May 8, Dear Ms. Vina:

Transcription

1 Energy Development Corporation 38 th Floor, One Corporate Centre Building, Julia Vargas corner Meralco Avenue Ortigas Center, Pasig 1605, Philippines Trunklines: +63 (2) (PLDT) / +63 (2) (Globe) May 8, 2017 VINA VANESSA S. SALONGA Head Issuer Compliance and Disclosure Department (ICDD) Philippine Dealing & Exchange Corp. 37/F, Tower 1, The Enterprise Center 6766 Ayala Ave. cor. Paseo de Roxas Makati City Dear Ms. Vina: In compliance with PDEx disclosure requirements, we submit the attached Energy Development Corporation (Consolidated) Quarterly Report for the period ended March 31, 2017 (SEC Form 17-Q).

2 SEC Number 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) (Telephone Number) March 31, 2017 (Quarter Ending) SEC FORM 17-Q (Form Type)

3 COVER SHEET 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 (Contact Person) (Company Telephone Number) S E C Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) (Secondary License Type, If Applicable) Dept. Requiring this Doc. Article I Amended Articles Number/Section Total Amount of Borrowings 680 P=36,540,868,807 P=32,949,625,260 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.

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5 PART 1: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Our unaudited consolidated financial statements for the three-month period ended March 31, 2017 have been prepared in accordance with Philippine Accounting Standards (PAS) 34, Interim Financial Reporting, 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 three-month period ended March 31, 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 and other renewable 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, or Company pertains to the Energy Development Corporation and its subsidiaries. "EDC" pertains to the Parent Company Energy Development Corporation. Additional information about the Company can be found on our corporate website SEC Form 17Q 1Q 2017

6 The following is a summary of the key sections of this MD&A: OVERVIEW OF OUR BUSINESS...4 Principal Products or Services... 4 Distribution methods of products or services... 4 Competition... 4 Dependence on one or a few major customers and identity of any such major customers... 6 New Products or Services... 8 FINANCIAL HIGHLIGHTS...8 RESULTS OF OPERATIONS...9 FINANCIAL CONDITION...13 CAPITAL AND LIQUIDITY RESOURCES...17 CASH FLOW...17 DISCUSSION ON THE SUBSIDIARIES...18 Green Core Geothermal Inc. (GCGI) Bac-Man Geothermal Inc. (BGI) EDC Burgos Wind Power Corporation (EBWPC) Unified Leyte Geothermal Energy Inc. (ULGEI) FG Hydro Power Corporation (FG Hydro) KEY PERFORMANCE INDICATORS...26 Commitments that will have an impact on the issuer s liquidity...27 Foreign Exchange Rate Volatility...27 Any events that will trigger direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation...27 CASH DIVIDENDS...27 MAJOR STOCKHOLDERS...28 BOARD OF DIRECTORS...28 OFFICERS...29 SEC Form 17Q 1Q 2017

7 OVERVIEW OF OUR BUSINESS Principal Products or Services The Company operates in the four geothermal service contract areas where it is principally involved in the generation and sale of electricity through Company-owned geothermal power plants to NPC, electric cooperatives, privately-owned distribution utilities (DUs), large industrial clients, and National Grid Corporation of the Philippines (NGCP), pursuant to Power Purchase Agreements (PPAs), Wholesale Electricity Spot Market (WESM), Ancillary Services Provider (ASP), and Feed-in Tariff (FIT), respectively. EDC s subsidiaries, Green Core Geothermal Inc. (GCGI) and Bac-Man Geothermal Inc. (BGI), also hold offtake agreements in the form of Power Supply Contracts (PSCs) and Power Supply Agreements (PSAs) with various customers, particularly electric cooperatives. Through its 60% equity interest in First Gen Hydro Power Corporation (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 distribution utilities clients covered by bilateral contract quantities. The Company has evolved into being the country s premier pure renewable energy player, possessing interests in geothermal, hydro, wind and solar 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. Its wind energy expertise covers project research & development and wind data assessment. 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. The Company also operates the Burgos Solar Project (Phases 1 and 2), which is inside the same concession area as EDC Burgos Wind Power Corporation (EBWPC) wind farm. Distribution methods of products or services About 45.5% or 1,039.2 GWh of the 2,285.6 GWh sales volume from its electricity business was sold to NPC by Unified Leyte and Mindanao 1 and 2 Power Plants. About 23.4% or GWh sales volume was sold to electric cooperatives, industrial customers and WESM in the Visayas region by the Palinpinon, Tongonan and Nasulo geothermal plants. About 11.1% or GWh sales volume was sold to electric cooperatives, industrial customers and WESM in the Luzon region by Bac-Man geothermal power plants. FG Hydro's electricity generation of GWh was sold to WESM in the Luzon region and distribution utility clients in Nueva Ecija. Ancillary services of 59.6 GWh was sold to NGCP. Burgos wind and solar power plants generated GWh and 2.7 GWh of electricity, respectively, which were sold under the Feed-In-Tariff (FIT) regime. ULGEI s 93.2 GWh strips of energy were contracted out. Competition The Government, in implementing the thrust of the EPIRA, has paved the way for a more independent and market-driven Philippine power industry. As such, selling power and consequently the dispatch of SEC Form 17Q 1Q

8 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 could potentially compete against the Company include KEPCO Power Corporation, CalEnergy International Services, Inc., Marubeni Energy Corporation, and AES Corporation. Aboitiz group and San Miguel group are the Company s two closest competitors. For wind power, its closest competitor is North Luzon Renewable Energy Corporation, which operates the Caparispisan Wind Farm in Pagudpud, Ilocos Norte in addition to the following: Alterenergy Philippines Holdings Corporation, Petrowind Energy, Inc., Trans-Asia Renewable Energy Corp., and Northwind Power Development Corporation. For solar energy an estimated capacity of 540 MW had been installed in the country [1]. The major players in solar industry are Helios Solar Energy Corp. (formerly Phil-Power Solar Energy Corp.), Solar Philippines Calatagan Corporation, PetroSolar Corporation, San Carlos Solar Energy Inc., and Majestics Energy Corporation, among others. EDC, for its part, operates the Burgos Solar Phases 1 & 2 for a combined capacity of 6.82 MW. Further to clauses in the EPIRA Law entitled Retail Competition and Open Access (RCOA), a new electricity buyer group consisting of individual retail customers has emerged with the DOE providing the following timelines recently [2]. Jun. 26, 2016 Voluntary compliance for those below 1 MW to greater than 750 KW Dec. 26, 2016 Mandatory compliance for those with 1 MW and greater Jun. 26, 2017 Mandatory compliance for those below 1 MW to greater than 750 KW Retail competition means that eligible electricity customers (or retail customers) may themselves contract for the supply of electricity with authorized suppliers, rather than through the franchised distribution facility. Open Access, on the other hand, means that retail electricity customers and suppliers of electricity may also contract with the transmission company and the distribution company for the wheeling or delivery of energy/electricity through the transmission or distribution wires. Open Access is thus the means by which Retail Competition is achieved [3]. 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] Source: DOE Website: [2] Source: DOE Department Circular [3] Source: The Energy Report Philippines Ed, KPMG Global Energy Institute SEC Form 17Q 1Q

9 Dependence on one or a few major customers and identity of any such major customers Close to 37.3% of the Company s electricity revenue are derived from existing long-term Power Purchase Agreements (PPAs) with NPC. Concessions As of March 31, 2017, the Company holds the following service contracts. Geothermal Resource The five (5) geothermal service contract areas where EDC s geothermal production steam fields are located are: Tongonan Geothermal Project Southern Negros Geothermal Project Bacon-Manito Geothermal Project Mt. Apo Geothermal Project Northern Negros Geothermal Project The Company, through its subsidiaries Green Core Geothermal Inc. (GCGI) and Bac-Man Geothermal Inc. (BGI) secured three (3) Geothermal Operating Contracts covering power plant operations: Tongonan Geothermal Power Plant (with a twenty-five (25) year contract period expiring in 2037, renewable for another twenty-five (25) years) Palinpinon Geothermal Power Plants (with a twenty-five (25) year contract period expiring in 2037, renewable for another twenty-five (25) years) Bacon-Manito Geothermal Power Plants (with a twenty-five (25) year contract period expiring in 2037, renewable for another twenty-five (25) years) The Company also holds Geothermal Renewable Energy Service Contracts (GRESC) for the following prospect areas: Mandalagan Geothermal Project (with a five-year pre-development period expiring in 2017, 25-year contract period expiring in 2037, renewable for another twenty-five (25) years) Mt. Zion Geothermal Project (with a five-year pre-development period expiring in 2017, 25-year contract period expiring in 2037, renewable for another twenty-five (25) years) Balingasag Geothermal Project (with a five-year pre-development period expiring in 2017, 25-year contract period expiring in 2037, renewable for another twenty-five (25) years) Mt. Zion 2 Geothermal Project (with a five-year pre-development period expiring in 2020, 25-year contract period expiring in 2040, renewable for another twenty-five (25) years) Amacan Geothermal Project (with a five-year pre-development period expiring in 2021, 25-year contract period expiring in 2041, renewable for another twenty-five (25) years) SEC Form 17Q 1Q

10 Wind Resource The Company holds ten (10) Wind Energy Service Contracts (WESC) with the DOE. The WESCs are for the following projects: 150-MW Wind Project in Burgos, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2034; renewable for another twentyfive (25) years) 84-MW Wind Project in Pagudpud, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2035; renewable for another twentyfive (25) years) Burgos 1 Wind Project in Burgos, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2038; renewable for another twentyfive (25) years) Burgos 2 Wind Project in Burgos, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2038; renewable for another twenty-five (25) years) Matnog 1 Wind Project in Matnog and Magdalena, Sorsogon; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2039; renewable for another twenty-five (25) years) Matnog 2 Wind project in Matnog, Sorsogon; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2039; renewable for another twenty-five (25) years) Matnog 3 Wind Project in Matnog, Sorsogon; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2039; renewable for another twenty-five (25) years) Iloilo 1 Wind Project in Batad and San Dionisio, Iloilo; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2039; renewable for another twenty-five (25) years) Burgos 3 Wind Project in Burgos and Pasuquin, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2040; renewable for another twenty-five (25) years) Burgos 4 Wind Project in Burgos, Ilocos Norte; under DOE Certificate of Registration No. WESC (25-year contract period expiring in 2040; renewable for another twenty-five (25) years) Solar Resource The Company holds four (4) Solar Energy Service Contracts (SESC) with the DOE. The SESCs cover areas in the following: 4.16-MW Phase 1 and 2.66-MW Phase 2 Burgos Solar Project, Ilocos Norte; under DOE Certificate of Registration No. SESC (25-year contract period expiring in 2039; renewable for another twenty-five (25) years) Bogo Solar Project in Bogo, Cebu; under SESC No (25-year contract period expiring in 2040; renewable for another twenty-five (25) years) Iloilo Solar Project in Iloilo City; under SESC No (25-year contract period expiring in 2041; renewable for another twenty-five (25) years) Gaisano Iloilo Solar Rooftop Project ; under SESC No (25-year contract period expiring in 2041; renewable for another twenty-five (25) years) SEC Form 17Q 1Q

11 New Products or Services On January 11, 2017 Energy Development Corporation (EDC) and Gaisano Capital successfully inaugurated the 1.03-MW solar rooftop system in Gaisano Capital s mall in La Paz District, Iloilo City. The solar rooftop system, currently the largest in the province, can supply up to 50% of the mall s daytime load resulting in significant savings in electricity cost for Gaisano Capital. On March 1, 2016, the Energy Regulatory Commission (ERC) issued to EDC the Certificate of Compliance (COC) for the Burgos Solar Power Plant Phase 2. The COC specifies that the project, having a total capacity of 2.66 MW is entitled to the Feed-In Tariff (FIT) rate of P8.69, subject to adjustments as may be approved by the ERC, from January 19, 2016 to January 18, On January 19, 2016, the Company s 2.66 MW Burgos Solar Project Phase 2 commenced commercial operation. The project is geographically situated in Barangay Saoit, Burgos Ilocos Norte, inside the EBWPC s wind farm. FINANCIAL HIGHLIGHTS March 2017 vs. March 2016 (restated) Results During the first quarter of 2017, recurring net income attributable to equity holders of the Parent Company was posted at P3,249.7 million, up by 23.5% as compared to the P2,631.2 million for the same period in The recurring net income generated increased by 18.9% or P543.2 million to P3,414.7 million from the P2,871.5 million posted during the same period in The increase is mainly attributable to the P516.0 million increase in revenues primarily due to Burgos Wind and BGI s operations and P300.3 million combined decrease in general and administrative expenses and financial expenses offset by the P319.5 million combined increase in cost of sales of electricity and provision for income tax. The Company posted a net income of P3,257.2 million in the first quarter of 2017, an 0.9% or P28.2 million decrease from the P3,285.4 million in the three-month period ended March 31, The movement was driven by the P216.5 million increase in costs of sale of electricity offset by the P154.8 million decrease in general and administrative expenses. Net income is equivalent to 33.9% of total revenues for the quarter ended March 31, 2017 as compared to the 36.1% for the same period in Net income attributable to equity holders of the Parent Company at P3,085.7 million for the first quarter of 2017 is a P40.8 million increase from P3,044.9 million during the same period in SEC Form 17Q 1Q

12 RESULTS OF OPERATIONS The following table details the results of operations of the Company for the first three months of 2017 and STATEMENTS OF INCOME Horizontal and Vertical Analysis of Material Changes as of March 31, 2017 and 2016 (restated) HORIZONTAL ANALYSIS VERTICAL ANALYSIS Favorable (Unfavorable) Variance (Amounts in PHP millions) March 2017 March 2016 (restated)* Amount % REVENUE Sale of electricity 9, , % 100.0% 100.0% COSTS OF SALE OF ELECTRICITY Costs of sale of electricity (3,432.5) (3,216.0) (216.5) -6.7% -35.7% -35.4% GENERAL AND ADMINISTRATIVE EXPENSES (1,210.2) (1,365.0) % -12.6% -15.0% FINANCIAL INCOME (EXPENSE) Interest income (14.2) -20.0% 0.6% 0.8% Interest expense (1,040.5) (1,200.2) % -10.8% -13.2% (983.6) (1,129.1) % -10.2% -12.4% OTHER INCOME (CHARGES) Foreign exchange losses net (137.2) (386.6) % -1.4% 2.7% Proceeds from insurance claims (87.4) -93.1% 0.1% 1.0% Miscellaneous, net (35.3) 15.7 (51.0) % -0.4% 0.2% (166.0) (525.0) % -1.7% 3.9% INCOME BEFORE INCOME TAX 3, , % 39.7% 41.2% BENEFIT FROM (PROVISION FOR) INCOME TAX Current (507.1) (432.1) (75.0) -17.4% -5.3% -4.8% Deferred (55.7) (27.7) (28.0) % -0.6% -0.3% (562.8) (459.8) (103.0) -22.4% -5.9% -5.1% NET INCOME 3, ,285.4 (28.2) -0.9% 33.9% 36.1% Net income attributable to: Equity holders of the Parent Company 3, , % 32.1% 33.5% Non-controlling interest (69.1) -28.7% 1.8% 2.6% EBITDA 6, , % 67.7% 64.5% RECURRING NET INCOME 3, , % 35.5% 31.6% Recurring net income attributable to: Equity holders of the Parent Company 3, , % 33.8% 28.9% Non-controlling interest (75.3) -31.3% 1.7% 2.6% * Note: Effective January 1, 2016, the functional currency of EBWPC was changed from PHP to USD to reflect the economic environment in which it operates. SEC Form 17Q 1Q

13 YTD March 31, 2017 vs. YTD March 31, 2016 (restated) Revenue Total revenue from sale of electricity for the quarter ended March 31, 2017 increased by 5.7% or P516.0 million to P9,612.3 million from P9,096.3 million during the same period in The improvement was principally driven by the P465.1 million increase in combined revenue contribution of Burgos Wind (P303.4 million) and BGI (P161.7 million) power generating units. Costs of Sale of Electricity Costs of sale of electricity increased by 6.7% or P216.5 million to P3,432.5 million for the period ended March 31, 2017 from P3,216.0 million during the same period in 2016 mainly due to the following: P160.4 million purchased services and utilities; P94.2 million depreciation and amortization; P51.7 million repairs and maintenance; and P38.6 million parts and supplies issued. The aforementioned were mainly offset by P131.9 million reduction in personnel costs. General and Administrative Expenses General and administrative expenses decreased by 11.3% or P154.8 million to P1,210.2 million in the first quarter of 2017 from P1,365.0 million during the same period in 2016 mainly due to the decline of the following: P208.3 million personnel costs; and P43.5 million purchased services and utilities. The aforementioned were mainly offset by P77.9 million combined increase in provision for doubtful accounts and provision for impairment of parts and supplies inventories. Financial Income (Expense) Financial expenses - net decreased by 12.9% or P145.5 million to P983.6 million for the period ended March 31, 2017 from P1,129.1 million during the same period in Interest Income Interest income decreased by 20.0% or P14.2 million to P56.9 million for the quarter ended March 31, 2017 from P71.1 million during the same period in 2016 attributed to lower interest income on funds invested. Interest Expense Interest expense decreased by 13.3% or P159.7 million to P1,040.5 million for the quarter ended March 31, 2017 from P1,200.2 million during the same period in The favorable variance is mainly due to the decrease in the Company s total debt. SEC Form 17Q 1Q

14 Other Income (Charges) Other charges for the first quarter of 2017 amounted to P166.0 million, 146.2% or a P525.0 million turnaround from P359.0 million other income during the same period in Foreign exchange gains (losses) - net Foreign exchange losses - net for the three-month period ended March 31, 2017 amounted to P137.2 million, a P386.6 million turnaround from P249.4 million foreign exchange gains - net during the same period in The variance was mainly brought about by the depreciation of PHP against US$ for the quarter ended March 31, The comparative foreign exchange rates were as follows: PHP:US$ December 31, March 31, December 31, March 31, Proceeds from insurance claims Proceeds amounting to P6.5 million were received during the first quarter of 2017, a 93.1% or P87.4 million lower than the claims P93.9 million received during the same period in These claims were due to various typhoon damages. Miscellaneous, net Miscellaneous charges - net for the quarter ended March 31, 2017 amounted to P35.3 million, or a P51.0 million turnaround from the miscellaneous income - net of P15.7 million during the same period in The movement was mainly due to absence of derivative gains in 2017 (P26.7 million in 2016) coupled with a P15.8 million drop in mark to market gain of financial asset. Provision for Income Tax Current The Company s current tax expense increased by 17.4% or P75.0 million to P507.1 million for the quarter ended March 31, 2017 from P432.1 million during the same period in 2016 mainly on account of higher taxable income. Deferred Deferred income tax for the first quarter of 2017 amounted to P55.7 million, a 101.1% or a P28.0 million increase from the P27.7 million during the same period in 2016 mainly due to the reduction of deferred tax asset attributable to foreign exchange gains / losses of foreign long-term loans. SEC Form 17Q 1Q

15 Net Income As a result of the foregoing, the Company s net income decreased by 0.9% or P28.2 million to P3,257.2 million for the first quarter of 2017 from P3,285.4 million net income during the same period in Net income is equivalent to 33.9% of total revenue for the period ended March 31, 2017 as compared to 36.1% for the same period in SEC Form 17Q 1Q

16 FINANCIAL CONDITION The following table details the financial condition of the Company as of March 31, 2017 and December 31, STATEMENT OF FINANCIAL POSITION Horizontal and Vertical Analysis of Material Changes as of March 31, 2017 and December 31, 2016 HORIZONTAL ANALYSIS VERTICAL ANALYSIS March 2017 December 2016 Amount % (Amounts in PHP millions) ASSETS Current Assets Cash and cash equivalents 13, , , % 10.0% 7.8% Financial asset at fair value through profit or loss 1, , % 0.7% 0.7% Trade and other receivables 7, ,788.6 (769.9) -9.9% 5.1% 5.7% Parts and supplies inventories 3, , % 2.6% 2.6% Due from related parties % 0.1% 0.0% Derivative assets % 0.3% 0.3% Other current assets 2, , % 1.7% 1.5% Total Current Assets 28, , , % 20.6% 18.8% Noncurrent Assets Property, plant and equipment 91, ,932.0 (457.9) -0.5% 66.0% 67.7% Exploration and evaluation assets 3, , % 2.2% 2.3% Goodwill and intangible assets 4, ,133.0 (32.4) -0.8% 3.0% 3.0% Deferred tax assets net 1, ,121.2 (39.2) -3.5% 0.8% 0.8% Available-for-sale (AFS) investments (8.7) -1.2% 0.5% 0.5% Derivative assets % 0.1% 0.1% Other noncurrent assets 9, , % 6.8% 6.8% Total Noncurrent Assets 110, ,315.8 (254.1) -0.2% 79.4% 81.2% TOTAL ASSETS 138, , , % 100.0% 100.0% LIABILITIES AND EQUITY LIABILITIES Current Liabilities Trade and other payables 11, , , % 8.3% 7.2% Due to related parties % 0.1% 0.0% Income tax payable % 0.5% 0.1% Current portion of: Long-term debts 10, , , % 7.9% 5.6% Derivative liabilities % 0.0% 0.0% Total Current Liabilities 23, , , % 16.8% 12.9% Noncurrent Liabilities Long-term debts - net of current portion 58, ,229.0 (3,737.2) -6.0% 42.2% 45.8% Derivative liabilities - net of current portion % 0.1% 0.1% Net retirement and other post-employment benefits 1, , % 0.9% 0.9% Deferred tax liabilities % 0.0% 0.0% Provisions and other long-term liabilities 1, , % 1.4% 1.4% Total Noncurrent Liabilities 61, ,477.5 (3,598.4) -5.5% 44.6% 48.2% EQUITY Equity Attributable to Equity Holders of the Parent Preferred stock % 0.1% 0.1% Common stock 18, , % 13.5% 13.8% Treasury Stock (73.5) (73.5) - 0.0% -0.1% -0.1% Common shares in employee trust account (350.2) (350.2) - 0.0% -0.3% -0.3% Additional paid-in capital 6, , % 4.5% 4.6% Equity reserve (3,706.4) (3,706.4) - 0.0% -2.7% -2.7% Net accumulated unrealized gain on AFS investments (8.7) -8.5% 0.1% 0.1% Fair value adjustments on hedging transactions (45.4) 1.0 (46.4) -4,640.0% 0.0% 0.0% Cumulative translation adjustment % 0.4% 0.4% Retained earnings 30, , % 21.7% 21.8% 51, , % 37.2% 37.7% Non-controlling interests 1, , % 1.3% 1.2% Total Equity 53, , % 38.5% 38.9% TOTAL LIABILITIES AND EQUITY 138, , , % 100.% 100.0% SEC Form 17Q 1Q

17 Cash and cash equivalents Cash and cash equivalents increased by 30.8% or P3,260.6 million to P13,860.4 million as of March 31, 2017 from the P10,599.8 million in December 31, The increase was primarily attributable to the P5,968.8 million net cash generated from operating activities. The aforementioned were mainly offset by the following: P952.6 million acquisition of property, plant and equipment; P845.3 million payments of interest and other financing charges; and P659.2 million principal re-payments of long-term debts. Trade and other receivables Trade and other receivables decreased by 9.9% or P769.9 million to P7,018.7 million as of March 31, 2017 from P7,788.6 million balance as of December 31, 2016 mainly due to collection of trade receivable. Due from related parties This account increased by 118.7% or P70.5 million to P129.9 million as of March 31, 2017 from P59.4 million mainly on account of advances to First Gen Energy Solutions. Other current assets This account increased by 15.9% or P329.7 million to P2,403.0 million as of March 31, 2017 from the P2,073.3 million balance in December 31, 2016 was primarily due to increase in unapplied withholding tax certificates. Derivative Asset Increase (Decrease) March 31, 2017 December 31, 2016 Amount % Current % Noncurrent % % This account increased by 4.3% or P25.4 million to P612.7 million as of March 31, 2017 from P587.3 million balance as of December 31, 2016 mainly due to the valuation adjustments for the period. Trade and other payables This account increased by 18.4% or P1,787.7 million to P11,520.8 million as of March 31, 2017 from the P9,733.1 million balance as of December 31, 2016 due to dividend payable accrued for common and preferred stockholders. Due to related parties This account increased by 387.4% or P141.0 million to P177.4 million as of March 31, 2017 from P36.4 million as of December 31, 2016 was mainly due to dividend payable to First Gen Corporation. SEC Form 17Q 1Q

18 Income tax payable The increase in Income tax payable is due to the higher income tax expense for the period. Derivative liability Increase (Decrease) March 31, 2017 December 31, 2016 Amount % Current % Noncurrent % % The increase of 24.7% or P25.1 million to P126.9 million from P101.8 million is mainly due to valuation adjustment for the period. Long-term debt Increase (Decrease) March 31, 2017 December 31, 2016 Amount % Current 10, , , % Noncurrent 58, ,229.0 (3,737.2) -6.0% 69, ,833.0 (342.5) -0.5% The decrease in long-term debt of 0.5% or P342.5 million to P69,490.5 million from P69,833.0 million pertains mainly to payment of principal amortization. Net retirement and other post-retirement benefit The 5.7% increase or P69.3 million to P1,281.5 million as of March 31, 2017 from P1,212.2 million as of December 31, 2016 mainly due to retirement expense provision recognized during the period. Net accumulated unrealized gain on AFS investments This account decreased by 8.5% or P8.7 million to P93.8 million as of March 31, 2017 and P102.5 million as of December 31, The decrease is mainly due to fair value of AFS investments for the period. Deferred tax liabilities This account increased by 38.9% or P12.6 million to P45.0 million as of March 31, 2017 from P32.4 million balance as of December 31, 2016 mainly due to the reduction of deferred tax asset attributable to foreign exchange gains / losses of foreign long-term loans. Fair value adjustments on hedging transactions The decrease of P=46.4 million is mainly due to the fair value adjustments on hedging transactions. SEC Form 17Q 1Q

19 Retained earnings The increase of 1.5% or P453.4 million to P30,050.5 million as of March 31, 2017 from P29,597.1 million as of December 31, 2016 was mainly due to the P3,085.7 million net income attributable to the equity holders of the Parent, partly reduced by P2,631.2 million cash dividend declared. Non-controlling interests Non-controlling interest increased by 10.6% or P170.4 million to P1,774.4 million as of March 31, 2017 from the P1,604.0 million balance as of December 31, 2016 due to the net income attributable to non-controlling interests of P171.5 million offset by the P1,046.1 million remeasurements of retirement and other post-employment benefits and P142.8 million total cash dividend paid during the period. SEC Form 17Q 1Q

20 CAPITAL AND LIQUIDITY RESOURCES As of March 31 (in millions of pesos) (restated) YoY change Statement of Financial Position Data Total Assets 138, , ,098.8 Total Liabilities 85, ,237.2 (5,007.9) Total Stockholder s Equity 53, , ,106.7 The Company s assets as of March 31, 2017 amounted to P138,627.0 million, 0.8% higher as compared to the P137,528.2 million level as of March 31, CASH FLOW YTD March 31, 2017 vs. YTD March 31, 2016 (restated) Net cash flows from operating activities increased by P2,653.3 million to P5,968.8 million for the period ended March 31, 2017 from P3,315.5 million during the same period in 2016 mainly due to higher operating revenue offset by lower operating expenses. Net cash flows used in investing activities decreased by 17.5% or P255.2 million to P1,205.3 million for the quarter ended March 31, 2017 as compared to the P1,460.5 million during the same quarter in 2016 primarily due to lower capital expenditures. Net cash flows from financing activities for the three-month period ended March 31, 2017 amounted to P1,504.4 million, a P76.8 million decrease from the P1,581.2 million net cash flows used during the same period in 2016 primarily due to dividends payable partly offset by higher loan proceeds. SEC Form 17Q 1Q

21 DISCUSSION ON THE SUBSIDIARIES Green Core Geothermal Inc. (GCGI) (Amounts in PHP millions) For the periods ended March Revenue 2, ,697.9 Cost of sale of electricity (1,727.0) (2,016.2) General and administrative expenses (126.9) (103.0) Other income (charges) - net (91.7) (104.5) Income before income tax Provision for income tax (125.3) (91.8) Net income As of March 31, 2017 December 31, 2016 (audited) Total current assets 2, ,089.1 Total noncurrent assets 12, ,037.7 Total current liabilities 3, ,751.8 Total noncurrent liabilities 5, ,945.4 Total equity 5, ,429.6 GCGI s revenue decreased by 6.0% or P163.1 million, to P2,534.8 million as of March 31, 2017 from P2,697.9 million for the same period in The decrease was largely due to lower sales volume by 67.8 GWh. Cost of sale of electricity decreased by 14.3% or P289.2 million, to P1,727.0 million in 2017 from P2,016.2 million in The decrease was due to lower cost of steam (P205.7 million), and repairs & maintenance (P52.2 million). General and administrative expenses increased by 23.2% or P23.9 million, to P126.9 million in 2017 from P103.0 million in The increase was due to higher provision for doubtful accounts (P18.1 million), and purchased services & utilities (P6.5 million). Other charges net decreased by 12.2% or P12.8 million, to P91.7 million in 2017 from P104.5 million in The favorable variance was mainly due to lower interest expense on long-term debt (P14.1 million) offset by lower interest income (P2.2 million). With the foregoing, net income increased by 21.3% or P81.5 million, to P463.9 million in 2017 from P382.4 million in Total current assets decreased by 8.7% or P269.1 million, to P2,820.0 million as of March 31, 2017 from P3,089.1million balances as of December 31, The decrease was due to lower other current assets (P307.8 million) and trade & other receivables (P205.6 million) offset by higher cash & cash equivalents (P173.4 million), parts & supplies inventories (P37.2 million), and amount of due from related parties (P33.8 million). Total current liabilities decreased by 6.4% or P238.4 million, to P3,513.4 million as of March 31, 2017 from P3,751.8 million as of December 31, The decrease was attributed to lower trade & other payables (P373.9 million) offset by higher income tax payable (P122.7 million). SEC Form 17Q 1Q

22 Total noncurrent liabilities decreased by 8.5% or P504.1 million, to P5,441.3 million as of March 31, 2017 from P5,945.4 million as of December 31, 2016 due to this period s repayment of loan (P=510.0 million). Total equity increased by 8.6% or P464.5 million, to P5,894.1 million as of March 31, 2017 from P5,429.6 million as of December 31, 2016 due to this year s net income (P463.9 million). SEC Form 17Q 1Q

23 Bac-Man Geothermal Inc. (BGI) For the periods ended March 31 (Amounts in PHP millions) Revenues Cost of sales (860.4) (703.8) General and administrative expenses (39.8) (13.2) Other income (charges)-net (66.0) 13.7 Income before income tax Provision for income tax Net income As of March 31, 2017 December 31, 2016 (audited) Total current assets 1, ,181.9 Total noncurrent assets 5, ,341.2 Total current liabilities 2, ,960.7 Total noncurrent liabilities 3, ,787.5 Total Equity Revenues increased by 40.9% or P=289.6 million, to P=997.3 million during the first quarter of 2017 from P=707.7 million for the same period in The favorable variance was primarily contributed by higher average price by PhP0.9377/kWh because of the increased BCQs. Cost of sales increased by 22.3% or P=156.6 million, to P=860.4 million from P=703.8 million for the same period in The increase was primarily due to higher steam costs and depreciation and amortization. General and administrative expenses increased by 201.5% or P=26.6 million, to P=39.8 million from P=13.2 million for the same period in The increase was mainly due to higher purchased services and utilities of P=20.8 million and provision for impairment of input VAT claims from BIR by P=4.1 million. Purchase services and utilities in 2016 were lower because of legal fees collected arising from arbitration. This year s other charges-net of P=66.0 million was a reversal of P=13.7 million other income-net for the same period in The unfavorable variance was mainly contributed by the absence this period of P=81.9 million insurance proceeds for machinery breakdown claims received in 2016 and lower foreign exchange loss-net by P=4.2 million partly offset by higher interest charges by P=4.9 million. Total current assets increased by 15.9% or P=188.2 million, to P=1,370.1 million as of March 31, 2017 from P=1,181.9 million as of December 31, The increase was primarily due to the increase of other current assets by P=208.1 million mainly from additional fund for debt service reserve account, increase of trade and other receivables by P=104.3 million and increase of due from related parties by P=65.1 million partly offset by decrease of cash and cash equivalents by P=197.1 million because of restricting additional fund for debt service reserve account. Total non-current assets decreased by 1.4% or P=74.6 million, to P=5,266.6 million as of March 31, 2017 from P=5,341.2 million as of December 31, The decrease was traceable to the decrease of property, plant and equipment by P=81.4 million mainly on account of depreciation for this period partly offset by increase of other non-current assets by P=6.9 million. SEC Form 17Q 1Q

24 Total current liabilities increased by 4.0% or P=78.5 million, to P=2,039.2 million as of March 31, 2017 from P=1,960.7 million as of December 31, The increase was mainly due to increase of trade and other payables by P=60.0 million and increase of due to related parties by P=18.4 million. Total non-current liabilities increased by 0.1% or P=3.8 million, to P=3,791.3 million as of March 31, 2017 from P=3,787.5 million as of December 31, The increase was primarily due to increase of long-term debts by P=2.4 million pertaining to the amortization of deferred financing costs and increase of net retirement and other post-employment liability by P=1.5 million. Total equity increased by 4.8% or P=31.3 million, to P=806.2 million as of March 31, 2017 from P=774.9 million as of December 31, The increase was contributed by the net income earned during the period. SEC Form 17Q 1Q

25 EDC Burgos Wind Power Corporation (EBWPC) For the periods ended March 31 (Amounts in USD millions) Revenue Costs of sale of electricity (8.5) (6.7) General and administrative expenses (0.4) (0.7) Other charges net (3.8) (6.3) Income before income tax Provision for income tax (0.3) 0.2 Net Income As of March 31, 2017 December 31, 2016 (audited) Total current assets Total noncurrent assets Total current liabilities Total noncurrent liabilities Total equity EBWPC reported $24.5 million revenue from sale of electricity for the year ended March 31, 2017 from $19.4 million for the same period in This is 26.3% or $5.1 million increase mainly due to higher actual generated sales volume. Costs of sale of electricity increased by 26.9% or $1.8 million, to $8.5 million as of March 31, 2017 from $6.7 million for the same period in The unfavorable variance was mainly due to higher repair and maintenance ($2.5 million) and rental, insurance and taxes ($0.3 million). These were partly offset by lower purchased services and utilities ($1.2 million). General and administrative expenses decreased by 42.9% or $0.3 million, to $0.4 million as of March 31, 2017 from $0.7 million for the same period in This was mainly due to lower materials and supplies ($0.2 million) and purchase services and utilities ($0.1 million). Other charges - net decreased by 39.7% or $2.5 million, to $3.8 million as of March 31, 2017 from $6.3 million for the same period in This was mainly due to higher foreign exchange gain of $2.5 million, to actual foreign exchange gain of $0.4 million which was a turnaround from foreign exchange loss of $2.1 million in the same period last year. Total current assets increased by 34.6% or $18.9 million primarily due to increase in trade and other receivables ($12.8 million) and cash and cash equivalents ($5.8 million). Total noncurrent assets decreased by $6.3 million mainly due to decreased in property, plant and equipment by $6.0 million. Total current liabilities increased by 4.9% or $1.3 million due to the increased in trade and other payables by $1.3 million. Total equity increased by 8.2% or $11.0 million. This was on account of the net income generated for the period. SEC Form 17Q 1Q

26 Unified Leyte Geothermal Energy Inc. (ULGEI) (Amounts in PHP millions) For the periods ended March Revenue Costs of sale of electricity (526.1) (517.0) General and administrative expenses (2.5) (3.0) Loss before income tax (153.6) (179.7) Net loss (153.6) (179.7) As of March 31, 2017 December 31, 2016 (audited) Total current assets Total current liabilities 1, ,161.8 Total equity (capital deficiency) (1,133.4) (979.8) ULGEI s revenue increased by 10.2% or P=34.7 million to P=375.0 million as of March 31, 2017 from P=340.3 million for the same period in The increase was due to higher average selling price by P=0.4/kWh (P=37.4 million) offset by lower sales volume by Mwh (P=2.7 million). Cost of sale of electricity increased by 1.8% or P=9.1 million to P=526.1 million as of March 31, 2017 from P=517.0 million for the same period in The increase was due to higher average price (P=0.1 /kwh or P=13.2 million) and offset by lower sales volume (765.5 Mwh or P=4.1 million). General and administrative expenses decreased by 16.7% or P=0.5 million, to P=2.5 million as of March 31, 2017 from P=3 million for the same period in The increase was mainly due to lower business and related expenses (P=0.5 million). With the foregoing, net loss decreased by 14.5% or P=26.1 million to P=153.6 million as of March 31, 2017 from P=179.7 million for the same period in Total currents assets increased by 44.0% or P=80.0 million, to P=262.0 million as of March 31, 2017 from P=182.0 million balance as of December 31, The increase was mainly due to higher trade receivables (P=85.4 million), higher other current assets (P=3.3 million), offset by lower cash balance (P=8.7 million). Total current liabilities increased by 20.1% or P=233.6 million, to P=1,395.4 million as of March 31, 2017 from P=1,161.8 million balance as of December 31, The increase was due to higher payable to related parties (P=199.5 million) and trade and other payables (P=34.1 million). Total capital deficiency increased by 15.7% or P=153.6 million to P=1,133.4 million as of March 31, 2017 from P=979.8 million balance as of December 31, The increase was due to net loss on operation. SEC Form 17Q 1Q

27 FG Hydro Power Corporation (FG Hydro) For the periods ended March 31 (Amounts in PHP millions) Operating revenues ,012.0 Cost of sales General and administrative expenses Operating profit Other (income) expenses net (3.7) 30.2 Income before tax Provision for income tax Net income As of March 31, 2017 December 31, 2016 (audited) Total current assets 1, Total noncurrent assets 5, ,220.3 Total current liabilities Total noncurrent liabilities 1, ,561.5 Total equity 4, ,010.2 FG Hydro generated revenues of P813.5 million for the period ended March 31, 2017, 19.6% or P198.5 million lower than the revenues of P1,012.0 million for the same period in The unfavorable variance was mainly on account of lower ancillary service revenues and the plants slightly lower dispatch during the period. Cost of sales for the period ended March 31, 2017 of P170.2 million was 5.0% or P8.1 million higher as compared to the P162.1 million level for the same period in The unfavorable variance was mainly due to slightly higher other plant operation and maintenance expenses. General and administrative expenses of P83.1 million was 2.1% or P1.7 million higher compared to the P81.4 million expense for the same period in Increased rental expenses for the period mainly accounted for the unfavorable variance. Interest expense for the period ended March 31, 2017 of P14.0 million, however, dropped by 57.1% or P18.6 million as compared to P32.6 million for the same period in 2016 due to the scheduled debt service payments, as well as much lower interest rate for the period. Provision for current income tax for the period ended March 31, 2017 is 11.7% or P17.9 million lower at P135.2 million as compared to P153.1 million for the same period in The favorable variance was partly due to the effect of lower income tax rate of 10%, the applicable rate under the Renewable Energy Law, effective February 22, 2017 for the Pantabangan plant and February 27, 2017 for the Masiway plant. Overall, FG Hydro posted a net income of P428.7 million for the period ended March 31, 2017, P156.5 million or 26.7% lower than the P585.2 million reported income for the same period in Total assets as of March 31, 2017 stood at P6,622.4 million, P558.6 million or 9.2% higher than the December 31, 2016 level of P6,063.8 million. The favorable variance was mainly due to higher cash balance in SEC Form 17Q 1Q

28 As of March 31, 2017, total liabilities stood at P2,183.5 million, P129.9 million or 6.3% higher than the December 31, 2016 level of P2,053.6 million. The unfavorable variance is mainly on account of higher balance of income tax liability as of end of March 31, Total equity as of March 31, 2017 of P4,438.9 million rose by 10.7% or P428.7 million as compared to the December 31, 2016 level of P4,010.2 million. SEC Form 17Q 1Q

29 KEY PERFORMANCE INDICATORS The top eight (8) key performance indicators are set forth below: Ratio March 2017 March 2016 (restated) Current Ratio 1.22:1 1.56:1 Debt-to-Equity Ratio 1.30:1 1.55:1 Net Debt-to-Equity Ratio 1.04:1 1.93:1 Return on Assets (%) Return on Equity (%) Solvency Ratio Interest Rate Coverage Ratio Asset-to-Equity Ratio 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. 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

30 Commitments that will have an impact on the issuer s liquidity As of March 31, 2017, the Company has unserved purchase orders and awarded contracts for the purchase of various capital goods in the total amount of P1,516.4 million. Other than these, we are not aware of any other material commitments that should impact the Company s liquidity. Foreign Exchange Rate Volatility The Company has P=32,949.6 million in long-term US dollar denominated loans as of March 31, 2017 which is 47.4% of the total Company s long-term loans. Any events that will trigger direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation There are no material changes in the contingent financial obligations since the last annual balance sheet date. CASH DIVIDENDS Parent Company On February 28, 2017, EDC declared cash dividends amounting to P=2.6 billion to its common shareholders and P=7.5 million to its preferred shareholder of record as of March 20, 2017 payable on or before April 12, SEC Form 17Q 1Q

31 MAJOR STOCKHOLDERS As of March 31, 2017, the total number of stockholders was 680 and the stock price was P=6.02. Public float level was at 49.27% (or 9,232,546,740 common shares). List of Top 20 Stockholders as of March 31, 2017 Number of Shares Rank Name Nationality Preferred Common Total % 1 Red Vulcan Holdings Corporation Filipino 9,375,000,000 7,500,000,000 16,875,000, PCD Nominee Corporation Foreign - 5,225,824,991 5,225,824, PCD Nominee Corporation Filipino - 4,003,546,610 4,003,546, First Gen Corporation Filipino - 991,782, ,782, Northern Terracotta Power Corporation Filipino - 986,337, ,337, Peter D. Garrucho, Jr. Filipino - 5,670,000 5,670, Benjamin K. Liboro &/or Luisa Bengzon Liboro Filipino - 2,525,500 2,525, Croslo Holdings Corporation Filipino - 2,220,000 2,220, Manuel Moreno or Maria Teresa Lagdameo Lopez Filipino - 1,310,000 1,310, ALG Holdings Corporation Filipino - 875, , First Life Financial Co., Inc. Filipino - 800, , Peter Mar &/or Annabelle C. Mar Filipino - 700, , Rosalind Camara Filipino - 663, , Ma. Consuelo R. Lopez Filipino - 500, , Nicolas, Virginia Maria D. Filipino - 393, , Puno, Francis Giles B. &/or Ma. Patricia Puno Filipino - 367, , Edwin U. Lim Filipino - 350, , Eric U. Lim Filipino - 350, , Emelita D. Sabella Filipino - 321, , Ching Bun Teng Filipino - 312, , BOARD OF DIRECTORS As of March 31, 2017, the members of the Board of Directors of EDC are as follows: Oscar M. Lopez Federico R. Lopez Peter D. Garrucho, Jr. Joaquin E. Quintos IV Victor Emmanuel B. Santos, Jr. Francis Giles B. Puno Richard B. Tantoco Jonathan C. Russell Edgar O. Chua Francisco Ed. Lim Manuel I. Ayala Chairman Emeritus Chairman and Chief Executive Officer Director Director Director Director Director, President and Chief Operating Officer Director Independent Director Independent Director Independent Director SEC Form 17Q 1Q

32 OFFICERS As of March 31, 2017, the Officers of EDC are as follows: Name Federico R. Lopez Richard B. Tantoco Nestor H. Vasay Dominador M. Camu, Jr. Ma. Elizabeth D. Nasol Erwin O. Avante Ferdinand B. Poblete Ariel Arman V. Lapus Liberato S. Virata Reman A. Chua Raymundo N. Jarque Rassen M. Lopez Bernardito M. Lapuz Ramon A. Carandang Maribel A. Manlapaz Ana Maria A. Katigbak Bernadette Ann V. Policarpio Glenn L. Tee Erudito S. Recio Position Chief Executive Officer President and Chief Operating Officer Senior Vice President / Chief Financial Officer/ Treasurer/ Head of Finance & Shared Services Group Senior Vice President, Head of Operations and Engineering Group Vice President, Human Resource Management Group Vice President, Corporate Finance, Compliance Officer (SEC & PSE) Vice President, Information Technology Group/ Chief Information Officer Vice President, Managing Director for Latin America Vice President, Head of BGBU Projects & Resource Exploration Management Vice President, Head of Wind Ilocos Norte Business Unit Vice President, Head of Business Development Group Vice President, Head of Legal and Regulatory Group Vice President for Strategy and Risk Management Group/ Chief Risk Officer Vice President/ Head of Corporate Affairs Group Assistant Vice President, Comptroller Corporate Secretary Assistant Corporate Secretary Assistant Vice President, Internal Audit / Chief Audit Executive Assistant Vice President, Investor Relations / Corporate Information Officer SEC Form 17Q 1Q

33

34 ENERGY DEVELOPMENT CORPORATION AND SUBSIDIARIES FINANCIAL SOUNDNESS INDICATORS Ratio March 2017 March 2016 (restated) Current Ratio 1.22:1 1.56:1 Debt-to-Equity Ratio 1.30:1 1.55:1 Net Debt-to-Equity Ratio 1.04:1 1.93:1 Return on Assets (%) Return on Equity (%) Solvency Ratio Interest Rate Coverage Ratio Asset-to-Equity Ratio

35 Prime Terracotta Holdings Corporation E: 100% V: 100% Red Vulcan Holdings Corporation E: 40% V: 60% D: 100% D: 60% D: 100% D: 100% D: 100% D: 100% D: 100% EDC Geothermal Corporation (EGC) First Gen Hydro Power Corporation (FGHPC) EDC Wind Energy Holdings Inc. (EWEHI) EDC Wind Energy Holdings Inc. (EWEHI) 2 EDC Drillco Corporation (EDC Drillco) EDC Bright Solar Energy Holdings Inc. (EBSEHI) EDC Holdings International Limited (EHIL) ID: 100% Green Core Geothermal Inc. (GCGI) Bac-Man Geothermal Inc. (BGI) Unified Leyte Geothermal Energy Inc. (ULGEI) Southern Negros Geothermal, Inc. (SNGI) Bac-Man Energy Development Corporation (BEDC) Legend: D Direct Ownership ID Indirect Ownership E Economic Interest V Voting Interest ID: 0.01% Energy Development (EDC) Corporation Chile Limitada D: 99.99% EDC Soluciones Sostenibles Ltd EDC Pagali Burgos Wind Power Corporation (EPBWPC) EDC Burgos Wind Power Corporation (EBWPC) EDC Pagudpud Wind Power Corporation (EPWPC) ID: 100% ID: 100% ID: 95% ID: 95% ID: 100% EDC Energia Verde Chile SpA ID: 100% EDC Energia de la Tierra SpA EDC Bayog Burgos Wind Power Corporation (EBBWPC) Matnog 1 Renewable Energy Corporation (M1REC) Matnog 2 Renewable Energy Corporation (M2REC) EDC Chile Holdings SPA ID: 100% EDC Geotermica Chile SPA ID: 100% Matnog 3 Renewable Energy Corporation (M3REC) Iloilo 1 Renewable Energy Corporation (I1REC) Negros 1 Renewable Energy Corporation (N1REC) PT EDC Indonesia Geotermica Crucero Peru S.A.C. Geotermica Tutupaca Norte Peru S.A.C. Geotermica Loriscota Peru S.A.C. ID: 70% ID: 70% ID: 70% PT EDC Panas Bumi Indonesia EDC Geotermica Del Sur S.A.C. EDC Energia Azul S.A.C. EDC Energia Peru S.A.C. EDC Energia Geotermica S.A.C. EDC Progreso Geotermica Peru S.A.C. ID: 100% Burgos 3 Renewable Energy Corp. (BREC 3) Burgos 3 Renewable Energy Corp. (BREC 4) Calaca Renewable Energy Corp. (CREC) ID: 0.01% ID: 99.99% EDC Bago Solar Power Corporation (EBSPC) EDC Sinag Power Corporation (ESPC, formerly EDC Burgos Solar Corporation ) Kayabon Geothermal, Inc. (KGI) EDC Mindanao Geothermal Inc. (EMGI) Mount Apo Renewable Energy Inc. (MAREI) ID: 100% EDC Desarollo Sostenible Ltd ID: 99.96% EDC Energia Verde Peru S.A.C. ID: 30% Energy Development Corporation Peru S.A.C. ID: 0.01% ID: 100% ID: 70% ID: 100% EDC Hong Kong Limited (EHKL) ID: 99.99% EDC Peru Holdings S.A.C. ID: 99.99% EDC Geotermica Peru S.A.C. ID: 100% EDC Hong Kong International Investments Limited (EHKIIL) ID: 0.01% ID: 0.01% EDC Energia Renovable Peru S.A.C.