Philly Shipyard — AGM Information 2021

Apr 21, 2021

Annual General Meeting

Philly Shipyard ASA Oslo, 21 April 2021

Agenda

• 1. Opening of the annual general meeting, including approval of the notice and agenda.
• 2. Election of a person to co-sign meeting minutes along with the meeting chair.
• 3. Presentation of business activities (non-voting).
• 4. Approval of the 2020 annual accounts of Philly Shipyard ASA, group consolidated accounts and the Board of Directors' report.
• 5. Approval of the policy for salary and other remuneration to the executive management of the Company.
• 6. Consideration of the statement of corporate governance (non-voting).
• 7. Stipulation of remuneration to the members of the Board of Directors and the Audit Committee.

• 8. Stipulation of remuneration to the members of the Nomination Committee.

• 9. Approval of remuneration to the auditor for 2020.

• 10. Election of members to the Board of Directors.
• 11. Election of members to the Nomination Committee.
• 12. Authorization to the Board of Directors for payment of dividends.
• 13. Authorization to the Board of Directors to acquire own shares in connection with acquisitions, mergers, de-mergers or other transactions.
• 14. Authorization to the Board of Directors to acquire own shares for the purpose of investment or subsequent sale or deletion of such shares.
• 15. Authorization to the Board of Directors to increase the share capital in connection with new shipbuilding projects or other future investments within the Company's scope of operations.

Presentation of Business Activities

Philly Shipyard ASA

Company Overview

A leading U.S. shipbuilder that is presently pursuing a mix of commercial and government work.

• Company: PHLY possesses a state-of-the-art shipbuilding facility and has earned a reputation as a preferred provider of ocean-going merchant vessels with a track record of delivering quality ships.
• Products: The yard has delivered 6 containerships, 22 product tankers, and 2 Aframax tankers, representing around 50% of all large ocean-going Jones Act commercial ships delivered since 2000.
• Facility: PHLY's shipyard was completely rebuilt in 1998 and has been optimally designed to support commercial shipbuilding operations with over USD 650M invested through a public-private partnership.
• Processes: The yard utilizes modular construction, automated fabrication systems and outsourcing to enhance productivity.
• Partners: PHLY has access to global shipbuilding and design expertise through agreements with partners in North America, Asia and Europe.
• Order book: Awarded four (4) National Security Multi-Mission Vessels (NSMV) as of 19 January 2021.
• Ownership: Aker Capital AS owns 57.6% of the company, which is listed on the Oslo Stock Exchange.

Commercial Vessels

Summary of Philly Shipyard 2020 Main Events

• Implemented measures to mitigate the risk for operational disruptions as the COVID-19 pandemic developed across the world
• Reached milestone of 1,000,000 consecutive hours worked without a single lost time incident
• Awarded a contract by TOTE Services for the construction of up to five (5) National Security Multi-Mission Vessels (NSMVs) for the U.S. Department of Transportation's Maritime Administration (MARAD)
• Received an order for the first two (2) NSMVs with a total contract value of approximately USD 630 million with last delivery in 2023
• Ramped up pre-production activities on the NSMV program and cut steel on the first NSMV
• Completed ship repair and maintenance work on a U.S. Government vessel, the FSS Pollux
• Awarded contracts for industry design studies for two major government shipbuilding programs

Completed Repairs on USNS Pollux – 5 September 2020

Start of Fabrication on NSMV I – Steel Cutting Ceremony 15 December 2020

Presentation of Financial Statements

Philly Shipyard ASA

Consolidated Income Statement

Amounts in USD thousands (except shares and share amounts) per	2020	2019
Operating revenues	54 144 ,	28 207 ,
Operating revenues	54 144 ,	28 207 ,
Cost of vessel construction	(47 712) ,	(26 031) ,
Wages and other personnel (SG&A) expenses	(2 700) ,	(2 318) ,
Other (SG&A) operating expenses	(3 722) ,	(3 048) ,
Under-recovered overhead costs	(21 578) ,	(14 122) ,
Operating loss before depr . and impairment (EBITDA)	(21 568) ,	(17 312) ,
Depreciation	(6 190) ,	(7 056) ,
Reversal of impairment of assets	-	3 077 ,
(EBIT) Operating loss before interest interest and taxes	(27 758) ,	(21 291) ,
Financial income	661	2 131 ,
Financial expenses	(546)	(2 021) ,
Loss before tax	(27 643) ,	(21 181) ,
Income benefit tax	29 222 ,	969
Income/(loss) after tax	1 579 ,	(20 212) ,
Weighted number of ordinary shares average	12 107 901 , ,	12 107 901 , ,
Basic income/(loss) share (USD) per	0 13	(1 67)

Consolidated Statement of Financial Position Assets

USD Amounts in thousands	2020	2019
ASSETS
Property , plant and equipment	25 432 ,	26 104 ,
Right-of-use assets	13 986 ,	13 035 ,
Restricted cash long-term	25 028 ,	-
Income receivable long-term tax	5 150 ,	-
Deferred tax asset	8 448 ,	-
Other long-term assets	495	234
Total non-current assets	539 78 ,	39 373 ,
Prepayments and other receivables	45 441 ,	3 502 ,
Restricted cash short-term	1 394 ,	66 475 ,
Income receivable short-term tax	14 990 ,	166
Contract assets	-	1 608 ,
Cash and cash equivalents	97 361 ,	50 673 ,
Total current assets	159 186 ,	122 424 ,
Total assets	237 725 ,	161 797 ,

Consolidated Statement of Financial Position Equity & Liabilities

Amounts in USD thousands	2020	2019
LIABILITIES EQUITY AND
Paid in capital	35 206 ,	35 206 ,
Other equity	639 57 ,	56 060 ,
Total equity attributable equity holders of to parent co.	92 845 ,	91 266 ,
Total equity	92 845 ,	91 266 ,
Income payable long-term tax	1 200 ,	-
Lease liability long-term	1 904 ,	-
Deferred liability tax	-	2 193 ,
Total liabilities non-current	3 104 ,	2 193 ,
Trade payables and accrued liabilities	7 974 ,	6 255 ,
Other provisions - warranties	1 787 ,	2 137 ,
Customer advances , net	130 894 ,	-
Other liabilities contract	151	-
Lease liability short-term	309	-
Income payable short-term tax	661	1 8
Welcome Fund loan	-	59 928 ,
Total liabilities current	141 776 ,	68 338 ,
Total liabilities	144 880 ,	70 531 ,
equity liabilities Total and	237 725 ,	161 797 ,

Philly Shipyard ASA Income Statement

Amounts in USD thousands	2020	2019
Operating revenues	-	-
Operating expenses	(581)	(571)
Operating loss	(581)	(571)
Interest income from subsidiaries	367	1 699 ,
Interest subsidiaries to expense	(1 289) ,	(2 231) ,
Other interest income and financial income	4	423
Other interest and financial expense expense	(43)	(14)
Loss before tax	(1 542) ,	(694)
Income (expense)/benefit tax	(201)	205
Net loss after tax	(1 743) ,	(489)
Allocation of loss: net
after Net loss tax	(1 743) ,	(489)
Other equity	1 743 ,	489
Total	-	-

Philly Shipyard ASA Statement of Financial Position

Amounts in USD thousands	2020	2019	Amounts in USD thousands	2020	2019
ASSETS:			LIABILITIES: EQUITY AND
			Share capital	22 664 ,	22 664 ,
			Share premium reserve	12 542 ,	12 542 ,
			Total paid in capital	35 206 ,	35 206 ,
			Other equity	7 018 ,	8 761 ,
			Total equity	42 224 ,	43 967 ,
Shares in subsidiary	67 000 ,	67 000 ,	Deferred liability tax	-	205
Loan subsidiary to	-	31 000 ,	from Loan subsidiary	24 493 ,	55 000 ,
Total non-current assets	67 000 ,	98 000 ,	Total liabilities non-current	24 493 ,	55 205 ,
Cash and cash equivalents	376	1 505 ,	Income payable short-term tax	413	-
Prepayments & other receivables	7 5	4 4	Trade payables & accrued liabs	321	377
Total current assets	451	1 549 ,	Total liabilities current	734	377
Total assets	67 451 ,	99 549 ,	Total equity and liabilities	67 451 ,	99 549 ,

Auditor's Report 2020

KPMG AS Gunnar Sotnakk, State Authorized Public Accountant

Approval of the policy for determining salary and other remuneration to executive management of the Company

The General Meeting approves the policy for determining salary and other remuneration to the executive management pursuant to the Norwegian Public Limited Liability Companies Act section 6-16a.

Corporate Governance Report 2020

Philly Shipyard ASA's corporate governance report is presented on pages 71-75 of the 2020 annual report.

Proposal from the Nomination Committee of remuneration to the members of the Board of Directors, the Audit Committee and the Nomination Committee

Board of Directors

>	Board chairperson	NOK 475 000
>	Board members	NOK 375 000
>	Audit committee chairperson	NOK	55 000
>	Audit committee members	NOK	45 000

Nomination Committee

Chairman and members NOK 34 000

Approval of remuneration to the auditor for 2020

The remuneration to the auditor of USD 32,000 ex. VAT for the audit of the Company's 2020 annual accounts is approved. The Group has not paid any fees to KPMG for services other than audit.

Board of Directors composition

Kristian Røkke Board Chairman

Amy Humphreys Deputy Board Chairperson

Elin Karfjell Board Member

Nomination committee composition

Leif-Arne Langøy (Chairman)

Ove Taklo

Board authorizations

• Authorization to the Board of Directors for payment of dividends.

• Authorization to the Board of Directors to purchase own shares in connection with acquisitions, mergers, de-mergers or other transactions.

• Authorization to the Board of Directors to purchase own shares for the purpose of investment or subsequent sale or deletion of such shares.

• Authorization to the Board of Directors to increase the share capital for new shipbuilding projects or other future investments within the Company's scope of operations.

Disclaimer

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. Such forward-looking information and statements 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 Philly Shipyard ASA and its subsidiaries and affiliates (the "Philly Shipyard Group") lines of business. These expectations, estimates, and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates," "anticipates," "intends" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic, market and political conditions in the geographic areas and industries that are or will be major markets for the Philly Shipyard Group's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates, the COVID-19 pandemic and subsequent economic effects, and such other factors as may be discussed from time to time. Although Philly Shipyard ASA believes that its expectations and the information in this presentation were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this presentation. Neither Philly Shipyard ASA nor any other company within the Philly Shipyard Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in this presentation, and neither Philly Shipyard ASA, any other company within the Philly Shipyard Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in this presentation.

Philly Shipyard ASA undertakes no obligation to publicly update or revise any forward-looking information or statements in this presentation, other than what is required by law.

The Philly Shipyard Group consists of various legally independent entities, constituting their own separate identities. Philly Shipyard is used as the common brand or trademark for most of these entities. In this presentation we may sometimes use the "Company," "Philly Shipyard", "Group", "we" or "us" when we refer to Philly Shipyard companies in general or where no useful purpose is served by identifying any particular Philly Shipyard company.

This presentation does not constitute an offer of any securities for sale.