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Quarterly Quarterly Financial Report Financial Report December 31st, 2010

December 31st, 2010

EGE Haina Reports Fourth Quarter 2010 Net Income of US$12.8 million; Revenues of US$114.5 million Special points of interest:

Santo Domingo, Dominican Republic, March 15th, 2011 – EGE Haina announced

• EGE Haina reported a

Consolidated Net Debt to Consolidated EBITDA Ratio and a Consolidated Interest Coverage Ratio of 0.97:1.0 and 7.6:1.0, respectively, as of December 31st, 2010.

• In October 2010, the

company repaid the first tranche of the Local Bond issued (US$ 6 MM), remaining US$ 24 MM outstanding.

today fourth quarter 2010 net income of US$12.8 million, compared to a net income of US$4.8 million in the fourth quarter 2009, driven by an increase in energy sales price and higher demand. Fourth quarter 2010 revenues were US$114.5 million, showing a 21% increase when compared to the same period of the previous year.

• During November and

December 2010, the Company entered into two agreements with Banco Popular Dominicano for US$8 MM and US$5 MM at variable interest rates. The loans mature in November and December 2015, respectively.

• On March 8, 2011 the

Company issued its audited financial statements for 2010.

Inside this Issue:

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

Description

4Q'10

4Q'09

Var %

FY'10

FY'09

Var %

Revenues

114,546

94,799

21%

422,509

307,198

38%

Operating Costs

98,283

84,700

16%

359,921

278,183

29%

Variable M argin

38,290

31,193

23%

146,678

103,465

42%

EBITDA¹

20,324

14,057

45%

78,671

44,555

77%

Operating Income (loss)

16,263

10,099

61%

62,589

29,015

116%

Net Income (loss)

12,785

4,814

166%

41,973

14,402

191%

Operating cash, net

41,656

1,039

3908%

99,817

(17,302)

-677%

Availability, %

93

72

29%

90

81

11%

Sales, GWh

582

507

15%

2,178

1,956

11%

• Quarter highlights

2

Generation, GWh

363

406

-11%

1,625

1,465

11%

• External factors

2

Spot Purchases, GWh

219

101

117%

554

491

13%

• MD&A

3

• Financial Debt

5

• 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, 2010

Quarter Highlights and Recent Developments EGE Haina reported a Consolidated Net Debt to Consolidated EBITDA Ratio and a Consolidated Interest Coverage Ratio of 0.97:1.0 and 7.6:1.0, respectively, as of December 31st, 2010. On October 26, 2010 The Executive Board of the International Monetary Fund completed the second and third reviews of the Dominican Republic’s economic performance under a program supported by a 28-month Stand-By Arrangement (SBA). The completion of the reviews allowed the immediate disbursement of approximately US$249 MM, bringing total disbursements under the arrangement to an amount equivalent of US$687.6 MM. In October 2010, the company repaid the first tranche of the local corporate Bond (US$ 6 MM), remaining US$ 24 MM outstanding. In November 2010, the Company entered into a US$5.0 million unsecured loan with Banco Popular Dominicano at a variable interest rate, payable in 60 monthly installments of principal and interest totaling US$83,333 each. This loan matures in November 2015. In December 2010, the Company entered into a US$8.0 million unsecured loan with Banco Popular Dominicano at a variable interest rate, payable in 60 monthly installments of principal and interest totaling US$133,333 each. This loan matures in December 2015. In December 2010, the Company paid milestone number five to Cobra (the constructor of the Wind Project) in the amount of EUR 14.9MM. On March 8, 2011 the Company issued its audited financial statements for 2010.

External Factors

Coal, Natural Gas and Fuel-Oil #6 Price Evolution (US$/MMBtu)

Average price of fuel for the month of December was US$75.69 Bbl for Platt’s US Gulf Coast HFO #6, 3% Sulfur (fuel used to index the energy price under our PPAs). Exchange rate as of December 31st, 2010, closed at RD$37.63/USD. Accumulated inflation in DR, as of December 31st, 2010 was 6.24%.2 According to the statement by an IMF Mission, the DR GDP is estimated to have grown by 7.8% in 2010.3

3

11.19

4.91

5.04

10.9

11.64 10.61

8.23 6.37

6.20 6.23

5.89 6.41

Q4'08

4.48

Q1'09

5.30 4.07

3.81

Q2'09

3.44

Q3'09 HFO

2

11.00 10.08

4.23

4.34 3.78

3.58

Q4'09

Q1'10 COAL

3.97

3.73

Q2'10

4.50

Q3'10

Q4'10

NG

http://www.bancentral.gov.do http://www.imf.org/external/spanish/np/sec/pr/2011/pr1145s.htm

2


Quarterly Financial Report December 31st, 2010

Consolidated Financial Results4 Revenues (US$ Thousands) Description Contracted Energy Contracted Capacity Others Total Revenues

4Q'10

4Q'09

Var %

FY'10

FY'09

Var %

101,390

83,984

21%

373,912

262,787

42%

12,695

10,653

19%

46,949

42,635

10%

461

162

185%

1,648

1,776

-7%

114,546

94,799

21%

422,509

307,198

38%

4Q’10 revenues increased by 21% when compared with the same period of previous year (US$ 114.5 MM Vs. US$ 94.8 MM). This positive variance is essentially driven by a 6.0% increment in the average energy sales price for the period (4Q’10 US$179.82/MWh vs 4Q’09 US$173.10/MWh) as a result of the increase in Fuel Oil prices, which is the main escalator of our PPAs’ pricing formula, and higher demand by 14.8% (4Q’10 581.7 GWh vs 4Q’09 506.6 GWh), mainly driven by the reinforcement of the EDE Este PPA.

Operating Expenses (US$ Thousands) Description

4Q'10

4Q'09

Var %

FY'10

FY'09

Var %

Fuel Expense

37,130

41,208

-10%

166,850

124,368

34%

Transmission Tolls

3,094

2,461

26%

10,840

10,531

3%

Purchased Power

34,829

18,543

88%

92,775

66,035

40%

Frequency Regulation

1,203

1,395

-14%

5,367

2,799

92%

Operation & M aintenance

9,288

8,745

6%

34,603

31,181

11%

General & Administrative

8,678

8,391

3%

33,404

27,729

20%

Depreciation

4,061

3,957

3%

16,082

15,540

3%

Total Operating Expenses

98,283

84,700

16%

359,921

278,183

29%

During 4Q’10 operating expenses were higher than 4Q’09 comparative figures by 16% or 13.6 MM (US$98.3 MM Vs. US$84.7 MM). This increase is mainly explained by: Purchased power: 88% or US$16.3 MM increase is the result of higher spot energy purchases (4Q’10 220.7 GWh vs 4Q’09 102.9 GWh), partially offset by a decrease in the average purchase price effect for the period (4Q’10 US$138.82MWh vs 4Q’09 US$183.2/MWh). Transmission Tolls: 26% or US$0.6 million higher than 4Q’09. Operation & Maintenance: 6% or US$0.5 million higher than 4Q’09; due to the major maintenance of Barahona Plant and Sultana’s engine #4 and # 6 executed during October and November’10 as well as the repair of Mitsubishi’s fuel tank performed in October’10; partially offset by the major maintenance the Sultana’s engines #5 and #7 executed during October and November’09 and the rehabilitation of the Puerto Plata unit #2 during December’09. General and administrative expenses: 3% or US$0.3 MM increase when compared to 4Q’09; mainly due to i) US$0.7 MM higher technical advisory fee expense and corresponding withholding taxes due to higher sales during the 4Q’10; ii) US$0.4 MM higher office operation costs; partially offset by iii) US$0.3MM lower professional services, iv)US$0.2MM lower allowance for doubtful accounts; v) US$0.2MM lower minimum taxes during 4Q’2010 and vi) US$0.1 other minor positive variances. Partially offset by Fuel costs: 10% or US$4.1 MM decrease, as a consequence of lower fuel consumption (4Q’10 396.1 thousand of BBLS vs 4Q’09 480.2 thousand of BBLS) due to 42.9GWh lower energy generation; partially offset by a negative average price effect for the period (4Q’10 US$75.9 per BBLS vs 4Q’09 US$73.9 per BBLS). 4

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

3


Quarterly Financial Report December 31st, 2010

owned subsidiary EGE Haina Finance Company. Intercompany balances and transactions have been eliminated in consolidation.

Net Income Net income was US$12.8 MM in 4Q’10, compared to a net income of US$4.8 MM in the same period of the prior year. The positive variance of US$8.0 MM is explained by: Higher EBITDA by US$6.3 MM as explained in the above paragraphs. US$3.2 MM lower income tax. US$0.1 MM lower interest expense, net. Partially offset by : US$0.6 MM higher other income. US$1.0 higher exchange loss as a result of exposure to Euro holdings.

Cash Flow Cash provided by (used in) operating activities Net cash provided by operating activities was US$41.7 MM during the 4Q’10, compared to US$1.0 MM in the same period of 2009. The US$40.6 MM positive variation is explained by: a) US$45.8 MM decrease in accounts receivable; b) US$8.0 MM higher net income; c) US$5.7 MM lower income tax payable; d) US$2.2 MM increase in other liabilities; partially offset by: i) US$7.2 MM higher inventories; ii) US$6.5 MM lower accounts payable; iii) US$3.7 MM higher prepaid expenses and other assets; iv) US$2.8 MM of higher negative adjustments reconciling net income to the net cash used in operating activities; and v) US$0.9 MM higher derivative financial liability. Cash (used in) provided by investing activities Net cash used in investing activities was US$6.3 MM during the 4Q’10, compared to US$18.5 MM provided by investing activities in the same period of the prior year. The US$24.8 MM change is mainly the result of: i) US$22.8 MM higher additions to property, plant and equipment during 4Q’10; ii)US$23.2 MM lower sales of long term investments during 4Q’10; iii) US$11.1 MM increment of short term investments in 4Q’10 due to new certificates of deposit; partially offset by: iv) US$19.0 MM lower short term investment restricted; v) US$13.3 MM higher collections of short term investment. Cash provided by (used in) financing activities The positive variance of US$7.1 MM in financing activities during 4Q’10 when compared to the same period of the prior year, is mainly driven by: a)US$15.6 MM lower repayment of long term debt during 4Q’10 and b) US$1.0MM higher proceeds from long term debt; partially offset by 9.5 MM higher repayment of short term debt.

4


Quarterly Financial Report December 31st, 2010

Financial Debt FINANCIAL DEBT GENERAL CONDITIONS AND RELEVANT STATISTICS Balance Interest type Interest Rate Repayment schedule 164.9 fixed 9.50% Balloon payment April 2017 6.0 fixed 8.50% Balloon payment May 2011 6.0 fixed 8.50% Balloon payment July 2011 6.0 fixed 8.75% Ballonn payment April 2012 6.0 fixed 7.75% Ballonn payment Deember 2012 5.0 fixed 5.00% Balloon June 2011 7.9 Variable (DR US$) 5.75% Monthly - ending November 2015 4.8 Variable (DR US$) 5.75% Monthly - ending December 2015

Instrument 144 A Bond Local Bond-T2 Local Bond-T3 Local Bond-T4 Local Bond-T5 BHD Popular Popular

9.03% 5.34 206.6

Weighted av. Interest rate Weighted av. Life (years) Total financial debt

Total Debt vs Financial Assets 180.0 160.0 140.0

US MM

120.0 100.0 80.0 60.0 40.0 20.0 2010

2011

2012

cash on hand

2013 Debt

2014

2015

2016

2017

Sovereign bonds

Financial Expenses (US$ Thousands) Description

4Q'10

4Q'09

FY'10

FY'09

Financial Expenses Interest on Senior Notes

(4,307) (4,460)

(17,185)

(18,598)

Interest on Short-Term Debt

(88)

(231)

(455)

(924)

Interest on Long-Term Debt

(541)

(474)

(2,439)

(902)

(22)

(460)

(544)

(3,686)

(399)

(383)

(1,649)

(1,617)

Interest on Payables to Power Vendors Amortization of Deferred Charges Capitalized Interest

655

-

2,127

Other Financial Expenses

(88)

(10)

(154)

(106)

-

(4,790) (6,018)

(20,299)

(25,832) 10,986

Financial Income: 2,007

2,381

6,472

Interest on Short-Term Investments

Interest on Trade Accounts Receivable

318

10

710

36

Interest on Long-Term Investments

255

1,352

1,402

4,110

70

8

1,317

46

2,651

3,751

9,902

15,178

(10,397)

(10,654)

Other Financial Income

Total Financial Expenses, Net

(2,140) (2,267)

5


Quarterly Financial Report December 31st, 2010

Collections Cash Collection rate for 4Q’10 was 126% as compared to the 60% level of last year’s same quarter. The positive variance is due to higher cash collections from Edenorte (4Q’10 133% vs 4Q’09 59%) and Edesur (4Q’10 136% vs 4Q’09 52%).

Cash Collections Vs Billings 152% 126% 100%

96% 64%

4Q08

67%

60%

52%

43%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Operational Statistics Description

4Q'10

4Q'09

Var.%

FY'10

FY'09

Var.%

Heat Rate, Btu/KWh

9,125

9,520

-4.1%

9,458

9,426

0.3%

Availability, %

93.2

72.3

28.9%

90

81.3

10.7%

Forced Outage Rate, %

0.7

12.8

-94.5%

1.6

8.8

-81.8%

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

247

0.0%

261

345

-24.4%

Energy Balance 580 430

GWh

280 130 (20) (170) GWh - Spot Purchase

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

(139)

(112)

(149)

(130)

(100.89)

(53)

(131)

(151)

(218.93)

GWh - Sales

496

457

478

514

506.64

483

505

609

581.71

GWh - Generation

357

346

330

384

406

430

375

458

363

6


Quarterly Financial Report December 31st, 2010

EMPRESA GENERADORA DE ELECTRICIDAD HAINA, S.A. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2009 Amounts in thousands of US$ Dec-10 Assets: Current Assets: Cash and cash equivalents Short term investment Accounts receivable Inventory Prepaid expenses and other Deferred income tax Total current assets Deposits in banks, restricted Long term invesment, restricted Property, plant and equipment Intangible assets, net Other assets Total Assets Liabilities and shareholders' equity: Current liabilities: Short-term debt Current portion of long-term debt Accounts payable Accounts payable to related parties Derivative financial liabilities Income tax payable 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-09

110,924 11,479 110,230 31,643 18,651 540 283,467

39,548 12,328 163,498 30,450 19,432 3,033 268,289

7,831 276,659 7,512 7,916 583,385

7,831 10,480 251,703 9,131 6,874 554,308

5,000 14,600 23,351 1,150 5,701 6,912 56,714

6,000 32,070 1,009 359 10,563 50,001

186,967 15,504 19 259,204.1

196,367.00 16,123.29 13.00 262,504.23

289,000 13,464 52,258

289,000 11,365 22,384

(31,032) 491 324,181

(31,032) 87 291,804

583,385

554,308 7


Quarterly Financial Report December 31st, 2010

EMPRESA GENERADORA DE ELECTRICIDAD HAINA, S.A. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND THREE MOTH PERIODS THEN ENDED Amounts in thousands of US$ Three month periods ended December 31, 2010 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 Financial expenses, net Foreign exchange loss Other (expenses) income, net Income before income tax Income tax Net income

2009

Years ended December 31, 2010

2009

101,390 12,695

83,984 10,653

373,912 46,949

262,787 42,635

461

162

1,647

1,776

114,546

94,799

422,509

307,198

37,130 3,094 34,829 1,203 9,289 8,678 4,060 98,283

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

166,850 10,840 92,775 5,367 34,603 33,404 16,082 359,921

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

16,262 (2,140) (1,268) (56) 12,798

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

62,588 (10,397) (1,407) (1,236) 49,548

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

(14)

(3,223)

(7,575)

(6,333)

12,784

4,814

41,973

14,402

8


Quarterly Financial Report December 31st, 2010

EMPRESA GENERADORA DE ELECTRICIDAD HAINA, S.A. AND SUBSIDIARY CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND THREE MOTH PERIODS THEN ENDED Three month periods ended December 31, 2010 Net income Adjustments to reconcile net income to the net cash provided by (used in) operating activities: Gain on sale of fixed asset Loss on asset dispossal Gain on early liability extinguishment Net foreign exchange loss 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 Put option Others Change in assets and liabilities: Accounts receivable Inventories Prepaid expenses Other assets Accounts payable Income tax Payable to related parties Derivative financial liability Other liabilities Other non-current liabilities

2009

12,785

4,814

Years ended December 31, 2010

2009

41,973

32 1,879 (790) 4,060 509 674 (622) -

1 17 (537) 3,223 3,957 290 (300) 63 5,723 (4,058) 359 (97)

26,350 (5,603) (1,462) (1,015) 5,198 5,701 31 (866) (5,206) -

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

(1,042) 9,687 5,701 141 (866) (4,822) 6

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

41,656

1,039

99,817

(17,302)

Additions to property, plant and equipment Long-term investments Short-term investments restricted Purchases of short-term investments Payments received on long-term investments Sales of short-term investments Purchases of restricted investments Sales of restricted investments Net cash (used in) provided by investing activities

3,482 3,294 (30,822) 19,043 (11,324) (3,294) 13,360 (19,043) 19,043 (6,261)

269 11 (4,687) 23,195 (277) 18,512

3,294 (37,099) (2,165) 13,360 (19,043) 19,043 (22,611)

3,495 2,893 (5,881) 27,595 (1,005) 27,097

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

13,000 (6,300) 6,700

12,000 (15,569) 3,169 16 (384)

13,000 5,000 (13,800) (10,000) (30) (5,830)

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

Net cash provided by (used in) operating activities Net changes in restricted cash Sale of property, plant and equipment Advance payments of property, plant and equipment Collection of other related p arty receivables

Decrease in accounts receivable through offsets with accounts payable Reclassification of accounts receivable from non-current to current Transfer from inventories to property, plant and equipment Unpaid additions of property, plant and equipment Dividends paid in nature with financial assets by US$20.00 million with, a fair market value of US$19.4 million Decrease in accounts payable settled by exchanging financial securities Dividends paid with investment securities

32 -

14,402

538

1,874 16,082 509 3,850

507 29,278

(4,413) 781

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

42,095

19,167

71,376

17,208

68,829

20,381

39,548

22,340

110,924

39,548

110,924

39,548

794 3,221 (2,117)

9,445 19,976 226,378

20,414 3,221 751

73,732 32,473 230,235

-

54,936 6,233 19,370

-

74,300 6,233 19,370

9


Quarterly Financial Report December 31st, 2010

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.

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Ege haina 4q 2010