report unal - cfa

8/9/2019 Report Unal - Cfa

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Appendix 1.

Source: Team Estimates. CEL.CNs Reports.

BALANCE SHEET 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

ASSETS

CURRENT ASSETS

Available 30.283 53.852 233.343 299.785 200.684 270.000 329.771 338.804 285.324

Temporary Investments 180.788 530.044 451.683 444.442 697.075 187.000 153.889 185.344 218.373

Receivables, net 160.363 291.912 342.842 273.375 305.748 455.000 464.448 504.448 544.448

Inventories 8.047 8.472 20.888 8.398 10.603 77.500 79.947 82.516 84.957

Expenses paid in advance 8.086 6.895 12.518 29.536 6.068 14.800 14.988 15.181 15.380

TOTAL CURRENT ASSETS 387.567 891.175 1.061.274 1.055.536 1.220.178 1.004.300 1.043.042 1.126.292 1.148.480

NON-CURRENT ASSETS

Receivables, net 0 2.486 1.874 3.502 12.390 7.650 9.013 8.263 7.551

Inventories 43.101 45.129 38.488 47.298 46.605 0 52.447 55.016 57.457

Permanent, net investment 1.627.957 204.938 101.812 102.606 101.060 96.007 91.207 95.767 100.555

Property, plant and equipment , net 818.905 3.053.296 3.202.796 3.268.328 3.342.856 5.170.182 5.236.354 5.246.370 5.257.272

Deferred, net charges 16.343 56.061 67.139 63.757 31.177 32.300 33.985 35.721 37.508

Assets acquired under finance leases, leasing 60.591 6.513 29.320 71.276 163.309 235.000 253.781 270.307 281.463

Intangibles, net 80.106 536.133 424.826 285.521 268.127 270.000 278.205 286.656 295.360

Other assets 10.507 28.146 768 825 810 810 835 860 887

Va luat ions and deva lua tions, net 627.039 1.919.994 1.867.730 1.941.359 2.140.033 2.250.000 2.491.195 2.608.722 2.734.533

TOTAL NON-CURRENT ASSETS 3.284.549 5 .852.696 5 .734.753 5 .784.472 6 .106.367 8 .061.949 8 .447.020 8 .607.682 8 .772.587

TOTAL ASSETS 3.672.116 6.743.871 6.796.027 6.840.008 7.326.545 9.066.249 9.490.062 9.733.974 9.921.067

LIABILITIES AND STOCKHOLDERS 'EQUITY

CURRENT LIABILITIES

Financial obligations 714.378 27.907 98.713 130.877 33.845 39.424 39.424 39.424 39.424

Bonds -- 9.320 10.638 9.891 11.607 11.607 11.607 83.620 85.754

Suppliers and accounts payable 109.993 367.554 338.862 193.550 205.777 273.199 343.840 410.829 479.337

Taxes, fees and charges 0 0 74.672 51.931 93.269 50.000 52.882 55.850 58.908

Employment and comprehensive social security obligations 1.678 7.036 9.176 11.100 13.656 18.951 24.860 27.569 30.684

Estimated liabilities and provisions 10.185 67.908 90.069 36.198 35.329 2 30.000 2 78.476 2 83.831 2 95.786

Retirement pensions -- 999 686 -- -- -- -- -- --

Other liabilities 23 12.169 9.607 9.184 13.711 21.000 21.025 21.050 21.077

TOTAL CURRENT LIABILITIES 836.257 492.893 632.423 442.731 407.194 644.181 772.114 922.173 1.010.970

NON-CURRENT LIABILITIES

Financial obligations 395.097 1.212.304 1.154.459 975.577 340.707 960.330 960.330 960.309 960.307

Bonds 0 600.000 600.000 600.000 1.400.000 1.988.000 1.988.000 1.904.380 1.818.626

Taxes, fees and charges -- -- 27.694 13.847 0 0 2.000 4.400 5.840

Es timated liabili ties and provisions 138.408 160.168 164.177 314.217 151.258 182.311 186.985 191.799 196.757

Retirement pensions -- 73.361 75.994 80.149 80.864 83.290 85.789 88.362 93.321

Other liabilities -- 42.019 40.993 40.075 36.040 40.975 42.204 43.471 44.775

TOTAL NON-CURRENT LIABILITIES 533.505 2.087.852 2.063.317 2.023.865 2.008.869 3.254.906 3.265.308 3.192.721 3.119.626

TOTAL LIABILITIES 1.369.762 2.580.745 2.695.740 2.466.596 2.416.063 3.899.087 4.037.421 4.114.894 4.130.596

MINORITY INTEREST 10.622 1.478.198 1.449.745 1.468.001 1.622.157 1.667.128 1.671.491 1.704.234 1.725.262

SHAREHOLDERS 'EQUITY 2.291.732 2.684.928 2.650.542 2.905.411 3.288.325 3.500.034 3.781.150 3.914.847 4.065.209

TOTAL LIABILITIES AND SHAREHOLDERS 'EQUITY 3.672.116 6.743.871 6.796.027 6.840.008 7.326.545 9.066.248 9.490.062 9.733.974 9.921.067


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Appendix 2.


INCOME STATEMENT 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

Revenue 1.891.637 1.803.939 1.849.505 2.023.672 2.381.116 2.678.462 3.204.217 3.272.458 3.375.665

Net Sales 1.891.637 1.803.939 1.849.505 2.023.672 2.381.116 2.678.462 3.204.217 3.272.458 3.375.665

Total Revenue 1.891.637 1.803.939 1.849.505 2.023.672 2.381.116 2.678.462 3.204.217 3.272.458 3.375.665

Cost of Revenue, Total 537.584 1.083.789 1.162.762 1.311.372 1.540.165 1.607.077 1.762.319 1.799.852 1.856.616

Cost of Revenue 537.584 1.083.789 1.162.762 1.311.372 1.540.165 1.607.077 1.762.319 1.799.852 1.856.616Gross Profit 1.354.053 720.150 686.743 712.300 840.951 1.071.385 1.441.898 1.472.606 1.519.049

Cost-Revenue Relation 28,42% 60,08% 62,87% 64,80% 64,68% 60,00% 55,00% 55,00% 55,00%

Selling/General/Admin. Expenses, Total 85.727 131.328 76.529 90.497 94.520 102.241 110.648 104.544 99.200

Selling/General/Administrative Expense 85.727 131.328 37.112 59.287 59.906 65.897 72.486 65.238 58.714

Labor & Related Expense -- -- 39.417 29.792 32.848 34.490 36.215 37.301 38.420

Advertising Expense -- -- -- 1.418 1.766 1.854 1.947 2.005 2.066

Depreciation/Amortization 34.586 26.517 28.268 28.435 25.992 27.758 29.919 29.713 30.223

Depreciation 5.106 7.247 5.783 5.867 5.936 6.055 8.477 8.646 8.819

Amortization of Intangibles -- -- 22.485 22.568 20.056 21.703 21.442 21.067 21.404

Amortization of Acquisition Costs 29.480 19.270 -- -- -- -- -- -- --

Unusual Expense (Income) 573 -17.063 -1.572 1.453 4.322 0 0 0 0

Impairment-Assets Held for Use -- -- -- 880 4.322 0 0 0 0

Impairment-Assets Held for Sale -- -- 392 -- -- 0 0 0 0

Other Unusual Expense (Income) 573 -17.063 -1.964 573 -- 0 0 0 0

Total Operating Expense 658.470 1.224.571 1.265.987 1.431.757 1.664.999 1.737.076 1.902.886 1.934.110 1.986.039

Operating Income 1.233.167 579.368 583.518 591.915 716.117 941.386 1.301.330 1.338.348 1.389.626

Interest Expense, Net Non-Operating -83.702 -110.311 -118.213 -136.995 -121.326 -147.581 -149.939 -152.215 -152.936

Interest Expense - Non-Operating -83.702 -110.311 -118.213 -136.995 -121.326 -147.581 -149.939 -152.215 -152.936

Interest/Invest Income - Non-Operating -16.956 150.811 65.142 48.089 4.573 0 0 0 0

Interest Income - Non-Operating 2.369 14.628 18.663 0 0 0 0 0 0

Investment Income - Non-Operating -19.325 136.183 46.479 48.089 4.573 0 0 0 0

Interest Income(Exp), Net Non-Operating 0 0 0 27.332 15.257 0 0 0 0

Interest Inc.(Exp.),Net-Non-Op., Total -100.658 40.500 -53.071 -61.574 -101.496 -147.581 -149.939 -152.215 -152.936

Gain (Loss) on Sale of Assets 3.275 -1.729 159 -18.663 -6.024 0 0 0 0

Other, Net -67.222 -59.693 -143.227 1.480 100.864 0 0 0 0

Other Non-Operating Income (Expense) -67.222 -59.693 -143.227 1.480 100.864 0 0 0 0

Net Income Before Taxes 1.068.562 558.446 387.379 513.158 709.461 793.805 1.151.391 1.186.133 1.236.690

Taxes- Net Income Before Taxes Relation 0,56% 27,42% 35,32% 27,71% 27,43% 27,57% 27,50% 27,53% 27,52%

Provision for Income Taxes 6.031 153.149 136.830 142.193 194.597 218.845 316.621 326.591 340.294

Net Income After Taxes 1.062.531 405.297 250.549 370.965 514.864 574.960 834.770 859.543 896.396

Minority Interest -626 -146.287 -97.658 -140.205 -141.219 -145.456 -149.819 -154.314 -158.943

Net Income Before Extra. Items 1.061.905 259.010 152.891 230.760 373.645 429.504 684.951 705.229 737.453

Net Income 1.061.905 259.010 152.891 230.760 373.645 429.504 684.951 705.229 737.453

Normalized EBIT 1.233.740 562.305 581.946 593.368 720.439 941.386 1.301.330 1.338.348 1.389.626

Normalized EBITDA 1.286.154 682.706 713.033 731.341 851.535 1.021.842 1.083,152,52 1.131.268 1.160.315


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Appendix 3.

Operational Free Cash Flow


Appendix 4.

Free Cash Flow Equity


2009 2010 2011 2012 2013 2014 F 2015 F 2016 F 2017FReceivables 160.363,00 294.398,00 344.716,00 276.877,00 318.138,00 462.650,00 473.460,51 512.710,92 551.998,80Inventory 51.148,00 53.601,00 59.376,00 55.696,00 57.208,00 77.500,00 132.393,53 137.531,73 142.413,02Payable 109.993,00 367.554,00 338.862,00 193.550,00 205.777,00 273.198,65 343.839,67 410.828,72 479.337,39Properties, Plans and Equipment 818.905,00 3.053.296,00 3.202.796,00 3.268.328,00 3.342.856,00 5.170.181,68 5.236.354,29 5.246.369,84 5.257.272,21

Operating taxes Payable - - 74.672,00 51.931,00 93.269,00 50.000,00 52.882,01 55.850,48 58.908,01Net Operating Assets N.O.A 1.140.409,00 3.768.849,00 4.020.422,00 3.846.382,00 4.017.248,00 6.033.530,33 6.238.930,02 6.363.291,69 6.489.929,43

Revenues 1.891.637,00 1.803.939,00 1.849 .505 ,00 2.023 .672,00 2.381.116,00 2.678.461,90 3.204.216,89 3.272.457 ,87 3.375 .665,04

Cost of Revenues 537.584,00 1.083.789,00 1.162.762,00 1.311.372,00 1.540.165,00 1.660.646,37 1.762.319,29 1.799.851,83 1.856.615,77

Co st o f Taxes 6.031,00 153.149,00 136.830,00 142.193,00 194.597,00 188.439,21 236.915,70 242.270,11 254.225,54

NOPAT 1.348.022,00 567.001,00 549.913,00 570.107,00 646.354,00 829.376,31 1.204.981,90 1.230.335,93 1.264.823,72

Variation of N.O.A 2.628.440,00 251.573,00 174.040,00- 170.866,00 2.016.282,33 205.399,69 124.361,67 126.637,74

Operational FCF 2.061.439,00- 298.340,00 744.147,00 475.488,00 1.186.906,02- 999.582,21 1.105.974,26 1.138.185,98

2009 2010 2011 2012 2013 2014 F 2015 F 2016 F 2017F

Liabilities 395.097,00 1.812.304,00 1.754.459,00 1 .575.577,00 1.740.707,00 2.948.330,00 2 .948.330,00 2.864.689,00 2.778.933,00

Cash 211.071,00 583.896,00 685.026,00 744.227,00 897.759,00 457.000,00 483.659,84 524.148,22 503.696,80

Paying and Subscribed Capital 180,00 180,00 180,00 180,00 180,00 180,00 180,00 180,00 180,00

Net Income 1.061.905,00 259.010,00 152.891,00 230.760,00 373.645,00 390.703,48 684.951,23 705.228,92 737.452,83

Retained Earnings 615.530,00 811.378,00 1.843.925,00 1.929.817,00 2.088.618,00 2.345.747,48 2.614.616,02 3.085.975,61 3.571.289,61

NFO 2.737.259,00 2.364.434,00 2.179.663,00 2.034.706,00 842.948,00 2.491.330,00 2.464.670,16 2.340.540,78 2.275.236,20

Patrimonio 2.291.732,00 2.684.928,00 2.650.542,00 2.905.411,00 3.288.325,00 3.500.033,98 3.781.149,80 3.914.846,90 4.065.209,12

Gastos Financieros 83.702,00 110.311,00 118.213,00 136.995,00 121.326,00 147.581,00 149.939,00 152.215,00 152.936,00

FCFE 1.264.320,00 456.690,00 431.700,00 433.112,00 525.028,00 681.795,31 1.055.042,90 1.078.120,93 1.111.887,72


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Appendix 5.


COMMON SIZE

BALANCE SHEET 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

ASSETS

CURRENT ASSETS

Available 0,8% 0,8% 3,4% 4,4% 2,7% 3,0% 3,5% 3,5% 2,9%

Temporary Investments 4,9% 7,9% 6,6% 6,5% 9,5% 2,1% 1,6% 1,9% 2,2%

Receivables, net 4,4% 4,3% 5,0% 4,0% 4,2% 5,0% 4,9% 5,2% 5,5%

Inventories 0,2% 0,1% 0,3% 0,1% 0,1% 0,9% 0,8% 0,8% 0,9%

Expenses paid in advance 0,2% 0,1% 0,2% 0,4% 0,1% 0,2% 0,2% 0,2% 0,2%

TOTAL CURRENT ASSETS 0,10554323 0,13214591 0,15616095 0,15431795 0,16654207 0,11077349 0,10990884 0,11570735 0,11576179

NON-CURRENT ASSETS

Receivables, net 0,0% 0,0% 0,0% 0,1% 0,2% 0,1% 0,1% 0,1% 0,1%

Inventories 1,2% 0,7% 0,6% 0,7% 0,6% 0,0% 0,6% 0,6% 0,6%Permanent, net investment 44,3% 3,0% 1,5% 1,5% 1,4% 1,1% 1,0% 1,0% 1,0%

Property, plant and equipment, net 22,3% 45,3% 47,1% 47,8% 45,6% 57,0% 55,2% 53,9% 53,0%

Deferred, net charges 0,4% 0,8% 1,0% 0,9% 0,4% 0,4% 0,4% 0,4% 0,4%

Assets acquired under finance leases, leasing 1,7% 0,1% 0,4% 1,0% 2,2% 2,6% 2,7% 2,8% 2,8%

Intangibles, net 2,2% 7,9% 6,3% 4,2% 3,7% 3,0% 2,9% 2,9% 3,0%

Other assets 0,3% 0,4% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Valuations and devaluations, net 17,1% 28,5% 27,5% 28,4% 29,2% 24,8% 26,3% 26,8% 27,6%

TOTAL NON-CURRENT ASSETS 0,89445677 0,86785409 0,84383905 0,84568205 0,83345793 0,88922651 0,89009116 0,88429265 0,88423821

0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

TOTAL ASSETS 100% 100% 100% 100% 100% 100% 100% 100% 100%

LIABILITIES AND STOCKHOLDERS 'EQUITY

CURRENT LIABILITIES

Financial obligations 19,5% 0,4% 1,5% 1,9% 0,5% 0,4% 0,4% 0,4% 0,4%

Bonds 0,0% 0,1% 0,2% 0,1% 0,2% 0,1% 0,1% 0,9% 0,9%

Suppliers and accounts payable 3,0% 5,5% 5,0% 2,8% 2,8% 3,0% 3,6% 4,2% 4,8%

Taxes, fees and charges 0,0% 0,0% 1,1% 0,8% 1,3% 0,6% 0,6% 0,6% 0,6%Employment and comprehensive social security obligations 0,0% 0,1% 0,1% 0,2% 0,2% 0,2% 0,3% 0,3% 0,3%

Estimated liabilities and provisions 0,3% 1,0% 1,3% 0,5% 0,5% 2,5% 2,9% 2,9% 3,0%

Retirement pensions 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Other liabilities 0,0% 0,2% 0,1% 0,1% 0,2% 0,2% 0,2% 0,2% 0,2%

TOTAL CURRENT LIABILITIES 22,8% 7,3% 9,3% 6,5% 5,6% 7,1% 8,1% 9,5% 10,2%

NON-CURRENT LIABILITIES 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Financial obligations 10,8% 18,0% 17,0% 14,3% 4,7% 10,6% 10,1% 9,9% 9,7%

Bonds 0,0% 8,9% 8,8% 8,8% 19,1% 21,9% 20,9% 19,6% 18,3%

Taxes, fees and charges 0,0% 0,0% 0,4% 0,2% 0,0% 0,0% 0,0% 0,0% 0,1%

Estimated liabilities and provisions 3,8% 2,4% 2,4% 4,6% 2,1% 2,0% 2,0% 2,0% 2,0%

Retirement pensions 0,0% 1,1% 1,1% 1,2% 1,1% 0,9% 0,9% 0,9% 0,9%

Other liabilities 0,0% 0,6% 0,6% 0,6% 0,5% 0,5% 0,4% 0,4% 0,5%

TOTAL NON-CURRENT LIABILITIES 14,5% 31,0% 30,4% 29,6% 27,4% 35,9% 34,4% 32,8% 31,4%

TOTAL LIABILITIES 37,3% 38,3% 39,7% 36,1% 33,0% 43,0% 42,5% 42,3% 41,6%

MINORITY INTEREST 0,3% 21,9% 21,3% 21,5% 22,1% 18,4% 17,6% 17,5% 17,4%

SHAREHOLDERS 'EQUITY 62,4% 39,8% 39,0% 42,5% 44,9% 38,6% 39,8% 40,2% 41,0%

TOTAL LIABILITIES AND SHAREHOLDERS 'EQUITY 100% 100% 100% 100% 100% 100% 100% 100% 100%


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Appendix 6.


INCOME STATEMENT 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

Revenue 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 100,0%

Cost of Revenue, Total 28,4% 60,1% 62,9% 64,8% 64,7% 60,0% 55,0% 55,0% 55,0%

Cost of Revenue 28,4% 60,1% 62,9% 64,8% 64,7% 60,0% 55,0% 55,0% 55,0%

Gross Profit 71,6% 39,9% 37,1% 35,2% 35,3% 40,0% 45,0% 45,0% 45,0%

Cost-Revenue Relation 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Selling/General/Admin. Expenses, Total 4,5% 7,3% 4,1% 4,5% 4,0% 3,8% 3,5% 3,2% 2,9%

Selling/General/Administrative Expense 4,5% 7,3% 2,0% 2,9% 2,5% 2,5% 2,3% 2,0% 1,7%

Labor & Related Expense 0,0% 0,0% 2,1% 1,5% 1,4% 1,3% 1,1% 1,1% 1,1%

Advertising Expense 0,0% 0,0% 0,0% 0,1% 0,1% 0,1% 0,1% 0,1% 0,1%

Depreciation/Amortization 1,8% 1,5% 1,5% 1,4% 1,1% 1,0% 0,9% 0,9% 0,9%

Depreciation 0,3% 0,4% 0,3% 0,3% 0,2% 0,2% 0,3% 0,3% 0,3%

Amortization of Intangibles 0,0% 0,0% 1,2% 1,1% 0,8% 0,8% 0,7% 0,6% 0,6%

Amortization of Acquisition Costs 1,6% 1,1% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Unusual Expense (Income) 0,0% -0,9% -0,1% 0,1% 0,2% 0,0% 0,0% 0,0% 0,0%

Impairment-Assets Held for Use 0,0% 0,0% 0,0% 0,0% 0,2% 0,0% 0,0% 0,0% 0,0%

Impairment-Assets Held for Sale 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Other Unusual Expense (Income) 0,0% -0,9% -0,1% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Total Operating Expense 34,8% 67,9% 68,5% 70,8% 69,9% 64,9% 59,4% 59,1% 58,8%

Operating Income 65,2% 32,1% 31,5% 29,2% 30,1% 35,1% 40,6% 40,9% 41,2%

Interest Expense, Net Non-Operating -4,4% -6,1% -6,4% -6,8% -5,1% -5,5% -4,7% -4,7% -4,5%

Interest Expense - Non-Operating-4,4% -6,1% -6,4% -6,8% -5,1% -5,5% -4,7% -4,7% -4,5%

Interest/Invest Income - Non-Operating -0,9% 8,4% 3,5% 2,4% 0,2% 0,0% 0,0% 0,0% 0,0%

Interest Income - Non-Operating 0,1% 0,8% 1,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Investment Income - Non-Operating -1,0% 7,5% 2,5% 2,4% 0,2% 0,0% 0,0% 0,0% 0,0%

Interest Income(Exp), Net Non-Operating 0,0% 0,0% 0,0% 1,4% 0,6% 0,0% 0,0% 0,0% 0,0%

Interest Inc.(Exp.),Net-Non-Op., Total -5,3% 2,2% -2,9% -3,0% -4,3% -5,5% -4,7% -4,7% -4,5%

Gain (Loss) on Sale of Assets 0,2% -0,1% 0,0% -0,9% -0,3% 0,0% 0,0% 0,0% 0,0%

Other, Net -3,6% -3,3% -7,7% 0,1% 4,2% 0,0% 0,0% 0,0% 0,0%

Other Non-Operating Income (Expense) -3,6% -3,3% -7,7% 0,1% 4,2% 0,0% 0,0% 0,0% 0,0%

Net Income Before Taxes 56,5% 31,0% 20,9% 25,4% 29,8% 29,6% 35,9% 36,2% 36,6%

Taxes- Net Income Before Taxes Relation 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0%

Provision for Income Taxes 0,3% 8,5% 7,4% 7,0% 8,2% 8,2% 9,9% 10,0% 10,1%

Net Income After Taxes 56,2% 22,5% 13,5% 18,3% 21,6% 21,5% 26,1% 26,3% 26,6%

Minority Interest 0,0% -8,1% -5,3% -6,9% -5,9% -5,4% -4,7% -4,7% -4,7%Net Income Before Extra. Items 56,1% 14,4% 8,3% 11,4% 15,7% 16,0% 21,4% 21,6% 21,8%

Net Income 56,1% 14,4% 8,3% 11,4% 15,7% 16,0% 21,4% 21,6% 21,8%


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Appendix 7.


Appendix 8. Residual Income Model.

Source: Team Estimates.

PROFITABILITY RATIOS 2010 2011 2012 2013 2014F 2015F 2016F 2017FEBITDA Margin 37,8% 38,6% 36,1% 35,8% 39,7% 44,8% 45,4% 46,0%Operating Profit Margin 32,1% 31,5% 29,2% 30,1% 35,1% 40,6% 40,9% 41,2%Core Operating Margin 39,9% 37,1% 35,2% 35,3% 40,0% 45,0% 45,0% 45,0%Net Profit Margin 14,4% 8,3% 11,4% 15,7% 16,0% 21,4% 21,6% 21,8%Return of Equity 10,4% 5,7% 8,3% 12,1% 12,7% 18,8% 18,3% 18,5%Return of Assets 5,0% 2,3% 3,4% 5,3% 5,2% 7,4% 7,3% 7,3%LIQUIDITYCurrent Ratio 1,81 1,68 2,38 3,00 1,56 1,38 1,42 1,63Quick Ratio 1,79 1,65 2,37 2,97 1,44 1,28 1,33 1,54Cash Ratio 1,18 1,08 1,68 2,20 0,71 0,65 0,77 0,99ACTIVITYDSO 17,7 17,8 16,1 13,4 15,3 21,8 27,4 27,6DOH 46,1 63,2 56,2 45,7 53,3 53,5 55,1 57,7Days of Payables 80,6 111,2 74,3 47,4 54,5 64,1 76,7 87,7Cash Convertion Cycle -16,8 -30,2 -2,0 11,7 14,1 11,2 5,9 -2,4Total Asset Turnover 0,35 0,27 0,30 0,34 0,33 0,34 0,34 0,33Fixed Asset Turnover 0,93 0,59 0,63 0,72 0,63 0,62 0,62 0,64FINANCIAL LEVERAGEAsset to Equity 2,51 2,56 2,35 2,23 2,59 2,52 2,53 2,56

Debt to equity 0,96 1,02 0,85 0,73 1,11 1,07 1,05 1,02Debt to Assets 0,38 0,40 0,36 0,33 0,43 0,42 0,41 0,40Long-term debt to Assets 0,31 0,30 0,30 0,27 0,36 0,34 0,32 0,30Long-term debt to Equity 0,78 0,78 0,70 0,61 0,93 0,86 0,82 0,77Interest Coverage (14,5) 11,5 10,1 7,4 6,6 8,9 9,0 9,3CASH FLOWOCF/EARNINGS -1,14 0,16 0,37 0,20 -0,42 0,31 0,34 0,34SHAREHOLDER RATIOSEarnings per Share 360,24$ 212,35$ 320,50$ 518,95$ 596,53$ 951,32$ 979,48$ 1.024,24$Dividend per Share 81,67$ 89,95$ 99,94$ 111,94$ 123,13$ 135,44$ 148,99$ 163,88$Dividend Payout Ratio 22,7% 42,4% 31,2% 21,6% 20,6% 14,2% 15,2% 16,0%

2009 2010 2011 2012 2013 2014 F 2015 F 2016 F 2017F

Net Income 259.010,00 152.891,00 230.760,00 373.645,00 390.703,48 684.951,23 705.228,92 737.452,83Equity 2.291.732,00 2.684.928,00 2.650.542,00 2.905.411,00 3.288.325,00 3.500.033,98 3.781.149,80 3.914.846,90 4.065.209,12Residual Income 16.219,40- 158.320,82- 80.653,97- 42.676,04 79.114,75- 184.885,16 172.615,12 186.963,64Ke 12,01% 11,59% 11,75% 11,39% 16,79% 14,29% 14,09% 14,06%

RESIDUAL INCOMEPresent Va lue RI 14-17 324.305,26 G 2,80%PVPRI2014 1.071.352,86EV 4.683.983,12PR STOCK 6.505,53


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Appendix 9. DCF Model.


Appendix 10. Relative Price Value.


2014 2015 2016 2017 2018

Residual Value 12.581.171,26

Operational FCF 1.186.906,02- 999.582,21 1.105.974,26 1.138.185,98

Vpn 1.047.678,45- 778.828,58 760.641,58 690.971,22 6.741.856,15

WACC 13,289%

Value Firm 7.924.619,08

PV Debt 3.054.789,23 G 2,80%

Equity Value 4.869.829,85

Shares 719.584.500

Stock Price 6.767,56

P/E Average 14,82 Projected Sales 14 2.678.461.895.135,78

CEL.CN Actual Price 5.800,00 Sales 2014F 3.722,23

Net Income 2014F 390.703.478.485,69 CEL.CNs P/S 1,56

Number of Shares 719.584.500,00 Average P/S 1,38

EPS 542,96 Comparative Ratio 0,13-

CEL.CNs P/E 10,68 Price P/S 5.029,56

Comparative Ratio 0,39

Price P/E 8.048,47

CEL.CNs Equity 3.517.084.551.083,75 Average EV/EBITDA 9,93

Book Value PS 4.887,66 CEL.CNs EV/EBITDA 8,26

CEL.CNs P/B 1,19 Comparative Ratio 0,20

Average P/B 1,50 Price EV/EBITDA 6.968,88

Comparative Ratio 0,27

Price P/B 7.350,98

Precio Promedio 6.849,47


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Appendix 13. WACC


Appendix 14. Build Up Method (Cost of Equity).


Appendix 15.


Costs 2013 2014 F 2015 F 2016 F 2017 F

Bonds 7,81% 7,85% 7,86% 7,86% 7,86%

LT Debts 11,78% 11,80% 11,81% 11,81% 11,81%

ST Debts 15,47% 13,00% 12,00% 12,00% 12,00%

Equity 11,39% 16,79% 14,29% 14,09% 14,06%

WACC 10,68% 13,29% 12,04% 12,02% 12,10%

Weight 2013 2014 F 2015 F 2016 F 2017 F

Bonds 20,95% 30,64% 29,37% 27,93% 26,42%

LT Debts 5,10% 14,80% 14,19% 14,08% 13,95%

ST Debts 0,46% 0,61% 0,58% 0,58% 0,57%

Equity 73,49% 53,95% 55,86% 57,41% 59,06%

2010 2011 2012 2013 2014 2015 2016 2017

Sector Prime 2,00% 2,00% 2,00% 2,00%

Prime 3,36% -1,06% 3,10% 2,74% 5,60% 3,10% 2,86% 2,79%

Debt Cost 8,65% 8,65% 8,65% 8,65% 9,19% 9,19% 9,23% 9,27%

Equity Cost 12,01% 7,59% 11,75% 11,39% 16,79% 14,29% 14,09% 14,06%

BONDS

CELSIA Periodicity Maturity Yield

E3 IBR+ 2,17% Monthly 2016 5,9%

D6 IPC + 4,30% Quarterly 2019 6,4%

D12 IPC + 5,00% Quarterly 2025 7,2%

D20 IPC + 5,33% Quarterly 2033 8,3%

EPSA Periodicity Maturity Yield

7 aos IPC + 4,58% Quarterly 2017 7,30%




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Appendix 16. Revenues Projection.

2014 2015 2016 2017

Total Revenues 2.678.461,90 3.204.216,89 3.272.457,87 3.375.665,04

Energy Exchange Sales 1.088.165,26 965.738,55 958.089,17 956.919,23

Contract Energy Sales 276.940,62 293.557,06 299.209,68 308.475,08


To project the sales in the Energy Exchange, we took into account a study realized by the UPME. Then, we

computed the historic average of sales from CEL.CN. The prices from the Energy Exchange were estimated

with an ARIMA with the characteristics of AR(1,12)I MA(13) DLX.

To project the energy sales by contracts, we assumed that CEL.CNs market share within this market

segment would remain unchanged, as of 2013. Demand was forecasted based on the cited UPME study.

Finally we determined an average price out of the historical prices of contracts.

Appendix 17. Weight Index


The index was constructed based on the sensibility of each model to the changes in the key drivers

of the sector. By changing the key drivers, Ceteris Paribus leaving the rest constant we

determined the sensitiveness of each model. If the model was very sensitive we ranked it with a 3.

On the contrary, we ranked the model with a 1.

Drivers Electrcity Prices GDP Growth Increase Infraestructure Ambiental Factors Fuel Prices (Costs) TOTAL

Multiplos 3 1 1 2 2 9 0,3

FCFF 1 3 3 3 1 11 0,36666667

RI 2 2 2 1 3 10 0,33333333

3 Lowest Sensitive

2 Neutral Sensitive1 Most Sensitive


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Appendix 18. Starmine 1

Starmine: Shows how the company performs in contrast to its peers, in the key financial Ratios. Fundamentals


0,0

2,0

4,0

6,0

8,0

10,0

12,0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Celsia SA ESP

Empresa de

Energia de Bogota

SA ESP

Isagen SA ESP


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Appendix 19. Starmine 2

Starmine: Shows how the company performs compared to its peers, by comparing a mix between the fundamentals ratios and

Market factors.


Appendix 20

Colombian last three years GDP percentage growth rate was higher than the Worldsand Latin America & Caribbeans

average, it was as well higher than Brazil GDP growth, which is the biggest economy in the region.

Moreover, for the next two years, according to the IMF, this behaviour is expected to continue.

Source: Team estimates. World Bank Database

8,0

6,1

7,4

3,6

3,9

0,0

2,0

4,0

6,0

8,0

10,0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Celsia SA ESP

CompetitorsAverage

6,6%

4,0%

4,3%4,80% 4,50%

2,7%

1,0%

2,5%

0,30%

1,40%

4,3%

2,8%2,4%

1,30%

2,20%

2,8%2,4%

2,2%

3,30%3,80%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

2011 2012 2013 2014* F 2015* F

Colombia Brazil Latin America & Caribbean World Avarage


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Appendix 21. CEL.CNs Organizational Mapping

Source: Team estimates.


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Appendix 22. ARG.CNs Subsidiaries Geographical Location

Source: Team Estimates


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Vice president of Generation Projects for Celsia since 2012. Civil Engineer from the National University of Colombia and ManagementSpecialist from the Pontificia Bolivariana University. He has served as Water manager for EPM, Water Projects assistant manager,Energy Generation Projects assistant manager and Deputy Head of the EnergyGeneration Projects, also in that company. Electronic Engineer from the Pontificia Bolivariana University, Specialist inManagement from the same university and Specialist in Economic Regulationand Industrial Organization from the Eafit University. He was vice president of Energy with Colinversiones since the beginning ofthe transformation of the company. He was president of the National Councilfor Electrical Operation in 3 different years of Acolgen (Colombian Associationof Generators). Currently belongs to boards of directors of: Andesco (NationalAssociation of utilities and communications) board of directors, Acolgen andEPSA. Graduated from Administrative Engineering from the Escuela de Ingenierade Antioquia, held a Global MBA with emphasis in International Business atThunderbird School of Global Management / Tecnolgico de Monterrey.

Worked at Procter & Gamble, where he served as manufacturing cost analyst,and later as Plant Finance Manager. Later joined Compania Colombiana deInversiones S.A. E.S.P.(now Celsia S.A. E.S.P.) as Project Manager and later asManager of Financial Planning. Obtained his law degree at the Universidad Pontificia Bolivariana, specializedin Commercial Law at the Universidad de los Andes. During 2006 and 2007, he served as lawyer in Cementos Argos S.A., where heparticipated in the negotiation of different types of contracts, care ofprocesses and claims, acquisition of companies and matters related to some

financing forms. In 2008 he joined Comp aia Colombiana de Inversiones S.A. as CorporateLegal Manager and General Secretary. He later became Legal Vice President of Celsia S.A. E.S.P. and since 2012 hasbeen in charge of the Vice Presidency of Corporate Affairs.

Source: CEL.CN's Reports

Alberto Gutirrez P. (Chief Project DevelopmentOfficer)

Rafael Prez C. (Chief Regulation Officer)

Esteban Piedrahita (Financial Vice-President)

Rafael Jos Olivella (Vice-Preside nt of Corporate Affairs)

Appendix 23. CEL.CNs Corporate Management

Celsia's president since June 2006.

Business Manager from the University EAFIT. He was General Manager of Ramon H. Londoo SA, President of Coninsa &Ramon H.S.A, of Colinversiones S.A.EPSA S.A E.S.P, Smurfit Kappa Carton de Colombia S.A, Urbansa S.A and SitumS.A.S.

Part of the Boards of Directors of Higher Education of Antioquia, Andesco,Acolgen, Finance Council of the Archidiocese of Medelln and Celsia and EPSAFoundations.

Part of Celsia's management Committee since 2011. Electrical Engineer from the Pontificia Bolivariana University, Specialist inFinance and Project Evaluation from the Antioquia University and Master inManagement from Eafit University. She has served as Manager of Corporate Development at UNE and Directorof Institutional Finance at EPM. Electrical Engineer from the Universidad Nacional de Colombia, Master inElectric Power Generation Systems in the Universidad del Valle, Executive MBAin Business Administration at the Universidad de los Andes and MBA -Executive Development Program at the Universidad ESADE in Madrid, Spain. He was EPSA's Manager of Business Operations and Operational Director. He also served as Manager of Electrocosta S.A. E.S.P., Electricaribe S.A. E.S.P. and

former professor at the Universidad del Valle

Graduated from Social Work at the Universidad Pontificia Bolivariana,specialized in Management from the same University. Served as National Coordinator of Social Welfare at Solla SA, later joined asRegional Coordinator of Labour Welfare at Almacenes xito S.A., where sheserved as Regional Training Coordinator, Head of Department of LabourWelfare, Head of Personal Training, Regional Chief of Human Managementand finally, National Director of Human Resources.

Managment Team

Germn Garcia (Chief Operation Officer)

Claudia Salzar (Human Resources and Administration)

Juan Guillermo Londoo P. (CEO)

Ana Mara Calle (Chief Development Office)


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Electrical engineer graduated from Universidad de los Andes,

with a master in Control Systems from Northwestern University (Evanston, USA).

He has an experience of over 35 years in the energy sector in Colombia, Latin

America and Eastern Europe, with emphasis on the design, development and

operation of energy markets (electricity, natural gas and petroleum), reforming and

privatizing of electricity sectors, preparation of national energy plans and evaluation

of projects for generation, transmission and distribution of electricity.

Graduated from Colegio Mayor de Nuestra Seora del Rosario, with experience in

the publi c, private and academic sector, with emphasis on the study and practice of

corporate and bussines law and aeronautic law.

Currently she is an alternate member of the Board of Directors of Casa Editorial El

Tiempo S.A., CEETV S.A. and Soprinsa S.A.

Public Accountant from Universidad Javeriana de Cali

She has more than 27 years working in Mac S.A., today EMA Holdings S.A., w ith

formation at External Auditing, Certified Management Systems, Corporate

Governance and Corporate Social Responsibility.


Mara Fernanda Meja

Manuel Ignacio Dussan

Mara Luisa Mesa

He is Celsia Corporate Auditor since 2008

Public Accountant from the University of Medell n and Specialist in Finance and

stock Markets.

He has served as Audit Manager of Pricewatherhouse Coopers Ltda and Risk

Manager and Auditing of Colinversiones S.A., among others.


Corporate Auditing

Juan Fernando Fernndez (Corporate Auditor)

Currently he is the President (CEO) of Grupo Argos S.A. Business Engineer from Universidad Nacional de Colombia and Master ofScience in Engineering from University of California, UCLA, USA. He also takenspecialized courses at Harvard University, Northwestern University andMassachusetts Institute of Technology, MIT. Worked in Suramericana de Seguros for 19 years, where he was CEO duringhis last 4 years in the company. Member of the Board of Directors of Grupo Sura, Bancolombia, CementosArgos, Arcos Dorados. He is part of the Private Council of Proantioquia, Codesarrollo, FundacinSuramericana, Fundacin Fraternidad Medelln and EAFIT University. In 2012, after the split of Cementos Argos S.A, became Vice President ofCorporate Finance of Grupo Argos S.A.

Graduated in Business Administration at the Universidad EAFIT andsubsequently conducted a Degree in Politicla Studies at the same university.

He is currently enrolled in the Executive MBA TRIUM program of LondonSchool Of Economics -LSE-, the Business School of Pars -HEC-, and New YorkUniversity -NYU-. Currently President of Suramericana S.A Obtained his law Degree at the Universidad de Medelln, specialized ininsurance. He attended the CEO Management Program at Kellogg Graduate School ofManagement. He was Vice President of Insurance and Vice President ofcorporate Affair at Inversura S.AMember of the Boards of Directors of Bancolombia S.A, Nutresa S.A,Fundacin Suramericana and Fasecolda.

He currently directs the Interdisciplinary Center for Development Studies (CIDER)of the Universidad de los Andes.

Electrical engineer from Universidad de los Andes, Specialist in Advanced

Mathematics of Universidad Nacional, Specialist in Energy Systems Management

from the Universidad de los Andes and Ph.D. in Mineral Economics.

He has worked in the electricity sector in Colombia and as Advisor Senior inthe Comisin Regulatoria de Energa y Gas (CREG) during establishment phase.

Board of Directors

Gonzalo Alberto Prez

Juan Benavides Estvez

Has been a member of the Infrastructure Commission appointed by the President

of the Republic and belongs to the Council that is Structuring the Agencia Nacional

de Infraestructura (ANI).

Jos Alberto Vlez C. (President of Board)

Ricardo Sierrra Fernndez


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Appendix 24. CEL.CNs Corporate Governance

The Best Corporate Governance Practices for CEL.CN has been one of the main items in the policies of the company. Since the

company has established itself in the energy sector, after being a mix of inversions, there was always a policy of excellence in the

intern process, guided by its board of directors and team management, which are composed by professionals and highly qualified

people.

We determined the level of compliance with the Corporate Governance Practices after analyzing four main topics, understood in the

Colombian Country Code which, is based in the precepts of the OECD. These were: Shareholder Rights and Equitable Treatment,Shareholders Meeting, Board of Directors and Financial and nonfinancial information.

In Shareholder Rights and Equitable Treatment several items were studied as adoption of one share-one vote policy, the Fair,

balanced and comparable permanent dissemination of corporate information, the disclosure of sufficient information to

shareholders, or mechanisms in place that protect minority shareholders.

Shareholders Meeting is considered as the supreme authority which has express and delegated powers. The deadlines are set

appropriately, as well the convocation mechanisms, schedule and functioning of the assembly. Involvement policy and decisions of

shareholders and institutional investors are also established. The

The Board of Directors is composed uniquely by professionals; it is the authority of management and establishes audit, risk,

governance, nomination and election committees. It publishes periodic reports on corporate governance and performance. The

board has established information on powers and scope of directors. Its responsible of the comprehensive enterprise widecompliance program that is annually reviewed and disclosed. There is also a Power separation between chairman and president of

the board.

We highlighted in Financial and Nonfinancial Information the separated internal audit function, overseen by board, also thatCEL.CN point out relevant audit information. And finally, in 2014, IFRS was adopted.

After this analysis we found that CEL.CN has best practices of corporate governance, making its operation stronger and more stable.

Shareholder Rights and Equitable Treatment - CEL.CN established statutes guided on: 1) One-share-one-vote

policy 2) Submission to arbitration 3) Fair, balanced and comparable permanent dissemination of corporate

information 4) Preparation and disclosure of sufficient information to shareholders on extraordinary operations

that may affect their interests 5) Disclosed compensation policies and beneficial ownership of management. 6)

Mechanisms in place that protect minority shareholders 7) Pre-emptive right and right to dividends.Shareholders Meeting - 1) Supreme authority, with express and delegated powers 2) Setting deadlines,

convocation mechanisms, schedule and functioning of the assembly 3) Involvement policy and decisions of

shareholders and institutional investors.

Board of Directors - 1) Authority of management 2) Established audit, risk, governance, nomination and election

committees 3) Periodic reports on corporate governance and performance 4) Information on powers and scope of

directors. 6) Comprehensive enterprise wide compliance program that is annually reviewed and disclosed 7)

Separation of powers between chairman and president of the board.Financial and nonfinancial information - 1) Separated internal audit function, overseen by board. 2) Point out

relevant audit information. 3) In 2014, IFRS were adopted


87,80% 88,30%92,09%

87,20%

60%

80%

100%

ShareholdersRights

Meeting ofShareholders

Board Financialinformation


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Appendix 25. CEL.CNsSustainability

The CEL.CNs sustainability policies are focused on creating value over time for all of its stakeholders, in an ethical and transparent

way that balances economic profits, social development, inclusion, and respect for the environment.

Economic Dimension: CEL.CN wants to provide profitable, quality and efficient energy, encouraging ethical and

transparent behavior, and managing its risks responsibly. CEL.CNs aim is providing timely and effective response to

energy demand through its human team, technology and financial resources which ensure the quality and availability of

the service in the medium and long term. Moreover, CEL.CN has established a framework of solid action regarding ethics

and integrity throughout the organization.

Social Dimension: This dimension is understood as the commitment to the comprehensive development of its employees,

its families and its communities where CEL.CN operates. This, in order to improve quality of life and to create

environments of mutual benefit, respect and trust.

There are practices and policies that improve the human capital. Also, CEL.CN establishes relationships with the

communities in its areas of influence during the planning, construction and operation of generation and distribution assets

in order to improve the quality of life and to contribute the social development, creating an environment of trust and

support. Here, we highlight the Celsia Foundation, which aid to improve the education in the company areas of influence.

Environmental Dimension: Within this dimension CEL.CN wants to achieve its results by optimizing the use of natural

resources, with the mitigation, off-set of the environmental impacts of its operations, and also with the promotion andrespect for the environment. CEL.CN has a policy of eco-efficency, looking to reduce negative impacts on the environment.

Is important to highlight the care and treatment of water basins and vegetation cover neighboring operations from

provision and use, to disposal and drainage.

Source: CEL.CNs reports


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Appendix 26. Porters Five Forces Analysis

Five Forces Analysis on CELs Core Distribution Business

LEGEND

0 No threat to the business

1 Insignificant threat to the business

2 Low threat to the business

3 Moderate threat to the business

4Significant threat to the business

5 High threat to the business

Threat of New Entrants | MODERATE

The regulation of the utilities business in Colombia determines that there are no entry barriers to participate in the energy market. However in

the power electric utilities business there is a license granted by the government to secure the supply of energy in the country. CEL has acquired a

part of these licenses ensuring its participation in the market for at least the next coming 10 years. Moreover the huge capital required to set up

its own infrastructure serves as a significant entry barrier. Due to that the unique entry barriers in the market are the huge capital investment

required. We consider as MODERATEthe threat of new entrants.

Threat of Substitute Products | LOWAs was stated, the regulation in Colombia does not establish any entry barriers in the market. For this reason, any substitute product could appear

in the Colombian market. Substitutes could be power electric generation by renewable sources. However, the costs associated with these types of

power electric generation are higher than the costs associated with the traditional power electric generation, hydroelectric and thermoelectric.

While any substitute product could enter the market, the costs of implementation could mean a disincentive. We assess the substitutes threat to

be LOW

Bargaining Power of Customers | LOW

In all the zones of CELs influence as in all the country by regulation electric energy prices are established. Within the regulated market the tariff is

established according to the social stratum of the customers that have acquired the service. However, in the unregulated market the customers

have the possibility to trade the prices of the electric energy with any power electric utility company. Thus, with customers having no choice to

accept the prices that have been established in the regulated market and with the possibility to trade that the customers have in the unregulated

market; we assess the bargaining power of customers to be LOW.

Bargaining Power of Suppliers | LOW

The structure of CEL.CNs operation is developed with a vertically integrated process of the power electric business, because it includes the

generation and transmission (and commercialization with EPSA) of the electric power. The generation requires inputs for hydroelectric andthermoelectric processes, but actually just the second one, thermoelectric, has supply agreements with the gas suppliers or liquid fuel suppliers,

because the hydroelectric process depends on the weather conditions. However, CEL.CN has acquired best supply agreements with its fuel or gas

suppliers, as a result of strategic connections in this market. The best supply agreements that CEL has acquired led us to assess the bargaining

power of suppliers as LOW.

Competitive Rivalry within the industry | MODERATE

The structure of the Colombian power electric business sector has established that the maximum market participation of any power electric utility

is 25%. CEL.CN has acquired a great position inside the Colombian market, because it is the fourth electric power generator, accounting for the

12% (6170 GWh) of the supply in Colombia and is also the fifth electric power distributor. Thus, CEL.CN has a big opportunity to grow in theColombian market. Competitors are important, especially of those that have big market participation, because they are a potential threat;

however, based on the Colombian market development, each power electric utility has completed an important process of establishing themselves

in specific zones, making them stronger in the places where they operate. The different projects of expansion of CEL.CN enables it to affront the

competitive rivalry of others participants of the power electric sector in the country. These factors makes our assessment to be MODERATEforthe competitive rivalry within the industry.


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Appendix 27. CEL.CNs SWOT Analysis

Strengths Opportunities

Diversification of its generation technologies.Ability to rapidly adapt itself and to anticipate the

challenges of its industry.

Simultaneous participation in the activities of

generation and distribution.

Lower sensitivity to changes in hydrological

conditions compared to other market players.

Stable regulatory framework. Foray into new geographies.

Best corporate governance practices. Increased use of alternative energy sources.

Listed on the BVC since 2001.Better use of competitive advantage derived from

its generation portfolio.

Capacity to deal favorable regulatory changes,

especially in climatic events.

Weaknesses Threats

High debt indicator compared to other companies

with higher rating.

Implementation of hydroelectric projects

developed by its competitors (Quimbo, Ituango

and Hidrosogamoso).

Lack of experience in the construction of projects

of high magnitude.

High volatility in energy price traded in stocks

market.

Lower financial indicators than peers with higher

rating.

Development of projects and uncontrollable events

by CEL.CN

Gas supply until 2014 guaranteed.Public order situation in the areas where CEL.CN

operates.

Future unbalance between supply and demand ofgas according to UPME'S projections.

Source: BRC Investors Services S.A.

Analysis SWOT


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Appendix 28. Balance Sheet Accounts

Appendix 29. Income Statement Accounts

Account Assumption

Available Elecricity Sells percentage - Operational Expenses percentage

Investment property Forecasted according to historic performance.

Receivables, net Percentage of incomes which is not payed in cash.

Inventories Elecricity Sells percentage

Expenses paid in advance Cash percentageProperty, plant and equipment, net Accounts reclasification: "Construction in progress" pass "ducts and tunnels Plants".

GDF Suez assets acquisition.

Deferred, net charges Accounts represented in the prepayd expenses values.

Assets acquired under finance leases, leasing Forecasted according to initialising and on the run projects.

Intangibles, net Forecasted according to on the run projects.

Other assets Registered nominal quantities.

Suppliers and accounts payable Electricity sells percentage.

Taxes, fees and charges Forecasted according to inflation rate.

Employment and comprehensive social security obligations Forecasted according to inflation rate.

Estimated liabilities and provisions Depends of net revenue before taxes. Provision is estimaed from here.

Financial obligations Forecasted according interests payments.Bonds Forecasted by the calculation of cupons payments and bonds maturity.

Retirement pensions Forecasted according to inflation rate.

Other liabilities Forecasted by using historic growth rate, without distorted accounts.

Shareholder's Equity Patron evident: reduction to future investment plans with equity


Account Assumption

Cost of Revenue, Total Percentage of total income

Selling/General/Admin. Expenses, Total Comparison respect to 2010 was carried out, which give us an estimate growth rate same as this proportion

Depreciation/Amortization By 2016 Suez's assets depreciation will be taken into consideration.

Interest Expense, Net Non-Operating Forecas ted according to the payments for the debt amortiza tion

Interest/Invest Income - Non-Operating We didn't forecasted it because it doesn't mean an high percentage of total income.

Provision for Income Taxes Net revenue before taxes percentage.

Minority Interest It will rise by a rate similar to the business growth rate.



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Appendix 30. CEL.CNs Risks

In the following table there is a list of the risks which CEL.CN faces, and its mitigation policies.

Type Risk Mitigation Process

REGULATORY

Changes in Colombian electric regulation, which

could affect the asset operation, the rentability or

the business continuity.

The company tracks variables that could cause adverse regulatory changes, in order to

prevent and mitigate its effects.

The company seeks the optimization of construction costs, involved with lines expansion,

minimizing the impact of the tariffs of assets.

OPERATIONALInability to restore operations related to providing

public services or delays in meeting demand. The company perfoms maintenance plans to ensure the continuity of the operations.

OPERATIONALDelays and over costs in the construction of

projects.

The company follows a strict program to be in complaince with the construction budget.

Furthermore, CEL.CN contracts providers with best technical qulifications.

Providers that manufacture equipment in the generation plants, pay supervision visits to

the place.

The company takes assurance policies to cover from adverse events during

transportation.

OPERATIONAL

Affectation of the rivers hydrology levels, which

supply water flows for generation assets. Natural

phenomena associated with climate change.

Strengthening of maintenance plans of watersheds that supply water to the generation

plants.

OPERATIONAL

Physical affecation of employees or company

properties , during the operation process or

projects development.

Required compliance of regulatory provisions of occupational health and industrial

safety, particulary for work at heights, confined locations and heavy machinery

operations.

OPERATIONAL Accelerated deterioration or obsolescence ofoperating assets.

Pemanently inversions in preventative maintenance programs, equipment

modernization, and finally, electrical and physical safeguards which ensure assetdurability oand the continuity of the operation

OPERATIONALNot identifying or deal with issues that could affect

the achievement of organizational aims

To ensure risk management there is an risks area which applies a generally accepted

methodology. It ensures the identficatoin and treatment of possible risks which could

affect organizational aims compliance.

OPERATIONAL Non compliance with reliability chargesInfrastructure strengthening, which is required to operate with different fuels, ensuring

through excellent maintenance schedule, the availability of assets

OPERATIONALAffectation of organizational structure due to the

labor body breakdown

Development of management strategic plan of laboral life, aimed on give continuity to

the business. Identification of possible successors for company's critical positions.

OPERATIONAL Human mistakes in electric assets operation

Plant operators certification and training, which contributes to the ordely and controlled

development of certified activities. (Certification by the ICONTEC in the power plants

activities of operation and maintenance)

OPERATIONAL Natural Disasters N/A

LEGAL Delay in achieving environmental licenses Rigorous monitoring and timely compliance dates of the program.

OPERATIONAL Expiry of supply contracts N/A

OPERATIONAL Delinquency / Terrorism Tangible assets assurance

MARKET Energy exchange prices volatility N/A

OPERATIONAL Gas price volatility N/A



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Appendix 31. Risks Matrix

Risks estimations were done based on management reports, where the studies and impact measurements are reported.

Likewise CEL.CN value sensibilities were estimated according to risk materialization, scenarios from financial data reported,

which shows the major change drivers of CEL.CN valuation.

Base on these estimates we show in the following matrix the results classified by the impact level and occurrence probability.

HIGH

OR5 Delay and

costs in building

projects

OR6 Breach of

Firm EnergyObligations

OR3 Low levels of

hydrology

MEDIUM

LR Delay in

achieving

environmental

licenses

OR2 High fuel

costs

RR Changes in

Colombian

regulation of the

sector

MR Unfavorable

market conditions

LOW OR1 Fortuitous

events

OR4 Delayed meet

demand

LOW MEDIUM HIGH


PROBABILITY

LEGAL REGULATORY MARKET OPERATIONAL

IMPACT


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Appendix 33. Worlds Generation Portfolio

Source: CEL.CNs Reports


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Appendix 34. ARG.CN Holding Structure

Source:ARG.CNsReports


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Appendix 35. DuPont Analysis.



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Appendix 36. References

i. (Observatoire Mediterranen de l'Energie, 2007)(IMF, IMF World Economic Outlook 2014- Chapter 2, 2014)

ii. (FIIC, 2014)(Universidad Nacional de Colombia, 2013)

iii. (CEPAL, 2014)iv. (Inter-American Development Bank, 2008)v. (BVC, 2013)

vi. (Compact, The CEO Water Mandate, 2007)vii. (Compact, Boletn del Pacto Mundial de las Naciones Unidas, 2012)

viii. (Banco de la Repblica-Colombia, 2014)ix. (IMF, World Economic Outlook - Update, 2014)x. (Crdenas, 2014)

xi. (BBVA-Research, 2014)xii. (World Bank Group, 2014)

xiii. (De Lima, 2014)xiv. (EKN-Creating Confidence in your Exports, 2014)xv. (CRHOY-Noticias, 2014)

xvi. (Villar, 2014)xvii. (Direccin General de Poltica Macroeconmica, 2014)

xviii. (UPME, Plan de Expansin de Referencia: Generacin-Transmisin 2014-2028, 2014)xix. (Crdenas, 2014)xx. (BBVA-Research, 2014)

xxi. (Ultraburstiles, 2014)xxii. Ibit

xxiii. (UPME, Plan de Expansin de Referencia: Generacin-Transmisin 2014-2028, 2014)xxiv. (DANE, 2013)xxv. (UPME, Sistema de Informacin electrico colombiano, 2013)

xxvi. (OECD, 2013)xvii. (Portafolio, 2014)

xviii. (Colombian Congress, 1994)

xxix. (Colombian Congress, 1994)xxx. (Ministerio de Minas y Energia, 2013)

xxxi. (Regulacin Sector Elctrico, 2012)xxii. (Colombian Congress, 1994)

xxiii. (UPME, Plan de Expansin de Referencia: Generacin-Transmisin 2014-2028, 2014)xxiv. (Ministerio de Minas y Energia, 2013)xxxv. (DANE, 2013)xxvi. (UPME, Sistema de Informacin electrico colombiano, 2013)xvii. (XM, 2014)

xviii. (Ministerio de Minas y Energia, 2013)xxix. (Fedesarrollo, 2013)

xl. (UPME, Proyecciones de la demanda de energa en Colombia, ltima revisin a julio de 2014, 2014)


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Appendix 37. Bibliography

Banco de la Repblica-Colombia. (2014). Reporte de Estabilidad Financiera.Bogot: Banco de la Repblica.

BBVA-Research. (2014). Colombia Economic Outlook.BBVA-Research.

BVC. (2013). Reconocimiento IR.Bogot: BVC.

Crdenas, M. (2014).An Outlook of the Colombian Economy.Ministerio de Hacienda.

CEPAL. (2014). Consumo de energia y eficiencia energtica: nuevos retos del comercio con contenedores frigorficos en las

terminales de contenedores de Amrica del Sur.CEPAL.

Colombian Congress. (1994). Ley 142 de 1994.Bogot.

Colombian Congress. (1994). Ley 143 de 1994.

Compact, T. G. (2012). Boletn del Pacto Mundial de las Naciones Unidas.Rio: The Global Compact.

Compact, T. G. (2007). The CEO Water Mandate.The Global Compact.

CRHOY-Noticias. (2014). Servicio elctrico costarricense es segundo en Latinoamrica.

DANE. (2013). Cuentas departamentales-Colombia.Bogot: DANE.

De Lima, F. (2014). Panama:Beyond the Canal.Panama City.

Direccin General de Poltica Macroeconmica. (2014). Reportes de Hacienda.Ministerio de Hacienda y Crdito Pblico.

EKN-Creating Confidence in your Exports. (2014). Country Risk Analysis - Panama.EKN.

Fedesarrollo. (2013). Informe Final Elaboracin de proyecciones de mediano plazo de actividad econmica regional 2013

2017.Bogot: Fedesarrollo.

FIIC. (2014). Evolucin de la Eocnoma de los Pases Miembros de la FIIC.Medelln.

IMF. (2014). IMF World Economic Outlook 2014- Chapter 2.IMF.

IMF. (2014). World Economic Outlook - Update.Washington, DC: IMF.

Inter-American Development Bank. (2008). Interconexion Elctrica Colombia-Panam.BID.

Ministerio de Minas y Energia. (2013). Sector Energa Elctrica .Bogot.

Observatoire Mediterranen de l'Energie. (2007). Cost Assessment of Sustainable Energy Systems- The Drivers of Electricity

Demand and Supply.CASES.

OECD. (2013). Colombia Overview.OECD.

Portafolio. (2014). La devaluacin una buena noticia .Bogot: El tiempo.

Regulacin Sector Elctrico. (4th de November de 2012). Obtenido de

https://sites.google.com/site/regulacionsectorelectrico/colombia

Ultraburstiles. (2014). Sector Energtico Colombiano: Perspectivas para el 2014.Bogot: Ultraburstiles.

Universidad Nacional de Colombia. (2013). CFA Research Challenge - CEMEX LATAM HOLDINGS S.A.Bogot.

UPME. (2014). Plan de Expansin de Referencia: Generacin-Transmisin 2014-2028.UPME.

UPME. (2014). Proyecciones de la demanda de energa en Colombia, ltima revisin a julio de 2014.Bogot: UPME.

UPME. (2013). Sistema de Informacin electrico colombiano.Bogot: UPME.

Villar, L. (2014). Tendencia Econmica.Bogot D.C.: Fedesarrollo.

World Bank Group. (2014). Global Economic Prospects-Shifting Priorities, building for the future.World Bank Group.

XM. (4th de November de 2014). Informacin operativa y comercial. Obtenido de Informacin operativa y

comercial: Informacin operativa y comercial


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