Ege haina 4q 2009

Quarterly Quarterly Financial Report Financial Report December 31st, 2009

December 31st, 2009

EGE Haina Reports Fourth Quarter 2009 Net Income of US$4.8 million; Revenues of US$94.8 million

Special points of interest:

Santo Domingo, Dominican Republic, March 26th, 2010 – EGE Haina announced

• US$12.0 million of Local Bond were placed during 4Q’09, completing the US$ 30.0 million authorized by the SIV. • US$13.7 million offset contract entered into with Ede Sur and CDEEE in October 2009.

today a fourth quarter 2009 net income of US$4.8 million, compared to a net loss of US$2.6 million in the fourth quarter 2008, driven by an increase in energy sales price and higher demand. Fourth quarter 2009 revenues were US$94.8 million, showing a 2.2% increase when compared to the same period of the previous year.

• During the period, the Company sold US$20.8 million face value of sovereign bonds.

Financial and Operational Summary (US$ Thousands, except for Operational data)

• During 4Q’09 the Company made partial repurchases of the 144A Senior Notes in the amount of US$5.7 million, face value.

• On February 26, 2010,

HIDRO and the Company agreed to offset US$13.1 million of the Company’s accounts payable to HIDRO against the same amount of accounts receivable from Edesur

Inside this Issue:

Description

4Q'09

4Q'08

Var %

YTD'09

YTD'08

Var %

Revenues

94,799

92,553

2%

307,198

460,567

-33%

Operating Costs

84,700

92,575

-9%

278,183

402,057

-31%

Variable M argin

31,193

25,971

20%

103,465

143,619

-28%

EBITDA¹

14,057

2,339

501%

44,555

73,814

-40%

Operating Income (loss)

10,099

(22)

-46706%

29,015

58,510

-50%

Net Income (loss)

4,814

(2,633)

-283%

14,402

38,573

-63%

Operating cash, net

1,039

10,561

-90%

(17,302)

6,136

-382%

• Quarter highlights

2

Availability, %

72

91

-21%

81

91

-11%

• External factors

2

Sales, GWh

507

496

2%

1,956

2,146

-9%

• MD&A

3

Generation, GWh

406

357

14%

1,465

1,445

1%

• Financial Debt

5

Spot Purchase, GWh

101

139

-28%

491

701

-30%

• Collections

6

• Financial results

7

1

EBITDA is a non-GAAP financial measure, which is calculated by adding depreciation and amortization expenses to the Operating income.

1

Quarterly Financial Report December 31st, 2009

Quarter Highlights and Recent Developments EGE Haina reported a Consolidated Net Debt to Consolidated EBITDA Ratio and a Consolidated Interest Coverage Ratio of 3.2:1.0 and 4.1:1.0, respectively, as of December 31st, 2009.

In October EGE Haina offset accounts receivable from EDE Sur with accounts payable to CDEEE by US$13.7 million.

On October 22nd, the fourth tranche of the local bond was fully placed. This tranche has a maturity of 30 months and an annual interest rate of 8.75% that will be paid monthly to investors.

During the period, the Company sold US$20.8 million face value of sovereign bonds maturing 2012 at an average price of 94.14%.

In November 2009, the Company repaid US$7.5 million corresponding to the debt with Banco de Reservas.

In December 2009, the fifth tranche of the local bond was fully placed. This tranche has a maturity of 36 months and an annual interest rate of 7.75% that will be paid monthly to investors.

During 4Q’09, the Company made partial repurchases of the 144A Senior Notes in the amount of $5.7 million (face value).

On December 23, the Company executed the supply and installation agreement with Vestas Argentina under which the latter will provide 14 V90 wind turbines. The total contract value is EUR 32.0 million.

On January 11, 2010, the Company fully collected the outstanding amount of the account receivable from the rescheduling agreement signed with Edeeste in August 2006.

On February 16, 2010, a euro forward contract was settled. In accordance with this agreement, the Company received €10,000,000 at a rate of US$1.4764/EUR. As of the issuance date of this report, the company has reduced its account receivable from US$163.5 million (as reported in the balance sheet as of December 31st, 2009) to US$ 53.7 million. Collections were received by US$ 130.9 million cash and the remaining of US$ 18.3 through offsetting accounts payable with account receivables during the 1Q’10.

On March 17, 2010 the Company issued its audited financial statements for 2009. The Company has restated its annual financial statements from amounts previously reported for periods ended through December 31, 2008. During 2009, the Company identified certain inventory adjustments that resulted from the translation of spare parts inventory from Dominican Pesos into US Dollars. The adjustment had no impact on the Company’s cash flow.

External Factors Average price of fuel for the month of December was US$69.05 /Bbl for Platt’s US Gulf Coast HFO #6, 3% Sulfur (fuel used to index the energy price under our PPAs). st

Exchange rate as of December 31 , 2009, closed at RD$36.16/USD. st

Accumulated inflation in DR, as of December 31 , 2009 was 5.76%.

30 25 20 15 10 5 Q1

Q2

Q3

2006

Dominican Republic’s GDP grew 3.5% during 2009.

2

2

Q4

Q1

Q2

Q3

Q4

2007

Q1

Q2

Q3

Q4

Q1

2008

HFO US$/MMBTU

LFO US$/MMBTU

CARBON US$/MMBTU

NG US$/MMBTU

Q2

Q3

Q4

2009

http://www.bancentral.gov.do/publicaciones_economicas/infeco_preliminar/infeco_preliminar2009-12.pdf.

2

Quarterly Financial Report December 31st, 2009

Consolidated Financial Results3 Revenues (US$ Thousands) Description

4Q'09

4Q'08

Var %

YTD'09

YTD'08

Var %

Contracted Energy

83,984

75,629

11%

262,787

416,974

-37%

Contracted Capacity

10,653

8,773

21%

42,635

35,010

22%

162

8,151

-98%

1,776

8,583

-79%

94,799

92,553

2%

307,198

460,567

-33%

Others Total Revenues

4Q’09 revenues increased by 2% when compared with the same period of previous year (US$ 94.8 MM Vs. US$ 92.6 MM). This positive variance is essentially driven by a 8.7% increase in the average energy sales price for the period (4Q’09 US$165.8/MWh vs 4Q’08 US$152.5/MWh) as a result of the increase in Fuel Oil prices, which is the main escalator of our PPAs’ pricing formula, and higher demand (4Q’09 506.6 GWh vs 4Q’08 496.0 GWh).

Operating Expenses (US$ Thousands) Description

4Q'09

4Q'08

Var %

YTD'09

YTD'08

Var %

Fuel Expense

41,208

37,346

10%

124,368

158,105

-21%

Transmission Tolls

2,461

2,570

-4%

10,531

12,834

-18%

Purchased Power

18,543

26,822

-31%

66,035

144,341

-54%

Frequency Regulation

1,395

(156)

-994%

2,799

1,667

68%

Operation & M aintenance

8,745

7,512

16%

31,181

31,085

0%

General & Administrative

8,391

16,120

-48%

27,729

38,720

-28%

Depreciation

3,957

2,361

68%

15,540

15,304

2%

Total Operating Expenses

84,700

92,575

-9%

278,183

402,057

-31%

During 4Q’09 operating expenses were lower than 4Q’08 comparative figures by 9% (US$84.7 MM Vs. US$92.6 MM). The positive variance is the result of: General and administrative expenses: 48% or US$7.7 MM decrease mainly due to i) lower allowance for doubtful accounts expense by US$3.0 MM; ii) lower minimum taxes provision (asset tax) by US$1.1 MM; iii) US$3.8 MM lower withholding tax during 4Q’09 since it was presented during 2008 as a part of other income and reclassified in December ’08 as G&A expenses; iv) partially offset by US$0.2 MM other minor negative variances.

Purchased power: 31% or US$8.3 MM decrease is mainly the result of lower spot energy purchases (4Q’09 102.9 GWh vs 4Q’08 109.4 GWh) as a result of an increase in generation, partially offset by a negative average price effect for the period (4Q’09 US$183.2/MWh vs 4Q’08 US$96.6/MWh).

Partially offset by 10% or US$3.9 MM increase in fuel costs, as a result of higher fuel consumption (4Q’09 480.2 thousand of BBLS vs 4Q’08 376.5 thousand of BBLS) due to higher energy generation; partially offset by a negative average price effect for the period (4Q’09 US$73.9 per BBLS vs 4Q’08 US$61.1 per BBLS).

Operation and maintenance expenses: 16% or US$1.2 MM increase when compared to 4Q’08 mainly as a consequence of the maintenance performed to the Barahona Plant and Puerto Plata #2 during 4Q’09.

3

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (USGAAP). These consolidated financial statements include the accounts of EGE Haina, and those of its wholly owned subsidiary EGE Haina Finance Company. Intercompany balances and transactions have been eliminated in consolidation.

3

Quarterly Financial Report December 31st, 2009

Net Income Net income was US$4.8 MM in the 4Q’09, compared to a net loss of US$2.6 MM in the same period of prior year. The positive variance of US$7.4 MM is explained by: Higher EBITDA by US$11.7 MM as explained in the above paragraphs.

US$2.0 MM lower financial expenses net, mainly due to lower interest expenses paid to generators during the period.

US$0.4 MM lower income tax.

The abovementioned variations are partially offset by lower other income net by US$4.5 MM. This variation is mainly the result of: i) lower withholding taxes on management fees and interest by US$5.1 MM, since these were presented as part of other expenses in 4Q 2008 while in 2009 are being booked in G&A expenses and interest expenses, respectively; ii) US$0.2 MM of higher other income; partially offset by an US$0.8 MM gain as a result of the repurchase of 144-A Senior Notes .

US$1.7 higher depreciation expense.

US$0.5 higher foreign exchange loss.

Cash Flow Cash provided by operating activities Net cash provided by operating activities was US$1.0 MM during the 4Q’09, compared to US$10.6 MM in the same period of 2008. The US$9.5 MM negative variation is explained by: a) US$60.8 MM decrease in accounts payable; b) US$4.0 MM increase in other assets; c) US$3.5 MM increase in prepaid expenses; d) US$5.3 MM of higher negative adjustments reconciling net income to the net cash provided in operating activities; e) US$1.9 MM decrease in payable to related parties; partially offset by i) US$49.2 MM lower accounts receivable; ii) US$7.4 MM higher net income; iii) US$6.4 MM lower inventories and iv)US$3.0 MM increase in other liabilities.

Cash provided by (used in) investing activities Net cash provided by investing activities was US$18.5 MM during the 4Q’09, compared to US$8.4 MM used in the same period of the prior year. The US$26.9 MM increase is the net result of: a) US$27.6 MM higher payments received on long-term investments due to the sale of dominican sovereign bonds; b) US$3.3 MM lower restricted cash; c) US$7.7 MM lower long term; partially offset by i) US$4.4 MM higher long-term investments; ii) US$ 6.2 MM higher additions to property, plant and equipment and iii) US$1.1 MM higher short term investments.

Cash used in financing activities Net cash used in financing activities was US$0.3 MM in the 4Q’09, compared to US$22.0 MM in the same period of prior year for a variance of US$21.6 MM. Such variance is the result of: a) US$20 MM dividend paid during 4Q’08; b) US$7.5 MM repayment of the debt with Banco de Reservas; c) US$4.9 MM repurchase of the 144-A Senior Notes; d)US$1.2 MM repayment of debt during 4Q’08; partially offset by US$12.0 MM higher long-term debt due to the placement of the fourth and fifth tranches of the local bond during 4Q’09.

4

Quarterly Financial Report December 31st, 2009

Financial Debt FINANCIAL DEBT GENERAL CONDITIONS AND RELEVANT STATISTICS Outstanding balance in US$ million 164.9 6.0 6.0 6.0 6.0 6.0 2.5 5.0

Instrument 144 A Bond Local Bond-1st tranche Local Bond-2nd tranche Local Bond-3rd tranche Local Bond-4th tranche Local Bond-5th tranche Reservas-sov bond collateral BHD-sov bond collateral Weighted av. Interest rate Weighted av. Life (years) Total financial debt in US$ MM

Interest type fixed fixed fixed fixed fixed fixed variable variable

Average Life (years) 7.38 0.77 1.36 1.52 2.27 2.93 1.46 1.46

Current Rate 9.50% 8.00% 8.50% 8.50% 8.75% 7.75% 8.50% 7.50%

Repayment schedule Balloon payment April 2017 Balloon payment October 2010 Balloon payment May 2011 Balloon payment July 2011 Balloon payment April 2012 Balloon payment April 2012 Balloon payment June 2011 Balloon payment June 2011

9.26% 6.15 202.4

US$ MM

Debt Amortization vs Financial Assets 180 160 140 120 100 80 60 40 20 0 2009

2010

2011

Cash on Hand

2012

2013

Debt

2014

2015

2016

2017

Sovereign bonds

Financial Expenses Description

(US$ Thousands) 4Q'09

4Q'08

YTD'09

YTD'08

Financial Expenses Interest on Senior Notes

(4,460)

(5,340)

(18,598)

(17,898)

Interest on Short-Term Debt

(231)

(7)

(924)

(154)

Interest on Long-Term Debt

(474)

-

Interest on Payables to Power Vendors

(460)

(1,897)

(3,686)

(3,723)

Amortization of Deferred Charges

(383)

(1,311)

(1,617)

(1,311)

(10)

(116)

(106)

(705)

(6,018)

(8,671)

(25,832)

(23,792)

Other Financial Expenses

(902)

-

Financial Income: Interest on Trade Accounts Receivable

2,381

4,261

10,986

12,008

Interest on Short-Term Investments

10

139

36

1,768

Interest on Long-Term Investments

1,352

Other Financial Income

Total Financial Expenses, Net

-

4,110

-

8

17

46

160

3,751

4,417

15,178

13,937

(2,267)

(4,254)

(10,654)

(9,856)

5

Quarterly Financial Report December 31st, 2009

Collections Cash Collection rate for 4Q’09 was 60% as compared to the 52% level of last year’s same quarter. The positive variance is mainly the effect of the suspension of the EDE Este PPA, since the Company continues to receive the payments of pledged customers and credit card collections.

Cash Collections Vs Billings 140%

120%

100%

80%

60%

40% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Collection 105% 74% 81% 70% 129% 83% 72% 92% 95% 108% 89% 52% 100% 64% 43% 60%

Operational Statistics Description

4Q'09

4Q'08

Var.%

YTD'09

YTD'08

Var.%

Heat Rate, Btu/KWh

9,837

9,721

1.2%

9,426

9,423

0.0%

Availability, %

72.3

91.3

-20.8%

81.3

90.9

-10.6%

Forced Outage Rate, %

17.9

7.1

152.1%

8.8

2.8

214.3%

Installed Capacity, M W

599

599

0.0%

599

599

0.0%

Effective Capacity, M W

547

547

0.0%

547

547

0.0%

Firm Capacity, M W

247

297

-16.6%

261

345

-24.4%

Energy Balance 580

430

GWh

280

130

(20)

(170) 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 GWh - Spot Purchase

16

(78)

GWh - Sales

471

547

551

531

490

539

596

544

505

558

588

496

457

478

514

507

GWh - Generation

486

469

420

386

389

409

480

395

377

361

350

357

346

330

384

406

(133) (152) (105) (132) (116) (149) (127) (197) (238) (139) (110) (150) (130) (101)

6

Quarterly Financial Report December 31st, 2009

EMPRESA GE ERADORA DE ELECTRICIDAD HAI A, S.A. A D SUBSIDIARY AUDITED CO DE SED CO SOLIDATED BALA CE SHEETS AS OF DECEMBER 31, 2009 A D 2008 Amounts in thousands of US$ Dec-09 Assets: Current Assets: Cash and cash equivalents Restricted cash Short Term Investment Accounts receivable Inventory Prepaid expenses and other Deferred income tax Total current assets Deposits in banks, restricted Long term receivables Long Term Invesment, restricted Property, plant and equipment Intangible assets, net Other assets Total Assets Liabilities and shareholders' equity: Current liabilities: Short-term debt Accounts payable Accounts payable to related parties Derivative financial liabilities Other Liabilities Total current liabilities Long-term debt, Deferred income tax Other non-current liabilities Shareholders' equity: Common stock Legal reserve Retained earnings Accumulated other comprehensive loss: Currency translation adjustment Investments revaluation reserve Total shareholders' equity Total liabilities and shareholders' equity

Dec-08

39,548 12,328 163,498 30,451 19,432 3,033 268,289

22,340 3,014 200,544 25,105 9,603 4,901 265,507

7,831 10,480 251,703 9,130 6,874 554,308

8,313 32,473 262,637 10,654 6,450 586,034

6,000 32,069 1,009 359 10,563 50,001

1,703 59,441 2,186 17,205 80,537

196,367 16,123 13 262,504

175,000 11,660 351 267,547

289,000 11,365 22,384

289,000 10,627 49,892

(31,032) 87 291,804

(31,032) 318,487

554,308

586,034 7

Quarterly Financial Report December 31st, 2009

EMPRESA GE ERADORA DE ELECTRICIDAD HAI A, S.A. A D SUBSIDIARY AUDITED CO DE SED CO SOLIDATED I COME STATEME TS FOR THE YEARS E DED DECEMBER 31, 2009 A D 2008 A D THE THREE MOTH PERIODS THE E DED. Amounts in thousands of US$ Three month period ended December 31, 2009 Revenues Energy Capacity Others

Operating costs Fuel Transmission Purchased power Compensation for frequency regulation Operating and maintenance Administrative and general expenses Depreciation and amortization Operating income (loss) Financial expenses, net Foreign exchange gain (loss) Other income (expenses), net Income before income tax Income tax: Current Deferred Net income (loss)

2008

Year ended December 31, 2009

2008

83,984 10,653 162

75,629 8,773 8,151

262,787 42,635 1,776

416,974 35,010 8,583

94,799

92,553

307,198

460,567

41,208 2,461 18,543 1,395 8,745 8,391 3,957 84,700

37,346 2,570 26,822 (156) 7,512 16,120 2,361 92,575

124,368 10,531 66,035 2,799 31,181 27,729 15,540 278,183

158,105 12,834 144,341 1,667 31,085 38,720 15,304 402,057

10,099 (2,267) (322) 526 8,036

(22) (4,254) 193 5,061 978

29,015 (10,654) (197) 2,571 20,735

58,510 (9,856) 443 (737) 48,360

(3,223)

394 (4,005)

(6,333)

(4,125) (5,662)

4,814

(2,633)

14,402

38,573

8

Quarterly Financial Report December 31st, 2009

EMPRESA GE ERADORA DE ELECTRICIDAD HAI A, S.A. A D SUBSIDIARY AUDITED CO DE SED CO SOLIDATED CASH FLOW STATEME TS FOR THE YEARS E DED DECEMBER 31, 2009 A D 2008 A D THE THREE MOTH PERIODS THE E DED. Amounts in thousands of US$ Three month period ended December 31, 2009 Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) to the net cash used in operating activities: Gain on sale of fixed asset Loss on asset dispossal Gain on early liability extinguishment Deferred income tax Depreciation and amortization Provision for doubtful accounts Gain on liability extinguishment Loss on sale of available-for-sale financial assets Investments revaluation reserve Financial expenses Forward contracts Change in assets and liabilities: Accounts receivable Inventories Prepaid expenses Other assets Accounts payable Payable to related parties Other liabilities Other non-current liabilities

2008

Year ended December 31, 2009

2008

4,814

(2,633)

14,402

38,573

1 17 (537) 3,223 3,957 290 (300) 63 5,723 (4,058) 262

4,005 2,361 3,300 4,277 -

(665) 167 (1,851) 6,333 15,540 290 (300) 63 4,506 359

5,662 15,304 3,300 4,277 (143,598) (8,233) (5,497) (3,836) 92,621 590 6,963 10

(68,669) 8,077 (2,506) (3,807) 72,475 (1,915) (4,404) 1

(80,235) (7,273) (9,830) (423) 52,362 (1,177) (9,533) (38)

1,039

10,561

(17,302)

Cash flows from investing activities: Net changes in restricted cash Sale of property, plant and equipment Long Term Invesment Additions to property, plant and equipment Short-term investments Payments received on long-term investments Changes in Long Term Receivables Net cash provided by (used in) investing activities

269 11 (4,400) (4,687) (277) 27,595 18,512

(3,014) 1,471 868 (7,717) (8,392)

(5,881) (1,005) 27,595 27,097

(3,014) (17,098) 20,000 (112)

Cash flows from financing activities: Proceeds from long-term debt Proceeds from short-term debt Repayment of long-term debt Repayment of short-term debt Dividends Debt issuance costs paid Net cash provided by (used in) financing activities

12,000 (4,900) (7,500) 16 (384)

(46,981) (500) 45,485 (20,000) (21,996)

37,500 17,015 (8,054) (18,723) (20,003) (322) 7,413

16,703 (1,002) (26,439) (20,000) (30,738)

Net increase (decrease) in cash and cash equivalents

19,166

(19,827)

17,208

(24,714)

Net cash provided by (used in) operating activities

Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period Supplemental cash flow information of non-cash activities Decrease in accounts receivable through offsets wiht accounts payable Decrease in accounts receivable in exchange for investmentsecurities Reclassification of accounts receivable from non-current to current Unpaid additions of property, plant and equipment Decrease in accounts payable settled by exchanging financialsecurities $19.9 million dividend paid to Minority Interest with sovereign bonds with a fair market value of $19.3 million Other

(19,517) 1,643 993 221 11,660 63 (7,440) (38)

3,495 2,893

6,136

20,381

42,167

22,340

47,053

39,548

22,339

39,548

22,339

13,670 74,300 19,976 (2,083) 6,233

1,078 5,587 583 -

73,732 74,300 32,473 230 6,233

62,418 11,907 583 -

-

-

19,370 -

-

4

4

9

Quarterly Financial Report December 31st, 2009

The consolidated financial statements presented herein have not been audited and were prepared in conformity with Generally Accepted Accounting Principles in the United States (USGAAP).

EGE Haina is the largest generator of electricity in the Dominican Republic, based on installed capacity, currently operating 11 electric power generation units at six plants, consisting of San Pedro, Sultana del Este – barge, Haina and Barahona in the southern part of the country, Puerto Plata in the northern and Pedernales in the western part of Santo Domingo. EGE Haina has contracted approximately 96% of its power generation to the three Dominican Republic distributors. For more information, visit the Company's Web site at www.egehaina.com.

Caution Concerning Forward-Looking Statements: This report may contain “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” believe,” “seek,” or “will”. Forward-looking statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of the Company may differ materially from those expressed or implied by such forward-looking statements and assumptions. For us, particular uncertainties that could adversely or positively affect our future results include, but are not limited to: changes in general economic, political, governmental and business conditions; the behavior of financial markets; changes in commercial market regulations. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. EGE Haina assumes no obligation and does not undertake to update forward-looking statements.

Investor Contact: Please address any questions or comments related to this report to our investor’s e-mail: hainainvestors@egehaina.com.

10