1INSTITUTIONAL PRESENTATIONFinancial and Operational ResultsJune 30, 2012
2DisclaimerStatement on Future Declarations:The forward-looking statements in this report related to the outlook for the business,estimated financial and operating results and growth prospects of COMGAS are merelyprojections and, as such, are based exclusively on management expectations regardingfuture performance. These expectations depend substantially on market conditions and theperformance of the Brazilian economy, the business sector and the international markets,and are therefore subject to change without prior notice.
History41872: The British company San Paulo Gas receivesauthorization to explore the concession of public services ofilumination in São Paulo;1912: The Canadian company Light assumes ownership;1959: The company is nationalized and renamed CompanhiaPaulista de Serviços de Gás (Comgás);1968: The joint-stock company is incorporated under the control of the city governmentand is named Comgás;1984: Comgás is taken over by Companhia Energética de São Paulo (CESP), the state-owned power utility;1996: The company goes public and is traded on the São Paulo Stock Exchange (Bovespa)beginning in 1997;1999: PRIVATIZATION: The consortium formed by British Gas and Shell obtain a controlling stake in Comgás;2010: Comgás is consolidated as Brazil’s largest natural gas distributor responsible for more than 30% of the sales ofnatural gas in the country;2011: Comgás reached customer 1,000,000.
A Comgás é uma Companhia Regulada ...Comgás Highlights5Premium asset locatedin a strategic concessionareaSubstantial growth in theresidential segmentDiversified client baseImpressive track record:Significant growth withprofibility and soundcapital structureSolid regulatory frameworkand transparent concessionschemeFavorable prospectsfor natural gas inBrazil
Comgás’ main shareholder is Integral Investments, in which BG Group and Shell Group hold 83.5% and16.5% of shares respectively:Comgás: uma combinação de competências e princípiosComgás: Combination of Strength and PrinciplesSHELL BRAZILHOLDING BV6.34%INTEGRALINVESTMENTS BV71.91%SHELL GAS BV16.49%BG SÃO PAULOINVESTMENTS BV83.51%OTHERS(free float)21.75%7Operating in Brazil since 1994:Operations in more than 20countries. Experience in Exploration& Production, Liquefied Natural Gas,Transmission & Distribution andPower Generation.Operating in Brazil since 1913:Experiencie in Distribution ofPetroleum Components, Operationsin the Gas Sector, Power &Exploration and Offshore Production.
Regulated framework8Note: With the opening trading, in 2011, the users with consumption over 300,000 m3/month are considered potentially free.Market CustomersResidential and Commercial(small volumes)Trading and distribution during the concession periodOther Markets Customers(large volumes)Trading up to 12 years (starting on contract subscriptiondate) and distribution for the entire concession periodProduction and Transportation:ANP (Federal Parts)..................Distribution:ARSESP (Government Parts)www.arsesp.sp.gov.brAs a public service provider, Comgás’ activitiesare regulated by ARSESP, a governmentinstitution of São Paulo State, which delegatedto Comgás a 30-year term, starting in May 1999for public service exploration with a one-timerenewal possibility for 20 more years.REGULATED PRICES AND TARIFFS RULES
Tariff Settlement Process9Maximum Margin Review•Considering the WACC overthe Regulatory Asset Base +Investments•Operational Costs•Depreciation•Sales VolumeMaximum Pre-definedTariffs(discounts may be applied)• Initial Tariff Structureincludes:Tariffs Readjustments•Annual Margin adjustmentby inflation index (IGPM)excluding the X Factor andthe K Factor:•Gas Costs pass through(comoddity & transport)every May 31st (oreventually before, asdefined by the regulator).In Tariff Reviews, The XFactor and The K Factorare also Defined• X Factor: Fixed efficiency factorto be considered in the PO annualupdate. In this 3rd tariff cycle, theX Factor was set at 0.82 per year.•K Factor: Adjustment factor thatcompensates deviations from themaximum margin earnedregarding the maximum marginpermitted. The K Factor was setat 0.009991 R$/m3 in the 4th yearof the 3rd cycle.The Concession Agreement foresees tariff reviews every 5 yearsP gas + P transport +Maximum Margin Average (P0)= TariffP0 * (IGPM – X Factor) + K FactorTariff review for the 3rd Cycle (2009-2014):P0 established in 0.3052 R$/m3Commercialization Margin set at 1.9%
Fornecimento de Gás Natural: CONTRATOSNatural Gas Supply: Contracts10Daily quantity contracted:approximately 14.3 million m³/day,besides auction contracts.Daily quantity demanded:approximately 13.0 milllion m³/dayduring the 1st semester in 2012.
1999 2011 CAGR(1999 - 2011)R$ 341mm Net Revenue R$ 4,102mm 23%1.3 bi m3 Volume 4.8 bi m3 11%R$ 50mm CAPEX R$ 510mm 21%2,500 km Network 8,000 km 10%17 # Municipalities 70 12%314,034 # Meters 836,222 8%11Growth since Privatization
Santos BasinPre-SaltCurrentExpansionComgás’ Concession AreaGeographic Expansion Indicated in Business PlanExpansion activities simultaneously progressing inthe cities inside the concession areaTargets for 2009-2014 period:5.000km of network to beestablished282km of network renewal500k+ clients to be connected15 working fronts simultaneously1.000 direct employees and more than4.000 indirect working on the expansionAims for excellence in operational safetyand integrity of the distribution networkExtensive field analysis and selection ofthe best opportunities considering:Distance from existing networkDemographic densityEconomic profile and propensityfor consumptionPerspective of future developmentPotential for integration of variousmarket segments13Volume (MM/m3)Comgás’ Concession Area
Residential SegmentKey growth strategy for Comgás:Geographic expansion, capturing theexisting potential and connecting around100.000 clients per yearIncrease average unit consumption byoptimizing and expanding customer baseHigh potential market, with growth driven by:New real estate developmentsGas conversions in built residencesLarge customer base with more than 1 millionresidential clientsAlternative for LPG and electricityDescription Concession Area Potential(1,2)(1) Potential to be updated by IBGE Census 2010(2) Concession area potential doesn’t consider organic growth(3) Considered in the plan to capture 100,000 clients per yearApartmentsHousesalready connected to NGcustomers to be capturedcostumers not connectedmarket to be studied(MM of households)6.21.514Over 45,000 new buildings (launch) to be captured(3)59%13%8%20%2%13%7%78%
Industrial SegmentComgás is present in all of the relevant industries in the concession area;A diversified customer base with more than 1,000 corporate clients;A multi-use product: from the production of heat and low-pressure steam to more complexprocesses;Many advantages compared to other fuels:No storage requirementsEnvironmental issuesGuarantee of supplyLow operational costsGrowth Strategy:Maintain a strong consumer base with future growth in line with growth in GDP / industrialproductionApproach small and medium enterprises (SMEs) to anchor expansion projectsBring new industrial corporate clients into the concession areaDescription15
Natural gas vehicle (NGV) may be used as fuel for both individual and mass transportation;Stands out for savings and environmental benefits:Currently, it is more cost competitive than gasoline and ethanolStrong economic benefit for heavy usersComgás is currently working with the government to implement public policies that shouldbenefit the sector:Fiscal incentives (IPVA reduction)Public transportation policyGrowth Strategy:Project in development: use of NGV in public transportation and other heavy usersDescriptionNatural Gas Vehicle (NGV) Segment16
Other MarketsMore than 10.3 thousand clients;Focus on medium and large establishments;Growth platform integrated with the expansion ofthe residential segment;New applications have a high developmentpotential:Emerging market with high consumptionpotentialStructure dedicated in developing nonconventional application development:acclimatization, commercial cogenerationand generation during peak hoursCommercial Thermal Generation and CogenerationThermal Generation:Demand depends on the level of thermaldispatch (determined by the government)Back to back gas contractsCogeneration:Industrial strategic decision aimingefficiency and energy security in themedium and long termSustainable growth depends on firm gassupply and price visibility vis-a-viselectricityMarket with a high potential development17
107177347 3305496688609251,0358389281,1074133871,3631,1827165255882000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S11 1S12EBITDA19Financial Graphics (in million of R$)CAGR (00-11)23.7%NOTE: The calculation of the CAGR is based on the use of previous accountability.IFRSPrevious Accountability2,375 2,3411,6762,2432,9523,4183,8124,3424,7615,0695,2534,2614,9104,7792000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S12VolumeIFRS-6%PreviousAccountability+12%(In thousands of m3)
20Financial Graphics (in million of R$)CAGR (00-11)24.2%NOTE: The calculation of the CAGR is based on the use of previous accountability.IFRSPrevious Accountability2,375 2,3411,6762,2432,9523,4183,8124,3424,7615,0695,2534,2614,9104,7792000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S12Volume107177347 3305496688609251,0358389281,1074133871,3631,1827165255882000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1S11 1S12EBITDAIFRS-32%PreviousAccountability+9%(In thousands of m3)
21Highlights: 1ST Half of 2012Continuous focus in the residential segment, 60 thousand new households connected since thebeginning of the year;Investment of R$ 268 million in the first semester, 20% above 1Q11;New record in network extensions, 555 km built since the beginning of the year;Tariff readjustments made in December 2011 and May 2012 contributed to recuperate the currentaccount balance compensating the increase in the cost of gas;In February 2012, ARSESP established a mechanism to recuperate the graphic account balancebecause of the variation of the price of gas and transportation (ARSESP DELIBERATION Nr. 308);On May 28, 2012, a Relevant Fact was presented informing that a Sale Contract was signed betweenProvence Participações S.A. (controlled by Cosan S.A. Indústria e Comércio) and BG Gas SPInvestments BV, for the sale of 60.1% of indirect participation in Comgás, currently held by BG, forthe total cost of R$3.4 billion. The conclusion of the operation is awaiting ARSESP’s approval andCADE’s analasis.
25Financial Indicators11,32 11,02 10,04 11,32 10,041,23 2,46 3,08 1,84 2,681,53 1,55 1,28 1,53 1,283,01 2,73 1,49 3,01 1,490,37 0,33 0,24 0,37 0,240,56 0,62 0,57 0,56 0,5721,2% 28,5% 30,3% 24,6% 30,3%2,9% 6,6% 9,1% 4,6% 8,3%13,2% 19,5% 21,9% 16,2% 21,3%3,1% 6,5% 9,4% 4,6% 8,1%10,8% 22,3% 30,7% 16,3% 26,7%Normalized by Current Account (unaudited figures)35,9% 35,4% 40,7% 35,6% 39,1%11,9% 10,5% 13,8% 11,3% 10,8%27,1% 25,8% 29,2% 26,5% 24,4%2Q12 1Q12 2Q11 1H12 1H11Equity Per Share($)Earnings Per Share ($)Net Debt over Equity (x)Net Debt over EBITDA (x)Short Term Debt over Total Debt (x)Current Ratio (x)Gross Margin (%)Net Margin (%)EBITDA Margin (%)Return on Assets (%)Return on Equity (%)Gross Margin (%)Net Margin (%)EBITDA Margin (%)NOTE:Annualized Indicators (LAJIDA from the last 12 months).
5284692641532912-55-157-230 -198-128-5150204360dec-08 mar-09 jun-09 sep-09 dec-09 mar-10 jun-10 sep-10 dec-10 mar-11 jun-11 sep-11 dec-11 mar-12 jun-1226Regulatory Current Account Balance EvolutionBalance of Gas Recoverable/ To be Passed On: Cash-EffectR$million R$ 156 millionsmade R$ 54 millionsmade R$ 70 millionsmade
725277212113 113782243864 75 2352012 2013 2014 2015 2016 2017forwardLocal Currency Foreign CurrencyEstrutura de EndividamentoDebt Structure27Debt (1)(R$ thousand) Jun 2012 Dec 11 Debt Amortization Schedule(1)(R$ million)Debt Composition: Short Term/ Long Term Debt Composition(1) Includes Debendetures and Derivatives(2) EBITDA from the last 12 monthsDebt in foreigncurrency 100% andfully hedged.501250177 188235803Short Term Debt 803,540 421,104Long Term Debt 1,350,925 1,452,957Total Debt 2,154,465 1,874,061(-) Cash 79,544 41,110(=) Net Debt 2,074,921 1,832,951EBITDA (2)690,311 716,284Net Debt/EBITDA 3.0 2.6Short Term Debt/Total Debt 0.4 0.2Jun 12 Dec 11ShortTerm37%LongTerm63%ShortTerm22%LongTerm78%EIB25%BNDES44%Others31%
2.5 2.6 2.93.3 3.6 3.94.5 4.9 126.96.36.199.98.0 7.4 8,61999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jun11 Jun12100229200230276474426397 403 406 4055092682000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 jun/12InvestimentosMain Projects:NETWORK EXTENSIONS (In thousands of Km):TaubatéSão José dos Campos IIGuarulhosMogi das CruzesOsasco IIItaqueraNew projects:Diadema ITucuruviInvestments28+ 1,200 KMbuilt in the last 12monthsOver R$ 4.2 billion invested during the periodR$ million223+20%2Q11 x 2Q121S11
29Shareholder Remuneration (in millions of R$)PAY OUTPreviousAccountingPAY OUT IFRSNOTE: Payout calculated based on remuneration declared by the Company during the period.11 1627 25303 330 334275 268427 4502001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201117% 15%26%10%95%77% 75%53%73%104%92%74%190%