3q13 presentation
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TRANSCRIPT
1
3Q13 Results Presentation
São Paulo, October 2013
2
Agenda
3Q13 and 9M13 Results
Capital Market Performance
CTEEP
IFRS X Regulatory
Other Highlights
3
Company Profile
Responsible for transmission of:
� 27% of all electricity produced in the
country
� 60% of the energy consumed in the
Southeast Region quase
� 100% in the state of São Paulo;
A network made up of:
� 13,724 Km of transmission lines
� 19,189 Km of circuits
� 2,280 Km of optic fiber cables
� 106 substations
A CTEEP faz parte da ISA, um dos maiores
grupos de transmissão da América Latina:
� 48 years experience in the electrical
industry
� Assets in power transmission,
telecommunication and and highways
� Present in Brasil, Chile, Argentina,
Colômbia, Peru, Bolívia and
América Central
� Long-term financial investor with an
emphasis on optimizing capital structure
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Shareholder Breakdown - 3Q13
Preferred Shares– TRPL4(58% of the total)
Ordinary Shares- TRPL3(42% of the total
Total Capital Stock
0,7%ISA Capital do BrasilEletrobrasOthers
37.8%
35.2%
6.1%3.8%
17.1%
53.9%
10.6%6.6%
29.0%
EletrobrasState Government of São PauloVinci LtdaOthers
89.5%
9.8%
0,7%
ISA Capital do BrasilEletrobrasState Government of São PauloVinci LtdaOthers
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Agenda
3Q13 and 9M13 Results
Capital Market Performance
CTEEP
IFRS X Regulatory
Other Highlights
6
Results
Consolidated
(*) ex Depreciation(**)ex Amortization of goodwill(***) Net worth calculated as the difference between R$ 516.3 million related to the valuation allowance for the portion of receivables from SEFAZ-SP and R$ 175.6 million related to credit deferred IR/CS (34%).
Gross Operating Revenue 323.3 660.8 (51.1%) 792.6 1,772.0 (55.3%)
Deductions from Operating Revenue (35.3) (74.0) (52.3%) (98.4) (210.2) (53.2%)
Net operating revenue 288.0 586.8 (50.9%) 694.2 1,561.8 (55.6%)
General and Administrative Expenses* (183.3) (175.5) 4.5% (548.2) (523.6) 4.7%
Depreciation (9.3) (8.4) 10.5% (27.9) (25.1) 11.0%
Other Operating (Expenses)/Income** 0.4 0.7 32.2% 17.3 (2.3) 836.3%
Equity 9.3 20.6 (55.1%) 53.8 46.6 15.3%
Financial Results 13.3 (46.2) 128.9% 64.3 (154.3) 141.6%
Operating Income 118.4 377.9 (68.7%) 253.4 903.1 (71.9%)
IR & CSLL (23.0) (136.6) (83.2%) (39.6) (255.5) (84.5%)
Net Income ex-SEFAZ-SP provision 95.4 241.3 (60.4%) 213.9 647.6 (67.0%)
SEFAZ-SP Provision (***) (340.7) 0.0 - (340.7) 0.0 -
Net Income (245.3) 241.3 (201.6%) (126.9) 647.6 (119.6%)
Results (R$ million)
∆%3Q13 3Q12 ∆% 9M13 9M12
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� In 3Q13, CTEEP reviewed amounts receivable under Law 4.819/58 and in thelight of events in 2013, set aside a provision for losses on the realization ofcredits for part of the total receivable amount corresponding to theinstallments not recognized as the exclusive responsibility of SEFAZ-SP, ofthese events most notablybeing:
(i) a change in the time horizon for realizing a part of the assets due toextinguishment without a ruling on merit of the legal action for collectingamounts due from the Government of the State of São Paulo and otherprocedural events;
(ii) recognition that the law courts are the correct jurisdictional forum tohandle the question based on STF precedent; and
(iii) the current legal status of the other actions in relation to Law 4.819/58,such as the recognition of the legitimacy of SEFAZ-SP’s pass-throughs toCTEEP of amounts which had been disallowed up to April 2013
SEFAZ-SP Provision – Law 4.819
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Gross Operating Revenue
3Q13 3Q12 Change 9M13 9M12 Change 3Q13 3Q12 Change 9M13 9M12 Change
Construction 54.9 38.1 44.1% 110.0 117.6 -6.5% 62.9 41.9 50.1% 148.8 163.0 -8.7%
Operation and Maintenance
118.2 121.6 -2.8% 406.4 440.9 -7.8% 125.4 121.8 3.0% 424.4 445.9 -4.8%
Financial 66.3 414.8 -84.0% 114.8 1,053.2 -89.1% 129.5 491.5 -73.7% 204.0 1,148.0 -82.2%
Others 5.8 5.8 - 16.3 15.7 3.8% 5.5 5.6 -1.8% 15.5 15.1 2.6%
Total 245.3 580.2 (57.7%) 647.5 1,627.4 (60.2%) 323.3 660.8 (51.1%) 792.6 1,772.0 (55.3%)
Gross Revenue (R$ million)
Company Consolidated
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Custos e Despesas Operacionais
(*) ex Depreciation
3Q13 3Q12 ∆% 9M13 9M12 ∆% 3Q13 3Q12 ∆% 9M13 9M12 ∆%
Personnel (62.9) (61.7) 1.9% (191.5) (178.4) 7.3% (64.6) (63.7) 1.4% (196.9) (183.7) 7.2%
Material (28.7) (33.1) -13.3% (70.1) (79.7) -12.1% (39.0) (35.4) 10.2% (113.0) (117.3) -3.7%
Services (58.0) (57.5) 0.9% (149.6) (160.4) -6.7% (59.8) (59.8) 0.0% (155.3) (164.7) -5.7%
Others (9.0) (13.4) 48.4% (39.5) (44.2) -10.6% (9.4) (13.5) -30.8% (40.6) (44.9) -9.8%
Contingencies (10.5) (3.0) -71.5% (42.5) (13.0) 226.5% (10.5) (3.0) 251.0% (42.5) (13.0) 226.5%
Total (169.0) (168.7) 0.2% (493.1) (475.7) 3.7% (183.3) (175.5) 4.5% (548.2) (523.6) 4.7%
Cost and Expenses* (R$ million)
Company Consolidated
10
Resultado Financeiro
(*) Includes charges, income and foreign exchange hedges on CCB International and Commercial Paper.
3Q13 3Q12 ∆% 9M13 9M12 ∆% 3Q13 3Q12 ∆% 9M13 9M12 ∆%
Interest Receivable 46.7 8.6 445.2% 130.5 16.8 678.9% 47.3 9.0 427.1% 131.7 17.8 638.4%
Monetary (net) 5.6 (0.9) 759.1% 52.9 (3.9) 1,451.4% 5.6 (0.9) 759.1% 52.9 (3.9) 1,451.4%
Financial Expenses* (30.8) (33.5) (145.8%) (39.1) (43.9) (39.0%) (31.0) (33.8) (133.1%) (39.3) (44.6) (40.9%)
Total 18.0 (41.3) 143.6% 78.0 (139.1) 156.1% 13.3 (46.2) 128.9% 64.3 (154.3) 141.6%
Financial Result (R$ million)
Company Consolidated
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241.3
95.4
-245.3
647.6
213.9
3Q12 3Q13ex SEFAZ-SP
Provision
9M12 9M13ex SEFAZ-SP
Provision
3Q13 9M13
Net Income
(R$ millions)
12
EBITDA
3Q13 3Q12 9M13 9M12 3Q13 3Q12 9M13 9M12
Net Income (245.3) 241.3 (126.9) 647.6 (245.3) 241.3 (126.9) 647.6
Income tax and social contribuition (161.8) 114.9 (147.2) 230.5 (152.5) 136.6 (136.0) 255.5
Financial Results (18.0) 41.3 (78.0) 139.1 (13.3) 46.2 (64.3) 154.3
Leases and rentals/Amortization 9.3 8.4 27.9 25.1 9.3 8.4 27.9 25.1
EBITDA ICVM 527/12 (415.8) 406.0 (324.2) 1,042.3 (401.9) 432.6 (299.2) 1,082.5
SEFAZ-SP Provision 516.3 - 516.3 - 516.3 - 516.3 -
EBITDA ex- SEFAZ Provision 100.5 406.0 192.1 1,042.3 114 .4 432.6 217.1 1,082.5
EBITDA (R$ million)
Company Consolidated
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Perfil da Dívida - Consolidado
FUNDING CHARGES MATURITY 3Q13 2012
BNDES
TJLP + 2,3% year 15/06/15 164,574 234,681
TJLP + 1,8% year 15/06/15 98,574 140,798
Comercial Papers
6th Series - CTEEP 104,9% CDI yera 05/01/13 0 433,873
Debêntures
1st Issuance - CTEEP CDI + 1,3% year 15/12/14 334,233 325,959
2nd Issuance - CTEEP IPCA + 8,1% year 15/12/17 72,834 70,915
Single Series - CTEEP 105,5% do CDI year 02/07/14 769,705 726,476
Banks
USD + 4% year 26/04/13 0 132,309
USD + 2,1% year 21/10/13 195,368 177,318
Eletrobras 8% year 15/11/21 302 340
Leasing - - 3,784 5,048
TOTAL CTEEP: 1,639,374 2,247,717
BNDES
IEMG TJLP + 2,4% year 15/04/23 48,692 52,513
5,5% year 15/05/26 45,381 47,758
TJLP + 2,6% year 15/04/21 73,720 80,152
3,5 year 15/04/23 14,413
TJLP + 2,06% year 15/02/28 7,166
TJLP + 1,9% year 15/05/26 47,003 49,801
TJLP + 1,5% year 15/05/26 40,624 43,038
TOTAL SUBSIDIARIES 276,999 273,262
Total Consolidated (R$ mil) 1,916,373 2,520,979
SERRA DO JAPI
CTEEP
CTEEP
PINHEIROS
29.4%
60.2%
10.1%
0.2%
Distribuition ofdebt contracting
BNDES Debentures Banks Others
29.4%
56.5%
3.7% 10.3%
Interest Rate
TJLP CDI IPCA Others
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Perfil da Dívida - Consolidado
(*) As from January 2013, the Company’s financial investments have been concentrated in exclusiveinvestment funds. These are made up of highly liquid investment fund units, readily convertible intocash, irrespective of the maturity of the assets.
Debt 1,916.4 % 2,521.0 %
Short-term Debt 1349.4 70.4% 1103.2 43.8%
Long-term Debt 567.0 29.6% 1,417.8 56.2%
Cash* 1244.2 309.6
Net Debt 672.2 2,211.4
Debt(BRLm)
3Q13 2012
15
Debt Repayment - Consolidated
(R$ millions)
418.2
1,137.6
120.144.1 44.1
152.3
2013 2014 2015 2016 2017 After 2017
CTEEP Subsidiaries
Future Cash (NI) 2013 2014 2015 Total
Accounts Receivable (NI) - (projection) 143.0 572.1 333.7 1,048.8
Interest Income on the Accounts Receivable (projection)
27.0 69.3 12.0 108.2
Total 170.0 641.4 345.7 1,157.1
Position of the Fund on 09/30/13: R$ 1.239,4 millions
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Dívida Controladas em conjunto
IE MADEIRA ITAÚ BBA IPCA + 5,5% a.a. 3/18/2025 186.0
IE MADEIRA BNDES TJLP + 2,42% a.a. 2/15/2030 776.9
IE MADEIRA BNDES 2,5% a.a 10/15/2022 120.1
IE MADEIRA BASA 8,50% a.a.* 10/10/2032 142.1
Total IE Madeira (51% CTEEP) 1,225.0
IENNE BB CDI + 1,35% a.a 11/5/2013 4.1
IENNE BNB 8,50% a.a.* 5/19/2030 53.9
Total IENNE (25% CTEEP) 58.00.0
IEGARANHUNS HSBC 106,50% CDI 4/30/2014 98.8
Total IE GARANHUNS (51% CTEEP) 98.8
IE SUL BNDES 5,50% a.a. 1/15/2021 4.0
IE SUL BNDES 3,00% a.a 4/15/2023 4.4
IE SUL BNDES TJLP + 2,58% a.a. 5/15/2025 10.8
19.3
1,401.1
Value (R$ MM)
Total IE SUL (50% CTEEP)
TOTAL (R$ million)
Debt CTEEP (Equity Income) - 09/30/2013
Company Bank CostFinal
Maturity
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Agenda
3Q13 and 9M13 Results
Capital Market Performance
CTEEP
IFRS X Regulatory
Other Highlights
18
Capital Market Performance
� Total trade:190.9 mil
until 09/30/2013
� Daily Average/Day
1,021
� Market Value R$6,2
09/30/2013 billion
Performance das ações até 30/09/2013
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep -13
Trade Financial - 09/30/2013(R$ million )
Total R$ 1,406 Million Daily Average / Day R$ 7.5 million
70.00
100.00
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13
TRPL3 TRPL4 IBOVESPA IEE
-6.10%
-14.13%
5.03%
10.79%
(base 12/31/2012 = 100)
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Agenda
3Q13 and 9M13 Results
Capital Market Performance
CTEEP
IFRS X Regulatory
Other Highlights
20
IFRS X Regulatório - Consolidated
(R$ millions) IFRSRegulatory
(not audited)9M13 9M13
Net operating revenue 792.6 540.3 252.3
Receita de uso da rede elétrica 0.0 524.8 (524.8)
Revenue from Construction Services 148.8 0 148.8Revenue from Operational and Maintenance Services
424.4 0 424.4
Financial Revenue 204.0 0 204.0
Other Revenue 15.5 15.5 (0.0)
Deductions from Operating Revenue (98.4) (76.8) (21.6)
Net Operating Revenue 694.2 463.5 230.7Costs and Operating Expenses (548.2) (364.5) (183.7)
Personnel (188.0) (188.0) (0.0)
MSO (133.9) (134.0) 0.0
Contingencies (42.5) (42.5) 0.0
Construction costs (135.4) 0 (135.4)
Improvements (48.3) 0 (48.3)
Depreciation/Amortization (5.5) (26.2) 20.7
Financial Result 64.3 64.3 (0.0)
Equity 53.8 (1.0) 54.8
Amortization of goodwill (22.4) (22.4) (0.0)
Other Operating (expenses/income) 17.3 15.7 1.6
Operating Income 253.4 129.4 124.0
IR & CSLL (39.6) (23.9) (15.6)
Net Income (ex SEFAZ-SP provision) 213.9 105.5 108.4
Net effect SEFAZ-SP Provision (340.7) (340.7) -
Net Income (126.9) (235.3) 108.4
EBITDA (ex SEFAZ-SP provision) 217.1 113.7 103.5
EBITDA Margin 31.3% 24.5%
ResultsAdjustments/
Reclassification
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Agenda
3Q13 and 9M13 Results
Capital Market Performance
CTEEP
IFRS X Regulatory
Other Highlights
22
Other Outstandings
� REH 1.595 established the new RAP for the 2013/2014 cycle at R$ 630.2million
� The IEMadeira Transmissin Line (Lot D) went into operation on August 1,2013 – Total RAP: R$ 233.2 million.
� The IEPinheiros Itapeti (Lot K) Substation went into operation on August 9,2013 – RAP: R$ 4.9 million
� Public Hearing 101/2013 held on October 10, 2013 to establish criteria andprocedures for assessing the value of electricity energy transmissioncompany assets not fully depreciated
� Authorizing resolutions with new Upgrades and New Connections (RBNI)and discussion as to the methodology for remunerating Improvements
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Disclaimer
All statements contained herein with regard to the Company’s
business prospects, projected results and the potential growth
of its business aremere forecasts, based on local management
expectationsin relation to the Company’s future performance.
Dependent as they are on market shifts and on the overall
performance of the Brazilian economy and the sector
and international markets, such estimates
are subject to changes.