MA. CONCEPCION M. MAGDARAOG · 2013. 5. 10. · Energy Development Corporation 38th Floor, One Corporate Centre Building, Julia Vargas corner Meralco Avenue Ortigas Center, Pasig

Energy Development Corporation

38th Floor, One Corporate Centre Building, Julia Vargas corner Meralco Avenue

Ortigas Center, Pasig 1605, Philippines

Trunklines: +63 (2) 667-7332 (PLDT) / +63 (2) 755-2332 (Globe)

May 10, 2013

MA. CONCEPCION M. MAGDARAOG

Market Regulatory Services Group

Philippine Dealing & Exchange Corp.

37/F, Tower 1, The Enterprise Center

6766 Ayala Ave. cor. Paseo de Roxas

Makati City

Dear Ms. Magdaraog:

In compliance with the disclosure requirements of the Philippine Dealing & Exchange

Corp., we submit the attached Energy Development Corporation (Consolidated)

Quarterly Report for the period ended March 31, 2013 (SEC Form 17-Q).

SEC Form 17Q – 1Q 2013

SEC Number 66381

File Number _____

ENERGY DEVELOPMENT CORPORATION

(Company’s full Name)

One Corporate Centre Julia Vargas cor. Meralco Ave., Ortigas Center, Pasig City

(Company’s Address)

(632) 755-2332

(Telephone Number)

March 31, 2013

(Quarter Ending)

SEC FORM 17-Q

(Form Type)

6 6 3 8 1

SEC Registration Number

E N E R G Y D E V E L O P M E N T C O R P O R A T I O N

( A S u b s i d i a r y o f R e d V u l c a n H o l d i

n g s C o r p o r a t i o n ) A N D S U B S I D I A R I E S

(Company’s Full Name)

J u l i a V a r g a s C o r n e r M e r a l c o A v e n u

e , O r t i g a s C e n t e r , P a s i g C i t y

(Business Address: No. Street City/Town/Province)

Maribel A. Manlapaz 755-2332 (Contact Person) (Company Telephone Number)

0 3 3 1 S E C 1 7 0 5 0 7

Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting)

(Secondary License Type, If Applicable)

Article I

Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

690 P=29,780,948,276 P=19,174,418,484

Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document ID Cashier

S T A M P S

Remarks: Please use BLACK ink for scanning purposes.

COVER SHEET

SEC Form 17Q – 1Q 2013 2

SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17-Q

QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES

REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER

1. For the quarterly period ended March 31, 2013

2. Commission identification number: 66381

3. BIR Tax Identification No. 000-169-125-000

4. Exact name of issuer as specified in its charter: ENERGY DEVELOPMENT CORPORATION

5. PHILIPPINES 6. (SEC Use Only)

Province, country or other jurisdiction of Industry Classification Code

Incorporation or organization

7. One Corporate Centre Julia Vargas cor. Meralco Ave.,

Ortigas Center, Pasig City 1605

Address of issuer's principal office Postal Code

8. (632) 755-2332

Issuer's telephone number, including area code:

9. ___________________________________

Former name, former address and former fiscal year, if changed since last report:

10. Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA

Title of each Class Number of shares outstanding

as of March 31, 2013

Common Stock, P1.00 par value 18,750,000,000

Preferred Stock, P0.01 par value 9,375,000,000

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

Yes [ √ ] No [ ]

If yes, state the name of such Stock Exchange and the class/es of securities listed therein:

Philippine Stock Exchange Common Stock

12. Indicate by check mark whether the registrant:

(a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or

Sections 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 preceding twelve (12) months (or for such shorter period the

registrant was required to file such reports)

Yes [ √ ] No [ ]

(b) has been subject to such filing requirements for the past ninety (90) days.

Yes [ √ ] No [ ]

SEC Form 17Q – 1Q 2013

PART 1 FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our unaudited consolidated financial statements for the quarter ended March 31, 2013

have been prepared in accordance with Philippine Financial Reporting Standards (PFRS)

and are filed as Annex I of this report.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD & A”) The following is a discussion and analysis of the Company’s consolidated financial

performance for the quarter ended March 31, 2013. The prime objective of this MD&A

is to help the readers understand the dynamics of our Company’s business and the key

factors underlying our financial results. Hence, our MD&A is comprised of a discussion of

our core business and an analysis of the results of operations. This section also focuses on

key statistics from the unaudited financial statements and pertains to risks and uncertainties

relating to the geothermal power industry in the Philippines where we operate up to the

stated reporting period. However, our MD&A should not be considered all inclusive, as it

excludes unknown risks, uncertainties and changes that may occur in the general economic,

political and environment condition after the stated reporting date.

Our MD&A should be read in conjunction with our unaudited consolidated financial

statements and the accompanying notes. All financial information is reported in Philippine

Pesos (PhP) unless otherwise stated.

Any references in this MD&A to “we”, “us”, “our”, “Company” means the Energy

Development Corporation and its subsidiaries.

Additional information about the Company can be found on our corporate website

www.energy.com.ph.

SEC Form 17Q – 1Q 2013 4

The following is a summary of the key sections of this MD&A:

OVERVIEW OF OUR BUSINESS ..............................................................................................5 Principal Products or Services ........................................................................................................ 5

Competition..................................................................................................................................... 6

Concessions and government share payments ............................................................................7 KEY PERFORMANCE INDICATORS ......................................................................................9 FINANCIAL HIGHLIGHTS .......................................................................................................11 RESULTS OF OPERATIONS ...................................................................................................12

CAPITAL AND LIQUIDITY RESOURCES ............................................................................16 FINANCIAL POSITION ............................................................................................................17

Horizontal and Vertical Analysis of Material Changes as of March 31, 2013 and December

31, 2012..................................................................................................................................... 17

CASH FLOW ...............................................................................................................................21 DISCUSSION ON THE SUBSIDIARIES .................................................................................22

FG Hydro .................................................................................................................................. 22

Green Core Geothermal Inc. ..................................................................................................... 23 Bac-Man Geothermal Inc. ......................................................................................................... 24

FOREIGN EXCHANGE AND INTEREST RATE EXPOSURE ...........................................25 OTHER MATTERS ....................................................................................................................25

MAJOR STOCKHOLDERS ......................................................................................................26

BOARD OF DIRECTORS ..........................................................................................................27 OFFICERS ...................................................................................................................................27

SEC Form 17Q – 1Q 2013 5

OVERVIEW OF OUR BUSINESS

Principal Products or Services

As of March 31, 2013, the Company operates twelve geothermal steam fields in the five

geothermal service contract areas where it is principally involved in:

i. the production of geothermal steam for sale to National Power Corporation (NPC) pursuant to Steam Sales Agreements (SSAs) and

ii. the generation and sale of electricity through Company-owned geothermal power plants to NPC and privately-owned distribution utilities (DUs), pursuant to Power Purchase

Agreements (PPAs) and Electricity Sales Agreements (ESAs), respectively.

Starting September 3, 2010, on account of the extended waiver, the Company ceased billing to

NPC after BGI’s successful acquisition of the plants from NPC.

Through its 60% equity interest in First Gen Hydro (FG Hydro), the Company indirectly

operates the 120 MW Pantabangan and 12 MW Masiway Hydroelectric Power Plants, located in

Pantabangan, Nueva Ecija Province, Central Luzon. The power plants supply electricity into the

Luzon grid to service the consumption of its customers which include the Wholesale Electricity

Spot Market (WESM), distribution utilities covered by bilateral contract quantities (BCQ) and

the National Grid Corporation of the Philippines (NGCP) for ancillary services.

For the Company’s third business segment, EDC provides drilling services to the Lihir Gold

Limited in Papua New Guinea, which was discontinued in October 2012.

The Company has evolved into being the country’s premier pure renewable energy play,

possessing interests in geothermal energy and hydro power. For geothermal energy, its expertise

spans the entire geothermal value chain, i.e., from geothermal energy exploration and

development, reservoir engineering and management, engineering design and construction,

environmental management and energy research and development. With FG Hydro, the

Company has not only acquired expertise in hydropower operation and maintenance, but also the

capability to sell power on a merchant basis.

Distribution methods of products or services

The Company’s 1,847.7 GWh total sales volume comprised of 1,681.6 GWh coming from

electricity production in Leyte, Mindanao, Tongonan I, and Palinpinon geothermal power plants

and 166.1 GWh from FG Hydro’s Pantabangan-Masiway hydro power plants. About 61.3% or

1,133.0 GWh generated by Leyte and Mindanao was sold to NPC. The 548.6 GWh generated by

Tongonan I, Palinpinon I and II was sold to electric cooperatives and industrial customers in the

Visayas region and the Wholesale Electricity Spot Market (WESM). Electricity production of

about 166.1 GWh, by FG Hydro’s power plants, was sold to the distribution utility clients

comprised of electric cooperatives in the province of Nueva Ecija, BGI and the WESM.

SEC Form 17Q – 1Q 2013 6

The electricity generated by the Company’s geothermal power plants is transmitted to customers

i.e., distribution utilities, electric cooperatives or bulk power customers by the NGCP through its

high voltage backbone system.

FG Hydro generated 166.1 GWh of electricity as of first quarter of 2013, of which 82.0% or

136.2 GWh was sold to the WESM and 18.0% or 29.9 GWh was delivered to its contracted

customers.

Competition

The Government, in implementing the thrust of the EPIRA, has paved the way for a more

independent and market driven Philippine power industry. This has allowed for competition, not

limited by location, and driven by market forces. As such, selling power and, consequently, the

dispatch of power plants depend on the ability to offer competitively priced power supply to the

market. The Company has multiple power projects in Luzon, Visayas, and Mindanao.

The successful privatization of NPC assets and NPC-IPP contracts in Luzon and Visayas,

coupled with the integration of the two Grids under the WESM, introduced new players and

opened competition in the power industry. Multinationals that currently operate in the

Philippines and that could potentially compete against the Company include KEPCO Power

Corporation, CalEnergy International Services, Inc., Marubeni Energy Corporation, and AES

Corporation. Moreover, the local power companies of the Aboitiz group and San Miguel group

are the Company‘s two largest competitors. In terms of generation capacities, the Aboitiz group

has a total of 3,099 MW[1] in its portfolio. Aboitiz Power Corporation is the Company’s only

competitor in the geothermal energy space, after it successfully bid for the 747 MW Tiwi-

makban geothermal power plant. Chevron Geothermal Philippines Holdings operates the Tiwi-

Makban geothermal steam field, that supplies the Aboitiz geothermal plant. The San Miguel

group reportedly has 2,545[2] MW in its portfolio after selling its 650 MW Limay combined-

cycle gas turbine. Several of these competitors may have greater financial resources and have

more extensive operational experience and other capabilities than the Company, giving them the

ability to respond to operational, technology-related, financial, and other challenges more

quickly than the Company. The Company will face competition in both the development of new

power generation facilities and the acquisition of existing power plants, as well as in the

financing for these activities.

The performance of the Philippine economy and the historical high returns of power projects in

the country 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 long-term economic growth in the Philippines.

The Company believes that it will be able to compete because of its competitively-priced power,

the reliability of its power plants, its use of clean and renewable fuels, and its expertise and

experience in power supply contracting and trading. [1] Data from Aboitiz Power: www.aboitizpower.com [2] Data from San Miguel Corporation: www.sanmiguel.com.ph/businesses/new/power-energy/

http://www.aboitizpower.com/http://www.sanmiguel.com.ph/businesses/new/power-energy/

SEC Form 17Q – 1Q 2013 7

Dependence on one or a few major customers and identity of any such major customers

Close to 45.8% of the Company’s total revenues are derived from existing long-term PPAs with

NPC.

Concessions and government share payments

The five geothermal service contract areas where the EDC’s geothermal production steam fields

are located are:

• Tongonan Geothermal Project (expiring in 2031)

• Southern Negros Geothermal Project (expiring in 2031)

• Bacon-Manito Geothermal Project (expiring in 2031)

• Mt. Apo Geothermal Project (expiring in 2042)

Northern Negros Geothermal Project (expiring in 2044)

The Company, through its subsidiaries Green Core Geothermal Inc. and Bac-Man Geothermal

Inc. secured three (3) Geothermal Operating Contracts covering power plant operations:

Tongonan Geothermal Power Plant (with a 25-year contract period expiring in 2037, renewable for another 25 years)

Palinpinon Geothermal Power Plant (with a 25-year contract period expiring in 2037, renewable for another 25 years)

Bacon-Manito Geothermal Power Plant (with a 25-year contract period expiring in 2037, renewable for another 25 years)

The Company also holds service contracts for the following prospect areas:

Geothermal Resource

1. Mt Cabalian Geothermal Project (expiring by 2034)

2. Mt. Labo Geothermal Project (with a five-year pre-development period expiring in 2015,

25-year contract period expiring in 2035)

3. Mainit Geothermal Project (with a five-year pre-development period expiring in 2015,


4. Ampiro Geothermal Project (with a five-year pre-development period expiring in 2017,


5. Mandalagan Geothermal Project (with a five-year pre-development period expiring in

2017, 25-year contract period expiring in 2037)

6. Mt. Zion Geothermal Project (with a five-year pre-development period expiring in 2017,


7. Lakewood Geothermal Project (with a five-year pre-development period expiring in


8. Balingasag Geothermal Project (with a five-year pre-development period expiring in


SEC Form 17Q – 1Q 2013 8

Wind Resource

1. Burgos Wind Project (WESC assigned by EDC to EDC Burgos Wind Power Corporation; pre-development stage expiring in 2012, 25-year contract period expiring in

2034)

2. Pagudpud Wind Project (pre-development stage expiring in 2013, 25-year contract

period expiring in 2035)

SEC Form 17Q – 1Q 2013 9

KEY PERFORMANCE INDICATORS

The top eight (8) key performance indicators are set forth below:

Ratio

Mar – 13

Mar – 12

Current Ratio 2.07:1 1.89:1

Debt-to-Equity Ratio 1.35:1 1.63:1

Net Debt-to-Equity Ratio 1.00:1 1.21:1

Return on Assets (%) 10.87 2.45

Return on Equity (%) 30.46 7.48

Solvency Ratio 0.08 0.08

Interest Rate Coverage Ratio 4.69 3.87

Asset-to-Equity Ratio 2.64 2.99

Current Ratio – Total current assets divided by total current liabilities.

This ratio is a rough indication of a company’s ability to pay its short-term obligations.

Generally, a current ratio above 1.00 is indicative of a company’s greater capability to settle

its current obligations.

Debt-to-Equity Ratio – Total interest-bearing debts divided by stockholders’ equity.

This ratio expresses the relationship between capital contributed by the creditors and the

owners. The higher the ratio, the greater the risk being assumed by the creditors. A lower

ratio generally indicates greater long-term financial safety.

Net-Debt-to-Equity Ratio – Total interest-bearing debts less cash & cash equivalents

divided by stockholders’ equity.

This ratio measures the company’s financial leverage and stability. A negative net debt-to-equity

ratio means that the total of cash and cash equivalents exceeds interest-bearing

liabilities.

Return on Assets – Net income (annual basis) divided by total assets (average).

This ratio indicates how profitable a company is relative to its total assets. This also gives an

idea as to how efficient management is at using its assets to generate earnings.

Return on Equity – Net income (annual basis) divided by total stockholders’ equity (average).

This ratio reveals how much profit a company earned in comparison to the total amount of

shareholder equity found on the balance sheet. A business that has a high return on equity is

more likely to be one that is capable of internally generating cash. For the most part, the

company’s return on equity is compared with an industry average. The company is

considered superior if its return on equity is greater than the industry average.

Solvency Ratio – Net income excluding depreciation and non-cash provisions divided by total

debt obligations.

This ratio gauges a company’s ability to meet its long-term obligations.

SEC Form 17Q – 1Q 2013 10

Interest Rate Coverage Ratio – Earnings before interest and taxes of one period divided by

interest expense of the same period.

This ratio determines how easily a company can pay interest on outstanding debt.

Asset-to-Equity Ratio – Total assets divided by total stockholders’ equity.

This ratio shows a company’s leverage, the amount of debt used to finance the firm.

SEC Form 17Q – 1Q 2013 11

OPERATING REVENUES AND EXPENSES

FINANCIAL HIGHLIGHTS

During the first quarter of 2013, the Company posted a net income of P2,981.6 million, a

5.3% or P165.3 million decrease from the P3,146.9 million in the three-month period

ending March 31, 2012. The movement was primarily caused by the P181.6 million

decrease in revenues mainly due to FG Hydro’s lower sale of electricity offset by the

increase in GCGI and BGI’s higher revenues.

Net income is equivalent to 43.0% of total revenues in 2013 as compared to the 44.2%

from the same period in 2012.

Net income attributable to equity holders of the parent company at P2,698.2 million for

the first quarter of 2013 decreased by P1.1 million from P2,699.3 million during the same

period in 2012.

The recurring net income generated in the first quarter of 2013 increased by 2.5% or

P69.5 million to P2,861.7 million from the P2,792.2 million posted during the same

period in 2012. The increase mainly attributable to the P131.3 million decrease in cost of

sales of electricity and steam and the P131.6 million decrease in interest expense. This

was offset by the P181.6 million decrease in revenues and the P19.9 million decrease in

interest income.

Recurring net income attributable to equity holders of the parent was posted at

P2,578.3 million, up by 10.0%, as compared to the P2,344.5 million for the first quarter

of 2012.

Cash and cash equivalents increased by 12.4% or P1,413.7 million, to P12,833.8 million as

of March 31, 2013 from the P11,420.1 million December 31, 2012 balance. The increase was

mainly due to P3,237.9 million cash generated from operations. This was offset by the

following:

P1,058.8 million property, plant and equipment acquisition;

P542.0 million interest and financing charges paid; and

P151.8 million payment of income taxes.

SEC Form 17Q – 1Q 2013 12

RESULTS OF OPERATIONS

The following table details the results of operations for EDC for the first quarter of 2013

and 2012.

STATEMENT OF INCOME

Horizontal Analysis of Material Changes as of March 31, 2013 and 2012

Favorable (Unfavorable) Variance

(Amounts in PHP millions) March 2013 March 2012 Amount % 2013 2012

REVENUES

Sale of electricity 6,939.9 7,121.5 (181.6) -2.6% 100.0% 100.0%

COST OF SALES AND SERVICES

Cost of sales of electricity and steam (2,194.7) (2,326.0) 131.3 5.6% -31.6% -32.7%

GENERAL AND ADMINISTRATIVE EXPENSES (838.9) (913.3) 74.4 8.1% -12.1% -12.8%

FINANCIAL INCOME (EXPENSE)

Interest income 74.0 93.9 (19.9) -21.2% 1.1% 1.3%

Interest expense (839.9) (1,015.3) 175.4 17.3% -12.1% -14.3%

(765.9) (921.4) 155.5 16.9% -11.0% -13.0%

OTHER INCOME (CHARGES)

Foreign exchange gains, net 98.5 337.3 (238.8) -70.8% 1.4% 4.7%

Derivative losses, net (5.4) - (5.4) -100.0% -0.1% 0.0%

Miscellaneous, net* (5.5) 59.4 (64.9) -109.3% -0.1% 0.8%

87.6 396.7 (309.1) -77.9% 1.2% 5.5%

INCOME BEFORE INCOME TAX 3,228.0 3,357.5 (129.5) -3.9% 46.5% 47.1%

PROVISION FOR INCOME TAX

Current (239.8) (168.0) (71.8) -42.7% -3.5% -2.4%

Deferred (6.6) (89.1) 82.5 92.6% -0.1% -1.3%

(246.4) (257.1) 10.7 4.2% -3.6% -3.7%

2,981.6 3,100.4 (118.8) -3.8% 43.0% 43.5%

- 46.5 (46.5) -100.0% 0.0% 0.7%

NET INCOME 2,981.6 3,146.9 (165.3) -5.3% 43.0% 44.2%

Net income attributable to:

Equity holders of the Parent Company 2,698.2 2,699.3 (1.1) 0.0% 38.9% 37.9%

Non-controlling interest 283.4 447.6 (164.2) -36.7% 4.1% 6.3%

EBITDA 4,801.9 4,863.2 (61.3) -1.3% 69.2% 68.3%

RECURRING NET INCOME 2,861.7 2,792.2 69.5 2.5% 41.2% 39.2%

Recurring net income attributable to:

Equity holders of the Parent Company 2,578.3 2,344.5 233.8 10.0% 37.2% 32.9%

Non-controlling interest 283.3 447.7 (164.4) -36.7% 4.1% 6.3%

NET INCOME FROM DISCONTINUED

OPERATIONS

HORIZONTAL ANALYSIS VERTICAL ANALYSIS

NET INCOME FROM CONTINUING

OPERATIONS

SEC Form 17Q – 1Q 2013 13

YTD March 31, 2013 vs. YTD March 31, 2012

Revenues

Total revenues pertaining to sale of electricity for the three-month period ended March 31, 2013

decreased by 2.6% or P181.6 million to P6,939.9 million from P7,121.5 million in the first three

months of 2012. The decrease was primarily due to the following:

P426.9 million FG Hydro’s lower revenues from total sale of electricity; and

P129.7 million decrease in the Parent Company’s revenues mainly due to lower average electricity price by P0.0886/KWh influenced by the appreciation of the peso against the

US dollar.

These were offset by the P327.5 million increase in GCGI’s revenue due to higher volume by

40.8 GWh and ave. tariff by P0.251/kWh and the P47.6 million increase in BGI’s net trading

gains resulting from lower cost of replacement power during the first quarter of the year.

Cost of Sales of Electricity and Steam

Cost of sales of electricity and steam decreased by 5.6% or P131.3 million to P2,194.7 million in

the first quarter of 2013 from P2,326.0 million during the same period in 2012. The decrease was

mainly caused by lower parts and supplies issued due to the absence in 2013 of the rehabilitation

(civil works) activities in Palinpinon to restore the damages caused by typhoon Sendong in

December 2011.

General and Administrative Expenses

General and administrative expenses decreased by 8.1% or P74.4 million to P838.9 million in the

first quarter of 2013 from P913.3 million during the same period in 2012. The decrease was

caused by lower personnel costs due to the implementation of ERP/MRP in December 2012.

This was supplemented by the decrease in business and related expenses mainly contributed by

the absence in 2013 of foreign travel expenses incurred during the geophysical survey conducted

in Chile in 2012.

Financial Income (Expenses)

Financial expenses-net decreased by 16.9% or P155.5 million to P765.9 million in the first

quarter of 2013 from P921.4 million during the same period in 2012 due to the lower interest

charges on refinanced loans.

Interest income

Interest income decreased by 21.2% or P19.9 million to P74.0 million in the first quarter

of 2013 from P93.9 million during the same period in 2012. The unfavorable variance is

mainly due to lower interest income on investments and short-term placement of funds

due to the decrease in monthly average amount of investible funds.

SEC Form 17Q – 1Q 2013 14

Interest expense

Interest expense decreased by 17.3% or P175.4 million to P839.9 million in the first

quarter of 2013 from P1,015.3 million during the same period in 2012. The favorable

variance is due to lower interest charges on refinanced loans.

Other Income (Charges)

Other income decreased by 77.9% or P309.1 million to P87.6 million in the first quarter of 2013

from P396.7 million during the same period in 2012 primarily due to the decrease in foreign

exchange gains.

Foreign exchange gains (losses) - net

Foreign exchange gains decreased by 70.8% or P238.8 million to P98.5 million in the

first quarter of 2013 from P337.3 million during the same period in 2012. The variance

was mainly brought about by lower foreign exchange gain on realignment/repayment of

long-term foreign loans mainly from the unrealized foreign exchange gain on realignment

of the US Dollar Bond and Club Loan.

The comparative foreign exchange rates against the USD were as follows:

PHP:US$

December 31, 2011 43.840

March 31, 2012 42.750

December 31, 2012 41.050

March 31, 2013 40.080

Derivatives losses - net

The Derivative losses - net P5.4 million balance for the first quarter of 2013 was

triggered by the appreciation of the peso against the US dollar, which resulted to an

unrealized loss on forward foreign exchange contracts entered into with various banks in

2013.

Miscellaneous – net

The Company recognized miscellaneous charges – net of P5.5 million for the first quarter

of 2013 compared to miscellaneous income – net of P59.4 million during the same period

in 2012 The decrease was mainly due to the P63.6 million recognized recovery on

impairment of NNGP assets in 2012, while none in 2013.

SEC Form 17Q – 1Q 2013 15

Provision for Income Tax

The Company’s current tax expense increased by 42.7% or P71.8 million to P239.8 million in

the three-month period ending March 31, 2013 from P168.0 million during the same period in

2012. The unfavorable variance was due to GCGI’s P86.5 million current tax expense while

none in 2012. This was offset by BGI’s P17.3 million decrease due to lower income tax rate

considering that it is now registered as an RE developer.

Deferred tax expense decreased by 92.6% or P82.5 million to P6.6 million in the three-month

period ending March 31, 2013 from P89.1 million in the three-month period ending March 31,

2012 which was primarily contributed by the following:

Parent Company’s lower unrealized foreign exchange gain on realignment of dollar denominated long-term loans. (P36.7 million);

GCGI’s lower deferred tax expense on the application of Net Operating Loss Carryover (NOLCO) (P36.6 million); and

BGI’s higher recognition since its revenues are recorded as an offset to construction in progress (rehabilitation costs) per IFRS (P13.1 million).

Net Income

As a result of the foregoing, the Company’s net income decreased by 5.3% or P165.3 million to

P2,981.6 million for the first quarter of 2013 from P3,146.9 million net income during the same

period in 2012.

Net income is equivalent to 43.0% of total revenues in 2013 as compared to the 44.2% in 2012.

Net income attributable to equity holders of the parent company at P2,698.2 million for the first

quarter of 2013 decreased by P1.1 million to P2,699.3 million during the same period in 2012.

SEC Form 17Q – 1Q 2013 16

CAPITAL AND LIQUIDITY RESOURCES

As of the quarter ended

(in millions of pesos)

Q1

2013

Q1

2012 YoY change

Balance Sheet Data

Total Assets …………………………… 95,763.0 92,151.1 3.9%

Total Liabilities………………………... 59,525.5 61,340.2 (3.0%)

Total Stockholder’s Equity …………… 36,237.5 30,810.9 17.6%

The Company’s assets as of March 31, 2013 amounted to P95,763.0 million, 3.9% higher as

compared to the P92,151.1 million level as of March 31, 2012.

SEC Form 17Q – 1Q 2013 17

FINANCIAL POSITION

Horizontal and Vertical Analysis of Material Changes as of March 31, 2013 and

December 31, 2012.

(Amounts in PHP millions) March 2013 December 2012 Amount % 2013 2012

ASSETS

Current Assets

Cash and cash equivalents 12,833.8 11,420.1 1,413.7 12.4% 13.4% 12.1%

Trade and other receivables 3,518.2 4,115.8 (597.6) -14.5% 3.7% 4.4%

Available-for-sale (AFS) investments 365.7 132.3 233.4 176.4% 0.4% 0.1%

Parts and supplies inventories 3,302.8 3,338.8 (36.0) -1.1% 3.4% 3.5%

Derivative assets 5.0 0.2 4.8 2400.0% 0.0% 0.0%

Other current assets 999.0 692.3 306.7 44.3% 1.0% 0.7%

Total Current Assets 21,024.5 19,699.5 1,325.0 6.7% 22.0% 20.9%

Noncurrent Assets

Property, plant and equipment 60,573.5 60,680.2 (106.7) -0.2% 63.3% 64.3%

Intangible assets 4,849.6 4,818.4 31.2 0.6% 5.1% 5.1%

Deferred tax assets 1,162.1 1,092.1 70.0 6.4% 1.2% 1.2%

Exploration and evaluation assets 1,937.4 1,604.1 333.3 20.8% 2.0% 1.7%

Other noncurrent assets 6,215.9 6,408.9 (193.0) -3.0% 6.5% 6.8%

Total Noncurrent Assets 74,738.5 74,603.7 134.8 0.2% 78.0% 79.1%

TOTAL ASSETS 95,763.0 94,303.2 1,459.8 1.5% 100.0% 100.0%

LIABILITIES AND EQUITY

LIABILITIES

Current Liabilities

Trade and other payables 7,472.3 7,694.9 (222.6) -2.9% 7.8% 8.2%

Income tax payable 135.4 5.2 130.2 2503.8% 0.1% 0.0%

Due to related parties 47.3 49.6 (2.3) -4.6% 0.0% 0.1%

Derivative liabilities 97.8 85.4 12.4 14.5% 0.1% 0.1%

Current portion of:

Long-term debts 2,386.7 2,393.9 (7.2) -0.3% 2.5% 2.5%

Royalty fee payable 35.1 20.6 14.5 70.4% 0.0% 0.0%

Total Current Liabilities 10,174.6 10,249.6 (75.0) -0.7% 10.6% 10.9%

Noncurrent Liabilities

Long-term debts - net of current portion 46,568.7 46,656.0 (87.3) -0.2% 48.6% 49.5%

Net retirement and other post-employment benefits 1,517.0 659.9 857.1 129.9% 1.6% 0.7%

Provisions and other long-term liabilities 1,132.3 1,150.3 (18.0) -1.6% 1.2% 1.3%

Derivative liabilities 132.9 153.5 (20.6) -13.4% 0.1% 0.3%

Total Noncurrent Liabilities 49,350.9 48,619.7 731.2 1.5% 51.5% 51.6%

EQUITY

Equity Attributable to Equity Holders of the Parent

Preferred stock 93.8 93.8 - 0.0% 0.1% 0.1%

Common stock 18,750.0 18,750.0 - 0.0% 19.6% 19.9%

Common stock in employee trust account (358.4) (358.4) - 0.0% -0.3% -0.4%

Additional paid-in capital 6,277.9 6,277.9 - 0.0% 6.6% 6.7%

Equity reserve (3,706.4) (3,706.4) - 0.0% -3.8% -3.9%

Net accumulated unrealized gain on AFS investments 113.8 111.5 2.3 2.1% 0.1% 0.1%

Retained earnings 12,832.3 12,331.6 500.7 4.1% 13.4% 13.1%

Cumulative translation adjustment (121.4) (138.6) 17.2 -12.4% -0.1% -0.1%

33,881.6 33,361.4 520.2 1.6% 35.4% 35.4%

Non-controlling interest 2,355.9 2,072.5 283.4 13.7% 2.5% 2.2%

Total Equity 36,237.5 35,433.9 803.6 2.3% 37.8% 37.6%

TOTAL LIABILITIES AND EQUITY 95,763.0 94,303.2 1,459.8 1.5% 100.0% 100.0%

HORIZONTAL

ANALYSIS

VERTICAL

ANALYSIS

Increase (Decrease)

SEC Form 17Q – 1Q 2013 18

Assets

Cash and cash equivalents

The 12.4% or P1,413.7 million increase to P12,833.8 million as of March 31, 2013 from the

P11,420.1 million December 31, 2012 balance was mainly due to the P3,237.9 million cash

generated from operations. This was offset by the following:

P1,058.8 million property, plant and equipment acquisition;

P542.0 million interest and financing charges paid; and

P151.8 million payment of income taxes.

Trade and other receivables

Trade and other receivables decreased by 14.5% or P597.6 million to P3,518.2 million as of

March 31, 2013 from the P4,115.8 million balance as of December 31, 2012 primarily due to

collection of trade receivables from customers.

Available-for-sale (AFS) investments - current

AFS investments increased by 176.4% or P233.4 million to P365.7 million as of

March 31, 2013 from the P132.3 million balance as of December 31, 2012 is mainly due to

the reclassification from non-current AFS and the purchase of GT Capital Fixed Rate Bonds

5.0937% amounting to P35.00 million.

Derivative assets

This account increased by P4.8 million to P5.0 million as of March 31, 2013 from the P0.2

million in December 31, 2012. The increase was mainly due to the additional hedging of

foreign loans of the company.

Other current assets

This account increased by 44.3% or P306.7 million to P999.0 million as of

March 31, 2013 from the P692.3 million balance in December 2012 primarily due to the

Parent Company’s higher prepaid withholding taxes, insurance on industrial all risk and real

property taxes P304.1 million.

Deferred tax assets

This account increased by 6.4% or P70.0 million to P1,162.1 million as of

March 31, 2013 from the P1,092.1 million balance as of December 31, 2012 mainly due to

the Parent Company’s recognized transition adjustment amounting to P76.6 million

pertaining PAS 19 updates.

SEC Form 17Q – 1Q 2013 19

Exploration and evaluation assets


March 31, 2013 from the balance of P1,604.1 million as of December 31, 2012 mainly due to

the N2N Project costs, the transfer of the NNGP Power Facility to Nasulo and to the

expenditures in Mindanao III areas.

Liabilities

Income tax payable

This account increased by P130.2 million, to P135.4 million as of March 31, 2013 from the

P5.2 million balance as of December 31, 2012 arising from the Parent Company and BGI’s

taxable income for the period.

Derivative liabilities – current

This account increased by 14.5% or P12.4 million to P97.8 million as of March 31, 2013

from the P85.4 million in December 31, 2012. The increase was mainly due to the additional

hedging of foreign loans of the company.

Royalty fee payable - current portion

Royalty fee payable increased by 70.4% or P14.5 million, to P35.1 million as of

March 31, 2013 from the P20.6 million balance at year-end 2012 was mainly due to the

accrual of royalty fee.

Net retirement and other post-employment benefits


March 31, 2013 from the P659.9 million balance as of December 31, 2012 mainly due to the

recognized transition adjustment amounting to P766.0 million due to PAS 19 updates.

Derivative liabilities – non current

This account decreased by 13.4% or P20.6 million to P132.9 million as of March 31, 2013

from the P153.5 million in December 31, 2012. The decrease was mainly due to the

additional hedging of foreign loans of the company.

Retained earnings

Retained earnings increased by 4.1% or P500.7 million, to P12,832.3 million as of

March 31, 2013 from P12,331.6 million as of December 31, 2012 mainly due to the

P2,698.2 million net income for the first quarter of 2013 offset by the P1,507.5 million cash

dividend declared and accrued on February 20, 2013 and P689.4 million prior period

adjusment on the impact of PAS19.

SEC Form 17Q – 1Q 2013 20

Non-controlling interest

Non-controlling interest increased by 13.7% or P283.4 million to P2,355.9 million as of

March 31, 2013 from P2,072.5 million balance as of December 31, 2012 mainly due to the

net income for the first quarter of 2013.

SEC Form 17Q – 1Q 2013 21

CASH FLOW

YTD March 31, 2013 vs. YTD March 31, 2012

Net cash flows from operating activities decreased by 29.2% or P1,050.5 million to

P2,543.1 million in the first quarter of 2013 from P3,593.6 million during the same period in

2012 mainly caused by the P1,654.6 million lower cash generation from operations due to lower

revenues and P118.3 million increase in payment of income taxes. These were offset by the

P723.4 million decrease in interest and financing charges paid.

Net cash flows used in investing activities decreased by 45.8% or P934.4 million to

P1,107.6 million in the three-month period ending March 2013 as compared to the

P2,042.0 million during the same period in 2012. The decrease was primarily due to

P358.0 million lower acquisition of property, plant and equipment, P299.4 million proceeds from

incidental income from testing of PPE in 2013 and the P202.5 million lower increase in other

noncurrent assets.

Net cash flows used in financing activities decreased by 97.4% or P903.5 million to

P24.4 million in the first quarter of 2013 from the P927.9 million during the same period in 2012

mainly due to the P887.3 million payments of long-term debts and cash dividends in 2012, while

none in 2013.

SEC Form 17Q – 1Q 2013 22

DISCUSSION ON THE SUBSIDIARIES

FG Hydro

(Amounts in PHP millions)

As of and for the periods ended

March 31 2013 2012

Operating revenues 984.2 1,411.1 Operating expenses 225.1 198.5 Other expenses – net 50.5 93.6 Income before tax 708.6 1,119.0 Provision for (benefit from) income tax 0.1 0.1 Net income 708.5 1,118.9

Total current assets 2,861.3 3,414.0 Total noncurrent assets 6,680.0 7,156.1 Total current liabilities 610.6 650.4 Total noncurrent liabilities 3,931.0 4,219.2 Total equity 4,999.7 5,700.5

FG Hydro generated revenues of P984.2 million for the period ended March 31, 2013, P426.9 million or

30.3% lower than the revenues of P1,411.1 million for the same period in 2012. The unfavorable variance

was mainly on account of lower ancillary service revenues and lower spot prices in the WESM, partly

offset by higher dispatch.

The unfavorable variance in operating expenses is mainly on account of higher operations and

maintenance expenses and professional fees. These unfavorable variances, however, were offset by lower

interest expense on account of lower long-term debt balance and lower interest rates from 9.025% in 2012

to 4.5% in 2013. Overall, FG Hydro posted a net income of P708.5 million for the period ended March

31, 2013, P410.4 million lower than the P1,118.9 million reported income for the same period in 2012.

Total assets as of March 31, 2013 stood at P9,541.3 million, P1,028.8 million or 9.7% lower than the

2012 level of P10,570.1 million. The unfavorable variance was mainly due to lower cash and accounts

receivable trade balances in 2013.

As of March 31, 2013, total liabilities stood at P4,541.6 million, P328.0 million or 6.7% lower than the

2012 level of P4,869.6 million. The decrease in liabilities was mainly due to the continuous pay-out of the

scheduled semi-annual loan repayments and lower accrued interest on the long-term debt due to lower

interest rates.

Total equity as of March 31, 2013 of P4,999.7 million is P700.8 million or 12.3% lower compared to the

March 31, 2012 level of P5,700.5 million.

SEC Form 17Q – 1Q 2013 23

Green Core Geothermal Inc.

March 2013 vs. March 2012 Results

(Amounts in PHP millions)

As of and for the periods ended

March 31 2013 2012

Revenues 2,692.9 2,365.4 Cost of sale of electricity (1,687.8) (1,827.1) General and administrative expenses (77.5) (74.7) Other income (charges) - net 23.0 23.9 Income before income tax 950.6 487.5 Provision for income tax (98.5) (48.6) Net income 852.1 438.9

Total Current Assets 4,309.3 1,729.2 Total Non-Current Assets 9,902.9 9,963.7 Total Liabilities 3,699.7 2,442.0 Total Equity 10,512.5 9,250.9

GCGI’s revenues increased by 13.8% or P327.5 million, to P2,692.9 million for the three-month period

ended March 31, 2013 from P2,365.4 million for the same period in 2012. The increase is due to higher

electricity revenues owing to the additional power supply agreements that were signed in December 2012

and January 2013 coupled with the agreed contracts that became effective in March 2012 and April 2012.

Cost of sale of electricity decreased by 7.6% or P139.3 million, to P1,687.8 million in 2013 from

P1,827.1 million in 2012 due to lower cost of steam by an average cost of P0.68/kWh (P370.1 million)

partially offset by the increase in volume by 45.7 GWh (P143.6 million). The favorable variance was

further reduced by higher rental, insurance & taxes (P33.3 million) and repairs & maintenance

(P21.1 million).

Provision for income tax increased by 102.7% or P49.9 million, to P98.5 million in 2013 from

P48.6 million in 2012 due to this period’s current tax expense (P86.5 million), none in 2012, offset by

lower deferred tax expense (P36.6 million).

Total current assets increased by 149.2% or P2,580.1 million, to P4,309.3 million in 2013 from

P1,729.2 million in 2012 largely due to higher cash & cash equivalents (P2,621.6 million) and trade &

other receivables (P116.3 million) reduced by lower other current assets (P142.8 million).

Total noncurrent assets decreased by P60.8 million, to P9,902.9 million in 2013 from P9,963.7 million in

2012 due to lower deferred tax asset of (P85.4 million) and property, plant & equipment of

(P67.1 million) offset by higher other noncurrent assets (P91.7 million).

Total liabilities increased by 51.5% or P1,257.7 million, to P3,699.7 million in 2013 from

P2,442.0 million in 2012 due largely to higher trade & other payables (P1,177.8 million). The increase

was traced to this period’s dividend payable (P2,200.0 million) reduced by lower accounts payable – trade

(P1,031.9 million).

SEC Form 17Q – 1Q 2013 24

Total equity increased by 13.6% or P1,261.6 million, to P10,512.5 million in 2013 from P9,250.9 million

in 2012 due to the net income for the period April 1, 2012 to March 31, 2013 (P3,461.6 million) offset by

the accrual of dividends that was declared on February 20, 2013 (P2,200.0 million).

Bac-Man Geothermal Inc.

(Amounts in PHP millions) For the periods ended

March 31, 2013 March 31, 2012 Revenues 82.5 35.0 Expenses (47.2) (13.0) Other income 0.6 0.9 Operating income 35.9 22.9 Provision for income tax (5.9) (36.2) Net income (loss) 30.0 (13.3)

Total Current Assets 693.5 484.9 Total Non-Current Assets 4,016.3 3,449.5 Total Current Liabilities 1,985.5 821.5 Total Non-Current Liabilities 11.0 – Total Equity 2,713.3 3,112.9

For the quarters ending March 31, 2013 and 2012, revenues were offset with their corresponding

replacement power costs.

Revenues increased by 135.71% or P=47.5 million due to lower replacement power cost and higher own

generation of electricity by BGI’s power plants from testing and commissioning runs.

The increase in expenses by 263.08% or P=34.2 million pertains primarily to purchased services and

utilities by P=7.2 million, insurance costs by P=11.9 million, and local business taxes by P=15.0 million.

Provision for income tax is lower by 83.70% or P=30.3 million resulting from a lower income tax rate of

10% applicable to RE developers effective May 8, 2012.

The increase in current assets by 43.02% or P=208.6 million is due mainly to the increase in cash and cash

equivalents of P=322.1 million from collections from customers, partially offset by the decrease in trade

and other receivables amounting to P=148.1 million resulting from timely collection.

Non-current assets increased by 16.43% or P=566.8 million resulting mainly from the capitalized costs for

the rehabilitation of the power plants amounting to P=392.5 million. This amount is net of P=299.4 million

income from testing and commissioning of the power plants as required by PAS 16. The increase in input

VAT by P=144.2 million as a result of the increase in expenses also contributed to the overall increase in

non-current assets.

The increase in current liabilities of 141.69% or P=1,164.0 million is caused mainly by the increase in due

to related parties amounting to P=1,119.3 million. Non-current liabilities resulted from the accrual of

retirement and other post-employment benefits for the year, which was nil in 2012.

SEC Form 17Q – 1Q 2013 25

Commitments that will have an impact on the issuer’s liquidity

As of March 31, 2013, the Company has unserved purchase orders and awarded contracts for the

purchase of various capital goods in the total amount of P56.0 million.

Other than these, we are not aware of any other material commitments that should impact the

Company’s liquidity.

Legal proceedings

There are no other material changes in the contingent liabilities since the last annual balance

sheet date.

FOREIGN EXCHANGE AND INTEREST RATE EXPOSURE

The Company has P=19,174.4 million in long-term US dollar denominated loans as of

March 31, 2013 which is 42.9% of the total Company’s long-term loans.

OTHER MATTERS

CASH DIVIDEND

On February 20, 2013, EDC declared cash dividends amounting to P=1.5 billion to its

common shareholders and P=7.5 million to its preferred shareholders of record as of

March 11, 2013 payable on or before April 8, 2013.

SEC Form 17Q – 1Q 2013 26

MAJOR STOCKHOLDERS

As of March 31, 2013, the total number of stockholders was 690 and the stock price was P=6.46.

Public float level was at 50.17% (or 9,407,544,064 common shares).

List of Top 20 Stockholders as of March 31, 2013

Rank Name Nationality

Number of Shares

% Preferred Common Total

1 Red Vulcan Holdings

Corporation

Filipino 9,375,000,000 7,500,000,000 16,875,000,000 60.00

2 PCD Nominee Corporation Foreign - 6,740,652,872 6,740,652,872 23.97

3 PCD Nominee Corporation Filipino - 2,737,451,371 2,737,451,371 9.73

4 First Gen Corporation Filipino - 1,007,891,500 1,007,890,500 3.58

5 Northern Terracotta Power

Corporation

Filipino - 726,450,200 726,450,200 2.58

6 Peter D. Garrucho, Jr. Filipino - 5,670,000 5,670,000 0.02

7 Benjamin K. Liboro Filipino - 3,525,500 3,525,500 0.01

8 Arthur A. De Guia Filipino - 2,200,000 2,200,000 0.01

9 CROSLO Holdings Corporation Filipino - 1,700,000 1,700,000 0.01

10 Hi-Light Corporation Filipino - 1,577,500 1,577,500 0.01

11 Mapazon Corporation Filipino - 1,470,000 1,470,000 0.01

12 ALG Holdings Corporation Filipino - 875,000 875,000 0.00

13 Raul I. Macatangay Filipino - 725,000 725,000 0.00

14 Rosalind Camara Filipino - 663,750 663,750 0.00

15 Rodolfo R. Waga, Jr. Filipino - 658,750 658,750 0.00

16 Emelita D. Sabella Filipino - 521,000 521,000 0.00

17 Rodolfo R. Waga, Jr. &/or Grace

B. Waga

Filipino - 501,200 501,200 0.00

19 Hiro Budhrani &/or Astrid J.

Budhrani

Filipino - 500,000 500,000 0.00

18 Ma. Consuelo R. Lopez Filipino - 500,000 500,000 0.00

20 Peter Mar & /or Annabelle C.

Mar

Filipino - 500,000 500,000 0.00

SEC Form 17Q – 1Q 2013 27

BOARD OF DIRECTORS

As of March 31, 2013, the members of Board of Directors of EDC are as follows:

Oscar M. Lopez Chairman Emeritus

Federico R. Lopez Chairman and Chief Executive Officer

Peter D. Garrucho, Jr. Director

Elpidio L. Ibañez Director

Ernesto B. Pantangco Director and Executive Vice President

Francis Giles B. Puno Director

Richard B. Tantoco Director, President and Chief Operating Officer

Jonathan C. Russell Director

Edgar O. Chua Independent Director

Francis Ed. Lim Independent Director

Arturo T. Valdez Independent Director

OFFICERS

As of March 31, 2013, the officers of EDC are as follows:

Name Position

Federico R. Lopez Chief Executive Officer

Richard B. Tantoco President and Chief Operating Officer

Ernesto B. Pantangco Executive Vice President

Agnes C. De Jesus Senior Vice President for Environment and

External Relations, and Compliance Officer

Nestor H. Vasay Senior Vice President, Chief Financial

Officer and Treasurer

Marcelino M. Tongco Senior Vice President for Strategic

Contracting

Manuel S. Ogena Senior Vice President for Technical Services

Dominic M. Camu Senior Vice President for Power Generation

Ma. Elizabeth D. Nasol Vice President for Human Resource

Management

Ernesto G. Espinosa Vice President for Change Management

Vincent Martin C. Villegas Vice President for Business Development

Erwin O. Avante Vice President for Corporate Finance

Rico G. Bersamin Vice President for Steam Field Operations

Ferdinand B. Poblete Vice President, Chief Information Officer

Ariel Arman V. Lapus Vice President for Business Development -

International

Ellsworth R. Lucero Vice President for Power Generation

Dwight A. Maxino Vice President, Southern Negros and

SEC Form 17Q – 1Q 2013 28

Northern Negros Geothermal Field

Manuel C. Paete Vice President, Leyte Geothermal Production

Field

Liberato S. Virata Vice President, Bacon-Manito Geothermal

Project

Wilfredo A. Malonzo Vice President for Supply Chain

Management

Maribel A. Manlapaz Comptroller

Teodorico Jose R. Delfin Corporate Secretary

Ana Maria A. Katigbak Assistant Corporate Secretary

Glenn L. Tee Senior Manager, Internal Audit

Erudito S. Recio Senior Manager, Investor Relations

EDC Geothermal Corporation (EGC)

First Gen Hydro Power Corporation (FGHPC)

EDC Wind Energy Holdings Inc.

(EWEHI)

EDC Holdings International Limited

(EHIL)

EDC Drillco Corporation (EDC Drillco)

• Green Core Geothermal Inc. (GCGI)

• Bac-Man Geothermal Inc. (BGI)

• Unified Leyte Geothermal Energy Inc. (ULGEI)

• Southern Negros Geothermal, Inc. (SNGI)

• EDC Mindanao Geothermal Inc. (EMGI)

• Bac-Man Energy Development Corporation

(BEDC) • Kayabon Geothermal, Inc.

(KGI)

Energy Development (EDC) Corporation Chile Limitada

EDC Pagudpod Wind Power Corporation (EPWPC)

Energy Development Corporation Hong Kong

Limited (EDC HKL)

Prime Terracotta Holdings Corporation

Red Vulcan Holdings Corporation

ID: 100%

D: 100% D: 100% D: 100% D: 100% D: 60%

ID: 100% D: 99.99% ID: 0.01%

Legend: D – Direct Ownership ID – Indirect Ownership E – Economic Interest V – Voting Interest

E: 40% V: 60%

E: 100% V: 100%

PT EDC Indonesia EDC Peru

Holdings S.A.C. EDC Chile

Holdings SPA PT EDC Panas Bumi

Indonesia

EDC Geotermica Chile SPA

EDC Geotermica Peru S.A.C.

EDC Quellaapacheta

ID: 100% ID: 100%

ID: 70%

ID: 95% ID: 95% ID: 100% ID: 100%

EDC Burgos Wind Power Corporation (EBWPC)

ID: 100% ID: 100%

1

ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan Holdings Corporation)

SUPPLEMENTARY SCHEDULE OF ALL EFFECTIVE STANDARDS

AND INTERPRETATIONS MARCH 31, 2013

PHILIPPINE FINANCIAL REPORTING STANDARDS

AND INTERPRETATIONS Effective as of March 31, 2013

Adopted Not

Adopted Not

Applicable

Framework for the Preparation and Presentation of

Financial Statements Conceptual Framework Phase A: Objectives and qualitative

characteristics

PFRSs Practice Statement Management Commentary

Philippine Financial Reporting Standards

PFRS 1

(Revised) First-time Adoption of Philippine Financial

Reporting Standards

Amendments to PFRS 1 and PAS 27: Cost of an

Investment in a Subsidiary, Jointly Controlled

Entity or Associate

Amendments to PFRS 1: Additional Exemptions

for First-time Adopters

Amendment to PFRS 1: Limited Exemption from

Comparative PFRS 7 Disclosures for First-time

Adopters

Amendments to PFRS 1: Severe Hyperinflation

and Removal of Fixed Date for First-time Adopters

Amendments to PFRS 1: Government Loans

PFRS 2 Share-based Payment

Amendments to PFRS 2: Vesting Conditions and

Cancellations

Amendments to PFRS 2: Group Cash-settled

Share-based Payment Transactions

PFRS 3

(Revised) Business Combinations

PFRS 4 Insurance Contracts

Amendments to PAS 39 and PFRS 4: Financial

Guarantee Contracts

PFRS 5 Non-current Assets Held for Sale and Discontinued Operations

2



Adopted Not

Adopted Not

Applicable

PFRS 6 Exploration for and Evaluation of Mineral Resources

PFRS 7 Financial Instruments: Disclosures

Amendments to PFRS 7: Transition



Adopted Not

Adopted Not

Applicable

Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets

Amendments to PAS 39 and PFRS 7:

Reclassification of Financial Assets - Effective

Date and Transition

Amendments to PFRS 7: Improving Disclosures

about Financial Instruments

Amendments to PFRS 7: Disclosures - Transfers of

Financial Assets

Amendments to PFRS 7: Disclosures - Offsetting

Financial Assets and Financial Liabilities*

Amendments to PFRS 7: Mandatory Effective

Date of PFRS 9 and Transition Disclosures*

PFRS 8 Operating Segments

PFRS 9 Financial Instruments*

Amendments to PFRS 9: Mandatory Effective

Date of PFRS 9 and Transition Disclosures*

PFRS 10 Consolidated Financial Statements*

PFRS 11 Joint Arrangements*

PFRS 12 Disclosure of Interests in Other Entities*

PFRS 13 Fair Value Measurement*

Philippine Accounting Standards

PAS 1

(Revised) Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures

Amendments to PAS 32 and PAS 1: Puttable

Financial Instruments and Obligations Arising on

Liquidation

Amendments to PAS 1: Presentation of Items of

3



Adopted Not

Adopted Not

Applicable

Other Comprehensive Income*

PAS 2 Inventories

PAS 7 Statement of Cash Flows

PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

PAS 10 Events after the Balance Sheet Date

PAS 11 Construction Contracts

PAS 12 Income Taxes

Amendment to PAS 12 - Deferred Tax: Recovery

of Underlying Assets

PAS 16 Property, Plant and Equipment

PAS 17 Leases

PAS 18 Revenue

PAS 19 Employee Benefits

Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures

PAS 19

(Amended) Employee Benefits*

PAS 20 Accounting for Government Grants and Disclosure of Government Assistance

PAS 21 The Effects of Changes in Foreign Exchange Rates

Amendment: Net Investment in a Foreign

Operation

PAS 23

(Revised) Borrowing Costs

PAS 24

(Revised) Related Party Disclosures

PAS 26 Accounting and Reporting by Retirement Benefit Plans

PAS 27

(Amended) Separate Financial Statements*

PAS 28

(Amended) Investments in Associates and Joint Ventures*

PAS 29 Financial Reporting in Hyperinflationary Economies

4



Adopted Not

Adopted Not

Applicable

PAS 31 Interests in Joint Ventures

PAS 32 Financial Instruments: Disclosure and Presentation

Amendments to PAS 32 and PAS 1: Puttable

Financial Instruments and Obligations Arising on

Liquidation

Amendment to PAS 32: Classification of Rights

Issues

Amendments to PAS 32: Offsetting Financial

Assets and Financial Liabilities*

PAS 33 Earnings per Share

PAS 34 Interim Financial Reporting

PAS 36 Impairment of Assets

PAS 37 Provisions, Contingent Liabilities and Contingent Assets

PAS 38 Intangible Assets

PAS 39 Financial Instruments: Recognition and Measurement

Amendments to PAS 39: Transition and Initial

Recognition of Financial Assets and Financial

Liabilities

Amendments to PAS 39: Cash Flow Hedge

Accounting of Forecast Intragroup Transactions

Amendments to PAS 39: The Fair Value Option

Amendments to PAS 39 and PFRS 4: Financial

Guarantee Contracts


Reclassification of Financial Assets


Reclassification of Financial Assets - Effective

Date and Transition

Amendments to Philippine Interpretation IFRIC-9

and PAS 39: Embedded Derivatives

Amendment to PAS 39: Eligible Hedged Items

PAS 40 Investment Property

PAS 41 Agriculture

5



Adopted Not

Adopted Not

Applicable

Philippine Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IFRIC 2 Members’ Share in Co-operative Entities and Similar Instruments

IFRIC 4 Determining Whether an Arrangement Contains a Lease

IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation

Funds

IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic

Equipment

IFRIC 7 Applying the Restatement Approach under PAS 29 Financial Reporting in Hyperinflationary

Economies

IFRIC 8 Scope of PFRS 2

IFRIC 9 Reassessment of Embedded Derivatives

Amendments to Philippine Interpretation

IFRIC - 9 and PAS 39: Embedded Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRIC 11 PFRS 2- Group and Treasury Share Transactions

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programmes

IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

Amendments to Philippine Interpretations

IFRIC- 14, Prepayments of a Minimum Funding

Requirement

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 17 Distributions of Non-cash Assets to Owners

IFRIC 18 Transfers of Assets from Customers

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine*

6



Adopted Not

Adopted Not

Applicable

SIC-7 Introduction of the Euro

SIC-10 Government Assistance - No Specific Relation to Operating Activities

SIC-12 Consolidation - Special Purpose Entities

Amendment to SIC - 12: Scope of SIC 12

SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers

SIC-15 Operating Leases - Incentives

SIC-21 Income Taxes - Recovery of Revalued Non-Depreciable Assets

SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease

SIC-29 Service Concession Arrangements: Disclosures.

SIC-31 Revenue - Barter Transactions Involving Advertising Services

SIC-32 Intangible Assets - Web Site Costs

*These standards, interpretations and amendments to existing standards will become effective subsequent to December 31, 2012.

The Company did not early adopt these standards, interpretations and amendments.

Annex I

Energy Development Corporation (A Subsidiary of Red Vulcan Holdings Corporation) and Subsidiaries

Unaudited Interim Condensed Consolidated Financial Statements March 31, 2013 and 2012 (With Comparative Figures as of December 31, 2012 )


AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED

STATEMENTS OF FINANCIAL POSITION

MARCH 31, 2013 AND 2012

(With Comparative Figures as of December 31, 2012)

March 31,

2013

(Unaudited)

December 31,

2012

(Audited)

March 31,

2012

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents (Notes 6 and 23) P=12,833,802,554 P=11,420,144,203 P=13,123,430,591

Trade and other receivables (Notes 7 and 23) 3,518,217,122 4,115,764,605 3,604,793,410

Available-for-sale (AFS) investments (Note 23) 365,653,397 132,345,200 649,830,260

Parts and supplies inventories (Note 8) 3,302,801,646 3,338,825,869 3,244,932,240

Derivative assets (Note 23) 4,966,968 248,760 – Other current assets 999,039,710 692,264,834 980,383,906

Total Current Assets 21,024,481,397 19,699,593,471 21,603,370,407

Noncurrent Assets

Property, plant and equipment – net (Note 9) 60,573,537,214 60,680,219,306 58,256,469,805

Intangible assets (Note 10) 4,849,634,478 4,818,403,979 4,713,967,976

Deferred tax assets – net 1,162,095,396 1,092,093,791 1,331,550,748

Exploration and evaluation assets 1,937,398,055 1,604,105,412 1,505,532,721

Available-for-sale investments 377,374,337 707,125,693 20,603,788

Other noncurrent assets – net (Note 11) 5,838,484,847 5,701,745,500 4,719,596,488

Total Noncurrent Assets 74,738,524,327 74,603,693,681 70,547,721,526

TOTAL ASSETS P=95,763,005,724 P=94,303,287,152 P=92,151,091,933

LIABILITIES AND EQUITY

Current Liabilities

Trade and other payables (Notes 12 and 23) P=7,472,337,560 P=7,694,918,122 P=8,710,058,490

Income tax payable 135,436,026 5,204,019 206,667,979

Due to related parties (Notes 22 and 23) 47,321,807 49,577,503 43,505,312

Royalty fee payable (Notes 13 and 23) 35,140,542 20,618,242 217,335,769

Current portion of:

Long-term debts (Notes 14 and 23) 2,386,683,319 2,393,871,767 2,229,209,718

Derivative liabilities (Note 23) 97,847,140 85,423,548 –

Total Current Liabilities 10,174,766,394 10,249,613,201 11,406,777,268

(Forward)

March 31,

2013

(Unaudited)

December 31,

2012

(Audited)

March 31,

2012

(Unaudited)

Noncurrent Liabilities

Long-term debts - net of current portion

(Notes 14 and 23) 46,568,683,441 46,656,000,099 48,065,147,168

Derivative liabilities - net of current

portion 132,869,735 153,500,314 – Net retirement and other post-

employment benefits 1,516,972,972 659,932,661 1,144,547,300

Provisions and other long-term

liabilities 1,132,339,729 1,150,385,989 723,793,331

Total Noncurrent Liabilities 49,350,865,877 48,619,819,063 49,933,487,799

Total Liabilities 59,525,632,271 58,869,432,264 61,340,265,067

Equity (Note 15)

Attributable to Equity Holders of the

Parent Company:

Preferred stock 93,750,000 93,750,000 93,750,000

Common stock 18,750,000,000 18,750,000,000 18,750,000,000

Common shares in employee trust

account (358,429,306) (358,429,306) (372,272,723)

Additional paid-in capital 6,277,865,786 6,277,865,786 6,266,966,828

Equity reserve (3,706,430,769) (3,706,430,769) (3,706,430,769)

Net accumulated unrealized gain on

AFS investments 113,818,008 111,522,725 80,075,239

Cumulative translation adjustment (121,440,085) (138,589,991) 633,539

Retained earnings 12,832,358,999 12,331,621,322 7,121,471,769

33,881,492,633 33,361,309,767 28,234,193,883

Non-controlling interest 2,355,880,820 2,072,545,121 2,576,632,983

Total Equity 36,237,373,453 35,433,854,888 30,810,826,866

TOTAL LIABILITIES AND

EQUITY P=95,763,005,724 P=94,303,287,152 P=92,151,091,933

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.


AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF INCOME

FOR THE PERIODS ENDED MARCH 31, 2013 AND 2012

2013 2012

SALE OF ELECTRICITY (Note 5) P=6,939,942,895 P=7,121,499,065

COSTS OF SALES OF ELECTRICITY (Note 16) (2,194,713,400) (2,326,047,310)

GENERAL AND ADMINISTRATIVE

EXPENSES (Note 17)

(838,912,721)

(913,299,598)

FINANCIAL INCOME (EXPENSES)

Interest income (Notes 5 and 20) 74,034,291 93,870,182

Interest expense (Notes 5 and 19) (839,944,221) (1,015,345,353)

(765,909,930) (921,475,171)

OTHER INCOME (CHARGES)

Foreign exchange gains - net (Note 18) 98,554,117 337,321,278

Derivatives gain (loss) – net (5,448,092) –

Miscellaneous – net (5,524,499) 59,427,673

87,581,526 396,748,951

INCOME BEFORE INCOME TAX 3,227,988,370 3,357,425,937

PROVISION FOR INCOME TAX

Current (239,835,347) (167,990,619)

Deferred (6,594,069) (89,105,723)

(246,429,416) (257,096,342)

NET INCOME FROM CONTINUING

OPERATIONS P=2,981,558,954 P=3,100,329,595

NET INCOME (LOSS) FROM

DISCONTINUED OPERATIONS (Note 4) – 46,529,213

NET INCOME P=2,981,558,954 P=3,146,858,808

Net income attributable to:

Equity Holders of the Parent Company P=2,698,223,255 P=2,699,276,655

Non-controlling interest 283,335,699 447,582,153

P=2,981,558,954 P=3,146,858,808

Basic/Diluted Earnings Per Share for Net Income

Attributable to Equity Holders of the Parent

Company (Note 21) P=0.144 P=0.144



AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED

STATEMENTS OF COMPREHENSIVE INCOME


2013 2012

Net Income P=2,981,558,954 P=3,146,858,808

Other comprehensive income

Unrealized gain (loss) on AFS investments 2,295,283 (11,683,676)

Cumulative translation adjustment 17,149,906 41,005

Total comprehensive income P=3,001,004,143 P=3,135,216,137

Total comprehensive income attributable to:

Equity Holders of the Parent Company P=2,717,668,444 P=2,687,633,984

Non-controlling interest 283,335,699 447,582,153

P=3,001,004,143 P=3,135,216,137



AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


Equity Attributable to Equity Holders of the Parent Company

Preferred

Stock

Common

Stock

Common

Shares in

Employee

Trust Account

Additional

Paid-in

Capital

Equity

Reserve

Net

Accumulated

Unrealized

Gain on AFS

Investments

Retained

Earnings Subtotal

Non-controlling

Interest Total Equity

Cumulative

Translation

Adjustment

Balances, December 31, 2011 P=93,750,000 P=18,750,000,000 (P=372,272,723) P=6,266,966,828 (P=3,706,430,769) P=91,758,915 P=592,534 P=6,304,695,114 P=27,429,059,899 P=2,217,541,594 P=29,646,601,493

Total comprehensive income:

Net income – – – – – – – 2,699,276,655 2,699,276,655 447,582,153 3,146,858,808

Changes in fair value of AFS investments

recognized in equity

–

–

–

–

– (11,683,676)

–

– (11,683,676)

– (11,683,676) Cumulative translation adjustment – – – – – – 41,005 – 41,005 – 41,005

– – – – – (11,683,676) 41,005 2,699,276,655 2,687,633,984 447,582,153 3,135,216,137

Cash dividend (Note 15) – – – – – – – (1,882,500,000) (1,882,500,000) (88,490,764) (1,970,990,764)

Balances, March 31, 2012 P=93,750,000 P=18,750,000,000 (P=372,272,723) P=6,266,966,828 (P=3,706,430,769) P=80,075,239 P=633,539 P=7,121,471,769 P=28,234,193,883 P=2,576,632,983 P=30,810,826,866

Balances, December 31, 2012 P=93,750,000 P=18,750,000,000 (P=358,429,306) P=6,277,865,786 (P=3,706,430,769) P=111,522,725 (P=138,589,991) P=12,331,621,322 P=33,361,309,767 P=2,072,545,121 P=35,433,854,888

Total comprehensive income:

Net income – – – – – – – 2,698,223,255 2,698,223,255 283,335,699 2,981,558,954

Changes in fair value of AFS investments

recognized in equity

–

–

–

–

– 2,295,283

–

– 2,295,283

– 2,295,283

Cumulative translation adjustment – – – – – – 17,149,906 – 17,149,906 – 17,149,906

– – – – – 2,295,283 17,149,906 2,698,223,255 2,717,668,444 283,335,699 3,001,004,143

Prior period adjustment- impact of PAS 19

(Note3) – – – – –

– – (689,361,078) (689,361,078) – (689,361,078)

Documentary stamp tax on common shares

subscription – – – – –

– – (624,500) (624,500) – (624,500)

Cash dividend (Note 15) – – – – – – – (1,507,500,000) (1,507,500,000) – (1,507,500,000)

Balances, March 31, 2013 P=93,750,000 P=18,750,000,000 (P=358,429,306) P=6,277,865,786 (P=3,706,430,769) P=113,818,008 (P=121,440,085) P=12,832,358,999 P=33,881,492,633 P=2,355,880,820 P=36,237,373,453



AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax from continuing operations P=3,227,988,370

P=3,357,425,937

Income (loss) before income tax from discontinued

operations –

66,470,304

Adjustments for:

Interest expense 839,944,223

1,015,345,353

Depreciation and amortization 889,248,222

897,498,990

Unrealized foreign exchange losses (gains) (118,082,162)

(439,037,301)

Interest income (74,034,291)

(93,870,182)

Provision for retirement and post-employment benefits 92,057,925

90,297,471

Recovery of impairment of property plant and

equipment –

(66,321,901)

Provision for doubtful accounts 8,580,142

1,003,830

Derivative loss (1,349,710)

Loss on retirement of property, plant and equipment (364,344)

(1,122,882)

Operating income before working capital changes 4,863,988,375

4,827,689,621

Decrease (increase) in:

Trade and other receivables 579,945,109

(144,522,954)

Parts and supplies inventories 71,819,758

110,835,413

Other current assets (248,382,603)

(204,971,055)

Due from related party –

7,812

Increase (decrease) in:

Trade and other payables (2,030,194,867)

435,577,892

Due to related parties (13,823,150)

(57,150,511)

Royalty fee payable 14,522,300 (74,987,732)

Cash generated from operations 3,237,874,922

4,892,478,486

Interest and financing charges paid (541,977,560)

(1,265,347,644)

Income tax paid (151,811,971)

(33,501,594)

Retirement and other post-retirement benefits paid (974,367)

12,573

Net cash flows from operating activities 2,543,111,024 3,593,641,821

(Forward)

2013 2012

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of property, plant and equipment (1,058,833,296)

(1,416,845,788)

Proceeds from incidental income from testing of PPE 299,366,077

– Proceeds from sale of property and equipment 15,279,493

71,863,569

Interest received 91,134,598

45,189,497

Decrease (increase) in:

Exploration and evaluation assets (333,292,643)

(418,453,308)

Other noncurrent assets (121,300,818)

(323,791,575)

Net cash flows from (used in) investing activities (1,107,646,589) (2,042,037,605)

CASH FLOWS FROM FINANCING ACTIVITIES

Payments of:

Long-term debts –

(798,852,453)

Cash dividends –

(88,490,765)

Increase in other long-term liabilities (24,385,806)

(40,508,508)

Net cash flows (used in) financing activities (24,385,806) (927,851,726)

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,411,078,629

623,752,490

EFFECT OF FOREIGN EXCHANGE RATE CHANGES

ON CASH AND CASH EQUIVALENTS 2,579,722

6,271,137

CASH AND CASH EQUIVALENTS AT BEGINNING OF

PERIOD 11,420,144,203 12,493,406,964

CASH AND CASH EQUIVALENTS AT END OF

PERIOD P=12,833,802,554 P=13,123,430,591



AND SUBSIDIARIES

SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

Energy Development Corporation [formerly Energy Development (EDC) Corporation] (the

“Parent Company” or “EDC”) is a subsidiary of Red Vulcan Holdings Corporation (Red Vulcan).

The Parent Company and its subsidiaries (collectively hereinafter referred to as the “Company”),

were separately incorporated and registered with the Philippine Securities and Exchange

Commission (SEC) except for Energy Development (EDC) Corporation Chile Limitada

(EDC Chile Limitada) which was incorporated in Santiago, Chile. Below are the Parent

Company’s ownership interests in its subsidiaries:

Percentage of Ownership

March 31, 2013 December 31, 2012

Direct Indirect Direct Indirect

EDC Drillco Corporation (EDC Drillco) 100.00 – 100.00 –

EDC Geothermal Corp. (EGC) 100.00 – 100.00 – Green Core Geothermal Inc. (GCGI)

– 100.00 – 100.00

Bac-Man Geothermal Inc. (BGI) – 100.00 – 100.00 Unified Leyte Geothermal Energy Inc.

(ULGEI) – 100.00 – 100.00 Southern Negros Geothermal, Inc. (SNGI)

*** – 100.00 – 100.00

EDC Mindanao Geothermal Inc. (EMGI)***

– 100.00 – 100.00

Bac-Man Energy Development Corporation

(BEDC)***

–

100.00 –

100.00

Kayabon Geothermal, Inc. (KGI)***

– 100.00 – 100.00

Energy Development (EDC) Corporation Chile

Limitada [EDC Chile Limitada] 99.99

0.01 99.99

0.01

EDC Holdings International Limited (EHIL)**

100.00 – 100.00 –

Energy Development Corporation Hong Kong

Limited (EDC HKL) **

– 100.00 – 100.00 EDC Chile Holdings SPA

* – 100.00 – 100.00

EDC Geotermica Chile* – 100.00 – 100.00

EDC Peru Holdings S.A.C. * – 100.00 – 100.00

EDC Geotermica Peru S.A.C. * – 100.00 – 100.00

EDC Quellaapacheta* – 70.00 – 70.00

PT EDC Indonesia* – 95.00 – 95.00

PT EDC Panas Bumi Indonesia* – 95.00 – 95.00

EDC Wind Energy Holdings, Inc. (EWEHI) 100.00 – 100.00 – EDC Burgos Wind Power Corporation (EBWPC) – 100.00 – 100.00 EDC Pagudpud Wind Power Corporation

(EPWPC)* –

100.00 –

100.00

First Gen Hydro Power Corporation (FG Hydro) 60.00 – 60.00 – *Incorporated in 2012 and has not yet started commercial operations.

**Incorporated in 2011and serves as an investment holding company.

***Incorporated in 2011 and has not yet started commercial operations.

- 2 -

History of Ownership

Beginning December 13, 2006, the common shares of EDC were listed and traded in the

Philippine Stock Exchange (PSE). Up to November 2007, EDC was controlled by the Philippine

National Oil Company (PNOC), a government-owned and controlled corporation, and the

PNOC EDC Retirement Fund.

On November 29, 2007, PNOC and PNOC EDC Retirement Fund sold their combined interests in

EDC to Red Vulcan (a Philippine corporation). Red Vulcan was then a wholly owned subsidiary

of First Gen Corporation (First Gen, a publicly listed Philippine corporation) through Prime

Terracota Holdings Corporation (Prime Terracota, a Philippine corporation). First Gen’s indirect

interest in EDC consists of 6.0 billion common shares and 7.5 billion preferred shares. Control

was then established through First Gen’s 60% indirect voting interest in EDC. Meanwhile, First

Philippine Holdings Corporation (First Holdings, a publicly listed Philippine corporation) directly

owns 66.2% of the common shares of First Gen. Accordingly, First Holdings became then the

ultimate parent of the Company.

On May 12, 2009, First Gen’s indirect voting interest in Red Vulcan was reduced to 45% with the

balance taken up by Lopez Inc. Retirement Fund (40%) and Quialex Realty Corporation (15%)

through the issuance of preferred shares by Prime Terracota. As a result of this transaction, Prime

Terracota replaced First Holdings as the ultimate parent of EDC effective May 12, 2009.

Nature of Operations

The Parent Company operates 12 geothermal energy projects in five Geothermal Service Contract

(GSC) areas, namely:

1. Bacon-Manito Geothermal Project (BMGP); 2. Mt. Apo Geothermal Project (MGP); 3. Northern Negros Geothermal Project (NNGP); 4. Southern Negros Geothermal Project (SNGP); and 5. Tongonan Geothermal Project (TGP).

These GSCs are entered into with the Department of Energy (DOE) pursuant to the provisions of

Presidential Decree 1442 (P.D. 1442). These GSCs were replaced by Geothermal Renewable

Energy Service Contracts (GRESCs) on October 23, 2009 in accordance with the provisions of

R.A. 9513 or the Renewable Energy Act of 2008 (RE Law).

Geothermal steam produced is delivered to the National Power Corporation (NPC) and fed to the

Parent Company’s and subsidiary’s power plants to produce electricity. EDC sells steam and

electricity to NPC under the Steam Sales Agreements (SSAs) and Power Purchase Agreements

(PPAs), respect

Documents

MA. CONCEPCION M. MAGDARAOG · 2013. 5. 10. · Energy Development Corporation 38th Floor, One Corporate Centre Building, Julia Vargas corner Meralco Avenue Ortigas Center, Pasig