investor report 1 1s 11 - geb...gas natural 21.1% gases de occidente 16% epm 9.2% isagen 5.7% otros...

Investor Report

1S 11

1

Contact: Juan Felipe González Rivera Phone: 571 3268000 ext 1546 E mail: [email protected]

Bogota D.C., October 2011

Index

Executive summary and highlights.

The natural gas market in Colombia

Operational performance

Commercial performance

Financial performance

Annex 1: Legal notice and clarifications.

Annex 2: Consolidated financial statements.

Annex 3: Overview of EEB – TGI´s controlling company.

Annex 4: TGI´s overview.

Annex 5: Technical and regulatory terms.

Annex 6: Notes to the tables.

Investor Report

1S 11

2


Executive summary and highlights

Table # 1 – TGI selected indicators As of 2Q 11 As of 2Q 10 Var % F 10 Operating revenue - COP mm 307,489 277,682 10.7 559,414 Operating income - COP mm 183,426 168,582 8.8 194,564 EBITDA LTM - COP mm 442,948 418,496 5.8 422,699 Net income - COP mm 161,763 179,167 -9.7 69,831 Transported volume – mm cfd 424 423 0.2 422 Firm contracted capacity – mm cfd 540 420 28.6 485 International Credit Rating :

S&P - Jun11: BB; stable Fitch - Jan 11: BB; stable

Improvement in EBITDA is a direct consequence of a higher transportation capacity thanks to the start of operations of

two expansion projects: Guajira; Sept. 2010; + 70 mmcfd and Cusiana Phase I; Jan. 2011; + 70 mmcfd.

In February 2011, a TGI shareholders’ meeting approved the delisting of the company’s shares from the Colombian stock

market. Under Colombian law, the company must carry out a public offer for minority shareholdings when this occurs. On

May 17, 2011, EEB announced a public offer, or OPA, to purchase 1,333,309 shares, equivalent to 1.17% of the total.

The OPA was completed on June 14, with the purchase of 1,298,819 shares for COP 20,119 per share. As a result of the

OPA, EEB’s shareholding in TGI is currently 68.1%.

In February 23, the BOMT Ballena - Barranca was transferred to TGI, after it was acquired for USD 2.19 million.

In March 2, the capitalization of TGI by CVCI was completed. The latter provide capital resources worth USD 400 million

for 31.92% of the stock. After this operation, EEB holds 68.1%, CVCI 31.92% and other shareholders 0.04% of the

company.

CREG resolution 126 of 2010 defined the new regulatory WACC parameters, which will be used to calculate the

company’s transportation tariffs. TGI expects that the new tariffs defined by CREG will come into effect by the end of

2011.

The three expansion projects that the company is working on, will increase transportation capacity by more than 50%.

Two of these, Guajira and Cusiana Phase I, are already in operation.

Cusiana Phase II is advancing in line with the project timetable, and the company expects it to enter service before the

end of 2011.

Table # 2 - Expansion projects in Colombia Guajira – Ballena Barranca Cusiana Phase I Cusiana Phase II Capex - usd Mm 200 190 260 Financing plan Company cash Capitalization Capitalization

Additional capacity - mm cfd: 70 70 110 New nominal capacity 260 280 390 Completed as of Q4 10 - % 98,28 99,51 59,22 In operation: Sep 10 Jan 11 4Q 11

Investor Report

1S 11

3


The natural gas market in Colombia

In 2011, the reduction in domestic demand for natural gas is principally the result of the decrease in consumption by the

thermal sector. It should be noted that in the first five months of 2010, Colombia faced the El Niño phenomenon; drought

conditions reduced hydroelectric generation capacity and increased the need for thermal generation. As a result, demand

was unusually high in the first half of 2010.

Industrial and commercial demand increased vigorously as a result in the rebound in economic activity in Colombia. The

rate of economic growth accelerated from 4.1% in the first half of 2010 to 5.1% in the first half of 2011.

The increase in exports to Venezuela is the consequence of the elimination of the restrictions put into place by the

Ministerio de Minas y Energia during the first part of 2010 in order to meet the greater domestic demand for natural gas.

Operational performance

The system’s total capacity and firm contracted capacity increased as a result of the start of operations of the Guajira and

Cusiana Phase I expansions. Together, these two projects added 140 mm cfd to the company’s transportation capacity.

The volume transported by TGI increased slightly, despite the decrease in domestic natural gas consumption. This is a

result of the fact that TGI’s market area is less exposed to changes in demand from the thermal sector, which is the

market segment with the highest reduction in consumption during the first half of this year.

Natural gas losses were below the regulatory ceiling. In addition, since April 2011, new measuring systems were installed

on the Mariquita-Cali pipeline to control losses that were evident on this system last year.

The total length of the system increased as a result of the start of operations of several “loops” on the Cusiana Phase I

expansion.

Table # 3 - Natural gas demand in Colombia GBTU d Per

As of April – 11 As April - 10 Var.

%

Thermal 212 478 -55.6 Residential - commercial 169 150 12.7 Industrial – Refineries 360 305 18.0 Vehicle 72 78 -7.7

Petrochemical 13 12 8.3 Domestic demand 826 1,023 -19.3

Exports 186 78 138.5 Total 1,012 1,101 -8.1 Source: CNO Gas

Table # 4 – Selected operational indicators As of 2Q 11 As of 2Q 10 Var % F 10 Unit Total capacity (1) 583 443 31.6 513 mm cfd Transported volume (3) 424 423 0.2 422 mm cfd Firm contracted capacity (2) 540 420 28.6 485 mm cfd Load factor (4) 59.26 73.3 -16.2 71.2 % Availability (5) 99.29 99.3 -0.7 99.2 % Losses (6) 0.45 0.66 -45.5 0.56 % Gas pipeline length 3,774 3,529 6.9 3,774 Km Gas pipeline length 2,345 2,206 6.9 2,345 Mi Footnotes in annex 6

Investor Report

1S 11

4


Commercial performance

Table # 5 – Volume by transporter – mm cfd As of April 11 Part. % As of April 10 Part. % F 10 TGI 428,3 51,9 425,5 41,6 422 Promigas 328,7 39,8 516,1 50,4 399 Others 69,0 8,4 81,4 8,0 63 Total 826,0 100,0 1023,0 100,0 884 Source: CNO Gas

Ecopetrol 25.7%

Gas Natural

24.0%

Gases de Occidente

16%

EPM 7.1%

Isagen 4.6%

Otros21.9%

2Q11: 164,837

Sales by client

Usd 000

Ecopetrol 26.4%

Gas Natural

21.1%

Gases de Occidente

16%

EPM 9.2%

Isagen 5.7%

Otros21.5%

2Q10: 131,337

Table # 6 – Summary of TGI´s main customers

Company Summary Financial summary F 10 - COP mm

Some figures were estimated

▪ Integrated oil company with operations in crude, natural gas and liquid fuels. It is among the group of the 40 largest oil companies in the world.

▪ Shares listed in the Colombian, US, and Canadian public markets

▪ International rating: BBB-

▪ Operating revenue: COP 26,461,509

▪ EBITDA: COP 16,699,500

▪ Net income: COP 5,604,019

▪ Largest distributor and retailer of natural gas in Colombia, with over 1,600,000 customers.

▪ Controlled by Gas Natural de España.

▪ Local rating: AAA

▪ Operating revenue: COP 688,063 2

▪ EBITDA: COP 253,619

▪ Net income: COP 189,757

▪ Natural gas distributor and retailer with operations in the south west of Colombia.

▪ Over 600,000 users.

▪ Local rating: AAA

▪ Operating revenue: COP 457,014



▪ The second largest electricity generation company in Colombia.

▪ International debt rating: BBB-

▪ Operating revenue: COP 7,975,365


▪ Net income: COP 1,462,028

▪ The third largest electricity generation company in Colombia.

▪ International rating: BB+.

▪ Operating revenue: 1,465,301

▪ EBITDA: 686,364


Investor Report

1S 11

5


Sales to the five largest customer accounted for 78% of total operating revenues. These are clients with proven financial

and credit quality, reflected in a past-due index of only 0.001% of total billed revenue in the last 12 months.

TGI’s transported volume is less exposed to seasonality of the thermal sector. Only 10% of this transported volume

comes from thermal plants.

Table # 7 – Contractual Structure End of June 11 End of June 10

Type of contract

No. Volume mm cfd

Average remaining life (years)

No. Volume mm cfd

Average remaining life (years)

Firm (1) 93 540 6 68 420 4.0

Interruptible (2) 0 11 20 0.50

Firm Guajira Expansion 12 64 7.2

Firm Cusiana Expansion 15 10.7

Footnotes in annex 6

The start of operations of the Guajira and Cusiana Phase I expansions explain the positive variations in contractual

indicators. The increase in firm contracted volume and the remaining contract life could result in greater stability in cash

flow generation for the company.

As of June 30, 2011, almost 100% of the nominal capacity of the Ballena – Barrancabermeja gas pipeline was contracted

through 2020; and 87% of the nominal capacity of the Cusiana – La Belleza pipeline was contracted for the period

January 1, 2011 to December 31, 2020.

Investor Report

1S 11

6


Financial performance

Sales linked to USD grew at a slower rate than sales in COP as a result of the appreciation of the COP.

The increase in revenues for capacity charges is explained by the start of operations of the Guajira and Cusiana Phase I

expansions.

Table # 8 – Revenue structure – COP mm As of 2Q 11

As of 2Q 10 Var. % F10 USD mm

Operating revenue 307,489 277,682 10.7 559,414 307,489 By currency

Sales linked to USD (1) 172,574 168,409 2.5 334,259 172,574 Sales in COP (1) 134,915 109,273 23.5 225,154 134,915

By type of charge Capacity charges (2) 244,954 192,358 27.3 397,260 244,954 Variable charges (3) 38,343 61,027 -37.2 102,333 38,343 Non - recurring charges (4) 18,451 15,096 22.2 43,908 18,451 Other (5) 5,741 9,201 -37.6 15,912 5,741


Table #9 - Selected financial indicators

COP mm Variation COP mm USD mm

As of 2Q 11 As of 2Q 10 COP % F 10 As of 2Q 11 As of 2Q 10 Operating revenue 307,489 277,682 29,807 10.7 559,414 172.7 144.9

Operating income 183,426 168,582 14,845 8.8 193,544 103.0 88.0

Operating margin % 59.7 60.7 - -1.6 34.6 59.7 60.7

EBITDA LTM (1) 442,948 418,496 24,452 5.8 422,029 248.8 218.4

EBITDA margin LTM% 75.2 76.5 - -.1.7 75.4 75.2 76.5

Net income 161,763 179,167 -17,404 -9.7 69,831 90.9 93.5


Capacity80%

Variable12%

Non recurring6%

Others2%

2Q 11

Capacity69%

Variable22%

Non recurring6%

Others3%

2Q 10

Total Sales - Type of Charge

Index to the USD56%

In COP 44%

2Q 11

Index to the USD

61%

In COP 39%

2Q 10

Total Sales - Type of Currency

Investor Report

1S 11

7


-

100,000

200,000

300,000

400,000

500,000

1T 10 2T 10 3T 10 F 10 1T 11 2T 11

Dep., amort and prov LTM 93,009 93,446 92,581 228,485 234,228 234,560

Oper. Income LTM 314,661 325,050 323,638 193,544 212,522 208,388

CO

P m

m

EBITDA Reconciliation - LTM

Table # 10 – Operating results COP mm Variation COP

mm USD mm

As of 2Q 11

As of 2Q 11

COP % F 10

As of 2Q 11

As of 2Q 10

Operating revenue 307,489 277,682 29,807 10.7 559,414 172.7 144.9 Operating cost 101,929 92,050 9,879 10.7 -187,174 57.3 48.0

Operating and maintenance 55,564 51,168 4,395 8.6 105,850 31.2 26.7 Provisions, depreciations and amortizations

46,365 40,882

5,483 13.4 81,324 26.0 21.3

Gross margin 205,560 185,632 19,928 10.7 372,239 115.5 96.9 Operating and administrative expenses 22,134 17,051 5,083 29.8 -178,696 12.4 8.9

Personnel and general services 17,936 13,445 4,492 33.4 31,534 10.1 7.0 Provisions, depreciation and amortization

4,198 3,606

591 16.4 147,161 2.4 1.9

Operating income 183,426 168,582 14,845 8.8 193,544 103.0 88.0

The increase in contracted capacity, as a result of the start of operations of the Guajira and Cusiana Phase I projects, had

a positive impact on operating revenues.

The increase in operating and maintenance costs is explained, principally, by increased insurance expense as a result of

the incorporation of the new transportation system assets – the Guajira and Cusiana expansions – which also explains

the increase in provisions and depreciation and amortization charges.

Finally, the increase in personnel and general services expenses is related to the increase in the financial transactions tax

as a result, principally, of the capitalization by CVCI.

Table # 11 – Non-operating results

COP mm Variation COP mm USD mm As of 2Q11 As of 2Q 10 COP % F 10

As of 2Q 11 As of 2Q 10

Operating income 183,426 168,582 14,845 8.8 193,544 103.0 88.0 Non operating income 145,680 152,563 -6,883 -4.5 164,395 81.9 79.6 Financial (1) 6,197 2,572 3,625 140.9 6,345 3.5 1.3

Exchange differences (2) 135,012 146,350 -11,338 -7.7 151,457 75.8 76.4 Hedging Valuation (3) - - - 0 0 0 Others 4,471 3,641 830 22.8 6,593 2.5 1.9

Non operating expenses 154,575 130,364 24,211 18.6 -264,485 86.8 68.0 Financial (4) 97,752 107,818 -10,066 -9.3 -210,215 54.9 56.2

Exchange differences (5) - - - - 0 0 0 Hedging valuation (6) 49,747 21,064 28,683 136.2 -50,327 27.9 11.0 Others 7,076 1,482 5,594 377.4 -3,943 3.98 0.8

Income before income tax 174,531 190,781 -16,249 -8.5 93,454 98.0 99.5 Income tax 12,768 11,613 1,155 9.9 23,623 7.2 6.0

Net Income 161,763 179,167 -17,404 -9.7 69,831 90.9 93.5 Footnotes in annex 6

Net income decreased during this period because of the mark to market valuation of the company’s hedging positions –

USD 300 million – which generated a substantially greater expense than in the prior year period. The valuation of

Investor Report

1S 11

8


derivatives depends not only on the variation in exchange rates, but also on the interest rate differential between

Colombia and the United States in the forwards and swaps market.

Table # 12 – Debt ratios 2Q 11 2Q 10 Unit Net debt (1) / EBITDA LTM (2) OM: < 4.8

2.20 3.05 Times

EBITDA LTM (2) / Interest expense LTM (3) OM: > 1.7

2.32 2.08 Times

Debt structure Rate Due Senior international bonds (4)

S&P - Jun 11: BB; stable Fitch - Jan 11: BB; stable

750

750

USD mm

9.50%

03-Oct-2017

Subordinated (5) 370 370 USD mm

8.75% 10-Oct-2017

SNote: Footnotes in annex 6ubordinated (5)

3.14 3.05

2.94

3.26

1.48

2.20

4.80

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Leverage Ratio

Net debt / EBITDA LTM Covenant

2.02 2.08 2.05 2.072.23 2.32

1.70

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Interest Coverage Ratio

EBITDA LTM / Interest Covenant

The leverage indicator – net debt/EBITDA LTM – decreased as a result of (•) the increase in EBITDA as the result of the

start of operations of the Guajira and Cusiana Phase I expansions, and (•) the improvement in the cash flow due to the

capitalization by CVCI.

The interest coverage indicator – EBITDA / interest – increased due to higher EBITDA for the reasons mentioned above.

Table # 14 – Capex COP mm Var. USD mm

As of 2Q 11 As of 2Q 10 COP Var % As of 2Q 11 As of 2Q 11 Investment(1) 530,510 180,234 350,276 194 298.0 94.0

Maintenance(2) 1,417 2,900 1,483 -51 0.8 1.5

Note: Footnotes in annex 6

The increase in capex reflects the Cusiana Phase I and II expansion projects.

Table # 13 - Reconciliation – COP mm 2Q 11 2Q 10 EBITDA LTM 442,948 418,496 Total debt 1,365,772 1,437,345

Cash and temporary investments

390,554 159,158

Net debt 975,218 1,278,187

Interest LTM 190,756 201,000

Investor Report

1S 11

9


Annex 1: Legal notice and clarifications

This document contains projections and estimates, using words such as “anticipate”, “believe”, “expect”, “estimate,” and

others having a similar meaning. Any information different from the historical data included in this submittal, including but

without limitation, that relative to the Company’s financial situation, its business strategy, plans, and objectives from

Management for future operations (including the development of plans and objectives relative to Company products and

services), corresponds to projections.

Such projections involve known and unknown risks, uncertainties and other important factors that may cause the Company’s

results, performance or actual achievements to be materially different from the results, performance or future achievements

that are expressed or implicit in the projections. Such projections are based on numerous assumptions concerning the

Company’s present and future business strategies, and the environment in which the Company will operate in the future.

These estimates pertain only to the date of this submittal. The Company expressly declares itself to be exempt from any

obligation or commitment to distribute updates or reviews of any projection contained in this submittal, so as to reflect any

change to the Company’s expectations regarding them or any change in the events, conditions or circumstances on which

these projections may be based.

Financial projections and other estimates contained in this report were based on economic, competitive, regulatory and

operational assumptions, and take into account risks that are beyond the control of the Company. Financial projections are

uncertain and it can be expected that one or more of the assumptions under which these projections and estimates were

based becomes invalid. Also unexpected events or circumstances may occur. For the foregoing reasons, actual results may

differ significantly from the projections contained herein. Consequently, the projections herein should not be considered as

statements of fact. Potential investors should not consider the forward-looking statements contained herein or rely on them to

make investment decisions.

The company’s past performance cannot be considered a guide for its future performance.

Clarifications to the Report

For information purposes only, we have converted some of the figures in this report to their equivalent in USD, using the

TRM rate for the end of the period as published by the Colombian Financial Superintendence. The exchange rates used

are as follows:

- TRM 2Q11: 1,780.2 COP/USD

- TRM 2Q10: 1,916.5 COP/USD

In the figures submitted, a comma (,) is used to separate thousands and a period (.) to separate decimals.

EBITDA is not an acknowledged indicator under Colombian or US accounting standards and may show some difficulties

as an analytical tool. Therefore, it must not be taken on its own as an indicator of the company´s cash generation.

Consolidated and adjusted EBITDA for a specific period is calculated taking the consolidated EBITDA for such period and

adding the cash coming from EEB attributable to capital reductions of those companies where EEB has shares.

Investor Report

1S 11

10


Annex 2: Consolidated financial statements

Investor Report

1S 11

11


Investor Report

1S 11

12


Investor Report

1S 11

13


Annex 3: Controlling company overview – EEB

EEB is an integrated energy company with interests in the natural gas and electricity sectors and operations in Colombia,

Peru and Guatemala;

The company was founded in 1896 and it is controlled by the District of Bogotá (81.5%; S&P BBB- rating);

EEB has an expansion strategy focused on the transmission and distribution of energy in Colombia and other countries

within the region.

EEB participates in the entire electricity value chain and in almost all the natural gas value chain, except for exploration

and production of this resource.

EEB is one of the most important Colombian corporate debt issuers. In 2007, EEB and TGI issued corporate bonds for

USD 1.36 billion in the 144A market.

Since 2009, EEB’s stock is traded in the Colombian Stock Exchange.

68.1% 25%

15.6%

Electricity

Transmission

40%

40%1.8%

98.4%

Generation

51.5%

2.5%

Distribution

51.5% 16.2%

51%

82%

DistributionTransportation

Natural Gas

25%

75%

60%

*

* * *

*

* EEB has the controlling interest

Investor Report

1S 11

14


Annex 4: TGI overview

- TGI is key to EEB’s growth strategy;

- It is the largest natural gas transporter in Colombia and operates a natural monopoly in a sector with high growth potential

and whose development is of central interest to the Colombian Government;

- TGI is the only natural gas transporter in Colombia connecting the main sources of supply - Guajira and Cusiana- with the

main consumption centers. TGI’s area of influence consumption represents approximately 60% of the country’s total.

- TGI is subject to regulations issued by the Ministry of Mines and Energy and by CREG. Creg defines the maximum tariffs

that TGI may charge its customers based on the principals of financial feasibility and economic efficiency. The tariff

scheme is designed to provide the transporter with an appropriate return on investment and to recover operation and

maintenance costs. The part of the tariff that repays the investment is indexed to USD which gives the company a natural

hedge against its foreign currency obligations.

- Almost all company’s sales are supported by in firm and long term contracts entered into with sound companies that

operate in Colombia.

- TGI is currently undertaking the two most ambitious expansion projects in the Colombian natural gas transport

infrastructure: the enhancement of the Guajira and Cusiana gas pipelines, with an estimated capex of USD 650 mm.

- TGI holds a 25% interest in the Peruvian company ConTUgas -the remaining 75% is held by EEB-. ConTUgas is the

company awarded with a concession to build the natural gas transport and distribution network in southern Peru -

department of ICA-. The estimated cost of the aforementioned project amounts to Usd 280 mm. Official forecasts

estimate that in the coming years the natural gas demand in the ICA region will experience the fastest growth in the

country.

Investor Report

1S 11

15


Annex 5: Technical and regulatory terms

- ANH: Agencia Nacional de Hidrocarburos. Colombian entity in charge of managing and promoting the appropriate use of

hydrocarbons.

- AOM: Administrative, operation and maintenance expenses and costs.

- Bln or bln: US billion (one thousand million).

- BOMT: Build, Operate, Maintain and Transfer Contract. A contract to develop natural gas pipelines, whereby a third party

commits to building, operating, maintaining and transferring the pipeline.

- BR: Banco de la República. Colombia’s Central Bank; responsible for the country’s monetary and exchange policy.

- BTU: British Thermal Unit.

- COP / Cop: Colombian peso.

- CFD or cfd: cubic feet per day.

- CREG: Comisión de Regulación de Energía y Gas de Colombia. (Colombia’s Energy and Gas Regulating Commission).

Colombia’s state agency in charge of regulating electric power and natural gas residential public utility services.

- Cuota de Fomento – Development Quota: Refers to resources collected by Ecogas from users to build new natural gas

infrastructure projects.

- DANE: Departamento Administrativo Nacional de Estadística (National Administrative Statistics Department). Agency

responsible for planning, collecting, processing, analyzing, and disseminating official statistics in Colombia.

- DNP: Departamento Nacional de Planeación. National Planning Department. Entity in charge of the country’s economic

planning.

- EEB: Empresa de Energía de Bogotá. TGI’s major shareholder.

- GNV: Natural Gas for vehicles.

- GPC: Giga cubic feet (109)

- FDI: Foreign Direct Investment

- IPC: Colombian Consumer Price Index.

- Km: Kilometers.

- MEM: Ministerio de Energía y Minas del Perú. Ministry of Mines and Energy - Peru. State entity in charge of preparing

mining and energy policies for Peru.

- Mm/mm: Million

- Minminas: Ministerio de Minas y Energía – Ministry of Mines and Energy. State entity in charge of preparing mining and

energy policies for Colombia.

- Mi: US thousand.

- PIB: Producto Interno Bruto – Gross Domestic Product - GDP.

- Pbs: Basis points; 100 basis points equals one percent.

- SF: Superintendencia Financiera – Financial Superintendence. State entity in charge of regulating, overseeing and

controlling the Colombian financial sector.

- TGI: Transportadora de Gas del Interior.

- TRM: Market Representative Exchange Rate; it is an average of peso–dollar transactions carried out, and it is calculated

daily by the SF.

- R/P: Reserves production ratio. Calculates the duration of reserves given the production level at a given moment.

- SSPD: Household Public Utility Superintendence. State agency in charge of controlling, inspecting and overseeing

household utility companies.

- UPME: State agency responsible for planning Colombia’s mining and energy sectors.

- USD: US dollars.

Investor Report

1S 11

16


Annex 6: Table footnotes

Footnote Table # 4: Selected operational indicators;

(6) Difference between gas volumes received and gas volumes delivered considering the changes in inventories. It is

measured as a percentage with respect to the volume received by the customers. CREG acknowledges 1% in its tariff

structure as maximum losses that can be transferred to the customers.

Footnote Table # 7: Contractual structure

(1) Contracts where TGI S.A ESP guaranties the availability of a defined transportation capacity during a certain period of

time. Remuneration for this type of contracts may be fixed and/or variable.

(2) Contracts in which the transport service foresees and allows for its interruption by any party for any reason, without this

giving rise to any type of compensation by the party suspending the service.

Footnote Table # 8: Revenue structure

(1) Gas regulation in Colombia divides the tariff to users into two parts; one part is set to recognize investments and the

other one the administration, operation and maintenance - AOM - expenses and costs. The portion of the tariff

acknowledging investments is linked to the dollar and is adjusted on an annual basis based on the U.S. “Capital

Equipment” IPP; and it is paid in pesos at the TRM at the end of every month. The portion that acknowledges the AOM

is defined in pesos and is linked annually with the Colombian IPC (consumer price index).

(2) Capacity charges or fixed charges obliged the transporter to maintain a certain transport capacity available when

required by the customer. In turn, the customer undertakes to pay for such capacity irrespective of the transported

volume.

(3) Variable charges obliged the transporter to maintain an available capacity when required by the customer.

Nevertheless, and unlike the previously described scheme, the customer only pays for the volume effectively

transported, although at a higher tariff. In general terms, TGI customers maintain contracting schemes that combine

fixed and variable charges.

(4) Non-recurring charges do not generate the obligation of firmness for the transporter. That is to say, the transporter has

the right to interrupt the service.

(5) Additional services provided by the company, such as new connections or odorization.

Footnote Table # 9: Selected financial indicators

(1) Operating income plus amortization, depreciation and provisions.

Footnote Table # 11: Non-operating results

(1) Includes the financial returns of the temporary investments.

(2) Reflects the impact of the peso devaluation in the value of the assets and liabilities in foreign currency.

(1) Nominal transporting capacity at the end of a period.

(2) Contracts by which TGI is obliged to keep a certain transporting capacity available to the customer.

(3) Average transported volume in a certain period.

(4) Ratio between the nominated volume by costumers and the transporting capacity.

(5) Real gas transporting capacity in a certain period in relation with the nominal capacity.

Investor Report

1S 11

17


(3) Valuate the hedges contracted by the company to reduce the risk in the payment of principal of the debt in foreign

currency.

(4) Are the financial expenses related to the company’s debt.

(5) Reflects the impact of the peso revaluation in the valuation of the assets and liabilities in foreign currency.

(6) Valuate the hedges contracted by the company to reduce the risk in the payment of principal of the debt in foreign

currency.

Footnote Table # 12: Debt indicators

(1) According to the indenture of the Notes, the company’s net debt only considers TGI’s senior debt less the value of cash

and temporary investments.

(2) Corresponds to the EBITDA generated by TGI in the last 12 months.

(3) Corresponds to the accrued interest of financial obligations incurred by TGI in the last 12 months.

(4) Is the value of the notes issued by TGI ltd and guaranteed by TGI.

(5) It corresponds to the inter-company debt between TGI and EEB.

Footnote Table # 14: Capex

(1) Applies to all investments to increase the transport capacity of the company.

(2) Applies to all investments aimed to maintain in an appropriate state the assets of the company to allow normal

operation of the system.

investor report 1 1s 11 - geb...gas natural 21.1% gases de occidente 16% epm 9.2% isagen 5.7% otros...

Documents