COVER SHEET SHEET. (Company's Full Name) 3 2 N D S T R E E T C O R N E R 7 T H A V E N U E B O N I F A C I O G L O B A L C I T Y T A G U I G

Transcription

1 COVER SHEET SHEET P W G L O B E T E L E C O M, I N C. (Company's Full Name) 2 7 / F T H E G L O B E T O W E R 3 2 N D S T R E E T C O R N E R 7 T H A V E N U E B O N I F A C I O G L O B A L C I T Y T A G U I G (Business Address: No. Street City / Town / Province) ROSEMARIE MANIEGO-EALA Contact Person Company Telephone Number C Month Day FORM TYPE Month Day Fiscal Year Annual Meeting Year Secondary License Type, if Applicable Applicable Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. Of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document I.D. Cashier S T A M P S Remarks = pls. Use black ink for scanning purposes purposes

2

3 GLOBE ANNOUNCES 4 th QUARTER and FULL YEAR 2017 RESULTS SOLID FOURTH QUARTER AND FULL YEAR RESULTS STRONG CONSOLIDATED SERVICE REVENUES AT P127.9 BILLION, UP 6% YoY; SOLID EBITDA AT P53.3 BILLION; UP 7% YoY; NIAT AT P15.1 BILLION, DOWN 5% YoY; CORE NIAT AT P13.5 BILLION, DOWN 15% YoY; MOBILE SUBSCRIBERS AT 60.7 MILLLION, DOWN 3% YoY HOME BROADBAND SUBSCRIBERS AT 1.3 MILLION, UP 15% YoY GLOBE BOARD APPROVES 1 ST QUARTERLY DISTRIBUTION OF COMMON CASH DIVIDENDS OF P22.75 PER SHARE Globe Telecom, Inc. recorded strong consolidated service revenues for 2017, ending the year with a topline of P127.9 billion, a 6% growth from last year and is the highest full year revenue level posted by the company. Continuing the trend seen in the past periods, fourth quarter revenues reached P32.8 billion, up 2% from last quarter and 5% higher than the same quarter last year. The sustained revenue momentum was driven by the solid growth in data-related products brought about by the increasing popularity of streaming and on demand video content. This was likewise enabled by the game-changing initiatives rolled-out by the Company, including the promotion of the digital lifestyle, innovative and relevant offers and content partnerships, underpinned by a robust 3G and 4G network. Mobile revenues grew 7% year-on-year, at P98.5 billion in 2017 from the P92.3 billion reported a year ago, driven by the continued mobile data revenue growth as more Globe customers embraced the digital lifestyle. Globe Prepaid and TM, the Company s mass-market brand, posted revenue growths of 11% and 8%, respectively, against the same period last year, while Globe Postpaid recorded a 1% increase year-on-year. Globe s mobile subscriber base 1 reached 60.7 million as of end-december 2017, down 3% from the 62.8 million subscribers reported a year ago. The decline in the cumulative mobile subscriber base was due to the change in reporting of the Company s prepaid subscribers beginning On a product perspective, mobile data remains to be the biggest contributor to total mobile revenues, increasing contribution to 44% against 38% a year ago. Mobile data service revenues reached P43.1 billion in 2017, 23% higher than the P35.0 billion reported a year ago. Mobile data traffic grew 66% from 361 petabytes (PB) to 600 petabytes (PB) in the year just ended, given the increasing demand for Globe s data-driven product portfolio. On the other hand, mobile SMS revenues were flat and mobile voice declined by 5% year-on-year. But on a normalized basis 2, mobile data revenues would have grown by 30% year-on-year while mobile SMS and voice would have declined by 7% and 4% respectively, as both products continue to be challenged due to the shift to internet-based applications, consistent with global trends. 1 Beginning the first quarter of 2017, the Company excluded in their reporting the prepaid subscribers who do not reload within 90 days of the second expiry period, versus the previous cut-off of 120 days. 2 Normalized view reflects the true growth of the mobile data business. The Free Facebook offer, which Globe began to bundle in the lower denominated prepaid promos in 2015 and subsequently ended in June 2016 for TM and May 2017 for Globe Prepaid, mutes the performance of the mobile data business due to the application of certain accounting standards on bundled promotions. Press Release 4Q

4 The Globe home broadband business likewise sustained its growth momentum at P15.6 billion in 2017, increasing revenues by 7% year-on-year, with total subscriber base now reaching 1.3 million or 15% growth from a year ago. The solid growth in revenues was driven by the continued subscriber expansion in fixed wireless solutions (+26%), given the favorable customer response to the latest Globe home broadband plans. These latest plans provide customers value for money, with broadband bundles and customizable plans that suit the customers lifestyles. The continued aggressive investment in the data network supports the company s commitment to provide fast internet service to two million homes by 2020 and provide affordable world-class entertainment. Globe s corporate data business likewise grew 4% year-on-year at P10.3 billion in 2017 from the P9.9 billion posted in 2016, due to the strong demand for data-driven solutions by corporates in the country. This increasing requirement has generated customer base expansion, circuit count increase and higher usage that contributed to the revenue growth in the corporate data business. Traditional fixed line voice revenues on the other hand, declined by 8% at P3.5 billion from a year ago. Globe posted solid consolidated EBITDA, ending the year with P53.3 billion, up 7% from a year ago. Total operating expenses and subsidy grew in step with revenues, increasing by 6% year-on-year to P74.6 billion from P70.6 billion last year, as Globe continued to re-invest gains to support the growing subscriber base and the aggressive expansion of its data network. EBITDA margin was at 42%, higher than the previous year s margin of 41%. Despite the strong growth in EBITDA, the increased investments in our data network pushed nonoperating expenses and depreciation charges higher for the period, leading to Globe posting a 5% decline in net income at P15.1 billion, as against the P15.9 billion reported in The 2% increase in nonoperating expenses was largely due to the increase in interest expenses and spectrum amortization related to the SMC telco asset acquisition. This however, was partly offset by the recognition of a onetime gain last September, related to the increase in fair value of the retained equity interest of Globe in Globe Fintech Innovations, Inc. (GFI or Mynt). Globe s core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, likewise declined by 15% year-on-year to only P13.5 billion from P16.0 billion in 2016, with the full year impact of the SMC telco asset acquisition. We are pleased with the strong performance of the company this year, maintaining our momentum and posting positive full year revenue and EBITDA results. Globe President and CEO Ernest L. Cu, said. We are confident that our continued investments in our network s data capacity and coverage, will allow us to continue to provide superior customer experience and improve the over-all connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value. Mr. Cu added. Globe spent around P42.5 billion in capital expenditures as of end-december of 2017 to support the growing subscriber base and its demand for data. Of the total capital expenditures spent this year, about 82% was for the data service needs of its customers. To date, Globe has a total of 37,517 base stations, with over 24,700 for 4G 3, to support the service requirements of its customers. 3 Includes HSPA+, WiMAX and LTE Press Release 4Q

5 Recent Developments: The Board of Directors approved in its meeting today the first quarterly distribution of cash dividends of P22.75per share, payable on March 5, 2018 to stockholders on record as of February 20, The first quarter cash dividend payment total is about P3.0 billion. Last January 5, 2017, the Globe Board of Directors approved the Company s cash capital expenditure (capex) budget of US$850 million for 2018, which is consistent with last year s capex figure. More importantly, this sustained level of capex is aligned with Globe s vision to improve internet services in the Philippines, with the goal of becoming an admired nation for having first world internet connectivity. Also, the National Telecommunications Commission (NTC), Department of Information and Communications Technology (DICT), and Department of Trade and Industry (DTI) issued Joint Memorandum Circular No which prescribes a one-year expiration period for all prepaid load in the Philippines, regardless of the amount. The new directive on load expiry started last January 5, 2018; however, the NTC has allowed telecommunications companies to use a phased approach for the implementation of the new directive. As such, the one-year load expiry will apply to load denomination of P300 and up. For prepaid load amounting to P299 and below, Globe will inform its prepaid customers within six months on the implementation date for the one-year expiration. This phased approach will provide Globe ample time to prepare for a smooth and seamless implementation of the expiration change across all denominations. Meanwhile, Globe Home Broadband recently launched its newest promotion Go Unli Plan for as low as P1,699 per month for speeds of up to 5Mbps to P2,899 per month for speeds of up to 100Mbps. This new plan provides consumers unlimited internet (no data cap nor slowing down of internet connection), free landline and unlimited calls to Globe/TM, as well as free content access to Netflix and Disney for six months and two months free access to HOOQ. Broadband customers may choose from a No Lock- Up Plan for an additional one-time modem fee of P2,500 for DSL or P4,500 for (vdsl/fiber) or choose the regular 24 months Lock-Up Plan for only an additional P1,000 installation fee payable in 3 months and can be charged to bill. Promo Period is from January 8 - June 30, Press Release 4Q

6 2017 FINANCIAL SUMMARY In Million Pesos Quarter on Quarter Globe Group Year on Year Q4 Q3 QoQ 31 Dec 31 Dec YoY (%) (%) Service Revenues * 32,767 32,238 2% 127, ,588 6% Mobile 25,370 24,794 2% 98,483 92,255 7% Home Broadband 3,931 3,988-1% 15,645 14,680 7% Corporate Data 2,666 2,600 3% 10,288 9,873 4% Fixed line Voice % 3,490 3,780-8% Operating Expenses and Subsidy * 20,065 18,873 6% 74,580 70,610 6% EBITDA 12,702 13,365-5% 53,326 49,978 7% EBITDA Margin 39% 41% 42% 41% Depreciation 7,396 7,050 5% 27,513 23,849 15% Net Income After Tax (NIAT) 2,104 4,893-57% 15,084 15,888-5% Core Net Income 2,339 3,233-28% 13,546 16,014-15% * Beginning 2017, revenues from premium content services (where Globe is acting as principal to the contract) will be reported gross of the licensors' fees. Revenues for similar services reported in 2016 have also been restated for purposes of comparison. Licensors' fees will be reflected as part of maintenance expense. Full year consolidated service revenues reached P127.9 billion in 2017 from P120.6 billion last year due to the increasing popularity of Globe s data-related product and services across all business segments. Mobile revenues were up 7% to P98.5 billion from last year s P92.3 billion, coming mostly from Globe Prepaid (+11%), and the Company s mass market brand TM (+8%), due to increased data consumption and improved top-ups despite lower cumulative customer base. Home broadband and corporate data likewise, sustained their growth momentum, posting a 7% and 4% increase from a year ago respectively, due to the strong subscriber growth and increasing demand for faster data connectivity and corporate internet solutions. On a quarterly basis, consolidated service revenues maintained momentum and outpaced both the levels in the third quarter of 2017 and same quarter of last year by 2% and 5%, respectively. This quarter s revenue growth came mostly from mobile and corporate data offseting the declines in home broadband and fixed line voice. Total operating expenses and subsidy increased by 6% year-on-year to P74.6 billion from P70.6 billion a year ago. This was mainly driven by increases across all expense line items (except for subsidy, interconnect costs and marketing expenses) to support Globe s aggressive data network expansion and overall service enhancements. Likewise, fourth quarter s total operating cost and expenses grew 6% versus the third quarter due to higher provisions, ads and promo, repairs and maintenance partly offset by lower staff costs, services, taxes and commissions. Press Release 4Q

7 Globe s consolidated EBITDA reached P53.3 billion, surpassing last year s level of P50.0 billion, due mainly to the strong topline. EBITDA margin for 2017 was at 42%, higher versus last year s margin of 41%, as the overall revenue gains fully covered for the increase in expenses. However, on a quarterly basis, Globe s fourth quarter EBITDA declined by 5% to only P12.7 billion from P13.4 billion last quarter due mainly to the expected increases in operating expenses in the fourth quarter of the year. EBITDA margin for the quarter stood at 39%, lower versus the 41% reported in the third quarter of Total depreciation expenses posted a 15% increase to P27.5 billion from the P23.8 billion reported in 2016, given the depreciation costs of incremental asset builds related to Globe s 2016 and 2017 capital expenditure programs. Similarly, total depreciation charges for the quarter jumped to P7.4 billion from P7.1 billion last quarter. Overall, total operating costs including depreciation charges, rose to P102.1 billion or 8% higher than the P94.5 billion reported in On a quarterly basis, total operating costs including depreciation likewise posted an increase of 6%. Non-operating charges increased year-on-year by 2% to P4.3 billion in 2017 from the P4.2 billion reported a year ago, mainly on higher interest expenses and spectrum amortization related to the SMC telco asset acquisition booked during the period. This however, was partly cushioned by the one-time gain booked last September, related to the fair value of retained equity interest of Globe in Globe Fintech Innovations, Inc. (GFI/Mynt). In addition, increase in interest expense as of end December 2017 was due to this year s higher interest expense on higher loan balance. The Globe Group closed the year with consolidated net income of P15.1 billion, down 5% from previous year s P15.9 billion due mainly to higher depreciation expenses and increased nonoperating charges booked during the year, as we recognized the full year impact of the additional costs related to the SMC telco asset acquisition. Globe s core net income, which excludes the impact of non-recurring charges, one-time gain, foreign exchange gains and mark-to-market charges, stood at P13.5 billion, down by 15% year-on-year. As of the end-december 2017, total cash capital expenditures stood at about P42.5 billion (approximately $844 million), 16% higher than last year's level of P36.7 billion. The increase in capital expenditures was partially driven by the delay in capex cash flows in the latter part of 2016, which spilled into 2017 coupled with the Company s continued aggressive network expansion. To date, Globe has a total of 37,517 base stations, with over 24,700 for 4G 4, to support the service requirements of its customers. For 2018, the Company expects the market to remain competitive, given the continued shift of the customer s lifestyles and usage in a digital world. Against this environment, the Company believes that the current revenue momentum built, coupled with the aggressive investments made in the Globe network and the Company s evolving lifestyle bundles which aim to strongly influence the digital lifestyle of Filipinos would allow revenues to increase by low single-digit from 2017 level. EBITDA margin is expected to be around 40%, as margins would be continuously impacted by the increasing contribution of lower-margin data-related products, and efforts in managing costs. 4 Includes HSPA+, WiMAX and LTE Press Release 4Q

8 This year will likewise be impacted by the additional interest expenses from additional debt related to 2018 capex budget of approximately US$850 million. Depreciation charges will remain elevated given the anticipated capex programs. Moreover, the Company s share in equity losses and spectrum amortization related to the SMC transaction will be up to P35 million per month. Mobile Business In Million Pesos Service Revenues* Quarter on Quarter Year on Year Q4 Q3 QoQ 31 Dec 31 Dec YoY (%) (%) Mobile Voice 7,864 8,188-4% 32,275 34,065-5% Mobile SMS 5,758 5,601 3% 23,149 23,199 - Mobile Data 11,748 11,005 7% 43,059 34,991 23% Mobile Service Revenues 25,370 24,794 2% 98,483 92,255 7% * Beginning 2017, revenues from premium content services (where Globe is acting as principal to the contract) will be reported gross of the licensors' fees. Revenues for similar services reported in 2016 have also been restated for purposes of comparison. Licensors' fees will be reflected as part of maintenance expense. Mobile service revenues, which accounted for 77% of Globe s consolidated service revenues for the year just ended, rose to P98.5 billion, up 7% from last year s level of P92.3 billion, due to the continued strong revenue contributions from mobile data (+23%) as partly offset by the decline in traditional voice. On a sequential basis, Globe s quarterly mobile revenues were also up by 2% against the previous quarter. Mobile voice revenues, which accounted for 33% of total mobile service revenues, declined by 5% to only P32.3 billion in 2017 from P34.1 billion in On a quarterly basis, mobile voice revenues likewise declined by 4% versus the third quarter. Consistent with global trends, voice revenues remain challenged given the migration of voice traffic to alternative internet-based applications, such as Viber, Facebook, Skype, and Whatsapp, among others. Mobile SMS revenues, which accounted for 24% of total mobile service revenues, closed the year at P23.2 billion, relatively flat against the same period last year. On a sequential basis, mobile SMS revenues increased by 3% quarter-on-quarter due to the expected seasonal spike during the holiday break in December. Mobile data, the biggest contributor to mobile business, accounted for 44% of total mobile service revenues (vs. 38% in 2016). As of end-december 2017 mobile data revenues stood at P43.1 billion, up a robust 23% from P35.0 billion a year ago. On a sequential basis, mobile data revenues increased by 7% from the P11.0 billion posted in the previous quarter to P11.7 billion this period. The sustained growth momentum in mobile data revenues was driven by rising consumption on streaming and on demand video content and the growing smartphone penetration. Data traffic likewise continue to increase yearon-year boosted by the enhanced network experience from our improved 3G, HSPA+ and LTE networks. On a normalized basis 5, mobile data revenues would have grown by 30% while mobile SMS and voice would have declined by 7% and 4% respectively against the same period last year. 5 Please refer to page 1 for the normalized view on the true growth of the mobile data business. Press Release 4Q

9 Key Drivers for the Mobile Business Quarter on Quarter Year on Year Cumulative Subscribers (or SIMs) Net End of Period Q4 Q3 QoQ 31-Dec 31-Dec YoY (%) (%) 60,686,155 59,331,366 2% 60,686,155 62,798,858-3% Globe Postpaid 2,484,788 2,473,374-2,484,788 2,489,719 - Prepaid * 58,201,367 56,857,992 2% 58,201,367 60,309,139-3% Globe Prepaid 27,909,102 27,706,128 1% 27,909,102 28,433,793-2% TM 30,292,265 29,151,864 4% 30,292,265 31,875,346-5% Ave. Revenue Per Subscriber (ARPU) 1 Globe Postpaid 1,177 1,209-3% 1,173 1,132 4% Prepaid Globe Prepaid % % TM % % Subscriber Acquisition Cost (SAC) 2 Globe Postpaid 8,408 8,954-6% 8,824 7,452 18% Prepaid Globe Prepaid % TM % Ave. Monthly Churn Rate (%) Globe Postpaid 2.2% 2.6% 2.5% 3.3% Prepaid Globe Prepaid 7.5% 7.1% 7.7% 6.8% TM 7.2% 7.9% 8.0% 6.8% 1 ARPU is computed by dividing recurring gross service revenues (gross of interconnect expenses) segment by the average number of the segment s subscribers and then dividing the quotient by the number of months in the period. 2 SAC for 2016 have been restated for purpose of comparison * Please refer to page 1 for the discussion of the basis of reporting prepaid subscriber. Globe closed the year with a total mobile subscriber base of 60.7 million, down 3% from 62.8 million subscribers last year. Due to the elevated level of prepaid churn rates (caused by the change in the basis for reporting subscribers * ), this period showed a net reduction of 2.1 million subscribers versus the 6.6 million net incremental subscribers in the same period of As of the end of December 2017, Globe Postpaid had 2.5 million subscribers, which was relatively flat versus last year. Globe Postpaid s gross acquisitions for the year just ended stood at 744,443 or 17% lower than last year. Total net reduction in postpaid subscribers as of end-december 2017, despite the improved churn rate (from 3.3% a year ago to only 2.5% this period), resulted from the slowdown in gross acquisitions. Press Release 4Q

10 Globe Prepaid gross acquisitions grew by 3% year-on-year from the 24.6 million gross additions in The year-on-year improvement in gross additions was driven by the brand s continued acquisition efforts and the strong take-up of value-for-money data bundles. Total net reduction in subscribers stood at 525 thousand as of end-december 2017 compared to the 2.5 million net incremental subs in 2016 due mainly to the increased churn rate (from 6.8% in 2016 to 7.7% in 2017). Total cumulative Globe Prepaid subscribers reached 27.9 million as of end December 2017, down 2% from a year ago. Increase in churn rate was due mainly to the shift in subscriber recognition in 2017, excluding those who do not reload within 90 days of the second expiry period. TM s gross acquisitions on the other hand, slightly declined year-on-year by 1%, reaching 28.1 million in 2017 from the previous year s 28.5 million. Due to the increased churn rates as of end- December 2017 (from 6.8% in 2016 to 8.0% this period), total net reduction in subscribers stood at 1.6 million this period compared to 4.2 million net incremental subs in TM cumulative subscriber base stood at 30.3 million subscribers at the end of December 2017, down 5% from the 31.9 million subscribers a year ago. Similar to Globe Prepaid, the increased churn this period was mainly due to the change in the basis for reporting subscribers (as stated above). Blended ARPU for the year just ended improved by 3% year-on-year to P133 from P129 in same period of Globe Postpaid ARPU registered at P1,173, which increased by 4% from a year ago due to the continued retention efforts of quality subscribers. Globe Prepaid ARPU was up year-onyear to reach P115 this period from P108 a year ago. TM ARPU likewise followed the same trajectory as Globe Prepaid, ending the year with an ARPU of P66, up by 5% against Globe Postpaid subscriber acquisition cost (SAC) was 18% higher year-on-year to P8,824 from P7,452 from a year ago. Globe Postpaid SAC remains recoverable well within the 24-month contract of the postpaid plans. Globe Prepaid SAC and TM SAC, however were flat year-on-year at P33 and P13, respectively. Globe Prepaid and TM SAC remained recoverable within a month s ARPU. Press Release 4Q

11 Fixed Line and Home Broadband Business In Million Pesos Quarter on Quarter Year on Year Q4 Q3 QoQ 31-Dec 31-Dec YoY (%) (%) Service Revenues Home Broadband 3,931 3,988-1% 15,645 14,680 7% Corporate Data 2,666 2,600 3% 10,288 9,873 4% Fixed line Voice % 3,490 3,780-8% Fixed Line & Home Broadband Service Revenues 7,397 7,444-1% 29,423 28,333 4% Globe Group s fixed line and home broadband revenues posted a 4% increase year-on-year from P28.3 billion in 2016 to P29.4 billion in The growth was driven by solid contributions of both home broadband and corporate data segments. On a quarterly basis, fixed line and home broadband revenues were slightly down against the third quarter due to the decline in fixed line voice and home broadband partly cushioned by the 3% improvement in corporate data. Globe Home Broadband posted 7% growth to reach P15.6 billion in the year just ended from P14.7 billion reported a year ago, as a result of sustained expansion of its customer base mainly from the growth in fixed wireless services (up 26% year-on-year). The revenue growth and customer uptake throughout the year was partially driven by the relevant and compelling new Globe Home Broadband bundles and packages. This was likewise supported by the higher subscriber base, rising to 1.3 million subscribers or 15% increase year-on-year. On a sequential basis, home broadband revenues slightly declined by 1% quarter-on-quarter to only P3.9 billion from close to P4.0 billion in 3Q17. Quarter on Quarter Year on Year Q4 Q3 QoQ 31-Dec 31-Dec YoY (%) (%) Cumulative Broadband Subscribers Fixed Wireless 655, ,445 6% 655, ,117 26% Wired 645, ,808 1% 645, ,633 6% Total (end of period) 1,301,161 1,255,253 4% 1,301,161 1,130,750 15% The corporate data segment sustained its growth momentum, ending the year with P10.3 billion revenues, up 4% against the same period of 2016, fueled by strong demand for domestic and international leased line services, sustained circuit base expansion, and the increasing demand for cloud-based services, managed solutions. On a quarterly basis, corporate data revenues likewise grew by 3%. Globe s total fixed line voice revenues on the other hand, declined year-on-year and quarter-on-quarter by 8% and 7%, respectively. Press Release 4Q

12 Group Operating Expenses In Million Pesos ANNEXES Quarter on Quarter Globe Group Year on Year 4Q 3Q QoQ 31 Dec 31 Dec YoY (%) (%) Cost of Sales 3,479 3,218 8% 13,014 11,914 9% Less: Non-service Revenues 2,060 1,668 24% 7,375 6,194 19% Subsidy 1,419 1,550-8% 5,639 5,720-1% Interconnect 1,889 1,789 6% 7,852 9,623-18% Selling, Advertising and Promotions 1,850 1,342 38% 5,415 5,738-6% Re-contracting 1, % 3,594 3,569 1% Staff Costs 2,846 3,446-17% 12,238 10,110 21% Utilities, Supplies & Other Administrative Expenses 1,441 1,366 5% 5,216 5,001 4% Rent 1,663 1,604 4% 6,471 5,902 10% Repairs and Maintenance 2,358 1,840 28% 7,823 6,326 24% Provisions 2,150 1, % 5,109 3,262 57% Services and Others 3,424 4,136-17% 15,223 15,359-1% Operating Expenses 18,647 17,323 8% 68,941 64,890 6% Depreciation and Amortization 7,396 7,050 5% 27,513 23,849 15% Costs and Expenses 27,461 25,923 6% 102,093 94,459 8% Other Income Statement Items (Php Mn) Financing Costs net Quarter on Quarter Globe Group Year on Year 4Q 3Q QoQ 31 Dec 31 Dec YoY (%) (%) Interest Expense (1,354) (1,333) 2% (5,043) (3,409) 48% Loss on Derivative Instruments (237) - - (128) - - Swap Costs and Other Financing Costs (84) (58) 44% (209) (163) 28% Foreign Exchange Loss - (150) -100% - (525) -100% (1,675) (1,541) 9% (5,379) (4,097) 31% Press Release 4Q

13 (Php Mn) Quarter on Quarter Globe Group Year on Year 4Q 3Q QoQ 31 Dec 31 Dec YoY (%) (%) Gain on derivative instruments % Foreign Exchange Gain Interest Income % % Others net (739) 1, % 754 (834) -190% Total Other (Expenses) Income (2,027) % (4,271) (4,192) 2% Liquidity and Capital Resources Balance Sheet Data (Php Mn) Globe Group 31 Dec 31 Dec YoY (%) Total Assets 277, ,863 11% Total Debt 131, ,729 24% Total Stockholders' Equity 66,558 63,476 5% Financial Ratios (x) Total Debt to EBITDA (Gross) Total Debt to EBITDA (Net) Debt Service Coverage Interest Cover (Gross) Debt to Equity (Gross) Debt to Equity (Net) Total Debt to Total Capitalization (Book) Total Debt to Total Capitalization (Market) (Php Mn) Globe Group 31 Dec 31 Dec YoY (%) Capital Expenditures (Cash) 42,541 36,745 16% Increase (Decrease) in Liabilities related to Acquisition of PPE & Capitalized Asset Retirement Obligations 8,891 2, % Total Capital Expenditures 51,432 39,091 32% Total Capital Expenditures / Service Revenues (%) 40% 32% Press Release 4Q

14 Products & Services: Globe continues to solidify its leadership in the digital space as the data provider of choice for Filipinos digital lifestyles with the various suite of products and services launched as well as new partnerships forged during the quarter. Mobile Business Globe Postpaid expanded its smartphone line-up with the successful launch of the new iphone 8/8 Plus and iphone X last November Customers can avail of the newest generation of iphone devices through Globe Postpaid s ThePLAN which ranges from P599 to P2499 monthly which already come with unlimited texts and calls to Globe/TM, mobile data, and free 6 months access to content such as Netflix and Disney Channel Apps and free 3 months access to premium Spotify. The new iphone 8 may be availed via ThePLAN P800 cash-out for 24 months (for a total of P2,599 monthly) or may opt to choose iphone 8 Plus with ThePLAN P1,050 cash-out for 24 months (for a total of P2,849 monthly). In addition, iphone X may also be availed via ThePlan 1799 with an additional P1,600 cash out monthly (for a total of P3,399 monthly). Home Broadband In the last quarter of the year, Globe At Home has committed itself to transforming home entertainment from strict schedules to making primetime your time through its high-speed internet and partnerships with world class content partners. Through Globe At Home s partnership with FOX Networks Group, customers can experience a wider variety of content (latest Hollywood movies, TV shows, live sports and more) with Globe Streamwatch Roku Powered s collaboration with FOX+ 6. Customers now have access to FOX+ for 3 months using Globe Streamwatch Roku Powered device. Globe Streamwatch Roku Powered device can be availed by adding P50 for 24 months to a Globe At Home plan or a onetime payment of P999. Globe At Home is bridging the gap between OFWs and their families as the Prepaid Home WiFi becomes finally available on SarisariPH 7. Sending a Globe Prepaid Home WiFi along with other gift items through SarisariPH is easy: customers simply choose the items from over 170 brands for dining, shopping, health, leisure, and other services on the website. Then, they must fill out an order form, pay by credit card or pay cash via PayRemit outlets in key OFW cities abroad. The recipient will receive the egift via SMS or within a few minutes. Globe will contact egift recipient within 24 hours upon receipt of egift to confirm his/her preferred date and time of delivery. GoWiFi rollout Through the partnership and collaboration of Globe Telecom and SM Supermalls, mall goers will now be able to experience quality connectivity with GoWiFi Auto. This premium GoWiFi service allows customers to surf all day in 34 selected SM malls nationwide. GoWiFi Auto allows customers to connect automatically when moving to other locations within the mall and extends browsing time beyond the free daily time allotted to users. A one-time free trial allows new users to access GoWiFi 6 FOX+ is a video-streaming service in Asia promising an unrivalled combination of the latest TV series, first-run Hollywood blockbusters, hit Asian series and movies, live sports, thrilling documentaries and a big library of content all in one place in stunning high-definition. 7 SarisariPH, an online gifting service made possible by Globe International Business, allows Filipinos from all over the world to send electronic gift certificates or egifts to their family and friends in the Philippines. Press Release 4Q

15 Auto for three days from the moment of successful activation on the GoWiFi portal. The free 3-day trial promo ended last December 31, International Globe Telecom and Abojeb, a leading maritime solutions services and manpower provider, have initiated a stronger collaboration as part of their shared common advocacy to support more than 400,000 Filipino Seafarers working globally and their families at home. To help seafarers stay connected with their families at home, easing loneliness and bridging the distance between their loved ones, Globe rolled out the Globe Seafarer SIM which offers special roaming rates for calling and texting. The Globe Seafarer SIM has unique features designed for seafarer needs to call home for as low as P30 per minute and P10 per text while abroad to Globe numbers. The SIM which is valid for one year has a pre-activated international roaming feature and comes with free five (5) international text credits to Globe/TM numbers every month for 12 months from over 50 destinations. Subsidiaries & Affiliates GCash, the pioneer in electronic payments using QR codes, partnered with Max s Group, Inc. (MGI), the largest casual dining company in the Philippines, to help jumpstart the country s move into a cashless ecosystem. MGI is composed of Max s, Pancake House, Krispy Kreme, Jamba Juice, Yellow Cab, Teriyaki Boy, Dencio s, Maple, Singkit, Kabisera, Sizzlin Steak, and Le Coure de France. The GCash scan to pay feature will be available in at least 50 stores across MGI s network by the end of November, 2017 with more stores slated to rollout the service in Subsequently, GCash also partnered with Ministop 8, one of the largest 24-hour convenience store chains in the Philippines, to promote and spread the benefits of cashless payments in the country. In the same period, GCash mobile wallet service has announced that its scan to pay feature is now available at all SM Stores nationwide and at information booths of SM malls. The SM Store is the latest addition in a growing list of merchants which have embraced the GCash App scan to pay feature. Among the early adopters are Mercato Centrale in Bonifacio Global City and Ayala Malls, particularly Glorietta. Moreover, GCash also partnered with Noel Bazaar to make shopping even easier with the scan to pay feature and give customers a treat with 10% cashback for their purchases with GCash. Noel Bazaar were conducted in different venues (World Trade Center in Pasay City from November 16 to 19 and November 24 to 30; Filinvest Tent in Alabang from November 30 to December 3 and SMX Convention from December 14 to 17. Using GCash scan to pay method is like a walk in the park. A customer with a smartphone only needs to either download or update to the latest version of the GCash App, create an account and fund the GCash wallet through cash-in centers located across the country. Once done, the customer just has to tap on Scan QR and point the phone s camera at the item s QR code to pay. Meanwhile, The Bench and Suyen Global Brands will expand the use of GCash scan to pay feature to include all of its retail outlets and its other brands nationwide by mid-january, to make shopping more convenient and secure. By simply scanning the GCash QR (quick response) codes present in the stores, GCash users can pay for any item at Bench and at least 39 other affiliated brands which include Paul Smith, American Eagle, The Face Shop, Aldo, Assembly, Aldo Accessories, Bench Body, Bench Fix Salon, Bench Kiosk, Bobbi Brown, Call It Spring, Cotton On, Cotton on Kids, Cath Kidston, Charles and Keith, Dimensione, Estee Lauder, Fox, Her Bench, Human, Jo Malone, Kashieca, La Senza, Maisen, 8 Ministop is a franchise of Ministop Co. Ltd., one of the largest convenience store chains in Japan. It is a subsidiary of Robinsons Retail Holdings, Inc., the second-largest multi-format retailer in the Philippines. Press Release 4Q

16 Multibrand, Marugame, Mothercare, Origin, Pablo, Pedro, Paul, Personal Exchange, Repetto, Rubi, Skin Expert, St. Marc, Typo, Under Armour, and Vero Moda. For questions, please contact: Carlo Puno Financial Planning and Analysis Jose Mari S. Fajardo Investor Relations (632) About Globe Globe Telecom is a leading full service telecommunications company in the Philippines, serving the needs of consumers and businesses across an entire suite of products and services including mobile, fixed, broadband, data connections, internet, and managed services. Its principals are Ayala Corporation and SingTel who are acknowledged industry leaders in their respective countries and in the region. It is listed on the Philippine Stock Exchange under the ticker symbol GLO and had a market capitalization of US$5.1 billion as of the end of December Further information can be obtained by visiting the web at Press Release 4Q