9M2010 Results, Y2010 Forecast

1. IDGC OF CENTER:
RESULTS OF 9 MONTHS,
FORECAST FOR 2010
1

2. Disclaimer
The information in this presentation was received from the sources which, in opinion of IDGC of Centre (“the Company”), are reliable.
Nevertheless, we do not guarantee accuracy of the given information which may be short or incomplete. All opinions and estimations
containing in the present material reflect our opinion at the date of publication and are subject to change without notice.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase
or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part of it nor the fact of its
presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision.
The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that
are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other
things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the
Company operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks
and uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not
occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its
actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may
differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if
the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company
operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be
indicative of results or developments in future periods
The Company does not bear the responsibility for consequences of use of opinions containing in the present report or applications, or
for incompleteness of the information. No person is under any obligation to update or keep current the information contained herein.
By attending the presentation you agree to be bound by the foregoing limitations..
2

3. IDGC of Center - an attractive target
for investments
• The transition to a new system of tariff regulation - RAB;
Leader in the • The first IDGC which has completely transited to the RAB-based regulation (11
transition to branches):
RAB-based 2009 - 3 branches
regulation 2010 - 8 branches
• Maintained a high level of iRAB – RUR 116 billion
Achievements of the management team:
Strong team • Developed and implemented a system of KPI, matrix management;
of managers • Good financial condition, positive dynamics on all key financial and operating
indicators;
• A transparent system of corporate governance;
• Implementation of stock option plan in 2011
• Investment "history" of the network complex attracts attention of analysts and
investors:
Prospects - since the beginning of the year capitalization of the Company increased by 82%;
of growth - sector is significantly undervalued - the growth potential according to
estimations of analysts of major investment banks in relation to their foreign
counterparts;
• Reducing losses and increasing reliability of the network assets of the Company in
medium term due to the transition to RAB-based regulation and on-time
implementation of large-scale investment program
3

4. Company‟s storyline
April „07 January„09 3 branches of the
December „04 The final structure of the Company transferred to RAB;
IDGC of Centre and North Company was approved, April „09 Company‘s shares were
Caucasus is registered the Company now includes included into quotation list ―B‖ of
aimed at further 11 regional grid companies MICEX
interregional integration in Central Russia (decision November „09 The Company was
through merger with the of the Board of Directors of assigned Standard & Poor's credit
Companies of DGC RAO UES of Russia) rating "BB-"
2004-2005 2006 2007 2008 2009 2010
March „08 Adherence of January „10 Another 2
DGCs to IDGC of Centre branches transferred to RAB:
May „08 Company‘s shares Kurskenergo, Yarenergo
„06 were launched for trading at July „10 Rating Agency S&P
Enhancement of MICEX (MRKC) and RTS approved the Company‘s
DGC management July „08 JSC ―IDGC credit rating ―BB-‖, forecast
system. Transferring Holding‖ became the ―Stable‖
of powers of the majority shareholder of the Nov – Dec „10 FST of Russia
DGC sole executive Company approved the transition to
body to the Company October „08 Shares of RAB of the remaining6
IDGC of Centre were branches (Bryanskenergo, Orelenergo,
included in calculation base Kostromaenergo, Tambovenergo,
Voronezhenergo, Smolenskenergo)
of MICEX PWR
4

5. Key indicators
Capitalization RUR 56.15 bln
(as of 23.11.2010) USD 1.81 bln
Amount of shareholders 15,157
(as of 12.05.2010)
Revenue
(RAS 2009) RUR 49.1 bln
(RAS 9months 2010) RUR 43.4 bln
Net profit
(RAS 2009) RUR 1.3 bln
(RAS 9months 2010) RUR 3.8 bln
Net assets RUR 45.1 bln
(RAS as of 30.09.2010)
Output 53.1 bln kWh
(2009 ) 40.68 bln kWh
(as of 30.09.2010
Length of power lines
(overhead 0.4 — 110 kV power lines 376.9 thousand km
The Company is a natural monopoly, as of 30.09.2010)
tariffs are regulated by state
Capacity of substations
(as of 30.09.2010)
35 — 110 kV 31.2 GVA
6 — 10/0.4 kV 15.0 GVA
Number of personnel 27,920
(as of 30.09.2010)
5

6. Structure of Group of Companies
IDGC of Center . Key shareholders
State
52.69%
JSC “IDGC Holding”* Minority shareholders
50.23% 49.77%*
Group
of Companies
JSC “IDGC of Center”
Branches
100% Subsidiaries 51%+49%
Belgorodenergo Yarenergo JSC “Energetik”
JSC
“Yargorelektroset”
Брянскэнерго Tverenergo - August 3, 2010
51%
JSC “IDGC of Center” signed a
Воронежэнерго Tambovenergo contract for the acquisition of a
JSC “YarESK” controlling stake in JSC
“Yargorelektroset” - one of the
Kostromaenergo Smolenskenergo largest TSO in CFD. As a result
- November 11, 2009 of the transaction under the
Subsidiary company JSC control of JSC “IDGC of Center”
Kurskenergo Orelenergo "Energetik" acquired a will be more than 90% of the
controlling stake in JSC assets of the power grid complex
Lipetskenergo Operational ―YarESK‖- the target of the Yaroslavl region (the deal
is on the completion stage)
business units company for the
consolidation of power grid
11 branches assets in the Yaroslavl region
* - taking into account the State‘s share 0.46%
6

7. Share capital structure
IDGC of Center has a diversified share capital
structure. Free float according to the Company‟s
management estimations is about 30%.
* - as of 12.05.2010
7

8. Developed structure of management bodies…
High authority:
External bodies responsible for monitoring
financial and economic activities: General Meeting of
Shareholders
Auditor
Strategic management body:
Internal Audit
Commission Board of Directors Committees (5):
Executive bodies:
Committee on Strategy and
Management Board Development (1)
Chairman of the MB– Reliability Committee
Director General (2)
Committee on Personnel and
Remuneration (3)
Control bodies over the Company’s Internal Control and Audit
business activity Committee on Audit(4)
Department
Bodies providing recommendations for
the Board of Directors over the Company’s
Committee on Technological
Internal control bodies over business activity Connection (5)
strategic development
formed in 2009
…meets international corporate governance standards
8

9. Strategic vision of the Company‟s
management – industry leadership…
Goals of the Company Target subsystems of the
management:
• Growth and changes
Industry • Finance
leadership • Consumers
• Main business processes
• Management system
• Personnel
Challenges of the top level
Growth Finance Consumers Processes Management Personnel
Realize efficient and
Ensure
Ensure
safe functioning and development and Enhance
long- term Enhance the Ensure
innovative efficient efficiency of
growth of efficiency of effective sales of development of functioning of human
shareholder business services electricity network management resources
capital value complex
system
... a tool to achieve - the project approach, KPI system
9

10. Credit rating
Scale Outlook
of international (C-Stable)
rating (Н-Negative)
(in foreign
currency) History of credit rating
In 2009 Standard&Poor‟s Confirmed July „10
assigned credit rating to the Assigned November ‗09
Company «ВВ-/В/ruAA-»
forecast «Stable»,
In July 2010 the rating was
confirmed on the same level
MUEC
IDGC
of
Centre
Mosenergo The level confirms the
Company‟s ability to
extend credit
10

11. National rating of CG
History of RCG of IDGC of Center
Confirmed July‟ 10
Assigned September ‗08
Developed practice of
corporate governance
Rating NRCG 7 indicates
low risks of corporate
governance, compliance
with the RF legislation
“7” Developed practice of
and the Code of corporate governance.
Corporate Behavior Leading position
among IDGCs
11

12. Stock market
Dynamics of changes in IDGC of Centre
share price, MicexPWR
and Network Index for 10 months 2010
90%
Start of trading: МРСКof Center
IDGC Центра From 31.12.2009
c 31.12.09
80% MicexPWR
MICEX-PWR
May 21, 2008 Индекс Сети
Index “Network”
70%
Quotation list: 60%
«B» MICEX
50%
IDGC of Centre shares are 40%
included in MICEX PWR, 30%
RTSeu index calculation base
20%
10%
0%
Ticker symbols
-10%
31.12.09
25.01.10
09.02.10
26.02.10
15.03.10
30.03.10
14.04.10
29.04.10
14.05.10
31.05.10
15.06.10
30.06.10
15.07.10
30.07.10
16.08.10
31.08.10
15.09.10
30.09.10
15.10.10
29.10.10
MICEX MRKC
RTS classic MRKC
RTS stock MRKCG
12

13. Key indicators of stock market:
2nd place on capitalization among IDGCs…
Capitalization of distribution grid companies as of Market multiples on IDGCs and foreign
31.12.10 and of 29.10.10, RUR bln (MICEX) companies-analogues *
90 25,00
78
80 22,2
70 62
60 53 20,00
50
40 34 33 30 29 28 26 21
30 26 15,00 12,9
21 23 22 23 22
20 9 6 11,2
9 10,2
10 4
0 10,00
МРСК Центра
ЛенЭнерго
МОЭСК
МРСК Северо-Запада
IDGC МРСК Юга
МРСК Центра и Приволжья
МРСК Сибири
МРСК Урала
IDGC ofСеверного Кавказа
МРСК Волги
IDGC of Volga
Volga
Lenenergo
IDGC of Centre
of South
IDGC of Centre and
IDGC of Siberia
MOESK
IDGC of North-West
IDGC of Urals
МРСК North Caucasus
5,5 5,8
5,00
1,0 0,9 2,2
0,00
EV/S 2010П EV/EBITDA 2010П P/E 2010П
МРСК Центра
IDGC of Center
Капитализация на 31.12.09, млрд. руб. bln.RUR
Capitalization as of 31.12.2009, Среднее по российским аналогам
Average on Russian companies
Капитализация на 29.10.10, млрд. руб. bln.RUR
Capitalization as of 29.10.2010, Average on developing countries
Среднее по развивающимся странам **
* Calculations of the Company, data of investment banks covering the activities of IDGCs
** Calculations of the Company, data of investment banks covering the activities of IDGCs … potential of growth relative to foreign
(foreign analogues: Eletropaulo, Compania General de Electricidad,
Aksu Enerji ve Ticaret, etc.) companies-peer group
13

14. Key indicators of stock market:
2nd place on volumes of trades among IDGCs…
Day-average number of contracts
Stock turnover at MICEX, Jan- Oct 2010, RUR mln at MICEX.pcs.
1000
4 000 900
3 050
3 500 800
3 000 700
2 500
2 000 600
1 500 500
1 000
500 400
283
0 300
200
100 20
0
Proportion of shares in the nominal holding by Average bid-ask spread of MRKC
depository exchanges 2009-2010gg: at MICEX (%) , 2009-2010
40% 7,00%
35% 3,06% 6,00%
4,86%
30% 5,00%
25% 28,74%
4,00%
20%
3,00%
15%
10% 2,00%
5% 1,00% 0,36%
0% 0,00%
НДЦ (% от УК)
ДКК (% от УК)
… significant decrease of bid-ask spread
14

15. IDGC of Centre
• RAS: 9 months 2010, forecast for 2010
• Transit to RAB-based regulation
15

16. Revenue by activities: results, forecast (RAS)
REVENUE, RUR BLN
70
60,12
60
49,05
50
35,66
40 32,40 ELECTRICITY DISTRIBUTION
30 REVENUE, RUR BLN
70
57,1
20 65
60 46,9
10 55
0 50
‗07 ‗08 ‗09 ‘10(п) 45 32,6
40
35 29,3
OTHER ACTIVITY 30
TECHNOLOGICAL CONNECTION 25
20
ELECTRICITY TRANSMISSION 15
10
5 TECHNOLOGICAL CONNECTION
0 REVENUE, RUR BLN
‗07 ‗08 ‗09 ‘10(п)
2,62 2,5
3 2,30
OTHER TGC‟S REVENUE TRANSIT 2 1,65
1
REVENUE W/O OTHER TGC‟S 0
‗07 ‗08 ‗09 ‘10(п)
TECHNOLOGICAL CONNECTION
16

17. 9 months 2010 performance (RAS)
RUR bln 30.09.2009 30.09.2010 Change EBITDA, RUR bln
Revenue 36.05 43.38 20.3%
0
Cost 31.28 36.65 17.2% +29.4%
8.72
Gross profit 4.77 6.73 41.1% 6.74
Gross profit margin 13.2% 15.5% 2.3 p.p.
EBITDA 6.74 8.72 29.4%
EBITDA margin 18.7% 20.1% 1.4 p.p.
Net profit 2.01 3.80 89.1%
Net profit margin 5.8% 8.8% 3.0 p.p. 9M 19M
2009 2010
… significant growth of all key indicators
17

18. Management of loan portfolio –
absence of short-term credits and loans…
Structure of capital
RUR bln 31.12.2009 30.09.2010 Change
Decrease of average
Equity 41,23 45,04 9.24% interest rate on credits in
Long-term liabilities 10,73 11,69 8.95% 2010 by 5.0%
Short-term liabilities 0,40 0,00 -100%
Accounts payable 8,69 11,29 42.04%
Other 61,05 68,02 11.42%
12.93%
10.99%
Financing support, 8.63% 8.41% 8.00%
as of October 31, 2010
3% 5%
8% Sberbank
Rosbank
34%
Alfa Bank
20%
Gazprombank
Nordea Bank 31.12.09 31.03.10 30.06.10 31.10.10 31.12.10F
30% Others
18

19. Debt position –
low indicator of Net debt/EBITDA
EBITDA vs. Net Profit, RUR bln RUR bln
Ratio Net Debt/EBITDA
12 1,6
Net debt/ 1,4
Year EBITDA Net Profit Net Debt 10
EBITDA 1,2
8
1
2006 4.74 1.31 3.27 0.69
6 0,8
2007 6.83 1.98 6.14 0.90
0,6
2008 7.49 0.87 9.31 1.24 4
0,4
2009 7.64 1.33 10.76 1.41 2
0,2
2010F 11.27 4.07 14.88 1.32 0 0
2006 2007 2008 2009 2010(П)
9M 2009 6.74 2.01 9.34 1.39
EBITDA Net debt/EBITDA
9M 2010 8.72 3.80 10.11 1.16 NET PROFIT
19

20. Investment activity
RUR bln
12
10 Volume of capital Commissioning of fixed
Year investments, assets. RUR bln w/o
RUR bln w/o VAT VAT
8
2006 4.509 4.350
6 2007 7.839 6.372
2008 9.071 7.739
4 2009 6.529 7.687
2010F* 11.820 11.797
2
0 Others
Прочее
Ввод ОФ
Ввод ОФ
Ввод ОФ
Ввод ОФ
Ввод ОФ
Освоение КВ
Освоение КВ
Освоение КВ
Освоение КВ
Освоение КВ
CI
CI
CI
CI
CI
FA
FA
FA
FA
FA
New construction and expansion
Новое строительство и
of existing facilities
расширение действующих
объектов
2006 2007 2008 2009 2010 Техперевооружение и reconstruction
Modernization and
реконструкция
20 www.mrsk-1.ru

21. Transition to RAB
Date of Branch Total value IRAB,
transition of invested RUR mln
capital
RUR mln 350
from 01.01.2009 Belgorodenergo
300 111
50 609 19 930
Lipetskenergo 250
25 726 10 030 200
Tverenergo
55 276 14 366 150
from 01.01.2010 Kurskenergo 226
39
30 782 10 802 100
Yarenergo
50 76
21 586 8 968
from 01.11.2010 Bryanskenergo
0
20 045 5 989 IC full value
Полная величина IC residual value
Остаточная
Orelenergo ИК величина ИК
21 571 6 407
From 01.01.2011 RAB branches
RAB филиалы
Kostromaenergo
16 892 7 437 Филиалы по которым планируется переход на RAB
RAB planned branches
Tambovenergo
18 609 5 515
Voronezhenergo Expected IRAB on all branches –
38 110 12 650 RUR 115.83 bln
Smolenskenergo
37 041 13 735
 forecast
21

22. Contact information
JSC “IDGC of Center”
129090 Russia, Moscow, Glukharev per., 4/2
Tel./fax: +7 (495) 747 9292
www.mrsk-1.ru
Director on Corporate Relationships
Tatiana A. Kulbakina
Kulbakina_TA@mrsk-1.ru
Head of Department for Shareholders
Relationship
Tatiana N. Miroshnichenko
Miroshnichenko_TN@mrsk-1.ru
Tel.: +7 (495) 747 9292, ext. 3181
22

23. Appendix
23

24. Investment activity*
Volume of capital Commissioning of fixed
investments, assets. RUR bln w/o
Year RUR bln w/o VAT VAT
RUR bln 2009 6,529 7,687
40 2010F 11 820 11 797
35 2011F 18 929 17 895
30
2012F 22 717 21 457
25 33 622 32 653
2013F
20 33 231 33 983
2014F
15
10
5
0 *Presented data on investment program have been formed
Ввод ОФ
Ввод ОФ
Ввод ОФ
Ввод ОФ
Ввод ОФ
Ввод ОФ
Освоение КВ
Освоение КВ
Освоение КВ
Освоение КВ
Освоение КВ
Освоение КВ
without taking into account changes made by FTS Order from
CI
CI
CI
CI
CI
CI
FA
FA
FA
FA
FA
FA
01.09.2010 N 218-E / 5 «On Amendments to the Order of the
2009 2010 2011 2012 2013 2014 Federal Tariff Service of 15.08.2008 N 152-e/15 «On approval of
the rate of return on invested capital».
(Registered by Ministry of Justice on 21.09.2010 N 18491).
Perhaps there will be changes in the middle of October 2010, when approving the
adjusted investment program by the Board of Directors of IDGC of Centre.
24

25. Productive supply, forecast on 2010-2014
Bln KWh
+1.0%
59,00 +1.5% 58,48
+1.5% 57,89
58,00
+1.9% 57,05
57,00
+3.8% 56,21
56,00 55,14
55,00
54,00 53,13
53,00
52,00
51,00
50,00
‗09 ‘10F ‘11F ‘12F ‘13F ‘14F
25

26. Appendix 1
Sales of services (RAS)
Bln KWh MV
60 600
Volume of
Productive Growth Growth 55 550
technological
Year supply, bln rate, rate,
connection, 50 500
kWh % %
MV
45 450
2006 54.0 - 280.47 - 40 400
2007 56.4 4.4% 481.28 71.6% 35 350
30 300
2008 56.6 0.4% 479.84 -0.3%
25 250
2009 53.1 -6.2% 445.62 -7.1% 20 200
2006 2007 2008 2009 2010
2010(F) 55.2 0.8% 531.55 19.3%
Полезный отпуск э/э,bln KWh
Productive supply, млрд. кВтч Объемы ТП, МВт
Volume of
TC, MW
26 www.mrsk-1.ru

27. Appendix 2
Dynamics of Electricity Losses 2006-2010
Change,
Period kWh (th.) %
p.p.
Dynamics of Electricity
15,00 Losses, 2006-10F (%)
2006 6.238 10.35
13,00
2007 5.932 9.52 (0.83)
11,00 10.4
10.1 10.03
2008 5.875 9.40 (0.12) 9.5
9.4
9,00
2009 5.977 10.11 0.71
7,00
2010F 6.154 10.03 (0.08)
5,00
3,00
1,00
2006 2007 2008 2009 2010F
27 www.mrsk-1.ru

28. Appendix 3
Market share in 1H 2010
Power transmission share market Technological connection
in 2010 share market in 20
(in terms of money) (in terms of money)
Company‟s share in the power
transmission market in regions, %
(2009)
Bryanskenergo
Voronezhenergo
Tambovenergo
Yarenergo
Lipetskenergo
Tverenergo
Orelenergo
Kurskenergo
OWN REVENUE OWN REVENUE
Smolenskenergo
REVENUE OF TGCs REVENUE OF TGCs
Belgorodenergo
Kostromaenergo
28 www.mrsk-1.ru

29. Tariffs
Average distributional tariffs, kop/kWh
Branch 2006 2007 2008* 2009* 2010*
Belgorodenergo 48,4 52,4 65,2 80,8 100,1
Bryanskenergo 40,5 74,9* 86,9 106,0 130,5
Voronezhenergo 38,2 45,5 74,0 91,1 102,4
Kostromaenergo 64,3 76,2 91,1 106,4 130,8
Kurskenergo 46,4 47,6 59,1 69,1 98,7
Lipetskenergo 33,5 42,3 64,8 82,2 111,1
Orelenergo 48,3 66,5 105,6 117,0 140,5
Smolenskenergo 65,4 73,0 90,3 110,4 123,8
Tambovenergo 47,0 49,3 87,3 100,3 108,3
Tverenergo 52,7 58,4 103,4 138,3 154,2
Yarenergo 48,4 43,3 59,8 74,0 86,2
* Tariffs are inclusive of the territorial network organizations
29 www.mrsk-1.ru

30. Tariffs
Average distributional tariffs w/o TNO, kop/kWh
Branch 2008 2009 2010
Belgorodenergo 64,5 79,8 98,9
Bryanskenergo 55,4 70,3 83,8
Voronezhenergo 52,8 62,6 71,5
Kostromaenergo 90,2 104,5 126,7
Kurskenergo 52,0 60,4 65,8
Lipetskenergo 52,9 68,9 91,8
Orelenergo 79,6 91,1 108,2
Smolenskenergo 85,7 105,3 118,0
Tambovenergo 51,8 62,6 70,9
Tverenergo 72,4 102,2 119.8
Yarenergo 42,1 51,2 60,6
30 www.mrsk-1.ru