EDC COMPANY PRESENTATION MARCH 2015
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DISCLAIMER This presentation contains certain “forward looking statements. ” These forward looking statements include words or phrases such as EDC or 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.
TABLE OF CONTENTS Introduction Review of FY 2014 Financial Results Company Updates Appendices
INTRODUCTION
TOP REASONS FOR INVESTING IN EDC -- A GLOBAL DIVERSIFIED RENEWABLE POWER COMPANY 1 of 11 light bulbs 5 Concessions FY14 Highlights 90% acquired in EDC accounts for 9% Revenues Chile & Peru of the Philippine’s Php30.9 billon Geothermal is electricity production RNI Revenue derived Wind 11% 10 Php9.3 billion Into geothermal, hydro concessions from long-term EBITDA & wind and now acquired with contract of Installed diversifying into solar ~543 MW Php17.9 billion agreements capacity capacity energy Favorable Strong Credit & Domaine Contract-based Track Record of Robust Industry Investment Expertise Cash Flows Growth Growth Dynamics Profile Managing 100% RE Act of 2008 64% Revenue Financial Risks Provides derived regulatory support Interest rate on Successfully from contract tenors 81% of loans acquired power 10% Income Tax of greater than Domestic Expansion are fixed 7-year ITH plants inside its 6 years 32% of Feed-in-Tariff (FIT) Install ~180MW of geothermal geothermal capacity revenues are concessions YEAR Geothermal provides Overseas Expansion US$ indexed 2031 Drill wells in 13% 5.2 yrs. loan life Largest vertically Mariposa, Chile by 5.6% Interest integrated geothermal 2015 Concession agreements of electricity production company globally cost start expiring in the Philippines 8 Introduction
EDC IS THE LARGEST VERTICALLY INTEGRATED GEOTHERMAL COMPANY GLOBALLY TOP 5 GEOTHERMAL COMPANIES 1 1 CAPACITY (in MW) Plant Type Manufacturer COMPANY STEAM PLANT 150.0MW Burgos Wind Vestas 1 1 EDC 1,164 1,164 1 4.0MW Burgos* Solar Juwi 1 120.0MW Pantabangan Hydro Andritz 2 Comision Federal de Electricidad 958 958 1 12.0MW Masiway Hydro Toshiba 3 Enel Green Power 915 915 120.0MW Bacman I Geothermal Toshiba/Alstom 1 1 20.0MW Bacman II Geothermal Mitsubishi 4 Chevron 1,329 887 * 2 112.5MW Tongonan Geothermal Mitsubishi 5 Ormat 689 749 112.5MW Palinpinon I Geothermal Fuji 3 1 2 60.0MW Palinpinon II** Geothermal Fuji Source: Bertani, Ruggero, 2010: Geothermal Power 1 125.0MW Upper Mahiao Geothermal GE/Ormat/Kato Generation in the World 2005-2010 Update Report 232.5MW Malitbog Geothermal Fuji Note: * Not included is the 442 MW operated by the 3 2 Indonesian Government through PLN 180.0MW Mahanagdong Geothermal Toshiba 50.9MW Optimization Geothermal Various 3 2 49.4MW Nasulo Geothermal Fuji 52.0MW Mindanao I Geothermal Mitsubishi 3 Wind Geothermal (EDC 54.0MW Mindanao II Geothermal Mitsubishi Subsidiary) Hydro Geothermal (Integrated) Note: * under development Solar **20 MW Nasuji Power Plant placed on preservation 1,451 MW % share Offices EDC AT A 1,169MW Geothermal 7% of Installed Capacity Philippines Chile 150MW Wind 9% of Electricity Produced Indonesia Peru GLANCE 132MW Hydro 4MW Solar (under development) 9 Introduction
EDC GENERATES STRONG AND ROBUST CASHFLOWS AT BOTH PARENT AND SUBSIDIARY LEVELS Revenues (2) as of Dec. 2014 EBWPC FGHPC 188 1,624 1% EGC 5% IFC GIC Public Lopez Group 15,618 51% E: 1.69 % V: 1.12 % E: 4.99 % V: 3.33 % E: 43.14 % V: 44.96 % E: 50.18 % V: 50.59% 30,867 EDC Parent (3) 13,447 • 743.8 MW Power Plants 44% 588.4 MW Unified Leyte Power Project 106.0 MW Mindanao Power EBITDA (2) as of Dec. 2014 Project 49.4 MW Nasulo Power FGHPC EBWPC 1,127 Project 151 6% 1% 100% EGC 9,724 17,922 EDC 54% 60% 100% 100% Parent (3) 6,920 EDC Hong Kong EDC Geothermal (1) First Gen Hydro Power EDC Wind Energy 39% Corporation (EGC) Corporation (FGHPC) Holdings Inc. Limited 120.0 MW Pantabangan Net Income (2) as of Dec. 2014 12.0 MW Masiway FGHPC 540 5% 100% 95/100% 100% 100% EDC Parent (3) EDC Burgos Wind Power International Green Core Geothermal Bac-Man Geothermal 11,818 4,830 Corp. (EBWPC) EGC Inc. (GCGI) Inc. (BGI) Expansion 41% 6,448 • Chile 54% 150.0 MW Burgos 172.5 MW Palinpinon (2) 115.0 MW Bac-Man I • Peru 112.5 MW Tongonan 20.0 MW Bac-Man II • Indonesia (2) All figures in PHP millions as of Dec. 31, 2014. EBWPC’s Net Income Loss (1) Formerly First Luzon Geothermal Energy Corporation (FLGEC) (Php81MN) included as part of EDC Parent (2) 20 MW Nasuji Power Plant to be placed in preservation (3) EDC Parent figures include the Company’s other subsidiaries 10 Introduction
POSSESSES STABLE AND PREDICTABLE CASH FLOWS Percentage of Consolidated USD Linkage Revenues (1) Cashflow National 43% Electricity 73% Power Electricity Corporation Power Purchase Agreements Sovereign off-take Power Purchase Agreements (PPAs) Cashflow or Cashflow Bac-Man Dividends Steam Geothermal Electricity Steam Sales Agreements (SSA) 56% Electricity 0% Cashflow or Electric Cooperatives/ Green Core Cashflow Dividends Geothermal Third party customers Steam Electricity Commercial off-take Geothermal Resources Sales Contracts (GRSC) Cashflow FG Hydro Dividends Electricity & Ancillary Svcs. Power Supply Agreements Power Supply Agreements (PSAs) Cashflow 1% Electricity 60% Burgos Wind Dividends Transco Electricity Feed-in-Tariff (1) As of Dec.30, 2014 Subsidiaries of EDC 11 Introduction
LIMITED EXPOSURE TO VOLATILE SPOT MARKET TERM STRUCTURE OF CONTRACTS (1) LONG-TERM CONTRACTUAL AGREEMENTS In PHP Millions CONCESSION Geothermal Renewable Energy Service Contract 2031 Transco, 188 SPOT 10% >6 YRS NPC, 13,437 WESM, 3,105 63% ELECTRICITY Power Purchase Agreements (sovereign) 2022/24 NGCP, 720 30,867 Power Supply Agreements (commercial) 2040 1-2 YRS 20% DU, 13,417 2031 year concession agreements SPOT 1-2 YRS 3-5 YRS >6 YRS 3-5 YRS start expiring WESM 10% - - - 7% NGCP - 2% - - - 17% 7% 20% DU 1% TRANSCO - - - 43% NPC (1) Consolidated revenues as of Dec. 31, 2014 90% 64% 44% revenue from revenue from expanded revenue long-term contract tenors base from non-NPC contracts of >6 yrs clients 12 Introduction
SIGNIFICANT PORTFOLIO EXPANSION SINCE PRIVATIZATION 2006 2007 2008 2009 2010 2011 2012 2013 2014 1976 - 2005 STEAMFIELD OPERATOR STEAMFIELD AND POWER PLANT OPERATOR • Limited to steam field operations • Acquired geothermal (+) 125.0 MW (+) 49.4 MW (+) 132.0 MW (+) 106.0 MW (+) 150.0 MW (-) 49.4 MW (+) 49.4 MW concessions overseas Upper N. Negros Pantabangan Mindanao I & II Bac-Man I N. Negros Nasulo Mahiao (+) 463.4 MW – Masiway (+) 305.0 MW & II (-) 20.0 MW (-) 20.0 MW Mahanagdong, Palinpinon & Botong Nasuji Malitbog, and Tongonan (+) 150.0 MW Optimization Burgos (+) 5.0 MW Bacman 30,867 Unit 2 17,922 2007-2014 ( CAGR ) 19,007 Revenues 7.2% EBITDA 8.2% 11,818 10,324 Net Income 4.4% 8,768 current (MW) 0 125 513 132 411 150 (69) 0 0 184 0 125 638 770 1,181 1,331 1,262 1,262 1,262 1,446 cum. (MW) 13 Introduction
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