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Re：4Q2014FiNANCIAL＆OPERATINGRESULTS

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Date　　4Februarv2015

1

GLOBE ANNOUNCES RECORD 4Q and FULL YEAR 2014 RESULTS:

STRONGER 2ND HALF REVENUE PERFORMANCE, REACHING A NEW PEAK IN 4Q

FY2014 REVENUES AT AN ALL-TIME HIGH OF P99.0 BILLION, UP 9% YoY;

RECORD EBITDA OF P39.3 BILLION, 8% HIGHER YoY;

RECORD CORE NET INCOME AT P14.5 BILLION, UP 25% YoY;

MOBILE SUBSCRIBERS NOW STAND AT 44.0 MILLLION, UP 14% YoY

BROADBAND SUBSCRIBERS REACH 2.8 MILLION, UP 37% YoY

Globe Telecom, Inc. posted another banner year in 2014, closing the period with record-level

consolidated service revenues of P99.0 billion, besting the previous high of P90.5 billion in 2013. The

solid full-year results were buoyed by a strong second half performance, with fourth quarter revenues at

an all-time quarterly high, peaking at P26.3 billion, 5% higher than the previous best of P25.0 billion in

the preceding quarter and a 13% improvement from the P23.2 billion from the same period last year. This

was driven by the sustained demand for data connectivity across the mobile, broadband and fixed line

data businesses, which improved by 7%, 22% and 17%, respectively, given the increasing affordability of

the service and compelling gadget bundle offers backed by Globe’s improved network with 100% 3G and

4G coverage completed during the year.

Mobile telephony revenues, which contributed 79% of consolidated revenues, grew 7% year-on-year from

the prior year’s P72.8 billion to P78.1 billion in 2014, propelled by growth in the Globe Postpaid and

mass-market TM brands. Driven by the rapid expansion of the postpaid base, which stood at 2.3 million

at the end of the year, Globe Postpaid revenues improved 11% to P29.9 billion from P27.1 billion last

year. For the prepaid segment, TM had another banner year with a 14% growth in revenues and a 21%

increase in customer base compared to last year. TM now accounts for 51% of the total mobile

subscriber base. Despite the continued pressures on yields with the increasing multi-SIM incidence in the

market, as well as the popularity of value-based bucket and unlimited offers for voice and SMS services,

total prepaid revenues improved by 5% to P48.2 billion from P45.7 billion a year ago, signaling its return

on a growth track. Total mobile subscriber base stood at 44.0 million as of end-December 2014, up by a

solid 14% from the 38.5 million a year ago.

The rapid growth momentum for Globe’s broadband businesses continued in 2014, registering steady

double digit growths for both revenues (+22%) and customer base (+ 37%) year-on-year. Globe ended

the year with nearly 2.8 million broadband subscribers, with the strong growths registering across fixed

broadband, wireless broadband and long-term evolution (LTE) solutions of 16%, 42% and 377%,

respectively. The introduction of more affordable products & competitive tablet bundles throughout the

year and the expanded pervasiveness of the fixed and wireless broadband network stimulated the robust

performance in the year just ended.

The Company’s fixed line data segment likewise posted 17% growth in revenues of P5.5 billion, or P790

million higher compared to the P4.7 billion revenues posted in 2013, as the corporate demand for various

communications and connectivity solutions continue to grow. Likewise, the fixed line voice segment

2

improved by 7% to P2.8 billion from P2.6 billion the previous year, given the continued popularity of

bundled internet and landline plans at competitive price points.

Total consolidated EBITDA reached a record P39.3 billion in 2014, up by P2.8 billion or 8% against the

P36.5 billion registered in 2013, as the revenue gains fully offset the increase in operating expenses.

Operating expenses, which include subsidy and other operating expenses, grew by 11% from P54.0

billion in 2013 to P59.8 billion in 2014. Higher spending across all accounts, except for interconnect and

re-contracting costs, was largely to support management strategies, business, subscriber and data-network

expansion, and post-Yolanda restoration activities. In addition, the increase in subsidy and marketing

spending resulted from the successful launch of the latest smartphones from Apple and Samsung (iPhone

6/6 Plus; Samsung Note 4) during the last quarter of the year. However, the increase in expenses was

partly cushioned by lower interconnect costs year-on-year. The continued surge in Globe’s mobile

subscriber base has led to the decreasing inter-network traffic largely coming from domestic core services

given various intra-network offers. Consolidated EBITDA margin for 2014 remained steady at 40% year-

on-year, in line with management’s earlier guidance.

Driven by the growth in EBITDA coupled with lower depreciation expenses, largely on accelerated

depreciation (from P9.1 billion in 2013 to only P1.6 billion in 2014), and a decrease in non-operating

charges, Globe’s all-time high net income surged to P13.4 billion in 2014, 170% higher against the P5.0

billion net income reported in 2013. Globe’s core net income, which excludes the impact of accelerated

depreciation and other non-recurring charges, likewise grew 25% year-on-year to an all-time high of

P14.5 billion from P11.6 billion in 2013.

“2014 is another banner year for Globe Telecom, reaching the best-ever consolidated service revenues,

EBITDA, net income and core net income, despite intensifying competition Our full year results are

testaments of our continued commitment in creating a complete digital experience, delivering best-in-

class products and services and a whole new level of customer service experience for our subscribers.”

Ernest L. Cu, President and CEO of Globe Telecom, Inc., stated.

“Reaping the benefits of our modernized network, with 100% 3G and 4G coverage, we have seen a steady

and healthy growth in both our mobile and broadband businesses, surpassing all of our expectations, and

we are confident in sustaining this momentum moving forward. Even as we face new challenges in the

coming year, we are optimistic that the new innovations and product offerings we have lined-up will

continue to be relevant to our customers, provide growth across all our businesses and create value for our

shareholders.” Mr. Cu added.

Setting another milestone in Philippine telecommunications and another revolutionary move, the

Company unveiled the much-anticipated Generation 3 (Gen3) stores last December 15, 2014 at two of

Globe's biggest stores -- in SM North EDSA, Manila and Limketkai Mall, Cagayan de Oro. The Globe

Gen3 stores were designed by Tim Kobe, founder and CEO of Eight, Inc. whose brainchild is the iconic

Apple store in Manhattan, New York. The new stores promised a fresh experience for its customers and

a unique retail concept, which is a first of its kind in the Philippines. It will also house interactive

lifestyle vignettes that will feature a myriad of products within interesting displays that make it more

relevant to customers. The installations are made flexible and reconfigurable allowing the store to

transform, keeping the environment always fresh and giving customers a reason to return.

3

In line with the strategy to grow the postpaid business, Globe Postpaid successfully launched the new

iPhone 6 and iPhone 6 Plus last November 2014. Given its long-standing partnership with Apple, the

Company was able to provide a complete suite of compelling offers and exclusive privileges for a total

digital experience for Philippine consumers. The iPhone 6 (16GB) was made available at Plan 1299 with

P800 monthly cashout good for 24 months, while the iPhone 6 Plus (16GB) was offered at Plan 1299

with P1,000 monthly cashout also for 24 months, payable through major credit cards at 0% interest. Both

plan offers come with 3GB of GoSURF mobile data monthly, Photo Bundle for unlimited access to

Instagram, Photo Repost, Photo Grid, and Instasize, 20 minutes of calls to all networks, 400 texts to all

networks, free 3 months of access to Spotify Premium, and free Gadget Care coverage for 1 month.

Alongside its launch, Globe Postpaid brought back its highly-successful Reset Program, a Globe-first,

which allows existing postpaid customers to renew or extend their existing account to get the iPhone 6 or

iPhone 6 Plus. This means that if a subscriber's 24-month contract is still not up for renewal to get a new

device, a corresponding "reset fee" can be settled to get the latest device under the same postpaid line.

The reset program was made available until December 31, 2014.

Meanwhile, the Company introduced more ways to customize the Globe Postpaid plans with the Lifestyle

Bundles, which provide mobile internet offers for Globe Postpaid for as low as 99 pesos for 30 days.

Lifestyle Bundles are designed for those who access just a few apps or sites specific to their needs at work,

school, or their interests and hobbies. It also comes with additional freebies like free exclusive in-app

stickers, special photo app filters, discounts at specialty shops, vouchers and more. The Lifestyle bundle

can be availed for as low as Plan 299, giving subscribers options to access different bundles, such as the

Navigation Bundle, Chat Bundle, Photo Bundle, Work Bundle, Shopping Bundle.

Globe Prepaid on the other hand, introduced another first for prepaid customers when it launched the

affordable gadget bundles beyond its customizable prepaid promos dubbed “Globe Prepaid GoGadgets.”

Now prepaid subscribers can upgrade to a smartphone at a discount (ranging from P1,699 to P7,899), and

get their money back with every subscription to a GoGadget’s promo until the phone they purchased is

almost free. GoGadgets also gives its customers the freedom to choose their preferred prepaid promo

(combos that include either unlimited texts to all networks with some minutes of on-net voice and MBs of

data, or unlimited intra calls with intra texts and MBs of data) with option to avail of a 7, 15 or 30-day

validity. Globe Prepaid customers can also select from among a 6, 12, 18 or 24-month registration

period. There will be rebates per promo registration, and the total rebate that the customer can avail of

will depend on the commitment period the customer will select (the longer the commitment period, the

bigger the rebate). Promo period is from November 6, 2014 – March 31, 2015. Meanwhile, GoSURF50

was also launched during the period, giving its subscribers 250 MB of mobile internet for three (3) days

for only P50, plus an extra 50 MB solely for NBA Game Time, Wattpad, and Piso Mall and 400 MB of

Spotify Basic.

Furthermore, registration to any TM promo now allows its subscribers to enjoy free all-day surfing to

Wattpad up to 30MB per day, by simply texting Free Wattpad to 8888.

For the Broadband business, Globe continued to introduce innovative content offers and various device

plays in order to remain relevant to customers. During the fourth quarter of 2014, Tattoo Postpaid

launched gadget bundle offers with no upfront cashout and low monthly fees (Acer Iconia A1 at

P749/month; Lenovo A3300 at P799/month; Samsung Tab3 7” Lite at 849/month and Lenovo Yoga at

4

P1,099/month). All gadget bundles come with Free three (3) months Spotify Premium subscription of

1GB data per month, Bluetooth speaker, mobile Wi-Fi device and 1GB Globe Cloud. Likewise, Tattoo

Prepaid sustained its best tablet bundle offers with free mobile Wi-Fi and savings as much as P1,995.

Taking the next step from 3G to LTE, Tattoo Prepaid SIM portfolio was re-launched with the new LTE

Combi-SIM (regular & micro SIM) and LTE Tri-SIM (regular, micro & nano SIM) with speeds of up to

42 Mbps plus freebies. LTE Combi-SIM is available for only P40 with Free 50 MB worth of data + Basic

Spotify access of 200 MB, valid for one (1) day, while LTE Tri-SIM is available for only P75 with Free

250 MB worth of data + Basic Spotify access of 400 MB, valid for three (3) days.

The “Globe-NBA Raffle Promo” was likewise introduced during the quarter giving all Globe/Tattoo

Prepaid, Globe/Tattoo Postpaid, TM, and/or Tattoo@Home customers who have availed of any featured

Globe-NBA promo from December 1, 2014 to March 15, 2015 a chance to earn raffle entries to get a

chance to watch their favorite NBA teams live.

In order to strengthen Globe’s retail presence in Italy, a second international Globe store was opened in

Rome last December 7, 2014. This will cater to the needs of the 50,000 OFWs as well as Pinoy tourists

in the Eternal City. In addition, Globe launched a prepaid calling card in Japan with affordable rates to

call the Philippines through its partnership with Brastel, a telco based in Tokyo Japan. The prepaid

rechargeable card is available at major convenience stores in Japan such as Family Mart and 7-Eleven.

Also, as a holiday treat during the Christmas season, Globe’s International business partnered with Line

giving its users worldwide Free calls to Globe and TM mobile subscribers in the Philippines from

December 24, 2014 to January 1, 2015.

“MagLoad via GCash Promo” was also launched during the fourth quarter giving twenty high-

transaction GCash customers the chance to win different gadgets,, entertainment systems, gift certificates

and airtime load. Additionally, several exclusive deals and tie-ups with Jaro Pawnshop, Prime Asia

Pawnshop and Pure Gold were done in order to push and encourage cash-in or cash-out, load and

remittance transactions during the period. Moreover, the GCash AMEX Virtual Pay’s annual subscription

of P250 was waived starting November 14, 2014 until December 31, 2015.

The Company started 2015 with a bang with its recent announcement of the Free Viber + FB promo for

all its customers for one (1) month promo beginning January 13, 2015. This initiative was done as a way

to thank all its customers for a wonderful 2014.

Lastly, Infocomm Development Authority of Singapore granted GlobeTel Singapore Pte. Ltd a facilities-

based operations (“FBO”) license to enable GlobeTel Singapore to provide international cable capacities

and other telecommunications services in Singapore. GlobeTel Singapore is a wholly owned subsidiary

of GTI Business Holdings, Inc. which is in turn a wholly owned subsidiary of Globe. GlobeTel

Singapore’s offering will boost connectivity requirements between Singapore and the Philippines and will

further improve business relations between them. In addition, the offering will provide alternate and

redundant cable paths from Singapore to Hong Kong and Japan transiting the Philippines, ensuring stable

connectivity.

5

4Q 2014 FINANCIAL SUMMARY

Full year consolidated service revenues once again reached a historic-high, registering at P99.0 billion

from P90.5 billion last year due to the continued positive growth of Globe’s mobile, broadband, and

fixed line data businesses. Mobile revenues were up by 7% to P78.1 billion from last year’s P72.8

billion, still led by Globe Postpaid and the Company’s mass market brand TM, which grew by 11%

and 14%, respectively. The increase in mobile revenues was supported by the expansion in Globe’s

mobile subscriber base, which increased 14% year-on-year to 44.0 million from 38.5 million last

year. Broadband, fixed line data and fixed line voice revenues, likewise, posted a 22%, 17% and 7%

growth as against last year's levels, respectively, as the cumulative customer base continued to grow

year-on-year, coupled with the acceptance of Globe’s customer-centric product offers.

On a sequential basis, consolidated service revenues for the fourth quarter of P26.3 billion registered

as another quarterly record, growing 5% against the prior quarter and 13% against the same period of

2013. This strong revenue performance was due to the usual seasonal uplift and boosted by the

various promotions launched during the period. The mobile and broadband businesses, continued to

grow quarter-on-quarter by 4% and 15%, respectively. Fixed line data likewise improved by 9% on

account of the sustained demand for data services for the corporate sector. Meanwhile, fixed line

voice sustained its positive growth (+2%) due to the growth in our customer base given the popularity

of internet-landline bundles.

Total operating expenses and subsidy increased by 11% year-on-year to P59.8 billion from P54.0

billion, as Globe continued to re-invest gains to support the growing subscriber base and the

expansion of Globe’s 3G, HSPA+ and 4G network. On a sequential basis, operating expenses and

subsidy grew by 17% to P16.8 billion from P14.3 billion in the prior quarter due to higher spending

on marketing and re-contracting, following the launch of the iPhone 6/6 Plus and Samsung Note 4,

higher provisions, services and other catch-up accruals that are usually booked in the fourth quarter.

Q4 Q3 QoQ 31 Dec 31 Dec YoY

Change Change

(%) (%)

Service Revenues 26,324 25,006 5% 99,025 90,500 9%

Mobile 20,496 19,775 4% 78,069 72,764 7%

Broadband 3,649 3,183 15% 12,687 10,440 22%

Fixed line Data 1,483 1,365 9% 5,480 4,691 17%

Fixed line Voice 696 683 2% 2,789 2,605 7%

Operating Expenses and Subsidy 16,811 14,325 17% 59,754 53,986 11%

EBITDA 9,513 10,681 -11% 39,271 36,514 8%

EBITDA Margin 36% 43% 40% 40%

Depreciation 4,964 4,649 7% 18,123 27,478 -34%

Affected by network modernization 154 291 -47% 1,623 9,066 -82%

Others 4,810 4,358 10% 16,500 18,412 -10%

Net Income After Tax (NIAT) 2,844 3,693 -23% 13,372 4,960 170%

Core Net Income 2,911 3,989 -27% 14,489 11,617 25%

In Million Pesos

Globe Group

Quarter on Quarter Year on Year

2014 2014 2014 2013

6

Full year 2014 consolidated EBITDA reached a record P39.3 billion, up by 8% or P2.8 billion against

last year’s P36.5 billion. Full year EBITDA margin stood at 40%, which is in line with

management’s earlier guidance. The overall revenue gains fully covered for the upsurge in expenses,

which was spent to support the growing subscriber base and the demand for an expanded data

network. Compared to the third quarter and in line with seasonal trends, consolidated EBITDA

declined by P1.2 billion or 11%, as the increase in the top-line was not enough to cover for the growth

in operating expenses. This resulted in an EBITDA margin of 36% in the fourth quarter of the year

against 43% in the previous quarter.

Total depreciation expenses as of end-December reached P18.1 billion, 34% lower than the P27.5

billion in 2013, as bulk of the accelerated depreciation charges related to the modernization projects

were already incurred last year. Accelerated depreciation charges as of end-December of 2014 were

significantly lower at P1.6 billion against the P9.1 billion incurred in 2013. Normal depreciation of

assets was likewise lower at P16.5 billion from P18.4 billion last year, as older assets were already

considered end-of-life by year-end of 2013.

Overall, total operating costs including depreciation charges, declined by 4% year-on-year to only

P77.9 billion in 2014 from P81.5 billion a year ago. On a quarterly basis, total operating costs

including depreciation charges, increased by 15%.

Non-operating charges declined year-on-year by 19% driven mainly by this year’s foreign exchange

gain position against the foreign exchange losses last year. Compared to prior quarter, non-operating

expenses declined by 22%.

Globe closed the year with a historic-high consolidated net income of P13.4 billion, almost three

times the P5.0 billion net income recorded last year. This was mainly driven by the solid EBITDA

growth, lower depreciation charges across normal course depreciation and accelerated depreciation

expenses, net forex and mark-to-market gains recognized during the period. Excluding the non-

recurring accelerated depreciation expenses and foreign exchange and mark-to-market gains, core net

income after tax reached P14.5 billion as of end-December 2014, a robust 25% improvement from the

P11.6 billion in 2013. On a sequential basis, consolidated net income was down by 23% to only P2.8

billion from P3.7 billion last quarter, given increased operating expenses and recurring depreciation

expense as partly offset by lower accelerated depreciation expenses and lower non-operating charges.

Core net income after tax, likewise, declined by 27% to P2.9 billion from last quarter's P4.0 billion.

As of end-December 2014, total cash capital expenditures stood at about P21.1 billion, 27% lower

than last year's level of P29.0 billion. To date, Globe has a total of 25,150 base stations, including

over 15,000 4G1 base stations to support the requirements of its subscribers for 2G, 3G and 4G

services. Although lower than the earlier guidance of $650 million for 2014, the shortfall was mainly

timing driven and is expected to flow through the early parts of 2015 as acceptance of the assets and

the CAPEX programs are made.

For 2015, the Company expects the market to remain challenging and competitive, particularly given

the shifting focus of the customer’s lifestyles and usage into the digital world. Against this

environment, the Company believes that the current revenue momentum built, coupled with the

adaptive platform of digital lifestyle offers to cater to the subscribers’ changing lifestyle could further

push revenues to increase by high single-digit from 2014 level. EBITDA margin is expected to

remain around 40%, as margins would be continuously impacted by the growth of our postpaid

business and the increasing contribution of lower-margin data-related products.

1 Includes HSPA+, WiMax and LTE

7

For 2015, the Company’s new capital expenditures are programmed to be approximately $650

million, which remains consistent with the original CAPEX program earlier guided. With the

growing demand for data and internet connectivity, the Company anticipates that approximately 75%

of said CAPEX would be related to data, including spend for deployments of LTE mobile and LTE

@Home, capacity and coverage augmentation of the 3G, HSPA+ and DSL network, as well as

requirements for domestic transmission and international cable capacities. The balance of the

CAPEX is seen to be spent for business support systems in line with product innovations, and other

corporate CAPEX. With the $200 million CAPEX, which was initially estimated in 2014, expected

to slide into the early parts of 2015, total cash CAPEX for 2015 would be approximately $850

million.

8

Mobile Business

Mobile revenues, which accounted for 79% of consolidated service revenues as of end-December,

increased to P78.1 billion, up by 7% from last year’s level of P72.8 billion. The mobile business

continued its growth trend driven mainly by higher revenue contributions from mobile browsing and

other value-added services and voice. Likewise, growth was complemented by the strong subscriber

growth due to the sustained strong acquisitions of all three Globe brands.

Mobile voice revenues, which accounted for 44% of total mobile service revenues, posted a year-on-year

increase of 7% given the continued popularity of unlimited and bulk domestic voice subscriptions,

offsetting the declines in domestic pay-per-use voice and international voice services. Against the third

quarter, mobile voice likewise registered a 5% increase, an effect driven primarily by seasonality.

Mobile SMS, which accounted for 37% of total mobile service revenues, closed the year at P29.1 billion,

1% above from P28.8 billion of end 2013, driven by the continued popularity of bucket and unlimited

promotions offsetting the declines in regular SMS and international SMS. On a sequential basis, mobile

SMS revenues improved by 4%.

Mobile browsing & other data revenues which accounted for 18% of total mobile service revenues

increased to P14.3 billion as of end 2014, up 23% from P11.6 billion of 2013. On a sequential basis,

mobile browsing & other data revenues increased by 2% compared to prior quarter. The sustained

positive growth in revenues was mostly driven by the continuous demand for data services and the

popularity of data-driven products and applications, and the continuing shift among consumers to a digital

lifestyle. This was further boosted by the increased pervasiveness of Globe’s 3G, HSPA+ and LTE

networks and the proliferation of data-enabled smartphones. The overwhelming success of the Free

Facebook campaign from January – April and from October to November of 2014 helped spur the

revenue growth and boost mobile browsing habit among Globe’s subscribers.

Q4 Q3 QoQ 31 Dec 31 Dec YoY

2014 2014Change

(%)2014 2013

Change

(%)

Service Revenues *

Voice 8,871 8,471 5% 34,684 32,367 7%

SMS 7,549 7,289 4% 29,079 28,794 1%

Mobile Browsing & Other Data 4,076 4,015 2% 14,306 11,603 23%

Mobile Service Revenues 20,496 19,775 4% 78,069 72,764 7%

In Million Pesos

Quarter on Quarter Year on Year

9

Key Drivers for the Mobile Business

2 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.

Globe closed the year with a total mobile subscriber base of 44.0 million, up 14% from 38.5 million

subscribers last year. Fourth quarter’s gross subscriber acquisitions registered a quarterly-high of

10.1 million subscribers, 14% higher than last quarter, driven by the record acquisitions of the

Company’s prepaid (Globe Prepaid) and mass market brands (TM). Combined, Globe Prepaid and

TM gross acquisitions comprised 98% of acquired SIMs during the period. Postpaid gross acquisition

in the fourth quarter was the second highest acquisition for the year, coming from the third quarter’s

record-level gross additions. The increase in gross additions was boosted in part by the competitive

promotions launched during the quarter, including the two (2) months Free Facebook campaign,

which covered the periods between October 3 to November 30. Despite the elevated churn rate as of

end December of 2014 of 6.46% from 5.95% of 2013, full year net incremental subscribers posted a

4% year-on-year increase from 5.4 million in 2013 to 5.6 million net additions this period.

Q4 Q3 QoQ 31 Dec 31 Dec YoY

2014 2014Change

(% )2014 2013

Change

(% )

Cumulative Subscribers (or SIMs) –

Net End of Period44,040,844 42,853,598 3% 44,040,844 38,475,130 14%

Globe Postpaid 1 2,262,257 2,162,911 5% 2,262,257 2,025,538 12%

Prepaid 41,778,587 40,690,687 3% 41,778,587 36,449,592 15%

Globe Prepaid 19,281,720 18,930,226 2% 19,281,720 17,836,441 8%

TM 22,496,867 21,760,461 3% 22,496,867 18,613,151 21%

Ave. Revenue Per Subscriber

(ARPU)2

Globe Postpaid 1,179 1,187 -1% 1,164 1,199 -3%

Prepaid

Globe Prepaid 132 128 3% 130 141 -8%

TM 79 78 1% 79 85 -7%

Subscriber Acquisition Cost (SAC)

Globe Postpaid 9,602 7,004 37% 8,700 7,473 16%

Prepaid

Globe Prepaid 34 23 48% 26 40 -35%

TM 17 11 55% 14 27 -48%

Ave. Monthly Churn Rate (%)

Globe Postpaid 1.8% 2.2% 2.3% 1.9%

Prepaid

Globe Prepaid 6.9% 6.7% 6.4% 5.7%

TM 7.3% 7.0% 7.0% 6.6%

Quarter on Quarter Year on Year

10

Globe Postpaid maintained its leadership on this segment of the market with the continued growth in

acquisitions throughout the year, closing 2014 with nearly 2.3 million subscribers from 2.0 million

last year. The continued success of the fully customizable postpaid plans bundled with the latest

devices from Apple™ and Samsung, plus the recent launch of the Lifestyle bundles, which gives the

subscriber a better choice for their mobile internet requirements, helped improve gross additions to

reach 835,290 as of full year 2014, 17% higher than 711,190 a year ago. Full year net incremental

postpaid subscribers stood at 236,719, 19% lower than 2013 level of 291,070, due to the elevated

level of churn in the second quarter of 2014. During the said quarter, Globe disconnected

approximately 71 thousand customers that were affected by Globe’s migration into its new billing

system in March last year, and those affected by typhoon Yolanda that hit the Southern Philippines in

the latter part of 2013.

Globe Prepaid gross acquisitions substantially increased by 17% or 623,741 new SIMs in the fourth

quarter against the 3.7 gross additions in the previous quarter, bringing the full year gross additions in

2014 to reach 15.9 million or 20% higher than 2013 level of 13.2 million. This was mainly driven by

strong acquisition campaigns, sustained market-relevant promotions and the successful Free

Facebook campaign during several months of the year. Despite the elevated churn in 2014 of 6.37%

vs. 5.75% in 2013, full year net incremental subscribers improved by 4% to 1,445,279 from

1,396,299 in 2013. The increased churn was due to the disconnection of non-paying customers who

took advantage of the free Facebook campaign during the first four months of the year.

TM on the other hand, generated its second highest gross acquisitions for the year achieving a record

high of 5.6 million new SIMs or 12% better than previous quarter level of 5.0 and even higher than its

previous best of 5.4 million in the second quarter of 2014. Similar to Globe Prepaid, the free

Facebook promo boosted the fourth quarter acquisition and TM’s ramp-up in project executions

during the year in order to match competition acquisition efforts. This brings the full year total gross

additions to reach 21.1 million, up 24% from nearly 17 million in 2013. TM’s sustained growth

momentum was boosted by the different value-for-money product launches throughout the year.

Coming from the very strong acquisition, even with the elevated churn rates as of end December

2014, full year net incremental subscribers still improved by 6% from 3.7 million in 2013 to 3.9

million in 2014.

Full year 2014 blended ARPU declined by 7% to only P159 from P170 of 2013 due to the combined

effects of multi-sim usage, continued pressures on yields caused by the popularity of value-based

bucket and unlimited offers for core services. Globe Postpaid ARPU of P1,164 was 3% lower than

last year’s P1,199. Globe Prepaid ARPU declined by 8% year-on-year resulting from the revenue

dilution from unlimited and bucket service offerings as well as the inclusion of non-paying or low-

denomination subscribers who took advantage of the Free Facebook promotion offered in the first

four months of the year. TM ARPU was down by 7% year-on-year with the continued shift from

regular pay-as-you-use service to unlimited and value offers.

Globe Postpaid subscriber acquisition cost (SAC) increased year-on-year by 16% from last year’s

P7,473 to P8,700 as of end 2014, by the changing mix of the plans, where a growing portion of the

gross additions came from plans with mid- to high monthly service fees. This was likewise boosted

by the launch of iPhone 6/6 Plus and Samsung Note 4 during the fourth quarter. Nonetheless, Globe

Postpaid SAC remained recoverable within the 24-month contract period. Globe Prepaid SAC, on

the other hand, were significantly lower than last year. Against last quarter, Globe Prepaid SAC

increased by 48% due to higher ads and promo and commissions. TM SAC, however, was down by

11

48% year-on-year while higher by 55% quarter-on-quarter due to higher subsidy and increased ads

and promo. Globe Prepaid and TM SAC remained recoverable within a month’s ARPU.

12

Fixed Line and Broadband Business

Globe’s Fixed line and Broadband segments ended 2014 with P12.7 billion, up 22% compared to 2013 as

a result of the strong growth in its customer base, which reached to nearly 2.8 million subscribers as of

end-December 2014. This remarkable revenue performance resulted from the continued aggressive

acquisitions campaigns and new competitive bundled plans launched throughout the year.

Quarter-on-quarter, revenues grew by 11% from P5.2 billion in the third quarter despite the decline in

ARPU due to the continued growth on both Tattoo-At-Home and Tattoo-On-The-Go subscriber base,

rising to 2,788,123 from 2,549,790 last quarter.

1 Includes fixed wireless and fully mobile broadband subscribers

The fixed line data segment continued its revenue growth with P5.5 billion, 17% higher year-on-year and

9% growth quarter-on-quarter due to the increased circuit count and increasing demand for data

connectivity among its corporate clients including those in the financial services, retail, offshoring and

outsourcing industries.

Total fixed line voice revenues likewise posted growth of 2% quarter-on-quarter bringing total revenues

to close the year at P2.8 billion or 7% higher than the P2.6 billion in the previous year caused primarily

by the continued popularity of bundled internet and landline plans at competitive price points.

Q4 Q3 QoQ 31 Dec 31 Dec YoY

2014 2014Change

(%)2014 2013

Change

(%)

Service Revenues

Broadband 3,649 3,183 15% 12,687 10,440 22%

Fixed Line Data 1,483 1,365 9% 5,480 4,691 17%

Fixed Line Voice 696 683 2% 2,789 2,605 7%

Fixed Line & Broadband Service

Revenues5,828 5,231 11% 20,956 17,736 18%

In Million Pesos

Quarter on Quarter Year on Year

Q4 Q3 QoQ 31 Dec 31 Dec YoY

2014 2014Change

(% )2014 2013

Change

(% )

Cumulative Broadband Subscribers

Wireless1 2,350,991 2,121,737 11% 2,350,991 1,653,647 42%

Wired 437,132 428,053 2% 437,132 378,255 16%

Total (end of period) 2,788,123 2,549,790 9% 2,788,123 2,031,902 37%

Quarter on Quarter Year on Year

13

For questions, please contact:

Tek O. Olaño Jose Mari S. Fajardo

Financial Planning and Analysis Investor Relations

Email: joolano@globe.com.ph Email: ir@globetel.com.ph

(632) 797-4307

14

ANNEXES

4Q 3Q QoQ 31 Dec 31 Dec YoY

Change Change

(%) (%)

Financing Costs

Interest Expense (694) (665) 4% (2,326) (2,092) 11%

Loss on Derivative Instruments - - - - (89) -100%

Swap Costs and Other Financing Costs (53) (59) -11% (240) (245) -2%

Foreign Exchange loss - (153) -100% - (486) -

(747) (877) -15% (2,566) (2,912) -12%

Other Income

Gain on Derivative Instruments 19 47 -60% 71 - 100%

Foreign Exchange gain 29 - 100% 1 - 100%

Interest Income 192 171 12% 683 688 -1%

Others - net 15 32 -54% 46 52 -12%

Total Other Income (Other

Expenses)(492) (627) -22% (1,765) (2,172) -19%

(Php Mn)

Globe Group

Quarter on Quarter Year on Year

2014 2014 2014 2013

4Q 3Q QoQ 31 Dec 31 Dec YoY

Change Change

(%) (%)

Total ILD Revenues (Php Mn) 2,762 2,670 3% 11,100 11,957 -7%

Average Collection rates for the Period 44.610 43.687 2% 44.610 42.188 6%

2014 2014 2014 2013

Globe Group

Quarter on Quarter Year on Year

15

1 Consolidated capital expenditures include property and equipment, intangibles and capitalized borrowing costs acquired

as of report date regardless of whether payment has been made or not.

Q4 Q3 QoQ 31 Dec 31 Dec YoY

Change Change

(%) (%)

Cost of Sales 2,835 2,105 35% 10,661 9,953 7%

Less: Non-service Revenues 1,251 587 113% 4,211 4,641 -9%

Subsidy 1,584 1,518 4% 6,450 5,312 21%

Interconnect 2,238 1,962 14% 8,430 9,280 -9%

Selling, Advertising and

Promotions1,874 1,179 59% 5,470 4,483 22%

Re-contracting 821 533 54% 2,531 2,532 -

Staff Costs 2,353 2,375 -1% 8,666 7,473 16%

Utilities, Supplies & Other

Administrative Expenses1,092 1,334 -18% 4,482 4,399 2%

Rent 1,167 1,008 16% 4,116 3,535 16%

Repairs and Maintenance 1,008 964 5% 4,100 3,657 12%

Provisions 1,325 775 71% 3,610 2,457 47%

Services and Others 3,349 2,677 25% 11,899 10,858 10%

Operating Expenses 15,227 12,807 19% 53,304 48,674 10%

Depreciation and

Amortization4,964 4,649 7% 18,123 27,478 -34%

Affected by modernization 154 291 -47% 1,623 9,066 -82%

Others 4,810 4,358 10% 16,500 18,412 -10%

Costs and Expenses 21,775 18,974 15% 77,877 81,464 -4%

In Million Pesos

Globe Group

Quarter on Quarter Year on Year

2014 2014 2014 2013

31 Dec 31 DecYoY

Change

2014 2013 (%)

Capital Expenditures (Cash) 21,120 28,999 -27%

Increase (Decrease) in Liabilities related to Acquisition

of PPE & Capitalized Asset Retirement Obligations5,864 6,781 -14%

Total Capital Expenditures1 26,984 35,780 -25%

Total Capital Expenditures / Service

Revenues (%)27% 40%

(Php Mn)

Globe Group

16

31 Dec 31 DecYoY

Change

2014 2013 (%)

Balance Sheet Data (Php Mn)

Total Assets 179,507 159,079 13%

Total Debt 65,276 69,301 -6%

Total Stockholders' Equity 54,538 41,639 31%

Financial Ratios (x)

Total Debt to EBITDA 1.66 1.90

Debt Service Coverage 2.92 2.83

Interest Cover (Gross) 13.22 12.54

Debt to Equity (Gross) 1.20 1.66

Debt to Equity (Net)1 0.89 1.49

Total Debt to Total Capitalization (Book) 0.54 0.62

Total Debt to Total Capitalization (Market) 0.21 0.24

Globe Group