GLOBE ANNOUNCES FIRST QUARTER 2017 RESULTS TOPLINE GROWTH AND RECORD EBITDA SUSTAINED

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3 GLOBE ANNOUNCES FIRST QUARTER 2017 RESULTS TOPLINE GROWTH AND RECORD EBITDA SUSTAINED CONSOLIDATED SERVICE REVENUES AT P31.1 BILLION, UP 4% YoY; EBITDA AT P13.3 BILLION; UP 2% YoY; NIAT AT P3.8 BILLION, DOWN 13% YoY; CORE NIAT AT P3.7 BILLION, DOWN 12% YoY; MOBILE SUBSCRIBERS AT 58.6 MILLLION, UP 2% YoY HOME BROADBAND SUBSCRIBERS AT 1.19 MILLION, UP 8% YoY GLOBE BOARD APPROVES 2 nd QUARTERLY DISTRIBUTION OF COMMON CASH DIVIDENDS OF P22.75 PER SHARE Globe Telecom, Inc. closed the first three months of 2017 with record-level consolidated service revenues of P31.1 billion, 4% higher than same period last year s P30.0 billion, and P62 million higher than prior quarter s all-time high revenues. The sustained solid revenue growth across all data-related segments, as well as the continued subscriber expansion for both mobile and broadband, led to this period s strong performance. This was likewise aided by the Company s game-changing initiatives including a digital lifestyle play, innovative offers, and content partnerships with iconic global brands, backed by robust 3G and 4G networks nationwide. Mobile revenues stood at P23.8 billion as of end-march 2017, up 3% year-on-year, from the P23.1 billion reported a year ago. This was mainly attributed to the continued strong data consumption as more customers adopt the digital lifestyle. TM, the Company s mass-market brand, registered 7% revenue growth from last year, while Globe Prepaid revenues posted 3% improvement from Globe Postpaid revenues on the other hand, was flat year-on-year. Globe s mobile subscriber base reached 58.6 million for the first three months of the year, up 2% from the 57.3 million subscribers reported in the same period of On a product perspective, mobile data remains the biggest contributor to total mobile revenues, now reaching 42% as of the first three months of the year. Mobile data service revenues registered close to P10.0 billion for the three-month period just ended, or 8% higher than the P9.2 billion reported a year ago. Mobile data traffic grew 84% from 71 petabytes (PB) in the first three months of 2016 to 131 petabytes (PB) this period, as smartphone penetration now reached 63%. The continuous ramp up of data traffic and smartphone penetration only proves that Globe remains to be the network of choice of mobile data users. Mobile voice declined by 3% year-on-year while SMS increased by 3%. The Globe home broadband business likewise showed consistent growth year-on-year, registering a total of P3.8 billion revenues as of end-march this year, up 9% from the P3.5 billion reported a year ago. Home broadband s robust revenue performance was boosted by the continued subscriber expansion, which now reached 1.19 million as of the first three months of This was likewise aided by the strong take-up of home broadband s latest plans and bundles which caters to the growing demand for lifestyle and entertainment-driven connectivity requirements such as video, gaming, information, commerce, shopping, and banking. Press Release 1Q

4 Globe s corporate data business improved by 7% at P2.5 billion as of end March this year, higher from the P2.4 billion posted in the same period of This was mainly attributed to the rising demand for data connectivity, impacting customer base expansion, circuit count increase and higher usage. Traditional fixed line voice revenues however, posted a decline of 2% from same period last year. Globe s record-level consolidated EBITDA stood at P13.3 billion, up 2% from same period last year. Total operating expenses and subsidy grew by 5% year-on-year to reach P17.8 billion from P17.0 billion last year, as Globe continued to invest in its data networks and support the growing subscriber base. EBITDA margin was at 43%, lower than the 44% margin reported a year ago but still higher compared to the 40% recorded in the fourth quarter of Despite the sustained topline and EBITDA growth, the impact of higher interest expenses and depreciation charges from its network infrastructure investments, as well as Globe s share in equity losses and spectrum amortization related to the SMC telco asset purchase, weighed down Globe s net income. Net income for the period declined 13% to only P3.8 billion from the P4.3 billion reported in the same period of 2016, as the charges related to the SMC telco asset purchase were not present in last year s levels. Globe s core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, likewise declined by 12% year-on-year to reach only P3.7 billion from P4.2 billion in the first quarter of We are seeing encouraging improvements this quarter, despite the temporary setback on profits as we continue to lay down the foundation to secure sustainable growth in the future. Globe President and CEO Ernest L. Cu, said. Our continued aggressive network modernization and upgrades using the latest technologies are all geared towards enhancing our internet services, so that our customers can have a wonderful and seamless connectivity. Mr. Cu added. Globe spent around P8.6 billion in capital expenditures as of end-march of 2017 to support the growing subscriber base and its demand for data. Of the total capital expenditures spent this year, about 81% was for the data service needs of its customers. To date, Globe has a total of 35,325 base stations, with over 22,000 base stations for 4G 1, to support the service requirements of its customers. Recent Developments: The Board of Directors approved in its meeting today the second quarterly distribution of cash dividends of P22.75 per share, payable on June 7, 2017 to stockholders on record as of May 23, The second quarter cash dividend payment total is about P3.0 billion. On the same date, the Board of Directors of Globe approved the declaration of the second semiannual cash dividend for holders of its non-voting preferred shares on record as of August 10, 2017, payable on August 22, The amount of the cash dividend shall be at a fixed rate of % per annum calculated in respect of each share by reference to the offer price of per share on a 30/360 day basis for the six-month dividend period. 1 Includes HSPA+, WiMax and LTE Press Release 1Q

5 2017 FINANCIAL SUMMARY In Million Pesos Globe Group Year on Year 31 Mar 31 Mar YoY Change (%) Service Revenues * 31,121 30,004 4% Mobile 23,799 23,148 3% Home Broadband 3,844 3,534 9% Corporate Data 2,540 2,367 7% Fixed line Voice % Operating Expenses and Subsidy * 17,806 16,937 5% EBITDA 13,315 13,067 2% EBITDA Margin 43% 44% Depreciation 6,437 6,215 4% Net Income After Tax (NIAT) 3,761 4,335-13% Core Net Income 3,681 4,185-12% * 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. On a consolidated view, Globe ended the first three months of 2017 with gross service revenues of P31.1 billion, 4% higher than the P30.0 billion reported in the same period last year. The sustained revenue performance was due to the continued strong take-up of data-related products and services across all segments. Mobile revenues posted a 3% increase year-on-year with improvements coming mostly from the prepaid brands (TM +7%; Globe Prepaid +3%) due to the sustained prepaid subscriber growth despite the elevated churn rates, bringing total mobile subscribers to 58.6 million, up 2% from 57.3 million subscribers reported a year ago. Home broadband and corporate data business segments likewise posted solid growths compared to the same period last year due to the increasing demand for data connectivity and managed service solutions backed by the robust subscriber and circuit base expansion year-on-year. On a quarterly basis, Globe s gross consolidated service revenues were flat as compared to the strong fourth quarter of The slight improvements from mobile and home broadband revenues were offset by the decline in fixed line voice revenues. Globe s operating expenses and subsidy for the first three months of the year stood at P17.8 billion this year, 5% higher from the P16.9 billion recorded in the same period last year. This was mainly driven by higher maintenance, staff costs, lease and inventory provisions as partly offset by lower subsidies and interconnection fees. However, compared to the previous quarter, Globe s operating expenses and subsidy were lower by 4% as prior quarter includes catch-up accruals usually booked in the fourth quarter of the year. Depreciation expenses as of end-march 2017 increased to P6.4 billion this period or 4% from P6.2 billion in the same period last year. The increase in depreciation expenses resulted from the depreciation costs of incremental asset builds related to Globe s 2016 and 2017 capital expenditure programs. Press Release 1Q

6 Overall, Globe s total cost and expenses including depreciation charges for the first three months of the year, rose to P24.2 billion or 5% higher than the P23.2 billion reported a year ago, but lower by 3% compared to prior quarter. Consolidated EBITDA for the first three months of 2017 remained strong at P13.3 billion, up 2% from the P13.1 billion reported from same period of The growth in EBITDA was driven by sustained top-line growth offseting the increase in operating expenses. This resulted to a 43% EBITDA margin for the first three months of the year, slightly behind last year s 44% but still higher compared to the 40% recorded in the fourth quarter of Globe s consolidated net income as of end-march of 2017 reached P3.8 billion, lower than the P4.3 billion net income reported in the same period last year largely from higher interest expense and depreciation expenses, coupled with Globe s share in equity losses and spectrum amortization related to the SMC telco asset purchase, which were not present in last year s levels. Likewise, compared to the fourth quarter of 2016, this period s net income was lower by 10% due to higher non-operating charges and last quarter s recognition of Bayan s deferred tax asset. Globe s core net income, which excludes the impact of non-recurring charges, foreign exchange gains and mark-to-market charges, stood at P3.7 billion, still lower by 12% year-on-year, as the gains in EBITDA was not able to offset the increase in depreciation in the period. Compared to prior quarter, core net income for the first quarter of the year was likewise lower by 14%. Globe spent around P8.6 billion in capital expenditures through the first three months of the year to support the growing subscriber base and its aggressive data network expansion, in which 81% was spent for data-related initiatives. To date, Globe has a total of 35,325 base stations, with over 22,000 base stations for 4G 2, to support the service requirements of its customers. 2 Includes HSPA+, WiMax and LTE Press Release 1Q

7 Mobile Business Year on Year In Million Pesos Service Revenues* 31-Mar 31-Mar YoY Change (%) Mobile Voice 7,901 8,181-3% Mobile SMS 5,930 5,763 3% Mobile Data 9,968 9,204 8% Mobile Service Revenues 23,799 23,148 3% * 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 76% of Globe s consolidated service revenues during the first three months of 2017, rose to P23.8 billion, up by 3% from last year s level of P23.1 billion. The growth in mobile service revenues was driven by the sustained revenue growth in mobile data (+8%) despite the intense competition, higher sms revenues (+3%), while voice declined by 3%. Mobile voice revenues, which accounted for 33% of total mobile service revenues posted a decline of 3% year-on-year to reach only P7.9 billion this period from the P8.2 billion reported last year due to the continued migration of voice traffic to alternative channels that make use of internet-based applications. Mobile SMS, which accounted for 25% of total mobile service revenues, closed the first three months of the year at P5.9 billion, 3% higher than the P5.8 billion recorded in the same period of Mobile data, the biggest contributor to mobile business, accounted for 42% of total mobile service revenues (vs. 40% in 2016). As of end-march 2017 mobile data revenues stood close to P10.0 billion, up a robust 8% from P9.2 billion a year ago as more customers become savvier and digitally connected, given the availability of affordable smartphones and tablets in the market. This was likewise boosted by the continued effort of the company to offer relevant data plans which provide premium content and free apps/games, along with the data subscriptions. Press Release 1Q

8 Key Drivers for the Mobile Business Cumulative Subscribers (or SIMs) Net End of Period Year on Year 31-Mar 31-Mar YoY Change (%) 58,580,260 57,265,682 2% Globe Postpaid 2,467,069 2,564,148-4% Prepaid* 56,113,191 54,701,534 3% Globe Prepaid 26,678,674 25,452,193 5% TM 29,434,517 29,249,341 1% Ave. Revenue Per Subscriber (ARPU) 1 Globe Postpaid 1,158 1,099 5% Prepaid* Globe Prepaid % TM % Subscriber Acquisition Cost (SAC) Globe Postpaid 8,533 8,109 5% Prepaid* Globe Prepaid % TM % Ave. Monthly Churn Rate (%) Globe Postpaid 2.8% 2.8% Prepaid Globe Prepaid 10.0% 8.2% TM 10.5% 8.8% 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. * Beginning 1Q17, Globe to report prepaid subscribers which exclude those who do not reload within 90 days of the second expiry period versus the previous cut-off of 120 days. Beginning this first quarter of 2017, Globe management will change how it reports the number of prepaid subscribers. We will now exclude those who do not reload within 90 days of the second expiry period. This is a change from the previous period of 120 days. However, the Company s billing system will continue to exclude prepaid subscribers who do not reload within 120 days of the second expiry period. Globe management believes that the change in reporting of our prepaid subscriber information is aligned with providing a better picture of our active prepaid loader base. Moving forward, prepaid subscribers will be reported on this basis. Globe closed the first three months of the year with a total mobile subscriber base of 58.6 million, up 2% from 57.3 million subscribers reported in the same period last year. This was mainly driven by the sustained efforts in acquiring quality subscribers for the Company s prepaid brands (Globe Prepaid and mass market brand TM). Combined, Globe Prepaid and TM Press Release 1Q

9 gross acquisitions comprised 99% of acquired SIMs during the period. However, with the increase in prepaid churn rates due to the change in the basis for reporting subscribers (as mentioned above), this period showed a net reduction of 4.2 million in subscribers versus the 1.1 million net incremental subscribers in the same period of As of the end of March 2017, Globe Postpaid had 2.5 million subscribers, down by 4% from the same period last year. Globe Postpaid s gross acquisitions for the first three months of 2017 stood at 185,793 or 26% lower than the new acquisitions in the first three months of Total net reduction in postpaid subscribers as of end-march this year resulted from the declining acquisitions despite the improvement in churn from 3.7% last year to only 2.8% this period. Globe Prepaid gross acquisitions grew by 18% year-on-year reaching 6.5 million acquisitions from the 5.5 million gross additions in the same period in The year-on-year improvement in gross additions was driven by the brand s continued acquisition efforts, the popularity of GoSurf data bundles and other value-for-money promotions. Due to shift in subscriber recognition as mentioned earlier, churn rate for the first three months of the year further increased despite the prior period's already elevated churn levels. This resulted to a net reduction of 1.8 million subscribers as compared to last year s net reduction of 463 thousand subs. Total cumulative Globe Prepaid subscribers reached 26.7 million as of the end March 2016, up 5% year-on-year. TM s gross acquisitions as of end-march 2017, stood at 7.2 million or 7% better than previous year s 6.7 million and 3% higher than the previous quarter s 7.0 million gross additions mainly boosted by the continued acquisitions efforts during the period. However, TM churn for the first quarter of 2017 grew to double digits and ended at 10.5%, higher than the prior quarter and the same period last year, which posted churn rates of 8.8% and 6.1%, respectively due to the change in the basis for reporting subscribers (as stated above). This resulted to a net reduction of 2.4 million subscribers as compared to the 1.6 million net incremental subscribers in the same period of Compared to the previous quarter, net reduction in subscribers was higher by 56%. TM cumulative subscriber base stood at 29.4 million subscribers at the end of March 2017, up 1% from the 29.2 million subscribers a year ago. Globe Postpaid ARPU registered at P1,158, which increased by 5% from a year ago due to the continued retention efforts for quality subscribers. Globe Prepaid ARPUs was down year-onyear to only P111 from P116 in the same period of 2016 but higher compared to the P104 reported in the prior quarter as the dilutive impact of marginal subscribers were diminished. TM ARPU likewise followed the same trajectory as Globe Prepaid, with an APRU of 64 pesos for the three months of the year, slightly down by 1% from a year ago and 4 pesos higher than the 60 pesos posted in the fourth quarter of Globe Postpaid subscriber acquisition cost (SAC) was up year-on-year by 8% to reach P8,533 this period from P8,109 in the same period last year. Globe Postpaid SAC remains recoverable well within the 24-month contract of the postpaid plans. Globe Prepaid SAC likewise was up year-on-year at P42 in the first three months of 2016 from P11 a year ago. TM SAC, on the other hand was lower year-on-year at P6 against the P11 reported in the same period last year. Globe Prepaid and TM SAC remained recoverable within a month s ARPU. Press Release 1Q

10 Fixed Line and Home Broadband Business Globe Group Year on Year 31 Mar 31 Mar YoY In Million Pesos Change (%) Service Revenues Home Broadband 3,844 3,534 9% Corporate Data 2,541 2,367 7% Fixed line Voice % Fixed Line & Home Broadband Service Revenues 7,323 6,856 7% Globe Group s fixed line and home broadband revenues posted a 7% increase year-on-year to reach P7.3 billion this period from P6.9 billion reported in the same period last year. Globe home broadband posted P3.8 billion of revenues as of end-march 2017, 9% higher than the P3.5 billion reported a year ago due mainly to the continued subscriber expansion (+8%) year-onyear. The continued strong revenue growth and customer base expansion was boosted by the various competitive home broadband products bundles with exclusive access to entertainment contents. Home broadband s subscriber base now reached 1.19 million subscribers for the three months just ended from 1.1 million in the same period of Globe Group Year on Year 31 Mar 31 Mar YoY Change (%) Cumulative Home Broadband Subscribers Fixed Wireless 568, ,120 26% Wired 622, ,069-4% Total (end of period) 1,191,261 1,101,189 8% On a consolidated basis, Globe s corporate data segment likewise sustained its growth momentum with P2.5 billion revenues registered in the first three months of the year, up 7% against the same period of 2016, fueled by strong demand for corporate connectivity, domestic and international leased line services, managed service solutions and cloud-based services. However, Globe s total fixed line voice revenues declined year-on-year by 2%. Press Release 1Q

11 ANNEX 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 In the first quarter of 2017, Globe launched the all-net call promos for as low as 1/minute as a result of lowered voice interconnect access charges across telcos. Under the company s latest all-net promos, postpaid customers with Plan 2499 and up may choose to avail of a 299 tack-on that will give them 300-minute calls to all networks. On the other hand, Globe Prepaid subscribers may avail of GoCall50 which gives 50 minutes of calls to all networks, good for 3 days; TM customers may add 5 to any existing call and text promo for 5 minutes of calls to any network, good for 1 day. Home Broadband Globe At Home launched in the first quarter of 2017, its new broadband plans with more affordable options and faster speeds. Starting at Plan 1299, customers already get 10 Mbps speeds and 100 GB of data. It can be bundled with any entertainment device such as Smart TVs, Google Chromecast, and Apple TV, among others. Globe At Home s portfolio of entertainment content also sets up every home with the next level of family entertainment through free access to apps such as Netflix, HOOQ, or NBA league pass on Plan 1299 and up. Moreover, Globe At Home Broadband customers can now choose five (5) YouTube Kids channels that kids can enjoy (free with Globe At Home subscription). With Globe At Home, parents need not worry about what their kids are watching even when they are not around. The top 5 shows Globe At Home recommends for the kids to watch are: HooplaKidz TV, Little Baby Bum, Finding Stuff Out, Kid Made Modern, and Pocoyo. Also during the period, Globe At Home introduced the 1st Prepaid Home WiFi device which is now available at Globe stores nationwide for only P1,999 with 10GB free data allocation. With the Globe Prepaid Home WiFi, users can enjoy Globe s various GoSURF promos, like GoSurf15 (40MB for two days), GoSurf50 (1GB for three days), GoSurf299 (1.5GB for 30 days), GoSurf599 (4GB for 30 days), and GoSurf999 (8GB for 30 days). Partnerships In the first quarter of 2017, Globe and Philippine Airlines (PAL) have joined forces to provide more benefits to OFWs by offering convenient services that have never been seen before in both industries. The International Business Group (IBG) of Globe started giving free Globe Traveler SIM cards to all passengers on PAL s international flights to Manila. With the free SIM card, OFWs and tourists alike will easily be able to get in touch with their loved ones and connect with friends. All SIM cards are equipped with unlimited calls to Globe and TM subscribers, 20 free text messages to other networks, and 15 Mb mobile data valid for one day. Also, IBG partnered with Mabuhay Miles (Philippine Airlines' frequent flyer program), to make it easier for balikbayans, OFWs, and travelers to get in touch with their loved ones when they reach the Press Release 1Q

12 Philippines. Under the partnership, Mabuhay Miles will give 500 bonus miles when Traveler Sim customers register or update their membership information. Subsidiaries & Affiliates Reinforcing the telco s ties with its Ayala Corporation family, Globe Digital Ventures signed a contract with Ayala s Sureseats for Globe Digital Ventures acquisition and management of its movie schedule and ticketing website, SureSeats.com. This latest partnership allows patrons to experience a faster and hassle-free process of purchasing movie tickets for Ayala Malls Cinemas with the technology that also powers GMovies. Moreover, KonsultaMD, a 24/7 health hotline service by Global Telehealth, Inc. that provides its members access to licensed and professional doctors for immediate medical attention, is now accessible from all telecom operators in the Philippines. Global Telehealth took aggressive steps to be able to move beyond what their customers need by offering KonsultaMD services to other telco networks nationwide. Globe Postpaid customers only need to pay a fee of P150 a month to avail of KonsultaMD services and this can be used by up to four additional members. Globe Prepaid and TM customers have the option to subscribe for an individual membership by paying P15 a week or P60 monthly. Customers of other networks can now subscribe to KonsultaMD by simply logging on to clicking on Subscribe, and going to Other Networks to fill out an online application form. Subscription payments can be made via Visa, MasterCard, GCash, BancNet, or other mobile money providers. Upon the receipt of an SMS and confirmation, customers can start using the service by calling the KonsultaMD hotline at (mobile) or (02) (landline). For questions, please contact: Carlo Puno Financial Planning and Analysis jcpuno@globe.com.ph Jose Mari S. Fajardo Investor Relations ir@globe.com.ph (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, and 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$5.4 billion as of the end of March Further information can be obtained by visiting the web at Press Release 1Q