SUSTAINABILITY REPORT 2016 Sustainability Report 2016 1 Table of Contents 2 About Metro Pacific Investments Corporation 3 About the Report 4 Message from the Chairman, President and CEO, and CFO 6 Corporate Structure 8 Key Sectors 9 Products and Services 10 Our Sustainability Performance in 2016 12 Sustainability at MPIC 22 Creating Value for Stakeholders 24 Core Drivers of MPIC 36 Power 38 Manila Electric Company (MERALCO) 52 Global Business Power Corporation (GBP) 66 Water 68 Maynilad Water Services, Inc. (Maynilad) 82 Toll Roads 84 Manila North Tollway Corporation (MNTC) 84 Tollways Management Corporation (TMC) 84 CAVITEX Infrastructure Corporation (CIC) 98 Light Rail 100 Light Rail Manila Corporation (LRMC) 112 Hospitals 118 Asian Hospital, Inc. (AHI) 124 Makati Medical Center (MMC) 132 Cardinal Santos Medical Center (CSMC) 140 GRI Content Index 2 Sustainability Report 2016 Metro Pacific Investments G4-3, G4-56 About Metro Pacific Investments Corporation Metro Pacific Investments Corporation (MPIC) MPIC maximizes returns for its shareholders is a Philippine-based, publicly-listed investment by investing in and managing businesses which management and holding company registered deliver high-quality, well-run, and fairly-priced with the Philippine Securities and Exchange infrastructure in the Philippines and elsewhere Commission (SEC) on March 20, 2006. We are the in the region. These infrastructure investments leading infrastructure holding company in the are long-term propositions supported by the Philippines with a diverse set of infrastructure Company’s commensurate investment in the assets through our investments in power, water long-term welfare of its stakeholders. utilities, toll roads, hospital operations, light rail, and logistics. With headquarters in the Makati Central Business District of Manila, MPIC has established its MPIC is proud of its services which include presence throughout the Philippines with its providing first class medical care, safe and operating businesses. As a group, it provides efficient road and rail transportation, generating livelihood to over 22,000 people. and distributing electricity and delivering clean and safe drinking water to the public. Our Mission Our Values We are the leading Philippine infrastructure Teamwork and Empowerment investment firm. We manage, transform and grow our companies while continuously seeking • We recognize the diverse strength and investment opportunities to create long-term abilities within the team. value for our shareholders. • We enable and inspire people to achieve superior results. Our Vision Integrity and Transparency We have a stellar portfolio of infrastructure • We adhere to the highest ethical and assets, each being the dominant player in its corporate governance standards. field. We are admired globally for excellence in investing in and transforming infrastructure. Entrepreneurship We attract, retain and develop world-class talent. Through our companies and foundation, • We innovate, take risks, act quickly and we significantly contribute to the economic decisively, and are customer focused. development of the Philippines and thereby uplift the quality of life of every Filipino. Financial Discipline and Accountability • We employ rigorous financial analysis to arrive at sound business decisions. • We are results-driven and meet our commitments. 3 G4-5, G4-28, G4-30, G4-31 About the Report This is MPIC’s inaugural Sustainability Report (the “Report”) covering the year ended December 31, 2016 and was prepared in accordance with the “core” option of the Global Reporting Initiative (GRI) G4 guidelines. The Group’s key operational and non-financial results are summarized in this Report. The scope of this report covers the following operating companies: • Manila Electric Company • Global Business Power Corporation • Maynilad Water Services, Inc. • Manila North Tollways Corporation • Tollways Management Corporation • CAVITEX Infrastructure Corporation • Light Rail Manila Corporation • Asian Hospital, Inc. • Makati Medical Center • Cardinal Santos Medical Center This Report was reviewed by the relevant operating companies management and the Corporate Governance Committee of MPIC and was approved by the Board of Directors on November 8, 2017. We welcome all feedback on the contents of this Report or on any matter relating to MPIC’s sustainability initiatives and practices. For comments and feedback, please contact us at: Metro Pacific Investments Corporation 10/F MGO Building Legaspi cor. Dela Rosa Streets Makati City, 0721 Philippines +63 2 888 0888 http://www.mpic.com.ph/contact-us/ 4 Sustainability Report 2016 Metro Pacific Investments G4-1 Message from the Chairman, President and CEO, and CFO TO OUR FELLOW STAKEHOLDERS, We are pleased to share with you our first At the heart of MPIC’s investment thesis is the Sustainability Report covering the year ended belief that provision of high quality, well run and 31st December 2016, the year we celebrated 10 fairly-priced essential services is compatible with years of being a listed company in the Philippines. both the overall public good and a fair return to our investors. We believe that our companies will Ten years ago, MPIC started its journey with thrive only if we are able to deliver good customer 16 employees and one investment. Now, MPIC experience at a fair price. has grown to encompass six key business segments— Power, Water, Toll Roads, Hospitals, We have taken on difficult or even failing projects Light Rail and Logistics. As of 31 December and turned them around. These include a number 2016, the MPIC Head Office had 49 employees of hospitals on the verge of failure; an insolvent and a workforce of over 22,000 through the water concession; a utility company with a history businesses we invest in and manage. of regulatory difficulties unable to invest in service provision; a toll road project which took over Power, water, roads, transportation, and hospitals six years to gain approval; and a rail project for are all essential services that society relies on which there were no other private sector bidders. every day. We are keenly aware of the role that we have taken on and the significance of ensuring MPIC has established itself as an economic long-term growth and viability of our businesses partner in nation building. We are also providing for the good of all our stakeholders. extensive employment opportunities and have paid over ₱151 Billion in taxes (net of pass- It is in this spirit of sustainable business practice through taxes) to the National Government in the that we continuously strive for improvement past ten years. and innovation in our businesses as well as engagement with the communities we operate in. Power, water, roads, transportation, and hospitals are all essential services that society relies on every day. We are keenly aware of the role that we have taken on and the significance of ensuring long-term growth and viability of our businesses for the good of all our stakeholders. MANUEL V. PANGILINAN, Chairman 5 Our achievements to date have only been made This Sustainability Report is a way for us to possible through the array of excellent partners articulate our position to date and to set out we have worked with. We therefore take this measures we will work to improve in future. opportunity to acknowledge all our stakeholders— We hope this Report will be useful and interesting each one playing a significant part in helping to for you. bring MPIC to its current position. MANUEL V. PANGILINAN JOSE MA. K. LIM DAVID J. NICOL Chairman President and Chief Financial Officer Chief Executive Officer 6 Sustainability Report 2016 Metro Pacific Investments G4-4, G4-7 COCorporateRPORATE STR StructureUCTURE (as of June 2017) Details of the Corporate Structure are in MPIC’s 2016 Audited Consolidated Financial Statements POWER WATER POWER WATER 45.5% 52.8% M45.5%anila Electric Company (MERALCO) is the largest Maynilad52.8% Water Services, Inc. is the largest water eleManilactric Eledistributionctric Compa company (MERAny in LtheCO )Philippine is the largests, concessionaireMaynilad Water in Services, terms of Inc. customer is the largest base in water the distributingelectric distribution 55% of Philippine company inene thergy Philippine consumption,s, Philippines,concessionaire providing in terms water of customer and sewerage base in services the includingdistributing Metro 55% Manila, of Philippine serving ene approximatelyrgy consumption, 28 toPhilippines, 9.3 million providing customers water across and cities sewerage and municipalities services millionincluding people Metro through Manila, its serving 6.3 million approximately billed customers. 28 into the9.3 Westmillion Service customers Area ofacross Metro cities Manila and through municipalities its million people through its 6.3 million billed customers. approximatelyin the West Service 1.4 million Area of billed Metro customers. Manila through its 100.0%approximately 1.4 million billed customers. 62.4% M100.0%etroPac Water Investments Corporation is an Global62.4% Business Power Corporation is a iMnvetestmentroPac W holdingater Investments company C whichorporation opera iste ans, leadingGlobal Business power p rPoduowercer C orporationin the Visayas is a Re gion manageinvestments, maintains holding candompa rehabilitany whichtes opera watetrewsork, s, andleading Mindo porwoer Islan produd, withcer ina ctheombined Visayas g Rerossgion semanagewerages, andmaintains sanitation and srehabilitaystems andtes sewarvitecreswork of