AP 17A Dec2011 (AR 2011)

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 )
A B O I T I Z C O R P O R A T E C E N T E R
G O V . M A N U E L A . C U E N C O A V E .
K A S A M B A G A N , C E B U C I T Y
( Business Address: No. Street City / Town / Province )
M. JASMINE S. OPORTO (032) 411-1801

Contact Person Company Telephone Number
ANNUAL REPORT 2011
1 2 3 1 1 7 - A 0 5 2 1
Month Day FORM TYPE Month Day
Fiscal Year Annual Meeting
Secondary License Type, if Applicable
S E C
Dept. Requiring this Doc Amended Articles Number/Section
532 x
Total No. of Stockholders Domestic Foreign
----------------------------------------------------------------------
To be accomplished by SEC Personnel concerned
File Number LCU
Document I.D. Cashier
STAMPS
Remarks = pls. Use black ink for scanning purposes

SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17‐A
ANNUAL REPORT PURSUANT TO SECTION 17

OF THE SECURITIES REGULATION CODE AND SECTION 141
OF THE CORPORATION CODE OF THE PHILIPPINES
1. For the year ended 2011
2. SEC Identification Number C199800134 3. BIR TIN 200‐652‐460
4. Exact name of registrant as specified in its charter Aboitiz Power Corporation
5. Cebu City, Philippines 6.

Province, country or other jurisdiction Industry Classification Code
of incorporation
7. Gov. Manuel A. Cuenco Ave., Kasambagan, Cebu City 6000

Address of principal office Postal Code
8. (032) 411‐1800
Issuer’s telephone number, including area code
9. NA
Former name or former address, if changed since last report
10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Section 4 and 8 of the RSA.
Title of Each Class Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding
Common (as of December 31, 2011) 7,358,604,307
Total Debt (as of December 31, 2011) P73, 197,511, 000.00
11. Are any or all of the securities listed on a Stock Exchange?
Yes ( 9 ) No ( )
If yes, state the name of such stock exchange and the classes of securities listed therein:
Philippine Stock Exchange Common
12. Check whether the registrant:
(a) has filed all reports required to be filed by Section 17 of the Securities Regulation Code
(SRC) and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11 (a)‐1
thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the
1 • SEC FORM 17-A (ANNUAL REPORT)

preceding 12 months (or for such shorter period that the registrant was required to file such
reports);
Yes ( 9 ) No ( )
(b) has been subject to such filing requirements for the past 90 days.
Yes ( 9 ) No ( )
13. State the aggregate market value of the voting stock held by non‐affiliates of the registrant.
The aggregate market value shall be computed by reference to the price at which the stock was
sold, or the average bid and asked 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 2011, aggregate voting stock of registrant held outside of its affiliates and/or officers and
employees totaled 1,492,129 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 P29.82.
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 P44,495,286.78.
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 ( 9 )
DOCUMENTS INCORPORATED BY REFERENCE
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.

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 and distribution utilities. AEV owns 76.40 % of the outstanding capital stock of
AboitizPower as of March 30, 2012.
The Aboitiz Group’s involvement in the power industry began when members of the Aboitiz family
acquired a 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 the Ormoc Electric Light Company and its
accompanying ice plant, the Jolo Power Company and Cotabato Light & Power Company (Cotabato
Light). In July 1946, the Aboitiz Group strengthened its position in power distribution in the 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 the Ormoc Electric Light Company and the
Jolo Power Company to allow these companies to be converted into electric cooperatives, which was the
policy being promoted by the government of then‐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) and hydroelectric power installation and
maintenance and also developed hydroelectric projects in and around Davao City. The Aboitiz Group
also incorporated Northern Mini‐Hydro Corporation (now Cleanergy, Inc.) on June 26, 1990, 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 a combined installed
capacity of 36 megawatts (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 province.
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 into Hedcor, Inc.
In December 2006, the Company and its partner, SN Power Invest AS (SN Power) of Norway, through SN
Aboitiz Power‐Magat, Inc. (SNAP‐Magat) submitted the highest bid for the 360 MW Magat hydroelectric
plant auctioned by PSALM. The price offered was USD530 mn. PSALM turned over possession and
control of the Magat Plant to SNAP‐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 companies,
as follows:
• An effective 55% ownership 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 the Visayas region;
• A 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;
• An effective 64% ownership interest in Subic Enerzone Corporation (SEZ), which
manages the Power Distribution System (PDS) of the Subic Bay Metropolitan
Authority (SBMA); and
• An effective 44% ownership interest in San Fernando Electric Light and Power
Company (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 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 (SBFZ). In May 2007 Redondo Peninsula Energy, Inc. (RP Energy) was incorporated as the
project company that will undertake the Subic Coal Project. In June 2011, TPI entered into a
Shareholders Agreement with TCIC and Meralco PowerGen Corporation (MPGC) to formalize MPGC’s
participation in the Subic Coal Project. On July 22, 2011, MPGC acquired a majority interest in RP Energy
through a Share Purchase Agreement with TCIC and TPI. MPGC took the controlling interest in RP
Energy, while TCIC and TPI maintained their remaining stake equally. Commercial operations of the
Subic Coal Project is projected to commence in 2014.
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. (El Paso Philippines). EAUC operates
a Bunker C‐fired plant with a capacity of 50 MW within the Mactan Export Processing Zone I (MEPZ I) in
Mactan Island, Cebu. On the same date, the Company also acquired from EAUC 60% of the outstanding
common shares of Cebu Private Power Corporation (CPPC). CPPC operates a 70 MW Bunker C‐fired
plant in Cebu City.

On June 8, 2007, as part of the reorganization of the power‐related assets of the Aboitiz Group, the
Company agreed to acquire from its affiliate, Aboitiz Land, Inc. (AboitizLand) a 100% interest in Mactan
Enerzone Corporation (MEZ), which owns and operates the PDS in the MEPZ II in Mactan Island in Cebu,
and a 60% interest in Balamban Enerzone Corporation (BEZ), which owns and operates the PDS in the
West Cebu Industrial Park‐Special Economic Zone (WCIP‐SEZ) in Balamban town in the western part of
Cebu. The Company also consolidated its ownership interest in SEZ by acquiring the combined 25%
interest in SEZ held by AEV, SFELAPCO, Okeelanta Corporation (Okeelanta) and Pampanga Sugar
Development Corporation (PASUDECO). These acquisitions were made through a share swap
agreement which involved the issuance of a total of 170,940,307 common shares of the Company issued
at the initial public offering price of P5.80 per share in exchange for the foregoing equity interests in
MEZ, BEZ and SEZ.
Ownership in AboitizPower was opened to the public through an initial public offering of its common
shares in July 2007. Its common shares were officially listed in the Philippine Stock Exchange (PSE) on
July 16, 2007.
In August 2007, the Company, together with Vivant Energy Corporation (Vivant) of the Garcia Group,
signed a memorandum of agreement with Global Business Power Corporation (Global Power) of the
Metrobank Group for the construction and operation of a 3 x 82 MW coal‐fired power plant in Toledo
City, Cebu. The Company, together with the Garcia Group, formed Abovant Holdings, Inc. (Abovant).
The Company owns 60% of Abovant. The project, which is being undertaken by Cebu Energy
Development Corporation (Cebu Energy), a joint venture company among Global Power, Formosa Heavy
Industries and Abovant, broke ground last January 2008 and started full commercial operations on
February 26, 2011. The Company has an effective participation of 26.40% in the project.
On November 15, 2007, AboitizPower closed the purchase of a 34% equity ownership in STEAG State
Power Inc. (STEAG), owner and operator of a 232 MW coal‐fired power plant located in the PHIVIDEC
Industrial Estate in Misamis Oriental, Northern Mindanao. The Company won the competitive bid to buy
the 34% equity from Evonik Steag GmbH (formerly known as Steag GmbH) in August 2007. The total
purchase price for the 34% equity in STEAG is USD102 mn, inclusive of interests.
On November 28, 2007, SN Aboitiz Power‐Benguet, Inc. (SNAP‐Benguet), a consortium between

AboitizPower and SN Power, submitted the highest bid for the Ambuklao‐Binga Hydroelectric Power
Complex consisting of the 75 MW Ambuklao Hydroelectric Power Plant located at Bokod, Benguet and
the 100 MW Binga Hydroelectric Power Plant located at Itogon, Benguet. The price offered amounted to
USD325 mn.
In 2007, AboitizPower entered into an agreement to buy the 20% equity of Team Philippines in
SEZ for P92 mn. Together with the 35% equity in SEZ of AboitizPower’s subsidiary Davao Light,
this acquisition brought AboitizPower’s total equity in SEZ to 100%.
In 2008, AboitizPower bought the 40% equity ownership of Tsuneishi Holdings (Cebu), Inc. (THC) in BEZ
for approximately P178 mn. The acquisition brought AboitizPower’s total equity in BEZ to 100%.

Last May 26, 2009, AP Renewables, Inc., (APRI), a wholly owned subsidiary of AboitizPower, took over
the ownership and operations of the 289 MW Tiwi geothermal power plant facility in Albay and the 458
MW Makiling‐Banahaw geothermal power plant facility in Laguna (collectively referred to as the “Tiwi‐
MakBan geothermal facilities”) after winning the competitive bid conducted by PSALM on July 30, 2008.
The Tiwi‐MakBan geothermal facilities have a sustainable capacity of approximately 462 MW.
Therma Luzon, Inc. (TLI), a wholly owned subsidiary of AboitizPower, won the competitive bid for the
appointment of the Independent Power Producer (IPP) Administrator of the 700 MW Contracted
Capacity of the Pagbilao Coal Fired Power Plant (the Pagbilao IPPA) last August 28, 2009. It assumed
dispatch control of the Pagbilao power plant last October 1, 2009, becoming the first IPP Administrator
in the country. As IPP Administrator, TLI is responsible for procuring the fuel requirements of, and for
selling the electricity generated by, the Pagbilao power plant. The Pagbilao power plant is located in
Pagbilao, Quezon.
AboitizPower, through its wholly owned subsidiary, Therma Marine, Inc. (TMI), assumed ownership
over Mobile 1 and Mobile 2 last February 6, 2010 and March 1, 2010, respectively, after acquiring the
two power barges from PSALM for USD30 mn through a negotiated bid concluded last July 31, 2009.
Each of the barge mounted diesel powered generation plants has a generating capacity of 100 MW.
Mobile 2 and Mobile 1 are moored at Nasipit, Agusan del Norte and Barangay San Roque, Maco,
Compostela Valley, respectively. Prior to AboitizPower’s acquisition of the barges, Mobile 1 was
referred to as Power Barge (PB) 118 while Mobile 2 was referred to as PB117.
On May 27, 2011, Therma Mobile, Inc. (Therma Mobile), a wholly‐owned subsidiary of AboitizPower,
acquired four barge‐mounted floating power plants, including their respective operating facilities from
Duracom Mobile Power Corporation and East Asia Diesel Power Corporation.
The Company plans to implement a corporate reorganization that will put all its renewable energy assets
under Aboitiz Renewables, Inc. (ARI) (formerly Philippine Hydropower Corporation), and all its non‐
renewable generation assets under TPI.
Neither AboitizPower nor any of its Subsidiaries has ever been the subject of any bankruptcy,
receivership or similar proceedings.
(2) Business of Issuer
With investments in power generation and distribution companies throughout the Philippines,
AboitizPower is considered one of the leading Filipino‐owned companies in the power industry (Please
see Annex “C” hereof for AboitizPower’s Corporate Structure).

(i) Principal Products
GENERATION OF ELECTRICITY
Since its incorporation in 1998, AboitizPower has accumulated interests in both renewable and non‐
renewable generation plants. As of December 31, 2011, approximately 93% of AboitizPower’s net
income from business segments is derived from its power generation business. AboitizPower conducts
its power generation activities through the following subsidiaries and affiliates:
The table below summarizes the Generation Companies’ operating results as of December 31, 2011.
Energy Energy Sold Energy

Generation Sold Generation Sold Revenue Revenue Revenue
Companies Generation Generation
2011 2010 2009 2011 2010 2009
(In GWh) (in Mn Pesos)
APRI 1 3,310 3,483 1,886 14,721 16,383 6,843
Hedcor, Inc. 170 155 171 853 704 703
LHC 251 282 324 633 935 1,223
Hedcor Sibulan 205 108 N/A 1,056 529 N/A
SNAP ‐ Magat 615 673 1,150 12,572 7,804 3,971
SNAP ‐ Benguet 330 265 413 4,028 2,828 1,063
TLI 2 3,402 3,540 767 17,595 22,426 2,801
Cebu Energy 3 1,336 561 N/A 7,511 N/A N/A
STEAG 1,456 1,553 1,384 7,549 6,577 6,206
WMPC 443 498 220 1,352 1,319 1,207
SPPC 268 315 226 707 707 688
CPPC 110 246 318 1,551 2,043 2,119
EAUC 95 224 202 993 1,741 1,382
TMI 4 517 767 N/A 5,110 4,898 N/A
Davao Light 5 0 41 4 Revenue Revenue Revenue
neutral neutral neutral
Cotabato Light 6 0 5 1 Revenue Revenue Revenue
neutral neutral neutral
TOTAL 12,508 12,716 7,069 76,231 74,937 28,206
(1) The Tiwi‐MakBan geothermal plants were turned over to APRI on May 26, 2009.
(2) TLI assumed dispatch control of the Pagbilao plant last October 1, 2009.
(3) The Cebu Energy coal‐fired power plant was completed as follows: Unit 1 in First quarter of 2010, Units 2 and 3 in second and fourth quarters of
2010, respectively. In 2010, the plant was still being commissioned, thus at pre‐operating stage. No revenues were booked during the year.
AboitizPower has an effective participation of 26% in the project.
(4) Mobile 1 and Mobile 2 were turned over to TMI on February 6, 2010 and March 1, 2010, respectively.
(5) Plants are operated as stand‐by plants and are revenue neutral, with costs for operating each plant recovered by Davao Light and Cotabato
Light, as the case may be, as approved by the ERC.
(6) Ibid.

Aboitiz Renewables, Inc. (ARI)
AboitizPower, one of the leading providers of renewable energy in the country, holds all its investments
in renewable energy through its wholly owned subsidiary, ARI. ARI owns equity interests in the following
Generation Companies:
• 100% equity interest in APRI which owns the Tiwi‐MakBan geothermal facilities.
• 100% equity interest in Hedcor, Inc., which operates 16 mini‐hydroelectric plants (plants
with less than 10 MW in installed capacity) in Benguet province in Northern Luzon and in
Davao City in Southeastern Mindanao with a total installed capacity of 42.2 MW.
• 100% equity interest in LHC, which operates the 70 MW Bakun AC hydroelectric plant in
Ilocos Sur province in northern Luzon.
• 50% effective interest in SNAP‐Magat, which operates the 360 MW Magat hydroelectric
plant in Isabela in northern Luzon.
• 50% effective interest in SNAP‐Benguet, which operates the 210 MW Ambuklao‐Binga
Hydroelectric Power Plant Complex in Northern Luzon.
• 100% equity interest in Hedcor Sibulan, Inc. (Hedcor Sibulan), which operates the 42.5 MW
Sibulan Hydroelectric Plants in Santa Cruz, Davao del Sur.
• 100% equity interest in Hedcor Tamugan, Inc. (Hedcor Tamugan), which proposes to build a
11.5 MW Tamugan hydropower project along the Tamugan River in Davao City.
• 100% equity interest in Hedcor Tudaya, Inc. (Hedcor Tudaya), which proposes to build the
6.6 MW Tudaya 1 and 7 MW Tudaya 2 run‐of‐river hydropower projects in Santa Cruz,
Davao del Sur.
• 100% equity interest in Hedcor Sabangan, Inc. (Hedcor Sabangan), which proposes to build
the 13.2 MW Sabangan run‐of‐river hydropower project in Sabangan, Mountain Province.
Since beginning operations in 1998, the Company has been committed to developing expertise in
renewable energy technologies. The Company’s management believes that due to growing concerns on
the environmental impact of power generation using traditional fossil fuel energy sources, greater
emphasis will be placed on providing adequate, reliable, and reasonably priced energy through
innovative and renewable energy technologies such as hydroelectric and geothermal technologies. As
such, a significant component of the Company’s future projects are expected to focus on those projects
that management believes will allow the Company to leverage its experience in renewable energy and
help maintain the Company’s position as a leader in the Philippine renewable energy industry.
AP Renewables, Inc. (APRI)
APRI is one of the country’s leading power generation companies. It is a wholly‐owned subsidiary of ARI
that acquired the Tiwi‐MakBan geothermal facilities located at Tiwi, Albay, Bay and Calauan, Laguna and
Sto. Tomas, Batangas from PSALM in May 2009. The two complexes have a total capacity of 467 MW.
As geothermal power plants, Tiwi and Makban produce clean energy that is reasonable in cost, efficient
in operation and environment‐friendly. With the continuous advancement in technology, APRI is setting
its vision to operate and maintain the Tiwi and Makban geothermal complexes in accordance with the

highest professional standards of world‐class independent power producers operating in a merchant
market.
The Asset Purchase Agreement (APA) between APRI and PSALM requires APRI to rehabilitate units 5
and 6 of the Makban Geothermal Power Plant at its own cost and expense, which must be accomplished
and completed within four years from closing of the APA last May 2009. APRI is currently in the midst of
rehabilitation and refurbishment process. Based on initial estimates, the rehabilitation and
refurbishment costs could reach USD140‐150 mn over a period of two to three years. This rehabilitation
and refurbishment plan is expected to improve the geothermal plant’s operating capacities.
APRI is a Board of Investment (BOI) registered enterprise as New Operator of the Tiwi‐Makban
geothermal complex, on pioneer status with six years income tax holiday starting on June 19, 2009.
On December 26, 2011, APRI, together with its affiliates, TLI, signed a letter agreement with the PSALM,
the NPC and the Manila Electric Company (MERALCO) for the extension of the term of the respective
load allocations of APRI and TLI. The extension, which was pursuant to the one‐year extension of the
MERALCO‐NPC Transition Supply Contract (TSC) dated November 22, 2006 extended APRI’s load
allocation for a period of 12 months effective December 26, 2011.
SN Aboitiz Power‐Magat Inc. (SNAP‐Magat)
SNAP‐Magat is ARI’s joint venture company with SN Power, a leading Norwegian hydropower company
with projects and operations in Asia, Africa and Latin America. On December 14, 2006, SNAP‐Magat
participated in and won the bid for the 360‐MW Magat hydroelectric power plant (the Magat Plant)
conducted by PSALM for a bid price of USD530 mn.
The Magat Plant, which is located at the border of Isabela and Ifugao provinces in northern Luzon, was
completed in 1983. As a hydroelectric facility that can be started up in a short period of time, the Magat
Plant is ideally suited to act as a peaking plant with opportunities to capture the significant upside
potential that can arise during periods of high demand.
The Magat Plant has the ability to store water equivalent to one month of generating capacity, allowing
for the generation and sale of electricity at the peak hours of the day, which command premium prices.
Magat’s source of upside, water as a source of fuel and the ability to store it, is also its source of limited
downside. This hydroelectric asset has minimal marginal costs, granting it competitive advantage in
terms of economic dispatch order versus other fuel‐fired power plants that have significant marginal cash
costs. SNAP‐Magat sells most of the electricity generated by the Magat Plant through the Wholesale
Electricity Spot Market (WESM). It is also a provider of much needed ancillary services to the Luzon grid.
SNAP‐Magat obtained Board of Investments (BOI) approval of its application as new operator of the
Magat plant with a pioneer status, which entitles it to an income tax holiday until July 12, 2013.
A portion of the land underlying the Magat plant is in the name of the National Irrigation Administration
(NIA). This portion is being leased by SNAP‐Magat from NIA under terms and conditions provided under

their O&M Agreement for the operations and maintenance of the non‐power component of the Magat
hydroelectric plant. On March 23, 2007, President Arroyo issued a presidential proclamation reserving
and granting NPC ownership over certain parcels of public land in Isabela province and instructing the
Department of Environment and Natural Resources to issue a special patent over the untitled public land
on which a portion of the Magat plant is situated. This portion of land, which was titled in 2007, was
eventually bought by SNAP‐ Magat.
In September 2007, SNAP‐Magat obtained a USD380 mn loan from a consortium of international and
domestic financial institutions which include the International Finance Corporation, Nordic Investment
Bank, BDO–EPCI, Inc., Bank of the Philippine Islands, China Banking Corporation, Development Bank of
the Philippines, The Hong Kong and Shanghai Banking Corporation Limited, Philippine National Bank
and Security Bank Corporation. The USD380 mn loan consists of a dollar tranche of up to USD152 mn,
and a peso tranche of up to P10.1 bn. The financing agreement was hailed as the region’s first‐ever
project finance debt granted to a merchant power plant. It won Project Finance International’s Power
Deal of the Year and Asset’s Best Project Finance Award as well as Best Privatization Award.
The loan was used to partially finance the deferred balance of the purchase price of the Magat Plant
under the Asset Purchase Agreement with PSALM. Part of the loan proceeds was also used to refinance
SNAP‐Magat’s USD159 mn loan from AEV and its advances from its shareholders used to acquire the
Magat Plant.
As a hallmark of innovation in revenue generation, SNAP‐Magat garnered an ancillary services contract

on October 12, 2009 with the National Grid Corporation of the Philippines (NGCP), a first for a privately
owned plant. These services are necessary to maintain power quality, reliability and security of the grid.
After 25 years of operations without any major rehabilitation works done on the generating units and
considering the age and results of technical assessments, SNAP‐Magat has embarked on a four‐year
refurbishment program for all major plant equipment for the period of 2009 to 2013. The main objective
is to put back the lost efficiency and address operational difficulties due to obsolescence. The project will
preserve the remaining life and the continuance of its availability for the next 25 years.
In December 2010, SNAP‐Magat announced it will proceed with the feasibility study for the expansion of
the Magat hydroelectric plant from 360 MW to up to 540 MW.
The conduct of the feasibility study was formalized on December 15, 2010 upon the signing of a
Memorandum of Understanding (MOU) between SNAP‐Magat and the NIA. The MOU facilitates the
gathering of information to determine the feasibility of expanding the capacity of the Magat plant for an
additional 90 to 180 MW. The existing Magat plant was designed for two additional units. The study will
also include the feasibility of installing a pumped‐storage system. The result of the feasibility study will
enable SNAP‐Magat to evaluate whether to proceed with the construction phase of the project.
The half‐life refurbishment of Unit No. 4 of SNAP‐Magat was completed in 2011, 47 days ahead of
schedule. With Unit 4 under refurbishment from January to April 2011, SNAP‐Magat Plant generated
522.413 GWh, registered forced outage hour of 88.74 and its plant availability factor was 98.85%.

Continual high capability of SNAP‐Magat due to low water utilization and high dam elevation increased
the capacity approval of SNAP‐Magat in 2011 compared to 2010. The refurbishment of SNAP‐Magat
Unit 4 increased the capacity nominated to AS from 285 MW to 380 MW (or an increase of 95 MW). The
capability of SNAP‐Magat as AS provider was re‐certified in July 2011. In 2011, Magat delivered
2,376,450 MWh of AS amounting to P9.9 bn.
SNAP‐Magat is looking at a two‐phase Expansion Project composed of: (1) the optimization of the Maris
Reservoir Project that aims to increase the storage capacity of the Maris Reservoir (used as a re‐
regulating dam to regulate the releases from the Magat HEPP); and (2) the Magat‐Pumped Storage
Project which intends to install up to 115 MW of pumped storage generating capacity in addition to the
existing 360 MW Magat HEPP. An MOU for the technical cooperation in the pre‐development of the
Maris Optimization was entered into by SNAP‐Magat and NIA on July 15, 2011. Currently, the Project is
in its final feasibility stage and is in the process of securing its Environmental Compliance Certificate
(ECC) from the DENR‐EMB.
The first phase of the efficient water use campaign DALOY Magat or “Dependable Agriculture and
Livelihood through Optimized Water Use Yearlong in Magat” was also implemented. After only eight
months of implementation, water use in the target areas in the South High Canal and Oscariz Main Canal
exhibited a decrease of 17.94 million cubic meters (MCM) of water consumption by farmers and fishpond
operators. Data showed that from January to August of 2011, the water consumed by the target
communities averaged 37.63 MCM while water consumption for the same period in 2009 averaged 55.57
MCM.
The Magat Plant retained its quality management system certification with its successful first
surveillance audit for QMS ISO 9001. It also passed its second surveillance audit for its health and
management system (OHSAS 18001). Aside from the QMS ISO Certification, SNAP‐Magat also received
several awards in the year 2011. The Magat Plant received an award in December 2011 from the
Department of Labor and Employment (DOLE) for its 2010 record of no Lost Time Incident (LTI) of
303,680 man‐hours. Since SNAP ‐ Magat took over in 2006, the Magat Plant accumulated 1,524,039 man
hours LTI free as of December 31, 2011. The Magat Plant also received a Silver Award for Independent
Power Producer of the Year at the 2011 Asian Power Awards in Malaysia. Further, its management
committee was also a finalist in the Best Executive Leadership category at the 2011 Asia CEO Awards
held in Makati.
SN Aboitiz‐Benguet, Inc. (SNAP‐Benguet)
On November 28, 2007, SNAP‐Benguet, also a consortium between ARI and SN Power, submitted the
highest bid to PSALM for the Ambuklao‐Binga Hydroelectric Power Complex, which consists of the 75‐
MW Ambuklao Hydroelectric Power Plant (Ambuklao Plant) located in Bokod, Benguet and the 100‐MW
Binga Hydroelectric Power Plant (Binga Plant) located in Itogon, Benguet. The price offered amounted to
USD325 mn.
The Ambuklao‐Binga Hydroelectric Power Complex was turned over to SNAP‐Benguet on July 10, 2008.
In August 2008, SNAP‐Benguet signed a USD375 mn loan agreement with a consortium of local and
foreign banks where USD160 mn was taken up as USD financing and USD215 mn as peso financing.

Proceeds from the facility were used to partially finance the purchase price, rehabilitate the power plant
complex and refinance SNAP‐Benguet’s existing advances from shareholders with respect to the
acquisition of the assets.
SNAP‐Benguet obtained BOI approval of its application as new operator of the Ambuklao and Binga
plants with a pioneer status, which entitles it to an income tax holiday commencing from date of
registration. Binga’s approval is effective until August 12, 2014, while that of Ambuklao lasts until July
2016.
The rehabilitation of the Ambuklao Plant commenced in late 2008, after under going preservation since
1999 due to damage from the 1990 earthquake. As of July 2010, all three units were in operation. As of
start of testing and commissioning, each unit was already generating revenues due to the timely
processing and issuance of provisional COC’s for each unit.
On June 2, 2011, the new Ambuklao started commercial operations of Unit No. 3 after 12 years of
shutdown. The final COC was secured from ERC on August 31, 2011. The re‐operation of Ambuklao was
marked by the national and local inauguration ceremonies on October 26 and 27, 2011, respectively.
The refurbishment of the Binga Pant commenced in 2010. Headrace tunnel and intake excavation is 80%
completed. Construction of the new intake structure is on‐going and target completion of the project is
in 2014. The Binga Plant is currently undergoing refurbishment of its four units to increase capacity from
100 MW to 120 MW. Replacement of Unit No. 4 main inlet valve (MIV) was done from April 21 to May 1,
2011. The completion of the MIV replacement triggered the start of rehabilitation and upgrading of Unit
No. 4 which started on May 2, 2011. The rehabilitation and upgrading of Unit No. 4 from 25 MW to 31.5
MW was completed on December 20, 2011 and was put on trial and commercial operation on December
21, 2011. SNAP Benguet received its Certificate of Compliance (COC) from the ERC on March 26, 2012.
The COC is valid for five years starting March 12, 2012.
With the Binga Plant’s Unit 4 under refurbishment, Binga Plant generated 25.047 GWh, registered forced
outage hour of 41.64 and its plant availability factor was 72.94%. On the other hand, Ambuklao Plant
generated 319.999 GWh, registered a forced outage hour of 63.47 and availability factor of 85.50%
In 2010, SNAP‐Benguet also entered into a contract with the NGCP for the Binga plant to provide
ancillary services. This hallmark of business innovation has resulted in a new stream of revenue for the
company.
The capability of Binga as AS provider was re‐certified in June 2011. Only units 1, 2, and 3 were tested
since Unit No. 4 was under refurbishment. In 2011, Binga delivered 624,159 MWh of AS amounting to
P2.4 bn. The Ambuklao Plant was successfully tested as provider of ancillary services in September 2011.
Both Ambuklao Plant and Binga Plant received numerous awards in the year 2011. In December 2011,
both plants were awarded by the DOLE for its 2010 record of no LTI of 372,305 man‐hours and 503,095.50
man‐hours, respectively. Since SNAP took over in 2008, Ambuklao accumulated 1,385,531 man hours LTI
free as of Dec. 31, 2011 while Binga posted 1,539,920 man‐hours LTI free in the same period for a
combined total of 2,925,451 man‐hours LTI‐ free.

Both plants were registered as Clean Development Mechanism (CDM) projects by the United Nations
Framework Convention on Climate Change (UNFCCC). Collectively, the plants will produce an average of
180,000 carbon emission reduction credits (CERs) per year. The CDM registration is the first of its kind in
the Philippines at the time of the issuance.
Binga Plant received its management system certification for QMS ISO 9001 and passed its first
surveillance audit for OHSAS 18001. Further, the Binga Plant won a Silver Award in the Independent
Power Producer of the Year category and the resurgent Ambuklao Plant garnered a Silver Award in the
Renewable Energy Power Plant category.
In 2011, SNAP‐Benguet won a Gold Award as Environmental Company of the Year. Its management
committee was also a finalist in the Best Executive Leadership category at the 2011 Asia CEO Awards
held in Makati.
Hedcor, Inc. (Hedcor)
Hedcor was originally incorporated on October 10, 1986 by ACO as the Baguio‐Benguet Power
Development Corporation. ARI acquired its 100% ownership interest in Hedcor in 1998. In 2005, ARI
consolidated all of its mini‐hydroelectric generation assets, including those developed by HEDC and
Cleanergy, in Hedcor. Hedcor currently owns, operates and/or manages 15 run–of–river hydropower
plants in northern Luzon and Davao City with a combined installed capacity of 38.2 MW. The electricity
generated from Hedcor’s hydro plants are taken up by NPC, APRI, Davao Light, Benguet Electric
Cooperative (BENECO) pursuant to power purchase agreements with the said offtakers and sold to the
Wholesale Electricity Spot Market (WESM).
During the full years 2009 and 2010, Hedcor’s hydropower plants generated a total of 171.4 GWh and
155.5 GWh of electricity, respectively.
Northern Luzon’s climate is classified as having two pronounced season‐‐dry from November to April and
wet for the rest of the year. Due to this classification, generation levels of Hedcor’s plants, particularly
those located in northern Luzon, are typically lower during the first five months of each year.
Hedcor used to have a 50% equity interest in LHC until it transferred its equity stake to its parent
company, ARI, through a property dividend declaration in September 2007.
Luzon Hydro Corporation (LHC)
Up until May 10, 2011, LHC was ARI’s joint venture company with Pacific Hydro Pty. Ltd. (Pacific Hydro)
of Australia, a privately‐owned Australian company that specializes in developing and operating power
projects that use renewable energy sources, principally water and wind power.
LHC operates and manages the 70 MW Bakun AC hydro project, which is located within the 13,213
hectare watershed area of the Bakun River in Ilocos Sur province in Northern Luzon. The project is a run–
of–river power plant which taps the flow of the Bakun River to provide the plant with its generating
power. The USD150 mn project was constructed and is being operated under the government’s build–

operate–transfer scheme. Energy produced by the plant is delivered and taken up by NPC pursuant to a
power purchase agreement (the Bakun PPA) and dispersed to NPC’s Luzon Power Grid. Under the terms
of the Bakun PPA, all of the electricity generated by the Bakun plant will be purchased by NPC for a
period of 25 years from February 2001. The Bakun PPA also requires LHC to transfer the Bakun plant to
NPC in February 2026, free from liens and without the payment of any compensation by NPC. Amlan
Power Holdings Corporation was awarded the IPP Administrator contract for the 70‐MW Bakun
hydropower facility following a competitive bidding process conducted by PSALM.
On March 31, 2011, ARI, LHC and Pacific Hydro signed a Memorandum of Agreement (MOA) to give ARI
full ownership over LHC. Effective May 10, 2011, ARI assumed full ownership and control of LHC upon
fulfillment of certain conditions in the MOA. The total transaction value was approximately USD30 mn.
Hedcor Sibulan, Inc. (Hedcor Sibulan)
Hedcor Sibulan, a wholly owned subsidiary of ARI, is the project company of the Sibulan hydropower
project. Sibulan, which broke ground on June 25, 2007, entailed the construction of two run‐of‐river
hydropower plants, Sibulan A and Sibulan B, harnessing the Sibulan and Baroring rivers in Santa Cruz,
Davao del Sur. The 26 MW Sibulan B started commercial operations in March 2010. The 16.5 MW Sibulan
A was completed in September 2010.
Hedcor Sibulan is part of a consortium that won the competitive bidding for the 12‐year power supply
agreement to supply new capacity to Davao Light. The bid price for the contracted energy was
P4.0856/kWh, subject to adjustment based on changes to the Philippine consumer price index. All the
energy generated by the Hedcor Sibulan power plants will be supplied to Davao Light pursuant to a
power supply agreement signed on March 7, 2007.
The Sibulan Project is registered as a CDM project with the UNFCC under the Kyoto Protocol. The
project is expected to generate carbon credits that will eventually be traded in the carbon market.
Hedcor Tamugan, Inc. (Hedcor Tamugan)
Hedcor Tamugan, a wholly owned subsidiary of ARI, is the project company organized to build the
proposed Tamugan run‐of‐ river hydropower project. In 2010, Hedcor entered into a compromise
agreement with the Davao City Water District (DCWD) to settle the dispute on the Tamugan water
rights. Originally planned as a 27.5 MW run‐of‐river facility, Hedcor Tamugan proposed the construction
of an 11.5 MW run‐of‐river hydropower plant. After Hedcor Tamugan secures all required permit, the
two‐year construction period will commence.
Hedcor Sabangan, Inc. (Hedcor Sabangan)
Hedcor Sabangan, a wholly owned subsidiary of ARI, is the project company organized to build the
proposed 13.2 MW run‐ of‐river hydropower project in Sabangan, Mountain Province. As part of the Free
and Prior Informed Consent (FPIC) process for the project as required under the Indigenous Peoples’
Rights Act of 1997 (IPRA), Hedcor Sabangan signed Memoranda of Agreement with the indigenous
peoples of Barangays Namatec and Napua, the municipality of Sabangan and the Mountain Province in

February, March and July 2011, respectively. With the completion of the FPIC process, Hedcor Sabangan
is awaiting the issuance of the Certificate of Precondition by the National Commission on Indigenous
Peoples.
Hedcor Sabangan obtained an ECC in October 2011, while the other permits required for the project,
such as the water rights and the Special Land‐Use Permit (SLUP), are currently being processed. The
two‐year construction period is expected to commence in the fourth quarter of 2012 assuming that the
required permits are secured by then.
Hedcor Tudaya, Inc. (Hedcor Tudaya)
Hedcor Tudaya, a wholly owned subsidiary of ARI, is the project company organized to build the
proposed Tudaya 1 and Tudaya 2 run‐of‐river hydropower projects with combined capacity of 13.7 MW in
Tudaya, Santa Cruz, Davao del Sur. In February 2011, Hedcor Tudaya signed a Memorandum of
Agreement with the of Bagobo‐Tagabawa indigenous peoples as a result of the FPIC process conducted
for the Tudaya 1 as required under the IPRA. With the completion of the FPIC process, Hedcor Tudaya is
awaiting the issuance of the Certificate of Precondition by the National Commission on Indigenous
Peoples. The proposed construction of Tudaya 2 does not require a FPIC process as there are no
indigenous peoples in the area.
Most of the permits required for the project, such as ECC have been obtained, while the water rights is
currently being processed. The two‐year construction period is expected to commence in March 2012.
Therma Power, Inc. (TPI)
TPI, a wholly owned holding company of AboitizPower, owns equity interests in the following Generation
Companies:
• 100% equity interest in TLI, the IPP Administrator of the 700 MW contracted capacity of the
Pagbilao power plant.
• 100% equity interest in TMI, owner and operator of Mobile 2 and Mobile 1, barge‐mounted
power plants, each with a generating capacity of 100 MW.
• 26% effective interest in Cebu Energy, which operates a 3 x 82 MW coal‐fired power plant in
Toledo City, Cebu.
• 25% equity interest in RP Energy, the project company that proposes to build and operate a
600 MW coal‐fired power plant in Redondo Peninsula in the SBFZ.
• 100% equity interest in Therma South, Inc., the project company that proposes to build a
300 MW circulating fluidized bed coal‐fired plant in Toril, Davao.
• 100% equity interest in Vesper Industrial and Development Corporation, the project
company that proposes to build a coal plant in Bato, Toledo, Cebu. Vesper is currently
applying for the change of its corporate name to Therma Visayas, Inc. with the SEC.
• 100% equity interest in Therma Mobile, owner of four barge‐mounted power plants in
Navotas Fishport, Manila.

AboitizPower plans to implement a corporate reorganization that will put all its non‐renewable
generation assets under TPI. If completed, TPI will hold AboitizPower’s ownership interest in STEAG
Power, EAUC, CPPC, Southern Philippines Power Corporation (SPPC) and Western Mindanao Power
Corporation (WMPC).
Therma Luzon, Inc. (TLI)
TLI, a wholly owned subsidiary of TPI, submitted the highest offer in the competitive bid conducted by
PSALM for the appointment of the IPP Administrator of the 700 MW Contracted Capacity of the Pagbilao
Coal Fired Thermal Power Plant located in Pagbilao, Quezon.
The offer by TLI resulted in a bid price of USD691 mn as calculated in accordance with bid rules. This
value represents the present value of a series of monthly payments to PSALM from October 2009 to
August 2025 using PSALM discount rates.
On October 1, 2009, TLI became the first IPP Administrator in the country when it assumed dispatch
control of the said contracted capacity of the Pagbilao Plant. As IPP Administrator, TLI is responsible for
procuring the fuel requirements of and selling the electricity generated by the Pagbilao Plant. The
Pagbilao Plant is being operated by TEAM Energy under a build ‐ operate‐transfer scheme.
On December 26, 2011, TLI, together with its affiliate, APRI, signed a Letter Agreement with the PSALM,
the NPC and MERALCO for the extension of the term of the respective load allocations of APRI and TLI.
The extension, which was pursuant to the one year extension of the MERALCO ‐ NPC Transition Supply
Contract (TSC) dated November 22, 2006, extended TLI’s load allocation for up to 12 months starting
December 26, 2011, subject to the finalization of a power supply agreement (PSA) to be executed by and
between MERALCO and TLI. On February 29, 2012, TLI signed a PSA with MERALCO which shall be
effective upon approval by the Energy Regulatory Commission (ERC).
Therma Marine, Inc. (TMI)
TMI is a wholly owned subsidiary of TPI. It owns and operates Power Barges Mobile 1 (previously known
as PB 118) and Mobile 2 (previously known as PB 117) and has a total generating capacity of 200 MW.
Mobile 1 is currently moored at Barangay San Roque, Maco, Compostela Valley while Mobile 2 is
moored at Barangay Sta. Ana, Nasipit, Agusan del Norte.
TMI assumed ownership of Mobile 1 and Mobile 2 from PSALM last February 6, 2010 and March 1, 2010,
respectively, after the successful conclusion of the USD30 mn negotiated bid for the barges last July 31,
2009.
TMI signed a one‐year Ancillary Service Procurement Agreements (ASPA) with the NGCP to supply
ancillary services consisting of contingency reserve, dispatchable reserve, reactive power support and
blackstart capacity for the Mindanao Grid. The ASPA of each of the Power Barges is for the supply 50
MW of ancillary power to NGCP. The contracts have been extended up to June 2012, and may still be

renewed, subject to the agreement of the parties. In the event the ASPA are not renewed by NGCP, TMI
may opt to offer ancillary services to distribution and industrial customers in Mindanao.
On December 5, 2011, TMI signed Energy Supply Agreements with various cooperatives, industrial and
commercial customers in Mindanao for a total of 109.2 MW. Of the 109.2 MW, 86.2 MW were already
effective, 17 MW are awaiting provisional approval from ERC, and 6 MW are due for filing with the ERC.
Therma Mobile, Inc. (Therma Mobile)
Therma Mobile is a wholly owned subsidiary of TPI. On May 27, 2011, Therma Mobile acquired four
barge‐mounted floating power plants located at Navotas Fishport, Manila from Duracom Mobile Power
Corporation and East Asia Diesel Power Corporation. The barge‐mounted floating power plants have a
total generating capacity of 242 MW.
The power barges are currently undergoing rehabilitation.
STEAG State Power Inc. (STEAG)
AboitizPower closed the sale and purchase of the 34% equity ownership in STEAG from Evonik Steag
GmbH (Evonik Steag) last November 15, 2007. The total purchase price for the 34% equity in STEAG was
USD102 mn, inclusive of interests.
Incorporated on December 19, 1995, STEAG is the owner and operator of a 232 MW (gross) coal‐fired
power plant located in the PHIVIDEC Industrial Estate in Misamis Oriental, Northern Mindanao. The coal
plant was built under a BOT arrangement and started commercial operations on November 15, 2006.
The coal plant is subject of a 25‐year power purchase agreement with the NPC, which agreement is
backed by a Performance Undertaking issued by the Republic of the Philippines. STEAG currently enjoys
a six‐year income tax holiday from the BOI.
With its 34% stake in STEAG, AboitizPower is equity partner with majority stockholder Evonik Steag,
Germany’s fifth largest power generator, which currently holds 51% equity in STEAG. La Filipina Uy
Gongco Corporation holds the remaining 15% equity in STEAG.
On June 28, 2010, AboitizPower and its partners in STEAG firmed up their collective intention to develop
a third unit of approximately 150 MW capacity adjacent to the existing facility. AboitizPower and its
partners agreed to maintain their shareholdings in the same proportions in the new corporation to be
established for the planned additional capacity. Certain essential facilities, such as the jetty, coal
handling facilities and stockyards and the 138‐kV interconnection with the Mindanao Grid are to be
shared with the existing facilities. Depending on the interest the market demonstrates, the agreement
contemplates the possibility of another unit.
STEAG’s COC has been renewed by the ERC until May 2016.

East Asia Utilities Corporation (EAUC)
On April 20, 2007, AboitizPower acquired a 50% ownership interest in EAUC from El Paso Philippines,
which still owns the other 50% of EAUC. EAUC was incorporated on February 18, 1993, and since 1997
has operated a Bunker C‐fired power plant with an installed capacity of 50 MW within the MEPZ I in
Mactan Island, Cebu. Pursuant to the Energy Power Purchase Agreement (EPPA), with the Philippine
Economic Zone Authority (PEZA) which took effect on April 26, 2011, PEZA shall purchase from EAUC
for 22 MW of electric power or equivalent to two engines. EAUC also signed an EPPA with BEZ for the
supply of power equivalent to 5.255 MW for a period of five years starting May 25, 2011 until May 25,
2016.
On December 26, 2010, EAUC started supplying power to the WESM.
Cebu Private Power Corporation (CPPC)
Incorporated on July 13, 1994, CPPC owns and operates a 70 MW Bunker‐C fired power plant in Cebu
City, one of the largest power plants in the island of Cebu. Commissioned in 1998, the CPPC plant was
constructed pursuant to a BOT contract to supply 62 MW of power to VECO. The CPPC plant will revert
to VECO in November 2013.
On April 20, 2007, AboitizPower acquired from EAUC 60% of the outstanding common shares of CPPC.
The remaining 40% of the outstanding common shares is owned by Vivant, who together with
AboitizPower, are the major shareholders of VECO. VECO owns all of the outstanding preferred shares of
CPPC, which comprises approximately 20% of the total outstanding capital stock of CPPC.
Effective December 26, 2010, CPPC started selling its excess capacity to the WESM.
Abovant Holdings, Inc. (Abovant) and Cebu Energy Development Corporation (Cebu Energy)
Incorporated on November 28, 2007, Abovant is a joint venture company formed by TPI, a wholly‐owned
subsidiary of AboitizPower, and Vivant Integrated Generation Corporation (VIGC) of the Garcia Group, to
hold their investments in a new power plant to be built in Barangay Daanlungsod, Toledo City, Cebu.
Abovant is 60% owned by AboitizPower, through TPI, and 40% owned by VIGC.
Abovant and Global Formosa Power Holdings, Inc. (Global Formosa), a joint venture between Global
Business Power Corporation of the Metrobank Group and Formosa Heavy Industries, Inc. formed Cebu
Energy. Cebu Energy is the owner of a new 3 x 82 MW coal‐fired power plant situated within the Toledo
Power Station complex in Barangay Daanlungsod, Toledo City, Cebu. With Abovant’s 44% stake in the
project (Global Formosa owns the remaining 56%), AboitizPower’s effective interest in the new power
plant, which broke ground in January 2008, is approximately 26.40%.
The first 82 MW unit was commissioned in February 2010, while the second and third units in the second
and fourth quarter of 2010, respectively. The power generated from the new power plant shall provide
for the much needed security to the power supply of the province of Cebu in the coming years. Additional
power will be needed with the influx of business process outsourcing companies and new hotels in the
province and the presence in the Toledo‐Balamban area of large industries such as Carmen Copper

Corporation, the shipbuilding facility of Tsuneishi Heavy Industries (Cebu) Inc. (THI), the modular
fabrication facility of Metaphil International, and the newest locator in WCIP, Austal Philippines Pty.
Limited.
The power plant which cost approximately USD450 mn, was completed and started full commercial
operations in the first quarter of 2011. Cebu Energy had signed an EPPA with VECO for the supply of 105
MW of electricity for 25 years. To date, it also has an EPPA with PEZA‐MEPZ I; Mactan Electric
Company, Inc. (MECO); BEZ; Cebu I Electric Cooperative, Inc.; Cebu II Electric Cooperative, Inc.; Cebu III
Electric Cooperative, Inc.; and Bohol Electric I Cooperative, Inc. All its EPPAs will provide contracted
minimum energy offtake with fuel as pass through.
Southern Philippines Power Corporation (SPPC)
SPPC is a joint venture among AboitizPower, Alsing Power Holdings, Inc. and Tomen Power (Singapore),
Pte Ltd. AboitizPower has a 20% equity interest in SPPC, which owns and operates a 55 MW bunker‐C
fired power plant in Alabel, Sarangani just outside General Santos City in Southern Mindanao.
The SPPC power plant was developed on a build‐own‐operate basis by SPPC under the terms of an
Energy Conversion Agreement (ECA) with the NPC. Under the ECA, NPC is required to deliver and
supply to SPPC the fuel necessary to operate the SPPC power plant during an 18‐year cooperation
period, which ends in 2016. NPC is also required to take all the electricity generated by the SPPC power
plant during the cooperation period and pay SPPC on a monthly basis capital recovery, energy, fixed
operations and maintenance (O&M) and infrastructure fees as specified in the ECA. During this
cooperation period, SPPC is responsible, at its own cost, for the management, operation, maintenance
and repair of the SPPC power plant.
Aside from providing the much needed capacity to the Southwestern Mindanao Area, the SPPC power
plant also performs the role of voltage regulator for General Santos City, ensuring the availability,
reliability, and quality of power supply in the area.
Western Mindanao Power Corporation (WMPC)
Like SPPC, WMPC is also a joint venture among AboitizPower, Alsing Power Holdings, Inc. and Tomen
Power (Singapore), Pte Ltd. AboitizPower has a 20% equity interest in WMPC, which owns and operates
a 100 MW bunker‐C fired power station located in Zamboanga City, Zamboanga del Sur in Western
Mindanao. The WMPC power plant was developed on a build‐own‐operate basis by WMPC under the
terms of an ECA with NPC. Under the ECA, NPC is required to deliver and supply to WMPC the fuel
necessary to operate the WMPC Plant during an 18‐year cooperation period which ends in 2015. NPC is
also required to take all the electricity generated by the WMPC Plant during the cooperation period and
pay WMPC on a monthly basis capital recovery, energy, fixed O&M and infrastructure fees as specified in
the ECA. During this cooperation period, WMPC is responsible, at its own cost, for the management,
operation, maintenance and repair of the WMPC Plant.

Aside from providing the much needed capacity to the Zamboanga Peninsula, the WMPC power plant
also performs the role of voltage regulator for Zamboanga City, ensuring the availability, reliability, and
quality of power supply in the area.
Redondo Peninsula Energy, Inc. (RP Energy)
Incorporated on May 30, 2007, RP Energy is a joint venture company originally owned by AboitizPower
and TCIC equally. On July 22, 2011, Meralco PowerGen Corporation acquired a majority interest in RP
Energy by virtue of a Share Purchase Agreement with TPI, a wholly‐owned subsidiary of AboitizPower
and TCIC, retaining an equal ownership interest of 25% each less one share. In view of increasing power
demand in the Luzon Grid and with the entry of Meralco PowerGen, RP Energy plans to expand its
original proposal to build and operate a 300‐MW coal‐fired power plant in Redondo Peninsula within the
SBFZ into a 2 x 300‐MW (net) power plant upon approval of an amendment to its existing ECC.
RP Energy has also completed the voluntary relocation of all affected residents in the site in accordance
with existing Philippine rules and regulations and accepted international standards, and it is now the in
the final stages of completing the site preparation works, such as clearing, grubbing, balanced cut and fill
to a grade of six meters above sea level. In November 2011, RP Energy designated the suppliers of the
circulating‐fluidized‐bed boilers, steam turbines, generators, and supporting auxiliaries that ultimately
will be engaged as subcontractors by the selected Engineering, Procurement and Construction (EPC)
contractor. The award serves to fix the price and delivery time of the equipment amidst an environment
of rising prices and longer delivery period of raw materials. In May 2011, RP Energy issued Invitations to
Bid to three reputable international EPC contractors for the execution of the project. The EPC Contract is
projected to be awarded during the second quarter of 2012. The estimated completion of the first unit
will be 36 months after award of the EPC contract or mid‐2015. Completion of the second unit will follow
within six months thereafter. The total cost of the project is estimated at approximately USD1.2 bn.
Therma South, Inc. (Therma South)
Incorporated in November 18, 2008, Therma South is a wholly‐owned subsidiary of TPI and is the project
company for the construction of the 300‐MW circulating fluidized‐bed coal‐fired power plant in Barangay
Binugao, Toril District, Davao City and Barangay Inayawan, Sta. Cruz, Davao del Sur.
The power project initially received resistance from some sectors of the community. But through
Therma South’s information drives, road shows and close consultation and engagement with the
affected localities, the power project received strong recommendations from the host barangays, the
business sector, professional organizations and other institutions in Mindanao. Ultimately, the power
project received endorsements from the local government units of Davao City and the municipality of
Sta. Cruz in Davao del Sur. Therma South also secured the necessary permits and clearances from
various national government agencies for the power project.
On September 9, 2011 the DENR‐EMB issued the ECC for the power project.

On August 2011, Therma South acquired the remaining properties that will become the site of the power
project. The power project is expected to be on line by late 2014, thereby providing Mindanao with much
needed baseload power that is affordable, reliable and will cause the least adverse effect to the
environment.
Other Generation Assets
AboitizPower’s distribution utilities, Davao Light and Cotabato Light, each has its own stand‐by
plant. Davao Light currently maintains the 53 MW Bunker C‐fired Bajada stand‐by plant, which is capable
of supplying 19% of Davao Light’s requirements. Cotabato Light maintains a stand‐by 7 MW Bunker C‐
fired plant capable of supplying approximately 30.50% of its requirements.
Future Projects
Before undertaking a new power generation project, the Company conducts an assessment of the
proposed project. Factors taken into consideration by the Company include the proposed project’s land
use requirements, access to a power grid, fuel supply arrangements (if relevant), availability of water (for
hydroelectric projects), local requirements for permits and licenses, the ability of the plant to generate
electricity at a competitive cost and the presence of potential offtakers to purchase the electricity
generated. For the development of a new power plant, the Company, its partners and suppliers are
required to obtain the necessary permits required before commencement of commercial operations,
including permits related to project site, construction, the environment and planning, operation licenses
and similar approvals.
Notwithstanding the review and evaluation process that the Company’s management conducts in
relation to any proposed project, acquisition or business, there can be no assurance that the Company
will eventually develop a particular project, acquire a particular generating facility or that projects will be
implemented or acquisitions made or businesses conducted in the manner planned or at or below the
cost estimated by the Company. In addition, there can be no assurance that a project, if implemented, or
an acquisition, if undertaken, will be successful.
DISTRIBUTION OF ELECTRICITY
The Aboitiz Group has more than 71 years of experience in the Philippine power distribution sector and
has been known for innovation and efficient operations. Through the years, AboitizPower has managed
to build strong working relationship with the industry’s regulatory agencies.
With ownership interests in seven distribution utilities, AboitizPower is currently one of the largest
electricity distributors in the Philippines. AboitizPower’s distribution utilities collectively supply
electricity to franchise areas covering a total of 18 cities and municipalities in Central Luzon, Visayas and
Mindanao, with an aggregate land area of approximately 5,305 square kilometers. Collectively,
AboitizPower’s distribution utilities contributed approximately 10% of its net income for 2011. The
distribution utilities had a total customer base of 740,833 in 2011, 714,423 in 2010, and 685,378 in 2009.

The table below summarizes the key operating statistics of the distribution utilities for 2011 and the
previous two years.
Electricity Sold (MWh) Peak Demand (MW) No. of Customers

Company 2011 2010 2009 2011 2010 2009 2011 2010 2009
VECO 2,120,454 1,994,237 1,829,500 407 378 336 327,587 316,845 304,002
Davao 1,582,928 1,548,155 1,459,161 288 293 276 294,159 281,234 268,708
Light
SFELAPCO 456,121 446,513 421,139 88 83 80 83,312 81,891 79,669
Cotabato 117,726 129,788 120,186 23 24 24 32,929 31,611 30,171
Light
SEZ 408,240 405,038 372,391 99 83 97 2,738 2,734 2,724
MEZ 132,927 138,128 117,014 23 22 23 76 77 76
BEZ 116,378 90,174 60,376 32 27 21 32 31 28
Total 4,934,774 4,752,033 4,379,767 960 910 857 740,833 714,423 685,378
Visayan Electric Company, Inc. (VECO)
VECO is the second largest privately owned distribution utility in the Philippines in terms of customers
and annual MWh sales. VECO supplies electricity to a region covering 672 square kilometers in the island
of Cebu with a population of approximately 1.73 mn. To date, VECO has 16 substations that serves the
electrical power needs of the cities Cebu, Mandaue, Talisay and Naga, the municipalities of Minglanilla,
San Fernando, Consolacion and Liloan and 232 barangays all electrified in the island and province of
Cebu.
VECO, directly and through its predecessors‐in‐interest, has been in the business of distributing
electricity in Cebu Island since 1905. In the early 1900s, the predecessors‐in‐interest of the Aboitiz Group
acquired a 20% interest in VECO’s predecessor‐in‐interest, the Visayan Electric Company, S.A. Since that
time, the Aboitiz Group’s ownership interest in VECO has increased from 20% to the current beneficial
ownership interest of 55.19% held by AboitizPower.
In 1928, Visayan Electric Company, S.A. was granted a 50‐year distribution franchise by the Philippine
Legislature. The term of this franchise was extended by Republic Act 6454 for an additional 25 years
beginning in 1978 and was conditionally renewed for another 25 years from December 2003, subject to
the resolution of an intra‐corporate dispute at that time involving AEV, AboitizPower’s parent company,
and Vivant Corporation. In September 2005, the Philippine Congress passed Republic Act 9339, which
extended VECO’s franchise to September 2030. VECO’s application for the extension of its Certificate of
Public Convenience and Necessity (CPCN) was approved by the ERC last January 26, 2009.
In April 2004, AEV and Vivant, which is the holding company of the Garcia family, entered into a
Shareholders’ Cooperation Agreement that sets out guidelines for VECO’s day‐to‐day operations and the
relationship among VECO’s shareholders, including: restrictions on share transfers (including the grant of
rights of first refusal in the event of a transfer to a third party and rights to transfer to affiliates, subject to
certain conditions), board composition and structure, proceedings of directors and shareholders,

minority shareholder rights, dividend policy, termination, and non‐compete obligations. Under the
terms of the agreement, day‐to‐day operations and management of VECO were initially assumed by
AEV and, after AboitizPower acquired AEV’s ownership interest in VECO in January 2007, by
AboitizPower. AboitizPower and Vivant are each required to place in escrow 5% of the shares in VECO
registered in their respective names to guarantee compliance with their respective obligations under the
Shareholders’ Cooperation Agreement. The escrow shares will be forfeited in the event a shareholder
group violates the terms of the Shareholders’ Cooperation Agreement. The Shareholders’ Cooperation
Agreement was adopted as a result of a dispute between AEV and Vivant regarding the management of
VECO. Relations between the shareholders of VECO are amicable.
VECO is part of the third group (Group C) of private distribution utilities to shift to PBR. The ERC issued
its final determination on VECO’s application for approval of its annual revenue requirements and
performance incentive scheme under the PBR for the regulatory period July 1, 2010 to June 30, 2014.
Such determination became final in May 2010.
Also in May 2010, VECO filed with the ERC its application for approval of the translation into distribution
rates of its different customer classes for the first regulatory year of the ERC‐approved Annual Revenue
Requirement (ARR) under the PBR for the regulatory period July 1, 2010 to June 30, 2014. The
application was approved on June 28, 2010 and the approved distribution, supply and metering charges
were implemented by VECO effective August 1, 2010. For the second regulatory year, VECO also filed its
application for approval of the translation into rates for different customer classes in March 2011. It was
approved in July 25, 2011 and implemented in August 2011.
VECO will file an application with the ERC for the approval of the recalculated maximum average price
for the regulatory year 2013. It will also apply for approval of the translation into distribution‐related
rates of different customer classes with the ERC, for the third regulatory year of its annual revenue
requirement under the PBR for the regulatory period 2011 to 2014.
Davao Light & Power Company, Inc. (Davao Light)
Davao Light is the third largest privately‐owned electric distribution utility in the country in terms of
customers and annual kilowatt‐hour (kWh) sales.
With a franchise covering Davao City and Davao del Norte, areas of Panabo City and the Municipalities of
Carmen, Dujali and Santo Tomas, Davao Light services a population of approximately 1,777,926 and a
total area of 3,561 square kilometers.
Although Davao Light was organized on October 11, 1929, the Aboitiz Group acquired its ownership in
1946. Currently, AboitizPower owns 99.93% of the shares in the electric distribution utility.
Davao Light’s original franchise, which covered Davao City, was granted in November 1930 by the
Philippine Legislature and was for a period of 50 years. In 1976, the National Electrification
Administration (NEA) extended Davao Light’s franchise for Davao City to November 2005 and granted
Davao Light franchises for the City of Panabo and the municipalities of Carmen and Santo Tomas in

Davao del Norte province. In September 2000, the Philippine Congress passed Republic Act 8960, which
granted Davao Light a franchise over its current franchise area for a period of 25 years, or until
September 2025.
Davao Light has a 150‐MVA and a 2x50‐MVA substation drawing power at 138 kV. In 1998 it entered into
a 10‐year power purchase agreement with the National Power Corporation (NPC), which had been
extended until 2015 by a separate contract signed in 2005 by the parties. Davao Light’s power purchase
agreement with the NPC allows the delivery of most of the utility’s power requirements through its 138‐
kV lines. As a result, in taking delivery of electricity from NPC, Davao Light is able to bypass the NGCP
connection assets and avoid having to pay corresponding wheeling fees to NGCP, thereby allowing the
company to cut its operating costs.
In February 2007, Davao Light awarded to the Hedcor Consortium (composed of Hedcor, ARI, Hedcor
Sibulan, and Hedcor Tamugan) a 12‐year supply contract of new capacity. The price differential between
the Hedcor Consortium’s winning bidprice of P4.0856 per kWh and the next lowest bid was
approximately P1.0129 per kWh. Over the life of the supply contract, the differential will amount to
approximately P4.9 bn at current peso value, representing significant savings for Davao Light customers.
Davao Light decided to secure the new supply contract in anticipation of the full utilization of he existing
contracted energy supply under the 10‐year contract with the NPC for 1,363,375 MWH and the 12‐year
contract with Hedcor.
Davao Light’s approach to help local economies sustain robust growth is by ensuring power reliability.
By plowing back a significant percentage of its annual earnings to prudent investments that upgrade its
distribution network, the utility company has been able to address the increasing demand for power in
spite of declining power supply in Mindanao. Robust economic growth in its franchise areas can be
gleaned through the sprouting of malls, condominiums, and other commercial centers.
At the start of 2012, eight distribution substations have undergone preventive maintenance using
innovative ways to attain maximum efficiency while incurring the least possible costs.
Davao Light has not implemented any rotating service interruptions unlike other electric utilities or
cooperatives, even after being subjected to power curtailments by NGCP, Mindanao’s transmission
concessionaire. In 2011, NGCP declared Mindanao grid under yellow and red alerts translated into 94
times warning of power shortages at levels below the island’s required reserve capacity of 13.8% and
average demand of 1,167 MW, respectively.
Contingencies designed to respond to energy deficiency which were tested during the 2010 Mindanao
power crisis are still in place. These include tapping of embedded generators directly connected to the
distribution facilities which are synchronized to the grid.
In the event of a power crisis, Davao Light’s 54.8‐MW Bunker C‐fired standby plant with a rated capacity
of 58 MW can provide an average of 40 MW on a sustaining basis. The standby plant is capable of
supplying 19% of Davao Light’s electricity requirement.

The power supply from Hedcor Sibulan’s 42.5 MW and Hedcor’s Talomo 4 MW hydroelectric plants
likewise augment the power requirements of Davao Light’s franchise area.
The Bunker C‐fired plant and the Sibulan and Mintal hydroelectric plants are embedded in the Davao
Light franchise. Thus, the power generated from these facilities are dispatched directly into the Davao
Light distribution network without passing through the NGCP transmission lines.
To add to its power reserve capacity, on March 21, 2011 Davao Light entered into a power supply
contract with TMI for 15 MW which was approved by the ERC on May 30, 2011.
It was essentially a wet year for Davao Light in 2011. This resulted to a lower power consumption for all
customer classes, residential, commercial, industrial, and even street lights, on a per capita basis from an
average of 467 kWh to 458 kWh (as of December 2011). Banana plantations, for example, reduced its
aggregate energy usage by (27% as of December 2011) due to curtailment of its water pumping needs.
Davao Light was also able to achieve modest operational milestones in 2011. Its total kWh revenue grew
by 2.25% (as of December 2011) compared to that of last year. The growth in sales can be attributed to
the modest increase in new connections by 12,925 (as of December 2011).
Highest demand recorded was 288 MW (as of December 2011), or a 1.06% decrease versus that of the
same period last year. New service connections grew by 4.60%, increasing the number of customers to
294,159 (as of December 2011).
Now entering its third year of PBR, Davao Light sees the prospect to increase its sales in pesos due to a
hike in rates by P0.09/kWh or 7% on the distribution charges by July 2012.
One of Davao Light’s approaches to keep rates at reasonable levels is by maintaining its systems losses
well within the government mandated cap of 8.5%. Benchmarking against best practices in the industry,
Davao Light established a Revenue Protection Department whose aim is to reduce the company’s
systems losses by focusing on the following: Technical loss analysis and simulations; Systems loss
segregation; Pilferage apprehension; Pilferage differential billing preparation and collection; and
Standards, procedures, and practices assessment if such are prone to loses.
Aside from the monthly monitoring, the power firm hired the services of Ateneo de Davao University’’s
Social Research Training and Development Office to undertake a full‐blown Customer Satisfaction
Survey for the second time. The survey is intended to determine if the customers’ perception about the
electric company’s service level has improved or deteriorated.
To add convenience to its paying customers, Davao Light partnered with the country’s top payment
service providers, EC Pay and CIS Bayad Center. This innovation added a combined 107 payment
facilities in strategic locations. Aside from payment centers in its own offices, Davao Light also engages
the services of third party collection agents, such as mall payment centers, authorized banks, and
convenience stores. Customers now have 130 different payment venues to choose from, 63 of which are
convenience stores that have been commissioned to receive bill payments 24/7.

To improve service reliability, a total of 19 circuit kilometers of 69 kV sub‐transmission and 13.8 kV lines
were upgraded. Ten 138 kV transmission line structures were also converted from wood to steel. In
order to maintain the standby Bunker C‐fired plant’s dependability, four of its engines with a total of 20
MW generating capacity were overhauled. Comprehensive maintenance and servicing on five
distribution facilities were undertaken to ensure continuous operation of its sub‐stations. At the same
time three control rooms were completed.
Following VECO, Davao Light rolled out Project Pearl, the project name for the Customer Care and
Billing (CC & B) system developed by Oracle being implemented among AboitizPower’s distribution
utilities. The P100 mn CC&B system is an integrated customer care software that is to replace the various
in–house developed systems currently used.
On May 20, 2011, Davao Light adopted a 500‐hectare government forest land in Upper Kibalang,
Marilog, Davao City for the purpose of implementing permanent reforestation site. It is also the
company’s way of supporting the government’s National Greening Program. Together with Therma
South, Davao Light signed a 25‐year Memorandum of Agreement (MOA) with the Department of
Environment and Natural Resources (DENR) to adopt an area to be used as permanent tree planting site
for the two Aboitiz companies. Last August 13, 2011, over 300 company employees planted 5,200
indigenous and fruit bearing tree seedlings in the area.
Davao Light’s social responsibility goes beyond giving and is grounded on its commitment to make host
communities partners on the road to progress and development. To date, 32 school buildings with a total
of 105 classrooms have been constructed and turned over to deserving public schools since 1996. Davao
Light has also funded the academic scholarships of over 400 deserving college and high school students,
all of whom are dependents of its customers since the program’s inception in 1996. It also contributed
classrooms for kindergarten students to help fulfill the 50 units commitment of the Aboitiz Group to the
Aklat Gabay at Aruga tungo sa Pag‐angat at Pag‐asa (AGAPP) program of President Aquino to jumpstart
the K to 12 basic public education curriculum.
Last September 2011, the Davao Light Employees Union (DLEU) and Management sealed a historic 5‐
year Collective Bargaining Agreement. As a result, most company‐wide activities, such as sports,
recognition day, and tree planting, are undertaken through a Labor‐Management Council (LMC) wherein
representatives from both sides are represented.
Through the years Davao Light has been consistently cited as the biggest business taxpayer of Davao
City. In 2011, it paid P56 mn to the city government of Davao.
Cotabato Light & Power Company (Cotabato Light)
Cotabato Light supplies electricity to Cotabato City and portions of the municipalities of Datu Odin
Sinsuat and Sultan Kudarat, both in Maguindanao, province in Mindanao. Its franchise area covers
approximately 191 square kilometers and has a population of approximately 350,692. In 2011, it has a
customer base of 32,996, composed of residential, commercial, industrial and flat rate customers.

Cotabato Light was formally incorporated in April 1938. Its original 25‐year franchise was granted in June
1939 by the Philippine Legislature. In 1961, the Philippine Congress passed Republic Act 3217 which was
further amended by Republic Act 3341 extending Cotabato Light’s franchise until June 1989. In August
1989, NEA extended Cotabato Light’s franchise for another 25 years, which will expire in August 2014.
AboitizPower owns 99.94% of Cotabato Light.
As of 2011, Cotabato Light has four substations, consisting of two 10 MVA, one 12 MVA and one 15 MVA.
Its substations are served by two 69‐kV transmission lines, that provide redundancy in case one
transmission line fails. Cotabato Light’s distribution voltage is 13.8 kV.
Cotabato Light maintains a standby 7‐MW Bunker C‐fired plant capable of supplying approximately 30%
of its franchise area requirements. The existence of a standby power plant, which is capable of supplying
electricity in cases of supply problems with PSALM/NGCP and for the stability of voltage whenever
necessary, is another benefit to Cotabato Light’s customers. During the Mindanao power crisis in 2010,
Cotabato Light’s franchise area experienced one of the lowest rotating power outages due to its back‐up
power plant.
Although a relatively small utility, Cotabato Light’s corporate relationship with its affiliate, Davao Light,
allows the former to immediately implement benefits from the latter’s system developments.
Keeping pace with world class standards, Cotabato Light adopted a new computerized accounting
system called ERP from Oracle. In May of 2011, Cotabato Light also implemented the Oracle’s CC&B
system, which is a world class billing, collection and customer service related systems utilized also by
other Distribution Utilities.
Managing its systems loss is a challenge for Cotabato Light. With system losses capped by ERC at 8.5%,
Cotabato Light aims to lower its systems losses through various measures, most of which aim to address
pilferage, the primary cause of its higher‐than‐cap systems losses. The implementation of Meter on Post
(MOP) or Elevated Meter Centers (EMC) will continue to be implemented in 2012 to further reduce its
systems loss.
The ERC issued its final determination on Cotabato Light’s application for approval of its ARR and
Performance Incentive Scheme under the PBR scheme covering a 4‐year regulatory period which
commenced on April 1, 2009 until March 30, 2013.
Cotabato Light filed on December 15, 2010 the third Regulatory Year Maximum Average Price (MAP)
recalculation and rate translation to be implemented from April 2011 to March 2012.
San Fernando Electric Light and Power Company, Inc. (SFELAPCO)
Incorporated on May 17, 1927, SFELAPCO was a grantee of a municipal franchise in 1927. In 1961, the
Philippine Congress passed Republic Act 3207 which granted SFELAPCO a franchise to distribute
electricity for a period of 50 years or until June 2011. Prior to the expiration of its legislative franchise,
Republic Act 9967 lapsed into law on February 6, 2010 extending the franchise of SFELAPCO for another
25 years from the date of its effectivity or on March 10, 2010.

SFELAPCO’s franchise in the City of San Fernando, Pampanga covers an area of 202,733 square
kilometers with approximately 314.21 circuit‐kilometers on its 13.8 kV and 608.21 circuit‐kilometers on its
240 volt distribution lines. A total of 35 barangays in the City of San Fernando and two contiguous
barangays in Bacolor, namely, San Isidro and Cabalantian, are currently being supplied by SFELAPCO
under its existing franchise.
SFELAPCO also serves 25 barangays in the municipality of Floridablanca and two barangays in Guagua.
This area covers 124.219 square kilometers with around 89.24 circuit‐kilometers of 13.8 kV and 144.69
circuit‐kilometers on its 240 volt distribution lines.
On November 11, 2009, SFELAPCO signed a PSA with APRI. Under the PSA, APRI will supply additional
energy required by SFELAPCO that cannot be supplied by NPC from December 25, 2009 to September
25, 2010. Thereafter, APRI became the sole provider of power to SFELAPCO until December 25, 2012.
SFELAPCO is part of the fourth batch of private utilities to enter PBR, and is currently under the four‐year
regulatory period starting October 1, 2011.
AboitizPower has an effective interest of 43.78% in SFELAPCO.
Subic Enerzone Corporation (SEZ)
In May 2003, the consortium of AEV and Davao Light won the competitive bid to provide distribution
management services to SBMA and to operate the SBFZ power distribution system for a period of 25
years. On June 3, 2003, SEZ was incorporated as a joint venture company owned by a consortium
comprised of Davao Light, AEV, SFELAPCO, Team Philippines, Okeelanta and PASUDECO to undertake
the management and operation of the SBFZ power distribution system. SEZ was formally awarded the
contract to manage the SBFZ’s power distribution system on October 25, 2003 and officially took over
the operations of the power distribution system on the same day.
SEZ’s authority to operate the SBFZ power distribution system was granted by the SBMA pursuant to the
terms of Republic Act 7227 (The Bases Conversion and Development Act of 1992), as amended.
As a company operating within the SBFZ, SEZ is not required to pay the regular corporate income tax of
30% and instead pays a preferential tax of 5% on its gross income in lieu of all national and local taxes.
Following the acquisition of AboitizPower in January 2007 of the 64.30% effective ownership interest of
AEV in SEZ, AboitizPower entered into another agreement on June 8, 2007 to acquire the combined 25%
equity stake in SEZ of AEV, SFELAPCO, Okeelanta, and PASUDECO. On December 17, 2007,
AboitizPower bought the 20% equity of Team Philippines in SEZ for P92 mn. Together with the 35%
equity in SEZ of AboitizPower’s subsidiary Davao Light, this acquisition brought AboitizPower’s total
equity in SEZ to 100%.

In September 2008, SEZ acquired the 100‐MVA Subic Substation from the NGCP. The substation has a
230/69/13.8kV power transformer supplying power to the Subic Bay Industrial Park, Binictican and
Kalayaan housing areas, Cubi, Naval Magazine, and Grande Island in the SBFZ.
In November 2008, SEZ implemented a rate increase as per approved unbundled rates.
In 2010, SEZ acquired more advanced equipment to further enhance its service to its customers. In
January, SEZ purchased a Meter Test Equipment (MTE) 5‐Position Test Bench from Germany to improve
its meter calibration services. As a result, meter calibration improved from 25 meters to 130 meters a
day. In July 2010, SEZ procured a Megger Fault Locator for underground power cable trouble‐shooting.
With this new equipment, SEZ can determine electrical underground faults more quickly, thus reducing
power outage time.
In March 2011, SEZ formally launched and implemented the Customer Care & Billing (CC&B) system as
part of its continuing effort to improve customer service.
In April 2011, SEZ installed Automatic Circuit Reclosers (ACRs) on its distribution network to provide
electric service continuity by removing a faulted circuit from the system brought about by natural causes.
In May 2011, SEZ installed an additional 69 kV SF6 Circuit Breaker to its SEZ 100 MVA Substation to
increase the flexibility and reliability of the substation’s 69kV line supplying its Maritan and Cubi
substations. SEZ also completed the preventive maintenance of all its substations namely: Remy Field
Substation, SEZ Substation, Cubi Substation, Maritan Substation, and SBIP Substation.
SEZ is part of the fourth batch (Group D) of private utilities to enter PBR. The ERC released on July 6,
2011 its final determination on SEZ’s application for approval of its MAP, ARR, and Performance
Incentive Scheme for the period covering October 2011 to September 2015. The approved MAP for the
first regulatory year, as translated into new per customer class rates, has started implementation in
January 2012.
Mactan Enerzone Corporation (MEZ)
MEZ was incorporated in January 2007 when AboitizLand spun off the power distribution system of its
MEPZ II project. The MEPZ II project, which was launched in 1995, is operated by AboitizLand under a
BOT agreement entered into with the Mactan‐Cebu International Airport Authority (MCIAA).
On June 8, 2007, AboitizPower entered into an agreement to acquire AboitizLand’s 100% equity stake in
MEZ represented by 8,754,443 common shares of MEZ. Pursuant to the agreement, AboitizPower
acquired AboitizLand’s ownership interest in MEZ valued at P609.5 mn in exchange for AboitizPower’s
common shares issued at the initial public offering price of P5.80 per share.
MEZ sources its power from NPC pursuant to a Contract to Supply Electric Energy. Under the supply
contract, NPC is required to provide power to MEZ up to the amount of contracted load, which is based

on the projections provided by MEPZ II locators under their respective Power Service Contracts with
MEZ.
In the first quarter of 2011, MEZ mounted three more sets of Automatic Voltage Regulator (AVR) to its
old substation to improve voltage levels to locators.
To further provide world‐class customer service, MEZ transferred their main administration office within
the zone where they operate, MEPZ II, by leasing an office space through a lease agreement with
Aboitizland, Inc. The MEZ control room was also renovated and expanded to improve the efficiency of
operation. The construction of warehouse for slow‐moving items last September 2011 and the battery
room construction last October 2011, and continuous replacement of wooden poles under 69 kV were
also 2011’s highlights. And to avail of the opportunities in the competitive electricity market, MEZ is now
a direct participant of the WESM starting January 2011.
For the 2011 operating period, MEZ also transferred its NGCP metering to its substation in order to
minimize line losses and further improve the voltage quality.
MEZ accomplished numerous projects and activities in the year 2011, including but not limited to,
deployment of CC & B system, launching of safety program and installation of line disconnect switches
feeder lines for systems reliability and flexibility.
Balamban Enerzone Corporation (BEZ)
BEZ was incorporated in January 2007 when Cebu Industrial Park Developers, Inc. (CIPDI), a joint venture
between AboitizLand and Tsuneishi Holdings (Cebu), Inc., spun off the power distribution system of the
WCIP‐SEZ. WCIP‐SEZ is a special economic zone for light and heavy industries owned and operated by
CIPDI. The park, which is located in Balamban, Cebu, is home to the shipbuilding and ship repair facilities
of THI, as well as the modular fabrication facility of Metaphil International and recently, to Austal
Philippines Pty. Limited
On May 4, 2007, CIPDI declared property dividend to its stockholders in the form of its equity in BEZ. On
June 8, 2007, AboitizPower entered into an agreement to acquire AboitizLand’s 60% equity stake in
BEZ represented by 4,301,766 common shares of BEZ. Pursuant to the agreement, AboitizPower
acquired AboitizLand’s ownership interest in BEZ valued at P266.9 mn in exchange for AboitizPower’s
common shares issued at the initial public offering price of P5.80 per share.
On March 7, 2008, AboitizPower purchased THC’s 40% equity in BEZ for approximately P178 mn. The
acquisition brought AboitizPower’s total equity in BEZ to 100%.
In 2009, with the continued expansions of THI in its ship building business and the construction of
additional facilities within the WCIP, BEZ constructed and energized the 25/33 MVA, 69 kV/13.8 kV
Buanoy power substation equipped with an MR on load tap changer, strategically located near the THI
shipbuilding factories to provide additional substation capacity.

Last September 25, 2009, BEZ completed the construction of the 33 MVA on‐load tap changer
substation, including the control room with 15 kV metal‐clad switchgear, as well as the two‐kilometer 69
kV line from Arpili to Buanoy substations. BEZ also erected the fast and slow moving warehouses within
their Buanoy and Arpili substations, respectively.
In January 2011, BEZ secured firm contracts with Green Core Geothermal Incorporated (GCGI), Cebu
Energy and EAUC power suppliers to ensure sufficient power supply to the different industries within the
WCIP ‐ SEZ. In same period, BEZ became a direct member of the Philippine Electricity Market
Corporation (PEMC) to avail of the power available at the WESM.
The implementation of the Supervisory Control and Data Acquisition (SCADA) last March 11, 2011 and
the installation of the closed circuit televisions at the different strategic locations by the first quarter of
2011 has greatly improved the operation of BEZ as both substations located two kilometers, apart were
remotely controlled and monitored. In addition, numerous sectionalisers were also installed to provide
more flexibility and reliability of the BEZ power system.
For the year 2011, BEZ power sales increased by 29%.
BEZ accomplished numerous projects and activities in the year 2011, including but not limited to,
deployment of CC & B system, launching of safety program and installation of line disconnect switches
feeder lines for systems reliability and flexibility.
RETAIL ELECTRICITY AND OTHER RELATED SERVICES
One of the objectives of electricity reform in the Philippines is to ensure the competitive supply of
electricity at the retail level. In particular, when Open Access and Retail Competition (Open Access)
under the Rules and Regulations to Implement the EPIRA is fully implemented, large‐scale customers will
be allowed to obtain electricity from Retail Electricity Suppliers (RES) licensed by the ERC.
Aboitiz Energy Solutions, Inc. (AESI)
AESI, a wholly owned subsidiary of AboitizPower, holds a license to act as a RES (issued on November 9,
2009) and a license to act as a Wholesale Aggregator (WA) (issued on January 26, 2007).
AboitizPower also offers a range of electricity‐related services through AESI. These services are
designed to help AESI’s customers improve the efficiency, cost and reliability of their electric equipment
and optimize their electricity consumption.
AESI is the organization which provides value added technical services to the various customers of the
AboitizPower Generation group. It provides a variety of services which include power quality analysis,
thermal scanning and power factor evaluation and correction. This allows power supply customers to
properly assess their power consumption profile leading to a more efficient management. Aside from
providing technical assistance in power quality analysis, AESI is also involved in project management
services for Transmission Line and Substations. This operation enables the wide variety of AboitizPower

customers, from distribution utilities to large industrial manufacturing firms, to source a comprehensive
service for their power requirements. From power supply to technical support, AESI provides the one
stop convenience shop in dealing with a single supplier for these customers. As the era of Open Access
begins, this same service currently enjoyed by existing AboitizPower generation customers will now be
made available by AESI to the new retail supply customers. This will positively impact the efficiency and
use of power of these industrial and residential customers in the years ahead.
Prism Energy, Inc. (Prism Energy)
Prism Energy was incorporated in March 2009, as joint venture company between AboitizPower and
Vivant. It is in the process of securing a RES license from ERC.
AdventEnergy, Inc. (AdventEnergy)
Incorporated in August 2008, AdventEnergy is a licensed RES, duly authorized by the ERC to sell, broker,
market, or aggregate electricity to end‐users.
(ii) Sales
Comparative amounts7 of revenue, profitability and identifiable assets are as follows:
2011 2010 2009

Gross Income 54,476 59,551 23,174
Operating Income 20,355 26,232 5,456
Total Assets 153,528 134,557 111,341
Note: Operating Income is operating revenue net of operating expenses.
The operations of AboitizPower and its subsidiaries and affiliates are based only in the Philippines.
Comparative amounts8 of revenue contribution by business grouping are as follows:
2009
Business Segment 2011 2010
Power Generation 41,499 74% 46,982 78% 12,466 53%

Power Distribution 14,351 25% 13,065 22% 10,734 46%
Services 528 1% 465 0% 296 1%
Total Revenue 56,384 100% 60,512 100% 23,496 100%
Less: Eliminations (1,908) (961) (322)
Net Revenue 54,476 59,551 23,174
Note: Percentages refer to the business group’s share in total revenue for a given year.
_________________________________________________________________________
7
Amounts in millions.
8
Ibid.
(iii) Distribution Methods of Products or Services

The Generation Companies sell their electricity either through the WESM or through bilateral power
supply agreements with NPC, private distribution utilities or other large end‐users.
Currently, SNAP‐Magat and SNAP‐Benguet have ASPAs with NGCP as ancillary service providers to the
Luzon Grid. As ancillary service providers, SNAP‐Magat and SNAP‐Benguet nominate their available
capacity for ancillary service to NGCP (System Operator). If NGCP accepts the nominated ancillary
capacity, it will then provide a notice of ancillary service schedule to SNAP‐Magat and SNAP‐Benguet.
TMI also has an ASPA with NGCP for a supply by each of Mobile 1 and Mobile 2 of 50 MW of ancillary
services consisting of contingency reserve, dispatchable reserve, reactive power support and blackstart
capacity for the Mindanao Grid.
Majority of AboitizPower’s Generation Companies have transmission service agreements with NGCP for
the transmission of electricity to the designated delivery points of their customers, while others built
their own transmission lines to directly connect to their customers. In some instances, where the
offtaker is NPC, NPC takes delivery of the electricity from the generation facility itself.
On the other hand, AboitizPower’s Distribution Utilities have exclusive distribution franchises in the
areas where they operate. Each of the Distribution Companies has a distribution network consisting of a
widespread network of predominantly overhead lines and substations. Customers are classified in
different voltage levels based on their electricity consumption and demand. Large industrial and
commercial consumers receive electricity at distribution voltages of 13.8 kV, 23 kV and 69 kV while
smaller industrial, commercial and residential customers receive electricity at 240 V or 480 V.
All of Aboitiz Power’s Distribution Utilities have entered into transmission service contracts with NGCP
for the use of NGCP’s transmission facilities to receive power from their respective Independent Power
Producers and NPC/PSALM for distribution to their respective customers. VECO owns a 138kV tie‐line
that connects to Cebu Energy power plant. All customers that connect to the Distribution Utilities
distribution lines are required to pay a tariff approved by the ERC.
(iv) New Products/Services
Other than the ongoing Greenfield and/or rehabilitation projects undertaken by AboitizPower’s
Generation Companies, AboitizPower and its subsidiaries do not have any publicly announced new
product or service to date.
(v) Competition
Generation Business
With the privatization of NPC‐owned power generation facilities and the establishment of WESM,
AboitizPower’s generation facilities located in Luzon, the Visayas and Mindanao will face competition
from other power generation plants that supply electricity to the Luzon, Visayas and Mindanao Grids. In
particular, SNAP‐Magat, SNAP‐Benguet, APRI and TLI are expected to face competition from leading

multinationals such as Marubeni Corporation and Korea Electric Power Corporation, as well as Filipino‐
owned IPPs such as First Gen Corporation, DMCI Holdings, Inc. and San Miguel Energy Corporation.
AboitizPower will face competition in both the development of new power generation facilities and the
acquisition of existing power plants, as well as competition for financing these activities. Factors such as
the performance of the Philippine economy and the potential for a shortfall in the Philippines’ energy
supply have attracted many potential competitors, including multinational development groups and
equipment suppliers, to explore opportunities in the development of electric power generation projects
in the Philippines. Accordingly, competition for and from new power projects may increase in line with
the expected long‐term economic growth of the Philippines.
Distribution Business
Each of AboitizPower’s Distribution Utilities currently has an exclusive franchise to distribute electricity in
the areas covered by each franchise.
Under Philippine law, the franchises of the distribution utilities may be renewed by the Congress of the
Philippines, provided that certain requirements related to the rendering of public services are met. The
Company intends to apply for the extension of each franchise upon its expiration. The Company may
face competition or opposition from third parties in connection with the renewal of these franchises. It
should be noted that under Philippine law, a party wishing to secure a franchise to distribute electricity
must first obtain a Certificate of Public Convenience and Necessity from the ERC, which requires that
such party prove that it has the technical and financial competence to operate a distribution franchise, as
well as the need for such franchise. Ultimately, the Philippine Congress has absolute discretion in
determining whether to issue new franchises or to renew existing franchises, and the acquisition by
competitors of any of the Distribution Utilities’ franchises could adversely affect the Company’s results of
operations.
(vi) Sources of Raw Materials and Supplies
Generation Business
AboitizPower’s hydroelectric facilities harness the kinetic energy from the flow of water on rivers, located
at the power plant sites, to generate electricity. The hydroelectric companies on their own, or through
NPC in the case of LHC, possess water permits issued by the National Water Resources Board (NWRB),
which allow them to utilize the energy from a certain volume of water from the applicable source of the
water flow.
Under the APA between APRI and PSALM for the Tiwi‐MakBan complex, the management and
operation of the geothermal fields which supply steam to the power generation units, remains with
Chevron Geothermal Philippines Holdings, Inc. (Chevron). The terms of the steam supply is governed by
a Transition Agreement (TA) under which APRI reimburses capital expenditures and operating expenses
and pays service fees to Chevron. The TA will take effect no more than four years from the date of the

turnover of Tiwi‐MakBan to APRI . Upon fulfilment of preconditions:Chevron becomes a Philippine
corporation; and completion of the rehabilitation of MakBan units 5 and 6; the TA will be replaced by a
Geothermal Resource Service Contract (GRSC). Under the GRSC, the price of steam shall be linked to the
Barlow Jonker and Japanese Public Utilities (JPU) coal price indices. As a result, the steam cost structure
under GRSC will shift from a largely fixed to a full variable cost.
AboitizPower’s oil‐fired plants use Bunker C fuel to generate electricity. SPPC and WMPC get fuel
supplies from NPC pursuant to the terms of their respective ECAs with NPC. EAUC and CPPC each have a
fuel supply agreement with Petron; while TMI has existing fuel supply agreements with Shell and Petron
for Mobile 1 and Mobile 2, respectively. The fuel prices under these agreements are pegged to the Mean
of Platts Singapore (MOPS) index.
STEAG has existing long‐term coal supply agreements with PT. Jorong Barutama Greston of Indonesia
and Samtan Co. Ltd of Korea.
TLI has entered into long‐term coal supply contracts for the Pagbilao plant’s annual coal requirements.
With the tight coal supply situation in the market as a result of weather disturbances in coal producing
countries, TLI is looking at and evaluating alternative sources other than Indonesia to ensure security of
supply.
Most of AboitizPower’s Distribution Utilities have bilateral agreements in place with NPC for the
purchase of electricity, which set the rates for the purchase of NPC’s electricity. The following table sets
out material terms of each Distribution Company’s bilateral agreements with NPC:
Distribution Term of Agreement Contract Energy Take or Pay Pricing Formula

Company with NPC (MWh per year)
VECO NPC ‐ (extended); expiring in 758,088 Yes ERC approved NPC
December 25, 2012 rate plus ERC
approved
adjustments
Davao Light NPC‐ 10 years; expiring in 1,363,375 Yes ERC approved NPC
December 2015 rate plus ERC
approved
adjustments
Cotabato Light NPC ‐ 10 years; expiring in 116,906 Yes ERC approved NPC
December 2015 rate plus ERC
approved
adjustments
MEZ NPC ‐ 10 years; expiring in 114,680 Yes ERC approved NPC
September 2015 rate plus ERC
approved
adjustments
The rates at which Davao Light and SFELAPCO purchase electricity from AboitizPower’s Generation
Companies are established pursuant to the bilateral agreements that are executed after the relevant

Generation Company has successfully bid for the right to enter into a PPA with either Davao Light or
SFELAPCO. These agreements are entered into on an arm’s‐length basis and on commercially
reasonable terms and are approved by the ERC. ERC regulations currently restrict AboitizPower’s
Distribution Utilities from purchasing more than 50% of their electricity requirements from affiliated
Generation Companies. Hedcor Sibulan supplies Davao Light with electricity generated from its Sibulan
plants pursuant to the Hedcor Consortium’s 12‐year power supply agreement to supply new capacity to
Davao Light. To add to its power reserve capacity, Davao Light has entered into a three‐year power
supply contract with Therma Marine for 15 MW last March 21, 2011 and provisionally approved by ERC on
May 30, 2011.
VECO has PPAs pursuant to which it purchases approximately 61.72 MW of dispatchable capacity from
CPPC (with no minimum energy off‐take requirement). In September 2009, VECO entered into an
Electric Power Purchase Agreement (EPPA) with Cebu Energy for the supply of 105 MW for 25 years to
address VECO’s long‐term power supply requirement. VECO also signed a 5‐year contract for the supply
of power from Green Core Geothermal Inc. (GCGI) for 60 MW at 100% load factor. GCGI started
supplying VECO on December 26, 2010. This supply of power replaced NPC’s reduction in contract in
2011.
The provisions of the Distribution Utilities’ PPAs are governed by ERC regulations. The main provisions of
each contract relate to the amount of electricity purchased, the price, including adjustments for various
factors such as inflation indexes, and the duration of the contract. Under current ERC regulations, the
Distribution Utilities can purchase up to 90% of their electricity requirements using bilateral contracts.
Meanwhile, Davao Light and Cotabato Light each has its own stand‐by plant. Davao Light currently
maintains the 54.8 MW Bunker C‐fired Bajada stand‐by plant which is capable of supplying 19% of Davao
Light’s requirements. Cotabato Light maintains a stand‐by 7 MW Bunker C‐fired power plant capable of
supplying approximately 30.50% of its requirements.
Transmission Charges
Each of the Distribution Utilities has entered into a transmission service contract with NGCP for the use
of NGCP’s transmission facilities in the distribution of electric power from the Grid to its customers. The
Distribution Utilities have negotiated agreements with NGCP in connection with the amount and form of
security deposit to be provided by the Distribution Utilities to NGCP to secure their obligations under
their transmission services contracts.
(vii) Major Customers
Close to 76% of the total electricity generated by the Generation Companies are either sold to private
Distribution Utilities pursuant to long‐term bilateral agreements or delivered to the NPC pursuant to
long‐term bilateral power supply agreements. The bilateral agreements with NPC are supported by
NPC’s credit, which in turn is backed by the Philippine government. The remaining 24% of the total
electricity generated by AboitizPower’s Generation Companies is sold through the WESM.

Most of AboitizPower’s Distribution Companies, on the other hand, have wide and diverse customer
bases. As such, the loss of any one customer will have no material adverse impact on AboitizPower. The
Distribution Companies’ customers are categorized into four principal categories:
(a) Industrial customers. Industrial customers generally consist of large‐scale consumers of

electricity within a franchise area, such as factories, plantations and shopping malls.
(b) Residential customers. Residential customers are those who are supplied electricity for use
in a structure utilized for residential purposes.
(c) Commercial customers. Commercial customers include service‐oriented businesses,

universities and hospitals.
(d) Other customers. Other customers include public and municipal services such as street
lighting.
(viii) Transactions With and/or Dependence on Related Parties
AboitizPower and its Subsidiaries enter into transactions with its parent, associates and other related
parties, principally consisting of:
(a) AEV provides human resources, internal audit, legal, treasury and corporate finance services, among
others, to the Group and shares with the member companies the business expertise of its highly
qualified professionals. Transactions are priced on a cost recovery basis, and billed costs are always
benchmarked on third party rates to ensure competitive pricing. Service Level Agreements are in
place to ensure quality of service. This arrangement enables the Group to maximize efficiencies and
realize cost synergies. Management, professional, legal and other service fees paid by the Group to
AEV amounted to P424.80 mn in 2011, P293.70 mn in 2010 and P409.40 mn in 2009, respectively.
(b) The Company also obtained standby letters of credit (SBLC) and is acting as surety for the benefit of
certain Subsidiaries and associates in connection with loans and credit accommodations. The
Company provided SBLC for STEAG, LHC, SNAP‐Magat and SNAP‐Benguet in the amount of P2.50
bn in 2011, P1.70 bn in 2010 and P1.80 bn in 2009.
(c) Energy fees billed by HI to SFELAPCO amounted to nil in 2011 and 2010 and P19.60 mn in 2009.
(d) Energy fees billed by CPPC to VECO amounted to P1.37 bn in 2011, P2.04 bn in 2010 and P2.10 bn in
2009.
(e) Energy fees billed by TLI to SNAP‐Magat in 2011 amounted to P22.10 mn.
(f) Energy fees billed by Therma Marine to Pilmico Foods Corporation (PFC) amounted to P29.80 mn in
2011 and P47.40 in 2010. PFC is a subsidiary of AEV.

(g) Energy fees billed by BEZC to affiliates (ACO subsidiaries and associates) amounted to P702.60 mn
in 2011, P521.90 mn in 2010 and P287.70 mn in 2009. BEZ also purchased energy from associates
amounting to P288.90 mn in 2011.
(h) Aviation services rendered by AEV Aviation, Inc., an associate to the Group, amounted to P37.50 mn
in 2011, P32.70 mn in 2010 and P24.80 mn in 2009.
(i) Lease of commercial office units by the Group from CPDC for a period of three years. Rental
expense amounted to P57.30 mn in 2011, P69.40 mn in 2010 and P48.20 mn in 2009. CPDC is a
wholly owned Subsidiary of AEV.
(j) The Company provides services to certain associates, such as technical and legal assistance for
various projects and other services. Total technical and service fee income from associates
amounted to P105.80 mn in 2011, P93.70 mn in 2010 and P2.20 mn in 2009.
(k) Cash deposits with Union Bank of the Philippines, Inc. (UBP) earn interest at prevailing market rates.
Total cash deposits of the Group amounted to P7.61 bn and P4.87 bn as of December 31, 2011 and
2010, respectively. Total interest earned on deposits with UBP amounted to P209.50 mn in 2011 and
P125.90 mn in 2010. UBP is an associate of AEV.
(l) Amounts owed to/by related parties, both interest and non‐interest‐bearing, payable on demand.
Interest‐bearing balances are based on annual interest rates ranging from 1.50% to 6.50% in 2011,
1.80% to 8.25% in 2010 and 3.00% to 9.25% in 2009. Net interest expense incurred on these
balances amounted to P0.1 mn in 2011 and P1.50 mn in 2010. Net interest income earned on these
balances amounted to P55.80 mn in 2009.
(ix) Government Approvals, Patents, Copyrights, Franchises
GOVERNMENT APPROVALS
Generation Business
Power generation is not considered a public utility operation under the EPIRA. Thus, a franchise is not
needed to engage in the business of power generation. Nonetheless, no person or entity may engage in
the generation of electricity unless such person or entity has complied with the standards, requirements
and other terms and conditions set by the ERC and has received a Certificate of Compliance (COC) from
the ERC to operate the generation facilities. A COC is valid for a period of five years from the date of
issuance.
A generation company must ensure that all its facilities connected to the Grid meet the technical design
and operational criteria of the Philippine Grid Code and Philippine Distribution Code.

Additionally, a generation company must meet the minimum financial capability standards set out in the
Guidelines for the Financial Standards of Generation Companies issued by the ERC. Under the said
guidelines, a generation company is required to meet a minimum annual interest cover ratio or debt
service coverage ratio of 1.5x throughout the period covered by its COC. For COC applications and
renewals, the same guidelines require the submission to the ERC of, among other things, comparative
audited financial statements, a schedule of liabilities, and a five‐year financial plan. For the duration of
the COC, these guidelines also require a generation company to submit to the ERC audited financial
statements and forecast financial statements for the next two fiscal years, among other documents. The
failure by a generation company to submit the requirements so prescribed by the guidelines may be a
ground for the imposition of fines and penalties.
Aboitiz Power’s Generation Companies, as well as Davao Light and Cotabato Light which own generation
facilities, are required under the EPIRA to obtain a COC from the ERC for its generation facilities.
Although an IPP‐Administrator such as TLI is not required to obtain a COC, it is nevertheless required,
along with all entities owning and operating generation facilities to comply with technical, financial and
environmental standards provided in existing laws and regulations in their operations.
In Department Circular No. DC 2010‐03‐0003 dated February 26, 2010 of the DOE, generation companies
are enjoined to ensure the availability of its generation facilities at all times subject only to technical
constraints duly communicated to the system operator in accordance with existing rules and procedures.
For this purpose, generation companies shall have the following responsibilities, among others:
a. All generation companies shall operate in accordance with their maximum available
capacity which shall be equal to the registered maximum capacity of the (aggregate) unit
less (1) forced unit outages, (2) scheduled unit outages, (3) de‐rated capacity due to
technical constraints which include (i) plant equipment‐related failure and ambient
temperature, (ii) hydro constraints which pertain to limitation on the water
elevation/turbine discharge and megawatt output of the plant and (iii) geothermal
constraints which pertains to capacity limitation due to steam quality, steam pressure and
temperature variation, well blockage and limitation on steam and brine collection and
disposal system;
b. Oil‐based generation companies shall maintain an adequate in‐country stocks of fuel

equivalent to at least 15‐days running inventory which includes shipments in transit;
c. Coal power plants shall ensure the required 30‐day coal running inventory which includes
shipments in transit;
d. During scheduled maintenance of the Malampaya natural gas facilities, all affected
generation companies shall maintain at least 15‐days running inventory of the alternative
fuel and shall operate at full capacity;

e. All generation companies with natural gas fired, geothermal and hydroelectric generating
plants shall submit to the DOE a monthly report on the current status and forecast of the
energy sources of its generating plants;
f. All generation companies must notify and coordinate with the system operator of any
planned activity such as shutdown of its equipment;
g. All generation companies must immediately inform the DOE of any unexpected shutdown
or derating of the generating facility or unit thereof; and
h. Generating companies shall seek prior clearance from the DOE regarding any plans for
deactivation or mothballing of existing generating units or facilities critical to the reliable
operation of the grid.
The Generation Companies and Davao Light and Cotabato Light possess COCs for their generation
businesses, as follows:
Power Plant
Title of Issued under
Type Location Capacity Fuel Years Of Date of Issuance
Document the name of:
Service
Hydro Irisan – Tadlangan, 1.20 MW Hydro

10
Benguet
COC Hedcor, Inc. Hydro Bineng 1 – Bineng, 3.20 MW Hydro
No. 08‐11‐GXT La Trinidad, 10
33‐0033L Benguet
Hydro Bineng 2 – La 1.80 MW Hydro
10
Trinidad, Benguet
Hydro Bineng 2B – Bineng, 0.75 MW Hydro
La Trinidad, 10 November 5, 2008
Benguet
Hydro Bineng 3 – Bineng, 4.50 MW Hydro
La Trinidad, 10
Benguet
Hydro Ampohaw – 8.00 MW Hydro
Banengbeng, 10
Sablan, Benguet
Hydro Sal‐angan – 2.40 MW Hydro
Ampucao, Itogon, 10
Benguet
COC Hedcor, Inc. Hydro Talomo 1 – Calinan, 1,000 kW Hydro 20

No. 11‐05‐GXT (Talomo Davao City
286b‐0331M Hydroelectric Hydro Talomo 2 – Mintal 600 kW Hydro
20
Power Plant) Proper, Davao City May 9, 2011
Hydro Talomo 2A – Upper 650 kW Hydro
20
Mintal, Davao City
Hydro Talomo 2B – Upper 300 kW Hydro
20
Mintal, Davao City

Hydro Talomo 3 – 1,920 kW Hydro
Catalunan, Pequeño, 20
Davao City
Hydro FLS Plant – 5.90 MW Hydro
COC Hedcor, Inc. Poblacion, Bakun, 10
No. 08‐11‐GXT Benguet
32‐0032L Hydro Lower Labay – 2.40 MW Hydro
November 5, 2008
Ampusongan, 10
Bakun, Benguet
Hydro Lon‐Oy – Poblacion, 3.60 MW Hydro
10
Bakun, Benguet
COC Hedcor Sibulan Diesel Engine Brgy. Darong, Sta. 363 kW Diesel
No. 11‐07‐GXT ‐ Darong Cruz, Davao del Sur July 7, 2011
15
17273‐17584M
Diesel Engine Brgy. Tibolo, Sta. 323 kW Diesel

COC Hedcor Sibulan Cruz, Davao del Sur
15 July 7, 2011
No. 11‐07‐GXT ‐ Tibolo
17272‐17583M
COC Hedcor, Inc. – Diesel Engine Proper Mintal, 20 kW Diesel
No. 11‐07‐GXT Talomo 2 Davao City 15 July 7, 2011
17269‐17580M
COC Hedcor, Inc. – Diesel Engine 214 Beckel, La 216 kW Diesel
No. 11‐07‐GXT La Trinidad Trinidad, Benguet 15 July 7, 2011
17271‐17582L (Beckel)
COC Hedcor, Inc. – Diesel Engine Brgy. Catalunan, 20 MW Diesel
No. 11‐07‐GXT Talomo 3 Pequeño, Davao City 15 July 7, 2011
17270‐17581M
COC Hedcor Sibulan Hydro Brgy. Sibulan, Sta. 16.328 MW Hydro
No. 10‐08‐GN‐ Hydroelectric Cruz, Davao del Sur 25 August 9, 2010
56‐16881 Power Plant A
COC Hedcor Sibulan Hydro Brgy. Sibulan, Sta. 26.257 kW Hydro

No. 10‐05‐GN Incorporated Cruz, Davao del Sur 25 May 24, 2010
54‐16816 (Plant B)
COC LHC Hydro Amilongan Alilem, 70 MW Hydro

‐
No. 08‐07‐GXT Ilocos Sur
July 29, 2008
17‐0017 Stand‐by Amilongan Alilem, 280 kW Diesel
‐
Power Ilocos Sur
COC Davao Light Bunker C J.P. Laurel Ave., 58.7 kW Blended
25
No. 10‐12‐GXT Fired Bajada, Davao City Fuel
13701‐13728M Blackstart J.P. Laurel Ave., 105.60 kW Diesel
Generator Bajada, Davao City 25
Sets
Diesel Engine J.P. Laurel Ave., 80 kW Diesel December 1, 2010
25
Bajada, Davao City
Diesel Engine J.P. Laurel Ave., 80 kW Diesel
25
Bajada, Davao City
Diesel Engine J.P. Laurel Ave., 41.6 kW Diesel
25
Bajada, Davao City
COC Cotabato Light Bunker C‐ CLPCI Compound, 9.927 MW Diesel/
No. 11‐12‐GXT Fired Diesel Sinsuat Ave., Bunker C 25
15911‐16153M Engine Cotabato City December 5, 2011
Blackstart CLPCI Compound, 10 kW Diesel
Sinsuat Ave., 25
Cotabato City

COC EAUC Diesel Mactan Export 49.90 MW ‐ ‐
No. 08‐06‐ Engine Processing Zone 1,
GXT2‐0002 Lapulapu City, June 10, 2008
Mactan, Cebu
COC CPPC Diesel Engine Old VECO 75.296 MW ‐ ‐

No. 08‐06‐ Compound, Brgy.
June 3, 2008
GXT1‐0001 Ermita, Cebu City
COC WMPC Diesel Barangay Sangali, 113 MW Bunker‐C/ ‐

No. 08‐08‐ Zamboanga City Diesel August 7, 2008
GXT20‐0020
COC SPPC Diesel Barangay Baluntay, 55 MW Bunker‐C/ ‐

No. 08‐08‐ Alabel, Sarangani Diesel August 7, 2008
GXT21‐0021 Province
Hydro electric Magat River, Brgy. 360 MW Hydro

COC SNAP‐Magat Aguinaldo, Ramon, 23
No. 10‐11‐GXT (Magat Isabela
November 22, 2010
2860‐13433L Hydroelectric Blackstart Magat River, Brgy. 320 kW Diesel
Power Plant) Generator Aguinaldo, Ramon, 23
Set Isabela
COC SNAP‐Magat Hydro Brgy. Aguinaldo 360 MW ‐ ‐
No. 05‐11‐GXT Electric Ramon, Isabela
2860‐13433 turbine January 28, 2008
Stand‐by Brgy. Aguinaldo 350 kW Diesel ‐
Diesel Genset Ramon, Isabela
COC SNAP‐Benguet Hydro Brgy. Binga, 100 MW Hydro 5
No. 10‐11‐GXT (Binga Electric Tinongdan, Itogon,
286M‐13429L Hydroelectric Benguet
Power Plant) Blackstart Brgy. Binga, 355.40 kW Diesel 5 November 15, 2010
Generator Tinongdan, Itogon,
Set Benguet
COC SNAP‐Benguet Hydro Brgy. Ambuklao, 104.55 MW Hydro 50

No. 11‐08‐GN (Ambuklao Bokod, Benguet
87‐17671L Hydroelectric August 31, 2011
Power Plant Blackstart Brgy. Ambuklao, 2.28 MW Diesel 20
Bokod, Benguet
COC SNAP‐Benguet Hydroelectric Brgy. Tinongdan, 31.45 MW Hydro 50

No. 12‐03‐GXT (Unit 4, Binga Itogon, Benguet
March 12, 2012
286m‐ HEPP)
13429U4L
Park V, Phividec 232 MW Coal 50
Coal fired Industrial Estate,
COC STEAG Power Balacanas,
No. 11‐05 GN Villanueva, Misamis
16‐15880M Oriental
Emergency Park V, Phividec 1.25 MW Diesel 25 May 30, 2011
Generating Industrial Estate,
Set Balacanas,
Villanueva, Misamis
Oriental

Brgy. Bitin, Bay, Plant A 20
Laguna 126.40 MW Geothermal
Brgy. Bitin, Bay, Plant D –
Laguna 40 MW Steam ‐
COC APRI Geothermal
No. 10‐05‐ (Makban Brgy. Limao, Plant B –
GXT286e‐7833 Geothermal Tamlong, Calauan, 126.40 MW ‐
Power Plant) ‐
Laguna
Brgy. Limao, Plant C ‐ May 31, 2010
Tamlong, Calauan, 126.4 MW ‐ ‐
Laguna
Brgy. Sta. Elena, Plant E –
Sto. Tomas, 40 MW ‐ ‐
Batangas
COC APRI Geothermal Brgy. Cale, Tiwi, 234 MW Steam December 1, 2010
No. 10‐12‐GXT (Tiwi Albay 10
286r‐13736L Geothermal
Power Plant)
Ormat‐
COC Mak‐Ban Geothermal Brgy. Sta. Elena, 18.50 MW Steam April 6, 2006
No. 06‐04‐GXT Binary GPP Sto. Tomas,
286aa‐14632 Batangas Release of new
Brgy. Bitin, Bay, COC was deferred
Laguna/ by ERC pending
Brgy. Tamlong, completion of
Calauan, Laguna rehabilitation of the
plant
COC Therma Bunker C Brgy. San Roque, 100.33 MW Bunker C/

No. 11‐04‐GXT Marine Fired Maco, Compostela Diesel 30
April 4, 2011
286gg‐15074M [Mobile 1 (M1)] Valley
Blackstart Brgy. San Roque, 1.75 MW Diesel
Maco, Compostela 30
Valley
COC Therma Bunker C Nasipit, Agusan del 100.33 MW Bunker C/
30
No. 11‐040GXT Marine Fired Norte Diesel
April 4, 2011
286bb‐14632M [Mobile 2 Blackstart Nasipit, Agusan del 1.75 MW Diesel
30
(M2)] Norte
AboitizPower’s Generation Companies, which operate hydroelectric facilities, are also required to obtain
water permits from the NWRB for the water flow used to run their respective hydroelectric facilities.
These permits specify the source of the water flow that the Generation Companies can use for their
hydroelectric generation facility, as well as the allowable volume of water that can be used from the
source of the water flow. Water permits have no expiration date and generally are not terminated by the
Government as long as the holder of the permit complies with the terms of the permit regarding the use
of the water flow and the allowable volume.
Under the EPIRA, the business of electricity distribution is a regulated public utility business that requires
a national franchise that can be granted only by the Congress of the Philippines. In addition to the
legislative franchise, a Certificate of Public Convenience and Necessity from the ERC is also required to

operate as a public utility. Except for distribution utilities operating within ecozones, all distribution
utilities possess franchises granted by Philippine Congress.
All distribution utilities are required to submit to the ERC a statement of their compliance with the
technical specifications prescribed in the Distribution Code (which provides the rules and regulations for
the operation and maintenance of distribution systems), and the performance standards set out in the
implementing rules and regulations of the EPIRA.
Shown below are the respective expiration periods of the Distribution Companies’ legislative franchises:
Distribution Company Expiration Date
VECO 2030
Davao Light 2025
Cotabato Light 2014
SFELAPCO 2035
9
SEZ 2028
MEZ and BEZ, which operate the power distribution utilities in MEPZ II and the WCIP, respectively, are
duly registered with PEZA as Ecozone Utilities Enterprises.
Supply Business
The business of supplying electricity is currently being undertaken solely by franchised distribution
utilities. However, once Retail Competition and Open Access starts, the supply function will become
competitive. Like power generation, the business of supplying electricity is not considered a public utility
operation under the EPIRA. However, it is considered a business affected with public interest. As such,
the EPIRA requires all suppliers of electricity to end‐users in the contestable market, other than
distribution utilities within their franchise areas, to obtain a license from the ERC in accordance with the
ERC’s rules and regulations. In preparation for the implementation of Retail Competition and Open
Access, AboitizPower’s wholly‐owned subsidiaries, AESI and AdventEnergy and Prism, obtained separate
licenses to act as Retail Electricity Suppliers and Wholesale Aggregators.
________________________________________________________________________________________
9
Distribution Service Management with the Subic Bay Metropolitan Authority.

Trademarks
AboitizPower and its subsidiaries own, or have pending applications for the registration of intellectual
property rights for, various trademarks associated with their corporate names and logos. The following
table sets out information regarding the trademark applications the Company and its subsidiaries have
filed with the Philippine Intellectual Property Office
Certificate of
Trademarks Applicant Date Filed Registration Description Status
No./Date Issued
Cleanergy Aboitiz October 19, 4‐2001‐07900 Application for Original Certificate of
(Class No. 42) Power 2001 January 13, 2006 trademark Registration for the mark
Corporation “Cleanergy”. CLEANERGY was issued
on January 13, 2006.
th
The 5 year Anniversary
Declaration of Actual Use
(DAU) was filed last
December 27, 2011 with
IPO.
Cleanergy and Aboitiz July 30, 2002 4‐2002‐06293 Application for Original Certificate of
Device Power trademark Registration no. 4‐2002‐
(Class No. 42) Corporation July 16, 2007 Cleanergy and 006293 was issued on July
Device with the 16, 2007.
representation of a
rd
light The 3 year Anniversay
bulb with three Declaration of Actual Use
leaves attached to (DAU) was filed last June
it, with the words 28, 2005 with IPO.
“CLEANERGY” and
a small “ABOITIZ”
diamond logo
below it.
A Better Future Aboitiz April 23, 4‐2010‐004383 Application for
Original Certificate of
(Class No. 39, Power 2010 trademark "A
Registration was issued
40, and 42) Corporation November 11, Better Future.”
on November 11, 2010.
2010
Better Solutions Aboitiz April 23, 4‐2010‐004384 Application for
Original Certificate of
(Class No. 39, 40 Power 2010 Trademark "Better
Registration was issued
and 42) Corporation November 11, Solutions".
on November 11, 2010.
2010
Cleanergy Get It Aboitiz April 23, 4‐2010‐004381 The word Original Certificate of
and Device Power 2010 "Cleanergy" with Registration was issued
(Class No. 39, 40 Corporation November 11, the phrase "get it" on November 11, 2011.
and 42) 2010 below it with both
words enclosed
inside a
representation of a
thumbs up sign.
The whole mark is

Certificate of
No./Date Issued
rendered in two
shades of green.
AboitizPower Aboitiz April 23, 4‐2010‐004385 Application for Original Certificate of
word mark Power 2010 Trademark Registration was issued
(Class 39, 40, Corporation November 11, "AboitizPower word on November 11, 2010.
and 42) 2010 Mark".
Cleanergy got it Aboitiz April 23, 4‐2010‐004382 The word Original Certificate of
& Device Power 2010 "Cleanergy" with Registration was issued
(Class 39, 40 and Corporation November 11, the phrase "got it" on November 11, 2010.
42) 2010 below it with both
words enclosed
inside a
representation of a
thumbs up sign.
The whole mark is
rendered in two
shades of green.
AboitizPower Aboitiz April 23, 4‐2010‐004380 The representation Original Certificate of
Spiral Power 2010 of a spiral rendered Registration was issued
(Class 39, 40 and Corporation February 11, 2011 in blue. on February 11, 2011.
42)
AboitizPower Aboitiz April 23, 4‐2010‐004379 The words "Aboitiz" Original Certificate of
and Device Power 2010 and "Power" Registration was issued
(Class 39, 40 and Corporation February 11, 2011 rendered in two on February 11, 2011.
42) shades of blue with
the representation
of a spiral above it
and the words "A
Better Future:
below it.
Alterspace Aboitiz April 6, 2011 4‐2011‐003968 Application for
(Class 9, 39, and Power trademark The trademark
40) Corporation “ALTERSPACE” application has been
word mark under allowed and its
Class No. 9 – publication in the Official
computer software, Gazette has been
internet approved in IPO’s notice
application, Class of allowance dated
No. 39 – energy December 14, 2011 for
distribution and the purposes of
Class No. 40 – opposition.
energy generation.
Alterspace and Aboitiz May 31, 2011 4‐2011‐006291 Application for The trademark
Device (Class 9, Power trademark application has been
39 and 40) Corporation “Alterspace and allowed and its
Device”. A globe publication in the Official
with the words Gazette has been

Certificate of
No./Date Issued
“alter” and “space” approved in the IPO’s
inside and an arrow Notice of Allowance
circling the globe dated November 4, 2011.
and separating the
two words. The
globe is rendered in
forest green, while
the words and
arrow are rendered
in lime green. Filed
under class no. 9 –
computer software,
internet
application, class
no. 39 – energy
distribution and
class no. 40 –
energy generation.
Aboitiz Energy Aboitiz January 25, 4‐2007‐000784 Application for Original Certificate of
Solutions, & Energy 2007 trademark ABOITIZ Registration was issued
Device (Class Solutions, September 3, ENERGY on September 3, 2007.
No. 42) Inc. 2007 SOLUTIONS and
rd
Device. The 3 year Anniversary
Declaration of Actual use
(DAU) was filed with the
IPO last February 4, 2010.
Power One Aboitiz July 29, 4‐2002‐006232 This is an Original Certificate of
(wordmark) Energy 2002 application for Registration was issued
(Class No. 42) Solutions, February 19, trademark “Power on February 19, 2007.
Inc. 2007 One”
rd
IPO last July 29, 2005.
Power One and Aboitiz February 17, 4‐1999‐001121 Application for Original Certificate of
Device Energy 1999 trademark “Power Registration was issued
(Class No. 42) Solutions, September 18, One and Device “ on September 18, 2006.
Inc. 2006
rd
IPO last August 13, 2002.
SUBIC Subic July 6, 2006 4‐2006‐07306 Trademark Original Certificate of
ENERZONE Enerzone Application for Registration was issued
CORPORATION Corporation August 20,2007 Subic Enerzone on August 20, 2007.
and LOGO Corporation and
rd
(colored) Logo (blue & The 3 year Anniversary
(Class No. 39) yellow). The mark Declaration of Actual Use

Certificate of
No./Date Issued
consists of the (DAU) was filed with IPO
words "Subic last July 6, 2009.
Enerzone" in
fujiyama extra bold
font with the word
"Corporation"
below it, also in
fujiyama font,
rendered in cobalt
medium blue color,
and a
representation of
the letter "S" taking
the shape of a
flame (the company
logo) above the
words. The logo is
likewise rendered in
the cobalt medium
blue color, in a
yellow background.
CORPORATION Corporation August 20,2007 Subic Enerzone on August 20, 2007.
and LOGO Corp. wordmark
rd
(gray) and logo (gray). The The 3 year Anniversary
(Class No. 39) mark consists of the Declaration of Actual use
words "SUBIC (DAU) was filed last
ENERZONE" in January 6, 2010 with IPO.
Fujiyama extra bold
font with the word
"Corporation"
below it, also in
Fujiyama font, and
a representation of
the letter "S" taking
the shape of a
flame (the company
logo) above the
words.
CORPORATION Corporation June 4, 2007 Subic Enerzone on June 4, 2007.
(wordmark) Corporation
rd
(Class No. 39) (wordmark) The 3 year Anniversary
(DAU) was filed last July
6, 2009 with IPO.

Certificate of
No./Date Issued
RP Energy and Redondo July 6, 2006 4‐2008‐009737 A representation of Original Certificate of

Device Peninsula 2 mountains, Registration was issued
(Class No. 39) Energy, Inc. April 13, 2009 colored blue and on April 13, 2009
red, with the sun
over them, and the
words "RP Energy"
and "Redondo
Peninsula Energy
Incorporated"
below it.
Aboitiz Energy Aboitiz January 25, 4‐2007‐000784 Application for Original Certificate of
Solutions & Energy 2007 trademark ABOITIZ Registration was issued
Device (Class Solutions, September 3, ENERGY on September 3, 2007.
No. 42) Inc. 2007 SOLUTIONS and
rd
device. The 3 year Anniversary
IPO last February 4, 2010.
Power One Aboitiz July 29, 4‐2002‐006232 This is an Original Certificate of
(wordmark) Energy 2002 application for Registration was issued
(Class No. 42) Solutions, February 19, 2007 trademark “Power on February 19, 2007.
Inc. One”
rd
IPO last July 29, 2005.
Power One and Aboitiz February 17, 4‐1999‐001121 Application for Original Certificate of
Device (Class Energy 1999 trademark “Power Registration was issued
No. 42) Solutions, September 18, One and Device” on September 18, 2006.
Inc. 2006
rd
IPO last August 13, 2002.
(x) Effect of Existing or Probable Governmental Regulations
Since the enactment of the EPIRA in 2001, the Philippine power industry has undergone and continues to
undergo significant restructuring. Among the provisions of the EPIRA which have had or will have
considerable impact on Aboitiz Power’s businesses relate to the following:

Wholesale Electricity Spot Market
The WESM, a spot market for the buying and selling of electricity, is a mechanism established by the
EPIRA to facilitate competition in the production and consumption of electricity. It aims to: (a) provide
for the cost‐efficient dispatch of power through an economic merit order; (b) create reliable price signals
to assist participants in weighing sell and purchase options; and (c) provide a fair and level playing field
for suppliers and buyers of electricity, wherein prices are driven by market forces.
The WESM provides avenue whereby generators may sell power, and at the same time suppliers and
wholesale consumers can purchase electricity where no bilateral contract exists between the two.
Although generators are allowed under the WESM to transact through bilateral contracts, these
contracts will have to be “offered” to the market for the purpose of determining the appropriate merit
order of generators. Settlement for bilateral contracts will, however, occur outside the market between
the contracting parties. Traded electricity not covered by bilateral contracts will be settled through the
market on the basis of the market clearing prices for each of the trading periods.
Open Access and Retail Competition
The EPIRA likewise provides for a system of Open Access to transmission and distribution wires, whereby
Transco, its concessionaire, NGCP, and any distribution utility may not refuse use of their wires by
qualified persons, subject to the payment of transmission and distribution retail wheeling charges.
Conditions for the commencement of Open Access are as follows:
(a) Establishment of the WESM;
(b) Approval of unbundled transmission and distribution wheeling charges;
(c) Initial implementation of the cross subsidy removal scheme;
(d) Privatization of at least 70% of the total capacity of generating assets of NPC in Luzon and
Visayas; and
(e) Transfer of the management and control of at least 70% of the total energy output of power
plants under contract with NPC to the IPP administrators.
As provided in the EPIRA, Open Access shall be implemented in phases. The WESM began operations in
Luzon in June 2006 and, in the Visayas, in December 2010.
In 2011, the ERC motu proprio initiated proceedings to determine whether Open Access may already be
declared in Luzon and Visayas. Following various public hearings, the ERC declared December 26, 2011
as the Open Access Date when full operations of the competitive retail electricity market in Luzon and
Visayas shall commence. All electricity end‐users with an average monthly peak demand of one (1) MW
for the twelve (12) months preceding December 26, 2011, as certified by the Commission to be
contestable customers, were given the right to choose their own electricity suppliers. However, on

October 24, 2011, upon the request of the Manila Electric Company (MERALCO), the Private Electric
Power Operators Association (PEPOA) and the Philippine Rural Electric Cooperatives Association, Inc.
(PHILRECA) for the re‐evaluation of the feasibility of the December 26, 2011 Open Access Date, the ERC
declared the deferment of the implementation of Open Access in Luzon and Visayas in light of the
inadequacy of rules, systems, preparations and infrastructure required therefore.
The implementation of Open Access will potentially result in various contracts entered into by utilities or
suppliers being “stranded.” Stranded contract costs refer to the excess of the contracted costs of
electricity under eligible contracts over the actual selling price of the contracted energy under such
contracts in the market.
In Mindanao, a truly competitive environment required by Open Access is not expected in the near future
because the largest generating asset owned by NPC in Mindanao has yet to be privatized.
Unbundling of Rates and Removal of Subsidies
The EPIRA mandated the unbundling of distribution and wheeling charges from retail rates with such
unbundled rates reflecting the respective costs of providing each service. It also mandated the removal of
cross subsidies other than the lifeline rate for marginalized end‐users which shall subsist for a period of
20 years, unless extended by law. The lifeline rate is a socialized pricing mechanism set by the ERC for
low‐income, captive electricity consumers who cannot afford to pay the full cost of electricity.
Implementation of the Performance‐based Rate‐setting Regulation (PBR)
On December 13, 2006, the ERC issued the Rules for Setting Distribution Wheeling Rates (RDWR) for
privately‐owned distribution utilities entering PBR for the second and later entry points, setting out the
manner in which this new PBR rate‐setting mechanism for distribution‐related charges will be
implemented. PBR replaces the Return on Rate Base (RORB) mechanism which has historically
determined the distribution charges paid by customers. Under PBR, the distribution‐related charges that
distribution utilities can collect from customers over a 4‐year regulatory period is set by reference to
projected revenues which are reviewed and approved by the ERC and used by the ERC to determine a
distribution utility’s efficiency factor. For each year during the regulatory period, a distribution utility’s
distribution charges are adjusted upwards or downwards taking into consideration the utility’s efficiency
factor as against changes in overall consumer prices in the Philippines.
The ERC has also implemented a Performance Incentive Scheme whereby annual rate adjustments under
PBR will take into consideration the ability of a distribution utility to meet or exceed service performance
targets set by the ERC, such as the average duration of power outages, the average time of restoration to
customers and the average time to respond to customer calls, with utilities being rewarded or penalized
depending on their ability to meet these performance targets.
Cotabato Light is entering the last Regulatory Year of its current Regulatory Period covering April 1, 2009
to March 31, 2013, for which the ERC has previously approved in its Final Determination the 4‐year
Annual Revenue Requirements and Performance Incentive Scheme. On December 2011, Cotabato Light

filed with the ERC an application for rates translation, which will effectively be charged to its customers
for the 4th Regulatory Year April 1, 2012 to March 31, 2013.
Likewise, Cotabato Light is already preparing for the upcoming reset process of its next Regulatory
Period April 1, 2013 to March 31, 2017. The activities will include asset revaluation, forecasting operation
and maintenance and capital expenditures, setting the new performance targets, among others.
On March 2011, VECO and Davao Light filed their rate translation application for the second Regulatory
Year July 1, 2011 to June 30, 2012. Since implementation by VECO of the rate translation in the first
Regulatory Year was delayed by one month, recovery for the under‐recovery was included in its
application for the second Regulatory Year. On June 29, 2011, the ERC rendered its decision setting the
distribution, supply and metering charges of Davao Light and VECO.
For SEZ and SFELAPCO, ERC has issued last August 2011 the respective Final Determinations for the
distribution utilities’ 4‐year Annual Revenue Requirement and Performance Incentive Scheme covering
the Regulatory Period October 1, 2011 to September 30, 2015. Both SEZ and SFELAPCO have filed their
respective applications for rates translation for the first Regulatory Year October 1, 2011 to September
30, 2012. The decision for SEZ was released last December 2011 and the effective rates resulting
therefrom have been implemented starting this January 2012. The one for SFELAPCO is expected to be
resolved by February 2012. The resulting under‐recoveries from the lag starting from October 1, 2011
can be recovered in the rates filing on the second Regulatory Year. The PBR rules allow such mechanism
in its Maximum Average Price (MAP) formula.
Reduction of Taxes and Royalties on Indigenous Energy Resources
To equalize prices between imported and indigenous fuels, EPIRA mandates the President of the
Philippines to reduce the royalties, returns and taxes collected for the exploitation of all indigenous
sources of energy, including but not limited to, natural gas and geothermal steam, so as to effect parity
of tax treatment with the existing rates for imported coal, crude oil, bunker fuel and other imported fuels.
Following the promulgation of the implementing rules and regulations, former president Arroyo enacted
Executive Order No. 100 to equalize the taxes among fuels used for power generation.
Proposed Amendments to the EPIRA
Since the enactment of the EPIRA, members of the Philippine Senate and House of Representatives have
proposed amendments to the EPIRA and its implementing rules and regulations. Some of the proposed
amendments are discussed below.
(a) Disallowance of the recovery of Stranded Contract costs;
(b) Requiring transmission charges, wheeling charges, connection fees, and retail rates to be
approved by the ERC only after due notice and public hearing participated in by all
interested parties;

(c) Exclusion from the rate base the following items that Transco and the distribution utilities
charge the public corporate income tax, value of the franchise, value of real or personal
property held for possible future growth, costs of over‐ adequate assets and facilities, and
amount of all deposits as a condition for rendition and continuation of service;
(d) Prohibition of cross‐ownership between generation companies and distribution utilities or

any of their subsidiaries, affiliates, stockholders, officials, or directors, or the officials,
directors, or other stockholders of such subsidiaries or affiliates, including the relatives of
such stockholders, officials, or directors within the fourth civil degree of consanguinity;
(e) Prohibiting distribution utilities under a bilateral electric power supply contract from sourcing
more than 33% of its total electric power supply requirements from a single generation
company or from a group of generating companies wholly owned or controlled by the same
interests. On the effectiveness of the proposed law, any distribution utility that has
contracts which exceed the allowable 33% limit will be directed to desist from further
awarding additional electric power supply contracts with any generation company or group
of generating companies wholly owned or controlled by the same interests, until its present
electric power supply requirements, when added to the proposed additional electric power
supply contract or contracts with any generation company or group of generating
companies wholly owned or controlled by the same interests shall comply with the 33%
limit;
(f) Adding the following exceptions under Section 45 of EPIRA (Cross Ownership, Market
Power Abuse and Anti‐Competitive Behavior): (1) generating companies utilizing or
producing power from site‐specific indigenous and renewable energy source such as hydro,
geothermal and wind power and (2) if the breach in market share limits is due to the
temporary or permanent shutdown or non‐operation of other generating facilities;
(g) Exemption or deferral of some assets of NPC from privatization, such as the Unified Leyte
(Tongonan) Geothermal Complexes, Agus and Polangui Complexes, and the Angat Dam;
(h) Expansion of the definition of host communities to include all barangays, municipalities and
provinces or regions that protect and maintain watersheds that provide water supply to the
dam or hydroelectric power generating facility;
(i) Requiring distribution utilities to pay a franchise tax equivalent to 3% of the distribution
utility’s gross income in lieu of all taxes;
(j) Exemption of a distribution utilitiy or a company holding its shares or its controlling
stockholders from the mandory divestment rule provided under Section 28 of the EPIRA, if
the shares of the distribution utility, its parent company or its controlling stockholders are
listed in the PSE at the time of the effectivity of RA 9136.

The Renewable Energy Act of 2008
Republic Act No. 9513, the Renewable Energy Act of 2008 (RE Law) was signed into law by the former
president, Gloria M. Arroyo, on December 16, 2008 and became effective in January on 2009.
The RE Law’s declared policy is to encourage and develop the use of renewable energy resources of the
country to reduce the country’s dependence on fossil fuels and overall costs of energy, and reduce, if not
prevent, harmful emissions to promote a healthy and sustainable environment.
The RE Law imposes a government share on existing and new RE development projects at a rate of 1% of
gross income from sale of renewable energy and other incidental income from generation, transmission
and sale of electric power except for indigenous geothermal energy which shall be at a rate of 1.50% of
gross income. Micro‐scale projects for communal purposes and non‐commercial operations with
capacities not exceeding 100 kW will not be subject to this government share.
The RE Law offers fiscal and non‐fiscal incentives to RE developers, including developers of hybrid
systems, subject to a certification from the DOE, in consultation with the Board of Investments (BOI).
These incentives include income tax holiday for the first seven years of commercial operations; duty‐free
importations of RE machinery, equipment and materials effective within ten years upon issuance of
certification, provided, said machinery, equipment and materials are directly, exclusively and actually
used in RE facilities; special realty tax rates on equipment and machinery not exceeding 1.50% of the net
book value; net operating loss carry‐over (NOLCO); corporate tax rate of 10% after the 7th year;
accelerated depreciation; zero‐percent value‐added tax on sale of fuel or power generated from
emerging energy sources and purchases of local supply of goods, properties and services of RE facilities;
cash incentives for RE developers for missionary electrification; tax exemption on carbon emission
credits; tax credit on domestic capital equipment and services. All fiscal incentives apply to all RE
capacities upon effectivity of the RE Law. RE producers from intermittent RE resources are given the
option to pay transmission and wheeling charges on a per kilowatt‐hour basis at a cost equivalent to the
average per kilowatt‐hour rate of all other electricity transmitted through the grid. On the other hand,
electricity generated from emerging RE resources such as wind, solar, ocean, run‐of‐river hydropower
and biomass are likewise given priority dispatch. Electricity generated from RE resources for the
generator’s own consumption and/or for free distribution in off‐grid areas are exempt from the universal
charge. The RE Law further provides a financial assistance program from government financial
institutions for the development, utilization and commercialization of renewable energy projects, as may
be recommended and endorsed by the DOE.
According to Department Circular No. DO2009‐05‐008 dated May 25,2009 (Rules and Regulations
Implementing the Renewable Energy Act of 2008), the DOE, Bureau of Internal Revenue (BIR) and the
Department of Finance (DOF) shall, within six months from its issuance, formulate the necessary
mechanism and/or guidelines to implement the entitlement to the general incentives and privileges of
qualified RE developers. However, as of this date, no specific guidelines or regulations has been issued
by the relevant implementing agencies. Such being the case, the renewable energy companies of
AboitizPower, such as APRI, LHC, Hedcor Sibulan, Hedcor Tamugan, SNAP‐Magat and SNAP‐Benguet
filed on August 6, 2010 a request for ruling before the BIR Law Division on the application of zero‐rated

value‐added tax on all its local purchases of goods and services needed for the development of the RE
plant facilities, the exploration and development of RE sources and their conversion into power. To date,
the said request is still pending with the BIR Law Division.
On May 16, 2011, the National Renewable Energy Board (NREB) filed in the ERC a petition for the
adoption of the feed‐in tariff (FIT) for the emerging RE resources, namely, wind, solar, ocean, run‐of‐river
hydropower and biomass. The proposed FITs are as follows: (a) wind – P10.37/kWh; (b) solar –
P17.95/kWh; (c) run‐of‐river hydropower – P6.15; (d) ocean – P17.65/kWh; and (e) biomass –
P7.00/kWh. As of date, hearings are being held before the ERC for the determination of the justness and
reasonableness of the proposed FITs.
NREB is likewise in the process of preparing the Renewable Portfolio Standards which, under the RE Law,
shall be a market‐based policy requiring electricity suppliers to source an agreed portion of their energy
supply from eligible RE resources. It is further in the process of drafting rules enabling the net metering
program for RE which shall govern distributed generation.
New ERC Regulation on Systems Loss Cap Reduction
Under ERC Resolution No. 17, Series of 2008, the actual recoverable systems losses of distribution
utilities was reduced from 9.50% to 8.50%. The new system loss cap was implemented in January 2010.
Under the new regulation, actual company use of electricity shall be treated as an expense of the
distribution utilities, particularly, as an Operation and Maintenance expense in the PBR applications.
In December 2009, VECO and Cotabato Light filed separate petitions in the ERC for the deferment of the
implementation of the new system loss cap of 8.5%, citing circumstances peculiar to their franchise and
beyond the control of VECO and Cotabato Light, which affect the system loss incidence in their areas.
(xi) Estimate of Amount Spent for Research and Developmental Activities
AboitizPower and its subsidiaries do not allocate specific amounts or fixed percentages for research and
development. All research and developmental activities are done by AboitizPower’s subsidiaries and
affiliates on a per project basis. The allocation for such activities may vary depending on the nature of
the project.
(xii) Costs and Effect of Compliance with Environmental Laws
AboitizPower’s generation and distribution operations are subject to extensive, evolving and increasingly
stringent safety, health and environmental laws and regulations. These laws and regulations, such as the
Clean Air Act (Republic Act No.8749), address, among other things, air emissions, wastewater
discharges, the generation, handling, storage, transportation, treatment and disposal of toxic or
hazardous chemicals, materials and waste, workplace conditions and employee exposure to hazardous
substances. Each of AboitizPower Generation Companies and Distribution Utilities has incurred, and

expects to continue to incur, operating costs to comply with such laws and regulations. In addition, each
of AboitizPower’s Generation Companies and Distribution Utilities has made and expects to make capital
expenditures on an ongoing basis to comply with safety, health and environmental laws and regulations.
AboitizPower’s hydropower companies allocate a budget for watershed management system in the
respective watersheds where their projects are located.
Standard regulations that govern business operations other than Clean Air Act are Ecological Solid Waste
Management Act (Republic Act No. 9003), Clean Water Act (Republic Act No. 9275), Toxic Chemical
Substances and Hazardous Waste Act (Republic Act No. 6969), Philippine Environmental Impact
Statement System (Presidential Decree No. 1586). Designated pollution control officers in the different
business units closely monitor compliance to the requirements of these regulations.
In 2011, AboitizPower earned DENR Award for Philippine Environmental Partnership Program, the only
power generation company in the country to receive three awards simultaneously. Specifically,
AboitizPower’s business units HEDCOR and APRI were cited as companies that ‘give premium to
environmental protection as an integral business concern’. To win the awards, these companies did not
have cases filed against them with the Pollution Adjudication Board of DENR for three years and have
fully complied with applicable environmental laws, rules and regulations and have proven record of
superior environmental performance.
The RE Law adds new and evolving measures that must be complied with. The law ushers new
opportunities for the Company and sets competitive challenges. The Renewable Energy Act of 2008
(Republic Act No. 9513) has encountered issues related to FIT that slowed down its full implementation.
However, pending implementation, RE Bill continues to outline opportunities for the industry and for
companies like AboitizPower.
Further, the adoption of new safety, health and environmental laws and regulations, new interpretations
of existing laws, increased governmental enforcement of environmental laws or other developments in
the future may require that the Company make additional capital expenditures or incur additional
operating expenses in order to maintain the operations of its generating facilities at their current level,
curtail power generation or take other actions that could have a material adverse effect on the
Company’s financial condition, results of operations and cash flow.
In 2011 AboitizPower and its subsidiaries and affiliates did not incur any major sanctions for violation of
environmental standards and law. Investments for occupational health and safety measures paid off for
some companies who have gained recognition for operating without accidents.
Regulations such as Energy Regulation 1‐94 gets the companies to allocate funds for the benefit of host
communities. Compliance is not only for protection of the natural environment but also of the
communities that inhabit the landscape. AboitizPower continues to be cognizant of new opportunities
to comply with regulatory requirements and improvement of systems to prevent adverse impacts to the
environment or affected ecosystems.

(xiii) Employees
On the parent company level, AboitizPower has a total of 118 employees as of February 29, 2012,
composed of executive, supervisory, and rank and file staff. There is no existing collective bargaining
agreement covering AboitizPower employees.
As of February 29, 2012, the Company, its consolidated subsidiaries, LHC, VECO, SNAP ‐ Benguet,
SNAP‐Magat, EAUC and MORE employed a total of 560 employees.
The following table provides a breakdown of total employee headcount on a per company basis, divided
by function, as of February 29, 2012.
Number of Employees Unionized Expiry of

Business Unit
Total Executives Managers Supervisors Rank & File Employees CBA
AboitizPower 118 35 17 20 46 N/A N/A
AESI 24 1 1 4 18 N/A N/A
BEZ 8 0 0 1 7 N/A N/A
MEZ 13 1 1 2 19 N/A N/A
ARI 0 0 0 0 0 N/A N/A
CBA
negotiation
APRI 335 7 21 59 248 N/A still ongoing
CPPC 45 0 2 12 31 N/A N/A
EAUC 44 1 2 12 29 N/A N/A
LHC 38 0 3 5 30 N/A N/A
MORE 41 10 17 14 0 N/A N/A
SEZ 52 2 3 4 43 N/A N/A
SNAP‐Magat 36 1 0 14 21 N/A N/A
SNAP‐Benguet 51 2 1 20 28 N/A N/A
STEAG 198 3 17 42 136 N/A N/A
WMPC 78 0 4 20 54 N/A N/A
SPPC 66 0 4 17 45 N/A N/A
Cotabato Light 74 1 2 16 55 46 June 30, 2014
Davao Light 396 14 27 175 180 180 June 15, 2016
September
Hedcor, Inc. 288 8 12 28 240 139 19, 2013
December 31,
2011 (CBA
negotiation
VECO 350 6 15 39 290 263 still ongoing)
SFELAPCO 89 5 12 6 66 66 May 9, 2014
TOTAL NO. OF
EMPLOYEES 2,344
The Company does not anticipate any increase in manpower within the next 12 months unless new
development projects and acquisitions would materially require an increase.

On October 28, 2010, the Visayan Electric Company Employees Union – ALU – TUCP (the Union) filed a
Notice of Strike against VECO on grounds of unfair labor practice for alleged illegal dismissal of the union
president and officers and alleged failure to observe the grievance procedure in the Collective Bargaining
Agreement (CBA). The Secretary of Labor assumed jurisdiction over the strike and remanded the illegal
dismissal case of the union president to the National Labor Relations Commission (NLRC) for compulsory
arbitration.
On June 30, 2011, the NLRC dismissed the charge of unfair labor practice against VECO for lack of merit,
and declared legal the dismissal of the Union president. The Union moved to reconsider the adverse
decision of the NLRC, but the motion was denied. Consequently, on October 18, 2011, the Union filed a
petition for certiorari with the Court of Appeals, where the appeal is pending.
(xiv) Major Risk/s Involved in the Business
An integral part of AboitizPower’s Enterprise Risk Management efforts is to anticipate, understand and
address the risks that it might encounter in the businesses in which it is involved. Certain risks, however,
are inherent to specific industries that are not within the direct control of AboitizPower or its investee
companies. Of note are the following:
Reputation Risk
AboitizPower recognizes that its reputation is its most valuable asset. It is a competitive advantage that
enables the Company to earn the trust of its shareholders and other stakeholders. The Company is
cognizant of the fact that the reputation it has today took generations to firm up and is therefore
something that must be protected, built and enhanced continuously.
Managing the Company’s reputation requires understanding of its reputational terrain, which has
expanded from the general public to its very own team members, partners, shareholders, lenders,
communities it operates in, NGOs, regulators, advocacy groups, and those in traditional and social
media. The views of these various stakeholders and their perception of the image that the Company
communicated over time determine its Employer, Societal, Regulatory, Customer and Shareholder
Brand. The Company’s Corporate Communications and Branding Teams, established in 2009, have the
primary task of ensuring that reputation, the Company’s vital asset, is not only protected but also
enhanced.
Competition Risk
AboitizPower is facing pivotal changes in the power industry for the next few years. Over 70% of the
generating assets and IPP contracts of NPC have been privatized. The WESM is operational in Luzon and
Visayas, and will be operational in Mindanao soon. Investments in Greenfield projects by competitors are
starting to pour in, with new players coming into the game. The power industry is now moving into a
situation where there will be adequate or even, as some fear, an oversupply of electricity across all grids.

The Company’s strength lies in the diversified portfolio of its generation assets. Within the year,
AboitizPower is looking to break ground on its coal Greenfield projects in Subic, Pagbilao and Davao.
The Company will likewise break ground in five small hydro projects namely Tudaya 1 and 2 in Sibulan,
Sita and Simod in Bukidnon and Sabangan in Luzon.
The Company has also demonstrated its ability to acquire the skill and talent necessary to operate its
newly acquired plants at their expected level of operating standards. It has an experienced management
team and continuously beefs up its talents for plants that will be constructed in the future. Concerns on
succession have been actively addressed by identifying talents from within and staging the necessary
training and intervention efforts to ensure the continuity in operations.
Trading Risks
Power spot prices are subject to significant volatility from supply and demand changes. Both long‐term
and short‐term power prices may also fluctuate substantially due to the factors outside of the Company’s
control, which include the following: forced outages, transmission constraints, disruptions in the delivery
chain, weather conditions, and changes in fuel price. These factors have caused and are expected to
cause fluctuation or instability in the operating results of the Generation Companies, particularly
Generation Companies that sell substantial portions of the electricity they generate to the WESM.
AboitizPower plans to manage these risks by having a balanced portfolio of contracted and spot
capacity. In particular, it intends to contract a majority of its base load and diesel capacity under price‐
stable bilateral contracts, and offer most of its hydro‐electric capacity for peaking and ancillary services.
Regulatory Risk
AboitizPower’s Generation and Distribution businesses are subject to constantly evolving regulations.
Regulators are tightening their scrutiny and the public has become more vigilant and involved in the
power debate.
To respond proactively to potential fundamental changes that can impact its businesses, AboitizPower’s
regulatory team works very closely with its Generation and Distribution Companies and maintains open
lines of communications with regulatory agencies. This includes actively participating in the consultative
processes that lead to the development of new rules and policies covering the power industry. The
Company’s regulatory team has also developed a strategy anchored on long‐term views of expected or
anticipated changes in the regulatory field. The Company’s approach integrates understanding how
regulations will affect its businesses, and planning and preparing for expected changes in regulation,
rather than waiting for regulations to be imposed.
Business Interruption due to Natural Calamities and Critical Equipment Breakdown
Loss of critical functions and equipment caused by natural calamities such as earthquakes, windstorms,
typhoons and floods could result in a significant interruption of the Company’s businesses. Interruption

may also be caused by other factors such as major equipment failures, fires and explosions, hazardous
waste spills, workplace fatalities, product tampering, terrorism, and other serious risks.
Regular preventive maintenance of the Company’s facilities are being strictly observed and loss
prevention controls are continually being evaluated and strengthened. To ensure the continuity of
operations in the event of a business interruption, AboitizPower has started developing a Business
Continuity and Crisis Management Plan in 2011. Business Interruption insurance has also been procured
to cover the potential loss in gross profits in the event of a major damage to the Group’s critical facilities
and assets.
Financial Risks
In the course of operation of the Company and its business units, the Company is exposed to financial
risks namely, interest rate risk resulting from movements in interest rates that may have an impact on
outstanding long‐term debt; credit risk involving possible exposure to counter‐party default on its cash
and cash equivalents, AFS investments and trade and other receivables; liquidity risk in terms of the
proper matching of the type of financing required for specific investments; and foreign exchange risk in
terms of foreign exchange fluctuations that may significantly affect its foreign currency denominated
placements and borrowings.
Details of above risks including measures to mitigate them are discussed in the notes to the financial
statements.
Fuel Supply Risk
AboitizPower has several thermal plants – TLI, STEAG Power and Cebu Energy which use coal, and
CPPC, EAUC, and TMI which use Bunker C fuel. These fuel types are subject to significant fluctuation in
fuel prices and supply issues.
For TLI, STEAG and Cebu Energy, their bilateral contracts allow for their fuel cost to be recovered from
their tariffs. Meanwhile, SPPC and WMPC’s power plants are operated under ECAs with NPC. Under the
ECAs, NPC is required to deliver and supply to both plants the fuel necessary to operate these power
plants for the duration of the cooperation period.
On the supply side, CPPC, EAUC and TMI each has entered into 2011 medium term (2‐3 year) contracts
with the large oil companies in the Philippines. CPPC and EAUC currently have medium term supply
contracts in place, while TMI has finalized in 2011 a new supply contract. Cebu Energy has long term coal
contracts with various coal suppliers, while STEAG had entered into an alternate coal supply agreement
to allow it to diversify its fuel supply. TLI locked in the prices of its coal supply at a fixed price for 2011.
TLI has also entered into a long term coal supply agreement with different suppliers of performance and
blending coal to help ensure stability of supply.

Project Risks
The rebirth of the Company’s Ambuklao Complex, the ongoing rehabilitation efforts of its facilities in
Tiwi, Makban and Binga and its four power barges exposed the Company to significant project risks in
2011.
For 2012, given the Company’s focus on Greenfield projects for its coal plants in Subic, Davao and
Pagbilao, its small hydro projects, Tudaya 1 and 2 in Sibulan, Sita Simod in Bukidnon and Sabangan in
Luzon, the Company is expecting more uncertainty relating to these projects scheduled to break ground
in 2012. Given the magnitude and duration of these projects, there are inherent issues and risks, such as
completion of these projects within specifications, budget and timelines.
To assure the success of these projects, AboitizPower is partnering with contractors and suppliers of
established reputations. As it deals with uncertain events and conditions that might have positive or
negative effect on its project objectives, the Company will be implementing a project risk management
framework and program based on the Project Management Book of Knowledge (PMBOK) standards in
2012.
Working Capital
For 2010, AP derived its working capital mainly from the steady cash flow generated and contributed by
its subsidiaries and associates and, to a certain extent, from its capital raising activities for the year.
Item 2. Properties
The Company’s head office is located at the Aboitiz Corporate Center, Gov. Manuel A. Cuenco Avenue,
Kasambagan, Cebu City, Philippines. The premises are leased from an Affiliate, CPDC.
On a consolidated basis, the 2011 total Property, Plant and Equipment of AboitizPower were valued at
P78.71 bn as compared to P74.29 bn for 2010. The breakdown is as follows:
Property, Plant and Equipment as of December 31, 2011 and 2010 (in thousand pesos).
Property, Plant and Equipment 2011 2010

Land 608,026 114,336
Buildings, Warehouses and Improvements 2,714,222 951,281
Powerplant, Equipment and Steamfield Assets 74,301,864 73,370,137
Transmission, Distribution and Substation Equipment 5,422,567 4,998,903
Transportation Equipment 543,696 459,746
Office Furniture, Fixtures and Equipment 262,265 159,951
Leasehold Improvements 102,753 204,563
Electrical Equipment 1,935,569 1,642,611
Meter and Laboratory Equipment 472,776 383,765
Tools and Others 690,656 375,433
Construction in Progress 4,413,888 1,552,872
Less: Accumulated Depreciation and Amortization 12,760,164 9,921,834
TOTAL 78,708,118 74,291,764

Locations of Principal Properties and Equipment of AboitizPower subsidiaries are as follows:
SUBSIDIARY DESCRIPTION LOCATION/ADDRESS CONDITION

Cotabato Light Industrial land, buildings/plants, Sinsuat Avenue, Cotabato City In use for
equipment and machineries operations
Davao Light Industrial land, buildings/plants, P. Reyes Street, Davao City; Bajada, In use for
equipment and machineries Davao City operations
Hedcor Hydropower plants Kivas, Banengneng, Benguet; In use for
Beckel, La Trinidad, Benguet; operations
Bineng, La Trinidad, Benguet;
Sal‐angan, Ampucao, Itogon,
Benguet;
Bakun, Benguet
Hedcor Sibulan Hydropower plant Santa Cruz, Sibulan Davao del Sur In use for
operations
CPPC Bunker C thermal power plant Cebu City, Cebu In use for
operations
APRI Geothermal power plants Tiwi, Albay In use for
Caluan, Laguna operations
Sto. Tomas, Batangas
Therma Marine Barge‐mounted diesel power Nasipit, Agusan del Norte In use for
plants Barangay San Roque, Maco, operations
Compostela Valley
Therma Mobile Barge‐mounted diesel power Navotas Fishport, Manila Under
plants rehabilitation
Therma South Land Davao City; Davao del Sur For plant site
Vesper Land Bato, Toledo, Cebu For plant site
Item 3. Legal Proceedings
Material Pending Legal Proceedings
VECO Redundancy Program
1. Jeanu A. Du, et. al vs. VECO (Aguinaldo Agramon et.al.)

NLRC RAB VII Case No. 04‐0956‐06

CA GR SP No. 03379
Court of Appeals, 19th Division
June 15, 2006
2. Alejo C. Pol, et.al vs. VECO

Cebu City
September 11, 2006
3. Melchor E. Custodio, Frederick Rivera & Henry Bacaltos vs. VECO

NLRC RAB VII CASE No. 11‐2542‐2006
NLRC RAB VII CASE No. 12‐2714‐2006
Cebu City
November 23, 2006
4. Bernard Acebedo & Alexander E. Alo vs. VECO

Cebu City
June 12, 2007
VECO is involved in cases for illegal dismissal and/or non‐payment of retirement benefits filed by
approximately 120 former employees claiming back wages, damages, and reinstatement. These
employees previously accepted VECO’s redundancy program, a program initiated in 2004 and which was
explained and discussed at length with VECO’s labor union and entire work force at that time. The
employees, whose positions were made redundant, including complainants, received their individual
notices of redundancy between May and November 2004. They were formally separated from VECO
between the periods June to December 2005. At the time of their termination from employment, each of
the complainants read through, and was made to understand the contents of, and did sign their
individual release, waiver, and quitclaim in the presence of a representative from the Department of
Labor and Employment. These employees received separation benefits which were clearly above the
minimum requirements provided under the Labor Code.
All the complaints have been dismissed for lack of merit at the labor arbiter level and VECO’s redundancy
program has been upheld as a management prerogative. The Court of Appeals and the Supreme Court
have affirmed the dismissal of the complaints. In Jeanu A. Du, et. al. vs. VECO, the complainants moved
to reconsider the Court of Appeal’s decision dismissing their case. The appeal remains pending with the
Court of Appeals.

VECO vs. Roy Salubre, et. al.
Civil Case No. CEB‐36172,
RTC Branch 16, Cebu City
The Province of Cebu assessed delinquency real property tax against VECO on the ground that VECO’s
electric posts and transformers located in Consolacion should be treated as real property. A Notice of
Sale of Delinquent Property covering these poles and transformers was subsequently issued against
VECO.
VECO filed this case to question the legality of the assessment and the public auction, insisting that the
electric poles and transformers are not real properties and therefore not subject to real property taxes.
Moreover, VECO is exempt from paying real property tax on poles, wires and transformers by virtue of its
legislative franchise (R.A. 9339). On July 27, 2010, the lower court rendered a decision in favor of VECO
and ordered the issuance of a writ of prohibition and injunction against the defendants.
The Province of Cebu elevated the case to the Court of Appeals. Both parties’ Memorandum were noted
and admitted and the case is now submitted for resolution.
In The Matter of the Assessed Real Property Tax On Electric Posts And Transformers
Located Within Talisay City
Local Board of Assessment Appeals‐ Talisay City
December 30, 2003
On October 29, 2003, the Local Board of Assessment Appeals (LBAA) of Talisay City, Cebu issued a
Notice of Assessment and Tax Bill (for Tax Declaration Nos. 68006 to 68065) against VECO for P10.50
mn, real property tax on VECO’s electrical posts and transformers. The assessment was increased to
P16.90 mn in 2004. On November 17, 2005, the assessment was further increased to P17.50 mn. In
2003, VECO paid under protest the amount of P2 mn. This matter is currently pending before the LBAA
of Talisay City. Despite the pendency of this case before the LBAA, VECO also filed last May 10, 2007 a
letter‐request for legal opinion/confirmation before the Bureau of Local Government Finance,
Department of Finance (BLGF‐DOF) on the exemption from real property tax of VECO’s electrical poles
pursuant to VECO’s legislative franchise. This request is also pending for resolution.
In The Matter Of The Assessed Real Property Tax On Electric Posts And Transformers
Located Within The Municipalities Of Minglanilla, Consolacion and Lilo‐an, Province of Cebu
Local Board of Assessment Appeals‐ Province of Cebu
September 23, 2008
On July 25, 2008, the Provincial Assessor of Cebu issued a Notice of Assessment for the electric poles and
transformers owned by VECO located in the Municipalities of Minglanilla, Consolacion and Lilo‐an. The
Provincial Assessor, motu proprio, declared for tax purposes for the first time the said properties under
Tax Declaration Nos. 39178 to 39193 (for Minglanilla), 39135 to 39166 (for Consolacion) and 54445 to
54458 (for Liloan). On August 27, 2008, VECO received a letter from the Provincial Treasurer demanding

payment of approximately P32 mn as real property tax due on the supposed real properties computed
from year 1992 up to 2008, including penalties, to the three municipalities.
On September 23, 2008 VECO filed a Notice of Appeal and Memorandum of Appeal before the LBAA of
the Province of Cebu questioning the demand letter and refuting the assessment on the following
grounds: (i) VECO is exempt from paying real property tax on poles, wires and transformers by virtue of
its legislative franchise (R.A. 9339); (ii) poles and transformers are not real properties; (iii) the valuation is
erroneous and excessive; (iii) it includes assessments which have already prescribed; (iv) the
municipalities did not give VECO the opportunity to present controverting evidence; (v) it did not
consider depreciation cost of the assets; (vi) the assessment violates due process for it did not comply
Section 223 of the Local Government Code of 1991; (vii) the Provincial Assessor erred in giving
retroactive effect to the assessment in violation of Section 221 of the Local Government Code of 1991;
and (viii) the assessments are null and void for lack of ordinance on the schedule of market values and
lack of publication of the same.
To date, the said appeal is still pending resolution.
Luzon Hydro Corporation vs. The Province Of Benguet,

The Provincial Treasurer Of Benguet And Hon. Imelda I. Macanes
In Her Capacity As Provincial Treasurer Of La Trinidad, Province Of Benguet
Civil Case No. 08‐CV‐2414
RTC Branch 10, La Trinidad, Benguet
March 7, 2008
On October 11, 2007, the Provincial Treasurer of Benguet issued a franchise tax assessment against LHC,
requiring LHC to pay franchise tax for the years 2002 to 2007 in the approximate amount of P40.40 mn,
inclusive of surcharges and penalties. LHC filed a protest letter with the Provincial Treasurer in December
2007 on the ground that LHC is not a grantee of any legislative franchise on which basis franchise taxes
may be imposed. On February 8, 2008, the Provincial Treasurer, through the Provincial Legal Officer,
denied LHC’s protest letter. On March 7, 2008, LHC filed before the Regional Trial Court (RTC) of
Benguet a petition against the Provincial Treasurer of Benguet for the annulment of the franchise tax
assessment.
LHC filed its Memorandum on January 10, 2012. The Province of Benguet filed its Memorandum on
January 17, 2012. The case is deemed submitted for decision.

Hedcor Inc. vs. The Province of Benguet, The Provincial Treasurer of Benguet and Hon. Imelda I.
Macanes in her Capacity as Provincial Treasurer
Civil Case No. 08‐ CV‐2398
RTC Br. 63, La Trinidad, Benguet
January 4, 2008
On October 22, 2007, Hedcor received a franchise tax assessment from the Provincial Treasurer of the
Province of Benguet requiring Hedcor to pay the unpaid franchise taxes of HEDC and Cleanergy
(formerly, Northern Mini Hydro Corporation) in the approximate amount of P30.9 mn, inclusive of
surcharges and penalties, for the fourth quarter of 1995 up to 2007. Hedcor filed a protest letter on the
basis that HEDC and Cleanergy are not required to pay franchise taxes. Hedcor’s protest letter was
denied by the Provincial Treasurer in a letter dated November 27, 2007.
Pursuant to Section 195 of the Local Government Code of 1991, Hedcor filed a petition last January 4,
2008 against the Provincial Treasurer before the RTC to annul the assessment of the franchise tax. On
February 18, 2008, the Province of Benguet filed its answer to the petition, insisting on the liability of
Hedcor, and relying on the Articles of Incorporation of Hedcor to substantiate its allegation that Hedcor
possesses both a primary and secondary franchises. Hedcor is of the opinion that it is not liable for
franchise tax since it does not need a national franchise to operate its business, pursuant to Section 6 of
the EPIRA. Moreover, Hedcor argues that it is a separate and distinct legal entity from HEDC and
Cleanergy, and as such, it cannot be made liable for whatever obligation, if any, as may pertain to HEDC
and/or Cleanergy.
With the completion of the trial and formal offer of evidences of the parties, this case is now pending
resolution.
Hedcor Inc. vs. The Province of Benquet, The Provincial Treasurer of Benquet and Hon. Imelda I.
Macanes in her Capacity as Provincial Treasurer
Civil Case No. 08‐CV‐2416
RTC Br. 63. La Trinidad, Benquet
December 21, 2007
On October 25, 2007, Hedcor received from the Provincial Treasurer of Benguet an assessment in the
amount of P30.5 mn representing the share of the Province and host municipalities and barangays in the
national wealth tax due from HEDC and Cleanergy for the years 1997 to 2007. On December 21, 2007,
Hedcor filed its protest letter with the Provincial Treasurer of Benguet stating that it is a separate and
distinct legal entity from HEDC and Cleanergy. Hedcor only acquired the hydroelectric power plants,
which are the subject of the assessed national wealth tax, from HEDC and Cleanergy on June 25, 2005.
Prior to June 25, 2005, Hedcor did not own any operating hydroelectric power plants. Thus, if Hedcor is
indeed liable for any national wealth tax with respect to the operation of the hydroelectric power plants,
it is liable only for taxes after June 25, 2005.
In addition, Hedcor is of the opinion that the Province of Benguet does not have legal basis to collect
national wealth tax from private generation companies prior to the effectivity of EPIRA in June 2001.

Since June 2005, Hedcor has been contributing the amount equivalent to 3% of its gross revenues to its
host municipalities and barangays in compliance with the national wealth tax provision contained in
Section 291 of the Local Government Code of 1991. Hedcor has been generously paying amounts higher
than the amount required by the Local Government Code.
The Province of Benguet, through the Office of the Governor, and Hedcor, have been engaged in
negotiations to arrive at a possible settlement for the national wealth tax case, subject of Memorandum
of Agreement for signing of Hedcor, HEDC, Cleanergy, and the Province of Benguet.
On April 25, 2011 Hedcor paid the National Wealth Tax assessment of the court as per Official Receipt
No. BGT‐2556264 in the amount of P8,605,647.68.
The case has been temporarily suspended until the filing of the signed memorandum of agreement with
the court and the submission of a Joint Motion to Dismiss.
Mactan Electric Co. vs. Acoland, Inc. Civil Case No. MDI‐56
RTC Branch 56, Mandaue City
June 16, 1996
On July 16, 1996, MECO filed a quo warranto case against AboitizLand attacking the latter’s legal basis to
distribute power within the MEPZ II as well as the Philippine Economic Zone Authority’s (PEZA) authority
to grant Aboitizland the operation or distribution of power in the area in question. MECO argues that
AboitizLand does not possess the legal requirements to distribute power within MEPZ II, and that the
amendment of AboitizLand’s Articles of Incorporation to include the right to engage in the operation,
installation, construction and/or maintenance of electric and other public utilities only six days after the
filing of this case was an afterthought, and as a consequence, it is liable to pay damages to MECO.
MECO further alleges that PEZA has no right to grant franchise to distribute electricity within the MEPZ
II.
AboitizLand’s argument that the Special Economic Zone Act of 1995 (R.A. 7916) which created PEZA
grants the latter broad powers and functions to manage and operate special economic zones, that these
include the power to grant enfranchising powers under Section 12(c) and 13(d) thereof, and that the SEC
approval of its amended Articles of Incorporation is valid. Regarding damages, AboitizLand argues this
was not prayed for in MECO’s petition for quo warranto and the courts have no basis to grant any
damages.
The PEZA intervened and argued that, it is authorized by its charter to undertake and regulate the
establishment and maintenance of utilities including light and power within economic zones under its
jurisdiction. In doing so, it can directly construct, acquire, own, lease, operate, and maintain on its own or
through contract, franchise, license, bulk purchase from the private sector, and build‐operate‐transfer
scheme or joint venture, adequate facilities such as light and power.
The parties are currently undergoing court‐mandated mediation proceedings.

In 2007, with the approval of PEZA, AboitizLand transferred all of its power assets and business to a new
corporation, MEZ, which is now the real party in interest in the case.
The parties to the case are currently trying to settle the case amicably. In view of this, the trial has been
suspended until August 20,2012.
In The Matter Of The Assessed Real Property Tax On Machineries Located Within The Municipality
of Bakun, Province of Benguet
Central Board of Assessment Appeals
CBAA Case No. L‐57 and L‐59
The Municipality of Bakun, Province of Benguet issued an assessment against LHC for deficiency real
property tax on its machineries in the amount of approximately P11.0 mn, inclusive of interests and
penalties, for the period 2002. LHC appealed the assessment to the LBAA. NPC intervened in the
proceedings before the LBAA arguing that (i) the liability for the payment of real property tax over the
machineries is assumed by NPC under Section 8.6(b) under the Bakun PPA dated as of November 24,
1996; and (ii) NPC is exempted from the payment of real property tax under Section 234 of the Local
Government Code, which provides that machineries that are actually, directly and exclusively used by
government‐owned and controlled corporations engaged in the generation and transmission of electric
power are not subject to the real property tax. The LBAA ruled in favor of the Municipality of Bakun on
the ground that NPC could not invoke the exception under Section 234 of the Local Government Code
because the machineries covered by the assessment are not yet owned by NPC.
NPC further appealed the ruling of the LBAA to the Central Board of Assessment Appeals (CBAA)
docketed as CBAA Case No. L‐57/59. According to the CBAA, NPC sent a compromise proposal in 2006
to the CBAA. The Province of Benguet, through the Office of the Governor, and LHC, engaged in
negotiations to arrive at a possible settlement. On December 2009, NPC moved for the issuance of a
decision based on a compromise agreement. Benguet opposed NPC’s motion and prayed that CBAA
continue hearing the case and resolve the same on the merits. LHC filed its reply to Benguet’s
opposition. As of March 30, 2012, the parties are awaiting further action by the CBAA.
Annual Report 2010
Luzon Hydro Corporation and the National Power Corporation vs. The Local Board of Assessment
Appeals of the Province of Ilocos Sur, Fatima Tenorio, in her official capacity as the Provincial
Assessor of the Province of Ilocos Sur, Antonio A. Gundran, in his capacity as the Provincial
Treasurer of the Province of Ilocos Sur Central Board of Assessment Appeals, Manila
CBAA Case Nos. L‐96 and L‐99
On July 2, 2003, the Municipal Assessor of Alilem sent LHC two notices of assessment of real property.
The first notice required LHC to pay real property taxes in the amount of P4.3 mn, for the 4th quarter of
2002, while the second notice required LHC to pay P17.2 mn for 2003. The notices of assessment also
contained an additional imposition of 40% of the acquisition cost, which allegedly represented
installation costs, and a further imposition of 15%, which allegedly represented freight costs.

LHC filed a Protest before the LBAA which ruled against LHC by upholding the notices of assessment.
LHC appealed directly to the CBAA, where the trial of the case is ongoing. The next hearing is set on
April 27, 2012.
SN Aboitiz Power‐Magat, Inc. vs. The Municipality of Alfonso Lista, Hon. Charles L. Cattiling,
in his capacity as Mayor of the Municipality of Alfonso Lista, and Estrella S. Aliguyon, in her
capacity as Treasurer of the Municipality of Alfonso Lista
RTC Alfonso Lista, Ifugao, Branch 15
Special Civil Action No. 17‐09
March 6, 2009
On July 12, 2007, SNAP‐Magat was issued by the Board of Investments (BOI) Certificate of Registration
No. 2007‐188 classifying SNAP‐Magat’s operation of the Magat Power Plant as a pioneer enterprise.
Pursuant to Section 133(g) of the Local Government Code, SNAP‐Magat is exempt from local business
taxes for a period of six years from the date of registration with the BOI. However, the Municipality of
Alfonso Lista (Alfonso Lista) refused to recognize such exemption and insists on assessing and collecting
local business taxes from SNAP‐Magat.
In March 2009, SNAP‐Magat filed a Complaint for Injunction with the RTC of Alfonso Lista, Ifugao
against the Municipality of Alfonso Lista, its Mayor, and Treasurer. The Complaint prayed that the
defendants and all persons acting under their direction or authority be prevented from: (i) assessing and
collecting local business taxes from SNAP‐Magat; (ii) refusing to issue a Mayor’s Permit to SNAP‐Magat
for non‐payment of local business taxes; and (iii) distraining and levying on SNAP‐Magat’s properties,
closing the Magat Power Plant, and committing any other act against SNAP‐Magat that obstructs or
delays its operations in connection with its non‐payment of local business taxes. The complaint also
prays for the issuance of a temporary restraining order and writ of preliminary injunction. The RTC
denied SNAP‐Magat’s application for a temporary restraining order.
SNAP‐Magat filed a Petition for Certiorari with the Court of Appeals for the issuance of temporary
restraining order and/ or writ of preliminary injunction being sought from the RTC and for the
nullification of the RTC order. The Court of Appeals granted SNAP‐Magat’s Petition for Certiorari and
made permanent the temporary restraining order it initially issued.
Due to the on‐going negotiations between both parties, the court suspended all scheduled hearings to
give the parties ample time to submit a compromise agreement. The compromise agreement has been
signed by the parties and submitted to the court for approval on May 12, 2011 hearing.
During the September 20, 2011 hearing, the Joint Motion for Judgment based on Compromise
Agreement was deemed submitted for resolution, subject to the determination by the court on whether
to require a BOI representative to testify on the regularity of the issuance or the validity of SNAP‐Magat’s
BOI Certificate of Registration.

SNAP‐Magat filed for compliance, a copy of the judgment rendered on the Compromise Agreement on
October 20, 2011.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year
covered by this report.
PART II ‐ OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Issuer’s Common Equity and Related Stockholder Matters
(1) AboitizPower’s common shares are traded on the PSE.
The high and low stock prices of AboitizPower’s common shares for each quarter of 2009 to 2012 were as
follows:
2012 2011 2010 2009

High Low High Low High Low High Low
First Quarter 31.90 28.75 31.60 26.20 12.75 8.60 4.65 3.90
Second Quarter NA NA 32.10 28.00 19.25 12.25 6.00 4.65
Third Quarter NA NA 32.60 27.00 21.80 18.00 6.70 5.30
Fourth Quarter NA NA 30.10 28.50 35.80 20.90 8.90 6.40
As of March 30, 2012, AboitizPower has 532 stockholders of record, including PCD Nominee Corporation
(Filipino) and PCD Nominee Corporation (Foreign). Common shares outstanding as of same date were
7,358,604,307 shares. The closing price of AboitizPower common shares as of March 30, 2012 is P33.90
per share.
(2) The top 20 stockholders of AboitizPower as of March 30, 2012 are as follows:
Name Number of Shares Percentage

1. ABOITIZ EQUITY VENTURES, INC. 5,653,763,954 76.83%
2. PCD NOMINEE CORPORATION (Filipino) 768,959,590 10.44%
3. PCD NOMINEE CORPORATION (Foreign) 595,024,478 8.09%
4. ABOITIZ & COMPANY, INC. 151,112,722 2.05%
5. BAUHINIA MANAGEMENT, INC. 9,845,000 0.13%
6. SAN FERNANDO ELECTRIC LIGHT AND POWER CO., INC. 7,931,034 0.11%
7. UNIONBANK TISG AS INVESTMENT MANAGER FOR IMA #4B1‐166‐10 7,880,769 0.11%
8. PARRAZ DEVELOPMENT CORPORATION 7,827,522 0.11 %
9. KAYILKA HOLDINGS, INC. 7,783,834 0.11 %
10. SABIN M. ABOITIZ 6,050,985 0.08%
11. RAMON ABOITIZ FOUNDATION, INC. 3,900,000 0.05%
12. IKER M. ABOITIZ 3,177,545 0.04%
13. HAWK VIEW CAPITAL, INC. 2,905,000 0.04%
PORTOLA INVESTORS, INC. 2,905,000 0.04%
14. TRA MANAGEMENT & DEVELOPMENT CORPORATION 2,561,882 0.03%
15. TRIS MANAGEMENT CORPORATION 2,490,091 0.03%
16. UBP T/A 4B1‐153‐09 2,484,698 0.03%
17. GITANA MANAGEMENT & DEVELOPMENT CORPORATION 2,465,591 0.03%

TINKERBELL MANAGEMENT CORPORATION 2,465,591 0.03%
18. CAL MANAGEMENT CORPORATION 2,465,590 0.03%
19. NUSKI MANAGEMENT CORPORATION 2,387,492 0.03%
20. LMM HOMES MANAGEMENT & DEVELOPMENT CORP. 2,376,335 0.03 %
(3) The cash dividends declared by AboitizPower to common stockholders from 2010 to 2012 are shown
in the table below:
Year Cash Dividend Per Share Total Declared Record Date
2012 P1.32 P9.71 bn 3/16/2012
2011 P1.32 P9.71 bn 3/17/2011
2010 P 0.30 P2.21 bn 3/24/2010
AboitizPower intends to maintain an annual cash dividend payment ratio of approximately one‐third of
its consolidated net income from the preceding fiscal year, subject to the requirements of the applicable
laws and regulations and the absence of circumstances which may restrict the payment of cash
dividends, such as the undertaking by AboitizPower of major projects and developments requiring
substantial cash expenditures or restrictions on cash dividend payments under its loan covenants.
(4) Recent Sales of Unregistered or Exempt Securities including Recent Issuance of Securities
Constituting and Exempt Transaction
(a) On December 18, 2008, AboitizPower availed a total of P3.89 bn under a Notes Facility
Agreement dated December 15, 2008 with BDO Capital & Investment Corporation, BPI
Capital Corporation, First Metro Investment Corporation, ING Bank N.V., Manila Branch as
Joint Lead Managers. The Notes Facility Agreement provided for the issuance of 5‐year and
7‐year peso denominated corporate notes in a private placement to not more than 19
institutional investors pursuant to Section 9.2 of the Securities Regulation Code (SRC) and
Rule 9.2(2)(B) of the SRC Rules. The 5‐year corporate notes for P3.330 bn issued last
December 18, 2008 was pre‐terminated and paid on December 19, 2011.
The 7‐year peso denominated corporate notes were issued to the following institutional investors:
NOTEHOLDERS (7‐Year Notes) AMOUNT DUE

BDO PRIVATE BANK INC. WEALTH ADVISORY AND TRUST GROUP 19,400,000.00
BDO TRUST AND INVESTMENT GROUP 19,400,000.00
FIRST GUARANTEE LIFE ASSURANCE COMPANY, INC. 19,400,000.00
THE INSULAR LIFE ASSURANCE COMPANY, LTD. 485,000,000.00
TOTAL PRINCIPAL DUE 543,200,000.00
The total underwriting fees paid to the Joint Lead Managers for the issuance of the P3.89 bn corporate
notes was P18.82 mn.

(b) On September 28, 2009, AboitizPower issued 5‐year peso‐denominated corporate fixed rate
notes in the aggregate amount of P5 bn to a consortium of primary institutional lenders in a
private placement made in accordance with Section 9.2 of the Securities Regulation Code (SRC)
and Rule 9.2(2)(B) of the SRC Rules. The issuance of the P5 bn corporate notes was made
pursuant to a Notes Facility Agreement with First Metro Investment Corporation as Issue
Manager.
The corporate notes were issued to the following institutional investors:
NOTEHOLDERS (5‐Year Notes) AMOUNT DUE

METROPOLITAN BANK & TRUST GROUP 1,500,000,000.00
BDO PRIVATE BANK WEALTH ADVISORY & TRUST GROUP 1,058,000,000.00
THE INSULAR LIFE ASSURANCE CO., LTD. 700,000,000.00
PHILIPPINE SAVINGS BANK 500,000,000.00
UNITED COCONUT PLANTERS BANK 100,000,000.00
METROBANK TRUST BANKING GROUP AS INVESTMENT MANAGER FOR DE LA 100,000,000.00
SALLE UNIVERSITY
METROBANK TRUST BANKING GROUP AS INVESTMENT MANAGER FOR 60,000,000.00
LASALLIAN EDUC INNOVATORS FOUNDATION, INC. (ST. BENILDE)
SALLE SANTIAGO ZOBEL, INC.
METROBANK TRUST BANKING GROUP AS INVESTMENT MANAGER FOR HERMANO 15,000,000.00
SAN MIGUEL FEBRES CORDERO MEDICAL EDUCATION FOUNDATION (DE LA
SALLE HEALTH SCIENCES CAMPUS)
METROBANK TRUST BANKING GROUP AS INVESTMENT MANAGER FOR C‐13‐09 50,000,000.00
SOCIAL SECURITY SYSTEM 50,000,000.00
SOCIAL SECURITY SYSTEM PROVIDENT FUND 100,000,000.00
DEUTSCHE BANK AG MANILA BRANCH TRUST DEPARTMENT FOR VARIOUS TRUST 128,000,000.00
ACCOUNTS (TAX‐EXEMPT)
ACCOUNTS (TAXABLE)
UCPB TRUST BANKING GROUP 100,000,000.00
PIONEER LIFE, INC. 50,000,000.00
FIRST LIFE FINANCIAL COMPANY, INC. 10,000,000.00
TOTAL PRINCIPAL DUE 5,000,000,000.00
The total underwriting fees paid to the Issue Manager for the issuance of the P5 bn corporate notes was
P24.19 mn.
(c) On April 14, 2011, AboitizPower issued a 5‐year peso denominated corporate fixed rate notes in
the aggregate amount of P5 bn to a consortium of primary institutional lenders in a private
placement in accordance with Section 9.2 of the SRC and Rule 9.2(2)(B) of the SRC Rules. The
issuance of the P5 bn corporate notes was made pursuant to a Notes Facility Agreement with
First Metro Investment Corporation as Issue Manager.

The 5‐year peso denominated corporate notes were issued to the following institutional investors:
NOTEHOLDERS AMOUNT DUE

BDO PRIVATE BANK INC. WEALTH ADVISORY & TRUST GROUP 960,000,000.00
METROPOLITAN BANK & TRUST COMPANY – TRUST BANKING GROUP AS 800,000,000.00
TRUSTEE
FIRST METRO INVESTMENT CORPORATION 500,000,000.00
METROPOLITAN BANK & TRUST COMPANY 500,000,000.00
BPI ASSET MANAGEMENT & TRUST GROUP AS TRUSTEE 410,000,000.00
ALFM PESO BOND FUND, INC. REPRESENTED BY BPI INVESTMENT MANAGEMENT, 40,000,000.00
INC. AS FUND MANAGER
BANCO DE ORO UNIBANK, INC. – TRUST & INVESTMENTS GROUP AS TRUSTEE 400,000,000.00
PHILIPPINE SAVINGS BANK 320,000,000.00
RIZAL COMMERCIAL BANKING CORPORATION 220,000,000.00
CHINA BANKING CORPORATION – TRUST GROUP AS TRUSTEE 215,000,000.00
ALLIED BANKING CORPORATION 200,000,000.00
SALLE SANTIAGO ZOBEL, INC.
METROBANK TRUST BANKING GROUP AS INVESTMENT MANAGER FOR HERMANO 15,000,000.00
SAN MIGUEL FEBRES CORDERO MEDICAL EDUCATION FOUNDATION (DE LA
SALLE HEALTH SCIENCES CAMPUS)
SOCIAL SECURITY SYSTEM 50,000,000.00
SOCIAL SECURITY SYSTEM PROVIDENT FUND 100,000,000.00
ACCOUNTS (TAX‐EXEMPT)
ACCOUNTS (TAXABLE)
UCPB TRUST BANKING GROUP 100,000,000.00
PIONEER LIFE, INC. 50,000,000.00
FIRST LIFE FINANCIAL COMPANY, INC. 10,000,000.00
TOTAL PRINCIPAL DUE 5,000,000,000.00
Item 6. Management’s Discussion and Analysis or Plan of Action
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
Year Ended December 31, 2011 vs. Year Ended December 31, 2010
The following is a discussion and analysis of the Company’s consolidated financial condition and results
of operations and certain trends, risks and uncertainties that may affect its business. The criticial
accounting policies section discloses certain accounting policies and management judgments that are
material to the Company’s results of operations and financial condition for the periods presented in this
report. The discussion and analysis of the Company’s results of operations is presented in three
comparative sections: the year ended December 31, 2011 compared with the year ended December 31,

2010, the year ended December 31, 2010 compared with the year ended December 31, 2009 and the year
ended December 31, 2009 compared with the year ended December 31, 2008.
The following discussion and analysis of the Company’s consolidated financial condition and results of
operations should be read in conjunction with the consolidated financial statements and the notes
thereto as well as the accompanying schedules and disclosures set forth elsewhere in this report.
Top Five Key Performance Indicators
Management uses the following indicators to evaluate the performance of registrant Aboitiz Power
Corporation and its subsidiaries (the Company and its subsidiaries are hereinafter collectively referred to
as the “Group”):
1. Share in Net Earnings of Associates. Share in net earnings (losses) of associates represents
the Group’s share in the undistributed earnings or losses of its investees for each reporting
period subsequent to acquisition of said investment, net of goodwill impairment cost, if any.
Goodwill is the difference between the purchase price of an investment and the investor’s
share in the value of the net identifiable assets of the investee at the date of acquisition.
Share in Net Earnings of Associates indicates profitability of the investment and investees’
contribution to the group’s net income.
Manner of Computation: Associate’s Net Income (Loss) x Investor’s % ownership ‐ Goodwill

Impairment Cost
2. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA). The Company
computes EBITDA as earnings before extra‐ordinary items, net finance expense, income tax
provision, depreciation and amortization. It provides management and investors with a tool
for determining the ability of the Group to generate cash from operations to cover financial
charges and income taxes. It is also a measure to evaluate the Group’s ability to service its
debts.
3. Cash Flow Generated. Using the Statement of Cash Flows, management determines the
sources and usage of funds for the period and analyzes how the Group manages its profit
and uses its internal and external sources of capital. This aids management in identifying
the impact on cash flow when the Group’s activities are in a state of growth or decline, and
in evaluating management’s efforts to control the impact.
4. Current Ratio. Current ratio is a measurement of liquidity, calculated by dividing total

current assets by total current liabilities. It is an indicator of the Group’s short‐term debt
paying ability. The higher the ratio, the more liquid the Group.
5. Debt–to–Equity Ratio. Debt‐to‐Equity ratio gives an indication of how leveraged the Group
is. It compares assets provided by creditors to assets provided by shareholders. It is
determined by dividing total debt by stockholders’ equity.

Year ended December 31, 2011 vs. Year ended December 31, 2010
Key Performance Indicators 2011 2010
Amounts in thousands of πs, except for financial ratios
SHARE IN NET EARNINGS OF ASSOCIATES 8,436,906 4,625,883
EBITDA 32,845,838 34,361,919
CASH FLOW GENERATED:

Net cash flows from operating activities 22,642,117 26,865,378
Net cash flows (used in) investing activities (4,979,319) (3,958,240)
Net cash flows (used in) financing activities (12,575,210) (8,358,116)
Net Increase in Cash & Cash Equivalents 5,087,588 14,549,022
Cash & Cash Equivalents, Beginning 18,301,845 3,814,906
Cash & Cash Equivalents, End 23,391,561 18,301,845
CURRENT RATIO 3.46 2.58
DEBT‐TO‐EQUITY RATIO 1.19 1.33
The Company’s Share in net earnings of associates for the year rose significantly as compared to last
year. The increase can be attributed to the contributions from the following associates:
• SN Aboitiz Power‐Magat, Inc.’s (SNAP‐Magat) increased acceptance of its nominated

capacities to the National Grid Corporation of the Philippines (NGCP), SNAP‐Magat led to
the significant jump in its ancillary revenues during the year.
• STEAG State Power Inc. (STEAG), the operator of a 232‐megawatt (MW) coal plant in
Misamis Oriental, higher revenues coming from the effects of an increase in a major index in
its pricing formula. STEAG also booked a non‐recurring gain on collections of prior years’
cost reimbursements from the National Power Corporation (NPC) relating to its fuel
importation.
• Cebu Energy Development Corporation’s (Cebu Energy) fresh earnings contributions

following the start of the commercial operations of its 246 MW Coal Plant in Toledo, Cebu
last February 2011.
• Visayan Electric Company, Inc.’s (VECO), higher earnings contribution from higher margins
as a result of the implementation of its approved distribution tariff under the Performance
Based Regulation (PBR) scheme.

Current ratio improved from 2.58:1 in 2010 * to 3.46:1 in 2011 * due to the significant upsurge in current
assets coupled with a decrease in current liabilities versus 2010 yearend levels. The growth in cash, trade
and other receivables, and other current assets account for the increase in current assets.
Debt to equity ratio also improved from 1.33:1 as of December 31, 2010 to 1.19:1 as of December 31, 2011.
This is mainly due to the buildup of equity which exceeds the increase in liabilities.
Results of Operations
The Company posted a consolidated net income of π21.61 bn, 14% lower than the P 25.04 bn realized in
the prior year. This year’s results translate to an earnings per share of P2.94.
After adjusting for non‐recurring items, the Company’s core net income for 2011 amounted to P21.10 bn,
14% lower than that of the previous year. Core net income for the year was arrived at after adjusting for
the effects of the revaluation of consolidated dollar denominated loans and placements which led to a
P164 mn non‐recurring loss. The Company also recognized P663 mn in one off‐gains relating to (1) the
revenue adjustments at a wholly owned subsidiary resulting from a favorable ruling by the industry
regulator on its tariff structure for an ancillary services contract; (2) the reversal of the 2010 accrued
expenses relating to an IPPA contract at a subsidiary; (3) cost reimbursements relating to fuel
importation realized by one of the Company’s associates; and (4) non‐recurring fees that were expensed
by the Company relating to a prepayment of an outstanding loan in the last quarter of the year.
Power Generation
The Generation Companies continue to be a dependable contributor to the earnings of the Company
accounting for 89% of the Company’s earnings. This year the Generation Companies contributed P20.4
bn, a 16% decline from last year’s contribution of P24.39 bn.
The Generation Companies’ lower contributions can be attributed to both demand and supply factors.
Demand for electricity remained relatively flat during the year, while on the supply side, there was a
significant reduction of plant outages in 2011 for the Luzon based power plants. Both these factors led to
a softening of spot market prices which translated to lower average selling prices for the group resulting
in the drop by 7% as compared to previous years. Volume sold also declined by 3% as compared to last
year’s sales. Net generation for the year was 9,422 GWh versus 9,762 GWh in 2010. As a result of low
prices that prevailed in the WESM, lower spot market transactions were made during the year.
Therma Luzon Inc. (TLI), the IPP administrator of the Pagbilao coal‐fired power plant, experienced a
margin squeeze as fuel costs increased. The increase in coal prices during the period affected TLI as
majority of its bilateral contracts are currently pegged to NPC Time‐of‐Use rates which does not allow for
a full pass through of its fuel costs.
For the period under review, ancillary service revenues of SNAP‐Magat and SNAP‐Benguet went up by
81% over last year. Higher water levels enhanced the plants’ capability to provide ancillary services, and
higher level of acceptance of nominated capacities by NGCP. The significant contribution, particularly of

SNAP‐Magat, cushioned the impact of the decline for the Power Generation group resulting from selling
price and volume variances.
Further mitigating the lower earnings are as follows: (1) higher contributions from Therma Marine Inc.
(TMI) resulting from tariff adjustments approved by the Energy Regulatory Commission (ERC) in the
early part of this year, (2) the full year contributions from Hedcor Sibulan, (3) the earnings from Cebu
Energy upon full commercial operations, and (4) the robust contribution from STEAG due to higher
margins over coal and costs recoveries on its fuel importations.
Power Distribution
The Distribution Utilities contributed P2.41 bn from a prior year contribution of P1.93 bn. The Distriution
Utilities’ 25% increase in income contribution came as a result of higher electricity sales and average
gross margins. Total attributable electricity sales grew by 3% from 3,606 GWh to 3,727 GWh, mostly from
growth coming from its industrial segment. Average gross margins meanwhile went up by 15% to P1.44
per kWh resulting from the implementation of the approved distribution tariffs of some of the
Company’s Distribution Utilities under the Performance Based Regulation. Davao Light also had higher
contributions this year due to a significant reduction in its operating costs. The higher availability of
power supply to its franchise area did not require Davao Light to run its back up power plant leading, to a
decrease in plant related expenses.
Material Changes in Line Items of Registrant’s Statements of Income and Comprehensive Income
Consolidated Statements of Income
Consolidated net income attributable to equity holders of the Parent decreased by 14% from P25.04
bn in 2010 to P21.61 bn in 2011. The various movements in the revenue and expense items are
shown below to account for the decrease:
Consolidated Net Income Attributable to Equity Holders of the Parent for 2010 P25,041,116
Decrease in Operating Revenues (5,075,821)
Increase in Operating Expenses (800,344)
Increase in Share in Net Earnings of Associates 3,811,023
Increase in Interest Income 637,363
Increase in Interest Expense (667,282)
Increase in Other Income (907,550)
Higher Provision for Income Taxes (196,512)
Increase in Net Income Attributable to Non‐controlling Interests (233,740)
Total (3,199,123)
Operating Revenues
(9% decrease from P59.55 bn to P54.48 bn)

TLI’s revenues declined by 22% to P4.83 bn. This is mainly due to a decrease in its average selling prices
which went down by 18% YoY as a result of the lower WESM prices during the year, as well as a 4%
decline in volume sold.
AP Renewables, Inc. (APRI) likewise experienced a drop in its revenues by 10% to P1.66 bn. Average
selling prices went down by 5%, while volume sold decreased by the same percentage compared to prior
year.
The decrease enumerated above was partly tempered by the P633 mn in fresh revenues from newly
consolidated subsidiary Luzon Hydro Corp. (LHC), as well as from higher revenues from Distribution
Utilities.
Operating Expenses
The 2% increase in Operating Expenses mainly came from higher cost of generated power as fuel costs
increased particularly for TLI, a coal‐fired power plant.
Share in Net Earnings of Associates

(82% increase from P4.63 bn to P8.44 bn)
The combined contributions of SNAP‐Magat and SNAP‐Benguet rose by 81% compared to last year’s
contributions, driven by higher revenues arising from increased acceptance ancillary service nominations.
The biggest slice of the contribution came from SNAP‐Magat which managed to double its earnings
contributions from prior years.
Higher coal margins and a non recurring fuel cost reimbursement allowed STEAG to increase its
contributions to its share in net earnings.
Higher margins from improved tariffs under the Performance Based Regulation (PBR) scheme as
approved by the ERC allowed VECO to post higher earnings contributions for the year.
Rounding up the net earnings from associates are the fresh income contributions of Cebu Energy, which
started full commercial operations in February of 2011.
Interest Income
(284% increase from P224 mn to P862 mn)
During the year, the average cash balances held by the Company, as well as at its subsidiaries, were
higher than the average balances carried during most of 2010. The robust cash position resulted in the
increase in Interest Income recognized for the period in review.
Interest Expense
(10% increase from P6.68 bn to P7.35 bn)

Over half of the increase in Interest Expense is due to higher accreted interest on the finance lease
obligation of TLI.
The remaining increase is due to higher interest expenses for the Company in 2011 as it managed to raise
P5 bn in fixed rate notes in the first half of the year.
Other Income
(57% decrease from P1.60 bn to P693 mn)
The large swing in Other Income by P907 mn is mainly due to an unrealized foreign exchange (FX) loss of
P164 mn in 2011 as compared to the P1.01 bn unrealized FX gains last year. The significant decrease in
unrealized FX gains was the result of the restatement of the dollar‐denominated portion of TLI ‘s finance
lease. TLI recorded a large FX gain due to a higher peso appreciation.
Net Income Attributable to Non‐controlling Interests
The 558% increase in Net Income Attributable to Non‐controlling Interests was largely due to the
increase in Abovant Holdings, Inc.’s (AHI) earnings for the period of which 40% is for the account of the
minority shareholders. AHI’s associate, Cebu Energy started its full commercial operations in 2011. The
balance of the increase is due to the recognition by the Company of the 40% minority shareholder’s
participation in Cebu Private Power Corporation’s increase in net income.
Consolidated Statements of Comprehensive Income
Consolidated Comprehensive Income Attributable to Equity Holders of the Parent declined 16% YoY,
from P25.06 bn to P20.94 bn. This was mainly due to the decline in the consolidated net income for the
period under review.
Changes in Registrant’s Resources, Liabilities and Shareholders’ Equity
Assets
Total assets as of December 31, 2011 in the amount of P153.53 bn increased by 14% versus total assets as
of December 31, 2010 of P134.56 bn. The major changes in the balance sheet accounts are discussed
below:
a) Cash and Cash Equivalents increased by 28% (from P18.30 bn ending December 2010 to
P23.39 bn ending December 2011). The robust cash flows from operations of TLI and ARI
resulted to large cash balances held at both companies at year end. The Company also
consolidates for the first time, the cash held by newly consolidated company LHC. These
increases mitigated the decline in cash at Parent level following the prepayment of the
P3.33 bn fixed rate notes prior to year end.

b) Trade and Other Receivables increased by 40% (from P6.81 bn as of December 31, 2010 to
P9.51 bn as of December 31, 2011). This is due to the P2.5 bn in dividends receivable from
one of the Company’s associates. The remaining increase is attributable to higher Trade
Receivables at TMI as it awaits the collection of receivables arising from its tariff
adjustments and the recognition of the Trade Receivables of newly consolidated LHC.
c) The 18% (P328 mn) increase in Inventories is primarily due to higher cost of fuel inventories
at TLI and TMI, as global fuel prices increased during the year.
d) Other Current Assets increased by 15% (from P959 mn in December 31, 2010 to P1.11 bn in
December 31, 2011) mainly due to build‐up of input VAT by power generation subsidiaries
during the period in review.
e) The 6% increase in Property, Plant and Equipment is mostly due to the recent acquisition by
Therma Mobile of four barge‐mounted floating power plants in May 2011. APRI’s cost of
plant rehabilitation and the capital expenditures of the distribution group also accounted for
some of the increase. The increase is net of depreciation expense booked during the period
under review.
f) As a result of the consolidation of the accounts of the newly qualified subsidiary, LHC, the
Intangible Asset ‐ Service Concession Rights account went up by P3.22 bn. LHC’s power
plant is recorded as an intangible asset under IFRIC 12. The intangible asset is amortized
using the straightline method over 25 years, which is the service concession period, and
assessed for impairment whenever there is an indication of that the asset is impaired.
g) Deferred Income Tax Assets increased by P27 mn mainly due to the consolidation of the
deferred tax assets of newly qualified subsidiary, LHC.
h) Other Noncurrent Assets increased by 223% (from P1.23 bn as of December 31, 2010 to
P3.95 bn as of December 31, 2011) mainly due to the P2.24 bn advance payments made to
suppliers for the purchase of turbines and other related costs by Therma South, Inc.
Liabilities
Consolidated liabilities increased by 8% from P76.82 bn as of December 31, 2010 to P83.34 bn as of

December 31, 2011. The significant accounts contributing to the increase are as follows:
a) Bank Loans decreased (from P1.98 bn in December 31, 2010 to P1.61 bn in December
31,2011). During the year AP Parent paid its P1.29 bn short term bank loans. On the other
hand, the Company’s wholly owned subsidiary Hedcor and certain Distribution Utilities
availed of short term bank loans to meet their respective working capital requirements. All
of the above resulted to the 18% decrease in bank loans by year end.

b) Income Tax Payable increased by 21% (from P180 mn in December 31, 2010 to P143 mn in
December 31, 2011), mainly due to the higher current tax provision of the Group.
c) Payable to Preferred Shareholders of a Subsidiary inclusive of current portion decreased by

18% or P14 mn as payments to preferred shareholders were made during the year.
d) Long‐term Debt had a net increase of P2.10 bn resulting from the following financing
activities during the year.
• The Company’s issuance of P5 bn corporate fixed rate notes. The Company likewise
prepaid P3.33 bn in fixed rate corporate notes in the last quarter of the year.
• First time consolidation P521 mn of outstanding LHC long‐term debt.
• P565 mn new long‐term loan availed by Subic Enerzone Corporation net of the P119 mn
payment of an old debt.
The 13% increase in long‐term debt is net of timely amortization payments on existing
loans.
e) Finance Lease Obligations recognized at TLI, increased by 9% or P4.41 bn as accreted

interest expenses on the finance lease obligation exceeds the amount of monthly payments
made to PSALM.
f) The bulk of the P160 mn increase in Customer Deposits was mainly due to new connections
in the franchise area of Davao Light resulting from the growth in its customer base.
g) Deferred Income Tax Liability increased due to TLI’s recognition of corresponding income
tax provision on the unrealized FX gains on TLI’s dollar obligations to PSALM beyond its
income tax holiday period.
Equity
Equity attributable to equity holders of the Parent increased from P57.33 bn as of December 2010 to
P68.56 bn as December 31, 2011. This increase is mainly due to the increase in retained earnings by
P11.89 bn as a result of the consolidated net income recorded for the period under review of P21.61 bn
net of the dividend payment of P9.71 bn in April 5, 2011.

Material Changes in Liquidity and Cash Reserves of Registrant
Cash and cash equivalents grew by 28% from P18.30 bn as of December 31, 2010 to P23.39 bn as of
December 31, 2011.
Cash generated from the Group’s operations was the largest source of cash inflow bringing in P22.64 bn
during the year. This amount is lower by 16% when compared to the cash generated by operations in the
prior year as the Group recognized lower income before income tax during the year.
The cash used in the Group’s investing activities went primarily to investments in the acquisition,
purchase or construction of new assets which increased the Group’s property, plant and equipment
portfolio by P7.46 bn for the year. Advances were also made to a supplier for a major part on an on‐going
construction of a power plant. These outflows were partly mitigated by cash dividends received totaling
P3.98 bn.
There was a significant amount of cash used in financing activites as the Group paid P9.71 bn in dividends
during the year. Payments for long‐term debt totaling P4.21 bn were also made during the year, as well
as payments on the Finance Lease Obligation of P1.09 bn. Interest payments on existing obligations were
timely made and short term bank loans were likewise paid. The outflows for these financing activities
were cushioned by the availment of a long term debt resulting to a cash inflow of P5.52 bn.
The above activities resulted to an upward change in cash of P5.09 bn.
Financial Ratios
Current ratio improved from 2.58x in 2010 to 3.46x in 2011 due to the significant increase in current
assets coupled with a slight decrease in current liabilities versus 2010 year end levels. The significant
growth in cash, trade and other receivables, inventories and other current assets account for the increase
in current assets.
Debt to equity ratio also improved from 1.33 as of December 31, 2010 to 1.19 as of December 31, 2011.
This is mainly due to the buildup of equity which exceeded the increase in liabilities.
Outlook for the Upcoming Year/ Known Trends, Events, Uncertainties which may have Material
Impact on Registrant
Notwithstanding external and uncontrollable economic and business factors that affect its businesses,
AboitizPower believes that it is in a good position to benefit from the opportunities that may arise in
2012. Its sound financial condition, coupled with a number of industry and company specific
developments, should bode well for AboitizPower and its investee companies. These developments are
as follows:

Power
Generation Business
1. Continued growth in the Company’s attributable capacity
AboitizPower ended 2011 with a 15% YoY expansion in its total attributable generating capacity, from
2,051 MW to 2,350 MW. The capacity growth was mainly due to the following:
‐ Assumption of full ownership and control of LHC
In May 2011, AboitizPower’s 100% owned ARI assumed full ownership and control of LHC after
meeting all conditions set out in a Memorandum of Agreement with PHBI. PHBI, a wholly
owned subsidiary of Pacific Pty Ltd of Australia is the joint venture partner of ARI in LHC, which
owns and operates the 70 MW Bakun run‐of‐river hydropower plant in Ilocos Sur. As a result of
having full control and ownership in LHC, an additional 35 MW of attributable capacity was
added to AboitizPower’s portfolio of generation assets.
‐ Acquisition of the 242 MW Navotas Power Barges
In May 2011, Therma Mobile a wholly owned subsidiary of AboitizPower, acquired four barge‐
mounted floating power plants including their respective operating facilities from Duracom
Mobile Power Corporation and East Asia Diesel Power Corporation. Upon turnover,
rehabilitation works commenced with scheduled date of completion by the fourth quarter of
2011 for 123 MW and the balance estimated within 2012.
‐ Completion of the rehabilitation project of the Ambuklao Hydro Power Facility
In September 2011, SNAP‐Benguet was awarded by the ERC a COC for the operation of the
Ambuklao hydropower plant. The COC, which was approved on August 31, 2011, shall be
effective for a period of five years. Upon the turnover of the facility by the PSALM to SNAP‐
Benguet in 2008, rehabilitation works were implemented on the Ambuklao hydrowpower
facility. Its completion resulted to the increase in generation capacity, from 75 MW to 105 MW.
AboitizPower has an effective stake of 50% in this facility.
‐ Partial completion of the rehabilitation of the Binga Hydro Power Plant
Rehabilitation works on one of the units in the Binga hydropower facility was completed in the
fourth quarter of 2011. As a result, total capacity of the Binga hydropower plant increased by 5
MW, from 100 MW to 105 MW. AboitizPower has an effective stake of 50% in this facility.

‐ Completion of the 4 MW Irisan Hydro Power Greenfield project
AboitizPower’s wholly owned subsidiary Hedcor completed the construction of the 4 MW Irisan
hydropower plant in Tuba, Benguet. The plant was commissioned in September 2011.
Moving forward, AboitizPower’s attributable generation capacity is seen to further increase as the
following events take place:
‐ Completion of the rehabilitation of the Binga Hydro Power Plant
In 2011, AboitizPower, together with its partner SN Power, commenced the programmed
rehabilitation of the 100 MW Binga hydropower plant, which is consisted of four units with a
capacity of 25 MW each. To date, the program involves the rehabilitation of three units, given
the completion of the works done on the first unit in December 2011. Works on the second unit
have commenced and are expected to be completed in June 2012. Rehabilitation of the
remaining two units will commence thereafter. Full completion will result to Binga’s total
capacity reaching 120 MW, from the current 105 MW. AboitizPower has an effective stake of
50% in this facility.
‐ Completion of the rehabilitation of the Tiwi‐Makban Geothermal Power Facilities
100%‐owned APRI is currently undertaking the rehabilitation of several units of the Tiwi‐
Makban geothermal power plant complex. Works on the Tiwi facilities are targeted for
completion by the third quarter of 2012, while those for Makban are seen to be finished by first
quarter of 2013. Enhancements in the plants’ availability rate are expected following the
completion of the refurbishment, rehabilitation and resource improvements.
‐ Greenfield and Brownfield developments
600 MW Coal‐fired Power Plant in Subic. This is a project by RP Energy, a joint venture company
formed by AboitizPower’s wholly owned subsidiary TPI and TCIC. In June 2011, Meralco’s wholly
owned subsidiary, MPGC, announced its decision to acquire an ownership interest in the project.
On July 22, 2011, MPGC, TPI and TCIC signed a shareholder agreement under which MPGC took
a controlling interest in RP Energy, with TPI and TCIC owning the remaining stake equally. The
project involves the construction and operation of a 2x300 MW circulating‐fluidized‐bed coal‐
fired power plant in the Subic Bay Freeport Zone. In January 2012, RP Energy submitted to the
DENR an application to amend the existing ECC to cover two high‐efficiency 300‐MW units with
main steam reheat systems. Site preparation and the finalization of the EPC contract are
anticipated to take place in the second quarter of 2012. Completion of the first unit is targeted
by the second half of 2015, with the second unit to follow 6 months thereafter.
300 MW Coal‐fired Power Plant in Davao. AboitizPower, through 100%‐owned subsidiary TSI, is
planning to put up a 2x150 MW coal‐fired power plant in Davao, which is the biggest load center
in the island of Mindanao. TSI acquired the project site in August 2011. The DENR issued the

ECC for the project on September 9, 2011. The company is currently in the process of obtaining
all necessary permits and government clearances in addition to the ECC. Once done,
construction will commence immediately. The first generating unit (150 MW) is expected to be
completed 34 months after, with the second unit (150 MW) to follow in 3 months.
400 MW Coal‐fired Power Plant in Pagbilao, Quezon. On September 27, 2011, AboitizPower
signed a Memorandum of Understanding with Marubeni Corporation (Marubeni) to formalize
their intention to jointly develop, construct and operate a coal‐fired power plant with a capacity
of approximately 400 MW. The proposed location will be within the premises of the existing 700
MW Pagbilao Unit I and II Coal Fired Thermal Power Plant in Quezon. The terms and conditions
of the joint investment will be finalized in a definitive agreement to be agreed upon by the
parties. Marubeni is part‐owner of Team Energy Corporation, which owns and operates the
Pagbilao Power Plant under a build‐operate‐transfer contract with the NPC. On the other hand,
AboitizPower, through wholly owned subsidiary TLI, is the IPP of the Pagbilao Power Plant
under the IPP Administration Agreement with PSALM.
150 MW Coal‐fired Power Plant in Misamis Oriental. On June 28, 2010, AboitizPower and its
partners in STEAG Power, owner of the 232 MW coal plant located at the Phividec Industrial
Estate in Villanueva, Misamis Oriental, firmed up their collective intention to develop a third unit
of approximately 150 MW capacity adjacent to the existing facility. AboitizPower and its
partners agreed to maintain their shareholdings in the same proportions in the new corporation
to be established for the planned additional capacity. Certain essential facilities, such as the
jetty, coal handling facilities and stockyards and the 138‐kV interconnection with the Mindanao
Grid are to be shared with the existing facilities. Depending on the interest the market
demonstrates, the agreement contemplates the possibility of putting up another unit.
13.7 MW Tudaya 1 and 2 Hydro Power Plant Project. AboitizPower’s wholly owned subsidiary
Hedcor Tudaya will implement a Greenfield project involving the construction of run‐of‐river
power plants to be located in the upper and downstream sections of the existing Sibulan hydro
power plants, tapping the same water resource, which are the Sibulan and Baroring rivers. The
two plants will have a combined capacity of 13.7 MW. The project has been issued its ECC and
endorsed by the local communities. Hedcor Tudaya is currently working on obtaining the water
permits and awaiting finalization of its RE contract. Target groundbreaking is by May 2012.
Construction is estimated to be completed in 22 months.
13.2 MW Sabangan Hydro Power Plant Project. This involves the construction and operation of a
hydropower plant facility in Mt. Province, a province located in Northern Luzon. This project will
be undertaken by a wholly owned subsidiary of AboitizPower, Hedcor Sabangan. The project
was already granted an ECC by the DENR. Engineering and design are underway.
Groundbreaking is targeted in the fourth quarter of 2012, with completion expected after a 2‐
year construction period.
11.5 MW Hedcor Tamugan Hydro Power Plant Project. In 2010, wholly owned subsidiary, Hedcor
Tamugan, Inc. (Hedcor Tamugan), has reached an agreement with the Davao City Water District

on the use of the Tamugan river. Originally planned as a 27.5 MW run‐of‐river facility, Hedcor
Tamugan submitted a new proposal, which involves the construction of an 11.5 MW hydropower
plant. Hedcor Tamugan is waiting for the Davao City council to approve the project. Once
approval and permits are secured, the two‐year construction period will commence.
Other Greenfield and Brownfield developments. AboitizPower, together with its subsidiaries
and associate company, is conducting feasibility studies for potential Greenfield and Brownfield
projects.
• The SNAP Group is in the process of evaluating several hydropower plant projects.
A Brownfield project is being evaluated for its Magat hydropower plant, which
involves the construction of a pumped storage facility that could potentially
increase its capacity by at least 90 MW. The SNAP Group is likewise evaluating
several Greenfield hydropower plant projects that have at least 70 MW of potential
capacity each.
• Hedcor is conducting feasibility studies for potential hydropower projects located

in both Luzon and Mindanao. Based on current findings, Hedcor sees the potential
of building plants with capacities ranging from 5 MW to 50 MW. When the projects
pass the evaluation stage and once permits are secured, the two‐year construction
period for the hydropower plant facilities will commence.
2. Participation in the Government’s Privatization Program for its Power Assets
AboitizPower continues to closely evaluate the investment viability of the remaining power generation
assets that PSALM intends to auction off.
AboitizPower is also keen on participating in PSALM’s public auction for the IPP Administrator contracts,
which involves the transfer of the management and control of total energy output of power plants under
contract with NPC to the IPP administrators.
AboitizPower remains optimistic that it will realize modest growth on its existing distribution utilities. It
continually seeks efficiency improvements in its operations to maintain healthy margins.
The implementation of the rate adjustment formula for the distribution companies under the PBR is on a
staggered basis. In addition to annual adjustments, PBR allows for rate adjustments in between the reset
periods to address extraordinary circumstances. There is also a mandatory rate‐setting every four years
wherein possible adjustments to the rate take into account current situations.
Cotabato Light’s 4‐year regulatory period commenced on April 1, 2009 and ends on March 31, 2013. The
company is currently in its third year of its regulatory period. Cotabato Light is the first distribution
utility in the AboitizPower group to implement this incentive‐based scheme.

VECO and Davao Light are part of the third group (Group C) of private distribution utilities that shifted to
PBR, which implemented their approved rate structures in August 2010. Both companies implemented
their approved rates for the second year of its regulatory period in August 2011.
SFELAPCO and SEZ are part of the fourth batch (Group D) of private distribution utilities to enter PBR. In
July 2011, the ERC released the final determination on the applications for annual revenue requirements
and performance incentive schemes for the regulatory period October 2011 to September 2015.
Implementation of the approved rate structures of SEZ and SFELAPCO took place in January 2012 and
March 2012, respectively. All under‐recoveries since October 2011 are allowed to be recouped in the next
regulatory year.
Market and Industry Developments
Open Access and Retail Competition
Per EPIRA, the conditions for the commencement of the Open Access are as follows:
(a) Establishment of the WESM;

(b) Approval of unbundled transmission and distribution wheeling charges;
(c) Initial implementation of the cross subsidy removal scheme;
(d) Privatization of at least 70% of the total capacity of generating assets of NPC in Luzon
and Visayas; and
(e) Transfer of the management and control of at least 70% of the total energy output of
power plants under contract with NPC to the IPP administrators.
Under Open Access, an eligible contestable customer, which is defined as an end‐user with a monthly
average peak demand of at least 1 MW for the preceding 12 months, will have the option to source their
electricity from eligible suppliers that have secured a Retail Electricity Supplier license from the ERC.
Eligible suppliers shall include the following:
‐ Generation companies that own, operate or control 30% or less of the installed
generating capacity in a grid and/ or 25% or less of the national installed capacity
‐ NPC‐Independent Power Producers with respect to capacity which is not covered by

contracts
‐ IPP Administrators with respect to the uncontracted energy which is subject to their
administration and management
‐ Retail Electricity Suppliers (RES) duly licensed by the ERC
The implementation of Open Access presents a big opportunity for AboitizPower, as it has two wholly
owned subsidiaries (i.e. AESI and AdventEnergy ) that are licensed retail suppliers, which can enter into

contracts with the eligible contestable customers. Moreover, AboitizPower’s generation assets that have
uncontracted capacity will be able to have direct access to eligible contestable customers through
AboitizPower’s licensed RES.
In June 2011, the ERC declared December 26, 2011 as the Open Access Date to mark the commencement
of the full operations of the competitive retail electricity market in Luzon and Visayas. However, after
careful deliberation, the ERC acknowledged that not all the necessary rules, systems and infrastructures
required for the implementation of the Open Access have been put in place to meet the contemplated
timetable for implementation. In October 2011, the ERC announced the deferment of the Open Access
Date. A definitive timeline leading to the eventual implementation will be issued by the ERC after
consultation with all the stakeholders.
The table below shows the comparative figure of the top key performance indicators for 2010 and 2009:
DISCUSSION ON KEY PERFORMANCE INDICATORS:

Amounts in thousands of Ps, except for financial ratios
EBITDA 34,361,919 9,866,532
Net cash flows from (used in) financing activities (8,358,116) 7,721,594
Net Increase (Decrease) in Cash & Cash Equivalents 14,549,022 (10,358,255)
Above key performance indicators are within management expectations.
Share in Net Earnings of Associates nearly doubled from last year’s results. The largest contributing
companies were SNAP‐Magat and SNAP‐Benguet, both of which benefitted from a fresh inflow of
revenues from their respective ancillary service contracts with NGCP. Both companies also saw a marked
improvement on their average selling prices to the electricity spot market which further improved their
revenues for the year. On the other hand, the following factors allowed VECO to increase its share to the
Company’s Net Earnings of Associates:(a) the continued growth of its sales of electricity on the back of
higher demand from its industrial, commercial and residential customers, and (b) additional margins
brought about by rate adjustments in the second half of 2009 under the RORB regime and in August of
this reporting period under the PBR scheme. All the above positive contributions managed to offset a
one‐time refinancing cost of P398 mn incurred by STEAG.
The positive effects brought about by the income contribution of the Company’s new acquisitions during
the year vastly improved the Company’s EBITDA which is up 248% versus the prior year. The income
contributions from the geothermal assets of APRI starting May 2009 and the TLI IPPA for the Pagbilao
coal starting October 2009 were the main drivers of the increase in EBITDA.

The Company’s Current Ratio managed to increase to 2.58x at year‐end versus 0.68x in the prior year.
The marked increase in Current Assets is due to higher cash balances and an increase in Trade and Other
Accounts Receivables. The increase in Cash is attributable to healthy cash flows from various subsidiaries
while the increase in Trade Receivables is due to higher volumes of energy sold at better margins as well
as new Trade Receivables recognized at TMI and Hedcor Sibulan which started operating this year.
The recognition of the period’s robust net income lead to the improvement of the Company’s Debt to
Equity ratio.
Financial Results of Operations
The Company’s net income for 2010 grew by 335% to P25.08 bn from P5.77 bn for the same period last
year. This brought up earnings per share to P3.40 for the year ending December 31, 2010 versus an
earnings per share of P0.77 ending December 31, 2009.
The power generation business improved its contributions by 424% from prior year as it shored in a net
income contribution of P24.39 bn, from last year’s P4.66 bn. This impressive performance has allowed
this segment to be the major contributor to the Company’s bottom line for the year.The generation
business accounted for 93% of earnings contributions from AboitizPower’s business segments. The profit
growth of this segment is largely due to: (a) new income contributions from generation assets which
were acquired in 2009; (b) income contributions from new acquisitions this year; and (c) the start of
operations of a greenfield project in the first half of 2010. The contributions coming from the following
events accounted for the significant contributions from the power generation segment:
(a) Full year contribution of APRI, operator of the Tiwi‐Makban geothermal facilities which were
acquired in May 2009, compared to only four months for the same period in 2009;
(b) Full year contributions of TLI, which assumed dispatch control of the 700 MW Pagbilao coal fired
plant in October 2009;
(c) New contributions from TMI following its take‐over of two 100 MW power barges in the first
quarter of 2010; and
(d) The start of operations of the 26 MW Sibulan hydropower plant in March 2010.
Total attributable sales of the distribution group grew by 9% on a year‐to‐date (YTD) basis. This segment
continues to see robust growth from its industrial accounts complemented by respectable growth from
its residential and commercial accounts. Improved margins resulting from the shift to PBR for the two
major distribution utilities under this segment in August 2010 as well as the margins from the full year
effect of an RORB increase that got approved in the latter part of 2009 for one of the distribution utilities
also provided additional increases to the distribution group’s income contribution. These contributions
came in despite the significant operating expenses seen in the first half of this year due to the forced
operation of a back‐up power plant at Davao Light in Mindanao plus higher costs absorbed in two
distribution utilities due to a lower systems loss cap mandated by ERC (from 9.50% to 8.50%) which took
effect in January 2010. The distribution group contributed P1.93 bn this reporting period versus P1.57 bn
last year or an increase of 23%.

Material Changes in Line Items of Registrant’s Income Statement
Consolidated net income attributable to equity holders grew by P19.38 bn or 343%. Below is a
reconciliation of the growth in the consolidated net income.
Increase in Operating Revenues 36,377,193
Increase in Operating Expenses (15,601,780)
Increase in Share in Net Earnings of Associates 2,090,497
Decrease in Interest Income (185,814))
Increase in Interest Expense (3,864,315)
Increase in Other Income 786,989
Decrease in Non ‐ controlling Interests 69,273
Total Growth 19,382,536
The increase in Operating Revenues by 157% for 2010 versus that of 2009 is mainly due to the following:
(1) the full year take up of revenues recognized from APRI’s operations in 2010 versus only four months in
2009; (2) full year operating revenues from the dispatch of the Pagbilao power plant by TLI; and (3) the
revenues generated by newly acquired power barges of TMI and the newly operational hydro plants of
Hedcor Sibulan. The revenues recognized by our consolidated distribution companies also managed to
improve over prior years due to PBR rate adjustment granted last August 2010 for Davao Light and also
due to growth in energy sales.
At least 77% out of the total P15.60 bn increase in Operating Expenses can be attributed to the full year
operations of TLI and the fresh take up of the operating expenses of newly acquired power barges under
TMI. The remaining increase in Operating Expenses for the year can be attributed to (1) the full year
operations of APRI and the operating expenses of recently operated Hedcor Sibulan; (2) the higher costs
of purchased power for the distribution utilities in Mindanao, and (3) the cost of running the back‐up
power plants of the Mindanao distribution utilities in the first two quarters of this year to mitigate the
impact of the power shortfall in their respective franchise areas.
A significant improvement in Share in Net Earnings of Associates contributed P2.09 bn which represents
an 82% increase compared to 2009. The largest contributing companies were SNAP‐Magat and SNAP‐
Benguet, which benefitted from fresh inflow of revenues from their ancillary service contracts with NGCP
for the period which were not yet fully in place for the same period last year. Both companies also saw
marked improvement on their average selling prices to the electricity spot market. From the distribution
segment, higher demand from its residential and industrial customers and additional margins brought
about by rate adjustment in the second half of 2009 allowed VECO to increase its contributions to the
Company’s Net Earnings of Associates. All the above positive contributions managed to offset a one‐
time refinancing cost of P398 mn incurred by STEAG in the third quarter.
The Company started the year with lower cash balances as it deployed funds to various investing
activities in the prior year. Over the course of the year, the Company managed to see a gradual buildup of
cash but this still resulted to lower average cash balances over 2010 than in 2009. Hence the lower
interest income recognized in 2010. This went down by 45% or P185.81 mn compared to 2009.
The increase in Interest Expense for the year is primarily due to the interest expense recognized in TLI
arising from the recognition of its IPPA contract as a finance lease. As a finance lease, incremental
borrowing rates were used in order to recognize the asset and liability relating to the long term

obligation. Correspondingly, the discount determined at the inception of the agreement is amortized and
recognized as interest expense. Although the recognition of the interest is a non‐cash transaction, the
interest expense recognized by TLI on its statement of income for the year on the finance lease was P5.12
bn or a 316% increase over the P1.23 bn expensed out in the previous year. New interest expense coming
from debt raised at CPPC during the year as well as the recognition of interest expenses at Hedcor
Sibulan as it went into commercial operations also contributed to the increase to this line item.
The increase in Other Income of P786.99 mn to P1.60 bn from P813 mn from the previous year is mainly
due to the unrealized foreign exchange gains recognized by TLI. TLI’s IPPA monthly payments to PSALM
are composed of peso and dollar payments. The unrealized foreign exchange gain refers to the dollar
component of these monthly payments.
The Company’s considerable investing activities in the prior years has yielded the robust results which
allowed net income before tax to grow by 306%. Provision for income tax meanwhile increased by a
lower amount or 46% owing to tax holidays that were granted to recently contributing subsidiaries APRI,
TLI, TMI and Hedcor Sibulan.
Changes in Registrant’s Resources, Liabilities and Shareholders Equity
Assets
The Company’s assets grew by 21% from P111.34 bn ending 2009 to P134.56 bn ending 2010.
a) Cash & Cash Equivalents increased due to the following: (a) higher cash balances at AP Parent
which grew by P11 bn due to significant cash upstreams from the various operating companies,
mainly from APRI and TLI, during the year, (b) increase in TLI cash balances at year end. Cash
and Cash Equivalents stood at P18.03 bn at year end after paying P2.21 bn in dividends in 2010.
b) Trade & Other Receivables increased by 52% from P4.48 bn in 2009 to P6.81 bn in 2010. At least
61% of the increase is due to the higher Trade Receivables recognized by TLI which was higher
by P1.42 bn. The rest of the increase is due to the recognition of new Trade Receivables at TMI
which stood at P436 mn. Increases in this account was also true for APRI which had a net
increase of P201 mn while the distribution subsidiaries Davao Light,Cotabato Light, MEZ and
BEZ managed to increase Trade Receivables due to growth. Davao Light’s increase in this
account can also be attributed to higher selling prices at year end from its PBR rate adjustment.
c) Derivative assets increased by P6.82 mn as AP Parent recognized derivative assets relating to

various non‐deliverable short‐term forward contracts with counterparty banks in order to
manage its foreign currency risks associated with foreign currency‐denominated liabilities and
purchases.
d) The P735 mn increase in the Inventories account is in part due to the higher inventories held by
TLI as of year end, which was higher by P560 mn as it recognizes the higher cost of coal on its
coal inventory. The remaining increase is due to the initial recognition of inventories held at TMI.
e) Other current assets grew by 87% owing primarily to recognition of input VAT at newly
operating subsidiary TMI.
f) Although the Property Plant and Equipment account went up by less than 2% versus prior years,
it is worth mentioning that this account increased as a result of the acquisition of two power
barges during the year by TMI. The barges were acquired for a total of P1.39 bn.

g) Due to invested capital expenditures into the service concession area of one of the Company’s
ecozone utilities, the Intangible Asset – service concession rights account increased by 6.2%
h) The increase in Investments and Advances to Associates by P4 bn is mainly due to the

recognition of equity earnings of P4.63 bn as well as additional investment made into MORE to
fund the rehabilitation projects of SNAP‐Benguet and advances to RP Energy. This was likewise
decreased by cash dividends received during the year as well as the redemption of preferred
shares by EAUC. These factors combined, decreased the account by P1.16 bn.
i) Pension assets increased as a result of the one‐time funding of the group’s past service liabilities
in 2010.
j) Deferred Tax Assets decreased by 20% primarily due to lower deferred tax assets recognized by
AP Parent on its NOLCO, MCIT and Unrealized Foreign Exchange Gain.
k) Other Noncurrent Assets decreased by 20.68% primarily due to previously recorded restricted
cash in 2009 which was held to secure a long‐term loan of an associate. The loan was fully paid
in 2010 upon maturity and hence the restricted cash is no longer part of the Other Noncurrent
Asset Account.
Liabilities
Consolidated liabilities stayed relatively flat ending the year at P76.82 bn versus P76.29 bn in the previous
year.
a) Bank Loans decreased by P3.85 bn as AP Parent supported by healthy cash upstreams from its
subsidiaries managed to decrease bank loans by P3.60 bn.
b) Trade and Other Payables increased by 15.46% due to the first time consolidation of TMI’s Trade
Payables, which accounted for 76% of the increase, as well as higher Trade and Other Payables
at year end for TLI.
c) Derivative liabilities decreased by P16.15 mn as previously recognized marked to market losses

on foreign currency forwards entered into by AP Parent and TMI did not recur as of year end.
Current forward contracts in place are by AP Parent which now stands as Derivative Assets as of
year end.
d) As of end 2009, TLI recognized P233 mn in income taxes payable on its books. After being
granted a tax holiday for four years commencing January 1, 2010, this liability did not recur year
end 2010 hence the decrease in this account by 50.81% or P185.56 mn. The net change is owing
to higher taxes payable at year‐end for the other subsidiaries who are not on tax holiday.
e) Long‐term Debt remained at about the same levels as of year‐end 2009 as no new significant
Long Term Debt was entered into during the year except for the recent availment of an P800 mn
3‐year corporate notes by CPPC under a Notes Facility Agreement entered into in January 2010.
f) Total Finance Lease obligations at year‐end 2010 increased by 6%. Monthly payments on this
obligation exceeds monthly interest expense recognized hence the increase noted at year end.

g) Payable to Preferred Shareholder of a Subsidiary went down by 13% as annual payments were
timely made to preferred shareholders.
h) An increase in Customer’s Deposit of 12.54% or P223.27 mn was mainly due to new connections
in the franchise areas of Davao Light as it continued to see robust growth in its customer base.
Davao Light’s increase in customer deposits make up 74% of the total increase. The balance
comes from increased customer deposits of Cotabato Light, MEZ, and SEZ as well as from APRI
and TLI on their bilateral contracts.
i) Pension liability decreased during the year as obligations were funded during the year.
j) Deferred Income Tax Liability increased by 745% due to the recognition of Deferred Tax Liability
at TLI on unrealized foreign exchange gains on its dollar obligations to PSALM, past its’ tax
holiday period.
Equity
Equity attributable to equity holders of the parent increased from P34.48 bn as of December 2009 to
P57.33 bn as of December 2010. This is mainly driven by the Net Income recorded for the year of P25.04
bn.
The Company declared dividends of P0.30 per share to all shareholders of record as of March 24, 2010,
which was paid last April 16, 2010.
After significant investing activities made in 2009 that brought down the Company’s cash reserves down
to P3.81 bn by year end, 2010 marked a period of cash build up for the Company as it realized the rewards
on investments made. These investments brought up cash balances to P18.30 bn at year end 2010.

Out of the total Net Cash flow from Operating Activities of P27.28 bn, P26 bn comes from Income Before
Income Tax recognized for the year. Robust income most especially from newly operating business units
provided the healthy streams of cash from operations.
Net cash used in investing activities was P4.37 bn compared to P23.95 bn for the same period last year.
The cash used in investing activities went to the increases in Power Plant and Equipment invested in TMI
and Hedcor Sibulan and more outlays related to the funding of the rehabilitation projects of SNAP‐
Benguet and advances to RP Energy. This was supplemented by dividends received during the year of
P1.82 bn.
Cash was used in various financing activities this year totalling P8.36 bn versus a net cash inflow last year
of P7.72 bn. These financing activities relate to the payment of short term debt at AP Parent of P3.60 bn,
dividends paid to shareholders of P2.21 bn, monthly payments made by TLI to PSALM during the year of
P1.12 bn as well as interest paid on long term debt of P1.62 bn.
All of the above mentioned activities resulted to a net cash inflow for the year of P14.55 bn bringing up
cash and cash equivalents by year end to P18.30 bn versus P3.81 bn in 2009.
Financial Ratios
Current ratio increased by 1.90, from 0.68x as of December 2009 to 2.58x in December 2010. This was
due to the marked increase in cash which shored up current assets. The ratio also improved due to the
decrease in current liabilities as a significant amount of short term debt was paid during the year.
With liabilities remaining flat and equity increasing due to the healthy results of operations, during the
year, the debt‐to‐equity ratio improved from 2.18 ending 2009 to 1.33 ending 2010.
The table below shows the comparative figures of the top five key performance indicators for 2009 and
2008.
DISCUSSION ON KEY PERFORMANCE INDICATORS:

Amounts in thousands of πs, except for financial ratios

EBITDA 9,866,532 5,406,974
Net cash flows from financing activities 7,721,594 5,049,159
Net Increase (Decrease) in Cash & Cash Equivalents (10,358,255) 1,166,709
Above key performance indicators are within management expectations.
94 • SEC Form 17-A

The Company’s Share in Net Earnings of Associates is slightly behind last year’s results primarily due to
the lower contributions from STEAG, operator of a 232‐MW coal plant in Misamis Oriental, as it felt the
impact of the decrease of a major index in its pricing formula which went down this year versus last year.
The positive effects brought about by the income contribution of the Company’s new acquisitions during
the year has vastly improved the Company’s EBITDA which is up 82% versus the prior year. The EBITDA
contributions from the geothermal assets under APRI starting May 2009 and the EBITDA contributions
arising from the TLI IPPA for the coal plants in Pagbilao which started in October 2009 were the main
drivers of the increase in EBITDA.
Current ratio decreased due to the decrease in the Company’s Consolidated Cash as capital got invested
into various acquisitions made during the year.
To further augment the capital needed for its investment activities, the Company entered into various
capital raising activities which increased its debt to equity ratio.
Financial Results of Operations
The Company’s net income for 2009 grew by 31% to P5.77 bn from P4.42 bn for the same period last
year. This lifted earnings per share to P0.77 for the year ending December 31, 2009 versus an earnings per
share of P0.59 ending December 31, 2008.
The power generation business improved its contributions by 68% from prior year as it shored in a net
income contribution of P4.66 bn from last year’s P2.78 bn. The primary contributor to this year’s
impressive earnings is APRI, as it took over in May 2009 the geothermal facilities in Tiwi‐MakBan from
PSALM. On its first year of operations APRI manage to contribute 44% of the total income contribution
of the generation group.
Total power sold by the Generation Companies for the period grew by 167% year‐on‐year (YOY) from
1,728 GWh to 4,619 GWh. As of end‐2009, AboitizPower’s power generation group had an attributable
capacity of 1,745 MW, a 202% YOY increase from end‐2008. It is this increase in attributable capacity
resulting from the acquistions of APRI (467 MW) and the IPPA of TLI for Pagbilao (700 MW) which has led
to the surge in generation sold by the Generation companies.
The Distribution Companies’ income contribution improved by 6% or P1.57 bn, from last year’s P1.48 bn.
The Distribution Companies’ kilowatt‐hour electricity sales for the period grew by 6% YOY, from 3,142
GWh to 3,322 GWh. The healthy growth particularly that of AboitizPower’s major distribution utilities,
Davao Light and VECO‐was observed to be coming from both its residential and commercial/industrial
customers.

Material Changes in Line Items of Registrant’s Income Statement
Consolidated net income attributable to equity holders grew by P1.32 bn or 31%. Below is a
reconciliation of growth in the consolidated net income:
Increase in Operating Revenues 10,931,285
Increase in Operating Expenses (7,127,623)
Decrease in Share in Net Earnings of Associates (249,126)
Decrease in Interest Income (197,568)
Increase in Interest Expense (2,435,442)
Increase in Other Income 436,719
Increase in Minority Interests (20,471)
Total Growth 1,324,968
Consolidated Operating Revenues increased by 89% versus last year. The increase in consolidated
revenue is accounted for by the new revenue contributions by TLI since the turnover of dispatch control
of the 700‐MW Pagbilao plant in October 2009 and the revenue contributions from APRI geothermal
plants that were turned over in May 2009. The revenues from these plants combined make up close to
90% of the increase in consolidated revenue. The remaining increase is attributable to the higher revenue
brought about by growth and higher passed on generation costs by the distribution utilities.
As expected, as the operations of the new acquisitions are folded in, a corresponding increase in costs
and expenses followed which increased operating expenses by 67% over last year. The costs and
expenses of TLI and APRI, account for 83% of the increase while 11% of the increase was brought about
by higher operating expenses at Davao Light due to higher purchased power costs.
The decrease in the share in equity earnings for the year is due to the lower contributions from STEAG,
operator of a 232‐MW coal plant in Misamis Oriental, as it felt the impact of the decrease of a major index
in its pricing formula which went down this year versus last year. Share in net earnings of associates fell
by 9% compared to last year or a total of P249 mn.
As the Company’s cash is deployed to various investing activities, the interest income compared to prior
years has gone down by 33% or P197.57 mn.
Interest expense also increased by 643% due to the various debt raising acitivites entered into by the
Company namely: 1) Fixed Rate Note of 5‐year peso‐denominated corporate fixed rate notes (Notes) in
the aggregate amount of P5 bn. The Notes were issued in September 2009, 2) a total of P3 bn worth of
peso‐denominated fixed rate retail bonds issued last April 2009, 3) P3.89 bn in 5‐year and 7‐year peso‐
denominated corporate fixed rate notes issued last December 2008, 4) higher short‐term bank loans.
Another transaction that led to the increase of the interest expense for the year is the effect of TLI’s IPPA
which was accounted for as a finance lease. As a finance lease, incremental borrowing rates were used in
order to recognize the asset and liability relating to the long‐term obligation. Correspondingly, the
discount determined at the inception of the agreement is amortized and recognized as interest expense.
Although the recognition of the interest is a non‐cash transaction, the interest expense recognized by TLI
on its statement of income for the year on the finance lease was P1.23 bn.
Other Income increased by P436.72 bn mainly due to the unrealized forex gains recognized by TLI on

future minimum dollar payments to PSALM as part of its IPPA agreement.
As a result of the foregoing, income before income tax increased by P1.36 bn or 27% from P5.04 bn in the
previous year to P6.40 bn in the current year. Provision for taxes ending 2009 increased by 2% to P631.19
mn from a prior period provision of P618.38 mn.
Changes in Registrant’s Resources, Liabilities and Shareholders Equity
Assets
Compared to year‐end 2008 levels, consolidated assets increased by 136%, from P47.27 bn in
December 2008 to P111.34 bn in December 2009 due to the following:
a) Cash & Cash Equivalents was at P3.81 bn, down by 73% from year‐end 2008 level of P14.33 bn
(as restated). Through the debt‐raising activities entered into by AP Parent, total cash raised
reached close to P11 bn. A significant portion of the Company’s cash was then deployed to APRI
thru PHC to fund the full payment for the geothermal assets from PSALM. The total purchase
price for these assets totalled close to P21 bn. In 2009, cash was also used to pay shareholder
dividends totalling P1.47 bn.
b) Trade & Other Receivables increased by 125%, from P1.99 bn to P4.48 bn due to the
consolidated trade and other receivables of both TLI and APRI totalling P2.53 bn.
c) Inventories increased by 234% due to APRI’s supplies and materials as well as coal inventory
held by TLI.
d) The asset account for Property, Plant and Equipment considerably increased by 1065% from
P6.26 bn in 2008 to P72.90 bn. APRI’s newly acquired geothermal property, plant and
equipment account for P19.91 bn, while TLI’s finance lease recognition of the power plant and
equipment on the Pagbilao assets added another P44.52 bn. The balance of the increase is due
to the construction in progresss of the hydro plants being built by Hedcor Sibulan.
e) Investments in and Advances to Associates increased by 17% or a total of P3.55 bn due to

additional investments in associates of P1.34 bn for a coal plant being constructed in Toledo,
Cebu, and the recognition of equity earnings of P2.54 bn.
f) Increase of 283% in Pension Assets resulting from actuarial adjustments for Davao Light and
CPPC which lead to the increase.
g) Deferred Income Tax Assets increased by P183.43 mn or 276% primarily due to unrealized
foreign exchange losses on dollar cash holdings and Net Operating Loss Carryover (NOLCO)
recognized by AP Parent during the year.
h) Other Noncurrent Assets increased by 132% or P879.62 mn due to prepaid rent of P460.87 mn
mostly on advance payment of land rental to PSALM by APRI and the build up of Input Vat
Receivable due to the construction of a hydropower plant by Hedcor Sibulan.
Liabilities
Consolidated liabilities increased to a total of P76.29 bn, a 360% increase over year‐end 2008 level. The
following were the reasons for the increase:

a) Bank Loans increased by 21% or P1.03 bn due to AP Parent’s availment of a short‐term bank
loan to support its investment activities.
b) Trade and Other payables increased by 91% from P3.15 bn in 2008 to P6.02 bn ending 2009 due
to the first‐time consolidation of both APRI and TLI trade payables and accruals.
c) The first‐time recognition of Derivative Liabilities of P16.48 mn represents the booking of

marked to market losses on foreign currency forwards entered into by AP Parent and TMI.
d) Income Tax Payable increased by 349% or P283.79 mn due to TLI’s recognition of income tax
payable for the year.
e) Long‐term Debts were increased by 149% or P9.73 bn versus year‐end 2008 level by the
following: 1) Fixed Rate Note of 5‐year peso‐denominated corporate fixed rate notes (Notes) in
the aggregate amount of P5 bn. The Notes were issued in September 2009 2) a total of P3 bn
worth of peso‐denominated fixedrate retail bonds issued last April 2009. The proceeds from
these debt‐raising activities were invested into the acquisition of the geothermal assets of APRI.
The remaining increase is because of additional loan drawdowns made by Hedcor Sibulan to
finance the construction of its Sibulan hydropower project.
f) A new liability account this year is the account ‐ Finance Lease Obligation. The Pagbilao IPPA
agreement between PSALM and TLI was deemed a finance lease. As a finance lease the lease is
conceived to be a purchase of an asset requiring the recognition of an asset (booked under
property, plant and equipment) and a corresponding liability. The amount recognized as of end
2009 as Finance Lease Obligation is P45.59 bn.
g) An increase in Customers’ Deposits of 13% or P210.02 mn was due to new connections mainly in
the franchise areas of Davao Light as it continues to see robust growth in its customer base.
Davao Light’s increase in customer deposits makes up 83% of the total increase. The balance is
coming from increased customer deposits from Cotabato Light, SEZ and APRI.
h) Payable to Preferred Shareholder of a Subsidiary went down by 9% as annual payments were

timely made to preferred shareholders.
i) Pension liability increased by 95% or P13.69 mn due to the recognition of pension obligations of
newly consolidated company APRI and an increase in pension liabilities at Hedcor, Inc.,
Cotabato Light and AP Parent.
j) Deferred Income Tax Liability decreased by 36% or P21.02 mn due to the realization of forex
transactions in 2009 for AP parent that previously warranted the booking of the deferred tax
liability in the previous year.
Equity
Equity attributable to equity holders of the parent increased by 14% from P30.16 bn as of December 2008
to P34.48 bn as of December 2009. This was mainly due to the consolidated net income of P5.77 bn, an

upward adjustment in share in cumulative translation adjustments of associates of P133.67 mn and after
a cash dividend payment of P1.47 bn in the first quarter of 2009.
The Company declared dividends of P0.20 per share to all shareholders of record as of February 26, 2009.
This was paid on March 23, 2009.
As of December 31, 2009, the Group’s cash reserves ended with a balance of P3.81 bn a 73% decrease
from its balances as of December 31, 2008 of P14.33 bn (as restated). This was after major investing and
financing activities conducted during most of the year.
Net cash from operating activities brought in P5.87 bn this year compared to net cash inflow of only P1.91
bn for the same period last year. The higher income before income tax of P6.40 bn is the primary driver
of the increase.
Net cash used in investing activities was P23.95 bn compared to P5.79 bn for the same period last year.
The primary investing activity for the period was the purchase of the geothermal assets of Tiwi‐MakBan
from PSALM, for P20 bn. The construction in progress by Hedcor Sibulan for its hydro plant in Mindanao
is still ongoing adding another P1.91 bn in cash used for investing activities. Another P1.34 bn went to the
construction of a coal plant in Toledo, Cebu.
Net cash from financing activities for the period in review was P7.72 bn, which was mainly the net result
of inflows of long‐term debt in the amount of P9.76 bn, of which AP Parent raised fixed rate notes of P5
bn and P3 bn in corporate bonds. There was also an increase in long term debt relating to the Hedcor
Sibulan project as more draw downs were made in 2009. Short‐term loans from banks of P1.14 bn were
availed of by AP parent as part of the purchase for the geothermal assets, and by subsidiaries to fund
working capital requirements. There were also cash outflows for the P1.47 bn dividend payout in the first
quarter of 2009 as well as interest paid during the period totalling another P1.47 bn.
The Company finished the year with net cash outflows of P10.36 bn. The cash and cash equivalents for
the period ending December 31, 2009 was P3.81 bn versus cash and cash equivalents as of December 31,
2008 of P14.33 bn (as restated). This is consistent with management’s plan of raising capital and to
deploy cash raised from these activities to acquire existing power facilities and develop Greenfield
projects as well as to improve its generation and distribution facilities.
Financial Ratios
Current ratio decreased by 1.44, from 2.12x as of December 2008 (as restated) to 0.68x in December
2009. This was due to the marked decrease in cash used to finance investment activities although the
recognition of trade receivables and inventory buffered the decrease in cash. This was also brought down
by the increase in current liabilities due to higher bank loans incurred in 2009 to fund working capital
requirements and due to higher trade and other payables as well as the recognition of the current portion
of the Finance Lease Obligation. The use of the cash raised from the capital raising activities during the
year is consistent with the Company’s long‐term plan of improving shareholder value by deploying
capital into high yielding investments.
Debt‐to‐equity ratio increased from 0.54 as of December 31, 2008 to 2.18 as of December 31, 2009 as
AboitizPower raised debt to fund its various investing activities.

Item 7. Financial Statements
The consolidated financial statements of AboitizPower are incorporated herein by reference. The
schedules listed in the accompanying Index to Supplementary Schedules are filed as part of this SEC
Form 17‐A.
Item 8. Information on Independent Accountant and Other Related Matters
(A) External Audit Fees and Services
The following table sets out the aggregate fees billed to the Company for each of the last two years for
professional services rendered by SGV & Co.
Fee Type 2011 2010

Audit Fees P315,000 P300,000
Tax Fees P50,000

All Other Fees ‐‐ ‐‐
Total P315,000 P300,000
As a policy, the Board Audit Committee makes recommendations to the Board of Directors concerning
the choice of external auditor and pre–approves audit plans, scope and frequency before the audit is
conducted.
Audit services of SGV & Co. for the 2011 and 2010 were pre–approved by the Board Audit Committee.
The Board Audit Committee also reviewed the extent and nature of these services to ensure that the
independence of the external auditors was preserved.
SGV & Co. does not have any direct or indirect interest in the Company.
(B) Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
The SGV accounting firm has been AboitizPower’s Independent Public Accountant for the last 13 years.
Mr. J. Carlitos G. Cruz served as audit partner of AboitizPower since 2009. He replaced Mr. Ladislao Z.
Avila who served as audit partner for five years from 2004 to 2008. AboitizPower shall comply with the
requirements of Section 3(b)(iv) of SRC Rule 68 on the rotation of external auditors or signing partners.
Representatives of SGV will be present during the annual meeting and will be given the opportunity to
make a statement if they so desire. They are also expected to respond to appropriate questions if
needed.
There was no event in the past 13 years where AboitizPower and SGV or the handling partner had any
disagreement with regard to any matter relating to accounting principles or practices, financial
statement disclosured or auditing scopes or procedures.

In its regular meeting last February 29, 2012, the Board Audit Committee of AboitizPower approved a
resolution to submit for the approval of the stockholders during the Annual Stockholders’ Meeting a
proposal to delegate to the Board of Directors the authority to appoint the Company’s external auditors
for 2011. The proposal is intended to give the Board Audit Committee sufficient time to evaluate the
different auditing firms who have submitted engagement proposals to act as AboitizPower’s external
auditor for 2012.
PART III – CONTROL AND COMPENSATION INFORMATION
Item 9. Directors and Executive Officers of the Issuer
Below is a list of AboitizPower’s directors for 2011‐2012 with their corresponding positions and offices
held for the past five years. The directors assumed their directorship during AboitizPower’s annual
stockholders’ meeting in 2011 for a term of one year.
ENRIQUE M. ABOITIZ, JR.

Chairman of the Board of Directors
Chairman – Board Risk Management Committee
Mr. Enrique M. Aboitiz, Jr., 58 years old, Filipino, has served as Director and Chairman of the Board of
Directors of AboitizPower since 2009. He is currently a Director and Senior Vice‐President of AEV and
Aboitiz & Company, Inc. He is also the Chairman of the Board of Directors of Aboitiz Land, Inc.; Director
of AP Renewables, Inc., Manila‐Oslo Renewable Enterprise, Inc. and Therma Luzon, Inc. Mr. Aboitiz
graduated with a degree in Bachelor of Science in Business Administration (Major in Economics) from
Gonzaga University, Spokane, Washington, U.S.A.
JON RAMON ABOITIZ

Vice Chairman of the Board of Directors
Chairman ‐ Board Corporate Governance Committee
Mr. Jon Ramon Aboitiz, 63 years old, Filipino, has been a Director of AboitizPower since 1998 and served
as Chairman of the Board of AboitizPower from 1998 to 2008. Mr. Aboitiz began his career with the
Aboitiz Group in 1970. From manager of the Aboitiz Shipping Corporation, Mr. Aboitiz was promoted to
President of the company in 1976 and became President of Aboitiz & Company in 1991 until 2008. He is
also Chairman of the Board of Directors of Aboitiz & Company, Inc., Aboitiz Equity Ventures, Inc. and
Aboitiz Jebsen Company, Inc.; Director of City Savings Bank, Inc. and International Container Terminal
Services, Inc. Mr. Aboitiz is also the Vice Chairman of the Board of Directors of Union Bank of the
Philippines. He is Chairman of the bank’s Executive Committee, Risk Management Committee and
Corporate Governance Committee, including the latter’s Compensation and Remuneration, and
Nominations Sub‐Committees. He is President of the Aboitiz Foundation, Inc., Trustee and Vice
President of the Ramon Aboitiz Foundation, Inc.; Trustee of the Santa Clara University, California and
The Philippine Business for Social Progress Foundation; and member of the Board of Advisors of the
Association of Foundations as well as The Coca Cola Export Corporation in the Philippines. Mr. Aboitiz
holds a B.S. Commerce degree, Major in Management from the Santa Clara University, California.

ERRAMON I. ABOITIZ
President and Chief Executive Officer
Member – Board Corporate Governance Committee and Board Risk Management Committee
Mr. Erramon I. Aboitiz, 55 years old, Filipino, has served as President and Chief Executive Officer of
AboitizPower since 1998. He is also the President and Chief Executive Officer of AEV. He has been a
Director of AEV since 1994 and was its Executive Vice President and Chief Operating Officer from 1994 to
December 2008. He is also President and Chief Executive Officer of Aboitiz & Company, Inc.; Chairman of
the Board of Directors of Davao Light & Power Company, Inc., San Fernando Electric Light and Power
Company, Inc., Cotabato Light & Power Company, Subic Enerzone Corporation, SN Aboitiz Power‐
Magat, Inc., SN Aboitiz Power‐Benguet, Inc., Aboitiz Renewables, Inc., Therma Marine, Inc., Therma
Power, Inc., Visayan Electric Company, Inc. and City Savings Bank, Inc.; and Director of STEAG State
Power Inc., Union Bank of the Philippines and Pilmico Foods Corporation. He is also Chairman of Aboitiz
Foundation, Inc. and a director of the Family Business Development Center (Ateneo de Manila
University). He holds a degree in Bachelor of Science in Business Administration, Major in Accounting
and Finance from Gonzaga University, Spokane, U.S.A.
MIKEL A. ABOITIZ
Director
Member ‐ Board Audit Committee
Mr. Mikel A. Aboitiz, 57 years old, Filipino, has been a Director of AboitizPower since 1998. He is also the
Senior Vice President‐Chief Information Officer and Chief Strategy Officer of AEV; Director and Senior
Vice President for Strategy of Aboitiz & Company, Inc.; President & Chief Executive Officer of City
Savings Bank, Inc., Inc.; Director of Visayan Electric Company, Inc., Cotabato Light & Power Company,
Davao Light & Power Company, Inc., Aboitiz Land, Inc., Pilmico Foods Corporation, Pilmico Animal
Nutrition Corporation, Cebu Praedia Development Corporation, Aboitiz Construction Group, Inc., AP
Renewables, Inc., AEV Aviation, Inc., Metaphil International, Inc., Therma Power, Inc., Therma Luzon,
Inc.; and Trustee and Treasurer of Ramon Aboitiz Foundation, Inc. He holds a degree in Bachelor of
Science, Major in Business Administration from Gonzaga University, Spokane, U.S.A.
JAIME JOSE Y. ABOITIZ

Director
Executive Vice President & Chief Operating Officer ‐ Power Distribution Group;
Mr. Jaime Jose Y. Aboitiz, 50 years old, Filipino, was a Director of AboitizPower from 2004 to April 2007.
He was again elected as Director of AboitizPower in 2009. He is also the Director and Executive Vice
President and Chief Operating Officer of Visayan Electric Company, Inc.; President and Chief Executive
Officer of Cotabato Light & Power Company, Subic Enerzone Corporation, Davao Light & Power
Company, Inc.; President of Mactan Enerzone Corporation and Balamban Enerzone Corporation;
Director of Aboitiz Renewables, Inc., Hedcor Sibulan, Inc., Cebu Private Power Corporation, San
Fernando Electric Light and Power Company, Inc. and Hedcor, Inc. He holds a degree in Mechanical
Engineering from Loyola Marymount University in California and a master’s degree in Management from
the Asian Institute of Management.

ANTONIO R. MORAZA
Director
Executive Vice President & Chief Operating Officer ‐ Power Generation Group
Mr. Antonio R. Moraza, 55 years old, Filipino, has served as Director of AboitizPower since 1999. He has
been a director of AEV since May 2009. He is also Chairman of the Board of Directors of AP Renewables,
Inc., Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, Cebu Private Power Corporation
and East Asia Utilities Corporation; Chairman and Chief Executive Officer of Hedcor, Inc. and Hedcor
Sibulan, Inc.; Vice‐Chairman of Propriedad Del Norte, Inc. and Aboitiz Land, Inc. He is likewise a Director
and Senior Vice President of Aboitiz & Company, Inc.; President and Chief Executive Officer of Abovant
Holdings, Inc., Therma Luzon, Inc., and Aboitiz Renewables, Inc.; President of Manila‐Oslo Renewable
Enterprise, Inc., Therma Marine, Inc. and Therma Power, Inc.; and Director of SN Aboitiz Power‐Benguet,
Inc., SN Aboitiz Power‐ Magat, Inc., Luzon Hydro Corporation, Southern Philippines Power Corporation,
STEAG State Power Inc., and Western Mindanao Power Corporation. He holds a degree in Business
Management from Ateneo de Manila University.
JOSE R. FACUNDO
Independent Director
Chairman – Board Audit Committee
Mr. Jose R. Facundo, 73 years old, Filipino, has been an Independent Director of AboitizPower since 2008. He
currently serves as member of the Board of Directors of Security Bank Corporation, Siemens Philippines, Inc.,
and an Independent Director of Alaska Milk Corp. Mr. Facundo has an extensive career in banking. He served as
a member of the Board of Directors and Executive Committee and as President of BPI Capital Corporation. He
was also a member of the Board of Directors and Executive Committee of the Bank of the Philippine Islands
(BPI). Prior to BPI’s merger with CityTrust Banking Corp. (CityTrust), Mr. Facundo served as President and CEO
of CityTrust and was a member of its Board and Executive Committees. He was also a Senior Managing Director
of Ayala Corporation and formerly a Senior Officer of Citibank Manila. He also served as member of the Board
of Directors of Temic Phil., Inc., and Chairman and member of the Board of Directors of the Philippine Clearing
House. He was a member of the Philippine Business for Social Progress, Junior Achievement of the Philippines
and the Rotary Club. He holds a degree in AB Engineering and took post graduate studies in Statistics and
Engineering.
ROMEO L. BERNARDO
Member – Board Audit Committee and Board Corporate Governance Committee
Mr. Romeo L. Bernardo, 57 years old, Filipino, has been an Independent Director of AboitizPower since
2008. He is the Managing Director of Lazaro Bernardo Tiu and Associates (LBT), a boutique financial
advisory firm based in Manila. He is also GlobalSource economist in the Philippines. He does World
Bank and Asian Development Bank‐funded policy advisory work, Chairman of ALFM Family of Funds and
Philippine Stock Index Fund. He is likewise a Director of several companies and organizations including
Globe Telecom, BPI, RFM Corporation, Philippine Investment Management, Inc., Philippine Institute for
Development Studies (PIDS), BPI‐Philam Life Assurance Corporation (formerly known as Ayala Life
Assurance, Inc.), National Reinsurance Corporation of the Philippines and Institute for Development

and Econometric Analysis. He previously served as Undersecretary of Finance and as Alternate Executive
Director of the Asian Development Bank. He was an Advisor of the World Bank and the IMF (Washington
D.C.), and served as Deputy Chief of the Philippine Delegation to the GATT (WTO), Geneva. He was
formerly President of the Philippine Economics Society; Chairman of the Federation of ASEAN Economic
Societies and a Faculty Member (Finance) of the University of the Philippines. Mr. Bernardo holds a
degree in Bachelor of Science in Business Economics from the University of the Philippines (magna cum
laude) and a Masters degree in Development Economics at Williams College (top of the class) from
Williams College in Williamstown, Massachusetts.
JAKOB DISCH
Member – Board Audit Committee, Board Corporate Governance Committee and Board Risk
Management Committee
Mr. Jakob G. Disch, 57 years old, a Swiss national, has been an Independent Director of AboitizPower
since March 2010. He is the Chairman, Chief Executive Officer and Founder of Convergence GmbH, an
energy and environmental consulting firm located at Wintherthur, Switzerland. He gained extensive
experience in the energy business from serving in various capacities in the ABB group of companies,
among others as member of the Top Management Council of ABB and President of ABB Enertech Ltd.
with Global Responsibility; Executive Vice‐President Power Generation and member of the Asia Pacific
Regional Management of ABB Asia Pacific Ltd.; Chairman of the Board of ABB India and Singapore;
President of ABB Power Generation Sdn. Bhd. in Malaysia; and Vice President for Marketing, Sales and
Project Management of ABB Kraftwerke AG of Baden, Switzerland.
Nominations for Independent Directors and Procedure for Nomination
The procedure for the nomination and election of the independent directors is in accordance with with
Rule 38 of the Securities Regulation Code (SRC Rule 38), AboitizPower’s Amended By‐Laws and
AboitizPower’s Guidelines . The Guidelines were duly approved by the AboitizPower Board.
AboitizPower’s By‐Laws was amended on May 15, 2007 to incorporate the requirements of SRC Rule 38.
Nominations for independent directors were accepted starting January 1, 2012, as provided for in Section
2 of the Guidelines and the table for nominations was closed on February 15, 2012, as provided for in
Section 3 of the Guidelines.
SRC Rule 38 and the Guidelines further require that the Board Corporate Governance Committee shall
meet to pre‐screen all nominees and submit a Final List of Candidates to the Corporate Secretary no later
than February 22, 2012 so that such list will be included in the Corporation’s Preliminary and Definitive
Information Statements. Only nominees whose names appear on the Final List shall be eligible for
election as independent directors. No other nominations shall be entertained after the Final List of
nominees has been prepared. The name of the person or group of persons who recommend the
nomination of an independent director shall be identified in such report including any relationship with
the nominee. All these procedures were complied with.
In approving the nominations for independent directors, the Board Corporate Governance Committee
considered the guidelines on the nominations of independent directors prescribed in SRC Rule 38, the
Guidelines and AboitizPower’s Revised Manual on Corporate Governance.

No nominations for independent director shall be accepted at the floor during the stockholders’ meeting
at which such nominee is to be elected. However, independent directors shall be elected in the
stockholders’ meeting during which other members of the Board are to be elected.
Messrs. Jose R. Facundo, Romeo L. Bernardo and Jakob G. Disch are the nominees for Independent
Directors of AboitizPower. They are neither officers nor employees of AboitizPower or its affiliates, and
do not have any relationship with AboitizPower which would interfere with the exercise of independent
judgment in carrying out the responsibilities of an independent director. Attached as Annexes “A”, “A‐1”
and “A‐2” are the Certifications of Qualification of the Nominees for Mr. Facundo, Bernardo and Disch,
respectively.
AboitizPower stockholders Joy E. Ornopia, Joanna Marie S. Abay and Esmeralda C. Daño have
respectively nominated Messrs. Facundo, Bernardo and Disch as AboitizPower’s independent directors.
None of the nominating stockholders has any relation to Mr. Facundo, Mr. Bernardo nor Mr. Disch.
Other Nominees for Election as Members of the Board of Directors
As conveyed to the Corporate Secretary, the following have also been nominated as members of the
Board of Directors for the ensuing year 2012‐2013:
Jon Ramon Aboitiz

Erramon I. Aboitiz
Antonio R. Moraza
Mikel A. Aboitiz
Enrique M. Aboitiz, Jr.
Jaime Jose Y. Aboitiz
Pursuant to Section 7, Article I of the Amended By‐Laws of AboitizPower, nominations for members of
the Board of Directors, other than independent directors, for the ensuing year must be received by the
Corporate Secretary no less than 15 working days prior to the regular annual stockholders’ meeting on
May 21, 2012 or not later than April 27, 2012.
All other information regarding the positions and offices by the abovementioned nominees are
integrated in Item 5 (a)(1) hereof.
Officers for 2011 ‐2012
Below is a list of AboitizPower’s officers for 2011‐2012 with their corresponding positions and offices held
for the past five years. The officers assumed their positions during AboitizPower’s annual organizational
meeting in 2011 for a term of one year.
ERRAMON I. ABOITIZ
President and Chief Executive Officer

Mr. Erramon I. Aboitiz, 55 years old, Filipino, has served as President and Chief Executive Officer of
AboitizPower since 1998. He is also the President and Chief Executive Officer of AEV. He has been a
Director of AEV since 1994 and was its Executive Vice President and Chief Operating Officer from 1994 to
December 2008. He is also President and Chief Executive Officer of Aboitiz & Company, Inc.; Chairman of
the Board of Directors of Davao Light & Power Company, Inc., San Fernando Electric Light and Power
Company, Inc., Cotabato Light & Power Company, Subic Enerzone Corporation, SN Aboitiz Power‐
Magat, Inc., SN Aboitiz Power‐Benguet, Inc., Aboitiz Renewables, Inc., Therma Marine, Inc., Therma
Power, Inc., Visayan Electric Company, Inc. and City Savings Bank, Inc.; and Director of STEAG State
Power Inc., Union Bank of the Philippines and Pilmico Foods Corporation. He is also Chairman of Aboitiz
Foundation, Inc. and a director of the Family Business Development Center (Ateneo de Manila
University). He holds a degree in Bachelor of Science in Business Administration, Major in Accounting
and Finance from Gonzaga University, Spokane, U.S.A.
ANTONIO R. MORAZA
Director
Executive Vice President & Chief Operating Officer ‐ Power Generation Group
Mr. Antonio R. Moraza, 55 years old, Filipino, has served as Director of AboitizPower since 1999. He has
been a director of AEV since May 2009. He is also Chairman of the Board of Directors of AP Renewables,
Inc., Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, Cebu Private Power Corporation
and East Asia Utilities Corporation; Chairman and Chief Executive Officer of Hedcor, Inc. and Hedcor
Sibulan, Inc.; Vice‐Chairman of Propriedad Del Norte, Inc. and Aboitiz Land, Inc. He is likewise a Director
and Senior Vice President of Aboitiz & Company, Inc.; President and Chief Executive Officer of Abovant
Holdings, Inc., Therma Luzon, Inc., and Aboitiz Renewables, Inc.; President of Manila‐Oslo Renewable
Enterprise, Inc., Therma Marine, Inc. and Therma Power, Inc.; and Director of SN Aboitiz Power‐Benguet,
Inc., SN Aboitiz Power‐ Magat, Inc., Luzon Hydro Corporation, Southern Philippines Power Corporation,
STEAG State Power Inc., and Western Mindanao Power Corporation. He holds a degree in Business
Management from Ateneo de Manila University.
JAIME JOSE Y. ABOITIZ

Director
Executive Vice President & Chief Operating Officer ‐ Power Distribution Group
Mr. Jaime Jose Y. Aboitiz, 50 years old, Filipino, was a Director of AboitizPower from 2004 to April 2007.
He was again elected as Director of AboitizPower in 2009. He is also the Director and Executive Vice
President and Chief Operating Officer of Visayan Electric Company, Inc.; President and Chief Executive
Officer of Cotabato Light & Power Company, Subic Enerzone Corporation, Davao Light & Power
Company, Inc.; President of Mactan Enerzone Corporation and Balamban Enerzone Corporation;
Director of Aboitiz Renewables, Inc., Hedcor Sibulan, Inc., Cebu Private Power Corporation, San
Fernando Electric Light and Power Company, Inc. and Hedcor, Inc. He holds a degree in Mechanical
Engineering from Loyola Marymount University in California and a master’s degree in Management from
the Asian Institute of Management.
JUAN ANTONIO E. BERNAD

Executive Vice President ‐ Strategy and Regulation
Mr. Juan Antonio E. Bernad, 55 years old, Filipino, has been AboitizPower’s Executive Vice President for
Strategy and Regulation since 2009. He previously served AboitizPower in several capacities, as Director
from 1998 until May 18, 2009, as Executive Vice President/Chief Financial Officer/Treasurer from 1998 to
2003 and as Executive Vice President for Regulatory Affairs/Chief Financial Officer from 2004 to 2007. He
is also AEV’s Senior Vice President, a position he has held since 1995. He was AEV’s Senior Vice President
– Electricity Regulatory Affairs from 2004 to 2007 and Senior Vice‐President and Chief Financial Officer
from 1995 to 2004. He is Executive Vice President‐Regulatory Affairs of Davao Light & Power Company,
Inc.; Director and Senior Vice President of Visayan Electric Company, Inc.; Director of Cotabato Light &
Power Company, AEV Aviation, Inc., AP Renewables, Inc. and Union Bank of the Philippines; and Director
and Vice President of Cebu Praedia Development Corporation. He has a degree in Economics from the
Ateneo de Manila University and a master’s degree in Business Administration at The Wharton School,
University of Pennsylvania, U.S.A.
LUIS MIGUEL O. ABOITIZ

Senior Vice President ‐ Power Marketing and Trading
Mr. Luis Miguel O. Aboitiz, 47 years old, Filipino, has been AboitizPower’s Senior Vice President – Power
Marketing and Trading since 2009. He is currently AEV’s First Vice President; President and Chief
Executive Officer of Aboitiz Energy Solutions, Inc. and Adventenergy, Inc.; Director and Senior Vice
President – Business Development of Hedcor, Inc.; and Director of Aboitiz Renewables, Inc., Therma
Power, Inc., Aboitiz & Company, Inc., Pilmico Animal Nutrition Corporation, Pilmico Foods Corporation,
Manila‐Oslo Renewable Enterprise, Inc., Therma Luzon, Inc., AP Renewables, Inc., and Hedcor Sibulan,
Inc. He graduated at Santa Clara University, California, U.S.A. with a degree of Bachelor of Science in
Computer Science and Engineering and took his Masters in Business Administration from the University
of California at Berkeley, U.S.A.
GABRIEL T. MAÑALAC
Senior Vice President – Treasurer
Mr. Gabriel T. Mañalac, 55 years old, Filipino, has been Treasurer of AboitizPower since 2004 and its
Senior Vice President – Treasurer since 2009. He is the Senior Vice President ‐ Group Treasurer of AEV
since January 2009. He joined AEV as Vice President for Treasury Services/Treasurer of AEV in 1998 and
was promoted to First Vice President for Treasury Services/Treasurer of AEV in 2004. He is also the Vice
President and Treasurer of Davao Light & Power Company, Inc. and Treasurer of Cotabato Light & Power
Company. Mr. Mañalac graduated cum laude with a degree of Bachelor of Science in Finance and
Bachelor of Arts in Economics from De La Salle University. He obtained his Masters of Business
Administration in Banking and Finance from the Asian Institute of Management and was awarded the
Institute’s Scholarship for Merit.
IKER M. ABOITIZ
First Vice President/Chief Financial Officer/Corporate Information Officer
Ex‐Officio Member ‐ Board Audit Committee
Ex‐Officio Member ‐ Board Risk Management Committee

Mr. Iker M. Aboitiz, 39 years old, Filipino, has been AboitizPower’s First Vice President and Chief Financial
Officer since 2007. He is currently a Director and Chief Financial Officer of Abovant Holdings, Inc.;
Director and Chief Financial Officer and Treasurer of Hijos de F. Escaño, Inc.; Director of Cotabato Light &
Power Company, Therma Power, Inc., Aboitiz Renewables, Inc. and Union Bank of the Philippines. He
has extensive professional experience in corporate finance within and outside the Aboitiz Group. Prior to
his appointment as Chief Financial Officer, he was the Chief Financial Officer of Aboitiz Construction
Group, Inc. He graduated cum laude from Boston College with a degree in Bachelor of Science in
Business Management, Major in Finance.
RAYMOND E. CUNNINGHAM
First Vice President for Business Development
Mr. Raymond E. Cunningham, 69 years old, American, has been AboitizPower’s First Vice President –
Business Development since 2009. He has extensive experience in the power industry in the Philippines
and the US, especially in power project planning, regulatory approvals, financing, design, construction and
operations. He was previously the Business Development, Acquisitions and Special Projects Manager of
CalEnergy International Services, Senior Vice President and Project Director of San Roque Power
Corporation, Vice President of AT&T Capital Corporation and Vice President for Engineering & Operations
of Consolidated Power Company. He earned his Bachelor of Science in Engineering degree from the US
Coast Guard Academy. He also earned a Naval Engineer’s degree and a Masters of Science in Mechanical
Engineering from the Massachusetts Institute of Technology.
MANUEL R. LOZANO
First Vice President/Chief Financial Officer ‐ Power Generation Group
Mr. Manuel R. Lozano, 41 years old, Filipino, has been Chief Financial Officer of the Power Generation
Group of AboitizPower since 2009. He is currently the Director and Chief Financial Officer of Hedcor, Inc.
and Hedcor Sibulan, Inc. He is concurrently Chief Financial Officer/Treasurer of AP Renewables, Inc. and
Therma Luzon, Inc. He is Director and Treasurer of Therma Marine, Inc. He was the Chief Financial
Officer and Director of Paxys, Inc., a PSE‐listed company focused on the BPO industry and other IT‐
related sectors within the Asia Pacific region, before he joined the Aboitiz Group. He has a wide range of
experience working in several financial institutions. He earned his Bachelor of Science in Business
Administration from the University of the Philippines Diliman and his MBA from The Wharton School of
the University of Pennsylvania.
MANUEL M. ORIG
First Vice President ‐ Mindanao Affairs
Mr. Manuel M. Orig, 70 years old, Filipino, was appointed First Vice President for Mindanao Affairs of
AboitizPower in 2010. He has been with the Aboitiz Group for over 40 years, most of it with
AboitizPower’s subsidiary Davao Light & Power Company, Inc. He was Executive Vice President of Davao
Light & Power Company, Inc. prior to his appointment in AboitizPower. He was instrumental in
transforming Davao Light & Power Company, Inc. into a professional and customer‐ oriented
organization. In 2004, he was awarded the Don Ramon Aboitiz Award of Excellence, the highest

recognition bestowed on Aboitiz Group team members and team leaders, for his outstanding
contribution to the Aboitiz Group. He finished his bachelor’s degree in Commerce from the Colegio de
San Jose ‐ Recoletos and had his Masters in Business Administration from the University of the
Philippines.
MA. CHONA Y. TIU

Vice President and Chief Financial Officer ‐ Power Distribution Group
Ms. Ma. Chona Y. Tiu, 54 years old, Filipino, has been Vice‐President and Chief Financial Officer for the
Power Distribution Group since 2009. She joined the Aboitiz Group in 1977 as Research Assistant of the
Corporate Staff Department of ACO. She rose from the ranks and held various finance positions in
different companies within the Aboitiz Group, including Aboitiz Construction Group, Inc. and Aboitiz
Land, Inc. She joined the AboitizPower Group when she was appointed as Vice President –
Administration and Chief Finance Officer of AboitizPower’s affiliate, Visayan Electric Company, Inc. in
2007. She is also a Director, Vice President/Chief Financial Officer/Treasurer of Balamban Enerzone
Corporation; Vice President – Chief Financial Officer of Cotabato Light & Power Company, Davao Light &
Power Company, Inc., Subic Enerzone Corporation and Mactan Enerzone Corporation.
.
ALVIN S. ARCO
Vice President ‐ Regulatory Affairs
Mr. Alvin S. Arco, 51 years old, Filipino, has been Vice President for Regulatory Affairs of AboitizPower
since April 2007. He was Accounting Manager of AboitizPower from 1998 to 1999, Assistant Vice
President – Finance from 2000 to 2004 and was promoted to Vice President – Finance in 2005. He is also
the Vice President – Regulatory Affairs of Davao Light & Power Company, Inc. and Vice President –
Finance of Cotabato Light & Power Company. Mr. Arco is a Certified Public Accountant. He holds a
degree in Accountancy from the University of San Jose‐Recoletos, Cebu City.
WILFREDO R. BACAREZA, JR.

Vice President ‐ Project Development
Mr. Wilfredo R. Bacareza, Jr., 34 years old, Filipino, has been Vice President of AboitizPower since 2008.
Since joining AboitizPower, he has handled or been involved in numerous projects like the 300 MW coal‐
fired power plant project in Subic Bay, Philippines, acquisition of two 100 MW power barges located in
Mindanao and the 700 MW IPPA contract for the Pagbilao coal plant. He was formerly the President and
Chief Executive Officer of the Philippine National Oil Company ‐ Development Management Corporation
(PNOC‐DMC) from 2006 to 2007. In 2005, he served as legal adviser of the Philippine National
Construction Corporation (PNCC) and Metropolitan Waterworks and Sewerage System (MWSS). He was
also a Government Corporate Attorney II in the Office of the Government Corporate Counsel from 2004
to 2005 and Legal Consultant of National Power Corporation from 2003 to 2004. He holds a degree in
Interdisciplinary Studies, Minor in Management and Economics from the Ateneo de Manila University
and is a graduate of the Ateneo Law School with a degree of Juris Doctor.
.

RAUL C. LUCERO
Vice President for Engineering ‐ Power Distribution Group
Mr. Raul C. Lucero, 44 years old, Filipino, has been Vice President for Engineering ‐ Power Distribution
Group of AboitizPower since 2009. He joined the Aboitiz Group in 1990 via Davao Light & Power
Company, Inc. He became Vice President for Engineering of Davao Light & Power Company, Inc. in 2000.
He was involved in the successful bid by AEV for the management of Subic Bay Metropolitan Authority’s
distribution system in the Subic Bay Freeport Zone in 2003. He was promoted to Senior Vice President
of Davao Light & Power Company, Inc. in 2004. In the same year, he was brought into Visayan Electric
Company, Inc., to help transform its engineering group. He was officially transferred to Visayan Electric
Company, Inc. in 2008. He is a graduate of Bachelor of Science in Electrical Engineering and Bachelor of
Science in Electronics and Communications Engineering from the University of San Jose‐Recoletos.
ANASTACIO D. CUBOS, JR.

Vice President for Special Projects
Mr. Anastacio D. Cubos, Jr., 61 years old, Filipino, has been Vice President for Special Projects of
AboitizPower since 1998. Mr. Cubos’ experience in the power industry dates back to 1972 when he joined
Davao Light & Power Company, Inc. as an engineer. Between 1989 and 1997, he was Assistant Vice
President – Engineering of Davao Light & Power Company, Inc. He was also Davao Light & Power
Company, Inc.’s Vice President – Engineering from 1998 to 2000 and its Senior Vice President – Special
Projects since 2001. He is a Consultant of Hedcor and is a member of the Technical Executive Committee
of Cotabato Light & Power Company. He is a consultant to the Republic of Palau for its generation
projects. He holds a degree in electrical engineering from the Cebu Institute of Technology and a
master’s degree in Business Administration from the Ateneo de Davao University.
THOMAS J. SLIMAN, JR.

Vice President for Business Development
Mr. Thomas J. Sliman, Jr., 52 years old, American, has been Vice President for Business Development of
AboitizPower since 2010. He has extensive experience in the power industry, both in the Philippines and
in the USA. After working for 20 years in the USA for the Southern Company in various operations and
maintenance roles in thermal power plants, he relocated to the Philippines to work with Mirant
Philippines, and was initially assigned at the Pagbilao and Sual plants as plant manager. He was the EVP
‐ Operations for Mirant Philippines until its sale in 2007. He previously worked with AboitizPower in 2009
as consultant during AboitizPower’s submission of bid proposals to be the IPP Administrator of the
Pagbilao and Sual Coal Fired Power Plants. He earned his degree in BS Electrical Engineering from
Mississippi State University in 1983. He had completed approximately 75% of the required coursework
for a Masters of Business Administration degree from the University of Southern Mississippi, Long
Beach, Mississippi.
WILLIAM L. RUCCIUS
Vice President for Business Development
Mr. William L. Ruccius, 60 years old, American, was appointed as Vice President for Business
Development of AboitizPower in June 2011. He has over 15 years experience throughout Asia in the

energy business and was President and Chief Executive Officer of AES Orient in Hong Kong from 1998 to
2003. Before joining AboitizPower, Mr. Ruccius was the Managing Director of Asia Energy Products. Mr.
Ruccius earned his degree in Bachelor of Science in Chemical Engineering from Lehigh University and his
Masters of Business Administration from the University of Houston.
KENTON E. HEUERTZ
Vice President for Asset Management ‐ Power Generation Group
Mr. Kenton E. Heuertz, 55 years old, American, was appointed as Vice President for Asset Management
‐ Power Generation Group of AboitizPower in February 2012. He has extensive experience in developing,
implementing and administering natural gas pipeline safety, loss control, environmental, damage
prevention and risk management programs acquired from working with natural gas pipeline companies
and electric power generation, transmission and distribution companies in the USA. Before joining
AboitizPower, Mr. Heuertz was previously the Project Manager – Gas Engineering and Director, Risk and
Insurance Management of MidAmerican Energy Holdings Company. He is a graduate of Bachelor of Arts
and Sciences in Business Administration from William Penn University, Oskaloosa, Iowa, USA. He holds
numerous certificates from Texas A&M University and University of Texas ‐ Austin Petroleum Extension
Services, University of Nebraska – Lincoln, NE College of Mechanical Engineering, and from Central
Community College – Hastings, NE Computer Sciences. He is a member of the American Society of
Safety Engineers.
ROLAND U. GAERLAN
Vice President for Marketing
Mr. Roland U. Gaerlan, 49 years old, Filipino, has been Vice President for Marketing of AboitizPower
since 2010. He has extensive Sales and Marketing experience and expertise from a diverse number of
industries including fast moving consumer goods, mobile telecommunications, financial services and
business process outsourcing (BPO). Before joining Aboitiz Power, he served as Vice President ‐
Business Development for a leading Philippine contact center and was marketing to clients in the USA,
United Kingdom, India, South East Asia and the Middle East. Mr. Gaerlan is a graduate of Bachelor of
Science in Industrial Engineering from the University of the Philippines and obtained his Masters Degree
in Business Administration from the Ateneo de Manila University.
BIENAMER D. GARCIA
Vice President ‐ Distribution Customer Services
Mr. Bienamer D. Garcia, 52 years old, Filipino, has been Vice President for Distribution Customer Services
of AboitizPower since January 2011. He joined the Aboitiz Group in 2002 as an Assistant to the Chief
Operating Officer and Senior Vice President of Davao Light & Power Company, Inc. In 2004, he was
brought to Visayan Electric Company, Inc. to help transform its customer services group. He then
became the Vice President of Administration and Customer Services Group of Visayan Electric Company,
Inc. from 2004 to 2006. He was the Vice President for Retail Services and Administration of Davao Light
& Power Company, Inc. prior to his appointment in AboitizPower. Mr. Garcia is a registered Metallurgical
Engineer. He earned his masters degree in Business Administration and diploma in School of Urban and
Regional Planning from the University of the Philippines‐ Diliman.

CRISTINA BRIONES‐ BELORIA
Assistant Vice President ‐ Controller
Ms. Cristina Briones‐Beloria, 49 years old, Filipino, has been Assistant Vice President and Controller of
AboitizPower since 2008. She was the Plant Controller of East Asia Utilities Corporation and Cebu Private
Power Corporation from 2000 ‐ 2008. She held various consulting engagements in Tokyo, Japan from
1999 ‐ 2000. She also served as Senior Auditor in the E.C. Ortiz and Co., CPAs in Chicago, Illinois, USA.
Ms. Beloria holds a degree in Bachelor of Science in Commerce, Major in Accounting from the University
of San Jose Recoletos. She is a Certified Public Accountant in the Philippines and in Illinois, USA.
PAQUITA S. TIGUE‐ RAFOLS

Assistant Vice President for Accounting ‐ Power Generation (Mindanao)
Ms. Paquita S. Tigue‐Rafols, 46 years old, Filipino, was appointed Assistant Vice President for Accounting
‐ Power Generation (Mindanao) in 2009. She joined the Aboitiz Group as Finance and Accounting
Manager of the Aboitiz shipbuilding company, FBMA Marine, Inc. She was Assistant Vice President ‐
Finance and Controller of FBMA Marine, Inc. prior to her appointment in AboitizPower. She was also
connected with Trans‐Asia Shipping Lines, Inc. and Price Waterhouse/Joaquin Cunanan & Co. before she
joined the Aboitiz Group. Ms. Rafols is a Certified Public Accountant. She holds degrees in Bachelor of
Science in Commerce, Major in Accounting from St. Theresa’s College (Magna Cum Laude) and Bachelor
of Laws from the University of San Carlos.
ARAZELI L. MALAPAD
Assistant Vice President for Accounting ‐ Power Generation (Luzon)
Ms. Arazeli L. Malapad, 43 years old, Filipino, was appointed Assistant Vice President ‐ Accounting Power
Generation (Luzon) in 2010. She has 21 years of extensive experience performing finance, external audit
and accounting managerial functions in various private companies. She is a Certified Public Accountant
and a member of the Philippine Institute of Certified Public Accountants. She earned her Bachelor of
Science in Commerce (Major in Accounting) from Immaculate Conception College.
CARLOS COPERNICUS S. PAYOT

Assistant Vice President & Controller ‐ Power Distribution Group
Mr. Carlos Copernicus S. Payot, 47 years old, Filipino, a Certified Public Accountant, was appointed
Assistant Vice President & Controller for AboitizPower Distribution in July 2009. Prior to his
appointment, he served in various positions in the Aboitiz Group. He was Assistant Vice President for
Accounting of Visayan Electric Company, Inc., AVP – Accounting Services of AEV, and Audit Manager of
Aboitiz & Company, Inc. He worked with SGV & Co. after graduating from University of San Carlos
where he earned his Bachelor’s degree in Commerce, Major in Accounting (Cum Laude).
CLOVIS B. RACHO
Assistant Vice President for Procurement and Logistics ‐ Power Distribution Group
Mr. Clovis B. Racho, 47 years old, Filipino, has been Assistant Vice President for Procurement and Logistics ‐
AboitizPower Distribution Group since 2009. He joined the Aboitiz Group in 1989 as Assistant Systems Analyst

of Davao Light & Power Company, Inc., where he subsequently held various positions until his promotion as
Department Manager of Technical Services Department in 2000. He was promoted as Assistant Vice President
for Procurement and Logistics of Davao Light & Power Company, Inc. in 2004. He is the 2011 Gawad Sinop
Supply Management Practitioner of the Year. He is a graduate of Bachelor of Science in Industrial Engineering
and Bachelor of Science in Mechanical Engineering from Cebu Institute of Technology University. He is a
Registered Mechanical Engineer.
ALADINO B. BORJA, JR.

Assistant Vice President for Information Services ‐ Power Distribution Group
Mr. Aladino B. Borja, Jr., 49 years old, Filipino, has been Assistant Vice President for Information Services
‐ Power Distribution Group since 2009. He started his career with the Aboitiz Group when he was hired as
Computer Programmer of Davao Computer Services, Inc., an affiliate of Davao Light & Power Company,
Inc., in 1997. He later joined Davao Light & Power Company, Inc. in 1990 as Junior Programmer where he
rose from the ranks, becoming Head of Information Service Group in 2000. He was later assigned to
Visayan Electric Company, Inc. as Assistant Vice President for Information Service Group in 2004. He
graduated from Cebu Institute of Technology University.
RONALD ENRICO V. ABAD

Assistant Vice President ‐ Project Development
Mr. Ronald Enrico V. Abad, 41 years old, Filipino, has been Assistant Vice President ‐ Project
Development since 2009. He was Manager of Team Energy Corporation prior to joining AboitizPower.
He was also Manager of ABB, handling sales, marketing and project management. He is a graduate of
Bachelor of Science in Electrical Engineering from the University of Sto. Tomas.
MA. KRISTINA C.V. RIVERA

Assistant Vice President for Human Resource and Quality ‐ Power Generation Group
Ms. Ma. Kristina C.V. Rivera, 41 years old, Filipino, has been Assistant Vice President for Human Resource and
Quality ‐ Power Generation Group of AEV seconded to AboitizPower since January 2009. She has 17 years
experience in human resources management with a diverse background in human resource strategic planning,
implementation and administration. Before joining the Aboitiz Group in 2003, she was with the PNOC‐ Energy
Development Corporation. She holds Bachelor of Science and Masters degrees in Psychology from the
University of the Philippines.
ROBERTO V. OROZCO
Assistant Vice President ‐ Civil Site Construction
Mr. Roberto V. Orozco, 47 years old, Filipino, joined AboitizPower on January 2011 as Assistant Vice
President for Civil Site Construction. Prior to joining AboitizPower, he was a Senior Civil and Structural
Engineer of PacificTech Solutions and a Technical Operations Manager of the Philippine Branch of Ove
Arup & Partners Hong Kong Ltd. Mr. Orozco is a member of the Philippine Institute of Civil Engineers
and the American Institute of Steel Construction. He is a graduate of Bachelor of Science in Civil
Engineering from Far Eastern University and obtained his Masters Degree in Geotechnical Engineering
from Mapua Institute of Technology. To date, he has over 26 years of experience in civil, structural and
foundation engineering both locally and internationally. He has been involved in various projects such as

power plants, industrial plants, gas distribution lines, refinery and petrochemical plants, oil and gas
facilities, airport facilities, high‐rise buildings, roads, highway and railway infrastructures, environmental
structures, and land development. His expertise are in the field of technical engineering, construction
management and engineering services, construction supervision, quality assurance, research and
development.
ANA LIZA M. ALETA

Assistant Vice President & IT Director ‐ Power Generation Group
Ms. Ana Liza M. Aleta, 43 years old, Filipino, has been Assistant Vice President & IT Director ‐ Power
Generation Group of AboitizPower since 2009. She joined the Aboitiz Group in 1989 as a marketing
assistant of Aboitiz & Company, Inc. She rose from the ranks and held various positions relating to
information technology in Pilmico Foods Corporation. She was Assistant Vice President ‐ Information
Technology of AP Renewables, Inc., before she joined AboitizPower. She has 22 years of experience in
information infrastructure and systems management with diverse background in Corporate and IT
strategic planning, domestic operations, implementation, project management and technical marketing.
She is a graduate of Bachelor of Science in Electronics & Communication Engineering from the University
of San Carlos and earned her degree in Master in Management from the University of the Philippines.
.
CRISANTO R. LASET, JR.
Assistant Vice President for Power Economics & Distribution System Planning
Mr. Crisanto R. Laset, Jr., 53 years old, Filipino, has been Assistant Vice President for Power Economics &
Distribution System Planning since 2009. He was Assistant Vice President ‐ Technical Assistant to the
Chairman of Cagayan Electric Power & Light Company, Inc., before he joined AboitizPower. He was also
previously connected with ATOM Industrial Sales as Technical Assistant to the President. Mr. Laset is a
graduate of Bachelor of Science in Electrical Engineering from Mapua Institute of Technology and has
units in MS Electrical Engineering from the University of the Philippines.
JUAN MANUEL J. GATMAITAN

Assistant Vice President ‐ Power Marketing
Mr. Juan Manuel J. Gatmaitan, 40 years old, Filipino, joined AboitizPower in 2007 and has been Assistant
Vice President for Power Marketing since 2010. He was the Assistant Vice President for Power Sales and
Marketing of AP Renewables, Inc. prior to his appointment in AboitizPower. He earned his degree in AB
Management Economics from the Ateneo de Manila University and had his Master of Business
Administration in General Management from the Rotterdam School of Management, Erasmus
University, Rotterdam, The Netherlands.
SUSAN S. POLICARPIO
Assistant Vice President –Government Relations
Ms. Susan S. Policarpio, 55 years old, has been AboitizPower’s Assistant Vice President for Government
Relations since 2009. Prior to her stint in AboitizPower, she was Assistant Vice President for Government
Relations of ATS Consolidated, Inc. (ATSC) (formerly Aboitiz Transport System (ATSC) Corporation)
since 2003. She was also Executive Director of Domestic Shipping Association from 2001 to 2003, and

Executive Director of the Honorary Investments and Trade Representatives of the Department of Trade
and Industry from 1998 to 2001. She is currently a member of the Philippine Chamber of Commerce and
Industry. She is a graduate of Bachelor of Arts in Communication from St. Paul College.
IRWIN C. PAGDALIAN
Assistant Vice President for Special Projects ‐ AP Distribution
Mr. Irwin C. Pagdalian, 54 years old, Filipino, was appointed Assistant Vice President for Special Projects ‐
AP Distribution on June 2011. He joined the Aboitiz Group in 1980 as a staff engineer of Davao Light &
Power Company, Inc., where he rose from the ranks and eventually co‐led Davao Light & Power
Company, Inc.’s Engineering Group. He also served as the Assistant Vice President for Power Systems
Design of Visayan Electric Company, Inc. Prior to his appointment in AboitizPower, he was the Assistant
Vice President/General Manager of Mactan Enerzone Corporation and Balamban Enerzone Corporation.
Mr. Pagdalian is a licensed engineer and a life member of the Institute of Integrated Electrical Engineers.
He has a degree in Bachelor of Science in Electrical Engineering from Cebu Institute of Technology
University and studied Management Programs at the Asian Institute of Management.
M. CARMELA N. FRANCO
Assistant Vice President ‐ Investor Relations
Ms. M. Carmela N. Franco, 40 years old, Filipino, has been AboitizPower’s Assistant Vice President for
Investor Relations since 2008. She is also Assistant Vice President for Investor Relations of AEV. Ms.
Franco’s professional experience in investment analysis and corporate finance includes working with
various corporations in different capacities prior to her stint in AboitizPower. She was previously a
Trader, Associate and Credit Analyst of Capital One Equities Corporation & Multinational Investment
Bancorporation from 1992 to 1994 and was formerly an Investment Analyst of ING Barings (Phils), Inc.
ATR Kim Eng Securities (Phils), Inc. from 1994 to 1997. She also served as Investment Officer of
Standard Chartered Bank from 1998 to 2000 and went on to serve as Project Analyst of Newgate
Management, Inc., from 2000 to August 2002. Immediately prior to her stint with AboitizPower, she was
connected with San Miguel Corporation as Investor Relations Officer of its Corporate Finance Group and
later as Senior Project Analyst of its Corporate Planning Group. She holds a degree in Bachelor of Science
in Business Economics (Cum Laude) from the University of the Philippines.
KATRINA M. PLATON
Assistant Vice President ‐ Legal and Regulatory Affairs
Ms. Katrina M. Platon, 45 years old, Filipino, has been Assistant Vice President for Legal and Regulatory
Affairs of AboitizPower since 2009. She was Senior Associate General Counsel of AEV before she moved
to AboitizPower in May 2007. Prior to joining the Aboitiz Group, she served as Corporate Legal Manager
of the regional headquarters of e‐Room Corporation and Associate Legal Officer at the United Nations
Compensation Commission in Geneva, Switzerland. She started her law practice as an associate of the
Ponce Enrile Reyes & Manalastas Law Offices where she specialized in corporate law. She finished her
bachelor’s degree in Business Administration from the University of the Philippines, and is a graduate of
the Ateneo de Manila University ‐ School of Law. She took her LL. M. in Banking and Finance Law from
the Boston University ‐ School of Law in Boston, Massachusetts, USA.

DENNIS DE LA SERNA
Assistant Vice President ‐ Regulatory Affairs
Mr. Dennis de la Serna, 38 years old, Filipino, has been Assistant Vice President ‐ Regulatory Affairs since
2010. He was Contracts Manager for Aboitiz Energy Solutions, Inc. before joining AboitizPower. He was
also Department Manager of the Universal Levy, Tariff and Financial Valuation Department of the Power
Sector Assets and Liabilities Management Corporation. He earned his degree in Bachelor of Arts in
Management Economics from Ateneo de Manila University, and obtained his MBA from Fordham
University.
NESTOR F. ALIMAN
Assistant Vice President ‐ Business Development
Mr. Nestor F. Aliman, 59 years old, Filipino, has been Assistant Vice President ‐ Business Development
since 2010. He organized and headed the Electricity Trading of SN Aboitiz Power‐ Magat, Inc. (formerly
SN Aboitiz Power, Inc.). Prior to that, he was the Electricity Trading Manager of Power Sector Assets and
Liabilities Management Corporation and initial member of Philippine Electricity Market Corporation’s
Rules Change Committee. He earned his degree in Mechanical Engineering from the University of San
Carlos, and finished his Master in Management degree from the Asian Institute of Management. He also
took graduate studies in Industrial Engineering and Operations Research from the University of the
Philippines.
SOCORRO L. PATINDOL
Assistant Vice President for Environmetal Management ‐ Power Generation Group
Ms. Socorro L. Patindol, 52 years old, Filipino, was appointed Assistant Vice President for Environmental
Management – Power Generation Group last January 2012. Ms. Patindol joined the Aboitiz Group as
Assistant Vice President for Environmental, Health and Safety of AP Renewables, Inc. She gained
extensive experience in environmental policy and planning when she worked for various companies all
over the Philippines and across Asia, including the Asian Development Bank and the World Bank. Ms.
Patindol is a graduate of Bachelor of Science in Human Ecology from the University of the Philippines,
Los Baños, and earned her Master of Science in Environmental Studies from the same school. She also
holds a masters degree in Environmental Resource Management from the University College Dublin ‐
National University of Ireland, Dublin and doctorate degree in Environmental Science from the University
of the Philippines, Diliman.
MARIA P. GARCIA
Assistant Vice President – Trading
Ms. Maria P. Garcia, 56 years old, Filipino, has been Assistant Vice President ‐ Trading since 2010. She
was Trading Manager of Emerald Energy Corporation, a subsidiary company of GDF ‐ Suez in the
Philippines. She was also Electricity Trading Manager of Power Sector Assets and Liabilities
Management Corporation. She earned her degree in Bachelor of Science in Electrical Engineering from
the Nueva Ecija University of Science and Technology. She has a Masters Degree in Engineering Major
in Systems Management from the Pamantasan ng Lungsod ng Maynila.

KATRINA MICHAELA D. CALLEJA
Assistant Vice President ‐ Branding
Ms. Katrina Michaela D. Calleja, 34 years old, Filipino, has been Assistant Vice President ‐ Branding since
January 2011. She joined the Aboitiz Group in 2001, where she was Superferry’s Marketing Executive for
four years. She served as Retail Sales and Brand Manager of 2GO Express from 2005 to 2009. Before her
current post, she was AboitizPower’s Brand Manager until 2010. Ms. Calleja graduated from Ateneo de
Manila University, with a Bachelor of Arts degree, Major in Economics.
MA. CIELITA C. AÑIGA

Assistant Vice President for Human Resources ‐ Power Distribution Group
Ms. Ma. Cielita C. Añiga, 55 years old, Filipino, has been Assistant Vice President for Human Resources ‐
Power Distribution Group since January 2011. She joined the Aboitiz Group in 1993 as Total Quality
Management Coordinator of Davao Light & Power Company, Inc. In 1994 she was named Department
Manager for Quality and Human Resource Development and was eventually promoted as Assistant Vice‐
President, a position she held until 2000. She rejoined the Aboitiz Group in 2004 as part of the
management team that was tasked to manage and transform Visayan Electric Company, Inc. She was
Assistant Vice ‐ President for Human Resources of Visayan Electric Company, Inc. prior to her
appointment in AboitizPower. Ms. Añiga holds Bachelor of Science degrees in Chemical Engineering
from the University of Mindanao, and Metallurgical Engineering from a consortium between the
University of the Philippines and the Mindanao State University. She also has a Masters in Management
degree, Major in Industrial Relations from the University of the Philippines.
MA. CYNTHIA C. HERNANDEZ

Assistant Vice President – Finance
Ms. Cynthia C. Hernandez, 37 years old, Filipino, was appointed as Assistant Vice President ‐ Finance of
AboitizPower in February 2012. She was previously connected with AES Philippines as Financial Planning
and Analysis Manager and with Ernst and Young Transaction Advisory Services, Inc., as Project
Finance/Mergers and Acquisitions Director, prior to joining AboitizPower. She also worked for various
companies where she gained extensive experience in financial planning and analysis, mergers and
acquisitions and corporate finance, with specialization in the field of energy and utilities. She earned her
Bachelor of Science in Metallurgical Engineering from the University of the Philippines, College of
Engineering, and is a licensed Professional Metallurgical Engineer. She also holds a Masters Degree in
Development Economics from the University of the Philippines, School of Economics.
M. JASMINE S. OPORTO
Corporate Secretary and Compliance Officer; Ex‐Officio Member ‐ Board Corporate Governance
Committee
Ms. M. Jasmine S. Oporto, 52 years old, Filipino, has been the Corporate Secretary of AboitizPower since
2007. She is also the First Vice President ‐ Chief Legal Officer, Corporate Secretary and Chief Compliance
Officer of AEV. She is Vice President for Legal Affairs of Davao Light & Power Company, Inc.; the
Corporate Secretary of Visayan Electric Company, Inc., Luzon Hydro Corporation and Hijos de F. Escaño,

Inc. Prior to joining AboitizPower, she worked in various capacities with the Hong Kong office of Kelley
Drye & Warren, LLP, a New York‐based law firm and the Singapore‐based consulting firm, Albi
Consulting Pte. Ltd. A member of both the Philippine and New York bars, she obtained her Bachelor of
Laws from the University of the Philippines.
JOSEPH TRILLANA T. GONZALES

Assistant Corporate Secretary
Mr. Joseph Trillana T. Gonzales, 45 years old, Filipino, has been the Assistant Corporate Secretary of
AboitizPower since 2007. He is also Vice President for Legal and Corporate Services of AEV and
Corporate Secretary of AP Renewables, Inc. He was previously Special Counsel of SyCip Salazar
Hernandez & Gatmaitan Law Offices until he joined the Aboitiz Group in 2007 as Assistant Vice President
of the Corporate and Legal Services of Aboitiz & Company, Inc. He is a graduate of Bachelor of Arts,
Major in Economics and Bachelor of Laws from the University of the Philippines. He also has a Master of
Laws degree from the University of Michigan.
Period in which the Directors and Executive Officers Should Serve
The directors and executive officers should serve for a period of one year.
Term of Office of a Director
Pursuant to the Amended By‐laws of AboitizPower, the directors are elected at each annual
stockholders’ meeting by stockholders entitled to vote. Each director holds office until the next annual
election for a term of one year and until his successor is duly elected, unless he resigns, dies or is removed
prior to such election.
Any vacancy in the Board of Directors other than by removal or expiration of term may be filled by a
majority vote of the remaining members thereof at a meeting called for that purpose, if they still
constitute a quorum. The director so chosen shall serve for the unexpired term of his predecessor in
office.
Significant Employees
AboitizPower considers the contribution of every employee important to the fulfillment of its goals.
Family Relationships
Messrs. Jaime Jose Y. Aboitiz and Luis Miguel O. Aboitiz are first cousins. Messrs. Jon Ramon Aboitiz and
Mikel A. Aboitiz are brothers. Messrs. Erramon I. Aboitiz, Enrique M. Aboitiz, Jr. and Iker M. Aboitiz are
brothers as well. Messrs. Jon Ramon Aboitiz and Mikel A. Aboitiz are second cousins of Messrs. Erramon
I. Aboitiz, Enrique M. Aboitiz, Jr., Iker M. Aboitiz, Jaime Jose Y. Aboitiz and Luis Miguel O. Aboitiz.
.

Involvement in Certain Legal Proceedings as of March 30, 2012
People of the Philippines vs. Renato Francisco et. al.

(c/o Fuller O’ Brien Paint Company, Inc., Reliance St., Mandaluyong City)
Criminal Case No. 35‐5784
MTC Branch 66, Makati City
July 19, 2007
On July 23, 2008, the Metropolitan Trial Court (MTC) of Makati issued an Order finding probable cause to
hold the alleged directors/stockholders of Fuller O’Brien Paint Company, Inc. (Fuller O’Brien), including
Erramon I. Aboitiz, liable for violation of PD No. 1752 or the Pag‐Ibig Fund Law, as amended.
Upon motion by Mr. Aboitiz, the MTC reconsidered its order finding probable cause against him. The
MTC also directed the Office of the City Prosecutor (City Prosecutor) of Makati to conduct a preliminary
investigation against Mr. Aboitiz.
In the preliminary investigation, Mr. Aboitiz explained that he should be exonerated from the charges
filed against him as he was no longer a director of Fuller O’Brien when the alleged violations of the Pag‐
Ibig Fund Law occurred.
In a Resolution dated August 23, 2010, the City Prosecutor dismissed the case against Mr. Aboitiz (and
three other respondents) for lack of probable cause. The City Prosecutor, however, ordered the filing of a
criminal case against the five remaining respondents.
Renato Francisco and Ramon Mapa, who were among the five remaining respondents criminally
charged, filed a motion with the City Prosecutor to reconsider the charges against them. Finding no
compelling reason to warrant the reconsideration, the City Prosecutor issued an Order dated January 7,
2011 denying the motion of Messrs. Francisco and Mapa, and ordering the filing of the information
against them with the MTC.
To the knowledge and/or information of AboitizPower, other than as disclosed above, none of its
nominees for election as directors, its present members of the Board of Directors or its executive officers,
is presently or during the last five years, involved in any legal proceeding or bankruptcy petition or has
been convicted by final judgment, or being subject to any order, judgment or decree or violated the
securities or commodities law in any court or government agency in the Philippines or elsewhere, for the
past five years and the preceding years until March 30, 2012, which would put to question their ability and
integrity to serve AboitizPower and its stockholders.
To the knowledge and/or information of AboitizPower, the above‐said persons have not been convicted
by final judgment of any offense punishable by the laws of the Republic of the Philippines or by the laws
of any other nation or country.

Resignation or Refusal to Stand for Re‐election by Members of the Board of Directors
No director has resigned or declined to stand for re‐election to the Board of Directors since the date of
AboitizPower’s last annual meeting because of a disagreement with AboitizPower on matters relating to
its operations, policies and practices.
.Item 10. Executive Compensation
(1) Summary of Compensation of Executive Officers
Information as to the aggregate compensation paid or accrued to AboitizPower’s Chief Executive Officer
and other highly compensated executive officers, as well as other officers and directors during the last
two completed fiscal years and the ensuing fiscal year are as follows:
OTHER ANNUAL
NAME AND PRINCIPAL POSITION PERIOD/YEAR SALARY BONUS
COMPENSATION
TOP FIVE HIGHLY‐COMPENSATED EXECUTIVES:
1. ERRAMON I. ABOITIZ
‐ Director/President & Chief Executive Officer
2. ANTONIO R. MORAZA
‐ Director/Executive Vice President and Chief
Operating Officer‐Power Generation Group
3. JAIME JOSE Y. ABOITIZ
‐ Director/Executive Vice President and Chief
Operating Officer ‐ Power Distribution Group
4. RAYMOND E. CUNNINGHAM
‐ First Vice President – Business Development
5. THOMAS J. SLIMAN, JR.
‐ Vice President ‐ Business Development
Actual 2011 P 30,650,000 P 1,400,,000 P 8,150,000

All above‐named officers as a group Actual 2010 P 23,950,000 P 770,000 P 5,450,000
Projected 2012 P 32,790,000 P 1,500,000 P 8,280,000
Actual 2011 P 75,490,000 P 4,150,000 P 21,640,000
All other directors and officers as a
group unnamed Actual 2010 P 31,790,000 P 2,350,000 P 14,290,000
Projected 2012 P 80,780,000 P 4,440,000 P 22,110,000
(2) Compensation of Directors
(i) Standard Arrangements
In 2011, all of AboitizPower’s directors received a monthly allowance of P100,000 except for the
Chairman of the Board who received a monthly allowance of P150,000. In addition, each director and the

Chairmen of the Board and the Board Committees received a per diem for every Board or Committee
meeting attended as follows:
Type of Meeting Directors Chairman of the Board

Board Meeting P100,000 P150,000
Type of Meeting Committee Members Chairman of the Committee

Committee Meeting P80,000 P100,000
(ii) Other Arrangements
Other than payment of a director’s allowance and per diem as stated above, there are no standard
arrangements pursuant to which directors of the Company are compensated, or are to be compensated,
directly or indirectly, for any services provided as a director.
(3) Employment Contracts and Termination of Employment and Change‐in‐Control Arrangements
There is no compensatory plan or arrangement between AboitizPower and any executive in case of
resignation or any other termination of employment or from a change in the management control of
AboitizPower.
(4) Warrants and Options Outstanding
To date, AboitizPower has not granted any stock option to its directors or officers.

Item 11. Security Ownership of Certain Record and Beneficial Owners and Management
(1) Security Ownership of Certain Record and Beneficial Owners (more than 5%) as of March 30,
2012:
Title of Name, Address of Record Name of Citizenship No. of Shares Percent

Class Owner and Relationship with Beneficial
Issuer Owner and
Relationship
with Record
Owner
Common 1. Aboitiz Equity Ventures, Inc.10 Aboitiz Filipino 5,653,763,954 76.83%

Aboitiz Corporate Center Equity (Record and
Gov. Manuel A. Cuenco Ventures, Beneficial)
Avenue, Kasambagan, Cebu City Inc.11
6000
(Stockholder)
10.94%
Common 2. PCD Nominee PCD Filipino 768,959,590 10.44%

12
Corporation participants (Record)
G/F MSE Bldg. acting for
Ayala Ave., Makati City themselves of
(Stockholder) for their
customers13
8.09%
Common 3. PCD Nominee Corporation14 PCD 595,024,478
G/F MSE Bldg. participants Non‐Filipino (Record)
Ayala Ave., Makati City acting for
(Stockholder) themselves of
for their
customers15
______________________________________________________________________________
10
Mr. Erramon I. Aboitiz, President and Chief Executive Officer of Aboitiz Equity Ventures, Inc. (AEV), will vote the
shares of AEV in AboitizPower in accordance with the directive of the AEV Board of Directors.
11
AEV is the parent company of AboitizPower.
12
The PCD is not related to the Company.
13
Each beneficial owner of shares through a PCD participant is the beneficial owner of such number of shares he owns
in his account with the PCD participant. AboitizPower has no record relating to the power to decide how the shares
held by PCD are to be voted. As advised to the Company, none of the customers under a PCD participant beneficially
owns more than 5% of the Company’s common shares.
14
Supra note 12.
15
Supra note 13.

Aboitiz Equity Ventures, Inc. (AEV) is the public holding and management company of the Aboitiz Group,
one of the largest conglomerates in the Philippines. As of March 30, 2012, the following entities own five
per centum (5%) or more of AEV:
Title of Name/Address of Stockholder and Beneficial Citizenship No. of Shares and Percent of
Class Owner Nature of Ownership Class
(Record or Beneficial)
Common 1. Aboitiz & Company, Inc. Filipino 2,735, 600,915 49.54%

Aboitiz Corporate Center (Record and Beneficial)
Gov. Manuel A. Cuenco Avenue,
Kasambagan, Cebu City 6000
Common 2. PCD Nominee Corporation Filipino 915,928,680

G/F MSE Bldg. (Record) 16.59%
Ayala Ave., Makati City
Common 2. PCD Nominee Corporation Non‐Filipino 452,828,551 8.20%

G/F MSE Bldg. (Record)
Ayala Ave., Makati City
Common 3. Ramon Aboitiz Foundation, Inc. Filipino 420,915,863

35 Lopez Jaena St., Cebu City, 6000 (Record and Beneficial)
7.62%
(2) Security Ownership of Management as of March 30, 2012 (Record and Beneficial)
No. of Shares and

Title of Name of Beneficial Owner and Position Nature Citizenship Percent of
Class of Ownership (Direct or Ownership
Indirect)
Mr. Enrique M. Aboitiz, Jr.
Common Chairman of the Board of Directors 686,758 Direct Filipino 0.01%
Common Mr. Jon Ramon Aboitiz 33,001 Direct Filipino 0.00%
Vice Chairman of the Board 10,086,820 Indirect 0.14%
Common Mr. Erramon I. Aboitiz 1 Direct Filipino 0.00%
Director/President and Chief Executive Officer 18,901,446 Indirect 0.26%
Common Mr. Jaime Jose Y. Aboitiz 5,367,397 Direct Filipino 0.07%

Director/Executive Vice President and Chief
Operating Officer – Power Distribution Group
1,738,594 Indirect 0.02%
Common Mr. Mikel A. Aboitiz 1 Direct Filipino 0.00%

Director 13,283,959 Indirect 0.18%
Common Mr. Antonio R. Moraza 1 Direct Filipino 0.00%
Director/Executive Vice President and Chief

Operating Officer ‐ Power Generation Group 31,281,046 Indirect 0.42%
Common Mr. Jose R. Facundo 1,000 Direct Filipino 0.00%
Common Mr. Romeo L. Bernardo 1,000 Direct Filipino 0.00%
Common Mr. Jakob G. Disch 1,000 Direct Swiss 0.00%
Independent Director National
Common Mr. Juan Antonio E. Bernad 520,001 Direct Filipino 0.01%
Executive Vice President‐ Strategy and
121,623 Indirect 0.00%
Regulation
Common Mr. Luis Miguel O. Aboitiz 4,381,291 Direct Filipino 0.06%
Senior Vice President – Power Marketing and
Trading
Common Mr. Gabriel T. Mañalac 64,170 Direct Filipino 0.00%
Senior Vice President – Treasurer
Common Mr. Iker M. Aboitiz 5,282,519 Direct Filipino 0.07%
First Vice President/Chief Financial
Officer/Corporate Information Officer 2,007,343 Indirect 0.03%
Common Mr. Manuel R. Lozano 12,820 Direct Filipino 0.00%

First Vice President/ Chief Financial Officer ‐
Power Generation Group
Common Mr. Raymond E. Cunningham 83,995 Direct American 0.00%
First Vice President ‐ Business Development
Common Mr. Manuel M. Orig 238,738 Direct Filipino 0.00%

First Vice President ‐ Mindanao Affairs
Common Mr. Wilfredo R. Bacareza, Jr. 380,000 Direct Filipino 0.01%
Vice President ‐ Project Development
N/A Mr. Thomas J. Sliman, Jr. 0 N/A American 0.00%

Vice President – Business Development
N/A Mr. William L. Ruccius 0 N/A American 0.00%
Vice President – Business Development
Common Mr. Alvin S. Arco 8,434 Direct Filipino 0.00%
Vice President – Regulatory Affairs
N/A Mr. Kenton E. Huertz 0 N/A American 0.00%
Vice President for Asset Management – Power
Generation Group
N/A Mr. Anastacio D. Cubos, Jr. 0 N/A Filipino 0.00%
Vice President – Special Projects
Common Mr. Raul C. Lucero 118,519 Direct Filipino 0.00%
Vice President for Engineering ‐ Power
Distribution Group
Common Ms. Ma. Chona Y. Tiu 100,167 Direct Filipino 0.00%
Vice President and Chief Financial Officer ‐
Power Distribution Group
50,000 Indirect 0.00%
Common Mr. Roland U. Gaerlan 12,000 Direct Filipino 0.00%
Vice President ‐ Marketing
Common Mr. Bienamer D. Garcia 5,398 Indirect Filipino 0.00%
Vice President ‐ Distribution Customer
Services

N/A Mr. Dennis de la Serna 0 N/A Filipino 0.00%
Assistant Vice President ‐ Regulatory Affairs
Common Mr. Nestor F. Aliman 43,103 Direct Filipino 0.00%

Assistant Vice President ‐ Business
Development
N/A Ms. Maria P. Garcia 0 N/A Filipino 0.00%
Assistant Vice President ‐ Trading
Common Mr. Carlos Copernicus S. Payot 56,000 Direct Filipino 0.00%
Assistant Vice President and Controller ‐
Common Mr. Clovis B. Racho 56,034 Direct Filipino 0.00%
Assistant Vice President ‐ Procurement and
Logistics ‐Power Distribution Group
N/A Mr. Aladino B. Borja, Jr. 0 N/A Filipino 0.00%
Assistant Vice President for Information
Services ‐ Power Distribution Group
N/A Mr. Ronald Enrico V. Abad 0 N/A Filipino 0.00%
Assistant Vice President ‐ Project
Development
N/A Mr. Roberto V. Orozco 0 N/A Filipino 0.00%
Assistant Vice President ‐ Civil Site
Construction
N/A Mr. Crisanto R. Laset, Jr. 0 N/A Filipino 0.00%
Assistant Vice President ‐ Power Economics
and Distribution System Planning
Common Ms. Katrina M. Platon 26,896 Direct Filipino 0.00%
Assistant Vice President ‐ Legal and
Regulatory Affairs
Common Ms. Analiza M. Aleta 44,827 Direct Filipino 0.00%
Assistant Vice President and IT Director ‐
Common Ms. Arazeli L. Malapad 7,000 Direct Filipino 0.00%
Assistant Vice President for Accounting ‐
Power Generation Group ( Luzon)
N/A Ms. Paquita S. Tigue ‐ Rafols 0 N/A Filipino 0.00%
Assistant Vice President for Accounting ‐
Power Generation Group ( Mindanao)
N/A Ms. Ma. Kristina C.V. Rivera 0 N/A Filipino 0.00%
Assistant Vice President for Human Resources
and Quality ‐
Common Mr. Juan Manuel J. Gatmaitan 21,000 Direct Filipino 0.00%
Assistant Vice President ‐ Power Marketing
N/A Ms. Katrina Michaela D. Calleja 0 N/A Filipino 0.00%

Assistant Vice President ‐ Branding
Common Ms. Ma. Cielita C. Añiga 20,134 Direct Filipino 0.00%
Assistant Vice Presidentfor Human Resources
‐ Power Distribution Group
N/A Ms. Susan S. Policarpio 0 N/A Filipino 0.00%
Assistant Vice President ‐ Government
Relations

Common Ms. M. Carmela N. Franco 44,000 Direct Filipino 0.00%
Assistant Vice President ‐ Investor Relations
Common Ms. Cristina B. Beloria 20,000 Direct Filipino 0.00%

Assistant Vice President ‐ Controller
N/A Ms. Ma. Cynthia C. Hernandez 0 N/A Filipino 0.00%
Assistant Vice President ‐ Finance
N/A Ms. Socorro L. Patindol 0 N/A Filipino 0.00%
Assistant Vice President for Environmental
Management – Power Generation Group
Common Mr. Irwin C. Pagdalian 56,034 Direct Filipino 0.00%
Assistant Vice President for Special Projects –
Common Ms. M. Jasmine S. Oporto 86,446 Direct Filipino 0.00%
Corporate Secretary
Common Mr. Joseph Trillana T. Gonzales 62,527 Direct Filipino 0.00%
Assistant Corporate Secretary
TOTAL 95,313,043 1.30%
Voting Trust Holders of 5% or More of Common Equity
No person holds more than five per centum (5%) of AboitizPower’s common equity under a voting trust
or similar agreement.
Item 12. Certain Relationships and Related Transactions
AboitizPower and its subsidiaries and associates (the Group), in their regular conduct of business, have
entered into related party transactions consisting of professional fees, advances and rental fees. These
are made on an arm’s length basis and at the current market prices as of the time of the transactions.
The Group has existing service contracts with its parent company AEV, for corporate center services,
such as human resources, internal audit, legal, IT, treasury and corporate finance, among others. These
services are obtained from AEV to enable the Group to realize cost synergies. AEV maintains a pool of
highly qualified professionals with business expertise specific to the businesses of the Group.
Transactions are priced on a cost recovery basis. In addition, transaction costs are always benchmarked
on third party rates to ensure competitive pricing. Service Level Agreements are in place to ensure
quality of service.
AboitizPower (Parent) has also provided support services to its business units such as marketing, trading
and billing services.
The Group extends and/or avails of temporary interest‐bearing advances to and from ACO, AEV and
certain affiliates for working capital requirements. These are made to enhance the lending parent
companies’ and affiliates’ yield on their cash balances. Interest rates are determined by comparing
prevailing market rates at the time of the transaction.

AboitizPower and certain subsidiaries and associates are leasing office spaces from Cebu Praedia
Development Corporation, a subsidiary of AEV. Rental rates are comparable with prevailing market
prices. These transactions are covered with lease contracts for a period of three years.
Additional information on related party transactions is found under the section on Transactions with
and/or Dependence on Related Parties.
No other transaction, without proper disclosure, was undertaken by the Company in which any director
or executive officer, any nominee for election as director, any beneficial owner (direct or indirect) or any
member of his immediate family was involved or had a direct or indirect material interest.
AboitizPower employees are required to promptly disclose any business and family‐related transactions
with the Company to ensure that potential conflicts of interest are brought to the attention of
management.
(a) Parent Company
AboitizPower’s parent company is AEV. As of March 30, AEV owns 76.83% of

AboitizPower. In turn, Aboitiz & Company, Inc. (ACO) owns, as of March 30, 2012,
49.54 % of AEV.
(b) Resignation or Refusal to Stand for Re‐election by Members of the Board of

Directors
No director has resigned or declined to stand for re‐election to the Board of Directors
since the date of AboitizPower’s last annual meeting because of a disagreement with
AboitizPower on matters relating to its operations, policies and practices.
Item 13. Corporate Governance
AboitizPower has a Manual of Corporate Governance (the Manual) and Code of Ethics and Business
Conduct (the Code) to guide the attainment of its corporate goals and strategies. To ensure compliance,
copies of the Manual and the Code were disseminated to the Board of Directors, management and
employees of AboitizPower. Company‐wide orientations on the Manual and the Code were conducted
as well.
AboitizPower has in place a performance evaluation system for corporate governance. It also
participated, and intends to participate in, the annual Corporate Governance Scorecard Survey of the
SEC, PSE and the Institute of Corporate Directors (ICD) to benchmark its corporate governance practices
against best practices. The Compliance Officer regularly monitors and evaluates compliance by the
Board of Directors, management and employees of the Manual and existing laws and regulations.
Together with the Human Resources Department, the Compliance Officer also ensures the
implementation of AboitizPower’s rule against conflict of interests and the misuse of inside and
proprietary information throughout the organization. The Compliance Officer regularly reports to the
Board Corporate Governance Committee and the Board Audit Committee the Company’s compliance

status with existing laws and regulations, as well as the Board’s and employees’ compliance with internal
governance policies.
Corporate governance is further fostered by the Board’s active role in reviewing and approving corporate
goals and strategies set by management as well as in monitoring and evaluating management
performance in meeting such goals. The different Board committees ‐ Audit, Corporate Governance, and
Risk Management ‐ report regularly to the Board and are crucial in maintaining Board oversight in key
management areas.
There are no major deviations from the Manual as of the date of this report. The Board of Directors
regularly reviews the Manual to ensure that the same remains relevant and responsive to the needs of
the organization.

Board Attendance
The Board’s primary objectives are to improve shareholder returns, to develop responsible long‐term
investments, and achieve disciplined and sustainable growth.
In 2011, the Board held nine regular and special meetings. Below is a summary of the attendance of the
Directors:
Regular and Special Meetings 2011
DIRECTORS 24‐Jan 4‐Feb 3‐Mar 30‐Mar 16‐May 27‐July 30‐Sept 11‐Nov 9‐Dec
special regular special regular regular regular regular special regular
(executiv board
e strategy
strategy
sessions)
Enrique M. Aboitiz, P P P P P P P P P
Jr.
Jon Ramon Aboitiz P P P P P P P P P
Erramon I. Aboitiz P P P P P P P P P
Antonio R. Moraza P P P A P P P P P
Mikel A. Aboitiz P P P P P P P P P
Jaime Jose Y. P P P P P P P P P
Aboitiz
Jose R. Facundo P P P P P P P P P
(Independent
Director)
Romeo L. Bernardo P P P P P P P P P
(Independent
Director)
Jakob Disch P P P P P P P P A
(Independent
Director)
TOTAL NO. OF 9 9 9 8 9 9 9 9 8
DIRECTORS
PRESENT
PERCENTAGE NO. 100% 100% 100% 88.88% 100% 100% 100% 100% 88.88%
OF DIRECTORS
PRESENT IN EACH
MEETING
Legend: P ‐ Present A ‐ Absent

Corporate Governance Initiatives
Going beyond mere compliance and box‐ticking, the Company regularly updates its corporate
governance policies to ensure that they are relevant to the needs of the organization, and at the same
time, at par with global best practices.
In February 2009, the Board of Directors of AboitizPower approved the creation of additional board
committees and the consolidation of existing ones. In the same year, the Investor Relations Committee
was dissolved and the Board Nominations and Compensation Committee merged with the Board
Corporate Governance Committee. On May 17, 2010, the Board approved an amendment to the
Company’s Amended Manual on Corporate Governance, folding in of the responsibility of the Board
Strategy Committee under the functions of the Board of Directors. The reorganization aimed to a)
enhance the role of the Board of Directors in governance, b) better represent and protect the interests of
all stakeholders of the Company, c) ensure compliance with regulatory standards and provide
appropriate information and updates.
More recently, on February 2012, management proposed before the Board Risk Management and the
Board Corporate Governance Committees to remove the reputation oversight function of the Board from
the Board Corporate Governance Committee and fold it in the Board Risk Management Committee. This
is in line with the recognition of the Company that its reputation is its most valuable asset. Both
committees approved the proposed reorganization. To implement the reorganization, the Board Risk
Committee will revise and update its Board Risk Management Committee Charter and the Board
Corporate Governance Committee will amend the Company’s Amended Manual on Corporate
Governance for submission and approval of the Board. Upon approval by the Board, the Company will
submit for the approval of the SEC, the amendment to its Amended Manual of Corporate Governance.
The mandate as well as the composition of each Board committee are described below:
• The Board Corporate Governance Committee shall represent the Board in discharging its
responsibility relating to issues around the Group’s governance principles and guidelines,
nomination of persons into Board and Group senior leadership roles and the various
compensation matters. Independent Directors comprise majority of the voting members of
the Board Corporate Governance Committee.
Chairman: Jon Ramon Aboitiz; Members: Erramon I. Aboitiz, Jose R. Facundo, Romeo
L. Bernardo, Jakob G. Disch; Ex‐Officio Members: M. Jasmine S. Oporto, Susan V. Valdez,
Xavier Jose Aboitiz
• The Board Audit Committee shall represent the Board in discharging its responsibility
related to audit matters for the Group. Independent Directors comprise majority of the
voting members of the Board Audit Committee.
Chairman: Jose R. Facundo; Members: Romeo L. Bernardo, Jakob G. Disch, Mikel A. Aboitiz,
Jaime Jose Y. Aboitiz; Ex‐Officio Members: Iker M. Aboitiz, Rolando C. Cabrera

• The Board Risk Management Committee shall represent the Board in discharging its
responsibility relating to risk management related matters around the Group.
Chairman: Enrique M. Aboitiz, Jr.; Members: Erramon I. Aboitiz, Jose R. Facundo, Jakob G.
Disch; Ex‐Officio Members: Iker M. Aboitiz, Rolando C. Cabrera

PART V – EXHIBITS AND SCHEDULES
Item 14. Exhibits and Reports on SEC Form 17‐C
(a) Exhibits. None
(b) Reports on SEC Form 17‐C
Reports filed by the AboitizPower on SEC Form 17‐C from May 2011 to March 2012 are as follows:
Date Disclosure Details

May 5, 2011 First Quarter 2011 Financial and Operating Results
May 10, 2011 Closing of the Luzon Hydro Corporation Buy-out
May 10, 2011 Settlement of Cases between Aboitiz Renewables, Inc. and Pacific Hydro
Bakun, Inc.
May 16, 2011 Result of the Annual Stockholders’ Meeting
May 16, 2011 Result of the Organizational Meeting
May 27, 2011 Acquisition of Navotas Power Barges
June 2, 2011 Start of Commercial Operations of Unit 3 of the Ambuklao Plant
June 3, 2011 Appointment of Mr. Irwin C. Pagdalian as Assistant Vice President for
Special Projects - AP Distribution
June 24, 2011 Appointment of Officer - William L. Ruccius as Vice President for Business
Development
June 27, 2011 Meralco PowerGen approval of investment in Redondo Peninsula
Energy, Inc.
July 22, 2011 Signing of Shareholders' Agreement with Meralco PowerGen
Corporation and Taiwan Cogeneration International Corporation –
Philippine Branch
July 26, 2011 Appointment of External Auditor
July 28, 2011 First Half 2011 Financial and Operating Results
July 29, 2011 PRS Aaa issue ratings for AboitizPower's corporate notes and bonds
September 27, 2011 Signing of Memorandum of Understanding with Marubeni Corporation
October 26, 2011 Signing of Power Supply Agreement with Benguet Corporation
November 3, 2011 Third Quarter 2011 Financial and Operating Results
December 19, 2011 Appointment of New Stock and Transfer Agent
December 26, 2011 Extension of the Term of the Meralco TSC Load Allocation
January 13, 2012 Appointment of Ms. Socorro L. Patindol as Assistant Vice President for
Environmental Management – Power Generation Group
February 1, 2012 Appointment of Mr. Kenton E. Heuertz
February 6, 2012 Purchase of 31,650,900 AP common shares by AEV
Appointment of Ms. Ma. Cynthia C. Hernandez as Assistant Vice President
February 9, 2012 – Finance
February 22, 2012 Final List of Candidates for the Board of Directors
February 27, 2012 Meralco Board Approval on Power Supply Agreement signing with Therma
Luzon, Inc.
February 29, 2012 Therma Luzon, Inc. signing of Power Supply Agreement with Meralco
March 1, 2012 Full Year 2011 Financial and Operating Results
March 1, 2012 Matters Approved by the Board
March 26, 2012 Interdepartmental Transfer of Officers
March 26, 2012 Energy Regulatory Commission issuance of Certificate of Compliance for
SNAP-Binga
March 28, 2012 Early Redemption of Five-Year Peso Fixed Rate Bonds
March 30, 2012 Retirement of Mr. Anastacio D. Cubos, Jr. as Vice President – Special
Projects

ANNEX “A”
ABOITIZ POWER CORPORATION
DISTRIBUTION GENERATION RES
SUBIC ENERZONE CORP. ABOITIZ ENERGY

(99.97%) SOLUTIONS, INC. (100.00%)
THERMA POWER, INC. ABOITIZ RENEWABLES, INC.
(100.00%) (100.00%)
COTABATO LIGHT & POWER ADVENTENERGY, INC.
CO. (99.94%) (100.00%)
THERMA LUZON, INC. HEDCOR, INC.
(100.00%) (100.00%)
VISAYAN ELECTRIC CO., INC. PRISM ENERGY, INC.

(55.24%) THERMA MARINE, INC. (60.00%)
AP RENEWABLES, INC.
(100.00%)
(100.00%)
SAN FERNANDO ELECTRIC &

POWER CO., INC. (43.78%) THERMA MOBILE, INC.
(100.00%) LUZON HYDRO CORP.
(100.00%)
DAVAO LIGHT & POWER CO.
THERMA SOUTH, INC.
INC. (99.93%) HEDCOR SIBULAN,
(100.00%)
INC. (100.00%)
MACTAN ENERZONE CORP. THERMA POWER

(100.00%) VISAYAS, INC. (100.00%) HEDCOR TAMUGAN,
INC. (100.00%)
BALAMBAN ENERZONE THERMA SUBIC, INC.

CORP. (100.00%) (100.00%)
HEDCOR SABANGAN,
INC. (100.00%)
THERMA SOUTHERN
MINDANAO, INC. (100.00%)
HEDCOR TUDAYA,
INC. (100.00%)
THERMA CENTRAL
VISAYAS, INC. (100.00%)
CLEANERGY, INC.
(100.00%)
ABOVANT HOLDINGS,
INC. (60.00%)
HEDCOR BOKOD, INC.
(100.00%)
CEBU ENERGY DEVT.
CORP. (44.00%)
HEDCOR BUKIDNON,
INC. (100.00%)
REDONDO PENINSULA
ENERGY, INC. (25.00%)
MANILA-OSLO RENEWABLE
ENTERPRISE, INC.
(83.33%)
CEBU PRIVATE POWER
CORP. (60.00%)
SN ABOITIZ POWER –
MAGAT, INC. (60.00%)
EAST ASIA UTILITIES CORP.
(50.00%)
BENGUET, INC.
(60.00%)
STEAG STATE POWER INC.
(34.00%)
RES, INC. (60.00%)
SOUTHERN PHILIPPINES
POWER CORP. (20.00%)
WESTERN MINDANAO
POWER CORP. (20.00%)
-2-
PAS 32, Financial Instruments: Presentation (Amendment)

The amendment alters the definition of a financial liability in PAS 32 to enable entities to classify
rights issues and certain options or warrants as equity instruments. The amendment is applicable
if the rights are given pro rata to all of the existing owners of the same class of an entity’s non-
derivative equity instruments, to acquire a fixed number of the entity’s own equity instruments for
a fixed amount in any currency. The amendment has had no effect on the financial position or
performance of the Company because the Company does not have these types of instruments.
Philippine Interpretation IFRIC 14, Prepayments of a Minimum Funding Requirement

(Amendment)
The amendment removes an unintended consequence when an entity is subject to minimum
funding requirements and makes an early payment of contributions to cover such requirements.
The amendment permits a prepayment of future service cost by the entity to be recognized as a
pension asset. The Company is not subject to minimum funding requirements in the Philippines;
therefore, the amendment of the interpretation has no effect on the financial position or
performance of the Company.
Improvements to PFRS (issued 2010)

Improvements to PFRS, an omnibus of amendments to standards, deal primarily with a view to
removing inconsistencies and clarifying wording. There are separate transitional provisions for
each standard. The adoption of the following amendments resulted in changes to accounting
policies but did not have any impact on the financial position or performance of the Company.
· PFRS 3, Business Combinations: The measurement options available for non-controlling

interest (NCI) were amended. Only components of NCI that constitute a present ownership
interest that entitles their holder to a proportionate share of the entity’s net assets in the event
of liquidation should be measured at either fair value or at the present ownership instruments’
proportionate share of the acquiree’s identifiable net assets.
· PFRS 7, Financial Instruments - Disclosures: The amendment was intended to simplify the
disclosures provided by reducing the volume of disclosures around collateral held and
improving disclosures by requiring qualitative information to put the quantitative information
in context.
· PAS 1, Presentation of Financial Statements: The amendment clarifies that an entity may
present an analysis of each component of other comprehensive income maybe either in the
statement of changes in equity or in the notes to the parent company financial statements.
Other amendments resulting from the 2010 Improvements to PFRS to the following standards did
not have any impact on the accounting policies, financial position or performance of the
Company:
· PFRS 3, Business Combinations (Contingent consideration arising from business combination

prior to adoption of PFRS 3 (as revised in 2008))
· PFRS 3, Business Combinations (Un-replaced and voluntarily replaced share-based payment
awards)
· PAS 27, Consolidated and Separate Financial Statements
· PAS 34, Interim Financial Statements
*SGVMC409382*
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The following interpretation and amendments to interpretations did not have any impact on the
accounting policies, financial position or performance of the Company:
· Philippine Interpretation IFRIC 13, Customer Loyalty Programmes (determining the fair value
of award credits)
· Philippine Interpretation IFRIC 19, Extinguishing Financial Liabilities with Equity
Instruments
Standards Issued but not yet Effective

Standards issued but not yet effective up to the date of issuance of the Company’s financial
statements are listed below. This listing of standards and interpretations issued are those that the
Company reasonably expects to have an impact on disclosures, financial position or performance
when applied at a future date. The Company intends to adopt these standards when they become
effective.
· PAS 1, Financial Statement Presentation - Presentation of Items of Other Comprehensive

Income (OCI)
The amendments to PAS 1 change the grouping of items presented in OCI. Items that could
be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon
derecognition or settlement) would be presented separately from items that will never be
reclassified. The amendment affects presentation only and has therefore no impact on the
Company’s financial position or performance. The amendment becomes effective for annual
periods beginning on or after July 1, 2012.
· PAS 12, Income Taxes - Recovery of Underlying Assets

The amendment clarified the determination of deferred tax on investment property measured
at fair value. The amendment introduces a rebuttable presumption that deferred tax on
investment property measured using the fair value model in PAS 40, Investment Property
should be determined on the basis that its carrying amount will be recovered through sale.
Furthermore, it introduces the requirement that deferred tax on non-depreciable assets that are
measured using the revaluation model in PAS 16, Property, Plant and Equipment always be
measured on a sale basis of the asset. The amendment becomes effective for annual periods
beginning on or after January 1, 2012.
· PAS 19, Employee Benefits (Amendment)

Amendments to PAS 19 range from fundamental changes such as removing the corridor
mechanism and the concept of expected returns on plan assets to simple clarifications and re-
wording. The Company is currently assessing the impact of the amendment to PAS 19. The
amendment becomes effective for annual periods beginning on or after January 1, 2013.
· PAS 27, Separate Financial Statements (as revised in 2011)

As a consequence of the new PFRS 10, Consolidated Financial Statement and PFRS 12,
Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to accounting for
subsidiaries, jointly controlled entities, and associates in separate financial statements. The
· PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the new PFRS 11, Joint Arrangements and PFRS 12, PAS 28 has been
renamed PAS 28, Investments in Associates and Joint Ventures, and describes the application
of the equity method to investments in joint ventures in addition to associates. The
*SGVMC409382*
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· PFRS 7, Financial Instruments: Disclosures - Enhanced Derecognition Disclosure

Requirements
The amendment requires additional disclosure about financial assets that have been
transferred but not derecognized to enable the user of the Company’s financial statements to
understand the relationship with those assets that have not been derecognized and their
associated liabilities. In addition, the amendment requires disclosures about continuing
involvement in derecognized assets to enable the user to evaluate the nature of, and risks
associated with, the entity’s continuing involvement in those derecognized assets. The
amendment becomes effective for annual periods beginning on or after July 1, 2011. The
amendment affects disclosures only and has no impact on the Company’s financial position or
performance.
· PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial

Liabilities
These amendments require an entity to disclose information about rights of set-off and related
arrangements (such as collateral agreements). The new disclosures are required for all
recognized financial instruments that are set off in accordance with PAS 32. These
disclosures also apply to recognized financial instruments that are subject to an enforceable
master netting arrangement or “similar agreement”, irrespective of whether they are set-off in
accordance with PAS 32. The amendments require entities to disclose, in a tabular format
unless another format is more appropriate, the following minimum quantitative information.
This is presented separately for financial assets and financial liabilities recognized at the end
of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining
the net amounts presented in the statement of financial position;
c) The net amounts presented in the statement of financial position;
d) The amounts subject to an enforceable master netting arrangement or similar agreement
that are not otherwise included in (b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all
of the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendments to PFRS 7 are to be retrospectively applied for annual periods beginning on
or after January 1, 2013. The amendment affects disclosures only and has no impact on the
Company’s financial position or performance.
· PFRS 10, Consolidated Financial Statements

PFRS 10 replaces the portion of PAS 27 that addresses the accounting for consolidated
financial statements. It also includes the issues raised in SIC-12, Consolidation - Special
Purpose Entities. PFRS 10 establishes a single control model that applies to all entities
including special purpose entities. The changes introduced by PFRS 10 will require
management to exercise significant judgment to determine which entities are controlled, and
therefore, are required to be consolidated by a parent, compared with the requirements that
were in PAS 27. This standard becomes effective for annual periods beginning on or after
January 1, 2013.
*SGVMC409382*
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· PFRS 11, Joint Arrangements

PFRS 11 replaces PAS 31, Interests in Joint Ventures and SIC-13, Jointly-Controlled Entities
Non-monetary Contributions by Venturers. PFRS 11 removes the option to account for
jointly-controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet
the definition of a joint venture must be accounted for using the equity method. This standard
becomes effective for annual periods beginning on or after January 1, 2013.
· PFRS 12, Disclosure of Involvement with Other Entities

PFRS 12 includes all of the disclosures that were previously in PAS 27 related to
consolidated financial statements, as well as all of the disclosures that were previously
included in PAS 31 and PAS 28. These disclosures relate to an entity’s interests in
subsidiaries, joint arrangements, associates and structured entities. A number of new
disclosures are also required. This standard becomes effective for annual periods beginning
on or after
January 1, 2013.
· PFRS 13, Fair Value Measurement

PFRS 13 establishes a single source of guidance under PFRS for all fair value measurements.
PFRS 13 does not change when an entity is required to use fair value, but rather provides
guidance on how to measure fair value under PFRS when fair value is required or permitted.
The Company is currently assessing the impact that this standard will have on the financial
position and performance. This standard becomes effective for annual periods beginning on
or after January 1, 2013.
· PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities
These amendments to PAS 32 clarify the meaning of “currently has a legally enforceable
right to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement
systems (such as central clearing house systems) which apply gross settlement mechanisms
that are not simultaneous. While the amendment is expected not to have any impact on the
net assets of the Company, any changes in offsetting is expected to impact leverage ratios and
regulatory capital requirements. The amendments to PAS 32 are to be retrospectively applied
for annual periods beginning on or after January 1, 2014. The Company is currently
assessing impact of the amendments to PAS 32.
· PFRS 9, Financial Instruments: Classification and Measurement

PFRS 9 as issued reflects the first phase on the replacement of PAS 39 and applies to
classification and measurement of financial assets and financial liabilities as defined in
PAS 39. The standard is effective for annual periods beginning on or after January 1, 2015.
In subsequent phases, hedge accounting and impairment of financial assets will be addressed
with the completion of this project expected on the latter half of 2012. The adoption of the
first phase of PFRS 9 will have an effect on the classification and measurement of the
Company’s financial assets, but will potentially have no impact on classification and
measurements of financial liabilities. The Company will quantify the effect in conjunction
with the other phases, when issued, to present a comprehensive picture.
*SGVMC409382*
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Summary of Significant Accounting Policies
Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash with original maturities of
three months or less and that are subject to an insignificant risk of change in value.
Financial Instruments
The Company recognizes financial instruments in the parent company balance sheet on the date
when it becomes a party to the contractual provisions of the instrument.
All regular way purchases and sales of financial assets are recognized on trade date, which is the
date that the Company commits to purchase the asset. Regular way purchases or sales of financial
assets are purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace. Derivatives are recognized
on a trade date basis.
Initial recognition of financial instruments

All financial instruments are recognized initially at fair value. Transaction costs, if any, are
included in the initial measurement of all financial instruments, except for financial instruments
measured at fair value through profit-or-loss (FVPL).
Determination of fair value

The fair value of investments held that are actively traded in organized financial markets is
determined by reference to quoted market bid prices at the close of business on the balance sheet
date. For investments where there is no active market, fair value is determined using valuation
techniques. Such techniques include using recent arm’s length market transactions; reference to
the current market value of another instrument, which are substantially the same; discounted cash
flow analysis and other valuation models.
For all other financial instruments not listed in an active market, the fair value is determined by
using appropriate valuation methodologies. Valuation methodologies include net present value
techniques, comparison to similar instruments for which market observable prices exist, options
pricing models, and other relevant valuation models.
The Company recognizes a financial asset or a financial liability in the parent company balance
sheet when it becomes a party to the contractual provisions of the instrument and derecognizes a
financial asset (or part of a financial asset) when it no longer controls the contractual rights that
comprise the financial instrument, which is normally the case when the instrument is sold, or all
the cash flows attributable to the instrument are passed to an independent third party. A financial
liability (or a part of a financial liability) is derecognized when the obligation is extinguished. In
the case of a regular way purchase or sale of financial assets, recognition and derecognition, as
applicable, is done using settlement date accounting.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument or
a component that is a financial liability are reported as expense or income. Distributions to
holders of financial instruments classified as equity are charged directly to equity, net of any
related income tax benefits. Financial instruments are offset when there is a legally enforceable
right to offset and intention to settle either on a net basis or to realize the asset and settle the
liability simultaneously.
*SGVMC409382*
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Financial instruments are classified into the following categories: financial asset or financial
liability at FVPL, loans and receivables, held-to-maturity (HTM) investments, AFS investments
and other financial liabilities. The Company determines the classification at initial recognition and
where allowed and appropriate, re-evaluates such designation at every reporting date.
a. Financial asset or financial liability at FVPL

Financial assets and liabilities at FVPL include financial assets and liabilities classified as held
for trading and financial assets and liabilities designated upon initial recognition as at FVPL.
Financial assets and liabilities are classified as held for trading if they are acquired for the
purpose of selling in the near term or upon initial recognition if it is designated by
management as at FVPL. Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated and considered as hedging instruments
in an effective hedge.
Financial assets may be designated at initial recognition as at FVPL if the following criteria
are met: (i) the designation eliminates or significantly reduces the inconsistent treatment that
would otherwise arise from measuring the assets or recognizing gains or losses on them on a
different basis; (ii) the assets are part of a group of financial assets which are managed and
their performance evaluated on a fair value basis, in accordance with a documented risk
management strategy; or (iii) the financial asset contains an embedded derivative that would
need to be separately recorded.
Where a contract contains one or more embedded derivatives, the entire hybrid contract may
be designated as financial asset or financial liability at FVPL, except where the embedded
derivative does not significantly modify the cash flows or it is clear that separation of the
embedded derivative is prohibited.
Financial assets and liabilities at FVPL are recorded in the parent company balance sheet at
fair value. Subsequent changes in fair value are recognized in the parent company statement
of income. Interest earned or incurred is recorded as interest income or expense, respectively,
while dividend income is recorded as other income when the right to receive payment has
been established.
Included under this category is the Company’s derivative asset and derivative liability
(see Note 20).
b. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are not entered into with the intention of
immediate or short-term resale and are not reclassified or designated as AFS investments or
financial assets at FVPL. After initial measurement, loans and receivables are subsequently
carried at amortized cost using the effective interest method less any allowance for
impairment. Amortized cost is calculated taking into account any discount or premium on
acquisition and includes fees that are an integral part of the effective interest rate and
transaction costs. Gains and losses are recognized in the parent company statement of income
when the loans and receivables are derecognized or impaired, as well as through the
amortization process. Loans and receivables are included in current assets if maturity is
within twelve months from the balance sheet date. Otherwise, they are classified as non-
current assets.
Included under this category are the Company’s cash and cash equivalents (excluding cash on
hand) and trade and other receivables and amounts owed by related party.
*SGVMC409382*
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c. HTM investments
HTM investments are quoted non-derivative financial assets which carry fixed or determinable
payments and fixed maturities and which the Company has the positive intention and ability to
hold to maturity. After the initial measurement, HTM investments are measured at amortized
cost using the effective interest method. This method uses an effective interest rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset. Amortized cost is calculated by taking into
account any discount or premium on acquisition and fees that are integral to the effective
interest rate. Where the Company sells other than an insignificant amount of HTM
investments, the entire category would be tainted and reclassified as AFS investments. Gains
and losses are recognized in the parent company statement of income when the investments
are derecognized or impaired, as well as through the amortization process.
The Company does not have any HTM investments at December 31, 2011 and 2010.
d. AFS investments
AFS investments are non-derivative financial assets that are either designated as AFS or not
classified in any of the other categories. They are purchased and held indefinitely, and may be
sold in response to liquidity requirements or changes in market conditions. Quoted AFS
investments are measured at fair value with gains or losses being recognized as other
comprehensive income, until the investments are derecognized or until the investments are
determined to be impaired at which time, the accumulated gains or losses previously reported
in other comprehensive income are included in the consolidated statement of income.
Unquoted AFS investments are carried at cost, net of impairment. Interest earned or paid on
the investments is reported as interest income or expense using the effective interest rate.
Dividends earned on investments are recognized in the consolidated statement of income when
the right of payment has been established. These financial assets are classified as noncurrent
assets unless the investment matures or management intends to dispose it within twelve
months after the end of the reporting period.
The Company does not have any AFS investments at December 31, 2011 and 2010.
e. Other financial liabilities

This category pertains to financial liabilities that are not held for trading or not designated as
at FVPL upon the inception of the liability. These include liabilities arising from operations
or borrowings.
The liabilities are recognized initially at fair value and are subsequently carried at amortized
cost, taking into account the impact of applying the effective interest rate method of
amortization (or accretion) for any directly attributable transaction costs.
Included under this category are the Company’s bank loans, amounts owed to related parties,
trade and other payables and long-term debts.
*SGVMC409382*
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‘Day 1’ difference
Where the transaction price in a non-active market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Company recognizes the difference
between the transaction price and fair value (a ‘Day 1’ difference) in the parent company
statement of income unless it qualifies for recognition as some other type of asset. In cases where
unobservable data is used, the difference between the transaction price and model value is only
recognized in the parent company statement of income when the inputs become observable or
when the instrument is derecognized. For each transaction, the Company determines the
appropriate method of recognizing the ‘Day 1’ difference amount.
Derivative financial instruments

Derivative financial instruments, including embedded derivatives, are initially recognized at fair
value on the date in which a derivative transaction is entered into or bifurcated, and are
subsequently remeasured at FVPL, unless designated as effective hedge. Changes in fair value of
derivative instruments not accounted as hedges are recognized immediately in the parent company
statement of income. Derivatives are carried as assets when the fair value is positive and as
liabilities when the fair value is negative.
The Company assesses whether embedded derivatives are required to be separated from host
contracts when the Company first becomes party to the contract. An embedded derivative is
separated from the host financial or non-financial contract and accounted for as a separate
derivative if all of the following conditions are met:
· the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics of the host contract;
· a separate instrument with the same terms as the embedded derivative would meet the
· definition of a derivative; and,
· the hybrid or combined instrument is not recognized as at FVPL.
Reassessment only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required.
Embedded derivatives that are bifurcated from the host contracts are accounted for either as
financial assets or financial liabilities at FVPL.
As of December 31, 2011 and 2010, the Company has freestanding derivatives in the form of non-
deliverable foreign currency forward contracts entered into to economically hedge its foreign
exchange risk (see Note 19). In 2011 and 2010, the Company did not apply hedge accounting
treatment on its derivative transactions. The Company has not bifurcated any embedded
derivatives as of December 31, 2011 and 2010.
Classification of financial instruments between liability and equity

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

· exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; or
· satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.
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If the Company does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial liability.
a component that is a financial liability, are reported as income or expense. Distributions to
holders of financial instruments classified as equity are charged directly to equity net of any
related income tax benefits.
The components of issued financial instruments that contain both liability and equity elements are
accounted for separately, with the equity component being assigned the residual amount after
deducting from the instrument as a whole the amount separately determined as the fair value of the
liability component on the date of issue.
Derecognition of Financial Assets and Liabilities

Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar
financial assets) is derecognized where:
· the rights to receive cash flows from the asset have expired;
· the Company retains the right to receive cash flows from the asset, but has assumed an
obligation to pay them in full without material delay to a third party under a ‘pass-through’
arrangement; or
· the Company has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
Where the Company has transferred its rights to receive cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred control
of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the
asset. Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Company could be required to repay. Where continuing involvement takes
the form of a written and/or purchased option (including a cash-settled option or similar provision)
on the transferred asset, the extent of the Company’s continuing involvement is the amount of the
transferred asset that the Company may repurchase, except that in the case of a written put option
(including a cash-settled option or similar provision) on an asset measured at fair value, the extent
of the Company’s continuing involvement is limited to the lower of the fair value of the
transferred asset and the option exercise price.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or has expired.
Where an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognized in the parent company
statement of income.
*SGVMC409382*
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Impairment of Financial Assets

The Company assesses at each balance sheet date whether a financial asset or group of financial
assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if and
only if, there is an objective evidence of impairment as a result of one or more events that has
occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has
an impact on the estimated future cash flows of the financial asset or the group of financial assets
that can be reliably estimated. Evidence of impairment may include indications that the debtors or
a group of debtors is experiencing significant financial difficulty, default or delinquency in interest
or principal payments, the probability that they will enter bankruptcy or other financial
reorganization and where observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
Assets carried at amortized cost

The Company first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, and individually or collectively for financial
assets that are not individually significant. If it is determined that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, the asset
is included in a group of financial assets with similar credit risk characteristics and that group of
financial assets is collectively assessed for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognized are not included in
a collective assessment of impairment.
If there is an objective evidence that an impairment loss on loans and receivables carried at
amortized cost has been incurred, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective
interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount
of the asset shall be reduced either directly or through the use of an allowance account. The
amount of the loss shall be recognized in the parent company statement of income. If in case the
receivable has proven to have no realistic prospect of future recovery, any allowance provided for
such receivable is written off against the carrying value of the receivable.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is
recognized in the parent company statement of income, to the extent that the carrying value of the
asset does not exceed its amortized cost at the reversal date.
AFS investments
For AFS investments, the Company assesses at each balance sheet date whether there is objective
evidence that an investment or group of investments is impaired.
In the case of equity investments classified as AFS, objective evidence of impairment would
include a significant or prolonged decline in the fair value of the investments below its cost.
Where there is evidence of impairment, the cumulative loss (measured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognized in the parent company statement of income) is removed from the parent
company other comprehensive income and recognized in the parent company statement of income.
Impairment losses on equity investments are not reversed through the parent company statement
of income. Increases in fair value after impairment are recognized directly in the parent company
other comprehensive income.
*SGVMC409382*
- 12 -
In the case of debt instruments classified as AFS, impairment is assessed based on the same
criteria as financial assets carried at amortized cost. Future interest income is based on rate of
interest used to discount future cash flows for measuring impairment loss. Such accrual is
recorded as part of “Interest income” in the parent company statement of income. If, in
subsequent period, the fair value of a debt instrument increased and the increase can be objectively
related to an event occurring after the impairment loss was recognized in the parent company
statement of income, the impairment loss is reversed through the parent company statement of
income.
Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the parent
company balance sheet if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously. This is not generally the case with master netting agreements
whereby the related assets and liabilities are presented gross in the parent company balance sheet.
Investments in and advances to Subsidiaries and Associates

A subsidiary is an entity over which the Company has the power to govern the financial and
operating policies generally accompanying a shareholding of more than half of the voting rights.
The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Company controls another entity.
An associate is an entity in which the Company has significant influence and which is neither a
subsidiary nor a joint venture.
Investments in and advances to subsidiaries and associates are carried at cost, less impairment in
value, in the parent company financial statements.
The Company recognizes income from the investments only to the extent that the Company
receives distributions or establishes a right to receive distributions from accumulated profits of the
subsidiaries and associates arising after the date of acquisition. Distributions received in excess of
such profits are regarded as a recovery of investment and are recognized as a reduction of the cost
of the investment.
Investment Property
Investment property pertains to land not used in operations. Initially, investment property is
measured at cost including transaction costs. Subsequent to initial recognition investment
property is stated at cost less any impairment in value.
Investment property is derecognized when it has either been disposed of or when the investment
property is permanently withdrawn from use and no future benefit is expected from its disposal.
Any gain or loss on the derecognition of an investment property is recognized in the parent
company statement of income in the year of derecognition.
*SGVMC409382*
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Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and accumulated
impairment in value, if any. Such cost includes the cost of replacing parts of such property and
equipment. Depreciation is calculated on a straight-line basis over the useful lives of the assets as
follows:
Category Number of Years

Transportation equipment 3-5
Office and tools equipment 3
Communication equipment 3
Leasehold improvements 10
Leasehold improvements are amortized over the period of the lease agreement or the estimated
useful lives of the improvements, whichever is shorter.
Fully depreciated assets are retained in the accounts until these are no longer in use. When assets
are retired or otherwise disposed of, both the cost and related accumulated depreciation and
amortization and any allowance for impairment losses are removed from the accounts and any
resulting gain or loss is credited or charged to current operations. An item of property, plant and
equipment is derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in
the parent company statement of income in the year the asset is derecognized.
The carrying values of property and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The asset’s useful lives and depreciation and amortization method are reviewed, and adjusted
if appropriate, at each financial year-end.
Construction in progress represents properties under construction and is stated at cost. This
includes cost of construction and other direct cost. Construction in progress is not depreciated
until such time the relevant assets are completed and available for use.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is fair value as at the date of the acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated
amortization and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and expenditure is reflected in the
parent company statement of income in the year in which the expenditure is incurred.
Computer software license

Computer software license is initially recognized at cost. Following initial recognition, the
computer software license cost is carried at cost less accumulated amortization and any
accumulated impairment in value.
The computer software license is amortized on a straight-line basis over its estimated useful
economic life of three to five years and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortization commences when the computer
software license is available for use. The amortization period and the amortization method for the
license are reviewed at each financial year end. Changes in the estimated useful life is accounted
*SGVMC409382*
- 14 -
for by changing the amortization period or method, as appropriate, and treated as changes in
accounting estimates. The amortization expense is recognized in the parent company statement of
income in the expense category consistent with the function of the computer software license.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
parent company statement of income when the asset is derecognized.
Impairment of Nonfinancial Assets

The Company assesses at each reporting date whether there is an indication that assets may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and
its value in use (VIU) and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount. In assessing VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Impairment losses of
continuing operations are recognized in the parent company statement of income in those expense
categories consistent with the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such indication
exists, the Company makes an estimates of the asset’s or CGU’s recoverable amount. A
previously recognized impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset’s recoverable amount since the last impairment loss was
recognized. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation and amortization, had no impairment loss been recognized for the
asset in prior years. Such reversal is recognized in the parent company statement of income unless
the asset is carried at revalued amount, in which case the reversal is treated as a revaluation
increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining
useful life.
Foreign Currency Transactions

The Company’s financial statements are presented in Philippine Peso, which is the Company’s
functional currency. Transactions in foreign currencies are recorded using the exchange rate at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
restated using the rate of exchange at balance sheet date. Exchange gains and losses arising from
foreign currency transactions and translations of foreign currency denominated monetary assets
and liabilities are credited to or charged against current operations.
Capital Stock
Capital stock is measured at par value for all shares issued. Incremental costs incurred directly
attributable to the issuance of new shares are shown in equity as deduction from proceeds, net of
tax. Proceeds and/or fair value of consideration received in excess of par value, if any, are
recognized as additional paid-in capital.
*SGVMC409382*
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Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regardless of when the payment is
being made. Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment and excluding taxes or
duty. The Company assesses its revenue arrangements against specific criteria in order to
determine if it is acting as principal or agent.
The following specific recognition criteria must also be met before revenue is recognized:
Dividend income
Dividend income is recognized when the Company’s right to receive payment is established.
Interest income
Interest income is recognized as it accrues taking into account the effective yield of the asset.
Technical, management and service fees

Technical, management and services fees are recognized when the related services are rendered.
Expenses
Expenses are decreases in economic benefits during the accounting period in the form of outflows
or decrease of assets or incurrence of liabilities that result in decreases in equity, other than those
relating to distributions to equity participants. Expenses are recognized when incurred.
Pension Benefits
The cost of providing benefits under the defined benefit plan is determined using the projected
unit credit actuarial valuation method. Actuarial gains and losses are recognized as income or
expense when the net cumulative unrecognized actuarial gains and losses for at the end of the
previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair
value of plan assets at that date. These gains or losses are recognized over the expected average
remaining working lives of the employees participating in the plan. The past service cost is
recognized as an expense on a straight-line basis over the average period until the benefits become
vested. If the benefits are already vested immediately following the introduction of, or changes to,
a pension plan, past service cost is recognized immediately.
The defined benefit liability is the aggregate of the present value of the defined benefit obligation
and actuarial gains and losses not recognized reduced by past service cost not yet recognized and
the fair value of plan assets out of which the obligations are to be settled directly. If such
aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of
cumulative unrecognized net actuarial losses and past service cost and the present value of any
economic benefits available in the form of refunds from the plan or reductions in the future
contributions to the plan.
If the asset is measured at the aggregate of cumulative unrecognized net actuarial losses and past
service cost and the present value of any economic benefits available in the form of refunds from
the plan or reductions in the future contributions to the plan, net actuarial losses of the current
period and past service cost of the current period are recognized immediately to the extent that
they exceed any reduction in the present value of those economic benefits. If there is no change or
an increase in the present value of the economic benefits, the entire net actuarial losses of the
current period and past service cost of the current period are recognized immediately.
*SGVMC409382*
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Similarly, net actuarial gains of the current period after the deduction of past service cost of the
current period exceeding any increase in the present value of the economic benefits stated above
are recognized immediately if the asset is measured at the aggregate of cumulative unrecognized
net actuarial losses and past service cost and the present value of any economic benefits available
in the form of refunds from the plan or reductions in the future contributions to the plan. If there
is no change or a decrease in the present value of the economic benefits, the entire net actuarial
gains of the current period after the deduction of past service cost of the current period are
recognized immediately.
Income Taxes
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted as of the
balance sheet date.
Deferred income tax

Deferred income tax is provided using the balance sheet liability method on temporary
differences at the balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
· where the deferred income tax liability arises from the initial recognition of goodwill or of
an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and,
· in respect of taxable temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences,
carryforward benefits of unused net operating loss carryover (NOLCO) and excess minimum
corporate income tax (MCIT), to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carryforward benefits of
unused NOLCO and excess MCIT can be utilized except:
· where the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and,
· in respect of deductible temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, deferred income tax assets are recognized only to
the extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can be
utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred
*SGVMC409382*
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income tax assets are reassessed at each balance sheet date and are recognized to the extent that
it has become probable that future taxable profit will allow the deferred income tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted as of the balance sheet date.
Deferred income tax assets and deferred income tax liabilities are offset, if, and only if, a
legally enforceable right exists to set off current tax assets against current tax liabilities and the
deferred income taxes relate to the same taxable entity and the same taxation authority.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in
the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
Retained Earnings
The amount included in retained earnings includes accumulated earnings of the Company and
reduced by dividends on capital stock. Dividends on capital stock are recognized as a liability and
deducted from equity when they are approved by the BOD. Dividends for the year that are
approved after the financial reporting date are dealt with as an event after the financial reporting
date. Retained earnings may also include effect of changes in accounting policy as may be
required by the transition provisions of new and amended standards.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the Company expects some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the parent
company statement of income, net of any reimbursement. If the effect of the time value of money
is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate,
the risks specific to the liability. Where discounting is used, the increase in the provision due to
the passage of time is recognized as an interest expense.
Contingencies
Contingent liabilities are not recognized in the financial statements but are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. Contingent assets
are not recognized but are disclosed in the financial statements when an inflow of economic
benefits is probable.
Events After the Reporting Period

Post year-end events that provide additional information about the Company’s position at balance
sheet date (adjusting events) are reflected in the financial statements. Post year-end events that are
not adjusting events are disclosed when material.
*SGVMC409382*
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3. Significant Judgments, Assumptions and Estimates
The preparation of the Company’s financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities. However, uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of the asset or liability affected in the future periods.
Judgment
In the process of applying the Company’s accounting policies, management has made judgments,
apart from those involving estimations, which have the most significant effect on the amounts
recognized in the financial statements:
Determining functional currency

Based on the economic substance of the underlying circumstances relevant to the Company, the
functional currency of the Company has been determined to be the Philippine Peso. The
Philippine Peso is the currency of the primary economic environment in which the Company
operates and it is the currency that mainly influences the sale of services and the costs of providing
the services.
Classification of financial instruments

The Company exercises judgment in classifying a financial instrument, or its component parts, on
initial recognition as either a financial asset, a financial liability or an equity instrument in
accordance with the substance of the contractual arrangement and the definition of a financial
asset, a financial liability or an equity instrument. The substance of a financial instrument, rather
than its legal form, governs its classification in the parent company balance sheet.
Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
Estimating allowance for impairment of trade and other receivables

The Company maintains allowance for impairment of receivables at a level considered adequate to
provide for potential uncollectible receivables. The level of this allowance is evaluated by
management on the basis of the factors that affect the collectability of the accounts. These factors
include, but are not limited to, the Company’s relationship with its debtors, debtor’s current credit
status and other known market factors. The Company reviews the age and status of receivables
and identifies accounts that are to be provided with allowance either individually or collectively.
The amount and timing of recorded expenses for any period would differ if the Company made
different judgment or utilized different estimates. An increase in the Company’s allowance for
impairment of receivables will increase the Company’s recorded expenses and decrease current
assets. No provision for allowance for impairment of receivables was recognized as of
December 31, 2011 and 2010. As of December 31, 2011 and 2010, the Company’s receivables
amounted to P=273.4 million and P =329.2 million, respectively (see Note 5).
Assessing impairment of investments in subsidiaries and associates, investment property, property

and equipment, computer software license and prepaid taxes and other current assets
The Company assesses whether there are any indicators of impairment for all non-financial assets.
Determining the recoverable amount of the assets, which require the determination of future cash
*SGVMC409382*
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flows expected to be generated from the continued use and ultimate disposition of such assets,
requires the Company to make estimates and assumptions that can materially affect its financial
statements. Future events could cause the Company to conclude that these assets are impaired.
Any resulting impairment loss could have a material adverse impact on the financial condition and
results of operations.
As of December 31, 2011, the carrying values of investments in and advances to subsidiaries,
investments in and advances to associates, investment property, property and equipment, computer
software license and prepaid taxes and other current assets amounted to P =49.8 billion, P
=7.2 billion,
=10.0 million, P
P =33.7 million, P=4.8 million and P =128.8 million, respectively. As of
December 31, 2010, the carrying values of investments in subsidiaries, investments in associates,
investment property, property and equipment, computer software license and prepaid taxes and
other current assets amounted to P=11.5 billion, P
=6.9 billion, P
=10.0 million, P
=41.2 million,
=5.4 million and P
P =90.0 million, respectively. No impairment losses were recognized in 2011 and
2010 (see Notes 6, 7, 8, 9 and 10).
Pension benefits
The determination of the Company’s obligation and cost of pension is dependent on the selection
of certain assumptions used by actuaries in calculating such amounts. Those assumptions are
described in Note 16, Retirement Costs, and include, among others, discount rates, expected rates
of return on plan assets and rates of future salary increase. In accordance with PAS 19, Employee
Benefits, actual results that differ from the Company’s assumptions are accumulated and
amortized over future periods and therefore, generally affect the Company’s recognized expenses
and recorded obligation in such future periods. While management believes that its assumptions
are reasonable and appropriate, significant differences in the actual experience or significant
changes in the assumptions may materially affect the Company’s pension and other post-
employment obligations. Retirement benefit expense amounted to P =21.6 million, P
=17.2 million
and P=5.4 million in 2011, 2010 and 2009, respectively. The Company has pension asset
amounting to P =48.9 million and P =57.8 million as of December 31, 2011 and 2010, respectively
(see Note 16).
Fair values of financial instruments

The Company carries certain financial assets and liabilities at fair value, which requires extensive
use of accounting estimates and judgment. While significant components of fair value
measurement were determined using verifiable objective evidence (i.e. foreign exchange rates,
interest rates, volatility rates), the amount of changes in fair value would differ if the Company
utilized different valuation methodologies and assumptions. Any changes in fair value of these
financial assets and liabilities would affect the parent company statement of income.
Where the fair values of certain financial assets and financial liabilities recorded in the parent
company balance sheet cannot be derived from active markets, the fair values are determined
using internal valuation techniques using generally accepted market valuation models. The inputs
to these models are taken from observable markets where possible, but where this is not feasible,
estimates are used in establishing fair values. Changes in assumptions about these factors could
affect the reported fair values of the financial instruments.
The fair values of the Company’s financial instruments are presented in Note 20 to the parent
company financial statements.
Deferred income tax assets

The Company’s assessment on the recognition of deferred income tax assets on non-deductible
temporary differences is based on the budgeted taxable income of the following reporting period.
*SGVMC409382*
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This budget is based on the Company’s past results and future expectations on revenue and
expenses. As of December 31, 2011 and 2010, gross deferred income tax assets amounted to
=127.5 million and P
P =130.1 million, respectively. No deferred income tax assets were recognized
for MCIT amounting to P =7.1 million and P
=23.8 million incurred in 2011 and 2010, respectively
and for NOLCO amounting to P =352.1 million and P
=369.5 million incurred in 2011 and 2010,
respectively (see Note 17).
Legal contingencies
The estimate of probable costs for the resolution of possible claims has been developed in
consultation with outside counsel handling the Company’s defense in these matters and is based
upon an analysis of potential results. No provision for probable losses arising from legal
contingencies was recognized as of December 31, 2011 and 2010.
4. Cash and Cash Equivalents
2011 2010
Cash on hand and in banks =721,617,480 P
P =549,464,555
Short-term investments 7,178,397,385 10,532,465,400
=7,900,014,865 P
P =11,081,929,955
Cash in banks earn interest at floating rates based on daily bank deposit rates. Short-term
investments are made for varying periods between one day and three months depending on the
immediate cash requirements of the Company and earn interest at the respective short-term
investment rates.
Interest earned on cash and cash equivalents amounted to P

=433.8 million in 2011, P
=89.1 million in
2010 and P =294.4 million in 2009.
5. Trade and Other Receivables
2011 2010
Trade P
=114,345,915 =205,559,739
P
Interest 64,904,155 18,806,110
Dividends 55,004,284 –
Nontrade 30,273,074 102,179,930
Others 8,899,740 2,613,525
P
=273,427,168 =329,159,304
P
Trade receivables are non-interest bearing and are generally on 30 days’ term.
Nontrade receivables are various project-related costs incurred by the Company which are
collectible within a year and pending allocation to various affiliates.
*SGVMC409382*
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6. Investments in and Advances to Subsidiaries
The details of the Company’s investments in and advances to subsidiaries follow:
2011 2010
Aboitiz Renewables, Inc. (ARI) P
=35,890,338,814 =5,750,185,722
P
Therma Power, Inc. (TPI) 8,596,664,390 5,000
Davao Light & Power Co., Inc. (DLPC) 738,348,601 738,348,601
Mactan Enerzone Corporation (MEZC) 609,532,287 609,532,287
Balamban Enerzone Corporation (BEZC) 444,869,161 444,869,161
Subic Enerzone Corporation (SEZC) 227,000,000 227,000,000
Cotabato Light & Power Co. (CLPC) 214,040,236 214,040,236
Aboitiz Energy Solutions, Inc. (AESI) 21,000,000 21,000,000
Cebu Private Power Corporation (CPPC) 17,806,608 17,806,608
Adventenergy, Inc. (AI) 625,000 625,000
46,760,225,097 8,023,412,615
Deposit for future subscription in ARI – 3,426,882,661
46,760,225,097 11,450,295,276
Advances to subsidiaries 2,997,069,717 –
P
=49,757,294,814 =11,450,295,276
P
In November 2011, ARI increased its capital stock from P =1.0 billion to P
=4.1 billion, consisting of
1.0 billion common shares at P=1.0 per share and 3.1 billion redeemable preferred shares with a par
value of P=1.0 per share. The Company acquired the 2.8 billion redeemable preferred shares for
=2.8 billion.
P
Also in November 2011, TPI increased its capital stock from P =20,000 to P
=860 million, consisting
of 86 million common shares with a par value of P =1 per share and P
=774 million redeemable
preferred shares with a par value of P
=1 per share. The Company acquired 86.0 million common
shares for P
=86.0 million and 773.7 million redeemable preferred shares for P
=773.7 million.
The Company’s subsidiaries (all incorporated in the Philippines) and the corresponding percentage
equity ownership are as follows:
2011 2010
Name of Company Nature of Business Direct Indirect Direct Indirect
Aboitiz Renewables Inc. (ARI) Holding company 100.00% – 100.00% –
Therma Power, Inc. (TPI) Holding company 100.00% – 100.00% –
Mactan Enerzone Corporation (MEZ) Power distribution 100.00% – 100.00% –
Aboitiz Energy Solutions, Inc. (AESI) Energy related service
provider 100.00% – 100.00% –
Balamban Enerzone Corporation (BEZ) Power distribution 100.00% – 100.00% –
Adventenergy, Inc.* Retail of electricity 100.00% – 100.00% –
Davao Light & Power Company, Inc. (DLP) Power distribution 99.93% – 99.93% –
Cotabato Light & Power Company (CLP) Power distribution 99.94% – 99.94% –
Subic Enerzone Corporation (SEZ) Power distribution 65.00% 34.97% 65.00% 34.97%
Cebu Private Power Corporation (CPPC) Power generation 60.00% – 60.00% –
Prism Energy, Inc. (Prism) Retail electricity
supplier 60.00% – 60.00% –
*No commercial operations as of December 31, 2011
Following the approval by SEC of the amendments on CPPC’s Articles of Incorporation on

July 29, 2010, CPPC effected the conversion of its outstanding 5.4 million common shares to
5.4 million redeemable preferred shares (RPS). Sixty percent (60%) of the shares converted or
3.24 million shares is attributable to the Company.
*SGVMC409382*
- 22 -
In December 2010, CPPC redeemed the entire 3.24 million shares attributable to the Company at
=212 per share. The total redemption price amounting to P
P =688.3 million was set-off against the
Company’s advances from CPPC. As a result, the Company recognized “Gain on redemption of
preferred shares” amounting to P
=528.0 million.
Following is the summarized financial information of significant subsidiaries (amounts in

thousands):
2011 2010
ARI and Subsidiaries
Total current assets P
=36,518,966 P3,821,238
=
Total noncurrent assets 117,719,008 41,655,475
Total current liabilities 10,789,289 12,241,577
Total noncurrent liabilities 72,887,403 3,813,683
Gross revenue 54,850,548 17,615,717
Net income 21,883,907 13,691,582
TPI and Subsidiaries
=16,800,518 =13,571,434
P
Gross revenue 22,705,523 27,323,737
Net income 3,891,284 9,655,195
DLP
=989,620 =820,455
P
Gross revenue 9,556,203 8,983,027
Net income 1,290,130 831,076
SEZ
=524,922 =443,401
P
Total noncurrent assets 1,566,356 953,074
Total current liabilities 373,765 516,187
Total noncurrent liabilities 932,151 497,358
Gross revenue 2,493,095 1,816,962
Net income 105,823 143,549
CLP
=253,083 =288,827
P
Total noncurrent assets 403,322 369,389
Gross revenue 693,596 801,159
Net income 32,585 44,325
CPPC
=831,205 =903,989
P
Gross revenue 1,551,319 2,042,950
Net income 223,017 126,315
(Forward)
*SGVMC409382*
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MEZ
=124,053 =157,372
P
Net income 77,928 94,759
BEZ
=167,339 =118,573
P
Net income 68,251 49,534
AESI
=42,032 =31,738
P
Noncurrent liabilities 44 227
Net income 5,708 21,809
7. Investments in and Advances to Associates
The details of the Company’s investments in and advances to associates follow:
2011 2010
STEAG State Power, Inc. (STEAG ) P
=4,400,611,465 =4,400,611,465
P
Hijos de F. Escaño, Inc. (HIJOS) 858,069,586 858,069,586
Visayan Electric Co., Inc. (VECO) 658,153,465 657,505,435
AEV Aviation, Inc. (AEV AVI) 291,400,000 –
Western Mindanao Power Corporation (WMPC) 263,664,589 263,664,589
East Asia Utilities Corporation (EAUC) 217,550,994 217,550,994
Pampanga Energy Ventures, Inc. (PEVI) 209,465,106 209,465,106
San Fernando Electric Light & Power Co., Inc.
(SFELAPCO) 180,863,801 180,863,801
Southern Philippines Power Corporation (SPPC) 152,586,890 152,586,890
7,232,365,896 6,940,317,866
Advances to associates 560,856 –
P
=7,232,926,752 =6,940,317,866
P
In 2011, the Company subscribed and paid for 242,631 common shares and 291,157 redeemable
preferred shares of AEV Aviation, including additional paid-in capital of P
=290.9 million. The par
value of the common and redeemable preferred shares is P=1 per share.
*SGVMC409382*
- 24 -
The percentage of the Company’s ownership in associates is as follows:
Percentage of Ownership
Name of Company Nature of Business 2011 2010
VECO* Power distribution 43.46% 43.44%
EAUC Power generation 50.00% 50.00%
AEV AV Service 49.25% –
HIJOS* Holding company 46.73% 46.73%
SFELAPCO** Power distribution 20.29% 20.29%
PEVI** Holding company 42.84% 42.84%
STEAG Power generation 34.00% 34.00%
SPPC Power generation 20.00% 20.00%
WMPC Power generation 20.00% 20.00%
*HIJOS has direct ownership in VECO of 25.15% in 2011 and 2010. Accordingly, the Company has effective
ownership in VECO of 55.21% in 2011 and 55.19% in 2010, respectively. The Company’s effective ownership in
VECO does not constitute control as the other shareholders’ group has control over VECO’s financial and
operating policies.
**PEVI has direct ownership in SFELAPCO of 54.83% in 2011 and 2010. Accordingly, the Company has
effective ownership in SFELAPCO of 43.78% in 2011 and 2010.
Following the approval by SEC of the amendments on EAUC’s Articles of Incorporation on

September 27, 2010, EAUC effected the conversion of its outstanding 90 million common shares
to 900,000 Series A RPS. Fifty percent (50%) of the shares converted or 45 million shares is
attributable to the Company.
In October 2010, EAUC redeemed 392,210 Series A RPS attributable to the Company at P =2,920
per share. The book value of the redeemed shares amounted to P =791.6 million, and the total
redemption price amounting to P=1.15 billion was set-off against the Company’s advances from
EAUC. As a result, the Company recognized “Gain on redemption of preferred shares”
amounting to P
=353.7 million.
Following is the summarized financial information of significant associates (amounts in

thousands):
2011 2010
VECO
=2,680,499 =3,251,473
P
Gross revenue 16,296,842 13,405,730
Net income 820,535 609,526
EAUC
=615,356 P552,025
=
Total noncurrent assets 234,515 1,002,339
Gross revenue 992,763 1,741,244
Net income 325,998 252,754
(Forward)
*SGVMC409382*
- 25 -
2011 2010
AEV AV
=68,598 P54,423
=
Total current liabilities 1,434 162
Total noncurrent liabilities – 171
Net income (loss) (2,536) 4,165
SFELAPCO
=799,680 =669,949
P
Gross revenue 3,276,602 3,048,028
Net income 101,387 267,483
STEAG
=5,097,440 P5,624,376
=
Gross revenue 7,548,941 6,507,354
Net income 3,662,955 1,754,369
SPPC
=726,142 =580,253
P
Net income 234,836 227,719
WMPC
=1,371,351 =1,031,813
P
Gross revenue 1,352,280 1,324,461
Net income 819,405 851,962
*SGVMC409382*
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8. Property and Equipment
December 31, 2011
Transportation Office and Tools Communication Leasehold

Equipment Equipment Equipment Improvements Total
Cost
At January 1 =27,071,498
P =9,360,448
P =236,869
P =20,437,410
P P
=57,106,225
Additions 2,871,786 3,964,964 387,264 1,105,449 8,329,463
Disposals – – – (5,474,416) (5,474,416)
At December 31 29,943,284 13,325,412 624,133 16,068,443 59,961,272
Accumulated Depreciation
At January 1 9,717,750 3,161,977 57,562 2,987,222 15,924,511
Additions 6,643,725 4,059,732 148,920 83,710 10,936,087
Disposals – – – (621,491) (621,491)
At December 31 16,361,475 7,221,709 206,482 2,449,441 26,239,107
Net Book Value P
=13,581,809 P
=6,103,703 P
=417,651 P
=13,619,002 P
=33,722,165
December 31, 2010
Transportation Office and Tools Communication Leasehold

Equipment Equipment Equipment Improvements Total
Cost
At January 1 =17,203,591
P =3,371,373
P P17,965
= =19,914,815
P =40,507,744
P
Additions 9,867,907 6,076,463 218,904 522,595 16,685,869
Disposals – (87,388) – – (87,388)
At December 31 27,071,498 9,360,448 236,869 20,437,410 57,106,225
At January 1 5,051,691 1,273,515 17,965 995,741 7,338,912
Additions 4,666,059 1,927,189 39,597 1,991,481 8,624,326
Disposals – (38,727) – – (38,727)
At December 31 9,717,750 3,161,977 57,562 2,987,222 15,924,511
Net Book Value =17,353,748
P =6,198,471
P =179,307
P =17,450,188
P =41,181,714
P
In 2011 and 2010, the disposals on property and equipment were made at book value.
There are no restrictions on the title and no property and equipment are pledged as security for
liabilities.
9. Investment Property
Investment property pertains to land not used in operations. The assessed value per Real Property
Tax Declaration of the investment property amounted to P =10.0 million as of December 31, 2011
and 2010.
*SGVMC409382*
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10. Computer Software License
2011 2010
Cost
January 1 P
=5,686,820 =–
P
Addition – 5,686,820
December 31 5,686,820 5,686,820
Accumulated amortization
January 1 331,731
Additions 568,682 331,731
December 31 900,413 331,731
Net book values P
=4,786,407 =5,355,089
P
11. Trade and Other Payables
2011 2010
Accrued Interest P
=116,222,342 =62,023,446
P
Non-trade Payables 49,174,331 –
Trade Payables 26,717,852 14,121,896
Accrued taxes and fees 12,224,835 6,556,233
Output VAT 11,785,996 20,733,733
Others 154,435 6,969,937
P
=216,279,791 =110,405,245
P
12. Bank Loans
Fixed Rate Bank Loans - P=1.3 billion

In 2010, the Company obtained short-term peso loan from local banks for working capital
requirements. As of December 31, 2010, P =1.3 billion was still outstanding with a maturity date of
January 21, 2011. Annual interest rates ranged from 2.24% to 5.10% in 2010. Total interest
expense charged to the parent company statements of income amounted to P =3.5 million and
=1.8 million in 2011 and 2010, respectively.
P
The Company fully paid the amount on the maturity date.
Fixed Rate Bank Loans - P=1.1 billion

In 2009, the Company obtained a short-term peso loan from local banks for working capital
requirements. Annual interest rates ranged from 2.24% to 5.10% in 2010. Total interest expense
charged to the parent company statements of income amounted to nil in 2011 and P
=43.4 million in
2010.
The Company made a full payment on the loan in June 2010.
Floating Rate Bank Loan - $81.0 million

On November 13, 2007, the Company obtained an unsecured short-term US dollar-denominated
loan amounting to $81.0 million from local banks to finance the purchase of 34% in STEAG. The
loan bore an interest rate at London Interbank Offered Rates (LIBOR) plus a certain spread which
was payable monthly. Annual interest rates ranged from 1.75% to 2.63 % and 1.75% to 4.24% in
*SGVMC409382*
- 28 -
2010 and 2009, respectively. Total interest expense charged to the parent company statements of
income amounted to nil in 2011, P
=17.9 million in 2010 and P
=110.3 million in 2009.
In March 2010, the Company paid $64.3 million of the loan while the remaining $16.7 million
was fully paid in April 2010.
13. Long-term Debts

Interest Rate 2011 2010
Financial and non-financial institutions - unsecured
2011 5-year corporate note 6.17% P
=5,000,000,000 =–
P
2009 5-year corporate note 8.23% 5,000,000,000 5,000,000,000
2008 7-year corporate note 9.33% 543,200,000 548,800,000
2008 5-year corporate note 8.78% – 3,330,000,000
Retail bonds - unsecured
3-year bonds 8.00% 705,580,000 705,580,000
5-year bonds 8.70% 2,294,420,000 2,294,420,000
13,543,200,000 11,878,800,000
Less deferred financing costs 86,522,381 96,110,660
13,456,677,619 11,782,689,340
Less current portion - net of deferred financing costs 710,105,174 5,600,000
P
=12,746,572,445 =11,777,089,340
P
Fixed Rate Notes - P

=5.0 billion
On April 14, 2011 (issue date), the Company availed a total of P=5.0 billion from the Notes Facility
Agreement it signed on April 12, 2011, with First Metro Investment Corporation (FMIC) as Issue
Manager, the proceeds of which were used by the Company for general corporate purposes and
refinancing. The Notes Facility Agreement provided for the issuance of 5-year corporate notes in
a private placement to not more than 19 institutional investors pursuant to Section 9.2 of the SRC
and Rule 9.2(2) (B) of the SRC Rules.
Prior to maturity date, the Company may redeem, in whole and not a part only of, the relevant
outstanding notes on the 12th interest payment date. The amount payable in respect of such early
redemption shall be the amount calculated by the Notes Facility Agent, as accrued interest on the
principal amount of the Notes being earlier redeemed up to the Early Redemption Date plus the
Breakage Cost, calculated as the present value of the remaining principal amortizations and
payments of interest on the Notes discounted at the sum of the comparable benchmark tenor yield.
Under the Notes Facility Agreement, the Company shall not permit its Debt-to-Equity (DE) ratio
to exceed 2.5:1 calculated based on the Company’s year-end audited parent company financial
statements. The Company is in compliance with the debt covenant as of December 31, 2011.
Total interest expense charged to the parent company statements of income amounted to
=221.2 million in 2011.
P
Unamortized deferred financing costs reduced the carrying amount of long-term debt by
=36.3 million as of December 31, 2011.
P
Fixed Rate Notes - P=5.0 billion

On September 28, 2009 (issue date), the Company availed a total of P =5.0 billion from the Notes
Facility Agreement it signed on September 18, 2009, with FMIC as Issue Manager, the proceeds
of which were used by the Company to finance its investments in various projects, including
capital expenditures and acquisitions. The Notes Facility Agreement provided for the issuance of
5-year corporate notes in a private placement to not more than 19 institutional investors pursuant
to Section 9.2 of the SRC and Rule 9.2(2) (B) of the SRC Rules.
*SGVMC409382*
- 29 -
Prior to the maturity date, the Company may redeem in whole and not a part only, of the relevant
outstanding notes on the 12th interest payment date. The amount payable in respect of such early
redemption shall be the accrued interest on the outstanding principal amount, the outstanding
principal amount and a prepayment penalty of 2% of the outstanding principal amount.
Under the Bond Trust Agreement, the Company shall not permit its DE ratio to exceed 2:1
calculated based on the Company’s year-end audited financial statements. For the purposes of
determining compliance with the required ratio, the outstanding preferred shares and contingent
liabilities of the Company, including but not limited to the liabilities in the form of corporate
guarantees in favor of any person or entity shall be included in the computation of debts. The
Company is in compliance with the debt covenant as of December 31, 2011 and 2010.
P =399.2 million in 2010, and P
=101.1 million in 2009.
=29.9 million and P
P =39.2 million as of December 31, 2011 and 2010, respectively.
Fixed Rate Notes - P=3.89 billion

On December 18, 2008 (issue date), the Company availed a total of P =3.89 billion from the Notes
Facility Agreement it signed on December 15, 2008 with BDO Capital & Investment Corporation,
BPI Capital Corporation, First Metro Investment Corporation (FMIC), and ING Bank N.V. -
Manila Branch as Joint Lead Managers, the proceeds of which were used to finance its
subsidiaries and associates’ acquisitions as well as for other general corporate purposes. The
Notes Facility Agreement provided for the issuance of 5-year and 7-year corporate notes in private
placements to not more than 19 institutional investors pursuant to Section 9.2 of the Securities
Regulation Code (SRC) and Rule 9.2(2) (B) of the SRC Rules.
Prior to the maturity date, the Company may redeem in whole the relevant outstanding notes on
the 12th interest payment date for the 5-year note and on the 16th interest payment date for the 7-
year note. The amount payable in respect of such early redemption shall be the accrued interest on
the outstanding principal amount, the outstanding principal amount and a prepayment penalty of
2.0% of the outstanding principal amount.
to exceed 2:1 calculated based on the Company’s year-end audited financial statements. For the
purpose of determining compliance with the required ratio, the outstanding preferred shares and
contingent liabilities of the Company, including but not limited to the liabilities in the form of
corporate guarantees in favor of any person or entity shall be included in the computation of debts.
The Company is in compliance with the debt covenant as of December 31, 2011 and 2010.
In December 2011, the P

=3.3 billion 5-year fixed-rate note was redeemed incurring P
=66.6 million
of prepayment penalty charges.
P =352.7 million in 2010 and P
=263.2 million in 2009.
=4.5 million and P
*SGVMC409382*
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Retail Bonds - P
=3.0 billion
On November 20, 2008, the Company’s BOD authorized the issuance of 5-year and 7-year
peso-denominated bonds worth P=3.0 billion, with an option to upsize depending on market
demand. This was approved by the SEC in March 2009. The bonds were offered to the general
public commencing April 15, 2009.
On April 30, 2009, the Company registered and issued the bonds worth P=3.0 billion. The proceeds
were used to partially finance APRI’s acquisition of Tiwi-Makban Geothermal Power Plants. As
provided in the Underwriting Agreement, the three-year bonds bear interest on principal amount
from and including issue date at 8.0% per annum. The five-year bonds bear interest on principal
amount from and including issue date at 8.7% per annum.
The Bonds have been rated PRS Aaa by Philippine Rating Services Corporation. The rating is
subject to regular annual reviews, or more frequently as market developments may dictate, for as
long as the bonds are outstanding.
Prior to the maturity date, the Company may redeem in whole and not a part of any of the relevant
outstanding 5-year bonds on the 12th interest payment date. The amount payable to the
bondholders in respect of such early redemption shall be calculated based on the principal amount
of the bonds being redeemed, as the sum of (i) one hundred two percent (102%) of the principal
amount of the 5-year bonds being earlier redeemed; and (ii) any accrued interest on the principal
amount of the 5-year bonds being earlier redeemed.
Under the Bond Trust Agreement, the Company shall not permit its DE ratio to exceed 2:1
calculated based on the Company’s year-end audited financial statements. For the purposes of
determining compliance with the required ratio, the outstanding preferred shares and contingent
liabilities of the Company, including but not limited to the liabilities in the form of corporate
guarantees in favor of any person or entity shall be included in the computation of debts. The
=300.2 million, P
P =263.8 million and P
=260.6 million in 2011, 2010 and 2009, respectively.
=15.9 million and P
14. Equity
a. Capital Stock
2011 2010
Authorized - P
=1 par value
Preferred shares - 1,000,000,000 shares
Common shares - 16,000,000,000 shares
Issued
Common shares - 7,358,604,307 shares P
=7,358,604,307 =7,358,604,307
P
There are no preferred shares issued and outstanding as of December 31, 2011 and 2010.
*SGVMC409382*
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Preferred shares are non-voting, non-participating, non-convertible, redeemable, cumulative,

and may be issued from time to time by the BOD in one or more series. The BOD is
authorized to issue from time to time before issuance thereof, the number of shares in each
series, and all the designations, relative rights, preferences, privileges and limitations of the
shares of each series. Preferred shares redeemed by the Company may be reissued. Holders
thereof are entitled to receive dividends payable out of the unrestricted retained earnings of the
Company at a rate based on the offer price that is either fixed or floating from the date of the
issuance to final redemption. In either case, the rate of dividend, whether fixed or floating,
shall be referenced, or be a discount or premium, to market-determined benchmark as the
BOD may determine at the time of issuance with due notice to the SEC.
In the event of any liquidation or dissolution or winding up of the Company, the holders of the
preferred stock shall be entitled to be paid in full the offer price of their shares before any
payment in liquidation is made upon the common stock.
On July 16, 2007, the Company listed with the PSE its common stock, wherein it offered
1,787,664,000 shares to the public at issue price of P
=5.80 per share. The total proceeds from
the issuance of new shares amounted to P =10.37 billion. The Company incurred transaction
costs incidental to the IPO amounting to P=412.4 million, which is charged against “Additional
paid-in capital” in the balance sheet.
As of December 31, 2011, 2010 and 2009, the Company has 530,483 and 498 shareholders,
respectively.
b. Retained Earnings
On February 11, 2009, the BOD approved the declaration of cash dividends of P =0.20 a share
(P
=1.47 billion) to all stockholders of record as of February 26, 2009. The cash dividends were
subsequently paid on March 23, 2009.
On March 10, 2010, the BOD approved the declaration of cash dividends of P =0.30 a share
(P
=2.21 billion) to all stockholders of record as of March 24, 2010. The cash dividends were
subsequently paid on April 16, 2010.
(P
=9.71 billion) to all stockholders of record as of March 17, 2011. The cash dividends are
payable on April 5, 2011.
(P
15. Personnel Costs
2011 2010 2009

Salaries and wages =135,027,109 P
P =74,815,636 =36,641,816
P
Employee benefits 30,026,735 17,845,423 9,728,897
Retirement costs (see Note 16) 21,568,626 17,211,073 5,362,670
=186,622,470 =
P P109,872,132 =51,733,383
P
*SGVMC409382*
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16. Retirement Costs
The Company has a defined benefit pension plan covering substantially all of its regular
employees. The benefits are based on the years of service and percentage of latest monthly salary.
Total retirement costs charged to operations amounted to P
=21.6 million in 2011, P=17.2 million in
2010 and P =5.4 million in 2009.
The following tables summarize the components of net benefit expense recognized in the parent
company statements of income and the funded status and amounts recognized in the parent
company balance sheets for the plan:
Net benefit expense

2011 2010 2009
Current service cost P
=12,641,000 P7,432,700
= P822,557
=
Interest cost 15,118,422 12,086,250 11,500,515
Expected return on plan assets (10,489,467) (6,469,600) (6,147,369)
Net actuarial loss (gain)
recognized
in the year 4,298,671 4,161,723 (813,033)
P
=21,568,626 =17,211,073
P =5,362,670
P
Actual return on plan assets P

=8,709,300 =3,521,198
P =3,398,791
P
Pension liability (asset)

2011 2010
Defined benefit obligation P
=281,131,100 =183,476,000
P
Unrecognized net actuarial loss (156,273,575) (91,425,000)
Fair value of plan assets (173,728,426) (149,849,527)
(P
=48,870,901) (P
=57,798,527)
Changes in the present value of the defined benefit obligation are as follows:
2011 2010
Opening defined benefit obligation P
=183,476,000 =134,740,702
P
Actuarial losses on obligation 67,367,051 25,061,948
Interest cost 15,118,422 12,086,250
Current service cost 12,641,000 7,432,700
Transfer from subsidiaries 2,528,627 4,154,400
Closing defined benefit obligation P
=281,131,100 =183,476,000
P
Changes in the fair value of plan assets are as follows:
2011 2010
Opening fair value of plan assets P
=149,849,527 =64,696,229
P
Contributions by employer 12,641,000 77,477,700
Expected return on plan assets 10,489,467 6,469,600
Transfer from subsidiaries 2,528,599 4,154,400
Actuarial losses on plan assets (1,780,167) (2,948,402)
Closing fair value of plan assets P
=173,728,426 =149,849,527
P
*SGVMC409382*
- 33 -
The Company expects to make the same contribution in 2012 as in 2011.
The principal assumptions used as of December 31 to determine retirement benefits are as follows:
2011 2010 2009

Discount rate 6.32% 8.24% 8.97%
Expected rate of return on assets 7.00% 7.00% 10.00%
Future salary increase 6.00% 6.00% 8.00%
Amounts for the current and previous four periods follow:
2011 2010 2009 2008 2007

Defined benefit obligation = 281,131,100 =
P P183,476,000 =134,740,702
P =35,627,371
P =48,429,411
P
Fair value of plan assets 173,728,426 149,849,527 64,696,229 55,885,177 51,487,461
Surplus (deficit) (107,402,674) (33,626,473) (70,044,473) 20,257,806 3,058,050
Experience adjustments on
pension liabilities 67,367,051 25,061,948 85,050,900 (19,678,981) (3,507,975)
Experience adjustments on
pension asset (1,780,195) (2,948,402) (2,748,578) (2,519,953) 1,535,702
Major categories of plan assets are the following:
2011 2010
Commercial papers P
=166,874,855 =142,254,464
P
Others 6,853,571 7,595,063
P
=173,728,426 =149,849,527
P
17. Income Tax
Details of provision for (benefit from) income tax are as follows:
2011 2010 2009

Current
Corporate income tax P
=7,083,083 =23,775,054
P =14,535,971
P
Final 85,676,619 17,636,611 53,767,097
92,759,702 41,411,665 68,303,068
Deferred 1,994,983 82,962,486 (232,027,190)
P
=94,754,685 =124,374,151
P (P
=163,724,122)
The provision for corporate income tax represents MCIT in 2011, 2010 and 2009.
*SGVMC409382*
- 34 -
The reconciliation of income tax computed at the statutory tax rate to the provision for income tax
reported in the parent company statements of income is as follows:
2011 2010 2009

At statutory rate of 30% P
=11,266,573,939 =306,186,425
P =436,984,553
P
Additions to (reductions in) income tax
resulting from:
Unrecognized deferred income tax asset on:
NOLCO 352,109,510 114,822,403 –
MCIT 7,083,083 23,775,054 –
Final tax on interest income 85,676,619 17,636,611 53,767,097
Nondeductible interest expense 42,944,351 8,825,291 29,144,651
Expired MCIT – 2,643,079 –
Interest income already subjected to
final tax at a lower rate (130,134,396) (26,743,307) (88,317,125)
Dividend income (11,529,498,421) (322,771,405) (594,879,704)
Others – – (423,594)
P
=94,754,685 =124,374,151
P (P
=163,724,122)
The components of the Company’s net deferred income tax assets are as follows:
2011 2010
Deferred income tax assets:
NOLCO P
=93,873,663 =93,873,663
P
Unamortized past service cost 19,133,992 21,699,980
MCIT 14,535,971 14,535,971
127,543,626 130,109,614
Deferred income tax liabilities:
Accrual of pension cost (14,661,270) (17,339,558)
Unrealized foreign exchange gain (3,439,454) (1,332,171)
(18,100,724) (18,671,729)
P
=109,442,902 =111,437,885
P
As of December 31, 2011, the Company has MCIT that can be claimed as deduction from regular
income tax liability as follows:
Period of Recognition Availment Period Amount Applied Expired Balance

2009 2010-2012 =14,535,971
P =–
P =–
P =14,535,971
P
2010 2011-2013 23,775,054 – – 23,775,054
2011 2012-2014 7,083,083 – – 7,083,083
=45,394,108
P =–
P =–
P =45,394,108
P
As of December 31, 2011, the Company has NOLCO which can be claimed as deduction against
the regular taxable income as follows:
Period of Recognition Availment Period Amount Applied Expired Balance

2009 2010-2012 =326,163,623
P =–
P =–
P =326,163,623
P
2010 2011-2013 369,489,930 – – 369,489,930
2011 2012-2014 352,109,510 – – 352,109,510
=1,047,763,063
P =–
P =– =
P P1,047,763,063
*SGVMC409382*
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The Company did not recognize deferred income tax assets from MCIT amounting to P =7.1 million
and P
=23.8 million as of December 31, 2011 and 2010, respectively, and NOLCO amounting to
P =369.5 million as of December 31, 2011 and 2010, respectively, since
management expects that it will not generate sufficient taxable income in the future that will be
available to allow all of the deferred income tax assets to be utilized.
18. Related Party Disclosures
The Company, in its normal course of business, has transactions with its related parties, which
consist of the following:
a. The Company has management agreements with each of the following subsidiaries: CLP,
Cotabato Ice Plant, Inc. (CIPI), DLP, CPPC, SEZ and HI, for which it is entitled to
management fees. Management fees charged to related parties amounted to P =262.5 million in
2011, P
=242.4 million in 2010 and P=215.5 million in 2009.
b. The Company served as a guarantor on a loan obtained by HI from a local bank up to

March 27, 2009. Since then, the Company ceased to be the guarantor of the loan of HI and
transferred the same to ARI. As a guarantor, the Company received a guarantee fee
amounting to nil in 2011 and 2010, and P
=3.1 million in 2009 (presented as part of “Other
income” in the parent company statements of income).
The Company also obtained standby letters of credit (SBLC) and is acting as surety for the
benefit of certain subsidiaries and associates in connection with certain loans and credit
accommodations. As at December 31, 2011, the Company provided SBLC’s for APRI and
SNAP B in the amount of = P2.5 billion; guarantee on the bank loans of CLP, DLP, HI and SEZ
in the amount of P=1.6 billion. As at December 31, 2010, the Company provided SBLC’s for
STEAG, LHC, SNAPM, SNAPB, HI and HSI in the amount of = P1.7 billion; guarantee on the
bank loans of CLP, DLP, HI and SEZ in the amount of P =689.8 million.
c. The Company renders various services to related parties such as technical and legal assistance
for various projects, trainings and other services. Fees charged to related parties for these
services amounted to P =207.9 million in 2011, P=143.7 million in 2010 and P=2.2 million in
2009.
d. Technical and management fees charged by AEV to the Company amounted to nil in 2011 and
2010, and P
=40.0 million in 2009.
e. Share in information technology project costs of AEV amounted to nil in 2011 and 2010, and
P
f. Cash deposits with Unionbank of the Philippines (UBP) at prevailing market terms. UBP is
an associate of AEV. Total cash deposit amounted to P=1.6 billion and P
=2.7 billion as of
December 31, 2011 and 2010, respectively. Total interest income earned on deposits with
UBP amounted to P =72.1 million, P
=38.0 million and P
= 139.9 million in 2011, 2010 and 2009,
respectively.
g. Unsecured advances to ACO and AEV for operational charges earn interest at 4% per annum,
with no fixed payment terms. Advances amounted to nil and P =15.7 million as of
December 31, 2011 and 2010, respectively. Interest income earned on these deposits
amounted to P=0.2 million in 2011, P
*SGVMC409382*
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h. Interest bearing advances are payable within one year. Interest income earned on these
advances amounted to P =4.0 million in 2011, P
i. Lease of commercial office units by the Company for a period of one year renewable at the
end of term and use of function rooms and staff house from Cebu Praedia Development
Corporation (CPDC). Total expenses amounted to P =5.1 million in 2011, P
=3.7 million in 2010
and P
=1.4 million in 2009. CPDC is a subsidiary of AEV.
j. Aviation services rendered by AEV AVI, a subsidiary of AEV, to the Company. Total
expenses amounted to P=16 million in 2011, P
k. Total compensation and benefits of key management personnel of the Company are as
follows:
2011 2010 2009

Short-term benefits P
=132,901,182 =73,009,329
P =51,840,857
P
Post employment benefits 8,568,818 5,590,671 4,509,143
P
=141,470,000 =78,600,000
P =56,350,000
P
The parent company balance sheets include the following significant amounts resulting from the
above transactions:
Receivables from Amounts Owed by Amounts Owed to
Related Parties a related party Related Parties
Name of Company 2011 2010 2011 2010 2011 2010

Parents:
AEV (Immediate) P
=373,610 =15,428,990
P P
=– =–
P P
=– =–
P
ACO (Ultimate) – 319,560 – – – –
Subsidiaries:
TPI 6,450 – – – – 3,113,662,486
ARI 161 – – 10,361,676,174 – –
TLI 21,802,867 21,086,208 – – – –
APRI 21,589,636 20,602,766 – – – –
DLP 19,374,903 16,307,874 – – – –
CLP 1,256,035 1,245,184 – – – –
TPVI 918,050 903,739 – – – –
Therma Marine 580,619 17,043,318 – – – –
SEZ 301,076 154,307 – – – –
AESI 270,619 191,259 – – – –
Abovant 1,141 – – – – –
HI – 21,957,814 – – – –
Prism Energy, Inc. 73,368 792,454 – – – –
AI 26,653 – – – – –
Therma South, Inc. 521,068 – – – – –
CPPC 38,012 – – – – –
MEZ 28,988 – – – – –
Therma Mobile 19,924 – – – – –
BEZ 1,671 – – – – –
CIPI 155,733 – – – – –
Associates:
CEDC 36,520,000 45,100,000 – – – –
MORE 894,103 4,860,500 – – – –
VECO 351,167 9,341,766 – – – –
SNAPM 79,913 4,860,500 – – – –
SNAPB 178,699 – – – – –
EAUC 20,646 2,825 – – 18,415,300 129,999,300
RPEI 17,227 15,782,252 – – – –
SFELAPCO 38,203 – – – – –
Mazzaraty Energy Corporation – 560,856 – – – –
*SGVMC409382*
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19. Financial Risk Management Objectives and Policies
The Company’s principal financial instruments comprise of cash and cash equivalents and long-
term debt. The main purpose of these financial instruments is to raise financing for the
Company’s operations. The Company has various other financial instruments such as trade and
other receivables, amounts owed by related parties, trade and other payables, amounts owed to
related parties, bank loans and long-term debts, which arise directly from its operations.
The Company also enters into derivative transactions, particularly foreign currency forwards, to
economically hedge its foreign currency risk from foreign currency denominated liabilities and
purchases (see Note 20).
Financial risk committee

The Financial Risk Committee has the overall responsibility for the development of risk strategies,
principles, frameworks, policies and limits. It establishes a forum of discussion of the Company’s
approach to risk issues in order to make relevant decisions.
Treasury Service Group

The Treasury Service Group is responsible for the comprehensive monitoring, evaluating and
analyzing of the Company’s risks in line with the policies and limits.
The main risks arising from the Company’s financial instruments are credit risk involving possible
exposure to counter party default on its cash and cash equivalents, trade and other receivables and
derivative asset; liquidity risk in terms of the proper matching of the type of financing required for
specific investments; and foreign exchange risk in terms of foreign exchange fluctuations that may
significantly affect its foreign currency denominated placements.
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the Company.
The Company’s credit risk on cash in banks and cash equivalents, trade and other receivables,
amounts owed by a related party and derivative asset pertains to possible default by the
counterparty, with a maximum exposure equal to the carrying amount of these assets. With
respect to cash in banks and cash equivalents, the risk is mitigated by the short-term and/or liquid
nature of its short-term investments mainly in bank deposits and placements, which are placed
with financial institutions of high credit standing. With respect to receivables from related parties,
other receivables and derivative asset, credit risk is controlled by the application of credit
approval, limit and monitoring procedures. It is the Company’s policy that all debtors who wish
to trade on credit terms are subject to credit procedures. In addition, receivable balances are
monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not
significant.
The Company has no significant concentration risk to a counterparty or group of counterparties.
*SGVMC409382*
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The credit quality per class of financial assets as of December 31 is as follows (amounts in
thousands):
2011
Past due
Neither past due nor impaired but not
High Grade Standard Sub-standard impaired Total
Cash and cash equivalents P
=7,900,015 P
=– P
=– P
=– P
=7,900,015
Trade and other receivables 261,543 – – 11,884 273,427
Total P
=8,161,558 P
=– P
=– P
=11,884 P
=8,173,442
2010
Past due
Neither past due nor impaired but not
Cash and cash equivalents =11,081,930
P =–
P =–
P =–
P =11,081,930
P
Trade and other receivables 312,862 – – 16,297 329,159
Amounts owed by a related party 10,361,676 – – – 10,361,676
Derivative asset 7,670 – – – 7,670
Total =21,764,138
P =–
P =–
P =16,297
P =21,780,435
P
High grade - pertain to receivables from customers with good favorable credit standing and have
no history of default.
Standard grade - pertain to those customers with history of sliding beyond the credit terms but pay
a week after being past due.
Sub-standard grade - pertain to those customers with payment habits that normally extend beyond
the approved credit terms, and has high probability of being impaired.
The aging analyses of financial assets as of December 31 are as follows (amounts in thousands):
2011
Neither Past due but not impaired
past due nor 30 - 60 More than
Total impaired 30 days days 60 days
=7,900,015 P
=7,900,015 P
=– P
=– P
=–
Trade and other receivables 273,427 261,543 – 1,996 9,888
Total P
=8,173,442 P
=8,161,558 P
=– P=1,996 P
=9,888
2010
Neither Past due but not impaired
past due nor 30 - 60 More than
Total impaired 30 days days 60 days
Cash and cash equivalents =11,081,930
P =11,081,930
P =–
P =–
P =–
P
Trade and other receivables 329,159 312,862 – 13,303 2,994
Amounts owed by a related party 10,361,676 10,361,676 – – –
Derivative asset 7,670 7,670 – – –
Total =21,780,435
P =21,764,138
P =–
P =13,303
P =2,994
P
Liquidity risk
Liquidity risk is the potential of not meeting obligations as they come due because of an inability
to liquidate assets or obtain adequate funding. The Company maintains sufficient cash and cash
equivalents to finance its operations. Any excess cash is invested in short-term money market
*SGVMC409382*
- 39 -
placements. These placements are maintained to meet maturing obligations and pay dividend
declarations.
In managing its short-term fund requirements, the Company’s policy is to ensure that there are
sufficient working capital inflows to match repayments of short-term borrowings. With regard to
its long-term financing requirements, the Company’s policy is that not more than 25% of long-
term borrowings should mature in any 12-month period.
The following tables summarize the maturity profile of the Company’s financial liabilities based
on contractual undiscounted payments as of December 31(amounts in thousands):
2011
Total Contractual undiscounted payments
Carrying On Less than
Value Total Demand 1 year 1 to 5 years
Long-term debts P
=13,456,678 P
=14,358,520 P
=– P
=726,299 P
=13,632,221
Amounts owed to related parties 18,415 18,415 18,415 – –
Trade and other payables 192,115 192,115 192,115 – –
Derivative Liability 736 736 736 – –
Total P
=13,667,944 P
=14,569,786 P
=211,266 P
=726,799 P
=13,632,221
2010
Total Contractual undiscounted payments
Carrying On Less than
Value Total Demand 1 year 1 to 5 years
Bank loans =1,290,000
P P1,293,386
= =–
P =1,293,386
P =–
P
Long-term debts 11,782,689 15,324,086 – 1,030,674 14,293,412
Amounts owed to related parties 3,243,662 3,243,662 3,243,662 – –
Trade and other payables 76,145 76,145 – 76,145 –
Total =16,392,496
P =19,937,279
P =3,243,662
P =2,400,205
P =14,293,412
P
Market Risk
The risk of loss, immediate or over time, due to adverse fluctuations in the price or market value
of instruments, products, and transactions in the Company’s overall portfolio (whether on or off-
balance sheet) is market risk. These are influenced by foreign and domestic interest rates, foreign
exchange rates and gross domestic product growth.
Foreign exchange risk

The foreign exchange risk of the Company pertains to its foreign currency-denominated cash and
cash equivalents and receivables from related parties.
The foreign currency-denominated monetary assets and liability and their Philippine Peso
equivalents follow:
2011 2010
US Dollar Peso Equivalent US Dollar Peso Equivalent
Financial assets
Cash and cash equivalents $9,523,160 =417,495,351
P $6,583,731 =288,630,767
P
Receivables from related
parties – – 224,705 9,851,067
$9,523,160 =417,495,351
P $6,808,436 =298,481,834
P
*SGVMC409382*
- 40 -
The exchange rate for both December 31, 2011 and 2010 is P =43.84 per US$1. As a result of the
translation of these foreign currency denominated assets, the Company reported net unrealized
foreign exchange gain of P =7.0 million and P
=272.0 million in 2011 and 2010, respectively.
The following tables demonstrate the sensitivity to a reasonably possible change in the US dollar
exchange rates, with all other variables held constant, of the Company’s income before income tax
as of December 31, 2011 and 2010 (amounts in thousands).
Increase Effect
(decrease) in on income
US dollar before tax
2011
US dollar-denominated accounts 5% P
=20,875
US dollar-denominated accounts (5%) (20,875)
2010
US dollar-denominated accounts 5% P14,924
=
US dollar-denominated accounts (5%) (14,924)
There is no other impact on the Company’s equity other than those already affecting the parent
company statements of income.
Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support its business and maximize shareholder
value. The Company considers equity as its capital.
The Company manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Company may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. No changes
were made in the objectives, policies or processes during the years ended December 31, 2011 and
2010.
The Company monitors capital using a gearing ratio, which is net debt divided by equity plus net
debt. Its policy is to keep the gearing ratio at 70% or below. The Company determines net debt as
the sum of interest-bearing short-term and long-term loans less cash and short-term deposits and
interest bearing advances to related parties.
Gearing ratios of the Company are as follows:
2011 2010
Long-term debts P
=12,746,572,445 =11,777,089,340
P
Current portion of long-term debts 710,105,174 5,600,000
Bank loans – 1,290,000,000
Cash and cash equivalents (7,900,014,865) (11,081,929,955)
Net debt (a) 5,556,662,754 1,990,759,385
Equity 51,807,179,542 24,060,045,449
Equity and net debt (b) P
=57,363,842,296 =26,050,804,834
P
Gearing ratio (a/b) 9.69% 7.64%
The Company is also subject to externally imposed capital requirements (see Note 13).
*SGVMC409382*
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20. Financial Instruments
Classification of Financial Instruments
2011
Financial liability Loans and Other financial
Cash at FVPL receivables liabilities Total
Assets
=440,000 P
=– P
=7,899,574,865 P
=– P
=7,900,014,865
Trade and other receivables – – 273,427,168 – 273,427,168
P
=440,000 P
=– P
=8,173,002,033 P
=– P
=8,173,442,033
Liabilities
Long-term debts P
=– P
=– P
=– P
=13,456,677,619 P
=13,456,677,619
Amounts owed to related parties – – – 18,415,300 18,415,300
Trade and other payables – – – 216,279,791 216,279,791
Derivative liability – 736,250 – – 736,250
P
=– P
=736,250 P
=– P
=13,691,372,710 P
=13,692,108,960
2010
Financial asset Loans and Other financial
Cash at FVPL receivables liabilities Total
Assets
Cash and cash equivalents =155,000
P =–
P =11,081,774,955
P =–
P =11,081,929,955
P
Trade and other receivables – – 329,159,304 – 329,159,304
Amounts owed by a related party – – 10,361,676,174 – 10,361,676,174
Derivative asset – 7,669,730 – – 7,669,730
=155,000
P =7,669,730
P P
=21,772,610,433 =–
P =21,780,435,163
P
Liabilities
Bank loans =–
P =–
P =–
P P1,290,000,000
= P1,290,000,000
=
Long-term debts – – – 11,782,689,340 11,782,689,340
Amounts owed to related parties – – – 3,243,661,786 3,243,661,786
Trade and other payables – – – 110,405,245 110,405,245
=–
P =–
P =–
P =16,426,756,371
P P
=16,426,756,371
Fair Value of Financial Instruments

Set out below is a comparison by category of the carrying amounts and fair value of all of the
Company’s financial instruments that are carried in the financial statements as of
December 31, 2011 and 2010 (amounts in thousands).
2011 2010
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial Assets
=7,900,015 P
=7,900,015 =11,081,930
P =11,081,930
P
Trade and other receivables 273,427 273,427 329,159 329,159
Amounts owed by a related party – – 10,361,676 10,361,676
Derivative asset – – 7,670 7,670
Financial Liabilities
Bank loans – – 1,290,000 1,290,000
Trade and other payables 192,115 192,115 110,405 110,405
Amounts owed to related parties 18,415 18,415 3,243,662 3,243,662
Long-term debts 13,456,678 14,271,998 11,777,089 12,802,396
Derivative liability 736 736 – –
Fair value is defined as the amount at which the financial instruments could be exchanged in a
current transaction between knowledgeable willing parties in an arm’s length transaction, other
than in a forced liquidation or sale. Fair values are obtained from quoted market prices,
discounted cash flows models and option pricing models, as appropriate.
*SGVMC409382*
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Cash and cash equivalents, trade and other receivables, amounts owed by a related party, bank
loans, trade and other payables, and amounts owed to related parties
The carrying amounts of cash and cash equivalents, trade and other receivables, amounts owed by
a related party, bank loan, trade and other payables and amounts owed to related parties
approximate fair value due to the relatively short-term maturity of these financial instruments.
Derivative asset and liability

The fair value is calculated by reference to prevailing interest rate differential and spot exchange
rate as of valuation date, taking into account its remaining term to maturity.
Long-term debts
The fair value of long-term debt is based on the discounted value of future cash flows using the
applicable rates for similar types of loans. Discounts rates used range from 6.17% to 9.33% in
2011 and 8.00% to 9.33% in 2010.
Derivative Financial Instruments

The Company enters into short-term forward contracts with counterparty banks to manage foreign
currency risks associated with foreign currency-denominated liabilities and purchases.
As of December 31, 2011, the Company has outstanding buy Dollar and sell Peso forward
exchange contracts with counterparty banks with an aggregate notional amount of
$0.3 million and remaining maturities of 1 month. As at December 31, 2011, the forward rates
related to the forward contracts range from P =43.84 to P
=44.81 per US$1. The Company recognized
derivative asset relating to these contracts amounting to P
=0.2 million.
As of December 31, 2011, the Company also has outstanding non-deliverable sell US Dollar buy
EURO short-term forward exchange contracts with a counterparty bank with an aggregate notional
amount of €0.30 million and remaining maturities of 1 month. As at December 31, 2011, the
forward rates related to the forward contracts amounted to €1.2950 to €1.3050 per US$1. The
Company recognized derivative liability relating to these contracts amounting to P
=0.9 million.
As of December 31, 2010, the Company has outstanding non-deliverable buy Dollar and sell Peso
forward exchange contracts with counterparty bank with an aggregate notional amount of
$56.4 million and remaining maturities of less than 1 month to 8 months. As at December 31,
2010, the forward rates related to the forward contracts range from P
=43.84 to P
=44.13 per US$1.
The Company recognized derivative asset relating to these contracts amounting to P=5.4 million.
As of December 31, 2010, the Company also has outstanding non-deliverable sell US Dollar buy
EURO short-term forward exchange contracts with a counterparty bank with an aggregate notional
amount of €0.84 million and remaining maturities of 2 months to 8 months. As at December 31,
2010, the forward rates related to the forward contracts amounted to €1.3413 to €1.3421 per US$1.
The Company recognized derivative asset relating to these contracts amounting to P=3.1 million.
*SGVMC409382*
- 43 -
The movements in fair value changes of all derivative instruments for the years ended
December 31, 2011 and 2010 are as follows:
2011 2010
At beginning of year P
=7,669,730 (P
=3,130,290)
Net changes in fair value of derivatives not
designated as accounting hedges (8,893,542) (45,153,092)
Fair value of settled instruments 487,562 55,953,112
At end of year (P
=736,250) =7,669,730
P
The loss from the net fair value changes relating to the forward contracts amounting to
P =45.2 million in 2010 are included under “Foreign exchange gains
(losses) - net” in the parent company statements of income.
Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that
are not based on observable market data.
Only the Company’s derivative instruments, which are classified under Level 2, are measured at
fair value. During the reporting period ending December 31, 2011 and 2010, there were no
transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of
Level 3 fair value measurements were made.
21. Electric Power Industry Reform Act (EPIRA) of 2001
RA No. 9136 was signed into law on June 8, 2001 and took effect on June 26, 2001. The law
provides for the privatization of National Power Corporation (NPC) and the restructuring of the
electric power industry. The Implementing Rules and Regulations (IRR) were approved by the
Joint Congressional Power Commission on February 27, 2002.
R.A. No. 9136 and the IRR impact the industry as a whole. The law also empowers the ERC to
enforce rules to encourage competition and penalize anti-competitive behavior.
R.A. Act No. 9136, the EPIRA, and the covering IRR provides for significant changes in the
power sector, which include among others:
i. The unbundling of the generation, transmission, distribution and supply and other disposable
assets of a company, including its contracts with independent power producers and electricity
rates;
ii. Creation of a Wholesale Electricity Spot Market; and
iii. Open and non-discriminatory access to transmission and distribution systems.
*SGVMC409382*
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The law also requires public listing of not less than 15% of common shares of generation and
distribution companies within 5 years from the effectivity date of the EPIRA. It provides cross
ownership restrictions between transmission and generation companies and a cap of 50% of its
demand that a distribution utility is allowed to source from an associated company engaged in
generation except for contracts entered into prior to the effectivity of the EPIRA.
There are also certain sections of the EPIRA, specifically relating to generation companies, which
provide for a cap on the concentration of ownership to only 30% of the installed capacity of the
grid and/or 25% of the national installed generating capacity.
22. Renewable Energy Act of 2008
On January 30, 2009, RA No. 9513, An Act Promoting the Development, Utilization and
Commercialization of Renewable Energy Resources and for Other Purposes, which shall be
known as the “Renewable Energy Act of 2008” (the Act), became effective. The Act aims to
(a) accelerate the exploration and development of renewable energy resources such as, but not
limited to, biomass, solar, wind, hydro, geothermal and ocean energy sources, including hybrid
systems, to achieve energy self-reliance, through the adoption of sustainable energy development
strategies to reduce the country’s dependence on fossil fuels and thereby minimize the country’s
exposure to price fluctuations in the international markets, the effects of which spiral down to
almost all sectors of the economy; (b) increase the utilization of renewable energy by
institutionalizing the development of national and local capabilities in the use of renewable energy
systems, and promoting its efficient and cost-effective commercial application by providing fiscal
and non-fiscal incentives; (c) encourage the development and utilization of renewable energy
resources as tools to effectively prevent or reduce harmful emissions and thereby balance the
goals of economic growth and development with the protection of health and environment; and
(d) establish the necessary infrastructure and mechanism to carry out mandates specified in the
Act and other laws.
As provided for in the Act, renewable energy (RE) developers of RE facilities, including hybrid
systems, in proportion to and to the extent of the RE component, for both power and non-power
applications, as duly certified by the Department of Energy (DOE), in consultation with the Board
of Investments (BOI), shall be entitled to incentives, such as, income tax holiday, duty-free
importation of RE machinery, equipment and materials, zero percent VAT rate on sale of power
from RE sources, and tax exemption of carbon credits, among others.
The Company expects that the Act may have significant effect on the operating results of some
of its subsidiaries and associates that are RE developers. Impact on the operating results is
expected to arise from the effective reduction in taxes.
*SGVMC409382*
- 45 -
23. Supplementary Tax Information Required Under Revenue Regulations (RR) 19-2011
On December 9, 2011, the BIR issued RR No. 19-2011 prescribing the new income tax forms to
be used effective calendar year 2011. In the case of corporations using BIR Form 1702, the
taxpayer is now required to include as part of its notes to the audited financial statements, which
will be attached to the income tax return, schedules and information on taxable income and
deductions taken.
The schedule and information of taxable income and deductions taken for 2011 are as follows:
a. Schedule of Sales/Revenues/Receipts/Fees
Regular Rate
Sale of services P470,388,576
=
b. Cost of Services
Regular Rate
Direct charges - salaries and wages =70,175,913
P
Direct charges – SSS, HDMF & PHIC Contribution 951,628
Direct charges – Contribution paid to Retirement Fund 11,015,040
Direct charges – other benefits 12,738,041
Direct charges - materials, supplies and communication 2,931,475
Direct charges – depreciation 5,979,226
Direct charges – rental 3,969,168
Direct charges – outside services 15,477,609
Direct charges – others 3,237,649
=126,475,749
P
c. Non-operating and Taxable Other Income Not Subjected to Final Tax
Regular Rate
Interest Income not subject to final tax =4,237,686
P
Others 6,003,638
=10,241,324
P
*SGVMC409382*
- 46 -
d. Itemized Deductions
Regular Rate
Salaries and wages =94,019,924
P
Fringe benefits 369,720
Rental 3,668,000
Professional Fees 4,711,588
Director's Fees 9,591,631
Janitorial and Messengerial Services 126,933
Other Outside Services 45,021,882
Advertising 22,694,601
Research and development 12,772,387
Interest 1,212,088,472
Insurance 3,361,235
Repairs and maintenance 666,347
Representation and entertainment 1,868,404
Transportation and travel 49,884,025
Communication, Light and Water 3,527,808
Supplies & Communication 2,709,045
Freight & Handling 645,600
Taxes and licenses 3,087,677
Depreciation 5,252,414
Amortization of intangibles 273,128
Bidding Expenses 1,076,971
Charitable contribution 23,715,635
Realized foreign exchange loss 11,232,234
Miscellaneous 15,486,856
=1,527,852,517
P
24. Supplementary Information Required Under Revenue Regulations (RR) 15-2010
The Company also reported and/or paid the following types of taxes for the year:
Value-added tax (VAT)
The Company’s sales are subject to output value added tax (VAT) while its importations and
purchases from other VAT-registered individuals or corporations are subject to input VAT. The
VAT rate is 12.0%.
a. Net Receipts and Output VAT declared in the Company’s VAT returns in 2010
Net Sales/ Output

Receipts VAT
Taxable Sales:
Sales of services =504,409,392
P =60,529,127
P
Zero-rated sales 120,000 –
=504,529,392
P =60,529,127
P
The Company’s sales that are subject to VAT are reported under the following accounts:
Service Income - Management fees
Service Income - Professional fees
Service Income - Technical fees
*SGVMC409382*
-2-
December 31
2011 2010
Equity Attributable to Equity Holders of the Parent
Capital stock (Note 19a) P7,358,604
= P7,358,604
=
Additional paid-in capital 12,588,894 12,588,894
Share in net unrealized valuation gains on AFS investments
of an associate (Note 9) 73,952 78,118
Cumulative translation adjustments (57,668) –
Share in cumulative translation adjustments of associates (Note 9) (546,753) 57,922
Acquisition of non-controlling interests (259,147) (259,147)
Retained earnings (Note 19b) 49,400,692 37,505,797
68,558,574 57,330,188
Non-controlling Interests 1,633,643 404,022
Total Equity 70,192,217 57,734,210
TOTAL LIABILITIES AND EQUITY =153,527,939
P =134,556,872
P
See accompanying Notes to Consolidated Financial Statements.
*SGVMC410781*
ABOITIZ POWER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Earnings Per Share Amounts)
Years Ended December 31

2011 2010 2009
OPERATING REVENUES
Sale of power (Notes 20 and 30):
Generation P39,944,982
= P46,313,904
= P12,359,479
=
Distribution 14,356,619 13,064,593 10,734,427
Services 51,917 62,524 61,598
Technical, management and other fees (Note 31) 122,119 110,437 18,761
54,475,637 59,551,458 23,174,265
OPERATING EXPENSES
Cost of generated power (Note 22) 15,082,003 15,882,326 5,030,277
Cost of purchased power (Note 21) 11,205,168 10,001,570 8,032,562
Depreciation and amortization (Notes 11, 12 and 13) 3,345,782 3,003,977 1,412,900
Operations and maintenance (Note 24) 2,218,047 2,437,928 1,336,987
General and administrative (Note 23) 2,259,831 1,986,826 1,902,428
Cost of services 9,391 7,251 2,944
34,120,222 33,319,878 17,718,098
FINANCIAL INCOME (EXPENSES)

Interest income (Notes 4 and 31) 861,521 224,158 409,972
Interest expense and other financing costs (Note 32) (7,345,575) (6,678,293) (2,813,978)
(6,484,054) (6,454,135) (2,404,006)
OTHER INCOME
Share in net earnings of associates (Note 9) 8,436,906 4,625,883 2,535,386
Other income - net (Note 27) 692,849 1,600,399 813,411
9,129,755 6,226,282 3,348,797
INCOME BEFORE INCOME TAX 23,001,116 26,003,727 6,400,958
PROVISION FOR INCOME TAX - net (Note 28) 1,117,209 920,697 631,190
NET INCOME = 21,883,907

P =25,083,030
P =5,769,768
P
Attributable to:
Equity holders of the parent = 21,608,253
P =25,041,116
P =5,658,581
P
Non-controlling interests 275,654 41,914 111,187
= 21,883,907
P =25,083,030
P =5,769,768
P
EARNINGS PER COMMON SHARE (Note 29)

Basic and diluted, for income for the year attributable to
ordinary equity holders of the parent = 2.94
P =3.40
P =0.77
P
*SGVMC410781*
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Thousands)

2011 2010 2009
NET INCOME ATTRIBUTABLE TO:

Equity holders of the parent =21,608,253
P =25,041,116
P =5,658,581
P
21,883,907 25,083,030 5,769,768
OTHER COMPREHENSIVE INCOME (LOSS)

Share in net unrealized valuation gains (losses) on AFS
investments of an associate (Note 9) (4,166) 78,118 –
Movement in cumulative translation adjustments (57,668) – –
Share in movement in cumulative translation adjustment of
associates (Note 9) (604,675) (57,324) 133,668
Total other comprehensive income for the year, net of tax (666,509) 20,794 133,668
TOTAL COMPREHENSIVE INCOME =21,217,398
P =25,103,824
P =5,903,436
P
Attributable to:
Equity holders of the parent =20,941,744
P =25,061,910
P =5,792,249
P
=21,217,398
P =25,103,824
P =5,903,436
P
*SGVMC410781*
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009
(Amounts in Thousands, Except Dividends Per Share Amounts)
Attributable to Equity Holders of the Parent

Share in Net
Unrealized Share in
Valuation Cumulative
Gains on AFS Movement in Translation Acquisition of
Capital Investments of Cumulative Adjustments Non- Retained Non-
Stock Additional an Associate Translation of Associates controlling Earnings controlling
(Note 19a)Paid-in Capital (Note 9) Adjustments (Note 9) Interests (Note 19b) Interests Total
Balances at January 1, 2011 P

=7,358,604 P
=12,588,894 P
=78,118 P
=– P
=57,922 (P
= 259,147) P
=37,505,797 P
=404,022 P
= 57,734,210
Net income for the year – – – – – 21,608,253 275,654 21,883,907
Other comprehensive loss – – (4,166) (57,668) (604,675) – – – (666,509)
Total comprehensive income (loss) for the year – – (4,166) (57,668) (604,675) – 21,608,253 275,654 21,217,398
Cash dividends - =
P1.32 a share (Note 19b) – – – – – – (9,713,358) – (9,713,358)
Cash dividends paid to non-controlling
interests – – – – – – – (79,633) (79,633)
Change in non-controlling interests – – – – – – – 1,033,600 1,033,600
Balances at December 31, 2011 P
=7,358,604 P
=12,588,894 P
=73,952 (P
= 57,668) (P
= 546,753) (P
= 259,147) P
=49,400,692 P
=1,633,643 P= 70,192,217
Balances at January 1, 2010 =7,358,604

P =12,588,894
P P–
= P–
= =115,246
P (P
=259,147) =
P14,672,262 =571,068 =
P P35,046,927
Net income for the year – – – – – – 25,041,116 41,914 25,083,030
Other comprehensive income (loss) – – 78,118 – (57,324) – – – 20,794
Total comprehensive income (loss) for the year – – 78,118 – (57,324) – 25,041,116 41,914 25,103,824
Cash dividends - P
=0.30 a share (Note 19b) – – – – – – (2,207,581) – (2,207,581)
Cash dividends paid to non-controlling interests – – – – – – – (94,240) (94,240)
Change in non-controlling interests – – – – – – – (114,720) (114,720)
Balances at December 31, 2010 =7,358,604
P =12,588,894
P =78,118
P =–
P =57,922
P (P
=259,147) P
=37,505,797 =404,022 P
P =57,734,210
(Forward)
*SGVMC410781*
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Attributable to Equity Holders of the Parent

Share in Net Share in
Unrealized Cumulative
Valuation Gains Translation
Capital on AFS Adjustments Acquisition of Retained
Stock Additional Investments of of Associates Non-controlling Earnings Non-controlling
(Note 19a) Paid-in Capital an Associate (Note 9) Interests (Note 19b) Interests Total
Balances at January 1, 2009 =7,358,604

P =12,588,894
P P–
= (P
=18,422) (P
=259,147) =10,485,401
P P536,333
= =30,691,663
P
Net income for the year – – – – – 5,658,581 111,187 5,769,768
Other comprehensive income – – – 133,668 – – – 133,668
Total comprehensive income for the year – – – 133,668 – 5,658,581 111,187 5,903,436
Cash dividends - P
=0.20 a share (Note 19b) – – – – – (1,471,720) – (1,471,720)
Cash dividends paid to non-controlling interests – – – – – – (76,401) (76,401)
Change in non-controlling interests – – – – – – (51) (51)
Balances at December 31, 2009 =7,358,604
P =12,588,894
P =–
P =115,246
P (P
=259,147) =14,672,262
P =571,068
P =35,046,927
P
*SGVMC410781*
CONSOLIDATED STATEMENTS OF CASH FLOWS

2011 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax =23,001,116
P =26,003,727
P =6,400,958
P
Adjustments for:
Interest expense and other financing costs
(Note 32) 7,345,575 6,678,293 2,813,978
Depreciation and amortization (Notes 11 and 12) 3,339,445 3,003,977 1,412,900
Amortization of software 6,337 – –
Write-off of project costs and assets – 42,217 –
Loss (gain) on sale of property, plant and equipment 81 (75) (2,865)
Unrealized fair valuation losses (gains) on derivatives (5,991) (22,977) 15,630
Interest income (Notes 4 and 31) (861,521) (224,158) (409,972)
Net unrealized foreign exchange gains (2,565) (1,504,650) (27,468)
Share in net earnings of associates (Note 9) (8,436,906) (4,625,883) (2,535,386)
Gain on sale of investments in shares of stock (16,612) – –
Operating income before working capital changes 24,368,959 29,350,471 7,667,775
Decrease (increase) in:
Trade and other receivables 186,876 (2,399,871) (2,608,352)
Inventories (328,030) (734,948) (547,968)
Other current assets (147,686) (448,445) (20,600)
Increase (decrease) in:
Trade and other payables (470,868) 1,685,285 2,651,669
Customers’ deposits 159,811 223,268 210,024
Net cash generated from operations 23,769,062 27,675,760 7,352,548
Income and final taxes paid (1,086,945) (770,382) (516,772)
Service fees paid (Note 12) (40,000) (40,000) (40,000)
Net cash flows from operating activities 22,642,117 26,865,378 6,795,776
CASH FLOWS FROM INVESTING ACTIVITIES
Cash dividends received (Note 9) 3,982,322 1,818,359 833,187
Interest received 792,989 215,259 451,683
Proceeds from sale of property, plant and equipment 8,449 1,778 18,604
Proceeds from sale of investments in shares of stock 50,000 – –
Additions to:
Intangible assets - service concession rights (Note 12) (64,860) (104,250) (70,259)
Property, plant and equipment
(Notes 11 and 35) (7,462,398) (4,208,027) (3,274,390)
Additional investments in associates (Note 9) (1,148,266) (1,031,232) (2,526,754)
Net collection of (additional) advances to associates
(Note 9) 367,565 (1,060,396) 813,221
Acquisition of Tiwi-Makban Geothermal Power Plants
(Note 8) – – (20,198,774)
Net cash received on step acquisition to subsidiary
(see Note 8) 314,852 – –
Advances to contractors (2,353,605) – –
Decrease (increase) in other noncurrent assets 533,633 410,269 (922,143)
Net cash flows used in investing activities (4,979,319) (3,958,240) (24,875,625)
(Forward)
*SGVMC410781*
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2011 2010 2009
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from availment of long-term debt - net of
transaction costs (Note 16) =5,520,966
P =870,000
P =9,762,893
P
Payments to a preferred shareholder of a subsidiary
(Note 18) (31,070) (31,070) (31,070)
Changes in non-controlling interests (870,470) (208,960) (158,142)
Payments of:
Long-term debt (Note 16) (4,205,685) (442,564) (48,446)
Finance lease obligation (1,094,845) (1,118,880) –
Interest paid (1,815,548) (1,622,023) (1,468,820)
Cash dividends paid (Note 19b) (9,713,358) (2,207,581) (1,471,721)
Net availments (payment) of bank loans (Note 15) (365,200) (3,597,038) 1,136,900
Net cash flows from (used in) financing activities (12,575,210) (8,358,116) 7,721,594
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 5,087,588 14,549,022 (10,358,255)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS 2,128 (62,083) (160,515)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 18,301,845 3,814,906 14,333,676
CASH AND CASH EQUIVALENTS
AT END OF YEAR (Note 4) =23,391,561
P =18,301,845
P =3,814,906
P
*SGVMC410781*
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Share and Exchange Rate Data and When Otherwise Indicated)
1. Corporate Information
General Information
Aboitiz Power Corporation (the Company) and its subsidiaries (collectively referred to as “the
Group”) were incorporated in the Republic of the Philippines. The Company is a publicly-listed
holding company of the entities engaged in power generation and power distribution in the Aboitiz
Group. The Company is a 76.40%-owned subsidiary of Aboitiz Equity Ventures, Inc. (AEV, also
incorporated in the Philippines). The ultimate parent of the Company is Aboitiz & Company, Inc.
(ACO).
The registered office address of the Company is Aboitiz Corporate Center, Gov. Manuel A.
Cuenco Avenue, Cebu City.
The consolidated financial statements of the Group as of December 31, 2011 and 2010 and for
each of the three years in the period ended December 31, 2011, were approved and authorized for
issue by the Board of Directors (BOD) of the Company on March 1, 2012.
2. Basis of Preparation, Statement of Compliance and Summary of Significant Accounting

Policies
Basis of Preparation
The consolidated financial statements of the Group are prepared on a historical cost basis, except
for derivative financial instruments which are measured at fair value. The consolidated financial
statements are presented in Philippine Peso which is the Company’s functional currency and all
values are rounded to the nearest thousand except for earnings per share and exchange rates and
when otherwise indicated.
Statement of Compliance
The consolidated financial statements of the Group are prepared in compliance with Philippine
Financial Reporting Standards (PFRS).
Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year, except for
the following new and amended PFRS and Philippine Interpretations which were adopted as at
January 1, 2011.
· PAS 24, Related Party Transactions (Amendment)

PAS 24 clarifies the definitions of a related party. The new definitions emphasize a
symmetrical view of related party relationships and clarify the circumstances in which persons
and key management personnel affect related party relationships of an entity. In addition, the
amendment introduces an exemption from the general related party disclosure requirements
for transactions with government and entities that are controlled, jointly controlled or
significantly influenced by the same government as the reporting entity. The adoption of the
amendment did not have any impact on the financial position or performance of the Group.
*SGVMC410781*
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· PAS 32, Financial Instruments: Presentation (Amendment)

The amendment alters the definition of a financial liability in PAS 32 to enable entities to
classify rights issues and certain options or warrants as equity instruments. The amendment is
applicable if the rights are given pro rata to all of the existing owners of the same class of an
entity’s non-derivative equity instruments, to acquire a fixed number of the entity’s own
equity instruments for a fixed amount in any currency. The amendment has had no effect on
the financial position or performance of the Group because the Group does not have these
types of instruments.
· Philippine Interpretation IFRIC 14, Prepayments of a Minimum Funding Requirement

(Amendment)
The amendment removes an unintended consequence when an entity is subject to minimum
funding requirements and makes an early payment of contributions to cover such
requirements. The amendment permits a prepayment of future service cost by the entity to be
recognized as a pension asset. The Group is not subject to minimum funding requirements in
the Philippines; therefore, the amendment of the interpretation has no effect on the financial
position or performance of the Group.
Improvements to PFRS (issued 2010)

Improvements to PFRS, an omnibus of amendments to standards, deal primarily with a view to
removing inconsistencies and clarifying wording. There are separate transitional provisions for
each standard. The adoption of the following amendments resulted in changes to accounting
policies but did not have any impact on the financial position or performance of the Group.
· PFRS 3, Business Combinations: The measurement options available for non-controlling

interest (NCI) were amended. Only components of NCI that constitute a present ownership
interest that entitles their holder to a proportionate share of the entity’s net assets in the event
of liquidation should be measured at either fair value or at the present ownership instruments’
proportionate share of the acquiree’s identifiable net assets. All other components are to be
measured at their acquisition date fair value.
The amendments to PFRS 3 are effective for annual periods beginning on or after 1 July 2011.
The Group, however, adopted these as of January 1, 2011 and changed its accounting policy
accordingly as the amendment was issued to eliminate unintended consequences that may
arise from the adoption of PFRS 3.
· PFRS 7, Financial Instruments - Disclosures: The amendment was intended to simplify the
disclosures provided by reducing the volume of disclosures around collateral held and
improving disclosures by requiring qualitative information to put the quantitative information
in context. The Group reflects the revised disclosure requirements in Note 33.
· PAS 1, Presentation of Financial Statements: The amendment clarifies that an entity may
present an analysis of each component of other comprehensive income maybe either in the
statement of changes in equity or in the notes to the financial statements. The Group provides
this analysis in the statement of changes in equity.
Other amendments resulting from the 2010 Improvements to PFRS to the following standards did
not have any impact on the accounting policies, financial position or performance of the Group:
· PFRS 3, Business Combinations (Contingent consideration arising from business combination

prior to adoption of PFRS 3 (as revised in 2008))
*SGVMC410781*
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· PFRS 3, Business Combinations (Un-replaced and voluntarily replaced share-based payment

awards)
· PAS 27, Consolidated and Separate Financial Statements
· PAS 34, Interim Financial Statements
The following interpretation and amendments to interpretations did not have any impact on the
accounting policies, financial position or performance of the Group:
· Philippine Interpretation IFRIC 13, Customer Loyalty Programmes (determining the fair value
of award credits)
· Philippine Interpretation IFRIC 19, Extinguishing Financial Liabilities with Equity
Instruments
Standards Issued but not yet Effective

Standards issued but not yet effective up to the date of issuance of the Group’s financial
statements are listed below. This listing of standards and interpretations issued are those that the
Group reasonably expects to have an impact on disclosures, financial position or performance
when applied at a future date. The Group intends to adopt these standards when they become
effective.
· PAS 1, Financial Statement Presentation - Presentation of Items of Other Comprehensive

Income
The amendments to PAS 1 change the grouping of items presented in OCI. Items that could
be reclassified (or”recycled”) to profit or loss at a future point in time (for example, upon
derecognition or settlement) would be presented separately from items that will never be
reclassified. The amendment affects presentation only and has therefore no impact on the
Group’s financial position or performance. The amendment becomes effective for annual
periods beginning on or after July 1, 2012.
· PAS 12, Income Taxes - Recovery of Underlying Assets

The amendment clarified the determination of deferred tax on investment property measured
at fair value. The amendment introduces a rebuttable presumption that deferred tax on
investment property measured using the fair value model in PAS 40, Investment Property
should be determined on the basis that its carrying amount will be recovered through sale.
Furthermore, it introduces the requirement that deferred tax on non-depreciable assets that are
measured using the revaluation model in PAS 16, Property, Plant and Equipment always be
measured on a sale basis of the asset. The amendment becomes effective for annual periods
beginning on or after January 1, 2012.
· PAS 19, Employee Benefits (Amendment)

Amendments to PAS 19 range from fundamental changes such as removing the corridor
mechanism and the concept of expected returns on plan assets to simple clarifications and re-
wording. The Group is currently assessing the impact of the amendment to PAS 19. The
· PAS 27, Separate Financial Statements (as revised in 2011)

As a consequence of the new PFRS 10, Consolidated Financial Statement and PFRS 12,
Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to accounting for
subsidiaries, jointly controlled entities, and associates in separate financial statements. The
*SGVMC410781*
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· PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the new PFRS 11, Joint Arrangements and PFRS 12, PAS 28 has been
renamed PAS 28, Investments in Associates and Joint Ventures, and describes the application
of the equity method to investments in joint ventures in addition to associates. The
· PFRS 7, Financial Instruments: Disclosures - Enhanced Derecognition Disclosure

Requirements
The amendment requires additional disclosure about financial assets that have been transferred
but not derecognized to enable the user of the Group’s financial statements to understand the
relationship with those assets that have not been derecognized and their associated liabilities.
In addition, the amendment requires disclosures about continuing involvement in
derecognized assets to enable the user to evaluate the nature of, and risks associated with, the
entity’s continuing involvement in those derecognized assets. The amendment becomes
effective for annual periods beginning on or after July 1, 2011. The amendment affects
disclosures only and has no impact on the Group’s financial position or performance.
· PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial

Liabilities
These amendments require an entity to disclose information about rights of set-off and related
arrangements (such as collateral agreements). The new disclosures are required for all
recognized financial instruments that are set off in accordance with PAS 32. These
disclosures also apply to recognized financial instruments that are subject to an enforceable
master netting arrangement or “similar agreement”, irrespective of whether they are set-off in
accordance with PAS 32. The amendments require entities to disclose, in a tabular format
unless another format is more appropriate, the following minimum quantitative information.
This is presented separately for financial assets and financial liabilities recognized at the end
of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining
the net amounts presented in the statement of financial position;
c) The net amounts presented in the statement of financial position;
d) The amounts subject to an enforceable master netting arrangement or similar agreement
that are not otherwise included in (b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all of
the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendments to PFRS 7 are to be retrospectively applied for annual periods beginning on
or after January 1, 2013. The amendment affects disclosures only and has no impact on the
Group’s financial position or performance.
· PFRS 10, Consolidated Financial Statements

PFRS 10 replaces the portion of PAS 27 that addresses the accounting for consolidated
financial statements. It also includes the issues raised in SIC-12, Consolidation - Special
Purpose Entities. PFRS 10 establishes a single control model that applies to all entities
including special purpose entities. The changes introduced by PFRS 10 will require
management to exercise significant judgment to determine which entities are controlled, and
therefore, are required to be consolidated by a parent, compared with the requirements that
*SGVMC410781*
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were in PAS 27. This standard becomes effective for annual periods beginning on or after
January 1, 2013.
· PFRS 11, Joint Arrangements

PFRS 11 replaces PAS 31, Interests in Joint Ventures and SIC-13, Jointly-Controlled Entities
Non-monetary Contributions by Venturers. PFRS 11 removes the option to account for
jointly-controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet
the definition of a joint venture must be accounted for using the equity method. This standard
becomes effective for annual periods beginning on or after January 1, 2013.
· PFRS 12, Disclosure of Involvement with Other Entities

PFRS 12 includes all of the disclosures that were previously in PAS 27 related to consolidated
financial statements, as well as all of the disclosures that were previously included in PAS 31
and PAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint
arrangements, associates and structured entities. A number of new disclosures are also
required. This standard becomes effective for annual periods beginning on or after January 1,
2013.
· PFRS 13, Fair Value Measurement

PFRS 13 establishes a single source of guidance under PFRS for all fair value measurements.
PFRS 13 does not change when an entity is required to use fair value, but rather provides
guidance on how to measure fair value under PFRS when fair value is required or permitted.
The Group is currently assessing the impact that this standard will have on the financial
position and performance. This standard becomes effective for annual periods beginning on or
after January 1, 2013.
· PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities
These amendments to PAS 32 clarify the meaning of “currently has a legally enforceable right
to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement
systems (such as central clearing house systems) which apply gross settlement mechanisms
that are not simultaneous. While the amendment is expected not to have any impact on the net
assets of the Group, any changes in offsetting is expected to impact leverage ratios and
regulatory capital requirements. The amendments to PAS 32 are to be retrospectively applied
for annual periods beginning on or after January 1, 2014. The Group is currently assessing the
impact of the amendments to PAS 32.
· PFRS 9, Financial Instruments: Classification and Measurement

PFRS 9 as issued reflects the first phase on the replacement of PAS 39 and applies to
classification and measurement of financial assets and financial liabilities as defined in
PAS 39. The standard is effective for annual periods beginning on or after January 1, 2015.
In subsequent phases, hedge accounting and impairment of financial assets will be addressed
with the completion of this project expected on the latter half of 2012. The adoption of the
first phase of PFRS 9 will have an effect on the classification and measurement of the Group’s
financial assets, but will potentially have no impact on classification and measurements of
financial liabilities. The Group will quantify the effect in conjunction with the other phases,
when issued, to present a comprehensive picture.
*SGVMC410781*
-6-
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as of December 31 of each year.
Nature of 2011 2010 2009
Business Direct Indirect Direct Indirect Direct Indirect
Aboitiz Energy Solutions, Inc. (AESI) Energy related 100.00 – 100.00 – 100.00 –
service provider
Davao Light & Power Company, Inc. (DLP) Power distribution 99.93 – 99.93 – 99.93 –
Cotabato Light and Power Company (CLP) Power distribution 99.94 – 99.94 – 99.93 –
Cotabato Ice Plant, Inc. Manufacturing – 100.00 – 100.00 – 100.00
Subic Enerzone Corporation (SEZ) Power distribution 65.00 34.97 65.00 34.97 65.00 34.97
Mactan Enerzone Corporation (MEZ) Power distribution 100.00 – 100.00 – 100.00 –
Balamban Enerzone Corporation (BEZ) Power distribution 100.00 – 100.00 – 100.00 –
Aboitiz Renewables, Inc. (ARI; formerly Philippine Power generation 100.00 – 100.00 – 100.00 –
Hydropower Corporation) and Subsidiaries
AP Renewables, Inc. (APRI) Power generation – 100.00 – 100.00 – 100.00
Bakun Power Line Corporation * Power generation – 100.00 – – – –
Cleanergy, Inc. * Power generation – 100.00 – 100.00 – 100.00
Cordillera Hydro Corporation * Power generation – 100.00 – – – –
Hydro Electric Development Corporation * Power generation – 99.97 – 99.97 – 99.97
Hedcor Benguet, Inc. (HBI) * Power generation – 100.00 – 100.00 – 100.00
Hedcor Bokod, Inc. * Power generation – 100.00 – – – –
Hedcor Bukidnon, Inc. * Power generation – 100.00 – – – –
Hedcor, Inc. (HI) Power generation – 100.00 – 100.00 – 100.00
Hedcor Sabangan, Inc. * Power generation – 100.00 – – – –
Hedcor Sibulan, Inc. (HSI) Power generation – 100.00 – 100.00 – 100.00
Hedcor Tamugan, Inc. (HTI) * Power generation – 100.00 – 100.00 – 100.00
Hedcor Tudaya, Inc. * Power generation – 100.00 – – – –
Kookaburra Equity Ventures, Inc. Holding company – 100.00 – – – –
Luzon Hydro Corporation (see Note 8) Power generation – 100.00 – – – –
Tagoloan Hydro Corporation * Power generation – 100.00 – – – –
Therma Power, Inc. (TPI) and Subsidiaries Power generation 100.00 – 100.00 – 100.00 –
Therma Luzon, Inc. (TLI) Power generation – 100.00 – 100.00 – 100.00
Therma Marine, Inc. (Therma Marine) Power generation – 100.00 – 100.00 – 100.00
Therma Mobile, Inc. (Therma Mobile) Power generation – 100.00 – 100.00 – 100.00
Therma South, Inc. (TSI, formerly
Therma Pagbilao, Inc.) * Power generation – 100.00 – 100.00 – 100.00
Therma Power-Visayas, Inc. (TPVI) * Power generation – 100.00 – 100.00 – 100.00
Therma Central Visayas, Inc. (TCVI) * Power generation – 100.00 – – – –
Therma Southern Mindanao, Inc. (TSMI) * Power generation – 100.00 – – – –
Therma Subic, Inc. (Therma Subic) * Power generation – 100.00 – – – –
Vesper Industrial and Development Corporation
(VIDC) * Power generation – 100.00 – – – –
Abovant Holdings, Inc. Holding company – 60.00 – 60.00 – 60.00
Teraqua, Inc. (TI) Holding company – 60.00 – 60.00 – 60.00
Cebu Private Power Corporation (CPPC) Power generation 60.00 – 60.00 – 60.00 –
Retail electricity
Prism Energy, Inc. (PEI) * supplier 60.00 – 60.00 – 60.00 –
Adventenergy, Inc. * Retail electricity 100.00 – 100.00 – 100.00 –
supplier
1 HBI, TI, and PEI were incorporated in 2009. Hedcor Bokod, Inc., Hedcor Bukidnon, Inc., Hedcor Sabangan, Inc., Hedcor Tudaya, Inc., TCVI, TSMI,
and Therma Subic were incorporated in 2011.
2 On March 23, 2010, the Philippine Securities and Exchange Commission (SEC) approved the change in corporate name of Philippine Hydropower
Corporation to ARI.
3 On March 17, 2011, SEC approved the change in corporate name of Therma Pagbilao, Inc. to TSI.
* No commercial operations as of December 31, 2011.
*SGVMC410781*
-7-
Basis of consolidation from January 1, 2010

The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at December 31 of each year. The financial statements of the subsidiaries are
prepared for the same reporting year as the Company using consistent accounting policies.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases. All
intra-group balances, transactions, income and expenses and profits and losses resulting from intra-
group transactions that are recognized in assets, are eliminated in full. The results of subsidiaries
acquired or disposed of during the year are included in the consolidated statement of income from
the date of acquisition or up to the date of disposal, as appropriate.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a
deficit balance.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it:
· Derecognizes the assets (including goodwill) and liabilities of the subsidiary

· Derecognizes the carrying amount of any non-controlling interest
· Derecognizes the cumulative translation differences recorded in equity
· Recognizes the fair value of the consideration received
· Recognizes the fair value of any investment retained
· Recognizes any surplus or deficit in profit or loss
· Reclassifies the parent’s share of components previously recognized in other comprehensive
income to profit or loss or retained earnings, as appropriate.
Basis of consolidation prior to January 1, 2010

Whenever applicable, the above requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of
consolidation:
· Losses incurred by the Group were attributed to the non-controlling interest until the balance
was reduced to nil. Any further excess losses were attributed to the parent, unless the
non-controlling interest had a binding obligation to cover these. Losses prior to
January 1, 2010 were not reallocated between non-controlling interest and the parent
shareholders.
· Upon loss of control, the Group accounted for the investment retained at its proportionate
share of net asset value at the date control was lost. The carrying value of such investment at
January 1, 2010 has not been restated.
Transactions with non-controlling interests

Non-controlling interests represent the portion of net income or loss and net assets in the
subsidiaries not held by the Group and are presented separately in the consolidated statement of
income and within equity in the consolidated balance sheet, separately from the equity attributable
to equity holders of the parent. Transactions with non-controlling interests are accounted for as
equity transactions. On acquisitions of non-controlling interests, the difference between the
consideration and the book value of the share of the net assets acquired is reflected as being a
transaction between owners and recognized directly in equity. Gain or loss on disposals of
non-controlling interest is also recognized directly in equity.
*SGVMC410781*
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Summary of Significant Accounting Policies
Business Combination and Goodwill

Common control business combination
Business combination of entities under common control is accounted for similar to pooling of
interest method, which is scoped out of PFRS 3, Business Combination. Under the pooling of
interest method, any excess of acquisition cost over the net asset value of the acquired entity is
recorded in equity.
Business combinations from January 1, 2010

The cost of an acquisition is measured as the aggregate of the consideration transferred, measured
at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For
each business combination, the acquirer measures the non-controlling interest in the acquiree
pertaining to instruments that represent present ownership interests and entitle the holders to a
proportionate share of the net assets in the event of liquidation either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. All other components of non-
controlling interest are measured at fair value unless another measurement basis is required by
PFRS. Acquisition-related costs incurred are expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date
through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration which is
deemed to be an asset or liability, will be recognized in accordance with PAS 39 either in profit or
loss or as a change to other comprehensive income. If the contingent consideration is classified as
equity, it should not be remeasured until it is finally settled within equity.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interest over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognized directly in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying
amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative values of the operation disposed
of and the portion of the cash-generating unit retained.
*SGVMC410781*
-9-
Business combinations prior to January 1, 2010

In comparison to the abovementioned requirements, the following differences applied:
Business combinations were accounted for using the purchase method. Transaction costs directly
attributable to the acquisition formed part of the acquisition costs. The non-controlling interest
(formerly known as minority interest) was measured at the proportionate share of the acquiree’s
identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps. Any additional
acquired share of interest did not affect previously recognized goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract by
the acquiree were not reassessed on acquisition unless the business combination resulted in a
change in the terms of the contract that significantly modified the cash flows that otherwise would
have been required under the contract.
Contingent consideration was recognized if, and only if, the Group had a present obligation, the
economic outflow was more likely than not and a reliable estimate was determinable. Subsequent
adjustments to the contingent consideration were recognized as part of goodwill.
Impairment of goodwill
Following initial recognition, goodwill is measured at cost less any accumulated impairment
losses. Goodwill is reviewed for impairment, annually or more frequently, if events or changes in
circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units, or groups of
cash-generating units, that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the Group are assigned to those units or groups
of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit or

group of cash-generating units, to which the goodwill relates. Where the recoverable amount of
the cash-generating unit or group of cash-generating units is less than the carrying amount, an
impairment loss is recognized.
Investments in Associates
The Group’s investments in associates are accounted for under the equity method of accounting.
An associate is an entity in which the Group has significant influence and which is neither a
subsidiary nor a joint venture.
Under the equity method, the investment in the associate is carried in the consolidated balance
sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associate.
Goodwill relating to an associate is included in the carrying amount of the investment and is
not amortized. After application of the equity method, the Group determines whether it is
necessary to recognize any additional impairment loss with respect to the Group’s net
investment in the associates. The consolidated statement of income reflects the share of the
results of operations of the associates. Where there has been a change recognized directly in
the equity of the associate, the Group recognizes its share of any changes and discloses this,
when applicable, in the consolidated statement of changes in equity.
*SGVMC410781*
- 10 -
The share of profit of associates is shown on the face of the consolidated statement of income.
This is the profit attributable to equity holders of the associate and therefore is profit after tax and
non-controlling interest in the subsidiaries of the associates.
The reporting dates of the associates and the Group are identical, and the associates’ accounting
policies conform to those used by the Group for like transactions and events in similar
circumstances.
Foreign Currency Translation

Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. Transactions in foreign
currencies are initially recorded in the functional currency at the rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at
the functional currency rate of exchange ruling at the balance sheet date. All differences are taken
to the consolidated statement of income. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
The functional currency of Luzon Hydro Corporation (LHC), a subsidiary, Western Mindanao
Power Corporation (WMPC), Southern Philippines Power Corporation (SPPC) and STEAG State
Power, Inc. (STEAG), associates, is the United States (US) Dollar. As at the balance sheet date,
the assets and liabilities of these entities are translated into the presentation currency of the Group
(the Philippine peso) at the rate of exchange ruling at the balance sheet date and their statement of
income are translated at the weighted average exchange rates for the year. The exchange
differences arising on the translation are taken directly to other comprehensive income. On
disposal of the associate, the deferred cumulative amount recognized in other comprehensive
income relating to that particular entity is recognized in the consolidated statement of income.
Cash and Cash Equivalents

Cash and cash equivalents in the consolidated balance sheet consist of cash in banks and on
hand and short-term deposits with an original maturity of three months or less from dates of
placements and that are subject to insignificant risk of changes in value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of
cash and cash equivalents as defined above.
Inventories
Materials and supplies are valued at the lower of cost and net realizable value (NRV). Cost is
determined on weighted average method. NRV is the current replacement cost. An allowance for
inventory obsolescence is provided for slow-moving, defective or damaged goods based on
analyses and physical inspection.
Financial Instruments
The Group recognizes a financial instrument in the consolidated balance sheet when it becomes a
party to the contractual provisions of the instrument.
All financial instruments are initially recognized at fair value. Transaction costs, if any, are
included in the initial measurement of all financial instruments, except for financial instruments
measured at fair value through profit or loss (FVPL).
*SGVMC410781*
- 11 -
All regular way purchases and sales of financial assets are recognized on the trade date, which is
the date that the Group commits to purchase the asset. Regular way purchases or sales are
purchases and sale of financial assets that require delivery of assets within the period generally
established by regulation or convention in the marketplace. Derivatives are also recognized on a
trade basis.
Financial instruments are classified into the following categories: Financial assets or financial
liabilities at FVPL, loans and receivables, held-to-maturity (HTM) investments, AFS financial
assets and other financial liabilities. The classification depends on the purpose for which the
investments were acquired and whether they are quoted in an active market. The Group
determines the classification at initial recognition and, where allowed and appropriate,
re-evaluates such designation at every reporting date.
(a) Financial assets or financial liabilities at FVPL
Financial assets and liabilities at FVPL include financial assets and liabilities held for trading
purposes and financial assets and liabilities designated upon initial recognition as at
FVPL. Financial assets and liabilities are classified as held for trading if they are acquired for
the purpose of selling and repurchasing in the near term. Derivatives, including separated
embedded derivatives, are also classified as held for trading unless they are designated and
considered as hedging instruments in an effective hedge.
Financial assets and liabilities may be designated at initial recognition as at FVPL if the
following criteria are met: (i) the designation eliminates or significantly reduces the
inconsistent treatment that would otherwise arise from measuring the assets or liabilities, or
recognizing gains or losses on them on a different basis; (ii) the assets and liabilities are part
of a group of financial assets, liabilities or both, which are managed and their performance
evaluated on a fair value basis, in accordance with a documented risk managing strategy; or
(iii) the financial instruments contains an embedded derivative that would need to be recorded
separately, unless the embedded derivative does not significantly modify the cash flow or it is
clear, with little or no analysis, that it would not be separately recorded.
Where a contract contains one or more embedded derivatives, the entire hybrid contract may
be designated as financial asset or financial liability at FVPL, except where the embedded
derivative does not significantly modify the cash flows or it is clear that separation of the
embedded derivative is prohibited.
Financial assets and liabilities at FVPL are recorded at the consolidated balance sheet at fair
value. Subsequent changes in fair value are recognized in the consolidated statement of
income. Interest earned or incurred is recorded as interest income or expense, respectively,
while dividend income is recorded as other income when the right to receive payments has
been established.
The Group’s derivative assets and derivative liabilities are classified as financial assets and
financial liabilities at FVPL, respectively (see Note 33).
*SGVMC410781*
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(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. These are not entered into with the intention of
immediate or short-term resale and are not classified or designated as AFS investments or
financial assets at FVPL. Loans and receivables are carried at amortized cost less allowance
for impairment. Amortization is determined using the effective interest rate method.
Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees that are integral to the effective interest rate. Gains and losses are recognized in the
consolidated statement of income when the loans and receivables are derecognized or
impaired, as well as through the amortization process. Loans and receivables are included in
current assets if maturity is within twelve months from the balance sheet date. Otherwise,
these are classified as noncurrent assets.
Included under this category are the Group’s cash and cash equivalents, trade and other
receivables, amounts owed by related parties and restricted cash (see Note 33).
(c) HTM investments
HTM investments are quoted non-derivative financial assets which carry fixed or determinable
payments and fixed maturities and which the Group has the positive intention and ability to
hold to maturity. After initial measurement, HTM investments are measured at amortized cost
using the effective interest method. This method uses an effective interest rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset. Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees that are integral to the effective interest rate.
Where the Group sells other than an insignificant amount of HTM investments, the entire
category would be tainted and would have to be reclassified as AFS investments. Gains and
losses are recognized in the consolidated statement of income when the investments are
derecognized or impaired, as well as through the amortization process.
The Group does not have any HTM investment as of December 31, 2011 and 2010.
(d) AFS investments
AFS investments are non-derivative financial assets that are either designated as AFS or not
classified in any of the other categories. They are purchased and held indefinitely, and may be
sold in response to liquidity requirements or changes in market conditions. Quoted AFS
investments are measured at fair value with gains or losses being recognized as other
comprehensive income, until the investments are derecognized or until the investments are
determined to be impaired at which time, the accumulated gains or losses previously reported
in other comprehensive income are included in the consolidated statement of income.
Unquoted AFS investments are carried at cost, net of impairment. Interest earned or paid on
the investments is reported as interest income or expense using the effective interest rate.
Dividends earned on investments are recognized in the consolidated statement of income
when the right of payment has been established. These financial assets are classified as
noncurrent assets unless the investment matures or management intends to dispose it within
twelve months after the end of the reporting period.
The Group’s AFS investments as of December 31, 2011 and 2010 include investments in
unquoted shares of stock (see Note 33).
*SGVMC410781*
- 13 -
(e) Other financial liabilities
This category pertains to financial liabilities that are not held for trading or not designated as
at FVPL upon the inception of the liability. These include liabilities arising from operations
or borrowings.
Other financial liabilities are recognized initially at fair value and are subsequently carried at
amortized cost, taking into account the impact of applying the effective interest method of
amortization (or accretion) for any directly attributable transaction costs.
Gains and losses are recognized in the consolidated statement of income when liabilities are
derecognized, as well as through amortization process.
Included under this category are the Group’s trade and other payables, amounts owed to
related parties, customers’ deposits, bank loans, payable to a preferred shareholder of a
subsidiary, finance lease obligation, long-term obligation on power distribution system, and
long-term debts (see Note 33).
Determination of fair value

The fair value for financial instruments traded in active markets at the balance sheet date is based
on their quoted market price or dealer price quotations (bid price for long positions and ask price
for short positions), without any deduction for transaction costs. When current bid and asking
prices are not available, the price of the most recent transaction provides evidence of the current
fair value as long as there has not been a significant change in economic circumstances since the
time of the transaction.
For all other financial instruments not listed in an active market, the fair value is determined by
using appropriate valuation techniques. Valuation techniques include net present value
techniques, comparison to similar instruments for which market observable prices exist, options
pricing models, and other relevant valuation models.
‘Day 1’ difference
Where the transaction price in a non-active market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Group recognizes the difference
between the transaction price and fair value (a ‘Day 1’ difference) in the consolidated statement of
income unless it qualifies for recognition as some other type of asset. In cases where
unobservable data is used, the difference between the transaction price and model value is only
recognized in the consolidated statement of income when the inputs become observable or when
the instrument is derecognized. For each transaction, the Group determines the appropriate
method of recognizing the ‘Day 1’ difference amount.

Derivative financial instruments, including embedded derivatives, are initially recognized at fair
value on the date in which a derivative transaction is entered into or bifurcated, and are
subsequently remeasured at FVPL, unless designated as effective hedge. Changes in fair value of
derivative instruments not accounted as hedges are recognized immediately in the consolidated
statement of income. Derivatives are carried as assets when the fair value is positive and as
liabilities when the fair value is negative.
*SGVMC410781*
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The Group assesses whether embedded derivatives are required to be separated from host
contracts when the Group first becomes party to the contract. An embedded derivative is
separated from the host financial or non-financial contract and accounted for as a separate
derivative if all of the following conditions are met:
· the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics of the host contract;
· a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative; and,
· the hybrid or combined instrument is not recognized as at FVPL.
Reassessment only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required.
Embedded derivatives that are bifurcated from the host contracts are accounted for either as
financial assets or financial liabilities at FVPL.
As of December 31, 2011 and 2010, the Group has freestanding derivatives in the form of
non-deliverable foreign currency forward contracts entered into to economically hedge its foreign
exchange risk. In 2011 and 2010, the Group did not apply hedge accounting treatment on its
derivative transactions. The Group has not bifurcated any embedded derivatives as of
December 31, 2011 and 2010.
Classification of financial instruments between liability and equity

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

· exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Group; or
· satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.
If the Group does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial liability.
a component that is a financial liability, are reported as income or expense. Distributions to
holders of financial instruments classified as equity are charged directly to equity net of any
related income tax benefits.
The components of issued financial instruments that contain both liability and equity elements are
accounted for separately, with the equity component being assigned the residual amount after
deducting from the instrument as a whole the amount separately determined as the fair value of the
liability component on the date of issue.
*SGVMC410781*
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Derecognition of Financial Assets and Liabilities

Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar
financial assets) is derecognized where:
· the rights to receive cash flows from the asset expires;

· the Group retains the right to receive cash flows from the asset, but has assumed an obligation to
pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
· the Group has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
Where the Group has transferred its rights to receive cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or has expired.
Where an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognized in the consolidated
statement of income.
Impairment of Financial Assets

The Group assesses at each balance sheet date whether a financial asset or group of financial
assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if and
only if, there is an objective evidence of impairment as a result of one or more events that has
occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has
an impact on the estimated future cash flows of the financial asset or the group of financial assets
that can be reliably estimated. Evidence of impairment may include indications that the debtors or
a group of debtors is experiencing significant financial difficulty, default or delinquency in interest
or principal payments, the probability that they will enter bankruptcy or other financial
reorganization and where observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
Assets carried at amortized cost

The Group first assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant, and individually or collectively for financial assets that are
not individually significant. If it is determined that no objective evidence of impairment exists for
an individually assessed financial asset, whether significant or not, the asset is included in a group
of financial assets with similar credit risk characteristics and that group of financial assets is
collectively assessed for impairment. Assets that are individually assessed for impairment and for
which an impairment loss is or continues to be recognized are not included in a collective
assessment of impairment.
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If there is an objective evidence that an impairment loss on loans and receivables carried at
amortized cost has been incurred, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective
interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount
of the asset shall be reduced either directly or through use of an allowance account. The amount
of the loss shall be recognized in the consolidated statement of income. If in case, the receivable
has proven to have no realistic prospect of future recovery, any allowance provided for such
receivable is written off against the carrying value of the receivable.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized, the previously
recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is
recognized in the consolidated statement of income, to the extent that the carrying value of the asset
does not exceed its amortized cost at the reversal date.
AFS investments
For AFS investments, the Group assesses at each balance sheet date whether there is objective
evidence that an investment or group of investments is impaired.
In the case of equity investments classified as AFS, objective evidence of impairment would
include a significant or prolonged decline in the fair value of the investments below its cost.
Where there is evidence of impairment, the cumulative loss (measured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognized in the consolidated statement of income) is removed from other
comprehensive income and recognized in the consolidated statement of income. Impairment
losses on equity investments are not reversed through the consolidated statement of income.
Increases in fair value after impairment are recognized directly in other comprehensive income.
In the case of debt instruments classified as AFS, impairment is assessed based on the same
criteria as financial assets carried at amortized cost. Future interest income is based on rate of
interest used to discount future cash flows for measuring impairment loss. Such accrual is
recorded as part of “Interest income” in the consolidated statement of income. If, in subsequent
period, the fair value of a debt instrument increased and the increase can be objectively related to
an event occurring after the impairment loss was recognized in the consolidated statement of
income, the impairment loss is reversed through the consolidated statement of income.
Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts
and there is an intention to settle on a net basis, or to realize the asset and settle the liability
simultaneously. This is not generally the case with master netting agreements whereby the related
assets and liabilities are presented gross in the consolidated balance sheet.
Property, Plant and Equipment

Except for land, property, plant and equipment are stated at cost, excluding the cost of day-to-day
servicing, less accumulated depreciation and accumulated impairment in value. The initial cost of
property, plant and equipment comprises its purchase price, including import duties, if any, and
nonrefundable taxes and any directly attributable costs of bringing the asset to its working
condition and location for its intended use. Such cost includes the cost of replacing parts of such
property, plant and equipment when that cost is incurred if the recognition criteria are met.
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Repairs and maintenance costs are recognized in the consolidated statement of income as incurred.
Land is stated at cost less any accumulated impairment in value.
Except for the power plant machinery and equipment of CPPC, which is depreciated over the
shorter of its Co-operation Period of 15 years or the estimated useful lives of the assets,
depreciation of the other property, plant and equipment is computed using the straight-line method
over the estimated useful lives of the assets as follows:
Estimated Useful
Category Life (in years)
Buildings, warehouses and improvements 10-20
Power plant equipment 9-38
Transmission, distribution and substation equipment
Power transformers 30
Poles and wires 30
Other components 12
Transportation equipment 5
Office furniture, fixtures and equipment 2-5
Electrical equipment 5-20
Meters and laboratory equipment 12
Tools and others 2-10
Steam field assets 20-25
Leasehold improvements are amortized over the shorter of the lease term or the life of the asset.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying values may not be recoverable.
Fully depreciated assets are retained in the accounts until these are no longer in use. When assets
are retired or otherwise disposed of, both the cost and related accumulated depreciation and
amortization and any allowance for impairment losses are removed from the accounts and any
resulting gain or loss is credited or charged to current operations. An item of property, plant and
equipment is derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in
the consolidated statement of income in the year the asset is derecognized.
The assets’ residual values, useful lives and depreciation method are reviewed, and adjusted if
appropriate, at each financial year-end.
When each major inspection is performed, its cost is recognized in the carrying amount of the
property, plant and equipment as a replacement if the recognition criteria are satisfied.
Construction in progress represents structures under construction and is stated at cost. This
includes cost of construction and other direct costs. Borrowing costs that are directly attributable
to the construction of property, plant and equipment are capitalized during the construction period.
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Arrangement Containing a Lease

The determination of whether an arrangement is, or contains, a lease is based on the substance of
the arrangement and requires an assessment of whether the fulfillment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to use the
asset. A reassessment is made after inception of the lease only if one of the following applies:
(a) there is a change in contractual terms, other than a renewal or extension of the arrangement;
(b) a renewal option is exercised or extension granted, unless the term of the renewal or extension
was initially included in the lease term;
(c) there is a change in the determination of whether fulfillment is dependent on a specific asset;
or
(d) there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances gives rise to the reassessment for scenarios (a), (c) or (d) above, and at
the date of renewal or extension period for scenario (b).
Finance lease
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments. Obligations
arising from plant assets under finance lease agreement are classified in the balance sheet as
finance lease obligation.
Lease payments are apportioned between financing charges and reduction of the lease liability so
as to achieve a constant rate of interest on the remaining balance of the liability. Financing
charges are charged directly against income.
Capitalized leased assets are depreciated over the estimated useful life of the assets when there is
reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating lease. Operating lease payments are recognized as an expense in the
consolidated statement of income on a straight-line basis over the lease term.
Service Concession Arrangements

Public-to-private service concession arrangements where: (a) the grantor controls or regulates
what services the entities in the Group must provide with the infrastructure, to whom it must
provide them, and at what price; and (b) the grantor controls-through ownership, beneficial
entitlement or otherwise-any significant residual interest in the infrastructure at the end of the term
of the arrangement, are accounted for under the provisions of Philippine Interpretation IFRIC 12,
Service Concession Arrangements. Infrastructures used in a public-to-private service concession
arrangement for its entire useful life (whole-of-life assets) are within the scope of this
Interpretation if the conditions in (a) are met.
This Interpretation applies to both: (a) infrastructure that the entities in the Group constructs or
acquires from a third party for the purpose of the service arrangement; and (b) existing
infrastructure to which the grantor gives the entity in the Group access for the purpose of the
service arrangement.
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Infrastructures within the scope of this Interpretation are not recognized as property, plant and
equipment of the Group. Under the terms of contractual arrangements within the scope of this
Interpretation, an entity acts as a service provider. An entity constructs or upgrades infrastructure
(construction or upgrade services) used to provide a public service and operates and maintains that
infrastructure (operation services) for a specified period of time.
An entity recognizes and measures revenue in accordance with PAS 11, Construction Contracts,
and PAS 18, Revenue, for the services it performs. If an entity performs more than one service
(i.e. construction or upgrade services and operation services) under a single contract or
arrangement, consideration received or receivable shall be allocated by reference to the relative
fair values of the services delivered, when the amounts are separately identifiable.
When an entity provides construction or upgrades services, the consideration received or

receivable by the entity is recognized at its fair value. An entity accounts for revenue and costs
relating to construction or upgrade services in accordance with PAS 11. Revenue from
construction contracts is recognized based on the percentage-of-completion method, measured by
reference to the percentage of costs incurred to date to estimated total costs for each contract. The
applicable entities account for revenue and costs relating to operation services in accordance with
PAS 18.
An entity recognizes a financial asset to the extent that it has an unconditional contractual right to
receive cash or another financial asset from or at the direction of the grantor for the construction
services. An entity recognizes an intangible asset to the extent that it receives a right (a license) to
charge users of the public service.
When the applicable entities have contractual obligations it must fulfill as a condition of its license
(a) to maintain the infrastructure to a specified level of serviceability or (b) to restore the
infrastructure to a specified condition before it is handed over to the grantor at the end of the
service arrangement, it recognizes and measures these contractual obligations in accordance with
PAS 37, Provisions, Contingent Liabilities and Contingent Assets, i.e., at the best estimate of the
expenditure that would be required to settle the present obligation at the balance sheet date.
Borrowing cost attributable to the construction of the asset if the consideration received or
receivable is an intangible asset, is capitalized during the construction phase. In all other cases,
borrowing costs are expensed as incurred.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is fair value as at the date of the acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated
amortization and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and expenditure is reflected in the
consolidated statement of income in the year in which the expenditure is incurred.
Software and licenses

Software and licenses are initially recognized at cost. Following initial recognition, the software
and licenses are carried at cost less accumulated amortization and any accumulated impairment in
value.
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The software development costs is amortized on a straight-line basis over its estimated useful
economic life and assessed for impairment whenever there is an indication that the intangible asset
may be impaired. The amortization commences when the software development costs is available
for use. The amortization period and the amortization method for the software development costs
are reviewed at each financial year-end. Changes in the estimated useful life is accounted for by
changing the amortization period or method, as appropriate, and treating them as changes in
accounting estimates. The amortization expense is recognized in the consolidated statement of
income in the expense category consistent with the function of the software development costs.
Service concession right

The Group’s intangible asset - service concession right pertains mainly to its right to charge users
of the public service in connection with the service concession and related arrangements. This is
recognized initially at the fair value which consists of the cost of construction services and the fair
value of future fixed fee payments in exchange for the license or right. Following initial
recognition, the intangible asset is carried at cost less accumulated amortization and any
accumulated impairment losses.
The intangible asset - service concession right is amortized using the straight-line method over the
estimated economic useful life which is the service concession period, and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
estimated economic useful life is ranging from 18 to 25 years. The amortization period and the
amortization method are reviewed at least at each financial year-end. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the
asset is accounted for by changing the amortization period or method, as appropriate, and are
treated as changes in accounting estimates. The amortization expense is recognized in the
consolidated statement of income in the expense category consistent with the function of the
intangible asset.
Project development costs

Project development costs include power plant projects in the development phase which meet the
“identifiability” requirement under PAS 38, Intangible Assets, as they are separable and
susceptible to individual sale and are carried at acquisition cost. These assets are transferred to
“Property, Plant and Equipment” when construction of each power plant commences. During the
period of development, the asset is tested for impairment annually.
Research and Development Expenditure

The Group’s policy is to record research expenses in the consolidated statement of income in the
period when they are incurred.
Development costs are recognized as an intangible asset on the balance sheet if the Group can
identify them separately and show the technical viability of the asset, its intention and capacity to
use or sell it, and how it will generate probable future economic benefits.
Following initial recognition of the development expenditure as an asset, the cost model is applied
requiring the asset to be carried at cost less any accumulated amortization and accumulated
impairment losses. Amortization of the asset begins when development is complete and the asset
is available for use. It is amortized over the period of expected future benefit. During the period
of development, the asset is tested for impairment annually.
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Investment Property
Investment property pertains to land not used in operations. Initially, investment property is
measured at cost including transaction costs. Subsequent to initial recognition investment
property is stated at cost less any impairment in value.
Investment property is derecognized when it has either been disposed of or when the investment
property is permanently withdrawn from use and no future benefit is expected from its disposal.
Any gain or loss on the derecognition of an investment property is recognized in the consolidated
statement of income in the year of derecognition. Transfers are made to investment property
when, and only when, there is a change in use, evidenced by ending of owner-occupation,
commencement of an operating lease to another party or ending of construction or development.
Transfers are made from investment property when, and only when, there is a change in use,
evidenced by commencement of owner-occupation or commencement of development with a view
to sale.
For a transfer from investment property to owner-occupied property or inventories, the deemed
cost of property for subsequent accounting is its fair value at the date of change in use. If the
property occupied by the Group as an owner-occupied property becomes an investment property,
the Group accounts for such property in accordance with the policy stated under property, plant
and equipment up to the date of change in use. For a transfer from inventories to investment
property, any difference between the fair value of the property, plant and equipment at that date
and its previous carrying amount is recognized in the consolidated statement of income. When the
Group completes the construction or development of a self-constructed investment property, any
difference between the fair value of the property at that date and its previous carrying amount is
recognized in the consolidated statement of income.
Impairment of Non-financial Assets

Other current assets, property, plant and equipment, intangible asset, investment property, and
investment in and advances to associates
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is
the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. Impairment losses of continuing
operations are recognized in the consolidated statement of income in those expense categories
consistent with the function of the impaired asset.
An assessment is made at each balance sheet date as to whether there is any indication that
previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognized impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognized. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior years. Such reversal is recognized in the consolidated statement
of income unless the asset is carried at revalued amount, in which case the reversal is treated as a
revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to
*SGVMC410781*
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allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
Capital Stock
Capital stock is measured at par value for all shares issued. When the Company issues more than
one class of stock, a separate account is maintained for each class of stock and the number of
shares issued. Capital stock includes common stock and preferred stock.
When the shares are sold at premium, the difference between the proceeds and the par value is
credited to the “Additional paid-in capital” account. When shares are issued for a consideration
other than cash, the proceeds are measured by the fair value of the consideration received. In case
the shares are issued to extinguish or settle the liability of the Company, the shares shall be
measured either at the fair value of the shares issued or fair value of the liability settled, whichever
is more reliably determinable.
Direct costs incurred related to equity issuance, such as underwriting, accounting and legal fees,
printing costs and taxes are debited to the “Additional paid-in capital” account. If additional
paid-in capital is not sufficient, the excess is charged against an equity reserve account.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment
and excluding discounts, rebates and other sales taxes or duties. The Group assesses its revenue
arrangements against specific criteria in order to determine if it is acting as a principal or an agent.
The following specific recognition criteria must also be met before revenue is recognized:
Sale of power
Revenue from power distribution is recognized upon supply of power to the customers. Revenue
from power generation is recognized in the period actual capacity is generated and earned. In the
case of ancillary services, revenue for scheduled capacity without energy dispatched is recognized
as the scheduled time for the approved reserved capacity occurs. For scheduled capacity with
energy dispatched, revenue is recognized as the actual dispatch is performed.
Dividend income
Dividend income is recognized when the Group’s right to receive payment is established.
Services
Service fees which are primarily earned from the installation of electrical power-saving devices
are recognized when the Group’s share of power-saving income is determined.
Technical, management and other fees

Technical, management and other services fees are recognized when the related services are
rendered.
Interest income
Interest is recognized as it accrues taking into account the effective interest method.
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Expenses
Expenses are decreases in economic benefits during the accounting period in the form of outflows
or decrease of assets or incurrence of liabilities that result in decreases in equity, other than those
relating to distributions to equity participants. Expenses are recognized when incurred.
Pension Benefits
The Group has defined benefit pension plans which require contributions to be made to separately
administered funds. The cost of providing benefits under the defined benefit plans is determined
separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains
and losses are recognized as income or expense when the net cumulative unrecognized actuarial
gains and losses for each individual plan at the end of the previous reporting year exceeded 10%
of the higher of the defined benefit obligation and the fair value of plan assets at that date. These
gains or losses are recognized over the expected average remaining working lives of the
employees participating in the plans.
The past service cost is recognized as an expense on a straight-line basis over the average period
until the benefits become vested. If the benefits are already vested immediately following the
introduction of, or changes to, a pension plan, past service cost is recognized immediately.
The defined benefit liability is the aggregate of the present value of the defined benefit obligation
and actuarial gains and losses not recognized reduced by past service cost not yet recognized and
the fair value of plan assets out of which the obligations are to be settled directly. If such
aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of
cumulative unrecognized net actuarial losses and past service cost and the present value of any
economic benefits available in the form of refunds from the plan or reductions in the future
contributions to the plan.
If the asset is measured at the aggregate of cumulative unrecognized net actuarial losses and past
service cost and the present value of any economic benefits available in the form of refunds from
the plan or reductions in the future contributions to the plan, net actuarial losses of the current
period and past service cost of the current period are recognized immediately to the extent that
they exceed any reduction in the present value of those economic benefits. If there is no change or
an increase in the present value of the economic benefits, the entire net actuarial losses of the
current period and past service cost of the current period are recognized immediately.
Similarly, net actuarial gains of the current period after the deduction of past service cost of the
current period exceeding any increase in the present value of the economic benefits stated above
are recognized immediately if the asset is measured at the aggregate of cumulative unrecognized
net actuarial losses and past service cost and the present value of any economic benefits available
in the form of refunds from the plan or reductions in the future contributions to the plan. If there
is no change or a decrease in the present value of the economic benefits, the entire net actuarial
gains of the current period after the deduction of past service cost of the current period are
recognized immediately.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in
the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
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Taxes
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted as of the
balance sheet date.
Deferred income tax

Deferred income tax is provided using the balance sheet liability method on temporary differences
at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
· where the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
· in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences, carryforward
benefits of unused tax credits and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carryforward
benefits of unused tax credits and unused tax losses can be utilized except:
· where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; and
· in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred income tax assets are recognized only to the
extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax
assets are reassessed at each balance sheet date and are recognized to the extent that it has become
probable that future taxable profit will allow the deferred income tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted as of the balance sheet date.
Income tax relating to items recognized directly in other comprehensive income is also recognized
in other comprehensive income and not in the consolidated statement of income.
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Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable
right exists to set off current income tax assets against current income tax liabilities and the
deferred income taxes relate to the same taxable entity and the same taxation authority.
Sales tax
Revenues, expenses and assets are recognized net of the amount of sales tax except:
· where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
· receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the consolidated balance sheet.
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the
consolidated statement of income net of any reimbursement. If the effect of the time value of
money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognized as a borrowing cost.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are
disclosed unless the possibility of an outflow of resources embodying economic benefits is
remote. Contingent assets are not recognized in the consolidated financial statements but
disclosed when an inflow of economic benefits is probable.
Events After the Reporting Period

Post year-end events that provide additional information about the Group’s position at balance
sheet date (adjusting events) are reflected in the consolidated financial statements. Post year-end
events that are not adjusting events are disclosed when material.
Earnings Per Common Share

Basic earnings per common share are computed by dividing net income for the year attributable to
the common shareholders of the Company by the weighted average number of common shares
issued and outstanding during the year, after giving retroactive effect for any stock dividends
declared and stock rights exercised during the year.
Diluted earnings per share amounts are calculated by dividing the net income for the year
attributable to the common shareholders of the parent by the weighted average number of common
shares outstanding during the year plus the weighted average number of common shares that
would be issued for outstanding common stock equivalents. The Group does not have dilutive
potential common shares.
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Dividends on Common Shares

Dividends on common shares are recognized as a liability and deducted from retained earnings
when approved by the respective shareholders of the Group and its subsidiaries. Dividends for the
year that are approved after the balance sheet date are dealt with as an event after the reporting
period.
Operating Segments
For management purposes, the Group is organized into two major operating segments (power
generation and power distribution) according to the nature of the services provided, with each
segment representing a significant business segment. The Group’s identified operating segments
are consistent with the segments reported to the BOD which is the Group’s Chief Operating
Decision Maker (CODM). Financial information on the operating segment is presented in
Note 30.
3. Significant Judgments, Estimates and Assumptions
The preparation of the Group’s consolidated financial statements require management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities and the disclosures of contingent liabilities. However, uncertainty about these
assumptions could result in outcomes that require a material adjustment to the carrying amount of
the asset or liability affected in the future periods.
Judgments
In the process of applying the Group’s accounting policies, management has made judgments,
apart from those involving estimations, which have the most significant effect on the amounts
recognized in the consolidated financial statements:
Determining functional currency

Based on the economic substance of the underlying circumstances relevant to the companies in the
Group, the functional currency of the companies in the Group has been determined to be the
Philippine Peso except for certain subsidiary and associates whose functional currency is the US
Dollar. The Philippine peso is the currency of the primary economic environment in which the
companies in the Group operates and it is the currency that mainly influences the sale of power
and services and the costs of power and of providing the services. The functional currency of the
Group’s subsidiaries and associates is the Philippine Peso except for LHC, STEAG, SPPC and
WMPC whose functional currency is the US Dollar.
Service concession arrangements - Companies in the Group as Operators

Based on management’s judgment, the provisions of Philippine Interpretation IFRIC 12 apply to
SEZ’s Distribution Management Service Agreement (DMSA) with Subic Bay Metropolitan
Authority (SBMA); MEZ’s Built-Operate-Transfer (BOT) agreement with Mactan Cebu
International Airport Authority (MCIAA) and LHC’s Power Purchase Agreement (PPA) with the
National Power Corporation (NPC). SEZ, MEZ and LHC’s service concession agreements were
accounted for under the intangible asset model. The Company’s associate, STEAG, have also
determined that the provisions of Philippine Interpretation IFRIC 12 apply to their PPA with NPC.
STEAG’s service concession agreements were accounted for under the financial asset models.
Refer to the accounting policy on service concession arrangements for the discussion of intangible
asset and financial asset models
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Determining fair value of customers’ deposits

In applying PAS 39, Financial Instruments: Recognition and Measurement, on transformer and
lines and poles deposits, the Group has made a judgment that the timing and related amounts of
future cash flows relating to such deposits cannot be reasonably and reliably estimated for
purposes of establishing their fair values using alternative valuation techniques since the
expected timing of customers’ refund or claim for these deposits cannot be reasonably estimated.
These customers’ deposits, which are therefore stated at cost, amounted to = P2.16 billion and
=2.00 billion as of December 31, 2011 and 2010, respectively (see Note 17).
P
Finance lease - Company in the Group as the lessee

In accounting for its Independent Power Producer (IPP) Administration Agreement with the
Power Sector Asset and Liabilities Management Corporation (PSALM), the Group’s management
has made a judgment that the IPP Administration Agreement of TLI is an arrangement that
contains a lease. The Group’s management has made a judgment that TLI has substantially
acquired all the risks and rewards incidental to ownership of the power plant. Accordingly, the
Group accounted for the agreement as a finance lease and recognized the power plant and finance
lease obligation at the present value of the agreed monthly payments to PSALM (see Note 35).
The power plant is depreciated over its estimated useful life, as there is reasonable certainty that
the Group will obtain ownership by the end of the lease term. As of December 31, 2011 and 2010,
the carrying value of the power plant amounted to P=42.33 billion and = P43.43 billion, respectively
(see Notes 11 and 35). The carrying value of finance lease obligation amounted to = P52.71 billion
and P=48.31 billion as of December 31, 2011 and 2010, respectively (see Note 35).
Determining whether the Power Purchase Agreement (PPA) Contains a Lease. The PPA with
Visayan Electric Company (VECO) qualifies as a lease on the basis that CPPC sells substantially
all its output to VECO. The agreement requires that CPPC guarantee the availability of the power
plant. This arrangement is determined to be an operating lease where a significant portion of the
risks and rewards of ownership of the asset are retained by CPPC. Accordingly, the power plant
assets are recorded as part of the cost of property, plant and equipment and the fixed capacity fees
and fixed operating and maintenance fees billed to VECO are recorded as operating revenues on a
straight-line basis over the term of the PPA.
Accounting for acquisitions of Power Barges (PB)

In 2011 and 2010, the Group took ownership of Barge 1, Barge 2, Barge 3 and Barge 4, and PB
118 and PB 117, respectively. The Group has made a judgment that the transactions represent
acquisitions of assets, and accordingly, accounted for the acquisitions in accordance with
PAS 16, Property, Plant and Equipment (see Note 11).
Classification of financial instruments

The Group exercises judgment in classifying a financial instrument, or its component parts, on
initial recognition as either a financial asset, a financial liability or an equity instrument in
accordance with the substance of the contractual arrangement and the definition of a financial
asset, a financial liability or an equity instrument. The substance of a financial instrument, rather
than its legal form, governs its classification in the consolidated balance sheet.
*SGVMC410781*
- 28 -
Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below:
Acquisition accounting
The Group accounts for acquired businesses using the acquisition method of accounting which
requires that the assets acquired and the liabilities assumed be recorded at the date of acquisition at
their respective fair values.
The application of the acquisition method requires certain estimates and assumptions especially
concerning the determination of the fair values of acquired intangible assets and property, plant
and equipment as well as liabilities assumed at the date of the acquisition. Moreover, the useful
lives of the acquired intangible assets, and property, plant and equipment have to be determined.
The judgments made in the context of the purchase price allocation can materially impact the
Group’s future results of operations. Accordingly, for significant acquisitions, the Group obtains
assistance from third party valuation specialists. The valuations are based on information
available at the acquisition date (see Note 8).
Estimating allowance for impairment losses on investments in and advances to associates

Investments in and advances to associates are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. There are no
impairment indicators in 2011, 2010 and 2009 based on management’s assessment. The carrying
amounts of the investments in and advances to associates amounted to P
=29.12 billion and
=
P28.80 billion as of December 31, 2011 and 2010, respectively. No allowance for impairment
losses was recognized in 2011, 2010 and 2009 (see Note 9).
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the value in use of the cash-generating units to which the goodwill is allocated.
Estimating the value in use requires the Group to make an estimate of the expected future cash
flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate
the present value of those cash flows. The carrying amount of goodwill as of December 31, 2011
and 2010 amounted to = P996.0 million (see Note 10). No impairment of goodwill was recognized
in 2011, 2010 and 2009.
Estimating useful lives of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment based on the period over
which assets are expected to be available for use. The estimated useful lives of property, plant and
equipment are reviewed periodically and are updated if expectations differ from previous
estimates due to physical wear and tear, technical or commercial obsolescence and legal or other
limits on the use of the assets. In addition, the estimation of the useful lives of property, plant and
equipment is based on collective assessment of internal technical evaluation and experience with
similar assets. It is possible, however, that future results of operations could be materially affected
by changes in estimates brought about by changes in the factors and circumstances mentioned
above. As of December 31, 2011 and 2010, the net book values of property, plant and equipment
amounted to = P78.71 billion and P=74.29 billion, respectively (see Note 11).
*SGVMC410781*
- 29 -
Estimating residual value of property, plant and equipment

The residual value of the Group’s property, plant and equipment is estimated based on the amount
that would be obtained from disposal of the asset, after deducting estimated costs of disposal, if
the asset is already of the age and in the condition expected at the end of its useful life. Such
estimation is based on the prevailing price of property, plant and equipment of similar age and
condition. The estimated residual value of each asset is reviewed periodically and updated if
expectations differ from previous estimates due to changes in the prevailing price of a property,
plant and equipment of similar age and condition. As of December 31, 2011 and 2010, the
aggregate net book values of property, plant and equipment amounted to = P78.71 billion and
=74.29 billion, respectively (see Note 11).
P
Estimating useful lives of intangible asset - service concession rights

The Group estimates the useful lives of intangible asset arising from service concessions based on
the period over which the asset is expected to be available for use which is 25 years. The Group
has not included any renewal period on the basis of uncertainty, as of balance sheet date, of the
probability of securing renewal contracts at the end of the original contract term. As of
December 31, 2011 and 2010, the aggregate net book values of intangible asset - service
concession rights amounted to P =4.16 billion and =P937.0 million, respectively (see Note 12).
Assessing impairment of nonfinancial assets

The Group assesses whether there are any indicators of impairment for nonfinancial assets at each
balance sheet date. These nonfinancial assets (property, plant and equipment, intangible asset -
service concession rights, investment property, and other current and noncurrent assets) are tested
for impairment when there are indicators that the carrying amounts may not be recoverable.
Determining the recoverable amount of non-financial assets, which requires the determination of
future cash flows expected to be generated from the continued use and ultimate disposition of such
assets, requires the Group to make estimates and assumptions that can materially affect its
consolidated financial statements. Future events could cause the Group to conclude that the
property, plant and equipment, intangible asset - service concession rights, investment property,
and other current and noncurrent assets are impaired. Any resulting impairment loss could have a
material adverse impact on the consolidated balance sheet and consolidated statement of income.
As of December 31, 2011 and 2010, the aggregate net book values of these assets amounted to
=87.94 billion and =
P P77.42 billion, respectively (see Notes 7, 11, 12 and 13). No impairment losses
were recognized in 2011, 2010 and 2009.
Estimating allowance for impairment of trade and other receivables

The Group maintains allowance for impairment of trade and other receivables at a level considered
adequate to provide for potential uncollectible receivables. The level of this allowance is
evaluated by management on the basis of the factors that affect the collectibility of the accounts.
These factors include, but are not limited to, the Group’s relationship with its clients, client’s
current credit status and other known market factors. The Group reviews the age and status of
receivables and identifies accounts that are to be provided with allowance either individually or
collectively. The amount and timing of recorded expenses for any period would differ if the
Group made different judgment or utilized different estimates. An increase in the Group’s
allowance for impairment of trade and other receivables will increase the Group’s recorded
expenses and decrease current assets. As of December 31, 2011 and 2010, allowance for
impairment of trade and other receivables amounted to P =314.6 million and P=376.9 million,
respectively. Trade and other receivables, net of allowance for impairment, amounted to
=9.51 billion and =
P P6.81 billion as of December 31, 2011 and 2010, respectively (see Note 5).
*SGVMC410781*
- 30 -
Estimating allowance for inventory obsolescence

The Group estimates the allowance for inventory obsolescence based on the age of inventories.
The amounts and timing of recorded expenses for any period would differ if different judgments
or different estimates are made. An increase in allowance for inventory obsolescence would
increase recorded expenses and decrease current assets. As of December 31, 2011 and 2010,
allowance for inventory obsolescence amounted to P =1.6 million and P
=53.1 million, respectively.
The carrying amount of the inventories amounted to = P2.17 billion and P
=1.85 billion as of
December 31, 2011 and 2010, respectively (see Note 6).
Recognition of deferred income tax assets

The Group reviews the carrying amounts of deferred income tax assets at each balance sheet date
and reduces deferred income tax assets to the extent that it is no longer probable that sufficient
income will be available to allow all or part of the deferred income tax assets to be utilized. The
Group recognize deferred taxes based on enacted or substantially enacted tax rates for renewable
of 10% and for non-renewable of 30%. The Group has net deferred income tax assets amounting
to =
P226.9 million and = P199.8 million as of December 31, 2011 and 2010, respectively. The
Company did not recognize deferred income tax assets on minimum corporate income tax (MCIT)
amounting to = P30.9 million and P =23.8 million as of December 31, 2011 and 2010, respectively,
and NOLCO amounting to P =220.5 million and P =114.8 million as of December 31, 2011 and 2010,
respectively, since management expects that it will not generate sufficient taxable income in the
future that will be available to allow all of the deferred income tax assets to be utilized
(see Note 28).
Pension benefits
The determination of the Group’s obligation and cost of pension is dependent on the selection of
certain assumptions used by actuaries in calculating such amounts. Those assumptions are
described in Note 26, Pension Benefit Plans, and include, among others, discount rates, expected
rates of return on plan assets and rates of future salary increase. In accordance with
PAS 19, Employee Benefits, actual results that differ from the Group’s assumptions are
accumulated and amortized over future periods and therefore, generally affect the Group’s
recognized expenses and recorded obligation in such future periods. While management believes
that its assumptions are reasonable and appropriate, significant differences in the actual experience
or significant changes in the assumptions may materially affect the Group’s pension and other
post-employment obligations. Retirement benefit expense amounted to = P75.4 million in 2011 and
=68.5 million in 2010. Retirement benefit income amounted to P
P =4.8 million in 2009. The
Group’s pension liabilities amounted to = P27.0 million and = P16.0 million as of December 31, 2011
and 2010, respectively. Pension assets amounted to = P168.3 million and =P173.4 million as of
Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the consolidated
balance sheet cannot be derived from active markets, their fair value is determined using valuation
techniques which includes the discounted cash flow model and other generally accepted market
valuation model. The inputs for these models are taken from observable markets where possible,
but where this is not feasible, a degree of judgment is required in establishing fair values. The
judgments include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect the reported fair value of financial
instruments. The fair values of the Group’s financial instruments are presented under Note 33.
*SGVMC410781*
- 31 -
Legal contingencies
The estimate of probable costs for the resolution of possible claims has been developed in
consultation with outside counsels handling the Group’s defense in these matters and is based
upon an analysis of potential results. No provision for probable losses arising from legal
contingencies was recognized in the Group’s consolidated financial statements as of
4. Cash and Cash Equivalents
2011 2010
Cash on hand and in banks P
=3,406,187 =3,055,662
P
Short-term investments 19,985,374 15,246,183
P
=23,391,561 =18,301,845
P
Cash in banks earn interest at floating rates based on daily bank deposit rates. Short-term
investments are made for varying periods of between one day and three months depending on the
immediate cash requirements of the Group and earn interest at the respective short-term
investments rates.
Interest income earned from cash and cash equivalents amounted to =

P854.0 million in 2011,
=149.0 million in 2010 and =
P P348.9 million in 2009.
5. Trade and Other Receivables
2011 2010
Trade receivables - net of allowance for impairment
of P
=314,629 in 2011 and P =376,912 in 2010
(see Note 32) P
=6,266,348 =5,897,292
P
Others (see Note 31)
Dividends receivable 2,500,000 –
Accrued revenue 262,048 192,194
Non-trade 45,744 139,155
Advances to various projects – 102,180
Advances to contractors – 9,509
Others 431,638 465,461
P
=9,505,778 =6,805,791
P
Trade and non-trade receivables are non-interest bearing and are generally on 10 - 30 days’ term.
The rollforward analysis of allowance for impairment of receivables, which pertains to trade
receivables, is presented below:
2011 2010
January 1 P
=376,912 =106,170
P
Provisions (reversal) (see Note 23) (32,349) 292,065
Write-off (29,934) (21,323)
December 31 P
=314,629 =376,912
P
*SGVMC410781*
- 32 -
Trade receivables of the power distribution segment that were written off but not covered by an
allowance for impairment amounted to = P1.1 million (see Note 23) in 2009.
Allowance for impairment as of December 31, 2011 and 2010 pertain to receivables that are
individually determined to be impaired at balance sheet date. These relate to debtors that are in
significant financial difficulties and have defaulted on payments and accounts under dispute and
legal proceedings. These receivables are not secured by any collateral or credit enhancements.
For collective assessment, allowances are assessed for receivables that are not individually
significant and for individually significant receivables where there is no objective evidence yet of
individual impairment. Impairment losses are estimated by taking into consideration the age of the
receivables, past collection experience and other factors that may affect collectibility.
6. Inventories - at cost
2011 2010
Fuel and lube oil P
=1,606,367 =1,325,290
P
Plant spare parts and supplies 362,722 349,029
Transmission and distribution supplies 196,174 150,220
Other parts and supplies 8,354 21,048
P
=2,173,617 =1,845,587
P
The cost of inventories recognized as part of cost of generated power in the consolidated
statements of income amounted to = P10.99 billion in 2011, P
=11.55 billion in 2010 and P
=2.65 billion
in 2009 (see Note 22). The cost of inventories recognized as part of operations and maintenance
in the consolidated statements of income amounted to P =151.7 million in 2011, P
=619.9 million in
2010 and P=222.3 million in 2009 (see Note 24).
7. Other Current Assets
2011 2010
Input value-added tax (VAT) P
=750,561 =680,139
P
Prepaid tax 211,339 171,218
Prepaid expenses 106,113 46,522
Prepaid rent (see Note 35) 23,436 27,581
Others 15,590 33,893
P
=1,107,039 =959,353
P
8. Business Combinations
a. Step-acquisition of LHC
LHC, a company primarily engaged in power generation, manages and operates the
70-megawatt hydroelectric power generating facility in Bakun River in Benguet and Ilocos
Sur Provinces on a build-operate-transfer scheme. Under the Power Purchase Agreement
(PPA) it entered into with the National Power Corporation (NPC), LHC shall deliver to NPC
all electricity generated over a cooperation period of 25 years until February 5, 2026.
*SGVMC410781*
- 33 -
LHC was 50% owned by ARI, a wholly owned subsidiary of the Company and 50% owned by
Pacific Hydro Bakun, Inc. (PHBI), a wholly owned subsidiary of Pacific Hydro Pty Ltd, a
company incorporated in Australia.
On May 9, 2011, LHC redeemed all its issued and outstanding Series “B” Redeemable
Preferred Shares and Series “C” Redeemable Preferred Shares held by PHBI. Immediately
thereafter, the redeemed shares were permanently retired. As a result of the said redemption,
LHC became a wholly owned subsidiary of ARI beginning May 9, 2011.
The accounting for this business combination was determined provisionally as ARI is still
finalizing the fair valuation of the intangible assets acquired. This will be finalized in 2012 as
allowed by PFRS.
The provisional fair values of the identifiable assets of LHC as at the date of acquisition
follow:
Fair value
recognized
on acquisition
Assets:
Cash and cash equivalents =314,852
P
Receivables 29,501
Prepayments and other current assets 7,458
Property, plant, and equipment 2,238
Intangible asset - service concession right 3,376,973
Deferred tax assets 72,699
Other assets 37,574
3,841,295
Liabilities:
Payables 178,434
Derivative liability 16,205
Advances from shareholders 1,794,859
Long-term debt (net of deferred financing cost) 716,971
2,706,469
Total identifiable net assets at fair value 1,134,826
Fair value of previously-held interest in LHC 942,977

Excess of fair value of identifiable net assets over
the fair value of previously-held interest =191,849
P
Cash flow on acquisition:

Net cash acquired with the subsidiary =314,852
P
Remeasurement of the previously-held interest in LHC as at the date of acquisition follows:
Carrying value of the previously held interest in LHC =1,134,826

P
Fair value of previously-held interest in LHC (942,977)
Loss on the remeasurement of previously held interest =191,849
P
*SGVMC410781*
- 34 -
The excess of the fair value of identifiable net assets over the fair value of previously-held
interest is included in other income in the consolidated statement of income, net of the loss on
the remeasurement of previously held interest.
From the date of acquisition, the additional interest in LHC has contributed =
P68.2 million to
the net income of the Group. This newly-qualified subsidiary has likewise contributed
=633.0 million in revenue to the Group.
P
b. Acquisition of the 747 Megawatt (MW) Tiwi-MakBan Geothermal Power Plant

(“Tiwi-MakBan Power Plant” or “Plant”)
In August 2008, APRI, a subsidiary, was officially declared as the winning bidder for the
289 MW Tiwi Geothermal Power Plant located in Tiwi, Albay and the 458 MW Makiling-
Banahaw (MakBan) Geothermal Plant located in Laguna and Batangas Provinces. APRI took
over the control and possession of the Plant on May 25, 2009, and started its commercial
operation the following day.
APRI accounted for the purchase of the Plant as acquisition of a business using purchase
method.
The total cost of the business combination was = P20.20 billion, consisting of the purchase price
of P
=19.90 billion and costs directly attributable to the acquisition of =
P298.5 million.
From the date of acquisition up to December 31, 2009, the Tiwi-MakBan Power Plant has
contributed =
P2.07 billion to the net income of the Group.
The accounting for the business combination that was effected in 2009 was determined
provisionally as the Company has incomplete information as of report date with respect to
possible recognition of intangible assets and deferred income tax assets arising from the
acquisition. In 2010, the accounting for the business combination was finalized and no
changes were made on the purchase price allocation that was provisionally computed.
9. Investments in and Advances to Associates
2011 2010
Acquisition cost:
Balance at beginning of the year P
=19,148,952 =18,914,669
P
Additions during the year 1,148,266 1,031,232
Step-acquisition to subsidiary (1,048,251) –
Disposals during the year (27,749) (796,949)
Balance at end of year 19,221,218 19,148,952
Accumulated equity in net earnings:
Balance at beginning of the year 7,645,004 4,966,140
Share in net earnings 8,436,906 4,625,883
Effect of redemption of preferred shares
by an associate – (353,662)
(Forward)
*SGVMC410781*
- 35 -
2011 2010
Step-acquisition to subsidiary (P
=196,402) P
=–
Disposals during the year (5,639) –
Cash dividends received or receivable (6,482,322) (1,593,357)
Balance at end of year 9,397,547 7,645,004
28,618,765 26,793,956
Share in cumulative translation adjustments
of associates (546,753) 57,922
Share in unrealized valuation gain on AFS investment
of an associate 73,952 78,118
Investments in associates at equity 28,145,964 26,929,996
Advances to associates 975,729 1,869,374
P
=29,121,693 =28,799,370
P
As of December 31, 2011 and 2010, the undistributed earnings of the associates included in the
Group’s retained earnings amounting to = P9.40 billion and =
P7.65 billion, respectively, are not
available for distribution to the stockholders unless declared by the associates.
In 2011, the Company subscribed and paid for 242,631 common shares and 291,157 redeemable
preferred shares of AEV Aviation including additional paid-in capital of =P290.9 million,
representing 49.25% interest. The par value of the common and redeemable preferred shares is
=1 per share.
P
The Group contributed =

P856.2 million and =P1.03 billion as additional investment in MORE in
2011 and 2010, respectively, to support SNAP B’s plant rehabilitation and refurbishment.
Following the approval by SEC of the amendments on East Asia Utilities Corporation’s (EAUC)
Articles of Incorporation on September 27, 2010, EAUC effected the conversion of its outstanding
90 million common shares to 900,000 Series A redeemable preferred shares (RPS). Fifty percent
(50%) of the shares converted or 45 million Series A shares is attributable to the Company. In
October 2010, EAUC redeemed 392,210 Series A RPS attributable to the Company.
The Group’s associates and the corresponding equity ownership are as follows:
Nature of Business 2011 2010 2009
83.33 83.33 83.33
MORE Holding company
VECO Power distribution 55.21 55.19 55.18
LHC (see Note 8) Power generation – 50.00 50.00
EAUC Power generation 50.00 50.00 50.00
Bakun Power Line Corporation* Energy related service provider – 50.00 50.00
Redondo Peninsula Energy, Inc. (RP Energy)* Power generation 25.00 50.00 50.00
SN Aboitiz Power-Magat, Inc. (SNAP M) Power generation 50.00 50.00 50.00
SN Aboitiz Power-Benguet, Inc. (SNAP B) Power generation 50.00 50.00 50.00
(Forward)
*SGVMC410781*
- 36 -
Nature of Business 2011 2010 2009
Hijos de F. Escaño, Inc. (HIJOS) Holding company 46.73 46.73 46.73
San Fernando Electric Light & Power Co., Inc. Power distribution 43.78 43.78 43.78
(SFELAPCO)
Pampanga Energy Ventures, Inc. (PEVI) Holding company 42.84 42.84 42.84
Cordillera Hydro Corporation* Power generation – 35.00 35.00
STEAG Power generation 34.00 34.00 34.00
CEDC** Power generation 26.40 26.40 26.40
SPPC Power generation 20.00 20.00 20.00
WMPC Power generation 20.00 20.00 20.00
AEV Aviation, Inc. (AAI) Service 49.25 – –
**No commercial operations as of December 31, 2011.

** Declared pre-commercial operations on January 26, 2011 and started commercial operation on February 26, 2011.
All ownership percentages presented in the table above are direct ownership of the Group except
for the following:
· SNAP M and SNAP B - MORE has direct ownership in SNAP M and SNAP B of 60% each
while the Group’s direct ownership in MORE is 83.33% resulting to the Group’s effective
ownership in SNAP M and SNAP B of 50%.
· VECO - HIJOS has direct ownership in VECO of 25.15% in 2011, 2010 and 2009 while the
Group’s direct ownership in VECO is 43.46% in 2011, 43.44% in 2010 and 43.43% in 2009
resulting to the Group’s effective ownership in VECO of 55.21% in 2011, 55.19% in 2010,
and 55.18% in 2009.
· SFELAPCO - PEVI has direct ownership in SFELAPCO of 54.83% while the Group’s direct
ownership in SFELAPCO is 20.29% resulting to the Group’s effective ownership in
SFELAPCO of 43.78%.
The Group does not consolidate MORE because of absence of control resulting from the
shareholders’ agreement, which among others stipulate the management and operation of MORE.
Management of MORE is vested in its BOD and the affirmative vote of the other shareholder is
required for the approval of certain corporate actions which include financial and operating
undertakings. The Group also does not consolidate VECO as the other shareholders’ group have
the control over the financial and operating policies of VECO.
The carrying values of investments in associates, which are accounted for under the equity method
follows:
2011 2010
MORE P
=15,409,338 =13,336,441
P
STEAG 5,943,448 6,445,009
CEDC 2,913,576 2,396,218
VECO 1,171,734 1,090,460
HIJOS 928,649 905,828
(Forward)
*SGVMC410781*
- 37 -
2011 2010
WMPC P
=493,857 =465,002
P
PEVI 293,004 285,292
AAI 290,152 –
SPPC 246,396 230,453
SFELAPCO 235,283 228,626
EAUC 229,486 335,563
LHC (see Note 8) – 1,181,164
Others (8,959) 29,940
P
=28,145,964 =26,929,996
P
Following is the summarized financial information of significant associates:
2011 2010 2009

MORE
Total current assets P3,233,366
= =234,714
P =278,313
P
Total noncurrent assets 18,515,998 16,013,675 12,037,113
Total current liabilities 3,252,121 241,362 276,057
Total noncurrent liabilities 6,594 3,298 490
Gross revenue 201,600 4,084,202 1,270,474
Operating profit 7,027,048 3,836,899 1,096,944
Depreciation and amortization 10,002 10,007 9,571
Interest income - net 430 377 325
Income tax - net 2,982 13,373 1,941
Net income 7,024,077 3,911,204 1,102,475
VECO*
Total current assets 2,680,499 3,251,473 1,424,236
Total current liabilities 2,310,321 2,513,044 1,902,036
Total noncurrent liabilities 3,824,244 3,939,339 2,546,256
Gross revenue 16,296,842 13,405,730 10,830,879
Operating profit 740,532 609,522 140,657
Interest expense - net 46,743 29,945 15,101
Income tax - net 343,088 253,158 124,936
Net income 820,535 609,526 315,082
LHC (see Note 8)
Total current assets N/A 382,808 332,448
Total noncurrent assets N/A 3,965,135 4,496,366
Total current liabilities N/A 1,468,097 1,593,142
Total noncurrent liabilities N/A 517,517 771,228
Gross revenue N/A 934,710 1,223,189
Operating profit N/A 581,919 749,635
Depreciation and amortization N/A 264,349 280,022
Interest expense - net N/A 66,992 123,999
Income tax expense (benefit) - net N/A 85,973 158,373
Net income N/A 339,521 467,264
(Forward)
*SGVMC410781*
- 38 -
2011 2010 2009

WMPC
= P1,031,813
= =718,455
P
Total current liabilities 125,891 148,542 192,535
Total noncurrent liabilities 127,113 143,422 181,783
Gross revenue 1,352,280 1,324,460 1,206,970
Interest income (expense) - net 20,328 (6,597) 3,260
Income tax - net 168,799 201,779 55,171
Net income 819,405 851,962 548,359
SPPC
Total current assets 725,741 580,253 491,448
Total noncurrent assets 883,448 999,546 1,305,583
Gross revenue 707,339 709,774 687,843
Interest income (expense) - net 1,360 9,865 (9,323)
Income tax - net 76,485 45,226 46,312
Net income 248,809 227,719 248,749
SFELAPCO *
Gross revenue 3,276,602 3,048,028 2,564,866
Interest income - net 165 1,574 1,175
Income tax - net 38,037 30,710 11,932
Net income 101,387 267,483 72,024
STEAG
Total current assets 5,097,440 5,624,376 8,029,261
Gross revenue 7,548,941 6,507,354 6,205,924
Operating profit 4,089,380 3,131,010 3,118,338
Interest expense - net 111,434 366,944 473,298
Income tax - net 95,135 108,887 154,223
Net income 3,662,955 1,754,369 2,602,400
EAUC
Total noncurrent assets 725,230 1,002,340 3,122,061
Gross revenue 992,763 1,741,244 1,381,633
Interest income (expense) - net 7,197 (727) 5,005
Income tax - net 12,477 16,337 11,570
Net income 271,488 252,754 286,577
(Forward)
*SGVMC410781*
- 39 -
2011 2010 2009

CEDC
= P4,380,848
= P5,116,664
=
Gross revenue 7,511,443 – –
Operating profit 2,565,171 (76,969) (41,307)
Interest income (expense) - net 1,334,177 2,889 1,322
Income tax - net 32,427 (52,818) –
Net income 1,200,223 (73,282) (48,915)
*Amounts are based on appraised values which are adjusted to historical amounts upon equity take-up of the
Group. Using cost method in accounting for property, plant and equipment, depreciation and amortization
amounted to = P262.3 million, =
P245.7 million and =
P216.9 million in 2011, 2010, and 2009, respectively, for VECO;
and =P73.7 million, =
P72.0 million and =
P73.9 million in 2011, 2010 and 2009, respectively, for SFELAPCO. Under
the same method, net income amounted to = P941.3 million, =
P734.9 million and =
P467.8 million in 2011, 2010 and
2009, respectively, for VECO; and =P140.1 million, =
P132.7 million and =P119.6 million in 2011, 2010 and 2009,
respectively, for SFELAPCO.
10. Impairment Testing of Goodwill
Goodwill acquired through business combinations have been attributed to individual

cash-generating units.
The carrying amount of goodwill follows:
2011 2010
MEZ P
=538,373 =538,373
P
BEZ 237,404 237,404
HI 220,228 220,228
P
=996,005 =996,005
P
The recoverable amounts of the investments have been determined based on a value-in-use
calculation using cash flow projections based on financial budgets approved by senior
management covering a five-year period.
Key assumptions used in value-in-use calculation for December 31, 2011 and 2010
The following describes each key assumption on which management has based its cash flow
projections to undertake impairment testing of goodwill.
Discount rates and growth rates

The discount rates applied to cash flow projections are from 9.39% to 11.63% in 2011 and from
8.22% to 8.39% in 2010, and cash flows beyond the five-year period are extrapolated using a zero
percent growth rate.
*SGVMC410781*
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Revenue assumptions
Revenue assumptions are based on the expected electricity to be sold. In 2011, revenue growth of
5% for four years and 2% in year 5 was applied to MEZ; 0% for BEZ; and 5% in year 1 and 0%
for the next five years for HI. In 2010, revenue growth of 5% for four years and 6% in year 5 was
applied to MEZ; 5% for BEZ; and 15% in year 1, 3% in year 2, 2% for years 3 and 4 and 4% in
year 5 for HI.
Materials price inflation
The assumption used to determine the value assigned to the materials price inflation is 4.75% in
2012. It then decreases to 4.50% in 2013 and remains steady until the fifth year. The starting
point of 2012 is consistent with external information sources.
Based on the impairment testing, no impairment was recognized on goodwill in 2011 and 2010.
With regard to the assessment of value-in-use of MEZ, BEZ and HI, management believes that no
reasonably possible change in any of the above key assumptions would cause the carrying value of
the goodwill to materially exceed its recoverable amount.
*SGVMC410781*
- 41 -
11. Property, Plant and Equipment
December 31, 2011

Power plant Transmission,
Buildings, equipment distribution and Office furniture, Meters and
warehouses and and steam substation Transportation fixtures and Leasehold Electrical laboratory Tools Construction
Land improvements field assets equipment equipment equipment improvements equipment equipment and others in progress Total
Cost
Beginning Balance P
=114,336 P
=951,281 P
=73,370,137 P
=4,998,903 P
=459,746 P
=159,951 P
=204,563 P
=1,642,611 P
=383,765 P
=375,433 P
=1,552,872 P
=84,213,598
Additions 494,790 13,665 2,802,729 428,639 81,211 43,923 3,830 156,108 89,011 455,649 2,892,843 7,462,398
Acquisition of a subsidiary – – – – 6,426 15,162 – – – – – 21,588
Disposals – – (16,215) – (10,973) (1,663) (106,755) – – (76) – (135,682)
Reclassifications and others (1,100) 1,749,276 (1,854,787) (4,975) 7,286 44,892 1,115 136,850 – (140,350) (31,827) (93,620)
Ending Balance 608,026 2,714,222 74,301,864 5,422,567 543,696 262,265 102,753 1,935,569 472,776 690,656 4,413,888 91,468,282
and Amortization
Beginning Balance – 116,050 5,791,480 2,523,933 299,357 147,935 142,804 406,154 259,245 234,876 – 9,921,834
Additions – 80,680 2,465,062 214,796 59,354 33,978 12,282 122,756 16,237 28,822 – 3,033,967
Acquisition of a subsidiary – – – – 3,801 14,508 – – – – – 18,309
Disposals – – (14,504) – (10,414) (930) (101,228) – – (76) – (127,152)
Reclassifications and others – 885,444 (855,311) (50,844) 3,239 (39,857) (6,060) 84,898 (39) (108,264) – (86,794)
Ending Balance – 1,082,174 7,386,727 2,687,885 355,337 155,634 47,798 613,808 275,443 155,358 – 12,760,164
Net Book Value P
=608,026 P
=1,632,048 P
=66,915,137 P
=2,734,682 P
=188,359 P
=106,631 P
=54,955 P
=1,321,761 P
=197,333 P
=535,298 P
=4,413,888 P
=78,708,118
December 31, 2010
Power plant Transmission,

Buildings, equipment distribution and Office furniture, Meters and
warehouses and and steam substation Transportation fixtures and Leasehold Electrical laboratory Tools Construction
Land improvements field assets equipment equipment equipment improvements equipment equipment and others in progress Total
Cost
Beginning balance =125,774
P =898,699
P =66,628,765
P =4,553,427
P =386,970
P =111,304
P =183,302
P =1,651,908
P =358,801
P =326,462
P P4,633,416
= =79,858,828
P
Additions 7 5,485 1,498,217 296,882 82,421 56,049 21,261 14,855 25,314 53,941 2,295,838 4,350,270
Disposals – (2,214) (37,280) (99) (9,645) (8,167) – (24,152) – (1,763) (4,619) (87,939)
Reclassifications and others (11,445) 49,311 5,280,435 148,693 – 765 – – (350) (3,207) (5,371,763) 92,439
Ending Balance 114,336 951,281 73,370,137 4,998,903 459,746 159,951 204,563 1,642,611 383,765 375,433 1,552,872 84,213,598
and Amortization
Beginning balance – 91,389 3,289,899 2,327,647 261,304 86,375 128,383 324,916 246,432 201,454 – 6,957,799
Additions – 19,099 2,480,905 194,431 49,241 37,598 16,965 105,160 12,794 38,087 – 2,954,280
Disposals – (2,033) (36,068) (789) (8,478) (4,577) – (23,922) – (1,689) – (77,556)
Reclassifications and others – 7,595 56,744 2,644 (2,710) 28,539 (2,544) – 19 (2,976) – 87,311
Ending Balance – 116,050 5,791,480 2,523,933 299,357 147,935 142,804 406,154 259,245 234,876 – 9,921,834
Net Book Value =114,336
P =835,231
P =67,578,657
P =2,474,970
P =160,389
P =12,016
P =61,759
P =1,236,457
P =124,520
P =140,557
P =1,552,872
P =74,291,764
P
*SGVMC410781*
- 42 -
Acquisition of Power Barges 1-4

On May 27, 2011, Therma Mobile acquired four barge-mounted floating power plants, with a total
power generating capacity of 242 MW, from Duracom Mobile Power Corporation and East Asia
Diesel Power Corporation.
The power barges are currently undergoing rehabilitation. The amount of rehabilitation cost
included in the carrying amount of the power barges amounted to =
P443.8 million.
Acquisition of PB 118 and PB 117

On July 31, 2009, Therma Marine and Therma Mobile, subsidiaries, won the negotiated bid with
the Power Sector Assets and Liabilities Management Corporation (PSALM) for the barge-
mounted diesel-powered generation plants, the 100 MW PB 118 and 100 MW PB 117, with bid
prices of US$14 million (P
=651.2 million) and US$16 million (P
=739.5 million), respectively.
PB 118 is moored in Barangay San Roque, Maco, Compostela Valley in Mindanao. PB 117 is
moored in Barangay Sta. Ana, Nasipit, Agusan Del Norte.
On February 5, 2010 and February 26, 2010, Therma Marine fully paid PSALM the total bid
prices of PB118 and PB117, respectively. Within the same month, Therma Mobile transferred all
of its rights and obligations as buyer of PB 117 to Therma Marine, officially making the latter the
buyer of PB 117.
The control and possession of PB 118 and PB 117 were successfully turned-over and transferred
to Therma Marine on February 6, 2010 and March 1, 2010, respectively. Therma Marine started
the commercial operations of the power barges on the turn-over dates.
The Group accounted for these acquisitions as purchases of assets in accordance with PAS 16.
Specific borrowing costs capitalized as part of construction in progress amounted to

P =227.3 million in 2010 and 2009, respectively (see Note 16). The rate used to
determine the amount of borrowing costs eligible for capitalization was 8.52%, which is the
effective interest rate for the related specific borrowings in 2010 and 2009. The reclassifications
made in 2010 and 2009 pertain mostly to completed projects of the Group.
Property, plant and equipment with carrying amounts of P

=5.44 billion and =
P5.59 billion as of
December 31, 2011 and 2010, respectively, are used to secure the Group’s long-term debts
(see Note 16).
12. Intangible Asset - Service Concession Rights
2011 2010
Cost:
At January 1 P
=1,149,439 =1,045,054
P
Step acquisition of LHC (see Note 8) 3,376,973 –
Additions from internal development 64,860 104,385
Effect of translation 89,417 –
4,680,689 1,149,439
Accumulated amortization:
At January 1 212,443 162,746
Step acquisition of LHC (see Note 8) 252,111 –
Amortization 53,367 49,697
517,921 212,443
P
=4,162,768 =936,996
P
*SGVMC410781*
- 43 -
The amortization of intangible asset is included in “Depreciation and amortization” under the
Operating Expenses in the consolidated statement of income.
Service concession arrangements entered into by the Group are as follows:
a. On November 24, 1996, LHC entered into a PPA with NPC, its sole customer, for the
construction and operation of a 70-megawatt hydroelectric power generating facility (the
Power Station) in Bakun River in Benguet and Ilocos Sur Provinces on a build-operate-
transfer scheme. Under the PPA, LHC shall deliver to NPC all electricity generated over a
cooperation period of 25 years until February 5, 2026.
On the Transfer Date, as defined in the PPA, LHC shall transfer to NPC, free from any lien or
encumbrance, all its rights, title and interest in and to the Power Station and all such data as
operating manuals, operation summaries/transfer notes, design drawings and other information
as may reasonably be required by NPC to enable it to operate the Power Station.
Since NPC controls the ownership of any significant residual interest of the Power Station at
the end of the PPA, the PPA is accounted for under the intangible asset model as LHC has the
right to charge users for the public service under the service concession arrangement.
The Power Station is treated as intangible assets and is amortized over a period of 25 years,
which is the service concession period. The intangible asset was used as collateral to secure
LHC’s long-term debt (see Note 16).
b. On May 15, 2003, the SBMA, AEV and DLP entered into a DMSA for the privatization of the
SBMA Power Distribution System (PDS) on a rehabilitate-operate-and-transfer arrangement;
and to develop, construct, lease, lease out, operate and maintain property, structures, and
machineries in the Subic Bay Freeport Zone (SBFZ).
Under the terms of the DMSA, SEZ was created to undertake the rehabilitation, operation and
maintenance of the PDS (the Project), including the provision of electric power service to the
customers within the Subic Bay Freeport Secured Areas of the SBFZ as well as the collection
of the relevant fees from them for its services and the payment by SBMA of the service fees
throughout the service period pursuant to the terms of the DMSA. The DMSA shall be
effective for 25- year period commencing on the turnover date.
For and in consideration of the services and expenditures of SEZ for it to undertake the
rehabilitation, operation, management and maintenance of the Project, it shall be paid by the
SBMA the service fees in such amount equivalent to all the earnings of the Project, provided,
however, that SEZ shall remit the amount of P =40.0 million to the SBMA at the start of every
12-month period throughout the service period regardless of the total amount of all earnings of
the Project. The said remittances may be reduced by the outstanding power receivables from
SBMA, including streetlights power consumption and maintenance, for the immediate
preceding year.
Since SBMA controls ownership of the equipment at the end of the agreement, the PDS are
treated as intangible assets and are amortized over a period of 25 years up to year 2028, in
accordance with Philippine Interpretation IFRIC 12.
Specific borrowing costs amounting to nil and P =19.1 million that were directly attributable to
the rehabilitation of the PDS were capitalized in 2011 and 2010, respectively.
*SGVMC410781*
- 44 -
c. The transmission and distribution equipment of MEZ are located within MEPZ II. Since
MCIAA controls ownership of the equipment at the end of the agreement, the equipment are
treated as intangible assets and are amortized over a period of 21 years up to year 2028, in
accordance with Philippine Interpretation IFRIC 12.
13. Other Noncurrent Assets
2011 2010
Advances to contractors P
=2,353,605 =–
P
Input VAT and tax credit receivable 898,198 629,860
Prepaid rent - net of current portion (see Note 35) 421,510 522,817
Intangible assets:
Project development costs 125,599 41,394
Software and licenses 9,359 22,400
Others 144,174 9,012
P
=3,952,445 =1,225,483
P
Advances to contractor pertains to payments covering the purchase price of two units of steam
turbine generators of Therma South, Inc.
Intangible assets
Rollforward of intangible assets follow:

2011 2010
Project Project Software
development Software development and
costs and licenses costs licenses
Balance at beginning of year =41,394
P =22,400
P =–
P =1,153
P
Additions 86,599 5,423 75,154 21,247
Amortization – (6,337) – –
Transfers (see Note 11) – – (33,040) –
Write-off (2,394) (12,127) (720) –
Balance at end of year =125,599
P =9,359
P =41,394
P =22,400
P
14. Trade and Other Payables

2011 2010
Trade payables (see Note 21) P
=2,950,149 =2,063,082
P
Output VAT 1,568,934 1,609,331
Accrued energy fees and fuel purchase 755,226 486,644
Accrued taxes and fees 464,622 424,043
Accrued interest 323,795 220,048
Unearned revenues 299,056 42,423
Accrued materials and supplies cost 245,419 –
Amounts due to contractors and other third parties 180,113 1,485,755
Accrued insurance 29,741 37,026
Related parties - nontrade (see Note 31) 18,415 129,999
Others (see Note 31) 286,284 455,479
P
=7,121,754 =6,953,830
P
*SGVMC410781*
- 45 -
Trade payables are non-interest bearing and generally on 30-day terms.
Accrued taxes and fees represent accrual of real property tax, transfer tax and other fees.
Other liabilities include withholding taxes, other non-trade payables and other accrued expenses.
15. Bank Loans

Peso loans - financial institutions - unsecured
Company 2.24% in 2010 =–
P =1,290,000
P
DLP 4.25% in 2011; 1,160,000 –
3.50% in 2010 – 250,000
CLP 4.00% to 4.25% in 2011; 283,200 –
3.50% in 2010 – 220,000
SEZ 3.50% to 3.75% in 2010 – 196,600
HI 4.10% in 2011; 3.50% in 2010 171,400 –
– 23,200
= 1,614,600
P =1,979,800
P
Bank loans represent unsecured interest-bearing short-term loans obtained from various local
banks to meet the Group’s working capital requirements. They are covered by the respective
borrower entities’ existing credit lines with the banks and are not subject to any significant
covenants and warranties.
Interest expense on bank loans amounted to =

P55.2 million in 2011, =
P145.1 million in 2010 and
=236.9 million in 2009 (see Note 32).
P
16. Long-term Debts

Company
Financial and non-financial institutions - unsecured
2011 5-year corporate note 6.17% P5,000,000
= =–
P
2009 5-year corporate note 8.23% 5,000,000 5,000,000
2008 7-year corporate note 9.33% 543,200 548,800
2008 5-year corporate note 8.78% – 3,330,000
Retail bonds - unsecured
3-year bonds 8.00% 705,580 705,580
5-year bonds 8.70% 2,294,420 2,294,420
HSI
Financial institutions - secured 8.52% 3,306,947 3,570,000
CPPC 3.06% - 6.08% in 2011
Financial institutions - unsecured 6.68% - 6.71% in 2010 426,667 640,000
HI
Financial institution - secured 8.36% 484,500 549,100
LHC
Financial institutions - secured 2.44% to 2.50% 521,257 –
SEZ
Fixed rate corporate notes 565,000 –
3.68% in 2011;
Financial institution – secured – 119,090
8.26% in 2010
BEZ
Financial institution - unsecured 7.50% 70,000 70,000
18,917,571 16,826,990
Less deferred financing costs 112,589 123,877
18,804,982 16,703,113
Less current portion - net of deferred financing costs 1,504,800 555,495
= 17,300,182
P =16,147,618
P
*SGVMC410781*
- 46 -
Company
2011 Fixed Rate Corporate Notes
On April 14, 2011, the Company availed a total of =P5.00 billion from the Notes Facility
Agreement it signed on April 12, 2011, with First Metro Investment Corporation (FMIC) as Issue
Manager, the proceeds of which were used by the Company for general corporate purposes and
refinancing. The Notes Facility Agreement provided for the issuance of 5-year corporate notes in
a private placement to not more than 19 institutional investors pursuant to Section 9.2 of the SRC
and Rule 9.2(2) (B) of the SRC Rules.
the 12th interest payment date. The amount payable in respect of such early redemption shall be
the accrued interest on the principal amount, the principal amount and a prepayment penalty of
2.0% on the outstanding principal amount. Unless previously redeemed, the notes shall be
redeemable on a lump sum basis on the respective maturity date at its face value.
to exceed 2.5:1 calculated based on the Company’s year-end audited parent company financial
statements. The Company is in compliance with the debt covenant as of December 31, 2011.
Unamortized deferred financing cost reduced the carrying amount of long-term debt by
P
On September 28, 2009, the Company availed a total of P =5.00 billion from the Notes Facility
Agreement it signed on September 18, 2009, with FMIC as Issue Manager, the proceeds of which
were used by the Company to finance its investments in various projects including capital
expenditures and acquisitions. The Notes Facility Agreement provided for the issuance of 5-year
corporate notes in a private placement to not more than 19 institutional investors pursuant to
Section 9.2 of the Securities Regulation Code (SRC) and Rule 9.2(2) (B) of the SRC Rules.
2.0% on the outstanding principal amount. Unless previously redeemed, the notes shall be
redeemable on a lump sum basis on the respective maturity date at its face value.
Under the Notes Facility Agreement, the Company shall not permit its DE ratio to exceed 2:1
calculated based on the Company’s year-end audited parent company financial statements. The
=29.9 million and =
P P39.2 million as of December 31, 2011 and 2010, respectively.
*SGVMC410781*
- 47 -
On December 18, 2008 (issue date), the Company availed a total of = P3.89 billion from the Notes
Facility Agreement it signed on December 15, 2008, with Banco De Oro (BDO) Capital and
Investment Corporation, Bank of the Philippine Islands Capital Corporation, FMIC and ING Bank
N.V. - Manila Branch as Joint Lead Managers, the proceeds of which were used by the Company
to finance its acquisitions as well as for other general corporate purposes. The Notes Facility
Agreement provided for the issuance of 5-year and 7-year corporate notes in a private placement
to not more than 19 institutional investors pursuant to Section 9.2 of the SRC and Rule 9.2(2) (B)
of the SRC Rules.
the 12th interest payment date for the 5-year note and on the 16th interest payment date for the
7-year note. The amount payable in respect of such early redemption shall be the accrued interest
on the outstanding principal amount, the outstanding principal amount and a prepayment penalty
of 2.0% of the outstanding principal amount.
Unless previously redeemed, the notes shall be redeemable on a lump sum basis on the respective
maturity dates at their face values.
Under the Notes Facility Agreement, the Company shall not permit its DE ratio to exceed 2:1
calculated based on the Company’s year-end parent company audited financial statements. The
In December 2011, the =P3.33 billion 5-year corporate notes were redeemed incurring
P66.6 million in prepayment penalty charges.
=
=4.5 million and =
Retail Bonds
On April 30, 2009, the Company registered and issued unsecured bonds worth P =3.00 billion with
three-year and five-year terms. The proceeds were used to partially finance APRI’s acquisition of
the Tiwi-MakBan Geothermal Power Plant. As provided in the Underwriting Agreement, the
three-year bonds bear interest on its principal amount from and including issue date at 8.0% per
annum. The five-year bonds bear interest on its principal amount from and including issue date at
8.7% per annum.
The bonds have been rated PRS AAA by the Philippine Rating Services Corporation. The rating
is subject to regular annual reviews, or more frequently as market developments may dictate, for
as long as the bonds are outstanding.
Prior to the maturity date, the Company may redeem in whole the relevant outstanding bonds on
2.0% on the outstanding principal amount.
Unless previously redeemed, the principal amount of the bonds shall be payable on a lump sum
basis on the respective maturity date at its face value.
*SGVMC410781*
- 48 -
Under the bond trust agreement, the Company shall not permit its DE ratio to exceed 2:1
calculated based on the Company’s year-end audited parent company financial statements. The
=15.9 million and =
HSI
On May 21, 2008, HSI and ARI entered into an agreement with local banks for a loan facility in
the aggregate principal amount of up to =
P3.57 billion to partially finance the design, development,
procurement, construction, operation and maintenance of the 42.5 MW Sibulan hydro-electric
power plant.
70% of the principal amount of the loan is payable in semi-annual installments within 12 years
commencing on the 30th month from September 1, 2008, with a balloon payment equivalent to
30% of the loan principal on the final principal amortization date.
HSI has the option to prepay the loan at par without premium or penalty beginning on the fourth
year from the initial advance.
Interest on the loan for the first five years is fixed at 8.52%. For the remaining seven-year period
interest rate will be fixed at the prevailing seven-year PDST- F interest rate for the day
immediately preceding the fixed interest setting date plus 1.125%.
Under the loan agreements, HSI is required to maintain Debt Service Coverage Ratio (DSCR) of
at least 1.1x, at all times, until fulfillment payment of the obligations and a DSCR of at least 1.2x
for the release of funds from the Project Accounts. HSI is in compliance with the loan covenants
as of December 31, 2011 and 2010.
The loan is secured by real estate and chattel mortgages on real assets and all machineries,
equipment and other properties, actually located at the project site or plant site used in the project
with carrying value of =
P5.04 billion and P
=5.06 billion as of December 31, 2011 and 2010,
respectively.
Interest on the loan capitalized as construction in progress amounted to nil in 2011 and
P
=20.7 million and =
CPPC
On January 27, 2010, CPPC availed a total of P =800.0 million from the Notes Facility Agreement
with SB Capital Investment Corporation (P =400.0 million) and BDO Capital and Investment
Corporation (P=400.0 million), the proceeds of which were used by CPPC to finance advances
made to stockholders. The Notes Facility Agreement provided for the issuance of 3-year notes
which bear interest rate at the PDST-F rate for three months plus a 2.25% spread. The notes are to
be paid in 15 principal payments amounting to P =53.3 million each quarter starting May 2, 2010.
*SGVMC410781*
- 49 -
In accordance with the notes facility agreement, CPPC’s DE ratio shall not exceed 3:1, provided
that upon redemption of redeemable preferred shares, DE ratio shall not exceed 5:1. CPPC is in
compliance with the debt covenant as of December 31, 2011 and 2010.
=1.6 million and =
HI
The loan availed by HI from BDO is a five-year loan of which P =450.0 million is payable at
=1.0 million per year starting 2006 with the remaining balance fully paid on January 28, 2010, and
P
=200.0 million is subject to a balloon payment on October 20, 2010. It bears interest at
P
2 1/4 % over the applicable three-month treasury securities as displayed on MART 1 page of
Bloomberg of the rate setting day plus gross receipts tax, reviewable and payable quarterly.
On February 28, 2009, HI, amended the terms of its long-term loans with BDO. Maturity dates of
the loans were changed from January 31, 2010 to February 28, 2016 for the =P450.0 million
long-term loans and from October 20, 2010 to February 28, 2016 for the P =200.0 million long-term
loans. The amended terms also changed interest rates from floating to fixed at 8.36% per annum.
The loan is secured by a chattel mortgage over the machineries and improvements of the Benguet
and Davao hydropower plants of HI and a suretyship of ARI.
Carrying value of machineries and improvements of the Benguet and Davao hydropower plants
mortgaged with BDO to secure loans amounted to P=403.4 million and P
=392.5 million as of
Loan covenant includes, among others, maintenance of debt service cover ratio of at least 1.1x and
DE ratio of 75:25, and restrictions such as not to declare or pay dividends to its stockholders if
debt service cover ratio is less than 1.2x nor shall it redeem or repurchase or retire or otherwise
acquire for value any of its capital stock. HI is in compliance with the debt covenants as of
LHC
The debt represents the balance of the refinanced US dollar loan availed in November 21, 2006.
Under the agreement LHC signed with local banks, the refinancing was accounted for as a simple
extension of its old debt. The final maturity will be on October 31, 2014. Remaining principal
payments are as follows: $4.51 million in 2012, $4.10 million in 2013 and $3.28 million in 2014.
It bears interest at base rate (sum of LIBOR for the interest period) plus margin, payable and to be
reviewed semi-annually in arrears calculated on the basis of a 360-day year and actual day
elapsed.
The loan is collateralized by certain assets of LHC (see Note 12). The Agreement provides for
certain financial ratios and negative covenants with respect to, among others, indebtedness,
investments, mergers, leases and abandonment. It also includes a provision allowing payments of
dividends or return of any capital only under certain circumstances. The loan covenant also
requires the maintenance of DE ratio of 70:30. LHC is in compliance with the debt covenants as
of December 31, 2011 and 2010.
*SGVMC410781*
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P
SEZ
a. On July 7, 2011, SEZ issued P =565.0 million worth of fixed rate notes outstanding anytime to
Metropolitan Bank and Trust Company (MBTC). The Note is priced at 100% of its face value,
divided equally into ten equal notes of =
P56.5M each maturing every year from issue date. The
net proceeds will be used to refinance existing loans, capital expenditure, and general
corporate purposes.
Interest rate is based on Benchmark Rate plus a spread of four tenths of one percent (0.40%)
per annum. If the Benchmark Rate plus spread of four tenths of one percent (0.40%) is lower
than three and half percent (3.50%) then the latter shall be used.
The loan covenant requires, among others, the maintenance of DE ratio of not more than 3:1.
As of December 31, 2011, SEZ is in compliance with the debt covenant.
b. On September 24, 2008, SEZ availed of a term loan of = P131.0 million to finance the
acquisition of subtransmission assets and to enhance the rehabilitation and expansion of the
SBMA PDS. The loan is payable in twelve years (inclusive of a one-year grace period on
principal repayment) in twenty-two equal semi-annual installments commencing on
March 24, 2010. It bears an interest of 8.26%, which is fixed for the first seven years. For the
succeeding five years, the interest will be fixed based on the applicable five-year PDST-R1 on
the first day of the eighth year plus 100 basis points.
The P
=131.0 million loan is secured by surety of the stockholders and assignment of rights and
benefits of SEZ related to revenue receivable and new equipment and assets to be purchased
and used in the SBMA PDS. The term loan agreement provides, among others, for the
maintenance of a minimum current ratio and a maximum DE ratio of 3.5:1. SEZ is in
compliance with the debt covenant as of December 31, 2010.
P
On March 24, 2011, the =

P131.0 million term loan was pre-terminated. The Company paid
pre-termination costs amounting to P
=125.2 million including interest and gross receipts tax.
BEZ
On June 28, 2010, BEZ availed of a P =70.0 million ten-year loan from MBTC to finance the
acquisition, construction and installation of a new substation and for working capital requirements.
The loan is payable in quarterly installments starting September 28, 2012.
Interest on the loan for the first five years is fixed at 7.50%. For the remaining five-year period
interest rate will be fixed at the prevailing five-year PDST- F interest rate for the day immediately
preceding the fixed interest setting date plus 1.00%.
*SGVMC410781*
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Loan covenant includes, among others, restrictions such as not to declare or pay dividends to its
stockholders if there are payments to the bank that are in arrears, permit any indebtedness to be
secured in violation of the executed deed of negative pledge nor shall it redeem or repurchase or
retire or otherwise acquire for value any of its capital stock. BEZ is in compliance with the loan
covenant as of December 31, 2011 and 2010.
17. Customers’ Deposits
2011 2010
Transformers P
=984,557 =854,669
P
Lines and poles 779,130 766,738
Bill and load 400,508 382,977
P
=2,164,195 =2,004,384
P
Transformers and lines and poles deposits are obtained from certain customers principally as cash
bond for their proper maintenance and care of the said facilities while under their exclusive use
and responsibility. These deposits are noninterest-bearing and are refundable only after their
related contract is terminated and the assets are returned to the Group in their proper condition and
all obligations and every account of the customer due to the Group shall have been paid.
Bill deposit serves to guarantee payment of bills by a customer which is estimated to equal one
month’s consumption or bill of the customer.
Both the Magna Carta and DSOAR also provide that residential and non-residential customers,
respectively, must pay a bill deposit to guarantee payment of bills equivalent to their estimated
monthly billing. The amount of deposit shall be adjusted after one year to approximate the actual
average monthly bills. A customer who has paid his electric bills on or before due date for three
consecutive years, may apply for the full refund of the bill deposit, together with the accrued
interests, prior to the termination of his service; otherwise, bill deposits and accrued interests shall
be refunded within one month from termination of service, provided all bills have been paid.
In cases where the customer has previously received the refund of his bill deposit pursuant to
Article 7 of the Magna Carta, and later defaults in the payment of his monthly bills, the customer
shall be required to post another bill deposit with the distribution utility and lose his right to avail
of the right to refund his bill deposit in the future until termination of service. Failure to pay the
required bill deposit shall be a ground for disconnection of electric service.
Interest expense on customers’ deposits amounted to P

=3.8 million in 2010
and P
The Group classified customers’ deposit under noncurrent assets due to the expected long-term
nature of these deposits.
*SGVMC410781*
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18. Payable to a Preferred Shareholder of a Subsidiary
The preferred shares of CPPC, a subsidiary, are voting, non-convertible, cumulative,

non-participating and have no preemptive rights. The preferred shares shall be issued only to
VECO who, as holder of the preferred shares, shall be entitled to receive cash dividends thereon at
an annual rate of 20.713% and, payable out of available surplus or net profits of CPPC before any
dividend shall be declared, set apart for or paid upon the common stock of CPPC. The guaranteed
minimum amount of annual dividends on these preferred shares is P =31.1 million, which is payable
within 60 days from end of each contract year starting November 25, 1998 to November 25, 2013.
Any unpaid dividend shall be subject to interest equivalent to the rate of a 91-day Treasury Bill
plus 5% per annum prevailing as of the preferred dividends accrual date.
After payment of the cumulative cash dividends on the preferred shares, the said preferred shares
shall have no further right to participate in any dividends which may be declared to the common
shareholders unless and until the aggregate of all cash dividends already declared and paid to the
common shares has resulted in the holders of the common shares having recovered the agreed
internal rate of return on their total equity investment in common shares. The common
shareholders and VECO shall then be entitled to participate in such residual dividends at 77.0%
and 23.0%, respectively.
PAS 32, Financial Instruments: Presentation, and PAS 39 require reclassification of the preferred
shares amounting to P=150.0 million as a financial instrument containing a liability and an equity
component. The liability component was remeasured at present value by discounting the
minimum guaranteed dividend payments. The difference between the present value and the
carrying amount of P=18.5 million pertains to the equity component attributable to the
non-controlling interests.
The discounted liability is accreted to maturity values using the effective interest rate method.
Accretions are recognized in the consolidated statements of income as part of interest expense.
Total interest expense arising from the accretion amounted to P

=19.8 million
in 2010 and P=21.9 million in 2009 (see Note 32).
Future minimum guaranteed dividend payments are as follows:
2011 2010
Due within one year P
=31,070 =31,070
P
More than one year but not more than five years 62,140 93,210
Future minimum guaranteed dividends 93,210 124,280
Less accrued interest expense 30,240 47,513
Future minimum guaranteed dividends - net 62,970 76,767
Less current portion 16,902 13,797
Noncurrent portion P
=46,068 =62,970
P
*SGVMC410781*
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19. Equity
a. Capital Stock
2011 2010
Authorized - =
P1 par value
Preferred shares - 1,000,000,000 shares
Common shares - 16,000,000,000 shares
Issued
Common shares - 7,358,604,307 shares =7,358,604
P =7,358,604
P
There are no preferred shares issued and outstanding as of December 31, 2011 and 2010.
Preferred shares are non-voting, non-participating, non-convertible, redeemable, cumulative,

and may be issued from time to time by the BOD in one or more series. The BOD is
authorized to issue from time to time before issuance thereof, the number of shares in each
series, and all the designations, relative rights, preferences, privileges and limitations of the
shares of each series. Preferred shares redeemed by the Company may be reissued. Holders
thereof are entitled to receive dividends payable out of the unrestricted retained earnings of the
Company at a rate based on the offer price that is either fixed or floating from the date of the
issuance to final redemption. In either case, the rate of dividend, whether fixed or floating,
shall be referenced, or be a discount or premium, to market-determined benchmark as the
BOD may determine at the time of issuance with due notice to the SEC.
In the event of any liquidation or dissolution or winding up of the Company, the holders of the
preferred stock shall be entitled to be paid in full the offer price of their shares before any
payment in liquidation is made upon the common stock.
On July 16, 2007, the Company listed with the PSE its common stock, wherein it offered
1,787,664,000 shares to the public at issue price of P
=5.80 per share. The total proceeds from
the issuance of new shares amounted to P =10.37 billion. The Company incurred transaction
costs incidental to the IPO amounting to P=412.4 million, which is charged against “Additional
paid-in capital” in the consolidated balance sheet.
As of December 31, 2011, 2010 and 2009, the Company has 530, 483 and 498 shareholders,
respectively.
b. Retained Earnings
On February 11, 2009, the BOD approved the declaration of cash dividends of
P0.20 a share (P
= =1.47 billion) to all stockholders of record as of February 26, 2009. The cash
dividends were subsequently paid on March 23, 2009.
(P
=2.21 billion) to all stockholders of record as of March 24, 2010. The cash dividends were
subsequently paid on April 16, 2010.
(P
*SGVMC410781*
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(P
20. Sale of Power
Sale from Distribution of Power
a. The Uniform Rate Filing Requirements on the rate unbundling released by the ERC on
October 30, 2001, specified that the billing for sale and distribution of power and electricity
will have the following components: Generation Charge, Transmission Charge, System Loss
Charge, Distribution Charge, Supply Charge, Metering Charge, the Currency Exchange Rate
Adjustment and Interclass and Lifeline Subsidies. National and local franchise taxes, the
Power Act Reduction (for residential customers) and the Universal Charge are also separately
indicated in the customer’s billing statements.
b. Pursuant to Section 43(f) of Republic Act (R.A.) No. 9136, otherwise known as the Electric
Power Industry Reform Act of 2001 (EPIRA), and Rule 15, section 5(a) of its Implementing
Rules and Regulations (IRR), the ERC promulgated the Distribution Wheeling Rates
Guidelines on December 10, 2004. These were subsequently updated and released on
July 26, 2006 as the Rules for Setting Distribution Wheeling Rates for Privately Owned
Utilities entering Performance Based Regulation (Second Entry Point).
In accordance with the Rules for the Setting of Distribution Wheeling Rates and the Position
Paper, DLP, CLP and SEZ filed various information and data relating to the requirements for
the Regulatory Reset Process. Following its consideration of the submissions received, the
discussions at the public consultation and further evidence presented by the distribution
utilities, the ERC prepared its Final Determination for DLP, CLP and SEZ.
Details of the Performance-based Regulation (PBR) application for the first regulatory period
are as follows:
CLP DLP SEZ
First regulatory period April 1, 2009 to July 1, 2010 to October 1, 2011 to
March 31, 2013 June 30, 2014 September 30, 2015
Date of implementation of May 1, 2009 August 1, 2010 November 26, 2011

approved distribution supply
and metering charges
Sale from Generation of Power
a. Energy Trading through the Philippine Wholesale Electricity Spot Market (WESM)
As approved by the Philippine Electricity Market Corporation (PEMC), effective on various

dates in 2009, certain companies in the Group are trading participants and direct members
under the generator sector of the WESM. The companies are allowed to access the WESM
Market Management System through its Market Participant Interface (MPI). The MPI is the
facility that allows the trading participants to submit and cancel bids and offers, and to view
market results and reports. Under its price determination methodology as approved by the
ERC, locational marginal price method is used in computing prices for energy bought and sold
*SGVMC410781*
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in the market on a per node, per hour basis. In the case of bilateral power supply contracts,
however, the involved trading participants settle directly with their contracting parties.
Total sale of power to WESM amounted to P

=4.92 billion, P
=14.94 billion and P
=1.96 billion in
2011, 2010 and 2009, respectively.
b. Power Supply Agreements
i. Power Supply Contracts assumed under APA and IPP Administration Agreement
Revenue recognition for customers under the power supply contracts assumed under the
APA and IPP Administration Agreements are billed based on the contract price which is
calculated based on the pricing structure approved by the ERC. Rates are calculated based
on the time-of-use pricing schedule with corresponding adjustments using the Generation
Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate
Adjustment (ICERA).
ii. Power Purchase/Supply Agreement and Energy Supply Agreement (PPA/PSA and ESA)
Certain subsidiaries have negotiated contracts with NPC, Private Distribution Utilities,
Electric Cooperatives and Commercial and Industrial Consumers referred to as PPA, PSA
or ESA. These contracts provide a tariff that allows these companies to charge for
capacity fees, fixed operating fees and energy fees.
Total sale of power under power supply contracts amounted to =

P35.02 billion in 2011,
=31.37 billion in 2010 and =
P P10.40 billion in 2009.
21. Purchased Power
Distribution
DLP, CLP, SEZ, and MEZ entered into contracts with NPC for the purchase of electricity. The
material terms of the contract are as follows:
Term of Agreement Contract Energy

with NPC (megawatt hours/year)
DLP Ten years; expiring in December 2015 1,238,475
CLP Ten years; expiring in December 2015 116,906
MEZ Ten years; expiring in September 2015 114,680
SEZ Two-and-a-half years; expired in March 2011 139,154
The Group’s distribution utilities also entered into Transmission Service Agreements with NGCP
for the transmission of electricity.
Total power purchases from the NPC and NGCP, net of discounts, amounted to = P6.99 billion in
2011, P
P7.12 billion in 2009. The outstanding payable to the NPC and
NGCP on purchased power, presented as part of the “Trade and other payables” account in the
consolidated balance sheets amounted to =P584.5 million and =
P468.1 million as of December 31,
2011 and 2010, respectively (see Note 14).
*SGVMC410781*
- 56 -
Generation
Purchased power takes place during periods when power generated from power plants are not
sufficient to meet customers’ required power as stated in the power supply contracts. Insufficient
supply of generated energy results from the shutdowns due to scheduled maintenance or an
emergency situation. The Group purchases power from WESM to ensure uninterrupted supply of
power and meet the requirements in the power supply contracts. Total purchases from WESM
amounted to = P2.01 billion in 2011, =
P858.5 million in 2010 and P
22. Cost of Generated Power
2011 2010 2009

Fuel costs P
=10,990,762 =11,551,522
P =2,645,484
P
Steam supply costs (see Note 36) 3,724,310 3,542,807 2,207,504
Energy fees 269,746 706,040 112,835
Wheeling expenses 52,846 28,126 6,098
Ancillary charges 44,339 53,831 51,545
Others – – 6,811
P
=15,082,003 =15,882,326
P =5,030,277
P
23. General and Administrative
2011 2010 2009

Personnel costs (see Note 25) P
=647,975 =517,814
P =369,216
P
Outside services (see Note 31) 389,289 287,975 469,439
Corporate social responsibility (CSR)
(see Note 38e) 320,236 40,634 130,249
Taxes and licenses 238,343 151,267 104,246
Transportation and travel (see Note 31) 135,847 92,862 77,051
Repairs and maintenance 85,567 53,843 92,805
Professional fees (see Note 31) 59,126 37,770 131,264
Market service and administrative fees
(see Note 31) 58,279 125,775 50,717
Information technology
and communication 54,143 36,614 91,466
Insurance 38,219 3,657 29,732
Training 35,225 8,939 8,038
Rent (see Note 35) 33,966 22,329 10,942
Provision for (reversal of ) impairment
and write-off of trade receivables
(see Note 5) (32,349) 292,065 137,595
Advertisements 23,677 17,867 5,126
Research and development 12,772 4,682 28,175
Entertainment, amusement and recreation 8,083 5,598 4,846
Guard services 6,110 5,498 6,111
Gasoline and oil 1,912 1,219 2,172
Freight and handling 1,870 5,759 1,404
Others 141,541 274,659 151,834
P
=2,259,831 =1,986,826
P =1,902,428
P
*SGVMC410781*
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24. Operations and Maintenance
2011 2010 2009

Personnel costs (see Note 25) P
=659,728 =534,582
P =334,509
P
Repairs and maintenance 521,495 286,009 212,090
Taxes and licenses 276,032 377,356 295,730
Insurance 257,877 197,893 93,006
Outside services 207,741 69,483 120,448
Materials and supplies 133,470 226,808 174,701
Rent (see Note 35) 29,534 234 12,024
Fuel and lube oil 18,229 393,052 47,588
Transportation and travel 16,128 30,081 11,081
Others 97,813 322,430 35,810
P
=2,218,047 =2,437,928
P =1,336,987
P
25. Personnel Costs
2011 2010 2009

Salaries and wages P
=977,669 =856,063
P =553,695
P
Employee benefits (see Note 26) 330,034 196,333 150,030
P
=1,307,703 =1,052,396
P =703,725
P
26. Pension Benefit Plans
Most of the companies in the Group have funded defined benefit pension plans covering all
regular and permanent employees. The benefits are based on employees’ projected salaries and
number of years of service.
The following tables summarize the components of net benefit expense recognized in the
consolidated statements of income and the funded status and amounts recognized in the
consolidated balance sheets.
Net benefit expense (income) (recognized as part of personnel costs under operations and
maintenance and general and administrative):
2011 2010 2009

Current service cost P
=55,251 =41,612
P =7,669
P
Interest cost on benefit obligation 45,706 41,099 32,787
Past service cost 290 287 230
Net actuarial loss (gain) recognized 9,490 10,006 (2,672)
Expected return on plan assets (35,324) (24,524) (22,626)
Net pension asset in excess of limit – – (20,180)
P
=75,413 =68,480
P (P
=4,792)
Actual return on plan assets is P

=49.5 million in 2010 and P=65.6 million in
2009. The Group expects to contribute P =45.9 million to their retirement fund in 2012.
*SGVMC410781*
- 58 -
The overall expected return on plan assets is determined based on the market expectations
prevailing on that date, applicable to the period over which the obligation is to be settled.
As of December 31, 2011, HSI, APRI, TLI, Therma Mobile, Therma Marine and TSI are in net
pension liability position while the rest of the companies in the Group are in net pension asset
position. As of December 31, 2010, HSI, APRI, TLI and Therma Marine are in net pension
liability position while the rest of the companies in the Group are in net pension asset position.
Pension assets
2011 2010
Fair value of plan assets P
=577,141 =491,467
P
Defined benefit obligation 753,837 528,041
Unfunded obligation (176,696) (36,574)
Unrecognized past service cost 3,028 1,786
Unrecognized net actuarial losses 341,967 208,230
P
=168,299 =173,442
P
Pension liabilities
2011 2010
=59,923 =18,134
P
Fair value of plan assets 6,145 –
Unfunded obligation 53,778 18,134
Unrecognized net actuarial losses (26,813) (2,133)
P
=26,965 =16,001
P
Changes in the present value of the defined benefit obligation are as follows:
2011 2010
Opening defined benefit obligation P
=546,175 =427,489
P
Actuarial losses 164,554 56,159
Current service cost 55,251 41,612
Interest cost on benefit obligation 45,706 41,099
Benefits paid (9,557) (6,772)
Increase from step-acquisition (see Note 8) 7,568 –
Past service cost 1,531 –
Fund transfers to (from) affiliates 2,529 (13,412)
Closing defined benefit obligation P
=813,757 =546,175
P
Changes in the fair value of plan assets are as follows:
2011 2010
Opening fair value of plan assets P
=491,467 =245,222
P
Contribution by employer 56,887 216,894
Actuarial gains 35,320 25,011
Expected return on plan assets (9,557) 24,524
Increase from step-acquisition (see Note 8) 7,294 –
Benefits paid 2,529 (6,772)
Fund transfer from affiliates (445) (13,412)
Closing fair value of plan assets P
=583,495 =491,467
P
*SGVMC410781*
- 59 -
The principal assumptions used in determining the pension obligations for the Group’s plans are
shown below:
2011 2010
Discount rate 6.20% - 10.92% 7.80% - 10.92%
Expected rate of return on assets 7.00% - 11.00% 7.00% - 10.00%
Future salary increase 6.00 - 11.00% 6.00% - 8.00%
As of December 31, 2011, discount rates used has decreased to 5.99% to 7.02% with salary
increase rates of 6.00% and expected rates of return on plan assets of 7.00%, based on the latest
actuarial valuation of retirement benefits of each of the entity in the Group.
Amounts for the current and previous four periods are as follows:
2011 2010 2009 2008 2007

=813,757 P546,175
= P427,489
= P124,107
= P191,777
=
Plan assets 583,495 491,467 245,222 205,052 228,609
Surplus (deficit) (230,262) (54,708) (182,267) 80,945 36,832
Experience adjustment on plan liability 63,728 49,759 23,911 (8,408) (7,143)
Experience adjustment on pension asset 132 25,011 22,256 (16,123) (6,231)
The major categories of plan assets as a percentage of the fair value of the total plan assets are as
follows:
2011 2010 2009

Commercial papers 79% 76% 67%
Marketable securities 20% 22% 26%
Others 1% 2% 7%
27. Other Income - net
2011 2010 2009

Recovery of payments to PSALM P
=187,382 =113,408
P =–
P
Non-utility operating income 151,837 168,786 174,586
Surcharges 123,067 101,626 82,368
Net foreign exchange gains (losses)
(see Note 32) (31,381) 1,142,158 348,815
Wheeling fees 15,358 50,751 51,957
Others 246,586 23,670 155,685
P
=692,849 =1,600,399
P =813,411
P
*SGVMC410781*
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28. Income Tax
The provision for income tax account consists of:
2011 2010 2009

Current:
Corporate income tax P
=825,256 =548,509
P =775,563
P
Final tax 164,608 43,276 64,659
989,864 591,785 840,222
Deferred 127,345 328,912 (209,032)
P
=1,117,209 =920,697
P =631,190
P
Reconciliation between the statutory income tax rate and the Group’s effective income tax rates
follows:
2011 2010 2009

Statutory income tax rate 30.00% 30.00% 30.00%
Tax effects of:
Nondeductible interest expense 7.36 5.90 5.79
Nondeductible depreciation expense 1.43 1.26 1.28
Interest income subjected to final tax at
lower rates - net (0.34) (0.21) (0.71)
Nontaxable share in net earnings of
associates (11.00) (5.34) (11.88)
Income under income tax holiday (ITH) (22.39) (29.72) (9.99)
Others (0.19) 1.65 (4.63)
4.87% 3.54% 9.86%
Deferred income taxes of the companies in the Group that are in deferred income tax assets and
liabilities position consist of the following at December 31:
2011 2010
Net deferred income tax assets:
NOLCO P
=118,862 =141,619
P
Difference between the carrying amount of
nonmonetary assets and the related tax base 61,039 –
Allowances for impairment and probable losses 20,103 27,611
Unamortized past service cost 24,599 23,256
MCIT 15,184 16,417
Pension asset (13,484) (17,768)
Unrealized foreign exchange losses (gains) (4,407) 5,455
Others 4,976 3,232
Net deferred income tax assets P
=226,872 =199,822
P
*SGVMC410781*
- 61 -
2011 2010
Net deferred income tax liabilities:
Unrealized foreign exchange gains P
=399,888 =319,631
P
Pension asset 28,920 28,684
Unamortized customs duties and taxes
capitalized 21,742 18,324
Unamortized streetlight donations capitalized 6,676 6,249
Capitalized interest expense 5,508 5,565
Allowances for doubtful accounts
and probable losses (40,215) (32,196)
Unamortized past service cost (18,493) (21,127)
Others (6,038) (4,009)
Net deferred income tax liabilities P
=397,988 =321,121
P
In computing for deferred income tax assets and liabilities, the rates used were 30% and 10%,
which are the rates expected to apply to taxable income in the years in which the deferred income
tax assets and liabilities are expected to be recovered or settled and considering the tax rate for
renewable energy (RE) developers as allowed by the Renewable Energy Act of 2008
(see Note 38d).
No deferred income tax assets were recognized on the Company’s NOLCO and MCIT amounting
to =
P220.5 million and =P30.9 million, respectively, as of December 31, 2011 and P =114.8 million
and P=23.8 million respectively, as of December 31, 2010, since management expects that it will
not generate sufficient taxable income in the future that will be available to allow all of the
deferred income tax assets to be utilized.
There are no income tax consequences to the Group attaching to the payment of dividends to its
shareholders.
29. Earnings Per Common Share
Earnings per common share amounts were computed as follows:
2011 2010 2009

a. Net income attributable to equity
holders of the parent P
=21,608,253 =25,041,116
P =5,658,581
P
b. Weighted average number of
common shares issued and
outstanding 7,358,604,307 7,358,604,307 7,358,604,307
Earnings per common share (a/b) P
=2.94 =3.40
P =0.77
P
There are no dilutive potential common shares as of December 31, 2011, 2010 and 2009.
*SGVMC410781*
- 62 -
30. Business Segment Information
Operating segments are components of the Group that engage in business activities from which
they may earn revenues and incur expenses, whose operating results are regularly reviewed by the
Group’s CODM to make decisions about how resources are to be allocated to the segment and
assess their performances, and for which discrete financial information is available.
For purposes of management reporting, the Group’s operating businesses are organized and
managed separately according to services provided, with each segment representing a strategic
business segment. The Group identified operating segments, which are consistent with the
segments reported to the BOD, which is the Group’s CODM, as follows:
· “Power Generation” segment, which is engaged in the generation and supply of power to
various customers under power supply contracts, ancillary service procurement agreements
and for trading in WESM;
· “Power Distribution” segment, which is engaged in the distribution and sale of electricity to
the end-users; and
· “Parent Company and Others”, which includes the operations of the Company and electricity-
related services of the Group such as installation of electrical equipment.
The Group has only one geographical segment as all of its assets are located in the Philippines.
The Group operates and derives principally all of its revenue from domestic operations. Thus,
geographical business information is not required.
Management monitors the operating results of its segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment revenue and segment
expenses are measured in accordance with PFRS. The presentation and classification of segment
revenue and segment expenses are consistent with the consolidated statement of income. Interest
expense and financing charges, depreciation and amortization expense and income taxes are
managed on a per segment basis.
The Group has inter-segment revenues in the form of management fees as well as inter-segment
sales of electricity which are eliminated in consolidation. The transfers are accounted for at
competitive market prices on an arm’s-length transaction basis.
Segment assets do not include deferred income tax assets, pension asset and other noncurrent
assets. Segment liabilities do not include deferred income tax liabilities, income tax payable and
pension liability. Capital expenditures consist of additions of property, plant and equipment and
intangible asset - service concession rights. Adjustments as shown below include items not
presented as part of segment assets and liabilities.
Revenue is recognized to the extent that it is probable that economic benefits will flow to the
Group, and that the revenue can be reliably measured. Sale of power to Manila Electric Company
accounted for 40%, 31% and 30% of the power generation revenues of the Group in 2011, 2010
and 2009, respectively; while sale of power to VECO accounted for 17% of the power generation
revenues of the Group in 2009.
*SGVMC410781*
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Financial information on the operations of the various business segments are summarized as
follows:
2011
Parent
Power Power Company/ Eliminations and
Generation Distribution Others Adjustments Consolidated
REVENUE
External = 39,944,982
P = 14,356,619
P P174,036
= =–
P = 54,475,637
P
Inter-segment 1,554,273 – 354,273 (1,908,546) –
Total Revenue = 41,499,255

P = 14,356,619
P = 528,309
P (P
= 1,908,546) = 54,475,637
P
Segment Results = 18,394,147

P = 1,909,961
P = 51,307
P P–
= = 20,355,415
P
Unallocated corporate income - net 332,596 362,764 (2,511) – 692,849
INCOME FROM OPERATIONS 18,726,743 2,272,725 48,796 – 21,048,264

Interest expense (5,901,765) (88,574) (1,355,236) – (7,345,575)
Interest income 405,894 17,285 438,342 – 861,521
Share in net earnings of associates 7,854,369 583,785 22,579,435 (22,580,683) 8,436,906
Provision for income tax (431,708) (588,321) (97,180) – (1,117,209)
NET INCOME = 20,653,533

P = 2,196,900
P = 21,614,157
P (P
= 22,580,683) = 21,883,907
P
OTHER INFORMATION
Investments in Associates = 25,110,504
P = 2,628,670
P = 70,744,750
P (P
= 70,337,960) = 28,145,964
P
Capital Expenditures = 6,607,335

P = 906,701
P = 13,222
P =–
P = 7,527,258
P
Segment Assets = 130,059,885

P = 9,713,190
P = 82,157,724
P (P
= 68,402,860) = 153,527,939
P
Segment Liabilities = 66,446,087

P = 6,029,352
P = 13,701,168
P (P
= 2,840,885) = 83,335,722
P
Depreciation and Amortization = 2,942,432

P = 384,190
P = 19,160
P =–
P = 3,345,782
P
2010
Parent
REVENUE
External =46,313,904
P =13,064,593
P =172,961
P =–
P =59,551,458
P
Inter-segment 668,500 – 292,314 (960,814) –
Total Revenue =46,982,404

P =13,064,593
P =465,275
P (P
=960,814) =59,551,458
P
Segment Results =24,726,557

P =1,400,678
P =146,562
P =–
P =26,273,797
P
Unallocated corporate income - net 1,208,074 379,240 (29,132) – 1,558,182
INCOME FROM OPERATIONS 25,934,631 1,779,918 117,430 – 27,831,979

Interest expense (5,463,077) (100,913) (1,133,262) 18,959 (6,678,293)
Interest income 120,306 12,956 109,855 (18,959) 224,158
Provision for income tax (354,867) (432,115) (133,715) – (920,697)
NET INCOME =24,390,362

P =1,732,360
P =25,062,756
P (P
=26,102,448) =25,083,030
P
OTHER INFORMATION
Investments in Associates =24,269,963
P =2,543,397
P =51,660,757
P (P
=51,544,121) =26,929,996
P
Capital Expenditures =3,487,167

P =791,791
P =33,319
P =–
P =4,312,277
P
Segment Assets =111,352,105

P =8,874,380
P =73,641,432
P (P
=59,311,045) =134,556,872
P
Segment Liabilities =65,915,598

P =4,319,612
P =16,432,358
P (P
=9,844,906) =76,822,662
P
Depreciation and Amortization =2,658,121

P =328,976
P =16,880
P =–
P =3,003,977
P
*SGVMC410781*
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2009
Parent
REVENUE
External =12,359,479
P =10,734,427
P P80,359
= =–
P =23,174,265
P
Inter-segment 106,364 – 215,503 (321,867) –
Total Revenue =12,465,843

P =10,734,427
P =295,862
P (P
=321,867) =23,174,265
P
Segment Results =4,362,774

P =1,196,104
P (P
=102,711) =–
P =5,456,167
P
Unallocated corporate income - net 379,117 369,535 64,759 – 813,411
INCOME FROM OPERATIONS 4,741,891 1,565,639 (37,952) – 6,269,578

Interest expense (1,884,802) (106,097) (852,759) 29,680 (2,813,978)
Interest income 47,656 12,583 379,413 (29,680) 409,972
Benefit from (provision for) income
tax (413,892) (376,376) 159,078 – (631,190)
NET INCOME =4,718,109

P =1,403,879
P =5,668,954
P (P
=6,021,174) =5,769,768
P
OTHER INFORMATION
Investments in Associates =21,725,730
P =2,270,325
P =28,446,450
P (P
=28,446,450) =23,996,055
P
Capital Expenditures =22,833,453

P =691,660
P =18,310
P =–
P =23,543,423
P
Segment Assets =99,782,249

P =7,944,648
P =52,147,029
P (P
=48,533,209) =111,340,717
P
Segment Liabilities =76,463,801

P =4,481,135
P =17,832,473
P (P
=22,483,619) =76,293,790
P
Depreciation and Amortization =1,069,904

P =330,696
P =12,300
P =–
P =1,412,900
P
31. Related Party Disclosures
Parties are considered to be related if one party has the ability to control, directly or indirectly, the
other party or exercise significant influence over the other party in making financial and operating
decisions. Parties are also considered to be related if they are subject to common control or
common significant influence. Related parties may be individuals or corporate entities.
The Group enters into transactions with its parent, associates and other related parties, principally
consisting of the following:
a. AEV provides human resources, internal audit, legal, treasury and corporate finance services,
among others, to the Group and shares with the member companies the business expertise of
its highly qualified professionals. Transactions are priced on a cost recovery basis, and billed
costs are always benchmarked on third party rates to ensure competitive pricing. Service
Level Agreements are in place to ensure quality of service. This arrangement enables the
Group to maximize efficiencies and realize cost synergies. Management, professional, legal
and other service fees paid by the Group to AEV amounted to = P424.8 million in 2011,
P P409.4 million in 2009, respectively (see Note 23).
b. The Company also obtained standby letters of credit (SBLC) and is acting as surety for the
benefit of certain subsidiaries and associates in connection with loans and credit
accommodations. The Company provided SBLC for STEAG, LHC, SNAP M and SNAP B in
the amount of =P2.50 billion in 2011, =
P1.70 billion in 2010 and P
=1.80 billion in 2009.
*SGVMC410781*
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c. Energy fees billed by HI to SFELAPCO amounted to nil in 2011 and 2010 and =
P19.6 million
in 2009.
d. Energy fees billed by CPPC to VECO amounted to =

P1.37 billion in 2011, P
=2.04 billion in
2010 and P
=2.10 billion in 2009.
e. The Group entered into replacement power contracts with SNAP M and SNAP B, associates.
Energy fees billed by the Group to SNAP M amounted to =P61.2 million in 2011 and
=66.8 million in 2010. The Group also purchased energy from SNAP B amounting to
P
P
f. Energy fees billed by Therma Marine to Pilmico Foods Corporation (PFC) in 2011 amounted
to =
P29.8 million in 2011 and =
P47.4 million in 2010. PFC is a subsidiary of AEV.
g. Energy fees billed by BEZC to affiliates (ACO subsidiaries and associates) amounted to
P =521.9 million in 2010 and =
P287.7 million in 2009. BEZC also
purchased energy from associates amounting to =P288.9 million in 2011.
h. Aviation services rendered by AAI, an associate, to the Group. Total expenses amounted to
=37.5 million in 2011, =
P P32.7 million in 2010 and =
P24.8 million in 2009.
i. Lease of commercial office units by the Group from Cebu Praedia Development Corporation
(CPDC) for a period of three years. Rental expense amounted to =
P48.2 million in 2009. CPDC is a subsidiary of AEV.
P
j. The Company provides services to certain associates such as technical and legal assistance for
various projects and other services. Total technical and service fee income from associates
amounted to =P105.8 million in 2011, =P93.7 million in 2010 and P=2.2 million in 2009
(see Note 27).
k. Cash deposits with Union Bank of the Philippines (UBP) earn interest at prevailing market
rates (see Note 4). Total cash deposits of the Group amounted to =
P7.61 billion in and
P4.87 billion as of December 31, 2011 and 2010, respectively. Total interest earned on
=
deposits with UBP amounted to P =209.5 million in 2011 and P
=125.9 million in 2010. UBP is
an associate of AEV.
l. Amounts owed to/by related parties, both interest and noninterest-bearing, payable on
demand. Interest-bearing balances are based on annual interest rates ranging from 1.50% to
6.50% in 2011, 1.80% to 8.25% in 2010 and 3.00% to 9.25% in 2009. Net interest expense
incurred on these balances amounted to P
=0.1 million in 2011 and P=1.5 million in 2010. Net
interest income earned on these balances amounted to P=55.8 million in 2009 (see Note 32).
*SGVMC410781*
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Significant outstanding account balances with related parties (see Notes 5 and 14) as of
Amounts Owed by Related Parties Amounts Owed to Related Parties

2011 2010 2011 2010
Parent
AEV P
=– =–
P P
=– =63,848
P
Associates
VECO 141,642 133,906 – –
CEDC 36,520 45,100 29,482 –
RP Energy 17 15,782 – –
SFELAPCO 38 84 – –
Aboitiz Construction Group, Inc. (ACGI) – – 102,644 –
EAUC – – 32,221 129,999
Other Related Parties

Tsuneishi Heavy Industries, (Cebu)
Inc. (THICI) 59,423 49,681 – –
PFC – 3,375 – –
ACGI is a subsidiary of ACO. THICI is an associate of ACO.
Compensation of BOD and key management personnel of the Group follows:
2011 2010 2009

Short-term benefits P
=274,300 =144,279
P =125,451
P
Post-employment benefits 15,675 6,634 3,832
P
=289,975 =150,913
P =129,283
P
32. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash and cash equivalents and long-term
debts. The main purpose of these financial instruments is to raise finances for the Group’s
operations. The Group has various other financial instruments such as trade and other receivables,
AFS investments, restricted cash, bank loans, trade and other payables, finance lease obligation,
payable to preferred shareholder of a subsidiary, long-term obligation on power distribution
system and customers’ deposits, which arise directly from its operations.
The Group also enters into derivative transactions, particularly foreign currency forwards, to
economically hedge its foreign currency risk from foreign currency denominated liabilities and
purchases (see Note 33).
Risk Management Structure

The BOD is mainly responsible for the overall risk management approach and for the approval of
risk strategies and principles of the Group.
Financial risk committee

The Financial Risk Committee has the overall responsibility for the development of risk strategies,
principles, frameworks, policies and limits. It establishes a forum of discussion of the Group’s
approach to risk issues in order to make relevant decisions.
*SGVMC410781*
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Treasury service group

The Treasury Service Group is responsible for the comprehensive monitoring, evaluating and
analyzing of the Group’s risks in line with the policies and limits.
The main risks arising from the Group’s financial instruments are interest rate risk resulting from
movements in interest rates that may have an impact on outstanding long-term debt; credit risk
involving possible exposure to counter-party default on its cash and cash equivalents, AFS
investments and trade and other receivables; liquidity risk in terms of the proper matching of the
type of financing required for specific investments; and foreign exchange risk in terms of foreign
exchange fluctuations that may significantly affect its foreign currency denominated placements
and borrowings.
The main risks arising from the Group’s financial instruments are liquidity risk, interest rate risk,
foreign exchange risk, and credit risk. The BOD reviews and agrees on policies for managing
each of these risks and they are summarized below.
Liquidity risk
Liquidity risk is the risk of not meeting obligations as they become due because of the inability to
liquidate assets or obtain adequate funding. The Group maintains sufficient cash and cash
equivalents to finance its operations. Any excess cash is invested in short-term money market
placements. These placements are maintained to meet maturing obligations and pay any dividend
declarations.
In managing its long-term financial requirements, the Group’s policy is that not more than 25% of
long term borrowings should mature in any twelve-month period. 2.06% of the Group’s debt will
mature in less than one year as of December 31, 2011 (2010: 2.49%). For its short-term funding,
the Group’s policy is to ensure that there are sufficient working capital inflows to match
repayments of short-term debt.
The financial assets that will be principally used to settle the financial liabilities presented in the
following table are from cash and cash equivalents and trade and other receivables that have
contractual undiscounted cash flows amounting to P =23.39 billion and P =9.51 billion as of
December 31, 2011 and = P18.30 billion and =P6.81 billion as of December 31, 2010, respectively
(see Notes 4 and 5). Cash and cash equivalents can be withdrawn anytime while trade and other
receivables are expected to be collected/realized within one year.
The following tables summarize the maturity profile of the Group’s financial liabilities as of
December 31, 2011 and 2010 based on contractual undiscounted payments:
December 31, 2011
Total
carrying Contractual undiscounted payments
value Total On demand <1 year 1 to 5 years > 5 years
Trade and other payables = 4,770,728
P = 4,770,728
P = 81,460
P = 4,689,268
P =–
P =–
P
Due to related parties 18,415 18,415 18,415 – – –
Customers’ deposits 2,164,195 2,192,050 – 35,016 53,248 2,103,786
Bank loans 1,614,600 1,616,423 – 1,616,423 – –
Payable to a preferred shareholder
of a subsidiary 62,970 93,210 – 31,070 62,140 –
Finance lease obligation 52,714,959 110,292,493 – 2,534,784 38,142,989 69,614,720
Long-term obligation on power
distribution system 277,046 640,000 – 40,000 200,000 400,000
Long-term debts 18,804,982 29,311,121 – 2,846,647 18,732,933 7,731,541
Derivative liabilities 7,580 7,580 – 7,580 – –
= 80,435,475
P = 148,942,020
P = 99,875
P = 11,800,788
P = 57,191,310
P = 79,850,047
P
*SGVMC410781*
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December 31, 2010
Total
carrying Contractual undiscounted payments
value Total On demand <1 year 1 to 5 years > 5 years
Trade and other payables =4,748,034
P =4,748,034
P =1,126,819
P =3,621,215
P =–
P =–
P
Due to related parties 129,999 129,999 129,999 – – –
Customers’ deposits 2,004,384 2,019,151 100 41,402 37,888 1,939,761
Bank loans 1,979,800 2,002,575 – 2,002,575 – –
of a subsidiary 76,767 124,280 – 31,070 93,210 –
Finance lease obligation 48,305,116 111,394,573 – 1,102,080 24,146,573 86,145,920
distribution system 282,559 680,000 – 40,000 200,000 440,000
Long-term debts 16,703,113 26,552,968 – 2,184,947 21,344,452 3,023,569
Derivative liabilities 323 323 – 323 – –
=74,230,095
P =
P147,651,903 =1,256,918
P =9,023,612
P =45,822,123
P =91,549,250
P
Market Risk
The risk of loss, immediate or over time, due to adverse fluctuations in the price or market value
of instruments, products, and transactions in the Group’s overall portfolio (whether on or off-
balance sheet) is market risk. These are influenced by foreign and domestic interest rates, foreign
exchange rates and gross domestic product growth.
Interest rate risk

The Group’s exposure to market risk for changes in interest rates relates primarily to its long-term
debt obligations. To manage this risk, the Group determines the mix of its debt portfolio as a
function of the level of current interest rates, the required tenor of the loan, and the general use of
the proceeds of its various fund raising activities. As of December 31, 2011, 5% of the Group’s
long-term debt had floating interest rates ranging from 2.44% to 6.08%, and 95% have fixed rates
ranging from 3.68% to 9.33%. As of December 31, 2010, 4% of the Group’s long-term debt had
floating interest rates ranging from 6.68% to 6.71%, and 96% have fixed interest rates ranging
from 7.50% to 8.26%.
The following tables set out the carrying amounts, by maturity, of the Group’s financial
instruments that are exposed to cash flow interest rate risk:
As of December 31, 2011

<1 year 1-5 years >5 years Total
Floating rate - long-term debt P
=409,153 P
=533,429 P
=– P
=942,582
Floating rate - payable to a preferred
shareholder of a subsidiary 16,902 46,068 – 62,970
Total P
=426,055 P
=579,497 P
=– P
=1,005,552
<1 year 1-5 years >5 years Total

Floating rate - long-term debt =213,333
P P423,100
= =–
P =636,433
P
Floating rate - payable to a preferred
shareholder of a subsidiary 13,797 62,970 – 76,767
Total =227,130
P =486,070
P P–
= =713,200
P
*SGVMC410781*
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Interest on financial instruments classified as floating rate is repriced at intervals of less than one
year. Interest on financial instruments classified as fixed rate is fixed until the maturity of the
instrument. The other financial instruments of the Group that are not included in the above tables
are non-interest-bearing and are therefore not subject to interest rate risk. The Group’s derivative
assets and liabilities are subject to fair value interest rate risk (see Note 33).
The following table demonstrates the sensitivity to a reasonably possible change in interest rates,
with all other variables held constant, of the Group’s income before tax (through the impact on
floating rate borrowings):
Increase Effect
(decrease) in on income
basis points before tax
December 2011 200 (P
=18,852)
(100) 9,426
December 2010 100 (P
=6,364)
(50) 3,182
December 2009 100 =–
P
(50) –
The Group’s sensitivity to an increase/decrease in interest rates pertaining to floating rate

borrowings was expected to be insignificant in 2009 due to the immateriality of payable to a
preferred shareholder of a subsidiary relative to the total liabilities of the Group.
The Group’s sensitivity to an increase/decrease in interest rates pertaining to derivative

instruments is expected to be insignificant in 2011 and 2010 due to their short-term maturities and
immateriality relative to the total assets and liabilities of the Group.
There is no other impact on the Group’s equity other than those already affecting the consolidated
statements of income.
The interest expense and other finance charges recognized during the period according to source
are as follows:
2011 2010 2009

Finance lease obligation (see Note 35) =5,476,632
P =5,115,549
P =1,234,905
P
Bank loans and long-term debt
(see Notes 15 and 16) 1,800,164 1,481,765 1,515,519
Long-term obligation on power distribution
system (see Note 12) 34,487 35,099 35,644
Amounts owed to related parties
(see Note 31) 15,027 22,305 322
Payable to a preferred shareholder of
subsidiary (see Note 18) 17,273 19,807 21,876
Customers’ deposits (see Note 17) 1,992 3,768 5,712
=7,345,575
P =6,678,293
P =2,813,978
P
*SGVMC410781*
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Foreign exchange risk

The foreign exchange risk of the Group pertains significantly to its foreign currency denominated
obligations. To manage its foreign exchange risk, stabilize cash flows and improve investment
and cash flow planning, the Group enters into foreign currency forward contracts aimed at
reducing and/or managing the adverse impact of changes in foreign exchange rates on financial
performance and cash flows. Foreign currency denominated borrowings account for 37% of total
consolidated borrowings, as of December 31, 2011 and 2010.
Presented below are the Group’s foreign currency denominated financial assets and liabilities as of
December 31, 2011 and 2010, translated to Philippine Peso:
December 31, 2011 December 31, 2010

Philippine Peso Philippine Peso
US Dollar equivalent1 US Dollar equivalent2
Loans and receivables:
Cash US$13,840 =606,752
P US$8,019 =351,553
P
Trade and other receivables 356 15,604 963 42,218
Advances to associates 885 38,781 13,402 587,544
Total financial assets 15,081 661,137 22,384 981,315
Other financial liabilities:
Trade and other payables 8,048 352,827 5,682 249,099
11,890 521,257 – –
Finance lease obligation 609,712 26,729,765 563,388 24,698,930
Total financial liabilities 629,650 27,603,849 569,070 24,948,029
Total net financial liabilities (US$614,569) (P
=26,942,712) (US$546,686) (P
=23,966,714)
1
$1 = =
P43.840
2
$1 = =
P43.840
The following table demonstrates the sensitivity to a reasonably possible change in the US
dollar exchange rates, with all other variables held constant, of the Group’s income before
tax as of December 31, 2011 and 2010:
Effect on income
Increase/ (decrease) in US Dollar before tax
December 31, 2011
US dollar denominated accounts US Dollar strengthens by 5% (P
=1,347,136)
US dollar denominated accounts US Dollar weakens by 5% 1,347,136
December 31, 2010

US dollar denominated accounts US Dollar strengthens by 5% (P
=1,198,336)
US dollar denominated accounts US Dollar weakens by 5% 1,198,336
The increase in US Dollar rate represents the depreciation of the Philippine Peso while the
decrease in US Dollar rate represents appreciation of the Philippine Peso.
The Group’s sensitivity to an increase/decrease in foreign currency pertaining to derivative

instruments is expected to be insignificant in 2011 and 2010 due to their short-term maturities and
immateriality relative to the total assets and liabilities of the Group.
There is no other impact on the Group’s equity other than those already affecting the consolidated
statements of income.
*SGVMC410781*
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Credit risk
For its cash investments (including restricted portion), AFS investments and receivables, the
Group’s credit risk pertains to possible default by the counterparty, with a maximum exposure
equal to the carrying amount of these investments. With respect to cash investments and AFS
investments, the risk is mitigated by the short-term and/or liquid nature of its cash investments
mainly in bank deposits and placements, which are placed with financial institutions and entities
of high credit standing. With respect to receivables, credit risk is controlled by the application of
credit approval, limit and monitoring procedures. It is the Group’s policy to only enter into
transactions with credit-worthy parties to mitigate any significant concentration of credit risk. The
Group ensures that sales are made to customers with appropriate credit history and it has internal
mechanisms to monitor the granting of credit and management of credit exposures.
Concentration Risk
Credit risk concentration of the Group’s receivables according to the customer category as of
December 31, 2011 and 2010 is summarized in the following table:
2011 2010
Power distribution:
Residential P
=312,099 =308,887
P
Commercial 126,467 164,468
Industrial 448,805 420,154
City street lighting 6,617 8,619
Power generation:
Spot market 741,102 1,702,790
Power supply contracts 4,945,887 3,669,286
P
=6,580,977 =6,274,204
P
The above receivables were provided with allowance for doubtful accounts amounting to
P P376.9 million in 2010 (see Note 5).
Maximum exposure to credit risk after collateral and other credit enhancements
The maximum exposure of the Group’s financial instruments is equivalent to the carrying values
as reflected in the consolidated balance sheet and related notes, except that the credit risk a
associated with the receivables from customers is mitigated because some of these receivables
have collaterals.
Maximum exposure to credit risk for collateralized loans is shown below:
2011 2010
Financial Financial
Effect of Effect of
Collateral in Maximum Collateral in Maximum
Carrying Mitigating Exposure to Carrying Mitigating Exposure to
Value Credit Risk Credit Risk Value Credit Risk Credit Risk
Trade receivables:
Power distribution = 893,988
P = 893,988
P =–
P =902,128
P =902,128
P =–
P
Financial effect of collateral in mitigating credit risk is equivalent to the fair value of the collateral
or the carrying value of the loan, whichever is lower.
*SGVMC410781*
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Credit Quality
The credit quality per class of financial assets is as follows:
December 31, 2011
Past due or
Neither past due nor impaired individually
Cash and cash equivalents:
=3,406,187 P
=– P
=– P
=– P
=3,406,187
Short-term investments 19,985,374 – – – 19,985,374
23,391,561 – – – 23,391,561
Trade receivables:
Residential 36,039 79,680 102,485 93,895 312,099
Commercial 18,607 52,806 25,598 29,456 126,467
Industrial 384,223 20,251 26,160 18,171 448,805
City street lighting 821 3,437 1,148 1,211 6,617
Spot market 45 170,971 – 570,086 741,102
Power supply contracts 3,432,521 – 290 1,513,076 4,945,887
3,872,256 327,145 155,681 2,225,895 6,580,977
Other receivables 3,054,581 51,378 258 133,213 3,239,430
AFS investments 3,744 – – – 3,744
Total P
=30,322,142 P
=378,523 P
=155,939 P
=2,359,108 P
=33,215,712
December 31, 2010
Past due or
Neither past due nor impaired individually
Cash on hand and in banks P3,055,662
= P–
= P–
= P–
= P3,055,662
=
Short-term investments 15,246,183 – – – 15,246,183
18,301,845 – – – 18,301,845
Trade receivables:
Residential 33,379 41,169 131,839 102,500 308,887
Commercial 67,500 55,419 28,691 12,858 164,468
Industrial 277,993 12,072 34,467 95,622 420,154
City street lighting 1,208 3,699 3,025 687 8,619
Spot market 592,030 266,795 – 843,965 1,702,790
Power supply contracts 2,379,450 451,867 – 837,969 3,669,286
3,351,560 831,021 198,022 1,893,601 6,274,204
Other receivables 699,012 42,584 3,944 51,270 796,810
AFS investments 3,744 – – – 3,744
Derivative assets 7,670 – – – 7,670
Total =22,363,831
P =873,605
P =201,966
P =1,944,871
P =25,384,273
P
High grade - pertain to receivables from customers with good favorable credit standing and have
no history of default.
Standard grade - pertain to those customers with history of sliding beyond the credit terms but pay
a week after being past due.
Sub-standard grade - pertain to those customers with payment habits that normally extend beyond
the approved credit terms, and has high probability of being impaired.
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Trade and other receivables that are individually determined to be impaired at the balance sheet
date relate to debtors that are in significant financial difficulties and have defaulted on payments
and accounts under dispute and legal proceedings.
The Group evaluated its cash and cash equivalents and restricted cash as high quality financial
assets since these are placed in financial institutions of high credit standing.
With respect to other receivables, AFS investment and derivative assets, the Group evaluates the
counterparty’s external credit rating in establishing credit quality.
The tables below show the Group’s aging analysis of financial assets:
December 31, 2011

Neither past Past due but not impaired
due nor Less than 31 days to Over Individually
Total impaired 30 days 60 days 60 days impaired
=3,406,187 P3,406,187
= P–
= P–
= P–
= P–
=
Short-term investments 19,985,374 19,985,374 – – – –
23,391,561 23,391,561 – – – –
Trade receivables:
Residential 312,099 218,204 47,920 10,274 20,395 15,306
Commercial 126,467 97,011 17,742 3,563 4,260 3,891
Industrial 448,805 430,634 11,026 2,916 3,321 908
City street lighting 6,617 5,406 1,065 122 21 3
Spot market 741,102 171,016 7,087 25,155 376,394 161,450
Power supply contracts 4,945,887 3,432,811 82,538 138,495 1,158,972 133,071
6,580,977 4,355,082 167,378 180,525 1,563,363 314,629
Other receivables 3,239,430 3,106,217 1,127 6,848 125,238 –
AFS investments 3,744 3,744 – – – –
Total =33,215,712 P
P =30,856,604 =168,505
P =187,373
P =1,688,601
P =314,629
P
December 31, 2010

Neither past Past due but not impaired
due nor Less than 31 days to Over Individually
Total impaired 30 days 60 days 60 days impaired
= P3,055,662
= P–
= P–
= P–
= P–
=
Short-term investments 15,246,183 15,246,183 – – – –
18,301,845 18,301,845 – – – –
Trade receivables:
Residential 308,887 206,387 62,558 10,735 14,974 14,233
Commercial 164,468 151,610 7,770 1,436 1,972 1,680
Industrial 420,154 324,532 16,127 13,891 58,453 7,151
City street lighting 8,619 7,932 483 3 5 196
Spot market 1,702,790 858,825 89,468 102,215 348,801 303,481
Power supply contracts 3,669,286 2,831,317 279,155 212,663 296,676 49,475
6,274,204 4,380,603 455,561 340,943 720,881 376,216
Other receivables 796,810 745,540 9,452 4,530 36,592 696
AFS investments 3,744 3,744 – – – –
Derivative assets 7,670 7,670 – – – –
Total =25,384,273 P
P =23,439,402 =465,013
P =345,473
P =757,473
P =376,912
P
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Capital management
Capital includes equity attributable to the equity holders of the parent. The primary objective of
the Group’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximize shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares.
The Group monitors capital using a gearing ratio, which is net debt divided by equity plus net
debt. The Group’s policy is to keep the gearing ratio at 70% or below. The Group determines net
debt as the sum of interest-bearing short-term and long-term loans (comprising long-term debt,
finance lease obligation and payable to a preferred shareholder of a subsidiary) less cash and
short-term deposits and temporary interest bearing advances to related parties.
Gearing ratios of the Group as of December 31, 2011 and 2010 are as follows:
2011 2010
Bank loans P
=1,614,600 P1,979,800
=
Long-term debt 71,582,911 65,084,996
Cash and cash equivalents (23,391,561) (18,301,845)
Net debt (a) 49,805,950 48,762,951
Equity 70,192,217 57,734,210
Equity and net debt (b) P
=119,998,167 =106,497,161
P
Gearing ratio (a/b) 41.51% 45.79%
Certain entities within the Group that are registered with the BOI are required to raise a minimum
amount of capital in order to avail of their registration incentives. As of December 31, 2011 and
2010, these entities have complied with the requirement as applicable (see Note 37).
No changes were made in the objectives, policies or processes during the years ended
33. Financial Instruments
Set out below is a comparison by category of the carrying amounts and fair values of all of the
Group’s financial instruments.
2011 2010
Amounts Values Amounts Values
FINANCIAL ASSETS
Loans and Receivables
= P3,406,187
= P3,055,662
= P3,055,662
=
Short-term investments 19,985,374 19,985,374 15,246,183 15,246,183
23,391,561 23,391,561 18,301,845 18,301,845
(Forward)
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2011 2010
Amounts Values Amounts Values
Trade and other receivables:
Trade P6,266,348
= P6,266,348
= =5,897,988
P =5,897,988
P
Others 3,239,430 3,239,430 796,810 796,810
9,505,778 9,505,778 6,694,798 6,694,798
32,897,339 32,897,339 24,996,643 24,996,643
Financial Assets at FVPL
Derivative assets – – 7,670 7,670
AFS Financial Assets 3,744 3,744 3,744 3,744
=32,901,083
P =32,901,083
P =25,008,057
P =25,008,057
P
FINANCIAL LIABILITIES
Other Financial Liabilities
Bank loans =1,614,600
P =1,614,600
P =1,979,800
P =1,979,800
P
Long-term debt:
Floating - long-term debt 942,582 942,582 636,433 636,433
Fixed rate - long-term debt 17,862,400 19,467,789 16,066,680 17,953,303
of a subsidiary 62,970 62,970 76,767 76,767
Finance lease obligation 52,714,959 67,291,284 48,305,116 58,268,048
73,197,511 89,379,225 67,064,796 78,914,351
Customers’ deposits:
Bill deposits 400,508 400,508 382,977 382,977
Transformers, lines and poles 1,763,687 1,763,687 1,621,407 1,621,407
2,164,195 2,164,195 2,004,384 2,004,384
distribution system 277,046 419,789 282,559 413,057
Trade and other payables:
Trade payables 2,950,149 2,950,149 2,063,082 2,063,082
Accrued expenses 1,354,181 1,354,181 706,692 706,692
Related parties 18,415 18,415 129,999 129,999
Other liabilities 466,397 466,397 1,978,260 1,978,260
4,789,142 4,789,142 4,878,033 4,878,033
80,427,894 96,752,351 74,229,772 86,209,825
Financial Liability at FVPL
Derivative liabilities 7,580 7,580 323 323
=80,435,474
P =96,759,931
P =74,230,095
P =86,210,148
P
As of December 31, 2011 and December 31, 2010, the Group does not have any investment in
foreign securities. The Group has registered and issued =
P3.00 billion worth of peso denominated
fixed rate retail bonds on April 30, 2009.
Fair Value of Financial Instruments

Fair value is defined as the amount for which an asset could be exchanged or a liability settled
between knowledgeable willing parties in an arm’s-length transaction, other than in a forced
liquidation or sale. Fair values are obtained from quoted market prices, discounted cash flow
models and option pricing models, as appropriate.
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A financial instrument is regarded as quoted in an active market if quoted prices are readily
available from an exchange, dealer, broker, pricing services or regulatory agency and those prices
represent actual and regularly occurring market transactions on an arm’s length basis. For a
financial instrument with an active market, the quoted market price is used as its fair value. On
the other hand, if transactions are no longer regularly occurring even if prices might be available
and the only observed transactions are forced transactions or distressed sales, then the market is
considered inactive. For a financial instrument with no active market, its fair value is determined
using a valuation technique (e.g. discounted cash flow approach) that incorporates all factors that
market participants would consider in setting a price.
The following methods and assumptions are used to estimate the fair value of each class of
financial instruments:
Cash and cash equivalents, trade and other receivables, bank loans and trade and other payables.
The carrying amounts of cash and cash equivalents, trade and other receivables and trade and other
payables approximate fair value due to the relatively short-term maturity of these financial
instruments.
Restricted cash. The carrying value of the restricted cash approximates their fair value as they
earn interest based on prevailing bank deposit rates.
Fixed-rate borrowings. The fair value of fixed rate interest-bearing loans is based on the
discounted value of future cash flows using the applicable rates for similar types of loans. Interest-
bearing loans were discounted using credit-adjusted interest rates ranging from 2.06% to 9.33% in
2011 and 6.81% to 9.33% in 2010.
Floating-rate borrowings. Since repricing of the variable-rate interest bearing loan is done on a
quarterly basis, the carrying value approximates the fair value.
Finance lease obligation. The fair value of the finance lease obligation was calculated by
discounting future cash flows using interest rates of 5.83% to 8.37% in 2011 and 5.96% to 9.88%
in 2010 for dollar payments and 3.13% to 7.72% in 2011 and 2.95% to 10.33% in 2010 for peso
payments.
Long-term obligation on PDS. The fair value of the long-term obligations on power distribution
system is calculated by discounting expected future cash flows at prevailing market rates.
Discount rates used in discounting the obligation ranges from 1.98% to 6.14% in 2011 and 2.53%
to 7.60% in 2010.
Customers’ deposits. The fair value of bill deposits approximates the carrying values as these
deposits earn interest at the prevailing market interest rate in accordance with regulatory
guidelines. The timing and related amounts of future cash flows relating to transformer and lines
and poles deposits cannot be reasonably and reliably estimated for purposes of establishing their
fair values using an alternative valuation technique.
AFS investments. These are carried at cost less impairment because fair value cannot be
determined reliably due to the unpredictable nature of cash flows and lack of suitable methods of
arriving at reliable fair value.
*SGVMC410781*
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The fair value is calculated by reference to prevailing interest rate differential and spot exchange
rate as of valuation date, taking into account its remaining term to maturity. The Group enters into
non-deliverable short-term forward contracts with counterparty banks to manage its foreign
currency risks associated with foreign currency-denominated liabilities and purchases.
As of December 31, 2011 and 2010, the Group has outstanding non-deliverable buy Dollar and
sell Peso forward exchange contracts with counterparty banks with an aggregate notional amount
of $0.3 million and $56.4 million, respectively and remaining maturities of less than1 month to
8 months and 1 month to 10 months, respectively. The forward rates related to the forward
contracts ranged from P
=43.84 to =P44.81 per US$ and = P43.84 to P
=44.13 per US$1 as at
December 31, 2011 and 2010, respectively. The Group recognized derivative asset relating to
these contracts amounting to =
P0.2 million and 5.4 million as of December 31, 2011 and 2010,
respectively.
As of December 31, 2011 and 2010, the Group also has outstanding non-deliverable sell US
Dollar buy EURO short-term forward exchange contracts with a counterparty bank with an
aggregate notional amount of €4.7 million and €2.24 million, respectively and remaining
maturities of less than 1 month to 2 months and less than 1 month to 8 months, respectively. As at
December 31, 2011 and 2010, the forward rates related to the forward contracts ranges from
€1.2950 to €1.3385 per US$1 €1.3291 to €1.3421 per US$1, respectively. As of December 31,
2011, the Group recognized derivative liability relating to these contracts amounting to
=7.7 million. As of December 31, 2010, the Group recognized derivative asset and liability
P
related to these contracts amounting to =
P2.3 million and =P0.3 million, respectively.
In 2011 and 2010, the Group did not apply hedge accounting treatment on its derivative
transactions. The Group has not bifurcated any embedded derivatives as of December 31, 2011
and 2010.
The movements in fair value changes of all derivative instruments for the year ended
2011 2010
At beginning of year P
=7,347 (P
=15,630)
Net changes in fair value of derivatives not
designated as accounting hedges (19,797) (39,969)
Fair value of settled instruments 4,870 62,946
At end of year (P
=7,580) =7,347
P
The loss from the net fair value changes relating to the forward contracts amounting to
P P40.0 million in 2010 are included under “Net foreign exchange gains
(losses)” in Note 27.
Fair Value Hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly
*SGVMC410781*
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Level 3: techniques which use inputs which have a significant effect on the recorded fair value that
are not based on observable market data.
Only the Group’s quoted AFS investments and derivative instruments, which are classified under
Level 1 and Level 2, respectively, are measured and carried at fair value. During the reporting
periods ending December 31, 2011 and 2010, there were no transfers between Level 1 and Level 2
fair value measurements, and no transfers into and out of Level 3 fair value measurements were
made.
34. Registration with DOE
In accordance with its registration with the DOE under R.A. 7156 known as "Mini Hydro Electric
Power Incentives Act" as mini hydro electric power developer HI is entitled to certain incentives
among which are the special privilege tax at the rate of 2% on power sales, tax and duty free
importation of machinery, equipment and materials, tax credit on domestic capital equipment and
ITH. ITH, tax and duty free importation and tax credit on domestic capital equipment on all mini-
hydroelectric power plants expired in 2000, except for the four (4) power plants located in Mintal,
Tugbok, Davao City, acquired from PSALM, which were transferred on January 18, 2005 and
started commercial operations on January 19, 2005. ITH on the four (4) plants started on
September 28, 2005.
With the effectivity of R.A. 9136 known as “Electric Power Industry Reforms Act (EPIRA) of
2001”, sales of generated power by HI shall be subject to zero-rated VAT.
35. Lease Agreements
TLI
TLI was appointed by PSALM as Administrator under the IPP Administration Agreement, giving
TLI the right to receive, manage and control the capacity of the power plant for its own account
and at its own cost and risk; and the right to receive the transfer of the power plant at the end of
the IPP Administration Agreement for no consideration.
In view of the nature of the IPP Administration Agreement, the arrangement has been considered
as a finance lease. Accordingly, TLI recognized the capitalized asset and related liability of
=44.79 billion (equivalent to the present value of the minimum lease payments using TLI’s
P
incremental borrowing rates of 10% and 12% for dollar and peso payments, respectively) in the
financial statements as “Power plant” and “Finance lease obligation” accounts, respectively. This
is a non-cash acquisition of property, plant and equipment of the Group. The discount determined
at inception of the IPP Administration Agreement is amortized over the period of the IPP
Administration Agreement and is recognized as interest expense in the consolidated statements of
income. Interest expense in 2011, 2010 and 2009 amounted to P =5.48 billion P
=5.12 billion and
=1.23 billion, respectively (see Note 32).
P
*SGVMC410781*
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Future minimum monthly dollar and peso payments under the IPP Administration Agreement and
their present values as of December 31, 2011 and 2010 are as follows:
Peso equivalent
Dollar of dollar Peso 2011
payments payments1 payments Total
Within one year $27,600 =1,209,984
P =1,324,800
P =2,534,784
P
After one year but not
more than five years 415,320 18,207,629 19,935,360 38,142,989
More than five years 758,000 33,230,720 36,384,000 69,614,720
Total contractual payments 1,200,920 52,648,333 57,644,160 110,292,493
Unamortized discount 591,208 25,918,569 31,658,965 57,577,534
Present value $609,712 =26,729,764
P =25,985,195
P =52,714,959
P
Peso equivalent
Dollar of dollar Peso 2010
payments payments2 payments Total
Within one year $12,000 =526,080
P =576,000
P =1,102,080
P
After one year but not
more than five years 262,920 11,526,413 12,620,160 24,146,573
More than five years 938,000 41,121,920 45,024,000 86,145,920
Total contractual payments 1,212,920 53,174,413 58,220,160 111,394,573
Less unamortized discount 649,532 28,475,484 34,613,973 63,089,457
Present value $563,388 =24,698,929
P =23,606,187
P =48,305,116
P
1
$1 = =
P43.840
2
$1 = =
P43.840
APRI
On May 25, 2009, APRI entered into a lease agreement with PSALM for a parcel of land owned
by the latter on which a portion of the assets purchased under the APA is situated. The lease term
is for a period of twenty-five (25) years commencing from the Closing Date as defined in the APA
which falls on May 25, 2009. The rental fees for the whole term of 25 years amounting to
=492.0 million were paid in full after the receipt by APRI of the Certificate of Effectivity on the
P
lease (see Notes 7 and 13). Total lease charged to operations amounted to P =19.7 million in 2011
and 2010 and = P11.5 million in 2009 (see Note 24).
HI and HSI
HI and HSI entered into contracts with various lot owners for lease of land where their power
plants are located. Terms of contract are for a period of 1 to 25 years renewable upon mutual
agreement by the parties. Future minimum rental contract provisions are as follows
(amounts in millions):
2011 2010
Not later than one year P
=9.4 =9.0
P
Later than 1 year but not later than 5 years 45.7 40.0
Later than 5 years 142.7 119.2
Total lease charged to operations related to these contracts amounted to =

P P2.5 million in 2009, respectively (see Note 24).
*SGVMC410781*
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36. Agreements
Pagbilao IPP Administration Agreement
TLI and PSALM executed the IPP Administration Agreement wherein PSALM appointed TLI to
manage the 700MW contracted capacity (the “Capacity”) of NPC in the coal-fired power plant in
Pagbilao, Quezon.
The IPP Administration Agreement includes the following obligations TLI would have to perform
until the transfer date of the power plant (or the earlier termination of the IPP Administration
Agreement):
a. Supply and deliver all fuel for the power plant in accordance with the specifications of the
original Energy Conservation Agreement (ECA); and
b. Pay to PSALM the monthly payments (based on the bid) and energy fees (equivalent to the
amount paid by NPC to the IPP).
TLI has the following rights, among others, under the IPP Administration Agreement:
a. The right to receive, manage and control the Capacity of the power plant for its own account
and at its own cost and risk;
b. The right to trade, sell or otherwise deal with the Capacity (whether pursuant to the spot
market, bilateral contracts with third parties or otherwise) and contract for or offer related
ancillary services, in all cases for its own account and its own risk and cost. Such rights shall
carry the rights to receive revenues arising from such activities without obligation to account
therefore to PSALM or any third party;
c. The right to receive the transfer of the power plant at the end of the IPP Administration
Agreement (which is technically the end of the ECA) for no consideration; and
d. The right to receive an assignment of NPC’s interest to existing short-term bilateral Power
Supply Contract from the effective date of the IPP Administration Agreement to November
2011 only (see Note 20).
In view of the nature of the IPP Administration Agreement, the arrangement has been accounted
for as a finance lease (see Note 35).
Agreements with Contractors and Suppliers
a. Among the assumed contracts that APRI received from the APA is the Service Contract with
Chevron Geothermal Philippines Holdings, Inc. (CGPHI) which provides for the following:
i. Exploration and exploitation for APRI on the Geothermal Resources in the Area of
Interest described in the Service Contract.
ii. CGPHI shall be the sole contractor responsible to APRI for the execution of services for
the exploration and exploitation operations in accordance with the provisions of the
Service Contract and, in accordance with the terms hereof, is hereby appointed as the sole
contractor of NPC for such purposes in connection with the Area of Interest.
iii. CGPHI shall furnish technical assistance required for the exploration for and exploitation
of Geothermal Resources in order to make geothermal steam available for utilization into
electric power, and shall recover its operating costs and realize its return solely from the
sale of power produced from the Geothermal Energy.
*SGVMC410781*
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iv. APRI shall provide and defray Philippine currency expenses to the extent hereinafter set
forth necessary in the exploration for and exploitation of Geothermal Resources and
Utilization of geothermal steam for electric power.
v. APRI shall provide and install at its own expense and with the technological assistance of
CGPHI as hereinafter provided, such plants, machineries and auxiliary works as may be
necessary for the conversion of geothermal steam into electric power and distribution of
such power.
Total steam supply cost incurred by APRI, reported as part of “Cost of generated power”
amounted to =P3.72 billion in 2011, P
P2.21 billion in 2009
(see Note 22).
b. TLI enters into short-term coal supply agreements. As of December 31, 2011, outstanding
coal supply agreements have aggregate supply amounts of 410,000 MT (equivalent dollar
value is $29 million) which were due for delivery from January 2012 to March 2012 . The
coal supply agreements for the past three years had terms of payment by letter of credit where
payment is due at sight against presentation of documents, and by telegraphic transfer where
payment is due within 7 days from receipt of original invoice.
Agreements with the Government
On October 29, 2007, HTI, a subsidiary, entered into agreements with various barangays in Davao
City wherein each barangay gives its consent to HTI to manage, administer, regulate and
undertake the construction of HTI’s hydroelectric power plants and other related activities in their
respective areas. In consideration thereof, HTI shall pay each of the barangay an annual royalty
fee in an amount equivalent to P =0.01 per kWh of electricity sales of the power plant located within
their area to be paid annually beginning the first anniversary date of the commencement of HTI’s
commercial operations and on every anniversary date thereafter to be increased by P =0.001 every
5 years. In addition to the royalty fee, HTI shall make donations for the undertaking of certain
infrastructure projects and provide financial assistance for the various needs of the community.
The agreement likewise provides that HTI shall comply with Sec. 5(i) of R.A. No. 7638 as
implemented by ER No. 1-94 as amended, prescribing the following annual benefits during the
operation of the power stations: a) electrification fund to be distributed to the relevant host LGU
equivalent to =P0.0075 per kWh of the total electricity sales; b) development and livelihood fund to
be shared by the province, municipality, barangay and region equivalent to P0.00125 per kWh of
the total electricity sales; and c) reforestation, watershed management, health and/or
environmental enhancement fund to be shared by the resettlement area, barangay, municipality,
province and region equivalent to = P1.00125 per kWh of the total electricity sales.
The duration of the agreements is for a period of 25 years and renewable for another 25 years as
agreed by the Barangay Council of Wines and HTI.
*SGVMC410781*
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37. Registration with the Board of Investments (BOI)
APRI
On June 19, 2009, the BOI approved APRI’s application as a new operator of the Tiwi-MakBan
Power Plant and granted APRI a pioneer status under the Omnibus Investments Code of 1987.
The following are the incentives granted by BOI to APRI:
a. ITH for six (6) years from June 2009 or actual start of commercial operations/selling,
whichever is earlier but in no case earlier than the date of registration. The ITH shall be
limited only to sales/revenue generated from the sales of electricity of the Tiwi-MakBan
Power Plant. Revenues generated from the sales of carbon emission reduction credits are also
entitled to ITH.
b. For the first five (5) years from date of registration, APRI shall be allowed an additional
deduction from taxable income of fifty percent (50) of the wages corresponding to the
increment in the number of direct labor for skilled and unskilled workers in the year of
availment as against the previous year if the project meets the prescribed ratio of capital
equipment to the number of workers set by BOI of $10 to one worker and provided that this
incentive shall not be availed of simultaneously with the ITH.
c. Employment of foreign nationals may be allowed in supervisory, technical or advisory

positions for five (5) years from date of registration.
d. Importation of consigned equipment for a period of ten (10) years from the date of
registration, subject to the posting of re-export bond.
e. APRI may qualify to import capital requirement, spare parts and accessories at zero (0%) duty
rate from the date of registration to June 16, 2011 pursuant to Executive Order No. 528 and its
Implementing Rules and Regulations.
The following are the significant specific terms and conditions for the availment of the ITH:
a. APRI shall start commercial operations in June 2009.
b. APRI shall increase its authorized, subscribed and paid-up capital stock to at least
=5.70 billion and shall submit proof of compliance prior to availment of ITH. This condition
P
was superseded by a BOI letter dated September 18, 2009 clarifying that for the purposes of
BOI registration, the BOI has redefined the term equity such that, it shall now cover not only
the paid-up capital stock but also other items in the Balance Sheet of the Audited Financial
Statements, i.e., additional paid in capital stock and retained earnings. Hence, if APRI has at
least 25%of stockholders equity as shown in the Audited Financial Statements, it is deemed
complied with the 25% equity requirement and is no longer required to increase its capital
stock.
c. APRI shall secure a Certificate of Compliance from ERC prior to start of commercial
operations.
d. APRI is enjoined to undertake Corporate Social Responsibility Projects/Activities.
*SGVMC410781*
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TLI
On December 23, 2009, the BOI pre-approved TLI’s application for registration as a
new operator of the power plant on a non-pioneer status. Once approved, TLI will be entitled with
the following incentives:
a. ITH for a period of four (4) years without extension from January 1, 2010 or actual start of
operation, whichever is earlier but in no case earlier than the date of registration. The ITH
incentives shall be limited only to the sales/revenue generated from the sale of electricity of
the power plant.
b. For the first five (5) years from date of registration, TLI shall be allowed an additional
deduction from taxable income of 50% of the wages corresponding to the increment in
number of direct labor for skilled and unskilled workers in the year of availment as against the
previous year if the project meets the prescribed ratio of capital equipment to the number of
workers set by the Board of US$10 to one (1) worker and provided that this incentive shall not
be availed of simultaneously with the ITH.

positions for five (5) years from date of registration. The president, general manager and
treasurer of foreign-owned registered firms or their equivalent shall not be subject to the
foregoing limitations.
d. Importation of consigned equipment for a period of ten (10) years from date of registration,
subject to the posting of re-export bond.
On February 26, 2010, TLI submitted to BOI all its requirements with a commitment to comply
with the 25% minimum equity requirement of =P490.0 million prior to the availment of ITH
incentives. As of December 31, 2011 and 2010, TLI has complied with the minimum equity
required.
Therma Marine, Inc.

On May 28, 2010, the BOI pre-approved Therma Marine’s application for registration as a
new operator of PB118 and PB117. Once approved, Therma Marine will be entitled to the
following incentives:
a. ITH for a period of four (4) years without extension from May 1, 2010 or actual start of
operation, whichever is earlier but in no case earlier than the date of registration. The ITH
incentives shall be limited only to the sales/revenue generated from the sale of electricity of
the power plant.
b. For the first five (5) years from date of registration, Therma Marine shall be allowed an
additional deduction from taxable income of 50% of the wages corresponding to the increment
in number of direct labor for skilled and unskilled workers in the year of availment as against
the previous year if the project meets the prescribed ratio of capital equipment to the number
of workers set by the Board of US$10,000 to one (1) worker and provided that this incentive
shall not be availed of simultaneously with the ITH.

*SGVMC410781*
- 84 -
In February 2011, Therma Marine submitted to BOI all its requirements with a commitment to
comply with all the requirements prior to the availment of ITH incentives.
HSI
On December 27, 2005, the BOI approved HSI’s application as new operator of the 42 MW
Hydroelectric Power Plants and granted HSI a pioneer status under the Omnibus Investments
Code of 1987. The BOI issued the Certificate of Registration on the same date which entitled HSI
with the following incentives:
a. ITH for a period of six years from January 2009 or actual start of commercial operations,
whichever is earlier, but in no case earlier than the date of registration. The ITH incentives
shall be limited only to the sales/revenue generated from the sales of electricity. HSI can avail
of bonus year in each of the following cases but the aggregate ITH availment (basic and bonus
years) shall not exceed 8 years;
· The ratio of the total imported and domestic capital equipment to the number of workers
for the project does not exceed US$10,000 to one (1); or
· The net foreign exchange savings or earnings amount to at least US$500,000 annually
during the first three (3) years of operation; and
· The indigenous raw materials used in the manufacture of the registered product must at
least be fifty percent (50%) of the total cost of raw materials for the preceding years prior
to the extension unless the BOD prescribes a higher percentage.
b. For the first five (5) years from December 27, 2005, HSI shall be allowed an additional
deduction from taxable income of 50% of the wages corresponding to the increment in number
of direct labor for skilled and unskilled workers in the year of availment as against the
previous year if the project meets the prescribed ratio of capital equipment to the number of
workers set by the BOD of US$10,000 to one (1) worker and provided that this incentive shall
not be availed of simultaneously with the income tax holiday.

On May 4, 2009, the BOI granted HSI’s request for the movement of start of commercial
operation, as well as the movement of the ITH incentive reckoning date from January 2009 to
March 2010. Furthermore, the project’s registered capacity was also amended from 42 MW to
42.5 MW.
*SGVMC410781*
- 85 -
38. Other Matters
a. Therma Marine Case
As of December 31, 2010, Therma Marine has outstanding cases with the ERC regarding the
approved ancillary service and procurement rates under the ASPAs approved on October 4,
2010. The rates approved by ERC are lower than the rates approved under the provisional
authority it granted in March 2010.
Consequently, in November 2010, Therma Marine filed a motion for reconsideration with
ERC negotiating the increase in rates. While waiting for the ERC decision on the motion for
reconsideration, Therma Marine started to recognize revenues using the approved rates by
ERC.
On January 24, 2011, ERC issued an order granting Therma Marine’s motion for
reconsideration to allow an increase in rates higher than what was granted in October 4, 2010.
b. DLP Case
On December 7, 1990, certain customers of DLP filed before the then Energy Regulatory
Board (ERB) a letter-petition for recovery claiming that with the SC’s decision reducing the
sound appraisal value of DLP’s properties, DLP exceeded the 12% Return on Rate Base
(RORB). The ERB’s order dated June 4, 1998, limited the computation coverage of the
refund from January 19, 1984 to December 14, 1984. No amount was indicated in the ERB
order as this has yet to be recomputed.
The CA, in Court of Appeals General Register Special Proceeding (CA-GR SP) No. 50771,
promulgated a decision dated February 23, 2001 which reversed the order of the then ERB,
and expanded the computation coverage period from January 19, 1984 to September 18, 1989.
The SC in its decision dated November 30, 2006 per GR150253 reversed the CA’s decision
CA-GR SP No. 50771 by limiting the period covered for the refund from January 19, 1984 to
December 14, 1984, approximately 11 months. The respondent/customers filed a Motion for
Reconsideration with the SC, which was denied with finality by the SC in its Order dated
July 4, 2007.
The SC, following its decision dated November 30, 2006, ordered the ERC to proceed with the
refund proceedings instituted by the respondents with reasonable dispatch.
On March 17, 2010, the ERC directed DLP to submit its proposed scheme in implementing
the refund to its customers. In compliance with the order, the DLP filed its compliance stating
that DLP cannot propose a scheme for implementing a refund as its computation resulted to no
refund.
A clarificatory meeting was held where DLP was ordered to submit its memoranda.
On October 4, 2010, in compliance with the ERC directive, DLP submitted its memoranda
reiterating that no refund can be made.
*SGVMC410781*
- 86 -
c. EPIRA of 2001
R.A. No. 9136 was signed into law on June 8, 2001 and took effect on June 26, 2001. The law
provides for the privatization of NPC and the restructuring of the electric power industry. The
IRR were approved by the Joint Congressional Power Commission on February 27, 2002.
R.A. No. 9136 and the IRR impact the industry as a whole. The law also empowers the ERC
to enforce rules to encourage competition and penalize anti-competitive behavior.
R.A. Act No. 9136, the EPIRA, and the covering IRR provides for significant changes in the
power sector, which include among others:
i. The unbundling of the generation, transmission, distribution and supply and other
disposable assets of a company, including its contracts with IPPs and electricity rates;
ii. Creation of a WESM; and
iii. Open and non-discriminatory access to transmission and distribution systems.
The law also requires public listing of not less than 15% of common shares of generation and
distribution companies within 5 years from the effectivity date of the EPIRA. It provides
cross ownership restrictions between transmission and generation companies and a cap of 50%
of its demand that a distribution utility is allowed to source from an associated company
engaged in generation except for contracts entered into prior to the effectivity of the EPIRA.
There are also certain sections of the EPIRA, specifically relating to generation companies,
which provide for a cap on the concentration of ownership to only 30% of the installed
capacity of the grid and/or 25% of the national installed generating capacity.
d. Renewable Energy Act of 2008
On January 30, 2009, R.A. No. 9513, An Act Promoting the Development, Utilization and
Commercialization of Renewable Energy Resources and for Other Purposes, which shall be
known as the “Renewable Energy Act of 2008” (the Act), became effective. The Act aims to
(a) accelerate the exploration and development of renewable energy resources such as, but not
limited to, biomass, solar, wind, hydro, geothermal and ocean energy sources, including
hybrid systems, to achieve energy self-reliance, through the adoption of sustainable energy
development strategies to reduce the country’s dependence on fossil fuels and thereby
minimize the country’s exposure to price fluctuations in the international markets, the effects
of which spiral down to almost all sectors of the economy; (b) increase the utilization of
renewable energy by institutionalizing the development of national and local capabilities in the
use of renewable energy systems, and promoting its efficient and cost-effective commercial
application by providing fiscal and non-fiscal incentives; (c) encourage the development and
utilization of renewable energy resources as tools to effectively prevent or reduce harmful
emissions and thereby balance the goals of economic growth and development with the
protection of health and environment; and (d) establish the necessary infrastructure and
mechanism to carry out mandates specified in the Act and other laws.
*SGVMC410781*
- 87 -
As provided for in the Act, renewable energy (RE) developers of RE facilities, including
hybrid systems, in proportion to and to the extent of the RE component, for both power and
non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be
entitled to incentives, such as, income tax holiday, duty-free importation of RE machinery,
equipment and materials, zero percent VAT rate on sale of power from RE sources, and tax
exemption of carbon credits, among others.
The Group expects that the Act may have significant effects on the operating results of some
of its subsidiaries and associates that are RE developers. Impact on the operating results is
expected to arise from the effective reduction in taxes.
e. CSR Projects
The Group has several CSR projects in 2011, 2010 and 2009 which are presented as part of
“General and administrative expenses” (see Note 23).
*SGVMC410781*
SEC FORM 20 - IS (INFORMATION STATEMENT)
SyCip Gorres Velayo & Co.

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

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

SEC Accreditation No. 0012-FR-2
INDEPENDENT AUDITORS’ REPORT

ON SUPPLEMENTARY SCHEDULES
The Stockholders and the Board of Directors

Aboitiz Power Corporation and Subsidiaries
Aboitiz Corporate Center
Gov. Manuel A. Cuenco Avenue
Kasambagan, Cebu City
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements of Aboitiz
Power Corporation and its Subsidiaries as at December 31, 2011 and 2010 and for each of the three years in the period
ended December 31, 2011 included in this Form 17-A and have issued our report thereon dated March 1, 2012. Our audits
were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed
in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company’s management.
These schedules are presented for purposes of complying with the Securities Regulation Code Rule 68, as amended (2011)
and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements, and, in our opinion, fairly state in all material respects the financial
data required to be set forth therein in relation to the basic financial statements taken as a whole.
SYCIP GORRES VELAYO & CO.
Ladislao Z. Avila, Jr.

Partner
CPA Certificate No. 69099
SEC Accreditation No. 0111-AR-2 (Group A),
February 4, 2010, valid until February 3, 2013
Tax Identification No. 109-247-891
BIR Accreditation No. 08-001998-43-2009,
June 1, 2009, valid until May 31, 2012
PTR No. 3174866, January 2, 2012, Makati City
March 1, 2012
128 Aboitiz Power

SCHEDULE C - AMOUNTS RECEIVABLE FROM RELATED PARTIES

WHICH ARE ELIMINATED DURING THE CONSOLIDATION OF FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2011

Balance at Deductions
Beginning Amounts Amounts Ending
Name and Designation of Debtor of Period Additions Collected Written-Off Current Non-Current Balance
Davao Light & Power Co., Inc. P 15,786 P 258,171 P (254,582) P- P 19,375 P- P 19,375
Therma Power, Inc. and Subsidiaries 21,085 14,417,222 (14,121,219) - 317,088 - 317,088
Cotabato Light & Power Company 1,259 15,056 (14,898) - 1,417 - 1,417
Aboitiz Renewables, Inc. and Subsidiaries 20,604 21,073,775 (21,017,779) - 76,600 - 76,600
Subic Enerzone Corporation 20 120 (120) - 20 - 20
P 58,754 P 35,764,344 P (35,408,598) P- P 414,500 P- P 414,500
-2-
SCHEDULE D - INTANGIBLE ASSETS - OTHER ASSETS

(Amount in Thousands)
Beginning DEDUCTIONS Other Changes

Balance Additions Charged to Costs Charged to Additions Ending
Description At Cost and Expenses Other Accounts (Deductions) Balance
A. Intangibles
Goodwill P 996,005 P- P- P- P- P 996,005
Service Concession Rights 936,996 3,441,833 (305,478) - 89,417 4,162,768
Project Development Costs 41,394 86,599 (2,394) - - 125,599
Software and Licenses 22,400 5,423 (6,337) - (12,127) 9,359
Total P 1,996,795 P 3,533,855 P (314,209) P- P 77,290 P 5,293,731
B. Other Noncurrent Assets
Restricted cash P- P- P- P- P- P-
Prepaid rent 522,817 - - - (101,307) 421,510
Deferred input vat and tax credit
receivable 629,860 268,338 - - - 898,198
Advances to contractors - - - - 2,353,605 2,353,605
Others 9,012 - - - 135,162 144,174
Total P 1,161,689 P 268,338 P- P- P 2,387,460 P 3,817,487
Total P3,158,484 P3,802,193 (P314,209) P- P2,464,750 P9,111,218
-3-
SCHEDULE E - LONG-TERM DEBT

Amount Amount Amount

Name of Issuer and Authorized Shown as Shown as
Type of Obligation by Indentures Current Long-Term Remarks
Parent Company:
2008 7-year corporate note P 538,717 P 5,600 P 533,117
2009 5-year corporate note 4,970,098 - 4,970,098
3-year bonds 704,505 704,505 -
5-year bonds 2,279,617 - 2,279,617
2011 5-year corporate note 4,963,740 4,963,740
Subsidiaries:
Hedcor, Inc. 484,500 64,600 419,900
Hedcor Sibulan, Inc. 3,286,223 263,053 3,023,170
Subic Enerzone Corporation 565,000 56,500 508,500
Cebu Private Power Corporation 425,102 213,333 211,769
Balamban Enerzone Corporation 70,000 4,375 65,625
Luzon Hydro Corporation 517,480 192,834 324,646
Total P18,804,982 P1,504,800 P17,300,182
-4-
ABOITIZ POWER CORPORATION
SCHEDULE H - CAPITAL STOCK

Number of
Number of Shares Reserved Number of Shares Held By
Number of Shares Issued for Options, Warrants, Directors,
Title of Issue Shares and Conversions, and Affiliates Officers and Others
Authorized Outstanding Other Rights Employees
COMMON SHARES 16,000,000 7,358,604 - 5,781,157 85,318 1,492,129
PREFERRED SHARES 1,000,000 - - - - -
-5-
TRADE AND OTHER RECEIVABLES FROM RELATED PARTIES

WHICH ARE ELIMINATED DURING CONSOLIDATION OF FINANCIAL STATEMENTS

Balances Volume
Related Party Trade Non-trade Total Sales Rental Advances Terms
Davao Light & Power Co., Inc. P- P 19,375 P 19,375 P 214,393 P- P- 30 days
Therma Power, Inc. and Subsidiaries 295,285 21,803 317,088 414,710 - - 30 days
Cotabato Light & Power Company - 1,417 1,417 16,715 - - 30 days
Aboitiz Renewables, Inc. and Subsidiaries - 76,600 76,600 56,520 - - 30 days
Subic Enerzone Corporation - 20 20 120 - - 30 days
-6-
TRADE AND OTHER PAYABLES FROM RELATED PARTIES

WHICH ARE ELIMINATED DURING CONSOLIDATION OF FINANCIAL STATEMENTS

Balances Volume
Related Party Trade Non-trade Total Sales Rental Advances Terms
AP (Parent) P- P 119,215 P 119,215 P 327,547 P- P- 30 days
Aboitiz Renewables, Inc. and Subsidiaries 295,285 - 295,285 374,911 - - 30 days
-7-
Aboitiz Power Corporation
Aboitiz Corporate Center
Gov. Manuel A. Cuenco Avenue
Cebu City
Reconciliation of Retained Earnings Available for Dividend Declaration

(Amount in Philippine Currency)
Unappropriated Retained Earnings, as adjusted to available

for dividend distribution, beginning =
P4,112,547,156
Add: Net income actually earned/realized during the

period
Net income during the period closed to Retained Earnings =

P37,460,491,778
Less: Movement of deferred income tax assets (346)

Net income actually earned during the period 37,460,491,432
Less:
Dividend declaration during the period (9,713,357,685)
TOTAL RETAINED EARNINGS, END AVAILABLE
FOR DIVIDEND P
=31,859,680,903
-8-
CONGLOMERATE MAPPING
Legend:
Ultimate Parent Company
Parent Company
Reporting Company
Co-Subsidiary
Subsidiary
Associate
ABOITIZ & CO., INC.
ABOITIZ EQUITY VENTURES, INC. [49.54%]
ELECTRICITY BANKING FOOD MANUFACTURING & OTHERS

TRANSPORT
76.40% 59.32% 100.0% 50.75% [direct]

ABOITIZ POWER CITYSAVINGS PILMICO FOODS 88.38% [beneficial]
CORPORATION BANK CORPORATION AEV AVIATION
INC.
POWER DISTRIBUTION POWER GENERATION OTHERS 62.50%

ABOITIZ JEBSEN 100.0%
99.93% 100.0% 60.00% 100.0% COMPANY, INC. CEBU PRAEDIA
DAVAO LIGHT & ABOITIZ CEBU PRIVATE ABOITIZ ENERGY (formerly Aboitiz DEVELOPMENT
POWER CO., INC. RENEWABLES, INC. POWER CORPORATION SOLUTIONS, INC. Jebsen Bulk CORPORATION
Transport Corp)
43.46% [direct] 50.00% 100.0%
55.21% [beneficial] EAST ASIA UTILITIES ADVENTENERGY, INC. 100.0%
VISAYAN ELECTRIC 100.0% CORPORATION 62.50% ARCHIPELAGO
CO., INC. AP RENEWABLES, INC. 60.00% ABOITIZ JEBSEN INSURANCE
34.00% PRISM ENERGY, INC. MANPOWER PTE LTD.
99.94% 100.0% STEAG STATE SOLUTIONS INC.
COTABATO LIGHT AND CLEANERGY, INC. POWER, INC.
POWER COMPANY
99.97% 20.00% 62.50%
100.0% HYDRO ELECTRIC SOUTHERN JEBSEN
COTABATO DEVELOPMENT CORP. PHILIPPINES MARITIME, INC.
ICE PLANT, INC. POWER CORP.
40.0% [direct]
20.29% [direct] 100.0% [beneficial] 20.00%
43.78% [beneficial] CORDILLERA HYDRO WESTERN MINDANAO
SAN FERNANDO CORPORATION POWER CORP.
ELECTRIC LIGHT &
POWER CO., INC. 100.0% 100.0%
LUZON HYDRO THERMA
99.97% CORPORATION POWER, INC.
SUBIC ENERZONE
CORPORATION 100.0%
HEDCOR, INC.
100.0% 100.0%
MACTAN ENERZONE 100.0% THERMA LUZON, INC.
CORPORATION HEDCOR
BENGUET, INC. 100.0%
100.0% THERMA SOUTH, INC.
BALAMBAN ENERZONE 100.0%
CORPORATION HEDCOR 100.0%
SIBULAN, INC. THERMA MARINE, INC.
100.0% 100.0%
HEDCOR THERMA MOBILE, INC.
TAMUGAN, INC.
100.0%
100.0% THERMA SUBIC, INC.
HEDCOR
TUDAYA, INC. 100.0%
THERMA POWER
100.0% VISAYAS, INC.
HEDCOR
SABANGAN, INC. 100.0%
THERMA SOUTHERN
100.0% MINDANAO, INC.
HEDCOR
BUKIDNON, INC. 100.0%
THERMA CENTRAL
100.0% VISAYAS, INC.
HEDCOR
BOKOD, INC. 100.0%
VESPER INDUSTRIAL
83.33% DEVELOPMENT CORP.
MANILA OSLO
RENEWABLE 25.00%
ENTERPRISE, INC. REDONDO PENINSULA
ENERGY, INC.
60.00% 60.00%
SNAP MAGAT, INC. TERAQUA, INC.
60.00% 60.00%
SNAP BENGUET, INC. ABOVANT
HOLDINGS, INC.
60.00%
SNAP PANGASINAN, INC. 44.00%
CEBU ENERGY
DEVELOPMENT CORP.
*AP has a 49.25% direct ownership in AEV Aviation, Inc.
-9-
SCHEDULE OF RELEVANT FINANCIAL RATIOS
FORMULA DEC 2011 DEC 2010

LIQUIDITY RATIOS
Current assets
Current ratio Current liabilities 3.46 2.58
Cash + Marketable Securities +
Accounts Receivable+ Other Liquid
Assets
Acid test ratio Current liabilities 3.15 2.32
SOLVENCY RATIOS
Total liabilities
Debt to equity ratio Total equity 1.19 1.33
Total assets
Asset to equity ratio Total equity 2.19 2.33
Debt - cash & cash equivalents
Net debt to equity ratio Total equity 0.71 0.84
Debt - cash & cash equivalents
Total equity + (Debt - cash & cash
Gearing ratio equivalents) 41.51% 45.79%
EBIT
Interest coverage ratio Interest expense 4.55 5.03
PROFITABILITY RATIOS
Operating Profit
Operating Margin Total revenues 37.4% 44.0%
Net income after tax
Return on Equity Total equity 43.18% 76.30%
- 10 -
Schedule of Philippine Financial Reporting Standards
Effective as of December 31, 2011
Standards and Interpretations Remarks

Philippine Financial Reporting Standards (PFRS)
PFRS 1 First-time Adoption of Philippine Financial Reporting Standards Adopted
PFRS 2 Share-based Payment Not Applicable
PFRS 3 Business Combinations Adopted
PFRS 4 Insurance Contracts Not Applicable
PFRS 5 Non-current Assets Held for Sale and Discontinued Operations Adopted
PFRS 6 Exploration for and Evaluation of Mineral Resources Not Applicable
PFRS 7 Financial Instruments: Disclosures Adopted
PFRS 8 Operating Segments Adopted
Philippine Accounting Standards (PAS)

PAS 1 Presentation of Financial Statements Adopted
PAS 2 Inventories Adopted
PAS 7 Statement of Cash Flows Adopted
PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors Adopted
PAS 10 Events after the Reporting Period Adopted
PAS 11 Construction Contracts Not Applicable
PAS 12 Income Taxes Adopted
PAS 16 Property, Plant and Equipment Adopted
PAS 17 Leases Adopted
PAS 18 Revenue Adopted
PAS 19 Employee Benefits Adopted
Accounting for Government Grants and Disclosure of
PAS 20 Not Applicable
Government Assistance
PAS 21 The Effects of Changes in Foreign Exchange Rates Adopted
PAS 23 Borrowing Costs Adopted
PAS 24 Related Party Disclosures Adopted
PAS 26 Accounting and Reporting by Retirement Benefit Plans Adopted
PAS 27 Consolidated and Separate Financial Statements Adopted
PAS 28 Investments in Associates Adopted
- 11 -

PAS 29 Financial Reporting in Hyperinflationary Economies Not Applicable
PAS 31 Interests in Joint Ventures Not Applicable
PAS 32 Financial Instruments: Presentation Adopted
PAS 33 Earnings per Share Adopted
PAS 34 Interim Financial Reporting Adopted
PAS 36 Impairment of Assets Adopted
PAS 37 Provisions, Contingent Liabilities and Contingent Assets Adopted
PAS 38 Intangible Assets Adopted
PAS 39 Financial Instruments: Recognition and Measurement Adopted
PAS 40 Investment Property Adopted
PAS 41 Agriculture Not Applicable
Philippine Interpretations - International Financial Reporting Interpretations Committee (IFRIC)

Changes in Existing Decommissioning, Restoration and
IFRIC 1 Adopted
Similar Liabilities
IFRIC 2 Members' Share in Co-operative Entities and Similar Instruments Not Applicable
IFRIC 4 Determining Whether an Arrangement Contains a Lease Adopted
Rights to Interests Arising from Decommissioning, Restoration
IFRIC 5 Not Applicable
and Environmental Rehabilitation Funds
Liabilities Arising from Participating in a Specific Market - Waste
Electrical and Electronic Equipment
Applying the Restatement Approach under PAS 29, Financial
Reporting in Hyperinflationary Economies
IFRIC 9 Reassessment of Embedded Derivatives Adopted
IFRIC 10 Interim Financial Reporting and Impairment Adopted
IFRIC 12 Service Concession Arrangements Adopted
IFRIC 13 Customer Loyalty Programmes Not Applicable
PAS 19 - The Limit on a Defined Benefit Asset, Minimum
IFRIC 14 Adopted
Funding Requirements and their Interaction
IFRIC 16 Hedges of a Net Investment in a Foreign Operation Not Applicable
IFRIC 17 Distributions of Non-cash Assets to Owners Adopted
IFRIC 18 Transfers of Assets from Customers Adopted
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Adopted
Philippine Interpretations - Standing Interpretations Committee (SIC)

SIC 7 Introduction of the Euro Not Applicable
- 12 -

Government Assistance - No Specific Relation to Operating
SIC 10 Not Applicable
Activities
SIC 12 Consolidation - Special Purpose Entities Not Applicable
Jointly Controlled Entities - Non-Monetary Contributions
SIC 13 Not Applicable
by Venturers
SIC 15 Operating Leases - Incentives Adopted
SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets Not Applicable
Income Taxes - Changes in the Tax Status of an Entity or
SIC 25 Adopted
its Shareholders
Evaluating the Substance of Transactions Involving the Legal
SIC 27 Adopted
Form of a Lease
SIC 29 Service Concession Arrangements: Disclosures Adopted
SIC 31 Revenue - Barter Transactions Involving Advertising Services Not Applicable
SIC 32 Intangible Assets - Web Site Costs Adopted
Philippine Interpretations - Questions and Answers (Q&As)

PIC Q&A PAS 18, Appendix, paragraph 9 - Revenue recognition for sales of
Not Applicable
2006-01 property units under pre-completion contracts
PIC Q&A PAS 27.10(d) - Clarification of criteria for exemption from presenting
Adopted
2006-02 consolidated financial statements
PIC Q&A PAS 40.27 - Valuation of bank real and other properties acquired
Not Applicable
2007-03 (ROPA)
PIC Q&A
Not Applicable
2007-04 PAS 101.7 - Application of criteria for a qualifying NPAE
PIC Q&A PAS 20.43 - Accounting for government loans with low interest rates
Not Applicable
2008-02 under the amendments to PAS 20
PIC Q&A Framework, paragraph 23 and PAS 1.23 - Financial statements prepared
Adopted
2009-01 on a basis other than going concern
PIC Q&A PAS 39.AG71-72 – Rate used in determining the fair value of
Adopted
2010-01 government securities
PIC Q&A
Adopted
2010-02 PAS 1R.16 – Basis of preparation of financial statements
PIC Q&A
2008-01 PAS 19.78 – Rate used in discounting post-employment benefit Adopted
(Revised) obligations
PIC Q&A
Adopted
2011-0 PAS 1 – Requirements for a Third Statement of Financial Position
- 13 -

AP 17A Dec2011 (AR 2011)

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COVER SHEET

( Company's Full Name )

M. JASMINE S. OPORTO (032) 411-1801

Fiscal Year Annual Meeting

Secondary License Type, if Applicable

To be accomplished by SEC Personnel concerned

File Number LCU

Document I.D. Cashier

Remarks = pls. Use black ink for scanning purposes

SEC FORM 17‐A

ANNUAL REPORT PURSUANT TO SECTION 17

1. For the year ended 2011

2. SEC Identification Number C199800134 3. BIR TIN 200‐652‐460

4. Exact name of registrant as specified in its charter Aboitiz Power Corporation

5. Cebu City, Philippines 6.

7. Gov. Manuel A. Cuenco Ave., Kasambagan, Cebu City 6000

Title of Each Class Number of Shares of Common Stock

Common (as of December 31, 2011) 7,358,604,307

Total Debt (as of December 31, 2011) P73, 197,511, 000.00

11. Are any or all of the securities listed on a Stock Exchange?

Philippine Stock Exchange Common

12. Check whether the registrant:

1 • SEC FORM 17-A (ANNUAL REPORT)

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN

DOCUMENTS INCORPORATED BY REFERENCE

(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.

2 • SEC FORM 17-A (ANNUAL REPORT)

(1) Business Development

3 • SEC FORM 17-A (ANNUAL REPORT)

4 • SEC FORM 17-A (ANNUAL REPORT)

On November 28, 2007, SN Aboitiz Power‐Benguet, Inc. (SNAP‐Benguet), a consortium between

5 • SEC FORM 17-A (ANNUAL REPORT)

(2) Business of Issuer

6 • SEC FORM 17-A (ANNUAL REPORT)

Energy Energy Sold Energy

7 • SEC FORM 17-A (ANNUAL REPORT)

AP Renewables, Inc. (APRI)

8 • SEC FORM 17-A (ANNUAL REPORT)

SN Aboitiz Power‐Magat Inc. (SNAP‐Magat)

9 • SEC FORM 17-A (ANNUAL REPORT)

As a hallmark of innovation in revenue generation, SNAP‐Magat garnered an ancillary services contract

10 • SEC FORM 17-A (ANNUAL REPORT)

SN Aboitiz‐Benguet, Inc. (SNAP‐Benguet)

11 • SEC FORM 17-A (ANNUAL REPORT)

12 • SEC FORM 17-A (ANNUAL REPORT)

Hedcor, Inc. (Hedcor)

Luzon Hydro Corporation (LHC)

13 • SEC FORM 17-A (ANNUAL REPORT)

Hedcor Sibulan, Inc. (Hedcor Sibulan)

Hedcor Tamugan, Inc. (Hedcor Tamugan)

Hedcor Sabangan, Inc. (Hedcor Sabangan)

14 • SEC FORM 17-A (ANNUAL REPORT)

Hedcor Tudaya, Inc. (Hedcor Tudaya)

Therma Power, Inc. (TPI)

15 • SEC FORM 17-A (ANNUAL REPORT)

Therma Luzon, Inc. (TLI)

Therma Marine, Inc. (TMI)

16 • SEC FORM 17-A (ANNUAL REPORT)

Therma Mobile, Inc. (Therma Mobile)

The power barges are currently undergoing rehabilitation.

STEAG State Power Inc. (STEAG)