1. FY 2007 Consolidated results Financial impact new regulation
Ladies and Gentlemen, let me welcome you for the presentation of the 2007 consolidated results and the impact of the new 4 year regulation.
Given the international audience, the presentation will be given in English.
The presentation as well as the Q&A session will be recorded and made available on our web site.
Also, for the first time, some of you will follow this meeting through a web platform.
The presentations will be done by Jan Gesquière, our CFO, and myself Daniel Dobbeni, ceo of Elia.
Analyst meeting
February 15th, 2008

2. Disclaimer
This presentation is only provided for general information purpose about Elia and its activities. The included statements are neither reported results nor other historical information. They are not provided to serve as the basis for any evaluation of Elia, and cannot be binding and/or enforceable upon Elia.
As forward-looking statements, they are subject to assumptions, risk and uncertainties, actual future results may differ from those expressed in or implied by such statements.
Although Elia uses reasonable cares to present information which is up-to-date to the best of Elia's knowledge, Elia makes no representation or warranty whatsoever as to the adequacy, accuracy, completeness or correctness of such information.
Elia will not be liable for any consequences arising from or related to the use or interpretation of the information contained or absent in this presentation.

3. Agenda
Summary
Highlights 2007
Financials 2007
Outlook 2008

4. Summary Highlights 2007 Financials 2007 Outlook 2008
Energy Consumption influenced by mild weather, increased penetration of cogeneration and renewables
Approved 4 year tariffs ( included)
Full realisation of investment plan
Successful management of controllable costs
Growing success of Belpex
Update on Elia’s shareholdership and participations
Financials 2007
Improved profit margin with respect to forecast
Increase in dividend to € 1,30 a share
Outlook 2008
New regulation with 4-year tariffs
Capex
The presentation is divided into three main topics:
The operational highlights for 2007
The consolidated results for last year, and
An outlook with respect to the financials and some expected highligths for 2008.
Let me start with the operational highlights for 2007

5. Agenda
Summary
Highlights 2007
Financials 2007
Outlook 2008

6. Injected energy Elia’s balancing zone per month
1. Energy Consumption in Elia’s balancing zone
Injected energy Elia’s balancing zone per month
1000
2000
3000
4000
5000
6000
7000
8000
9000
Jan
Feb
Maart
April
Mei
Juni
Juli
Aug
Sept
Okt
Nov
Dec
GWh/ month
Real GWh
Real GWh
Real GWh
Total Energy consumption in Elia’s balancing zone decreased slightly to 88,8 TWh in 2006 from 89,4 TWh in 2006
This is mainly due to :
Mild temperatures throughout the year
Increasing local production at industrial clients
Energy from renewables (wind & biomass) directly injected in distribution network
The energy consumption in the Elia’s balancing zone showed a slight decrease with respect to 2006.
It is mainly due to three elements:
The mild weather throughout the year
The further penetration of the co-generation at the sites of industrial consumers
The larger share of electricity produced from renewable energy sources that are injected in the distribution network.
It is worthwhile to notice that the decrease in transported energy volumes has no impact on the fair profit for the shareholders, as it is the case for nearly all transmission system operators in Europe.

7. 2. Evolution of tariffs since 2001
First increase in tariffs since 2001 due to new capex, higher financing costs, flat tariffs (incl. inflation 09-11) & less surpluses from the past to reverse
The major decrease in transmission tariffs observed since 2001 shows, for the first time, an increase for the period
This increase results from four main elements:
Less surplus from previous years to be returned to the customers by artificially decreasing the real costs
Higher financial costs following the “embedded debt” principle
The important investments in our network since 2004, and
The fact that, under the new regulation, the tariffs are flat for four years with, as consequence, the impact of the expected inflation for the whole period.
Despite this increase, our tariffs remain competitive when compared with other European countries as shown on the next slide.

8. Other regulatory charges
ETSO European comparison 2006 tariffs 5 10 15 20 25
Austria
Belgium
Czech Republic
Denmark East
Denmark West
Estonia
Finland
France
Germany
Great Britain
Greece
Hungary
Ireland
Italy
Lithuania
Netherlands
Norway
Poland
Portugal
Romania
Slovak Rep
Slovenia
Spain
Sweden
( € / MWh )
Infrastructure
Losses
System Services
Other regulatory charges
This tariff comparison was realised in 2007 by ETSO, the association of the European Transmission System Operators, for the tariffs applied in 2006.
When comparing the level of the tariffs in 2006 with the flat tariffs for , it can easily be shown that the new tariffs will not modify our ranking with respect to other countries ; to the advantage of the industrial companies located in Belgium as well as all other companies and residential consumers.
It is also worthwhile to observe that transmission represents a relatively small part of the electricity bill: around 5% for the residential consumers, 9% for small and medium companies and 14% for large industries.

9. 3. Investments 2007 44% 48% Full realisation of capex plan 2007
Breakdown CAPEX
Full realisation of capex plan 2007
Focus on reliability and internal demand
as well as for
supporting local production at site of industrial clients
increased co-generation and renewables
managing international flows
CAPEX 2007
€ 142,6 m
44%
48%
On the investment side, 2007 could see the realisation of the entire capex plan. The focus has been oriented towards
Reliability by strengthening the electricity supply in some area’s and with a replacement program spread over several years
Matching the forecasted increase in internal demand
As well as supporting cogeneration at site of industrial customers
We have also pursued our development plan for improving the management of international flows on our network.
A few examples are presented in the next slides.
Replacements
Driven by interconnections with neighbours
Driven by internal consumption
Driven by import levels & generation localisation

10. Investments 2007
150 kV underground cable between Monceau & Thy-le-Château
Strengthen electricity supply in South-west part of Belgium
Includes new 150 KV transformer in Thy-le-Château
Completed in May 2007
Investment of about € 15m
Completion of replacement of 70kV line Beerse-Turnhout-Mol
Replacement of overhead line
117 pylons
To be completed in Q1 2008
Investment of about € 12m
The first two examples pursued the objective to maintain or improve the reliability.
A 150 kV underground cable between Monceau and Thy-le-Château led to the strenghening of the electricity supplu in the south-west part of Belgium
The oldest 70 kV line between Beerse – Turnhout and Mol is being replaced and will be put in service during the first quarter of 2008.

11. Investments 2007 Extensions and developments at the port of Antwerp
New 150 kV Petrol high-voltage station
Extension of high-voltage station “Scheldelaan” to connect new production unit of Exxon (WKK)
Started in Q and to be completed in December 2008
Investments of about € 20m
The third example shows the extension and the developments of the electricity supply at the port of Antwerp.
This investments pursue two main objectives:
Allowing the connection of a co-generation unit within the site of Exxon, and
The enforcement of the supply within the Antwerp region with a new sub-station called Petrol
The latter will be put in service at the end of 2008 while the first one was started during the first quarter of 2007.

12. Investments 2007 Purchase of 3 phase shifters
Van Eyck & Zandvliet high -voltage station
The biggest of their type in the world (each 1400 MVA)
Enable to better spread the energy flows on the Elia grid
Optimise interconnection flow with the Netherlands and increase border capacity, mainly in the summer
Started in Q3 2006;
In service planned 1H 2008 due to technical issue with equipment as delivered by manufacturer
Investment of about € 54 m
The fourth and final example concerns the installation of three phase-shifters, at two sub-stations located close to the Dutch border.
These equipments improve both the management of the international electricity flows on our very high voltage network and the transmission capacity made available to the market actors at our borders with France and the Netherlands, mainly in the summer period.
Due to a technical issue with the equipment delivered by the manufacturer, the industrial operation has been delayed to the first semester of 2008.
As you have noticed, we want to provide a very high reliability to our customers for a competitive price.
What are our results so far?

13. Telecom & third party serv. Total net controllable costs
4. Successful management of controllable costs
Good operational results : very reliable network > 99,999%
Highly resilient network
Meshed network
Improved installation of safety and control equipment
Average interruption time per client and per year: 3min. 32sec.
Total net controllable costs decreased with 2,7% since 2004 despite inflation of 2% a year thanks to :
Increased efficiency
Operational excellence
Replacement of retired personnel
The reliability achieved in 2007 is better that 99,999% which translates in an average interruption time of 3 min 32 seconds per customer and per year.
This result is among the best within Europe and is the consequence of carefully designed and applied maintenance and replacement policies as well as development plans, yearly updated, that take into account the evolution of the demand as the opening of the Belgian market.
On the cost side, the figures show that for the last 4 years, the management took care to control its costs as well as to increase its efficiency.
The general trend is a reduction of our personal costs while the increase of our expenses for goods and services was less than the inflation.
Given the evolution towards the new regulation mechanism with an incentive to further decrease our controllable costs, the results achieved during these last years demonstrate the capacity of Elia to meet the new challenges.
In € m (IFRS)
2004
2005
2006
2007
Personnel costs
122,9
117,2
116,5
114,0
G&A expenses
147,8
144,0
146,2
150,9
Telecom & third party serv.
-11,2
-9,4
-9,7
-12,3
Total net controllable costs
259,5
251,8
253,0
252,6

14. 5. Belgian Power Exchange (Belpex)
2007 was 1st full year of operation
24 diversified participants (suppliers, traders, producers) from 6 countries (NL,CH,UK,FR,BE,DE,CZ) at Dec 31st, 2007
In 2007 average daily volume was MWh with the following average electricity prices :
Belix €41,85/MWh
Belix peak (8am-20pm) €53,56/MWh
Belix off-peak (20pm-8am) €30,13/MWh
Record volume of MWh on December 20th, which equals 21,3% of average Belgian electricity demand
Market coupling induced an average export volume of MWh and an average import volume of 2.896MWh
Among the new products delivered by the Elia group to the market, is the start up in November 2006 of Belpex, the Belgian Power Exchange.
A full year operation has confirmed, and even outperformed, our objectives.
With 24 participants from 6 different countries and an average daily volume around 8,5% and a peak volume of 21% of the demand, we have shown that the market coupling with France and the Netherlands was the most efficient way to establish a power exchange given the size of the Belgian market.
The price volatility has also benefited from the market coupling even in the few cases where the three market were decoupled due to congestion at the two borders.

15. Belpex volume growth in 2007
The volume traded at Belpex showed a steady trend throughout the year as can be seen on this graph.
For most of the time, the wholesale prices at the spot market were identical or very close to the French market.

16. Belgian-French border
FR-BE-NE TLC
2007 Usage of transmission capacities
Border
Belgian-French border
Belgian- Dutch border
Constrained
Unconstrained
F ≠ B ≠ NL
  F = B ≠ NL
  F ≠ B = NL
  F = B = NL
1,6 %
26,4 %
These results also confirm that the Belgian network is one of the most open towards its neighbours.
For 62,7% of the time, the three markets were coupled and the same price.
For only 1,6% of the time, the three markets were decoupled.
In other words, the transmission capacity at our borders appear sufficient for the current price differentials observed between the three countries and the demand from the market actors. Of course, this observation is only valid as long as the existing production units in each country remain in service or, at least, are replaced in due time by new units or a decrease in demand.
We are therefore following closely the evolution at the generation and the demand side, especially taking into account the potential impact of the European directives with respect to climate change and renewables.
9,4 %
62,7 %

17. Elia: A Single Economic Unit
6. Update Shareholdership
& participations
Suez/ Electrabel
Publi-T
Publipart
Freefloat
24,36%
33.03%
2.54%
40,07% (2)
Elia: A Single Economic Unit
Elia System Operator
Licensed System Operator
Network Owner
99.99%
Elia Asset(1)
24.5%
60%
100%
100%
HGRT
12/2001
Belpex
07/07/2005
Elia Re
05/02/2002
BEL Engineering
26/12/2003
2007 also saw the realisation of the Pax Electrica II leading to a decrease of the shareholdership of Electrabel below 25%.
The selling of 3% of the shares from Electrabel to Publi-T gives the new shareholdership of Elia with 33,03% for Publi-T and 24,26% for Electrabel.
The free-float increased with 0,7% as a result of the employee offering.
In December, Elia decided to participate to the equity increase of the Holding of the Transmission System Operators owned with RTE and Tennet with the objective to increase the participation of HGRT in Powernext ; this in the context of the evolution towards a regional market in Central-West-Europe.
I will now give the word to Jan for the consolidated results of 2007.
Double structure but single economic unit
HGRT is holding company for Powernext
Other HGRT shareholders are TenneT and RTE
Elia Re has been created in order to minimise risks
Bel Engineering bought in December 2003, consolidated in 2004
17% Shareholder of French-based electricity power exchange Powernext
Foreseen to increase participation to 51%
Belgian power exchange
Captive reinsurance company
Engineering consultancy firm mainly involved in the design and project management of electricity network-related infrastructure
(1) 1 share Publi-T, 1 share Electrabel (2) Includes 0,54% Employee shareholdership (estimate)

18. Agenda
Summary
Highlights 2007
Financials 2007
Outlook 2008

19. Income statement (€ million) Balance sheet (€ million)
Overview of Key IFRS Figures
Change
Income statement (€ million)
2007
2006
In %
Consolidated turnover
731,7
711,5
2,8%
EBITDA (1)
308,5
292,6
5,5%
Operating result (EBIT)
214,7
204,0
5,2%
Financial result
(104,0)
(98,3)
5,8%
Taxes
(32,9)
(29,8)
10,4%
Consolidated net profit
77,6
75,9
2,2%
Net profit per share (€)
1,62
1,58
2,5%
Dividend per share (€)
1,30
1,28
1,6%
Balance sheet (€ million)
31/12/2007
31/12/2006
Total assets
3.977,9
3.898,1
2,0%
Equity
1.339,9
1.308,6
2,4%
Net debt
2.140,0
2.074,9
3,1%
Equity per share (€)
27,88
27,32
Total number of shares (end of period)
0,3%
(1) EBITDA = EBIT + depreciation + changes in provisions
IFRS
This slide gives an overview of our key financial figures based on IFRS rules.
Turnover increased with 3%, due to a number of reasons which I will explain later during the presentation when we detail de evolution of the tariff & non-tariff revenues.
EBIT & EBITDA increased with more than 5% as Elia was allowed to recuperate in the turnover from prior surpluses two one-off decisions :
Firstly the positive ruling by the Court of Appeal on the bonus malus decision 2005 (€4,9m) and
Secondly the settlement with the regulator for the bonus malus decision 2006 (€ 4,5m).
Financial result increased with 5% due to higher interest rates in 2007 (average of 5% compared to 4,8% in 2006) and an increase of € 65m in our net financial debt position (about 25% of our debt is financed with variable interest rates).
Taxes increased with 10% as a result of the small increase in our effective tax rate from 28,2% in 2006 to 29,7% in The tax rate in 2006 was exceptionally low due to some small corrections relating to the past.
The net profit & net profit increased with around 2% compared to 2006.
The Board of Directors decided to propose to the general shareholders meeting to increase the dividend to € 1.30 per share.
No specific remarks regarding our balance sheet.
The number of shares increased slightly due to a capital increase, only for our personnel, from June 2007.

20. 2007 Profit and Loss Bottom-up Approach of Elia’s P&L in 2007 (EUR m)
Determination of net profit
Non tariff
Shortfall
(1)
(2)
(3)
Costs
Tariff
The left part of the slide gives the breakdown of our 2007 P/L in the known 5 categories : net profit and the costs on one side and the tariff and non-tariff revenues on the other side. The difference in 2007 between forecasts & reality was, for the first time, a small shortfall of € 9,9m due to externalities.
On the right side, the calculation of our regulated net profit is EUR 67,8m for 2007.
The difference of EUR 9,8m with the net profit is due to the IFRS corrections, explained on the next slide, and the consolidation of Belpex/HGRT (€260,000). Belpex is fully consolidated and HGRT is consolidated according to the equity method.
Our regulated net profit of EUR 67.8m consist of 4 elements:
·        Remuneration of the reference equity +70m
·        Correction for the D-factor +0,9m
·        Deduction of the over-depreciation m (till Q3 2012)
·        Appeal BM 05 & settlement BM 06 +5m
The court of appeal of Brussels decided that the regulator could not reject reasonable sponsoring expenses as well as some provisions for environmental issues and also confirmed that our LT loan of € 250 could not be re-qualified as ST and could not be deducted from our RAB.
This decision caused an extra profit before taxes of € 4,9m. Based on the court decision, the regulator agreed with Elia to settle the BM 06 resulting in another €4,5m before taxes (change from € -1,8m to € +2,7m).
Both decisions had a net profit impact of + € 5m
Net profit
OLO of 3,423%; Beta of 1,033 and a risk premium of 2,54%
Av. Equity =1.303,1 and Av. Assets = 3.842,8
(3) OLO of 3,423%; deviation rate of 70bp and tax rate of 33.99%

21. Reconciliation Be GAAP - IFRS
IFRS Impact on Equity and Net Profit for year ending 31 December 2007
Net Profit
(1)
On this slide, you see the difference on the shareholders’ equity and on the net profit between Belgian GAAP and IFRS
On the net profit level, there is a positive difference of EUR 9.6m, mainly caused by a reversal of the employee benefits provision based on the yearly update by the actuary and the implementation of a new collective agreement (29/11/07). This CA enabled retirees to opt for the receipts of a one-off payment instead of annual pensions, thereby lowering the company’s overall retirement obligations with € 17,8m. As a big part of it, namely € 13m, was already booked in the regulatory assets, this amount had to be reversed as well.
This € 13m was booked as a negative “other non tariff revenue” (see further in the presentation).
In addition, we had to capitalise investment in software for a total amount of EUR 4.8m.
On the equity level, you see the overall small negative impact of EUR 1,9m.
This small difference is mainly due to the set-up of employee benefits provisions which are not booked in Belgian GAAP. This is partially compensated by the set-up of a regulatory asset as the company has an agreement with the regulator to recover these costs in future tariffs. The remaining difference for these kind of benefits will also be passed through via the operational costs in future tariffs.
Other elements in the reconciliation mainly relates to the reversal of provisions Elia Re (12,2) and the capitalisation of software (13,7).
The category “others” contain the reversal of goodwill Bel Engineering (5,6), differences in valuation of inventories(3,7) and the impact of IAS 32/39 on the interest rate swaps (€7,1m).
Based on our current knowledge, we expect the same small differences between Belgian GAAP and IFRS in the future
Equity
(1) Mainly relates to Inventory valuation (€3,7m), goodwill Bel engineering (€ 5,6m) and IAS 32/39 on the interest rate swaps (€7,1m)

22. Regulated Asset Base 2007 Evolution 2007 RAB Average RAB 3.442 3.512
(1)
This slide shows the RAB evolution during 2007.
The RAB increased significantly in 2007.
The total capital expenditures of EUR 142m,, were partly offset by depreciations for EUR 90m and divestments (EUR 9m, of which € 6m decommissioning). In addition, the working capital requirements increased with €98m mainly due to the major reversal of surpluses of previous years.
The capex amount can be split up as follows:
·        Strengthening network for internal consumption EUR 73m (51%)
·        Interconnections EUR 8m (5%)
·        Maintenance & replacements EUR 41m (30%)
·        Generation localisation EUR 20m (14%)
The average RAB went up with EUR 70m
The changes in working capital are explained on the next slide.
Average RAB
3.442
3.512
Includes € 6 million goodwill decommissioning

23. Working Capital Requirements 2007
Changes in Working Capital Requirements (EUR m) (1)
2007
The working capital requirements increased with EUR 98m split up as follows:
·      Increase in stocks and trade debtors EUR +31,4m
·      Decrease in deferred charges and accrued income EUR -46,5m
·      Decrease in suppliers and other trade creditors EUR +21m
·      Decrease in accrued charges and deferred income EUR +81.9m
(mainly the reversal of the surplus of previous years €86m)
Shortage 2007 (deferred income) EUR +10m
Inventory & trade debtors <1 year
Deferred charges and accrued income
Trade creditors & others
Accrued charges & deferred income
Shortfall
Total Change in WCR
(1) Based on Belgian GAAP accounts

24. Breakdown Costs Total costs increased with € 18,4m or 2,9%
Evolution of Costs between 2007 and 2006 (EUR m)
654,0
635,6
+0,7%
Ancillary services
(reserve energy)
+3,2%
Raw materials, Services & Other goods
-2,1%
Personnel Expenses
Others
Total costs increased with € 18,4m or 2,9%
Total depreciation charges increased with 6% due to an increase in depreciation on new and recent investments as well as depreciations on capitalized hardware and software under IFRS.
Financial result increased with 5,8% due to an increase of the interest rates in 2007 (av.4,23% 0LO 10-year) compared to 2006 (av 3,8%, OLO 10-year). Roughly 25% of our debt is financed with variable interest rates.
Average cost of debt increased from 4,8% in 2006 to 5% in 2007.
As already said, taxes increased with 10% as a result of the small increase in our effective tax rate from 28,2% in 2006 to 29,7% in The tax rate in 2006 was exceptionally low due to some small corrections relating to the past.
Regarding the update on our tax issue, tax authorities claimed €93,6m (without notice of fraud) which was booked as debt. This was compensated by a receivable of the same amount as agreed with auditor & external experts. Elia, in conjunction with the CREG, decided to appeal against this decision.
+6,0%
Depreciation
+5,8%
Financial charges
+10,4%
(1)
Taxes
Tax authorities claimed € 93,6m (without notice of fraud) which was booked as debt. This was compensated by a receivable of the
same amount as agreed with external experts. Elia, in conjunction with the CREG, decided to appeal against this decision.

25. Non - Tariff Revenues
Breakdown of Non – Tariff Revenues in 2007 and 2006 (EUR m)
94,3
68,1
International revenues (due to TLC efficiency)
-31,2%
Fixed assets own construction capitalised
Overall, Non-tariff revenues decreased significantly compared to 2006, mainly due to the drop in revenues from capacity auctioning at our borders.
The international revenues decreased with 31%
to € 43,1m due to
Launch of Belpex at the end of 2006
Simultaneous replacement of explicit daily auctions by implicit daily auctions
Increase in capacity at our borders with reduced congestion as a consequence
It is worthwhile noticing that these revenues have no impact on the fair profit for our shareholders but will translate in less surplus to be deducted from our charges in establishing the transmission tariffs. In other words, less revenues from capacity auctionning lead to higher tariffs.
Capitalised fixed assets own construction increased considerably due to more external services for investments projects through Bel Engineering
Telecom services of € 9,4m were 10% better than in 2006 (€8,3m) while third party services doubled from € 1,4m to € 3m.
The difference in “others” is completely due to a decrease in the pension amount to be reclaimed from the future tariffs (€ 13m). A new collective agreement concluded on November 29, 2007 enabled retirees to opt for the receipt of a one-off payment instead of annual pensions, thereby lowering the company’s overall retirement obligations.
+36,2%
Telecom & third party services
+26,8%
Others
(1)
-3,1
In 2007 « Others » includes € -13m reversal of the regulatory asset as a result of a new collective agreement (one-off payment)

26. Tariff Revenues Breakdown of Tariff Revenues in 2007 and 2006 (EUR m)
653,6
677,2
9,9%
Connection tariffs
-4,3%
Tariffs for ancillary services
71,9%
Tariffs due to previous surpluses
Tariffs decrease for grid use
(due to weather conditions and increased co-generation and renewable energy services directly injected on DSO grid)
-12,2%
- Connection tariffs increased with almost 10% due to a number of new connections from big industrial clients.
The decrease in tariffs for ancillary services is mainly due to lower charges.
The jump (+72%) in tariffs out of previous surpluses is based on a decision by the regulator and explains why our tariffs were especially low in 2007.
It is also the major reason why the transmission tariffs have increased in the period compared to 2007.
The tariff for grid use remain decreased with 12% due to the introduction of lower tariffs but also because less electricity was taken of the Elia grid than in 2006 as a result of the milder weather and the local production at industrial clients and of renewables. (As Daniel explained to you).
On the bottom of the slide, you find from what elements the surplus in 2006 and the shortage of 2007 was originated.
From an operational point of view, the difference between the budget and the actual figures was limited to 0,5 mio.
This demonstrates, as pointed out by Daniel, that we are able to forecast and to manage accurately our costs.
The other 2 extraordinary adjustments I already explained at the slide of the key figures.
60,0
9,9
0,5 Operational
4,9 Appeal BM 2005
4,5 Settlement BM 2006
13,3 Shortfall on costs
46,7 Surplus revenues (tariff & non-tariff)

27. Overview treatment of surpluses
Overview of allocation and use of total surpluses
Here you find a detailed overview of the surpluses built up in the previsous years and the way they were allocated by the regulator to be deducted from future tariffs.
From 2003 till 2007, a surplus of more than EUR 350m in total has been observed, mainly due to externalities.
The total 2003 surplus of € 137,8m was fully used in 2004, 2005, 2006 and 2007 to reduce the tariffs.
The 2004 surplus of € 122,4m was for EUR 51,1m used in 2005, 2006 and 2007 to reduce the tariffs. The remaining part of € 71,3m was re-allocated by the regulator to reduce tariffs in 2008 to 2011.
The surplus of 2005 was completely used in 2007 to reduce tariffs.
The remaining part of the 2004 surplus (€ 71,3m), together with the remaining part of the 2006 surplus (€ 52,4m) was used by the regulator to reduce tariffs in the period for a total amount of € 123,7m.
The regulator re-allocated the € 123,7m as follows : € 20,9m in 2008, €22,8m in 2009, € 34m in 2010 and € 46m in The new way of allocation was needed in order to realize flat tariffs for the period
The shortage of this year, EUR 9,9m still has to be allocated by the CREG in the next regulatory period.
(1)
(1) To be allocated by CREG in the next regulatory period

28. Financial Debt Position
Elia benefits from a strong credit rating
Standard & Poor’s rating:
Long Term: A-
Outlook: Stable
2.190,3
2.119,8
60,0
40,0
The financial debt position of Elia remained rather stable in 2007
Our leverage increased slightly from 61,9% at the end of 2006 to 62,1% at the end of 2007.
Our total debt position increased in 2007 with about € 70m from € 2120m to € 2190m.
We increased our LT loan from € 200m to € 250m and we ordered another € 20m from our € 125m credit line with the European Investment Bank. The remaining part of this credit line is € 65m.
In 2009 we will refinance one of the shareholders’loans of € 387,7m which is due in 2009.
We will start shortly the investigating for refinancing this loan.
Our S&P rating was confirmed in July 2007.
Due to the increase of the interest rates, the average cost of debt increased from 4,8% in 2006 to 5% in 2007 as only 73,2% of our total debt position is fixed.
(1)
In 2009, a shareholders’ loan of € 387,7m has to be repaid. Refinancing is currently investigated and will depend on the market conditions at that time

29. Dividend Policy Increase in dividend to € 1,30 per share
Elia’s dividend policy ensures a steady dividend
(1)
For 2007 We maintained our pay-out ratio of around 90% (Be GAAP) resulting in a gross dividend of € 1.30 per share and a yield of 4,6% at a share price of € 28.
The management team and the Board of Directors are aiming to pursue its dividend policy, taking into account that the goodwill decommissioning has to be reserved for financing new investments.  
Increase in dividend to € 1,30 per share
Pay-out ratio over 2007 Belgian Gaap result is 91,8%
(80,5% under IFRS)
(1) Contains exceptional dividend of EUR 0,88

30. Agenda
Summary
Highlights 2007
Financials 2007
Outlook 2008

31. Update on legal & regulatory aspects
Law
29/4/99
4-year tariff mechanism
Concept of return on RAB and incentivisation
Embedded financial debt
Corporate governance principles
4-year tariff starts on January 1, 2008
Return based on European benchmark
Indexing formulae for controllable costs
Reform of federal regulator
June 1st, 2005
July 20th, 2006
New
Royal Decrees
Determination of total revenues/fair remuneration
Determination of RAB & its evolution
Tariff structure (numbers & composition)
Clarification e.g. controllable / non-controllable costs
Allocation of balances between real & budgeted revenues/costs
Parameters of incentivisation
June 8th, 2007
This slide shows the chronology of the changes in the law leading, among other things, to the new regulation with a 4 year tariffs.
I will not describe these steps in detail. Important it to notice that for the first time since our designation as TSO, our tariff proposal was approved on December 14th by the Federal regulator.
A previous major step was the publication, 29 June, of the royal decree establishing the principles of the 4 year tariff regulation.
It is also worth noticing that the royal decree determining the X factor, meaning the efficiency increase imposed to Elia from 2008 to 2011 included, was published last Monday.
In other words, it means that the parameters determining the regulation for the next 4 years are available and provide a stable outlook for the company.
December 18th, 2007
CREG
Admission first tariff proposal by Elia June 29th, 2007
Admission adjusted tariff proposal by Elia November 26th, 2007
Approval of 4-year tariffs December 14th, 2007

32. Most important changes
4-year tariffs from 01/01/2008
Split between controllable & non-controllable costs & revenues
Clarification on definitions :
Working capital requirements
D-factor : Equity / RAB
Reporting to regulator : semestrial
Balance between real and budgeted non-controllable costs to be allocated by council of ministers
What are the main changes?
First, the costs are split between “controllable” and “non-controllable” costs.
“Controllable” costs are managed by the company, such as for example: personal cost, expenses for goods and services but also non-tariff revenues such as telecoms.
“Non-controllable” costs are externalities to the company, although it does not mean that the management has the role to minimise these charges to the benefit of our customers.
Also, the royal decree clarified definitions which have been a major source of disagreement with the regulator.
First, the working capital requirement confirmed the concept of LT loans.
Second, the D factor has to be calculated as Equity divided by RAB.
Both elements are in line with the position defended by Elia.

33. 4-year tariff system… PAST FUTURE
Implementation of concept “controllable – non controllable” costs & revenues
PAST
FUTURE
Non
Tariff NC
Non
Tariff C
(2)
Non Controllable(NC) Costs
Costs
Tariff
Tariff
Controllable(C) Costs
(1)
Net profit
Net profit
(1) Mainly consist of purchases of materials, services and other goods & remuneration except the ancillary
services & pension costs for retired employees
(2) Mainly consist of Telecom services, Third party services, surplus value on sale fixed assets and insurance
claims

34. C NC …with netting of costs & revenues
Reclassify costs, revenues => controllable & non-controllable NC
Non
Tariff C
Tariff
Net profit
Non Controllable(NC) Costs
(2) C
Tariff
(1) NC
Controllable(C) Costs
As already said, the costs and the revenues will be split up between controllable costs & revenues and non-controllable costs & revenues
The controllable costs mainly consist of purchases of materials, services & other goods (but not the ancillary services) and personnel expenses excluding costs for retired employees.
The controllable revenues mainly consist of telecom services, third party services, surplus values on sale of fixed assets and insurance claims.
The net amount of these controllable costs and revenues were approved by the regulator for 2008 and will evolve thereafter according to the CPI-X system which I will explain later. The regulator only can examine and reject the cross subsidisation between controllable and non-controllable elements.
All the rest is non controllable and this will be controlled by the regulator as in the past.
Net profit
(1) Mainly consist of purchases of materials, services and other goods & remuneration except the ancillary
services & pension costs for retired employees
(2) Mainly consist of Telecom services, Third party services, surplus value on sale fixed assets and insurance
claims

35. Incentivisation on controllable costs
Composition of future net profit
Fair remuneration
Equity remuneration based on formula
Deduction over-depreciation of the past (€ 8,2m net) till Q3 2012
Decommissioning
Goodwill from decommissioning passed into tariffs
Extra profit reserved for financing investments
Incentivisation on controllable costs
Ceiling set at same amount as efficiency gain (X-factor)
In the future, Elia’s net profit will consist of three elements :
Fair remuneration based on a formula as in the past with some changes in the formula and including the two corrections, one for the D-factor and one for the over-depreciation
The decommissioning (part of the goodwill) resulting from divestments of fixed assets and remunerated in the future which was not the case in the past. Profit resulting from this decommissioning must be used to finance future investments
The outperformance (Y) the company can realise on the imposed cost savings (X) by the regulator. This outperformance is limited to the total imposed savings. You can see it as a one on one relationship. One euro realised cost saving allows one euro outperformance.

36. The FORMULA : (art.8 §2 R.D. June 8th, 2007)
1. Fair remuneration
The FORMULA : (art.8 §2 R.D. June 8th, 2007)
33% * RAB * [ OLO(2) + (risk premium * Beta) ]
+ (Equity/RAB(1) - 33%) * RAB * (OLO(2) + 70 bp)
(1) In case (Equity / RAB) < 33% than fair remuneration equals
33% * RAB * [ OLO + (risk premium * Beta) ]
(2) OLO = Belgian 10 year bund
Regarding the fair remuneration. Compared to the old formula, following changes occur :
33% * RAB * (OLOn-2 + beta ELB recomputed * risk premium) MINUS
((1-D)-67%) * RAB * (1-t) * (OLOn bp)
OLO is the average daily OLO of the year and not the OLO anymore of two years ago
Beta is the ELia market beta (as you can find it on Bloomberg) over 7 years and not the ELB beta (a transitory period however will be needed as there is only a Elia market beta from 2006 onwards)
The D factor is computed as Equity over RAB instead of Equity over Total balance sheet as it was in the past
The D-facor correction can only be positive; not negative anymore. This is probably a mistake in the RD as this implies that in theory Elia should try to stay below 33% equity in order to increase its ROE. We will see and we are curious how the regulator will react once Elia is below 33% equity.
The deviation from the 33% equity is remunerated at a rate of OLO+ 70bp and therefore not after taxes anymore as it was in the past.

37. Fair remuneration (Equity remuneration)
Equity divided in two parts:
part #1 : till 33% of RAB
part #2 : from 33% of RAB till real Equity Value
Fair remuneration on Equity:
part #1 : Belgian 10year bund + (eta  risk premium)
with risk premium = 3,5 % & eta = minimum 0,3
part #2 : Belgian 10year bund + 70 bp
Based on the previous slide, it is clear again that Elia has an equity remuneration and not a WACC on RAB remuneration as most of our colleagues.
So the equity will be devided in two parts : part 1 is the equity equal to 33% of the RAB. Part 2 is the equity above 33% of the RAB.
The first part is remunerated at a rate of OLO + 3,5% which is a fixed risk premium (was 2,54 % in the past) multiplied by the Elia market beta of by 0,3 in case the Elia market beta is below 0,3. I come back on the beta in the next slide. In the worst case the beta * risk premium is 1,05% (3,5% * 0,3).
The second part of the equity (in case there is) will be remunerated at a rate of OLO + 70 bp. So the difference in remuneration between the first equity part (1,05% in the worst case) and the second equity part (70 bp) becomes very small (only 35 bp).
Note : Real Belgian 10year bund (daily average) is computed
every year and ex-post

38. Fair remuneration (Determination of eta)
Beta is computed for a period of 7 years
Elia Beta OR minimum of 0.3 is applicable from 2012 onwards
Transitory period for Beta calculation for period 2008 till 2011
Weight of Electrabel beta becomes less important over time
Weight of Elia beta becomes more important over time 1 2 3 4 5 6 7
eta 2008
2002
2003
2004
2005
2006
2007
2008
eta 2009
2009
eta 2010
2010
eta 2011
2011
ELECTRABEL
ELIA
Regarding the beta, a transitory period will be needed as the market beta of Elia, on a calendar basis, is only available from 2006 onwards
Therefore, for the calculation of the beta of 2008, we will have to take the ELB beta for the period (4 years) which is 0,4483 and the market beta for ELia for the period This is unknown yet but the Elia beta for the periode 2006-feb is 0,114. Weighted for their years, this would give a beta of 0,305 for 2008, just a little bit higher than the absolute minimum of 0,3.
For the years thereafter, the ELB beta becomes less important and the Elia beta more important. Note that the ELB is not recomputed anymore for the financial structure of Elia

39. 2. Decommissioning (goodwill remuneration)
€ 1,7 billion goodwill is allocated to fixed assets
In case of decommissioning, relating goodwill is remunerated through the tariffs
No amortization in profit and loss accounts (generates extra EBIT & net profit)
Taxes due to extra EBIT covered by tariffs
Net profit from decommissioning to be reserved for financing investments and equity value
All goodwill is allocated to all fixed assets as of December 31, 2007 based on an allocation key approved by regulator
The relating goodwill, in case a fixed asset is decommissioned, will be deducted from the RAB and put into the tariffs and remunerated
The goodwill is however not amortized from an accounting point of view (NO COST) in profit and loss accounts
The additional sales from this goodwill remuneration will therefore lead to higher profit (on a after tax basis, a net profit basis)
This higher profit must be recomputed on a before tax basis by deviding goodwill amount with (1-tax rate of 33%)
All taxes are passed through into the tariffs
These additional taxes are remunerated as well, generates additional sales as well but have a relating cost => zero impact on net profit
CONCLUSION
€ X goodwill reduction of RAB due to decommissioning leads to € X extra net profit
Extra profit cannot be distributed as dividend to shareholders
Voici la répartition du goodwill (à fin 2007) :
Lignes aériennes           :  MEUR
Câbles souterrains        :  MEUR
Postes                         : 1107,0 MEUR
Autres                          : 0 MEUR
TOTAL MEUR

40. Decommissioning (Explanatory Example)
Fixed assets of € 2m net book value is decommissioned
Allocated goodwill to this fixed asset is € 3m
Impact on tariffs (Additional costs to be remunerated)
Exceptional depreciation € 2m
Goodwill decommissioning € 3m
Additional taxes € 1,5 m (€3m/(1-33%))
Total € 6,5m
Impact on revenues
€ 6,5m as depreciation, taxes and goodwill are all remunerated
Impact on costs
€ 2m exceptional depreciation
€ 1,5m additional taxes
Impact on net profit
€ 3m from goodwill decommissioning
This profit has to be reserved in equity as to finance investments
In case all our fixed assets are divested or replaced, we will still have a goodwill of € 1,7 bn in our balance sheet but on the other hand, we will have an equity of about € 3,1 bn (about € 65 per share).

41. X factor (controllable costs)
270,3
€ m
Budget including CPI
265,3
260,6
-8m -X
= -25m in total
-7m
255,3
(1)
–6m
262,3
CPI-X
258,3
-4m
254,6
251,3
CC approved by
regulator includes –X
255,3
2008
2009
2010
2011
Regulator approved € 251,3m net controllable costs for (255,3m net CC minus X = € 4m cost savings)
Net controllable costs will evolve in with CPI-X
Fixed cost savings in € (X) determined by R.D. (Dec 18th, 2007)
Total outperformance (Y) agreed with regulator as max X
Controllable non-tariff revenues

42. Incentivisation (controllable costs)
EX-ANTE
EX-POST
€ m
Recompute for inflation
(non controllable)
CC (1)
Incentive
Y = max (X)
CC real
The new regulation mechanism includes also two new elements wich are:
The X factor aiming at inducing an permanent effort of Elia towards achieving a higher efficiency despite being a monopole
An Y factor aiming at inducing the company to outperform the efficiency gain imposed by the X factor.
The agreement with the regulator translated into
First, the determination of a given X for each year to be deducted from the controllable costs, and
Second, a ceiling to be applied to the Y in such way that, should Elia obtain efficiency gains higher that twice the value of X, this cost reduction will be returned to the consumers during the next regulation period of 4 years.
In other words, the maximum incentive that can be retained for the company is equal to the value of X for the whole period of 4 years.
The royal decree that was published last Monday, determines the X as follows:
NCC (non-controllable costs)
After deduction of X savings by regulator for the period on controllable costs

43. Summary of changes New system Old system 1) Fair remuneration
Belgian 10-year bund
Year X
Year X-2
Risk premium
3,50%
2,54%
Beta
Elia share with min. 0.3
ELB share (recalculated)
Remun. Equity > 33%
10year bund + 70bp
(10year bund + 70bp) * (1-t)
2) Definitions
D-factor
Equity / RAB
Equity / Balance sheet
Working capital Req.
Excluding Fin. Debt
Including short term Fin. Debt
Deducted from RAB
Included in tariffs
Not included in tariffs
4) Incentivisation on
controllable costs
3) Decommissioning
5) Balance of non-
Allocated by
Council of Ministers
Allocated by CREG
Max. €25m period 08-11
Bonus Malus
The major changes coming into life with the new regulation are summarised on this slide.
The translation of these changes in the agreed budget for 2008 will be presented based on the approved evolution of the RAB as seen on the next slide.

44. Outlook 2008: RAB Evolution 2008 RAB as approved by CREG 3.653
(1)
We intend to invest EUR161m, excluding acquisitions, mainly driven by internal consumption (€ 73m) as well as replacement capex (€ 56m).
Depreciations will be around EUR 90m and divestments/ decommissioning around EUR 17m.
This includes € 14,2m decommissioning which will be reserved to finance new investments as described earlier.
The change in working capital is EUR 31m positive mainly due to the 21m EUR surpluses of the past that will be given back in 2008.
On this basis, the fair profit has been calculated so as to determine the transmission tariffs.
Average RAB
3.501
3.611
(1) Contains € 14,2m of goodwill reduction due to decommissioning

45. Outlook 2008: Fair remuneration
Determination of net profit 2008 by the regulator (Belgian GAAP)
CREG
Average RAB 2008
3.611
Reference equity (33%)
1.192
Cost of equity
5,17%
Equity reference remuneration (A)
61,6
Av. equity / Av. RAB
36,45%
Deviation on reference equity
3,45%
Equity deviation remuneration
4,63%
D-factor (B)
5,8
Over-depreciation (C)
-8,2
Fair remuneration (A+B+C)
59,2
Goodwill decommissioning
14,2
Controllable cost incentive
0,0
Net profit as set by regulator
73,4
(3)
(1)
(3)
(3)
(3)
(2)
=(1)
Not available for
profit distribution;
€14,2 is the estimated
yearly amount for the
period
Average RAB will increase again with € 110m, from € 3501m to € 3611m.
The cost of equity is computed based on an average OLO of 3,93%. At the end of 2008 we have to replace that % with the real average daily OLO of 2008.
From 2008 onwards, the D-factor is computed as Av Eq/ Av RAB and remunerated at a higher rate (OLO + 70bp). This will have a positive impact of € 5,8m.
The correction for the over-depreciation before the setup of Elia remains till Q
Based on this 3 elements and according to the budget figures, this gives a net profit of € 59m.
Thereby, we expect a goodwill decommissioning of € 14m and for reasons of prudence we did not include any out-performance on the controllable costs.
We aim at achieving an out-performance in line with the X cost saving of € 4m.
In case the average OLO 2008 would be 0,5% higher than the budgeted one of 3,93%, than the net profit would increase with another € 6m.
But of course, the profit at the end of the year will take into account the observed OLO, beta, RAB, equity and decommissioning following the new regulation.
Let me now, move to a short overview of the operational objectives for 2008 and beyond.
(3)
(2)
(3)
(3) = Y
(=1+2+3)
OLO of 3,9278%; Beta of 0,3542 and a risk premium of 3,5%
OLO of 3,9278% and deviation rate of 70bp
To be recomputed ex-post based on real OLO, real beta, real RAB & Equity, real decommissioning and real controllable cost savings

46. Outlook 2008-2011: CAPEX 44% 48% CAPEX 2008-2011 CAPEX 2008 € 615 m
Breakdown CAPEX
CAPEX
€ 615 m
CAPEX 2008
€ 161m
44%
48%
Regarding our capex plan for the future, we intend to invest € 615m in the period or about € 154m a year.
We plan to invest € 161m in 2008.
About 33 to 35% of the investments is for replacements so as to maintain and even improve where necessary the high reliability offered to our customers and the community.
About 46 to 49% of the capex will be allocated to investments for strengthening and upgrade our network to cope with the increasing electricity demand/consumption.
A little bit more than 12% of the capex is foreseen to invest in our interconnection capacity with our F and NL.
This does not include any capex relating to new interconnections between Belgium and Luxembourg, Germany or the UK.
The remaining part, 5 to 7%, relates to connect our network with new production capacity of new electricity companies coming to Belgium as well as connections to new production facilities at the premises of industrial clients.
Of the 2008 capex, important investments are foreseen for the Antwerp port & region (BRABO project), a 150 kV cable between Battice & Eupen and important replacements in the Brussels region (mainly Elsene).
Of the € 800m capex plan presented for the period , we will execute, based on the current plans, € 782m.
This includes the IMEA acquisition of € 25m.
Excluding that amount, we expect to be € 40m short of our expectations, or 5%, mentioned during the IPO mostly due to
A slow down in the demand from our network, meaning that some investments were delayed;
The difficulties observed in obtained the authorisation to build and operate new infrastructures due to environmental concerns as well as the NIMBY phenomenon.
Our capex projections do not include any acquisitions.
Other projects and realisations can be seen on the next slide.
Replacements
Driven by interconnections with neighbours
Driven by internal consumption
Driven by import levels & generation localisation

47. New Projects, Services, Activities
Major projects in study phase
Enforcement of Antwerp port & region
380 kV line towards Belgian coast (off-shore wind energy)
Interconnections with UK and Germany
Services
to be launched in 2008
Intraday allocation mechanism at border with NL
Belpex : Continuous DAM & Intraday market
Increased participation in Powernext through HGRT
Contemplated for 2009 and beyond
Regional market between Benelux – Germany – France
Activities
pursuing « operational excellence »
first activities (consulting) abroad
A FAIRE CE SOIR !!

48. Questions & Answers Investors Relations – Contact details Bert Maes
Tel: + 32 (0)2/
Mail:
Website:

49. FY 2007 Consolidated results Financial impact new regulation
Analyst meeting
February 15th, 2008