Investors Report
Third Quarter 2013
Bogotá D.C., 15 November 2013
INVESTORS REPORT 3Q 2013
1.EXECUTIVE SUMMARY AND RELEVANT FACTS .............................................................................................................. 1
1.1. Outlook of electric power and natural gas sectors serviced ..................................................................................... 1
1.2. Summary of EEB financial results 3Q 2013 ............................................................................................................. 2
1.3. Relevant facts of EEB and Grupo Energía de Bogota.............................................................................................. 3
2.FINANCIAL PERFORMANCE OF GRUPO ENERGÍA DE BOGOTÁ ................................................................................... 6
3.PERFORMANCE OF CONTROLLED COMPANIES ............................................................................................................. 9
3.1. EEB – Transmission Business ...................................................................................................................................... 10
3.2. DECSA – EEC ............................................................................................................................................................. 12
3.3. TGI 12
3.4. CALIDDA ...................................................................................................................................................................... 13
3.5. CONTUGAS ................................................................................................................................................................. 14
3.6. TRECSA ....................................................................................................................................................................... 14
3.7. EEBIS Guatemala ........................................................................................................................................................ 15
4.PERFORMANCE OF COMPANIES WITHOUT CONTROL................................................................................................. 16
1.4. EMGESA ................................................................................................................................................................ 17
1.5. CODENSA ............................................................................................................................................................. 19
1.6. PROMIGAS ............................................................................................................................................................ 21
1.7. GAS NATURAL ...................................................................................................................................................... 22
1.8. REP and CTM Perú ............................................................................................................................................... 23
5.ANNEXES ............................................................................................................................................................................ 25
Annex 1: Legal notice, clarifications and definitions of EBITDA included in this report ....................................................... 25
Annex 2: Definitions of EBITDA included in this report. Consolidated adjusted EBITDA reconciliation .............................. 25
Annex 3: EEB Consolidated Adjusted EBITDA UDM and Quarterly ................................................................................... 26
Annex 4: Link to EEB´s consolidated and stand-alone financial statements ....................................................................... 28
Anexo 5: Términos técnicos y regulatorios ......................................................................................................................... 28
Annex 6: Tables and graphics footnotes. ............................................................................................................................ 29
Annex 7: Overview of EEB .................................................................................................................................................. 30
Investors Report
Third Quarter 2013
Contact: Grupo Energía de Bogotá Investors Relations Office Telephone: 571 3268000 ext 1675 / 1827 E mail: [email protected] / [email protected] / [email protected]
1. EXECUTIVE SUMMARY AND RELEVANT FACTS
1.1. Outlook of electric power and natural gas sectors serviced
Table N° 1 - Overview of the electricity 3Q 13
Colombia Perú Guatemala
Installed capacity – MW 14,473 8,218* 1,282
Demand - GWh 45,379 29,485 2,247
Demand growth 3Q 13 / 3Q 12 - % 2,9 6,3 -0.5
Growth drivers 3Q 13 / 3Q 12
Value extracted from the annual statistics of the COES in 2012. It is estimated that until September of 2013 the value is at 8,218 MW
The increase in demand at a 6.3% from 3Q 12 to 3Q 13 is influenced mainly by the regulated customers.
The Guatemala Energy demand fell slightly in 3Q 2013 over 2Q 2013 and 3Q 2012 as a result of higher hydro generation and a more efficient dispatch that allowed a reduction in losses of the system.
Sources: XM, UPME, COES – Perú, AMM – Guatemala
*Value extracted from the annual statistics of the COES in 2012. It is estimated that until September of 2013 the value is at 8,218 MW
Table N° 2 - Overview of natural gas sectors 3Q 13
Colombia Perú
Reserves, proved and probable - TCF (2012) 5.7 23.1
Domestic demand - Mm cfd 1,262 GBTUD* 1,219 MM PCD
Change in domestic demand 3Q 13 / 3Q 12 % 17.9 3.1
Explanation for demand variation
The two main causes of the growth of domestic demand were (*) the thermoelectric consumption (+ 35.6%) caused by levels lower than water inputs in the country; and (*) increased consumption of NGV. Since different companies joined and in the form of bonds have given a boost to the conversion of petrol vehicles to natural gas, in such a way that in the run of the year 2013 have become approximately 23,000 vehicles, increasing by 5.4% converted units.
The variation between 2012-3Q/3Q-2013 was mainly due to the consumption of Lima.This was mainly due to increased consumption of Enersur, Kallpa, Egasa-Egesur and consumption of Lima.
Sources: UPME, CON, MEM, Osinergim * Include only July August 2013
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1.2. Summary of EEB financial results 3Q 2013
At the closing of 3Q 2013, net profit in Grupo Energía de Bogotá reached COP 784 billion, growing COP 148 billion
when compared to the same period of the previous year, meaning an increase of 23%. Results are explained by
increases in operational revenues, amounting to 1.45 trillion at the closing of September, vis-à-vis COP 1.16 trillion at
the closing of the same month last year, representing an increase of 25%, due mainly to growth in revenues in the
natural gas business: transport in Colombia, TGI, (new tariff structure in place 1Q 13) and coming on stream of
Cusiana Phase II (August 1st 2012) and distribution in Peru, Cálidda.
On the other hand, operational profit grew by 29%, reaching COP 535 billion at the closing of September 2013,
compared to COP 416 billion for the same period in the previous year, as a result of a sound behavior of revenues
and decreased growth in operational expenses in the natural gas transport business.
Non-operational results show an increase of COP 276 billion in terms of decreed dividends in favor of EEB,
particularly those from Emgesa, Codensa, Gas Natural and Promigas, as well as a reduction in COP 156 billion in
financial expenses, related to EEB and TGI’s debt management operations performed in recent years (2011 – 2012)
Thus, these two line items exceed the effect of net expenditures in the difference in the foreign exchange account,
resulting from the Group’s financial obligations denominated in USD, which were the result of the devaluation of COP
during this year, although such record is only for accounting purposes and does not relate to cash expenditure.
Lastly, it is important to highlight that Group’s consolidated EBITDA, including dividends received from participated
companies at the closing of September 30, grew by 35% when compared to the same period in 2012, amounting COP
1.49 trillion.
Table N° 3 - EEB´s consolidated financial indicators
COP Million 3Q 13 3Q 12
Operating revenue 1,451,107 1,161,375
Operating income 535,747 416,207
Consolidated Adjusted EBITDA Qtrly. 248,733 202,007
Consolidated Adjusted EBITDA LTM 1,668,543 1,455,541
Consolidated EBITDA LTM 1,668,543 1,455,541
EBITDA YTD 1,491,682 1,102,533
Dividends and reserves declared to EEB 799,853 523,953
Net income 784,297 635,756
Dividends and reserves declared by EEB 403,604 319,964 Latest international credit ratings: 1,451,107 1,161,375
S&P – May 13 BBB-; stable Fitch – Nov 13 BBB-; stable
Moody’s - Nov 12 Baa3; stable
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1.3. Relevant facts of EEB and Grupo Energía de Bogota
03.07.13. By means of Resolution 2121 of 3 July 2013, EEB was authorized by the Ministry of Finance and Public
Credit to begin negotiations aimed at entering into foreign credit operations, similar or related thereof, amounting to
USD 479 million or its equivalent in other currencies, which resources will be destined to partially finance the electric
power expansion plan in Colombia, Guatemala and Peru from 2013-2017. Furthermore, the Ministry authorized the
Company to begin negotiations to grant guarantees to its affiliate companies in Guatemala, TRECSA and EEBIS, for
up to US$ 230 million or its equivalent in other currencies.
18.07.13 ECOPETROL S.A. informed the Colombian Financial Superintendence that its Board of Directors had
approved carrying out the required processes to transfer title of its investment in Empresa de Energía de Bogotá S.A.
E.S.P and thus contribute to fund its investment plan. According to ECOPETROL S.A. the administrative and
governmental authorizations required in this transfer of title process have not been granted to date. It further stated
that the date in which such transfer may be carried out has not been defined. The date in which such sale may be
conducted has not been defined. The legal process applicable in this case will be framed within Law 226 of 1995,
amidst which article 60 of the Political Constitution is performed, as regards the sale of state owned stock, taking
measures for its democratization and enacting other provisions thereto.
15.08.13. EEB’s Board approved to start the administrative and legal processes for acquiring interest in ISAGEN.
EEB’s Board approval confirms its interest in seeking new business opportunities in Colombia and in the region. Based on this authorization EEB have started administrative and legal processes in order to prepare an offer as soon
as it is communicated to the market. In the same way, currently EEB is analyzing the best way for participating in this
process, which might include strategic alliances.
17.09.13. Ministry of Mines and Energy issued Resolution 9 0772 whereby it adopted the Transmission Referenced
Expansion Plan 2013-2027. This plan recommends 9 projects which will be executed through public biding
processes. Additionally, it was announced that also the 5 projects included in the Expansion Plan 2012-2015 will be
included in the biding processes. Estimated investment amount for the 14 projects is USD 2,200 MM in terms of
constructive units. The opening of these processes is expected by 4Q 13 and 1H 14.
24.10.13 BVC published its fourth quarter rebalance of the COLCAP Index. EEB, which is part of the COLCAP index
maintains position 15, representing a 2.251% basket share participation, and COLEQTY index, in which it holds
position 18, representing a 2.390% basket share participation.
01.11.13 For a second consecutive year, Fitch Ratings ratified EEB’s corporate debt rating in local and foreign
currency, maintaining rating ‘BBB-’ with stable perspective. This rating also applies to EEB 2021 notes amounting
USD 610 million issued in 2011. Locally, Fitch Ratings also confirmed EEB’s ‘AAA(col)’ rating, the highest in terms of
credit quality.
15.11.13.. Empresa de Energía de Bogotá S.A. E.S.P successfully reopened its bond expiring on November 2021
through private placement led by the Deutsche Bank, who acted as the runner bank. Face-value amount of this
reopening reached US$112 million, at a price of 101.75, which meant a yield to maturity of 5.847%, a lower rate
when compared to the initial coupon rate of 6.125%; the remaining maturity is eight (8) years. This reopening is
totally fungible with bonds issued in the initial transaction, which will increase bonds liquidity and potential valuation
on secondary markets. The transaction was authorized by the General Directorate of Public Credit and National
Investors Report
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Treasury by means of Resolution 2121 of 3 July 2013 and Resolution 3690 of 5 November 2013, and had been
issued a favorable opinion from the Colombian National Planning Department – DNP on 17 May 2013.Resources
thereof, together with additional resources from the company’s cash generation will be used to finance investments in
Guatemala, hence strengthening the transmission infrastructure in this Central American country, through its affiliates
Trecsa and EEBIS.
27.11.13. La Empresa Energía de Bogotá (EEB), held the second and last payment of dividends to the Capital
district, amounting to COP 153.9 billion, pursuant to the shareholder meeting last March 21, when he decreed
dividends by COP 403.6 billion, which represented an increase of 26% compared to what was declared in 2012.
TGI
− 01.11.13 Fitch Ratings ratified TGI corporate debt rating in local and foreign currency, maintaining ‘BBB-’ grade,
with stable perspective.
− TGI’s Board of Directors approved investments amounting to USD 20 million for the implementation of the Two-
way pipeline Ballena – Barranca to transport natural gas in both directions, as well as investments amounting to
USD 5 million to make adjustments to the interconnection system with Venezuela to import gas from that
country.
Cálidda
− By means of Supreme Decree. N° 029-2013-E "Provisions to Improve Operations of Natural Gas", were
approved, introducing a series of changes to National Regulations for the Construction of Facilities, amongst
which one may highlight the following: () the obligation of construction companies to build internal facilities that
will allow supply to those multifamily buildings located in districts where such infrastructure actually exists or may
exist, () the extension of terms in the promotion to connect household customers (discount in internal facilities),
() the authorization to the Concessionaire to outsource enabling activities for the supply of internal facilities, and
() the authorization for improvements in materials, design and implementation of internal facilities, provided the
latter is aligned with laws in force and industry international standards.
− During 3Q 2013, 16,238 connections have been performed, a historic record in September which reached 6,177
connections. Closing of September, Cálidda has 165,850 connected to its network.
− The Five-year Plan (2014 -18) was submitted to the regulating entity in Perú during July 2013, which will be
jointly approved in May 2014, together with the rate proposal (2014 - 2017). It is worth mentioning that the rate
proposal was submitted to the Regulator on October.
Contugas
− 30.09.13. Contugas had the financial closing of its new 6-year bullet type financing of USD 310MM. This is a
new syndicate loan in which Banco de Bogotá, Davivienda and CAF have participated. It will be used to pay the
bridge loan granted in 2012 for USD 215MM and finance the rest the investments costs and pending project
expenses.
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− 30.09.13 Contugas has over 2.950 “enabled” clients (with more than 16.000 household sales performed and
13.000 internal facilities built pending enabling; of the latter, 1.820 facilities have been connected to the gas
service and will be declared “enabled” upon execution of the addendum to the concession contract, which
execution is foreseen during 4Q 2013.
CTM
- 27.08.13. Board of directors accepted the assignment of the right to conduct the design, financing, construction,
operation and maintenance of a 500kV transmission line of 900 Km in length and its associated substations.
This project was awarded by Proinversión on July 18th
2013 to ISA S.A. The referenced investments amounts to
USD 413 million and will generate annual revenues close to USD 41.5 million. The concession term extends for
30 years as of the beginning of operations. Comprehensive management of the project will be the responsibility
of REP. This project is highly significant to ensure electric power supply to the south of Peru and maintain
economic growth. Construction works will take 38 months.
REP
- REP is the power company with the best reputation in Perú according to.the second edition of Merco Peru,
where 100 leading companies holding the best reputation attended together will the 100 most responsible
companies with the best corporate governance, Red de Energía del Perú was ranked number.1 within the
energy sector and 80 in the total ranking. This ranking is prepared by Monitor Empresarial de Reputación
Corporativa (MERCO – for its Spanish acronym), the only monitor verified in the world and audited by KPMG;
the ranking is based on the perceptions from top managers, financial analysts, NGO representatives, union
members, consumers, journalists, opinion leaders and citizens.
Promigas
− Implementation of a new tariff structure to the natural gas system in the Caribbean coast starting from Nov.
20th, 2012.
− Promigas selected to benefit with connection of natural gas for more than 150 000 users in the North of Peru,this
will maintain its growth strategy. Promigas continues with its purpose of supporting and promoting economic
and social development in different regions through the massive use of natural gas.
Investors Report
Third Quarter 2013
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2. FINANCIAL PERFORMANCE OF GRUPO ENERGÍA DE BOGOTÁ
Table N° 4 - EEB’s consolidated financial results
COP Million Variance
USD Million
3Q 13 3Q 12 %
3Q 13 3Q 12
Operating revenue 1,451,107 1,161,375 24.9 757.9 645.0
Cost of sales -749,282 -597,582 25.4 -391.3 -331.9
Gross profit 701,825 563,793 24.5 366.6 313.1
Operating expenses -166,078 -147,586 12.5 -86.7 -82.0
Operating profit 535,747 416,207 28.7 279.8 231.2
Dividends 799,853 523,953 52.7 417.8 291.0
Non-operating expenses -431,744 -167,045 158.5 -225.5 -92.8
Net income before taxes and minority interest 903,856 773,115 16.9 472.1 429.4
Minority interest -52,280 -83,25 -37.2 -27.3 -46.2
Provision for income tax -67,279 -54,109 24.3 -35.1 -30.1
Net income 784,297 635,756 23.4 409.6 353.1
Operational revenues grow due to () increase in the distribution of natural gas in Peru resulting from new residential
and commercial enabled connections/clients and connected to Cálidda and Contugas networks; and () Greater fixed
and variables charges resulting from new TGI natural gas transport contracts with carriers, due in part to the coming
on stream of (Cusiana Phases I and II and Ballena – Barranca) together with TGI’s tariff readjustment in force from
2013-2017.
On the other hand, operation costs and expenses have also increased as a result of growth in TGI’s infrastructure,
mainly due to increase maintenance, fuel gas and depreciation of infrastructure.
In TGI, operational expenses show lover fees and reduced tax on equity resulting from a reclassification and
acknowledgment of the former as non-operational expense.
Non-operational results are led by dividends received from non-controlled companies, amounting to COP 799 billion,
due to reduced financial expenses on account of debt management operations undertaken by TGI and EEB in 2011
and 2012. The devaluation of the Colombian peso during the first nine months of 2013, had a negative impact on the
foreign exchange account, moving from revenues of COP 184 billion as of September 2012 to expenses of COP 200
billion as of September 2013, as a result of updating financial obligations of the Group denominated in USD, which is
only for accounting purposes and does not correspond to cash expenditures.
Finally net profit close in COP 784,297 million, which means a growth of 23.4% compared to the same period of previous year.
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Table N° 5 - EEB’s Financial indicators
COP Million USD Million
3Q 13 3Q 12 Var % 3Q 13 3Q 12
Consolidated adjusted EBITDA Qtrly 248,733 202,007 23.1 129.91 112.19
Consolidated adjusted EBITDA LTM 1,668,543 1,455,541 14.6 871.46 808.40
Consolidated EBITDA LTM 1,668,543 1,455,541 14.6 871.46 808.40
Consolidated EBITDA margin % 61.2 63.5 -3.5 61.2 63.5 OM: > 2.25
Increased in consolidated EBITDA is explained by improved operational results generated from controlled
subsidiaries. Also there is an increase in revenues on account of dividends, resulting from improved performance of
participated companies.
NOTE: According to the definitions of the contract on the notes issued by EEB on November 2011, leverage indicators
and interest coverage are calculated based on year to date EBITDA, which includes capital reductions received by EEB
from its affiliate companies.
Table N° 6 - EEB´s Consolidated debt structure
3Q 13 Part. 3Q 12 Part.
3Q 13 3Q 12
COP Million % COP Million % USD Million USD Million
Financial debt in COP 5,948 0.1 174,41 5.2 3.1 96.9
Financial debt in USD 3,820,481 94.1 2,958,191 88.0 1,995.4 1,643.0
Derivatives position 235,654 5.8 227,144 6.8 123.1 126.2
Total financial debt 4,062,084 100 3,359,745 100.0 2,121.6 1,866.0
Net debt/ Consolidated Adjusted EBITDA LTM – OM:< 4.5 1.60 1.81
Consolidated Adjusted EBIDTA LTM/ Interests – OM: >2.5 9.10 7.97
202,007 176,861
1,010,355
232,594 248,733
3Q 12 4Q 12 1Q 13 2Q 13 3Q 13
Graphic 2 - Consolidated Adjusted EBITDA -Quarterly COP MM
3Q 12 4Q 12 1Q 13 2Q 13 3Q 13
ConsolidatedAdjusted EBITDA -
LTM1,455,5411,279,3941,604,9161,621,8171,668,543
QoQ % -2% -12% 25% 1% 3%
Graphic 1 - Consolidated Adjusted EBITDA - LTM COP MM
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The interest coverage indicator shows an small decrease due to higher financial expenses originated by new
indebtedness in some subsidiaries in the present year.
Graphic 3 – Evolution debt indicators
Indebtedness in USD increased as a result of an issuance of a bond in Cálidda and a new syndicated loan in
Contugas.
7 14 14 14
128
14
229
7
610
750
320
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Graphic 4 - Consolidated Debt Maturity Profile USD MM – Total USD 2,121 MM
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3. PERFORMANCE OF CONTROLLED COMPANIES
Table N° 7 – Financial indicators of Controlled investments 3Q 13
COP Million USD million
EEB TGI Calidda* EEB TGI Calidda*
Trans Trans
Operational revenue 78,126 648,369 510,213 40,8 347.0 296.8
Operational income 37,534 406,217 67,894 19,1 217.2 37.5
EBITDA LTM 64,324 650,060 118,440 33.6 350.2 66.7
Net income 784,297 112,530 14,096 409,6 60.4 9.5
*USD Thousands
T: Transportation; D: Distribution; GN: Natural Gas ; E: Electricity
Graphic 5 – Controlled companies investment GEB 2013
USD 814.6 MM
Table N° 8 - Overview of the EEB group – Controlled companies expansion projects
Project / Company Country Sector USD MM Status In operation
La Sabana – TGI Colombia T NG 55 Under construction 3Q 14
Cusiana/Apiay – TGI Colombia T NG 247 Planning 4Q 15
Sistemas regionales - TGI Colombia T NG 67 Planning 14
ICA Perú - Contugas Perú T + D NG 350 Under construction 1Q 14
Lima Callao - Cálidda Perú
D NG -Network expansion 500 Under construction 16-18
Guatemala - TRECSA Guatemala T E 376 Under construction 14-15
Subestaciones - EEB Colombia T E 308 Under construction 13-15
Ingenios – EEBIS Guatemala T E 44 Planning 15
TGI 16%
Contugas 32%
Cálidda 16%
Trecsa 16%
EEBIS 4%
EEB Transmission
16%
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3.1. EEB – Transmission Business
Table N° 9 - EEB´s selected transmission business indicators
3Q 13 3T 12 Var %
Operating income - COP MM 37,534 39,405 -7.1
EBITDA Qtrly. - COP MM 16,538 15,843 4.4
EBITDA LTM - COP MM 64,324 64,83 -0.8
Investments - COP MM 53,931 22,423 140.5
Infrastructure availability - % (1) 99.95 99.93 0.020
Compensation for unavailability - % (2) 0.1116 0.0010 11060.0
Maintenance program compliance - % (3) 100 100 0.0
Participation in Colombia’s transmission activity - % (4) 7.95 8.1 -1.9
Footnotes in annex 6
Technical indicators show stability in the operational management of the company while maintaining higher tax
regulation compliance without detriment to the company.
Investments of the period include the amounts associated with the construction of the expansion projects in
Colombia national transmission system.
Progress on EEB investment projects in the Transmission Business:
Armenia Project: At the closing of 30 September 2013, the Environmental Public Hearing took place on 15
August 2013 at the Filandia Colegio Bethlemitas Aula Máxima, highlighting the inappropriate handling of the
meeting by the ANLA moderator. EEB was notified on 24.09.13 of Judicial Decree 3129 from ANLA, regarding
additional information, which was delivered on 24 October 2013. In the Contractor’s construction yard for the
transmission lines, INGEDEMCO there are metallic structures, conductor wires, guard wire and fixtures.
Regarding the substation, GIS arrived in Colombia on 13 July 2013. The liquidation process and payment of
levies and VAT was completed and customs (DIAN) authorized the release of the equipment on 23 August. On
26 September, equipment and fixtures inspection took place in the Buenaventura port, while waiting for the
resolution granting the environmental license to the project. Regarding easements, 54 tower sites have been
negotiated and are ready for registering deed in public record and legal inspection, representing 65.1% of the total
tower lines of the project. Progress of project is at 67%.
Alférez Project: As of 30 September 2013, Notice of Environmental License for the Project – Resolution 563 of 7;
June 2013, on 11 June 2013, programming of compliance activities regarding Environmental License of the
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construction process. The structures, insulators, conductor wire and guard wire of transmission lines are at 100%
at the EIP Contractors yard, and civil works are also at 100%. Regarding substation, GIS arrived at the Colombian
port on August 3. Once the liquidation process and payment of levies and VAT was completed, Customs (DIAN)
authorized the entrance to the country. On 29 August, twenty-one (21) skid plates have arrived to the site,
progress of GIS building is at 99% and progress of the control building is at 70%. The response from the Ministry
of Mines and Energy is required, regarding a request to modify the Operation Start up Date set by EEB. Even
though with the initiation of the construction phase, the project’s performance has improved, in-house reviews
evidence that it will not be possible to start operation before 30 November 2013, due mainly to delays in the
environmental licensing process. Progress of project is at 95%.
Tesalia Project: As of 30 September 2013, for the Tesalia – Altamira stretch (51.4km), by means of Resolution
No. 0942 of 17.09.13, ANLA granted the Environmental License. Regarding the design of the line, the completion
of the final design report is in progress. Regarding the Tesalia – Alférez stretch (191km), where 66 km of
templates were placed, progress of 35% and the reinstatement activity was initiated, showing progress of 3%. As
regards the Environmental Impact Study, socialization activities in non-ethnical communities were reactivated as
such activities had been interrupted due to the Agrarian strike. As per Security Deed No. 003, the Commander of
mobile brigade 26 stated some difficulties to ensure security conditions, which will interrupt indefinitely the survey
stage in the municipality of Rio Blanco, district la Herrera in the Tolima department. The foregoing represents a
civil disorder situation beyond the company’s control. With respect to previous consultation process in three
indigenous communities, the pre-consultation was obtained on 16.09.13 on the Protected Settlement Las
Mercedes. As regards the Tesalia substation, there is progress in electrical and civil studies and designs of said
substation and the enhancement of Altamira substation. Progress in the project is at 59.01%.
Norte Project: By September 30th, 2013. The progress in the detailed design of the transmission lines shows
an advance of 48%. Also the environmental diagnosis of alternatives is being developed within the framework of
the environmental management with an advance of 96%. 90% Of the total of socialization meetings have been
conducted in accordance with schedule. According to the results of the study of flooding of the chosen sites for
the substations, confirmed these lots to continue with your purchase. The project presents an advance of 10%
with respect to the scheduled 13%
SVC Tunal 1: By September 30th
, 2013. Boot order was given to EPC contractor on August 1. The activities
began with the detailed design of the project with an advance of 8%. There has been a progress in the
management contract for the premises where the SVC, which is owned by the DADEP-Department
administrative of the Ombudsman of the space public in Bogotá, will be built. In environmental management is
being developed document for modification of the environmental management plan of substation Tunal and other
necessary permissions with an advance of 20%. The project presents a 4% equal to the programmed advance.
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3.2. DECSA – EEC
Increase in operational revenues is due to greater sales of electric power.
Operational profit grows at a lesser pace when compared to growth in operational revenues, mainly as a result of an
increase in () costs on account of maintenance to networks, lines and pipelines and the inventory of networks, () due
to readjustments of prices to operating contracts from higher dispersion levels to those calculated upon execution
thereof, () greater operating requirements aimed at improving safety, and () increase in the number of personnel vis-
à-vis staff 2012.
3.3. TGI
Table N° 10 - EEC’s selected indicators - Controlled by DECSA*
3Q 13 3Q 12 Var %
Number of clients 262,315 252,271 4.0
Operating revenue - COP MM 212,767 208,582 2.0
Operating income - COP MM 37,148 40,952 -9.3
EBITDA Qtrly. - COP MM 46,91 53,312 -12.0
EBITDA LTM - COP MM 67,103 70,184 -4.4
Net Income - COP MM 19,192 23,784 -19.3
Dividends and reserves declared to EEB - - -
Losses - % (1) 4.5% 5.9% -23.9
(*) Controlled by DECSA
Footnotes in annex 6
Tabla N° 11 - TGI’s selected indicators
3Q 13 3Q 12 Var %
Operating revenue -COP MM 648,369 516,32 25.6
Operating income -COP MM 406,217 282,71 43.7
EBITDA YTD - COP MM 515,443 385,133 33.8
EBITDA LTM - COP MM 650,060 499,841 30.1
Net income - COP MM 112,530 169,775 -33.7
Transported volume - Mm cfd 446 421 6.1
Firm contracted capacity - Mm cfd 630 619 1.6
International debt ratings
S&P - May 13: BBB-, stable
Fitch - Nov 13: BBB-, stable
Moody’s Marzo 12 Baa3, stable
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Operational results at the end of the quarter are growing by 43.7%, due to increase in operational revenues,
which increased by 25.6% at the closing of 3Q 2013, when compared to the same period of the previous year,
mainly as a result of: () New rate scheme, entering into force as of 1Q 2013, () Start-up of Cusiana Phase II; ()
Increase of in firm contracts; and () increase in transported volume.
Regarding non-operational line items, the loss of the valuation on hedging operations and the difference in the
exchange rate have only an accounting effect and not a cash effect, and they represent the accounts showing
greater impact during the period, resulting in net profit of COP 112,530 million, COP 57,245 million less, when
compared to 3Q 2012.
Progress in TGI Investment Projects:
The construction of the natural gas compression station La Sabana, which is part of the gas pipeline expansion
project having the same name, progresses by means of two contracts:
− EPC Contract to prepare basic and detailed design, procurement (except compression units) construction,
assembly, installation and start up of station; to date, basic project engineering has been completed,
progress is made in preparing detailed engineering, in the purchase of long-term delivery equipment in
charge of EPC, and the mobilization in site of temporary facilities for the construction stage. The EPC
auditing contract was ordered to start on August 2013.
− Purchase of compression units and ancillary systems, contracted with a German company, which will
deliver the compression units during 1Q 2014.
− With respect to licenses, the project has the environmental license granted by the National Authority for
Environmental Licenses (ANLA – for its Spanish acronym) on January 2013. For the construction license,
there is a planned strategy to obtain the license by stages. The first partial construction license was granted
in September and will allow the commencement of earth movements and fencing of the station. For the
total construction license, which will enable carrying out cementing and structure works, the documents
including detailed engineering were submitted in October 2013.
3.4. CALIDDA
Table N° 12 - Cálidda’s selected indicators
3Q 13 3Q 12 Var %
Number of clients 141,146 94,093 50.0
Operating revenue - USD Thousands 296,765 265,933 18.8
Operating income – USD Thousands 37,529 36,085 -1.6
EBITDA YTD – USD Thousands 50,500 48,288 -1.6
EBITDA LTM – USD Thousands 66,659 64,631 2.2
Net Income – USD Thousands 9,540 19,923 -73.5
Cálidda in its annual variation with respect to September 2012, evidences greater operational revenues on gas
sales due to greater distributed volume (+5%, +USD 2.3MM) and a greater average rate (+60%, +USD 29MM).
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Operational profit grew at a lesser pace when compared to operational revenues, as a result of increase costs in
the sale of gas due to greater volume (+5%, +USD 2.3MM) and a greater average rate (+60%, +USD 39.5MM).
Net profit also decreased as a result of increase in non-operational expenses due to payment of the debt (+USD
7.7MM), foreign exchange (+USD 7.4MM), interests in notes (+USD 7MM) offset with financial expenses vis-à-vis
discounted value (-USD 5.8MM).
Progress in Calidda investment projects:
The construction of the Main Grid Expansion project, which was concluded in May, increased the capacity of
Cálidda’s natural gas distribution system from 255 MMCFD to 420 MMCFD. The commercial operation was initiated
on August 4th.
On June 2013 were completed construction in charge of Cálidda for the interconnection of the new thermal power
plant: Termochilca
3.5. CONTUGAS
30.09.13 Contugas closed its 6-year bullet type financing amounting to USD 310 million. This is a syndicate loan in
which Banco de Bogotá, Davivienda and CAF have participated. This new financing will be used to paid the bridge
loan of 2012 amounting to US$ 215 million and to finance all other investments costs and project expenses.
Progress in Contugas investment projects:
At the closing of 3Q 2013, execution percentage was set at 86% with a cumulative investment of USD 258 million.
The project comprises over 340 Km of main network and high-pressure branch line and over 700 Km of low-
pressure polyethylene networks. Estimated capacity of the gas pipeline is 375 Mm cfd. At the closing of 3Q 13,
volume of in-firm contracts by Contugas reached 41.14 mm cfd or m3 std/day and the volume corresponding to
contracts under negotiation reached 41.14 mm cfd or m3 std/day.
Peruvian Government awarded Contugas 200 days of force majeure and due to this commercial operation will start
by April 7, 2014 and achieve year-round ratings accumulated by a number close to 30,000.
Enabling 60% of the fishing sector in Chincha.
3.6. TRECSA
Progress of Trecsa investment projects: To date progress of the project is set at 59.6%.
There are 607 (30%) structures with civil work completed and 486 (24%) structures assembled.
Municipal endorsements: There are 57 municipal endorsements (76%)
Lots: There are agreements entered into with owners of 606 km (73%), 531 km have registered deed in
public record (64%) and 373 km are available (45%) for construction works of transmission lines.
Transmission lines: There are 958 available sites (47%) for construction of structures required for
transmission lines.
Substations: Progress reached 61% in civil works of substations (work is performed in 14 substations),
progress of 43% in mounting (in 10 substations) and 9% in tests (2 substations)
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ECUT: 1649 forests licenses have been obtained (ECUTS before then INAB) representing 65% of total
estimated licenses.
Easements or rights of way:
TRECSA will start in December 2013 entry into partial operation throughout the Pacific and La Vega
substations. Its entry into full operation will be in 2015.
3.7. EEBIS Guatemala and Perú
Guatemala EEB engineering and services is constituted, a joint-stock company whose objective is to provide
comprehensive solutions for electrical engineering and associated areas.
Progress of EEBIS Guatemala investment projects:
Currently the company is executing a project consisting in the construction of 90km of transmission lines, 4
new substations and enlargement of existing 3. This project will develop with 5 sugar mills located in the
southwest of the country. The contract was formalized and made official on July 11th. The investment in the
project amounts to USD 43.4 million approximately. An advance in recruitment, to date is the following:
contract by EIA and the fieldwork for the design of LT. The contract for design of substations was signed on
September 27th
.
Progress of EEBIS Peru investment projects:
Board of Directors session of GEB that was held the last April 18th 2013, authorized the creation of a
subsidiary in Peru, in order to materialized the market opportunities offered by this country, particularly in the
energy sector (gas and electricity). The company was constituted on June 25th 2013.
The Business Plan was structured from the perspective of five points (i) structure of the environment -
market (ii) ideological structure; (iii) structure mechanics; (iv) human resources and (v) financial structure.
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4. PERFORMANCE OF COMPANIES WITHOUT CONTROL
Table N° 13 - Non-controlled investments financial indicators 3Q 13
COP Million USD Million
Emgesa Codensa Gas Natural Promigas REP CTM
Operating revenue 1,811,743 2,384,261 962,139 213,655 89.8 61.1
Operating income 1,008,344 619,625 259,774 98,073 29.4 30.7
EBITDA YTD 1,460,359 1,095,762 283,540 113,894 55.2 48.7
Net income 646,141 389,189 202,567 368,258 16.4 4.5
Dividends and reserves declared to EEB 405,659 264,951 62,630 57,593 8 -
Capital reductions to EEB - - - - - -
*EBITDA YTD
Table N°14 - Expansion projects of non-controlled companies 3Q 13
*Note: Investments by 3Q 2013 for COP 149,069 MM oriented to the improvement of the services quality to the strengthening of the infrastructure-oriented maintenance and expansion of networks.
Graphic 6 – Non Controlled companies investment 2013
Project Company Sector Country Capex
In operation USD million
Quimbo Emgesa G electricity Colombia 837 1H 2015
New demand Codensa D electricity Colombia 77* 13
Concession expansion REP T electricity Perú 94 13 - 15
Concession expansion and new con. CTM T electricity Perú 606 13 - 16
Expansions PROMIGAS T + D natural gas Colombia 137 13 - 14
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4.1. EMGESA
Table N° 15 Overview of Emgesa 3Q 2013
Instaled capacity - MW 2,914
Capacity´s Composition 10 Hydro y 2 thermo
Generation - Gwh 9,623
Sales - Gwh 12,103
Controlled by Enel Energy Europe S.R.L
EEB’s stake 51.5% - 37.4% ordinary shares; 14.1% preferred non-voting shares
For the period under analysis, Emgesa keeps its sales structure 71% through long-term bilateral contracts and 29%
through the spot market, which average prices were greater due to low rainfall levels. Similarly, it achieved 80% of
own generation.
8,784
3,521
12,305
8,628
3,475
12,103
Contracts Spot Total
Graphic 7 - Sales GWh
3Q 12 3Q 13-1.8%
-1.3%
-1.6%
10,248
1993.9
162.6
2157
9,623
2522.2
94.2
2616
Production Contracts Spot Total
Graphic 8 - Supply GWh
3Q 12 3Q 13-6.1%
26.5% 21.3% -42.1%
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Table N° 16 - Selected financial indicators of Emgesa
COP Million USD Million
3Q 13 3Q 12 Var %
3Q 13
3Q 12
Operating revenue 1,811,743 1,583,938 14.4 946.3 879.7
Cost of sales 784,427 630,742 24.3 409.7 350.3
Administrative expenses 18,972 21,960 -13.6 9.9 12.2
Operating income 1,008,344 931,235 8.2 526.6 517.2
EBITDA LTM 1,460,359 1,369,573 6.6 765.3 760.7 Net income 646,141 581,515 11.1 337.4 322.9 Dividends and reserves declared to EEB
405,659
345,963
17.3 211.9 192.1
Capital reductions to EEB - - -
Net debt / EBITDA LTM 1.37 1.38
EBITDA / Interests 12.49 10.84
Footnotes in annex 6
Operational profit grew at a lower pace than operational revenues as a result of greater fuel consumption due to
greater thermal generation during the period and larger purchase of energy in the spot market.
Net profit increased by 11.1% due mainly to () greater operational revenues generated in the spot market activity at
greater average energy sale prices due to lower rainfall levels during 3Q 2013, () improved operational result and the
reduction of net financial expenses by 22% due to lower interest rates (DTF) and to lower inflation indicators to which
Emgesa’s debt is indexed to.
Emgesa’s Board of Directors approved the extension of the total bond amount issuance of bonds in COP 850 billion
reaching up to COP 2.75 trillion. Aldo the BoD approved the offering memo of the bonds and authorized to perform
the activities before the national authorities involved.
Progress on EMGESA’s investment projects:
Tabla N° 17 – Capex
3Q 13 3Q 12 Var %
COP Million 430,877 354,962 21.4
USD Million 225.8 197.1 14.5
Expansion investments carried out by Emgesa focused on the construction of the Hydroelectric Plant of El Quimbo
and the revamping of the generation chain in minor plants, known as Salaco. Likewise, preventive maintenance
investments were performed in hydraulic and thermal plants to ensure reliability and availability thereof. Total
investment was exceeded in 21,4%, taking into consideration greater execution of works in El Quimbo. As of 3Q
2013, COP 371.927 million had been invested in El Quimbo, COP 25.934 million in the revamping of Salaco and
COP 33.016 million in maintenance.
Hydroelectric Project El Quimbo: Accumulated investment in El Quimbo project as of 3Q 2013 amounts to USD 502
million and progress is set at 51.7%
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4.2. CODENSA
Tabla No 18 - Panorámica de Codensa al 3T 13
Number of clients 2,664,243
Market Share - % 23.67%
Codensa’s Demand – Gwh 10,686
Var % Demand 3Q 13 / 3Q 12 3.39%
Loss Index 7.06%
Operating revenue – COP MM 2,384,261
EBITDA LTM – COP MM 1,095,762
Control Endesa from Spain
EEB’s stake 51.5% (36.4% ordinary shares,
15.1% preferred non-voting shares)
National 76%
Codensa 24%
Graphic 9 - National Demand Vrs Codensa
Source: Codensa - Annual Average Rate The demand for the Codensa area is calculated taking into account the incoming power by the La Guaca substation destined to Enertolima starting in 2013, increasing demand in tolls to network (OR completo) operators. For the purposes of comparisons Annual Average Rate series is recalculated since January 2011
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National Energy Demand: +3.03% as of Sept. 2013, affecting growth due to a decrease in consumption in the
regulated and non-regulated markets, the latter affected by low OXY consumption due to blowing ups of the oil
pipeline and decreased in the manufacturing industry.
Energy demand in the area of Codensa: +1.21%, maintaining a slight recovery of household and commercial demand
while there is an industrial demand decrease in the central region.
Table N° 19 - Selected financial indicators of Codensa
COP Million USD Million
3Q 13 3Q 12 Var % 3Q 13 3Q 12
Operating revenue 2,384,261 2,336,732 2.0 1245.3 1297.8
Cost of sales 1,705,758 1,672,144 2.0 890.9 928.7
Administrative expenses 58,878 57,053 3.2 30.8 31.7
Operating income 619,625 607,534 2.0 323.6 337.4
EBITDA LTM 1,095,762 1,061,186 3.3 572.3 589.4
Net income 389,189 379,065 2.7 203.3 210.5
Dividends and reserves declared to EEB 264,951 69,624 280.5 138.4 38.7
Capital reductions to EEB - - - - -
Net debt / EBITDA LTM 0.59 0.69
EBITDA / Interests 16.07 12.94
Footnotes in annex 6
During the period, Codensa generated operational revenues amounting to around COP 2.3 trillion, a 2% higher when
compared to 3Q 2012 as a result of () growth in Codensa’s area of influence and () greater revenues related to the
transfer of energy to networks of other operators out of Codensa’s area of influence.
Sales cost increased as a result of greater purchases of energy to service demand.
Codensa’s EBITDA between January and September 2013 reached COP 809,419 million, representing an increase of
0.8% with respect to the same period in 2012, mainly due to greater operations revenues mainly offset by a similar
increase in the cost of sales.
Financial debt of the Company shows a reduction with respect to December 2012 as a result of the expiration of
Codensa Bonds (COP 80,000 million), which were paid on February 2013 with Company’s cash.
Codensa’s net profit increased with respect to 3Q 2012, due to greater operational revenues and to lower net financial
expenses resulting from lower interests rates and lower balance of the debt.
During the first nine months, Codensa achieved the lowest physical loss index for the past ten years, reaching 7.06%.
Codensa’s Board of Directors approved the extension of the total amount of issuance and placement of bonds in COP
185 billion reaching up to COP 785 billion.
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Tabla N° 20 – Capex
3Q 13 3Q 12 Var %
COP Million 149,07 153,529 -2.9
USD Million 77.8 85.2 -8.7
Progress in CODENSA’s investment projects: Investments focused mainly in servicing growing demand;
() improve service quality and continuity and () control of operational risks.
4.3. PROMIGAS
Table N° 21 - Overview of Promigas 3Q 13
Number of clients 11
Volume of sales - Mm cfd 362.1
Market share - % 37.6%
Network – km 2,367
Ingresos operacionales - COP MM 213,655
EEB’s stake - % 15.6
Table N° 23- Selected indicators of Promigas
COP Million USD Million
3Q 13 3Q 12 Var % 3Q 13 3Q 12
Operating revenue 213,655 158,469 34.8 111.6 88.0
Cost of sales 99,761 72,426 26.4 47.8 40.2
Administrative expenses 98,073 39,606 147.6 51.2 22.0
EBITDA LTM 113,894 76,232 49.4 59.5 42.3
Net income 368,258 140,501 162.1 192.3 78.0
Dividends and reserves declared to EEB 57,593 29,09 98.0 30.1 16.2
Capital reductions to EEB - - - - -
Net debt (1) / EBITDA N.A. N.A. - N.A. N.A.
EBITDA / Interests(2) N.A. N.A. - N.A. N.A.
Table N° 22 – Capex Promigas
3Q 13 3Q 12 Var %
COP million 74,091 66,87 10.8
USD Million 38.7 37.1 4.2
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Footnotes in annex 6
Progress of PROMIGAS investment projects:
First project of liquefaction of natural gas in Colombia for internal market development. Its entry into
operation foreseen in 3T 2014 with an estimated investment of USD 34 million and a capacity of 78,000
gallons of LNG / 5.9 Mcfd. The project is located in in the process of signing of the EPC contract for the
construction of the plant and negotiating contracts with the market
4.4. GAS NATURAL
Table N° 24 - Overview of Gas Natural 3Q 13
Number of clients 1,899,603
Volume of sales - Mm cfd 1.143
Market share - % N.A
Network – km 12737
Operating revenue - COP MM 993,017
EBITDA YTD - COP MM 297,332
Controlled by Gas Natural from Spain
EEB’s stake 25%
Graphic 10 – Sales by client - Gas Natural 3T 2013
Total 1.143 Mm3
Sales break up per clients is stable and similar to 2Q 2013, less clients have been connected to those foreseen,
mainly due to () less clients in saturated markets, () lack of technical possibilities in forest areas and illegal
neighborhoods, () due to delays in crossings of roads under concession. This situation is offset by a greater number
of clients in the new construction market and lesser reinstallations.
Domestic demand of Gas Natural is picking up in recent months, mainly due to a recovery in consumption of the
thermoelectric sector.
Industry 44%
GNV + ATR 17%
Residential and
Commercial 39%
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Table N° 25 - Selected indicators of Gas Natural
COP Million USD Million
3Q 13 2Q 12 Var % 3Q 13 3Q 12
Operating revenue 993,017 954,609 4.0 518.6 530.2
Cost of sales 722,303 707,716 2.1 377.3 393.1
Operating income 270,714 246,893 9.6 141.4 137.1
EBITDA YTD 297,332 275,037 8.1 155.3 152.8
Net income 202,567 185,121 9.4 105.8 102.8
Dividends and reserves declared to EEB 62,63 63,726 -1.7 32.7 35.4
Capital reductions to EEB - - - - -
Footnotes in annex 6
Operational revenues grow at a rate of 3.6% as a result of higher sales driven mainly by GNV and ATR markets.
EBITDA exceeds by COP 15.087 million (+5,3%) the goal set initially of COP 282.244 million. This variation is
explained by a greater gas margin (+COP 3.559 million) due to postponing the application of new distribution charges,
greater other revenues and margin from other sales (COP 2.862 million) for connection margin, customer financing
and third party collection, less services outside (COP +7.091 millones) reduced advertisement, adverts and PR
expenses, repair and conservation, provision and services of independent professionals, less tax due to reduced
4x1000, ICA and contributions (COP +990 million) and reduced personnel expenses (COP +584 million) due to less
staff.
Table N° 26 – Capex
3Q 13 3Q 12 Var %
COP Million 19,9 17,736 12.2
USD Million 10.4 9.9 5.5
The increase in investments by connections to industries (COP + 711 million), progress in the municipalities of La
Mesa and Anapoima (COP + 529 million) and rest (COP + 116 million). Are expected to regulate the planned level of
investment in the remainder of the year.
4.5. REP and CTM Perú
Table N° 27 - Selected financial indicators of REP
USD Million
3Q 13 3Q 12 Var %
Operating revenue 89.7 84.8 5.82
Cost of sales 50.5 48.7 3.61
Operating income 29.3 27.0 8.54 EBITDA LTM 55.1 53.4 3.13
Net income 16.4 16.2 0.85 Dividends declared to EEB 8 -
Capital reductions to EEB - -
Net debt (2) / EBITDA 3.31x 3.50x
EBITDA / Interests (3) 6.10x 5.75x
Footnotes in annex 6
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With respect to revenues, increase thereof is explained by the Start up of the Commercial Operation (POC - for
its Spanish acronym) of Enhancements N° 10 (29 April 2013) and N°11 (12 July 2013). In addition to greater
energy demand. All that partially offset by depreciation in the Exchange Rate Type.
As regards expenses, made up by Transmission Costs and Operational Expenses, depreciation and
amortization. During 3Q 2013, there was an increase of 3.61% when compared to 3Q12, resulting from (i)
increase amortization on account of POC in enhancements N°10 and 11, (ii) greater third party services on that
same account.
EBITDA and EBITDA margin, during 3Q13 there was an increase of 3.13% with respect to 3Q12, while EBITDA
margin decreased by 1.60% as a result of greater operational expenses.
As regards net profit in 3Q13 shows an increase of 0.85% with respect to 3Q12, mainly due to POC of the
aforementioned projects.
Table N° 28 - Selected financial indicators of CTM
USD Million
3Q 13 3Q 12 Var %
Operating revenue 61.1 41.1 48.6
Cost of sales 30.4 18.6 63.6
Operating income 30.6 22.4 36.3
EBITDA LTM 48.7 35.1 38.8
Net income 4.4 12.7 -65.1
Dividends declared to EEB - -
Capital reductions to EEB - -
Net debt (1) / EBITDA 7.79x 10.92x
EBITDA / Interests (2) 2.35x 3.36x
Footnotes in annex 6
Revenues increase is due mainly to of Zapallal – Trujillo transmission lines and Talara – Piura transmission lines and
Pomacocha - Carhuamayo transmission lines in September 2013.
During 3Q13 there is an increase of cost of sales with respect to 3Q12, due to the start of the aforementioned
projects.
Net income reduction with respect to 3Q 12 is due to higher expenses on foreign exchange and financial
expenses associated to prepayments of debts replaced with in the international capital markets.
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5. ANNEXES
Annex 1: Legal notice, clarifications and definitions of EBITDA included in this report
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:
− 3T 13: 1,914.65 COP/USD
− 3T 12: 1,800.52 COP/USD
In the figures submitted, a comma (,) is used to separate thousands and a point (.) to separate decimals.
Annex 2: Definitions of EBITDA included in this report. Consolidated adjusted EBITDA reconciliation
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; Q1) 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.
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Annex 3: EEB Consolidated Adjusted EBITDA UDM and Quarterly
Table N° 29 – EEB’s Consolidated financial results
COP Million Variance
USD Million
3Q 13 3Q 12 % 3Q 13 3Q 12
Operating revenue (1) 1,451,107 1,161,375 24.9 757.9 645.0
Electricity transmission 78,126 78,197 -0.1 40.8 43.4
Electricity distribution 212,665 207,923 2.3 111.1 115.5
Natural gas transportation 648,369 516,318 25.6 338.6 286.8
Natural gas distribution 511,947 358,937 42.6 267.4 199.4
Cost of sales (2) -749,282 -597,582 25.4 -391.3 -331.9
Electricity transmission -34,189 -32,401 5.5 -17.9 -18.0
Electricity distribution -158,721 -148,153 7.1 -82.9 -82.3
Natural gas transportation -189,488 -180,633 4.9 -99.0 -100.3
Natural gas distribution -366,884 -236,395 55.2 -191.6 -131.3
Gross income 701,825 563,793 24.5 366.6 313.1
Operating expenses -166,078 -147,586 12.5 -86.7 -82.0
Electricity transmission -8,594 -6,489 32.4 -4.5 -3.6
Electricity distribution -24,544 -23,361 5.1 -12.8 -13.0
Natural gas transportation -34,441 -46,65 -26.2 -18.0 -25.9
Natural gas distribution -98,499 -71,086 38.6 -51.4 -39.5
Operating income 535,747 416,207 28.7 279.8 231.2
Dividends (4) 799,853 523,953 52.7 417.8 291.0
Interest temp. investments & pension trusts (5) 40,018 45,897 -12.8 20.9 25.5
Foreign exchange (6) -200,998 184,634 -208.9 -105.0 102.5
Other revenue (8) 23,457 27,751 -15.5 12.3 15.4
Non-operating expenses (9) -117,792 -91,988 28.1 -61.5 -51.1
Financial expenses -170,359 -326,061 -47.8 -89.0 -181.1
Other expenses -6,07 -7,278 -16.6 -3.2 -4.0
Net income before taxes and minority interest 903,856 773,115 16.9 472.1 429.4
Minority interest (10) -52,28 -83,25 -37.2 -27.3 -46.2
Provision for income tax -67,279 -54,109 24.3 -35.1 -30.1
Net income 784,297 635,756 23.4 409.6 353.1 Footnotes in annex 6
Investors Report
Third Quarter 2013
Contact: Grupo Energía de Bogotá Investors Relations Office Telephone: 571 3268000 ext 1675 / 1827 E mail: [email protected] / [email protected] / [email protected]
Table N° 30 – GEB's Consolidated EBITDA LTM breakdown
CONSOLIDATED EBITDA LTM COP Million Variance USD Million
3Q 13 3Q 12 % 3Q 13 3Q 12
Operating revenue 1,874,835 1,542,555 21.5 979.2 856.7
Operating costs -975,381 -793,438 22.9 -509.4 -440.7
Operating expenses -221,397 -183,438 20.7 -115.6 -101.9
Operating depreciation 113,329 104,375 8.6 59.2 58.0
Operating amortization 49,646 47,57 4.4 25.9 26.4
Operating Taxes 4,371 7,401 -40.9 2.3 4.1
Dividend & interests earned 849,416 748,856 13.4 443.6 415.9
Interests in autonomous equity -6,391 -17,182 -62.8 -3.3 -9.5
Administration expenses -194,36 -159,088 22.2 -101.5 -88.4
Retirement pensions 39 32,348 20.6 20.4 18.0
Amortizaciones 41,309 19,995 106.6 21.6 11.1
Amortization 5,301 4,415 20.1 2.8 2.5
Depreciation 22,226 16,933 31.3 11.6 9.4
Taxes 66,639 84,238 -20.9 34.8 46.8
Capital reductions - - - 0.0 0.0
Consolidated adjusted EBITDA 1,668,543 1,455,541 14.6 871.5 808.4
Table N° 31 – GEB's Consolidated EBITDA quarterly breakdown
CONSOLIDATED EBITDA QUARTERLY COP Million Variance
USD Million
3Q 13 3Q 12 %
3Q 13 3Q 12
Operating income 194,850 147,709 31.9 101.8 82.0
Operating depreciation 27,963 28,035 -0.3 14.6 15.6
Operating amortization 13,613 11,67 16.6 7.1 6.5
Operating taxes 1,127 1,079 4.4 0.6 0.6
Dividends & interests earned 11,545 16,343 -29.4 6.0 9.1
Interests in autonomous equity -851 -5,946 -85.7 -0.4 -3.3
Administration expenses -34,535 -24,915 38.6 -18.0 -13.8
Retirement pensions 7,021 7,16 -1.9 3.7 4.0
Amortization 9,147 4,793 90.8 4.8 2.7
Depreciation 1,208 2,224 -45.7 0.6 1.2
Provisions 3,276 -421 -878.1 1.7 -0.2
Taxes 14,369 14,276 0.7 7.5 7.9
EBITDA 248,733 202,007 23.1 129.9 112.2
Investors Report
Third Quarter 2013
Contact: Grupo Energía de Bogotá Investors Relations Office Telephone: 571 3268000 ext 1675 / 1827 E mail: [email protected] / [email protected] / [email protected]
Annex 4: Link to EEB´s consolidated and stand-alone financial statements
http://www.grupoenergiadebogota.com/inversionistas/estados-financieros
Anexo 5: Términos técnicos y regulatorios
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
Investors Report
Third Quarter 2013
Contact: Grupo Energía de Bogotá Investors Relations Office Telephone: 571 3268000 ext 1675 / 1827 E mail: [email protected] / [email protected] / [email protected]
Annex 6: Tables and graphics footnotes.
Table 9 - 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 Table 10– Selected financial indicators of EEC - DECSA
(1) Percentage of energy losses. Return
Table 16 - 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 Return
Table 19 - Selected financial indicators of Codensa
(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. Return
Table 23 – Selected financial indicators of Promigas
(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. Return
Table 25 – Selected financial indicators of Gas Natural
(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. Return
Table 27 – Selected financial indicators of REP
(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. Return
Table 28 – Indicadores financieros seleccionados de CTM
(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. Return
Table 29 - 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.
Investors Report
Third Quarter 2013
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(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.
Return
Annex 7: 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.
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.
EEB is one of the largest Colombian corporate debt issuers. 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.
68.1%
25%
15.6%
Electricity
Transmission
40% 40%
1.8%
98.4%
Generation
51.5% *
2.5%
Distribution
51.5% *
16.2%
51%
82%
Distribution
Transportation
Natural Gas
75%
60%
100%
*EEB is not the controlling shareholder and is a party to signed shareholder agreements.
40%
25%
100%
100%