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Informe para inversionistas

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Contacto: Juan Felipe González Rivera / Rafael Andrés Salamanca Teléfono: 571 3268000 ext 1546 / ext 1675 E mail: [email protected] / [email protected]

Bogota, Colombia, March 22 2013

Index

Executive summary and relevant facts.

Performance of controlled investments.

- EEB - Transmission

- DECSA - EEC

- TGI

- CÁLIDDA Performance of Non - Controlled investments.

- Emgesa.

- Codensa.

- Promigas

- Gas Natural.

- REP and CTM. EEB consolidated financial performance.

Annex 1: Legal notice, clarifications.

Annex 2: Link to EEB´s consolidated and stand-alone financial statements.

Annex 3: Overview of EEB

Annex 4: Definitions of EBITDA included in this report. Consolidated Adjusted EBITDA reconciliation LTM and Quarterly

Annex 5: Tables and graphics’ footnotes.

Annex 6: Technical and regulatory terms


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Executive summary and relevant facts

Table # 1 – Overview of the electricity sectors Colombia Peru Guatemala Installed capacity – MW 14,360 9,196 2,182 Demand – GWh 59,367 40,940 8,557 Demand growth 12 / 11- % 3.9 5.8 3.0 Growth drivers Growth of 6.8% in demand

unregulated (industry and trade). Demand mining sector grew 20.6%.

Growth of 6.29% of PIB.

Construction and trade led growth

Growth of 3% of PIB.

The supply of electricity and water harvesting in the country grew 6.8%

Sources: XM y UPME - Colombia; COES – Peru; AMM -- Guatemala

Table N. 2 – Overview of the natural gas sectors

Colombia

Proven and probable reserves – TPC 7.1

Domestic demand - mm cfd 857 *

Demand growth 12 / 11- % 6.6

Growth drivers Demand grew two percentage points higher than the growth of the economy

Additional gas demand generated by expectations of a new phenom El Niño

Sources: UPME, CON, MEM, Osinergim

* Jan 12 – Oct 12

Table N. 3 –EEB`s consolidated financial indicators

COP million F 12 F 11 Var%

Operating revenue 1,585,105 1,421,664 11.5

Operating income 558,518 550,659 1.4

Consolidated Adjusted EBITDA Q4 176,861 353,008 -49.9

Consolidated Adjusted EBITDA LTM 1,279,394 1,082,047 18.2

EBITDA LTM 1,279,394 1,082,047 18.2

Dividends and reserves declared to EEB 524,542 347,227 51.1

Net income 690,701 305,294 126.2

Dividends and reserves declared by EEB 319,964 -

Dividend per share

Latest international credit ratings S&P - Sep 12: BB+ stable Fitch - Nov 12: BBB- stable Moody’s - Nov 12: Baa3 stable

Net income increased principally as the result of: () the 46% increase in dividends paid in favor of EEB (+COP 187,000

million). In 2011, non-controlled affiliates declared dividends based on the October-December 2010 period, while in

2012, they declared dividends for the full twelve months of 2011; and () an increase of approximately COP 8,000 million

in operating income, which includes the results of operations of the electricity transmission and natural gas transportation

businesses.

EEB and Grupo EEB

- On February 8, 2013, the Board of Directors of EEB designated Sandra Stella Fonseca Arenas as the new CEO of

EEB and Grupo Energía de Bogotá. Sandra Fonseca is an electrical engineering graduate of the Colombian School of

Engineering and has a Masters’ degree in Energy Studies from the University of Sheffield and an MBA in Industrial

Management from Sheffield Hallam University in the U.K. She has 18 years experience in the energy and public

services sectors, and was the Executive Director of Colombia’s Energy and Gas Regulatory Commission (CREG). Her

contract ends in February 2017, and may be renewed at the discretion of the Board of Directors.

- On March 21, 2013, EEB’s shareholders’ meeting approved distribution of dividends of COP 403,604 million, or COP

43.96 per share. This amount is 58% of the total earnings that legally can be distributed. For minority shareholders,


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the dividends will be paid in a single installment on May 22, 2013. Ecopetrol will be paid in two equal installments, on

June 20 and November 27, 2013.

- In 2012, two of the three rating agencies gave EEB international investment grade debt ratings, which expands the

universe of investors eligible to acquire EEB’s securities.

- EEB will begin the process of convergence with International Financial Reporting Standards (IFRS). The timetable of

actions to carry out the convergence will be set in 2013. The transition year will be 2014, and the company will

present its financial statements under both existing Colombian financial norms and IFRS, for comparative purposes.

The first year for presentation of financial statements under IFRS will be 2015. All the Group’s affiliate companies in

Colombia will also transition to IFRS.

- In 1Q 2012, EEB was awarded the contracts for three substations in Colombia and their associated transmission

lines, with a total value of approximately USD 140 million.

TGI

- TGI carried out a successful debt management operation that improved the maturity profile and significantly reduced

financial costs; the company expects annual interest savings of approximately USD 28.5 million through 2022.

- In December 2012, the CREG issued its Resolution 121 which resolved TGI’s appeal of Resolution 110 of 2011. The

company expects that the full impact of the new rate structure will be felt in March 2013, and increase in regulated

revenues by approximately 10%.

- Two of the three international credit rating agencies (Fitch and Moody’s) awarded TGI an investment grade rating,

broadening the universe of potential investors who can acquire TGI securities.

EEBIS

- Guatemalan subsidiary of EEB dedicated to providing consulting and advisory services, and the execution of

electricity projects. The company was awarded projects in 2012 with a value of approximately USD 40 million; these

projects are works to connect cogeneration plants to the national power grid. It is expected that TRECSA, another

EEB subsidiary, will carry out the works.

EMGESA – Codensa

- The increase in capital of ENERSIS S.A., which was completed in December 2012, did not affect the scope of the

shareholders agreements that EEB and its new partner, Cono Sur Participaciones, have in Codensa and Emgesa.

- Emgesa amended its bylaws to authorize participation of the sale of natural gas. The company expects to be able to

offer gas to its non-regulated clients starting in 2014. It is expected that the gas business could represent

approximately 2% of EBITDA by 2017.

- In July 2012, the subsidiary Emgesa Panamá S.A. was created, in order to participate in the new electricity

interconnection business between Colombia and Panama.

- Emgesa placed bonds for COP 500,000 million in the Colombian market in December 2012. The resources will be

used to finance investments in El Quimbo and to pay inter-company loans to Codensa. With this bond issuance, the

total amount placed under Emgesa’s Bond Program reached COP 1,340,000 million out of a total authorized of COP

1,900,000 million.

Table N. 4 - Summary of EEB’s expansion projects

Project / Company

Country Sector Capex USD MM Status In operation:

La Sabana - TGI Colombia Natural gas transportation 57 Planning 2Q 14

Cusiana/Apiay – TGI Colombia Natural gas transportation 244 Planning 15

Regional Systems- TGI Colombia Natural gas transportation 35 Planning 14

ICA Peru - ConTUgas Peru Natural gas transp. and dist. 345 Under construction 3Q 13

Lima Callao - Cálidda Peru Natural gas distribution 460 Under construction 16

Guatemala - TRECSA Guatemala Electricity transmission 377 Under construction 1Q 14

Substations - EEB Colombia Electricity transmission 156 Planning 13-15

Ingenios - EEBIS Guatemala Electricity transmission 40 Planning 14


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TGI / Cusiana:

- In August, 2012, the last of TGI’s expansion projects (Cusiana Phase II / +110 mmcfd) started operations. These

investments increased transportation capacity approximately 53%. It is expected that Cusiana Phase II will generate

incremental revenues of approximately USD 50 million per year.

TGI / additional projects:

- The company is [evaluating] additional expansion projects in Colombia with a total value of approximately USD 342

million, including the Sabana compressor station, Cusiana-Apiay San Fernando, and regional transportation systems.

ConTUgas / ICA :

- Execution of the project reached 70% at the end of 2012, with an accumulated investment of USD 180 million.

- As of December 2012, the company had contracts with industrial clients for 10.5 mm cfd. The company expects to

close additional contracts in the first quarter of 2013 for 45.68 mm cfd. The total system capacity will be approximately

351 mm cfd.

- The company has 1,649 residential clients, and plans to connect 31,000 before the end of 2014. The contractual

commitment is to reach 50,000 residential clients 6 years after the declaration of start of commercial operations, which

is expected to take place in September 2013.

- The company hopes to complete its long-term financing in 2013, and repay the outstanding bridge loan of USD 215

million that is due in February 2014.

Cálidda / Lima Callao:

- Connections at the end of 2012 reached 103,724, an increase of 63% compared to 2011. Cálidda expects to have

165,000 connections by the end of 2013.

- Investments in 2012 to reach this goal were USD 95 million in 2012; the expansion of the principal network was the

area of greatest investment. Other investments in 2012 were the build-out of secondary networks, industrial

connections, branches, and connections to service stations for vehicular natural gas.

- Cálidda plans to refinance its outstanding debt of USD 197 million and to partially finance its 2013-2014 capex

requirements of US$123 million through a Rule 144A/Regulation S bond placement in the amount of USD 320 million.

TRECSA / Guatemala:

- The company began negotiations with local and international banks to obtain financing for 50% of the value of the

project (the other 50% is EEB capital contributions); this process is expected to be completed in March 2013.

EEB:

- The Armenia, Alférez, and Tesalia substations were 44.7%, 49.1%, and 19% completed, respectively.

Table N. 5 - Selected financial indicators - Non-controlled investments F12

COP million USD million

Emgesa Codensa Gas Natural Promigas REP CTM

Operating revenue 2,144,233 3,141,800 1,248,613 246,205 151 195

Operating income 1,234,196 828,501 327,594 54,761 38.9 25.6

EBITDA LTM 1,380,920 1,090,892 362,433 107,508 65.2 23.8

Net income 783,529 510,993 249,549 240,868 25.1 14.4


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Dividends and reserves declared to EEB 343,894 69,405 63,726 29,089 0 0

Capital reductions to EEB 0 0 0 0 0 0

* Estados financieros individuales

Table N. 6 - Summary of expansion projects of non-controlled companies

Project Company Sector Country Capex In

operation: USD mm

Quimbo Emgesa Electricity generation Colombia 837 14

Investments in vegetative growth and equipment replacement

Codensa Electricity distribution Colombia 140 13

Concession expansion REP Electricity transmission Perú 88 13 -14

Concession expansion and new con. CTM Electricity transmission Perú 146 13 -14

Expansions Promigas Natural gas dist. and transp. Colombia 123 13

Emgesa – El Quimbo:

- The company has not experienced delays, and the start of operations is expected in 2014.

- In 2012, the design and execution of the principal civil works for the project were completed, including the diversion of

the Rio Magdalena, a bridge over the Rio Páez, and the diversion tunnel. The environmental license was also

obtained.

- Construction and design of the works in the engineering of the power plant.

Codensa - Substations:

- While the equipment for the Nueva Esperanza substation has been delivered, execution of the project depends on the

construction of a transmission line that is the responsibility of EPM.

REP – Expansion of the concession:

- Construction of two expansions of the REP system were completed in 2012, with an investment of USD 54 million.

- Agreement was also reached with the Peruvian government in 2012 for three additional expansions of the

concession, with a total estimated value of USD 88 million, to be financed in 2013 and 2014.

- In October and November 2012, bonds totaling USD 80 million were placed in the local market, to refinance

outstanding debt and finance projects.

CTM – Concession expansion and new projects:

- The Zapallal – Trujillo line (531 km) started operations in 2012, with a required investment of USD 204 million.

- CTM will participate in 2013 in the calls for bids for transmission lines by Proinversión.

Return to index


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Performance of controlled investments

The increase in investments is the result of: () the execution of project UPME-01-2009, which was completed in the first

half of the year, and () the activities associated with the execution of the UPME-05-2010, UPME-02-2009, and UPME-

01-2010 projects. In addition, there have been activities associated with the modernization of the operating

communications system.

Technical indicators have been stable and are above the required regulatory minimums, without any penalties assessed

against the company.

Table N. 7 – EEB´s selected transmission business indicators

F 12 F 11 Var %

Operating income - COP million 49,332 49,662 -0.7

EBITDA 4Q - COP million 15,666 14,747 6.2

EBITDA LTM - COP million 65,748 64,295 2.3

Investments - COP million 28,042 9,255 203.0

Infrastructure availability - % (1) 99.9 100.0 0.0

Compensation for unavailability - % (2) 0.03 0.01 200.0

Maintenance program compliance - % (3) 100.0 100.0 0.0

Participation in Colombia’s transmission activity - % (4) 8.1 8.0 0.6

Footnotes in annex 5

Table N. 8 – EEC’s selected indicators - Controlled by DECSA

F 12 F 11 Var %

Number of clients 254,246 248,043 2.5 Operating revenue - COP million 283,813 262,527 8.1 Operating income - COP million 42,460 45,505 -6.7 EBITDA LTM - COP million 73,505 52,980 38.7 Net Income - COP million 30,012 30,678 -2.2 Dividends and reserves declared to EEB 0 0 - Loses - % (1) 12,340 12,530 -1.5 Footnotes in annex 5

Operating income and net income decreased as compared to 2011, principally as a result of pension provisions based on

new actuarial calculations in 2012. The increase in financial expense also negatively affected net income as a result of

the new requirements for financing the investment program in remodeling networks that is currently in execution. Debt

increased by 1822%.

In 2013, the dividend distribution proposal totaled COP 10,804 million which corresponds to 40% of net income.

Table N. 9 – TGI’s selected indicators

F 12 F 11 Var %

Operating revenue -COP million 702,309 626,838 12.0

Operating income -COP million 372,856 357,059 4.4

EBITDA 4Q - COP million 135,735 115,874 17.1

EBITDA LTM - COP million 526,721 481,570 9.4

Net income - COP million 247,680 25,614 867.0

Transported volume - mmcfd 422 420 0.5

Firm contracted capacity - mmcfd 604 560 7.9

International debt ratings

S&P - Mar. 12: BB; positive

Fitch - Nov. 11: BBB-; stable

Moody’s - Mar. 12: Baa3 stable


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The rate of growth of operating income and LTM EBITDA was slower than the growth of revenues, principally as a result

of: () higher level of depreciation, as a result of the new assets from the expansion projects. Expansion projects

increased the level of assets by USD 318 million; () increased costs for personnel and for fuel gas for the direct operation

of the compressors; () higher insurance payments as a result of the increased assets and premium increases resulting

from the winter cold wave; () higher administrative expenses associated with the debt management operation carried out

in 2012 (investment banking commissions, and rating agency and legal fees). It is important to note that the debt

management costs were a significant, one-time expense that the company does not expect to recur in 2013.

Growth in EBITDA for the quarter reflects the impact of the start of operations of Cusiana Phase II.

Growth in net income is explained by: () the positive performance of operating income; () and, in largest part, the

increase in the exchange difference account as a result of the effect of the appreciation of the peso on the valuation of

USD-denominated debt; and () lower financial costs as a result of the debt management operation carried out in March

2012.

Table N. 10 – Calidda´s selected indicators

F 12 F 11 Var %

Number of clients 103,724 64,204 61.5

Operating revenue - COP million 370,053 304,485 21.5

Operating income - COP mm 48,080 45,262 6.2

EBITDA LTM - COP million N.A N.A

Net Income - COP 64,448 59,447 8.4

Cálidda’s operating income growths as a result of new clients contracted which have generated higher costs of

installation services and administration costs.

The company expects to end 2013 with 165,000 connections.

Return to index

Performance of Non - Controlled investments

Table N 11 – Overview of Emgesa

Installed capacity 11 - MW 2,915

Composition 10 Hydro y 2 thermo

Generation 11 - Gwh 13,294

Sales 11 - Gwh 16,304

Operating revenue 11 - COP mm 2,144,233

EBITDA LTM F11 - COP mm 1,380,920

Controlled by Endesa from Spain

EEB’s stake 51.5% - 37.4% ordinary shares; 14.1% preferred non-voting shares


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Production and sales increased as a result of the increase in rain.

Contract sales increased at a much faster rate than spot market sales. Emgesa sold 70% of the electricity generated

under contracts with terms of one to two years.

Table N. 12 – Capex F 12 F 11 Var %

Million COP 646,645 290,407 122.7 Million USD 365.7 149.5 144.6

The increase in investments was the result of construction of El Quimbo.

Table # 13 – Selected financial indicators of Emgesa

COP million Var %

USD million

F 12 F 11 F 12 F 11

Operating revenue 2,144,233 1,899,062 12.9 1212.6 978

Cost of sales -880,529 -765,023 15.1 -498.0 -394

Administrative expenses -29,507 -29,336 0.6 -16.7 -15

Operating income 1,234,196 1,104,703 11.7 698.0 569

EBITDA LTM 1,380,920 1,256,231 9.9 781.0 647

Net income 783,529 667,755 17.3 443.1 344

Dividends and reserves declared to EEB 343,894 80,537 327.0 194.5 41.5

Capital reductions to EEB 0 0 0

Net debt (1) / EBITDA LTM 1.9 1.7 11.8 1.9 1.7

EBITDA LTM / Interests (2) 10.9 8.7 25.3 10.9 8.7


The increase in cost of sales is explained by higher fuel costs resulting from the operation of the Termocartagena power

plant. This is the result of compliance with new safety regulations for Colombia’s power plants and an increase in

personnel costs in production areas.

During 2012, Emgesa refinanced its debt, significantly lowering its interest expense and extending maturities. Debt also

increased in order to finance the El Quimbo project.

The financial result benefited from a lower average level of debt during the year and higher interest rates on investment of

cash surpluses.

The lower level of dividends payable to EEB in 2011 is explained by the fact that at the end of 2010, the company

decreed dividends based on an early close of the financial statements (for the period January-September 2010). As a

result, dividends decreed in 2011 correspond to results for the period October-December 2010. Dividends declared in

2012 correspond to results for the full year 2011.

The shareholders’ meeting on March 20, 2013 approved distribution of COP 783,529 million in dividends. EEB’s share is

COP 404,850 million and will be paid in during 2013/14.

Table N 14 – Overview of Codensa

Number of clients F11 2,587,848

Market share F 11 - % 23.3

Codensa´s demand 11 – Gwh 13,829

Var. of Codensa’s demand 11/ 10 - % 1.6

Operating revenues 11 - COP million 3,141,800

EBITDA LTM - COP million 1,090,892

Controlled by Endesa from Spain

EEB´s stake 51.5% -36.4% ordinary shares; 15.1% preferred non-voting shares


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Demand in Codensa’s service area grew at a slower rate that for the entire country. The Codensa service area has the

highest concentration of industry, and industrial growth was minimal in 2012 (0.7%). National demand growth was in

large part the result of mining and oil sector activity in the Caribbean and Eastern regions of Colombia.

Table No 15 – Capex F 12 F 11 Var %

Million COP 241,801 306,246 -21.0 Million USD 136.7 157.6 -13.2

Investments in 2012 were channeled principally to new client service, upgrading circuits, and increasing substation

capacity. During 2011, Nueva Esperanza substations was constructed which explains the reduction in investment amount

during 2012/11.

Table N. 16 – Selected financial indicators of Codensa

COP million

Var % USD million

F 12 F 11 F 12 F 11

Operating revenue 3,141,800 2,986,153 5.2 1,776.8 1,537.1

Cost of sales -2,236,531 -2,187,477 2.2 -1,264.8 -1,126.0

Administrative expenses -76,768 -75,231 2.0 -43.4 -38.7

Operating income 828,501 723,445 14.5 468.5 411.1

EBITDA LTM 1,090,892 976,001 11.8 616.9 502.4

Net income 510,993 457,664 11.7 289.0 235.6

Dividends and reserves declared to EEB 69,624 237,157 -70.6 39.3 122.1

Capital reductions to EEB 0 0 - 0.0 0.0

Net debt (1) / EBITDA LTM 0.5 0.7 -28.6 0.5 0.7

EBITDA LTM / Interests (2) 13.4 11.4 17.5 13.4 11.4


Operating revenues grew as a result of the increase in the number of clients and a 1.32% growth in demand in Codensa’s

service area.

Cost of sales grew moderately as a result of increased energy contract purchases to meet growing power demand.

The lower dividends in 2012 are explained by the early close of financial statements for the period January-September

2011. As a result, dividends distributed in 2012 correspond only to results for the final three months of the year (October-

December).

The March 21, 2013 shareholders’ meeting approved distribution of dividends for COP 510,992 million. EEB’s share is

COP 264,915 million, which will be paid in during 2013/14.


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Table N. 17 –Overview of Promigas

Number of clients 1,419,521 Volume of sales - Mmcfd 388 Market share - % 39.9 Network – km 532 Operating revenue F 11 - COP million 246,205 EBITDA LTM - COP million 107,508 Controlled by

EEB´s stake - % 15.6

Table N. 18 – Capex F 12 F 11 Var %

Million COP 121,112 45,539 166.0 Million USD 68.5 23.5 191.5

Table # 19 – Selected indicators of Promigas

COP million USD million

F 12 F 11 Var % F 12 F 11 Operating revenue 246,205 226,215 8.8 139.2 116 Cost of sales -125,397 -101,181 23.9 -70.9 -52.1 Administrative expenses -66,046 -55,908 18.1 -37.4 -28.8 Net income 240,868 186,508 29.1 136.2 96 Dividends and reserves declared to EEB 29,089 33,134 -12.2 16.5 17.1 Capital reductions to EEB 0 0 - 0 0 Net debt (1) / EBITDA N.A. 4.6 N.A. 4.6 EBITDA / Interests (2) N.A. 3.9 N.A. 3.9


Revenues increased principally because of receipt of indemnification for damages to a gas pipeline in the amount of COP

21,530 million.

Cost of sales increased as a result of higher maintenance expenses from the emergency on the Barranquilla gas pipeline.

Table N. 20 – Overview of Gas Natural

Number of clients 1,843,154

Volume of sales - Mm cfd 1,470

Market share - % NA

Network – km 12,656

Operating revenue 12 - COP million 1,248,613

EBITDA LTM F 11 - COP million 362,433

Controlled by Gas Natural from Spain

EEB´s stake - % 25%


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Tabla N. 21 – Capex F 12 F 11 Var %

COP Million 39,751 23,624 68.3 USD Million 22.5 12.2 84.4

Table N. 22 – Selected indicators of Gas Natural

COP million

Var % USD million

F 12 F 11 F 12 F 11

Operating revenue 1,248,613 1,101,644 13.3 706.1 488.8

Cost of sales -809,390 -663,090 22.1 -457.7 -279

Administrative expenses -111,628 -101,981 9.5 -63.1 -49

Operating income 327,594 336,573 -2.7 185.3 161.2

EBITDA LTM 362,433 368,986 -1.8 205.0 189.9

Net income 249,549 254,030 -1.8 141.1 135.3

Dividends and reserves declared to EEB 63,726 17,594 262.2 36.0 60.8

Capital reductions to EEB 0 0 0 0 0

Net debt (1) / EBITDA 0.8 0.3 166.7 0.8 0.3

EBITDA / Interests (2) 19.3 23.1 -16.5 19.3 23.1


The increase in operating revenues is the result of higher natural gas sales, as a result of increased volume and higher

prices. Cost of sales increased principally as a result of increased supply and gas transportation costs.

Net income decreased principally as a result of the commissions and banking fees for the bond issuance and a greater

expense on the exchange difference account.

Colombia’s Financial Superintendency authorized the issuance of COP 500,000 million in bonds in order to refinance

debt and up to 100% of working capital. On October 24, 2012, the first tranche in the amount of COP 300,000 million was

placed via an auction, at terms of five and seven years.

Gas Natural declared extraordinary dividends payable to EEB in 2010 in the amount of COP 47,437 million; as a result

the dividends decreed to EEB in 2012 were only COP 17,594 million, corresponding to some months of 2011. Dividends

for 2012 correspond to earnings for the full year 2011.

The March 2013 shareholders’ meeting approved distribution of dividends of COP 254,000 million; EEB’s share is COP

63,000 million.

Table N. 23 – Overview REP and CTM

REP CTM

Network - km 6,230 2,245

Voltage – kv 220,138 220,138,500

Controlled by ISA Colombia

EEB´s stake - % 40

Table N.24 – Selected indicators of REP

USD Million

F 12 F 11 Var %

Operating revenue 147.7 143.4 3.0

Cost of sales -88.5 -91.3 -3.1

Operating income 38.9 32.6 19.3

EBITDA LTM 69.8 63.3 10.3

Net income 25.1 15.5 48.5

Dividends declared to EEB 0 0 -

Capital reductions to EEB 0 0 -

Net debt (1) / EBITDA 3.48 3.3 5.5

EBITDA / Interests (2) 5.94 5.6 6.1



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The increase in operating income is principally the result of: () the start of operations in 2012 of two expansions of the

concession, and () the effect of NIIF.

Table N. 25 – Selected financial indicators of CTM

USD Million

F 12 F 11 Var %

Operating revenue 183.5 231.1 -20.6

Cost of sales -153.2 -201.4 -23.9

Operating income 25.6 26.6 -3.8

EBITDA LTM 23.8 28.3 -15.9

Net income 14.4 18.7 -23.0

Dividends declared to EEB 0 0 -

Capital reductions to EEB 0 0 -

Net debt (1) / EBITDA 3.41 3.96 -13.9

EBITDA / Interest (2) 3.11 3.00 3.7


Net income de Consorcio Transmantaro S.A. reached USD 14.4 million, below the level of 2011 (USD 17.6 million)

principally because of increased interest expense. As a result of increased investments, the company had a higher level

of debt.

Return to index

EEB consolidated financial performance

Table # 26 – EEB’s Consolidated financial results

COP million Variation USD million

F 12 F 11 % F 12 F 11

Operating revenue (1) 1,585,105 1,421,664 11.5 896.4 731.8

Electricity transmission 104,889 100,106 4.8 59.3 51.5

Electricity distribution 283,813 262,527 8.1 160.5 135.1

Natural gas transportation 702,309 626,838 12.0 397.2 322.7

Natural gas distribution 494,094 432,193 14.3 279.4 222.5

Cost of sales (2) -823,680 -704,603 16.9 -465.8 -362.7

Electricity transmission -45,422 -43,157 5.2 -25.7 -22.2

Electricity distribution -201,249 -190,698 5.5 -113.8 -98.2

Natural gas transportation -252,521 -208,905 20.9 -142.8 -107.5

Natural gas distribution -324,488 -261,843 23.9 -183.5 -134.8

Gross income 761,425 717,061 6.2 430.6 369.1

Operating expenses -202,907 -166,402 21.9 -114.7 -85.7

Allocated to electricity transmission (3) -7,455 -6,378 16.9 -4.2 -3.3

Electricity distribution -39,607 -26,120 51.6 -22.4 -13.4

Natural gas transportation -52,209 -39,161 33.3 -29.5 -20.2

Natural gas distribution -103,636 -94,743 9.4 -58.6 -48.8

Operating income 558,518 550,659 1.4 315.9 283.4

Dividends (4) 524,542 347,228 51.1 296.6 178.7

Interest temp. investments & pension trusts (5) 60,957 51,873 17.5 34.5 26.7

Net exchange difference (6) 219,365 -28,172 -878.7 124.1 -14.5

Net valuation of hedging contracts (7) -50,767 -66,672 -23.9 -28.7 -34.3

Other revenue (8) 73,172 52,640 39.0 41.4 27.1

Non-operating expenses (9) -146,716 -139,282 5.3 -83.0 -71.7

Financial expenses -324,308 -330,189 -1.8 -183.4 -170.0

Other expenses -11,234 -7,924 41.8 -6.4 -4.1

Net income before taxes and minority interest 881,690 409,216 115.5 498.7 210.6

Minority interest (10) -116,557 -46,583 150.2 -65.9 -24.0

Provision for income tax -74,432 -57,339 29.8 -42.1 -29.5

Net income 690,701 305,294 126.2 390.7 157.1


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Operating income grew at a slower rate than operating revenues as a result of an increase in the costs for transportation

and distribution of natural gas, principally as a result of: () maintenance and repair of the principal network of Cálidda; ()

increased investments in the connections and installations of Cálidda and Contugas; () increased costs of operation,

maintenance, and purchases of fuel gas by TGI; () administrative expenses associated with TGI’s debt management

operation (investment banking, rating agency, and legal fees). These debt management costs were a significant, one-time

expense that the company does not expect to recur in 2013.

The growth in net income is principally the result of: () the positive performance of operating income, especially in the

electricity transmission and natural gas transportation businesses; () higher dividends declared in EEB’s favor. In 2011,

the non-controlled affiliates declared dividends based only on the period October-December 2010, while in 2012, these

dividends were based on the full year 2011; () the exchange difference account, which was a loss in 2011 and a

significant gain in 2012. This was the result of the effect of the appreciation of the peso on the valuation of foreign

currency debt; and () a lower level of financial expense as a result of EEB’s and TGI’s debt management operations.

Table # 27 – EEB’s Financial indicators COP million USD million

F 12 F 11 Var % F 12 F 11

Consolidated adjusted EBITDA 4Q 12 176,861 353,008 -49.9 100.0 182

Consolidated adjusted EBITDA LTM 1,279,394 1,082,047 18.2 723.5 577

EBITDA LTM 1,279,394 1,082,047 18.2 723.5 577

Consolidated EBITDA margin % (1) XX 59.3 59.3

Net debt (2) / Consolidated adjusted EBITDA LTM OM: < 4.5 1.88 2.19 -14.2 1.88 2.19

Consolidated Adjusted EBITDA LTM / Interest (3) OM: > 2.25 8.82 4.78 84.5 8.82 4.78


The increase in LTM EBITDA is explained by the increase in operating income and, in large part, by the increase in

dividends received.

The leverage ratio decreased from 2.24 to 1.88 despite the disbursement of Contugas debt for USD 106 million, as a

result of: () the more than proportional increase in Consolidated EBITDA; and () a lower level of debt as a result of

Exchange rate movements (the Colombian peso appreciated 9% against the dollar in 2012).


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The interest coverage ratio improved as a result of: () the increase in EBITDA; () lower financial expenses as a result of

the debt management operations and the appreciation of the peso.

Tabla No 28 - EEB Consolidated debt structure

F 12 Share F 11 Share F 12 F 11

COP million % COP million % USD mm USD mm

Financial debt in COP 89,797.8 2.7% 213,420.2 6.0% 50.8 109.9

Financial debt in USD 2,975,251.2 90.0% 3,161,498.3 88.5% 1,682.6 1,627.4

Derivatives position 240,013.0 7.3% 198,185.5 5.5% 135.7 102.0

Total financial debt 3,305,061.9 100.0% 3,573,104.0 100.0% 1,869.1 1,839.2

Total debt decreased 7.5% in peso terms (COP 268,042 million) as a result of: () amortizations of COP 123,622 million;

and () reduction of the valuation of dollar-denominated debt as a result of the 9% appreciation of the peso.

In dollar terms, the total amount of debt increased USD 30 million as a result of the net effect of amortizations and

disbursements carried out by companies of the Group.


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Annex 1: Legal notice

This document contains projections and estimates, using words such as “anticipate,” “believe,” “expect,” “estimate”, and

others having a similar meaning. Any information other than historical information included in this report, including but not

limited to the Company’s financial condition, its business strategy, plans, and management objectives for future operations

are projections.

Such projections are based on economic, competitive, regulatory and operational scenarios and involve known and unknown

risks, uncertainties and other important factors that could cause the Company’s results, performance or actual achievements

to be materially different from the results, performance or future achievements that are expressed or implicit in the

projections. For these, reasons, the results may differ from the projections. Potential investors should not take them into

consideration and should not base their decisions on them. Such projections are based on numerous assumptions

concerning the Company’s present and future business strategies, and the environment in which the Company will operate in

the future.

The Company expressly states that it will be under no obligation to update or revise any projections contained in this

document.

The company´s previous results should not be taken as a pattern for the company´s future performance.

Clarifications

Only for information purposes, we have converted some of the figures in this report to their equivalent in USD, using the

TRM rate for the end of the period as published by the Colombian Financial Superintendency. The exchange rates used

are as follows:

− 3Q 12: 1,800.3 COP/USD

− 3Q 11: 1,915.1 COP/USD

In the figures submitted, a comma (,) is used to separate thousands and a point (.) to separate decimals.

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Annex 2: Link to EEB’s consolidated and stand alone financial statements 1Q 12

http://www.grupoenergiadebogota.com/en/investors/financial-statements

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Annex 3: overview of EEB

EEB is an integrated energy company with interests in the natural gas and electricity sectors and operations in Colombia,

Peru and Guatemala.

EEB was founded in 1896 and is controlled by the District of Bogota (76.2% ownership). The company, as a public

company in Colombia, adhered to global standards of corporate governance.

EEB has an expansion strategy focused on the transmission and distribution of energy in Colombia and other countries

within the region.

EEB participates in the entire electricity value chain and in almost all the natural gas value chain, except for exploration

and production.

EEB is one of the largest Colombian corporate debt issuers. Since 2009, EEB shares have been traded on the Colombian

stock market. In November 2011, EEB finished a Re-IPO in the Colombian stock market for approximately USD 400

million. In October 2007, EEB and TGI issued corporate bonds in the international markets for USD 1.36 billion. In 2011

and the beginning of 2012 both companies refinanced their notes extending their maturities and lowering its costs and

improving their credit ratings.

Since February 2013, EEB is part of the COLCAP stock index which comprises the most 20 liquid shares on the

Colombian market.

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Annex 4: Definitions of EBITDAs. Consolidated adjusted EBITDA reconciliation LTM and Quarterly

EBITDA is not an acknowledged indicator under Colombian or US accounting standards and may show some difficulties

as an analytical tool. Therefore, it must not be taken on its own as an indicator of the company´s cash generation.

EBITDA: EBITDA for a specific period of time (LTM; Q4) has been calculated by taking operating income (loss) and

adding amortization of intangibles and depreciation of fixed assets for that period.

EEB Consolidated EBITDA for a period, consists of operating revenues of EEB and its consolidated subsidiaries for

such period, minus the sum of (i) cost of sales, (ii) administrative expenses allocated to cost, (iii) administrative expenses

and (iv) interest income on investments of pension assets, plus dividends and interest earned (which includes dividends

declared by EEB’s related companies, whether such dividends are actually paid or not), taxes (other than income taxes),

amortization and depreciation, pension payments and provisions.

EEB Consolidated Adjusted EBITDA for a specific period is calculated taking the Consolidated EBITDA for such period

and adding the cash flows coming from investing activities during such period to the extent attributable to capital

distributions by EEB’s related companies.

LTM COP Million Variation USD Million

F 12 F 11 % F 12 F 11

Operating revenue 1,585,104 1,421,664 11.5 896.4 731.8

Operating costs -823,680 -704,602 16.9 -465.8 -362.7

Operating expenses -202,908 -166,401 21.9 -114.8 -85.7

Operating depreciation 105,233 100,961 4.2 59.5 52.0

Operating amortization 46,539 49,893 -6.7 26.3 25.7

Operating Taxes 4,522 32,233 -86.0 2.6 16.6

Dividend & interests earned 585,498 404,029 44.9 331.1 208.0

Interests in autonomous equity -18,191 -11,766 54.6 -10.3 -6.1

Administration expenses -168,555 -160,227 5.2 -95.3 -82.5

Retirement pensions 39,527 29,070 36.0 22.4 15.0

Amortization 31,691 11,116 185.1 17.9 5.7

Depreciation 5,353 1,317 306.5 3.0 0.7

Provisions 23,311 16,117 44.6 13.2 8.3

Taxes 65,950 58,645 12.5 37.3 30.2

Capital reductions - -

Consolidated adjusted EBITDA 1,279,394 1,082,049 18.2 723.5 557.0

EBITDA Quarterly COP Million Variation USD Million

4T 12 4T 11 % 4T 12 4T 11

Operating income 142,309 149,472 -4.8 80.5 76.9

Operating depreciation 29,268 28,410 3.0 16.6 14.6

Operating amortization 12,096 13,127 -7.9 6.8 6.8

Operating taxes 1,151 4,030 -71.4 0.7 2.1

Dividends & interests earned 16,298 179,656 -90.9 9.2 92.5

Interests in autonomous equity -4,903 -3,894 25.9 -2.8 -2.0

Administration expenses -76,567 -67,100 14.1 -43.3 -34.5

Retirement pensions 14,934 7,755 92.6 8.4 3.9

Amortization 13,631 1,935 604.4 7.7 1.0

Depreciation 1,433 495 189.5 0.8 0.3

Provisions 13,454 7,077 90.1 7.6 3.6


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Taxes 13,757 32,045 -57.1 7.8 16.5

Capital reductions 176,861 353,008 -49.9 100.0 181.7

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Annex 5: Tables and graphics’ footnotes

Table # 7 - EEB´s transmission business indicators

(1) Percentage of the infrastructure available in a period of time. (2) Percentage of the revenue discounted due to accumulated unavailability of specific assets above the regulatory target. (3) Ratio between the number of maintenance operations carried out and number of scheduled maintenance operations to

be executed as part of the semi-annual Maintenance Plan. (4) Ratio of the number of transmission assets owned by EEB and the total number of transmission assets in Colombia.

Return to table

Table # 8 – Selected financial indicators of EEC - DECSA

(1) Percentage of energy losses. Return to table

Table # 13 – Selected financial indicators of EMGESA

(1) It is the result of the financial debt in force at the end of the period under analysis, less cash and temporary investments in the same period.

(2) Accrued interest on financial debts for the previous twelve months.

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Table # 16 – Selected financial indicators of Codensa



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Table # 19 – Selected financial indicators of Promigas



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Table # 22 – Selected financial indicators of Gas Natural



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Table #24 – Selected financial indicators of REP


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Return to table

Table # 25 – Selected financial indicators of CTM



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Table # 26 - Consolidated results of EEB

(1) Operating revenue for transmission services rendered directly by EEB, natural gas transmission and distribution of TGI and Cálidda, respectively; as well as energy distribution services that Decsa consolidates for its participation in EEC.

(2) Cost of sales of the transmission services rendered directly by EEB, natural gas transportation and distribution services and electricity distribution services conducted by its controlled companies. It includes personnel, materials, operation and maintenance costs, depreciation, amortization and insurances related to those activities.

(3) Transmission activity is operated directly by EEB. Administrative costs are allocated by the ABC system. (4) Dividends declared by non-controlled companies and temporary investors and pension funds autonomous equity. (5) Interests of temporary investments that are generated by pension funds autonomous equity. (6) Refers to net losses or earnings due to exchange rate variations and its impact on assets and liabilities expressed in

foreign currency. (7) Valuation of hedging operations contracted by EEB and TGI to reduce currency risk. (8) Income from recovery of investments, leases and expenses. (9) Expenses are not related to operational activities. (10) Proportion of net income corresponding to minority investors in the company’s consolidated by EEB.

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Table # 27 - Financial indicators of EEB

(1) Is the result obtained when dividing consolidated EBITDA by operating income, added by dividends and accrued

interests (without including interests received from investments made to autonomous equity of pension funds) of the last 12 months.

(2) Consolidated debt less free cash.

(3) Consolidated financial expenses of the past 12 months

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Annex 6: Technical and regulatory terms

BLN: US billion (109)

CAC: Compound Annual Growth

COP: Colombian Peso

CHB: Central Hidroeléctrica de Betania

CTM: Consorcio Transmantaro

CREG: Comisión de Regulación de Energía y Gas de Colombia. (Colombia’s Energy and Gas Regulating Commission).

Colombia’s state agency in charge of regulating electric power and natural gas residential public utility services.

DANE: Departamento Administrativo Nacional de Estadística (National Administrative Statistics Department). Agency

responsible for planning, collecting, processing, analyzing, and disseminating official statistics in Colombia.

Gwh: Gigawatt hour; unit of energy equivalent to 1,000,000 kwh

GNV: Natural Gas for vehicles

IPC: Colombian Consumer Price Index

KM: Kilometers

KWH: Unit of energy equivalent to the energy produced by a power of one kilowatt (kW) for one hour

MEM: Mercado de Energía Mayorista de Colombia; Wholesale Energy Market in Colombia

Mm: million

Ml: thousands

MW: Megawatt, power unit or work which equals one million watts

N.A. Not applicable.

Non Regulated Electricity User: electricity consumers who have a peak demand greater than 0,10 MW or a minimum

monthly consumption above 55.0 MWh

Natural Gas Non Regulated User: user with consumption above 100 kcfd

CFD: Cubic feet per day

Proinversión: Peruvian agency that promotes private investment in Peru

SIN: Sistema Interconectado Nacional, National Interconnected System

STN: Sistema de Transmisión Nacional, National Transmission System

SF: Superintendencia Financiera – Financial Superintendency. State entity in charge of regulating, overseeing and

controlling the Colombian financial sector

TRM: Market Representative Exchange Rate; it is an average of the transactions carried out in peso–dollar, and it is

calculated daily by the SF

UPME: State agency responsible for planning Colombia’s mining and energy sectors

USD: US dollars

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decsa - eec tgi cÁlidda emgesa. codensa. promigas gas ...€¦ · - in july 2012, the subsidiary...

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