Investors Report 1 2Q 11...Investors Report 2Q 11 2 Contact: Juan Felipe González Rivera Telephone:...

Investors Report

2Q 11

1

Contact: Juan Felipe González Rivera

Telephone: 571 3268000 ext 1546

E mail: [email protected]

Bogota D.C, September 2011

Index

Executive summary and key developments.

Performance of controlled investments.

- EEB – Transmission

- TGI

- DECSA – EEC

- Cálidda Performance of Non - Controlled investments.

- Emgesa

- Codensa

- Promigas

- Gas natural

- REP y CTM EEB consolidated financial performance.

Annex 1: Legal notice and clarifications.

Annex 2: EEB´s consolidated and stand alone financial statements.

Annex 3: Overview of EEB

Annex 4: Technical and regulatory terms.

Annex 5: EBITDA LTM reconciliation.

Annex 6: Tables and graphics’ footnotes.

Executive summary and key developments

Table # 1 – Overview of the electricity sectors as of 2Q 11 Colombia Peru Guatemala Installed capacity – MW 13,814 7,516 2,181 Demand – GWh 27,944 9,119 3,503* Demand growth 2Q 11/2Q 10 % 0.29 6.2 5.7* Growth drivers Moderate demand growth

for routine maintenance in heavy users. Isolating this effect the growth would have been 3.5%.

The Peruvian economy continues to grow at a rate above 9%.

Industrial growth and rural electrification.

Sources: XM, UPME, COES - Peru, AMM – Guatemala *As of may

Table # 2 - Overview of the natural gas sectors as of 2Q 11 Colombia Peru Proven and probable reserves - TPC 8.5 24 Demand - mm cfd 823 404 Demand growth 2Q 11/2Q 10 % -17.4 64.9 Growth drivers Lower demand from thermo

generation due to the dissipation of El Niño.

Other sectors increased their demand.

Strong demand growth from industrial and vehicular sectors and new thermo generation plants in operation.

Increased residential demand in Lima and Callao.

Sources: UPME; CNO; MEM – Peru

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Table # 3 – EEB´s consolidated financial indicators COP mm As of 2Q 11 As of 2Q 10 F 10 Operating revenue 665,599 471,917 932,435 Operating income 253,466 214,054 268,288

Consolidated EBITDA 1,231,148 1,242,854 1,601,354

Dividends and reserves decreed to EEB 179,185 603,778 1,059,205

Net income 281,269 776,237 1,092,944

Dividends and reserves decreed by EEB 0 291,537 995,706

Last credit rating international bonds (144A) S&P – Jun 11: BB stable Fitch – Jan 11: BB stable

Operating income increased principally due to the result of (i) the consolidation of the results of Cálidda, the Peruvian gas

distribution company that operates in Lima and Callao, and (ii) improved operating income at TGI, as a result of the start

of operations of the Guajira and Cusiana Phase I natural gas transportation system expansions.

On March 30, 2011, the General Shareholders’ Meeting approved a 10:1 share split in order to improve the liquidity of the

shares. This split became effective June 20, 2011 on the Colombian Stock Exchange.

On May 17, 2011 EEB announced a public tender for TGI minority shareholdings, offering to purchase 1,333,309 shares

equivalent to 1.17% of the total shares. The tender offer was completed on June 14, with the purchase of 1,298,819

shares for COP 20,119 per share. As a result, EEB now owns 68.1% of TGI.

On June 16, 2011, the Board of Directors of EEB approved carrying out a liability management operation involving the

USD 610 million corporate bonds issued in 2007. The bond matures in October 2014 and is callable at 104.375% starting

October 31, 2011. The company is analyzing the best alternative to carry out this operation.

On August 9, 2011, a Shareholders’ Meeting approved the issuance of up to COP 1 billion in ordinary shares, or

approximately USD 530 million. The Shareholders’ Meeting delegated to the Board of Directors the oversight and timing

of the transaction.

Table # 4 - Summary of EEB´s expansion projects Project / company Country Sector Capex USD mm Status In operation: Guajira – TGI Colombia Natural gas transportation 200 In operation Since 3Q 10 Cusiana I – TGI Colombia Natural gas transportation 190 In operation Since 1Q 11 Cusiana II – TGI Colombia Natural gas transportation 260 Under construction 4Q 11 ICA - CoTUgas Peru Natural gas transportation and distribution 280 Under construction 3Q 13 Guatemala - Trecsa Guatemala Electricity transmission 376 Under construction 4Q 13 Lima – Cálidda Peru Natural gas distribution 160 Under construction 4Q 11 – 2Q 12 Reactors – EEB Colombia Electricity transmission 6.9 Under construction 2Q 12

Cusiana Phase II - TGI: Based on the advance in the construction, this project is expected to start operation by the end of

2011.

Guatemala – TRECSA:

- The company has received six of the environmental permits required to develop the project. TRECSA continues

working on obtaining the remaining required permits. The advance of the project is in line with the established

timetable.

ICA - ConTUgas:

- The company continues to advance in the contracting for the pipe and the civil works for the construction of the

system. The company is finalizing the negotiations for the transportation and commercial contracts for non-residential

clients. As of June 2011, the project was 43% completed.

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- The company expects to be providing service to approximately 1,000 users by the end of 2011, out of the total of

50,000 that are expected to be connected six years after the project starts operation.

- The project’s financial plan contemplates 30% equity - 75% from EEB and 25% from TGI – and 70% debt. The latter

could include debt contracted in the Peruvian market, multilateral loans, and an intercompany loan from EEB. The

company has contracted the services of a Peruvian bank to structure the financing.

- As of the end of June 2011, total Capex invested in the project was USD 7.1 million, of a total of USD 108 million that

is expected to be invested in 2011.

Lima - Cálidda:

- The strategic objective of the company is to have 600,000 clients connected by the end of 2015.

- In the next two years, the company expects to invest USD 160 million in the construction and putting into service of

the new residential network that is part of the company’s expansion plan. This new network is expected to be in

operation by the first semester of 2012.

Reactors – EEB:

- As of June 30, 2011, the advance on the project was 29.3%, compared to an expected 32.2%.

Table # 5 - Selected financial indicators as of 2Q 11 - Non-controlled investments COP mm USD mm

Emgesa Codensa Gas Natural Promigas REP CTM

Operating revenue 897,013 1,439,205 540,722 627,084 49.2 16.4 Operating income 532,776 351,196 176,063 130,603 18.4 9.7 EBITDA LTM 1,199,078 1,046,272 368,874 378,922 32.9 27.1 Net income 313,483 209,510 130,465 92,242 9.5 8.2 Dividends and reserves decreed to EEB 80,537 69,214 17,593 33,134 0 0 Capital reductions to EEB 0 0 0 0 0 0

Table # 6 - Summary of expansion projects of non-controlled companies

Project Company Sector Country Capex USD mm In

operation: Quimbo Emgesa Electricity generation Colombia 837 14 Substations Codensa Electricity distribution Colombia 68 11 Expansions to concessions REP Electricity transmission Peru 72 11 Expansions to concessions and new concessions

CTM Electricity transmission Peru 748 11 - 13

Expansions Promigas Natural gas transportation and distribution

Colombia 192 14

El Quimbo - Emgesa: In mid-June the Ministry of the Environment announced preventive measures that stopped the

acquisition of land. These measures were lifted and did not affect the construction timetable. Start of operations is

scheduled for December 2014.

Expansion of the concession agreement of REP: The construction of the expansions advanced in line with the timetable,

except for Expansion No. 8, which is encountering some delays; however, activities were rescheduled in order to meet

the startup date of September 12, 2011.

Expansion of the Concession / New Concessions - CTM: In May 2011, the Independencia-Ica and Chilca-Planicie-

Zapallal projects entered service. The other projects of the company are advancing in line with their respective schedules.

Return to index

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Performance of controlling investments

Table # 7 – EEB´s selected transmission business indicators* As of 2Q 11

As of 2Q 10

Var % F 10

Operational Income 25,984 24,924 4.3 48,500 EBITDA LTM 33,147 31,891 3.9 63,191

Infrastructure availability - % (1) 99.90 99.88 0.02 99.9

Compensation for unavailability - % (2) 0.001 0.002 -50.0 0.0012

Maintenance program compliance - % (3) 100 100 0.0 100

Participation in Colombia’s transmission activity - % (4) 7.92 7.81 1.4 7.9

Investments - COP mm 1,793 1,604 11.8 4,994

*EEB operates directly this business. Footnotes in annex 6

The Transmission business continues showing excellent operational indicators.

Table # 8 – TGI´s 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 – mmcfd 424 422 0.2 422

Firm contracted capacity – mmcfd 540 420 28.6 485

International debt ratings S&P - Jun 11: BB; stable

Fitch - Jan 11: BB; stable

The increases in operating income, EBITDA, and contracted volume are principally the result of the increase in installed

and contracted capacity of the company as the result of the start of operation of the Guajira and Cusiana Phase I

expansions.

The reduction in net income is the result of lower non-operating revenues as the result of exchange differences. This is an

accounting effect, without effect on cash flow, related to the valuation of the financial debt of the company, which is

denominated, entirety, in U.S. dollars.

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Table # 9 – EEC´s selected indicators - Controlled by DECSA

As of 2Q 11

AS of 2Q 10

Var % F 10

Number of clients 243.441 236.428 3.0 239,077 Operating revenue - COP mm 125.264 147.803 -15.2 279,310 Operational income - COP mm 22.511 23.502 -4.2 33,790 EBITDA LTM - COP mm 27.000 28.523 -5.3 43,901 Net Income - COP mm 10.536 29.165 -63.9 43,723 Losses - % (1) 13.69 14.62 -6.4 13,27 Footnotes in annex 6

The decrease in operating revenues reflects the decision by the company to stop serving certain low margin non-

regulated clients. It should be noted that the decrease in operating income is much less that the decrease in revenues.

This reflects the impact of the cold wave on demand in EEC’s markets.

The performance of net income is the result of an accounting cleanup after taking control of EEC in 2009.

Table # 10 – Cálidda´s selected indicators

As of 2Q 11

AS of 2Q 10

Var % F 10

Number of clients 49,651 25,375 95.7 30,794 Operating revenue - COP mm 103,563 69,558 48.9 157,813 Operational income - COP mm 21,727 7,191 202.1 20,744 EBITDA LTM - COP mm 46,157 20,610 124.0 27,815 Net Income - COP mm 12,759 3,325 283.7 9,569 Footnotes in annex 6

The improved results of the company reflect the expansion plan. Currently, the company has 50,000 clients connected,

and the objective is the reach 600,0000 clients before the end of 2015.

In addition, the growth of the Peruvian economy increased energy demand by Cálidda’s industrial and power generation

clients.

Return to index

Performance of Non - controlled investments

Table # 11 – Overview of Emgesa

Installed capacity 2Q 11 – MW 2,866 Composition 10 hydro and 2 thermo

Generation 2Q 11 – Gwh 5,510 Sales 2Q 11 – Gwh 7,224 Operating revenue 2Q 11 - COP mm 897,013 EBITDA LTM 2Q 11 - COP mm 1,199,078 Controlled by Endesa – Spain EEB´s stake 51.5% - 37.4% ordinary shares; 14.1% preferred non-voting shares

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5,434

1,705

7,138

5,080

2,144

7,224

Contracts Spot Total

Sales GWh

1S 10 1S 111.2%

-6.5%

25.7%

5,098

188

1,916 2,104

5,510

283

1,4921,775

Production Contracts Spot Total

Supply GWh

1S 10 1S 118.1%

-22.1%

50.2%

0.3%

As a result of the end of the El Niño phenomenon and the recovery of reservoir levels, the company increased production

and reduced spot market purchases. This had a strong benefit to the company’s operating margins.

Table # 12 – Capex

As of 2Q 11 As of 2Q 10 Var % F 10 COP mm 118,955 13,495 781.5 117,395

USD mm 66.82 7.04 849 59.0

Capex increased because of investments in El Quimbo. Through the first semester of 2011, the largest part of these was

for the construction of the diversion tunnels and civil works for the work camps.

Table # 13 - Selected financial indicators of Emgesa COP mm COP mm USD mm

2Q 11 2Q 10 Var % F 10 2Q 11 2Q 10 Operating revenue 897,013 979,203 -8.4 1,886,779 503.9 510.9 Cost of sales -348,966 -531,728 -34.4 -894,261 -196 277.5 Administrative expenses -14,987 -8,969 67.1 -21,790 -8.4 4.7 Operating income 533,060 438,505 21.6 970,728 299.4 228.8 EBITDA LTM (1) 1,199,078 1,035,153 15.7 1,109,312 673.6 540.3 Net income 313,483 264,049 18.7 571,977 176.1 137.8 Dividends and reserves decreed to EEB 80,537 251,769 -68.8 251,770 45.2 131.4 Capital reductions to EEB 0 229,143 N.A 229,120 0 119.6 Net debt (2) / EBITDA LTM N.D N.D 1.3 N.D N.D EBITDA LTM / Interest (3) N.D N.D 8.4 N.D N.D Footnotes in annex 6

Operating revenues decreased as a result of lower energy prices with the end of the El Niño phenomenon. Despite the

reduction in revenue, operating income increased as a result of a lower level of fuel used for generation and fewer

purchases of energy on the spot market.

The increase in administrative expenses reflects higher payments for the financial transaction tax, that was adjusted in

the December 2010 tax reform.

The reduction of dividends declared in favor of EEB reflects the fact that at the end of 2010, the company declared

dividends based on the period January-September 2010. As a result, the dividends declared by Emgesa in 2011 were for

the period Octuber-December 2010.

The 2010 tax reform eliminated the special deduction for investments in fixed assets. Thanks to the fact that Emgesa has

a stability agreement with El Quimbo, the elimination of this deduction did not have a significant effect on net income.

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Table # 14 – Overview of Codensa

Number of customers 2,461,027 Market share 2Q 11 - % 23.8% Codensa demand 2Q 11 – Gwh 6,671.6 Var. of Codensa´s demand 2Q 11/ 2Q 10 - % 3.1% Operational revenues F 10 - COP Mm 1,439,204 EBITDA LTM - COP Mm 1,046,272 Controlled by Endesa – Spain EEB´s stake 51.5% (36.4% ordinary shares; 15.1% preferred non-voting shares)

Codensa’s demand is growing at a rate faster than national demand thanks to the recovery of industrial production in

Colombia. It should be remembered that the company serves the region where the largest share of Colombia’s industrial

production is concentrated.


As of 2Q 11 As of 2Q 10 Var % F 10 COP mm 92,074 68,793 33.8 299,282

USD mm 51,7 35,8 44.4 156.4

The increase in Capex is related to the construction of four projects in Bogota. These include new substations or the

rehabilitation of existing substations to bring the distribution infrastructure in line with the growth in demand. A portion of

Capex – approximately 18% – is linked to the new quality of service requirements issued by the CREG in 2008, and

which became effective in April 2011.

Codensa19%

National81%

Demand - Codensa and National

1.7%2.0%

-3.7%

3.3%

1.4%

-0.1%

-2.2%

2.2%

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

Demand Change - Codensa vs. National

Condensa National

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Table # 16 - Selected financial indicators of Codensa COP mm COP mm USD mm As of 2Q 11 As of 2Q 10 Var % F 10 As of 2Q 11 As of 2Q 10 Operating revenue 1,439,204 1,368,756 5.1 2,787,215 808.5 714.2 Cost of sales 1,050,617 992,254 5.9 -1,989,855 590.2 517.8 Administrative expenses 37,391 21,265 75.8 -54,943 21 1.1 Operational income 351,195 355,237 -1.1 742,417 197.3 185.4 EBITDA LTM (1) 1,046,272 997,079 4.9 993,362 587.8 520.4 Net income 209,510 229,895 -8.9 480,353 117.7 120.0 Dividends and reserves decreed to EEB 69,214 263,199 -280 443,189 38.9 137.3 Capital reductions to EEB 0 0 0 0 0 0 Net debt (2) / EBITDA LTM N.D N.D N.D 1.05 N.D N.D EBITDA LTM / Interests (3) N.D N.D N.D 9.98 N.D N.D Footnotes in annex 6

There was a slight reduction in the operating margin as a result of an increase in the energy that the company had to

acquire at a slightly higher price in order to meet growing demand and an increase in expenses related to the tax on

financial transactions, as a result of tax reform in December 2010.

Net income decreased more than the decrease in operating income. This is the result, mainly, of the elimination of the

30% deduction for investment in fixed assets. This special deduction was eliminated in the tax reform approved by the

Colombian Congress in December 2010.

The reduction of dividends declared in favor of EEB reflects the fact that at the end of 2010, the company declared

dividends based on January- September financials. As a result, the dividends declared for 2011 correspond only to the

period November-December 2010.

Table # 17 –Overview of Promigas

Number of customers 2,297,760

Sales in volume - mmcfd 405

Market share - % 39.8

Network – km 2,188

Operating revenue 2Q 11 - COP mm 665,599

EBITDA LTM - COP mm 1,231,181

Controlled by AEI

EEB´s stake 15.64%


As of 2Q 11 As of 2Q 10 Var % F 10

COP mm 7,765 N.D N.A N.D USD mm 4.36 N.D N.A N.D

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Table # 19 - Selected financial indicators of Promigas COP mm COP mm USD mm

As of 2Q 11 As of 2Q 10 Var % F 10 As of 2Q 11 As of 2Q 10 Operating revenue 627,084 N.D N.A 1,483,027 352.3 N.D Cost of sales 419,439 N.D N.A 996,999 235.6 N.D Administrative expenses 77,042 N.D N.A 196,346 43.3 N.D Operational Income 130,603 N.D N.A 289,682 73.4 N.D EBITDA LTM (1) 378,922 N.D N.A 399,078 212.9 N.D Net income 92,242 N.D N.A 265,075 51.8 N.D Dividends and reserves decreed to EEB 33,134 0 0 18.6 N.D Capital reductions to EEB 0 0 0 N.D N.D Net debt (2) / EBITDA N.D N.D 3.27 N.D N.D EBITDA / Interests (3) N.D N.D 3.65 N.D N.D Footnotes in annex 6

Table # 20 –Overview of Gas Natural

Number of customers 1,726,426

Sales in volume - Mm cfd 134.7

Market share - % 29

Network – km 12,412

Operating revenue 1Q 11 - COP mm 519,282

EBITDA LTM - COP mm 368,874

Controlled by Gas Natural Fenosa - Spain

EEB´s stake 25%

Sale volume of natural gas rose principally as a result of the recovery in industrial demand and the elimination of

restrictions imposed in the first part of 2010 on supplying natural gas for vehicular and industrial use, in order to provide

greater supplies for thermal generation as a result of El Niño.

Residential29%

Commercial12%Industrial

43%

Vehicle16%

Sales by CustomerTotal: 134.6 mmpfd

2.6%

-1.9%

1.8%

6.3%

3Q 10 4Q10 1Q11 2Q11

Change in Sales

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The company is expanding its distribution networks in the municipalities neighboring Bogotá.

Table # 22 - Selected financial indicators of Gas Natural COP mm COP mm USD mm

As of 2Q 11 As of 2Q 10 Var % F 10 As of 2Q 11 As of 2Q 10 Operating revenue 519,282 442,144 17.4 935,623 291.7 230.7 Cost of sales -296,864 -251,114 18.2 -533,243 -166.8 -131.0 Administrative expenses -51,735 -45,789 13.0 -93,724 -29.1 -23.9 Operational Income 170,682 145,241 17.5 308,585 95.9 75.8 EBITDA LTM (1) 368,874 343,349 7.4 340,492 207.2 179.2 Net income 130,465 120,088 8.6 259,034 73.3 62.7 Dividends and reserves decreed to EEB 17,593 69,004 -74.5 116,442 9.9 36.0 Capital reductions to EEB 0 0 N.A 0 0 0 Net debt (2) / EBITDA 1.16 0.67 N.D 1.3 N.D N.D EBITDA / Interests (3) 25.90 34.75 N.D 31.9 N.D N.D Footnotes in annex 6

The improved results are a consequence of the recovery of industrial demand in the region where the company

operates and the elimination of the restrictions imposed in 2010 on supply of gas for industrial and vehicular use as a

result of El Niño.

The reduction in dividends declared in favor of EEB reflects the fact that at the end of 2010, the company declared

dividends base don January-October financials, and dividends declared in 2011 correspond only to the period

November-December 2011.

Table # 23 - Overview Rep and CTM

REP CTM Network - km 5,837 1,490 Voltage – kv 220, 138, 60 220, 138

Control led by ISA Colombia EEB´s stake - % 40


As of 2Q 11 As of 2Q 10 Var % F 10

COP mm 5,670 4,065 39.5 18,471 USD mm 3.2 2,1 38.5 9,7

Table # 24 - Selected financial indicators of REP USD mm USD mm

As of 2Q 11 As of 2Q 10 Var % F 10 Operating revenue 49.3 47.2 4.4 93.4

Cost of sales 30.8 24.8 24.2 -40.5

Operating income 18.4 22.4 -17.9 35.1

EBITDA LTM (1) 32.9 30.6 7.4 59.2

Net income 9.5 14.8 -35.8 19.8

Dividends decreed to EEB 0 0 0 0

Capital reductions to EEB 0 0 0 0

Net debt (2) / EBITDA ND ND ND 2.5 EBITDA / Interests (3) ND ND ND 8.1 Footnotes in annex 6

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The reduction in operating income results from a higher level of amortization and depreciation as a result of the adoption

of international financial reporting standards (IFRS), and specifically IAS 37, which requires a monthly provision for

infrastructure maintenance. In 2010, this provision was recorded only in the month of December.

Despite this, operating revenues grew as a result of the start up of an expansion of the concession. The company expects

that during 2011 another two expansions will start operations.

Operating income decreased as a result of higher operating services costs and the maintenance provision. It should be

remembered that REP provides various services to CTM, including the supervision of construction of new projects.

Net income increased thanks to the loan of transmission services to third parties. These are private contracts for the

transmission of electricity that in accordance with IFRS are classified as non-operating revenues.

Return to index

Table # 25 - Selected financial indicators of CTM USD mm USD mm

As of 2Q 11 As of 2Q 10 Var % F 10 Operating revenue 16.1 15.8 1.9 183.0

Cost of sales -6.4 -4.8 33.3 -161.0

Operating income 9.7 11.0 -11.8 20.6

EBITDA LTM (1) 27.1 27.5 -1.5 27.0

Net income 8.2 7.3 12.3 15.4 Dividends decreed to EEB 0 0 N.A 0

Capital reductions to EEB 0 0 N.A 0

Net debt (2) / EBITDA N.D. N.D. N.D. 2.7 EBITDA / Interest (3) N.D. N.D. N.D. 3.3 Footnotes in annex 6

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EEB´s Financial performance

Table # 26 - EEB´s consolidated results

COP mm Variación COP mm USD mm

2Q 11 2Q 10 % F 10 2Q 11 2Q 10 Operating revenue (1) 665,599 471,917 41.0 932,435 373.9 246.2

Electricity transmission 48,798 46,434 5.1 93,711 27.4 24.2

Electricity distribution 124,954 147,800 -15.5 279,310 70.2 77.1 Natural gas trans. and dist. 491,847 277,682 77.1 559,414 276.3 144.9

Cost of sales (2) -346,403 -220,862 56.8 -426,161 -194.6 115.2 Electricity transmission -20,419 -19,073 7.1 -39,094 -11.5 10.0 Electricity distribution -92,950 -109,739 -15.3 -199,893 -52.2 57.3 Natural gas trans. and dist. 233,034 -92,050 153.1 -187,174 -130.9 48.0

Gross income 319,196 251,055 27.1 506,274 179.3 131.0 Administrative expenses -65,729 37,001 77.7 -237,986 -36.9 19.3

Allocated to electricity transmission (3) -2,414 -3,957 -38.9 -6,117 -1.4 1.3 Electricity distribution -16,253 -19,361 -16.1 -55,524 -9.1 10.1

Natural gas trans. and dist. -47,062 -13,682 243.9 -176,344 -26.4 7.9 Operating income 253,466 214,054 18.4 268,288 142.4 111.7

Dividends (4) 179,186 635,447 -70.3 1,059,205 100.7 315.0 Interest on temp. investments & pension trusts (5)

28,258 31,669 -10.8 77,302 15.8 16.5

Net exchange difference (6) 148,071 166,764 -11.2 168,959 83.2 87.0 Net valuation of hedging contracts (7) -51,647 -23,512 119.7 -62,333 -29.0 -12.3

Other revenue (8) 10,558 26,891 -60.7 78,634 5.9 14.0 Administrative expenses (9) -57,831 -58,321 -0.8 -151,846 -32.5 -30.4

Financial expenses -134,239 -160,800 -2.2 -258,799 -75.4 -71.7 Other expenses -628 -3,566 -82.4 -7,747 -353 -1.8 Net income before taxes and minority interest

375,194 820,468 -54.3 1,171,663 210.8 428.1

Minority interest (8) -66,944 -19,215 248.4 -24,978 -37.6 -10.0

Provision for income tax -26,981 -25,016 7.9 -53,741 -15.2 -13.1 Net income 281,269 776,237 -63.8 1,092,944 158.0 405.0

Footnotes in annex 6

The increase in operating income reflects principally (i) the consolidation of Cálidda in the financial statements and (ii) the

additional revenue derived from the start of operations of TGI’s Guajira and Cusiana Phase I transport system

expansions.

On the other hand, the decrease in net income reflects the lower level of dividends declared in favor of EEB on the part of

companies in which EEB participates. Three of these - Emgesa, Codensa and Gas Natural - declared dividends based on

results for the last months of 2010 only, since at the end of 2010 they had already declared dividends for the January-

September for the case of Emgesa and Codensa and January-October for Gas Natural.

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Table # 27 – EEB’s Financial indicators COP mm COP mm USD mm 2Q 11 2Q 10 Var % F 10 2Q 11 2Q 10

EBITDA LTM (1) 1,232,148 1,242,854 -0.9 1,601,354 692.2 648.5 Adjusted EBITDA LTM (2) 1,232,148 1,471,974 -16.3 1,830,474 692.2 768.1 EBITDA margin % (3) 66.3 75.3 -12 77.4 66.3 75.3 Net debt (4) / EBITDA LTM (1) OM: < 4.5

1.89 1.58 33.5 1.44 1.89 1.58

EBITDA LTM (1) / Interest (5) OM: > 2.25

6.75 6.56 4.42 9.41 6.75 6.56

Footnotes in annex 6

1,242,8541,135,986

1,601,354

1,220,081 1,231,148

2T 10 3T10 4T10 1T11 2T11

EBITDA LTM –COP mm

-8.6%

40.97%

-23.81%

1%

1.58 1.63 1.441.65 1.89

4.5

2T 10 3T 10 4T 10 1T 11 2T 11

Net debt /EBITDA LTM OM<

6.566.49

9.41

7.28

6.75

2.25

2T 10 3T 10 4T 10 1T 11 2T 11

EBITDA LTM/ Interest OM>

Consolidated EBITDA for the last twelve months (LTM) was practically unchanged in comparison to the same period last

year. On the other hand, the reduction in operating income was offset by an increase in provisions. The performance of

these two items (operating income and provisions) is related to the asset revaluation process that TGI has to undertake

every three years. The last such revaluation took place in 2010, with effects on both the balance sheet and income

statement. In the income statement there was an increase in the provision for asset devaluations of COP 139,875 million,

in accordance with Colombian GAAP.

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The Adjusted EBITDA LTM decreased as a result of the fact that the results for the period ending June 2011 do not

include the reduction in capital that EEB received from Emgesa in the prior year period, in the amount of COP 229,120

million.

The leverage ratio showed a slight deterioration in the second quarter of 2011 as a result of i) the less amount of

dividends declared to EEB due to the early dividend declaration. In the case of Emgesa, Codensa and Gas Natural, these

correspond to the last months of 2010, ii) an increase in consolidated debt as the result of the disbursement of a short-

term loan to EEB. These resources were used for the acquisition of the assets of Ashmore in Cálidda and Promigas. The

company plans to refinance this loan with long-term debt from the capital markets, and iii) the consolidation of Cálidda’s

debt in EEB’s financial statements.

The interest coverage ratio also decreased as compared to June 2010, principally as a result of the consolidation of

Cálidda’s interest expense.

Table # 28 - EEB Consolidated debt structure 2Q 11

COP mm Part.

% 2Q 10

COP mm Part.

% F 10

USD mm 2Q 11

USD mm 2Q 10

USD mm

Financial debt in COP 198,000 6.1 100,000 3.3 100,638 111 52 Financial debt in USD 2,841,826 87.3 2,805,329 92.0 2,801,083 1,596 1,464 Derivatives position 217,165 6.7 145,368 4.8 171,847 122 76 Total financial debt 3,256,991 100 3,050,696 100 3,073,568 1,830 1,592

Debt increased by COP 98,000 million as the result of a loan disbursed to EEB in February 2011 that was used for the

acquisition of Ashmore’s assets in Cálidda and Promigas. The company expects to refinance this debt funds from the

capital markets.

In addition, since the first quarter of 2011, the long-term obligations of Cálidda have been consolidated; these are all

dollar-denominated and total USD 114 million. Despite the increase in financial debt denominated in USD, the value

expressed in COP increased only 1.3%, as a result of the revaluation of the Colombian peso.

The valuation of derivatives positions was also affected by the revaluation of the Colombian peso.

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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

Only for information purposes, 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 Superintendency. The exchange rates used

are as follows:

− 2Q 11: 1,780.2 COP/USD

− 2Q 10: 1,916.5 COP/USD

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

In accordance to the offer memorandum of the notes issued by EEB (USD 610 million; 8.75%; 2014); the company’s

consolidated EBITDA for a specific period is calculated taking operating revenues for such period and subtracting the cost

of sales, administrative expenses and interests generated in pension funds. One must add decreed dividends

(irrespective of whether they have been paid or not), interests of temporary investments, indirect taxes, amortization of

intangibles, depreciation of fixed assets and provisions and contributions made to pension funds.

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.

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Annex 2: Consolidated financial statements as of June

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Annex 3: EEB´s overview

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

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Annex 4: Technical and regulatory terms

BLN: U.S. billion (109)

CAG: Compound Annual Growth

COP: Colombian Peso.

CHB: Central Hidroeléctrica de Betania

CTM: Consorcio Transmantaro,

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.

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

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

GWH: Gigawatt hour; unit of energy equivalent to 1,000,000 kwh,

GNV: Natural Gas for vehicles

IPC: Colombian Consumer Price Index.

KM: Kilometers

KWH: Unit of energy equivalent to the energy produced by a power of one kilowatt (kW) for one hour

MEM: Mercado de Energía Mayorista de Colombia; Wholesale Energy Market in Colombia

MM: million

Ml: Miles, thousand

MW: Megawatt, power unit or work which equals one million watts,

N.A. Not applicable.

NON REGULATED ELECTRICITY USER: electricity consumers who have a peak demand greater than 0,10 MW or a

minimum monthly consumption above 55,0 MWh,

NATURAL GAS NON REGULATED USER: user with consumption above 100 kcfd,

CFD: Cubic feet per day

Proinversión: Peruvian agency that promotes private investment in Peru.

SIN: Sistema Interconectado Nacional, National Interconnected System

STN: Sistema de Transmisión Nacional, National Transmission System

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

controlling the Colombian financial sector

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

calculated daily by the SF.

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

USD: U.S. dollars.

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Annex 5: EBITDA reconciliation

COP mm Variation COP mm USD mm 2Q 11 2Q 10 % F 10 2Q 11 2Q 10

Operating income 307,700 408,295 -24.6 268,288 172.8 213.0 Operating depreciation 70,787 49,066 44.3 49,617 39.8 25.6 Operating amortization 42,939 54,802 -21.6 50,799 24.1 28.6 Operating taxes 2,299 3,576 -35.7 1,412 1.3 1.9 Dividends & interests earned 733,534 780,578 -6.0 1,161,571 412.1 407.3 Interests in autonomous equity -14,082 -18,675 -24.6 -16,441 -7.9 -9.7 Administration expenses -151,356 -113,608 33.2 -151,846 -85.0 -59.3 Retirement pensions 26,148 26,236 -0.3 26,145 14.7 13.7 Amortizations 15,238 22,713 -32.9 11,512 8.6 11.9 Depreciations 1,481 722 105.0 1,428 0.8 0.4 Provisions 159,822 14,326 1,015.6 169,337 89.8 7.5 Taxes 37,637 14,822 153.9 29,851 21.1 7.7

EBITDA LTM 1,232,148 1,242,854 -0.9 1,601,673 692.2 648.5

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Annex 6: Footnotes

Table # 7 - EEB´s transmission business indicators

(1) Percentage of the infrastructure available in a period of time.

(2) Percentage of the revenue discounted due to accumulated unavailability of specific assets above the regulatory target.

(3) Ratio between the number of maintenance operations carried out and number of scheduled maintenance operations to be executed as part of the semi-annual Maintenance Plan.

(4) Ratio of the number of transmission assets owned by EEB and the total number of transmission assets in Colombia. Return to table

Table # 9 – Selected financial indicators of EEC - DECSA

(1) Percentage of energy loses. Return to table

Table # 13 – Selected financial indicators of EMGESA

(1) EBITDA for the period under analysis was calculated by taking the operating profit and adding the amortization of intangibles and depreciation of fixed assets for such period.

(2) It is the result of the financial debt in force at the end of the period under analysis, less cash and temporary investments in the same period.

(3) Accrued interest on financial debts for the previous twelve months.

Return to table

Table # 16 – Selected financial indicators of Codensa




Return to table

Table # 19 – Selected financial indicators of Promigas




Table # 22 – Selected financial indicators of Promigas



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Return to table

Table #24 – Selected financial indicators of REP




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Table # 25 – Selected financial indicators of CTM




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Table # 26 - Consolidated results of EEB

(1) Operating revenue for transmission services rendered directly by EEB, natural gas transmission and distribution of TGI and Cálidda, respectively; as well as energy distribution services that Decsa consolidates for his participation in EEC.

(2) Cost of sales of the transmission services rendered directly by EEB, natural gas transportation and distribution services and electricity distribution services conducted by its controlled companies. It includes personnel, materials, operation and maintenance costs, depreciation, amortization and insurances related to those activities.

(3) Transmission activity is operated directly by EEB. Administrative costs are allocated by the ABC system.

(4) Dividends decreed by non-controlled companies and temporary investors and pension funds autonomous equity.

(5) Interests of temporary investments that are generated by pension funds autonomous equity.

(6) Refers to net losses or earnings due to exchange rate variations and its impact on assets and liabilities expressed in foreign currency.

(7) Valuation of hedging operations contracted by EEB and TGI to reduce currency risk.

(8) Income from recovery of investments, leases and expenses.

(9) Expenses are not related to operational activities.

(10) Proportion of net income corresponding to minority investors in the company’s consolidated by EEB.

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Table # 27 - Financial indicators of EEB

(1) Consolidation of EEB income less cost of sales, administrative expenses, interest on pension funds autonomous equity, plus dividends of participated companies, interest of Accounts receivable investments, indirect taxes, amortization of intangibles, depreciation of fixed assets, pension payments and provisions for the last 12 months. It is consolidated EBITDA plus capital reeducations of participated companies.

(2) Consolidated EBITDA plus capital reductions of participated companies.

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(3) Is the result obtained when dividing consolidated EBITDA by operating income, added by dividends and accrued interests (without including interests received from investments made to autonomous equity of pension funds) of the last 12 months.

(4) Consolidated debt less free cash.

(5) Consolidated financial expenses of the past 12 months

Return to table

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