LITGRID Turtas AB INTRODUCTION TO INVESTORS VILNIUS, JANUARY 10, 2011 COMPANY OVERVIEW Litgrid group ● Registered on November 16, 2010, after spin-off from Lietuvos Energija AB Litgrid Turtas AB ● Manages electricity transmission system assets and its belongings ● Performs functions of electricity transmission operator Litgrid AB ● In Q1 2011 will be merged with Litgrid Turtas AB Baltpool UAB ● Performs market operator activity The spin-off has been performed following the EU Third Energy Package requirements to separate electricity generation and transmission activities Mission and goals ● Mission – to ensure reliable electricity transmission and create conditions for competition in the open electricity market ● Goals – to ensure system control efficiency in a most appopriate manner meeting interests of consumers and shareholders: – Maintaining company profitability – Reducing operational expenditure (Opex) – Not increasing electricity transmission tariff Activities Grid Control of Lithuanian develop- transmission system ment International Electricity strategic market projects organization Electricity system + market operator (Baltpool) = LITGRID Electricity market Generators BALTPOOL, electricity exchange Suppliers Transmission grid LITGRID Regulator Distribution network Source: Svenska Kraftnät Consumers 7 Electricity consumption tendencies Source: National energy strategy (draft), 2010. Strategic development projects ● Local grid development projects – To reinforce local grid; – To prepare for integration with ECN ● International strategic projects – To integrate Lithuanian transmission system into European continental networks; – To achieve national energy independence goals Electricity transmission system of Lithuania NordBalt project Internal grid Stage: Length of lines: 6 669 km manufacturing Transformers: 26 Completion: 2015 Substations: 230 Capacity: 700 MW Capacity of Value: EUR 552 m transformers: 3 843 MVA Transmitted during 11 months in 2010: 9.6 TWh LitPol Link project Stage: planning Completion: 2015-2020 Capacity: 500 MW + 500 MW Value: EUR 237 m Overview of balance sheets Actual balance sheet Spin-off balance sheet 2010.11.30, LTL million Lietuvos Lietuvos LITGRID Turtas AB Energija AB Energija AB . LITGRID Intangible assets 0.4 0.0 0.4 took over assets, Tangible non-current assets 2,645.2 590.1 2,055.1 Other non-current assets 827.7 789.7 38.0 comprising Non-current assets 3,473.3 1,379.9 2,093.5 transmission grid Inventories 2.3 0.6 1.6 Other current assets 103.5 103.5 0.0 . Lietuvos Energija Cash 126.7 83.9 42.8 retained electricity Current assets 232.4 188.0 44.4 generation capacities Non-current assets for sale 1.5 1.5 0.0 ASSETS 3,707.3 1,569.4 2,137.9 Share capital 993.6 489.3 504.3 Share premium 325.4 295.8 29.6 Reserves 311.4 -35.8 347.2 Retained earnings 1,679.5 692.1 987.4 Equity 3,309.9 1,441.3 1,868.6 Deferred income tax liabilities 217.5 22.2 195.4 Other non-current liabilities 92.3 33.9 58.4 Non-current liabilities 309.8 56.1 253.7 Trade payables 60.5 60.5 0.0 Other non-current liabilities 27.1 11.5 15.6 Non-current liabilities 87.6 72.0 15.6 EQUITY AND LIABILITIES 3,707.3 1,569.4 2,137.9 Average electricty price LTC/kWh 7.69 7.69 VIAP: +27% 6.39 7.36 Out of 6 components Litgrid Transmission tariff: retains a component for 4.89 balancing of renewable energy 5.31 and a component from funds for -13% 2.98 financing of strategic projects 3.41 6.01 4.73 15.5 16.0 2010 2011 Generation POS Transmission Supply Distribution in mid. voltage network Distribution in low voltage network PVM Source: National Control Commission for Prices and Energy INFORMATION FOR SHAREHOLDERS Why are we at the stock exchange? ● Lietuvos Energija, from which activity and assets were spun-off, establishing Litgrid Turtas AB, is a listed company – After spin-off of assets and activity, shareholders proportionally received shares of both companies ● Possibility to consider attracting funds to finance strategic projects through stock exchange Shares of utility companies Guaranteed and inevitable need of utility services Long-term and stable investment: fluctuation of utility company shares is lower than average in the market: 0.5 beta Source: http://pages.stern.nyu.edu/~adamodar/ Information about issuer ● Litgrid Turtas AB was included into the secondary trade list of NASDAQ OMX Vilnius on December 22, 2010 ● ISIN code LT0000128415 ● Abbreviation LGD1L ● Issue volume - 504 331 380 shares, nominal value of 1 share - 1 litas ● Share price today – €0,713/LTL2,46.