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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).
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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
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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 [ ]
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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.
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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
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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.
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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/
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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,
25-year contract period expiring in 2035)
4. Ampiro Geothermal Project (with a five-year pre-development
period expiring in 2017,
25-year contract period expiring in 2037)
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,
25-year contract period expiring in 2037)
7. Lakewood Geothermal Project (with a five-year pre-development
period expiring in
2017, 25-year contract period expiring in 2037)
8. Balingasag Geothermal Project (with a five-year
pre-development period expiring in
2017, 25-year contract period expiring in 2037)
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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)
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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.
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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.
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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.
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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
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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.
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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.
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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
This account increased by 20.8% or P333.3 million to P1,937.4
million as of
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
This account increased by 129.9% or P857.1 million to P1,517.0
million as of
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
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
Adopted Not
Adopted Not
Applicable
PFRS 6 Exploration for and Evaluation of Mineral Resources
PFRS 7 Financial Instruments: Disclosures
Amendments to PFRS 7: Transition
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
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
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
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
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
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
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 Philippine Interpretation IFRIC-9
and PAS 39: Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items
PAS 40 Investment Property
PAS 41 Agriculture
-
5
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
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
PHILIPPINE FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS Effective as of March 31, 2013
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 )
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
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.
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
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
See accompanying Notes to Unaudited Interim Condensed
Consolidated Financial Statements.
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED MARCH 31, 2013 AND 2012
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
See accompanying Notes to Unaudited Interim Condensed
Consolidated Financial Statements.
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
FOR THE PERIODS ENDED MARCH 31, 2013 AND 2012
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
See accompanying Notes to Unaudited Interim Condensed
Consolidated Financial Statements.
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31, 2013 AND 2012
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
See accompanying Notes to Unaudited Interim Condensed
Consolidated Financial Statements.
-
ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan
Holdings Corporation)
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