SM DEVELOPMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31
2009 2008

ASSETS

Cash and Cash Equivalents (Notes 6, 18, 24 and 25) P 715,865,365 P648,449,340
Trade and Other Receivables (Notes 7, 14, 18, 24 and 25) 4,960,507,360 2,607,617,880
Investments Held for Trading (Notes 8, 18 ,24 and 25) 334,088,736 1,134,403,230
Available-for-Sale Investments (Notes 9, 14, 18, 24 and 25) 2,827,662,394 2,259,543,536
Condominium Units for Sale (Notes 10 and 25) 1,017,223,058 142,852,329
Land and Development (Notes 10 and 18) 7,866,092,699 6,336,641,921
Advances for Project Development (Notes 18 and 25) 1,301,510,831 880,425,671
Investment Property (Note 12) 785,212,107 –
Deferred Tax Assets (Note 20) 57,522,712 3,648,385
Other Assets - net (Notes 13, 19 and 25) 788,614,671 251,765,883
P20,654,299,933 P14,265,348,175

LIABILITIES AND EQUITY

Liabilities
Loans payable (Notes 7, 9, 14, 18, 24 and 25) P4,013,485,433 P2,752,863,309
Accounts payable and other liabilities
(Notes 10, 15, 18, 19, 24 and 25) 2,512,229,602 1,472,455,043
Customers’ deposits (Note 16) 2,676,625,234 58,666,289
Income tax payable (Note 25) 95,642,565 52,999,420
Dividends payable (Notes 24 and 25) 22,250,737 26,516,198
Deferred tax liabilities (Note 20) 396,844,284 395,388,610
Total Liabilities 9,717,077,855 5,658,888,869

Equity
Capital stock (Note 17) 4,122,207,350 4,122,207,350
Additional paid-in capital (Note 17) 204,912,695 121,744,133
Retained earnings (Note 17) 5,979,871,180 4,323,899,161
Unrealized mark-to-market gain on available-for-sale
investments - net of deferred tax (Note 9) 630,230,853 61,932,621
Treasury stock - 27,619,146 shares in 2008 (Note 17) – (23,323,959)
` Total Equity 10,937,222,078 8,606,459,306
P20,654,299,933 P14,265,348,175
SM DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31

2009 2008 2007

REVENUE FROM REAL ESTATE SALES

(Note 10) P5,261,816,589 P3,050,087,673 P1,954,710,125

COSTS OF REAL ESTATE SOLD (Note 10) 2,849,815,882 1,328,469,195 1,125,773,785

GROSS PROFIT 2,412,000,707 1,721,618,478 828,936,340

OPERATING EXPENSES
Brokerage fees and commissions 256,464,448 81,994,518 53,303,220
Marketing expenses 247,840,107 81,996,443 44,615,951
Salaries, wages and benefits (Notes 18 and 19) 95,910,870 50,340,764
24,197,180
Taxes and licenses 79,345,576 57,548,697 14,964,246
Rentals and utilities (Note 18) 41,137,882 11,171,453 4,611,936
Depreciation (Notes 12 and 13) 39,208,600 3,163,840 2,470,736
Entertainment, amusement and recreation 19,538,251 3,694,257 4,152,430
Management and professional fees 3,534,752 3,248,804 1,006,650

782,980,486 293,158,776 149,322,349

1,629,020,221 1,428,459,702 679,613,991

GAIN ON SALE OF INVESTMENTS HELD

FOR TRADING AND AVAILABLE-FORSALE
INVESTMENTS (Notes 8, 9 and 18) 253,687,973 198,251,841 1,639,811

INTEREST EXPENSE (Notes 7, 14 and 18) (83,426,309) (64,303,292) (26,446,085)

INTEREST INCOME (Notes 6, 9, 13 and 18) 79,898,377 99,184,574 103,387,834
DIVIDEND INCOME (Notes 8, 9 and 18) 50,193,497 93,916,741 73,512,136
MANAGEMENT FEE (Note 18) 33,103,326 19,118,497 12,835,960
UNREALIZED MARK-TO-MARKET GAIN
(LOSS) ON INVESTMENTS HELD FOR
TRADING (Note 8) 11,487,018 (1,380,200,167) 572,627,601
OTHER INCOME (EXPENSE) - net (Note 12) 55,263,704 41,803,593 (9,875,825)

INCOME BEFORE INCOME TAX 2,029,227,807 436,231,489 1,407,295,423

PROVISION FOR (BENEFIT FROM)

INCOME TAX (Notes 20 and 26)
Current 193,943,391 197,664,698 35,979,479
Deferred (25,414,952) 181,730,871 150,687,912
Benefit from minimum corporate income tax – – (1,768,601)

168,528,439 379,395,569 184,898,790

NET INCOME P1,860,699,368 P56,835,920 P1,222,396,633

BASIC/DILUTED EARNINGS PER SHARE

(Note 21) P0.451 P0.014 P0.300
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

2009 2008 2007

NET INCOME P1,860,699,368 P56,835,920 P1,222,396,633

OTHER COMPREHENSIVE INCOME

(LOSS)
Net gain (loss) on available-for-sale
investments (Note 9) 568,298,232 (641,182,083) 330,078,979

Income tax effect – (215,250) (690,375)

568,298,232 (641,397,333) 329,388,604

TOTAL COMPREHENSIVE INCOME

(LOSS) P2,428,997,600 (P584,561,413) P1,551,785,237