MORE THAN JUST WATER - Maynilad Water Services

1 more . than . just . WATER . A N N U A L R E P O R T. Maynilad supplies more than just WATER . We provide Services and opportunities for a better life. Contents 04 The Year at a Glance 04 Company Highlights 06 Message from the Chairman 08 Report from the President 11 Maynilad Three-Year Highlights 13 Being more , Doing more 18 Giving more 20 Setting the Standard 21 more than Expected 22 In the Pipeline 24 Board of Directors 26 Management Team 28 Audited Financial Statements The Quick Read Company Profile Maynilad WATER Services , Inc. ( Maynilad ) is the WATER and wastewater Services provider for the West Zone of the greater Metro Manila area.

2 We are the largest WATER concessionaire in terms of customer base in the Philippines. Maynilad is managed by DMCI-MPIC WATER Company, Inc. a joint venture between Metro Pacific Investments Corporation (MPIC) and DMCI Holdings Inc. (DMCI). The MPIC-DMCI. consortium took control of Maynilad on January 24, 2007. Our Coverage The West Zone covers an area of square kilometers, and includes the municipalities of Bacoor, Imus, Kawit, Noveleta and Rosario in Cavite province and the cities of Manila (all but portions of San Andres and Sta. Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the Districts of the Holy Spirit and Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Para aque, Las Pi as, Muntinlupa, Valenzuela, Navotas, Malabon and Cavite.

3 Key Priorities 1. Improve network and operational efficiency 2. Improve organizational efficiency 3. Ensure financial viability 4. Upgrade customer Services 5. Improve corporate image The Year at a Glance -4% +7%. Average Non- Customers with 24-hour WATER Revenue supply WATER +11% +12%. Billed Volume Customers with 7 psi. WATER pressure Company Highlights January March April MWSS suspends implementation of Potable WATER finally flows to BF Maynilad renews its partnership with WATER rate adjustment for 2009 Homes-Para aque after nearly 25 customer contact center specialist years of severe WATER shortage ePLDT Ventus to maintain the 24/7.

4 February operations of its Maynilad Hotline 1626. Groundbreaking Maynilad partners with international of WATER treatment WATER loss management company MWSS partially plant in Putatan, Miya implements basic Muntinlupa, the rate adjustment first large-scale Dagat-dagatan treatment plant membrane filtration becomes the first IMS-certified May and reverse sewage and septage treatment Brgy. 123 in Tondo, osmosis plant in the facility in the Asia Pacific Region Manila becomes Philippines first Samahang Tubig Maynilad MWSS allows implementation of CPI. adjustment in tariff June Successful public consultations strengthen Maynilad bid for 15-year Concession Agreement Term Extension 4 Maynilad .

5 Comparative Results (P billion). 10. 8. 6. 4. 2. 08 09 08 09 08 09. 0. Net Income Core Net Income EBITDA. +29%. Revenue from Operations +52% Income from Operations July September November Maynilad supports multi-sectoral SSS proclaims Maynilad as 2009 Top WHO adopts effort led by Kabit Bisig para sa Ilog Employer Maynilad WATER Pasig to revive the Pasig River Safety Plan MWSS Board of Trustees approves August Maynilad 15-year term extension Tondo Sewerage Cashless Business Area system application Pumping Plant gets established IMS certified Maynilad begins Maynilad employees and providing WATER December representatives of the National and wastewater La Mesa

6 Treatment plants receive Commission on Indigenous Services to Ayala IMS certification People, PLDT-Smart, Alabang Village, DENR, MWSS and Ayala Southvale, WATER quality monitoring yields 100%. the Bulacan local Madrigal Business satisfactory compliance from January government plant Park and Alabang to December 2009. 2,500 saplings Town Center on the Ipo Dam Maynilad receives six-year income tax holiday watershed October Dumadaloy ang Ginhawa media Laguna Lake Development Authority campaign wins Philippine Quill Award grants Dagat-Dagatan Sewage and Septage Treatment Plants Blue Rating 2009 ANNUAL REPORT 5.

7 Message from the Chairman To drive shareholder value and elevate the quality of our Services , we will persist in challenging our systems and procedures. We will also strengthen our social and environmental programs so we can nurture more vulnerable communities and continue protecting our natural resources. DEAR STAKEHOLDERS, I am pleased to report that for the second straight year, Reported net income in 2009 significantly increased by Maynilad WATER Services , Inc. ( Maynilad ) delivered a solid nearly to billion. The increase was primarily performance despite challenging economic and operating driven by higher revenues arising from billed volume conditions.

8 Growth and the partial implementation of the new rebased tariff, both of which grew by double digits. Transformational management, aggressive execution of key projects and the partial implementation of our rate rebasing Core net income, which excludes the effect of extraordinary enabled us to surpass the key milestones we set in the gains and charges as well as non-recurring foreign exchange previous year. gains or losses, grew by over to billion in 2009. Results and more Earnings before Interest, Taxes, Depreciation and From over 760,000 WATER service connections in 2008, our Amortization (EBITDA) rose to billion in 2009, a customer base increased by nearly to 814,645 in 2009.

9 Improvement from the previous year. Excluding Billed volume also reached an all-time high of MCM extraordinary gains and foreign exchange gains or losses, (million cubic meters). EBITDA margin stood at up by over 5% from last year's figure. During the year, we were able to obtain approval of the MWSS Board of Trustees for the extension of our Improving, Expanding concession term by fifteen (15) years to 2037. We also Given the pace that we have set and the changes we have received the Board of Investments approval for a new six- instituted, I am confident that we can sustain our solid year income tax holiday (ITH).

10 Performance in the coming years. 6 Maynilad . Customers with 24-hour WATER service (in %). In 2010, we will carry forward our commitment to deliver more than just WATER by aligning our initiatives and capital 75 expenditures with our brand promise of making a better life flow for our customers and for future generations. 60 To drive shareholder value and elevate the quality of our Services , we will persist in challenging our systems and procedures. We will also strengthen our social and 45. environmental programs so we can nurture more vulnerable communities and continue protecting our natural resources.