Delivering the total digital experience. PLDT Inc. Nine Months 2016 Financial and Operating Results

Transcription

1 Delivering the total digital experience PLDT Inc. Nine Months 2016 Financial and Operating Results 14 th November

2 PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights P125.4bn Revenues -2% (P2.5bn) Wireless Revenues P80.6bn -7% (P6.2bn) Fixed Line Revenues P54.1bn +6% +P3.1bn Home Revenues P24.5bn +9% +P2.1bn Individual Revenues P58.4bn -5% (P3.0bn) Enterprise Revenues P24.4bn +10% +P2.2bn International Revenues P17.5bn -16% (P3.2bn) Voyager Service Revenues P957mn** -2% (P23mn) Service Revenues (net of interconnection costs: P7.1bn) P111.8bn -2% (P2.5bn) Wireless Service Revenues* P71.0bn -8% (P6.0bn) Fixed Line Service Revenues* P46.8bn +7% +P3.1bn Home* Service Revenues Individual* Service Revenues Enterprise* Service Revenues International* Service Revenues Voyager* Service Revenues P21.9bn +8% +P1.6bn P51.3bn -6% (P3.1bn) P22.5bn +10% +P2.1bn P15.6bn -14% (P2.6bn) P912mn** +6% +P54mn Service Revenues* (excluding ILD/NLD: P10.8bn***) - (P0.1bn) P101.0bn Wireless (ex-ild: P6.3bn) Service Revenues* P64.7bn -6% (P4.0bn) Fixed Line (ex-ild/nld: P4.6bn) Service Revenues* P42.2bn +9% +P3.6bn * Net of interconnection costs ** Includes P503mn from Feb July 2016 when einnovations (PayMaya) was deconsolidated *** Gross ILD/NLD of P12.3bn less P1.5bn in interconnection costs 2

3 PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights P45.7bn EBITDA -15% (P8.3bn) EBITDA Margin 38% (9M15: 44%) EBITDA Wireless P24.3bn -31% (P10.9bn) EBITDA Margin 32% (9M15: 42%) Lower service revenues* by P6.0bn or 8% Reduction in cash opex* by P1.9bn or 6% Rise in subsidies and Cost of Content by P2.1bn or 32% Higher provisions by P4.8bn or 271% EBITDA Fixed Line P20.3bn +13% +P2.4bn EBITDA Margin 40% (9M15: 37%) Rise in service revenues* by P3.1bn or 7% Increase in cash opex* by P0.7bn or 3% Higher non-service revenues (net) by P0.1bn or 16% Rise in provisions by P0.1bn or 12% Core Income P21.7bn -20% (P5.3bn) Core Income (normalized**) P16.0bn -33% (P7.9bn) * Net of interconnection costs ** Excluding asset sales and impact of exceptional provisions and subsidies 3

4 PLDT Group: Service Revenues Consolidated service revenues declined by P2.5bn or 2% year-on-year to P111.8bn in 9M16, with data, broadband and digital platform revenues of P44.6bn up by 19% and accounting for 40% of consolidated service revenues* Fixed Line* (Php in billions) 43.7 Data and Broadband % Higher by P3.1bn or 7% Domestic voice and Others % ILD and NLD % 46.8 Service Revenue Mix 9M15 9M16 Data/Broadband 57% 59% Domestic Voice and others 32% 31% ILD/NLD 11% 10% Service Revenues 9M15 9M16 Data/Broadband 24,811 27,743 Domestic Voice and others 13,846 14,486 ILD/NLD 4,993 4,577 Total 43,650 46,806 9M M Q16 q-o-q increase of P371mn is the highest q-o-q growth since 1Q15 Wireless* (Php in billions) 76.9 * Net of interconnection costs Data, broadband, digital platforms % Lower by P6.0bn or 8% SMS and VAS, Cellular domestic voice and others % Cellular International voice % M M 2016 Service Revenue Mix 9M15 9M16 Data/Broadband/Digital Platforms 23% 30% SMS/Domestic Voice/Others 66% 61% International Voice 11% 9% Service Revenues 9M15 9M16 Data/Broadband/Digital Platforms 17,549 21,396 SMS and VAS/Domestic Voice/Others 51,182 43,298 International Voice 8,203 6,270 Total 76,934 70,964 In 3Q16, data/broadband already accounted for 32% of total wireless service revenues from 30% in 2Q16 and 28% in 3Q15 4

5 PLDT Group: Consolidated EBITDA (Php in billions) % Lower Svc Rev* Higher Subsidies Higher Cash Opex* Higher Provns Q-o-Q: higher by P0.8bn or 6% Lower Svc Rev* Lower Subsidies Lower Cash Opex* Lower Provns Improvement of P2.3bn 9M M Q Q Q 2016 Margins 44% 38% Margins 41% 35% 39% EBITDA of P45.7bn at 9M16 lower by 15% or P8.3bn from 9M15 due to: Lower service revenues (net of interconnection) by P2.5bn Higher expenses related to initiatives to grow the data business and as part of shaping the customers data habit Increase in provisions for receivables and inventory by P4.9bn (including P1.5bn of costs related to the migration of the Sun platform) Rise in subsidies and cost of content by P2.0bn Decline in cash opex by P1.0bn (including a reduction of P0.9bn in selling and promo expenses) At end September 2016, Fixed Line EBITDA rose by P2.4bn or 13% year-on-year to P20.3bn, while Wireless EBITDA declined by P10.9bn or 31% to P24.3bn EBITDA of P15.0bn for 3Q16 higher by 6% or P0.8bn from 2Q16 Reflects deliberate efforts to manage opex, subsidies and provisions Fixed Line EBITDA of P7.1bn was higher by P0.6bn or 9% vs. 2Q16 following increases in revenues and reduction in operating costs Wireless EBITDA rose by P0.2bn or 2% quarter-on-quarter to P7.4bn Consolidated EBITDA margin at 38%, with 3Q16 EBITDA margin higher at 39% from 35% in 2Q16 Fixed Line: 40% at 9M16, 42% at 3Q16 (vs 3Q15: 42%; 2Q16: 39%) Wireless: 32% at 9M16, 31% at 3Q16 (vs 3Q15: 41%; 2Q16: 28%) * Net of interconnection costs 5

6 PLDT Group: Core and reported net income (Php in billions) Core Income 27.1 EBITDA -8.3 Net equity in earnings -1.3 Lower by P5.3bn or 20% Fin Costs - Net -0.9 Non-cash expenses -1.4 Misc Income +5.4 Provn for Inc Taxes Decline in core income for 9M16 of P5.3bn or 20% year-on-year due to: Lower EBITDA Costs resulting from higher capex Increase in depreciation by P1.4bn Rise in net financing costs by P0.9bn Gain from sale of Beacon of P7.4bn in 2016 vs P3.2bn in 2015, partly offset by lower equity in earnings due to the reduced ownership in Meralco Equity in losses of P0.5bn from the SMC telco businesses 9M M 2016 Core income for 9M16 at P16.0bn, normalized to exclude asset sales and elevated levels of provisions and subsidies Reported net income Core Income 21.7 Forex and Deriv Losses, net -0.5 Asset Impairment (Rocket Internet) -5.4 Others Reported Income M M 2016 Reported net income of P15.9bn at end September 2016 includes an impairment of Rocket Internet investment of P5.4bn in 1H16 No further impairment booked in 3Q16 P1.3bn increase in value of Rocket Investment from end of 1H16 to P10.5bn ( 19.13/share) booked under Other Comprehensive Income in 3Q16 (not P&L) Rocket Internet updates: Rocket focused on improving profitability of its companies while supporting their growth Streamlining operations and portfolio From initial listing on the Entry Standard, Rocket now trading on the regulated market (Prime Standard) of the Frankfurt Stock Exchange Included in the SDAX (50 non-tech small caps listed on the Frankfurt Stock Exchange) 6

7 PLDT Group: Debt Profile (US$ in billions) Debt Balance Debt Maturities M2016 Debt Balance* Cash & Short-term Investments Net Debt Net Debt/EBITDA**: 1.05x 0.9x 1.35x 1.62x 2.16x * Total debt based on nominal debt amount ** Internal target: 2.0x net debt to EBITDA (US$ in millions, as of end September 30, 2016) Total: US$3,331mn , to 2026 Debt maturities to total debt: 2% 20% 9% 12% 11% 13% 33% Net debt and net debt to EBITDA as of end September 2016 stood at US$2.8bn and 2.16x At end 9M16, gross debt amounted to US$3.3bn 37% of gross debt is US$ denominated Taking into account our US$ cash holdings and hedges, only US$0.4bn or 11% of total debt is unhedged 67% are fixed-rate loans, while 33% are floating-rate loans; postinterest rate swaps: 89% fixed, 11% floating Average interest cost (pre-tax) of 4.4% for end September 2016 (FY15: 4.2%) Refinancing facilities for 2017 maturities will be in place by December 2016 US$470m of committed refinancing facilities already signed Balance of US$199m to be finalized early December Other than US$25m, 2017 maturities to be refinanced in pesos Refinancing facilities at lower interest rates compared with maturing loans which include the 8.375% US$ bond Efforts are focused on managing leverage/debt levels which have increased due to higher capex and the SMC telco acquisition Reduced regular dividend payout to 60% (from 75%) Acquisition of SMC telco business partly funded from sale of assets Evaluating options for additional asset sales As of end September 2016, PLDT s investment grade ratings remained unchanged from YE15 Ratings Agencies Long-Term Foreign Issuer Rating Long-term Local Issuer Rating Outlook Fitch * stable (FC IDR); BBB BBB+ negative (LC IDR) Moody's Baa2 Baa2 stable Standard and Poor's / S&P National BBB+ axa+ stable * On 23 October 2016, Fitch revised the outlook for the Philippine telecom sector to negative from stable, with a similar negative outlook for PLDT s Long-Term Local-Currency Issuer Default Rating (LC IDR) 7

8 PLDT Group: Capex (Php in billions) Note: BPO capex up to 2012 only Fixed Line Wireless Guidance % of Capex to total service revenues: 21% 23% 18% 21% 26% up to 30% M M 2016 PLDT Group s overarching objective is to improve the customer s overall data experience Network dominance and reliability is the key enabler in the delivery of a superior digital customer experience to Consumer and Enterprise clients In addition to the P302bn or US$6.7bn in capex spent from , PLDT is expected to invest another US$1bn or P48bn in capex includes additional P5bn or US$100mn to utilize frequencies acquired from SMC Multi-year network build out includes, among others: Building out of a 4G-centric network utilizing existing spectrum portfolio (including the recently acquired 700MHz) 4G technology presents opportunities for cost and operating efficiencies vs 2G and 3G Expansion of coverage (including indoor penetration) and data capacity using 3G and 4G/LTE Wider deployment of LTE-A carrier aggregation following Smart s industry-first rollout in Boracay Future-proofing the network for 5G with provisioning already in the design Full integration of the Sun and Smart networks in Cebu and Metro Manila for improved coverage and cost/operational efficiencies Will enable spectrum re-farming that will optimize spectrum utilization for 2G, 3G and 4G users Additional fiber optic cabling (FOC) to augment existing fiber assets of over 120,000 kms. to fortify network resiliency and redundancy for greater operational stability and reliability Expansion of international connectivity combined with on-shore caching to improve internet speeds and customer experience Fourth cable landing station being constructed in Davao to provide additional capacity and resiliency Migration to new data centers at Tier 3 to improve service availability to 99.99% PLDT has committed to support the government s desire to improve the country s internet services Roll-out of WiFi hotspots in transport hubs (11 airports to-date, including the NAIA), bus terminals, government offices Immediate build out of network using the spectrum acquired from SMC to achieve greater coverage and improved speeds Commitment to achieve 95% LTE population coverage by

9 PLDT Group: Network Initiatives Network Improvement Program to improve quality, coverage and internet speed 9

10 PLDT Group: Progress on Network Initiatives METRO DAVAO REFARMING COMPLETED METRO DAVAO 2G 2G Base Stations (per band) Voice/Data Capacity (TRX) 3G 3G Base Stations (per band) Voice/Data Capacity (CE) 3G Simultaneous Users LTE LTE Base Stations (per band) LTE Simultaneous Users Data Capacity (Mbps) BEFORE 239 3,887 BEFORE ,784 72,512 BEFORE 56 5,600 2,800 NOW % INC % % NOW % INC % 265,280 38% 246, % NOW NOTE: LTE including 1site L1800 and 5sites L700 after refarm % INC % 33, % 18, % ADDITIONAL TRAFFIC INCREASE Voice Traffic Increment 2G % 3G 15.42% Data Volume Increment 3G 15.39% 4G 42.68% Traffic is rebalanced : 2G Voice to 3G Data Traffic to 4G Significant gains coverage and capacity achieved by utilizing only the existing sites. 10

11 PLDT Group: Progress on Network Initiatives METRO DAVAO: Significant coverage improvements BEFORE AFTER BEFORE AFTER 3G BEFORE AFTER Indoor 23% 45% Outdoor 97% 99% LTE BEFORE AFTER Indoor 11% 66% Outdoor 84% 98% 11

12 DATA PLDT Group: Progress on Network Initiatives INTERNAL CX TEST: Validated customer experience after Davao refarming BEFORE May 24 June 9 AFTER September 19 - October 27 BEFORE May 24 June 9 AFTER September 19 - October 27 Download Speed 1 Mbps 5.7 Mbps 3.7 Mbps 17.2 Mbps Upload Speed 1.4 Mbps 1.9 Mbps 2.6 Mbps 5.9 Mbps 12

13 PLDT Group: Next steps 700MHz Finalise integration of SUN/SMART network and spectrum refarming for CEBU (Q4/16) and NCR region (Q1/17) yielding significantly better quality, outdoor/indoor coverage and internet speed, as proven in Boracay and Davao Continue to improve overall network quality, capacity and bandwidth nationwide, and continue to enhance fiber resiliency and redundancy of our backbone Continue to rollout 700 MHz LTE coverage (Target 300 sites in Q4/16) as part of our plan to cover 95% of population with LTE by 2018 Aggressively rollout fiber to the home, and initiate upgrade of DSL connections with fiber speed (using G.Fast and GigaWire technologies) Launch of the first service using our new digital service delivery stack based on Matrixx online charging platform Finalise rollout of telco-grade WiFi in 22 airports (Q4), 4 Seaports (Q4) and numerous public buildings and commuting areas (ongoing) 13

14 Consumer Wireless Business 14

15 Consumer Wireless Business 15

16 Consumer Wireless Business 16

17 Consumer Wireless Business 17

18 HOME Business 18

19 HOME Business 19

20 HOME Business 20

21 Enterprise Business 21

22 Enterprise Business 22

23 23

24 24

25 25

26 26

27 PLDT Group: Updated Guidance for 2016 EBITDA: P60bn Lower by P4bn from previous guidance Low single digit growth in consolidated service revenues Double-digit growth in data/broadband to continue Anticipated declines in toll, cellular voice and SMS revenues Expected cost increases to support efforts to grow data/broadband business and to stabilize market share losses Includes higher provisions and subsidies to stimulate data adoption/usage and from ramping up our postpaid business Core Income: P28bn Similar to original guidance of P28bn due to: Decline in EBITDA Net gain from sale of 25% interest in Beacon offset by lower equity in earnings in Beacon Increase in financing costs due to higher capex Equity in losses from SMC telco business Capex: P48bn Increase of P5bn (US$100mn) from the original capex guidance of P43bn Additional capex related to the roll-out of network using the newly acquired frequencies from SMC Dividend Payout: 60% Updated dividend policy: Regular dividend payout of 60% of core income To determine at the end of the year the payout of any special dividends Takes into consideration: Elevated capex levels in 2016 and 2017 Plans to invest in new adjacent businesses that will complement the current business and provide future sources of profits and dividends Management of cash and gearing levels Our Financial Pivot Normalized Core Income Underlying EBITDA P20bn P60bn 27

28 Other Details 28

29 Updates: Acquisition of SMC telco business Tender offer by Vega Telecom at P2.20/share to minority shareholders of Liberty Telecom completed 107.0mn shares tendered representing 8.3% of total common shares outstanding Vega ownership to reach 95.45% after completion of tender offer Intention to delist filed with PSE on 23 August 2016 Status of the case filed vs the Philippine Competition Commission (PCC) Court of Appeals (CA) granted PLDT s request for a Temporary Restraining Order (TRO) against the PCC s review of the transaction Case is for decision of the CA Second payment of P6.6bn due in December 2016 (financing in place); with final payment of P6.6bn due in May

30 PLDT Group: Consolidated Service Revenues* (Php in billions) Service Revenue Mix 9M15 9M16 Data/Broadband/Digital Platforms 33% 40% SMS and VAS/Domestic Voice/Others 56% 50% International Voice 11% 10% Service Revenues 9M15 9M16 Data/Broadband/Digital Platforms 37,453 44,603 SMS and VAS/Domestic Voice/Others 63,649 56,416 International Voice 13,262 10,811 Total 114, ,830 Lower by P2.5bn or 2% Data, Broadband and Digital Platforms SMS and VAS, Voice Domestic and Others ILD and NLD +7.2 (7.2) (2.5) +19% -11% % M M 2016 Data/broadband/digital platform revenues contributed 42% to total consolidated service revenues* in 3Q16 from 40% in 2Q16 and 35% in 3Q15 * Net of interconnection costs 30

31 Data and broadband Consolidated Revenues (Php in billions) 9M16 (vs 9M15) % 13.8 Fixed Broadband % 12.5 Mobile Internet % 9.6 Corp. Data % 8.4 Wireless Broadband % to total Data and Broadband Consolidated Revenues: 31% 28% 22% 19% % M 2016 Wireless Broadband Fixed Broadband Mobile Internet Corp. Data Q15 +13% % % % % 2.6 2Q16 3Q16 Y-o-Y +9% +30% +16% -8% Mobile Internet Mobile internet revenues rose by P3.9bn or 45% to P12.5bn Better data monetization in 9M16 as a 43% rise in usage resulted in a 45% growth in revenues (vs: 139% growth in usage and a 42% increase in revenues in 9M15) Data usage improved by 43% to 104,045 terabytes in 9M16 14% quarter-on-quarter growth in 3Q16 and 45% year-on-year Smartphone penetration: approximately 50% Focus: Enable and accelerate data adoption to drive usage Recent launch of O+ Presto 700 LTE at P2,188 bundled with P300 load (includes 100mb of data per month for 1 year) Giga Surf 50 and Data Sharing Plan Partnership with ABS-CBN s iwant TV Corporate Data and Data Centers Corporate data and data center revenues of P9.6bn were higher by P1.4bn or 17% PLDT has the nation s largest rack capacity with 7 data centers and nearly 7,000 racks In July 2016, PLDT opened VITRO Makati, the largest data center in the Philippines By end 2016, PLDT to open new data centers in Clark and in Davao Fixed Broadband Fixed broadband revenues grew by P1.9bn or 16% to P13.8bn Fixed broadband subscriber base stood over 1.4mn, with net adds of over 182,000 or 15% year-on-year or over 151,000 or 12% from YE15 Value proposition: to enable the HOME to the future Connectivity + entertainment + convenience + peace-of-mind Enable via devices: Telpad, TVolution, FamCam Triple-play (fixed line, broadband, IPTV) and quad-play (including mobile) plans available, including data sharing plans Range of speeds, including high-speed fiber services Launch of various partnerships in retail and in entertainment Wireless Broadband Wireless broadband revenues (dongles and home broadband) rose by P0.4bn or 5% to P8.4bn Wireless broadband subscriber base at 3.8mn, with net adds of over 47,000 or 1% from 3Q15 Decline of about 96,000 subscribers partly due to a shift to fixed line broadband subscriptions 31

32 Appendix 32

33 Subscriber Data: Cellular Cellular Subscribers by category: CELLULAR Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % Prepaid 59,116,807 61,479,780 61,484,747 61,980,425 64,082,775 (4,965,968) -8% (2,863,618) -5% (495,678) -1% (4,967) - (2,362,973) -4% Smart Prepaid 20,911,897 21,500,966 22,224,447 22,892,303 23,390,886 (2,478,989) -11% (1,980,406) -9% (667,856) -3% (723,481) -3% (589,069) -3% Sun Prepaid 8,353,338 9,115,368 9,940,900 11,033,962 12,983,058 (4,629,720) -36% (2,680,624) -24% (1,093,062) -10% (825,532) -8% (762,030) -9% TNT 29,851,572 30,863,446 29,319,400 28,054,160 27,708,831 2,142,741 8% 1,797,412 6% 1,265,240 5% 1,544,046 5% (1,011,874) -3% Postpaid 2,693,714 2,993,990 2,964,639 2,957,649 2,920,068 (226,354) -8% (263,935) -9% 6,990-29,351 1% (300,276) -11% Smart Postpaid 1,262,253 1,315,097 1,327,439 1,229,726 1,183,996 78,257 7% 32,527 3% 97,713 8% (12,342) -1% (52,844) -4% Sun Postpaid 1,431,461 1,678,893 1,637,200 1,727,923 1,736,072 (304,611) -18% (296,462) -17% (90,723) -5% 41,693 3% (247,432) -17% Total Cellular Subscribers Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 3Q16 vs 3Q15 3Q16 vs YE2015 Net Adds 61,810,521 64,473,770 64,449,386 64,938,074 67,002,843 (5,192,322) -8% (3,127,553) -5% (488,688) -1% 24,384 - (2,663,249) -4% Cellular Subscribers by brand: CELLULAR Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % Smart 22,174,150 22,816,063 23,551,886 24,122,029 24,574,882 (2,400,732) -10% (1,947,879) -8% (570,143) -2% (735,823) -3% (641,913) -3% Smart Prepaid 20,911,897 21,500,966 22,224,447 22,892,303 23,390,886 (2,478,989) -11% (1,980,406) -9% (667,856) -3% (723,481) -3% (589,069) -3% Smart Postpaid 1,262,253 1,315,097 1,327,439 1,229,726 1,183,996 78,257 7% 32,527 3% 97,713 8% (12,342) -1% (52,844) -4% TNT 29,851,572 30,863,446 29,319,400 28,054,160 27,708,831 2,142,741 8% 1,797,412 6% 1,265,240 5% 1,544,046 5% (1,011,874) -3% Sun Cellular 9,784,799 10,794,261 11,578,100 12,761,885 14,719,130 (4,934,331) -34% (2,977,086) -23% (1,183,785) -9% (783,839) -7% (1,009,462) -10% Sun Prepaid 8,353,338 9,115,368 9,940,900 11,033,962 12,983,058 (4,629,720) -36% (2,680,624) -24% (1,093,062) -10% (825,532) -8% (762,030) -9% Sun Postpaid 1,431,461 1,678,893 1,637,200 1,727,923 1,736,072 (304,611) -18% (296,462) -17% (90,723) -5% 41,693 3% (247,432) -17% Total Cellular Subscribers Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 3Q16 vs 3Q15 3Q16 vs YE2015 Net Adds 61,810,521 64,473,770 64,449,386 64,938,074 67,002,843 (5,192,322) -8% (3,127,553) -5% (488,688) -1% 24,384 - (2,663,249) -4% 33

34 Subscriber Data: Broadband and Fixed Line Broadband Subscribers BROADBAND Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % Wireless Broadband 3,837,153 4,049,555 3,989,519 3,932,820 3,789,654 47,499 1% (95,667) -2% 56,699 1% 60,036 2% (212,402) -5% Smart Broadband 3,140,636 3,207,722 3,143,892 3,057,958 2,896, ,449 8% 82,678 3% 85,934 3% 63,830 2% (67,086) -2% Prepaid 2,648,645 2,684,199 2,611,986 2,526,230 2,380, ,828 11% 122,415 5% 85,756 3% 72,213 3% (35,554) -1% Postpaid 491, , , , ,370 (23,379) -5% (39,737) -7% (8,383) -2% (31,532) -6% Sun Broadband 696, , , , ,467 (196,950) -22% (178,345) -20% (29,235) -3% (3,794) - (145,316) -17% Prepaid 493, , , , ,045 (67,430) -12% (63,590) -11% (2,763) - (17,054) -3% (43,773) -8% Postpaid 202, , , , ,422 (129,520) -39% (114,755) -36% (26,472) -8% 13,260 5% (101,543) -33% Fixed Line Broadband 1,407,122 1,347,422 1,296,402 1,255,864 1,224, ,387 15% 151,258 12% 40,538 3% 51,020 4% 59,700 4% Total Broadband Subscribers Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 3Q16 vs 3Q15 3Q16 vs YE15 Net Adds 5,244,275 5,396,977 5,285,921 5,188,684 5,014, ,886 5% 55,591 1% 97,237 2% 111,056 2% (152,702) -3% Fixed Line Subscribers 3Q16 vs 3Q15 3Q16 vs YE15 Net Adds Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % Fixed Line Subscribers 2,404,893 2,380,390 2,339,001 2,303,454 2,285, ,941 5% 101,439 4% 35,547 2% 41,389 2% 24,503 1% 34

35 Wireless Broadband: Revenues and Subscribers Wireless Broadband, gross of interconnection costs (Php in millions) Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Smart Bro (Dongles/Pocket WiFi) 2,277 2,209 1,925 6,411 1,715 1,899 2,098 5,712 2,240 7,952 Home Bro , , ,039 Total Wireless Broadband Revenues 2,960 2,883 2,625 8,468 2,528 2,677 2,841 8,046 2,945 10, Subscribers Q 2Q 1Q 4Q 3Q 2Q 1Q Smart Bro (Dongles/Pocket WiFi) 3,565,581 3,784,082 3,740,844 3,674,044 3,518,159 3,388,246 3,088,137 Home Bro 271, , , , , , ,303 Total Wireless Broadband Subscribers 3,837,153 4,049,555 3,989,519 3,932,820 3,789,654 3,676,164 3,391,440 35

36 9M2016: Consolidated Financial Highlights 9M2016 9M2015 (Php in millions) Wireless Fixed Line Others Consolidated (unaudited) Consolidated (unaudited) % Change Total Revenues 80,557 54, , ,871 (2%) Service Revenues 76,986 51, , ,001 (3%) Cash operating expenses 37,731 30, ,857 59,434 (3%) Depreciation and amortization 12,450 10,153-22,603 21,187 7% Financing costs, net (1,838) (3,629) (139) (5,430) (4,550) 19% Income before income tax 9,420 9,298 3,442 22,160 32,693 (32%) Provision for income tax 3,486 2, ,260 7,338 (15%) EBITDA 24,309 20,312 (25) 45,717 54,066 (15%) EBITDA Margin (1) 32% 40% - 38% 44% Net Income attributable to Equity Holders of PLDT 5,928 6,588 3,349 15,865 25,339 (37%) Core net income 6,302 6,353 9,081 21,736 27,077 (20%) (1) EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnection costs) 36

37 Reconciliation of Core and Reported Net Income (Php in millions) Wireless Fixed Line 9M2016 Others Consolidated (unaudited) 9M2015 Consolidated (unaudited) % Change Net Income attributable to equity holder of PLDT 5,928 6,588 3,349 15,865 25,339 (37%) Add (deduct): Foreign exchange losses, net ,434 2,523 (43%) Gains on derivative financial instruments, net (357) (559) - (916) (687) 33% Asset Impairment - - 5,381 5, Others - (9) (16) (25) 87 (129%) Tax effect (161) (3) (185) (98%) Core Net Income 6,302 6,353 9,081 21,736 27,077 (20%) 37

38 Consolidated Service Revenues 2016 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed Line 14,287 14,320 14,446 43,053 13,034 13,302 13,589 39,925 13,817 53,742 Fixed Line voice - domestic 4,333 4,384 4,479 13,196 4,172 4,226 4,280 12,678 4,301 16,979 Fixed Line voice - international 1,240 1,092 1,015 3,347 1,311 1,323 1,273 3,907 1,336 5,243 National long distance , , ,577 Data and other network 7,650 7,804 7,879 23,333 6,436 6,644 6,945 20,025 7,145 27,170 Miscellaneous Wireless 26,311 25,686 23,882 75,879 27,514 27,309 27,253 82,076 27, ,188 Cellular services 23,059 22,615 20,923 66,597 24,529 24,103 23,872 72,504 23,794 96,298 Wireless broadband and others 3,119 3,014 2,740 8,873 2,721 2,962 3,031 8,714 3,128 11,842 Wireless broadband 2,931 2,856 2,600 8,387 2,506 2,655 2,820 7,981 2,925 10,906 Others Digital platforms and mobile financial services ,048 Total 40,598 40,006 38, ,932 40,548 40,611 40, ,001 40, ,

39 Consolidated Service Revenues and EBITDA (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband/Digital platforms 14,525 14,974 15,169 44,668 11,656 12,309 13,566 37,531 13,648 51,179 Mobile Internet 3,811 4,257 4,471 12,539 2,450 2,766 3,451 8,667 3,388 12,055 Wireless broadband 2,931 2,856 2,600 8,387 2,506 2,655 2,820 7,981 2,925 10,906 Data and Other network 7,650 7,804 7,879 23,333 6,436 6,644 6,945 20,025 7,145 27,170 Fixed broadband 4,402 4,595 4,779 13,776 3,808 3,959 4,109 11,876 4,240 16,116 Corp. Data and Data Center 3,248 3,209 3,100 9,557 2,628 2,685 2,836 8,149 2,905 11,054 Digital ,048 SMS and VAS/Domestic Voice/Others 21,697 20,913 19,334 61,944 23,678 23,276 22,484 69,438 22,578 92,016 SMS and VAS 8,688 8,643 7,873 25,204 9,927 9,547 9,382 28,856 9,115 37,971 Cellular voice - domestic 7,948 7,277 6,324 21,549 8,869 8,722 8,174 25,765 8,215 33,980 Fixed Line voice - domestic 4,333 4,384 4,479 13,196 4,172 4,226 4,280 12,678 4,301 16,979 Others , , ,086 ILD/NLD 4,376 4,119 3,825 12,320 5,214 5,026 4,792 15,032 4,703 19,735 Fixed Line voice - international 1,240 1,092 1,015 3,347 1,311 1,323 1,273 3,907 1,336 5,243 National long distance , , ,577 Cellular voice - international 2,292 2,182 1,947 6,421 2,980 2,797 2,604 8,381 2,534 10,915 Total Consolidated Gross Service Revenues 40,598 40,006 38, ,932 40,548 40,611 40, ,001 40, ,930 Non-Service revenues 2,181 2,499 1,774 6,454 2,005 2,027 1,838 5,870 2,303 8,173 Total Consolidated Gross Revenues 42,779 42,505 40, ,386 42,553 42,638 42, ,871 43, ,103 Add: Cash operating expenses (19,295) (19,434) (19,128) (57,857) (18,701) (21,575) (19,158) (59,434) (20,935) (80,369) Cost of sales (5,233) (5,602) (3,444) (14,279) (3,704) (3,984) (4,021) (11,709) (4,905) (16,614) Writedown of inventory and provision for doubtful AR (1,645) (3,317) (2,571) (7,533) (866) (841) (955) (2,662) (1,240) (3,902) EBITDA 16,606 14,152 14,959 45,717 19,282 16,238 18,546 54,066 16,152 70,218 EBITDA Margin (1) 41% 35% 39% 38% 48% 40% 45% 44% 39% 43% (1) EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnection costs) 39

40 Wireless Service Revenues and EBITDA (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband/Digital platforms 6,905 7,199 7,327 21,431 5,243 5,688 6,643 17,574 6,523 24,097 Mobile internet 3,811 4,257 4,471 12,539 2,450 2,766 3,451 8,667 3,388 12,055 Wireless broadband 2,960 2,882 2,626 8,468 2,528 2,677 2,841 8,046 2,945 10,991 Digital ,051 SMS and VAS/Domestic Voice/Others 17,461 16,683 14,965 49,109 19,648 19,206 18,381 57,235 18,407 75,642 SMS and VAS/financial services 8,691 8,645 7,875 25,211 9,930 9,550 9,384 28,864 9,118 37,982 SMS 8,348 8,371 7,556 24,275 9,408 9,269 8,985 27,662 8,726 36,388 VAS/financial services , ,594 Cellular voice - domestic 8,042 7,373 6,417 21,832 8,993 8,838 8,285 26,116 8,324 34,440 Others , , ,220 ILD 2,304 2,189 1,953 6,446 2,995 2,813 2,617 8,425 2,552 10,977 Cellular voice - international 2,304 2,189 1,953 6,446 2,995 2,813 2,617 8,425 2,552 10,977 Total Wireless Gross Service Revenues 26,670 26,071 24,245 76,986 27,886 27,707 27,641 83,234 27, ,716 Non-Service revenues 1,261 1, ,571 1,290 1,204 1,027 3,521 1,276 4,797 Total Wireless Gross Revenues 27,931 27,543 25,083 80,557 29,176 28,911 28,668 86,755 28, ,513 Add: Cash operating expenses (12,515) (12,576) (12,640) (37,731) (12,775) (13,941) (13,202) (39,918) (14,827) (54,745) Cost of sales (4,452) (4,763) (2,783) (11,998) (3,217) (3,270) (3,395) (9,882) (3,991) (13,873) Writedown of inventory and provision for doubtful AR (1,335) (2,947) (2,237) (6,519) (581) (539) (639) (1,759) (899) (2,658) EBITDA 9,629 7,257 7,423 24,309 12,603 11,161 11,432 35,196 9,041 44,237 EBITDA Margin (1) 36% 28% 31% 32% 45% 40% 41% 42% 33% 40% (1) EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnection costs) 40

41 Fixed Line Service Revenues and EBITDA (Php in millions) Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband 9,110 9,216 9,457 27,783 8,074 8,261 8,537 24,872 8,876 33,748 Fixed broadband 4,428 4,638 4,839 13,905 3,812 3,962 4,113 11,887 4,254 16,141 Corp. data and other network services 3,944 3,810 3,966 11,720 3,660 3,680 3,747 11,087 3,916 15,003 Data center and ICT , , ,604 Domestic Voice/Others 4,761 4,806 4,922 14,489 4,589 4,612 4,647 13,848 4,702 18,550 Fixed line voice - domestic 4,357 4,408 4,503 13,268 4,196 4,250 4,304 12,750 4,326 17,076 Miscellaneous , , ,474 ILD/NLD 3,144 2,952 2,819 8,915 3,273 3,335 3,243 9,851 3,326 13,177 Fixed Line voice - international 2,203 1,998 1,842 6,043 2,255 2,335 2,233 6,823 2,396 9,219 National long distance ,872 1,018 1,000 1,010 3, ,958 Total Fixed Line Service Revenues 17,015 16,974 17,198 51,187 15,936 16,208 16,427 48,571 16,904 65,475 Non-Service revenues (1) 920 1, , ,351 1,039 3,390 Total Fixed Line Gross Revenues 17,935 18,002 18,134 54,071 16,651 17,032 17,239 50,922 17,943 68,865 Add: Cash operating expenses (10,213) (10,255) (9,995) (30,463) (9,590) (11,197) (9,473) (30,260) (9,853) (40,113) Cost of sales (781) (840) (661) (2,282) (491) (714) (626) (1,831) (928) (2,759) Writedown of inventory and provision for doubtful AR (310) (370) (334) (1,014) (285) (302) (316) (903) (341) (1,244) EBITDA 6,631 6,537 7,144 20,312 6,285 4,819 6,824 17,928 6,821 24,749 EBITDA Margin (2) 39% 39% 42% 40% 39% 30% 42% 37% 40% 38% (1) Non-service revenues include sale of PLP units, FabTAB, managed ICT equipment, Home IP Cameras, UNO equipment and managed PABX (2) EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnection costs) Fixed line revenues - net of interconnection costs (Php in millions) Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed Line Service Revenues, net Fixed line voice - domestic 4,357 4,406 4,502 13,265 4,196 4,249 4,303 12,748 4,326 17,074 Fixed Line voice - international , , ,487 National long distance , , ,091 Fixed broadband 4,428 4,638 4,839 13,905 3,812 3,962 4,113 11,887 4,254 16,141 Corp. data and other network services 3,931 3,796 3,953 11,680 3,642 3,664 3,720 11,026 3,912 14,938 Data center and ICT , , ,604 Miscellaneous , , ,474 Total 15,435 15,500 15,871 46,806 14,284 14,511 14,855 43,650 15,159 58,809 41

42 Expenses (Php in millions) Wireless Fixed Line 9M2016 Others Consolidated (unaudited) 9M2015 Consolidated (unaudited) % Change Operating expenses Compensation and employee benefits 5,185 9,905-15,078 16,376 (8%) Repairs and maintenance 6,295 5,516-11,346 11,271 1% Selling and promotions 4,839 1,615-6,441 7,379 (13%) Rent 7,280 2,497-5,124 4,704 9% Insurance and security services ,291 1,349 (4%) Taxes and licenses 2, ,008 2,843 6% Professional and other contracted services 4,183 4, ,689 6,049 11% Communication, training and travel , % Interconnection costs 6,022 4,381-7,102 7,637 (7%) Other expenses (7%) Cash operating expenses 37,731 30, ,857 59,434 (3%) Depreciation and amortization 12,450 10,153-22,603 21,187 7% Asset impairment 6,519 1,014 5,381 12,914 2, % Amortization of intangible assets % Non-cash operating expenses 19,790 11,167 5,381 36,338 24,654 47% Cost of sales 11,998 2,282-14,279 11,709 22% Total Expenses 69,519 43,912 5, ,474 95,797 13% 42

43 Other Income (Expenses) (Php in millions) Wireless Fixed Line 9M2016 Others Consolidated (unaudited) 9M2015 Consolidated (unaudited) % Change Equity share in net earnings (losses) of associates and joint ventures (206) (48) 1,731 1,477 2,668 (45%) Interest income % Gains (losses) on derivative financial instruments, net % Foreign exchange gains (losses), net (892) (236) (306) (1,434) (2,523) 43% Others 847 2,282 7,373 9,381 3, % Total 220 2,768 8,987 10,678 5, % Financing costs, net Loans and other related items (1,937) (3,607) (139) (5,507) (4,602) 20% Accretion on financial liabilities (120) (56) - (176) (163) 8% Financing charges (81) (32) - (113) (70) 61% Capitalized interest % Total (1,838) (3,629) (139) (5,430) (4,550) 19% Total other income (expenses) (1,618) (861) 8,848 5, % 43

44 Cellular and Broadband Net ARPU Cellular Net ARPU Q 2Q 3Q 1Q 2Q 3Q 4Q Smart Postpaid 999 1,018 1,004 1,039 1,065 1,021 1,014 Smart Prepaid TNT Sun Cellular Prepaid Sun Cellular Postpaid Cellular Prepaid and Postpaid blended Net ARPU Q 2Q 3Q 1Q 2Q 3Q 4Q Prepaid and Postpaid Blended, Net (1) (1) The average monthly ARPU of all prepaid and postpaid cellular subscribers; excluding DMPI Broadband Net ARPU Q 2Q 3Q 1Q 2Q 3Q 4Q Smart Broadband Blended Sun Broadband Blended Fixed Broadband 1,162 1,169 1,171 1,129 1,137 1,138 1,144 44

45 Earnings Per Share 9M2016 9M2015 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income attributable to equity holders of PLDT 15,865 15,865 25,339 25,339 Dividends on preferred shares (45) (45) (45) (45) Net income for the period attributable to common equity holders of PLDT 15,820 15,820 25,294 25,294 Weighted average number of common shares, end 216, , , ,056 EPS (based on reported net income) Core net income 21,736 21,736 27,077 27,077 Dividends on preferred shares (40) (40) (45) (45) Core Net income applicable to common shares 21,696 21,696 27,032 27,032 Weighted average number of common shares, end 216, , , ,056 EPS (based on core income)

46 Cash Flows 9M2016 9M2015 Consolidated Consolidated Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) % Change Net cash from operations 13,760 20,745 (858) 33,277 47,796 (30%) Add(Deduct): Capital expenditures (19,092) (7,039) - (26,131) (23,297) 12% Interest, net (1,405) (3,467) 66 (4,436) (3,511) 26% Preferred share dividends paid - (54) - (54) (53) 2% Others 19,549 21,412 4,425 (350) 3,006 (112%) Free cash flow 12,812 31,597 3,633 2,306 23,941-90% Common share dividends (26,000) (22,767) (19,814) (22,845) (32,596) (30%) Investments (141) (13,504) 16,045 2,400 (1,192) (301%) Maturity of Investment in debt securities (100%) Payments for redemption of shares (1) (100%) Debt proceeds (repayments), net (762) (918) - (1,680) 17,317 (110%) Change in cash (14,091) (5,592) (136) (19,819) 7,761 (355%) Cash and short term investments, beginning 24,417 22, ,884 27,302 75% Cash and short term investments, end 10,326 17, ,065 35,063 (20%) 46

47 Balance Sheet (Php in millions) Consolidated September 30, 2016 December 31, 2015 (unaudited) (audited) Total Assets 452, ,095 Nominal Value of Total Long-term Debt 161, ,568 in US$ $3,331 $3,429 Less: Unamortized Debt Discount Total Long-term Debt 160, ,892 Cash and short-term investments 28,065 47,884 Net Debt (1) 133, ,684 Equity 104, ,898 Total Debt (2) /Equity 1.54x 1.42x Net Debt (1) /Equity 1.27x 1.00x Total Debt (2) /EBITDA (3) 2.61x 2.30x Net Debt (1) /EBITDA (3) 2.16x 1.62x (1) Net Debt calculated based on nominal value of debts less cash and cash equivalents and short-term investments (2) Nominal value of total debt (3) EBITDA for the last twelve months (LTM) 47

48 Debt Profile (US$ in millions) M2016 Debt Balance 2,719 2,851 2,353 2,920 3,429 3,331 Cash and short-term investments 1, , Net Debt 1,658 1,932 1,618 2,310 2,413 2,752 Interest-bearing Liabilities (US$ in millions) Carrying Value September 30, 2016 (unaudited) Unamortized Debt Discount/Debt Issuance Face Value December 31, 2015 (Audited) Face Value Change Debt PLDT $1,944 $5 $1,949 $2,003 ($54) Smart 1, ,373 1, DIGITEL (95) Total Debt $3,319 $13 $3,331 $3,429 ($98) 48

49 Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives Forex sensitivity for every P1 change (in US$ millions) US$ Revenues* US$ Expenses Cash Opex* (209.9) (160.2) Cost of sales (2.7) Financing costs (47.0) US$ Income before tax Tax effect Core Earnings EBITDA Conso - net of Elim * Gross of interconnection costs amounting to: 54.3 Local exchange revenues (in million Php) 7,589.4 Forex sensitivity for every P1 change on B/S Revaluation (in US$ millions) Debt (net of LT hedges)* Accounts Payable Accrued Liabilities Derivative Liabilites 16.4 Other Current & Non Current Liabilities 0.1 Total US$ denominated Liabilities 1,116.2 Cash and Cash Equivalents Short-term Investments 34.1 Trade and other receivables Derivative Assets Investment in Debt Securities, Advances & Others Total US$ denominated Assets Forex Revaluation for every P1 change Conso ±636.0 * Debt 1,227.0 Less: LT hedges Debt (net of LT hedges) P1 movement in the USD/PHP exchange rate corresponds to a P197M change in derivatives Ave. Period End Forex rate, 9M Forex rate, 9M % of Peso depreciation vs US$ 4.2% 3.5% 49

50 Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. The words believe, intend, plan, anticipate, continue, estimate, expect, may, will or other similar words are frequently used to indicate these forward looking statements. Any such forward-looking statement is not a guarantee of future performance and involves a number of known and unknown risks, uncertainties and other factors that could cause the actual performance, financial condition or results of operation of PLDT to be materially different from any future performance, financial condition or results of operation implied by such forward-looking statement. Among the factors that could cause actual results to differ from the implied or expected results are those factors discussed under Risk Factors in Item 3 in PLDT s annual report on Form 20-F. For inquiries, please contact: PLDT INVESTOR RELATIONS (632) pldt_ir_center@pldt.com.ph 50

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