MARCH 5TH 2015
TGI 2014 RESULTS AND KEY DEVELOPMENTS
Table of contents
2
I. TGI Overview and history
II. Key Updates
III. Financial and operating highlights
IV. Expansion Projects
Appendix
1. Economic industry and regulatory environment
2. Shareholders and management team
3. EEB Overview
1. TGI overview and history
Company historyCompany history
TGI history
Pipeline networkPipeline networkHighlightsHighlights
Owns ~61% of the national pipeline network (3,957 km) and transports 49% of the gas consumed in the country
− Serves ~70% of Colombia’s population, reaching the most populated areas (Bogota, Cali, Medellin, the coffee region and Piedemonte Llanero, among others)
− Has access to the two main production regions, La Guajira and Cusiana/Cupiagua
38% interest in Contugas (Peru)
− 30-year concession for natural gas transportation and distribution
TGI was created as a result of the privatization of Ecogás and has experienced remarkable growth since then, under the leadership of its controlling shareholder EEB.
Creation of Ecogas
1997
2005
Start of Ecogas Privatization Process
2006
Ecogas assets awarded to EEB
Creation of TGI
Inaugural bond issuance Transfer of first
BOMT pipeline (GBS)
Pipelines exchange with Promigas
CVCI capitalization
Transfer of second BOMT pipeline (Centragas)
Cusiana expansion phase I: start of operations
Refinancing of subordinated debt with EEB
2008
TGI takes over the O&M of owned pipelines
Refinancing of bonds issued in 2007
Cusiana expansion phase II: start of operations
TGI takes over the O&M of compressor stations
Awarded investment grade rating by Moody’s and Fitch
2010
Awarded investment grade rating by S&P
Headquarters relocation from Bucaramanga to Bogotá
Redesign of organizational structure
2012
2013
2007
2009
2011
2014 EEB acquired 31.92% stake in TGI from TRG (formerly CVCI)
Sabana Compressor starts operations
Contugas Concession starts operations
TGI´s first dividend Payment
Fitch Upgraded TGI’s investment grade to BBB
Cartagena Refinery
Barrancabermeja Refinery Bucaramanga
Bogota
NeivaCali
Medellin
3.15 tcf
1.97 tcf
EasternProducers:EcopetrolEquion
Upper Magdalena Valley
Lower and Middle Magdalena Valley
NorthernProducers:ChevronEcopetrol 1.89 tcf
Ballena
Cusiana
ReferencesTGI Pipelines
Natural Gas ReservesCityFieldRefinery
Third Party Pipelines
Source:Mining and Energy Planning Unit. National Hydrocarbons Agency.
4
Overview
5
Stable and growing Colombian economy with sound investment environment
Constructive and stable regulatory framework
Largest natural gas pipeline system in Colombia
Stable and predictable cash flow generation, strongly indexed to the US Dollar
Strong and consistent financial performance
Experienced management team with solid track record in the sector
Expertise, financial strength and support of shareholders
Natural monopoly in a regulated environment
Strategically located pipeline network
2. Key Updates
Key updates
Since 2H 2011, TGI designed a strategy to improve its credit ratings in order to (i) reduce financial expenses, (ii) provide better access to debt capital markets and (iii) broaden its potential investor base
On August 28th, Standard & Poor’s affirmed the TGI corporate debt and issuer rating in ‘BBB-‘, perspective stable
On October 28th, Fitch Ratings upgraded TGI’s corporate debt and issuer rating from ‘BBB-’ to ‘BBB’, with stable perspective
TGI’s current ratings are as follows:
Baa3 Stable OutlookBBB Stable Outlook BBB- Stable Outlook
Fitch upgraded TGI’s credit rating to BBB on Oct 28, 2014
7
Hedge Restructuring During the first quarter of 2014, TGI executed synthetic unwinds to cap losses related to 3 of 4 cross-
currency swaps booked in 2009 On September 2014, TGI executed the fourth synthetic unwind, hedging the whole cross-currency swaps
booked in 2009
Key updates
8
TGI’s acquisition EEB closed the TGI 31.92% share acquisition on the first half of 2014, through the acquisition of the 100% of
IELAH (SPV) To bridge the acquisition EEB used cash on hand and short term financings with affiliates. USD $ 645 MM were disbursed on September 2014 trough long term credit facilities to IELAH TGI is currently working on the merger with IELAH, this merger is expected to take place the 3Q 2015.
On 2014 TGI paid out ~ USD 270 MM in dividends as a result of distributable profits corresponding to 2013 and the first eight months of 2014, and release of one reserve.
Dividends distributed
On July 7th TGI started operations of La Sabana Compression Station Project has been succesfully completed
La Sabana Compression Station
Key updates
9
USD MM(1)
Distributed profits 2013 54.4
Distributed profits Jan – Aug 2014 60.5
Reserves released 155.4
(1) USD in millions –2014 (EOY) exchange rate, only for informative purposes.
3. Financial and operating highlights
Solid operational performance
(1)The trend line refers to the ratio: Firm contracted capacity/available capacity. The Available capacity differs from the Total Capacity as TGI requires a percentage of it for its own use. Source: Company information.
Network lengthNetwork length(km)
CapacityCapacity(MMscfd)
Firm Contracted Capacity(1)Firm Contracted Capacity(1)
(MMscfd)
Transported VolumeTransported Volume Load factorLoad factor(MMscfd) (%)
2009 2010 2011 2012 2013 2014
3,529
3,7743,774
3,9573,9573,957
2009 2010 2011 2012 2013 2014
478548
618
730 730 730
2009 2010 2011 2012 2013 2014
437
485
560
604628
647
92% 90% 92%85% 88% 91%
2009 2010 2011 2012 2013 2014
396 422 420 422454
494
2009 2010 2011 2012 2013 2014
69% 71%
58% 59% 61% 64%
Pipeline & Compression Stations Reliability Pipeline & Compression Stations Reliability
11
2012 2013 2014
99.6% 99.7% 99.8%96.0% 96.5% 96.5%
Pipeline SystemCompression System
Stable and predictable cash flow generation
• TGI’s revenues are highly predictable, with approximately 98% coming from regulated tariffs that are reviewed al least every 5 years, ensuring cash flow stability and attractive rates of return
• Main sectors served by the Company (75(1)% of revenues) present stable consumption patterns (no seasonality)• The Company enjoys excellent contract quality
– 100% of TGI’s contracts are firm contracts with an average remaining life of 8.02 years– 84% of regulated revenues are based on fixed tariffs, not dependent on the transported volume– 63% of revenues are linked to tariffs in USD, that are indexed to US PPI (Capital Equipment)
12
Revenues breakdownRevenues breakdown
(% of revenues)
Source: Company information.(1) Includes Distributors, Ecopetrol´s refinery and Natural gas for Vehicles.
TGI’s revenues are highly predictable as a result of regulated tariffs and stable consumption
as of December 31- 2014
Distributor59%
Refinery13%
Thermal18%
Traders3%
Vehicles3%
Others*4%
By Sector
Ecopetrol15%
Gas Natural 21%
Gases de Occidente
16%
EPM 12%
Isagen 7%
Others30%
By Client
Linked to USD 63.4%
COP 36.6%
By Currency
Revenues EBITDA and EBITDA marginRevenues EBITDA and EBITDA margin
Funds from operations (1)Funds from operations (1)
(US$ in millions – average exchange rate for each period)
Source: Company information
(US$ in millions – average exchange rate for each period)
(US$ in millions – average exchange rate for each period)
(1) FFO calculated as net income plus depreciation, amortization and provisions, adjusted for effect from exchange rate and hedges. On 2012 FFO includes the LM transaction premium~ USD 69 million (one time event)
TGI Financial performance 2014
Historical CaPex - YTDHistorical CaPex - YTD
(US$ in millions – average exchange rate for each period)
2014 Preliminary figures subject to shareholders assembly approval
2009 2010 2011 2012 2013 2014
252294
338390
465 477
2009 2010 2011 2012 2013 2014
196222
257289
359383
78% 75% 76% 74%77%
80%
2009 2010 2011 2012 2013 2014
96 108 117 133
268289
13
2008 2009 2010 2011 2012 2013 2014
14
69
174
387
185
32 36
Total Assets PPETotal Assets PPE
Cash and EquivalentsCash and Equivalents
(US$ in billions – end-of-year exchange rate for each period)
Source: Company information
(US$ in billions – end-of-year exchange rate for each period)
(US$ in billions – end-of-year exchange rate for each period)
TGI Financial performance 2014
2014 Preliminary figures subject to shareholders assembly approval
2009 2010 2011 2012 2013 2014
2.00 2.12
2.562.88 2.98
2.33
2009 2010 2011 2012 2013 2014
1.25 1.30 1.34 1.40 1.40 1.37
0.76 0.811.22
1.48 1.580.96
LIABILITIES
2009 2010 2011 2012 2013 2014
11071
182160
364
205
LiabilitiesLiabilities
(US$ in billions – end-of-year exchange rate for each period)
2009 2010 2011 2012 2013 2014
0.620.77
1.40
1.671.49
1.19
Strong and consistent financial performance
Total debt / EBITDA Total debt / EBITDA
Financial debt breakdown (3)Financial debt breakdown (3)
Subordination Agreement The lender is EEB (major shareholder) No repayment of principal allowed before payment of senior debt Interest can only be paid if there is no default or event of default and if
the payment does not trigger any such scenario Subordinated debt acceleration is not allowed until senior debt is not
repaid
Source: Company information. Total debt includes senior debt, subordinated debt and mark-to-market. Note: Ratios calculated in local currency.(1) Senior Net debt excluding EEB´s short term intercompany Loans. Including the ICL the ratio lowers to 1.2x(2) Interest coverage ratio calculated as EBITDA / Net interest (3) Senior debt stands for the US$750 million Senior Unsecured Notes due 2022. Subordinated debt stands for intercompany loan with EEB.
Senior net debt (1) / EBITDA Senior net debt (1) / EBITDA Interest coverage (2)Interest coverage (2)
2009 2010 2011 2012 2013 2014
5.6 5.44.9
4.23.5 3.8
2009 2010 2011 2012 2013 2014
2.0 2.12.5
4.0
5.96.5
(X) (X) (X)
2009 2010 2011 2012 2013 2014
3.3 3.4
2.72.4
1.5
2.0
4. Expansion Projects
Description: TGI will increase existing capacity of Armenia and Chinchina branches with the construction of two new loops; Armenia Branch: 37.5 km 8” loop parallel to exiting 6” pipeline and Chinchina – Santa Rosa – Dosquebradas Branch: 7.5km 3” loop parallel to existing 3” pipeline
Cost: ~$ 28 mm
Status: — Engineering stage— Expected Completion: 2017
Expansion projects pipeline
Description: Adapt compression stations, delivery and receipt locations along the Ballena - Barrancabermeja pipeline so that it can transport natural gas in both directions, in order to allow natural gas to be transported from the central region to the north
Cost: ~$ 20 mm
Expected Completion: 2016
Ballena – Barrancabermeja Bidirectionality
Description: Increase capacity in 20 mmscfd by adapting Vasconia, Miraflores, Puente Guiillermo compression stations
Cost: ~$ 31 mm
ExpectedCompletion: Dec. 2015
Cusiana Phase III
Cusiana - Apiay – Villavicencio - Ocoa
Description: Increase capacity in 32 mmscfd. 2 New compression stations
Cost: ~USD $ 48 mm
ExpectedCompletion: 2H 2016
Eje Cafetero Branches
17
5. Questions and answers
Investor Relations
For more information about TGI contact our Investor Relations team:
Antonio José Angarita VegaCFO
+57 (1) 3138400 - ext [email protected]
Sergio Andrés Hernández AcostaFinance Manager
+57 (1) 3138400 - ext. [email protected]
Fabián Sánchez AldanaIR Advisor - EEB
+57 (1) 3268000 - ext. [email protected]
http://www.tgi.com.co
19
Appendix 1 – Economic industry and regulatory environment
Source: UPME
Energy sources 2012
Growing Demand of Natural Gas Significant Availability of Natural Gas
Reserves mostly located in the north and east regions of the country
Key fields (Ballena, Chuchupa, Cusiana and Cupiagua) concentrate virtually all of the natural gas production
Long distances between production and main consumption areas
Minimal gas storage capacity across the country
Total DomesticDemand(mmcf/d)
Expected 2014A-2018E
Growth by Sector
Natural Gas in Colombia: Increasing Demand and Vast Reserves
21
Bucaramanga
Bogotá
Cali
Medellín
3.15 Tcf
1.97 Tcf
EasternProducers:EcopetrolEquion
Lower and Middle Magdalena Valley
NorthernProducers:ChevronEcopetrol
References
Natural Gas Reserves
Main Oil & Gas Basins
City
1.89 Tcf
Llanos Orientales
Catatumbo
Guajira
Sinu
Tumaco
Choco
Cau
ca P
atia
Cordillera Oriental
Valle InferiorDel
Magdalena
Valle MedioDel
Magdalena
2012 total natural gas reserves of 7.01 tcf (5.73 tcf proven and 1.28 Tcf unproven), source MME & ANH
Data from UPME as of 31-Dec-2012Data from ANH as of 31-Dec-2014
RESERVES PER UPME RESERVES PER ANH
11.7
6,0
Proved Probable + possible Yet to Find Conventional Non Conventional
Organic9,1%
Coal9,8%
Natural Gas
25,1%
Hydro12,9%
Oil 43,2%
(Million Equivalent Oil Tons)
Petrochemical Industrial Residential Power Generation
NGV Petroleum
0.4%3.3% 2.7% 2.7%
4.5%
25.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 … 2017 2018
695 731 723810 841 829 847
9461034 1035
1240
CAGR: 2006-2014: 5,1%
CAGR: 2014-2018: 4,6%
..
.
…
Source: Mining and Energy Planning Unit. Reserves as 2012.
Source: UPME, Concentra
Source: UPME
Source: Banco de la República, DNP, MINHACIENDA., Bloomberg
5-year CDS5-year CDS Foreign currency reservesForeign currency reserves
Real GDP growth and inflationReal GDP growth and inflation Foreign direct investmentForeign direct investment(US$ in billions)(% growth)
(%) (US$ in billions)
Stable and growing Colombian economy with sound investment environment
2008 2009 2010 2011 2012 2013 2014 (e)-
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
4%
2%
4%
7%
4% 4% 4%
7.7%
2.0%
3.2%3.7%
2.4%1.9%
3.7%
Real GDP growth Inflation
2008 2009 2010 2011 2012 2013 2014 -
3.0
6.0
9.0
12.0
15.0
18.0
10.6
7.1 6.4
14.6 15.116.4 15.6
12/2
003
07/2
004
01/2
005
07/2
005
01/2
006
07/2
006
01/2
007
07/2
007
01/2
008
07/2
008
01/2
009
07/2
009
01/2
010
07/2
010
01/2
011
07/2
011
01/2
012
07/2
012
01/2
013
07/2
013
01/2
014
07/2
014
0
100
200
300
400
500
600
700
2008 2009 2010 2011 2012 2013 201405
101520253035404550
0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%
24 2528
3237
4447
19.0%22.9% 22.6% 22.5% 21.3%
24.4% 24.9%
International reservesDebt as % of GDP
Regulatory framework established to attract private sector investment
Law 142 (1994) establishes system of open entry to the natural gas transportation sector− No term limitation for the provision
of the service− Assets used in the provision of
the service are not owned by the state but by the company providing such service
CREG required by law to seek input from market participants
CREG is an independent regulatory body that controls natural gas regulation− Sets tariffs, promotes competition
and monitors quality of service
Tariff calculation based on the principle of financial feasibility and economic efficiency
Tariffs are set in order to allow the service provider to:− Recover operational costs and
investments− Obtain a return on investment
comparable to what an efficient company would obtain in a sector of similar risk
Cost recovery, attractive regulated return on investment and protection against inflation
Transporters are given full recovery of operating and maintenance expenses− Adjusted by Colombian Price
Index (CPI) Dollar indexation of investment
remuneration tariff Different rates of return applied
when determining fixed and variable charges
Constructive and stable regulatory framework
Source: Company information.
The Colombian gas transportation regulatory framework was established to attract private strategic investors and to provide adequate cost recovery and regulated returns
23
CREG RESOLUTIONS 083 AND 112 OF 2014
Establishes regulations for natural gas market.
Definition of contractual arrangements in the primary market.
Definition of marketing mechanisms. Defines secondary market with its
respective regulations.
The following reliability aspects in the Decree have not yet been defined by the Regulatory Commission: The CREG will establish the reliability
criteria which shall secure the demand coverage and must set the rules for the evaluation and remuneration of these investment projects.
CREG RESOLUTION 047 OF 2014
Recent Regulatory Decisions
The regulatory framework for natural gas transportation in Colombia is in a stage of important definitions. The main recent regulatory decisions are:
CREG RESOLUTION 089 OF 2013
DECREE 2100 OF 2011
Establishes the principles that will be considered in the next natural gas transportation tariff update process.
The resolution mentions the principles that will be kept from the actual tariff methodology.
Remuneration based on contracts. Price cap methodology.
It also mentions aspects that must be evaluated.
System expansion based on government signals.
Tariff calculation based on historical demand and not projected.
The resolution CREG 083 proposes the methodology to determine the WACC for regulated activities including gas transportation.
The resolution CREG 112, proposes the value for the Beta Adjustment (Delta Beta - Δβ) , which recognizes the difference between the reference market in the USA and the Colombian Regulatory framework.
Both resolutions were available for agents comments’, and the final resolutions are expected to be issued at the end of the year.
24
Appendix 2 – Shareholders and management team
Experienced management team with solid track record in the sector
David RiañoCEO
19 Over 20 years of experience in the natural gas and electricity industries. Worked as Advisor to the Energy and Gas
Regulatory Commission (CREG), Superintendent for Energy and Gas and Executive Vicepresident of the Colombian Electricity Generators Association
Electrical Engineer from Universidad de La Salle , Master in Industrial Engineering from Universidad de los Andes and in Economics from Pontificia Universidad Javeriana
TGI´s CEO since October 2014
Antonio J. Angarita CFO
20
OfficerOfficer Key highlightsKey highlightsYears of relevant experience
Years of relevant experience
Jose ArcosVice –President of Legal Affairs and regulatory
16 Over 16 years serving the public and private sectors. Worked as General Secretary to the Colombian Gas
Association (Naturgas) and as Legal Advisor to the Energy and Gas Regulatory Commission (CREG) Lawyer from Universidad del Cauca, Master in Utilities Regulation from Universidad de Barcelona, post graduate
studies in Government and Markets from Harvard University, specialization in Business Law and trust from Universidad Externado de Colombia and Santo Tomás
Over 20 years of experience in financial management in different industries (10 years in Energy & Gas), former IRO in EEB, CFO in Bayport Colombia, Regional CFO in Amnet Central America (Tigo Home), Financial Controller and Financial Planning Manager in Colombia Movil - Tigo, Head of Financial Planning in ETB, Head of Management Control in Codensa and Advisor of the CFO in EEB.
Civil Engineer and MBA from Universidad de los Andes (Bogotá) TGI’s CFO since July 2014
Miguel AriasCOO
Former Judicial Defense Manager at National Infrastructure Agency (ANI); Expert in PPP contracts, infrastructure law, arbitration, M&A and antitrust law
Attorney from Universidad de la Sabana; PhD in International Public Law from Universidad Alfonso X, Master in Law from Universidad Sergio Arboleda, specialization in Administrative Law from Universidad del Rosario
Carlos ToledoVice-President for Administration and services
10 Over 10 years serving the public and private sectors Vice-President for Administration and Public Relations since May 2012. Degree in Law from the Universidad UNICIENCIA. Degree in Electrical Engineering and specialization in telecommunications from Universidad Industrial de Santander
Master’s degree in Applied Political Studies from FIIAPP. Master in Social Cohesion from Universidad de Mendez Pelayo, España.
Oscar IbañezVice-President of growth and development
24
Over 24 years of experience in the Oil and Gas Industry Former Project Manager at Audubon Engineering Colombia Degree in Petroleum Engineering from Universidad de America and specialization in Gas Engineering form
Universidad Industrial de Santander
24
Appendix 3 – EEB Overview
EEB Strategy and Overview
Strategy Transportation and distribution
of energy
Key facts More than 100 years’ experience in the sector; founded in 1896. Regional leader in the energy sector; major player in the entire
electricity and natural gas value chains (except E&P); operations in Colombia, Peru, and Guatemala.
Largest stockholder is the District of Bogota - 76.2%. Stock listed on the Colombia stock exchange; EEB adheres to global
standards of corporate governance. The EEB Group is one of the largest issuers of equity and debt in
Colombia
USD Million 2014Operating revenue 963.7Operating profit 330.3EBITDA LTM 1,075.1Net Income 410.0
Consolidated - Covenants 2014Leverage Ratio 2.09Interest Coverage Ratio 11.8
Focus on natural
monopolies
Ample access to capital markets
Ambitious projects in execution
Growth in controlled
subsidiaries
Sound regulatory framework
Experienced management and partners
28
Disclaimer
This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are only predictions and are not guarantees of future performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include, among other things, statements concerning the potential exposure of TGI, its consolidated subsidiaries and related companies to market risks and statements expressing management’ expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “objectives”, ”outlook”, “probably”, “project”, “will”, “seek”, “target”, “risks”, “goals”, “should” and similar terms and phrases. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Although TGI believes that the expectations and assumptions reflected in such forward-looking statements are reasonable based on information currently available to TGI’s management, such expectations and assumptions are necessarily speculative and subject to substantial uncertainty, and as a result, TGI cannot guarantee future results or events. TGI does not undertake any obligation to update any forward-looking statement or other information to reflect events or circumstances occurring after the date of this presentation or to reflect the occurrence of unanticipated events.
29
Cálidda´s 4Q 2014 Results
I. Introduction and Perspectives
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
31
Table of Contents
I. Introduction and Perspectives
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
32
Introduction and Perspectives
33
I. Introduction and Perspectives
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
34
In October Termochilca Power plant turned its interruptible contract into a firm volume contract (45.03MMCFD).
In November the industrial client La Pampilla Refinery contracted firm volumes.
Additionally in November Enersur power plant increased its firm contract from 102.41 MMCFD to 121.38 MMCFD.
Calidda has a client base of 255,005 customers, 56% more than the 163,817 customers achieved in 2013.
The residential segment increase its penetration rate from 50% (2013) to 55%.
Calidda´s 2014 Invoiced volume increased 18% vs. 2013, mostly explained by the full operation of Fénix and Termochilca power plants during 2014.
Calidda invest USD 83MM during 2014 developing its Distribution System Infrastructure, expanding the network in 1,274 km.
Calidda achieved the recertification of ISO 9001 and 14001 standards.
Significant Developments
2) Total Adjusted Revenues and Adjusted EBITDA Margin exclude Pass-through and IFRIC 12 revenues.3) Adjusted EBITDA Margin excludes Pass-through and IFRIC 12 revenues.4) In 2013 ratio does not include 2013´s debt prepayment penalties (USD 7.8MM).
35
Significant Developments
Financial Results (Year - end) 2014 2013 Var %
Total Revenues (USD MM): 512.1 460.9 11%
Total Adj. Revenues (USD MM) 2 : 185.8 146.2 27%
EBITDA (USD MM): 91.2 72.1 27%
Adjusted EBITDA Margin 3 : 49.1% 49.3%
Interest Coverage (x) 4 6.3x 5.6x 13%
1) Clients who are adjacent to Cálidda's distribution network.
Operational Results ( Year - end ) 2014 2013 Var %
Accumulated Clients: 255,005 163,817 56%
Invoiced Volume (MMCFD): 679.2 577.1 18%
Network Lenght (km): 4,678 3,404 37%
Potencial Clients 1 466,249 330,678 41%
Operational Results (Year – end) 2014 2013 Var %Operational Results (Year – end) 2014 2013 Var %
Financial Results (Year – end) 2014 2013 Var %Financial Results (Year – end) 2014 2013 Var %
I. Introduction and Perspectives
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
36
Client Base
37
2009 2010 2011 2012 2013 20140
50,000
100,000
150,000
200,000
250,000
300,000
18,75634,619
63,602
103,090
163,129
254,280
Residential & Commercial Residential & Commercial
Cálidda has residential network in 15 districts and industrial network in 34 districts within Lima & Callao (Metropolitan area).
During 2014, Cálidda added 91,151 clients to the Residential & Commercial segment. As to residential clients only, 90,062 were connected over such period, and, therefore, a total of 250,752 households are now Cálidda’s clients.
Main grid expansion
Natural gas main pipeline
Industrial customers
Residential customers
Client Base (Cont’d)
38
2009 2010 2011 2012 2013 201402468
1012141618
8
1113 13
16 16
2009 2010 2011 2012 2013 20140
100
200
300
400
500
600
321360
394429
466 489
Clients Segments Growth Highlights
No new power generators where connected in 2014. Fénix Power and Termochilca thermoelectric plants were connected in 2013.
During 2014, Kallpa and Enersur power plants increased their firm contract.
23 new industrial plants were connected during the 2014 period. Cálidda was able to attend the demand for this segment in more than 34 districts.
2009 2010 2011 2012 2013 20140
100
200
300
400
0
50,000
100,000
150,000
200,000
250,000
103 143 172 192 206 220
81,029103,712
126,586151,781
171,541197,154
NGV Stations Converted Vehicles
14 new NGV stations joined Cálidda’s distribution system and almost 200,000 converted vehicles were attended in the City of Lima in 2014.
Power Generation
Industrial
GNV Stations
Volume Sold (Invoiced)MMCFD
Cálidda now invoices more than 3.7x the volume in 2009. As of December, 2014 TPO contracts amount 541 MMCFD, 80% of Total Invoiced Volume. Most important increase comes from Power Generator and Industrial Segment.
CAGR(09-14): 3
0%
39
2009 2010 2011 2012 2013 2014
52.2%
63.9%
71.6%71.6%
72.5%
74.2%
34.0%
25.0%
19.2%
18.1%
17.2%
16.0%
13.4%
10.6%
8.8%
9.7%
9.6%
9.0%
182
303
457
508
577
679
Total MMPCD
Residential & Commercial
NGV Stations
Industrial
Volume Sold by Client SegmentMMCFD
NGV StationsNGV Stations Residential & CommercialResidential & Commercial
IndustrialIndustrialPower GenerationPower Generation
40
2009 2010 2011 2012 2013 20140
100
200
300
400
500
600
95
193
327364
418
504
CAGR('09-'14): 40%
2009 2010 2011 2012 2013 20140
20
40
60
80
100
120
62
7688 92
99109
2009 2010 2011 2012 2013 20140
10
20
30
40
50
60
70
24
32
40
4956
61
CAGR('09-'14): 20%
2009 2010 2011 2012 2013 20140.0
1.0
2.0
3.0
4.0
5.0
6.0
0.81.3
1.9
2.9
3.9
5.8
C
AGR('09-'14): 47%
I. Introduction and Perspective
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
41
Operational Performance
Distribution System Infrastructure Distribution System Infrastructure
Network EfficiencyNetwork Efficiency
In 2014, Cálidda’s distribution network was expanded by 1,274 km, out of which 20 km were steel high pressure network mainly used for the Industrial and NGV Stations segments, while the remaining 1,254 km were polyethylene pipelines and focused on connecting residential customers.
Total network now consists of 4,678 km of underground pipelines and its 4.8x longer than what it was in 2009.
The network penetration rate has increased to 55% over the years due to Cálidda’s commercial strategy main focus: districts characterized by medium and low income families where the savings produced by the use of natural gas against other alternative fuels are more appreciated.
42
Clie
nts
(‘000
)
2009 2010 2011 2012 2013 20140
1,000
2,000
3,000
4,000
5,000
273 303 359 387 408 428701
1,0201,465
2,163
2,996
4,249
9741,324
1,824
2,550
3,404
4,678
Steel Network Polyethylene Network Total
km
2009 2010 2011 2012 2013 20140
100
200
300
400
500
600
-10%
0%
10%
20%
30%
40%
50%
60%
19 35 64
104 164
255
94 126
174
244
331
466
20%28%
37%42%
50%55%
(*) Clients who are adjacent to Cálidda's distribution network.
Operational Performance (Cont’d)
43
Cálidda capacity is 420MMPCD (from citigate Lurín to Lima). Independent and regulated customers uses 298MMPCD equivalent to 70% of its capacity.
Cálidda has enough Gas Supply Contract (Pluspetrol) and Transportation Contracts (TGP) to attend its regulated customers.
Calidda Capacity 420 MMCFD
Gas178MMCFD
Transport204 MMCFD
Jan-
14
Feb-1
4
Mar
-14
Apr-1
4
May
-14
Jun-
14
Jul-1
4
Aug-1
4
Sep-1
4
Oct
-14
Nov-1
4
Dec-1
4120
144
168
192
216
240
Regulated Clients
Jan-
14
Feb-1
4
Mar
-14
Apr-1
4
May
-14
Jun-
14
Jul-1
4
Aug-1
4
Sep-1
4
Oct
-14
Nov-1
4
Dec-1
40
50100150200250300350400450
Regulated Clients Independent Clients
Edegel Ventanilla
Enersur
Edegel Santa Rosa
Kallpa
Duke
Cálidda's City Gate
Thermal Plants (Clients)
Conventions
Cálidda Capacity = 420MMCFD
Regulated Customers = 150 MMCFD
Termochilca
Fénix
Independent Customers = 148 MMCFD
Chilca P.G.= 381 MMCFD
I. Introduction and Perspective
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
44
Total Adjusted Revenues by Segment
2
1) Total Adjusted Revenues exclude Pass-through and IFRIC 12 revenues.2) Installation Services Revenues include revenues from connection fees and financing.3) Others: mainly derived from network relocation and other non recurrent services.
3
45
Firm contract volume (541MMCFD) represent 80% of invoice volume.
Residential & Commercial Industrial NGV Stations Power Generation Installation ServicesOthers
2014 Total Adjusted Revenues 2014 Total Volume (MMCFD)
1%
16%
9%
74%
Financial PerformanceMillion US$
Funds from Operations (FFO)1Funds from Operations (FFO)1
EBITDA & Adj. EBITDA Margin (%)EBITDA & Adj. EBITDA Margin (%)Total RevenuesTotal Revenues
46
Debt & Net Debt / EBITDADebt & Net Debt / EBITDA
2) Net Debt = Debt - Cash Balance. 1) FFO = Net Profit + Depreciation + Amortization
2009 2010 2011 2012 2013 201443 64 103 125 146 186116 125
201245
315326
160188
304370
461512
Total Adjusted Revenues Pass-through & IFRIC 12
Series3
CAGR( 09 - 14): 26%
2009 2010 2011 2012 2013 2014
1929
59 6472
91
44.5% 46.1%
57.6% 51.6% 49.3% 49.1%
EBITDA Adjusted EBITDA Margin(*) Last Twelve Months.
2009 2010 2011 2012 2013 2014
12
18
40 43
36
57
2009 2010 2011 2012 2013 2014
3.9x 3.9x
2.8x 3.0x
4.4x
3.5x
3.1x 3.1x
2.3x 2.3x
3.0x 2.6x
Debt / EBITDA Net Debt / EBITDA
2
Financial Metrics
Interest Coverage2Interest Coverage2 FFO / Net DebtFFO / Net Debt
Debt / Capitalization (%)Debt / Capitalization (%)Total Debt1Total Debt1
2) In 2013 ratio does not include 2013’s debt prepayment penalties (USD 7.8 MM)
1) Total Debt: net of debt associated costs.
47
2009 2010 2011 2012 2013 2014 28
67119 149
318 318
4747
4747
75 114
166 196
318 318
Senior Debt Shareholders' Subordinated Debt
2009 2010 2011 2012 2013 2014
41.4%
49.8%54.1%
49.2%
56.6%53.2%
2009 2010 2011 2012 2013 2014
3.5x 3.8x
5.8x 5.5x 5.6x 6.3x
2009 2010 2011 2012 2013 2014
20.9% 20.2%
28.9% 28.3%
16.8%
23.9%
CapExCapExNet IncomeNet Income
EquityEquityTotal AssetsTotal Assets
Equity Injection:
$35MM
Equity Injection:
$25MM
48
2009 2010 2011 2012 2013 2014
$218 $289
$383
$492
$648 $696
2009 2010 2011 2012 2013 2014
$106 $115 $141
$202
$244
$280
2009 2010 2011 2012 2013 2014
$7 $10
$26 $27
$17
$35
2009 2010 2011 2012 2013 2014
48 5032
63
9283
353
33
5
51 50
85
96 98
83
Secondary Network Main Network
MM
US
D
Financial Metrics (Cont’d)
I. Introduction and Perspective
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
49
Conclusions
50
I. Introduction and Perspective
II. Significant Developments
III. Commercial Performance
IV. Operational Performance
V. Financial Performance and Key Metrics
VI. Conclusions
Annexes:
(i) Strong Sponsorship with Optimal Experience
(ii) Experienced and Proven Management Team & Board
Table of Contents
51
For more information about Cálidda, please contact our Investor Relations team:
http://calidda.com.pe/inversionistas/
http://www.grupoenergiadebogota.com.co
Adolfo HeerenCEO
Rafael Andrés Salamanca RodriguezInvestor Relations Advisor GEB
+57 1 326 8000 – ext. [email protected]
Isaac FingerCFO
+51 1 625 7310 [email protected]
Investor Relations
52
Gabriela Vasquez - MejíaFinance Director+51 1 625 7390
Strong Sponsorship withOptimal Experience
Leading energy holding company with interests across the electricity and natural gas sectors in Colombia, Peru and Guatemala.
Founded in 1896, controlled by the Distrito de Bogotá since 1956 with a 76.2% ownership stake.
Leader in the Energy Sector: major player in the transmission and distribution of electricity and natural gas.
– Only vertically-integrated and one of the largest natural gas distribution and transportation companies in Colombia.
– Founded in 1974 by the government of Colombia. Currently controlled by Grupo Aval.
– Major player in the gas distribution sector in Colombia through Gases de Occidente, Surtigas and Gases del Caribe.
– Participation in the power distribution in Colombia and telecommunications sector in Panama and Costa Rica.
– EEB has 15.6% stake in Promigas.
Controlling Investments
Non Controlling Investments
Non Controlling Investments
Controlling Shareholder – 60% Ownership in CáliddaControlling Shareholder – 60% Ownership in Cálidda
Shareholder – 40% Ownership in CáliddaShareholder – 40% Ownership in Cálidda
Controlling Investments
53
Experienced and ProvenManagement Team & Board
Board of Directors
Management Team
54
PresidentRicardo Roa
Barragán
Participation in the Boards of Codensa,
Emgesa, Gas Natural, REP Perú, Cálidda,
Contugas, Trecsa and President of
Transportadora de Gas Internacional TGI.
Luis BetancurEscobar
Served as Director of Fondo Financiero
Desarrollo Urbano.
President of Colombia's
restructuring of the Energy and Gas
Regulatory Commission
Jose Elias Melo Acosta
President of Corporación Financiera
Colombiana S.A
Minister of Colombia's Treasury and Public Credit and Labor and
Social Security
departments.
Antonio CeliaMartínez-Aparicio
President ofPromigas
Served on the board of directors of various companies in the
natural gas sector.
Manuel GuillermoCamargo Vega
Management positions in distribution and
transportation utilities of natural gas and
project experience in transportation of crude
oil and natural gas.
David Alfredo Riaño Alarcón
President of Transportadora de Gas Internacional
TGI.
19 years of experience in the energy sector
and utilities.
Luis ErnestoMejía Castro
Director ofPromigas.
Minister of Mines and Energy and Vice Minister of
Hydrocarbons and Mines.
Chief Operating
Officer
JorgeMonterroza
Years in industry:17 years
Years at Cálidda:3 years
Chief Executive OfficerAdolfo Heeren
Years in Industry: 17 yearsYears at Cálidda: 3 years
Chief Commercial
Officer
CarlosCerón
Years in industry:17 years
Years at Cálidda:3 years
ChiefProcurement
Officer
PatriciaPazos
Years in industry:17 years
Years at Cálidda:9 years
Chief FinancialOfficer
IsaacFinger
Months in industry:5 months
Months at Cálidda:5 months
Chief Human Resources
Officer
RosarioJiménez
Years in industry:5 years
Years at Cálidda:5 years
Chief External Affairs Officer
TaniaSilva
Years in industry:3 years
Years at Cálidda:2 years
Chief Legal and
Regulatory Officer
AmadeoArrarte
Years in industry:12 years
Years at Cálidda:10 years
Chief Strategy Officer
TatianaRivas
Years in industry:6 years
Years at Cálidda:6 years
Chief Internal Auditor
CarolinaHernández
Years in industry:8 years
Years at Cálidda:6 years
Disclaimer
The information provided here is for informational and illustrative purposes only and is not, and does not seek to be, a source of legal or financial advice on any subject. This information does not constitute an offer of any sort and is subject to change without notice.
Cálidda and its Shareholders expressly disclaim any responsibility for actions taken or not taken based on this information. Neither Cálidda nor its Shareholders accept any responsibility for losses that might result from the execution of the proposals or recommendations herein presented. Neither Cálidda nor its Shareholders are responsible for any content that may originate with third parties. Cálidda or its Shareholders may have provided, or might provide in the future, information that is inconsistent with the information herein presented.
55