FIRST GEN CORPORATION Financial and Operating Results

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1 FIRST GEN CORPORATION Financial and Operating Results 1

2 DISCLAIMER This presentation contains certain forward looking statements. These forward looking statements that include words or phrases such as First Gen or its management believes, expects, anticipates, intends, plans, foresees, or other words or phrases of similar import. Similarly, statements that describe First Gen 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. First Gen does not make express 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. 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 in the offering. Investors must rely solely on their own examinations of the company and the offering in making a determination as to whether to invest in the securities offered. 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. 2

3 FIRST GEN POWERS 16% 1 OF THE PHILIPPINES INSTALLED CAPACITY USING CLEAN AND RENEWABLE ENERGY FROM INDIGENOUS SOURCES (1) Based on DOE s list of existing power plants as of December 31, 3

4 58% Natural Gas Baseload/Mid-merit Peak 34% Geothermal Baseload 4% Hydro Baseload/Peak 4% Wind & Solar THE DISTINCT PORTFOLIO OF POWER ASSETS POSITION THE COMPANY AS A LEADING PROVIDER OF BOTH CLEAN AND COMPETITIVELY-PRICED ENERGY NEEDED BY THE COUNTRY Natural Gas 3,490 MW Installed Capacity Geothermal 4

MW IN, FIRST GEN GENERATED APPROXIMATELY 21% OF THE COUNTRY S REQUIREMENT ACROSS DIFFERENT LOAD SEGMENTS USING ONLY CLEAN AND RENEWABLE ENERGY 10,000 8,000 6,000 AVION PANTABANGAN- MASIWAY HYDRO EDC

5 MW IN, FIRST GEN GENERATED APPROXIMATELY 21% OF THE COUNTRY S REQUIREMENT ACROSS DIFFERENT LOAD SEGMENTS USING ONLY CLEAN AND RENEWABLE ENERGY 10,000 8,000 6,000 AVION PANTABANGAN- MASIWAY HYDRO EDC BURGOS SOLAR 1 SAN GABRIEL (Baseload or Mid-merit) Generation 19,808 GWh PEAKING MID-MERIT Luzon Load Curve 4,000 2,000 SANTA RITA-SAN LORENZO EDC GEOTHERMAL PLANTS AGUSAN HYDRO BASELOAD 0 EDC BURGOS WIND Hour (1) Wind and Solar under FiT are must dispatch plants 5

SANTA RITA AND SAN LORENZO DEMONSTRATED A HIGHER COMBINED NET DEPENDABLE CAPACITY NET DEPENDABLE CAPACITY NET CAPACITY FACTOR 1,500 MW Nameplate Capacity

6 SANTA RITA AND SAN LORENZO DEMONSTRATED A HIGHER COMBINED NET DEPENDABLE CAPACITY NET DEPENDABLE CAPACITY NET CAPACITY FACTOR 1,500 MW Nameplate Capacity 1,617 MW 1,582 MW 73% 75% AVERAGE SELLING PRICE PHP/KWH 4.44 Lower due to scheduled major maintenance outages 5.6 and 6.0 magnitude earthquake in April

9% 21% 3% 20% 57% 75% 44% 42% 56% 71% 49% 15% 1% 9% 30% 3% 22% 32% 20% 26% 28% 33% 18% 3%

7 SAN GABRIEL AND AVION HAD THEIR FIRST FULL YEAR OF OPERATIONS 420 MW SAN GABRIEL 97 MW AVION NET CAPACITY FACTOR (%) NET CAPACITY FACTOR (%) 37.5% 18.9% 21% 3% 20% 57% 75% 44% 42% 56% 71% 49% 15% 1% 9% 30% 3% 22% 32% 20% 26% 28% 33% 18% 3% J F M A M J J A S O N D J F M A M J J A S O N D AVE. WESM SELLING PRICE Php3.65/kWh AVE. WESM SELLING PRICE Php5.52/kWh 7

EDC BENEFITTED FROM NEW CONTRACTS BUT WAS AFFECTED BY TWO NATURAL CALAMITIES TOTAL GEO, WIND, SOLAR CONTRACTED CAPACITY 93% 91% 4% 3% 9% 97% 91% Contracted Ancillary Uncontracted EARTHQUAKE AND

8 EDC BENEFITTED FROM NEW CONTRACTS BUT WAS AFFECTED BY TWO NATURAL CALAMITIES TOTAL GEO, WIND, SOLAR CONTRACTED CAPACITY 93% 91% 4% 3% 9% 97% 91% Contracted Ancillary Uncontracted EARTHQUAKE AND TYPHOON July: 6.5 magnitude earthquake December: Typhoon Urduja AVERAGE PRICE/KWH LEYTE GENERATION (GWh) 3,119 3, Geothermal Burgos Wind Solar Unified Leyte Tongonan 8

PANTABANGAN-MASIWAY HAD A HIGHER SPOT MARKET EXPOSURE FOLLOWING THE EXPIRY OF ITS ANCILLARY CONTRACT IN FEBRUARY REVENUE SOURCES NET CAPACITY FACTOR WESM 21% Ancillary

9 PANTABANGAN-MASIWAY HAD A HIGHER SPOT MARKET EXPOSURE FOLLOWING THE EXPIRY OF ITS ANCILLARY CONTRACT IN FEBRUARY REVENUE SOURCES NET CAPACITY FACTOR WESM 21% Ancillary Services 15% 28% Contracts 64% 27% Ancillary Services 34% Contracts 66% AVERAGE PRICE/KWH (1) Blended selling price from contracts, WESM and ancillary revenues 9

Proceeds US$ 247 million Net of outstanding loan, US$13 million swap termination cost, and

10 WE REFINANCED SANTA RITA S LOAN TO US$500 MILLION AT A LOWER INTEREST RATE Santa Rita Term Loan Refinancing As of May 3.5% int. p.a. US$500 million (amortizing until 2024) Net Proceeds US$ 247 million Net of outstanding loan, US$13 million swap termination cost, and other financing fees As of April 8.5% int. p.a. US$222 million (amortizing until 2018/2021) 10

11 FIRST GEN WELCOMED NEW PARTNERS IN EDC WITH THE ENTRY OF MIRA AND GIC TENDER OFFER BY PHILIPINES RENEWABLE ENERGY HOLDINGS CORP: 47.5% ECONOMIC Php7.25/share US$240 MILLION FIRST GEN: 9.0% economic stake US$1.0 BILLION PUBLIC: 38.5% economic stake FIRST GEN REMAINS AS THE MAJORITY VOTING OWNER OF EDC FIRST GEN CORPORATION 41.6% economic 61.1% voting PHILIPPINES RENEWABLE ENERGY HOLDINGS 47.5% economic 31.7% voting PUBLIC FLOAT 10.9% economic 7.2% voting 11

12 FINANCIAL RESULTS Note: Figures are in USD millions unless otherwise stated 12

13 CONSOLIDATED REVENUE FIRST GEN S REVENUES INCREASED BY 9% WITH THE FULL- YEAR CONTRIBUTIONS OF SAN GABRIEL AND AVION, PARTLY OFFSET BY LOWER REVENUES OF EDC REVENUE 1, , % Movements in consolidated revenues , ,708.1 SR and SL San Gabriel Avion EDC Hydro FGES 13

14 CONSOLIDATED REVENUE HIGHER REVENUES FROM SR-SL WERE DUE TO HIGHER GAS PRICES AND SLIGHTLY HIGHER COMBINED NDC SANTA RITA AND SAN LORENZO REVENUE % NET DEPENDABLE CAPACITY (MW) AVE. GAS PRICE (US$/MMBTU) 1, ,

15 CONSOLIDATED REVENUE SAN GABRIEL AND AVION GAS PLANTS CONTRIBUTED THEIR FIRST FULL YEAR OF REVENUES IN AS MERCHANT PLANTS SAN GABRIEL REVENUE AVION REVENUE NET CAPACITY FACTOR (%) 37.5% AVE. WESM SELLING PRICE Php3.65/kWh NET CAPACITY FACTOR (%) 18.9% AVE. WESM SELLING PRICE Php5.52/kWh 15

16 CONSOLIDATED REVENUE HIGHER GENERATION FROM BACMAN AND BURGOS WIND HELPED OFFSET THE DECREASE IN REVENUES FROM LEYTE AND NEGROS EDC Geo, Wind, Solar REVENUE % GENERATION (GWh) 3,500 3,000 2,500 2,000 1,500 1, ,119 Unified Leyte 3, ,189 1,213 1,060 1, Tongonan BacMan Palinpinon Nasulo Mindanao Burgos

17 CONSOLIDATED REVENUE NEW CONTRACTS SIGNED IN OFFSET SOME OF THE LOSSES FROM LOWER POWER GENERATION EDC Geo, Wind, Solar % CONTRACTED CAPACITY TOTAL 93% 4% 3% BACMAN 100% 86% 14% 91% 9% NASULO 32% 24% 5% 40% 71% 28% Contracted Ancillary Uncontracted AVERAGE SELLING PRICE PHP/KWH Contracted Ancillary Uncontracted Leyte ULGEI strips Bacman Mindanao Nasulo Palinpinon Tongonan Burgos Wind Solar 17

18 CONSOLIDATED REVENUE FG HYDRO POSTED LOWER REVENUES AS A RESULT OF LOWER ANCILLARY SALES FOLLOWING THE EXPIRATION OF ITS ASPA 1 PANTABANGAN-MASIWAY REVENUE % REVENUE BREAKDOWN WESM 21% Contracted 64% Ancillary Services 15% Ancillary Services 34% Contracted 66% AVE. SELLING PRICE 2 (PHP/KWH) NET CAPACITY FACTOR % 33% 27% Notes: (1) FG Hydro has a new ancillary contract with NGCP, which has already been provisionally approved by the ERC in March 2018 (2) Blended selling price from contracts, WESM and ancillary revenues 18

19 EBITDA CONSOLIDATED EBITDA DECREASED BY 5% DUE TO THE LOWER CONTRIBUTIONS OF EDC AND FG HYDRO, PARTLY OFFSET BY HIGHER EBITDA FROM SAN GABRIEL AND AVION CONSOLIDATED EBITDA % EBITDA PER SEGMENT (5) (2) (13) (15) SR and SL San Gabriel Avion EDC FG Hydro Parent expenses Others 19

20 NET INCOME RNI IS FLAT YEAR-ON-YEAR AS LOWER CONTRIBUTIONS FROM EDC, AVION, AND FG HYDRO WERE OFFSET BY LOWER EXPENSES AND IMPROVED PERFORMANCE OF SR-SL, AND SG RECURRING NET INCOME ATTRIBUTABLE TO PARENT % RECURRING NET INCOME PER SEGMENT (7) (4) (12) (0) SR and SL San Gabriel Avion EDC FG Hydro Parent and other expenses (52) (61) 20

21 NET INCOME HOWEVER, SEVERAL ONE-OFF COSTS RESULTED TO A LOWER ATTRIBUTABLE NET INCOME TO PARENT IN NET INCOME ATTRIBUTABLE TO PARENT % Significant non-recurring items 36 Absence of San Gabriel s Liquidated Damages 19 Premium on dollar bond prepayment of FGEN and EDC in 13 Break funding costs from Santa Rita s loan refinancing in 11 EDC expenses related to earthquake and typhoon damages in 10 Unrealized foreign exchange gains and benefits from deferred income taxes in 21

22 PROCEEDS FROM THE TENDER OFFER AND SANTA RITA REFINANCING WERE USED TO PAY DOWN SOME OF FIRST GEN S MORE EXPENSIVE DEBT PARENT & RED VULCAN DEBT AND PREF SHARES OUTSTANDING Red Vulcan loan $300MM, 6.5% USD Bond $200MM Notes Facility Series F Prefs RV loan fully prepaid last Sep Buyback of US$58MM and Early Redemption of $150MM in 4Q17 Redeemable in July 2018 Series G Prefs EDC REFINANCING EDC Bond Tender Offer April 7.8% int. p.a. US$89 million (out of US$300 million bond due 2021) 5.4% int. p.a. Php4 billion (new amortizing loan until 2032) Estimated savings on consolidated interest expense ~ US$ 31 million per year 22 22

23 THE COMPANY S DEBT AND LIQUIDITY RATIOS HAVE IMPROVED MAINLY DUE TO THE PROCEEDS FROM EDC TENDER OFFER; LOWER VALUATION MULTIPLES DUE TO LOWER MARKET PRICE DESPITE RELATIVELY FLAT EARNINGS Current Ratio Net debt to Equity Net debt to EBITDA 1.8x 0.7x 3.1x 1.6x 1.0x 3.2x EV/EBITDA Price/Earnings Price/Book Value Notes: valuation multiples are based on share price of Php17.00 as of March 28, 2018, figures are based on December share price of Php22.00 Earnings are based on the trailing recurring net income attributable to Parent 23

24 2018 STRATEGIC THRUSTS FIRST GEN CLEAN ENERGY COMPLEX, BATANGAS 24

FIRST GEN AIMS TO GET 92% OF ITS CAPACITY CONTRACTED Capacity Off-taker Term All-in tariff Benefits Status SAN GABRIEL CONTRACT 414 MW Manila Electric Company (Meralco) Six (6) years until February

25 FIRST GEN AIMS TO GET 92% OF ITS CAPACITY CONTRACTED Capacity Off-taker Term All-in tariff Benefits Status SAN GABRIEL CONTRACT 414 MW Manila Electric Company (Meralco) Six (6) years until February 23, 2024 (can be extended upon agreement) Php 3.77/kWh 1 at 80% capacity factor (i) competitive dependable baseload capacity; (ii) immediate replacement power during outages of other plants; and (iii) ability to rapidly ramp up and down ERC application filed on March 13, 2018 (1) based on a set of assumptions; fuel is a pass-through cost FIRST GEN CONTRACTED CAPACITY TARGET 92% EXISTING 80% 420 MW SAN GABRIEL NATURAL GAS PLANT 25

WE CONTINUE TO ADVANCE OUR DEVELOPMENT OF AN LNG

GAS PLANTS FIRST GEN BATANGAS LNG TERMINAL

Final Investment Decision by 2019 Estimated

Completed Front End Engineering Design Completed

26 WE CONTINUE TO ADVANCE OUR DEVELOPMENT OF AN LNG TERMINAL TO SECURE FUEL SUPPLY OF OUR FOUR (4) GAS PLANTS FIRST GEN BATANGAS LNG TERMINAL Located at FGEN Clean Energy Complex in Batangas Final Investment Decision by 2019 Estimated Project Cost: US$1bn Up to 5mtpa Project Status: Completed Front End Engineering Design Completed Early Site Works Shortlisted EPC contract tenderer Before Today 26

Php/kWh Php/kWh OUR GAS PORTFOLIO IS ALREADY PRODUCING ELECTRICITY THAT IS CHEAPER THAN COAL CCR & Others Fuel Cost Selling Price of Coal vs Gas Plants at Baseload (83% LF) P4.54/kWh1 P4.33/kWh 2 1.

27 Php/kWh Php/kWh OUR GAS PORTFOLIO IS ALREADY PRODUCING ELECTRICITY THAT IS CHEAPER THAN COAL CCR & Others Fuel Cost Selling Price of Coal vs Gas Plants at Baseload (83% LF) P4.54/kWh1 P4.33/kWh Selling Price of Coal vs Gas Plants at Mid-merit (45% LF) P6.73/kWh P5.50/kWh Coal Gas Coal Gas Coal Plant Selling Price Gas Plant Selling Price Coal Price Coal Price (US$/MT) Coal Price (US$/MT) Notes: (1) Based on FGEN's internal forecasts and assumptions using US$80/MT coal. Note that the current one-month moving average of Newcastle coal is at US$101.3/MT. (2) Weighted ave. of SR, SL, and SG based on First Gen s internal analysis using gas price of US$7.89/MMBtu as of February 2018 and FX of Php52.00/US$

28 WE ARE UNDERTAKING COST-SAVING INITIATIVES THROUGH IMPROVED EFFICIENCY AND FOCUSED SPENDING Big Data Analytics Process Transformation Resiliency from natural catastrophes Deleveraging program 28

29 FIRST GEN CORPORATION Financial and Operating Results Question & Answer 29

Analyst Briefing August 15, 2018

Analyst Briefing August 15, 2018 First Gen Corporation www.firstgen.com.ph 6 / F Rockwell Business Center Tower 3, Ortigas Avenue, Pasig City, Philippines 1604 DISCLAIMER This presentation contains forward-looking