings.are cumulative No dividends whether orshall not be in paidany periodor declared the amount and set is apart covered for by availablepayment inunrestricted respect of retainedthe common earnings. shares No or dividendsClass A Preferred shall be Shares,paid or declaredunless the and full set accumulated apart for paymentdividends in on respect all Class of theB Preferred common Sharesshares shallor Class have A beenPreferred paid orShares, declared. unless Holders the full of accumulated Class B dividendsPreferred Shareson all Classdo not B have Preferred right Sharesto participate shall have in any been additional paid or declared.dividends Holdersdeclared of for Class common B Preferredshareholders. Shares do not have right to participate in any additional dividends declared for common shareholders. There were no Class B Preferred Shares issued in 2020, 2019 and 2018. There were no Class B Preferred Shares issued in 2020, 2019 and 2018. Treasury Shares TreasuryOn December Shares 6, 2018, MPIC acquired additional 2,130,000 MPIC common shares, at =4.8075P per Onshare December from the 6,open 2018, market. MPIC On acquired January additional 9, 2019, 2,130,000MPIC acquired MPIC additional common shares,600,000 at MPIC =4.8075P common per shareshares, from at P=4.74230 the open permarket. share Onfrom January the open 9, 2019,market. MPIC acquired additional 600,000 MPIC common shares, at P=4.74230 per share from the open market. The treasury shares were acquired pursuant to the share buy-back that shall partially cover the up to Theapproximately treasury shares 26.7 weremillion acquired shares pursuant(originally to 27.4the share million buy-back shares) thatto be shall granted partially to the cover directors the up and to approximatelykey officers of 26.7the Company million shares under (originally the Company’s 27.4 millionLTIP program, shares) towhich be granted includes to the RSUPdirectors and key(see officersNote 28). of the Company under the Company’s LTIP program, which includes the RSUP (see Note 28). The RSUP and the implementation thereof which included the share buy-back, were approved by TheMPIC’s RSUP Compensation and the implementation Committee onthereof July 14,which 2016, included pursuant the toshare the authoritybuy-back, granted were approved to it by the by MPIC’s CompensationBOD on March Committee 1, 2016. on July 14, 2016, pursuant to the authority granted to it by the MPIC’s BOD on March 1, 2016. On February 26, 2020, the MPIC BOD approved the implementation of a Share Buyback Program. OnSaid February program 26, to run2020, for the a period MPIC of BOD three approved (3) months the fromimplementation the date of theof a approval Share Buyback by the BODProgram. or Saiduntil programMay 26, to2020, run withfor a theperiod amount of three of up (3) to months P=5 billion from being the dateallocated of the to approval effect share by the buybacks BOD or untilunder May the program.26, 2020, Thewith purposethe amount for theof upShare to P=5 Buyback billion beingProgram allocated was to to improve effect share shareholder buybacks value. underA total the of program.213,483,000 The shares purpose were for acquired the Share for Buyback purposes Program of the Share was toBuyback improve Program shareholder for an value. Aaccumulated total of 213,483,000 cost of P=706 shares million were (including acquired fortransaction purposes cost). of the Share Buyback Program for an accumulated cost of P=706 million (including transaction cost). On October 1, 2020, the MPIC’s Board of Directors approved the implementation of a Share OnBuyback October Program 1, 2020, of theup toMPIC’s P=5 billion Board commencing of Directors on approved October the2, 2020 implementation until the utilization of a Share of the Buybackaforementioned Program amount, of up toor P=5as billionmay otherwise commencing be determined on October by 2, the 2020 Board until of theDirectors. utilization The of purpose the aforementionedfor the Share Buyback amount, Program or as may is to otherwise enhance beand determined improve shareholder by the Board value of Directors.and to manifest The purpose forconfidence the Share in Buybackthe Company’s Program value is to and enhance prospects and improvethrough theshareholder repurchase value of its and common to manifest shares. confidenceConsequently, in the the Company’s Company’s value buyback and transactionsprospects through will be the triggered repurchase in the of cases its common where: shares.(i) the Consequently,Company's stock the is Company’s deemed to buybackbe substantially transactions undervalued, will be triggered (ii) when in there the casesis high where: volatility (i) the in share Company'sprices, or (iii) stock in any is deemed other instance to be substantially where a buyback undervalued, would serve(ii) when to enhance there is or high improve volatility shareholder in share prices,value, inor each (iii) inas anymay other be reasonably instance where determined a buyback by a specialwould serve committee to enhance of the or Board improve established shareholder for value,this purpose. in each Fromas may October be reasonably 2, 2020 determinedto November by 4, a 2020,special a committeetotal of 687,057,000 of the Board shares established were for thisacquired purpose. for purposes From October of the Share2, 2020 Buyback to November Program 4, 2020,for an a accumulated total of 687,057,000 cost of P=2,714 shares million,were acquiredincluding for transaction purposes costs.of the Share Buyback Program for an accumulated cost of P=2,714 million, including transaction costs. The cash portion of the LTIP was paid out in March 2019, while the shares in relation to the RSUP Thewere cash issued portion to the of grantees the LTIP in wasJune paid 2019. out in March 2019, while the shares in relation to the RSUP were issued to the grantees in June 2019.

*SGVFSM006036* *SGVFSM006036*

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Record of Registration of Securities with the SEC InRecord accordance of Registration with Revised of Securities SRC Rule with 68, the Annex SEC 68–K, below is a summary of the Company’s track Inrecord accordance of registration with Revised of securities: SRC Rule 68, Annex 68–K, below is a summary of the Company’s track record of registration of securities: Number of holders of securities as at Number of registered shares December 31, Issue Offer price Date of SEC approval securities Number2020 of holders2019 of securities as201 at 8 Tender offer to shareholders of Metro Four (4) MPC shares for one October 25, 2006 CommonNumber of shares registered of 56,878,766* shares 1,291 December1,307 31, 1,303 Issue Pacific Corporation (MPC) Offer price(1) MPIC share plus Date of SEC approval securities 2020 2019 2018 Tender coveringoffer to shareholders common shares of Metro and Four (4)three MPC (3) shares warrants for one October 25, 2006 SubscriptionCommon shares warrants of 56,878,766* of 1,291– 1,307– 1,303– subscriptionPacific Corporation warrants (MPC) relating to (1) MPIC share plus 170,636,298 commoncovering commonshares of sharesMPIC withand three (3) warrants Subscription warrants of – – – subscriptionpar value of P=warrants1.0 per sharerelating to 170,636,298 *Coveredcommon the 2006 shares registered of MPIC shares with only par value of P=1.0 per share *Covered the 2006 registered shares only The shares relating to the transaction above were exchanged in the PSE on December 15, 2006, effectivelyThe shares listingrelating MPIC to the via transaction listing by above way of were Introduction. exchanged Outin the of PSEthe total on December warrants available 15, 2006, for effectivelyconversion, listing 143,976,756 MPIC viawarrants listing were by way converted of Introduction. as at December Out of 31, the 2007 total andwarrants 2,549,211 available warrants for expiredconversion, on December 143,976,756 15, warrants2007. were converted as at December 31, 2007 and 2,549,211 warrants expired on December 15, 2007. Retained Earnings and Cash Dividends OfRetained the Company’s Earnings andconsolidated Cash Dividends retained earnings, =13,874P million and =18,219P million is available Offor thedividend Company’s declaration consolidated as at December retained 31,earnings, 2020 and =13,874P 2019, million respectively. and =18,219P These millionamounts is representavailable forthe dividendParent Company’s declaration retained as at December earnings available31, 2020 andfor dividend2019, respectively. declaration Thesecalculated amounts based represent on the regulatorythe Parent Company’srequirements retained of the Philippineearnings available SEC. The for difference dividend declarationbetween the calculated consolidated based retained on the earningsregulatory and requirements the Parent Company’sof the Philippine retained SEC. earnings The difference available betweenfor dividend the consolidateddeclaration primarily retained earningsconsist of and undistributed the Parent Company’searnings of subsidiariesretained earnings and equity available method for dividendinvestees. declaration Stand-alone primarily earnings ofconsist the subsidiaries of undistributed and share earnings in net of earnings subsidiaries of equity and equity method method investees investees. are not Stand-alone available for earnings dividend declarationof the subsidiaries by the Parentand share Company in net earnings until declared of equity by themethod subsidiaries investees and are equity not available investees for as dividend declarationdividends. by the Parent Company until declared by the subsidiaries and equity investees as dividends. Dividends declared and paid are as follows: Dividends declared and paid are as follows: 2020 2019 2018 2020 (In 201Millions)9 2018 Declared and paid: (In Millions) DeclaredFinal and dividend paid:: Final Common dividend shareholders: (P=0.076 for the calendar Commonyears shareholders2019, 2018 and (P=0.0762017 ,for respectively) the calendar P=2,396.3 P=2,395.1 P=2,395.0 Classyears A preferred2019, 201 shareholders8 and 2017, respectively) P=2,396.34.6 P=2,395.14.6 P=2,395.04.6 InterimClass dividend A preferred: shareholders 4.6 4.6 4.6 Interim Common dividend shareholders: (P=0.0345per share in Common2020, shareholders 2019 and 2018 (P=0.0345per share in 1,081.7 1,088.3 1,087.2 Class2020, A preferred 2019 and shareholders 2018 1,081.74.6 1,088.34.6 1,087.24.6 Class A preferred shareholders P=3,487.24.6 P=3,492.64.6 P=3,491.44.6 P=3,487.2 P=3,492.6 P=3,491.4 On March 3, 2021, the BOD approved the declaration of the cash dividends of =0.076P per common shareOn March in favor 3, 2021, of the the Company’s BOD approved shareholders the declaration of record of as the of cashthe record dividends date ofat =0.076PMarch 18,per 2021common with paymentshare in favor date ofof Marchthe Company’s 31, 2021. shareholders On the same of date, record the as BOD of the also record approved date atthe March declaration 18, 2021 of cashwith paymentdividends date amounting of March to 31,a total 2021. of P=4.6 On the million same in date, favor the of BOD MPHI also as approvedthe sole holder the declaration of Class A of cash Preferreddividends shares.amounting to a total of P=4.6 million in favor of MPHI as the sole holder of Class A Preferred shares. Amendment of Articles of Incorporation OnAmendment February of8, Articles2019, MPIC’s of Incorporation BOD approved to amend the Company’s Articles of Incorporation. OnThe February amendment 8, 2019, was made MPIC’s to update BOD approved the primary to amendpurpose the of Company’s the Company Articles consistent of Incorporation. with its current businessThe amendment operations. was Onmade May to 27,update 2019 the and primary July 2, purpose 2019, such of the modification Company consistent was approved with byits thecurrent stockholdersbusiness operations. and SEC, On respectively. May 27, 2019 and July 2, 2019, such modification was approved by the stockholders and SEC, respectively. *SGVFSM006036* *SGVFSM006036*

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After the amendment, the Company’s primary purpose is to acquire by purchase, exchange, assignment,After the amendment, gift or otherwise, the Company’s and to hold, primary own, purpose and use is for to investmentacquire by purchase,or otherwise, exchange, and to sell, assignment,assign, transfer, gift exchange,or otherwise, lease, and let to develop, hold, own, mortgage, and use pledge,for investment deal in andor otherwise, with and otherwiseand to sell, operate,assign, transfer, enjoy and exchange, dispose lease,of, any let and develop, all properties mortgage, of every pledge, kind deal and in description and with and and otherwise wherever situatedoperate, (exceptenjoy and a direct dispose ownership of, any and of land all properties in the Philippines), of every kind as and and to description the extent permittedand wherever by law, situatedincluding, (except but not a directlimited ownership to bonds, ofdebentures, land in the promissory Philippines), notes, as and shares to the of extentcapital permittedstock, or otherby law, securitiesincluding, and but obligations,not limited tocreated, bonds, negotiated debentures, or promissory issued by any notes, corporation, shares of association,capital stock, or or other other entity,securities foreign and obligations,or domestic created,and while negotiated the owner, or holder,issued byor anypossessor corporation, thereof, association, to exercise or all other the rights, entity,powers, foreign and privileges or domestic of ownership and while orthe any owner, other holder, interest or therein, possessor including thereof, the to right exercise to receive, all the rights, collectpowers, and and dispose privileges of, anyof ownership and all dividends, or any other interests interest and therein, income, including derived therefrom,the right to and receive, the right to votecollect on and any dispose proprietary of, any or otherand all interest, dividends, on any interests shares and of the income, capital derived stock andtherefrom, upon any and bonds, the right to debentures,vote on any orproprietary other securities, or other having interest, voting on any power, shares so of owned the capital or held, stock and, and in itsupon capacity any bonds, as a debentures,holding company, or other to securities, invest in, submithaving proposalsvoting power, for or so participate owned or held,(whether and, by in itselfits capacity or as a as a consortiumholding company, member, to investjoint venture in, submit partner, proposals or otherwise) for or participate in the acquisition (whether of by interests itself or in as and a to infrastructureconsortium member, projects joint and ventureother allied partner, businesses, or otherwise) but without in the engagingacquisition in ofthe interests business in of and an to infrastructureinvestments company projects underand other the Investmentallied businesses, Company but Actwithout or a engagingfinance company in the business or a broker of an or dealer ininvestments securities companyor stocks. under the Investment Company Act or a finance company or a broker or dealer in securities or stocks. OCI Reserve OCI Reservereserve consists of the following, net of applicable income taxes: OCI reserve consists of the following, net of applicable income taxes: 2020 2019 2018 2020 (In Millions)2019 2018 Share in the OCI (loss) of equity method investees (P=1,471) (In Millions)P=1,703 P=2,650 ShareFair value in the changes OCI (loss) on financialof equity assets method at FVOCI investees (P=1,471) P=1,703 P=2,650 Fair (seevalue Note changes 38) on financial assets at FVOCI 166 69 65 Actuarial(see Notelosses 38) (632)166 (315)69 (24)65 ActuarialCumulativelosses translation adjustment (1,166)(632) (315)(866) (830)(24) Cumulative translation adjustment (P=3,103)(1,166) P=(866)591 P=1,861(830) (P=3,103) P=591 P=1,861 Refer to Note 25 for the movements and analysis of the OCI. Refer to Note 25 for the movements and analysis of the OCI.

21. Cost of Sales and Services 21. Cost of Sales and Services This account consists of: This account consists of: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented Amortization of service concession assets (In Millions) Amortization(see Note of 12) service concession assets P=5,261 P=5,520 P=4,514 Personnel(see Note costs 12) and employee benefits P=5,261 P=5,520 P=4,514 Personnel(see Note costs 23) and employee benefits 3,509 3,752 3,276 PNCC(see and Note BCDA 23) fees (see Note 29) 3,5091,432 3,7522,032 3,1,861276 PNCCMaterials and and BCDA supplies fees (see Note 29) 1,4321,327 2,0321,116 1,861662 MaterialsUtilities (see and Note supplies 19) 1,3271,280 1,1161,488 1,492662 UtilitiesContracted (seeservices Note 19) and professional fees 1,2801,099 1,4881,122 1,4921,410 ContractedRepairs andservices maintenance and professional fees 1,099830 1,1221,172 1,4101,042 RepairsProvision and for maintenance heavy maintenance (see Note 16) 830334 1,172340 1,042236 ProvisionDepreciation for andheavy amortization maintenance (see (see Notes Note 11 16)and 13) 334263 340538 236230 Depreciation and amortization (see Notes 11 and 13) 263 538 230 (Forward) (Forward) *SGVFSM006036* *SGVFSM006036*

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2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented (In Millions) Trucking and freight forwarding costs P=204 P=339 P=203 TruckingInsurance and freight forwarding costs P=204179 P=339181 P=203147 InsuranceOperator’s fees 179109 181105 14756 Operator’sRentals fees 109101 10578 17156 RentalsOthers** 1,101341 1,30378 1,052171 Others** P=17,2691,341 P=19,0861,303 P=16,3521,052 *Comparative years re-presented as a result of a subsidiary qualifyingP= as17,269 a group held forP= deemed19,086 disposal underP=16,352 PFRS 5 *Comparative(see Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see**Includes Note 33 generation for details). costs, taxes and licenses, transportation and travel costs, toll collection and medical services and **Includesother various generation costs which costs, are taxes individually and licenses, insignificant. transportation and travel costs, toll collection and medical services and other various costs which are individually insignificant.

22. General and Administrative Expenses 22. General and Administrative Expenses This account consists of: This account consists of: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented Personnel costs and employee benefits (In Millions) Personnel(see Note costs 23) and employee benefits P=3,129 P=3,331 P=3,081 Depreciation(see Note and 23) amortization (see Notes 11, 13 P=3,129 P=3,331 P=3,081 Depreciationand 39) and amortization (see Notes 11, 13 1,224 1,176 717 Outsideand services39) (see Note 19) 1,289524 1,929176 717653 OutsideProfessional services fees (see Note 19) 895788 929822 653758 ProfessionalTaxes and licenses fees 786148 822774 754708 TaxesProvision and for licenses ECL (see Note 8) 614597 774187 470316 ProvisionCorporate forinitiatives ECL (see and Note others 8) 597546 187503 316443 CorporateAdvertising initiatives and promotion and others 546248 503505 443386 AdvertisingRepairs and andmaintenance promotion 248222 505244 386331 RepairsUtilities and(see maintenance Note 19) 222203 244233 331150 UtilitiesInsurance (see Note 19) 203197 233144 150124 InsuranceEntertainment, amusement and representation 112497 117844 119624 Entertainment,Transportation andamusement travel and representation 124118 178224 196133 TransportationAdministrative andsupplies travel 118109 22488 13380 AdministrativeCollection charges supplies 109106 14788 14780 CollectionRentals (see charges Note 29) 10653 14745 147250 RentalsTraining (sees and Noteseminars 29) 5328 4570 25076 TrainingOthers**s and seminars 38828 58370 27076 Others** P=9,589388 P=10,183583 P=8,581270 *Comparative years re-presented as a result of a subsidiary qualifying P=9,589as a group held forP= deemed10,183 disposal underP=8,581 PFRS 5 *Comparative(see Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see**Includes Note 33 other for details). various general and administrative expenses which are individually insignificant. **Includes other various general and administrative expenses which are individually insignificant.

*SGVFSM006036* *SGVFSM006036*

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23. Personnel Costs and Employee Benefits 23. Personnel Costs and Employee Benefits This account consists of: This account consists of: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented Salaries and wages P=4,832 (InP=4,986 Millions) P=4,579 LTIPSalaries expense and wages P=4,832539 P=4,986837 P=4,623579 LTIPRetirement expense costs 539304 837311 623254 ProvisionRetirement for costs ESOP and RSUP (see Note 28) 30434 311– 25490 OtherProvision employee for ESOP benefitsand RSUP (see Note 28) 92934 949– 81901 Other employee benefits P=6,638929 P=7,083949 P=6,357811 * Comparative years re-presented as a result of a subsidiary qualifyingP= as6,638 a group held forP= deemed7,083 disposal underP=6,357 PFRS 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented Cost of sales and services (see Note 21) P=3,509 (InP=3 ,Millions)752 P=3,276 GeneralCost of salesand administrative and services (see expenses Note 21) P=3,509 P=3,752 P=3,276 General(see andNote administrative 22) expenses 3,129 3,331 3,081 (see Note 22) P=6,6383,129 P=7,0833,331 P=6,3573,081 * Comparative years re-presented as a result of a subsidiary qualifyingP= as6,638 a group held forP= deemed7,083 disposal underP=6,357 PFRS 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). LTIP LTIPCertain of the Company’s employees are eligible for long-term employee benefits under a LTIP.Certain The of the liability Company’s recognized employees on the areLTIP eligible comprises for long-term the present employee value of benefits the defined under benefit a obligationLTIP. The and liability was determinedrecognized usingon the the LTIP projected comprises unit thecredit present method. value Each of the LTIP defined performance benefit cycle generallyobligation covers and was three determined (3) years using with paymentthe projected intended unit creditto be mademethod. at the Each end LTIP of each performance cycle (without cycle generallyinterim payments) covers three and (3)is contingent years with uponpayment the achievementintended to be of made an approved at the end target of each core cycleincome (without of the Companyinterim payments) by the end and of is the contingent performance upon cycle. the achievement Each LTIP ofperformance an approved cycle target is coreapproved income by ofthe the respectiveCompany byBODs the endof the of entitiesthe performance within the cycle. Company. Each LTIP performance cycle is approved by the respective BODs of the entities within the Company. As at December 31, 2020, 2019 and 2018, the LTIP payable is as follows: As at December 31, 2020, 2019 and 2018, the LTIP payable is as follows: 2020 2019 2018 2020 (In201 Millions)9 2018 Balance at beginning of year P=1,259 (InP=1,715 Millions) P=1,405 BalanceCurrent serviceat beginning cost - ofcontinuing year P=1,259539 P=1,715837 P=1,405623 Current service cost - entitiescontinuing under PFRS 5 539– 83785 62362 InterestCurrent service cost - entities under PFRS 5 – 85– 4262 InterestActuarial loss (gain) – – 42(8) DeconsolidationActuarial loss (gain of )a subsidiary – (85)– (8)– ReversalDeconsolidation/Reclass of a subsidiary (243)– (81)(85) – PaymentReversal/Reclass (243)– (1,212)(81) (409)– BalancePayment at end of year P=1,555– P=(1,212)1,259 P=1,715(409) Balance at end of year P=1,555 P=1,259 P=1,715

*SGVFSM006036* *SGVFSM006036*

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2020 2019 2018 2020 (In201 Millions)9 2018 Current P= – (In Millions)P=– P=1,430 CurrentNoncurrent* 1,555P= – 1,259P=– P=1,430285 Noncurrent* P=1,555 P=1,259 P=1,715285 * Included in “Other long-term liabilities” account. P=1,555 P=1,259 P=1,715 * Included in “Other long-term liabilities” account. LTIP of MPIC, MPHHI and Maynilad covers cycle 2016 to 2018 with pay-out in 2019 and cycles 2019LTIP toof 2021MPIC, with MPHHI payout and in Maynilad2022 covers cycle 2016 to 2018 with pay-out in 2019 and cycles 2019 to 2021 with payout in 2022 LTIP of MPTC covers cycle 2015 to 2017 with pay-out in 2018 and 2018 to 2020 with payout in 2021.LTIP of As MPTC at December covers cycle31, 2020, 2015 in to view 2017 of with the pay-outCOVID-19 in 2018 pandemic, and 2018 discussions to 2020 withare ongoing payout infor extending2021. As atthe December performance 31, 2020,cycle fromin view 2018-2020 of the COVID-19 to 2018-2021 pandemic, and making discussions 2020 a are non-performance ongoing for extendingyear. Hence, the payoutperformance which cyclewas originally from 2018-2020 expected to in2018-2021 2021 is now and expected making 2020 to be amade non-performance in 2022. Givenyear. Hence,this, MPTC payout reversed which wasLTIP originally accrued fromexpected 2019 in amounting 2021 is now to P=239.7expected million to be madeincluded in 2022. in “Others”Given this, in MPTCthe statement reversed of LTIPcomprehensive accrued from income. 2019 amounting to P=239.7 million included in “Others” in the statement of comprehensive income. In keeping with Maynilad’s practice over previous years, management intends to obtain approval for anIn keepingLTIP covering with Maynilad’s the period practice 2019-2022. over Theprevious program, years, including management coverage, intends criteria to obtain and incentives,approval for willan LTIP be submitted covering tothe the period Maynilad’s 2019-2022. BOD Thein 2021 program, after aincluding new concession coverage, agreement criteria and (“the incentives, Revised willConcession be submitted Agreement”) to the Maynilad’s has been agreed BOD inupon 2021 (see after Note a new 29). concession agreement (“the Revised Concession Agreement”) has been agreed upon (see Note 29). On January 31, 2020, the Compensation Committee approved MPIC’s LTIP covering cycle 2019 to 2021.On January MPIC’s 31, LTIP2020, comprises the Compensation of cash incentives Committee and approved share award. MPIC’s The LTIP Company covering shall cycle secure 2019 to exemption2021. MPIC’s ruling LTIP from comprises the SEC ofon cashthe share incentives award, and which share is award.necessary The for Company the Company shall secureto reacquire MPICexemption common ruling shares from inthe the SEC market. on the share award, which is necessary for the Company to reacquire MPIC common shares in the market. To fund the LTIP programs for each cycle, MPIC enters into Investment Management Agreement (IMA)To fund with the aLTIP Trustee programs Bank. for The each LTIP cycle, fund MPIC will continue enters into to accumulateInvestment Managementuntil the LTIP Agreement target payout. (IMA)The investment with a Trustee portfolio Bank. of IMA The isLTIP limited fund to will the continuefollowing: to securitiesaccumulate issued, until thedirectly LTIP or target indirectly, payout. orThe guaranteed investment by portfolio the government; of IMA is and limited time depositto the following: and money securities market placementsissued, directly issued or byindirectly, any of theor guaranteed top ten (10) by banks the government; in the Philippines. and time deposit and money market placements issued by any of the top ten (10) banks in the Philippines. Pension Pension Regulatory Environment. The Company operates both defined contribution and defined benefit schemes.Regulatory In Environment. addition, the CompanyThe Company has made operates provisions both defined for estimated contribution liabilities and definedfor employee benefit benefitsschemes. for In meeting addition, the the minimum Company benefits has made required provisions to be forpaid estimated to the qualified liabilities employees for employee as required underbenefits the for Republic meeting Act the (RA)minimum No. 7641, benefitsThe required Philippine to be Retirement paid to the Law qualified, for the employees entities operating as required in underthe Philippines; the Republic and Act the (RA)Indonesian No. 7641, LaborThe Law Philippine for PT Nusantara Retirement and Law its, subsidiaries.for the entities operating in the Philippines; and the Indonesian Labor Law for PT Nusantara and its subsidiaries. Under RA 7641, companies are required to pay a minimum benefit of equivalent to one-half month’s salaryUnder forRA every 7641, year companies of service, are requiredwith six (6)to pay months a minimum or more benefit of service of equivalent considered to as one-half one (1) month’syear, to salaryemployee for everywith at year least of five service, (5) years with ofsix services. (6) months For or the more entities of service of the consideredCompany operating as one (1) in year, the to Philippines,employee with they at provideleast five for (5) either years a ofdefined services. contribution For the entities retirement of the plan Company or a defined operating benefit in planthe thatPhilippines, consider they the minimumprovide for benefit either guaranteea defined mandatedcontribution under retirement RA 7641. plan or a defined benefit plan that consider the minimum benefit guarantee mandated under RA 7641. Under the Indonesian Labor Law, companies are required to pay separation, appreciation and compensationUnder the Indonesian benefits Labor to their Law, employees companies if the are conditions required to specified pay separation, in the Indonesian appreciation Labor and Law are met.compensation PT Nusantara benefits and to its their subsidiaries employees has if recognized the conditions an unfunded specified employeein the Indonesian benefits Laborliability Law in are met.accordance PT Nusantara with the and Indonesian its subsidiaries Labor Law. has recognized an unfunded employee benefits liability in accordance with the Indonesian Labor Law.

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Defined Contribution Retirement Plan. Certain entities of the Company operating in the Philippines provideDefined theContribution retirement Retirement benefits of Plan.employees Certain under entities a defined of the contribution Company operating scheme. in Each the Philippinesof these providecompanies the operates retirement its benefitsown retirement of employees plan. Theunder retirement a defined plan contribution is a contributory scheme. plan Each wherein of these the employercompanies undertakes operates its to own contribute retirement a predetermined plan. The retirement amount to plan the isindividual a contributory account plan of whereineach the employeeemployer undertakesand the employee to contribute gets whatever a predetermined is standing amount to his to credit, the individual upon separation, account fromof each the employeecompany. and The the retirement employee plans gets are whatever being managed is standing and to administered his credit, upon by theseseparation, companies’ from the respective compensationcompany. The committee. retirement plansEach areentity being has managedan appointed and administeredtrustee bank whichby these holds companies’ and invests respective the assetscompensation of the retirement committee. fund Each in accordance entity has anwith appointed the provisions trustee ofbank the whichretirement holds plan. and invests the assets of the retirement fund in accordance with the provisions of the retirement plan. Contributions to the retirement plan are made based on the employee’s monthly basic salary. Additionally,Contributions anto employeethe retirement has anplan option are made to make based a personal on the employee’s contribution monthly to the fund, basic atsalary. an amount not exceedingAdditionally, a certain an employee percentage has anof hisoption monthly to make salary a personal in accordance contribution with the to theentity’s fund, policy. at an amount The not employerexceeding then a certain provides percentage an additional of his monthlycontribution salary to inthe accordance fund which with aims the to entity’smatch the policy. employee’s The employercontribution then but provides only up an to additionala maximum contribution of 5.0% of tothe the employees’ fund which monthly aims to salary. match theAlthough employee’s the retirementcontribution plans but onlyof these up toentities a maximum have a ofdefined 5.0% contributionof the employees’ format, monthly these entities salary. are Although covered the under RAretirement 7641, whichplans ofprovides these entities a defined have benefit a defined minimum contribution guarantee format, for its these qualified entities employees. are covered The under RAdefined 7641, minimum which provides guarantee a defined is equivalent benefit to minimum a certain percentageguarantee for of itsthe qualified monthly employees.salary payable The to an employeedefined minimum at normal guarantee retirement is equivalentage with the to requireda certain creditedpercentage years of ofthe service monthly based salary on payablethe provisions to an ofemployee RA 7641. at normal Accordingly, retirement these age entities with theaccount required for thecredited retirement years obligationof service basedunder onthe the higher provisions of ofdefined RA 7641. benefit Accordingly, obligation relating these entities to the minimumaccount for guarantee the retirement and the obligation obligation under arising the fromhigher the of defined contributionbenefit obligation plan. relating Disclosures to the required minimum for guarantee a defined andbenefit the retirementobligation planarising apply from to the these companies’defined contribution retirement plan. plans Disclosures and are provided required together for a defined with the benefit defined retirement benefit retirementplan apply plans to these of the othercompanies’ subsidiaries retirement of the plans Parent and Company. 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 RA 7641 to evaluate the level of fundingEach year, that the would compensation ensure that committee the expected reviews future compliance value of the with defined RA 7641 benefit to evaluatecontribution the level plan ofasset isfunding sufficient that towould cover ensure the future that theexpected expected value future of retirement value of the benefits defined prescribed benefit contribution by RA 7641. plan asset is sufficient to cover the future expected value of retirement benefits prescribed by RA 7641. Defined Benefit Retirement Plan. These plans provide for a lump sum benefit payments upon Definedretirement. Benefit Retirement Plan. These plans provide for a lump sum benefit payments upon retirement. Certain entities of the Company have funded noncontributory defined benefit retirement plan coveringCertain entities all their of eligible the Company regular have employees. funded noncontributoryFor the entities withdefined funded benefit retirement retirement benefit plan plans, coveringplan assets all are their maintained eligible regular in trust employees. accounts with For local the entitiesbanks. withWhile funded there retirementare no minimum benefit funding plans, standardsplan assets in are the maintained Philippines, in thetrust companies accounts withannually local engage banks. the While services there of are an no actuary minimum to conduct funding a valuationstandards studyin the toPhilippines, determine thethe companiesretirement obligationsannually engage and the the level services of funding of an actuary to ensure to conductthat the a valuationassets currently study toin determinethe fund would the retirement be sufficient obligations to cover and expected the level benefit of funding payments. to ensure that the assets currently in the fund would be sufficient to cover expected benefit payments. The rest of the companies within the group each has an unfunded, noncontributory defined benefit retirementThe rest of planthe companies covering substantially within the group all of each their has respective an unfunded, employees. noncontributory While there defined are no benefit minimum retirementfunding standards plan covering in the Philippines,substantially these all of entities their respective also annually employees. engage theWhile services there ofare an no actuary minimum to conductfunding standardsa valuation in study the Philippines, to determine these the entitiesretirement also obligations annually engage and ensure the services that should of an there actuary be to maturingconduct a obligationsvaluation study in the to immediately determine the succeeding retirement periods, obligations these and are ensureappropriately that should considered there be in the budgetingmaturing obligations process. in the immediately succeeding periods, these are appropriately considered in the budgeting process.

*SGVFSM006036* *SGVFSM006036*

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Retirement Costs. The following tables summarize the components of the retirement costs under the Retirementdefined benefit Costs. plansThe and following the defined tables contribution summarize plans the components included in “Personnelof the retirement costs andcosts employee under the definedbenefits” benefit under plans“Cost and of sales the defined and services” contribution and “General plans included and administrative in “Personnel expenses” costs and accounts employee in benefits”the consolidated under “Cost statements of sales of andcomprehensive services” and income. “General and administrative expenses” accounts in the consolidated statements of comprehensive income. 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 (In*Re Millions)-presented *Re-presented Current service cost P=271 (In Millions)P=275 P=222 CurrentNet interest service cost cost P=27133 P=27536 P=22232 NetRetirement interest costscost for the year P=30433 P=31136 P=25432 Retirement costs for the year P=311 P=254 Actual return (loss) on plan assets P=304P= 9 5 P=131 (P=17) Actual* Comparative return (loss)years re-presentedon plan assets as a result of a subsidiary qualifying as P=a 9group 5 held for deemedP=131 disposal under( P=PFRS17) 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). Pension Assets and Accrued Retirement Costs. Reconciliation of net liability recognized in the consolidatedPension Assets statements and Accrued of financial Retirement position Costs. as Reconciliationat December 31 of follows: net liability recognized in the consolidated statements of financial position as at December 31 follows: 2020 2019 2018 2020 201(In 9Millions) 2018 Present value of defined benefit obligation (In Millions) Present(PVDBO) value of defined benefit obligation P=3,080 P=3,864 P=3,472 Fair (PVDBO)value of plan assets (FVPA) P=3,0801,778 P=3,8642,009 P=3,4721,960 FairNet liabilityvalue of plan assets (FVPA) P=1,7781,302 P=2,0091,855 P=1,9601,512 Net liability P=1,302 P=1,855 P=1,512 Pension asset(a) (P=2) (P=10) (P=91) (b) PensionAccrued assetretirement(a) liability 1,304(P=2) 1,865(P=10) 1,603(P=91) AccruedNet liability retirement liability (b) P=1,3041,302 P=1,8651,855 P=1,6031,512 Net(a)Included liability under “Other noncurrent assets” account. P=1,302 P=1,855 P=1,512 (b)Included under “Other long-term liabilities” account. (a)Included under “Other noncurrent assets” account. (b)Included under “Other long-term liabilities” account. Changes in PVDBO are as follows: Changes in PVDBO are as follows: 2020 2019 2018 2020 201(In 9Millions) 2018 PVDBO at beginning of year P=3,864 P=3,472(In Millions) P=3,290 PVDBO atfrom beginningacquisitions of year P=3,864– P=3,472– P=3,290302 PVDBOInterest cost from acquisitions 175– 230– 302195 InterestCurrent costservice costs 175412 230406 195391 CurrentBenefits service paid from: costs 412 406 391 BenefitsPlan paidasset from: (217) (145) (133) PlanCompany asset funds (217–) (145)(14) (133)(39) CurtailmentCompany funds – (14)– (39)– CurtailmentActuarial losses (gains) due to: – – – ActuarialChanges losses in financial (gains) due assumptions to: 265 757 (489) Changes in financialdemographics assumptions 265119 757(68) (489)(6) ChangesExperience in demographicsadjustments 1195 (68)(43) (39)(6) DeconsolidationExperience adjustments of MPHHI (see Note 32) 5– (731)(43) (39)– DeconsolidationLiabilities under ofPFRS MPHHI 5 (see(see Note Note 33 )32) (1,543)– (731)− −– LiabilitiesPVDBO at under end of PFRS the year 5 (see Note 33) P=3,080(1,543) P=3,864− P=3,472− PVDBO at end of the year P=3,080 P=3,864 P=3,472 *SGVFSM006036* *SGVFSM006036*

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Changes in FVPA are as follows: Changes in FVPA are as follows: 2020 2019 2018 2020 201(In 9Millions) 2018 FVPA at beginning of the year P=2,009 P=1,960(In Millions) P=1,578 FVPA atfrom beginningacquisitions of the year P=2,009– P=1,960– P=1,57858 FVPAInterest from incomeacquisitions included in net interest cost 95– 147– 10258 InterestBenefits income paid included in net interest cost (217)95 (145)147 (133)102 BenefitsContributions paid by employer (217)425 (145)498 (133)514 ContributionsRemeasurement by in employer OCI from return on plan asset 425 498 514 Remeasurementexcluding amount in OCI included from return in net on interest plan asset cost 1 (17) (159) Deconsolidationexcluding amount of MPHHI included(see in Notenet interest 32) cost −1 (434)(17) (159)– DeconsolidationLiabilities under ofPFRS MPHHI 5 (see(see Note Note 33) 32) (535)− (434)− −– LiabilitiesFVPA at end under of the PFRS year 5 (see Note 33) P=1,778(535) P=2,009− P=1,960− FVPA at end of the year P=1,778 P=2,009 P=1,960 The companies within the group expect to contribute a total of =320P million to their respective Theretirement companies funds within in 2021. the group expect to contribute a total of =320P million to their respective retirement funds in 2021. The major categories of the plan assets are the following: The major categories of the plan assets are the following: 2020 2019 2020 (In Millions) 2019 Philippine bonds and treasury notes P=1,093 (In Millions)P=1,254 Philippine bondsequity andsecuritiestreasury notes P=1,093529 P=1,254505 PhilippineCash in bank equity securities 52952 50562 CashUnit trustin bank funds 5299 6291 UnitReceivables trust funds and other assets 995 9197 Receivables and other assets P=1,7785 P=2,00997 P=1,778 P=2,009 The plan assets’ carrying amount approximates fair value since these are short–term in nature or Themark-to-market. plan assets’ carrying Philippine amount bonds approximates and treasury fairnotes value consist since of thesegovernment are short–term issued securities in nature andor mark-to-market.corporate bonds and Philippine subordinated bonds notes. and treasury Government notes consist securities of governmentconsist primarily issued of securities fixed–rate and corporatetreasury notes bonds and and retail subordinated treasury bonds. notes. PhilippineGovernment equity securities securities consist pertain primarily to investment of fixed–rate in shares of treasuryvarious listed notes entities.and retail treasury bonds. Philippine equity securities pertain to investment in shares of various listed entities. While the Company does not perform any Asset–Liability Matching Study, the risks arising from the Whilenature theof the Company assets comprising does not perform the fund any are Asset–Liability mitigated as follows: Matching Study, the risks arising from the nature of the assets comprising the fund are mitigated as follows: ƒ Credit Risks. Exposure to credit risk arises from financial assets comprising of cash and cash ƒ equivalents,Credit Risks. investments Exposure to and credit receivables. risk arises The from credit financial risk results assets fromcomprising the possible of cash default and cash of the equivalents,issuer of the investmentsfinancial instrument, and receivables. with a maximum The credit exposure risk results equivalent from the to possible the carrying default amount of the of issuerthe instruments. of the financial The riskinstrument, is minimized with aby maximum ensuring exposurethat the exposure equivalent is limitedto the carrying only to theamount of theinstruments instruments. as recommended The risk is minimized by the trust by managers. ensuring that the exposure is limited only to the instruments as recommended by the trust managers. ƒ Share Price Risk. Exposure arises from holdings of shares of stock being traded at the PSE. The ƒ Shareprice risk Price emanates Risk. Exposure from the arisesvolatility from of holdings the stock of market. shares ofPolicy stock is being to limit traded investments at the PSE. in The priceshares risk of stockemanates to blue from chip the issues volatility or issues of the with stock good market. fair values. Policy is to limit investments in shares of stock to blue chip issues or issues with good fair values.

*SGVFSM006036* *SGVFSM006036*

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ƒ Liquidity Risk. This risk relates to the risk that the fund is unable to meet its payment obligations ƒ associatedLiquidity Risk. with Thisits retirement risk relates liability to the whenrisk that they the fall fund due. is unableTo mitigate to meet this its risk, payment the entities obligations associatedcontribute towith their its respectiveretirement fundliability from when time they to time, fall due.based To on mitigate the recommendations this risk, the entities of their actuariescontribute with to their the objectiverespective of fund maintaining from time their to time, respective based fundon the in recommendationsa sound condition. of their actuaries with the objective of maintaining their respective fund in a sound condition. Actuarial Assumptions. Principal assumptions used in determining retirement obligations are shown Actuarialbelow: Assumptions. Principal assumptions used in determining retirement obligations are shown below: 2020 2019 2020 (In Percentage)2019 Annual discount rate 3.4% to 5.5% (In Percentage)4.7% to 5.6% AnnualFuture range discount of annual rate salary increases 3.4%3% to to 5. 8%5% 4.7%3% to to 5.6% 8% Future range of annual salary increases 3% to 8% 3% to 8% The discount rate represents the range of single weighted average discount rate used by each of the entitiesThe discount within rate the representsgroup in arriving the range at theof single present weighted value of average defined discount benefit obligation, rate used by service each ofand the entitiesinterest withincost components the group inof arrivingthe retirement at the presentcost. Assumptions value of defined regarding benefit future obligation, mortality service rate areand basedinterest on cost the componentsPhilippine Intercompany of the retirement Mortality cost. AssumptionsTable, which regardingprovides separate future mortality rates for ratemales are and females.based on the Philippine Intercompany Mortality Table, which provides separate rates for males and females. Sensitivity Analysis. The calculation of the defined benefit obligation is sensitive to the assumptions Sensitivityset above. Analysis.The following The calculationtable summarizes of the definedhow the benefit present obligation value of defined is sensitive benefit to theobligation assumptions as at setDecember above. 31The would following have tableincreased summarizes (decreased) how as the a presentresult of value change of definedin the respective benefit obligation assumptions as at by:December 31 would have increased (decreased) as a result of change in the respective assumptions by: % Change 2020 2019 % Change 2020 (In Millions) 2019 Annual discount rate + 1.0% (P=426) (In Millions)(=P301) Annual discount rate +– 1.0% (P=426513) (=P301)356 Future range of annual salary increases +– 1.0% 513 362356 Future range of annual salary increases +– 1.0% (435513) (313)362 – 1.0% (435) (313) The following table provides for the maturity analysis of the undiscounted benefit payments as at DecemberThe following 31: table provides for the maturity analysis of the undiscounted benefit payments as at December 31: 2020 2019 2020 (In Millions) 2019 Less than one year P=367 (In Millions) P=411 MoreLess than than one one year year to five years P=367942 1,585P=411 More than onefive yearto ten to years five years 1,942230 1,5851,766 BeyondMore than ten five years to ten years 12,8861,230 15,8061,766 TotalBeyond expected ten years benefit payments P=15,42512,886 P=19,56815,806 Total expected benefit payments P=15,425 P=19,568 The average duration of the defined benefit obligation is 18 years as at December 31, 2020 and 2019. The average duration of the defined benefit obligation is 18 years as at December 31, 2020 and 2019.

*SGVFSM006036* *SGVFSM006036*

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24. Interest Income, Interest Expense and Others 24. Interest Income, Interest Expense and Others The following are the sources of the Company’s interest income: The following are the sources of the Company’s interest income: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re(In Millions)-presented *Re-presented Cash and cash equivalents, short–term (In Millions) Cashdeposits and cash and equivalents, restricted cashshort–term (seedeposits Note and 7) restricted cash P=1,083 P=1,570 P=987 Finance(see incomeNote 7) from concession P=1,083 P=1,570 P=987 Financefinancial income receivable from concession (see Note 8) 145 153 30 Debtfinancial instruments receivable at FVOCI (see / NoteAFS 8) 145 153 30 Debtfinancial instruments assets at FVOCIand others* / AFS* 1 70 42 financial assets and others** P=1,2291 P=1,79370 P=1,05942 * Comparative years re-presented as a result of a subsidiary qualifyingP=1,229 as a group heldP= for1,793 deemed disposal underP=1,059 PFRS 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see**Includes Note 33 investments for details). in bonds and treasury notes **Includes investments in bonds and treasury notes The following are the sources of the Company’s interest expense: The following are the sources of the Company’s interest expense: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 (In*Re Millions)-presented *Re-presented Long-term debt (see Note 18) P=8,767 (In Millions)P=8,470 P=7,051 LongAccretion-term on deb financialt (see Note liabilities 18) P=8,767 P=8,470 P=7,051 Accretion(see Notes on financial 19 and liabilities29) 434 570 693 Accretion(see Notes on service 19 and concession29) fees 434 570 693 Accretionpayable on (seeservice Note concession 17) fees 628 582 518 Amortizationpayable (see of debt Note issue 17) costs 628 582 518 Amortization(see Note of 18) debt issue costs 147 123 80 Others(see Note 18) 14734 12343 8070 Others P=10,01034 P=9,77934 P=8,41270 * Comparative years re-presented as a result of a subsidiary qualifyingP=10,010 as a group held P=for9,779 deemed disposal underP=8,412 PFRS 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 Provisions(see Note for 33 fordecline details). in value of assets recognized in the consolidated statements of comprehensive Provisionsincome consists for decline of the infollowing: value of assets recognized in the consolidated statements of comprehensive income consists of the following: 2020 2019 2018 2020 (In Millions)2019 2018 Investments and advances* (In Millions) Investments(see Note and 10) advances* P=1,463 P=321 P=755 Goodwill(see (seeNote Notes 10) 11 and 14) P=1,463167 9,825P=321 P=75543 GoodwillOther assets (see(Note Notes9) 11 and 14) 16749 9,825– 43– OtherService assets concession(Note 9)assets (see Notes 11 49 – – Serviceand concession 12) assets (see Notes 11 6 11,417 – Warehousesand 12) leases and trucks 6 11,417 – Warehouses(see Note leases 13) and trucks – 437 – Customer(see contractsNote 13) (see Note 11) – 43720 – Customer contracts (see Note 11) P=1,685– P=22,02020 P=798– * Includes Provisions for decline in value of Receivables from ABHCP=1,685 in 2020 (see NoteP= 22,02010). P=798 * Includes Provisions for decline in value of Receivables from ABHC in 2020 (see Note 10).

*SGVFSM006036* *SGVFSM006036*

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“Others” recognized in the consolidated statements of comprehensive income consists of the following: “Others” recognized in the consolidated statements of comprehensive income consists of the following: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 (In*Re Millions)-presented *Re-presented Provisions (P=733) (In Millions)(P=1,669) (P=233) ProvisionsNet gain (loss) on prepayment of loan (see (P=733) (P=1,669) (P=233) Net gainNote (loss) 18): on prepayment of loan (see PenaltiesNote 18): and other prepayment Penaltiescharges and other prepayment (135) (525) (854) Derecognizedcharges unamortized debt issue (135) (525) (854) Derecognizedcost unamortized debt issue (97) (38) (186) Derecognizedcost unamortized PFRS 3 (97) (38) (186) Derecognizedfair value increment unamortized PFRS 3 – – 1,059 Foreign exchangefair value gainsincrement (loss) - net (47)– (16–) 1,059105 ForeignAdvertising, exchange marketing gains and(los tolls) - netservices 324(47) 493(16) 105339 Advertising,Dividend income marketing and toll services 32455 49366 339172 DividendRemeasurement income of previously held 55 66 172 Remeasurementinterest - PT of Nusantara previously(a) held – – 493 (b) Indemnityinterest and- PTclaims Nusantara (a) – – 493217 IndemnityRental income and claims (b) 59– 86– 21714 (c) RentalOthers income(see Notes 13 and 23) 25159 30186 40514 Others (c) (see Notes 13 and 23) (P=323)251 (P=1,302301) P=1,405531 * Comparative years re-presented as a result of a subsidiary qualifying(P=323) as a group held( P=for1,302 deemed) disposal underP=1, PFRS531 5 *(see Comparative Note 33 for years details). re-presented as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). a. Remeasurement of previously held interest pertains to the gain recognized in a step acquisition of a. Remeasurementa subsidiary that ofwas previously previously held accounted interest forpertains either to as the in gaininvestment recognized in an in associate a step acquisition or joint of venture.a subsidiary The that previously was previously held interest accounted is remeasured for either to as fair in investmentvalue at the in acquisition an associate date. or joint venture. The previously held interest is remeasured to fair value at the acquisition date. b. On February 28, 2018, MLCI, MMI and Yellowbear Holdings, Inc. (YHI) entered into a b. OnMemorandum February 28, of 2018,Agreement MLCI, for MMI MLCI’s and Yellowbearacquisition ofHoldings, the 24% Inc. shareholding (YHI) entered of YHI into in a MMI. ThisMemorandum transaction of also Agreement involved for the MLCI’s net settlement acquisition of MMI’s of the various24% shareholding claims against of YHI YHI in amounting MMI. toThis =217P transaction million (netalso ofinvolved indirect the taxes net ofsettlement =22P million). of MMI’s various claims against YHI amounting to =217P million (net of indirect taxes of =22P million). c. Others include other incidental income. c. Others include other incidental income.

*SGVFSM006036* *SGVFSM006036*

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25. Other Comprehensive Income 25. Other Comprehensive Income OCI recognized in the consolidated statements of comprehensive income consists of the following: OCI recognized in the consolidated statements of comprehensive income consists of the following: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re (In-presented Millions) *Re-presented Items to be reclassified to profit or loss in (In Millions) Itemssubsequentto be reclassified periods: to profit or loss in subsequentShare in the periods: OCI of an equity method Shareinvestee in the OCI coming of an from equity(see method Note 10): investeeChange incoming fair value from of( seefinancial Note 10): Changeassets in fairat FVOCI value of financial P= 4 6 P=231 (P=62) Changeassets in fairat FVOCI value of AFS financial P= 4 6 P=231 (P=62) Changeassets in fair value of AFS financial – – – Exchangeassets differences on translation – – – Exchangeof foreign differences operations on translationof investees (1,568) 511 62 Change inof fair foreign value operations of financialof assets investees at (1,568) 511 62 ChangeFVOCI in fair (see value Note of 38) financial assets at 20 134 (35) ExchangeFVOCI differences (see Note on 38) translation 20 134 (35) Exchangeof foreign differences operations on translationof subsidiaries (976) (106) (812) Incomeof foreign tax effect operations of subsidiaries (976)(8) (106)(14) (812)269 Income tax effect (2,486)(8) 756(14) (578)269 Items not to be reclassified to profit or loss (2,486) 756 (578) Itemsin not subsequent to be reclassified periods: to profit or loss inShare subsequent in the OCI periods: of an equity method Shareinvestee in the OCI coming of an from equity (see method Note 10): investeeActuarial coming gains (losses) from (see on Notedefined 10): Actuarialbenefit gains plans (losses) on defined (1,650) (1,696) 550 Changebenefit in fair plans value of financial (1,650) (1,696) 550 Changeassets in fairat FVOCI value of financial (1) 7 – Re–measurementassets at gainsFVOCI (losses) on defined (1) 7 – Re–measurementbenefit plans gains(see Note (losses) 23) on defined (333) (195) 129 Changebenefit in fair plans value (see of Note financial 23) assets at (333) (195) 129 ChangeFVOCI in fair value of financial assets at 35 (64) 78 IncomeFVOCI tax effect 3559 (64)46 (7831) Income tax effect (1,890)59 (1,90246) 726(31) (P=4,376)(1,890) (P=(1,9021,146) P=726148 * Comparative years re-presented as a result of a subsidiary qualifying(P=4,376) as a group held(P= 1,for146 deemed) disposal underP=148 *PFRS Comparative 5 (see Note years 33 forre-presented details). as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details). On consolidation, the assets and liabilities of foreign operations are translated into Philippine Peso at theOn rateconsolidation, of exchange the prevailing assets and at liabilities the reporting of foreign date and operations their statements are translated of comprehensive into Philippine income Peso at arethe translatedrate of exchange at exchange prevailing rates atprevailing the reporting at the date dates and of their the transactions. statements of The comprehensive exchange differences income arisingare translated on translation at exchange for consolidation rates prevailing are atrecognized the dates ofin OCI.the transactions. The exchange differences arising on translation for consolidation are recognized in OCI.

*SGVFSM006036* *SGVFSM006036*

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26. Income Tax 26. Income Tax a. The Company’s deferred tax components as at December 31 are as follows: a. The Company’s deferred tax components as at December 31 are as follows: 2020 2019 2020(In Millions) 2019 (In Millions) Provisions P=723 P=266 ProvisionsAccrued retirement cost and other accrued expenses P=723379 P=266337 AccruedLease payable retirement cost and other accrued expenses 379– 337– LeaseMCIT payable – 18– MCITExcess of fair values over book values resulting from – 18 Excessbusiness of fair combination values over book values resulting from (2,597) (4,889) Timingbusiness difference combination in depreciation method (2,597)(2,738) (4,889)(2,412) TimingEquity transaction difference in(see depreciation Note 32) method (2,738)(6,848) (2,412)(6,848) EquityDebt issue transaction cost (see Note 32) (6,848)(160) (6,848)(159) DebtUnamortized issue cost past service cost (160)(27) (159)(41) Unamortized foreignpast service exchange cost losses capitalized (27) (41) Unamortizedas service foreign concession exchange assets losses capitalized (16) (17) Improvementas service of concession facilities assets (16)(4) (17)(4) ImprovementOthers of facilities 328(4) 506(4) OthersNet deferred tax liabilities (P=10,960)328 (P=13,243)506 Net deferred tax liabilities (P=10,960) (P=13,243) Reflected in the consolidated statements of financial position: Reflected in the consolidated statements of financial position: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-presented(In Millions)*Re-presented Deferred tax assets P=201 P=927(In Millions) P=1,270 Deferred tax assetsliabilities (11,161)P=201 (14,170)P=927 P=(9,930)1,270 Deferred tax liabilities (P=10,960)(11,161) (P=(14,170)13,243) (P=(9,930)8,660) (P=10,960) (P=13,243) (P=8,660) Net movement recognized in: Net movementProfit or loss recognized in: ProfitFrom or loss Continuing Operations P=454 P=1,689 (P=993) From OperationsContinuing ofOperations entities P=454 P=1,689 (P=993) Fromunder OperationsPFRS 5 of entities under(see PFRSNote 353) 402 (5,910) 383 Equity (see(OCI Note and 3Equity3) reserve) 40270 (5,910149) 383(83) EquityDeferred (OCI taxes and acquired Equity inreserve) business 70 149 (83) Deferredcombinations taxes acquired in business – (453) (2,176) Deferredcombinations taxes derecognized – (453) (2,176) Deferred(see Notetaxes 32)derecognized 1,357 (58) – (see Note 32) P=2,2831,357 (P=4,583)(58) (P=2,869)– P=2,283 (P=4,583) (P=2,869)

*SGVFSM006036* *SGVFSM006036*

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The Company has the following temporary differences for which no deferred tax assets have been recognizedThe Company since has management the following believes temporary that differencesit is not probable for which that nothese deferred will be tax realized assets inhave the beennear recognizedfuture. since management believes that it is not probable that these will be realized in the near future. 2020 2019 2020 (In Millions) 2019 NOLCO P=17,844 (In Millions)P=20,597 ProvisionsNOLCO and other accruals P=17,84437 P=20,597160 UnrealizedProvisions andforeign other exchange accruals gains 37− 143160 UnrealizedMCIT foreign exchange gains 14− 14324 MCIT P=17,89514 P=20,92424 P=17,895 P=20,924 b. As at December 31, 2020 and 2019, NOLCO of the Parent Company and various subsidiaries can b. beAs carriedat December forward 31, and 2020 claimed and 2019, as deduction NOLCO from of the regular Parent taxable Company income and variousas follows: subsidiaries can be carried forward and claimed as deduction from regular taxable income as follows: Acquisition/ Year Incurred Amount (Deconsolidation)Acquisition/ Addition Expired Application Balance Expiry Year Year Incurred Amount (Deconsolidation) Addition Expired (InApplication Millions) Balance Expiry Year 2020 P=– (P=451) P=8,424 P=– (In Millions)P=– P=7,973 2025 20202019 10,999P=– (P=(491)451) P=8,424– P=– P=– P=10,7,973508 20252022 20192018 10,9996,137 (123)(491) – – – 10,6,014508 20222021 20182017 3,9776,137 (123)– – (3,977)– – 6,014– 20202021 2017 P=21,1133,977 (P=1,065)– P=8,424– (P=3,977)(3,977) P= – P=24,495– 2020 P=21,113 (P=1,065) P=8,424 (P=3,977) P= – P=24,495 c. The following carryforward benefits of MCIT can be claimed as tax credits against future income c. Thetaxes following payable: carryforward benefits of MCIT can be claimed as tax credits against future income taxes payable: Acquisition (DeconsolidatAcquisition Year Incurred Amount (Deconsolidation) Addition Expired Application Balance Expiry Year Year Incurred Amount ion) Addition Expired (InApplication Millions) Balance Expiry Year 2020 P= – (P=5) P=10 P= – (In Millions)P= – P= 5 2023 20202019 P=13 – (P=5)(9) P=10– P=– P=– P=4 5 20222023 20192018 135 (9)– – – – 45 20222021 20182017 165 – – (16)– – 5– 20212020 2017 P=1634 (P=14)– P=10– (P=(16)16) P=– P=14– 2020 P=34 (P=14) P=10 (P=16) P=– P=14 d. The current provision for income tax from continuing operations for years ended December 31 d. consistsThe current of the provision following: for income tax from continuing operations for years ended December 31 consists of the following: 2019 2018 2020 *Re-presented2019 *Re-presented2018 2020 *Re-(Inpresented Millions) *Re-presented RCIT P=4,026 (In P=Millions)5,039 P=4,220 RCITMCIT P=4,0269 P=5,0394 P=4,2201 MCITFinal tax 1479 2304 1611 Final tax P=4,182147 P=5,273230 P=4,382161 * Comparative years re-presented as a result of a subsidiaryP=4,182 qualifying as a group P=held5,273 for deemed disposalP= 4,382under *PFRSComparative 5 (see Note years 33 forre-presented details). as a result of a subsidiary qualifying as a group held for deemed disposal under PFRS 5 (see Note 33 for details).

*SGVFSM006036* *SGVFSM006036*

190 - 82 - - 82 - e. The reconciliation of provision for income tax computed at the statutory income tax rate to e. Theprovision reconciliation for income of provisiontax as shown for inincome the consolidated tax computed statements at the statutory of comprehensive income tax incomerate to is provisionsummarized for as income follows: tax as shown in the consolidated statements of comprehensive income is summarized as follows: 2020 2019 2018 2020 (In Millions)2019 2018 Continuing operations P=10,545 (In Millions)(P=547) P=22,247 ContinuingOperations ofoperations entities under PFRS 5 P=10,5454,418 39(P=,597647) P=22,2476,938 OIncomeperations beforeof entities income under tax from PFRS 5 4,418 39,976 6,938 Incomecontinuing before income operations tax from P=14,963 P=39,429 P=29,185 continuing operations P=14,963 P=39,429 P=29,185 Income tax at statutory tax rate of Income30.0% tax at statutory tax rate of P=4,489 P=11,829 P=8,755 Net income30.0% under ITH P=4,489(126) P=11,829(241) P=8,755(165) NetShare income in net underearnings ITH of equity (126) (241) (165) Sharemethod in net earningsinvestees of equity (2,480) (3,420) (3,322) Changesmethod in unrecognized investees deferred (2,480) (3,420) (3,322) Changestax assets in unrecognized and others deferred 978 2,309 1,107 Effecttax of assets optional and standardothers deduction (262)978 (1,090)2,309 (1,070)1,107 EffectVarious of income optional subjected standard to deduction lower (262) (1,090) (1,070) Variousfinal income tax rates subjected– net to lower (290) (354) (250) Finalfinal tax ontax interest rates – incomenet (290)147 (354)236 (250)167 FinalNondeductible tax on interest (nontaxable) income expenses 147 236 167 Nondeductible(income) – (nontaxable)net expenses 2,251 2,336 1,780 MCIT(income) – net 2,2519 2,3365 1,7803 MCITOthers 9- 51 3 Others P=4,716- P=11,6111 P=7,0083 P=4,716 P=11,611 P=7,008 From continuing operations P=3,728 P=3,584 P=5,375 From continuingoperations ofoperations entities under P=3,728 P=3,584 P=5,375 FromPFRS operations 5 of entities under 988 8,027 1,633 PFRS 5 P=4,716988 P=11,6118,027 P=1,6337,008 P=4,716 P=11,611 P=7,008 Optional Standard Deduction (OSD) OptionalOn December Standard 18, 2008,Deduction the BIR (OSD) issued Revenue Regulation (RR) No. 16-2008, which implemented Onthe Decemberprovisions 18,of RA 2008, 9504 the on BIR OSD, issued which Revenue allowed Regulation both individual (RR) No. and 16-2008, corporate which tax payers implemented to use theOSD provisions in computing of RA their 9504 taxable on OSD, income. which For allowed corporations, both individual they may and elect corporate a standard tax payersdeduction to use in an OSDamount in equivalentcomputing totheir 40% taxable of gross income. income, For as corporations, provided by law,they inmay lieu elect of the a standard itemized deduction allowed in an amountdeductions. equivalent to 40% of gross income, as provided by law, in lieu of the itemized allowed deductions. NLEX Corp., CIC and Maynilad opted to avail of the OSD for the taxable years 2020, 2019 and NLEX2018. Corp., CIC and Maynilad opted to avail of the OSD for the taxable years 2020, 2019 and 2018. Income Tax Holiday IncomeIn 2016, Tax LRMC Holiday was registered with the BOI for the modernization of the Existing System and the constructionIn 2016, LRMC of the was Cavite registered Extension. with the Under BOI thefor theBOI modernization registration agreement, of the Existing LRMC System is entitled and theto ITHconstruction for a period of the of Cavitethree (3) Extension. years from Under the indicated the BOI completionregistration ofagreement, the rehabilitation LRMC is of entitled the existing to systemITH for beginning a period of January three (3) 2018 years and from start the of indicatedcommercial completion operations of of the the rehabilitation Cavite Extension of the beginning existing Aprilsystem 2021. beginning ITH incentiveJanuary 2018 enjoyed and bystart LRMC of commercial amounted operations to nil in 2020 of the and Cavite =91P million Extension in 2019. beginning April 2021. ITH incentive enjoyed by LRMC amounted to nil in 2020 and =91P million in 2019.

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In August 2017, the CALAX project was registered with the BOI as a new project on a nonpioneer Instatus August under 2017, the Omnibusthe CALAX Investment project wasCode registered of 1987. withUnder the this BOI registration, as a new project MPCALA on a willnonpioneer enjoy statuscertain under tax and the nontax Omnibus incentives Investment including Code aof four-year 1987. Under ITH thison theregistration, income arising MPCALA the CALAX will enjoy project certainstarting tax from and July nontax 2020 incentives or actual startincluding of commercial a four-year operations, ITH on the whichever income arising is earlier the andCALAX subject project to startingcertain conditions, from July 2020 which or include actual startamong of commercialothers, (i) MPCALA operations, shall whichever submit proof is earlier of upgraded and subject service to certainquality conditions,as result of whichthe implementation include among of others,the modernization (i) MPCALA project; shall submit (ii) the proof ITH’s of entitlement upgraded serviceshall qualitybe based as on result the project’sof the implementation ability to contribute of the modernizationto the economy’s project; development (ii) the ITH’s based entitlement on certain shall beparameter based on indicated the project’s in Certificate ability to of contribute Registration; to the and economy’s (iii) MPCALA development shall endeavor based on to certain undertake parametermeaningful indicated and sustainable in Certificate corporate of Registration; social responsibility and (iii) activities.MPCALA shall endeavor to undertake meaningful and sustainable corporate social responsibility activities. On October 1,2020, BOI approved adjustment of the ITH incentive availment period to OnFebruary October 11, 1,2020, 2020 to BOI February approved 10, 2024,adjustment which of is the4 months ITH incentive and 21 daysavailment earlier period than July to 2020. ITH Februaryincentive 11,enjoyed 2020 by to MPCALAFebruary 10, amounted 2024, which P=0.3 ismillion 4 months in 2020. and 21 days earlier than July 2020. ITH incentive enjoyed by MPCALA amounted P=0.3 million in 2020. In January 2021, BOI granted a Certificate for ITH Entitlement to MPCALA for the year 2020. In January 2021, BOI granted a Certificate for ITH Entitlement to MPCALA for the year 2020.

27. Earnings Per Share 27. Earnings Per Share The calculation of earnings per share for the years ended December 31 follows: The calculation of earnings per share for the years ended December 31 follows: 2020 2019 2018 (In Millions,2020 Except for Per201 Share9 Amounts) 2018 Net income (loss) attributable to owners of the (In Millions, Except for Per Share Amounts) NetParent income Company (loss) attributable to owners of the ParentContinuing Company operations P=3,191 (P=4,782) P=11,719 Operations of entities under PFRS 5 28,638 2,411 Continuing operations P=3,1911,557 (P=4,782) P=11,719 Operations of entities under PFRS 5 (a) P=4,7481,557 P=28,63823,856 P=14,1302,411 Effect of cumulative dividends on preferred (a) P=4,748 P=23,856 P=14,130 Effectshareholders of cumulative of the dividends Parent Company on preferred (see Note 20) (b) (9) (9) (9) Netshareholders income attributable of the Parent to common Company owners (see Note 20) (b) (9) (9) (9) Netof income the Parent attributable Company to common owners (c) P=4,739 P=23,847 P=14,121 of the Parent Company (c) P=4,739 P=23,847 P=14,121 2020 2019 2018 (In Millions,2020 Except for Per201 Share9 Amounts) 2018 Outstanding common shares at the beginning (In Millions, Except for Per Share Amounts) Outstandingof the year common shares at the beginning P=31,569 P=31,515 P=31,511 Effect of issuance of common shares during the year – 24 3 of the year P=31,569 P=31,515 P=31,511 Effect of issuanceshare buy of-back common (see Note shares 20) during the year (317)– 24(1) –3 EffectWeighted of share average buy number-back (see of commonNote 20) shares (317) (1) – Weightedfor basic averageearnings number per share of common shares (d) 31,252 31,538 31,514 Effects of potential dilution from ESOP and share for basic earnings per share (d) 31,252 31,538 31,514 Effectsaward of (see potential Note 28):dilution from ESOP and share – 2 34 Weightedaward (see average Note number 28): of common shares adjusted – 2 34 Weightedfor the effectsaverage of numberpotential of dilutioncommon shares adjusted (e) 31,252 31,540 31,548 for the effects of potential dilution (e) 31,252 31,540 31,548 Basic earnings per share (c/d) P=0.1516 P=0.7561 P=0.4481 Basic earnings per share (c/d) P=0.1516 P=0.7561 P=0.4481 Diluted earnings per share (c/e) P=0.1516 P=0.7561 P=0.4476 Diluted earnings per share (c/e) P=0.1516 P=0.7561 P=0.4476 Weighted average number of shares issued and outstanding is derived by multiplying the number of Weightedshares outstanding average numberat the beginning of shares of issued the year, and outstandingadjusted by theis derived number by of multiplying shares issued the during number the of sharesyear, with outstanding a time–weighting at the beginning factor. ofThe the time–weighting year, adjusted byfactor the numberis the number of shares of days issued that during the the year,common with shares a time–weighting are outstanding factor. as a Theproportion time–weighting to the total factor number is the of numberdays in ofthe days year. that the common shares are outstanding as a proportion to the total number of days in the year.

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To calculate the earnings per share for operations of entities under PFRS 5 (Note 32), the weighted averageTo calculate number the earningsof ordinary per shares share for bothoperations the basic of entities and diluted under earnings PFRS 5 per (Note share 32), is theas per weighted the table averageabove. number of ordinary shares for both the basic and diluted earnings per share is as per the table above.

28. Share-based Payment 28. Share-based Payment ESOP OnESOP June 24, 2007, the shareholders of MPIC approved a share option scheme (the Plan) under which MPIC’sOn June directors24, 2007, may, the shareholders at their discretion, of MPIC invite approved executives a share of MPICoption upon scheme the (theregularization Plan) under of which MPIC’semployment directors of eligible may, atexecutives, their discretion, to take invite up share executives option ofof MPICMPIC toupon obtain the anregularization ownership interest of in MPICemployment and for of the eligible purpose executives, of long-term to take employment up share option motivation. of MPIC The to scheme obtain anbecame ownership effective interest on in JuneMPIC 14, and 2007 for theand purpose is valid offor long-term ten years. employment An amended motivation. plan was approved The scheme by the became stockholders effective on on JuneFebruary 14, 2007 20, 2009. and is valid for ten 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 toAs be amended, granted theand overallyet to be limit exercised on the numberunder the of Plan shares must that not may exceed be issued 5.0% upon of the exercise shares inof issueall options from timeto be togranted time. 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 Company’s Compensation Committee,The exercise but price shall in relationnot be lower to each than option the highest shall be of: determined (i) the closing by the price Company’s of the shares Compensation for one or moreCommittee, board lotsbut shallof such not shares be lower on thethan PSE the onhighest the option of: (i) offer the closing date; (ii) price the ofaverage the shares closing for priceone or of morethe shares board for lots one of or such more shares board on lots the ofPSE such on shares the option on the offer PSE date; for the(ii) fivethe average business closing days on price which of dealingsthe shares in for the one shares or more are made board immediately lots of such precedingshares on the PSEoption for offer the fivedate; business and (iii) days the paron whichvalue of thedealings shares. in the shares are made immediately preceding the option offer date; and (iii) the par value of the shares. On October 14, 2013, MPIC made an ESOP grant (the Fourth Grant) consisting of 112.0 million commonOn October shares, 14, 2013, to its MPICdirectors made and an senior ESOP management grant (the Fourth officers, Grant) as well consisting as, members of 112.0 of the million senior commonmanagement shares, of certain to its directors MPIC subsidiaries. and senior management The grant was officers, approved as well by the as, Philippinemembers ofSEC the onsenior Marchmanagement 4, 2014. of certain MPIC subsidiaries. The grant was approved by the Philippine SEC on March 4, 2014. The fair value of the options granted is estimated at the date of grant using Black-Scholes-Merton formula,The fair valuetaking of into the accountoptions thegranted terms is and estimated conditions at the at date the timeof grant the optionsusing Black-Scholes-Merton were granted. The followingformula, taking tables into list theaccount inputs the to terms the model and conditions used for the at ESOP:the time the options were granted. The following tables list the inputs to the model used for the ESOP: Fourth Grant FourthTranche Grant B Tranche50.0% B vested50.0% on Octobervested 14, on October2015 14, Spot Price P=4.592015 SpotExercise Price price P=4.594.60 ExerciseRisk-free price rate P=2.40%4.60 RiskExpected-free ratevolatility* 33.07%2.40% ExpectedTerm to vesting volatility* in days 33.07%730 TermCall price to vesting in days P=0.89730 * The expectedCall price volatility reflects the assumption that the historical volatility over a period similarP=0.89 to the life of the options is * Theindicative expected of future volatility trends, reflects which the may assumption also not necessarilythat the historical be the actualvolatility outcome. over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

*SGVFSM006036* *SGVFSM006036*

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The following table illustrates the number of, exercise prices of, and movements in share options in 2019The following and 2018 table for the illustrates Tranche the B ofnumber the Fourth of, exercise Grant: prices of, and movements in share options in 2019 and 2018 for the Tranche B of the Fourth Grant: Tranche B NumberTranche B Exercise ofNumber shares ExercisePrice Outstanding at January 1, 2018 56,000,000of shares P=4.60Price OutstandingExercised during at January the year 1, (see2018 Note 11) 56,000,0001,175,000 P=4.604.60 ExercisedOutstanding during at December the year (see31, 2018 Note 11) 54,825,0001,175,000 P=4.60 OutstandingExercised during at December the year (see31, 2018 Note 11) 54,825,00027,790,000 P=4.60 ExercisedExpired during during the the year year (see Note 11) 27,790,00027,035,000 4.60 OutstandingExpired during at Decemberthe year 31, 2019 27,035,000− 4.60P= − Outstanding at December 31, 2019 − P= − Exercisable at: ExercisableDecember at: 31, 2018 54,825,000 P=4.60 December 31, 20182019 54,825,000− P=4.60P= − December 31, 2019 − P= − On October 9, 2018, the deadline for the exercise of stock options from the Fourth Grant, originally Onon OctoberOctober 14,9, 2018, 2018, the was deadline extended for by the the exercise Company’s of stock Compensation options from Committee the Fourth to Grant, originally onOctober October 14, 14, 2019. 2018, In was2018, extended cost from by the the extension Company’s of Compensationexercise period Committee for the ESOP to amounted to OctoberP=23.6 million. 14, 2019. In 2018, cost from the extension of exercise period for the ESOP amounted to P=23.6 million. For the year ended December 31, 2019, the weighted average share price of MPIC’s common share is P=4.66For the per year share. ended The December carrying 31,value 2019, of ESOP, the weighted recognized average under share “Equity price reserves” of MPIC’s in commonthe equity share is sectionP=4.66 per of share.the statements The carrying of financial value of position, ESOP, recognizedamounted to under nil as “Equity at December reserves” 31, in2019 the uponequity sectionexpiration of theof thestatements share grant of financial (see Note position, 20). amounted to nil as at December 31, 2019 upon expiration of the share grant (see Note 20). RSUP RSUP LTIP Cycle 2016 to 2018. On July 14, 2016, the Compensation Committee of MPIC approved the LTIPRSUP Cycle as part 2016 of MPIC’s to 2018. LTIP. On July The 14, RSUP, 2016, which the Compensation has a validity Committee period of ten of years,MPIC replacedapproved the the Company’sRSUP as part ESOP, of MPIC’s which LTIP. expired The in 2019.RSUP, which has a validity period of ten years, replaced the Company’s ESOP, which expired in 2019. The RSUP is designed, among others, to reward the Directors and certain key officers of MPIC who Thecontribute RSUP tois itsdesigned, growth amongto stay others,with MPIC to reward for the the long Directors term. Underand certain the RSUP, key officers which ofshall MPIC have who a cyclecontribute of three to its (3) growth years (startingto stay with 2016 MPIC for the for LTIP the long cycle term. covering Under 2016 the toRSUP, 2018), which MPIC, shall at itshave cost a willcycle reacquire of three (3)MPIC years common (starting shares 2016 to for be the held LTIP as treasury cycle covering shares and2016 reserved to 2018), to MPIC,be transferred at its cost to the Directorswill reacquire and keyMPIC officers common determined shares to by be the held Committee as treasury to sharesbe eligible and reservedto participate to be undertransferred the RSUP. to the DirectorsVested shares and keywill officersbe transferred determined in the by name the Committeeof the eligible to beparticipants eligible to on participate full vesting under date, the at RSUP. no costVested as providedshares will under be transferred the RSUP. in the name of the eligible participants on full vesting date, at no cost as provided under the RSUP. The RSUP also limits the aggregate number of shares that may be subject to award to no more than Thethree RSUP percent also (3%) limits of thethe outstandingaggregate number common of shares ofthat MPIC. may be A subjectcumulative to award total ofto no26.7 more million than MPICthree percent common (3%) shares of the had outstanding been acquired common to cover shares the oftotal MPIC. shares A expectedcumulative to betotal granted of 26.7 to million the directorsMPIC common and key shares officers had of been the Company.acquired to cover the total shares expected to be granted to the directors and key officers of the Company. Fair value of the Share Award was determined using the market closing price of P=7.15 per share on dateFair valueof grant. of the One Share third Award (or 33.33%) was determined of the share using award the vestsmarket every closing 31st priceof December of P=7.15 beginning per share 2016on untildate offully grant. vested One by third December (or 33.33%) 31, 2018. of the share award vests every 31st of December beginning 2016 until fully vested by December 31, 2018. The shares in relation to the 2016-2018 RSUP were issued to the grantees in June 2019 (see Note 20). The shares in relation to the 2016-2018 RSUP were issued to the grantees in June 2019 (see Note 20).

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Total Share Award expense under this RSUP for the year ended December 31, 2018 amounted to P=66.7Total Sharemillion Award and included expense inunder “Personnel this RSUP costs for and the employee year ended benefits” December under 31, “General 2018 amounted and to P=66.7administrative million and expenses” included account in “Personnel in the consolidated costs and employee statements benefits” of comprehensive under “General income. and administrative expenses” account in the consolidated statements of comprehensive income. LTIP Cycle 2019 to 2021. On January 31, 2020, the Compensation Committee approved MPIC’s LTIP Cyclecovering 2019 cycle to 2021 2019. toOn 2021. January MPIC’s 31, 2020, LTIP the comprises Compensation of cash Committee incentives approvedand share MPIC’saward. The LTIPCompany covering shall cyclesecure 2019 exemption to 2021. ruling MPIC’s from LTIP the SEC comprises on the ofshare cash award, incentives which and is necessaryshare award. for theThe Company toshall reacquire secure exemptionMPIC common ruling shares from inthe the SEC market. on the share award, which is necessary for the Company to reacquire MPIC common shares in the market. A total of 31.8 million shares were granted in relation to the RSUP. Fair value of the Share Award Awas total determined of 31.8 million using the shares market were closing granted price in relation of P=3.21 to per the shareRSUP. on Fairdate valueof grant. of the One Share third Award (or 33.33%)was determined of the share using award the market vests closingevery 31st price of ofDecember P=3.21 per beginning share on 2019date of until grant. fully One vested third by (or December33.33%) of 31, the 2021. share award vests every 31st of December beginning 2019 until fully vested by December 31, 2021. Total Share Award expense under this RSUP for the years ended December 31, 2020 and 2019 Totalamounted Share to Award =34P million expense and under nil, repectively, this RSUP forand the included years endedin “Personnel December costs 31, and 2020 employee and 2019 benefits”amounted under to =34P “General million and nil,administrative repectively, expenses” and included account in “Personnel in the consolidated costs and employeestatements of comprehensivebenefits” under income.“General and administrative expenses” account in the consolidated statements of comprehensive income.

29. Significant Contracts, Agreements and Commitments 29. Significant Contracts, Agreements and Commitments Toll Operations Toll Operations Concession Arrangements Concession Arrangements ƒ NLEX Corp. –STOA for the North Luzon Expressway (NLEX). In August 1995, First Philippine ƒ InfrastructureNLEX Corp. –STOA Development for the NorthCorporation Luzon (currentlyExpressway MPT (NLEX). North), In the August parent 1995, company First ofPhilippine NLEX Corp,Infrastructure entered Developmentinto a joint venture Corporation agreement (currently with Philippine MPT North), National the parent Construction company Corporation of NLEX Corp,(PNCC), entered in which into PNCCa joint ventureassigned agreement its rights, withinterests Philippine and privileges National under Construction its franchise Corporation to construct,(PNCC), in operate which andPNCC maintain assigned toll its facilities rights, interestsin the NLEX and privilegesand its extensions, under its stretches,franchise linkagesto andconstruct, diversions operate in favor and maintain of NLEX toll Corp., facilities including in the the NLEX design, and funding, its extensions, construction, stretches, linkages andrehabilitation, diversions refurbishingin favor of NLEX and modernization Corp., including and theselection design, and funding, installation construction, of an appropriate toll collectionrehabilitation, system refurbishing therein during and modernization the concession and period selection subject and to installation prior approval of an by appropriate the President toll ofcollection the Philippines. system therein In April during 1998, the the concession Philippine period government, subject actingto prior by approval and through by the the President Toll Regulatoryof the Philippines. Board (TRB) In April as 1998,the grantor, the Philippine PNCC as government, the franchisee acting and byNLEX and throughCorp. as the the Toll Regulatoryconcessionaire, Board executed (TRB) aas STOA the grantor, whereby PNCC the Philippineas the franchisee government and NLEX recognized Corp. andas the accepted theconcessionaire, assignment byexecuted PNCC aof STOA its usufructuary whereby the rights, Philippine interests government and privileges recognized under itsand franchise accepted in favorthe assignment of NLEX byCorp. PNCC as approved of its usufructuary by the President rights, ofinterests the Philippines and privileges and granted under itsNLEX franchise Corp. in favorconcession of NLEX rights, Corp. obligations as approved and privilegesby the President including of the the Philippines authority to and finance, granted design, NLEX construct, Corp. operateconcession and rights, maintain obligations the NLEX and project privileges roads including as toll roads the authoritycommencing to finance, upon the design, date the construct, STOA comesoperate into and effect maintain until the December NLEX project 31, 2030 roads or 30as tollyears roads after commencing the issuance uponof the the Toll date Operation the STOA comesPermit intofor the effect last until completed December phase, 31, whichever 2030 or 30 is years earlier. after In the October issuance 2008, of the Tollconcession Operation agreementPermit for thewas last extended completed for another phase, whicheverseven years is to earlier. 2037. In October 2008, the concession agreement was extended for another seven years to 2037. The concession agreement establishes a toll rate formula and adjustment procedure for setting the appropriateThe concession toll rate.agreement Pursuant establishes to the STOA, a toll rate NLEX formula Corp. and is requiredadjustment to pay procedure franchise for fees setting to the appropriatePNCC (see Notestoll rate. 21 andPursuant 30) and to theto pay STOA, for the NLEX Government’s Corp. is required project tooverhead pay franchise expenses fees based to onPNCC certain (see percentages Notes 21 and of 30)construction and to pay costs for theand Government’s maintenance works project on overhead the project expenses roads. basedUpon expiryon certain of the percentages concession of period, construction NLEX costs Corp. and shall maintenance hand over worksthe project on the roads project to the roads. Philippine Upon expiryGovernment of the withoutconcession cost, period, free from NLEX any Corp. and all shall liens hand and over encumbrances the project androads fully to theoperational Philippine and inGovernment good working without condition, cost, free including from any any and and all all liens existing and encumbrancesland required, works,and fully toll operational road facilities and in good working condition, including any and all existing land required, works, toll road facilities *SGVFSM006036* *SGVFSM006036*

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and equipment found therein directly related to and in connection with the operation of the toll roadand equipment facilities. found therein directly related to and in connection with the operation of the toll road facilities. The Manila-North Expressway Project (MNEP) consists of three (3) phases as follows: The Manila-North Expressway Project (MNEP) consists of three (3) phases as follows: Status/ Phase Description Status/Date of Operation Phase I Expansion and Descriptioni. 84 kilometers (km) of the existing NLEX FebruaryDate of Operation 5, 2005 Phase(Segments I 1, 2, 3 and 7) Expansionrehabilitation and ii.i. 848.8-km kilometers stretch (km) of a Greenfieldof the existing NLEX February 5, 2005 (Segments 1, 2, 3 and 7) rehabilitation ii. 8.8-kmexpressway stretch of a Greenfield Phase II Construction i. 17-kmexpressway circumferential road C-5 which Segment 8.1 – Phase(Segments II 8.1, 8.2, 9 and 10) Construction i. 17-kmconnects circumferential the current C-5 road expressway C-5 which to SegmentJune 5, 2010 8.1 – (Segments 8.1, 8.2, 9 and 10) connectsthe NLEX the current C-5 expressway to June 5, 2010 ii. the5.85-km NLEX road from McArthur to Letre Segments 9 – ii. 5.85-km road from McArthur to Letre SegmentsMarch 9, 2015 9 – MarchSegment 9, 102015 – SegmentOfficially 10 opened – on OfficiallyFebruary 28,opened 2019 on FebruarySegment 8.228, –2019 Pre Segmentconstruction 8.2 – Pre Phase III Construction i. 57-km Subic arm of the NLEX to Subic constructionConstruction not yet Phase(Segments III 4, 5 and 6) Construction i. Expressway57-km Subic arm of the NLEX to Subic Constructionstarted not yet (Segments 4, 5 and 6) Expressway started In consideration of the assignment by PNCC of its usufructuary rights, interests and privileges underIn consideration its franchise, of thePNCC assignment is entitled by to PNCC receive of paymentits usufructuary equivalent rights, to 6% interests and 2% and of privileges the toll revenuesunder its franchise,from the NLEX PNCC and is entitled Segment to 7,receive respectively. payment Any equivalent unpaid tobalance 6% and carried 2% of forward the toll will revenuesaccrue interest from theat the NLEX rate ofand the Segment latest Philippine 7, respectively. 91-day AnyTreasury unpaid bill balance rate plus carried 1% per forward annum. will Thisaccrue entitlement, interest at theas affirmed rate of the in latestthe Amended Philippine and 91-day Restated Treasury Shareholders’ bill rate Agreementplus 1% per (ARSA) annum. datedThis entitlement, September 30,as affirmed 2004, shall in thebe subordinatedAmended and to Restated operating Shareholders’ expenses and Agreement the requirements (ARSA) of datedthe financing September agreements 30, 2004, and shall shall be besubordinated paid out subject to operating to availability expenses of andfunds. the requirements of the financing agreements and shall be paid out subject to availability of funds. The PNCC franchise expired in May 2007. On April 12, 2011, the SC issued a resolution directingThe PNCC NLEX franchise Corp. expired to remit in PNCC’sMay 2007. share On in April the net 12, income 2011, thefrom SC toll issued revenues a resolution to the National Treasury,directing NLEXand the Corp. TRB, to with remit the PNCC’s assistance share of thein the Commission net income on from Audit toll (COA), revenues was to directedthe National to prepareTreasury, and and finalize the TRB, the implementingwith the assistance rules ofand the guidelines Commission relative on Audit to the (COA), determination was directed of the tonet prepareincome remittableand finalize by the PNCC implementing to the National rules andTreasury. guidelines relative to the determination of the net income remittable by PNCC to the National Treasury. In accordance with the TRB directive, 90% of the PNCC fee and dividends payable are to be remittedIn accordance to the with TRB, the while TRB the directive, balance 90%of 10% of the to PNCC.PNCC fee and dividends payable are to be remitted to the TRB, while the balance of 10% to PNCC. ƒ NLEX Corp. – Toll Operation Agreement (TOA) for the Subic-Clark-Tarlac Expressway ƒ (SCTEX).NLEX Corp.On – FebruaryToll Operation 9, 2015, Agreement NLEX Corp. (TOA) received for the the Subic-Clark-Tarlac Notice of Award Expresswayfrom the Bases (SCTEX).ConversionOn and February Development 9, 2015, Authority NLEX Corp.(BCDA) received for the the management, Notice of Award operation from and the Bases maintenanceConversion and of theDevelopment 94-kilometer Authority SCTEX (BCDA) subject to for compliance the management, with specific operation conditions. and On Februarymaintenance 26, of2015, the 94-kilometerNLEX Corp. andSCTEX BCDA subject entered to compliance into a Business with Agreementspecific conditions. involving On the assignmentFebruary 26, of 2015, BCDA’s NLEX rights Corp. and and obligations BCDA entered relating into to thea Business management, Agreement operation involving and the assignmentmaintenance of of BCDA’s SCTEX rightsas provided and obligations in the SCTEX relating concession. to the management, The assignment operation includes and the exclusivemaintenance right of toSCTEX use the as SCTEX provided toll in road the SCTEXfacilities concession. and the right The to collect assignment tolls untilincludes October the 30, 2043.exclusive On rightMay to22, use 2015, the SCTEXthe TOA toll was road executed facilities by and amongthe right the to Philippinecollect tolls Government until October and 30, 2043.BCDA On and May NLEX 22, Corp.2015, theAt theTOA end was of theexecuted contract by term,and among the SCTEX, the Philippine as well asGovernment the as-built and plans,BCDA specification and NLEX Corp. and operation/repair/ At the end of the maintenance contract term, manuals the SCTEX, relating as to well the sameas the shall as-built be turnedplans, specificationover to the BCDA and operation/repair/ or its successor-in-interest. maintenance manuals relating to the same shall be turned over to the BCDA or its successor-in-interest. At a consideration of =3.5P billion upfront cash payment, the operation and management of the AtSCTEX a consideration was officially of =3.5P turned billion over upfront to NLEX cash Corp. payment, on October the operation 27, 2015. and NLEX management Corp. shall of the also paySCTEX BCDA was monthly officially concession turned over fees to amountingNLEX Corp. to 50%on October of the Audited27, 2015. Gross NLEX Toll Corp. Revenues shall alsoof thepay SCTEXBCDA monthlyfor the relevant concession month fees from amounting effective to date 50% to of October the Audited 30, 2043 Gross (see Toll Note Revenues 21). of the SCTEX for the relevant month from effective date to October 30, 2043 (see Note 21). *SGVFSM006036* *SGVFSM006036*

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ƒ NLEX Corp. – Concession Agreement for the NLEX-SLEX Connector Road Project (Connector ƒ Road).NLEX Corp. The Connector – Concession Road Agreement is a four (4)for lanethe NLEX-SLEX toll expressway Connector structure Road with Project a length (Connector of eightRoad). (8) The kilometers Connector all passingRoad is througha four (4) and lane above toll expresswaythe right of waystructure of the with Philippine a length National of Railwayseight (8) kilometers (PNR) starting all passing NLEX through Segment and 10 above in C3 theRoad right Caloocan of way Cityof the and Philippine seamlessly National connecting to SouthRailways Luzon (PNR) Expressway starting NLEX (SLEX) Segment through 10 Metro in C3 Manila Road CaloocanSkyway Stage City and3 Project. seamlessly On connecting to NovemberSouth Luzon 23, Expressway 2016, NLEX (SLEX) Corp. throughand the RepublicMetro Manila of the Philippines Stage (ROP) 3 Project. acting On through the DPWH,November signed 23, 2016, the Concession NLEX Corp. Agreement and the Republic for the design, of the financing,Philippines construction, (ROP) acting operation through theand maintenanceDPWH, signed of the ConcessionNLEX-SLEX Agreement Connector for Road. the design, The concession financing, period construction, shall commence operation on and the commencementmaintenance of thedate NLEX-SLEX and shall end Connector on its thirty-seventh Road. The (37th) concession anniversary, period unlessshall commence otherwise on the extendedcommencement or terminated date and in shall accordance end on withits thirty-seventh the Concession (37th) Agreement. anniversary, The unless construction otherwise of the Connectorextended or Project, terminated with in an accordance estimated projectwith the cost Concession of P=23.3 billion,Agreement. is expected The construction to be completed of the by 2022.Connector Project, with an estimated project cost of P=23.3 billion, is expected to be completed by 2022. Under the Concession Agreement, NLEX Corp. will pay the DPWH periodic payments as considerationUnder the Concession for the grant Agreement, of the Right NLEX of WayCorp. for will the pay project the DPWH (see Note periodic 17). payments as consideration for the grant of the Right of Way for the project (see Note 17). During the concession period, NLEX Corp. shall pay for the project overhead expenses to be incurredDuring the by concession the DPWH period, and the NLEX TRB in Corp. the process shall pay of fortheir the monitoring, project overhead inspecting, expenses evaluating to be and checkingincurred by the the progress DPWH and and quality the TRB of thein the activities process and of theirworks monitoring, undertaken inspecting, by NLEX Corp.evaluating NLEX and Corp’schecking liability the progress for the and payment quality of of the the project activities overhead and works expenses undertaken due to TRBby NLEX shall notCorp. exceed NLEX P=50Corp’s million liability and for the the liability payment for theof the payment project of overhead the project expenses overhead due expenses to TRB shalldue thenot DPWH exceed shallP=50 million not exceed and theP=200 liability million; for provided, the payment that ofthese the limitsproject may overhead be increased expenses in casedue theof inflation,DPWH or inshall case not of exceed additional P=200 work million; due toprovided, a concessionaire that these variation limits may that be will increased result inin ancase extension of inflation, of the or constructionin case of additional period or work concession due to a period, concessionaire upon mutual variation agreement that will of theresult parties in an in extension the concession of the agreement.construction period or concession period, upon mutual agreement of the parties in the concession agreement. ƒ CIC – Toll Operation Agreement (TOA) for the Manila - Cavite Expressway (CAVITEX). CIC is ƒ exclusivelyCIC – Toll Operation responsible Agreement for the design, (TOA) financing for the Manila and construction - Cavite Expressway of the CAVITEX, (CAVITEX). pursuant CIC to is a TOAexclusively dated Julyresponsible 26, 1996 for entered the design, into withfinancing the Philippine and construction Reclamation of the Authority CAVITEX, (PRA) pursuant and the to a Government,TOA dated July acting 26, 1996through entered the TRB. into with Responsibility the Philippine for theReclamation supervision Authority of the operation (PRA) and and the maintenanceGovernment, ofacting the toll through road, theinitially TRB. undertaken Responsibility by the for PRA, the supervision was also transferred of the operation to CIC and pursuantmaintenance to an of Operations the toll road, and initially Maintenance undertaken Agreement by the datedPRA, Novemberwas also transferred 14, 2006 andto CIC a voting trustpursuant agreement to an Operations dated November and Maintenance 16, 2006. TheAgreement concession dated for November CAVITEX 14, extends 2006 and to 2033 a voting for thetrust originally agreement built dated road November and to 2046 16, for2006. a subsequent The concession extension. for CAVITEX Upon expiry extends of the to concession 2033 for period,the originally CIC shall built hand road over and theto 2046 project for to a subsequentthe Philippine extension. Government. Upon expiry of the concession period, CIC shall hand over the project to the Philippine Government. The concession agreement establishes a toll rate formula and adjustment procedure for setting the appropriateThe concession toll rate.agreement establishes a toll rate formula and adjustment procedure for setting the appropriate toll rate. Pursuant to the TOA, PRA established PEA Tollways Corporation (PEATC), its wholly owned subsidiary,Pursuant to tothe undertake TOA, PRA the established O&M obligations PEA Tollways of the PRA Corporation under the (PEATC), TOA. PEATC its wholly shall ownedcollect thesubsidiary, toll fees to from undertake the toll the paying O&M traffic obligations and deposit of the such PRA collections under the toTOA. the O&MPEATC Account shall collect maintainedthe toll fees withfrom a the local toll bank. paying On traffic November and deposit 14, 2006, such CIC, collections PRA and to TRBthe O&M entered Account into an O&M Agreementmaintained towith clarify a local and bank. amend On certain November rights 14, and 2006, obligations CIC, PRA under and the TRB JVA entered and TOA into covering an O&M theAgreement CAVITEX. to clarify Included and amendin the salient certain provisions rights and ofobligations the O&M under Agreement the JVA is theand revenue TOA covering sharing provisionthe CAVITEX. between Included PRA and in theCIC. salient PRA provisions shall receive of the8.5% O&M of gross Agreement toll revenue, is the revenuewhile CIC sharing shall receiveprovision 91.5% between of the PRA gross and toll CIC. revenue PRA andshall will receive absorb 8.5% all O&Mof gross costs toll and revenue, expenses. while The CIC share shall ofreceive PRA 91.5%shall be of increased the gross by toll 0.5% revenue every and periodic will absorb toll rate all adjustmentO&M costs under and expenses. the TOA butThe not share to exceedof PRA 10.0% shall be of increased gross toll by revenue 0.5% everyat any periodic one time toll during rate adjustmentthe repayment under period the TOAof the but loan. not to Uponexceed repayment 10.0% of ingross full toll of therevenue loans atand any interest one time costs, during advances, the repayment capital investment period of theand loan. the return ofUpon equity, repayment CIC and in PRA full of shall the shareloans atand the interest ratio of costs, 40.0% advances, and 60.0%, capital respectively, investment as and originally the return of equity, CIC and PRA shall share at the ratio of 40.0% and 60.0%, respectively, as originally *SGVFSM006036* *SGVFSM006036*

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agreed upon under the JVA. The current share of PRA based on gross revenue is 9.0% while CIC’sagreed shareupon isunder 91.0% the which JVA. took The effectcurrent on share the last of PRA toll rate based adjustment on gross onrevenue January is 9.0%1, 2009. while CIC’s share is 91.0% which took effect on the last toll rate adjustment on January 1, 2009. Under the amended Joint Venture Agreement with PRA, each of the following expressways shall beUnder constructed the amended in segments: Joint Venture Agreement with PRA, each of the following expressways shall be constructed in segments: Status/ Phase Description Status/Date of Operation Phase I Design and improvement Descriptioni. 6.5 km R-1 Expressway which connects MayDate 1998of Operation Phase I Design and improvement i. 6.5the Airportkm R-1 RoadExpressway to Zapote which connects May 1998 ii. theExtension Airport of Road the 7to km Zapote R-1 Expressway May 2011 ii. Extensionwhich connects of the the 7 km existing R-1 Expressway R-1 May 2011 whichExpressway connects at Zapote the existing to Noveleta R-1 Expressway at Zapote to Noveleta Phase II: Design and construction Extension of the C-5 Link Expressway which Target completion is Phase Segments II: 2 & Design and construction Extensionconnects the of R-1the C-Expressway5 Link Expressway to the South which Targetin December completion 2022 is Segments3A-2 2 & connectsLuzon Expressway the R-1 Expressway (SLEX) to the South in December 2022 3A-2 Luzon Expressway (SLEX) Phase III Design and construction Segment 3B for C5 Southlink Project Ongoing ROW Phase Segment III 3-B Design and construction Segment 3B for C5 Southlink Project Ongoingacquisition ROW Segment 3-B acquisition C5 South Link 3A-1, portion of the CAVITEX Phase II, which is a 2.2-km flyover crossing SLEXC5 South traversing Link 3A-1, Taguig portion and Pasayof the City,CAVITEX commenced Phase II,tollway which operation is a 2.2-km in Julyflyover 2019. crossing SLEX traversing Taguig and Pasay City, commenced tollway operation in July 2019. ƒ MPCALA Holdings, Inc. (MPCALA) – Concession Agreement for the CALAX. On July 10, 2015, ƒ MPCALA Holdings, signed the Inc. Concession (MPCALA) Agreement – Concession for the Agreement CALAX Projectfor the CALAX.with the DPWH. On July 10,Under 2015, the ConcessionMPCALA signed Agreement, the Concession MPCALA Agreement is granted forthe theconcession CALAX to Project design, with finance, the DPWH. construct, Under operate the andConcession maintain Agreement, the CALAX, MPCALA including is the granted right theto collect concession toll fees, to design, over a finance,35-year construct,concession operate period.and maintain The CALAX the CALAX, is a closed-system including the tolledright to expressway collect toll connecting fees, over athe 35-year CAVITEX concession and the SLEX.period. The CALAX Projectis a closed-system was awarded tolled to MPCALA expressway following connecting a competitive the CAVITEX public and bidding the processSLEX. whereThe CALAX MPCALA Project was was declared awarded as the to MPCALAhighest complying following bidder a competitive with its offer public to paybidding the governmentprocess where concession MPCALA fees was amounting declared as to theP=27.3 highest billion complying payable overbidder nine with (9) its years offer from to pay signing the ofgovernment the Concession concession Agreement fees amounting (see Note to17). P=27.3 The billion project payable is expected over tonine be (9)completed years from by 2022.signing of the Concession Agreement (see Note 17). The project is expected to be completed by 2022. On October 31, 2019, the Company opened the Subsections 6-8, portion of the CALAX Laguna Segment,On October which 31, 2019, is the thefirst Company 10-km stretch opened of theCALAX Subsections from Mamplasan 6-8, portion Exit of the in BiñanCALAX City, Laguna LagunaSegment, to which the Santa is the Rosa-Tagaytay first 10-km stretch Interchange of CALAX with fromno toll Mamplasan fees. The constructionExit in Biñan of City, Subsection 5Laguna (Silang to East the SantaInterchange Rosa-Tagaytay to Santa Rosa-TagaytayInterchange with Interchange) no toll fees. has The also construction started. of Subsection 5 (Silang East Interchange to Santa Rosa-Tagaytay Interchange) has also started. On February 10, 2020, TRB issued Notice to Start Collection for the initial toll rates for SubsectionsOn February 6-8 10, of2020, the CALAXTRB issued effective Notice February to Start Collection11, 2020. MPCALAfor the initial was toll granted rates fora provisionalSubsections initial 6-8 of toll the forCALAX the 10-km effective segment February of CALAX 11, 2020. effective MPCALA on February was granted 11, 2020. a provisional initial toll for the 10-km segment of CALAX effective on February 11, 2020. As at March 19, 2021, the pre-construction works for CALAX Cavite Segment is ongoing. Full completionAs at March of 19, the 2021, CALAX the pre-construction is expected in 2023. works for CALAX Cavite Segment is ongoing. Full completion of the CALAX is expected in 2023. ƒ Cebu Cordova Link Expressway Corporation’s (CCLEC) Cebu Cordova Link Expressway ƒ (CCLEX)Cebu Cordova. On OctoberLink Expressway 3, 2016, CCLEC,Corporation’s Cebu City(CCLEC) and Municipality Cebu Cordova of CordovaLink Expressway (as grantors) signed(CCLEX) the. concessionOn October agreement 3, 2016, CCLEC, for the CCLEX. Cebu City CCLEX, and Municipality consists of of the Cordova main alignment (as grantors) startingsigned the from concession the Cebu agreement South Coastal for the Road CCLEX. and ending CCLEX, at the consists Mactan of Circumferential the main alignment Road, inclusivestarting from of interchange the Cebu South ramps Coastal aligning Road the andGuadalupe ending River,at the Mactan the main Circumferential span bridge, approaches, Road, viaducts,inclusive causeways,of interchange low-height ramps aligning bridges, the at-grade Guadalupe road, River, toll plazas the main and tollspan operations bridge, approaches, center. viaducts, causeways, low-height bridges, at-grade road, toll plazas and toll operations center.

*SGVFSM006036* *SGVFSM006036*

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Under the concession agreement, CCLEC is granted the concession to design, finance, construct, Underoperate the and concession maintain theagreement, CCLEX, CCLEC including is thegranted right the to collectconcession toll feesto design, over a finance,35-year construct, operateconcession and period. maintain CCLEX the CCLEX, is estimated including to cost the =26.3Pright to billion. collect Notoll upfront fees over payments a 35-year or concession period.fees are CCLEXto be paid is butestimated the grantors to cost shall =26.3P share billion. 2% of No the upfront project’s payments revenue. or concession fees are to be paid but the grantors shall share 2% of the project’s revenue. Construction is ongoing and expected to be completed by 2022. Construction is ongoing and expected to be completed by 2022. ƒ Concession Agreements – PT Nusantara. PT Nusantara’s concession assets comprise of toll ƒ Concessionroads and water Agreements concession – PT rights. Nusantara. Toll road PT concessionNusantara’s rights concession cover theassets following comprise toll of road toll roadssections: and (a) water Tallo-Hasudin concession Airport;rights. Toll (b) Soekarnoroad concession Hatta Port rights – Pettarani;cover the following toll road sections:(c) Pondok (a) Ranji Tallo-Hasudin and Pondok Airport; Aren. (b)The Soekarno water concession Hatta Port rights – Pettarani; pertain to right to treat and (c)distribute Pondok clean Ranji water and Pondokin the Serang Aren. District, The water Banten concession in Indonesia. rights pertain to right to treat and distribute clean water in the Serang District, Banten in Indonesia. o Ujung Pandang toll road (PT Bosowa Marga Nusantara (BMN) concession). BMN, a subsidiary of PT Metro Pacific Tollways Indonesia (PT MPTI) through PT Nusantara o Ujung Pandang toll road (PT Bosowa Marga Nusantara (BMN) concession). BMN, a subsidiaryInfrastructure of PTTbk Metro (PT Nusantara),Pacific Tollways and PT Indonesia Jasa Marga (PT (Persero) MPTI) through Tbk (Jasa PT Marga),Nusantara a Infrastructurethird-party toll Tbk road (PT operator Nusantara), in Indonesia, and PT enteredJasa Marga into (Persero)a joint operation Tbk (Jasa agreement Marga), fora the third-partyoperations oftoll Ujung road operatorPandang intoll Indonesia, road. BMN entered will intooperate a joint the operationsaid toll road agreement for 30 yearsfor the operationsand after which, of Ujung the tollPandang roads, toll including road. BMN all the will facilities operate in the the said area, toll will road be handedfor 30 years over andto Jasa after Marga. which, The the toll roadroads, has including been in alloperation the facilities since 1998.in the area,PT MPTI will be is handeda wholly over toowned Jasa subsidiaryMarga. The of tollMPTC. road has been in operation since 1998. PT MPTI is a wholly owned subsidiary of MPTC. On October 23, 2017, BMN was granted by the Ministry of Public Works of the Republic Onof Indonesia October 23, the 2017, extension BMN of was the grantedconcession by theperiod Ministry for the of Ujung Public Pandang Works of toll the road Republic to of2043. Indonesia the extension of the concession period for the Ujung Pandang toll road to 2043. Ujung Pandang toll road is a 6.0-km toll road connects Soekarno-Hatta port in Makassar Ujungand A.P. Pandang Pettarani toll road road (Urip is a 6.0-km Sumoharjo toll roadflyover). connects Pettarani Soekarno-Hatta toll road, which port in is Makassar an andextension A.P. Pettarani of the Ujung road Pandang(Urip Sumoharjo toll road, flyover). is a 4.4-km Pettarani toll road toll that road, will which connect is an extensionSoekarno-Hatta of the PortUjung (Makassar) Pandang tolland road,Sultan is Hasanuddina 4.4-km toll International road that will Airport connect to Soekarno-HattaMakassar’s business Port district(Makassar) and cityand Sultancenter. Hasanuddin Construction International is ongoing andAirport is expected to to Makassar’sbe completed business by March district 2021. and city center. Construction is ongoing and is expected to be completed by March 2021. o Makassar Section IV toll road (JTSE concession). JTSE, a subsidiary of PT MPTI through PT Nusantara, entered into a Toll Road Concessionaire Agreement with the o Makassar Section IV toll road (JTSE concession). JTSE, a subsidiary of PT MPTI throughDepartment PT Nusantara,of Public Works entered of into the Republica Toll Road of IndonesiaConcessionaire (DPU) Agreement for the right with to thedevelop, Departmentoperate and maintainof Public MakassarWorks of Sectionthe Republic IV Toll of RoadIndonesia for a (DPU) period forof 35the years, right toincluding develop, operateconstruction and maintain period. TheMakassar toll road Section has been IV Toll in operation Road for since a period 2008. of 35 years, including construction period. The toll road has been in operation since 2008. Makassar Section IV toll road is a 12-km toll road that connects Tallo Bridge to the MakassarMandai Makassar Section IVintersection, toll road is providing a 12-km accesstoll road to thatSultan connects Hasanuddin Tallo BridgeInternational to the MandaiAirport asMakassar well as theintersection, national road providing to Maros, access Indonesia. to Sultan Hasanuddin International Airport as well as the national road to Maros, Indonesia. o Pondok Aren-Serpong toll road lane (BSD concession). BSD, a subsidiary of PT MPTI through PT Nusantara, entered into a Toll Road Operational Authority Agreement with o Pondok Aren-Serpong toll road lane (BSD concession). BSD, a subsidiary of PT MPTI throughJasa Marga PT forNusantara, the development entered into and a operationsToll Road ofOperational Pondok Aren-Serpong Authority Agreement toll road withlane Jasafor a Margaperiod forof 28the years, development including and construction operations period.of Pondok The Aren-Serpong toll road has beentoll road in lane foroperation a period since of 28 1999. years, including construction period. The toll road has been in operation since 1999. Pondok Aren-Serpong toll road lane is a 7.3-km toll road that connects Serpong and Pondok Aren-SerpongAren, South Tangerang, toll road lane Indonesia. is a 7.3-km toll road that connects Serpong and Pondok Aren, South Tangerang, Indonesia. *SGVFSM006036* *SGVFSM006036*

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Construction Contract for NLEX Segment 10. On April 28, 2014, NLEX Corp. signed a target cost Constructionconstruction contract Contract with for LeightonNLEX Segment Contractors 10. On (Asia) April Ltd. 28, (LCAL)2014, NLEX for the Corp. construction signed a targetof NLEX cost constructionSegment 10. contract The contract with Leightonstructure isContractors collaborative (Asia) in nature Ltd. (LCAL) and provides for the a constructionrisk and reward of NLEX sharing Segmentmechanism 10. if Thethe actualcontract construction structure is cost collaborative exceeds or in falls nature below and the provides agreed a target. risk and LCAL’s reward performancesharing mechanismobligations underif the actualthe contract construction are backed cost upexceeds by: (i) or a fallsbank–issued below the irrevocable agreed target. stand–by LCAL’s letter performance of credit, obligations(ii) cash retention, under the and contract (iii) a guarantee are backed issued up by: by (i) Leighton a bank–issued Asia Limited. irrevocable stand–by letter of credit, (ii) cash retention, and (iii) a guarantee issued by Leighton Asia Limited. On May 8, 2014, NLEX Corp. issued the notice to proceed to LCAL, signaling the start of Onpre-construction May 8, 2014, activities. NLEX Corp. Pursuant issued to the the notice contract, to proceed NLEX toCorp. LCAL, placed signaling a reserve the amountstart of of pre-constructionP=889 million in an activities. escrow account Pursuant on to July the 28,contract, 2014 toNLEX cover Corp. payment placed default a reserve leading amount to suspension of of P=889works. million in an escrow account on July 28, 2014 to cover payment default leading to suspension of works. The balance of the reserve account as at December 31, 2018 amounted to P=321 million. Construction of TheSegment balance 10 wasof the completed reserve account with the as road at December accessible 31, to 2018the public amounted in February to P=321 2019. million. The Construction reserve amount of Segmentwas released 10 was in June completed 2019. with the road accessible to the public in February 2019. The reserve amount was released in June 2019. Toll Collection Interoperability Agreement. On September 15, 2017, Toll concessionaires/operators, TollDepartment Collection of Transportation,Interoperability DPWH, Agreement. and Land On September Transportation 15, 2017, Office, Toll signed concessionaires/operators, the MOA for Toll DepartmentCollection Interoperability of Transportation, with DPWH, TRB; whereby and Land the Transportation concessionaires Office, or facility signed operators the MOA agreed for Toll to timely, Collectionsmoothly, andInteroperability fairly implement with theTRB; interoperability whereby the concessionairesof the electronic or toll facility collection operators systems agreed and tocash timely, smoothly,payment systems and fairly of theimplement covered theexpressways interoperability and of of future the electronic toll expressways, toll collection consistent systems with and and cash subject paymentto the concessionaires systems of the and covered operators’ expressways respective and concession of future tollagreements, expressways, toll operations consistent agreements,with and subject and tosupplemental the concessionaires toll operations and operators’ agreement, respective as applicable. concession agreements, toll operations agreements, and supplemental toll operations agreement, as applicable. The agreement will be implemented in two phases and to be operationalized within twelve (12) months Thefrom agreement signing of willthe MOA.be implemented The first phasein two covers phases electronic and to be collectionoperationalized interoperability, within twelve while (12) the months second fromphase signing covers ofcash the collection MOA. The interoperability. first phase covers electronic collection interoperability, while the second phase covers cash collection interoperability. MPTC’s Toll Collection Lanes (NLEX, SCTEX, CAVITEX and portion of the CALAX) are currently MPTC’saccepting Toll Autosweep Collection tags Lanes enrolled (NLEX, to the SCTEX,Easytrip CAVITEXsystem. The and enrolment portion of the AutosweepCALAX) are tags currently started acceptinglast December Autosweep 20, 2017. tags enrolled to the Easytrip system. The enrolment of the Autosweep tags started last December 20, 2017. An interoperability validation test procedure has been developed and finalized by MPTC and SMC. The Aninteroperability interoperability test validationactivities were test procedure conducted has for been 14 consecutive developed daysand finalized from January by MPTC 29 to and SMC. The interoperabilityFebruary 11, 2021. test activities44 vehicles were were conducted used, 22 forvehicles 14 consecutive coming from days each from party. January The 29 test to routes are Februarywithin NLEX, 11, 2021. SCTEX 44 vehiclesand TPLEX. were Theused, evaluation 22 vehicles of comingmore than from 10,000 each passagesparty. The conducted test routes during are the withintesting NLEX,is ongoing. SCTEX and TPLEX. The evaluation of more than 10,000 passages conducted during the testing is ongoing. The second phase that covers the cash collection interoperability will no longer be implemented in line Thewith secondthe recent phase developments that covers theon thecash mandate collection of theinteroperability Government willto implement no longer 100%be implemented cashless and in line withcontactless the recent transactions developments in all expressways.on the mandate of the Government to implement 100% cashless and contactless transactions in all expressways. Grant of Original Proponent Status to MPT South for Cavite Tagaytay Batangas Expressway (CTBEx) GrantProject. of OriginalOn July 26, Proponent 2018, Metro Status Pacific to MPT Tollways South for South Cavite Corp. Tagaytay (MPT South),Batangas an Expresswayindirect subsidiary (CTBEx) of Project.MPIC, wasOn granted July 26, Original 2018, Metro Proponent Pacific Status Tollways by the South DPWH Corp. in relation(MPT South), to its unsolicited an indirect proposal subsidiary for of the MPIC,CTBEx was Project. granted Original Proponent Status by the DPWH in relation to its unsolicited proposal for the CTBEx Project. The CTBEx Project, a 50.42 kilometer toll facility, is intended to connect seamlessly with the CALAX Theand CAVITEXCTBEx Project, of MPTC a 50.42 and kilometer is expected toll to facility, provide is congestion intended to relief connect to Aguinaldo seamlessly Highway with the andCALAX andTagaytay-Nasugbu CAVITEX of MPTC road. Itand is currentlyis expected configured to provide to congestion have eight relief(8) main to Aguinaldo interchanges Highway and two and (2) spur Tagaytay-Nasugburoads, and is estimated road. to costIt is currentlyapproximately configured P=25 billion to have and eight if awarded, (8) main will interchanges be funded and through two (2) a spur roads,combination and is ofestimated internally-generated to cost approximately funds and P=25 debt. billion and if awarded, will be funded through a combination of internally-generated funds and debt. *SGVFSM006036* *SGVFSM006036*

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As at March 19, 2021, the unsolicited proposal for the CTBEx Project endorsed on January 10, 2019 is Ascurrently at March securing 19, 2021, project the approvalunsolicited from proposal National for Economic the CTBEx Development Project endorsed Authority on January (NEDA) 10, Technical2019 is currentlyBoard, Cabinet securing Committee, project approval and Board. from The National required Economic endorsement Development from the Authority Batangas (NEDA)Provincial Technical District Board,Council Cabinet was secured Committee, on January and Board.21, 2021 The and required will be endorsementpresented for fromapproval the Batangas and endorsement Provincial by District the CouncilNEDA Regional was secured District on January Council 21, within 2021 first and half will of be 2021. presented for approval and endorsement by the NEDA Regional District Council within first half of 2021. Water Water Concession Arrangements Concession Arrangements ƒ Maynilad concession agreement with MWSS. In February 1997, Maynilad entered into a ƒ Mayniladconcession concession agreement agreement with MWSS, with with MWSS. respect In toFebruary the MWSS 1997, West Maynilad Service entered Area. into Under a the concession agreementagreement, with MWSS MWSS, grants with Maynilad, respect theto the sole MWSS right to West manage, Service operate, Area. repair, Under the concessiondecommission agreement, and refurbish MWSS all grants fixed andMaynilad, movable the assets sole right required to manage, to provide operate, water repair, and sewerage decommissionservices in the Westand refurbish Service Areaall fixed for 25and years movable ending assets in 2022. required In Septemberto provide water2009, andMWSS sewerage servicesapproved in an the extension West Service of its Areaconcession for 25 agreementyears ending with in Maynilad2022. In Septemberfor another 2009, fifteen MWSS (15) years approvedto 2037 (the an expirationextension ofdate). its concession The legal titleagreement to all property, with Maynilad plant and for equipmentanother fifteen contributed (15) years to tothe 2037 existing (the MWSSexpiration system date). by TheMaynilad legal title during to all the property, concession plant period and equipmentremains with contributed Maynilad to theuntil existing the expiration MWSS datesystem at which by Maynilad time, all during rights, the titles concession and interests period in remainssuch assets with will Maynilad untilautomatically the expiration vest to date MWSS. at which Under time, the all concession rights, titles agreement, and interests Maynilad in such is assets entitled will to charge its automaticallycustomers a Basic vest Standardto MWSS. tariff Under which the is concession calculated agreement, to enable Maynilad Maynilad to is recover entitled all to charge its customersexpenditures a Basic efficiently Standard and tariffprudently which incurred, is calculated including to enable Philippines Maynilad business to recover taxes all and expendituresconcession fees efficiently while also and providing prudently Maynilad incurred, a including real rate ofPhilippines return on businessthe net cash taxes sum and invested concessionin the concession fees while from also time providing to time. ThisMaynilad tariff ais real subject rate toof periodicreturn on changes the net cashdue principally sum invested to in(a) the an concessionannual standard from ratetime adjustment to time. This to compensate tariff is subject for changes to periodic in the changes CPI subject due principally to a rate to (a)adjustment an annual limit; standard (b) an rate extraordinary adjustment priceto compensate adjustment for to changes account infor the the CPI financial subject consequences to a rate adjustmentof the occurrence limit; (b)of certainan extraordinary unforeseen price events adjustment subject to to grounds account stipulated for the financial in the concession consequences ofagreement; the occurrence and (c) of a certainrate rebasing unforeseen mechanism events whichsubject allows to grounds rates stipulatedto be adjusted in the every concession five (5) agreement;years. The rateand rebasing(c) a rate adjustment rebasing mechanism allows for whichupdates allows to estimates rates to for be expendituresadjusted every and five demand (5) years.forecasts The while rate rebasingalso resetting adjustment the real allows rate of for return updates awarded to estimates to Maynilad for expenditures in light of changes and demand to forecastscosts of funding. while also Under resetting Maynilad’s the real concession rate of return agreement awarded with to Maynilad the Philippine in light Government, of changes toany costsrate adjustment of funding. requires Under approvalMaynilad’s by concessionMWSS and agreement the Regulatory with theOffice Philippine (RO). Government, any rate adjustment requires approval by MWSS and the Regulatory Office (RO). The Republic of the Philippines (ROP) also issued in favor of Maynilad on July 31, 1997 and TheMarch Republic 17, 2010 of anthe undertaking Philippines which(ROP) provides, also issued among in favor other of things,Maynilad that on the July ROP 31, shall 1997 and Marchindemnify 17, 2010Maynilad an undertaking in respect of which any lossprovides, that is among occasioned other by things, a delay that caused the ROP by theshall ROP or indemnifyany government-owned Maynilad in respectagency ofin anyimplementing loss that is anyoccasioned increase by in athe delay standard caused rates by thebeyond ROP the or anydate government-ownedfor its implementation agency in accordance in implementing with the any concession increase inagreement the standard (the rates“Undertaking”). beyond the date for its implementation in accordance with the concession agreement (the “Undertaking”). On December 11, 2019, Maynilad received a letter from the MWSS informing Maynilad that the OnMWSS December Board 11,of Trustees, 2019, Maynilad in a special received meeting a letter held from on December the MWSS 5, informing2019, passed Maynilad a resolution that the MWSSrevoking Board the resolution of Trustees, that in approved a special the meeting extension held of on Maynilad’s December 5,Concession 2019, passed Agreement a resolution from revokingits original the expiry resolution of 2022 that to approved 2037 (the the “Subject extension Resolution”). of Maynilad’s Concession Agreement from its original expiry of 2022 to 2037 (the “Subject Resolution”). The MWSS Board of Trustees likewise revoked a similar resolution that extended the term of the TheConcession MWSS AgreementBoard of Trustees of the other likewise concessionaire. revoked a similar resolution that extended the term of the Concession Agreement of the other concessionaire. Subsequently, however, when Maynilad formally asked the MWSS and the Regulatory Office Subsequently,what the effect however, of the Subject when ResolutionMaynilad formally is, the Regulatory asked the Office,MWSS in and a letterthe Regulatory to Maynilad Office dated whatDecember the effect 23, 2020, of the stated Subject that Resolution “as of to date,is, the the Regulatory 25-year Concession Office, in aAgreement letter to Maynilad (CA) that dated Decembercovers the years23, 2020, 1997 stated to 2022 that and “as the of toMemorandum date, the 25-year of Agreement Concession (MOA) Agreement that provides (CA) that for the covers15-year the extension years 1997 of the to concession2022 and the period Memorandum from year of 2022 Agreement to 2037 (MOA)have not that yet providesbeen cancelled.” for the 15-year extension of the concession period from year 2022 to 2037 have not yet been cancelled.” *SGVFSM006036* *SGVFSM006036*

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As of March 19, 2021, the review of the Concession Agreement is still ongoing and Maynilad has Asnot ofbeen March advised 19, 2021,of any the amendments review of theto theConcession provisions Agreement of the Concession is still ongoing Agreement. and Maynilad Any future has notamendments been advised to the of provisionsany amendments of the Concession to the provisions Agreement of the ofConcession Maynilad Agreement.will be reflected Any infuture the amendmentsconsolidated tofinancial the provisions statements of theas theseConcession are determined. Agreement As of of Maynilad December will 31, be 2020, reflected the in the consolidatedpresentation offinancial the consolidated statements financial as these statements,are determined. including As of the December amortization 31, 2020, of Maynilad’s the presentationservice concession of the consolidatedasset are based financial on the existingstatements, terms including of the Concession the amortization Agreement. of Maynilad’s See servicedisclosures concession in Note asset30, Concession are based on Agreement the existing Review terms and of theAmendment Concession. Agreement. See disclosures in Note 30, Concession Agreement Review and Amendment. The schedule of undiscounted estimated future concession fee payments, based on the term of the TheConcession schedule Agreement, of undiscounted is as follows: estimated future concession fee payments, based on the term of the Concession Agreement, is as follows: In Original Currency ForeignIn Original Currency Peso Loans/ CurrencyForeign Loans ProjectPeso Loans/ Local Total Peso Year (TranslatedCurrency to US$)*Loans ProjectSupport Local Equivalent*Total Peso Year (Translated to US$)* (In Millions)Support Equivalent* 2021 $5.9 (In Millions)P=623.6 P=909.1 20212022 $5.95.9 P=623.6640.9 P=909.1925.9 20222023 5.97.7 640.9642.4 1,012.0925.9 20232024 7.77.5 642.4 1,012.01,003.7 20242025-2037 64.17.5 8,332.6642.4 11,406.21,003.7 2025-2037 $64.191.1 P=10,881.98,332.6 P=11,406.215,256.9 *Translated using the December 31, 2020 exchange$91.1 rate of =48.02:US$1.P P=10,881.9 P=15,256.9 *Translated using the December 31, 2020 exchange rate of =48.02:US$1.P Additional concession fee liability relating to the extension of the Concession Agreement is only Additionaldeterminable concession upon loan fee drawdown liability relatingof MWSS to theand extension the actual of construction the Concession of the Agreement related is only determinableconcession projects. upon loan drawdown of MWSS and the actual construction of the related concession projects. Other material commitments under Maynilad’s concession agreement are disclosed below. Other material commitments under Maynilad’s concession agreement are disclosed below. Commitments under Maynilad’s Concession Agreement with MWSS. Significant commitments under Commitmentsthe Concession under Agreement Maynilad’s follow: Concession Agreement with MWSS. Significant commitments under the Concession Agreement follow: a. Payment of concession fees (see Note 17) a. Payment of concession fees (see Note 17) b. Posting of performance bond b. Posting of performance bond Under Section 6.9 of the Concession Agreement, Maynilad is required to post a performance Underbond to Section secure 6.9the ofperformance the Concession of its Agreement,obligations underMaynilad certain is required provisions to post of the a performanceConcession bondAgreement. 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 Thethe Rate aggregate Rebasing amount Period drawable to which in itone relates or more is set installments out below. under such performance bond during the Rate Rebasing Period to which it relates is set out below. Aggregate Amount AggregateDrawable Amount Under Rate Rebasing Period PerformanceDrawable Under Bond Rate Rebasing Period Performance(In Millions) Bond First (August 1, 1997 – December 31, 2002) (InUS$120.0 Millions) FirstSecond (August (January 1, 1997 1, 2003– December– December 31, 31,2002) 2007) US$120.0120.0 SecondThird (January (January 1, 1, 2008 2003– –DecemberDecember 31, 31, 2012) 2007) 120.090.0 ThirdFourth(January (January 1, 1, 2008 2013––DecemberDecember 31, 31, 2012) 2017) 90.080.0 FourthFifth (January (January 1, 1, 2018 2013– –MayDecember 6, 2022) 31, 2017) 80.060.0 Fifth (January 1, 2018 – May 6, 2022) 60.0 *SGVFSM006036* *SGVFSM006036*

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Within 30 days from the commencement of each renewal date, Maynilad shall cause the performanceWithin 30 days bond from to thebe reinstatedcommencement to the fullof each amount renewal set forth date, above Maynilad applicable shall cause for the the year. 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 Maynilad’s Concession Agreement, certain adjustmentsIn connection to with the obligationthe extension of Maynilad of the term to ofpost Maynilad’s the performance Concession bond Agreement, under Section certain 6.9 of the adjustmentsConcession Agreementto the obligation have beenof Maynilad approved to andpost summarized the performance as follows: bond under Section 6.9 of the Concession Agreement have been approved and summarized as follows: ƒ The aggregate amount drawable in one or more installments under each performance bond ƒ duringThe aggregate the Rate amount Rebasing drawable Period into onewhich or moreit relates installments has been underadjusted each to performanceUS$30.0 million bond untilduring the the Expiration Rate Rebasing Date; Period to which it relates has been adjusted to US$30.0 million until the Expiration Date; ƒ The amount of the Performance Bond for the period covering 2023 to 2037 shall be mutually ƒ Theagreed amount upon ofin thewriting Performance by the MWSS Bond andfor theMaynilad period consistentcovering 2023 with tothe 2037 provisions shall be of mutually the Concessionagreed upon Agreement. in writing by the MWSS and Maynilad consistent with the provisions of the Concession Agreement. ƒ On December 14, 2017, Maynilad posted the Surety Bond for the amount of US$60.0 million ƒ issuedOn December by Prudential 14, 2017, Guarantee Maynilad and posted Assurance, the Surety Inc. (theBond Surety) for the in amount favor of of MWSS, US$60.0 as million issuedsecurity by for Prudential Maynilad’s Guarantee proper andand timelyAssurance, performance Inc. (the of Surety) its obligations in favor ofunder MWSS, the as Concessionsecurity for Maynilad’sAgreement. proper The liability and timely of the performance Surety under of thisits obligations bond will expire under onthe JanuaryConcession 1, 2021. Agreement. The liability of the Surety under this bond will expire on January 1, 2021. ƒ On November 26, 2020, Maynilad posted the renewal of the Surety Bond for the amount of ƒ US$60.0On November million 26, issued 2020, by Maynilad Prudential posted Guarantee the renewal and Assurance, of the Surety Inc. Bond (the Surety)for the amount in favor of of MWSSUS$60.0 covering million issuedthe Performance by Prudential Bond Guarantee for the period and Assurance, January 1, Inc.2021 (the until Surety) May 6,in 2022.favor of MWSS covering the Performance Bond for the period January 1, 2021 until May 6, 2022. c. Payment of half of MWSS and MWSS–RO’s budgeted expenditures for the subsequent years, c. Paymentprovided ofthe half aggregate of MWSS annual and budgeted MWSS–RO’s expenditures budgeted do expenditures not exceed =200P for the million, subsequent subject years, to CPI adjustments.provided the aggregateBeginning annual 2010, budgetedthe annual expenditures budgeted expenditures do not exceed shall =200P increase million, by 100.0%,subject to CPI subjectadjustments. to CPI Beginning adjustments, 2010, as athe result annual of the budgeted extension expenditures of the life shallof the increase Maynilad’s by 100.0%, concession subjectagreement. to CPI adjustments, as a result of the extension of the life of the Maynilad’s concession agreement. d. To meet certain specific commitments in respect to the provision of water and sewerage services d. inTo the meet West certain Service specific Area, commitments unless modified in respect by the toMWSS–RO the provision due of to water unforeseen and sewerage circumstances. services in the West Service Area, unless modified by the MWSS–RO due to unforeseen circumstances. e. To operate, maintain, renew and, as appropriate, decommission facilities in a manner consistent e. withTo operate, the National maintain, Building renew Standards and, as appropriate, and best industrial decommission practices facilities so that, in at a all manner times, consistent the water andwith sewerage the National system Building in the Standards West Service and Areabest industrialis capable practices of meeting so that,the service at all times, obligations the water (as suchand sewerage obligations system may inbe therevised West from Service time Area to time is capable by the MWSS–ROof meeting the following service obligationsconsultation (as with suchMaynilad). 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 f. publicTo repair health and orcorrect, welfare, on ora priority cause damage basis, any to persons defect in or the third–party facilities property.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 g. availableTo ensure to that meet at allits timesobligations Maynilad under has the sufficient Concession financial, Agreement. material and personnel resources available to meet its obligations under the Concession Agreement. h. To prevent incurrence of debt or liability that would mature beyond the term of the Concession h. ToAgreement, prevent incurrence without the of prior debt noticeor liability of MWSS. 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 orFailure to a degree of Maynilad which, to in perform a reasonable any of opinion its obligations of the MWSS–RO, under the Concession amounts to Agreement an effective of a kind abandonmentor to a degree ofwhich, the Concession in a reasonable Agreement opinion and of thewhich MWSS–RO, failure continues amounts for to at an least effective 30 days after abandonmentwritten notice offrom the theConcession MWSS–RO, Agreement may cause and thewhich Concession failure continues Agreement for to at beleast terminated. 30 days after written notice from the MWSS–RO, may cause the Concession Agreement to be terminated. *SGVFSM006036* *SGVFSM006036*

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ƒ PHI. In August 2012, Maynilad acquired a 100% interest in PHI, which engages in water ƒ distributionPHI. In August business 2012, in Maynilad certain areas acquired in central a 100% and interest southern in Luzon.PHI, which PHI engagesis granted in thewater sole right distributionto distribute businesswater in inthese certain areas areas under in certaincentral concessionand southern agreements Luzon. PHI granted is granted by the the Philippine sole right governmentto distribute forwater 25 inyears these to areas2035. under certain concession agreements granted by the Philippine government for 25 years to 2035. ƒ Cagayan de Oro 100 MLD Bulk Water Supply Project (CDO BWS Project). On August 14, 2017, ƒ CagayanMPW signed de Oro a joint 100 venture MLD Bulk agreement Water Supplywith the Project Cagayan (CDO de Oro BWS Water Project) District. On (COWD)August 14, for 2017, the formationMPW signed of aa jointjoint ventureventure companyagreement to with undertake the Cagayan the supply de Oro of bulk Water treated District water (COWD) to address for thethe requirementsformation of aCagayan joint venture de Oro company City. The to undertakeCDO BWS the Project supply covers of bulk the treated (i) the water delivery to address of at least the requirements40 MLD of bulk Cagayan treated de water Oro City.within The the CDOeastern BWS sector Project of Cagayan covers Dethe Oro,(i) the and delivery (ii) the of supply at least at least40 MLD 60 MLD of bulk of treatedbulk treated water water within to the service eastern the sector requirements of Cagayan of the De western Oro, and sector (ii) thein supply at accordanceleast 60 MLD with of thebulk bulk treated water water supply to service agreement. the requirements At COBI’s option,of the western the CDO sector BWS in Project mayaccordance be implemented with the bulk through water (i) supply the design agreement. and construction At COBI’s of option, water productionthe CDO BWS and Project maytransmission be implemented facilities through with a capacity (i) the design of approximately and construction 100 MLD,of water (ii) production the acquisition and of ownershiptransmission or facilitiesleasehold with rights a capacity to such productionof approximately and transmission 100 MLD, facilities(ii) the acquisition and water ofrights, or (iii)ownership the purchase or leasehold of bulk rights treated to suchwater production for supply andto the transmission western sector. facilities The and project water has rights, a term or of (iii)30 years the purchase (renewable of bulkfor another treated 20water years for subject supply toto certainthe western conditions). sector. TheOperations project commencedhas a term of on30 Decemberyears (renewable 31, 2017. for another 20 years subject to certain conditions). Operations commenced on December 31, 2017. ƒ Metro Iloilo Bulk Water Supply Corporation (MIBWSC). On July 4, 2016, pursuant to a Joint ƒ VentureMetro Iloilo Agreement Bulk Water between Supply MetroPac Corporation Iloilo (MIBWSC)Holdings Corporation. On July 4, (MILO; 2016, pursuant a wholly to owned a Joint subsidiaryVenture Agreement of MPW), between and Metro MetroPac Iloilo Water Iloilo DistrictHoldings (MIWD), Corporation created (MILO; and established a wholly owned MIBWSC,subsidiary ofto MPW),implement and the Metro 170 Iloilo Million Water Liters District per Day (MIWD), (MLD) created Bulk Water and established Supply Project (BWSMIBWSC, Project). to implement The BWS the Project 170 Million covers Litersthe (i) per rehabilitation Day (MLD) and Bulk upgrading Water Supply of MIWD’s Project existing (BWS55 MLD Project). water facilities, The BWS (ii) Project the expansion covers the and (i) construction rehabilitation of andnew upgrading water facilities of MIWD’s to increase existing production55 MLD water to up facilities, to 115 MLD; (ii) the and expansion (iii) delivery and construction of contracted of water new waterdemand facilities to MIWD to increase in accordanceproduction towith up theto 115 bulk MLD; water and supply (iii) agreement.delivery of contractedThe BWS Projectwater demand covers toa period MIWD from in the accordancelater of the Targetwith the Initial bulk Deliverywater supply Date agreement. and the Initial The Delivery BWS Project Date andcovers ending a period on the from the 25laterth anniversary of the Target thereof Initial and Delivery shall be Date extended and the for Initial an additional Delivery 25Date years and counted ending onfrom the completion 25of ththe anniversary agreed upon thereof expansion and shall obligation, be extended but in for no an event additional shall exceed 25 years an countedaggregate from of 50 completion years. of the agreed upon expansion obligation, but in no event shall exceed an aggregate of 50 years. MIWD retains ownership of the existing facilities subject to the right of MIBWSC to access and use.MIWD MIBWSC retains ownership in turn retains of the ownership existing facilitiesof the new subject facilities to the but right is required of MIBWSC to handback to access the and BWSuse. MIBWSC Project, including in turn retains transfer ownership of the full of ownership the new facilities of the new but facilities,is required at to the handback end of the the BWScontract Project, period. including transfer of the full ownership of the new facilities, at the end of the contract period. On July 5, 2016, MIBWSC officially took over operations from the MIWD. On July 5, 2016, MIBWSC officially took over operations from the MIWD. ƒ Metro Iloilo Water District Water (MIWD) Concession Joint Venture Project. On ƒ MetroNovember Iloilo 13, Water 2018, District MPW, Water entered (MIWD) into a Joint Concession Venture Joint Agreement Venture (JVA) Project. withOn MIWD for the Novemberrehabilitation, 13, operation,2018, MPW, maintenance, entered into and a Joint expansion Venture of AgreementMIWD’s existing (JVA) waterwith MIWD distribution for the rehabilitation,system and construction operation, ofmaintenance, wastewater andfacilities expansion (the “Project”). of MIWD’s On existing January water 17, 2019,distribution Metro Pacificsystem Iloiloand construction Water, Inc. of(MPIWI), wastewater the facilitiesjoint venture (the corporation,“Project”). On 80%-owned January 17, by 2019, MPW Metro and 20%- ownedPacific byIloilo MIWD, Water, was Inc. organized (MPIWI), pursuant the joint to venture the provisions corporation, of the 80%-owned JVA. MPIWI by shallMPW implement and 20%- theowned Project by MIWD, and will was have organized the right pursuantto bill and to collectthe provisions tariff for of the the water JVA. supply MPIWI and shall wastewater implement servicesthe Project provided and will to have the customers the right to in bill the andservice collect area tariff of MIWD. for the waterMPIWI supply commenced and wastewater operations inservices July 2019. provided to the customers in the service area of MIWD. MPIWI commenced operations in July 2019. The project cost for the duration of the 25-year concession is estimated at 12.35 billion, with an initialThe project equity cost investment for the duration of P=745 ofmillion, the 25-year of which concession MPW’s isshare estimated is at P=596 at 12.35 million. billion, with an initial equity investment of P=745 million, of which MPW’s share is at P=596 million.

*SGVFSM006036* *SGVFSM006036*

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MPW provided performance security to MIWD amounting to =60.0P million in the form of a MPWstandby provided letter of performance credit. security to MIWD amounting to =60.0P million in the form of a standby letter of credit. MIWD’s service area includes Iloilo City and seven municipalities specifically Pavia, Oton, MIWD’sMaasin, Cabatuan, service area Sta. includes Barbara, Iloilo Leganes City and Sanseven Miguel. municipalities specifically Pavia, Oton, Maasin, Cabatuan, Sta. Barbara, Leganes and San Miguel. ƒ Dumaguete City Water District (DCWD) Water Concession Joint Venture Project. On ƒ DumagueteMay 16, 2018, City MPW Water officially District received(DCWD) from Water DCWD Concession the Notice Joint of Venture Award Project. for the rehabilitation, On operation,May 16, 2018, maintenance, MPW officially and expansion received of from DCWD’s DCWD existing the Notice water of distribution Award for thesystem rehabilitation, and developmentoperation, maintenance, of wastewater and facilities. expansion of DCWD’s existing water distribution system and development of wastewater facilities. On September 3, 2019, MPW signed a joint venture agreement (JVA) with DCWD. Pursuant to theOn provisionsSeptember set3, 2019,in the MPW JVA, Metrosigned Pacifica joint ventureDumaguete agreement Water Service(JVA) with Inc. DCWD.(MPDW) Pursuant was to incorporatedthe provisions on set October in the JVA, 22, 2019 Metro which Pacific is 80%-owned Dumaguete byWater MPW Service and 20%-owned Inc. (MPDW) by DCWD.was MPDWincorporated shall onimplement October the22, project2019 which and will is 80%-owned have the right by MPWto bill and 20%-ownedcollect tariff byfor DCWD. the water supplyMPDW and shall wastewater implement services the project provided and will to the have customers the right in to the bill service and collect area oftariff DCWD. for the The water JVA shallsupply be and effective wastewater for a termservices commencing provided toon the the customers commencement in the servicedate (as area defined of DCWD. in the JVA) The JVAand endingshall be on effective the 25th for anniversary a term commencing thereof and on may the be commencement renewed for another date (as 25 defined years at in the the option JVA) ofand MPDWending on for the as 25longth anniversary as MPDW isthereof not then and in may default be renewed under any for of another its material 25 years obligations at the option under of theMPDW JVA forand as provided, long as MPDW further, isthat not the then initial in default and renewal under anyterms of ofits JVA material shall obligations in no event under exceed anthe aggregate JVA and provided,of 50 years further, from commencement that the initial and date. renewal terms of JVA shall in no event exceed an aggregate of 50 years from commencement date. On October 30, 2019, MPDW signed a Service Contract Agreement with DCWD. This grants MPDWOn October the exclusive30, 2019, rightMPDW and signed privilege a Service to undertake Contract the Agreement project. with DCWD. This grants MPDW the exclusive right and privilege to undertake the project. MPDW commenced operations on February 1, 2021. MPDW commenced operations on February 1, 2021. Under the service contract agreement between MPDW and Dumaguete City Water District (DCWD),Under the serviceMPDW contract shall pay agreement annual service between fee MPDWto DCWD and representing Dumaguete the City sum Water of the District contract monitoring(DCWD), MPDW fees and shall fixed pay lease annual fees. service The annual fee to fixedDCWD lease representing payments therepresent sum of rentals the contract for DCWD’smonitoring making fees and the fixed existing lease facilities fees. The available annual forfixed the lease exclusive payments use and represent possession rentals of forMPDW throughoutDCWD’s making the operational the existing period facilities of twenty available five (25)for the years. exclusive The contract use and monitoring possession feesof MPDW cover thethroughout day-to-day the expensesoperational of periodDCWD of (residual twenty five office) (25) as years. it retains The its contract function monitoring as regulator fees of cover MPDW.the day-to-day It is fixed expenses at =36P of million DCWD for (residual the first office) year with as it the retains succeeding its function years as adjusted regulator for of CPI. An initialMPDW. service It is fixed fee of at P=42 =36P million million was for settledthe first within year with a month the succeeding from the signing years adjustedof the service for CPI. An contractinitial service agreement. fee of P=42 million was settled within a month from the signing of the service contract agreement. ƒ Amayi Water Concession Agreement. On February 19, 2019, Amayi Water Solutions, Inc., a ƒ Amayiwholly Waterowned Concession subsidiary ofAgreement Maynilad,. On entered February into a19, concession 2019, Amayi agreement Water Solutions,with the Municipality Inc., a ofwholly Boac, owned Marinduque. subsidiary The of concession Maynilad, agreemententered into shall a concession be effective agreement for a period with of the twenty-five Municipality (25)of Boac, years Marinduque. beginning on The the concessioncommencement agreement date with shall the be optioneffective to renewfor a period for another of twenty-five maximum of(25) 25 years years beginning at the sole on discretion the commencement of the concessionaire. date with the On option January to 23,renew 2020, for theanother Office maximum of the Boacof 25 Waterworksyears at the sole Operation discretion of the of Municipalitythe concessionaire. of Boac, On Marinduque January 23, notified2020, the Maynilad Office of Boac the of theBoac order Waterworks of their Local Operation Chief of Executive the Municipality calling for of theBoac, review Marinduque and further notified study Maynilad of the Boac of Concessionthe order of Agreement.their Local Chief As at ExecutiveMarch 19, calling2021, thefor Municipalitythe review and of furtherBoac, Marinduquestudy of the has yet to fulfillConcession their obligation Agreement. under As at the March Concession 19, 2021, Agreement the Municipality that are partof Boac, of the Marinduque contract’s conditions has yet to precedent.fulfill their obligation under the Concession Agreement that are part of the contract’s conditions precedent. ƒ PNW’s BOO contract with the Chu Lai Economic Zone Authority (CLEZA). PNW is party to a ƒ BOOPNW’s contract BOO contract signed with with thethe CLEZAChu Lai inEconomic January 2016.Zone AuthorityUnder the (CLEZA) agreement,. PNW PNW is has party been to a grantedBOO contract a 50-year signed contract with tothe build, CLEZA own in and January operate 2016. a water Under treatment the agreement, plant for PNW the treatment has been and distributiongranted a 50-year of water contract to locators to build, in the own Chu and Lai operate Open aEconomic water treatment Zone, andplant consumers for the treatment in Tam Kyand distribution of water to locators in the Chu Lai Open Economic Zone, and consumers in Tam Ky *SGVFSM006036* *SGVFSM006036*

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City, Duy Xuyen, Thang Binh, and Nui Thanh districts. Under the signed BOO contract, the Further, Maynilad also requested to pay =677P million in eight monthly instalments of =84.6P million to averageCity, Duy price Xuyen, of clean Thang water Binh, is allowedand Nui toThanh increase districts. at a rate Under of 12.36% the signed every BOO 2 years. contract, PNW the is Further,commence Maynilad in July also2019 requested until February to pay 2020, =677P to million coincide in eightwith themonthly full payment/ instalments maturity of =84.6P of themillion JBIC to authorizedaverage price to negotiateof clean water and sign is allowed separate to offtake increase agreements at a rate of with 12.36% each every locator/customer, 2 years. PNW and is commenceLoan. in July 2019 until February 2020, to coincide with the full payment/ maturity of the JBIC averageauthorized price to negotiatenegotiated and must sign be separate within the offtake range agreements allowed by with the Quangeach locator/customer, Nam Province People’s and Loan. Committeeaverage price (PPC). negotiated must be within the range allowed by the Quang Nam Province People’s As communicated by MWSS-Finance on July 17, 2019, Maynilad can pay based on the requested Committee (PPC). Asamount communicated and schedule by whileMWSS-Finance waiting for on the July response 17, 2019, of the Maynilad Bureau canof Treasury pay based concerning on the requested the PNW is currently completing the construction of the first stage of Phase 1A of the water amountguarantee and fee schedule and shortfall. while Mayniladwaiting for paid the theresponse first installment of the Bureau on July of Treasury 30, 2019. concerning the treatmentPNW is currently plant, which completing has an initialthe construction capacity of of 25 the million first stage liters of per Phase day 1A(MLD). of the The water Project has guarantee fee and shortfall. Maynilad paid the first installment on July 30, 2019. atreatment potential plant, to increase which tohas 300 an MLDinitial beyond capacity 2030. of 25 million liters per day (MLD). The Project has The last installment for JBIC Loan was paid in February 18, 2020. As at March 19, 2021, Bureau of a potential to increase to 300 MLD beyond 2030. TheTreasury last installment has yet to respond for JBIC to Loan the Company’s was paid in letter February concerning 18, 2020. the Asguarantee at March fee 19, and 2021, shortfall. Bureau of Contracts with Manila Water Company, Inc. (Manila Water). In relation to Maynilad’s Concession Treasury has yet to respond to the Company’s letter concerning the guarantee fee and shortfall. ContractsAgreement with (see Manila above), Water Maynilad Company, entered Inc. into (Manila the following Water). contracts In relation with to ManilaMaynilad’s Water Concession (the “East Rail Concessionaire”):Agreement (see above), Maynilad entered into the following contracts with Manila Water (the “East Rail Concessionaire”): Concession Agreement – LRMC’s LRT-1 Project. On October 2, 2014, LRMC signed together with the a. Interconnection Agreement wherein the two Concessionaires shall form an unincorporated joint ConcessionDOTC (now Agreement DOTr) and – theLRMC’s Light RailLRT-1 Transit Project Authority. On October (LRTA) 2, 2014,(together LRMC with signed DOTr together as “Grantors”) with the a. ventureInterconnection that will Agreement manage, operate, wherein and the maintain two Concessionaires interconnection shall facilities. form an Theunincorporated terms of the joint DOTCthe Concession (now DOTr) Agreement and the for Light the RailLRT-1 Transit Cavite Authority Extension (LRTA) and Operations (together &with Maintenance DOTr as “Grantors”) Project agreementventure that provide, will manage, among operate, others, andthe costmaintain and the interconnection volume of water facilities. to be transferred The terms between of the the(LRT-1 Concession Project). Agreement The DOTr for and the LRTA LRT-1 formally Cavite Extensionawarded the and Project Operations to LRMC & Maintenance on September Project 15, 2014. zones;agreement and, provide, among others, the cost and the volume of water to be transferred between (LRT-1Under the Project). Concession The DOTrAgreement, and LRTA LRMC formally will operate awarded and themaintain Project the to existingLRMC onLRT-1 September and construct 15, 2014. an zones; and, Under11.7-km the extension Concession from Agreement, the present LRMC end-point will at operate Baclaran and to maintain the Niog the area existing in Bacoor, LRT-1 Cavite. and construct A total of an b. Common Purpose Facilities Agreement that provides for the operation, maintenance, renewal, 11.7-kmeight (8) extensionnew stations from will the be present built along end-point the extension, at Baclaran which to the traverses Niog area the incities Bacoor, of Parañaque Cavite. A and total Las of b. and,Common as appropriate, Purpose Facilities decommissioning Agreement of that the providesCommon for Purpose the operation, Facilities, maintenance, and performance renewal, of eightPiñas (8)up newto Bacoor, stations Cavite. will be The built Concession along the extension, Agreement which is for traverses a period ofthe thirty-two cities of Parañaque (32) years and Las otherand, as functions appropriate, pursuant decommissioning to and in accordance of the Common with the Purposeprovisions Facilities, of the Concession and performance Agreement of Piñascommencing up to Bacoor, from September Cavite. The 12, Concession 2015 (the Effective Agreement Date). is for a period of thirty-two (32) years andother performance functions pursuant of such toother and functionsin accordance relating with to the the provisions concession of (and the theConcession concession Agreement of the commencing from September 12, 2015 (the Effective Date). Eastand performance Concessionaire) of such as Maynilad other functions and the relating East Concessionaire to the concession may (and choose the toconcession delegate toof thethe LRMC has the right to apply for an adjustment of the fare based on the specific fare adjustment formula JointEast Concessionaire)Venture, subject as to Maynilad the approval and of the MWSS. East Concessionaire may choose to delegate to the LRMCunder LRMC’s has the rightconcession to apply agreement for an adjustment with the Philippineof the fare Government.based on the specific This formula fare adjustment specifies anformula initial Joint Venture, subject to the approval of MWSS. underboarding LRMC’s and per-kilometer concession agreementfare with 10.25% with the increases Philippine over Government. these initial Thisfares formula every two specifies (2) years an initial MWSS JBIC Loan (Concession Fee). The Loan Agreement between the Government and JBIC boardingbeginning and in Augustper-kilometer 2016, subject fare with to inflation10.25% increases rebasing overif inflation these initialfalls outside fares every an acceptable two (2) years band. If (formerlyMWSS JBIC OECF) Loan was (Concession signed on Fee) February. The Loan9, 1990. Agreement The proceeds between of the the Loan Government were used and to JBIC fund the beginningthe approved in Augustfare is different 2016, subject from tothe inflation formula rebasing specified if on inflation the concession falls outside agreement, an acceptable both the band. If implementation(formerly OECF) of was the signedAngat Wateron February Supply 9, Optimization 1990. The proceeds Project of(AWSOP), the Loan withwere MWSS used to asfund the the thePhilippine approved Government fare is different and LRMC from the are formula obligated specified to substantially on the concession keep the other agreement, party whole, both the depending implementingimplementation agency. of the AngatPrior to Water privatization, Supply Optimization actual drawdowns Project from (AWSOP), the Loan with were MWSS recorded as theby Philippineon whether Government the actual fares and represent LRMC are a deficit obligated or a to surplus. substantially keep the other party whole, depending MWSSimplementing as equity agency. from Priorthe Government to privatization, while actual the draws drawdowns during privatizationfrom the Loan were were assumed recorded and by paid on whether the actual fares represent a deficit or a surplus. byMWSS the Concessionaires. as equity from the The Government sharing is 61.83% while the and draws 38.17% during for privatizationMaynilad and were Manila assumed Water, and paid Rehabilitation of the existing system is on-going. Construction of the Cavite Extension Basic Right of respectively.by the Concessionaires. The sharing is 61.83% and 38.17% for Maynilad and Manila Water, RehabilitationWay (ROW) Package of the existing 1 commenced system isin on-going.April 2019. Construction The Basic ROW of the PackagesCavite Extension 2 and 3 haveBasic not Right yet ofbeen respectively. Wayprovided (ROW) by the Package Grantors. 1 commenced As at March in April19, 2021, 2019. construction The Basic activitiesROW Packages for the LRT-12 and 3 Cavitehave not Extension yet been On June 6, 2019, Maynilad received a letter from the MWSS requesting to pay =821P million providedproject are by in the various Grantors. stages As of at development. March 19, 2021, construction activities for the LRT-1 Cavite Extension (“InvoicedOn June 6, Amount”).2019, Maynilad Accordingly, received Maynilada letter from learned the MWSS that the requesting drawdowns to madepay =821P on the million JBIC Loan project are in various stages of development. prior(“Invoiced to the Amount”).privatization Accordingly, of MWSS’s Maynilad operations learned are considered that the drawdowns loans and not made equity on theas formerlyJBIC Loan Claims with Grantors. Aside from the payment of concession fees (see Note 17), other significant advised.prior to the MWSS’s privatization request of for MWSS’s the Concessionaires operations are to considered pay was triggered loans and by not an equityinstruction as formerly from the Claimscommitments with Grantors. under or thatAside are from related the to payment the LRT-1 of concession concession fees agreement (see Note follow: 17), other significant DOFadvised. to the MWSS’s Bureau request of Treasury, for the to Concessionaires have the Concessionaires to pay was reimburse triggered bythe an Government instruction forfrom the the commitments under or that are related to the LRT-1 concession agreement follow: latter’sDOF to payments the Bureau on of the Treasury, JBIC Loan. to have the Concessionaires reimburse the Government for the The Section 5 of the LRT-1 Concession Agreement provides for conditions and mechanisms that will latter’s payments on the JBIC Loan. Theensure Section and thereby 5 of the compel LRT-1 the Concession parties to Agreementfulfill their providesobligations for in conditions relation to and LRT-1 mechanisms Concession. that will In Maynilad replied to MWSS on July 1, 2019 and clarified the Invoiced Amount. Maynilad’s position ensurethe event and of thereby failure compelto meet the partiesconditions to fulfill set forth their therein, obligations the parties in relation to the to agreement LRT-1 Concession. are accorded In isMaynilad to pay only replied P=677 to millionMWSS becauseon July 1,(ii) 2019 Maynilad and clarified remitted the to Invoicedthe MWSS Amount. P=113 million Maynilad’s representing position thewith event rights, of includingfailure to rightsmeet the to compensationconditions set fromforth thetherein, party/parties the parties in tobreach. the agreement For the LRMC are accorded as the Guaranteeis to pay only Fees P=677 based million on MWSS’s because invoice. (ii) Maynilad However, remitted the JBICto the Loan MWSS makes P=113 no million reference representing to and does withConcessionaire, rights, including the LRT-1 rights Concession to compensation Agreement from theprovides party/parties for the infollowing breach. claimsFor the from LRMC the as the notGuarantee include Fees the paymentbased on of MWSS’s Guarantee invoice. Fees, theHowever, borrower the being JBIC the Loan Government makes no referenceitself. This to beingand does the Concessionaire,Grantors: the LRT-1 Concession Agreement provides for the following claims from the case,not include the Guarantee the payment Fees ofthat Guarantee Maynilad Fees, remitted the borrower to MWSS being must the be Governmentset off or applied itself. against This being the the Grantors: Invoicedcase, the GuaranteeAmount; and Fees (2) that while Maynilad Maynilad remitted always to pays MWSS the mustforeign be exchangeset off or shortfallapplied against in the debt the ƒ Existing System Requirement (ESR) costs. LRMC is entitled to be compensated for the servicingInvoiced Amount;of MWSS-contracted and (2) while loans, Maynilad there always is no need pays for the Maynilad foreign exchange to pay the shortfall Forex Shortfall in the debt of ƒ Existingunavoidable System incremental Requirement cost (ESR)that LRMC costs. will LRMC incur is to entitled restore to the be Existing compensated System for to the the level P=31servicing million of inMWSS-contracted the JBIC Loan catch-up loans, there payment. is no needThe differencefor Maynilad in the to payforeign the Forexexchange Shortfall rate (from of unavoidablenecessary to incrementalmeet all of the cost baseline that LRMC Existing will System incur to Requirements, restore the Existing taking System into consideration to the level any JapaneseP=31 million Yen in to the Philippine JBIC Loan Peso) catch-up has already payment. been The captured difference and reflectedin the foreign in the exchange total peso rate amount (from necessaryEmergency to Upgrade meet all Contractof the baseline executed Existing by the System Grantors Requirements, for the same takingpurpose, into if considerationthe Existing any billedJapanese by theYen Bureau to Philippine of Treasury. Peso) has already been captured and reflected in the total peso amount EmergencySystem does Upgrade not meet Contract the ESR executed as certified by bythe theGrantors Independent for the Consultantsame purpose, (IC). if the Existing billed by the Bureau of Treasury. System does not meet the ESR as certified by the Independent Consultant (IC). *SGVFSM006036* *SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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Further, Maynilad also requested to pay =677P million in eight monthly instalments of =84.6P million to Further,commence Maynilad in July also2019 requested until February to pay 2020, =677P to million coincide in eightwith themonthly full payment/ instalments maturity of =84.6P of themillion JBIC to commenceLoan. in July 2019 until February 2020, to coincide with the full payment/ maturity of the JBIC Loan. As communicated by MWSS-Finance on July 17, 2019, Maynilad can pay based on the requested Asamount communicated and schedule by whileMWSS-Finance waiting for on the July response 17, 2019, of the Maynilad Bureau canof Treasury pay based concerning on the requested the amountguarantee and fee schedule and shortfall. while Mayniladwaiting for paid the theresponse first installment of the Bureau on July of Treasury 30, 2019. concerning the guarantee fee and shortfall. Maynilad paid the first installment on July 30, 2019. The last installment for JBIC Loan was paid in February 18, 2020. As at March 19, 2021, Bureau of TheTreasury last installment has yet to respond for JBIC to Loan the Company’s was paid in letter February concerning 18, 2020. the Asguarantee at March fee 19, and 2021, shortfall. Bureau of Treasury has yet to respond to the Company’s letter concerning the guarantee fee and shortfall. Rail Rail Concession Agreement – LRMC’s LRT-1 Project. On October 2, 2014, LRMC signed together with the ConcessionDOTC (now Agreement DOTr) and – theLRMC’s Light RailLRT-1 Transit Project Authority. On October (LRTA) 2, 2014,(together LRMC with signed DOTr together as “Grantors”) with the DOTCthe Concession (now DOTr) Agreement and the for Light the RailLRT-1 Transit Cavite Authority Extension (LRTA) and Operations (together &with Maintenance DOTr as “Grantors”) Project the(LRT-1 Concession Project). Agreement The DOTr for and the LRTA LRT-1 formally Cavite Extensionawarded the and Project Operations to LRMC & Maintenance on September Project 15, 2014. (LRT-1Under the Project). Concession The DOTrAgreement, and LRTA LRMC formally will operate awarded and themaintain Project the to existingLRMC onLRT-1 September and construct 15, 2014. an Under11.7-km the extension Concession from Agreement, the present LRMC end-point will at operate Baclaran and to maintain the Niog the area existing in Bacoor, LRT-1 Cavite. and construct A total of an 11.7-kmeight (8) extensionnew stations from will the be present built along end-point the extension, at Baclaran which to the traverses Niog area the incities Bacoor, of Parañaque Cavite. A and total Las of eightPiñas (8)up newto Bacoor, stations Cavite. will be The built Concession along the extension, Agreement which is for traverses a period ofthe thirty-two cities of Parañaque (32) years and Las Piñascommencing up to Bacoor, from September Cavite. The 12, Concession 2015 (the Effective Agreement Date). is for a period of thirty-two (32) years commencing from September 12, 2015 (the Effective Date). LRMC has the right to apply for an adjustment of the fare based on the specific fare adjustment formula LRMCunder LRMC’s has the rightconcession to apply agreement for an adjustment with the Philippineof the fare Government.based on the specific This formula fare adjustment specifies anformula initial underboarding LRMC’s and per-kilometer concession agreementfare with 10.25% with the increases Philippine over Government. these initial Thisfares formula every two specifies (2) years an initial boardingbeginning and in Augustper-kilometer 2016, subject fare with to inflation10.25% increases rebasing overif inflation these initialfalls outside fares every an acceptable two (2) years band. If beginningthe approved in Augustfare is different 2016, subject from tothe inflation formula rebasing specified if on inflation the concession falls outside agreement, an acceptable both the band. If thePhilippine approved Government fare is different and LRMC from the are formula obligated specified to substantially on the concession keep the other agreement, party whole, both the depending Philippineon whether Government the actual fares and represent LRMC are a deficit obligated or a to surplus. substantially keep the other party whole, depending on whether the actual fares represent a deficit or a surplus. Rehabilitation of the existing system is on-going. Construction of the Cavite Extension Basic Right of RehabilitationWay (ROW) Package of the existing 1 commenced system isin on-going.April 2019. Construction The Basic ROW of the PackagesCavite Extension 2 and 3 haveBasic not Right yet ofbeen Wayprovided (ROW) by the Package Grantors. 1 commenced As at March in April19, 2021, 2019. construction The Basic activitiesROW Packages for the LRT-12 and 3 Cavitehave not Extension yet been providedproject are by in the various Grantors. stages As of at development. March 19, 2021, construction activities for the LRT-1 Cavite Extension project are in various stages of development. Claims with Grantors. Aside from the payment of concession fees (see Note 17), other significant Claimscommitments with Grantors. under or thatAside are from related the to payment the LRT-1 of concession concession fees agreement (see Note follow: 17), other significant commitments under or that are related to the LRT-1 concession agreement follow: The Section 5 of the LRT-1 Concession Agreement provides for conditions and mechanisms that will Theensure Section and thereby 5 of the compel LRT-1 the Concession parties to Agreementfulfill their providesobligations for in conditions relation to and LRT-1 mechanisms Concession. that will In ensurethe event and of thereby failure compelto meet the partiesconditions to fulfill set forth their therein, obligations the parties in relation to the to agreement LRT-1 Concession. are accorded In thewith event rights, of includingfailure to rightsmeet the to compensationconditions set fromforth thetherein, party/parties the parties in tobreach. the agreement For the LRMC are accorded as the withConcessionaire, rights, including the LRT-1 rights Concession to compensation Agreement from theprovides party/parties for the infollowing breach. claimsFor the from LRMC the as the Concessionaire,Grantors: the LRT-1 Concession Agreement provides for the following claims from the Grantors: ƒ Existing System Requirement (ESR) costs. LRMC is entitled to be compensated for the ƒ Existingunavoidable System incremental Requirement cost (ESR)that LRMC costs. will LRMC incur is to entitled restore to the be Existing compensated System for to the the level unavoidablenecessary to incrementalmeet all of the cost baseline that LRMC Existing will System incur to Requirements, restore the Existing taking System into consideration to the level any necessaryEmergency to Upgrade meet all Contractof the baseline executed Existing by the System Grantors Requirements, for the same takingpurpose, into if considerationthe Existing any EmergencySystem does Upgrade not meet Contract the ESR executed as certified by bythe theGrantors Independent for the Consultantsame purpose, (IC). if the Existing System does not meet the ESR as certified by the Independent Consultant (IC). *SGVFSM006036* *SGVFSM006036*

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ƒ Structural Defect Restoration (SDR) costs. LRMC is entitled to compensation for the cost ƒ Structuralincurred for Defect restoration Restoration of the Structural(SDR) costs. Defect LRMC as certified is entitled by to an compensation IC which shall for be the the cost aggregate incurredof the approved for restoration Restoration of the Cost Structural in the Structural Defect as Defectscertified Notice by an ICand which any incremental shall be the cost aggregate ofapproved the approved by the RestorationIC. Cost in the Structural Defects Notice and any incremental cost approved by the IC. ƒ Light Rail Vehicle (LRV) shortfall. If the Grantors do not make available a minimum of one ƒ Lighthundred Rail (100) Vehicle light (LRV) rail vehicles shortfall. or theIf the system Grantors is not do able not tomake operate available to a cycle a minimum time of ofno one more hundredthan one (100)hundred light and rail six vehicles (106) minutes, or the system or a combination is not able to of operate the two to on a thecycle Effective time of Date,no more then thanLRMC one is hundred entitled andto receive six (106) a compensation minutes, or a fromcombination the Grantors of the based two onon thethe Effectiveformula and Date, then LRMCprocedures is entitled provided to receivefor in the a compensation LRT-1 Concession from theAgreement. Grantors based on the formula and procedures provided for in the LRT-1 Concession Agreement. ƒ Fare Deficit/Surplus. The fare deficit/surplus pertains to the difference between the Approved ƒ Fareand Notional Deficit/Surplus. Fare, as follows:The fare deficit/surplus pertains to the difference between the Approved and Notional Fare, as follows: a) If Approved Fare is less than the Notional Fare, there is a deficit payment or a receivable a) Iffrom Approved the Grantors; Fare is less than the Notional Fare, there is a deficit payment or a receivable from the Grantors; b) If Approved Fare is more than the Notional Fare, there is a surplus payment or payable to b) IfGrantors. Approved Fare is more than the Notional Fare, there is a surplus payment or payable to Grantors. The Approved Fare is the maximum fare that the Concessionaire is authorized to charge pursuant Theto Sections Approved 20.3b Fare and/or is the 30.4 maximum of the LRT-1fare that Concession the Concessionaire Agreement. is authorized Whereas, tothe charge Notional pursuant Fare tois theSections agreed 20.3b base and/orfare provided 30.4 of inthe the LRT-1 LRT-1 Concession Concession Agreement. Agreement Whereas, that should the have Notional been Farein iseffect the agreedupon turnover base fare of provided the LRT-1 in operation.the LRT-1 Concession Agreement that should have been in effect upon turnover of the LRT-1 operation. ƒ Grantors’ Compensation Payment. The Grantors shall be liable to provide compensation to ƒ LRMCGrantors’ if LRMC Compensation is delayed Payment. in the completionThe Grantors of the shall Railway be liable Infrastructure to provide compensationand Railway System to LRMCWorks orif LRMCis prevented is delayed from operatingin the completion any part of of the the Railway System orInfrastructure incurs additional and Railway cost or lossSystem of Worksrevenue or by is reasonprevented of: from operating any part of the System or incurs additional cost or loss of revenuea) Material by reason Adverse of: Government Action a)b) MaterialGrantors AdverseDelay Event Government Action b)c) GrantorsSubject to Delay Sec. 5.3(b)Event Grantors Obligations, the failure of the Existing System to meet the c) SubjectExisting to System Sec. 5.3(b) Requirement Grantors on Obligations, the Effective the Date failure of the Existing System to meet the d) ExistingAny other System cause inRequirement respect of whichon the the Effective LRT-1 Date Concession Agreement provides for the d) Anyprovision other ofcause Grantors in respect compensation of which the LRT-1 Concession Agreement provides for the provision of Grantors compensation Under Section 20.6 of the LRT-1 Concession Agreement, all these claims are expressed to be paid Underthrough Section the quarterly 20.6 of “Balancing the LRT-1 Payments”Concession (see Agreement, Note 30). all these claims are expressed to be paid through the quarterly “Balancing Payments” (see Note 30). IC for the Concession. In September 2015, DOTr and LRMC have engaged Egis Rail – Egis ICInternational for the Concession. – Getinsa InIngenieria September SL 2015, – Infra DOTr Consultants and LRMC of the have Philippines engaged –Egis Heldig Rail Teknik – Egis Inc. Joint InternationalVenture as IC – to Getinsa carry out Ingenieria the duties SL and – Infra obligations Consultants ascribed of the in Philippinesthe Concession – Heldig Agreement. Teknik Inc.This Joint Ventureincludes, as but IC not to carrylimited out to, the monitor, duties andinspect obligations and keep ascribed informed in the stateConcession and progress Agreement. of remedial This includes,works, issue but certificationnot limited to, of monitor,compliance inspect with andthe keepexisting informed system the requirements, state and progress and conduct of remedial annual works,audit of issue the quality certification control of documentation. compliance with The the fees existing and expensessystem requirements, of the IC shall and be conduct paid 50% annual by the auditGrantors of the and quality 50% by control the LRMC. documentation. The fees and expenses of the IC shall be paid 50% by the Grantors and 50% by the LRMC. LRMC Non-Rail Activities. In November 2015, LRMC granted PHAR Singapore Pte. Ltd the LRMCexclusive Non-Rail right to Activities. generate ancillary In November revenue 2015, from LRMC all agreed granted commercial PHAR Singapore activities Pte. (i.e., Ltd advertising, the exclusivepartnerships, right and to sponsorships)generate ancillary within revenue the existing from all LRT-1 agreed system. commercial The effectivity activities (i.e.,of granted advertising, rights partnerships,commenced on and February sponsorships) 1, 2016 within and will the beexisting in effect LRT-1 for a system. period of The ten effectivity (10) years. of LRMC granted earns rights a commencedprofit share fromon February these revenues 1, 2016 in and exchange will be infor effect the rights for a granted.period of ten (10) years. LRMC earns a profit share from these revenues in exchange for the rights granted. *SGVFSM006036* *SGVFSM006036*

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LRMC also has operating lease agreements as a lessor with various companies for retail space rental LRMCand interconnection also has operating services. lease These agreements agreements as a coverlessor periodswith various ranging companies from 1 to for 26 retail years. space rental and interconnection services. These agreements cover periods ranging from 1 to 26 years. Rent income, interconnection and advertising fees earned relevant to these agreements amounted to RentP=106 income,million, interconnection=163P million and and P=154 advertising million infees 2020, earned 2019 relevant and 2018, to these respectively, agreements and amounted are included to P=106under million,“Others” =163P in the million consolidated and P=154 statements million in of 2020, comprehensive 2019 and 2018,income respectively, (see Note 24). and are included under “Others” in the consolidated statements of comprehensive income (see Note 24). Escrow Agreement. On October 20, 2014, pursuant to the requirements of the LRT-1 Concession EscrowAgreement, Agreement. DOTr, LRTA,On October LRMC, 20, the2014, initial pursuant shareholders to the requirements of LRMC (namely of the LRT-1AC Infra, Concession MPLRC and Agreement,MIHPL) and DOTr, Security LRTA, Bank LRMC, as Escrow the Agentinitial shareholdersentered into aof Share LRMC Escrow (namely Agreement. 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 UnderAgent originalthe Share stock Escrow certificates Agreement, representing each of theall ofinitial their shareholders respective equity delivers interests to the inShare LRMC. Escrow Such Agentshares originalwould be stock held certificatesin escrow until representing the third allanniversary of their respective of the Extension equity interests Completion in LRMC. Date as Such sharesdefined would under be the held LRT-1 in escrow Concession until theAgreement. third anniversaryConsultancy of the and Extension Advisory Completion Fees. In October Date as 2014, LRMCdefined enteredunder the into LRT-1 offshore Concession and onshore Agreement. technicalConsultancy advisory service and Advisory agreements Fees. with In RATPOctober 2014, LRMCDeveloppement entered into SA offshoreand RATP and Dev onshore Manila, technical Inc. in advisoryrelation to service the LRT-1 agreements Project. with Scope RATP of work Developpementincludes providing SA regular and RATP reviews Dev of Manila, the operation Inc. in relationand maintenance to the LRT-1 of the Project. LRT-1 Scopewith respect of work to the includesoverall performance providing regular of the reviewssystem, operationsof the operation and maintenance and maintenance budget, of ridershipthe LRT-1 data with and respect Baseline to the overallSystem performancePlan. of the system, operations and maintenance budget, ridership data and Baseline System Plan. Rehabilitation of Existing System. On March 21, 2017, LRMC entered into a two-year agreement Rehabilitationwith First Balfour, of Existing Inc. for System. its Structural On March Restoration 21, 2017, Project LRMC which entered includes into thea two-year parapets, agreement faulty withconcrete First and Balfour, repair Inc.of river for its bridges Structural of the Restoration LRT-1 Existing Project System. which includesThe notice the to parapets, proceed faulty was signed concreteand issued and on repair March of 17, river 2017. bridges In line of thewith LRT-1 this project, Existing LRMC System. also The signed notice an Independentto proceed was signed andContractor issued onAgreement March 17, with 2017. ESCA In lineIncorporated with this project,for the expertise LRMC also and signed services an necessary Independent in managing Contractorthe Structural Agreement Restoration with Project ESCA with Incorporated First Balfour, for the Inc expertise (FBI). The and structural services necessary restoration in project managing was thecompleted Structural on RestorationJune 28, 2019. Project In reference with First to Balfour, the original Inc (FBI).contract, The LRMC structural engaged restoration FBI and project ESCA was for completedvarious additional on June works 28, 2019. for Tripa In reference bridges topot the bearing original replacement, contract, LRMC additional engaged faulty FBI concrete and ESCA and for variousdamages additional caused by works April for22, Tripa 2019 bridgesearthquake, pot bearing which started replacement, on September additional 16, faulty 2019. concreteDue to the and damagesCOVID-19 caused pandemic, by April Tripa 22, bridge 2019 earthquake, 2 works were which deferred started to on2021. September All other 16, works 2019. scoped Due to in the this COVID-19contract were pandemic, completed Tripa in March bridge 2020. 2 works were deferred to 2021. All other works scoped in this contract were completed in March 2020. On January 12, 2018, LRMC entered into an agreement with Voith Digital Solutions Austria GmBH Onand JanuaryCo KG for12, the2018, rehabilitation LRMC entered and upgradeinto an agreement of propulsion, with train Voith control Digital and Solutions management Austria systems GmBH of andthe LRT-1Co KG generation for the rehabilitation 2 (Adtranz) and trains. upgrade The ofre-engineering propulsion, train project control is 99.03 and %management complete as systems at of Decemberthe LRT-1 31,generation 2020. 2 (Adtranz) trains. The re-engineering project is 99.03% complete as at December 31, 2020. On October 24, 2018, LRMC entered into an agreement with First Balfour, Inc. and Mrail, Inc. for Onthe Octoberrehabilitation 24, 2018, of eleven LRMC rectifier entered sub-stations into an agreement (RSS) of with LRT-1 First line. Balfour, On the Inc. same and date, Mrail, LRMC Inc. for thesigned rehabilitation a contract withof eleven Commsec rectifier Inc. sub-stations for the design, (RSS) supply, of LRT-1 and installation line. On the of same CCTV, date, access LRMC control, signedand security a contract network with systems Commsec of theInc. LRT-1 for the line. design, As supply,at December and installation 31, 2020, theof CCTV, RSS rehabilitation access control, and security network systems projectsof the LRT-1 are 90.61 line. % As and at 98.2December% complete, 31, 2020, respectively. the RSS rehabilitation and security network systems projects are 90.61% and 98.2% complete, respectively. LRMC also has contracts with various suppliers for the purchase of spare parts used in restoration of LRMCLRVs and also with has contractorscontracts with for variousrefurbishments, suppliers installations for the purchase and improvements of spare parts inused the in structure restoration of the of LRVsstations. and with contractors for refurbishments, installations and improvements in the structure of the stations.

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Construction of the LRT-1 Cavite Extension. On February 11, 2016, LRMC signed an engineering, Constructionprocurement, ofand the construction LRT-1 Cavite (EPC) Extension. AgreementOn Februaryfor the construction 11, 2016, LRMC of LRT-1 signed Cavite an engineering,Extension procurement,with Bouygues and Travaux construction Publics (EPC) Philippines Agreement Inc., Alstomfor the construction Transport S.A. of LRT-1and Alstom Cavite Transport Extension withConstruction Bouygues Philippines Travaux Publics Inc. which Philippines commenced Inc., uponAlstom the Transport Grantors’ S.A. issuance and Alstom of the Permit Transport to Enter Constructioncertificate. As Philippines at December Inc. 31, which 2020, commenced the Existing upon System the Grantors’ Works and issuance Cavite ofExtension the Permit Works to Enter certificate.(ROW 1) are As 74.3 at December% and 47.0 31,% complete, 2020, the respectively.Existing System Works and Cavite Extension Works (ROW 1) are 74.3% and 47.0% complete, respectively. Common Station. On February 13, 2019, the DoTR signed the contract for the development of the CommonUnified Common Station. StationOn February (UCS) 13, which 2019, will the provide DoTR signeda connection the contract between for LRT-1, the development MRT-3, MRT-7 of the Unifiedand the MetroCommon Manila Station Subway. (UCS) As which part willof the provide Existing a connection System signaling between work, LRT-1, the MRT-3,EPC Contractor MRT-7 andmust the make Metro provision Manila for Subway. the UCS As signaling part of the requirements Existing System to allow signaling the provision work, theof aEPC signaling Contractor system mustassociated make with provision Roosevelt for the Station UCS signalingand the turnback requirements track upto to,allow and the including, provision the of Switch a signaling 17 in system its associatednew location. with Starting Roosevelt September Station and5, 2020, the turnback LRMC temporarilytrack up to, closedand including, Roosevelt the station Switch to 17 enable in its the newUCS location. contractor Starting to facilitate September Switch 5, 17 2020, relocation LRMC works. temporarily As at closedMarch Roosevelt19, 2021, thestation provision to enable of the UCSSwitch contractor 17 by the to UCS facilitate Contractor Switch has 17 beenrelocation delayed. works. This Asprevents at March LRMC 19, 2021from, revertingthe provision to revenue of Switchoperation 17 in by Roosevelt the UCS Contractorstation, and has proportionately been delayed. delays This prevents completion LRMC of the from new reverting signaling to system revenue operationand therefore in Roosevelt the testing, station, commissioning and proportionately and operation delays of comp the Grantors-procuredletion of the new signaling LRVs. system and therefore the testing, commissioning and operation of the Grantors-procured LRVs. Logistics Logistics On June 14, 2018, MMI signed an agreement with The Property Company of Friends, Inc. (Seller) for Onthe Juneacquisition 14, 2018, of parcels MMI signed of land an with agreement an aggregate with Thesize Propertyof 202 thousand Company square of Friends, meters. Inc. The (Seller) property, for thewith acquisition a total cost of of parcels =1.015P of billion land with (exclusive an aggregate of applicable size of input202 thousand and withholding square meters. taxes), shallThe property, be used by withMMI a to total develop cost ofand =1.015P manage billion distribution (exclusive centers of applicable for its existing input and withholdingpotential clients taxes), in the shall fast be moving used by MMIconsumer to develop goods, andconsumer manage durables, distribution automotive centers forand its e-commerce existing and spaces. potential On clients July 13, in 2018,the fast the moving parties consumerentered into goods, a deed consumer of absolute durables, sale with automotive MMI paying and e-commerceP=556 million spaces. (inclusive On ofJuly VAT 13, net 2018, of EWT)the parties of enteredthe acquisition into a deed cost. of As absolute of December sale with 31, MMI 2019, paying MMI hasP=556 already million paid (inclusive the Seller of VATan aggregate net of EWT) amount of of theP=586.95 acquisition million cost. (inclusive As of Decemberof VAT and 31, net 2019, of EWT). MMI hasThe already remaining paid balance the Seller amounting an aggregate to amount of P=586.95P=499.74 million shall(inclusive be settled of VAT upon and Seller’s net of fullEWT). compliance The remaining with the balance conditions amounting set, including to but not P=499.74limited to, million the execution shall be ofsettled the corresponding upon Seller’s fullDeed compliance of Absolute with Sale. the Theconditions remaining set, balanceincluding amounting but not limitedto =499.74P to, the million execution shall beof thesettled corresponding upon the Seller’s Deed offull Absolute compliance Sale. with The the remaining conditions balance set, particularly amounting tothe =499.74P submission million of the shall conversion be settled and/or upon theexemption Seller’s orders full compliance from the Department with the conditions of Agrarian set, particularlyReform. As theof December submission 31, of 2020, the conversion these conditions and/or areexemption yet to be orders fully compliedfrom the Department with by the ofSeller. Agrarian Reform. As of December 31, 2020, these conditions are yet to be fully complied with by the Seller. On December 19, 2018, MMI signed an agreement with various individual sellers (Sellers) for the Onacquisition December of parcels19, 2018, of MMIland with signed an anaggregate agreement size with of 219 various thousand individual square sellers meters. (Sellers) The property, for the acquisitionwith a total ofcost parcels of P=204 of landmillion with (exclusive an aggregate of applicable size of 219 input thousand and withholding square meters. taxes), The shall property, be used withby MMI a total to developcost of P=204 and manage million distribution(exclusive of centers applicable for its input existing and withholdingand potential taxes), clients shall in the be fast used bymoving MMI consumer to develop goods, and manage consumer distribution durables, centers automotive for its and existing e-commerce and potential spaces. clients The partiesin the fastalso movingentered intoconsumer a contract goods, to sellconsumer agreement durables, with MMIautomotive paying and P=206 e-commerce million (inclusive spaces. ofThe VAT parties net alsoof enteredEWT) of into the a acquisition contract to cost.sell agreement The remaining with MMIoutstanding paying portion P=206 million shall be (inclusive settled upon of VAT completion net of of EWT)the transfer of the documents. acquisition As cost. of December The remaining 31, 2019, outstanding MMI has portion already shall paid be the settled Sellers upon an completionaggregate of theamount transfer of P=163.17 documents. million As ofpursuant December to the 31, CTS. 2019, The MMI remaining has already balance paid amounting the Sellers to an P=41.62 aggregate million amountshall be ofsettled P=163.17 upon million the Sellers’ pursuant full tocompliance the CTS. Thewith remaining the conditions balance set, amounting including butto P=41.62 not limited million to, shallthe execution be settled of upon the corresponding the Sellers’ full deeds compliance of absolute with sale. the conditions As of December set, including 31, 2020, but these not limited to, theconditions execution are ofyet the to correspondingbe fully complied deeds with of byabsolute the Sellers. sale. As of December 31, 2020, these conditions are yet to be fully complied with by the Sellers. Land Lease. On February 5, 2020, MMI entered into a twenty-five (25) year lease covering Landapproximately Lease. On 52,751 February square 5, 2020,meters MMI located entered in Sta. into Rosa, a twenty-five Laguna. MMI(25) year intends lease to covering build a dry goods approximatelyand refrigerated 52,751 warehouse square facility meters on located the site in which Sta. Rosa, is targeted Laguna. to be MMI operational intends toby build 2021. a Thedry goodslease andhas arefrigerated commencement warehouse date of facility February on the16, site 2020 which and expiringis targeted on to February be operational 15, 2045. by 2021.The lease The islease hassubject a commencement to escalation provisions date of February and adjustment 16, 2020 in and accordance expiring onto marketFebruary rent 15, rate 2045. subject The to lease rent is subject to escalation provisions and adjustment in accordance to market rent rate subject to rent *SGVFSM006036* *SGVFSM006036*

210 - 102 - - 102 - review on the tenth anniversary and ten years thereafter. MMI paid an upfront fee of P=34.8 million andreview recognized on the tenth ROU anniversary asset of P=489.0 and ten million years asthereafter. at lease commencement MMI paid an upfront date. MMI fee of was P=34.8 granted million a andrent-free recognized period ROUfrom assetFebruary of P=489.0 2020 andmillion rental as paymentat lease commencementwill start in August date. 2022. MMI was granted a rent-free period from February 2020 and rental payment will start in August 2022. As at March 19, 2021, design works for the warehouse facility has been completed and pre- constructionAs at March 19,is ongoing, 2021, design including works securing for the thewarehouse necessary facility permits has and been clearances completed required and pre- prior to the constructioncommencement is ongoing, of construction. including securing the necessary permits and clearances required prior to the commencement of construction. Others Others Substrate Conversion Agreements (SCA). On November 19, 2018, MetPower Ventures Partners SubstrateHoldings, ConversionInc. (MVPHI), Agreements through Surallah(SCA). OnBiogas November Ventures 19, Corp., 2018, finalizedMetPower and Ventures signed thePartners SCA with Holdings,Dole Philippines, Inc. (MVPHI), Inc. (DPI) through to design, Surallah construct, Biogas and Ventures operate Corp., biogas finalized facilities and specifically signed the for SCA DPI with Dole(the Project). Philippines, MPIC Inc. has (DPI) earmarked to design, about construct, =1.0P billion and operate for this biogas project. facilities This project specifically involves for DPI (theestablishing Project). integrated MPIC has waste-to-energy earmarked about (WTE) =1.0P billionfacilities for to this primarily project. address This project the waste involves disposal establishingconcerns of DPIintegrated and to waste-to-energyuse the derived biogas(WTE) from facilities the processing to primarily of addressthe fruit the waste waste to supplydisposal a concernsportion of of the DPI diesel and andto use power the derivedrequirements biogas of from the canneriesthe processing of DPI of inthe Surallah fruit waste and toPolomok, supply a both portionlocated inof Souththe diesel Cotabato. and power The requirementsintegrated WTE of the facility, canneries consisting of DPI of in a Surallah biogas plant and Polomok,and an both locatedembedded in Southpower Cotabato. generation The facility integrated shall be WTE established, facility, consistingowned and of operated a biogas by plant a special and an purpose embeddedcompany within power the generation facilities facility of the end-user.shall be established, owned and operated by a special purpose company within the facilities of the end-user. As at March 19, 2021, the Dole Project is under construction. As at March 19, 2021, the Dole Project is under construction. On October 4, 2019, ITOCHU Corporation (ITOCHU; the parent company of ITOCHU Singapore OnPte OctoberLtd.) filed 4, an2019, application ITOCHU with Corporation the Japanese (ITOCHU; Ministry the of parentEnvironment company (“MOE”) of ITOCHU under Singapore the JCM PteProgram, Ltd.) filedusing an the application Project. ITOCHU with the Japanese Singapore Ministry Pte Ltd. of (ITOCHU Environment Singapore) (“MOE”) as atunder the JCM Program,January 30, using 2020 the is Project.a shareholder ITOCHU in SBVC Singapore at 10% Pte equity Ltd. (ITOCHUownership. Singapore) The JCM asProgram at encourages Januaryprojects 30,to use 2020 low is carbon a shareholder technologies in SBVC and atinfrastructure 10% equity ownership.that contribute The to JCM sustainable Program development encourages projectsin developing to use countries low carbon such technologies as the Philippines. and infrastructure The Japanese that Governmentcontribute to providessustainable grants development in the inform developing of cash with countries no interest such asor therepayment Philippines. terms, The to financeJapanese facilities Government and equipment provides grantsthat will in reducethe formcarbon of dioxide cash with from no theinterest environment. or repayment As a terms, condition to finance of the facilitiesgrant, the and MOE equipment takes portion that will of the reduce JCM carbonCarbon dioxideReduction from Credits the environment. and delivers Asthis a tocondition the Japanese of the Government grant, the MOE to help takes Japan portion achieve of the its JCM Carbonoverall emissionsReduction reduction Credits and targets. delivers this to the Japanese Government to help Japan achieve its overall emissions reduction targets. Because the application needs to be completed and submitted by a Japanese entity, ITOCHU is the Becausemain Project the application Participant needswith MVPHI to be completed and SBVC and as submitted Partner Participants. by a Japanese entity, ITOCHU is the main Project Participant with MVPHI and SBVC as Partner Participants. ITOCHU, ITOCHU Singapore and ITOCHU Corp. Manila Branch (collectively, the “ITOCHU ITOCHU,Parties”), MVPHI ITOCHU and Singapore SBVC entered and ITOCHU into an “AgreementCorp. Manila on Branch JCM Model (collectively, Project” the which “ITOCHU provisions Parties”),included among MVPHI others: and SBVC (i) internal entered procedure into an “Agreement and mechanism on JCM to allocate Model certainProject” responsibilities which provisions in includedorder to effectively among others: apply (i) for internal and implement procedure the and JCM mechanism Model Project; to allocate (ii) allocationcertain responsibilities of the subsidy in orderbetween to effectivelyMVPHI (60% apply of forthe andsubsidy) implement and ITOCHU the JCM Parties Model (40%);Project; and (ii) (iii) allocation in case ofthe the MOE subsidy betweenrequires returnMVPHI of (60%the subsidy, of the subsidy)each party and is ITOCHUresponsible Parties for the (40%); return and of the(iii) subsidy in case inthe proportion MOE to requirestheir stipulated return ofallocation the subsidy, ratio. each party is responsible for the return of the subsidy in proportion to their stipulated allocation ratio. On October 29, 2019, the Grant Decision Notice was received by ITOCHU with an approved gross Onand Octobernet subsidy 29, 2019,amounting the Grant to JPY1,517,419,852 Decision Notice wasand JPY758,709,000,received by ITOCHU respectively. with an approved gross andOn Maynet subsidy 20, 2020, amounting MVPHI toreceived JPY1,517,419,852 its share of the and first JPY758,709,000, tranche of the JCMrespectively. Grant amounting to OnJPY254 May million20, 2020, (apprixmately MVPHI received =120P itsmillion) share furtherof the first cash tranche distributions of the JCMfrom Grantthe JCM amounting are expected to JPY254towards 2021million and (apprixmately 2022. =120P million) further cash distributions from the JCM are expected towards 2021 and 2022.

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As the JCM Grant requires the fulfilment of certain obligations, the amount received by MVPHI is recordedAs the JCM as deferredGrant requires income the under fulfilment ‘Other oflong-term certain obligations, liabilities’ account the amount and receivedshall be recognizedby MVPHI as is recordedincome over as deferred the life ofincome the Dole under Project ‘Other as long-termobligation liabilities’ to deliver accountcarbon credits and shall is fulfilled. be recognized as income over the life of the Dole Project as obligation to deliver carbon credits is fulfilled. Integrated Solid Waste Management Facility Project (ISWM Project). In March 2017, the consortiumIntegrated Solid consisting Waste of Management MPIC, Covanta Facility Energy, Project LLC (ISWM and Macquarie Project). Group,In March Ltd. 2017, was thegranted consortiumOriginal Proponent consisting Status of MPIC, (OPS) Covanta by The QuezonEnergy, CityLLC Government and Macquarie to design, Group, construct, Ltd. was grantedfinance, and operateOriginal an Proponent ISWM Project. Status (OPS)The ISWM by The facility Quezon will City be capableGovernment of processing to design, and construct, converting finance, up to and 3,000operate metric an ISWM tons perProject. day ofThe Quezon ISWM City’s facility municipal will be capable solid waste of processing into 42Mwe and of converting renewable up energy, to 3,000enough metric to power tons betweenper day of60,000 Quezon to 90,000 City’s municipalhomes. The solid ISWM waste Project into 42Mwewill be undertakenof renewable through energy, a Jointenough Venture to power between between QC 60,000 LGU and to 90,000 the consortium homes. The in accordance ISWM Project with will QC beLGU undertaken Ordinance: through No. a SP-2336,Joint Venture s. 2014 between (QC PPPQC LGUCode). and the consortium in accordance with QC LGU Ordinance: No. SP-2336, s. 2014 (QC PPP Code). As the original proponent of the ISWM Project, the consortium will have the exclusive rights to enter intoAs the detailed original negotiations proponent withof the the ISWM QC LGU. Project, Upon the successfulconsortium completion will have the of negotiations,exclusive rights the toISWM enter intoProject detailed will be negotiations subjected to with a competitive the QC LGU. challenge Upon successfulconsistent completionwith government of negotiations, regulations. the If ISWM and whenProject the will consortium be subjected is awarded to a competitive the ISWM challenge Project, consistentdevelopment with and government construction regulations. would take If and approximatelywhen the consortium three (3) is awardedto four (4) the years. ISWM It isProject, expected development that this project and construction will be funded would through take a combinationapproximately of three debt (3)and to equity. four (4) years. It is expected that this project will be funded through a combination of debt and equity. As at March 19, 2021, the Company is waiting for the issuance of the Notice of Award from the QuezonAs at March City 19,Government. 2021, the Company is waiting for the issuance of the Notice of Award from the Quezon City Government. Investment Agreement with Dusit International of Thailand (“Dusit”). On February 19, 2020, MPIC announcedInvestment Agreementthe signing withof a ₱Dusit1.6 billion International investment of Thailand agreement (“Dusit”) with Dusit. On to February develop 19,and 2020, manage MPIC announcedjointly hospitality the signing and residentialof a ₱1.6 billion properties investment in the Philippines. agreement withThe investmentDusit to develop agreement and manage was subject tojointly certain hospitality specific andperformance residential conditions properties precedent, in the Philippines. including The the approvalinvestment of agreementthe Philippine was subject Competitionto certain specific Commission performance (PCC). conditions Given the precedent, full impact including of COVID-19, the approval the application of the Philippine to PCC did not Competitionprogress. As Commissionat March 19, (PCC).2021, there Given are theno fullplans impact to continue of COVID-19, with this theagreement. application to PCC did not progress. As at March 19, 2021, there are no plans to continue with this agreement.

30. Contingencies 30. Contingencies Water Water Rate Rebasing: 2013-2017 Rate Rebasing: 2013-2017 ƒ 2013-2017 Rate Rebasing – Domestic Arbitration. MWSS released Board of Trustees Resolution ƒ No.2013-2017 2013-100-RO Rate Rebasing dated September – Domestic 12, Arbitration. 2013 and Regulatory MWSS released Office Board(RO) Resolution of Trustees No. Resolution 13-010- No.CA dated2013-100-RO September dated 10, September2013 on the 12, rate 2013 rebasing and Regulatory adjustment Office for the (RO) rate Resolutionrebasing period No. 13-010-2013 to 2017CA dated (Fourth September Rate Rebasing 10, 2013 Period) on the reducing rate rebasing Maynilad’s adjustment 2012 for average the rate all-in rebasing basic periodwater charge2013 to by2017 4.82% (Fourth or P=1.46 Rate Rebasingper cubic Period)meter (cu.m.) reducing or =0.29PMaynilad’s percu.m. 2012 over average the next all-in five basic years. water charge by 4.82% or P=1.46 per cubic meter (cu.m.) or =0.29P percu.m. over the next five years. On October 4, 2013, Maynilad filed its Dispute Notice before the Appeals Panel. This Dispute NoticeOn October is a referral 4, 2013, to Maynilad the Appeals filed Panel its Dispute for Major Notice Disputes before of the the Appeals dispute betweenPanel. This Maynilad, Dispute on theNotice one ishand, a referral and MWSS to the Appeals and the RO,Panel on for the Major other. Disputes The Dispute of the relates dispute to between the determination Maynilad, by on the RO,one hand,in accordance and MWSS with and Section the RO, 9.4.2 on ofthe the other. Concession The Dispute Agreement, relates ofto the Rebasingdetermination by theAdjustment RO, in accordance as embodied with in SectionResolution 9.4.2 No. of 13-010-CA.the Concession Agreement, of the Rebasing Adjustment as embodied in Resolution No. 13-010-CA.

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On December 17, 2013, the RO released Resolution No. 13-011-CA regarding the Onimplementation December 17, of 2013, a status the quo RO for released Maynilad’s Resolution Standard No. Rates13-011-CA and Foreign regarding Currency the Differential implementationAdjustments (FCDA) of a status for any quo and for all Maynilad’s its scheduled Standard adjustments Rates and until Foreign such time Currency that the Differential Appeals AdjustmentsPanel has issued (FCDA) its arbitral for any award. and all its scheduled adjustments until such time that the Appeals Panel has issued its arbitral award. On January 5, 2015, Maynilad officially received the Appeals Panel’s award dated OnDecember January 29, 5, 2015,2014 upholdingMaynilad officiallyMaynilad’s received alternative the Appeals Rebasing Panel’s Adjustment award for dated the Fourth Rate DecemberRebasing Period 29, 2014 of 13.41%upholding or itsMaynilad’s equivalent alternative of P=4.06 perRebasing cu.m. Adjustment(“First Award”). for the This Fourth increase Rate Rebasinghas effectively Period been of 13.41% reduced or to its P=3.06 equivalent per cu.m., of P=4.06 following per cu.m. the integration (“First Award”). of the This increase hasP=1.00 effectively Currency been Exchange reduced Rate to P=3.06Adjustment per cu.m., (CERA) following into the the basic integration water charge. of the To mitigate the P=1.00impact Currency of the tariff Exchange increase Rate on its Adjustment customers, (CERA) Maynilad into offered the basic to stagger water charge. its implementation To mitigate over the impacta three-year of the period. tariff increase on its customers, Maynilad offered to stagger its implementation over a three-year period. The First Award, being final and binding on the parties, Maynilad asked the MWSS to cause its TheBoard First of TrusteesAward, being to approve final andthe binding2015 Tariffs on the Table parties, so that Maynilad the same asked can the be MWSSpublished to andcause its Boardimplemented of Trustees 15 days to approve after its thepublication. 2015 Tariffs Table so that the same can be published and implemented 15 days after its publication. However, the MWSS and the RO have chosen, over Maynilad’s repeated objections, to defer the However,implementation the MWSS of the andFirst the Award RO have despite chosen, it being over final Maynilad’s and binding repeated on the objections, parties. In to its defer letter the implementationdated February 9, of 2015, the First the AwardMWSS despite and RO, it whobeing received final and their binding copy on of thethe parties.First Award In its on letter datedJanuary February 7, 2015, 9, informed 2015, the Maynilad MWSS and that RO, they who have received decided their to await copy the of thefinal First outcome Award of on their Januaryarbitration 7, 2015,with the informed other concessionaire, Maynilad that theyManila have Water decided Company, to await Inc. the (“Manila final outcome Water”), of their before arbitrationmaking any with official the otherpronouncements concessionaire, on the Manila applicable Water resulting Company, water Inc. rates (“Manila for the Water”), two before makingconcessionaires. any official pronouncements on the applicable resulting water rates for the two concessionaires. ƒ 2013-2017 Rate Rebasing – International Arbitration. On February 20, 2015, Maynilad wrote ƒ the2013-2017 Philippine Rate Government, Rebasing – throughInternational the Department Arbitratio n.of OnFinance February (DOF), 20, to2015, call Mayniladon the Undertaking wrote thewhich Philippine the Republic Government, of the Philippines through the (ROP) Department issued inof favorFinance of Maynilad(DOF), to on call July on 31,the 1997Undertaking and whichMarch the17, Republic2010. On of March the Philippines 9, 2015, Maynilad (ROP) issued again in wrote favor the of MayniladROP, through on July the 31,DOF, 1997 to and Marchreiterate 17, its 2010. demand On against March the9, 2015, Undertaking. Maynilad The again letters wrote dated the FebruaryROP, through 20 and the DOF, to reiterateMarch 9, its 2015 demand are collectively against the referredUndertaking. to as the The “Demand letters dated Letters”. February 20 and March 9, 2015 are collectively referred to as the “Demand Letters”. Maynilad demanded that it be paid, immediately and without further delay, the =3.4P billion in revenueMaynilad losses demanded that it thathad itsustained be paid, asimmediately a direct result and of without the MWSS’s further anddelay, the the RO’s =3.4P refusal billion to in revenueimplement losses its correct that it hadRebasing sustained Adjustment as a direct from result January of the 1, MWSS’s 2013 (the and commencement the RO’s refusal of theto implementFourth Rate its Rebasing correct RebasingPeriod) to Adjustment February 28, from 2015. January 1, 2013 (the commencement of the Fourth Rate Rebasing Period) to February 28, 2015. On March 27, 2015, Maynilad served a Notice of Arbitration and Statement of Claim upon the OnROP, March through 27, the2015, DOF. Maynilad Maynilad served gave a Notice notice ofand Arbitration demanded and that Statement the ROP’s of failure Claim or upon refusal the to ROP,pay the through amounts the required DOF. Maynilad under the gave Demand notice Letters and demanded be, pursuant that to the the ROP’s terms failureof the Undertaking or refusal to , payreferred the amountsto arbitration required before under a three-member the Demand Letterspanel appointed be, pursuant and to conduct the terms proceedings of the Undertaking in , referredSingapore to inarbitration accordance before with a the three-member 1976 United panel Nations appointed Commission and conduct on International proceedings Trade in Law Singapore(UNCITRAL) in accordance Arbitration with Rules. the 1976 United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules. On April 21, 2015, the MWSS Board of Trustees, in its Resolution No. 2015-004-CA dated OnMarch April 25, 21, 2015 2015, approved the MWSS to partially Board ofimplement Trustees, the in itsFirst Resolution Award of No. a tariff 2015-004-CA adjustment dated of MarchP=0.64 per25, cu.m. 2015 which,approved net to of partially the =1.00P implement CERA, actually the First translates Award of to a a tariff tariff adjustment adjustment of of P=0.64negative per P=0.36 cu.m. percu.m. which, net as ofopposed the =1.00P to the CERA, First Awardactually of translates P=3.06 percu.m. to a tariff tariff adjustment adjustment, of net of negativeCERA. ForP=0.36 being percu.m. contrary as opposedto the First to theAward First as Award well as of the P=3.06 provisions percu.m. of tariffthe Concession adjustment, net of CERA.Agreement, For Mayniladbeing contrary did not to implementthe First Award this tariff as well adjustment. as the provisions of the Concession Agreement, Maynilad did not implement this tariff adjustment.

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On May 14, 2015, the MWSS Board of Trustees in its Resolution No. 2015-060-RO approved a On7.52% May increase 14, 2015, in thethe prevailingMWSS Board average of Trustees basic charge in its ofResolution =31.25P percu.m. No. 2015-060-RO or an upward approved a 7.52%adjustment increase of =2.35P in the percu.m. prevailing as averageConsumer basic Price charge Index of adjustment.=31.25P percu.m. With or the an discontinuance upward of adjustmentCERA, the ofnet =2.35P adjustment percu.m. in averageas Consumer water chargePrice Index is 4.32% adjustment. or =1.35P Withpercu.m. the discontinuance of CERA, the net adjustment in average water charge is 4.32% or =1.35P percu.m. In the fourth quarter of 2015, the Arbitral Tribunal was constituted. On February 17, 2016, InMaynilad the fourth again quarter wrote of the 2015, ROP, the through Arbitral the Tribunal DOF, towas reiterate constituted. its demand On February against the17, Undertaking 2016, Mayniladand to update again its wrote claim. the Evidentiary ROP, through hearings the DOF, were tocompleted reiterate inits December demand against 2016. the Undertaking and to update its claim. Evidentiary hearings were completed in December 2016. On July 24, 2017, the Arbitral Tribunal unanimously upheld the validity of Maynilad’s claim Onagainst July the 24, Undertaking 2017, the Arbitral Letter Tribunalissued by unanimously the ROP, through upheld the the DOF, validity to compensate of Maynilad’s Maynilad claim for againstthe delayed the Undertaking implementation Letter of issuedits relevant by the tariffs ROP, for through the Fourth the DOF, Rate Rebasingto compensate Period Maynilad (“Second for theAward”). delayed The implementation Tribunal ordered of its the relevant ROP to tariffs reimburse for the Maynilad Fourth Rate the amount Rebasing of PeriodP=3.4 billion (“Second for Award”).losses from The March Tribunal 11, 2015 ordered to August the ROP 31, to 2016, reimburse without Maynilad prejudice the to amount any rights of P=3.4 that billionMaynilad for lossesmay have from to March seek recourse 11, 2015 against to August MWSS 31, for2016, losses without incurred prejudice from Januaryto any rights 1, 2013 that to Maynilad March 10, may2015. have Further, to seek the recourse Tribunal against ruled thatMWSS Maynilad for losses is entitled incurred to fromrecover January from the1, 2013 Republic to March its losses 10, 2015.from September Further, the 1, Tribunal2016 onwards. ruled that In caseMaynilad a disagreement is entitled onto therecover amount from of the such Republic losses arises, its losses fromMaynilad September may revert 1, 2016 to the onwards. Tribunal In for case further a disagreement determination. on the amount of such losses arises, Maynilad may revert to the Tribunal for further determination. Subsequently, Maynilad agreed with the corrected computation by the ROP of Maynilad’s Subsequently,revenue losses Mayniladfrom March agreed 11, 2015 with tothe August corrected 31, computation2016 in the amount by the ROPof P=3.18 of Maynilad’s billion (with cost revenueof money losses as of fromAugust March 31, 2016).11, 2015 to August 31, 2016 in the amount of P=3.18 billion (with cost of money as of August 31, 2016). Starting April 22, 2017, adjusted water rates which included increase in the FCDA, as well as an Startingadjustment April to cover22, 2017, the 1.9%adjusted Consumer water rates Price which Index included were implemented. increase in the FCDA, as well as an adjustment to cover the 1.9% Consumer Price Index were implemented. On February 13, 2018, Maynilad received an email from the ROP’s Singapore counsel advising Onthat February the Republic 13, 2018, has filed Maynilad an application received with an email the High from Court the ROP’s of Singapore Singapore to set counsel aside advisingthe thatSecond the AwardRepublic dated has Julyfiled 24,an application2017 (the “Setting with the Aside High Application”).Court of Singapore to set aside the Second Award dated July 24, 2017 (the “Setting Aside Application”). An electronic copy of the Setting-Aside Application was served on Maynilad’s Singapore counsel Anon Februaryelectronic 15, copy 2018. of the Setting-Aside Application was served on Maynilad’s Singapore counsel on February 15, 2018. The ROP also filed an interlocutory application for sealing which required, among others, that the Theproceedings ROP also be filed heard an in-camera interlocutory or otherwise application than for in sealing open court, which that required, there to among be no others,publication that the of proceedingsthe identities be of heardthe parties in-camera to the or proceedings otherwise thanor of in any open matter court, that that would there reasonably to be no publication enable the of thepublic identities to deduce of the the parties identities to the of theproceedings parties. or of any matter that would reasonably enable the public to deduce the identities of the parties. On September 4, 2018, immediately following the conclusion of the hearings before the OnSingapore September High 4, Court, 2018, theimmediately presiding followingJustice dismissed the conclusion the Republic’s of the hearings Setting Asidebefore Application the Singaporeand awarded High Singaporean Court, the Dollar,presiding S$40,000 Justice indismissed favor of theMaynilad Republic’s by way Setting of costs. Aside The Application Republic anddid notawarded appeal Singaporean the decision Dollar, to the SingaporeS$40,000 inCourt favor of of Appeal Maynilad within by theway prescribed of costs. 30-dayThe Republic period didand notso, appealthe dismissal the decision of the toSetting the Singapore Aside Application Court of Appeal became within final on the October prescribed 4, 2018. 30-day period and so, the dismissal of the Setting Aside Application became final on October 4, 2018. As at December 31, 2018, Maynilad has an outstanding claim against the ROP, through the DOF, Aspursuant at December to the arbitral 31, 2018, and Maynilad court decisions has an outstandingto compensate claim Maynilad against for the the ROP, delayed through the DOF, pursuantimplementation to the arbitralof its relevant and court tariffs decisions for the to Fourth compensate Rate Rebasing Maynilad Period for the (2013 delayed to 2017) in the implementationamount of P=3.18 of billion, its relevant with coststariffs of for litigation the Fourth in the Rate amount Rebasing of S$40,000. Period (2013 The to=3.18P 2017) billion in the amountrefers to of Maynilad’s P=3.18 billion, aggregate with costs foregone of litigation revenues in fromthe amount March of11, S$40,000. 2015 to August The =3.18P 31, 2016, billion with referscost of to money Maynilad’s as of August aggregate 31, foregone2016. revenues from March 11, 2015 to August 31, 2016, with cost of money as of August 31, 2016.

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As at December 31, 2017, Maynilad’s aggregate foregone revenues, with cost of money as of the Assame at dateDecember is =11.4P 31, billion. 2017, Maynilad’s aggregate foregone revenues, with cost of money as of the same date is =11.4P billion. Maynilad computed a rebasing adjustment for the Fifth Rate Rebasing Period (2018 to 2022) Mayniladbased on an computed Opening a Cash rebasing Position adjustment as of December for the Fifth 31, Rate2017, Rebasing which included Period (2018the foregone to 2022) basedrevenues on froman Opening the Fourth Cash Rate Position Rebasing as of Period.December Hence, 31, 2017, as of whichDecember included 31, 2018, the foregone the aggregate revenuesforegone fromrevenues the Fourthremain Rateat P=11.4 Rebasing billion. Period. Hence, as of December 31, 2018, the aggregate foregone revenues remain at P=11.4 billion. On February 11, 2019, Maynilad wrote the DOF about the amount of its updated claim for Oncompensation February 11, by 2019,the ROP, Maynilad which wroteis =6.7P the billion, DOF aboutwith a the request amount that of the its DOF updated order claim the MWSSfor compensationand the RO to bymeet the with ROP, Maynilad which is to =6.7P agree billion, and discuss with a arequest proposed that settlement the DOF order of the the updated MWSS andclaim. the TheRO DOFto meet never with responded Maynilad to to this agree letter. and discuss a proposed settlement of the updated claim. The DOF never responded to this letter. On October 1, 2019, the ROP paid Maynilad approximately P=2.7 million (equivalent of OnS$71,900) October pursuant 1, 2019, to the the ROP September paid Maynilad 4, 2018 approximatelyorder of the High P=2.7 Court million to pay (equivalent Maynilad of for its S$71,900)costs and disbursements pursuant to the in September respect of the4, 2018 Setting order Aside of the Application. High Court to pay Maynilad for its costs and disbursements in respect of the Setting Aside Application. On December 10, 2019, during a joint hearing of the Congressional Committees on Public OnAccounts December and Good10, 2019, Government during a jointand Public hearing Accountability, of the Congressional Maynilad Committees made an oral on Public offer to Accountswaive its claimsand Good against Government ROP amounting and Public to =6.7P Accountability, billion which Maynilad represents made Maynilad’s an oral offer foregone to revenueswaive its forclaims the periodagainst March ROP amounting 11, 2015 to to December =6.7P billion 31, which 2017. represents No recognition Maynilad’s of this foregone claim has revenuesbeen made for in the the period consolidated March 11,financial 2015 tostatements. December 31, 2017. No recognition of this claim has been made in the consolidated financial statements. On January 2, 2020, Maynilad executed the Release From and Waiver of Claim on Arbitral OnAward January (“Waiver”) 2, 2020, in Maynilad favor of theexecuted ROP. theThe Release waiver Fromwas unanimously and Waiver ofratified Claim on on March Arbitral 2, 2020 Awardby the Maynilad(“Waiver”) Board in favor of Directors of the ROP. after The consultation waiver was with unanimously the three major ratified shareholders on March of2, 2020 byMaynilad the Maynilad namely, Board MPIC, of DMCIDirectors Holdings, after consultation Inc. and Marubeni with the Corp.three major shareholders of Maynilad namely, MPIC, DMCI Holdings, Inc. and Marubeni Corp. ƒ 2013-2017 Rate Rebasing – Domestic Court Actions. In a decision dated August 30, 2017, the ƒ 2013-2017Regional Trial Rate Court, Rebasing Branch – Domestic 93 of Quezon Court City Actions (“RTC”). In a granteddecision the dated Petition August for 30,Confirmation 2017, the Regionaland Enforcement Trial Court, of the Branch First Award93 of Quezon which petitioner,City (“RTC”) Maynilad, granted filed the Petitionin July 2015 for Confirmation (the and“Decision”) Enforcement following of the the First refusal Award of MWSSwhich petitioner, and the RO Maynilad, to implement filed inthe July First 2015 Award. (the As “Decision”)mentioned above, following the First the refusal Award of upheld MWSS the and 13.41% the RO Rebasing to implement Adjustment the First that Award. Maynilad As mentionedproposed for above, the Fourth the First Rate Award Rebasing upheld Period. the 13.41% Rebasing Adjustment that Maynilad proposed for the Fourth Rate Rebasing Period. MWSS filed a Petition for Review with the Court of Appeals (“CA”) on December 27, 2017 MWSSasking for filed a reversal a Petition of forthe ReviewRTC’s Decision.with the Court of Appeals (“CA”) on December 27, 2017 asking for a reversal of the RTC’s Decision. In its decision dated May 30, 2018, the CA denied MWSS’s Petition for Review, and affirmed the InRTC its Decisiondecision datedand Order May confirming30, 2018, the the CA Final denied Award MWSS’s (“CA Decision”).Petition for Review, and affirmed the RTC Decision and Order confirming the Final Award (“CA Decision”). On July 11, 2018, Maynilad received MWSS’s Petition for Review on Certiorari with the SC On(under July Rule 11, 2018,19.37 Mayniladof the Special received Rules MWSS’s of Court Petition on Alternative for Review Dispute on Certiorari Resolution) with with the SC (underManifestation Rule 19.37 dated of July the Special4, 2018 Rules(the “Petition of Court for on Review”).Alternative MWSS Dispute prayed Resolution) that the with SC (i) Manifestationreverse and set dated aside Julythe CA4, 2018 Decision, (the “Petition and (ii) grantfor Review”). MWSS’s MWSScounter-petition prayed that and the declare SC (i) reverseMWSS andas legally set aside released the CA or Decision,excused from and (ii)implementing grant MWSS’s or enforcing counter-petition the Final and Award declare or, in the MWSSalternative, as legally declare released the Final or Awardexcused as from unenforceable. implementing or enforcing the Final Award or, in the alternative, declare the Final Award as unenforceable. On November 19, 2018, the Second Division of the SC ordered the consolidation of the Petition Onwith November (five) consolidated 19, 2018, petitionsthe Second pending Division before of the the SC SC ordered En Banc the (“the consolidation Consolidated of the Cases”), Petition withwhich (five) Consolidated consolidated Cases petitions seek to, pending among beforeother things, the SC have En Banc the Concession (“the Consolidated Agreement Cases”), nullified. which Consolidated Cases seek to, among other things, have the Concession Agreement nullified. *SGVFSM006036* *SGVFSM006036*

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On June 18, 2019, the Supreme Court issued a Notice which, among other things, denied, for lack Onof merit June (with18, 2019, no explanation), the Supreme Maynilad Court issued Motion a Notice to De-Consolidate. which, among otherThe Consolidated things, denied, Cases for lack ofremain merit pending (with no before explanation), the SC. Maynilad Motion to De-Consolidate. The Consolidated Cases remain pending before the SC. On January 7, 2020, the SC issued its Resolution, which required the parties “to move in the Onpremises January within 7, 2020, 10 days the SCfrom issued notice its in Resolution, view of the which dropping required by the the Concessionaires parties “to move of in their the premisesclaims against within the 10 government days from notice arising in from view arbitration of the dropping decision” by the (“Move-In Concessionaires Resolution”). of their claims against the government arising from arbitration decision” (“Move-In Resolution”). On March 5, 2020, Maynilad submitted its Consolidated Compliance and Comments. Maynilad Onraised March that 5,“any 2020, waiver Maynilad of the submitted=6.7P billion its (in Consolidated favor of the Compliance ROP) is irrelevant and Comments. to, and should Maynilad not raisedaffect, thatthe resolution“any waiver of ofthe the Consolidated =6.7P billion Cases. (in favor Maynilad of the ROP) further is irrelevantstressed that to, “regardlessand should ofnot affect,whatever the waiver resolution may of or the may Consolidated not be agreed Cases. as regards Maynilad Maynilad’s further =6.7Pstressed billion that claims “regardless against of the whateverROP, such waiver waiver may is without or may prejudicenot be agreed to any as ofregards its rights Maynilad’s under the =6.7P Concession billion claims Agreement against or the the ROP,Final Award,such waiver and it is does without not waiveprejudice such to rights any of which its rights continue under to the be Concession protected by Agreement the Constitution or the Finaland by Award, applicable and itlaws”. does not waive such rights which continue to be protected by the Constitution and by applicable laws”. The Secretary of Finance, through the OSG, filed its Compliance dated November 1, 2020 to the TheMove-In Secretary Resolution. of Finance, The OSGthrough manifested the OSG, that filed it isits unable Compliance to move dated in the November premises 1, with 2020 respect to the Move-Into Maynilad Resolution. due to the The latter’s OSG Manifestation manifested that dated it is Julyunable 23, to 2020 move wherein in the premisesit stated that with it respectdoes not toknow Maynilad the specific due to documents the latter’s subject Manifestation of the Move-In dated July Resolution, 23, 2020 andwherein asserted it stated that ifthat the it does not knowdocuments the specific requested documents referred subjectto the waiver of the Move-Inof Maynilad’s Resolution, claim againstand asserted the ROP, that Mayniladif the need documentsnot comply requestedbecause the referred OSG wasto the furnished waiver ofa copyMaynilad’s of MWSS’s claim Compliance against the ROP, which Maynilad already need notattached comply the because foregoing the document. OSG was furnished a copy of MWSS’s Compliance which already attached the foregoing document. As at March 19, 2021, the SC has yet to decide on MWSS’s Petition for Review on Certiorari. As at March 19, 2021, the SC has yet to decide on MWSS’s Petition for Review on Certiorari. Rate Rebasing: 2018-2022. On March 31, 2017, Maynilad submitted a five-year business plan to the RateRO for Rebasing: the new 2018-2022.rate rebasingOn covering March the31, years2017, 2018 Maynilad to 2022 submitted with its aproposed five-year rate business adjustments. plan to the RO for the new rate rebasing covering the years 2018 to 2022 with its proposed rate adjustments. On September 13, 2018, the MWSS issued Resolution No. 2018-136-RO adopting RO Resolution OnNo. September 2018-09-CA 13, dated 2018, September the MWSS 7, issued 2018 grantingResolution Maynilad No. 2018-136-RO a partial rate adopting adjustment RO ofResolution =5.73/cu.m.P No.for the 2018-09-CA Fifth Rate datedRebasing September Period 7,(2018 2018 to granting 2022), to Maynilad be implemented a partial onrate an adjustment uneven staggered of =5.73/cu.m.P basis of for(i) P=0.90/cu.m.the Fifth Rate effective Rebasing October Period 1, (2018 2018; to (ii) 2022), P=1.95/cu.m. to be implemented effective January on an uneven1, 2020, staggered (iii) =1.95/cu.m.P basis of (i)effective P=0.90/cu.m. January effective 1, 2021, October and (iv) 1, =0.93/cu.m.P 2018; (ii) P=1.95/cu.m. effective January effective 1, 2022.January The 1, approved2020, (iii) rate =1.95/cu.m.P effectiveadjustment January still does 1, 2021, not include and (iv) the =0.93/cu.m.P corporate income effective tax January (“CIT”) 1, component 2022. The toapproved which Mayniladrate is adjustmententitled by virtuestill does of the not First include Award. the corporate In their Resolutions, income tax (“CIT”)the MWSS component and RO tostated which that Maynilad the is entitledinclusion by of virtue the CIT of thein Maynilad’s First Award. tariff In theiris subject Resolutions, to the SC’s the MWSSresolution and of RO MWSS’s stated thatPetition the for inclusionReview. of the CIT in Maynilad’s tariff is subject to the SC’s resolution of MWSS’s Petition for Review. To preserve its right to the CIT which has already been adjudged in its favor in the First Award, and Topursuant preserve to Article its right 12 to of the the CIT Concession which has Agreement, already been Maynilad, adjudged on in October its favor 12, in the2018, First filed Award, a Dispute and pursuantNotice, signaling to Article the 12 start of the of Concessionanother arbitration. Agreement, However, Maynilad, on November on October 9, 12, 2018, 2018, MWSS filed anda Dispute Notice,Maynilad signaling filed a jointthe start application of another with arbitration. the Appeals However, Panel to onsuspend November proceedings 9, 2018, to MWSS give the and parties Mayniladtime to try filed to settle a joint their application differences with amicably. the Appeals Panel to suspend proceedings to give the parties time to try to settle their differences amicably. The rate adjustment for January 1, 2020 was not implemented. The rate adjustment for January 1, 2020 was not implemented. Concession Agreement Review and Amendment. With the onset of El Niňo in June 2019, southern Concessionportions of Maynilad’s Agreement concessionReview and area Amendment (West Service. With theArea) onset began of Elexperiencing Niňo in June intermittent 2019, southern water portionsinterruptions of Maynilad’s brought about concession by the diminishingarea (West Service raw water Area) allocation began experiencing from Angat Dam,intermittent aggravated water by interruptionsa protracted algal brought bloom about that by affected the diminishing Laguna Lake raw whichwater allocation has served from as Maynilad’s Angat Dam, raw aggravated water source by ato protracted augment its algal supply bloom from that Angat affected Dam. Laguna Lake which has served as Maynilad’s raw water source to augment its supply from Angat Dam. *SGVFSM006036* *SGVFSM006036*

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As the water crisis and the concomitant water interruptions stretched throughout the summer months, AsCongress the water initiated crisis hearingsand the concomitant in aid of legislation water interruptions to determine stretched and address throughout the cause the of summer the water months, crisis. Congress initiated hearings in aid of legislation to determine and address the cause of the water crisis. The Concession Agreements were brought into sharp focus when news broke out on November 2019 Theof the Concession Other Operator’s Agreements award were in an brought arbitration into againstsharp focus the ROP when (ordering news broke the Governmentout on November to 2019 ofcompensate the Other theOperator’s Other Operator award in for an unimplemented arbitration against rates the beginning ROP (ordering 2015). the Government to compensate the Other Operator for unimplemented rates beginning 2015). Matters quickly escalated when the Government identified supposedly “onerous provisions” in the MattersConcession quickly Agreement escalated and when ordered the Governmentits review and identified amendment. supposedly On December “onerous 9, provisions” 2019, Maynilad in the Concessionreceived a letter Agreement from MWSS and ordered informing its review Maynilad and thatamendment. the MWSS On was December directed 9, to 2019, perform Maynilad a review receivedof the Concession a letter from Agreement. MWSS informing Maynilad that the MWSS was directed to perform a review of the Concession Agreement. Subsequently, MWSS issued Resolution No. 2019-201-CO on December 11, 2019, revoking Subsequently,Resolution No.2009-180 MWSS issued dated Resolution September No. 10, 2019-201-CO 2009 pertaining on toDecember the Extension 11, 2019, of the revoking Concession ResolutionAgreement No.2009-180of Maynilad from dated May September 7, 2022 10, to May2009 6, pertaining 2037. to the Extension of the Concession Agreement of Maynilad from May 7, 2022 to May 6, 2037. On December 20, 2019, MWSS released a press statement clarifying Resolution No. 2019-201-CO Onand Decemberconfirming 20, that 2019, the actionMWSS of released the MWSS a press BOT statement did not result clarifying in the Resolution rescission No.or outright 2019-201-CO andcancellation confirming of thethat Concession the action ofAgreement. the MWSS BOT did not result in the rescission or outright cancellation of the Concession Agreement. On December 23, 2019, Maynilad received a letter from MWSS RO confirming that the On25-year December CA from 23, 19972019, to Maynilad 2022 and received the Memorandum a letter from of MWSSAgreement RO (MOA)confirming between that the Maynilad and 25-yearthe MWSS CA providing from 1997 the to 15-year2022 and extension the Memorandum from 2022 of to Agreement 2037 have (MOA)not yet beenbetween cancelled. Maynilad and the MWSS providing the 15-year extension from 2022 to 2037 have not yet been cancelled. As of March 19, 2021, Maynilad is awaiting the draft of the amendments to its Concession AsAgreement. of March Amendments19, 2021, Maynilad to the provisionsis awaiting of the the draft Concession of the amendments Agreement tomay its affect,Concession among others, Agreement.future tariff increases Amendments and service to the provisions commitments, of the and Concession the concession Agreement period. may Any affect, future among amendments others, futureto the provisionstariff increases of the and Concession service commitments, Agreement will and be the reflected concession in the period. financial Any statements future amendments as these toare the determined. provisions Asof theof December Concession 31, Agreement 2020, the presentationwill be reflected of the in consolidatedthe financial financialstatements statements, as these areincluding determined. the amortization As of December of Maynilad’s 31, 2020, service the presentation concession of asset, the consolidatedis based on the financial existing statements, terms of includingthe Concession the amortization Agreement. of Maynilad’s service concession asset, is based on the existing terms of the Concession Agreement. Disputes with MWSS. In prior years, Maynilad has been contesting certain charges billed by MWSS Disputesrelating to: with (a) MWSS.the basisIn of prior the computationyears, Maynilad of interest; has been (b) contesting MWSS cost certain of borrowings; charges billed and by (c) MWSS relatingadditional to: penalties. (a) the basis Consequently, of the computation Maynilad of interest;has not provided (b) MWSS for cost these of additional borrowings; charges. and (c) These additionaldisputed charges penalties. were Consequently, effectively reflected Maynilad and has recognized not provided by Maynilad for these asadditional Tranche charges.B Concession These disputedFees amounting charges to were US$30.1 effectively million reflected by virtue and of recognized the Debt and by CapitalMaynilad Restructuring as Tranche AgreementB Concession Fees(DCRA) amounting entered to into US$30.1 in 2005. million Maynilad by virtue also ofpaid the US$6.8 Debt and million Capital in 2005Restructuring as an additional Agreement amount of (DCRA)Tranche Bentered Concession into in Fees 2005. determined Maynilad by also the paid Receiver. US$6.8 million in 2005 as an additional amount of Tranche B Concession Fees determined by the Receiver. Maynilad reconciled its liability to MWSS with the confirmation and billings of MWSS. The Mayniladdifference reconciledbetween the its amount liability confirmed to MWSS by with MWSS the confirmation and the amount and recognizedbillings of MWSS.by the Maynilad The differenceamounted tobetween =5.1P billion the amount and P=5.6 confirmed billion asby at MWSS December and the31, amount2020 and recognized 2019, respectively. by the Maynilad The amounteddifference tomainly =5.1P billionpertains and to disputedP=5.6 billion claims as at of December MWSS consisting 31, 2020 ofand additional 2019, respectively. Tranche B The differenceConcession mainly Fees, borrowingpertains to costdisputed and interestclaims ofpenalty MWSS under consisting the Concession of additional Agreement Tranche (prior B to the ConcessionDCRA). Maynilad’s Fees, borrowing position cost on theseand interest charges penalty is consistent under thewith Concession the Receiver’s Agreement recommendation (prior to the DCRA).which was Maynilad’s upheld by positionthe Rehabilitation on these charges Court. is consistent with the Receiver’s recommendation which was upheld by the Rehabilitation Court. Following the issuance of the Rehabilitation Court’s Order on December 19, 2007 disallowing the FollowingMWSS’ disputed the issuance claims of and the the Rehabilitation termination Court’sof Maynilad’s Order onrehabilitation December 19,proceedings, 2007 disallowing Maynilad the and MWSS’MWSS sought disputed to resolveclaims andthe thematter termination in accordance of Maynilad’s with the disputerehabilitation resolution proceedings, requirements Maynilad of the and MWSSTransitional sought and to Clarificatory resolve the matter Agreement in accordance (TCA). with the dispute resolution requirements of the Transitional and Clarificatory Agreement (TCA). *SGVFSM006036* *SGVFSM006036*

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Prior to the DCRA, Maynilad has accrued interest on its payable to MWSS based on the terms of the PriorConcession to the DCRA,Agreement, Maynilad which has was accrued disputed interest by MWSS on its before payable the to Rehabilitation MWSS based Court. on the termsThese of the Concessionalready amounted Agreement, to P=985 which million was as disputed at December by MWSS 31, 2011 before and the have Rehabilitation been charged Court. to interest These expense alreadyin prior amountedyears. Maynilad to P=985 maintains million as that at Decemberthe accrued 31, interest 2011 andon its have payable been tocharged MWSS to has interest been expense inadequately prior years. replaced Maynilad by the maintains Tranche thatB Concession the accrued Fees interest discussed on its above.payable Maynilad’s to MWSS has position been is adequatelyconsistent with replaced the Receiver’s by the Tranche recommendation B Concession which Fees was discussed upheld above. by the RehabilitationMaynilad’s position Court. is With consistentthe prescription with theof theReceiver’s TCA and recommendation in light of Maynilad’s which wasoutstanding upheld byoffer the of Rehabilitation US$14 million Court. to fully With thesettle prescription the claim ofof MWSS,the TCA Maynilad and in light reversed of Maynilad’s the amount outstanding of accrued offer interest of US$14 in excess million of the to fully settleUS$14.0 the millionclaim of settlement MWSS, Maynilad offer amounting reversed to the P=378 amount milllion of accrued in 2012. interest The remaining in excess balanceof the of US$14.0P=607 million million as at settlement December offer 31, 2020amounting and 2019, to P=378 which milllion pertains in 2012.to the disputedThe remaining interest balance penalty of under P=607the Concession million as Agreementat December prior 31, to2020 DCRA, and 2019,has remained which pertains in the books to the pendingdisputed resolution interest penalty of the under theremaining Concession disputed Agreement claims ofprior MWSS. to DCRA, has remained in the books pending resolution of the remaining disputed claims of MWSS. Real Property Taxes Assessment on Common Purpose Facilities. On October 13, 2005, Maynilad Realand Manila Property Water Taxes (the Assessment Concessionaires) on Common were Purposejointly assessed Facilities by. theOn MunicipalityOctober 13, 2005,of Norzagaray, Maynilad andBulacan Manila for Waterreal property (the Concessionaires) taxes on certain were common jointly purpose assessed facilities by the purportedlyMunicipality due of Norzagaray,from 1998 to Bulacan2005 amounting for real propertyto P=357 million.taxes on Itcertain is the commonposition ofpurpose the Concessionaires facilities purportedly that these due properties from 1998 are to 2005owned amounting by the ROP to P=357and therefore, million. exemptIt is the fromposition taxation. 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 TheDecember supposed 31, joint2020 liabilityand December of the Concessionaires 31, 2019 amounted for realto =1.2P property billion tax, and including P=1.0 billion, interests, respectively. as at December 31, 2020 and December 31, 2019 amounted to =1.2P billion and P=1.0 billion, respectively. After the Local Board of Assessment Appeals (LBAA) ruled in favor of the Municipality of AfterNorzagaray, the Local Bulacan, Board theof Assessment Concessionaires Appeals elevated (LBAA) the rulingruled in of favor the LBAA of the toMunicipality the Central ofBoard of Norzagaray,Assessment AppealsBulacan, (CBAA) the Concessionaires by filing separate elevated appeals. the ruling of the LBAA to the Central Board of Assessment Appeals (CBAA) by filing separate appeals. During the presentation of evidence before the CBAA, the LBAA moved for the presentation of Duringadditional the witnesses, presentation which of evidence was denied before by thethe CBAACBAA, on the February LBAA moved12, 2016. for the presentation of additional witnesses, which was denied by the CBAA on February 12, 2016. The LBAA filed a Motion for Reconsideration, which was again denied by the CBAA on TheJune LBAA 20, 2016. filed a Motion for Reconsideration, which was again denied by the CBAA on June 20, 2016. As a result, the LBAA filed a Petition for Certiorari before the Court of Tax Appeals (“CTA”). As a result, the LBAA filed a Petition for Certiorari before the Court of Tax Appeals (“CTA”). On September 21, 2016, pursuant to the order of the CTA, the CBAA transmitted the complete Onrecords September of the case 21, 2016,to the pursuantCTA, and to held the orderin abeyance of the CTA, all proceedings the CBAA of transmitted the case until the completethe Petition for recordsCertiorari of isthe resolved. case to the CTA, and held in abeyance all proceedings of the case until the Petition for Certiorari is resolved. On May 23, 2018, Court of Tax Appeals’ (CTA) Notice of Decision dated May 11, 2018 was Onreceived, May 23, denying 2018, Petitioner’sCourt of Tax Petition Appeals’ for (CTA)Certiorari Notice (for ofan Decision interlocutory dated order) May 11,(“CTA 2018 Decision”). was received,Thus, the denyingCTA ordered Petitioner’s that the Petition case be for remanded Certiorari to CBAA(for an interlocutoryand for the proceedings order) (“CTA to continue. Decision”). Thus, the CTA ordered that the case be remanded to CBAA and for the proceedings to continue. On September 3, 2018, Maynilad received the CTA’s Resolution dated June 4, 2018 noting the Oncompliance September of Maynilad3, 2018, Maynilad and MWSS received informing the CTA’s the CTA Resolution of their respectivedated June dates 4, 2018 of receiptnoting ofthe the complianceCTA Decision. of Maynilad and MWSS informing the CTA of their respective dates of receipt of the CTA Decision. On February 7, 2019, Maynilad received an Entry of Judgment certifying that the CTA Decision Onbecame February final 7,and 2019, executory Maynilad on June received 20, 2018. an Entry of Judgment certifying that the CTA Decision became final and executory on June 20, 2018. The Concessionaires’ respective appeals remain pending before the CBAA. The Concessionaires’ respective appeals remain pending before the CBAA.

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Supreme Court Decision on the Philippine Clean Water Act. On September 17, 2019, Maynilad, Supremethrough its Court external Decision counsel, on thereceived Philippine a copy Clean of the Water Supreme Act. CourtOn September En Banc decision,17, 2019, datedMaynilad, throughAugust 6,its 2019, external in the counsel, case of received Maynilad a copy vs The of theSecretary Supreme of theCourt Department En Banc decision,of Environment dated and AugustNatural 6,Resources, 2019, in theet al case (the of “Decision”). Maynilad vs The Secretary of the Department of Environment and Natural Resources, et al (the “Decision”). The Supreme Court affirmed, with modifications, the decisions of the Court of Appeals finding the TheConcessionaires Supreme Court and affirmed, MWSS guilty with modifications,of violating Section the decisions 8 of Republic of the ActCourt No. of 9275, Appeals otherwise finding known the Concessionairesas the ‘‘Philippine and Clean MWSS Water guilty Act of of violating 2004’’ (the Section “CWA”). 8 of Republic Act No. 9275, otherwise known as the ‘‘Philippine Clean Water Act of 2004’’ (the “CWA”). For violating Section 8, the Supreme Court held each of the Concessionaires jointly and severally Forliable violating with the Section MWSS 8, for the =921.5P Supreme million Court for held the eachperiod of Maythe Concessionaires 7, 2009 (the day jointly following and severallythe lapse of liablethe five-year with the period MWSS provided for =921.5P in Section million 8) for to theAugust period 6, 2019,May 7, the 2009 date (the of theday Decision’s following the lapse of thepromulgation. five-year period The fineprovided is to bein paidSection within 8) to 15 August days from 6, 2019, the time the date the Decisionof the Decision’s becomes final. In promulgation.addition, MWSS The and fine the is Concessionaires to be paid within will 15 bedays liable from for the the time initial the amount Decision of becomes=322,102.00P final. a day,In addition,subject to MWSS a further and 10% the increase Concessionaires every two will years, be liable pursuant for theto Section initial amount 28 of the of CWA,=322,102.00P until full a day, subjectcompliance to a furtherwith the 10% mandate increase of Section every two 8. Ayears, 6% interestpursuant will to Sectionbe imposed 28 of on the the CWA, total amountuntil full of the compliancefines should with there the be mandatea delay in of its Section payment. 8. A 6% interest will be imposed on the total amount of the fines should there be a delay in its payment. On October 2, 2019, Maynilad filed a Motion for Reconsideration of the Decision with the Supreme OnCourt. October As at 2, March 2019, 19,Maynilad 2021, the filed SC a hasMotion yet to for decide Reconsideration on Maynilad’s of the Motion Decision for Reconsideration. with the Supreme Court. As at March 19, 2021, the SC has yet to decide on Maynilad’s Motion for Reconsideration. Others. Maynilad is a party to various civil and labor cases relating to breach of contracts with Others.damages, Maynilad illegal dismissal is a party of to employees, various civil and and nonpayment labor cases of relating backwages, to breach benefits of contracts and performance with damages,bonus, among illegal others. dismissal Other of disclosures employees, required and nonpayment by PAS 37 of were backwages, not provided benefits as itand may performance prejudice bonus,Maynilad’s among position others. in Other on–going disclosures claims, required litigations by andPAS assessments. 37 were not provided as it may prejudice Maynilad’s position in on–going claims, litigations and assessments. Toll Operations Toll Operations Toll Rate Adjustments – NLEX Corp. NLEX Corp, as petitioner-applicant, filed the following Petitions Tollfor Approval Rate Adjustments of Periodic – NLEX Toll Rate Corp Adjustment. NLEX Corp, with as the petitioner-applicant, Toll Regulatory Board filed (TRB) the following praying Petitionsfor the foradjustment Approval of of the Periodic toll rates Toll for Rate the NLEX: Adjustment with the Toll Regulatory Board (TRB) praying for the adjustment of the toll ratesPetition for the NLEX: Date Filed Effectivity 2012Petition Petition DateJune 2012Filed JanuaryEffectivity 1, 2013 20122014 Petition SeptemberJune 2012 2014 January 1, 20132015 20142016 Petition September 20142016 January 1, 20152017 20162018 Petition September 20162018 January 1, 20172019 20182020 Petition September 20182020 January 1, 20192021 2020 Petition September 2020 January 1, 2021 On October 27, 2015, NLEX Corp. was granted the right and obligation to manage, operate, and Onmaintain October the 27, SCTEX 2015, under NLEX the Corp. terms was of grantedthe Business the right Agreement and obligation between to NLEX manage, Corp. operate, and BCDA.and maintainUnder the the agreements SCTEX under covering the termsthe SCTEX, of the Businesstoll rate adjustmentAgreement petitions between shallNLEX be Corp.filed withand BCDA.the TRB Underyearly. the Prior agreements to October covering 27, 2015, the theSCTEX, BCDA toll filed rate petitions adjustment for tollpetitions rate adjustment shall be filed effective with the in 2012,TRB yearly.2013, 2014, Prior and to October2016. Thereafter, 27, 2015, theon SeptemberBCDA filed 29, petitions 2016, NLEX for toll Corp, rate adjustment as petitioner-applicant, effective in 2012, filed 2013,a petition 2014, for and toll 2016. rate adjustment Thereafter, effective on September January 29, 1, 2016,2017. NLEX Corp, as petitioner-applicant, filed a petition for toll rate adjustment effective January 1, 2017. On June 14, 2019, NLEX Corp. implemented the Petition for Periodic Toll Rate Adjustment Oneffective June 14,2012 2019, in the NLEX SCTEX. Corp. Apart implemented from this the Petition, Petition all for the Periodic remaining Toll toll Rate rate Adjustment adjustments for effectiveSCTEX remain 2012 in pending the SCTEX. with the Apart TRB from as of this March Petition, 19, 2021. all the remaining toll rate adjustments for SCTEX remain pending with the TRB as of March 19, 2021.

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2012 and 2014 Petitions. On February 15, 2019, NLEX Corp. received a Consolidated Resolution 2012dated andOctober 2014 2018 Petitions. issued On by Februarythe TRB 15,which 2019, approved NLEX andCorp. allowed received NLEX a Consolidated Corp. to implement Resolution the datedtoll rate October adjustment 2018 indicatedissued by thereinthe TRB on which a staggered approved basis and in allowed2018, 2020, NLEX 2021, Corp. and to 2023. implement Likewise, the tollon February rate adjustment 15, 2019, indicated the TRB therein issued on a aletter staggeredto NLEX basis Corp. in 2018, instructing 2020, 2021, the latter and to2023. publish Likewise, the onToll February Fee Matrix, 15, 2019,which the is attachedTRB issued to the a letter said letterto NLEX in accordance Corp. instructing with the the 2013 latter Revised to publish Rules the of TollProcedure Fee Matrix, of the whichToll Regulatory is attached Board to the (TRB said letter Rules). in accordanceIn full compliance with the with 2013 the Revised letter, NLEX Rules of ProcedureCorp. caused of the Tollpublication Regulatory of the Board Toll (TRBFee Matrix Rules).in Ina newspaper full compliance of general with circulation,the letter, NLEX once a weekCorp. forcaused three the consecutive publication weeks of the in Toll March Fee 2019.Matrix Onin Marcha newspaper 20, 2019, of general the TRB circulation, issued a Notice once a to weekStart Collectionfor three consecutive effective March weeks 21, in 2019.March 2019. On March 20, 2019, the TRB issued a Notice to Start Collection effective March 21, 2019. Segment 10 Add-on Toll Rate Petition. On January 22, 2019, NLEX Corp. as petitioner-applicant, Segmentfiled a Petition 10 Add-on for Implementation Toll Rate Petition. of Approved On January Adjustment 22, 2019, to NLEX Authorized Corp. Tollas petitioner-applicant, Rates with Applicationfiled a Petition for for Provisional Implementation Relief with of Approved the TRB Adjustmentpraying for theto Authorized adjustment Tollof the Rates toll withrate for the NLEXApplication Open for System Provisional effective Relief February with the15, TRB2019 praying upon completion for the adjustment of the NLEX of the Harbor toll rate Link for Projectthe (NLEXNLEX Open Segments System 9 and effective 10) (Segment February 10 15, Add-on 2019 uponToll Ratecompletion Petition). of the NLEX Harbor Link Project (NLEX Segments 9 and 10) (Segment 10 Add-on Toll Rate Petition). On February 15, 2019, the TRB issued an Order finding NLEX Corp’s subject Petition to be sufficientOn February in form15, 2019, and directed the TRB NLEX issued Corp. an Order to publish finding in NLEX full the Corp’s contents subject of the Petition Petition to in be a newspapersufficient in of form general and circulation,directed NLEX in accordance Corp. to publish with applicable in full the rules contents and laws,of the with Petition a notice in a that all interestednewspaper tollway of general users circulation, may file a in petition accordance for review with applicable of the proposed rules andadjusted laws, toll with rates. a notice In full that all complianceinterested tollway with the users Order may and file TRB a petition Rules, for NLEX review Corp. of the caused proposed the publication adjusted toll of rates.the Petition In full in a newspapercompliance of with general the Order circulation, and TRB once Rules, a week NLEX for three Corp. consecutive caused the weekspublication in February of the Petition and March in a 2019.newspaper On March of general 5, 2019, circulation, the TRB once issued a week a letter for tothree NLEX consecutive Corp. stating weeks that in theFebruary TRB (a)and March conditionally2019. On March approved 5, 2019, the the subject TRB Petitionissued a and letter granted to NLEX NLEX Corp. Corp. stating provisional that the authorityTRB (a) to collect theconditionally add-on tolls approved for the Openthe subject System Petition of the andNLEX grantedand (b)NLEX allowing Corp. the provisional implementation authority of theto collect new authorizedthe add-on tolltolls price for the for Open the NLEX System (Integrated of the NLEX Toll andFee (b)Matrix) allowing which the is implementation attached to the ofsaid the letter. new Theauthorized Integrated toll priceToll Fee for theMatrix NLEX includes (Integrated both: (a)Toll the Fee first Matrix) tranche which of the is approvedattached toadjusted the said toll letter. rates inThe the Integrated 2012 and Toll 2014 Fee Petitions Matrix stated includes in theboth: TRB’s (a) the Consolidated first tranche Resolution of the approveddated Octoberadjusted 2018;toll rates and (b)in the the 2012 provisionally and 2014 approved Petitions add-onstated in toll the rates TRB’s in the Consolidated Segment 10 Resolution Add-on Tolldated Rate October Petition. 2018; In the and (b)same the letter, provisionally the TRB approvedinstructed add-on NLEX tollCorp. rates to: in (a) the cause Segment the publication 10 Add-on of Toll the RateIntegrated Petition. Toll In Fee the sameMatrix letter, in accordance the TRB instructedwith the provisions NLEX Corp. of the to: TRB(a) cause Rules the and publication (b) post the of requiredthe Integrated bond amountingToll Fee Matrixto =530.0P in accordancemillion or the with equivalent the provisions of one of (1) the year TRB collection Rules and of add-on(b) post rate. the requiredIn full and bond complete amounting tocompliance =530.0P million with the or theinstructions equivalent of ofthe one TRB, (1) NLEXyear collection Corp. (a) of submitted add-on rate. the Inoriginal full and of completethe Surety complianceBond issued with by the the Prudential instructions Guarantee of the TRB, and NLEXInsurance Corp. Inc. (a) in submittedfavor of the the Republic original of the Surety BondPhilippines, issued actingby the byPrudential and through Guarantee the TRB, and and Insurance (b) caused Inc. thein favorpublication of the Republicof the Integrated of the Toll Fee Philippines,Matrix in a newspaper acting by andof general through circulation the TRB, andonce (b) a weekcaused for the three publication (3) consecutive of the Integrated weeks in MarchToll Fee Matrix2019. Onin aMarch newspaper 20, 2019, of general the TRB circulation issued a onceNotice a weekto Start for Collection three (3) consecutive effective March weeks 21, in 2019.March In 2019.March On2020, March NLEX 20, Corp. 2019, posted the TRB an issuedextension a Notice of the to Surety Start CollectionBond for six effective (6) months March and 21, was 2019. further In Marchextended 2020, for anotherNLEX Corp. six (6) posted months an in extension September of the2020. Surety Bond for six (6) months and was further extended for another six (6) months in September 2020. C3-R10 Add-on Toll Rate Petition. On August 5, 2020, the TRB issued a Resolution which C3-R10provisionally Add-on approved Toll Rate and Petition. allowed OnNLEX August Corp. 5, to2020, implement the TRB the issued add-on a Resolution toll for the whichOpen System provisionallysubject of the approvedPetition. On and November allowed NLEX 20, 2020, Corp. the to TRB implement issued thea Notice add-on to tollStart for Collection the Open effectiveSystem subjectNovember of the 23, Petition. 2020. NLEX On November Corp. implemented 20, 2020, thethe TRBtoll adjustment issued a Notice starting to StartNovember Collection 25, 2020. effective November 23, 2020. NLEX Corp. implemented the toll adjustment starting November 25, 2020. NLEX Lane Widening Phase 2 Add-on Toll Rate Petition. On February 18, 2020, NLEX Corp. as NLEXpetitioner-applicant, Lane Widening filed Phase a Petition 2 Add-on for ImplementationToll Rate Petition. of Approved On February Adjustment 18, 2020, to NLEX Authorized Corp. Tollas petitioner-applicant,Rates with Application filed for a ProvisionalPetition for ReliefImplementation with the TRB of Approved praying for Adjustment the adjustment to Authorized of the toll Toll rate Ratesfor the with substantially Application completed for Provisional expansion Relief of NLEX with the Segment TRB praying 7 and San for theFernando adjustment Interchange of the toll (NLEX rate forLane the Widening substantially Phase completed 2 Add-on expansion Toll Rate ofPetition). NLEX Segment 7 and San Fernando Interchange (NLEX Lane Widening Phase 2 Add-on Toll Rate Petition).

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Arbitration. In August 2015, NLEX Corp. wrote the ROP, acting by and through the TRB, a Final DemandArbitration. for CompensationIn August 2015, based NLEX on Corp.overdue wrote 2013 the and ROP, 2015 acting Toll Rateby and Adjustments through the (Final TRB, Demand).a Final InDemand the letter, for CompensationNLEX Corp. stated based that on theoverdue ROP’s/TRB’s 2013 and inexcusable2015 Toll Rate refusal Adjustments to act on the(Final 2012 Demand). PetitionIn the letter, and 2014NLEX Petition Corp. statedis in total that disregardthe ROP’s/TRB’s and a culpable inexcusable violation refusal of applicable to act on thelaws 2012 and contractualPetition and provisions 2014 Petition on the is inmatter, total disregardto the great and prejudice a culpable of violationNLEX Corp., of applicable which has laws continuously and reliedcontractual in good provisions faith on onsuch the contractual matter, to provisionsthe great prejudice as well asof onNLEX the timely Corp., and which proper has performancecontinuously ofrelied the inROP’s/TRB’s good faith on legal such and contractual contractual provisions duties. as well as on the timely and proper performance of the ROP’s/TRB’s legal and contractual duties. In view of the failure of the ROP/TRB to heed the Final Demand, NLEX Corp. sent a Notice of DisputeIn view ofto the failureROP/TRB of the dated ROP/TRB September to heed 11, 2015the Final invoking Demand, STOA NLEX Clause Corp. 19 (Settlementsent a Notice of of Disputes).Dispute to theSTOA ROP/TRB Clause dated19.1 states September that the 11, parties 2015 invokingshall endeavor STOA to Clause amicably 19 (Settlementsettle the dispute of withinDisputes). sixty STOA (60) calendar Clause 19.1days. states The thatTRB the sent parties several shall letters endeavor to NLEX to amicably Corp. requesting settle the thedispute extensionwithin sixty of (60)the amicable calendar settlementdays. The period.TRB sent However, several letters NLEX to Corp. NLEX has Corp. not received requesting any the feasible settlementextension of offer the fromamicable the ROP/TRB. settlement period. However, NLEX Corp. has not received any feasible settlement offer from the ROP/TRB. Accordingly, on April 4, 2016, NLEX Corp. was compelled to issue a Notice of Arbitration and StatementAccordingly, of Claimon April (Notice 4, 2016, of Arbitration) NLEX Corp. to was the compelledROP, acting to by issue and a through Notice ofthe Arbitration TRB, consistent and withStatement STOA of Clause Claim 19(Notice in order of Arbitration)to preserve itsto rightsthe ROP, under acting the STOA.by and through In the Notice the TRB, of Arbitration, consistent NLEXwith STOA Corp. Clause appointed 19 in retired order SCto preserve Justice Joseits rights C. Vitug under as the its nomineeSTOA. In to thethe Noticearbitral of tribunal. Arbitration, NLEX Corp. appointed retired SC Justice Jose C. Vitug as its nominee to the arbitral tribunal. In a letter dated May 3, 2016, the ROP, acting by and through the Office of the Solicitor General (OSG),In a letter notified dated MayNLEX 3, Corp.2016, ofthe its ROP, appointment acting by of and retired through SC Chiefthe Office Justice of Reynatothe Solicitor S. Puno General as its nominee(OSG), notified to the arbitral NLEX tribunal.Corp. of its appointment of retired SC Chief Justice Reynato S. Puno as its nominee to the arbitral tribunal. In a letter dated June 1, 2016, NLEX Corp. proposed that the arbitration be held in Singapore which isIn thea letter seat datedof arbitration June 1, 2016,that the NLEX ROP Corp.has chosen proposed for its that various the arbitration PPP projects, be held and in proposed Singapore the which Singaporeis the seat ofInternational arbitration Arbitrationthat the ROP Center has chosen as the forAppointing its various Authority. PPP projects, The proposal and proposed was accepted the bySingapore the ROP, International acting by and Arbitration through Centerthe OSG as inthe a Appointingletter dated JulyAuthority. 13, 2016 The but proposal reiterated was itsaccepted previousby the ROP, proposal acting that by aand Philippine-based through the OSG institution/person in a letter dated be July the 13,Appointing 2016 but Authority. reiterated its previous proposal that a Philippine-based institution/person be the Appointing Authority. On June 27, 2017, the initial case management conference was held in Singapore. On June 27, 2017, the initial case management conference was held in Singapore. On December 11, 2017, NLEX Corp. submitted its Updated Statement of Claim. On December 11, 2017, NLEX Corp. submitted its Updated Statement of Claim. On December 27, 2017, Respondent ROP/TRB filed its request for bifurcation, which was accordingly granted,On December i.e., the 27, proceedings 2017, Respondent were divided ROP/TRB into two filed parts: its request first, the for issue bifurcation, on whether which or wasnot theaccordingly tribunal hasgranted, jurisdiction i.e., the over proceedings NLEX Corp.’s were divided claim, intoand second,two parts: the first, main the merits issue of on the whether claim oras notset forththe tribunal in the Updatedhas jurisdiction Statement over of NLEX Claim. Corp.’s claim, and second, the main merits of the claim as set forth in the Updated Statement of Claim. In January 2018, the ROP/TRB and NLEX Corp. submitted their respective statements on the matter of jurisdiction.In January 2018, In July the 2018,ROP/TRB the Arbitral and NLEX Tribunal Corp. issued submitted Procedural their respective Order No. statements 2 whereby on the the Arbitral matter of Tribunaljurisdiction. declined In July to 2018,dismiss the the Arbitral claim onTribunal the basis issued of the Procedural ROP/TRB’s Order objections No. 2 whereby to jurisdiction the Arbitral and orderedTribunal the declined ROP/TRB to dismiss to submit the claimits Statement on the basis of Defense. of the ROP/TRB’s In September objections 2018, the to ROP/TRB jurisdiction submitted and itsordered Statement the ROP/TRB of Defense. to submit In October its Statement to November of Defense. 2018, NLEX In September Corp. and 2018, the theROP/TRB ROP/TRB submitted submitted their respectiveits Statement Requests of Defense. for Production In October of toDocuments, November Objections2018, NLEX to theCorp. Request and the for ROP/TRB Production submitted of their Documents,respective Requests and Reply for toProduction the Objections of Documents, to the Request Objections for Production to the Request of Documents. for Production In December of 2018 andDocuments, January 2019,and Reply the Arbitral to the Objections Tribunal resolved to the Request NLEX for Corp’s Production and the of ROP/TRB’s Documents. Request In December for 2018 Productionand January of 2019, Documents. the Arbitral Tribunal resolved NLEX Corp’s and the ROP/TRB’s Request for Production of Documents.

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In February 2019, the ROP/TRB informed the Arbitral Tribunal that it has released a Consolidated ResolutionIn February on 2019, NLEX the Corp.’sROP/TRB pending informed 2012 the and Arbitral 2014 petitions Tribunal for that toll it ratehas releasedadjustment. a Consolidated In the ConsolidatedResolution on Resolution, NLEX Corp.’s the TRBpending approved 2012 and and 2014 allowed petitions the implementation for toll rate adjustment. of toll rates In onthe a staggered basisConsolidated in 2018, Resolution,2020, 2021, the and TRB 2023. approved In February and allowedto March the 2019, implementation NLEX Corp. of filed toll ratesits Reply, on a staggered Supplementalbasis in 2018, Reply,2020, 2021, and Addendum and 2023. Into Februarythe Supplemental to March Reply 2019, while NLEX the Corp. ROP/TRB filed its filed Reply, its Rejoinder. InSupplemental March to April Reply, 2019, and NLEX Addendum Corp. toand the the Supplemental Republic submitted Reply while their therespective ROP/TRB witness filed statements. its Rejoinder. In MayIn March 2019, to NLEX April 2019,Corp. NLEXand the Corp. Republic and thesubmitted Republic pre-hearing submitted documents their respective like the witness core bundlestatements. of In documentsMay 2019, consistingNLEX Corp. of pleadings,and the Republic witness submitted statements, pre-hearing factual exhibits, documents and legallike the authorities. core bundle of documents consisting of pleadings, witness statements, factual exhibits, and legal authorities. On June 24 to 27, 2019 the arbitration hearings were held in Singapore. In August 2019, NLEX Corp. andOn Junethe ROP/TRB 24 to 27, 2019 submitted the arbitration their respective hearings Post-Hearing were held in Briefs. Singapore. On December In August 13,2019, 2019, NLEX NLEX Corp. Corp. soughtand the fromROP/TRB the Arbitral submitted Tribunal their arespective 60-day suspension Post-Hearing of the Briefs. proceedings On December for the parties13, 2019, to discuss NLEX theCorp. matter.sought from On December the Arbitral 19, Tribunal 2019, the a 60-day Arbitral suspension Tribunal granted of the proceedings the requested for 60-day the parties suspension. to discuss In the Februarymatter. On 2020, December NLEX 19,Corp. 2019, and the the Arbitral Republic Tribunal requested granted the Arbitral the requested Tribunal 60-day for a suspension.further suspension In of theFebruary proceedings 2020, NLEXfor a period Corp. of and 60 the days Republic or until requestedApril 17, 2020.the Arbitral In April Tribunal 2020, thefor Republica further suspensionagreed to of requestthe proceedings the Arbitral for aTribunal period offor 60 a daysfurther or suspensionuntil April 17,of the 2020. proceedings In April 2020,up to Maythe Republic 10, 2020 agreed only. Theto Arbitralrequest the Tribunal Arbitral granted Tribunal the forrequests. a further On suspension May 11, 2020, of the the proceedings Arbitral Tribunal up to May noted 10, that 2020 the only. parties The have notArbitral reached Tribunal a settlement granted agreement the requests. and On confirmed May 11, that2020, it willthe Arbitralresume itsTribunal deliberations noted that in the the arbitration parties have proceedings.not reached a settlementOn August agreement 15, 2020, theand Arbitral confirmed Tribunal that it informedwill resume the its parties deliberations that it is in the arbitrationprocess of finalizingproceedings. its deliberations, On August 15, is 2020,currently the exchangingArbitral Tribunal notes informedon the draft the award, parties and that would it is in do the its process utmost of to issuefinalizing the award its deliberations, in the following is currently months. exchanging The arbitration notes oncase the is draftstill pendingaward, and as at would March do 19, its 2021.utmost to issue the award in the following months. The arbitration case is still pending as at March 19, 2021. Total amount of compensation for TRB’s inaction on lawful toll rate adjustments, covering the toll rate petitionsTotal amount of the of NLEX compensation (2012, 2014, for TRB’s 2016 andinaction 2018 on petitions), lawful toll and rate of adjustments,the SCTEX is covering approximately the toll atrate P=15.1petitions billion of the and NLEX =13.0P (2012, billion 2014, (net of2016 VAT and and 2018 net petitions), of Government’s and of the share) SCTEX as at isDecember approximately 31, 2020 at andP=15.1 2019, billion respectively. and =13.0P billion (net of VAT and net of Government’s share) as at December 31, 2020 and 2019, respectively. Toll Rate Adjustments - CIC. CIC has a pending claim for compensation against the ROP, acting by and throughToll Rate the Adjustments TRB, in the - CICamount. CIC of hasP=3.2 a billionpending and claim P=2.7 for billion compensation (VAT-exclusive, against theand ROP, net of acting PRA’s by share) and asthrough of December the TRB, 31, in 2020 the amount and 2019, of P=3.2 respectively. billion and The P=2.7 Company’s billion (VAT-exclusive, claim is based andon TRB’s net of inactionPRA’s share) on lawfulas of December toll rate adjustments 31, 2020 and which 2019, were respectively. due in January The Company’s 1, 2012, 2014, claim 2015 is based and 2016. on TRB’s CIC sentinaction a on demandlawful toll letter rate in adjustments August 2015 which to TRB were seeking due in paymentJanuary 1, of 2012, the said 2014, amount. 2015 andTRB 2016. disputed CIC the sent demand a letterdemand and letter claimed in August that no 2015 compensation to TRB seeking is due paymentto CIC as of the the toll said rate amount. adjustment TRB petitions disputed have the demandnot yet beenletter resolved.and claimed Subsequently, that no compensation CIC sent a is Notice due to of CIC Dispute as the to toll the rate TRB adjustment in September petitions 2015 have pursuant not yet to thebeen dispute resolved. resolution Subsequently, provisions CIC of sent the TOA.a Notice CIC of filedDispute a Petition to the TRBfor Periodic in September Toll Rate 2015 Adjustment pursuant to on Septemberthe dispute 20,resolution 2016. TRB provisions replied, of stating the TOA. that CICthey filedare studying a Petition the for petition Periodic based Toll on Rate their Adjustment Rule of on Procedure.September 20, 2016. TRB replied, stating that they are studying the petition based on their Rule of Procedure. On November 16, 2016, CIC filed a Motion for Provisional Approval of Toll Rates under petition filed in 2014.On November There has 16, been 2016, no CIC action filed on athe Motion 2014 forpetition Provisional on the MotionApproval for of Provisional Toll Rates Approval.under petition filed in 2014. There has been no action on the 2014 petition on the Motion for Provisional Approval. On February 7, 2017, the CIC received a notice from the Permanent Court of Arbitration that Chelva RetnamOn February Rajah 7, has 2017, been the designated CIC received the appointinga notice from authority the Permanent who will Court appoint of Arbitrationthe chairperson that ofChelva the ArbitrationRetnam Rajah Panel. has been designated the appointing authority who will appoint the chairperson of the Arbitration Panel. On September 30, 2017, the CIC filed another Petition for the next cycle, covering both R-1 and R-1 expresswayOn September extension. 30, 2017, The the Petition CIC filed has another been published Petition forin athe newspaper next cycle, of coveringgeneral circulation both R-1 and and R-1 the Companyexpressway is extension.awaiting TRB’s The Petition action thereonhas been as published of February in a 26, newspaper 2020. of general circulation and the Company is awaiting TRB’s action thereon as of February 26, 2020. In December 2017, Claimants CIC and PRA submitted their updated statement of claim with the ArbitrationIn December Tribunal. 2017, Claimants On December CIC and 29, PRA 2017, submitted the Arbitration their updated Tribunal statement issued a ofruling claim bifurcating with the the proceedings,Arbitration Tribunal. i.e., separating On December the issue 29, on 2017,its jurisdiction the Arbitration from the Tribunal merits issuedof the maina ruling claim bifurcating for arbitration. the proceedings, i.e., separating the issue on its jurisdiction from the merits of the main claim for arbitration. *SGVFSM006036* *SGVFSM006036*

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On January 12, 2018, TRB has filed with the Arbitration Tribunal its jurisdictional objections, essentially Onalleging January arguments 12, 2018, in TRBsupport has of filed its intention with the Arbitrationto immediately Tribunal have itsthe jurisdictional arbitration case objections, dismissed essentially for lack allegingof jurisdiction arguments on the in part support of the of Tribunal. its intention The to Respondent immediately has have filed the its arbitration jurisdictional case objectionsdismissed andfor lackCIC andof jurisdiction PRA filed ontheir the opposition part of the to Tribunal. those objections The Respondent on January has 26, filed 2018. its jurisdictional objections and CIC and PRA filed their opposition to those objections on January 26, 2018. The Procedural order no. 2 issued by TRB on July 9, 2018: (a) Denied the request for dismissal of the Theclaims; Procedural (b) reserved order the no. decision 2 issued on by the TRB objections on July to9, jurisdiction2018: (a) Denied and admissibility the request forto thedismissal merit phase of the of claims;the proceedings; (b) reserved ( c) theinstructed decision the on filing the objections in the Statement to jurisdiction of Defense and admissibilityfrom the respondent, to the merit to which phase the of theclaimant proceedings; may file ( ac) reply instructed brief ;the and filing (d) instructed in the Statement the parties of Defense to confer from and theagree respondent, on an updated to which timetable the claimantto file pleadings, may file which a reply must brief be ; andreported (d) instructed to the Tribunal the parties not laterto confer than Augustand agree 6, 2018.on an updated timetable to file pleadings, which must be reported to the Tribunal not later than August 6, 2018. On August 28, 2018, CIC filed its Compliance Ad Cautelam to TRB's Order stating that: (a) Under the OnToll August Operation 28, 2018,Agreement, CIC filed PRA its and/or Compliance CIC each Ad haveCautelam distinct to andTRB's separate Order rightstating to that:a periodic (a) Under the Tolladjustment Operation of the Agreement, Agreed Toll PRA Rate. and/or Petitions CIC each for toll have adjustments distinct and can separate be filed right by eitherto a periodic PRA or CIC, adjustment(b) CIC filed of its the petition Agreed within Toll Rate. the prescribed Petitions forperiod toll adjustmentsand the subsequent can be filedfiling by of eithera similar PRA petition or CIC, by (b)PRA CIC is afiled mere its superfluity. petition within On Octoberthe prescribed 12, 20 period 18, CIC and filed the its subsequent petition for filing approval of a similar of add-on petition agreed by toll PRArate with is a applicationmere superfluity. for provisional On October relief 12, for 20 Phase 18, CIC 1 of filed Segment its petition project, for requestingapproval of the add-on TRB agreedto approve toll rateand allowwith application the implementation for provisional of an add-onrelief for toll Phase of P=0.20 1 of perSegment km. project, requesting the TRB to approve and allow the implementation of an add-on toll of P=0.20 per km. On January 12, 2019, Atty. Ernesto B. Francisco, Jr. filed his Petition for Review Ad Cautelam. On OnMarch January 2, 2019, 12, 2019,CIC filed Atty. its Ernesto Comment/Opposition B. Francisco, Jr. to filed the Petition his Petition for Review for Review Ad Cautelam. Ad Cautelam. On On MarchJuly 31, 2, 2019, 2019, CIC CIC filed filed its its Urgent Comment/Opposition Motion to Resolve to the the Petition 2017 Petition. for Review Ad Cautelam. On July 31, 2019, CIC filed its Urgent Motion to Resolve the 2017 Petition. In October to November 2018, Claimants CIC and PRA; and the ROP/TRB (collectively, the “Parties”) Insubmitted October their to November respective 2018, Requests Claimants for Production CIC and ofPRA; Documents, and the ROP/TRB Objections (collectively, to the Request the for “Parties”) submittedProduction their of Documents, respective Requestsand Reply for to Production the Objections of Documents, to the Request Objections for Production to the Request of Documents. for In ProductionDecember 2018 of Documents, and January and 2019, Reply the to Arbitral the Objections Tribunal to resolved the Request the Parties’ for Production Request of for Documents. Production In of DecemberDocuments. 2018 and January 2019, the Arbitral Tribunal resolved the Parties’ Request for Production of Documents. Within the period of March to May 2019, Claimants CIC and PRA and the ROP/TRB submitted their Withinrespective the witnessperiod of statements, March to pleadings,May 2019, factual Claimants exhibits, CIC andlegal PRA authorities, and the andROP/TRB other pre-hearing submitted their respectivedocuments. witness statements, pleadings, factual exhibits, legal authorities, and other pre-hearing documents. On June 24 to 27, 2019 the arbitration hearings were held in Singapore. In August 2019, the Claimants OnCIC June and 24PRA to 27,and 2019the ROP/TRB the arbitration submitted hearings their were respective held in Post-Hearing Singapore. In Briefs. August In 2019, December the Claimants 2019, CICClaimants and PRA CIC and and the PRA ROP/TRB sought from submitted the Arbitral their respective Tribunal aPost-Hearing 60-day suspension Briefs. of In the December proceedings 2019, for Claimantsthe parties CICto discuss and PRA the matter.sought fromIn February the Arbitral 2020, Tribunal the parties a 60-day requested suspension the Arbitral of the Tribunal proceedings for a for thefurther parties suspension to discuss of thethe matter.proceedings In February for a period 2020, of the 60 parties days or requested until April the 17, Arbitral 2020. TheTribunal Arbitral for a furtherTribunal suspension granted the of request. the proceedings for a period of 60 days or until April 17, 2020. The Arbitral Tribunal granted the request. On May 10, 2020, CIC informed the Arbitral Tribunal that Claimants CIC and PRA and the ROP/TRB Onfailed May to reach10, 2020, an amicable CIC informed settlement the Arbitral and requested Tribunal the that Arbitral Claimants Tribunal CIC to and resume PRA deliberationsand the ROP/TRB for the failedissuance to reachof award. an amicable On May settlement11, 2020, theand Arbitral requested Tribunal the Arbitral wrote Tribunal the parties to toresume confirm deliberations that it would for the issuanceresume the of case.award. On On May May 14, 11, 2020, 2020, the the Permanent Arbitral Tribunal Court of wroteArbitration, the parties on behalf to confirm of the that Arbitral it would resumeTribunal, the directed case. On Claimants May 14, CIC2020, and the PRA Permanent and the Court ROP/TRB of Arbitration, to make supplementary on behalf of the deposits, Arbitral which Tribunal,CIC complied directed with. Claimants The Arbitral CIC Tribunaland PRA sent and a the confirmation ROP/TRB ofto itsmake receipt supplementary of CIC’s share deposits, in the which CICsupplementary complied with.deposit. The Arbitral Tribunal sent a confirmation of its receipt of CIC’s share in the supplementary deposit. On August 15, 2020, the Permanent Court of Arbitration sent a letter to the Claimants CIC and PRA and Onthe ROP/TRB,August 15, 2020,informing the Permanent them that theCourt Arbitral of Arbitration Tribunal sentis in athe letter process to the of Claimants finalizing CICits deliberations and PRA and thefor theROP/TRB, case. informing them that the Arbitral Tribunal is in the process of finalizing its deliberations for the case. *SGVFSM006036* *SGVFSM006036*

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On December 23, 2020, Claimant CIC filed its Manifestation of Withdrawal with the Permanent Court of OnArbitration: December (i) 23, stating 2020, that Claimant its withdrawal CIC filed of its Manifestationclaims in the arbitration of Withdrawal is without with theprejudice Permanent to its Court legal of Arbitration:positions under (i) statinglaw and that contract; its withdrawal and (ii) requestingof its claims the in Permanent the arbitration Court is ofwithout Arbitration prejudice to issue to its a legal positionsresolution under in accordance law and contract;with the andManifestation (ii) requesting of Withdrawal. the Permanent On Court December of Arbitration 31, 2020, to the issue Permanent a resolutionCourt of Arbitration in accordance acknowledged with the Manifestation receipt of Claimant of Withdrawal. CIC’s Manifestation On December of 31,Withdrawal 2020, the and Permanent Courtinstructed of Arbitration Claimant PRAacknowledged and Respondent receipt ROP, of Claimant acting byCIC’s and Manifestationthrough TRB, ofto Withdrawalcomment on and CIC’s instructedManifestation Claimant of Withdrawal PRA and andRespondent clarify whether ROP, acting the Parties by and have through reached TRB, an toagreement comment on on the CIC’s settlement Manifestationof the arbitration of Withdrawalcost and submit and theirclarify respective whether proposalthe Parties if haveno agreement reached anhas agreement been reached on the yet. settlement of the arbitration cost and submit their respective proposal if no agreement has been reached yet. On January 6, 2021, Claimant PRA filed its Comment stating it has no objection to CIC’s Manifestation Onof Withdrawal January 6, 2021,and manifested Claimant thatPRA claimant filed its CIC Comment is responsible stating forit has the nosettlement objection and to fullCIC’s payment Manifestation of costs. ofOn Withdrawal January 13, and 2021, manifested Respondent that claimant ROP filed CIC is its responsible Comment for stating the settlement that it has and no full objection payment to of CIC’scosts. Onwithdrawal January of 13, its 2021,claims. Respondent ROP filed its Comment stating that it has no objection to CIC’s withdrawal of its claims. After separately requesting for time to submit the required proposal for the apportionment of arbitration Aftercosts, separatelyRespondent requesting ROP, filed for on time February to submit 8, 2021, the required its Manifestation proposal for stating the apportionment that Claimants of CIC arbitration and PRA costs,should Respondent be required ROP,to bear filed all costson February of the arbitration, 8, 2021, its including Manifestation costs statingand expenses that Claimants of counsel. CIC On and PRA shouldFebruary be 8,required 2021, CIC to bear reiterates all costs that of CIC the arbitration,is withdrawing including its claims costs in and consideration expenses of of counsel. TRB’s requestOn for Februarysuch a withdrawal 8, 2021, CICand uponreiterates the expectationthat CIC is withdrawingthat TRB will its in claims exchange in consideration honor and implement of TRB’s the request parties’ for suchagreed a withdrawalsettlement. CICand uponsubmits the thatexpectation the costs that should TRB be will split in and exchange equally honor shared and by implement the Claimants the parties’and the agreedRespondent. settlement. CIC submits that the costs should be split and equally shared by the Claimants and the Respondent. On February 18, 2021, the Permanent Court of Arbitration informed the Parties that a draft Termination OnOrder February and Award 18, 2021, on Costs the Permanentis being prepared Court of and Arbitration requested informed the Parties the to Parties provide that any a draftcomments Termination on the Orderdraft. and Award on Costs is being prepared and requested the Parties to provide any comments on the draft. On March 8, 2021, CIC e-mailed the Permanent Court of Arbitration stating that it has no comments on Onthe draftMarch Termination 8, 2021, CIC Order. e-mailed On even the Permanent date, Claimant Court PRA of Arbitration submitted itsstating comment that it to has the no draft comments on theTermination draft Termination order stating, Order. among On even others, date, that: Claimant (i) the withdrawalPRA submitted of its its claim comment shall onlyto the take draft effect upon Terminationthe issuance oforder TRB stating, of an initiatingamong others, Resolution that: (i) approving the withdrawal the toll of adjustments its claim shall of the only subject take effectcase, toupon be theimplemented issuance of according TRB of anto initiatinga mutually Resolution agreed staggered approving implementation the toll adjustments schedule; of theand subject (ii) PRA case, reserves to be implementedits rights to claim according the foregone to a mutually revenues agreed in the staggered future. implementation schedule; and (ii) PRA reserves its rights to claim the foregone revenues in the future. The arbitration is still pending as at March 19, 2021. The arbitration is still pending as at March 19, 2021. R1 Enhancement Phase 1. On July 15, 2019, TRB issued a Resolution (a copy of which was received R1by CICEnhancement on October Phase 14, 2019) 1. On allowing July 15, the2019, implementation TRB issued a ofResolution the Add-On (a copyToll Rateof which of P=1.00, was received P=2.00 byand CIC P=3.00 on (VAT-inclusive)October 14, 2019) for allowing vehicle theclasses implementation 1, 2 and 3, respectively, of the Add-On subject Toll toRate the of continuing P=1.00, P=2.00 andreview P=3.00 and (VAT-inclusive) validation by TRB for tovehicle determine classes the 1, reasonableness 2 and 3, respectively, of its imposition subject to and the the continuing issuance by reviewCOA of and its recommendationvalidation by TRB once to determine it has completed the reasonableness its audit, effective of its imposition October 24, and 2019. the issuance by COA of its recommendation once it has completed its audit, effective October 24, 2019. C5 South Link Expressway Segment 3A-1. On July 4, 2019, CIC filed its Petition for Approval of C5Initial South Toll Link for C5Expressway South Link Segment Expressway 3A-1. and On Provisional July 4, 2019, or CICInterim filed Initial its Petition Toll for for Segment Approval 3A-1 of Initialrequesting Toll TRBfor C5 to Southapprove Link and Expressway allow the implementation and Provisional of or the Interim initial Initial toll fees. Toll for Segment 3A-1 requesting TRB to approve and allow the implementation of the initial toll fees. On July 10, 2019, TRB issued an Order requiring CIC to publish in full the contents of the Petition in Ona newspaper July 10, 2019, of general TRB circulationissued an Order with arequiring notice that CIC all to interested publish in tollway full the users contents may offile the a petitionPetition forin areview. newspaper On July of general 13, 18, circulationand 22, 2019, with CIC a notice completed that all the interested publication tollway requirements users may of file TRB. a petition for review. On July 13, 18, and 22, 2019, CIC completed the publication requirements of TRB. On August 15, 2019, TRB issued a Resolution (a copy of which was received by CIC on OnOctober August 10, 15, 2019) 2019, approving TRB issued and allowinga Resolution the implementation(a copy of which of was the receivedprovisional by CICinitial on toll rate of OctoberP=22.00, P=44.0010, 2019) and approving P=66.00 (VAT-inclusive) and allowing the for implementation vehicle classes of 1, the 2 and provisional 3, respectively, initial tollsubject rate toof the P=22.00, P=44.00 and P=66.00 (VAT-inclusive) for vehicle classes 1, 2 and 3, respectively, subject to the *SGVFSM006036* *SGVFSM006036*

224 - 116 - - 116 - review by the Commission on Audit and to the continuing authority of the TRB to review its reviewreasonableness, by the Commission effective October on Audit 24, and 2019. to the continuing authority of the TRB to review its reasonableness, effective October 24, 2019. The authority to collect the above-mentioned provisional initial toll is valid only for a period of six The(6) months authority counted to collect from the the above-mentioned start of actual toll provisional collection. initial Within toll that is validperiod, only CIC for must a period submit of tosix (6)TRB months an updated counted investment from the recovery start of actual scheme toll for collection. the entire Within CAVITEX, that period, including CIC the must C5 submit South Linkto TRBExpressway. an updated investment recovery scheme for the entire CAVITEX, including the C5 South Link Expressway. On April 24, 2020, collection of C5 South Link Segment 3A-1 toll was stopped due to pending Onupdated April investment 24, 2020, collectionrecovery schemeof C5 South for the Link entire Segment CAVITEX. 3A-1 toll On wasJuly stopped 6, 2020, due TRB to issuedpending an updatedOrder allowing investment the resumptionrecovery scheme of collection for the andentire that CAVITEX. such authority On Julyto collect 6, 2020, shall TRB be validissued until an OrderOctober allowing 22, 2020. the resumption of collection and that such authority to collect shall be valid until October 22, 2020. Value-Added Tax (VAT) Assessments. On various dates, NLEX Corp. received VAT assessments Value-Addedfrom the BIR Taxcovering (VAT) taxable Assessments. years 2006On tovarious 2009 dates,totalling NLEX =3,066P Corp. million received including VAT penalties.assessments The fromassessments the BIR are covering at various taxable stages years On 2006 June to11, 2009 2010, totalling NLEX =3,066PCorp. filed million its Positionincluding Paper penalties. with theThe assessmentsBIR reiterating are its at claimvarious that stages it is notOn subjectJune 11, to 2010, VAT NLEXon toll Corp.fees. filed its Position Paper with the BIR reiterating its claim that it is not subject to VAT on toll fees. On April 3, 2014, the BIR accepted and approved NLEX Corp’s application for abatement and issued Ona Certificate April 3, 2014, of Approval the BIR for accepted the cancellation and approved of the NLEX basic Corp’soutput tax,application interest forand abatement compromise and penalty issued aamounting Certificate to of P=1,010.5 Approval million for the and cancellation P=584.6 million of the for basic taxable output years tax, 2006 interest and and 2007, compromise respectively. penalty amounting to P=1,010.5 million and P=584.6 million for taxable years 2006 and 2007, respectively. Notwithstanding the foregoing, management believes, in consultation with its legal counsel, that in Notwithstandingany event, the STOA the foregoing, amongst NLEX management Corp, ROP, believes, acting in byconsultation and through with the its TRB, legal and counsel, PNCC, that in anyprovides event, NLEX the STOA Corp. amongst with legal NLEX recourse Corp, in ROP,order actingto protect by and its lawfulthrough interests the TRB, in caseand PNCC,there is a provideschange in NLEX existing Corp. laws with which legal makes recourse the performance in order to protect by NLEX its lawful Corp. interestsof its obligations in case there materially is a changemore expensive. in existing laws which makes the performance by NLEX Corp. of its obligations materially more expensive. Real Property Tax (RPT) Asessments. NLEX Corp. and MPT North are also parties to certain claims andReal assessments Property Tax relating (RPT) toAsessments. real property NLEX taxes Corp. (RPT) and as follows:MPT North are also parties to certain claims and assessments relating to real property taxes (RPT) as follows: ƒ In 2004, MPT North received RPT assessments covering Segment 7 located in the province of ƒ InBataan 2004, for MPT the Northperiod received from 1997 RPT to assessmentsJune 2005 amounting covering Segmentto P=98.5 million7 located for in alleged the province delinquency of Bataanproperty for tax. the MPT period North from appealed 1997 to Junebefore 2005 the amountingLocal Board to of P=98.5 Assessment million forAppeals alleged (LBAA) delinquency of propertyBataan and tax. prayed MPT forNorth the appealedcancellation before of the the assessment. Local Board In of the Assessment said appeal, Appeals MPT North(LBAA) invoked of Bataanthat the andproperty prayed is forowned the cancellationby the ROP, ofhence, the assessment. exempt from In RPT. the said The appeal, case is MPT still pendingNorth invoked before thatthe LBAA the property of . is owned by the ROP, hence, exempt from RPT. The case is still pending before the LBAA of Bataan. ƒ In July 2008 and April 2013, NLEX Corp. filed Petitions for Review under Section 226 of the ƒ InLocal July Government 2008 and April Code 2013, with NLEX the Local Corp. Board filed of Petitions Assessment for Review Appeals under (LBAA) Section of the 226 Province of the Localof Bulacan Government seeking Codeto declare with asthe null Local and Board void taxof Assessmentdeclarations Appeals issued by (LBAA) the Provincial of the Province Assessor of Bulacanthe Province seeking of Bulacan. to declare The as nullsaid andtax declarationsvoid tax declarations were issued issued in the by namethe Provincial of NLEX Assessor Corp. as ofowner/administrator/beneficial the Province of Bulacan. The user said of tax the declarations NLEX and categorizedwere issued thein the NLEX name as of a NLEXcommercial Corp. as owner/administrator/beneficialproperty subject to RPT. The LBAA user of has the yet NLEX to conduct and categorized an ocular theinspection NLEX asto determinea commercial propertywhether thesubject properties, to RPT. subject The LBAA of the taxhas declarations,yet to conduct form an ocular part of inspection the NLEX, to which determine NLEX whetherCorp. argues the properties, is property subject of the publicof the taxdominion declarations, and exempt form partfrom of RPT. the NLEX, The matter which is NLEXstill Corp.pending argues as at isMarch property 19, 2021.of the public dominion and exempt from RPT. The matter is still pending as at March 19, 2021.

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ƒ In September 2013, NLEX Corp. received notices of realty tax delinquencies for the years 2006 ƒ Into 2012September and 2013 2013, issued NLEX by Corp.the Provincial received Treasurernotices of ofrealty Bulacan tax delinquencies stating that if forNLEX the years Corp. 2006 fails to 2012pay or and remit 2013 the issued alleged by delinquent the Provincial taxes, Treasurer the remedies of Bulacan provided stating for under that if the NLEX law forCorp. the fails tocollection pay or remit of delinquent the alleged taxes delinquent shall be taxes,applied the to remedies enforce collection. provided for In under September the law 27, for 2013, the the collectionBureau of ofLocal delinquent Government taxes Financeshall be appliedof the Department to enforce collection.of Finance (DOF-BLGF)In September 27,wrote 2013, a letter the Bureauto the Province of Local of Government Bulacan advising Finance it toof holdthe Department in abeyance of any Finance further (DOF-BLGF) course of action wrote pertaining a letter to the Provincealleged real of propertyBulacan advisingtax delinquency. it to hold In in Octoberabeyance 2013, any furtherthe Provincial course ofTreasurer action pertaining of toBulacan the alleged has respected real property the directive tax delinquency. from the DOF-BLGFIn October 2013, to hold the the Provincial enforcement Treasurer of any of Bulacancollection has remedies respected in abeyance.the directive In from January the 2017,DOF-BLGF the Provincial to hold theTreasurer enforcement of Bulacan of any issued a collectionnotice of realty remedies tax delinquencies in abeyance. forIn January the years 2017, 2006 the to Provincial2017 stating Treasurer that it could of Bulacan apply the issued a noticeremedies of realtyprovided tax underdelinquencies the law forfor thethe collectionyears 2006 of to delinquent 2017 stating taxes. that Theit could matter apply is still the remediespending as provided at March under 19, 2021. the law for the collection of delinquent taxes. The matter is still pending as at March 19, 2021. The outcome of the claims on RPT cannot be presently determined. Management believes that these Theclaims outcome will not of have the claims a significant on RPT impact cannot on be the presently Company’s determined. consolidated Management financial believesstatements. that these claimsManagement will not and have its alegal significant counsel impact also believes on the Company’sthat the STOA consolidated also provides financial NLEX statements. Corp. with legal Managementrecourse in order and toits protect legal counsel its lawful also interests believes in that case the there STOA is a alsochange provides in existing NLEX laws Corp. which with makes legal recoursethe performance in order by to NLEXprotect Corp.its lawful of its interests obligations in case materially there is morea change expensive. in existing laws which makes the performance by NLEX Corp. of its obligations materially more expensive. JTSE outstanding case for underpayment of taxes in 2012. JTSE won its tax appeal on the disputed JTSEinput VAToutstanding for 2012 case tax for year underpayment based on the ofTax taxes Court in 2012.DecisionJTSE No.000888.16/2018/ won its tax appeal PP/M.IIBon the disputed Year input2019 datedVAT forSeptember 2012 tax 19, year 2019. based However, on the Tax on CourtDecember Decision 26, 2019, No.000888.16/2018/ DGT (Director GeneralPP/M.IIB of Year 2019Taxation) dated submitted September a judicial19, 2019. review However, (Peninjauan on December Kembali) 26, to 2019, the Supreme DGT (Director Court (Mahkamah General of Taxation)Agung) for submitted the Tax Court’s a judicial decision. review To(Peninjauan counter the Kembali) judicial toreview, the Supreme JTSE submitted Court (Mahkamah a contra Agung)memory for letter the to Tax the Court’s Supreme decision. Court (Mahkamah To counter theAgung) judicial on Februaryreview, JTSE 5, 2020. submitted Management a contra of JTSE memorybelieves thatletter the to taxthe caseSupreme will beCourt won (Mahkamah by the company. Agung) As on at FebruaryDecember 5, 31, 2020. 2020, Management JTSE has not of JTSEyet believesreceived thatresponse the tax on case its contra will be memory won by letterthe company. sent to the As Supreme at December Court 31, for 2020, its 2012 JTSE VAT. has Therenot yet is receivedno deadline response for the on Supreme its contra Court memory to respond letter sentto JTSE’s to the contraSupreme memory Court letter.for its Management2012 VAT. There believes is nothat deadline DGT will for appeal the Supreme to supreme Court court. to respond The corresponding to JTSE’s contra amount memory of the letter. assessment Management amounted believes to thatIDR20.0 DGT billion will appeal or =68.5P to supreme million. court. The corresponding amount of the assessment amounted to IDR20.0 billion or =68.5P million. Others. The companies in the toll operations segment are also parties to other cases and claims Others.arising fromThe thecompanies ordinary in course the toll of operations business filed segment by third are parties,also parties which to otherare either cases pending and claims decisions arisingby the courtsfrom the or areordinary subject course to settlement of business agreements. filed by third The parties,outcome which of these are claimseither pending cannot bedecisions bypresently the courts determined. or are subject In the to opinion settlement of management agreements. and The its outcome legal counsel, of these the claims eventual cannot liability be from presentlythese lawsuits determined. or claims, In ifthe any, opinion will not of managementhave a material and adverse its legal effect counsel, on the the Company’s eventual liability from theseconsolidated lawsuits financial or claims, statements. if any, will not have a material adverse effect on the Company’s consolidated financial statements. Power Power Performance-Based Regulations (“PBR”). MERALCO is among the Group A entrants to the PBR, Performance-Basedtogether with two (2) Regulations other private (“PBR”). DUs. MERALCO is among the Group A entrants to the PBR, together with two (2) other private DUs. Rate-setting under PBR is governed by the RDWR. The PBR scheme sets tariffs once every Rate-settingRegulatory Period under (“RP”)PBR is basedgoverned on the by regulatedthe RDWR. asset The base PBR (“RAB”) scheme ofsets each tariffs DU, once and everythe required Regulatoryoperating and Period capital (“RP”) expenditures based on (“OPEX” the regulated and “CAPEX”,asset base (“RAB”) respectively) of each to meetDU, andoperational the required operatingperformance and and capital service expenditures level requirements (“OPEX” responsive and “CAPEX”, to the respectively) need for adequate, to meet reliable operational and quality performancepower, efficient and service, service andlevel growth requirements of all customer responsive classes to the in needthe franchise for adequate, area asreliable approved and qualityby the power,ERC. PBR efficient also employsservice, anda mechanism growth of thatall customer penalizes classes or rewards in the a DUfranchise depending area as on approved its network by andthe ERC.service PBR performance. also employs a mechanism that penalizes or rewards a DU depending on its network and service performance.

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Rate filings and settings are done on a RP basis. One (1) RP consists of four (4) Regulatory Years Rate(“RYs”). filings A RYand forsettings MERALCO are done begins on a RP on basis.July 1 One and (1)ends RP on consists June 30 of of four the (4)following Regulatory year. Years (“RYs”).The 5th RP A for RY Group for MERALCO A DUs began begins on Julyon July 1, 2019 1 and and ends shall on endJune on 30 June of the 30, following 2023. year. The 5th RP for Group A DUs began on July 1, 2019 and shall end on June 30, 2023. In a Notice dated March 15, 2021, the ERC posted the 2nd Draft of the proposed Rules for Setting InDistribution a Notice dated Wheeling March Rates 15, 2021,(RDWR), the ERCand Regulatory posted the 2ndReset Draft for the of theJuly proposed 2022 to JuneRules 2026 for Setting Fifth DistributionRegulatory Period Wheeling for theRates First (RDWR), Entry Groupand Regulatory of Privately Reset Owned for the DistributionJuly 2022 Utilitiesto June 2026subject Fifth to RegulatoryPerformance Period Based for Regulation the First ,Entry 2nd DraftGroup of ofthe PrivatelyIssues Paper Ownedfor Distribution comments of Utilities all interested subject parties. to PerformanceThe deadline forBased submission Regulation of ,comments 2nd Draft isof on the AprilIssues 12, Paper 2021.for comments of all interested parties. The deadline for submission of comments is on April 12, 2021. Maximum Average Price (“MAP”) for MERALCO’s 3rd RP. After rate setting process for a RP, MaximumMERALCO Average goes through Price (“MAP”) a rate verification for MERALCO’s process for3rd each RP. RY After within rate settingthe RP. process In each forof RYsa RP, 2012, MERALCO2013, 2014 and goes 2015, through MERALCO a rate verification filed for the process respective for each MAP RY with within the theERC. RP. The In eachERC of RYs 2012, 2013,provisionally 2014 and approved 2015, MERALCO the distribution filed MAPs for the for respective each of theMAP RY. with However, the ERC. as Theat March ERC 19, 2021, provisionallyMERALCO is approved awaiting thethe distributionfinal approval MAPs of the for ERC. each of the RY. However, as at March 19, 2021, MERALCO is awaiting the final approval of the ERC. MERALCO’s Interim Average Rate beginning RY 2016. On July 10, 2015, the ERC provisionally MERALCO’sapproved an interim Interim average Average rate Rate of =1.3810beginningP per RY kWh 2016 (excluding. On July 10,efficiency 2015, the adjustment) ERC provisionally and the rate translationapproved an per interim customer average class, rate which of =1.3810P was reflected per kWh in the(excluding customer efficiency bills starting adjustment) July 2015. and the rate translationMERALCO per has customer completed class, the which presentation was reflected of its evidence in the customer and is set bills to filestarting its Formal July 2015. Offer of MERALCOEvidence (“FOE”) has completed after the theERC presentation has resolved of pendingits evidence motions. and is As set at to March file its 19, Formal 2021, Offer the ERC’s of Evidenceruling on these(“FOE”) motions after remainsthe ERC pending. has resolved pending motions. As at March 19, 2021, the ERC’s ruling on these motions remains pending. In a letter dated July 4, 2019, the ERC authorized the continued implementation of the interim Inaverage a letter rate dated but Julydirected 4, 2019, MERALCO, the ERC asauthorized well as other the continued distribution implementation utilities, to refund of the any interim remaining averageamount pertainingrate but directed to regulatory MERALCO, reset costs as well for asthe other previous distribution RPs. utilities, to refund any remaining amount pertaining to regulatory reset costs for the previous RPs. While MERALCO complied with the directive to refund the total amount of =263.9P million Whilerepresenting MERALCO regulatory complied reset costs,with the equivalent directive to to P=0.0731 refund the per total kWh amount in its July of =263.9P 2019 billing, million it wrote a representingletter seeking regulatory clarification reset or costs,reconsideration equivalent on to theP=0.0731 basis forper suchkWh refund, in its July including 2019 billing, the imposition it wrote aof letterand basis seeking for theclarification interest computed or reconsideration therein. The on refundthe basis was for included such refund, as a separate including line the item imposition in of andMERALCO’s basis for the July interest 2019 computedbilling to its therein. customers. The refund As at Marchwas included 19, 2021, as athe separate ERC has line yet item to replyin to MERALCO’s Julyletter. 2019 billing to its customers. As at March 19, 2021, the ERC has yet to reply to MERALCO’s letter. MERALCO’s CAPEX for 4th RP and RYs 2020 and 2021. Absent the release by the ERC of the final rulesMERALCO’s to govern CAPEX the filing for of4th the RP 4th and RP RYs and 2020 5th andRP, 2021MERALCO. Absent filed the releaseits applications by the ERC for approvalof the final of rulesauthority to govern to implement the filing its ofCAPEX the 4th program RP and pursuant5th RP, MERALCOto Section 20(b) filed of its Commonwealth applications for Act approval No. 146, of authorityas amended, to implement otherwise knownits CAPEX as the program Public Servicepursuant Act, to Section for each 20(b) of the of RPsCommonwealth beginning July Act 1, No. 2015. 146, as amended, otherwise known as the Public Service Act, for each of the RPs beginning July 1, 2015. Pending ERC’s approval, MERALCO manifested several projects as urgent or emergency in nature Pendingand proceeded ERC’s with approval, the implementation MERALCO manifested of said CAPEX several to projects avoid compromising as urgent or emergency the network in nature andreliability. proceeded with the implementation of said CAPEX to avoid compromising the network reliability. Distribution Rate True-Up Application. On December 23, 2020, MERALCO filed an Application forDistribution (1) confirmation Rate True-Up of the true-upApplication calculation. On December of the Actual 23, 2020, Weighted MERALCO Average filed Tariff an (“AWAT”)Application forvis-à-vis (1) confirmation ERC-approved of the Interim true-up Average calculation Rate of (“IAR”) the Actual for theWeighted lapsed regulatoryAverage Tariff years; (“AWAT”) and (2) vis-à-visapproval ERC-approvedof the final refund Interim scheme Average to account Rate for(“IAR”) the lapsed for the regulatory lapsed regulatory years. The years; lapsed and (2) approvalregulatory of years the final covered refund the scheme period fromto account July 2015 for the to lapsedNovember regulatory 2020 when years. MERALCO The lapsed was regulatoryimplementing years the covered IAR. MERALCO the period fromprayed July that 2015 a Decision to November be rendered: 2020 when (a) approving MERALCO was implementingMERALCO’s theproposed IAR. MERALCO mechanism toprayed address that the a Decision issue of thebe rendered:rates governing (a) approving the period from MERALCO’sJuly 2015 to November proposed 2020mechanism (“lapsed to period”)address thethrough issue theof thetrue-up rates mechanismgoverning the between period from JulyMERALCO’s 2015 to November AWAT and 2020 IAR; (“lapsed (b) confirming period”) throughMERALCO’s the true-up resulting mechanism calculation between of the total MERALCO’s AWAT and IAR; (b) confirming MERALCO’s resulting calculation of the total *SGVFSM006036* *SGVFSM006036*

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amount to be refunded to its customers of P= 13,886 million; (c) approving MERALCO’s proposed refundamount scheme to be refunded and refund to its period, customers within of 24P= 13,886 months million; or until (c) fully approving refunded, MERALCO’s to its customers; proposed and refund(d) declaring scheme all and issues refund relating period, to MERALCO’swithin 24 months lapsed or untilperiod fully (and refunded, until a new to its rate customers; has been and (d)determined declaring by all the issues ERC relating for the nextto MERALCO’s regulatory period), lapsed asperiod resolved, (and untilclosed a newand terminatedrate has been with determinedprejudice. In by an the Order ERC dated for the January next regulatory 27, 2021, theperiod), ERC asgranted resolved, MERALCO closed and provisional terminated authority with prejudice.to implement In an the Order refund. dated The January refund was27, 2021, reflected the ERCas a separate granted lineMERALCO item in the provisional billings to authority tocustomers implement starting the refund. March The2021 refund billing. was As reflected at March as 19,a separate 2021, hearings line item on in the the case billings are ongoing.to customers starting March 2021 billing. As at March 19, 2021, hearings on the case are ongoing. Competitive Selection Process (CSP) for PSAs. On February 9, 2018, the DOE published a DOE CompetitiveCircular entitled, Selection “Adopting Process and (CSP) Prescribing for PSAs the. OnPolicy February for the 9, Competitive 2018, the DOE Selection published Process a DOE in the CircularProcurement entitled, by Distribution “Adopting andUtilities Prescribing of Power the Supply Policy Agreementsfor the Competitive for the Captive Selection Market” Process (“2018 in the ProcurementDOE Circular”). by DistributionUpon effectivity Utilities of the of Circular,Power Supply all prospective Agreements PSAs for thein grid Captive and off-gridMarket” areas (“2018 shall DOEbe procured Circular”). through Upon CSP. effectivity The CSP of under the Circular, the 2018 all DOE prospective Circular PSAs involves in grid publication and off-grid of invitation areas shall to bebid, procured pre-bid conference,through CSP. bid The evaluation, CSP under and the pre-/post-qualification 2018 DOE Circular involves of winning publication bidder. Exemption of invitation to bid,from pre-bid CSP may conference, be granted bid by evaluation, the DOE in and the pre-/post-qualification following instances: of winning bidder. Exemption from CSP may be granted by the DOE in the following instances: i. Generation project owned by the DU funded by grant or donations ii.i. NegotiatedGeneration procurementproject owned of by emergency the DU funded supply by grant or donations iii.ii. ProvisionNegotiated of procurement supply in off-grid of emergency areas prior supply to the entry of new power providers iii.iv. Provision of supply byin off-gridPSALM areas through prior bilateral to the entry contracts of new for power power providers produced from iv. undisposedProvision of generating supply by assetsPSALM and through IPP contracts bilateral sanctioned contracts byfor EPIRA.power produced from undisposed generating assets and IPP contracts sanctioned by EPIRA. PSAs that were granted exemption from CSP shall be implemented by the DU immediately without PSAsprejudice that to were the grantedevaluation exemption and final from decision CSP ofshall the be ERC. implemented by the DU immediately without prejudice to the evaluation and final decision of the ERC. The DU’s CSP may be managed by a Third Party Bids and Awards Committee (“TPBAC”) or a TheThird DU’s Party CSP Administrator may be managed (“TPA”). by aThe Third DU’s Party TPBAC Bids andshall Awards be composed Committee of the (“TPBAC”) following (a)or aone (1) ThirdDU officer Party orAdministrator employee knowledgeable (“TPA”). The in DU’s the technicalTPBAC shalloperations be composed of the DU; of the (b) following One (1) DU (a) officerone (1) DUor employee officer or with employee knowledge knowledgeable and/or experience in the technical with any operations local or international of the DU; (b)competitive One (1) DU bidding officer orprocedures; employee (c) with one knowledge (1) lawyer; and/or (d) one experience (1) finance with officer any local or accountant or international that has competitive knowledge bidding on procedures;electricity pricing; (c) one and (1) (e)lawyer; one (1) (d) technical one (1) finance person, officer or a person or accountant with knowledge that has and/orknowledge experience on electricitywith any local pricing; or international and (e) one competitive(1) technical bidding person, procedures.or a person withAny knowledgetwo of the lastand/or three experience (3) withmembers any localshall orbe internationalcaptive customer competitive representatives. bidding procedures. The selection Any process two of of the the last representatives three (3) of membersthe captive shall customers be captive to the customer DU’s TPBAC representatives. shall be submitted The selection to the process DOE for of theapproval. representatives The DOE of has thealready captive approved customers the selection to the DU’s process TPBAC of MERALCO’s shall be submitted TPBAC to thecaptive DOE customer for approval. representatives. The DOE has already approved the selection process of MERALCO’s TPBAC captive customer representatives. Each CSP shall be completed within five (5) months from the time of the publication of the Invitation Eachto Bid CSP until shall submission be completed of the withinPSA to five the (5)ERC. months from the time of the publication of the Invitation to Bid until submission of the PSA to the ERC. Direct negotiations may be made by the DUs after at least two (2) failed CSPs and there is no Directoutstanding negotiations dispute mayon the be conducted made by the CSP. DUs A after CSP at is least considered two (2) failed failed when CSPs during and there its conduct: is no outstanding dispute on the conducted CSP. A CSP is considered failed when during its conduct: i. No proposal was received by the DU ii.i. OnlyNo proposal one (1) wasgenerator received submitted by the DUan offer iii.ii. CompetitiveOnly one (1) offersgenerator of prospective submitted angenerators offer failed to meet the requirements prescribed in the iii. bidCompetitive document offers of prospective generators failed to meet the requirements prescribed in the bid document MERALCO constituted its TPBAC to conduct CSP in accordance with the 2018 DOE Circular and MERALCOits submitted constituted Power Supply its TPBAC Procurement to conduct Plan forCSP 2019. in accordance with the 2018 DOE Circular and its submitted Power Supply Procurement Plan for 2019.

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On September 13, 2019, MERALCO signed three (3) PSAs for baseload capacity with AC Energy for 200On September MW, SMEC 13, for 2019, 330 MERALCOMW, and SPPC signed for three670 MW.(3) PSAs On Septemberfor baseload 16, capacity 2019, MERALCO with AC Energy signed for three200 MW, (3) PSAs SMEC for for mid-merit 330 MW, capacity and SPPC with for First 670 Gen MW. Hydro On SeptemberPower Corporation 16, 2019, (“First MERALCO Gen Hydro”) signed forthree 100 (3) MW, PSAs AC for Energy mid-merit for 110capacity MW, with and FirstSPPC Gen for Hydro290 MW. Power On CorporationOctober 22, 2019,(“First the Gen joint Hydro”) applicationsfor 100 MW, for AC approval Energy offor these 110 MW,six (6) and PSAs SPPC were for filed 290 beforeMW. On the October ERC. Certain 22, 2019, consumer the joint groups intervenedapplications in for the approval joint applications. of these six In (6) its PSAsletters were to MERALCO, filed before allthe dated ERC. December Certain consumer 23, 2019, groups the ERCintervened granted in provisionalthe joint applications. authority to In implement its letters to MERALCO’s MERALCO, three all dated (3) PSAs December for baseload 23, 2019, capacity the withERC ACgranted Energy, provisional SPPC and authority SMEC. to implement MERALCO’s three (3) PSAs for baseload capacity with AC Energy, SPPC and SMEC. On January 30, 2020, MERALCO received the orders of the ERC granting provisional authority to implementOn January MERALCO’s 30, 2020, MERALCO two (2) PSAs received for baseloadthe orders and of mid-meritthe ERC granting capacity provisional with AC Energy. authority On to Marchimplement 16, 2020,MERALCO’s MERALCO two received(2) PSAs the for orders baseload of the and ERC mid-merit granting capacity provisional with ACauthority Energy. to On implementMarch 16, 2020,MERALCO’s MERALCO other received four (4) the PSAs orders for ofbaseload the ERC capacity, granting with provisional SPPC and authority SMEC, toand mid- meritimplement capacity, MERALCO’s with FGHPC other and four SPPC. (4) PSAsAs at forMarch baseload 19, 2021, capacity, the six with (6) SPPCPSA applications and SMEC, areand mid- awaitingmerit capacity, final resolution with FGHPC by the and ERC. SPPC. As at March 19, 2021, the six (6) PSA applications are awaiting final resolution by the ERC. Meanwhile, after MERALCO announced or published its CSPs or Invitations to Bid last July 2019, representativesMeanwhile, after of MERALCOthe Bayan Muna announced partylist or filedpublished a petition its CSPs with orthe Invitations SC on September to Bid last 5, 2019July 2019, claimingrepresentatives that the of 2018 the Bayan DOE Circular,Muna partylist which filed repealed a petition portions with of the the SC 2015 on CSPSeptember Circular, 5, 2019is void for violatingclaiming thatpolicies/provisions the 2018 DOE Circular,intended whichto protect repealed consumers portions under of theEPIRA 2015 and CSP the Circular, Constitution is void (the for “Bayanviolating Muna policies/provisions Petition”). The intended Bayan Muna to protect Petition consumers also sought under for EPIRA the issuance and the of Constitution TRO and/or (the writ of“Bayan preliminary Muna Petition”).injunction Theto prevent Bayan continuation Muna Petition of alsothe on-going sought for CSPs the issuanceof MERALCO of TRO and and/or some writ electricof preliminary cooperatives. injunction On Decemberto prevent 17,continuation 2019, MERALCO of the on-going filed its CSPs Comment of MERALCO to the Bayan and Munasome Petition.electric cooperatives. On December 17, 2019, MERALCO filed its Comment to the Bayan Muna Petition. On March 2, 2021, after the CSP for the 1,800 MW baseload capacity from greenfield power plants byOn DecemberMarch 2, 2021, 2024 afterand May the CSP2025 for was the conducted, 1,800 MW MERALCO baseload capacity signed fromtwo (2) greenfield PSAs for power baseload plants capacityby December with 2024Excellent and MayEnergy 2025 Resources, was conducted, Inc. (EERI) MERALCO with commercial signed two operations (2) PSAs datefor baseload on Decembercapacity with 2024 Excellent for 1,200 Energy MW, Resources,and with Masinloc Inc. (EERI) Power with Partners commercial Co. Ltd. operations (MPPCL) date with on commercialDecember 2024 operations for 1,200 date MW, on May and with2025 Masinloc for 600 MW. Power On Partners March Co.4, 2021, Ltd. (MPPCL)the joint applications with for approvalcommercial of theseoperations two (2) date PSAs on Maywere 2025 submitted for 600 before MW. the On ERC March to undergo 4, 2021, electronic the joint applications pre-filing for processapproval pursuant of these totwo ERC’s (2) PSAs Guidelines were submitted Governing before Electronic the ERC Applications, to undergo Filingselectronic and pre-filing Virtual Hearing.process pursuant As at March to ERC’s 19, 2021,Guidelines the electronic Governing pre-filing Electronic process Applications, is on-going. Filings and Virtual Hearing. As at March 19, 2021, the electronic pre-filing process is on-going. Meanwhile, on March 3, 2021, MERALCO received a copy of the petition with the SC dated FebruaryMeanwhile, 17, on 2021 March filed 3, by 2021, representatives MERALCO of received various aconsumer copy of the groups petition led bywith Gerard the SC Arances dated of PowerFebruary for 17, People 2021 (P4P) filed byCoalition representatives (the “P4P of Petition”). various consumer The petition groups claims led bythat Gerard the terms Arances of reference of forPower the for1,800 People MW (P4P)baseload Coalition CSP are (the unfavorable “P4P Petition”). to the Theconsumers petition and claims non-compliant that the terms with of the reference DOE’s prevailingfor the 1,800 CSP MW Rules baseload issued CSP in 2018 are unfavorableand that it would to the not consumers result in andthe leastnon-compliant cost of electricity. with the TheDOE’s P4Pprevailing Petition CSP also Rules sought issued for thein 2018 issuance and ofthat TRO it would and/or not writ result of preliminaryin the least costinjunction of electricity. to prevent The continuationP4P Petition alsoand/or sought nullify for the the 1,800 issuance MW of baseload TRO and/or CSP writof MERALCO. of preliminary injunction to prevent continuation and/or nullify the 1,800 MW baseload CSP of MERALCO. Others. MERALCO and its subsidiaries are subject to various pending or threatened legal actions in theOthers. ordinary MERALCO course of and business its subsidiaries which, if arethe subjectconclusion to various is unfavorable pending toor MERALCO threatened legal and actions in subsidiaries,the ordinary coursemay result of business in the payout which, of if substantial the conclusion claims is unfavorableand/or the adjustment to MERALCO of electricity and distributionsubsidiaries, rates. may result These in contingencies the payout of substantially substantial claims represent and/or the theamounts adjustment of claims of electricity related to a commercialdistribution rates.contract These which contingencies remains unresolved substantially and local represent taxes the being amounts contested. of claims Other related disclosures to a requiredcommercial by PAScontract 37 were which not remains provided unresolved as it may and prejudice local taxes MERALCO’s being contested. position Other in on–going disclosures claims, litigationsrequired by and PAS assessments. 37 were not provided as it may prejudice MERALCO’s position in on–going claims, litigations and assessments.

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Rail Rail Claims with Grantors. On various dates in 2015 through 2019, LRMC submitted to the DOTr and LRTAClaims (collectivelywith Grantors. known On variousas “Grantors”) dates in letters 2015 throughrepresenting 2019, its LRMC claim submittedfor costs incurred to the DOTr and and estimatedLRTA (collectively in relation known to Existing as “Grantors”) System Requirements letters representing (ESR) and its claimLight forRail costs Vehicle incurred (LRV) and shortfall onestimated the premise in relation of the to Grantors’ Existing obligation System Requirements in relation to (ESR) the condition and Light of Railthe Existing Vehicle System(LRV) shortfallas at the Effectiveon the premise Date (Septemberof the Grantors’ 12, 2015), obligation Fare inDeficit, relation Structural to the condition Defect Restoration of the Existing (SDR) System costs, as and at the contractorEffective Date and other(September additional 12, 2015),costs incurred Fare Deficit, less Key Structural Performance Defect Indicator Restoration (KPI) (SDR) charges costs, and and concessioncontractor and fee otherpayments. additional As at costs March incurred 19, 2021, less LRMC Key Performance has submitted Indicator twenty-two (KPI) (22)charges letters and (1st to twenty-secondconcession fee Balancingpayments. Payments) As at March to 19,the Grantors2021, LRMC representing has submitted its claims. twenty-two Total claims (22) letters up to (1stthe to twenty-second Balancing PaymentPayments) amounted to the Grantors to =7,214P representing million with its claims.a revised Total total claimsamount up to the twenty-secondP=5,689 million Balancingafter Grantor’s Payment comments. amounted All to claims =7,214P are million still undergoing with a revised discussion total amount as at MarchP=5,689 19,million 2021. after Grantor’s comments. All claims are still undergoing discussion as at March 19, 2021. Others Others Donor’s Tax. NOHI received on January 14, 2011 a Final Assessment Notice (FAN) demanding the Donor’spayment Tax.of approximatelyNOHI received =170.2P on January million 14,as deficiency2011 a Final donor’s Assessment tax (comprising Notice (FAN) of the demanding basic tax due the paymentand 25% ofsurcharge) approximately on the =170.2Pexcess ofmillion the book as deficiency value over donor’s the selling tax (comprisingprice of several of the shares basic of tax stock due in andBonifacio 25% surcharge) Land Corporation on the excess (BLC) of which the book NOHI value sold over to athe third selling party. price The of assessment several shares was ofbased stock on in Bonifaciothe finding Land of the Corporation Bureau of Internal(BLC) which Revenue–Large NOHI sold Taxpayer to a third Service party. The(BIR–LTS) assessment that wasthe based on thetransaction finding ofis subjectthe Bureau to donor’s of Internal tax as Revenue–Large a “deemed gift” Taxpayer transaction Service under (BIR–LTS) Section 100 that of thethe 1997 transactionNational Internal is subject Revenue to donor’s Tax Code tax as (the a “deemed Tax Code). 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 Onarguments. February However, 14, 2011, thisNOHI was filed denied its formalby the BIRprotest through to the the FAN letter raising it has several delivered factual to NOHI and legal stating arguments.its Final Decision However, on Disputed this was Assessmentdenied by the (FDDA). BIR through NOHI the then letter filed it has a Petition delivered for toReview NOHI with stating the itsSecond Final Division Decision of on the Disputed Court of Assessment Tax Appeals (FDDA). (CTA) toNOHI challenge then filedthe FDDA. a Petition for Review with the Second Division of the Court of Tax Appeals (CTA) to challenge the FDDA. On May 4, 2016, the CTA En Banc promulgated its decision, which was received on May 13, 2016, Ondenying May the4, 2016, company’s the CTA Petition En Banc for Reviewpromulgated dated its October decision, 21, which 2014 andwas affirming received onthe May adverse 13, 2016, denyingdecision theof the company’s Second DivisionPetition forof the Review Court dated dated October June 11, 21, 2014 2014 and and Resolution affirming of the the adverse Second decisionDivision ofdated the SeptemberSecond Division 16, 2014 of the which Court denied dated NOHI's June 11, Motion 2014 andfor Reconsideration.Resolution of the SecondOn DivisionOctober 28,dated 2016, September NOHI received 16, 2014 a whichcopy of denied the Resolution NOHI's Motion of the CTAfor Reconsideration. En Banc dated On October 28,18, 2016,2016 denyingNOHI received NOHI’s a Motion copy of for the Reconsideration. Resolution of the CTA En Banc dated October 18, 2016 denying NOHI’s Motion for Reconsideration. On December 12, 2016, NOHI filed with the SC the required Petition for Review as appeal from the Ondecision December and resolution 12, 2016, of NOHI the CTA filed En with Banc. the SC On the March required 14, 2017, Petition NOHI for Reviewreceived as a appealcopy of from the the decisionResolution and dated resolution January of 23,the 2017CTA ofEn the Banc. Supreme On March Court 14,denying 2017, NOHI’s NOHI received Petition afor copy Review of the on the Resolutiondecision of datedthe Court January of Tax 23, Appeals 2017 of enthe banc Supreme which Court affirmed denying the decisionNOHI’s ofPetition the CTA for SecondReview on the decisionDivision ofordering the Court NOHI of Tax to pay Appeals donor’s en tax.banc On which March affirmed 28, 2017, the decisionNOHI filed of the a Motion CTA Second for DivisionReconsideration ordering on NOHI the aforesaid to pay donor’s Resolution tax. ofOn the March Supreme 28, 2017, Court. NOHI On October filed a Motion 3, 2017, for NOHI Reconsiderationreceived the Resolution on the aforesaiddated July Resolution 26, 2017 ofof thethe SCSupreme denying Court. the Motion On October for Reconsideration. 3, 2017, NOHI received the Resolution dated July 26, 2017 of the SC denying the Motion for Reconsideration. As at December 31, 2019, NOHI partially settled amount due to BIR of =397P million. As at AsMarch at December 19, 2021, 31,NOHI 2019, is awaitingNOHI partially BIR’s decisionsettled amount on NOHI’s due to request BIR of for =397P abatement million. of As delinquency at interestMarch 19, given 2021, that NOHI NOHI is is awaiting no longer BIR’s operating decision and on already NOHI’s undergoing request for liquidation. abatement of delinquency interest given that NOHI is no longer operating and already undergoing liquidation.

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31. Assets Held in Trust 31. Assets Held in Trust Materials and Supplies MayniladMaterials andhas theSupplies right to use any item of inventory owned by MWSS in carrying out its responsibilityMaynilad has theunder right the to Maynilad use any itemConcession of inventory Agreement owned (see by MWSSNote 29), in carryingsubject to out the its obligation to returnresponsibility the same under at the the end Maynilad of the concession Concession period, Agreement in kind (see or inNote value 29), at subjectits current to the rate, obligation subject to to CPIreturn adjustments. the same at the end of the concession period, in kind or in value at its current rate, subject to CPI adjustments. Facilities MayniladFacilities had been granted the right to operate, maintain in good working order, repair, decommissionMaynilad had beenand refurbishgranted the the right movable to operate, properties maintain required in good to provide working the order, water repair, and sewerage servicesdecommission under theand Maynilad refurbish Concessionthe movable Agreement properties required(see Note to 29). provide MWSS the watershall retain and sewerage legal title to allservices movable under properties the Maynilad in existence Concession at the Agreementcommencement (see Note date on29). August MWSS 1, shall1997. retain However, legal titleupon to expirationall movable of properties the useful in life existence of any such at the movable commencement property dateas may on beAugust determined 1, 1997. by However, Maynilad, upon such movableexpiration properties of the useful shall life be ofreturned any such to MWSSmovable in property its then–current as may becondition determined at no by charge Maynilad, to MWSS such or Mayniladmovable properties (see Note shall13). 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 Manila Water to have equal access to MWSS facilitiesThe concession involved agreement in the provision also provides of water Maynilad supply and sewerageManila Water services to have in both equal West access and to East MWSS Servicefacilities Areas involved including, in the provisionbut not limited of water to, thesupply MWSS and seweragemanagement services information in both system,West and billing East system,Service Areastelemetry including, system, but central not limited control to, room the MWSSand central management records. 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’ closingThe net auditbook reportvalue ofamounted the facilities to =7.3P transferred billion with to Maynilad a sound value on commencement of P=13.8 billion. date based on MWSS’ closing audit report amounted to =7.3P billion with a sound value of P=13.8 billion. MWSS’ corporate headquarters are made available for lease to Maynilad and East Concessionaire, subjectMWSS’ to corporate renewal withheadquarters the consent are ofmade the availableparties concerned. for lease to The Maynilad current andlease East covers Concessionaire, up to a period ofsubject December to renewal 31, 2024. with theLease consent payments of the amounted parties concerned. to P=57 million, The current =44P million lease andcovers =43P up million to a period in 2020,of December 2019 and 31, 2018, 2024. respectively. Lease payments The leaseamounted agreement to P=57 was million, scoped-in =44P million under PFRS and =43P 16 millionwith the in ROU2020, asset2019 recognizedand 2018, respectively. in the “Property, The plantlease andagreement equipment” was scoped-inaccount (see under Note PFRS 13). 16 with the ROU asset recognized in the “Property, plant and equipment” account (see Note 13).

32. Deconsolidation of MPHHI in 2019 32. Deconsolidation of MPHHI in 2019 Buhay’s Investment in MPHHI. On December 9, 2019, MPIC, together with MPHHI, completed a seriesBuhay’s of Investmenttransactions in for MPHHI the investment. On December and entry 9, 2019,of global MPIC, investment together firm with KKR, MPHHI, alongside completed Arran, a inseries and ofto, transactions MPHHI. Included for the investmentin the series and of transactionsentry of global are investment the following: firm KKR, alongside Arran, in and to, MPHHI. Included in the series of transactions are the following: ƒ Buhay, a subsidiary of KKR, subscribed to, a mandatorily exchangeable bond, at the principal ƒ issueBuhay, value a subsidiary of =30.1P ofbillion KKR, (the subscribed “Buhay Exchangeableto, a mandatorily Bond”). exchangeable The Buhay bond, Exchangeable at the principal Bond canissue be value exchanged of =30.1P to billion239,932,962 (the “Buhay common Exchangeable shares of MPHHI Bond”). owned The Buhayand held Exchangeable by MPIC (“Buhay Bond EBcan Underlyingbe exchanged Shares”). to 239,932,962 The Buhay common EB Underlying shares of MPHHI Shares represent owned and approximately held by MPIC 15.88% (“Buhay of theEB issuedUnderlying and outstanding Shares”). The capital Buhay stock EB of Underlying MPHHI, entitled Shares to represent vote, on approximately a fully-diluted 15.88%basis. The of Buhaythe issued Exchangeable and outstanding Bond’s capital subscription stock of priceMPHHI, shall entitled be settled: to vote, (i) =26,091P on a fully-diluted million on basis. The completionBuhay Exchangeable date; (ii) P=1,602 Bond’s million subscription one hundred price shall eighty be settled:(180) days (i) =26,091Pafter the millioncompletion on date; and (iii)completion =2,404P date;million (ii) on P=1,602 the first million anniversary one hundred of the eightycompletion (180) date.days afterAs at the December completion 31, 2019,date; and receivable(iii) =2,404P from million Buhay on thefor firstportion anniversary of the subscription of the completion price amounted date. As to at =3,873P December million 31, 2019,and is includedreceivable under from the Buhay “Receivables” for portion account of the subscription in the statement price of amounted financial to position =3,873P (see million Note and 8). is Receivableincluded under from the Buhay “Receivables” was fully accountcollected in in the 2020. statement of financial position (see Note 8). Receivable from Buhay was fully collected in 2020.

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ƒ Arran Investment Private Limited (Arran) reinvested alongside Buhay. This transaction involved ƒ Arranthe acquisition Investment by PrivateKKR of Limited Arran’s (Arran) Exchangeable reinvested Bond alongside and Arran’s Buhay. directly This ownedtransaction shares involved in theMPHHI. acquisition On July by KKR2, 2014, of Arran’sArran paid Exchangeable P=6.5 billion Bond as consideration and Arran’s for directly an Exchangeable owned shares Bond in MPHHI.issued by OnMPIC July which 2, 2014, can Arranbe exchanged, paid P=6.5 in billion the future, as consideration into 158,137,590 for an sharesExchangeable common Bond shares issuedof MPHHI by MPIC (the “Arran which Exchangeablecan be exchanged, Bonds”). in the Thefuture, terms into of 158,137,590 the Arran Exchangeable shares common Bond shares have ofbeen MPHHI amended (the to “Arran align withExchangeable the terms Bonds”).of the Buhay The Exchangeable terms of the Arran Bond. Exchangeable Bond have been amended to align with the terms of the Buhay Exchangeable Bond. Buhay as holder, shall be entitled, among others, to exchange the Exchangeable Bonds (Buhay BuhayExchangeable as holder, Bond shall and be Arran entitled, Exchangeable among others, Bonds) to exchange for all of the the Exchangeable underlying shares Bonds on (Buhay the Exchangeableearlier of (i) thirty Bond (30) and days Arran after Exchangeable the date the Bonds)common for shares all of of the MPHHI, underlying including shares the on the earlierunderlying of (i) shares, thirty (30)are first days listed after onthe the date PSE the following common itsshares initial of publicMPHHI, offering including of shares the and underlying(ii) the date shares, that is 10are years first listedfrom theon theissue PSE date following of the Exchangeable its initial public Bonds offering (“Mandatory of shares and (ii)Exchange the date Date”). that is Interest10 years applicable from the issueto the date Exchangeable of the Exchangeable Bonds shall Bonds be equivalent (“Mandatory to the actual Exchangedividend yield Date”). of theInterest Underlying applicable Shares. to the Exchangeable Bonds shall be equivalent to the actual dividend yield of the Underlying Shares. ƒ As part of KKR’s investment in MPHHI, MPIC granted in favor of KKR the following options ƒ As(“Call part Options”): of KKR’s (i)investment an irrevocable in MPHHI, option, MPIC exercisable granted after in favor the completion of KKR the of following this transaction, options to (“Callrequire Options”): MPIC to sell (i) anto theirrevocable Investor option,(and/or exercisable one or more after of its the designees) completion all of or this a portion transaction, of to requireMPIC’s MPIC shares to in sell MetroPac to the Investor Apollo Holdings,(and/or one Inc. or (“Apollo”);more of its designees)and (ii) an allirrevocable or a portion option, of MPIC’sexercisable shares after in October MetroPac 14, Apollo 2019, signingHoldings, date Inc. of (“Apollo”);the Share Subscription and (ii) an irrevocable Agreement, option, to require exercisableMPIC to sell after to one October or more 14, newly 2019, establishedsigning date Philippine of the Share domestic Subscription companies Agreement, or investment to require MPICvehicles, to selleach to of one which or more is wholly newly and established beneficially Philippine owned bydomestic Filipino companies citizens who or investment have relevant vehicles,expertise eachand experience of which is beneficial wholly and to beneficiallythe business ownedof MPHHI. by Filipino Apollo, citizens a Philippine who have registered relevant expertisecompany and(in which experience MPIC beneficial has 65% toownership the business as at of December MPHHI. 31, Apollo, 2020 aand Philippine December registered 31, 2019) companyowns and (inholds which all theMPIC outstanding has 65% votingownership preferred as at Decembershares issued 31, by 2020 MPHHI. and December 31, 2019) owns and holds all the outstanding voting preferred shares issued by MPHHI. The fair value of the call options was estimated at the Call Option Agreement date using a Thebinomial fair value pricing of model,the call takingoptions into was account estimated the atterms the Calland conditionsOption Agreement on which date the usingoptions a were binomialgranted. Thepricing exercise model, price taking is calculated into account based the onterms the andformula conditions set forth on in which the Call the Optionoptions were granted.Agreement. The The exercise Call Optionsprice is calculatedcan be exercised based onanytime the formula up to ten set years.forth in As the at Call Option Agreement.December 31, The 2020 Call and Options 2019, faircan valuebe exercised of the option anytime liability up to tenunder years. “Accounts As at payable and other Decembercurrent liabilities” 31, 2020 account and 2019, is estimated fair value at of =6P the million option and liability =46P million,under “Accounts respectively payable (see Noteand other 15). current liabilities” account is estimated at =6P million and =46P million, respectively (see Note 15). As discussed in Note 3, the abovementioned series of transactions provided Buhay an economic Asinterest discussed of approximately in Note 3, the 80%, abovementioned on fully diluted series basis of post transactions conversion provided of the ExchangeableBuhay an economic Bonds. interestThese transactions of approximately were accounted80%, on fully for asdiluted an equity basis transactions post conversion which, of forthe purposesExchangeable of PFRS Bonds. 10, is Theseconsidered transactions as resulting were to accounted MPIC losing for ascontrol. an equity The transactions Exchangeable which, Bond for is purposesan instrument of PFRS that, 10, at ais consideredcertain time as in resulting the future, to convertsMPIC losing into acontrol. fixed number The Exchangeable of shares of MPHHI.Bond is an Moreover, instrument the that, principal at a certainof Exchangeable time in the Bond future, is inconverts Philippine into Peso,a fixed the number same currency of shares as of the MPHHI. functional Moreover, currency the of principal MPIC as ofthe Exchangeable issuing entity. Bond Thus, is thein Philippine Exchangeable Peso, Bonds the same qualify currency as equity as the instruments functional such currency that the of MPIC as theproceeds issuing from entity. the ExchangeableThus, the Exchangeable Bond together Bonds with qualify the share as equity subscriptions instruments in MPHHI, such that were the proceedsaccounted from for as the equity Exchangeable transactions. Bond together with the share subscriptions in MPHHI, were accounted for as equity transactions.

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Gain on deconsolidation recognized in 2019, computed as follows: Gain on deconsolidation recognized in 2019, computed as follows: (In Millions) Consideration received or receivable: (In Millions) ConsiderationGross proceeds received from or the receivable:Exchangeble Bond P=30,097 LessGross: proceedsProvisions from the Exchangeble Bond P=30,097(2,568) Less: ProvisionsTransaction costs (2,568)(2,217) DiscountTransaction on costsdeferred settlement (2,217)(134) Discount on deferred settlement 25,178(134) Add: Fair value of retained investment in MPHHI 25,178 Add: Fair(20% value on of a retainedfully diluted investment basis) in MPHHI 16,688 Derecognition(20% on a fully of the diluted interest basis) payable under 16,688 Derecognitionthe Arran Exchangeable of the interest Bond payable under 122 Less: Carryingthe Arran amount Exchangeable of net assets Bond deconsolidated (9,918)122 Less: CarryingOption liability amount of net assets deconsolidated (9,918)(43) Gain onOption sale beforeliability deferred taxes and (43) Gainreclassification on sale before ofdeferred the other taxes comprehensive and reclassificationincome/expense of the other comprehensive 32,027 Reclassificationincome/expense of other comprehensive income 32,0274 DeferredReclassification tax expense of other comprehensive income (6,123)4 GainDeferred on deconsolidation tax expense P=25,908(6,123) Gain on deconsolidation P=25,908 The provisions included estimated tax warranties and indemnities. The provisions amounted to P=2,662.5The provisions million included and =2,568.1P estimated million tax warrantiesas at December and indemnities. 31, 2020 and The 2019, provisions respectively amounted (see Note to 16). P=2,662.5 million and =2,568.1P million as at December 31, 2020 and 2019, respectively (see Note 16). While the gain on deconsolidation of MPHHI was recognized for accounting purposes for the year endedWhile Decemberthe gain on 31, deconsolidation 2019, the taxable of MPHHI gain shall was be recognized recognized for upon accounting actual conversion purposes for of the Arranyear endedExchangeable December Bonds 31, 2019,and Buhay the taxable Exchangeable gain shall Bonds, be recognized hence the upon recognition actual conversion of the deferred of the tax Arran expense.Exchangeable Bonds and Buhay Exchangeable Bonds, hence the recognition of the deferred tax expense. The carrying amounts of the net assets of MPHHI as at date of deconsolidation were: The carrying amounts of the net assets of MPHHI as at date of deconsolidation were: (In Millions) Assets (In Millions) AssetsCash and cash equivalents P=2,174 ReceivablesCash and cash equivalents P=2,1942,174 OtherReceivables current assets 1,2832,194 Property,Other current plant assets and equipment 15,1,283083 Property,Other noncurrent plant and assets equipment 15,6,085735 Other noncurrent assets 27,3096,575 Liabilities 27,309 LiabilitiesAccounts payable and other current liabilities 4,854 AccountsLong-termpayable debt (current and other and currentnoncurrent liabilities portions) 4,8541,277 OtherLong- termlong -debtterm (currentliabilities and noncurrent portions) 1,6391,277 DeferredOther long tax-term liabilities liabilities 1,639514 Deferred tax liabilities 8,284514 Noncontrolling interest (9,1078,284) Noncontrolling interest P=(9,1079,918) P=9,918

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As a result of the deconsolidation, the Healthcare segment was classified as “Operations of entities underAs a result PFRS of 5” the in deconsolidation,the consolidated thestatements Healthcare of comprehensive segment was classified income foras “Operationsthe years ended of entities underDecember PFRS 31, 5” 2019 in the and consolidated 2018. statements of comprehensive income for the years ended December 31, 2019 and 2018. The financial information and cash flow information for 2019 covers period immediately prior to deconsolidationThe financial information while full andyear cash for theflow year information ended December for 2019 31, covers 2018. period immediately prior to deconsolidation while full year for the year ended December 31, 2018. 2019 2018 (In Millions)2019 2018 Operating revenues (InP= Millions)14,658 P=12,950 OperatingCost of salesrevenuesand services P=14,658(8,895) P=12,950(7,512) CostGross of profitsales and services (8,895)5,763 (7,5125,438) GrossGeneral profit and administrative expenses (3,776)5,763 (5,4383,820) GeneralInterest expenseand administrative expenses (3,776)(194) (3,820(158)) InterestShare in expense net earnings of equity method investees (194)230 (158)282 ShareInterest in income net earnings of equity method investees 23047 28245 InterestGain on incomedeconsolidation, gross of tax 32,03147 45– GainOthers on deconsolidation, gross of tax 32,031327 563– OthersIncome before income tax 34,428327 2,350563 IncomeProvision before for income income tax tax 34,428 2,350 ProvisionCurrent for income tax 797 656 CurrentDeferred 6,071797 656(43) Deferred 6,0716,868 613(43) Net Income from Operations of entities under PFRS 5 27,5606,868 1,737613 NetOther Income comprehensive from Operations incomeof(loss) entities- net under PFRS 5 27,560 1,737 OtherNot to comprehensive be reclassified toincome profit (loss)or loss- netin subsequent Not toperiods be reclassified to profit or loss in subsequent (68) 60 Totalperiods comprehensive income from Operations of (68) 60 Totalentities comprehensive under PFRS income 5 from Operations of P=27,492 P=1,797 entities under PFRS 5 P=27,492 P=1,797 Basic earnings per share P=0.8466 P=0.0288 Basic earnings per share P=0.8466 P=0.0288 Diluted earnings per share P=0.8466 P=0.0288 Diluted earnings per share P=0.8466 P=0.0288 2019 2018 Net cash inflow (outflow) from 2019 2018 Net cashOperating inflow activities (outflow) from P=2,643 P=2,560 OperatingInvesting activities activities P=(3,118)2,643 P=(3,149)2,560 InvestingFinancingactivities activities (3,118)2,628 (3,149)3 Financing activities P=2,6282,153 (P=586)3 P=2,153 (P=586) Hospital operations. MPHHI and its subsidiaries, operates the following full service hospitals: Hospital operations. MPHHI and its subsidiaries, operates the following full service hospitals: ƒ In Metro Manila: Cardinal Santos Medical Center (CSMC), Our Lady of Lourdes Hospital ƒ (OLLH),In Metro Manila:Asian Hospital Cardinal (AHI), Santos De Medical Los Santos Center Medical (CSMC), Center Our (DLSMC), Lady of Lourdes Marikina Hospital Valley Medical(OLLH), Center Asian Hospital(MVMC) (AHI), and Dr. De Jesus Los C.Santos Delgado Medical Memorial Center Hospital (DLSMC), (JDMH); Marikina and Valley Medical Center (MVMC) and Dr. Jesus C. Delgado Memorial Hospital (JDMH); and ƒ In other parts of the Philippines: Riverside Medical Center (RMCI) in Bacolod, Central Luzon ƒ DoctorsIn other partsHospital of the (CLDH) Philippines: in Tarlac, Riverside West MetroMedical Medical Center Center (RMCI) (WMMC) in Bacolod, in Zamboanga, Central Luzon DoctorsSacred Heart Hospital Hospital (CLDH) of Malolos in Tarlac, Inc. West (SHHM) Metro in Medical Bulacan, Center Saint (WMMC)Elizabeth Hospitalin Zamboanga, Inc. (SEHI) inSacred General Heart Santos Hospital City, of Davao Malolos Doctors Inc. (SHHM) Hospital inin Bulacan,Davao and Saint and Elizabeth Manuel J. Hospital Santos HospitalInc. (SEHI) in Butuanin General City. Santos In February City, Davao 2020, Doctors MPHHI Hospital completed in Davao the Investment and and Manuel Agreement J. Santos for a Hospital51% equity in interestButuan City.in Los In Baños February Doctors 2020, Hospital MPHHI and completed Medical theCenter, Investment Incorporated Agreement in Laguna. for a 51% equity interest in Los Baños Doctors Hospital and Medical Center, Incorporated in Laguna. *SGVFSM006036* *SGVFSM006036*

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ƒ MPHHI also has equity stake in the following hospitals: Makati Medical Center (MMC) and ƒ ManilaMPHHI Doctors also has Hospital equity stake (MDH). in the following hospitals: Makati Medical Center (MMC) and Manila Doctors Hospital (MDH). Lease agreements. The following companies entered into the following lease agreements, which wereLease accounted agreements. for asThe acquisition following ofcompanies a business entered in accordance into the withfollowing PFRS lease 3 (see agreements, Note 11): which were accounted for as acquisition of a business in accordance with PFRS 3 (see Note 11): ƒ In 2009, CVHMC with the Roman Catholic Archbishop of Manila (RCAM) for the hospital ƒ Inassets 2009, (consisting CVHMC of with land, the building, Roman Catholicimprovements, Archbishop machineries, of Manila equipment (RCAM) and for trademark)the hospital of Cardinalassets (consisting Santos Medical of land, Center building, (CSMC); improvements, machineries, equipment and trademark) of Cardinal Santos Medical Center (CSMC); ƒ In 2010, East Manila Hospital Managers Corp (EMHMC) with Our Lady of Lourdes Hospital, ƒ InInc. 2010, (OLLHI) East Manilaand Servants Hospital of theManagers Holy Spirit, Corp Inc.(EMHMC) (SSpS) withcovering Our OLLHLady of properties Lourdes Hospital,and improvementsInc. (OLLHI) and and Servants the operations of the andHoly management Spirit, Inc. (SSpS)of OLLH; covering and OLLH properties and improvements and the operations and management of OLLH; and ƒ In 2015, Metro Pacific Zamboanga Hospital Corp. (MPZHC) with Western Mindanao Medical ƒ Center,In 2015, Inc. Metro (WMMCI) Pacific Zamboanga covering the Hospital land and Corp. hospital (MPZHC) building. with The Western lease of Mindanao MPZHC, Medicalfor a Center,period of Inc. 20 (WMMCI)years, may coveringbe renewed the under land and terms hospital and conditions building. mutuallyThe lease acceptable. of MPZHC, However, for a MPHHIperiod of acquired 20 years, 63.94% may be of renewed the outstanding under terms voting and capital conditions stock mutually of WMMCI. acceptable. The transaction However, resultedMPHHI toacquired the derecognition 63.94% of theof the outstanding property usevoting rights capital and thestock related of WMMCI. accumulated The transactionamortization. resulted to the derecognition of the property use rights and the related accumulated amortization. The leases of EMHMC and CVHMC are for periods of 20 years, renewable for successive periods of tenThe (10) leases years of EMHMCupon the mutualand CVHMC consent are of forboth periods parties. of 20 years, renewable for successive periods of ten (10) years upon the mutual consent of both parties. As consideration for the lease agreement, EMHMC and CVHMC pay fixed and variable monthly rates,As consideration where the variable for the leaserate is agreement, based on the EMHMC prior year’s and CVHMC net revenues. pay fixed and variable monthly rates, where the variable rate is based on the prior year’s net revenues. Lease payments under the arrangements disclosed above are as follows: Lease payments under the arrangements disclosed above are as follows: 2019 2018 Fixed Variable2019 Total Fixed Variable2018 Total Fixed Variable Total(In Millions) Fixed Variable Total Not later than one year P=58 P=105 P=(In163 Millions) P=58 P=78 P=136 NotMore later than than one one year year and not later than P=58 P=105 P=163 P=58 P=78 P=136 Morefive than years one year and not later than 244 373 617 255 354 609 Morefive than years five years 244370 373778 1,148617 255502 354879 1,381609 MoreTotal leasethan fivepayments years 672370 1,256778 1,9281,148 815502 1,311879 2,1261,381 TotalLess amount lease payments representing interest 672 1,256 1,928(999) 815 1,311 1,0262,126 LessPresent amount value representing of lease obligation interest P=(999)929 P=1,0261,100 Present value of lease obligation P=929 P=1,100 The lease agreement with OLLHI included a Capital Expenditure (CAPEX) program, wherein EMHMCThe lease agreementcommits to with invest, OLLHI by way included of capital a Capital expenditures Expenditure of at least(CAPEX) =350P millionprogram, to wherein improve and EMHMCdevelop OLLH, commits no tolater invest, than byNovember way of capital 1, 2015. expenditures As at June of 30, at 2015,least =350Pthe EMHMC million tohas improve complied and withdevelop its commitmentOLLH, no later of =350P than Novembermillion capital 1, 2015. expenditures. As at June 30, 2015, the EMHMC has complied with its commitment of =350P million capital expenditures. CVHMC has a commitment to make a Capital Expenditure in CSMC amounting to at least CVHMCP=750 million has (CAPEXa commitment Commitment) to make ano Capital later than Expenditure the 10th inanniversary CSMC amounting of the Agreement, to at least with at leastP=750 =250P million million (CAPEX of which Commitment) shall be spent no later over than a period the 10th of three anniversary (3) years, of andthe Agreement,with majority with spent at as CAPEXleast =250P for million Expansion of which and Developmentshall be spent no over later a period than the of 10ththree anniversary (3) years, and of thewith closing majority date spent of the as CAPEXagreement. for InExpansion the event and that Development CVHMC fails no to later make than or theinfuse 10th the anniversary commitment of thein the closing amounts date and of the withinagreement. the period In the stated, event thatCVHMC CVHMC shall fails deposit to make in escrow or infuse such the deficiency commitment in an in account the amounts to be and determinedwithin the period by both stated, parties. CVHMC CVHMC shall has deposit infused in P=2,236escrow suchmillion deficiency to the CAPEX in an account program to as be at Decemberdetermined 31, by 2018.both parties. CVHMC has infused P=2,236 million to the CAPEX program as at December 31, 2018.

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33. GBPC as Group held for Deemed Disposal 33. GBPC as Group held for Deemed Disposal On December 23, 2020, BPHI entered into a share purchase agreement with MGen, a wholly-owned subsidiaryOn December of MERALCO, 23, 2020, BPHI for theentered sale byinto BPHI a share of 56%purchase of the agreement issued and with outstanding MGen, a shareswholly-owned of GBPC.subsidiary The of total MERALCO, consideration for the for sale the bysale BPHI of the of shares 56% of is the issued and outstanding shares of =22,443.4PGBPC. The million total consideration which shall be for paid the in sale installments of the shares as follows:is =22,443.4P million which shall be paid in installments as follows: ƒ 60% of the purchase price will be paid on completion; ƒ 20%60% of the purchase price will be paid 6on months completion; after closing date (“First Installment”); and ƒ 20% of the purchase price will be paid 618 months months after after closing closing date date (“First (the “Second Installment”); and ƒ Installment”),20% of the purchase the First price Installment will be paid and 18Second months Installment after closing are collectivelydate (the “Second referred to as the “InstallmentInstallment”), Payments”. the First Installment and Second Installment are collectively referred to as the “Installment Payments”. The unpaid Installment Payments shall earn interest at the rate of 2.0% p.a. from closing date until payment.The unpaid Installment Payments shall earn interest at the rate of 2.0% p.a. from closing date until payment. The purchase price shall be subject to adjustment based on dividends from GBPC that BPHI will be entitledThe purchase to after price the shallsigning be date.subject to adjustment based on dividends from GBPC that BPHI will be entitled to after the signing date. Closing of this proposed transaction is conditional on the satisfaction and/or waiver, where applicable,Closing of thisof the proposed following transaction conditions: is conditional on the satisfaction and/or waiver, where applicable,ƒ the ofapproval the following on ruling conditions: or waiver of review by the PCC in respect of the Proposed Disposal or ƒ anthe acknowledgement approval on ruling by or thewaiver PCC of that review the Proposed by the PCC Acquisition in respect is of not the subject Proposed to mandatory Disposal or mergeran acknowledgement review; by the PCC that the Proposed Acquisition is not subject to mandatory ƒ thirdmerger party review; approvals required from (i) lenders under certain loan agreements or arrangements ƒ enteredthird party into approvals by GBPC required or its subsidiaries from (i) lenders and (ii) under certain certain shareholders loan agreements pursuant or to arrangements a shareholders’entered into by agreement GBPC or ofits a subsidiaries subsidiary, andhaving (ii) beencertain obtained; shareholders and pursuant to a ƒ othershareholders’ conditions agreement typical and of a customary subsidiary, for having share beenpurchase obtained; agreements, and including regulatory ƒ andother third-party conditions approvals. typical and customary for share purchase agreements, including regulatory and third-party approvals. The PCC confirmed on February 9, 2021 , that the proposed transaction qualifies as an internal restructuringThe PCC confirmed and thus, on does February not require 9, 2021 further , that approval the proposed by the transaction PCC. The qualifies proposed as transaction an internal is expectedrestructuring to close and thus,within does the notfirst require quarter further of 2021 approval and will by result the PCC. in the TheMPIC’s proposed loss of transaction control over is GBPC.expected Accordingly, to close within as theat December first quarter 31, of 2020, 2021 GBPC and will qualified result in as the a group MPIC’s held loss for of deemed control disposal over andGBPC. since Accordingly, the operations as ofat DecemberGBPC represents 31, 2020, significant GBPC qualified portion ofas thea group Company’s held for power deemed generation disposal business,and since itthe qualifies operations as a of discontinued GBPC represents operation significant (presented portion as operation of the Company’s of segment power under generation PFRS 5 in thebusiness, statements it qualifies of comprehensive as a discontinued of income). operation (presented as operation of segment under PFRS 5 in the statements of comprehensive of income). The results of GBPC for the years ended December 31, 2020, 2019 and 2018 are presented below: The results of GBPC for the years ended December 31, 2020, 2019 and 2018 are presented below: 2020 2019 2018 2020 (In Millions)2019 2018 Operating revenues P=21,069 (InP= Millions)24,223 P=26,822 OperatingCost of salesrevenuesand services P=21,069(13,574) P=(15,739)24,223 P=(18,850)26,822 CostGross of profitsales and services (13,574)7,495 (15,739)8,484 (18,850)7,972 GrossGeneral profit and administrative expenses (3,463)7,495 (2,313)8,484 (2,571)7,972 GeneralInterest expenseand administrative expenses (3,463)(1,750) (2,313)(2,021) (2,571)(1,818) InterestShare in expense net earnings of equity method investees (1,750)930 (2,021)418 (1,818)249 ShareInterest in income net earnings of equity method investees 930140 418464 249392 InterestOthers income 1,066140 464516 392364 OthersIncome before income tax 1,0664,418 5,548516 4,588364 Income before income tax 4,418 5,548 4,588 (Foward) (Foward) *SGVFSM006036* *SGVFSM006036*

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2020 2019 2018 2020 (In Millions)2019 2018 Provision for income tax (In Millions) ProvisionCurrent for income tax P=1,390 P=1,320 P=1,360 CurrentDeferred P=1,390(402) P=1,320(161) P=1,360(340) Deferred (402)988 1,159(161) 1,020(340) Net Income from Operations of entities under PFRS 5 3,430988 1,1594,389 1,0203,568 NetOther Income comprehensive from Operations incomeof(loss) entities- net under PFRS 5 3,430 4,389 3,568 OtherNot to comprehensive be reclassified toincome profit (loss)or loss- netin subsequent Not toperiods be reclassified to profit or loss in subsequent (38) (262) 113 Totalperiods comprehensive income from Operations of (38) (262) 113 Totalentities comprehensive under PFRS income 5 from Operations of P=3,392 P=4,127 P=3,681 entities under PFRS 5 P=3,392 P=4,127 P=3,681 Basic earnings per share P=0.0498 P=0.0614 P=0.0477 Basic earnings per share P=0.0498 P=0.0614 P=0.0477 Diluted earnings per share P=0.0498 P=0.0614 P=0.0476 Diluted earnings per share P=0.0498 P=0.0614 P=0.0476 Net cash inflow (outflow) from Net cashOperating inflowactivities (outflow) from P=5,562 P=6,367 P=3,783 OperatingInvesting activitiesactivities P=5,562(123) P=6,367(191) P=(1,657)3,783 InvestingFinancing activities activities (7,101)(123) (6,929)(191) (1,657)(6,471) Financing activities (P=1,662)(7,101) (6,929)(P=753) (P=(6,471)4,345) (P=1,662) (P=753) (P=4,345) The major classes of assets and liabilities of GBPC classified under PFRS 5 as at TheDecember major 31,classes 2020 of are assets as follows: and liabilities of GBPC classified under PFRS 5 as at December 31, 2020 are as follows: (In Millions) Assets under PFRS 5 (In Millions) AssetsCash and under cash PFRS equivalents 5 and short term deposits P=7,363 CashReceivables and cash equivalents and short term deposits P=7,3635,105 ReceivablesOther current assets 5,1056,156 OtherProperty, current plant assets and equipment 48,536,1567 Property,Other noncurrent plant and assets equipment 48,538,8087 Other noncurrent assets P=75,9698,808 Liabilities under PFRS 5 P=75,969 LiabilitiesAccounts payable under PFRSand other 5 current liabilities 6,195 AccountsLong-term payable debt (current and other and currentnoncurrent liabilitiesportions) 28,5186,195 LongOther- termlong -debtterm (currentliabilities and noncurrent portions) 28,5183,460 OtherDeferred long tax-term liabilities liabilities 3,4602,346 Deferred tax liabilities P=40,5192,346 P=40,519 The reserves under PFRS 5 of =129P million pertain to GBPC’s remeasurement losses on its defined benefitThe reserves plans. under PFRS 5 of =129P million pertain to GBPC’s remeasurement losses on its defined benefit plans. Significant contracts, agreements and commitments involving GBPC, its subsidiaries and material Significantassociate are contracts, as follows: agreements and commitments involving GBPC, its subsidiaries and material associate are as follows: Loan covenants. The loans of certain subsidiaries of GBPC [Cebu Energy Development Corporation Loan(CEDC), covenants Panay .Energy The loans Development of certain subsidiariesCorporation of(PEDC) GBPC and [Cebu Toledo Energy Power Development Co (TPC)] Corporation are under (CEDC),project finance Panay and Energy are secured Development by the Corporationprojects’ assets (PEDC) and cash and flows.Toledo AllPower revenues Co (TPC)] derived are from under the projectpower plants finance go and into are the secured Proceeds by Accountthe projects’ and areassets pushed and cashdown flows. to (i) OperatingAll revenues and derived Tax Reserve from the poweraccounts plants based go on into agreed the Proceeds budgets, Account (ii) Debt and Service are pushed Reserve down Account to (i) and Operating (iii) Debt and Service Tax Reserve Payment accountsAccount. based The remaining on agreed cashbudgets, flows, (ii) after Debt satisfying Service Reservethe required Account reserve and accounts, (iii) Debt go Service into the Payment Account. The remaining cash flows, after satisfying the required reserve accounts, go into the *SGVFSM006036* *SGVFSM006036*

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Balance Account, from which the subsidiaries can draw funds for distribution to shareholders. As at BalanceDecember Account, 31, 2020 from and which2019, the subsidiaries canare indraw compliance funds for with distribution the covenants to shareholders. of the loan As at Decemberagreements. 31, 2020 and 2019, the subsidiaries are in compliance with the covenants of the loan agreements. As at December 31, 2020 and 2019, the power generating assets of GBPC’s subsidiaries (TPC, CEDC Asand at PEDC) December with 31,aggregate 2020 and carrying 2019, valuethe power of P=47 generating billion and assets P=50 of billion GBPC’s have subsidiaries been (TPC, CEDC andmortgaged/pledged PEDC) with aggregate as security carrying for these value subsidiaries’ of P=47 billion long-term and P=50 debt billion totaling have P=23 been billion and =32mortgaged/pledgedP billion, respectively. as security for these subsidiaries’ long-term debt totaling P=23 billion and =32P billion, respectively. Electric Power Purchase Agreements (EPPA). GBPC’s power generation facilities consist of: Electric(i) 246 MW Power clean Purchase coal-fired Agreements power plant (EPPA). in ToledoGBPC’s City, powerCebu, whichgeneration is operated facilities by consist CEDC; of: (ii) 164 MW (i)and 246 150 MW MW clean clean coal-fired coal-fired power power plant plants in inToledo Iloilo City,City, Cebu,which which is operated is operated by PEDC; by CEDC; (iii) 60 (ii) MW 164 coal MW andfacility, 150 anMW 82 cleanMW cleancoal-fired coal powerfired power plants plant in Iloilo and City,a 40 MWwhich fuel is operatedoil facility by operated PEDC; (iii)by TPC; 60 MW coal facility,(iv) a 72 an MW 82 MWfuel oil clean facility, coal fireda 20 MWpower fuel plant oil andfacility, a 40 a MW 7.5 MWfuel oilfuel facility oil facility operated and aby 5 TPC;MW fuel oil (iv)facility a 72 operated MW fuel by oil Panay facility, Power a 20 Corporation MW fuel oil (PPC); facility, and a 7.5(v) 7.5MW MW fuel fuel oil facilityoil facility and operated a 5 MW byfuel GBH oil facilityPower Resourcesoperated by Inc. Panay Power Corporation (PPC); and (v) 7.5 MW fuel oil facility operated by GBH Power Resources Inc. GBPC, through its operating generation subsidiaries, entered into bilateral off-take arrangements with GBPC,power off-takers through its such operating as distribution generation utilities, subsidiaries, electric enteredcooperatives, into bilateral retail electricity off-take arrangements suppliers and withdirectly powerconnected off-takers industrial such customers as distribution which utilities, together electric accounted cooperatives, for 93%, 90%retail and electricity 89% of suppliers GBPC’s andtotal directly connectedelectricity salesindustrial for the customers years ended which December together 31,accounted 2020, 2019 for 93%, and 2018, 90% andrespectively. 89% of GBPC’s total electricity sales for the years ended December 31, 2020, 2019 and 2018, respectively. Long-term Coal Supply Agreements. In order to ensure that there is an adequate supply of coal to Long-termoperate the Coalpower Supply plants, Agreements. the respective In operatingorder to ensure plants that have there entered is an into adequate several supply long-term of coal contracts to operatewith local the and power foreign plants, coal the suppliers. respective The operating long-term plants supply have agreements entered into are several as follows: long-term contracts with local and foreign coal suppliers. The long-term supply agreements are as follows: PEDC PEDC Contract Supplier Coal Type ContractDuration Price Basis Quantity per Year SupplierSemirara Mining and Power Corporation LocalCoal Type Duration2021 PriceGNew Basis C Index Quantity per Year Semirara Mining and Power Corporation Local 2021 GNewwith ForexC Index 105,000 MT PT Sakti Nusantara Bakti Indonesia 2017 - 2026 Newwith C Forex Index 105150,000,000 MT PTSamtan SaktiCo., Nusantara Ltd. Bakti Indonesia 20172011 - 20262020 New C Index 150,000 MT SamtanSamsungCo., C&T Ltd. Corporation Indonesia 20112020 - 20202024 NewGNewC C Index Index 150,000100,000 MT SamsungGalaxy Resources C&T Corporation and Trading Corp Indonesia 20202020 - 20242025 GNewC Index 12000,000 MT Galaxy Resources and Trading Corp Indonesia 2020 - 2025 GNewC Index 200,000 MT CEDC CEDC Contract Supplier Coal Type ContractDuration Price Basis Quantity per Year SupplierSemirara Mining and Power Corporation LocalCoal Type Duration-2021 GNewCPrice Basis Index Quantity per Year Semirara Mining and Power Corporation Local -2021 GNewCwith Forex Index 105,000 MT PT Adaro Indonesia 2020-2024 GNewCwith Forex Index 105,000165,000 MT PT AdaroAntang Gunung Meratus Indonesia 2020-2024 GNewC Index 165,000275,000 MT PT Antang Gunung Meratus Indonesia 20202021-20242025 GNewC 275,000110,000 MT PTKideco Antang Gunung Meratus Indonesia 2021-2025 GNewC 110,000 MT KidecoGalaxy Indonesia 2021-2025 GNewC 110,00055,000 MT GalaxyRWood Resources Indonesia 2021-2025 GNewC 55,000 MT RWood Resources Indonesia 2021-2025 GNewC 55,000 MT

*SGVFSM006036* *SGVFSM006036*

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TPC TPC Contract Supplier Coal Type ContractDuration Price Basis Quantity per Year SupplierSemirara Mining and Power Corporation LocalCoal Type Duration-2021 GNewCPrice Basis Index Quantity per Year Semirara Mining and Power Corporation Local -2021 GNewCwith Forex Index 157,000 MT Kideco Indonesia 2021-2025 GNewCwith Forex 157,000110,000 MT KidecoPT Antang Gunung Meratus Indonesia 2021-2025 GNewC 110,00055,000 MT PTGalaxy Antang Gunung Meratus Indonesia 2021-2025 GNewC 110,00055,000 MT GalaxyRWood Resources Indonesia 2021-2025 GNewC 110,000 MT RWood Resources Indonesia 2021-2025 GNewC 110,000 MT In view of management direction to expand coal sources, the respective operating plants have also Inundertaken view of management spot transactions direction for trial to expand shipments coal of sources, prospective the respective long-term operating coal supply. plants The have spot also undertakentransactions spot entered transactions into throughout for trial theshipments year are of as prospective follows: long-term coal supply. The spot transactions entered into throughout the year are as follows: PEDC PEDC Supplier Coal Type Price Basis Quantity SupplierVitol Asia Pte. Ltd. CoalIndonesia Type GNewCPrice IndexBasis 110,000Quantity MT VitolFlames Asia Pte. Ltd. Indonesia GNewC Index 110,00055,000 MT Flames Indonesia GNewC Index 55,000 MT CEDC CEDC Supplier Coal Type Price Basis Quantity SupplierVitol Asia Pte. Ltd.. CoalIndonesia Type Price FixedBasis 55,000Quantity MT Vitol Asia Pte. Ltd.. Indonesia Fixed 55,000 MT Transfer of transmission facilities to the National Grid Corporation of the Philippines (NGCP). In Transfer2016, the of ERC transmission issued Resolution facilities No.to the 23, National Series of Grid 2016 Corporation “A Resolution of the Adopting Philippines Amended (NGCP). Rules In on 2016,the Definition the ERC and issued Boundaries Resolution of ConnectionNo. 23, Series Assets of 2016 for Customers“A Resolution of Transmission Adopting Amended Providers”. Rules on theSection Definition 7 (Transitory and Boundaries Provision) of of Connection the ERC Resolution Assets for No.Customers 23-2016 of mandates Transmission the Generation Providers”. SectionCompanies 7 (Transitory to start the Provision) disposal or of transfer the ERC of Resolution their assets No. with 23-2016 transmission mandates functions the Generation in favor of CompaniesNGCP, Transmission to start the Provider disposal beforeor transfer the generation of their assets company’s with transmission Renewal of functions its Certificate in favor of of NGCP,Compliance. Transmission Provider before the generation company’s Renewal of its Certificate of Compliance. To comply with the ERC Resolution, GBPC’s generation subsidiaries, namely PEDC, TPC and ToCEDC comply entered with into the anERC agreement Resolution, with GBPC’s the NGCP generation for the transfer subsidiaries, of the namelygeneration PEDC, companies’ TPC and CEDCtransmission entered facilities. into an agreement NGCP made with a totalthe NGCP deposit for of the P=159 transfer million of forthe the generation subject transmission companies’ assets. transmissionThe transfer offacilities. the transmission NGCP made assets a totalof CEDC deposit was of completed P=159 million in Decemberfor the subject 2019 transmission at a gain of assets. TheP=148 transfer million. of the transmission assets of CEDC was completed in December 2019 at a gain of P=148 million. However, the transfer of the transmission assets of PEDC and TPC remains pending as at However,March 19, the2021 transfer due to of the the uncertainty transmission of theassets consummation of PEDC and of TPC the sale remains of assets pending to NGCP. as at PEDC, TPC Marchand NGCP 19, 2021 agreed due to to perform the uncertainty additional of theundertaking consummation before of the the transmission sale of assets assets to NGCP. can be PEDC, transferred. TPC andThe NGCPtransmission agreed assets to perform shall remainadditional as property, undertaking plant before and equipment the transmission until such assets time can that be thetransferred. Theschedule transmission of the transfer assets andshall sale remain has beenas property, set. plant and equipment until such time that the schedule of the transfer and sale has been set. The remaining deposit for the transmission properties amounting to P=126 million is included as The“Liabilities remaining under deposit PFRS for5” andthe transmission “Accounts payable properties and amountingaccrued expenses” to P=126 as million at December is included 31, 2020as and “Liabilities2019, respectively. under PFRS 5” and “Accounts payable and accrued expenses” as at December 31, 2020 and 2019, respectively.

*SGVFSM006036* *SGVFSM006036*

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Final Acceptance of PEDC 3. In 2014, PEDC began the construction of PEDC 3 in its existing Panay FinalCoal Plant Acceptance Facility of in PEDC Barangay 3. In Ingore, 2014, LaPEDC Paz, began Iloilo theCity. construction PEDC 3 is of registered PEDC 3 inwith its theexisting Board Panay of CoalInvestments Plant Facility (BOI) underin Barangay BOI Registration Ingore, La Paz,Number Iloilo 2014-110 City. PEDC on July 3 is 22, registered 2014. PEDC with the declared Board of Investmentscommercial operations(BOI) under of BOIits 150 Registration MW Expansion Number Plant 2014-110 on January on July 26, 22, 2017 2014. in accordance PEDC declared with the commercialterms and conditions operations of of its its Power 150 MW Supply Expansion Agreements. Plant onThe January Plant issued 26, 2017 the inTaking accordance Over Certificate with the termson May and 31, conditions 2018. of its Power Supply Agreements. The Plant issued the Taking Over Certificate on May 31, 2018. In connection with the abovementioned project (the “Project”), PEDC entered into a Supply, Design Inand connection Engineering with Contract the abovementioned and Supervisory project Contract (the “Project”),with Formosa PEDC Heavy entered Industries into a CorporationSupply, Design and(“FHI”) Engineering and a Construction Contract and Contract Supervisory with True Contract North with Manufacturing Formosa Heavy Services Industries Corporation Corporation (“FHI”)(“TNMSC”). and a Pursuant Construction to the Contract aforementioned with True Contracts, North Manufacturing certain sums Serviceswere claimed Corporation by PEDC from (“TNMSC”).FHI and TNMSC Pursuant in relation to the toaforementioned the supply and Contracts, construction certain of the sums Project were (the claimed “Amounts by PEDC Payable”). from FHIIn the and course TNMSC of the in negotiations relation to the between supply the and Parties, construction FHI and of TNMSCthe Project offered (the “Amounts to pay a portion Payable”). of the InAmounts the course Payable of the and negotiations PEDC has between accepted the the Parties, offer. PEDC,FHI and FHI TNMSC and TNMSC offered enteredto pay a into portion a of the AmountsMemorandum Payable of Agreement and PEDC (“MOA”)has accepted where the theoffer. parties PEDC, agreed FHI and and acknowledged TNMSC entered the intofinal a amount Memorandumpayable as US$18.78 of Agreement Million. (“MOA”) As of December where the 31, parties 2020, agreed the total and amount acknowledged collected the is US$9.8final amount payableMillion, asand US$18.78 PEDC still Million. has an Asaccrued of December receivable 31, of 2020, US$8.98 the total Million. amount collected is US$9.8 Million, and PEDC still has an accrued receivable of US$8.98 Million. Market Participation Agreement (MPA). GBPC, through its power generation companies, sells electricityMarket Participation through its Agreementbilateral power (MPA) supply. GBPC, agreements through or its the power WESM. generation In 2011, companies, GBPC’s sells electricitysubsidiaries through and the its Philippine bilateral powerElectricity supply Market agreements Corporation or the (PEMC)WESM. entered In 2011, into GBPC’s an MPA setting subsidiariesforth the terms and and the conditions Philippine for Electricity the eligibility Market of Corporation the entities to(PEMC) participate entered in the into WESM an MPA and setting which forthallows the electricity terms and to conditions be injected for into the or eligibility withdrawn of fromthe entities the Grid. to participate For the year in endedthe WESM and which allowsDecember electricity 31, 2020, to be2019 injected and 2018, into orGBPC withdrawn and subsidiaries from the Grid. have Forsales the from year WESM ended transactions that Decemberamounted to31, =1,220P 2020, million,2019 and =3,154P 2018, millionGBPC andand subsidiaries=2,503P million, have respectively. sales from WESM Purchased transactions power from that amountedthe WESM to amounted =1,220P million, to P=1,168 =3,154P million, million =1,222P and million=2,503P andmillion, =1,607P respectively. million in 2020,Purchased 2019 power and 2018, from therespectively. WESM amounted to P=1,168 million, =1,222P million and =1,607P million in 2020, 2019 and 2018, respectively. Emergency Power Supply Contract with More Electric and Power Corporation (MORE). Under RAEmergency No. 11212, Power as wellSupply as underContract the withDOE More Department Electric Circular and Power DC Corporation2018-02-0003, (MORE). MORE Underis RAauthorized No. 11212, to procure as well emergency as under the power DOE on Department a negotiated Circular basis provided DC 2018-02-0003, such supply MORE shall not is exceed authorizedone (1) year to and procure the rates emergency therefore power shall onnot a benegotiated higher than basis the provided latest ERC-approved such supply shall rates not in theexceed area. onePursuant (1) year to such and theauthority, rates therefore PEDC and shall PPC not negotiated be higher withthan theMORE latest for ERC-approved the supply of rates1-year in the area. Pursuantemergency to powersuch authority, to Iloilo City.PEDC On and May PPC 26, negotiated 2020, PEDC with and MORE PPC for entered the supply into Emergency of 1-year Electric emergencyPower Purchase power Agreements to Iloilo City. (EPPAs) On May with 26, MORE 2020, forPEDC a contracted and PPC capacityentered intoof 62MW Emergency and 20MW Electric Powerrespectively. Purchase On Agreements November 4,(EPPAs) 2020, the with DOE MORE issued for a aCertificate contracted of capacity Exemption of 62MW (COE) and to MORE 20MW respectively.exempting MORE On November from the conduct4, 2020, of the competitive DOE issued selection a Certificate process of Exemption(CSP) for the (COE) EPPAs to MOREwith exemptingPEDC and MOREPPC for from the period the conduct from June of competitive 4, 2020 to selectionJune 3, 2021 process with (CSP) contracted for the capacity EPPAs of with 62MW PEDCand 20MW and PPC respectively. for the period from June 4, 2020 to June 3, 2021 with contracted capacity of 62MW and 20MW respectively. Electric Power Purchase Agreement with Panay Electric Company, Inc. (PECO). On ElectricJanuary 19,Power 2019, Purchase the legislative Agreement franchise with Panay of PECO Electric to distribute Company, electricity Inc. (PECO). in Iloilo On City expired Januarywithout having19, 2019, been the renewed. legislative The franchise legislative of PECO franchise to distribute to own and electricity operate thein Iloilo distribution City expired network withoutin Iloilo havingCity was been granted renewed. to MORE The legislative under RA franchise No. 11212. to ownPEDC and and operate PPC havethe distribution power supply network inagreements Iloilo City with was PECO granted which to MORE will expire under in RA 2036 No. and 11212. 2026, PEDC respectively. and PPC have power supply agreements with PECO which will expire in 2036 and 2026, respectively. On March 5, 2020, the ERC revoked PECO’s Provisional CPCN and issued a CPCN to MORE. OnPECO March has 5,filed 2020, a Motion the ERC for revoked Reconsideration PECO’s Provisionalof the said ERC CPCN order. and issued a CPCN to MORE. PECO has filed a Motion for Reconsideration of the said ERC order. With the revocation of PECO’s CPCN and the pending collection of receivables from them, GBPC Withrecorded the provisionsrevocation totallingof PECO’s =955.35P CPCN million and the as pending of December collection 31, 2020.of receivables Discussions from with them, PECO GBPC for recordedthe settlement provisions of these totalling outstanding =955.35P obligations million as are of on-going December as 31, at March 2020. Discussions19, 2021. with PECO for the settlement of these outstanding obligations are on-going as at March 19, 2021. *SGVFSM006036* *SGVFSM006036*

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Compliance with Public Offering Requirement. The ERC has previously issued Resolution No. 9 ComplianceSeries of 2011 with (the Public “Public Offering Offering Requirement Rules”) that. The requires ERC hasgeneration previously companies issued Resolution and distribution No. 9 Seriesutilities of which 2011 are(the not “Public publicly Offering listed Rules”)to offer thatand sellrequires to the generation public a portion companies of not and less distribution than fifteen utilitiespercent (15%)which ofare their not publiclycommon listed shares to of offer stock and (“PO sell Requirement”)to the public a portionpursuant of to not Section less than 43(t) fifteen of the percentRepublic (15%) Act No. of their 9136 common and Rule shares 3, Section of stock 4(m) (“PO of its Requirement”) Implementing pursuant Rules and to RegulationsSection 43(t) of the Republic(“EPIRA”). Act The No. EPIRA 9136 and provides Rule 3, that Section generation 4(m) of companies its Implementing or their respectiveRules and holdingRegulations companies (“EPIRA”).that are already The listed EPIRA in the provides PSE are that deemed generation in compliance companies of or the their PO respective Requirement. holding companies that are already listed in the PSE are deemed in compliance of the PO Requirement. GBPC has taken the position that since the ultimate shareholders of its generation companies are all GBPClisted companies has taken thewith position the PSE, that the since generation the ultimate companies shareholders are deemed of its compliant generation with companies the PO are all listedRequirement. companies However, with the the PSE, ERC the Legal generation has applied companies the conservative are deemed view, compliant which with is to the apply PO a literal Requirement.reading of the However,phrase “their the respectiveERC Legal holding has applied companies” the conservative and the definition view, which of a isholding to apply company, a literal readingsuch that of the the publicly phrase “theirlisted respectivecompany must holding be thecompanies” entity directly and the owning definition at least of a25% holding of the company, voting suchstocks that in the generationpublicly listed company company in order must for be thethe generationentity directly company owning to atbe least considered 25% of exemptthe voting from stocksthe PO inrequirement. the generation company in order for the generation company to be considered exempt from the PO requirement. GBPC intended to persuade the ERC to consider its position that an indirect ownership in a GBPCgeneration intended company to persuade by a publicly-listed the ERC to consider company its falls position within that the an scope indirect of the ownership exemption in undera the generationEPIRA. The company office of by the a publicly-listedERC Chair has companyinformed fallsGBP within that the the matter scope has of thealready exemption been discussed under the at EPIRA.a Commission The office level. of GBPC the ERC understands Chair has that informed the ERC GBP secured that the an matter Opinion has from already the Securitiesbeen discussed and at aExchange Commission Commission level. GBPC and notesunderstands that this that requirement the ERC secured affects mostan Opinion of the generatingfrom the Securities companies and (and Exchangenot only GBPC). Commission For now, and GBPC’s notes that Operating this requirement Plants were affects issued most with of theProvisional generating Authority companies to (and notOperate only (PAO).GBPC). For For all now, of GBPC’s GBPC’s Operating Operating Plants, Plants GBPCwere issued notes withthat thisProvisional PO concern Authority should to be Operateresolved (PAO).not later For than all CEDC’s of GBPC’s PAO Operating expiration Plants, on August GBPC 20, notes 2021. that this PO concern should be resolved not later than CEDC’s PAO expiration on August 20, 2021. Termination of SRPI Power Supply Agreement. In a letter dated March 26, 2019, Zamboanga City TerminationElectric Cooperative of SRPI (ZAMCELCO)Power Supply Agreement sent a Notice. In ofa letter Termination dated March for the 26, Power 2019, Sales Zamboanga Agreement City Electric(PSA) with Cooperative SRPI. SRPI (ZAMCELCO) is a wholly owned sent a Noticesubsidiary of Termination of ATEC. for the Power Sales Agreement (PSA) with SRPI. SRPI is a wholly owned subsidiary of ATEC. ZAMCELCO’s basis for terminating the PSA was the failure of the parties to achieve the Effective ZAMCELCO’sDate under the PSA. basis Underfor terminating the PSA, thespecific PSA conditionswas the failure needed of theto be parties achieved to achieve in order the to Effective trigger the DateEffective under Date the ofPSA. the UnderPSA. However,the PSA, specific in an agreement conditions dated needed October to be 25,achieved 2018 – in a orderfull 5 tomonths trigger prior the Effectiveto the issuance Date ofof thethe PSA.termination However, letter in – anZAMCELCO agreement dated and SRPI October entered 25, 2018into an– aagreement full 5 months whereby prior tothe the parties issuance declared of the that termination the remaining letter conditions – ZAMCELCO precedent and SRPIfor Effective entered Dateinto anshall agreement be waived. whereby theAccordingly, parties declared in the samethat the agreement, remaining the conditions parties agreed precedent that thefor Effective Date ofshall the be PSA waived. shall be set Accordingly,on October 5, in2018. the same Under agreement, the PSA, theSRPI parties has 36 agreed months that from the EffectiveEffective DateDate, of or the until PSA October shall be2021, set onto startOctober delivering 5, 2018. power Under to ZAMCELCO.the PSA, SRPI SRPIhas 36 may months supply from the Effective power from Date, its or plant, until or October it may 2021, tosource start thedelivering power frompower third to ZAMCELCO. parties. SRPI may supply the power from its plant, or it may source the power from third parties. In a letter dated May 14, 2019, SRPI responded to ZAMCELCO’s termination letter to repudiate the Intermination. a letter dated SRPI May essentially 14, 2019, argued SRPI thatresponded the Effective to ZAMCELCO’s Date has been termination achieved letterand there to repudiate is no basis the to termination.terminate the SRPI PSA. essentially argued that the Effective Date has been achieved and there is no basis to terminate the PSA. As of March 19, 2021, SRPI has an ongoing review of the proposals for the Engineering, AsProcurement of March 19,and 2021,Construction SRPI has (EPC) an ongoing submitted review on August of the proposals 30, 2018. forSRPI the hasEngineering, already received the Procurementproject proposals and Constructionfrom various (EPC)bidders, submitted and selection on August for the 30, contractor 2018. SRPI that willhas alreadytake part received for the the projectconstruction proposals of the from power various plant bidders,is scheduled and selection in the second for the quarter contractor of 2021, that followed will take bypart the for issuance the constructionof Limited Notice of the to power Proceed plant and is Finalscheduled Notice in tothe Proceed second inquarter June 2021of 2021, and followed November by 2021, the issuance ofrespectively. Limited Notice The power to Proceed plant andis expected Final Notice to be tooperational Proceed in in June April 2021 2024. and November 2021, respectively. The power plant is expected to be operational in April 2024.

*SGVFSM006036* *SGVFSM006036*

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Claim for terminated Coal Supply Agreement. Due to non-conforming coal quality deliveries, PEDC Claimterminated for terminated its Coal Supply Coal SupplyAgreement Agreement with Lucent. Due Aminto,to non-conforming Inc. (“LAI”) coal in 2017.quality On deliveries, PEDC terminatedOctober 16, its 2018, Coal LAI Supply filed Agreement a Notice of with Arbitration Lucent Aminto,before the Inc. Singapore (“LAI”) Internationalin 2017. On Arbitration OctoberCentre (“SIAC”), 16, 2018, claimingLAI filed a atotal Notice amount of Arbitration of US$608 before thousand the Singapore which it later International increased Arbitrationto a total Centreamount (“SIAC”), of US$1.1 claiming million plus a total unquantified amount of damagesUS$608 thousandin its Statement which itof later Claim. increased In its Statement to a total of amountDefence of and US$1.1 Counterclaim, million plus PEDC unquantified filed a total damages counterclaim in its Statement of US$437 of thousand Claim. In against its Statement LAI. On of DefenceDecember and 18, Counterclaim, 2020, the parties PEDC executed filed a a total Settlement counterclaim Agreement of US$437 to settle thousand all ongoing against disputes LAI. On Decemberbetween the 18, parties. 2020, Thethe partiesparties executedhave also a jointly Settlement requested Agreement the SIAC to settle to issue all ongoingan order disputesfor the betweentermination the ofparties. the arbitration The parties and have record also the jointly settlement requested in the the form SIAC of toan issuearbitral an awardorder foron theagreed terminationterms. of the arbitration and record the settlement in the form of an arbitral award on agreed terms. On February 23, 2021, the SIAC issued a final Award by Consent pursuant to the parties’ Settlement OnAgreement. February Following 23, 2021, issuancethe SIAC of issued the Consent a final AwardAward, by PEDC Consent remitted pursuant payment to the of parties’ the final Settlement Agreement.settlement amount Following to LAI. issuance of the Consent Award, PEDC remitted payment of the final settlement amount to LAI. Income Tax Holiday. PEDC has two BOI registrations for its Phase I (164 MW) and Phase II (150 IncomeMW or PEDCTax Holiday 3) projects.. PEDC As has BOI two registered BOI registrations entity, PEDC for its is Phaseentitled I (164 to several MW) incentivesand Phase includingII (150 MWan ITH or asPEDC a pioneer 3) projects. entity (for As BOIPhase registered I) for four entity, years PEDC from March is entitled 26, 2011,to several the actualincentives start includingdate of ancommercial ITH as a pioneeroperations. entity PEDC (for Phase has availed I) for fourof a two-yearyears from ITH March extension 26, 2011, for thethe Phaseactual I start project date until of commercialMarch 25, 2017. operations. On the PEDCother hand, has availed the Phase of a II two-year project (PEDCITH extension 3) is also for entitled the Phase to ITH I project incentive until as Marchan expansion 25, 2017. entity On for the three other (3) hand, years the from Phase August II project 1, 2016 (PEDC or on 3) the is actualalso entitled start date to ITH of commercial incentive as anoperations, expansion whichever entity for is three earlier, (3) butyears in fromno case August earlier 1, than2016 the or dateon the of actualregistration. start date The of ITH commercial expired operations,on July 31, 2019.whichever ITH is incentive earlier, butenjoyed in no bycase PEDC earlier amounted than the P=163date ofmillion registration. in 2019. The ITH expired on July 31, 2019. ITH incentive enjoyed by PEDC amounted P=163 million in 2019.

34. Financial Risk Management Objectives and Policies 34. Financial Risk Management Objectives and Policies The Company’s principal financial instruments consist mainly of borrowings from related parties and Thethird Company’s party creditors, principal proceeds financial of which instruments were used consist for the mainly acquisition of borrowings of investments from related and in parties financing and thirdoperations. party creditors, The Company proceeds has ofother which financial were used assets for and the financial acquisition liabilities of investments such as cash and inand financing cash operations.equivalents, Theshort-term Company deposits, has other receivables, financial accounts assets and payable financial and liabilities other current such liabilities,as cash and service cash equivalents,concession fees short-term payable deposits, and other receivables, related party accounts transactions payable which and ariseother directly current fromliabilities, the Company’s service concessionoperations. fees The payableCompany and also other holds related financial party assets transactions at FVPL which and FVOCI.arise directly from the Company’s operations. The Company also holds financial assets at FVPL and FVOCI. The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, Theinterest main rate risks risk arising and foreign from thecurrency Company’s risk. Thefinancial BOD instruments reviews and are approves credit risk,policies liquidity of managing risk, interesteach of theserate risk risks and and foreign they arecurrency summarized risk. The below. BOD reviews and approves policies of managing each of these risks and they are summarized below. Credit Risk Credit Risk Risk Management Risk Management The Company manages and controls credit risk by setting limits on the amount of risk that the TheCompany Company is willing manages to accept and controls for individual credit risk counterparties by setting limits and by on monitoring the amount exposures of risk that in therelation to Companysuch limits. is willingSpecific to risks accept are for as follows:individual counterparties and by monitoring exposures in relation to such limits. Specific risks are as follows: ƒ Power. GBPC has established controls and procedures on its credit policy to determine and ƒ Power.monitor GBPCthe credit has worthiness established of controls customers and and procedures counterparties. on its credit The policypower tosupply determine contracts and with monitorcustomers the include credit worthinessinherent protection of customers clauses, and i.e., counterparties. provisions for The interest power on supply unpaid contracts billings, with and customerschange in laws/circumstances,include inherent protection among clauses,others. GBPCi.e., provisions group’s maximumfor interest credit on unpaid risk is billings, equal to and the changecarrying in value laws/circumstances, of the GBPC’s financialamong others. assets. GBPC The credit group’s quality maximum of financial credit assets risk is is equal being to the carryingmanaged value by GBPC of the using GBPC’s internal financial credit assets. ratings The(see credit Note 33).quality of financial assets is being managed by GBPC using internal credit ratings (see Note 33). *SGVFSM006036* *SGVFSM006036*

242 - 134 - - 134 - ƒ Toll Operations. Receivables arose mainly from electronic toll card service providers of PT Nusantara motorists ply on its toll roads. Trade receivables also come from energy sales and ƒ Tolltreated Operations water sales. Receivables from the respective arose mainly customers from electronicof RPSL and toll DCCcard servicewhich are providers instrumentalities of ofPT the Nusantara government motorists of Indonesia. ply on its toll roads. Trade receivables also come from energy sales and treated water sales from the respective customers of RPSL and DCC which are instrumentalities Receivablesof the government also included of Indonesia. non-toll revenues in the form of advertising services particularly from SMART (see Note 19) and service fees collected from business locators, generally called TSF (tollReceivables service facilities),also included along non-toll the stretch revenues of the in NLEX.the form The of advertising arrangements services are backed particularly by a service from facilitySMART contract (see Note between 19) and NLEX service Corp. fees and collected the various from locators.business locators,The credit generally risk on thesecalled TSF arrangements(toll service facilities), is minimal along because the stretch the fees of are the collected NLEX. Theon a arrangements monthly basis are mostly backed from by a service well-establishedfacility contract betweencompanies. NLEX The Corp. exposure and theis also various limited locators. given thatThe thecredit recurring risk on amountsthese are not significantarrangements and is there minimal are adequate because thesafeguards fees are incollected the contracts on a monthly against paymentbasis mostly delinquency. from well-established companies. The exposure is also limited given that the recurring amounts are not significantNLEX Corp. and also there has are advances adequate made safeguards to DPWH, in the a Philippine contracts againstgovernment payment entity, delinquency. which is covered by a Reimbursement Agreement (see Note 8). NLEX Corp. also has advances made to DPWH, a Philippine government entity, which is ƒ Water.covered Becauseby a Reimbursement of the basic need Agreement service (seethat NoteMaynilad 8). provides, historical collections of Maynilad are relatively high. Credit risk exposure is widely dispersed. Save for the extended ƒ paymentWater. Because terms provided of the basic to Maynilad’s need service customers that Maynilad in 2020 provides, resulting historical from the collectionsimpact of COVID- of 19Maynilad (see Notes are relatively3 and 5), Mayniladhigh. Credit billings risk exposure are payable is widely on the dispersed. due date, which Save foris normally the extended 14 days frompayment the billingterms provided date. However, to Maynilad’s customers customers are given in 202060 days resulting to settle from any the unpaid impact bills of beforeCOVID- disconnection.19 (see Notes 3 and 5), 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 Receivabledisconnection. balances are monitored on an ongoing basis.

ƒ Healthcare.Receivable balances The hospitals are monitored of the Company on an ongoing manage basis. risk by setting credit limits for all customers and by monitoring credit exposures and the creditworthiness of counterparties. Credit limits are ƒ setHealthcare. and a regular The reviewhospitals of ofthese the limitsCompany is being manage done risk by management.by setting credit Credit limits is forextended all customers only to reputableand by monitoring entities such credit as exposuresHMO and andinsurance the creditworthiness companies. of counterparties. Credit limits are set and a regular review of these limits is being done by management. Credit is extended only to ƒ Rail.reputable Receivables entities such included as HMO non-rail and insurancerevenues from companies. lease of commercial spaces located within LRT-1 stations, on interconnection fees and advertising contracts. The arrangements are mostly ƒ withRail. well-established Receivables included companies non-rail backed revenues by contracts from lease with of provisions commercial for spaces payment located delinquency. within TheLRT-1 exposure stations, is onalso interconnection limited given that fees the and recurring advertising amounts contracts. are collected The arrangements on a monthly are basismostly andwith are well-established not significant. companies backed by contracts with provisions for payment delinquency. The exposure is also limited given that the recurring amounts are collected on a monthly basis ƒ andLogistics. are not Customers significant. are subject to credit verification procedures and approval to ensure creditworthiness. The logistics group has policies that limit the amount of credit exposure to any ƒ particularLogistics. customers. Customers areThe subject logistics to groupcredit doesverification not have procedures any significant and approval credit risk to ensureexposure to anycreditworthiness. single counterparty. The logistics group has policies that limit the amount of credit exposure to any particular customers. The logistics group does not have any significant credit risk exposure to Withany the single exception counterparty. of cash and cash equivalents, the maximum exposure to credit risk (both pre and post consideration of collateral and credit enhancements) at the reporting date is the carrying value of eachWith classthe exception of financial of cashassets and as cashdisclosed equivalents, below. the maximum exposure to credit risk (both pre and post consideration of collateral and credit enhancements) at the reporting date is the carrying value of Theeach maximum class of financial exposure assets to credit as disclosed risk on cashbelow. and cash equivalents without considering the effects of collaterals, credit enhancements and other credit risk mitigation techniques is the carrying value of thisThe financialmaximum asset. exposure After to considering credit risk onthe cash credit and enhancement cash equivalents pertaining without to insuredconsidering deposits the effectsin banks of ascollaterals, prescribed credit by Philippine enhancements Deposit and Insurance other credit Corporation, risk mitigation net maximum techniques exposure is the carrying as at value of Decemberthis financial 31, asset. 2020 andAfter 2019 considering amounted the to credit P=41,068 enhancement million and pertaining P=72,713 tomillion, insured respectively. deposits in banks as prescribed by Philippine Deposit Insurance Corporation, net maximum exposure as at December 31, 2020 and 2019 amounted to P=41,068 million and P=72,713 million, respectively.

*SGVFSM006036* *SGVFSM006036* 243 - 135 - - 135 - Impairment of Financial Assets

TheImpairment Company of hasFinancial the following Assets financial assets that are subject to the expected credit loss model: (i) receivables; and (ii) debt investments carried at FVOCI. While cash and cash equivalents, restrictedThe Company cash hasand theshort-term following deposits financial are assetsalso subject that are to subject the impairment to the expected requirements credit loss of IFRS model: 9, the identified(i) receivables; impairment and (ii) loss debt was investments immaterial. carried at FVOCI. While cash and cash equivalents, restricted cash and short-term deposits are also subject to the impairment requirements of IFRS 9, the Theidentified Company impairment applies lossthe PFRS was immaterial. 9 simplified approach in measuring expected credit losses which uses a lifetime expected loss allowance for receivables. To measure the expected credit losses, receivables haveThe Company been grouped applies based the onPFRS shared 9 simplified credit risk approach characteristics in measuring and the expected days past credit due. lossesThe expected which uses lossa lifetime rates areexpected based losson the allowance payment for profiles receivables. of revenues/sales To measure over the aexpected period of credit at least losses, 24 months receivables beforehave been the groupedrelevant reportingbased on shareddate and credit the correspondingrisk characteristics historical and the credit days losses past due.experienced The expected within thisloss period.rates are The based historical on the losspayment rates profilesare adjusted of revenues/sales to reflect current over and a period forward-looking of at least 24 information months onbefore macroeconomic the relevant reportingfactors affecting date and the the ability corresponding of the customers/counterparties historical credit losses toexperienced settle the within receivables.this period. TheThe historicalCompany loss has ratesidentified are adjusted the Gross to reflectDomestic current Product and (GDP),forward-looking CPI, inflation information rate and unemploymenton macroeconomic rate factorsin the locations affecting in the which ability it sellsof the its customers/counterparties goods and services to be to the settle most the relevant factors,receivables. and accordinglyThe Company adjusts has identified the historical the Gross loss rates Domestic based Producton expected (GDP), changes CPI, inflationin these factors. rate and Generally,unemployment receivables rate in theare locationswritten-off in ifwhich past dueit sells for itsmore goods than and one services year and to arebe thenot mostsubject relevant to enforcementfactors, and accordingly activity. adjusts the historical loss rates based on expected changes in these factors. Generally, receivables are written-off if past due for more than one year and are not subject to Impairmentenforcement losses activity. on receivables are presented as Provision for ECL under “General and administrative expenses” account in the consolidated statement of comprehensive income. SubsequentImpairment recoverieslosses on receivables of amounts are previously presented written as Provision off are forcredited ECL underagainst “General the same and line item. administrative expenses” account in the consolidated statement of comprehensive income. ThereSubsequent are no recoveries significant of concentrations amounts previously of credit written risk, whetheroff are credited through against exposure the tosame individual line item. customers, specific industry sectors and/or regions. There are no significant concentrations of credit risk, whether through exposure to individual Thecustomers, table below specific shows industry the gross sectors carrying and/or amount regions. of financial assets and the loss allowances:

The table below shows the grossNot carryingCredit-impaired amount of financialCredit-impaired assets and the loss allowances:Total Gross Gross Gross CarryingNot Credit-impairedAllowance CarryingCredit-impairedAllowance Carrying TotalAllowance on AmountGross on ECL AmountGross on ECL AmountGross ECL Carrying Allowance Carrying(In Millions)Allowance Carrying Allowance on December 31, 2020 Amount on ECL Amount on ECL Amount ECL Investment in UITF (a) P=7,284 P= – (InP= Millions) – P= – P=7,284 P= – December Receivables 31, 2020 10,598 – 1,506 1,506 12,104 1,506 InvestmentOther current in assets:UITF (a) P=7,284 P= – P= – P= – P=7,284 P= – Receivables Due from related 10,598 – 1,506 1,506 12,104 1,506 Other currentparties assets: 279 – – – 279 – MiscellaneousDue from related depositsparties and 279 – – – 279 – Miscellaneousothers 943 – – – 943 – Other depositsnoncurrent and assets: Quotedothers equity 943 – – – 943 – Other sharesnoncurrent assets: 150 – – – 150 – UnquotedQuoted equity equity shares 1,047150 – – – 1,047150 – UnquotedQuoted club equity shares 27 – – – 27 – Othershares receivables 1,0472,370 – – – 2,3701,047 – LongQuoted term club cash shares 27 – – – 27 – Otherand receivables miscellaneous 2,370 – – – 2,370 – Longdeposits term cash 1,059 – – – 1,059 – and miscellaneous P=23,757 P= – P=1,506 P=1,506 P=25,263 P=1,506 deposits 1,059 – – – 1,059 – P=23,757 P= – P=1,506 P=1,506 P=25,263 P=1,506

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Not Credit-impaired Credit-impaired Total NotGross Credit-impaired GrossCredit-impaired Gross Total CarryingGross Allowance CarryingGross Allowance CarryingGross Allowance on CarryingAmount Allowanceon ECL CarryingAmount Allowanceon ECL CarryingAmount AllowanceECL on December 31, 2019 Amount on ECL Amount on ECL Amount ECL (a) DecemberInvestment 31, 2019in UITF P=812 P=– P=– P=– P=812 P=– InvestmentReceivables in UITF (a) 15,898P=812 P=– 1,752P=– 1,752P=– 17,650P=812 1,752P=– ReceivablesOther current assets: 15,898 – 1,752 1,752 17,650 1,752 Other Due current from related assets: Dueparties from related 273 – – – 273 – Miscellaneousparties 273 – – – 273 – Miscellaneousdeposits and othersdeposits and 424 – – – 424 – Other othersnoncurrent assets: 424 – – – 424 – Other Investment noncurrent in assets: Investmentbonds and in bondstreasury and notes 163 – – – 163 – Quotedtreasury equity notes 163 – – – 163 – Quotedshares equity 219 – – – 219 – Unquotedshares equity 219 – – – 219 – Unquotedshares equity 924 – – – 924 – sharesQuoted club shares 92431 – – – 92431 – QuotedOther receivables club shares 1,63431 – – – 1,63431 – LongOther termreceivables cash 1,634 – – – 1,634 – Longand miscellaneous term cash anddeposits miscellaneous 581 – – – 581 – deposits P=20,959581 P= – P=1,752– P=1,752– P=22,711581 P=1,752– (a)Included under ‘Cash and cash equivalentsP=20,959 and short-termP= – deposits’.P=1,752 P=1,752 P=22,711 P=1,752 (a)Included under ‘Cash and cash equivalents and short-term deposits’. Set out below is the information about the credit risk exposure on the Company’s receivables: Set out below is the information about the credit risk exposure on the Company’s receivables: Days past due Current <30 31-60Days past61- 90due 91-180 >180 Total Current <30(In Millions31-60 except for61 expected-90 91loss-180 rates) >180 Total December 31, 2020: (In Millions except for expected loss rates) DecemberExpected 31, loss2020 rate: 2% 5% 35% 26% 38% 15% 12% ExpectedGross carrying loss rate amount P=4,5142% P=1,8355% P=61835% P=48026% P=1,17038% P=3,48715% P=12,10412% GrossLoss allowance carrying amount P=4,51481 P=1,83597 P=618217 P=480126 P=1,170445 P=3,487540 P=12,1041,506 Loss allowance 81 97 217 126 445 540 1,506 December 31, 2019: DecemberExpected 31, loss2019 rate: 1% 2% 8% 9% 22% 59% 10% ExpectedGross carrying loss rate amount P=11,6401% P=2,2102% P=5418% P=3009% P=47922% P=2,48059% P=17,65010% GrossLoss allowance carrying amount P=11,64078 P=2,21042 P=54145 P=30028 P=479103 P=2,4801,456 P=17,6501,752 Loss allowance 78 42 45 28 103 1,456 1,752 The closing loss allowance for receivables as at December 31 reconcile to the opening loss allowancesThe closing as loss follows: allowance for receivables as at December 31 reconcile to the opening loss allowances as follows: 2020 2019 2020 (In Millions) 2019 Opening loss allowance as at beginning of year (a) P=1,752 (In Millions)P=1,632 OpeningIncrease inloss loss allowance allowance as recognizedat beginning in of profit year or(a) loss P=1,752 P=1,632 Increaseduring in lossthe year allowance (see Note recognized 22) in profit or loss 597 397 Reversal/reclassification/writtenduring the year (see Note 22)-off (843)597 (277)397 Reversal/reclassification/writtenBalance as at December 31 -off P=1,506(843) P=1,752(277) Balance as at December 31 P=1,506 P=1,752

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Debt investments at FVOCI include quoted corporate bonds, treasury bonds and notes issued by the RepublicDebt investments of the Philippines, at FVOCI andinclude quoted quoted long-term corporate negotiable bonds, treasurycertificate bonds of deposits and notes (LTNCD) issued by of the Republicvarious banks of the which Philippines, are presented and quoted under long-term “Other noncurrent negotiable assets” certificate in the of consolidated deposits (LTNCD) statement of of financialvarious banks position. which The are Company presented only under invests “Other in noncurrentgovernment assets” securities in the and consolidated instruments statement that are of gradedfinancial in position. the top investment The Company category only (AAA) invests by in creditgovernment rating securitiesagencies and, and therefore,instruments are that considered are gradedto be low in creditthe top risk investment investments. category The (AAA) Company by creditdid not rating recognize agencies provision and, therefore, for expected are consideredcredit lossesto be low on itscredit debt risk instruments investments. at FVOCI The Company as at December did not 31,recognize 2020 and provision 2019. for expected credit losses on its debt instruments at FVOCI as at December 31, 2020 and 2019. Liquidity Risk TheLiquidity Company Risk manages its liquidity profile to be able to finance its capital expenditures and service itsThe maturing Company debts manages by maintaining its liquidity sufficient profile to cash be ableand cashto finance equivalents, its capital and expenditures the availability and of service funding itsthrough maturing an adequate debts by amount maintaining of committed sufficient credit cash andfacilities cash (seeequivalents, Note 18). and the availability of funding through an adequate amount of committed credit facilities (see Note 18). The Company monitors its cash position using a cash forecasting system. All expected collections, checkThe Company disbursements monitors and its other cash cash position payments using area cash determined forecasting daily system. to arrive All at expected the projected collections, cash positioncheck disbursements to cover its obligations and other cash and topayments ensure thatare determinedobligations dailyare met to asarrive they at fall the due. projected The Company cash monitorsposition to its cover cash itsflow obligations position, particularlyand to ensure the that collections obligations from are receivables, met as they receiptsfall due. of The dividends Company monitorsand the funding its cash requirements flow position, of particularlyoperations, theto ensure collections an adequate from receivables, balance of receiptsinflows andof dividends outflows. Theand theCompany funding also requirements has online offacilities operations, with toits ensure depository an adequate banks wherein balance bank of inflows balances and are outflows. monitoredThe Company daily also to determinehas online the facilities Company’s with its actual depository cash balances banks wherein at any time. bank balances are monitored daily to determine the Company’s actual cash balances at any time. The Company’s liquidity and funding management process include the following: The Company’s liquidity and funding management process include the following: ƒ Managing the concentration and profile of debt maturities; ƒ MaintainingManaging the debt concentration financing plans; and profile and of debt maturities; ƒ MonitoringMaintaining liquidity debt financing ratios againstplans; andinternal and regulatory requirements. ƒ Monitoring liquidity ratios against internal and regulatory requirements. The table below summarises the maturity profile of the Company’s financial liabilities based on contractualThe table below undiscounted summarises payments, the maturity including profile future of the interest Company’s payments: financial liabilities based on contractual undiscounted payments, including future interest payments: More than More than More 1 thanyear More 2 years than Not but 1 yearnot but 2 years not exceedingNot exceedingbut not exceedingbut not More than exceeding1 year exceeding2 years exceeding5 year More5 Years than Total 1 year 2 years (In Millions)5 year 5 Years Total December 31, 2020 (In Millions) December Accounts 31, payable2020 and Accountsother current payable liabilities and (a) P=30,809 P= – P= – P= – P=30,809 Dueother to related current parties liabilities: (a) P=30,809 P= – P= – P= – P=30,809 DueDue to relatedto PCEV parties: 2,450 – – – 2,450 Due to PCEVrelated parties - others 2,45093 – – – 2,45093 Customers’Due to related guaranty parties deposits- others(b) 93– – – 1,232– 1,23293 Customers’Service concession guaranty fees deposits payable(b) 5,837– 4,925– 6,058– 11,2326,279 33,0991,232 Long-termService concession debts (Principal fees payable and 5,837 4,925 6,058 16,279 33,099 Long-terminterest) debts (Principal and 27,688 14,441 63,454 145,862 251,445 interest) P=66,87727,688 P=19,36614,441 P=69,51263,454 P=163,373145,862 P=319,128251,445 P=66,877 P=19,366 P=69,512 P=163,373 P=319,128

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More than More than More 1 thanyear More 2 years than Not but 1 yearnot but 2 years not exceedingNot exceedingbut not exceedingbut not More than exceeding1 year exceeding2 years exceeding5 year More5 Years than Total December 31, 2019 1 year 2 years 5 year 5 Years Total December Accounts 31, payable 2019 and other (a) Accountscurrent payableliabilities and other P=30,087 P=– P=– P=– P=30,087 Duecurrent to related liabilities parties(a): P=30,087 P=– P=– P=– P=30,087 DueDue to relatedto PCEV parties: 5,646 2,450 – – 8,096 Due to PCEVrelated parties - others 5,64687 2,450– – – 8,09687 (b) Customers’Due to related guaranty parties deposits- others 87– – – 1,191– 1,19187 Customers’Service concession guaranty fees deposits payable(b) 4,933– 4,586– 14,707– 19,9521,191 44,1781,191 Long-termService concession debts (Principal fees payable and 4,933 4,586 14,707 19,952 44,178 Long-terminterest) debts (Principal and 29,404 29,747 77,502 162,559 299,212 interest) P=29,40470,157 P=29,74736,783 P=77,50292,209 P=162,559183,702 P=299,212382,851 (a) Excludes statutory payable. P=70,157 P=36,783 P=92,209 P=183,702 P=382,851 (b)Included under “Other long-term liabilities”. (a)Excludes statutory payable. (b)Included under “Other long-term liabilities”. Interest Rate Risk Interest Raterate risk Risk is the risk that the fair value or future cash flows of a financial instrument will Interestfluctuate rate because risk is of the changes risk that in themarket fair valueinterest or rates. future The cash Company flows of ais financial subject to instrument fair value willand cash fluctuateflow interest because rate risks.of changes Fixed in rate market financial interest instruments rates. The measured Company at isfair subject value toare fair subject value to and fair cash flowvalue interest interest rate rate risks. risk while Fixed floating rate financial rate financial instruments instruments measured are atsubject fair value to cash are flowsubject interest to fair rate valuerisk. Atinterest December rate risk 31, while 2020 floatingand 2019, rate the financial Company’s instruments borrowings are subjectwere substantially to cash flow at interest fixed rates rate risk.(see Note At December 18). 31, 2020 and 2019, the Company’s borrowings were substantially at fixed rates (see Note 18). Certain of the Company’s loans that bear a fixed rate for the first five (5) years are subject to an Certaininterest ofrate the repricing Company’s after loans the fifth that year. bear aShould fixed ratethe interestfor the firstrate fiveon the (5) repricing years are date subject be to an interestsignificantly rate repricing higher than after the the current fifth year.fixed Shouldrate, the the Company interest hasrate anon optionthe repricing to prepay date or be refinance the significantlyloan. higher than the current fixed rate, the Company has an option to prepay or refinance the loan. The following table demonstrates the sensitivity of income before income tax arising from changes in Theinterest following cash flows table of demonstrates floating rate theloans sensitivity and fair ofvalues income of financial before income assets taxat FVPL, arising respectively, from changes due in interestto changes cash in flows interest of ratesfloating with rate all loans other andvariables fair values held constant.of financial The assets estimates at FVPL, in the respectively, movement dueof tointerest changes rates in wereinterest based rates on with the management’sall other variables annual held financial constant. forecast. The estimates There isin nothe other movement impact of on interestequity other rates than were those based already on the affectingmanagement’s the consolidated annual financial statements forecast. of comprehensive There is no other income. impact on equity other than those already affecting the consolidated statements of comprehensive income. Increase in Basis Points Decrease in Basis Points Increase in BasisEffect Points on Decrease in BasisEffect Points on EffectIncome on EffectIncome on Basis IncomeBefore Basis IncomeBefore PointsBasis IncomeBefore Tax PointsBasis IncomeBefore Tax Points Income(In Millions) Tax Points Income(In Millions) Tax December 31, 2020 (In Millions) (In Millions) DecemberPhilippine 31, Peso2020 +50 (P=56) –50 P= 5 6 PhilippineIndonesian Peso Rupiah +50 (P=56)(30) –50 P= 530 6 IndonesianUS Dollar Rupiah +50 (30)(30) –50–50 30 USThai Dollar Baht +50 (30–) ––5050 30– ThaiVietnamese Baht Dong +50 (4)– –50 –4 Vietnamese Dong +50 (4) –50 4

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Increase in Basis Points Decrease in Basis Points Increase in BasisEffect Points on Decrease in BasisEffect Points on EffectIncome on EffectIncome on Basis IncomeBefore Basis IncomeBefore PointsBasis IncomeBefore Tax PointsBasis IncomeBefore Tax Points Income(In Millions) Tax Points Income(In Millions) Tax December 31, 2019 (In Millions) (In Millions) DecemberPhilippine 31, 201Peso9 +50 (=P26) –50 P=26 PhilippineIndonesian Peso Rupiah +50 (=P(22)26) –50 P=2622 IndonesianUS Dollar Rupiah +50 (22)(34) –50 2234 USThai Dollar Baht +50 (34)(8) –50 348 ThaiVietnamese Baht Dong +50 (8)(4) –50 84 Vietnamese Dong +50 (4) –50 4 Foreign Currency Risk ForeignTo manage Currency the Company’s Risk foreign exchange risk arising from future commercial transactions, Torecognized manage assetsthe Company’s and liabilities, foreign and exchange to improve risk investment arising from and future cash commercialflow planning, transactions, in addition to recognizednatural hedges, assets the and Company liabilities, enters and into to improve and engages investment in foreign and exchangecash flow contractsplanning, for in additionthe purpose to of naturalmanaging hedges, its foreign the Company exchange enters rate exposures into and engages emanating in foreign from business, exchange transaction contracts forspecific, the purpose as well of managingas currency its translation foreign exchange risks and rate reducing exposures and/or emanating managing from the business,adverse impact transaction of changes specific, in foreignas well asexchange currency rates translation on the Company’s risks and reducing operating and/or results managing and cash the flows. adverse impact of changes in foreign exchange rates on the Company’s operating results and cash flows. Exposure to foreign currency risk primarily results from the following foreign currency transactions: Exposure to foreign currency risk primarily results from the following foreign currency transactions: ƒ Power. While an insignificant percentage of the GBPC’s assets and liabilities is denominated in ƒ Power.US Dollars,While a substantial an insignificant portion percentage of the capital of the expenditure GBPC’s assets and operating and liabilities expenses, is denominated mostly fuel in USand Dollars,coal purchases, a substantial is denominated portion of inthe foreign capital currencies, expenditure primarily and operating in US expenses,Dollars. GBPCmostly follows fuel anda policy coal topurchases, manage itsis denominatedcurrency risk inby foreign closely currencies, monitoring primarily its cash flow in US position Dollars. and GBPC by providing follows aforecast policy onto manageall other its exposures currency in risk non-Philippine by closely monitoring peso currencies. its cash Moreover,flow position the andmajority by providing of the forecastpower sales on all of otherthe GBPC’s exposures operating in non-Philippine subsidiaries peso are throughcurrencies. long-term Moreover, Electric the Powermajority Purchase of the powerAgreements sales ofwhich the GBPC’s have provisions operating for subsidiaries passing on arefuel through costs, including long-term foreign Electric exchange Power Purchase Agreementsfluctuations (seewhich Note have 33). provisions for passing on fuel costs, including foreign exchange fluctuations (see Note 33). ƒ Water. The servicing of foreign currency-denominated loans of MWSS is among the ƒ Water.requirements The servicing of Maynilad’s of foreign concession currency-denominated agreement. While loans majority of MWSS of the is revenuesamong the are generated requirementsin Philippine Peso,of Maynilad’s there is a concession mechanism agreement. in place as partWhile of majoritythe concession of the revenuesagreement are wherein generated inMaynilad Philippine (or Peso,the end there consumers) is a mechanism can recover in place foreign as part currency of the concessionfluctuations agreement through the wherein FCDA Mayniladthat is approved (or the by end the consumers) RO. can recover foreign currency fluctuations through the FCDA that is approved by the RO. ƒ Toll Operations. Payment for PT Nusantara’s loans which are denominated in Rupiah is to be ƒ Tollsourced Operations. from cash Payment generated for from PT Nusantara’soperations, alsoloans denominated which are denominated in Rupiah. Inin 2019,Rupiah MPTC is to be and sourcedAIFT has from foreign cash currency generated denominated from operations, loans alsoto be denominated paid in US$ inand Rupiah. THB, respectively. In 2019, MPTC In 2020,and AIFTthe company has foreign has settledcurrency its denominatedforeign currency loans denominated to be paid in financial US$ and instruments. THB, respectively. (see Notes In 102020, theand company18). has settled its foreign currency denominated financial instruments. (see Notes 10 and 18). ƒ Rail. LRMC’s exposure to foreign currency risk is minimal and only limited to transactional ƒ Rail.currency LRMC’s exposures exposure arising to fromforeign payments currency to risk suppliers is minimal and contractors. and only limited To reduce to transactional to foreign currency exposuresrisk exposure, arising LRMC from entered payments into to series suppliers of derivative and contractors. transactions, To reduce in particular, to foreign currencyforward contracts. risk exposure, These LRMC are accounted entered into for asseries derivatives of derivative not designated transactions, as accounting in particular, hedges forwardwith fair contracts. value of nil These and P=5.9are accounted million as for at Decemberas derivatives 31, 2020not designated and 2019. as accounting hedges with fair value of nil and P=5.9 million as at December 31, 2020 and 2019.

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The Company’s foreign currency-denominated financial assets and liabilities as at December 31:

The Company’s foreign currency-denominated financial assetsDecember and liabilities 31, 2020 as at December 31: Original Currency December 31, 2020 Total Peso US Dollar Original CurrencyJPY Euro Total EquivalentPeso (in Millions) US Dollar JPY Euro Equivalent Assets: (in Millions) Cash and cash equivalents $5 ¥– €– P=263 Assets: Restricted cash 1 – – 42 Cash and cash equivalents $5 ¥– €– P=263 Restricted cash 61 – – 30542 Liabilities: 6 – – 305 Accounts payable and Liabilities: other current liabilities – – – – Accounts payable and Service concession fees other current liabilities – – – – payable (67) – – (3,217) Service concession fees Long-term debts (126) (9,641) – (10,513) payable (67) – – (3,217) Long-term debts (193)(126) (9,641) – (13,730)(10,513) Net foreign currency - (193) (9,641) – (13,730) denominated liabilities ($187) (¥9,641) €– (P=13,426) Net foreign currency - denominated liabilities ($187) (¥9,641) €– (P=13,426) December 31, 2019 Original Currency December 31, 2019 Total Peso US Dollar Original CurrencyJPY Euro Total PesoEquivalent US Dollar (inJPY Millions) Euro Equivalent Assets: (in Millions) Cash and cash equivalents $4 ¥879 €1 P=655 Assets: Restricted cash 6 – – 302 Cash and cash equivalents $4 ¥879 €1 P=655 Restricted cash 106 879– 1– 957302 Liabilities: 10 879 1 957 Accounts payable and Liabilities: other current liabilities – – – – Accounts payable and Service concession fees other current liabilities – – – – payable (60) (62) – (3,067) Service concession fees Long-term debts (133) (10,664) – (11,671) payable (60) (62) – (3,067) Long-term debts (193)(133) (10,726)(10,664) – (14,738)(11,671) Net foreign currency - (193) (10,726) – (14,738) denominated liabilities ($183) (¥9,847) €1 (P=13,781) Net foreign currency - denominated liabilities ($183) (¥9,847) €1 (P=13,781) The exchange rates used to determine the peso value are as follows: The exchange rates used to determine the peso value are as follows: US Dollar JPY Euro December 31, 2020 USP=48.02 Dollar P=0.46JPY P=58.65Euro December 31,31, 20192020 P=48.02P=50.64 P=0.46P=0.46 P=58.65P=56.41 December 31, 2019 P=50.64 P=0.46 P=56.41 The following table demonstrates sensitivity of cash flows due to changes in foreign exchange rates Thewith followingall variables table held demonstrates constant. The sensitivity estimates of incash the flows movement due to of changes the foreign in foreign exchange exchange rates wererates withbased all on variables the management’s held constant. annual The financial estimates forecast. in the movement of the foreign exchange rates were based on the management’s annual financial forecast. December 31, 2020 December 31, 2019 Increase/December 31, 2020 Increase/December 31, 2019 DecreaseIncrease/ in Effect on DecreaseIncrease/ in Effect on DecreaseForeign in EffectIncome on DecreaseForeign in EffectIncome on ExchangeForeign IncomeBefore ExchangeForeign IncomeBefore ExchangeRates IncomeBefore Tax ExchangeRates IncomeBefore Tax Rates (InIncome Millions) Tax Rates (InIncome Millions) Tax US Dollar +5% (In Millions)(P=448) +5% (In Millions)(P=464) USJapanese Dollar Yen +5% (P=448)(223) +5% (P=(228)464) JapaneseEuro Yen +5% (223)– +5% (228)3 EuroUS Dollar +5%–5% 448– +5%–5% 4643 USJapanese Dollar Yen –5% 448223 –5% 464228 JapaneseEuro Yen –5% 223– –5% 228(3) Euro –5% – –5% (3) *SGVFSM006036* *SGVFSM006036*

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Capital Management Capital Managementincludes preferred shares and equity attributable to the equity holders of the Parent Company. CapitalThe primary includes objective preferred of the shares Company’s and equity capital attributable management to the policies equity holders is to ensure of the that Parent the CompanyCompany. Themaintains primary a strong objective statement of the ofCompany’s financial positioncapital management and healthy policiescapital ratios is to ensurein order that to supportthe Company its maintainsbusiness and a strong maximize statement shareholder of financial value. position The Company and healthy ensures capital that ratios it is compliant in order to with support all debt its businesscovenants and not maximize only at the shareholder consolidated value. level The but Company also at the ensures level of that Parent it is Companycompliant andwith each all debt of its covenantssubsidiaries. 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 Inprogram general, and the dividend Company declaration closely monitors policy that its debtkeeps covenants the compliance and maintains of these a covenants capital expenditure into programconsideration and dividend (see Note declaration 18). policy that keeps the compliance of these covenants into consideration (see Note 18). The following debt covenants are being complied with by the Company as part of maintaining a Thestrong following credit rating debt withcovenants its creditors: are being complied with by the Company as part of maintaining a strong credit rating with its creditors: ƒ MPIC. MPIC’s loan agreements require achievement of certain financial ratios. Moreover, under ƒ MPIC.the loan MPIC’sagreements, loan MPICagreements needs require to achieve achievement a required of DSCR certain per financial loan agreements ratios. Moreover, to be able under to thedeclare loan dividends. agreements, MPIC needs to achieve a required DSCR per loan agreements to be able to declare dividends. ƒ Power. GBPC aims to have a debt-to-equity ratio of no more than 75:25 at all times. At the ƒ Power.subsidiary GBPC level, aims GBPC’s to have subsidiaries a debt-to-equity (CEDC, ratio PEDC of no and more TPC) than aim 75:25 to maintain at all times. debt-to-equity At the subsidiaryratio not exceeding level, GBPC’s 70:30 subsidiariesat all times until (CEDC, full paymentPEDC and of TPC)its loans. aim to Certain maintain subsidiaries debt-to-equity shall ratiolikewise not ensureexceeding that 70:30 core capital at all times must untilat least full be payment 30% of ofthe its total loans. project Certain cost atsubsidiaries project shall likewisecompletion ensure date thatand coreshall capital at all times must beat leastequivalent be 30% to ofat theleast total 30% project of the costsum at of project the aggregate completionindebtedness date for andborrowed shall at money all times and be the equivalent sum of its to equity at least as 30%of any of datethe sum of determination of the aggregate (see indebtednessNote 33). for borrowed money and the sum of its equity as of any date of determination (see Note 33). ƒ Toll Operations. The loan agreements require maintenance of debt-to-equity ratio and DSCR as ƒ Tollindicated Operations. in the agreements The loan agreements to be able to require incur newmaintenance loans or ofdeclare debt-to-equity dividends. ratio and DSCR as indicated in the agreements to be able to incur new loans or declare dividends. ƒ Water. Maynilad closely manages its capital structure vis–a–vis a certain target gearing ratio, ƒ Water.which is Maynilad net debt dividedclosely bymanages total capital its capital plus structurenet debt. vis–a–vis Maynilad’s a certain target targetgearing gearing ratio is ratio, 75%. whichThis target is net is debt to be divided maintained by total over capital the next plus five net (5)debt. years Maynilad’s by managing target the gearing level of ratio borrowings is 75%. Thisand dividend target is paymentsto be maintained to shareholders. over the next five (5) years by managing the level of borrowings and dividend payments to shareholders. The Company manages its capital structure and adjust it in light of changes in economic conditions. TheTo maintain Company or manages adjust the its capital capital structure, structure the and Company adjust it inmay light obtain of changes additional in economic advances conditions.from Toshareholders, maintain or return adjust capital the capital to shareholders, structure, the issue Company new shares may orobtain issue additional new debt advancesor redemption from of shareholders,existing debt. return No changes capital were to shareholders, made in the issueobjectives, new shares policies or issueor processes new debt during or redemption the years endedof existingDecember debt. 31, 2020No changes and 2019. were The made Company in the objectives, monitors capitalpolicies on or the processes basis of during debt-to-equity the years ratio. ended December 31, 2020 and 2019. The Company monitors capital on the basis of debt-to-equity ratio. Debt-to-equity ratio is calculated as short-term and long-term debt over equity. The Company’s goal Debt-to-equityis to maintain a ratio sustainable is calculated debt-to-equity as short-term ratio. and The long-term debt-to-equity debt over ratios equity. as at DecemberThe Company’s 31, 2020 goal isand to 2019 maintain are: a sustainable debt-to-equity ratio. The debt-to-equity ratios as at December 31, 2020 and 2019 are: 2020 2019 2020 (In Millions) 2019 Short-term and long-term debt (a) P=231,366 (In Millions)P=249,909 ShortEquity-term (b) and long-term debt (a) P=231,366244,347 P=249,909246,045 EquityDebt-to (b)-equity ratio (a/b) 244,95%347 246,045102% Debt-to-equity ratio (a/b) 95% 102%

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35. Financial Instruments – Categories and Derivatives 35. Financial Instruments – Categories and Derivatives Categories of Financial Instruments TheCategories categories of Financial of the Company’s Instruments financial assets and financial liabilities, other than cash and cash equivalents,The categories short-term of the Company’s deposits and financial restricted assets cash and are: financial liabilities, other than cash and cash equivalents, short-term deposits and restricted cash are:

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December 31, 2020 Financial Assets Financial Liabilities Equity Debt instruments Instruments Amortized Cost FVPL at FVOCI at FVOCI Amortized Cost FVPL Total (In Millions) ASSETS (a) Investment in UITF (b) P= – P=7,284 P= – P= – P= – P= – P=7,284 Receivables - net 10,598 – – – – – 10,598 Other current assets: Due from related parties 279 – – – – – 279 Miscellaneous deposits and others 657 – – – – – 657 Other noncurrent assets: LTNCD – – 46 – – – 46 Quoted equity shares – – – 150 – – 150 Unquoted equity shares – – – 1,047 – – 1,047 Quoted club shares – – – 27 – – 27 Long term cash and miscellaneous deposits 558 – – – – – 558 P=12,092 P=7,284 P=46 P=1,224 P= – P= – P=20,646

LIABILITIES (a) Accounts payable and other current liabilities (c) P= – P= – P= – P= – P=33,381 P= 6 P=33,387 Provisions – – – – – 2,662 2,662 Due to related parties – – – – 2,481 – 2,481 Service concession fees payable – – – – 29,434 – 29,434 Short-term and long-term debt – – – – 231,366 – 231,366 Other long-term liabilities – – – – 1,231 – 1,231 P= – P= – P= – P= – P=297,893 P=2,668 P=300,561 (a)Excluded Assets and Liabilities under PFRS 5 (see Note 33) (b) Included under ‘Cash and cash equivalents and short-term deposits’. (c)Excludes statutory payables

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December 31, 2019 Financial Assets Financial Liabilities Equity Debt instruments Instruments Amortized Cost FVPL at FVOCI at FVOCI Amortized Cost FVPL Total (In Millions) ASSETS Investment in UITF (a) P=– P=812 P=– P=– P=– P=– P=812 Receivables - net 15,898 – – – – – 15,898 Other current assets: Due from related parties 273 – – – – – 273 Miscellaneous deposits and others 424 – – – – – 424 Other noncurrent assets: Treasury bonds and notes – – 69 – – – 69 LTNCD – – 94 – – – 94 Quoted equity shares – – – 219 – – 219 Unquoted equity shares – – – 924 – – 924 Quoted club shares – – – 31 – – 31 Other receivables 360 – – – – – 360 Long term cash and miscellaneous deposits 581 – – – – – 581 P=17,536 P=812 P=163 P=1,174 P=– P=– P=19,685

LIABILITIES Accounts payable and other current liabilities (b) P=– P=– P=– P=– P=32,484 P=46 P=32,530 Provisions – – – – – 2,568 2,568 Due to related parties – – – – 7,878 – 7,878 Service concession fees payable – – – – 32,898 – 32,898 Short-term and long-term debt – – – – 249,909 – 249,909 Other long-term liabilities – – – – 1,191 – 1,191 P=– P=– P=– P=– P=324,360 P=2,614 P=326,974 (a)Included under ‘Cash and cash equivalents and short-term deposits’. (b)Excludes statutory payables

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Derivative Financial Instruments ExceptDerivative for “OptionFinancial liabilities” Instruments included under “Accounts payable and other current liabilities” accountExcept for in the“Option consolidated liabilities” statements included of under financial “Accounts position, payable the Company and other has current no freestanding liabilities” derivativesaccount in theand consolidated no derivatives statements accounted of forfinancial as cash position, flow hedges the Company as at December has no 31,freestanding 2020 and 2019. derivatives and no derivatives accounted for as cash flow hedges as at December 31, 2020 and 2019.

36. Fair Value Measurement 36. Fair Value Measurement The fair value of the assets and liabilities is determined as the price that would be received to sell an assetThe fair or paidvalue to of transfer the assets a liability and liabilities in an orderly is determined transaction as thebetween price thatparticipants would be at received the measurement to sell an date.asset orThe paid following to transfer tables a liability summarize in an the orderly carrying transaction amounts between and fair participants values of the at assetsthe measurement and liabilities,date. The analyzedfollowing among tables summarizethose whose the fair carrying value is amounts based on: and fair values of the assets and liabilities, analyzed among those whose fair value is based on: x Level 1 – Quoted market prices in active markets for identical assets or liabilities x Level 12 – QuotedThose involving market prices inputs in other active than markets quoted for prices identical included assets in or Level liabilities 1 that are observable x forLevel the 2 asset – Those or liability, involving either inputs directly other (asthan prices) quoted or prices indirectly included (derived in Level from 1prices); that are and observable x Levelfor the 3 asset – Those or liability, with inputs either for directly the asset (as or prices) liability or thatindirectly are not (derived based on from observable prices); marketand data x (unobservableLevel 3 – Those input). with inputs for the asset or liability that are not based on observable market data (unobservable input). December 31, 2020 Carrying December 31, 2020 Total Fair CarryingValue Level 1 Level 2 Level 3 TotalValue Fair Value Level 1 (In LevelMillions) 2 Level 3 Value Assets measured at fair value (In Millions) AssetsFinancial measured assets through at fair profit value or loss FinancialUITF assets through profit or loss P=7,284 P= – P=7,284 P= – P=7,284 FinancialUITFassets through OCI P=7,284 P= – P=7,284 P= – P=7,284 FinancialLTNCDassets through OCI 46 46 – – 46 QuotedLTNCD equity shares 15046 15046 – – 15046 UnquotedQuoted equity equity shares shares 1,047150 150– – 1,047– 1,047150 UnquotedQuoted club equity shares shares 1,04727 – 27– 1,047– 1,04727 Quoted club shares P=8,55427 P=196– P=7,31127 P=1,047– P=8,55427 P=8,554 P=196 P=7,311 P=1,047 P=8,554 Liabilities measured at fair value FinancialLiabilities Liabilities measured at at FVPL fair value FinancialOption Liabilities liability at FVPL P= 6 P= – P= – P= 6 P= 6 ProvisionsOption liability 2,662P= 6 P= – P= – 2,662P= 6 2,662P= 6 Provisions P=2,6682,662 P= – P= – P=2,6682,662 P=2,6682,662 P=2,668 P= – P= – P=2,668 P=2,668 Assets for which fair values are disclosed AssetsAmortized for whichcost fair values are disclosed AmortizedMiscellaneous cost deposits P=1,215 P= – P= – P=1,181 P=1,181 Miscellaneous deposits P=1,215 P= – P= – P=1,181 P=1,181 P=1,215 P= – P= – P=1,181 P=1,181 Liabilities for which fair values are disclosed LiabilitiesOther financial for whichliabilities fair values are disclosed OtherService financial concession liabilities fees payable P=29,434 P= – P= – P=31,965 P=31,965 Service(current concession and noncurrent) fees payable P=29,434 P= – P= – P=31,965 P=31,965 Short-term(current and and long-term noncurrent) debt (current Short-termand noncurrent) and long-term debt (current 231,366 12,458 – 250,010 262,468 Customerand noncurrent) guaranty deposit 231,3661,231 12,458– – 250,0101,477 262,4681,477 CustomerDue to related guaranty parties deposit 1,2312,481 – – 1,4772,508 1,4772,508 Due to related parties P=264,5122,481 P=12,458– P=– P=285,9602,508 P=298,4182,508 P=264,512 P=12,458 P= – P=285,960 P=298,418

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December 31, 2019 Carrying December 31, 2019 Total Fair Value Level 1 Level 2 Level 3 Value Carrying Total Fair Value Level 1 (In LevelMillions) 2 Level 3 Value Assets measured at fair value (In Millions) Financial assets through profit or loss Assets measured at fair value UITF P=812 P= – P=812 P= – P=812 Financial assets through profit or loss Financial assets through OCI UITF P=812 P= – P=812 P= – P=812 Treasury bonds and notes 69 20 49 – 69 Financial assets through OCI Corporate bonds – – – – – Treasury bonds and notes 69 20 49 – 69 LTNCD 94 94 – – 94 Corporate bonds – – – – – Quoted equity shares 219 219 – – 219 LTNCD 94 94 – – 94 Unquoted equity shares 924 – – 924 924 Quoted equity shares 219 219 – – 219 Quoted club shares 31 – 31 – 31 Unquoted equity shares 924 – – 924 924 P=2,149 P=333 P=892 P=924 P=2,149 Quoted club shares 31 – 31 – 31 P=2,149 P=333 P=892 P=924 P=2,149 Liabilities measured at fair value Financial Liabilities at FVPL Liabilities measured at fair value Option liability P=46 P= – P= – P=46 P=46 Financial Liabilities at FVPL Provisions 2,568 – P= – 2,568 2,568 Option liability P=46 P= – P= – P=46 P=46 Provisions P=2,6142,568 P= – P= – P=2,6142,568 P=2,6142,568 P=2,614 P= – P= – P=2,614 P=2,614 Assets for which fair values are disclosed Amortized cost Assets for which fair values are disclosed Miscellaneous deposits P=1,005 P= – P= – P=953 P=953 Amortized cost P=1,005 P= – P= – P=953 P=953 Miscellaneous deposits P=1,005 P= – P= – P=953 P=953 P=1,005 P= – P= – P=953 P=953 Liabilities for which fair values are disclosed Other financial liabilities Liabilities for which fair values are disclosed Service concession fees payable P=32,898 P= – P= – P=37,691 P=37,691 Other financial liabilities (current and noncurrent) Service concession fees payable P=32,898 P= – P= – P=37,691 P=37,691 Short-term and long-term debt (current (current and noncurrent) and noncurrent) 249,909 12,458 – 247,983 260,441 Short-term and long-term debt (current Customer guaranty deposit 1,191 – – 1,297 1,297 and noncurrent) 249,909 12,458 – 247,983 260,441 Due to related parties 7,878 – – 7,884 7,884 Customer guaranty deposit 1,191 – – 1,297 1,297 Due to related parties P=291,8767,878 P=12,458– P= – P=294,8557,884 P=307,3137,884 P=291,876 P=12,458 P= – P=294,855 P=307,313 The following methods and assumptions were used to measure the fair value of each class of assets Theand liabilitiesfollowing for methods which andit is assumptionspracticable to were estimate used suchto measure value: the fair value of each class of assets and liabilities for which it is practicable to estimate such value: Cash and Cash Equivalents. Due to the short-term nature of transactions, the fair value of cash and Cashcash equivalents and Cash Equivalents. approximate Due the carryingto the short-term amounts natureat the endof transactions, of the reporting the fairperiod. 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 Restrictedvalues approximate Cash, Cash the Deposits, fair values and at Accountsthe reporting Payable date dueand toOther the short-term Current Liabilities. nature of theCarrying valuestransactions. approximate the fair values at the reporting date due to the short-term nature of the transactions. Investments in UITF. UITFs are ready-made investments that allow the pooling of funds from Investmentsdifferent investors in UITF. withUITFs similar are investment ready-made objectives. investments These that UITFs allow theare poolingmanaged of by funds professional from differentfund managers investors and with may similarbe invested investment in various objectives. financial These instruments UITFs suchare managed as money by market professional securities, fundbonds managers and equities, and maywhich be are invested normally in various available financial to large instruments investors only. such Aas UITFmoney uses market the securities, bondsmark-to-market and equities, method which in arevaluing normally the fund’s available securities. to large Ainvestors UITF uses only. the A mark-to-market UITF uses the method in mark-to-marketvaluing the fund’s method securities. in valuing It is athe valuation fund’s securities.method which A UITF calculates uses the the mark-to-market Net Asset Value method (NAV) in valuingbased on the the fund’s estimated securities. fair market It is avalue valuation of the method assets ofwhich the fund calculates based theon pricesNet Asset supplied Value by (NAV) basedindependent on the sources.estimated fair market value of the assets of the fund based on prices supplied by independent sources. Due from Related Parties. In 2020 and 2019, fair value of due from related parties approximates Duetheir fromcarrying Related amounts Parties. as these In 2020 are expectedand 2019, to fair be valuesettled of within due from a year related from partiesthe reporting approximates date. their carrying amounts as these are expected to be settled within a year from the reporting date. *SGVFSM006036* *SGVFSM006036*

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Miscellaneous Deposits. The fair value of the refundable occupancy deposits is determined by Miscellaneousdiscounting the Deposits deposit .using The thefair prevailing value of the market refundable rate of occupancy interest. deposits is determined by discounting the deposit using the prevailing market rate of interest. Due to Related Parties, Service Concession Fees Payable and Customers’ Guaranty Deposits. DueEstimated to Related fair value Parties, is based Service on Concessionthe discounted Fees value Payable of future and Customers’cash flows using Guaranty the applicable Deposits. rates Estimatedfor similar fairtypes value of financial is based instruments.on the discounted value of future cash flows using the applicable rates for similar types of financial instruments. Notes Receivable and Miscellaneous Deposits. Estimated fair value is based on the present value of Notesfuture Receivablecash flows discountedand Miscellaneous using the Deposits. prevailingEstimated rates that fair are valuespecific is basedto the ontenor the ofpresent the value of futureinstruments’ cash flows cash discountedflows at the using end of the each prevailing reporting rates period that withare specific credit spread to the tenoradjustment. of the instruments’ cash flows at the end of each reporting period with credit spread adjustment. Option Liabilities. The fair value of the call options was estimated using a binomial pricing model Option(see Note Liabilities 32). . The fair value of the call options was estimated using a binomial pricing model (see Note 32). Short-term Debt. Carrying amount of short-term debts are considered to be the same as their fair Shortvalues-term due toDebt. theirCarrying short-term amount nature. of short-term debts are considered to be the same as their fair values due to their short-term nature. Long-term Debt. For both fixed rate and floating rate (repriceable every six months) Long-termUS dollar-denominated Debt. For both debts fixed and rate Philippine and floating Peso-denominated rate (repriceable fixed every rate six corporate months) notes, estimated USfair dollar-denominatedvalue is based on the debts discounted and Philippine value of Peso-denominated future cash flows usingfixed therate prevailing corporate creditnotes, adjustedestimated fairUS risk-freevalue is basedrates andon thePhilippine discounted risk value free rates of future that arecash adjusted flows using for credit the prevailing spread ranging credit fromadjusted 1.1% USto 7.5% risk-free and 3.1%rates andto 8.6% Philippine in 2020 risk and free 2019, rates respectively. that are adjusted for credit spread ranging from 1.1% to 7.5% and 3.1% to 8.6% in 2020 and 2019, respectively. Provisions. Estimated fair value is based on the discounted value of future cash flows using the Provisions.applicable rates Estimated for similar fair valuetypes ofis basedfinancial on theinstruments. discounted value of future cash flows using the applicable rates for similar types of financial instruments.

37. Supplemental Cash Flow Information 37. Supplemental Cash Flow Information Non-cash investing activities TheNon-cash following investing table activitiesshows the Company’s significant non-cash investing activities and corresponding transactionThe following amounts: table shows the Company’s significant non-cash investing activities and corresponding transaction amounts: 2020 2019 2018 2020 (In2019 Millions) 2018 Additions to service concession assets pertaining to (In Millions) Additionsadditions to to service capitalized concession interest assets accretion pertaining from to additionsservice concession to capitalized fees, interest MWSS accretion loan drawdown from and othersservice (see concession Notes 12 fees, and MWSS 17) loan drawdown and P=2,078 P=3,544 P=2,178 Changesothers (seeto decommissioning Notes 12 and 17) decommissioning P=2,078 P=3,544 P=2,178 Changes liability to as decommissioning adjustments to property, decommissioning plant, and liabilityequipment as adjustments(see Note 33) to property, plant, and − 144 39 equipment (see Note 33) − 144 39 Adoption of PFRS 16 also resulted to recognition of ROU asset as at January 1, 2019 amounting to AdoptionP=1,518 million. of PFRS 16 also resulted to recognition of ROU asset as at January 1, 2019 amounting to P=1,518 million.

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Changes in liabilities arising from financing activities: The following table shows significant changes in liabilities arising from financing activities, including changes arising from cash flows and non-cash changes:

Service concession Short-term and Due to related Interest and other fee payable long-term debt parties Lease liability ividends payable financing charges (see Note 17) (see Note 18) (see Note 19) (see Note 39) (see Note 15) (see Note 15) (In Millions) Balance as at January 1, 2019 P=30,639 P=215,093 P=11,854 P=− P=2,513 P=2,278 Cash flow (see statements of cash flows) Proceeds − 58,633 − − − − Payments (1,673) (22,307) (4,451) (597) (9,140) (9,502) Transaction cost − (592) − − − − (1,673) 35,734 (4,451) (597) (9,140) (9,502) Non-cash: Adoption of PFRS 16 – – − 1,499 – – Leases entered during the period – – – 314 − – Dividends declared – – – – 9,527 – Interest expense – – – – – 11,800 Acquisition of subsidiary – 826 – – – Additions 2,132 − – – – Interest accretion 2,003 (361) 475 104 – – Foreign exchange movements (136) (294) – (3) – – Balancing payment mechanism (67) – – – – Derecognized unamortized debt issue cost – 20 – – – Deconsolidation of a subsidiary – (1,277) – (317) – – Amortization of debt issue costs – 168 – – – Others – − – – – (2,133) 3,932 (918) 475 1,597 9,527 9,667 Balance as at December 31, 2019 32,898 249,909 7,878 1,000 2,900 2,443 Cash flow (see statements of cash flows) Proceeds − 50,535 − − − − Payments (5,801) (39,725) (5,646) (496) (6,662) (8,745) Transaction cost − (392) − − − − (5,801) 10,418 (5,646) (496) (6,662) (8,745)

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Service concession Short-term and Due to related Interest and other fee payable long-term debt parties Lease liability ividends payable financing charges (see Note 17) (see Note 18) (see Note 19) (see Note 39) (see Note 15) (see Note 15) (In Millions) Non-cash: Leases entered during the period P= – P= – P= – P=984 P= − P= – Dividends declared – – – – 6,186 – Interest expense – – – – – 10,010 Additions 730 − 6 – – – Interest accretion 1,976 (317) 243 85 – – Foreign exchange movements (105) (364) – 5 – – Balancing payment mechanism (264) (57) – – – Derecognized unamortized debt issue cost – – – – – Liabilities under PFRS 5 (see Note 33) – (28,517) – (1,915) (316) Amortization of debt issue costs – 294 – – – Others – − – (80) – (814) 2,337 (28,961) 249 994 4,271 8,880 Balance as at December 31, 2020 P=29,434 P=231,366 P=2,481 P=1,498 P=509 P=2,578

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38. Events after the Reporting Period 38. Events after the Reporting Period Aside from those disclosed in Note 30 (status of certain contingencies), Note 29 (status of certain significantAside from contracts, those disclosed agreements in Note and 30 commitments), (status of certain Note contingencies), 20 (MPIC’s dividendNote 29 (statusdeclaration of certain on March 3,significant 2021) and contracts, Note 10 agreements(disposal of and AIFT) commitments), , events occurring Note 20 after (MPIC’s the reporting dividend period declaration include: on March 3, 2021) and Note 10 (disposal of AIFT) , events occurring after the reporting period include: Acquisition of Philippine Coastal Storage and Pipeline Corporation. On December 9, 2020, MPIC andAcquisition Keppel ofInfrastructure Philippine Coastal Fund Management Storage and Pte. Pipeline Ltd. (in Corporation its capacity. Onas trustee-manager December 9, 2020, of Keppel MPIC Infrastructureand Keppel Infrastructure Trust) (“KIT”) Fund entered Management into a sale Pte. and Ltd. purchase (in its capacity agreement as trustee-managerwith Macquarie of Keppel Infrastructure HoldingsTrust) (“KIT”) (Philippines) entered intoPte. Limited,a sale and Government purchase agreement Service Insurance with Macquarie System and LangoerInfrastructure Investments Holdings Holding (Philippines) B.V. for Pte. the Limited, acquisition Government of 100% ofService the total Insurance issued capitalSystem stock and of PhilippineLangoer Investments Tank Storage Holding International B.V. for Holdings, the acquisition Inc. (“PTSI”). of 100% of the total issued capital stock of Philippine Tank Storage International Holdings, Inc. (“PTSI”). On January 29, 2021, MPIC and Keppel Infrastructure Fund Management Pte. Ltd. (in its capacity as trustee-managerOn January 29, 2021, of KIT) MPIC completed and Keppel the acquisition Infrastructure of 100% Fund ofManagement the total issued Pte. capitalLtd. (in stock its capacity of PTSI as (thetrustee-manager “Transaction of Completion”). KIT) completed The the shares acquisition of PTSI of were100% indirectly of the total acquired issued bycapital MPIC stock and ofKIT PTSI through(the “Transaction a Philippine Completion”). holding company, The shares KM Infrastructure of PTSI were Holdings,indirectly Inc.acquired (“KM by Infrastructure”), MPIC and KIT which,through at a thePhilippine time of holdingthe Transaction company, Completion, KM Infrastructure was 80% Holdings, owned by Inc. Bay (“KM Philippines Infrastructure”), Holdings Corporationwhich, at the (“Bay time of PH”) the Transaction(a 100% indirect Completion, subsidiary was of 80% KIT) owned and 20% by Bayowned Philippines by MPIC. Holdings Corporation (“Bay PH”) (a 100% indirect subsidiary of KIT) and 20% owned by MPIC. On the same day after the Transaction Completion, Bay PH and MPIC entered into a Deed of Sale wherebyOn the same KIT day agreed after to the sell Transaction to MPIC approximately Completion, Bay 30% PH of andthe outstandingMPIC entered shares into ofa DeedKM of Sale Infrastructurewhereby KIT agreed(“KM Saleto sell Transaction”). to MPIC approximately As a result of30% the of KM the Sale outstanding Transaction, shares MPIC’s of KM total shareholdingInfrastructure in(“KM KM SaleInfrastructure Transaction”). increased As a to result approximately of the KM 50%Sale ofTransaction, its total outstanding MPIC’s total capital stock.shareholding in KM Infrastructure increased to approximately 50% of its total outstanding capital stock. In addition to the payment of the purchase price for the additional 30% stake, MPIC also agreed to reimburseIn addition KIT to the for payment transaction of the costs purchase and expenses price for relating the additional to the 30% 30% interest stake, thatMPIC it agreedalso agreed to sell to to MPIC.reimburse KIT for transaction costs and expenses relating to the 30% interest that it agreed to sell to MPIC. MPIC and KIT also entered into a shareholders’ agreement to govern their relationship in managing KMMPIC Infrastructure and KIT also and entered its subsidiaries, into a shareholders’ containing, agreement among others, to govern customary their relationship governance in provisions, managing transferKM Infrastructure provisions andand itsdeadlock subsidiaries, resolution containing, mechanisms. among The others, Company customary shall governance account for provisions, its investmenttransfer provisions in PTSI andunder deadlock the equity resolution method mechanisms. of accounting The as Companya jointly-controlled shall account entity. for Totalits acquisitioninvestment incost PTSI for theunder 50% the effective equity method ownership of accounting in PTSI amounted as a jointly-controlled to P=7.1 billion entity. (including Total transactionacquisition costs).cost for the 50% effective ownership in PTSI amounted to P=7.1 billion (including transaction costs). PTSI wholly owns Philippine Coastal Storage & Pipeline Corporation (“PCSPC”). Strategically locatedPTSI wholly in the owns Subic Philippine Bay Freeport Coastal Zone, Storage PCSPC & isPipeline the largest Corporation petroleum (“PCSPC”). product import Strategically terminal in thelocated Philippines in the Subic with Baya storage Freeport capacity Zone, of PCSPC approximately is the largest 6.0 million petroleum barrels. product The import150-hectare terminal facility in comprisesthe Philippines of 86 with storage a storage tanks, capacity two piers of and approximately a pipeline infrastructure 6.0 million barrels. connecting The 150-hectarethe entire facility. facility Duecomprises to its location,of 86 storage PCSPC tanks, provides two piers clients and with a pipeline a well-connected infrastructure distribution connecting hub the to entire the largest facility. economicDue to its catchmentlocation, PCSPC area – providesMetro Manila clients and with North a well-connected Luzon. distribution hub to the largest economic catchment area – Metro Manila and North Luzon. As at December 31, 2020, prior to the Transaction Completion, KM Infrastructure, Razor Crest StorageAs at December Infrastructure 31, 2020, Holdings prior toCorporation the Transaction (Razor), Completion, and Hyperion KM StorageInfrastructure, Holdings Razor Corporation Crest (Hyperion)Storage Infrastructure were all directly Holdings wholly Corporation owned entities (Razor), by andMPIC Hyperion (see Note Storage 6). These Holdings entities Corporation were all incorporated(Hyperion) were for theall directlypurpose whollyof investing owned into entities PTSI byand MPIC PCSPC. (see AfterNote 6).the restructuringThese entities and were the all by dateincorporated of KM Sale for theTransaction, purpose of MPIC’s investing stake into in PTSI KM Infrastructureand PCSPC. Afteris at 50%. the restructuring KM Infrastructure and the ownsby 100%date of of KM Razor, Sale while Transaction, Razor owns MPIC’s 100% stake of Hyperion.in KM Infrastructure Hyperion inis turnat 50%. owns KM 100% Infrastructure of PTSI. owns 100% of Razor, while Razor owns 100% of Hyperion. Hyperion in turn owns 100% of PTSI.

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Loan drawdowns and New Facilities. Loanƒ MPIC. drawdowns In January and New 2021, Facilities. MPIC entered into an agreement to secure a loan facility amounting to ƒ US$130MPIC. In million, January proceeds 2021, MPIC of which entered were into used an byagreement MPIC to to finance secure its a loaninvestment facility inamounting various to projectsUS$130 andmillion, other proceeds general corporateof which werepurposes. used byThe MPIC facility to financehas been its fully investment drawn. in various ƒ Rail.projects On and January other 12general and February corporate 10, purposes. 2021, the The Company facility madehas been drawdowns fully drawn. against its OLSA ƒ amountingRail. On January to P= 211.0 12 andmillion February and P= 978.710, 2021, million, the Company respectively, made to drawdownsfinance the rehabilitationagainst its OLSA of amountingexisting system to P= 211.0 and construction million and ofP= 978.7 Cavite million, Extension. respectively, to finance the rehabilitation of existing system and construction of Cavite Extension.

39. Significant Accounting Policies 39. Significant Accounting Policies This note provides a list of the significant accounting policies adopted in the preparation of these consolidatedThis note provides financial a list statements of the significant to the extent accounting they have policies not already adopted been in the disclosed preparation in the of other these notes above.consolidated These financial policies statementshave been consistentlyto the extent applied they have to allnot the already years beenpresented, disclosed unless in theotherwise other notes stated.above. These policies have been consistently applied to all the years presented, unless otherwise stated. a. Changes in Accounting Policies and Disclosures a. Changes in Accounting Policies and Disclosures The Company applied the following new PFRSs and amendments to existing standards effective JanuaryThe Company 1, 2020. applied Adoption the following of the following new PFRSs standards and amendments did not have to any existing material standards impact effectiveon the Company’sJanuary 1, 2020. consolidated Adoption financial of the followingstatements: standards did not have any material impact on the Company’s consolidated financial statements: ƒ Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies, ƒ AmendmentsChanges in Accounting to PAS 1, EstimatesPresentation and of Errors, Financial Definition Statements of Material, and PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, Definition of Material The amendments provide a new definition of material that states “information is material if omitting,The amendments misstating provide or obscuring a new definition it could reasonably of material be that expected states “information to influence decisionsis material that if the primaryomitting, users misstating of general or obscuring purpose financialit could reasonably statements bemake expected on the to basis influence of those decisions financial that the statements,primary users which of general provide purpose financial financial information statements about make a specific on the reporting basis of entity.”those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, eitherThe amendments individually clarify or in combination that materiality with will other depend information, on the nature in the or context magnitude of the of financial information, statements.either individually A misstatement or in combination of information with other is material information, if it could in the reasonably context ofbe the expected financial to influencestatements. decisions A misstatement made by of the information primary users. is material These amendmentsif it could reasonably had no impact be expected on the to consolidatedinfluence decisions financial made statements by the primary of, nor isusers. there These expected amendments to be any had future no impact onto thethe Company.consolidated financial statements of, nor is there expected to be any future impact to the Company. ƒ Amendments to PFRS 3, Business Combinations, Definition of a Business ƒ Amendments to PFRS 3, Business Combinations, Definition of a Business The amendment clarifies that to be considered a business, an integrated set of activities and assets mustThe amendment include, at aclarifies minimum, that anto inputbe considered and a substantive a business, process an integrated that together set of significantly activities and assets contributemust include, to the at aability minimum, to create an input output. and Furthermore, a substantive it process clarified that that together a business significantly can exist without includingcontribute all to ofthe the ability inputs to andcreate processes output. neededFurthermore, to create it clarified outputs. that These a business amendments can exist had withoutno impactincluding on allthe of accounting the inputs forand business processes combinations needed to create in 2020. outputs. These amendments had no impact on the accounting for business combinations in 2020. ƒ Amendments to PFRS 7, Financial Instruments: Disclosures, and PFRS 9, Financial Instruments, ƒ InterestAmendments Rate Benchmarkto PFRS 7, ReformFinancial Instruments: Disclosures, and PFRS 9, Financial Instruments, Interest Rate Benchmark Reform The amendments to PFRS 9 provide a number of reliefs, which apply to all hedging relationships thatThe areamendments directly affected to PFRS by 9 interestprovide rate a number benchmark of reliefs, reform. which A hedging apply to relationship all hedging is relationships affected if thethat reform are directly gives affected rise to uncertainties by interest rate about benchmark the timing reform. and or A amount hedging of relationshipbenchmark-based is affected cash if flowsthe reform of the gives hedged rise item to uncertainties or the hedging about instrument. the timing These and oramendments amount of benchmark-basedhad no impact on cashthe flows of the hedged item or the hedging instrument. These amendments had no impact on the *SGVFSM006036* *SGVFSM006036*

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consolidated financial statements of the Company as it does not have any interest rate hedge relationships.consolidated financial statements of the Company as it does not have any interest rate hedge relationships. ƒ Amendments to PFRS 16, Leases: COVID-19-related Rent Concessions ƒ Amendments to PFRS 16, Leases: COVID-19-related Rent Concessions The amendments provide relief to lessees from applying PFRS 16 guidance on lease modification accountingThe amendments for rent provide concessions relief toarising lessees as froma direct applying consequence PFRS 16of theguidance COVID-19 on lease pandemic. modification A lesseeaccounting may electfor rent not concessions to assess whether arising a as COVID-19 a direct consequence related rent ofconcession the COVID-19 from a pandemic. lessor is a A leaselessee modification may elect not if toit meetsassess allwhether of the afollowing COVID-19 criteria: related rent concession from a lessor is a lease modification if it meets all of the following criteria: ƒ The rent concession is a direct consequence of COVID-19; ƒ The changerent concession in lease paymentsis a direct resultsconsequence in a revised of COVID-19; lease consideration that is substantially the ƒ sameThe change as, or lessin lease than, payments the lease resultsconsideration in a revised immediately lease consideration preceding the that change; is substantially the ƒ Anysame reduction as, or less in than, lease the payments lease consideration affects only immediatelypayments originally preceding due the on change; or before ƒ JuneAny reduction30, 2021; inand lease payments affects only payments originally due on or before ƒ ThereJune 30, is no2021; substantive and change to other terms and conditions of the lease. ƒ There is no substantive change to other terms and conditions of the lease. A lessee that applies this practical expedient will account for any change in lease payments resultingA lessee thatfrom applies the COVID-19 this practical related expedient rent concession will account in the for same any changeway it wouldin lease account payments for a changeresulting that from is notthe aCOVID-19 lease modification, related rent i.e., concession as a variable in thelease same payment. way it would account for a change that is not a lease modification, i.e., as a variable lease payment. The amendment applies to annual reporting periods beginning on or after June 1, 2020. Earlier applicationThe amendment is permitted. applies toThis annual amendment reporting had periods no impact beginning on the on consolidated or after June financial 1, 2020. statements Earlier ofapplication the Company. is permitted. This amendment had no impact on the consolidated financial statements of the Company. ƒ Revised Conceptual Framework for Financial Reporting ƒ Revised Conceptual Framework for Financial Reporting The Conceptual Framework is not a standard, and none of the concepts contained therein override theThe concepts Conceptual or requirements Framework is in not any a standard.standard, Theand nonepurpose of theof the concepts Conceptual contained Framework therein isoverride to assistthe concepts in developing or requirements standards, in to any help standard. preparers The develop purpose consistent of the Conceptual accounting Framework policies where is to thereassist isin no developing applicable standards, standard toin placehelp preparers and to assist develop all parties consistent to understand accounting and policies interpret where the standards.there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions andThe recognitionrevised Conceptual criteria forFramework assets and includes liabilities some and new clarifies concepts, some provides important updated concepts. definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Company. These amendments had no impact on the consolidated financial statements of the Company. The Company has not early adopted any other standard, interpretation or amendment that has been issuedThe Company but is not has yet not effective early adopted .b. Principal any other Accounting standard, and interpretation Financial Reporting or amendment Policies that has been issued but is not yet effective .b. Principal Accounting and Financial Reporting Policies The principal accounting and financial reporting policies adopted in preparing the Company’s consolidatedThe principal financial accounting statements and financial are as reporting follows: policies adopted in preparing the Company’s consolidated financial statements are as follows: Business Combinations and Goodwill Business combinationsCombinations are and accounted Goodwill for using the acquisition method. The cost of an acquisition is Businessmeasured combinations as the aggregate are ofaccounted the consideration for using transferredthe acquisition measured method. at acquisition The cost of date an acquisition fair value, andis measuredthe amount as of the any aggregate NCI in the of theacquiree. consideration For each transferred business combination,measured at acquisition the Company date elects fair value, whether and theto measure amount theof any NCIs NCI in inthe the acquiree acquiree. at fair For value each orbusiness at the proportionate combination, sharethe Company of the acquiree’s elects whether toidentifiable measure thenet NCIsassets. in Acquisition-relatedthe acquiree at fair valuecosts areor at expensed the proportionate as incurred share and of included the acquiree’s in general and identifiableadministrative net expenses. assets. Acquisition-related costs are expensed as incurred and included in general and administrative expenses. *SGVFSM006036* *SGVFSM006036*

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When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriateWhen the Company classification acquires and adesignation business, it in assesses accordance the financial with the assetscontractual and liabilities terms, economic assumed for circumstancesappropriate classification and pertinent and conditions designation as inof accordancethe acquisition with date. the contractual This includes terms, the economicseparation of embeddedcircumstances derivatives and pertinent in host conditions contracts byas ofthe the acquiree. acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, any previously held equity interest is re-measuredIf the business at combinationits acquisition is dateachieved fair value in stages, and any any resulting previously gain held or equityloss is interestrecognized is in profit or loss.re-measured It is then at consideredits acquisition in the date determination fair value and of any goodwill. 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 acquisitionAny contingent date. consideration Contingent consideration to be transferred classified by the asacquirer equity willis not be remeasured recognized and at fair its valuesubsequent at the settlementacquisition is date. accounted Contingent for within consideration equity. Contingent classified as consideration equity is not classified remeasured as anand asset its subsequent or liability thatsettlement is a financial is accounted instrument for within and within equity. the Contingent scope of PFRS consideration 9, is measured classified at fair as valuean asset with or theliability changesthat is a financialin fair value instrument recognized and inwithin the consolidated the scope of statementPFRS 9, is of measured comprehensive at fair valueincome with in the accordancechanges in fairwith value PFRS recognized 9. Other contingentin the consolidated consideration statement that isof not comprehensive within the scope income of PFRS in 9 is measuredaccordance at with fair valuePFRS at9. each Other reporting contingent date consideration with changes thatin fair is not value within recognized the scope in profitof PFRS or loss.9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferredGoodwill is and initially the amount measured recognized at cost, beingfor NCI, the andexcess any of previous the aggregate interest of held, the considerationover the net identifiabletransferred andassets the acquired amount recognizedand liabilities for assumed. NCI, and Ifany the previous fair value interest of the held, net assets over theacquired net is in excessidentifiable of the assets aggregate acquired consideration and liabilities transferred, assumed. the If Company the fair value reassesses of the whethernet assets it acquiredhas correctly is in identifiedexcess of theall ofaggregate the assets consideration acquired and transferred, all of the liabilities the Company assumed reassesses and reviews whether the it procedures has correctly used toidentified measure all the of amounts the assets to acquired be recognized and all at of the the acquisition liabilities assumeddate. If the and reassessment reviews the proceduresstill results usedin an excessto measure of the the fair amounts value ofto netbe recognizedassets acquired at the over acquisition the aggregate date. considerationIf the reassessment transferred, still results then thein an gainexcess is ofrecognized the fair value immediately of net assets in profit acquired or loss. 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 theAfter purpose initial ofrecognition, impairment goodwill testing, isgoodwill measured acquired at cost inless a businessany accumulated combination impairment is, from losses.the For acquisitionthe purpose date, of impairment allocated totesting, each ofgoodwill the Company’s acquired cash-generating in a business combination units (CGUs) is, fromthat are the expected toacquisition benefit from date, the allocated combination, to each irrespective of the Company’s of whether cash-generating other assets orunits liabilities (CGUs) of that the areacquiree expected are assignedto benefit to from those the units. 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, theWhere goodwill goodwill associated has been with allocated the disposed to a CGU operation and part is includedof the operation in the carrying within that amount unit isof disposedthe of, operationthe goodwill when associated determining with thethe gaindisposed or loss operation on disposal. is included Goodwill in the disposed carrying in amount these circumstances of the is measuredoperation whenbased determiningon the relative the values gain or of loss the ondisposed disposal. operation Goodwill and disposedthe portion in theseof the circumstances CGU retained. is measured based on the relative values of the disposed operation and the portion of the CGU retained. If the initial accounting for business combination can be determined only provisionally by the end of theIf the period initial by accounting which the forcombination business combination is effected because can be thedetermined fair values only to provisionallybe assigned to by the the end of acquiree’sthe period byidentifiable which the assets combination and liabilities is effected can be because determined the fair only values provisionally, to be assigned the Company to the accountsacquiree’s for identifiable the combination assets andusing liabilities provisional can values.be determined Adjustments only provisionally, to those provisional the Company values as a resultaccounts of completingfor the combination the initial using accounting provisional shall values.be made Adjustments within twelve to (12)those months provisional from thevalues as a acquisitionresult of completing date. The the carrying initial accountingamount of anshall identifiable be made withinasset, liability twelve (12)or contingent months from liability the that is recognizedacquisition asdate. a result The carryingof completing amount the of initial an identifiable accounting asset, shall liability be calculated or contingent as if its liabilityfair value that at theis acquisitionrecognized asdate a resulthad been of completing recognized the from initial that accountingdate. Goodwill shall orbe anycalculated gain recognized as if its fair shall value be at the adjustedacquisition from date the had acquisition been recognized date by froman amount that date. equal Goodwill to the adjustment or any gain to therecognized fair value shall at the be acquisitionadjusted from date the of acquisition the identifiable date byasset, an amountliability equalor contingent to the adjustment liability being to the recognized fair value ator theadjusted. acquisition date of the identifiable asset, liability or contingent liability being recognized or adjusted.

*SGVFSM006036* *SGVFSM006036*

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Equity Method Investees Equity Methodmethod investeesInvestees consist of the Company’s investments in associates and joint ventures. Equity method investees consist of the Company’s investments in associates and joint ventures. An associate is an entity over which the Company has significant influence. Significant influence is Anthe associatepower to participateis an entity in over the whichfinancial the andCompany operating has policysignificant decisions influence. of the Significantinvestee, but influence is not is thecontrol power or jointto participate control over in the those financial policies. 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 Aarrangement joint venture have is arights type ofto thejoint net arrangement assets of the whereby joint venture. the parties Joint that control have isjoint the controlcontractually of the agreed arrangementsharing of control have rightsof an arrangement, to the net assets which of the exists joint only venture. when decisionsJoint control about is thethe contractuallyrelevant activities agreed sharingrequire unanimousof control of consent an arrangement, of the parties which sharing exists control. 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 Thenecessary considerations to determine made control in determining over subsidiaries. significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Company’s investments in its associate and joint ventures are accounted for using the equity Themethod. Company’s 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 Undercost. The the carryingequity method, amount the of investmentthe investment in an is associate adjusted orto recognizea joint venture changes is initially in the Company’s recognized shareat cost.of net Theassets carrying of the associateamount of or the joint investment venture sinceis adjusted the acquisition to recognize date. changes If the Company’sin the Company’s share of share oflosses net assetsof an associateof the associate or a joint or venturejoint venture equals since or exceeds the acquisition its interest date. in theIf the associate Company’s or joint share venture, of lossesthe Company of an associate discontinues or a joint recognizing venture itsequals share or of exceeds further itslosses. interest After in the the associate entity’s interest or joint isventure, thereduced Company to zero, discontinues additional recognizinglosses are provided its share for, of furtherand a liability losses. is After recognized, the entity’s only interest to the extent is that reducedthe Company to zero, has additional incurred legallosses or are constructive provided for, obligations and a liability or made is recognized,payments on only behalf to the of theextent that theassociate Company or joint has venture.incurred legalIf the orassociate constructive or joint obligations venture subsequently or made payments reports on profits, behalf the of Companythe associateresumes recognizing or joint venture. its share If the of thoseassociate profits or joint only ventureafter its subsequently share of the profits reports equals profits, the the share Company of resumeslosses not recognizing recognized. its share of those profits only after its share of the profits equals the share of losses not recognized. Goodwill relating to the associate or joint venture is included in the carrying amount of the Goodwillinvestment relating and is neitherto the associate amortized or norjoint individually venture is includedtested for in impairment. the carrying amount of the investment and is neither amortized nor individually tested for impairment. The Company’s share of the results of operations of the associate or joint venture is included in profit Theor loss. Company’s Any change share in of OCI the ofresults those of investees operations is presentedof the associate as part or of joint the Company’s venture is included OCI. In in profit oraddition, loss. Any when change there hasin OCI been of a those change investees recognized is presented directly asin partthe equity of the ofCompany’s the associate OCI. or Injoint addition,venture, the when Company there has recognizes been a change its share recognized of any changes, directly whenin the applicable, equity of the in associatethe consolidated or joint venture,statement the of Companychanges in recognizes equity. Unrealized its share of gains any andchanges, losses when resulting applicable, from transactions in the consolidated between the statementCompany ofand changes the associate in equity. or joint Unrealized venture gainsare eliminated and losses to resulting the extent from of the transactions Company’s between interest the in Companythe associate and or the joint associate venture. or joint venture are eliminated to the extent of the Company’s interest in the associate or joint venture. The aggregate of the Company’s share of profit or loss of an associate and a joint venture is shown on Thethe face aggregate of the ofconsolidated the Company’s statement share of of comprehensive profit or loss of income an associate outside and operating a joint venture profit and is shown on therepresents face of profitthe consolidated or loss after statement tax and NCI of comprehensive in the subsidiaries income of the outside associate operating or joint profit venture. 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 Thethe Company. financial statements When necessary, of the associate adjustments or joint are venturemade to arebring prepared the accounting for the same policies reporting in line period with as thethose Company. of the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the Company determines whether it is necessary to recognize Afteran impairment application loss of on the its equity investment method, in theits associateCompany or determines joint venture. whether At each it is reportingnecessary date, to recognize the anCompany impairment determines loss on whether its investment there is in objective its associate evidence or joint that venture. the investment At each in reporting the associate date, theor joint Companyventure is determinesimpaired. If whether there is there such isevidence, objective the evidence Company that calculates the investment the amount in the of associate impairment or joint as venture is impaired. If there is such evidence, the Company calculates the amount of impairment as *SGVFSM006036* *SGVFSM006036*

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the difference between the recoverable amount of the associate or joint venture and its carrying value, thethen difference recognizes between the impairment the recoverable loss as partamount of “Share of the associatein net earnings or joint of ventureequity method and its carryinginvestees” value, thenaccount recognizes in the consolidated the impairment statement loss as of part comprehensive of “Share in netincome. earnings of equity method investees” account in the consolidated statement of comprehensive income. Upon loss of significant influence over the associate or joint control over the joint venture, the UponCompany loss measuresof significant and recognizesinfluence over any theretained associate investment or joint atcontrol its fair over value. the Anyjoint differenceventure, the between Companythe carrying measures amount andof the recognizes associate any or jointretained venture investment upon loss at itsof significantfair value. influenceAny difference or joint between control theand carryingthe fair valueamount of theof the retained associate investment or joint andventure proceeds upon fromloss of disposal significant is recognized influence inor profitjoint control or andloss. the fair value of the retained investment and proceeds from disposal is recognized in profit or loss. For purposes of disclosures required under PFRS 12, Disclosure of Interests in Other Entities, in Fordetermining purposes whether of disclosures an equity required method under investee PFRS is 12,materialDisclosure to the ofCompany, Interests managementin Other Entities employs, in determiningboth quantitative whether and anqualitative equity method factors investee to evaluate is material the nature to theof, Company,and risks associated management with, employs the bothCompany’s quantitative interests and inqualitative these entities; factors and to the evaluate effects the of naturethose interestof, and onrisks the associated Company’s with, financial the Company’sposition. Factors interests considered in these include,entities; andbut notthe limitedeffects ofto, those carrying interest value on of the the Company’s investee relative financial to the position.total equity Factors method considered investments include, recognized but not in limited the Company’s to, carrying consolidated value of the financial investee statements, relative to thethe totalequity equity investee’s method contribution investments to recognizedthe Company’s in the consolidated Company’s netconsolidated income, and financial other relevant statements, the equityqualitative investee’s risks associated contribution with to thethe equityCompany’s investee’s consolidated nature, purpose net income, and sizeand ofother activities. relevant qualitative risks associated with the equity investee’s nature, purpose and size of activities. Current Versus Non-current Classification CurrentThe Company Versus presents Non-current assets Classification and liabilities in the consolidated statements of financial position based Theon current/non-current Company presents classification.assets and liabilities in the consolidated statements of financial position based on current/non-current classification. An asset is current when it is: Anƒ assetExpected is current to be whenrealized it is: or intended to be sold or consumed in the normal operating cycle; ƒ Expected to be realized or intended to be sold or consumed in the normal operating cycle; ƒ Held primarily for the purpose of trading; ƒ Held primarily for the purpose of trading; ƒ Expected to be realized within twelve months after the reporting period; or ƒ Expected to be realized within twelve months after the reporting period; or ƒ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at ƒ Cashleast twelveor cash months equivalent after unless the reporting restricted period. 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. All other assets are classified as non-current. A liability is current when: Aƒ liabilityIt is expected is current to bewhen: settled in the normal operating cycle; ƒ It is expected to be settled in the normal operating cycle; ƒ It is held primarily for the purpose of trading; ƒ It is held primarily for the purpose of trading; ƒ It is due to be settled within twelve months after the reporting period; or ƒ It is due to be settled within twelve months after the reporting period; or ƒ There is no unconditional right to defer the settlement of the liability for at least twelve months ƒ Thereafter the is noreporting unconditional period. 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. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities, respectively. Deferred tax assets and liabilities are classified as non-current assets and liabilities, respectively. Fair Value Measurement FairThe CompanyValue Measurement measures financial instruments such as derivatives at fair value at each reporting date Theand, Companyfor purposes measures of impairment financial testing, instruments uses fair such value as derivatives less costs ofat fairdisposal value or at VIU each to reporting determine date the and,recoverable for purposes amount of ofimpairment some of its testing, non-financial uses fair assets. value less Also, costs fair of values disposal of financial or VIU toinstruments determine the recoverablemeasured at amountamortized of somecost are of disclosedits non-financial in Note assets. 36. Also, fair values of financial instruments measured at amortized cost are disclosed in Note 36. *SGVFSM006036* *SGVFSM006036*

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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionFair value is between the price market that would participants be received at the to measurement sell an asset date.or paid The to transferfair value a liabilitymeasurement in an orderlyis transactionbased on the between presumption market that participants the transaction at the to measurement sell the asset date. or transfer The fair the value liability measurement takes place is either:based on the presumption that the transaction to sell the asset or transfer the liability takes place either: ƒ In the principal market for the asset or liability; or ƒ In the principalabsence of market a principal for the market, asset or in liability; the most or advantageous market for the asset or liability. ƒ In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants wouldThe fair use value when of pricingan asset the or asseta liability or liability, is measured assuming using that the market assumptions participants that market act in participantstheir economic wouldbest interest. 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 participant’s ability to generateA fair value economic measurement benefits of by a non-financialusing the asset asset in its takes highest into and account best usea market or by sellingparticipant’s it to another ability to generatemarket participant economic thatbenefits would by use using the theasset asset in itsin highestits highest and and best best use. use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficientThe Company data usesare available valuation to techniques measure fair that value, are appropriate maximizing in thethe usecircumstances of relevant observableand for which inputs sufficientand minimizing data are the available use of unobservable to measure fair inputs. value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statementsAll assets and are liabilitiescategorized for within which the fair fair value value is measured hierarchy, or described disclosed as in follows, the consolidated based on financialthe statementslowest-level are input categorized that is significant within the to fair the value fair value hierarchy, measurement described as as a whole:follows, based on the lowest-level input that is significant to the fair value measurement as a whole: ƒ Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities ƒ Level 12 – ValuationQuoted (unadjusted) techniques market for which prices the inlowest-level active markets input for that identical is significant assets toor theliabilities fair ƒ Level 2 value– Valuation measurement techniques is directly for which or indirectly the lowest-level observable input that is significant to the fair ƒ Level 3 value– Valuation measurement techniques is directly for which or indirectly the lowest-level observable input that is significant to the fair ƒ Level 3 value– Valuation measurement techniques is unobservable 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 at fair value on a recurringFor assets basis, and liabilities the Company that are determines recognized whether in the transfersconsolidated have financial occurred statements between levels at fair in value the on a hierarchyrecurring basis,by re-assessing the Company categorization determines (based whether on transfers the lowest-level have occurred input that between is significant levels in to the the fair hierarchyvalue measurement by re-assessing as a whole) categorization at the end (based of each on reporting the lowest-level period. 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 asThe derivatives, Company determinesand non-recurring the policies measurement, and procedures such as for impairment both recurring tests. fair At value each reportingmeasurement, date, suchthe financeas derivatives, team, with and thenon-recurring assistance ofmeasurement, the respective such finance as impairment teams of thetests. Parent At each Company’s reporting date, the subsidiaries,finance team, analyzes with the the assistance movements of the in respective the values finance of assets teams and liabilitiesof the Parent which Company’s are required to be remeasuredsubsidiaries, or analyzes reassessed the asmovements per the Company’s in the values accounting of assets policies. and liabilities For this which analysis, are required the finance to be remeasuredteam verifies or the reassessed major inputs as per applied the Company’s in the latest accounting valuation policies. by agreeing For the this information analysis, the in finance the valuationteam verifies computation the major to inputs contracts, applied counterparty in the latest assessment valuation byand agreeing other relevant the information documents. in the valuation computation to contracts, counterparty assessment and other relevant documents. The finance team also compares the changes in the fair value of each asset and liability with relevant externalThe finance sources team to also determine compares whether the changes the change in the is fair reasonable. value of eachOn an asset interim and liabilitybasis, the with finance relevant team presentsexternal sourcesthe valuation to determine results towhether the Company’s the change top is managementreasonable. Onfor anreview. interim This basis, includes the finance a team presentsdiscussion the of valuation the major results assumptions to the Company’s used in the topvaluations. 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 basedFor the on purpose the nature, of fair characteristics value disclosures, and risks the ofCompany the asset has or determinedliability and classes the level of ofassets the fairand valueliabilities hierarchybased on theas explainednature, characteristics above (see Note and risks36). of the asset or liability and the level of the fair value hierarchy as explained above (see Note 36). *SGVFSM006036* *SGVFSM006036*

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Cash and Cash Equivalents Cash includesand Cash cash Equivalents on hand and in banks. Cash equivalents are short-term, highly liquid investments Cashthat are includes readily cash convertible on hand to and known in banks. amounts Cash of equivalents cash with original are short-term, maturities highly of three liquid months investments or less fromthat are acquisition readily convertible date and that to knownare subject amounts to an of insignificant cash with original risk of changesmaturities in ofvalue. three months or less from acquisition date and that are subject to an insignificant risk of changes in value. Short-term Deposits Short-term Depositsdeposits, other than those classified as financial assets at FVPL, are highly liquid money marketShort-term placements deposits, with other maturities than those of classifiedmore than as three financial months assets but lessat FVPL, than one are yearhighly from liquid dates money of acquisition.market placements with maturities of more than three months but less than one year from dates of acquisition. Restricted Cash Restricted cashCash represents cash in banks earmarked for long-term debt principal and interest repaymentRestricted cashmaintained represents in compliance cash in banks with earmarked loan agreements for long-term or placed debt in principal an escrow and account interest pursuant torepayment a construction maintained agreement. in compliance with loan agreements or placed in an escrow account pursuant to a construction agreement. Financial Instruments AFinancial financial Instruments instrument is any contract that gives rise to a financial asset of one entity and a financial liabilityA financial or equity instrument instrument is any ofcontract another that entity. gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial Instruments: Financial Assets InitialFinancial Recognition Instruments: and FinancialMeasurement. AssetsFinancial assets are classified, at initial recognition, as subsequentlyInitial Recognition measured and Measurement.at amortized cost,Financial fair value assets through are classified, other comprehensive at initial recognition, income (FVOCI), as andsubsequently FVPL. measured at amortized cost, fair value through other comprehensive income (FVOCI), and FVPL. The classification of financial assets at initial recognition depends on the financial asset’s contractual cashThe classificationflow characteristics of financial and the assets Company’s at initial businessrecognition model depends for managing on the financial them. Withasset’s the contractual exception ofcash trade flow receivables characteristics that doand not the contain Company’s a significant business financing model for component managing or them. for which With thethe Companyexception hasof trade applied receivables the practical that doexpedient, not contain the Companya significant initially financing measures component a financial or for asset which at itsthe fair Company value plus,has applied in the casethe practical of a financial expedient, asset thenot Companyat FVPL, transactioninitially measures costs. Tradea financial receivables asset at that its fairdo notvalue containplus, in athe significant case of a financingfinancial assetcomponent not at FVPL,or for whichtransaction the Company costs. Trade has applied receivables the practical that do not expedientcontain a significantare measured financing at the transaction component price or for determined which the Companyunder PFRS has 15. applied Refer theto thepractical accounting policiesexpedient in are section measured“Revenue at the from transaction contracts price with determined customers.” under PFRS 15. Refer to the accounting policies in section “Revenue from contracts with customers.” In order for a financial asset to be classified and measured at amortized cost or FVOCI, it needs to giveIn order rise forto casha financial flows thatasset are to ‘solelybe classified payments and measuredof principal at andamortized interest cost (SPPI)’ or FVOCI, on the itprincipal needs to amountgive rise outstanding. to cash flows This that assessmentare ‘solely ispayments referred ofto principalas the SPPI and test interest and is (SPPI)’ performed on the at anprincipal instrument level.amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it manages its financial assetsThe Company’s in order to business generate model cash flows. for managing The business financial model assets determines refers to whetherhow it manages cash flows its financialwill result fromassets collecting in order to contractual generate cash cash flows. flows, Theselling business the financial model determinesassets, or both. whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulationPurchases or salesconvention of financial in the assetsmarket that place require (regular delivery way oftrades) assets are within recognized a time onframe the establishedtrade date, by i.e.,regulation the date or that convention the Company in the commitsmarket place to purchase (regular or way sell trades) the asset. are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Subsequent Measurement. For purposes of subsequent measurement, financial assets are classified in fourSubsequent categories: Measurement. For purposes of subsequent measurement, financial assets are classified in four categories: ƒ Financial assets at amortized cost (debt instruments) ƒ Financial assets at FVOCIamortized with cost recycling (debt instruments) of cumulative gains and losses (debt instruments) ƒ Financial assets designatedat FVOCI with at FVOCI recycling with of no cumulative recycling gainsof cumulative and losses gains (debt and instruments) losses upon ƒ derecognitionFinancial assets (equity designated instruments) at FVOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) *SGVFSM006036* *SGVFSM006036*

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ƒ Financial assets at FVPL ƒ Financial assets at FVPL Financial Assets at Amortized Cost (Debt Instruments). The Company measures financial assets at amortizedFinancial Assetscost if atboth Amortized of the following Cost (Debt conditions Instruments). are met: The Company measures financial assets at amortized cost if both of the following conditions are met: ƒ the financial asset is held within a business model with the objective to hold financial assets in ƒ orderthe financial to collect asset contractual is held within cash flows;a business and model with the objective to hold financial assets in ƒ theorder contractual to collect termscontractual of the cashfinancial flows; asset and give rise on specified dates to cash flows that are ƒ solelythe contractual payments terms of principal of the financial and interest asset on give the riseprincipal on specified amount dates outstanding. to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) methodFinancial and assets are subjectat amortized to impairment. cost are subsequently Gains and losses measured are recognized using the effective in profit interestor loss whenrate (EIR) the assetmethod is derecognized,and are subject modified to impairment. or impaired. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Company’s financial assets at amortized cost includes receivables, other current assets and other noncurrentThe Company’s assets financial (see Note assets 34). at amortized cost includes receivables, other current assets and other noncurrent assets (see Note 34). Financial Assets at FVOCI (Debt Instruments). The Company measures debt instruments at FVOCI ifFinancial both of theAssets following at FVOCI conditions (Debt Instruments). are met: The Company measures debt instruments at FVOCI if both of the following conditions are met: ƒ The financial asset is held within a business model with the objective of both holding to collect ƒ contractualThe financial cash asset flows is held and within selling; a andbusiness model with the objective of both holding to collect ƒ Thecontractual contractual cash termsflows ofand the selling; financial and asset give rise on specified dates to cash flows that are ƒ solelyThe contractual payments termsof principal of the financialand interest asset on give the principalrise on specified amount datesoutstanding. to cash flows that are solely payments of principal and interest on the principal amount outstanding. For debt instruments at FVOCI, interest income, foreign exchange revaluation and impairment losses orFor reversals debt instruments are recognized at FVOCI, in the interest consolidated income, statement foreign exchangeof comprehensive revaluation income and impairmentand computed losses in theor reversals same manner are recognized as for financial in the assetsconsolidated measured statement at amortized of comprehensive cost. The remaining income andfair computedvalue changes in arethe recognizedsame manner in asOCI. for financialUpon derecognition, assets measured the cumulative at amortized fair cost. value The change remaining recognized fair value in OCI changes is recycledare recognized to profit in OCI.or loss. Upon derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss. The Company’s debt instruments at FVOCI includes investments in quoted debt instruments included underThe Company’s “Other non-current debt instruments assets” account.at FVOCI includes investments in quoted debt instruments included under “Other non-current assets” account. Financial Assets Designated at FVOCI (Equity Instruments). Upon initial recognition, the Company canFinancial elect to Assets classify Designated irrevocably at FVOCIits equity (Equity investments Instruments) as equity. Upon instruments initial recognition, designated theat FVOCI Company whencan elect they to meet classify the definitionirrevocably of its equity equity under investments PAS 32 , asFinancial equity instruments Instruments: designated Presentation at FVOCI, and are notwhen held they for meet trading. the definition The classification of equity isunder determined PAS 32 on, Financial an instrument-by-instrument Instruments: Presentation basis., and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognizedGains and losses as other on incomethese financial in the profit assets or are loss never when recycled the right to of profit payment or loss. has Dividendsbeen established, are exceptrecognized when as the other Company income benefits in the profit from or such loss proceeds when the as right a recovery of payment of part has of been the cost established, of the financialexcept when asset, the in Company which case, benefits such gainsfrom suchare recorded proceeds in as OCI. a recovery Equity of instruments part of the designatedcost of the at FVOCIfinancial are asset, not insubject which to case, impairment such gains assessment. are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairment assessment. The Company elected to classify irrevocably its investments in unquoted equity securities under this category.The Company elected to classify irrevocably its investments in unquoted equity securities under this category. Financial Assets at FVPL. Financial assets at FVPL include financial assets held for trading, financialFinancial assets Assets designated at FVPL. uponFinancial initial assets recognition at FVPL at includeFVPL, orfinancial financial assets assets held mandatorily for trading, required tofinancial be measured assets atdesignated fair value. upon Financial initial assetsrecognition are classified at FVPL, as or held financial for trading assets if mandatorilythey are acquired required for theto be purpose measured of selling at fair orvalue. repurchasing Financial inassets the nearare classifiedterm. Derivatives, as held for including trading if separated they are acquiredembedded for derivatives,the purpose ofare selling also classified or repurchasing as held forin the trading near unlessterm. Derivatives,they are designated including as separatedeffective hedging embedded derivatives, are also classified as held for trading unless they are designated as effective hedging *SGVFSM006036*

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instruments. Financial assets with cash flows that are not solely payments of principal and interest areinstruments. classified Financialand measured assets at with FVPL, cash irrespective flows that ofare the not business solely payments model. Notwithstanding of principal and theinterest criteria forare debtclassified instruments and measured to be classified at FVPL, at irrespective amortized cost of the or businessat FVOCI, model. as described Notwithstanding above, debt the criteria instrumentsfor debt instruments may be designatedto be classified at FVPL at amortized on initial cost recognition or at FVOCI, if doing as describedso eliminates, above, or significantlydebt reduces,instruments an accountingmay be designated mismatch. at FVPL on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at FVPL are carried in the consolidated statement of financial position at fair value withFinancial net changes assets at in FVPL fair value are carried recognized in the in consolidated the profit or statementloss. of financial position at fair value with net changes in fair value recognized in the profit or loss. This category includes derivative instruments and UITF. Income earned on UITF is also recognized inThis the category profit or includes loss when derivative the right instruments of payment andhas UITF.been established. Income earned on UITF is also recognized in the profit or loss when the right of payment has been established. A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separatedA derivative from embedded the host inand a accountedhybrid contract, for as witha separate a financial derivative liability if: theor non-financial economic characteristics host, is and risksseparated are not from closely the host related and toaccounted the host; for a separate as a separate instrument derivative with if:the the same economic terms as characteristics the embedded and derivativerisks are not would closely meet related the definition to the host; of a separatederivative; instrument and the hybrid with the contract same termsis not asmeasured the embedded at FVPL. Embeddedderivative would derivatives meet arethe measureddefinition atof faira derivative; value with and changes the hybrid in fair contract value recognizedis not measured in profit at FVPL. or loss.Embedded Reassessment derivatives only are occurs measured if there at fair is either value awith change changes in the in terms fair value of the recognized contract that in profit or significantlyloss. Reassessment modifies only the occurs cash flows if there that is would either otherwisea change in be the required terms ofor thea reclassification contract that of a financialsignificantly asset modifies out of the the FVPL cash flowscategory. that would otherwise be required or a reclassification of a financial asset out of the FVPL category. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately.A derivative The embedded financial within asset ahost hybrid together contract with containing the embedded a financial derivative asset is host required is not to accounted be classified for inseparately. its entirety The as financiala financial asset asset host at FVPL.together with the embedded derivative is required to be classified in its entirety as a financial asset at FVPL. Derecognition. A financial asset (or, where applicable, a part of a financial asset or part of a group of similarDerecognition. financial Aassets) financial is primarily asset (or, derecognized where applicable, (i.e., removeda part of froma financial the Company’s asset or part consolidated of a group of statementsimilar financial of financial assets) position) is primarily when: derecognized (i.e., removed from the Company’s consolidated statement of financial position) when: ƒ the rights to receive cash flows from the asset have expired; or ƒ the rights to receive cash flows from the asset have expired; or ƒ the Company has transferred its rights to receive cash flows from the asset or has assumed an ƒ obligationthe Company to pay has thetransferred received its cash rights flows to receivein full without cash flows material from delaythe asset to a orthird has party assumed under an a ‘pass-through’obligation to pay arrangement the received; and cash either flows (a) in the full Company without materialhas transferred delay to substantially a third party all under the risks a ‘pass-through’and rewards of arrangementthe asset, or ;(b) and the either Company (a) the has Company neither hastransferred transferred nor substantiallyretained substantially all the risks all theand risksrewards and ofrewards the asset, of the or (b)asset, the but Company has transferred has neither control transferred of the asset. nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-throughWhen the Company arrangement, has transferred it evaluates its rightsif, and to to receive what extent, cash flows it has fromretained an asset the risks or has and entered rewards into of a ownership.pass-through When arrangement, it has neither it evaluates transferred if, and nor to retained what extent, substantially it has retained all of the the risks risks and and rewards rewards of of theownership. asset, nor When transferred it has neithercontrol transferredof the asset, nor the retained Company substantially continues toall recognizeof the risks the and transferred rewards of assetthe asset, to the nor extent transferred of its continuing control of involvement.the asset, the Company In that case, continues the Company to recognize also recognizes the transferred an associatedasset to the liability. extent of Theits continuing transferred involvement. asset and the Inassociated that case, liability the Company are measured also recognizes on a basis an that reflectsassociated the liability. rights and The obligations transferred that asset the andCompany the associated has retained. 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 theContinuing lower of involvement the original carryingthat takes amount the form of ofthe a assetguarantee and the over maximum the transferred amount asset of consideration is measured atthat the Companylower of the could original be required carrying to amount repay. of the asset and the maximum amount of consideration that the Company could be required to repay.

*SGVFSM006036*

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Impairment of Financial Assets. The Company recognizes an allowance for expected credit losses Impairment(ECLs) for all of debtFinancial instruments Assets. not The held Company at FVPL. recognizes ECLs are an based allowance on the for difference expected between credit losses the (ECLs)contractual for allcash debt flows instruments due in accordance not held at with FVPL. the contractECLs are and based all the on cashthe difference flows that between the Company the expectscontractual to receive, cash flows discounted due in accordance at an approximation with the contract of the original and all effectivethe cash flowsinterest that rate. the TheCompany expectedexpects to cash receive, flows discounted will include at ancash approximation flows from the of salethe originalof collateral effective held interestor other rate. credit The expectedenhancements cash flowsthat are will integral include to cashthe contractual flows from terms. the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognized in two stages. For credit exposures for which there has not been a significant increaseECLs are in recognized credit risk insince two initial stages. recognition, For credit ECLsexposures are providedfor which for there credit has losses not been that a result significant from increasedefault events in credit that risk are sincepossible initial within recognition, the next ECLs12-months are provided (a 12-month for credit ECL). losses For thosethat result credit from exposuresdefault events for whichthat are there possible has been within a significant the next 12-months increase in (a credit 12-month risk sinceECL). initial For thoserecognition, credit a loss allowanceexposures foris required which there for credit has been losses a significant expected over increase the remaining in credit risk life since of the initial exposure, recognition, irrespective a loss ofallowance the timing is requiredof the default for credit (a lifetime losses expectedECL). over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the CompanyFor receivables, does not the track Company changes applies in credit a simplified risk, but approachinstead recognizes in calculating a loss ECLs. allowance Therefore, based theon lifetimeCompany ECLs does at not each track reporting changes date. in credit The risk,Company but instead has established recognizes a aprovision loss allowance matrix basedthat is onbased lifetimeon its historical ECLs at credit each reportingloss experience, date. The adjusted Company for forward-looking has established factorsa provision specific matrix to the that debtors is based and theon itseconomic historical environment. credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For debt instruments at FVOCI, the Company applies the low credit risk simplification. At every Forreporting debt instruments date, the Company at FVOCI, evaluates the Company whether applies the debt the instrument low credit is risk considered simplification. to have At low every credit riskreporting using date, all reasonable the Company and supportableevaluates whether information the debt that instrument is available is consideredwithout undue to have cost lowor effort. credit In makingrisk using that all evaluation, reasonable the and Company supportable reassesses information the internal that is availablecredit rating without of the undue debt instrument.cost or effort. In In addition,making that the evaluation, Company considers the Company that therereassesses has been the internala significant credit increase rating of in the credit debt risk instrument. when In addition,contractual the payments Company are considers more than that 30 there days has past been due. a significant increase in credit risk when contractual payments are more than 30 days past due. The Company’s debt instruments at FVOCI comprise of government securities and quoted corporate bondsThe Company’s that are graded debt instrumentsin the top investment at FVOCI category comprise (AAA) of government by credit securitiesrating agencies and quoted and, therefore,corporate bondsare considered that are gradedto be low in thecredit top risk investment investments. category It is (AAA) the Company’s by credit policyrating agenciesto measure and, ECLs therefore, on such instrumentsare considered on toa 12-monthbe low credit basis. risk However, investments. when It there is the has Company’s been a significant policy to increase measure in ECLs credit on risk such sinceinstruments origination, on a 12-month the allowance basis. will However, be based when on the there lifetime has been ECL. a significantThe Company increase uses inthe credit ratings risk fromsince reputableorigination, credit the allowancerating firms will both be to based determine on the whether lifetime theECL. debt The instrument Company has uses significantly the ratings fromincreased reputable in credit credit risk rating and to firms estimate both ECLs.to determine whether the debt instrument has significantly increased in credit risk and to estimate ECLs. The Company considers a financial asset in default when contractual payments are more than 180 daysThe Company past due. considersHowever, a in financial certain cases,asset in the default Company when may contractual also consider payments a financial are more asset than to 180be in daysdefault past when due. internal However, or external in certain information cases, the indicatesCompany that may the also Company consider is a unlikely financial to asset receive to be the in outstandingdefault when contractual internal or amountsexternal ininformation full before indicates taking into that account the Company any credit is unlikely enhancements to receive held the by theoutstanding Company. contractual A financial amounts asset isin written full before off when taking there into isaccount no reasonable any credit expectation enhancements of recovering held by the Company.contractual Acash financial flows. asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial Instruments: Financial Liabilities InitialFinancial Recognition Instruments: and FinancialMeasurement. Liabilities Financial liabilities are classified, at initial recognition, as Initialfinancial Recognition liabilities atand FVPL, Measurement. loans and borrowings,Financial liabilities payables, are or classified, as derivatives at initial designated recognition, as hedging as financialinstruments liabilities in an effective at FVPL, hedge, loans asand appropriate. borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings Alland financialpayables, liabilities net of directly are recognized attributable initially transaction at fair costs. value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other current payables (excluding statutory Thepayables), Company’s loans financialand borrowings, liabilities and include derivative trade financial and other instruments. current payables (excluding statutory payables), loans and borrowings, and derivative financial instruments. *SGVFSM006036* *SGVFSM006036*

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Subsequent Measurement - Financial Liabilities at FVPL. Financial liabilities at FVPL include financialSubsequent liabilities Measurement held for - Financialtrading and Liabilities financial atliabilities FVPL. designatedFinancial liabilities upon initial at FVPL recognition include as at financialFVPL. liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasingFinancial liabilities in the nearare classified term. This as categoryheld for trading also includes if they derivativeare incurred financial for the instrumentspurpose of entered repurchasinginto by the Company in the near that term. are not This designated category asalso hedging includes instruments derivative in financial hedge relationships instruments asentered defined byinto PFRS by the 9. Company Separated that embedded are not designatedderivatives as are hedging also classified instruments as held in hedgefor trading relationships unless they as defined are designatedby PFRS 9. as Separated effective embeddedhedging instruments. derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the profit or loss. Gains or losses on liabilities held for trading are recognized in the profit or loss. Financial liabilities designated upon initial recognition at FVPL are designated at the initial date of recognition,Financial liabilities and only designated if the criteria upon in initial PFRS recognition 9 are satisfied. at FVPL The areCompany designated has notat the designated initial date any of financialrecognition, liability and only as at if FVPL. the criteria in PFRS 9 are satisfied. The Company has not designated any financial liability as at FVPL. Subsequent Measurement - Loans and Borrowings. This is the category most relevant to the Company.Subsequent AfterMeasurement initial recognition, - Loans and interest-bearing Borrowings. Thisloans is and the borrowingscategory most are relevantsubsequently to the measured atCompany. amortized After cost initialusing therecognition, EIR method. interest-bearing Gains and losses loans areand recognized borrowings in are profit subsequently or loss when measured the atliabilities amortized are costderecognized using the EIRas well method. as through Gains the and EIR losses amortization are recognized process. in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees orAmortized costs that cost are isan calculated integral part by takingof the EIR.into account The EIR any amortization discount or is premium included on as acquisitionfinance costs and under fees orthe costs “Interest that areexpense” an integral in the part consolidated of the EIR. statement The EIR of amortization comprehensive is included income. as finance costs under the “Interest expense” in the consolidated statement of comprehensive income. This category generally applies to interest-bearing loans and borrowings (see Notes 18, 32, and 33). This category generally applies to interest-bearing loans and borrowings (see Notes 18, 32, and 33). Derecognition. A financial liability is derecognized when the obligation under the liability is dischargedDerecognition. or cancelled A financial or expires. liability Whenis derecognized an existing when financial the obligation liability is under replaced the liabilityby another is from dischargedthe same lender or cancelled on substantially or expires. different When terms, an existing or the financial terms of liabilityan existing is replaced liability byare another substantially from modified,the same lender such an on exchange substantially or modification different terms, is treated or the as terms the derecognitionof an existing ofliability the original are substantially liability and themodified, recognition such anof aexchange new liability. or modification The difference is treated in the as respective the derecognition carrying of amounts the original is recognized liability andin the recognitionprofit or loss. of a new liability. The difference in the respective carrying amounts is recognized in the profit or loss. Financial Instruments: Offsetting Financial assetsInstruments: and financial Offsetting liabilities are offset and the net amount is reported in the consolidated statementFinancial assetsof financial and financial position liabilities if there is are a currently offset and enforceable the net amount legal isright reported to offset in the the consolidated recognized amountsstatement and of financialthere is an position intention if thereto settle is a oncurrently a net basis, enforceable to realize legal the rightassets to and offset settle the the recognized liabilities simultaneously.amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. Derivative Financial Instruments and Hedge Accounting InitialDerivative Recognition Financial and Instruments Subsequent and Measurement. Hedge Accounting The Company uses derivative financial Initialinstruments, Recognition particularly and Subsequent foreign currency Measurement. forward contracts,The Company to hedge uses its derivative foreign currency financial risks. Such instruments,derivative financial particularly instruments foreign arecurrency initially forward recognized contracts, at fair to value hedge on its the foreign date in currency which a risks. derivative Such derivativecontract is financialentered into instruments or bifurcated, are initially and are recognized subsequently at fair remeasured value on atthe fair date value. in which Derivatives a derivative are contractcarried as is financial entered into assets or whenbifurcated, the fair and value are subsequentlyis positive and remeasured as financial at liabilitiesfair value. when Derivatives the fair are carriedvalue is as negative. financial assets when the fair value is positive and as financial liabilities when the fair value is negative. For the purpose of hedge accounting, hedges are classified as: For the purpose of hedge accounting, hedges are classified as: ƒ Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or ƒ Fairliability value or hedgesan unrecognized when hedging firm thecommitment; exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment; *SGVFSM006036* *SGVFSM006036*

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ƒ Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable ƒ Cashto a particular flow hedges risk whenassociated hedging with the a recognizedexposure to asset variability or liability in cash or aflows highly that probable is either forecast attributable totransaction a particular or therisk foreign associated currency with arisk recognized in an unrecognized asset or liability firm commitment; or a highly probable and forecast ƒ transactionHedges of a or net the investment foreign currency in a foreign risk inoperation. an unrecognized firm commitment; and ƒ Hedges of a net investment in a foreign operation. At the inception of a hedge relationship, the Company formally designates and documents the hedge Atrelationship the inception to which of a hedgethe Company relationship, wishes the to Company apply hedge formally accounting designates and the and risk documents management the hedge relationshipobjective and to strategy which the for Company undertaking wishes the hedge. to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of Thethe risk documentation being hedged includes and how identification the Company of willthe hedgingassess whether instrument, the hedging the hedged relationship item, the meets nature the of thehedge risk effectiveness being hedged requirements and how the (including Company thewill analysis assess whether of sources the of hedging hedge ineffectivenessrelationship meets and the how hedgethe hedge effectiveness ratio is determined). requirements A (includinghedging relationship the analysis qualifies of sources for ofhedge hedge accounting ineffectiveness if it meets and allhow of the hedgefollowing ratio effectiveness is determined). requirements: A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: ƒ there is ‘an economic relationship’ between the hedged item and the hedging instrument; ƒ therethe effect is ‘an of economic credit risk relationship’ does not ‘dominate between the the value hedged changes’ item and that the result hedging from instrument; that economic ƒ therelationship; effect of creditand risk does not ‘dominate the value changes’ that result from that economic ƒ relationship;the hedge ratio and of the hedging relationship is the same as that resulting from the quantity of the ƒ thehedged hedge item ratio that of the the Company hedging relationship actually hedges is the and same the as quantity that resulting of the hedgingfrom the instrument quantity of that the the hedgedCompany item actually that the uses Company to hedge actually that quantity hedges of and hedged the quantity item. of the hedging instrument that the Company actually uses to hedge that quantity of hedged item. Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described Hedgesbelow: that meet all the qualifying criteria for hedge accounting are accounted for, as described below: Fair Value Hedges. The change in the fair value of a hedging instrument is recognized in the Fairconsolidated Value Hedges. statement The of change comprehensive in the fair income value ofas aother hedging expense. instrument The change is recognized in the fair in thevalue of consolidatedthe hedged item statement attributable of comprehensive to the risk hedged income is recordedas other expense.as part of Thethe carryingchange in value the fair of the value hedged of theitem hedged and is itemalso recognizedattributable in to the the consolidated risk hedged isstatement recorded of as comprehensive part of the carrying income value as other of the expense. hedged item and is also recognized in the consolidated statement of comprehensive income as other expense. For fair value hedges relating to items carried at amortized cost, any adjustment to carrying value is Foramortized fair value through hedges profit relating or loss to overitems the carried remaining at amortized term of cost,the hedge any adjustment using the EIRto carrying method. value The EIRis amortizedamortization through may begin profit as or soon loss asover an the adjustment remaining exists term and of theno laterhedge than using when the theEIR hedged method. item The EIR amortizationceases to be adjusted may begin for as changes soon as in an its adjustment fair value attributableexists and no to later the risk than being when hedged. the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in profit or Ifloss. the hedged item is derecognized, the unamortized fair value is recognized immediately in profit or loss. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative Whenchange an in unrecognized the fair value firmof the commitment firm commitment is designated attributable as a hedged to the hedged item, the risk subsequent is recognized cumulative as an changeasset or inliability the fair with value a corresponding of the firm commitment gain or loss attributable recognized to in the profit hedged or loss. risk is recognized as an asset or liability with a corresponding gain or loss recognized in profit or loss. Cash Flow Hedges. The effective portion of the gain or loss on the hedging instrument is recognized Cashin OCI Flow in the Hedges. cash flow The hedge effective reserve, portion while of anythe gainineffective or loss portionon the hedgingis recognized instrument immediately is recognized in the inprofit OCI or in loss. the cash The flowcash hedgeflow hedge reserve, reserve while is any adjusted ineffective to the portionlower of is therecognized cumulative immediately gain or loss in onthe profitthe hedging or loss. instrument The cash andflow the hedge cumulative reserve changeis adjusted in fair to thevalue lower of the of hedgedthe cumulative item. gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The Company uses foreign currency forward contracts as hedges of its exposure to foreign currency Therisk inCompany forecast usestransactions foreign currencyand firm forwardcommitments. contracts The as ineffective hedges of itsportion exposure relating to foreign to foreign currency riskcurrency in forecast contracts transactions is recognized and firmas other commitments. expense and The the ineffective ineffective portion portion relating relating to to foreign commodity currencycontracts contractsis recognized is recognized in other operating as other expenseincome orand expenses. the ineffective portion relating to commodity contracts is recognized in other operating income or expenses.

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The Company designates only the spot element of forward contracts as a hedging instrument. The Theforward Company element designates is recognized only thein OCI spot and element accumulated of forward in a contracts separate ascomponent a hedging of instrument. equity under The cost forwardof hedging element reserve. is recognized in OCI and accumulated in a separate component of equity under cost of hedging reserve. The amounts accumulated in OCI are accounted for, depending on the nature of the underlying Thehedged amounts transaction. accumulated If the hedgedin OCI aretransaction accounted subsequently for, depending results on inthe the nature recognition of the underlying of a hedgednon-financial transaction. item, the If theamount hedged accumulated transaction in subsequently equity is removed results from in the the recognition separate component of a of non-financialequity and included item, the in theamount initial accumulated cost or other in carrying equity is amount removed of fromthe hedged the separate asset or component liability. Thisof is equitynot a reclassification and included in adjustment the initial andcost willor other not be carrying recognized amount in OCI of the for hedged the period. asset orThis liability. also applies This is notwhere a reclassification the hedged forecast adjustment transaction and will of anot non-financial be recognized asset in orOCI non-financial for the period. liability This subsequently also applies wherebecomes the a hedged firm commitment forecast transaction for which of fair a non-financial value hedge accountingasset or non-financial is applied. liability subsequently becomes a firm commitment for which fair value hedge accounting is applied. For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a Forreclassification any other cash adjustment flow hedges, in the the same amount period accumulated or periods duringin OCI which is reclassified the hedged to profitcash flowsor loss affect as a reclassificationprofit or loss. adjustment in the same period or periods during which the hedged cash flows affect profit or loss. If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must Ifremain cash flowin accumulated hedge accounting OCI if theis discontinued, hedged future the cash amount flows that are hasstill been expected accumulated to occur. in Otherwise, OCI must the remainamount inwill accumulated be immediately OCI ifreclassified the hedged to future profit cash or loss flows as aare reclassification still expected adjustment.to occur. Otherwise, After the amountdiscontinuation, will be immediately once the hedged reclassified cash flow to profitoccurs, or anyloss amount as a reclassification remaining in adjustment.accumulated After OCI must discontinuation,be accounted for oncedepending the hedged on the cash nature flow of occurs, the underlying any amount transaction remaining as describedin accumulated above. OCI must be accounted for depending on the nature of the underlying transaction as described above. Hedges of a Net Investment. Hedges of a net investment in a foreign operation, including a hedge of Hedgesa monetary of a item Net Investment.that is accountedHedges for ofas apart net ofinvestment the net investment, in a foreign are operation, accounted including for in a waya hedge similar of ato monetary cash flow item hedges. that isGains accounted or losses for onas thepart hedging of the net instrument investment, relating are accounted to the effective for in aportion way similar of the tohedge cash are flow recognized hedges. Gainsas OCI or while losses any on gainsthe hedging or losses instrument relating to relating the ineffective to the effective portion portion are of the hedgerecognized are recognized in the profit as orOCI loss. while On anydisposal gains of or the losses foreign relating operation, to the ineffectivethe cumulative portion value are of any recognizedsuch gains orin lossesthe profit recorded or loss. in equityOn disposal is transferred of the foreign to the profitoperation, or loss. the cumulative value of any such gains or losses recorded in equity is transferred to the profit or loss. The Company has no hedges of a net investment in a foreign operation. The Company has no hedges of a net investment in a foreign operation. Current Versus Noncurrent Classification of Derivatives CurrentDerivative Versus instruments Noncurrent that areClassification not designated of Derivatives and considered as effective hedging instruments are Derivativeclassified as instruments current or noncurrentthat are not or designated separated and into considered a current and as effectivenoncurrent hedging portion instruments based on an are classifiedassessment as of current the facts or noncurrentand circumstances or separated (i.e., intothe underlying a current and contracted noncurrent cash portion flows). based on an assessment of the facts and circumstances (i.e., the underlying contracted cash flows). ƒ If the Company holds a derivative for trading purposes, irrespective of the timing of future cash ƒ Ifflows, the Company it is classified holds as a current.derivative for trading purposes, irrespective of the timing of future cash ƒ flows,Where itthe is Companyclassified asholds current. a derivative as an economic hedge (and does not apply hedge ƒ Whereaccounting), the Company for period holds beyond a derivative 12 months as anafter economic the end hedgeof reporting (and does period, not theapply derivative hedge is accounting),classified as noncurrentfor period beyond(or separated 12 months into currentafter the and end noncurrent of reporting portions) period, consistentthe derivative with is the classifiedclassification as noncurrent of the underlying (or separated item. into current and noncurrent portions) consistent with the ƒ classificationEmbedded derivatives of the underlying that are not item. closely related to the host contract are classified consistent ƒ Embeddedwith the cash derivatives flows of thethat host are notcontract. 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 Derivativeclassified consistent instruments with that the are classification designated as,of theand underlying are considered hedged effective item. hedgingThe derivative instruments, instrument are classifiedis separated consistent into a current with theportion classification and noncurrent of the underlyingportion only hedged if a reliable item. allocationThe derivative can be instrument made. is separated into a current portion and noncurrent portion only if a reliable allocation can be made.

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Classification of Financial Instruments Between Liability and Equity AClassification financial instrument of Financial is classified Instruments as a Betweenliability ifLiability it provides and forEquity a contractual obligation to: A financial instrument is classified as a liability if it provides for a contractual obligation to: ƒ Deliver cash or another financial asset to another entity; ƒ ExchangeDeliver cash financial or another assets financial or financial asset liabilitiesto another with entity; another entity under conditions that are ƒ Exchangepotentially financial unfavorable assets to orthe financial Company; liabilities or with another entity under conditions that are ƒ Satisfypotentially the obligationunfavorable other to the than Company; by the exchange or of a fixed amount of cash or another financial ƒ assetSatisfy for the a fixedobligation number other of ownthan equityby the shares.exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. If the Company does not have an unconditional right to avoid delivering cash or another financial assetIf the toCompany settle its does contractual not have obligation, an unconditional the obligation right to meets avoid the delivering definition cash of aor financial another financialliability. assetThe components to settle its contractualof issued financial obligation, instruments the obligation that contain meets boththe definition liability and of a equity financial elements liability. are accountedThe components for separately, of issued with financial the equity instruments component that containbeing assigned both liability the residual and equity amount elements after are deductingaccounted fromfor separately, the instrument with theas a equity whole component the amount being separately assigned determined the residual as the amount fair value after of the liabilitydeducting component from the instrumenton the date as of a issue. whole the amount separately determined as the fair value of the liability component on the date of issue. Option Liabilities Option liabilitiesLiabilities are contractual obligations of the Company to purchase its own equity instruments Optionfor cash liabilities or another are financial contractual asset obligations which gives of risethe Companyto a financial to purchase liability andits own initially equity measured instruments at the presentfor cash value or another of the financial redemption asset amount. which gives Subsequently, rise to a financial the option liability liabilities and areinitially measured measured in at the accordancepresent value with of thePFRS redemption 9. amount. Subsequently, the option liabilities are measured in accordance with PFRS 9. Inventories Inventories,Inventories which are included as part of “Other current assets” in the consolidated statement of financialInventories, position, which areare valuedincluded at theas part lower of of“Other cost andcurrent net assets”realizable in thevalue consolidated (NRV). 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 Costpresent includes location purchase and condition. price and Cost import is determined duties incurred using in the bringing moving each average item methodof inventory for the to its healthcarepresent location segment and and condition. weighted Cost average is determined method for using the thepower, moving tollways average and method the water for segment. the Dependinghealthcare segment on the nature and weighted of the inventory, average methodNRV is forbased the eitherpower, on tollways current replacementand the water cost segment. or Dependingestimated selling on the price nature less of estimatedthe inventory, cost toNRV sell. is based either on current replacement cost or estimated selling price less estimated cost to sell. Advances to Contractors and Consultants Advances to contractorsContractors andand consultants,Consultants represent advance payments for mobilization of the contractorsAdvances to and contractors consultants. and consultants,These are stated represent at costs advance less any payments impairment for mobilization in value. These of the amounts contractorsare reduced andupon consultants. receipt of the These equivalent are stated amount at costs of servicesless any renderedimpairment by thein value. contractors These and amounts consultants.are reduced upon These receipt are recognized of the equivalent as current amount or noncurrent of services depending rendered on by the the classification contractors and of its underlyingconsultants. asset. These are recognized as current or noncurrent depending on the classification of its underlying asset. Service Concession Arrangements TheService Company, Concession as operator, Arrangements accounts for a public-to-private service concession arrangement in Theaccordance Company, with as Philippine operator, accountsInterpretation for a IFRICpublic-to-private 12 where the service grantor concession controls arrangementthe infrastructure. in The accordancegrantor controls with thePhilippine infrastructure Interpretation where the IFRIC following 12 where conditions the grantor are met: controls the infrastructure. The grantorƒ controlsthe grantor the controlsinfrastructure or regulates where whatthe following services theconditions operator are must met: provide with the ƒ theinfrastructure, grantor controls to whom or regulates it must provide what services them, andthe atoperator what price; must andprovide with the ƒ infrastructure,the grantor controls to whom – through it must ownership, provide them, beneficial and at entitlementwhat price; orand otherwise – any ƒ thesignificant grantor residualcontrols interest– through in theownership, infrastructure beneficial at the entitlement end of the orarrangement’s otherwise – anyterm. significant residual interest in the infrastructure at the end of the arrangement’s term. The Company recognizes an asset for the consideration that it receives from the grantor in exchange Thefor providing Company construction recognizes an or assetupgrade for theservices. consideration The consideration that it receives received from can the take grantor a variety in exchange of forforms. providing The consideration construction given or upgrade by the services.grantor to The the consideration operator might received be rights can to: take (a) ana variety intangible of forms.asset (see The accounting consideration policy given section by the‘Service grantor Concession to the operator Arrangements might be rights – Intangible to: (a) an Asset intangible Model’); or asset (see accounting policy section ‘Service Concession Arrangements – Intangible Asset Model’); or *SGVFSM006036* *SGVFSM006036*

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(b) a financial asset (see accounting policy section ‘Service Concession Arrangements – Financial (b)Asset a financial Model’) asset (see accounting policy section ‘Service Concession Arrangements – Financial Asset Model’) Service Concession Arrangements – Intangible Asset Model WhereService the Concession operator receivesArrangements right (license) – Intangible to charge Asset users Model of public service, the Company accounts Wherefor such the arrangement operator receives under theright intangible (license) asset to charge model users (see ofNotes public 12 service,and 29). the Company accounts for such arrangement under the intangible asset model (see Notes 12 and 29). Construction and Upgrade Services: Revenue and Cost Recognition. The Company recognizes Constructionrevenue and costs and Upgradefor construction Services: and Revenue upgrade and services Cost inRecognition. accordance Thewith Company PFRS 15, recognizesRevenue from revenueContracts and with costs Customers for construction. The Company, and upgrade as operator, services receives in accordance non-cash with consideration PFRS 15, Revenue in the form from of Contractsan intangible with asset Customers (a license. The to chargeCompany, users as of operator, the public receives service) non-cash in exchange consideration for construction in the form and of anupgrade intangible services. asset The(a license operator to chargemeasures users the of intangible the public asset service) initially in exchange at cost, being for construction the amount andof the upgradecontract assetservices. recognized The operator during measures the construction the intangible or upgrade asset phase initially in accordanceat cost, being with the PFRS amount 15. of The the contractoperator assetrecognizes recognized revenue during and thea contract construction asset (that or upgrade represents phase the in right accordance to receive with an PFRSintangible 15. The operatorasset, as ‘Servicerecognizes Concession revenue and Asset’) a contract as it performs asset (that the represents construction the rightperformance to receive obligation. an intangible asset, as ‘Service Concession Asset’) as it performs the construction performance obligation. Operations Revenues. An operator that recognizes an intangible asset also recognizes revenue for the Operationsconsideration Revenues. received fromAn operator users of that the recognizespublic service an intangible during the asset operation also recognizes phase (see revenue accounting for the considerationpolicies in section received‘Revenue from fromusers contractsof the public with service customers during – Recognized the operation Over phase Time’ (see). accounting policies in section ‘Revenue from contracts with customers – Recognized Over Time’). Contractual Obligations. The Company recognizes its contractual obligations to restore the toll roads Contractualto a specified Obligations. level of serviceability The Company in accordance recognizes with its contractualPAS 37 as theobligations obligation to arisesrestore which the toll is asroads a toconsequence a specified of level the ofuse serviceability of the toll roads in accordance and is proportional with PAS to 37 the as number the obligation of vehicles arises using which the is toll as a consequenceroads and increasing of the use in measurableof the toll roads annual and increments is proportional (see Noteto the 16). number of vehicles using the toll roads and increasing in measurable annual increments (see Note 16). Service Concession Assets. The service concession assets acquired through business combinations Serviceare recognized Concession initially Assets. at the The fair service value ofconcession the concession assets agreementacquired through using multi-period business combinations excess areearnings recognized method. initially Additions at the subsequent fair value of to the business concession combinations agreement are using initially multi-period measured excessat present earningsvalue of anymethod. additional Additions estimated subsequent future concessionto business feecombinations payments pursuantare initially to the measured concession at present valueagreement of any (see additional Notes 12 estimated and 17) and/orfuture concessionthe costs of feerehabilitation payments pursuantworks incurred to the concession or additional agreementconstructions. (see Notes 12 and 17) and/or the costs of rehabilitation works incurred or additional constructions. Service concession assets acquired other than through business combinations include capitalized Serviceupfront paymentsconcession and assets expenditures acquired otherdirectly than attributable through business to the acquisition combinations of the include service capitalized concession. upfrontPayments payments to the Grantor/s and expenditures over the concessiondirectly attributable period are to capitalized the acquisition at their of thepresent service value concession. using the Paymentsincremental to borrowingthe Grantor/s rate over determined the concession at inception period date are and capitalized is included at their as part present of the value initial using the incrementalrecognition ofborrowing the service rate concession determined asset at inception with a corresponding date and is included liability as recognized part of the as initial “Service recognitionconcession feesof the payable”. service concession Borrowing asset cost inwith relation a corresponding to service concession liability recognized assets that as are “Service considered concessionas qualifying fees assets payable”. forms partBorrowing of the cost cost of in the relation service to concessionservice concession asset. assets that are considered as qualifying assets forms part of the cost of the service concession asset. Following initial recognition, the service concession assets are carried at cost less accumulated Followingamortization initial and recognition,any impairment the servicelosses. concession assets are carried at cost less accumulated amortization and any impairment losses. Following are the methods used to amortize the service concession assets: Following are the methods used to amortize the service concession assets: Methods Company UnitMethod of sProduction (UOP) Maynilad,Company CIC, NLEX Corp. and PT Nusantara UnitStraight-line of Production (UOP) PHI,Maynilad, MIBWS, CIC ,MPIWI,NLEX Corp.PNW andand PTPT NusantaraNusantara’s Straight-line PHI,water MIBWS, treatment MPIWI, plant PNW and PT Nusantara’s water treatment plant

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The amortization period and method for an intangible asset with a finite useful life is reviewed at The amortizationeach financial period year-end. and method Changes for an inintangible the expected asset useful with a life finite or theuseful expected life is reviewedpattern of at consumption each financialof future year-end. economic Changes benefits in theembodied expected in theuseful service life orconcession the expected asset pattern is accounted of consumption for by changing of future theeconomic amortization benefits period embodied or method, in the asservice appropriate, concession and areasset treated is accounted as changes for inby accountingchanging estimates. the amortizationThe amortization period or method,expense isas recognizedappropriate, under and arethe treated “Cost ofas saleschanges and inservices” accounting account estimates. in the The amortizationconsolidated expense statement is recognized of comprehensive under the “Costincome. 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 The servicegain concession or loss upon assets derecognition will be derecognized as the service upon concession turnover toassets, the Grantor. which are There expected will beto beno fully gain or lossamortized upon derecognition by then, will asbe the handed service over concession to the Grantor assets, for which no consideration. are expected to be fully amortized by then, will be handed over to the Grantor for no consideration. Service Concession Arrangements – Financial Asset Model Service ConcessionWhere the operatorArrangements has an – unconditional Financial Asset contractual Model right to receive cash or another financial asset Where thefrom, operator or at hasthe andirection unconditional of, the grantor, contractual the Companyright to receive accounts cash for or such another arrangement financial assetunder the from, or financialat the direction asset model of, the (see grantor, Notes the 8 andCompany 29). accounts for such arrangement under the financial asset model (see Notes 8 and 29). In accordance with PFRS 15, the Company determines each performance obligation and the In accordancecorresponding with PFRS transaction 15, the Company price. The determines transaction each price performance is determined obligation as the fairand valuethe of the correspondingconsideration transaction received price. or The receivable transaction in exchange price is determined for the services as the delivered. fair value Whereof the the Company considerationdoes notreceived receive or remunerationreceivable in exchangeseparately for for the the services services delivered. provided (i.e.,Where construction, the Company maintenance does not andreceive operational remuneration services separately in a single for contract),the services the provided Company (i.e., allocates construction, the transaction maintenance price between the and operationalconstruction services and in operation a single contract),services by the reference Company to allocatesthe stand-alone the transaction selling prices price betweenof the services the constructiondelivered. and operation services by reference to the stand-alone selling prices of the services delivered. During the construction phase, the Company recognizes revenue and costs by reference to the stage of During thecompletion construction as the phase, contract the Company activity progresses recognizes over revenue the construction and costs by period. reference The to Company the stage measuresof completionprogress as the usingcontract a method activity that progresses depicts theover entity’s the construction progress towards period. satisfying The Company its performance measures progress obligation.using a method As the that Company depicts the recognizes entity’s progress revenue towardsfor the construction satisfying its service performance performance obligation, obligation.it recognizes As the Company a financial recognizes asset (as revenue ‘Concession for the financial construction receivable’). service performance The financial obligation, asset is it recognizessubsequently a financial measured asset (as in ‘Concession accordance financial with PFRS receivable’). 9 (see accounting The financial policy assetsection is ‘Financial subsequentlyInstruments: measured Financial in accordance Assets’ with). PFRS 9 (see accounting policy section ‘Financial Instruments: Financial Assets’). During the operating phase, the Company allocates a proportion of the cash receipts to settle part of During thethe operating financial phase,asset. Itthe allocates Company the allocates remaining a proportionreceipts between of the cashrevenue receipts for providing to settle part maintenance of and the financialoperation asset. servicesIt allocates and the finance remaining income. receipts between revenue for providing maintenance and operation services and finance income. Property, Plant and Equipment Property,Property, Plant and plant Equipment and equipment, except land, are carried at cost, excluding day-to-day servicing, less Property,accumulated plant and equipment, depreciation except and land, any impairment are carried atloss. cost, The excluding initial cost day-to-day of property, servicing, plant andless equipment accumulatedcomprises depreciation its purchase and any price, impairment including loss. import The duties initial and cost non-refundable of property, plant purchase and equipment taxes and any comprisesdirectly its purchase attributable price, costsincluding of bringing import theduties property, and non-refundable plant and equipment purchase to taxesits working and any condition and directly attributablelocation for costs its intended of bringing use. the Such property, cost includes plant and the equipmentcost of replacing to its working part of such condition property, and plant and location forequipment its intended and borrowinguse. Such costcosts includes for long-term the cost construction of replacing projects part of whensuch property,the recognition plant andcriteria are equipmentmet. and When borrowing significant costs forparts long-term of property, construction plant and projects equipment when are the required recognition to be criteriareplaced are at intervals, met. Whenthe significantCompany recognizesparts of property, such parts plant as and individual equipment assets are with required specific to be useful replaced lives at and intervals, depreciation. the CompanyLikewise, recognizes when suchmajor parts repairs as individualare performed, assets its with cost specific is recognized useful inlives the and carrying depreciation. amount of the Likewise,property, when major plant repairs and equipment are performed, as a replacement its cost is recognized if the recognition in the carrying criteria amountare satisfied. of the Land is stated property,at plant cost and less equipment any impairment as a replacement loss. if the recognition criteria are satisfied. Land is stated at cost less any impairment loss.

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Expenditures incurred after the property, plant and equipment have been put into operation, such as repairsExpenditures and maintenance, incurred after are the normally property, recognized plant and as equipment expense inhave the beenperiod put such into costs operation, are incurred. such as In repairssituations and where maintenance, it can be areclearly normally demonstrated recognized that as the expense expenditures in the period have resulted such costs in anare increase incurred. in In thesituations future whereeconomic it can benefits be clearly expected demonstrated to be obtained that the from expenditures the use of havean item resulted of property, in an increase plant and in equipmentthe future economic beyond its benefits originally expected assessed to bestandard obtained of performance,from the use ofthe an expenditures item of property, are capitalized plant and as equipmentadditional costbeyond of the its property,originally plant assessed and equipment.standard of performance, the expenditures are capitalized as additional cost of the property, plant and equipment. Depreciation commences once the property, plant and equipment are available for use and is computedDepreciation on commencesa straight-line once basis the over property, the estimated plant and useful equipment lives of are the available assets: for use and is computed on a straight-line basis over the estimated useful lives of the assets: Leasehold improvements 2–5 years or lease term Leasehold improvements 2–5whichever years or lease is shorter term Land improvements whichever is 5shorter years LandBuilding improv and ementsbuilding improvements 5–305 years GenerationBuilding andassets building improvements 95–2530 years OfficeGeneration and otherassets equipment, furniture and fixtures 92––255 years OfficeTransportation and other equipment equipment, furniture and fixtures 2–58 years Instruments,Transportation tools equipment and other equipment 2–58 years Instruments, tools and other equipment 2–5 years The residual values, useful lives and depreciation method are reviewed, and adjusted prospectively if Theappropriate, residual atvalues, each reportinguseful lives date. and depreciation method are reviewed, and adjusted prospectively if appropriate, at each reporting date. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefitsAn item areof property, expected plantfrom andits use equipment or disposal. is derecognized Any gain or upon loss arisingdisposal on or derecognition when no future of economicthe asset (calculatedbenefits are as expected the difference from its between use or disposal. the net disposal Any gain proceeds or loss and arising the carryingon derecognition amount ofof thethe item) asset (calculatedis included inas profitthe difference or loss in between the year the the net asset disposal is derecognized. 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 constructionConstruction andin progress other direct is stated costs. at Constructioncost less any impairmentin progress isin not value. depreciated This includes until such cost timeof that constructionthe relevant assets and other are completeddirect costs. and Construction available for in its progress intended is use.not depreciated until such time that the relevant assets are completed and available for its intended use. Intangible Assets Intangible assets,Assets other than service concession assets, acquired separately are measured on initial recognitionIntangible assets, at cost. other The than costs service of intangible concession assets assets, acquired acquired in a businessseparately combination are measured are on their initial fair recognitionvalue as at the at cost.date of The acquisition. costs of intangible Following assets initial acquired recognition, in a business intangible combination assets are carriedare their at fair cost lessvalue any as accumulatedat the date of amortizationacquisition. andFollowing accumulated initial recognition,impairment losses.intangible Internally assets are generated carried at cost intangibleless any accumulated assets, excluding amortization capitalized and accumulateddevelopment impairmentcosts, are not losses. capitalized Internally and expendituregenerated is intangiblereflected in assets, profit excludingor loss in thecapitalized year in whichdevelopment the expenditure costs, are is not incurred. 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. 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 on a straight line Intangiblebasis and assessed assets with for finiteimpairment lives are whenever amortized there over is antheir indication estimated that useful an intangible lives on a asset straight may line be impaired.basis and assessed The amortization for impairment period whenever and the amortization there is an indication method for that an anintangible intangible asset asset with may a finite be usefulimpaired. life areThe reviewed amortization at least period at the and end the of amortization each reporting method period. for Changesan intangible in the asset expected with auseful finite lifeuseful or thelife expectedare reviewed pattern at least of consumption at the end of of each future reporting economic period. benefits Changes embodied in the in expected the asset useful is lifeaccounted or the expectedfor by changing pattern theof consumption amortization ofperiod future or economic method, as benefits appropriate, embodied and arein the treated asset as is changesaccounted in foraccounting by changing estimates. the amortization The amortization period orexpense method, on as intangible appropriate, assets and with are finitetreated lives as is recognizedchanges in accountingin profit or estimates.loss in the expenseThe amortization category expenseconsistent on with intangible the function assets ofwith the finite intangible lives is recognizedassets. in profit or loss in the expense category consistent with the function of the intangible assets.

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Estimated useful lives of the intangible assets with finite lives: Estimated useful lives of the intangible assets with finite lives: Customer contracts and relationships 5–20 years PropertyCustomer use contracts rights and relationships 105–20 years LicensesProperty useand rightstechnology 10–20 years SoftwareLicenses and technology 205 years Software 5 years Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, eitherIntangible individually assets with or atindefinite the CGU useful level (seelives Notes are not 11 amortized, and 14). Thebut areassessment tested for of impairment indefinite life annually, is reviewedeither individually annually toor determineat the CGU whether level (see the Notes indefinite 11 and life 14). continues The assessment to be supportable. of indefinite If no life longer is supportable,reviewed annually the change to determine in useful whether life from the indefinite indefinite to life finite continues is made to on be a supportable.prospective basis. 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 betweenGains or thelosses net arisingdisposal from proceeds derecognition and the carryingof an intangible amount assetof the are intangible measured asset as the and difference are recognized inbetween profit orthe loss net whendisposal the proceedsintangible and asset the is carrying derecognized. amount of the intangible asset and are recognized in profit or loss when the intangible asset is derecognized. Impairment of Nonfinancial Assets TheImpairment Company of assesses,Nonfinancial at each Assets reporting date, whether there is an indication that an asset may be impaired.The Company If any assesses, such indication at each reporting exists, or date, when whether annual thereimpairment is an indication testing for that an anasset asset is required,may be theimpaired. Company If any estimates such indication the asset’s exists, recoverable or when amount. annual impairmentAn asset’s recoverable testing for an amount asset isis required,the higher ofthe an Company asset’s or estimates CGU’s fairthe valueasset’s less recoverable costs of disposal amount. and An its asset’s VIU andrecoverable is determined amount for is an the higher individualof an asset’s asset, or CGU’s unless fairthe assetvalue does less costsnot generate of disposal cash and inflows its VIU that and are is largely determined independent for an of those fromindividual other asset,assets unless or groups the assetof assets. does notWhere generate the carrying cash inflows amount that of arean assetlargely or independentCGU exceeds of its those recoverablefrom other assets amount, or groupsthe asset of isassets. considered Where impaired the carrying and isamount written of down an asset to its or recoverable CGU exceeds amount. its Inrecoverable assessing amount,VIU, the the estimated asset is futureconsidered cash flowsimpaired are anddiscounted is written to downtheir present to its recoverable value using amount. a pre-tax discountIn assessing rate VIU, that reflectsthe estimated current future market cash assessments flows are discountedof the time tovalue their of present money valueand the using risks a pre-tax specificdiscount to rate the that asset. reflects In determining current market fair valueassessments less costs of theof disposal,time value recent of money market and transactions the risks are takenspecific into to account,the asset. if Inavailable. determining If no fair such value transactions less costs can of disposal,be identified, recent an market appropriate transactions valuation are modeltaken into is used. account, These if available.calculations If areno suchcorroborated transactions by valuation can be identified, multiples, an quoted appropriate share valuationprices for publiclymodel is tradedused. Thesesubsidiaries calculations or other are available corroborated fair value by valuation indicators. multiples, Impairment quoted losses share are prices recognized for inpublicly profit ortraded loss. 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 areThe prepared Company separately bases its forimpairment each of the calculation Company’s on detailedCGUs to budgets which theand individual forecast calculations, assets are allocated. which Theseare prepared budgets separately and forecast for eachcalculations of the Company’s generally cover CGUs a toperiod which of thefive individual (5) years. assets For longer are allocated. periods, aThese long-term budgets growth and forecast rate is calculated calculations and generally applied to cover project a period future of cash five flows (5) years. after theFor fifth longer year. 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 expenseImpairment categories losses, consistentincluding impairmentwith the function on inventories, of the impaired are recognized asset. 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 whetherFor nonfinancial there is anassets indication excluding that goodwill,previously an recognized assessment impairment is made at losseseach reporting no longer date exist to ordetermine have decreased.whether there If suchis an indicationindication exists,that previously the Company recognized estimates impairment the asset’s losses or CGU’s no longer recoverable exist or have amount.decreased. A Ifpreviously such indication recognized exists, impairment the Company loss estimatesis reversed the only asset’s if there or CGU’s has been recoverable a change in the assumptionsamount. A previously used to determine recognized the impairmentasset’s recoverable loss is reversed amount onlysince if the there last has impairment been a change loss was in the recognized.assumptions Theused reversal to determine is limited the asset’s so that recoverable the carrying amount amount since of the the asset last doesimpairment not exceed loss itswas recoverablerecognized. amount,The reversal nor exceed is limited the socarrying that the amount carrying that amount would of have the beenasset determined,does not exceed net of its depreciation,recoverable amount, had no impairmentnor exceed theloss carrying been recognized amount that for wouldthe asset have in priorbeen determined,years. Such netreversal of is recognizeddepreciation, in hadprofit no orimpairment loss unless loss the beenasset recognizedis carried at for a revaluedthe asset amount,in prior years.in which Such case, reversal the reversal is isrecognized treated as in a profitrevaluation or loss increase. unless the After asset such is carried a reversal, at a revaluedthe depreciation amount, (in in casewhich of case, property, the reversal plant andis treated equipment) as a revaluation and amortization increase. (in After case suchof property a reversal, use rights,the depreciation service concession (in case of assets property, and plant softwareand equipment) cost) charges and amortization are adjusted (in in case future of periodsproperty to use allocate rights, the service asset’s concession revised carrying assets and amount, lesssoftware any residualcost) charges value, are on adjusteda systematic in future basis periods over their to allocateremaining the useful asset’s lives. revised carrying amount, less any residual value, on a systematic basis over their remaining useful lives. *SGVFSM006036* *SGVFSM006036*

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Goodwill. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstancesGoodwill. Goodwill indicate is thatreviewed the carrying for impairment amount mayannually be impaired. or more frequentlyImpairment if isevents determined or changes for in Grantors. Subsequently, once the claims have been verified by the Independent Consultant and goodwillcircumstances by assessing indicate the that recoverable the carrying amount amount of may the CGU,be impaired. or group Impairment of CGUs, tois whichdetermined the goodwill for agreed to by the Grantors, they will be reclassified to claims receivable under “Receivables”. Claims relates.goodwill Where by assessing the recoverable the recoverable amount amount of the CGU,of the orCGU, group or ofgroup CGUs, of CGUs,is less thanto which the carrying the goodwill that are not approved shall be reclassified to the “Service concession assets” account. amountrelates. ofWhere the CGU the recoverable or group of amount CGUs, toof whichthe CGU, goodwill or group had of been CGUs, allocated, is less anthan impairment the carrying loss is recognized.amount of the Impairment CGU or group losses of relatingCGUs, to whichgoodwill goodwill cannot had be reversedbeen allocated, in future an periods. impairment loss is Light Rail Vehicle (LRV) Shortfall, Fare Deficits and Grantors Compensation Payment. LRMC shall recognized. Impairment losses relating to goodwill cannot be reversed in future periods. recognize these claims as revenue only when it is probable that the economic benefit associated with Service Concession Assets not yet Available for Use. Service concession assets not yet available for these transactions will flow to LRMC; that is until the consideration is received or until an uncertainty useService are testedConcession for impairment Assets not annually. yet Available Impairment for Use. is Service determined concession by comparing assets not the yet carrying available value for of is removed. The uncertainty is removed when the claim is acknowledged or approved by the theuse assetare tested with forits recoverableimpairment value.annually. Where Impairment the recoverable is determined value ofby the comparing service concession the carrying assets value not of Grantors, whichever is earlier. yetthe availableasset with for its userecoverable is less than value. the carrying Where the value, recoverable an impairment value of is therecognized. service concession assets not yet available for use is less than the carrying value, an impairment is recognized. Equity Attributable to Owners of the Parent Company Assets Held For Sale and Discontinued Operations Assets areHeld classified For Sale as and assets Discontinued held for sale Operations when their carrying amount is to be recovered principally Common Shares. Common shares are classified as equity and are measured at par value for all shares throughAssets are a sale classified transaction as assets and helda sale for is saleconsidered when their highly carrying probable. amount Sale is is to determined be recovered to principallybe highly issued. Proceeds and/or fair value of consideration received in excess of par value are recognized as probable,through a ifsale management transaction is and committed a sale is consideredto a plan to highlysell the probable. asset (or disposalSale is determined group), and to an be active highly additional paid-in capital. Incremental costs directly attributable to the issue of common shares and programmeprobable, if tomanagement locate a buyer is committed and complete to a theplan plan to sell have the been asset initiated. (or disposal Further, group), the andasset an (or active share options are recognized as a deduction from equity, net of any tax effects. disposalprogramme group) to locate is actively a buyer marketed and complete for sale the at plana price have that been is reasonable initiated. inFurther, relation the to asset its current (or fair value.disposal In group) addition, is actively the sale marketed is expected for to sale qualify at a pricefor recognition that is reasonable as a completed in relation sale to within its current one yearfair Preferred Shares. Preferred share is classified as equity if it is non-redeemable, or redeemable only fromvalue. the In date addition, of classification, the sale is expected except as to when qualify the for delay recognition is caused as by a eventscompleted or circumstances sale within one beyond year at the Company’s option, and any dividends are discretionary. Dividends thereon are recognized as thefrom Company’s the date of control classification, and there except is sufficient as when evidence the delay that is caused the Company by events remains or circumstances committed tobeyond its distributions within equity upon approval by the Parent Company’s BOD. planthe Company’s to sell the assetcontrol (or and disposal there group).is sufficient evidence that the Company remains committed to its plan to sell the asset (or disposal group). Preferred share is classified as a liability if it is redeemable on a specific date or at the option of the Property, plant and equipment and intangible assets are not depreciated or amortized once classified shareholders, or if dividend payments are not discretionary. Dividends thereon are recognized as asProperty, held for plant sale. and equipment and intangible assets are not depreciated or amortized once classified interest expense in profit or loss as accrued. as held for sale. Assets held for sale are stated at the lower of carrying amount and fair value less costs to sell and are Retained Earnings. Retained earnings represent accumulated earnings net of cumulative dividends presentedAssets held as for current sale areassets stated in the at the consolidated lower of carrying statement amount of financial and fair position. value less costs to sell and are declared, adjusted for the effects of equity restructuring and transactions with NCI and the effects of presented as current assets in the consolidated statement of financial position. changes in accounting policies as may be required by the PFRS transitional provisions. A disposal group qualifies as discontinued operation if it is a component of an entity that either has beenA disposal disposed group of, qualifiesor is classified as discontinued as held for operation sale, and: if it is a component of an entity that either has Cash Dividend. The Company recognizes a liability to distribute cash to equity holders of the Parent been disposed of, or is classified as held for sale, and: Company when the distribution is authorized and the distribution is no longer at the discretion of the ƒ Represents a separate major line of business or geographical area of operations; Company. As per the corporate laws in the Philippines, a distribution is authorized when it is ƒ IsRepresents part of a singlea separate co-ordinated major line plan of businessto dispose or ofgeographical a separate major area of line operations; of business or approved by the BOD. A corresponding amount is charged directly against retained earnings. ƒ geographicalIs part of a single area co-ordinatedof operations; plan or to dispose of a separate major line of business or ƒ Isgeographical a subsidiary area acquired of operations; exclusively or with a view to resale. Equity Reserves. Equity reserves are made up of equity transactions other than capital contributions ƒ Is a subsidiary acquired exclusively with a view to resale. such as equity component of a convertible financial instrument, transactions with NCI and Discontinued operations are excluded from the results of continuing operations and are presented as a share-based payment transactions or ESOP. singleDiscontinued amount operations as profit or are loss excluded after tax from from the discontinued results of continuing operations operations in the consolidated and are presented statement as of a comprehensivesingle amount as income. profit or The loss consolidated after tax from statements discontinued of comprehensive operations in theincome consolidated are re-presented statement in of Other Comprehensive Income Reserve. OCI reserve comprises items of income and expenses that are thecomprehensive comparative income. period for The all consolidated operations that statements are discontinued of comprehensive by the end income of the reportingare re-presented period. in recognized directly in equity. OCI items are either reclassified to profit or loss or directly to equity in the comparative period for all operations that are discontinued by the end of the reporting period. subsequent periods. Assets Held in Trust Assets thatHeld are in ownedTrust by MWSS but are used in the operations of Maynilad under the Concession Borrowing Costs Agreement,Assets that are are owned not reflected by MWSS in the but consolidated are used in statementthe operations of financial of Maynilad position under but the treated Concession as Assets Borrowing costs are capitalized if they are directly attributable to the acquisition, construction or HeldAgreement, in Trust, are except not reflected for certain in the assets consolidated transferred statement to Maynilad of financial as mentioned position in butNote treated 31. as Assets production of a qualifying asset. To the extent that funds are borrowed specifically for the purpose of Held in Trust, except for certain assets transferred to Maynilad as mentioned in Note 31. obtaining a qualifying asset, the amount of borrowing costs eligible for capitalization on that asset Claims from the Grantors shall be determined as the actual borrowing costs incurred on that borrowing during the period less Claims from the Grantors any investment income on the temporary investment of those borrowings. To the extent that funds Structural Defect Restoration (SDR) costs and Existing System Requirement (ESR) costs. LRMC’s are borrowed generally, the amount of borrowing costs eligible for capitalization shall be determined claimsStructural from Defect the Grantors Restoration of the (SDR) LRT-1 costs Concession, and Existing based System on the Requirement actual costs (ESR) incurred, costs. are LRMC’sinitially by applying a capitalization rate to the expenditures on that asset. The capitalization rate shall be the recordedclaims from as deferred the Grantors charges of the lodged LRT-1 under Concession, “Other noncurrent based on theassets” actual pending costs incurred,approval arefrom initially the weighted average of the borrowing costs applicable to the borrowings of the Company that are recorded as deferred charges lodged under “Other noncurrent assets” pending approval from the outstanding during the period, other than borrowings made specifically for the purpose of obtaining a *SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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Grantors. Subsequently, once the claims have been verified by the Independent Consultant and Grantors.agreed to by Subsequently, the Grantors, once they the will claims be reclassified have been to verified claims byreceivable the Independent under “Receivables”. Consultant and Claims agreedthat are to not by approved the Grantors, shall theybe reclassified will be reclassified to the “Service to claims concession receivable assets” under account. “Receivables”. Claims that are not approved shall be reclassified to the “Service concession assets” account. Light Rail Vehicle (LRV) Shortfall, Fare Deficits and Grantors Compensation Payment. LRMC shall Lightrecognize Rail theseVehicle claims (LRV) as Shortfall,revenue only Fare when Deficits it is andprobable Grantors that Compensationthe economic benefit Payment. associated LRMC with shall recognizethese transactions these claims will flowas revenue to LRMC; only thatwhen is ituntil is probable the consideration that the economic is received benefit or until associated an uncertainty with theseis removed. transactions The uncertainty will flow to is LRMC; removed that when is until the claimthe consideration is acknowledged is received or approved or until by an the uncertainty isGrantors, removed. whichever The uncertainty is earlier. is removed when the claim is acknowledged or approved by the Grantors, whichever is earlier. Equity Attributable to Owners of the Parent Company Equity Attributable to Owners of the Parent Company Common Shares. Common shares are classified as equity and are measured at par value for all shares Commonissued. Proceeds Shares. and/or Common fair sharesvalue ofare consideration classified as equityreceived and in are excess measured of par atvalue par valueare recognized for all shares as issued.additional Proceeds paid-in and/orcapital. fair Incremental value of consideration costs directly received attributable in excess to the of issue par valueof common are recognized shares and as additionalshare options paid-in are recognized capital. Incremental as a deduction costs from directly equity, attributable net of any to taxthe effects.issue of common 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 Preferredat the Company’s Shares. option, Preferred and share any dividendsis classified are as discretionary. equity if it is non-redeemable,Dividends thereon or are redeemable recognized only as atdistributions the Company’s within option, equity and upon any approval dividends by arethe discretionary.Parent Company’s Dividends BOD. thereon are recognized as distributions within equity upon approval by the Parent Company’s BOD. Preferred share is classified as a liability if it is redeemable on a specific date or at the option of the Preferredshareholders, share or is if classified dividend paymentsas a liability are if not it is discretionary. redeemable on Dividends a specific thereon date or areat therecognized option of as the shareholders,interest expense or ifin dividendprofit or losspayments as accrued. 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,Retained Earnings.adjusted for Retained the effects earnings of equity represent restructuring accumulated and transactions earnings net with of cumulativeNCI and the dividends effects of declared,changes in adjusted accounting for the policies effects as of may equity be required restructuring by the and PFRS transactions transitional with provisions. NCI and the effects of changes in accounting policies as may be required by the PFRS transitional provisions. Cash Dividend. The Company recognizes a liability to distribute cash to equity holders of the Parent CompanyCash Dividend. when theThe distribution Company recognizesis authorized a liability and the todistribution distribute iscash no tolonger equity at holdersthe discretion of the Parentof the CompanyCompany. when As per the the distribution corporate islaws authorized in the Philippines, and the distribution a distribution is no is longer authorized at the whendiscretion it is of the Company.approved by As the per BOD. the corporate A corresponding laws in the amount Philippines, is charged a distribution directly against is authorized retained when earnings. it is approved by the BOD. A corresponding amount is charged directly against retained earnings. Equity Reserves. Equity reserves are made up of equity transactions other than capital contributions suchEquity as Reserves. equity component Equity reserves of a convertible are made financial up of equity instrument, transactions transactions other than with capital NCI andcontributions suchshare-based as equity payment component transactions of a convertible or ESOP. financial instrument, transactions with NCI and share-based payment transactions or ESOP. Other Comprehensive Income Reserve. OCI reserve comprises items of income and expenses that are recognizedOther Comprehensive directly in equity.Income OCIReserve. items OCI are eitherreserve reclassified comprises toitems profit of orincome loss or and directly expenses to equity that are in recognizedsubsequent directlyperiods. in equity. OCI items are either reclassified to profit or loss or directly to equity in subsequent periods. Borrowing Costs Borrowing Costscosts are capitalized if they are directly attributable to the acquisition, construction or productionBorrowing costsof a qualifying are capitalized asset. if To they the are extent directly that attributablefunds are borrowed to the acquisition, specifically construction for the purpose or of obtainingproduction a ofqualifying a qualifying asset, asset. the amount To the extentof borrowing that funds costs are eligible borrowed for capitalizationspecifically for on the that purpose asset of shallobtaining be determined a qualifying as asset,the actual the amount borrowing of borrowing costs incurred costs on eligible that borrowing for capitalization during the on period that asset less anyshall investment be determined income as the on actualthe temporary borrowing investment costs incurred of those on borrowings.that borrowing To during the extent the period that funds less areany borrowedinvestment generally, income onthe the amount temporary of borrowing investment costs of eligiblethose borrowings. for capitalization To the shall extent be that determined funds byare applyingborrowed a generally,capitalization the amountrate to the of borrowingexpenditures costs on thateligible asset. for The capitalization capitalization shall rate be shalldetermined be the weightedby applying average a capitalization of the borrowing rate to thecosts expenditures applicable toon the that borrowings asset. The of capitalization the Company rate that shall are be the outstandingweighted average during of the the period, borrowing other costs than applicableborrowings to made the borrowings specifically of for the the Company purpose thatof obtaining are a outstanding during the period, other than borrowings made specifically for the purpose of obtaining a *SGVFSM006036* *SGVFSM006036*

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qualifying asset. The amount of borrowing costs capitalized during a period shall not exceed the Contingent Liabilities. Contingent liabilities are not recognized in the consolidated financial qualifyingactual amount asset. of borrowingThe amount costs of borrowing incurred during costs capitalizedthat period. during a period shall not exceed the statementsContingent butLiabilities. are disclosed Contingent in the notesliabilities to consolidated are not recognized financial in statements the consolidated unless financialthe possibility of actual amount of borrowing costs incurred during that period. statementsan outflow butof resources are disclosed embodying in the notes economic to consolidated benefits is financialremote. statementsContingent unlessassets theare possibilitynot of Capitalization of borrowing costs commences when the activities necessary to prepare the asset for recognizedan outflow ofin resourcesthe consolidated embodying financial economic statements benefits but isare remote. disclosed Contingent in the notes assets to consolidatedare not Capitalizationintended use are of inborrowing progress costsand expenditures commences andwhen borrowing the activities costs necessary are being to incurred. prepare theBorrowing asset for financialrecognized statements in the consolidated when an inflow financial of economic statements benefits but are is disclosed probable. in the notes to consolidated intendedcosts are usecapitalized are in progress until the and asset expenditures is available and for borrowingits intended costs use. are If thebeing resulting incurred. carrying Borrowing amount financial statements when an inflow of economic benefits is probable. costsof the are asset capitalized exceeds itsuntil recoverable the asset isamount, available an forimpairment its intended loss use. is recognized. If the resulting Borrowing carrying costs amount Contingent Liabilities Recognized in a Business Combination. A contingent liability recognized in a ofinclude the asset interest exceeds charges its recoverable and other costs amount, incurred an impairment in connection loss with is recognized. the borrowing Borrowing of funds, costs as well as businessContingent combination Liabilities isRecognized initially measured in a Business at its Combination.fair value. Subsequently,A contingent it liabilityis measured recognized at the higher in a includeexchange interest differences charges arising and other from costsforeign incurred currency in connectionborrowings with used the to financeborrowing these of funds,projects, as towell the as businessof the amount combination that would is initially be recognized measured in accordanceat its fair value. with theSubsequently, requirements it isfor measured provisions at theabove higher or exchangeextent that differences they are regarded arising asfrom an foreignadjustment currency to interest borrowings costs. used to finance these projects, to the theof the amount amount initially that would recognized be recognized less, when in appropriate,accordance with cumulative the requirements amortization for recognizedprovisions abovein or extent that they are regarded as an adjustment to interest costs. accordancethe amount initiallywith the recognizedrequirements less, for when revenue appropriate, recognition. cumulative This account amortization is included recognized in “Other in All other borrowing costs are expensed as incurred. long-termaccordance liabilities” with the requirements in the consolidated for revenue statements recognition. of financial This position.account is included in “Other All other borrowing costs are expensed as incurred. long-term liabilities” in the consolidated statements of financial position. Provisions and Contingencies Related Parties Provisions andare recognizedContingencies when the Company has a present obligation (legal or constructive) as a EnterprisesRelated Parties and individuals that directly, or indirectly through one or more intermediaries, control or Provisionsresult of a pastare recognizedevent, it is probablewhen the thatCompany an outflow has a of present resources obligation embodying (legal economic or constructive) benefits as will a be areEnterprises controlled and by individuals or under common that directly, control or withindirectly the Company, through one including or more holding intermediaries, companies, control or resultrequired of toa past settle event, the obligation it is probable and thata reliable an outflow estimate of resources can be made embodying of the amount economic of the benefits obligation. will be aresubsidiaries controlled and by fellow or under subsidiaries, common control are related with parties the Company, of the Company. including Associates,holding companies, joint ventures requiredWhere the to Companysettle the obligationexpects some and or a reliableall of the estimate provision can to be be made reimbursed, of the amount for example of the underobligation. an andsubsidiaries individuals and owning, fellow subsidiaries, directly or indirectly, are related an parties interest of inthe the Company. voting power Associates, of the Company joint ventures that Whereinsurance the contract, Company the expects reimbursement some or all is recognizedof the provision as a separateto be reimbursed, asset but onlyfor example when the under an givesand individuals them significant owning, influence directly overor indirectly, the enterprise, an interest key management in the voting personnel, power of the including Company directors that insurancereimbursement contract, is virtually the reimbursement certain. The is expense recognized relating as a separateto any provision asset but is only presented when thein profit or givesand officers them significant of the Company influence and over close the members enterprise, of the key family management of these personnel, individuals, including and companies directors reimbursementloss, net of any isreimbursement. virtually certain. If the The effect expense of the relating time value to any of provision money is is material, presented provisions in profit orare associatedand officers with of the these Company individuals and alsoclose constitute members relatedof the familyparties. of In these considering individuals, each and possible companies related loss,discounted net of usingany reimbursement. a current pre-tax If ratethe effectthat reflects, of the time where value appropriate, of money the is material,risks specific provisions to the are entityassociated relationship, with these attention individuals is directed also constitute to the substance related parties.of the relationship In considering and noteach merely possible the related legal discountedliability. Where using discountinga current pre-tax is used, rate the that increase reflects, in wherethe provision appropriate, due to the the risks passage specific of time to the is form.entity relationship, attention is directed to the substance of the relationship and not merely the legal liability.recognized Where as an discountinginterest expense. is used, the increase in the provision due to the passage of time is form. recognized as an interest expense. Operating Revenues Recognized Over Time ƒ Warranties and Guarantees. Provision relates to estimated expenses of concluded and ongoing RevenueOperating from Revenues contracts Recognized with customers Over Time is recognized when services are transferred to the customer at ƒ Warrantiesdebt settlement and negotiationsGuarantees. andProvision certain relates warranties to estimated extended expenses in relation of concludedto debt for andasset ongoing swap theRevenue amount from that contracts amount thatwith reflects customers the considerationis recognized whento which services the Company are transferred expects to to the be customer entitled inat debtarrangements settlement entered negotiations in prior and years. certain The warranties amount of extended provision in is relation recognized to debt upon for entering asset swap into theexchange amount for that those amount goods that or reflectsservices. the The consideration Company has to generallywhich the concludedCompany expectsthat it is tothe be principal entitled in arrangementssuch arrangement entered and inis priorbased years. on historical The amount experience of provision or best isestimate recognized as a resultupon enteringof ongoing into itsexchange revenue for arrangements those goods becauseor services. it typically The Company controls has the generally services beforeconcluded transferring that it is themthe principal to the in suchnegotiations. arrangement and is based on historical experience or best estimate as a result of ongoing customer.its revenue arrangements because it typically controls the services before transferring them to the negotiations. customer. ƒ Provision for Heavy Maintenance. Provision for heavy maintenance pertains to the present value Water and Sewerage Services Revenue. Revenues from water and sewerage services are recognized ƒ Provisionof the estimated for Heavy contractual Maintenance. obligations Provision of the forCompany heavy maintenance to restore the pertains service toconcession the present assets value uponWater supply and Sewerage of water Servicesto the customers. Revenue . Billings Revenues to fromcustomers water consist and sewerage of water, services environmental are recognized and ofor thetoll estimatedroads to a contractualspecified level obligations of serviceability of the Company during the to restoreservice the concession service concession term and to assets sewerageupon supply charges. of water to the customers. Billings to customers consist of water, environmental and ormaintain toll roads the tosame a specified assets in level good of condition serviceability prior duringto turnover the service of the assetsconcession to the termPhilippine and to sewerage charges. maintainGovernment. the same The assetsamount in of good provision condition is accrued prior to every turnover year of and the recognized assets to the in Philippineprofit or loss and Maynilad also charges its customers with one-time connection and installation fees upon initial set-up Government.is reduced by theThe actual amount obligations of provision paid is for accrued heavy everymaintenance year and of recognized the service in concession profit or loss assets. and Mayniladof its service also connection. charges its customersThe connection with one-timeand installation connection fee is and payable installation upfront fees and upon is initial set-up is reduced by the actual obligations paid for heavy maintenance of the service concession assets. non-refundable.of its service connection. The connection The connection and installation and installation fees are not fee separateis payable performance upfront and obligation is from ƒ Decommissioning Liability. The decommissioning liability arising from generation companies’ thenon-refundable. water services The and connection hence, initially and installation recorded as fees a contract are not liability separate (under performance “Accounts obligation payable from and ƒ Decommissioningobligations, under Liabilitytheir Environmental. The decommissioning Compliance liabilityCertificate, arising to decommission from generation or companies’dismantle theother water current services liabilities” and hence, for the initially current recorded portion andas a “Othercontract long-term liability (underliabilities” “Accounts for the payablenon-current and obligations,their power plantunder complex their Environmental at the end of Complianceits useful life. Certificate, A corresponding to decommission asset is recognized or dismantle as part portion).other current The liabilities” contract liability for the iscurrent subsequently portion andrecognized “Other long-termas revenue liabilities” over the contract for the non-currentterm. theirof property, power plantplant complexand equipment. at the end Decommissioning of its useful life. costs A corresponding are provided assetat the is present recognized value as of part portion). The contract liability is subsequently recognized as revenue over the contract term. ofexpected property, costs plant to settleand equipment. the obligation Decommissioning using estimated costs cash areflows. provided The cash at the flows present are discountedvalue of Toll Fees. Revenue from toll fees is recognized upon sale of toll tickets. Toll fees received in expectedat a current costs pre-tax to settle rate thethat obligation reflects the using risks estimated specific tocash the flows.decommissioning The cash flows liability. are discounted The advance,Toll Fees .through Revenue transponders from toll fees or magnetic is recognized cards, upon is recognized sale of toll as tickets. income Toll upon fees the received holders’ in atunwinding a current ofpre-tax the discount rate that is reflects expensed the as risks incurred specific and to recognized the decommissioning in the consolidated liability. statement The advance,availment through of the toll transponders road services, or magnetic net of sales cards, discounts. is recognized as income upon the holders’ unwindingof comprehensive of the discount income asis expensedan accretion as incurredof decommissioning and recognized liability in the under consolidated the “Interest statement availment of the toll road services, net of sales discounts. ofexpense” comprehensive account. income The estimated as an accretion future costs of decommissioning of decommissioning liability are reviewedunder the annually“Interest and Power Sales. ‘Power revenue’ consist of energy fees for the energy and services supplied by the expense”adjusted prospectively. account. The estimatedChanges in future the estimated costs of decommissioning future costs or in arethe revieweddiscount rateannually applied and are generationPower Sales companies. ‘Power revenue’as provided consist for in of their energy respective fees for EPPAs the energy with and customers, services aftersupplied transmission by the adjustedadded or prospectively.deducted from Changesthe cost of in the the powerestimated plant future complex. costs Theor in amount the discount deducted rate fromapplied the are cost andgeneration ancillary companies charges. as Energy provided fee isfor recognized in their respective based on EPPAs actual withdelivery customers, of energy after generated transmission and addedof the poweror deducted plant complexfrom the costshall of not the exceed power its plant carrying complex. amount. The amount deducted from the cost madeand ancillary available charges. to customers Energy multiplied fee is recognized by the applicable based on tariffactual rate, delivery net of of adjustments, energy generated as agreed and of the power plant complex shall not exceed its carrying amount. madeupon betweenavailable the to parties.customers These multiplied adjustments by the consist applicable of discounts tariff rate, which net of depend adjustments, on the provisionsas agreed in If the decrease in the liability exceeds the carrying amount of the power plant complex, the excess theupon respective between EPPAs.the parties. Discounts These adjustmentsmay pertain consistto prompt of discounts payment discountwhich depend which on is thegiven provisions upon in Ifshall the bedecrease recognized in the immediately liability exceeds in the the profit carrying or loss. amount of the power plant complex, the excess the respective EPPAs. Discounts may pertain to prompt payment discount which is given upon shall be recognized immediately in the profit or loss. *SGVFSM006036* *SGVFSM006036* *SGVFSM006036* *SGVFSM006036*

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Contingent Liabilities. Contingent liabilities are not recognized in the consolidated financial statementsContingent butLiabilities. are disclosed Contingent in the notesliabilities to consolidated are not recognized financial in statements the consolidated unless financialthe possibility of statementsan outflow butof resources are disclosed embodying in the notes economic to consolidated benefits is financialremote. statementsContingent unlessassets theare possibilitynot of recognizedan outflow ofin resourcesthe consolidated embodying financial economic statements benefits but isare remote. disclosed Contingent in the notes assets to consolidatedare not financialrecognized statements in the consolidated when an inflow financial of economic statements benefits but are is disclosed probable. 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 businessContingent combination Liabilities isRecognized initially measured in a Business at its Combination.fair value. Subsequently,A contingent it liabilityis measured recognized at the higher in a businessof the amount combination that would is initially be recognized measured in accordanceat its fair value. with theSubsequently, requirements it isfor measured provisions at theabove higher or theof the amount amount initially that would recognized be recognized less, when in appropriate,accordance with cumulative the requirements amortization for recognizedprovisions abovein or accordancethe amount initiallywith the recognizedrequirements less, for when revenue appropriate, recognition. cumulative This account amortization is included recognized in “Other in long-termaccordance liabilities” with the requirements in the consolidated for revenue statements recognition. of financial This position.account is included in “Other long-term liabilities” in the consolidated statements of financial position. Related Parties EnterprisesRelated Parties and individuals that directly, or indirectly through one or more intermediaries, control or areEnterprises controlled and by individuals or under common that directly, control or withindirectly the Company, through one including or more holding intermediaries, companies, control or subsidiariesare controlled and by fellow or under subsidiaries, common control are related with parties the Company, of the Company. including Associates,holding companies, joint ventures andsubsidiaries individuals and owning, fellow subsidiaries, directly or indirectly, are related an parties interest of inthe the Company. voting power Associates, of the Company joint ventures that givesand individuals them significant owning, influence directly overor indirectly, the enterprise, an interest key management in the voting personnel, power of the including Company directors that andgives officers them significant of the Company influence and over close the members enterprise, of the key family management of these personnel, individuals, including and companies directors associatedand officers with of the these Company individuals and alsoclose constitute members relatedof the familyparties. of In these considering individuals, each and possible companies related entityassociated relationship, with these attention individuals is directed also constitute to the substance related parties.of the relationship In considering and noteach merely possible the related legal form.entity relationship, attention is directed to the substance of the relationship and not merely the legal form. Operating Revenues Recognized Over Time RevenueOperating from Revenues contracts Recognized with customers Over Time is recognized when services are transferred to the customer at theRevenue amount from that contracts amount thatwith reflects customers the considerationis recognized whento which services the Company are transferred expects to to the be customer entitled inat exchangethe amount for that those amount goods that or reflectsservices. the The consideration Company has to generallywhich the concludedCompany expectsthat it is tothe be principal entitled in itsexchange revenue for arrangements those goods becauseor services. it typically The Company controls has the generally services beforeconcluded transferring that it is themthe principal to the in customer.its revenue arrangements because it typically controls the services before transferring them to the customer. Water and Sewerage Services Revenue. Revenues from water and sewerage services are recognized uponWater supply and Sewerage of water Servicesto the customers. Revenue . Billings Revenues to fromcustomers water consist and sewerage of water, services environmental are recognized and sewerageupon supply charges. of water to the customers. Billings to customers consist of water, environmental and sewerage charges. Maynilad also charges its customers with one-time connection and installation fees upon initial set-up Mayniladof its service also connection. charges its customersThe connection with one-timeand installation connection fee is and payable installation upfront fees and upon is initial set-up non-refundable.of its service connection. The connection The connection and installation and installation fees are not fee separateis payable performance upfront and obligation is from thenon-refundable. water services The and connection hence, initially and installation recorded as fees a contract are not liability separate (under performance “Accounts obligation payable from and theother water current services liabilities” and hence, for the initially current recorded portion andas a “Othercontract long-term liability (underliabilities” “Accounts for the payablenon-current and portion).other current The liabilities” contract liability for the iscurrent subsequently portion andrecognized “Other long-termas revenue liabilities” over the contract for the non-currentterm. portion). The contract liability is subsequently recognized as revenue over the contract term. Toll Fees. Revenue from toll fees is recognized upon sale of toll tickets. Toll fees received in advance,Toll Fees .through Revenue transponders from toll fees or magnetic is recognized cards, upon is recognized sale of toll as tickets. income Toll upon fees the received holders’ in advance,availment through of the toll transponders road services, or magnetic net of sales cards, discounts. is recognized as income upon the holders’ availment of the toll road services, net of sales discounts. Power Sales. ‘Power revenue’ consist of energy fees for the energy and services supplied by the generationPower Sales companies. ‘Power revenue’as provided consist for in of their energy respective fees for EPPAs the energy with and customers, services aftersupplied transmission by the andgeneration ancillary companies charges. as Energy provided fee isfor recognized in their respective based on EPPAs actual withdelivery customers, of energy after generated transmission and madeand ancillary available charges. to customers Energy multiplied fee is recognized by the applicable based on tariffactual rate, delivery net of of adjustments, energy generated as agreed and madeupon betweenavailable the to parties.customers These multiplied adjustments by the consist applicable of discounts tariff rate, which net of depend adjustments, on the provisionsas agreed in theupon respective between EPPAs.the parties. Discounts These adjustmentsmay pertain consistto prompt of discounts payment discountwhich depend which on is thegiven provisions upon in the respective EPPAs. Discounts may pertain to prompt payment discount which is given upon *SGVFSM006036* *SGVFSM006036*

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payment within a specified period of time, volume discount which is computed based on the delivery ofpayment energy within generated a specified and made period available of time, to thevolume customers discount multiplied which is by computed a specific based rate agreedon the deliverywith the ofcustomer, energy generatedor load factor and discountmade available computed to the based customers on the differencemultiplied ofby the a specific adjusted rate tariff agreed rate withagreed the withcustomer, the customer or load factorfor the discount purpose computed of the discount. based onEnergy the difference fees derived of the from adjusted trading tariff operations rate agreed and recognizedwith the customer based on for actual the purpose delivery of ofthe such discount. electricity Energy at relevant fees derived trading from prices trading (see operationsNote 33). and recognized based on actual delivery of such electricity at relevant trading prices (see Note 33). Patient Services included in Hospital Revenue. Hospital revenue includes revenue from patient Patientservices Services which is included recognized in Hospital when services Revenue. are renderedHospital (seerevenue Note includes 32). revenue from patient services which is recognized when services are rendered (see Note 32). Rail Revenue. Rail revenue is generally recognized in profit or loss when the journey is completed or Railprovided. Revenue. Rail revenue is generally recognized in profit or loss when the journey is completed or provided. Logistics Revenue. Revenue from logistics services is recognized as services are rendered. Logistics Revenue. Revenue from logistics services is recognized as services are rendered. Operating Revenues Satisfied at a Point in Time RevenuesOperating fromRevenues the following Satisfied areat a recognized Point in Time at the point in time when control of the asset is transferredRevenues from to the the customer, following generally are recognized on delivery at the of point the goods: in time when control of the asset is transferred to the customer, generally on delivery of the goods: Coal Sales. Coal sales are recognized at point in time when the coal is delivered, the legal title has passedCoal Sales. to the Coal customer sales (seeare recognized Note 33). at point in time when the coal is delivered, the legal title has passed to the customer (see Note 33). Pharma sales included in Hospital Revenues. Revenue from pharmacy sales is recognized when medicinesPharma sales are includedcharged toin patientsHospital (see Revenues. Note 32).Revenue from pharmacy sales is recognized when medicines are charged to patients (see Note 32). Other Income TheOther Company Income applies guidance in the revenue standard related to the transfer of control and measurementThe Company of applies the transaction guidance price,in the includingrevenue standard the constraint related on to variablethe transfer consideration, of control andto evaluate themeasurement timing and of amount the transaction of the gain price, or loss including recognized. the constraint Included on in variable “Other income”consideration, are interest to evaluate income (seethe timing accounting and amount policy onof theFinancial gain or Instrumentsloss recognized.), dividend Included income in “Other (see accounting income” are policy interest on income Financial(see accounting Instruments policy), on rentalFinancial income Instruments (see accounting), dividend policy income section (see on accountingLeases), sale policy of investments on andFinancial other incidentalInstruments gain/income.), rental income (see accounting policy section on Leases), sale of investments and other incidental gain/income. Cost and Expenses Recognition Cost and expensesExpenses areRecognition recognized in profit or loss when a decrease in future economic benefit related toCost a decrease and expenses of an areasset recognized or an increase in profit of a orliability loss when has arisena decrease that canin future be measured economic reliably. benefit Cost related andto a expensesdecrease ofare an recognized asset or an in increase profit or of loss a liability on the basishas arisen of systematic that can beand measured rational allocationreliably. Cost proceduresand expenses when are recognizedeconomic benefits in profit are or expectedloss on the to basisarise overof systematic several accounting and rational periods allocation and the associationprocedures whenwith income economic can benefits only be arebroadly expected or indirectly to arise overdetermined; several accountingor immediately periods when and the expenditureassociation with produces income no canfuture only economic be broadly benefits or indirectly or when, determined; and to the extentor immediately that, future when economic benefitsexpenditure do not produces qualify no or future cease economicto qualify, benefits for recognition or when, in and the toCompany’s the extent consolidatedthat, future economic statement ofbenefits financial do notposition qualify as oran ceaseasset. to qualify, for recognition in the Company’s consolidated statement of financial position as an asset. Accounting Policy Applied for Leases Beginning January 1, 2019 Accounting Policy Applied for Leases Beginning January 1, 2019 Leases Leases Right-of-use assets. The Company recognizes right-of-use assets at the commencement date of the leaseRight-of-use (i.e., the assets. date theThe underlying Company asset recognizes is available right-of-use for use). assets ROU at assets the commencement are measured at date cost, of less the anylease accumulated (i.e., the date depreciation the underlying and assetimpairment is available losses, for and use). adjusted ROU assets for any are remeasurement measured at cost, of lease less liabilities.any accumulated The cost depreciation of ROU assets and impairmentincludes the losses,amount and of leaseadjusted liabilities for any recognized, remeasurement initial of direct lease costsliabilities. incurred, The costand leaseof ROU payments assets includesmade at theor before amount the of commencement lease liabilities daterecognized, less any initial lease direct incentivescosts incurred, received. and lease Unless payments the Company made at is orreasonably before the certain commencement to obtain ownership date less any of the lease leased asset incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset *SGVFSM006036* *SGVFSM006036*

282 - 174 - - 174 - at the end of the lease term, the recognized ROU assets are depreciated on a straight-line basis over theat the shorter end of of the its leaseestimated term, useful the recognized life and the ROU lease assets term. are ROU depreciated assets are on subject a straight-line to impairment. basis over the shorter of its estimated useful life and the lease term. ROU assets are subject to impairment. Lease liabilities. At the commencement date of the lease, the Company recognizes lease liabilities Leasemeasured liabilities. at the presentAt the valuecommencement of lease payments date of theto be lease, made the over Company the lease recognizes term. The lease lease liabilities payments includemeasured fixed at the payments present (includingvalue of lease in-substance payments fixed to be payments)made over lessthe leaseany lease term. incentives The lease receivable, payments includevariable fixed lease paymentspayments (includingthat depend in-substance on an index fixed or a rate,payments) and amounts less any expected lease incentives to be paid receivable, under residualvariable valuelease paymentsguarantees. that The depend lease paymentson an index also or includea rate, and the amountsexercise expectedprice of a to purchase be paid optionunder reasonablyresidual value certain guarantees. to be exercised The lease by payments the Company also includeand payments the exercise of penalties price of for a terminatingpurchase option a lease, reasonablyif the lease certainterm reflects to be exercisedthe Company by the exercising Company the and option payments to terminate. of penalties The variablefor terminating lease payments a lease, thatif the do lease not dependterm reflects on an the index Company or a rate exercising are recognized the option as expense to terminate. in the periodThe variable on which lease the payments event or conditionthat do not that depend triggers on anthe index payment or a occurs.rate are recognized as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Company uses the incremental borrowing rate atIn thecalculating lease commencement the present value date of if leasethe interest payments, rate theimplicit Company in the uses lease the is incrementalnot readily determinable. borrowing rate Afterat the thelease commencement commencement date, date the if amountthe interest of lease rate implicitliabilities in is the increased lease is notto reflect readily the determinable. accretion of Afterinterest the and commencement reduced for the date, lease the payments amount ofmade. lease Inliabilities addition, is theincreased carrying to amountreflect theof leaseaccretion liabilities of isinterest remeasured and reduced if there for is thea modification, lease payments a change made. in In the addition, lease term, the carryinga change amount in the in-substance of lease liabilities fixed leaseis remeasured payments if or there a change is a modification, in the assessment a change to purchase in the lease the term,underlying a change asset. in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. Short-term leases and leases of low-value assets. The Company applies the short-term lease recognitionShort-term leasesexemption and leases(i.e., those of low-value leases that assets. have Thea lease Company term of applies 12 months the short-termor less from lease the commencementrecognition exemption date and (i.e., do thosenot contain leases athat purchase have a option). lease term It also of 12 applies months the or low-value less from assetsthe recognitioncommencement exemption. date and Lease do not payments contain a on purchase short-term option). leases It andalso leases applies of the low-value low-value assets assets are recognitionrecognized asexemption. expense on Lease a straight-line payments basison short-term over the leaseleases term. and leases Beginning of low-value January assets1, 2019, are ‘Rentals’recognized under as expense the ‘Costs on a of straight-line sales and services’ basis overand the ‘General lease term. and Beginningadministrative January expenses’ 1, 2019,accounts ‘Rentals’include only under those the leases‘Costs that of salesare short-term and services’ and ofand low-value ‘General (seeand Notesadministrative 21 and 22). expenses’ accounts include only those leases that are short-term and of low-value (see Notes 21 and 22). Significant judgement in determining the lease term of contracts with renewal options. The Company determinesSignificant judgementthe lease term in determining as the non-cancellable the lease term term of of contracts the lease, with together renewal with options. any periods The Companycovered bydetermines an option the to leaseextend term the aslease the ifnon-cancellable it is reasonably term certain of the to belease, exercised, together or with any anyperiods periods covered covered by byan optionan option to terminateto extend thethe lease,lease ifif itit isis reasonably certaincertain tonot be to exercised, be exercised. or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has the option, under some of its leases to lease the assets for additional terms. The CompanyThe Company applies has judgement the option, in under evaluating some ofwhether its leases it is to reasonably lease the assets certain for to additional exercise the terms. option The to renew.Company That applies is, it considersjudgement all in relevant evaluating factors whether that createit is reasonably an economic certain incentive to exercise for it theto exercise option to the renew.renewal. That After is, theit considers commencement all relevant date, factors the Company that create reassesses an economic the lease incentive term if for there it to is exercise a the significantrenewal. After event the or commencement change in circumstances date, the Company that is within reassesses its control the leaseand affects term if its there ability is a to exercise (orsignificant not to exercise) event or thechange option in circumstancesto renew (e.g., thata change is within in business its control strategy). and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy). Accounting Policy Applied for Leases until December 31, 2018 Accounting Policy Applied for Leases until December 31, 2018 Leases TheLeases determination of whether an arrangement is or contains a lease is based on the substance of the Thearrangement determination at inception of whether date ofan whetherarrangement the fulfillment is or contains of the a lease arrangement is based ison dependent the substance on the of usethe of arrangementa specific asset at inception(or assets) date and ofthe whether arrangement the fulfillment conveys aof right the arrangementto use the asset is dependent(or assets), on even the ifuse that of aasset specific is (or asset those (or assets assets) are) and not the explicitly arrangement specified conveys in an a arrangement. right to use the A assetreassessment (or assets), is madeeven ifafter that assetinception is (or of those the lease assets only are) if not one explicitly of the following specified applies: in an arrangement. 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; a.b. ThereA renewal is a changeoption isin exercisedcontractual or terms,extension other granted, than a renewalunless the or termextension of the of renewal the agreement; or extension b. Awas renewal initially option included is exercised in the lease or extension term; granted, unless the term of the renewal or extension was initially included in the lease term; *SGVFSM006036* *SGVFSM006036*

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c. There is a change in the determination of whether the fulfillment is dependent on a specified c. asset;There oris a change in the determination of whether the fulfillment is dependent on a specified d. asset;There oris a substantial change to the asset. 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 changeWhere ain reassessment circumstances is made,gave rise lease to theaccounting reassessment shall commencefor scenarios or (a),cease (c) from or (d) the and date the when date theof changerenewal in or circumstances extension period gave for rise scenario to the reassessment(b). 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 classifiedLeases where as operating the lessor leases. retains Rental substantially income all under the risksoperating and benefits leases is of accounted ownership for of in the accordance assets are classifiedwith the terms as operating of the leases leases. and Rental generally income on a under straight-line operating basis leases and is is accounted included under for in “Otheraccordance income”with the termsin the ofconsolidated the leases and statement generally of comprehensiveon a straight-line income. basis and Initial is included direct costs under incurred “Other in negotiatingincome” in theoperating consolidated leases arestatement added ofto thecomprehensive carrying amount income. of the Initial leased direct asset costs and incurredrecognized in over thenegotiating lease term operating on the sameleases basis are addedas rental to theincome. carrying Contingent amount ofrents the areleased recognized asset and as recognized income in theover periodthe lease in termwhich on they the aresame earned. basis as rental income. Contingent rents are recognized as income in the period in which they are earned. Operating lease payments, net of aggregate of benefit of lease incentives, are recognized as income in profitOperating or loss lease on payments,a straight-line net ofbasis aggregate over the of lease benefit term. of lease incentives, are recognized as income in profit or loss on a straight-line basis over the lease term. Retirement and Other Benefits Retirement and Other Benefits Defined Contribution Plan. Certain subsidiaries of the group each maintain a defined contribution planDefined that Contribution covers all regular Plan. full-timeCertain employees.subsidiaries ofUnder the group the defined each maintain contribution a defined plan, fixedcontribution contributionsplan that covers by allthe regular employer full-time are based employees. on the employees’ Under the monthlydefined contribution salaries. However, plan, fixed entities operatingcontributions in the by Philippines, the employer are are covered based onunder the RAemployees’ 7641 which monthly provides salaries. for qualified However, employees entities a definedoperating benefit in the minimum Philippines, guarantee. are covered The under defined RA benefit 7641 which minimum provides guarantee for qualified is equivalent employees to a a certaindefined percentage benefit minimum of the monthly guarantee. salary The payable defined to benefit an employee minimum at normal guarantee retirement is equivalent age with to a the requiredcertain percentage credited years of the of monthly service basedsalary onpayable the provisions to an employee of RA 7641.at normal retirement age with the required credited years of service based on the provisions of RA 7641. Accordingly, these entities account for the retirement obligation under the higher of the defined benefitAccordingly, obligation these relating entities to account the minimum for the retirementguarantee andobligation the obligation under the arising higher from of the the defined defined contributionbenefit obligation plan. relating to the minimum guarantee and the obligation arising from the defined contribution plan. For the defined benefit minimum guarantee plan, the liability is determined based on the present valueFor the of defined the excess benefit of the minimum projected guarantee defined benefitplan, the obligation liability isover determined the projected based defined on the presentcontribution planvalue obligation of the excess at the of endthe projectedof the reporting defined period. benefit The obligation defined over benefit the obligationprojected definedis calculated contribution annuallyplan obligation by a qualified at the end independent of the reporting actuary period. using theThe projected defined benefit unit credit obligation method. is calculatedThe Company determinesannually by the a qualified net interest independent expense (income) actuary using on the the net projected defined benefitunit credit liability method. (asset) The for Company the period bydetermines applying the the net discount interest rate expense used to (income) measure on the the defined net defined benefit benefit obligation liability at the (asset) beginning for the of period the annualby applying period the to discount the then ratenet definedused to benefitmeasure liability the defined (asset), benefit taking obligation into account at the any beginning changes ofin thethe netannual defined period benefit to the liability then net (asset) defined during benefit the liability period as(asset), a result taking of contributions into account and any benefit changes payments. in the Netnet definedinterest benefitexpense liability (income) (asset) and otherduring expenses the period (income) as a result related of contributions to the defined and benefit benefit plan payments. are recognizedNet interest in expense profit or(income) loss. and other expenses (income) 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 contributionThe defined contributionassets upon whichliability, the on defined the other contribution hand, is measured benefits depend, at the fair with value an adjustmentof the defined for margincontribution on asset assets returns, upon ifwhich any, wherethe defined this is contribution reflected in benefitsthe defined depend, contribution with an benefits.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 returnRemeasurements on plan assets of the (excluding net defined interest) benefit and liability, the effect which of the comprise asset ceiling actuarial (if any,gains excluding and losses, interest), the arereturn recognized on plan assetsimmediately (excluding in OCI. interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. *SGVFSM006036* *SGVFSM006036*

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When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit thatWhen relates the benefits to past serviceof a plan or are the changed gain or lossor when on curtailment a plan is curtailed, is recognized the resulting immediately change in inprofit benefit or loss.that relates The Company to past service recognizes or the gains gain or losslosses on on curtailment the settlement is recognized of a defined immediately benefit plan in profitwhen orthe settlementloss. The Company occurs. recognizes gains or losses on the settlement of a defined benefit plan when the settlement occurs. Defined Benefit Plan. Certain subsidiaries have funded, noncontributory retirement benefit plans coveringDefined Benefit all their Plan. eligibleCertain regular subsidiaries employees. have The funded, net defined noncontributory benefit liability retirement or asset benefit is the plans aggregatecovering all of theirthe present eligible value regular of theemployees. defined benefit The net obligation defined benefit at the endliability of the or reporting asset is the period reducedaggregate by of the the fair present value value of plan of assetsthe defined (if any), benefit adjusted obligation for any at effect the end of oflimiting the reporting a net defined period benefitreduced asset by the to fairthe assetvalue ceiling. of plan assetsThe asset (if any), ceiling adjusted is the presentfor any valueeffect ofof anylimiting economic a net definedbenefits availablebenefit asset in the to theform asset of refundsceiling. from The theasset plan ceiling or reductions is the present in future value contributions of any economic to the benefits plan. 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 projectedThe cost of unit providing credit method. 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 benefitDefined liability benefit orcosts asset; comprise and (c) the remeasurements following: (a) of service net defined cost; (b)benefit net interest liability on or the asset. net defined benefit liability or asset; and (c) remeasurements of net defined benefit liability or asset. Service costs which include current service costs, past service costs and gains or losses on non-routineService costs settlements which include are recognized current service as expense costs, past in profit service or loss.costs Pastand gainsservice or costslosses are on recognized whennon-routine plan amendment settlements or are curtailment recognized occurs. as expense These in amountsprofit or areloss. calculated Past service periodically costs are by recognized independentwhen plan amendment qualified actuaries. 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 definedNet interest benefit on theliability net defined or asset benefit that arises liability from or the asset passage is the ofchange time whichduring is the determined period in theby applyingnet thedefined discount benefit rate liability based on or governmentasset that arises bonds from to the netpassage defined of timebenefit which liability is determined or asset. byNet applying interest onthe thediscount net defined rate based benefit on liabilitygovernment or asset bonds is recognized to the net defined as expense benefit or incomeliability in or profit asset. or Net loss. 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 effectRemeasurements of the asset comprisingceiling (excluding actuarial net gains interest and onlosses, defined return benefit on plan liability) assets areand recognized any change in the immediatelyeffect of the assetin OCI ceiling in the (excluding period in whichnet interest they arise.on defined These benefit remeasurements liability) are are recognized not reclassified to profitimmediately or loss inin OCIsubsequent in the period periods. in which they arise. These remeasurements are not reclassified to profit or loss in subsequent periods. Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies.Plan assets Plan are assetsassets arethat not are available held by ato long-term the creditors employee of the benefitCompany, fund nor or canqualifying they be insurancepaid directly topolicies. the Company. Plan assets Fair are value not ofavailable plan assets to the is creditorsbased on ofmarket the Company, price information. nor can they When be paidno market directly priceto the is Company. available, Fairthe fairvalue value of plan of plan assets assets is based is estimated on market by discountingprice information. expected When future no cash market flows usingprice isa discountavailable, rate the that fair reflectsvalue of both plan the assets risk isassociated estimated with by discounting the plan assets expected and the future maturity cash orflows expectedusing a discount disposal rate date that of reflectsthose assets both (or,the riskif they associated have no withmaturity, the plan the assetsexpected and period the maturity until the or settlementexpected disposal of the related date of obligations). those assets (or,If the if fairthey value have ofno thematurity, plan assets the expected is higher period than the until present the valuesettlement of the of defined the related benefit obligations). obligation, If the the measurement fair value of ofthe the plan resulting assets isdefined higher benefitthan the asset present is limitedvalue of to the the defined present benefit value ofobligation, economic the benefits measurement available of in the the resulting form of definedrefunds benefitfrom the asset plan is or reductionslimited to the in futurepresent contributions value of economic to the plan. benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The Company’s right to be reimbursed of some or all of the expenditure required to settle a defined benefitThe Company’s obligation right is recognized to be reimbursed as a separate of some asset or allat fairof the value expenditure when and required only when to settle reimbursement a defined is virtuallybenefit obligation certain. 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 terminationTermination of Benefit an employee’s. Termination employment benefits asare a employeeresult of either benefits an entity’sprovided decision in exchange to terminate for the an employee’stermination employmentof an employee’s before employment the normal asretirement a result of date either or an an employee’s entity’s decision decision to terminate to accept an offeremployee’s of benefits employment in exchange before for the the normaltermination retirement of employment. date or an employee’s decision to accept an offer of benefits in exchange for the termination of employment. *SGVFSM006036*

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A liability and expense for a termination benefit is recognized at the earlier of when the entity can no longerA liability withdraw and expense the offer for of a thosetermination benefits benefit and when is recognized the entity at recognizes the earlier related of when restructuring the entity can costs. no Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, Initiallonger recognitionwithdraw the and offer subsequent of those changesbenefits toand termination when the entity benefits recognizes are measured related in restructuringaccordance with costs. and any expense not yet recognized for the award is recognized immediately. This includes any theInitial nature recognition of the employee and subsequent benefit, changes as either to post-employment termination benefits benefits, are measured short-term in employeeaccordance benefits, with award where non-vesting conditions within the control of either the entity or the counterparty are not orthe other nature long-term of the employee employee benefit, benefits. as either post-employment benefits, short-term employee benefits, met. However, if a new award is substituted for the cancelled award, and designated as a replacement or other long-term employee benefits. award on the date that it is granted, the cancelled and new awards are treated as if they were Employee Leave Entitlement. Employee entitlements to annual leave are recognized as a liability modifications of the original award, as described in the previous paragraph. Employeewhen they Leaveare accrued Entitlement to the. employees. Employee entitlementsThis is measured to annual based leave on undiscounted are recognized amount as a liability of liability forwhen leave they expected are accrued to be to settled the employees. wholly before This twelve is measured months based after on the undiscounted end of the annual amount reporting of liability The dilutive effect of outstanding options is reflected as additional share dilution in the computation periodfor leave in expectedwhich the to employees be settled renderedwholly before the related twelve services. months after the end of the annual reporting of earnings per share. period in which the employees rendered the related services. ESOP RSUP TheESOP Company has an ESOP for eligible executives to receive remuneration in the form of The Company has an RSUP for eligible executives of the Company and subsidiaries to receive Theshare-based Company payment has an transactions,ESOP for eligible whereby executives executives to receive render remunerationservices in exchange in the form for theof share remuneration in the form of share-based payment transactions, whereby executives render services in share-basedoption. payment transactions, whereby executives render services in exchange for the share exchange for the share awards. option. The cost of equity-settled transactions with employees is measured by reference to the fair value of The cost of equity-settled transactions (cost of RSUP) with employees is measured by reference to the Thethe stock cost ofoptions equity-settled at the date transactions at which they with are employees granted. isFair measured value is by determined reference usingto the anfair value of fair value of the shares at the date at which they are granted. Fair value is determined based on the theoption-pricing stock options model, at the further date at details which of they which are granted.are set forth Fair in value Note is 28. determined In valuing using equity-settled an prevailing closing market price of the shares, further details of which are set forth in Note 28. option-pricingtransactions, no model, account further is taken details of any of whichperformance are set conditions,forth in Note other 28. than In valuing conditions equity-settled linked to the transactions,share price of no the account Parent isCompany taken of (“marketany performance conditions”). conditions, other than conditions linked to the The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, share price of the Parent Company (“market conditions”). over the period in which the performance and/or service conditions are fulfilled, ending on the date The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, on which the relevant employees become fully entitled to the award (“vesting date”). The cumulative Theover costthe periodof equity-settled in which the transactions performance is recognized, and/or service together conditions with a are corresponding fulfilled, ending increase on the in dateequity, cost of RSUP recognized for equity-settled transactions at each end of reporting period until the overon which the period the relevant in which employees the performance become and/orfully entitled service to conditions the award are(“vesting fulfilled, date”). ending The on cumulative the date vesting date reflects the extent to which the vesting period has expired and the Company’s best onexpense which recognized the relevant for employees equity-settled become transactions fully entitled at each to theend award of reporting (“vesting period date”). until The the cumulativevesting estimate at that date of the number of awards that will ultimately vest. The profit or loss credit or expensedate reflects recognized the extent for toequity-settled which the vesting transactions period athas each expired end of and reporting the Company’s period until best the estimate vesting at expense for a period represents the movement in cumulative expense recognized as at the beginning datethat datereflects of the the number extent toof which awards the that vesting will ultimately period has vest. expired The and profit the orCompany’s loss credit best or expense estimate for at a and end of that period and is recognized as employee benefits. thatperiod date represents of the number the movement of awards in that cumulative will ultimately expense vest. recognized The profit as ator the loss beginning credit or andexpense end offor that a period representsand is recognized the movement as employee in cumulative benefits. expense recognized as at the beginning and end of that No expense is recognized for awards that do not ultimately vest. The dilutive effect of outstanding period and is recognized as employee benefits. options is reflected as additional share dilution in the computation of earnings per share No expense is recognized for awards that do not ultimately vest, except for awards where vesting is (see Note 27). Noconditional expense uponis recognized a market forcondition, awards thatwhich do are not treated ultimately as vesting vest, except irrespective for awards of whether where orvesting not the is conditionalmarket condition upon ais market satisfied, condition, provided which that all are other treated performance as vesting and/orirrespective service of conditions whether or are not the Long-term Employee Benefits marketsatisfied. condition is satisfied, provided that all other performance and/or service conditions are The Company’s LTIP grants cash incentives to eligible key executives of the Parent Company and satisfied. certain subsidiaries. Liability under the LTIP is determined using the projected unit credit method. When the terms of an equity-settled award are modified, the minimum expense recognized is the Employee benefit costs include current service costs, interest cost, actuarial gains and losses, and past Whenexpense the as terms if the of terms an equity-settled had not been awardmodified, are modified,if the original the minimumterms of the expense award recognized are met. If is the the service costs. Past service costs and actuarial gains and losses are recognized immediately in profit or expensemodification as if increasesthe terms thehad fair not valuebeen modified,of the equity if the instruments original terms granted, of the as awardmeasured are immediatelymet. If the loss. modificationbefore and after increases the modification, the fair value the of entity the equity shall include instruments the incremental granted, as fairmeasured value grantedimmediately in the beforemeasurement and after of thethe modification,amount recognized the entity for servicesshall include received the incrementalas consideration fair valuefor the granted equity in the Foreign Currency-Denominated Transactions and Translations measurementinstruments granted. of the amount The incremental recognized fair for value services granted received is the as difference consideration between for the the equity fair value of the The consolidated financial statements are presented in Philippine Peso, which is the Parent instrumentsmodified equity granted. instrument The incremental and that of fairthe valueoriginal granted equity is instrument, the difference both between estimated the as fair at valuethe date of ofthe Company’s functional and presentation currency. All subsidiaries and associates evaluate their modifiedthe modification. equity instrument If the modification and that of occurs the original during equity the vesting instrument, period, both the incrementalestimated as fair at the value date of primary economic and operating environment and determine their functional currency. Items thegranted modification. is included If in the the modification measurement occurs of the during amount the recognized vesting period, for services the incremental received overfair value the included in the consolidated financial statements of each entity are initially measured using that grantedperiod from is included the modification in the measurement date until theof the date amount when therecognized modified for equity services instruments received vest,over inthe functional currency. periodaddition from to the the amount modification based ondate the until grant the date date fair when value the of modified the original equity equity instruments instruments, vest, whichin is additionrecognized to theover amount the remainder based on of the the grant original date vesting fair value period. of the If originalthe modification equity instruments, occurs after which vesting is Transactions and Balances. Transactions in foreign currencies are initially recorded in the functional recognizeddate, the incremental over the remainder fair value ofgranted the original is recognized vesting immediately,period. If the modificationor over the vesting occurs period after vesting if the currency rate of exchange ruling at the date of transaction. Monetary assets and liabilities date,employee the incremental is required fairto complete value granted an additional is recognized period immediately, of service before or over becoming the vesting unconditionally period if the denominated in foreign currencies are translated at the functional currency rate of exchange ruling at employeeentitled to isthose required modified to complete equity instruments. an additional period of service before becoming unconditionally the end of reporting period. All differences are taken to profit or loss except when qualified as entitled to those modified equity instruments. adjustment to borrowing costs, and as discussed below for Maynilad.

*SGVFSM006036* *SGVFSM006036*

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Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, Whereand any an expense equity-settled not yet awardrecognized is cancelled, for the award it is treated is recognized as if it had immediately. vested on the This date includes of cancellation, any andaward any where expense non-vesting not yet recognized conditions for within the awardthe control is recognized of either immediately.the entity or the This counterparty includes any are not awardmet. However, where non-vesting if a new award conditions is substituted within the for control the cancelled of either award, the entity and designatedor the counterparty as a replacement are not met.award However, on the date if athat new it isaward granted, is substituted the cancelled for the and cancelled new awards award, are andtreated designated as if they as were a replacement awardmodifications on the date of the that original it is granted, award, the as describedcancelled inand the new previous awards paragraph. 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 Theof earnings dilutive per effect share. of outstanding options is reflected as additional share dilution in the computation of earnings per share. RSUP RSUPThe Company has an RSUP for eligible executives of the Company and subsidiaries to receive Theremuneration Company in has the an form RSUP of share-basedfor eligible executivespayment transactions, of the Company whereby and subsidiariesexecutives render to receive services in remunerationexchange for thein the share form awards. of share-based payment transactions, whereby executives render services in exchange for the share awards. The cost of equity-settled transactions (cost of RSUP) with employees is measured by reference to the Thefair valuecost of of equity-settled the shares at thetransactions date at which (cost they of RSUP) are granted. with employees Fair value is is measured determined by basedreference on the to the fairprevailing value of closing the shares market at theprice date of atthe which shares, they further are granted. details of Fair which value are is set determined forth in Note based 28. on the prevailing closing market price of the shares, further details of which are set forth in Note 28. The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, Theover costthe periodof equity-settled in which the transactions performance is recognized, and/or service together conditions with a are corresponding fulfilled, ending increase on the in dateequity, overon which the period the relevant in which employees the performance become and/orfully entitled service to conditions the award are(“vesting fulfilled, date”). ending The on cumulative the date oncost which of RSUP the relevant recognized employees for equity-settled become fully transactions entitled to at the each award end of(“vesting reporting date”). period The until cumulative the costvesting of RSUPdate reflects recognized the extent for equity-settled to which the transactionsvesting period at eachhas expired end of reportingand the Company’s period until best the vestingestimate date at that reflects date ofthe the extent number to which of awards the vesting that will period ultimately has expired vest. andThe theprofit Company’s or loss credit best or estimateexpense forat that a period date ofrepresents the number the ofmovement awards that in cumulative will ultimately expense vest. recognized The profit as or at loss the credit beginning or expenseand end offor that a period period represents and is recognized the movement as employee in cumulative benefits. expense recognized as at the beginning and end of that period and is recognized as employee benefits. No expense is recognized for awards that do not ultimately vest. The dilutive effect of outstanding Nooptions expense is reflected is recognized as additional for awards share that dilution do not in ultimately the computation vest. The of earningsdilutive effectper share of outstanding options(see Note is 27).reflected as additional share dilution in the computation of earnings per share (see Note 27). Long-term Employee Benefits Long-termThe Company’s Employee LTIP Benefitsgrants cash incentives to eligible key executives of the Parent Company and Thecertain Company’s subsidiaries. LTIP Liability grants cash under incentives the LTIP to is eligible determined key executivesusing the projected of the Parent unit creditCompany method. and certainEmployee subsidiaries. benefit costs Liability include under current the service LTIP is costs, determined interest using cost, theactuarial projected gains unit and credit losses, method. and past Employeeservice costs. benefit Past costs service include costs current and actuarial service gains costs, and interest losses cost, are recognizedactuarial gains immediately and losses, in andprofit past or serviceloss. costs. Past service costs and actuarial gains and losses are recognized immediately in profit or loss. Foreign Currency-Denominated Transactions and Translations ForeignThe consolidated Currency-Denominated financial statements Transactions are presented and Translations in Philippine Peso, which is the Parent TheCompany’s consolidated functional financial and statementspresentation are currency. presented All in subsidiariesPhilippine Peso, and associateswhich is the evaluate Parent their Company’sprimary economic functional and andoperating presentation environment currency. and Alldetermine subsidiaries their functionaland associates currency. evaluate Items their primaryincluded economic in the consolidated and operating financial environment statements and of determine each entity their are functionalinitially measured currency. using Items that includedfunctional in currency. 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 currencyTransactions rate ofand exchange Balances. ruling Transactions at the date in of foreign transaction. currencies Monetary are initially assets recordedand liabilities in the functional currencydenominated rate inof foreignexchange currencies ruling at are the translated date of transaction. at the functional Monetary currency assets rate and of liabilities exchange ruling at denominatedthe end of reporting in foreign period. currencies All differences are translated are taken at the to functional profit or losscurrency except rate when of exchange qualified rulingas at theadjustment end of reporting to borrowing period. costs, All and differences as discussed are taken below to for profit Maynilad. or loss except when qualified as adjustment to borrowing costs, and as discussed below for Maynilad. *SGVFSM006036* *SGVFSM006036*

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Foreign exchange differentials relating to the restatement of concession fees payable are deferred in Foreignview of theexchange automatic differentials reimbursement relating mechanism to the restatement as approved of concession by the MWSS fees payable Board of are Trustees deferred under in viewAmendment of the automatic No. 1 of thereimbursement Concession Agreementmechanism ofas Maynilad.approved by Net the foreign MWSS exchange Board of losses Trustees are under Amendmentrecognized as No. deferred 1 of the FCDA Concession and net Agreement foreign exchange of Maynilad. gains are Net recognized foreign exchange as “Deferred losses FCDA are recognizedcharges” under as deferred “Other noncurrentFCDA and assets”net foreign in the exchange consolidated gains statements are recognized of financial as “Deferred position. FCDA The charges”write-off underof the “Otherdeferred noncurrent FCDA or assets”reversal in of the deferred consolidated credits statements will be made of financialupon determination position. The of the write-offnew base offoreign the deferred exchange FCDA rate oras reversalapproved of by deferred the Regulatory credits will Office be made(RO) uponduring determination every Rate of the newRebasing base foreignexercise, exchange unless indication rate as approved of impairment by the Regulatoryof the deferred Office FCDA (RO) would during be every evident Rate at an Rebasingearlier date. 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 Foreigncredited exchangeor charged differentials to operations. 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 Groupinto Philippine Companies. Peso Onat the consolidation, rate of exchange the assets prevailing and liabilities at the reporting of foreign date operations and their arestatements translated of intocomprehensive Philippine Pesoincome at theare ratetranslated of exchange at exchange prevailing rates at prevailing the reporting at the date dates and of their the transactions.statements of comprehensiveThe exchange differences income are arising translated on translation at exchange for rates consolidation prevailing areat therecognized dates of thein OCI. transactions. On disposal Theof a foreignexchange operation, differences the arisingcomponent on translation of OCI relating for consolidation to that particular are recognized foreign operation in OCI. isOn disposal ofrecognized a foreign in operation, profit or theloss. component of OCI relating to that particular foreign operation is recognized in profit or loss. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the Anycarrying goodwill amounts arising of assets on the and acquisition liabilities of arising a foreign on theoperation acquisition and anyare treatedfair value as assetsadjustments and liabilities to the carryingof the foreign amounts operation of assets and and translated liabilities at thearising spot on rate the of acquisition exchange atare the treated reporting as assets date. and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date. Income Taxes Income Taxes Current Tax. Current tax assets and liabilities for the current and prior periods are measured at the amountCurrent expectedTax. Current to be tax recovered assets and from liabilities or paid forto the the tax current authority. and prior The periods tax rates are and measured tax laws at used the to amountcompute expected the amount to be are recovered those that from are enactedor paid toor thesubstantively tax authority. enacted, The taxat the rates reporting and tax date laws where used to computethe Company the amount operates are and those generates that are taxable enacted income. 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 Currentprofit or income loss. Management tax relating toperiodically items recognized evaluates directly positions in equity taken isin recognized the tax returns in equity with respectand not to in profitsituations or loss. in which Management applicable periodically tax regulations evaluates are subject positions to interpretation taken in the tax and returns establishes with respectprovisions to situationswhere appropriate. 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 Deferredthe tax bases Tax. of Deferred assets and tax liabilities is provided and using their carryingthe liability amounts method for on financial temporary reporting differences purposes between at the thereporting tax bases date. 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 Deferreddeferred taxtax liabilityliabilities arises are recognizedfrom the initial for all recognition taxable temporary of goodwill differences, or of an assetexcept or (a)liability where in the a deferredtransaction tax that liability is not arises a business from thecombination initial recognition and, at the of time goodwill of the or transaction, of an asset affectsor liability neither in a the transactionaccounting thatincome is not nor a taxablebusiness income; combination and (b) and, in respectat the time of taxable of the transaction,temporary differences affects neither associated the accountingwith investments income in norsubsidiaries, taxable income; associates and and(b) injoint respect ventures, of taxable where temporary the timing differences of the reversal associated of the withtemporary investments differences in subsidiaries, can be controlled associates and and it is joint probable ventures, that thewhere temporary the timing differences of the reversal will not of the temporaryreverse in thedifferences foreseeable can future.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 Deferredunused tax tax credits assets from are recognized excess minimum for all deductiblecorporate income temporary tax (MCIT)differences, over carryforward the regular corporate benefits of unusedincome taxtax credits(RCIT) from and unusedexcess minimumnet operating corporate loss carryover income tax(NOLCO), (MCIT) toover the the extent regular that corporateit is probable incomethat taxable tax (RCIT)income andwill unused be available net operating against whichloss carryover the deductible (NOLCO), temporary to the differencesextent that itand is probable that taxable income will be available against which the deductible temporary differences and *SGVFSM006036* *SGVFSM006036*

288 - 180 - - 180 - carryforward benefits of unused tax credits from MCIT and NOLCO can be utilized. Deferred tax, however,carryforward is not benefits recognized of unused when tax (a) credits it arises from from MCIT the initial and NOLCO recognition can ofbe an utilized. asset or Deferred liability intax, a however,transaction is thatnot isrecognized not a business when combination (a) it arises from and, theat the initial time recognition of the transaction, of an asset affects or liability neither inthe a accountingtransaction incomethat is not nor a taxablebusiness income combination or loss; and, and at(b) the in time respect of theof deductibletransaction, temporary affects neither differences the associatedaccounting with income investments nor taxable in subsidiaries,income or loss; associates and (b) andin respect interest of in deductible joint ventures, temporary deferred differences tax associatedassets are recognized with investments only to in the subsidiaries, extent that itassociates is probable and that interest the temporary in joint ventures, differences deferred will reversetax inassets the foreseeableare recognized future only and to taxablethe extent income that it will is probable be available that againstthe temporary which thedifferences temporary will differences reverse canin the be foreseeable utilized. 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 theThe extent carrying that amount it is no of longer deferred probable tax assets that sufficientis reviewed taxable at each income end of will reporting be available period to and allow reduced all or to partthe extent of the thatdeferred it is no tax longer asset toprobable be utilized. that sufficient Unrecognized taxable deferred income tax will assets be available are reassessed to allow at eachall or endpart ofof thethe reportingdeferred taxperiod asset and to beare utilized. recognized Unrecognized to the extent deferred that it has tax become assets are probable reassessed that atfuture each endtaxable of the income reporting will allowperiod the and deferred are recognized tax assets to tothe be extent recovered. 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 whenDeferred the taxasset assets is realized and liabilities or the liability are measured is settled, at the based tax onrates tax that rates are and expected tax laws to thatapply have to thebeen year whenenacted the or asset substantively is realized enacted or the liabilityat the reporting is settled, date. 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 itemsrelating are to recognized items recognized in correlation outside to profit the underlying or loss is recognized transaction outside either inprofit OCI or or loss. directly Deferredin equity. 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 currentDeferred tax tax assets assets against and deferred current taxtax liabilitiesliabilities areand offset the deferred if a legally taxes enforceable relate to the right same exists taxable to offset entity andcurrent the taxsame assets tax authority.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 recognitionTax benefits at acquired that date, as are part recognized of a business subsequently combination, if new but informationnot satisfying about the criteriafacts and for separate circumstancesrecognition at thatchange. date, Theare recognizedadjustment subsequentlyis either treated if newas a informationreduction in aboutgoodwill facts (as and long as it does notcircumstances exceed goodwill) change. if Theit was adjustment incurred duringis either the treated measurement as a reduction period in or goodwill recognized (as inlong profit as itor does loss. not exceed goodwill) if it was incurred during the measurement period or recognized in profit or loss. Sales Tax Revenues,Sales Tax expenses and assets are recognized net of the amount of sales tax (commonly referred to as value-addedRevenues, expenses tax), except: and assets are recognized net of the amount of sales tax (commonly referred to as value-added tax), except: ƒ When the sales tax incurred on a purchase of assets or services is not recoverable from the tax ƒ authority,When the salesin which tax incurredcase the saleson a purchasetax is recognized of assets as or part services of the is cost not recoverableof acquisition from of thethe asset tax or asauthority, part of thein which expense case item, the assales applicable tax is recognized as part of the cost of acquisition of the asset or ƒ asWhen part receivables of the expense and item,payables as applicable are stated with the amount of sales tax included ƒ When receivables and payables are stated with the amount of sales tax included The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part ofThe “Other net amount current of assets” sales tax or “Accountsrecoverable payable from, or and payable other currentto, the taxation liabilities” authority in the consolidatedis included as part statementof “Other currentof financial assets” position. or “Accounts payable and other current liabilities” in the consolidated statement of financial position. Earnings Per Share BasicEarnings earnings Per Share per share is calculated by dividing the net income for the year attributable to the ownersBasic earnings of the Parent per share Company is calculated by the byweighted dividing average the net number income of for common the year shares attributable outstanding to the duringowners the of theyear, Parent after Companyconsidering by the the retroactive weighted average effect of number stock dividend of common declaration, shares outstanding if any. 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 mannerDiluted assumingearnings per that, share the attributableweighted average to owners number of the of Parentcommon Company shares outstanding is calculated is in adjusted the same for mannerpotential assuming common that,shares the from weighted the assumed average exercise number ofof ESOPcommon and shares other outstandingdilutive instruments. is adjusted for potential common shares from the assumed exercise of ESOP and other dilutive instruments. *SGVFSM006036* *SGVFSM006036*

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Events after the Reporting Period PostEvents year-end after the events Reporting that provide Period additional information about the Company’s financial position at Postthe reporting year-end date events (adjusting that provide events), additional if any, areinformation reflected aboutin the theconsolidated Company’s financial financial statements. position at Postthe reporting year-end date events (adjusting that are events),not adjusting if any, events are reflected are disclosed in the inconsolidated the notes to financial consolidated statements. financial statementsPost year-end when events material. that are not adjusting events are disclosed in the notes to consolidated financial statements when material.

40. Future Changes in Accounting Policies 40. Future Changes in Accounting Policies Pronouncements issued but not yet effective are listed below. Unless otherwise specified, these will notPronouncements have a significant issued impact but not on yet the effective Company’s are consolidatedlisted below. financial Unless otherwise statements. specified, The Company these will intendsnot have to a adoptsignificant the following impact on pronouncements the Company’s whenconsolidated they become financial effective. statements. The Company intends to adopt the following pronouncements when they become effective. Effective beginning on or after January 1, 2021 Effective beginning on or after January 1, 2021 ƒ Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform – ƒ PhaseAmendments 2 to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform – Phase 2 The amendments provide the following temporary reliefs which address the financial reporting Theeffects amendments when an interbank provide theoffered following rate (IBOR) temporary is replaced reliefs whichwith an address alternative the financial nearly risk-free reporting interesteffects when rate (RFR): an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interestƒ ratePractical (RFR): expedient for changes in the basis for determining the contractual cash flows as ƒ Practicala result of expedient IBOR reform for changes in the basis for determining the contractual cash flows as ƒ Reliefa result from of IBOR discontinuing reform hedging relationships ƒ Relief from thediscontinuing separately hedgingidentifiable relationships requirement when an RFR instrument is ƒ designatedRelief from as the a hedgeseparately of a identifiablerisk component requirement when an RFR instrument is designated as a hedge of a risk component The Company shall also disclose information about: The ƒCompanyThe about shall the also nature disclose and informationextent of risks about: to which the entity is exposed arising from ƒ Thefinancial about instruments the nature andsubject extent to IBORof risks reform, to which and the how entity the entityis exposed manages arising those from risks; andfinancial instruments subject to IBOR reform, and how the entity manages those risks; ƒ Theirand progress in completing the transition to alternative benchmark rates, and how the ƒ entityTheir progressis managing in completing that transition the transition to alternative benchmark rates, and how the entity is managing that transition The amendments are effective for annual reporting periods beginning on or after TheJanuary amendments 1, 2021 and are apply effective retrospectively, for annual reporting however, periods the Company beginning is not on requiredor after to restate prior periods.January 1, 2021 and apply retrospectively, however, the Company is not required to restate prior periods. Effective beginning on or after January 1, 2022 Effective beginning on or after January 1, 2022 ƒ Amendments to PFRS 3, Reference to the Conceptual Framework ƒ Amendments to PFRS 3, Reference to the Conceptual Framework The amendments are intended to replace a reference to the Framework for the Preparation and PresentationThe amendments of Financial are intended Statements, to replace issued a reference in 1989, to with the aFramework reference to for the the Conceptual Preparation and FrameworkPresentation for of Financial ReportingStatements, issued issued in in March 1989, 2018 with withouta reference significantly to the Conceptual changing its requirements.Framework for The Financial amendments Reporting added issued an exception in March to 2018 the recognitionwithout significantly principle ofchanging PFRS 3, its Businessrequirements. Combinations The amendments to avoid added the issue an exceptionof potential to ‘daythe recognition 2’gains or lossesprinciple arising of PFRS for liabilities 3, andBusiness contingent Combinations liabilities to that avoid would the issuebe within of potential the scope ‘day of 2’gainsPAS 37, orProvisions, losses arising Contingent for liabilities Liabilitiesand contingent and Contingentliabilities that Assets would or Philippine-IFRICbe within the scope 21, ofLevies PAS 37,, if incurredProvisions, separately. Contingent Liabilities and Contingent Assets or Philippine-IFRIC 21, Levies, if incurred separately. At the same time, the amendments add a new paragraph to PFRS 3 to clarify that contingent assetsAt the dosame not time, qualify the for amendments recognition add at thea new acquisition paragraph date. to PFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date. *SGVFSM006036* *SGVFSM006036*

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The amendments are effective for annual reporting periods beginning on or after January 1, 2022 Theand applyamendments prospectively. are effective for annual reporting periods beginning on or after January 1, 2022 and apply prospectively. ƒ Amendments to PAS 16, Plant and Equipment: Proceeds before Intended Use ƒ TheAmendments amendments to PAS prohibit 16, Plant entities and deducting Equipment: from Proceeds the cost beforeof an item Intended of property, Use plant and Theequipment, amendments any proceeds prohibit from entities selling deducting items producedfrom the costwhile of bringing an item ofthat property, asset to plantthe location and and equipment,condition necessary any proceeds for it fromto be sellingcapable items of operating produced in while the manner bringing intended that asset by management.to the location and conditionInstead, an necessary entity recognizes for it to bethe capable proceeds of fromoperating selling in suchthe manner items, intendedand the costs by management. of producing Instead,those items, an entity in profit recognizes or loss. the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendment is effective for annual reporting periods beginning on or after January 1, 2022 Theand mustamendment be applied is effective retrospectively for annual to itemsreporting of property, periods beginningplant and equipmenton or after madeJanuary available 1, 2022 for anduse onmust or beafter applied the beginning retrospectively of the earliestto items period of property, presented plant when and theequipment entity first made applies available the for useamendment. on or after the beginning of the earliest period presented when the entity first applies the amendment. ƒ Amendments to PAS 37, Onerous Contracts – Costs of Fulfilling a Contract ƒ Amendments to PAS 37, Onerous Contracts – Costs of Fulfilling a Contract The amendments specify which costs an entity needs to include when assessing whether a Thecontract amendments is onerous specify or loss-making. which costs The an amendments entity needs applyto include a “directly when assessingrelated cost whether approach”. a contractThe costs is that onerous relate or directly loss-making. to a contract The amendments to provide goods apply ora “directly services relatedinclude costboth approach”. incremental Thecosts costs and anthat allocation relate directly of costs to adirectly contract related to provide to contract goods activities. or services General include and both administrative incremental costs anddo not an relateallocation directly of costs to a contractdirectly relatedand are toexcluded contract unless activities. they Generalare explicitly and administrative chargeable to coststhe counterparty do not relate under directly the contract.to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. The amendments are effective for annual reporting periods beginning on or after January 1, 2022. The Companyamendments will are apply effective these foramendments annual reporting to contracts periods for beginning which it has on notor after yet fulfilledJanuary all1, 2022.its Theobligations Company at the will beginning apply these of theamendments annual reporting to contracts period for in which which it it has first not applies yet fulfilled the all its obligationsamendments. at the beginning of the annual reporting period in which it first applies the amendments. ƒ Annual Improvements to PFRSs 2018-2020 Cycle ƒ Annual Improvements to PFRSs 2018-2020 Cycle ƒ Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting Standards, ƒ AmendmentsSubsidiary as toa first-timePFRS 1, First-timeadopter Adoption of Philippines Financial Reporting Standards, Subsidiary as a first-time adopter The amendment permits a subsidiary that elects to apply paragraph D16(a) of PFRS 1 to Themeasure amendment cumulative permits translation a subsidiary differences that elects using to the apply amounts paragraph reported D16(a) by the of PFRSparent, 1 basedto measureon the parent’s cumulative date oftranslation transition differences to PFRS. This using amendment the amounts is alsoreported applied by theto anparent, associate based or onjoint the venture parent’s that date elects of transition to apply paragraphto PFRS. This D16(a) amendment of PFRS is1. also applied to an associate or joint venture that elects to apply paragraph D16(a) of PFRS 1. The amendment is effective for annual reporting periods beginning on or after TheJanuary amendment 1, 2022 withis effective earlier foradoption annual permitted. reporting periods beginning on or after January 1, 2022 with earlier adoption permitted. ƒ Amendments to PFRS 9, Financial Instruments, Fees in the ’10 per cent’ test for ƒ Amendmentsderecognition toof PFRSfinancial 9, Financial liabilities Instruments, Fees in the ’10 per cent’ test for derecognition of financial liabilities The amendment clarifies the fees that an entity includes when assessing whether the terms of Thea new amendment or modified clarifies financial the liability fees that are an substantially entity includes different when assessingfrom the termswhether of thethe originalterms of afinancial new or modifiedliability. Thesefinancial fees liability include are only substantially those paid ordifferent received from between the terms the borrowerof the original and financialthe lender, liability. including These fees fees paid include or received only bythose either paid the or borrowerreceived betweenor lender the on borrowerthe other’s and thebehalf. lender, An entityincluding applies fees the paid amendment or received to by financial either the liabilities borrower that or are lender modified on the or other’s behalf.exchanged An entityon or afterapplies the the beginning amendment of the to annual financial reporting liabilities period that inare which modified the entity or first exchangedapplies the onamendment. or after the beginning of the annual reporting period in which the entity first applies the amendment. *SGVFSM006036* *SGVFSM006036*

291 - 183 - - 183 -

The amendment is effective for annual reporting periods beginning on or after TheJanuary amendment 1, 2022 withis effective earlier foradoption annual permitted. reporting Theperiods Company beginning will onapply or after the amendments to Januaryfinancial 1, liabilities 2022 with that earlier are modified adoption or permitted. exchanged The on Company or after the will beginning apply the of amendments the annual to financialreporting liabilitiesperiod in thatwhich are the modified entity first or exchanged applies the on amendment. or after the beginning of the annual x Amendmentsreporting period to PASin which 41, Agriculture,the entity first Taxation applies in the fair amendment. value measurements x Amendments to PAS 41, Agriculture, Taxation in fair value measurements The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude Thecash amendmentflows for taxation removes when the measuringrequirement the in fairparagraph value of 22 assets of PAS within 41 that the entitiesscope of exclude cashPAS flows41. for taxation when measuring the fair value of assets within the scope of PAS 41. An entity applies the amendment prospectively to fair value measurements on or after the Anbeginning entity applies of the first the amendmentannual reporting prospectively period beginning to fair value on or measurements after January on1, 2022or after with the beginningearlier adoption of the permitted. first annual reporting period beginning on or after January 1, 2022 with earlier adoption permitted. Effective beginning on or after January 1, 2023 Effective beginning on or after January 1, 2023 ƒ Amendments to PAS 1, Classification of Liabilities as Current or Non-current ƒ Amendments to PAS 1, Classification of Liabilities as Current or Non-current The amendments clarify paragraphs 69 to 76 of PAS 1, Presentation of Financial Statements, to specifyThe amendments the requirements clarify paragraphsfor classifying 69 toliabilities 76 of PAS as current1, Presentation or non-current. of Financial The amendments Statements, to clarify:specify the requirements for classifying liabilities as current or non-current. The amendments clarify:x What is meant by a right to defer settlement x ThatWhat a is right meant to deferby a right must to exist defer at settlementthe end of the reporting period x That classificationa right to defer is must unaffected exist at by the the end likelihood of the reporting that an entityperiod will exercise its deferral x rightThat classification is unaffected by the likelihood that an entity will exercise its deferral x Thatright only if an embedded derivative in a convertible liability is itself an equity instrument x wouldThat only the ifterms an embedded of a liability derivative not impact in a itsconvertible classification liability is itself an equity instrument would the terms of a liability not impact its classification The amendments are effective for annual reporting periods beginning on or after January 1, 2023 andThe mustamendments be applied are retrospectively. effective for annual The Companyreporting periodsis currently beginning assessing on orthe after impact January the 1, 2023 amendmentsand must be appliedwill have retrospectively. on current practice The Company and whether is currently existing assessingloan agreements the impact may the require renegotiation.amendments will have on current practice and whether existing loan agreements may require renegotiation. ƒ PFRS 17, Insurance Contracts ƒ PFRS 17, Insurance Contracts PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognitionPFRS 17 is aand comprehensive measurement, new presentation accounting and standard disclosure. for insurance Once effective, contracts PFRS covering 17 will replace PFRSrecognition 4, Insurance and measurement, Contracts. Thispresentation new standard and disclosure. on insurance Once contracts effective, applies PFRS to 17 all will types replace of insurancePFRS 4, Insurance contracts Contracts(i.e., life, .non-life, This new direct standard insurance on insurance and re-insurance), contracts applies regardless to all of types the type of of entitiesinsurance that contracts issue them, (i.e., as life, well non-life, as to certain direct guarantees insurance andand re-insurance),financial instruments regardless with of the type of discretionaryentities that issue participation them, as wellfeatures. as to A certain few scope guarantees exceptions and financialwill apply. instruments with discretionary participation features. A few scope exceptions will apply. The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that isThe more overall useful objective and consistent of PFRS for 17 insurers. is to provide In contrast an accounting to the requirements model for insurance in PFRS contracts4, which arethat largelyis more baseduseful on and grandfathering consistent for previous insurers. local In contrast accounting to the policies, requirements PFRS in 17 PFRS provides 4, which a are comprehensivelargely based on model grandfathering for insurance previous contracts, local coveringaccounting all policies,relevant PFRSaccounting 17 provides aspects. a The core ofcomprehensive PFRS 17 is the model general for insurancemodel, supplemented contracts, covering by: all relevant accounting aspects. The core of PFRSx A 17 specific is the general adaptation model, for contractssupplemented with directby: participation features (the variable fee x approach)A specific adaptation for contracts with direct participation features (the variable fee x Aapproach) simplified approach (the premium allocation approach) mainly for short-duration x contractsA simplified approach (the premium allocation approach) mainly for short-duration contracts *SGVFSM006036* *SGVFSM006036*

292 - 184 - - 184 -

PFRS 17 is effective for reporting periods beginning on or after January 1, 2023, with comparativePFRS 17 is effective figures required. for reporting Early periods application beginning is permitted. on or after January 1, 2023, with comparative figures required. Early application is permitted. Deferred effectivity Deferred effectivity ƒ Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution ƒ Amendmentsof Assets between to PFRS an Investor 10, Consolidated and its Associate Financial or JointStatements Venture, and PAS 28, Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of Thecontrol amendments of a subsidiary address that the is conflictsold or contributed between PFRS to an 10 associate and PAS or 28 joint in dealing venture. with The the loss of controlamendments of a subsidiary clarify that that a full is sold gain or or contributed loss is recognized to an associate when a ortransfer joint venture.to an associate The or joint amendmentsventure involves clarify a business that a full as gaindefined or loss in PFRS is recognized 3. Any gain when or aloss transfer resulting to an from associate the sale or orjoint venturecontribution involves of assets a business that does as defined not constitute in PFRS a business,3. Any gain however, or loss isresulting recognized from only the saleto the or contributionextent of unrelated of assets investors’ that does interests not constitute in the associate a business, or however,joint venture. is recognized only to the extent of unrelated investors’ interests in the associate or joint venture. On January 13, 2016, the Financial Reporting Standards Council deferred the original effective Ondate January of January 13, 2016,1, 2016 the of Financial the said amendmentsReporting Standards until the CouncilInternational deferred Accounting the original Standards effective dateBoard of (IASB) January completes 1, 2016 of its the broader said amendments review of the until research the International project on equityAccounting accounting Standards that may Boardresult in(IASB) the simplification completes its of broader accounting review for of such the transactionsresearch project and ofon other equity aspects accounting of accounting that may resultfor associates in the simplification and joint ventures. of accounting for such transactions and of other aspects of accounting for associates and joint ventures.

*SGVFSM006036* *SGVFSM006036*

293 - 185 -

41. Consolidated Subsidiaries The consolidated subsidiaries of MPIC are as follows:

December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) MPIC Subsidiaries Beacon Electric Asset Holdings, Inc. Philippines 100.0 – 100.0 100.0 – 100.0 Investment holding; Under the terms of the (Beacon Electric) sale agreements in 2016 and 2017, PCEV shall retain voting rights over the sold Beacon Electric shares until full payment of consideration (see Note 15). Metro Pacific Tollways Corporation (MPTC) Philippines 99.9 – 99.9 99.9 – 99.9 Investment holding

Maynilad Water Holding Company, Inc. (MWHC) Philippines 51.3 – 51.3 51.3 – 51.3 Investment holding MetroPac Water Investments Corporation (MPW) Philippines 100.0 – 100.0 100.0 – 100.0 Investment holding Metro Pacific Light Rail Corp. (MPLRC) Philippines 65.1 – 65.1 100.0 – 100.0 Investment holding (see Note 4) MetroPac Logistics Company, Inc. (MPLC) Philippines 100.0 – 100.0 100.0 – 100.0 Investment holding

Metro Pacific Resource Recovery Corporation Philippines 100.0 – 100.0 100.0 – 100.0 Investment holding; formerly MetroPac Clean (MPRRC) Energy Holdings Corporation

MetPower Ventures Partners Holdings, Inc. (MVPHI) Philippines 100.0 – 100.0 100.0 – 100.0 Investment holding Fragrant Cedar Holdings, Inc. (FCHI) Philippines 100.0 – 100.0 100.0 – 100.0 Property Lessor Porrovia Corporation Philippines 50.0 50.0 82.6 50.0 50.0 100.0 Investment holding; BOD of Porrovia approved the shortening of the company’s corporate life to until March 31, 2019.

Neo Oracle Holdings, Inc (NOHI) Philippines 96.6 – 96.6 96.6 – 96.6 Investment holding and Real estate; Formerly Metro Pacific Corporation (MPC). NOHI’s corporate life ended December 31, 2013 and is currently under the process of liquidation.

MPIC-JGS Airport Holdings, Inc. Philippines – – – – – – Investment holding; BOD of MPIC-JGS (MPIC-JGS) approved the shortening of the company’s corporate life to until February 15, 2016. Tax clearance obtained in 2019. *SGVFSM006036* 294 295

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December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) Metro Global Green Waste, Inc. (MGGW) Philippines 70.0 – 70.0 70.0 – 70.0 Investment holding; BOD of MGGW approved the shortening of the company’s corporate life to until December 31, 2017.

MPIC Infrastructure Holdings Limited (MIHL) BVI 100.0 – 100.0 100.0 – 100.0 Investment holding Metro Vantage Properties, Inc. (MVPI) Philippines 100.0 – 100.0 100.0 – 100.0 Real estate Metro Pacific Health Tech Corporation Philippines 100.0 – 100.0 – – – Mobile healthcare services; Incorporated on June 4, 2020 KM Infrastructure Holdings, Inc. Philippines 100.0 – 100.0 – – – Investment holding; Incorporated on December 14, 2020 Razor Crest Storage Infrastructure Holdings Philippines 100.0 – 100.0 – – – Investment holding; Incorporated on Corporation December 10, 2020 Hyperion Storage Holdings Corporation Philippines 100.0 – 100.0 – – – Investment holding; Incorporated on December 9, 2020

Beacon Electric Subsidiary Beacon PowerGen Holdings, Inc. (BPHI) Philippines – 100.0 100.0 – 100.0 100.0 Investment holding

BPHI Subsidiary Global Business Power Corporation (GBPC) Philippines – 56.0 62.4 – 56.0 62.4 Investment Holding

GBPC Subsidiaries (see Note 33) ARB Power Ventures, Inc. (APVI) Philippines – 100.0 62.4 – 100.0 62.4 Investment holding GBH Power Resources, Inc. (GPRI) Philippines – 100.0 62.4 – 100.0 62.4 Power Generation Global Energy Supply Corporation (GESC) Philippines – 100.0 62.4 – 100.0 62.4 Power Distribution Global Hydro Power Corporation (GHPC) Philippines – 100.0 62.4 – 100.0 62.4 Power Generation Global Renewables Power Holdings Corporation Philippines – 100.0 62.4 – 100.0 62.4 Power Generation (GRPC) Mindanao Energy Development Corporation (MEDC) Philippines – 100.0 62.4 – 100.0 62.4 Power Generation Global Trade Energy Resources Corp. Philippines – 100.0 62.4 – 100.0 62.4 Trading business Toledo Holdings Corp. (THC) Philippines – 100.0 62.4 – 100.0 62.4 Investment holding Toledo Power Co. (TPC) Philippines – 100.0 62.4 – 100.0 62.4 Power Generation Global Formosa Power Holdings, Inc. (GFPHI) Philippines – 93.2 58.2 – 93.2 58.2 Investment holding Panay Power Holdings Corporation (PPHC) Philippines – 89.3 55.7 – 89.3 55.7 Investment holding Lunar Power Core, Inc. (LPCI) Philippines – 57.5 35.9 – 57.5 35.9 Investment holding

GFPHI Subsidiary *SGVFSM006036* - 187 -

December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) Cebu Energy Development Corporation (CEDC) Philippines – 56.0 32.6 – 56.0 32.6 Power Generation

LPCI Subsidiary Global Luzon Energy Development Corporation Philippines – 100.0 35.9 – 100.0 35.9 Power Generation (GLEDC)

PPHC Subsidiaries Panay Power Corporation (PPC) Philippines – 100.0 55.7 – 100.0 55.7 Power Generation Panay Energy Development Corporation (PEDC) Philippines – 100.0 55.7 – 100.0 55.7 Power Generation

GRPC Subsidiary CACI Power Corporation (CACI) Philippines – 100.0 62.4 – 100.0 62.4 Power Generation

MVPHI Subsidiary Waste-to-Energy (see Note 24); On January 30, 2020, the SEC approved SBVC’s application for increase in authorized capital stock with equity infusion in 2019 of the other noncontrolling shareholders issued their corresponding capital stocks in SBVC. MVPHI’s interest in SBVC decreased from Surallah Biogas Ventures Corp. Philippines – 80.0 80.0 – 80.0 80.0 100% to 80%.

MPTC Subsidiaries Metro Pacific Tollways North Corporation (MPT Philippines – 100.0 99.9 – 100.0 99.9 Investment holding North; formerly Metro Pacific Tollways Development Corporation) Cavitex Infrastructure Corp. (CIC) Philippines – 100.0 99.9 – 100.0 99.9 Tollway operations; Interest in CIC is held through a Management Letter Agreement. CIC holds the concession agreement for the CAVITEX. Metro Strategic Infrastructure Philippines – 97.0 96.9 – 97.0 96.9 Investment holding Holdings, Inc. (MSIHI) MPT Asia, Corporation BVI – 100.0 99.9 – 100.0 99.9 Investment holding

*SGVFSM006036* 296 297

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December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) Metro Pacific Tollways Management Services, Inc. Philippines – 100.0 99.9 – 100.0 99.9 Formerly M+ Corporation. Incorporated on (MPTMSI) August 24, 2016 with the primary purpose to carry on the toll collection function of CAVITEX and CALAX. Metro Pacific Tollways South Corporation (MPT Philippines – 100.0 99.9 – 100.0 99.9 Investment holding South) Metro Pacific Tollways Philippines – 100.0 99.9 – 100.0 99.9 Investment holding Vizmin Corporation (MPT Vizmin) Easytrip Services Corporation (ESC) Philippines – 66.0 65.9 – 66.0 65.9 Electronic toll collection services Metro Pacific Tollways Asia, Corporation Pte. Ltd. Singapore – 100.0 99.9 – 100.0 99.9 Investment holding NLEX Ventures Corporation (NVC) Philippines – 100.0 100.0 – 100.0 75.0 Service facilities management; NVC was sold to MPTC by NLEX Corp. in 2020 (see note 4). Dibztech, Inc. Philippines – 100.0 100.0 – – – Parking management (see note 4)

MPT North Subsidiaries NLEX Corporation Philippines – 75.1 75.0 – 75.1 75.0 Tollway operations (see Note 1); Change in the corporate name from Manila North Tollways Corporation was approved by the SEC on February 13, 2017. 4.3% is owned through 42.8% ownership in Egis Investment Partners Philippines Inc. Collared Wren Holdings, Inc. (CWHI) Philippines – 100.0 99.9 – 100.0 99.9 Investment holding Larkwing Holdings, Inc. (LHI) Philippines – 100.0 99.9 – 100.0 99.9 Investment holding MPCALA Holdings, Inc. (MPCALA) Philippines – 40.0 99.9 – 51.0 99.9 Tollway operations (see Note 1); MPCALA is owned by MPT North at 40% and the remaining 60% owned equally among MPT South, CWHI and LHI.; holds the concession agreement for the CALAEX. Luzon Tollways Corporation (LTC) Philippines – 100.0 99.9 – 100.0 99.9 Tollway operations; Dormant

*SGVFSM006036* - 189 -

December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) MPT Asia Subsidiaries MPT Thailand, Corporation BVI – 100.0 99.9 – 100.0 99.9 Investment holding

MPT Vietnam, Corporation BVI – 100.0 99.9 – 100.0 99.9 Investment holding; Holds the investment in CII B&R (see Note 8) PT Metro Pacific Tollways Indonesia Indonesia – 100.0 99.9 – 100.0 99.9 Investment holding; Holds the investment in PT Nusantara. MPT South Subsidiaries Metro Pacific Tollways South Philippines – 100.0 99.9 – 100.0 99.9 Tollway operations Management Corporation MPTS Ventures Corporation Philippines – 100.0 99.9 – – – Road safety and traffic management services; Incorporated on August 11, 2020. MPT Vizmin Subsidiary Cebu Cordova Link Expressway Corporation Philippines – 100.0 99.9 – 100.0 99.9 Tollway operations; CCLEC holds the (CCLEC) concession agreement for the CCLEX

MPTMSI Subsidiary Southbend Express Services. Inc. Philippines – 100.0 99.9 – 100.0 99.9 Manpower services (see Note 4)

MPT Thailand Corp Subsidiaries FPM Tollway (Thailand) Limited Hong Kong – 100.0 99.9 – 100.0 99.9 Investment holding

AIF Toll Road Holdings (Thailand) Limited (AIF) Thailand – 100.0 99.9 – 100.0 99.9 Investment holding; Holds the investment on DMT (see Note 8).

Metro Pacific Tollways Asia, Corporation Pte. Ltd. Subsidiary Metro Pacific Tollways Vietnam Company Limited (Vietnam) Vietnam – 100.0 99.9 – 100.0 99.9 Investment holding CAIF III Infrastructure Holdings Sdn Bhd (Malaysia) (CAIF III) Malaysia – 100.0 99.9 – 100.0 99.9 Investment holding CIIF Infrastructure Holdings Sdn Bhd (Malaysia) (CIIF) Malaysia – 100.0 99.9 – 100.0 99.9 Investment holding

*SGVFSM006036* 298 299

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December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) PT Metro Pacific Tollways Indonesia Subsidiary PT Nusantara Infrastructure Tbk (Indonesia) Indonesia – 76.3 76.2 – 76.3 76.2 Infrastructure company

PT Nusantara Subsidiaries PT Margautama Nusantara (MUN) Indonesia – 76.5 71.5 – 75.0 82.1 Construction, trading and services – Toll; (see Note 4) CAIF III and CIIF holds an aggregate 13.15% in MUN (see Note 4) PT Potum Mundi Infranusantara (Potum) Indonesia – 99.9 76.1 – 99.9 76.1 Water and waste management services PT Energi Infranusantara (EI) Indonesia – 99.9 76.1 – 99.9 76.1 Construction, trading and services - Power PT Portco Infranusantara (Portco) Indonesia – 99.9 76.1 – 99.9 76.1 Port management PT Telekom Infranusantara (Telekom) Indonesia – 100.0 76.2 – 100.0 76.2 Trading, supplies and other telecommunications PT Marga Metro Nusantara Indonesia – 70.0 53.4 – 70.0 53.4 Construction, trading and services MUN Subsidiaries PT Bintaro Serpong Damai Indonesia – 88.9 63.6 – 88.9 73.0 Toll road operator PT Bosowa Marga Nusantara (BMN) Indonesia – 99.5 71.1 – 99.5 81.7 Toll road operator

BMN Subsidiary PT Jalan Tol Seksi Empat (JTSE) Indonesia – 99.4 70.7 – 99.4 81.2 Toll road operator

JTSE Subsidiary PT Metro Jakarta Ekspresway Indonesia – 85.0 60.1 – 85.0 69.0 Trade, development, and business management consulting services

Potum Subsidiaries PT Tirta Bangun Nusantara Indonesia – 100.0 76.1 – 100.0 76.1 Water and waste management services PT Dain Celicani Cemerlang Indonesia – 74.5 56.7 – 74.5 56.7 Water and waste management services PT Sarana Catur Tirta Kelola (SCTK) Indonesia – 65.0 49.5 – 65.0 49.5 Water management services

SCTK Subsidiaries PT Sarana Tirta Rezeki Indonesia – 90.0 47.2 – 90.0 47.2 Water management services; PT Sarana Tirta Rezeki is owned by SCTK at 80% while 10% is owned by Potum. PT Jasa Sarana Nusa Makmur Indonesia – 100.0 49.5 – 100.0 49.5 Water management services

*SGVFSM006036* - 191 -

December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) EI Subsidiaries PT Inpola Meka Energi (IME) Indonesia – 61.2 46.6 – 56.2 42.8 Power supply services; In February 2020, EI took over the PT Tagora Green Energy’s (TGE) issued and paid shares in IME equivalent to 5% ownership interest. EI increased its ownership interest in IME through payables conversion of TGE to EI. PT Rezeki Perkasa Sejahtera Lestari Indonesia – 80.0 60.9 – 80.0 60.9 Power supply services PT Auriga Energi Indonesia – 99.9 76.1 – 99.9 76.1 Power plants/Electricity support facilities

PT Auriga Energi Subsidiaries PT Centara Energi Indonesia – 99.9 76.0 – 99.9 76.0 Power plants/Electricity support facilities PT Eris Serra Energi Indonesia – 99.9 76.0 – 99.9 76.0 Power plants/Electricity support facilities PT Energi Parindu Nusantara Indonesia – 99.9 76.0 – 99.9 76.0 Power plants/Electricity support facilities PT Eridanusa Energi Nusantara Indonesia – 99.9 76.0 – – – Power plants/Electricity support facilities; Incorporated on August 4, 2020. MWHC Subsidiary Maynilad Water Services, Inc. (Maynilad) Philippines 5.2 92.9 52.8 5.2 92.9 52.8 Water and sewerage services; Holds the concession agreement for the water distribution in the West Concession Area. Maynilad Subsidiaries Amayi Water Solutions, Inc. (AWSI) Philippines – 100.0 52.8 – 100.0 52.8 Water and sewerage services Philippine Hydro, Inc. (PHI) Philippines – 100.0 52.8 – 100.0 52.8 Water and sewerage services MPW Subsidiaries MetroPac Cagayan De Oro, Inc. (MCDO) Philippines – 100.0 100.0 – 100.0 100.0 Water services MetroPac Iloilo Holdings Corp. (MILO) Philippines – 100.0 100.0 – 100.0 100.0 Investment holding/ Water services Metro Iloilo Bulk Water Supply Corp. Philippines – 80.0 80.0 – 80.0 80.0 Bulk water services; Holds the joint venture agreement for the bulk water supply in MIWD. Eco-System Technologies International, Inc. (ESTII) Philippines – 65.0 65.0 – 65.0 65.0 EPC and O&M contractor MetroPac Cagayan de Oro Holdings, Inc. Philippines – 100.0 100.0 – 100.0 100.0 Investment holding Cagayan De Oro Bulk Water, Inc. Philippines – 95.0 95.0 – 95.0 95.0 Bulk water services; Holds the joint venture agreement for the bulk water supply in COWD. MetroPac Baguio Holdings Inc. Philippines – 100.0 100.0 – 100.0 100.0 Investment holding Metro Iloilo Concession Holdings Corp. Philippines – 100.0 100.0 – 100.0 100.0 Investment holding *SGVFSM006036* 300 301

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December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) MetroPac Dumaguete Holdings Corp. Philippines – 100.0 100.0 – 100.0 100.0 Investment holding Metro Pacific Dumaguete Water Philippines – 80.0 80.0 – 80.0 80.0 Water services; Incorporated on Services Inc. October 22, 2019 Metro Pacific Iloilo Water Inc. Philippines – 80.0 80.0 – 80.0 80.0 Water services; Incorporated on January 17, 2019 Metro Pacific Water International Limited (MPWIL) BVI – 100.0 100.0 – 100.0 100.0 Investment holding Metro Pacific TL Water International Limited BVI – 100.0 100.0 – 100.0 100.0 Investment holding

MPWIL Subsidiary B.O.O. Phu Ninh Water Treatment Plant Joint Stock Company Vietnam – 55.4 55.4 – 52.5 52.5 Water services

MPLRC Subsidiaries Light Rail Manila Holdings Inc. (LRMH) Philippines – 50.0 32.6 – 50.0 50.0 Investment holding Light Rail Manila Corporation (LRMC) Philippines – 55.0 35.8 – 55.0 55.0 Rail operations; Holds the concession agreement for the LRT-1. Light Rail Manila Holdings 2, Inc. Philippines – 50.0 32.6 – 50.0 50.0 Investment holding; Corporate life has been shortened to until September 30, 2021. Light Rail Manila Holdings 6, Inc. Philippines – 50.0 32.6 – 50.0 50.0 Investment holding; Corporate life has been shortened to until September 30, 2021.

MPLC Subsidiaries MetroPac Movers, Inc (MMI) Philippines – 99.1 99.1 – 99.1 99.1 Logistics LogisticsPro, Inc. Philippines – 100.0 100.0 – 100.0 100.0 Logistics

MMI Subsidiaries MetroPac Trucking Company, Inc. Philippines – 100.0 99.1 – 100.0 99.1 Logistics TruckingPro, Inc Philippines – 100.0 99.1 – 100.0 99.1 Logistics PremierLogistics, Inc. Philippines – 100.0 99.1 – 100.0 99.1 Logistics PremierTrucking, Inc. Philippines – 100.0 99.1 – 100.0 99.1 Logistics OneLogistics, Inc. Philippines – 100.0 99.1 – 100.0 99.1 Logistics

*SGVFSM006036* - 193 -

December 31, 2020 December 31, 2019 MPIC Direct MPIC MPIC Direct MPIC Direct Interest of Effective Direct Interest of Effective Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity (In %) (In %) MVPI Subsidiary MetroPac Property Holdings, Inc. Philippines – 100.0 100.0 – 100.0 100.0 Investment holding; Incorporated on January 10, 2019 Millenial Resorts Corporation Philippines – 100.0 100.0 – 100.0 100.0 Rental or leasing services of residential properties; Incorporated on October 7, 2019 SCENIQ Lifestyle Corporation Philippines – 100.0 100.0 – 100.0 100.0 Real estate activities; Incorporated on October 14, 2019

MPRRC Subsidiary QC Integrated Waste Management Philippines – 100.0 100.0 – 100.0 100.0 Energy from waste; Incorporated on Holdings, Inc. May 30, 2019

NOHI Subsidiaries First Pacific Bancshares Philippines, Inc. Philippines – 100.0 96.6 – 100.0 96.6 Investment holding; BOD of FP Bancshares (FP Bancshares) approved the shortening of the company’s corporate life to until October 31, 2019. Metro Pacific Management Services, Inc. Philippines – 100.0 96.6 – 100.0 96.6 Management services First Pacific Realty Partners Corporation (FPRPC) Philippines – 50.7 49.0 – 50.7 49.0 Investment holding; BOD of FPRPC approved the shortening of the company’s corporate life to until May 31, 2018. Metro Tagaytay Land Co., Inc. Philippines – 100.0 96.6 – 100.0 96.6 Real estate; Pre-operating. Pacific Plaza Towers Management Services, Inc. Philippines – 100.0 96.6 – 100.0 96.6 Management services; Dormant. Philippine International Paper Corporation Philippines – 100.0 96.6 – 100.0 96.6 Investment holding; Dormant. Pollux Realty Development Corporation Philippines – 100.0 96.6 – 100.0 96.6 Investment holding; Dormant. Metro Asia Link Holdings, Inc. Philippines – 60.0 58.0 – 60.0 58.0 Investment holding; Dormant.

*SGVFSM006036* 302

Exhibit II

SupplementaryEXHIBIT II

SchedulesSUPPLEMENTARY SCHEDULES

303

127 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, 6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021 1226SyCip Makati Gorres City Velayo & Co. Tel:ey.com/ph (632) 8891 0307 BOA/PRCSEC Accreditation Reg. No. No. 0001, 0012-FR-5 (Group A), Philippines6760 Ayala Avenue Fax: (632) 8819 0872 NovemberOctober 4, 62018,, 201 8valid, valid until until August November 24, 20215, 2021 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A), Philippines November 6, 2018, valid until November 5, 2021

SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, 6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A), Philippines November 6, 2018, valid until November 5, 2021 INDEPENDENT AUDITOR’S REPORT INDEPENDENTON SUPPLEMENTARY AUDITOR’S SCHEDULES REPORT ON SUPPLEMENTARY SCHEDULES

TheINDEPENDENT Stockholders and AUDITOR’S the Board ofREPORT Directors TheMetroON SUPPLEMENTARYStockholders Pacific Investments and the Board CorporationSCHEDULES of Directors Metro10th Floor, Pacific MGO Investments Building Corporation 10thLegaspiFloor, corner MGO Dela Building Rosa Streets Legaspi cornerVillage, Dela Makati Rosa City Streets LegaspiThe Stockholders Village, Makati and the City Board of Directors Metro Pacific Investments Corporation We10th haveFloor, audited MGO inBuilding accordance with Philippine Standards on Auditing, the consolidated financial WestatementsLegaspi have corner audited of Metro Dela in accordance PacificRosa Streets Investments with Philippine Corporation Standards and Subsidiarieson Auditing, as the at consolidatedDecember 31, financial 2020 and 2019 statementsandLegaspi for each Village, of of Metro the Makati three Pacific Cityyears Investments in the period Corporation ended December and Subsidiaries 31, 2020, as included at December in this 31, Form 2020 17-A, and and2019 andhave for issued each our of thereport three thereon years indated the Marchperiod 19,ended 2021. December Our audits 31, 2020,were madeincluded for inthe this purpose Form of17-A, forming and havean opinion issued on our the report basic thereon financial dated statements March 19,taken 2021. as a Ourwhole. audits The were schedules made forlisted the in purpose the Index of formingto anConsolidatedWe opinion have audited on Financialthe in basic accordance Statementsfinancial with statements and Philippine Supplementary taken Standards as a whole.Schedules on Auditing, The are schedules the the responsibility consolidated listed in the of financial Indexthe Company’s to Consolidatedmanagement.statements of FinancialMetro These Pacificschedules Statements Investments are presentedand Supplementary Corporation for purposes and Schedules Subsidiaries of complying are the as with atresponsibility December Revised Securities31, of the2020 Company’s and 2019 management.Regulationand for each Code of These the Rule three schedules 68 years and are in are thenot presented periodpart of ended thefor basicpurposes December financial of complying31, statements. 2020, included with These Revised in schedules this Securities Form have17-A, been and Regulationsubjectedhave issued to Code ourthe reportauditing Rule thereon68 procedures and are dated not appliedMarch part of 19,inthe the2021. basic audit financialOur of auditsthe basic statements. were financial made These for statements the schedules purpose and, haveof in forming our been subjectedopinion,an opinion fairly to on the thestate, auditing basic in allfinancial procedures material statements respects, applied takenthein the information asaudit a whole. of the required Thebasic schedules financial to be set listed statementsforth intherein the and, Index in inrelation toour to opinion,theConsolidated basic fairlyfinancial Financial state, statements in allStatements material taken respects,and as a Supplementary whole. the information Schedules required are tothe be responsibility set forth therein of the in Company’srelation to themanagement. basic financial These statements schedules taken are presented as a whole. for purposes of complying with Revised Securities Regulation Code Rule 68 and are not part of the basic financial statements. These schedules have been SYCIPsubjected GORRES to the auditing VELAYO procedures & CO. applied in the audit of the basic financial statements and, in our SYCIPopinion, GORRES fairly state, VELAYO in all material & CO. respects, the information required to be set forth therein in relation to the basic financial statements taken as a whole.

MarydithSYCIP GORRES C. Miguel VELAYO & CO. MarydithPartner C. Miguel PartnerCPA Certificate No. 65556 CPASEC AccreditationCertificate No. No. 65556 0087-AR-5 (Group A), SEC January Accreditation 10, 2019, No. valid 0087-AR-5 until January (Group 9, A), 2022 TaxMarydith JanuaryIdentification C. 10,Miguel 2019, No. valid102-092-270 until January 9, 2022 TaxBIRPartner IdentificationAccreditation No.No. 102-092-27008-001998-055-2020, BIR CPA DecemberAccreditation Certificate 3, No. 2020, No. 65556 08-001998-055-2020,valid until December 2, 2023 PTRSEC December No.Accreditation 8534334, 3, 2020, No.January valid0087-AR-5 4, until 2021, December (Group Makati A), City 2, 2023 PTR January No. 8534334, 10, 2019, January valid 4,until 2021, January Makati 9, 2022City MarchTax Identification 19, 2021 No. 102-092-270 MarchBIR Accreditation 19, 2021 No. 08-001998-055-2020, December 3, 2020, valid until December 2, 2023 PTR No. 8534334, January 4, 2021, Makati City

March 19, 2021

*SGVFSM006036* *SGVFSM006036* A member firm of Ernst & Young Global Limited

A member firm of Ernst & Young Global Limited 304 *SGVFSM006036*

A member firm of Ernst & Young Global Limited SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, SyCip6760 Ayala Gorres Avenue Velayo & Co. Tel:Fax: (632) (632) 8891 8819 0307 0872 BOA/PRC October 4,Reg. 2018, No. valid 0001, until August 24, 2021 67601226 MakatiAyala Avenue City Fax:ey.com/ph (632) 8819 0872 SEC October Accreditation 4, 2018, No.valid 0012-FR-5 until August (Group 24, 2021 A), 1226Philippines Makati City ey.com/ph SECNovember Accreditation6, 201 No.8, valid 0012-FR-5 until November (Group A),5, 2021 Philippines November 6, 2018, valid until November 5, 2021

SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001, 6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A), Philippines November 6, 2018, valid until November 5, 2021 INDEPENDENT AUDITOR’S REPORT COMPONENTSINDEPENDENT OFAUDITOR’S FINANCIAL REPORT SOUNDNESS INDICATORS COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

INDEPENDENTThe Stockholders and AUDITOR’S the Board ofREPORT Directors COMPONENTSMetroThe Stockholders Pacific Investments andOF theFINANCIAL Board Corporation of Directors SOUNDNESS INDICATORS 10thMetroFloor, Pacific MGO Investments Building Corporation Legaspi10th Floor, corner MGO Dela Building Rosa Streets Legaspi Village,corner Dela Makati Rosa City Streets TheLegaspi Stockholders Village, Makati and the City Board of Directors Metro Pacific Investments Corporation 10thWe haveFloor, audited MGO inBuilding accordance with Philippine Standards on Auditing, the consolidated financial LegaspistatementsWe have corner audited of Metro Dela in accordance PacificRosa Streets Investments with Philippine Corporation Standards and Subsidiarieson Auditing, as the at consolidatedDecember 31, financial 2020 and 2019 Legaspiandstatements for each Village, of of Metro the Makati three Pacific Cityyears Investments in the period Corporation ended December and Subsidiaries 31, 2020, as and at Decemberhave issued 31, our 2020 report and thereon 2019 datedand for March each of19, the 2021. three Our years audits in the were period made ended for the December purpose 31, of forming2020, and an have opinion issued on theour basicreport financial thereon statementsdated March taken 19, 2021.as a whole. Our audits The Supplementary were made for Schedulethe purpose on ofFinancial forming Soundness an opinion Indicators, on the basic including financial Wetheirstatements have definitions, audited taken formulas,asin aaccordance whole. calculation, The with Supplementary Philippine and their Standards appropriateness Schedule on on Auditing, Financial or usefulness the Soundness consolidated to the Indicators, intended financial users, including are statementsthetheir responsibility definitions, of Metro formulas, of Pacificthe Company’s calculation, Investments management. and Corporation their appropriateness These and financial Subsidiaries or soundness usefulness as at December indicators to the intended 31, are 2020 not users, measures and 2019are andofthe operating responsibilityfor each performanceof the of three the Company’s years defined in the by management. periodPhilippine ended Financial TheseDecember financial Reporting 31, 2020, soundness Standards and have indicators (PFRS) issued and areour notmayreport measures not thereon be datedcomparableof operating March to performance19, similarly 2021. Ourtitled defined audits measures by were Philippine presentedmade for Financial theby otherpurpose Reporting companies. of forming Standards This an opinionschedule (PFRS) on is and thepresented maybasic not financial for be statementspurposescomparable of taken complyingto similarly as a whole. with titled Revised Themeasures Supplementary Securities presented Regulation Scheduleby other companies. Codeon Financial Rule 68 This Soundness issued schedule by theIndicators, is Securities presented including and for theirExchangepurposes definitions, of Commission, complying formulas, with and calculation, isRevised not a required Securities and their part Regulation appropriateness of the basic Code financial Ruleor usefulness 68 statements issued to by the prepared the intended Securities in users,accordance and are thewithExchange responsibility PFRS. Commission, The componentsof the Company’sand is of not these a management.required financial part soundness ofThese the basic financial indicators financial soundness have statements been indicators traced prepared to are the notin Company’s accordance measures ofconsolidatedwith operating PFRS. Theperformancefinancial components statements defined of these asby at Philippine financialDecember soundnessFinancial 31, 2020 Reporting indicatorsand 2019 Standardsandhave for been each (PFRS) traced of the to and three the may Company’s years not inbe the comparableperiodconsolidated ended to financialDecember similarly statements titled31, 2020 measures asand at no December presented material 31,exceptionsby other2020 companies.and were 2019 noted. and This for scheduleeach of the is threepresented years for in the purposesperiod ended of complying December with 31, 2020Revised and Securities no material Regulation exceptions Code were Rule noted. 68 issued by the Securities and Exchange Commission, and is not a required part of the basic financial statements prepared in accordance withSYCIP PFRS. GORRES The components VELAYO & of CO. these financial soundness indicators have been traced to the Company’s consolidatedSYCIP GORRES financial VELAYO statements & CO. as at December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020 and no material exceptions were noted.

SYCIPMarydith GORRES C. Miguel VELAYO & CO. PartnerMarydith C. Miguel CPAPartner Certificate No. 65556 SECCPA AccreditationCertificate No. No. 65556 0087-AR-5 (Group A), SEC January Accreditation 10, 2019, No. valid 0087-AR-5 until January (Group 9, A), 2022 MarydithTax JanuaryIdentification C. 10,Miguel 2019, No. valid102-092-270 until January 9, 2022 PartnerBIRTax IdentificationAccreditation No.No. 102-092-27008-001998-055-2020, CPA BIR DecemberAccreditation Certificate 3, No. 2020, No. 65556 08-001998-055-2020,valid until December 2, 2023 SECPTR December AccreditationNo. 8534334, 3, 2020, No.January valid0087-AR-5 4, until 2021, December (Group Makati A), City 2, 2023 PTR January No. 8534334, 10, 2019, January valid 4,until 2021, January Makati 9, 2022City TaxMarch Identification 19, 2021 No. 102-092-270 BIRMarch Accreditation 19, 2021 No. 08-001998-055-2020, December 3, 2020, valid until December 2, 2023 PTR No. 8534334, January 4, 2021, Makati City

March 19, 2021 *SGVFSM006036* A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited *SGVFSM006036* 305

A member firm of Ernst & Young Global Limited

METRO PACIFIC INVESTMENTS CORPORATION SUPPLEMENTARY SCHEDULE REQUIRED UNDER REVISED SRC RULE 68 SCHEDULE I Financial Soundness Indicators

December December Financial Ratios Formula 31, 2020 31, 2019

a) Current Ratio Total Current Assets 1.24 1.40 Total Current Liabilities

Net Profit After Tax (NPAT) + b) Solvency Ratio Depreciation and Amortization 0.06 0.11 Total Liabilities

c) Total Liabilities-to-Equity Total Liabilities Ratio 1.53 1.49 Total Stockholders' Equity

d) Long-term Debt-to-Equity Long-term Debt Ratio 0.95 1.02 Total Stockholders' Equity

e) Asset to Equity Ratio Total Assets 2.53 2.49 Total Stockholders' Equity

f) Interest Rate Coverage Earnings before Interest and Taxes Ratio 2.16 4.10 Interest Expense

g) Net Profit Margin NPAT 16.55% 31.56% Net Revenues

NPAT + Interest expense (net of h) Return on Asset tax) 3.21% 6.41% Average Total Assets

i) Return on Equity NPAT Average Total Stockholders’ 4.18% 11.47%

Equity

306

128

RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION As at December 31, 2020 SCHEDULE II Metro Pacific Investments Corporation 10th Floor, MGO Building Legaspi corner Dela Rosa Streets Legaspi Village, Makati City

Amount (In Million)

Unappropriated retained earnings, beginning P=37,806 Adjustments: Unrealized gain as a result of transaction accounted for under PFRS, net (20,737) of final tax (gain from accounting dilution on interest in a subsidiary) Treasury shares (3,420) Total unappropriated retained earnings available for dividend declaration, ending P=13,649

307

129

METRO PACIFIC INVESTMENTS CORPORATION (MPIC) AND SUBSIDIARIES Supplementary Schedules Required by Paragraph 6D, Part II Under Revised SRC Rule 68 SCHEDULE III Schedule A. Financial Assets

Number of shares Amount shown Income Name of issuing entity and association of each or principal in the statement received and issue amount of bonds of financial accrued and notes position (Amounts in Millions)

Cash and cash equivalents and short-term deposits P=48,822 P=1,083 Restricted cash 1,852 − Receivables 12,104 − Other current assets Due from related parties 279 − Miscellaneous deposits and others 943 − Investments in shares of stock: Citra Metro Manila Tollways Corporation 1,379,674 shares 778 55 Bonifacio Land Corporation 35,448 shares 5 − Pacific Global One Aviation Company, Inc. 25,000,000 shares − − Subic Water Sewerage Co., Inc. 915,580 shares 125 − AF2100, Inc. 16,749,846 shares 112 − Air2100, Inc. 57,955 shares 1 − Go21, Inc. 27,273 shares 10 − Integrated Waste Management, Inc. 104,831 shares 7 − Waste and Resource Management, Inc. 588 shares 9 − 1 share 19 − Pico de Loro Club 1 share 8 − P=65,074 P=1,138

308

130

Schedule B. Amounts Receivable from Directors, Officers, Employees, Related Parties, and Principal Stockholders (Other than Related Parties)

Balance at Balance Name and Designation of Amounts beginning Additions Reversal Current Noncurrent at end of debtor collected of period period (In Millions) Receivables: Advances to officers and employees P=135 P=154 (P=135) P=– P=154 P=– P=154 Due from related parties: Metro Pacific Hospital Holding, Inc. 97 1 (97) – 1 – 1 PT Intisentosa Alam Bahtera 122 104 (122) – 104 – 104 PT Tirta Kencana Cahaya Mandiri 22 20 (22) – 20 – 20 Landco Pacific Corporation 15 118 – – 133 – 133 First Pacific Company, Ltd. 1 1 (1) – 1 – 1 Lucena Land Corporation 7 – – – 7 – 7 Others 9 4 – – 13 – 13 P=408 P=402 (P=377) P=– P=433 P=– P=433

Schedule C. Amounts Receivable from Related Parties which are eliminated during the consolidation of financial statements

Balance at Balance at Name and Designation of Amounts Amounts beginning Additions Current Noncurrent end of debtor collected written off of period period (In Millions) Metro Pacific Investments Corporation (MPIC): MetroPac Movers, Inc. P=– P=1 (P=1) P=– P=– P=– P=– MetroPac Water Investmens Corporation – 1 – – 1 – 1 Maynilad Water Services, Inc. 1 – (1) – – – –

Neo Oracle Holdings, Inc.: Metro Pacific Tollways Corporation 2 – – – 2 – 2

Porrovia Corporation: MPIC 10 – – – 10 – 10

P=13 P=2 (P=2) P=– P=13 P=– P=13

309

131

Schedule D. Intangible Assets – Other Assets

Charged to Charged Other charges Beginning Additions Ending Description cost and to other additions balance at cost balance expenses accounts (deductions)

(In Millions) Service Concession Assets: Cost P=291,036 P=42,057 P=– P=– (P=704) P=332,389 Accumulated Amortization (50,547) – (6,030) – 52 (56,525) Carrying Value 240,489 42,057 (6,030) – (652) 275,864

Customer Contracts: Cost 3,850 – – – (3,410) 440 Accumulated Amortization (1,066) – (170) – 1,056 (180) Carrying Value 2,784 – (170) – (2,354) 260

Others: Cost 859 45 – – (37) 867 Accumulated Amortization (365) – (86) – 28 (423) Carrying Value 494 45 (86) – (9) 444

Goodwill 15,676 75 (168) – (246) 15,337 P=259,443 P=42,177 (P=6,454) P=– (P=3,261) P=291,905

See relevant Note 11 - Goodwill and Intangible Assets and Note 12 - Service Concession Assets to the 2020 Audited Consolidated Financial Statements:

310

132 311

Schedule E. Long Term Debt Amount Number of Amount shown Amount shown Final Title of issue and type of obligation authorized by Total Interest rates periodic as Current as Noncurrent Maturity indenture installments Parent Company Peso denominated Bank loans - Fixed 82,400 2,123 76,992 79,115 4.55% to 9.15% Amortized 2025 to 2033

Philippine subsidiaries Loans from banks and other institutions: Local currency denominated - Fixed MPTC 45,060 5,054 60,964 66,018 3.50% to 8.87% Bullet/Amortized 2021 to 2034 MWSI 32,611 1,270 27,815 29,085 5.50% to 6.84% Amortized 2025 to 2035 MPW 770 115 630 745 6.85% and 7.46% Amortized 2028 and 2029 BPHI 12,000 8,640 0 8,640 5.50% Amortized 2026 LRMC 24,000 676 15,543 16,219 7.00% and 7.46% Amortized 2021 and 2031 MMI 2,700 261 282 543 5.34% - 7.30% Amortized 2022 to 2023

Foreign currency - denominated USD 137.5 367 5,668 6,035 World Bank Lending Amortized 2037 MWSI - Variable Rate + Margin MWSI - Fixed JPY 20,949 487 3,975 4,462 0.90% to 1.23% Amortized 2027 and 2034

Bonds: MPTC - Fixed 32,000 4,398 8,491 12,889 5.07% to 6.9% Bullet 2021 to 2028

Foreign subsidiaries Loans from banks and other institutions: Local currency denominated MPTC - Fixed IDR 4,132 569 6,286 6,855 8.75% to 12.50% Amortized 2022 to 2030 MPW - Variable VND 787,000 1 759 760 VNIBOR + Margin Amortized 2022 TOTAL 23,961 207,405 231,366

133

Schedule F. Indebtedness to Related Parties (Long term loans from Related Companies)

Name of related party Balance at beginning of period Balance at end of period (In Millions) PLDT Communications and Energy Ventures P=7,791 P=2,388

Schedule G. Guarantees of Securities of Other Issuers

Name of issuing entity Amount owned Total amount of securities by person for Title of issue of each class guaranteed Nature of guaranteed by the which of securities guaranteed and guarantee Company for which statement is outstanding this statement is filed files

Not Applicable. There are no guarantees made by the Company as at December 31, 2020.

Schedule H. Capital Stock

Number of Number of shares issued shares and reserved for Number of Number of Directors, outstanding as options, Title of Issue shares shares held by officers and shown under warrants, Others authorized related parties employees related conversion balance sheet and other caption rights

Common 38,500,000,000 30,668,798,752 – 13,222,948,173 93,746,434 17,352,104,145 Preferred Class A - =P0.01 par value 20,000,000,000 9,128,105,319 – 9,128,105,319 – – Class B - =P1.00 par value 1,350,000,000 – – – – –

312 1

SCHEDULE IV

MPIC Group

Structure MPIC GROUP STRUCTURE as of December 31, 2020 as of December 31, 2020

2 313 December 31, 2020 WATER

METRO PACIFIC 43.1% INVESTMENTS CORPORATION TOLLROADS Enterprise 60.0% Investments Holding, Inc. (1) Metro Pacific POWER 100.0% Infrastructure Corporation First Pacific 13.3% Metro Pacific International Holdings, Inc. HOSPITAL Limited

60.0% Metro Pacific Resource, Inc. RAIL 26.7% Intalink B.V.

60.0% Two Rivers LOGISTICS Holdings Corp.

OTHERS

(1) First Pacific Company Limited holds 40% equity interest in EIH 314 315

100.0% Philippine Hydro, Inc.

WATER 51.3% Maynilad Water 92.9% Maynilad Water Holding Company, Inc. Services, Inc.

5.2% 100.0% Amayi Water Solutions Inc.

MetroPac Water 100.0% Investments Corp.

MetroPac Cagayan Metro Pacific Water Equipacific Holdco Inc. METRO PACIFIC 100.0% De Oro, Inc. 30.0% 100.0% International Limited MetroPac Iloilo Laguna Water District B.O.O Phu Ninh Water Treatment INVESTMENTS 90.0% Aquatech Resources Corp. 55.4% Plant Joint Stock Company CORPORATION 100.0% Holdings Corp. Metro Iloilo Bulk Water Metropac Baguio Metro Pacific TL Water 80.0% Supply Corp. 100.0% Holdings Inc. 100.0% International Limited Tuan Loc Water Resources Metropac Cagayan De Investment Joint Stock Manila Water 49.0% 100.0% Oro Holdings, Inc. Company 39.0% Consortium Inc. Cagayan De Oro Bulk Water Song Lam Water Supply 95.0% Inc. 100.0% Company Limited 51.0% Cebu Manila Water Development, Inc. Metro Iloilo Concession 100.0% Cau Moi Lake Water Supply Joint Stock Company 100.0% Holdings Corp. Karayan Diliman Nhon Trach 6A Services Metro Pacific Iloilo Water 100.0% Management, Inc. Industrial Zone Company 40.0% 80.0% Inc. Limited

Eco-System Technologies MetroPac Dumaguete Subsidiary 65.0% International, Inc. 100.0% Holdings Corp. Associate/ Metro Pacific Dumaguete Joint Venture 80.0% Water Services Inc. Cavitex Infrastructure Southbend Express 100.0% Corporation(1) 100.0% Services, Inc.

(2) Metro Pacific Tollways NLEX Corporation TOLLROADS 75.1% (formerly Manila North Management Tollways Corp) 100.0% Services, Inc. (formerly M+ Corporation) 100.0% Collared Wren Holdings, Inc. 20.0% Metro Pacific Tollways 40.0% North Corporation 20.0% MPCALA Holdings, Inc METRO PACIFIC 100.0% (formerly Metro Pacific INVESTMENTS Tollways Development Corp.) 100.0% 20.0% CORPORATION Larkwing Holdings, Inc. Metro Strategic Infra 97.0% Holdings Inc. 100.0% Luzon Tollways 99.9% Corporation Metro Pacific Tollways 100.0% South Corporation Metro Pacific 100.0% Metro Pacific Tollways South Management Tollways Metro Pacific Tollways Corporation Corporation 100.0% Vizmin Corporation 100.0% MPTS Ventures CII Bridges and Roads Corporation Investment Joint Stock 44.9% Co. (Vietnam) 100.0% Cebu Cordova Easytrip Services Link Expressway 66.0% Corporation Corporation MPT Asia Corporation (formerly FPM Infrastructure A 100.0% Holdings Limited) Metro Pacific Tollways Asia, Corporation B 100.0% PTE. LTD. (1) By virtue of the Management Letter-Agreement, MPTC Subsidiary NLEX Ventures acquired control over CIC effective Jan 2, 2013. Associate/ 100.0% Corporation Joint Venture (2) 4.3% is owned through 42.8% ownership in Egis Investment Partners Philippines Inc. Dibztech, Inc. 100.0% 316 317

TOLLROADS

100.0% 76.3% PT Nusantara PT Metro Pacific Tollways Infrastructure Tbk Indonesia (Indonesia) (Indonesia) METRO PACIFIC 100.0% MPT Asia Corporation 100.0% MPT Vietnam Corporation INVESTMENTS (formerly FPM Infrastructure (BVI) CORPORATION Holdings Limited) A 100.0% MPT Thailand Corp 100.0% FPM Tollway (Thailand) (formerly FPM Tollway Limited 99.9% Holdings Limited) Metro Pacific 100.0% AIF Toll Roads Holdings Tollways (Thailand) Limited Corporation 100.0% Metro Pacific Tollways Vietnam Company Limited 29.5% (Vietnam) Don Muang Tollway 100.0% Public Company Ltd Metro Pacific Tollways 100.0% CAIF III Infrastructure Asia, Corporation Holdings Sdn Bhd (Thailand) PTE. LTD. (Singapore) (Malaysia) B 100.0% CIIF Infrastructure Holdings Sdn Bhd (Malaysia)

Subsidiary Associate/ Joint Venture TOLLROADS Metro Pacific Tollways Corporation

100.0%

PT Metro Pacific Tollways Indonesia

76.3%

PT Nusantara Infrastructure Tbk Metro Pacific Tollways 100.0% Asia, Corporation (Indonesia) PTE. LTD. Tollroads Water Energy Others

76.51% 99.99% 99.99% 100.0% CIIF Infrastructure 8.47% Holdings Sdn Bhd 99.99% PT Portco PT Energi (Malaysia) PT Margautama PT Potum Mundi Infranusantara Nusantara Infranusantara Infranusantara PT Intisentosa Alam 100.0% CAIF III Infrastructure 4.68% 39.0% Bahtera Holdings Sdn Bhd 61.2% PT Inpola Meka Energi 100.0% (Malaysia) 88.9% PT Bintaro Serpong PT Tirta Bangun 100.0% PT Telekom Damai Nusantara 80.0% PT Rezeki Perkasa Infranusantara Sejahtera Lestari 99.5% PT Tirta Kencana PT Bosowa Marga 70.0% PT Marga Metro Cahaya Mandiri Nusantara 28.0% 99.99% Nusantara PT Auriga Energi 74.5% PT Dain Celicani PT Jalan Tol Seksi Cemerlang 99.4% Empat 99.99% 85.0% 65.0% PT Sarana Catur Tirta PT Centara Energi Subsidiary PT Metro Jakarta Kelola Ekspresway 99.99% Associate/ PT Eris Serra Energi Joint Venture PT Sarana Tirta Rezeki 80.0% 10.0% 35.0% PT Jakarta Lingkar 99.99% PT Energi Parindu Baratsatu PT Jasa Sarana Nusa Nusantara 100.0% Makmur 99.99% PT EridanusaEnergi Nusantara 318 319

100.0% Beacon Electric 100.0% Beacon PowerGen Asset Holdings Inc. Holdings Inc.

POWER 35.0% 56.0%

10.5% Global Business Manila Electric Co. 14.0%(3) Power Corporation

100.0% Toledo Holdings 100.0% Global Hydro Power 89.3% Panay Power Corp.(1) Corp. Holdings Corp.

100.0% Panay Power Corp. 100.0% Global Trade Energy 100.0% ARB Power Resources Corp. Ventures, Inc. Panay Energy 100.0% METRO PACIFIC Development Corp. 93.2% Global Formosa 13.9% INVESTMENTS Toledo Power Co. Power Holdings, Inc. 86.1% 50.0% Alsons Thermal CORPORATION Cebu Energy Energy Corporation Development Corp. 100.0% Global Energy 56.0% Sarangani Energy Supply Corp. 75.0% Corporation 57.5% Lunar Power Core, (2) ACES Technical Services Inc. 100.0% Mindanao Energy 100.0% Corporation Global Luzon Development Corp. Energy Development 100.0% San Ramon Power Inc. 100.0% Corporation 100.0% Global Renewables 100.0% GBH Power Power Holdings Corp. Resources, Inc. Subsidiary 26.5% CACI Power Corporation PH Renewables, Inc. (4) 100.0% Associate/ Joint Venture

(1) Includes 16% shares owned by GBH Cebu Limited Duration Company which was assigned to GBPC but pending issuance of BIR Certificate Authorizing Registration. (2) GBPC owns 56.5% of common (voting) shares, and thus exercises 56.5% voting rights. (3) MERALCO owns 14% effective interest in GBPC through a wholly owned subsidiary Meralco PowerGen Corporation. (4) Purchase documents for PHRI were executed on December 15, 2020 but pending the issuance of a BIR Certificate Authorizing Registration on the shares purchased. Metro Pacific Hospital Holdings, Inc. (1) HOSPITAL AHI Hospital Holdings Corp. (formerly Bumrungrad 100.0% International Phils. Inc.) East Manila Hospital (Our 100.0% Managers Corp. Lady of Lourdes Hospital) Asian Hospital Inc. 58.1% 27.5% Manila Medical Central Luzon 20.0% Services, Inc. 51.0% Doctors' Hospital Metro CLDH Cancer Marikina Valley Sacred Heart Hospital 100.0% Center Corporation 93.1% Medical Center, Inc. 51.0% of Malolos Inc. METRO Colinas Verdes St. Elizabeth Hospital, PACIFIC Medical Doctors, Inc. Hospital Managers 33.8% 80.0% Inc. INVESTMENTS 100.0% Corp. (Cardinal Santos Computerized Imaging Metro SEHI Cancer Center Medical Center) 60.0% 100.0% CORPORATION Institute, Inc. Corporation 100.0% Colinas Healthcare, Inc. 65.1%(3) Medi Linx Laboratory 63.9% Western Mindanao 40.0% Inc. Medical Center, Inc. METRO PAC Davao Doctors Hospital 49.9% (Clinica Hilario) Inc. APOLLO 100.0% Metro Radlinks 100.0% Metro Pacific Davao Doctors Oncology HOLDING, INC. 30.0% Network Inc. Zamboanga Hospital Center Inc. (formerly Medigo Corporation) Corp. Allied Professional 35.1%(1) 100.0% West Metro Cancer Center Development Corp. 100.0% Corporation 100.0% Metro Cebu Metro Pacific 100.0% Davao Doctors College, Inc. Metro RMCI Cancer Center 49.0% Community Hospital, 51.0% Hospital Corp Inc. 56.2(2) Lipa Medix Cancer Center De Los Santos 50.0% Holdings, Inc. Corporation 79.1% 61.0% Medical Center, Inc. Santos Clinic Calamba Cancer Center Incorporated Subsidiary Delgado Clinic Inc. 20.0% Incorporated (Dr. Jesus Delgado Memorial Associate/ 65.0% Hospital) 78.0% Riverside Medical 51.0% Los Banos Doctors Joint Venture Caretech Medical Center Inc. Hospital and Medical 96.0% Services, Inc. Center, Inc. Riverside College Inc. 100.0% (1) Represents voting rights of common shares issued by MPHHI. Subject of an Exchangeable Bond covering 398,070,552 MPHHI common shares (refer to 2019 Audited Consolidated Financial Statements). (2) Represents voting rights of preferred shares issued by MPHHI (refer to 2019 Audited Consolidated Financial Statements). (3) Subject to a Call Option agreement granting the holder of the Option an irrevocable right to require MPIC to sell all or a portion of MPIC’s shares in Apollo (refer to 2019 Audited Consolidated Financial Statements). (4) Met Live Clinic, Festival Mall Clinic and Gateway Clinic are operated as branches of MSC. 320 321

Metro Pacific HOSPITAL Hospital Holdings, Inc.

55.0% Ramiro Community Hospital, Inc. Luther Z. Ramiro 90.0% Medical Center, Inc. METRO 29.5% Calamba Medical PACIFIC Center INVESTMENTS 43.6% South Luzon Hospital & CORPORATION Medical Center (3) 39.8% 65.1% Ca l amba Eye Ce nter, I nc.

METRO PAC 54.6% Ca l amba Ca ncer Center APOLLO Incorporated HOLDING, INC. 86.7% Calamba Kidney Care Center, Inc. 35.1%(1) 59.3% Metro Pacific Bi omed Tech Solutions, I nc Hospital 32.5% 56.2(2) La guna College of Bus. & Holdings, Inc. Arts 30.0% Calamba Events Center, Subsidiary Inc. Associate/ Joint Venture

(1) Represents voting rights of common shares issued by MPHHI. Subject of an Exchangeable Bond covering 398,070,552 MPHHI common shares (refer to 2019 Audited Consolidated Financial Statements). (2) Represents voting rights of preferred shares issued by MPHHI (refer to 2019 Audited Consolidated Financial Statements). (3) Subject to a Call Option agreement granting the holder of the Option an irrevocable right to require MPIC to sell all or a portion of MPIC’s shares in Apollo (refer to 2019 Audited Consolidated Financial Statements). RAIL

50.0% Light Rail Manila Holdings (1) Inc. 70.0% Light Rail

20.0% Manila Corporation Light Rail METRO PACIFIC 65.1% Metro Pacific INVESTMENTS Light Rail Manila Holdings 50.0% 2 Inc. (1, 2) CORPORATION Corporation Light Rail 50.0% Manila Holdings 6 Inc. (1, 2)

50.0% Porrovia Corporation (3) 50.0%

(1) Controlling interest in LRMHI, LRMH2 and LRMH6. Equity interest of 50% plus one share. (2) Corporate life has been shortened to until September 30, 2021. (3) Corporate life has been shortened to until March 31, 2019. 322 323

LOGISTICS & SYSTEMS

MetroPac 100.0% 100.0% LogisticsPro, Trucking Inc. Company, Inc.

100.0% TruckingPro, Inc.

METRO PACIFIC MetroPac 100.0% 99.1% MetroPac 100.0% Logistics PremierLogistics, INVESTMENTS Movers Inc. Inc. CORPORATION Company, Inc. 100.0% PremierTrucking, Inc.

20.0% AF Payments, 100.0% Inc. OneLogistics, Inc.

25.0% Indra Philippines, Inc. Subsidiary Associate/ Joint Venture Neo Oracle Metro Pacific Pollux Realty (1) Holdings, Inc. Management Services, Development Corporation 96.6% 100.0% Inc. 100.0% OTHERS Fragrant Cedar 100.0% Holdings Inc. Metro Tagaytay Land Co., Costa de Madera Inc Corporation Metro Pacific 100.0% 62.0% Resource Recovery Pacific Plaza Towers 100.0% Corp. (2) Metro Asia Link Holdings, Management Services, Inc. 100.0% Inc. 60.0% MPIC Infrastructure Holdings Limited 100.0% First Pacific Bancshares First Pacific Realty Philippines, Inc. (5) Partners Corporation (7) 30.7% Metro Global Green 100.0% 20.0% 70.0% Waste, Inc. (3) Philippine International Metro Pacific Land Metro Vantage 100.0% Paper Corporation (6) Holdings, Inc. (8) 49.0% 100.0% Properties, Inc. QC Integrated Waste MetPower Ventures Management (1) Partners Holdings, 100.0% End of corporate life (under liquidation) METRO PACIFIC Holdings Inc, (2) Formerly MetroPac Clean Energy 100.0% Inc. INVESTMENTS 100.0% Holdings Corporation. MetroPac Property (3) Metro Pacific Health Corporate life has been shortened to CORPORATION Holdings, Inc. until December 31, 2017. 100.0% Tech Corporation (4) 100.0% Corporate life has been shortened to Millennial Resorts until December 31, 2016. First Gen Northern Corporation (5) Corporate life has been shortened to (4) 33.3% Energy Corp until October 31, 2019. 100.0% SCENIQ Lifestyle (6) Corporate life has been shortened to Corporation Landco Pacific until February 28, 2020. 38.1% Corporation (7) Corporate life has been shortened to until May 31, 2018. KM Infrastructure (8) Corporate life has been shortened to 100.0% Holdings, Inc. Surallah Biogas until July 31, 2019. 80.0% Ventures Corp. Hyperion Storage Holdings 100.0% Corporation

Razor Crest Storage Infrastructure Subsidiary 100.0% Holdings Associate/ Corporation Joint Venture 324 Corporate Directory

HEADQUARTERS LEGAL ADVISERS 10th floor, Makati General Office Building Legazpi corner Dela Rosa Streets Picazo, Buyco, Tan, Fider & Santos Legazpi Village, 0721 Makati City 10th floor, Liberty Center Philippines 104 H.V. De la Costa Street Telephone (632) 8888-0888 Legazpi Village, Makati City Facsimile (632) 8888-0813 Telephone – (632) 8888-0999 Email [email protected] Facsimile (632) 8888-1011 [email protected] Website http://www.mpic.com.ph Sycip Salazar Hernandez Gatmaitan SSHG Law Center SHARE LISTING INFORMATION 105 Metro Pacific Investments Corporation Makati City, 1226 Metro Manila Is traded in the Philippines Stock Exchange Telephone (632) 8817-9811 under the ticker symbol “MPI” Facsimile (632) 8818-7562 Listing date: 15 December 2006 STOCK TRANSFER AGENT AMERICAN DEPOSITARY ADR Ticker: MPCIY Stock Transfer Services, Inc. CUSIP: US59164L2007 34th Floor, Unit D Ratio: 1 ADR: 200 ordinary shares Rufino Pacific Tower Depositary Bank: Deutsche Bank Trust 6784 Ayala Avenue, Makati City and Company Americas Telephone (632) 8403-2410 / (632) 8403-2412

AUDITORS SyCip Gorres Velayo & Co. 6769 Ayala Avenue 1226 Makati City Philippines

PRINCIPAL BANKERS Banco de Oro Universal Bank Metropolitan Bank and Trust Company Philippine National Bank Union Bank of the Philippines Metro Pacific Investments Corporation 10/F MGO Building, Legaspi corner Dela Rosa Streets, Makati City, 0721, Philippines +63 2 8888 0888 www.mpic.com.ph