Modec, Inc. · TSE:6269

Modec — H1 2006 Earnings Presentation

29 slides from Modec's earnings presentation, Aug 18, 2006

1. Slide 1: Half-Year Results 2006 Analysts Presentation

   MODEC HALF-YEAR RESULTS 2006 ANALYSTS PRESENTATION AUGUST 18, 2006 P. 1

2. Slide 2: Contents

   CONTENTS I. HALF-YEAR 2006 HIGHLIGHT . . . . . . . . . . . . P. 3 II. MARKET & PROJECTS REVIEW . . . . . . . . . . . P. 9 III. PROFIT & LOSS . . . . . . . . . . . . . . . . . . . P. 17 IV. BALANCE SHEET & CASH FLOW . . . . . . . . . . P. 22 V. FINANCIAL INDICATOR . . . . . . . . . . . . . . . P. 26

3. Slide 3: I. Half-Year 2006 Highlight

   I. HALF-YEAR 2006 HIGHLIGHT 1. NEWLY AWARDED PROJECTS 2. DELIVERED UNITS 3. PROGRESS OF EPCI WORKS 4. ACQUISITION of SHARES of NATCO JAPAN 5. OTHER TOPICS P. 3

4. Slide 4: Half-Year 2006 Highlight: Newly Awarded Projects

   HALF-YEAR 2006 HIGHLIGHT 1. NEWLY AWARDED PROJECTS JVPC Rang Dong FSO (Vietnam) BHPB Shenzi TLP (GOM) Client: JVPC Client: BHPB EPCI + Time Charter (New Built) EPC + pre-commissioning Charter Period: 9 years + option (1x5 years) Installation: planned 2008 Sumer First Oil: planned 2008 3Q First Oil:

5. Slide 5: Half-Year 2006 Highlight: Delivered Units

   HALF-YEAR 2006 HIGHLIGHT 2. DELIVERED UNITS Samsung Amerada Hess Oveng TLP & Okume/Ebano TLP (Eq. Guinea) Client: Amerada Hess EPC Installed: 2006 April First Oil: planned 2006 December Production: 25,000 bopd; 30 mmscfd each Oveng TLP Okume/Ebano TLP P. 5

6. Slide 6: Half-Year 2006 Highlight: Progress of EPCI Works

   HALF-YEAR 2006 HIGHLIGHT 3. PROGRESS OF EPCI WORKS KNOC Rong Doi FSO (Vietnam) JVPC Rang Dong FSO (Vietnam) EPCI + Time Charter (New Built) EPCI + Time Charter (New Built) First Oil: planned 2006 3Q First Oil: planned 2008 3Q Shipyard: Yantai Raffles Shipyard (China) Shipyard: COSCO Shipyard (China)

7. Slide 7: Acquisition of Shares of NATCO Japan

   HALF-YEAR 2006 HIGHLIGHT 4. ACQUISITION of SHARES of NATCO JAPAN † Purpose ƒ Strategic Partnership aimed at Technological Synergy effects in FPSO business † Effects ƒ MODEC Competitiveness ƒ Hull: Design & Engineering expertise based on Japanese marine technology ƒ Mooring: SPM technology ƒ Topside:

8. Slide 8: Half-Year 2006 Highlight: Other Topics

   HALF-YEAR 2006 HIGHLIGHT 5. OTHER TOPICS April 2006: MODEC Servicos de Petroleo do Brasil Ltda. received "Company of the Year Award" (7th Re[ha]bilita Rio Award) in Brazil P. 8

9. Slide 9: II. Market & Projects Review

   II. MARKET & PROJECTS REVIEW MARKETING ACTIVITIES in 2006 1st HALF MAJOR FPSO/FSO ORDERS in 2006 1st HALF NEW PRODUCTS: CP SEMI MAJOR PROSPECTIVE PROJECTS in 2006~2007 MODEC PROJECT LOCATION TIME CHARTER / O&M PROJECTS TIME CHARTER / O&M PERIOD P. 9

10. Slide 10: Marketing Activities in 2006 1st Half

    MARKETING ACTIVITIES in 2006 1st HALF Current status of prospective projects announced at analysts presentation in February 2006 Truong Son Song Doc FPSO (Vietnam) Vietsovpetro Dragon FSO (Vietnam) JVPC Rang Dong FSO (Vietnam) BHPB Shenzi TLP (GOM) 9 award to MODEC 9 award to MODEC MODEC, Inc. (Toky

11. Slide 11: Major FPSO/FSO Orders in 2006 1st Half

    MAJOR FPSO/FSO ORDERS in 2006 1st HALF MODEC (Japan/USA) Stybarrow FPSO Rang Dong FSO SBM (Netherlands/Monaco) Frade FPSO Bluewater (Netherlands) Ettrick FPSO Bergesen (Norway) Bilabri FPSO Saipem (Italy) Gimboa FPSO Nexen Ettrick FPSO (Bluewater) JVPC Rang Dong FSO (MODEC) Equator Exploration Bilab

12. Slide 12: New Products: CP Semi

    NEW PRODUCTS: CP SEMI † CP Semi: Central Pontoon Semisubmersible ƒ Conceptual Work Started June 2003 CP Semi 28000 ƒ Developed Designs: Location Water depth(ft) Payload(st) GOM 7,500 28,000 GOM 6,500 12,000 GOM 4,300 8,500 CP Semi 12000 GOM 7,000 5,500 ƒ Approved by ABS ƒ Model Tested – wind tunnel,

13. Slide 13: Major Prospective Projects in 2006~2007

    MAJOR PROSPECTIVE PROJECTS in 2006~2007 Truong Son Song Doc FPSO (Vietnam) Nexen Knottyhead TLP (GOM) Lease (Conversion) EPCI Woodside Tiof TLP (Mauritania) Vietsovpetro Dragon FSO (Vietnam) Amerada Hess Pony TLP (GOM) EPCI EPCI (New Built) EPCI CNR Olowi FPSO (Gabon) Lease (Conversion) MODEC, Inc.

14. Slide 14: MODEC Project Location

    MODEC PROJECT LOCATION Petronas Carigali Ruby FPSO (O&M) Under construction Note) Ruby FPSO was built by Prosafe CLJOC Su Tu Den FPSO (T/C) Decommissioned / Relocated JVPC Rang Dong FSO (T/C) T/C : Own & Operate O&M : Operate BBC : Own KNOC Rong Doi FSO (T/C) Vietsovpetro White Tiger FSO PEARL Jasmi

15. Slide 15: Time Charter / O&M Projects

    TIME CHARTER / O&M PROJECTS ƒ MODEC currently owns 7 FPSO/FSOs and operates 8 FPSO/FSOs ƒ MODEC will add 5 more FPSO/FSOs by 2008 leading to 13 FPSO/FSOs operations Under construction T/C: Own & Operate O&M: Operate PEARL Jasmine FPSO (T/C) CLJOC Su Tu Den FPSO (T/C) MODEC, Inc. (Tokyo) MODEC Int’l

16. Slide 16: Time Charter / O&M Period

    TIME CHARTER / O&M PERIOD Time Charter Contract O&M Contract Fixed period Option period Fixed period Option period 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 JVPC Rang Dong FSO - BHPBP Stybarrow FPSO - Petrobras Espadarte Sul FPSO - Petro

17. Slide 17: III. Profit & Loss

    III. PROFIT & LOSS SALES ORDERS, SALES and ORDER BACKLOGS by SERVICE TYPES ORDINARY INCOME NET INCOME P. 17

18. Slide 18: Sales

    SALES SALES † Progress of EPCI works KNOC Rong Doi FSO (Mil. JPY) ƒ 100,000 80,000 ƒ Petrobras Espadarte Sul FPSO 80,000 66,751 71,614 ƒ Petrobras PRA-1 FSO 60,000 51,891 50,886 ƒ BHPBP Stybarrow FPSO ƒ Amerada Hess Oveng TLP & 40,000 33,057 30,649 Okume/Ebano TLP 21,788 20,000 ƒ BHPB Shenzi TLP † C

19. Slide 19: Orders, Sales and Order Backlogs by Service Types

    ORDERS, SALES and ORDER BACKLOGS by SERVICE TYPES Orders by Service Types Sales by Service Types (Mil. JPY) Lease, Charter and O&M EPCI Other (Mil. JPY) Lease, Charter and O&M EPCI Other 200,000 80,000 71,614 166,538 66,751 150,000 60,000 51,891 50,886 86,949 109,084 33,057 54,974 100,000 40,000 57,

20. Slide 20: Ordinary Income

    ORDINARY INCOME ORDINARY INCOME (Mil. JPY) 6,000 Equity in earnings of affiliates: Lease 5,408 † 4,500 income from affiliates CLJOC Su Tu Den FPSO 4,000 3,701 3,190 ƒ 2,614 ƒ CNR Baobab FPSO 2,000 1,495 1,539 ƒ Santos Mutineer-Exeter FPSO 920 ƒ PEARL Jasmine FPSO 0 03/6 03/12 04/6 04/12 05/6 05/12 0

21. Slide 21: Net Income

    NET INCOME NET INCOME (Mil. JPY) 4,000 3,213 3,100 3,000 Influence of deferred profits (Mil. JPY) 2,230 04/6 04/12 05/6 05/12 06/6 2,029 2,000 Deferred 895 1,355 407 1,211 1,093 1,500 Realized 14 31 1,175 1,473 502 1,005 1,068 1,000 814 Influence 881 1,324 768 262 590 Balance 2,132 2,575 1,806 2,313

22. Slide 22: IV. Balance Sheet & Cash Flow

    IV. BALANCE SHEET & CASH FLOW ASSETS LIABILITIES & NET ASSETS / SHAREHOLDERS’ EQUITY CASH FLOW P. 22

23. Slide 23: Assets

    ASSETS (Mil. JPY) ASSETS 05/12-06/6 Current Assets Non-Current Assets 05/6 05/12 06/6 Variance 06/6 72,743 34,385 107,129 Cash and time deposits 10,529 25,061 31,811 6,749 Accounts receivable - trade 12,063 16,409 10,328 6,081 05/12 48,832 55,866 104,698 Inventories 498 2,237 1,911 326 05/6 37,753 2

24. Slide 24: Liabilities & Net Assets / Shareholders' Equity

    LIABILITIES & NET ASSETS / SHAREHOLDERS’ EQUITY (Mil. JPY) LIABILITIES & NET ASSETS / SHAREHOLDERS’ EQUITY 05/12-06/6 Liabilities Net Assets / Shareholders' Equity 05/6 05/12 06/6 Variance 06/6 67,317 39,811 107,129 Accounts payable - trade 6,447 18,889 23,302 4,412 Short-term loans payable 16,335 2

25. Slide 25: Cash Flow

    CASH FLOW (Mil. JPY) 05/6-06/6 CF from Operating Activities 04/6 05/6 06/6 Variance Cash Flow from Operating Activities Income before income taxes and Cash Flow from Investing Activities 615 2,614 1,539 1,074 Cash Flow from Financing Activities minority interests Cash and Cash Equivalents at Ending

26. Slide 26: V. Financial Indicator

    V. FINANCIAL INDICATOR Amerada Hess Oveng TLP & Okume/Ebano TLP P. 26

27. Slide 27: Financial Indicator

    FINANCIAL INDICATOR 05/6-06/6 (Mil. JPY) 03/6 04/6 05/6 06/6 Variance 05/12 Operating profit 2,148 702 2,098 1,272 826 3,895 Depreciation and amortization 1,316 268 497 332 165 1,116 Amortization of consolidated differences - 13 13 13 0 26 Collection of lease receivable (Cantarell FSO, Inc., S.A. de

28. Slide 28: VI. Forecast for FY 2006

    VI. FORECAST for FY 2006 KNOC Rong Doi FSO Naming Ceremony July 1, 2006 Yantai Raffles Shipyard, People’s Republic of China P. 28

29. Slide 29: Forecast for FY 2006

    FORECAST for FY 2006 SALES (Mil. JPY) Lease, Charter and O&M EPCI Other 100,000 80,000 71,614 75,000 56,540 66,751 † Sales to affiliates from EPCI services will further the deferment of profits 51,891 50,000 57,864 54,974 ƒ Impact of deferred profits on ordinary 44,738 25,000 39,422 income is expect

MODEC — H1 2006 Earnings Presentation on 6ix