Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — FY2010 Earnings Presentation
38 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Apr 7, 2011
Slide 1: 2010 results
Slide 2: Forward-looking statements disclaimer
Some statements and estimates in this material may represent expectations about future events or results that involve risks and uncertainties known and unknown. There is no guarantee that the events or results referred to in these expectations will occur. These expectations are based on present assu
Slide 3: Execution of the Strategy takes Cemig to a new level
Execution of the Strategy takes Cemig to a new level Cemig’s Long-term Strategic Plan calls for - and produces — sustainable growth, ensuring value accretion for shareholders over the long term © Leadership in consolidation of Brazilian electricity sector @ Balanced growth in the 3 segments of the b
Slide 4: Net revenue, Ebitda and net income
Net revenue Net income Ebitda 1% 7 2,258 6% 12.863 4588S 4,543 2,134 12,158 2009 2010 2009 2010 we “ ou « ro Cemig continues to deliver consistent results for its shareholders Successful growth strategy leads to a robust expansion of our indicators & Portfolio of businesses sustains Ebitda of R$ 4.5
Slide 5: Restructuring of Cemig's Executive Board
structuring of ig s Executive Boa GP Twonew Chief Officer's Departments: @ Legal Department --> Chief Counsel; Maria Celeste Morais Guimaraes © Institutional Relations and Communication --> Chief Officer: Luiz Henrique Michalik GA Objectives of the new structure © More efficiency in decision-making
Slide 6: Installed capacity of 84MW added in 2010
\ Qf Installed capacity of B4MW added in 2010 i @ _49MW with startup of Ceara Wind Farm (10OMW — Cemig GT stake 49%) @ _35MWin startups of Small Hydro Plants | @& Santo Antonio hydro complex © _ Startup date of Santo Antonio plant brought forward to December 2011 @ 2.4% increase in Assured Energy ap
Slide 7: Distribution: Cemig is Brazil's best energy
Distribution: Cemig is “Brazil's best energy’ SAID (outage duration) index: Brazilian State capitals with over 500k consumers - South, Southeast, Center-West regions - 2010 Cative Pero Alegre Geldnie So Paulo Source: Aneel Heeizoate SAIDI = Systor Averege Iterption orton Index (Howrs/yet) Qa SND ind
Slide 8: Gasmig: distribution network now km
Gasmig: distribution network now 795 km @ South of Minas distribution network - 104 km: opened ‘in 2010 © Second phase of “Stee! Valley” (Vale do Aco) network: opened September 2010 © Start of operation of 393km of gas pipelines Growth in conventional gas: 220 million m3/year Volume sold (million m3
Slide 9: Cemig once again chosen for the Dow Jones Sustainability Index
Cemig once again chosen for the Dow Jones Sustainability Index (DJSI) @ _Mthconsecutive yearin the index ~ every year since its creation © Only Latin American electricity company included in the index ~ since its creation © _ Selection reflects Cemig’s daily commitment to economic performance, socie
Slide 10: Growth strategy
Growth strategy GC Growth model sustains Cemig’s leadership in Brazilian electricity sector Ge Dividends received from holdings reach R$ 266 million in 2010 GC Holdings are vehicles of growth in the sector @ Addition of value for financial partners — a permanent commitment @ Weare currently forming
Slide 11: Remuneration to the shareholder
Remuneration to the shareholder @ Dividends paid in 2010 reach RS 1.8 billion © Ordinary dividends RS 931mn, paid in equal parts in June and December 2010 © _ Extraordinary dividends: R§ 900 million, paid in December 2010 © Total retum tothe shareholder, in 2010: @ CemigPN: § +9.3% © CemigON: — +12.
Slide 12: Portfolio of businesses and financial discipline put Cemig on path of sustainable growth
A Portfolio of businesses and financial discipline puts Cemig on path of sustainable growth and addition of value for shareholders: @ Solidity of results © Balance between the 3 main businesses (G, T, D) increases predictability, reduces risk © Strong operational cash flow for payment of dividends,
Slide 13: Debt profile
Debt profile Tmt metres paps FRELRGR 3% a 6% TH vor 13% tidied 3% Bo 16% soy MA © cpu oom SEEEEGEE ar we Me a oa TE oourros omuens me Q Average real cost of debt (%) esl debt a De 31,2010 9 ry ry 706 a0 tetany a eC 68 68 58 54 53 57 65 ede 0 sa as aks et a 38 42 veces 2 a8 a Neck Gos ays) 0.2% sa su
Slide 14: 2010 Results
Slide 15: Consolidated sales volume
a Consolidated sales volume Consolidated sales, 2010- Hh x ™ % Record consolidated sales in 2010: 66,255 GWh Robust growth in all consumer categories © Growth of Brazilian economy boosts demand inside and outside concession area (Free Consumers) © Sales volume traded on CCEE (spot market) reflects s
Slide 16: Sales Volume
ales Volume Variation by type in 2010 - GWh ‘Volume by market - GWh aa 7 34.268 Zz. = i F @ é > ¢ ¢& & rf fa 2 > € ® Wh ice a) Aegated and a fail é a eG a é Qa Q @ Growth in sales to free industrial clients due to strong expansion of the market in Minas Gerais M Increase in sales of electricity from
Slide 17: Cemig D sales by consumer category
¢ Do sales by consumer categ Cemig D: 2010 sales volume - GWh 11% 25,037 22,550 2009 2010 Qa 4 Strong growth reflects the expansion of the economy of Minas Gerais GP Captive market grew by 3.4%, with highest growth in Residential, Commercial/Services and Rural GC Sales on the CCEE were possible beca
Slide 18: Consolidated net revenue
Consolidated net revenue Consolidated net revenue, 2009-2010 RS mn a AF F ? - = ? f ¢ é é é ¢ Balanced portfolio of businesses leads to increase in net revenue in 2010 Ce Robust increase in revenue from use of network reflects acquisition of Taesa and increased stake in TBE A Expansion of demand for
Slide 19: Consolidated operational expenses
Consolidated operational expenses Consolidated expenses: 2009-2010, mn ce in 2010 - R§ mn 9,216 8,501 | ee be a 7 pftté y Lye Was Program of operational efficiency and cost reduction starting to produce sults © Personnel expenses reduced by R$ 107 million (2009-2010) CA Priority given to preventive
Slide 20: Ebitda of Cemig in 2010
Ebitda of ec — in 2010 I corapio Generation I oaveacie Dette Hi Tronamsato ‘Transmesien WE outres others 48 %
Slide 21: Profit allocation proposal
PROFIT ALLOCATION PROPOS. GC The Board of Directors will propose to the Annual General Meeting, to be held in April 2010, that the net profit for the year, of R$ 2.258 billion, should be allocated as follows: @ R$ 1.196 billion (52.97% of the net profit) to payment of dividends @ Dividends declared
Slide 22: Cash Flow, 2010 and 2009
Cash Flow, 2010 and 2009 Provision for operational asses 78) (168) Other adjustments m (292) Financing obtained and capital increase 523 Payments of loans and financings. (4.715) (1.016) Interest on Equity and dividends (1.829) (937) Investments (1.380) (1390) Property, Plant and Equipment (2.645) (
Slide 23: Investment program
Investment pro — PLANNED Generation Transmission n n 7 CemigD 507 1.299 954 Cemig (Holding >) Ot funding “142 ‘Minas Gerais state Tema Participagées( Equity) LIGHT /Redentor Offering - LUCE BA 388 . TBE 104 » 7 Loos acquisition -Paracambi PHC 20 (Note) Aroans estimated from 2010 onward aed on copra
Slide 24: Long-term target is 20% market share in electricity segments
Long-term target is 20% market share in the various segments of the electricity market Transmission ® Generation ® ‘Transmission under construction © Generation under construction ® Cemig Free lent © wind power generation © Purchase of electricity © Telecommunication © eassistiation 338 see al 860 ®
Slide 25: Market capitalization values in R$ billion
“Values in RS Billion The market captalzation{s the total number ofthe Company/s shares mulled bythe closing price of the prefered shares ‘onWarch 5, 2010, Q
Slide 26: Shareholders
aucynene ilo © Shares traded on 3 stock exchangés © More than 114,000 Shareholders in 44 countries
Slide 27: Capital markets and Investor relations
4 TT, R Capital markets and Investor relations a \ \ o@ Stock performance Q Investor relations in 2010 © More than 500 one-on-one meetings © 4Non Deal Road Shows © 15 congresses, training courses and trade shows (with stand) © 36 seminars, conferences and special events
Slide 28: Investor Relations
Investor Relations ri@cemig.com.br Phone Number: (55-31) 3506-5024 Fax: (55-31) 3506-5025 C-MIG CEMIG Ge: sigs its aS ATS mes [SE DE CD BEBE won nivel? NYSE. NYSE XCMIG 01
Slide 29: Glossary of terms
‘AER: Regulated Contracting Emvonment in which purchases and sles imohing Détibutrs acu by means of pub auctions. ‘AG: Free Catrcting Environment, in which purchases and sales of electity among Free Clint, Marites and Generaoss cc throvgh fee negotiated biteal contracts. ‘ANEEL The rian energy secto
Slide 30: Glossary: payout, P/E, PLD and tariff terms
Payout - Percent of net income to be distributed as didends. IL (Prieto Eammings Ratio) - Relationship between share ric and prof per share PL Shareholders Equity PLD Price or icuidaton of iferences, calle “Spot pice TD. Deford Tarif Adjustment: ANEEL defined the resus ofthe prod tarifadutmet of Cem
Slide 31: IFRS impacts
Slide 32: Table of Contents: Cemig consolidated charts
Table of Contents APPENDIX Table of Contents Cemig Consolidated charts from I to IX (Values in million of Reais) Charts I Energy Sales (Consolidated) 2010 2009 Change% Residential 9.944 9.744 Industrial 24.826 22.638 Commercial 6.227 6.198 Rural 2.466 2.220 Others 3.663 3.635 Subtotal 47.127 44.435
Slide 33: Brazilian annual GDP growth
Sources: Brazilian Geography and Statistics Institute (IBGE), Finance Ministry. Chart: Brazilian annual GDP growth in the years 2003 through 2010, and the Finance Ministry’s forecast estimates for the next 4 years. These are averages for four-year periods: · 2003 – 2006 è 3.5% · 2007 – 2010 è 4.53%
Slide 34: Growth in industrial production in Minas Gerais
Source: Brazilian Geography and Statistics Institute (IBGE). Growth in industrial production in Minas Gerais in 2010 (15%) was higher than the figure for all of Brazil (10.5%), and the fourth highest among Brazilian states. In line with the growth in GDP and industrial production, Brazilian electric
Slide 35: Brazilian electricity consumption in 2010 highest in 8 years
Source: EPE (Energy Research Company). Brazilian electricity consumption in 2010 was its highest in 8 years, at 419,016 GWh The very strong growth in Brazilian domestic demand, of 10.3%, created a mismatch between the growth of Table of Contents domestic absorption and the capacity for expansion of
Slide 36: The electricity market of Cemig GT
Table of Contents — The electricity market of Cemig GT Cemig GT sold 36,440 GWh in 2010, 6% more than in 2009 (34,268 GWh). This level of sales is the result of Cemig’s sales and business strategy, and its position as the largest wholesale supplier in the Brazilian market. The quantity of electricit
Slide 37: Average cost of Cemig's debt
The average cost of Cemig’s debt has shown itself to be at adequate levels over the years (6.76% p.a., at constant prices, on December 31, 2010; 5.32% p.a., at the end of December 2009; and 8.98% p.a., in December 2008), with a concentration in contracts indexed to the CDI rate (58% of the total in
Slide 38: Reference Form: candidates for Board and Audit Board
Table of Contents APPENDIX 8 Reference Form: Items 12.6 to 12.10 — Information on the candidates for membership of the Board of Directors and the Audit Board of Cemig indicated by the controlling stockholder 12.6. Information on the Audit Board member: Name: Aristóteles Luiz Menezes Vasconcellos Dru
Energy Co of Minas Gerais — FY2010 Earnings Presentation on 6ix