Companhia Energetica De Minas Gerais Sa · BMFBOVESPA:CMIG3
Companhia Energetica De Minas Gerais Sa — Energy Co of Minas Gerais — Q3 2011 Earnings Presentation
51 slides from Companhia Energetica De Minas Gerais Sa's earnings presentation, Nov 28, 2011
Slide 1: Cemig Earnings Release 3Q11
CLG A Melhor Energia do Brasil Brazil's Best Energy Belo Horizonte, Brazil, November 14, 2011 IR contacts Chief Finance and Investor a Luiz Fernando Rolla Relations Ant6nio Carlos Vélez Braga ral ‘Stefano Dutra Vivenza Tel +55 (31) 3506-5024 Fax +55 (31) 3506-5026 ri@cemi i biiplocemig.com bi Invita
Slide 2: Sales per Company
‘Sales per Company — = ee
Slide 3: Operating Expenses (consolidated)
Operating Expere es (consolid ated) Values in RS milion
Slide 4: Financial Result Breakdown
Financial Result Breakdown, ‘values inmilions of reais peter wre =| a
Slide 5: Balance Sheets (Consolidated) - Assets
BALANCE SHEETS (CONSOLIDATED) ASSETS Values in millions of reais BALANCE SHEETS (CONSOLIDATED) - ASSETS 3a 2011 1att 2010 CURRENT 9,835 8,782 (Cash and cash equivalents 3,851 2,733, ‘Securities — cash investments @ eo Consumers and Traders 2e0 J A06 ‘Concession holders — Wanepod ofeneay a8 412 Finan
Slide 6: Balance Sheets (Consolidated) - Liabilities and Shareholders' Equity
BALANCE SHEETS (CONSOLIDATED) LIABILITIES AND SHAREHOLDERS’ EQUITY Values in millions of reais BALANCE SHEETS LIABILITIES AND SHAREHOLDERS! EQUITY coos Ea tn) Eas [CURRENT azar] it] 7.906 Supplies Pe ES Regulatory chases Ed ED ES Prof shares 73 #2 2 “Taxes, charges and contibions Ea a7 wi Theame tar
Slide 7: Cash Flow Statement (consolidated)
Cash Flow Statement (consolidat Values in mation of Reais
Slide 8: Operating Expenses (consolidated) - Cemig GT
Operating Expenses (consolidated) - CEMIG GT Values in milion of reais,
Slide 9: Cemig D Market
‘CEMIG D Market (cwn) "3009 5,555 4003 5,740 7a10, 5515 2010 3710 3010 Saat 4010 3,938 Tat 6,034 2a10) 5,968 sant 6.188 or evan Fh ‘Sum of th
Slide 10: Cee Deere es eonemnmne She S
Cee Deere es eonemnmne She S Values in milions of reais Ey CO 7 = a z esecion sn Avot nc z rons = ost nenenen Engg See 2 => 2 ci a = anal 4 aosmes = oo z
Slide 11: Results - 3Q11
Slide 12: Forward-looking statements
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 13: 3Q11 results
3011 results Net Revenue Ebitda ae Income W% 7 | z = | “Il ne 302010 302011 Co 302011 sexsi com Q Q Cemig continues to deliver excellent results to its shareholders ® Acquisitions and operational efficiency lead to record Ebitda © Net income in the first nine months of 2011 is R$ 1.7 billion ® Portf
Slide 14: Amazonia Energia created by Cemig GT and Light
Cemig GT and Light S.A. created the special-purpose company Amazonia Energia Participagoes S.A. ® Amazonia Energia acquired 9.7% of the Belo Monte Hydroelectric Plant © The largest power plant under construction in Brazil, with installed capacity of 11,233 MW © Located in an area that is strategic f
Slide 15: Environmental Programs
Environmental Programs © Premiar Program — urban trees: building a system of information about the distribution network, location and data on tree species. So far, 12,845 trees have been geo-referenced © Online training on Environmental Policy: completed by 7,120 employees, outsourced workers and in
Slide 16: Portfolio of businesses and financial discipline for sustainable growth
A Portfolio of businesses, and financial discipline, position Cemig on the path of sustainable growth and value accretion for shareholders: @ Solidity of results © Equilibrium between the three principal businesses (G, T, D) increases predictability and reduces risks © Strong operational cash flow f
Slide 17: Debt profile
Debt profile Dat may ttle vege no: 33 yes ‘NM ws we SE 0 Q Average real cost of debt”, % 73074 4 53 57 65 68 68 Sep/09 Dec09 Mar/10 Jun/T0 Sep/10 DecTO Mar/11 Juntt.Sep/tt “Mnert na 21 prs nding nas 16% Tale Ont rsgn carey eda And" et cd ud? Nec det (Sra gays et ae) ansaid db 30201 am Moin indrors 3
Slide 18: Debt profile of Cemig GT
Debt profile of Cemig GT Cemig GT: Debt maturities 1152 950 1,020 on 743 i 11 191 2011 2012 201320142015 «2016-2017 Prinipelindenors 1,16 % mO1,15 % FREL
Slide 19: Net profit
Resultado Net profit RS 567 0,37% Deferred income tax and Social Contribution an <a! 156% 18% ] Income tax and Social Contribution T Pretax profit — RS12620 t: 7% f Net financial Wekpeasesi(ES28d5 Bis, | 27 1 Operational aaBIO TLRS, 262 say Net operational ] Operational expenses ni itiome sx
Slide 20: Consolidated sales volume
ated sales volume onsale sales ome, Wh (302011) wae ‘@ mm 1M C 6% Qa @ Strong performance of the economy and increase in market share lead to record sales volume in 3011 Growth was uniform across all consumption categories A Cemig continues to lead the Free Market with approximately 25% market share
Slide 21: Sales Volume
Sales Volur Consumer types: YoY change, GW (302011) ‘Volume by market, Wh 9m sort —— — 3 Wh ircecients Fey Regulated wheel GC Expansion of the economy and gain in market share boost Cemig GT's sales @ Free Clients are almost 53% of Cemig GT's total sales GC Higher volume of settlements in the CEE is
Slide 22: Cemig D sales volume by consumer type
Cemig D sales volume by consumer type Sales| Wh Cemig D - Sales volume in 3011, GWh Aes 2M a ss Indesit 8 ) +H Conn 1383 umm tu 6,231 fal m ms * 302010 302011 (ee “ “a 6 [revensennennennvTunTNE SNE TONNES VO NTIS Q Q 4 Strong growth in demand from final consumers reflects intense economic activity i
Slide 23: Consolidated net revenue
ated net revenue eosatd net revenue cage 3010193018 on “ wo 1% AC Balanced portfolio of businesses sustains growth of 11% in net revenue in third quarter @ Holdings in transmission sector continue to contribute to increased grid use revenue GC Expansion of the economy and gain in market share boost
Slide 24: Expenses in 3Q11, R$ million
Expenses in 3Q11, RS million 5% Consolidated expenses, RS million (3011) » * ‘ 1 on ow | | a4 2,785 ee a 2,658 | | ‘ “3 . ( 302010 302011 $F PEEP EEF . th Fhe Lf lt] GC Operational Efficiency Program continues to generate excellent results @ Greater control of costs and management of PMSO expenses a
Slide 25: Financial results - profit is stable
Financial results - 30 profit is stable NET FINANCIAL RESULTS - 3011 Revenue from cash investments us 103 Arrears penalty payments on electricity bills 30 35 Interest and monetary updating on accountsrecevable 39 41 Monetary Variation of Taxes to offset 18 28 Others B a TOTAL FINANCIAL REVENUES 199
Slide 26: Net income by activity, 3Q11
Net income by activity, 3011 Ebitda of principal companies I cerapio Generation I oistinuicso Distrbston Ii Tronamsado Transmesion 49%
Slide 27: Strong cash position sustains investments
Strong cash position sustains investments Cash see Es mn Net profit Depreciation and amortization Bo 355 Suppliers 157 8 Provisions for operational losses -B 85 Other adjustments a Financings obtained and capital increase 44 Payments of loans and financings 6B 583 Interest on Equity, and dividends S
Slide 28: Investment program
Investment program PLANNED, 2011 PLANNED, 2012 Transmission " 4 BI Cemigd 518 1250 1.626 Cemnig Holding company 116 Minas Gerais State SPE Parati S/A- Redentor ~ Luce SPE Parati S/A Free Float- Braslight » 77 - TBE - Stock buyback 5 6 7 TOTAL INVESTMENTS 1032 1849 1755 ‘Aunts are estimated as from 2
Slide 29: Market value
"Market value = Cem’ toa shares) x (dosing price ofthe prefered shares on November 10,2011) Q
Slide 30: Profit allocation proposal approved on April 29
ert jam-t Feber mart) pet? omabt1 junto) ang sept uct f Profit allocation proposal approved on April 29 @ 53% of 2010 profit will be distributed as dividends © Dividends equivalent to R$ 1.75/share. Dividend yield at closing price of April 28: PN share: 6% ® ONshare: 7%
Slide 31: Long-term target is 20% market share
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 Client @ ‘Wind power generation (G) Purchase of electricity © Telecommunication © as distribution @® Dist
Slide 32: Investor Relations
Investor Relations ri@cemig.com.br Phone Number: (55-31) 3506-5024 Fax: (55-31) 3506-5025 C-MIG CMIGG we Que: da GaN CLATION snp [SE JR Op Bt nsses NEL NYSE NYSE XCMIG oT
Slide 33: Glossary of terms
‘AC: Regulated Contracting Emvonment in which purchases and sles imohing Déstbutrs ecu by means of pub auctions. ‘AG: Free Catrcting Environment, in which purchases and sales of electity among Free Clients, Marites and Genera cc throogh fee negotiated biatea contracts. ‘ANEEL The rian ener sectors r
Slide 34: Market Announcement - Non-binding Proposal for Interest in EDP
3. Market Announcement – Non-biding Proposal for Interest in EDP, October 24, 2011
Slide 35: Equity interest in the Belo Monte Hydroelectric Plant
Equity interest in the Belo Monte Hydroelectric Plant October 26, 2011
Slide 36: Disclaimer
Disclaimer Certain statements and estimates in this material may represent expectations about future events or results that are subject to risks and uncertainties that may be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations. Thes
Slide 37: Cemig and Light together reach nationwide
Cemig and Light together reach nationwide RS AM AC RO PA MA RR AP PI CE RN AL SE BA TO MT GO DF MS SP PR SC RS ES RJ MG Chile Brazil Distribution Generation Transmission Cemig Free Clients Generation – under construction Wind power generation Transmission – under construction Distribution of gas Ele
Slide 38: Expansion in hydroelectric generation: now includes the Amazon
Expansion in hydroelectric generation: now includes the Amazon Source: Eletrobrás (SIPOT). Hydro Inventory at December 2010 (MW) PB AM AC RO PA MA RR AP PI CE RN PE AL SE BA TO MT GO MS SP PR SC RS ES RJ MG The Amazon Region: Hydroelectric potential surveyed = 63% of Brazilian total DF Region Operat
Slide 39: Belo Monte: a project evolved over years
Belo Monte: a project evolved over 35 years 1975 – First studies of the hydroelectric inventory of the Xingu River Basin 1980 – Report finalized on energy potential of the Xingu River Basin 1989 – First Meeting of the Indigenous Peoples of the Xingu 1994 – Presentation of new project. Reservoir area
Slide 40: Summary of the Transaction
Summary of the Transaction Cemig GT and Light S.A. have jointly created the special-purpose company Amazônia Energia Participações S.A. (“Amazônia Energia”), to acquire 9.77% of Norte Energia S.A. (“NESA”), the company holding the concession for the Belo Monte Hydroelectric Plant. It will buy the fo
Slide 41: Overview of Norte Energia S.A.
Overview of: Norte Energia S.A. Public Sector holding Eletronorte 19,98% Chesf 15,00% Eletrobras 15,00% Total public sector 49,98% Private Sector Petros 10,00% Belo Monte Part. (Neoenergia) 10,00% Amazônia Energia 9,77% Vale 9,00% Funcef 5,00% Caixa FIP Cevix 5,00% Sinobras 1,00% J Malucelli Energia
Slide 42: Overview of Norte Energia S.A.: contracts and technical data
Overview of: Norte Energia S.A. Contracts for building works and equipment signed in Feb. 2011: Construction Consortium, of leading Brazilian companies in the sector, includes Andrade Gutierrez (Leader), Camargo Corrêa, Odebrecht. Equipment (rotors) supplied by Alstom, Andritz, Voith and Impsa. Tech
Slide 43: The Transaction: rationale
The Transaction: rationale Amazônia Energia will own 9.77% of the enterprise. Construction works estimated to take 9 years. Transaction does not effect dividend flows of Cemig Holding Company and Light S.A. BNDES loan ensures leverage at low cost on favaorable terms. – Tenor 30 years, fixed installm
Slide 44: More favorable financial conditions - inclusion in the PSI
More favorable financial conditions – inclusion in the PSI (1): Special financing line for plants with capacity of more than 10,000 MW. Value of PSI for Belo Monte: R$ 3.7 billion. Interest rate 5.5% nominal. Tenor: 30 years. Bridge loan released, with possibility of renewal Environmental costs alre
Slide 45: Technical uncertainties reduced
Technical uncertainties reduced: The Installation License was issued by Ibama on June 1, 2011, making it possible to precisely evaluate the economic impact of the social/environmental conditioning factors, and value the various environmental management actions. Construction of the canal: The origina
Slide 46: Environmental aspects
Environmental aspects Initial project was for 18,000 MW, reservoir of 1,225 km²: – present project reduces installed capacity to 11,233 MW and reservoir area to 516 km². Reservoir area/generation ratio of 0.05 km²/MW, is one of the lowest for any large plant. Indigenous lands will not be flooded. Th
Slide 47: Engineering excellence
Engineering excellence Excellence of engineering translates into increase in projects’ profitability: Irapé Hydro Plant: - Installed capacity increased from 360 MW to 396 MW. Baguari Hydro Plant: - Early startup of commercial operation increased IRR of original business plan. Santo Antônio Hydro Pla
Slide 48: Impacts of the Transaction for Cemig and Light
Impacts of the Transaction for Cemig and Light Increase in generation capacity of Cemig – MW ¹ Direct Cemig stockholding. Present capacity (+) Santo Antônio (+) Others (+) Belo Monte Capacity after expansion Increase in generation capacity of Light – MW Present capacity (+) Renova (+) Others (+) Bel
Slide 49: Contacts
15 (+55 - 31) 3506 - 5024 ri@cemig.com.br http://ri.cemig.com.br (+55 - 21) 2211 - 2682 ri@light.com.br http://www.light.com.br/ri 9. Summary of Principal Decisions of the 521 st Meeting of the Board of Directors, November 3, 2011
Slide 50: Summary of Minutes of the 521st Board Meeting
COMPANHIA ENERGETICA DE MINAS GERAIS — CEMIG LISTED COMPANY CNPJ 17.155.730/0001-64 — NIRE 31300040127 BOARD OF DIRECTORS SUMMARY OF MINUTES OF THE 521 MEETIN Date, time and place: November 3, 2011 at 9.30 a.m. at the company’s head office, Ay, Barbacena 1200, 21th Floor, Belo Horizonte, Minas Gerai
Slide 51: Market Announcement - Negotiations for Early Settlement of the CRC Account
11. Market Announcement – Negotiations for Early Settlement of the CRC Account, November 9, 2011
Energy Co of Minas Gerais — Q3 2011 Earnings Presentation on 6ix