MODEC, Inc Financial Results Analysts Presentation. February 9, 2017

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1 MODEC, Inc. 216 Financial Results Analysts Presentation February 9, 217

2 MODEC, Inc. 216 Financial Results Highlights Market Review & Outlook Financial Results 2

period 1 years (1 one-year options) Field TEN (Tweneboa, Enyenra, Ntomme) Field, Ghana

August 216 Client Petrobras Charter period 2 years Field Lapa field, Brazil Water depth

3 FY216 : Delivered Units FPSO Prof. John Evans Atta Mills (MV25) FPSO Cidade de Caraguatatuba MV27 Client Tullow Oil Charter period 1 years (1 one-year options) Field TEN (Tweneboa, Enyenra, Ntomme) Field, Ghana Water depth 1,5m Production 8, bpd, 18 mmscfd Storage 1,7, bbls Production started in August 216 Client Petrobras Charter period 2 years Field Lapa field, Brazil Water depth 2,126m Production 1, bpd, 177 mmscfd Storage 1,6, bbls Charter started in December 216 MODEC s 9 th FPSO for Petrobras & 5 th FPSO for pre-salt 3

4 FY216 : Highlights Revenue Gross Profit Operating Profit Gross profit and operating profit hit a record high EPC profits have improved; O&M challenges to be closed out 4

5 FY216 : Highlights Ordinary Profit Other Income Leased Units Billion JPY Equity in earnings of affiliates Billion Balance between interest JPY income and interest expense As of February 217 Charter period (fixed) Charter period (option) MV1 MV MV14 MV12 29 MV15 21 MV18 MV17 MV MV22 MV MV MV MV MV29 MV27 MV MV27 for Petrobras was added to the leased units in 216 Increased number of leased units raised other income (equity in earnings of affiliates, interest income) 5

6 FY216 : Highlights Profit Attributable to Owners of Parent ROE Dividends per Share 25 % 2. Equity Yen Targets of the Mid-term Business Plan 217 (Profit attributable to owners of parent & ROE 1%) were achieved one year ahead of schedule; recovered from the impact from the capital increase in 214 Proposed annual dividends of 37.5 yen per share; dividends for FY217 to increase (13 consecutive years) 6

7 MODEC, Inc. 216 Financial Results Highlights Market Review & Outlook Financial Results We estimate that, if new project approvals remain low for a third year in a row in 217, then it becomes increasingly unlikely that demand and supply can be matched in the early 22s without the start of a new boom/bust cycle for the industry. - World Energy Outlook 216-7

8 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217 Q Market Review Oil Supply & Consumption Oil Demand & Price Million bpd Million bpd Million bpd Supply/consumption to balance after Q1 217 Supply (left axis) Forecast Oil demand Implied stock change (right axis) Consumption (left axis) IEA judges around USD 8/bbl in 22 is necessary to ensure a matching of supply and demand 2 USD /bbl Oil price Source: EIA Source: World Energy Outlook 216 (IEA) 8

9 (F) (F) 218(F) 219(F) Market Review Oil Price (WTI) Global Upstream Oil and Gas Investment Billion USD 8 USD /bbl 16 FPSO Awards (Historical + Forecast) No of FPSO awards 3 Lease Lease (forecast) Speculative Turnkey Turnkey (forecast) Petrobras serial FPSOs Oil price (right axis) Global Upstream Oil and Gas Investment (left axis) 2 5 Source: World Energy Outlook 215 & 216 (IEA), EIA Source: Fearnley Offshore *Number of FPSO awards in 21 was adjusted by MODEC. 9

Offshore Oil Production in Brazil Oil Production in Brazil Oil Production from Pre-salt non-petrobras

27Mbpd FPSOs (December 216) 4% 2. 3% Santos Basin Campos Basin 1.

10 Offshore Oil Production in Brazil Oil Production in Brazil Oil Production from Pre-salt non-petrobras Petrobras Onshore Petrobras Other offshore Million bpd 3. Petrobras Pre-salt Pre-salt % 45% MODEC 1.27Mbpd FPSOs (December 216) 4% 2. 3% Santos Basin Campos Basin 1. 15% Rio de Janeiro Pre-salt Santos Basin Campos Basin MV27 216~ MV29 217~ MV29 MV26 215~ MV18 29~ MV24 214~ MV15 27~ MV23 213~ MV14 27~. % Source: Petrobras MV22 21~ MV2 21~ Pre-salt Fluminense (O&M) 23~ Source: BP Statistical Review of World Energy 216, Petrobras website * Non-Petrobras oil production in 216 is MODEC s assumption for reference purposes only. 1

11 Main Prospective Projects (as of February 217) Europe North America & Gulf of Mexico Africa Asia & Pacific Latin America Ghana FPSO (Charter) Indonesia FPSO (Charter) India FPSO (Charter) Brazil FPSO (Charter) FPSO (Charter) 11

FY217 : Outlook Revenue Operating Profit Ordinary Profit Profit Attributable to Owners of Parent 4 378.5 2 18. 4 25 21. 295.5 15 15. 3 29.4 2 18.

12 FY217 : Outlook Revenue Operating Profit Ordinary Profit Profit Attributable to Owners of Parent MV29 to start charter in 217 2H FPSO Cidade de Campos dos Goytacazes MV29 12

13 MODEC, Inc. 216 Financial Results Highlights Market Review & Outlook Financial Results 13

14 Profit & Loss Variance Million JPY Revenue 295, ,987 (65,69) Gross Profit 2,78 31,544 11,466 Selling, General and Administrative Expenses 15,3 13,526 (1,477) Operating Profit 5,75 18,18 12,943 Other Income (A) 14,717 14, Gross profit increased by 11.4 billion yen year-on-year due to EPC profit improvements and additional revenue from early delivery of an FPSO Operating profit increased by 12.9 billion yen year-on-year due to increased gross profit and reduction in SG&A Other Expenses (B) 6,972 3,346 (3,626) Total Other Income/Expenses (C=A-B) 7,745 11,39 3,645 (Equity in Earnings of Affiliates and Unconsolidated Subsidiaries included in C) (Exchange gain/loss and Gain/loss on revaluation of derivatives included in C) 8,345 9,618 1,273 (3,228) (1,41) 1,818 Ordinary Profit 12,819 29,49 16,59 Number of leased units increased Loss on foreign currency revaluation was recorded due to yen appreciation Extraordinary Profit 3, Extraordinary Loss 1,75 1,632 (73) Income before Income Taxes and Noncontrolling Interests 14,829 27,776 12,947 Profit Attributable to Owners of Parent 5,824 21,12 15,188 Exchange Rate (USD) ( 4.4) 14

15 Equity in Earnings of Affiliates Operating Profit (as if consolidating affiliates basis) Equity in Earnings of Affiliates A A + B A + B + C A : Consolidated Operating Profit B : Operating Profit (equity method portion) C : Influence of Deferred/Realized Profits Million USD 1 MV27 MV MV MV

16 Ordinary Profit Influence of Deferred/Realized Profits Ordinary Profit (as if consolidating affiliates basis) Deferred Realized Balance A A + B + C A : Consolidated Ordinary Profit B : Ordinary Profit (equity method portion) C : Influence of Deferred/Realized Profits (5) (1)

17 New Orders / Revenue / Order Backlogs New Orders Revenue Order Backlogs 1, EPC(I) period Culzean MV29 MV Order backlogs for MODEC Group s share in the Lease, Charter and O&M services of the affiliates accounted for by the equity method MV26 MV MV24 OSX-3 MV23 PSVM

18 Balance Sheet Variance Million JPY Accounts Receivable - trade 145,752 95,544 (5,28) Short-term Loans Receivable 2,239 55,12 34,773 Total Current Assets 242,12 218,42 (24,78) Property and Equipment 18,485 14,161 (4,324) Intangible Assets 7,476 7,42 (56) Investments and Other Assets 86,381 93,624 7,243 Total Fixed Assets 112, ,26 2,863 Total Assets 354, ,249 (21,215) Accounts receivable decreased due to timing difference between EPC(I) progress and receiving of payment Variance Accounts Payable - trade 145,23 96,738 (48,492) Short-term Loans Payable 6,44 7,812 1,768 Total Current Liabilities 177, ,536 (34,715) Long-term Loans Payable 5,219 42,478 (7,741) Total Long-term Liabilities 62,229 56,12 (6,127) Total Liabilities 239, ,639 (4,842) Total Shareholders Equity 99, ,2 18,968 Total Accumulated Other Comprehensive Income 2,322 4,849 2,527 Accounts payable decreased in line with EPC(I) progress Long-term loans payable decreased due to repayment of loans Minority Interests in Consolidated Subsidiaries 13,428 11,56 (1,868) Total Net Assets 114, ,69 19,626 Total Liabilities, Net Assets 354, ,249 (21,215) 18

19 Key Financial Indicators EBITDA Interest-Bearing Debt EBITDA (after adjustment*) Total interest-bearing debt (after adjustment*) 6 4 EBITDA Interest Coverage Ratio X times Total interest-bearing debt/ebitda X times *Adjustment: Adding MODEC group s share in affiliates accounted for by the equity method ROE ROA Equity Ratio. % % % Equity

20 EPC(I) / Charter / O&M Period As of February 217 EPC(I) period Time Charter fixed period Time Charter option period O&M period Culzean FSO (EPC 契約 ) Maersk 2 Stampede TLP (ECM 契約 ) Hess FPSO Cidade de Campos dos Goytacazes MV29 FPSO Cidade de Caraguatatuba MV27 Petrobras Petrobras FPSO Prof. John Evans Atta Mills Tullow 2y 1y 2y FPSO Cidade de Itaguai MV26 Petrobras 2y FPSO Cidade de Mangaratiba MV24 Petrobras 2y FPSO Cidade de Sao Paulo MV23 Petrobras FPSO Cidade de Angra dos Reis MV22 Petrobras 8 5. FPSO Cidade de Santos MV2 Petrobras 15y 12y 2y FPSO Cidade de Niteroi MV18 Petrobras FSO Rang Dong MV17 JVPC FPSO Song Doc Pride MV19 PEPC 9y 9y 6.5y FSO Cidade de Macae MV15 Petrobras FPSO Cidade do Rio de Janeiro MV14 Petrobras FSO Rong Doi MV12 KNOC 8y 7y 2y FPSO Baobab Ivoirien MV1 CNR FPSO MODEC Venture 11 Santos 1y 5y (17) 4. FPSO Stybarrow Venture MV16 available 7y+ 1 n/a FPSO Raroa OMV 15y 2 n/a FPSO Kwame Nkrumah MV21 Tullow 1y 3 n/a FPSO Pyrenees Venture BHPB 15y 4 n/a FPSO Fluminense Shell 17.5y Owned by MODEC group companies (%) Affiliates accounted for by the equity method Consolidated subsidiary 2

MODEC, Inc Financial Results Analysts Presentation. February 7, 2018

MODEC, Inc Financial Results Analysts Presentation. February 7, 2018 MODEC, Inc. 217 Financial Results Analysts Presentation February 7, 218 Highlight Financial Results Mid-term Business Plan 22 2 FY217 : New Awards Awarded 2 large FPSO(EPCI + Charter) The 13 th and 14