Y2010 Results, Y2011 Forecast

1. 2010 Results & 2011 Forecast
VTB Capital RUSSIA CALLING: London Session
May 31 – June 01, 2011

2. Disclaimer
The information in this presentation was received from the sources which, in opinion of IDGC of Centre (“the Company”),
are reliable. Nevertheless, we do not guarantee accuracy of the given information which may be short or incomplete. All
opinions and estimations containing in the present material reflect our opinion at the date of publication and are subject
to change without notice.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer
to purchase or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part
of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or
investment decision.
The information in this presentation includes forward-looking statements. These forward-looking statements include all
matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations
concerning, among other things, the Company’s results of operations, financial
condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their
nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and
uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or
may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future
performance and that its actual results of operations, financial condition and liquidity and the development of the industry
in which the Company operates may differ materially from those made in or suggested by the forward-looking statements
contained in this presentation. In addition, even if the Company’s results of operations, financial condition and liquidity
and the development of the industry in which the Company operates are consistent with the forward-looking statements
contained in this presentation, those results or developments may not be indicative of results or developments in future
periods
The Company does not bear the responsibility for consequences of use of opinions containing in the present report or
applications, or for incompleteness of the information. No person is under any obligation to update or keep current the
information contained herein.
By attending the presentation you agree to be bound by the foregoing limitations.
2

3. Attractive target for investments
• Transition to RAB is a vigorous driver for increase in operational
efficiency and decrease in costs per unit
RAB regulation • The first IDGC among others which transferred all its branches to RAB:
2009: 3 branches, 2010: 4 branches, since 01.01.2011: 4 branches
• High level of iRAB - USD 3.9 billion
• Capital formation rate is lower than profitability rate of invested capital
• Developed and implemented KPI system
Strong team • Strong financial performance - positive dynamics on all key
of managers financial and operating indicators for 4 years
• Transparent system of corporate management (7+ corporate
governance rating on national scale)
• Approved dividend policy for 2010, total dividends that are proposed
to the General Meeting of Shareholders - USD 20 million
• Investment history of distribution grid complex attracts
high attention of analysts and investors:
Prospects
of growth - sector is significantly undervalued as compared to foreign
peers
• Decrease of fixed assets depreciation as a result of full –scale
renovation is the goal of highest priority
3

4. Key figures on growth track 2008-2011
FORECAST* CAGR**
2,42***
1,84
1,13
0,55 64,0%
Capitalization
USD billion
2008 2009 2010 2011
2,61
1,99
1,75 1,55
Revenue 19,3%
USD billion
0,36 0,49
EBITDA 0,27 0,24 27,0%
USD billion
0,155 0,185
Net profit 79,9%
USD billion 0,036 0,041
56,6 56,0 55,8
53,1 -0,5%
Productive supply kWh bn
2008 2009 2010 2011
* - due to board of directors approved Business Plan for 2011
** - compound annual growth rate
*** - consensus forecast by analysts for the end of 2011
4

5. IDGC of Center map. Common information.
10 11 2010*
8
IDGC of Center 2 12 Capitalization 1,57***
4
USD billion
1 Belgorodenergo
2 Bryanskenergo Revenue 1,99
USD billion
3 Voronezhenergo
Length of lines, km 374,3
4 Kostromaenergo Yaroslavl thousand**
Smolensk Tver
5 Kurskenergo Substation capacity,
6 Lipetskenergo Bryansk IDGC of Center
MWA
Kostroma
Kursk Orel 35-110 kV 31 404
7 Orelenergo Smolensk
Belgorod 6-10/0,4 kV 15 192
8 Smolenskenergo
Tambov
Voronezh Number of
9 Tambovenergo
personnel 30 906
10 Tverenergo
Number of
11 Yarenergo 5 7 shareholders 17 867
12 Yargorelectroset, JSC 9
6
The Company is the monopolist –
tariffs are regulated by State
1
3
* - on 31.12.2010
** - on track
*** - on 27.05.2011
5

6. Company structure and key shareholders
State
52.69%
IDGC Holding Minor shareholdres
50.23% 49.77%*
Group of companies
IDGC of Center, JSC
Branches
100% Subsidiaries 100%
Belgorodenergo Yarenergo Energetik, JSC Yargorelectroset, JSC
Energy service
company, JSC
Bryanskenergo Tverenergo Yargoreletroset, JSC is the largest The main activity is to
51% Territory Grid Organization in provide saving energy
Voronezhenergo Tambovenergo Central Federal Region. The result services
of acquisition of 100% stake is
YarESK, JSC that IDGC of Center now controls
Kostromaenergo Smolenskenergo more than 90% of power grid
assets in the Yaroslavl region.
-November
Kurskenergo Orelenergo 11, 2009
Energetik, JSC acquired
the controlling stake of
Lipetskenergo Operating YarESK, JSC, which is
Business units target company for
consolidation of power grid
11 branches assets in Yaroslavl region
* - including State share 0.46%
6

7. Share capital structure
• Diversified structure of share capital
• Free float is about 30%
IDGC Holding, JSC
15,90%
50,23% JAMICA LIMITED
THE BANK OF NEW YORK MELLON
8,40%
IMMENSO ENTERPRISES LIMITED
3,20%
2,73% ENERGOSOUZ HOLDINGS LIMITED
1,45%
18,09% RUSENERGO FUND LIMITED
Others
* - on 12.05.2011
7

8. Strategic vision of the Company’s
management – industry leadership…
Goals of the Company Target subsystems of the
management:
• Growth and changes
Industry • Finance
leadership • Consumers
• Main business processes
• Management system
• Personnel
Challenges of the top level
Growth Finance Consumers Processes Management Personnel
Ensure Realize efficient and Ensure development Enhance
Enhance the Ensure safe functioning and and efficient
long- term effective sales of efficiency of
efficiency of innovative functioning of
growth of services development of management system human
shareholder business resources
electricity network
capital value complex
EVA; ROE; CF ROIC Losses (%) SAIFI; SAIDI Impact of IP Staff number
TSR
(NPV; IRR)
... a tool to achieve - the project approach, KPI system

9. Key Company KPI on 2011
11,4%
ROE provided by cash Electricity
flow, % losses/supply, %
9,96%
Avoiding the excess of System Average
limit in accidents Interruption Frequency
number
0 Index (SAIFI) *
<1
Efficiency in realization System Average
of investment program Interruption Duration
in 2011 ≥ 95% Index (SAIDI) *
<1
* - for 6-11 kV feeders and higher
9

10. Credit and corporate rating
History of IDGC of Center credit rating History of IDGC of Center corporate
rating on the national scale
Standard&Poors’s
Confirmed February’11 NRCG**
Confirmed July ‟10 Upgraded (7+) January ’ 11
Assigned November„09 Confirmed July‟ 09
НRА* Confirmed February‟ 09
Upgraded to АА- December ‘10 Assigned September‟ 08
Confirmed October‟10
Confirmed September‟09
Upgraded (level A+) September‟08
Upgraded (level А) August„07
... developed corporate governance
practice, leading position
among IDGCs
* National Rating Agency
** National rating of corporate governance
10

11. Stock performance and liquidity increase
Liquidity increase measures
05.2008 04.2009 08.2010
09.2010 2Q2011 3Q2011 2Q2011
4Q2011
Company „s Company‟s Company‟s Inclusion of Dividends payment Launch of option
shares were shares were shares were Company‟s shares in USD 20, 05 million program
listed on included in the included in quotation list A2 DR program
MICEX index: RTS EU* (MICEX)
(quotation list MICEX PWR Stock performance
B), RTS
IDGC of Centre MICEX PWR MICEX EuroStoxx Electricity
100,0%
Tickers: Dividends for 2010: 80,0%
60,0%
MICEX MRKC Total (USD 20,05 40,0%
million)
20,0%
RTS MRKC Net profit 12.6%
classic share 0,0%
-20,0%
RTS MRKCG Dividend yield 1,37%
-40,0%
stock
- forecast * - RTS energy utilities

12. Key stock market figures :
2nd place on capitalization among the IDGCs
Capitalization of distribution grid companies as of Market multiples on IDGCs and foreign
31.12.10 and of 31.03.11, USD billion (MICEX) companies-analogues *
3,0
2,60 2,57
16,00
2,5
14,00 13,5
2,0 1,86 1,25
1,84
12,00
1,5 10,1
1
1,11 1,12 1,05 1,11 10,00
0,90 0,96 0,94
1,0 0,90
0,79 0,83 0,71
0,61 8,00
6,8
0,5 0,29 0,56
0,24 0,170,15 6,00 5,0 0,5
4,9
0,0
IDGC of North-West 4,00 3,4
MOESK
IDGC of Ural
IDGC of Siberia
IDGC of South
IDGC of Volga
IDGC of Center and Volga
IDGC of Center
Lenenergo
IDGC of North Caucasus
2,00 0,9 0,8 1,1
0,00
EV/S 2011 EV/EBITDA P/E 2011 EV/RAB
Region
2011
МРСК Центра
Cap. on 31.12.10
Капитализация на 31.12.10, млрд. руб. Cap. on 31.03.11
Капитализация на 31.03.11, млрд. руб. IDGC of Center
Медиана по российским аналогам
Average on Russian companies
**
Average on emerging countries
Медиана по развивающимся аналогам
* Calculations of the Company, data of investment banks covering the activities of IDGCs
** Foreign peers: Eletropaulo, Compania General de Electricidad,
Aksu Enerji ve Ticaret, etc.)
12

13. Management of loan portfolio –
absence of short-term credits and loans…
Structure of capital
USD million 31.12.2009 31.12.2010 Chng. Decrease of average
Equity 1 363,37 1 507,63 10,58% interest rate on credits in
Long-term liabilities 354,66 490,08 38,18%
2010 by 3,12%
Short-term liabilities 13,23 0,00 -100%
10,99%
Accounts payable 218,05 221,55 1,61%
Other 69,26 114,83 60,19% 8,63% 8,58%
7,88% 7,87%
7%
17% Sberbank
Rosbank
48%
Alfabank
Gazprombank
31.03.10 30.06.10 31.09.10 31.12.10 31.03.11
27%
13

14. Debt position –
low indicator of Net debt/EBITDA
EBITDA vs. Net Profit, USD million USD billion
Ratio Net Debt/EBITDA
600 1,80
1,60
Net debt/ 500
Year EBITDA Net Profit Net Debt
EBITDA 1,40
400 1,20
2007 267 77 240 0,90 1,00
300
2008 272 35 374 1,38 0,80
200 0,60
2009 231 42 339 1,41
0,40
2010 261 155 485 1,32 100
0,20
2011F* 490 185 828 1,83 0 0,00
2007 2008 2009 2010 2011П
Low ratio of NET DEBT/EBITDA allows to attract
additional funding (with the ratio limit approved
by the Board of Directors = 3) EBITDA Net Profit Net debt/EBITDA
* - due to approved Business Plan on 2011
14

15. Expected CAPEX for 2011-2016 will amount
to about USD 6,4 billion
Commissioning Uses of CAPEX in 2011
Development,
Year 9,2% 100%
USD million*
USD million MWA km 57
4,9 % 1,2%
2011 623 600 1 371 5 663
7,4% 30 8
2012 812 749 1 478 5 227
1104 1082 1 587 8 487 46
2013 7,8%
2014 1235 1250 2 632 8 299 48
31,3% 623
2015 1314 1387 2 149 9 346
2016 1318 1283 1 388 8 520
195
38,2%
Financing sources on 2011
238
2% 1%
Borrowed sources
USD million
- Replacement of the main power equipment
Tariff sources
- New construction(substations, overhead и cable lines)
50% - Developing/Modernization of accounting systems
47% Payments for connection - ASMD systems, connection, IT
services
- Modernization and reconstruction
Others - Acquisition of power grid systems
- Others
15

16. Consolidation of power grid assets
• Providing monopoly on power grid services market in the regions of
presence;
Target/ • Long-term target program for the consolidation of power grid assets have
Program
been developed and approved (power grid assets consolidation plan for
2011 - 2015)
• Company consolidates the assets primarily in 3 ways: acquisition of
power grid property rent, purchase of shares of power grid
Methods and companies;
advantages • The basic advantages of consolidation are: implementation of a
of consolidation unified technical policy, the development of a unified scheme of long-
term development of power grids, improving the reliability
of electricity supply to consumers of all categories, increasing of
power grid capacity
• It is planned in 2011 to consolidate municipal power grid assets of
Plans on Voronezh region, to acquire the property of LRUC, SRUE*, to consolidate
2011-2015 the assets in Orel and Tver regions;
• Program provides working with more than 5 thousand owners
* - Lipetsk Region Utilities Company, State Region Unitary Enterprise
16

17. Transition to RAB
Date of Branch Total value IRAB,
transition of invested USD million
capital
USD million
12,0
Belgorodenergo 1 723 678
from 01.01.2009 Lipetskenergo 876 341 10,0 3,8
Tverenergo 1 881 489 8,0
Kurskenergo 1 018 357
from 01.01.2010 6,0
Yarenergo 714 297
4,0 7,6
Bryanskenergo 651 195 1,4
from 01.11.2010
Orelenergo 701 208 2,0 2,6
Kostromaenergo 560 249
0,0
Tambovenergo 611 181 Full value of Residual value of
invested capital invested capital
from 01.01.2011 Voronezhenergo 1 250 415
RAB branches before 01.01.2011
Smolenskenergo 1 215 451
RAB branches after 01.01.2011
Yargorelectroset* 130 71
Approved iRAB on all branches –
All 11 329 3 932
USD 3,9 billion*
*Including Yargorelectroset 100% stake is owned by IDGC of Center

18. RAB figures for 2011
 In 2011 branches adopted the 5-years regulation period (also the
RAB on 01.01.11**, possibility of transiting some branches to 7-years regulation period is
Branch
USD million considered);
Belgorodenergo 746  Return on invested capital– 35 years (for the new IC), 10-12 years (for
the old IC);
Lipetskenergo 417
 OPEX optimization (x-factor 1% annually in accordance with the
Tverenergo 406 resolution of FTS, additional goal on 2011 for management is OPEX
Kurskenergo 355 reducing for at least 1%)
Yarenergo 300
RAB rate of return 2009 2010 2011 2012 2013 2014 2015
Bryanskenergo 186
Return on “old” IC
Orelenergo 199 before January 2010 6% 9% 12% 12% 11% - -
since January 2010 - 6% 9% 12% 11% 11% -
Kostromaenergo 249
since August 2010 - 6% 6% 9% 11% 11% -
Tambovenergo 181 since January 2011 - - 6% 9% 11% 11% 11%
Return on “new” IC
Voronezhenergo 415 before January 2010 12% 12% 12% 12% 11% - -
Smolenskenergo 451 since January 2010 - 12% 12% 12% 11% 11% -
since August 2010 to
Yargorelectroset* 71 January 2011 - 12% 12% 12% 11% 11% -
since January 2011 - - 12% 12% 11% 11% 11%
Total: 3 977
* - 100% subsidiary of IDGC of Center
**- including investments , return and retirement
18

19. Losses and SAIDI dynamics
Losses dynamics,
Chng, 2006-11F (%)
Year kW. (th) %
p.p. 10,35% 10,11% 10,01% 9,96%
9,52% 9,40%
2006 6,238 10,35
2007 5,932 9,52 (0,83)
2008 5,875 9,40 (0,12)
2009 5,977 10,11 0,71 2006 2007 2008 2009 2010 2011П
2010 6, 233 10,01 (0,10) % hour
Losses vs SAIDI*
10,20 14,00
2011П 6,178 9,96 (0,04)
12,00
9,70
12,31
11,27 10,00
9,20
9,95
8,00
 Losses reduction – priority target for 8,70
8,55
6,81 6,00
management 4,78
8,20 4,00
 Renovation program and modern account systems 2010 2011 2012 2013 2014 2015
implementation will allow to reduce losses by 1% and
Снижение сред. длительности отключений
SAIDI reduction, hours
SAIDI by 7,53 hours by 2015. (SAIDI), час.
Снижение потерь, %
Losses reduction, %
* System Average Interruption Duration Index
19

20. Required Gross Revenue structure*** and
structure of operating expenditures
USD billion
RGR structure***
Income
2 468 on cap.
Non-controllable costs– 4,5
Return 4,6 16,6
385 USD 1 407 billion 11
on cap. 5,2 10
1
9
Smoothing 503 7,3 8
352 1 918
-187
2 13,4
7,4 7
416
6
7,9 3
2011 год (Forecast)
FGC 12,0
Productive 5
services 4
supply, billion 9,4
304
kWh
53,7 11,8
TGO
services 184
Average tariff, 4,60 Losses
Belgorodenergo (1) Lipetskenergo (2)
511
cents/kWh purchase
Tverenergo (3) Voronezhenergo (4)
Others
Yarenergo (5) Kurskenergo (6)
Smolenskenergo (7) Bryanskenergo (8)
Tariff growth 17%
Kostromaenergo (9) Tambovenergo (10)
Revenue OPEX Controllable Orelenergo (11)
incl. TGCs* costs
* - RGR due to tariff campaign in 2010, exc. corrections on Kurskenergo 2011
** - Due to tariff campaign in 2010
*** - exc. YAGES
20

21. Costs structure in 2010-2011F
Costs structure of electricity Costs structure of electricity
transmission, 2010, (%) transmission, 2011F, (%)
UNEG
services Controllable costs, 31 684
Losses
USD million 65 Losses UNEG
purchase
purchase services
18 22 286 19 23
TGO 19
services TGO 21
302 services
41 37
Controllable costs
Company plans to optimize
Personnel Other Materials, Services Total controllable costs in costs
costs costs energy (operat.)
structure of operating activities
by 4% in 2011
21

22. Program of OPEX optimization on 2011
Costs reduction,
Activities on OPEX optimization %
USD million
Tax base optimization due to the law 9,3 33,5%
Involvement of debt at a minimum interest rate 7,7 27,8%
Personnel optimization and reducing payroll fund 7,3 26,3%
Optimization of reserves for doubtful receivables within tax accounts 2,5 8,8%
Realization of non-core assets 0,6 2,3%
Transport services optimization 0,4 1,4%
Total: 27,9 100,0%
Costs reduction as a result of activities* on
2011-2015, USD million
160  Company also develop the activities for reaching the
140 operating efficiency within optimizing the technical
120 policy and reducing risks;
100
Cumulative costs  As a result of all these activities the Company plans to
80 reduction reduce specific costs by USD 0,06 thousand/1 cu** by
60 44 Costs reduction per 2015, to reduce losses by 1% by 2015 and reduce SAIDI
40 28 28 30 30 year by 7,53 h.;
20  Realization of these activities will allow to increase
0 energy efficiency, reliability of energy supply, to
2011 2012 2013 2014 2015 optimize operating costs within RAB transition/
* - inc. activities on OPEX optimization due to inner sources only
* * - reduction in specific costs (OPEX) снижение удельных затрат (OPEX) per 1 cu volume
of repair and maintenance
22

23. THANK YOU FOR YOUR
ATTENTION
IR specialists will give you
any additional information:
ir@mrsk-1.ru
IDGC of Center
4/2, Glukharev per., Moscow, Russia, 129090
T: +7 495 747 9292 F: +7 495 747 9292
www.mrsk-1.ru
Tickers:
MICEX: MRKC
RTS: MRKC, MRKCG
23

24. Tariffs on electricity transmission 2010-2011
Average tariffs on electricity transmission Average tariffs on electricity transmission services exc.
services, cents/kWh costs of neighbor TGOs, cents/kWh
Branch 2010*г. 2011*г. Branch 2010 г. 2011 г.
Belgorodenergo 3,30 4,27 Belgorodenergo 3,26 4,22
Bryanskenergo 4,30 5,29 Bryanskenergo 2,76 3,39
Voronezhenergo 3,37 4,61 Voronezhenergo 2,36 3,12
Kostromaenergo 4,30 5,37 Kostromaenergo 4,16 5,14
Kurskenergo 3,25 4,15 Kurskenergo 2,17 3,19
Lipetskenergo 3,65 4,59 Lipetskenergo 3,02 3,82
Orelenergo 4,63 5,74 Orelenergo 3,56 4,51
Smolenskenergo 4,08 5,22 Smolenskenergo 3,88 4,92
Tambovenergo 3,57 4,39 Tambovenergo 2,34 2,99
Tverenergo 5,07 7,15 Tverenergo 3,97 5,12
Yarenergo 2,84 4,07 Yarenergo 1,99 3,06
* Tariffs include costs of neighbor Territorial Grid Organizations and include preliminary corrections on Kurskenergo in 2011
24

25. Tariffs on connection services 2011
Average tariffs (on 20.04.11) on connection services, USD/kWh
2010 г. 2011 г.*,
Branch tariff exc.VAT tariff exc. VAT
Belgorodenergo 18,63 21,17
Bryanskenergo 294,01 102,35
Voronezhenergo 594,04 361,42
Kostromaenergo 328,91 223,46
Kurskenergo 321,63 92,56
Lipetskenergo 243,44 224,45
Orelenergo 296,38 113,09
Smolenskenergo 184,98 3,03
Tambovenergo 100,31 107,31
Tverenergo 338,12 361,73
Yarenergo 339,84 344,33
Average 242,06 159,89
* Tambovenergo, Tverenergo filled the tariff applications for setting tariffs on connection services (expected to be
approved).
Tambovenergo – current tariff on connection services valid to 01.06.2011
25

26. Assets characteristics on 31.12.2010
Capacity Line length
SS 35-110 kV, TS 6-35/0,4 kV, AL 35-110 kV, Grid 0,4-10 kV,
MWA MWA km km
IDGC of Center 31 403,9 15 191,8 51 801,9 322 478,8
Belgorodenergo 2 684,3 2 907,5 4 212,9 38 970,9
Bryanskenergo 2 296,8 735,5 3 514,2 21 935,4
Voronezhenergo 4 555,2 1 610,3 6 798,3 43 948,1
Kostromaenergo 1 707,0 1 436,4 4 304,5 20 813,6
Kurskenergo 3 335,1 1 481,4 4 719,7 29 693,1
Lipetskenergo 2 665,0 1 035,7 3 836,6 23 680,8
Orelenergo 1 707,5 797,9 3 082,2 24 712,6
Smolenskenergo 3 071,6 1 792,8 6 321,5 33 667,9
Tambovenergo 2 471,1 935,7 4 951,3 22 966,5
Tverenergo 3 966,9 1 478,1 6 925,8 39 217,8
Yarenergo 2 943,4 980,5 3 134,9 22 872,1
26