3. 3
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
4. 4
ISA - Profile
More than 48 years of experience in the energy transmission sector
Assets in energy transmission, telecommunications and highways
Footprint in Brazil, Chile, Argentina, Colombia, Peru, Bolivia and Central
America
USD 890 milllion in operating revenue in the first quarter of 2013
Long-term financial investor with focus on optimizing of capital structure
CTEEP is a component of one of the largest energy transmission groups in Latin America
Consolidated EBITDA by businessConsolidated EBITDA by country
39%
27%
21%
11%
Colombia
Chile
Brazil
Peru 67%
27%
4%
2%
Transporte de
energia
Concessões Viárias
Telecomunicação
Gestão de Sistema
em tempo Real
Electric Energy
Transport
Road Concessions
Telecommunications
Transport
Smart Management
of Real Time System
5. 5
MEGA Achievements
Targets for 2016 Goals reached by 2012
Revenue of USD 3.5 billion USD 2.434 billion (70%)
80% of revenue generated outside
Colombia
USD 1.664 million (68%)
20% of revenue from different Energy
Transmission sectors
USD 538 million (22%)
Presence in 50% of energy
interconnections
International interconnections
Business diversification Entry into the Highway
Concessions business
Largest data transmitter in the Andean
Region
Continental leadership in
connectivity infrastructure
Development of future energy markets Energy derivatives negotiation
system
6. 6
Up to the current time ISA’s growth exceeded targets
<Progress at MEGA
Revenue in US$ MM
2,410
1,931
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2006 2007 2008 2009 2010 2011
CAGR1
+20%
+25%
MEGA upward path defined in 2006
ISA Revenue
CAGR- Compound Annual Growth Rate
SOURCE: 2011 Consolidated Results Statement and Consolidated Financial Plan updated in August 2012
7. 7
ISA’s growth exceeded other benchmark companies in
electric energy transmission
28
20
13
12
11
9 9
5
sOURCE: Financial information from ISA for August 2012; CPAT; Working team’s analysis
Average annual growth in revenue
%, CAGR1 2006-11
14%
average
1 CAGR- Compound Annual Growth Rate )
2 CAGR 2007-2011
3 CAGR 2010-2011
8. 8
Results 2006 -2012
1
Year
2006
Year 2012
Geographical expansion, diversification
16,836 km to 40,626 km of circuits (142%).
4,267 km to 22,730 km of optic fiber cable
(433%).
6 to 30 companies.
Entry into the Highway Concessions
business.
Transformation of Markets’ Operation and
Management business.
Financial and economic management, growth
100% in assets.
113% in operating revenue.
161% in EBITDA.
81% in profits.
70% share appreciation (closing 2005).
About US$ 500 million in dividends.
9. 9
Corporate Strategy - Consolidation
START
GROWTH
MATURITY
… recognize and
consolidate the
capacity both in scale
and jointly for
preparing the
foundations for the next
phase of the growth
cycle.
10. 10
Corporate Strategy - Guidelines
Group returns
as the principal
strategic
aspiration
Mix of businesses and geographies: on the basis of synergy of existing
assets and capacities, principally in Colombia, Brazil, Peru and Chile.
Growth: will depend on the opportunities for achieving the desired level of
return (higher).
ISA’s vocation: creation of value through “excellence” in operation and
development of the infrastructure.
Capture of growth
opportunities with
higher returns
1
Improvement in
returns from current
businesses and
“core” business
2
Dynamic adjustment of
businesses and
geographies portfolio
3
11. 11
ISA is aligned around 3 strategic axes
Capture of growth opportunities with
higher returns for ISA
▪ Focus on profitable opportunities in
Energy Transmission (ET)
–Focus on growth opportunities in higher
return ET segments
–Selective participation in new tender bids
(according to the degree of synergies with
current assets, expansion in sub-
transmission assets)
–Opening up of new markets with
opportunities for creating value through
restructuring
▪ Development of highway concessions,
principally in Colombia
▪ Capture of highly synergetic opportunities
in other businesses such as:
–Telecoms1
–Real Time Systems Intelligent Management
Dynamic adjustment of business
and geographies portfolio
Maintain active a constant reflection
on opportunities for adjusting the
portfolio based on criteria of:
–Potential for value creation at ISA in
relation to the value for a third party
–Access to profitable growth
opportunities
–Return in relation to other options
1
Improvement in returns from
current Group businesses and
"core" business
▪ Improvement in Group O&M through
identification and extension of best
practice in a transversal manner
▪ Leveraging of the Group scale in
supplies of equipment, materials and
projects
▪ Ensure cost and delivery and
optimization of CapEx
2 3
12. 12
ISA’s Vision
ISA will have a higher return than the cost of equity and long-term stability.
In the Energy Transmission business, ISA will maintain its position of operator with the largest
footprint in Latin America, consolidating its position in the region and reaching high levels of
operating efficiency aligned to best global practices.
In the Highway Concessions business, ISA will capture opportunities in the region with a focus
on Colombia.
In the Telecoms Carrier Network business, ISA will consolidate its leadership as na independent
carrier in Latin America, developing an IP (internet protocol) ecosystem in the region.
ISA will expand its Real Time Systems Intelligent Management with new services, accessing
new highly profitable opportunities in other sectors.
ISA 2020
By 2020, ISA will have multiplied its profits 3 times through
the capture of the most profitable growth opportunities in the
existing businesses in Latin America, increase
in efficiency and portfolio optimization.
14. 14
Strategic Guidance Cycle 2013
ISA’s
Strategic
Update
ISA’s
Strategic
Update
New scenario
for the sector
New scenario
for the sector
Company
Profile Post
Concession
Rollover
Company
Profile Post
Concession
Rollover
New scenario
for the sector
New scenario
for the sector
Company
Profile Post
Concession
Rollover
15. 15
Regulatory challenges
Indemnification for the existing system (ES)
Indemnification for the improvements
Remuneration of future improvements
Capital Structure
Adjustment to the new operating reality
Reduction in debt to the new optimum financial leverage
Preference for long-term financial resources
Operating Efficiency and Growth
Optimization of costs
Efficiency in the investments in capacity upgrades and improvements
Selectivity in participating in auctions and acquisitions
Challenges
16. 16
Strategic Focus
Atualização da Estratégia
CTEEP’s strategy implies efforts in the direction of PRODUCTIVITY AND EFFCIENCY,
Responding to the requirements of an increasingly demanding and dynamic market,
with outstanding RETURNS.
For the 2013/2014 cycle, CTEEP has itemized some strategic initIatives:
Smart Grid
Optimization of Costs
Capital Structure and Debt
Endividamento
Regulatory Management
Updating of Strategy
17. 17
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
18. 18
Operating performance
The indicator for first half results remained at 99.97% for
Transformers and 99.99% for Transmission Lines, showing
an excellent Operating Performance.
ENES – Energy Not Supplied
Uptime Indicator
1285.16
1208.42
1057.37
173.78
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
19. 19
Parcel A Cost Variation Account
Source: ONS
0.66%
1.26%
0.20%
0.44%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
1.10%
1.20%
1.30%
1.40%
1.50%
JUL AGO SET OUT NOV DEZ JAN FEV MAR ABR MAI JUN
Transmissoras Ciclo 11/12 Transmissoras Ciclo 12/13 CTEEP Ciclo 11/12 CTEEP Ciclo 12/13
1.26%
0.66%
0.44%
0.20%
Transmitters 11/12 Cycle Transmitters 12/13 Cycle CTEEP Cycle 11/12 CTEEP Cycle 12/13
AUG SEP OCT NOV DEC JAN FEV MAR APR MAY JUNJUL
20. 20
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
28. 28
Debt
29.4%
60.2%
10.1%
0.2%
Distribuition of
debt contracting
BNDES Comercial Papers Debêntures Banks Others
29.4%
56.5%
3.7% 10.3%
Interest Rate
TJLP CDI IPCA Others
FUNDING CHARGES MATURITY 2Q13 2012
BNDES
TJLP + 2,3% year 15/06/15 187,884 234,681
TJLP + 1,8% year 15/06/15 112,627 140,798
Comercial Papers
6th Series - CTEEP 104,9% CDI yera 05/01/13 0 433,873
Debêntures
1st Issuance - CTEEP CDI + 1,3% year 15/12/14 326,282 325,959
2nd Issuance - CTEEP IPCA + 8,1% year 15/12/17 70,747 70,915
Single Series - CTEEP 105,5% do CDI year 02/07/14 752,858 726,476
Banks
USD + 4% year 26/04/13 0 132,309
USD + 2,1% year 21/10/13 192,809 177,318
Eletrobras 8% year 15/11/21 315 340
Leasing - - 4,207 5,048
TOTAL CTEEP: 1,647,729 2,247,717
BNDES
IEMG TJLP + 2,4% year 15/04/23 49,953 52,513
TJLP + 2,6% year 15/05/26 45,912 47,758
5,5% year 15/01/21 76,274 80,152
TJLP + 1,9% year 15/05/26 47,933 49,801
TJLP + 1,5% year 15/05/26 41,412 43,038
TOTAL SUBSIDIARIES 261,484 273,262
Total Consolidated (R$ mil) 1,909,213 2,520,979
SERRA DO JAPI
CTEEP
CTEEP
PINHEIROS
29. 29
Breakdown of Net Debt
(*) As from January 2013, the Company’s financial investments have been concentrated in exclusive
investment funds. These are made up of highly liquid investment fund units, readily convertible into
cash, irrespective of the maturity of the assets.
Debt 1,909.2 2,521.0
Short-term Debt 549.6 28.8% 1103.2 43.8%
Long-term Debt 1,359.6 71.2% 1,417.8 56.2%
Cash* 1233.6 309.6
Net Debt 675.6 2,211.4
EBITDA 12 months 823.2 1,370.5
Net Debt/Ebitda (Last 12 months) 0.8 1.6
Debt
(BRLm)
Consolidated
20122Q13
30. 30
Debt Repayment
(R$ millions)
Future Cash (NI) 2013 2014 2015 Total
Accounts Receivable (NI) - (projection) 286.0 572.1 333.7 1,191.8
Interest Income on the Accounts
Receivable (projection)
55.5 69.3 12.0 136.8
Total 341.6 641.4 345.7 1,328.7
Position of the Fund on 06/30/13: R$ 1.221.8
454.7
1,097.6
124.1
48.1 48.1
136.7
2013 2014 2015 2016 2017 After 2017
CTEEP Subsidiaries
31. 31
Debt Joint Ventures
IE MADEIRA ITAÚ BBA IPCA + 5,5% a.a. 3/18/2025 183.1
IE MADEIRA BNDES TJLP + 2,42% a.a. 2/15/2030 736.9
IE MADEIRA BNDES 2,5% a.a 10/15/2022 119.6
IE MADEIRA BASA 8,50% a.a.* 10/10/2032 140.5
Total IE Madeira (51% CTEEP) 1,180.1
IENNE BB CDI + 1,35% a.a 7/18/2013 4.4
IENNE BNB 8,50% a.a.* 5/19/2030 53.8
Total IENNE (25% CTEEP) 58.2
IEGARANHUNS HSBC 106,50% CDI 4/30/2014 96.6
Total IE GARANHUNS (51% CTEEP) 96.6
IE SUL BNDES 5,50% a.a. 1/15/2021 4.3
IE SUL BNDES TJLP + 2,58% a.a. 5/15/2025 4.4
8.7
1,343.5
Value (R$ MM)
Total IE SUL (50% CTEEP)
TOTAL (R$ milhões)
Subsidiarie Bank Charges Maturity
32. 32
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
33. 33
Capital Market
Total Trade: 126,096
Daily Average/Day: 985
Market value 06/30/13
R$6,2 billion70.00
100.00
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
TRPL3 TRPL4 IBOVESPA IEE
-11.76%
-22.14%
1.55%
12.25%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13
Trade Financial - 06/30/2013
(R$ million)
Total R$ 936 Million Daily Average / Day R$ 7.3 million
34. 34
On July 18, 2013, CTEEP engaged Credit Suisse to be the Market Maker for TRPL4
to enhance the liquidity of its preferred shares, thereby increasing the number of
transactions and trading volume.
In addition to offering greater secondary market liquidity, this initiative (which complies
with the regulations established in CVM Instruction 384/2003) seeks to ensure that
TRPL4 remains a component of BM&FBOVESPA’s IBrX-100 and Ibovespa stock
indices (sharply impacted since the publication of MP-579/2012)
Market Maker
First results: Principal Characteristics
Maximum
spread
1.50%
Minimum lot
available
2.000 shares
35. 35
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
36. 36
Tariff Readjustment
Ratifying Resolution 1.595 of June 27, 2013
Cycle: July 1, 2013 to June 30, 2014.
Indices used for readjustment:
IPCA/ IBGE
Jun/12 to May/13 = 6.50% (NI authorized after June/2012)
Out/12 to May/13 = 4.93% (O&M in the agreement addendum)
Dec/12 to May/13 = 3.69% (AI – Adjustment Installment) after
December/2012)
IGP-M / FGV
Jun/12 to May/13 = 6.22% (NI prior to June/2012)
Jun/12 to Nov/12 = 4.46% (AI prior to December/2012)
Analysis of RAP Cycle 2013-2014
38. 38
Agenda
CTEEP - Operating Performance
Financial Results 2Q13 and 1H13
ISA and CTEEP – Strategic Review
Annual Tariff Readjustment – 2013/2014 Cycle
Capital Markets Performance
IFRS X Regulatory
39. 39
IFRS X Regulatory - Company
(R$ million) IFRS
Regulatory
(not audited)
1S13 1S13
Net operating revenue 402.2 340.4 61.8
Receita de uso da rede elétrica 329.9 (329.9)
Revenue from Construction Services 55.1 0 55.1
Revenue from Operational and
Maintenance Services
288.2 0 288.2
Financial Revenue 48.5 0 48.5
Other Revenue 10.5 10.5 0.0
Deductions from Operating Revenue (56.9) (51.2) (5.7)
Net Operating Revenue 345.3 289.2 56.1
Costs and Operating Expenses (324.1) (244.0) (80.1)
Personnel (122.9) (122.9) 0.0
MSO (90.1) (89.2) (0.9)
Contingencies (31.9) (31.9) 0.0
Construction costs (50.0) 0 (50.0)
Improvements (29.2) 0 (29.2)
Depreciation/Amortization (3.6) (6.6) 2.9
Financial Result 60.0 60.0 0.0
Equity 53.6 6.9 46.6
Amortization of goodwill (14.9) (14.9) 0.0
Other Operating (expenses/income) 16.8 15.8 1.0
Operating Income 133.1 106.4 26.6
IR & CSLL (14.6) (21.5) 6.8
Net Income 118.4 85.0 33.4
Results
Adjustments/
Reclassification
40. 40
IFRS X Regulatory - Consolidated
(R$ million) IFRS
Regulatory
(not audited)
1S13 1S13
Net operating revenue 469.2 381.1 88.1
Receita de uso da rede elétrica 371.1 (371.1)
Revenue from Construction Services 85.8 0 85.8
Revenue from Operational and
Maintenance Services
298.9 0 298.9
Financial Revenue 74.5 0 74.5
Other Revenue 10.0 10.0 (0.0)
Deductions from Operating Revenue (63.1) (55.1) (8.0)
Net Operating Revenue 406.1 326.0 80.1
Costs and Operating Expenses (364.6) (252.5) (112.1)
Personnel (126.6) (126.6) 0.0
MSO (98.0) (94.0) (4.0)
Contingencies (31.9) (31.9) 0.0
Construction costs (78.1) 0 (78.1)
Improvements (30.0) 0 (30.0)
Depreciation/Amortization (3.6) (17.2) 13.6
Financial Result 50.9 50.9 (0.0)
Equity 44.5 (0.3) 44.8
Amortization of goodwill (14.9) (14.9) 0.0
Other Operating (expenses/income) 16.7 15.8 0.9
Operating Income 135.0 107.8 27.2
IR & CSLL (16.6) (22.9) 6.3
Net Income 118.4 85.0 33.5
Results
Adjustments/
Reclassification
41. 41
Disclaimer
All statements contained herein with regard to the Company’s
business prospects, projected results and the potential growth
of its business aremere forecasts, based on local management
expectationsin relation to the Company’s future performance.
Dependent as they are on market shifts and on the overall
performance of the Brazilian economy and the sector
and international markets, such estimates
are subject to changes.
42. 42
Investor Relations
Tel: +55 11 3138-7557
ri@cteep.com.br
www.cteep.com.br/ri
Ethics Line Channel
www.canalconfidencial.com.br/linhaeticacteep
or by calling 0800 777 0775