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) April 1, 2015 JANET A. ENCARNACION HEAD, Disclosures Department The Philippine Stock Exchange, Inc. Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue, Makati City Dear Ms. Encarnacion: In compliance with the Philippine Stock Exchange disclosure requirement, we submit the attached Notice of May 5, 2015 Annual Stockholders’ Meeting and SEC Form 20-IS (Definitive Information Statement). Energy Development Corporation (A Subsidiary of Red Vulcan Holdings Corporation) and Subsidiaries Consolidated Financial Statements December 31, 2014 and 2013 and Years Ended December 31, 2014, 2013 and 2012 and Independent Auditors’ Report SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001, 6760 Ayala Avenue Fax: (632) 819 0872 December 28, 2012, valid until December 31, 2015 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-3 (Group A), Philippines November 15, 2012, valid until November 16, 2015 INDEPENDENT AUDITORS’ REPORT The Stockholders and the Board of Directors Energy Development Corporation We have audited the accompanying consolidated financial statements of Energy Development Corporation (a subsidiary of Red Vulcan Holdings Corporation) and its Subsidiaries, which comprise the consolidated statements of financial position as at December 31, 2014 and 2013, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2014, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. *SGVFS011523* A member firm of Ernst & Young Global Limited - 2 - Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Energy Development Corporation and its Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2014 in accordance with Philippine Financial Reporting Standards. SYCIP GORRES VELAYO & CO. Ladislao Z. Avila, Jr. Partner CPA Certificate No. 69099 SEC Accreditation No. 0111-AR-3 (Group A), January 18, 2013, valid until January 17, 2016 Tax Identification No. 109-247-891 BIR Accreditation No. 08-001998-43-2012, April 11, 2012, valid until April 10, 2015 PTR No. 4751254, January 5, 2015, Makati City March 6, 2015 *SGVFS011523* A member firm of Ernst & Young Global Limited ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan Holdings Corporation) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION December 31 2014 2013 ASSETS Current Assets Cash and cash equivalents (Notes 7 and 31) P=14,010,213,414 16,043,154,556 Trade and other receivables (Notes 3, 8, 20 and 31) 6,887,533,961 3,611,367,033 Financial assets at fair value through profit or loss (Notes 3, 9 and 31) 523,593,442 – Parts and supplies inventories (Notes 3 and 10) 2,902,452,788 3,094,303,449 Derivative assets (Note 31) 22,024,164 14,244,905 Available-for-sale investments (Notes 3, 9 and 31) – 341,841,500 Other current assets (Note 11) 720,967,433 1,235,454,883 Total Current Assets 25,066,785,202 24,340,366,326 Noncurrent Assets Property, plant and equipment (Notes 3 and 12) 83,073,524,410 66,240,009,563 Goodwill and intangible assets (Notes 3 and 13) 4,542,553,788 4,399,527,299 Exploration and evaluation assets (Notes 3 and 14) 2,801,502,406 2,380,775,489 Available-for-sale investments (Notes 3, 9 and 31) 567,976,890 407,242,129 Deferred tax assets - net (Notes 2 and 28) 1,049,978,028 1,335,077,588 Derivative assets (Note 31) 132,144,980 46,885,196 Other noncurrent assets (Notes 3, 15 and 31) 7,264,999,222 5,855,620,746 Total Noncurrent Assets 99,432,679,724 80,665,138,010 TOTAL ASSETS P=124,499,464,926 P=105,005,504,336 LIABILITIES AND EQUITY Current Liabilities Trade and other payables (Notes 3, 16 and 31) P=7,639,327,438 P=6,981,975,893 Due to related parties (Notes 20 and 31) 49,625,468 53,347,005 Income tax payable 58,743,150 – Current portion of: Long-term debts (Notes 17 and 31) 10,499,672,112 1,872,075,873 Derivative liabilities (Note 31) 3,394,698 524,790 Total Current Liabilities 18,250,762,866 8,907,923,561 Noncurrent Liabilities Long-term debts - net of current portion (Notes 17 and 31) 58,962,569,562 56,676,684,462 Derivative liabilities - net of current portion (Note 31) 166,340,202 3,673,532 Deferred tax liability 2,612,598 – Net retirement and other post-employment benefits (Notes 3 and 27) 1,795,995,440 1,658,587,597 Provisions and other long-term liabilities (Notes 3 and 18) 1,701,097,781 1,513,676,279 Total Noncurrent Liabilities 62,628,615,583 59,852,621,870 Total Liabilities 80,879,378,449 68,760,545,431 (Forward) *SGVFS011523* - 2 - December 31 2014 2013 Equity Equity attributable to equity holders of the Parent Company: Preferred stock (Note 19) P=93,750,000 P=93,750,000 Common stock (Note 19) 18,750,000,000 18,750,000,000 Common shares in employee trust account (Notes 19 and 30) (346,730,774) (351,494,001) Additional paid-in capital (Note 30) 6,285,845,818 6,282,808,842 Equity reserve (Note 19) (3,706,430,769) (3,706,430,769) Net accumulated unrealized gain on available-for-sale investments (Note 9) 143,192,675 29,611,321 Cumulative translation adjustments on hedging transactions (Note 31) (178,182,172) (55,615,718) Cumulative translation adjustment arising from foreign subsidiaries (6,530,344) (8,698,511) Retained earnings (Notes 2 and 19) 21,095,090,585 13,204,236,334 42,130,005,019 34,238,167,498 Non-controlling interests (Notes 2 and 19) 1,490,081,458 2,006,791,407 Total Equity 43,620,086,477 36,244,958,905 TOTAL LIABILITIES AND EQUITY P=124,499,464,926 P=105,005,504,336 See accompanying Notes to Consolidated Financial Statements. *SGVFS011523* ENERGY DEVELOPMENT CORPORATION (A Subsidiary of Red Vulcan Holdings Corporation) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31 2014 2013 2012 REVENUE FROM SALE OF ELECTRICITY (Notes 3, 12, 34, 35, 37 and 38) P=30,867,199,917 P=25,656,270,470 P=28,368,552,055 COSTS OF SALE OF ELECTRICITY (Notes 2, 10, 12, 20, 21, 23 and 27) (11,314,332,241) (9,435,354,924) (9,824,274,420) GENERAL AND ADMINISTRATIVE EXPENSES (Notes 2, 8, 10, 12, 15, 22, 23 and 27) (5,744,349,133) (4,332,188,248) (4,702,875,529) FINANCIAL INCOME (EXPENSE) Interest income (Notes 7, 24 and 31) 184,691,655 294,047,366 364,640,989 Interest expense (Notes 17, 24 and 31) (3,754,010,722) (3,384,499,304) (3,703,648,469) (3,569,319,067) (3,090,451,938) (3,339,007,480) OTHER INCOME (CHARGES) Reversal of impairment of property, plant and equipment (Notes 3 and 12) 2,051,903,642 – 63,614,885 Proceeds from insurance claims (Note 12) 539,212,484 – – Foreign exchange gains (losses) - net (Notes 25 and 31) (102,531,122) (1,261,278,106) 1,053,466,774 Reversal of (loss on) impairment of damaged assets due to Typhoon Yolanda (Notes 10 and 12) 53,443,007 (625,013,609) – Loss on impairment of exploration and evaluation assets (Notes 3 and 14) – (574,820,864) – Miscellaneous - net (Note 26) 259,370,942 (223,109,595) (225,328,564) 2,801,398,953 (2,684,222,174) 891,753,095 INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS 13,040,598,429 6,114,053,186 11,394,147,721 PROVISION FOR (BENEFIT FROM) INCOME TAX (Note 28) Current 934,128,656 685,663,122 433,838,464 Deferred 288,460,745 (199,679,773) 341,284,130 1,222,589,401 485,983,349 775,122,594 NET INCOME FROM