Disclaimer. All figures are in BR GAAP. 2/12.

Transcription

1 Cemig Distribuição 2nd Tariff Review Technical Note n.º 33/2008-SRE/ANEEL

2 Disclaimer Some statements contained in this presentation are forward-looking statements within the meaning of the US Securities Law and are subject to risks and uncertainties. Such statements are forecasts which may different from final numbers, which are not under our control. For a discussion of the risks and uncertainties as they relate to us, please refer to our 20F form for 2006, and in particular item 3 which contains Basic Information Risk Factors. All figures are in BR GAAP. 2/12

3 Tariff Review Process Total Assets Base Reference Company RC Gross RAB PARAMETERS Special Obligations + Depreciated Assets Accumulated Depreciation Others Net Regulatory Asset Base Central and Regional Structures O&M processes Commercial processes Additional Costs Depreciation Rate 4.65% GROSS WACC 15.08% REQUIRED REVENUE Reinstatement Installment Remuneration of Capital Income Taxes OPEX Default Sector Charges Transport of electricity Purchased Energy Parcel B Parcel A REVENUE FROM BILLING TO CONSUMERS Residential Commercial Industrial Rural Public Authorities Public Service Public Illumnination Own Consumption + TUSD Revenue + Revenue Captive Consumers Verified Revenue Other revenues 3/12

4 PARCEL B: Regulatory Asset Base Special Obligations (R$ 3,773,836,285) + Depreciated Assets (R$ 820,411,006) R$ 4,594,247,292 Net Regulatory Asset Base Total Assets Base R$ 16,621,291,500 R$ 4,975,144,969 Accumulated Depreciation - Depreciated Assets - warehouse - terrain R$ 7,051,899,238 Gross Asset Base R$ 12,027,044,208 4/12

5 PARCEL B: Reference Company and Default Reference Company Central and Regional Structures R$ 493,522,391 O&M Process R$ 488,185,169 R$ 1,349,406,887 Commercial Process R$ 184,673,972 Additional Costs R$ 183,025,355 Regulatory Default Regulatory Default R$ 54,023,603 (0.6% of Gross Revenue) 5/12

6 Total Parcel B Reinstatement Installment R$ 559,257,556 Remuneration of Capital R$ 495,026,924 Income Taxes R$ 255,013,870 R$ Default R$ 54,023,603 OPEX R$ 1,349,406,887 6/12

7 Parcel A and X Factor Parcel A Regulatory Charges R$ 886,770,037 Purchased Energy R$ 2,441,995,673 R$ 3,839,579,089 Transport of Electricity R$ 510,813,379 X Factor Xe 1.24% 7/12

8 Readjustment and Impact on Tariff Financial Components + CVA R$ 411,086,246 IMPACT TO CONSUMERS -9.72% Appendix I VERIFIED REVENUE R$ 7,605,663,566 Appendix II ANEXO II (Readjustment) -4.48% % Appendix II Financial Components + CVA R$ 635,911,848 REQUIRED REVENUE Appendix I R$ 6,552,309,850 Anex I: Tariffs billed to consumers, including RTE, CVA and financial components, without taxes. Anex II: Tariffs considered clean, base for posterior readjustments posteriores, without taxes (ICMS, Pasep/Cofins) 8/12

9 Regulatory EBITDA Parcel B Reinstatement Instalment R$ 559,257,556 Remuneration of Capital R$ 495,026,924 Income taxes R$ 255,013,870 Regulatory Ebitda (April/2008 to March/2009) Reinstatment Instalment R$ 559,257,556 Remuneration of Capital R$ 495,026,924 Income taxes R$ 255,013,870 R$1,362,005,162 R$2,711,412,049 Default R$ 54,023,603 Default R$ 54,023,603 OPEX R$ 1,349,406,887 9/12

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11 Glossary Aneel: The Brazilian electricity regulator; an independent federal regulatory agency. BR GAAP Accounting Principles Generally Accepted in Brazil. CRC The Results Compensation Account: Prior to 1993 Brazilian electricity concession holders were guaranteed by law a rate of return on investment in assets used in the provision of electricity services to clients; rates charged to users were uniform all over the country; and the profits generated by the more profitable concession holders were reallocated to less profitable concession holders, in such a way that the rate of return of all the companies was equal to the national average. The deficits which the majority of the Brazilian electricity concession holders suffered were accounted in the CRC Account of each company. When the CRC Account itself, and the concept of guaranteed return, were abolished, the concession holders with positive balances were allowed to set these balances off against amounts owed by them to the federal government. CCC The Fossil Fuel Consumption Account: The CCC was created to generate financial reserves to cover the increase in costs associated with greater use of thermal generating plants, in the event of drought: the marginal operational costs of the thermal plants are higher than those of hydroelectric plants. Each energy company is obliged to make an annual contribution to the CCC. The annual contributions are calculated based on the estimates of the cost of fuel consumption by the thermal plants necessary in the subsequent year. CCEE the Trading Chamber: Provides the mechanism for transactions in electricity within the Brazilian National Grid system. CDE Energy Development Account: This is a source of subsidy created to make alternative sources of energy competitive (e.g. wind energy, or biomass), and to promote the universalization of electricity services their extension to every citizen and location. It is funded from annual payments made by the concession holders for the use of public assets, and penalty payments imposed by Aneel. The CDE will remain in effect for a period of 25 years and will be administered by Eletrobrás. DEC Average Customer Outage Duration: In electricity distribution, the average time of outage suffered by consumption units in a given group in the period referred to. The Deferred Tariff Adjustment (or RTD): Aneel decides the results of the periodic tariff revision of Cemig Distribuição, designed to reposition electricity retail supply tariffs at a level compatible with the preservation of the economic-financial equilibrium of the concession contract, providing sufficient revenue to cover efficient operational costs and adequately remunerate investments. The average adjustment applied to Cemig s tariffs on April 8, 2003, provisionally, was 31.53%, while the final tariff repositioning decided for Cemig was 44.41%. The percentage difference of 12.88% is being compensated through an increase in each of the tariff adjustments planned to occur in 2004 and 2007, cumulatively. The difference between the tariff repositioning to which Cemig Distribuição has the right and the tariff actually charged to consumers is recognized as a Regulatory Asset. Dividend Yield (dividend per share/share price): The annual return the stockholder receives in the form of dividends and Interest on Equity (per share) calculated as a percentage of the stock price. FEC Average Customer Outage Frequency: In electricity distribution, the average number of outages per consumption unit in a given group in the period referred to.

12 Ebitda (Earnings Before Interest, Tax, Depreciation and Amortization): Net profit before interest (including all items included as financial revenue/expenses), taxes, depreciation and amortization. This is an expression of operational cash flow, and provides a view of how much a company is generating in cash from its principal business. Ebitda Margin Ebitda / Net operational revenue: Measure of operational cash flow as a percentage of operational revenue; shows the percentage of revenue that is transformed into cash after the operation, giving an idea of the basic profitability of the business. Luz no Campo ( Light in the Countryside ): The national rural electrification program, created by the federal government aiming to take electricity to one million rural properties and domiciles all over Brazil. It is coordinated by the Mining and Energy Ministry, and developed by Eletrobrás with funds obtained from the Global Reversion Reserve (RGR). Payout Percentage of net profit distributed as dividends. P/E (Price/Earnings): Ratio between the price of a share and its profit per share. EV Enterprise Value: Market value plus net debt. FIDC: A receivables Fund, made up of assets receivable. Hedge: A mechanism by which holders of asset or liability positions protect themselves from price fluctuations in, e.g., the commodities or FX markets. Market capitalization: Value of the company, resulting from multiplying the share price by the number of the company s shares. RTE The Extraordinary Tariff Recomposition : This is a tariff adjustment granted in December 2001 to the distributors and generators of the regions that were under rationing at that time. It is settled in the General Agreement for the Electricity Sector, and resulted in an increase of 2.9% in the tariffs of residential consumers (with the exception of low-income consumers) and rural consumers, and 7.9% for the other consumers. The objective of the adjustment was to restore the losses that distributors and generators of electricity had suffered from the reduction of consumption imposed by the government. The duration of the adjustment varies in accordance with the time necessary for the recovery of the losses of each concession holder. RGR Global Reversion Reserve: This is an annual amount included in the costs of concession holders, for generation of funds for expansion and improvement of public electricity services. The amounts are paid monthly to Eletrobrás, which is responsible for administration of the funds, and will also be employed in the Procel program. TUSD Tariff for Use of the Distribution System: This is paid by generation companies and by Free Consumers for the use of the distribution system of the distribution concession holder to which the respective generator or consumer is linked, and is revised annually in accordance with the inflation index and the investments made by the distributors in the previous year to maintain and expand the network. The amount to be paid by the user who is linked to the distribution system is calculated by multiplication of the amount of energy contracted with the distribution concession holder for each link point, in kw, on the basis of the tariff in R$/kW which is set by Aneel. UHE ( Usina Hidrelétrica ) Hydroelectric power plant: Electricity generation plant which uses the mechanical energy of water to turn rotors and generate electricity. UTE ( Usina Térm(o)Elétrica ) Thermal generation plant: One in which chemical energy contained in fossil fuels is converted into electricity. WACC Weighted Average Cost of Capital.