Website Final Press Conference

PRESS CONFERENCE

9 June 2014Makati Shangri-La Hotel

Agenda

• NOW Telecom’s All Text Network• NOW Telecom’s Broadband Business• NOW Corporation’s Financial Report• NOW Corporation’s Management

Report on Business Units

FINANCIAL HIGHLIGHTS(AT THE END OF 5-YEARS)

ALL TEXT NETWORK

BROADBANDBUSINESS

NOW CORPORATION

REVENUEPHP1.6B

EBITDAPHP1.1B

REVENUEPHP8.36B

EBITDAPHP3.45B

NET INCOME

AFTER TAXPHP211M

ALL Text Mobile Network

June 2014


We are activating a

GSM Network configured solely to provide

text messaging


200million text

messages/day


(P 7.00/day)

(P6.66/day)

(P 5.00/day)

(Less than P 3.00/day)


We expect to capture

2.9m Txt Subscription

on the 5TH Year of Operation


With expected Revenue of

P1.6B and EBITDA of

P1.1B on the 5TH Year of

Operation


We will be activating the ALL TEXT GSM Network

at a CAPEX of:

$28.m

Broadband AccessJune 2014

We will bring to the HOME Broadband Internet

Access at twice the speed but at same price users

are currently paying

Broadband Access

Broadband Access

We expect to capture

85,000 broadbandSubscription

on the 5TH Year of Operation

Broadband Access

With expected Revenue of

P8.36B and EBITDA of

P3.45B on the 5TH Year of

Operation

Broadband Access

We are building this BROADBAND ACCESS

Network at a CAPEX of:

$20m

Broadband Access

Financial presentation audited

December 31, 2013 and 2012

NOW CORPORATIONCOMPARATIVE CONSOLIDATED INCOME STATEMENTFor the year Ending December 31, 2013 and 2012

Audited Audited Increase/(Decrease)2013 2012 Amount %

REVENUESService Revenuesa.) Software Licenses 24,321,700 20,048,270 4,273,429 21%b.) IT Resource Management 34,858,020 19,032,850 15,825,170 83%c.) IT Products and services 14,626,494 4,768,635 9,857,860 207%Management Fee 5,040,000 5,040,000 - 0%Interest 471,820 1,124,934 (653,114) -58%

Total Revenues 79,318,034 50,014,689 29,303,345 59%

DIRECT COSTCost of Software licenses 24,171,863 14,944,341 9,227,522 62%Cost of IT Resource Management 26,547,845 14,220,595 12,327,250 87%Cost of IT Products and Services 20,133,485 8,123,819 12,009,666 148%

Total Cost of Services 70,853,193 37,288,755 33,564,438 90%

Gross MarginSoftware licenses 149,837 5,103,929 (4,954,093) -97%IT Resource Management 8,310,175 4,812,255 3,497,920 73%IT Products & Services (5,506,991) (3,355,184) (2,151,806) 64%Management fees 5,040,000 5,040,000 - 0%Interest / others 471,820 1,124,934 (653,114) -58%

Total Gross Margin 8,464,841 12,725,934 (4,261,093) -33%Gross Margin % 11% 25%


Audited Audited Increase/(Decrease)2013 2012 Amount %

General and Admin ExpensesOutside Services 25,517,320 56,202,154 (30,684,834) -55%Salaries and other employees benefits 796,159 916,544 (120,385) -13%Advertising and promotion 1,228,900 4,614,624 (3,385,724) -73%Rental 3,444,057 3,690,910 (246,853) -7%Taxes and licenses 727,802 460,506 267,296 58%Professional fees 3,912,100 5,321,818 (1,409,718) -26%Transportation and travel 1,448,133 6,386,036 (4,937,903) -77%Light and water 4,055,322 3,758,867 296,455 8%Repairs and maintenance 171,508 349,653 (178,145) -51%Communications 5,265,685 7,400,707 (2,135,022) -29%Representation expense 1,469,591 3,101,913 (1,632,322) -53%Offi ce supplies 347,884 891,168 (543,284) -61%Dues and subscription 533,430 1,084,446 (551,016) -51%Training and development 22,625 705,731 (683,106) -97%Directors' fee 39,000 37,725 1,275 3%Fuel and oil 213,226 (213,226) -100%Insurance 609,567 407,283 202,284 50%Commission 607,101 (607,101) -100%Equity in net losses of associates 3,076,725 (3,076,725) -100%Impairment loss 3,821,332 (3,821,332) -100%Provision for doubtful account 888,958 1,094,698 (205,740) -19%Others 456,439 520,777 (64,338) -12%TOTAL EXPENSE 50,934,480 104,663,944 (53,729,464) -51%Net Income from Operations (EBITDA) (42,941,459) (93,062,944) 50,121,485 -54%Less: Depreciation 6,147,237 6,952,885 (805,648) (0.12) Net Income before Interest (EBIT) (49,088,696) (100,015,829) 50,927,133 -51%Add:(Deduct)

Interest Expense (38,369,677) (38,785,247) 415,570 -1%Forex Gains (Losses) (218,203) (230,396) 12,193 -5%Other Income 471,820 1,124,934 (653,114) -58%

Net Income before Tax (87,204,756) (137,906,538) 50,701,782 -37%Less: Provision for Income Tax 28,816 202,565 (173,749) -86%

Provision for Final Tax 479 937 (458) -49%NET INCOME AFTER TAX (87,234,051) (138,110,040) 50,875,989 -37%

NOW CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS

Projected Audited Increase/(Decrease)2013 2012 Amount %

ASSETSCurrent Assets

Cash 9,655,786 1,467,152 8,188,634 558%Trade and Other receivable 44,994,632 33,444,719 11,549,913 35%Amounts owed by related parties 54,811,963 52,137,222 2,674,741 5%Other current assets 5,599,515 5,749,482 (149,967) -3%

Total Current Assets 115,061,896 92,798,575 22,263,321 24%

Noncurrent AssetsInvestment in shares of stocks 1,294,278,350 1,294,278,350 - 0%Property and equipments 11,156,581 16,552,657 (5,396,076) -33%Other non-current assets 24,367,873 24,485,434 (117,561) 0%

Total Noncurrent Assets 1,329,802,804 1,335,316,441 (5,513,637) 0%Total ASSETS 1,444,864,700 1,428,115,016 16,749,684 1%

LIABILITIES AND EQUITYCurrent Liabilities

Loans payable (Note 13) - 40,500,000 (40,500,000) -100%Current portion of obligations under finance lease (Note 12)3,008,471 3,076,625 (68,154) -2%Accounts payable and accrued expenses (Note 10)126,779,997 102,336,932 24,443,065 24%Amount owed to related parties (Note 11)4,841,895 2,948,339 1,893,556 64%

Total Current Liabilities 134,630,363 148,861,896 (14,231,533) -10%

Non-current LiabilitiesLoans payable (Note 13) 44,500,000 44,500,000 100%Obligations under finance lease - net of current portion (Note 12)675,433 3,683,905 (3,008,472) -82%Amount owed to related parties (Note 11)349,023,354 272,746,632 76,276,722 28%

Total Non-current Liabilities 394,198,787 276,430,537 117,768,250 43%TOTAL LIABILITIES 528,829,150 425,292,433 103,536,717 24%

EquityCommon stock - P1 par value Authorized - 1,320,000,000 shares Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 - 0%

Retained earnings (401,242,800) (314,455,767) (86,787,033) 28%Total Equity 916,035,550 1,002,822,583 (86,787,033) -9%TOTAL LIABILITIES AND EQUITY 1,444,864,700 1,428,115,016 16,749,684 1%

2014 financial performance(actual Jan-

May+June-Dec projections)


Actual Projected Audited Increase/(Decrease)Jan-May. 2014 2014 2013 Amount %

REVENUESService Revenuesa.) Software Licenses 8,209,066 24,395,593 24,321,700 73,893 0%b.) IT Resource Management 16,102,294 59,202,294 34,858,020 24,344,274 70%c.) IT Products and services 3,696,839 26,686,126 14,626,494 12,059,632 82%

- Website Development 7,500,000 7,500,000

- Website Express.Biz 189,292 1,813,342 221,696 1,591,645 718%

- Software Collaboration 3,507,547 14,510,285 14,404,798 105,487 1%

- Cloud/on premise services - 2,862,500 - 2,862,500 100%Management Fee 2,100,000 5,040,000 5,040,000 - 0%Interest 2,305 730,822 471,820 259,002 55%

Total Revenues 30,110,503 116,054,835 79,318,034 36,736,801 46%

DIRECT COSTCost of Software licenses 7,332,469 23,185,752 24,171,863 (986,111) -4%Cost of IT Resource Management 11,883,137 41,500,137 26,547,845 14,952,292 56%Cost of IT Products and Services 5,704,999 12,512,538 20,133,485 (7,620,947) -38%

Total Cost of Services 24,920,605 77,198,427 70,853,193 6,345,234 9%

Gross MarginSoftware licenses 876,596 1,209,841 149,837 1,060,004 707%IT Resource Management 4,219,157 17,702,157 8,310,175 9,391,982 113%IT Products & Services (2,008,160) 14,173,589 (5,506,991) 19,680,579 -357%Management fees 2,100,000 5,040,000 5,040,000 - 0%Interest / others 2,305 730,822 471,820 259,002 55%

Total Gross Margin 5,189,899 38,856,409 8,464,841 30,391,568 359%Gross Margin % 17% 33% 11%


General and Admin ExpensesOutside Services 7,343,732 12,467,650 25,517,320 (13,049,670) -51%Salaries and other employees benefits 279,830 1,391,595 796,159 595,436 75%Advertising and promotion 1,468,240 1,468,240 1,228,900 239,340 19%Interest expense 472,122 1,014,901 38,369,677 (37,354,776) -97%Rental 1,654,873 3,572,222 3,444,057 128,165 4%Taxes and licenses 386,166 804,732 727,802 76,930 11%Professional fees 740,472 1,020,472 3,912,100 (2,891,628) -74%Transportation and travel 796,738 860,622 1,448,133 (587,511) -41%Light and water 1,103,087 2,601,748 4,055,322 (1,453,574) -36%Depreciation and amortizations 2,114,795 5,058,204 6,147,237 (1,089,033) -18%Repairs and maintenance 162,055 162,055 171,508 (9,453) -6%Communications 2,316,510 2,576,886 5,265,685 (2,688,799) -51%Representation expense 1,148,355 1,204,355 1,469,591 (265,236) -18%Offi ce supplies 308,825 781,577 347,884 433,693 125%Dues and subscription 291,969 325,334 533,430 (208,096) -39%Training and development - - 22,625 (22,625) -100%Directors' fee 15,000 60,000 39,000 21,000 54%Fuel and oil 29,037 39,537 - 39,537 Insurance 107,075 488,579 609,567 (120,988) -20%Commission 30,858 30,858 - 30,858 Provision for doubtful account - - 888,958 (888,958) -100%Foreign exchange loss (8,021) (8,021) 218,203 (226,224) -104%Others 191,942 191,942 456,439 (264,497) -58%

TOTAL OPEX 20,953,661 36,113,488 95,669,597 (59,556,109) -62%INCOME (LOSS) BEFORE INCOME TAX (15,763,763) 2,742,921 (87,204,756) 89,947,677 -103%PROVISION FOR INCOME TAXCurrent: Income 103,798 777,128 28,816 748,312 2597% Final - - 479 (479) -100%

103,798 777,128 29,295 747,833 2553%NET INCOME (LOSS) (15,867,561) 1,965,793 (87,234,051) 89,199,843 -102%

NOW CORPORATIONBALANCE SHEETSAS OF DECEMBER 31, 2014 AND 2013


ASSETSCurrent Assets

Cash 69,360,793 75,659,692 9,655,786 66,003,906 684%Trade and Other receivable 53,622,116 54,042,116 44,994,632 9,047,484 20%Amounts owed by related parties 63,895,273 63,895,273 54,811,963 9,083,310 17%Other current assets 6,201,756 6,201,756 5,599,515 602,241 11%

Total Current Assets 193,079,938 199,798,837 115,061,896 84,736,941 74%

Noncurrent AssetsInvestment in shares of stocks 1,294,278,350 1,294,278,350 1,294,278,350 - 0%Property and equipments 6,587,101 6,166,614 11,156,581 (4,989,967) -45%Other non-current assets 24,299,635 24,299,635 24,367,873 (68,238) 0%

Total Noncurrent Assets 1,325,165,086 1,324,744,599 1,329,802,804 (5,058,205) 0%Total ASSETS 1,518,245,024 1,524,543,436 1,444,864,700 79,678,736 6%


Current portion of obligations under finance lease (Note 12)2,763,290 2,763,290 3,008,471 (245,181) -8%Accounts payable and accrued expenses (Note 10)164,642,011 165,616,634 126,779,997 38,836,637 31%Amount owed to related parties (Note 11)4,860,253 4,860,253 4,841,895 18,358 0%

Total Current Liabilities 172,265,554 173,240,177 134,630,363 38,609,814 29%

Non-current LiabilitiesLoans payable (Note 13) 44,500,000 44,500,000 44,500,000 - 100%Obligations under finance lease - net of current portion (Note 12)- - 675,433 (675,433) -100%Amount owed to related parties (Note 11)344,493,942 344,493,942 349,023,354 (4,529,412) -1%

Total Non-current Liabilities 388,993,942 388,993,942 394,198,787 (5,204,845) -1%TOTAL LIABILITIES 561,259,496 562,234,119 528,829,150 33,404,969 6%

EquityCommon stock - P1 par value Authorized - 1,320,000,000 shares Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 1,317,278,350 - 0%

Retained earnings (360,292,823) (354,969,033) (401,242,800) 46,273,767 -12%Total Equity 956,985,527 962,309,317 916,035,550 46,273,767 5%TOTAL LIABILITIES AND EQUITY 1,518,245,024 1,524,543,436 1,444,864,700 79,678,736 6%

5-yrs financial projections2014-2018

* Telecom Business not yet included in the financial projections

NOW CORPORATION AND ITS SUBSIDIARIESCONSOLIDATED INCOME STATEMENT5-YR PROJECTIONS

2014 2015 2016 2017 2018 TOTALREVENUESService Revenuesa.) Software Licenses 24,395,593 27,087,661 29,915,086 35,898,103 39,487,913 156,784,356 b.) IT Resource Management 59,202,294 68,082,638 81,699,166 102,123,958 132,761,145 443,869,201 c.) IT Products and services 26,686,126 65,013,208 112,988,581 181,458,526 274,584,829 660,731,270

- Software Collaboration 14,510,285 16,596,516 21,186,445 32,627,126 50,245,773 135,166,145 - Website Express 1,813,342 16,416,692 48,802,136 96,831,400 158,839,056 322,702,626 - Website Develoment 7,500,000 20,000,000 25,000,000 25,000,000 25,000,000 102,500,000 - IT outsourcing - - Cloud/on premise services 2,862,500 12,000,000 18,000,000 27,000,000 40,500,000 100,362,500

Management Fee 5,040,000 5,040,000 5,040,000 5,040,000 5,040,000 25,200,000 Interest 730,822 3,558,847 5,004,348 7,372,138 12,005,125 28,671,280

Total Revenues 116,054,835 168,782,354 234,647,181 331,892,725 463,879,013 1,315,256,108

DIRECT COSTCost of Software licenses 23,185,752 25,901,077 28,491,184 31,055,391 32,918,714 141,552,119 Cost of IT Resource Management 41,500,137 41,500,137 41,500,137 41,500,137 41,500,137 207,500,686 Cost of IT Products and Services 12,512,538 11,915,270 12,599,240 13,115,220 13,631,200 63,773,468

Total Cost of Services 77,198,427 79,316,484 82,590,562 85,670,748 88,050,052 412,826,273

GROSS MARGINSoftware licenses 1,209,841 1,186,585 1,423,902 4,842,712 6,569,199 15,232,238 IT Resource Management 17,702,157 26,582,501 40,199,029 60,623,821 91,261,008 236,368,516 IT Products & Services 14,173,589 53,097,938 100,389,341 168,343,305 260,953,629 596,957,802 Management fees 5,040,000 5,040,000 5,040,000 5,040,000 5,040,000 25,200,000 Interest 730,822 3,558,847 5,004,348 7,372,138 12,005,125 28,671,280

Total Gross Margin 38,856,409 89,465,870 152,056,620 246,221,977 375,828,961 902,429,836 Gross Margin % 33% 53% 65% 74% 81% 69%


2014 2015 2016 2017 2018 TOTALGENERAL AND ADMINISTRATIVE EXPENSESOutside Services 12,467,650 19,146,947 20,584,596 22,756,519 25,849,917 100,805,629 Salaries and other employees benefits 1,391,595 595,626 651,433 712,810 780,346 4,131,809 Advertising and promotion 1,468,240 10,000,000 12,500,000 15,625,000 19,531,250 59,124,490 Interest expense 1,014,901 1,014,901 1,014,901 1,014,901 1,014,901 5,074,503 Rental 3,572,222 1,892,025 2,070,154 2,322,350 2,670,557 12,527,307 Taxes and licenses 804,732 674,336 727,090 806,066 918,108 3,930,332 Professional fees 1,020,472 1,019,036 1,084,498 1,186,898 1,334,792 5,645,695 Transportation and travel 860,622 983,427 1,051,293 1,155,701 1,305,499 5,356,542 Light and water 2,601,748 2,757,853 3,006,059 3,366,786 3,871,804 15,604,251 Depreciation and amortizations 5,058,204 5,173,521 5,494,864 6,001,525 6,735,517 28,463,631 Repairs and maintenance 162,055 522,887 573,884 647,316 749,826 2,655,969 Communications 2,576,886 2,707,149 2,886,927 3,165,851 3,567,361 14,904,174 Representation expense 1,204,355 1,260,981 1,342,894 1,470,671 1,655,006 6,933,908 Offi ce supplies 781,577 620,961 663,216 728,403 822,025 3,616,182 Dues and subscription 325,334 454,289 485,109 532,616 600,800 2,398,149 Training and development - 175,842 195,185 222,511 260,338 853,876 Directors' fee 60,000 61,800 65,508 71,404 79,972 338,684 Fuel and oil 39,537 130,011 141,523 158,358 182,011 651,441 Insurance 488,579 517,894 564,505 632,245 727,082 2,930,305 Commission 30,858 240,647 264,198 300,134 352,345 1,188,183 Provision for doubtful account - 174,286 291,195 587,320 1,223,101 2,275,901 Foreign exchange loss (8,021) - - - - (8,021) Others 191,942 56,125 59,775 65,459 73,652 446,954

TOTAL OPEX 36,113,488 50,180,546 55,718,805 63,530,842 74,306,209 279,849,891 INCOME (LOSS) BEFORE INCOME TAX 2,742,921 39,285,324 96,337,815 182,691,134 301,522,752 622,579,945 PROVISION FOR INCOME TAXCurrent: Income 777,128 11,785,597 28,901,344 54,807,340 90,456,825 186,728,235 Final - - - - -

777,128 11,785,597 28,901,344 54,807,340 90,456,825 186,728,235 NET INCOME (LOSS) 1,965,793 27,499,727 67,436,470 127,883,794 211,065,926 435,851,709


NOW CORPORATION AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETS5-YR PROJECTIONS

2014 2015 2016 2017 2018ASSETSCurrent Assets

Cash 75,659,692 129,433,161 203,552,676 296,665,352 541,822,942 Trade and Other receivable 54,042,116 59,082,116 64,122,116 69,162,116 74,202,116 Amounts owed by related parties 63,895,273 63,895,273 63,895,273 63,895,273 63,895,273 Other current assets 6,201,756 6,201,756 6,201,756 6,201,756 6,201,756

Total Current Assets 199,798,837 258,612,306 337,771,821 435,924,497 686,122,087

Noncurrent AssetsInvestment in shares of stocks 1,294,278,350 1,294,278,350 1,294,278,350 1,294,278,350 1,294,278,350 Property and equipments 6,166,614 1,140,770 (3,925,074) (4,016,120) (4,016,120) Other non-current assets 24,299,635 24,299,635 24,299,635 24,299,635 24,299,635

Total Noncurrent Assets 1,324,744,599 1,319,718,755 1,314,652,911 1,314,561,865 1,314,561,865 Total ASSETS 1,524,543,436 1,578,331,061 1,652,424,732 1,750,486,362 2,000,683,953


Current portion of obligations under finance lease (Note 12)2,763,290 2,763,290 - - - Accounts payable and accrued expenses (Note 10)165,616,634 211,670,362 182,983,051 109,397,047 57,066,426 Amount owed to related parties (Note 11) 4,860,253 4,860,253 4,860,253 4,860,253 4,860,253

Total Current Liabilities 173,240,177 219,293,905 187,843,304 114,257,300 61,926,679

Non-current LiabilitiesLoans payable (Note 13) 44,500,000 Obligations under finance lease - net of current portion (Note 12)- - - - - Amount owed to related parties (Note 11)344,493,942 344,733,942 344,733,942 344,733,942 344,733,942

Total Non-current Liabilities 388,993,942 344,733,942 344,733,942 344,733,942 344,733,942 TOTAL LIABILITIES 562,234,119 564,027,847 532,577,246 458,991,242 406,660,621

EquityCommon stock - P1 par value Authorized - 1,320,000,000 shares Issued - 1,317,278,350.00 shares 1,317,278,350 1,317,278,350 1,317,278,350 1,317,278,350 1,317,278,350

Retained earnings (354,969,033) (302,975,136) (197,430,864) (25,783,230) 276,744,982 Total Equity 962,309,317 1,014,303,214 1,119,847,486 1,291,495,120 1,594,023,332 TOTAL LIABILITIES AND EQUITY 1,524,543,436 1,578,331,061 1,652,424,732 1,750,486,362 2,000,683,953


MANAGEMENTREPORT

(BUSINESS GROUPS)

Software Collaboration Group

TRAININGTRAINING

Software Collaboration Group

LICENSESLICENSESHUMAN

RESOURCE MANAGEMENT

HUMAN RESOURCE

MANAGEMENT

Software Collaboration Group Clients

INSURANCERETAILBANKS

ITMANUFACTURING

PHARAMACEUTICAL

INSURANCERETAILBANKS

ITMANUFACTURING

PHARAMACEUTICAL

3M PHILIPPINESABS-CBN

ALLIED BANKBANGKO SENTRAL NG PILIPINAS

BANK OF COMMERCEBDO

CHINA BANKCOCA-COLA

DBPEASTWOOD

FIRST GEN CORP.FEDERAL PHOENIX

GOLDEN ARCHES (MCDONALDS)MIAA

PHIL CHRISTIAN UNIVRCBC

SHANGRILA SUNLIFE

TAO CORPORATIONUNIONBANK

UNITED LABORATORIES

3M PHILIPPINESABS-CBN

ALLIED BANKBANGKO SENTRAL NG PILIPINAS

BANK OF COMMERCEBDO

CHINA BANKCOCA-COLA

DBPEASTWOOD

FIRST GEN CORP.FEDERAL PHOENIX

GOLDEN ARCHES (MCDONALDS)MIAA

PHIL CHRISTIAN UNIVRCBC

SHANGRILA SUNLIFE

TAO CORPORATIONUNIONBANK

UNITED LABORATORIES

IT Human Resource Management System

Is an Information Technology Resource Management (ITRM) company, with expertise in the deployment of IT Knowledge Professionals for local and global companies.

Our Clients

DIGITAL MEDIA

Sample Websites Completed


GIST Website of Philstar (focused on lifestyle &

entertainment)

Sample Mobile App Completed

Sample Channel Engagement

WEBSITEEXPRESS

Q1 & Q2 HIGHLIGHTS

MARCH

Website Launch

Rollout of New Products & Subscription Plans

Rollout of CRM and Electronic Invoicing

APRIL

Opening of 2nd Store at Trinoma

Website Mo, Sagot Ko Promo

MAY

Increase in conversion from 1.6% to 4.7%

#1 Ranking on Google Search

PRESS CONFERENCE

9 June 2014Makati Shangri-La Hotel

Website Final Press Conference

Technology

Transcript of Website Final Press Conference