GRUPO EPM Financial Statements Fourth Quarter 2010 Disclaimer 2 - - PowerPoint PPT Presentation

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GRUPO EPM Financial Statements Fourth Quarter 2010

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Disclaimer

This document was prepared by EPM to provide interested parties with information on the company’s financial aspects. This document may include discussions of strategy and statements about the likely development of the EPM business. They include information on the company’s estimates or expectations for its future performance and operations. Potential investors and the market in general should be aware that the information contained herein is not a guarantee of performance or the risks and uncertainties that may occur or materialize. Actual results may vary and differ from those provided herein due to several factors beyond the company’s control. Neither EPM nor its advisors, officers, employees, directors or agents, or representatives assume any responsibility in the company’s performance of actual events if it differs from what is provided herein. In addition, EPM’s advisors, officers, employees, directors or agents shall have no obligation to update, amend, modify or adjust this presentation with facts that may occur after this communication. This presentation is for discussion purposes only, and it should only be referenced considering the verbal information provided by EPM, otherwise it would be incomplete. Neither this presentation nor any of its contents may be used for any other purpose without EPM’s prior written consent.

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Significant events during the quarter Financial performance Subsequent events

Agenda

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The year 2010 was an opportunity to consolidate several courses of action that we have been developing since 2008, when EPM’s management began its term. The figures, achievements, and times included in this report are the tangible result of this organization’s achievements over the past seven years, with a clear goal expressed as EPM’s main purpose with the word “Sustainability,” defined as the set of economic, social and environmental factors that make the company’s existence in the long term possible.

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Significant events during the quarter

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Significant events during the year

Porce III Hidroituango

On December 20, this power plant’s first generating unit went into production, thus meeting the work schedule and commitments agreed to with the Government. In 2011, it is expected that all three remaining units to complete the 660 megawatts that will it provide to the country through the national grid. The Institute for the Development of Antioquia, IDEA, and EPM’s parent company signed a binding agreement for the latter to fully develop the Hidroituango project, i.e., to finance, build,

• perate, maintain and later restore the power

plant to the Hidroituango Company.

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Significant events during the year

Foreign Investments

In furtherance of its growth strategy, and with an investment of USD$635 million, EPM acquired assets for the generation, distribution and transmission of electricity in Guatemala through the companies GESA DECA II and Genhidro.

Debts

In order to leverage its growth strategy, EPM signed loans amounting to approximately USD$790 million in

• 2010. UNE Telecommunications also issued USD$158

million in 10 years bonds

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the Colombian government bond market.

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Financial performance

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EPM Group - Development

Figures in million of dollars

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 2007 2008 2009 2010

Revenues

Revenues

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2007 2008 2009 2010

Balance Sheet

Assets Liabilities Equity

TACC:14% TACC:16% TACC:26% TACC:12%

Over the last four years, EPM Group s revenues shows an annual growth rate of 14%. Over the last four years, EPM Group s assets shows an annual growth rate of 16%.

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Revenues

During 4Q10, net income grew to USD$1,168 million, a 35% increase over 4Q09. During the course of the year, revenue rose to US $4,257 million, showing an increase of 21% over the previous year.

Figures in million of dollars

200 400 600 800 1,000 1,200 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010 2 Q 2010 3 Q 2010 4 Q 2010

57 80 90 77 81 82 86 87 226 232 244 227 266 287 259 289 402 589 639 562 664 685 705 792 Energy Telco Water

66% 8% 26%

Accrued as of December

Energy Water Telco

Over the last four years, EPM Group s revenues shows an annual growth rate of 14%.

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Costs and Expenses

Figures in million of dollars

During 4Q10, costs and expenses rose to USD$804 million. During the course of the year, costs and expenses rose to USD$2,794 million.

100 200 300 400 500 600 700 800 900 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010 2 Q 2010 3 Q 2010 4 Q 2010

27 40 37 49 42 38 45 50 175 175 185 149 189 211 187 214 236 350 372 400 428 439 427 540 Energy Telco Water

65% 6% 29%

Accrued as of December

Energy Water Telco

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EBITDA

During 4Q10, EBITDA rose to USD$364 million with an EBITDA margin of 31%. Accumulated EBITDA was USD$1,463 million, which represents an EBITDA margin of 34%.

Figures in million of dollars

50 100 150 200 250 300 350 400 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010 2 Q 2010 3 Q 2010 4 Q 2010

30 40 53 28 39 44 40 37 51 58 60 78 76 75 72 75 167 239 267 163 237 246 278 252 Energy Telco Water

69% 11% 20%

Accrued as of December

Energy Water Telco

Over the last four years, EPM Group s EBITDA shows an annual growth rate of 10%.

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Net income

Figures in million of dollars During 4Q10, net income was USD$154 million. The accumulated net income was USD$716 million, and represented a net margin of 17%. During the course of the year, Group EPM did not recorded the non-operating income than the last year, because in 2009 those were higher: the exchange difference because the revaluation, interest income was lower in 2010. Likewise, the non-operating expenses were higher, Pension plan increases due to the rise in life expectancy in Colombia.

50 100 150 200 250 1 Q 2009 2 Q 2009 3 Q 2009 4 Q 2009 1 Q 2010 2 Q 2010 3 Q 2010 4 Q 2010

15 26 18 89 25 21 21 91 8 4 10 33 8 18 10 10 115 160 199 39 157 141 167 52 Energy Telco Water

72% 22% 6%

Accrued as of December

Energy Water Telco

Over the last four years, EPM Group s net income shows an annual growth rate of 8%.

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2,000 4,000 6,000 8,000 10,000 12,000 14,000 Current A. 2,527 Non - Current A. 13,362 Current L. 1,700 Non - Current L. 4,123 Minority 464 Equity 9,601

Balance Sheet

Figures in million of dollars

Grupo EPM’s assets totaled USD$15,888 million, a 23% increase over December 2009. Liabilities were USD$5,823 million, and represented a 37% debt ratio. The equity was USD$9,601 million, an increase of 11%.

40% 41% 4% 12% 16%

70% 14% 16%

Activos

Energía Aguas Telcom.

Over the last four years, EPM Group s assets shows an annual growth rate of 14%.

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Indicators

Indicators 2010 2009 % Prev. Year EBITDA margin 34% 36%

• 4%

Operating margin 21% 24%

• 13%

Net earning margin 17% 21%

• 20%

Liquidity 1.49 1.85

• 20%

Total indebtedness 37% 30% 22% Financial indebtedness 20% 16% 31% Equity profitability 8% 9%

• 13%

Asset profitability 0.05 0.06

• 22%

EBITDA/Financial expenses 12.01 8.22 46% Debt/EBITDA 2.15 1.52 42%

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Events following closure of the quarter

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ENSA and DELSUR EPM and AEI signed an agreement on January 19, 2011 to acquire for 100% of two companies in the electricity field in Central America for USD$200 million: Panama Distribution Group (PDG), which owns 51% of the shares in Elektra Noreste S.A. (ENSA), and AEI El Salvador Holdings Ltd., which has an 86.41% ownership stake in Distribuidora de Electricidad del Sur (DELSUR). The negotiations also included controlling shareholder participation in the following companies formed to provide services to the latter: Electricidad de Centroamérica Ltda. de C.V. PPLG El Salvador II, and Innova Tecnología y Negocios S. A. de C.V.

Events following closure of the quarter

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International Bond Issuances In furtherance of its financing plan, on January 24, 2011 EPM issued US $680 million in ten year bonds on the international capital market, at a rate of 8.375% annually. With this operation, EPM consolidated its presence

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the international capital market after its successful debut in July 2009. This issuance, under Rule 144A/Regulation S of the Securities Act de 1933, was made in Colombian pesos, taking advantage of the advantageous financial conditions offered by the international capital market and, at the same time, to hedge variations in the exchange rate.

Events following closure of the quarter

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Establishment of de EPM Ituango S.A. E.S.P. Consistent with the agreement signed with IDEA, EPM established a subsidiary, EPM Ituango S.A. E.S.P., through which the Ituango hydroelectric project will be fully performed.

Events following closure of the quarter