COVER SHEET C 1 9 9 8 0 0 1 3 4 S.E.C. Registration Number A B O I T I Z P O W E R C O R P O R A T I O N ( Company's Full Name ) 3 2 N D S T R E E T , B O N I F A C I O G L O B A L C I T Y , T A G U I G C I T Y , M E T R O M A N I L A P H I L I P P I N E S (Business Address: No. Street City / Town / Province ) MANUEL ALBERTO R. COLAYCO 02- 886-2338 Contact Person Company Telephone Number Contact Person 3rd Monday of Annual Report May 1 2 3 1 1 7 - A 0 5 2 1 Month Day FORM TYPE Month Day Fiscal Year Annual Meeting N/A Secondary License Type, if Applicable SEC N/A Dept. Requiring this Doc Amended Articles Number/Section x Total No. of Stockholders Domestic Foreign - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To be accomplished by SEC Personnel concerned File Number LCU Document I.D. Cashier S T A M P S Remarks = Pls. use black ink for scanning purposes 13. State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within sixty (60) days prior to the date of filing. If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided the assumptions are set forth in this Form. For 2017, aggregate voting stock of registrant held outside of its affiliates and/or officers and employees totaled 1,385,561,277 shares (for details please refer to the attached notes to financial statements and Schedule H of this report) while its average market price per share was ₱41.55. Based on this data, total market value of registrant’s voting stock not held by its affiliates and/or officers and employees was computed to be ₱57,570,071,059.35. APPLICABLE ONLY TO REGISTRANTS INVOLVED IN INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS DURING THE PRECEDING FIVE YEARS: 14. Check whether the registrant has filed all documents and reports required to be filed by Section 17 of the RSA subsequent to the distribution of securities under a plan confirmed by a court or the SEC. Yes ( ) No () DOCUMENTS INCORPORATED BY REFERENCE 15. If any of the following documents are incorporated by reference, briefly describe them and identify the part of SEC Form 17-A into which the document is incorporated: (a) Any annual report to security holders; (b) Any information statement filed pursuant to SRC Rule 20; (c) Any prospectus filed pursuant to SRC Rule 8.1. TABLE OF CONTENTS PART I BUSINESS AND GENERAL INFORMATION Item 1 Business 1 Item 2 Properties 64 Item 3 Legal Proceedings 65 Item 4 Submission of Matters to a Vote of Security Holders 75 PART II OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market for Issuer’s Common Equity and Related Stockholder Matters 76 Item 6 Management’s Discussion and Analysis or Plan of Operations 78 Item 7 Financial Statements and Supplementary Schedules 98 Item 8 Changes in and Disagreements with Accountants on Accounting and 99 Financial Disclosures PART III CONTROL AND COMPENSATION INFORMATION Item 9 Directors and Executive Officers of the Issuer 100 Item 10 Executive Compensation 116 Item 11 Security Ownership of Certain Beneficial Owners and Management 117 Item 12 Certain Relationships and Related Transactions 120 PART IV CORPORATE GOVERNANCE Item 13 Corporate Governance 122 PART V EXHIBITS AND SCHEDULES Item 14 Exhibits 122 Reports on SEC Form 17-C (Current Report) 122 SIGNATURES 124 ANNEX A CORPORATE STRUCTURE 126 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES PART 1 – BUSINESS AND GENERAL INFORMATION Item 1. Business (1) Business Development Incorporated in 1998, AboitizPower is a publicly-listed holding company that, through its Subsidiaries and Affiliates, is a leader in the Philippine power industry and has interests in a number of privately-owned generation companies, retail electricity supply services, and distribution utilities. AEV owns 76.88% of the outstanding capital stock of AboitizPower as of March 28, 2018. The Aboitiz Group’s involvement in the power industry began when members of the Aboitiz family acquired 20% ownership interest in Visayan Electric Company, Inc. (VECO) in the early 1900s. The Aboitiz Group’s direct and active involvement in the power distribution industry can be traced to the 1930s when Aboitiz & Company, Inc. (ACO) acquired Ormoc Electric Light Company and its accompanying ice plant, Jolo Power Company, and Cotabato Light & Power Company (Cotabato Light). In July 1946, the Aboitiz Group strengthened its position in power distribution in Southern Philippines when it acquired Davao Light & Power Company, Inc. (Davao Light), which is now the third largest privately-owned electric utility in the Philippines in terms of customers and annual gigawatt hour (GWh) sales. In December 1978, ACO divested its ownership interests in Ormoc Electric Light Company and Jolo Power Company to allow these companies to be converted into electric cooperatives, which was the policy being promoted by former President Ferdinand Marcos. ACO sold these two companies and scaled down its participation in the power distribution business in order to focus on the more lucrative franchises held by Cotabato Light, Davao Light, and VECO. In response to the Philippines’ pressing need for adequate power supply, the Aboitiz Group became involved in power generation, becoming a pioneer and industry leader in hydroelectric energy. In 1978, the Aboitiz Group incorporated Hydro-Electric Development Corporation (HEDC). HEDC carried out feasibility studies (including hydrological and geological studies), hydroelectric power installation and maintenance, and also developed hydroelectric projects in and around Davao City. On June 26, 1990, the Aboitiz Group also incorporated Northern Mini-Hydro Corporation (now Cleanergy, Inc.), which focused on the development of mini-hydroelectric projects in Benguet province in northern Luzon. By 1990, HEDC and Cleanergy had commissioned and were operating 14 plants with combined installed capacity of 36 MW. In 1996, the Aboitiz Group led the consortium that entered into a Build-Operate- Transfer (BOT) agreement with the National Power Corporation (NPC) to develop and operate the 70-MW Bakun AC hydroelectric plant in Ilocos Sur ("Bakun AC Plant"). AboitizPower was incorporated on February 13, 1998 as a holding company for the Aboitiz Group’s investments in power generation and distribution. However, in order to prepare for growth in the power generation industry, AboitizPower was repositioned in the third quarter of 2003 as a holding company that owned power generation assets only. The divestment by AboitizPower of its power distribution assets was achieved through a property dividend declaration in the form of AboitizPower’s ownership interests in the different power distribution companies. The property dividend declaration effectively transferred direct control over the Aboitiz Group’s power distribution business to AEV. Further, in 2005, AboitizPower consolidated its investments in mini- hydroelectric plants in a single company by transferring all of HEDC’s and Cleanergy’s mini-hydroelectric assets to Hedcor, Inc. (Hedcor). In December 2006, the Company and its partner, Statkraft Norfund Power Invest AS of Norway, through SN Aboitiz Power-Magat, Inc. (SN Aboitiz Power-Magat), submitted the highest bid for the 360-MW Magat hydroelectric plant (Magat Plant) auctioned by the Power Sector Assets and Liabilities Management (PSALM) Corporation. The price offered was US$530 million (mn). PSALM turned over possession and control of the Magat Plant to SN Aboitiz Power-Magat on April 26, 2007. In a share swap agreement with AEV on January 20, 2007, AboitizPower issued a total of 2,889,320,292 of its common shares in exchange for AEV’s ownership interests in the following Distribution Utilities: (a) An effective 55% equity interest in VECO, which is the second largest privately-owned distribution utility in the Philippines in terms of customers and annual GWh sales and is the largest distribution utility in 1 ∙ SEC FORM 17-A (ANNUAL REPORT) the Visayas region; (b) 100% equity interest in each of Davao Light and Cotabato Light. Davao Light is the third largest privately owned distribution utility in the Philippines in terms of customers and annual GWh sales; (c) An effective 64% ownership interest in Subic EnerZone Corporation (SEZ), which manages the Power Distribution System of the Subic Bay Metropolitan Authority (SBMA); and (d) An effective 44% ownership interest in San Fernando Electric Light and Power Co., Inc. (SFELAPCO), which holds the franchise to distribute electricity in the city of San Fernando, Pampanga, in Central Luzon and its surrounding areas. In February 2007, the Company, through its wholly-owned Subsidiary, Therma Power, Inc. (TPI), entered into a Memorandum of Agreement (MOA) with Taiwan Cogeneration International Corporation (TCIC) to collaborate in the building and operation of an independent coal-fired power plant in the Subic Bay Freeport Zone, called the Subic Coal Project. In May 2007, Redondo Peninsula Energy, Inc. (RP Energy) was incorporated as the project company that will undertake the Subic Coal Project. In July 2011, Meralco PowerGen Corporation (MPGC), TCIC, and TPI entered into a Shareholders’ Agreement to formalize their participation in RP Energy. MPGC took the controlling interest in RP Energy, while TCIC and TPI maintained the remaining stake equally. On April 20, 2007, the Company acquired 50% of the outstanding capital stock of East Asia Utilities Corporation (EAUC) from El Paso Philippines Energy Company, Inc.