REC Silicon

Investor Presentation • Feb 16, 2017

1

© REC Silicon ASA. All rights reserved. Confidential

FOURTH QUARTER 2016

PRESENTATION

Disclaimer

FOURTH QUARTER 2016

This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC Silicon ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC Silicon ASA's businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the presentation. Although REC Silicon ASA believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation. REC Silicon ASA makes no representations or warranties, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither REC Silicon ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the fourth quarter 2016 results on February 16, 2017. Information contained herein will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.

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REC Silicon Q4 Financial Results	T. Torvund, CEO
Financial Overview	J.A. May II, CFO
Market Outlook	T. Torvund
U.S. / China Trade Dispute Update	T. Torvund
Near Term Strategy	T. Torvund
Yulin JV Update	T. Torvund
Guidance	T. Torvund
Q & A

Highlights 2016

Revenues:	\$80.4M
EBITDA:	\$ 4.9M

FBR Cash Cost of \$11.2/kg

• Includes Impact of Cost Cutting Initiatives Announced on November 2, 2016
• Demonstrates Low Cost Capability at Reduced Production Rates

Solar Grade Polysilicon Market Recovery

• Solar Grade Polysilicon Sales Volumes Increased by 106% vs. Q3 2016
• Q4 Exit Average Price Indices Increased by 12.7% Compared to Q3 Exit

Strong Silicon Gas Sales Volumes

• Increased Volumes by 6.5% Compared to Q3 2016
• Stable Silane Gas Prices vs. Q3 2016

December 31, 2016 Cash Balance of \$65.8M

• Increased Working Capital Investment as Expected
• Expect to Remain Near Cash Neutral in 2017
• No Debt Maturities in 2017

Yulin JV on Track for Start-Up in Second Half of 2017

Polysilicon Sales Volume **
Total	3,801MT
Inventory Decrease	585MT

FBR Production
Actual	2,308MT
Guidance*	2,260MT
Deviation	2.1%

Total Polysilicon Production
Actual	3,218MT
Guidance*	3,280MT
Deviation	-1.9%

Semiconductor Production
Actual	587MT
Guidance*	680MT
Deviation	-13.7%

Silicon Gases Sales Vol.
Actual	822MT
Guidance* 800MT
Deviation	2.8%

** Guidance Presented November 2, 2016

** Excludes Fines and Powders

5 © REC Silicon ASA. All rights reserved. Confidential February 16, 2017

FOURTH QUARTER

›Silicon Gas Sales Volumes 822MT

• 6.5% Volume Increase vs. Q3'16
• Silane Gas Price Unchanged vs. Q3'16

›Strong Underlying Growth in Silane and Silicon Gas Market

• Silane
• MCS
• DCS
• Disilane

Silicon Gases (MT)

Key Financial Results – Return to Positive EBITDA 2016

Revenues - \$80.4M

• › 58.0% Increase vs. Q3'16
• › Polysilicon Sales Volumes 3,801 MT (Excluding Fines & Powders)
• 114.2% Sales Volume Increase vs. Q3'16
• (18.3%) Solar Grade Price Decrease vs. Q3'16
• › Silicon Gas Sales Volumes 822 MT
• 6.5% Sales Volume Increase vs. Q3'16
• Silane Price Unchanged vs. Q3'16

EBITDA of \$4.9M

• › Reflects:
• Impact of Cost Cutting Initiatives
• Increased Semiconductor Sales Volumes (682MT)
• Continued Strong Silicon Gas Sales (882 MT)

Trade War Results in Production Curtailments 2016

2015 Inventory Increases Due to:

• › Trade War (Limited Access to China)
• › Excess Polysilicon Supply

2016 Inventory Levels

• › 1 st Half Capacity Curtailment in Moses Lake
• › Additional Production Curtailment Required due to Market Deterioration in Q3
• › Market Recovery Leads to Lower Inventories at Year End
• › 585MT Decrease in Q4'16 0 MT

Polysilicon Inventory

FOURTH QUARTER

Cash Flows 2016

Cash Outflows From Operating Activities (\$12.7M)

• › EBITDA of \$4.9M
• › Working Capital Increase (\$18.2M)
• Increased Accounts Receivable (\$19.3M)
• Decreased Accounts Payable (\$7.6M)
• Decreased Inventories \$8.8M
• › Interest payments (\$1.8M)

Cash Outflows From Investing Activities (\$3.9M)

• › (\$4.2M) CapEx
• › \$0.3M Release of Restricted Cash

Currency Loss of (\$4.4M)

› Stronger USD Relative to NOK

Nominal Debt - \$186M

• › Decreased by (\$5.4M) in Q4'16
• Due to Stronger USD Relative to NOK

Nominal Net Debt - \$120M

• › Increased by \$15.7M in Q4'16
• Decrease in Cash of \$21.0M
• Decrease in Nominal Debt of (\$5.4M)

Indemnity Loan (Included in Net Debt)

• › Callable Beginning in February 2016
• › Has not Been Called
• › Due Date is Uncertain

JV Equity Contribution

› Agreements Permit Company to Forego Making Remaining Contribution if Unable to Pay

MARKET OUTLOOK

FOURTH QUARTER

2016

Steady Growth in PV, Notably in New Markets 2016

• › China Still Most Important Market, but Reduced Installations in Coming Years
• › India and Other Emerging Markets Will Continue to Grow
• › Long Term Market Outlook is Increasingly Geographically Diversified

Source: I.H.S. PV Demand Market Tracker - Q4 2016

2016 – 2018 Analysts' Installation Views 2016

• › Analysts' Views Differ, but Market Expected to Remain Stable 2016-2018
• › H2 2017 Uncertain Due to FIT Cuts in China
• › Additional Uncertainty in the US Due to Political Policy Changes

14 © REC Silicon ASA. All rights reserved. Confidential February 16, 2017 Source: IHS Markit Technology, Global PV Installations by Region, December 9, 2016, GTM Research, PV Pulse: January 2017 , Photon Consulting, Installation Volume Outlook February 8, 2016

FOURTH QUARTER

Quarterly Module Installations by Region 2016

• › Global Installations in Q2 will be Strong Due to 2016 China FIT
• Grace Period Expires June 2017
• › Balanced H2 2017 Still Expected Due to Increased Installations in the Americas and India
• › I.H.S. Expects a 2017 Total Installment of 79.3 GW
• Increase of ~2 GW from 2016

25 IHS 2017F Quarterly Installations Europe ME&A Americas China Japan India RoA

FOURTH QUARTER

Limited New Polysilicon Capacity Expansion 2017-2019 2016

Source: January 2017 Competitor releases, industry analysts, REC Market Intelligence

16 © REC Silicon ASA. All rights reserved. Confidential February 16, 2017

China Still Dependent on Polysilicon Imports 2016

17 © REC Silicon ASA. All rights reserved. Confidential February 16, 2017

China's Solar Supply Chain Dominance and Widening Price Difference

18 © REC Silicon ASA. All rights reserved. Confidential February 16, 2017

FOURTH QUARTER Polysilicon ASP Approaches Cash Cost of Marginal Producers

© REC Silicon ASA. All rights reserved. Confidential February 16, 2017

Polysilicon Prices Increase, While Prices Stabilize Across the Supply Chain

FOURTH QUARTER 2016

Copyright © 2017 PVinsights.com All rights reserved

Polysilicon Price Can Increase Without Demand Destruction

• › Polysilicon ASP is Relatively Small Compared to Total Module Costs
• › Near Term Wafer, Cell, and Module Improvements Can Absorb Price Increases

Source: REC Internal Modeling, PV Insights, ITRPV 7th Edition 2016

U.S./ CHINA TRADE DISPUTE UPDATE

US / China Solar Trade Dispute Continues 2016

• › Record Imports of Polysilicon into China
• High Duties on US Polysilicon Have Prevented US Companies From Taking Advantage
• Korea and Germany Have Increased Imports as a Result
• › ~\$3/kg Higher Prices Inside China Continue
• › China Investigation of Korean Polysilicon On-going
• › US Panel Prices Down Due to Imports of Tariff Free Non-Chinese Panels
• › Current Transition Process for New USG Necessarily slows Resolution Progress
• › New USG Rhetoric Suggests That it Values US Polysilicon Manufacturing Capacity & Jobs

NEAR TERM STRATEGY

FOURTH QUARTER

Competitive Cash Cost in Moses Lake 2016

› Successful Implementation of Cost Reduction Initiatives › Competitive at Reduced FBR Production Rates › FBR Production Matches Market Demand \$10.7 \$11.0 \$13.8 \$16.5 \$24.8 \$31.3 *\$10.8 \$11.2 \$11.0 \$0.00 \$5.00 \$10.00 \$15.00 \$20.00 \$25.00 \$30.00 \$35.00 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1E 2015 2016 2017 Production Cash Cost

*Removes Accrual Adjustments

Initiatives to Maintain Competitive Cash Cost 2016

› Headcount Reduced to 540

• › Company Wide Initiatives to Reduce Fixed Costs
• › Cash Cost of \$11.2/kg Compared to Guided \$12.4/kg

REC Silicon ASA Headcount Q1 2015-Q4 2016

FBR Production Aligned with Market Demand

Note: Excludes Fines & Powder

FOURTH QUARTER

2016

Q YULIN JV UPDATE

Yulin JV – On Track for H2 2017 Start-up 2016

Yulin Plant Production Capacity:

• › 19,000 MT Granular Polysilicon
• FBR-B: Next Generation Technology
• › 300 MT Siemens Polysilicon
• Semiconductor Grade
• › 500 MT Silane Gas Loading

Capital Contributions

• › Negotiations Underway to Defer Remaining Contributions Until After 2018
• › Agreements Permit Company to Forego Making Remaining Contribution if Unable to Pay

Yulin JV – Successful Cooperation To Date 2016

• › JV Executive Leadership Combination of REC and JV Partner
• Leverages JV Partner's Substantial Experience and Expertise in China
• › Extensive Training Completed at Moses Lake and Butte
• 6-12 Months of Operator and Field Training by REC Experienced Personnel in US
• ~50 JV Employees from China Now Have Hands-on Experience
• › Detailed Engineering Complete
• › Construction Progressing Well
• Over 4.5 Million Man Hours Worked
• Zero Safety Incidents Reported

GUIDANCE

FBR Production
2016	7,863MT
Guidance*	7,815MT
Deviation	0.6%

FBR Cash Cost
2016	\$15.3/kg
Guidance*	\$15.7/kg
Deviation	-2.5%

Total Polysilicon Production
2016	10,729MT
Guidance* 10,791MT
Deviation	-0.6%

Semiconductor Production
2016	1,324MT
Guidance*	1,418MT
Deviation	-6.6%

Silicon Gas Sales
2016	2,734MT
Guidance*	2,712MT
Deviation	0.8%

2016 CapEx **
Maintenance	\$11M
Expansion	\$ 1M
Total	\$12M

** Guidance Presented November 2, 2016

** Additions to Property Plant and Equipment

FBR Production		FBR Cash Cost			Total Polysilicon Production
Q1	2,320MT	Q1	\$11.0/kg	Q1	3,080MT
2017	9,420MT	2017	\$11.0/kg	2017	12,500MT

Semiconductor Production		Silicon Gas Sales		CapEx *
Q1	350MT	Q1	750MT	Maintenance	\$10M
2017	1,170MT	2017	3,200MT	Expansion	\$ 0M

** Additions to Property, Plant and Equipment

2017 Total \$10M

Q1 2017 Reporting May 3, 2017

FOURTH QUARTER

2016