EDC COMPANY PRESENTATION JUNE 2014 DISCLAIMER This presentation - - PowerPoint PPT Presentation

EDC COMPANY PRESENTATION

JUNE 2014

2

This presentation contains certain “forward looking statements.” These forward looking statements include words or phrases such as EDC

• r its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words or phrases of similar import. Similarly,

statements that describe EDC’s objectives, plans or goals also are forward-looking statements. All such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. EDC does not make expressed or implied representations or warranties as to the accuracy and completeness of the information contained herein and shall not accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any party’s reliance or use of such information. The information and opinions in this presentation are subject to change without notice. This presentation does not constitute a prospectus or other offering memorandum in whole or in part. Information contained in this presentation is a summary only and is prepared for discussion purposes and is not a complete record of the discussions. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any security. There shall be no sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under securities laws of such state or jurisdiction. By receiving this presentation, each investor is deemed to represent that it is a sophisticated investor and possesses sufficient investment expertise to understand the risks involved. Prospective investors should undertake their own assessment with regard to their investment and they should obtain independent advice on any such investment’s suitability, inherent risks and merits and any tax, legal and accounting implications which it may have for them.

DISCLAIMER

3

TABLE OF CONTENTS

Page

1

Key Investment Highlights 4 – 21

2

Review of FY 2013 Financial Results 22 – 27

3

Growth Projects 28 – 40

4

Return to Service of Leyte Power Plants 41 – 46

5

Summary 47– 48

APPENDICES

Page

i

Review of Financial Highlights by Asset 51 – 56

ii

Stages of Geothermal Development 57 – 61

iii

WESM 62 – 64

4

KEY INVESTMENT HIGHLIGHTS

5

Key Investment Highlights

1

Energy sales largely derived from long term revenue contracts

• Cash flows generated at

both Parent and Project Company level

• Geothermal concession

agreements start expiring in 2031 88% increase in generating capacity achieved in 2009 – 2010

• Power Plant acquisitions

driving revenue growth

• 13 concessions

successfully acquired in Chile (6) and Peru (7) Geothermal is a competitive, strategic and reliable energy source

• Grid marked by robust

demand and tightening reserves margin

• RE Act of 2008 provides

regulatory support to the sector Financial risks deliberately managed

• Superior financial and
• perating results to

stakeholders

• Robust credit and

investment profile maintained

Contract-based Cash Flows

II

Domaine Expertise

I

Track Record

• f Growth

III

Favorable Industry Dynamics

IV

Strong Credit & Investment Profile

V

2nd largest vertically integrated geothermal company in the world

• Fully integrated operations

in all geothermal concession areas

• Diversifying into wind

energy

6

Domaine Expertise

I

2ND LARGEST VERTICALLY INTEGRATED GEOTHERMAL COMPANY GLOBALLY COMPANY COUNTRY

STEAM CAPACITY

(in MW)

PLANT CAPACITY

(in MW)

1

Calpine USA 1,310 1,310

2 EDC

Philippines 1,130 1,130 3

Comision Federal de Electricidad Mexico 958 958

4

Enel Green Power Italy 915 915

5

Chevron USA 1,329 887*

6

Ormat Israel 689 749

7

Mighty River Power New Zealand 385 385

8

Terra Gen USA 337 337

9

Contact Energy New Zealand 335 335

10

Orkuveita Reykjavikur Iceland 333 333

11

CalEnergy Generation USA 329 329

12

Star Energy Ltd. Indonesia 227 227

13

Northern California Power Agency USA 220 220

Note: * Not included is the 442 MW operated by the Indonesian Government through PLN Source: Bertani, Ruggero, 2010: Geothermal Power Generation in the World 2005-2010 Update Report

7

Domaine Expertise

I

125.0MW 232.5MW 180.0MW 50.9MW Upper Mahiao Malitbog Mahanagdong Optimization 112.5MW 80.0MW 25.0MW Palinpinon I Palinpinon II Nasulo (Under development) 112.5MW Tongonan

LEGEND

694.4MW Geothermal steam field and power plant

(Integrated)

150MW Wind

(under development)

435MW Geothermal steam field and power plant

(EDC/EDC subsidiary)

132MW Hydro power plant

(EDC subsidiary)

NPC DUs WESM NGCP TOTAL %

LUZON

• 193

730 379 1,302 11 VISAYAS 2,637 2,441 169

• 5,247

82 MINDANAO 589

• 589

7

TOTAL 3,226 2,634 899 379 7,138

100 %

45 37 13 5

100

1,208 MW

% share

150 MW

Wind Energy (under development)

TECHNOLOGY & GEOGRAPHICALLY DIVERSE

1Q 2014 Revenues

52.0MW 54.0MW Mindanao I Mindanao II 110.0MW 20.0MW Bacman I Bacman II 120.0MW 12.0MW Pantabangan Masiway 150.0MW Burgos (Under development)

1,129MW Geothermal 79MW Hydro Power 7% of Installed Capacity 10% of Electricity Produced

1 1 1 1 2 3 2

1 1 1 2 2 3 1

8

Contract-based Cash Flows

II

EDC Parent(3) 907 36% EGC 1,061 42% FGHPC 556 22% EDC Parent (3) 1,911 43% EGC 1,838 41% FGHPC 728 16% EDC Parent (3) 3,226 45% EGC 3,064 43% FGHPC 848 12%

(2) All figures in PHP millions as of Mar. 31, 2014 (3) EDC Parent figures include the Company’s other subsidiaries

7,138

EBITDA (2) as of Mar. 2014

4,477

Net Income (2) as of Mar. 2014

2,524

First Gen Hydro Power Corporation (FGHPC)

120.0 MW Pantabangan 12.0 MW Masiway

60%

Wind Energy Projects

150.0 MW Burgos (Under Development)

100%

International Expansion

• Chile
• Peru
• Indonesia

100% EDC Geothermal Corporation (EGC) 100%

192.5 MW Palinpinon 112.5 MW Tongonan

Green Core Geothermal

• Inc. (GCGI)

100%

110.0 MW Bac-Man I 20.0 MW Bac-Man II

Bac-Man Geothermal

• Inc. (BGI)

100%

(1)

• 694.4 MW Power Plants

 588.4 MW Unified Leyte Power Project  106 MW Mindanao Power Project Note: 49 MW No. Negros was put

• n preservation mode starting July

2011 (1) Formerly First Luzon Geothermal Energy Corporation (FLGEC)

Lopez Group

IFC GIC Public

E: 50.00 % V: 50.47% E: 1.69 % V: 1.12 % V: 3.33 % E: 4.99 % V: 61.88 % E: 43.32 %

Revenues (2) as of Mar. 2014

GENERATES CASHFLOWS AT BOTH PARENT AND SUBSIDIARY LEVELS

9

Contract-based Cash Flows

II

Electric Cooperatives/ Third party customers

POSSESSES STABLE AND PREDICTABLE CASH FLOWS

Subsidiaries of EDC

National Power Corporation

Power Supply Agreements (PSA) Transition Supply Contracts (TSC) Percentage of Consolidated Revenues (2) Power Purchase Agreements

USD Linkage

Electricity Cashflow

Steam Sales Agreements (SSA)

Bac-Man (1) Geothermal

Geothermal Resources Sales Contracts (GRSC)

Green Core Geothermal FG Hydro

Electricity Cashflow Electricity Cashflow Electricity Cashflow Steam

Cashflow or Dividends

Steam

Cashflow or Dividends

Dividends

Electricity 45% 73%

Sovereign off-take

Electricity 55% 0%

Commercial off-take

(1) Bacman Unit 2 Undergoing rehabilitation (2) As of Mar. 31, 2014

10

Contract-based Cash Flows

II

NGCP 379 5% DU 2,634 37% NPC 3,226 45% WESM 899 13%

7,138

LIMITED EXPOSURE TO VOLATILE SPOT MARKET

LONG-TERM CONTRACTUAL AGREEMENTS

(1) Consolidated revenues as of Mar. 31, 2014

2031 Geothermal Renewable Energy Service Contract CONCESSION Power Purchase Agreements (sovereign) Power Supply Agreements (commercial) ELECTRICITY 2024 2022

REVENUE IN PHP MILLIONS REVENUE IN GWH TERM STRUCTURE OF CONTRACTS(1) In PHP Millions

2031

year concession agreements start expiring

13%

revenue from volatile spot market

37%

expanded revenue base from non-institutional clients

National Power Corporation 3,226 45% National Grid Corporation of the Philippines (Ancillary Services) 379 5% Distribution Utilities/Industrial 2,634 37% WESM 899 13% National Power Corporation 1,042 57% National Grid Corporation of the Philippines (Ancillary Services) 90 5% Distribution Utilities/Industrial 554 30% WESM 136 8%

18%

revenue from contract tenors of >6 yrs

SPOT 1-2 YRS 3-5 YRS >6 YRS WESM 13%

• NGCP
• 5%
• NPC
• 45%

DU

• 13%

6% 18%

11

Track Record of Growth III

SIGNIFICANT PORTFOLIO EXPANSION SINCE PRIVATIZATION

• Limited to steam field operations

19,007

25,656

10,324

15,641

8,768

5,633

(+) 125.0 MW

Upper Mahiao

(+) 49.4 MW

• N. Negros

(+) 463.4 MW

Mahanagdon g, Malitbog, and Optimization

(+) 132.0 MW

Pantabangan – Masiway

• Acquired

geothermal concessions

• verseas

(-) 49.4 MW

• N. Negros

(-) 20.0 MW

Botong

(+) 150.0 MW

Bac-Man I & II

(+) 106.0 MW

Mindanao I & II

(+) 305.0 MW

Palinpinon & Tongonan

STEAMFIELD OPERATOR STEAMFIELD AND POWER PLANT OPERATOR

2007 2008 2009 2010 2011 2012 2006 1976 - 2005

current (MW) 125 512.8 132 411 150 (69.4)

• cum. (MW)

125 637.8 769.8 1,180.8 1,330.8 1,261.4 1,261.4 1,261.4

2007-2013

Revenues 35.0% EBITDA 51.5% Net Income 35.8% 2013

12

Track Record of Growth III

MAINTAINS A TRACK RECORD OF OPERATIONAL EXCELLENCE

Availability Factor (1) (%) Reliability Factor(2) (%)

Unified Leyte Palinpinon I Palinpinon II Tongonan

Visayas

Mindanao I Mindanao II

Mindanao

1Q 2013

0% 20% 40% 60% 80% 100% 94% 99% 72% 99% 99% 99%

1Q 2013

0% 20% 40% 60% 80% 100% 98% 99% 99% 99% 99% 99%

1Q 2014

0% 20% 40% 60% 80% 100% 72% 81% 98% 90% 99% 96% 36% 98%

1Q 2014

0% 20% 40% 60% 80% 100% 82% 99% 98% 99% 99% 95% 49% 98% Source: Company data as of the end of Mar 31, 2014 (1) Availability Factor - Fraction of time a unit is capable of providing service, considering both planned and unplanned outages. (2) Reliability Factor - Measure of ability of generating units to perform their intended function, considering unplanned outages only.

Bacman I Bacman II

Luzon

13

Favorable Industry Dynamics IV

2013 2014 2015 2016 2017 2018 2019 2020 Reqd Additional Capacity

• 235

458 20 595

• 108

Committed Capacity

• 280

931 1,770 1,810 4,338 4,338 4,338 Existing Capacity 12,098 12,098 11,735 12,098 12,098 12,098 11,735 12,098 Peak Demand 9,853 10,322 10,740 11,365 11,868 12,399 12,956 13,538 Reqd Reserve Margin (RHS) 2,187 2,291 2,384 2,523 2,635 2,753 2,876 3,006

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Oil-fired plants…  2,108 MW, or 13%, of country’s capacity  Php12.52/kwh2 (est’d ave tariff)

Sources:

• 1. First Gen’s internal estimates based on

actual data submitted to DOE

• 2. ERC Resolution no. 3, Series of 2013
• 3. DOE’s list of Existing Power Plants 2012

MW

65% OF THE COUNTRY’S POWER GENERATION CAPACITY IS 15 YEARS OR OLDER. UNEXPECTED OUTAGES IN THE AGING PLANTS COULD LEAD TO HIGH ELECTRICITY PRICES3

COMMITTED CAPACITIES WILL NOT BE SUFFICIENT TO MEET THE REQUIRED RESERVE MARGIN FOR THE COMBINED LUZON-VISAYAS GRID

Luzon-Visayas Supply-Demand Forecast (2013-2020)1

Peak Demand growth: 4.6% 150MW Burgos 110MW Bacman 20MW Nasulo 100MW Avion 6MW NNGP 414MW San Gabriel 30MW Bacman 3 40MW Botong 828MW San Gabriel 3 300MW Green Mountain MW

14

Favorable Industry Dynamics IV

2013 2014 2015 2016 2017 2018 2019 2020 Reqd Additional Capacity 346 365 129

• Committed Capacity
• 43

343 773 876 915 915 915 Existing Capacity 1,282 1,282 1,282 1,282 1,282 1,282 1,282 1,282 Peak Demand 1,332 1,383 1,435 1,490 1,546 1,605 1,666 1,729 Reqd Reserve Margin (RHS) 296 307 319 331 343 356 370 384

• 100

200 300 400 500 600 700 800 700 1,000 1,300 1,600 1,900 2,200 2,500 2,800 3,100 3,400

Mindanao Supply-Demand Forecast (2013-2020)1

Source: 1. First Gen’s internal estimates based on actual data submitted to DOE

Peak Demand growth: 3.8% MW MW

WITH UNRELIABLE HYDRO CAPACITY, THE MINDANAO GRID IS EXPECTED TO EXPERIENCE TIGHT SUPPLY UNTIL THE COAL CAPACITIES COME IN

35MW Green Power 8MW Minery Cabuhog 300MW Therma South 225MW Lanao Hydro 135MW Ayala Coal 76MW Pasguin Wind 30MW Puyo 23MW Bubunauan 50MW Mindanao 3 39MW Tagoloan

15

Favorable Industry Dynamics IV

Technical Services 14% Engineering & Construction 4% Power Generation 29% Steam Field Operations 29% Others (2) 24%

BOARD OF DIRECTORS

LED BY AN EXPERIENCED BOARD OF DIRECTORS AND MANAGEMENT TEAM THAT IS COMMITTED TO BEST IN CLASS CORPORATE GOVERNANCE PRACTICES

• Key authorities in the power industry
• Long-standing relationships with key industry

stakeholders

• Advocates of good corporate governance
• Platinum Award for Corporate Governance from the Institute of Corporate Directors and Securities and Exchange Commission.
• 8th Placer in Finance Asia’s Best in Corporate Social Responsibility
• Four Philippine Quill Awards for HELEN, CAREERS & BINHI from the International Association of Business Communicators
• Three Seals of Approval for MGPF, LGPF & GCGI under DENR’s Philippine Environment Partnership Program for voluntary self-regulation &

improved environmental performance

• Five Anvil Awards for Corporate Sustainability Communications Program, annual report, BINHI and calendar & planner from Public Relations

Society of the Philippines

Average Years of Management Experience

15+

Average Years

• f Engineering

Experience

12

(1) As of June 30, 2013 (2) Includes Office of the President, Finance, HR, Business Development, Supply Chain,

and Environment & External Relations

TECHNICAL EXPERTISE (1) CORPORATE GOVERNANCE RECENT AWARDS

• Board works directly with President to determine

strategy

• EDC’s independent directors are active members of

committees.

• Board Strategic Planning sessions are regularly

conducted

16

Favorable Industry Dynamics IV

Health 4% Education 48% Livelihood 23% Environment 17% Others 8%

EDC HAS VARIOUS CORPORATE SOCIAL RESPONSIBILITY PARTNERSHIPS AND PROGRAMS

OUR SOCIAL AND ENVIRONMENTAL COMMITMENTS CSR INVESTMENTS FOR 2012

Note: Data is as of year 2012, except for the no. of students studying in UP which is as of September 2013.

• We believe that education is the most dependable way out of

poverty

• 143 new trainees admitted to Kananga – EDC institute of

Technology (KEITECH)

• 735 students enrolled at the Leyte Schools for Excellence (SFE)

project

• Scholarships program: 22,947 (elementary), 1,176 (high school),

34 (college).

• We believe in being a partner in progress of the communities in

which we operate

• 15,888 individuals served during medical, dental, surgical
• utreach activities across 5 project sites.
• Assisted in 17 major livelihood projects earning a total net income
• f PHP12.3M.
• 2,253 small scale contracts worth PHP301M awarded to local

farmer federations.

• We believe in protecting and nurturing our environment because

failing this - our resources will suffer

• BINHI Project – 1,550,341 trees planted for specific module (Tree

for the Future, Tree for Life and Tree for Food)

Php103 MM

Total CSR Investment in 2012

17

Favorable Industry Dynamics IV

PRINCIPAL TAX BENEFITS PRIMARY REVENUE & COST INCENTIVES OTHER KEY INCENTIVES

PREVIOUS

• Income Tax Holiday (“ITH”)
• 6 years under Pioneer Status
• Plus one year bonus
• Corporate income tax rate (after ITH period)
• f 30%
• Tax on carbon credits
• 30% income tax and 0% VAT
• Royalties
• Steam: Government share is 60% of net

proceeds

• Import of materials / equipment
• Zero duties
• Net operating loss carryover (“NOLCO”): 3

years

NOW

• Income Tax Holiday (“ITH”)
• 7-year ITH from start of commercial
• peration
• Corporate income tax rate (after ITH period)
• f 10%
• Even for existing operations, subject to

guidelines on pass-on savings

• Carbon credits tax exemption
• Royalties
• Steam: Government share is 1.5% of

gross margins

• Import of materials / equipment
• Zero duties
• Net operating loss carryover (“NOLCO”): 3

years

• Feed-in tariff(1)
• Renewable Portfolio Standard(2)
• Green Energy Option(3)

(1) Feed-in Tariff - A policy designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. (2) Renewable Portfolio Standard - A market-based policy which requires electricity suppliers to source an agreed portion of their energy supply from eligible renewable energy resources. (3) Green Energy Option - A mechanism that empowers end-users to choose renewable energy in meeting their energy requirements.

RE ACT OF 2008 PROVIDES SUPPORT TO PHILIPPINE RENEWABLE ENERGY SECTOR

18

Strong Credit & Investment Profile

V

DELIBERATELY MANAGING FINANCIAL RISKS

DEBT MATURITY PROFILE1 Sculpted to support EDC’s growth trajectory LOANS BY STRUCTURE2 Predominantly fixed debt matches nature of energy projects

Average Loan Life (Years)

5.1 yrs

Average Interest Cost

6.8%

(1) In USD Millions as of March 31, 2014 (3) USD65MM converted to PHP via Cross Currency Swap (2)Subject to re-pricing after 5 years

LOANS BY CURRENCY3 US$ indexed revenues provide natural hedge LOANS

Type Currency Outstanding (MM) Repayment Interest Tenor (Years) Maturity 175MM Club3 USD 140 Amortizing LIBOR+1.75% 6 2017 80MM Club USD 80 Amortizing LIBOR+1.80% 5.25 2018 Reg S Bonds USD 300 Bullet 6.50% 10 2021 IFC Loan 1 PHP 3,245 Amortizing 6.07%2 15 2023 IFC Loan 2 PHP 3,011 Amortizing 6.66% 15 2025 PHP FXCN PHP 6,895 Amortizing 6.62% 10 2022 PHP Bonds PHP 12,000 Bullet 8.64%, 9.33% 5.5, 7.0 2015, 2016 PHP Bonds PHP 7,000 Bullet 4.16%, 4.73% 7.0, 10.0 2020, 2023

• 50

100 150 200 250 300 350 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 PHP Debt USD Debt Fixed 1,067 86% Floating 168 14%

USD1,235

USD 468 38% PHP 767 62% USD linked Revenues 52 33% PHP linked Revenues 107 67%

USD1,235

19

Strong Credit & Investment Profile

V

10,712 13,748 13,238 17,330 15,641 17,491 15,316

50% 57% 54% 61% 61% 62% 59% 0% 20% 40% 60% 80% 100% 3,000 6,000 9,000 12,000 15,000 18,000 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-13 (12 mos) Mar-14 (12 mos)

• 3,000

6,000 9,000 12,000 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-13 Mar-14

7,276 7,238 5,245 9,895 7,458 2,368 2,862

CONSOLIDATED NET INCOME RECURRING NET INCOME

• 6,000

12,000 18,000 24,000 30,000 36,000 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-13 Mar-14

20,678 24,153 24,551 28,369 25,656 6,940 7,138

Electricity

EBITDA MARGIN CONSOLIDATED REVENUES

DELIVERING SUPERIOR FINANCIAL AND OPERATING RESULTS TO STAKEHOLDERS

400 2,400 4,400 6,400 8,400 10,400 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Mar-13 Mar-14

3,357 4,395 615 10,376 5,633 2,982 2,524

20

Strong Credit & Investment Profile

V

Mar-14 Mar-13 Dec-13 Dec-12 Dec-11 Dec-10

2.91x 2.07x 2.72x 2.17x 2.95x 2.56x

Mar-14 Mar-13 Dec-13 Dec-12 Dec-11 Dec-10

1.62x 2.39x 2.06x 3.24x 2.14x 2.51x

Mar-14 Mar-13 Dec-13 Dec-12 Dec-11 Dec-10

PHP 35.30 PHP 28.65 PHP 33.71 PHP 29.84 PHP 29.30 PHP 26.47

Mar-14 Mar-13 Dec-13 Dec-12 Dec-11 Dec-10

1.21x 1.00x 1.17x 1.06x 1.32x 1.09x

Mar-14 Mar-13 Dec-13 Dec-12 Dec-11 Dec-10

0.42x 0.30x 0.43x 0.30x 0.33x 0.32x

Notes: (1) Figures computed on a consolidated basis ending Mar. 31, 2014 (2) EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization, Trailing 12 months (3) Debt Service Coverage Ratio = Net Cashflow from Operating Activities / (Short Term Debt + Long Term Debt + Projected Interest Service for the next 12 months) (4) PHP Million per MW

NET DEBT TO MARKET CAPITALIZATION Deteriorated with drop in price per share NET DEBT TO EQUITY Allows for additional fund raising NET DEBT TO EBITDA (2) Well within our targeted 3.6x NET DEBT PER MW POWER (4) Declined with the pre-funding of Burgos Project DEBT SERVICE COVERAGE RATIO (3) Higher than the minimum covenanted 1.2x

MAINTAINING A ROBUST CREDIT PROFILE (1)

1.2x 3.6x

21

Strong Credit & Investment Profile

V

DIVIDEND POLICY IS TO DECLARE 30% OF PRIOR YEAR’S RNI

Dividend Policy Statement

At or about 30% of previous year’s Recurring Net Income subject to i) debt service requirements and loan covenants, and ii) the implementation of business plans, operating expenses, budgets, funding for new investments and acquisitions, appropriate reserves and working capital. 1,485 1,875 2,175 1,863 2,250 3,000 1,875 750 1,500 1,500 1,875

500 1,000 1,500 2,000 2,500 3,000 3,500 2007 2008 2008 (special) 2009 2010 2011 2012 2012 (special) 2013 2013 (special) 2014

PHP Million

Dividends on Common Shares

PHP/share 0.099 0.125 0.145 0.125 0.120 0.160 0.100 0.040 0.080 0.080 0.100 Yield 1.7% 2.0% 2.4% 3.3% 2.4% 2.7% 1.7% 0.7% 1.2% 1.4% 1.8% % of RNI 30% 30% 35% 33% 31% 45% 42% 16% 18% 18% 29%

22

REVIEW OF 1Q 2014 FINANCIAL RESULTS

23

Review of 1Q 2014 Financial Results

2

SIGNIFICANT EVENTS THAT AFFECTED 1Q 2014 FINANCIAL RESULTS

Bacman UL & Tongonan Mindanao FG Hydro

 Units 1 &3 start generating revenues (P453 million)  Unified Leyte and Tongonan revenues decline (P203 million)  No shortfall recorded for Mindanao Plants (P76 million) and higher average

billed tariff (P 55 million)

 FG Hydro’s revenue adjusted with the ERC mandated re-computation of Nov.

and Dec. 2013 billings (P250M)

24

Review of 1Q 2014 Financial Results

2

CONSOLIDATED REVENUES INCREASED BY PHP0.2 B WITH BACMAN UNITS 1 & 3 DECLARING COMMERCIAL OPERATIONS

In PHP Billions

• Bacman’s revenues increased by P371 M (4.5%), due to the commercial operations of Bacman

Units 1 and 3 starting January 2014 and October 2013, respectively.

• Higher revenue contribution by P131 M (28.6%) from Mindanao due to higher average tariff and

the absence of adjustments covering prior year’s shortfall.

• Revenues from FG Hydro decreased by P136 M (13.9%), due to re-computation of electricity spot

prices for Nov. and Dec. 2013 billings as ordered by the ERC (P250).

• Revenues from GCGI decreased by P82 M (3.1%), as Tongonan’s sales volume declined due to

typhoon Yolanda.

• Lower revenues by P85 M (3.1%) as Unified Leyte’s sales volume dropped principally due to

typhoon Yolanda.

Leyte 2,722 Mindanao 458 Tongonan I 1,062 Palinpinon 1,631 Bacman 83* Pantabangan

• Masiway

984

1Q 2013 REVENUES

(P millions) Notes: * - Net trading revenue offset against cost

• f replacement power

Leyte 2,637 Mindanao 589 Tongonan I 945 Palinpinon 1,666 Bacman 190 Pantabanga n-Masiway 848

1Q 2014 REVENUES

(P millions)

0.4 0.1 (0.2) 0.1

Revenues, March 2013 BGI Mindanao Leyte and Tongonan FG Hydro Revenues, March 2014

7.3 7.4 7.1 7.1 6.9 7.2 7.2

25

Review of 1Q 2014 Financial Results

2

In PHP Billions

CONSOLIDATED RECURRING NET INCOME DOWN BY PHP0.5 B DUE TO HIGHER OPERATING EXPENSES

2.9 2.4 2.4 2.2 0.2 0.1 (0.4) (0.2) (0.2) ( 0.2)

RNI, Mar. 2013 BGI Mindanao Typhoon Yolanda FG Hydro Others RNI, Mar. 2014 NCI RNI Attributable to EDC

3.2 2.8 2.2 2.6 3.1

RNI COMPUTATION 1Q 2014 1Q 2013 NET INCOME (LOSS) 2,524 2,982 ADD (DEDUCT) NON-RECURRING ITEMS: Foreign Exchange (gain)/loss 171 (99) Capitalized borrowing cost (39) Gain on sale of PPE (232) Gain on sale of inventory items (74) Income tax provision for (benefits from) non-recurring items (11) 13 Others (10) 5 RECURRING NET INCOME 2,368 2,862

• Consolidated Recurring Net Income (RNI) declined mainly

due to higher operating expenses, partially offset by higher revenues from Bacman

• Operating expenses increased ((P567 M) ) due

principally to Typhoon Yolanda

• Partially off-setting the decline are the higher revenues (P371 M)

from the commercial operations of Bacman Units 1 and 3 and (P131 M) higher revenues from Mindanao due to higher average tariff and no shortfall recorded in the period vs. (P76 M) in 2013

26

Review of 1Q 2014 Financial Results

2

In PHP Billions

CASH GENERATED FROM OPERATIONS AND PESO BOND ISSUANCE SERVICED DEBT AND FUNDED CAPEX

16.0 14.2 1.9 ( 0.6) (0.3) (2.8)

Cash Balance,

• Dec. 2013

Cash generated from

• perations

Debt Servicing Cash Dividends PPE Acquisition, Input VAT and Others Cash Balance,

• Mar. 2014

17.9 17.3 17.0 14.2

• For the first three months of 2014, cash generated from operations reached P1.9 B and was used to service the

following:

P2.8 B property, plant and equipment acquisition, of which :

• P1.4 B was spent to Burgos Wind
• P0.4 B on Drilling activities
• P0.3 B for Bacman rehabilitation
• P0.3 B for Northern Negros to Nasulo (N2N) Relocation Project
• P0.3 B rehab due to typhoon Yolanda

P0.3 B payment for FG Hydro’s cash dividends P0.6 B interest, financing charges paid and payment of long term debts

27

Review of 1Q 2014 Financial Results

2

Current ratio improved due to higher current assets brought about by higher cash balance from Peso Bond issuance and term loan. Net debt-to-equity slightly increased mainly due to higher debt balance from the issuance of peso bonds and availment of term loan. Net debt-to-EBITDA increased mainly due to lower trailing 12-month EBITDA.

CURRENT RATIO IMPROVED WHILE BOTH NET-DEBT- TO EQUITY AND NET-DEBT-TO-EBITDA WEAKENED

• Mar. 2013
• Mar. 2014

2.07 2.41

Current Ratio

• Mar. 2013
• Mar. 2014

1.00 1.21

Net Debt-to-Equity

• Mar. 2013
• Mar. 2014

2.07 2.91

Net Debt-to-EBITDA*

*Trailing 12 months

28

GROWTH PROJECTS

29

Growth Projects

3

EDC’S GROWTH AGENDA

305 MW Palinpinon-

Tongonan in 2009

130 MW Bacman in

2010

 Unified Leyte IPPA  Mindanao 1 & 2 IPPA  87 MW and 63 MW

Burgos Wind to be commissioned in 4Q ’14 and 1Q ‘15

 Wind measurement

studies on-going in other prospects

 ~25 MW Nasulo to be

commissioned in 2H’14

 5 MW NNGP Plant

development is on-going

 ~120 MW for

commissioning by 2018

13 concessions

successfully acquired in Chile (6) and Peru (7)

Established local offices

in Latin America and Indonesia

1 2 3 4

ACQUIRE DEVELOP CONQUER DIVERSIFY

Win key government geothermal privatization projects Install 261MW of greenfield geothermal capacity to address new demand Establish viable

• perations in

Asia, Latin America, and Africa Build 200MW

• f wind capacity,

while expanding RE portfolio

30

Growth Projects

3

LOCAL GEOTHERMAL PROJECTS WILL BE THE MAIN SOURCE OF GROWTH IN THE MEDIUM TERM

EXECUTION ADVANCED EXPLORATION RESOURCE CONFIRMATION

2 1 1 1 2 1 3 3 2 4 5 3 PROJECT CAPACITY 2014 2015 2016 2017

Beyond

2018

Nasulo 20 MW X

• No. Negros

6 MW X Bacman 3 30+ MW X Botong-Rangas 40+ MW X Mindanao 3 50 MW X Labo 25 MW X Kayabon 50 MW X Dauin 40 MW X

2

1 2 3 4 5 1 3 2 2 1 1 2 3

FRONTIER AREAS

Mandalangan, Negros Occidental Lakewood, Zamboanga del Sur Ampiro, Misamis Occidental Balingasag, Misamis Oriental

• Mt. Zion, North Cotabato

5 FRONTIER GEOTHERMAL AREAS ADDING TO THE 261 MW IN THE EXPANSION SPACE

31

Growth Projects

3

NNGP TO NASULO (N2N) RELOCATION PROJECT

NASULO WILL CONTRIBUTE AN ADDITIONAL 20~25 MW, OR ~PHP800-900MM IN REVENUES ANNUALLY

Nasulo began commissioning runs starting April

Source: Philippine Electricity Market Corporation (PEMC) 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 1-May 10-May 19-May 28-May 6-Jun

ELECTRICITY GENERATION

(in gWh)

32

Growth Projects

3

BACMAN BUSINESS RECOVERY PLAN

INTERIM FIX PERMANENT FIX

SULZER

repair Bacman Units 1 &2

TOSHIBA

manufacture new hot steam path

Source: Philippine Electricity Market Corporation (PEMC)

UNIT 3 IS OPERATED AT RATED CAPACITY STARTING JUNE 2013, DESPITE THE 5 TO 7 MW INITIAL GUIDANCE

INTERIM FIX PERMANENT FIX

COD* CAPEX COD* CAPEX UNIT 1 28-Jan ’14 $1.8M 4Q ’14 $8.5M UNIT 2 2Q ’14 $1.8M 1Q ‘15 $7.8M

*Commercial Operation Date

0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60

9-May 10-May 11-May 12-May 13-May 14-May 15-May 16-May 17-May 18-May 19-May 20-May 21-May 22-May 23-May 24-May 25-May 26-May 27-May 28-May 29-May 30-May 31-May 1-Jun 2-Jun 3-Jun 4-Jun 5-Jun 6-Jun 7-Jun 8-Jun 9-Jun

ELECTRICITY GENERATION

(in gWh)

Jan Feb Mar Apr May Jun

Unit 1 Unit 2 Unit 3

           

- Operational

 

33

Growth Projects

3

150 MW BURGOS WIND PROJECT

Signed deal with Vestas of Denmark

COD STAGE 2 63 MW

MAR 2013

1Q 2015 4Q 2014

COD STAGE 1 87 MW

Project Components:

50 units Vestas V90 3MW WTG (VESTAS) Substation for 150 MW (Alsthom) 42 km. transmission line for 150 MW (First

Balfour)

Feed in tarriff: P 8.53 per kWh (w/ escalation) Annual Generation (ave.): 365.5 gWh Annual Revenues (est’d.) : P 3.0 billion

34

Growth Projects

3

OVERSEAS EXPANSION - INDONESIA

KOKOY VILLEGAS, VP RAY JARQUE, AVP

INDONESIA TEAM

GRAHO NYABU GEOTHERMAL PROSPECT

MANILA TEAM INDONESIA OFFICE

JEFF CARANTO, TECHNICAL ANNE TAYAG, LEGAL TRISHIA MANIPON, COMMERCIAL CHINIE DEFENSOR, COMMERCIAL SENO WICAKSONO, ADMIN TJARINTO, OFFICE MANAGER SHEARLY DIANA, EXECUTIVE ASST.

Results from EDC’s completed survey activities for Graho Nyabu in Sumatra shall be used by Indonesian Ministry of Energy and Mineral Resources for its upcoming tender of the Graho Nyabu concession Currently, in partnership discussions with a geothermal concession holder for a JV in one of their geothermal sites (~ 220 MW at an ~ US 1.0 billion development cost)

35

Growth Projects

3

LATIN AMERICA WILL BE A DRIVER OF LONG-TERM GROWTH FOR EDC

• Large portfolio of early-stage assets
• Development team with significant experience in

both geothermal and Latin America

• Long-term commitment to bring projects to

completion

• Presence in Latin America provides window to other

RE opportunities

36

Growth Projects

3

CHILE AND PERU PROVIDE THE RECIPE FOR SUCCESSFUL GEOTHERMAL DEVELOPMENT

Promising Geothermal Potential Estimates ~1700 MW  Estimates ~3,000 MW Growing Power Market Peak demand of 10 GW growing at 5% p.a. Highest prices in South America Peak demand of 6 GW growing at 8- 9 % p.a. Clear Regulatory Framework for Power and RE Market Driven Open Access Market Driven Open Access Strong Government Support for RE 20% non-conventional renewable energy (NCRE) mix by 2025 7% NCRE mix by 2018 FiT auction system (up to USD 224/ MWh)

CHILE PERU

37

Growth Projects

3

Company (Entry into LatAm) Granted Sites Applications Peru Chile Peru Chile Alterra Power Corp (2008) 2 2 16 Hot Rock Ltd (2008) 5 1 3 12 EDC Applied/Bid Sites (2009) 3 4 4 TOTAL 7 6 23 16

EDC SEIZED THE OPPORTUNITY AND NOW HOLDS STAKES IN UP TO 13 CONCESSIONS AND 39 APPLICATIONS

38

Growth Projects

3

EDC HAS BUILT AN EXPERIENCED AND COMPETENT LEADERSHIP TEAM SUPPORTED BY STRONG LOCAL ORGANIZATIONS

COMBINED GEOTHERMAL EXPERIENCE OF: | 150 YEARS | 5,000 MW (OUT OF 11,000 MW) | 20 + COUNTRIES |

• A. Arman V. Lapus

Managing Director-LatAm Carlos Niño-Neira Country Manager - Peru Manuel Sanchez Country Manager - Chile David Sussman Resource Exploration Manager-LatAm Lian de Castro Business Development Director - LatAm Tim Smith Drilling Manager - Chile Manuel Ogena Senior Vice President GREG - EDC Philippines Tony Gray Project Manager-LatAm Andrew Whittome Chief Drilling Advisor EDC Philippines

39

Growth Projects

3

100 200 300 400 500 0% 20% 40% 60% 80% 100%

Project Risk Cost (USD MM) EDC’S EXPERIENCE AND INTERNAL PROCESSES ALLOW US TO CAREFULLY SCREEN ASSETS AND DEVELOP ONLY THOSE WITH THE HIGHEST CHANCES OF SUCCESS

Activity Desktop survey Permitting / EIS Go / No Go decision Infrastructure, exploration well drilling Go / No Go decision Development/ Production drilling Go / No Go decision Construction COMMISSIONING

Mariposa (exploration drilling) Bar length represent duration in years. Total years: 9 - 11 Peru (surface exploration)

CONDUCT PRELIMINARY STUDIES ASSESS COMMERCIAL VIABILITY SHORTLIST CLASS A SITES PURSUE ONLY “TOP TIER”

40

Growth Projects

3

WE ARE NOW EXECUTING AN EXPLORATION DRILLING PROGRAM IN MARIPOSA, ONE OF THE MOST ADVANCED GEOTHERMAL PROJECTS IN CHILE

Exploration Drilling Estimate: USD 30 MM Target COD MAP OF THE REGION GEOTHERMAL RESERVOIR AND DRILLING TARGETS CIVIL WORKS Q4 ‘15 Q2 ‘20 Site Development Budget: USD 15 MM Q1 ‘14

Base Camp 9 Road Rehab Drilling Materials

Santiago Mariposa

ESTIMATES FOR MARIPOSA PUT THE POTENTIAL SIZE OF THE RESERVOIR BETWEEN 50 TO 300 MW

41

RETURN TO SERVICE OF LEYTE POWER PLANTS

42

Return to Service of Leyte Power Plants

4

DAMAGED COOLING TOWER NOVEMBER 10, 2013 RESTORED COOLING TOWER DECEMBER 2, 2013

“We are extremely impressed by the caliber of the management at EDC and with the plan that has been developed for the recovery of their operations as quickly as possible.”- Insurance Adjuster “We can safely say that nothing of their recovery plan which we saw during our visit caused us any alarm and, in our opinion, they would be hard-pressed to find any better or faster strategy for minimizing their business interruption loss.” - Insurance Adjuster

RESTORATION OF TONGONAN UNIT 3

43

Return to Service of Leyte Power Plants

4

0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 7 15 24 42 45 50 70 102 104 123

POWER PLANT RESTORATION WAS DIVIDED BASED ON AVAILABILITY AND SOURCE OF MATERIALS

Dec 6, 18 & 25, 2013 - Arrival of chartered 747 freighters in Cebu Nov 8, 2013 Typhoon Yolanda

DAYS AFTER TYPHOON YOLANDA

Phase 1

With readily available parts/materials

MW

15 MW GENERATED FROM LEYTE PLANTS IN 7 DAYS;143MW IN 24 DAYS AFTER TYPHOON YOLANDA Phase 2

With parts/materials from local and foreign suppliers

Restored*

15.0 13.4 114.4 35.7 35.7 74.0 74.0 129.0 35.7 55.0

Restored*cum

15.0 28.4 142.8 178.5 214.2 288.2 362.2 491.2 526.9 581.9

Tongonan Topping 15.0 Malitbog Bottoming 13.4 Upper Mahiao 114.4 Tongonan Unit 35.7 Total 178.5 Tongonan (2 Units) 71.4 Malitbog 222.0 Mahanagdong A 110.0 Total 403.4 15.0 28.4 142.8 178.5 214.2 288.2 362.2 491.2 526.9 581.9

* Net Capacity

• Nov. 8’13
• Nov. 15’13
• Nov. 23’13
• Dec. 2’13
• Dec. 20’13
• Dec. 23 ’13
• Dec. 28’13
• Jan. 17’14
• Feb. 18’14
• Feb. 20’14
• Mar. 11’14

44

Return to Service of Leyte Power Plants

4

EXPEDITED DELIVERY OF OFF-THE-SHELF COOLING TOWER PARTS

Expedited delivery of off-the-shelf cooling tower parts from the US, Europe and China has abbreviated Leyte Plant outage As of March 11, 2014, 581.9 MW (net) to the grid vs. the pre- Yolanda dispatch of 581.9 MW

DEC 6, 18 & 25, 2013 - ARRIVAL OF CHARTERED 747 FREIGHTERS IN CEBU

45

Return to Service of Leyte Power Plants

4

COOLING TOWER CONFIGURATION

MALITBOG POWER PLANT

FAN STACK 1 CELL 28’ DIAMETER DESIGN Per Cooling Tower, per Unit

• No. of

Units Total Fan Stacks Blades per Fan Stacks Total Blades Fan Stack Cooling Tower TONGONAN 3 7 21 3 9 63 MALITBOG MAIN 8 8 64 3 24 192 Sub-total 6 33 255 30 ‘ DIAMETER DESIGN Fan Stacks Blades per

• No. of

Units Fan Stacks Total Blades Fan Stack Cooling Tower MAHANAGDONG A 7 8 56 2 14 112 MAHANAGDONG B 8 8 64 1 8 64 Sub-total 3 22 176 GRAND TOTAL 9 55* 431

Notes: 1. Mahanagdong B – n+1 (with spare cell) 2. 1 Cell consists of fan stacks, hubs , blades, drive shaft, etc. 3. Number of Cells = Number of Fan Stacks

46

Return to Service of Leyte Power Plants

4

EFFECTS OF TYPHOON YOLANDA IN LEYTE

• Visual inspection of the main power plants constituting the 650 MW revealed the following:

 Cooling towers of the Malitbog (232MW), Tongonan (112.5MW) & Mahanagdong (180MW) are inoperable.  Part of the cooling system of Upper Mahiao (130 MW) was damaged  Control systems of Tongonan, Mahanagdong and Upper Mahiao were water damaged.

• On February 14, 2014 PSALM informs EDC of the following:

 ULGEI has been selected as the Winning Bidder for Forty (40) Strips of Energy of the ULGPP at the bidded rate/price; and  PSALM accepts ULGEI’s decision not to accept the award as Winning Bidder for the Bulk Energy of the ULGPP

• The running total of capacity restored as of today is as follows:

Name of Plant Gross Capacity Restored Capacity Remarks Gross Net Tongonan 112.5 112.5 107.1 @ 37.5 MW per Dec. 19 disclosure Upper Mahiao and Optimization 175.9 144.0 142.8 @ 57.0 MW per Nov. 27 disclosure Mahanagdong 180.0 120.0 110.0 @ 60.0 MW per Feb. 18 disclosure Malitbog 232.5 232.5 222.0 @ 75.0 MW per Jan. 2 disclosure TOTAL 700.9 609.0 581.9

47

SUMMARY

48

Summary

5

MOVING FORWARD, WE OUTLINE THESE OBJECTIVES FOR 2014 AND BEYOND

Priorities 2014+ Objectives Domestic Organic Growth

Implement and commission the N2N project by 2014 Complete exploration well drilling needed to firm up resource estimates for Bacman 3 and Mindanao 3

Diversify to

• ther RE Sources

Overseas Expansion

Drill wells in Mariposa, Chile by 2015 and continue to look for prime geothermal sites in Peru and Indonesia either on our

• wn or in joint venture with existing concession holders

Balance Sheet Management

Term out forthcoming bullet maturities Lower further interest costs and continually manage currency risk exposure Commission 87 MW Burgos Wind Project Stage 1 by 4Q 2014 Commission 63 MW Burgos Wind Project Stage 2 by 1Q 2015

49

END OF PRESENTATION

www.energy.com.ph

50

APPENDICES

51

REVIEW OF FINANCIAL HIGHLIGHTS BY ASSET

52

Review of Financial Highlights by Asset

i

BCQs 29.9 BCQs 61.8 WESM 136.2 WESM 76.2

• Mar. 2013
• Mar. 2014

Sales Volume

(GWh)

• 16.9%

PHP107 Million 3.83 5.21

• Mar. 2013
• Mar. 2014
• Ave. Tariff

(PHP/KWh) + 36.0% PHP190 Million

984 848

Ancillary Services, 348 Ancillary Services, 379

• Mar. 2013
• Mar. 2014

Revenues

(PHP Million)

• 13.9%

136 708 556

• Mar. 2013
• Mar. 2014

Net Income

(PHP Million)

• 21.5%

152

FG HYDRO’S REVENUE AND NET INCOME DECREASED DUE TO LOWER REVENUES BROUGHT BY ADJUSTMENT IN 2013 WESM PRICES

Drivers Higher Ancillary services 31 Higher tariff 190 Lower volume (107) 2013 Catch up entry for WESM price adjustment (250) (136)

Contracted 76 9% WESM 393 46% Ancillary 379 45%

1Q 2014 Revenues

(Php Millions)

Drivers Lower revenues (136) Higher expenses mainly interest expense (16) (152) Net income attributable to: Non-controlling interest 148 EDC 408 556

53

Review of Financial Highlights by Asset

i

549 527

• Mar. 2013
• Mar. 2014

Sales Volume

(GWh) PHP105 Million

• 3.9%

2,693 2,611

• Mar. 2013
• Mar. 2014

Revenues

(PHP Million)

• 3.1%

82 1,520 1,237

• Mar. 2013
• Mar. 2014

Net Income

(PHP Million)

• 18.6%

283

4.91 4.95

• Mar. 2013
• Mar. 2014
• Ave. Tariff

(PHP/KWh) Php23 Million + 0.9%

GCGI’s INTEGRATED REVENUE AND NET INCOME DECREASED DUE TO LOWER SALES VOLUME FROM TONGONAN AND HIGHER OPEX

Drivers Higher tariff 23 Lower volume (105) (82) Drivers Lower revenues (82) Higher operating expenses (137) Others, mainly foreign exchange loss (84) Lower provision for income tax 20 (283)

Contracted 2,441 94% WESM 169 6%

1Q 2014 Revenues

(Php Million)

54

Review of Financial Highlights by Asset

i

77 36

Unit 1 Unit 3

Sales Volume

(GWh)

83 453

• Mar. 2013
• Mar. 2014

Revenues

(PHP Million)

+ 445.8%

370 (254) (176)

• Mar. 2013
• Mar. 2014

Net Loss

(PHP Million)

• 30.8%

78

3.99 3.99

Unit 1 Unit 3

• Ave. Tariff

(PHP/KWh)

HIGHER REVENUES RESULTED TO LOWER NET LOSS FOR BACMAN

Drivers Bacman Unit 1 308 Bacman Unit 2 145 Trading loss in 2014 vs. gain in 2013 (83) 370

Contracted 117 26% WESM 336 74%

1Q 2014 Revenues

(Php Million)

Drivers Higher revenues 370 Higher operating expenses (255) Others, mainly foreign exchange loss (37) (78)

55

Review of Financial Highlights by Asset

i

458 589

• Mar. 2013
• Mar. 2014

Revenues

(PHP Million)

+ 28.6%

131 90 181

• Mar. 2013
• Mar. 2014

Net Income

(PHP Million)

+ 102.1%

91

2.71 2.99

• Mar. 2013
• Mar. 2014
• Ave. Tariff

(PHP/KWh) PHP55 Million + 10.4% 197 197

• Mar. 2013
• Mar. 2014

Sales Volume

(GWh) Flat

REVENUES AND NET INCOME FROM MINDANAO I & II INCREASED DUE TO HIGHER TARIFF AND THE ABSENCE OF SHORTFALL ADJUSTMENT IN 2014

100% Contracted

NPC Revenues

Drivers Higher tariff 55 Q1 2013 adjustment for prior year’s shortfall generation (none in 2014) 76 131 Drivers Higher revenues 131 Higher operating expenses (21) Others (mainly foreign exchange loss and provision for income tax) (19) (91)

56

Review of Financial Highlights by Asset

i

2,722 2,637

• Mar. 2013
• Mar. 2014

Revenues

(PHP Million)

• 3.1%

1,031 759

• Mar. 2013
• Mar. 2014

Net Income

(PHP Million)

• 26.3%

2.91 3.12

• Mar. 2013
• Mar. 2014
• Ave. Tariff

(PHP/KWh) + 7.2% 936 845

• Mar. 2013
• Mar. 2014

Sales Volume

(GWh)

• 9.7%

PHP263 Million PHP178 Million

REVENUES AND NET INCOME FROM UNIFIED LEYTE DECREASES AS SALES VOLUME DROPPED DUE TO TYPHOON YOLANDA AND FOREX LOSS

85 272

100% Contracted

NPC Revenues

Drivers Higher tariff 178 Lower volume (263) (85) Drivers Lower revenues (85) Higher operating expenses (81) Others, mainly foreign exchange loss (106) (272)

57

STAGES OF GEOTHERMAL EXPLORATION

58

Stages of Geothermal Development

ii

VOLCANOES, HOT SPRINGS, FUMAROLES AND SOLFATARAS INDICATE THE PRESENCE OF GEOTHERMAL RESOURCES

Temperature/Chemical Measurements Surface Thermal Manifestations

59

Stages of Geothermal Development

ii

Geophysical Surveys

GEOSCIENTIFIC SURFACE STUDIES DELIMIT THE GEOTHERMAL PROSPECT AND IDENTIFY TARGETS FOR EXPLORATION DRILLING

Deep Well Drilling

60

Stages of Geothermal Development

ii

DISCHARGE TESTING OF WELLS CONFIRM THE CHEMISTRY OF THE RESERVOIR FLUIDS AND THE PRODUCTIVITY OF THE WELLS

Well Discharge Testing

61

Stages of Geothermal Development

ii

• Geothermal Exploration

and Development

• Reservoir Engineering

and Management

• Engineering Design
• Construction
• Environmental

Management

• Energy Research and

Development

320oC 180oC 165oC Geothermal fluid extracted Geothermal water injected Geowater recycled

VERTICAL INTEGRATION OF GEOTHERMAL SERVICES

OUR IN-HOUSE EXPERTISE SPANS THE ENTIRE GEOTHERMAL VALUE CHAIN: FROM EXPLORATION TO POWER PLANT OPERATIONS

62

WESM

63

WESM iii

2010 2011

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave Luz Ave

5.64 7.58 5.20 4.11 4.05 3.83 3.76 3.78 4.09 4.08 3.24 3.24 3.37 4.16 3.93 3.83

3.79 Luz Ave Peak

9.53 12.95 8.21 6.11 6.16 5.66 5.79 5.67 6.37 6.58 5.03 5.03 5.42 6.72 6.06 5.75

5.86 Vis Ave

3.60 2.26 3.08 2.59 2.70 4.22 4.07 3.30 3.30 3.51 4.87 4.29 4.18

3.54 Vis Ave Peak

5.63 3.22 4.42 3.30 3.44 6.60 6.59 5.18 5.18 5.80 7.76 6.72 6.47

5.40

• 6.00
• 4.00
• 2.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 22.00

P/KWh

High WESM prices due to tight supply caused by: (1) Malampaya outage; (2) DOE mandated Power Plants to conduct maintenance before May elections, (3) Prolonged El Nino lowered hydro power generation Lower Demand due to Cold Season and Extended Holidays Lower prices due to “Limay Must-Run” situation Lower prices with normalized supply in the grid Baseload Plant Outages (Masinloc, Calaca, Sual)

WESM WEEKLY AVERAGE PRICES (JANUARY 1, 2009 TO DECEMBER 31, 2011)

Source: Philippine Electricity Market Corporation

Luzon Baseload Plant Outages Increased demand due to Summer Season Merging of WESM LUZON – VISAYAS

FROM THE SPIKE IN ELECTRICITY PRICES IN 1Q 2010, WESM PRICES HAVE SINCE THEN MODERATED

64

WESM iii

PRICES PEAKED IN MAY 2011, WHEN DEMAND INCREASED DUE TO HIGH TEMPERATURES, AND IN OCTOBER 2011, JUNE 2012 AND NOVEMBER 2013 GIVEN TIGHT SUPPLY IN THE MARKET

Jan-11 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-12 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-13 Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Jan-14 Feb Mar Luzon 3.68 3.06 2.38 3.26 6.01 3.90 4.48 3.67 3.77 6.98 5.02 5.03 5.03 3.40 4.43 3.72 5.37 8.12 7.70 2.39 4.30 6.40 5.40 6.10 3.04 2.79 4.89 6.99 6.02 4.31 2.87 3.20 2.68 6.64 16.12 18.19 2.31 2.49 6.79 Visayas 2.82 3.43 2.72 2.69 5.60 3.86 4.51 3.78 3.94 5.89 5.46 5.32 4.71 3.80 4.58 3.67 5.37 8.13 7.49 2.60 4.72 5.60 5.50 6.20 3.25 2.63 4.23 7.16 6.01 4.05 2.88 2.95 3.03 6.32 3.18

• 2.00

4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00

2011 – 2014 Luzon and Visayas Monthly Ave Prices (ex-Ante)

* Visayas grid is under market suspension starting Nov. 8, 2013 due to the power system disturbance caused by Typhoon Yolanda * * * *