[PPT] - C OMPANY P RESENTATION 4Q 2012 Agenda Company Overview Business PowerPoint Presentation

SLIDE 1

COMPANY PRESENTATION

4Q 2012

SLIDE 2

Company Overview

Agenda

Business Strategy Financial Profile Chilean Electricity Sector Overview

2

SLIDE 3

Recent developments

Company Overview

3

HYDRO CONDITION

 2012 3rd consecutive extremely dry year

SANTA MARIA I COAL PROJECT

 1,853 GWh generated during 2012 (out of the estimated 2,500 GWh/year)  Dec. 12’: Insurance settlement for USD 65 million (USD 40 million for ALOP)

COMMERCIAL BALANCE

 Relevant input of coal (efficient thermal complement to hydro)  Net seller in the spot market, despite reduced hydro

NATURAL GAS

 Medium-term natural gas supply secured  2 CCGT with gas for Jan-Apr 2013

ANGOSTURA PROJECT

 Over 80% of progress, scheduled for end of 2013.

CREDIT RATING

 Fitch Ratings (12.17.2012): BBB rating reaffirmed  S&P (12.28.2012): BBB- rating reaffirmed, maintaining negative outlook

8.829 5.566 10.687 5.462 9.834 5.233

95 1.853

1.273 2.418 2.242 2.563 1.901 2.240 2.000 4.000 6.000 8.000 10.000 12.000 2010 2011 2012 GWh

Generation vs. commitments

Contractual Sales Hydro Natural gas (LNG) Diesel Coal

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Market Share (as a % of Installed Capacity) - SIC Generation (GWh) and Installed Capacity (MW)

Source: CNE – December 2011 Source: Colbún 2012 Generation and Capacity

Thermal 55% Hydro 45%

57 % 43 %

Generation

Capacity

Business Power Generation & Trade Size 2nd largest generator in Chile’s Central Grid (SIC), with over 20% market share (MW). The SIC covers 90% of the population Capacity 2,962 MW 43% hydro and 57% thermal Generation 11,568 GWh in 2012 45% hydro and 55% thermal Assets 15 hydro plants in 4 different basins 7 thermal plants in 4 different regions People 962 employees as of December’12 Results EBITDA of USD 283.9 million in 2012 Revenues of USD 1.4 billion in 2012

Colbún at a glance

Company Overview

4

Colbún 21%

Endesa 41% AES Gener 18% Others 20%

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Nehuenco III

Capacity: 108 MW

Nehuenco I

Capacity: 368 MW

Nehuenco II

Capacity: 398 MW

NEHUENCO COMPLEX: 874 MW

DIESEL/GAS Candelaria

Capacity Unit I : 133 MW Capacity Unit II : 137 MW

CANDELARIA POWER PLANT: 270 MW

DIESEL/GAS Los Pinos

Capacity: 100 MW

LOS PINOS POWER PLANT: 100 MW

DIESEL Antilhue

Capacity Unit I : 51 MW Capacity Unit II : 52 MW

ANTILHUE POWER PLANT: 103 MW

DIESEL Chacabuquito

Capacity: 29 MW

ACONCAGUA BASIN: 213 MW

Los Quilos

Capacity: 39 MW

Hornitos

Capacity: 55 MW

Blanco

Capacity: 60 MW

Juncal

Capacity: 29 MW

Juncalito

Capacity: 1 MW

7 THERMAL POWER PLANTS

Carena

Capacity: 9 MW

CARENA POWER PLANT: 9 MW

Colbún

Capacity: 474 MW

MAULE BASIN: 630 MW

San Ignacio

Capacity: 37 MW

San Clemente

Capacity: 5 MW

Machicura

Capacity: 95 MW

Chiburgo

Capacity: 19 MW

Rucúe

Capacity: 178 MW

LAJA BASIN: 249 MW

Quilleco

Capacity: 71 MW

Canutillar

Capacity: 172 MW

CHAPO LAKE: 172 MW

15 HYDRO POWER PLANTS

A diversified asset base

Company Overview

5

Santa María I

Capacity: 342 MW

SANTA MARIA I POWER PLANT: 342 MW

COAL

737 KM Additional Transmission System 68 KM Sub Transmission System

TRANSMISSION LINES

47 KM Trunk Transmission System Combined Cycle Open Cycle Run of the River Reservoir Coal-fired

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CHILECTRA (2011- 2021/23/25) SAESA (2010- 2019) CGE-Río Maipo (2010- 2021) CONAFE (Until 2020) CGE-Distribución (2010- 2024) CODELCO Andina ANGLOAMERICAN Los Bronces CMPC Puente Alto CODELCO Ventanas CODELCO Salvador CODELCO Teniente CMPC Procart METRO AGUAS ANDINAS La Farfana

UN-REGULATED CUSTOMERS REGULATED CUSTOMERS

Company Overview

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A diversified customer base

Santiago

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50 100 150 200 250 300 350

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

500 1.000 1.500 2.000 2.500 3.000 3.500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2,962 MW 1,070 MW

CAGR: 8%

200 400 600 800 1.000 1.200 1.400 1.600

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$ 1,409 million US$ 129 million

CAGR: 20%

US$ 54 million US$ 273 million

CAGR: 13%

Colbún has grown steadily over the past decade

Company Overview

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Capacity (MW) Total Operating Revenues (MMUSD) Market Cap (MMUSD) 3-year Moving Average EBITDA (MMUSD)

1.000 2.000 3.000 4.000 5.000 6.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$ 4,830 million US$ 435 million

CAGR: 20%

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Angelini Group 10% Pension Funds 19% Others 22%

Matte Group 49%

CONTROL

Controlled by the Matte Group (49%), one of the leading economic groups in Chile, with stakes in various sectors (forestry, financial, telecommunications, among others).

LARGE STAKEHOLDER

The second important stakeholder, the Angelini Group, is also a leading Chilean economic group and owns 9.6% of Colbún.

FLOAT

41% free float, with relevant local institutional investor presence.

GOVERNANCE

4 out of 9 are independent directors.

ACCOUNTING STANDARDS

Disclosure under IFRS standards Functional currency: US dollar

Solid and reliable controlling group with a strategic and long term vision

Company Overview

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Ownership Structure

Source: Colbún, December 2012

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Agenda

9

Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview

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10

Corporate Strategy

Business Strategy

We are a Chilean company, leader in the generation of reliable, competitive and sustainable energy

Who are we? What do we do?

We seek to generate long-term value by developing projects and managing power infrastructure to meet the country’s energy demand.

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11

Strategic Pillars

Business Strategy

1. Consolidation
2. Diversification

and Risk Management

3. Growth
Consolidate our people, our operations, our projects, our financials…
Identify and develop project options to consolidate our market share.
Commercial strategy that generates long-term returns consistent with
ur asset base.
Narrow our exposure to exogenous variables: diversified asset base

(technology, fuel and location) and clients.

Active risk management policy.

Long-term value generation (Profitability/EBITDA)

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Value Chain

Business Strategy

Sustainability

Value & Trust Multidimensional challenge: Technical + Environmental / Social + Financial High standards: Reliability + Security + Environmental Risk / return profile combining: Commercial policy + Financial strength + Risk management

Project Development Operational Excellence Risk / Return Profile

12

SLIDE 13

EMPLOYEES COMMUNITY AND SOCIETY ENVIRONMENT CONTRACTORS Business Strategy

13

Colbún: a sustainable partner

INVESTORS CLIENTS AND SUPPLIERS

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COMMERCIAL GOALS

Supply secure and competitive energy to our customers Maximize returns from our current and future assets Manage volatility given large renewable component

1. CONTRACT LEVEL

Define optimal Contract Level Hydro capacity (Output of a medium-dry year)

+

Efficient thermal capacity

(Output of coal-fueled plant)

2. SALE PRICE INDEXATION

Incorporate indexation formulas of sale prices that reflect

ur cost structure

Structure tailor-made hedge programs to protect from more adverse 1) Hydrologic conditions 2) Fuel prices

3. HEDGE PROGRAM

Business Strategy

14

Commercial policy

Hydro CPI Efficient thermal Fossil Fuels Transitional periods Flexible Price

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109 128 156 170 211 446 19 236 337 331 205 284 50 100 150 200 250 300 350 400 450 500 2.000 4.000 6.000 8.000 10.000 12.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

GWh MMUSD EBITDA (EBITDA Margin) Ratio: Base Generation / Commitments Base Generation1 / Commitments2 ≥ 90% B.G. / C ≤ 70% B.G. / C ≥ 85%

“Base” Generation Contractual Commitments

1: Commitments represent Colbún’s committed sales (through contracts) excluding commitments which price is indexed to the spot price 2: Base Generation represents Colbún’s electricity production @ low variable cost (hydro generation + gas generation during Phase I and coal generation in Phase III)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Business Strategy

15

Evolution of Colbún’s Business Model

144% 125% 112% 97% 90% 92% 53% 70% 70% 87% 67% 74% (58%) (60%) (60%) (48%) (45%) (59%) (1%) (18%) (29%) (32%) (15%) (20%)

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43% 57% 51% 49%

3,428 MW 2,962 MW

Angostura 316 MW

Thermoelectric capacity Hydroelectric capacity

San Pedro 150 MW Other Growth Opportunities

Santa María II (350 MW) Environmental approval for the construction of a second unit Hydraulic Various water rights in different basins Geothermal Two concessions awarded for exploration, others under process Wind Two wind measurement towers located in Maule Region

Business Strategy

16

Our expansion plan

SLIDE 17

ANGOSTURA HYDRO POWER PLANT: 316 MW

Santa Barbara and Quilaco, Biobío Region

INVESTMENT POWER PLANT:

675 MMUSD

INVESTMENT TX LINE:

45 MMUSD

SPENT AS OF DEC. 2012:

532 MMUSD

ADVANCE DEC. 2012:

84%

ESTIMATE START OF OPERATION: 4Q2013

SAN PEDRO HYDRO POWER PLANT: 150 MW

Riñihue Lake, Los Ríos Region

INVESTMENT:

Under revision

SPENT AS OF SEP 2012:

112 MMUSD

ESTIMATE START OF OPERATION: Under revision ANGOSTURA SAN PEDRO

Business Strategy

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Our projects under development

SLIDE 18

Agenda

18

Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview

SLIDE 19

59% 2% 18% 29% 32% 15% 20%

200 400 600 800 1.000 1.200 1.400 1.600 2006 2007 2008 2009 2010 2011 2012 Revenues EBITDA EBITDA margin (%)

MMUSD 2006 2007 2008 2009 2010 2011 2012

Revenues 753 1,160 1,346 1,159 1,024 1,333 1,409 EBITDA 446 19 236 337 331 205 284 Depreciation (107) (118) (117) (122) (124) (125) (136) Non-operational result (43) 75 106 (51) (103) (37) (45) Exchange rate differences 12 (65) (120) 82 18 (14) 10 Income Tax (32) (1) (37) (7) (6) (24) (64) Net Income 276 (90) 67 239 116 5 49

Revenues, EBITDA (MMUSD) & EBITDA Margin

Financial Profile

19

Income Statement

 Average EBITDA 2006-2012: MMUSD 265  Non-operational result from past years affected by payments to early terminate old natural gas transport contracts  2012 Income Tax: one-time MMUSD 74 charge from increase in tax rate

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Financial Profile

20

Capital Structure and Credit Metrics

Key Credit Metrics

2006 2007 2008 2009 2010 2011 2012

Total debt to total capital (%) 18.8 26.0 25.0 27.0 31.1 30.1 32.9 Net debt to EBITDA (x) 0.4 36.6 2.3 2.3 3.1 5.9 5.3 EBITDA Interest coverage (x) 14.3 0.5 3.9 6.5 6.7 7.4 8.7

Cash, Debt & Net Debt (MMUSD)

200 400 600 800 1.000 1.200 1.400 1.600 1.800 2.000 2006 2007 2008 2009 2010 2011 2012 Cash Net debt Total debt

SLIDE 21

Financial Profile

21

Free Cash Flow Analysis

Selected Sources & Uses of Funds (MMUSD)

100 200 300 400 500 600 700 2008 2009 2010 2011 2012

K WK Capex EBITDA

 Negative FCF in past years due to intensive capex program  Intensity of capex diminishes in 2013  Expected recovery of VAT Credit in coming years (current stock of MMUSD 258)  Low dividend policy (30% of Net Income)

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Current Assets 789 Cash and equivalents 218 Accounts receivable 203 Recoverable taxes 258 Other current assets 110 Non-Current Assets 5,215 Property, Plant and Equipment 4,904 Other non-current assets 311 Total Assets 6,003 Current Liabilities 551 Long-Term Liabilities 1,940 Shareholders' Equity 3,513 Total Liabilities and Shareholders' Equity 6,003 Cash USD 218 million of cash and cash equivalents as of December 2012. Committed lines Committed back-up facility of UF 8 million (~USD 380 million), unused, signed with local counterparties. Plan to maintain a similar level of back-up liquidity facilities during the CAPEX period. Other sources of liquidity Access to additional USD 150 million in credit lines facilities and a registered commercial paper program, which we use from time to time for working capital optimization purposes

Amortization Schedule of LT Debt (MMUSD) Balance Sheet as of December 2012 (MMUSD)

22

Conservative Financial Strategy:

Smooth debt profile coupled with a strong liquidity position

Liquidity Position

Financial Profile

100 200 300 400 500 600 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29

Banks Bonds

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315 335 362 320 361 332 315 402 1Q 2Q 3Q 4Q Revenues 2011 Revenues 2012 5% 2% 29% 23% 8% 8% 37% 29% 0% 10% 20% 30% 40% 50%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12

500 1.000 1.500 2.000 2.500 3.000

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12

Sales vs. Generation - quarterly (GWh) Revenues - quarterly (MMUSD)

17 8 106 74 27 25 116 115 1Q 2Q 3Q 4Q EBITDA 2011 EBITDA 2012

EBITDA - quarterly (MMUSD) EBITDA margin - quarterly (%)

A quarterly look at Colbún’s results

23

Contractual Sales Hydro Natural gas (LNG) Diesel Coal

Financial Profile

SLIDE 24

Agenda

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Company Overview Business Strategy Financial Profile Chilean Electricity Sector Overview

SLIDE 25

Tal-Tal

Arica Antofagasta

Santiago

Castro Chaitén Cochrane

Pto. Natales

Pto. Williams

SING SIC SEA SAM

GENERATION

Regulated sectors (concessions)

RELEVANT INSTITUTIONS

Ministry of Energy Regulator: CNE Supervisor: SEC Coordinator: CDEC

3,964 MW - 25% 15.881 GWh - 25% 12,365 MW - 75% 46.052 GWh - 74% 52 MW - 0% 146 GWh - 0% 100 MW - 0% 276 GWh - 0%

3 SUB-SECTORS Chilean Electricity Sector Overview

TRANSMISSION DISTRIBUTION

4 SEPARATE GRIDS

Sector Segmentation

25

Source: CNE, December 2011

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GENERATORS

REGULATED

CUSTOMERS

DISTRIBUTION COMPANIES Regulated Auction Tariffs

UNREGULATED

CUSTOMERS

“FREE” CUSTOMERS Unregulated Auction Tariffs

SPOT

MARKET

CDEC Marginal Cost /Spot Price

41%

21%

18% 2% 1% 17%

Endesa Colbún Gener Arauco CGE Others

>15 players

Market Structure

Electricity Market Structure Main Players in the Generation Sector-SIC

26

Source: “Capacidad Empresas Generadoras CDEC, December 2011

Chilean Electricity Sector Overview

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5 10 15 20 25 30 35 40 45 50 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Others Diesel-Fuel LNG Gas Coal /Petcoke Hydro Diesel 7% Coal 27% Gas 0% Hydro 40% LNG 21% 5 10 15 20 25 30 35 40 45 50 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Unregulated Demand Regulated Demand Unregulated: ~40% Regulated: ~60%

Evolution of Power Generation and Demand in the SIC

Annual Power Generation – SIC (TWh) Annual Electricity Demand – SIC (TWh)

27

Source: “Producción Real por Sistema”, CNE/Colbún, 2012. “Informe Tecnico Definitivo SIC”, CNE, October 2011. “Informe Systep”, Systep, 2012 Source: “Generación Bruta en el SIC”, CNE/Colbún, 2012.

Chilean Electricity Sector Overview

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OBJECTIVE Meet demand at the lowest cost possible INSTITUTION Independent load dispatch center (CDEC) coordinates the efficient dispatch of electricity producers MODEL CDEC dispatches plants in ascending order of variable production cost Prices vary according to the type of customer: REGULATED CUSTOMERS 1) Node Price: calculated by the CNE every 6 months 2) Auction Price: auctioned under the supervision of the Regulator for bilateral LT contracts UNREGULATED CUSTOMERS 3) Market Price: free price settled by both parties for bilateral contracts OTHER GENERATORS 4) Spot Market Price: the variable cost of the most expensive dispatched plant at each moment of the day All facilities are also paid a capacity charge for being available Hydro OC-Diesel Coal Thermo-Diesel Output from available plants (MWh) Variable Cost of the Plants (USD/MWh) CC-Diesel

Dispatched Plants Back Up Plants

*Margin = [Spot Price - Var. Cost]

Plants receive revenues from Capacity charge Plants earn a Margin*

CC-LNG SPOT PRICE

Marginal Cost of the System

Demand Curve

Dispatch and pricing model: a technical guide

Dispatch Model Dispatch Scheme Pricing Model

28

Chilean Electricity Sector Overview

SLIDE 29

Source: “Costos reales marginales mensuales Alto Jahuel”, CDEC/ Colbún; “Historia precios nudos”, CNE; “Informes Mensuales Systep”, www.systep.cl Note (*): The market Price is calculated by the Regulator upon information provided by all generation companies. This average price does not includes the capacity charge component.

Evolution of electricity prices

Electricity Prices-SIC (USD/MWh)

29

50 100 150 200 250 300 350 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1) Energy Node Price Alto Jahuel (USD/MWh) 2) Average Auction price (USD/MWh) 3) Average Market price (USD/MWh)* 4) Energy Spot Market Price Alto Jahuel (USD/MWh)

Chilean Electricity Sector Overview

SLIDE 30

10 20 30 40 50 60 70 2011 2012 2013 2014 2015 2016

Source: “Informe Técnico Definitivo Fijación Precio Nudo SIC” ,CNE/Colbún, April 2012

Demand and Supply: what to expect in the coming years

Electricity Demand - SIC (TWh) Available Power by type - SIC (MW)

30

Source: “Informe Técnico Definitivo Fijación Precio Nudo SIC” ,CNE/Colbún, April 2012 (1) Considering normal hydro conditions (2) Real gas output depends on fuel availability

2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 2011 2012 2013 2014 2015 2016

Hydro (1) Wind Coal Gas (2) Diesel Max demand Min demand Average demand

Additional installed capacity: 562 MW Hydro 214 MW Wind 927 MW Coal 0 MW Gas and Diesel

Chilean Electricity Sector Overview

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