2015 Annual Report

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The San Gabriel Power Plant in the Batangas Clean Energy Complex

The San Gabriel Power Plant in the Batangas Clean Energy Complex

Our total consolidated electricity revenues decreased slightly to USD1.84 billion versus USD1.90 billion in 2014 reflecting lower fuel charges consistent with the drop of global oil and gas prices. From an average gas price of USD12.4 per MMBtu in 2014 to an average of USD9.1 per MMBtu in 2015, consumers are now enjoying reduced electricity prices. The average selling price of the gas plants went down by 19.5 percent from PHP6.16 per kilowatt-hour (kWh) in 2014 to PHP4.96 per kWh in 2015. The decline in revenues was partially offset by higher revenue contributions from EDC’s Burgos Wind and Solar Projects (Burgos) and its rehabilitated geothermal projects, as well as FG Hydro’s higher dispatch.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for USD1.08 billion, or 58.6 percent of First Gen’s total revenues. This was 10.7 percent lower compared to the previous year as a result of lower fuel revenues, partially offset by the higher dispatch of the gas plants (a combined average net capacity factor of 80.5 percent in 2015 compared to 70.4 percent in 2014) following the return to service of Santa Rita’s Unit 40 power transformer in July 2014. The higher dispatch combined with lower interest expenses resulted in the net income contribution of Santa Rita and San Lorenzo increasing by USD2.3 million to USD123.8 million. On a recurring basis, the gas plants increased their net income contribution by USD10.6 million from USD106.9 million in 2014 to USD117.5 million in 2015

EDC’s geothermal, wind, and solar revenues accounted for USD709.0 million or 38.6 percent of total revenues in 2015 mainly due to higher contributions from Burgos, the Nasulo Geothermal Power Plant (Nasulo), and the Bacon-Manito Geothermal Power Plant (BacMan) as the plants’ dispatch improved. This was partially offset by a decline in Tongonan’s dispatch due to its unplanned outages. In summary, the increase in revenues was offset by higher operating expenses and the absence of extraordinary gains, resulting in a decrease in EDC’s attributable net income contribution by USD43.5 million, or 35.7 percent from USD121.8 million in 2014 to USD78.3 million in 2015. On a recurring basis, EDC’s attributable earnings dropped slightly from USD93.3 million in 2014 to USD89.9 million in 2015.

FG Hydro’s revenue contribution grew by USD5.0 million to USD41.6 million in 2015, which accounted for 2.3 percent of total revenues in 2015. The increase in revenues was a result of higher dispatch as well as the absence of a USD5.6 million revenue adjustment booked in 2014 as a result of the re-computation of spot prices for the November and December 2013 billings as ordered by the Energy Regulatory Commission (ERC). However, attributable net income contribution was relatively flat at USD8.4 million in 2015 from USD8.5 million in the previous year, while recurring attributable net income decreased by USD4.1 million from USD12.5 million in 2014 to USD8.4 million in 2015 due to the expiration of FG Hydro’s Income Tax Holiday (ITH) in April 2014.

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The San Gabriel Power Plant in the Batangas Clean Energy Complex

The San Gabriel Power Plant in the Batangas Clean Energy Complex

Our total consolidated electricity revenues decreased slightly to USD1.84 billion versus USD1.90 billion in 2014 reflecting lower fuel charges consistent with the drop of global oil and gas prices. From an average gas price of USD12.4 per MMBtu in 2014 to an average of USD9.1 per MMBtu in 2015, consumers are now enjoying reduced electricity prices. The average selling price of the gas plants went down by 19.5 percent from PHP6.16 per kilowatt-hour (kWh) in 2014 to PHP4.96 per kWh in 2015. The decline in revenues was partially offset by higher revenue contributions from EDC’s Burgos Wind and Solar Projects (Burgos) and its rehabilitated geothermal projects, as well as FG Hydro’s higher dispatch.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for USD1.08 billion, or 58.6 percent of First Gen’s total revenues. This was 10.7 percent lower compared to the previous year as a result of lower fuel revenues, partially offset by the higher dispatch of the gas plants (a combined average net capacity factor of 80.5 percent in 2015 compared to 70.4 percent in 2014) following the return to service of Santa Rita’s Unit 40 power transformer in July 2014. The higher dispatch combined with lower interest expenses resulted in the net income contribution of Santa Rita and San Lorenzo increasing by USD2.3 million to USD123.8 million. On a recurring basis, the gas plants increased their net income contribution by USD10.6 million from USD106.9 million in 2014 to USD117.5 million in 2015

EDC’s geothermal, wind, and solar revenues accounted for USD709.0 million or 38.6 percent of total revenues in 2015 mainly due to higher contributions from Burgos, the Nasulo Geothermal Power Plant (Nasulo), and the Bacon-Manito Geothermal Power Plant (BacMan) as the plants’ dispatch improved. This was partially offset by a decline in Tongonan’s dispatch due to its unplanned outages. In summary, the increase in revenues was offset by higher operating expenses and the absence of extraordinary gains, resulting in a decrease in EDC’s attributable net income contribution by USD43.5 million, or 35.7 percent from USD121.8 million in 2014 to USD78.3 million in 2015. On a recurring basis, EDC’s attributable earnings dropped slightly from USD93.3 million in 2014 to USD89.9 million in 2015.

FG Hydro’s revenue contribution grew by USD5.0 million to USD41.6 million in 2015, which accounted for 2.3 percent of total revenues in 2015. The increase in revenues was a result of higher dispatch as well as the absence of a USD5.6 million revenue adjustment booked in 2014 as a result of the re-computation of spot prices for the November and December 2013 billings as ordered by the Energy Regulatory Commission (ERC). However, attributable net income contribution was relatively flat at USD8.4 million in 2015 from USD8.5 million in the previous year, while recurring attributable net income decreased by USD4.1 million from USD12.5 million in 2014 to USD8.4 million in 2015 due to the expiration of FG Hydro’s Income Tax Holiday (ITH) in April 2014.

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