annual repor t annual report

Transcripción

AN N UAL R EPORT
S A N TA R O S A 7 6 , S A N T I A G O , C H I L E I P H O N E S ( 5 6 2 ) 3 5 3 4 4 0 0 , 3 7 8 4 4 0 0 I w w w . e n e r s i s . c l
ANNUAL REPORT
Santiago Stock Exchange
New York Stock Exchange
Madrid Stock Exchange
ENERSIS
ENI
XENI
Enersis S.A. was initially constituted with the name
Compañía Metropolitana de Distribución Eléctrica S.A., but
changed its name to Enersis S.A. on August 1, 1988. Its
capital is ThCh$2,824,882,834 divided into 32,651,166,465
shares.
Its shares are quoted in the Chilean stock
exchanges, on the New York Stock Exchange in the
form of American Depositary Receipts (ADRs), and the
Latin American Securities Exchange of the Madrid Stock
Exchange (Latibex).
Its principal business is the exploitation,
development, operation, generation, distribution,
transmission, transformation and/or sale of energy in
any of its forms or nature, directly or through other
companies, plus activities in telecommunications and
the provision of engineering advisory services in Chile
and abroad, and to invest and manage its investments in
subsidiary and affiliate companies.
Its total assets amount to ThCh$14,399,627,877 as
of December 31, 2008.
Enersis controls and manages a group of companies
that operate in the electricity markets of 5 countries
in Latin America. During 2008, it produced a net
income of ThCh$570,883,101 and operating income of
ThCh$1,978,797,458.
As of the end of 2008, it employed 12,733 people
directly through its subsidiary companies in the region.
ENERSIS MANAGEMENT
PHONE (56-2) 353 4610
INVESTOR AND SHAREHOLDER
RELATIONS
REGIONAL ACCOUNTING OFFICER
CHIEF INVESTMENTS AND RISKS OFFICER
FERNANDO ISAC COMAS
RICARDO ALVIAL MUÑOZ
HUMAN RESOURCES OFFICER
FRANCISCO SILVA BAFALLUY
CHAIRMAN
PABLO YRARRÁZAVAL VALDÉS
PHONE (56-2) 353 4663
PHONE (56-2) 353 4685
PHONE (56-2) 353 4682
REGIONAL CHIEF FINANCIAL OFFICER
CITIBANK NY
CHIEF EXECUTIVE OFFICER
IGNACIO ANTOÑANZAS ALVEAR
PHONE (56-2) 353 4510
COMMUNICATION OFFICER
ALFREDO ERGAS SEGAL
PHONE (56-2) 630 9130
JOSÉ LUIS DOMÍNGUEZ COVARRUBIAS
PHONE (56-2) 353 4666
AUDITING OFFICER
ANTONIO ZORRILLA ORTEGA
REGIONAL PLANNING
AND CONTROL OFFICER
RAMIRO ALFONSÍN BALZA
PHONE (56-2) 353 4684
PHONE (56-2) 353 4647
GENERAL COUNSEL
DOMINGO VALDÉS PRIETO
PHONE (56-2) 353 4631
RICARDO SZLEZINGER
PHONE (1-212) 816 6852
SANTANDER CENTRAL HISPANO INVESTMENT
ENRIQUE ROMERO
PHONE (34-91) 289 3943
[ Contents ]
CHAIRMAN’S LETTER
2
50
RISK FACTORS
8
54 DESCRIPTION OF ELECTRICITY BUSINESS BY COUNTRY
COMPANY IDENTIFICATION
12
78 OTHER BUSINESSES
OWNERSHIP AND CONTROL
16
86 SUSTAINABILITY
SHARE TRANSACTIONS
20
94 IDENTIFICATION OF THE SUBSIDIARY AND ASSOCIATE COMPANIES
DIVIDEND POLICY 2008
24
112 DECLARATION OF RESPONSIBILITY
INVESTMENT AND FINANCING POLICY 2008
26
114 CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT AND PERSONNEL
30
224 UNCONSOLIDATED FINANCIAL STATEMENTS
THE COMPANY’S BUSINESSES
40
256 FINANCIAL STATEMENTS OF THE SUBSIDIARIES
HIGHLIGHTS OF 2008
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ANNUAL REPORT
CHAIRMAN’S LETTER
ANNUAL REPORT
CHAIRMAN’S LETTER
In a year characterized by the real risk of suffering
electricity rationing in Chile’s central zone, Enersis and
its subsidiaries Endesa Chile and Chilectra took the
actions necessary for mitigating this risk and working
in cooperation with the authority with the objective of
seeking and designing suitable solutions for managing
this delicate situation.
We thus confirmed the position of leadership and
commitment that we have in the region, and especially
with Chile, ratifying our belief in alternatives that
contribute to guaranteeing electricity supplies in the
five countries where we operate (Argentina, Brazil,
Chile, Colombia and Peru).
We have the financial strength and necessary assets
for assuming this responsibility and continuing forward
Dear Shareholder,
as the leading electricity company in Latin America.
As Chairman of the Board of Enersis, I have pleasure
RESULTS
in presenting to you the Annual Report 2008 which
summarizes the company ’s ac tions in both the
Thanks to the diversified asset portfolio that we manage,
Generation and Transmission businesses and in
by having a presence in the electricity Generation,
electricity Distribution, plus the series of advances we
Transmission and Distribution businesses, added to the
have achieved in Sustainability.
fact that we operate in five countries in Latin America
Before commenting on the principal financial and
which enables us to stabilize our operating cash flows,
management indicators, I wish to thank each one of
Enersis produced a net income of 570,883 million
you in the name of Enersis for the trust placed in the
Chilean pesos in 2008, which represented a growth of
business project that I preside.
178% over the previous year.
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At the operating level, revenues rose by 35%, ending
position and allowing 2008 to end with a healthy
Despite this tight energy scenario, and thanks to the
the year at 6,650,287 million Chilean pesos, increasing
liquidity position which may enable us to face new
measures taken by the government and the support of
our result by 45% to a total of 1,978,797 million Chilean
challenges and take advantage of growth opportunities
the private-sector companies, including Endesa Chile
pesos.
that may appear in the future.
and Chilectra, the crisis was overcome successfully with
This ratified the good progress of our businesses, a
situation confirmed by the 48% increase in operating
no cuts having to be made to the people.
CAPACITY AND CUSTOMERS
In the case of our generation subsidiary, this brought
forward the start-up of the San Isidro II combined-cycle
income of the Generation and Transmission segment
and the 43% rise in the Distribution segment, ending
By the end of 2008, our installed capacity in the region
plant, adding a total of 353 MW; it had already added
the year at 1,100,727 million Chilean pesos and 877,117
increased by 1.4% to 13,893 MW. Notable were the
248 MW in April 2007. During June, the Ojos de Agua,
million Chilean pesos respectively. Another element
start-ups of the San Isidro II combined-cycle and the Ojos
de 9 MW mini-hydroelectric plant started operating; this
that reflected the good performance for the year was
de Agua mini-hydroelectric plants, projects that added
capacity helped to meet the supply situation experienced
the company’s return on assets, which improved from
114 MW to Chile’s principal electricity grid (SIC).
by the central zone.
1.65% as of the end of 2007 to 3.96% as of the end
of 2008.
In the Distribution business, we added 443 thousand
Starting in March, Endesa Chile made its first offers
new customers, which equates to adding to our
in order to regulated customers could reduce their
The non-operating result produced a negative figure
operation a new mid-sized distribution company. In
consumption. This mechanism was channeled through
of 266,128 million Chilean pesos, which however was an
fact, our companies supplied electricity to 12.4 million
the electricity distributors which transferred the payment
improvement of 343,915 million Chilean pesos over the
customers, more than 45 million Latin American
for savings to the end users, and sought to reduce energy
loss of 610,043 million Chilean pesos in 2007.
residents.
demand and decrease the requests of the system.
SUPPLY
campaign for promoting the efficient use of energy
Chilectra, our distribution subsidiary, launched a
It should be mentioned that the large increase in net
income for 2008 was partly explained by accounting
and thus support and reinforce the savings campaign
effects and the appreciation of the currencies of the
introduced by the government in February 2008.
different countries where we operate with respect to the
2008 was not an easy year, considering the real risk
dollar, especially in Colombia and Brazil, a situation that
of a programmed rationing on the SIC, system that
All these actions were a reflection of a series of
will probably not be repeated in the coming years.
supplies over 90% of the Chileans. This was due to the
measures that the Enersis Group introduced and
While the accounting matter impacted positively, the
drought during the early months of the year, natural gas
carried out to reduce the risks of electricity rationing,
operation and management of the company’s businesses
restrictions and the blackout suffered by prevailing one
in collaboration with the Ministry of Energy and the
also did so, managing to maintain our solid financial
of the principal thermal plants in the grid.
National Energy Commission (CNE).
ANNUAL REPORT
CHAIRMAN’S LETTER
better job and training opportunities, a situation that
TRUST
OF ALL CHILEANS
In this summary, I would not wish to omit mentioning
In mid 2008, HidroAysén, the company in which Endesa
thanks to the development of trade and connectivity,
the financial crisis that affected and still affects the
Chile holds 51% of the share capital, submitted to the
will permit a greater integration of Aysén’s people with
economies of the world, a situation that nobody foresaw
relevant authority its Environmental Assessment Study
the rest of the country.
at the beginning of 2007 when the so-called sub-prime
(EAS) for the Aysén Hydroelectric project.
will translate into better living conditions. This, also
crisis exploded.
Enersis, as the controller of Endesa Chile, follows
PROJECTS
The lack of liquidity and confidence impacted our
the development of this project closely and in detail,
economy and will continue to do so to a greater or
knowing that its completion is of great importance for
In the business of Generation and in line with the
lesser degree depending on the productive sector in
Chile’s energy independence and growth.
commitment we assume of providing security of supply
which each company operates.
The five plants of HidroAysén will substitute fossil
in the countries where we operate, we submitted during
As Enersis Group, however, we think that the region is
fuels in generation, replacing at full capacity the emission
2008 the Environmental Impact Declaration (EID) for the
better prepared to face the current situation, especially
of 44 thousand tons daily of CO2, some 16 million tons
Canela II wind farm, and work also continued on the
Chile, which has a healthy macroeconomic position,
annually. This figure equates to the annual emission of
Bocamina II, Quintero Thermal Plant and GNL Quintero
a recognized institutional structure and consolidated
CO2 by the whole Chile vehicle park (excluding buses
Terminal projects. Progress was also made in the studies
capital markets.
and trucks).
for the Choshuenco, Neltume and Los Cóndores plants,
Despite the turbulences that affected the markets,
The project is designed to generate the least amount
the price of our shares in the local stock exchange rose
of environmental impact and, of all the energy production
all in Chile.
At the same time, we continue with the Santa Rosa
by 3% during 2008, ending the year at 165 Chilean
forms in Chile and the whole world, hydroelectricity does
(new open cycle) project in Peru, and the El Quimbo
pesos per share.
not emit CO2.
hydroelectric project in Colombia.
For their part, the shares of Endesa Chile and Chilectra
Preventing the hydroelec tric development of
In Distribution, the investments are and will be
ended the year with prices of 734 Chilean pesos and
Chile, with its consequent lower costs and less
oriented partly to attending the needs of our growing
1,450 Chilean pesos each respectively, which implied a
environmental impact, will necessarily imply the system’s
customer base and maintaining the high standards of
growth of 16% in the case of our generation subsidiary
growth through more expensive and contaminating
service quality which, among other parameters, are
and of 22% in the case of the distribution subsidiary.
alternatives.
measured by a reduction in the annual number of power
This is an evidence of the trust in our business and
At the s ame time, the initiative will mean a
the solid foundations of the Enersis Group, the parent
development opportunity for the inhabitants of the
company of Endesa’s businesses in Latin America.
Region of Aysén, through the creation of new and
cuts, a reduction in the duration of power cuts and the
provision of more reliable networks.
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However, and considering the present global economic
Secondly, and with the firm conviction of contributing
scenario, the company has the necessary tools for
to the educational and cultural development of Chile,
making this investment plan more flexible and thus
Enersis, El Mercurio newspaper and Universidad de
- Best Investor Relations Team in Chile, according to
adapting it without affecting our contribution to the
Los Andes decided to support and enliven the Chile
Capital magazine and Santander Global Banking &
security of electricity supplies in Latin America.
Bicentenary in Four Moments project.
Markets (Enersis).
The third event was related to the start-up of the
- First place in the category Corporate Governance
SUSTAINABILITY
Corporate Volunteers Program, an initiative that reflects
Practices, Utilities Sector, according to Investor
a culture committed to education and in which 15% of
W ith resp e c t to the ac tions t aken in ter ms of
the company’s personnel have already taken part.
- Contribution to the Endesa Spain Community
(ENDESA).
Relations Global Rankings (Enersis).
- Best Managed Company in Latin America in the
Sustainability, which we understand as economic growth,
Lastly, and in our wish to contribute to knowledge,
social progress and ecological balance, I can state with
preservation and care for biodiversity, the Enersis Group
pride that during 2008 we carried out a series of tasks
and Fundación San Ignacio del Huinay prepared the book
- To p 10 i n T h e B e s t G o v e r n e d M a j o r L a t i n
within our principal focus of action: education.
Native Trees of Chile and the mock-up of the document
Corporations 2008 according to the consultancy
Marine Benthonic Fauna of the Chilean Patagonia.
Management & Excellence and LatinFinance
To summarize these actions, we can mention four
significant highlights:
Firstly, we are continuing to advance with our project
Since its beginnings in Latin America in 2000 and
until the end of 2008, this initiative has permitted the
illumination, restoration and giving life to more than 80
religious and civil works in Chile, Peru and Colombia.
(Enersis).
magazine (Enersis and Endesa Chile).
RECOGNITIONS
called Illuminating Monuments in the South of the
World.
Utilities Sector, according to Euromoney magazine
- Best Group Annual Report, according to Gestión
magazine and PricewaterhouseCoopers (Enersis,
I should also like to share with you the series of
recognitions that we received during 2008, awards that
confirm our practices and achievements.
These include:
- Ten Best Companies for Working Mothers and
We have completed work on a total of 49 monuments
Fathers, according to Fundación Chile Unido and
at the local level and, in 2008, inaugurated the lighting
Ya magazine of El Mercurio (Enersis, Endesa Chile
of the churches of Carahue, Villarrica and Molina.
and Chilectra).
Endesa Chile and Chilectra).
- Top 10 in the 4th CSR Ranking 2008, according to
Fundación PROhumana, CPC and Capital magazine
(Endesa Chile).
- Labor Safety Prize (Endesa Chile).
- AmCham Prize for Good Corporate Citizenship
(Chilectra).
- Cigré Prize for Innovation (Chilectra).
ANNUAL REPORT
CHAIRMAN’S LETTER3
- ACHS Prize for Effective Action in Safety Matters
(Chilectra).
- Best Social Management Report, according to Acción
RSE (Chilectra).
A s the Enersis Group, we have the mission to
contribute to security in electricity supplies, providing
the best service in Latin America at a reasonable price
and with respect for the environment.
Under this premise, based on a robust financial
BETTER SERVICE AND PERSONNEL
situation and assets of 22,625 million dollars, we will
be alert to new growth opportunities and the fulfillment
Everything mentioned in this report, both at the financial
of our investment plan in the five countries in which
and management levels, would not have been possible
we operate, especially in Chile; all this through the
without the decided support of ever y one of the
development of autochthonous, renewable and clean
workers and staff who form part of the companies of
resources like water, the resource that is everyone’s and
our business group.
for all Chileans.
As Chairman of Enersis, I would like to congratulate
every one for their work during 2008. Thanks to this,
Yours sincerely,
we have managed to close a good year despite the
energy tightness that affected Chile and the series of
problems that the global economy has faced and will
continue to face.
We have reaffirmed our leadership position in Latin
America and our solid financial position, a situation that
speaks very well of each of our employees and managers
as, without their work, we would not be capable of
achieving the objectives which we set ourselves as a
Pablo Yrarrázaval Valdés
company year by year.
Chairman
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HIGHLIGHTS OF 2008
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HIGHLIGHTS OF 2008
At the end of January, and as part of the Donation
of Libraries program, Enersis donated, together with
El Mercurio, 500 books to the Municipal Library of
Paredones, located in Chile’s 6th Region.
Enersis was distinguished in March as the Best Managed
Company in Latin America in the Utilities Sector,
according to Euromoney magazine.
As part of the Illuminating Monuments in the South
of the World project, the lighting was restored to the
Sagrado Corazón de Jesús Cathedral in Villarrica in
March. Later in the year, the San Pablo de Carahue and
Nuestra Señora del Tránsito de Molina parish churches
were added.
In the 10th edition of Investor Relations Global Rankings
(IRGR 2008) in April, Enersis was awarded top place in
On March 19, the Enersis Group inaugurated the
the category Corporate Governance Practices Utilities
combined cycle of the San Isidro II thermal pant, thus
Sector.
adding 105 MW to the SIC.
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During May, Enersis was distinguished as the Best
In May also, Enersis began the pilot run of the Corporate
On September 2, Enersis and its subsidiary Endesa
Investor Relations Team in Chile, heading the Top 100
Volunteers Program.
Chile, with the principal local companies, successfully
ranking in that category, measures by Capital magazine
and Santander Global Banking & Markets.
celebrated Chile Day in the New York Stock Exchange
In June, the company obtained an outstanding place
(NYSE).
in The Best Governed Major Latin Corporations 2008,
being among the Top 10 in this ranking.
In mid July, and as part of the Libraries Donation
program, Enersis presented, together with El Mercurio,
more than 400 books to the Pedro Mariño de Lobera
Municipal Library, Coronel, in Chile’s 8th Region.
The Enersis Group was distinguished in September
as being among the Ten Best Companies for Working
Mothers and Fathers.
ANNUAL REPORT
HIGHLIGHTS OF 2008
The Enersis Group, jointly with El Mercurio and
Earl y in S eptemb er, Ener sis organize d the 4th
During December, Enersis and Fundación San Ignacio del
Universidad de los Andes, officially launched the Chilean
International Conference for Chilean Issuers, an event
Huinay published the book “Native Trees of Chile”.
Bicentenary in Four Moments project in the first days
that was attended by leading economists, portfolio
of September.
managers and executives related to bank s and
The company Bureau Veritas Chile certified the total
investment funds.
gross declared capacity of the generating assets of the
The Enersis Group was recognized in September as
Enersis Group in Latin America 2008, amounting to the
producing the Best Group Annual Report, according to
total of 13,893 MW, a 1.4% increase over the year
PricewaterhouseCoopers and Gestión Magazine.
before.
Revenues grew by 35% to 6,650,287 million Chilean
pesos, explained by an increase of 33% in the
Generation and Transmission business and a rise of
35% in Distribution.
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Name
Domicile
Enersis S.A.
Santiago, being able to open agencies or branches in other parts of the
country or abroad.
Kind of company
Open Corporation
Tax I/D No.
94,271,000 - 3
Address
Santa Rosa Nº 76, Santiago, Chile
Telephones
(56-2) 353 4400 - (56-2) 378 4400
Fax
(56-2) 378 4788
PO Box
1557, Santiago
Web Site
www.enersis.cl
Electronic Mail
[email protected]
Inscription Registree N°
175
External Auditors
Deloitte & Touche
Subscribed & Paid Capital (ThCh$)
2,824,882,834
Chilean Stock Exhanges ticker N°
ENERSIS
New York Stock Exchange ticker N°
ENI
Madrid Stock Exchange ticker N°
XENI
ADR Program Custodian Bank
Banco de Chile
ADR Program Depositary Bank
Citibank N.A.
Latibex Custodian Bank
Banco Santander
Latibex Link Entity
Santander Central Hispano Investment S.A.
Chilean Credit Rating Agencies
Feller Rate and Fitch
International Credit Rating Agencies
Fitch, Moody’s and Standard & Poor’s
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ANNUAL REPORT
01. CONSTITUTION
bylaws approved by Resolution 409-S of July 17, 1981
On August 1, 1988, the company’s name was changed
of the Securities and Insurance Commission (SVS). The
to Enersis S.A. The latest amendment is that set out
The company that gave rise to Enersis S.A. was formed,
extract of the authorization for the incorporation and
in public deed dated April 13, 2006, certified by the
initially with the name Compañía Chilena Metropolitana
approval of the bylaws was registered in the Santiago
Santiago notary Patricio Zaldívar Mackenna, whose
de Distribucion Electrica S.A. by public deed dated
Trade Registry on page 13,099 Nº 7,269 for year 1981,
extract was registered in the Santiago Trade Register
June 19, 1981 granted by the notary Patricio Zaldívar
and were published in the Official Gazette of July 23,
for 2006, page 15,343, Nº 10,611 and published in the
Mackenna in Santiago, and was modified by public deed
1981. The bylaws of Enersis have since undergone a
Official Gazette on April 22, 2006.
dated July 13 the same year before the same notary.
number of amendments.
The company’s incorporation was authorized and its
ANNUAL REPORT
02. CORPORATE OBJECTS
Company’s objects are to explore, develop, operate,
generate, distribute, transmit, transform and /or
sell energy in any of its forms or types, in Chile or
abroad, directly or through other companies, and
telecommunications activities and the provision of
engineering consultancy in Chile and abroad. It may
also invest and manage its subsidiaries and affiliate
companies, be these generator s, transmit ter s,
distributors or traders of electricity or whose business
is any of the following: (i) energy, in any of its forms or
nature, (ii) the supply of public utilities or whose main
raw material is energy, (iii) telecommunications and IT,
and (iv) trading over the internet.
In complying with its main objects, the company will
carry out the following functions: a) promote, organize,
create, modify, dissolve or liquidate companies of any
services; financial, technical, legal and auditing advice;
trading and disposal of all kinds of movable and
nature which have similar corporate objects to its own;
and in general any type of service necessary for their
immovable assets, either directly or through subsidiary
b) propose investment, financing and business policies
best performance.
or affiliate companies; ii) all kinds of financial assets,
to subsidiary companies, as well as accounting criteria
In addition to its main objects and acting within
including shares, bonds and debentures, commercial
and systems that these should follow; c) supervise
the limits established by the Investment and Financing
papers and in general all kinds of titles or securities
subsidiary company management: d) provide subsidiary
Policy approved by the general shareholders meeting,
and company contributions, either directly or through
or associate companies with the necessary financing for
the Company may invest in: i) the acquisition, operation,
subsidiary or affiliate companies.
their business development and provide management
construction, rental, administration, intermediation,
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01. OWNERSHIP STRUCTURE
The company capital is divided into 32,651,166,465 shares of no par value, in the same sole series.
As of December 31, 2008, all the shares were subscribed and paid, distributed in the following manner:
Shareholder
Endesa Latinoamérica S.A.
Number of Shares
Shareholding
19,794,583,473
60.62%
Pension Fund Managers
5,584,380,494
17.10%
ADR’s (Citibank N.A. Depositary Bank, Rule N°1,375 SVS)
3,563,352,750
10.91%
Stockbrokers, Insurance Companies & Mutual Funds
1,784,596,797
5.47%
873,795,010
2.68%
96,656,413
0.30%
953,801,528
2.92%
32,651,166,465
100.00%
Banco de Chile (on behalf of third parties)
Foreign Investment Funds
Others
Total Acciones
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02. IDENTIFICATION OF THE
CONTROLLERS
03. LIST OF MAJOR SHAREHOLDERS
As of December 31, 2008, Enersis was owned by 8,241 shareholders. The major were:
According to Chapter XV of Law 18,045, the direct
controller of the company is Endesa Latinoamérica, S.A.,
Name
Tax No.
Number of Shares
Shareholding
Endesa Latinoamérica S.A.
59,072,610-9
19,794,583,473
60.62%
Citibank N.A. (Depositary Bank, Rule N°1,375 SVS)
97,008,000-7
3,563,352,750
10.91%
AFP Provida S.A.
98,000,400-7
1,744,595,549
5.34%
AFP Habitat S.A.
98,000,100-8
1,341,201,242
4.11%
AFP Capital S.A.
98,000,000-1
1,250,054,362
3.83%
AFP Cuprum S.A.
98,001,000-7
1,069,960,516
3.28%
Banco de Chile (on behalf of this parties)
97,004,000-5
873,795,010
2.68%
Banchile Corredores de Bolsa S.A.
96,571,220-8
447,694,539
1.37%
Securities Market Commission) are: ENEL ENERGY
LarrainVial S.A. Corredora de Bolsa
80,537,000-9
187,819,735
0.58%
EUROPE S.r.L. with a 67.053% shareholding (ENEL
AFP Planvital S.A.
98,001,200-K
178,568,825
0.55%
Celfin Capital S.A. Corredores de Bolsa
84,177,300-4
136,592,147
0.42%
Banco Itaú (on behalf of investors)
76,645,030-K
127,334,804
0.39%
94.08%
a Spanish corporation that holds 60.62% of Enersis.
Endesa Latinoamérica, S.A., in turn is controlled 100%
by ENDESA, S.A., a corporation located in the Spain
Kingdom and whose main shareholders as of December
31, 2008, and according to the CNMV (Spanish National
ENERGY EUROPE S.r.L in turn is controlled 100% by
ENEL S.p.A); ACCIONA, S.A. with a 5,01% shareholding
and FINANZAS DOS, S.A. with 20.0% (FINANZAS DOS,
Sub total: 12 shareholders
30,715,552,952
Others: 8,229 shareholders
1,935,613,513
5.92%
S.A. in turn is controlled 100% by ACCIONA, S.A.).
Total: 8,241 shareholders
32,651,166,465
100.00%
The ENDESA, S.A. free float as of December 31, 2008
was 7,937%.
On March 26, 2007, ACCIONA, S.A., and ENEL
ENERGY EUROPE S.r.L., entered into a sharedmanagement agreement with respect to ENDESA, S.A.
The text of this agreement was reported to the CNMV
as material information on the same date of its signing
and can be consulted on that authority’s web site
(www.cnmv.es).
ANNUAL REPORT
04. MAJOR OWNERSHIP CHANGES
The changes of greatest importance in the ownership of Enersis in 2008 were:
Name
Shares as of
Shares as of
Change in No.
31/12/2007
31/12/2008
of Shares
Citibank N.A. (Depositary Bank, Rule N°1,375 SVS)
2,890,139,300
3,563,352,750
AFP Provida S.A.
1,790,291,654
1,744,595,549
-45,696,105
AFP Habitat S.A.
1,513,040,675
1,341,201,242
-171,839,433
AFP Capital S.A. (*)
1,284,346,556
1,250,054,362
-34,292,194
949,141,449
1,069,960,516
120,819,067
402,148,077
AFP Cuprum S.A.
673,213,450
Banco de Chile (on behalf of this parties)
471,646,933
873,795,010
Banchile Corredores de Bolsa S.A.
522,653,676
447,694,539
-74,959,137
Banco Itaú (on behalf of investors)
0
127,334,804
127,334,804
Santander S.A. Corredores de Bolsa
168,196,303
126,410,661
-41,785,642
Bolsa Electrónica de Chile
147,525,675
71,994,378
-75,531,297
Note:
(*) AFP Capital S.A. is the result of the merger of AFP Santa María & AFP Bansander.
05. SUMMARY OF SHAREHOLDERS’ COMMENTS AND PROPOSALS
Enersis received no comments with respect to the progress of the business during 2008 by the majority shareholders
or groups of shareholders representing 10% or more of the issued shares with voting rights, in accordance with the
provisions of article 74 of Law 18,046 and articles 82 and 83 of the regulations to the Corporations Law.
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ANNUAL REPORT
SHARE TRANSACTIONS
ANNUAL REPORT
SHARE TRANSACTIONS
01. STOCK EXCHANGE TRANSACTIONS
The quarterly transactions of the last 3 years on the stock exchanges where Enersis shares are traded, both in Chile,
through the Santiago Stock Exchange (Bolsa de Comercio de Santiago), and the Chile Electronic Stock Exchange (Bolsa
Electronica de Chile), and the Valparaiso Stock Exchange (Bolsa de Valores de Valparaíso ), and in the United States
of America and Spain through the New York Stock Exchange (NYSE) and the Latin American Securities Exchange on
the Madrid Stock Exchange (Latibex) (Bolsa de Valores Latinoamericanos de la Bolsa de Madrid (Latibex) respectively,
are detailed below:
SANTIAGO STOCK EXCHANGE
During 2008, 9,609 million shares were traded at
the Santiago Stock Exchange, which is equivalent to
1,568,149 million Chilean pesos. As of December, the
closing share price was 164.73 Chilean pesos.
CHILE ELECTRONIC STOCK EXCHANGE
1,309 million shares were traded at the Chile Electronic
Stock Exchange during the year, the equivalent of
209,642 million Chilean pesos. The share price closed
at 166.50 at December 2008.
Period
No. of Shares
1st Quarter 2006
2ndt Quarter 2006
3rd Quarter 2006
4th Quarter 2006
Total 2006
1st Quarter 2007
2ndt Quarter 2007
3rd Quarter 2007
4th Quarter 2007
Total 2007
1st Quarter 2008
2ndt Quarter 2008
3rd Quarter 2008
4th Quarter 2008
Total 2008
1,963,504,194
1,391,561,107
1,424,604,249
2,935,194,633
7,714,864,183
2,326,545,937
2,281,519,210
2,623,759,573
3,104,262,960
10,336,087,680
2,629,967,374
2,353,763,372
1,810,012,396
2,815,324,441
9,609,067,583
Period
No. of Shares
1st Quarter 2006
2ndt Quarter 2006
3rd Quarter 2006
4th Quarter 2006
Total 2006
1st Quarter 2007
2ndt Quarter 2007
3rd Quarter 2007
4th Quarter 2007
Total 2007
1st Quarter 2008
2ndt Quarter 2008
3rd Quarter 2008
4th Quarter 2008
Total 2008
363,061,858
280,361,371
278,723,806
551,462,369
1,473,609,404
482,727,433
327,721,596
433,727,621
504,779,498
1,748,956,148
528,349,339
281,269,910
222,175,773
277,018,070
1,308,813,092
Amount (Pesos)
241,782,332,100
170,737,146,206
185,750,114,705
471,034,884,328
1,069,304,477,339
403,238,785,712
448,872,471,686
482,941,651,473
546,181,448,622
1,881,234,357,493
369,032,945,308
407,183,479,315
312,772,735,787
479,160,238,375
1,568,149,398,785
Amount (Pesos)
44,427,922,583
34,161,027,229
36,216,066,265
88,445,858,217
203,250,874,294
83,082,386,777
64,327,071,276
79,890,053,929
87,569,943,661
314,869,455,643
76,278,908,151
48,515,676,390
38,114,037,557
46,733,014,629
209,641,636,727
Average Price
123.14
122.69
130.39
160.48
173.32
196.74
184.06
175.95
140.32
172.99
172.80
170.20
Average Price
122.37
121.85
129.94
160.38
172.11
196.29
184.19
173.48
144.37
172.49
171.55
168.70
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ANNUAL REPORT
VALPARAISO STOCK EXCHANGE
50 million shares were traded on the Valparaiso Stock
Exchange, amounting to 8,335 million Chilean pesos.
The share price closed at 163.84 at December 2008.
NEW YORK STOCK EXCHANGE (NYSE)
The Enersis stock started trading on the New York Stock
Exchange (NYSE) on October 20, 1993. An Enersis ADS
consists of 50 shares and its mnemonic name is ENI.
Citibank N.A. acts as the depositary bank and Banco
de Chile as the custodian in Chile.
During 2008, 109 million ADS were traded in the
United States of America amounting to 1,691 million
dollars. The December ADS closing price was 12.74
dollars.
Period
1st Quarter 2006
2ndt Quarter 2006
3rd Quarter 2006
4th Quarter 2006
Total 2006
1st Quarter 2007
2ndt Quarter 2007
3rd Quarter 2007
4th Quarter 2007
Total 2007
1st Quarter 2008
2ndt Quarter 2008
3rd Quarter 2008
4th Quarter 2008
Total 2008
No. of Shares
11,090,794
7,727,889
8,279,320
16,427,067
43,525,070
8,364,095
9,737,577
7,417,521
16,507,087
42,026,280
12,601,763
20,095,015
4,196,431
13,461,949
50,355,158
Amount (Pesos)
1,365,417,295
938,354,614
1,049,392,923
2,582,363,519
5,935,528,351
1,446,466,587
1,914,700,194
1,362,390,508
2,947,390,529
7,670,947,818
1,826,943,424
3,470,065,340
727,400,548
2,310,726,034
8,335,135,346
Period
No. of Shares
Amount (Dollars)
1st Quarter 2006
2ndt Quarter 2006
3rd Quarter 2006
4th Quarter 2006
Total 2006
1st Quarter 2007
2ndt Quarter 2007
3rd Quarter 2007
4th Quarter 2007
Total 2007
1st Quarter 2008
2ndt Quarter 2008
3rd Quarter 2008
4th Quarter 2008
Total 2008
24,652,200
20,778,900
13,510,900
20,414,300
79,356,300
19,608,400
19,283,100
22,964,900
21,992,500
83,848,900
30,348,500
18,772,700
25,112,963
34,750,666
108,984,829
290,941,664
241,808,215
161,595,768
299,067,454
992,963,101
314,610,895
358,148,873
411,880,074
393,529,397
1,478,169,239
459,142,457
344,723,090
418,886,734
467,921,193
1,690,673,474
Average Price
123.11
121.42
126.75
157.20
172.94
196.63
183.67
178.55
144.98
172.68
173.34
171.65
Average Price
11.78
11.64
11.96
14.65
16.04
18.57
17.94
17.89
15.13
18.36
16.68
13.47
ANNUAL REPORT
SHARE TRANSACTIONS
LATIN AMERICAN SECURITIES MARKET ON THE
Period
MADRID STOCK EXCHANGE (LATIBEX)
1st Quarter 2006
2ndt Quarter 2006
3rd Quarter 2006
4th Quarter 2006
Total 2006
1st Quarter 2007
2ndt Quarter 2007
3rd Quarter 2007
4th Quarter 2007
Total 2007
1st Quarter 2008
2ndt Quarter 2008
3rd Quarter 2008
4th Quarter 2008
Total 2008
The Enersis shares started trading on the Latin American
Securities Exchange of the Madrid Stock Exchange
(Latibex) on December 17, 2001. The company’s
dealing unit is 50 shares and its mnemonic name is
XENI. Santander Central Hispano Investment S.A. acts as
the linking agent and Banco Santander is the custodian
in Chile.
During 2008, 1.5 million shares were traded, the
No. of Shares
Amount (Euros)
472,690
479,532
433,281
475,391
1,860,894
468,101
426,654
206,383
250,092
1,351,230
574,208
317,115
349,868
243,642
1,484,833
4,652,963
4,411,956
4,059,131
5,367,646
18,491,696
5,720,875
5,826,061
2,701,883
3,023,238
17,272,057
6,082,911
3,703,245
3,917,120
2,472,402
16,175,678
Average Price
9.84
9.20
9.37
11.29
12.22
13.66
13.09
12.09
10.59
11.68
11.20
10.15
equivalent of 16 million euros. The closing share price
as of December was 9.11 euros.
02. STOCK TRANSACTIONS BY DIRECTORS AND SENIOR EXECUTIVES
Shareholder
Tax No.
Purchase/
Date of
Number
Trans-action
Total Amount
Object of the
Relationship
Sale
Transaction in
of Shares
Unit Pice
of Transaction
Transaction
to Company
Share-holders
Traded
(Pesos)
(Pesos)
Register
Jorge Omar Ale Yarad
8,360,211-2
Sale
05/20/2008
21,208
164.00
3,478,112
Financial Investment
General Manager Waters East Santiago
Ricardo Alvial Muñoz
7,330,389-3
Sale
08/11/2008
10,000
187.00
1,870,000
Risks and Investments Director
10,702,983-4
Purchase
10/09/2008
86,000
150.00
12,900,000
Taxation Manager
Marcos Cruz Sanhueza
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ANNUAL REPORT
ANNUAL REPORT
01. DISTRIBUTABLE EARNINGS
02. DIVIDEND POLICY 2008
The distributable earnings for 2008 are as follows:
The board explained to the general shareholders meeting
The total dividend will be defined by the ordinary
of Enersis held on April 1, 2008, the dividend policy that
shareholders meeting to be held during the first four
the board expected to follow during 2008: to distribute
months of 2009.
Millions of Ch$
Net income for year
Amortization negative goodwill (less)
Distributable earnings
570,883
6,219
564,664
as a total dividend an amount equivalent to 70% of the
net income for 2008.
Compliance with the above program will be subject,
in terms of dividends, to the net income actually
The board distributed an interim dividend, with charge
produced and also the results of the projections made
to the net income for 2008, representing 15% of the
by the company periodically or the existence of certain
net income as of September 30, 2008, according to the
conditions, as the case may be.
financial statements as of that date, which was paid in
December 2008.
The dividend policy that the board expects to follow
during 2009 will be approved by the board at the
appropriate time and duly informed to shareholders at
the ordinary shareholders meeting planned for April
15, 2009.
No. Dividend
Type of Dividend
Closing Date
Payment Date
Pesos per Share
Charged to the Year
72
Final
04/14/05
04/20/05
0.416540
73
Final
03/28/06
04/03/06
1.000000
2004
2005
74
Interim
12/19/06
12/26/06
1.110000
2006
75
Final
05/16/07
05/23/07
4.890330
2006
76
Interim
12/20/07
12/27/07
0.531190
2007
77
Final
04/24/08
04/30/08
3.412560
2007
78
Interim
12/13/08
12/19/08
1.539310
2008
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ANNUAL REPORT
ANNUAL REPORT
The ordinary shareholders meeting held on April 1,
B) MA XIMUM INVESTMENT LIMITS
2008 approved the Investment and Financial Policy
indicated below:
The investment limits for each area are the following:
01. INVESTMENTS
• Investments in its subsidiaries in the electricity sector,
the amounts needed for the subsidiaries to meet their
A) AREAS OF INVESTMENT
respective corporate objects.
• Investments in other subsidiaries such that sum of
Enersis will invest, as authorized by its bylaws, in the
the proportions of the fixed assets corresponding
following areas:
to each of these other subsidiaries does not exceed
• Contributions for investment in or for the creation
the proportion of fixed assets corresponding to the
of subsidiary or affiliate companies whose activity
shareholdings in the subsidiaries in the electricity
is aligned, related or linked to any forms or types of
sector and of Enersis.
energy or the supply of public utilities or whose main
raw material is energy.
• Investment s consistent with the acquisition,
exploitation, construction, rental, administration,
trading and disposal of any class of immovable assets,
whether directly or through subsidiary companies.
• Other investments in all kinds of financial assets, titles
or securities.
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ANNUAL REPORT
C)
PARTICIPATION IN THE CONTROL OF THE
AREAS OF INVESTMENT
In order to control the investment areas and in
accordance with Enersis’s corporate objects, the
following procedure will be pursued wherever is
possible:
At the general shareholders meetings of the
subsidiary and affiliate companies, the appointment
of directors consistent with the Enersis shareholding in
that company shall be proposed, these preferably being
from among directors or executives of the company or
its subsidiaries.
• Investment, financial and commercial policies will be
proposed to the subsidiary companies, as well as the
accounting criteria and systems they should follow.
• The management of the company subsidiaries and
affiliates will be supervised.
• Permanent control of debt limits will be maintained,
to the point that the investments or contributions
implemented or that are planned for implementation
do not represent an unusual variation from the
parameters defined by the maximum investment
limits.
ANNUAL REPORT
02. FINANCING
C) MANAGEMENT POWERS TO AGREE THE
GRANTING OF COLLATERAL WITH CREDITORS
A) MA XIMUM LEVEL OF DEBT
The company’s management may agree with creditors
The maximum level of debt of Enersis is a debt to equity
the granting of tangible collateral or guarantees in
plus minority interest ratio of 1.75 times, based on the
accordance with the law and the corporate bylaws.
consolidated balance sheet.
D) ASSETS ESSENTIAL TO THE FUNCTIONING
B) MANAGEMENT POWERS TO AGREE DIVIDEND
OF THE COMPANY
RESTRICTIONS WITH CREDITORS
The shares representing Enersis’s shareholding in its
Dividend restrictions may only be agreed with creditors if
subsidiary Chilectra S.A. are considered essential assets
previously approved by a shareholders meeting (ordinary
for the functioning of Enersis.
or extraordinary).
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ANNUAL REPORT
ANNUAL REPORT
01. BOARD OF DIRECTORS
CHAIRMAN
VICE CHAIRMAN
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
Pablo Yrarrázaval
Valdés
Chairman of the Santiago
Stock Exchange
Tax ID No.: 5,710,967-K
Rafael Miranda
Robredo
Industrial Engineer
Instituto Católico de Artes
e Industrias, Madrid
Tax ID No.: 48,070,966-7
Pedro Larrea
Paguaga
Mining Engineer
Universidad
Politécnica de Madrid
Tax ID No.: 48,077,275-K
Hernán Somerville
Senn
Lawyer
Universidad de Chile
Tax ID No.: 4,132,185-7
Eugenio Tironi
Barrios
Sociologist
School of Senior Studies in
in Social Sciences,
Paris, France
Tax ID No.: 5,715,860-3
Patricio Claro
Grez
Civil Industrial Engineer
Tax ID No.: 5,206,994-7
Juan Eduardo Errázuriz
Ossa
Civil Engineer
Pontificia Universidad
Católica de Chile
Tax ID No.: 4,108,103-1
SECRETARIO
DEL DIRECTORIO
Domingo Valdés
Prieto
Lawyer
Tax ID No.: 6,973,465-0
Enersis is managed by a 7-member board of directors
DIRECTORS’ REMUNERATION
each of whom remains in office for a period of 3 years
and may be reelected. The current board of directors was
Pursuant to article 33 of the Corporations Law 18,046,
elected at the ordinary shareholders meeting held on April
the ordinary shareholders meeting held on April 1, 2008
1, 2008. The chairman, vice-chairman and the secretary
approved the remuneration to be paid to the members of
to the board were appointed at a board meeting held on
the board for 2008.
the same day.
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ANNUAL REPORT
The amounts paid to the directors as of December 31, 2008 as members of the board as such, and as members of the Directors’ Committee and Audit Committee, and those
company directors who are acting or have acted during 2008 as directors of subsidiaries, are detailed below:
As of December 31, 2008 Chilean Pesos
Name
Position
Period of
Board of Board of
Directors’
Audit
Profit
Performance
Enersis (*)
subsidiaries
Committee (*)
Committee (*)
Sharing
Chairman
01/01/08 al 12/31/08
53,444,563
-
8,939,058
-
-
Rafael Miranda Robredo
Vice Chairman
01/01/08 al 12/31/08
40,334,747
-
-
-
-
Pedro Larrea Paguaga
Director
01/01/08 al 12/31/08
25,951,460
-
-
-
-
Hernán Somerville Senn
Director
01/01/08 al 12/31/08
26,722,281
-
8,939,058
5,862,573
-
Eugenio Tironi Barrios
Director
01/01/08 al 12/31/08
26,722,281
-
-
-
-
Patricio Claro Grez
Director
01/01/08 al 12/31/08
26,722,281
-
8,939,058
5,862,573
-
Juan Eduardo Errázuriz Ossa
Director
04/01/08 al 12/31/08
19,539,745
-
-
2,982,012
-
Juan Ignacio de la Mata Gorostizaga
Director
01/01/08 al 03/31/08
6,457,681
-
-
2,155,705
-
225,895,039
-
26,817,174
16,862,863
-
TOTAL
Note:
(*) Amountss
ADVISORY EXPENSES OF THE BOARD
02. DIRECTORS’ COMMITTEE
ACTIVITIES OF THE DIRECTORS’ COMMITTEE
The board incurred no expenses in advisory services
In accordance with article 50 bis of the Corporations Law
The Directors’ Committee met 12 times during the
during 2008.
18,046, Enersis has a 3-member Directors’ Committee
year 2008. It examined and approved the information
whose powers and duties are set out in that article. On
relating to the operations referred to in article 89 of the
April 1, 2008, the company’s board appointed Pablo
Corporations Law 18,046, doing reports over the above
Yrarrázaval Valdés (related to the controller), Hernán
mentioned transactions. In addition, specific issues were
Somerville Senn (related to the controller) and Patricio
dealt with at these meetings, as detailed below:
Claro Grez (independent of the controller) as members
At its first meeting of the year, on January 30,
of the Directors’ Committee. In turn, the Enersis
2008, the Directors’ Committee agreed to propose to
Directors’ Committee, at its meeting hold on April 25,
the general shareholders meeting that the firms Feller
2008 appointed Pablo Yrarrázaval Valdés as its chairman
Rate Clasificadora de Riesgo Limitada and Fitch Chile
and Domingo Valdés Prieto as its secretary.
Clasificadora de Riesgo Limitada be appointed as the
ANNUAL REPORT
company’s national private credit-rating agencies and
and between Enersis S.A. and Corpbanca, in accordance
stating that this met conditions of equity similar to those
the firms Fitch Ratings, Moody’s Investors Service and
with Resolution 13/2007 adopted by the meeting of the
habitually prevailing in the market and made its report
Standard & Poor’s International Ratings Services as its
Directors’ Committee on May 29, 2007, declaring that
in accordance with article 50 bis No.3 of Law 18,046. It
international credit-rating agencies for 2008. It approved
these operations meet the conditions of equity similar
also examined the operation consisting of renewing the
a budget proposal of the Directors’ Committee for 2008
to those habitually prevailing in the market and made
Group’s material damages and civil liability insurance
and decided to submit this proposal to the board and
its report in accordance with article 50 bis No.3 of Law
program within the “Cautiva” scheme for the period
to the general shareholders meeting of Enersis S.A. It
18,046.
2008-2009, since the offers received met conditions
approved the text of the report that should be presented
In its third meeting on March 28, 2008, the
to the general shareholders meeting about the activities
Directors’ Committee agreed to propose to the board, in
of the Committee during 2007, and on the expenses
order for it in turn to propose to the general shareholders
At it s six th meeting on June 25, 2008, the
that it has incurred, including those of advisers during
meeting, the appointment of the independent external
Committee examined the transactions of Enersis S.A.
that year.
auditing firm Deloitte & Touche for the year 2008.
with related parties during May 2008.
of equity similar to those habitually prevailing in the
market, issuing their respective report.
In its second meeting on February 27, 2008,
It also examined the remunerations system and
At it s seventh meeting on July 31, 2008, the
the Directors’ Committee examined the company’s
compensation plans for the company’s managers and
Directors’ Committee examined the unconsolidated and
unconsolidated and consolidated financial statements
senior executives.
consolidated financial statements of the company as of
for 2007, their notes, statement of income and material
At its fourth meeting on April 25, 2008, which
information, plus the report of the external auditors
took place following the general shareholders meeting
and the inspectors of accounts. It was informed of
of April 1, 2008 which renewed the board of Enersis
At its eighth meeting held on August 29, 2008,
the report prepared by the external auditors on the
S.A., the Committee agreed to appoint as its chairman
the Directors’ Committee examined the contracting of
banking and money-broking businesses, as established
Pablo Yrarrázaval Valdés and Domingo Valdés Prieto as
services for the development and implementation of
in Joint Circular 960 of the Superintendency of Banks
its secretary. It also examined the unconsolidated and
a Taxation Consultation Portal, to be signed between
and Financial Institutions and the SVS, and the internal
consolidated financial statements of the company as of
the company and its subsidiary Synapsis Soluciones
control letter of Enersis S.A. dated February 19, 2008,
March 31, 2008, their notes, statements of income and
y Servicios IT Limitada (Synapsis), finding that it met
prepared by the external auditors Deloitte & Touche
material information.
conditions of equity similar to those habitually prevailing
June 30, 2008, their notes, statements of income and
material information.
At its fifth meeting held on May 28, 2008, the
in the market, and issuing its report. It also examined the
also examined certain financial operations executed
Directors’ Committee examined the operation of
services contract for support in technical and scientific
between the subsidiary Endesa Chile and Corpbanca,
contracting CIEPLAN for arranging three seminars a year,
aspects of the book “Native Trees of Chile”, to be signed
in accordance with SVS Circular 422. The Committee
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ANNUAL REPORT
03. AUDIT COMMITTEE
between the company and its subsidiary Empresa de
approx.) to Constructora Logro S.A., a subsidiary of
Ingeniería Ingendesa S.A. (Ingendesa), finding that
Sigdo Koppers S.A., a company in which Juan Eduardo
it met conditions of equity similar to those habitually
Errázuriz Ossa is a shareholder, who is also a director
The formation of the Audit Committee was approved
prevailing in the market and issuing its report.
of it and of Enersis S.A., the parent company of Endesa
by the Enersis board at its meeting held on June 29,
In the ninth meeting of September 24, 2008, the
Chile. The Directors’ Committee declared that the award
2005. The Audit Committee is separate from the
met conditions of equity similar to those habitually
board and the Directors’ Committee, as required by
with related parties during August 2008.
prevailing in the market and issued its report. The
Corporations Law 18,046. The Audit Committee is a
Committee also approved the timetable for its ordinary
requirement of the United States of America Sarbanes
meetings for 2009.
Oxley Act and the complementary regulations issued
At its tenth meeting on October 29, 2008, the
Directors’ Committee examined the unconsolidated
and consolidated financial statements of the company
In the twelfth meeting of December 19, 2008, the
by the Securities and Exchange Commission (SEC) and
as of September 30, 2008, their notes, statements of
the New York Stock Exchange (NYSE), as Enersis is an
income and material information. The Committee was
with related parties during November 2008.
issuer of American Depositary Receipts (ADRs) which are
also informed of certain financial transactions signed
In conclusion, the Directors’ Committee of Enersis
registered with the NYSE, and is also an issuer of bonds
between Chilectra S.A. and Corpbanca, in accordance
has complied with the matters set out in article 5º bis
registered in the United States of America. Its duties
with Resolution 13/2007 adopted by the meeting of the
of the Corporations Law 18,046 and has analyzed and
include the following: i) to be one of the proposers to
Directors’ Committee on May 29, 2007, which met the
contributed to the better development of the operations
the ordinary shareholders meeting of the appointment of
conditions of equity similar to those habitually prevailing
analyzed.
the external auditors; ii) to be responsible for controlling
in the market.
At its eleventh meeting on November 28, 2008,
the Directors’ Committee noted that is was informed
the performance of the Company’s external auditors;
DIRECTORS’ COMMITTEE EXPENSES DURING
iii) initially approving the external audit services and
2008
the various services provided by the external auditors;
of the internal controls letter of Enersis S.A., dated
and iv) to establish procedures for the reception and
November 15, 2008, prepared by the company’s
During the year 2008, the Directors’ Committee did not
management of claims in the accounting, internal control
external auditors Deloitte & Touche, referring to SVS
make use of the operating expense budget approved by
or auditing areas. The Enersis extraordinary shareholders
Circular 980. The Committee also examined the terms
the company’s ordinary shareholders meeting held on
meeting held on March 21, 2006 reformed its bylaws
of the bid adjudication made by Endesa Chile for the
April 1, 2008. The Committee has not had to hire the
to regulate the creation, integration, performance and
contract CAN-009.08 “Civil Works Canela II Wind
services of professional consultants for the performance
powers of the Audit Committee.
Farm”, for an amount of UF 351,060 (US$11,600,000
of their duties.
ANNUAL REPORT
ACTIVITIES OF THE AUDIT COMMITTEE
2007, plus the use of the expenses for that period
of Enersis S.A. as of December 31, 2007, its notes,
approved by the general shareholders meeting of April
statements of income and material information, plus
On April 1, 2008, the board of directors appointed
24, 2007. In accordance with the procedures relating
the report on these issued by the company’s external
Hernán Somer ville Senn, Patricio Claro Grez and
to the Ethics Channel and the Handling of Accusations
auditors. The Committee also noted that it had been
Juan Eduardo Errázuriz Ossa as members of the Audit
approved according to the provisions of the Sarbanes
formally and expressly informed of the internal controls
Committee, all of whom meet and declared meeting
Oxley Act, the Committee issued its opinion on each of
letter dated November 15, 2007 and that of February
the level of independence expected of members of
the accusations presented, provide guidelines to follow
19, 2008, both related to Enersis S.A. and signed by
the Audit Committee by the Sarbanes Oxley Act of the
in each of these and confirmed that the chairman of the
the company’s external auditors, Deloitte & Touche,
United States of America, the Securities and Exchange
Audit Committee should determine the convenience of
as referred to in SVS Circular 980, complemented by
Commission and the New York Stock Exchange, as
calling an extraordinary meeting of the Committee in
its Circular 422 dated December 6, 2007. It was also
their respective provisions are applicable to Enersis.
the event that the entity making the accusation justifies
formally and expressly informed of the report prepared by
The Enersis Audit Committee, at its meeting of April 25,
it in the opinion of the chairman. In addition, and as
the external auditors on the banking and money-broking
2008, unanimously agreed to appoint Hernan Somerville
stated in Section 202 of the Sarbanes Oxley Act, the
businesses during 2007. In accordance with the Audit
Senn as its chairman and Domingo Valdés Prieto as its
Audit Committee agreed to pre-approve the contracting
Committee’s internal regulations and the Statement on
Secretary. The Audit Committee met on eight occasions
of external audit services and those unrelated to the
Accounting Standards N° 61, the Committee revised and
during 2008, and the following specific subjects were
external audit to be provided by the external auditors
discussed with the external auditor, Deloitte & Touche,
discussed:
and which were presented to that meeting for their
the scope of its professional services, the coverage of the
In its ordinary meeting N°1/2008 held on January
prior approval. This Committee meeting also approved
audit, its independence, the opinions of the management
29, 2008, the Audit Committee approved the fees paid
the proposal of the Audit Committee’s budget for 2008
and accounting estimates, critical accounting policies
by the Enersis Group companies during 2007 to the
and agreed to submit the budget proposal to the board
and sensitive areas, significant transactions analyzed,
different external audit firms used, these being Deloitte
and the ordinary shareholders meeting of Enersis S.A.
changes in significant accounting policies, proposed
& Touche, Ernst and Young and KPMG, and authorized
in order for it to finally resolve on this matter. The
au dit adjus t ment s c ar r ie d o u t o r not , w r it ten
the estimate of proposed fees for the year 2008. The
Committee also agreed to approve the timetable for its
communications such as letters of representation and
Committee also approved the text of the report that had
ordinary meetings for 2008.
reports to the management, consultations and principal
to be presented to the general shareholders meeting
In its extraordinary meeting N°2/2008, held on
subjects discussed during the year, disagreements
and incorporated in the annual report of Enersis S.A
February 27, 2008, the Audit Committee examined the
with the management, considerations of fraud, state
about the activities carried out by the Committee during
of progress of the SOX 404 audit and convergence of
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ANNUAL REPORT
Chilean accounting principles to IFRS. It also examined
the convenience of calling an extraordinary meeting of
adjustments made for the first time to the company’s
favorably the supervision and evaluation of the work of
the Committee in the event that the entity making the
financial statements, complementing the presentation
the company’s external auditors made during 2007.
accusation justifies it in the opinion of the chairman. In
made at the previous meeting.
At its extraordinary meeting N°3/2008 held on
addition, and as stated in Section 202 of the Sarbanes
At its ordinary meeting N°7/2008 held on July 31,
March 28, 2008, the Audit Committee agreed to propose
Oxley Act, the Committee agreed to pre-approve the
2008, the Audit Committee examined the unconsolidated
to the ordinary shareholders meeting the appointment
contracting of certain auditing services and those
and consolidated financial statements of Enersis S.A.
of the firm of independent external auditors, Deloitte &
unrelated to the audit, to be provided by the external
as of June 30, 2008, its notes, statements of income
Touche, for the year 2008. In addition, and as stated in
auditors.
and material information. It also revised and approved
Section 202 of the Sarbanes Oxley Act, the Committee
At its extraordinary meeting N°5/2008 held on
the annual external audit plan and the means for
agreed to pre-approve the contracting of certain auditing
May 28, 2008, the Audit Committee, in accordance
carrying it out, thus complying with the respective
services and those unrelated to the audit, to be provided
with SOX 404, approved Enersis’s internal control
requirement in the Audit Committee regulations. In
by the external auditors.
structures and procedures necessary for its financial
accordance with the procedures relating to the Ethics
At its ordinary meeting N°4/2008 held on April 25,
reporting. The Committee also examined the draft
Channel and the Handling of Accusations approved
2008, following the holding on April 1, 2008 of the
Form 20-F, including the reconciliation with US GAAP
according to the provisions of the Sarbanes Oxley
ordinary shareholders meeting that renewed the board
of the company’s financial statements, and other related
Act, the Committee issued its opinion on each of the
of Enersis, the Audit Committee agreed to appoint
information required by the Securities and Exchange
accusations presented, provided guidelines to follow in
Hernán Somerville Senn as its chairman and Domingo
Commission (SEC) of the United States of America. It
each of these and confirmed that the chairman of the
as its secretary. It also examined the unconsolidated and
also examined the comparative presentation of the
consolidated financial statements of Enersis S.A. as of
IFRS with the adjustments made for the first time to
March 31, 2008, its notes, statements of income and
the company’s financial statements. In addition, and
material information. In accordance with the procedures
as stated in Section 202 of the Sarbanes Oxley Act,
it in the opinion of the chairman. As stated in Section
relating to the Ethics Channel and the Handling of
the Committee agreed to pre-approve the contracting
202 of the Sarbanes Oxley Act, the Committee agreed to
Accusations approved according to the provisions
of certain auditing services and those unrelated to the
pre-approve the contracting of certain auditing services
of the Sarbanes Oxley Act, the Committee issued its
audit, to be provided by the external auditors.
and those unrelated to the audit, to be provided by the
opinion on each of the accusations presented, provided
At its extraordinary meeting N°6 /2008 held
external auditors, presented on that occasion for its
guidelines to follow in each of these and confirmed that
on June 13, 2008, the Audit Committee examined
prior approval.
the chairman of the Audit Committee should determine
the comparative presentation of the IFRS with the
ANNUAL REPORT
At its ordinary meeting N°8/2008 held on October
EXPENSES OF THE AUDIT COMMITTEE DURING
29, 20 0 8, the Audit Commit te e e xamine d the
2008
of Enersis S.A. as of September 30, 2008, its notes,
The Audit Committee did not make use of the operating
statements of income and material information. In
expense budget in 2008 as approved by the company’s
accordance with the procedures relating to the Ethics
general shareholders meeting held on April 1, 2008.
Channel and the Handling of Accusations approved
The Committee did not need to hire the services of
according to the provisions of the Sarbanes Oxley
professional consultants for the performance of its
Act, the Committee issued its opinion on each of the
duties.
accusations presented, provided guidelines to follow in
each of these and confirmed that the chairman of the
it in the opinion of the chairman. As stated in Section
202 of the Sarbanes Oxley Act, the Committee agreed to
pre-approve the contracting of certain auditing services
and those unrelated to the audit, to be provided by the
external auditors.
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ANNUAL REPORT
04. SENIOR EXECUTIVES
REGIONAL CHIEF
ACCOUNTING
OFFICER
CHIEF
COMMUNICATIONS
OFFICER
REGIONAL CHIEF
PLANNING &
CONTROL OFFICER
CHIEF EXECUTIVE
OFFICER
CHIEF HUMAN
RESOURCES OFFICER
LEGAL COUNSEL
CHIEF AUDIT
OFFICER
CHIEF REGIONAL
FINANCE OFFICER
Fernando Isac
Comas
Economist
Universidad de
Zaragoza
Tax No.: 14,733,649-7
José Luis Domínguez
Covarrubias
Civil Engineer
Católica de Chile
Tax No.: 6,372,293-6
Ramiro Alfonsín
Balza
B.A. in Business
Administration
Católica de Argentina
Tax No.: 22,357,225-1
Ignacio Antoñanzas
Alvear
Mining Engineer
Universidad Politécnica
de Madrid
Tax No.: 22,298,662-1
Francisco Silva
Bafalluy
Public Administrator
Tax No.: 7,006,337-9
Domingo Valdés
Prieto
Lawyer
Tax No.: 6,973,465-0
Antonio Zorrilla
Ortega
Mining Engineer
Universidad Politécnica
de Madrid
Tax No.: 22,551,385-6
Alfredo Ergas
Segal
Commercial Engineer
Tax No.: 9,574,296-3
ANNUAL REPORT
05. ORGANIZATION STRUCTURE
SEVERANCE PAID TO SENIORS EXECUTIVES
& MANAGERS
CHAIRMAN
The sum of 114 million Chilean pesos was paid in 2008 for
this concept.
06. HUMAN RESOURCES COMPOSITION
CHIEF EXECUTIVE OFFICER
Ignacio Antoñanzas Alvear
The distribution of Enersis personnel, including information
related to subsidiaries in the five countries where the Group
operates in Latin America as of December 31, 2008, is the
Chief Communications Officer
José Luis Domínguez
Covarrubias
Chief Audit Officer
Antonio Zorrilla Ortega
following:
Company
Chief Human Resources
Officer
Francisco Silva Bafalluy
Chief Regional Accounting
Officer
Fernando Isac Comas
Chief Regional Finance
Officer
Alfredo Ergas Segal
Chief Regional Planning
& Control Officer
Ramiro Alfonsín Balza
Legal
Counsel
Domingo Valdés Prieto
SENIOR EXECUTIVES & MANAGEMENTS FEES
SENIOR EXECUTIVES AND MANAGEMENT
The total gross remuneration received during 2008
INCENTIVE PLANS
by the senior executives mentioned above and other
managers of Enersis who do not report directly to the
Enersis has an annual bonus plans for its executives
chairman or the chief executive officer, totaled 3,108
based on compliance with objectives and the individual
million Chilean pesos.
level of contribution to the company’s results. This plan
includes a definition of the bonus range according to
levels of executive hierarchy. The bonuses ultimately
granted to the executives consist of a determined
number of gross monthly salaries.
Managers
Professionals
& Senior
& Technicians
Executives
Workers &
Others
Total
Enersis
24
124
84
232
Endesa Brasil (1)
49
2,394
363
2,806
Endesa Chile (2)
65
2,120
257
2,442
Chilectra
27
533
157
717
Edesur
28
1,893
669
2,590
Edelnor
14
346
211
571
Codensa
16
916
0
932
Synapsis (3)
12
701
97
810
CAM (4)
13
1,159
424
1,596
4
16
17
37
252
10,202
2,279
12,733
Manso de Velasco (5)
TOTAL
Notes:
(1) Includes Ampla, Coelce, CIEN, Cachoeira Dourada, Fortaleza & CTM.
(2)Includes Ingendesa, Pangue, Pehuenche, Celta, San Isidro, Central
Costanera, El Chocón, Edegel, Emgesa, Enigesa, Endesa Argentina,
Fundación Endesa Colombia, EEPSA, CEMSA, Dock Sud & Túnel el Melón.
(3) Includes Synapsis Argentina, Synapsis Brasil, Synapsis Chile, Synapsis
Colombia & Synapsis Perú.
(4)Includes Cam Argentina, Cam Brasil, Cam Chile, Cam Colombia & Cam
Perú.
(5) Includes Soc. Agrícola de Cameros, Aguas Santiago Poniente, Const. y
Proyecto Los Maitenes, & Agrícola e Inmobiliaria Pastos Verdes.
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ANNUAL REPORT
THE COMPANIES BUSINESSES
ANNUAL REPORT
01. HISTORICAL SUMMARY
Businesses Structure
On June 19, 1981, Compañía Chilena de Electricidad S.A.
formed a new corporate structure which gave birth to
a parent company and three subsidiaries. One of these
was Compañía Chilena Metropolitana de Distribucion
Electrica S.A. In 1985, under the privatization policy
of the Chilean government, the process of transferring
the share capital of Compañía Chilena Metropolitana
Generation
Distribution
de Distribucion Electrica S.A. to the private sector
was begun, ending finally on August 10, 1987. In this
process, the pension fund managers (AFPs), company
employees, institutional investors and thousands of small
shareholders joined the corporation Its organizational
structure was based on activities or operating functions
whose results were evaluated functionally and its
profitability was limited by a tariff structure as a result
of the company’s exclusive dedication to the business
(*)
of electricity distribution.
In 1987, the company’s board proposed forming a
division for each of the parent company’s activities.
(*) Transmission
Four subsidiaries were therefore created to manage
Other Businesses
themselves as business units each with its own objects,
thus expanding the company’s activities toward other
non-regulated activities but linked to the main business.
This division was approved by the extraordinar y
shareholders meeting of November 25, 1987 which
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ANNUAL REPORT
02. EXPANSION AND DEVELOPMENT
defined their new corporate objects. Compañía Chilena
The development of the electricity distribution
Metropolitana de Distribucion Electrica S.A. thus became
business abroad has been implemented jointly with
an investment holding company.
its subsidiary Chilectra, a company that distributes
Enersis started its international expansion in 1992
electricity in the Metropolitan Region of Santiago,
through acquiring holdings in different privatization
Chile.
processes in Latin America, thus developing a significant
On August 1, 1988, as resolved at the extraordinary
shareholders meeting of April 12, 1988, one of the
companies that arose from the division changed its
Its investments in electricity generation in Chile
name to Enersis S.A. At the extraordinary shareholders
and abroad have been developed mainly through its
meeting of April 11, 2002, the company’s objects were
subsidiary Empresa Nacional de Electricidad S.A. (Endesa
modified, introducing telecommunications activities and
Chile).
presence in the electricity sectors of Argentina, Brazil,
Colombia and Peru.
1992
the investment and management of companies whose
In addition, it is involved in businesses that
• On May 15, it acquired a 60% shareholding and
businesses are in telecommunications and information
complement its principal ones through majority holdings
control of the generator Central Costanera, now
technology, and internet trading businesses.
in the following companies:
Endesa Costanera, in Buenos Aires, Argentina.
In 1988, and in order to successfully meet its
Synapsis Soluciones y Servicios IT Ltda., that provides
• On July 30, it was adjudicated 51% of Empresa
development and growth, the company was split
services and equipment related to the computer business
Distribuidora Sur S.A., Edesur, an elec tricit y
into 5 business units which in turn gave birth to
and data processing.
distributor in the city of Buenos Aires, Argentina.
five subsidiaries. Of these, Chilectra and Río Maipo
Inmobiliaria Manso de Velasco Ltda., committed to the
were responsible for electricity, Manso de Velasco
real-estate business through the integral development
1993
concentrated on electrical engineering and construction
of real-estate projects and the administration, rental,
• In July, it bought the generator Hidroeléctrica El
services, plus real-estate management, Synapsis in the
purchase and sale of the property assets of Enersis and
Chocón, located in the province of Neuquén and
area of information technology and data processing,
its subsidiaries in Chile.
Río Negro, Argentina.
while Diprel focused on providing procurement and
commercialization of electrical product services.
Compañía Americana de Multiservicios Ltda. (CAM),
whose business is related to trade and other networking
1994
Today, Enersis is one of the biggest private electricity
operations for public-utility companies, preferably in
• In July, Enersis acquired for 176 million dollars the
groups in Latin America in terms of consolidated assets
utility metering service systems and as an agent in
60% of the share capital of Empresa de Distribución
and operational income, achieved through steady and
purchasing, importing and exporting, as well as a trader
Eléctrica de Lima Norte S.A., Edelnor, in Peru. It also
balanced growth in its electricity businesses, generation
and supplier of materials for Enersis subsidiaries and
acquired Edechancay, another electricity distributor
and distribution, as well as other related businesses.
third parties.
in that country, which was later absorbed by the
former.
ANNUAL REPORT
• At the end of the year, Enersis acquired an additional
1.9% of the share capital of Endesa Chile, increasing
its shareholding to 17.2%.
1997
• On September 5, it acquired for 715 million dollars a
• On December 28, Enersis was adjudicated 40% of
the share capital of Esval, in Chile’s 5th Region.
78.9% shareholding in Centrais Elétricas Cachoeira
Dourada, Brazil.
1999
• On September 15, Enersis successfully took part in
• ENDESA S.A., a spanish company, became the
the capitalization of Codensa S.A. E.S.P., acquiring a
controller of Enersis. Through a public share offering,
shareholding of 48.5% for 1,226 million dollars. This
the multinational company acquired an additional
company distributes electricity in the city of Bogotá
holding of 32% in Enersis which, together with the
and the department of Cundinamarca, Colombia. It
32% already acquired in August 1997, gave it a
1996
was also adjudicated 5.5% of Empresa Eléctrica de
total holding of 64%. This transaction, completed
• On Februar y 15, Ener sis reached a 25.28 %
Bogotá.
on April 7, 1999, involved an investment of 1,450
1995
• On December 12, Enersis acquired an additional
39% in Edesur to give it control of the company.
• It also acquired the generator Edegel in Peru.
shareholding in Endesa Chile and, on April 15,
Endesa Chile became a subsidiary of Enersis.
• It invested in the sanitation market with the
acquisition of Agua Potable Lo Castillo S.A.
• On September 15, it acquired a 75% shareholding,
million dollars. As a result of the capital increase
for an amount of 951 million dollars, in Emgesa, a
made in 2003, this shareholding reduced to the
Colombian generator.
present 60.62%
• ENDESA S.A. acquired 32% of Enersis.
• On December 20, Enersis entered the Brazilian
• On May 11, Enersis acquired 35% of Endesa Chile
which, added to the 25% already held, enabled
market with the acquisition of a large block of shares
1998
it to obtain a 60% shareholding in the generator
in the previously-called Companhia de Eletricidade
• On April 3, Enersis again entered the Brazilian
and made it the parent company. It therefore
do Río de Janeiro S.A., Cerj, a company that
market, this time being adjudicated 89% and control
consolidated its position as one of the principal
distributes electricity in the city of Río de Janeiro and
of Companhia Energética de Ceará S.A., Coelce,
private-sector electricity groups in Latin America.
Niteroi, Brazil. Its present name is Ampla Energía e
for 868 million dollars. This company distributes
Serviços S.A.
electricity in the north-east of the country, in the
2000
state of Ceará.
• As part of its Genesis Plan strategy, the subsidiaries
• On December 20, its acquired a 99.9% shareholding
in Central Hidroeléctrica de Betania S.A. E.S.P, in
Colombia.
• On April 22, Enersis acquired a 100% shareholding
in Aguas Cordillera, Santiago, Chile.
Transelec, Esval, Aguas Cordillera and real-estate
assets were sold for 1,400 million dollars.
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ANNUAL REPORT
• In March, Enersis informed the SVS about the merger
2001
2004
• Large investments were made: 364 million dollars for
• The Ralco hydroelectric plant began operations. This
of Elesur and Chilectra by the absorption of the latter
increasing its shareholding in Chilectra, in Chile; 150
is located in Chile’s 8th Region and contributes 690
by the former. The legal effects of this merger were
million dollars in the acquisition of 10% of the share
MW of capacity.
capital of Edesur, in Argentina, a percentage that
effective from April 1, 2006.
• In June, Edegel and Etevensa were merged, the latter
was held by the company’s employees; 132 million
2005
a subsidiary of Endesa Internacional (now Endesa
dollars to increase its shareholding in Ampla, in
• On April 18, the subsidiary Endesa Eco was formed
Latinoamérica) in Peru.
Brazil; 23 million dollars to increase its shareholding
to promote and develop renewable energy projects
• On September 29, Endesa Chile, ENAP, Metrogas
by 15% in Río Maipo, in Chile, and 1.6 million dollars
like mini-hydroelectric, wind farm, geothermal, solar
and GNL Chile signed an agreement defining the
to increase its shareholding by 1.7% in Distrilima,
and biomass projects, and to act as the depositary
structure of the liquefied natural gas (LNG) project in
in Peru.
and trader of the emission reduction certificates
which Endesa Chile participates with a 20% holding
produced by such projects.
and which forms part of the strategy for meeting the
2002
• The subsidiary Endesa Brasil S.A. was formed
lack of natural gas from Argentina.
• In Brazil, Central Termoeléctrica Fortaleza in the
with all the assets held in Brazil by the Enersis
state of Ceará was adjudicated to the company.
Group and Endesa Internacional (now Endesa
2007
The commercial operation also began of the
Latinoamérica): CIEN, Fortaleza, Cachoeira Dourada,
• In March, the company Centrales Hidroeléctricas de
second phase of the electricity interconnection
Ampla, Investluz and Coelce. It now has the IFC
Aysén S.A. (HidroAysén) was formed, to develop
between Argentina and Brazil, CIEN, completing a
(International Finance Corporation) as a shareholder,
and exploit the hydroelectric project in the region of
transmission capacity of 2,100 MW between both
which contributed a sum equivalent to 50 million
Aysén, called the “Aysén Project”, which will imply
countries.
dollars.
2,750 MW of new installed capacity for Chile.
• In April, the first phase of the San Isidro combined-
2003
2006
cycle thermal plant, second unit, with a capacity
• Assets of 757 million dollars were sold, including
• During February, the Termocartagena (142 MW)
of 248 MW, was made available to Economic Load
the Canutillar generating plant and the distributor
plant in Colombia, which operates with fuel oil
Río Maipo in Chile.
or gas, was bought for approximately 17 million
dollars.
Dispatch Center (CDEC-SIC).
• In September, the merger was completed of the
Colombian generating companies, Emgesa and
Betania.
ANNUAL REPORT
• On October 11, ENEL S.p.A. and ACCIONA, S.A.
03. FINANCIAL ACTIVITIES
to be traded in the Latin American Securities Market
(Latibex) of the Madrid Stock Exchange, with the ticker
took over control of Enersis through ENDESA
S.A. and Endesa Internacional, S.A. (now Endesa
The financial activities of the Enersis Group have always
Latinoamérica).
number XENI.
been an important and priority matter. Work has been
In May 2003, Enersis signed a bank loan for 1,388
• During November, the Palmucho hydroelectric plant
carried out on improving the financial profile of both
million dollars, called “Jumbo II”, and between June and
started up its commercial operations. This plant is
Enersis and its subsidiaries, with capital and debt
December made a new capital increase which enabled
located at the foot of the Ralco plant dam on the
issues carried out on the best conditions existing in
the company’s capital base to increase by over 2,000
Upper Biobío in Chile’s 8th Region, and contributes
the market.
million dollars. Refinancing transactions were also
32 MW of capacity to the SIC.
• Canela was inaugurated on December 6, the first
The following are among the most relevant financial
events in the history of Enersis:
completed for more than 4,000 million dollars using
different instruments like new syndicated loans, bond
wind farm on the SIC. Canela is located in the
Between 1988 and 1992, Enersis’s shares began to be
issues on the domestic and foreign markets, prepayment
village of that name in the Region of Coquimbo
traded on the local stock exchanges and, on October 20,
of the “Jumbo II” loan and other smaller transactions.
and contributes 18 MW to the SIC.
1993, on the New York Stock Exchange (NYSE), through
During 2004, debt of 2,100 million dollars was
ADS with the ticker number ENI.
2008
In February 1996, Enersis made a second issue
refinanced and an international loan for 350 million
dollars maturing in 2009 was signed.
• In January, the second phase of the San Isidro II
of shares on both the local and international (ADS)
In 2007, two loans of 200 million dollars each were
combined-cycle thermal plant began its commercial
markets. It also issued bonds in the United States for a
obtained, by both Enersis and Endesa Chile, maturing
operation of its second unit, with an installed
total amount of 800 million dollars, with maturities in
in 2010.
capacity of 353 MW.
2006, 2016 and 2026.
• On March 24, the dual operation of Unit No.1 of
In February 1998, Enersis again increased its capital
the Tal-Tal thermal plant began operations, with an
and issued convertible bonds amounting to 200 million
installed capacity of 245 MW.
dollars.
DOMESTIC FINANCES in 2008
In February 2008, Enersis registered a domestic line
• In June 27, the Ojos de Agua mini-hydroelectric plant
In 2000, it made a further capital increase of 525
of bonds for UF 12.5 million which is currently available
began operations, contributing 9 MW of installed
million dollars approximately, and in July 2001, it
and not issued, and in June a term loan agreement was
capacity to the SIC.
signed a bank loan for close to 500 million dollars. On
signed for another 200 million dollars and another loan
December 17 the same year, the shares of Enersis began
for the same amount.
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ANNUAL REPORT
In September, a partial prepayment was made of the
revolving credit facility whose agent bank is BBVA, for a
million dollars was in the form of a revolving facility
year with total available cash of 1,024 million dollars,
which is available for drawing at the end of 2008.
Enersis with 214 million dollars and Endesa Chile with
total of 200 million dollars with which, as of December
Drawings were also made under existing revolving
31, 2008, there was a principal debt outstanding of
credit facilities, whose agents are Caja de Madrid and
The consolidated financial debt of Enersis as of
150 million dollars and a balance of 200 million dollars
The Bank of Tokyo Mitsubishi for a total of 165 million
December 2008 decreased with respect to the end of
available for drawing.
dollars and 69 million dollars respectively, with which
2007 due to the depreciation of local currencies and a
these facilities were fully drawn.
greater cash generation. The Enersis Group ended with a
Regarding refinancing agreements, on October
810 million dollars.
17, amendments were signed to the two revolving
In December, bonds series M were placed on the
total of 7,847 million dollars. Of this, 4,343 million dollars
credit facilities of Enersis and three of Endesa
domestic market for UF 10 million (some 341 million
is with Endesa Chile (consolidated) and 3,504 million
Chile, all contracted in 2004 and 2006, in order to
dollars) with final maturity in December 2029, equal
dollars with Enersis and its foreign subsidiaries. This debt
significantly reduce the restrictions in the respective
semi-annual repayments starting in December 2020
is divided mainly between bank debt and domestic and
bank documentation. The principal changes included:
and a nominal interest rate of 4.75%.
international bonds. The consolidated cash position of
an increase in the trigger for cross-default materiality
Regarding the two revolving credit facilities for
to 50 million dollars together with a requirement of an
200 million dollars each contracted in late 2006 by
overdue payment for that same amount; a reduction
Enersis and Endesa Chile to maintain the liquidity of
in the number of financial covenants; a more relaxed
both companies, these were not drawn during 2008 so
leverage covenant for Endesa Chile; a modification to
Enersis and Endesa Chile ended the year with a total
the documentation reflecting the adoption of IFRS, and
available balance for drawing under revolving facilities of
While the second half of 2008 was marked by the financial
other changes of definitions and conditions that provide
400 million dollars each. Both Enersis and Endesa Chile
crisis that affected the principal economies of the world,
a greater flexibility to both companies.
also have, at the end of 2008, lines of credit available
the foreign subsidiaries of the Enersis Group continued
for drawing in the domestic market for the equivalent of
to refinance their debt at longer term. This despite the
185 million and 196 million dollars respectively.
credit restrictions and reduced access to capital markets.
With respect to the financial activities of Endesa Chile,
finance was contracted in June 2008 for a total of 400
Enersis closed at 2,045 million dollars, ending with a net
debt of 5,802 million dollars.
INTERNATIONAL FINANCES IN 2008
million dollars, whose agent bank is BBVA Bancomer,
In addition to the credit facilities and as a way of
The foreign subsidiaries have continued to seek financing
of which 200 million dollars was drawn as a syndicated
safeguarding the liquidity of both Enersis and Endesa
in local currency and at longer terms, to the extent that
loan with a six-year bullet repayment and an annual
Chile and meeting the maturities due in 2009, both
their operating cash flows are in those currencies and that
interest rate of LIBOR + 0.75%. The balance of 200
companies, on an unconsolidated basis, closed the
markets permit it on reasonable conditions.
ANNUAL REPORT
Consequently, the foreign subsidiaries carried out
the proceeds of medium-term bank loans obtained in
financial transactions in 2008, both refinancing and
December 2007. Coelce in May signed a bank loan to
new issues and hedging, for a total equivalent to
finance its investments in the 2008-2009 period for
Exchange Rate
2,209 million dollars, of which 125 million dollars were
203 million dollars, a transaction carried out through
The Group’s exchange rate hedging policy is based on
in Argentina, 594 million dollars in Brazil, 793 million
state entities that permitted it to gain access to low-
cash flows and its objective is to keep a balance between
dollars in Colombia and 697 million dollars in Peru.
cost funds.
flows indexed to foreign currency (US$) and the levels
The following are some of the more important
financial transactions of 2008:
HEDGING POLICY
of assets and liabilities in that currency. During 2008,
Colombia
Enersis’s financial transactions enabled it to maintain a
In generation, Emgesa contracted short-term debt
level of dollar liabilities matched to the expected flows
Argentina
during 2008 for approximately 147 million dollars
in that currency.
Costanera refinanced maturities for 60 million dollars
(including renewals). The distributor Codensa refinanced
with medium-term bank loans and supplier credit. El
short-term maturities through a domestic bond issue
Interest Rate
Chocón contracted an interest-rate swap at a 3-year
for 214 million dollars.
The Enersis Group’s policy consists of maintaining
term for approximately 50 million dollars which enabled
hedge levels, total fixed-rate debt and/or hedged debt
it to fix the interest rate for the whole term of the loan. It
Peru
over total net debt, within a band of more or less 10%
also refinanced debt of 12 million dollars, which enabled
Edelnor placed domestic bonds for approximately 63
with respect to the hedging level established in the
it to re-denominate part of its debt into local currency,
million dollars with terms of between 3 and 8 years,
annual budget. During 2008, interest rate swaps were
according to the indexation of its flows, and extend the
using the proceeds to refinance debt maturities. Edegel
therefore contracted for 77 million dollars, achieving
average term. Edesur signed a bank loan for 3 million
issued bonds in dollars and local currency for 29 million
a consolidated fixed-rate or hedged debt to total net
dollars at short term in the domestic market in order to
dollars, the proceeds being used to refinance maturities
debt ratio of 86%.
refinance part of its debt.
and prepay debt. Bank loans were also signed during
the year for 96 million dollars (including renewals). In
CREDIT RATING
Brazil
March, a financial lease was signed for project financing
In January, Ampla refinanced bank loans for 60 million
for 90 million dollars at a 9-year term. An interest-rate
On November 9, 1994, Standard and Poor’s and Duff
dollars corresponding to its 2010 maturities, extending
swap was also contracted for 30 million dollars to fix
& Phelps rated Enersis for the first time as BBB+, i.e.
the term from 2 to 5 years and reducing the interest rate.
the rate on a 5-year floating-rate loan.
an investment grade company. Later, in 1996, Moody’s
In March, it repaid bonds for 163 million dollars from
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ANNUAL REPORT
rated the company’s foreign currency long-term debt
PROPERTIES AND INSURANCE
as Baa1.
To offer the best electricity service in
Latin America
Over time, most of the credit ratings have varied. All
The company owns some equipment and substations
are now investment grade with stable outlook, based on
in the Santiago Metropolitan Region. The company
Quality of ser vice is an important matter for the
the diversified asset portfolio, the liquidity and suitable
holds insurance against risks such as fire, lightning,
organization. We are aware that we supply an essential
debt service policies.
explosions, malicious acts, earthquakes, floods, alluvium
service for the social and economic development of the
and others.
communities where we operate. We therefore force
The year 2008 required an especially demanding
credit rating from the rating agencies because of the
difficult global conditions in the capital markets and
ourselves every day to be more effective and to know
REGISTERED NAMES
the growing uncertainty with respect to the payment
capacity of the companies analyzed.
In a complex environment, or a clear recession and a
growing number of companies with financial problems,
with their needs. As a company, we have an attentive
The corporation holds the following registered trade
organization constantly in contact with the market and
names: Enersis, Chispazos, Dixsa, EnersisPLC e Internet
its different players.
a la velocidad de la luz Enersis PLC.
the rating agencies were focused on liquidity, maturities,
renewal or refining strategy and availability of lines of
04. LINES OF ACTION
networks.
At the same time, one of our main challenges has been
International Credit Ratings
BBB, Stable
In practice, we have reduced the number of power
cuts per year, their duration and the reliability of the
credit.
S&P
our customers in order to offer solid solutions in line
Moody’s
Fitch
Baa3, Stable
BBB, Stable
Domestic Credit Ratings
Feller Rate
Fitch
Shares
1st Class level 1
1st Class level 1
Bonds
AA-, Stable
AA-, Stable
The principal objective of Enersis is to maximize the
to contribute to the security of electricity supplies in
economic value of its equity through stable growth,
the five countries where we operate, accompanying the
based on rigorously evaluated and managed electricity
growth in demand with a mix of generation compatible
businesses. Compliance with this objective is based on an
with care for the environment.
investment strategy focused on increasing the economic
value of the subsidiary and associate companies, and
making each of our operations
the acquisition of new companies.
profitable
Enersis has based its strategy on offering the best
electricity service in Latin America, making each of
During 2008, our company continued to improve the
our operations profitable, maintaining a solid financial
returns of the principal subsidiaries in both the electricity
position, increasing the value for our shareholders and
Generation and Distribution businesses. For example, the
evaluating the best growth options.
returns on operating revenues in both lines of business
ANNUAL REPORT
showed important improvements, the result of the
complex scenario the market faced, both in Chile and
constant application of improvements to production
internationally. In addition, the value of the company
processes, as a result of the constant investigations
over the last five years has grown at a weighted 14%.
carried out.
This is the result of the better market perception of the
diversification of the businesses managed by Enersis. In
maintain a solid financial position
fact, our Group successfully capitalized on the growth
shown by the economies of the five countries where
Maintaining healthy ratios and the natural match
we operate.
of currencies between cash flows and third-party
obligations, plus hedging against fluctuations in interest
Investment opportunities
and exchange rates, together with strong liquidity and
access to local and international markets, has been
Enersis is constantly evaluating the best growth options
indispensable for having a better and healthier financial
in both lines of business and the countries where it is
structure.
currently operating. The company analyzes rigorously
Despite the difficult context of the markets, the
the different alternatives, taking into account the
international credit rating of Enersis was held at BBB
contribution that these could make to the points
(stable), the rating remaining at investment grade
commented on above.
by all the rating agencies. Similarly, the domestic
A key factor in this matter is to make investments that
rating agencies also maintained their local rating of
require significantly the experience, management skills
AA- (stable).
and operating capacities of Enersis and its subsidiaries.
This requirement demands making investments in
increase value for our shareholders
companies in which a clear influence can be made in
their management and operation, and also the power
During 2008, our share price on the local market
showed a rise of 3% over December 2007, despite the
to approve or reject their investment projects.
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ANNUAL REPORT
RISK FACTORS
ANNUAL REPORT
RISK FACTORS
Enersis is a corporation whose assets correspond mostly
Almost 62% of our consolidated generating capacity
to investments made in its subsidiaries. In order to meet
in Latin America is hydroelectric so adverse hydrological
our financial obligations, we rely on the dividends,
conditions can have a negative impact on the business
loans, interest payments, capital reductions and other
and its operating results.
payments that we receive from our subsidiaries, plus the
issuance of our own shares and our debt capacity.
During drought periods, the electricity supplied by
thermal plants is dispatched with greater frequency;
Given the nature of the business, as well as to the
this includes the electricity supplied by those generators
geographical diversification of our investments, there
that use natural gas, fuel oil or coal as fuel. Operating
are a number of risk factors that could threaten the
expenses increase during these periods and, depending
stability of our businesses in any of the countries where
on the scope of the contracted commitments and with
we operate.
a view to complying with these contracts the need may
However, our long experience in the electricity
arise to buy electricity from third parties. The cost of
business in the region has taught us to look for and
these electricity purchases on the spot market may
apply all possible preventive measures aimed at avoiding
exceed the agreed price, causing losses. Our generating
or moderating unforeseen events or the damage that
companies have therefore developed a prudent
outside issues could cause to our business.
commercial policy that consists basically of contracting
Even though risk factors often appear in a combined
approximately 70% of the capacity, thereby reducing
form or have correlated effects, for purposes of this
exposure to abrupt variations in the spot market during
Annual Report only, we present the following main
periods of water scarcity.
structure:
Should any of the regulator y bodies impose a
rationing policy resulting from extremely adverse
OPERATIONAL / COMMERCIAL RISKS
hydrological conditions in the countries where we
An important part of the business of some of our
well as the operating results could be affected. The
subsidiary companies relies on the hydraulic conditions
above, however, is monitored by the commercial area
of the areas in which they operate so eventual droughts
of each company in order to avoid the negative effects
can have a negative impact on Enersis’s earnings.
brought on by these circumstances.
operate, the commercial and financial conditions as
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ANNUAL REPORT
In Argentina, the low price that the regulatory bodies
The results of the Enersis subsidiary and associate
monetary assets in the country where our subsidiaries
imposed on natural gas has directly affected production
companies rely in turn on the macroeconomic
and investments operate are not included in the
and investments in the deposits of this hydrocarbon,
conditions of the country in which they operate. The
reported balance sheet, since devaluations of local
which at the same time has an impact on the availability
product growth rate and variations in aggregate
currency against the dollar or the Chilean peso are not
of this fuel in Chile. The shortage of natural gas can
economic activity intensive in electricity consumption
reflected. Precisely in order to moderate the impact of
oblige the generators of electricity to resort to the use
impact on energy demand and therefore the level of
local currency appreciations or devaluations against the
of fuel oil, which substantially increases the cost of
sales. Inflation, exchange rates and the evolution of
U.S. dollar, the debt of the subsidiaries is denominated
production.
interest rates are all important elements in determining
in their respective local currency.
Strong electricity demand in the central region of
the financial results of the companies. In this sense,
Finally, Enersis has debt subjec t to financial
Chile, together with the low level of investment in the
even though the diversification of the flows in five
covenants and other standard contractual restrictions
electricity sector, exposes this sector to the adverse
countries, in two lines of business, constitutes a natural
related to debt-EBITDA and debt-equity ratios. A
effects of the Argentine natural gas crisis.
hedge, the Enersis Group uses financial products for
significant part of Enersis’s debt has cross-default
moderating the eventual impact of dramatic changes
clauses that in general could lead to a debt acceleration
ECONOMIC / FINANCIAL RISKS
in exchange and interest rates.
when other debts exceeding 30 million dollars are
The way in which we value the company’s foreign
in default, on an unconsolidated basis. Should the
The ability of the subsidiaries to pay dividends, interest
investments, in accordance with Chilean accounting
creditors demand immediate acceleration of the
and loans or make other distributions to the parent
principles, forces the conversion of the non-monetary
commitments, a significant part of our debt would
company is subject to certain legal limits, contractual
assets and liabilities of our non-Chilean subsidiaries
be payable.
restrictions and exchange controls that can be enforced
and associate companies to the dollar at historical
This however has been compensated by Enersis’s
in any of the five countries where the companies operate,
exchange rates. Due to this accounting treatment, it
current financial strength, which has enabled it to
and depends also on the final results.
is possible that the effect of a devaluation on non-
contract unrestricted lines of credit for its business.
ANNUAL REPORT
RISK FACTORS
Lastly, the management’s constant concern, in terms
of having a strong balance sheet and a solid financial
to offer due satisfaction of the institutional and legal
requirements that each country insists on.
situation, has been clearly ratified by the credit-rating
Given the mandatory supply required in the concession
agencies who, unanimously, raised the rating or rating
areas, and as electricity is considered a basic utility, our
outlook of Enersis.
activities can be subject to regulatory fines resulting
from any violation of current regulations, including
POLITICAL / REGULATORY RISKS
energy faults or problems of quality.
Considering that a large part of the Generation and
has investments have been characterized by occasional
Distribution businesses consists of regulated activities,
and drastic interventions by government authorities. For
these are exposed to regulatory and tariff changes by
example, the Argentine authorities have implemented
the authorities in the different countries in which our
a series of monetary control and exchange measures
subsidiary and associate companies operate. These
that have negatively affected the operating results of
actions could, in fact, impact the company’s earnings.
our subsidiaries in that country and could continue to
Some of the Latin American economies where Enersis
The operating subsidiaries are also subjec t to
impact them negatively.
regulations of an environmental nature. However, the
Even though the above-mentioned risks are difficult
constant concern and commitment of the Enersis Group
to anticipate, Enersis permanently monitors the judicial,
on this issue should be pointed out. In fact, each project
legal and sector regulations in order to evaluate
must present an environmental impact assessment as
tendencies that could be unfavorable in these areas to
essential information in its overall evaluation. This
the Group’s businesses in the region.
assessment is then submitted to the authorities in order
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ANNUAL REPORT
DESCRIPTION OF THE ELECTRICITY BUSINESS BY COUNTRY
BRAZIL
ARGENTINA
CHILE
ANNUAL REPORT
01. ELECTRICITY GENERATION
02. ELECTRICITY TRANSMISSION
Electricity generation is mainly carried out through our
For the Enersis Group, the electricity Transmission
subsidiary Endesa Chile. In this business, the Group
business is concentrated on the 2,100 MW interconnection
has subsidiaries operating in Chile, Argentina, Brazil,
line between Argentina and Brazil, through CIEN, a
Colombia and Peru.
subsidiary of Endesa Brasil.
In all, the installed capacity amounted to 13,893 MW
as of December 2008 and the consolidated electricity
03. ELECTICITY DISTRIBUTION
production was 54,672 GWh. Energy sales totaled
62,828 GWh.
Edesur in Argentina, Ampla and Coelce (owned by Endesa
business between hydroelectric and thermal generation
Brasil) in Brazil, Chilectra in Chile, Codensa in Colombia
is natural as the variable costs of generation are different
and Edelnor in Peru. Our principal subsidiaries and related
for each form of production. Thermal generation requires
distribution companies sold 62,806 GWh during 2008.
the purchase of fossil fuels and hydroelectric generation
needs water from reservoirs and rivers.
62% of our consolidated generating capacity comes
from hydroelectric sources while the remaining 38%
is thermal.
The commercial policy that the generator defines is
therefore important for the business.
PERU
COLOMBIA
Our electricity distribution business is carried on through
In the electricity industry, the segmentation of the
Edesur, Ampla, Coelce, Chilectra, Codensa and Edelnor
serve the principal cities of Latin America and provide an
electricity service to over 12 million customers.
These companies face an increasing demand for
energy, obliging them to invest constantly both because
of natural growth and for the maintenance of their
facilities.
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ANNUAL REPORT
Argentina
01. INDUSTRY STRUCTURE
The transmission sector comprises companies that
freely negotiated contracts or at the spot market price set
carry electricity from the generation points to the
by the Compañía Administradora del Mercado Mayorista
consumption points, on the basis of a free-access
Eléctrico S.A. (CAMMESA) which is responsible for the
system. This segment is organized on a regulated basis
operation of the MEM.
which requires it to operate, maintain and provide to
There are three kinds of prices for valuing energy
third parties access to their transmission systems and
transactions: contractual, seasonal and spot. The price
are authorized to charge a toll for this. However, these
paid by the distributors for the electricity obtained on
companies are forbidden from generating or distributing
the SIN (national grid) is an average spot or seasonal
electricity.
price that CAMMESA sets every six months and adjusts
Distribution covers the transfer of electricity from the
every three months according to the prices sanction
transmitters’ supply points to the users. Distribution
mechanism established by Resolution S.E. Nº 240 if 2003
Law 24,065 of January 1992, the Argentine Electricity
companies operate as geographic monopolies, providing
and that the Secretary for Energy approves according
Law, divides the electricity industry into three sectors:
the service to users within a specific region. Distributors’
to supply, demand, available capacity and other
generation, transmission and distribution.
tariffs therefore are regulated and the companies are
factors. Contracted prices are agreed freely between
the parties.
The generation sector is organized on a competitive
subject to service specifications. While distribution
basis with independent producers that sell their
companies can acquire electricity that they need to meet
Finally, the spot price is used in transactions between
produc tion on the Wholesale Elec tricit y Market
demand from the MEM, at seasonal prices or under
generators to cover their generating deficits or surpluses
(MEM) or under private contracts with other parties
contracts with generating companies, they all prefer
with respect to the contractual commitments. The final
in the MEM.
to buy electricity on the MEM as they are only allowed
price paid for these transactions includes the spot price
to pass on the seasonal prices that reflect the average
and a charge for power.
The energy price is a value called Marginal Price of
the System or Market Price, and represents the economic
energy spot price.
The Argentine National Grid (SIN) had a mainly-
cost of generating the next kWh. All the system’s
The Argentine electricity dispatch system, like that
thermal installed capacity of 26,226 MW in 2008, 7.5%
generators charge for their energy at the marginal price
in Chile, is designed to ensure that the least expensive
more than the year before. The grid’s annual generation
affected by a factor that considers the payment of the
electricity reaches the consumer. Generating companies
was 112,313 GWh and sales 105,938 GWh, representing
losses and transport service. They also receive a payment
sell their electricity to distribution companies, energy
increases of 3.5% and 2.9% respectively.
for power made available to it.
traders and large users on the competitive MEM under
ANNUAL REPORT
Generation
Central Costanera
Type
Installed Capacity CÓRDOBA
Thermal
2,324 MW
BUENOS AIRES
Central Arroyito
Type
Installed Capacity Hydro
128 MW
Central El Chocón
Type
1,200 MW
MENDOZA
NEUQUÉN
Distribution
Edesur
Energy Sales
Customers
Energy Losses 16,160 GWh
2.3 million
10.6%
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ANNUAL REPORT
ENDESA COSTANERA
EL CHOCÓN
Enersis participates in electricity generation in Argentina
Located in the city of Buenos Aires, its installed capacity
Located in the provinces of Neuquén and Río Negro, it
through Endesa Costanera and El Chocón in which it has
of 1,138 MW is steam-gas thermal and uses natural
operates one artificial reservoir hydroelectric plant of
direct and indirect shareholdings of 41.8% and 39.2%
gas or fuel oil.
1,200 MW and another of 128 MW that use the waters
respectively
These companies have a combined total of five plants,
totalling 3,652 MW. This capacity in 2008 represented
14% of the installed capacity on the SIN.
The electricity generation of the Enersis Group
It also operates two combined-cycle plants of 859 MW
and 327 MW each, with a total installed capacity of
2,324 MW.
Net generation in 2008 was 8,540 GWh and total
sales 8,543 GWh.
of the Limay and Collón Curá rivers, and having a total
installed capacity of 1,328 MW.
The hydrology year that started on April 1, 2008
was classified as a “medium year”. From the second
half of May, as a result of the high dispatch assigned
reached 10,480 GWh, 9% of the total generated in
The year was characterized by important natural-gas
to plants located upstream of El Chocón and the
that country, with hydroelectric generation accounting
restrictions from May to September, which meant a high
restricted dispatch applied to this plant, and due to
for 19%. Physical energy sales were 11,098 GWh, 10%
consumption of liquid fuels. On the other hand, the
the hydrological conditions, the company reduced its
of the total sold.
high energy prices in the first four months of the year
net generation and sales, reaching 1,940 GWh and
permitted margins to be higher than in 2007.
2,554 GWh respectively.
Endesa Costanera and El Chocón have holdings of
5.51% and 15.35% respectively in companies that are
The continuous functioning of both combined-cycle
During 2008, the company focused on diversifying
building two new combined-cycle plants, initiatives
plants with gas oil during the winter helped the grid
its customer portfolio through trading on other markets
coordinated by the Fund for Necessary Investments that
at its most critical point, above all taking into account
than the spot, giving priority to profitable long.-
Permit Increasing Electricity Supplies on the Wholesale
that the liquid fuel was foreseen only for exceptional
term relations with customers of proven commercial
Electricity Market (FONINVEMEN).
situations.
strength.
During 2008, the operation began in open cycle
The company’s top priority in 2008 was to cover its
With respect to investment projects, it is important
of the gas turbines of the Manuel Belgrano and José
cash needs, managing to reschedule the maturities of
to mention the completion of the raising of the water
de San Martín thermal plants, with the closing of the
its short-term debt.
level at the Arroyito plant reservoir, which will increase
cycles expected for the second half of 2009 when the
In the regulatory area, the MEM continued to be
its generation to around 69 GWh per annum. This new
companies start to recover their credits from the cash
intervened by the authority in the setting of the sale
capacity was classified as New Energy authorized to
flows generated.
price of hourly energy and the payment for that produced
enter the Energy Plus plan conceived by the Argentine
by generators. Through these measures, the company
government, Arroyito being the first hydroelectric plant
received a partial payment of its monthly credits.
in this plan.
Other generators connected to the SIN are AES
Alicura, Capex, Petrobras and Pluspetrol.
ANNUAL REPORT
The concession establishes the obligation of Edesur
2007, of 7.8% for May-October 2007 and 6.4% for
to supply electricity at the request of the owners or
November 2007-April 2008. The adjustment was
Enersis participates in electricity distribution in Argentina
inhabitants of properties within its concession area,
applied from July 1, 2008 and affected the segments
through its subsidiary Edesur in which it has a 65.4%
meet certain quality standards referring the electricity
of residential users with consumption of over 650 kW
direct and indirect shareholding.
supplied, comply with operational requirements with
and users in the general category T2 and T3.
The market share of our Argentine subsidiary, in terms
of physical sales, is approximately 20%.
respect to the maintenance of the distribution assets and
bill customers on the basis of effective metering.
A s a c o m p l e m e n t , b y N o t e 1, 3 8 6 o f t h e
Under-Secretary for Energy, ENRE in November 2008
Other distributors in the Argentine electricity system
In 2008, Edesur provided an electricity service
provided the surpluses of the Program for the Rational
are Empresa Jujeña de Energía (EJESA), Empresa de
to 2,262,231 customers, 1.5% more than the year
Use of Electricity (PUREE) for costing retroactively the
Distribución de Energía de Tucumán (EDET), Empresa
before. Of the total, 87% are residential customers,
7.8% adjustment identified by application of the MMC
Distribuidora de Energía de Santiago del Estero (EDESE),
11.6% commercial, 1.1% industrial and 0.3% other
between November 2007 and June 2008, for the second
Empresa Distribuidora y Comercializadora Norte
customers.
period mentioned above.
(EDENOR) and Empresa de Distribución de la Plata
(EDELAP).
EDESUR
Energy sales amounted to 16,160 GWh, representing a
Lastly, in November 2008 and by Resolution S.E.
2.1% increase over 2007. This was distributed 40.8% to
1.169/2008, a new adjustment was approved to the
the residential sector, 26.1% to the commercial sector,
seasonal price of energy fixed by CAMMESA through
9.1% to industry and 24% to others.
the spot prices sanction mechanism established in
Energy losses were 10.6% in 2008.
Resolution 240/2003. The adjustment meant an increase
The principal objective of Edesur is to distribute and
With respect to the tariff situation, and with the
in the seasonal price of energy, from approximately 49
commercialize electricity in the southern part of the city
publication in the Of ficial Bulletin of Resolution
to 58 Argentine pesos and applied to the tariff for high-
of Buenos Aires, comprising two-thirds of the Federal
324/2008 of ENRE, the first tariff adjustment was
consumption residential, commercial and industrial
Capital region and twelve districts of the province of
applied impacting residential customers since the
users.
Buenos Aires. Its concession area covers 3,309 km2 and
devaluation and “pesification” of January 2002, after
While the adjustments of 2008 have represented
lasts for 95 years from August 31, 1992.
which electricity charges were frozen. The adjustment
important progress, Edesur has still not been able to
This period includes an initial one of 15 years and
recognized compensations for the concept of the Costs
rebuild its economic-financial ratios this year, affected
eight additional ones of 10 years each. On February
Monitoring Mechanism (MMC) which activates every six
by the devaluation. Its management therefore is directed
5, 2007, the electricity regulatory authority (ENRE)
months the process of re-determining the tariff due to
to trying to minimize the effects of this situation.
resolved to extend the initial period by a further five
the distributor’s cost variations. By this resolution, the
years as from the completion of the Integral Tariff
ENRE authorized an adjustment of 9.7% in recognition
Negotiations (RTI).
of the increase in costs for the period May 2006-April
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ANNUAL REPORT
Brazil
to offer reduced tariffs to the customer and ensure the
determined through a financial/economic balance. These
expansion of the system through EPE (Energy Research
are revised and corrected on an annual basis.
Company), a state entity responsible for the planning
In the free-contracting environment, the conditions for
of generation and transmission activities and which
buying energy are renegotiable between suppliers and
defines two spheres of contracting: free and regulated
customers while, in the regulated environment, where
environments.
the distribution companies operate, energy purchases
The contracting of energy by distributors for supplying
their regulated customers is made through a centralized
bidding process.
should be made in a bidding process coordinated by
ANEEL.
The Brazilian SIN has an installed capacity, largely
The Brazilian electricity industry is organized in one large
Another important change was the separation of
hydroelectric, of 102,625 MW in 2008, 2.3% greater
interconnected electricity system called the National
the bidding process for “existing energy” and “energy
than the year before. The annual generation of the
Interconnected System (SIN) that covers most of the
from new projects”. Plants operating prior to 2000
system was 448,748 GWh with sales of 376,948 GWh,
country.
are considered as “existing energy” plants and those
figures that showed an increase of 2.6% in each case.
Generation, transmission and distribution businesses
are separated by law, a situation that prevents
distributors from par ticipating in generation or
transmission activities and in other companies.
completed after 2000 are “energy from new projects”
plants.
ENDESA BRASIL
The first auction for existing generators took place
in December 2004 in which the distributors contracted
Enersis participates in Brazil through Endesa Brasil.
The principal regulatory entity is União, acting
energy for periods of five to eight years, while the first
Enersis began to consolidate Endesa Brasil in October
through the Ministry of Mining and Energy which has
tender for energy produced by future plants was held in
2005, with a direct and indirect shareholding of
exclusive authority over the electricity sector through
December 2005. Various tenders have since taken place
53.6%.
its concessionary and regulatory powers. The sector’s
for both existing and future energy.
The objective of the reorganization of all the assets
Co nc e s sio ns law e s t ab lish e d t hre e t y p e s of
in Brazil was to simplify the organizational structure,
Agency (ANEEL), established in accordance with Law
modifications regarding energy supply for final
thus permitting greater efficiency, transparency in the
9.427/96.
customers, which are the following: programmed tariff
flows and stability of local cash flows, and thus reduce
settings, ordinary correction and extraordinary tariff
financing costs; in addition, to improve financing by third
correction.
parties and lastly to strengthen the Group’s positioning
policies are implemented by the National Electric Energy
During recent years, the electricity industry has
suf fered many changes and transformations. In
March 2004, federal laws N° 10,847 and N° 10,848
Regarding tariffs, these should reflect the operating
established a new model for the sector. This is intended
costs of each company plus a certain return on capital
in considering new investment opportunities.
ANNUAL REPORT
Generation
Central Cachoeira Dourada
Type
Hydro
Installed Capacity 665 MW
BELÉN
MANAUS
Distribution
Coelce
Energy Sales
Customers
2.8 million
11.7%
Ampla
Energy Sales
Customers
2.5 million
20.2%
BRASILIA
GOIANIA
RÍO DE JANEIRO
SAO PAULO
Transmission
CIEN
Installed Capacity
Energy Sales
2,100 MW
2,063 GWh
Central Fortaleza
Type
Installed Capacity Thermal
322 MW
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ANNUAL REPORT
Net generation of Cachoeira in 2008 was 3,308 GWh,
03. ELECTRICITY TRANSMISSION
while sales were 4,403 GWh, both below the level of
Enersis participates in electricity generation in Brazil
the previous year.
The Enersis Group also participates in the transmission
through Endesa Brasil and its subsidiaries Cachoeira
Despite this, the better results for 2008 were the
and trading of elec tricit y in Brazil through the
Dourada and Endesa Fortaleza, in which it has direct
consequence of a prudent commercial policy consisting
interconnection line between Argentina and Brazil,
and indirect shareholdings of 53.4% and 53.6%
of adapting energy sales contracts, plus the high price
CIEN, in which it has a 53.6% holding.
respectively.
in the energy market during the first months.
These two plants, one hydroelectric and the other
thermal, have a total capacity of 987 MW, representing
Investments are planned for 2009 in maintenance of
the plant and four environmental projects.
around 1% of capacity on the SIN.
Enersis Group’s electricity generation in Brazil was
Compañía de Transmisión del Mercosur S.A. (CTM)
is the owner of the Argentine side of the transmission
line and CEMSA is the trading company that has signed
contracts with generators in Argentina for the export of
FORTALEZA PLANT
electricity to Brazil and Uruguay.
hydroelectric production representing 98%. Physical
Located in the district of Caucaia, 50 km. from the
CIEN
energy sales amounted to 7,093 GWh, 2% of the total
capital of the state of Ceará, it is a combined-cycle
energy sold on the system.
thermal plant of 322 MW that uses natural gas.
3,378 GWh, 1% of the country’s total generation, with
Permits the export and import of electricity between
Other generators connected to the SIN are CHESF,
Generation was 71 GWh and its sales totaled 2,690
Argentina and Brazil, in either direction. It has two
Furnas, Cemig, Electronorte, Cesp, Copel, Eletrobras
GWh, 8% higher and 1% lower respectively, compared
transmission lines with a total installed capacity of
and Eletropaulo.
to the previous year.
2,100 MW which cover a distance of approximately 500
CACHOEIRA DOURADA
reduced energy trading margin, reflecting the high spot
The reduced results of this plant were due to the
prices at which it had to buy.
Located in the state of Goias, 240 km. south of
The company’s plans for 2009 are to maintain
Goiania, its installed capacity of 665 MW is pass-
its contractual sales with Coelce and to invest in
through hydroelectric and uses the waters of the
maintenance and environmental works.
Paranaiba river.
km., from Rincón Santa María in Argentina to Itá in the
state of Santa Catarina in Brazil.
Last year, it redesigned its business to produce
revenues from tolls.
In 2008, CIEN’s energy sales were 2,063 GWh, 66%
down on the previous year, resulting from the change
in its business structure. As in 2007, CIEN acted as an
ANNUAL REPORT
exporter and importer of energy from Brazil to Argentina.
being Niteroi, São Gonçalo, Petrópolis, Campos and the
With this operation, it only obtained revenues from
coastal area of Los Lagos.
making its networks available.
COELCE
It provides an electricity ser vice to 2,466,468
This is the electricity distribution company of the state
Regarding the company’s prospects for 2009, the
customers, 3.7% more than the previous year. Of these,
of Ceará, in north-east Brazil, and covers a concession
company will continue to seek permanent remuneration
89.7% are residential, 6.8% commercial, 0.2% industrial
zone of 148,825 km2. The company serves a population
from the Brazilian government. It will also invest in the
and 3.3% other customers.
of more than seven million people.
environment and in maintenance.
Enersis participates in distribution through Endesa Brasil
During 2008, the company sold 9,119 GWh to its end
The customers of Coelce number 2,841,838, of which
customers, representing a 1.5% increase over 2007. Of
75% are residential, 5.3% commercial, 0.2% industrial
this, 39% was sold to residential customers, 12.6% to
and 19.5% other sectors.The number of customers rose
industrial, 18.9% to commercial and 29.5% to other
by 5.7%.
customers.
Energy sales in 2008 were 7,571 GWh, 4.8% higher
and its subsidiaries Ampla and Coelce. Enersis directly
In terms of energy losses, these declined by 1.2
than in 2007. Of this total, 33.2% was to residential
and indirectly holds 69.9% of the share capital of Ampla
percentage points. The rate was 20.2% in December
customers, 18.8% to commercial, 16.8% to industrial
and 34.9% of Coelce.
2008, which compares positively with 21.4% in
and 31.2% to other customers.
The market share of our subsidiaries in Brazil, in terms
of physical sales, was approximately 5%.
December 2007.
The company is continuing to implement better
Total energy losses showed a significant improvement,
reducing from 12.5% in 2007 to 11.7%.
Other distributors in the Brazilian electricity system
technologies and remote solutions to combat the theft
Regarding tariffs, the annual tariff adjustment was
are CPFL, Brasiliana de Energía, AES Elpa, Cemig, Light,
of energy. In 2008, 53,896 customers were connected
made in 2008 with an increase for Coelce of 6.7%,
Coelba and Copel.
to the so-called Ampla Network, totaling 501,047
effective April 2008.
customers to date. This is in line with the company’s
AMPLA
strategy to reduce energy losses year by year.
For 2009, it is planned to continue with the Light for
Everyone Program between the federal government,
Regarding tariffs, an adjustment was made to Ampla’s
Coelce and the state government, and also continue
This is an electricity distribution company that covers
tariffs on March 14, 2008, whose average impact on
with the Ecoelce project, an initiative that offers to
73% of the area of 32,054 km2 of the state of Rio de
consumers meant increases of approximately 11%.
exchange waste (which is then recycled) for discounts
Janeiro. The population of the area is around eight
million people living in 66 districts, the principal ones
There will also be a new tariff revision process, to be
completed in March 2009.
on electricity charges.
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ANNUAL REPORT
Chile
According to the Chilean electricity law, generating
transmission and distribution of electricity associated
companies have to coordinate their operations through
with an efficient operation in order to provide suitable
the Economic Load Dispatch Center (CDEC) in order
signals both to the companies and to consumers, in
to operate the electricity grid at minimum cost while
order to optimize the electricity systems.
preserving service security. The CDEC therefore plans
One of the general criteria is freedom of prices for
and carries out the grid’s operation, including the
those segments where competitive conditions are
calculation of the marginal cost, the price of energy
seen to exist. End users whose connected capacity is
transfers between generators.
2,000 kW or less are therefore considered as regulated
From a physical point of view, the Chilean electricity
customers while those with a connected capacity of over
sector is divided into four electrical systems: SIC (the
2.000 kW are called free customers. However, users who
Central Electricity Grid), SING (the Northern Electricity
are between 500 kW and 2,000 kW have the possibility
The Chilean electricity sector is regulated by three
Grid), and two minor isolated systems in Aysén and
of choosing the segment to which they belong.
government entities that are responsible for the
Magallanes.
Prices at the generation-transportation level are called
application of and compliance with the law: the National
The SIC, the principal electricity grid, is 2,400 km
“Node Prices” and are defined for all the generation-
Energy Commission (CNE), which has the authority
long, from Taltal in the north to Quellón, on the island
transportation substations from which supplies are
to propose the regulated tariffs (node prices) and to
of Chiloé, in the south. With an installed capacity of
made and comprise the price of the peak energy and
prepare indicative plans for the construction of new
9,824 MW as of December 2008, the system is mainly
capacity, and the transmission charge. Prices at the level
generating units; the Superintendency of Electricity and
hydroelectric. Net generation was 41,869 GWh and sales
of distribution, as those of sub-transmission, are set
Fuels (SEC), which regulates and checks compliance
were 39,594 GWh, representing an increase of 7%.
every four years, in alternating even years, the next
with the laws, regulations and technical standards for
The SING covers some 700 km. in the north of the
electricity generation, transmission and distribution,
country, from Arica to Coloso. This system, with an
liquid fuels and gas; and the Ministry of the Economy
installed capacity of 3,610 MW as of December 2008,
As part of the new electricit y regulations, the
which revises and approves the tariffs proposed by
is predominantly thermal. Net generation was 14,502
contracting of energy by distributors for supply to their
the CNE and regulates the granting of concessions to
GWh and energy sales were 13,219 GWh.
regulated customers should be made through open
electricity generating, transmission and distribution
companies, following a report from the SEC.
Current legislation established as a basic premise that
tariffs should represent the real costs of generation,
sub-transmission setting being programmed for the
year 2010.
bidding, three tender processes having taken place
to date.
ANNUAL REPORT
Generation
Generation
Central Tarapacá
Type
182 MW
Central Atacama
Type
781 MW
Central Tal - Tal
Type
245 MW
Central Canela
Type
Installed Capacity ANTOFAGASTA
Central Diego de Almagro
Type
Thermal
SANTIAGO
Central Huasco
Type
80 MW
Central Los Molles
Type
18 MW
Wind Farm
18 MW
Central Curillinque
Type
89 MW
Central Loma Alta
Type
40 MW
Central Pehuenche
Type
570 MW
Central Ojos de Agua
Type
Mini Hydro
TALCA
LINARES
CONCEPCIÓN
Central Bocamina
Type
128 MW
Central San Isidro
Type
732 MW
Central Antuco
Type
320 MW
Central Rapel
Type
377 MW
Central Abanico
Type
136 MW
Central Sauzal
Type
77 MW
Central El Toro
Type
450 MW
Central Sauzalito
Type
12 MW
Central Ralco
Type
690 MW
Central Cipreses
Type
106 MW
Central Palmucho
Type
32 MW
Central Isla
Type
68 MW
Central Pangue
Type
467 MW
Distribution
Chilectra
Energy Sales
Customers
1.5 million
5.9%
65
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ANNUAL REPORT
with Chilectra and CGE, the two largest distributors
the CDEC-SIC determines a deficit risk condition for
in Chile.
the grid.
Enersis participates in electricity generation through
The tightness of supplies, the contraction in demand
The company also collaborated with the security plan,
Endesa Chile and its subsidiaries, the largest electricity
growth, the high cost of fuels and a drought that
participating in the accumulation of water resources
company in the country in terms of installed capacity,
affected the first months of 2008 (a situation that
through thermal generation produced without any
in which it has a direct 60% shareholding.
reversed toward the end of the year) were variables
economic logic.
Endesa Chile and its subsidiaries possess and operate
that largely determined the year’s operating income.
With all these measures, the demand for electricity
a total of 26 generating plants, 16 of them hydroelectric
The tight supply early in the year was due to a
and 9 thermal plants using coal, oil or natural gas,
reduced thaw as a result of the small accumulation of
declined by 1% during 2008.
Finally, both the rains that began at the end of May,
and a wind farm, with a total installed capacity of
snow in the winter of 2007 and the delay in rainfalls
which normalized the hydrological situation of 2008,
approximately 4,893 MW, representing 36% of Chile’s
which did not occur until May. In addition, there was a
and the effect of a fall in the rate of electricity demand
total installed capacity.
prolonged fault at an important thermal plant on the
growth, enabled the delicate supply situation to be
Electricity generation by the Enersis Group was 19,807
SIC. These two events led to the publication in late
overcome.
GWh in 2008, 70% being hydroelectric. This represented
February of a rationing decree effective until August
At the same time and in order to provide security of
35% of the total produced. Physical energy sales
2008, which was extended to the end of October. This
supply, Endesa Chile brought forward by two months the
amounted to 19,808 GWh, 38% of the total sold.
decree included operational measures for improving
start-up of the combined cycle of San Isidro II and began
Other generators connec ted to the elec tricit y
security and the availability of water resources, and
the operation of the ...Ojos de Agua mini-hydroelectric
grid are AES Gener, Colbún, Electroandina, Edelnor
others directed to managing and reducing electricity
plant. These projects together added capacity of 114 MW
and Norgener.
demand, like consumer savings campaigns and voltage
during 2008.
reductions.
ENDESA CHILE
Added to this delicate supply situation in the first
PEHUENCHE
four months, was the insufficient availability of natural
Endesa Chile supplies electricity to the principal
gas from Argentina and the high fuel prices, which
Located in Chile’s 7th Region, it has 3 reser voir
regulated distributors, large unregulated industrial
raised generation costs and electricity prices on the
hydroelectric plants with a total installed capacity of
companies (mainly in the mining, woodpulp and steel-
spot market.
699 MW. Curillinque is fed indirectly from the Maule
Endesa Chile, in addition to the measures included
and La Invernada lakes; Loma Alta also uses the waters
The most important supply contracts of Endesa
in the rationing decree, managed to bring forward the
of the Colorado river, and Pehuenche is fed by the
Chile with regulated customers refer to its contracts
use of the water resources to which it has rights in the
abovementioned sources plus the Melado reservoir and
Maule and Laja reservoirs, in order to generate when
some minor tributories.
making sectors) and on the spot market.
ANNUAL REPORT
Enersis holds, directly and indirectly, 55.6% of the
CELTA
share capital of the company.
Net generation was 3,589 GWh, while sales were
3,614 GWh.
Its two plants are located in Chile’s 1st Region, 65 km
from Iquique. Its installed capacity of 182 MW is steamgas thermal, using coal and oil for generation.
PANGUE
Enersis has a 60% shareholding.
The net generation of Celta was 912 GWh and sales
Loc ated in Chile’s 8 th Region, 10 0 km east of
were 1,062 GWh.
Los Angeles, its installed capacity of 467 MW is
hydroelectric, with reservoir that is fed by the waters
CANELA
of the Bío-Bío river.
It is located in the 4th Region, 80 km north of the Los
The net generation of Pangue was 1,763 GWh and
Vilos town. It has an installed capacity of 18 MW and
sales were 1,961 GWh.
is the first wind farm on the SIC, in which Enersis has
a 45% shareholding.
SAN ISIDRO
It is estimated that the operation of the Canela wind
farm substitutes annually the emission of up to 23,400
Located in Chile’s 5th Region, 8 km from Quillota. It
tons of CO2.
is a combined-cycle plant with dual technology which
enables it to use natural gas and fuel oil for generation.
OJOS DE AGUA
Its installed capacity is 732 MW (San Isidro I of 379 MW
and San Isidro II of 353 MW).
Mini-hydroelectric plant located in Chile’s 7th Region,
fed mainly by filtrations from the La Invernada lake. Its
Both the net generation and sales of San Isidro were
installed capacity is 9 MW.
1,289 GWh during 2008.
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Conscious of the responsibility that our energy
GNL Quintero
Los Cóndores
As part of our strategy for ensuring reliable and varied
T his proje c t under s tud y w ill make us e of the
sources of energy, the company is actively participating
800-meter drop in altitude between Maule Lake and
in the initiative promoted by the government to diversify
the confluence of the Maule River and Las Luces ravine.
the energy matrix; this is through the liquefied natural
The hydroelectric plant, once operative, will have an
gas (LNG) project in Quintero.
installed capacity of 150 MW.
leadership implies, we are developing and analyzing
different projects such as:
TG Quintero
This initiative contemplates a thermal plant in Quintero,
5th Region, with an installed capacity of 250 MW. It will
Endesa Chile has a 20% shareholding in the re-
work in open cycle with diesel oil until liquefied natural
gasification terminal, along with Enap and Metrogas,
gas becomes available. Start-up is foreseen for the first
while British Gas Group holds the remaining 40%, the
half of 2009.
last-named being the provider of the fuel.
It is estimated that the project will start fast-track
contemplates the construction of a pass-through
Canela II
operations in the first half of 2009, and on a final step
hydroelectric plant of 473 MW, to take advantage of
during 2010.
the 400-meter altitude difference between the lakes
The wind farm, located on the south coast of Canela, will
have 40 wind generators with an installed capacity of 60
Neltume
The projec t, located in the Region of Los Ríos,
Pirehueico and Neltume.
HidroAysén
MW. It will start operating in the second half of 2009.
Choshuenco
Company in which Endesa Chile has a 51% shareholding
Bocamina II
and Colbún the other 49%.
The hydroelectric plant under study will have an
The company is in charge of the project for the
installed capacity of 128 MW and with use the waters
This project consists of the construction of a coal-
construction and operation of five hydroelectric plants
of the Llanquihue river between the lakes Neltume
fired thermal plant of 370 MW alongside the existing
on the Baker and Pascua rivers in the Region of Aysén,
and Panguipulli, in hydraulic series with the Neltume
Bocamina plant in Coronel, Biobío Region. The unit will
in the extreme south of Chile, with a total 2,750 MW.
hydroelectric plant.
consume pulverized bituminous coal. Start-up is foreseen
During 2008, management was focused on the
for the second half of 2010.
technical area of engineering and environmental studies,
Piruquina
and communications with its publics of interest.
The project consists of the construction of a mini passthrough hydroelectric plant of 7.6 MW to be located in
Chiloé and using the waters of the Carihueico river.
ANNUAL REPORT
It provides electricity service to 1,533,866 customers,
3.4% more than the year before. Of the total, 89.9%
Chilectra recorded energy losses of 5.9%, one of the
lowest in Latin America.
Enersis participates in electricity distribution in Chile
corresponds to residential customers, 7.8 % to
In November 2008, the results were published of the
through its subsidiary Chilectra in which it directly holds
commercial, 0.7% to industrial and 1.6% to other
tariff revision corresponding to Distribution Value Added
99.1% of the share capital.
customers.
(VAD) were published.
According to Chile’s tariff regulations covering the
During 2008, the company sold 12,535 GWh to its
On January 9, 2009, Decree 320 of the Ministry of
activities of electricity distributors, the service area
end customers, representing a 3% decrease from 2007,
the Economy was published in the Official Gazette,
of Chilectra is mainly defined as one of high density
mainly due to the energy rationing decree issued by the
setting the sub-transmission tariffs which came into
and includes all the residential, commercial, industrial,
government.
effect on January 14, 2009 and will remain in force until
state customers and those that pay tolls. The Santiago
Chilectra bought 11,797 GWh of energy during 2008
2010. The effects for Chilectra are estimated to be a
Metropolitan Region is a densely-populated area and
from various generators which included Endesa Chile,
fall in pre-tax revenues of 52,000 million Chilean pesos
has the largest concentration of industries, industrial
AES Gener, Colbún and others.
annually if the present market conditions and criteria
parks and commercial installations in Chile.
Oher distributors in the Chilean electricity system
for setting the remuneration for this corporate activity
are maintained.
are Empresa Eléctrica de Arica, Chilquinta Energía,
On January 15, 2008, Decree 207/2007 was published
CGE Distribución, Sociedad Austral de Electricidad,
in the Official Gazette setting the installations of the
Empresa Eléctrica de la Frontera and Luz Andes Limitada
trunk-line system, the area of common influence,
subsidiary.
the annual cost of transmission by section and its
components, with their indexation formulas for the
CHILECTRA
period 2007-2010.
Chilectra is the largest electricity distribution company
cost, the company has long-term energy purchase
in Chile in terms of energy sales. It covers 33 districts of
contracts with Endesa Chile, AES Gener, Colbún,
the Metropolitan Region and its concession zone covers
Carbomet Energía, Sociedad de Canalistas del Maipo,
an area of 2,037 km , including those of its subsidiaries
Iberoamérica de Energía IBENER, Hidroeléctrica La
Empresa Eléctrica Colina Ltda. and Luz Andes Ltda.
Higuera, Hidroeléctrica La Confluencia, Pacific Hydro
In order to ensure its supplies and the corresponding
2
Chile, Guacolda and HydroChile.
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ANNUAL REPORT
Colombia
the participation of new ones to just one of them,
establishing limits by market shares.
by which electricity is transferred from the connection
The Ministry of Mining and Energy defines the policies
points of the National Transmission System (STN) to
for the energy sector and plans the development and
the end consumer or user. These networks comprise
expansion of the industry through the Mining and Energy
the Regional Transmission Systems (STR) and the Local
Planning Unit.
Transmission System (SDL), which are distinguished
The only interconnected electricity system in Colombia
The distribution sector covers the system of networks
through their different tension levels.
is the National Electricity Grid (SIN), comprising the
The Colombian electricity market is less regulated than
generating plants, grid network, regional and inter-
the other countries where the Enersis Group operates.
regional transmission lines, distribution lines and the
The companies are free to offer their electricity at the
users.
price determined by the market, instead of being obliged
The legal principles governing the electricity sector are
The Colombian SIN has a capacity of 13,505 MW as of
by a centralized operative entity to generate electricity
set out in Laws 142 and 143 of 1994, the Colombian
December 2008, mainly hydroelectric. Annual generation
according to the system’s minimum marginal costs. The
Electricity Law.
was 54,395 GWh and sales 74,629 GWh, increases of
heavy hydroelectric reliance of the Colombian SIN led
1.4% and 2.7% respectively.
the CREG to design a remuneration scheme to make
Law 142 sets certain general principles for the
provision of the public utilities, defining as basic
The generating sector is organized on a competitive
investment in generation viable. By this mechanism,
functions of the state their regulation, vigilance and
basis in which generating companies sell their production
Firm Energy Obligations (OEF) are assigned which
control. The Electricity and Gas Regulation Commission
on the energy exchange at spot prices or through freely-
relate to generators’ commitments through generation
(CREG) was therefore formed to regulate the electricity
negotiated contracts with other exchange participants
assets capable of producing firm energy during critical
sec tor, and the Superintendenc y of Residencial
and with unregulated customers. Purchases and sales of
supply conditions, which are remunerated with fixed
Public Utlities (SSPD) to control compliance with the
electricity are carried out through bilateral transactions
revenues called charges for reliability. These charges
regulations.
which can be made between generators, distributors,
have been in effect since December 2006 at prices
The Colombian Elec tricit y L aw regulates the
traders and unregulated customers. However, the CREG
defined by the authority (US$13,045/MWh), with annual
generation, transmission, commercialization and
has been working since 2004 on a proposal to modify
indexation until November 2012. As from December that
distribution on the basis of ensuring competition. It
contracting procedures, to becoming an electronic
year, assignments of energy and price will be defined
therefore allows any national or international company
contracting system called Organized and Regulated
through tenders.
to par ticipate in any of the ac tivities and limits
Market (MOR) to be operative in 2009.
ANNUAL REPORT
Generation
Distribution
Central La Tinta
Type
20 MW
Central Paraíso
Type
277 MW
Central Limonar
Type
18 MW
Codensa
Energy Sales
Customers
Energy Losses BARRANQUILLA
MEDELLÍN
Generation
Central Tequendama
Type
Hydro
Central La Junca
Type
20 MW
Central Charquito
Type
20 MW
Central La Guaca
Type
325 MW
11,822 GWh
2.3 million
8.1%
BOGOTÁ
Central Cartagena
Type
208 MW
Central El Guavio
Type
1,213 MW
Central Termozipa
Type
236 MW
Central Betania
Type
541 MW
CALI
NEIVA
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ANNUAL REPORT
It is the largest electricity generating company in
Colombia, located close to the city of Bogotá. It has
granting the same rating for the program of issue and
placement of bonds.
Enersis participates in electricity generation in Colombia
eleven plants with a total installed capacity of 2,895
Its investment projec ts include the El Quimbo
through Endesa Chile and its subsidiary Emgesa, in
MW, among which is the El Guavio 1,213 MW plant, the
hydroelectric plant, to be located in the department
which it has an indirect shareholding of 16.1%.
largest hydroelectric plant in Colombia. Of the eleven
of Huila, on the Magdalena river, upstream from the
plants, nine are hydroelectric and two thermal.
Betania plant. Its installed capacity will be 400 MW
T his company has an installed c apacit y that
represented in 2008 21% of the countr y’s total
generating capacity.
The electricity generation of the Enersis Group
During 2008, Emgesa declared as operational a new
unit at the Cartagena plant, expanding the plant’s
installed capacity from 142 MW to 208 MW.
in Colombia was 24% of the total generated in that
Net generation was 12,905 GWh and total sales
market. Its physical energy sales represented 22% of
16,36 8 GW h, both showing increases over the
the total sold.
year before.
and will operate two generating units.
Emgesa submitted this initiative to the tender for
reliability charge, as a result of which it is obliged to
provide firm energy as from December 2014.
During 2008, progress was made in the identification
of development opportunities in non-conventional
Other generators connected to the Colombian
The year 2008 was characterized by strong revenues
renewable energies. Negotiations were held for the
electricity system are Empresa Pública de Medellín,
as a result of larger sales contracts and a reduced cost
installation of wind-measurement towers. A s of
Isagen, Corelca, EPSA and Chivor.
of fuel due to reduced thermal generation. The Cadena
December 31, three towers had been erected with
Pagua continued with a record generation. In August, a
a development potential of around 150 MW and
record level of water was recorded in the El Guavio plant
agreements had been reached for the installation of
reservoir, which meant having 36 GWh of additional
another two towers. At the same time, negotiations
energy stored.
are taking place with the promoter of a 20 MW mini-
EMGESA
In September 1, 2007 the Colombian companies
Emgesa S.A. E.S.P. and Central Hidroeléctrica de
In financial terms, Duff and Phelps de Colombia made
Betania S. A . E.S.P. were merged by the lat ter’s
its periodic review of the first and third bond issues of
absorption by the former, which then changed its name
Emgesa, ratifying its AAA rating for the company and
to Emgesa S.A. E.S.P.
hydroelectric plant project.
ANNUAL REPORT
During 2008, energy sales were 11,822 GWh to its
end customers, representing an increase of 3.3% over
2007. These were distributed 35.7% to residential,
15.7% commercial, 6.3% industrial and 42.3% to other
sectors.
Energy losses were reduced from 8.7% in 2007 to
8.1% in 2008. Loss management is focused on the
incorporation of new technologies and techniques for
identifying losses and also on the strengthening of a
customer/company relationship based on technical
knowledge and the transparency of our actions.
As part of the tariff revision process, which is made
every five years, Resolution 097 was published in
2008 by which CREG approved the methodology for
the remuneration of the distribution business during
03. ELECTRICITY DISTRIBUTION
CODENSA
Enersis participates in electricity distribution in Colombia
Distributes and sells electricity in Bogotá and in 96
distribution business remuneration, defined as 13% for
through its subsidiary Codensa, in which it directly and
districts of the departments of Cundinamarca, Boyacá
the maximum income methodology and 13.9% for the
indirectly holds 21.7% of the share capital.
and Tolima, comprising an area of 14,087 km2.
maximum price methodology.
this period. Also, by Resolution 093, the commission
published the rate of return that will be applied to the
Codensa’s market share, in terms of physical sales,
was approximately 15%.
Since 2001, Codensa has only provided services to
regulated customers. It provides electricity services to
Other distributors participating inte Colombian
2,284,855 customers, 3.5% more than in 2007. Of the
electricity system are Empresa de Energía Cundinamarca,
total, 88.3% are residential, 9.9% commercial, 1.7%
EEPP Medellín, Electrificadora de la Costa Atlántica and
industrial and 0.1% other customers.
Electrificadora del Caribe.
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ANNUAL REPORT
Peru
Customers with a capacity requirement of less than
remuneration in addition to the revenue from the tariffs
1 MW are considered as regulated customers and
and connection tolls that reflect a charge per kW. All
energy supplies are defined as a public utility. However,
the generating companies have access to the lines of
according to the First Complementary Provision of Law
the secondary system but these are used only to serve
28,832, regulated customers whose annual demand
certain customers which have to make payments in
is within the demand limits to be established in the
relation to the use they make of the system.
Complementary Provision may opt to be free users
Sales of capacit y or energy by generators to
(customers whose capacity requirement is 1 MW
distributors for then reselling to their regulated
or more).
customers should be made at the bar prices set by
Electricity tariffs for regulated customers include the
OSINERG or at fixed rates as defined by public tenders.
bar prices for the energy (analogous with node prices in
Since 2005, the bar prices for capacity and energy are
Chile) and generating capacity, charges for transmission
set annually. These are the maximum prices for the
services and the VAD (Distribution Value Added), which
electricity paid by distributors for transferring it to
In Peru, the Ministry of Energy and Mines (MINEM)
considers a regulated return on the capital invested, the
regulated customers, except in the case of contracts
defines the policies for the energy sector and regulates
fixed costs of operation and maintenance, and a rule for
signed as a result of a public tender, in which case the
matters related to the environment. It is also responsible
energy distribution losses.
prices to be passed on to regulated customers will be
for the granting, supervision, expiration and termination
Since 1999, the payment for capacity has been
of licenses, permits and concessions for generation,
determined in relation to a fixed guaranteed component
the prices defined in the tender.
There is just one main grid system, the National
transmission and distribution activities. The Energy
based on the efficiency of each plant and a variable
Electricity Grid (SEIN), plus many isolated and small
Investment Supervisory Organism (OSINERG) is a public
component that depends on the level of dispatch of
regional systems that provide electricity to rural
and autonomous regulatory body established in 1996
each unit.
areas.
to control compliance with the legal and technical
The transmission lines are divided into two systems,
Peru has an installed capacity of 5,147 MW in 2008.
regulations related to electricity and hydrocarbon
the principal and the secondary. All the generators
The annual generation of the system was 29,559 GWh
businesses, and compliance with the obligations
have access to the lines of the principal system, which
and sales were 26,771 GWh, which represented a 8.8%
container in concession contracts, plus the conservation
enables them to carry electricity to all users. The
increase over the previous year.
of the environment in relation to these activities.
transmission concession-holder receives a fixed annual
ANNUAL REPORT
Generation
Distribution
Central Moyopampa
Type
65 MW
Central Callahuanca
Type
80 MW
Central Huinco
Type
247 MW
Central Matucana
Type
129 MW
Central Huampani
Type
30 MW
Central Santa Rosa
Type
229 MW
Central Ventanilla
Type
493 MW
Edelnor
Energy Sales
Customers
Energy Losses CHICLAYO
TRUJILLO
LIMA
CUZCO
Central Yanango
Type
43 MW
Central Chimay
Type
151 MW
AREQUIPA
5,599 GWh
1.03 million
8.2%
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ANNUAL REPORT
Demand for natural gas from Camisea has increased
reflected on the spot market, where the marginal costs
significantly due to the sharp rise in the demand for
“of gas” were expected to be around US$30/MWh
Enersis participates in electricity generation in Peru
electricity, of around 9%, and, to a lesser extent, the
when in fact units were seen to operate with residual
through Endesa Chile and its subsidiary Edegel, in which
migration of industrial users to natural gas in view of
diesel or diesel 2 at costs of over US$150-200/MWh.
it indirectly holds 19.8% of the share capital.
the high international oil prices. This led to congestion
This congestion is expected to last throughout 2009
in the natural gas transportation as from May due to
but the government has designed several measures for
the insufficient capacity of the pipeline.
mitigating the situation.
The company had a capacity in 2008 that represented
28% of the country’s total installed capacity.
The electricity generation of the Enersis Group was
The impact on the electricit y system has been
At present, Edegel has firm contracts for the full
27% of the total generated in Peru, while its physical
important as only 70% of the natural gas volume
capacity of its Ventanilla combined-cycle plant, and for
sales were 32% of the total sold.
Other generators connected to Peruvian electricity
system are Electroperú and Egenor.
EDEGEL
requested by generators and the needs of the COES
50% of the TG8 unit of the Santa Rosa thermal plant,
was authorized, i.e. during low water periods, some
projected to start up in September 2009. The rest of
200 MW in gas turbines have not operated due to the
its contracts are interruptible, as the operation of its
lack of transportation capacity. This in turn has been
units is not in base.
Progress was made in 2008 in the identification
of development opportunities in non-conventional
This company is located close to the city of Lima. It has
renewable energies. Temporary concessions have been
nine plants with a total installed capacity of 1,467 MW.
requested and obtained for wind generation for a total
Only two units are thermal plants that use natural gas
of 1,200 MW. In addition, studies were advanced
as their generating fuel.
for identifying the locations of future thermal and
The generation of Edegel was 8,102 GWh and its
hydroelectric units.
physical sales were 8,461 GWh, both being 5.8% higher
At the same time, the works for the preparation of the
than the year before; this partly explained the good
site were successfully completed and civil works began
results for the year.
in the Santa Rosa plant extension project.
ANNUAL REPORT
Enersis participates in electricity distribution in Peru
through its subsidiary Edelnor in which it directly and
indirectly holds 33.5% of the share capital.
The market share of our subsidiary, in terms of
physical sales, was approximately 19%.
Other distributors that participate in the Peruvian
elec tricit y s ystem are Luz del Sur, Elec tro Sur,
Electrocentro, ENOSA, Hidrandina and ENSA.
EDELNOR
The concession zone granted to Edelnor covers a total
area of 2,440 km2, of which 1,838 km2 relate to northern
Lima and Callao.
Edelnor is the concession-holding company of
are residential, 4% commercial, 0.1% industrial and
1.8% other customers.
Energy losses as of December 2008 were 8.2%,
a slight increase over the rate of 8.1% obtained
public-utility service for the northern part of the Lima
Physical energy sales in 2008 were 5,599 GWh,
metropolitan area and the province of Callao, plus
representing a 7.7% increase over 2007. The sales
Regarding tariffs, these are set every four years, the
the provinces of Huaura, Huaral, Barranca and Oyón.
grow th is explained by the higher consumption
last being in 2005, so the next revision is programmed
It serves 52 districts exclusively and shares with the
by regulated customers, mainly in the residential,
for November 2009.
southern zone distribution company in another 5
commercial, transport, storage and communication
districts. In the metropolitan area, Edelnor’s concession
sectors, and in the manufacture of rubber products.
consists mainly of the industrial zone of Lima and some
populous districts of the city.
Edelnor provides electricity services to 1,027,750
customers, a 4.2% increase over 2007. Of these, 94.1%
in 2007.
With respect to transmission, the process of the
Regulation of Complementary Transmission Systems
Edelnor’s energy purchases amounted to 5,648 GWh,
for the period July 2006-April 2013 began in June, in
an increase of 7.4% over 2007. The principal suppliers
accordance with OSINERG Resolution 198-2008-OS/CD.
were Electroperú (40.2%), Edegel (30%), Egenor
This process will end in April 2009.
(5.9%), Pesa (5.1%) and Cahua (3.1%).
77
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ANNUAL REPORT
OTHER BUSINESSES
ANNUAL REPORT
OTHER BUSINESSES
CAM
In terms of innovation, more than 30 new hightechnology products were created for the management
Enersis, directly and indirectly, holds 100% of Compañía
and commercialization of electricity.
Americana de Multiservicios Ltda. (CAM). Its business
Strategic alliances and commercial agreements were
is to provide electrical and related business solutions
also strengthened with several companies like Phillips,
in three lines of action: metering and certification,
Schneider, EMH and Complant.
commercialization and logistics, and electrical works.
The parent company in Chile and its subsidiaries in
MANSO DE VELASCO
Argentina, Brazil, Colombia and Peru, have consolidated
a regional presence, expanding its customer portfolio
Inmobiliaria Manso de Velasco Ltda., a company in which
in the electrical, sanitation, gas, industrial, mining and
Enersis directly and indirectly has a 100% shareholding,
telecommunications sectors.
focuses its business on real-estate development projects
CAM obtained its ISO 9001:2000 certification for
and on advising Group companies in Latin America in
all its subsidiaries, thus complying with the corporate
everything related the purchase, sale and development
objective of cultivating a culture oriented to quality,
of real-estate.
based on the commitment to achieve organizational
efficiency and continuous improvement.
During 2008, progress was made on the urbanization
and commercialization of the ENEA project for the
During 2008, CAM continued its regional integration
industrial sector, and the selling of properties in the
and consolidation process, with emphasis on seeking
municipality of Santiago. In the first case, works
new markets and businesses and on the development
continued on extending the urbanization of phases I and
of innovative products.
III in order to permit the sale of these plots located on
In this context, notable was the implementation of
the east and west sides of Avda. Américo Vespucio.
architectural and ornamental lighting projects, services
ENEA also continued to progress its commercial plan,
and audits for the mining industry, and implementation
integrating new companies in the business park. Aguas
of energy-efficient solutions. Sale contracts were also
Santiago Poniente S.A. is included in this project, a
entered into for the supply of electrical equipment to
company that provides sanitation services related to
Ecuador, of services in Colombia and of tele-metering
this real-estate project.
for the distributor Light in Brazil.
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ANNUAL REPORT
In addition, there is the Tapihue Project which
contemplates plots corresponding to land associated
with the Tapihue, Amancay (Plot B) and La Petaca
farms.
plus a commercial office in Panama City, thus providing
coverage of a large part of the Latin America.
The most important areas of Synapsis’s business
In order to position itself as an implementer and
integrator of ERP for ISU SAP utilities, it signed two
important contracts for introducing this solution in
relate to outsourcing and infrastructure services, data
Lipigas (Chile) and the Corrientes Provincial Energy
The business of Manso de Velasco also includes
centers, contact centers, mass printing, remote services
Authority (DPEC) (Argentina).
managing a total of 23,972 m2 of construc tion
applications (ASP), and advice and implementation of
Also notable were the start-up of the project for
corresponding to office buildings and commercial offices
solutions in tele-metering, remote control, security and
New EPS in Colombia, the start of outsourcing of
which are mainly rented to related companies and other
location of vehicles; consultancy in the search for and
the technological platform and associated services
parties.
implementation of technological solutions for supporting
to ChileCompra, now Mercado Público, and the
business processes; the integration of products, services
development of three important projects for the Instituto
and technologies, implementation and maintenance of
de Normalización Previsional (INP) (the Chilean national
information systems; construction and development of
social security entity).
SYNAPSIS
Synapsis Soluciones y Servicios IT Ltda. is an information
IT solutions for highly-available and complex business
technology (IT) professional services company in which
processes.
In Chile, it achieved the SAP Hosting Par tner
certification which guarantees the high standards of
Enersis directly and indirectly has a 100% holding.
The company has increased its presence in the IT
the services provided by the company according to
With more than 20 years’ experience in the market,
market in recent years. It manages six integrated and
the world-wide demands of SAP, thus improving the
it has positioned itself as a Latin American leader
strategically positioned data centers, with a highly-
company’s position with respect to the local and regional
in the field of IT solutions, mainly in the services,
qualified professional team and providing guaranteed
markets. It again renewed its Microsoft Gold Partner
energy, telecommunications and public administration
high-availability services.
certification, and also signed alliances with Verifone,
markets.
Synapsis is oriented to the optimization of business
Enterprise DB, Corinex and Matchmind.
Located in Santiago, Chile, it has offices in the
management and process efficiency through the ISO
Lastly, the company launched “Synapsis Green”, a
principal cities in the region: Buenos Aires, Argentina;
9001-2000, ITIL, PMP and CMMI 3 certifications,
new concept that incorporates into the management of
Rio de Janeiro, Fortaleza and a commercial office in
focusing on IT, telecommunications and control
the business the implementation of responsible practices
Sao Paulo, Brazil; Bogotá, Colombia, and Lima in Peru,
systems.
from an environmental point of view.
ANNUAL REPORT
OTHER BUSINESSES
DIRECT AND INDIRECT ECONOMIC PARTICIPATION (*)
ARGENTINA
BRAZIL
Business
Participation
Business
Costanera
Gx
41.8%
Endesa Brasil
El Chocón
Gx
39.2%
Edesur
Dx
CTM
Participation
Gx, Dx, Tx
53.6%
Fortaleza
Gx
53.6%
65.4%
Cachoeira Dourada
Gx
53.4%
Tx
53.6%
Ampla
Dx
69.9%
TESA
Tx
53.6%
Coelce
Dx
34.9%
CEMSA
Tx
27.0%
CIEN
Tx
53.6%
CAM Argentina
Ox
100.0%
CAM Brasil
Ox
100.0%
Synapsis Argentina
Ox
100.0%
Synapsis Brasil
Ox
100.0%
Gasoducto Atacama Argentina
Ox
30.0%
Ingendesa Brasil
Ox
60.0%
COLOMBIA
CHILE
Business
Business
Participation
Participation
Endesa Chile
Gx
60.0%
Emgesa
Gx
16.1%
Celta
Gx
60.0%
Codensa
Dx
21.7%
Endesa Eco
Gx
60.0%
CAM Colombia
Ox
100.0%
Ojos de Agua
Gx
60.0%
Synapsis Colombia
Ox
100.0%
Palmucho
Gx
60.0%
San Isidro
Gx
60.0%
Pangue
Gx
57.0%
Pehuenche
Gx
55.6%
Canela
Gx
45.0%
HidroAysén
Gx
30.6%
GasAtacama
Gx
30.0%
Chilectra
Dx
99.1%
Transquillota
Tx
30.0%
CAM
Ox
100.0%
Inmobiliaria Manso de Velasco
Ox
100.0%
Synapsis
Ox
100.0%
Ingendesa
Ox
60.0%
Túnel El Melón
Ox
60.0%
Gas Atacama Chile
Ox
30.0%
Gasoducto Tal Tal
Ox
30.0%
Electrogas
Ox
25.5%
GNL Chile
Ox
20.0%
GNL Quintero
Ox
12.0%
PERU
Business
Participation
Edegel
Gx
19.8%
Edelnor
Dx
33.5%
CAM Perú
Ox
100.0%
Synapsis Perú
Ox
100.0%
Notas:
Gx: Generation.
Tx: Transmission/Commercialization.
(*) Operative companies of the Enersis Group considered.
Dx: Distribution.
Ox: Others.
81
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ANNUAL REPORT
Endesa
Market Place S.A.
15.00%
PERIMETER OF CORPORATE PARTICIPATIONS
OF ENERSIS
99.991%
99.99%
99.99997%
Compañía Americana
de Multiservicios Ltda.
CAM
Inmobiliaria
Manso de Velasco Ltda.
0.009%
Synapsis Soluciones
y Servicios IT Ltda.
0.00003 %
26.2%
0.00007%
99.99993%
0.01 %
Konecta
Chile S.A.
99.9998%
57.50%
CAM
Perú Ltda.
Soc. Agrícola
de Cameros Ltda.
0.0002%
Synapsis
Perú Ltda.
99.998243 %
0.000062%
99.999938%
25.82%
CAM
Colombia Ltda.
Aguas Santiago
Poniente S.A.
94.90%
Synapsis
Colombia Ltda.
Chilectra
Inversud S.A.
0.2%
2.4%
0.001757 %
53.06%
4.9988 %
95.00%
55.00%
CAM
Argentina Ltda.
Agrícola e
Inmobiliaria Pastos
Verdes Ltda.
2.5%
94.9999 %
Synapsis
Argentina Ltda.
5.0001 %
99.90%
0.0002%
0.0012%
55.00%
49.00%
Sistemas
SEC S.A.
Const. y Proyectos
Los Maitenes S.A.
Empresa Eléctrica
de Colina S.A.
99.9998%
99.95 %
99.99985 %
CAM Brasil
Multiservicios Ltda.
Luz Andes S.A.
0.00017%
Chile
Brazil
Argentina
Peru
Colombia
España
0.05 %
Synapsis
Brasil Ltda.
0.10%
ANNUAL REPORT
OTHER BUSINESSES
0.012666 %
59.98%
99.0778566%
Inversiones
Codensa S.A.
27.1945%
94.50 %
5.20 %
0.89%
Distrilec
Inversora S.A.
23.41%
56.36%
Inversora
Codensa Ltda. U
16.02%
100 %
20.84%
Edesur S.A.
50%
Empresa de Energía
de Bogotá S.A.
Edelnor S.A.
1.06%
Sacme S.A.
1.41%
60.00%
51.51%
9.35%
Inversiones
Distrilima S.A.
25.00%
30.14%
Codensa S.A.
22.060295%
12.47 %
Endesa Brasil S.A.
(Holdco)
13.25%
Compañía Peruana
de Electricidad S.A.
4.657017%
4.347304%
0.10%
50.90%
10.344606%
21.022414%
36.430633%
63.569367%
2.273448%
Coelce S.A.
Investluz S.A.
56.594007%
13.679789%
Ampla
Investimentos S.A.
100%
CIEN S.A.
13.679789%
46.886283%
46.886%
100%
C.G.T.
Fortaleza S.A.
10.344606%
Ampla Energia
e Serviços S.A.
99.605880%
Cachoeira
Dourada S.A.
21.022%
83
84
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ANNUAL REPORT
59.98%
PERIMETER OF CORPORATE PARTICIPATIONS
41.9411%
OF ENDESA CHILE
54.1535%
Endesa
Argentina S.A.
Hidroinvest S.A.
99.657366%
0.342634%
59.00%
2.4803%
6.1938%
Hidroeléctrica
El Chocón S.A.
Southern Cone Power
Argentina S.A.
2.0%
98%
5.5%
15.35%
15.35%
Termoeléctrica
Manuel
Belgrano S.A.
5.5055%
Termoeléctrica
José de
San Martín S.A.
Com. de Energía
del Mercosur S.A.
(CEMSA)
51.932539%
Endesa
Costanera S.A.
12.3325533%
0.887466%
5.5055%
Distrilec S.A.
45.00%
Ingendesa
Do Brasil Ltda.
1.00%
99.00%
60.99845%
26.873987%
36.268461%
4.184465%
Generandes
Perú S.A.
Endesa Brasil S.A.
(Holdco.)
46.886283%
Ampla Energia
e Serviços S.A.
63.569367%
54.19961%
Ampla
Investimentos S.A.
Emgesa S.A.
51.51%
36.430633%
Edegel S.A.
46.886283%
CIEN S.A.
Empresa de Energía
de Bogotá S.A.
Investluz S.A.
51.51%
56.594007%
2.273448%
Coelce S.A.
Codensa
100%
100%
0.0000018%
Transportadora
de Energía del
Mercosur S.A.(TESA)
99.999982%
Cía. de Transmisión
del Mercosur S.A.
(CTM)
99.99%
100%
C.G.T.
Fortaleza S.A.
99.605880%
Cachoeira
Dourada S.A.
Inversora Codensa
Ltda. U
5.20%
Inversiones
Codensa S.A.
94.50%
ANNUAL REPORT
OTHER BUSINESSES
Central Eólica
Canela S.A.
99.51%
99.99%
Enigesa S.A.
Endesa Eco S.A.
75%
0.01%
0.49%
50.99995%
92.65%
94.97519%
99.9911%
98.75%
33.33%
Pehuenche S.A.
99.00%
Pangue S.A.
0.01382%
Túnel
El Melón S.A.
0.00886%
0.51%
50.00%
Centrales
Hidroeléctricas
de Aysén S.A.
0.00005%
HidroAysén
Transmisión S.A.
Consorcio Ingendesa
Minmetal Ltda.
Chile
1.25%
50.00%
Ingendesa S.A.
50.00%
GNL Chile S.A.
Consorcio
Ingendesa-Ara Ltda.
Argentina
Peru
Consorcio
Ara-Ingendesa Ltda.
Brazil
20%
33.33%
GNL Quintero S.A.
Consorcio
Ara-Ingendesa
Sener Ltda.
Colombia
Islas Caymán
100%
99.942802%
Cía. Eléctrica
San Isidro S.A.
Cía. Eléctrica
Tarapacá S.A.
50.00%
Transquillota
Ltda.
0.02125%
0.057198%
99.95%
Electrogas S.A.
100%
42.50%
99.99%
Inversiones
GasAtacama
Holding Ltda.
50.00%
99.9%
Inversiones
Electrogas S.A.
Inversiones
Endesa Norte S.A.
Progas S.A.
0.01%
Gas Atacama
Chile S.A.
0.05%
99.90%
99.877%
Gasoducto
Taltal S.A.
0.1226%
99.997706%
99.90%
0.001147%
GasAtacama S.A.
0.1%
Atacama Finance Co.
0.03%
Gasoducto Atacama
Argentina S.A.
57.23%
42.71%
100%
Gasoducto Atacama
Argentina S.A.
Sucursal Argentina
0.1%
Energex Co.
85
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ANNUAL REPORT
SUSTAINABILITY
ANNUAL REPORT
SUSTAINABILITY
01. SUSTAINABILITY POLICY
Basically, our actions as a company are sustained
by three basic pillars for Sustainable Development:
In Enersis, we assume our role as a corporate citizen from
contribute to economic development, contribute to social
the perspective that our actions affect and are affected
progress and contribute to the ecological balance of
by a series of socio-economic and cultural relations in
our surroundings.
the surroundings in which we operate. We therefore
These criteria form part of the central actions for
promote a balanced development of our businesses,
ensuring the profitability and leadership of our company
stimulating economic growth and promoting the social
in the long term and are firmly entrenched in our
development of the communities, while contributing to
corporate values.
the preservation of the environment.
PRINCIPLES FOR SUSTAINABLE DEVELOPMENT
The Sustainability policy of Enersis is enshrined in the
Good Governance
Commitment with good
governance and ethical behavior
Seven Commitments for Sustainable Development,
guidelines made public by our parent, ENDESA S.A., in
Innovation
Commitment with efficiency
Results Orientation
Commitment with the creation
of value and profitability
2003. These principles are aligned with the company’s
corporate vision, mission and values and are the criteria
that guide the balanced compliance of our responsibilities
in the economic, social and environmental spheres.
Community
and the Environment
Environmental
Dimension
Economic
Dimension
Commitment with protection
of the surroundings
Our People
Commitment with
the health, safety and
personal and professional
development of our personnel
FOCUS ON EDUCATION
Our Environment
Social
Dimension
Commitment with
the development of the
societies in which we operate
Customer Orientation
Commitment with quality
of service
As a business group, we believe that Latin America
should venture strongly and decidedly, and with a longterm view, in the education of our children and young
people, the pillars of the region’s future growth.
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ANNUAL REPORT
We have therefore adopted as an action focus of
For these reasons, we have assumed the challenge of
our Sustainability policy, the support, promotion and
contributing to the development of education through
development of activities in the area of education.
concrete actions that impact and contribute to some
We are firmly convinced that to take the large leap
degree to improving the quality of life.
that Chile and Latin American countries need, both the
public administration and private-sector companies
In these eight years, 49 religious and civil monuments
in Chile have been illuminated within this program.
During 2008, the lighting was inaugurated of San
Pablo de Carahue Church and Sagrado Corazón de Jesús
Cathedral in Villarrica, both in the Región of Araucanía,
02. ACTIONS 2008
and Nuestra Señora del Tránsito Church in Molina,
located in the town of Molina in the 7th Region.
should concentrate a large part of their efforts on
improving the quality of education, a fundamental tool
The following describes some of the activities carried out
for facing the challenges that society imposes on us
by our company, with a clear focus on actions related
Chile in Four Moments
every day.
to education, all in order to contribute to economic
The Enersis Group, El Mercurio and Universidad de Los
growth, social progress and the ecological balance of
Andes launched the Chile Bicentenary in Four Moments
our surroundings.
project in September 2008. Our company thus performed
Everyone is aware of the various strengths we have
as a nation, like having a healthy macro-economy, a
recognized institutional structure and a consolidated
capitals market. However, we must move forward and
a clear action for improving the education of thousands
EDUCATION AND CULTURE
improve the areas where there are weaknesses, like
of Chilean children who will be able to see this collection
free of charge.
education, a factor that certainly has undermined faster
Illuminating Monuments in the South of
With the collaboration of specialists of different areas
growth and a greater social equality, and made them
the World
and with the use of new technology and a novel and
difficult.
Enersis and its subsidiaries Endesa Chile and Chilectra,
often unique iconography, a document is presented to
In order to reinforce economic growth, with the
and Fundación Endesa, have been carrying out the
the public to make known aspects of daily life in our
consequent care and respect for the environment, and
Illuminating Monuments in the South of the World
country in the 18th, 19th and 20th Centuries.
social progress, it is necessary for better-prepared people
program since 2000.
to enter the labor market, who can then generate even
more wealth for Chile.
This projec t originated with the signing of an
agreement with the Episcopal Conference of Chile in
Chile in Four Moments will become the principal work
of the celebration of the bicentenary and be published
successively between the years 2008 and 2010.
We therefore believe that a deficient education is
October 2000, and renewed on two occasions, in 2004
In all, there will be 16 collectable fascicles of 72 pages
a synonym for ill-prepared professionals and workers,
and early 2007. On the last occasion, the commitment
each which will make up by the end of the work, in June
a situation that impac t s direc tly on the lack of
of the Enersis Group was extended to 2011.
2010, a total of four volumes: 1710, 1810, 1910 and
opportunities.
Historical Iconography of Chile.
ANNUAL REPORT
SUSTAINABILITY
Donation of Libraries
Marine Benthonic Fauna of the Chilean
In collaboration with El Mercurio, Enersis has supported
Patagonia
Following studies carried out in 2007 for the strategic
definition, we proceeded to introduce the program in
this campaign for promoting reading in remote
With the publishing of the book “Marine Benthonic
communities far from urban centers since 2001,
Fauna of the Chilean Patagonia”, Enersis and Fundación
contributing complete collections of books to more than
San Ignacio del Huinay will offer to the local and global
A reduced number of volunteers took part in the first
10 libraries in isolated areas.
scientific community the first guide for the multi-taxa
phase, selected at random from among the company’s
identification of Chile’s fjords region.
various management areas. Later, in the Mass Launch
During 2008, notable were the donations to the
2008, developed in two phases: Pilot Test (experimental
phase) and Mass Launch.
Municipal Library of Pedro Mariño de Lobera, Coronel,
The document included material collected over
phase, 15% of the personnel registered who, with their
in the Region of Biobío, and the Municipal Library of
10 years and a total of 9 expeditions, with close to
collaboration and efforts, directly benefited a total of
Paredones, in the 6th Region.
450 species. Of these organisms, close to 49 are new
180 children, from kindergarten to 8th grade, from
specimens, particularly: Halopteris enersis, Tethocyathus
the Miravalle school in the district of Peñalolén, and
endesa and Caryophyllia huinayensis.
indirectly the whole student community and residents
The program has also benefited the villages of Cunco,
Cochamó, Puerto Natales, Santa Bárbara, Cochrane,
Easter Island, Taltal, Putre, Zúñiga, Hornopirén, Los
of the area near the school.
Molles and Mincha.
CORPORATE VOLUNTEERS
The Corporate Volunteers combine ac tions of
Native Trees of Chile
This program is oriented to cover the specific needs of
infants teaching, through two projects (Raise Your Ideas
community help with a program of complementary
This document, prepared by Enersis and Fundación
the community in the area of education, offering at the
and Development Activities) which have been specially
San Ignacio del Huinay, describes in more than 190
same time a response to the curiosity of the company’s
designed to meet the different needs and interests of the
pages a total of 75 Chilean tree species.
personnel: the possibility of combining their professional
personnel. Both initiatives were implemented in 2008
and private lives through participating in a solidarity-
through an alliance between Enersis and Corporación
type project.
Crearte, a charitable social organization specialized in
Each has a brief description and detailed pictures (the
tree, bark, leaves, flowers and fruit), plus a map showing
their location by province. This book is undoubtedly
The initiative was designed based on a model
becoming a unique object at the local level, considering
of continuous improvement involving 3 stages:
the quality of the images, the description of each one
strategic definition, implementation, and control
and its format.
and evaluation.
developing the human capital of boys and girls, helping
them become the protagonists of their development.
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ANNUAL REPORT
INNOVATION
Climate Change in Latin America: Impact,
SOCIETY
Mitigation and Financing
Novare
Enersis, in its constant concern for the effects of global
Contributions to Foundations and Wel-
In order to channel intellectual capital and creative
warming, supported Endesa Latin America and CEPAL
fare Institutions
potential and generate a climate in which to encourage
in the organization of the seminar “Climate Change in
As an important member of society, Enersis supports
innovation, Enersis consolidated Novare in 2008, a tool
Latin America: Impact, Mitigation and Financing” whose
various institutions and foundations carrying out local
for managing the internal flow of ideas, offering Enersis
purpose was the presentation of studies with respect
welfare work, through sponsorships and donations.
Group employees the opportunity to submit their ideas
to the future evolution of emissions of greenhouse-
During 2008, support was provided to Fundación
that are susceptible to becoming innovation projects.
effect gases and the opportunities for mitigation of
Kast, Fundación Paz Ciudadana, Hogar de Cristo and
Fundación Eduardo Frei, among others.
In addition, Enersis, CAM, Synapsis and the Group’s
climate change in Argentina, Brazil, Chile, Colombia
distributors in Latin America can share knowledge and
and Peru. These studies were sponsored by Endesa S.A.
exchange experiences to reinforce the development of
and carried out by distinguished academic and research
R&D through Novare.
entities including Universidad de Chile, Universidad de
SEMINARS
SPONSORSHIPS
Los Andes, Colombia, Universidad Católica del Perú and
Velázquez in the works of Bru and Cien-
Fundación Bariloche.
fuegos
The Enersis Groujp formed part of the sponsors for
4th International Conference for Chi-
the exhibition “Velázquez in the works of Bru and
lean Issuers
Cienfuegos”, which displayed a selection of 26 works
Chilean Issuers Committee, organized and carried out
For the fourth consecutive year, Enersis organized, as
demonstrating the pictorial work of the outstanding local
the celebration of Chile Day on the New York Stock
a member of AmCham Chile and its Chilean Issuers
artists, Roser Bru (born 1923) and Gonzalo Cienfuegos
Exchange, NYSE.
Committee, the 4th International Conference for Chilean
(born 1949), all inspired by paintings of Diego Velázquez
Issuers.
(1599-1660), especially “Las Meninas”.
Chile Day
Enersis, as a member of AmCham Chile and its
The purpose of the meeting was to discuss investment
alternatives in Chile and the strength of Chilean
The meeting, which is one of the most technical
companies that trade their shares on the American
meetings on the subject of capital markets and debt
2nd Christmas Concert at the Military
market.
issues in Chile, was attended by well-known economists,
College
portfolio managers and executives of banks and
The company was one of the sponsors of the ‘2nd
investment funds, both local and international.
Christmas Concert’, an event organized by the Military
ANNUAL REPORT
SUSTAINABILITY
Collage and took place in December in the institute’s
Seminars and Round Table
Court of Honor; this was attended by over 3,000
The company sponsored conferences organized by
people.
Estrategia newspaper in conjunction with the Central
During 2008, the Enersis Group was recognized for
Bank, in order to know the bank’s monetary policy
its actions in various areas, in particular the following
reports.
prizes:
3rd International Education Congress
“Reading-Writing, Strategies that Work”
It also sponsored congresses of coaching, executives
Enersis was one of the sponsors of the 3rd International
of excellence and customer loyalty, and the Santiago
Education Congress “Reading-Writing, Strategies
Anniversary Round Table.
PRIZES
Ten Best Companies for Working Mothers
and Fathers
The Enersis Group achieved an outstanding position
that Work”, an event that brought together 1,000
teachers from the cities of Concepción, Santiago and
Municipality of Vitacura
in the sixth edition of the ranking of the Ten Best
Viña del Mar.
Cultural activities organized by the municipality of
Companies for Working Mothers and Fathers. The study,
Vitacura were sponsored.
made by Fundación Chile Unido and Ya magazine of
El Mercurio, distinguishes the companies that have
9th Cycle of Regional Development
For the fifth consecutive year, Enersis sponsored the
Radio Beethoven
policies that facilitate the conciliation of working life
Cycle of Regional Development of the Diario Financiero,
The company sponsors Radio Beethoven’s “Cultural
with family life and in turn promote the adoption of
whose object is to take to the regions the most notable
Panorama”, program transmitted Monday to Saturday
these practices.
political, economic and financial representatives of Chile
in a format of four daily micro-programs.
and generate a debate with respect to national and
Endesa Spain’s Contribution to the Com-
zonal matters of interest that in turn improve the quality
Radio Agricultura
munity
of information for taking business decisions.
The company sponsors the program ‘The Minute of
During the 30-year anniversary celebrations of Estrategia
11 events were organized during 2008 with an
Good Language’, a space conducted by Professor
newspaper, Endesa S.A. received the distinction of
average attendance of 130 people including opinion
Mario Banderas, transmitted Monday to Friday with a
Contribution to the Community due to the series of
leaders, businessmen, politicians and academics.
frequency of four daily spots.
activities and programs the company organizes through
its subsidiaries in Latin America.
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ANNUAL REPORT
Best Investor Relations Team in Chile
of the ranking that covers a total de 50 non-financial
initiative covering more than 150 facilities in 33 districts
Enersis was praised as the Best Investor Relations
companies in Argentina, Brazil, Chile, Colombia and
of the company’s concession area. Around 80 thousand
Team in Chile, after heading the Top 100 ranking in
Mexico. The survey was prepared by the consultancy
people use these facilities monthly to play sports and
that category, as measured by Capital magazine and
Management & Excellence and the business magazine
carry out recreational and cultural activities.
Santander Global Banking & Markets.
LatinFinance.
First Place in the Category Utilities Sec-
12th Annual Reports Competition
At the 3rd Cigré Prize-Giving Dinner, Chilectra received
tor Corporate Governance Practices
Enersis, Endesa Chile and Chilectra were recognized in
a distinction in the Innovation category for its constant
In the tenth edition of Investor Relations Global Rankings
the category of Best Group Annual Report, according
commitment with the development of a culture of
(IRGR 2008), Enersis was placed first in the category
to a study carried out by Gestión magazine and
innovation, providing solutions that contribute to the
Utilities Sector Corporate Governance Practices, and
PricewaterhouseCoopers.
benefit of its customers.
was carried out by MZ Consult in association with the
Top 10 in 4th CSR Ranking 2008
ACHS Prize for Effective Action in Safety
companies sponsoring IRGR.
Endesa Chile was placed in the Top Ten of the Corporate
Matters
Cigré Prize for Innovation
also among the Top 5 in Latin America. The survey
Social Responsibility (CSR) ranking 2008, prepared
At the annual Safety Prize Awards 2008, the Chilean
Best Managed Company in Latin America in
annually by Fundación PROhumana, CPC and Capital
Safety Association (ACHS) recognized Chilectra for its
the Utilities Sector
magazine.
constant and effective work in this area.
in Latin America in the Utilities Sector, according to the
Labor Safety Prize
Best Social Management Report
magazine Euromoney. The company obtained the highest
A distinction for efforts in occupational safety and risk
Chilectra’s Sustainability Report 2007 won the distinction
score (11.86%) in the utilities segment.
prevention was awarded by the National Safety Council
of the Best Social Management Report according to a
(CNS) to Endesa Chile, within the framework of the 46th
study made for the second consecutive year by Acción
version of the Annual National Safety Competition.
RSE, within the framework of prizes for the best
Enersis was distinguished as the Best Managed Company
The Best Governed Major Latin Corpora-
sustainability reports.
tions 2008
Enersis and its subsidiary Endesa Chile obtained an
AmCham Prize for Good Corporate Citizen
outstanding position in The Best Governed Major
Chilectra received this recognition from AmCham Chile
Latin Corporations 2008, being among the Top 10
for its Multi-Use Playing Fields Lighting program, an
ANNUAL REPORT
SUSTAINABILITY
03. HUMAN RESOURCES
The training programs totaled 15,450 hours of
training, an average of 74 hours per employee and
LABOR CLIMATE
distributed as follows: 11% training for management,
52% for professionals and 37% for staff.
Towards the end of 2007, a working environment survey
was carried out in all the Enersis Group companies, the
OTHER ACTIVITIES
results of which were announced in the first quarter of
2008. This survey enabled to measure the perception of
During the year Enersis carried out several activities
each employee in terms of Environment, Commitment
focused on the wellbeing and satisfaction of its
and Corporate Culture and establish action lines in
personnel and their families. Some of the main activities
those areas requiring improvement. 98% of workers
were:
at Enersis took part voluntarily in the survey and the
• Dance workshops, sports schools, physical training
level of satisfaction obtained, measures through Work
Satisfaction and Motivation, was 81%.
programs and painting workshops.
Recreational programs and summer camps for
employees’ children held during summer and winter
TRAINING
vacations.
• Prizes awarded for academic excellence to employees’
Training activities were oriented to the development
of the necessary professional and technical skills for
children at tending junior, middle and senior
schools.
reaching and maintaining the efficiency levels. In
• Training activities for spouses and children of
addition to training programs in subjects like computer
personnel, focused on information technology and
use, languages, human resources and management
computer skills.
formation, training was also given this year in economic
• Organization of the Olympics, a bi-annual event in
and financial subjects, especially in training programs in
which all employees of the Enersis Group in Chile
International Financial Reporting Standards specifically
take part.
for the company. These programs took up 32% of the
• Corporate Volunteers Program for employees.
year’s training time.
• Second internal photographic competition.
A Leadership Development Program was also designed
for all company heads.
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ANNUAL REPORT
IDENTIFICATION OF THE SUBSIDIARY AND ASSOCIATE COMPANIES
ANNUAL REPORT
AGRÍCOLA DE CAMEROS
Name
Sociedad Agrícola
de Cameros Limitada
Kind of company
Limited partnership.
Tax No.
77,047,280-6
Subscribed & paid capital (ThCh$)
37,029,390
Objects
The exploitation of agricultural
land and all k inds of real - es t ate
activities, including the urbanization,
commercialization and disposal of land
in any legal form.
Business
Real estate.
Address
Camino Polpaico a Til-Til,
S/N Til-Til
Principal executive
Bernardo Küpfer Matte
Telephone
(56 2) 378 4700
Holding of Enersis
(direct & indirect)
55.00% - Unchanged.
5,738,046
Objects
The exploitation of agricultural land.
Business
Real estate.
Principal executive
Hugo Ayala Espinoza
Holding of Enersis
(direct & indirect)
57.50% - Unchanged.
AGRÍCOLA E INMOBILIARIA
PASTOS VERDES
Name
Agrícola e Inmobiliaria
Pastos Verdes Limitada
Kind of company
Limited partnership.
AGUAS SANTIAGO
PONIENTE
Name
Aguas Santiago Poniente S.A.
Kind of company
Closely-held corporation, subject to the
regulations for open corporations
Tax No.
96,773,290-7
Address
Américo Vespucio 100,
Pudahuel, Santiago, Chile
Telephone
(56 2) 601 0601
6,601,121
Address
Objects
Exclusively to establish, construct and
exploit public utilities for producing
and distributing water; collect, treat
and dispose of sewage, and carr y
out the other func tions expressly
authorized by Law 382 of 1988 and
its amendments.
Telephone
(56 2) 601 0601
Business
Water and related services.
Tax No.
78,970,360-4
Board of directors
Víctor M. Jarpa Riveros
Cristóbal Sánchez Romero
Andrés Salas Estrades
Luis F. Edwards Mery
José M. Guzmán Nieto
Principales ejecutivos
Jorge Alé Yarad
Shareholding of Enersis
(direct & indirect)
55.00% - Unchanged.
AMPLA ENERGÍA
Name
Ampla Energia e Serviços S.A.
Kind of company
Open corporation
(Chief Regional Planning & Control Officer, Enersis)
Ramón Castañeda Ponce
Luiz Felipe Lampreia
Alternate director
Marcos da Silva Crespo
Principal executives
Cristián E. Fierro Montes
José Alves de Mello Franco
Luciano A. Galasso Samaria
Carlos E. Naegele Moreira
Claudio Rivera Moya
Luiz Carlos Bettencout
Déborah M. Rosa Brasil
Albino Motta da Cruz
André Moragas da Costa
Aurelio R. Bustilho de Oliveira
Commercial relations
Structured loans
of any kind to holders of concessions,
permits or authorizations of electricity
ser vices and their customers and
participate as shareholder in other
energy sector companies.
Business
Investments.
Board of directors
Mário F. de Melo Santos
Antonio B. Pires e Abuquerque
Marcelo Llévenes Rebolledo
Rafael López Rueda
Nelson Ribas Visconti
Luiz Felipe Lampreia
Address
Praç a Le oni Ramos, N° 01 – S ão
Domingos, Niteroi, Río de Janeiro,
Brazil
(direct & indirect)
69.88% - Unchanged
Cristián E. Fierro Montes
Luiz Carlos Bettencourt
Telephone
(55 21) 2613 7000
Proportion of Enersis’s assets
2.26%
34,368,644
252,235,588
AMPLA INVESTIMENTOS
(direct & indirect)
69.88% - Unchanged.
Objects
S t u d y, p l a n , p r o j e c t , c o n s t r u c t
and explore electricity production,
transmission, transformation,
distribution and sale systems, and
provide related services that have been
or may be conceded; carry out research
in the energy sector and participate as
a shareholder in other companies in the
energy sector.
Name
Ampla Investimentos e
Serviços S.A.
Type of company
Open corporation
Address
Praça Leoni Ramos, N° 01 – parte São
Domingos, Niterói, Río de Janeiro,
Brazil
Business
Distribution of electricity.
Telephone
(55 21) 2613 7071
Board of directors
Mario F. de Melo Santos
Antonio B. Pires e Abuquerque
Eduardo dos Santos Machado
Objects
S t u d y, p l a n , p r o j e c t , c o n s t r u c t
and explore electricity production,
transmission, transformation,
distribution and sale systems, and
provide related services that have been
or may be conceded; provide services
0.22%
ARA - INGENDESA
Name
Consorcio Ara - Ingendesa Ltda.
Type of company
Limited partnership
Tax No.
77,625,850-4
Address
Santa Rosa 76, piso 10,
Santiago, Chile
Telephone
(562) 630 9000
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ANNUAL REPORT
Subscribe & paid capital (ThCh$)
1,000
Objects
Provision of engineering ser vices,
including the projection, planning and
per forming of engineering studies
and projects, advice and consultancy,
provision of assistance and technical
and management information,
inspection and development of projects
and works.
Business
Engineering services.
Representatives
Rodrigo Alcaíno Mardones
Alejandro Santolaya de Pablo
Alternate representatives
Fernando Orellana Welch
Julio Montero Montegú
Elías Arce Cyr
Cristián Araneda Valdivieso
Holding of Enersis
(direct & indirect)
29.99%- Unchanged.
ARA INGENDESA SENER
Name
Consorcio Ara - Ingendesa Sener Ltda.
Type of company
Limited partnership
Tax No.
76,738,990-6
Address
Santiago, Chile
Telephone
(562) 630 9000
1,000
Objects
per forming of engineering studies
and projects, advice and consultancy,
provision of assistance and technical
and management information,
and works.
Business
Representatives
Ernesto Ferrandiz Doménech
Cristián Araneda Valdivieso
Elías Arce Cyr
Joaquín Botella Malagón
Angel Ares Montes
Holding of Enersis
(direct & indirect)
19.99% - Unchanged.
Board of directors
Manuel Irarrázaval Aldunate
Daniel Bortnik
Ricardo Rodríguez
Horacio Reyser
José Ignacio Pires Medeiros
Carlos Ewandro Moreira
Eugenio Cabanes Durán
Ana Claudia Gonçalves Rebello
Aurélio Ricardo de Oliveira
(direct & indirect)
29.99% - unchanged
(direct & indirect)
53.36% - Unchanged.
CACHOEIRA DOURADA
CAM
Name
Centrais Elétricas Cachoeira
Dourada S.A.- CDSA
Name
Compañía Americana de
Type of company
Closely-held corporation
Type of company
Limited partnership
Address
Rodovia GO 206, Km 0, Cachoeira
Dourada Goiania, Goiás, Brazil
Tax No.
96,543,670-7
Business
Financial services.
ATACAMA FINANCE
Telephone
(55 62) 3434 9000
Name
Atacama Finance Co.
164,950,142
Type of company
Exempt company
Telephone
(562) 630 9000
Objects
Studies, projections, construction,
installation, operation and exploration
of electricity generating plants, plus the
related commercial activity. Promote
or par ticipate in other companies
constituted to produce electricity, in
or outside the state of Goiás, by the
subscription for any number of shares
or quotas.
4,009,635
Business
Electricity generation.
Objects
Borrowing of money in the financial
market through loans of the issue
of bonds or other instruments, and
loans of money to other companies,
p ar tic ular l y t ho s e relate d to t he
Atacama project.
Board of directors
Guilherme Gomes Lencastre
Manuel Herrera Vargas
Address
Caledonian House P.O. Box 265 G,
George Town, Grand Cayman, Cayman
Islands
Address
Tarapacá 934, Santiago, Chile
Telephone
(56 2) 389 7300
2,572,038
Objects
Provide for its own or third party’s
account &/or associated with other
parties, in Chile or abroad, services in
general, real estate and construction
of real estate, impor t, expor t and
distribute products of any kind.
Business
General services.
Representatives
Klaus Winkler Speringer
Gonzalo Mardones Pantoja
Eduardo López Miller
Gonzalo Mardones Pantoja
Omar Aramayo James
Pedro Carrizo Polanco
Alfredo Herrera Carrasco
Tomás Casanegra Rivera
Ricardo Camezzana Leo
Carlos A. Zarruk Gómez
Pablo Calderón Pacheco
Alejandro Cabrera Croqueville
Civil works management services and
supply of financial administration,
management, corporate and general
services. Trading current account.
Holding of Enersis
(direct & indirect)
100% - Unchanged.
1.02%
CAM ARGENTINA
Name
Multiservicios (CAM) S.R.L.
Type of company
Limited partnership
Address
Avda. Vélez Sarsfield 1160,
Capital Federal, Argentina
Telephone
(54 11) 4302 2951/58
636,450
Objects
The provision of professional and
technical ser vices to national and
international companies and organisms,
public and private, advice, technical
assistance, assembly, process control,
start-up and maintenance of systems,
machinery and apparatus, maintenance
of transport and distribution net works,
all related to the production, transport
and distribution of electricity.
ANNUAL REPORT
Business
General services.
Principal executive
Pablo Calderón Pacheco
Holding of Enersis
(direct & indirect)
100% - Unchanged.
CAM BRASIL
Name
Cam Brasil Multiserviços Ltda.
Type of company
Limited partnership
Address
Avda. José Mendonça de Campos, 680
São Gonçalo – RJ, Brazil
Telephone
(55 21) 2702 8000
4,049,388
Objects
Provision of electricity engineering
services, construction of networks and
large works, mass commercial activities
in utilities.
Business
General services.
Principal executive
Tomás Casanegra Rivera
Holding of Enersis
(direct & indirect)
100% - Unchanged.
CAM COLOMBIA
Name
Multiservicios Ltda. Colombia
Type of company
Limited partnership
Tax No.
76,003,204-3
Type of company
Telephone
(51 1) 561 1604
Address
Santiago, Chile
Tax No.
96,770,940-9
494,522
995,250
Telephone
(562) 630 9000
Objects
Provide for its own or third party’s
account &/or associated with other
parties, in Colombia or abroad, the
following activities: a) services: the
provision of professional and technical
services to national and international
companies and organisms, public
and private; b) construction and real
estate, through the construction and
renovation of all kinds of properties
and carrying out projects; c) import
and export of all kinds of materials;
d) trading, through the purchase, sale,
barter, fractioning, consignment and
distribution of all kinds of materials;
e) industrial, through the production,
assembly or manufacture in any of
their stages of all kinds of materials
or machiner y ; f ) design, creation,
ex ploitation and s ale of ser vices
and information and communication
technology (hardware &/or software);
g) investments through participation
in other companies.
Objects
Carry out for its own or third party’s
account professional and technical
s er v ices in the management and
purchase of materials or equipment
for services including those related
t o e l e c t r i c i t y, w a t e r, g a s a n d
communications; the administration
of warehouses and materials, control
and performing of works, metering
and calibration, advice, technical
assistance, assembly, process control,
start up and maintenance of systems,
machinery and apparatus, maintenance
of transport and distribution networks;
all related to the production, transport
a n d d i s t r i b u t i o n o f w a t e r, g a s ,
telecommunications and energy in
any of its forms. Construction and real
estate: construction and renovation of
all kinds of properties and the carrying
out of all kinds of property management
and project execution, direction and
carrying out of engineering and /or
architectural works in general.
12,284,743
Business
General services.
Business
General services.
Carlos Alberto Zarruk Gómez
Principal executive
Holding of Enersis
(direct & indirect)
100% - Unchanged.
Holding of Enersis
(direct & indirect)
100% - Unchanged.
CAM PERÚ
CANELA
Name
Multiservicios del Perú S.R.L.
Name
Central Eólica Canela S.A.
Address
Avda. Carrera 68 N° 5-21,
Bogotá, Colombia
Address
Jr. Teniente César López Rojas 201, piso
3, Maranga, San Miguel, Lima, Peru
Telephone
(57 1) 417 3000
Type of company
Limited partnership
Type of company
Objects
Promote and develop renewable energy
projec ts, principally wind energy,
identify and develop clean development
mechanism (CDM) projects and act
as depository and trader in emission
reduc tion cer tif icates originating
from these projects. The generation,
transport, distribution, supply and sale
of electricity, for which it may acquire
and exploit the respective concessions
and grants.
Business
Wind energy generation.
Board of directors
Juan Benabarre Benaiges
Claudio Iglesis Guillard
Sebastián Fernández Cox
Cristóbal García-Huidobro Ramírez
Alternate directors
Aníbal Bascuñan Bascuñan
Alan Fisher Hill
Claudio Betti Pruzo
Juan Cristóbal Pavéz Recart
Principal executive
Wilfredo Jara Tirapegui
(direct & indirect)
44.98% - Unchanged.
CELTA
Name
Compañía Eléctrica Tarapacá S.A.
Address
Santa Rosa 76, Santiago, Chile
Telephone
(562) 630 9000
103,099,643
Objects
Principally the production, transport,
distribution and supply of electricity,
in Chile and internationally, for which
it may obtain, acquire and exploit the
respective concessions and grants. Its
priority object until its conclusion is to
construct a thermal generating plant
and moorings or port facilities for the
loading and unloading of inputs and
other products in the sector called
Punta de Patache, to the south of
Iquique in Chile’s 1st Region. It also
inc lu d e s t h e c o ns t r uc t io n o f t h e
transmission line with its substations
b et we en the plant and the D oña
I n é s d e Co l l a h u a s i c o p p e r m i n e
and reinforcement of the Northern
Electricity Grid.
Business
Energy generation.
Board of directors
Chairman
Alejandro García Chacón
Directors
Alan Fischer Hill
Liones Roa Burgos
Principal executive
Eduardo Soto Trincado
(direct & indirect)
59.98%- Unchanged.
97
98
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ANNUAL REPORT
CEMSA
CENTRALES
HIDROELÉCTRICAS
DE AYSÉN S.A.
Bernardo Larraín Matte
Luis Felipe Gazitúa Achondo
Type of company
Corporation
Name
Centrales Hidroeléctricas
de Aysén S.A.
Address
Pasaje Ing. E. But t y 220, piso 16,
Buenos Aires, Argentina.
Type of company
Alternate directors
Carlos Martín Vergara
Eduardo Morel Montes
Carlos Urenda Aldunate
Cristián Morales Jaureguiberry
Name
Endesa Cemsa S.A.
Telephone
(5411) 4875 0600
7,020,284
Objects
For its own and /or for the account
and on behalf of third parties and /
or associated with other par ties,
the wholesale purchase and sale or
electricity power and energy produced
and /or consumed by third parties,
including but not limited to the import
and export of electricity power and
energy and the commercialization of
royalties, and the provision and /or
performing of services related to the
above activity, all in accordance with
prevailing regulations.
Business
Energy trading.
Board of directors
José María Hidalgo Martín-Mateos
José Venegas Maluenda
Fernando Antognazza
Alternate directors
Roberto José Fagan
Arturo Plácido Miguel
Pappalardo
Pedro Cruz Viné
Principal executive
Juan Carlos Blanco
(direct & indirect)
26.99% - Unchanged.
Tax No.
76,652,400-1
Address
Miraflores 383, Of. 1302,
Santiago, Chile
Telephone
(562) 713 5000
72,916,665
Objects
The development, financing, ownership
and exploitation of a hydroelectric
project in the 11th Region of Aysén,
which contemplates an estimated
capacit y of 2,355 MW distributed
between five hydroelectric plants,
which is called the “Aysén Project”.
The following activities form part of its
objects: a) the production and transport
of electricity; b) the supply and sale
of electricity to its shareholders; c)
the administration, operation and
maintenance of hydraulic work s,
electrical systems and hydroelectric
generating plants; d) the provision
of services related to its objects. The
above activities may be carried out
for its own or third party’s account.
The company may obtain, acquire and
exploit the required concessions and
permits for this purpose.
Business
Energy generation (project).
Board of directors
Antonio Albarrán Ruiz-Clavijo
Rafael Mateo Alcalá
Principal executive
Hernán Salazar Zencovich
(direct & indirect)
30.59% - Unchanged.
CHILECTRA
Name
Chilectra S.A.
Type of company
Open corporation
Board of directors
Jorge Rosenblut Ratinoff
José María Calvo-Sotelo
Pedro Buttazzoni Álvarez
Hernán F. Errázuriz Correa
Paolo Bondi
Macarena Carrión López
Principal ejecutives
Rafael López Rueda
Juan Pablo Larraín Medina
Gonzalo Vial Vial
Guillermo Pérez del Río
Andreas Gebhardt Strobel
Enrique Fernández Pérez
Structured loans; rentals of transmission
and substation lines; provision of
risk-prevention services; legal and
professional advice in business
a d minis t ratio n an d en gine er in g ,
financial management in general,
corporate and others.
390,008,060
Objects
Exploit abroad for its own or through
third parties the distribution and sale
of electricity. It may make investments
in foreign companies and make all
kinds of investments in all kinds of
mercantile instruments like bonds,
d e b e n t u re s , d e b t t i t l e s , c re d i t s ,
negotiable securities or other financial
or commercial documents, all with a
view to their natural and civil returns.
It may constitute, amend, dissolve
and liquidate foreign companies and
develop all other activities that are
complementary and/or related to the
above business.
Business
Investments.
Board of directors
Ricardo Mebus Pumpin
Tax No.
96,800,570-7
(direct & indirect)
99.09% - Unchanged.
Address
Santiago, Chile
Proportion Enersis’s assets
25.98%
(direct & indirect)
99.09% - Unchanged.
CHILECTRA INVERSUD
CHOCÓN
Name
Chilectra Inversud S.A.
Name
Hidroeléctrica El Chocón S.A.
Tax No.
99.573.910-0
Type of company
Corporation
Type of company
Address
Avda. España 3301,
Buenos Aires, Argentina
Telephone
(56 2) 675 2000
367,928,682
Objects
Exploit in Chile or abroad the
distribution and sale of hydraulic,
thermal, heat or any kind of electricity,
and the distribution, transport and
sale of fuels of any kind, supplying
this energy or fuel to most consumers
directly or through other companies.
Business
Energy distribution.
Address
Santa Rosa 76, piso 8, Santiago,
Chile
Telephone
(56 2) 675 2000
Ricardo Mebus Pumpin
Paid capital (ThCh$)
216,258,846
Objects
Production of electricity and its block
commercialization.
ANNUAL REPORT
Business
Energy generation.
electricity, including import and export
activities.
Business
Telephone
(55 85) 3453-4082
Board of directors
José Miguel Granged Bruñen
Miguel Ortiz Fuentes
Julio Valbuena Sánchez
Alex Valdez
Julio Anguita
Orlando Díaz
Business
Energy transmission.
Board of directors
José Antonio Vargas Lleras
Andrés Regué Godall
Orlando Cabrales Martínez
Lucio Rubio Díaz
Astrid Martínez Ortiz
Juan Carlos Ortega Lopez
Carlos Bello Vargas
238,219,177
Alternate directors
Fernando Antognazza
Francisco Domingo Monteleone
Juan Carlos Blanco
Héctor Osvaldo Mendiberri
Juan Carlos Nayar
Enrique Díaz
Principal executive
Fernando Claudio Antognazza
(direct & indirect)
39.21% - Unchanged.
CIEN
Name
Compañía de Interconexión
Energética S.A.
Type of company
Corporation
Address
Praça Leoni Ramos, N° 1, piso 6,
Bloco 2, São Domingos, Niterói, Río
de Janeiro, Brazil
Telephone
(55 21) 3607 9500
123,874,173
Objects
The produc tion, industrialization,
distribution and commercialization of
Board of directors
Marcelo Andrés Llévenes Rebolledo
José Augustín Venegas Maluenda
Aurelio Ricardo Bustillo de Oliveira
Luiz Carlos Ortins de Bettencourt
José Ignácio Pires Medeiros
Manuel Rigoberto Herrera Vargas
Carlos Ewandro Naegale Moreira
Eugenio Cabanes Durán
(direct & indirect)
53.57% - Unchanged.
CODENSA
Name
Codensa S.A. E.S.P.
Type of company
Corporation
Address
Carrera 13 A 93-66, Bogotá,
Colombia
Telephone
(57 1) 601 6060
Subscribed and paid capital (ThCh$)
495,005,355
Objects
Distribution and sale of electricity
and the performing of all connected,
complementary and related activities to
the distribution and sale of electricity,
carrying out of works, designs and
consultancy in electrical engineering
and the sale of products to the benefit
of its customers.
Alternate directors
David Felipe Acosta
Roberto Ospina Pulido
Antonio Sedán Murra
Cristián Herrera Fernández
Henry Navarro Sánchez
Héctor Zambrano Rodríguez
Consuelo Beltrán Yazmit
Secretario del Directorio
Andrés Caldas Rico
David Acosta Correa
Cristal Otárola Restrepo
Alba Urrea Gómez
Margarita Olano Olano
Luis Larumbe Aragón
Álvaro Camacho Borrero
Roberto Ospina Pulido
Carlos De La Espriella
Omar Serrano Rueda
(direct & indirect)
21.81% (+0.8% change).
1.84%
COELCE
Name
Companhia Energética do Ceará
Type of company
Foreign open corporation
Address
Rua Padre Valdevino, 150 - Centro,
Fortaleza, Ceará, Brazil
Objects
The distribution of elec tricit y and
related services in the state of Ceará.
Business
Board of directors
Mario Fdo. de Melo Santos
Gonzalo Vial Vial
Aurélio Bustilho de Oliveira
Jorge Parente Frota Júnior
Fernando de Moura Avelino
Cristián Fierro Montes
Roberto de Paula Macieira
Antônio Pires e Albuquerque
Luciano A. Galasso Samaria
Teobaldo José Cavalcanti Leal
José Alencar Araripe Júnior
Vladia Viana Regis
José Renato Ferreira Barreto
José Nunes de Almeida Neto
Juarez Ferreira de Paula
José Távora Batista
Abel Alves Rochinha
José Nunes de Almeida Neto
Olga Jovanna Carranza Salazar
José Távora Batista
Silvia Cunha Saraiva Pereira
(direct & indirect)
34.90% - Unchanged.
COMPAÑÍA PERUANA
DE ELECTRICIDAD
Name
Compañía Peruana de
Electricidad S.A.C.
Type of company
Address
Jr. Teniente César López Rojas 201,
Maranga, San Miguel, Lima, Peru
Telephone
(511) 561 1604
15,081,231
Objects
Make investments in general, especially
those related to the distribution and
generation of electricity.
Business
Principal executive
Ignacio Blanco Fernández
(direct & indirect)
50.54% - Unchanged.
0.00%
CONSTRUCCIONES
Y PROYECTOS LOS
MAITENES
Name
Construcciones y Proyectos
Los Maitenes S.A.
Type of company
Tax No.
96,764,840-K
99
100
enersis08
ANNUAL REPORT
Address
Address
Avda. España 3301,
Telephone
(56 2) 601 0601
Telephone
(5411) 4307 3040
Address
Bartolomé Mitre 797, piso 13, Buenos
Aires, Argentina
4,712,875
103,105,536
10,059,230
Objects
a) The construction for own or third
par ties’ account, on own or other
land, urbanized or not, of all kinds of
civil works, installations, buildings,
housing, offices and others; b) the sale
or disposal in any form of such building
works; c) the study and development
of projects for such buildings, including
engineering, architecture, financing,
commercialization, etc. For this, it
may act for its own or third party’s
account, either directly or forming
part of associations, communities,
companies and legal entities of any
kind, in which it may also assume the
management.
Objects
The production of electricity and its
block sale.
Objects
Provide high-tension elec tricit y
transmission services both in relation
to national and international electricity
systems, in accordance with current
legislation, for which it may participate
in national or international tenders,
become a public-utilit y elec tricit y
concession-holder in high tension
nationally or internationally and carry
out all activities necessary for meeting
its objects, including expressly but not
limited to becoming party to contracts
for the construction, operation and
maintenance for the star t and / or
expansion of electricity transmission
lines, participate in the financing of
projects related directly or indirectly
with those enterprises as lender and/
or borrower and/or guarantor in favor
of third parties.
Business
Real estate.
Board of directors
Victor Jarpa Riveros
Luis Felipe Edwards Mery
José Manuel Guzmán Nieto
Principal executive
(direct & indirect)
55.00% - Unchanged.
Business
Energy generation.
Board of directors
Máximo Bomchil
César F. Amuchástegui
Eduardo J. Romero
Directores suplentes
Francisco Monteleone
Fernando C. Antognazza
Jorge Burlando Bonino
Roberto Fagan
Sergio Schmois
Bernardo Iriberri
Alfredo Mauricio Vítolo
Fernando Carlos Luis Boggini
Rodolfo Silvio Bettinsoli
Jorge Burlando
Sergio Schmois
Francisco Monteleone
COSTANERA
(direct & indirect)
41.85% - Unchanged.
Name
Endesa Costanera S.A.
CTM
Type of company
Corporation
Name
C o m p a ñ í a d e Tr a n s m i s i ó n d e l
Mercosur S.A.
Type of company
Corporation
Business
Board of directors
Guilherme Lencastre
Arturo Miguel Pappalardo
Alternate directors
Juan Carlos Blanco
Roberto José Fagan
Principal executive
Francisco J. Bugallo Sánchez
(direct & indirect)
53.56% - Unchanged.
DISTRILEC INVERSORA
Name
Distrilec Inversora S.A.
Type of company
Foreign closely-held corporation
Address
San José 140 (C1076AAD)
Telephone
(54 11) 4370 3700
323,001,957
Objects
Exclusively to invest in companies
constituted or to be constituted whose
principal activity is the distribution of
electricity or that directly or indirectly
participate in companies with that
principal business through all kinds
of financial and investment activities,
except those in the laws of financial
entities, the purchase and sale of
public and private debt paper, bonds,
shares, negotiable instruments and the
granting of loans, and the placement
of its funds in bank deposits of any
kind.
Business
Investments.
Board of directors
Claudio Fontes Nunes
Rafael López Rueda
Daniel Casal
Santiago Daireaux
Fermín Demonte
María Inés Justo
Gabriel Marchione
Rigoberto Mejía Aravena
Gonzalo Vial Vial
Pedro Eugenio Aramburu
Manuel María Benites
Esteban Diez Peña
Mónica Diskin
Roberto José Fagan
Martín Mandarano
Jean Yatim Morillas
Enrique Rosello
Jorge Vugdelija
Principal executive
(direct & indirect)
50.93% - Unchanged.
2.04%
EDEGEL
Name
Edegel S.A.A.
Type of company
Open corporation
Address
Avda. Víc tor Andrés Belaúnde
147, edificio real 4, piso 7, Centro
Empresarial Camino Real, San Isidro,
Lima, Peru
540,044,533
Objects
Principally, and in general, electricity
generation activities, also the acts
and civil, industrial, commercial and
any operations relating or leading to
the principal objects.
Business
Energy generation.
Board of directors
Giora Almogy
Reynaldo Llosa Barber
Ricardo Harten Costa
Alfonso Bustamante Canny
Alberto Triulzi Mora
ANNUAL REPORT
Julián Cabello Yong
Arrate Gorostidi Aguirresarobe
Francisco García Calderón
Roberto Cornejo Spickernagel
Jaime Zavala Costa
Milagros Noriega Cerna
Rosa M. Flores-Aráoz Cedrón
Carlos Luna Cabrera
Christian Schroder Romero
Rosa M. Flores-Aráoz Cedrón
Gonzalo Carbó De Haya
Carlos Solís Pino
Walter Sciutto Brattoli
Rocío Pachas Soto
Teobaldo Leal Cavalcante
Luis Salem Hone
Pamela Gutiérrez Damiani
Alfonso Valle Cisneros
(direct & indirect)
33.54% - Unchanged
(direct & indirect)
19.83% - Unchanged
EDESUR
EDELNOR
Name
Empresa Distribuidora Sur S.A.
Name
Empresa de Distribución
Eléctrica de Lima Norte S.A.A.
Type of company
Foreign open corporation
Address
Jr. Teniente Cesar López Rojas 201 Urb.
Maranga, San Miguel, Lima, Peru
Telephone
(51 1) 561 2001
60,324,359
Objects
The provision of electricity distribution,
transmission and generation services.
Business
Energy distribution
Board of directors
Reynaldo Llosa Baber
Ricardo Vega Llona
Rafael López Rueda
Alfredo Ferrero Diez Canseco
Róger Espinosa Reyes
Manuel Benites
Roberto Fagan
Daniel Casal
Pablo Martín Lepiane
Alan Arntsen
Pedro Eugenio Aramburu
María Inés Justo
Álvaro Estivariz
Héctor Ruiz Moreno
Sandro Rollan
Daniel Colombo
Daniel Alasia
Juan Garade
Juan Verbitsky
José María Gottig
Daniel Martini
Jorge Lukaszczuk
Type of company
Foreign corporation
(direct & indirect)
65.39% - Unchanged
Address
San José 140 (1076),
Capital Federal, Argentina
2.13%
Telephone
(54 11) 4370 3700
588,278,979
Objects
Distribution and commercialization of
electricity and related operations.
Business
Board of directors
Rafael López Rueda
Claudio Fontes Nunes
Rafael Arias Salgado
Miguel Beruto
Juan Pablo Larraín Medina
Rigoberto Mejía Aravena
Marcelo Silva Iribarne
Gonzalo Vial Vial
Santiago Daireaux
ELECTROGAS
Name
Electrogas S.A.
Type of company
Tax No.
96,806,130-5
Address
Evar is to L illo 78 , pis o 4, O f. 41,
Santiago, Chile
Telephone
(562) 321 7737
Objects
The provision of transport services for
natural gas and other fuels, for its own
or third party’s account, for which it
may construct, operate and maintain
gas, oil and multi-use pipelines and
complementary installations.
Business
Transport of gas.
13,534,844
Board of directors
Felipe Aldunate Hederra
Pedro Gatica Kerr
Enrique Donoso Moscoso
Rosa Herrera Martínez
Alternate directors
Sergio Arévalo Espinoza
Jorge Bernardo Larraín Matte
Ricardo Santibáñez Zamora
Gastón Cáceres Videla
Principal executive
Carlos Andreani Luco
(direct & indirect)
25.49% - Unchanged.
EMGESA
Name
Emgesa S.A. E.S.P.
Type of company
Public utility corporation
Address
Carrera 11 82-76, piso 4, Santa
Fe de Bogotá, D.C. Colombia
926,926,416
Objects
The generation and sale of electricity
and the per forming of all similar,
connected, complementary and related
activities.
Business
Energy generation.
Board of directors
José A. Vargas LLeras
Astrid Martínez Ortiz
Lucio Rubio Díaz
Luisa Fernanda Lafourie
Juan Ricardo Ortega
José Iván Velásquez
Alternate directors
Fernando Gutiérrez Medina
Gustavo Gómez Cerón
Henry Navarro Sánchez
Manuel Jiménez Castillo
Oscar Alberto Molina García
Lucio Rubio Díaz
Andrés Caldas Rico
Juan Manuel Pardo
Javier Blanco Fernández
Gustavo Gómez Cerón
Fernando Gutiérrez Medina
María Celina Restrepo
(direct & indirect)
16.12%- Unchanged
EMPRESA ELÉCTRICA
DE COLINA
Name
Empresa Eléctrica de Colina Ltda.
Type of company
Limited partnership
Tax No.
96,783,910-8
Address
Chacabuco 31, Colina,
Santiago, Chile
Telephone
(56 2) 844 4280
82,222
Objects
Distribution and sale of electricity and
home, sports, relaxation and computer
electrical appliances.
101
102
enersis08
ANNUAL REPORT
Business
Principal executive
Leonel Martínez Garrido
Holding of Enersis
(direct & indirect)
99.09% - Unchanged
ENDESA ARGENTINA
Name
Endesa Argentina S.A.
Type of company
Corporation
Address
Suipacha 268, piso 12,
Telephone
(5411) 4307 3040
Objects
Investmentrs in companies for the
production, transport and distribution
of electricity and its sale, and financial
activities except for those reserved by
law for banks.
Business
Investments.
113,993,484
Board of directors
Néstor José Belgrano
Francisco Martín Gutiérrez
Alternate directors
María Inés Corrá
Marcelo A. Den Toom
Hugo Pedro Lafalce
(direct & indirect)
59.98% - Unchanged.
ENDESA BRASIL
Name
Endesa Brasil S.A.
Type of company
Corporation
Adddress
Praça Leoni Ramos, 1 – 7
andar – bl. 02 - Parte, Niterói,
Río de Janeiro, Brazil
Telephone
(5521) 3607 9500
225,542,537
Objects
a ) Par ticipation in the c apit al of
other companies that act or become
constituted to act directly or indirectly
in any segment of the elec tricit y
sec tor, including companies that
provide ser vices to companies in
that sector, in Brazil or elsewhere,
as partner or shareholder, within the
legally permitted limits and, where
necessary, subject to obtaining the
necessary government approvals; b) the
provision of transmission, distribution,
generation or selling of electricity and
related activities; and c) participation,
individually or through joint ventures,
consortia or other similar forms of
association, in tenders, projects and
enterprises for the provision of the
ser vices and ac tivities mentioned
above.
Business
Investments.
Board of directors
Mario Fernando de Melo Santos
José María Calvo-Sotelo Martín
(Chief Executive Officer of Enersis)
Antonio B. Carvalho e Albuquerque
Rafael López Rueda
Aurelio De Oliveira
Eugenio Cabanes
Antonio Pires e Albuquerque
Carlos Ewandro Naegele Moreira
Enrique de las Morenas
(direct & indirect)
53.57% - Unchanged.
7.03%
ENDESA CHILE
Name
Empresa Nacional de
Electricidad S.A.
Borja Prado Eulate
Jaime Estévez Valencia
Leonidas Vial Echeverría
Raimundo Valenzuela Lang
Renato Fernández Baeza
Juan Carlos Mundaca Álvarez
Trading current accounts, provision of
accounting, money desk and treasury
services.
Type of company
Open corporation
(direct & indirect)
59.98% - Unchanged.
Tax No.
91,081,000-6
44.05%
Address
ENDESA ECO
Telephone
(56 2) 630 9000
1,331,714,085
Objects
Generation and supply of electricity,
sale of consultancy and engineering
services in Chile and elsewhere and
the construction and exploitation of
infrastructure works.
Business
Energy generation
Board of directors
Mario Valcarce Durán
Juan Gallardo Cruces
Francesco Buresti
Pío Cabanillas Alonso
Fernando D’Ornellas Silva
Name
Endesa Eco S.A.
Type of company
Tax No.
76,313,310-9
Address
Santiago, Chile
Telephone
(56 2) 630 9000
681,845
Objects
Promote and develop renewable energy
projects like mini hydroelectric, wind,
geothermal, solar, biomass and others;
identify and develop clean development
mechanism (CDM) projects and act
as depositary and trader of emission
reduction certificates generated by
these projects.
Business
Energy generation.
Board of directors
Principal executive
Wilfredo Jara Tirapegui
(direct & indirect)
59.98% - Unchanged.
ENDESA FORTALEZA
Name
CGTF - Central Geradora
Termeléctrica Fortaleza S.A.
Type of company
Address
Rodovia 422, Km 1 s /n, Complexo
Industrial e Portuário de Pecém Caucaia
– Ceará, Brazil
Telephone
(55 85) 3464-4100
41,132,630
Objects
a) Study, project, construct and explore
systems of production, transmission,
distribution and commercialization of
electricity under concessions, permits
or authorizations under any title, and
other activities related to the provision
of services of any kind related to the
above activities; b) the acquisition,
obtaining and exploration of any
right, concession or privilege related
to the above activities and the carrying
out of all the other acts and business
ANNUAL REPORT
necessary for achieving its objects; and
c) participation in the capital of other
companies as shareholder or partner,
whatever their objects.
ENERGEX
Business
Energy generation.
Type of company
Exempt company
Address
Marcelo Andrés Llévenes Rebolledo
Address
Caledonian House P.O. Box 265 G,
George Town, Grand Cayman, Cayman
Islands
Raimundo Câmara Filho
José Ignácio Pires Medeiros
Eugenio Cabanes
(direct & indirect)
53.57% - Unchanged.
ENDESA MARKET PLACE
Name
Endesa Market Place
(in liquidation)
Type of company
Foreign corporation
Address
Ribera de Loira, 60 CP 28042, Madrid,
Spain
Telephone
(3491) 213 1000
Subscribed & paid capital (euros)
6,743,800
Objects
B2B and new technologies.
Liquidator
Ramón Cabezas Navas
(direct & indirect)
15% - Unchanged.
Name
Energex Co.
6,365
Objects
Any business or activity according to
the laws of the Cayman Islands. In
the case of businesses or activities in
the financial area, excepted are those
reserved for banks. It is also forbidden
to do business with firms or persons
domiciled in the Cayman Islands.
Business
Investments.
Board of directors
Daniel Bortnik Ventura
Ricardo Rodríguez
Horacio Reyser
(direct & indirect)
29.99% - Unchanged.
ENIGESA
Name
Endesa Inversiones Generales S.A.
Type of company
Tax No.
96,526,450-7
Address
Telephone
(56 2) 630 9000
3,055,838
185,515,048
Telephone
(562) 366 3800
Objects
The acquisition, sale, administration
and exploitation, for its own or third
party’s account, of all kinds of real
estate, movable assets, securities and
other commercial paper; carr y out
studies and consultancies; provide all
kinds of services; participate on all
kinas of investments and especially
those related to the electricity business;
participate in all kinds of company
and carr y out all operations, ac ts
and contracts related to the above
objects.
Objects
a) The administration and management
of the companies Gasoducto
Atacama Chile Limitada, Gasoducto
Atacama Argentina Limitada,
GasAtacama Generación Limitada
and other companies agreed to by
t h e sha re h o l d e r s ; b ) inv e s t m e n t
of resources, own or third party’s,
in all kinds of assets, corporeal or
incorporeal, securities, shares and
commercial paper.
117,759,280
Business
Real estate.
Board of directors
Jaime Montero Valenzuela
Principal executive
Rental of properties.
(direct & indirect)
59.96% - Unchanged.
Business
Investments.
Board of directors
Raúl Sotomayor Valenzuela
Gonzalo Dulanto Letelier
Alternate directors
Pedro Pablo Errázuriz
Domínguez
Eduardo Ojea Quintana
Principal executive
Rudolf Araneda Kauert
GASATACAMA
(direct & indirect)
29.99% - Unchange.
Name
GasAtacama S.A.
GASATACAMA CHILE
Type of company
Name
GasAtacama Chile S.A.
Tax No.
96,830,980-3
Type of company
Address
Isidora Goyenechea 3365, piso 8,
Santiago, Chile
Tax No.
78,932,860-9
Telephone
(562) 366 3800
Address
Isidora Goyenechea 3365, piso 8, Las
Condes, Santiago, Chile
Objects
a) Exploit the generation,
transmission, purchase, distribution
and sale or electricity or any other
nature; b) the purchase, extraction,
exploitation, processing, distribution,
commercialization and sale of
combustible solids, liquids and
gases; c) the sale and provision of
engineering services; d) the obtaining,
purchase, transfer, rental, charging
and exploitation in any way of the
concessions referred to in the General
Elec trical Ser vices L aw, maritime
concessions and water-usage rights of
any kind; e) the transport of natural
gas, through its own means or together
with other parties within Chile or other
countries, including the construction,
lo c atio n an d e x ploi t atio n of gas
pipelines and other activities related
directly or indirectly to it; f ) invest
in all kinds of assets, corporeal or
incorporeal, movable or immovable;
g) the organization and constitution
of all kinds of company whose objects
are related or linked to energy in any of
its forms or that have electricity as their
principal input, or correspond to any of
the activities mentioned above.
Business
Electricity generation & transportation
of gas.
Board of directors
Alternate directors
Pedro Pablo Errázuriz Domínguez
Principal executive
103
104
enersis08
ANNUAL REPORT
(direct & indirect)
29.99% - Unchanged.
GASODUCTO ATACAMA
ARGENTINA
Name
Gasoducto Atacama Argentina S.A.
Type of company
Tax No.
78,952,429-3
Address
Isidora Goyenechea 3365, piso 8, Las
Telephone
(562) 366 3800
132,491,785
Objects
The transport of natural gas, through
its own means or together with other
parties within Chile or other countries,
including the construction, location and
exploitation of gas pipelines and other
activities related directly or indirectly
to it
Business
Gas transportation.
Board of directors
Pedro De la Sotta Sánchez
Luis Vergara Aguilar
Rafael Zamorano Chaparro
(direct & indirect)
29.99% - Unchanged.
GASODUCTO TALTAL
GENERANDES PERÚ
GNL CHILE
Name
Gasoducto Taltal S.A.
Name
Generandes Perú S.A.
Name
GNL Chile S.A.
Type of company
Type of company
Corporation
Type of company
Tax No.
77,032,280-4
Address
Avda. Víctor Andrés Belaúnde 147,
Torre Real, piso 7, San Isidro, Lima,
Peru
Tax No.
76,418,940-K
Address
Telephone
(562) 630 9000
Objects
The transport, commercialization and
distribution of natural gas, through
its own means or together with other
parties within Chile, especially in the
towns of Mejillones and Paposo in the
2nd Region, including the construction,
lo c atio n an d e x ploi t atio n of gas
pipelines and other activities related
directly or indirectly to it
Business
Gas transportation.
14,953,214
Board of directors
Pedro De la Sotta Sánchez
Rafael Zamorano Chaparro
Luis Vergara Aguilar
Alternate directors
Luis Cerda Ahumada
Alejandro Sáez Carreño
Gustavo Venegas Castro
Verónica Cortez Silva
Principal executive
Rudolf Araneda
(direct & indirect)
29.99% - Unchanged.
Telephone
(511) 215 6300
226,548,198
Objects
Ac tivities related to elec tricit y
generation, directly and /or through
companies constituted for this
purpose.
Business
Investments.
Board of directors
Javier García Burgos Benfield
José Chueca Romero
Giora Almogy
Alberto Triulzi Mora
Roberto Cornejo Spickernagel
Guillermo Lozada Pozo
Rosa María Flores-Aráoz Cedrón
Carlos Rosas Cedillo
Juan Carlos Camogliano Pazos
Carlos Luna Cabrera
(direct & indirect)
36.59% (+ 0.82% change).
Address
Avda. Apoquindo 3.500, piso 6, Las
Board of drectors
Eduardo Morandé Montt
Alternate directors
Gonzalo Palacios Vásquez
Rosa Herrera Martinez
Principal executive
Antonio Bacigalupo Gittins
(direct & indirect)
19.99% - Unchanged.
Telephone
(562) 499 0920
GNL QUINTERO
1,926,000
Name
GNL Quintero S.A.
Objects
a) Contract the services of the liquefied
natural gas ( LNG ) re- gasification
company GNL Quintero S.A. and use
all the LNG storage, processing and
re- gasification capacit y of it s regasification terminal, including its
expansions if any and any other matter
stated in the contract that the Company
signs for the use of the re-gasification
terminal; b) import LNG under the
delivered on ship ( DES) method
from LNG suppliers under purchase
agreements; c) the sale and delivery
of natural gas under contracts signed
by the company with its customers;
d ) administer and coordinate the
programming and nominations of LNG
cargoes, and the delivery of natural
gas among the different customers;
e) comply with all its obligations and
demand compliance with all its rights
under the contracts mentioned and
coordinate all the activities covered
by them, and in general carry out any
type of act or contract that may be
necessary, useful or convenient for
meeting its objects.
Type of company
Business
Sale of LNG.
Tax No.
76,788,080-4
Address
Avda. Apoquindo 3.500, piso 6, Las
Telephone
(562) 499 0900
Paid capital (ThChM$)
124,669,324
Objects
Develop, finance, design and
engineering, supply, construct, startup, test, conclude, acquire, operate
and maintain the liquefied natural gas
(LNG) re-gasification terminal and any
other activity leading or related to this
object, including but not limited to the
direction and management of all the
commercial agreements necessar y
for the reception of LNG (or deliver
to customers), LNG re-gasification,
distribution of LNG re-gasified to the
respective distribution point and the
sale of storage services and capacity,
processing and re - gasif ication of
the re-gasification terminal and its
ANNUAL REPORT
expansions, if any. Perform any type of
act or contract that may be necessary,
useful or convenient for meeting the
object.
Business
LNG re-gasification.
Board of directors
Eduardo Morandé Montt
William Jude Way
Elizabeth Grace Spomer
Alternate directors
Graham Cockroft
Francisco Gazmuri Schleyer
Diego Hollweck
Principal executive
Antonio Bacigalupo Gittins
(direct & indirect)
12% - Unchanged.
hydroelectric generation project that
Hidroaysén is planning to build in the
11th Region of Aysén, Chile.
Business
Electricity transmission
(project).
Board of directors
Antonio Albarrán Ruiz-Clavijo
Bernardo Larraín Matte
Luis Felipe Gazitúa Achondo
Alternate directors
Eduardo Morel Montes
Carlos Urenda Aldunate
Cristián Morales Jaureguiberry
Hernán Salazar Zencovich
HIDROAYSÉN
TRANSMISIÓN
(direct & indirect)
30.59% (new company).
Name
HidroAysén Transmisión S.A.
HIDROINVEST
Type of company
Name
Hidroinvest S.A.
Tax No.
76,041,891-9
Type of company
Corporation
Address
Miraflores 383, Of. 1302,
Santiago, Chile
Address
Avda. España 3301,
Telephone
(562) 713 5000
Telephone
(5411) 4307 3040
31,823
28,655,139
Objects
Develop, and alternatively or
additionally manage, the electricity
transmission systems required by the
Objects
Acquire and maint ain a majorit y
shareholding in Hidroeléc tric a El
Chocón S.A.
Business
Investments.
Board of directors
Francisco Domingo Monteleone
Roberto José Fagan
Alternate directors
Daniel Garrido
Juan Carlos Blanco
Jorge Burlando Bonino
Rodrigo Quesada
Rodolfo Bettinsoli
Fernando Boggini
(direct & indirect)
57.64% - Unchanged.
INGENDESA
Name
Empresa de Ingeniería Ingendesa S.A.
Type of company
Tax No.
96,588,800-4
dif ferent fields, of environmental
a d v i c e, i n c l u d i n g t h e m a k i n g o f
environmental impac t studies and
in general consultanc y ser vices in
every specialty, in Chile and abroad,
whether directly, associated with or
through third parties, for which it may
form or join companies, corporations,
foundations or consortia of any kind.
Business
Board of directors
Rafael de Cea Chicano
Aníbal Bascuñán Bascuñán
Principal executive
(direct & indirect)
59.98% - Unchanged.
INGENDESA - ARA
Name
Sociedad Consorcio
Ingendesa - Ara Ltda.
Type of company
Limited partnership
Tax No.
76,197,570-6
Address
Address
Santiago, Chile
Telephone
(562) 630 9000
Telephone
(562) 630 9000
2,383,485
1,000
Objects
The provision of engineering services,
inspection of works, inspection and
reception of materials and equipment,
o f l a b o r a t o r y, o f a p p r a i s a l s , o f
management of companies in
Objects
carrying out of engineering studies
and projects, providing advice and
consultancies, granting of assistance
and technical information and the
administration, inspection and
development of projects and works.
Business
Representatives
Alternative representatives
Cristian Araneda Valdivieso
Elías Arce Cyr
(direct & indirect)
29.99% - Unchanged.
INGENDESA BRASIL
Name
Ingendesa do Brasil Ltda.
Type of company
Limited partnership
Address
Avda. Rio Branco 115, pavimento 10,
sala 1005, Centro, Río de Janeiro,
Brazil
Telephone
(5521) 2232 9039
126,015
Objects
The provision of services of engineering,
studies, projects, technical consultancy,
administration, inspection and
supervision of works, inspection and
reception of materials and equipment,
laboratory, appraisals, commercial
representation of Chilean and foreign
engineering companies, and other
services that the legal powers permit
in the practice of the professions or
engineering, architecture, agronomy,
geology and meteorology in all their
specialties in Chile and abroad, whether
105
106
enersis08
ANNUAL REPORT
directly or indirectly, for which it may
participate in companies or consortia
of any kind.
Holding of Enersis
(direct & indirect)
29.99% - Unchanged.
Business
INMOBILIARIA
MANSO DE VELASCO
Representative
Sergio Campos Ribeiro
Holding of Enersis
(direct & indirect)
59.98% - Unchanged.
INGENDESA MINMETAL
Name
Consorcio Ingendesa–Minmetal Ltda.
Type of company
Limited partnership
Tax No.
77,573,910-k
Address
Telephone
(562) 630 9000
Objects
The provision of engineering services,
making of engineering studies and
projects, advice and consultancy, the
granting of technical assistance and
information and the administration,
and works.
Business
2,000
Representatives
Rodrigo Muñoz Pereira
Osvaldo Dinner Reich
Carlos Freire Canto
Name
Inmobiliaria Manso de
Velasco Ltda.
Type of company
Limited partnership
Tax No.
79,913,810-7
Address
Miraflores 383, piso 29,
Santiago, Chile
Telephone
(562) 378 4700
Objects
Acquisition, disposal, commercialization
and exploitation of real estate and
investment companies.
Business
Real estate.
25,916,800
Representatives
Cristóbal Sanchez Romero
Alfonso Salgado Menchaca
Hugo Ayala Espinoza
Rental of proper ties, provision of
money desk, accounting, tax and other
services. Trading current account.
Holding of Enersis
100% - Unchanged.
0.78%
Type of company
Foreign corporation
Type of company
INVERSIONES
CODENSA S.A.
Address
Jr. Teniente César López Rojas 201,
Maranga, San Miguel, Lima, Peru.
Tax No.
96,889,570-2
Name
Inversiones Codensa S.A.
Type of company
Coporation
Address
C a r r e r a 13 A N 93 - 6 6 , B o g o t á ,
Colombia
Telephone
(571) 601 6060
Subscribed &paid capital (ThCh$)
3,141
Objects
Investment in residential energy publicutility service activities, especially the
acquisition of shares in any company
dedicated to that business.
Business
Investments.
Board of directors
Lucio Rubio Díaz
Andrés Caldas Rico
Mario Trujillo Hernández
Margarita Olano Olano
Álvaro Francisco Camacho Borrero
Fabiola Leal Castro
Telephone
(511) 561 1604
Address
Evaristo Lillo 78, piso 4, Of. 41,
Santiago, Chile
60,324,359
Telephone
(562) 321 7737
Objects
Make investments in general, especially
those related to the distribution and
generation and other operations of
electricity.
Objects
To buy, sell, invest and hold shares in
the closely-held company Electrogas
S.A.
Business
Investments.
Board of directors
Reynaldo Llosa Barber
Rafael López Rueda
(Chief Regional Planning & Control
Officer of Enersis)
Alternate directors
Manuel Muñoz Laguna
Fernando Fort Marie
Walter Néstor Sciutto Brattoli
Zoila Patricia Mascaró Díaz
Business
Investments.
12,117,936
Board of directors
Felipe Aldunate Hederra
Pedro Gatica Kerr
Rosa Herrera Martínez
Alternate directors
Jorge B. Larraín Matte
Ricardo Santibáñez Zamora
Gastón Cáceres Videla
Principal executive
Carlos Andreani Luco
Legal representative
(direct & indirect)
55.90% - Unchanged.
(direct & indirect)
25.49% - Unchanged.
(direct & indirect)
21.67% - Unchanged.
0.65%
INVERSIONES
ENDESA NORTE
INVERSIONES
ELECTROGAS
Name
Inversiones Endesa Norte S.A.
Name
Inversiones Electrogas S.A.
Type of company
INVERSIONES
DISTRILIMA
Name
Inversiones Distrilima S.A.
ANNUAL REPORT
Tax No.
96,887,060-2
Telephone
(562) 366 3800
Address
Objects
a) The direct or indirect participation
through any kind of association in
companies whose objects are one or
more of the following: i) the transport
of natural gas in any of its forms; ii)
the generation, transmission, purchase,
distribution and sale of energy, and iii)
financing of the activities stated in i)
and ii) above managed by third parties.
b) the perception and investment of the
assets invested in. The objects include
all lucrative activities related to the
above and other businesses that the
partners agree.
Telephone
(562) 630 9000
Objects
Make investments in energy projects
in the nor th of Chile related to
the companies of the GasAtacama
project.
Business
Investments.
92,571,642
Board of directors
Alternate directors
Raúl Arteaga Errázuriz
(direct & indirect)
59.98% - Unchanged
INVERSIONES
GASATACAMA HOLDING
Name
Inversiones Gasatacama
Holding Limitada
Type of company
Limited partnership
Tax No.
76,014,570-K
Address
Isidora Goyenechea 3365, piso 8,
Santiago, Chile
Business
Investments.
212,268,290
Board of directors
Alternate directors
Pedro Pablo Errázuriz Domínguez
Principal executive
Holding of Enersis
(direct & indirect)
29.99% - Unchanged.
INVERSORA
CODENSA LTDA. U
Name
Inversora Codensa Ltda. U
Type of company
Limited unipersonal entity
Address
Carrera 13 A 93-66, Bogotá,
Colombia
Telephone
(571) 601 6060
Capital (Colombian $)
5,000,000
Objects
Inve s t ment in re sid ential energ y
public utility services, especially the
acquisition of shares in any company
in that business or that in turn invests
in that business.
Board of directors
None
Management committee
Abel Alves Rochinha
Silvia Cunha Saraiva Pereira
Olga Jovanna Carranza Salazar
(direct & indirect)
59.51% - Unchanged.
KONECTA CHILE
(direct & indirect)
26.20%
LUZ ANDES
Name
Luz Andes Limitada
Type of company
Limited partnership
Tax No.
96,800,460-3
Name
Konecta Chile S.A.
Address
Santiago, Chile
Type of company
Telephone
(56 2) 634 6310
Tax No.
76,583,350-7
Paid capital (Ch$)
1,224,348
INVESTLUZ
Address
Miraflores 383, piso 26,
Santiago, Chile
Name
Investluz S.A.
Telephone
(56 2) 447 8687
Objects
Distribution and sale of electricity
and sale of electrical appliances for
the home, spor t s, rela xation and
computers.
Type of company
Foreign corporation
300
Address
Avda. Barão de Studart 2917, Bairro
Dionísio Torres For taleza, Ceará,
Brazil
Objects
Co n t a c t c e n t e r, o u t s o u r c i n g ,
organization of events, IT services,
collections, commercialization movable
assets, investments.
Business
Investments.
Legal representative
Cristian Herrera Fernández
Holding of Enersis
(direct & indirect)
21.73% - Unchanged
Telephone
(5585) 3216 1350
543,062,718
Objects
Par ticipate in the share capital of
Co m p a n hia En e r g e t ic a d o Ce a r á
and other companies in Brazil and
elsewhere, as partner or shareholder.
Business
Investments.
Business
Call center.
Board of directors
José Ignacio González Alemán
Miguel Fernández Robledo
Rafael Miguel Barroso Aceña
Leonardo Covalschi Buono
Juan Seco Sousa
Principal executive
Patricio Martínez Sola
Business
Distribution of electricity.
Principal executive
Claudio Inzunza Díaz
Holding of Enersis
(direct & indirect)
99.09% - Unchanged.
PANGUE
Name
Empresa Eléctrica Pangue S.A.
Type of company
Tax No.
96,589,170-6
Address
107
108
enersis08
ANNUAL REPORT
Telephone
(562) 630 9000
200,319,020
1,211
Objects
The production, transport, distribution
and supply of elec tricit y from the
Pangue plant in the valley of the Biobío
river.
Board of directors
Luis Cerda Ahumada
Pedro De La Sotta Sánchez
Business
Board of directors
Alan Fischer Hill
Pedro Gatica Kerr
Enrique Lozán Jiménez
Osvaldo Muñoz Díaz
91,041,497
Principal executive
Lucio Castro Márquez
Board of directors
Alan Fischer Hill
(direct & indirect)
55.57% - Unchanged.
Principal executive
Lionel Roa Burgos
(direct & indirect)
56.97% - Unchanged.
PEHUENCHE
Name
Empresa Eléctrica Pehuenche S.A.
Type of company
Tax No.
96,504,980-0
Address
Telephone
(562) 630 9000
Objects
The generation, transport, distribution
and supply of electricity for which it
may acquire and use the respective
concessions and grants.
Business
PROGAS
Name
Progas S.A.
Principal executive
Alejandro Sáez Carreño
(direct & indirect)
29.99% - Unchanged.
SACME
Name
Sacme S.A.
Type of company
Type of company
Address
Avda. España 3251, Ciudad Autónoma
de Buenos Aires, Argentina
Tax No.
77,625,850-4
Telephone
(5411) 4361 5107
Address
Isidora Goyenechea 3356, 8 piso,
Santiago, Chile
Subscribed & paid capital
(Argentine $)
12,000
Objects
Develop the following businesses in the
1st, 2nd and 3rd Regions of Chile: a)
the acquisition, production, storage,
transport, distribution, transformation
and commercialization of natural gas;
b) the acquisition, production, storage,
transport, distribution, transformation
and commercialization of other oil
derivatives and fuels in general; c) the
provision of services, manufacture,
commercialization of equipment and
materials, and carr ying out works
related to the above objects or those
necessar y for their execution and
development; and d) any other activity
necessary or conducing to compliance
with the above objects.
Objects
Co n d u c t , s u p e r v i s e a n d c o n t r o l
the operation of the electricit y
generation, transmission and subtransmission system of the Federal
Capital and Greater Buenos Aires,
and the interconnections with the
Argentine Interconnec tion System
( SADI ) . Represent the companies
Distribuidora Edenor S.A. and Edesur
S.A. in the operative management
before the Compañía Administradora
d el M erc ad o Mayoris t a Elé c t rico
(CAMMESA) (the wholesale market
administrator). In general, take all kinds
of action for satisfactorily carrying out
its management, as being constituted
for this purpose by the concessionholding companies of the electricity
distribution and commercialization
services in the Federal Capital and
Greater Buenos Aires, all in accordance
with the international public tender for
the sale of Class A shares in Edenor
S.A. and Edesur S.A. and applicable
regulations.
Business
Conduction, supervision and control of
the operation of part of the Argentine
electricity system.
Board of directors
Ricardo Héctor Sericano
Daniel Héctor Colombo
Leandro Ostuni
Eduardo Maggi
Alternate directors
Abel Cresta
Leonardo Félix Druker
Pedro Rosenfeld
Rubén Besada
Representatives
Héctor Ruiz Moreno
Clemente Alonso Hidalgo
Jaime Javier Barba
Juan Antonio Garade
Darío Aníbal Ricciardi
Daniel Peraudo
Principal executive
Osvaldo Rolando
(direct & indirect)
32.69% - Unchanged.
SAN ISIDRO
Name
Compañía Eléctrica San Isidro S.A.
Type of company
Tax No.
96,783,220-0
Address
Telephone
(56 2) 630 9000
Objects
The generation, transport, distribution
and supply of electricity.
Business
Electricity generation
39,005,904
Board of directors
Alan Fischer Hill
Pedro Gatica Kerr
Ricardo Santibáñez Zamorano
Alternate directors
Rodrigo Naranjo Martorell
Carlo Carvallo Artiga
Osvaldo Muñoz Díaz
Claudio Betti Pruzo
Enrique Lozán Jiménez
Principal executive
(direct & indirect)
59.98% - Unchanged.
SISTEMAS SEC
Name
Sistema SEC S.A.
Type of company
Tax No.
99,584,600-4
Address
Miraflores 383, piso 10, Of. 1004,
Santiago, Chile
ANNUAL REPORT
Objects
Develop the engineering, supply,
a s s e m b l y, t e s t i n g , s t a r t- u p a n d
maintenance of the signaling,
electrification and communications
systems for the sec tors AlamedaChillán, Hualqui-Talc ahuano and
Concepción-Lomas Coloradas, which
implies the development of all the
ac tivities and provision of all the
ser vices subjec t to the signaling,
contract in the public tender that was
adjudicated by Empresa de Ferrocarriles
del Estado, plus the activities and
services permitted by that contract.
Business
D evelo p and maint ain signaling,
systems.
2,266,603
Board of directors
Ángel Aguilar Bueno
Jaime Godoy Cifuentes
Francisco Fernández Ávila de Inza
Jaime Pino Cox
Sergio Zúñiga Rojo
(direct & indirect)
49% - Unchanged.
Telephone
(54 11) 4307 3040
4,076,896
Objects
For its own or third party’s account,
habitually purchase and sell electricity
in the wholesale market produced by
other parties and to be consumed by
others. It may also hold participations
in companies dedicated to electricity
generation. For its objects, it is legally
fully able to acquire rights, contract
o bligatio ns and p er fo r m all ac t s
that are not prohibited by law of its
bylaws.
Board of directors
Roberto José Fagan
Alternate director
Juan Carlos Blanco
(direct & indirect)
59.98%
SYNAPSIS
Name
Synapsis Soluciones y Ser vicios IT
Limitada
Type of company
Limited partnership
SOUTHERM CONE
POWER ARGENTINA
Tax No.
96,529,420-1
Name
Southern Cone Power Argentina S.A.
Address
Miraflores 383, piso 27, Santiago
Type of company
Corporation
Telephone
(562) 397 6600
Address
Avda. España 3301, Buenos Aires,
Argentina
3,943,580
Objects
Supply and sell services and equipment
related to computation and data
processing for public utility and other
Chilean and foreign companies. Sell and
supply in Chile and abroad services,
equipment and training related to
computation and data processing.
Invest in companies whose objects
are similar, related or linked to energy
or computers in all their forms or the
supply of public utilities or whose
principal input is electricity.
Business
IT services.
Representatives
Eduardo López Miller
Raúl Mella Varas
Raúl Mella Varas
Jorge Orozco Ospina
Antonio Bravo Narváez
Fernando Mayorano
Aldo Monje Roma
Raúl Mella Varas
Rocio Niño Guerra
Aldo Cortes Díaz
Juan Miguel
Comercial relations
Trading current account, provision
of financial management ser vices,
data center and suppor t ser vices.
Maintenance of systems, micro IT and
electronic mail. Telecommunications
and tax consultanc y. Provision of
services.
Holding of Enersis
(direct & indirect)
100% - Unchanged
0.46%
SYNAPSIS ARGENTINA
Name
Synapsis Argentina S.R.L.
Address
Avda. das Américas 3434, Bloco 2, Sala
403, Barra da Tijuca, Río Janeiro, Brazil
- Cep: 22640-102
Type of company
Limited partnership
Telephone
(5521) 3431 3850
Address
Azopardo 1335, e / Juan de Garay y
Cochabamba, Cod. Postal 1064, Capital
Federal, Buenos Aires, Argentina
716
Telephone
(5411) 4021 8300
279,662
Objects
Principally the provision of services
related to computerization, dat a
processing and other IT services in
telecommunications and control, plus
training in the activities related to the
services provided.
Business
IT services.
Fernando Mayorano
Mariano F. Grondona
Holding of Enersis
(direct & indirect)
100% - Unchanged
0.01%
SYNAPSIS BRASIL
Name
Synapsis Brasil Limitada
Type of company
Limited partnership
Objects
Provision of consultanc y ser vices
and technical assistance related to
the IT sector and data processing for
Brazilian and foreign companies; the
development of computer programs
and systems; the sale of computer
an d dat a p ro ce s sin g e quip m ent ;
the manufac ture, purchase, sale,
import, export, representation,
consignment and distribution of all
types of assets, mobile and immobile,
connected to objects stated above
and participations in other civil or
commercial, national or foreign,
companies that operate in the sectors
of IT, electricity or the management
and/or operation of public utilities in
electricity, telecommunications, water
for domestic or industrial use and
sewage, as shareholder or partner;
and participations in joint ventures,
consortia and partnerships.
Business
IT services.
Board of directors
Chairman
Carlos Alberto Acero
Carlos Alberto Acero
Jacqueline Gómez Da Silva
Marcia Caporazzo Almeida
José Roberto Galdino
Alexandre Maiotto
Marcelo Picchi
Holding of Enersis
(direct & indirect)
100% - Unchanged
109
110
enersis08
ANNUAL REPORT
SYNAPSIS COLOMBIA
Name
Synapsis Colombia Limitada
Type of company
Limited partnership
Address
Carrera 14 85- 68, piso 5, Edificio
Torres Bogotá, D.C.
Telephone
(571) 607 6000
82,065
Objects
Supply and sell services and equipment
related to computerization and data
processing for public utility and other
national and foreign companies.
Business
IT services.
Representatives
Edgar Enrique Martínez Niño
Robin Barquin Pardo
Ana Patricia Delgado Meza
Robin Barquín Pardo
Edgar Martínez Niño
Sonia Rodríguez García
Eduardo Ruiz Alonso
Patricia Delgado Meza
Norberto Duarte
Holding of Enersis
(direct & indirect)
100% - Unchanged.
0.00%
Type of company
Limited partnership
92,160
Address
Jr. Teniente César López Rojas 201, piso
10, Maranga, San Miguel, Lima, Peru
Objects
The production of electricity
and it s blo ck commercialization,
particularly the management of the
equipment, construction, operation
and maintenance of a thermal plant
in accordance with the “Definitive
agreement for the management and
operation of the projects for the readaptation of the MEM in the terms of
Resolution SE 1427/2004”, approved
by Resolution SE 1193/2005. For this,
it may carry out those complementary
and subsidiary activities linked to the
objects, having full legal powers to
acquired rights and contract obligations
and perform all acts not prohibited by
law or its bylaws.
Telephone
(511) 561 0386
111,379
Objects
Provide services related to
computerization, data processing
and other IT services and control, and
training in the activities related to the
services provided.
Business
IT services.
Claudio Escudero Alzamora
Jessenia Quevedo Fudino
Eduardo Bedoya Arromatari
Mario Nieto Béjar
Pedro Luna Delgado
Carlos Castillo Prada
José Carlos Silva Torres
Holding of Enersis
(direct & indirect)
100% - Unchanged.
TERMOELÉCTRICA JOSÉ
DE SAN MARTÍN
Name
Termoeléctrica José de San
Martín S.A.
Type of company
Corporation
SYNAPSIS PERÚ
Address
Hipólito Bouchard 547, piso 27, Buenos
Aires, Argentina
Name
Synapsis del Perú S.R.L.
Telephone
(511) 561 0386
Business
Board of directors
Bernardo Velar de Irigoyen
Adrián Salvatore
Milton Gustavo Tomás Pérez
Jorge Aníbal Rauber
Fermín Oscar Demonte
Horacio Jorge Turri
Guillermo Luis Fiad
Alternate directors
José María Vásquez
Roberto José Fagan
Omar Ramiro Algacibiur
Sergio Raúl Sánchez
Benjamín Roberto Guzmán
Juan Carlos Blanco
Carlos Principi
Patricio Testotelli
Brian Henderson
Jose María Vázquez
Alberto Garmendia Rodriguez
Armando Federico Duvo
Claudio Majul
Marcelo Walter Holmgren
(direct & indirect)
8.32%- Unchanged.
TERMOELÉCTRICA
MANUEL BELGRANO
Name
Termoeléctrica Manuel
Belgrano S.A.
Type of company
Corporation
Address
Suipacha 268, piso 12, Buenos Aires,
Argentina
Telephone
(511) 561 0386
92,160
Objects
The production of electricity
and it s blo ck commercialization,
particularly the management of the
equipment, construction, operation
and maintenance of a thermal plant
in accordance with the “Definitive
agreement for the management and
operation of the projects for the readaptation of the MEM in the terms of
Resolution SE 1427/2004”, approved
by Resolution SE 1193/2005. For this,
it may carry out those complementary
and subsidiary activities linked to the
objects, having full legal powers to
acquired rights and contract obligations
and perform all acts not prohibited by
law or its bylaws.
Business
Board of directors
Horacio Jorge Turri
Milton Gustavo Tomás Pérez
Jorge Aníbal Rauber
Guillermo Luis Fiad
Fermín Demonte
Bernardo Velar de Irigoyen
José María Vásquez
Alternate directors
Roberto José Fagan
Sergio Raúl Sánchez
Benjamín Roberto Guzmán
Juan Carlos Blanco
Carlos Principi
Patricio Testorelli
Omar Ramiro Algacibiur
Brian Henderson
Gustavo Manifesto
Óscar Zapiola
Daniel Garrido
(direct & indirect)
8.32% - Unchanged.
TESA
Name
Transportadora de Energía S.A.
Type of company
Corporation
Address
Bartolomé Mitre 797, piso 13, Of. 79,
Telephone
(5411) 4394 1161
7,589,289
Objects
The provision of electricity transport
services in high tension in relation
to national and international
ele c tricit y s y s tems, according to
current legislation, for which it may
take part in national or international
te n d e r s , b e c o m e a p u b lic- u t ili t y
concession-holder in high-tension
elec tricit y transmission nationally
o r i n t e r n a t i o n a l l y, a n d p e r f o r m
ANNUAL REPORT
all ac tivities ne cess ar y for thes e
purposes.
Business
Board of directors
Guilherme Lencastre
Arturo Miguel Pappalardo
Alternate directors
Juan Carlos Blanco
Roberto José Fagan
Alfonso Bahamondes Morales
Enrique Sánchez Novoa
Ricardo Sáez Sánchez
Carlos Ferruz Bunster
Notes:
1. There are no acts or contracts entered
into by Enersis S.A. with subsidiaries or
affiliates that significantly influence the
operations of Enersis S.A.
Holding of Enersis
(direct & indirect)
29.99% - Unchanged.
2. Enersis has no investment in the
subsidiaries and affiliates which do
not include the heading Proportion of
Enersis’s assets.
TÚNEL EL MELÓN
Name
Sociedad Concesionaria
Túnel El Melón S.A.
(direct & indirect)
53.57% - Unchanged.
Type of company
TRANSQUILLOTA
Tax No.
96,671,360-7
Name
Transmisora Eléctrica de
Quillota Ltda.
Type of company
Limited partnership
Tax No.
77,017,930-0
Address
Telephone
(562) 630 9000
46,709,460
Telephone
(562) 630 9000
Objects
Execution, construction and
exploitation of the public works called
El Melón tunnel and the provision of
the complementary services authorized
by the Ministry of Public Works.
4,404,446
Business
Infrastructure.
Objects
The transport, distribution and supply
of electricity for its own or third party’s
account.
Board of directors
Jorge Alé Yarad
Business
Electricity transmission.
Principal executive
Maximiliano Ruiz Ortiz
Representatives
Gabriel Carvajal Menególlez
Ricardo Santibáñez Zamorano
Juan Eduardo Vásquez Moya
(direct & indirect)
59.98% - Unchanged.
Address
3. Enersis has no commercial relations
with the subsidiaries and affiliates
which do not include the heading
Commercial relations.
111
112
enersis08
ANNUAL REPORT
DECLARATION OF RESPONSIBILITY
ANNUAL REPORT
DECLARATION OF RESPONSIBILITY
The directors of Enersis and the chief Executive Officern signatories to this declaration swear to be responsible for the truth of all information
contained in this annual report, in compliance with general rule N°30 of the Superintendency of Securities and Insurances.
CHAIRMAN
VICE-CHAIRMAN
DIRECTOR
DIRECTOR
Tax N°: 5.710.967-K
Tax N°: 48.070.966-7
Tax N°: 48.077.257-K
Tax N°: 4.132.185-7
DIRECTOR
DIRECTOR
DIRECTOR
GERENTE GENERAL
Patricio Claro Grez
Tax N°: 5.715.860-3
Tax N°: 5.206.994-7
Tax N°: 4.108.103-1
Tax N°: 22.298.662-1
113
114
enersis08
ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
ANNUAL REPORT
[ Contents ]
INDEPENDENT ACCOUNTANT’S REPORT 116
CONSOLIDATED BALANCE SHEETS 117
CONSOLIDATED STATEMENTS OF OPERATIONS 118
CONSOLIDATED STATEMENTS OF CASH FLOWS
119
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
120
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
121
MANAGEMENT’S ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS 208
CONSOLIDATED MATERIAL INFORMATION ENERSIS S.A.
221
115
116
enersis08
ANNUAL REPORT
ANNUAL REPORT
ENERSIS S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
(Restated for general price-level changes and expressed in thousands of constant
Chilean pesos as of December 31, 2008, and thousands of US dollars)
2007
ThCh$
ASSETS
As of December 31,
2008
ThCh$
2008
ThUS$
CURRENT ASSETS
Cash .................................................................................................
Time deposits...................................................................................
Marketable securities .......................................................................
Accounts receivable, net ..................................................................
Notes receivable, net........................................................................
Other accounts receivable, net .........................................................
Amounts due from related companies..............................................
Inventories .......................................................................................
Taxes recoverable ............................................................................
Prepaid expenses..............................................................................
Deferred taxes ..................................................................................
Other current assets..........................................................................
89,275,796
440,591,912
12,847,437
1,075,260,601
12,892,797
108,649,553
165,946,198
114,823,653
157,591,461
54,838,422
74,497,556
154,673,276
133,550,264
624,749,431
105,047,106
1,138,162,639
7,749,050
95,067,667
30,882,447
104,197,536
134,057,400
58,744,892
55,606,106
506,737,067
209,836
981,616
165,052
1,788,299
12,175
149,372
48,523
163,717
210,633
92,300
87,369
796,194
Total current assets ..........................................................................
2,461,888,662
2,994,551,605
4,705,086
PROPERTY, PLANT AND EQUIPMENT
Land .................................................................................................
Buildings and infrastructure.............................................................
Machinery and equipment................................................................
Other plant and equipment...............................................................
Technical appraisal ..........................................................................
Accumulated depreciation ...............................................................
150,430,556
12,374,354,314
2,161,441,303
580,886,985
36,692,443
(6,583,805,680)
169,158,999
14,160,783,677
2,692,490,347
853,202,108
36,562,001
(7,831,986,630)
265,785
22,249,640
4,230,482
1,340,564
57,447
(12,305,737)
Total property, plant and equipment, net .........................................
8,719,999,921
10,080,210,502
15,838,181
OTHER ASSETS
Investments in related companies ....................................................
Investments in other companies.......................................................
Goodwill, net ...................................................................................
Negative goodwill, net.....................................................................
Long-term receivables .....................................................................
Amounts due from related companies..............................................
Intangibles........................................................................................
Accumulated amortization ...............................................................
Other assets......................................................................................
64,464,056
25,021,876
698,243,292
(40,722,414)
212,940,711
682,310
103,810,481
(65,244,146)
274,643,129
118,707,021
29,679,635
635,693,667
(41,530,494)
201,124,587
112,822,268
132,028,655
(87,690,142)
224,030,573
Total other assets .............................................................................
1,273,839,295
1,324,865,770
2,081,649
TOTAL ASSETS.............................................................................
12,455,727,878
14,399,627,877
22, 624,916
The accompanying notes are an integral part of these consolidated financial statements.
186,514
46,633
998,812
(65,253)
316,010
177,268
207,445
(137,780)
352,000
2007
ThCh$
LIABILITIES AND SHAREHOLDERS´EQUITY
2008
ThUS$
CURRENT LIABILITIES:
Short-term debt due to banks and financial institutions...................
Current portion of long-term debt due to banks and financial
Institutions ...................................................................................
Current portion of bonds payable.....................................................
Current portion of long-term notes payable .....................................
Dividends payable............................................................................
Accounts payable.............................................................................
Short-term notes payable .................................................................
Miscellaneous payables ...................................................................
Amounts payable to related companies............................................
Accrued expenses ............................................................................
Withholdings....................................................................................
Income taxes payable.......................................................................
Deferred income ..............................................................................
Other current liabilities ....................................................................
184,797,723
279,225,801
438,724
140,819,523
398,611,785
26,336,041
35,812,653
560,569,116
17,382,321
115,543,608
34,685,869
81,748,068
115,470,118
19,975,609
8,526,356
143,985,590
281,710,562
611,261,962
35,570,848
5,832,062
625,017,276
16,448,180
144,861,747
43,097,251
100,217,026
131,803,915
90,992,692
10,274,431
147,470,960
442,628
960,424
55,889
9,163
982,037
25,844
227,609
67,715
157,463
207,092
142,969
16,143
231,709
Total current liabilities.....................................................................
1,884,264,380
2,523,784,713
3,965,409
LONG-TERM LIABILITIES:
Due to banks and financial institutions ............................................
Bonds payable..................................................................................
Long-term notes payable..................................................................
Miscellaneous payables ...................................................................
Amounts payable to related companies............................................
Accrued expenses ............................................................................
Deferred taxes ..................................................................................
Other long-term liabilities................................................................
1,115,923,797
2,338,000,343
133,911,774
156,760,069
8,888,191
368,396,242
24,438,149
277,765,330
1,158,698,622
2,391,113,689
132,784,275
153,874,538
8,977,789
361,453,635
125,201,091
169,380,922
1,820,565
3,756,954
208,633
241,770
14,106
567,921
196,718
266,134
Total long-term liabilities ................................................................
4,424,083,895
4,501,484,561
7,072,801
MINORITY INTEREST..................................................................
2,985,784,314
3,677,145,791
5,777,588
SHAREHOLDERS´ EQUITY:
Paid-in capital, no par value.............................................................
Additional paid-in capital ................................................................
Other reserves ..................................................................................
Retained earnings.............................................................................
Net income for the year....................................................................
Interim dividends .............................................................................
2,824,882,834
201,314,070
(474,250,155)
423,601,980
205,141,910
(19,095,350)
2,824,882,834
201,314,070
(339,568,470)
490,313,366
570,883,101
(50,612,089)
4,438,499
316,308
(533,535)
770,388
896,980
(79,522)
Total shareholders´ equity................................................................
3,161,595,289
3,697,212,812
5,809,118
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY..........
12,455,727,878
14,399,627,877
22,624,916
The accompanying notes are an integral part of these consolidates financial statements.
F-20
As of December 31,
2008
ThCh$
117
F-21
118
enersis08
ANNUAL REPORT
CONSOLIDATED STATEMENTS OF OPERATIONS
2006
ThCh$
For the years ended December 31,
2007
2008
ThCh$
ThCh$
2008
ThUS$
OPERATING INCOME:
SALES .....................................................................
COST OF SALES....................................................
4,526,458,133
(3,030,346,242)
4,915,620,866
(3,255,835,469)
6,650,287,115
(4,305,903,952)
10,449,033
(6,765,502)
GROSS PROFIT......................................................
1,496,111,891
1,659,785,397
2,344,383,163
3,683,531
(365,585,705)
(574,414)
1,978,797,458
3,109,117
ADMINISTRATIVE AND SELLING EXPENSES
OPERATING INCOME ..........................................
(263,022,870)
1,233,089,021
NON-OPERATING INCOME AND EXPENSE:
Interest income.........................................................
Equity in income of related companies....................
Other non-operating income ....................................
Equity in loss of related companies .........................
Amortization of goodwill.........................................
Interest expense........................................................
Other non-operating expenses..................................
Price-level restatement, net......................................
Exchange difference, net..........................................
150,939,621
6,040,084
123,790,418
(146,610)
(65,389,307)
(456,968,534)
(244,766,526)
1,423,153
6,230,982
NON-OPERATING EXPENSE, NET.....................
(478,846,719)
INCOME BEFORE INCOME TAXES, MINORITY
INTEREST AND AMORTIZATION OF
NEGATIVE GOODWILL...................................
(291,028,443)
1,368,756,954
125,323,230
2,975,493
217,067,647
(62,610,280)
(65,137,633)
(443,534,445)
(379,751,866)
(11,765,090)
7,390,475
176,356,849
3,600,288
430,956,724
(5,971,152)
(65,495,568)
(495,695,627)
(302,056,294)
(24,102,668)
16,279,237
277,095
5,657
677,127
(9,382)
(102,908)
(778,845)
(474,595)
(37,870)
25,576
(610, 042,469)
(266,128,211)
(418,145)
754,242,302
758,714,485
1,712,669,247
INCOME TAXES....................................................
(111,357,579)
(275,677,558)
INCOME (LOSS) BEFORE MINORITY
INTEREST AND AMORTIZATION OF
642,884,723
483,036,927
1,261,694,712
1,982,394
MINORITY INTEREST..........................................
(315,537,708)
(282,710,421)
(697,031,109)
(1,095,186)
INCOME (LOSS) BEFORE AMORTIZATION OF
327,347,015
200,326,506
564,663,603
887,208
AMORTIZATION OF NEGATIVE GOODWILL .
7,108,225
4,815,404
6,219,498
9,772
NET INCOME FOR THE YEAR............................
334,455,240
205,141,910
570,883,101
896,980
(450,974,535)
2,690,972
(708,578)
ANNUAL REPORT
CONSOLIDATED STATEMENTS OF CASH FLOWS
2006
ThCh$
2007
2008
ThCh$
ThCh$
Net income for the year ..................................................................................................................
334,455,240
GAIN FROM SALES OF ASSETS:
Gain on sale of property, plant and equipment...............................................................................
Gain on sale of investments............................................................................................................
Gain on sale of other assets ............................................................................................................
(21,722,482)
—
(316,863)
(612,814)
(3,351,925)
(619,636)
(4,832,649)
—
(606,067)
(7,593)
—
(952)
Charges (credits) to income which do not represent cash flows:
Depreciation....................................................................................................................................
Amortization of intangibles ............................................................................................................
Write-offs and accrued expenses....................................................................................................
Equity in income of related companies ..........................................................................................
Equity in loss of related companies................................................................................................
Amortization of goodwill ...............................................................................................................
Amortization of negative goodwill.................................................................................................
Price-level restatement, net.............................................................................................................
Exchange difference, net ................................................................................................................
Other credits to income which do not represent cash flows...........................................................
Other charges to income which do not represent cash flows .........................................................
484,929,952
9,192,229
30,484,137
(6,040,084)
146,610
65,389,307
(7,108,225)
(1,423,153)
(6,230,982)
(17,767,519)
80,479,966
453,778,547
9,511,163
57,098,278
(2,975,493)
62,610,280
65,137,633
(4,815,404)
11,765,090
(7,390,475)
(58,512,517)
222,166,759
553,586,380
12,540,978
48,862,444
(3,600,288)
5,971,152
65,495,568
(6,219,498)
24,102,668
(16,279,237)
(337,564,456)
108,237,899
869,803
19,705
76,773
(5,657)
9,382
102,908
(9,772)
37,870
(25,578)
(530,386)
170,065
Changes in assets which affect operating cash flows:
Decrease (increase) in trade receivables.........................................................................................
Decrease (increase) in inventory ....................................................................................................
Decrease (increase) in other assets .................................................................................................
(211,218,280)
5,457,942
(113,651,111)
(235,279,055)
(33,307,433)
(72,891,642)
(18,622,255)
7,535,054
16,720,531
(29,260)
11,839
26,272
Changes in liabilities which affect operating cash flows:
Increase (decrease) in accounts payable associated with operating results....................................
Increase (decrease) in interest payable ...........................................................................................
Increase (decrease) in income tax payable .....................................................................................
Increase (decrease) in other accounts payable associated with operating results ..........................
Net (increase) in value added tax and other similar taxes payable ................................................
Income attributable to minority interest .........................................................................................
170,914,612
32,660,987
(35,805,478)
(43,194,035)
(56,509,755)
315,537,708
254,498,869
32,767,978
(105,383,445)
(17,123,301)
(75,544,827)
282,710,421
(9,966,658)
(49,257,603)
171,364,293
44,260,688
42,484,839
697,031,109
(15,660)
(77,394)
269,250
69,543
66,753
1,095,186
Net cash flows provided by operating activities.............................................................................
1,008,660,723
CASH FLOWS FROM FINANCING ACTIVITIES:
Share issuance.................................................................................................................................
Proceeds from the issuance of debt ................................................................................................
Proceeds from bond issuances........................................................................................................
Other receipts from financing.........................................................................................................
Distribution of capital in subsidiary ...............................................................................................
Dividends paid ................................................................................................................................
Payment of debt ..............................................................................................................................
Payment of bonds ...........................................................................................................................
Payment of loans obtained from related companies.......................................................................
Payment of bond issuance costs .....................................................................................................
Other disbursements for financing .................................................................................................
—
1,490,295,843
194,905,633
—
(100,026,329)
(208,897,947)
(1,156,833,515)
(548,364,306)
(9,447,806)
(584,862)
(8,518,857)
Net cash used in financing activities ..............................................................................................
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property, plant and equipment ..................................................................
Sales of investment in related companies.......................................................................................
Payments received from notes receivable from related companies ...............................................
Other receipts from investments.....................................................................................................
Liquidation of subsidiary................................................................................................................
Additions to property, plant and equipment ...................................................................................
Long-term investments in related companies.................................................................................
Documented loans to related companies ........................................................................................
Other loans to related companies ...................................................................................................
Other investment disbursements.....................................................................................................
205,141,910
896,980
1,922,127,993
3,020,077
3,071,186
946,952,913
395,431,922
—
(15,616,246)
(602,343,993)
(776,642,547)
(141,130,787)
(2,586,069)
—
(1,503,688)
—
1,224,190,888
338,110,915
2,240,142
—
(524,771,104)
(1,024,994,172)
(342,535,816)
(3,027,339)
—
(15,566,113)
—
1,923,467
531,245
3,520
—
(824,528)
(1,610,487)
(538,198)
(4,757)
—
(24,458)
(347,472,146)
(194,367,309)
(346,352,599)
(544,196)
52,105,704
57,770
3,264,007
2,236,704
(4,819,794)
(605,574,609)
(26,374,671)
—
—
(14,671,375)
4,089,831
9,118,784
—
48,028,164
—
(646,926,245)
(41,580,361)
(4,836,766)
(42,177,525)
(78,800,066)
9,557,491
7,730,911
62,399,934
32,763,944
—
(826,764,955)
(19,864,710)
—
(29,257,957)
(16,913,258)
15,017
12,147
98,044
51,479
—
(1,299,026)
(31,212)
—
(45,971)
(26,574)
Net cash used in investing activities...............................................................................................
(593,776,264)
(753,084,184)
(780,348,600)
(1,226,096)
POSITIVE (NEGATIVE) NET CASH FLOW FOR THE PERIOD.............................................
67,412,313
91,927,468
795,426,794
1,249,785
EFFECT OF PRICE-LEVEL RESTATEMENT ON CASH AND CASH EQUIVALENTS.......
17,051,071
21,180,785
(121,532,317)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................................
84,463,384
113,108,253
673,894,477
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR...................................
430,260,166
514,723,550
627,831,803
986,459
CASH AND CASH EQUIVALENTS AT END OF THE YEAR.................................................
514,723,550
627,831,803
1,301,726,280
2,045,292
F-23
1,039,378,961
570,883,101
2008
ThUS$
(190,952)
1,058,833
119
120
enersis08
ANNUAL REPORT
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in thousands of historical Chilean pesos, except as stated)
Paid-in
capital
ThCh$
Additional
paid-in
capital
ThCh$
Other
reserves
ThCh$
Retained
earnings
ThCh$
As of January 1, 2006 ........................................................
Transfer of prior year income to retained earnings ...........
Investment equity variations..............................................
Accumulated deficit of subsidiaries in development
stage.............................................................................
Final dividend N° 73 .........................................................
Cumulative translation adjustment ....................................
Reserve Technical Bulletin No. 72....................................
Price-level restatement ......................................................
Interim dividend ................................................................
Net income for the year .....................................................
2,365,606,672
—
—
168,583,950
—
—
(236,727,351)
—
(10,585,093)
—
—
—
—
49,677,740
—
—
—
—
—
—
3,540,263
—
—
—
—
14,766,794
(825,381)
(4,971,274)
—
—
As of December 31, 2006 ..................................................
2,415,284,412
172,124,213
As of December 31, 2006 (1) ............................................
2,824,882,834
As of January 1, 2007 ........................................................
Final dividend N° 75 .........................................................
230,391,292
68,016,865
—
Deficit of
subsidiaries in
development stage
ThCh$
Interim
dividends
ThCh$
—
—
—
Net income
for the year
ThCh$
—
—
—
68,016,865
(68,016,865)
—
Total
ThCh$
2,595,871,428
—
(10,585,093)
—
(32,651,166)
—
—
5,522,778
—
—
(181,751)
—
—
—
—
—
—
—
—
—
—
—
(36,242,795)
—
—
—
—
—
—
—
285,960,366
(238,342,305)
271,279,769
(181,751)
(36,242,795)
285,960,366
2,869,881,909
201,314,070
(278,761,824)
317,285,020
(212,574)
(42,389,065)
334,455,240
3,356,573,701
2,415,284,412
—
—
—
—
—
178,731,046
—
—
172,124,213
—
—
—
—
—
12,737,192
—
—
(238,342,305)
—
(7,702,898)
—
(56,695,443)
(115,113,442)
(17,637,331)
—
—
271,279,769
249,535,820
—
(159,675,172)
—
—
27,842,117
—
—
(181,751)
181,751
—
—
—
—
—
—
—
(36,242,795)
36,242,795
—
—
—
—
(190,784)
(17,343,973)
—
285,960,366
(285,960,366)
—
—
—
—
—
—
188,376,410
2,869,881,909
—
(7,702,898)
(159,675,172)
(56,695,443)
(115,113,442)
201,482,240
(17,343,973)
188,376,410
As of December 31, 2007 ..................................................
2,594,015,458
184,861,405
(435,491,419)
388,982,534
—
(17,534,757)
188,376,410
2,903,209,631
As of December 31, 2007 (1) ............................................
2,824,882,834
201,314,070
(474,250,155)
423,601,980
—
(19,095,350)
205,141,910
3,161,595,289
As of January 1, 2008 ........................................................
Final dividend N° 77 .........................................................
2,594,015,458
—
—
—
—
—
230,867,376
—
—
184,861,405
—
—
—
—
—
16,452,665
—
—
(435,491,419)
—
11,489,022
—
13,374
123,179,289
(38,758,736)
—
—
388,982,534
170,841,653
—
(111,424,065)
—
—
41,913,244
—
—
—
—
—
—
—
—
—
—
—
(17,534,757)
17,534,757
—
—
—
—
(351,822)
(50,260,267)
—
188,376,410
(188,376,410)
—
—
—
—
—
—
570,883,101
2,903,209,631
—
11,489,022
(111,424,065)
13,374
123,179,289
250,122,727
(50,260,267)
570,883,101
As of December 31, 2008 ..................................................
2,824,882,834
201,314,070
(339,568,470)
490,313,366
—
(50,612,089)
570,883,101
3,697,212,812
As of December 31, 2008 (2) ............................................
4,438,499
316,308
(533,535)
770,388
—
(79,522)
896,980
5,809,117
(1) Restated in thousands of constant Chilean pesos as of December 31, 2008.
(2) Expressed in thousands of US$ as of December 31, 2008
F-24
(181,751)
(32,651,166)
14,766,794
(825,381)
53,769,507
(36,242,795)
285,960,366
ANNUAL REPORT
Notes to the Consolidated Financial Statements — (Continued)
2006 Statement of operations reclassifications
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Charges
ThCh$
Chilean pesos of December 31, 2007, except as stated)
As of and for the years ended December 31, 2006, 2007 and 2008
Note 1.
Financial Income.........................................
Description of Business
ENERSIS S.A., “Enersis” or the “Company” is registered in the Securities Register under No.0175 and is regulated by the Chilean
Superintendence of Securities and Insurance (the “SVS”). The Company issued publicly registered American Depositary Receipts
with the U.S. Securities and Exchange Commission (“SEC”) in 1993 and 1996. Enersis is a reporting company under the United
States Securities and Exchange Act of 1934.
The Company’s subsidiaries, Chilectra S.A. (formerly Elesur S.A.), Empresa Nacional de Electricidad S.A. (“Endesa Chile”),
Pehuenche S.A. and Aguas Santiago Poniente S.A., are registered in the Securities Register under No. 0931, 0114, 0293 and 0972,
respectively.
Note 2.
Summary of Significant Accounting Policies
a) General
(i) The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting
principles in Chile and the regulations established by the SVS (collectively “Chilean GAAP”), and the specific corporate
regulations of Law No.18,046, related to the formation, registration and liquidation of Chilean corporations, among others.
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.
The preparation of financial statements in conformity with Chilean GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date
of the financial statements, and the reported amounts of revenues and expenses during the reporting year. Actual results could
differ from those estimates.
In certain cases generally accepted accounting principles in Chile require that assets or liabilities be recorded or disclosed at their
fair values.
(ii) Reclassifications - For purposes of comparison, the following reclassifications were made in the 2006 and 2007 financial
statements:
Building and infrastructure .........................
Long term Accrued expenses......................
Credits
ThCh$
101,456,022
10,877,864
Technical appraisals
Short term accrued expenses
101,456,022
10,877,864
2007 Statement of operations reclassifications
Charges
ThCh$
Financial Income.........................................
Sales............................................................
Credits
ThCh$
1,444,829
188,168,816
Cost of sales
743,251
Sales
(iii) The accompanying financial statements reflect the consolidated results of operations of Enersis S.A. and its subsidiaries. All
significant intercompany transactions have been eliminated in consolidation. Investments in companies in the development stage
are accounted for using the equity method, except that income or losses are included directly in equity instead of being reflected
in the Company’s consolidated statement of operations. The Company consolidates the financial statements of companies in
which it controls over 50% of the voting shares, provided there are no substantive minority participating rights that prevent
control, as detailed as follows:
Percentage participation in voting rights as of December 31,
2006
2007
2008
Economic
Voting
Economic
Voting
Economic
Voting
Company
Synapsis Soluciones y Servicios IT Ltda.............................
Inmobiliaria Manso de Velasco Ltda. ..................................
Cía. Americana de Multiservicios Ltda. ..............................
Endesa Chile ........................................................................
Chilectra S.A. (former Elesur) (1) .......................................
Inversiones Distrilima S.A...................................................
Empresa Distribuidora Sur S.A. (Edesur) ............................
Codensa S.A. (2)..................................................................
Investluz (3) .........................................................................
Ampla Energía e Serviços S.A.............................................
Ampla Investimentos e Serviços S.A...................................
Compañía de Interconexión Energética S.A. (Cien) (4........
Central Geradora Termeléctrica Fortaleza S.A. (4) .............
Endesa Brasil S.A. (4)..........................................................
Cachoeira Dourada S.A. ......................................................
100.00
100.00
100.00
59.98
99.08
55.90
65.39
21.73
59.51
69.88
69.88
53.57
53.57
53.57
53.36
100.00
100.00
100.00
59.98
99.08
68.39
65.89
25.71
100.00
91.93
91.93
100.00
100.00
71.52
99.61
100.00
100.00
100.00
59.98
99.08
55.90
65.39
21.73
59.51
69.88
69.88
53.57
53.57
53.57
53.36
100.00
100.00
100.00
59.98
99.08
68.39
65.89
25.71
100.00
91.93
91.93
100.00
100.00
71.52
99.61
100.00
100.00
100.00
59.98
99.08
55.90
65.39
21.73
59.51
69.88
69.88
53.57
53.57
53.57
53.36
100.00
100.00
100.00
59.98
99.08
68.39
65.89
25.71
100.00
91.93
91.93
100.00
100.00
71.52
99.61
(1) In the extraordinary meeting of Elesur S.A., held on March 31, 2006, shareholders approved the name change. The merger
of Chilectra (formerly Elesur) and Chilectra S.A., approved in general meetings of their shareholders held on March 31,
2006, became effective on April 1, 2006.
(2) Codensa S.A. is consolidated because of the majority presence on the board of directors, obtained through the shareholders’
agreement of January 27, 2004, between Endesa Latinoamérica and Enersis S.A.
(3) Investluz is Parent Company of Companhia Energética do Céará S.A. Coelce.
(4) As a result of the creation of the Brazilian holding company, Endesa Brasil S.A. (“Endesa Brasil”) (see Note 11 (f) i, this
company and its subsidiaries were included in the consolidated financial statements of Enersis S.A.
189,613,645
F-26
F-25
743,251
On May 27, 2004, 99.9989% of Elesur S.A. was purchased, therefore, as from that date it is consolidated into Enersis S.A.
financial statements.
2007 Balance sheet reclassifications
Charges
ThCh$
Credits
ThCh$
121
122
enersis08
ANNUAL REPORT
(iv)
Consolidated subsidiaries of Endesa Chile are detailed as follows:
By way of comparison, the actual values of the Chilean consumer price indices as of the balance sheet dates are as follows:
The table below sets forth the percentage participation of Endesa Chile in its consolidated companies:
Company name
Enigesa S.A. (Chile) ............................................................
Ingendesa S.A. (Chile).........................................................
Pehuenche S.A. (Chile)........................................................
Endesa Argentina S.A. (Argentina) .....................................
Pangue S.A.(1) (Chile..........................................................
Hidroinvest S.A. (Argentina) (2) .........................................
Hidroeléctrica El Chocón S.A. (Argentina) (2) ...................
Endesa Costanera S.A. (Argentina) (2) (3) ..........................
Endesa Brasil Participacoes Ltda. (Brazil)(4)......................
Sociedad Concesionaria Túnel El Melón S.A.(Chile) (5)....
Compañía Eléctrica Cono Sur S.A. (Pánama) (6)................
Emgesa S.A. (Colombia) (7) (8) ..........................................
Central Eólica Canela S.A. (Chile) (9).................................
Edegel S.A. (Peru) (10)........................................................
Generandes Perú S.A. (Peru) (10) (11) ................................
Southern Cone Power Argentina S.A. (Argentina) (3) ........
Compañía Eléctrica San Isidro S.A. (Chile) ........................
Compañía Eléctrica Tarapacá S.A. (Chile) ..........................
Inversiones Endesa Norte S.A. (Chile) ................................
Ingendesa Do Brasil Limitada (Brazil) ................................
Endesa Eco S.A. (Chile) (9).................................................
2006
Total
Percentage participation in voting rights as of December 31,
2007
2008
Total
Direct
Indirect
Total
100.00
100.00
92.65
99.99
94.99
69.93
65.19
64.26
100.00
99.96
100.00
23.45
—
55.44
59.63
—
100.00
100.00
100.00
100.00
100.00
100.00
100.00
92.65
99.99
94.99
96.09
67.67
69.77
100.00
100.00
100.00
26.87
75.00
55.44
59.63
100.00
100.00
100.00
100.00
100.00
100.00
99.51
98.75
92.65
99.66
94.98
41.94
2.48
12.33
—
99.99
—
26.87
—
—
—
98.00
100.00
99.94
99.99
1.00
99.99
0.49
1.25
—
0.33
0.01
54.15
65.19
57.43
—
0.01
—
—
75.00
54.20
61.00
2.00
—
0.06
0.01
99.00
0.01
100.00
100.00
92.65
99.99
94.99
96.09
67.67
69.77
—
100.00
—
26.87
75.00
54.20
61.00
100.00
100.00
100.00
100.00
100.00
100.00
Index
December 31, 2006 .................................................................................................................
December 31, 2007 .................................................................................................................
December 31, 2008 .................................................................................................................
100.00
107.80
115.45
Change over
Previous
December 31
2.6%
7.8%
7.1%
The above-mentioned price-level restatements do not purport to represent appraisal or replacement values and are only intended to
restate all non-monetary financial statement components in terms of local currency of a single purchasing power and to include in net
income or loss for each year the gain or loss in purchasing power arising from the holding of monetary assets and liabilities exposed to
the effects of inflation.
Index-linked assets and liabilities
Assets and liabilities that are denominated in index-linked units of account are stated at the year-end values of the respective units of
account. The principal index-linked unit used in Chile is the Unidad de Fomento (“UF”), which is adjusted daily to reflect the changes
in Chile’s CPI. Certain of the Company’s investments are linked to the UF. When the Company’s indexed liabilities exceed its
indexed assets, the increase (decrease) in the index results in a net loss (gain) on indexation. Values for the UF are as follows
(historical Chilean pesos per UF):
Ch$
December 31, 2006 ......................................................................................................................
December 31, 2007 ......................................................................................................................
December 31, 2008 ......................................................................................................................
18,336.38
19,622.66
21,452.57
Comparative financial statements
(1) See Note 11 (g) (i).
(2) See Note 11 (g) (v).
(3) See Note 11 (g) (iv).
(4) See Note 11 (h) (iii).
(5) See Note 11 (g) (vi).
(6) See Notes 11 (h) (ii) and 11 (f) (ii).
(7) Endesa Chile exercises control over this company pursuant to a shareholders’ agreement dated August 30, 2007 held
between the Company and Endesa Latinoamérica S.A.
(8) See Notes 11 (f) (iii), 11 (g) (iii) and 11 (h) (i)
(9) See Note 11 (e) (iii).
(10) See Notes 11 (g) (ii)
(11) On June 1, 2008, the Scotiabank interest group, which owned 2.27% in Generandes Perú S.A., withdrew its
participation in exchangefor 1.24% of Edegel S.A. Therefore, Endesa group participation in Generandes Perú S.A.
increased from 59.63% to 61%.
F-27
For comparative purposes, the 2006 and 2007 consolidated financial statements and the amounts disclosed in the related Notes have
been restated in terms of the purchasing power of Chilean pesos as of December 31, 2008.
This updating does not change the prior years’ statements or information in any way except to update the amounts to constant Chilean
pesos of similar purchasing power.
Convenience translation to U.S. dollars
The financial statements are stated in Chilean pesos. The translations of Chilean pesos into dollars are included solely for the
convenience of the reader, using the observed exchange rate reported by the Chilean Central Bank as of December 31, 2008 of
Ch$636.45 to $1.00. The convenience translations should not be construed as representations that the Chilean peso amounts have
been, could have been, or could in the future be, converted into dollars at this or any other rate of exchange.
F-29
ANNUAL REPORT
The participation in voting rights is equal to economic participation in all subsidiaries except for those presented as follows:
d) Assets and liabilities in foreign currencies
Assets and liabilities denominated in foreign currencies are detailed in Note 32. These amounts have been stated at the observed
exchange rates reported by the Central Bank of Chile as of each December 31, as follows:
Currency
Symbol
Used
United States dollar.....................................................................
British pound sterling..................................................................
Colombian peso ..........................................................................
New Peruvian sol ........................................................................
Brazilian real...............................................................................
Japanese yen ...............................................................................
Euro.............................................................................................
Unidad de Fomento (UF) ............................................................
Argentine peso ............................................................................
US$
£
$Col
Soles
Rs
¥
€
UF
$Arg
2006
Ch$
532.39
1,041.86
0.24
166.58
249.01
4.47
702.08
18,336.38
173.87
As of December 31,
2007
Ch$
496.89
989.43
0.25
165.96
280.52
4.41
730.94
19,622.66
157.79
2008
Ch$
636.45
918.27
0.28
202.69
272.34
7.05
865.80
21,452.57
184.32
2006
%
Edegel S.A. (1)....................................
Hidroeléctrica El Chocón S.A. (2) ......
Percentage of economic
participation as of December 31,
2007
%
33.06
47.45
2008
%
33.06
65.37
33.06
65,37
(1) See Notes 11 (g) (ii)
(2) See Note 11 (g) (v).
b) Years covered
These financial statements reflect the Company’s financial position as of December 31, 2007 and 2008, and the results of its
operations, the changes in its shareholders’ equity and its cash flows for the years ended December 31, 2006, 2007 and 2008.
c) Constant currency restatement
e) Time deposits and marketable securities
Time deposits are presented at cost plus accrued interest and UF indexation adjustments, as applicable. Marketable securities include
investments in quoted shares that are valued at the lower of cost or market value. The investments are in both short-term highly liquid
fixed rate investment shares and mutual fund units valued at cost plus interest and indexation or redemption value, as appropriate
(Note 4).
f) Allowance for doubtful accounts
The estimates for the allowance for doubtful accounts have been made considering the aging and nature of the accounts receivable.
Accounts receivable are classified as current or long-term, depending on their collection terms. Current and long-term trade accounts
receivable, notes receivable and other receivables are presented net of allowances for doubtful accounts (see Note 5). The allowance
for doubtful accounts amounted to ThCh$157,729,911, ThCh$203,685,907 and ThCh$179,623,370 as of December 31, 2006, 2007
and 2008, respectively. In addition, the total sum owed by companies that have gone into bankruptcy amounting to ThCh$1,471,479 in
2006, ThCh$ 1,512,322 in 2007 and ThCh$1,478,461 in 2008 is included in the bad debt allowance estimation.
g) Inventories
Inventory of materials in transit and operation and maintenance materials on hand are valued at the lower of price-level restated cost
or net realizable value.
In the case of real estate projects under development, inventory includes the cost of land, demolition, urbanization, payments to
contractors and other direct costs.
The costs and revenues of construction in progress are accounted for under the completed contract method in accordance with
Technical Bulletin No. 39 of the Chilean Institute of Accountants and are included in current assets as their realization is expected in
the short-term.
The cumulative inflation rate in Chile as measured by the Chilean Consumer Price Index (“CPI”) for the three-year period ended
December 31, 2008 was approximately 18.4%.
Chilean GAAP requires that the financial statements be restated to reflect the full effects of gain or loss in the purchasing power of the
Chilean peso in the financial position and results of operations of reporting entities. The method described below is based on a model
that enables calculation of net inflation gains or losses caused by monetary assets and liabilities exposed to changes in the purchasing
power of local currency. The model prescribes that the historical cost of all non-monetary accounts be restated for general price-level
changes between the date of origin of each item and the year-end.
The financial statements of the Company have been price-level restated in order to reflect the effects of the changes in the purchasing
power of the Chilean currency during each year. All non-monetary assets and liabilities, equity and income statement accounts have
been restated to reflect the changes in the CPI from the date they were acquired or incurred to year-end (see also Note 24).
The price level restatement gain or loss included in net income reflects the effects of Chilean inflation on the assets and liabilities held
by the Company.
The restatements were calculated using the official consumer price index of the National Institute of Statistics and based on the “prior
month rule,” in which the inflation adjustments are based on the CPI at the close of the month preceding the close of the respective
year or transaction. This index is considered by the business community, the accounting profession and the Chilean government to be
the index that most closely complies with the technical requirement to reflect the variation in the general level of prices in Chile, and
consequently it is widely used for financial reporting purposes.
The values of the Chilean consumer price indices used to reflect the effects of the changes in the purchasing power of the Chilean peso
(“price-level restatement”)for accounting purposes are as follows:
Index
November 30, 2006..................................................................................................................
November 30, 2007..................................................................................................................
November 30, 2008..................................................................................................................
F-28
F-30
100.00
107.40
116.96
Change over
Previous
November 30
2.1 %
7.4 %
8.9 %
123
enersis08
124
ANNUAL REPORT
h) Property, plant and equipment
Property, plant and equipment are valued at net replacement cost as determined by the former Superintendence of Electric and Gas
Services (SEG) adjusted for price-level restatement in accordance with D.F.L. No.4 of 1959. The latest valuation under the D.F.L. 4
was in 1980.
Property, plant and equipment acquired after the latest valuation of net replacement cost are shown at cost, plus price-level
restatement. Interest on debt directly obtained to finance construction of power generation projects is capitalized during the term of
construction.
In 1986, an increase based upon a technical appraisal of property, plant and equipment was recorded in the manner authorized by the
SVS in Circulars No.’s 550 and 566 dated October 15 and December 16, 1985, respectively, and Communication No.4790, dated
December 11, 1985.
Under Technical Bulletin Bulletin No. 33, the Company is required to evaluate the recoverability of its property, plant and equipment
when certain indicators of impairment exist. The Company has not identified any impairment to property, plant and equipment as a
result of applying Technical Bulletin No. 33.
i)
Depreciation
Depreciation expense is generally calculated on the price-level restated balances using the straight-line method over the
estimated useful lives of the assets (see note 10). Certain property, plant and equipment are depreciated using the unit-ofproduction method when this method better reflects the depreciation expenses of these assets.
j) Leased assets
temporary differences between the book and tax bases of assets and liabilities. Deferred income taxes are calculated using tax rates
estimated to be in effect at the time of reversal of the temporary differences that gave rise to them.
r) Accrued vacation expense
In accordance with Technical Bulletin No.47 issued by the Chilean Association of Accountants, employee vacation expense is
recorded on an accrual basis.
s) Purchase with resale agreements
Purchase with resale agreements are included in “Other current assets” and are stated at cost plus interest and indexation accrued at
year-end, in conformity with the related contracts.
t) Statements of cash flows
The Consolidated Statements of Cash Flows have been prepared in accordance with the indirect method.
Investments considered as cash equivalents, as indicated in point 6.2 of Technical Bulletin No.50 issued by the Chilean Association of
Accountants, include time deposits, investments in fixed income securities classified as marketable securities, repurchase agreements
classified as other current assets, and other cash balances classified as other accounts receivable with maturities less than 90 days.
For classification purposes, cash flows from operations include collections from clients and payments to suppliers, payroll and taxes.
u) Financial derivative contracts
Leased assets, whose contracts have financial lease characteristics, are accounted for as an acquisition of property, plant and
equipment, recognizing the total obligation and the unaccrued interest. Said assets do not legally belong to the Company. For this
reason, as long as the purchase option is not exercised, it will not be able to freely dispose of them.
As of December 31, 2006, 2007 and 2008 the Company and its subsidiaries have forward contracts, currency swaps, and interest rate
swaps and collars with several financial institutions. Such contracts are mainly used by the Company to hedge against foreign
currency and interest risk exposures, which are recorded according to Technical Bulletin No.57 of the Chilean Association of
Accountants.
k) Power installations financed by third parties
v) Goodwill and negative goodwill
As established by D.F.L. 1 of the Ministry of Mines dated September 13, 1982, power facilities subsidized by third parties are treated
as reimbursable contributions as such facilities form part of the Company’s plant and equipment.
Prior to January 1, 2004, goodwill arose from the excess of the purchase price of companies acquired over their net book value;
negative goodwill arose when net book value exceeded the purchase price of companies acquired.
Contributions completed prior to D.F.L. 1 are deducted from Plant and equipment and their depreciation is charged to Power facilities
financed by third parties.
Beginning January 1, 2004, the Company adopted Technical Bulletin No.72 of the Chilean Association of Accountants, which
changes the basis for determining accounting for goodwill and negative goodwill generated in transactions after January 1, 2004,
based on an allocation of the purchase price based on the fair value of the identifiable assets acquired and identifiable liabilities
assumed. Goodwill and negative goodwill are also generated with the purchase of equity method investees. Both goodwill and
negative goodwill are normally amortized over the maximum period of twenty years considering the expected period of return of the
investments.
l)
Investments in related companies
The Company classifies an investment as an investment in a related company when it has the ability to exercise significant
influence over the operations of such company. Investments in related companies are included in “Other assets” using the
equity method. This accounting method recognizes the Company’s proportionate share in the net income or loss of each
investee on an accrual basis in income (Note 11).
Investments in foreign affiliates are recorded in accordance with Technical Bulletin No.64 of the Chilean Association of Accountants.
Under Technical Bulletin No.64 of the Chilean Association of Accountants, investments in foreign subsidiaries are price-level
restated, the effects of which are reflected in income, while the effects of the foreign exchange gains or losses between the Chilean
peso and the US dollar on the foreign investment measured in US dollars, are reflected in equity in the account “Cumulative
Translation Adjustment”.
F-31
Whenever events or changes in circumstances indicate potential impairment of recorded goodwill, a goodwill impairment test is
performed by the Company. Goodwill is tested for impairment at the level of cash generating units (“CGU”).
The testing of goodwill for impairment involves two steps:
F-33
ANNUAL REPORT
The Company evaluates the recoverability of its investments in related companies whenever events or changes in
circumstances indicate that the carrying amount of the investments may not be recoverable. Such assessment requires
determining the fair values of the equity method investments. Fair value is determined using valuation methodologies,
including discounted cash flows and the ability of the investee to sustain an earnings capacity that justifies the carrying
amount of the investment. In the case the fair value is less than the carrying value and such decline in value is considered to
be other than temporary, a write down is recorded. As indicated in Note 11, during the year ended December 31, 2007 the
Company recorded an impairment of its investment in Inversiones Gas Atacama Holding Limitada amounting to
ThCh$48,890,387 (historical Chilean pesos) as a result of an other-than-temporary impairment of the investment. The
impairment charge includes a write down of the investment to its recoverable value and an impairment of goodwill which
was recorded over the investment.
m) Intangibles, other than goodwill
Intangible assets are recorded at acquisition cost and are subsequently price-level restated. Such assets are amortized over their
estimated useful lives, not to exceed twenty years. Intangibles other than goodwill correspond mainly to easements, rights of way and
water rights.
n) Severance indemnities
The Company is obliged to pay its employees severance indemnities under collective bargaining agreements in Chile. Such indemnity
is stated at the present value of the benefit under the vested cost method, discounted at 6.5% . See Note 37 II l.
o) Revenue recognition
The Company’s revenues are primarily derived from electric power generation and distribution services and include energy supplied
and unbilled at each year-end. Revenues are valued using rates in effect when services are provided to customers. Accrued unbilled
revenues are presented in current assets as trade receivables and the corresponding cost is included in cost of sales.
The Company also recognizes revenues for amounts received from highway tolls for motorized vehicles, income related to computer
advisory services, engineering services, and sale of materials.
p) Cost of sales and Administrative and selling expenses
The cost of sales line item includes: purchased energy and power, materials, fuel, tolls and energy transportation cost, direct
production salaries, productive assets’ depreciation, amortization, and maintenance and operational costs. The purchase of power
amounted to ThCh$1,381,025,723, ThCh$1,415,814,999 and ThCh$ 1,937,510,480 for the years ended December 31, 2006, 2007 and
2008, respectively. The administrative and selling expense line item includes: general and administrative expenses, materials and
office supplies, overhead salaries, bad debt expense, non-productive assets’ amortization and depreciation.
q) Income tax and deferred income taxes
For the years ended December 31, 2006, 2007 and 2008, the Company recorded current tax expense (net) determined in accordance
with the laws and regulations in each country in which it operates of ThCh$279,379,996, ThCh$236,069,385 and ThCh$368,213,415,
respectively. Additionally, it recorded a deferred tax expense of ThCh$(168,022,416) in 2006, deferred tax expense
ThCh$39,608,173 in 2007 and ThCh$82,761,120 in 2008. The Company records deferred income taxes in accordance with Technical
Bulletin No.60 of the Chilean Association of Accountants, and with Circular No.1466 issued on January 27, 2000 by the SVS, using
the liability method, recording deferred income taxes for effects of
1. The first step is to compare each CGU’s fair value with its carrying amount, including goodwill. The CGU’s fair
value is determined using market prices, or, if not available, valuation techniques including discounted cash flow
approaches. If a CGU’s carrying amount exceeds its fair value, an indicator for goodwill impairment exists and
step two is performed.
2. The second step is to compare the implied fair value of goodwill with its carrying amount. The implied fair value
represents the excess of the CGU’s net identifiable assets over the CGU’s net assets at fair value. Any excess of
the carrying amount of goodwill over its implied fair value is recorded as an impairment loss, writing down the
carrying amount of goodwill to its implied fair value.
During the year ended December 31, 2007, the Company recorded an impairment of goodwill over its equity method investment in
Inversiones Gas Atacama Limitada amounting to ThCh$53,241,631. (See Note 11)
Goodwill related to investments accounted for under the equity method is tested for impairment together with the associated
investment as though goodwill formed part of the carrying amount of the investment. See Note 2 l).
w) Pension and post-retirement benefits
Pension and post-retirement benefits are recorded based on actuarially determined projected benefit obligations in accordance with the
respective collective bargaining contracts of employees. (See Note 37 II l.)
x) Bonds
Bonds payable are recorded at the face value of the bonds. The difference between the face value and the issuance proceeds, equal to
the premium or discount, is deferred and amortized over the term of the bonds.
y) Investments in other companies
Investments in other companies are presented at acquisition cost adjusted for price-level restatement as they do not trade in an
organized market and because the Company does not exercise significant influence.
z) Research and development costs
Costs incurred by the Company in research and development relate mainly to water-level studies, hydroelectric research, and seismicactivity surveys which are expensed as incurred. Costs incurred in performing studies related to specific construction projects are
capitalized.
aa) Cost of shares issued
Costs incurred to date associated with issuance and placing of shares are recorded according to the provisions of Circular No.1370 of
1998 of the Superintendence of Securities and Insurance. The amounts are deducted from the share premium account.
bb) Litigation and other legal action
The Company has not recognized any assets for expected recoveries, through insurance or from others, related to litigation and other
legal actions, in the periods presented. The Company records such recoveries only in the case that it is virtually certain such recoveries
will be realized. In the case that the Company does record expected recoveries, the Company’s policy is to record such amounts as an
asset in our consolidated balance sheet, unless a right of offset clearly exists.
As of December 31, 2008, and 2007, the Company has established accruals for probable losses in the aggregate amount of
ThCh$181,629,175 (ThUS$285,379) and ThCh$186,923,910 (ThUS$ 293,698), respectively.
F-32
F-34
125
126
enersis08
ANNUAL REPORT
Note 3. Changes in Accounting Principles
Note 4.Time Deposits
a) On November 14, 2006 the SVS issued Circular 1819 with instructions on treating organizational and start-up costs, which
superseded Circular 981, effective until December 31, 2006. This change resulted in the recording of effects of the losses of
investee companies in development and start-up phases in income as of January 1, 2007 and absorbtion of the accumulated deficit
in the period of development at subsidiary Endesa Chile. As a result of adoption of Circular 1819, gains or losses associated with
organizational and start-up costs previously accumulated in a special component of equity were reclassified as a transition
adjustment to beginning retained earnings as of January 1, 2007. The amount reclassified as of January 1, 2007 amounted to
ThCh$325,438, before minority interest. Pursuant to the transitional provision of Circular 1819, prior year income statement and
balance sheet were not restated.
Time deposits as of each year end are as follows:
Except as indicated above, there were no others changes in accounting principles during the years ended December 31, 2006, 2007
and 2008 that would affect the comparison with the prior year financial statements.
Tax Payer Number
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Financial Institution
Alfa mix
AFIN S.A.
Abn Amro Bank
Banco Bilbao Vizcaya
Banco Colpatria
Banco Continental
Banco Crédito
Banco Davivienda
Banco de la Nación Argentina
Banco de Galicia
Banco Frances
Banco Hipotecario S.A.
Banco Itau
Banco JP Morgan Chase
Banco Merrill Linch
Banco Nordeste
Banco Paribas Luxembourg
Banco Pactual
Banco Popular
Banco Safra
Banco Rio de la Plata
Banco Santander Central Hispano
Banco Sudameris
Banco Votorantim
Bancolombia
Bank Boston
Bank of America
Bradesco
Caixa Economica
Citibank N.Y.
Colmena Bcsc
Comafi
Corficolombiana
Encargo Fiduciario Banco
Santander
FAM Fondo Ganadero
Fiduciaria Helm Trust
Fiducolombia
Fiduoccidente
Fiduciaria Banco de Bogotá
Fondo Sumar
Fondo Surgir
HSBC - Bamerindus
Standard Bank London
Suvalor
Trento
Vicenza
Unibanco
2007
Scheduled
Maturity
ThCh$
—
9.67%
—
7.50%
1.26%
—
4.83%
9.71%
—
1.54%
1.13%
0.00%
0.96%
—
4.83%
1.06%
4.09%
0.93%
—
0.85%
1.81%
2.69%
9.65%
0.87%
8.46%
0.93%
2.85%
0.86%
0.93%
3.59%
9.80%
1.19%
7.45%
—
01.03.08
—
01.02.08
01.02.08
—
01.02.08
0114.08
—
01.02.08
01.02.08
01.02.08
01.02.08
—
01.14.08
01.02.08
01.02.08
01.31.08
—
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.31.08
01.02.08
01.02.08
01.02.08
01.02.08
—
4,408,103
—
2,158
9,895
—
1,995,714
21,920,061
—
1,970,232
1,055,684
1,872,875
66,291,165
—
4,022,152
157,884
4,111,031
1,646,067
—
1,531,354
4,160,033
19,786,529
20,163,296
27,137,141
87
119,051
3,560,526
79,788,806
1,602,383
61,653,924
19,497,484
1,840,158
842,201
1.14%
—
1.04%
1.70%
0.80%
0.59%
6.40%
0.85%
3.23%
1.52%
—
—
1.09%
2.73%
—
0.90%
0.58%
1.14%
0.84%
1.14%
3.20%
1.22%
0.86%
1.14%
0.87%
—
3.23%
1.10%
—
0.33%
0.86%
3.23%
0.92%
02-01-2009
—
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
—
—
02-01-2009
02-01-2009
—
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
—
02-01-2009
02-01-2009
—
02-01-2009
02-01-2009
02-01-2009
02-01-2009
172,439
—
1,600,206
37,259,639
487
4,054,589
810,764
134
3,687,668
1,308,541
—
—
23,187,448
7,156,625
—
157,817
8,209,292
83,404
7,075,967
57,249
14,053,032
100,205,472
33,783,416
46,210,971
16,432,194
—
2,092,648
117,865,231
—
80,909,300
127
885,574
4,635,964
6.19%
7.66%
7.85%
8.44%
8.07%
6.98%
6.98%
7.53%
0.95%
1.16%
—
—
—
0.88%
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
01.02.08
—
—
—
01.02.08
1,737,835
95
95
6,645
223
23,517
66
129
49,456,752
1,127,246
—
—
—
37,093,315
0.66%
0,77%
0.90%
—
0.88%
0.85%
—
—
8.16%
2.23%
0.77%
1.01%
1.03%
1.11%
02-01-2009
02-01-2009
02-01-2009
—
02-01-2009
02-01-2009
—
—
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
02-01-2009
318,861
109
109
—
256
10,548,552
—
—
322,476
2,768,843
1,347,216
28,337,763
25,970,734
43,238,314
Rate%
Total
440,591,912
F-36
F-35
Rate%
2008
Scheduled
Maturity
ThCh$
624,749,431
ANNUAL REPORT
Notes to the Consolidated Financial Statements – (Continued)
Note 5.Accounts, Notes and Other Receivables
(c) Changes in provision for accounts receivables are as follows:
(a) Current accounts, notes and other receivables and their related allowances for doubtful accounts as of respective December 31,
are as follows:
Account
Under 90 days
2007
2008
ThCh$
ThCh$
Accounts receivable(1)(2)........
Allowance for doubtful
accounts ..............................
1,123,831,962
Notes receivable.......................
accounts ..............................
12,462,122
Other receivable (1) (3)............
accounts ..............................
106,287,380
(102,107,531)
1,178,275,522
(109,735,159)
6,707,510
(167,474)
(1,575,586)
As of December 31,
Sub total
2008
ThCh$
91 days to 1 year
2007
2008
ThCh$
ThCh$
(153,787)
2007
ThCh$
Current
Long term
2007
2008
ThCh$
ThCh$
2008
ThCh$
141,834,134
124,610,901
1,302,886,423
1,265,666,096
1,138,162,639
—
—
(88,297,964)
(54,988,625)
(164,723,784)
(190,405,495)
—
—
—
1,002,752
1,587,069
8,294,579
13,464,874
7,749,050
—
—
(404,603)
101,330,853
13,344,492
(12,023,396)
(9,406,733)
(391,742)
(545,529)
6,555,741
(795,531)
(572,077)
107,886,594
119,631,872
(12,818,927)
(10,982,319)
Total .........................................
1,196,802,951
—
—
—
95,067,667
214,666,727
202,659,717
—
(1,726,016)
(1,535,130)
1,240,979,356
212,940,711
2006
ThCh$
156,050,496
36,156,373
(36,886,666)
2,409,708
157,729,911
88,691,645
(30,222,703)
(12,512,946)
203,685,907
38,994,530
(50,662,953)
(12,394,114)
Balance at end of period..............................................
157,729,911
203,685,907
179,623,370
(d) Amounts of unbilled energy sold are as follows:
2006
ThCh$
201,124,587
(1) Includes ThCh$23,000,530, which is the balance due as a result of rate increase pursuant to the Agreement between the Argentine
government and the subsidiary Edesur S.A. in Argentina, signed in February, 2007. This agreement generated income of
ThCh$48,049,429 (ThUS$75,496) which will be collected in equal installments over 55 months beginning February, 2007.
(2) Includes ThCh$38,601,965, corresponding to accounts due to our subsidiary Cachoeira Dourada S.A. from Compañía de
Electricidade de Goiás (CELG) for years prior to 2004. CELG (state-owned Company of the State of Goiás) has currently
recognized the pending debt and is negotiating a loan from the financial institution BNDES to pay its debts. The Board of
Directors of Enersis anticipates a favorable outcome as a result of such negotiations and expects to recover at least the amount
recorded.
(3) This includes ThCh$31,955,105 and ThCh$ 10,720,714, respectively, in 2007 and 2008 relating to other generating companies
debts payable to Endesa Chile and generating subsidiaries, as a result of the collection of tolls associated with the application,
since March 13, 2004, of Law No.19,940.
(b) Current and long-term accounts receivable per country as of each December 31, are as follows:
Chile ..............................................
Peru................................................
Argentina .......................................
Colombia .......................................
Brazil .............................................
Panama (1).....................................
Total...............................................
ThCh$
As of December 31,
2007
%
305,707,361
62,126,259
212,856,813
310,054,197
507,523,947
11,475,085
—
1,409,743,662
ThCh$
2008
%
21.69%
4.41%
15.10%
21.99%
36.00%
0.81%
365,344,835
100,383,657
249,150,903
323,768,119
403,456,429
—
25.33%
6.96%
17.28%
22.45%
27.98%
—
100.00%
1,442,103,943
100.00%
(1) Country of incorporation of the wholly-owned subsidiary Compañía Eléctrica Cono Sur S.A. (See note 11 (h) (ii))
F-37
2008
ThCh$
Balance at beginning of period....................................
Additions charged to costs and expenses ....................
Deductions...................................................................
Price-level restatement and conversion adjustment.....
Unbilled energy sold ........................................................................
Country
Year ended December 31,
2007
ThCh$
F-38
276,113,137
As of December 31,
2007
ThCh$
331,303,143
2008
ThCh$
404,072,040
127
128
enersis08
ANNUAL REPORT
Note 6.
Balances and Transactions with Related Companies
(b)
Notes and accounts payable due to related companies:
The balances of accounts receivable and payable with related companies are as follows at December 31, 2007 and 2008:
(a)
Notes and accounts receivable due from related companies:
Short-term
As of December 31,
2008
ThCh$
2007
ThCh$
Long-term
Company
2007
ThCh$
2008
ThCh$
Atacama Finance Co. (1) .............................
Com. de Energía del Mercosur S.A. ............
Empresa Eléctrica Piura S.A........................
ENDESA, S.A..............................................
Endesa Europa .............................................
Endesa Servicios ..........................................
Endesa Latinonamérica S.A.........................
Gas Atacama Generación S.A......................
Gasoducto Atacama Chile S.A.....................
Gasoducto Tal Tal Ltda. ..............................
Sociedad Consorcio Ara Ltda. .....................
Consorcio Ara-Ingendesa Ltda. ...................
Sacme...........................................................
Sistemas Sec S.A. ........................................
Centrales Hidroeléctricas de Aysén S.A. .....
GNL Quintero S.A. (2) ................................
GNL Chile S.A. ...........................................
Konecta Chile S.A. ......................................
Transmisora Eléctrica de Quillota Ltda. ......
97,663,785
9,868,180
161,051
297,106
—
761,471
245,234
20,060
14,262
196
787
54,911
841
8,114,817
846,831
43,751,232
2,040,429
84,338
2,020,667
313,383
18,124,811
50,178
17,464
51,827
785,210
319,769
39,531
12,459
246
—
63,130
93
535,292
1,387,279
4,198,715
725,127
612
4,257,321
—
—
—
—
—
—
—
—
—
—
—
—
—
132,336
—
—
—
549,974
—
109,601,626
—
—
—
—
—
—
—
—
—
—
—
—
2,579,306
—
—
—
641,336
—
Total.............................................................
165,946,198
30,882,447
682,310
112,822,268
As of December 31,
Company
2007
ThCh$
CEMSA...........................................................
Consorcio Ara-Ingendesa Ltda. ......................
Consorcio Indengesa-Minmetal Ltda..............
Electrogas S.A.................................................
Endesa España ................................................
Endesa Servicios .............................................
Empresa Eléctrica Piura S.A...........................
Endesa Lationoamérica S.A. (1) .....................
Etevensa ..........................................................
Gas Tal-Tal Ltda. ............................................
Gas Atacama Generación S.A.........................
Sacme..............................................................
Transmisora Eléctrica de Quillota Ltda. .........
Konecta Chile S.A...........................................
30,569,712
363
—
228,055
—
420,879
417,465
2,852,736
—
50,731
34,003
74,807
35,048
2,070
38,297,895
—
—
1,784,801
—
—
828,167
1,838,182
—
39,743
23,316
112,398
172,749
—
Total ................................................................
34,685,869
43,097,251
2008
ThCh$
2007
ThCh$
Long-term
2008
ThCh$
—
—
—
—
—
—
—
—
8,888,191
—
—
—
—
—
—
—
8,977,789
—
—
—
—
—
—
8,888,191
8,977,789
(1) The balance payable corresponds to a loan granted to Compañía Interconexcao Energética S.A. (“Cien”) to purchase
machinery and equipment necessary to complete the construction of its second transmission line. The loan is denominated
in US dollars, accrues interest at rate 8.08% per annum, and matures in May, 2012.
(1) The balance receivable from Atacama Finance Co. corresponds to loans granted by the dissolved subsidiary, Compañía
Eléctrica Cono Sur S.A. (see Note 11 (h) (ii)), to finance the construction of Gasoducto Atacama Argentina S.A. and Gas
Atacama Chile S.A. The loans are expressed in US dollars and accrue interest at an average annual rate of 7.5%. On
September 15, 2008, (date on which the loans originally matured) the loans were renegotiated and whilst conditions were
maintained, maturity was extended to March 15, 2010. This loan also includes a guarantee.
(2) The balance receivable from GNL Quintero S.A. relates to finance operations. It is stated in US dollars, accrues interest at
rate of 3.5% per annum and matures in 2009.
F-39
Short-term
F-40
ANNUAL REPORT
(c) Significant related company transactions and their effects in income (expense) for each year ended December 31 are as follows:
Company
Relationship
Atacama Finance Co. ..................................... Affiliate
Consorcio ARA-Ingendesa ............................ Affiliate
CEMSA .......................................................... Affiliate
Empresa Eléctrica Piura S.A. ......................... Member of Controlling Group
Electrogas S.A. ............................................... Affiliate
Endesa España ................................................ Parent company
Endesa Servicios............................................. Parent company
Endesa Latinoamerica .................................... Parent company
Fundación Endesa...........................................
Gas Atacama Generación S.A........................
Sacme..............................................................
Sistema SEC S.A............................................
Member of Controlling Group
Affiliate
Affiliate
Affiliate
Soc. Consorcio Ingendesa ARA Ltda. ........... Affiliate
Konecta Chile S.A.......................................... Affiliate
Centrales Hidroeléctricas de Aysén S.A. ....... Affiliate
GNL Quinteros S.A........................................ Affiliate
Transmisora Eléctrica de Quillota Ltda. ........ Affiliate
Nature of transaction
Interest
Price Level Restatement
Exchange difference
Services
Sale of energy
Purchase of energy
Purchase of gas
Services
Sale of energy
Purchase of energy
Services
Purchase of gas
Interest
Exchange difference
Exchange difference
Services
Interest
Services
Exchange difference
Services
Services
Services
Services
Interest
Services
Exchange difference
Services
Services
Interest
Interest
Exchange difference
Interest
Services
2006
Income
(Expense)
ThCh$
7,597,511
2,206,193
1,921,769
935,725
6,834,491
(5,871,130)
—
6,913,116
793,340
(13,796,129)
240,319
(2,300,926)
(3,741,241)
54,377
171
—
(2,494,488)
(4,821,252)
(14,845)
(70,498)
110,774
1,134,771
(466,676)
549,037
—
—
192,709
—
—
—
—
—
—
—
—
31,449
5,986
2007
Income
(Expense)
ThCh$
7,735,811
7,374,963
(14,148,358)
32,839
10,146,955
(4,876,971)
(17,124,610)
(14,550,076)
284,927
(5,673,981)
214,580
(2,984,422)
(32,109)
1,184
(10,585)
885,233
(1,071,504)
534
(133,474)
(3,397,177)
50,451
384,654
(578,211)
4,878,232
64,524
—
675,913
25,998
148,681
3,425,612
25,966
6,180
873,402
1,426,636
(3,392,004)
—
—
2008
Income
(Expense)
ThCh$
7,485,097
7,941,887
16,639,067
505,331
20,669,866
(1,157,655)
—
6,587,503
93,073
(8,618,320)
249,985
(4,576,224)
—
—
32,166
1,211,580
(830,093)
—
—
—
32,961
100,887
(854,081)
1,615,245
106,426
218,047
—
169,082
12,120
4,904,512
—
—
1,748,868
1,744,270
1,902,123
21,793
(206,574)
Note 7.
Inventories
Inventories include the following items and are presented net of allowances for obsolescence totaling ThCh$3,403,348 and
ThCh$3,546,574 and as of December 31, 2007 and 2008, respectively:
As of December 31,
2007
2008
ThCh$
ThCh$
Real estate under development ...........................................................................
Materials in transit ..............................................................................................
Operation and maintenance material...................................................................
Fuel .....................................................................................................................
13,635,961
538,751
55,825,631
44,823,310
15,821,978
722,451
60,242,737
27,410,370
Total....................................................................................................................
114,823,653
104,197,536
Note 8.
Deferred Income Taxes
a) Income taxes (recoverable) payable as of each year-end are as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Income tax provision – current ...........................................................................
Recoverable tax credits .......................................................................................
238,243,753
(218,268,144)
369,177,614
(278,184,922)
Total....................................................................................................................
19,975,609
90,992,692
b) Tax loss carryforwards - As of December 31, 2007 and 2008, the Company had tax loss carryforwards of ThCh$314,047,329 and
ThCh$194,366,201, respectively.
c) The net effect of recording deferred tax expense (benefit) was ThCh$(166,173,135), ThCh$50,693,356 and ThCh$97,868,053
during the years ended December 31, 2006, 2007 and 2008, respectively.
Transfers of short-term funds between related companies are treated as current cash transactions, with associated variable interest rates
based on market conditions. The resulting accounts receivable and accounts payable are usually at 30 day term, with automatic
rollover for the same term and amortization in line with cash flows.
F-41
F-42
129
130
enersis08
ANNUAL REPORT
d) In accordance with BT No.60 and 69 of the Chilean Association of Accountants, and Circular No.1,466 of the SVS, the Company
and its subsidiaries have recorded consolidated deferred income taxes as of December 31, 2007 and 2008 as follows:
Description
Allowance for doubtful accounts .........................
Deferred income...................................................
Vacation accrual...................................................
Leased assets ........................................................
Fixed assets depreciation .....................................
Severance indemnities..........................................
Other.....................................................................
Contingencies.......................................................
Bond discount ......................................................
Cost of studies......................................................
Finance costs ........................................................
Imputed interest on construction..........................
Deferred charges ..................................................
Actuarial deficit (Brazil) ......................................
Obsolescence........................................................
Materials used ......................................................
Imputed salaries on construction .........................
Tax losses.............................................................
Provision real estate project .................................
Sie 2000A project.................................................
Provision for employee benefits ..........................
Accrued Expenses ................................................
Deferred assets .....................................................
Capitalized expenses............................................
Allowance for tariff decree (Chilectra)................
Capitalized Interest ..............................................
Exchange difference.............................................
Intangible..............................................................
Complementary account-net ................................
Valuation allowance.............................................
Total .....................................................................
As of December 31, 2007
Asset
Liability
Short-term
Long-term
Short-term
Long-term
ThCh$
ThCh$
ThCh$
ThCh$
33,063,975
1,377,589
1,358,113
—
—
—
6,406,406
17,470,214
—
—
—
1,930
695,364
—
640,282
—
—
27,042,120
321,828
—
2,831,386
—
—
—
7,511,650
—
—
1,106,524
—
—
99,827,381
52,569,302
1,206,974
18,682
—
2,808,924
8,220
3,873,674
68,675,203
—
—
972,559
—
—
13,392,490
1,603,784
—
4,673,362
186,085,639
2,324,663
—
1,695,357
—
—
—
—
—
—
—
(11,846,002)
(17,543,528)
310,519,303
—
2,871,931
—
—
743,848
—
1,700,491
—
162,608
—
—
—
1,793,203
—
—
—
—
—
—
—
—
—
18,057,744
—
—
—
—
—
—
—
25,329,825
—
7,541,334
—
1,153,164
462,776,825
1,853,016
4,824,285
—
1,265,859
9,758,104
21,156,063
4,311,595
2,519,329
—
—
878,155
—
—
—
531,274
—
—
9,919,105
2,561,451
—
—
7,403,290
—
(203,495,397)
—
334,957,452
Asset
Liability
Short-term
Long-term
Short-term
Long-term
ThCh$
ThCh$
ThCh$
ThCh$
15,921,718
1,339,066
1,440,946
—
—
—
6,056,114
20,244,809
—
—
—
18,566
—
—
646,712
—
—
16,409,501
764,724
—
2,672,100
—
—
—
—
—
—
1,667,895
—
—
67,182,151
40,645,656
1,041,465
45,938
—
3,303,818
9,562
2,491,602
69,131,989
—
—
2,570,686
—
—
18,735,018
1,533,367
—
3,942,569
101,662,867
2,052,025
—
1,217,357
—
—
—
—
—
—
—
(11,238,052)
(18,199,113)
218,946,754
—
3,082,174
—
—
759,084
—
367,932
—
159,669
—
—
—
1,318,795
—
—
—
—
—
947,128
—
—
—
4,851,162
—
—
—
—
90,101
—
—
11,576,045
—
5,286,906
—
456,417
477,195,866
1,415,328
1,580,003
1,485,474
3,132,712
7,659,391
14,612,551
4,041,198
2,441,529
—
—
807,175
—
—
—
1,376,248
—
3,279,627
10,512,964
493,812
—
3,275,586
3,608,162
332,227
(198,845,331)
—
344,147,845
Note 9.
Other Current Assets
Other current assets are as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Guarantees and indemnities ................................................................................
Deferred expenses...............................................................................................
Post-retirement benefits ......................................................................................
Deposits for commitments and guarantees .........................................................
Deferred expenses for bond placement ...............................................................
Assets available for sale......................................................................................
Electricity for all project (Coelce) (*).................................................................
Bond discounts....................................................................................................
Fair value of derivative contracts........................................................................
Purchase with resale agreements (1)...................................................................
Others..................................................................................................................
357,960
217,075
288,437
37,638,604
392,023
1,390,386
23,740,321
1,096,633
498,124
84,849,225
4,204,488
33,678
57,062
289,489
7,333,288
209,040
1,494,114
49,441,787
1,098,199
2,195,698
437,865,125
6,719,587
Total....................................................................................................................
154,673,276
506,737,067
(*) This is a subsidy to be collected from the Brazilian Government for investments in the rural area of the state of Ceará.
(1) The detail of reverse repurchase agreements is as follows:
e) Income tax benefit (expense) for the year ended December 31, 2006, 2007 and 2008 is as follows:
Item
2006
ThCh$
As of December 31,
2007
ThCh$
2008
ThCh$
Current income tax (expense) benefit:
Income tax provision .........................................................................
Adjustment for tax expense - prior year ............................................
(286,468,496)
7,088,500
(238,243,753)
2,174,368
(369,177,614)
964,199
Deferred tax (expense) benefit:
Deferred taxes....................................................................................
Tax-loss Benefits ...............................................................................
Amortization of complementary accounts .........................................
Valuation allowance (*).....................................................................
Other charges or credits .....................................................................
26,822,365
1,849,282
(13,891,826)
153,242,596
—
(64,121,581)
11,085,183
(13,569,706)
26,997,931
—
(82,814,099)
15,106,933
(14,532,214)
(585,877)
64,137
Total...................................................................................................
(111,357,579)
(275,677,558)
(450,974,535)
(*) During 2006, the valuation allowance has been reversed as a consequence of the merger approved in Extraordinary
Shareholders’ Meetings of Chilectra S.A. (formerly Elesur S.A.) and Chilectra S.A. In 2007, the valuation allowance has been
reversed as a consequence of the merger of Emgesa S.A. and Betania S.A. The amount credited to income in income tax
expense was ThCh$27,609,204.
F-43
F-44
Code
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
Start
12-27-2007
12-27-2007
12-28-2007
12-27-2007
12-28-2007
12-27-2007
12-28-2007
12-28-2007
12-27-2007
12-27-2007
12-27-2007
12-27-2007
12-28-2007
12-28-2007
12-28-2007
12-28-2007
12-28-2007
12-27-2007
12-28-2007
12-28-2007
12-28-2007
12-27-2007
12-27-2007
12-27-2007
12-28-2007
12-28-2007
12-27-2007
12-27-2007
12-28-2007
12-28-2007
12-27-2007
12-28-2007
12-28-2007
12-28-2007
12-27-2007
12-28-2007
12-27-2007
12-27-2007
12-27-2007
12-27-2007
Date
End
01-02-2008
01-03-2008
01-02-2008
01-03-2008
01-07-2008
01-02-2008
01-07-2008
01-07-2008
01-03-2008
01-03-2008
01-03-2008
01-03-2008
01-07-2008
01-07-2008
01-07-2008
01-07-2008
01-07-2008
01-02-2008
01-07-2008
01-07-2008
01-07-2008
01-03-2008
01-03-2008
01-03-2008
01-07-2008
01-07-2008
01-03-2008
01-03-2008
01-07-2008
01-07-2008
01-03-2008
01-07-2008
01-07-2008
01-07-2008
01-02-2008
01-02-2008
01-03-2008
01-03-2008
01-03-2008
01-03-2008
Financial institution
Currency
Banco Central de Chile
Banco Estado
CorpBanca
Banco Estado
Banco Chile
CorpBanca
CorpBanca
Banco Santander Santiago
BBVA Banco BHIF
Banco Crédito e Inversiones
Banco Chile
BBVA Banco BHIF
Banco Itaú Chile
CorpBanca
Banco Chile
Banco Chile
BBVA Banco BHIF
Banco Estado
BBVA Banco BHIF
Banco Estado
Banco Chile
Banco Chile
Banco Chile
BBVA Banco BHIF
Banco Chile
BBVA Banco BHIF
BBVA Banco BHIF
$
$
UF
UF
UF
$
$
$
$
UF
UF
UF
$
$
$
UF
$
$
$
$
UF
UF
UF
UF
$
$
UF
UF
$
$
UF
$
$
UF
$
UF
UF
UF
UF
$
Total
Document
CERO
CERO
CERO
CERO
L.H.
D.P.F.
L.H.
L.H.
L.H.
L.H.
CERO
L.H.
CERO
L.H.
L.H.
L.H.
L.H.
D.P.R.
L.H.
L.H.
L.H.
D.P.F.
D.P.F.
D.P.R.
L.H.
L.H.
D.P.F.
D.P.F.
L.H.
L.H.
L.H.
L.H.
L.H.
L.H.
D.P.F.
BOND
L.H.
L.H.
D.P.F.
D.P.F.
ANNUAL REPORT
Interest
rate
%
0.58%
0.59%
0.46%
0.46%
0.46%
0.58%
0.58%
0.58%
0.59%
0.46%
0.46%
0.46%
0.59%
0.58%
0.58%
0.46%
0.58%
0.58%
0.58%
0.59%
0.46%
0.46%
0.46%
0.46%
0.58%
0.59%
0.46%
0.46%
0.59%
0.58%
0.46%
0.58%
0.59%
0.46%
0.58%
0.46%
0.46%
0.46%
0.46%
0.59%
Current
amount
ThCh$
Nominal
ThCh$
248
539
1,877
2,658
3,156
6,323
8,567
12,037
17,454
18,969
34,273
42,278
43,288
111,756
112,233
197,296
331,659
368,267
437,890
471,019
885,066
958,538
1,105,108
1,172,657
1,172,543
1,331,639
2,155,811
2,202,507
2,213,102
2,404,830
2,883,540
2,919,196
3,023,628
3,814,677
5,074,373
5,446,335
8,300,795
10,570,229
11,094,912
13,897,952
248
539
1,877
2,659
3,159
6,318
8,578
12,029
17,440
18,980
34,293
42,302
43,263
111,692
112,168
197,561
331,468
367,982
438,483
470,741
886,262
959,093
1,105,749
1,173,335
1,174,128
1,330,854
2,157,060
2,203,783
2,211,797
2,403,434
2,885,212
2,923,145
3,021,845
3,819,836
5,070,452
5,448,475
8,305,606
10,576,355
11,101,451
13,887,026
84,849,225
84,866,678
Code
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
Start
12-19-08
12-29-08
12-19-08
12-22-08
12-19-08
12-18-08
12-19-08
12-30-08
12-29-08
12-23-08
12-30-08
12-19-08
12-29-08
11-27-08
12-26-08
12-19-08
12-17-08
12-16-08
12-16-08
11-27-08
11-27-08
12-17-08
12-19-08
12-16-08
12-30-08
12-26-08
12-30-08
11-27-08
12-26-08
12-30-08
12-30-08
12-30-08
12-30-08
12-19-08
12-29-08
12-17-08
12-29-08
12-30-08
12-22-08
12-23-08
12-30-08
12-18-08
12-16-08
Date
End
01-07-09
01-19-09
01-05-09
01-26-09
01-05-09
01-05-09
01-12-09
01-19-09
01-19-09
01-14-09
01-28-09
01-12-09
01-13-09
01-14-09
01-06-09
01-05-09
01-06-09
01-05-09
01-05-09
01-14-09
01-14-09
01-29-09
01-12-09
01-05-09
01-28-09
01-06-09
01-19-09
01-14-09
01-06-09
01-07-09
01-07-09
01-07-09
01-07-09
01-07-09
01-13-09
01-06-09
01-19-09
01-28-09
01-26-09
01-14-09
01-19-09
01-05-09
01-05-09
Banco Central
Banco Central
Banco Central
Banco Central
Banco Central
Banco Estado
Banco Central
BBVA
Banco Central
Banco Central
Banco Central
Banco Central
Banco Estado
Banco Central
Banco Central
Banco Central
Banco Central
Banco Central
Banco Central
Banco Central
Tesorerìa
Banco Central
Banco Central
Banco Itaú
Banco Central
Banco Central
BBVA
Banco Central
Banco Central
Banchile C. de B.
Banco Chile
Banchile C. de B.
Banchile C. de B.
Banco Central
Banco Estado
Banco Central
Banco Central
Banco Central
Banco Central
I.N.P.
BBVA
Banco Estado
Banco Central
Currency
Document
$
$
$
$
$
U.F.
$
U.F.
$
$
$
$
U.F.
US$
$
$
$
$
$
US$
US$
US$
$
U.F.
$
$
U.F.
US$
$
$
$
$
$
$
U.F.
$
$
$
$
$
U.F.
U.F.
$
CERO
BONO
BONO
BONO
BONO
P.D.B.C.
BONO
P.D.B.C.
P.D.B.C.
BONO
BONO
P.D.B.C.
P.D.B.C.
P.D.B.C.
BONO
P.D.B.C.
P.D.B.C.
BONO
P.D.B.C.
BONO
BONO
BONO
CERO
BONO
BONO
P.D.B.C.
BONO
CERO
CERO
BONO
BONO
BONO
CERO
CERO
CERO
CERO
CERO
BONO
BONO
BONO
CERO
CERO
CERO
Total
F-45
F-46
Interest
rate
%
0.55%
0.41%
0.55%
0.48%
0.65%
0.55%
0.55%
0.55%
0.54%
0.40%
0.40%
0.55%
0.55%
0.17%
0.55%
0.55%
0.55%
0.60%
0.55%
0.17%
0.17%
0.17%
0.55%
0.60%
0.54%
0.55%
0.55%
0.17%
0.55%
0.46%
0.46%
0.46%
0.46%
0.55%
0.55%
0.55%
0.54%
0.40%
0.48%
0.40%
0.55%
0.55%
0.55%
Current
amount
ThCh$
70,149,364
41,991,475
29,171,198
23,744,696
23,082,860
20,321,680
19,056,225
18,299,107
15,837,094
15,115,090
14,575,529
14,341,878
13,599,116
12,577,675
12,059,047
10,916,802
10,093,010
10,086,645
10,068,806
9,549,861
7,892,676
7,006,396
6,689,898
5,742,297
4,237,163
2,893,833
2,514,959
1,874,796
1,582,664
1,449,817
970,168
234,059
106,703
4,638
4,271
4,039
4,006
3,714
3,652
3,118
2,951
1,440
709
Nominal
ThCh$
70,239,190
42,100,483
29,197,880
23,843,332
23,107,801
20,340,264
19,098,057
18,362,837
15,891,238
15,143,276
14,629,938
14,373,360
13,631,514
12,587,439
12,072,300
10,926,787
10,104,084
10,096,703
10,078,010
9,557,276
7,898,803
7,017,674
6,704,583
5,748,023
4,258,514
2,897,013
2,523,717
1,876,251
1,584,403
1,450,832
971,345
234,223
106,778
4,644
4,281
4,044
4,020
3,728
3,667
3,124
2,961
1,442
710
437,865,125
438,686,549
131
132
enersis08
ANNUAL REPORT
b. At our Peruvian subsidiary Edegel S.A. an amount of ThCh$84,284,437 (ThCh$50,813,370 in 2007) relates to leasing agreements
to finance the project of converting the Ventanilla thermo-electric plant to combined cycle, carried out by the Company and the
financial institutions Banco de Crédito del Perú and BBVA - Banco Continental. These agreements have an 8 year maturity and
accrue interest at an annual rate of Libor +3.0% and Libor +2.5%, respectively.
Note 10. Property, Plant and Equipment
Property, plant and equipment balances by major functional categories is as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Land ..................................................................................................................................
150,430,556
169,158,999
Buildings and infrastructure .............................................................................................
Distribution and transmission lines and public lighting ..................................................
Less: third party contributions..........................................................................................
7,510,420,114
5,014,813,294
(150,879,094)
8,347,990,500
6,012,517,521
(199,724,344)
Sub-total............................................................................................................................
12,374,354,314
14,160,783,677
Machinery and equipment................................................................................................
2,161,441,303
2,692,490,347
Work in progress ..............................................................................................................
Construction materials......................................................................................................
Leased assets (1)...............................................................................................................
Furniture and fixtures, tools, and computing equipment .................................................
Vehicles ............................................................................................................................
Equipment in transit .........................................................................................................
Other assets.......................................................................................................................
268,991,805
37,870,566
87,271,401
84,632,971
7,345,108
7,795,561
86,979,573
440,071,534
57,424,794
121,114,983
100,541,146
8,688,174
10,840,227
114,521,250
Sub-total............................................................................................................................
580,886,985
853,202,108
Technical appraisal...........................................................................................................
36,342,462
349,981
36,212,020
349,981
Total technical appraisa....................................................................................................
36,692,443
36,562,001
Total property plant and equipment .................................................................................
15,303,805,601
17,912,197,132
Accumulated depreciation at beginning of year ..............................................................
Other assets.......................................................................................................................
(5,133,280,624)
(894,005,809)
(76,430,322)
(6,002,753,855)
(1,153,720,365)
(94,540,633)
Accumulated depreciation at beginning of year ..............................................................
(6,103,716,755)
(7,251,014,853)
Accumulated depreciation at beginning of year technical appraisal ...............................
Other assets.......................................................................................................................
(25,643,437)
(343,778)
(323,163)
(26,650,964)
(345,089)
(389,344)
Total accumulated depreciation at beginning of year technical appraisal.......................
(26,310,378)
(27,385,397)
Depreciation expense for the year....................................................................................
(453,778,547)
(553,586,380)
Total accumulated depreciation at end of year ................................................................
(6,583,805,680)
(7,831,986,630)
Total property, plant and equipment, net .........................................................................
8,719,999,921
10,080,210,502
Useful life
range
Years
The Company and its foreign subsidiaries have all carry risk, earthquake and machinery breakdown insurance policies with a
US$200,000,000 limit; including losses for business interruption. Premiums prepaid associated with these policies are recorded in
prepaid expenses and charged to income over the life of the policy.
Note 11. Investment in Related Companies
20-65
20-60
20-60
4-25
—
4-10
4-10
4-10
4-10
4-10
4-25
20-60
4-25
(1) Leased assets:
a. At Endesa Chile an amount of ThCh$34,343,714 (ThCh$ 34,343,714 in 2007) corresponds to a lease agreement for the 2x220KV
Ralco-Charrúa transmission lines and installations between Endesa Chile and Huepil S.A. This agreement has a 20-year maturity
and earns interest at an annual rate of 6.5%.
a)
Investments in related companies of December 31, 2007 and 2008 are as follows:
Related
Companies
Number
of shares
Gas Atacama Generación S.A............
Gasoducto Atacama
Argentina S.A. ............................
Gasoducto Atacama Chile S.A...........
Inversiones Electrogas S.A. ...............
Cía. de Energía del
Mercosur S.A. (2) .......................
Transmisora Eléctrica de Quillota
Ltda.............................................
Sacme.................................................
Electrogas S.A....................................
Consorcio ARA- Ingendesa ...............
Sociedad Consorcio
Ingendesa Ara Ltda (1) ...............
Consorcio Ingendesa - Minmetal
Limited (1)..................................
Gas Atacama S.A. ..............................
Inversiones Gas Atacama Holding
Ltda. (7) ......................................
Konecta Chile S.A. (6).......................
Sistemas SEC S.A. (3) .......................
Termoeléctrica José de San Martín
S.A. (4) .......................................
Termoeléctrica Manuel
Belgrano S.A. (4)........................
GNL Chile S.A. (5)............................
Centrales Hidroeléctricas de Aysén
S.A. (5) .......................................
GNL Quintero S.A. (5) ......................
Consorcio Ara- Ingendesa Sener (1)..
Hidroaysén Transmisión S.A.(5) .......
Percentage
owned
2008
%
Shareholders’ equity
of investee
2007
2008
ThCh$
ThCh$
2007
%
(5,452,494)
Net income
of investees
2007
2008
ThCh$
ThCh$
—
0.05%
0%
5
50
425
0.03%
0.05%
42.5%
0.03%
0.05%
42.5%
6,305,400
45%
45%
—
12,000
85
—
50%
50%
0.021%
50%
50%
50%
0.021%
50%
—
50%
50%
25,940
1,276
(30,417)
—
1,147
50%
0.00115%
50%
0.00115%
35,719
171,619,879
32,028
201,085,532
1,625
(10,683,051)
—
262
56,350
50%
26.2%
49%
50%
26.2%
49%
165,846,327
1,150
2,049,608
188,984,690
1,145
2,621,991
(15,584,044)
—
207,636
93,290
Investment book value
2007
2008
ThCh$
ThCh$
2008
ThCh$
—
(31,871,213)
—
(9,016)
(15,935)
—
(2,727)
—
149,546,537
113,785,208
21,330,980
(1,585,730)
20,546,222
5,757,187
(1,545,946)
733,371
6,347,624
6,167
6,611
2,183,805
(476)
10,274
2,446,804
(464)
367
2,697,740
38,549
51,033
7,988,511
44,877
56,893
9,065,667
8,264,059
9,632,067
(128,881)
(88,009)
920
(57,997)
(39,604)
3,718,827
4,334,430
8,793,766
79,682
17,455,369
231,165
9,332,138
87,946
20,118,448
624,116
722,347
4,341
5,947,971
305,989
538,372
4,208
6,583,604
692,650
250,422
2,076
1,126
108,854
361,173
2,170
1,264
152,995
269,186
2,104
1,399
346,325
4,396,883
39,841
3,709
115,583
4,666,069
43,973
4,275
312,058
2,821
68,631
(15,209)
1,411
12,970
638
(3,694)
(189,395)
85,966
86
812
(123)
(1,847)
(2)
17,860
1,969
16,014
2,306
(5,494,589)
—
572,383
3,325,420
—
(137,594)
(61,033,654)
—
(101,742)
(2,747,294)
—
280,468
29,681,532
302
1,004,307
41,250,713
300
1,284,776
19,412
128,459,641
102,065,119
18,796,497
104,300
20.86%
20.86%
—
—
—
—
—
17,857
104,300
3,023,642
20.86%
33.33%
20.86%
33.33%
77,300
(1,860,945)
77,305
93,290
(2,244,975)
—
(449,199)
—
(1,965,505)
—
—
—
(149,733)
—
(655,168)
17,856
(620,315)
19,411
(748,325)
3,369,824
200
—
51
51%
20%
33.33%
—
51%
20%
33.33%
0.51%
31,862,523
8,657,779
(5,753)
—
67,071,658
120,633,413
675
22,368
(2,103,735)
(801,134)
(6,841)
—
(3,741,273)
(3,093,628)
3,863
—
—
—
—
—
(1,072,903)
(160,227)
(2,280)
—
(1,908,047)
(618,726)
1,288
—
16,249,871
1,731,556
(1,918)
—
34,206,512
24,126,683
225
114
5,893,474
(59,634,787)
(2,370,864)
64,464,056
118,707,021
Total ...................................................
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Equity in income
2007
ThCh$
2006
ThCh$
Non consolidated related companies of subsidiary Ingendesa Ltda.
Non consolidated related company of subsidiary Endesa Argentina S.A.
Non consolidated related company of subsidiary of CAM Chile Ltda.
Non consolidated related companies of subsidiaries Endesa Costanera S.A. and Hidroeléctrica El Chocón S.A.
Non consolidated Companies of Endesa Chile (in organization).
Non consolidated related company of subsidiary Synapsis Ltda.
Included an allowance for impairment ascending ThCh$53,241,631in 2007 (See Note 2 l).
b)
Income and (losses) recognized by Enersis S.A. based on the participation in the related companies as of December 31, 2006,
amounted to ThCh$6,040,083 (ThCh$(146,610)), ThCh$2,975,492 (ThCh$(62,610,279)) in 2007 and ThCh$3,600,288
(ThCh$(5,971,152)) in 2008.
c)
In accordance with Technical Bulletin No.64 of the Chilean Association of Accountants, the Company has recorded for the years
ended December 31, 2006, 2007 and 2008, foreign exchange gains and losses on liabilities related to net investments in foreign
countries that are denominated in the same currency as the functional currency of those foreign investments. Such gains and
losses are included in the cumulative translation adjustment account in shareholders’ equity, and in this way, act as a hedge for
the exchange risk affecting the investments. As of December 31, 2007 and 2008 the corresponding amounts are as follows:
F-47
F-48
ANNUAL REPORT
2008:
Company
Edesur S.A. ........................................
Ampla Energía e Servicos S.A...........
Emgesa S.A. ......................................
Edegel S.A. ........................................
Hidroeléctrica El Chocón S.A. ..........
CEMSA .............................................
Endesa Brasil S.A. .............................
Endesa Costanera S.A........................
Country
of origin
Investment
ThCh$
Argentina
Brazil
Colombia
Peru
Argentina
Argentina
Brazil
Argentina
202,983,593
229,117,881
246,295,371
166,512,773
260,039,949
4,334,430
509,753,175
97,040,474
Total...................................................
Reporting
currency
US$
US$
US$
US$
US$
US$
US$
US$
1,716,077,646
and paid the total amount, a sum of ThCh$1,169, while Endesa Inversiones Generales S.A. subscribed one share,
representing 1% of the capital, and paid in ThCh$$12 for it.
Liability
ThCh$
68,238,448
166,797,109
291,989,846
134,553,414
90,445,806
3,040,052
442,980,964
53,349,910
1,251,395,549
2007:
Company
Edesur S.A. ........................................
Ampla Energia e Serviços S.A...........
Emgesa S.A. ......................................
Edegel S.A. ........................................
CEMSA .............................................
Endesa Brasil S.A. .............................
Country
of origin
Investment
ThCh$
Argentina
Brasil
Colombia
Peru
Argentina
Argentina
Brasil
Argentina
168,661,919
151,974,683
194,015,987
134,515,725
228,069,515
3,718,827
487,000,626
83,461,096
Total...................................................
Reporting
currency
US$
US$
US$
US$
US$
US$
US$
US$
1,451,418,378
Liability
ThCh$
58,016,694
141,811,798
248,251,337
114,398,035
76,304,626
2,535,385
412,329,709
46,000,548
1,099,648,132
d) The investments in related companies made by Enersis S.A. and its affiliates for the years ended December 31, 2007 and 2008,
are detailed as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Company
Centrales Hidroeléctricas de Aysén S.A. (Endesa Chile) .........................................
Endesa Costanera S.A...............................................................................................
Central Hidroeléctrica El Chocón S.A......................................................................
4,190,569
5,995,273
31,394,519
19,864,710
—
—
Total..........................................................................................................................
41,580,361
19,864,710
e) Constitution of companies
i.
On September 4, 2006, Endesa Chile and its subsidiary Endesa Inversiones Generales S.A. executed the incorporation
deed that gave birth to a new subsidiary, whose name is Centrales Hidroeléctricas de Aysén S.A. and whose objective is
the development, financing, ownership and operation of a hydroelectric project in the 11th Region (Aysén). The capital of
the company is ThCh$1,169 divided into 100 ordinary, single-series, nominal, equivalent, no par-value shares. Endesa
Chile subscribed 99 shares, representing 99% of the capital,
On September 21, 2006 the First General Extraordinary Shareholders’ Meeting of Centrales Hidroeléctricas de Aysén S.A.
was held and in it the increase in the paid-in capital of the Company to the new sum of ThCh$23,391,720 divided into 2
million nominal, single-series, no par value shares, was approved. This will be subscribed to and paid in within three years
of the date of the above mentioned First Extraordinary General Shareholders’ Meeting. In this way, of the 1,999,900 shares
corresponding to the increase in paid-in capital, Endesa Chile would subscribe to 1,019,900 shares, representing 51% of
the increase in capital and 50.99995% of the new capital of the Company, while the new shareholder Colbún S.A. would
subscribe to 980,000 shares, representing 49% of the increase in paid-in capital and 49% of the new paid-in capital. Endesa
Inversiones Generales S.A. will not exercise its preferential subscription right, and therefore its interest in the paid-in
capital of the Company will be 0.00005%.
On October 10, 2006, Endesa Chile subscribed to 1,019,899 shares, paying in a total of ThCh$11,880,881 for them, or
Ch$11,650 per share, a sum equivalent to the placement value agreed to in the First General Shareholders’ Meeting of
Centrales Hidroeléctricas de Aysén S.A.. At the same time, it subscribed to an additional 1 share, paying in a total of
Ch$11,650 for it, equivalent to the placement value agreed to in the First General Extraordinary Shareholders’ Meeting of
Centrales Hidroeléctricas de Aysén S.A. However, the payment for this share was made in accordance with the terms set
out in the public deed of “Payment of Shares Subscribed to for Transfer of Title and the Constitution of Usufruct on the
Rights to Use the Water”, which was executed by the parties as of the same date, and according to which Ch$11,650 were
paid in cash, plus a contribution for the ownership of the title to the rights to use the water that are identified in the above
deed.
On October 16, 2007, the Extraordinary Shareholders’ Meeting of Centrales Hidroeléctricas de Aysén S.A. was held. The
shareholders increased its capital by ThCh$14,565,375 representing 1,337,500 single series, no par value shares, which
shall be subscribed and paid in within 3 years after the date of the Shareholders’ Meeting. At the same time, Empresa
Nacional de Electricidad S.A. subscribed 682,125 shares for a total of ThCh$7,428,341, of which it paid ThCh$1,219,136
by capitalizing credits and ThCh$2,106,746 in cash. On December 17, 2007, Empresa Nacional de Electricidad S.A. paid
in ThCh$2,083,823 by means of a cash payment to the account of this capital increase.
ii. On March 9, 2007, Empresa Nacional de Electricidad S.A. subscribed 200 of the 1,000 registered shares issued by public
deed of the Company GNL Quintero S.A.. It paid for them by assigning, transferring and capitalizing in the Company
accounts receivable of ThCh$2,190,919 from its investee GNL Chile S.A.. The ownership interest of Endesa Chile in GNL
Quintero S.A. is 20%. On May 31, 2007 the pending contribution of ThCh$771 in GNL Chile S.A. was paid by
capitalizing the account receivable.
iii. On October 29, 2007, the company Central Eólica Canela S.A. was incorporated. Its shareholders are the subsidiary
Endesa Eco S.A., which owns 75%, and Centinela S.A., which owns 25%. As of this date, this subsidiary forms part of the
consolidated financial statements of the company.
By means of a shareholders’ agreement of November 23, 2007, Endesa Eco S.A. and Centinela S.A. stipulated the terms
and conditions for the latter’s withdrawal 5 years after signing such agreement. The above agreement stipulates that
Centinela S.A. will have the option of withdrawing from the company by selling its ownership interest to Endesa Eco S.A..
As a result of the above, minority interest has been recorded in sundry long-term creditors.
iv. On April 15, 2008, the Company paid capital contributions of ThCh$2,108,778 in Centrales Hidroeléctricas de Aysén
S.A., whose subscription was pending. This transaction served to pay off all the 682,125 shares subscribed on October 16,
2007.
v. On April 30, 2008, the company purchased 1,667,700 shares of Centrales Hidroeléctricas de Aysén S.A., paying
ThCh$7,236,710 for 685,950 shares on June 5, 2008. The balance of 981,750 shares will be paid within a period of three
years.
F-49
F-50
133
134
enersis08
ANNUAL REPORT
vi. On July 15, 2008, the Company made a capital contribution of US$35,680,377 in GNL Quintero S.A., equivalent to
ThCh$18,472,192, by capitalizing credits, while maintaining its 20% ownership interest.
vii. On August 20, 2008, the Company made a partial payment of capital subscribed to Centrales Hidroeléctricas de Aysén
S.A. on April 30, 2008, by contributing ThCh$5,044,622, equivalent to 490,722 shares.
viii. On August 20, 2008, the Company subscribed a capital contribution of US$1,000,000 in GNL Chile S.A., equivalent to
ThCh$538,137, maintaining its 33.33% ownership interest in that company.
ix. On September 22, 2008, the company made a full payment of capital subscribed to Centrales Hidroeléctricas de Aysén
S.A. on April 30, 2008, by contributing ThCh$5,474,600, equivalent to 491,028 shares.
f) Reorganization of entities under common control
i.
On April 1, 2006, the subsidiaries Chilectra S.A. (formerly Elesur S.A.) and Chilectra S.A. merged, as was approved in a
Meeting of Shareholders held on March 31, 2006. As a result of the merger and according to Technical Bulletin N°72 of
the Chilean Institute of Accountants, this business combination subject to common control was recorded under the pooling
of interests methodology, causing an increase of ThCh$3,531,613 in shareholders’ equity
ii. On August 3, 2007, Endesa Chile Internacional S.A. was subject to a takeover merger by Sociedad Compañía Eléctrica
Cono Sur S.A., with the latter subsisting as the company making the takeover. This merger was approved and ratified in the
Extraordinary Shareholders’ Meetings of both companies on August 7, 2007.
This merger had no effect, since Endesa Chile was the main 100% shareholder of both companies
iii. On September 1, 2007, the merger of the Colombian companies Emgesa S.A. and Central Hidroeléctrica Betania S.A.,
approved by the Shareholders’ Meetings of both companies of February 21, 2007, took place by Betania taking over
Emgesa, with the former subsisting as the company making the take over and changing its name Emgesa S.A.
The above transaction has been recorded as stipulated in Technical Bulleting 72 of the Chilean Institute of Accountants as
a combination of companies under common control based on the methodology of the unification of interests.
As a result of this merger Endesa Chile and its subsidiary Compañía Eléctrica Cono Sur S.A. hold a direct 26.87% (1.45%
and 25.43%, respectively) share of this new company. This ownership interest eliminates the 99.99% previously held in
Betania S.A.. Before the merger, Betania S.A. held a 23.45% ownership interest in Emgesa S.A.
As a result of the above, an equity reduction of reserves of ThCh$61,741,337 has been recognized
g) Acquisitions
i.
On January 13, 2006, the Company purchased 5,500 shares in Empresa Eléctrica Pangue S.A. for ThCh$6,594, increasing
it direct ownership interest in such company to 94.97%.
On July 20, 2006, the Company acquired 3,500 shares of Empresa Eléctrica Pangue S.A. for ThCh$4,110, increasing its
direct ownership interest in that company to 94.975189%.
ii. In Peru, on June 1, 2006, Empresa de Generación Termoeléctrica Ventanilla S.A. (Etevensa) was upstream merged into the
subsidiary Edegel S.A.
As a result of the merger and in accordance with Technical Bulletin N° 72 of the Chilean Institute of Accountants, this
business combination subject to common control was recorded under the pooling of interests methodology and led to
decreasing the interest in Edegel S.A. to 55.44% and recognizing a reduction in other reserves, under shareholders’ equity,
by ThCh$6,734,291 (See note 22e).
iii. Through a Memorandum of Understanding signed on October 5, 2004, the Corporación Financiera del Valle will stop
being shareholder of the Central Hidroeléctrica de Betania S.A. through an asset exchange operation which will take place
between the Corfivalle Group and Endesa Group when the legal processes defined by both parties prior to the delivery of
the titles to the assets involved are completed. On December 29, 2006 the writ of the splitting of Betania was protocolized,
and with that the transfer of ownership of the assets forming part of the Corfivalle group was formalized.
With this operation, the Endesa Chile Group gave to Corfivalle the electricity Sub-station of Betania S.A. E.S.P. and
3.81% of the ownership in Empresa de Energía de Bogotá S.A. E.S.P., in exchange for a 14.3% interest in Central
Hidroeléctrica de Betania S.A. E.S.P which at that date was owned by Corfivalle; thus Endesa Chile Group increased its
interest in Central Hidroeléctrica de Betania S.A. E.S.P from 85.62% to 99.99%.
In accordance with Technical Bulletin N° 72 of the Chilean Institute of Accountants and Circular N°1697 of the
Superintendency of Securities and Insurance, the Company evaluated the assets and liabilities acquired from Central
Hidroeléctrica de Betania S.A. at their respective fair market values. As a result of this evaluation it was concluded that the
fair market values do not differ substantially from the book values.
As a result, the above mentioned purchase of the minority interest was recorded in conformity with Technical Bulletin
No. 72 of the Chilean Institute of Accountants and involved recognizing negative goodwill amounting to ThCh$8,554,907.
(See note 13b).
iv. On February 27, 2007, Empresa Nacional de Electricidad S.A. proceeded to acquire 19,574,798 ordinary, registered, nonendorsable shares of Southern Cone Power Argentina S.A. for ThCh$5,995,273. These shares represent 100% of the
capital of Southern Cone Power Argentina S.A., which is the holder of 8,081,160 class A shares of Endesa Costanera S.A.,
representatives of 5.5% of this Company’s capital stock, which is the only asset of Southern Cone Power Argentina S.A..
As a result of the above, Endesa Chile now directly and indirectly owns 69.77% of the stock of Endesa Costanera S.A..
v. On March 08, 2007, Empresa Nacional de Electricidad S.A. finalized signature of a contract to purchase all the shares of
Central Hidroeléctrica El Chocón S.A., held directly or indirectly by CMS Generation S.R.L.. Endesa Chile made use of its
“first refusal” option giving it the preferential purchase option under a shareholders’ agreement. The operation meant
acquiring 2,734,110 class R shares and 1,733,390 class L shares equivalent to 25% of the stock capital of Hidroinvest S.A.,
the company which controls 59% of Hidroeléctrica El Chocón S.A., as well as 7,405,768 shares of Central Hidroeléctrica
El Chocón S.A., equivalent to 2.4803% of the stock capital of the Company, which gave it the preferential purchase option
under a shareholders’ agreement, for US$50,000,000 (ThCh$31,394,520). As a result of the above, Endesa Chile now
directly and indirectly owns 67.67% of the stock capital of Central Hidroeléctrica El Chocón S.A.
According to the provisions of Technical Bulletin 72 of the Chilean Institute of Accountants and the standards stipulated in
1.697 of the Superintendency of Securities and Insurance, the Company evaluated the assets and liabilities acquired from
Endesa Costanera S.A. and Central Hidroeléctrica El Chocón S.A. at their respective fair values. This evaluation showed
that the fair values do not differ significantly from book values.
As a result of the above, the above minority interest was recorded as stipulated in Technical Bulletin 72 of the Chilean
Institute of Accountants and a negative goodwill of ThCh$2,216,425 was recognized in Endesa Costanera S.A. and
ThCh$5,883,599 in Central Hidroeléctrica El Chocón S.A. (See note 13b).
vi. On March 27, 2007, Sociedad Concesionaria Túnel el Melón S.A. increased its paid-in capital by issuing 3,169,614,306
shares at a total amount of ThCh$34,893,978, with the Company concurring 100%, through a
F-51
F-52
cash payment of ThCh$18,433,872 and capitalization of loans in the amount of ThCh$16,460,040, thereby increasing the
Company’s participation in that company by 0.01% to 100%
h) Dissolution of related parties:
i.
As a company restructuring in Colombia, on January 30, 2006 Capital de Energía S.A. (Cesa), owner of 48.48% of Emgesa
S.A. was liquidated. 51.00% of Cesa, in turn, was controlled by Central Hidroeléctrica Betania S.A.
As a result of such restructuring, as stipulated in Technical Bulletin 72 of the Chilean Institute of Accountants, this
transaction by companies under common control was booked using the pooling of interests methodology, which meant
reducing the ownership interest of Emgesa S.A. to 23.45% and recognizing an equity increase in reserves of
ThCh$2,237,266 (see note 22e).
ii. On September 1, 2008, Compañía Eléctrica Conosur S.A, a Panamanian subsidiary of Endesa Chile, was wound up. This
winding-up was approved by the Extraordinary Shareholders’ Meeting of the wound-up company on September 1, 2008.
This winding-up did not result in material financial statement impact as Endesa Chile was the majority shareholder, with a
100% ownership interest in the company. As a result, all related assets and liabilities were absorbed by Endesa Chile.
iii. On December 22, 2008, Endesa Brasil Participacoes Ltda., a Brazilian subsidiary of Endesa Argentina S.A. and Endesa
Chile Matriz., which had 95% and 5% ownership interests, respectively, was wound up. This winding-up did not result in
material financial statement impact as Endesa Chile directly or indirectly had a 100% ownership interest in the company.
i)
ANNUAL REPORT
Eléctrica de Iquique S.A. and Empresa Eléctrica de Antofagasta S.A., before the arbitrator Ricardo Peralta, in which GAG
demanded the termination of the electricity supply contracts signed with those distributors.
The result of the arbitration has been unfavorable for GAG, thus further aggravating the entities’s delicate operative and
financial situation.
Due to the facts and circumstances described above, the Company believes that the impairment of its investment in Gas
Atacama is other-than-temporary as it is rather influenced by changes in the economical environment, situation of raw
material supply and other circumstances which are not deemed to be temporary in nature.
The Company performed an impairment test by comparing the fair value of the investment in Gas Atacama (determined
using a discounted cash-flow approach as no market value is available) to the respective carrying amount (including
goodwill), resulting in the investment (including goodwill) being impaired.
Thus, as of December 31, 2007, the Company recorded a total impairment charge of ThCh$ 48,953,062 (historical Chilean
pesos) in its Consolidated Statements of Income, which is comprised of ThCh$ 62,675 (historical Chilean pesos) of
impairment charge of goodwill recorded over the investment in Inversiones Gas Atacama Holding and ThCh$ 48,890,387
(historical Chilean pesos) related to the impairment of the investment accounted for under the equity method. These
amounts were recorded within the lines “Amortization of goodwill” and “Equity participation in losses of related
companies”, respectively in the Consolidated Statement of Income.
Business Structure
CIEN sells electricity in Argentina and Brazil. Because of the reduction in the maximum availability of the generation and
physical guarantee of energy and its associated power, the Company is focusing its business on a different compensation
structure that is not based on the purchase and sale of energy between the countries. Given the strategic importance of the
Company’s assets in the relations between Brazil and Argentina, the Brazilian government has been presented with a new
business plan model changing its selling activity to an electricity transmission activity with payment of a fixed
compensation, which is in the process of being approved. This presupposes integrating its transmission lines with the
Brazilian transmission grid operated by the Brazilian Government.
As in 2007, this year the Argentinean government formalized payment of usage charges with the Company for conveying
energy between the two countries. Management considers that this situation further emphasizes the importance of the
application made to the Brazilian government to approve the new business plan and considers that it will probably be
approved. The Company expects to have the business structure defined in 2009.
j) Impairment of investment accounted for under the equity-method
During the year ended December 31, 2007, the Company recorded an impairment charge of its investment in Inversiones
Gas Atacama Holding Limitada and subsidiaries, as the Company believes that the investment is other-than-temporary
impaired.
Gas Atacama Holding Limitada and its subsidiaries operate gas pipelines between Argentina and Chile, as well as power
generating thermoelectrical plants in the north of Chile.
In 2007, Gas Atacama’s subsidiary GasAtacama Generación S.A. (GAG), has been notified of the arbitration sentence in
its dispute with the electricity distribution companies Empresa Eléctrica de Arica S.A., Empresa
F-53
F-54
135
136
enersis08
ANNUAL REPORT
b) The detail of the net balance of negative goodwill as of December 31, 2007 and 2008 and the amortization expense for the years
ended December 31, 2006, 2007 and 2008 are as follows:
Note 12. Investments in other companies
Investments in other companies at December 31, 2007 and 2008 are as follows:
Company
Number
of shares
CDEC-SIC Ltda..............................................................
CDEC-SING Ltda...........................................................
Club de la Banca y Comercio ........................................
Club Empresarial ............................................................
Cooperativa Eléctrica de Chillán Ltda. ...........................
Electrificadora de la Costa S.A. ......................................
Electrificadora del Caribe ...............................................
Empresa Eléctrica de Aysén S.A. ...................................
Empresa Eléctrica de Bogotá S.A. ..................................
Financiera Eléctrica Nacional S.A. .................................
Dardanelos Participaçóes S.A.........................................
—
—
1
1
—
6,795,148
109,353,394
2,516,231
2,124,047
4,098
—
Percentage
owned
%
13.57%
7.69%
—
1.00%
—
0.14%
0.22%
6.70%
2.10%
0.10%
—
Total................................................................................
As of December 31,
2007
2008
ThCh$
ThCh$
191,485
303,133
2,060
23,455
16,531
92,999
1,224,017
2,533,354
20,519,723
112,064
3,055
173,225
303,133
3,267
26,744
16,531
—
1,549,119
2,533,354
25,071,539
—
2,723
25,021,876
29,679,635
Note 13. Goodwill and Negative Goodwill
Amortization
2007
ThCh$
As of December 31,
2008
ThCh$
2007
ThCh$
Net Balance
Company
2006
ThCh$
2008
ThCh$
Endesa Costanera S.A. (1) ............................
Emgesa S.A. (2)............................................
Edegel S.A. ...................................................
Hidroeléctrica El Chocón (1)........................
Inversiones Distrilima S.A............................
Synapsis Soluciones y Servicios IT Ltda......
3,016,162
2,063,958
1,981,209
—
27,282
19,614
2,717,462
105,638
1,721,696
227,284
23,709
19,615
3,218,905
189,540
2,407,115
356,437
27,886
19,615
(6,803,434)
(6,856,395)
(20,803,821)
(5,833,599)
(341,800)
(83,365)
(4,783,203)
(7,847,590)
(21,956,856)
(6,504,961)
(374,135)
(63,749)
Total..............................................................
7,108,225
4,815,404
6,219,498
(40,722,414)
(41,530,494)
(1) See Note 11 (g) v
(2) See Note 11 (g) iii
Note 14. Other Assets
Other assets as of each year end are as follows:
a) The detail of the net balance of goodwill as of December 31, 2007 and 2008 and the amortization expense for the years ended
December 31, 2006, 2007 and 2008 are as follows:
2006
ThCh$
Amortization
2007
ThCh$
As of December 31,
2008
ThCh$
2007
ThCh$
Net Balance
2008
ThCh$
Chilectra S.A. (formerly Elesur S.A.).........
Codensa S.A................................................
Edegel S.A. .................................................
Emgesa S.A.................................................
Empresa Eléctrica de Colina S.A................
Empresa Eléctrica Pangue S.A....................
Empresa Nacional de Electricidad S.A. ......
Gasoducto Atacama Chile S.A. (1).............
Inversiones Distrilima S.A..........................
(7,960,820)
(1,068,666)
(35,544)
(846,839)
(237,178)
(214,218)
(55,018,630)
(6,113)
(1,299)
(7,960,920)
(928,684)
(28,278)
(674,227)
(237,180)
(214,218)
(55,018,631)
(74,366)
(1,129)
(7,961,245)
(1,092,306)
(31,897)
(938,764)
(237,178)
(214,218)
(55,018,631)
—
(1,329)
96,309,267
9,132,057
306,341
7,301,241
2,075,308
3,124,012
579,987,159
—
7,907
88,348,021
9,648,696
323,671
7,648,856
1,838,131
2,909,794
524,968,527
—
7,971
Total............................................................
(65,389,307)
(65,137,633)
(65,495,568)
698,243,292
635,693,667
As of December 31,
2007
2008
ThCh$
ThCh$
Bond discount ..........................................................................................................................
Bond issuance cost...................................................................................................................
Unrealized losses from derivative contracts. ...........................................................................
Deferred expenses....................................................................................................................
Bank fees and interest expense ................................................................................................
Post-retirement benefits ...........................................................................................................
Security deposits for judicial obligations.................................................................................
Presumptive minimum earnings and taxes ..............................................................................
Reimbursable contributions .....................................................................................................
Deferred assets (Brazil) ...........................................................................................................
Others.......................................................................................................................................
14,247,168
4,261,561
61,208,045
995,099
7,178,041
3,170,745
68,284,644
45,808,941
728,943
64,836,078
3,923,864
13,776,034
6,066,906
10,252,473
1,204,000
6,984,439
2,607,105
69,497,711
44,930,819
504,407
62,566,704
5,639,975
Total.........................................................................................................................................
274,643,129
224,030,573
(1) During the year ended December 31, 2007, in addition to ordinary annual amortization of ThCh$5,613 (historical Chilean pesos)
the Company recorded goodwill impairment amounting to ThCh$62,675 (historical Chilean pesos) resulting in a complete
impairment of goodwill recorded over this investment. See Note 11 (j) for details.
F-55
F-56
ANNUAL REPORT
Note 15. Due to Banks and Financial Institutions
b) Current portion of long-term debt due to banks and financial institutions:
a) Short-term debt due to banks and financial institutions:
2008
ThCh$
Foreign currency
Other foreign currency
$Readjusted
2007
2008
2007
2008
ThCh$
ThCh$
ThCh$
ThCh$
—
—
15,280
—
—
—
4,936,278
—
—
—
—
—
964,512
—
—
342,088
1,328,185
—
—
—
—
8
—
—
2,630,286
—
—
—
—
172
—
7,096
—
2,213,299
—
575
22,012,676
—
—
—
—
—
—
12,827,084
—
—
—
—
—
1,046,049
—
—
—
1,309,268
—
—
—
404,811
103,491
—
—
1,295,995
—
3,321,777
—
—
—
—
—
—
2,621,179
—
—
—
6,363,553
10,788,395
—
50,956,292
—
13,405,527
12,230,555
—
4,842,201
—
—
36,119
—
6,921,960
201,712
—
1,214,202
—
1,178,699
971,731
2,492,078
—
—
—
—
—
11,241,564
—
5,428,547
—
—
—
1,484,657
14,617,053
—
—
5,960,754
—
—
—
56,470,611
—
—
26,351,898
—
—
—
2,988,088
4,617,885
—
—
—
—
1,789,678
—
1,418,233
35,526,681
59,000,056
—
—
969,551
—
9,268
14,405,765
—
—
—
—
—
—
3,657,322
—
—
1,250,527
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,453
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total ............................................................
34,450,455
22,929,654
150,335,599
208,455,563
Total principal.............................................
—
27,150,255
19,341,075
143,102,423
203,660,563
2007
ThCh$
ABN Amro Bank ........................................
Banco Av Villas..........................................
Banco Bayerische Landes...........................
Banco BBVA ..............................................
Banco BBVA Bhif ......................................
Banco Continental.......................................
Banco Crédito Perú .....................................
Banco Crédito e Inversiones .......................
Banco de Bogotá .........................................
Banco de Chile............................................
Banco de la Ciudad de Buenos Aires..........
Banco de la Nación Argentina ....................
Banco Provincia de Buenos Aires...............
Banco do Brasil...........................................
Banco do Nordeste do Brasil ......................
Banco Estado ..............................................
Banco Itaú ...................................................
Banco Itau (Chile).......................................
Banco Real ..................................................
Banco Safra.................................................
Banco Santander Central Hispano ..............
Banco Santander Santiago ..........................
Banco Security............................................
Bank Votorati..............................................
Bladex .........................................................
Bradesco......................................................
Citibank N.A...............................................
Citibank (Agencia Chile) ............................
Colmena ......................................................
Comafi.........................................................
Corpbanca ...................................................
Deutsche Bank ............................................
Interbank .....................................................
Scotiabank — Perú .....................................
Scotiabank — Chile ....................................
Standard Bank.............................................
Unibanco .....................................................
Weighted average annual interest rate ........
US$
9.20%
6,79%
9.94%
13.21%
Ch$
2007
ThCh$
2008
ThCh$
As of December 31,
2007
2008
ThCh$
ThCh$
—
—
—
—
2
—
—
5,010,466
—
10,003,231
—
—
—
—
—
2,075,851
—
10,337,900
—
—
—
1,269,549
56,683
—
—
—
—
35
—
—
12,373,026
—
—
—
6,713,751
—
—
6,363,553
10,788,395
15,280
50,956,292
5
13,405,527
17,166,833
9
4,842,201
11
—
36,119
964,512
6,921,960
201,712
344,598
2,542,387
—
1,178,699
971,731
2,492,078
9,137
1
—
2,630,286
—
11,241,564
—
5,428,547
172
—
7,096
1,484,657
16,830,352
4
575
27,973,430
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
90
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5
—
—
9
—
11
—
—
—
—
—
2,510
—
—
—
—
—
4,676
1
—
—
—
—
—
—
—
—
—
—
—
4
—
—
4,453
90
7,216
47,840,494
184,797,723
279,225801
—
—
—
46,570,952
—
170,252,678
269,572,590
0.30%
—
—
9.73%
11.10%
Percentage of debt in foreign currency: ........................................
Percentage of debt in local currency:............................................
99.99%
0.01%
82.87%
17.13%
Total..............................................................................................
100.00%
100.00%
Foreign currency
Other foreign currency
2007
2008
ThCh$
ThCh$
As of December 31
2007
2008
ThCh$
ThCh$
3,987,270
—
3,688,356
12,717,897
1,591,666
60,507
—
—
—
5,937,297
1,911,982
2,187,304
—
1,367,064
3,270,303
—
7,723,912
—
—
9,581,957
—
—
2,734,128
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
361,986
—
2,671,550
10,655,715
10,940,074
1,021,538
2,385,671
4,325,670
—
—
—
2,182,005
—
—
568,686
3,041,596
3,141,715
—
—
38,673,729
1,175,976
—
—
1,283,248
—
1,076,528
—
—
771,146
2,509,810
5,438,284
—
4,012
—
2,523,313
—
—
10,482,222
3,392,442
5,354,867
—
—
29,265,217
21,424,394
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
38,141
361,986
672,902
2,792,512
12,274,120
10,940,074
1,021,538
2,385,671
4,325,670
5,419,179
—
20,923
2,182,005
13,077
3,494,019
568,686
3,204,223
3,141,715
2,229,889
111,541
39,928,560
1,175,976
26,153
3,987,270
1,283,248
3,688,356
13,794,425
1,591,666
60,507
771,146
2,509,810
5,438,284
5,937,297
1,915,994
2,187,304
2,523,313
1,367,064
3,270,303
10,482,222
11,116,354
5,354,867
—
9,581,957
29,265,217
21,424,394
2,734,128
120,962
5,536,453
—
4,659,830
5,540,949
26,153
1,831,457
76,282
38,141
4,512,885
301,452
26,153
91,538
3,963,075
3,252,089
—
—
142,838
12,661,640
19,011,159
—
10,921,057
18,637,341
2,734,128
1,965,537
7,974,540
3,987,270
6,365,639
176,238
2,734,128
9,569,449
4,587,929
7,484,652
244,006
—
10,334,519
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
374,583
—
—
—
—
—
9,126,761
—
937,822
3,931,505
—
—
—
—
—
—
—
—
418,494
—
—
—
—
—
—
—
21,617,710
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
35
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
120,962
5,536,453
35
4,659,830
5,540,949
26,153
1,831,457
450,865
38,141
4,512,885
301,452
26,153
91,538
13,089,836
3,252,089
937,822
3,931,505
142,838
12,661,640
19,011,159
—
10,921,057
18,637,341
2,734,128
1,965,537
8,393,034
3,987,270
6,365,639
176,238
2,734,128
9,569,449
4,587,929
7,484,652
21,861,716
—
10,334,519
Total ..................................................................
45,302,906
176,148,875
—
—
95,516,582
105,561,687
—
—
35
—
140,819,523
281,710,562
Total principal...................................................
44,102,991
168,723,490
—
—
87,136,214
98,391,693
—
—
—
—
131,239,205
267,115,183
0.00%
0.00%
0.00%
—
0.30%
—
9.93%
12.70%
2008
ThCh$
$no Readjusted
2007
2008
ThCh$
ThCh$
38,141
—
672,902
120,962
1,618,405
—
—
—
—
5,419,179
—
20,923
—
13,077
3,494,019
—
162,627
—
2,229,889
111,541
1,254,831
—
26,153
5.10%
2007
ThCh$
Ch$
ABN Amro Bank ..............................................
Banco Alfa ........................................................
Banco Bayerische Landes.................................
Banco BBVA ....................................................
Banco Continental.............................................
Banco de Crédito (Perú)....................................
Banco Davivienda.............................................
Banco do Brasil.................................................
Banco do Nordeste do Brasil ............................
Banco Europeo de Investimentos......................
Banco Itau .........................................................
Banco Itau (Chile).............................................
Banco Medio Crédito........................................
Banco Monte Paschi .........................................
Banco Nacionale de Paris .................................
Banco Pactual....................................................
Banco Santander Central Hispano ....................
Bancolombia .....................................................
Banesto..............................................................
Bank of Tokyo — Mitsubishi ...........................
BNDES .............................................................
Bradesco............................................................
Caja de ahorros de Galicia ................................
Caja de Ahorros y Monte de Piedad de
Madrid ........................................................
Citibank N.A.....................................................
Citibank (Agencia en Chile) .............................
Credit Suisse First Boston.................................
Deutsche Bank A.G. .........................................
Dresdner............................................................
Export Develop. Corp. ......................................
HSBC ................................................................
Instituto Crédito Oficial ....................................
International Finance Corporation ....................
Kreditanstal Fur Weideraubau ..........................
The Bank of Nova Scotia..................................
Sao Paulo (USA)...............................................
Scotiabank.........................................................
Standard Bank...................................................
Unibanco ...........................................................
Votorantim ........................................................
West LB, New York Branch.............................
8.44%
2008
ThCh$
Euros
2007
2008
ThCh$
ThCh$
2007
ThCh$
Weighted average annual interest rate ..............
As of December 31,
2007
2008
%
%
F-57
3.97%
—
—
—
56,470,611
2
—
39,178,982
5,010,466
—
10,003,231
2,988,088
4,617,885
1,046,049
—
—
2,075,851
3,098,946
10,337,900
1,418,233
35,526,681
59,404,867
1,373,130
56,683
969,551
1,295,995
9,268
17,727,542
35
—
—
12,373,026
—
—
6,278,501
6,713,751
—
1,250,527
US$
9.45%
7.95%
As of December 31,
2008
2007
%
%
Percentage of debt in foreign currency: .....................................................................................
Percentage of debt in local currency:.........................................................................................
100.00%
—
100.00%
—
Total...........................................................................................................................................
100.00%
100.00%
F-58
137
138
enersis08
ANNUAL REPORT
Note 16. Long-Term Portion of Debt Due to Banks and Financial Institutions
Financial
Institution
Banco Abn Amro Bank...........................
Banco Alfa ..............................................
Banco Bayerische Landes.......................
Banco BBVA ..........................................
Banco Continental...................................
Banco Crédito Perú .................................
Banco Estado ..........................................
Banco Europeo de Investimentos............
Banco Davivienda...................................
Banco do Brasil.......................................
Banco do Nordeste do Brasil ..................
Banco Itau (Chile)...................................
Banco Itau ...............................................
Banco Medio Crédito..............................
Banco Monte Paschi ...............................
Banco Nacionale de Paris .......................
Banco Pactual..........................................
Bancolombia ...........................................
Banco Santander Central Hispano ..........
Banco Votorantim...................................
Banesto N.Y. Branch ..............................
Bank Tokio — Mitsubishi ......................
BNDES ...................................................
Bradesco..................................................
Caja de Ahorros de Galicia .....................
Caja de Ahorros y Monte de Piedad de
Madrid ..............................................
Citibank N.Y...........................................
Credit Swiss First Boston........................
Deutsche Bank A.G. ...............................
Dresdner..................................................
Export Develop. Corp. ............................
HSBC ......................................................
Ing Bank..................................................
Instituto de Crédito Oficial .....................
International Finance Corporation ..........
Kreditanstalf Fur Weideraubau...............
Sao Paulo (USA).....................................
Scotiabank...............................................
Standard Bank.........................................
The Royal Bank of Scotland ...................
The Bank of Nova Scotia........................
Unibanco .................................................
West LB AG, New York Branch ............
Totales.....................................................
Currency
After 1 year
but within
2 years
ThCh$
After 2 years
After 3 years
After 5 years
but within
but within
but within
3 years
5 years
10 years
ThCh$
ThCh$
ThCh$
After 10 years
Years
ThCh$
Total
Long-term
Portion
2008
ThCh$
Annual
interest
rate
average
Total
long-term
portion 2007
ThCh$
US$
Rs
US$
US$
$Col
US$
Soles
US$
Soles
US$
US$
$Col
US$
Rs
Rs
US$
US$
Rs
$Arg
US$
US$
Rs
$Col
US$
$Col
Rs
Rs
US$
US$
Rs
Rs
US$
6,629,688
2,723,363
—
19,889,063
—
4,291,045
11,951,162
7,637,400
14,667,575
—
5,303,750
—
187,568
3,046,223
10,380,816
—
3,818,700
727,138
2,510,735
—
1,041,278
—
—
14,374,311
—
27,233,589
—
—
15,911,250
35,476,099
727,138
—
—
2,723,363
—
—
—
7,556,887
—
11,456,100
—
8,751,187
5,303,750
—
187,568
3,237,879
10,380,816
—
4,297,698
1,454,276
1,255,233
—
13,770,278
—
—
21,480,187
—
65,360,615
—
6,364,500
21,480,188
28,256,636
12,347,729
—
—
13,616,816
—
—
23,404,940
—
—
—
—
—
5,303,750
8,949,497
226,494
33,709,391
19,736,699
—
—
1,454,276
—
—
2,082,556
—
27,522,189
—
26,646,842
70,807,333
—
—
—
22,251,388
17,794,456
—
—
—
—
37,550,550
—
—
—
—
—
—
—
—
47,185
713,640
5,310,558
—
—
—
—
—
2,082,555
—
—
21,002,850
—
—
—
15,911,250
21,002,850
7,635,429
—
—
—
—
—
—
—
—
—
—
—
—
—
—
16
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,764,178
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,629,688
19,063,542
—
57,439,613
23,404,940
11,847,932
11,951,162
19,093,500
14,667,575
8,751,187
15,911,250
8,949,497
2,412,993
40,707,133
45,808,889
—
8,116,398
3,635,690
3,765,968
—
18,976,667
—
27,522,189
56,857,348
26,646,842
163,401,537
—
22,275,750
58,394,288
93,619,552
30,869,323
—
1.96%
13.34%
—
1.96%
12.13%
3.97%
6.50%
5.19%
8.34%
1.96%
18.33%
12.13%
4.13%
14.32%
7.69%
—
7.05%
13.55%
1.75%
—
3.29%
—
12.13%
2.02%
12.13%
14.80%
—
1.96%
1.96%
14.42%
13.50%
—
9,807,677
21,384,097
3,124,929
30,775,813
22,159,071
11,426,419
—
—
—
4,873,401
18,037,107
8,473,106
2,233,396
46,027,058
48,626,821
4,328,908
8,116,698
4,078,253
5,420,564
2,705,566
15,066,838
10,225,172
26,057,081
31,227,743
25,228,247
183,293,442
30,548,710
3,544,292
35,500,408
71,859,534
24,296,982
5,411,133
US$
US$
US$
US$
US$
US$
US$
Rs
US$
US$
US$
US$
US$
US$
US$
US$
US$
Rs
US$
10,342,312
19,889,062
2,727,643
12,728,894
—
1,373,295
13,259,375
—
25,458,000
6,629,688
13,750,516
—
15,911,250
9,164,880
7,425,143
—
6,364,500
1,799,594
—
—
21,480,188
—
13,259,482
—
16,822,458
—
20,425,225
—
12,729,000
7,632,135
—
—
2,291,220
13,259,482
6,364,500
—
1,448,829
—
—
—
—
—
—
1,822,416
—
20,425,225
—
—
16,965,519
—
—
—
—
—
—
1,448,829
—
31,822,500
—
—
—
—
911,208
—
—
—
—
22,045,801
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
42,164,812
41,369,250
2,727,643
25,988,376
—
20,929,377
13,259,375
40,850,450
25,458,000
19,358,688
60,393,971
—
15,911,250
11,456,100
20,684,625
6,364,500
6,364,500
4,697,252
—
1.96%
1.96%
8.55%
7.72%
—
2.47%
1.96%
13.25%
1.96%
1.96%
7.86%
—
1.96%
3.08%
9.19%
1.96%
1.96%
13.63%
—
28,016,136
48,148,928
11,595,282
38,513,157
5,411,132
14,687,627
19,615,353
45,823,065
7,359,140
16,896,260
57,179,974
148,004
23,538,425
13,636,053
23,899,076
3,544,292
7,250,917
28,144,700
8,657,810
335,352,043
341,377,409
314,168,616
166,036,376
1,764,178
1,158,698,622
1,115,923,797
As of December 31,
2007
2008
%
%
Percentage of debt in foreign currency: .....................................................................................
Percentage of debt in local currency:.........................................................................................
100.00%
—
100.00%
—
Total...........................................................................................................................................
100.00%
100.00%
F-59
In November 2004 the Company obtained a syndicated loan of US$350 million through a revolving credit agreement, with a
maturity in November 2009. The outstanding amount at the end of 2008 was US $150 million. The spread depends on the
corporate rate provided by S&P. At December 31, 2008 the risk rating is BBB and the current spread is 0.375%. On December 7,
2006 Enersis signed a new revolving loan for US $200 million maturing on December 7, 2009 with a spread over Libor of
0,250%. This second revolving facility has not been used.
On November 5, 2004, Endesa Chile entered into a revolving facility of US $250 million, which matures on November 11, 2010,
and has a 0.375% spread over Libor, which had been completely drawn as of December 31, 2008.
On January 26, 2006, Endesa Chile entered into a second revolving facility for US $200 million, which matures on July 26, 2011
and has a 0.300% spread over Libor. This facility has also been completely drawn as of December 31, 2008.
On December 7, 2006 Endesa Chile signed a new revolving loan for US $200 million, due on December 7, 2009 with a spread
of 0,250% over Libor. As of December 31, 2008, no withdrawals have been made from this facility.
On June 16, 2008, Endesa Chile subscribed a fourth loan, with 50% fixed term and 50% revolving facility, totaling US$400
million and maturing on June 16, 2014, with a spread of 0.750% above Libor. US $200 million of this loan had been drawn as of
December 31, 2008.
The revolving credits of Enersis and Endesa Chile may be paid down and drawn at any moment prior to expiration.
These transactions were all unsecured facilities governed by the laws of the State of New York.
Note 17. Other Current Liabilities
Other current liabilities are as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Advances and guarantee on construction..........................................................................
Taxes payables..................................................................................................................
Contingencies - third party claims ....................................................................................
Reimbursable contributions ..............................................................................................
Energy efficiency program (Brazil) ..................................................................................
Azopardo provision...........................................................................................................
Accrued employees benefits - other..................................................................................
Derivative contracts ..........................................................................................................
Fair value - derivative contracts........................................................................................
Emergency energy provision (Brazil and Argentina) .......................................................
Obligations of payment to third parties.............................................................................
Advances from clients.......................................................................................................
Other current liabilities .....................................................................................................
87,090
3,248,032
56,594,003
1,227,055
34,964,723
915,178
2,889,173
11,855,256
4,847,824
21,747,107
1,287,788
1,829,977
2,492,384
100,349
5,608,305
71,368,086
1,366,907
34,759,803
1,982,602
4,827,046
7,747,989
9,918
15,189,951
—
3,465,585
1,044,419
Total..................................................................................................................................
143,985,590
147,470,960
F-60
ANNUAL REPORT
Note 18. Bonds Payable
a) Details of the short-term portion of bonds payable is as follows:
Instrument
Bond N°269 – Enersis
Bond N°269 – Enersis
Yankee Bonds – Enersis
Yankee Bonds – Enersis
Yankee Bonds II – Enersis
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Edesur
Bonos Ampla
Bonos Ampla
Bonos Ampla
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Series
B-1
B-2
Two
Three
One
One
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
II° Prog
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
III° Prog
III° Prog
III° Prog.
III° Prog.
III° Prog
III° Prog
III° Prog.
III° Prog.
III° Prog
III° Prog.
III° Prog.
B3
B5
B8
A
B
C
D
E-F
Seven
1° Serie
2°Serie
Unit
F
H
K
M
One
Two
Three
One
One
144A
144A
5 A 2° issue
6 A 2° issue
6 B 2° issue
7 A 2° issue
8 A 2° issue
8 B 2° issue
Face value
outstanding
10,026
1,776,703
249,734,000
858,000
350,000,000
4,891,900
30,000,000
20,000,000
20,000,000
20,000,000
20,000,000
40,000,000
30,000,000
30,000,000
20,000,000
4,000,000
18,000,000
20,000,000
27,200,000
19,250,000
15,000,000
15,000,000
15,000,000
20,000,000
20,000,000
40,000,000
15,000,000
40,000,000
30,000,000
30,000,000
20,000,000
20,000,000
25,000,000
25,000,000
20,000,000
30,000,000
13,000,000
15,465,000
50,000,000,000
200,000,000,000
250,000,000,000
224,780,000,000
391,500,000,000
33,720,000
109,000,000,000
161,000,000,000
165,000,000
290,000,000
110,000,000
370,000,000
1,500,000
4,000,000
4,000,000
10,000,000
205,881,000
220,000,000
40,416,000
400,000,000
400,000,000
400,000,000
200,000,000
10,000,000
30,000,000
20,000,000
10,000,000
22,370,000
25,700,000
Currency
Interest
rate
%
Maturity
date
U.F.
U.F.
US$
US$
US$
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Arg
Reales
Reales
Reales
U.F.
U.F.
U.F.
U.F.
US$
US$
US$
US$
US$
US$
US$
US$
Soles
Soles
US$
Soles
Soles
5.50%
5.75%
7.40%
6.60%
7.38%
9.61%
5.86%
6.25%
VAC + 5,4%
8.56%
VAC + 6,5%
VAC + 6,5%
7.38%
8.75%
7.31%
7.84%
8.16%
7.06%
8.00%
6.63%
6.75%
7.56%
6.66%
5.69%
5.91%
5.97%
7.22%
6.94%
6.56%
6.84%
5.94%
6.28%
6.81%
7.13%
7.50%
7.72%
8.31%
8.25%
12.42%
13.63%
13.82%
12.12%
12.80%
12.37%
12.06%
12.56%
11.75%
CDI+1,2% aa
IGP-M+11,4%
DI + 0,85% aa
6.20%
6.20%
3.80%
4.75%
7.88%
7.33%
8.13%
7.75%
8.50%
8.35%
8.63%
3.75%
5.88%
8.50%
4.94%
6.00%
6.47%
6-15-2009
6-15-2022
12-1-2016
12-1-2026
12-1-2014
2-1-2011
1-16-2008
1-16-2012
4-22-2014
6-9-2009
6-9-2014
6-24-2014
6-10-2010
6-10-2015
1-5-2011
1-5-2013
1-5-2016
2-1-2011
2-1-2016
3-17-2009
5-22-2009
5-22-2013
10-6-2013
4-19-2012
4-19-2015
7-6-2012
8-31-2016
8-29-2015
9-12-2012
1-10-2013
3-1-2011
3-1-2013
6-13-2014
6-13-2016
7-11-2011
7-11-2013
12-11-2012
12-11-2011
3-15-2009
3-15-2011
3-15-2014
3-14-2010
3-14-2017
3-14-2012
3-11-2010
3-11-2013
6-19-2012
3-1-2028
3-1-2010
8-1-2012
8-1-2022
10-15-2028
4-15-2027
12-15-2029
2-1-2027
2-1-2037
2-1-2097
7-15-2008
4-1-2009
8-1-2013
8-1-2015
1-26-2009
2-27-2008
6-18-2008
7-26-2009
3-10-2008
3-30-2008
F-61
As of December 31,
2007
2008
ThCh$
ThCh$
209,293
1,879,653
833,329
2,554
6,401,764
7,006
5,561,057
101,305
39,986
18,043
14,731
8,403
22,200
26,340
128,404
27,546
128,897
105,589
162,663
65,902
19,304
21,626
42,077
40,518
42,077
208,418
65,190
168,458
106,674
—
—
—
—
—
—
—
—
—
77,886
349,146
443,148
302,527
548,131
48,860
—
—
110,926
91,912,633
3,536,648
5,357,974
1,456,673
1,087,466
670,384
—
3,669,749
3,633,349
837,824
224,133,600
4,599,462
7,530,493
3,889,251
86,804
5,525,275
3,621,264
165,628
4,112,986
4,715,218
109,226
1,985,960
969,422
3,003
7,529,668
7,534
—
4,167,512
55,765
4,074,070
17,647
10,067
24,914
29,559
—
—
—
118,497
182,548
3,975,760
3,062,029
24,270
47,221
45,472
47,221
224,764
73,159
189,052
119,714
196,515
80,900
85,584
16,301
17,049
142,728
220,337
11,560
13,649
14,284,446
436,859
560,258
380,180
701,558
58,350
214,558
341,374
119,047
—
3,517,307
5,880,379
1,445,988
1,091,714
673,003
419,648
4,299,519
144,292,497
870,822
—
259,989,824
8,857,263
4,574,484
6,466,597
—
—
6,498,945
—
—
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Total
9 A 2° issue
10 A 2° issue
11 A 2° issue
13 A 2° issue
14 A 2° issue
15 A 2° issue
13 B 2° issue
14 B 2° issue
1° issue Serie A
2° issue Serie A
3° issue Serie A
4° issue Serie A
5° issue Serie A
6° issue Serie A
7° issue Serie A
8° issue Serie A
9° issue Serie A
10° issue SerieA
B-10 1° issue
B-10 1° issue
C-10 1° issue
C-10 1° issue
A-10 3° issue
A-10 3° issue
B-10 4° issue
B 1° issue
70,000,000
35,000,000
20,000,000
25,000,000
25,000,000
30,000,000
25,000,000
25,000,000
25,000,000
8,000,000
25,000,000
25,000,000
25,000,000
25,000,000
25,000,000
10,000,000
28,300,000
9,720,000
229,825,000,000
60,000,000,000
9,684,517,481
17,235,158,229
210,000,000,000
40,000,000,000
170,000,000,000
400,000,000,000
Soles
Soles
US$
Soles
Soles
Soles
Soles
Soles
Soles
US$
Soles
Soles
Soles
Soles
Soles
US$
Soles
US$
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
6.91%
6.72%
6.06%
6.47%
6.09%
6.16%
6.16%
5.91%
6.31%
5.97%
6.28%
6.75%
6.50%
6.44%
6.63%
6.34%
6.59%
9.00%
12.73%
13.49%
10.25%
10.25%
13.15%
13.15%
13.28%
14.73%
6-1-2009
10-21-2010
11-18-2012
10-20-2013
10-21-2010
11-27-2011
1-15-2014
2-22-2011
6-21-2022
7-18-2011
7-3-2019
8-31-2014
3-18-2013
5-21-2013
6-13-2013
1-25-2028
3-7-2014
11-12-2014
10-9-2009
11-10-2009
10-9-2009
10-9-2009
2-23-2015
2-23-2015
2-20-2017
11-10-2011
72,738
81,378
76,545
56,775
48,135
30,567
127,362
94,790
7,123
116,270
139,399
81,248
83,944
32,286
14,952
—
—
—
1,606,953
247,163
112,160
60,735
621,777
118,434
4,270,761
1,627,978
14,260,949
91,298
90,031
63,696
54,003
34,293
142,888
106,345
7,992
136,757
156,392
91,153
93,263
35,316
16,775
173,836
118,646
74,237
4,840,736
17,332,484
5,491,591
65,264,107
778,697
148,323
5,544,669
2,260,188
398,611,785
611,261,962
139
140
enersis08
ANNUAL REPORT
Details of the long-term portion of bonds payable is as follows:
Instrument
Bond N° 269 - Enersis
Bond N° 269 - Enersis
Yankee Bonds - Enersis
Yankee Bonds - Enersis
Yankee Bonds II - Enersis
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Edelnor
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Codensa
Bonds Edesur
Bonds Ampla
Bonds Ampla
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Series
B-1
B-2
Two
Three
One
One
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
I° Prog.
II° Prog.
II° Prog..
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
II° Prog.
III° Prog
III° Prog
III° Prog
III° Prog.
III° Prog.
III° Prog
III° Prog
III° Prog.
III° Prog.
III° Prog
III° Prog.
B3
B5
B8
A
B
C
D
E
F
Seven
2°Serie
Unit
F
H
K
M
One
Two
Three
Unit
144A
144A
5 A 2° issue
7 A 2° issue
9 A 2° issue
10 A 2° issue
11 A 2° issue
13 A 2° issue
14 A 2° issue
15 A 2° issue
13 B 2° issue
14 B 2° issue
1° issue Serie A
Face value
outstanding
10,026
1,776,703
249,734,000
858,000
350,000,000
4,891,900
20,000,000
20,000,000
20,000,000
20,000,000
40,000,000
30,000,000
30,000,000
20,000,000
4,000,000
18,000,000
20,000,000
27,200,000
19,250,000
15,000,000
15,000,000
15,000,000
20,000,000
20,000,000
40,000,000
15,000,000
40,000,000
30,000,000
30,000,000
20,000,000
20,000,000
25,000,000
25,000,000
20,000,000
30,000,000
13,000,000
15,465,000
50,000,000,000
200,000,000,000
250,000,000,000
224,780,000,000
391,500,000,000
33,720,000
109,000,000,000
85,500,000,000
75,500,000,000
165,000,000
110,000,000
370,000,000
1,500,000
4,000,000
4,000,000
10,000,000
105,881,000
220,000,000
40,416,000
400,000,000
400,000,000
200,000,000
10,000,000
10,000,000
70,000,000
35,000,000
20,000,000
25,000,000
25,000,000
30,000,000
25,000,000
25,000,000
25,000,000
Currency
Interest
rate
Maturity
date
U.F.
U.F.
US$
US$
US$
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
Soles
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Arg
Reales
Reales
U.F.
U.F.
U.F.
U.F.
US$
US$
US$
US$
US$
US$
US$
US$
Soles
Soles
US$
Soles
Soles
Soles
Soles
Soles
Soles
5.50%
5.75%
7.40%
6.60%
7.38%
9.61%
6.25%
VAC + 5,4%
8.56%
VAC + 6,5 %
VAC + 6,5 %
7.38%
8.75%
7.31%
7.84%
8.16%
7.06%
8.00%
6.63%
6.75%
7.56%
6.66%
5.69%
5.91%
5.97%
7.22%
6.94%
6.56%
6.84%
5.94%
6.28%
6.81%
7.13%
7.50%
7.72%
8.31%
8.25%
12.42%
13.63%
13.82%
12.12%
12.80%
12.37%
12.06%
12.56%
13.48%
11.75%
IGP-M+11,4%
DI + 0,85% aa
6.20%
6.20%
3.80%
4.75%
7.88%
7.33%
8.13%
8.50%
8.35%
8.63%
3.75%
4.94%
6.91%
6.72%
6.06%
6.47%
6.09%
6.16%
6.16%
5.91%
6.31%
6-15-2009
6-15-2022
12-1-2016
12-1-2026
12-1-2014
2-1-2011
1-16-2012
4-22-2014
6-9-2009
6-9-2014
6-24-2014
6-10-2010
6-10-2015
1-5-2011
1-5-2013
1-5-2016
2-1-2011
2-1-2016
3-17-2009
5-22-2009
5-22-2013
10-6-2013
4-19-2012
4-19-2015
7-6-2012
8-31-2016
8-29-2015
9-12-2012
1-10-2013
3-1-2011
3-1-2013
6-13-2014
6-13-2016
7-11-2011
7-11-2013
12-11-2012
12-11-2011
3-15-2009
3-15-2011
3-15-2014
3-14-2010
3-14-2017
3-14-2012
3-11-2010
3-11-2013
3-11-2013
6-19-2012
3-1-2010
8-1-2012
8-1-2022
10-15-2028
4-15-2027
12-15-2029
2-1-2027
2-1-2037
2-1-2097
4-1-2009
8-1-2013
8-1-2015
1-26-2009
7-26-2009
6-1-2009
10-21-2010
11-18-2012
10-20-2013
10-21-2010
11-27-2011
1-15-2014
2-22-2011
6-21-2022
F-63
As of December 31,
2007
2008
ThCh$
ThCh$
108,556
37,060,075
135,134,366
464,276
189,389,624
883,535
3,612,237
3,893,106
5,418,358
3,884,982
7,756,474
5,418,358
3,612,237
3,612,237
722,447
3,251,015
3,612,237
4,912,643
3,476,780
2,709,178
2,709,178
2,709,178
3,612,237
3,612,237
7,224,476
2,709,178
7,224,476
5,418,358
—
—
—
—
—
—
—
—
—
13,428,726
53,714,905
67,143,631
60,370,182
105,146,927
9,056,333
—
—
—
28,321,548
37,757,841
113,031,044
31,412,543
85,476,307
85,476,307
—
111,404,929
119,044,906
21,869,630
216,445,284
216,445,284
108,222,641
5,411,131
5,411,131
12,638,614
6,319,307
10,822,264
4,513,791
4,513,791
5,416,549
4,513,791
4,513,791
4,513,791
—
35,306,809
158,943,205
546,074
222,757,500
991,545
—
4,663,880
—
4,654,146
9,292,133
6,080,732
6,080,732
4,053,822
810,764
3,648,439
4,053,822
5,513,197
—
—
3,040,366
3,040,366
4,053,822
4,053,822
8,107,644
3,040,366
8,107,644
6,080,732
6,080,732
4,053,822
4,053,822
5,067,277
5,067,277
4,053,822
6,080,732
2,634,984
3,134,618
—
56,734,965
70,918,706
63,764,427
111,058,694
9,565,515
30,920,556
24,254,198
21,417,450
30,394,862
36,995,835
100,764,442
30,891,701
85,810,280
85,810,280
214,525,700
131,032,962
—
25,722,763
—
254,580,000
127,290,000
—
—
—
7,089,672
12,729,000
5,064,052
5,064,052
6,076,862
5,064,052
5,064,052
5,064,052
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
2° issue Serie A
3° issue Serie A
4° issue Serie A
5° issue Serie A
6° issue Serie A
7° issue Serie A
8° issue Serie A
9° issue Serie A
10° issue SerieA A
B-10 1° issue
B-10 1° issue
C-10 1° issue
C-10 1° issue
A-10 1° issue
A-10 3° issue
B-10 4° issue
B 1° issue
8,000,000
25,000,000
20,000,000
25,000,000
25,000,000
25,000,000
10,000,000
28,300,000
9,720,000
229,825,000,000
60,000,000,000
9,684,517,481
17,235,158,229
210,000,000,000
40,000,000,000
170,000,000,000
400,000,000,000
US$
Soles
Soles
Soles
Soles
Soles
US$
Soles
US$
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
Total
5.97%
6.28%
6.75%
6.50%
6.44%
6.63%
6.34%
6.59%
9.00%
12.73%
13.49%
10.25%
10.25%
13.15%
13.15%
13.28%
14.73%
7-18-2011
7-3-2019
8-31-2014
3-18-2013
5-21-2013
6-13-2013
1-25-2028
3-7-2014
11-12-2014
10-9-2009
11-10-2009
10-9-2009
10-9-2009
2-23-2015
2-23-2015
2-20-2017
11-10-2011
4,328,902
4,513,791
3,611,033
4,513,791
4,513,791
4,513,791
—
—
—
61,725,141
16,114,471
2,706,341
4,719,100
56,400,651
10,742,981
45,657,669
107,429,932
5,091,600
5,064,052
4,051,240
5,064,052
5,064,052
5,064,052
6,364,500
5,732,505
6,186,293
—
—
—
—
59,571,713
11,346,993
48,224,720
113,470,139
2,338,000,343
2,391,113,689
*
VAC (“Valor de activación constante”) is issued by the Banco Central de Reserva del Perú and calculated based in the
inflation rate (represents an inflation - indexed new Peruvian Sol).
Year
2007 ..................
2008 ..................
%
6.52
6.96
ANNUAL REPORT
b) Bonds payable consist of the following:
1.3 Yankee Bonds II
1.1 Domestic Bonds
On September 11, 2001, the Superintendence of Securities and Insurance registered the issue of adjustable bearer bonds of
Enersis dated June 14, 2001 in the Securities Register under No. 269. This placement was made in two series, as follows:
Total amount
In UF
Tranche
B1.......................................................................
B1.......................................................................
B2.......................................................................
B2.......................................................................
No. of bonds
per series
1,000,000
3,000,000
1,000,000
1,500,000
1,000
300
1,000
150
Face value
In UF
On November 24, 2003, the Company, through its former Cayman Islands Branch, issued Yankee Bonds registered with
the SEC for US$350 million. This issuance was made in a single tranche, as follows:
Total amount
in US$
Series
1 .............................................................................
1,000
10,000
1,000
10,000
The scheduled maturity of the Series B-1 bonds is 8 years, with no grace period; interest and principal are payable semiannually. Annual interest is 5.5%, compounded semi-annually.
Years to
Maturity
350,000,000
Stated annual
interest rate
10
7.375 %
Interest is paid semi-annually and amortization of capital is a single installment at the end of the term.
During the second half of 2004, debts have been re-denominated through US$/UF swap contracts for the total of this
issuance.
1.4 Chilectra S.A. Bonds
The scheduled maturity of the Series B-2 bonds is 21 years, principal payments beginning after 5 years, interest and
principal payable semi-annually. Annual interest is 5.75%, compounded semi-annually.
On October 13, 2003, Chilectra S.A. registered, in the Superintendence of Securities and Insurance, 2 tranches of bonds
corresponding to Nº 347 and 348 for a maximum line amount of UF 4,200,000 and UF 4,000,000 respectively. This bonds
have not yet been issued.
1.2 Yankee Bonds
1.5 Edelnor Bonds (Subsidiary of Distrilima S.A.)
On November 21, 1996, the Company, acting through its former branch in the Cayman Islands, issued Yankee Bonds for
US$800 million registered in the SEC. This issuance was made in three tranches, as follows:
As of December 31, 2008 the current obligations are as follows:
Total amount
in US$
Tranche
1 .........................................................................
2 ........................................................................
3 ........................................................................
300,000,000
350,000,000
150,000,000
Years to
maturity
Stated annual
interest rate
10
20
30
6.90%
7.40%
6.60%
Interest is payable on a semi-annual basis and principal is due upon maturity. The tranche 3 bond holders had a put option
in 2003, which was exercised by nearly all holders in November 2003 for US$149,142,000.
During the second quarter of 2004, UF/US$swap contracts were entered into for US$100,000,000 associated with the
series the tranche 1 bond and US$250,000,000 associated with tranche 2.
During November, 2006 US$300 million from series one of the Yankee Bonds were paid off. This operation meant
liquidating swap for US$100 million associated with this bond.
During November, 2001, Enersis Internacional a wholly-owned subsidiary of Enersis made a tender offer for total or
partial cash purchase of the tranche 2 Yankee Bonds, with a par value of ThUS$350,000 maturing at 20 years in 2016.
As a result of this offer, tranche 2 bonds with par value of of ThUS$100,266 were bought in the amount of ThUS$95,536.
As a result of the liquidation of Enersis Internacional S.A. on September 21, 2006, the parent Enersis S.A. was allocated
its assets and liabilities, which included such bonds among its assets.
First issuance
Date of Issuance
Number of bonds subscribed
Face value
Redemption term
Interest rate
Interest payment
Principal amortization
: March 1, 1996
: 48,919 bonds.
: S/. 100 (100 new soles) each
: 15 years
: 9.61% annual
: Annually, on coupon maturity
: Amortization of total principal upon maturity
First program of Corporate Bonds Eighth issuance
Date of issuance
: January 16, 2004.
: 4,000 bonds.
Face value
: 5,000 (new soles) each.
Term
: 8 years.
Interest rate
: 6.25%.
Interest payment
: Semi-annual.
Ninth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: April 22, 2004.
: 4,000 bonds.
: 10 years.
: VAC + 5.4%.
: Semi-annual.
Given the above, as of December 31, 2008 the bonds are presented net of the repurchase.
F-65
F-66
141
142
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ANNUAL REPORT
Tenth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 9, 2004.
: 4,000 bonds.
: 5 years.
: 8.56%.
: Semi-annual.
Second issuance
Date of Issuance
Face value
Redemption term
Interest rate
Interest payment
: January 5, 2006
: 800 bonds
: 5,000 (new soles) each
: 7 years
: 7.84%
: Semi-annual
Eleventh issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 9, 2004.
: 4,000 bonds.
: 10 years.
: VAC + 6.50%.
: Semi-annual.
Third issuance
Date of issuance
Face value
Redemption term
Interest rate
Interest payment
: January 5, 2006
: 3,600 bonds
: 10 years
: 8.16%
: Semi-annual
Twelfth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 24, 2004.
: 8,000 bonds.
: 10 years.
: VAC + 6.50%.
: Semi-annual.
Fourth issuance
Date of issuance
Face value
Redemption term
Interest rate
Interest payment
: February 1, 2006
: 4,000 bonds
: 5 years
: 7.06%
: Semi-annual
Thirteenth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 10, 2005.
: 6,000 bonds.
: 5 years.
: 7.38%.
: Semi-annual.
Fifth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: February 1, 2006.
: 5,440 bonds.
: 10 years.
: 8.00%.
: Semi-annual.
Fourteenth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 10, 2005.
: 6,000 bonds.
: 10 years.
: 8.75%.
: Semi-annual.
Sixth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: March 17, 2006.
: 3,850 bonds.
: 3 years.
: 6.63%
: Semi-annual.
Seventh issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: May 22, 2006.
: 3,000 bonds.
: 3 years.
: 6.75%.
: Semi-annual.
Second program of Corporate Bonds
First issuance
Date of Issuance
Face value
Redemption term
Interest rate
Interest payment
: January 5, 2006
: 4,000 bonds
: 5 years
: 7.31%
: Semi-annual
F-67
F-68
Eight issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: May 22, 2006.
: 3,000 bonds.
: 7 years.
: 7.56%.
: Semi-annual.
Tenth issuance - Series B
Date of issuance
Face value
Term
Interest rate
Interest payment
: October 6, 2006.
: 3,000 bonds.
: 7 years.
: 6.66%.
: Semi-annual.
Twelfth Issuance - Series A
Date of Issuance
Issuer
Bonds issued
Number of bonds placed
Principal due
Interest rate
Interest payment
: April 19, 2007
: Edelnor S.A.A.
: Marketable Securities in thousands of new soles (4,000 bonds of S/. 5,000.00 each)
: S/. 30,000,000
: S/. 20,000,000
: All due on April 19, 2012
: 5.69%
: Semi-annual.
Seventeenth Issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: July 6, 2007
: 8,000
: 5 years
: 5.97%
: Semi-annual
Eighteenth Issuance - Series A
Date of Issuance
Issuer
Bonds issued
Number of bonds placed
Principal due
Interest rate
Interest payment
: April 19, 2007
: Edelnor S.A.A.
: Marketable Securities in thousands of new soles (4,000 bonds of S/. 5,000.00 each)
: S/. 40,000,000
: S/. 20,000,000
: All due on April 19, 2015
: 5.91%
: Semi-annual.
F-69
ANNUAL REPORT
Nineteenth Issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: August 31, 2008
: 3,000
: 8 years
: 7.22%
: Semi-annual
Third program of Corporate Bonds
First Issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: August 29, 2007
: 8,000
: 8 years
: 6.94%
: Semi-annual
Second Issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: September 12, 2007
: 6,000
: 5 years
: 6.56%
: Semi-annual
Third issuance
Date of issuance
Face value
Redemption term
Interest rate
Interest payment
: January 10, 2008
: 6,000 bonds
: 5 years
: 6.84%
: Semi-annual
Fourth issuance
Date of issuance
Face value
Redemption term
Interest rate
Interest payment
: March 1, 2008
: 4,000 bonds
: 3 years
: 5.94%
: Semi-annual
Fifth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: March 1, 2008.
: 4,000 bonds.
: 5 years.
: 6.28%.
: Semi-annual.
F-70
143
144
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ANNUAL REPORT
Sixth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 13, 2008.
: 5,000 bonds.
: 6 years.
: 6.81%
: Semi-annual.
Seventh issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: June 13, 2008.
: 5,000 bonds.
: 8 years.
: 7.13%.
: Semi-annual.
Eight issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: July 11, 2008.
: 4,000 bonds.
: 3 years.
: 7.50%.
: Semi-annual.
Nineth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: July 11, 2008.
: 6,000 bonds.
: 8 years.
: 7.72%.
: Semi-annual.
Tenth issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: December 11, 2008.
: 2,600 bonds.
: 4 years.
: 8.31%.
: Semi-annual.
Eleventh issuance
Date of issuance
Face value
Term
Interest rate
Interest payment
: December 11, 2008.
: 3,093 bonds.
: 3 years.
: 8.25%.
: Semi-annual.
F-71
1.6 Codensa S.A. issued bonds on March 11, 2004.
First Issuance
Issuer
Issued securities
Amount issued
: Codensa.
: Securities negotiable in Colombian pesos.
: 500,000,000,000 Colombian pesos.
1st principal payment
Nominal interest rate
Interest payment
: Maturity in 2009 for 50,000,000,000 Colombian pesos.
: 12.24% average annual rate.
: Quarterly.
Interest accrued at year end is ThCh$100,705 (ThCh$77,866 in 2007), and it is
presented in current liabilities.
2nd principal payment
Interest payment
: Quarterly.
Interest accrued at year end is ThCh$436,859 (ThCh$349,146 in 2007), and it
is presented in current liabilities.
3rd principal payment
Interest payment
: Quarterly.
Interest accrued at year-end is ThCh$560,258 (ThCh$443,148 in 2007), and it
is presented in the current liabilities.
Second Issuance
The first and second issues, which were distributed in two series, with terms of three and ten years, have been issued.
These were placed at CPI + 4.60% and CPI + 5.30% respectively. A third issue was made, distributed in two series, with
terms of three and five years. These were placed at DTF TA + 2.09% and DTF TA + 2.40%. Payment is quarterly in
arrears.
1st principal payment
Interest payment
2nd principal payment
Interest payment
3rd principal payment
Interest payment
: 12.12% average annual rate
: Quarterly.
Year-end interest is ThCh$380,180 (ThCh$302,527 in 2007), and it is
: 12.80°/o average annual interest rate
: Quarterly.
Year-end interest is ThCh$701,558 (ThCh$ 548,131 in 2007), and it is
: Maturity in 2012 for 33,720,000 Colombian pesos
: 12.37% average annual interest rate
: Quarterly.
Year-end interest is ThCh$58,350 (ThCh$48,860 in 2007), and it is presented
in current liabilities
F-72
ANNUAL REPORT
Third Issuance
On August 1, 2006, the Company issued bonds in reales for R$370,000,000.00 in a single series.
On December 11, 2008 the issue of the first lot distributed in three series, two series with a 5 year period and one series with a 2
year period placed at CPI (consumer price index) rates + 5.99%, DTF TA + 2.58% and DTF TA + 2.11%. The payment of
interest is made when the quarter is finished.
Issuer
Issued securities
Amount issued
Principal due
Interest payment
1st Capital amortization
Interest payment
2nd Capital amortization
Interest payment
Capital amortization
Interest payment
: Maturities in 2010 for Col$109,000,000,000 (Colombian pesos).
: 12.06% annual average rate
: Payment of interest will be on a quarterly basis.
Interest accrued at year-end is ThCh$214,558 and is shown in current
liabilities.
Interest accrued at year-end is ThCh$341,374 and is shown in
current liabilities.
1.7 Edesur S.A.
On October 5, 2004, under its medium-term certificate of indebtedness issuance program, the Company issued negotiable bonds
in Argentinean pesos for a total of ThUS$58,803 in two series - 18 month (class 5) and 3 years (class 6), respectively.
Issued Bonds on 31th, December:
Issuer
Issued securities
Amount issued
Principal due
Interest payment
: Edesur S.A.
: Negotiable bonds in Argentinean pesos.
: ThUS$52,339.
: Maturity in 2012.
: Quartely.
: Ampla Energía e Servicos S.A.
: Negotiable bonds in Brazilian reales.
: R$370,000,000.
: Maturity in 2012
: DI + 0.85% per annum
: Semi-annual.
1.9 Endesa Chile Individual
a.- At December 31, 2008 the following bonds were issued in Chile:
•
On August 9, 2001, it registered the fourth bond issuance of U.F. 7,500,000 under No.264; this was totally placed at
December 31, 2001.
Series E-1 and E-2 were totally redeemed through payment at July 31, 2006.
•
On November 26, 2002, it registered the fifth bond issue of U.F. 8,000,000 under Nos. 317 and 318 and then amended
it on October 2, 2003; this issuance was totally placed at December 31, 2003.
•
On April 15, 2007, it redeemed series G for U.F. 4,000,0000 (U.F. = Inflation index-linked unit of account) in advance,
refinancing it by placing series K for the same amount; both series were registered under No.318 of November 26,
2002.
On December 26, 2007 the sixth issuance of bonds was registered under No.522 for U.F.10,000,000 (inflation indexlinked units of account). This issue was fully placed at December 18, 2008.
- At December 31, 2008 the following installments of series F bonds in UF are paid:
Installment 1 paid on January 29, 2008: UF15,000
Installment 2 paid on July 31, 2008:
UF15,000
Risk rating of the last two bond issuance is as follows at the date of these financial statements is as follows:
Category
1.8 Ampla Energía e Servicos S.A.
On March 1, 2005, the Company issued bonds in reales for a total amount of R$400,000,000 in two series, at December 31,
2008 the current obligations are as follows:
Second Series
Issuer
Issued securities
Amount issued
Principal due
Interest payment
Principal due
- Feller-Rate Clasificadora de Riesgo Ltda. ..............................................................
- Fitch Chile Clasificadora de Riesgo Ltda. ..............................................................
AAAA-
Issuance Terms
: Ampla Energía e Servicos S.A.
: Negotiable bonds in Brazilian reales.
: R$110,000,000.
: Maturity in 2010.
: IGP - M + 11.4% per annum
: Annual.
: Maturity in 2010
Fourth Issuance
Issuer
Securities issued
Issuance Value
Adjustment base
Amortization period
Early redemption
: Empresa Nacional de Electricidad S.A.
: Bonds in U.F.
: Up to seven and a half million (UF7,500,000) divided into:
Series F: 150 bonds at UF10,000 each.
: Variation in the U.F.
: Series F: August 1, 2022.
: Beginning February 1, 2012.
: 6.20% annually, compounded semi-annually and effective on the
outstanding principal adjusted for the value of the U.F. The semi-annual
interest rate will be 3.0534%.
F-74
F-73
145
146
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ANNUAL REPORT
Placement period
Security
Interest payment
Fifth Issuance
Issuer
Securities issued
Amount of issue
Adjustment base
Amortization period
Early redemption
Interest payment
Security
Placement deadline
Sixth Issuance
Issuer
Issued securities
Issue amount
Indexation
Amortization period
Early redemption
Interest payment
Guarantee
Placement period
: 36 months from the registration date in the Chilean Securities Register of the
Superintendence of Securities and Insurance
: There is no specific security, other than the general security of all the issuer’s properties
: Interest will be paid semi-annually each August 1 and February 1, starting August 1, 2001.
Accrued interest at year end is ThCh$802,411 (ThCh$815,600 in 2007) and it is presented
in current liabilities.
: Bonds in U.F.
: Eight million Unidades de Fomento (U.F. 8,000,000) divided into:
- Series H: 4,000 bonds U.F. 1,000 each.
- Series K: 4,000 bonds U.F. 1,000 each.
: Variation in U.F.
: Series H: Semi-annually and successively as of April 15, 2010.
Series K: As of April 15, 2027.
: Only for series K bonds, as of October 16, 2011.
: Series H: 6.2% per year, compounded every six months and effective on the principal not
fully paid adjusted by the value of the Unidad de Fomento. The interest rate to be paid
every six months will be 3.0534%.
: Series K: 3.8% per year, compounded every six months and effective on the principal not
fully paid adjusted by the value of the Unidad de Fomento. The interest rate to be applied
every six months will be 1.8823%.
: Interest will be paid semi-annually, due on April 15 and October 15 of each year starting
from April 15, 2007. Interest accrued at year-end is ThCh$1,764,717 (ThCh$1,757,850 in
2007) an it is presented in current liabilities.
: No specific security, except for general security of all the issuer’s properties.
: 36 months as of date of registration in Securities Register of the Superintendence of
Securities and Insurance.
: Bonds in U.F.
: Ten million inflation index-linked units of account (U.F.10,000,000) divided
into:
- M Series: 10,000 instruments of U.F.1,000 each.
: Changes in U.F.
: Semi-annual and successive from June 15, 2019.
: From December 15, 2011.
: 4.75% annual (finished year), semi-annually compounded and effective on
unpaid capital indexed by U.F. value.
The interest rate to be applied on a semi-annual basis will be equal to 2.34740%.
: Interest payment will be on a semi-annually basis maturing on every June 15
and December 15, starting from June 15, 2009.
Interest accrued at year-end is ThCh$419,648 and is shown in current liabilities.
: There is no specific guarantee, except for the general guarantee of all the
issuer’s assets.
: 36 months from the date of registration at the Register of Securities of the
Superintendency of Securities and Insurance.
F-75
b. The Company has issuance four public offerings of bonds in the international market as follows:
The risk ratings of these bond issuance at the date of these financial statements are as follows:
Rating entity
Category
-Standard & Poor’s .....................................
-Moodys Investors Services........................
-Fitch...........................................................
BBB
Baa3
BBB
First Issuance
Issuer
Securities issued
Issuance Value
:
:
:
Adjustment
Amortization period
:
:
:
Interest Payments
:
Second Issuance
Issuer
Securities issued
Issuance Value
Adjustment
Principal due
Interest Payment
:
:
:
:
:
:
:
Empresa Nacional de Electricidad S.A.
Yankee bonds registered in the SEC.
Six hundred and fifty million US Dollars (US$650,000,000) divided into:
Tranche 1: US$230,000,000
Tranche 2: US$220,000,000
Tranche 3: US$200,000,000
Variation in the US Dollar in relation to the Chilean peso
Tranche 1 matures on February 1, 2027: Tranche 2 matures on February 1, 2037 (witha
put pption on February 1, 2009, on which date the holders may redeem 100% of bonds
plus accrued interest).
Tranches 3 matures on February 1, 2097.
Tranche 1: 7.875% annually
Interest will be paid semi-annually on February 1 and August 1 every year, starting
January 27, 1997. Accrued interest at year end is ThCh$9,443,838 (ThCh$8,140,922 in
2007), and it is presented in current liabilities.
Four hundred million US Dollars (US$400,000,000)
Series 1 matures on July 15, 2008
Series 1: 7.75% annually
Interest will be paid semi-annually on January 15 and July 15 of each year, starting
January 15, 1999. Accrued interest at year end is ThCh$-(ThCh$7,688,316 in 2007), and
it is presented in current liabilities.
This issuance was completely paid at December 31, 2008.
Third Issuance
Issuer
Securities issued
Issuance Value
Adjustment
Principal due
Interest Payment
:
:
:
:
:
:
:
Four hundred million US Dollars (US$400,000,000).
Series 1 matures on April 1, 2009.
Series 1: 8.50% annually
Interest will be paid semi-annually on October 1 and April 1 of each year, starting
October 1, 1999. Accrued interest at year end is ThCh$5,409,825 (ThCh$4,599,462 in
2007), and it is presented in current liabilities.
F-76
As of the date this report this issuance has been completely paid off.
Fourth Issuance
Issuer
Securities issued
Electronic bonds expressed in US dollars under “Rule 144A” with SEC registration
rights and “Regulation S”.
Amount of issue
:
Six hundred million US dollars (US$600,000,000) divided into:
Tranche 1: US$400,000,000
Tranche 2.: US$200,000,000
Adjustment
:
Variation in US dollar.
Principal due
:
Tranch 1 of US$400 millions total maturity on August 1, 2013.
:
Thanch 2 of US$200 millions total maturity on August 1, 2015.
:
Tranche 1 of US$400 millions 8.35% per year.
Tranche 2 of US$200 millions 8.625% per year.
Payment of interest : Interest will be paid semi-annually on February 1 and August 1 each year starting from July 23,
2003. Interest accrued at year-end was ThCh$13,431,747 (ThCh$11,419,744 in 2007) and it is presented in current
liabilities.
:
:
Repurchase of Cono Sur Bonds (See note 11k)
Endesa Chile Internacional, a wholly-owned subsidiary of Endesa Chile, made a tender offer in November 2001, for the
total or partial purchase, in cash, of the first issuance of the following bond tranches of Yankee Bonds.
•
•
Tranch 1: US$230 million at 30 years, maturing in 2027.
Tranche 3: US$200 million at 100 years, maturing in 2097.
As a result of the offer which expired on November 21, 2001, series 1 and series 3 bonds, for ThUS$21,324 and
ThUS$134,828, respectively, were purchased, whose nominal values amounted to ThUS$24,119 and ThUS$159,584 for
each series.
As a result of the winding—up of Compañía Eléctrica Cono Sur S.A. on September 1, 2008, Endesa Chile S.A. was awarded the
assets and liabilities, including such repurchase of bonds in its assets.
On December 31, 2008 the repurchased bonds were paid. As a result of the above, at December 31, 2008 bonds and debentures
are shown net of the repurchase.
18.1.10
Subsidiaries of Endesa Chile
Issuer
Securities issued
Issuance value
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Marketable bonds in dollars (10,000 bonds).
Ten million US dollars (US$10,000,000)
Full expiration as of July 26, 2009.
4.94%, per year
Interest will be paid semi-annually. Accrued interest at year end is ThCh$134,445
(ThCh$165,628 in 2007), and it is presented in current liabilities.
Issuer
Securities issued
Issuance Value
Capital amortization
Interest Payments
:
:
:
:
:
:
Edegel S.A.
Marketable securities denominated Peruvian Soles (14,000 bonds).
Seventy million Peruvian Soles (Peruvian Soles 70,000,000)
Full expiration as of June 1, 2009.
6.91%
Interest will be paid semi-annually. Accrued interest as of December 31, 2008 amounts
to ThCh$ 81,605 (ThCh$72,738 in 2007) and it is presented in current liabilities
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Marketable Bonds in Soles (7,000 bonds)
Thirty five million soles (S/.35,000,000)
Total maturity at October 21, 2010
6.72%
Semi-annual. Interest accrued at year end is
ThCh$91,298 (ThCh$81,378 in 2007) and it is presented in current liabilities.
Issuer
Securities issued
Issuance value
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Twenty million US dollars (US$20,000,000)
Full expiration as of November 18, 2012
6.06%, per year
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Twenty five million soles (S/.25,000,000)
6.47%
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
6.09% per year
Issuer
Securities issued
Amount issued
Principal due
:
:
:
:
Edegel S.A.
Thirty million soles (S/.30,000,000)
Total maturity at November 27, 2011
Edegel S.A. has made twenty eight bond issues as of December 31, 2008.
Current issues are as follows:
Terms of Issuance
Issuer
Securities issued
Issuance value
Principal due
Interest payment
ANNUAL REPORT
:
:
:
:
:
:
Edegel S.A.
Ten million dollars (US$10,000,000)
Full expiration as of January 26, 2009
3.75%, per year
F-77
F-78
147
148
enersis08
ANNUAL REPORT
Interest payment
:
:
6.16% per year
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Total maturity at Enero 15, 2014
6.16% per year
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Total maturity at Febreary 22, 2011
5.91% per year
Issuer
Securities issued
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Total maturity at June 21, 2022
6.31% per year
Issuer
Issued securities
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Negotiable bonds in dollars (8,000 bonds).
Eight million (US$8,000,000).
Total maturity on July 18, 2011.
5.97%% per year
Semi-annual. Interest accrued at year end is ThCh$136,757 (ThCh$116,271 in 2007)
and it is presented in current liabilities.
Issuer
Issued securities
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Negotiable bonds in new Peruvian soles (5,000 bonds).
Twenty five million new Peruvian soles (NS 25,000,000).
Total maturity on July 03, 2019.
6.28% per year
Semi-annual. Interest accrued at year end is ThCh$156,392 (ThCh$139,399 in 2007)
Issuer
Issued securities
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Negotiable bonds in new Peruvian soles (4,000 bonds).
Twenty million new Peruvian soles (NS 20,000,000).
Total maturity on August 31, 2014.
6.75% per year.
Semi-annual. Interest accrued at year end is ThCh$91,153 (ThCh$81,248 in 2007) and it
F-79
Issuer
Issued securities
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Negotiable bonds in dollars (5,000 bonds).
Twenty five million dollars (US$25,000,000).
Total maturity on March 18, 2013.
6.50% per year.
Semi-annual. Interest accrued at year end is ThCh$93,263 (ThCh$83,944 in 2007) and it
Issuer
Securities issued
Amount of issue
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Marketable bonds in new Peruvian soles (5,000 bonds)
Twenty five million new Peruvian soles (25,000,000).
Total maturity on May 21, 2013.
6.44% per year.
Semi-annual. Interest accrued at year-end is ThCh$35,316 (ThCh$32,286 in 2007) and it
Issuer
Securities issued
Amount of issue
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Twenty five million new Peruvian soles (NS25,000,000).
Total maturity on june 13, 2013.
6.63%
Semi-annual. Interest per year is ThCh$16,775 (ThCh$14,951 in 2007) and it is
Issuer
Securities issued
Amount of issue
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Marketable bonds in dollars (10,000 bonds)
Ten million dollars (US$10,000,000).
Total maturity on january 25, 2028.
6.34%
Semi-annual. Interest per year is ThCh$173,836 and it is presented in current liabilities.
Issuer
Securities issued
Amount of issue
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Twenty eight million and three hundred thousand new Peruvian soles (NS28,300,000).
Total maturity on March 7, 2014.
6.59%
Semi-annual. Interest accrued at year-end is ThCh$118,646 and it is presented in current
liabilities.
Issuer
Securities issued
Amount of issue
Principal due
Interest payment
:
:
:
:
:
:
Edegel S.A.
Marketable bonds in US dollars (9,720 bonds)
Ten million US dollars (US$9,720,000).
Total maturity on November 12, 2014.
9.00%
Semi-annual. Interest accrued at year-end is ThCh$74,237 and it is presented in current
liabilities.
Emgesa S.A. has made four bond issues as of December 31, 2008:
First Issuance
Issuer
Securities issued
Issuance Value
:
:
:
Emgesa S.A.
Marketable bonds in Colombian pesos
$Col 530,000,000,000
F-80
Principal due
Interest nominal rate
Interest payment
:
:
:
Maturities between 2004 and 2009 amounting to Col$316,744,675,710
12,55% per year average rate
Interest will be paid on a quarterly and yearly basis. Accrued interest at year end is
ThCh$2,333,080 (ThCh$2,027,011 in 2007) and it is presented in current liabilities.
ANNUAL REPORT
Note 19. Accrued Expenses
(a)
Short-term accruals:
Accrued expenses included in current liabilities are as follows:
Third Issuance
Issuer
Securities issued
Issuance value
Principal due
Interest payment
:
:
:
:
:
:
Emgesa S.A.
$Col 250,000,000,000
Maturity at February 23, 2015.
13.31% trimester vencido (10.33%)
Annual. Accrued interest at year end is ThCh$927,020 (ThCh$740,211 in 2007) and it is
:
:
:
:
:
:
Emgesa S.A.
$Col 170,000,000,000
Maturity at February 20, 2017.
13.42% per year
Interest will be paid annually. Accrued interest at year end is ThCh$5,544,669
(ThCh$4,270,761 in 2007) and it is presented in current liabilities.
Fourth Issuance
Issuer
Securities issued
Issuance value
Principal due
Interest payment
Emgesa S.A. (former Central Hidroeléctrica Betania S.A.) issued bond on November 11, 2004, completing the first
issue.
First issuance
Issuer
Issued securities
Amount issued
Principal due
Interest payment
:
:
:
:
:
:
Central Hidroeléctrica Betania S.A. E.S.P.
Bonds in Colombian pesos.
400,000,000,000 Colombian pesos.
Maturity between 2009 and 2011, for 400,000,000,000 Colombian pesos.
14,28% per year
Quarterly. Interest accrued at year end is ThCh$2,260,188 (ThCh$1,627,978 in 2007)
Deduction of the bond issuance of Enersis and subsidiaries has been deferred in the same period as the respective issuance.
The long-term deferred value at December 31, 2007 is ThCh$14,247,168 and ThCh$13,776,034 in 2008 and it is presented
in Other Long Term Assets (Note 14). The balance for deductions in short term bond placements classified under Other
current assets is ThCh$1,098,199 (ThCh$1,096,633 in 2007) (Note 9).
F-81
As of December 31,
2007
2008
ThCh$
ThCh$
Bonus and other employee benefits ...............................................................
Litigation and other contingencies.................................................................
Post-retirement benefits- local subsidiaries ...................................................
Suppliers and services....................................................................................
Other ..............................................................................................................
45,943,090
12,199,442
1,266,118
17,145,982
5,193,436
54,960,460
26,417,549
1,296,807
13,367,018
4,175,192
Total...............................................................................................................
81,748,068
100,217,026
(b)
Long-term accruals:
As of December 31,
2007
2008
ThCh$
ThCh$
Post-retirement benefits -local subsidiaries ...................................................
Employee and retired personnel benefits (Ampla-Coelce) ............................
Severance indemnities ...................................................................................
Legal, labor and tax contingencies (Ampla, Coelce and Cien) ......................
Post-retirement benefits-foreign subsidiaries.................................................
Regulatory contingencies (Brazil)(1).............................................................
Other ..............................................................................................................
16,923,300
47,326,709
17,386,136
174,724,468
76,623,763
33,572,287
1,839,579
15,110,559
59,628,584
18,249,759
155,211,626
81,651,563
29,960,946
1,640,598
Total...............................................................................................................
368,396,242
361,453,635
(1) The provision of Brazilian subsidiary Endesa Fortaleza (CGTF) covers the risk of a sanction by the regulatory agency (ANEEL,
Brazilian Electricity Regulatory Agency) that has been calculated based on the opinion of our legal consultants and is related to the
sale of electric energy higher than the thermal energy generation capacity authorized for Endesa Fortaleza by ANEEL in the JanuaryDecember 2004 period (see note 30).
In 2008, ThCh$1,767,324 (ThCh$1,889,242 in 2007) in uncollectible debts were written off.
F-82
149
150
enersis08
ANNUAL REPORT
Note 20. Severance Indemnities
Long-term accruals include employee severance indemnities, calculated in accordance with the policy described in Note 2n. An
analysis of the changes in the accruals in each year is as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Opening balance as of January 1..........................................................................
Increase in accrual ...............................................................................................
Transfer to short-term ..........................................................................................
Payments during the year.....................................................................................
17,097,674
2,284,665
(259,905)
(1,736,298)
17,386,136
2,065,362
(180,444)
(1,021,295)
Total.....................................................................................................................
17,386,136
18,249,759
Note 21. Minority Interest
(a)
Minority shareholders’ participation in the shareholders’ equity of the Company’s subsidiaries is as follows:
Company
Soc. Agrícola Pastos Verdes Ltda..........................
Aguas Santiago Poniente S.A. ...............................
Ampla Energía e Servicios S.A..............................
Ampla Investimentos..............................................
Cam Argentina S.A. ...............................................
Cam Colombia S.A. ...............................................
Cam Perú S.A. ........................................................
Chilectra S.A. (ex Elesur S.A.) ..............................
Cía. Peruana de Electricidad S.A. ..........................
Codensa S.A. ..........................................................
Companhia Energetica Do Ceara - Coelce ............
Compañía de Transmisión del Mercosur S.A. .......
Constructora y Proyectos Los Maitenes S.A. ........
Edegel S.A..............................................................
Edelnor S.A. ...........................................................
Edesur S.A..............................................................
Emgesa S.A. ...........................................................
Empresa Eléctrica Pangue S.A...............................
Endesa Argentina S.A. ...........................................
Endesa Brasil S.A...................................................
Endesa Cachoeira S.A ............................................
Endesa. Costanera S.A. ..........................................
Endesa S.A. ............................................................
Generandes Perú S.A..............................................
Hidroeléctrica El Chocón S.A................................
Hidroinvest S.A......................................................
Inversiones Distrilima S.A. ....................................
Pehuenche S.A........................................................
Soc. Agrícola de Cameros Ltda. ............................
Equity
ThCh$
Participation
%
83,591,397
5,288,574
484,504,679
41,969,135
310,683
3,980,429
5,713,651
826,566,899
18,270,739
484,987,336
450,340,605
12,593,383
(1,657,744)
443,276,162
121,684,568
488,261,141
747,460,237
128,603,931
146,354,700
1,032,532,073
368,605,777
129,922,855
2,051,922,811
225,066,542
185,335,604
112,899,066
73,033,922
282,546,801
8,455,718
45.00%
21.12%
8.07%
8.07%
0.001%
0.0001%
0.0001%
0.92%
49.00%
78.19%
41.14%
0.01%
45.00%
44.56%
40.00%
34.11%
73.13%
5.02%
0.01%
28.48%
0.39%
30.23%
40.02%
40.37%
32.33%
3.91%
31.61%
7.35%
42.50%
Total........................................................................
Total
ThCh$
37,616,128
1,117,188
39,084,539
3,385,611
4
2
4
7,516,626
8,952,661
379,189,308
185,255,869
1,102
(745,986)
197,512,656
48,673,827
166,539,059
546,609,664
6,451,030
14,635
294,090,387
1,452,749
39,282,055
821,160,396
90,857,157
59,911,588
4,409,161
23,086,024
20,767,190
3,593,680
2,985,784,314
F-83
Equity
ThCh$
Participation
%
57,724,016
5,300,957
730,441,961
72,489,581
(709,381)
4,896,847
8,282,152
1,067,663,787
24,000,334
608,343,311
604,924,799
14,276,200
(6,145)
542,604,216
160,493,646
587,618,664
945,683,872
150,796,031
167,765,147
1,405,498,495
392,003,814
146,468,784
2,364,523,995
272,448,080
207,232,574
131,448,184
95,923,696
304,930,787
8,371,967
45.00%
21.12%
8.07%
8.07%
0.001%
0.0001%
0.0001%
0.92%
49.00%
78.19%
41.14%
0.01%
45.00%
45.80%
40.00%
34.11%
73.13%
5.02%
0.01%
28.48%
0.39%
30.23%
40.02%
39.01%
32.33%
3.91%
31.61%
7.35%
42.50%
Total
ThCh$
25,975,808
1,119,804
58,924,069
5,847,667
(29,802)
3
6
9,714,462
11,760,164
475,635,676
248,846,914
1,482
(2,765)
248,514,901
64,197,458
200,433,355
691,540,911
7,564,231
16,777
400,319,856
1,544,965
44,284,702
946,260,479
106,259,110
66,990,002
5,133,577
30,321,480
22,412,413
3,558,086
3,677,145,791
ANNUAL REPORT
(b)
Minority shareholders’ participation in the net (income) or loss of the Company’s subsidiaries is as follows:
Company
Soc. Agrícola Pastos Verdes Ltda. ....
Aguas Santiago Poniente S.A............
Ampla Energía e Servicios S.A. ........
Ampla Investimentos.........................
Cam Argentina S.A............................
Cam Brasil S.A. .................................
Cam Colombia S.A............................
Cam Perú S.A. ...................................
Central Hidroeléctrica Betania S.A. ..
Chilectra S.A. (ex Elesur S.A.)..........
Cía. Peruana de Electricidad S.A. .....
Codensa S.A. .....................................
Companhia Energetica Do Ceara Coelce ..........................................
Compañía de Transmisión del
Mercosur S.A...............................
Constructora y Proyectos Los
Maitenes S.A. ..............................
Edegel S.A. ........................................
Edelnor S.A. ......................................
Edesur S.A. ........................................
Emgesa S.A. ......................................
Empresa Eléctrica Pangue S.A. .........
Endesa Argentina S.A........................
Endesa Brasil S.A.. ............................
Endesa Cachoeira S.A. ......................
Endesa Chile ......................................
Generandes Perú S.A.........................
Hidroinvest S.A. ................................
Inversiones Distrilima S.A. ...............
Pehuenche S.A...................................
Soc. Agrícola de Cameros Ltda.........
Túnel El Melón S.A...........................
Total...................................................
Net income
Participation
Total
ThCh$
%
ThCh$
Net income
Participation
Total
ThCh$
%
ThCh$
Net income
Participation
Total
ThCh$
%
ThCh$
(5,742,067)
117,144
(29,405,435)
(4,862,569)
25,286
774,280
(886,065)
—
(1,185,578)
(271,388,298)
(1,463,591)
(101,930,306)
45.00%
41.70%
8.07%
8.07%
0.001%
0.0001%
0.001%
—
0.01%
0.92%
49.00%
78.19%
(2,583,930)
48,850
(2,372,110)
(392,259)
—
1
(12)
—
(72)
(1,544,485)
(717,160)
(79,694,621)
(6,781,495)
(65,889)
(6,778,980)
(2,818,702)
12,393
—
—
(1,312,623)
—
(133,200,954)
(1,635,628)
(73,846,383)
45.00%
21.12%
8.07%
8.067%
0.0010%
—
—
0.0001%
—
0.92%
49.00%
78.19%
(3,051,673)
(13,919)
(546,854)
(227,383)
—
—
—
(1)
—
(1,211,301)
(801,457)
(57,737,093)
69,929
(12,383)
(174,161,380)
(28,558,721)
1,074,801
—
—
(1,561,834)
—
(257,768,073)
(6,936,775)
(170,196,116)
45.00%
21.12%
8.07%
8.067%
0.0010%
—
—
0.0001%
—
0.92%
49.00%
78.19%
31,468
(2,616)
(14,049,436)
(2,303,805)
28,999
—
—
(1)
—
(2,351,266)
(3,399,020)
(133,068,521)
(85,169,756)
41.14%
(35,036,141)
(47,009,243)
41.14%
(19,338,116)
(167,566,014)
41.14%
(68,931,354)
(2,271,647)
0.01%
(395)
(1,342,852)
0.01%
(68)
(535,967)
0.01%
(184)
(338,778)
(10,102,858)
(9,906,014)
27,357,380
(73,270,271)
(45,553,449)
(2,822,942)
(107,864,793)
(40,554,259)
7,236,116
(221,684,873)
(7,453,707)
(16,161,552)
(7,812,532)
(5,673,095)
(79,136,500)
46,739
(2,065,788)
45.00%
44.56%
40.00%
34.11%
76.55%
5.01%
0.01%
28.48%
0.39%
35.74%
40.02%
40.37%
34.81%
30.07%
31.61%
7.35%
42.50%
0.05%
(152,450)
(4,501,579)
(3,962,405)
9,329,767
(56,086,121)
(2,285,052)
282
(30,722,547)
(159,833)
2,585,819
(88,716,238)
(3,008,988)
(5,625,836)
(2,349,228)
(1,793,265)
(5,816,533)
19,864
(1,031)
(89,811)
(4,141,590)
(11,664,878)
(22,327,770)
(55,552,308)
(37,176,490)
(41,777,734)
(118,756,285)
(67,543,374)
12,125,856
(209,566,365)
(3,827,262)
(9,599,349)
(22,768,646)
(6,933,457)
(151,089,268)
160,143
—
45.00%
44.56%
40.00%
34.11%
73.13%
5.02%
0.01%
28.48%
0.39%
30.23%
40.02%
40.37%
32.33%
3.91%
31.61%
7.35%
42.50%
—
(40,415)
(1,845,388)
(4,665,951)
(7,614,210)
(50,415,259)
(1,864,847)
(4,177)
(33,824,693)
(266,202)
3,666,242
(83,866,507)
(1,545,029)
(3,115,153)
(1,152,299)
(2,191,666)
(11,105,062)
68,060
—
(1,651,600)
(42,835,262)
(47,327,767)
(13,332,549)
(185,177,674)
(59,061,346)
2,825,294
(287,355,211)
(90,027,145)
6,344,711
(442,591,967)
(24,148,892)
2,137,199
(467,468)
(27,803,541)
(215,800,169)
83,752
—
45.00%
45.80%
40.00%
34.11%
73.13%
5.02%
0.01%
28.48%
0.39%
30.23%
40.02%
39.01%
32.33%
3.91%
31.61%
7.35%
42.50%
—
(743,220)
(19,606,857)
(18,931,107)
(4,549,844)
(135,413,050)
(2,962,635)
283
(81,845,693)
(354,815)
1,918,318
(177,121,183)
(9,433,768)
690,871
(18,256)
(8,788,700)
(15,861,312)
35,595
—
(315,537,708)
(282,710,421)
(697,031,109)
151
152
enersis08
ANNUAL REPORT
Detail of changes in the reserve for cumulative translation adjustment is as follows:
Note 22. Shareholders’ Equity
(a)
Dividend
Number
75
76
77
78
(b)
Payment
Date
May 2007
December 2007
April 2008
December 2008
Historical
value ($)
4.890
0.530
3.410
1.540
Type of
dividend
Final 2006
Interim 2007
Final 2008
Interim 2008
Capital stock authorized...................................................................
32,651,166,465
32,651,166,465
2008
Shares
32,651,166,465
Reserve for
liabilities
ThCh$
(233,688,951)
108,330,413
(125,358,538)
(372,746,515)
Total...........................................
(247,387,977)
(233,688,951)
108,330,413
(125,358,538)
(372,746,515)
Reserve
for assets
ThCh$
Reserve for
liabilities
ThCh$
Final
balance at
December 31, 2008
ThCh$
Reserve for
the period
ThCh$
Cumulative translation
adjustment..............................
(372,746,516)
256,845,744
(133,666,455)
123,179,289
(249,567,227)
Total...........................................
(372,746,516)
256,845,744
(133,666,455)
123,179,289
(249,567,227)
The detail of the reserve for cumulative translation adjustment is as follows:
Subscribed and paid in capital is as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
As of December 31,
2007
ThCh$
2,824,882,834
(d)
Final
balance at
December 31, 2007
ThCh$
Reserve for
the period
ThCh$
(247,387,977)
Initial
balance at
January 1, 2008
ThCh$
2007
Shares
Reserve
for assets
ThCh$
Cumulative translation
adjustment..............................
Number of shares
2006
Shares
(c)
Initial
balance at
January 1, 2007
ThCh$
Dividends
2008
ThCh$
2,824,882,834
Other reserves
Other reserves at December 31, 2008 are composed of the following:
Initial balance
at January 1,
2008
ThCh$
Reserve for
the period
ThCh$
Final balance at
December 31,
2008
ThCh$
Reserve for entities using remeasurement method...........................
Reserve for cumulative translation adjustment conversion
differences....................................................................................
Reserve for Technical Bulletin No. 72.............................................
(46,232,634)
11,489,022
(34,743,612)
(372,746,516)
(55,271,005)
123,179,289
13,374
(249,567,227)
(55,257,631)
Total.................................................................................................
(474,250,155)
134,681,685
(339,568,470)
Edesur S.A. ...............................................................................................................
Distrilec Inversora S.A..............................................................................................
Inversiones Distrilima S.A........................................................................................
Cía. Peruana de Electricidad S.A. .............................................................................
Ampla Energia e Serviços S.A..................................................................................
Ampla Investimentos e Serviços S.A........................................................................
Endesa Brasil S.A. ....................................................................................................
Codensa S.A..............................................................................................................
Investluz S.A.............................................................................................................
Central Geradora Termelétrica Fortaleza S.A...........................................................
Synapsis Colombia S.A. ...........................................................................................
Endesa Market Place, S.S. ........................................................................................
Endesa Argentina S.A...............................................................................................
Ingendesa Do Brasil Ltda..........................................................................................
Endesa Costanera S.A...............................................................................................
Enigesa S.A...............................................................................................................
Edegel S.A. ...............................................................................................................
Cía. Eléctrica Cono Sur S.A. ....................................................................................
Emgesa S.A...............................................................................................................
Gasatacama S.A. .......................................................................................................
Electrogas S.A. .........................................................................................................
Inversiones Electrogas S.A. ......................................................................................
Hidroeléctrica El Chocón S.A...................................................................................
Hidroinvest S.A. .......................................................................................................
Southern Cone Power Arg. S.A. ...............................................................................
Endesa Chile Internacional .......................................................................................
Synapsis Argentina Ltda. ..........................................................................................
(67,877,564)
(42,845,410)
(17,923,190)
(3,110,216)
(69,061,169)
627,137
(62,584,495)
(61,102,146)
(7,322,057)
(7,515,458)
(2,364,226)
465,417
(7,526,282)
(271,393)
(1,836,514)
—
—
(18,907,050)
(969,869)
(188)
(309)
(444,451)
117,399
(1,834,415)
(432,509)
—
(27,557)
(36,684,028)
(27,841,345)
(13,680,347)
(1,851,539)
(54,610,387)
3,393,439
(39,151,307)
(48,327,318)
(7,322,057)
(7,515,458)
(1,079,915)
465,417
(3,399,675)
(231,169)
(627,988)
63,325
4,900,812
—
(12,224,449)
16
(146)
(69,512)
(41,945)
(118,198)
73,300
(3,659,196)
(27,557)
Total..........................................................................................................................
(372,746,515)
(249,567,227)
F-86
F-85
ANNUAL REPORT
Note 23. Other Income and Expenses
Note 24. Price-level Restatement
a.
The (charge) credit to income for price-level restatement is as follows:
The detail of other non-operating income is as follows:
2006
ThCh$
2007
ThCh$
2008
ThCh$
Gain on sale of property, plant and equipment and materials ...................................
Gain on investments sales.........................................................................................
Services - projects and inspections ...........................................................................
Penalties charged to contractors suppliers and clients ..............................................
CDEC-SING power settlement gain .........................................................................
Index UFIR Brazilian subsidiaries............................................................................
Cost recoveries..........................................................................................................
Reversal of contingencies provision and other provisions........................................
Effect of application of BT 64 ..................................................................................
Cemsa contract liquidation .......................................................................................
Edesur´s tariff adjustment (2) ...................................................................................
Indemnities and commissions ...................................................................................
Dividend from investees ...........................................................................................
Provisión de Subtransmisión (1) ...............................................................................
Other .........................................................................................................................
27,523,018
—
590,160
3,655,116
10,573,013
6,312,098
5,802,200
34,967,156
13,676,423
—
—
10,420,315
1,078,440
—
9,192,479
3,598,306
3,351,925
231,726
4,862,909
7,497,512
8,919,159
9,971,772
83,944,730
42,935,004
8,869,387
30,279,029
2,861,313
1,490,291
—
8,254,584
8,564,335
—
1,027,091
6,366,887
20,927,728
—
5,217,441
42,450,066
290,530,734
—
—
2,523,011
2,118,514
40,575,000
10,655,917
Total..........................................................................................................................
123,790,418
217,067,647
430,956,724
(1) See Note 35
(2) See Note 5 (1)
2006
ThCh$
I.P.C.
I.P.C.
U.F.
I.P.C.
I.P.C.
I.P.C.
I.P.C.
I.P.C.
U.F.
I.P.C.
2,795,089
10,657,699
542,335
56,615,239
2,135,526
2,428,901
16,239,795
62,784,954
5,587,619
12,659,712
5,420,995
16,326,224
196,616
202,567,286
5,430,388
9,288,942
48,530,723
223,707,409
17,598,322
79,891,104
5,473,124
23,635,727
197,883
249,295,009
9,904,204
5,268,412
53,164,534
219,461,265
4,576,287
102,232,182
172,446,869
608,958,009
673,208,627
(62,888,063)
(50,112,689)
(23,867,564)
(15,709,446)
(402,563)
(18,043,391)
(219,414,159)
(175,555,379)
(63,928,534)
(55,684,682)
(1,484,817)
(104,655,528)
(250,122,727)
(172,538,447)
(65,067,732)
(77,317,869)
(28,424)
(132,236,096)
Net charge-liabilities and shareholders’ equity
accounts .................................................................................
(171,023,716)
(620,723,099)
(697,311,295)
Net credits (charge) to income ................................................
1,423,153
(11,765,090)
(24,102,668)
Assets.........................................................................................
Inventory....................................................................................
Current assets.............................................................................
Property, plant and equipment ...................................................
Accounts receivable from subsidiaries.......................................
Investment in subsidiaries..........................................................
Amortization of goodwill...........................................................
Other assets................................................................................
Price-level restatement of the income statement........................
Net credits – assets.....................................................................
2006
ThCh$
2007
ThCh$
2008
ThCh$
Loss on sale of fixed assets and materials.....................................................
Obsolescence provision and write-off of fixed assets...................................
Effect of application of BT 64 ......................................................................
Contingencies and litigation .........................................................................
SIC power settlement loss.............................................................................
Pension plan expense ....................................................................................
Index UFIR Brazilian subsidiaries................................................................
Penalties and fines ........................................................................................
Other taxes Colombia ...................................................................................
Other taxes Argentina and Brazil..................................................................
Other taxes Peru............................................................................................
Energy efficiency Brazilian subsidiaries.......................................................
Write-off of Copel and other contracts (Brazil) ............................................
Other Taxes Chile .........................................................................................
Other .............................................................................................................
(2,177,724)
(15,015,183)
(55,152,975)
(40,066,373)
(12,305,869)
(5,042,613)
(3,816,661)
(24,564,060)
(5,792,279)
(10,721,911)
(3,760,305)
(14,321,495)
(35,693,617)
—
(16,335,461)
(1,276,635)
(7,983,195)
(209,126,921)
(66,081,242)
(9,262,852)
(6,942,890)
(2,423,854)
(19,119,269)
(26,021,628)
(10,021,113)
(1,100,635)
—
—
—
(20,391,632)
(1,649,346)
(17,611,771)
(94,613,472)
(68,148,184)
(28,883,052)
(6,489,612)
(2,971,858)
(13,091,632)
(16,047,815)
(9,793,947)
(8,073,148)
—
—
(16,158,598)
(18,523,859)
Total..............................................................................................................
(244,766,526)
(379,751,866)
(302,056,294)
2008
ThCh$
Liabilities and Shareholders’ equity
Shareholders equity....................................................................
Current and long-term liabilities ................................................
Minority interest ........................................................................
Non-monetary liabilities ............................................................
Price-level restatement of the income statement........................
b. Other non-operating expenses are as follows:
2007
ThCh$
Index
I.P.C.
I.P.C.
U.F.
I.P.C.
I.P.C.
I.P.C.
F-87
F-88
153
154
enersis08
ANNUAL REPORT
Non-current assets
Long-term receivables ...............................................
Amounts due from related companies........................
Other assets................................................................
Forward contracts and swaps .....................................
Total gain (loss) ........................................................
Note 25. Exchange Differences
Currency
The (charge) credit to income for foreign currency translation is as follows:
Currency
Assets
Liabilities
2006
ThCh$
2007
ThCh$
2008
ThCh$
Short-term debt due to banks .....................................
and financial institutions ............................................
Current portion of long-term......................................
debt due to banks .......................................................
Cash ...........................................................................
US$
Other
499,154
(3,013)
86,555
(54,158)
(494,632)
14,627
Time deposits.............................................................
US$
Other
US$
Other
US$
Other
85,336
(5,981)
81,316
13,566
294,675
(10,596)
(16,240)
(302,229)
(2,289,017)
—
7,380,586
1,766,069
55,847
388,093
(3,529,358)
—
Current portion of bonds payable...............................
Current portion of notes payable................................
Accounts payable.......................................................
671
291,637
(2,891)
1,961,472
—
(2,405,596)
(959)
(17,657,240)
—
18,021,241
79.068
18,742,438
Miscellaneous payables .............................................
Accrued expenses ......................................................
US$
US$
Other
US$
Non-current assets
Long-term receivables ...............................................
Other assets................................................................
Forward contracts and swaps .....................................
US$
US$
US$
US$
7,277,689
—
244,881
25,766
11,404,659
—
—
(5,115,126)
9,962,100
—
—
2,692,560
(16,355,332)
55,078,639
Notes receivable,net...................................................
Accounts receivable, net ............................................
Prepaid expenses........................................................
Other current assets....................................................
Total gain (loss) ........................................................
10,759,663
Currency
Liabilities
Short-term debt due to banks .....................................
Current portion of long-term......................................
debt due to banks .......................................................
Current portion of notes payable................................
Dividends payable......................................................
Miscellaneous payables .............................................
Deferred income ........................................................
Other current liabilities ..............................................
US$
US$
US$
US$
2006
ThCh$
Year ended December, 31
2007
ThCh$
US$
US$
Yen
Other
(27,269)
23,501
—
—
Euro
US$
US$
US$
Other
US$
Other
US$
US$
Other
US$
US$
US$
—
(2,063,810)
—
(223,099)
2,166
—
F-89
(185,565)
(6,348)
—
(641,215)
(12,876)
—
108,597
1,611,972
—
—
—
2,177,963
—
691,158
(13,881)
(378,899)
27,224
932,862
—
—
(205)
(7,133)
—
2008
ThCh$
(35,966)
487,306
—
—
—
(30,691,930)
—
(2,279,178)
(18,554)
—
(19,493)
(269,862)
—
—
(65,264)
(110,371)
284
Dividends payable......................................................
Deferred income ........................................................
Other current liabilities ..............................................
Amounts due to related companies ............................
Long-term liabilities.................................................
Due to banks and........................................................
financial institutions...................................................
Notes payable.............................................................
Bonds payable............................................................
Other long-term liabilities..........................................
Forward......................................................................
7,277,689
—
244,881
25,766
11,404,659
—
—
(5,115,126)
9,962,100
—
—
2,692,560
10,759,663
(16,355,332)
55,078,639
2006
ThCh$
Year ended December, 31
2007
ThCh$
US$
US$
Yen
Other
(27,269)
23,501
—
—
Euro
US$
US$
US$
Other
US$
Other
US$
US$
Other
US$
US$
US$
US$
F-89
—
(2,063,810)
—
(223,099)
2,166
—
US$
Yen
Euro
Other
US$
US$
US$
US$
Total gain (loss)
Exchange difference.................................................
(185,565)
(6,348)
—
(641,215)
(12,876)
—
—
—
—
375,380
—
—
—
(1,214,095)
—
(555,451)
—
(4,528,681)
—
6,230,982
108,597
1,611,972
—
—
2008
ThCh$
(35,966)
487,306
—
—
—
2,177,963
—
691,158
(13,881)
(378,899)
27,224
932,862
—
—
(205)
(7,133)
—
—
—
—
12,921,020
—
—
—
2,915,055
1,694,939
1,065,135
—
—
(30,691,930)
—
(2,279,178)
(18,554)
—
(19,493)
(269,862)
—
—
(65,264)
(110,371)
284
(49,526,378)
—
—
—
51,800,015
(7,625,119)
(444,892)
—
23,745,807
(38,799,402)
7,390,475
16,279,237
Note 26. Extraordinary Items
There are no extraordinary items as of 2006, 2007 and 2008.
Note 27. Debt issuance costs
Expenses incurred for issuing and placing debt instruments incurred each year in placing bonds are as follows:
2006
ThCh$
Bank commissions.......................................................................................
584,862
As of December 31
2007
ThCh$
—
2008
ThCh$
—
ANNUAL REPORT
Note 28. Cash flow statement
(a) Other disbursements for financing:
As of December 31
2007
ThCh$
2006
ThCh$
Commissions on debt refinancing.......................................................................
Forward contract payments.................................................................................
Reimbursable contributions ................................................................................
Others..................................................................................................................
Total....................................................................................................................
(693,093)
(7,218,376)
(553,347)
(54,041)
(8,518,857)
—
(628,231)
(857,665)
(17,792)
(1,503,688)
2008
ThCh$
—
(15,258,672)
(298,495)
(8,946)
(15,566,113)
As of December 31
2007
ThCh$
—
—
—
Settlement of Derivatives....................................................................................
Margin call premiums.........................................................................................
Total....................................................................................................................
—
—
—
2008
ThCh$
456,542
1,783,600
2,240,142
(c) Other receipts from investments:
2006
ThCh$
Receipts from loans granted to former subsidiary ..............................................
Margin call premiums.........................................................................................
Capital reduction in Compañía Eléctrica de Bogotá S.A....................................
Sale of participation in Gas Atacama to Southern Cross (1)...............................
Guaranteed deposits............................................................................................
Others..................................................................................................................
Total....................................................................................................................
634,900
474,320
533,801
—
—
593,683
2,236,704
As of December 31
2007
ThCh$
—
—
—
47,014,775
—
1,013,389
48,028,164
2008
ThCh$
—
—
—
—
31,849,336
914,608
32,763,944
(d) Other investment disbursements:
2006
ThCh$
Studies and projects ............................................................................................
Payments associated with derivative contracts ...................................................
Payment Deutsche Bank Margin Call.................................................................
Intangible assets..................................................................................................
Purchase of participation in Gas Atacama from CMS (1) ..................................
License software .................................................................................................
Other ...................................................................................................................
Total....................................................................................................................
F-91
—
(12,678,677)
—
(1,400,012)
—
—
(592,686)
(14,671,375)
As of December 31
2007
ThCh$
—
—
(24,359,230)
(1,356,818)
(47,200,351)
(3,018,182)
(2,865,485)
(78,800,066)
On the same date, Endesa Chile and Southern Cross Latin America Private Equity Fund III L.P. (“Southern Cross”) subscribed a
sale and purchase agreement for 50% of Endesa Chile s participation in Inversiones Gas Atacama Holding S.A. and its
subsidiaries and in its sponsor loans to Southern Cross for the amount of US$80 million.
Endesa Chile, by exercising its right of first offer to purchase from CMS and selling this participation on the same date and in a
linked transaction to Southern Cross acted as an agent and thus did not record any gains or losses related to the sale and purchase
of the participation.
(b) Other receipts from financing:
2006
ThCh$
(1) On June 30, 2007, Endesa Chile notified CMS Enterprises Company (the entity controlling 50% of Inversiones Gas Atacama
Holding and subsidiaries) of its decision to exercise its right of first offer to purchase the interest held by CMS Enterprises
Company in Inversiones Gas Atacama Holding for US$80 million. Included in this amount was the purchase of a sponser loan
that CMS had grants to Inversiones Gas Atacama Holding and its subsidiaries.
2008
ThCh$
(3,874,266)
(3,785,243)
—
(5,118,369)
—
(3,563,608)
(571,772)
(16,913,258)
155
156
enersis08
ANNUAL REPORT
Note 29. Financial Derivatives
As of December 31, 2008 the Company and its subsidiaries held the following financial derivative contracts with financial institutions with the objective of decreasing exposure to
interest rate and foreign currency risk, as follows:
Type
Derivative
Type
Contract
OE
OE
OE
OE
S
S
S
S
S
S
S
S
S
S
S
S
S
FR
FR
FR
CCTE
CCTE
CCTE
CCTE
CCPE
CCPE
CCPE
CCPE
CCPE
CCPE
CCPE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
Nominal
Amount
US$
50,000,000
40,000,000
20,000,000
40,000,000
—
57,020,000
30,000,000
26,527,359
—
—
30,471,390
59,166,667
17,713,549
—
350,000,000
18,001,517
250,000,000
71,643
6,842,122
1,201,635
Date of
Maturity
IV quarter09
III quarter 09
IV quarter 09
III quarter 10
III quarter 08
IV quarter 12
I quarter 13
II quarter 14
III quarter 08
IV quarter 08
II quarter 12
III quarter 11
IV quarter 15
IV quarter 08
I quarter 14
IV quarter 15
IV quarter16
I V quarter 08
I quarter 09
II quarter 09
Description of contracts
Purchase
sale
Item
position
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Exchange rate
Exchange rate
Exchange rate
Interest rate
Interest rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
P
P/S
P/S
P/S
P
P
P
P
P
P
P
P
P
P
P
P
P
S
S
S
Hedged Item
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bonds
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bank obligations
Bonds
Bank obligations
Bonds
Bank obligations
Bank obligations
Bank obligations
F-93
Amount
ThCh$
Amount
Hedged
item
ThCh$
31,822,500
25,458,000
12,729,000
25,458,000
—
36,290,380
19,093,500
16,883,337
—
—
19,393,516
37,656,625
11,273,788
—
222,757,500
11,457,065
159,112,500
36,266
3,234,981
614,636
31,822,500
25,458,000
12,729,000
25,458,000
—
36,290,380
19,093,500
16,883,337
—
—
19,393,516
37,656,625
11,273,788
—
222,757,500
11,457,065
159,112,500
36,266
3,234,981
614,636
Accounts
Assets / Liabilities
Account
Amount
ThCh$
Other liabilities s/t
Other assets l/t-Other liab. l/t
Other assets s/t
Other liabilities l/t
Other assets l/t
Other assets s/t
Other assets l/t
Other pas s/t y l/t
Other pas s/t y l/t
Other assets s/t-Other liab. s/t
Income
Realized
Unrealized
ThCh$
ThCh$
(860,219)
(25,799)
(565,544)
(169,352)
(358,138)
(79,918)
(1,402,844)
(236,306)
—
(1,642,999)
(3,120,587)
(515,525)
(843,690)
(25,458)
2,488,150
471,330
— (11,146,503)
—
11,335
(3,657,588) (4,007,363)
(552,637)
(93,044)
(1,340,673)
(615,563)
—
(775,913)
(48,324,342) (2,462,327)
(2,113,715)
(702,897)
(42,826,426) (1,797,350)
—
11,538
1,220,596
—
171,146
—
(56,263)
(3,794)
(1,799)
(4,325)
—
(3,120,587)
(843,690)
35,485
—
—
(3,657,588)
(1,039,149)
(1,340,674)
—
(909,553)
(2,113,715)
(106,503)
—
—
—
ANNUAL REPORT
Note 30. Commitments and Contingencies
Collateral held by third parties:
Guarantee
Subsidiary
Creditors banks ..............................................
Sociedad de Energía de la República
Argentina..................................................
Mitsubishi ......................................................
Credit Suisse First Boston .............................
Other creditors ...............................................
Other creditors ...............................................
Banco Santander (Agente de garantía) ..........
Deutsche Bank (1) .........................................
Other creditors ...............................................
Other creditors ...............................................
International Finance Corporation.................
Bndes .............................................................
Committed assets
Type
guarantee
Pangue S.A.
Endesa Argentina - Endesa
Costanera S.A.
Endesa Chile
Edegel S.A.
G.N.L. Quintero
Enersis S.A.
Ampla S.A.
Coelce S.A.
CGT Fortaleza S.A.
Cachoeira Dourada S.A.
Book value
of collateral
Balance payable of related debt
at December 31.
Currency
2008
2007
Release of
guarantees
2009
Type
Currency
Mortgage and pledge
Real estate, properties
ThCh$
106,689,869
ThCh$
1,586,879
2,469,387
—
Pledge
Pledge
Pledge
Bank bond
Pledge
Pledge
Deposits accounts
Pledge over collections and others
Pledge over collections and others
Mortgage and pledge
Pledge
Shares
Combined cycle
Combined cycle
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
76,064,958
74,154,534
26,500,305
—
134,954,554
24,126,683
—
13,545,624
5,416,277
175,656,932
—
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
6,289,281
48,567,006
25,458,000
508,461
57,563,928
94,205,737
—
141,502,755
90,786,197
70,262,773
—
7,602,569
37,068,577
21,644,528
3,293,613
57,318,439
—
27,542,662
146,714,368
66,423,956
61,678,291
672,076
—
—
—
—
—
—
—
—
—
—
—
Shares
Deposits accounts
(1) See note 9
Guarantees of subsidiary obligations (1) :
Guarantee
2nd civil court of Quillot
Vestas Eólicas S.A.U...
Banco Español de
Crédito....................
Cédulas de crédito
bancario..................
(1)
Subsidiary
Type
guarantee
Committed assets
Book value
Type
of collateral
Balance payable of related debt
as of December 31.
Currency
2008
2007
Release of guarantees
2009
2010
2008
2011
Cía. Eléctrica San Isidro
Endesa Eco S.A.
Deposit
Guarantees
ThCh$
ThCh$
10,000
7,923,754
ThCh$
ThCh$
—
7,923,754
10,890
8,133,045
—
—
—
—
—
—
—
—
Cía. Eléctrica Tarapacá S.A.
Guarantees
ThCh$
—
ThCh$
—
2,229,889
—
—
—
—
Cien
Guarantees
ThCh$
163,401,797
ThCh$
163,401,797
183,293,442
—
—
—
—
Unless otherwise stated, the guarantees in the table “Guarantees of Subsidiary Obligations” were provided by the Company or a subsidiary (the “Guarantor”) to a
third party creditor that had entered into a new obligation with another subsidiary (the “Subsidiary Debtor”). If the Subsidiary Debtor is unable to meet the
requirements of the related obligation, the Guarantor will be required to make future payments on behalf of the Subsidiary Debtor up to the remaining amount
payable.
F-94
157
158
enersis08
ANNUAL REPORT
a. Litigation and other legal actions
Enersis S.A. (“Enersis”)
Plaintiff
Defendant
Court
Case/Identification
:
:
:
:
Enersis , Chilectra S.A., Empresa Nacional de Electricidad S.A. (“Endesa Chile”)
The Republic of Argentina
CIADI Arbitration Panel
(CIADI Case ARB/03/21)
Summary of proceedings: Compensation for losses caused to the Plaintiff’s investment in the Republic of Argentina is requested in
connection with the participation of the power distribution concessionaire Edesur S.A. (“Edesur”)on the grounds of violation of the
Investment Protection and Promotion Agreement entered into by the Republics of Chile and Argentina, and the Argentinean
Government behavior through the passing of Public Emergency Law 25,561, dated January 6, 2002. The said behavior has also
seriously affected the economic and financial balance of the Concession Contract between Edesur and the Argentinean National State.
The said Law authorized a re-negotiation process of the Concession Contracts with the purpose of re-composing the economicfinancial equation affected by the conversion to pesos, at US$1 = Arg$1, of tariff values calculated in American dollars, and the
prohibition to apply biased tariff updating. In practice, this process has not been promoted by the Government, and no measures to
prevent losses for the Plaintiff have been formalized. Edesur has been deprived of receiving the tariffs indicated in the regulations and
in the said Concession Contract, therefore being harmful to the investment the Plaintiff companies have made. Process status: On
October 18, 2004, a copy of the lack of jurisdiction petition filed by the Republic of Argentina was received. On December 17, 2004
the said petition was answered and confirmation of the International Center for the Settlement of Disputes regarding Investments
between States and Nationals of Other States (CIADI) jurisdiction was requested. On April 6, 2005, the allegations of the parties
regarding this jurisdiction issue took place. The court decided to accept the re-petition and re-response of the parties, setting a brief
term for them. And the parties met the term. On June 15, 2005, Edesur S.A. entered with the UNIREN into an Understanding Letter
within the framework of the process for renegotiating Edesur’s Concession Contract, envisaged in Law No.25,561 and supplementary
regulation. As a result of the Understanding Letter, on August 29, 2005, the Minutes of Agreement for the Adequacy of the
Concession Contract for the Public Service of Distribution and Marketing of Electric Energy were entered into. At the request of the
Argentine Government, the Minutes of Agreement were executed again, on the same terms and conditions, on February 15, 2006, to
include the new female Minister of Economy and Production. The Minutes envisage a Transitional Rate Regimen, retroactively
effective beginning on November 1, 2005; require approval of the authorities for paying dividends during the life of the transitional
regime; and include other aspects associated with investments, quality of service, penalties applied to Edesur, and unpaid penalties.
Also, it establishes a Full Rate Revision, by which a new rate regime is to be set, which was scheduled to become effective on
November 1, 2006, and for the next 5 years, under the supervision of the ENRE, in accordance with law 24,065. In addition, the
Understanding Letter imposes the obligation of initially suspending, and subsequently dropping, all actions filed against the
Argentinean State by Edesur and its shareholders. Such requirement would cause Enersis S.A. to suspend the international arbitration
started on April 25, 2003 with the CIADI. After publication in the Official Gazette of the Republic of Argentina of the resolution
approving the rates arising from the Full Rates Revision, Enersis and its subsidiaries Chilectra S.A., Endesa Chile and Elesur S.A.
(currently, Chilectra S.A.) would drop the abovementioned international arbitration started with the CIADI. On September 16, 2005
the Republic of Argentina made a filing requesting the suspension of the proceedings. It was answered on September 22, 2005 by the
plaintiffs, who opposed the suspension. On September 30, 2005 the court rejected the Argentinean request, for lack for consent. On
October 7, 2005, Argentina made a new filing on the same issue, which the court communicated to us on October 11, 2005, and we
answered the filing on October 18, 2005. On March 28, 2006, the court ordered the suspension of the proceedings for a term of 12
months, after which it will call on the parties to report on the status of the negotiation conducted in accordance with the Minutes of
Agreement for the Adequacy of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy.
Subsequently, the court will decide whether or not the proceedings should continue. The Minutes of Agreement for the Adequacy of
the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy, after being approved by the
Congress of the Argentine Nation, were ratified by the Executive National Argentine Power through decree 1959 of 2006, published
on the Official Gazette on January 8, 2007, and now their regulation by the ENRE is pending. ENRE Resolution 50/2007, of
January 30, 2007, published in the Official Gazette on February 5, 2007, proceeded to comply with certain stipulations of the Minutes
of Agreement for the Adequacy of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy,
approving the amounts of the new
F-95
Edesur Rate Table that reflects the increases in cost provided for in the Transition Rate Regimen, and issuing certain rules governing
predictions contained in the Minutes of Agreement for the Adequacy of the Concession Contract for the Public Service of Distribution
and Marketing of Electric Energy. In particular, with regard to its most important effects, the ENRE adopted the following decisions
among others: 1. Approval of the new Rate Table reflecting the Transition Rate Regimen: ENRE approved the amounts of Edesur’s
Rate Table leading to the Transition Rate Regimen provided for in the Minutes of Agreement for the Adequacy of the Concession
Contract for the Public Service of Distribution and Marketing of Electric Energy and, therefore implements the increase of 23% above
typical distribution costs (which does not affect T1R1 and T1R2 rates), above connection costs and above service restoration costs
incurred by Edesur, as well as also the additional average increase of 5% above the above typical distribution costs earmarked for
executing a works plan. 2. Date of application of the new Rate Table reflecting the Transition Rate Regimen: ENRE Resolution
50/2007 decreed application of the above new Rate Table starting from the invoicing of the consumption recorded after zero hours of
February 1, 2007. 3. Cost Monitoring Mechanism: ENRE Resolution No. 50/2007 stipulated application of a positive variation of
9.962% of the Cost Monitoring Mechanism Indices to the service costs, with such application being made starting from May 1, 2006
(on which date the first six-month period after November 1, 2005 for review of the prices provided for in the MMC ended). For
invoicing the amounts of such variation, the Resolution also stipulated that it should be broken down and charged in 55 installments.
The plaintiffs petitioned the court to extend the stay of the proceedings for a further 12 month period. In this regard, on March 9, the
Court issued Resolution SE No. 433/2007 whereby the Minister of Energy extended the Contractual Transition Period, provided for in
the Heads of Agreement, to the date on which the rate table resulting from the Full Rate Annulment comes into force, which is
February 1, 2008. The Resolution also indicated that the stay of actions provided for in the Heads of Agreement was extended through
to the time when the above rate table comes into force, when actions could be taken again always provided that Edesur had fulfilled
certain obligations. On August 1, 2007, the Court decided to maintain the stay through January 8, 2008, at the request of the parties.
As the Court required the parties to inform in regard to the situation related to the process of negotiation in accordance with the
Agreement Document, on January 19, 2008 the parties described the delay in the implementation of the Rate Review and requested
the arbitrators to extend the current interruption for a 9 month period, notwithstanding that if there are doubts in regard to the approval
of the Rate Review, they can urge to begin the process again before the end of the extension period. The Republic of Argentina did not
have objections to the request. The decision of the Court informed on March 28, 2008 was to extend the interruption until
November 19, 2008. On that date the Court would request the parties to inform about the situation of the process of negotiation in
accordance with the Agreement Document and then it would decide in regard to the need to continue or not with the arbitration
proceeding. After the expiration of the interruption of the proceeding that had been authorized until November 19, 2008, a
communication from ICSID was received on November 20, 2008. Such communication stated a period until December 1, 2008 to
inform about the status of the negotiations between the parties in order to solve on the interruption of the arbitration proceeding. On
December 1, 2008 the plaintiffs informed the Court about the status of the actions that gave rise to the interruption of the arbitration
proceeding and requested the extension of the interruption until June 30, 2009 in order to cover the period for the effective date of the
Rate Review of Edesur; notwithstanding that, if the plaintiffs have doubts about the approval of the Rate Review as agreed, the
plaintiffs reserved the right to request to start the proceeding again without the need for awaiting for the end of the period of extension
of the interruption that the Court may agree. On December 3, 2008 the Republic of Argentina informed the Court that it is not opposed
to continue the interruption of the proceeding. We are waiting for the Court’s confirmation and communication of the interruption
requested.
Amounts: Enersis, US$574.7 millions, Chilectra US$723 millions and Endesa Chile US$9.2 millions plus interest.
Plaintiff
:
Omaira Cely Vargas and Rosa Elvira Viracachá Tunarosa, through lawyer Martha Teresa Briceño de
Valencia
Demanded
: Cámara de Comercio de Bogotá, Mr. Alvaro Pérez (liquidator of Luz de Bogotá), Endesa Internacional
S.A., Enersis S.A., Agencia Islas Cayman, Chilectra S.A., Agencia Islas Caymán y Enersis Internacional
(shareholders of Luz de Bogotá)
Tribunal
: Third Civil Court of Bogota Circuit
Case/Identification : Case file No. 2006-0315
Summary of proceedings: On July 15, 2004, Mr. Alvaro Pérez Uz (linked to the Endesa, S.A:Group), liquidator of Luz de Bogotá
S.A., registered minutes No. 26 of July 9, 2004, containing the final winding up count, in the Bogotá Chamber of Commerce. Payment
for such registration was Col$48,000. The remainder that was distributed to the partners amounted to Col$1,764,208,721,394, which is
the sum, according to the plaintiffs, making up the base to which 0.7% to be paid to the Department of Cundinamarca, should be
applied, according to Ordinance 24 of 1997 and articles
F-96
226, 229 and 230 of Law 223 of 1995. The Chamber initially rejected the registration so that the liquidator should include the
distribution of the surplus as a document with no value. Based on articles 89, 218 and 431 of the Commercial Code, the liquidator
stated that the liquidation minutes did not need to state the amounts of the surplus. The Chamber accepted the argument and registered
the minutes. According to the plaintiffs, the Department of Cundinamarca lost Col$12,349,461,050 as a result. Consequently, the
plaintiff petitions for the Chamber to be ordered to pay that amount, plus penalty interest, plus a penalty of 160% for inaccurate
declaration, plus 15% for the tax not paid as an incentive in affairs involving administrative morality. Mrs. Martha Teresa Briceño de
Valencia bought the litigation rights of Mrs. Omayra Cely and Rosa Elvira Viracachá Tunarosa, who filed the original lawsuit.
Process status: The judicial decree dated May 6, 2008 resolved some evidence and rejected other evidence. For this reason, the
representative of Endesa filed a resort that was favorable. Through judicial decree dated June 11, 2008 the Court ordered the
submission of evidence for October 15, 2008 and the proof of private documents that it had rejected initially. On August 21, 2008 it
was decided to withdraw the attestation of Dr. John Bayron Arango, who had stated that his possible contribution was not significant
from a judicial point of view. On August 25, 2008 the Court accepted that withdrawal. On October 15, 2008 the attestations of Lucy
Cruz de Quiñones, Rodrigo Hernández Estrada and Álvaro Cala Carrizosa took place. On October 22, 2008 the Court accepted the
transfer of litigious rights to be activated on behalf of Martha Teresa Briceño de Valencia to Rosa Elvira Viracacha Tunarosa and
Helder Navarro Carriazo. The proceeding is pending in regard to the end of the period allowed for producing evidence and transfer for
pleadings of conclusion. At the same time on December 13, 2007 the Tax Authority of Cundinamarca issued a Tax Assessment to the
Chamber of Commerce of Bogotá for Col$44 billion, including a sanction for inaccuracy. The Chamber filed an appeal for
reconsideration on February 13, 2008. The District of Cundinamarca has one year to solve the appeal. We do not exclude the
possibility that this may result in a dispute relating to an action under administrative law, in which Endesa Internacional, Enersis
Agencia and Chilectra Agencia may be involved as defendants.
Amount: US$30 millions.
31,2007, an appeal for annulment on the form and appeal to a higher court for reversal, thereby challenging the resolution since the
court of the first instance included aspects that should not be compensated according the aforementioned legislation. On May 2, 2008
the Court of Appeal rejected the appeal for annulment based on violation of procedure and issued the same final decision. The Court
fixed the value of square meter of the plot of land of the plaintiff in UF 0.6. On May 19, 2008 an appeal for annulment was filed based
on violation of procedure or violation of law. Supreme Court should be aware of this and issue a resolution. On June 23, 2008 the
aforementioned appeals were officially recognized as filed. On June 22, 2008 the proceedings started to be processed in that court. On
November 18, 2008 the Supreme Court considered as admissible the appeals for annulment based on violation of procedure or
violation of law.
Amount Ch$2,006 million.
Plaintiff
:
Internal Revenue Service (“IRS”)
Defendant
:
Enersis S.A.
Court
:
Tax Court
Case/Identification :
10.825-07RR
Summary of proceedings: On April 28, 2007, Enersis was notified of Summons No. 21 of 2007 by the IRS, whereby this Agency
requests that the Income Tax returns filed for business years 2003 and 2004 should be clarified, amended or confirmed. The above
Summons refers to several operations performed in those years. On June 28, 2007, the Summons was answered.
Process Status: On July 31, 2007, the IRS notified Enersis of Resolution 151, whereby it accepted Enersis’s answer to several points in
the summons while maintaining its position with regard to others. The IRS was requested to submit the points of disagreement to an
Administrative Reconsideration with the alternative of an appeal. On December 6, 2007, Enersis was notified that the resolution held
the appeal to have been filed and a report had been requested from the tax inspector. On April 4, and again on September 15, 2008 the
request for a Report to the Regulatory Agency that the audit made was made again.. To date the report has not been issued.
Amount: Ch$41,889 millions - US$66.585 million
Chilectra S.A.
Plaintiff
: Gladys Calderón Rojas
Defendant
: Chilectra S.A.
Court
: 19th Civil Court of Santiago
Case/Identification : Case No. 5540-2000
Summary of proceedings: Mrs. Gladys Calderón Rojas filed a claim against the appraisal by a Committee of Good Men setting the
easement for Chilectra on the plaintiff’s property in Quilicura at Ch$54 millions.
Process status: On July 19, 2007, the definitive appealable judgment, ordering payment to the plaintiff of 118,590 UF for the easement
for Chilectra on her property, was notified. Whereas clause 36 of the ruling states that, as provided for in article 68 of Statutory Decree
1 of 1982 of the Ministry of Mines, compensation should only be paid for the concepts listed, that is to say, land occupied by the
towers; strip of land; protection strip; indirect influence strip; damage caused by use of access roads to the property; and reduction of
the buildable surface area as a result of the easements. On July
F-97
ANNUAL REPORT
Plaintiff
: Rosendo Andrés Contesso Beltra and María Elena Concha Camaño
Defendant
: Chilectra
Court
: 4th Civil Court of Santiago.
Case/Identification : 2571-2007.
Summary of proceedings: Legal action for material damages and moral prejudice non-contractual liability as a result of serious
injuries (partial amputation of both arms) suffered by Mr. Rosendo Andrés Contesso Beltra, a worker of Luis Estay V. Ingeniería
Eléctrica Construcción Ltda., which event occurred on October 17, 2005, while he was changing a light-bulb on a lampost, a task
commissioned to his employer by the Municipality of Pedro Aguirre Cerda.
Process status: A plea of dilatory exception due to incompetence of the petition was filed and rejected. On June 19, the plea for the
defense against the lawsuit was raised. On June 29, the rebuttal was made. On July 13, Chilectra lodged the rejoinder. On July 19, the
court summoned the parties to a reconciliation hearing. On September 28, the writ of evidence was ordered. On January 30 the
evidence was notified and on March 12 and 13 the plaintiff produced the evidence of witnesses. The period of evidence expired on
March 24. In April 2008 some resolutions were issued as a result of the measures requested within the period of evidence. In
May 2008 a number of burdens resulting from evidence measures required by the parties were solved. Also, the Court ordered to send
notes to different institutions. At June 2008 some responses to notes requested by the parties have been received within the period of
evidence. On July 1, 2008 the parties were notified to hear the final judicial judgment. On August 11, 13 and 25, 2008 the response
notes from the Municipal Department of Works, National Institute of Social Security (INP in Spanish) and the Superintendence of
Social Security (SUSESO in Spanish) were received. On November 18, 2008 the Court ordered a measure to solve in a better way the
inspection of the lamppost located on the corner of Ramona Street and Yungay Street in the District of Pedro Aguirre Cerda. This
measure was taken on December 11, 2008 and both parties and the trial Judge were present there.
Amount: Ch$3,000 millions.
Edesur S.A.
Plaintiff
: Asociación Coordinadora de Usuarios Consumidores y Contribuyentes - ENRE.
Defendant
: Edesur
Court
: N°2 Federal Civil and Commercial First Instance Court, Registry of the Court N° 6, La Plata
Case/Identification : 38676/03
Summary of proceedings: The said institution filed a measure through which it expects ENRE and Edesur to be ordered to suspend
cabling works in Quilmes, a province of Buenos Aires, as well as the company’s “Sobral” sub-station due to the damage the
installations may cause to the population’s health.
Process status: After a hearing convened by the court and another hearing at the ENRE, which were attended by the parties mentioned
in the preceding paragraph, a number of technical measures were implemented to diminish the CEM values, even below the values set
in the applicable norms. No new developments have occurred in this trial ever since.
Amount: Undetermined
F-98
159
160
enersis08
Plaintiff
: Users affected by a mass power outage in Buenos Aires
Defendant
: Edesur
Court
: Courts and Civil and Commercial Courts of the Federal Capital of Buenos Aires
Case/Identification : (Various processes)
Summary of proceedings: As a result of a prolonged outage in February, 1999, which affected 160,000 clients, a large number of
claims for damages caused to such users began to be received as of mid 2000.
Process status: This involves several proceedings, started on different dates, so each at its own procedural step depending on its degree
of progress. Currently, 5,034 proceedings are being handled.
Amount involved: Arg$ 24.9 millions or US $ 7.2 millions.
Plaintiff
:
Edesur
Defendant
:
National State (Ministry of Economy)
Court
:
N° 3 Federal Administrative First Instance National Court, Registry of the Court N° 5.
Case/Identification
:
1856/97
Summary of proceedings: In accordance with a provision in Power Law 24065, the power sector concessionaire companies must pay a
significant rate to the ENRE with the purpose of financing its controlling and regulating activities (the rate is paid by Edesur, among
other concessionaires.) These expenses must not exceed annually the amount of the rate paid, thus giving rise to a financial surplus
which, instead of being allocated to the Argentinean government, must be refunded to the companies. In this regard, the action was
filed to nullify a resolution of the General Agency for Management of the Economy Ministry, which allocates to the Argentine
Treasury these financial surpluses. The Company believes this resolution to be confiscatory in nature, because the rate represents a
payment for a service provided, and no portion of it should become income for the government.
Process status: The Supreme Court is in the process of issuing its ruling.
Amount: Undetermined.
ANNUAL REPORT
Plaintiff
: Edesur
Defendant
: Transportes Metropolitanos Gral. Roca.
Court
: First Instance National Commercial Court, Registry of the Court N° 1
Case/Identification
: 87934/03
Summary of proceedings: Edesur promoted an action to declare settlements in public property free-of-charge, taking into
consideration that the company Transportes Metropolitanos General Roca S.A. (T.M.R.) intends to charge an annual rent for every
crossing or power line wiring along the rails (existing or future) over land designated as railroad service property.
Process status: Edesur obtained from the corresponding Court a precautionary measure through which the company is not obliged to
pay rent while the procedure is pending resolution. The proceedings returned to the Federal Court of La Plata and the trial is in the
status in which the judge must issue a first instance sentence.
Plaintiff
: Edesur S.A.
Defendant
: Local Government of Buenos Aires (LGBA)
Court
: Court of Buenos Aires No.7 for Actions under Administrative and Tax Laws, Office No.13
Number/Identification : 2955/00 - 6262/99
Summary of proceedings: Edesur objects the regulation through which the LGBA tries to collect an annual fixed charge for each
underground transformation center set up by Edesur in the public thoroughfare and oblige Edesur to assume the costs to be incurred
in the removal of such centers, if required. The objected regulation violates the Concession Agreement.
Procces/Status: The Court of Appeal for Actions under Administrative Federal Law pronounced a final judicial decision confirming
the appealable judgment favorable to Edesur. The result of the lawsuit will depend on the possible filing of an Extraordinary Resort
by the LGBA.
Plaintiff
Defendant
Court
:
:
:
Edesur
Municipality of Berazategui
N° 2 Federal Administrative First Instance Court for Civil, Commercial and Administrative Trials,
Registry of the Court N° 5 in La Plata
Case/Identification
:
11,859/05
Summary of proceedings: Legal action was taken against the Municipality of Berazategui, to the effect of declaring the right of Edesur
to continue the necessary works to construct the “Rigolleau” Substation, located in the department of Berazategui, which were
suspended by the sued Municipality through Decree N° 758/05, whose unconstitutionality and unenforceability is requested in the
lawsuit.
Process status: The judgment is in the process of being issued.
Plaintiff
Defendant
Court
:
:
:
Plaintiff
: Users and Consumers Union.
Defendant
: Edesur
Court
: N° 11 Federal Administrative First Instance National Court, Registry of the Court N° 21.
Case/Identification
: 142321/02
Summary of proceedings: The Users and Consumers Union want a modification of the type of rate applied to the many condominium
owners’ consortiums existing in the City of Buenos Aires and Edesur. This would imply an important reduction of the values to be
invoiced in the future to these consortiums, as well as the obligation for retrospective reimbursement of “unduly” received amounts.
Process status: The appealable judgment is in the process of being issued.
Edesur
Municipalidad de Berazategui.
N° 2 Federal Civil, Commercial and Administrative First Instance National Court, Registry of the Court
N° 5, La Plata.
Case/Identification
: 11.893/05
Summary of proceedings: A lawsuit was filed against the Municipalidad de Berazategui, so that it allows Edesur to render public
services consisting in distributing electricity, for which it must install an underground electrical line under the western sidewalk of
street 5, between Avenida Mitre and Calle 146, in Berazategui. The installation was suspended by the defendant through Decree
No.1207/05, of which the plaintiff is seeking that it be pronounced unconstitutional and inapplicable. Also, an injunction was
requested from the court. The court granted the injunction, suspending the application of Decree No. 758/05, and ordering the district
authorities to refrain from stopping the development and/or completion of the installation of the underground 132-KV line linking the
sub-station located there, as well as the adequacy and remodeling of the line.
Process status: The Court decided favorably with regard to the petition for a precautionary measure, suspending application of the
Decree and enabling Edesur to set up its facilities and then energize them with the intervention of ENRE and Universidad Nacional de
La Plata. The community appealed against the precautionary measure. The Municipality filed a plea against the service of process.
Since the above precautionary measure had become a self-gratifying measure, a petition was filed to have the proceeding disregarded.
F-99
F-100
ANNUAL REPORT
Plaintiff
: Consumidores del Sur Asociación Civil (non profitable organization)
Defendant
: The State and Edesur
Court
: N° 5 Administrative and Tax Court of the City of Buenos Aires, Registry of the Court N° 9
Case/Identification
: 8803/07
Summary of proceedings: This proceeding addresses the validity of retroactive collection of the rate increase stipulated in National
Executive Decree 1959/06. Consequent to the above, the petition has been made for the defendants to return the amounts of money
received pursuant to the above regulation and to rule that the obligations generated by it have been abated.
Process status: Formality after the plea for the defense.
Amount: Arg$59 millions or US $ 17.1 millions.
Plaintiff
: Edesur
Defendant
: Government of the Town of Buenos Aires (GCBA)
Court
: N° 8 Administrative and Tax Court of the City of Buenos Aires, Registry of the Court N° 15
Case/Identification
: 25442/07
Summary of proceedings: Several administrative acts decreed by GCBA whereby it required that documentation from the 2003 tax
period should be furnished were challenged, since such petition is time-barred according to the regulations of article 34 of the Edesur
Concession Contract.
In each of the acts being challenged, the GCBA Revenue Service has instituted preliminary proceedings and fined Edesur S.A.,
sustaining in its resolutions that the offense of failure to comply with formally ordered tax duties (Articles 89 and 91 of the Tax Code)
had been constituted. Such decision-making is inadmissible insofar as it contravenes the tax regimen of the Public Power Utility,
under national jurisdiction.
Process status: The local government of Buenos Aries (LGBA) made its plea for the defense and raised a plea for the evidence
provided by Edesur. Edesur made its plea for the transfer of the plea raised by the LGBA.
Plaintiff
: Edesur
Defendant
: Buenos Aires City Government (GCBA)
Court
: N° 7 Administrative and Tax Court of the City of Buenos Aires, Registry of the Court N° 13.
Case/Identification
: 2956/01
Summary of Proceedings: To contest a GCBA provision through which payment of procedure expenses on permits requested by
Edesur for the installation of its lines is demanded, as well as payment for the corresponding inspections carried out by the GCBA, in
addition to a rent for using public roads with power systems for the provision of power distribution public utilities.
Process status: We are waiting for the decision by the Superior Court of Buenos Aires. The LGBA filed a complaint against the judge
for refusing to allow an appeal for unconstitutionality against the unappealable judgment favorable to Edesur.
Edelnor S.A. (“Edelnor”)
Plaintiff
: Edelnor
Defendant
: Municipality of San Martín de Porres
Court
: Municipality of San Martín de Porres
Number/Identification : 945-2007
Summary of proceedings: This is a dispute relating to an action under administrative law against several resolutions of the
Municipality of the District of San Martín de Porres, which impose fines for the works in the public thoroughfare with no municipal
authorizations. Edelnor is able to carry out these works in accordance with the current electric legislation. However, the
aforementioned Municipality wants to collect a rate or tax for the use of public areas.
Process status: On August 15, 2008 a decision was issued. The prosecuting authority considers that the claim is baseless. On
October 16 the trial hearing took place with the respective oral report. Due to the creation of new courts in the basic
module of Condevilla, the file has been redistributed to the Court of Combined Jurisdiction of Condevilla, which is the same court that
fixed the date for a new oral report for January 14, 2009 through resolution dated October 28, 2008.
Amount: Soles 41 millions or US $13.1 millions
Codensa S.A. (“Codensa”)
Plaintiff
Defendant
Court
Case/Identification
: Electroenergía S.A.
: Codensa.
: 12th Civil Court of the Bogota Circuit.
: Case records No.11001310302120040037901.
Summary of proceedings: In 1997, by means of a competitive call for bids, the EEB awarded Electroenergía S.A. ESP the supply of
energy to the regulated market, which today represents 14% of Codensa’s demand. The contract should have begun to be processed on
January 1, 2003. In their claim, the plaintiff states, (a) the first 4 years of the contract were awarded to Betania and the next 11 years to
Electroenergía; (b) this caused a financial imbalance for Electroenergía; (c) In light of this complaint, the EEB awarded the contract
for 13 years; (d) the contract was established in Codensa’s name; (e) on April 30, 1998, officers of the two companies met and
stipulated the following obligations: (e.1) negotiation of a contract from 2000 to 2015; (e.2) the need to agree to a risk hedge clause;
(f) Electroenergía insisted on entering into a new, additional contract, without having received any reply from Codensa to date;
(g) Codensa cannot seek to obtain a declaration of non-performance by Electroenergía of obligations that are still not enforceable,
because the contract has not been registered with the administrator of the SIC; (h) Electroenergía made a series of investments to set
up an energy plant (Termobiblis), and signed contracts, all of which was frustrated by the Codensa’s behavior totally contrary to
precontractual “good faith”; and (i) Codensa is liable for loss of earnings and indirect, special or consequential damages suffered by
Electroenergía.
Process status: The proceeding is in the period allowed for producing evidence.
Amount: Col$220 billion or US$ 89 millions.
Plaintiff
: Roberto Ramírez Rojas (Class action lawsuit).
Defendant
: Codensa, Bogotá Capital District and Alcaldía Zonal de San Cristóbal.
Court
: Cundinamarca Administrative Court, Third Section - Sub-section “B”.
Case/Identification
: Case file 03-1473.
Summary of proceedings: The Circo Victoria transmission lines I and II were built by Empresa Eléctrica de Bogotá in 1962, when the
site in which the towers holding it are located, was not populated. However, when Codensa was born as a legal entity, on October 23,
1997, one of those towers (No.731) was surrounded by buildings put up after 1983 but prior to 1996. The plaintiff demands protection
for the following collective rights: a healthy environment; sanitization, security and prevention of technically foreseeable disasters;
that buildings abide by statutory regulations.
Process status: This is being processed by the Council of State for unappealable judgment.
Plaintiff
: Conjunto Residencial Iguazú (Class action lawsuit).
Defendant
: Codensa and Soacha City Government.
Court
: Cundinamarca Administrative Court, Fourth Section - Sub-section “B”.
Case/Identification
: Case file N°25000232700020030134201
Summary of proceedings: Codensa S.A. ESP was providing public lighting services to the Soacha district since the inception of the
company (on October 23, 1997). The public lighting infrastructure in the Soacha district is mostly owned by Codensa, through a
contribution from Empresa Eléctrica de Bogotá (together with other assets).
Soacha district called on bidders for the service of public lighting, the winner being Soacha Ciudad Luz (“Sociluz”), a temporary
entity with which district representatives entered into concession contract No.004 on January 19, 1999. Codensa did not take part in
the concession contract. However, after that contract had been executed, Sociluz hired Codensa to supply electricity, and rented the
Codensa infrastructure, billing and collection systems. These are the conditions under which Codensa is related to the rendering of
public lighting services in Soacha.
Process status: Procedural step / instance: On November 20, 2008 the Council of State issued an unappealable judgment annulling the
appealable judgment and all the petitions of the claim were rejected. The higher court argues that the
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claims are inadmissible as the claim dealt with the rights that are not collective and that class actions are not the means to obtain the
discontinuance of the collection of a tax and the refund of the paid amounts. Judgment notified by edict on November 27, 2008.
Plaintiff
: Jorge Ernesto Salamanca Cortés y Luis Alejandro Montero.
Defendant
: Codensa, Nación - Ministerio de Minas - Unidad de Planeación Minero Energética.
Court
: 3rd Administrative Court of Bogotá Circuit
Case/Identification
: Case file 05-2357
Summary of proceedings: In 14 areas of Bogotá there are at least 35 built-up quarters more than 25 years old where the high and
medium voltage grid is “located in an anti-technical manner at several points, including in the front gardens of several houses”, so that
people are seen to be exposed to the risk of electrocution. The plantiffs consider that, as it is laid out, the grid creates a huge risk to
which Codensa has not paid sufficient attention. Consequently, they are petitioning the Constitutional Judge to order the Company to
lay the grid underground.
Process status: Period allowed for producing evidence. The Court appointed a new expert, who requested 30 days to issue a report
(and he was given those days). On December 1, 2008 the Court required the expert to issue a report on the irregularities in
construction work within 10 days.
Plaintiff
Defendant
: Sonia Andrea Ramírez Lamy
: Ministry of the Environment, Housing and Territorial Development; Autonomous Regional Corporation of
Cundinamarca — CAR; Technical Administrative Department of the Environment — DAMA;
Administrative Department of District Planning, and others.
Court
: Administrative Court of Cundinamarca, Section Two, Sub-section “B”.
Case/Identification
: Case file No. 25000232500020050066202
Summary of proceedings: The action seeks to make the environmental authorities preserve the Eastern Hills of Bogota as a forest
reserve, and also recover the resources affected by illegal settlements, illicit mine workings, irregular building permits, tree-felling and
exploitation of flora and fauna.
Process status: On September 22, 2008 the Council of State ordered to accept the transfer to plead the conclusion and the C.A.R. filed
an appeal for reconsideration of judgment. The appeal for reconsideration of judgment filed by C.A.R. on October 8, 2008 has not
been solved. The office received twenty petitions from different parties concerned in the proceeding with different petitions.
Amount: Undetermined .
Ampla Energia e Serviços S.A. (“Ampla”)
Plaintiff
: Meridional S/A Servicios, Emprendimientos y Participaciones
Defendant
: Ampla
Court
: 9th Chamber of Rio de Janeiro Public Finance
Case/Identification
: 98.001.048296-8
Summary of Proceedings: Meridional - Mistral and Civel, represented by Meridional, claim they are creditors of the former state
electricity distribution company CELF, resulting from the existence of contracts of jobs undertaken for said company. Meridional in
its representation demands payment of invoices supposedly outstanding and the payment of contractual fines for rescission of the
contracts for the above mentioned jobs, for the sum of R$136,085,827.20
Process status: On December 18, 2007 the court records returned from the prosecuting authority and were favorable to Ampla’s
argument; therefore, the civil appeal of Meridional lost its purpose. On March 7, 2008 the presence or absence of appeals in the three
lawsuits attached was requested to be certified. On March 18, 2008 the appeal judge voted favorably to Ampla, allowing Ampla to file
other resorts such as infringing embargos and special resorts. The parties filed resorts (embargos of statement). On November 28,
2008 the court records were sent to the Public Prosecutor’s Office. This Office considered that the resorts filed by the parties should
be disallowed. On November 18, 2008 the proceeding was processed to issue a final decision. On November 28, 2008 a resolution was
issued. On December 2, 2008 the resolution was published so that the parties state their opinions on the resorts.
Amount: R$ 337.3 millions - US$ 142.6 millions.
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Plaintiff
Defendant
Court
Case/Identification
: Enertrade - Comercializadora de Energía S.A
: Ampla
: Getulio Vargas Foundation Chamber for Conciliation and Arbitration
: Arbitration procedure No. 03/2005
Summary of Proceedings: On December 22, 2002, Ampla and Enertrade signed a 20-year electric energy sales contract (40MW
average). This contract was sent to ANEEL for its evaluation and resulting official approval. ANEEL approved the contract because
certain conditions were fulfilled, among them, a 25% reduction in the price of the contracted energy (from R$97.4 R$72.6/MWh).
Given this determination, Ampla only paid the value authorized by ANEEL. ENERTRADE sustained that the contract was tacitly
approved by ANEEL due to the passage of time and obtained, through judicial demand No.2003.34.00.023785-2 against ANEEL, a
provisional judicial measure that suspended the effects of the condition imposed by ANEEL, declaring the contract tacitly approved
by that entity. ANEEL has not yet been able to have this provisional measure annulled. With the purpose of confirming the right
assured by the provisional measure, Enertrade, in December 2005, established an arbitration procedure against Ampla, under nº
3/2005 in the Cámara de Conciliación y Arbitraje of the Fundación Getúlio Vargas/RJ. Ampla continued to pay the reduced rate
because, in addition to not being part of the process, it was not authorized to transfer the full cost to its tariffs.
Process status: On February 29, 2008 the Arbitration Court delivered a judgment establishing a due date (March 24, 2008) for closing
the investigation. On March 17, 2008 the Arbitration Court extended the closing of the investigation for 30 days. On March 20, 2008
the Arbitration Court delivered a judgment extending the period for completing the arbitration proceedings No.03/05 and No.04/06 to
September 22, 2008. On April 28, 2008 Ampla filed a claim against the expert’s requirements. On May 16, 2008 the Arbitration Court
deferred the extension of the period for 15 days for delivering the accounting expert’s finding. On June 10, 2008 the accounting expert
filed his finding at the Arbitration Court and to the technical assistants of Ampla and Enertrade. On June 20, 2008 Ampla informed
that it was opposed to some points in the expert’s finding. On June 27, 2008 the Arbitration Court fixed the date for the adjudicative
hearing (July 22, 2008). The hearing took place on July 22, 2008. On August 29, 2008 the Arbitration Court turned down the claim for
partial judgment filed by Enertrade. On December 19, 2008 the Court informed the extension of the period to issue the judgment for
60 days.
Amount R$ 110.2 millions - US$ 46.5 millions.
Plaintiff
: Ampla
Defendant
: Enertrade - Comercializadora de Energía S.A
Court
: Getulio Vargas Foundation Chamber for Conciliation and Arbitration
Case/Identification
: Arbitration procedure No. 04/2006
Summary of Proceedings: Counterclaim by Ampla against Enertrade. The facts of this procedure are the same as arbitration procedure
03/2005. Bearing in mind that the arbitration rules of this Chamber do not consider counterclaims, Ampla petitioned for a new
arbitration to be established, with a view to decreeing the nullity of the contract or, alternatively, its avoidance. In this case, the same
arbitration court has jurisdiction for hearing the case, which shall be processed together with the other proceeding. On August 28,
2006, Ampla petitioned in the arbitration court for the nullity of the contract entered into with Enertrade, or, alternatively, vacating it,
maintaining simply that the contract is null and void, since it was not ratified by ANEEL, as stipulated in the law, which was an
essential condition for entering into the contract; also null and void because it infringes Law 8.884/94; it was entered into in unfair
terms and conditions, typifying the abuse of the power of control; and the contract fails to comply with its business function.
Process status: Rebuttal and rejoinder presented. On January 12, 2007, the parties presented graphs showing the stock ownership of
the companies involved in the arbitration, as well as also information about the companies that audited the parties and the companies
linked to them. At the request of the Court of Arbitration, Ampla clarified the information presented, indicating the other auditing
companies of the Endesa Spain Group. On February 12, 2007, the petition for expert accounting and technical testimony required by
Ampla was ordered, as well as also for expert witnesses. On March 2, 2007, the technical assistants were appointed and the legal
standing and role of the witnesses presented. Enertrade challenged the issues presented by Ampla. On March 16, 2007 Ampla filed a
reply to the challenge. On April 2, 2007, the Court of Arbitration notified the extension of the deadline for concluding the arbitration
proceedings by 178 days. The new deadline is September 28, 2007. On May 21, 2007, the experts for the technical and accounting
expert
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testimony were named. The progress of this proceeding is the same as above for the arbitration proceeding of Enertrade against
Ampla.
Amount: R$ 40.2 millions - US$ 17 millions.
Plantiff
: Getec Guanabara Química E Industrial S/A
Defendant
: Ampla
Court
: 3er Juzgado Civil de Niterói
Case/Identification
: 1996.002.017152-9
Summary of Proceedings: Refund equal to the equivalent of 16.67% of electric energy invoices during March of 1986 through
March of 1991, and March 1991 going forward, twice such amount, with interest accrued since date of litigation (September 26, 1997)
and legal fees based on 20% of the sentence.
Process Status: Execution phase, in which Ampla sustains the need for dismissal of the sentence. In a decision issued on September 4,
2008 the courts refused special appeal presented by Ampla._
Plaintiff
: Unión Federal
Defendant
: Ampla
Court
: Organo Especial del TRF de la 2ª Región
Case/Identification
: 2009655-3
Summary of Proceedings: COFINS — INMUNITY. In the nineties, a large number of the Brazilian public utility companies files
resorts against the tax known as COFINS (Contribution for Financing Social Security) because they considered that the Brazilian
Constitution exonerated them from that tax. Most of the companies lost the lawsuits. Ampla won the lawsuit (for the period from 1996
to 2001), because the Tax Administration forgot to file an appeal against the decision handed down by the court of appeal. However,
the Prosecutor’s Office of the Federal Union brought an exceptional action known as “an action for annulment” to attempt to annul the
unappealable judgment favorable to Ampla.
Process status: In December, 2003, the Regional Court of Rio de Janeiro (equivalent to the Court of Appeal) confirmed the
inadmissibility of the action for annulment filed by the Federal Union. On December 21, 2007, the Federal Union filed a Special
Resort against the decision of the Rio de Janeiro Court rejecting unanimously all of its previous appeals. This Special Resort is
addressed to the Higher Court of Law (STJ), the court in Brasilia that rules on unconstitutional issues. On February 29, 2008 Ampla
was notified to submit its reasons against the special resort filed by the Federal Union. The special resort was filed without the
extraordinary resort and there is judicial practice that indicates that both resorts should be filed together. Therefore, there are
arguments to consider that the extraordinary resort of the Federal Union has become null and void. On April 30, 2008 the Regional
Federal Court (Court of Rio) decided not to accept the special resort of the Federal Union, whose objective was to take the discussion
on the admissibility of the annulment action to the Superior Court (Court of Brasilia). On June 12, 2008 such decision was published.
The Federal Union could still file a resort against this decision. The Federal Union filed a resort at the Superior Court on July 11,
2008. Ampla will be notified so that it files its pleadings within a 10 day period. The decision so that Ampla files its pleadings was
published on September 11, 2008. Ampla filed its pleadings on September 22, 2008. The judgment of the resort has not been delivered
yet.
Amount: R$ 387 millions - US$ 166 millions.
in tax regimen (from earned to accrued), the taxable amount of the COFINS tax increased during the first semester of 2002.
Process status: The action was notified in 2003. The decision of the 1st administrative instance went against Ampla and an appeal with
the second administrative instance was filed on October, 2004. The resort was ruled on recently in the 2nd administrative instance,
partly favorable to the Treasury in terms of the period when changes to the Constitution come into force and partly favorable to Ampla
in terms of the tax on income due to the change in tax regimen from earned to accrue. Taxes in question are estimated to be 35%.
Once the amount owed by the SRF is determined, it may be enforced. The part of the Document that was accepted by the Court of
Appeal is R$87,040. This will have to be confirmed by the Secretaria SRF. Once the amount due by the SRF is calculated, this agency
will be able to start the executory process, when Ampla will discuss the constitutional issue. On April 8, 2008 the Treasury
Department filed a resort against this decision at the Court of Appeal. On September 19, 2008 Ampla was called upon to make its plea
for the defense against the special resort filed by the Treasury Department. On October 6, 2008 Ampla made its plea for the defense
against the aforementioned resort and also filed a resort at the Court of Appeal to try to change the part of the decision that was not
favorable to Ampla. The judgment has not been delivered yet.
Plaintiff
Defendant
Court
ID Number
: SRF
: Ampla
: Commissariat of the Niterói Federal Collection Tax
: Infraction Proceeding 0710200/00112/05 and Administrative
Trial 10730.003110/2005-55 (d.38)
Summary of Proceedings: FRNs — In order to finance its investment in Coelce, in 1998 Ampla issued FRNs (bonds) for $350
millions maturing in 2008, which were subscribed by Cerj Overseas (an overseas subsidiary of Ampla, which former name was Cerj).
The bonds have a special tax regimen consisting of no withholding tax (15% or 25%) being applied on payment of interest abroad,
always provided that, among other requirements, there is no advanced amortization before the average term of 96 months. In order to
acquire these bonds, Cerj Overseas obtained financing outside Brazil consisting of a six-month loan. At the end of the period
(October, 1999) because of problems of access to other sources of financing, Cerj Overseas had to refinance with Ampla, which
granted it a loan in reales. The Secretary of Federal Tax Collection argues that the tax concession had been lost in 1998, since the
loans in reales granted to Cerj Overseas by Ampla were the equivalent of an advanced amortization of the debt before the average
amortization period of 96 months. Currently there remain FRNs for $ 169 R$40.2 millions. (The balance was capitalized in 2004).
Process status: The notice of infringement was notified in July, 2005. In August, 2005, Ampla filed a resort with the 1st administrative
instance, and it was rejected. In April, 2006, a resort was filed with the Council of Taxpayers (2nd administrative instance). On
December 6, 2007, the Council of Taxpayers issued its verdict completely favorable to Ampla. The period for executing the verdict
and publishing the decision is estimated at about 6 months. After the publication of the decision, the SRF will have 30 days to file a
resort.
Plaintiff
: Secretaria de Receita Federal (“SRF”, theBrazilian IRS)
Defendant
: Ampla
Tribunal
: Comisaría de la Recaudación de Impuestos Federal de Niterói/RJ
Rol/Identificación
: Auto de Infracción Nº 0710200/00112/05 y Juicio Administrativo nº 10730.003110/2005-55
Summary of Proceedings: COFINS — Period after Immunity. In December, 2001, the article of the Federal Constitution on which
Ampla had based its discussion of immunity with regard to the COFINS, pursuant to which Ampla did not pay this tax, was amended.
There is an article in the constitution that states that legislative changes come into force 90 days after their publication. Based on this
article, Ampla started paying the COFINS tax as of April, 2002. However, the SRF argues that this constitutional regulation only
applies to changes to regulations involving laws, but not the Constitution itself, whose amendments should come into force
immediately. The SRF also claims that, as a result of Ampla’s change
Plaintiff
: Secretary of Treasury
Defendant
: Ampla
Court
: Office of Commissioner of Treasury
Case/Identification
: Infringement Document No.03.177555-4; Administrative Proceeding No.E-34/059.193/05
Summary of Proceedings: ICMS FINE. In 2002, the State of Rio de Janeiro stipulated via a decree that the ICMS should be calculated
and paid on the 10th, 20th and 30th of the same month accrued. Because of cash problems, Ampla continued to pay the ICMS under
the former system (payment until the 5th of the month after it accrued).
Process status: Notwithstanding an informal agreement with the State of Rio de Janeiro, and 2 amnesty laws, in October, 2004, the
State of Rio de Janeiro brought a proceeding against Ampla to collect the fine for late payments; Ampla appealed against the fine in
the same year. In February, 2007, Ampla was notified of the decision of the 1st administrative instance, which confirmed the
proceeding brought by the State of Rio de Janeiro. On March 23, 2007, an appeal was lodged with the Council of Taxpayers of the
State of Rio de Janeiro (2nd administrative instance). Ampla obtained a preliminary ruling in its favor that enabled it to bring this
resort without having to make a deposit of furnish a guarantee for 30% of the value of the updated fine. Waiting for the decision of the
Council of Taxpayers.
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Plaintiff
: Companhia Brasileira de Antibióticos (CIBRAN)
Defendant
: Ampla
Court
: 1st Civil Court of Itaboraí
Number/Identification : 2006.023.008555-6
Summary of proceedings: This is an action in which the plaintiff requires the compensation for damages as a result of loss of products
and raw materials, breaking of machinery, among other things, occurred due to the poor service provided by Ampla between 1987 and
May 1994, as well as compensation for moral prejudice.
Process status: On June 4, 2008 a Judge’s decision was published. The Judge partially accepted the precautionary measure filed by
Ampla to recognize the statute of limitations of the plaintiff’s claim in regard to the period from January 1993 in accordance with the
regulation of the Civil Code. A resort was filed against that decision so that in the event that the legal significance of the action is lost,
it is possible to try to recognize the statute of limitations based on the Consumer Code. CIBRAN filed a resort against that last
decision on June 17, 2008. On August 27, 2008 CIBRAN’s resort was rejected, as was published on September 1, 2008).
Process status: On February 1, 2008 the judgment was published and was partially favorable to Ampla. On February 6, 2008 Ampla
filed resorts requiring a change to the decision in regards to the payment of court costs and attorneys’ fees. The resorts filed by Ampla
were partially accepted in regards to changing the judgment regarding the attorneys’ fees. On May 28, 2008 the plaintiff’s resorts were
rejected. The decision was published on June 16, 2008. On July 1, 2008 Ampla filed a resort of appeal and so did the plaintiff. We are
waiting for the opening of the period to file arguments against the resort of appeal.
Amount: R$49.6 millions - US$ 20.9 millions.
ANNUAL REPORT
Plaintiff
: Qualita’s Tecnología y Servicios Ltda and Symon de Souza Coury
Defendant
: Ampla
Court
: 4th Civil Court of Niteroi County
Case/Identification
: 2005.002.024695-9
Summary of Proceedings: The plaintiff brought this suit pleading that it had been created to serve Ampla since October, 1999 and that
this contract should be in force until March 31, 2009, being able to be extended. The plaintiff petitioned for redress for material
damages and moral prejudice caused by an alleged unilateral annulment of the contract by Ampla, which would have caused the
plaintiff damages of about R$54 millions.
Process status: On January 29, 2008 the adjudicative hearing took place. Also, the judgment was delivered and determined a
successive 10 day period for filing reports. Ampla filed its reports on February 11, 2008. On August 7, 2008 the judgment was
published. This judgment considered the plaintiff’s request as inadmissible, and the issue as abated as result of the resolution of the
legal significance. The judgment also ordered the plaintiff to pay the court costs and the attorney’s fees amounting to 10% of the
lawsuit. On November 25, 2008 the resolution was published and determined the filing of arguments against the resort of appeal filed
by Qualita.
Plaintiff
: Laboratorios B. Braun S.A
Defendant
: Ampla
Court
: Regional Federal Court (RFC) of the 1st Region
Summary of Proceedings: Refund of the amounts wrongly collected and the exclusion of invoices to be expired. All of this for 20%
including interest and monetary correction.
Process status: Pre-trial proceedings. The producing of the expert evidence was deferred. Dr. Sylvio Batista dos Santos Filho was
appointed as an expert. He should be notified to file his finding in 20 days. The parties were enabled to appoint a technical assistant
and propose points to be considered in the investigation. Dr. Sylvio Batista did not accept to conduct the expert’s investigation and a
new expert was appointed, Dr. Tavares Moreira, who should be notified to inform whether he accepts to conduct the expert’s
investigation.
Plaintiff
: Cibrapel S/A Industria de Papel y Embalajes
Defendant
: Ampla
Court
: Single Chamber of Guapimirim County
Case/Identification
: 1998.073.000018-6
Summary of Proceedings: 1) Plaintiff asks the court to order Ampla to indemnify the material and other damages caused by the poor
quality of the services rendered by Ampla between the years 1991 and 1998. 2) Plaintiff asks the court to order Ampla to refund the
amounts paid as a result of the price increase implemented following administrative resolutions 38 and 45 of 1986, which have been
considered illegal, both by the government and by the courts.
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Plaintiff
: Astec Assesoria de Serviço Técnicos e Tributários Ltda.
Defendant
: Ampla
Court
: 4th Civil Court of Niteroi
Summary of proceedings: The plaintiff alleges that Ampla has not complied with clauses of the agreement signed by the parties
regarding the rendering of consulting services.
Process status: This legal action was filed on December 19, 2007. Ampla was notified to make its plea for the defense as rendered by
Ampla on February 21, 2008. The plaintiff made its plea for the defense on May 26, 2008. The Judge deferred the admission of
additional proof of private documents and accounting expert evidence, appointing Dr. Robson Gago as an expert. The parties were
entitled to appoint technical assistants and prepare the points to be considered. After that, the expert will be notified so that he states if
he accepts the work and presents his fee proposal. The analysis of the producing of oral evidence will be performed after the filing of
the expert evidence. The expert returned the proceeding with his fee proposal.
Plaintiff
: Perma Ind de Bebidas S/A
Defendant
: Ampla
Court
: 2nd Civil Court of Niterói
Summary of proceedings: Refund of the excessive collection of electric energy rates.
Process status: Period for the hearing of the case after the redistribution of the proceeding to the Provincial Justice.
Plaintiff
: Fábrica Boechat Ltda.
Defendant
: Ampla
Court
: Regional Federal Court (RFC) of the 1st Region
Number/Identification : 1999.01.00.019832-8
Summary of proceedings: Refund of the excessive collection of the electric energy rate.
Process status: Period allowed for filing of an appeal.
Plaintiff
: Municipality of Itaboraí
Defendant
: Ampla
Court
: 2nd Civil Court of Itaboraí
Summary of proceedings: The claim is the review of the amount collected for the supply of electric energy to the plaintiff and double
refund of the value paid in excess for the last ten years for the public lighting in streets, squares and municipal public areas. The
plaintiff alleges that the collection is not consistent with the actual consumption, as the concessionary company does not consider
night time and turned off bulbs correctly. This results in a difference in excess for 21.89% in invoices.
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Process status: The proceeding is in the period allowed for the investigation. Return of court records by the expert on July 23, 2008.
The expert also informed his fees for R$102,000. On August 25, 2008 Ampla was required to notify the expert so that he was
informed of the method of work used in the investigation.
Amount: R$23.8 millions - US$ 10 millions.
Plaintiff
: Televisión Cidade S/A.
Defendant
: Ampla
Court
Number/Identification : 2004.002.008999-1.
Summary of proceedings: On May 3, 2004 the plaintiff filed an action to reduce the value of the agreement for the passing (support) of
the plaintiff’s cables in the network of Ampla, alleging that the price of the agreement is excessively high.
Process status: On September 20, 2006 the court records were sent to the expert and they are still under investigation.
Plaintiff
: Real Veículos Com E Ser Ltda.
Defendant
: Ampla
Court
: Regional Federal Court (RFC) of the 2nd Region
Summary of proceedings: Refund of the excessive collection of electric energy rates.
Process status: Currently within appeal period.
ANNUAL REPORT
of the measure that authorized the seizure of 5% of the billing. This was approved by the Head Judge. Electrovidro filed a resort
whose judgment has not been delivered yet. Also, the Supreme Court has not delivered a judgment of a resort in which Ampla tries to
correct a material error of the final judicial decision arguing that this would give occasion for the execution of the cascade effect of
Electrovidro. An objection to the serving of the judicial decision was filed in first instance in order to require the interruption of the
serving until the final judicial decision on the incident. This was approved by the judge. Electrovidiro did not agree on the above and
filed a resort. The judge approved to continue with the serving, that is the 5% seizure of Ampla’s billing. Therefore, Ampla requested
to reconsider that decision. The responsible judge informed that he understands that the preliminary measure is also interrupted. We
are waiting for the judgment of the objection to serve the judicial decision and the resorts at the Superior Court and Court of Rio de
Janeiro.
Plaintiff
: Companhia Eletromecânica Celma
Defendant
: Ampla
Court
: Regional Federal Court (RFC) of the 2nd Region
Number/Identification : 1994.002.005084-9 (2001.002.007238-8)
Summary of proceedings: Refund of amounts collected and received excessively.
Process status: The final judicial decision that solved the settlement was published. Ampla filed a resort against such final judicial
decision. The final judicial decision rejected the objection and fixed the final value of the serving in R$298,853.85, plus interest and
monetary correction that were already set from the date of the last calculation until its actual payment. Some resorts were filed that
were later rejected and resulted in the filing of an appeal. We are waiting for the plaintiff’s response.
Plaintiff
: Electrovidro S.A
Defendant
: Ampla
Court
: 8th Tax Court of the County of Río de Janeiro
Case/Identification
: 1995.001.065045-7
Summary of proceedings: Lawsuit dated June 14, 1995 in which it is argued that AMPLA infringed the rules of Statutory Decree
2283/86 which stipulated freezing of prices while the Cruzado Plan was in force. This plan corresponds to Porteria 45/86 of the
DNAEE which increased the rate for electrical energy for industrial use by 20%. The plaintiff petitions for the charge to be declared
illegal and for restitution of the amounts paid incorrectly with interest penalties.
Process status: The objection to the claim filed by Ampla on February 20, 2008 was rejected. Against the decision of harmonization of
the expert’s finding issued on November 8, 2007, both parties filed resorts (seizures of statement); however, they were rejected and so
new resorts were filed (torts) by Ampla and Electrovidro (file numbers 2008.002.02344 and 2008.002.02723). In regard to resort
No.2008.002.02344 filed by the plaintiff, the Court of Rio de Janeiro issued the decision to establish that the calculations of the
settlement sentence should include the wrong increase value until the invoices of December 2005, when the expert’s finding was
completed, recognizing the “cascade effect”. After that, due to the decision of its resort (tort), the plaintiff required to notify Ampla to
pay R$16,178,697.80 in accordance with Article 475-J of CPC (Brazilian Civil Code), in regard to the improper “cascade effect” of
the refund of the amounts for wrong payments, which was deferred by the judge. The related decision was published on May 5, 2008.
A special resort was filed to change the Court’s Decision. After that, a tort was filed to give leave for the special resort, which was
distributed to the superior court and will be assessed by the Judge. Also, Ampla filed precautionary measure No.2008.014.00082. The
precautionary measure was deferred by the 3rd Vice-Presidency of the Court of Rio de Janeiro, which determined the interruption of
the executory process. After that, the special resort was rejected and the precautionary measure was annulled. Also, we filed a new
precautionary measure at the superior court. This measure was abated without considering the merits of the case. A tort was filed. This
tort has not been assessed yet. In first instance Electrovidro took up again the execution of the cascade effect in the restated amount of
R$18.7 millions , including the 10% fine of Article 475-J of CPC, calculated by the Judge. Therefore, we filed a letter of bank
hypothecation, which was accepted with guarantee of the appealable proceeding. The seizure of on line assets required by
Electrovidrio was turned down. For this reason, a tort was filed. In this resort of Electrovidro, on October 1, 2008 the Court authorized
the blocking of 5% of the billing of Amplia up to 18.7 million reales. Ampla requested the interruption
Plaintiff
: Engebra Empresa de Energia do Brasil Ltda. e Usina Termeléctrica de Anápolis (UTE Daia)
Defendant
: Ampla and other 26 concessionary companies
Court
: 6th Court of Goiana
Number/Identification : 2008.02220430
Summary of proceedings: Discussion on the value of the energy purchase-sale contract and the value of VUC (variable unit cost of
generated energy) in accordance with the contract. The plaintiff requests the rate recomposition and compensation.
Process status: The claim was notified on May 21, 2008. An issue of jurisdiction is being processed. On July 17, 2008 Ampla and
Coelce filed a resort (tort) against the decision on the jurisdiction dispute that provided a precautionary measure. The judge of the 6th
Civil Court of Goiás was appointed to process the emergency measures. On September 1, 2008 the decision of the Court was
published. The Court did not recognize the jurisdiction dispute unanimously. On September 10, 2008 Ampla and the other defendants
filed resorts at the Superior Court. On November 10, 2008 the Superior Court issued a decision, in which it rejected the resorts. As the
lack of jurisdiction of the state justice of Goiânia to adjudicate the lawsuit was determined, we are waiting for the distribution of the
proceeding to the Federal Court of the Federal District so that it continues with the proceeding.
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Plaintiff
: Usina Termeléctrica de Anápolis (UTE Daia)
Defendant
: ANEEL, Federal Union, AMPLA and other 26 concessionary companies
Court
: 15th Court of the Federal District
Summary of proceedings: Discussion on the value of the energy purchase-sale contract and the value of VUC (variable unit cost of
generated energy) in accordance with the contract. The plaintiff requests the rate recomposition and compensation.
Process status: On August 7, 2008 the final judicial decision was published. This decision approved the request for the withdrawal of
the case by the plaintiff. The plaintiff and one of the defendants (Elektro) on August 20 and 21, 2008, respectively, filed an appeal.
Amount: There is no amount (continued in lawsuit No.2008.02220430 above)
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ANNUAL REPORT
Plaintiff
: Fraspol Ind e Com Ltda
Defendant
: Ampla
Court
: 7th Civil Court of Niterói
Summary of proceedings: Refund the amount paid excessively. The plaintiff alleges that there was an illegal increase in the electric
energy rate during the “Crossed Plan”. Process status: Ampla presented the expert’s fees for starting the works in progress. The
findings of the expert investigation were prepared and the parties expressed their opinions through a resolution that will be published.
Plaintiff
: Sadia Concórdia S A
Defendant
: Ampla
Court
: 1st Civil Court of Duque de Caxias
Number/Identification : 1997.512.004615-5 (2004.001.10345)
Summary of proceedings: The Court ordered Ampla to refund the standing charges for electric energy rates paid in excess (20%) due
to the application of the adjustments in accordance with Resolutions 38 and 45 during the period of price freeze, as well as their
effects on the subsequent periods, plus interest and monetary correction in accordance with the consumer price index (CPI) and the
attorneys’ fees fixed in 20% of the total value of the refund.
Process status: We are waiting that the plaintiff starts the executory process of the court decision.
Plaintiff
: Cerámica Marajó Ltda.
Defendant
: Ampla
Court
: 3rd Civil Court of Niteroi
Summary of proceedings: Eliminate the illegal 20% increase in the invoices for electric energy consumption based on Resolution
45/86 of DNAEE (Brazilian National Water and Electric Energy Department) and its consistent reflections on the subsequent invoices
and refund all the amounts illegally received.
Process status: In executory process; we are waiting for the preparation of the technical report by the judicial expert. Proceeding sent
to the expert on March 19, 2008. Ampla filed an objection to the expert finding.
Plaintiff
: Pinto de Almeida Engenharia S/A
Defendant
: Ampla
Court
Summary of proceedings: Absence of obligation of the plaintiff to pay the electric energy increased by Resolutions 38 and 45 and
refund of amounts wrongly paid from March 1986, plus interest and monetary correction; order the defendant to reduce future
invoices in the same proportion of the increases supported by those resolutions.
Process status: The lawsuit was reopened by the plaintiff to start the executory process of the court decision.
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Plaintiff
: Roberto Barbosa Ramos and Almira Barbosa Ramos
Defendant
: Ampla
Court
: Court of Arraial do Cabo
Summary of proceedings: Compensation for death of a child due to electrocution. The parents try to obtain compensation for moral
prejudice equivalent to 20,000 minimum wages for R$ 59 millions.
Process status: Proceeding in the period allowed for pre-trial proceedings. We are waiting for the filing of the fee proposal by the
expert and the subsequent start of the expert’s investigation. The expert’s fees were proposed for R$ 4,750. That decision was
objected. The objection has not been processed yet. After that, the expert evidence should be performed. The expert maintained the
value of his fees. Therefore, there was a new request so that the expert expresses his opinion on a possible reduction of his fees and
financing of the amount required.
Plaintiff
: Compañía Brasileña de Antibióticos (Cibran)
Defendant
: Ampla
Court
: 11th Court of the Treasury of Rio de Janeiro
Summary of proceedings: Questioning of the calculation base of the ICMS (Brazilian VAT) as it includes the value of the same tax
(“inside” calculation).
Process status: In the initial period allowed for pre-trial proceedings. On March 5, 2008 the prosecuting authority returned the
proceeding and we are waiting for the proceeding to start being processed.
Plaintiff
: Union of Workers in the Niterói Electrical Energy Industry representing a class action suit by 2841
employees
Defendant
: Ampla
Court
: Niterói Work Chamber
Case/Identification
: Labour Complaint 884/1989
Summary of Proceedings : In April 1989, the Niterói Union, in representation of 2841 employees, launched an action claiming salary
differences of 26.05% since February 1989 that were related to the economic plan instituted by Decree Law 2.335/87, or “Summer
Plan”.
Process status: Ordinary proceedings have finished. The current discussion is focused on the compliance with the final judicial
decision where execution motion to dismiss was filed. The main proceedings were accepted in accordance with the execution motion
to dismiss. We are waiting for the decision on the resort filed the plaintiffs.
Plaintiff
: Selma de Souza and 122 other plaintiffs
Defendant
: Ampla
Court
: 2nd Employment Chamber of Niterói
ID Number
: Work Complaint No.3142/1995
Summary of Proceedings : The plaintiffs were fired by the Company and demand to be reinstated and to have their right of
employment stability recognized.
Process status: Accessory Innominate Action for Provisional Resort filed, taking into account that the previous Action for Provisional
Resort, which kept the plaintiffs out of the company, was repealed by the effect of the Tort filed in the Claim proceedings submitted
by the plaintiffs to the TST, which understood that it was competent to do justice to the suspensive effect in question. In the face of the
position adopted by the TST, this Action for Provisional Resort was filed seeking to stay the effects of the advanced tutelage and also
have a suspensive effect on the ordinary resort filed in the pleas and proceedings of the case, with such being favorable to the
company’s position. The court records were taken from Brasilia to the Regional Labor Court (RLC) to consider the legal significance
of the resort; however, this will be adjudicated after the proceeding of the resort filed at the Federal Supreme Court.
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ANNUAL REPORT
Plaintiff
: José Reynaldo Ferreirinha and Others
Defendant
: Ampla and Brasiletros
Court
: 3rd Labor Court of Niterói
Number/Identification : Labor Claim 2422/1990
Summary of proceedings: The plaintiffs requested the jointly sentence, differences of complements and additional of retirement
pension, plots expired and to be expired with reflections and attorneys’ fees.
Process status: We are waiting for the decision on the appeal filed by Ampla.
Plaintiff
: Ampla
Defendant
: Instituto Nacional de Seguro Social (INSS)
Court
: 1st Federal Court of Niteroi
Summary of proceedings: Ampla filed an action against INSS (National Social Security Institute) requesting the right to receive the
contribution to the occupational accident insurance (OAI) in accordance with the level of risk of the activity mainly carried out in
every place of business (parent company and subsidiaries) legally incorporated and the level of risk of the activity carried out by the
company.
Process status: The company required the producing of proof of private documents, expert evidence and evidence of witnesses.
Evidentiary stage closed and judge is considering his ruling since July 31, 2008.
Amount: R$ 0.2 millions - US$ 84,424
Plaintiff
: Federal Union
Defendant
: Ampla and others
Court
: 5th Federal Court of Niterói
Number/Identification : 2008.51 of February 20001414-1
Summary of proceedings: The purpose of this executory process distributed to Ampla and its directors and former directors is the
service of dispossession of debit: 35.887.326-6 and 35.887.328-2, regarding the contribution to the OAI. The legal significance was
discussed in proceeding No.2005.51 of February 20011845-3. Ampla filed a claim requiring to exclude from the liabilities of this
executory process Ampla’s directors and former directors, considering that this company already took on the responsibility for the
debit of this action when fully guaranteed the action for provisional resort No.2008.51 of February 20001005-6. The transfer of the
letters of hypothecation guaranteed in this action for provisional resort to the executory process in order to file resorts against
executory process was required (this was granted in the trial).
Process status: On November 7, 2008 we filed execution motion to dismiss regarding the current directors in order to exclude them.
On November 11, 2008 resorts against the executory process were filed. On November 19, 2008 a judicial decision was issued. This
decision stated the opinion of the Public Prosecutor’s Office of the Treasury on Ampla’s claim of motion to dismiss and the negative
representations of service of the legal process regarding the former directors. On November 21, 2008 the court records were sent to the
Public Prosecutor’s Office of the Treasury. We are waiting for the opinion of the Public Prosecutor’s Office of the Treasury on the
claim of motion to dismiss filed by Ampla.
Plaintiff
: Ampla
Defendant
: Unión Federal
Court
: 2nd Federal Court of Niterói.
Case/Identification
: Ordinary Proceeding 96.0035652-1 and Civil Appeal 98.02.09149-9.
Summary of proceedings: PIS — This is an ordinary proceeding in which AMPLA seeks to obtain tax immunity for collection of the
tax known as PIS. It also seeks for the Federal Union to be sentenced to reimbursing all the amounts collected over the past five years
since August, 1996, based on paragraph 3 of article 155 of the Federal Constitution.
Process status: Appealable judgment unfavorable to Ampla. On August 5, 2008 the judicial decision was published and considered as
admissible the resorts (seizures of statement) filed by Ampla. Ampla filed a claim to confirm what was requested and request that the
executory process should start. On October 15, 2008 the decision that determined the remittance of the proceeding to the judicial
accountant so that the calculations filed by Ampla were compared was
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published. Ampla filed a resort (seizure of statement) against such decision so that the proceeding is not sent to the judicial accountant
as the judicial accountant already expressed his opinion that he has no technical qualifications to compare the calculations. We are
waiting for the judge’s ruling.
Plaintiff
: Office of Treasury
Defendant
: Ampla
Court
: Board in Full Attendance
Number/Identification : Infringement Document No.01.082242-7 and Administrative Litigation No.E-04/893.637/99
Summary of proceedings: Tax sanction due to presumptive difference in the payment of ICMS (Brazilian VAT). Ampla is an ICMS
debtor for wrong VAT credits in connection with amounts of entry of products intended for fixed assets.
Process status: On July 27, 1999 Ampla filed its objection to the Infringement Document, which was considered as inadmissible by
the Tax Review Authority of the State of Rio de Janeiro. As a result, Ampla filed a voluntary appeal, which was no accepted by the 3rd
Chamber of the Taxpayers Council. Due to the new decision unfavorable to Ampla, Ampla filed a resort at the Board in Full
Attendance. The proceeding is in the period allowed for steps and then will be adjudicated by the Board in Full Attendance. The
decision of the court has not been issued since February 25, 2008
Plaintiff
: Municipality of Magé
Defendant
: Ampla
Court
: Municipal Office of the Treasury
Number/Identification : Infringement Document No.1056
Summary of proceedings: Infringement Document prepared in order to collect the Land Use Rate between 2000 and 2005.
Process status: Ampla filed an objection to the infringement document. Waiting for the appealable decision of the Court.
Plaintiff
: ASOBRAEE - Brazilian Association of Consumers of Water and Electricity
Defendant
: Ampla
Court
: 5th Civil Court of Niteroi County
Case/Identification
: 2006.002.002621-4
Summary of Proceedings: The Plaintiff presented this action requiring that the DNAEE nº 038 and 045 Resolutions of 1986 be
declared null. These resolutions established the rate adjustment, for which AMPLA may be condemned to the restitution of the
improper charge, equivalent to 20% of what it would have charged all the consumer in the period from March to November 1986, as
well as to force Ampla to present the complete schedule of payments made for all of the consumers in the period from March to
November 1986.
Process status: The resort filed by Ampla against the decision that adjudicated the incident of objection to the value of the lawsuit
became a retained resort for the preliminary assessment for the appeal trial by the Court of the State of Rio de Janeiro.
Plaintiff:
: Consumer Defence Commission of the Legislative Assembly of the State of Rio de Janeiro
Defendant
: Ampla
Court
: 7th Business chamber of the State of Rio de Janeiro
Case/Identification
: 2005.001.084370-8
Summary of Proceedings: This is a Public Civil action launched in order to prevent the installation of electronic measurement meters.
The plaintiff states that this modernization’s only purpose is to prevent theft of electricity and would actually deprive consumers of
their right to information. Plaintiff argues that it is Ampla’s responsibility to detect electricity theft in other ways and not put the
burden on the consumer.
Process status: Ampla submitted allegations against the Appeal filed by the Plaintiff and the proceedings were then remitted to the
Justice Court. The Appeal entered the court under No. 2006.001.22785 and was distributed to the 15th
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civil chamber of the court. The court, by unanimous decision, rejected the appeal, which was published on August 16, 2006. The
Plaintiff then filed a Special Recourse, with the proceedings being remitted to the 3rd Vice-presidency of the court. On October 16,
2006 Ampla submitted its allegations. On October 25, 2006, the proceedings were remitted to the “Procuraduria General de Justicia”
and were returned on November 22, 2006. On January 3, 2007, this resort was rejected. On January 16, 2007, the Plaintiff filed
instrument tort against the decision that rejected the special resort. On March 6, 2007, the instrument tort was remitted to the Higher
Court. On April 12, 2007, the case records were remitted to the reporting clerk, where they have been to this date. On September 11,
2007, the decision accepting hearing of the Special Resort by the Higher Court was published. On October 16, 2007 the court records
were sent to the Superior Court.
lines in the area of the Municipality of Paraty; 4) the injunction for the Public Prosecutor’s Office to be a party to or to act in the case
of legal expenses; and 5) The injunction of the Granting Power in the case, the State of Río de Janeiro, to express an interest in the
case through its legal representative.
Process status: The court records were returned by the expert on June 11, 2008. On June 30, 2008 the court records were sent to the
Municipal Treasury and they were returned on July 31, 2008. The Municipal Treasury filed an objection to the expert’s fees proposal.
On August 21, 2008 the court orders were published. These court orders determined that the parties should express their opinion on
the expert’s motion, which reduced his fees proposal to R$60,000.
ANNUAL REPORT
Plaintiff
: Macao Consumer and Worker Defense Association - AMADECONT
Defendant
: Ampla
Court
: Single Chamber of the County of Río das Ostras
Case/Identification
: 2004.068.001287-1
Summary of Proceedings: The plaintiff launched this action requesting partial power in advance to prevent the Defendant from
charging the TMIP (“Municipal Street Lighting Rate”), and requesting that Ampla be required to refund the amounts wrongly charged
and pay the costs of the trial.
Process status: The prosecuting authority filed a resort (a tort - Proceeding 2008.002.22940) against the decision that rejected the
trusteeship. On August 15, 2008 the decision was published. This decision accepted the tort and determined that Ampla is refrained
from collecting the TIP in the electric energy invoices of consumers in the district of Río das Ostras until the end of the lawsuit. On
August 22, 2008 Ampla filed resorts (seizures of statement). On September 1, 2008 the judicial decision was issued. This decision
accepted the resorts (seizures of statement) imputing the change of the effects to such resort and rejected to follow up the resort of the
prosecuting authority (tort). On September 5, 2008 Ampla informed the Judge about the decision of the appeals for reconsideration of
judgment filed against the decision issued in the trial documents of the resort. On November 3, 2008 this was removed from the resort.
Plaintiff
: General Attorney’s Office of the State of Rio do Janeiro
Defendant
: Ampla and Municipality of Paraty
Court
: Single Court of Paraty County
Case/Identification
: 2005.041.001008-9
Summary of Proceedings: The plaintiff brought this suit petitioning, by way of advanced tutelage, sentencing of the Municipality of
Paraty to abstain from collecting the Contribution for Street Lighting (CIP), under penalty of a fine of R$50,000.00 (US$23,277.46)
and, additionally, that Ampla should be compelled to collect the CIP separately, although on the same energy consumption bill, using
different bar codes, under penalty of a fine of R$10,000.00 (US$4,666.79).
Process status: On July 3, 2008 the judgment was delivered. This judgment considered the proceeding as abated with no resolution of
the legal significance. On July 11, 2008 the court records were sent to the prosecuting authority and they were returned on July 29,
2008. On August 4, 2008 the court records were sent to the Treasury Department and they were returned on August 8, 2008. The
judicial decision was published on September 24, 2008.
Plaintiff
: Municipality of Paraty
Defendant
: Ampla
Court
: Single Court of Paraty County
Case/Identification
: 2005.041.001124-0
Summary of Proceedings: The plaintiff brought this suit petitioning for: 1) Acceptance of the precautionary measure for Ampla to
abstain from shutting off the power supply services, under penalty of a fine of R$10,000.00 (US$4,666.79) to be applied to each noncompliance of the delegated order, without detriment to any other possible penalties; 2) That Ampla should maintain the regularity of
the system of supply and maintenance of the power transmission grid in satisfactory conditions for the users; 3) That Ampla should be
sentenced to submit and execute within a reasonable period of time a project to modernize the grid, consisting of improvements to the
power transmission equipment and
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Plaintiff
: Universidade Federal Fluminense
Defendant
: Ampla
Court
: 4th Federal Court
Summary of proceedings: The plaintiff filed a claim for the absence of judicial relationship between the plaintiff and the Province of
Rio de Janeiro, in regard to the ICMS (Brazilian VAT) on the electric energy supply. The plaintiff alleges the unconstitutionality of
the ICMS on electric energy invoices as it has tax immunity.
Process status: On June 13, 2003 the judicial decision was published. The decision considered the plaintiff’s request inadmissible. On
July 13, 2005 the appeal filed by the plaintiff was sent to the reporting clerk.
Plaintiff
: Sindicato da Indústria de Cerâmica para Construção de Campos (Union of the Construction Ceramics
Industry of Campos)
Defendant
: Ampla
Court
: 6th Civil Court of Niterói
Summary of proceedings: The Union of the Construction Ceramics Industry of Campos filed an action against Ampla alleging that the
ICMS should not affect the demand for hired power, but the demand for power actually measured.
Process status: On June 23, 2008 the courts orders were published. These court orders determined the opinion of Ampla. On July 1,
2008 Ampla signed the claim and informed that it already completed the costs of the bench warrant. On August 19, 2008 the positive
warrant of writ of summons by the State was attached. On October 9, 2008 this was removed from the letter rogatory. The letter
rogatory is expected to be attached to the court records.
Plaintiff
: State Attorney General’s Office
Defendant
: Ampla
Court
: 2nd Civil Chamber of Town of Saint Gonzalo
Case/Identification
: 2003.004.034117-9
Summary of Proceedings: Plaintiff launched the Public Civil Action requesting first that Ampla be ordered to supply the regular
consumers of Saint Gonzalo a quality electrical energy service without interruptions, and take all measures necessary to prevent such
interruptions, even if in order to achieve this it must restructure all of its equipment; in the event it is absolutely necessary to interrupt
the supply, then the restoration of supply must be immediate or the fine shall be R$10,000 a day.
Process status: On November 13, 2008 the court records were sent to the prosecuting authority and they were returned on
November 13, 2008.
Plaintiff
: Federal Prosecuting Authority
Defendant
: Ampla
Court
: 17th Federal Court of Rio de Janeiro
Summary of proceedings: A criminal indemnification action based on Ampla’s administrative investigation of the electronic meters.
Requires as a precautionary measure that Ampla refrains from (i) issuing an invoice or collecting
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ANNUAL REPORT
based on measurements made by electronic meters versions CS 5.0.2, 6.0.1 and 6.0.2; (iI) interrupting the electric energy supply to
consumers that are in debit in connection with invoices issued based on electronic meters versions CS 5.0.2, 6.0.1 and 6.0.2; (iII)
inserting in restrictive credit records the names of such users that are in debit. Also requires that ANEEL inspects the compliance with
the precautionary measure by Ampla and that Ampla pays equity damages and moral prejudice through credit in the invoice of electric
energy.
Process status: On December 4, 2008 the resolution was published. This resolution ordered to provide with the copy of the claim filed
by the Federal Office of the Public Prosecutor on July 11, 2008 as it was lost or, if not possible, that both parties express their opinions
(the plaintiffs first) within a ten successive day period.
Amount: R$ 21 millions - US$ 9 millions
Plaintiff
: Ampla
Defendant
: Federal Union
Court
: 4th Federal Chamber of Niterói and 4th Group of the TRF of the 2nd Region
Case/Identification
: Ordinary Action No.96.0035387-5 and Civil Appeal No.1999.02.01.047064-8 (d.4)
Summary of Proceedings: FINSOCIAL - Ampla seeks to obtain the declaration that the tax-legal relationship (tax immunity) does not
exist as regards the payment of the tax called FINSOCIAL, which would have an impact on its gross monthly revenue. It also seeks to
have the Federal Union forced to refund the total amount collected in the last five years, starting from October 1996 and, if the
foregoing is not possible, that the Federal Union be made to refund the difference between the amount paid in accordance with Laws
7,787/89, 7,784/89 and 8,147/90, and that due in accordance with Decree Law No.1.940/82, in the same period referred to above..
Process status: The lower court’s decision declared without grounds the request for immunity, but accepted the petition to declare
unconstitutional the increases in the FINSOCIAL tax rate above 0.5% and the right to offset the said excess in current and future taxes
due. The appeals of Federal Union and Ampla were filed. The proceedings were sent to Federal Regional Court where they are
currently awaiting a judgment on the two appeals The judgment of the appeals filed by Ampla and the Treasury was delivered on
December 2, 2008. The Regional Federal Court rejected the resorts and maintained the appealable decision.
Plaintiff
: Labor Prosecuting Authority
Defendant
: Ampla
Court
: 3rd Labor Court of Niterói
Number/Identification : 2028/2001
Summary of proceedings: The purpose of this action is to order Ampla to refrain from absorbing labor through a company
(subcontract); otherwise, Ampla will be imposed a daily fine for noncompliance.
Process status: The court unanimously rejected the judgment of both resorts to maintain the judicial decision in all respects. Ampla
filed resorts.
Plaintiff
: Sindicato de Trabajadores de las Industrias de Energía Eléctrica del Norte y Noroeste Fluminense (Labor
Union of Electric Energy Industries of the North and Northwest of Rio de Janeiro)
Defendant
: Ampla
Court
: 2nd Labor Court of Campos dos Goytacazes
Number/Identification : 1388/2003
Summary of proceedings: This is a suit intended to order Ampla in the obligation of not doing (refrain from absorbing labor through a
company - subcontract); otherwise, Ampla will be imposed a daily fine for noncompliance.
Process status: Waiting for the period allowed for opinion about the expert finding.
Plaintiff
: Ampla
Defendant
: Federal Union
Court
: 3rd Group of the Regional Federal Court of the 2nd Region and 1st Federal Court of Niterói
Number/Identification : Injunction No. 98 of February 2002033-8 and Appeal against Injunction No.2000 of February 2001.055412-5
Summary of proceedings: This is an injunction against the act to be performed by the Commissioner of the Federal Tax Collection in
Niterói intended to ensure that Ampla is fully indemnified for the tax impairment for the purpose of clarification of the calculation
base of IRPJ (Income Tax on Legal Entities), and negative calculation bases for the purpose of the CSLL (Company Contribution on
Loss of Profits) clarified until December 31, 1994 (excluding 1993) not subject to the 30% limit of taxable profit.
Process status: Appealable judgment totally favorable to Ampla. The Court has not delivered a judgment of the resort filed by the
Federal Union at the Regional Federal Court since February 23, 2005. Due to the decision announced in the court proceedings
98.0207129-3, Ampla paid the infringement document related to such proceeding amounting to R$5,785,915.75. This amount may be
recovered in the event that the lawsuit is favorable.
Plaintiff
: Ampla
Defendant
: Federal Union
Court
: 2nd Federal Court and 4th Group of Regional Federal Court of the 2nd Region
Number/Identification : Action No.96.0035653-0 and Civil Appeal No.98 of February 2021000-5
Summary of proceedings: COFINS — Action filed by Ampla requesting: 1) Decree of tax immunity of Ampla for COFINS (social
security financing tax); and 2) To order the Federal Union to refund the payments made on account of COFINS in the last five years
duly corrected and increased in accordance with legal charges. As a result of the decision processed in the court and announced in
injunction No.92.0113589-4, Ampla changed its requests maintaining only request 2 (refund of payments).
Process status: On May 2, 1997 the final judicial decision was issued. This decision considered as inadmissible Ampla’s request and
ordered to pay the fees based on 5% of the value of the lawsuit. On August 15, 2006 the court rejected the judgment of Ampla’s resort
and accepted the judgment of the supporting resort of the Federal Union so that the proceeding returns to first instance and the Federal
Union files a new plea due to the change in Ampla’s request. On December 6, 2006 the Court’s decision was published. This decision
rejected the judgment of Ampla’s resort. On December 11, 2006 Ampla filed resorts so that the court explains the omission of the
judicial decision. The trial for the resorts is pending.
Plaintiff
: Ampla
Defendant
: Federal Union
Court
: 3rd Group of the Regional Federal Court of the 2nd Region and 1st Federal Court of Niterói
Number/Identification : Injunction No. 98 of February 2007129-3 and Appeal against Injunction No.1998.51 of February 20207129-6
Summary of proceedings: This is an injunction against the Commissioner of the Federal Tax Collection in Niterói intended to ensure
that Ampla to be fully indemnified for the tax impairment for the purpose of the calculation of the calculation base of IRPJ (Income
Tax on Legal Entities) and the negative calculation bases for the purpose of the CSLL (Company Contribution on Loss of Profits ) for
1993, 1995 and 1996 with profits generated in base years 1998 and subsequent years, not subject to the 30% limit of taxable profit.
Process status: Appealable judgment totally favorable to Ampla. The Federal Union filed a resort at the Regional Federal Court
(RFC). The decision of the RFC was to partially accept the appeal filed by the Federal Union. After the publication of the decision of
the court in regard to the appeal, Ampla filed resorts to pre-question some points to be included in the resorts at the superior courts.
The resorts were rejected and Ampla filed a resort at the superior court and superior federal court. On February 22, 2008 the court
orders were published. These court orders accepted the resorts. On April 11, 2008 the proceeding was distributed to the superior court
to deliver a judgment (number of the resort at the superior court 1041385).
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F-118
169
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enersis08
ANNUAL REPORT
Plaintiff
: Ampla
Defendant
: State of Rio de Janeiro
Court
: Superior Court
Number/Identification : Injunction No.2002.001.110494-9
Summary of proceedings: Injunction issued so that the authority refrains from perform any act intended to collect the ICMS (Brazilian
VAT) established by Decree No.31.632/02.
Process status: On October 13, 2008 the Treasury filed its arguments against Ampla’s resorts. On December 18, 2008 the judgment of
the resort was delivered. The judge rejected the judgment of the resort, but another judge request to see the proceeding and interrupted
the judgment.
Plaintiff
: Ampla
Defendant
: Federal Treasury — Federal Union
Court
: Federal Court of Niterói
Number/Identification : Injunction No.2008.51 of February 20004965-9
Summary of proceedings: The purpose of the lawsuit is to exclude the ICMS (Brazilian VAT) from the taxable base of the taxes for
PIS (Brazilian Social Integration Program) and COFINS (social security financing tax).
Process status: The claim was filed on December 17, 2008.
Coelce S.A.
Plaintiff
: Romério Moreira de Deus
Defendant
: Coelce
Court
: Court of the State of Ceará (TJCE)
Case/Identification
: 2000.0161.6981-7.
Summary of proceedings: The Plaintiff is the owner of a plot of land in Aracati/Ceará, where Coelce built several electrification
networks, without having compensated the client. Thus, the plaintiff intends to prevent the construction of new electrification
networks and have the existing ones removed. Coelce won the lawsuit in the first instance by having it dismissed. However, the
sentence was revoked on appeal and Coelce was sentenced to remove the new networks in the process of being installed and pay about
$3.3 millions as compensation. As a result of the above, the plaintiff filed for enforcement of the sentence, petitioning a credit based
on a compensation of nearly $3.3 millions. In parallel, Coelce has appealed for the sentence by the Court of Appeal, in terms of the
compensation granted beyond what was petitioned, to be voided. The plaintiff has already raised a plea against Coelce’s appeal and
notification of the pleading was made to the other party for the rejoinder.
Process status: The plaintiffs succeeded in the legal action filed as they obtained a court order to make Coelce remove the posts
located in their properties. However, instead of requiring Coelce to comply with the court order, the plaintiffs required a compensation
for damages as a result of the setting up of the aforementioned posts, which was in the order of R$9,861,385.07 in accordance with
their calculations at December 9, 1997. This request was considered as inadmissible by the judge. This decision was appealed by the
plaintiffs. This appeal was rejected in July 2007.
Plaintiff
: Cooperativa de Eletrificação Rural do Vale do Acaraú Ltda.
Defendant
: Coelce
Court
: 1st Federal Court of the Ceará Judicial Section
Casel/Identification
: 2001.81.00.008007-0
Summary of the proceedings: An action was filed to review the clause regarding the amount of the lease entered into by the parties for
power grids owned by the plaintiff.
Process status: In its defense, Coelce pleaded that the issue involved interests of ANEEL. Consequently, ANEEL entered the fray and
the proceeding was remitted to the Federal Court. The Federal Court granted the petition made by the plaintiff and increased the
monthly rent to R$35,000.00. Coelce deposited the amount for the first three months after the decision stipulating the increase. Coelce
also appealed for the decision increasing the monthly rent to be repealed.
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Due to the interruption of the decision, Coelce required the identification of the amount deposited. On September 1, 2008 a writ was
issued. This writ gave rise to a negative dispute of jurisdiction. The proceedings are pending until the decision of the superior court.
Amount: R$ 55.6 millions - US$23.7 millions.
Plaintiff
: State Deputy Luiz Carlos Andrade Moraes and Federal Deputy Francisco Lopes da Silva
Defendant
: COELCE, CGTF, ANEEL AND UNION FEDERAL
Court
: 10th Federal Court of Ceará
Case/Identification
: 2007.81.00.006310-3
Summary of proceedings: Popular Lawsuit — Lawsuit brought by a State Deputy and Federal Deputy against Coelce, CGTF, ANEEL
and the Federal Union on April 23, 2007. They are petitioning for immediate recalculation of Coelce’s rate review ratio for 2007,
replacing the thermal energy purchase price with the cheapest available energy; the avoidance of the contract signed by Coelce and
CGTF because of its high cost (high cost of steam-electric energy compared to hydroelectric energy, which would de detrimental to
the consumers of the State of Ceará); and for the additional income obtained by Coelce from May to October, 2005 to be included in
the calculations of Coelce’s rate review. The latter refers to another lawsuit, where Coelce had a provisional precautionary measure
limiting its rate adjustment revoked. During that proceeding, a precautionary measure was in force from May to October, 2005 and,
despite it, Coelce charged this difference retroactively to the consumers. According to the plaintiffs, Coelce should wait for end of the
case to charge these amounts.
Process status: In regard to the main lawsuit, on November 24, 2008 the judge issued a judgment which considered as inadmissible the
plaintiff’s claims. On September 1, 2008 CGTF was notified in regard to this decision. We are waiting for the publication of this
decision and the resort to personally notify the plaintiffs to file a possible resort. In regard to the resort filed against the decision that
rejected the objection to the amount of the lawsuit and after filing arguments, the court records were sent to the judge for analysis. We
are waiting for the judgment of this resort.
Amount: R$ 516 millions - US$218 millions.
Plaintiff
: Bar of Lawyers of Brazil and Others
Defendant
: Coelce.
Court
: 7° Juzgado de Justicia Federal - Sección de Ceará
Case/Identification
: 2005.81.00.006496-2
Summary of proceedings: Civil public action launched with the objective of preventing the application of the rate adjustment
(percentage 23.59%) authorized by ANEEL in April 2005.
Process status: The Supreme Court judge suspended on October 7, 2005 the guarantee that prevented the adjustment from being
applied. Thereby, the concessionaire may apply from that date on the above mentioned adjustment. Coelce had to suspend the
retroactive collection of the installments generated by the time in which the guarantee made it impossible to put the adjustment into
effect. The guarantees are expected to be annulled and Coelce will be able to re-begin collecting the remaining installments On
September 5, 2008 the lawsuit was considered as inadmissible. We are waiting for the publication of the final judicial judgment
Amount: US$44 millions.
Plaintiff
: Inácio Nunes Arruda & Others.
Defendant
: Coelce.
Court
: 2nd Court of Public Finance - Ceará
Case/Identification
: 2000.0122.6248-0/0
Summary of proceedings: Popular action whose objective is to cancel the sales process of Coelce. The plaintiffs allege that in the
process of privatization of Coelce there was no participation of the employees of Coelce; shares were not offered to the employees in
sufficient numbers, and thus they were prevented from gaining control of the Company; that the bidding terms and conditions favored
the participation of foreign companies and removed the incentive for employees of the Company; that there was insufficient publicity
in the bidding; that the public stockholders’ equity of Fortaleza was damaged; etc.
Process status: Faced with the activation of the process there was no protest of any kind by the plaintiffs. The trial awaits the judge’s
verdict.
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ANNUAL REPORT
Plaintiff
: Sindicato da Indústria de Fiação e Tecelagem
Defendant
: Coelce
Court
: 1st Federal Court of Ceará.
Case/Identification
: 2003.81.00.014020-7
Summary of proceedings: Action to declare the 31.29% rate adjustment determined by ANEEL unconstitutional. An action was
brought petitioning for advanced protection, which was granted by the Judge, thereby enabling the Plaintiffs to pay their electrical
consumption minus the 31.29%, without Coelce being able to cut-off their power supply.
Process status: On June 17, 2003, the Judge reconsidered his previous decision and rejected the petition for advanced protection since
such was in the jurisdiction of the Federal Courts. Waiting for the result of the action brought.
Plaintiff
: State Office of Treasury
Defendant
: Coelce
Court
: Tax Review Authority
Number/Identification : Administrative Proceeding No.2006.25755-6
Summary of proceedings: Infringement Document filed for the non-collection of the ICMS in regard to the Difference of
Interprovincial Fractional Part.
Process status: The Infringement Document was filed on November 29, 2006. On January 2, 2007 Coelce filed an objection. We are
waiting for the judgment of the objection.
Amount: R$ 28,9 millions - US$12.3 millions
Plaintiff
: TBM S/A Indústria Têxtil.
Defendant
: Coelce.
Court
: Supremo Tribunal Federal (STF)
Case/Identification
: 441.392
Summary of proceedings: This is a “Trial for Tarifazo”, that corresponds to the different trials begun as a result of the dictation of rate
decrees 38, 45 and 153 of 1986, by the National Department of Water and Electrical of Brazil (formerly ANEEL), which enabled the
different electricity companies of Brazil to increase their rates considerably between the months of March and November 1996. In this
case, the plaintiff seeks the devolution of amounts paid as determined by the decrees abovementioned.
Process status: The appeal against the final judicial judgment that accepted the claim against Coelce was rejected. A special resort was
filed at the Superior Court and an extraordinary resort was filed at the superior federal court. Both resorts were considered as
admissible by the Chief Judge of the Court of the State of Ceará. The fees of the plaintiff’s attorneys for R$800,000 are in the period
allowed for enforcement performance against Coelce. TBM’s lawyer will start applying his professional fees for his work for
R$550,000 in accordance with the final judicial judgment. Coelce was opposed to this fee application in terms of the amount
compensated and the amount of the fees of TMB’s lawyers. The aforementioned opposition was rejected. Coelce filed a claim against
this resolution. We are waiting for the decision of the court. At the same time, Coelce filed a new annulment action, which was also
considered as inadmissible. Coelce also filed a claim against this resolution, but it did not succeed. The special resort was rejected.
The lawsuit was remitted to the Federal Superior Court and we are waiting for the decision about the extraordinary resort.
Plaintiff
: Federal Union
Defendant
: Investluz
Court
: Federal Treasury
Number/Identification : Administrative Proceeding No.10380.012956/2006-84
Summary of proceedings: Claim filed to require COFINS (social security financing tax) credits (effect of COFINS on financial
income, dividends and retirement of shares).
Process status: The claim was filed on December 21, 2006. An objection was filed on January 22, 2007. We are waiting for the
judgment of the objection.
Plaintiff
: State of Ceará
Defendant
: Coelce
Court
: Tax Review Authority
Number/Identification : Administrative proceeding No.2008.03658-0
Summary of proceedings: On April 10, 2008 the Treasury of the State of Ceará issued a Tax Assessment against Coelce. Such
assessment is related to the calculation of the ICMS for 2003 and 2004 based on the comparison between monthly data of gross
income for sales of electric energy from the financial statements and the taxable bases in the calculation document regarding the
ICMS. The amount was changed in accordance with the information furnished by the Office of the Treasury.
Process status: On May 12, 2008 Coelce filed an objection to the Infringement Document. We are waiting for the resolution of the
objection. On November 26, 2008 the appealable decision by the Treasury of Ceará maintained the ICMS Infringement Document
filed against Coelce. December 9, 2008 the aforementioned decision that the ICMS Infringement Document was maintained against
Coelce was notified. The company may file a voluntary appeal at the Taxpayer Council within a 20 calendar day period, which may be
extended for another 10 days, starting from the evidence of the notification in the proceeding. On January 5, 2009 the 30 day period
for the filing of the aforementioned resort for an unappealable administrative decision started.
171
Investluz S.A.
Compañía de Interconexion Energética S.A.
Plaintiff
: CIEN
Defendant
: Federal Union
Court
: 21st Federal Court of the Rio de Janeiro Judicial Section
Case/Identification
: 2005.5101.011614-6
Summary of proceedings: A lawsuit was brought challenging the declaration of unconstitutionality of Law 9.718/98 (enlarging the
base and calculation of PIS and COFINS taxes) and establishing the right to credit and compensation, considering that the
Constitutional Court (STF) found in favor of the taxpayers.
Process status: On February 12, 2007, the decision handed down with regard to the appeal from the Treasury was published,
determining that CIEN should submit a declaration regarding the appeal. On March 12, 2007, the decision regarding the declarations
submitted by CIEN and the supplementary appeal, aimed at considering a barring by limitation after 10 years, not 5, as the lower court
judge had considered, was published. With the declaration by the Public Prosecutor’s Office regarding the declarations and appeal
filed by CIEN having been submitted, the appeals were sent to the judge for final sentencing. Waiting for the decision regarding the
appeals filed.
Amount: R$ 50.9 millions - US$ 21.8 millions. (Active contingency — recovery of credits)
Plaintiff
: Municipality of Itá
Defendant
: CIEN
Court
: Single Court County of Itá (SC)
Case/Identification
: 068.03.000397-8
Summary of proceedings: The Municipality of Itá (SC) filed a legal claim against CIEN petitioning advanced protection to determine
that Itá was the place where the event taxed with ICMS (VAT) in selling electrical energy imported from Argentina, occurred, and
also to determine that the invoices for such operation should obligatorily be issued in Itá—Santa Catarina subsidiary, not in Garruchos
— Rio Grande do Sul, as CIEN normally does.
Process status: On March 11, 2003 the claim was tried by the Municipality of Itá. On March 12, 2003 the early trusteeship required by
the plaintiff was deferred. On April 14, 2003 Cien filed a resort (“tort”) against such decision. On August 16, 2005 the resort filed by
Cien was considered admissible and the claim was abated with no resolution of the legal significance of the claim due to absence of
the required “intention to bring an action” by the Municipality of Itá. Due to this decision on October 10, 2005 Cien filed a resort
(“seizures of statement) so that the amount of the sentence of the Municipality of Itá was changed to “losing party’s cost”. On
November 22, 2005 our resort was considered as
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172
enersis08
inadmissible. Against that decision on February 14, 2006 the parties filed “special resorts”, which were not accepted by the court. On
March 14, 2007 Cien filed a “tort” against that decision at the Superior Court. On October 19, 2007 the Superior Court considered as
inadmissible the “tort” filed by Cien. On October 29, 2007 Cien filed a new resort (“tort”) against that decision. The judgment of this
resort has not been delivered yet. On October 31, 2008 the Municipality of Itá was notified to express its opinion on the resort filed by
Cien. On November 25, 2008 the resort filed by Cien was considered as inadmissible. We are waiting for the publication of that
decision.
Amount: None
Plaintiff
: Municipality of Cachoeira Dourada
Defendant
: CDSA
Court
: Municipal Secretary of Finance
Case/Identification
: None
Summary of proceedings: ISS (Services Tax) — The municipality of Cachoeira Dourada has notified CDSA, through a Claim, that
the Company owes the Municipality the Services Tax (ISS) on generation of electrical energy produced between 1997 and 2000. The
municipality understands that the generation of energy is a service. However, the generation of energy is not on the list of ISS taxable
services (Federal legislation) and, therefore, cannot be considered a taxable event under that tax. The Brazilian Federal Constitution
expressly prohibits application of any tax on electrical energy operations other than the ICMS (VAT), II (Import Tax) or IE (Export
Tax).
Process status: Administrative proceeding: Waiting for the Municipality to make a decision regarding the appeal lodged. If lost, an
appeal will be lodged with the second administrative process. Court proceedings: In parallel fashion, on September 12, 2007, a legal
action was brought to void such administrative collection and declare it inadmissible. On September 28, 2007, the petition was
approved provisionally by the judge and the requirement to pay tax was stayed until the admissibility of the administrative collection
was resolved. On February 13, 2008 the municipality made its plea for the defense and on February 29, 2008 CDSA made its plea for
the defense. On July 21, 2008 there was an appealable decision favorable to CDSA. We are waiting for the opinion of the
Municipality. On August 1, 2008 the decision was published. In the event of loss we will file a resort in the second administrative
instance. The Municipality did not have an opinion (did not file a claim) against the appealable judgment and the period allowed for
that expired. However, the judgment will be reviewed by the court of appeal. This review is an obligatory routine judicial procedure
required by the Brazilian procedural law, when there is a judgment against the Treasury and the amount of the litigation is over 60
minimum wages. We are waiting for the review of the appealable judgment by the court of appeal.
ANNUAL REPORT
Plaintiff
: Federal Treasury of Rio de Janeiro — MF
Defendant
: CIEN - COMPANHIA DE INTERCONEXÃO ENERGÉTICA
Court
: National Tax Court of Rio de Janeiro
Case/Identification
: 18471.000814/2007-48
Summary of proceedings: Fine for Lack of Import Documentation - On July 11, 2007, the Federal Tax Authorities (SRF) issued an
“Infringement Proceeding” against CIEN for imports of energy in 2002. According to the Tax inspector formal requirements required
by general regulations for tax documentation of imports were not met, so a fine equivalent to 100% of the value of the imports was
being imposed. However, there was no approved law whatsoever regulating tax documentation to be prepared when importing
electrical energy until May, 2006. Since May, 2006, CIEN has all the documentation required by the law.
Process status: On August 10, 2007, an appeal was filed with the first administrative instance. On September 14, 2007, the Claim was
judged inadmissible. On the same date, the decision of the first administrative instance was sent to the second administrative instance
(Council of Taxpayers) for a resolution. On December 6, 2007, the SRF published an Interpretative Declaratory Ruling stipulating that
no penalty of fine whatsoever was imposed by reason of the non-existence of electrical energy import and export records for
operations performed until May 2, 2006, the date on which Regulatory Instructions 649 of April 28, 2006 came into force. This ruling
definitively resolves the administrative process dealing with the lack of import records, which has already been won in the first
instance, in CIEN’s favor. A copy of the interpretative ruling was submitted to the Council of Taxpayers, asking for the proceeding to
be closed. Waiting for the Council of Taxpayers to declare the proceeding closed. On February 27, 2008 the claim was sent to the
Third Taxpayers Council. We expect the application of the interpretation favorable to us and that the proceeding is abated.
Endesa Fortaleza S.A. (“Endesa Fortaleza”)
Plaintiff
: Municipality of Cachoeira Dourada
Defendant
: Centrais Elétricas Cachoeira Dourada S.A. (“CDSA”)
Court
: Public Finance Court of Itumbiara County
Case/Identification
: 2005.0334233-0
Summary of proceedings: As a result of the unbundling of CELG, one of whose successors was CDSA, and the privatization of
CDSA, the Municipality of Cachoeira Dourada brought two proceedings against the company charging the ITBI (Tax on Conveyance
of Real Estate).
Process status: 1. Proceeding regarding the conveyance of real estate. Arguments for the defense: The Federal Constitution and the
Labor Code stipulate word for word that the ITBI does not apply to conveyance of real estate in unbundling operations. CDSA’s
appeal against this proceeding is still pending a decision by the second administrative instance (The decision was unfavorable to
CDSA in the first administrative instance - May, 2003). 2. Proceeding regarding the transfer of shares: Arguments for the defense:
The ITBI does not apply to the transfer of movable property (shares), which as recognized by the Court of Goiás (Court of Appeal). In
June, 2006, the Municipality filed for enforcement of the amount of this claim against CDSA, despite it having been declared null and
void by the Court Goiás. CDSA filed a plea of prior judgment with effect of res judicata, and in June, 2007, the Court of Goias
declared the legal enforcement abated since it understood that the writ of execution of the Municipality was not enforceable. On
August 21, 2007, the Municipality of Cachoeira Dourada lodged an appeal against this decision. We lodged our rejoinder on
October 1, 2008. On November 12, 2008 the proceeding was remitted to the Court. On September 23, 2008 the Court of Goiás
delivered a judgment. The court unanimously maintained the appealable decision that had considered as abated the executory process
(decision favorable to CDSA). We are waiting for the publication of the decision. On December 2, 2008 the judgment of the Court of
Goiás was published. We are waiting for the opinion of the Municipal Treasury.
Plaintiff
: Endesa Fortaleza
Defendant
: Federal Union
Court
: 1st Federal Court of Ceará
Case/Identification
: 2002.81.00.020687-1
Summary of proceedings: Generator Set — Endesa Fortaleza filed a lawsuit against the Federal Union towards the end of 2002, with a
view to it recognizing that the goods imported for the turbo-generator sets are “Other Generator Sets”, so as to be able claim the 0%
Import Tax (II) and Tax on Industrialized Products (IPI). The Federal Union argues that the imported goods are not generator sets.
CGTF won an accessory resolution in its favor allowing it to clear the goods through customs at a 0% rate, subject to R$56 million
(US$29 million) — updated at June, 2007 with the court. In order to prevent the taxes from becoming null and void, the Federal Tax
Authorities brought an action requiring the suspension of the tax until the proceedings pending against the Federal Union are resolved.
Process status: The lawsuit against the Federal Union is pending resolution in the lower court. In parallel fashion, the Action brought
by the Federal Tax Authorities (whose enforcement is suspended until the lawsuit against the Federal Union is resolved) was declared
null and void in the first administrative instance because it did not comply with the requirements of form. The Tax Authorities may
well bring another action correcting the errors. On February 21, 2008 the Treasury expressed its opinion in regard to the resort filed
by Endesa Fortaleza and the expert’s report prepared in 2005. On April 17, 2008 CGTF made its representations about the technical
report filed by the Treasury. On May 12, 2008 the proceeding was remitted to the Public Prosecutor’s Office of the Treasury and it
was returned with no representations or opinion of the Treasury. On September 19, 2008 the appealable judgment was delivered and it
was favorable to Endesa Fortaleza. The aforementioned decision recognized the classification of the power generator in accordance
with Endesa Fortaleza’s claim and determined that the judicial deposit should continue as guarantee of the proceeding until the final
judicial decision. We are waiting for the filing of the resort by the Federal Treasury at the Regional Federal Court (RFC), which is the
second judicial instance, against the appealable judgment favorable to Endesa Fortaleza. The period allowed for the Federal Treasury
to file the aforementioned resort is 30 days starting from the publication of the appealable judgement. On September 29, 2008 the
aforementioned judgment was issued. On November 10, 2008 the Treasury was notified about the appealable judgment favorable to
Endesa Fortaleza. Therefore, the 30 calendar day period starts from that date (the period expires on December 10, 2008) so that the
Treasury files the resort at the Regional Federal Court. We are waiting that it is informed whether the Treasury filed the resort at the
Regional Federal Court within the period. We noted that the Judge’s secretary made a mistake as she sent the proceeding
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Endesa Cachoeira S.A.
to the Legal Department of the Federal Union (LDFU) instead of having sent the proceeding to the Public Prosecutor’s Office of the
Treasury. On December 10, 2008 the LDFU returned the litigation and informed the aforementioned mistake. As a result of the above,
the notification to the Treasury dated November 10, 2008 was nullified. We are waiting for a new notification to the Treasury, when a
new 30 calendar day period will start so that the Treasury files the resort at the Regional Federal Court. This new notification should
be sent after the end of the judicial holiday due to year-end holidays, that is, January 7, 2009. We do not know the exact date of the
notification.
admissibility of the lawsuit, since it considered that there was no “case”, as required by article 322 of the Procedural Code, since it is
understood that there was no specific requirement from the Province. The proceedings were ready for sentencing on May 2, 2007, but
no sentence has so far been issued.
ANNUAL REPORT
Endesa Chile
Compañía de Transmisión del Mercosur S.A. (“CTM”)
Process Status
Plaintiff
: CTM
Defendant
: Province of Corrientes (Argentina)
Court
: Supreme Court of the Nation
Case/Identification
: C-222/03
Summary of proceedings: CTM initiated a statement of certainty action against the Province of Corrientes, for the Supreme Court to
declare that the activity carried out by the company in the province is under federal jurisdiction and therefore exempt from the Gross
Income Tax that the Province of Corrientes currently demands. It also requested an injunction, to order the General Revenue
Department of the Province of Corrientes to abstain from demanding CTM the payment of the mentioned tax.
Process status: The Supreme Court (the “Court”) on August 21, 2003, resolved
(i) That it was competent to see the cause;
(ii) Notify the Province of Corrientes of proceedings;
(iii) Issue the injunction requested by CTM (to not innovate) in relation to the payment of the gross business income tax included in
the Fiscal Code of the Province of Corrientes with regard to the activity carried our by CTM, in the following terms: “Decree the
injunction requested, and consequently, orders the Province of Corrientes to abstain from pursuing the fiscal execution of the
gross business income tax regarding the contract signed on June 14, 2000 between the National State and CTM for the
construction, operation and maintenance of the second circuit for electric energy transport of the Nodo Rincón de Santa MaríaNodo Frontera Garabí section (Province of Corrientes). The Province of Corrientes was notified of the demand and answered
stating that there was no current and concrete requirement for the payment of the gross business income tax.
Likewise, it stated that according to express dispositions of the Provincial Fiscal Code, it corresponded that CTM pay the Gross
Business Income Tax and the inapplicability Federal Pact for Employment, Production and Growth by which some provinces,
including Corrientes, had committed to eliminate the Gross Business Income Tax. CTM rebutted each of the arguments invoked by
the province in its presentation. Later, the Province of Corrientes requested the lifting of the injunction, presentation that was
opportunely answered by CTM. On April 5, 2005, the Court rejected the request for the lifting of the injunction. On September 9,
2005, CTM requested the cause be opened to evidence and the CSJN set the conciliation audience for November 9, 2005. In the
mentioned audience, the parties manifested that it was not possible to achieve conciliation. As a result, the case was opened to
evidence. On March 13, 2006 the Court certified that the term for evidence was expired without any evidence pending and it
instructed the parties to present their arguments regarding the evidence presented. Ctm argued on the evidence produced. The
proceedings passed to the Attorneys Office on September 8, 2006. At December 27, 2006, the proceedings had not returned from the
Attorneys Office. The case records returned from the Public Prosecutor’s Office on April 30, 2004 with a negative verdict on the
Amount involved
: Inversiones M.D. Ltda. Inversiones Facona ltda., Inversiones Huilo S.A, María Teresa Navarro Haeussler,
Marcela Correa Pero, María Cecilia Navarro Haeussler, Jaime Arrieta Correa, A. Combeau Ingeniería Ltda.,
Alberto Combeau Vergara, Guillermo Villaseca Castro, Inversiones Teigo Ltda., Inmobiliaria Santa Inés
Ltda., Gregorio Echeñique Larraín and Inmobiliaria Pirehueico S.A., and José Manuel Jordán Barahona on
behalf of 38 plaintiffs.
: Chilean Treasury, Department of Water Resources and Endesa Chile
: 24th Civil Court of Santiago
: 7957-2005 (accumulated Case No 15279-05 Ninth Civil Court of Santiago, Case No 1608-2005 Tenth Civil
Court of Santiago)
The Plaintiffs are suing for a public right annulment of Dept. of Water Resolution No. 134 dated March 22,
2000, which gives Endesa non-consumptive water rights to carry out the Central Neltume project, with
indemnities for damages. Alternatively, the plaintiffs are suing for damages allegedly suffered by the
plaintiffs for the quality loss as lakefront owners at Pirehueico and for the property devaluation.
: An order for evidence was issued for the base of the matter, with reversal proceedings against it brought by
the parties.
: Undetermined.
Plaintiffs
Defendant
Court
Case No.
Cause
:
:
:
:
:
Plaintiff
: Treasury
Defendant
: Endesa Fortaleza
Summary of Proceedings: The Federal Tax Authorities have issued a Resolution to collect PIS/COFINS taxes allegedly owed in 2003
to 2004.
Process status: The resolution was received on February 12, 2007. Pleas for the defense were raised on March 14, 2007. The
Resolution was judged to be partially admissible on November 5, 2007. The appealable judgment considered that the income from the
contract for the purchase and sale of energy with Coelce is not subject to paying cumulative PIS/COFINS but is subject to noncumulative ones. However, the resolution was judged admissible with regard to the month of October, 2004. An appeal was lodged on
December 5, 2007. On December 2, 2008 the decision was announced. The decision maintained the administrative appealable
judgment. We are waiting for the formalization and notification of the decision.
F-125
Plaintiffs
Defendants
Court
Case No.
Cause:
Amount involved:
Endesa Chile, Pangue and PEHUENCHE S.A. (“Pehuenche”)
Chilean Treasury
9th Civil Court of Santiago
13084-04
The annulment is sought of public right of Ministerial Resolution No. 35 issued by the Ministry of Economy,
Development and Reconstruction on June 15, 2004, which pronounced on a matter that was not originally a
matter of dispute, by instructing the CDEC-SIC to define the hours of greatest probability of load loss.
: The lawsuit was rejected in the first instance. The defendants presented appeal and annulment in the form,
proceedings before the Santiago Court of Appeal, which are pending resolution.
Undetermined.
Plaintiff
Defendant
Court
Case No.
Cause
:
:
:
:
:
Process Status
Process Status
Amount involved
Luis Danús Covian and another fifteen people
Endesa Chile and Pangue
Civil Court of Santa Bárbara
4563
The plaintiffs are demanding that the court declare that the plaintiffs and defendants form part of a
community with respect to the Fundo Ralco and therefore they have co-ownership rights.
: Final sentence given in favor of the defendants, rejecting the demand in all its parts and ordering the plaintiff
to pay costs. The plaintiffs have presented appeal and annulment proceedings before the Appeals Court of
Concepción, which are pending resolution.
: Undetermined
F-126
173
174
enersis08
ANNUAL REPORT
Plaintiff
Defendant
Court
Case No.
Cause
Process Status
Amount Involved
Plaintiff
Defendant
Court
Case No.
Cause
Process status
Amount involved
Plaintiff
Defendant
Court
Case No.
Cause
Process status:
Amount involved
:
:
:
:
:
Endesa Chile
CMPC Celulosa S.A.
Arbitration tribunal
2144-J
The disputes between the parties originated from the supply contract signed by Endesa Chile and CMPC
Celulosa S.A. on May 31, 2003, relating to supplies for the defendant’s plants in the Eighth Region and
relating mainly to Endesa’s decision to dispute part of the usage required by CMPC Celulosa S.A. as it does
not consider this usage to be covered by the contract.
: The parties have been notified to hear sentence.
: Undetermined
: Endesa Chile
: Chilean Treasury
: Third Civil Court of Santiago
: 26.499-2007
: Endesa Chile has sued the Treasury in order for the court to declare that Endesa Chile, as a generating
company, with respect to the operation of its power plants and artificial dams, is subject to the General
Electricity Services Law and all other legal regulations affecting the electricity industry and the instructions
issued by the SIC CDEC of the respective interconnected system, and not by decisions and guidelines issued
by the Control Committees (regulated by the Waters Code).
: The court did not give order for evidence and called the parties to hear sentence. Endesa Chile appealed
against the first resolution and replacement of the second against it, proceedings are awaiting resolution.
: Undetermined
: Forestal Agrícola Industria Maderera Los Ángeles Limitada
: Endesa Chile
: Civil Court of Santa Bárbara
: 3.362
: The plaintiff seeks the recovery of a piece of land of 405 hectares that it believes forms part of its “Los
Prados de Quillaileo” property, located at Santa Bárbara in Chile’s 8th Region, which land is currently
occupied by Pehuenches to whom Endesa assigned rights and actions related to the construction of the Ralco
dam.
The Concepción Court of Appeal previously ordered the first instance tribunal to complement the definitive
sentence, resolving the peremptory exceptions; the Court of Appeal rejected them. Endesa presented
proceedings of appeal and annulment in the form against the complementary sentence.
: Undetermined.
Pangue S.A.
Plaintiff
Defendant
Court
Case No.
Cause
Process Status
Amount involved
: Endesa Chile, Pangue and Pehuenche
: Chilean Treasury
: Ninth Civil Court of Santiago
13084-04
: The plaintiffs are seeking a declaration of nullity of public right of the Ministerial Resolution No.35 issued
by the Ministry of Economy, Development and Reconstruction on June 15, 2004, whereby this authority
pronounces on a matter that was not originally one of dispute, by instructing the CDEC-SIC to define the
hours of greatest probability of load loss.
: The demand was rejected in the first instance. The plaintiffs filed proceedings of appeal and annulment
before the Santiago Appeals Court, which are currently pending resolution.
: Undetermined.
F-127
Plaintiffs
Defendants
Court
Case No.
Cause
Amount involved:
Luis Danús Covian and fifteen other people
Endesa Chile and Pangue
Civil Court of Santa Bárbara
4563
The plaintiffs have demanded that the court declare that the plaintiffs and defendants form part of a community
with respect to the Fundo Ralco and therefore they have co-ownership rights.
: The court gave definitive sentence in favor of the defendants, rejecting the demand in all its parts and ordering
that the plaintiff pay costs. The plaintiffs filed appeal and nullity proceedings before the Concepción Appeal
Court, which are currently pending resolution.
Undetermined
Plaintiff
Defendant
Court
Case No.
Cause
:
:
:
:
:
Process Status
:
:
:
:
:
Process status
Amount involved
Municipality of Nacimiento
Pangue
Civil Court of Nacimiento
16.757-2007
Based on Law 19,300 governing General Environmental Standards, the Municipality of Nacimiento seeks the
repair and compensation for the environmental damage allegedly caused by the operation of the Pangue power
plant, particularly from spills occurring during July 2006; these damages amount to Ch$13.2 millions. The
plaintiff is also specifically demanding that the defendant be ordered to adopt the following protective and
mitigation measures: construction of a containment wall and a bridge that connects Nacimiento to other nearby
towns and community buildings, at a cost of Ch$4,914 millions.
: The proceedings are in the evidence stage, with some parts still pending.
: Ch$ 4,927.2 millions or US$ 7.7 millions.
Plaintiffs
Defendant
Court
Case No.
Cause
:
:
:
:
:
Process status
Amount involved
Iris Carrasco Jara and another 418 people
Pangue
Family, civil and criminal Court of Laja
11.642-2008
The plaintiff is suing Pangue for the repair and damages allegedly caused by the operation of the Pangue plant
due to spillages that occurred on the river Bío Bío in July 2006, particularly the flooding that occurred in the
town of Laja in Chile’s 8th Region, amounting to ThCh$12,570,000 plus interest.
: Pangue was notified of the demand on October 27, 2008, having opposed dilatory exceptions which have still
not been resolved by the court.
: Ch$ 12,570 millions or US$ 19.8 millions plus interests.
Pehuenche S.A.
Plaintiff
Defendant
Court
Case No.
Cause
Process Status
Amount involved
:
:
:
:
:
Endesa Chile, Pangue and Pehuenche
Chilean Treasury
Ninth Civil Court of Santiago
No.13084-04
The Plaintiffs are seeking the annulment in public right of Ministerial Resolution No.35 issued by the Ministry
of Economy, Development and Reconstruction on June 15, 2004, in which this authority pronounces on issues
that were not originally matters of dispute, by instructing the CDEC-SIC to define the hours of greatest
probability of load loss.
: The court ruled first instance rejecting the demand. The plaintiffs filed appeal and annulment proceedings with
the Santiago Appeals Court which are pending resolution.
: Undetermined.
F-128
Edegel S.A.
Plaintiff/Tax Creditor
: Sunat
Defendant/Taxpayer
: Edegel
Court
: Sunat
Summary of proceedings: Edegel Re-assessment (2000) — On September 10, 2004, the Tax Court notified a favorable resolution for
Edegel confirming (i) Edegel’s right to depreciate the negative goodwill from the re-assessment because it had a legal stability
agreement in force and also (ii) the non-application of Regulation VIII of the Tax Code to the unbundling (there is no fraud or
simulation). However, the resolution stipulated that SUNAT has to check that the re-assessment of assets done by Edegel was not at a
higher value than the market value. Since then, Edegel has been receiving a series of resolutions from SUNAT aimed at determining
the excess of the re-assessment and the tax to be paid.
Process status: The claims against the resolutions (in the part that was considered to have rights) have been solved and on
September 17, 2008 the first administrative instance resolution of Sunat was notified. The resolution was partly favorable to Edegel.
On October 9, 2008 an appeal was filed at the court against the part of the resolution that did not accept our claim and that has not
been accepted by the company. In regard to year 1999, an oral and written report of the pleadings was filed. We are waiting for the
resolution by the court. In regard to years 2000 and 2001, on December 16, 2008 an answer was filed attaching the information
requested by Sunat so that the appeal is accepted to be processed. On December 31, 2008 the file (file number 16005-2008) entered
the court.
Cuantía Sol$ 82,5 millions or US$ 26,5 millions.
Plaintiff
: Sunat
Defendant
: Edegel S.A.
Court
: Sunat
Number/Identification
: 0260340031172
Summary of proceedings: Services — Tax annotation against fine calculation resolutions for tax on sales and income tax (year 2000).
Process status: The proceeding is pending of pronunciation by the court.
Cuantía Sol$ 47,3 millions or US$ 15 millions.
Generandes Perú S.A.
Plaintiff
: SUNAT
Defendant
: Generandes Perú S.A.
Court
: SUNAT
Case/Identification
: 0260340031172
Summary of proceedings: Services — Tax Action against various Resolutions Determining and Imposing Fines on Sales Tax and
Income Tax — year 2000
Process status: The process is pending a determination of its merits by Tax Administration. On November 14, 2008 Sunat notified the
resolution (Resolución de Intendencia), through which the claim was solved maintaining the aforementioned objection. An appeal
against the aforementioned resolution was filed on December 5, 2008.
Cuantía Sol$ 49,9 millions or US$ 16 millions.
Process Status
Amount Involved
Plaintiffs
: Orlando Enrique Guaqueta and Sibaté residents (class action Miguel Ángel Chávez - Nancy Stella
Martínez Pulido and others)
Defendants
: Emgesa, Empresa de Energía de Bogotá S.A. ESP (“EEB”) and Corporación Tribunal: Administrative
Tribunal of Cundinamarca, First Section
Case No.
: 2001-016
Autónoma Regional (“CAR”)
Cause
: The plaintiffs seek the joint liability of the defendants related to the damages produced in the Muña
reservoir due to contaminated water from the Bogota river pumped in by Emgesa.
Process Status
: The case was sent to the State Council to resolve the motions presented by the companies (among others,
Encomables, Hospital Juan N Corpas, Agrinal S.A., Líquido Carbónico Colombiana S.A., Tinzuque,
Refisal, Peldar, Incollantas), companies that do not believe they can be considered direct defendants in
the case. Once these motions are ruled on, the first instance evidence stage should begin.
Amount involved
: Col$ 3,000,000 millions or US$ 1,320 millions.
Plaintiff
: Gustavo Moya
Defendants
: Emgesa, EEB, the Capital District of Bogotá, Empresa de Acueducto y Alcantarillado
Tribunal
: Administrative Tribunal of Cundinamarca, Fourth Section
Case No.
: 2001-479
de Bogotá, the Municipality of Sibaté and other industries and government entities that allegedly contribute to the pollution of the
Bogotá River by action or omission.
Cause
: Class action seeking to declare the defendants responsible for damages caused to the environment
produced by storing contaminated water in the Muña reservoir, and thus compensate for the collective
damage caused.
Process Status
: Appeal proceedings pending against the first instance sentence before the State Council, which
exonerated Emgesa from responsibility and a compliance agreement was approved. For its part, the
Administrative Tribunal of Cundinamarca has held various audiences for checking compliance with the
Bogotá river decontamination works. The audience of December 16, 2008 Emgesa reaffirmed that the
company has complied with all its commitments under the agreement signed.
Amount Involved
: Undetermined
Plaintiff
Defendant
Tribunal
Case No.
Cause
Emgesa S.A.
Plaintiff
Defendant
Tribunal
Case No.
Cause
: Central Hidroeléctrica de Betania S.A. ESP (now Emgesa)
: Municipality of Yaguará
: Administrative tribunal of Huila
: 2004-1328
: The municipality is seeking to sanction the company for not presenting its declaration of ICA (Industrial
and Commerce Tax) under Law 14 of 1981, ignoring the payments made by Betania under a special law
that regulates electricity generation companies (Law 56 of 1981). The company
F-129
ANNUAL
presented a request to nullify the acts that imposed the sanction (Sanction Resolutions
yearsREPORT
1998 to
2002).
: This case is in the evidence stage.
: Col$ 98,438 millions or US$ 43.3 millions.
Process status
Amount involved
:
:
:
:
:
Emgesa
CAR
Administrative Tribunal of Cundinamarca — first section
2005-1476
Action of nullity and re-establishment of law by which it seeks to be declared invalid administrative acts
given by the CAR (Resolutions 506 of March 28, 2005 and 1189 of July 8, 2005) and reestablish the
rights of Emgesa that were violated by these resolutions because they impose the carrying out of works at
the Muña reservoir as a condition of the maintenance of the water concession.
: On November 19, 2008, an order was issued notifying CAR to pronounce with respect to the suspension
of the process requested by Emgesa.
: Col$2,000 millions or US$ 0.9 millions.
In July 1990, the Italian Government authorized Medio Credito Centrale to grant a loan to the Argentine Government to finance
purchases of goods and services of Italian origin, to renew four groups of the thermo-electric plant owned by
F-130
175
enersis08
176
ANNUAL REPORT
Servicios Eléctricos del Gran Buenos Aires (“SEGBA”). SEGBA granted to Endesa Costanera a mandate to administer the carrying
out the corresponding works covered by a contract between SEGBA and a consortium led by Ansaldo S.p.A., Italy.
In accordance with Law No. 25.561, Decree No. 214/02 and their related regulations, the obligation to pay by Endesa Costanera
contained in the contract were “pesified” at the rate of one peso to one dollar, plus a special stabilization coefficient (“CER”), with the
original interest rate stated for the obligation.
On January 10, 2003, the Executive National Power dictated Decree No.53/03 that modified Decree No.410/02 by including
exceptions to the “pesification” of the obligation to pay sums of money in foreign currency of provinces, municipalities, public and
private sector companies to the state government arising from subsidiary or other loans and guarantees, originally financed by
multilateral credit organisms or originated in liabilities assumed by the National Treasury and refinanced with foreign creditors.
Endesa Costanera considers that the loan resulting from the contract does not meet any of the assumptions foreseen in Decree
No.53/03, plus there are solid arguments for determining the unconstitutionality of that decree as it violates principles of equity and
property rights established in the National Constitution. The maximum contingency that would be produced by complying with the
assumption mentioned would, as of December 31, 2008, imply a patrimonial reduction, net of tax effects, of approximately US$19
millions. To date, the Secretary of Energy has presented no complaint against the “pesified” payments made by Endesa Costanera.
Restrictions
Enersis S.A. and some of its subsidiaries have the following restrictions:
Enersis S.A.
The Company must comply with financial covenants and requirements derived from loan agreements with financial institutions.
Some of the more restrictive covenants are summarized as follows:
•
•
•
•
The ratio of consolidated debt to consolidated EBITDA for the four consecutive fiscal quarters does not exceed 3.00
Ratio of consolidated debt to equity plus minority interest does not exceed 100%;
At least 50% of the consolidated assets of Enersis should be regulated assets, i.e. companies whose business is the generation,
transmission and trade of electric energy;
Minimum shareholders’ equity plus minority interest of at least equal to UF27 million.
The covenants dealing with Adjusted Operating Cash Flow, as defined were eliminated by the amendments signed in October 2008
At December 31, 2008 and 2007 all these obligations have been met.
Endesa Chile
Endesa Chile must comply with financial covenants and requirements derived from loan agreements with financial institutions, among
which are the following:
•
•
•
•
The ratio of consolidated debt to consolidated EBITDA for four conssecutive fiscal quarters does not exceed 4.20.
Ratio of consolidated debt to equity plus minority interest to be not greater than105%.
At least 50% of Endesa Chile’s consolidated assets should be regulated assets, i.e. companies whose principal business is the
generation, transmission and selling of electric energy:
Minimum shareholders’ equity of at least equal to UF 45 million.
The covenants dealing with Adjusted Operating Cash Flow, as defined, were eliminated by amendments signed in October 2008.
At December 31, 2008 all of these obligations and restrictions have been met
As is customary in credit agreements and capital market transactions, a substantial portion of Enersis’ indebtedness is subject to crossdefault provisions. If a material default is not cured by applicable grace periods, it could result in a cross-default for Enersis and a
significant part of Enersis’ liabilities could become due and payable subject to certain additional condictions.
Under the bank facilities entered into between 2004 and 2006, if Enersis or any of its Relevant Subsidiaries, as defined in such
facilities, fails in the payment for an amount in excess of US$50 million in any indebtedness with an outstanding principal amount
over US$50 million, or if any indebtedness of Enersis or any of its Relevant Subsidiaries is declared due and payable, lenders
representing more than half of the amount outstanding would have the right to declare the loan due and payable.
Similarly, under the Indenture that governs Enersis’ Yankee Bonds, if Enersis or any of its Subsidiaries, fails in a payment of any
indebtedness with an outstanding principal amount over US$30 million, the Trustee or bondholders representing at least 25% of any
given series would have the right to declare the bonds due and payable.
The most significant requirements in respect to financial covenants are those contained in the loan, as amended at September 30, 2005,
with CSFBi, which are the following: The long-term debt with third parties may not exceed US$215 million (excluding short-term
debt, commercial debt, inter-company loans and balance of debt with MedioCrédito Italiano); the debt for less than 180 days may not
exceed US$10 million. There are, also, clauses restricting the change of control of the company and clauses that restrict payments to
shareholders, including subordination of the debt associated with certain financial indicators.
At December 31, 2008 all of these obligations have been met.
El Chocón S.A.
The loan dated of September 15, 2006 requires the Company to comply with the following financial covenants: ratio of Ebitda to
financial expenses not lower than 3.5, debt to Ebitda not greater than 3.0; net shareholders’ equity not lower than 690 million
Argentine pesos.
As of December 31, 2008 these obligations have been met.
Edegel S.A.
Debt ratio of not more than 1.50 under the second and third Bond issue.
F-131
F-132
The loan known as the Facility Operation Contract, assumed as a result of the merger with Etevensa, has the following indicators:
interest hedge greater than 1.25; shareholders’ equity long-term debt ratio greater than 0.67 and debt to Ebitda of less than 4.0.
Bank loans include a debt to Ebitda of less than 4.0; interest hedge of more than 3.25 and level of indebtedness of less than 1.50.
There are no clauses in the credit agreements through which changes in these companies corporate or debt rating may cause an
obligation to prepay the debt. However, a change in Standard & Poor (S&P) risk classification for debt denominated in foreign
currencywould produce a change in the applicable margin of syndicated credits subscribed in 2004 and 2006.
At December 31, 2008, all of these obligations and restrictions have been fully met.
ANNUAL REPORT
Note 32.
Foreign Currencies
As of December 31, 2007 and 2008, foreign currency denominated assets and liabilities are as follows:
a.
Current assets
Account
Currency
Cash and banks .........................................................................................
Note 31. Collateral Obtained from Third Parties
Enersis
The Company has not received certificates of deposit at December 31, 2008 (ThCh$9,350 in 2007).
Chilectra S.A.
Time deposits............................................................................................
The Company includes in this current liabilities, deposits received in cash for the use of temporary connections by customers of the
company for ThCh$53,909 and ThCh$96,543 at December 31, 2007 and 2008, respectively.
Inmobiliaria Manso de Velasco Ltda.
Marketable securities ................................................................................
The Company has received guarantees from third parties to guarantee obligations incurred in the acquisition of assets of
ThCh$2,335,530 as of December 31, 2008 (ThCh$1,994,923 in 2007).
Accounts receivable, net ...........................................................................
Compañía Americana de Multiservicios Ltda.
The Company has delivered bank bonds for ThCh$302,926 (ThCh$5,221 in 2007) and has not received bank bonds as of
December 31, 2008 (ThCh$311,119 in 2007).
Endesa Chile . (Parent Company)
The Company has received performance bonds from contractors and third parties to guarantee jobs and construction, for
ThCh$127,753,565 as of December 31, 2008 (ThCh$39,626,061 in 2007).
Notes receivable........................................................................................
Enigesa S.A.
Other receivables ......................................................................................
The Company has received guarantee documents amounting to ThCh$28,000 as of December 31, 2008 (ThCh$30,492 in 2007).
Edesur S.A.
The Company has received pledges from contractors and third parties to guarantee construction work for ThCh$13,947,165 as of
December 31, 2008 (ThCh$9,232,473 in 2007).
F-133
F-134
$no Reaj.
US$
Euro
Yen
$ Col.
Soles
$Arg.
Real
US$
$Col.
Soles
$Arg.
Real
$no Reaj.
US$
$Col.
$Arg.
$no Reaj.
US$
Euro
$Col.
Soles
$Arg.
Real
$no Reaj.
US$
Real
$Reaj.
$no Reaj.
US$
Euro
$Col.
Soles
$Arg.
Real
As of December 31,
2007
2008
ThCh$
ThCh$
3,151,552
9,143,573
3,784
245
23,210,461
6,838,288
3,086,104
43,841,789
78,345,065
70,401,029
1,806,118
16,542,277
273,497,423
5,987
299,582
11,219,946
1,321,922
244,005,950
7,258,865
101,244
230,355,952
48,298,961
105,186,545
440,053,084
4,564,667
35,701
8,292,429
3,050,769
39,490,043
12,549,649
—
14,875,715
6,390,867
1,227,910
31,064,600
7,328,605
53,128,893
1,739
301
44,410,146
12,482,499
5,384,084
10,813,997
194,558,861
92,109,090
4,865,353
25,268,099
307,948,028
6,120
33,724
101,228,071
3,779,191
317,907,883
3,637,796
55,205
239,299,939
88,133,560
141,109,459
348,018,797
4,011,745
32,693
3,704,612
3,088,979
33,818,448
—
13,347
18,340,035
8,803,459
2,495,738
28,507,661
177
178
enersis08
ANNUAL REPORT
Account
Currency
Amounts due from related companies.......................................................
Inventories, net..........................................................................................
Income taxes recoverable..........................................................................
Prepaid expenses and other.......................................................................
Deferred income taxes ..............................................................................
Other current assets...................................................................................
Total current assets.................................................................................
F-135
$no Reaj.
US$
Soles
$Arg.
$no Reaj.
US$
$Col.
Soles
$Arg.
Real
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
US$
$Col.
Soles
$Arg.
Real
$no Reaj.
$Col.
Soles
$Arg.
Real
$Reaj.
$no Reaj.
US$
$Col.
Soles
$Arg.
Real
As of December 31,
2007
2008
ThCh$
ThCh$
13,197,297
142,718,829
161,051
9,869,021
81,736,411
—
13,500,793
15,107,672
2,052,779
2,425,998
73,408,775
3,057,848
1,179,122
3,425,014
76,520,702
924,471
766,598
1,715,376
2,068,258
1,794,787
47,568,932
37,590,966
714,811
—
8,641,793
27,549,986
4,628,461
82,304,639
27,613,376
674,628
190,528
142,960
39,118,684
11,207,253
1,500,112
50,178
18,124,904
57,614,074
862,560
19,242,056
22,849,069
2,385,726
1,244,051
43,867,243
—
1,629,172
3,384,257
85,176,728
1,304,202
1,269,073
2,462,509
2,643,111
2,300,856
48,765,141
19,096,926
663,548
23,363
11,369,457
24,452,812
5,093,759
398,195,892
40,293,145
375,351
1,048,219
1,440,218
60,290,483
2,461,888,662
2,994,551,605
b.
Property, plant and equipment
Account
Currency
Land ..........................................................................................................
Building and infrastructure .......................................................................
Machinery and equipment.........................................................................
Other plant and equipment........................................................................
Technical appraisal ...................................................................................
Accumulated depreciation ........................................................................
Total property, plant and equipment ....................................................
F-136
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
$no Reaj.
$Col.
Soles .
$Arg
Real.
As of December 31,
2007
2008
ThCh$
ThCh$
64,402,269
35,739,332
4,144,627
7,345,792
38,798,536
4,997,494,938
2,653,002,806
1,275,224,496
1,412,695,229
2,035,936,845
80,397,948
34,752,753
599,363,531
662,841,592
784,085,479
204,224,314
10,484,039
90,819,072
104,150,576
171,208,984
36,692,443
(2,444,841,723)
(920,214,310)
(976,560,853)
(1,175,437,010)
(1,066,751,784)
65,328,544
32,572,227
15,145,019
8,640,022
47,473,187
5,253,390,557
3,215,172,011
1,519,689,734
1,692,255,463
2,480,275,912
71,973,016
38,817,933
693,041,360
814,051,916
1,074,606,122
273,586,177
14,210,928
188,189,375
168,580,359
208,635,269
36,562,001
(2,576,936,198)
(1,179,804,545)
(1,206,797,461)
(1,479,557,559)
(1,388,890,867)
8,719,999,921
10,080,210,502
ANNUAL REPORT
c.
Other assets
d.
Current liabilities
Other assets
Account
Currency
Investments in related companies .............................................................
Investments in other companies................................................................
Goodwill, net ............................................................................................
Negative goodwill, net..............................................................................
Long-term accounts receivable .................................................................
Amounts due from related companies.......................................................
Other long-term assets ..............................................................................
$no Reaj.
US$
$no Reaj.
US$
$Col.
Soles
Real
$no Reaj.
US$
$Col.
$no Reaj.
US$
Soles
$Reaj.
$no Reaj.
$Col.
Soles
$Arg.
Real
$no Reaj.
US$
$Reaj.
$no Reaj.
US$
$Col.
Soles
$Arg
Real
Total other assets ....................................................................................
Total assets by currency............................................................................
Total assets by currency .........................................................................
$Reaj.
$no Reaj.
US$
Euro
Yen
$Col.
Soles
$Arg.
Real
As of December 31,
2007
2008
ThCh$
ThCh$
60,582,831
3,881,225
3,044,502
20,519,724
1,429,079
25,516
3,055
681,495,746
9,446,305
7,301,241
(13,087,562)
(6,831,031)
(20,803,821)
6,491,441
797,657
64,752,231
71,506
108,481,872
32,346,004
682,310
—
1,466,224
32,624,137
60,135,314
21,125,621
4,088,648
16,501,346
177,268,174
114,188,025
4,518,996
3,026,243
25,071,539
1,549,119
30,011
2,723
620,686,486
7,358,325
7,648,856
(63,749)
(19,509,889)
(21,956,856)
3,908,736
2,138,402
65,767,602
528,547
107,841,874
20,939,426
3,220,642
109,601,626
1,374,954
35,787,075
6,752,367
26,946,065
6,420,161
20,056,810
171,031,654
1,273,839,295
1,324,865,770
15,636,895
4,284,890,568
365,882,775
105,028
245
2,278,099,351
1,058,413,587
1,289,870,509
3,162,828,920
13,466,428
4,797,245,612
429,109,821
70,291
301
2,741,010,941
1,336,817,873
1,548,910,874
3,532,995,736
12,455,727,878
14,399,627,877
Within 90 days
Average
Average
Amount
Rate
Amount
Rate
ThCh$
ThCh$
91 day to 1 year
Average
Average
Amount
Rate
Amount
Rate
ThCh$
ThCh$
Account
Currency
Short-term debt due to banks......
and financial institutions ......
$Reaj.
$no Reaj.
US$
Yen
$Col.
Soles
$Arg.
Reales
4,453
7,216
8,950,274
62,493
91,051,256
41,773,910
1,214,202
6,288,562
0.30%
—
6.03%
12.75%
12.01%
5.55%
7.90%
8.10%
90
47,840,494
19,606,430
—
93,725,625
8,129,097
3,491,804
12,563,425
0.30%
3.99%
6.75%
—
13.60%
8.33%
19.15%
8.99%
—
—
25,500,181
6859,467
—
—
—
3085,709
—
—
10.30%
12.75%
—
—
—
5.58%
—
—
3,323,224
—
—
7,518,009
12,367,814
70,659,789
—
—
20.00%
—
—
8.74%
16.77%
13.23%
$no Reaj.
US$
$Col
Soles
$Arg.
Reales
35
19,850,209
9,876,398
30,722,550
—
850,274
0.30%
7.73%
12.19%
5.96%
—
12.75%
—
114,374,493
10,407,867
—
1,267,922
511,297
—
4.35%
12.13%
—
1.75%
11.91%
—
25,452,697
—
—
2,182,005
51,885,352
—
9.41%
—
—
1.75%
13.53%
—
61,774,382
—
—
1,255,391
92,119,210
—
6.59%
—
—
1.75%
13.52%
$Reaj.
US$
$Col.
Soles
$Arg.
Reales
US$
$Arg.
Reales
$no Reaj.
$Col.
Soles
Reales
$Reaj.
$no Reaj.
US$
Euro
$Col.
Soles
$Arg.
Reales
Reales
$no Reaj.
US$
Euro
$Col.
Soles
$Arg.
Reales
$no Reaj.
US$
Soles
$Arg.
$Reaj.
$no Reaj.
US$
$Col.
Soles
$Arg.
Reales
$no Reaj.
$Col.
Soles
$Arg.
Reales
$no Reaj.
$Col.
Soles
$Arg.
Reales
$no Reaj.
$Col.
Soles
Reales
$Reaj.
$no Reaj.
2,088,946
6,847,012
10,435,659
20,559,498
110,926
—
13,312,241
1,158,694
—
4,511,250
15,457,695
20,040
15,823,668
122,031
182,568,904
36,615,596
1,116,976
67,456,469
28,281,453
66,829,303
118,836,571
7,107,390
10,358,553
600,689
—
27,163,811
7,470,158
44,733
21,671,930
350,270
3,273,615
417,465
30,644,519
—
13,232,239
7,220
17,339,693
5,627,458
6,402,946
9,620,960
23,590,690
5,950,088
5,602,797
18,005,201
27,616,757
—
—
—
16,033,290
2,712,482
5,344,571
401,856
—
—
1,841
8,780
5.71%
7.78%
10.95%
6.07%
11.75%
—
7.42%
13.10%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,095,186
14,605,571
106,623,940
3,325,251
119,047
—
21,076,678
3,233,122
—
5,489,435
693
22,369
319,565
226,005
223,298,201
16,846,723
2,491,312
92,297,699
48,185,527
100,548,815
80,072,213
6,767,322
10,303,336
2,705,428
4,476
15,844,480
5,597,147
97,712
63,512,785
1,997,293
1,861,498
828,167
38,410,293
—
18,232,205
—
12,830,147
11,700,157
8,651,423
9,611,868
38,201,734
4,874,809
6,698,525
26,834,891
21,912,681
27,006,786
44,566,163
3,725,216
12,689,390
3,005,137
7,796,622
728,856
308,178
1,197,210
2,033
8,801
5.64%
7.97%
10.90%
6.95%
11.75%
—
7.42%
4.92%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,214,523
249,129,610
—
5,418,356
—
100,807,255
7,847,224
3,180,178
837,704
—
—
—
—
—
—
8,923,985
—
—
1,464,624
—
48,353,204
10,274,931
—
7,602,819
—
—
2,378,018
219,594
38,033,303
—
—
—
—
2,682,230
22,381,505
84,849
—
1,021,678
—
3,347,290
—
—
247,325
—
34,457,260
132,058
—
—
99,364
998,415
2,779,929
—
—
—
5,522
1,443,203
5.71%
7.78%
—
6.07%
—
13.23%
7.42%
13.10%
5.00%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,630,353
430,221,334
12,014,438
29,229,156
—
9,397,686
5,846,348
4,924,976
489,724
—
—
—
—
—
—
8,816,356
—
—
550,014
—
51,684,411
9,680,858
—
5,590,469
—
—
5,985,977
229,725
34,990,212
—
—
—
—
5,514,701
30,105,264
89,959
—
531,854
—
2,949,448
—
—
327,201
—
32,954,074
—
—
—
—
—
270,565
—
—
—
6,099
1,349,974
5.64%
7.97%
10.90%
6.95%
—
13.51%
7.42%
4.92%
5.00%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Current portion of long-term debt
..............................................
due to banks and financial ....
Institutions ............................
Current portion of bonds payable
..............................................
Current portion of long-term ......
notes payable ........................
Dividends payable ......................
Accounts payable........................
Short-term notes payables ..........
Miscellaneous payables........
Amounts payable to related ........
Companies ............................
Accrued expenses .......................
Withholdings ..............................
Income tax payable.....................
Deferred income .........................
Reimbursable financial ..............
contributions.........................
F-137
F-138
179
enersis08
180
ANNUAL REPORT
Account
Other current liabilities...............
Total current liabilities by
currency ................................
Currency
10,302
2,341,594
5,929,018
1,136,509
62,307,782
46,303,320
$Reaj.
$no Reaj.
US$
Euro
Yen
$Col.
Soles
Reales
$Arg.
2,217,271
239,982,810
91,798,450
1,116,976
62,493
251,061,943
141,611,838
256,831,914
202,751,596
2,323,314
380,238,225
194,751,952
2,495,788
—
388,155,441
88,641,124
232,956,189
276,510,781
5,902,275
26,853,832
329,234,395
—
6,859,467
—
10,530,001
311,767,978
5,681,141
9,151,153
31,860,792
515,671,990
—
—
12,014,438
44,142,211
326,093,409
18,777,906
1,187,435,291
1,566,072,814
696,829,089
957,711,899
—
—
—
—
—
—
90,318
3,675,131
6,255,162
121,490
81,166,362
33,482,686
f.
91 day to 1 year
Average
Average
Amount
Rate
Amount
Rate
ThCh$
ThCh$
$no Reaj.
US$
$Col.
Soles
$Arg.
Reales
Total current liabilities................
e.
Within 90 days
Average
Average
Amount
Rate
Amount
Rate
ThCh$
ThCh$
—
—
—
—
—
—
117,137
4,693,030
—
—
—
19,687,555
—
—
—
—
—
—
134,989
9,918
—
—
—
21,167,997
—
—
—
—
—
—
Long-term liabilities as of December 31, 2008
418,595,419
3,765,968
—
26,618,737
227,749,328
—
136,124,562
264,890,087
49,716,821
—
36,995,835
43,506,787
8,389,302
35,691,061
—
65,497
52,772,530
1,007,623
14,157,840
6.71%
1.75%
—
13.81%
5.50%
8.22%
10.69%
6.90%
—
14.70%
7.42%
—
10.61%
—
—
11.50%
—
—
—
US$
$no Reaj.
$Col.
Soles
Reales
$no Reaj.
$no Reaj
Soles
$Reaj.
$no Reaj
US$
$Col.
Soles
$Arg.
Reales
8,977,789
4,596,109
83,012,503
180,642
245,013,734
54,556,621
1,992,540
340,589
2,827,536
—
3,508,725
4,151,563
—
24,373,962
10,486,039
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$Reaj.
$no Reaj.
US$
$Col.
Soles
$Arg.
Reales
Other
2,827,536
61,210,767
663,485,812
352,054,153
76,856,789
37,536,855
570,093,837
—
1,885,024
15,006,465
345,314,317
141,760,631
64,338,508
31,210,323
320,176,966
—
1,885,027
45,525,052
812,758,217
301,120,826
76,524,861
1,323,361
24,140,375
—
452,516,532
43,596,924
47,658,790
—
10,128,104
—
548,509
—
1,764,065,749
919,692,234
1,263,277,719
554,448,859
Long-term liabilities as of December 31, 2007
3 to 5 years
Average
Amount
Rate
ThCh$
5 to 10 years
Average
Amount
Rate
ThCh$
More than 10 years
Average
Amount
Rate
ThCh$
121,833,340
1,084,183
81,917,505
299,697,606
—
15,151,167
170,201,170
29,779,630
28,321,548
113,031,044
30,370,899
—
16,383,144
—
3,084,861
32,229,617
515,779
5,797,082
8,888,191
3,784,580
—
—
—
—
1,006,684
78,691
—
782,977
—
16,938
433,292
—
35,387,892
—
—
45,255,278
—
649,191,913
285,091,859
79,497,051
—
—
—
—
10,100,987
—
—
51,019,092
—
10,754,174
—
10,430,716
—
81,561
24,438,149
—
732,245
—
7,692,617
222,659,252
—
704,533
843,971
—
3,600,320
—
—
—
239,425,232
141,378,812
—
9,027,581
—
—
—
—
—
171,094
—
12,859,010
—
—
—
16,271,491
—
—
—
—
—
—
—
—
—
—
—
—
Account
Currency
Due to banks and financial ....................
institutions .......................................
US$
$Arg.
$Col.
Reales
$Reaj.
US$
$Col.
Soles
$Arg.
Reales
US$
$Arg.
Reales
$Reaj.
$no Reaj.
US$
$Arg.
Reales
US$
$no Reaj.
$Col.
Reales
$no Reaj.
$Reaj.
$no Reaj.
Soles
$Reaj.
US$
$Col.
Soles
$Arg.
Reales
353,456,342
4,336,381
—
169,354,950
108,556
338,672,476
159,063,961
42,300,502
—
37,757,841
31,689,213
6,599,038
38,768,493
—
10,430,323
14,007,119
708,051
15,183,867
—
3,843,096
78,355,334
255,629,464
—
8,101
2,022,418
316,186
—
751,276
5,078,922
292,280
20,760,122
13,584,825
$Reaj.
$no Reaj.
US$
$Col.
Soles
$Arg.
Reales
116,657
16,295,837
738,576,426
242,498,217
42,908,968
32,403,592
530,279,440
—
7,876,125
209,256,191
252,118,675
29,875,259
30,354,802
434,908,876
7,692,617
35,601,110
958,258,149
285,091,859
80,201,584
843,971
66,192,000
239,596,326
16,271,491
157,838,142
—
9,027,581
—
—
1,603,079,137
964,389,928
1,433,881,290
422,733,540
Bonds payable........................................
Long-term notes payable .......................
Miscellaneous payable...........................
Amounts payable to related companies.
Accrued expenses ............................
Deferred taxes........................................
Reimbursable financial ...................
contributions....................................
Other long-term liabilities .....................
Total long-term liabilities ......................
by currency ......................................
Total long-term liabilities ......................
6.71%
1.75%
—
13.81%
5.50%
8.22%
10.69%
6.90%
—
14.70%
7.42%
—
10.61%
—
—
11.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
F-139
6.30%
1.75%
12.19%
13.80%
—
4.36%
11.24%
6.38%
11.75%
12.80%
7.42%
—
10.61%
—
—
11.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8.63%
—
—
13.65%
—
7.92%
10.83%
6.80%
—
—
—
—
10.61%
—
—
6.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10.43%
—
—
—
5.27%
7.45%
—
6.30%
—
—
—
—
—
—
—
6.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Amounts payable to related companies
.....................................................
Accrued expenses........................
Deferred taxes ...................................
Reimbursable financial ...............
contributions................................
Other long-term liabilities.................
Total long-term liabilities..................
by currency..................................
Total long-term liabilities..................
26,400,735
—
86,523,468
—
201,244,413
—
267,309,000
55,237,163
64,240,172
30,394,862
100,764,442
29,192,733
—
9,865,492
—
2,900,655
18,447,573
153,781
8,302,619
—
3,055,647
—
—
—
8,036,382
1,013,781
98,336
1,885,024
—
3,964,276
—
—
661,680
—
F-140
Amount
ThCh$
More than 10 years
Average
Rate
US$
$Arg.
$Col.
Soles
Reales
$Reaj.
US$
$Col.
Soles
$Arg.
Reales
US$
$Arg.
Reales
$Reaj.
$no Reaj.
US$
$Arg.
Reales
Miscellaneous payable ......................
Amount
ThCh$
5 to 10 years
Average
Rate
Due to banks and financial................
Institutions...................................
Long-term notes payable...................
Amount
ThCh$
3 to 5 years
Average
Rate
Currency
Bonds payable ...................................
1 to 3 years
Average
Amount
Rate
ThCh$
1 to 3 years
Average
Rate
Account
Amount
ThCh$
8.93%
—
12.13%
—
12.61%
—
8.13%
12.66%
6.67%
11.75%
12.80%
7.42%
—
10.61%
—
—
10.47%
—
—
152,376,749
—
—
—
13,659,627
—
515,176,998
301,120,826
74,036,710
—
—
—
—
5,590,391
—
—
37,743,026
—
4,890,357
4.41%
—
—
—
10.46%
—
7.71%
12.32%
6.89%
—
—
—
—
10.61%
—
—
6.50%
—
—
1,764,178
—
—
—
—
452,344,770
32,633,337
—
10,128,104
—
—
—
—
548,509
171,762
—
13,261,275
—
—
12.42%
—
—
—
—
5.02%
7.76%
—
6.30%
—
—
—
—
10.61%
—
—
6.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,785,425
—
—
—
34,998,575
741,052
—
1,885,027
—
107,461,444
—
2,488,151
1,323,361
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,809,575
—
—
—
27,609,513
—
—
—
177,836
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Note 33. Sanctions
Chilectra.
a.
On April 27, 2004, the SEF penalized Chilectra for a total amount of 1,830 UTA, as a result of the blackout occurred on
January 13, 2003, that affected the area between Tal Tal and Santiago. On May 7, 2004, the Chilectra filed an appeal. The SEF
rejected the appeal and a claim petition was filed with the Santiago Court of Appeals. The case is waiting to be scheduled.
The resolution issued by the Santiago Court of Appeal can be appealed against in the Supreme Court.
To this date, the Company cannot exactly forecast the effects the final resolution will have on its financial statements.
Neither Chilectra nor its Board have been penalized by the SVS or any other administrative authorities.
Note 34. Environment
The Company has disbursed ThCh$369,819 during the year mainly for the following:
Investments:
Monitoring of electromagnetic fields in a substation.
Project preparation with Space Cab.
Gathering pits and oil connecting pools.
Green barriers in a substation.
Expenses:
•
•
•
Associated with handing dangerous waste controlled via the Management System.
Environmental to comply with current legislation.
Pruning and felling associated with the need to keep the lines clear.
Codensa
Between January 1 and December 31, 2008 Codensa S.A. has made disbursements for ThUS$669, which are mainly related to:
•
•
•
•
•
•
Performance of civil works considered in its Environmental Management Systems;
Replacement and removal of condensers contaminated with PCBs;
Adaptation and certification in accordance with standards ISO 9001, ISO 14001 and OHSAS 18001;
Air quality studies for compliance with RCA;
Study and standardization of plumbing at Central Bocamina in accordance with its Environmental Management System.
Note 35. Subsequent Events
Chilectra
On January 9, 2009 Decree No.320 issued by the Ministry of Economy, Development, and Reconstruction was published in the
Official Gazette. This decree establishes the sub-transmission rates and states that such rates will be in force from January 14, 2009.
As a result of the effectiveness of the aforementioned decree, the negative effects on the future income of Chilectra S.A. are estimated
in 52 billion Chilean pesos before taxes on an annual basis based on the current hard terms.
Chilectra
•
•
•
•
ANNUAL REPORT
Environment management of PCBs transformers;Compensations for felling of trees.
Environmental noise impact study.
Endesa Chile
During 2008, the Company and its subsidiaries have made disbursements for a value of ThCh$3,330,696, which mainly correspond to:
Operation expenses: Laboratory studies, monitoring, follow-up and analysis, which were treated as fiscal year expenses in the
ammount ThCh$2,389,003 and environmental protection at Hidroeléctrica El Chocón and Endesa Costanera S.A. (environment
monitoring, cleaning of hydrocarbon separator chambers, measurement of gas emissions, nitrogen oxide and sulphur dioxide)
equivalent to ThCh$426,422.
Investments related to the following projects, which have been capitalized in the amount of ThCh$ 515.271:
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As a result of the entry into force of the new rate decree, and given the fact that such effects was established prospectively as of the
decree enactment date, as the net tax provisions in Chilectra S.A. for ThCh$54,494 have been reversed.
Management is not aware of other significant events have occurred after year end that could materially affect the presentation of the
financial statements.
Note 36. Adoption of International Financial Reporting Standards (IFRS)
In accordance with the instructions of Circular No.427, issued by the Superintendency of Securities and Insurance (SVS) on December
28, 2007 regarding the adoption of the International Accounting Standards (IAS) and the International Financial Reporting Standards
(IFRS), and supplementing the instructions issued through Circular No.384 dated February 6, 2007, starting from 2009 Enersis S.A.
should prepare its financial statements in accordance with the IFRS issued by the International Accounting Standards Board (IASB).
The preliminary effects of this change on the Company’s financial statements have been measured and informed to the SVS in
accordance with the instructions of Circular No.457 dated June 20, 2008.
Note 37. Differences between Chilean and United States Generally Accepted Accounting Principles
Chilean GAAP varies in certain important respects from U.S. GAAP. Such differences involve certain methods for measuring the
amounts shown in the financial statements.
I.
Differences in Measurement Methods
The principal differences between Chilean GAAP and U.S. GAAP are described below together with an explanation, where
appropriate, of the method used in the determination of the adjustments that affect net income and total shareholders’ equity.
References below to “SFAS” are to Statements of Financial Accounting Standards issued by the Financial Accounting Standards
Board in the United States.
(a) Inflation accounting
The cumulative inflation rate in Chile as measured by the Consumer Price Index for the three-year period ended December 31, 2008,
was approximately 18.4%. Pursuant to Chilean GAAP, the Company’s financial statements recognize certain effects of inflation. As
allowed pursuant to Item 17 c (iv) of Form 20-F the reconciliation included herein of consolidated net income, comprehensive income
and shareholders’ equity, as determined in accordance with
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181
182
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ANNUAL REPORT
U.S. GAAP, excludes adjustments attributable to the effect of differences between the accounting for inflation under Chilean GAAP
versus U.S. GAAP.
(b) Reversal of revaluation of property, plant and equipment
In accordance with standards issued by the SVS, certain property, plant and equipment are recorded in the financial statements at
amounts determined in accordance with a technical appraisal. The difference between the carrying value and the revalued amount is
included in shareholders’ equity, beginning in 1989, in “Other reserves”, and is subject to adjustments for price-level restatement and
depreciation. Revaluation of property, plant and equipment is prohibited under U.S. GAAP. The effects of the reversal of this
revaluation, as well as of the related accumulated depreciation and depreciation expense are included in paragraph (ee) below.
there was an orientation toward the income statement focusing on differences in the timing of recognition of revenues and expenses in
pre-tax accounting income and taxable income. Chilean GAAP also permitted not providing for deferred income taxes where a
deferred tax asset or liability was either offsetting or not expected to be realized. Starting January 1, 2000, the Company recorded
income taxes in accordance with Technical Bulletin No. 60 and its related amendments issued by the Chilean Association of
Accountants, recognizing, using the liability method, the deferred tax effects of temporary differences between the financial and tax
values of assets and liabilities. As a transitional provision, a contra (referred to as “complementary”) asset or liability has been
recorded against the deferred tax assets and liabilities recognized as of January 1, 2000. Such complementary assets and liabilities are
being amortized to income over the estimated average reversal periods of the underlying temporary differences to which the
corresponding deferred tax asset or liability relates.
Under U.S. GAAP, companies must account for deferred taxes in accordance with SFAS No. 109, which requires an asset and liability
approach to financial accounting and reporting for income taxes, using the following basic principles:
(c) Depreciation of property, plant and equipment
Under Chilean GAAP, certain costs related to the acquisition of Edesur S.A., at the time of the acquisitions in 1992 and 1994 by
Distrilec Inversora S.A., were charged to earnings as incurred. Under U.S. GAAP, these costs have been included in the purchase
price and allocated to the net assets acquired based upon fair values. For purposes of the reconciliation to U.S. GAAP, these costs
were considered to be of part of property, plant, and equipment, the primary assets of Edesur S.A.
As discussed in paragraph (i), under Chilean GAAP, assets acquired and liabilities assumed are recorded at their carrying value, and
the excess of the purchase price over the carrying value is recorded as goodwill. Under U.S. GAAP, assets acquired and liabilities
assumed are recorded at their estimated fair values, and the excess of the purchase price over the estimated fair value of the net
identifiable assets and liabilities acquired is recorded as goodwill. As part of the purchase of the majority ownership interest in Endesa
Chile, under U.S. GAAP, the cost of the purchase price would have been allocated to the fair value of property, plant and equipment.
The effect on shareholders’ equity and net income for the years presented is included in paragraph (ee) below.
The company has considered the factors which could be considered changes in circumstances which would trigger an impairment
review and, in accordance with SFAS No. 144, “Accounting for the Impairment or Disposa1 of Long-Lived Assets” beginning in
2002, the Company evaluates the carrying amount of property, plant and equipment and other long-lived assets, in relation to the
operating performance and future undiscounted cash flows of the underlying grouping of assets at the lowest level which generates
cash flow. These standards require that an impairment loss be recognized in the event that facts and circumstances indicate that the
carrying amount of an asset may not be fully recoverable. Impairment is recorded based on the excess carrying amounts of long-live
assets (or asset group) over fair value. There were no impairment charges recorded under Chilean GAAP and U.S. GAAP.
(d) Special obligations
At the end of 2006, the Brazilian National Electric Power Agency (“Agencia Nacional de Energia Eléctrica” —ANEEL) published the
Normative Resolution N°234 that established general concepts, methodologies and procedures to carry out the second round of the
periodic Tariff review for public concessionaires engaged in the electric distribution sector services. These modifications were
incorporated into the regulation issued by ANEEL during the year 2007, which contain the provisional parameters of the fix Tariff
model for the following years. According to this, for US GAAP purposes a regulatory liability has been recognized and a charge to
current year earnings for ThCh$140,336,629, in accordance to the provisions of FAS No. 71, “Accounting for the Effects of Certain
Types Regulation”.
Under Chilean GAAP, regulatory accounting described in FAS No 71, does not apply and therefore the adjustment above mentioned
has not been recorded.
(e) Deferred income taxes
Under Chilean GAAP, until December 31, 1999, deferred income taxes were recorded based on non-recurring timing differences
between the recognition of income and expense items for financial statement and tax purposes. Accordingly,
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i.
A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and tax
loss carryforwards.
ii.
The measurement of deferred tax liabilities and assets is based on the provisions of the enacted tax law. The effects of future
changes in tax laws or rates are not recognized prior to the period in which such changes are enacted into law.
iii.
Deferred tax assets are reduced by a valuation allowance, to the extent that, based on the weight of available evidence, it is
deemed more likely than not that the deferred tax assets will not be realized.
Temporary differences are defined as any difference between the financial reporting basis and the tax basis of an asset and liability
that at some future date will reverse, thereby resulting in taxable income or expense. Temporary differences ordinarily become taxable
or deductible when the related asset is recovered or the related liability is settled. A deferred tax liability or asset represents the
amount of taxes payable or refundable in future years as a result of temporary differences at the end of the current year.
The principal difference between U.S. GAAP and Chile GAAP relates to the reversal of the complementary assets and liabilities
recorded as a transitional provision for unrecorded deferred taxes as of January 1, 2000 and their corresponding amortization into
income. Additionally, under U.S. GAAP, temporary differences arising in connection with fair value adjustments on business
combinations result in deferred taxes and a corresponding adjustment to goodwill. An adjustment is required in the reconciliation to
U.S. GAAP to record goodwill arising from deferred tax liabilities related to past business combinations (see note 37 II (c)). When
required, the income tax effects of U.S. GAAP adjustments are recorded in our reconciliations to U.S. GAAP. The effect of these
differences on the net income and shareholders’ equity of the Company is included in paragraph (ee) below.
(f) PIS-COFIN
Brazilian Tax Dispute — PIS and COFINS
In 1998, Brazilian Law 9718/98 was enacted, which increased the base for both PIS (Contribuição aos Programas de Integração Social
— Contributions to Social Integration Programs) and COFINS (Contribuição para Financiamento da Seguridade Social —
Contributions to the Financing of Social Security), which are social contributions taxation on revenues, beginning in 1999 to be levied
on other revenue lines and not only sales, while at the same time, increasing the rate for COFINS from 2% to 3%.
The Company’s subsidiary in Brazil, Ampla, has decided not to pay such PIS and COFINS taxes under Law 9718/98 and has filed a
tax lawsuit dispute challenging that the payment of PIS and COFINS on other revenues was unconstitutional. During 2007, such
subsidiary received a favorable verdict from local courts, agreeing with the Company and ruling in favor of it on the grounds of the
unconstitutionality of Law 9718/98. Such ruling, however, could be appealed by the Brazilian Government and would only achieve a
final resolution upon the final decision of the Brazilian Federal Supreme Court. In this respect, several other companies have filed
similar lawsuits on the same basis and have obtained a favorable ruling on the matter from the Brazilian Federal Supreme Court. Such
cases have set a
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ANNUAL REPORT
base jurisprudence ground that makes virtually certain that the final verdict will be in favor of the Company and, therefore, reducing to
a remote, if any, the probability of the Company to make any payment in relation to this tax dispute.
The Company’s equity share of the effect of the adjustments from Chilean GAAP to U.S. GAAP for equity method investees is
included in paragraph (ee) below. The principal U.S. GAAP adjustments affecting the Company’s equity investees are as follows:
Under Chilean GAAP, after the favorable verdict by a local court of the Company’s dispute and considering the base jurisprudence,
the Company considered that it is not probable that it will have to pay any amount in relation to PIS and COFINS taxes as a result of
Law 9718/98. As such, we have reversed the provision in 2007.
(i) Reversal of capitalized foreign currency exchange differences related to capitalized interest.
(ii) Reversal of complementary accounts (asset or liability) recorded as a transitional provision in connection with the adoption of
Technical Bulletin N°60 as of January 1, 2000.
(iii) Organizational costs deferred under Chilean GAAP that, under U.S. GAAP, should have been included in income.
(iv) The recording of derivative instruments in accordance with SFAS No. 133.
(v) The deferred income tax effects of adjustments (i), (iii) and (iv).
Under US GAAP, the probability of payment is irrelevant if settlement of the liability is required by current law or by contract. When
the obligating event or transaction has occurred (in this instance, through sales or other revenues), the probability of payment is not
relevant in determining whether a contractual or legal obligation is a liability or a loss contingency. That is, when the obligating event
or transaction has occurred, the enterprise has incurred a liability; and accordingly, there is no contingency. Therefore, until the
Brazilian Federal Supreme Court announces a favorable and final ruling the amount should stay provisioned by not recording the
reversal made under Chilean GAAP.
(i) Goodwill
(i)
The effect of this difference on the net income and shareholder´s equity of the Company is included in paragraph (ee) below.
(g) Pension and post-retirement benefits
On January 1, 2002, the Company adopted SFAS 142 and thus ceased amortizing goodwill under US GAAP. Instead,
impairment tests are preformed at least annually on the level of reporting units.
Technical Bulletin No. 72 issued by Chilean Association of Accountants requires using fair value of acquired assets and
liabilities assumed for the accounting for all acquisitions after January 1, 2004, and consequently after that date difference in
accounting treatment related to the recognition of assets acquired and liabilities assumed between Chilean GAAP and US
GAAP no longer exists.
The effects of accounting for post-retirement benefits under US GAAP have been presented in paragraph (ee).
(h) Investments in related companies
Under US GAAP, in accordance with Accounting Principles Board Opinion No. 18, The Equity Method for Accounting for
Investment in Common Stock” (“APB No. 18”), the carrying amount of an investment accounted for under the equity method is
initially recorded at cost and shown as a single amount in the balance sheet of the investor. It is adjusted to recognize the investor’s
share of the earnings or losses of the investee determined under US GAAP subsequent to the date of investment. The investment
reflects adjustments similar to those made in preparing consolidated financial statements, including adjustments to eliminate intercompany gains and losses and to account for the differences, if any, between the investor’s cost and the underlying equity in net assets
of the investee at the date of investment. The investment is also adjusted to reflect the investor’s share of change in the investee capital
accounts.
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Under Chilean GAAP, for acquisitions that occurred until December 31, 2003 assets acquired and liabilities assumed were
recorded at their carrying value and the excess of the purchase price over the carrying value is recorded as goodwill. Circular
No. 1358, dated December 3, 1997 issued by the SVS, extended the maximum amortization period of goodwill to 20 years from
the previous 10 years.
Under US GAAP, assets acquired and liabilities assumed are recorded at their estimated fair values, and the excess of the
purchase price over the estimated fair value of the net identifiable assets and liabilities acquired are recorded as goodwill. Prior
to January 1, 2002 under US GAAP, the Company amortized goodwill on a straight-line basis over the estimated useful lives of
the assets, ranging from 20 to 40 years.
During 2006, the Company adopted FAS 158 “Employer’s Accounting for Defined Pension and Other Postretirement Plans - an
amendment of FASB Statements N°87, 88, 106 and 132 (R)”. These statements required the recognition of the funded status of a
benefit plan in the statement of financial position. It also requires the recognition as a component of other comprehensive income
(OCI), net of tax, of the gains or losses and prior service costs or credits that arise during the period, but are not recognized as
components of net periodic benefit cost pursuant to statements 87 or 106. The adoption resulted in the recognition through AOCI for
accumulated effect through the 2006 year - end of prior service costs and related plan assets in the balance sheet of the certain
Brazilian subsidiaries. The effects of the adoption of SFAS 158 are presented in paragraph (ee) below.
Under Chilean GAAP, until December 31, 2003 for all investments accounted for by the equity method, the proportionate net book
value of the investee company was recorded as an investment and the difference between the cost of investment and the proportionate
net book value of the investee was recorded as goodwill. The goodwill is to be amortized to income over a maximum period of twenty
years. The investment account is adjusted to recognize the investor’s share of the earnings or losses of the investee determined under
Chilean GAAP subsequent to the date of the purchase. Technical Bulletin No. 72 issued by Chilean Association of Accountants
requires using fair value of acquired assets and liabilities assumed for the accounting for all acquisitions after January 1, 2004 and
recording the differential between the cost and the fair value as goodwill/negative goodwill as well as prospectively designating all
investments of 20% to 50% as having significant influence rather than the 10% to 50% level previously defined as having significant
influence in Chilean GAAP. No retroactive changes or cumulative effects of changes in accounting principles were required under
Technical Bulletin No. 72.
183
(ii)
Under Chilean GAAP, the Company evaluates the carrying amount of goodwill for impairment on the level of cash-generating
units. The Company determines the impairment losses using a discounted cash flow approach and recent comparable
transactions in the market. In order to estimate recoverable value, the Company makes assumptions about future events that are
highly uncertain at the time of estimation. The results of this analysis showed no impairment of goodwill for the years ended
December 31, 2007 and 2008, apart from the impairment of goodwill over the Company’s equity method investee Gas Atacama
Holding. See Note 11(j).
Under US GAAP, goodwill is tested for impairment at least annually on the level of reporting units, which the Company
defined to be as operation units. In addition, goodwill is evaluated for impairment between these annual tests if events or
changes in circumstances indicate that goodwill might be impaired. The impairment test is performed based on a two-step
approach:
1. The first step is to compare each reporting unit’s fair value with its carrying amount including goodwill. If a reporting
units carrying amount (including goodwill) exceeds its fair value, goodwill might be impaired and the second step is
required
2. The second step is to compare the implied fair value of the reporting unit’s goodwill with the carrying amount of
goodwill. The implied fair value is computed by allocating the reporting unit’s fair value to all of its assets and liabilities
in a manner that is similar to a purchase price allocation in a business combination accounted for in accordance with
SFAS 141. The difference between the fair value of the reporting unit and the fair value of its net assets is the implied
fair value of goodwill. If the implied fair value of goodwill is less than its carrying amount, the carrying amount is
written-down against income to the implied fair value of goodwill.
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ANNUAL REPORT
The Company carried out the required annual impairment test of goodwill in the fourth quarter of each year.
(l) Accumulated deficit during the development stage
The following effects are included in the net income and shareholders’ equity reconciliation to US GAAP under paragraph (ee)
below:
Prior to the adoption of Circular 1819 issued by the SVS on January 1, 2007, under Chilean GAAP, the net income (loss) incurred
during the development stage of subsidiary companies are recorded directly in the parent company’s equity, rather than in income.
Furthermore, companies in the development stage were not consolidated even if the Company owned the majority of voting rights.
(i)
(ii)
(iii)
differences in the amount of goodwill under US GAAP related to basis differences in the original determination
and subsequent amortization methodology between Chilean GAAP and US GAAP;
the reversal of negative goodwill impairment under Chilean GAAP, as under US GAAP negative goodwill is
treated as an adjustment to the net book value of the related fixed assets to their fair value;
the reversal of goodwill amortization recorded under Chilean GAAP.
(j) Negative Goodwill
Under Chilean GAAP, until December 31, 2003, the excess of the carrying value of the assets assumed in a business combination over
the purchase price is recorded as negative goodwill. Circular No. 1358, dated December 3, 1997 issued by the SVS, extended the
maximum amortization period of negative goodwill to 20 years from the previous 5 years. Technical Bulletin No. 72 issued by
Chilean Association of Accountants requires using fair value accounting for all acquired assets and liabilities assumed for all
acquisitions after January 1, 2004. Technical Bulletin No. 72 states that whenever the negative goodwill exceeds the fair value of
identified non-monetary assets, the excess must be recognized immediately as income.
Under U.S. GAAP, the fair value of the net assets acquired in excess of the purchase price is allocated proportionately to reduce the
values assigned to long-lived assets. If the allocation reduces the long-lived assets to zero, the remainder of the excess is recorded as
an extraordinary gain to income.
The effect of reduced depreciation expense on the long-lived assets (for which no circumstances changed requiring an impairment test
under SFAS N°144) to which negative goodwill had been allocated under U.S. GAAP net of reversals of both amortization and writeoffs of negative goodwill recorded in Chilean GAAP (over the appropriate useful lives as defined in the first paragraph) are included
in paragraph (ee) below.
Adjustments related to negative goodwill necessary to make the consolidated financial statements conform to US GAAP are included
in paragraph (ee) below and are as follows:
•
•
The reversal of negative goodwill amortization and write-offs described in paragraph (i) above, which did not meet the US GAAP
impairment criteria for long-lived assets under SFAS 144 and the reversal of negative goodwill amortization recorded under
Chilean GAAP;
The effects of reducing depreciation expense, due to the proportionate allocation of the excess purchase price to property, plant
and equipment and other effects on income.
(k) Capitalized interest and exchange differences
In accordance with Chilean GAAP, the Company has capitalized both interest on debt directly related to property, plant and
equipment under construction and finance costs corresponding to exchange differences generated by the loans associated with such
assets. The capitalization of interest costs associated with projects under construction is optional when incurred on debt that is not
directly related to such projects. The Company has optioned for not capitalizing indirect interest cost under Chilean GAAP.
Under U.S. GAAP, the capitalization of interest on qualifying assets under construction is required, regardless of whether interest is
associated with debt directly related to a project to the extent that interest cost would have been avoided if the project had not been
done. In addition, under U.S. GAAP, foreign translation exchange differences must not be capitalized. The accounting differences
between Chilean and U.S. GAAP for financing costs and the related depreciation expense are included in the reconciliation to U.S.
GAAP under paragraph (ee) below.
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Under US GAAP, such results must be included in the consolidated statement of income. As of December 31, 2005 no company was
classified as development stage company. For the year ended December 31, 2007 and 2008, the effects of the adjustment are included
in paragraph (ee) below.
On January 1, 2007 the Company adopted Circular 1819 issued by the SVS (see note 3), requiring consolidation of subsidiaries in
development stage and recording income derived from development stage companies in accordance with accounting principles for
consolidation or investments in related companies, respectively. Thus, subsequent to the adoption of Circular 1819, the accounting
treatment under Chilean GAAP is the same as under US GAAP
(m) Minimum dividend
As required by the Chilean Companies Act, unless otherwise decided by the unanimous vote of the holders of issued and subscribed
shares, the Company must distribute a cash dividend in an amount equal to at least 30% of its net income for each year as determined
in accordance with Chilean GAAP, unless and except to the extent the Company has unabsorbed prior year losses or interim dividends
have been paid to shareholders. Net income related to the amortization of negative goodwill can only be distributed as an additional
dividend by the approval of the shareholders, and accordingly, is not included in the calculation of the minimum dividend to be
distributed. Since the payment of the 30% dividend out of each year’s income is required by Chilean law, an accrual has been made in
the reconciliation in paragraph (ee) below to reflect the unrecorded dividend liability for 2007 and 2008, whenever and to the extent
the recorded interim dividends do not reach the 30% minimum dividend.
(n) Capitalized general and administrative expenses
Under Chilean GAAP, Endesa Chile and certain Brazilian subsidiaries capitalize a portion of its administrative and selling expenses as
part of the cost of construction in progress because a substantial portion of the efforts of management were involved in the
administration of major projects. Under U.S. GAAP, general and administrative expenses are charged to expense unless they can be
directly identified with the supervision of the construction of specific projects. Under Chilean GAAP the Company has also
capitalized other administrative expenses into other long-term assets, which under US GAAP would not be allowed. The effects of
eliminating capitalized general and administrative expenses and the related depreciation and amortization for U.S. GAAP purposes are
shown below under paragraph (ee).
(o) Involuntary employee termination benefits
Under Chilean GAAP, the Argentine subsidiaries, Endesa Argentina S.A., recorded an accrual of certain involuntary employees
termination benefits related to the restructuring plan announced in 1997. Additionally, during 2003 the Company increased the amount
of the accrual recorded under Chilean GAAP. In accordance with US GAAP, in order to recognize a liability at the balance sheet date
for the cost to terminate employees involuntarily, the following conditions have to be met:
•
•
•
•
Management, having the authority to approve the action, commits to a plan of termination
The plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and
the expected completion date
The plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination
(including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of
benefits they will receive if they are involuntarily terminated, and
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the
plan will be withdrawn.
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ANNUAL REPORT
As of December 31, 2006 and 2007 this requirement had not been met. As of December 31, 2008 the accrued liability was
extinguished.
•
The effect of eliminating the accrued liability recognized is presented in paragraph (ee) below.
Under BT 64, the investment in the foreign subsidiary is price-level restated, the effects of which are reflected in income, while the
effects of the foreign exchange gains or losses between the Chilean Peso and the US dollar on the foreign investment measured in US
dollars, are reflected in equity in the account “Cumulative Translation Adjustment”.
(p) Revenue recognition in Edesur
During 2005, Edesur reached final agreement with the relevant Argentinean authorities regarding an increase in tariffs related to
electricity distribution services. This increase is currently pending ratification via formal decree by the executive power of the
Argentinean government (PEN). At December 31, 2005 the Company believed were probable that the economic benefits associated
with the tariff increase will flow to the enterprise, and that all other revenue recognition criteria established by Chilean GAAP has
been met. Accordingly, the effects of the rate increase were included in 2005 revenues under Chilean GAAP. During 2006 there have
been no ratification regarding the increase in tariffs; hence, the initial probable belief of the Company was reassessed and is not longer
considered. Therefore, under Chilean GAAP the effects of the rates tariffs recognized as of December 31, 2005 has been adjusted and
recognized in 2006. However, the effects of the increase in tariffs have not been included in revenues under U.S. GAAP, because
management believes that the persuasive evidence of an arrangement criterion under SAB Topic 13 is not met until the agreement is
formally ratified by the PEN.
The effect on net income for the years presented is included in (ee) below. Additionally, due to the adjustment recognized in 2006,
there are no differences between Chilean and US GAAP in shareholders’ equity in the presented years.
(q) Elimination of capitalized interest in Brazil
Until 1999, under Chilean GAAP, the Company capitalized interest to property, plant and equipment as a result of the creation of a
legal reserve specifically permitted in Brazil for the electricity industry by crediting interest expense. Under U.S. GAAP, interest
capitalized must be based on actual interest incurred, and as such the effects of the elimination of the interest capitalized to property,
plant and equipment and the effects on depreciation expense are included in paragraph (ee) below.
(r) Organizational and start-up costs
Certain costs related to the organization and creation of certain subsidiaries of the Company are deferred, capitalized and amortized
under Chilean GAAP.
Under U.S. GAAP, such organizational and start-up costs may not be deferred and must be included in income as incurred.
The effects of the difference are included in paragraph (ee) below.
(s) Translation of Financial Statements of Investments Outside of Chile
Under Chilean GAAP, in accordance with Technical Bulletin 64 (“B.T. 64”) the financial statements of foreign subsidiaries that
operate in countries exposed to significant risks (“unstable” countries), and that are not considered to be an extension of the parent
company’s operations, are remeasured into US dollars. The Company’s foreign subsidiaries in Argentina, Peru, Brazil, and Colombia
all meet the criteria of foreign subsidiaries that operate in countries exposed to significant risks under BT 64, and are remeasured into
US dollars. The Company has remeasured its foreign subsidiaries into US dollars under this requirement as follows:
•
•
•
Monetary assets and liabilities are translated at year-end rates of exchange between the US dollar and the local currency.
All non-monetary assets and liabilities and shareholder’s equity are translated at historical rates of exchange between the US
dollar and the local currency.
Income and expense accounts are translated at average rates of exchange between the US dollar and local currency.
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The effects of any exchange rate fluctuations between the local currency and the US dollar are included in the results of
operations for the period.
The amounts of foreign exchange gain (losses) included in income that is attributable to operations in unstable countries because these
amounts have been remeasured into US dollars were, before minority interest, ThCh$(41,476,552), ThCh$(166,191,917) and
ThCh$195,917,262 for the years ended December 31, 2006, 2007 and 2008, respectively (See Note 23).
Under US GAAP, the functional currency is determined based on criteria provided by SFAS 52, resulting in the functional currency of
an entity being the currency of the primary economic environment of operations of the entity. Differences resulting from fluctuation of
exchange rates between foreign currencies and functional currency are recorded in income, whereas translation differences from
converting the financial statements from functional currency to the group’s presentation currency are recorded in other comprehensive
income.
Company’s Management believes that, foreign currency translation procedures described above are part of the comprehensive basis of
preparation of price-level adjusted financial statements required by Chilean GAAP. Inclusion of inflation and translation effects in the
financial statements is considered appropriate under the inflationary conditions that have historically affected the Chilean economy,
and accordingly, are not eliminated in the reconciliation to U.S. GAAP as permitted by SEC Staff.
(t) Derivative instruments
The Company engages in derivative activity for hedging purposes. These derivatives are considered accounting hedges under Chilean
GAAP. Under Chilean GAAP the accounting treatment of hedging activity is similar to the accounting treatment of fair value hedges
and cash flow hedges under SFAS 133, however under Chilean GAAP the changes in the fair value for cash flow hedges is recorded
against other assets (losses no realized) or other liabilities (gain no realized) in the balance sheet. The documentation and hedge
effectiveness requirements under Chilean GAAP though are not as burdensome as under SFAS 133.
Under US GAAP, if the derivative is designated as a fair value hedge, changes in fair value of the derivative and of the hedged item
attributable to the hedged risk are recognized directly in earnings. If the derivative is designated as a cash flow hedge, the effective
portion of changes in the fair value of the derivative are recorded in Other Comprehensive Income (“OCI”) and are reclassified into
earnings in the same period during which the hedged item affects earnings. Ineffectiveness, if any, is reflected directly in earnings.
Finally, the gain or loss on a hedging derivative instrument that is designated as, and is effective as, an economic hedge of the net
investment in a foreign operation shall be reported in the same manner as a translation adjustment to the extent it is effective as a
hedge. The ineffective portion of net investment hedges shall be reported in earnings. If the derivative is not designated as a hedge, or
if it does not meet the requirements for hedge accounting under SFAS 133, changes in fair value of the derivative instrument are
recorded directly in earnings.
Until December 31, 2004 the Company applied hedge accounting only to some derivative instruments under US GAAP. All those
derivative instruments where hedge accounting did not apply have been accounted at fair value with changes in fair value recognized
directly in earnings. However, hedge accounting was applied under Chilean GAAP to other derivative instruments in addition to those
applied under US GAAP in those periods. Starting as of and for the years ended December 31, 2006, 2007 and 2008, the Company
applied hedge accounting under both Chilean and US GAAPs to a portfolio of derivative instruments executed in those years.
The Company has designated under Chilean GAAP certain non-derivative financial instruments as hedges of the foreign currency
exposure of net investments in foreign operations. The gain or loss on the non-derivative financial instrument that is designated as a
hedge is reported as a translation adjustment to the extent it is effective as a hedge, any ineffectiveness is recorded in earnings. This
accounting treatment is consistent with SFAS 52 and SFAS 133.
F-150
185
186
enersis08
ANNUAL REPORT
SFAS 133 also requires that certain embedded derivatives be separated and reported on the balance sheet at fair value and be subject
to the same rules as other derivative instruments. Current Chilean accounting rules do not consider the existence of derivative
instruments embedded in other contracts and therefore they are not reflected in the financial statements under Chilean GAAP.
The effects of the adjustment with respect to financial derivatives, commodity derivatives, and embedded derivatives for the years
ended December 31, 2006, 2007 and 2008 are included in the net income and shareholders’ equity reconciliation to US GAAP under
paragraph (ee) below.
(u) Fair value of long-term debt assumed
As part of the purchase of the majority ownership interest in Endesa Chile, a portion of the purchase price was allocated to the fair
value of long-term debt. As discussed in paragraph (i), up until December 31, 2003, under Chilean GAAP, assets acquired and
liabilities assumed were recorded at their carrying value, and the excess of the purchase price over the carrying value was recorded as
goodwill. Under U.S. GAAP, assets acquired and liabilities assumed are recorded at their estimated fair values, and the excess of the
purchase price over the estimated fair value of the net identifiable assets and liabilities acquired is recorded as goodwill.
The effect on shareholders’ equity and net income for the years presented is included in paragraph (ee) below.
(v) Deferred income
During 2000, fiber optic cable was contributed to the Company in return for granting the contributing company access to the fiber
optic network after installation in the Company’s electricity distribution system. Under Chilean GAAP, the contributed assets were
recorded at their fair market value, with a corresponding credit recognized as income in 2000. Under U.S. GAAP, the amount was
deferred and amortized over the life of the related service contract. This adjustment reverses the gain under Chilean GAAP and
records the amortization of the deferred income recognized under U.S. GAAP.
The effect on shareholders’ equity and net income for the years presented is included in (ee) below.
(w) Regulated assets and deferred costs
The electricity sector in Chile and other Latin American countries is regulated pursuant to applicable laws. Most of the Company’s
sales are subject to node price regulation, which is designed to ensure an adequate supply of energy at reasonable, determined prices,
which considers a variety of factors. The marginal cost pricing model is not solely based upon costs incurred by the Company, and as
a result, the requirements of U.S. GAAP under SFAS No.71, “Accounting for the Effects of Certain Types of Regulation”, related to a
businesses whose rates are not regulated are not applicable, except for the Company’s operations in Brazil as described below.
As a result of changes in Brazilian Electricity Laws and Regulations, the Company’s distribution subsidiaries in Brazil, Ampla
Energia e Serviços S.A. (AMPLA, ex CERJ) and Companhia Energética do Ceará (Coelce), are subject to the provisions of SFAS
No. 71 beginning on January 1, 2001. With the new regulations issued by the National Agency of Electric Energy (ANEEL), the ratesetting structure in Brazil is now designed to provide recovery for allowable costs incurred, which will be recovered through future
increases in energy tariffs in order to recover losses experienced during the period of Brazilian Federal Government mandated energy
rationing from June 1, 2001 to December 31, 2001. The Company estimates remaining costs will be recovered approximately over a
period of five years, from the balance date.
Accordingly, the Company capitalizes incurred costs as deferred regulatory assets when it is probable that future revenue equal to the
costs incurred will be billed and collected as a direct result of the inclusion of the costs in an increased rate set by the regulator. The
deferred regulatory asset is eliminated when the Company collects the related costs through billings to customers. ANEEL perform a
rate review on an annual basis. If ANEEL excludes all or part of a cost from recovery, that portion of the deferred regulatory assets is
impaired and is accordingly reduced to the extent of the excluded cost. The Company has recorded deferred regulatory assets, which it
expects to pass on to its customers in accordance with and subject to regulatory provisions.
F-151
The regulations also included certain fixes costs or VPA costs, which each distribution company is permitted to defer and pass on to
their customers using future rate adjustments. VPA costs are limited by concession contracts to the cost of purchased power and
certain other costs and taxes. Due to uncertainty in the Brazilian economy, ANEEL delayed the approval of such VPA rate increases.
An Executive Order in October 2001 created a tracking account mechanism, in order to calculate the variation in the VPA costs for
future rate adjustment calculation purposes. The Company has not recognized any regulatory assets for VPA costs incurred prior to
2001, because costs incurred prior to January 1, 2001, are not recoverable through the tracking account.
Under Chilean GAAP, the Company recognized revenue and deferred costs related to those assets. Under U.S. GAAP, in accordance
with EITF 92-7, “Accounting by Rate Regulated Utilities for the Effects of Certain Alternate Revenue Programs”, revenue amounts
not expected to be collected within 24 months, have been deferred.
The effect of deferring revenues expected to be collected after two years is included in (ee) below.
(x) Reorganization of subsidiaries
This adjustment corresponds to the following reorganizations of the Company’s subsidiaries:
•
•
•
•
Endesa Costanera S.A. and Central Buenos Aires (CBA) during 2001, in which Endesa Costanera acquired the minority interest
in CBA from third parties and exchanged shares with Endesa Argentina S.A.
During 2006, the Company’s subsidiary Edegel was merged with Etevensa, an entity which was controlled by Endesa
Internacional S.A., the Company’s parent company. This reorganization included a purchase of a minority interest portion in
exchange for shares of Edegel and cash.
On April 1, 2006 the Company’s subsidiaries Chilectra S.A. was merged with Elesur S.A. (currently Chilectra S.A.) which is
99.09% owned by Enersis S.A. This reorganization included a purchase of a minority interest portion by cash.
During 2007, the Company’s subsidiaries Betania and Emgesa were merged into a new entity Emgesa (merged entity). (See note
11 (f) iii). The merger was materialized through a stock exchange where the Company exchanged the shares it owned in Betania
and Emgesa for shares issued by the new entity Emgesa (merged entity). In addition, as a result of the share-exchange, the
Company purchased a portion of minority interest from a third party.
Under Chilean GAAP, the Company recorded these transactions under the pooling of interests method, using the book values of the
net assets acquired under merger accounting as prescribed by Technical Bulletin 72 for reorganizations under common control.
Under US GAAP, to the extent minority interest was acquired from a related party, the transaction shall be accounted for as a
transaction under common control, using the pooling-of-interest method and thus book values to reflect the increase in participation,
with any difference between purchase price consideration and book value of net assets acquired being recorded in shareholders’
equity. However, the purchase of minority interest to the extent that this minority interest was purchased from an unrelated party shall
be accounted for under the purchase method pursuant to SFAS 141, measuring the assets acquired and liabilities assumed at fair
values.
The effect of this difference on the net income and shareholder´s equity of the Company is included in paragraph (ee) below.
(y) Effects of minority interest on the U.S. GAAP adjustments
The net income and shareholders’ equity under Chilean GAAP is adjusted in the U.S. GAAP for the impact of the U.S. GAAP
reconciling items on the allocation of income and loss to minority interests. The sum of this adjustment and the minority interest
reflected in our consolidated income statement and balance sheet for each period presented under Chilean GAAP represents the
allocation of our results and shareholders’ equity to our minority shareholders under U.S. GAAP.
F-152
The effect of this adjustment is included in net income and shareholders’ equity reconciliation to US GAAP under paragraph (ee)
below.
ANNUAL REPORT
187
(cc) Accounting for the Impairment or Disposal of Long-Lived Assets
Under Chilean GAAP the company amortized bond discounts and deferred debt issuance costs using the straight line method over the
estimate maturity of the related debt. Under U.S. GAAP, deferred debt issuance costs and bond discounts have to be amortized using
the effective interest method. The effect of this adjustment included in the net income and shareholders equity reconciliation to US
GAAP under paragraph (ee) below.
In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company evaluates the
carrying amount of property, plant and equipment and other long-lived assets, in relation to the operating performance and future
undiscounted cash flows of the underlying business. This standard requires that an impairment loss be recognized in the event that
facts and circumstances indicate that the carrying amount of an asset may not be fully recoverable, when compared to the estimated
future undiscounted cash flows. Impairment is recorded based on estimates of future discounted cash flows, as compared to carrying
amounts. For the years ended December 31, 2006, 2007, and 2008 no additional amounts were recorded for impairment under US
GAAP.
(aa) Asset retirement obligations
(dd)Exchange of non-financial assets and acquisition of minority interest
Under Chilean GAAP, there is no requirement to record obligations associated with the retirement of tangible long-lived assets. Under
U.S. GAAP, the Company adopted SFAS No. 143, “Accounting for Asset Retirement Obligations” effective January 1, 2003.
Previously, the Company had not been recognizing amounts related to asset retirement obligations under U.S. GAAP. This standard
requires the Company to record the fair value of the legal obligation it has to make certain environmental restorations upon closure of
its facilities. The fair value of the liability is estimated by discounting the future estimated expenditures related to the restoration. The
Company then measures changes in the liability due to passage of time by applying an interest method of allocation to the amount of
the liability at the beginning of the period. The interest rate used to measure that change is the credit-adjusted risk-free rate that existed
when the liability, or portion thereof, was initially measured. For new liabilities, as well as for increases in fair value due to changes in
estimates that are treated like new liabilities, the interest rate used for subsequent valuations is the interest rate that was valid at the
time the new liability was incurred or when the change in estimate occurred. That amount is recognized as an increase in the carrying
amount of the liability and the expense is classified as an operating item in the statement of income, referred to as accretion expense.
As stated in Note 11 (f) iii, during 2007, the Company’s subsidiaries in Colombia were subject to a reorganization which involved the
purchase of a minority interest portion. Under Chilean GAAP, the transaction was accounted for as a transaction under common
control using book valued of the involved assets and liabilities, with any differences between net assets given up and net assets
received being recorded in other reserves within shareholders’ equity. Under US GAAP, the several steps to materialize the
transaction were accounted for as follows:
(z) Amortization of bond discount and deferred debt issuance costs
At the same time the standard requires the Company to capitalize the new asset retirement obligation costs arising as the result of
additional liabilities incurred, such as the activation of a new generation facility, and subsequently allocate that asset retirement cost to
expense over the life of the plant based on the useful life of the plant. As of December 31, 2006, 2007 and 2008, the adjustment to US
GAAP income from continuing operations represents the accreted interest expense and depreciation of the costs capitalized for the
asset retirement obligations.
In Peru, where we have eight hydroelectric plants and one thermoelectric plant, existing legislation includes the requirement for
entities with electrical assets to conduct retirement activities when operations cease. In Chile, under certain concession decrees
governing six distribution lines, we are similarly required to conduct retirement activities upon cessation of operations.
a.
b.
c.
The exchange of the participation in Betania against participation of Emgesa (merged entity) was accounted for as an exchange
of financial assets, realizing a loss to the extent the transaction did not represent a common control transaction
To the extent that minority interest was purchased from third parties, the transaction was accounted for under the purchase
method pursuant to SFAS 141, with any excess of the purchase price consideration over the fair value of identifiable net assets
acquired being accounted for as goodwill.
To the extent third parties were involved, the disposal of a portion of participation of Emgesa (merged entity) was accounted for
as a partial disposal of investments, affecting net income of the period to the extent the fair value of consideration received
exceeded the book value of the investment together with the pro-rata portion of goodwill, fair value increment to net assets and
accumulated other comprehensive income previously accounted for.
To the extent the transaction was carried out among parties under common control, book values were used and differences between
consideration given (step a. and b.) and consideration received (step c.) over the book value of net assets received (step a. and b.) and
book value of net assets given up (step c.) being recorded in other reserves of shareholders’ equity.
The effects of this U.S. GAAP adjustment on net income and shareholders’ equity are presented in note (ee) below.
(bb)Creation of Endesa Brasil
On September 30, 2005, certain Brazilian affiliates under common control were reorganized under a newly created holding company,
Endesa Brasil S.A. In connection with this reorganization, Enersis transferred its interest in certain investees to Endesa Brasil in
exchange for a 53.57% direct and indirect interest therein. The Company began accounting for Endesa Brasil as a consolidated
subsidiary as of that date. The difference between net assets contributed and received generated a difference if ThCh$7,400,218
presented as reserve in equity. Although the transaction received the same accounting treatment under both Chilean GAAP and US
GAAP, as a result of the existing adjustment to US GAAP in the subsidiaries which were the subject of the reorganization, an
incremental charge to equity of ThCh$1,546,441 was recorded.
The effect of this adjustment is included in the net income and shareholders’ equity reconciliation to US GAAP under paragraph (ee)
below.
F-153
F-154
188
enersis08
ANNUAL REPORT
The reconciliation to conform shareholders’ equity amounts to U.S. GAAP is as follows:
(ee) Effect of conforming to U.S. GAAP
2007
ThCh$
The reconciliation of reported net income required to conform to U.S. GAAP is as follows:
2006
ThCh$
Net income in accordance with Chilean GAAP.................................................
As of December 31,
2007
ThCh$
2008
ThCh$
334,455,240
205,141,910
570,883,101
1,099,512
1,098,707
629,124
(1,315,781)
—
13,891,827
—
181,867
5,582,929
64,706,396
20,764,087
13,921,119
(2,383,114)
36,737
579,800
(354,402)
(3,427,789)
(24,907)
4,762,461
(1,024,958)
(140,336,629)
13,569,706
(14,699,882)
996,880
2,331,768
64,425,824
15,285,028
9,041,723
(1,591,899)
31,384
560,765
—
(10,625,016)
(20,021)
—
(1,364,147)
(5,871,889)
14,532,214
—
22,619,289
14,649,030
64,785,534
13,994,300
5,853,958
(2,947,511)
36,914
583,015
—
(9,328,252)
(22,912)
—
Reversal of amortization of revaluation of property, plant and
equipment (paragraph b) ...................................................................................
Depreciation of property, plant and equipment and difference in fixed assets value
at acquisition date (paragraph c) ......................................................................
Special Obligations (paragraph d) .........................................................................
Deferred income taxes (paragraph e).....................................................................
PIS - COFIN (paragraph f) ....................................................................................
Pension and post-retirement benefits (paragraph g)...............................................
Investments in related companies (paragraph h)....................................................
Amortization and impairment of goodwill (paragraph i) .......................................
Amortization of negative goodwill (paragraph j)...................................................
Capitalized interest (paragraph k)..........................................................................
Depreciation capitalized interest (paragraph k) .....................................................
Difference foreign exchange capitalized (paragraph k) .........................................
Depreciation difference foreign exchange capitalized (paragraph k).....................
Accumulated deficit during the development stage (paragraph l)..........................
Capitalized general and administrative expenses (paragraph n) ............................
Involuntary employee termination benefits (paragraph o).....................................
Revenue recognition in Edesur (paragraph p)........................................................
Elimination of amortization of capitalized interest in Brazil
(paragraph q).....................................................................................................
Amortization of organizational and start-up costs (paragraph r)............................
Derivative instruments operating income (paragraph t).........................................
Derivative instruments non operating income (paragraph t)..................................
Fair value of long-term debt assumed (paragraph u) .............................................
Deferred income (paragraph v)..............................................................................
Regulated assets and deferred cost (paragraph w) .................................................
Reorganization of subsidiaries (paragraph x) ........................................................
Effects of minority interest on the U.S. GAAP adjustments
(paragraph y).....................................................................................................
Deferred tax effects on the U.S. GAAP adjustments .............................................
Amotization of bond discount and deferred debt issuance cost (paragraph z) .......
Asset retirement cost - (paragraph aa) ...................................................................
Asset retirement obligations - liabilities (paragraph aa) ........................................
546,088
2,789,422
1,238,573
(99,547)
(32,012)
152,726
(4,166,897)
(277,092)
475,096
1,979,967
2,105,825
(2,302)
(32,011)
132,623
522,132
(1,019,781)
558,378
714,780
(96,415,518)
—
(32,012)
156,567
—
(1,282,498)
(8,434,553)
(22,012,694)
2,735,140
(14,141)
(1,333,550)
67,624,120
(10,593,628)
(537,978)
(27,277)
(21,659)
4,407,041
22,573,245
27,727
(212,288)
(101,120)
Net income in accordance with U.S. GAAP.......................................................
423,567,445
204,790,417
619,426,070
Net income in accordance with U.S. GAAP.......................................................
Other comprehensive income (loss):
Cumulative translation adjustment determined under Chilean GAAP
net of minority interest .....................................................................................
Cumulative translation adjustment related to U.S GAAP adjustments
net of minority interest .....................................................................................
Fair value change of hedging instruments used in cash flow hedges.....................
SFAS 158 ..............................................................................................................
423,567,445
204,790,417
619,426,070
Comprehensive income in accordance with U.S.GAAP........................................
18,456,903
(133,746,994)
134,668,311
(3,899,764)
(52,334,386)
—
5,006,198
2,164,347
(524,630)
(46,634,500)
50,456,128
(12,356,132)
385,790,198
77,689,338
745,559,877
Shareholders’ equity in accordance with Chilean GAAP ..................................................
3,161,595,289
3,697,212,812
Reversal of revaluation of property, plant and equipment net of accumulated amortization
revaluation of property, plant and equipment (paragraph b) ...............................................
Depreciation of property, plant and equipment and difference in fixed asset value at
acquisition date (paragraph c) .............................................................................................
Special Obligations (paragraph d)............................................................................................
Deferred income taxes (paragraph e) .......................................................................................
PIS - COFIN (paragraph f) ......................................................................................................
Pension and post-retirement benefits (paragraph g).................................................................
Investments in related companies (paragraph h)......................................................................
Goodwill (paragraph i).............................................................................................................
Goodwill gross amount (paragraph i) ......................................................................................
Negative goodwill (paragraph j) ..............................................................................................
Capitalized interest (paragraph k) ............................................................................................
Exchange difference (paragraph k) ..........................................................................................
Minimum dividend (paragraph m)...........................................................................................
Capitalized general and administrative expenses (paragraph n) ..............................................
Involuntary employee termination benefits (paragraph o) .......................................................
Elimination of capitalized interest in Brazil (paragraph q) ......................................................
Organizational and start-up costs (paragraph r) .......................................................................
Derivative instruments (paragraph t) .......................................................................................
Fair value of long-term debt assumed (paragraph u) ...............................................................
Deferred income (paragraph v)................................................................................................
Reorganization of subsidiaries (paragraph x) ..........................................................................
Effects of minority interest on the U.S. GAAP adjustments (paragraph y) .............................
Deferred tax effects on the U.S. GAAP adjustments ...............................................................
Amotization of bond discount and deferred debt issuance cost (paragraph z).........................
Asset retirement cost (paragraph aa)........................................................................................
Asset retirement obligations - liabilities (paragraph aa) ..........................................................
(9,691,211)
(8,735,958)
(13,359,441)
(140,336,629)
(191,649,395)
(14,699,882)
3,159,019
(21,088)
618,821,594
103,820,980
(333,506,435)
87,959,033
(21,783,421)
(41,210,365)
(42,612,941)
19,480
(4,674,677)
(5,975,801)
(33,261,610)
160,059
(1,858,182)
32,970,850
296,962,344
(12,659,478)
2,197,158
1,111,815
(2,814,439)
(14,327,845)
(170,933,922)
(187,607,279)
(13,104,506)
1,594,944
5,247,490
688,430,588
106,287,237
(371,394,333)
106,362,668
(22,194,595)
(119,138,814)
(56,730,510)
—
(4,939,912)
(6,313,877)
(71,541,552)
128,047
(2,029,003)
35,722,520
351,339,843
1,323,185
2,224,888
987,956
(3,260,350)
Shareholders’ equity in accordance with U.S. GAAP.........................................................
3,438,662,626
3,944,609,722
The changes in shareholders’ equity in U.S. GAAP as of each year-end are as follows:
2006
ThCh$
As of December 31,
2007
ThCh$
2008
ThCh$
Shareholders equity in accordance with U.S. GAAP - January 1
3,274,121,910
3,548,895,923
3,438,662,626
Dividends paid during the year ...................................................
Reversal of dividends payable as of previous balance sheet date
Minimum dividend payable (paragraph m).................................
Reorganization under common control (paragraph x and bb).....
Fair value change of hedging instruments used in cash flow
hedges, net of deferred tax ......................................................
SFAS 158, Brazilian subsidiaries, net of deferred tax ................
Cumulative translation adjustment..............................................
Net income in accordance with U.S. GAAP for the year............
(80,577,412)
18,815,091
(55,800,970)
(5,609,099)
(192,773,849)
55,800,970
(41,210,365)
(9,739,392)
(161,684,332)
41,210,365
(119,138,814)
—
(52,334,386)
12,156,208
14,557,136
423,567,445
2,164,347
(524,630)
(128,740,795)
204,790,417
50,456,128
(12,356,132)
88,033,811
619,426,070
Shareholders equity in accordance with U.S.GAAP December 31 ...........................................................................
F-155
2008
ThCh$
3,548,895,923
F-156
3,438,662,626
3,944,609,722
II.
ANNUAL REPORT
189
(c) Income taxes:
Additional disclosure requirements:
The provision (benefit) for income taxes charged to the results of operations determined in accordance with U.S. GAAP is as follows:
(a) Goodwill and negative goodwill
The following is an analysis of goodwill and negative goodwill, determined on Chilean GAAP basis, as of December 31, 2007 and
2008, respectively:
2007
ThCh$
Goodwill ..................................................................................................................................
Less: accumulated amortization...............................................................................................
2008
ThCh$
2,104,288,287
(1,406,044,995)
2,107,234,230
(1,471,540,563)
Goodwill, net ...........................................................................................................................
698,243,292
635,693,667
Negative goodwill....................................................................................................................
Less: accumulated amortization...............................................................................................
(558,344,747)
517,622,333
(565,372,325)
523,841,831
Negative goodwill, net.............................................................................................................
(40,722,414)
(41,530,494)
Amortization expense under Chile GAAP is disclosed in Note 13.
(b) Basic and diluted earnings per share:
2006
Ch$
For the year ended December 31,
2007
Ch$
Chile
ThCh$
Income tax provision under
Chilean GAAP
Current income taxes as
determined under Chilean
GAAP ..................................
Deferred income taxes as
GAAP ..................................
Total income tax provision
under Chilean GAAP ...........
U.S. GAAP adjustments:
Deferred tax effect of
applying SFAS No. 109 .......
adjustments to U.S. GAAP ..
U.S. GAAP reclassifications (1)
Total U.S. GAAP adjustments:
2008
Ch$
Chilean GAAP earnings per share ............................................................
10.24
6.28
17.48
Basic and diluted U.S. GAAP earnings per share.....................................
12.97
6.27
18.97
Total number of common outstanding shares at December 31, ................
32,651,166
32,651,166
32,651,166
Weighted average number of common shares outstanding (000’s) ..........
32,651,166
32,651,166
32,651,166
There are no requirements to provide earnings per share disclosures under Chilean GAAP. The earnings per share figures disclosed
above for both US GAAP and Chilean GAAP purposes have been calculated by dividing the respective consolidated net income in
accordance with US GAAP and Chilean GAAP, respectively, by the weighted average number of common shares outstanding during
the year. The Company has not issued convertible debt or equity securities nor does it have other common stock equivalent securities
or stock options outstanding. Consequently, there are no potentially dilutive effects on the earnings per share of the Company.
Total Income tax provision
under U.S. GAAP ....................
Chilean GAAP
GAAP ..................................
GAAP ..................................
applying SFAS No. 109 .......
F-157
Argentina
ThCh$
Peru
ThCh$
2006
Brazil
ThCh$
Colombia
ThCh$
Total
ThCh$
(56,727,666)
(5,272,313)
(39,468,492)
(78,253,364)
(99,658,160) (279,379,995)
97,839,061
(12,725,136)
(9,575,366)
65,105,489
27,378,368
41,111,395
(17,997,449)
(49,043,858)
(13,147,875)
(72,279,792) (111,357,579)
168,022,416
6,825,031
145,936
6,920,860
—
—
13,891,827
(8,286,902)
100,628
(4,184,291)
—
(8,738,805)
—
1,993,793
—
(2,796,489)
213,127
(22,012,694)
313,755
(1,361,243)
(4,038,355)
(1,817,945)
1,993,793
(2,583,362)
(7,807,112)
39,750,152
(22,035,804)
(50,861,803)
(11,154,082)
Chile
Argentina
Peru
ThCh$
ThCh$
ThCh$
2007
(74,863,154) (119,164,691)
Brazil
Colombia
Total
ThCh$
ThCh$
ThCh$
(41,651,209)
(28,873,512)
(37,045,270)
(66,634,816)
(36,838,668)
(7,360,866)
36,260
(78,489,877)
(36,234,378)
(37,009,010)
(59,817,862)
6,816,954
(61,864,578) (236,069,385)
(2,261,853)
(39,608,173)
(64,126,431) (275,677,558)
6,986,500
124,944
6,458,262
—
—
(8,894,487)
585,662
(8,687,737)
6,029,906
373,028
(10,593,628)
(1,907,987)
710,606
(2,229,475)
6,029,906
373,028
2,976,078
Total Income tax provision
under U.S. GAAP ....................
(80,397,864)
(35,523,772)
(39,238,485)
(53,787,956)
F-158
13,569,706
(63,753,403) (272,701,481)
190
enersis08
ANNUAL REPORT
Chilean GAAP
GAAP ..................................
GAAP ..................................
Deferred tax effect of applying
SFAS No. 109 ......................
Total Income tax provision under
U.S. GAAP ..............................
Chile
Argentina
Peru
ThCh$
ThCh$
ThCh$
2008
Brazil
Colombia
Total
ThCh$
ThCh$
ThCh$
(86,545,469)
(26,526,553)
(42,589,367)
(84,007,833) (128,544,193) (368,213,415)
(92,907,188)
1,647,195
5,685,359
(179,452,657)
(24,879,358)
(36,904,008)
6,879,537
130,519
7,522,158
—
—
14,532,214
11,022,168
17,901,705
743,558
874,077
6,439,463
13,961,621
2,812,509
2,812,509
1,555,547
1,555,547
22,573,245
37,105,459
(161,550,952)
(24,005,281)
(22,942,387)
(6,255,706)
9,069,220
(82,761,120)
(90,263,539) (119,474,973) (450,974,535)
(87,451,030) (117,919,426) (413,869,076)
(1) In 2006 certain tax-related income under Chilean GAAP were classified as non-operating, but under US GAAP would be
classified as income taxes
(i)
Deferred tax assets (liabilities) as of balance sheet dates are summarized as follows:
Deferred income tax assets:
Property, plant and equipment ...........
accounts ........................................
Actuarial deficit (companies in Brazil)
......................................................
Deferred income ................................
Provision real estate projects .............
Derivative contracts ...........................
Vacation accrual ................................
Tax loss carryforwards.......................
Contingencies ....................................
Salaries for construction-in progress..
Allowance for tariff decree ................
Intangible...........................................
Valuation allowance ..........................
Others ................................................
Provision for employee benefits ........
Total deferred income tax assets........
SFAS No. 109
Applied to
Chilean
GAAP
Balances
ThCh$
2007
SFAS No.
109 applied
to U.S. GAAP
Adjustments
ThCh$
Total
Deferred
Taxes under
SFAS No. 109
ThCh$
SFAS No. 109
Applied to
Chilean
GAAP
Balances
ThCh$
2008
SFAS No.
109 applied
to U.S. GAAP
Adjustments
ThCh$
Total
Deferred
Taxes under
SFAS No. 109
ThCh$
2,808,924
131,178,265
133,987,189
3,303,818
151,259,037
154,562,855
85,633,278
—
85,633,278
56,567,374
—
56,567,374
13,392,490
2,584,563
2,646,491
—
1,376,794
213,127,759
86,145,417
4,673,362
7,511,650
1,106,524
(17,543,528)
14,202,219
4,526,743
(1,074,067)
—
—
10,141,957
—
—
4,997,960
—
—
—
(3,786,604)
801,356
—
12,318,423
2,584,563
2,646,491
10,141,957
1,376,794
213,127,759
91,143,377
4,673,362
7,511,650
1,106,524
(21,330,132)
15,003,575
4,526,743
18,735,018
2,380,531
2,816,749
—
1,486,884
118,072,368
89,376,798
3,942,569
—
1,667,895
(18,199,113)
13,326,609
3,889,457
(542,281)
—
—
14,680,973
—
—
4,455,532
—
—
—
(4,861,104)
1,643,455
—
18,192,737
2,380,531
2,816,749
14,680,973
1,486,884
118,072,368
93,832,330
3,942,569
—
1,667,895
(23,060,217)
14,970,064
3,889,457
422,192,686
142,258,867
564,451,553
297,366,957
166,635,612
464,002,569
Property, plant and equipment ...........
Severance indemnities .......................
Regulated assets.................................
Finance costs......................................
Derivative contracts ...........................
Bond discount ....................................
Cost of studies ...................................
Imputed interest on
construction...................................
Materials used....................................
Exchange difference ..........................
Capitalized expenses..........................
Capitalized interest ............................
Accrued Expenses (Earned exigible) .
Intangible...........................................
Provision real estate projects .............
Contingencies ....................................
Others ................................................
463,520,673
1,853,016
27,976,849
21,156,063
—
1,428,467
9,758,104
120,861,863
—
—
—
3,751,510
373,517
—
584,382,536
1,853,016
27,976,849
21,156,063
3,751,510
1,801,985
9,758,104
477,954,950
1,415,328
15,364,126
14,612,551
—
3,292,381
7,659,391
126,134,121
—
—
—
2,624,284
378,231
—
604,089,071
1,415,328
15,364,126
14,612,551
2,624,284
3,670,612
7,659,391
4,311,595
878,155
7,403,290
2,561,451
—
—
—
—
—
22,935,011
—
—
—
—
29,897,427
—
—
—
—
34,028
4,311,595
878,155
7,403,290
2,561,451
29,897,427
—
—
—
—
22,969,038
4,041,198
807,175
3,608,162
493,812
3,275,586
3,279,627
422,328
947,128
1,485,474
15,910,004
—
—
—
—
36,154,023
—
—
—
—
21,768
4,041,198
807,175
3,608,162
493,812
39,429,609
3,279,627
422,328
947,128
1,485,474
15,931,772
Total deferred income tax liabilities ..
563,782,674
154,918,345
718,701,019
554,569,221
165,312,427
719,881,648
Net deferred assets (liabilities)...........
(141,589,988)
(12,659,478)
(154,249,466)
(257,202,264)
1,323,185
Complementary Account ...................
Net deferred assets (liabilities)...........
191,649,395
50,059,407
(191,649,395)
(204,308,873)
—
(154,249,466)
187,607,279
(69,594,985)
Deferred income tax liabilities:
F-160
(187,607,279)
(186,284,094)
(255,879,079)
—
(255,879,079)
ANNUAL REPORT
191
(ii) Accumulated tax losses by country as of December 31, 2007 and 2008, are as follows:
December 31, 2007
Amount
ThCh$
Chile............................................................
Argentina ....................................................
Colombia (a) ...............................................
Brazil...........................................................
Total............................................................
1,087,220,430
156,090,132
—
198,985,411
1,442,295,973
Year of expiration
Do not expire
2008/2012
—
Do not expire
(iii) A reconciliation of the U.S. GAAP Statutory Income Tax rate to the Company’s effective tax rate on net income is as follows:
December 31, 2008
Year of
Amount
expiration
ThCh$
550,422,393
3,600,370
—
122,718,252
676,741,015
Do not expire
2012/2013
—
Do not expire
ng the years ended December 31, 2006 and 2007, management did not expect that the subsidiaries in Colombia will be able to
recover deferred tax assets related to tax loss carry forwards. Thus, as of December 31, 2006, a valuation allowance has been
recorded, which covered the whole amount of the deferred tax asset related to tax loss carryforwards. However, due to the merger
of the Company’s Colombian Subsidiaries, the tax loss carryforwards were applied against income during the year ended
December 31, 2007.
Chile
ThCh$
Statutory US GAAP tax ...................
Effect of higher foreign tax rates .....
Increase (decrease) in rates resulting
from:
Price-level restatement not accepted
for tax purposes...........................
Non-taxable items ............................
Non-deductible items .......................
Effect of change in valuation
allowance ....................................
Prior years income tax......................
Other .................................................
US GAAP reclassifications (1) ........
Tax (benefit) expense at effective tax
rate...............................................
rate...............................................
rate...............................................
2006
Brazil
ThCh$
Colombia
ThCh$
Total
ThCh$
(2,632,638)
(2,787,498)
(12,251,056)
(11,890,730)
(31,556,947)
(31,556,947)
(40,335,028)
(51,011,949)
(150,161,714)
(97,247,123)
(6,206,641)
19,343,063
(73,806,359)
(7,123,287)
6,460,901
(15,936,865)
—
1,876,430
(28,700,385)
—
63,562,331
(18,077,698)
27,859,223
4,557,111
(17,443,110)
14,529,295
95,799,836
(153,964,417)
153,124,918
7,088,500
3,492,088
100,628
—
—
(16,417)
—
—
—
103,938
—
—
—
6,475,179
—
(68,017)
—
1,365,489
213,127
153,056,901
7,088,500
11,420,276
313,755
39,750,152
(22,035,804)
(50,861,803)
(11,154,082)
(74,863,154)
Argentina
ThCh$
Peru
ThCh$
2007
Brazil
ThCh$
Colombia
ThCh$
(119,164,691)
Total
ThCh$
(45,684,376)
—
(17,547,288)
(19,260,282)
(8,467,810)
(7,408,858)
(6,864,723)
(6,864,723)
(33,235,648)
(33,068,337)
(111,799,845)
(66,602,200)
(23,047,008)
106,322,011
(114,139,889)
1,195,126
24,254,026
(24,165,354)
(15,613)
5,279,232
(27,774,379)
—
69,543,031
(111,352,543)
—
14,248,380
(39,753,130)
(21,867,495)
219,646,680
(317,185,295)
(4,397,876)
2,174,368
(1,625,094)
—
—
—
—
—
(851,057)
—
—
1,751,002
27,609,204
—
446,128
23,211,328
2,174,368
(279,021)
(80,397,864)
(35,523,772)
(39,238,485)
(53,787,956)
(63,753,403)
(272,701,480)
Chile
ThCh$
from:
for tax purposes...........................
allowance ....................................
Other .................................................
Peru
ThCh$
(63,386,045)
—
Chile
ThCh$
from:
for tax purposes...........................
allowance ....................................
Other .................................................
Argentina
ThCh$
Argentina
ThCh$
Peru
ThCh$
2008
Brazil
ThCh$
Colombia
ThCh$
Total
ThCh$
(108,537,116)
—
(4,958,072)
(5,249,721)
(21,509,326)
(18,937,473)
(96,743,771)
(96,743,771)
(80,082,537)
(75,371,800)
(311,830,822)
(196,302,765)
(34,025,325)
101,131,002
(115,853,318)
(4,067,279)
1,351,755
(11,081,964)
3,884,083
27,588,348
(14,773,180)
—
144,038,318
(51,381,928)
—
38,913,743
(2,704,608)
(34,208,521)
313,023,166
(195,794,998)
(1,974,820)
(1,398,198)
(893,177)
—
—
—
—
1,036,621
(231,460)
—
—
13,380,122
—
1,325,776
—
(1,974,820)
964,199
12,255,485
(161,550,952)
(24,005,281)
(22,942,387)
(87,451,030)
(117,919,426)
(413,869,076)
(1) In 2006 US GAAP reclassifications were tax related income that under Chilean GAAP were classified as non-operating income,
but under US GAAP would be classified as income taxes.
F-162
192
enersis08
ANNUAL REPORT
Additionally, effective January 1, 2007, the Company adopted FASB Interpretation No. 48: “Accounting for Uncertainty in Income
Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes
recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards No. 109:
“Accounting for Income Taxes” (“FAS 109”). The Interpretation prescribes a threshold for the financial statement recognition and
measurement of a tax position taken or expected to be taken within an income tax return. For each tax position, the enterprise must
determine whether it is more likely than not that the position will be sustained upon examination by taxing authorities, based on the
technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than
not recognition threshold is then measured to determine the amount of benefit to be recognized within the financial statements. No
benefits may be recognized for tax positions that do not meet the more likely than not threshold. For tax positions that meet the more
likely than not threshold, the benefit to be recognized is the largest amount that is greater than 50% likely of being realized upon
ultimate settlement.
As a result of implementing FIN 48, there was no impact on the Company’s financial statements from the adoption of this
interpretation. In addition, as of the date of the adoption of FIN 48, the Company did not have any accrued interest and penalties
related to unrecognized tax benefits. The Company and its subsidiaries will recognize interest and penalties related to unrecognized
tax benefits in interest expense and other operating expense, respectively.
We are potentially subject to income tax audits in numerous jurisdictions in Chile and internationally until the applicable statute of
limitations expire. Tax audits by their nature are often complex and can require several years to complete. The following is a summary
of tax years, potentially subject to examination, in the significant tax and business jurisdictions in which we operate.
Jurisdiction
Tax Years Subject to Examination
Chile .......................................
Argentina................................
Brazil......................................
Colombia ................................
Peru ........................................
2003-2008
2002-2008
2004-2008
2003-2008
2004-2008
(d) Segment disclosures
The Company is primarily engaged in the distribution and generation of electricity in Chile, Argentina, Brazil, Colombia and Peru.
Enersis provides these and other services through four business segments:
Generation
Distribution
Transmission
Engineering Services and Real Estate
Corporate and other
Generation involves the generation of electricity primarily through its subsidiary Endesa Chile. Distribution involves the supply of
electricity to regulated and unregulated customers. Transmission involves the transmission of high voltage the electricity produced by
generation companies Engineering Services and Real Estate includes engineering services and real estate development. Corporate and
other includes computer-related data processing services and the sale of electricity-related supplies and equipment. The Company’s
reportable segments are strategic business units that offer different products and services and are managed separately. The methods of
revenue recognition by segment are as follows:
Generation
Revenue is recognized when energy and power output is delivered and capacity is provided at rates specified under contract terms or
prevailing market rates.
Distribution - Operating Revenues
Revenue is recognized when energy and power is provided at rates specified under contract terms or prevailing market rates.
Distribution - Non Operating Revenues
Revenue is recognized as services are provided, such as public light posts, telephone poles, and other services related to distribution
services.
Transmission
Revenue is recognized as services are provided, through to tolls for the transmission service of high voltage the electricity produced
by generation companies..
Engineering Services and Real Estate
Revenue is recognized as services are provided, or when projects are sold.
Corporate and Other
Revenue is recognized as services are provided, or when supplies or equipment are sold.
The following segment information has been disclosed in accordance with U.S. reporting requirements; however, the information
presented has been determined in accordance with Chilean GAAP:
2006
Transmission
ThCh$
Distribution
ThCh$
Engineering
services and
real estate
ThCh$
Corporate
and other
ThCh$
Eliminations
ThCh$
Consolidated
ThCh$
Sales to unaffiliated customers ......
Intersegment sales ..........................
1,338,105,142
386,873,098
93,596,281
74,707,036
2,937,659,641
22,175,934
39,654,745
18,562,692
77,759,836
156,201,906
—
(618,838,178)
4,486,775,645
39,682,488
Total revenues ................................
1,724,978,240
168,303,317
2,959,835,575
58,217,437
233,961,742
(618,838,178)
4,526,458,133
Operating income...........................
682,998,832
(887,149)
549,372,383
11,539,106
(11,241,519)
1,307,368
1,233,089,021
Participation in net income of
affiliate companies ...................
49,284,477
—
24,463,756
137,511
456,730,488
(524,722,758)
5,893,474
Depreciation and amortization.......
221,905,972
15,854,891
241,722,213
2,637,904
70,282,282
—
552,403,262
Identifiable assets including
investment in related
companies.................................
6,804,333,249
538,777,611
6,236,802,739
138,984,012
5,703,468,614
(6,483,927,201)
12,938,439,024
Capital expenditures.......................
202,937,282
2,214,826
392,826,085
1,908,049
5,688,368
—
605,574,610
2007
Generation
ThCh$
Transmission
ThCh$
Distribution
ThCh$
Engineering
services and
real estate
ThCh$
Corporate
and other
ThCh$
Eliminations
ThCh$
Consolidated
ThCh$
Sales to unaffiliated customers ......
Intersegment sales ..........................
1,654,332,005
430,888,027
38,578,666
56,439,826
3,057,046,510
18,238,148
38,597,071
21,019,969
66,006,586
154,856,469
—
(620,382,411)
4,854,560,838
61,060,028
Total revenues ................................
2,085,220,032
95,018,492
3,075,284,658
59,617,040
220,863,055
(620,382,411)
4,915,620,866
Operating income...........................
720,997,105
25,243,317
614,210,449
9,205,061
4,094,409
1,368,756,954
affiliate companies ...................
(11,652,140)
—
32,659,379
285,421
316,909,065
(397,836,512)
Depreciation and amortization.......
223,069,472
13,494,422
214,359,887
2,790,961
69,897,197
—
523,611,939
6,540,482,486
462,466,225
6,021,421,240
90,546,677
5,374,960,356
(6,034,149,108)
12,455,727,876
228,713,640
176,993
411,955,613
1,557,984
4,522,014
—
646,926,244
investment in related companies
..................................................
Capital expenditures.......................
F-163
Generation
ThCh$
F-164
(4,993,387)
(59,634,787)
ANNUAL REPORT
Transmission
ThCh$
Distribution
ThCh$
Engineering
services and
real estate
ThCh$
(f) Schedule of debt maturity:
Corporate
and other
ThCh$
2008
Generation
ThCh$
Sales to unaffiliated customers
Intersegment sales ...................
563,021,742
2,212,862,516
8,837,052
84,390,724
23,527,572
4,141,590,286
28,145,175
24,849,745
166,050,944
111,449,548
—
(714,438,189)
789,582,485
5,860,704,630
Total revenues .........................
2,775,884,258
93,227,776
4,165,117,858
52,994,920
277,500,492
(714,438,189)
6,650,287,115
Operating income ....................
1,040,321,628
60,405,072
877,116,472
7,470,902
(11,244,272)
4,727,656
1,978,797,458
affiliate companies .............
113,280,450
—
124,986,689
402,312
645,773,723
(886,814,038)
Depreciation and amortization
266,585,858
18,327,936
265,877,553
2,811,478
71,800,603
—
Eliminations
ThCh$
investment in related
companies ...........................
7,813,948,600
499,208,123
6,900,770,547
67,628,645
6,039,410,402
Capital expenditures ................
293,036,091
1,262,463
518,222,374
2,932,100
11,311,927
Consolidated
ThCh$
(2,370,864)
625,403,428
(6,921,338,440) 14,399,627,877
—
Following is a schedule of debt maturity in each of the next five years and thereafter:
As of
December 31, 2008
ThCh$
2009 ............................................................................
2010 ............................................................................
2011 ............................................................................
2012 ............................................................................
2013 ............................................................................
Thereafter....................................................................
1,207,769,173
558,831,719
638,324,164
401,082,980
443,309,104
1,641,048,619
Total............................................................................
4,890,365,759
(g) Disclosure regarding interest capitalization:
826,764,955
2006
ThCh$
A summary of activities by geographic area is as follows:
Chile
ThCh$
Argentina
ThCh$
Peru
ThCh$
Brazil
ThCh$
Colombia
ThCh$
Total
ThCh$
2006
Total revenues....................
1,448,950,949
777,525,781
4,526,458,133
Interest expense incurred .........................................................................
Interest capitalized under Chilean GAAP................................................
Interest capitalized under U.S. GAAP .....................................................
Long lived assets (net) (1)..
2,832,939,247 1,186,986,467 1,169,333,593 2,177,346,274 2,092,347,979
9,458,953,560
(h) Cash flow information:
Total assets.........................
3,980,656,398 1,534,889,069 1,303,619,143 3,504,975,385 2,617,648,958 12,941,788,953
2007 ...................................
Total revenues....................
1,822,253,622
576,417,404
615,044,354
429,962,320 1,293,601,679
391,800,341 1,238,218,673
193
848,303,876
2007
ThCh$
456,968,534
6,764,467
20,685,585
2,946,114,808 1,011,238,887 1,001,183,371 1,958,581,399 1,802,881,456
Total assets.........................
4,151,619,343 1,411,232,975 1,109,559,242 3,408,783,055 2,374,533,260 12,455,727,875
495,695,627
8,796,529
14,650,487
(i) The statement of cash flows under Chile GAAP differs in certain respects from the presentation of a statement of cash flow
under U.S. GAAP. Marketable securities under Chile GAAP qualify as cash flow equivalent, whereas under U.S. GAAP
they are classified as available - for -sale securities (See note 37 II (p))
4,915,620,866
443,534,445
5,684,773
14,726,496
2008
ThCh$
2006
ThCh$
8,719,999,921
As of December 31,
2007
ThCh$
2008
ThCh$
Cash flow from operating activities - Chile GAAP and US GAAP ....................
1,008,660,723
1,039,378,961
1,922,127,993
Cash flow from financing activities - Chile GAAP and US GAAP ....................
(347,472,146)
(194,367,309)
(346,352,599)
2008 ...................................
Total revenues....................
2,298,813,799
6,650,287,115
Cash flow investing activities Chile GAAP.........................................................
(593,776,264)
(753,084,184)
(780,348,600)
3,136,146,327 1,203,618,593 1,207,767,673 2,414,493,562 2,118,184,347 10,080,210,502
Differences between Chilean GAAP and US GAAP:
Purchase of marketable securities during period .................................................
(10,549,407)
(11,215,653)
—
Total assets.........................
5,190,328,942 1,590,311,290 1,344,787,713 3,532,274,680 2,741,925,252 14,399,627,877
Sale of marketable securities during period .........................................................
6,341,493
10,549,407
11,215,653
784,688,735
529,283,446 1,827,486,850 1,210,014,285
Cash flow investing activities US GAAP ............................................................
(597,984,178)
(753,750,430)
(769,132,947)
(1) Long-lived assets include property, plant and equipment.
Net cash flow ........................................................................................................
63,204,399
91,261,222
806,642,447
(e) Concentration of risk:
Effect of price-level restatement and foreign exchange differences....................
17,051,071
21,180,785
(121,532,317)
Net increase (decrease) in cash and cash equivalent............................................
Cash and cash equivalent at beginning of the year ..............................................
80,255,470
423,918,673
112,442,007
504,174,143
685,110,130
616,616,150
Cash and cash equivalent at end of the year ........................................................
504,174,143
616,616,150
1,301,726,280
The Company does not believe that it is exposed to any unusual credit risk from any single customer. The Company’s debtors are
dependent on the economy in Latin America, which could make them vulnerable to downturns in the economic activity in the
countries in which the Company operates.
No single customers accounted for more than 10% of revenues for the years ending December 31, 2006, 2007 and 2008.
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F-165
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ANNUAL REPORT
(ii) The reconciliation of cash and cash equivalents from Chilean GAAP to U.S. GAAP as of December 31, 2006, 2007 and
2008 is as follows:
2006
ThCh$
2007
ThCh$
2008
ThCh$
Long-term accounts receivable
The fair value of long-term accounts receivable was estimated using the interest rates that are currently offered for loans with similar
terms and remaining maturities.
Long-term debt
Cash and cash equivalent under Chilean GAAP......................
Elimination of marketable securities .......................................
514,723,550
(10,549,407)
627,831,803
(11,215,653)
1,301,726,280
—
The fair value of long-term debt was based on rates currently available to the Company for debt with similar terms and remaining
maturities.
Total cash and cash equivalents under US GAAP...................
504,174,143
616,616,150
1,301,726,280
Derivative instruments
(iii) Additional disclosures required under U.S. GAAP are as follows:
2006
ThCh$
Interest paid during the year ....................................................
Income taxes paid during the year ...........................................
Years ended December 31,
2007
ThCh$
349,893,746
182,356,671
355,684,288
165,440,366
2008
ThCh$
360,264,679
185,464,671
Estimates of fair values of derivative instruments for which no quoted prices or secondary market exists have been made using
valuation techniques such as forward pricing models, present value of estimated future cash flows, and other modeling techniques.
These estimates of fair value include assumptions made by the Company about market variables that may change in the future.
Changes in assumptions could have a significant impact on the estimate of fair values disclosed. As a result such fair value amounts
are subject to significant volatility and are highly dependent on the quality of the assumptions used.
The estimated fair values of the Company’s financial instruments compared to Chilean GAAP carrying amounts are as follows:
(iv) Under US GAAP, cash and cash equivalents includes all highly liquid debt instruments purchased with a maturity of three
months or less:
2006
ThCh$
(i)
2007
ThCh$
2008
ThCh$
Cash .........................................................................................
Time deposits and repurchase agreements...............................
116,717,921
387,456,222
89,275,796
527,340,354
133,550,264
1,168,176,016
Total cash and cash equivalents under US GAAP...................
504,174,143
616,616,150
1,301,726,280
Fair value measurements and the fair value option.
a)
Disclosures about fair value of financial instruments
The following methods and assumption were used to estimate the fair value of each class of financial instruments as of December 31,
2007 and 2008 for which it is practicable to estimate that value:
Cash
The fair value of the Company’s cash is equal to its carrying value.
Time deposits
The fair value of time deposits is equal to its carrying value due to its relatively short-term nature.
Marketable securities
The fair value of marketable securities that the Company classifies as available for sale, is based on quoted market prices of the
mutual money market funds held and is equal to its carrying value.
F-167
Carrying
amount
ThCh$
Cash ...........................................................................
Time deposits.............................................................
Marketable securities .................................................
Accounts receivable...................................................
Notes receivable, net..................................................
Other accounts receivable, net ...................................
Long-term accounts receivable ..................................
Accounts payable and other .......................................
Notes payable.............................................................
Long-term debt ..........................................................
Derivative instruments ...............................................
2007
89,275,796
440,591,912
12,847,437
1,075,260,601
12,892,797
108,649,553
165,946,198
212,940,711
(616,357,378)
(196,053,782)
(4,338,400,986)
(234,918,654)
Fair
Value
ThCh$
89,275,796
440,591,912
12,847,437
1,075,260,601
12,892,797
108,649,553
165,946,198
212,940,711
(616,357,378)
(196,053,782)
(4,545,625,575)
(234,918,654)
Carrying
amount
ThCh$
2008
133,550,264
624,749,431
105,047,106
1,138,162,639
7,749,050
95,067,667
30,882,447
201,124,587
(721,842,030)
(207,016,391)
(4,890,365,759)
(105,829,571)
Fair
Value
ThCh$
133,550,264
624,749,431
105,047,106
1,138,162,639
7,749,050
95,067,667
30,882,447
201,124,587
(721,842,030)
(207,016,391)
(5,300,189,253)
(105,829,571)
b) Fair Value Measurements
Effective January 1, 2008, the Company adopted SFAS No. 157, which defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a three-level fair value hierarchy
that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and
minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in
active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data.
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ANNUAL REPORT
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant
unobservable inputs.
The Company’s adoption of SFAS No. 157 did not have a material impact on our consolidated financial statements. The Company has
segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most
appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the
table below. FSP FAS 157-2 delayed the effective date for all nonfinancial assets and liabilities until January 1, 2009, except those
that are recognized or disclosed at fair value in the financial statements on a recurring basis.
The following section describes the valuation methodologies we use to measure different financial instruments at fair value.
Derivatives
The derivatives portfolio is entirely over-the-counter (OTC), your measurement is estimated using industry standard valuation models.
Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based
observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies. Also, these
estimates consider assumptions for the Company’s own credit risk and the corresponding party’s credit risk. Level 2 derivative assets
and liabilities primarily include certain over-the-counter, collar, cross currency swap, and swap contracts.
The Embedded derivative assets and liabilities included in Level 2 and Level 3 represent to derivative contracts corresponded to
foreign currency.
Debt and bond payable
Only the debt and bond payable designated as a hedged item in a fair value hedge are measurement to fair value. The measurement
this hedged items are the following:
When available, we use observable market data, including pricing on recent closed market transactions, to value this debt and bond
payable which are included in Level 2. When this data is unobservable, we use valuation methodologies using current market interest
rate data adjusted for inherent credit risk and such loans are included in Level 3. When appropriate, loans are valued using collateral
values as a practical expedient.
(thousands of Ch$)
Assets
Financial Derivatives .................
Embedded Derivative.................
Total assets ...................................
Liabilities
Financial Derivatives .................
Embedded Derivative.................
Debt and bond payable...............
Total liabilities..............................
December 31, 2008
Fair Value Measurements at Reporting Date Using
Level 1
Level 2
Level 3
2,486,567
3,849,419
6,335,986
—
—
—
2,486,567
—
2,486,567
—
3,849,419
3,849,419
(108,316,138)
(74,146,664)
(33,660,400)
(216,123,202)
—
—
—
—
(108,316,138)
(74,146,664)
(33,660,400)
(216,123,202)
—
—
—
—
F-169
195
(thousands of Ch$)
Balance, beginning of period ..........................................................
Total realized and unrealized gains (losses):
Included in income (expense) .........................................................
Included in other comprehensive income .......................................
Balance, end of period .............................
Fair Value Measurement Using
Significant Unobservable Inputs
(Level 3)
Derivatives
4,385,181
(1,308,371)
772,609
3,849,419
c) Fair Value Option
Effective January 1, 2008, the Company adopted SFAS No. 159, which provides entities the option to measure many financial
instruments and certain other items at fair value. Entities that choose the fair value option will recognize unrealized gains and losses
on items for which the fair value option was elected in earnings at each subsequent reporting date. The Company has currently chosen
not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting
principles generally accepted in the United States.
(j) Derivative instruments
The Company is exposed to the impact of market fluctuations in the price of electricity, primary materials such as natural gas,
petroleum, coal, and other energy-related products, interest rates, and foreign exchange rates. The Company has policies and
procedures in place to manage the risks associated with these market fluctuations on a global basis through strategic contract selection,
fixed-rate and variable-rate portfolio targets, net investment hedges, and financial derivatives. All derivatives that do not qualify for
the normal purchase and sales exemption under SFAS No. 133 are recorded at their fair value. On the date that swaps, futures,
forwards or option contracts are entered into, the Company designates the derivatives as a “hedge”, if the documentation is not
appropriate to designate as a “hedge”, the derivative’s mark-to-market adjustment flows through the income statement.
The Company has classified its derivatives into the following general categories: commodity derivatives, embedded derivatives and
financial derivatives. Certain energy and other contracts for the Company’s operations in Chile are denominated in the US dollar.
According to SFAS No. 133, an embedded foreign currency derivative should be separated from the host contract because none of the
applicable exclusions are met (See Embedded Derivative Contracts below). For purposes of evaluating the functional currency of the
Company’s subsidiaries in Argentina, Peru, Brazil, and Colombia, the Company applied BT 64, consistent with the methodology
described in Note 37 I paragraph (s), thus the functional currency of these subsidiaries was the US dollar as these subsidiaries were
remeasured into US dollars because foreign subsidiaries operate in countries exposed to significant risks as determined under BT 64.
F-170
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ANNUAL REPORT
The following is a summary of the Company’s derivative contracts as of December 31, 2007 and 2008.
Distribution
ThCh$
2007
Generation
ThCh$
Total
ThCh$
Embedded derivatives...............................................................................
Financial derivatives .................................................................................
4,385,182
(225,285,659)
20,960,483
(9,632,995)
25,345,665
(234,918,654)
Derivative instruments U.S.GAAP ...........................................................
(220,900,477)
11,327,488
(209,572,989)
Distribution
ThCh$
2008
Generation
ThCh$
Total
ThCh$
3,849,419
(95,052,747)
(74,146,664)
(10,776,824)
(70,297,245)
(105,829,571)
Derivative instruments U.S.GAAP ...........................................................
(91,203,328)
(84,923,488)
(176,126,816)
The following is the reconciliation of the Company’s derivative contracts from Chile GAAP to US GAAP:
Chile
GAAP
ThCh$
2007
Adjustment
ThCh$
—
(176,311,379)
25,345,665
(58,607,275)
25,345,665
(234,918,654)
Total..........................................................................................................
(176,311,379)
(33,261,610)
(209,572,989)
2008
Adjustment
ThCh$
US GAAP
ThCh$
—
(104,585,264)
(70,297,245)
(1,244,307)
(70,297,245)
(105,829,571)
Total..........................................................................................................
(104,585,264)
(71,541,552)
(176,126,816)
Certain Company’s generation and distribution commodity contracts in 2006 could be seen as contracts that meet the definition of a
derivative under SFAS No. 133 and are required to be accounted for at fair value. These conditions are (i) have an underlying, which
is the market price of power at the delivery location and a notional amount specified in the contract; (ii) have no initial payment on
entering into the contract; and (iii) have a net settlement provision or have the characteristic of net settlement because power is readily
convertible to cash, as it is both fungible and actively traded in the country of generation or country of distribution.
F-171
The Company has commodity contracts that are unique, due to their long-term nature and complexity. In establishing the fair value of
contracts management makes assumptions using available market data and pricing models. Factors such as commodity price risk are
also included in the fair value calculation. Inputs to pricing models include estimated forward prices of electricity and natural gas,
interest rates, foreign exchange rates, inflation indices, transmission costs, and others. These inputs become more difficult to predict
and the estimates are less precise, the further out in time these estimates are made. As a result, fair values are highly sensitive to the
assumptions being used.
Until December 31, 2005 the Company’s Argentine generation entities had access to the Brazilian energy market through an
interconnection system between those two countries. Due to action taken by Argentine Regulation Authorities, the exportations of
energy from Argentina to Brazil were limited, resulting in a default of most energy supply contracts the Company had entered into.
However, during 2006 the Brazilian regulator issued a statement that allowed these interconnection contracts to reduce their amounts
of power and energy to be delivered, and to accelerate their maturity date to December 2007. As a result of action taken by Argentine
and Brazilian regulation authorities, the contracts the Argentine subsidiaries had entered into ceased to exist as of the December 31,
2006.
Derivative instruments
US GAAP
ThCh$
Chile
GAAP
ThCh$
The Company assessed that its commodity contracts that are requirements contracts do not meet the above definition because the
contracts, do not have notional amounts, as they only have maximum amounts or no specified amounts, and do not include an implicit
or explicit minimum amount in a settlement or a default clause. A requirements contract allows the purchaser to use as many units of
power as required to satisfy its actual needs for power during the period of the contract, and the party is not permitted to buy more
than its actual needs. Such assessment is in line to US GAAP Derivates Implementation Group (“DIG”) response to Issuse A6 (“DIG
Issue A6”) Additionally, note that there were no such similar commodity contracts in 2007.
The use of derivative instruments is one of the Company’s tools to mitigate these risks. Hedging strategies applicable according to the
terms established by our Board of Directors are as follows:
(a)
Exchange rate risk hedging policy
The exchange rate risk hedging policy for the Enersis Group is based on cash flow. Its objective is to balance foreign currency
indexed flows and the assets and liability structure in such currency. In order to mitigate the exchange rate risk, the company has
entered into financial derivative contracts, such as cross currency swaps (“CCS”) and currency forwards, which have reduced the
impact of fluctuations of the exchange rate applicable to assets and liabilities subject to foreign currency volatility.
(b)
Interest rate risk hedging policy
The interest rate risk hedging policy for the Enersis Group is based on maintaining a significant level of debt not subject to interest
rate variations. We have set the desired level of fixed interest rate debt (which includes both variable rate instruments that have been
swapped to fixed rate, as well as variable rate instruments with a hedging option which limits the interest variability around a desired
minimum and maximum band) at approximately 70% of total debt. When the level of variable debt increases significantly above a
30% threshold, the Company uses derivative instruments, typically interest rate swaps and interest rate collars, as a tool to remain
close to the desired level of maximum unhedged variable debt.
As a result of the foregoing hedging policies, the Company uses cash flow hedges primarily. The exchange and interest rate hedging
policies convert variable cash flows into fixed cash flows. As of December 31, 2008, the maximum amount of time over which future
cash flows are hedged is 8 years approximately, which corresponds to a CCS with a notional value of ThCh$381,870,000 and a
negative fair value of approximately ThCh$91,150,768.
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ANNUAL REPORT
Embedded Derivative Contracts
Under US GAAP, for the years ended December 31, 2006, 2007 and 2008, the derivative portfolio for the Enersis Group is the
following:
Accounting
Classification
Cash Flow
Fair Value
Hedge
Investment
2006
Fair
Value
Notional
Value
2008
Risk
Hedged
Derivative
Instrument
Exchange
Rate
Interest
Rate
CCS
Forward
Collar
Swap
451,440,021
—
199,256,285
91,844,694
(166,316,730)
—
—
311,337
392,307,077
—
135,278,303
79,287,091
(214,226,720)
—
(1,190,449)
(649,336)
381,870,000
5,119,449
95,467,500
121,197,629
(91,150,768)
(1,391,742)
(3,186,745)
(4,329,014)
Exchange
Rate
Interest
Rate
CCS
Forward
Collar
Swap
31,133,795
—
—
—
(3,860,591)
—
—
—
66,492,554
—
—
—
(18,181,404 )
—
—
—
31,539,216
—
—
—
(5,771,302)
—
—
—
Exchange
Rate
Interest
Rate
CCS
Forward
Collar
Swap
1,556,690
—
—
—
(1,021,254)
—
—
—
574,662
—
—
—
(670,745)
—
—
—
—
—
—
—
—
—
—
—
775,231,485
(170,887,238)
673,939,687
(234,918,654)
635,193,794
(105,829,571)
Total
Notional
Value
(thousands Ch$)
2007
Notional
Fair
Value
Value
Fair
Value
The Company enters into certain contracts that have embedded features that are not clearly and closely related to the host contract. As
specified in SFAS No. 133, bifurcation analysis focuses on whether the economic characteristics and risks of the embedded derivative
are clearly and closely related to the economic characteristics and risks of the host contract. In certain identified contracts, the host
service contract and the embedded feature are not indexed to the same underlying and changes in the price or value of service will not
always correspond to changes in the price of the commodity to which the contract is indexed. U.S. GAAP requires embedded features
to be measured at fair value as freestanding instruments. Unless the embedded contracts are remeasured at fair value under otherwise
applicable GAAP, the embedded feature must be valued at fair value with changes in fair value reported in earnings as they occur.
Embedded foreign currency derivative instruments are not separated from the host contract and considered a derivative instrument if
the host contract is not a financia1 instrument and it requires payments denominated in either: (1) the currency of any substantial party
to the contract. (2) the local currency of any substantial party to the contract, (3) the currency used because the primary economic
environment is highly inflationary, or (4) the currency in which the good or service is routinely denominated in international
commerce.
(k) Presentation to U.S. GAAP
Certain reclassifications and adjustment would be made to the Chilean GAAP income statement in order to present the amounts in
accordance with U.S. GAAP. For example, certain non-operating income and expenses under Chilean GAAP would be included in the
determination of operating income under U.S. GAAP. Such reclassifications from non-operating to operating income and expense
include the following:
In order to allow hedge accounting classification under SFAS 133, it was necessary to fulfill strict documentation and effectiveness
requirements. Hedge accounting cannot be applied to derivatives that do not satisfy documentation requirements, and accordingly,
such operations are registered according to the general treatment of derivatives (“investment contracts”). As a result, fair value
adjustments to investment contracts have a direct effect on the income statement. This is a significant difference when compared to
Chilean GAAP, which is more flexible in its documentation requirements.
•
•
•
•
The Company performs tests on a quarterly basis in order to measure the effectiveness level of its accounting hedge, which may be
either a cash flow or fair value hedge. Test results for 2006, 2007 and 2008 revealed that the ineffective portion of our hedging
contracts were immaterial.
In addition to the above, recovered taxes included in other non-operating revenues under Chilean GAAP would be recorded as part of
income tax expense under U.S. GAAP, and equity in net income or loss of related companies included in non-operating results under
Chilean GAAP would be presented after income taxes and minority interest under U.S. GAAP.
Losses arising from contingencies and litigation, and reversals thereof
Gains and losses from disposals of fixed assets
Taxes, other than income taxes
Penalties and fines
Net Investment Hedges
Company has designated certain non-derivative instruments as hedges of net investments in foreign operations. Accounting
classification for such operations is the same under Chilean GAAP and under US GAAP (see Note 22 (e). The changes in the
cumulative translation adjustment are shown net of foreign currency gains or losses of debt designated as hedges for foreign net
investments. Gains (Loss) related to debt designated as hedges of Ch$(4.4) billion, Ch$108.3 billion and Ch$133.7 billion were
included in the cumulative translation adjustment for the years ended December 31, 2006, 2007 and 2008, respectively.
The Company is also exposed to foreign currency risk arising from long-term debt denominated in foreign currencies, the majority of
which is the US dollar. This risk is mitigated, as a substantial portion of the Company’s revenues are either directly or indirectly
linked to the US dollar. Additionally, the debts incurred by the Company related to net investments in foreign countries serve as a net
investment hedge, as they are incurred in the same currency as the functional currency of those foreign investments. As they qualify as
a net investment hedge, their gains and losses are included in the cumulative translation adjustment account in shareholders’ equity
(see Note ll (c) and Note 22 (e) for further detail).
F-173
F-174
197
198
enersis08
ANNUAL REPORT
The following reclassifications and adjustment disclose amounts in accordance with U.S. GAAP presentation:
2006
The effect of the reclassifications and adjustment discloses amounts using a U.S. GAAP presentation:
Chilean
GAAP
U.S. GAAP
Reclassification
Sub-total
U.S. GAAP
Adjustments
U.S. GAAP
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
Operating income..................................
Non-operating expense, net ..................
Income taxes .........................................
Minority interest ...................................
Equity participation in income of related
companies, net ..................................
Amortization of negative goodwill .......
1,233,089,021
(478,846,719)
(111,357,579)
(315,537,708)
(138,978,651)
139,879,647
313,755
—
1,094,110,370
(338,967,072)
(111,043,824)
(315,537,708)
97,496,073
2,943,026
(8,120,867)
(8,434,554)
1,191,606,443
(336,024,046)
(119,164,691)
(323,972,262)
—
7,108,225
5,893,474
(7,108,225)
5,893,474
—
5,228,527
—
11,122,001
—
Net income............................................
334,455,240
—
334,455,240
89,112,205
423,567,445
Chilean
GAAP
ThCh$
Income taxes .........................................
companies, net ..................................
1,368,756,954
(610,042,469)
(275,677,558)
(282,710,421)
Net income............................................
U.S. GAAP
Reclassification
ThCh$
2007
Sub-total
ThCh$
U.S. GAAP
Adjustments
ThCh$
U.S. GAAP
ThCh$
(203,007,629)
267,457,820
—
—
1,165,749,325
(342,584,649)
(275,677,558)
(282,710,421)
(58,011,286)
(15,272,173)
2,976,078
67,624,120
1,107,738,039
(357,856,822)
(272,701,480)
(215,086,301)
—
4,815,404
(59,634,787)
(4,815,404)
(59,634,787)
—
2,331,768
—
(57,303,019)
—
205,141,910
—
205,141,910
(351,493)
204,790,417
Chilean
GAAP
ThCh$
Income taxes .........................................
companies, net ..................................
1,978,797,458
(266,128,211)
(450,974,535)
(697,031,109)
Net income............................................
U.S. GAAP
Reclassification
ThCh$
2008
Sub-total
ThCh$
U.S. GAAP
Adjustments
ThCh$
(7,614,276)
(4,285)
37,105,459
4,407,041
U.S. GAAP
ThCh$
(80,263,913)
88,854,275
—
—
1,898,533,545
(177,273,936)
(450,974,535)
(697,031,109)
1,890,919,269
(177,278,221)
(413,869,076)
(692,624,068)
6,219,498
(2,370,864)
(6,219,498)
(2,370,864)
—
14,649,030
—
12,278,166
—
570,883,101
—
570,883,101
48,542,969
619,426,070
Certain reclassifications and adjustments would be made to the Chilean GAAP balance sheet in order to present Chilean GAAP
amounts in accordance with U.S. GAAP. Deferred taxes from depreciation differences that are recorded as short-term under Chilean
GAAP would be recorded as long-term under U.S. GAAP. Additionally, the regulated asset recorded during 2001 by Coelce and
Ampla, Brazilian subsidiaries, has been partially recorded in trade receivables and an additional component was recorded in current
assets by Coelce under Chilean GAAP. However, under U.S. GAAP the presentation of these regulated assets should be classified as
non-current assets as the recovery of these assets is not expected in the short term. Assets and liabilities related to financial derivatives
have been recorded in the balance sheet at their gross amounts for Chilean GAAP purposes, whereas under US GAAP unrealized
derivative gains and losses are recorded in earnings or directly to shareholders’ equity for qualifying cash flow hedges. Under U.S.
GAAP, negative goodwill is allocated to long-lived assets instead of a separate line term in the other assets. Until December 31, 2006,
investments in subsidiaries in the development stage would be consolidated under US GAAP, as opposed to being presented as equity
method investees, under Chilean GAAP (see also Note 3).
F-175
Chilean
GAAP
ThCh$
U.S. GAAP
Reclassification
ThCh$
2007
Sub-total
ThCh$
U.S. GAAP
Adjustments
ThCh$
U.S. GAAP
ThCh$
Current assets ...................................
Property, plant and equipment, net ...
Other assets.......................................
2,461,888,662
8,719,999,921
1,273,839,295
(56,870,012)
(40,722,414)
15,169,541
2,405,018,650
8,679,277,507
1,289,008,836
—
(3,050,847)
416,110,099
2,405,018,650
8,676,226,660
1,705,118,935
Total assets .......................................
12,455,727,878
(82,422,885)
12,373,304,993
413,059,252
12,786,364,245
Current liabilities ..............................
Long-term liabilities .........................
Minority interest ...............................
Shareholder’s equity.........................
1,884,254,380
4,424,093,895
2,985,784,314
3,161,595,289
(1,594,757)
(80,828,128)
—
—
1,882,659,623
4,343,265,767
2,985,784,314
3,161,595,289
55,890,767
377,063,492
(296,962,344)
277,067,337
1,938,550,390
4,720,329,259
2,688,821,970
3,438,662,626
Total liabilities and shareholders’
equity ...........................................
12,455,727,878
(82,422,885)
12,373,304,993
413,059,252
12,786,364,245
Chilean
GAAP
ThCh$
U.S. GAAP
Reclassification
ThCh$
2008
Sub-total
ThCh$
U.S. GAAP
Adjustments
ThCh$
U.S. GAAP
ThCh$
Current assets ...................................
Property, plant and equipment, net ...
Other assets.......................................
2,994,551,605
10,080,210,502
1,324,865,770
(33,792,581)
(41,530,494)
45,217,995
2,960,759,024
10,038,680,008
1,370,083,765
—
421,804
635,853,289
2,960,759,024
10,039,101,812
2,005,937,054
Total assets .......................................
14,399,627,877
(30,105,080)
14,369,522,797
636,275,093
15,005,797,890
Current liabilities ..............................
Long-term liabilities .........................
Minority interest ...............................
Shareholder’s equity.........................
2,523,784,713
4,501,484,561
3,677,145,791
3,697,212,812
(3,293,897)
(26,811,183)
—
—
2,520,490,816
4,474,673,378
3,677,145,791
3,697,212,812
132,243,320
607,974,706
(351,339,843)
247,396,910
2,652,734,136
5,082,648,084
3,325,805,948
3,944,609,722
Total liabilities and shareholders’
equity ...........................................
14,399,627,877
(30,105,080)
14,369,522,797
636,275,093
15,005,797,890
(l)
Employee Benefit Plans
Enersis S.A. and its subsidiaries sponsor various benefit plans for its current and retired employees. A description of such benefits
follows:
Severance indemnities
The provision for severance indemnities, included in the account “Accrued expenses” short and long-term is calculated in accordance
with the policy set forth in Note 2 (n), using the current salary levels of all employees covered under the severance indemnities
agreement, an assumed discount rate 6.5% for the years ended December 31, 2006, 2007 and 2008, and an estimated average service
period based on the years of services for the Company.
Benefits for Retired Personnel
Other benefits provided to certain retired personnel of Enersis include electrical service rate subsidies, additional medical insurance
and additional post-retirement benefits. Descriptions of these benefits for retired personnel are as follows:
i) Electrical rate service
This benefit is extended only to certain retired personnel of Enersis. These electric rate subsidies result in the eligible retired
employees paying a percentage of their total monthly electricity costs, with Enersis paying the difference.
F-176
ANNUAL REPORT
ii) Medical benefits
Non
Contributory
ThCh$
This benefit provides supplementary health insurance, which covers a portion of health benefits not covered under the institutional
health benefits maintained by employees of Enersis. This benefit expires at the time of death of the pensioner.
Assets and obligations
iii) Supplementary pension benefits
Eligible employees are able to receive a monthly amount designed to cover a portion of the difference between their salary at the point
of retirement and the theoretical pension that would have been received had the employee reached the legal retirement age of the
Institución de Previsión Social (Institute of Social Welfare). This benefit expires upon the death of the pensioner for the Enersis
employee, however, continues to cover the surviving-spouse in the case of employees of the subsidiary Endesa Chile.
iv) Worker’s compensation benefits
Employees that were entitled to Worker’s compensation insurance in prior years for work related injuries receive benefits from the
Company when that insurance expires. This benefit continues at the time of death of the pensioner, to cover the surviving-spouse.
The Company has recognized liabilities related to complementary pension plan benefits and other postretirement benefits as stipulated
in collective bargaining agreements. Under U.S. GAAP, post-retirement employee benefits have been accounted for in accordance
with SFAS No. 87 and SFAS No. 106, with inclusion of prior-period amounts in current year’s income as the amounts are not
considered significant to the overall financial statement presentation. The effects of accounting for post-retirement benefits under U.S.
GAAP have been presented in paragraph (ee), above. The following data represents Chile GAAP amounts presented under FAS
N°132 Revised 2003 Employers’ Disclosures about Pensions and other Postretirement Benefits, for Company’s post-retirement
benefit plans.
At December 31, 2007
Pension Benefits
Contributory
ThCh$
Other Benefits
Total
ThCh$
Total
ThCh$
Accumulated benefit obligation.................................
Plan assets at fair value..............................................
(67,589,304)
—
(343,600,015)
338,395,440
(411,189,319)
338,395,440
(67,614,173)
—
Unfunded accumulated benefit ..................................
(67,589,304)
(5,204,575)
(72,793,879)
(67,614,173)
Benefit (obligations) at January 1 ..............................
(71,296,141)
(19,690,931)
(90,987,072)
(69,484,019)
Foreign exchange effect.............................................
Net periodic expense..................................................
Benefits paid ..............................................................
Contributions .............................................................
2,636,934
(6,378,745)
7,315,139
—
(969,409)
(10,935,198)
—
11,458,598
1,667,525
(17,313,943)
7,315,139
11,458,598
2,000,823
(12,811,475)
6,890,445
2,042,196
Benefit (obligations) at December 31 ........................
(67,722,813)
(20,136,940)
(87,859,753)
(71,362,030)
Funded Status of the Plans
Projected Benefit Obligation......................................
Fair value of the plans assets .....................................
(67,722,813)
—
(358,532,380)
338,395,440
(426,255,193)
338,395,440
(71,362,030)
—
Funded Status.............................................................
(67,722,813)
(20,136,940)
(87,859,753)
(71,362,030)
Net liability recorded under U.S. GAAP ...................
(67,722,813)
(20,136,940)
(87,859,753)
(71,362,030)
Fair value of the plan assets, beginning .....................
Actual return on the plan assets .................................
Employer contributions..............................................
Plan participant contributions ....................................
Benefits paid ..............................................................
—
—
—
—
—
—
262,175,184
33,152,633
57,777,850
7,027,780
4,430,818
(26,168,825)
262,175,184
33,152,633
57,777,850
7,027,780
4,430,818
(26,168,825)
—
—
—
—
—
—
Fair value of plans assets, ending...............................
—
338,395,440
338,395,440
—
Service cost................................................................
Interest cost................................................................
Actuarial gain (loss)...................................................
(433,733)
(6,736,515)
—
791,503
(2,325,938)
(35,807,698)
57,777,850
(30,579,412)
(2,759,671)
(42,544,213)
57,777,850
(29,787,,909)
117,341
(5,123,709)
—
(7,805,107)
Net periodic expenses ................................................
(6,378,745)
(10,935,198)
(17,313,943)
(12,811,475)
Changes in benefit (obligations) ................................
Change in the plan assets
Assumptions as of December 31, 2007
Weighted - discount rate (1) ..............
Weighted - salary increase .................
Weighted - return on plan assets (1) ..
Weighted - long term inflation (2) .....
Pension Benefits
Brazil
Colombia
11.2%
6.1%
12.8%
4.7%
9.8%
4.8%
—
4.8%
(1) Includes fixed long term inflation assumption detail in (2)
F-177
F-178
Other Benefits
Brazil
Chile
6.5%
3.5%
—
3.0%
12.1%
—
—
5.0%
Colombia
9.8%
—
—
4.8%
199
200
enersis08
ANNUAL REPORT
Non
Contributory
ThCh$
Assets and obligations
At December 31, 2008
Pension Benefits
Contributory
ThCh$
Other Benefits
Total
ThCh$
Following is a schedule of estimated pay-out of pension benefits in each of the next five years:
Total
ThCh$
Accumulated benefit obligation.................................
Plan assets at fair value ..............................................
(71,467,815)
—
(295,205,963)
263,658,877
(366,673,778)
263,658,877
(67,544,069)
—
Unfunded accumulated benefit ..................................
(71,467,815)
(31,547,086)
(103,014,901)
(67,544,069)
Benefit (obligations) at January 1 ..............................
(67,722,813)
(20,136,940)
(87,859,753)
(71,362,030)
Net periodic expense..................................................
Benefits paid ..............................................................
Contributions .............................................................
(3,807,638)
(8,396,521)
8,359,388
—
8,122,730
(32,460,137)
—
11,262,469
4,315,092
(40,856,658)
8,359,388
11,262,469
3,451,838
(14,039,207)
7,035,043
1,903,086
Benefit (obligations) at December 31 ........................
(71,567,584)
(33,445,675)
(105,013,259)
(73,011,270)
Changes in benefit (obligations)
Funded Status of the Plans
Projected Benefit Obligation......................................
Fair value of the plans assets .....................................
(71,567,584)
—
(296,870,755)
263,658,877
(368,438,339)
263,658,877
(73,011,270)
—
Funded Status.............................................................
(71,567,584)
(33,211,878)
(104,779,462)
(73,011,270)
Net liability recorded under U.S. GAAP ...................
(71,567,584)
(33,211,878)
(104,779,462)
(73,011,270)
2009 ................................................................
2010 ................................................................
2011 ................................................................
2012 ................................................................
2013 ................................................................
Thereafter........................................................
Total................................................................
As of December 31,
2008
ThCh$
4,878,117
37,245,214
35,546,923
33,692,893
32,456,721
98,083,445
241,903,313
The following data present some supplementary information regarding Enersis’s pension plans in Brazil:
Defined benefit pension plan assets allocations at December 31, 2007 and 2008, by assets category are as follows:
Asset Category
Equity securities .................................
Debt securities ....................................
Real estate...........................................
Other...................................................
2007
Plan asset
25.84%
67.55%
5.76%
0.86%
Change in the plan assets
Fair value of the plan assets, beginning .....................
Employer contributions..............................................
Plan participant contributions ....................................
Benefits paid ..............................................................
—
—
—
—
—
—
338,395,440
(58,336,722)
(12,322,422)
10,644,537
617,932
(15,339,888)
338,395,440
(58,336,722)
(12,322,422)
10,644,537
617,932
(15,339,888)
—
—
—
—
—
—
Fair value of plans assets, ending...............................
—
263,658,877
263,658,877
—
Service cost................................................................
Interest cost................................................................
Actuarial gain (loss)...................................................
(383,642)
(6,611,581)
—
(1,401,298)
(2,524,006)
(34,540,519)
(12,322,422)
16,926,810
(2,907,648)
(41,152,100)
(12,322,422)
15,525,512
(1,018,460)
(5,933,779)
—
(7,086,968)
Net periodic expenses ................................................
(8,396,521)
(32,627,993)
(41,024,514)
(14,039,207)
Assumptions as of December 31, 2008
Weighted - discount rate (1) ..............
Weighted - salary increase .................
Weighted - return on plan assets (1) ..
Weighted - long term inflation (2) .....
Pension Benefits
Brazil
Colombia
11.7%
7.3%
12.5%
4.7%
10.2%
5.2%
—
5.2%
Other Benefits
Brazil
Chile
6.5%
3.5%
—
3.0%
12.1%
—
—
5.0%
Colombia
10.2%
—
—
5.2%
(1) Includes fixed long term inflation assumption detail in (2)
F-179
F-180
2008
Plan asset
13.28%
77.11%
5.83%
3.77%
ANNUAL REPORT
(m) Comprehensive income (loss)
In accordance with U.S. GAAP, the Company reports a measure of all changes in shareholders’ equity that result from transactions
and other economic events of the period other than transactions with owners (“comprehensive income”). Comprehensive income is the
total of net income and other non-owner equity transactions that result in changes in net shareholders’ equity.
The following represents accumulated other comprehensive income balances as of December 31, 2006, 2007 and 2008 (in thousands
of constant Chilean pesos as of December 31, 2007).
Chilean GAAP
cumulative
translation
adjustment
ThCh$
Effect of U.S. GAAP
adjustments on cumulative
translation adjustment
ThCh$
Beginning balance...................
Credit (charge) for the period..
(271,485,374)
18,456,903
86,708,526
(3,899,766)
Ending balance........................
(253,028,471)
82,808,760
Chilean GAAP
cumulative
translation
adjustment
ThCh$
Effect of U.S. GAAP
ThCh$
2006
Application
of SFAS 158 in
Ampla and Coelce
see Note 36 I g
ThCh$
Fair value
of financial
instruments used
in cash flow hedge
ThCh$
Accumulated other
comprehensive
income (loss)
ThCh$
Goodwill by Country
January 1,
ThCh$
2007
Translation
adjustment
ThCh$
Acquisitions
(Disposals)
ThCh$
Impairment
(i)
ThCh$
December 31,
ThCh$
(183,235,921)
(25,621,041)
Chile............................
Colombia.....................
Peru.............................
1,362,869,882
37,808,968
22,195,351
—
—
—
—
(4,952,256)
(2,906,894)
(104,928)
—
—
1,362,764,954
32,856,712
19,288,457
12,156,208
(50,793,459)
(208,856,962)
Total............................
1,422,874,201
—
(7,859,150)
(104,928)
1,414,910,123
Fair value
of financial
instruments used
in cash flow hedge
ThCh$
Accumulated other
comprehensive
income (loss)
ThCh$
(253,028,471)
(133,746,994)
82,808,760
5,006,198
12,156,208
(524,630)
(50,793,459)
2,164,347
(208,856,962)
(127,101,079)
Ending balance........................
(386,775,465)
87,814,958
11,631,578
(48,629,112)
(335,958,041)
Effect of U.S. GAAP
ThCh$
A summary of the changes in the Company’s goodwill under U.S. GAAP during the year ended December 31, 2007 and 2008, by
country of operation and segment is as follows:
1,540,927
(52,334,386)
Chilean GAAP
cumulative
translation
adjustment
ThCh$
In calculating the impairment charge, the fair values of the impaired reporting units’ goodwill underlying the segments were estimated
using discounted cash flow methodology. The ThCh$761,320,894goodwill impairment is associated entirely with goodwill associated
with investments in Argentina and Brazil. The impairment reflects the decline in the Company’s revenues and forecasted cash flows in
their Argentina and Brazilian subsidiaries and the increase in inflation and interest rates and decreasing expectations of the currencies
in Argentina and Brazil. Prior to performing the review for impairment, SFAS 142 required that all goodwill deemed to be related to
the entity as a whole be assigned to all of the Company’s reporting units, including the reporting units of the acquirer.
—
12,156,208
2007
Application
of SFAS 158 in
Ampla and Coelce
see Note 36 I g
ThCh$
2008
Application
of SFAS 158 in
Ampla and Coelce
see Note 36 I g
ThCh$
Fair value
of financial
instruments used
in cash flow hedge
ThCh$
Accumulated other
comprehensive
income (loss)
ThCh$
(386,775,465)
134,668,311
87,814,958
(46,634,501)
11,631,578
(12,356,132)
(48,629,112)
50,456,128
(335,958,041)
126,133,806
Ending balance........................
(252,107,154)
41,180,458
(724,554)
1,827,016
(209,824,234)
Goodwill by Segment
January 1,
ThCh$
2007
Translation
adjustment
ThCh$
Acquisitions
(Disposals)
ThCh$
Impairment
(i)
ThCh$
December 31,
ThCh$
Generation...................
Distribution .................
Other ...........................
1,242,537,678
180,256,310
80,213
—
—
—
(4,890,808)
(2,968,342)
—
(104,928)
—
—
1,237,541,942
177,287,968
80,213
Total............................
1,422,874,201
—
(7,859,150)
(104,928)
1,414,910,123
Goodwill by Country
January 1,
ThCh$
2008
Translation
adjustment
ThCh$
Acquisitions
(Disposals)
ThCh$
Impairment
ThCh$
December 31,
ThCh$
Chile............................
Colombia.....................
Peru.............................
1,362,764,954
32,856,713
19,288,457
—
—
—
—
5,788,914
3,398,364
—
—
—
1,362,764,954
38,645,627
22,686,821
Total............................
1,414,910,124
—
9,187,278
—
1,424,097,402
2008
Translation
adjustment
ThCh$
Acquisitions
(Disposals)
ThCh$
The Company does not recognize deferred tax assets associated with cumulative translation reclassification as the investment they are
associated with is permanent in nature.
Goodwill by Segment
(n) Goodwill and intangible assets
Generation...................
Distribution .................
Other ...........................
1,237,541,942
177,287,968
80,214
—
—
—
5,717,791
3,469,487
—
—
—
—
1,243,259,733
180,757,455
80,214
Total............................
1,414,910,124
—
9,187,278
—
1,424,097,402
As discussed in Note 37 paragraph (i), Enersis S.A. adopted SFAS 142, which requires companies to stop amortizing goodwill and
certain intangible assets with an indefinite useful life. Instead, SFAS 142 requires that goodwill and intangible assets deemed to have
an indefinite useful life be reviewed for impairment upon adoption of SFAS 142, effective January 1, 2002 and annually thereafter.
Under SFAS 142, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value.
The Company’s reporting units are at the operating subsidiary level. This methodology differs from Enersis’s previous policy, as
provided under accounting standards existing at that time of using undiscounted cash flows on an enterprise-wide basis to determine if
goodwill was recoverable. Subsequent to adoption in 2002 of SFAS No. 142, due to changes in circumstances, the Company
recognized a non-cash charge of ThCh$761,320,894, to reduce the carrying value of goodwill.
F-181
201
(i)
January 1,
ThCh$
Impairment
ThCh$
December 31,
ThCh$
See Note 11 a) (7)
To perform goodwill impairment tests, the Company determines the fair value of its reporting units based on a valuation model which
draws on medium-term planning data that the Company uses for internal reporting and planning purposes. The model uses the
discounted cash flow approach and market comparables. The fair value of each reporting unit exceeded its carrying amount as of
December 31, 2007 and 2008, except for the impairment recorded in 2007 over its equity method investee Gas Atacama Holding (See
Note 11 (j)).
F-182
202
enersis08
ANNUAL REPORT
The Company’s intangible assets were ThCh$103,810,481 and ThCh$132,028,655 and related accumulated amortization were
ThCh$65,244,146 and ThCh$87,690,142 as of December 31, 2007 and 2008, respectively. There is no difference between Chilean
and U.S. GAAP in the amortization of intangible assets because all of the Company’s intangible assets are subject to amortization,
since they relate to finite contracts or concessions.
Future payments under capital leases are summarized as follows:
The estimated amortization expense for the intangible assets with definite lives, which now mainly consist of rights of way for US
GAAP purposes (which is equivalent under Chile GAAP) for each of the five succeeding fiscal years is as follows:
2009 .................................................................................
2010 .................................................................................
2011 .................................................................................
2012 .................................................................................
2013 and thereafter ..........................................................
11,688,665
17,925,030
15,754,475
31,923,069
65,861,997
Total.................................................................................
143,153,236
Year
2009 .............................................................................
2010 .............................................................................
2011 .............................................................................
2012 .............................................................................
2013 .............................................................................
Amortization
ThCh$
(9,963,318)
(7,537,327)
(5,235,412)
(1,892,460)
(19,709,997)
Year ended
December 31, 2008
ThCh$
(q) Available for sale securities
Under US GAAP, the company classifies certain marketable securities as available for sale securities
(o) Asset retirement obligations
As discussed in Note 37 paragraph (aa), the Company adopted SFAS No. 143 effective January 1, 2003. The following table describes
all changes to the Company’s U.S. GAAP asset retirement obligation during the year ended December 31, 2007 and 2008:
Realized gains and losses are determined using the proceeds from sales less the cost of the investment identified to be sold. Gross
gains and losses realized on the sale of available for-sale securities for the years ended December 31, 2006 and 2007 are as follows:
As of December 31,
2007
2008
ThCh$
ThCh$
Balance as of January 1,.................................................................................
Cumulative Translation Adjustment ..............................................................
Liabilities incurred in the period....................................................................
Accretion expense..........................................................................................
(2,501,885)
208,626
(499,520)
(21,659)
(2,814,438)
(344,791)
—
(101,121)
Balance as of December 31,...........................................................................
(2,814,438)
(3,260,350)
Cost
ThCh$
Securities available for sale at December 31, 2006 ................
Fair
value
ThCh$
—
—
—
10,549,407
11,215,653
—
10,549,407
11,215,653
—
Information on sales of available for sale securities during the three years in the period ended December 31, 2006, 2007 and 2008 is as
follows:
2006
ThCh$
(p) Capital lease obligations
Minimum lease obligations for capital lease are presented net of interest expense, and as of December 31, are summarized as follows:
Gross
unrealized
gains
ThCh$
Proceeds from sales ................................................................
6,341,493
2007
ThCh$
2008
ThCh$
10,549,407
11,215,653
As of December 2006, 2007 and 2008, the Company has no securities that are considered to be trading securities. The cost of available
for sale securities is determined using the average cost method.
Short-term:
Lease obligations ...........................................................................................
Less: interest expense ....................................................................................
2007
2008
ThCh$
ThCh$
12,379,761
(4,502,525)
11,688,665
(4,249,231)
(r) Recent accounting pronouncements
Net short-term lease obligations ....................................................................
7,877,236
7,439,434
Long-term:
Lease obligations ...........................................................................................
Less: interest expense ....................................................................................
81,388,906
(18,664,074)
131,464,571
(26,896,160)
Net long-term lease obligations .....................................................................
Weighted-average interest rate.......................................................................
62,724,832
7.18%
104,568,411
6.21%
F-183
FASB Statement No. 141 (Revised 2007), ‘Business combinations’ (“SFAS 141R”). SFAS 141R provides additional guidance on
improving the relevance, representational faithfulness, and comparability of the financial information that a reporting entity provides
in its financial reports about a business combination and its effects. This Statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.
The impact of implementing this new pronouncement on the Company’s financial statements is currently unknown.
FASB Statement No. 160, ‘Non-controlling interests in consolidated financial statements - an amendment of ARB No. 51’ (“SFAS
160”). SFAS 160 amends ARB No. 51 to establish accounting and reporting standards for the non-controlling
F-184
Rule 5-04 of the Securities and Exchange Commission requires presentation of condensed financial statements of the registrant (parent
company) when restricted net assets, defined as assets not to be transferred to the parent company in the form of loans, advances or
cash dividends of the subsidiary without the consent of a third party.
ANNUAL
REPORT
Following are the parent company Chilean GAAP balance sheets as of December 31, 2007 and 2008 and results
of operations
and
203
CONSOLIDATED
STATEMENTS
cash flows for the years ended December 31, 2006, 2007 and 2008. Note that there
are no differencesFINANCIAL
in shareholders’
equity and net
income under Chilean GAAP between the parent company and the consolidated company in any of the presented periods.
interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement is effective for fiscal years and interim periods
within those fiscal years, beginning on or after December 15, 2008. The impact of implementing this new pronouncement on the
Company’s financial statements is currently unknown.
FASB Staff Position FAS 141(R)-1, ‘Accounting for assets acquired and liabilities assumed in a business combination that arise from
contingencies’ (“FSP FAS 141(R)-1”). FSP FAS 141(R)-1 amends and clarifies SFAS 141R to address application issues raised by
preparers, auditors, and members of the legal profession on initial recognition and measurement, subsequent measurement and
accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. Under the new guidance,
assets acquired and liabilities assumed in a business combination that arise from contingencies should be recognized at fair value on
the acquisition date if fair value can be determined during the measurement period. If fair value cannot be determined, companies
should typically account for the acquired contingencies using existing guidance. This FSP is effective for assets or liabilities arising
from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The impact of implementing this new pronouncement on the Company’s financial
statements is currently unknown.
FASB Staff Position FAS 152-2 and FAS 124-2, ‘Recognition and presentation of other-than-temporary impairments’ (“FSP FAS
152-2 and FAS 124-2”). FSP FAS 152-2 and FAS 124-2 clarifies that in periods in which an entity determines that a security’s decline
in fair value below its amortized cost basis as other than temporary, the entity shall present the total other-than-temporary impairment
in the income statement with an offset for the amount of the total other-than-temporary impairment that is recognized in other
comprehensive income, if any. This FSP is effective for interim and annual reporting periods ending after June 15, 2009. The impact
of implementing this new pronouncement on the Company’s financial statements is currently unknown.
FASB Staff Position FAS 157-2, ‘Effective date of FASB Statement No. 157’ (“FSP FAS 157-2”). FSP FAS 157-2 delays the
effective date of FASB Statement No. 157, Fair Value Measurements (“SFAS 157”) for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).
This FSP partially defers the effective date of SFAS 157 to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years for items within the scope of this FSP. The impact of implementing this new pronouncement on the
Company’s financial statements is currently unknown.
FASB Staff Position FAS 157-4, ‘Determining fair value when the volume and level of activity for the asset or liability have
significantly decreased and identifying transactions that are not orderly’ (“FSP FAS 157-4”). FSP FAS 157-4 provides additional
guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have
significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This
FSP is effective for interim and annual reporting periods ending after June 15, 2009 and is applied prospectively. The impact of
implementing this new pronouncement on the Company’s financial statements is currently unknown.
As discussed on Note 36, Enersis S.A. has adopted IFRS as its accounting standards beginning on January 1, 2009. The Company
expects that its next Annual Report on Form 20-F, for the fiscal year ended December 31, 2009, will be filed using IFRS as the
accounting principles used in preparing its financial statements.
SCHEDULE I
Rule 5-04 of the Securities and Exchange Commission requires presentation of condensed financial statements of the registrant (parent
company) when restricted net assets, defined as assets not to be transferred to the parent company in the form of loans, advances or
cash dividends of the subsidiary without the consent of a third party.
Following are the parent company Chilean GAAP balance sheets as of December 31, 2007 and 2008 and results of operations and
cash flows for the years ended December 31, 2006, 2007 and 2008. Note that there are no differences in shareholders’ equity and net
income under Chilean GAAP between the parent company and the consolidated company in any of the presented periods.
ENERSIS S.A.
BALANCE SHEETS
Chilean pesos as of December 31, 2008 and thousands of US dollars)
2007
ASSETS
F-185
CURRENT ASSETS:
Cash ......................................................................................................
Time deposits........................................................................................
195,303
14,475,077
As of December 31,
2008
ThCh$
18,413,130
37,626,269
ENERSIS S.A.
BALANCE SHEETS
2007
ASSETS
28,931
59,119
2008
ThUS$
CURRENT ASSETS:
Cash ......................................................................................................
Time deposits........................................................................................
Notes receivable, net.............................................................................
Other accounts receivable, net ..............................................................
Amounts due from related companies...................................................
Income taxes recoverable......................................................................
Prepaid expenses...................................................................................
Deferred income taxes ..........................................................................
Other current assets...............................................................................
195,303
14,475,077
—
1,797,206
204,971,858
13,302,323
7,004
20,943,180
79,541,586
18,413,130
37,626,269
—
1,457,865
10,214,017
17,334,174
75,433
8,168,576
62,282,303
28,931
59,119
—
2,291
16,048
27,236
119
12,834
97,859
Total current assets ...............................................................................
335,233,537
155,571,767
244,437
PROPERTY, PLANT AND EQUIPMENT:
Buildings and infrastructure..................................................................
Machinery and equipment.....................................................................
Other assets...........................................................................................
Technical appraisal ...............................................................................
26,378,649
3,603,558
938,326
41,957
26,378,458
3,644,065
717,885
41,903
41,446
5,726
1,128
66
Sub - total..............................................................................................
30,962,489
30,782,311
48,366
Less: accumulated depreciation ............................................................
(18,918,642)
(20,096,399)
(31,576)
Total property, plant and equipment, net ..............................................
12,043,847
10,685,912
16,790
OTHER ASSETS:
Investments in related companies .........................................................
Investment in other companies .............................................................
Goodwill, net ........................................................................................
Negative goodwill, net..........................................................................
mounts due from related companies .....................................................
Deferred income taxes long-term..........................................................
Intangibles.............................................................................................
Accumulated amortization ....................................................................
Other assets...........................................................................................
2,679,366,514
12,611,945
681,473,767
(425,165)
356,860,601
23,148,758
1,823,387
(902,541)
64,577,561
3,285,141,637
15,770,517
618,796,082
(437,884)
320,464,689
—
1,823,387
(993,883)
4,931,396
5,161,665
24,779
972,262
(688)
503,519
—
2,865
(1,562)
7,748
Total other assets ..................................................................................
3,818,534,827
4,245,495,941
6,670,588
TOTAL ASSETS..................................................................................
4,165,812,211
4,411,753,620
6,931,815
F-186
2008
ThUS$
As of December 31,
2008
ThCh$
204
enersis08
ANNUAL REPORT
SCHEDULE I
SCHEDULE I
ENERSIS S.A.
BALANCE SHEETS
ENERSIS S.A.
INCOME STATEMENT
LIABILITIES AND SHAREHOLDERS’ EQUITY
2007
ThCh$
As of December 31,
2008
ThCh$
2006
ThCh$
2007
2008
ThCh$
ThCh$
OPERATING INCOME:
SALES ..........................................................................
COST OF SALES.........................................................
5,492,782
(1,544,655)
5,456,592
(1,634,571)
5,447,414
(1,714,126)
8,559
(2,693)
GROSS PROFIT...........................................................
3,948,127
3,822,021
3,733,288
5,866
ADMINISTRATIVE AND SELLING EXPENSES.....
(19,710,806)
(21,870,852)
(23,476,673)
(36,887)
OPERATING LOSS .....................................................
(15,762,679)
(18,048,831)
(19,743,385)
(31,021)
NON-OPERATING INCOME AND EXPENSES:
Interest income..............................................................
Equity in income of related companies.........................
Other non-operating income .........................................
Equity in losses of related companies ...........................
Amortization of goodwill..............................................
Interest expense.............................................................
Other non-operating expenses.......................................
Price-level restatements, net .........................................
Exchange difference, net...............................................
31,007,644
465,245,713
7,695,665
(11,308,418)
(63,584,720)
(57,630,857)
(3,507,751)
(883,731)
(5,188,455)
39,177,200
317,020,474
13,591,921
(10,660)
(63,504,580)
(59,450,542)
(956,171)
(6,895,058)
(21,291,132)
35,875,802
652,727,068
8,140,013
(7,233,061)
(63,598,254)
(55,174,610)
(11,734,274)
(10,945,606)
61,868,900
56,369
1,025,575
12,790
(11,365)
(99,927)
(86,691)
(18,437)
(17,198)
97,209
NON-OPERATING RESULT......................................
361,845,090
217,681,452
609,925,978
958,325
INCOME BEFORE INCOME TAXES AND
AMORTIZATION OF NEGATIVE GOODWILL ..
346,082,411
199,632,621
590,182,593
927,304
INCOME TAX .............................................................
(11,674,067)
5,465,965
(19,346,993)
(30,398)
INCOME BEFORE AMORTIZATION OF
NEGATIVE GOODWILL........................................
334,408,344
205,098,586
570,835,600
896,906
AMORTIZATION OF NEGATIVE GOODWILL ......
46,896
43,324
47,501
74
NET INCOME FOR THE YEAR.................................
334,455,240
205,141,910
570,883,101
896,980
2008
ThUS$
Obligations with benches and short-term financial institutions ...................
Current portion of long-term debt due to banks and financial institutions...
Current portion of bonds payable.................................................................
Dividends payable........................................................................................
Accounts payable.........................................................................................
Miscellaneous payables ...............................................................................
Amounts payable to related companies........................................................
Accrued expenses ........................................................................................
Withholdings................................................................................................
Income tax ...................................................................................................
Other current liabilities ................................................................................
—
915,418
9,326,592
421,964
223,558
379,238
176,680,300
5,489,198
344,543
132,058
2,341,594
34,136,613
95,694,484
10,597,279
387,478
252,397
471,578
13,342,680
7,139,463
6,041,425
392,418
1,952,557
53,636
150,356
16,650
609
397
741
20,964
11,218
9,492
617
3,068
Total current liabilities.................................................................................
196,254,463
170,408,372
267,748
LONG -TERM LIABILITIES:
Due to banks and financial institutions ........................................................
Bonds payable..............................................................................................
Amounts payable to related companies........................................................
Miscellaneous payables ...............................................................................
Accrued expenses ........................................................................................
Deferred income taxes .................................................................................
Other long-term liabilities............................................................................
189,389,624
362,156,896
—
—
33,756,690
—
222,659,249
—
417,553,588
—
25
18,015,514
1,101,865
107,461,444
—
656,067
—
—
28,306
1731
168,845
Total long-term liabilities ............................................................................
807,962,459
544,132,436
854,949
SHAREHOLDERS’ EQUITY:
Paid-in capital, no par value shares..............................................................
Additional paid-in capital ............................................................................
Other reserves ..............................................................................................
Retained earnings.........................................................................................
Net income for the year................................................................................
Provisional dividends...................................................................................
2,824,882,834
201,314,070
(474,250,155)
423,601,980
205,141,910
(19,095,350)
2,824,882,834
201,314,070
(339,568,470)
490,313,366
570,883,101
(50,612,089)
4,438,499
316,308
(533,535)
770,388
896,980
(79,522)
Total shareholders’ equity............................................................................
3,161,595,289
3,697,212,812
5,809,118
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY......................
4,165,812,211
4,411,753,620
6,931,815
2008
ThUS$
SCHEDULE I
ENERSIS S.A.
STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES :
2006
ThCh$
2007
ThCh$
As of December 31,
2008
ThCh$
2008
ThUS$
Net income for the year..........................................................................................
334,455,240
205,141,910
570,883,101
896,980
Depreciation ...........................................................................................................
Amortization of intangibles ...................................................................................
Equity in income of related companies..................................................................
Equity in losses of related companies....................................................................
Amortization of goodwill.......................................................................................
Amortization of negative goodwill ........................................................................
Price-level restatement, net....................................................................................
Exchange difference, net........................................................................................
Other credits to income which do not represent cash flows ..................................
Other charges to income which do not represent cash flows.................................
1,485,987
91,341
(465,245,713)
11,308,418
63,584,720
(46,897)
883,731
5,188,454
(146,971)
3,281,109
1,575,335
91,341
(317,020,474)
10,660
63,504,580
(43,324)
6,895,058
21,291,132
(5,512,124)
1,041,330
1,649,119
91,341
(652,727,068)
7,233,061
63,598,254
(47,501)
10,945,606
(61,868,900)
—
6,178,973
2,591
144
(1,025,575)
11,365
99,927
(75)
17,198
(97,209)
—
9,708
Changes in assets which affect cash flows:
Decrease in dividends receipts...............................................................................
Decrease in other assets .........................................................................................
—
135,378,053
—
181,486,847
—
266,017,692
—
417,971
Changes in liabilities which affect cash flows:
Increase (decrease) in accounts payable associated with operating results...........
Increase in interest payable....................................................................................
Decrease in income tax payable.............................................................................
Increase in other accounts payable associated with non-operating results............
Net decrease in value added tax and other similar taxes payable..........................
(14,620,485)
7,117,800
13,111,378
(23,174,810)
49,786
(6,420,961)
(33,600,712)
27,206,542
(6,769,333)
3,124,478
(10,089)
(52,794)
42,747
(10,636)
4,909
Net cash flows provided by operating activities....................................................
72,701,141
162,040,376
195,493,692
307,162
Loans obtained .......................................................................................................
Other loans obtained from related companies .......................................................
Loans obtained from related companies ................................................................
Other sources of financing .....................................................................................
Dividends paid by related company.......................................................................
Dividends paid .......................................................................................................
Payment of loans....................................................................................................
Payment of bonds...................................................................................................
Payment of loans granted by related companies....................................................
Payment of other loans obtained from related companies.....................................
Other disbursements for financing.........................................................................
191,633,915
39,165,103
10,904,034
—
—
(81,370,214)
(50,158,544)
(186,645,709)
(13,660,876)
—
—
21,684,768
44,975,163
—
—
—
(202,963,255)
—
(1,675,031)
—
—
—
34,081,000
1,599,712
—
1,783,600
—
(154,048,173)
(108,122,594)
(1,626,176)
—
(144,733,306)
—
53,549
2,513
—
2,802
—
(242,043)
(169,884)
(2,555)
—
(227,407)
—
Net cash used in financing activities......................................................................
(90,132,291)
(137,978,355)
(371,065,937)
(583,025)
Sales of property, plant and equipment .................................................................
Other receipts from investment..............................................................................
Proceeds from loans granted to related companies................................................
Long-term investments ..........................................................................................
Loans granted to relates companies .......................................................................
Other loans to related companies...........................................................................
Sales of other investment .......................................................................................
Additions to property, plant and equipment ..........................................................
Other disbursement for investments ......................................................................
219,277
28,103,602
26,773,256
(14,179,720)
(240,392)
(7,197,447)
—
(211,889)
(587,616)
—
3,159,947
73,434,627
(284,048)
—
(24,298,228)
—
(614,594)
(24,359,230)
—
31,849,336
196,458,862
—
5,242,995
—
—
(268,993)
(11,201)
—
50,042
308,679
—
8,238
—
—
(422)
(18)
Net cash provided by investing activities ..............................................................
32,679,070
27,038,474
233,270,999
366,519
51,100,495
57,698,754
90,656
(6,734,597)
(10,582)
NET CASH FLOW FOR THE YEAR ..................................................................
15,247,921
EFECT OF PRICE-LEVEL RESTATEMENT ON CASH AND CASH
EQUIVALENTS ..............................................................................................
28,542
(2,736,571)
12,994,359
(2,735,302)
(5,038,988)
1,094,607
(957,545)
NET INCREASE IN CASH AND CASH EQUIVALENTS ................................
15,276,463
50,142,950
50,964,157
80,074
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR ..........
141,651
15,418,113
65,561,063
103,012
CASH AND CASH EQUIVALENTS AT END OF THE YEAR ........................
15,418,113
65,561,063
116,525,220
183,086
F-189
ANNUAL REPORT
205
206
enersis08
ANNUAL REPORT
SCHEDULE I
ENERSIS S.A.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in thousands of historical Chilean pesos, except as stated)
Paid-in
capital
ThCh$
Additional
paid-in
capital
ThCh$
Other
reserves
ThCh$
Retained
earnings
ThCh$
Deficit of
subsidiaries in
development stage
ThCh$
Interim
dividends
ThCh$
Net income
for the year
ThCh$
Total
ThCh$
As of January 1, 2006 .............................................................
Transfer of prior year income to retained earnings ................
Investment equity variations...................................................
Accumulated deficit of subsidiaries in development stage ....
Final dividend N° 73 ..............................................................
Cumulative translation adjustment .........................................
Reserve Technical Bulletin No. 72.........................................
Price-level restatement ...........................................................
Interim dividend .....................................................................
Net income for the year ..........................................................
2,365,606,672
—
—
—
—
—
—
49,677,740
—
—
168,583,950
—
—
—
—
—
—
3,540,263
—
—
(236,727,351)
—
(10,585,093)
—
—
14,766,794
(825,381)
(4,971,274)
—
—
230,391,292
68,016,865
—
—
(32,651,166)
—
—
5,522,778
—
—
—
—
—
(181,751)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(36,242,795)
—
68,016,865
(68,016,865)
—
—
—
—
—
—
—
285,960,366
2,595,871,428
—
(10,585,093)
(181,751)
(32,651,166)
14,766,794
(825,381)
53,769,507
(36,242,795)
285,960,366
As of December 31, 2006 .......................................................
2,415,284,412
172,124,213
(238,342,305)
271,279,769
(181,751)
(36,242,795)
285,960,366
2,869,881,909
As of December 31, 2006 (1) .................................................
2,824,882,834
201,314,070
(278,761,824)
317,285,020
(212,574)
(42,389,065)
334,455,240
3,356,573,701
As of January 1, 2007 .............................................................
Final dividend N° 75 ..............................................................
2,415,284,412
—
—
—
—
—
178,731,046
—
—
172,124,213
—
—
—
—
—
12,737,192
—
—
(238,342,305)
—
(7,702,898)
—
(56,695,443)
(115,113,442)
(17,637,331)
—
—
271,279,769
249,535,820
—
(159,675,172)
—
—
27,842,117
—
—
(181,751)
181,751
—
—
—
—
—
—
—
(36,242,795)
36,242,795
—
—
—
—
(190,784)
(17,343,973)
—
285,960,366
(285,960,366)
—
—
—
—
—
—
188,376,410
2,869,881,909
—
(7,702,898)
(159,675,172)
(56,695,443)
(115,113,442)
201,482,240
(17,343,973)
188,376,410
As of December 31, 2007 .......................................................
2,594,015,458
184,861,405
(435,491,419)
388,982,534
—
(17,534,757)
188,376,410
2,903,209,631
As of December 31, 2007 (1) .................................................
2,824,882,834
201,314,070
(474,250,155)
423,601,980
—
(19,095,350)
205,141,910
3,161,595,289
As of January 1, 2008 .............................................................
Final dividend N° 77 ..............................................................
2,594,015,458
—
—
—
—
—
230,867,376
—
—
184,861,405
—
—
—
—
—
16,452,665
—
—
(435,491,419)
—
11,489,022
—
13,374
123,179,289
(38,758,736)
—
—
388,982,534
170,841,653
—
(111,424,065)
—
—
41,913,244
—
—
—
—
—
—
—
—
—
—
—
(17,534,757)
17,534,757
—
—
—
—
(351,822)
(50,260,267)
—
188,376,410
(188,376,410)
—
—
—
—
—
—
570,883,101
2,903,209,631
—
11,489,022
(111,424,065)
13,374
123,179,289
250,122,727
(50,260,267)
570,883,101
As of December 31, 2008 .......................................................
2,824,882,834
201,314,070
(339,568,470)
490,313,366
—
(50,612,089)
570,883,101
3,697,212,812
As of December 31, 2008 (2) .................................................
4,438,499
316,308
(533,535)
770,388
—
(79,522)
896,980
5,809,117
(1) Restated in thousands of constant Chilean pesos as of December 31, 2008.
(2) Expressed in thousands of US$as of December 31, 2008
F-190
ANNUAL REPORT
The following table presents the dividends received by Enersis individual in the years ended December 31, 2006, 2007 and 2008:
2006
ThCh$
Dividends received ..........................
149,128,178
2007
ThCh$
204,886,686
2008
ThCh$
195,555,835
The Company has subsidiaries that must abide by certain financial ratios and covenants that require minimum equity levels or that
contain other characteristics that restrict the transfer of assets to the parent company. The amounts of Enersis´s proportionate share of
restricted net assets in consolidated subsidiaries as of December 31, 2008 is ThCh$ 1,571,456,602.
******
207
208
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ANNUAL REPORT
MANAGEMENT’S ANALYSIS OF THE CONSOLIDATED FINANCIAL STATEMENTS
GENERATION AND TRANSMISSION BUSINESS
ECONOMIC-FINANCIAL SUMMARY
• Operating Revenues increased 32.8%, equivalent to Ch$ Ch$708,580 million.
As of December 31st, 2008, Net Income of the company amounted to Ch$570,883 million, which represents an
increase of 178.3% or Ch$365,741 million with respect of the same period last year. The most relevant issues for the
year 2008, compared with December 2007, may be summarized as follows:
• The higher operating income is mainly explained by the performance of the operations in Colombia, Peru and
Chile.
• Consolidated physical sales increased by 0.4%, amounting 62,828 GWh.
FINANCIALS
• Operating Revenues increased 35.3% or Ch$1,734,666 million amounting Ch$6,650,287 million.
• Operating Income increased 44.6% or Ch$610,040 million amounting Ch$1,978,797 million, basically related
to the good performance in both lines of business, as follows:
- Generation & Transmission
47.6%
- Distribution
42.8%
• A better Non Operating Income of Ch$ 343,915 mainly explained by the application of Technical Bulletin N°64
related to the variations of foreign exchange rates, specially in Brazil and Colombia
• Cash flows generated by our core activities increased 84.9% or Ch$882,749 million, reaching Ch$1,922,128
million.
• Consolidated leverage reached 0.95 times decreasing 7.8%.
• Interest coverage improved 28.1% up to 5.47 times in line with solid electric utilities.
• Profitability on equity, operations and assets improved during the period.
DISTRIBUTION BUSINESS
• Operating Revenues confirmed its sustained stability growing 35.4%; equivalent to Ch$1,089,834 million.
• Higher revenues were also explained by 443,000 new clients over the last 12 months, broken down as
follows:
- Brazil
4.7% or 240 thousand new clients
- Colombia
- Chile
- Peru
- Argentina
This is equivalent to add a new mid size distribution company every year.
• Consolidated physical sales increased by 1.9%, where the largest growth corresponded to Peru, with a 7.7%
increase.
• An important improvement in the distribution business was the reduction in energy losses, which dropped from
11.2% to 10.8%.
• Liquidity, a key consideration in our financial management, continues to be in a very solid position, as
follows:
- Cash and Cash Equivalents, amounts to US$ 2,045 million, an increase of 107.3%, equivalent to US$1,059
million.
- Open Credit Lines for US$ 372 million available between Enersis and its subsidiary Endesa Chile in the
Chilean market and also other US$ 800 million in the international financial market.
Furthermore, on December 2008, Endesa Chile carried out a successful bond issuance in the local market equivalent
to US$ 340 million. This operation reinforces the solid financial position of our subsidiary.
• Debt maturities can be seen in the following chart:
US$
Less than
Between
Between
Between
Between
More than
million
1 year *
1 & 2 years
2 & 3 years
3 & 5 years
5 & 10 years
10 years
Bonds
960
236
325
814
1,399
984
4,717
Banks
881
527
536
494
261
3
2,702
1,842
762
861
1,307
1,660
987
7,419
Total
Total
* Includes accrued interest of financial debt only
• Coverage and protection:
Enersis continued applying a rigorous control over its liquidity along all its subsidiaries. In that respect, in addition
to strict internal rules to protect our balance sheet, cash flows and liquidity, we currently have:
- Cross Currency Swaps for a total amount of US$ 649 million to match, as much as possible, the currency in
which cash flows are originated and its associated debt.
- Interest Rate Swaps for US$ 190 million, in order to provide protection against huge variations in this
variable.
- Collars, for a whole value of US$ 150 million, intended to provide additional protection.
- Forwards, for US$ 8 million, to protect against foreign exchange rates variations.
ANNUAL REPORT
The prior financial tools are being permanently evaluated and adjusted to the changing macroeconomic scenario, in
order to achieve the most efficient levels of protection. These instruments, however, do not replace the most important
reason behind our liquidity: the very stable nature of our business, where electricity has no perfect substitutes.
MARKET SUMMARY
• Stock Markets experienced a negative performance during 2008. However, the local market showed a more
stable behavior as compared with developed countries and other countries in the region and Enersis’ shares
remained positive.
ENI 3%
Chile -22%
Mexico -24%
Brazil -41%
U.S.A. -34%
Japan -42%
China -65%
UK -31%
Argentina -50%
-25
Spain -39%
-15
Germany -40%
-5
France -43%
5
RISK RATING CLASSIFICATION INFORMATION
The year 2008 was especially demanding for the Risk Classification Agencies. They faced a very complex scenario
in the global markets, characterized by increasing uncertainty resulting from meltdown of the international stock
markets and tighter credit conditions that companies had to deal with.
The liquidity, maturities, renewal or refinancing strategy and availability of credit lines, were the most analyzed
topics.
Under this more complex environment of clear economic slowdown and increasing number of companies with
financial issues, credit classification agencies decreased “upgrades”.
• International classification:
Enersis
S&P
Moody’s
Fitch
Corporate
BBB, Stable
Baa3, Stable
BBB, Stable
• Local classification:
Enersis
Feller Rate
Fitch
Shares
1st Class Level 1
1st Class Level 1
Bonds
AA-, Stable
AA-, Stable
-35
MARKETS WHERE THE COMPANY IS PRESENT
-45
-55
-65
Source: Bloomberg
• In addition, during 2008 both Enersis and Endesa Chile continued to be among the most traded companies at
the Santiago Stock Exchange.
Enersis’ corporate activities are conducted through subsidiaries operating in different business sectors throughout
Latin America. Enersis’ most important business activities are electric power generation and distribution.
The tables below contain some key indicators on the companies in their national markets for the periods ending
31 December 2008 and 2007.
Generation
Company
Markets where
Energy Sales
the company
(GWh)
has prescence
Nemo
MM US$
1
SQM
3,413
Endesa Chile (1)
SIC y SING Chile
2
ENERSIS
2,563
3
ENDESA
1,958
Endesa Costanera
4
CENCOSUD
1,682
5
CAP
1,481
6
LAN
7
COPEC
8
D&S
9
LA POLAR
Market
Share
Dec-07
Dec-08
Dec-07
Dec-08
19,212.1
19,808.0
36.2%
37.0%
SIN Argentina
8,450.0
8,543.4
8.2%
8.1%
El Chocón
SIN Argentina
3,956.3
2,554.3
3.8%
2.4%
Edegel
SICN Perú
7,993.5
8,460.8
32.5%
31.6%
1,463
Emgesa
SIN Colombia
15,613.1
16,367.9
21.5%
21.9%
1,430
Cachoeira Dourada (2)
SICN Brasil
4,643.5
4,403.0
1.3%
1.1%
1,034
Endesa Fortaleza
SICN Brasil
2,705.0
2,690.1
0.7%
0.7%
62,573.5
62,827.5
961
10 ENTEL
862
Source: Santiago Stock Exchange
Total
(1) includes Endesa Chile and its generation subsidiaries in Chile.
(2) includes sales to Endesa Fortaleza for 185,9 GWh in the year 2008.
209
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ANNUAL REPORT
Distribution
a.- Operating Income:
Energy Sales
Company
(GWh) ( * )
Dec-07
Dec-08
Energy Losses
Customers
Customers/
(%)
(miles)
Dec-07
Dec-08
Employees
Dec-07
Dec-08
Dec-07
Dec-08
Chilectra
12,923
12,535
5.9%
6.0%
1,483
1,534
2,037
Edesur
15,833
16,160
10.7%
10.6%
2,228
2,262
879
2,139
873
Edelnor
5,201
5,599
8.1%
8.2%
986
1,028
1,813
1,800
Ampla
8,985
9,119
21.4%
20.2%
2,379
2,466
1,718
1,900
Coelce
7,227
7,571
12.5%
11.7%
2,689
2,842
2,073
2,224
Codensa
11,441
11,822
8.7%
8.1%
2,209
2,285
2,373
2,452
Total
61,610
62,806
11.2%
10.8%
11,974
12,417
1,614
1,681
(*) Includes sales to final clients, tolls and intercompany sales.
I.- ANALYSIS OF FINANCIAL STATEMENTS
1. - Analysis of Income Statement
As of 31 December 2008, Enersis’ income totaled Ch$570,883 million, representing a significant 173.8% increase
over the previous year’s figure, which was Ch$205,142 million.
The following is a comparative analysis of each item on the income statement:
Income Statement
Variation
% Variation
Dec 08-07
Dec 08-07
Dec-07
Dec-08
Operating Revenues
4,915,621
6,650,287
1,734,666
35.3%
Operating Costs
(3,255,836)
(4,305,904)
(1,050,068)
(32.3%)
Gross Profit
1,659,785
2,344,383
684,598
41.3%
(291,028)
(365,586)
(74,558)
(25.6%)
1,368,757
1,978,797
610,040
44.6%
(59,635)
(2,371)
57,264
96.0%
Net Other Non Operating Income (Expense)
(162,684)
128,901
291,585
Net Interest (Expense)
(318,211)
(319,339)
Positive Goodwill amortization
(65,138)
(65,495)
(357)
(0.6%)
(11,765)
(24,103)
(12,338)
(104.9%)
(million Ch$)
Selling and Administrative Expenses
Operating Income
Net Income from Related Companies
Foreign Exvhange Exposure
Non Operating Income
Net Inc b. Taxes, Min Int and Neg Goodwill
7,390
(610,043)
16,279
(266,128)
(1,128)
N/A
(0.4%)
8,889
120.3%
343,915
56.4%
125.7%
758,714
1,712,669
953,955
Income Tax
(275,677)
(450,974)
(175,297)
(63.6%)
Minority Interest
(282,710)
(697,031)
(414,321)
(146.6%)
Amort.
Negative Goodwill Amortization
4,815
6,219
1,404
29.2%
Net Income
205,142
570,883
365,741
178.3%
EBITDA (*)
1,893,360
2,711,086
817,726
43.2%
8,38
23,31
14,94
178.3%
Annualized Return per share US$
(*) Income before taxes, interests, depreciations, amortizations and extraordinary items.
Operating income ending 31 December 2008 increased by Ch$610,040 million, up from Ch$1,368.757 million on 31
December 2007 to Ch$1,978.797 million for this period, revealing a 44.6% increase. This is due to the good results
recorded in the distribution and generation businesses.
Generation and transmission business showed a Ch$355,144 million increase in their operating income,
equal to 47.6%, totaling Ch$1,100,727 million. Physical generation sales increased slightly by 0.4% amounting to
62,827.5 GWh in December 2008 (62,573.5 GWh in December 2007).
Chile:
In Chile, operating income amounted to Ch$550,712 million, totaling a 51% increase over the Ch$363,843 million
recorded in 2007. This increase is primarily attributed to greater operating revenue triggered by a relatively high
average spot price during 2008, in addition to a regulated price that averaged more than US$130 per MWh. Likewise,
operating expenses underwent a 21% increase totaling Ch$786,692 million, of which Ch$144,387 million correspond
to greater fuel costs given the increase use of thermal plants that run on diesel fuel, which was quite pricey during
most of 2008. It is worth mentioning here that the company’s commercial policy has made it possible for Endesa
Chile to sell energy on the spot market, which in addition to a low hydrology as of May of this year, allowed for a
5.5% increase in production for a total of 19,807 GWh for the January-December 2008 period.
Brazil:
Operating income in Brazil from our subsidiary Cachoeira Dourada for the period ending 31 December 2008 amounted
to Ch$113,389 million, which is much higher than the Ch$55,338 million recorded in 2007, representing a 104.9%
increase. This increase is the result of a sound business policy of making adjustments to energy sales contracts and
the high price on the energy market during the first few months of the 2008, all of which became a reality in spite
of a 5.2% decease in physical sales, which came in at 4,403.0 GWh (4,643.5 GWh in 2007).
Furthermore, Endesa Fortaleza’s (CGTF) operating income totaled Ch$39,694 million, revealing a 18.0% decrease
compared to the same period in 2007 when the company’s operating income was Ch$48,378 million. This reduction
is primarily due to the lower energy purchase/sales margin for the year given the high spot prices the company had to
pay for purchases. Physical sales amounted to 2,690.1 GWh as of December 2008 (2,705.0 GWh in 2007).
CIEN’s operating income totaled Ch$60,405 million for the year, which is Ch$35,161 million more than last year’s
figure when the company recorded a net income of Ch$25,244 million. In 2008 the company signed a contract with
CAMMESA to export energy from Brazil to Argentina for seven months beginning in May thus providing the company
a fixed income from tolls. The Brazilian government has still not provided ANNEL the guidelines for determining the
retribution value for energy transportation services on the Brazilian electric power system, which has become the
company’s new business focus.
ANNUAL REPORT
Argentina:
Operating income in Argentina for 2008 totaled Ch$18,009 million, compared to Ch$27,828 million recorded the
previous year, which represented 35% decrease. Less hydraulic availability translated into greater use of thermal
facilities which use costly liquid fuels. More efficient production and a sound commercial policy made it possible for
Endesa Costanera to boost its operating income by Ch$5,861 million for a total of Ch$6,284 million due to a 31%
increase in operating revenue resulting from greater physical sales and a hike in average tariffs. This was partially
offset by a 28% increase in 2008 operating costs compared to last year. On the other hand, El Chocón recorded a
Ch$15,639 million decrease in its operating income for a total figure of Ch$11,918 million in 2008, as a result of a
35.4% drop in physical sales compared to the previous year resulting from less dispatch of the power plant due to
poor hydraulic activity.
Peru:
Endesa Chile’s Peruvian subsidiary, Edegel, recorded Ch$54,372 million in operating income, which represented an
8.5% decrease vis-à-vis the Ch$50,105 million recorded in 2007. This increase is explained by a 5.8% hike in physical
sales for a total of 8,460.8 GWh in 2008, at greater average prices during this period and because of the conversion
effect into Chilean GAAP due to dollar exchange-rate variations in Chile and Peru. Likewise, operating expenses
increased by 48% primarily due more diesel-fired thermal generation as a result of maintenance on Camisea’s natural
gas pipeline and traffic on transmission lines and gas pipelines, along with greater energy purchases at higher prices
than last year.
Colombia:
Operating income in Colombia came in at Ch$262,971 million at the close of 2008, which represents a 51% increase
when compared to 2007. These improved results are primarily due to greater average sales prices, a 4.8% increase
in physical sales, and the effect of the Chilean GAAP conversion resulting from dollar exchange-rate variations in
Chile and Colombia. The sales volume totaled 16,368 GWh with greater hydraulic dispatch given the improved
hydrology. Likewise, operating costs underwent a 34% increase mostly due to greater tolls and increased energy
and capacity purchases.
In Distribution our subsidiaries recorded a Ch$262,907-million increase in their operating income, which is equal
to a 42.8% hike amounting to Ch$877,117 million. Physical sales in 2008 totaled 62,806 GWh, up 1,196 GWh or
1.9% from the last year. Furthermore, a total of 443,000 new customers signed on representing a 3.7% increase
over last year for a total customer base greater than 12.4 million.
Brazil:
In Brazil, Ampla’s operating income was Ch$210,552 million which represented a 42.7% increase or Ch$62,953
million more when compared to last year. These greater results are primarily due to a better energy purchase/sales
margin resulting from greater sales prices, a 1.5% spike in physical sales amounting to 9,119 GWh for this period,
and the conversion effect of Chilean GAAP due to dollar exchange-rate variations in Chile and Brazil. Energy losses
dropped 1.2 percentage points (p.p.) coming in at 20.2% (compared to 21.4% in 2007). Ampla’s customer base
increased by 87,000 for a total of 2.5 million customers
Additionally, Coelce’s operating income was up by Ch$55,320 million for a total of Ch$139,906 million for 2008.
This increase in operating income is primarily due to a 344 GWh or 4.8% increase in physical sales, a reduction in
energy losses which fell from 12.5% in December 2007 to 11.7% in December 2008, as well as lower expenses for
the unrecoverable funds reserve for this period, and the Chilean GAAP conversion effect due to dollar exchangerate variations in Chile and Brazil. Coelce’s customer base totaled 2.84 million in 2008, representing an increase of
153,000 customers or a 5.7% increase over 2007.
Argentina:
In Argentina our subsidiary Edesur recorded a Ch$5,456-million reduction in its operating income from Ch$31,776
million obtained the previous year to Ch$37,232 million for the current period. The latter is primarily due to an
increase in demand and more customers, which was partially offset by greater fixed costs. The increase in demand
was triggered by greater economic activity and higher temperatures, which boosted physical sales by 2.1% for a
total of 16,160 GWh in 2008. Energy losses dropped by 10.6% while the number of customers increased by 34,000
for a total of 2.3 million.
Colombia:
In Colombia, Codensa’s operating income totaled Ch$249,279 million as of December 2008, which represents a
Ch$79,591-million or 46.9% increase over last year’s figures. This boost is primarily the result of a 3.3% increase
in energy demand (totaling 11,822 GWh) and a 0.6 percentage point drop in energy losses—falling from 8.7% in
December 2007 to 8.1% for the current period—in addition to the impact of a higher purchase/sales margin during
the period. The number of customers also increased by 76,000 for a total of 2.3 million as of December 2008.
Peru:
In Peru, our subsidiary Edelnor recorded Ch$69,255 million in operating income, which is Ch$22,992 million more
compared to the same period on 2007 when the company’s operating income amounted to Ch$46,263 million. This
is primarily due to greater demand for energy and a higher sales margin. The increased demand, primarily explained
by the spike in sales to medium-tension regulated customers, contributed to the company’s greater sales margin. The
significant increase in energy demand triggered a 7.7% increase in physical energy sales which topped off at 5,599
GWh for the period. The number of customers also increased by 42,000 for a December 2008 period-end total of
1.03 million customers. Energy losses went up by 0.1 percentage points, totaling 8.2% during the period, compared
to 8.1% for the same period last year.
Chile:
In Chile, our subsidiary Chilectra recorded Ch$171,064 million in operating income which represented a Ch$36,646
million or 27.3% increase over last period’s figures. The latter is due to a higher purchase/sales margin and greater
toll income, which was partially offset by less energy demand for the period. Physical sales amounted to 12,535 GWh,
down 3.0% when compared to the same period in 2007. This was due to the energy savings plan launched by the
Chilean government. The number of customers grew by 51,000 for a total of 1.5 million as of December 2008.
211
212
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ANNUAL REPORT
Revenues from operations and cost of operations, as well as administrative and selling expenses and sales to
subsidiaries of the Endesa Group for the periods ending December 2008 and 2007 are shown in the table below:
OPERATING INCOME DETAIL
(Million Ch$)
December of 2007
Company
Endesa Chile
December of 2008
Operating
Operating
Operating
Operating
Operating
Operating
Revenues
Costs
Income
Revenues
Costs
Income
1,880,663
(1,218,649)
621,633
2,491,589
(1,549,013)
893,361
Cachoeira Dourada
125,589
(67,474)
55,338
181,685
(65,202)
113,389
CGTF
112,618
(62,491)
48,378
138,504
(96,219)
39,694
Cien
95,019
(65,012)
25,244
93,228
(27,584)
60,405
Chilectra S.A.
874,624
(686,694)
134,418
1,081,028
(856,618)
171,064
Edesur S.A.
319,484
(242,900)
31,776
416,413
(311,126)
37,232
Edelnor S.A.
233,623
(165,649)
46,263
313,236
(216,553)
69,255
Ampla
600,468
(414,480)
147,599
863,638
(606,270)
210,552
Coelce
478,926
(343,283)
84,586
662,957
(477,035)
139,906
Codensa S.A.
568,160
(381,452)
169,688
827,845
(545,709)
249,279
Cam Ltda.
150,907
(124,917)
13,186
193,259
(166,228)
10,067
Inmob. Manso de Velasco Ltda.
25,966
(17,637)
4,854
13,377
(9,203)
981
Synapsis Soluc.y Servicios Ltda.
64,499
(49,998)
5,037
78,794
(58,261)
10,815
Holding Enersis y soc. inversión
5,457
(1,636)
(23,337)
5,447
(1,714)
(31,931)
(620,382)
586,436
4,094
(710,713)
680,831
4,728
1,368,757
6,650,287
Consolidation Adjustments
Consolidated Total
4,915,621
(3,255,836)
(4,305,904)
1,978,797
ANNUAL REPORT
Operating Income by Business
The revenues from operations and cost of operations broken down by line of business for the periods ending 31 December 2008 and 2007 are as follows:
OPERATING INCOME BY BUSINESS LINES
Periods ended as of December 31st of 2007 and 2008 (Million Ch$)
Generation
Business
and Transmission
Distribution
Ingeneering and Real Estate
Parent company and Other
Services
services
Dec-07
Dec-08
Dec-07
Dec-08
Dec-07
Dec-08
Dec-07
Dec-08
Dec-07
Dec-08
2,160,532
2,869,112
3,075,284
4,165,118
59,617
52,995
220,863
277,500
(600,675)
(714,438)
4,915,621
6,650,287
Operating Costs
(1,365,806)
(1,709,035)
(2,234,457)
(3,013,311)
(45,479)
(40,662)
(176,550)
(226,203)
566,456
683,307
(3,255,836)
(4,305,904)
794,726
1,160,077
840,827
1,151,807
14,138
12,333
44,313
51,297
(34,219)
(31,131)
1,659,785
2,344,383
(49,143)
(59,350)
(226,617)
(274,690)
(4,932)
(4,862)
(49,629)
(62,542)
39,293
35,858
(291,028)
(365,586)
745,583
1,100,727
614,210
877,117
9,206
7,471
(5,316)
(11,245)
5,074
4,727
1,368,757
1,978,797
Gross Profit
Operating Income
b.- Non-Operating Income
As of the end of 31 December 2008, the company had recorded a loss in non-operating income amounting to
Ch$266,128 million, which represents an improvement of Ch$343,915 million over losses recorded during the same
period in 2007, which totaled Ch$610,043 million. The latter is primarily due to the following:
Other non-operating income and expenses, net, recorded an improvement of Ch$291,585 million, up from
a loss of Ch$162,684 million in December 2007 to a net income of Ch$128,901 million in the current period. The
main reasons for this change are as follows:
• Greater net income of Ch$362,109 million resulting from an adjustment for converting to Chilean standards after
having enforced Technical Bulletin No. 64 primarily in the Brazilian and Colombian subsidiaries (Ch$135,968
million, net of minority interest).
• A Ch$40,575 million reversal in sub-transmission provision.
• Fewer expenses related to a Heritage Tax in Colombia of Ch$9,974 million.
The above was partially offset by:
• Less net income due to reversals in provisions, recorded in 2007, contingencies, litigation, and other items for
a total of Ch$43,562 million.
• Ch$30,279 million less in net income due to tariff adjustments in previous fiscal years in Edesur, which was
recognized during first quarter 2007.
• More expenses due to taxes in Chile and Peru resulting from the liquidation of holdings for Ch$23,131 million.
• Ch$8,869 million less in revenues at CIEN due to the liquidation of the Cemsa contract, recognized in 2007.
• Reliquidation of energy and capacity for Ch$6,190 million.
Dec-08
Totals
Operating Revenues
Dec-07
Eliminations
Interest expense net of interest income underwent a 0.4% increase equal to Ch$1,128 million, resulting
from a net expense of Ch$318,211 million as of December 2007 to a net expense of Ch$319,330 million for the
current period. This is primarily due to a greater interest expense in Codensa of Ch$19,009 million, due to more
mean debt, and in Ampla of Ch$17,408 million, in Coelce of Ch$8,817 million, Cien of Ch$8,096 million due to
the increase in the average Selic rate during the period. The latter is partially offset by a lower interest expense in
Edesur of Ch$5,372 million as a result of lower fine updates, and in Enersis of Ch$ 3,505 million due to less debt;
as well as being offset by greater interest income in Ampla for Ch$10,459 millions, in Coelce for Ch$9,357 million,
in Endesa Brasil for Ch$5,655 million, in CGTF for Ch$4,271 million, in Enersis for Ch$4,506 million, triggered by
an increase in financial investments during the period, and interest income in Edesur increased by Ch$7,848 million
due to deferred collection of the price adjustment.
Equity in income of related companies, net, recorded a lower net expense of Ch$57,264 million after having
gone from a net loss of Ch$59,635 million at December 2007 to a net loss of Ch$2,371 million in the current period.
This increased benefit was partially the result of having recognized Ch$58,286 million less in losses from Inversiones
Gas Atacama Holding during the period, which was partially offset by a greater loss of Ch$835 million recorded by
Centrales Hidroeléctricas de Aysen S.A. and Ch$505 million by GNL Chile.
Goodwill amortization did not undergo any significant changes and amounted to Ch$65,495 million as of 31
December 2008, with an increase of Ch$357 million.
Price-level restatement underwent a negative change of Ch$12,338 million, primarily due to the impact of higher
inflation during the 2008 period which hit 8.9% versus 7.4% in 2007. This change has affected both non-monetary
and monetary assets and liabilities, mainly UF-denominated bonds, in addition to updated income accounts.
213
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ANNUAL REPORT
Foreign currency translation as of 31 December 2008 revealed a positive change of Ch$8,889 million, moving
from a net income of Ch$7,390 million in 2007 to Ch$16,279 in 2008. This is primarily the result of an active position
of mismatch in dollars held by the company during both periods, the derivatives-based hedge policy, and changes
in the Chilean peso-dollar parity. Consequently, during the previous period the exchange rate fell $35.5 pesos from
$532.39 to $496.89 while it actually increased $139.56 this period from $496.89 to $636.45.
Income Taxes and Deferred Taxes in 2008 recorded an expense of Ch$450,974 million, which represents an
increase of Ch$175,297 million when compared to the Ch$275,677-million tax expense recorded as of 31 December
2007.
ANALYSIS OF EXCHANGE RATE AND INTEREST RATE RISK
The Group’s exchange-rate hedge policy is cash-flow based and aims to strike a balance between the cash flow
indexed to foreign currency (US$) and the level of assets and liabilities held in dollars.
The Company therefore holds a portion of its debt in dollar-denominated instruments, due to the fact that some
of its sales in markets where it operates are indexed to this currency. However, there is less dollar indexation in the
Brazilian, Colombian, and Argentinean markets, and accordingly the subsidiaries in these countries prefer to borrow
in local currency. In the case of Argentina, dollar-based financing has gradually been replaced by financing in local
currency to the extent that the conditions governing terms and market rates allow for it.
Income Tax and Defered Taxes
Concept (Million Ch$)
Income Tax
Deferred Taxes
Total
Dec-07
Dec-08
Variations
(224,930)
(352,977)
(128,047)
(50,747)
(97,997)
(47,250)
(275,677)
(450,974)
(175,297)
The income tax expense increased Ch$128,047 million, which is primarily due the improvements at our subsidiaries:
Emgesa Ch$42,187 million, Codensa Ch$24,493 million, Ampla Ch$20,338 million, Endesa Chile Ch$15,264 million,
Pehuenche Ch$13,955 million, Pangue Ch$6,498 million, Chilectra Ch$6,027 million, Edelnor Ch$3,936 million and
Edesur Ch$3,729. This was partially offset by fewer income tax provisions at our subsidiaries CIEN (Ch$6,718 million),
El Chocón (Ch$6,140 million) and Enersis (Ch$2,984 million).
Regarding deferred taxes, which do not reflect cash flows, they recorded greater expenses of Ch$47,250 million
primarily due to the impact recorded in Enersis (Ch$27,797 million), Chilectra (Ch$24,857 million), Coelce (Ch$13,238
million), Cien (Ch$11,647 million), San Isidro (Ch$5,990 million) and Edelnor (Ch$3,722 million), which was partially
offset by a decrease in Edegel (Ch$9,371 million), Ampla Investimento (Ch$9,236 million), Codensa (Ch$5,883
million) and Edesur (Ch$5,590 million).
Goodwill Amortization amounted to Ch$6,219 million as of 31 December 2008, which does not represent any
significant change from the same period last year for which this figure totaled Ch$4,815 million.
Minority Interest increased by Ch$424,321 million for a total of Ch$697,031 million. This was triggered by a
significant increase in the results of some of our subsidiaries that now have a high percentage of minority interest, to
wit: Endesa Chile underwent an increase of Ch$93,255 million, Emgesa of Ch$84,998 million, Codensa of Ch$75,331
million, Endesa Brasil of Ch$48,021 million, Coelce of Ch$49,593 million, Edegel of Ch$17,761 million and Ampla
of Ch$13,502 million; this was partially offset by a decrease in Edesur of Ch$ 3,064 million and in El Chocón of
Ch$3,806 million. (See Note 21.b of the FECU for more information).
Notwithstanding this natural exchange rate hedge, when facing a scenario in which the dollar is extremely volatile,
the company has continued to follow a strategy of partially hedging its dollar-denominated liabilities in order to
mitigate the impact of exchange rate fluctuations on its bottom line.
As of 31 December 2008, the company’s consolidated hedged indebtedness in Chile amounted to US$ 600 million
in dollar/UF swap contracts, thus enabling the company to comply with the aforementioned hedging policy. As in
the same period in 2007, the company already had dollar/UF swap contracts for US$ 600 million.
Regarding interest rate risk, the company’s consolidated debt is broken down into fixed and variable rates at
approximately 68.4% and 31.6%, respectively, as of 31 December 2008. These percentages have remained stable
when compared to last year’s fixed and variable rates of 68.6% and 31.4%, respectively
ANNUAL REPORT
The table below contains a comparative view of operating income by country for both periods.
OPERATIONAL INCOME BY COUNTRY
Periods ended as of December 31st of 2007 and 2008
(Million Ch$)
PAIS
Operating Revenues
% over consolidated value
Operating Costs
Gross Profit
Operating Income
Chile
Argentina
Dec-07
Brazil
Dec-08
Peru
Dec-07
Colombia
Dec-08
Dec-07
Eliminaciones
Dec-07
Dec-08
Dec-07
Dec-08
1,824,933
2,301,283
620,099
786,448
1,238,277
1,828,570
392,591
529,328
848,304
1,210,029
Dec-08
37%
35%
12%
12%
25%
27%
8%
8%
17%
18%
(1,231,321)
(1,476,796)
(509,048)
(652,841)
(781,357)
(1,162,662)
(266,599)
(368,176)
(475,873)
(649,727)
38%
34%
15%
15%
24%
27%
8%
9%
15%
15%
593,612
824,487
111,051
133,607
456,920
665,908
125,992
161,152
372,431
560,302
36%
35%
7%
6%
(87,550)
(99,931)
(49,103)
(74,352)
(101,652)
28%
(114,083)
28%
(28,424)
8%
(34,780)
7%
(24,299)
22%
(43,162)
30%
27%
17%
20%
35%
31%
10%
10%
8%
12%
506,062
724,556
61,948
59,255
355,268
551,825
97,568
126,372
348,132
517,140
Dec-07
Totales
Dec-07
Dec-08
(8,583)
Dec-08
(5,371)
4,915,621
6,650,287
8,362
4,298
(3,255,836)
(4,305,904)
(1,073)
1,659,785
2,344,383
(221)
24%
-
722
(291,028)
(365,586)
-221
-351
1,368,757
1,978,797
Other Risks
As is customary for certain credit and capital market debt facilities, a portion of Enersis and Endesa Chile’s financial
indebtedness is subject to cross default provisions. Any matured default by any of the relevant subsidiaries could
result in a cross default to Enersis and Endesa Chile, in which case, certain indebtedness held by these companies
could potentially become due and payable.
companies or any of their subsidiaries could give rise to the prepayment of Yankee bonds. Furthermore, some financial
covenants contain provisions according to which certain default events, in these companies or any of their relevant
subsidiaries, such as bankruptcy, insolvency, adverse legal rulings and rulings for amounts exceeding US$ 50 million,
and asset expropriation, could trigger the acceleration rights of such indebtedness.
Any default on debt exceeding an equivalent of US$30 million on an individual basis—after expiration of grace
periods if applicable—by these companies or by any of their relevant subsidiaries, could give rise to the prepayment
of syndicated loans subscribed in 2004. Loans subscribed by Endesa in January and December 2006 and in June
2008, and by Enersis in December 2006 contain US$50 million thresholds. Similarly, any default on loans exceeding
an equivalent of US$30 million on an individual basis—after expiration of grace periods if applicable—by these
The financial covenants do not contain clauses requiring the mandatory prepayment of indebtedness due to changes
in control or the debt rating of these companies by risk classification agencies. However, a change in the foreigncurrency debt rating by the risk classification agency Standard & Poor’s (S&P) may give rise to a change in the margin
applied when determining the interest rates of the syndicated loans signed in 2004 and 2006.
215
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enersis08
ANNUAL REPORT
The indebtedness that could become due and payable in the event of any default and the respective creditor
subsidiary are as follows:
Yankee International Bonds
Amounts in US$ million as of December 31, 2008
Bank Loans
B. Yankee
Enersis
Syndicated
Enersis
150
Endesa Chile (*)
450
Total
600
Endesa Chile
1.466
Total
2.067
Potentially active non-compliance events in subsidiaries (would trigger cross default at the parent company)
(*) The total of Endesa Chile’s Bank Loans don’t include the outstanding amount of US$ 200 million of the loan subscribed
on June of 2008, because it don’t have cross default with subsidiaries.
601
Enersis
1. Debt Default > 30 MMUS$ (1)
Debt default by Enersis or any Subsidiary. The Enersis Subsidiaries that to
date register third party debts in excess of 30 MMUS$ are: Ampla, Betania,
Endesa Fortaleza, CIEN, Codensa, Coelce, Edegel, Edesur, El Chocón,
Potentially active non-compliance events in subsidiaries that generate cross default at the parent company
Enersis
Emgesa, Endesa Costanera, Endesa Chile.
2. Bankruptcy Process Initiation
In Enersis or any Enersis Significant Subsidiary. Based on financial results
Effect at Parent Company;
600 MMUS$
as of 31.12.2007, the Enersis Significant Subsidiaries are: Chilectra, Endesa
Only generate effect on Parent Company if those reasons recorded occur
Chile, Pehuenche and San Isidro. Ampla Energia e Servicos and Codensa are
2. Bankruptcy or Suspension of Payments
in so-called Relevant Subsidiaries. Failures in other subsidiaries do not
both added according to Chilean GAAP.
3. Substantial Effect Adverse Failure
produce effect on Parent. The Relevant Subsidiaries are classified based on
4. Government Action (2)
latest year’s financial results under US GAAP. Based on financial results as
of December 31, 2006, the Enersis Relevant Subsidiaries are: Endesa Chile,
Endesa Chile
Endesa Brazil, Chilectra y Ampla Energia y Serviços.
Debt default by Endesa or any Subsidiary. The Endesa Subsidiaries that
to date register third party debts in excess of 30 MMUS$ are: Edegel, El
Chocón, Emgesa y Endesa Costanera
Endesa Chile
2. Bankruptcy Process Initiation
In Endesa or any Endesa Significant Subsidiary. Based on financial results
Effect at Parent Company;
450 MMUS$
as of 31.12.2007, the Endesa Significant subsidiaries are: Southern Cone
Only generate effect on Parent Company if those reasons recorded occur
(dissolved in 2008), Pehuenche, San Isidro and Inversiones Endesa Norte, all
2. Bankruptcy or Suspension of Payments
in so-called Relevant Subsidiaries. Failures in other subsidiaries do not
3. Substantial Effect Adverse Failure
produce effect on Parent. The Relevant Subsidiaries are classified based on
Notes:
4. Government Action (2)
latest year’s financial results under US GAAP. Based on financial results as
(1) Only on individual debt operating level, from the Issuer or from any Subsidiary.
of December 31, 2007, the Enersis Relevant Subsidiaries are: Southern Cone
(which was dissolved on 2008), Pehuenche, and Emgesa.
Notes:
(1) At an individual debt operating level.
(2) Nationalization, expropriation, dissolution, etc.
of which, according to US and Chilean GAAP.
ANNUAL REPORT
2. - ANALYSIS OF BALANCE SHEET
Local Bonds
Assets
Enersis
58,6
Variation
% Variation
Dec 08-07
Dec 08-07
2,994,552
532,663
21.6%
Dec-07
Dec-08
Current Assets
2,461,889
Local Bonds
(millions Ch$)
Endesa Chile
656,3
Property, Plant and Equipment
8,720,000
10,080,210
1,360,210
15.6%
Total
714,9
Other assets
1,273,839
1,324,866
51,027
4.0%
Total Assets
12,455,728
14,399,628
1,943,900
15.6%
The Enersis bond has cross default only on its own debt exceeding 3% of its assets
Potentially active non-compliance events in subsidiaries
(Would trigger cross default at the parent company)
Endesa Chile
Debt Default > = 2 MMUF
Insolvency or cannot pay debts
Bankruptcy Proceedings Initiation
Debt Default by Endesa Chile
In Endesa Chile or any Significant Subsidiary. Based on financial results as
The company’s total assets as of December 2008 increased by Ch$1,943,900 million compared to the same period
last year, which is mainly due to:
•
A Ch$532,663 million increase in current assets, equal to 21.6%, as a result of:
-
of 31.12.2007, the only Endesa Chile significant subsidiary is Southern Cone
(dissolved in 2008).
-
-
-
-
-
An increase of Ch$352,064 in other current assets primarily due to greater investments in Sales and Repurchase
Agreements for Ch$353,016 million in Enersis, Endesa Chile, and Chilectra, and a Ch$25,701 increase in
Coelce related to the Brazilian Government’s “Light for All” project. This is partially offset by a decrease
of Ch$30,305 million in Enersis due to deposits for obligations and guarantees.
A Ch$228,432 million increase in cash available and term deposits primarily due to the following amounts
having been floated by the companies: Endesa Chile Ch$111,082 million, Enersis Ch$41,369 million, Codensa
Ch$23,467 million, Emgesa Ch$21,698 million, Chilectra Ch$8,535 million, and Edegel Ch$5,826 million.
A Ch$92,200-million increase in negotiable instruments that essentially corresponds to a Ch$90,008-million
increase in Emgesa due to higher collections.
An increase in debtors due sales of Ch$62,902 million given an increase in Chilectra for Ch$66,174 million,
Edegel for Ch$23,870 million, Edesur for Ch$20,493 million, Endesa Costanera for Ch$14,440 million and
CAM for Ch$12,489, which was partially offset by a decrease in Ampla for Ch$34,569 million, Cachoeira
Dourada for Ch$20,545 million, Coelce for Ch$19,801 million, and Cien for Ch$18,816 million due to greater
collection of customer payments.
A Ch$135,064 million decrease in instruments receivable from related companies primarily due to the transfer
to the long term of accounts receivable from Atacama Finance Co. in the amount of Ch$97,350 million and
a decrease in accounts receivable from GNL Quintero in the amount of Ch$39,552 million and from GNL
Chile in the amount of Ch$1,315 million.
A Ch$34,295 million decrease in recoverable taxes resulting from a decrease in Endesa Chile for Ch$33,200
million, Emgesa for Ch$12,927 million, Chilectra for Ch$9,448 million, and Edegel for Ch$2,345 million,
partially offset by an increase in Endesa Brasil of Ch$8,651 million, Cien of Ch$6,337 million, and CGTF of
Ch$5,167 million.
217
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218
ANNUAL REPORT
•
An increase of Ch$1,360,211 million in Fixed Assets, equal to 15.6%, primarily due to the addition of fixed assets
last year for approximately Ch$862,000 million, partially offset by the depreciation of one-year fixed assets of
The company’s total liabilities increased by Ch$1,943,900 million from the same period last year, which is largely
due to the following:
approximately Ch$553,586 million and by the real exchange-rate effect on fixed assets of foreign companies
as a result of the methodology of booking non-monetary assets in historical dollars in keeping with Technical
Bulletin No.64 that is applied by subsidiaries located in unstable countries, which amounts to approximately
Ch$1,061,000 million.
• An increase in current liabilities of Ch$639,520 million, equal to 33,9%, resulting from changes in the following
areas:
-
•
An increase of Ch$51,026 million in Other Assets, which is primarily triggered by:
-
-
-
-
An increase in accounts receivable from related companies in the amount of Ch$112,140 million, primarily
due to the transfer from the short term to the long term of accounts receivable from Atacama Finance in the
amount of Ch$109,602 million and in an increase in accounts receivable from Sistemas SEC in the amount
of Ch$2,447 million.
An increase in investments in related companies in the amount of Ch$54,243 million, primarily due to a
greater investment in GNL Quintero S.A. in the amount of Ch$22,395 million and in Central Hidroeléctrica
de Aysén in the amount of Ch$17,957 million, in addition to a greater investment in Gas Atacama Holding
Ltda. in the amount of Ch$11,569 million, mostly due to variations in the dollar over the period.
A reduction in Goodwill in the amount of Ch$62,550 million, essentially due to the amortization of goodwill
recorded during the year in the amount of Ch$65,495 million.
A Ch$50,613-million decrease in Other Long-term Assets, primarily due to fewer losses not realized as a
result of derivative contracts in Enersis in the amount of Ch$50,955 million and lower deferred assets in
the amount of Ch$2,269 million in Coelce, which was partially offset by an increase in bond placements of
Ch$1,805 million and an increase of Ch$1,213 million in escrow accounts.
Liabilities and Shareholder's Equity
Variation
% Variation
Dec 08-07
Dec 08-07
Dec-07
Dec-08
Current Liabilities
1,884,265
2,523,785
639,520
33.9%
Long Term Liabilities
4,424,084
4,501,484
77,400
1.7%
(millions Ch$)
Minority Interest
2,985,784
3,677,146
691,362
23.2%
Shareholder's Equity
3,161,595
3,697,213
535,618
16.9%
12,455,728
14,399,628
1,943,900
15.6%
Total Liabilities and Shareholder's Equity
-
-
-
-
An increase in short-term public debt of Ch$212,650 million mostly due to the net effect of transfers from
the long term to the short term (Ch$394,599 million) and bond payments (Ch$224,134 million) in Endesa
Chile of Ch$170,465 million, Emgesa of Ch$90,902 million, Codensa of Ch$14,206 million, Edegel of
Ch$8,926 million, and Edelnor of Ch$9,514 million, which were partially offset by bond payments in Ampla
for Ch$91,913 million.
A Ch$140,891-million increase in the short-term portion of long-term bank debt primarily due to the transfer
to the short term of Ch$94,779 million of Enersis’ revolving loan and of Ch$47,381 million of Ampla’s loan
with Bradesco and Unibanco.
A Ch$94,428-million increase in bank debt primarily due to a Ch$45,971 million in Coelce, Ch$34,137 in
Enersis, Ch$15,435 million in Emgesa, Ch$12,432 million in Chilectra, Ch$11,756 million in Edegel, and
Ch$6,740 million in El Chocón, which was compensated in part by a Ch$26,262 million decrease in Edelnor
and a Ch$12,761 million decrease in Codensa.
A Ch$71,017-million increase in income tax resulting from a Ch$36,061-million increase in Emgesa, Ch$10,892
million in Codensa, Ch$10,021 million in Endesa Chile, and Ch$7,346 million increase in Chilectra.
An increase in accounts payable of Ch$64,448 million resulting from Ch$30,173 million in supplier debt in
Endesa Chile, Ch$16,728 million in Edegel, Ch$15,087 million in Costanera, Ch$12,656 million in Endesa
Eco, and Ch$10,239 million in Emgesa, partially offset by a decrease in San Isidro of Ch$37,822 million due
to fewer fuel purchases.
• Long-term liabilities increased by Ch$77,400 million, equal to a 1.7%, in large part due to the following:
-
-
A Ch$100,763 million increase in long-term deferred taxes, which primarily corresponds to reductions in
deferred assets due to tax losses in Enersis, Endesa Chile, and Chilectra in the amount of Ch$84,423 million
and unrecoverable funds in the amount of Ch$11,924 million.
An increase in public debt in the amount of Ch$53,113 million, primarily due to Ch$214,526 million in new
debt issued by Endesa Chile, Ch$76,592 million issued by Codensa, Ch$40,227 issued by Edelnor, and
Ch$18,283 issued be Edegel, and approximately Ch$175,000 million due to the effect of exchange-rate
variations, which is partially offset by transfer to the short term of Ch$335,490 million in Endesa Chile,
Ch$85,265 million in Emgesa, Ch$23,461 million in Edegel, and Ch$15,216 million in Edelnor.
ANNUAL REPORT
-
-
transfer to the short term of its revolving loan, and a Ch$64,401 million reduction in Ampla due to transfers
to the short term.
A Ch$108,384 million reduction in other long-term debt primarily due to a Ch$115,198 million decrease
in Enersis of the fair value of derivatives, offset in part by an increase in Edegel and Edesur of Ch$3,181
million and Ch$2,253 million, respectively.
Minority interest totaled Ch$3,677,146 million, revealing an increase of Ch$691,361 million, equal to 23.2%, as
a result of increases in the amount of shareholders’ equity the companies had because of the year’s income, and the
effect of the dollar-peso exchange rate (See Note 21 of FECU for more information).
Shareholders’ equity increased by Ch$535,617 million compared to December 2007. This change is primarily due to a
Ch$365,741 million increase in the period’s income, a Ch$35,195 million increase in cumulative results, and increase in
reserves of Ch$35,195 million, largely due to the exchange-rate effect of the dollar on investment hedges abroad.
The changes in the leading financial indicators are as follows:
Indicator
Liquidity
Liquidity
Acid Ratio Test (1)
Working capital
Indebtedness
Leverage
Short-term debt
Long-term debt
Interest Coverage (2)
Return
The indebtedness ratio is 0.95 times as of December 2008, having decreased 7.8% over its 2007 level.
An increase in long-term bank debt in the amount of Ch$42,775 million due to an increase in debt in Endesa
Chile of Ch$294,989 million partially offset by a Ch$189,390 million reduction in Enersis for payment and
Unit
Times
Times
The profitability index—defined by operating income over revenue from operations—increased 6.9%, amounting
to 29.8% as of December 2008.
Furthermore, the annual profitability of shareholders’ equity is 15.44% with a 137.9% increase over 2007, when it
totaled 6.49%. This is due to the improved results recorded for this year, partly offset by an increase in shareholders’
equity.
The annual profitability of assets jumped from 1.65% in December 2007 to 3.96% in December 2008, which is
also a reflection of the better results recorded for this year, partly offset by a 15.6% increase in assets, primarily
dollar-denominated assets
3. - MAIN SOURCES OF CASH FLOW
Dec-07
Dec-08
1.31
1.19
Variation
% Variation
Dec 08-07
Dec 08-07
(0.12)
(9.2%)
1.22
1.12
(0.10)
(8.2%)
577,624
470,767
(106,857)
(18.5%)
Times
1.03
0.95
(0.08)
(7.8%)
%
0.30
0.36
0.06
20.0%
million Ch$
Interest expense coverage increased 1.2 times or the equivalent of 28.1%, having jumped from 4.27 times in
December 2007 to 5.47 times in the current period. This is due to the significantly better results obtained by the
Enersis Group during this period.
%
0.70
0.64
(0.06)
(8.6%)
Times
4.27
5.47
1.20
28.1%
O.I/O.R
%
27.85%
29.76%
1.91%
6.9%
ROE
%
6.49%
15.44%
8.95%
137.9%
ROA
%
1.65%
3.96%
2.31%
140.0%
(1) Current assets net of inventories and pre-paid expenses
(2) EBTDAEI/Interests Expenses = (Earnings before taxes+Fin exp+Net non operating income+depreciation+positive
Goodwill) /Interest expenses
The liquidity index as of December 2008 amounted to 1.19 times, revealing a 0.12-fold decrease, and equal to
9.2%, compared to the same period in 2007. Despite this decrease in the index, the index reflects that the company
enjoys a sound position in terms of liquidity, and that it continues to hold bank debt and finance its investments with
cash surplus, while having an appropriate schedule of debt maturity.
During the period the company generated a positive net cash flow totaling Ch$795,426 million, which can be broken
down as follows:
Effective Cash Flow
Variation
% Variation
Dec 08-07
Dec 08-07
Dec-07
Dec-08
Operating
1,039,379
1,922,128
882,749
84.9%
Financing
(194,367)
(346,353)
(151,986)
(78.2%)
Investment
(753,084)
(780,349)
(27,265)
(3.6%)
91,928
795,426
703,498
765.3%
(million Ch$)
Net cash flow of the period
As of 31 December 2008, operating activities generated a positive net cash flow of Ch$1,922,128 million, which
represents an 84.9% increase over last year. This flow is primarily made up of the following:
Net income of Ch$570,883 million, plus
• Ch$794,694 million in charges that do not represent cash flow but that mostly correspond to Ch$553,586
million in depreciation for the period, Ch$48,862 million in write-downs and provisions, Ch$65,496 million in
goodwill amortization, Ch$12,541 million in amortization of intangibles, Ch$5,971 million in loss on permanent
investments, and Ch$108,238 million in other charges that do not represent cash flow, which includes the BT
64 negative conversion effect of foreign subsidiaries for a sum of Ch$94,613 million.
•
Ch$204,519 million in variations in net assets and liabilities that affect operating cash flow.
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ANNUAL REPORT
The above was partly offset by:
• Ch$347,384 million in credits that do not represent cash flow, which correspond to an additional Ch$337,564
million in other credits that do not represent cash flow, of which Ch$290,531 million correspond to the positive
conversion effect of subsidiaries abroad, Ch$3,600 million correspond to investment income in related companies,
and Ch$6,220 million to negative goodwill amortization.
Financing activities generated a negative net flow of Ch$346,353 million due to loan payments in the amount
of Ch1,024,994 million, dividends payments of Ch$524,771 million, public debt payments of Ch$342,536 million,
documented loan payments from related companies of Ch$3,027 million, and other disbursements in the amount of
Ch$15,566 million. The latter is partly offset by loans secured for Ch$1,224.190 million, bond floats for Ch$338,111
million, and $2,240 million in other sources of financing.
Investment activities generated a negative net flow of Ch$780,349 million, which, when compared to the same
period last year, represents a greater cash contribution equal to 3.6% or Ch$27,265 million. These disbursements
correspond primarily to the incorporation of Ch$826,765 million in fixed assets, Ch$19,865 million in permanent
investments, Ch$29,258 million in other loans to related companies, and Ch$416,913 million in other disbursements,
partly offset by Ch$62,400 million in sales collected on permanent investments, Ch$9,557 million in sales collected
on fixed assets, and Ch$32,764 million in other investment income.
PROPERTY, PLANT AND EQUIPMENT BY COMPANY
(million Ch$)
Expenditures for Property, Plant
Company
and Equipment
Depreciation
Dec-07
Dec-08
Dec-07
Dec-08
225,456
290,179
210,151
250,505
Cachoeira Dourada
1,997
1,938
13,708
16,026
CGTF
1,599
1,564
4,018
5,621
Endesa Chile
CIEN
Chilectra S.A.
178
1,263
13,386
18,195
75,035
64,245
22,945
25,838
Edesur S.A.
45,385
89,098
41,295
49,094
Edelnor S.A.
21,685
35,798
17,265
18,803
Ampla
113,939
127,334
38,223
51,406
Coelce
110,307
128,974
41,644
54,425
45,603
72,773
44,531
55,315
2,354
Codensa S.A.
Cam Ltda.
1,778
3,207
1,839
1,220
2,287
346
284
Synapsis Soluciones y Servicios Ltda.
1,654
6,199
2,805
3,911
Holding Enersis y sociedades de inversión
1,090
1,906
1,622
1,809
646,926
826,765
453,778
553,586
Consolidated Total
II. CARRYING VALUE AND ECONOMIC VALUE OF ASSETS
The following information is relevant to the company’s most important assets:
The values of fixed asset goods are adjusted according to accounting criteria set forth by the Office of the
Superintendent of Securities and Insurance in Publications 550 and 566 from 1985. In the case of the foreign
company Inversiones Distrilima S.A., fixed asset values were adjusted pursuant to the exception criteria set forth
under Technical Bulletin No. 45 of the Chilean Association of Accountants (Colegio de Contadores de Chile A.G.),
which were the regulations in effect at the time of the investment and were not amended under Technical Bulletin
No. 51, which replaced the previous bulletin. Depreciation is calculated on the basis of the current value of the assets
pursuant to the useful life remaining on each good.
Investments in related companies are appraised at their proportional equity value. In the case of foreign companies,
this methodology has been applied to financial statements prepared under regulations set forth in Technical Bulletins
No. 72 and No. 64 of the Chilean Association of Accountants, and intangible values are restated and amortized
pursuant to regulations provided under Technical Bulletin No. 55 of the Chilean Association of Accountants.
According to the S.V.S Official Publication No.150 dated January 31, 2003, at the close of its 2008 financial
statements the company evaluated the recoverability of the assets associated with its investments, pursuant to that
which is provided under Technical Bulletin No. 72 published by the Chilean Association of Accountants. As a result
of said evaluation, the company determined that there is no longer an impairment associated with the acquired
businesses, except for the case of an investment held by our subsidiary Endesa Chile in Inversiones Gas Atacama
Holding Ltda., whose proof of impairment determined in 2007 that the recoverable value of said investment was less
than its carrying value, thus requiring a provision at that time.
Assets expressed in foreign currency are presented at the effective exchange rate of each period.
Investments in financial instruments with covenants are presented according to their purchase value plus the
corresponding portion of interest pursuant to the implicit rate of each operation.
Accounts and instruments receivable from related companies are classified according to their short- and long-term
maturities. Operations are adjusted to equity conditions similar to prevailing market conditions.
In summary, assets are appraised according to generally accepted accounting principles and the guidelines set by
the Office of the Superintendent of Securities and Insurance, as defined in Note 2 to the Financial Statements.
ANNUAL REPORT
CONSOLIDATED MATERIAL INFORMATION ENERSIS S.A.
Final Dividend
On April 1, 2008, the ordinary shareholders meeting agreed to distribute a final dividend No.77 for Ch$3.41 per
share charged to the net income for 2007, payable from April 30, 2008.
Board of Directors of Enersis S.A.
1° On April 1, 2008, the ordinary shareholders meeting elected the new board of directors of the company for a
period of three years. The members of the board are:
Pablo Yrarrázabal Valdés
Patricio Claro Grez
2° At a board meeting held on April 1, 2008, following the ordinary shareholders meeting mentioned above, Pablo
Yrarrázabal Valdés was elected as chairman of the board and the company, Rafael Miranda Robredo as vice-chairman
and Domingo Valdés Prieto as secretary.
3° At the board meeting mentioned, the members were appointed of the Directors’ Committee as required by the
Corporations Law 18,046, these being the directors Pablo Yrarrázabal Valdés, Hernán Somerville Senn and Patricio
Claro Grez. In accordance with Circular 1,526 of the SVS, the director Patricio Claro Grez was elected with the votes
of those other than the controller or its related parties.
4° At the same board meeting, in accordance with the bylaws of the company, the board appointed the new
members of the Audit Committee, an organ created to comply with the Sarbanes Oxley Act of the United States
of America. The members of the Audit Committee of Enersis S.A. are the directors Juan Eduardo Errázuriz Ossa,
Hernán Somerville Senn and Patricio Claro Grez, all of whom meet the requirements of the Sarbanes Oxley Act and
its complementary regulations.
5° The board of Enersis S.A. appointed Patricio Claro Grez as the Financial Expert of the Audit Committee.
ADRs - Exchange Control Approval former Chapter X XVI
As established in articles 9 and 10.2 of Law 18,045, General Rule No.30 of the SVS and Resolution 1,228 of May 23,
2007, of the general management of Banco Central de Chile (the Chilean central bank), the following is reported:
1. The council of the Banco Central de Chile adopted Resolution No.1333-01-070510, which interpreted the provisions
of former Chapter XXVI of the exchange control regulations of the Banco Central de Chile (derogated in April
2001), to extend its guarantees of capital increases made by companies that have issued American Depository
Receipts (ADRs) after April 18, 2001; this subject to comply with certain requirements indicated in Resolution
No. 1228 referred to above.
2. On September 24, 2008, Enersis S.A. signed with Banco Central de Chile and Citibank N.A. as depositary
bank, an exchange agreement by which the benefits of former – Chapter XXVI were extended to the total of
24,360,146,365 shares effectively subscribed and paid under the capital increase agreed by the extraordinary
shareholders meeting of Enersis S.A. held on March 31, 2003.
3. This exchange agreement stated that the benefits contemplated in it, with respect to the capital increase agreed
in March 2003 (24,360,146,365 shares), would be subject to the condition that prior to any future capital increase
of Enersis S.A., the Banco Central de Chile is informed about the safeguards adopted in accordance with number
III of Resolution 1,228 referred to, for the purposes of suitably identifying the actions that are covered by existing
exchange regulations, entered into according to former–Chapter XXVI, so that its securities have the necessary
details to distinguish those shares from those that may be issued in future capital increases.
Interim Dividend
On October 29, 2008, the board of Enersis S.A. agreed to distribute on December 19, 2008, an interim dividend
No.78 for Ch$1.53931 per share charged to the net income for 2008, corresponding to 15% of the net income as
of September 30, 2008.
ENDESA Chile
•
On January 25, 2008, in accordance with articles 9 and 10.2 of the Securities Market Law 18,045 and General
Rule No.30 of the SVS, the affíliate company of Endesa Chile, Gasatacama Generación S.A. (GAG), was informed
that day of sentence in the arbitration between the electricity distribution companies, Empresa Eléctrica de Arica
S.A., Empresa Eléctrica de Iquique S.A. and Empresa Eléctrica de Antofagasta S.A. before the arbitrator Ricardo
Peralta, an arbitration in which GAG demanded the termination of the electricity supply contracts signed with
those distributors.
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ANNUAL REPORT
The result of the arbitration was unfavorable for GAG, which aggravated the company’s operative and financial
situation, while it was negotiating with mining companies to finance the deficit it was incurring by serving supply
contracts with the distributor companies, at a node price notably lower than the production cost for GAG, in an
energy scenario on the Northern Electricity Grid marked by a total lack of Argentine natural gas and a diesel oil price
that had risen progressively.
While the sentence is not executed as the possibility of appeal exists due the interposition of legal resources, the
management of GAG had to take legal and business decisions that Chilean law considers for these cases, given the
above operative and financial position.
Endesa Chile would advise in due course the decisions that this affiliate takes, an affiliate in which our company
has an indirect 50% shareholding interest.
• On April 1, 2008, the ordinary and extraordinary shareholders meetings were held to be informed of and
pronounce on the following matters:
Ordinary meeting:
1. Approval of the annual report, financial statements, reports of the external auditors and inspectors of accounts
for the year ended December 31;
2. Distribution of net income and of dividends;
3. Explanation of the company’s dividend policy and information on the procedures to be followed in their
distribution;
4. Investment and financing policy proposed by the board;
5. Election of the board;
6. Setting of directors’ remuneration;
7. Setting of the remuneration for both the Directors and Audit Committees, and determination of their budgets;
8. Report of the Directors’ Committee;
9. Appointment of external auditors;
10. Election of two inspectors of accounts and their alternates and determination of their remuneration;
11. Other matters of corporate interest and of the competence of the meeting and information on the operations
referred to in article 44 of Law 18,046.
Extraordinary meeting
The object of the extraordinary meeting is to know and pronounce on the following matters:
1. Granting of a pledge in favor of certain banks of the shares that Endesa Chile holds in the affíliate company
GNL Quintero S.A., in order to guarantee that company’s obligations in the financing of the liquefies natural
gas project in Quintero.
2. Modify clause 44 of the corporate bylaws to adapt them to the provisions of article 75 of Law 18,046, modified
by Law 20,190 published in the Official Gazette on June 5, 2007.
3. Adopt all the resolutions necessary for complying and carrying out that approved in the above.
As indicated in point 5 of the agenda of the ordinary shareholders meeting, the new board of the company was
elected, being comprised of the following persons:
Pío Cabanillas Alonso
Francesco Buresti
Borja Prado Eulate
Fernando d’Ornellas Silva
Juan Gallardo Cruces
Raimundo Valenzuela Lang
Jaime Estévez Valencia
Leonidas Vial Echeverría
At the extraordinary board meeting held on April 2, 2008, it was agreed to appoint Mario Valcarce Durán as
chairman of the board and of the company, and Juan Gallardo Cruces as vice-chairman.
At the same meeting, it was agreed to appoint Mario Valcarce Durán, Jaime Estévez Valencia and Raimundo
Valenzuela Lang as the members of the Directors’ Committee.
• In April 2, 2008, in accordance with Circular 660, it was reported that the ordinary shareholders meeting held
on April 1, 2008 approved the distribution of a final dividend of Ch$ 11.5647 per share, payable in cash against
the net income for 2007.
The dividend was paid on April 29, 2008, to those on the shareholders register 5 business days prior to that
date.
• On September 29, 2008, the following material information was reported in accordance with articles 9 and 10.2
of the Securities Market Law 18,045 and General Rule No.30 of the SVS:
The legal procedures for the dissolution of the Panamanian subsidiary Compañía Eléctrica Cono Sur S.A. were
completed, a company in which Endesa Chile held a 99.99% shareholding at September 1, 2008, the date of the
extraordinary shareholders meeting of Compañía Eléctrica Cono Sur S.A. which agreed to the dissolution.
Compañía Eléctrica Cono Sur S.A. was an investment company of Endesa Chile in most of the electricity-generation
assets in Peru, Colombia and Brazil, shareholdings that then became directly held by Endesa Chile.
ANNUAL REPORT
This corporate restructuring by the dissolution of this investment vehicle will have an estimated negative impact
on the results for 2008 of Ch$ 14,269,000 million approximately, with respect to taxes in Chile and some of the
above-mentioned jurisdictions, which will be compensated by the use of the tax credits paid abroad that benefit
dividends that will be received directly by Endesa Chile, to the extent that it complies with the requirements of the
Income Tax Law for having rights to such benefit. This fiscal credit is estimated to be Ch$ 43,132,000 approximately
for the period 2009 - 2012.
• On October 29, 2008, in accordance with articles 9 and 10.2 of the Securities Market Law 18,045 and General
Rule No.30 of the SVS, it was reported as material information that the board meeting of Endesa Chile held on
October 29, 2008, agreed, in line with the board’s current dividend policy, to distribute on December 18, 2008,
an interim dividend of Ch$ 5.3512 per share charged to the net income for 2008, which corresponded to 15%
of the net income as of September 30, 2008.
PEHUENCHE
• On March 31, 2008, the ordinary shareholders’ meeting was held to be informed of and pronounce on the
following matters:
1. Approval of the annual report, financial statements, report of external auditors for year ended December 31;
2. Distribution of net income and dividends;
3. Explanation of the company’s dividend policy and information on the procedures to be followed in their
distribution;
4. Election of the board;
5. Setting of directors’ remuneration;
6. Setting of the remuneration of the Directors’ Committee, and determination of its budget;
7. Report of the Directors’ Committee;
8. Appointment of external auditors;
9. Other matters of corporate interest and of the competence of the meeting and information on the operations
referred to in article 44 of Law 18,046.
As indicated in point 4 of the agenda of the ordinary shareholders meeting, the new board of the company was
elected, being comprised of the following persons:
Claudio Iglesis – Chairman
Alan Fischer – Vice chairman
Pedro Gatica – Director
Enrique Lozán – Director
Osvaldo Muñoz – Director
Alejandro García – Director
Daniel Bortnik – Director
• On June 27, 2008, in accordance with Circular 660, the board of the company, at its meeting of June 26, 2008,
approved the distribution of a first interim dividend for the year 2008 amounting to Ch$ 43.86 per share.
This interim dividend was paid on July 23, 2008, to those shareholders registered 5 business days prior to the
previously mentioned date.
The publication of the corresponding notification was made on July 11, 2008, in the El Mercurio newspaper of
Santiago.
• On September 26, 2008, in accordance with SVS Circular 660, the board of the company at its meeting of
September 25, 2008, approved the distribution of a second interim dividend for the year 2008 amounting to
Ch$ 79.90 per share. This interim dividend was paid on October 22, 2008, to those shareholders registered 5
business days prior to the previously mentioned date.
The publication of the corresponding notification was made on October 10, 2008 in the El Mercurio newspaper
of Santiago.
• On December 19, 2008, in accordance with Circular 660, the board of the company, at its meeting of December
18, 2008, approved the distribution of a third interim dividend for the year 2008 amounting to Ch$ 93.28 per
share. This interim dividend was paid on January 14, 2009, to those shareholders registered 5 business days
prior to that date.
The publication of the corresponding notification was made on December 26, 2008, in the El Mercurio newspaper
of Santiago.
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ANNUAL REPORT
UNCONSOLIDATED FINANCIAL STATEMENTS
ANNUAL REPORT
[ Contents ]
ACCOUNT INSPECTORS’ REPORT 226
INDEPENDENT ACCOUNTANT’S REPORT 227
UNCONSOLIDATED BALANCE SHEETS
228
UNCONSOLIDATED STATEMENTS OPERATIONS
229
UNCONSOLIDATED STATEMENTS OF CASH FLOWS
229
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
230
MANAGEMENT’S ANALYSIS OF THE UNCONSOLIDATED FINANCIAL STATEMENTS
249
225
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enersis08
ANNUAL REPORT
ACCOUNT INSPECTORS’ REPORT
In accordance with the stipulations of law N° 18.046 and in compliance with the mandate conferred by the General
Ordinary Shareholders Meeting held on April, 1st 2008, we have proceeded to examine the Financial Statements of
Enersis S.A. for the fiscal year starting January 1st, 2008 and ending on December 31st, 2008.
Our work was focused on the verification, on a selective basis, of the coincidence between the figures expressed on
the financial statements and those in the official registers of the Company. In order to do so, we compared the figures
presented in the ledger with the grouping and classification spreadsheets in order to subsequently verify that these
amounts, which represented the totals of the accounts under one item, coincided with those included in the financial
statements. We have no observations on this review.
Roberto Lausen Kuhlmann
Account Inspector
Santiago, January 26, 2009
Luis Bone Solano
Account Inspector
ANNUAL REPORT
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ANNUAL REPORT
ENERSIS S.A.
ENERSIS S.A.
Chilean pesos as of December 31, 2008)
ASSETS
CURRENT ASSETS
Cash
Time deposits
Other accounts receivable, net (Note 4)
Amounts due from related companies (Note 5)
Income taxes recoverable (Note 6)
Prepaid expenses
Deferred income taxes (Note 6)
Other current assets (Note 7)
As of December 31,
2008
2007
ThCh$
ThCh$
18,413,130
37,626,269
1,457,865
10,214,017
17,334,174
75,433
8,168,576
62,282,303
195,303
14,475,077
1,797,206
204,971,858
13,302,323
7,004
20,943,180
79,541,586
Total current assets
155,571,767
335,233,537
Buildings and infrastructure and work in progress
Machinery and equipment
Other plant and equipment
Technical appraisal
Accumulated depreciation
26,378,458
3,644,065
717,885
41,903
(20,096,399)
26,378,649
3,603,558
938,326
41,957
(18,918,643)
Total property, plant and equipment, net (Note 8)
10,685,912
12,043,847
OTHER ASSETS
Investments in related companies (Note 9)
Investments in other companies
Goodwill, net (Note 10)
Negative goodwill, net (Note 10)
Amounts due from related companies (Note 5)
Intangibles
Accumulated amortization
Other assets (Note 11)
3,285,141,637
15,770,517
618,796,082
(437,884)
320,464,689
1,823,387
(993,883)
4,931,396
2,679,366,514
12,611,945
681,473,767
(425,165)
356,860,601
23,148,758
1,823,387
(902,541)
64,577,561
Total other assets
4,245,495,941
3,818,534,827
TOTAL ASSETS
4,411,753,620
4,165,812,211
The accompanying notes are an integral part of these financial statements.
LIABILITIES AND SHAREHOLDERS´EQUITY
Short-term debt due to banks and financial institutions (Note 12)
Current portion of long-term debt due to banks and financial institutions (Note
12)
Current portion of bonds payable (Note 15)
Dividends payable
Accounts payable
Miscellaneous payables
Amounts payable to related companies (Note 5)
Accrued expenses (Note 16)
Withholdings
Income taxes payable
Other current liabilities (Note 13)
As of December 31,
2008
2007
ThCh$
ThCh$
34,136,613
-
95,694,484
10,597,279
387,478
252,397
471,578
13,342,680
7,139,463
6,041,425
392,418
1,952,557
915,418
9,326,592
421,964
223,558
379,238
176,680,300
5,489,198
344,543
132,058
2,341,594
Total current liabilities
170,408,372
196,254,463
LONG-TERM LIABILITIES:
Due to banks and financial institutions (Note 14)
Bonds payable (Note 15)
Miscellaneous payables
Accrued expenses (Note 16-17)
Other long-term liabilities (Note 18)
417,553,588
25
18,015,514
1,101,865
107,461,444
189,389,624
362,156,896
33,756,690
222,659,249
Total long-term liabilities
544,132,436
807,962,459
SHAREHOLDERS´ EQUITY:
Paid-in capital, no par value
Additional paid-in capital
Other reserves
Retained earnings
Net income for the year
Interim dividends
2,824,882,834
201,314,070
(339,568,470)
490,313,366
570,883,101
(50,612,089)
2,824,882,834
201,314,070
(474,250,155)
423,601,980
205,141,910
(19,095,350)
Total shareholders´ equity (Note 19)
3,697,212,812
3,161,595,289
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY
4,411,753,620
4,165,812,211
ANNUAL REPORT
ENERSIS S.A.
UNCONSOLIDATED STATEMENTS OF OPERATIONS
ENERSIS S.A.
OPERATING INCOME:
SALES
COST OF SALES
2008
2007
ThCh$
ThCh$
5,447,414
(1,714,126)
5,456,592
(1,634,571)
3,733,288
3,822,021
ADMINISTRATIVE AND SELLING EXPENSES
(23,476,673)
(21,870,852)
OPERATING INCOME
(19,743,385)
(18,048,831)
NON-OPERATING INCOME AND EXPENSE:
Interest income
Equity in income of related companies (Note 9)
Other non-operating income (Note 20)
Equity in loss of related companies (Note 9)
Amortization of goodwill (Note 10)
Interest expense
Other non-operating expenses (Note 20)
Price-level restatement, net (Note 21)
Exchange difference, net (Note 22)
35,875,802
652,727,068
8,140,013
(7,233,061)
(63,598,254)
(55,174,610)
(11,734,274)
(10,945,606)
61,868,900
39,177,200
317,020,474
13,591,921
(10,660)
(63,504,580)
(59,450,542)
(956,171)
(6,895,058)
(21,291,132)
NON-OPERATING EXPENSE, NET
609,925,978
217,681,452
GROSS PROFIT
INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND
AMORTIZATION OF NEGATIVE GOODWILL
590,182,593
199,632,621
INCOME TAXES (Note 6)
(19,346,993)
5,465,965
INCOME (LOSS) BEFORE AMORTIZATION OF NEGATIVE
GOODWILL
570,835,600
205,098,586
47,501
43,324
570,883,101
205,141,910
AMORTIZATION OF NEGATIVE GOODWILL (Note 10)
NET INCOME FOR THE YEAR
2008
2007
ThCh$
ThCh$
Depreciation
Amortization of intangibles
Equity in income of related companies
Equity in loss of related companies
Amortization of goodwill
Amortization of negative goodwill
Price-level restatement, net
Exchange difference, net
Other credits to income which do not represent cash flows
Other charges to income which do not represent cash flows
Changes in assets which affect operating cash flows:
Decrease (increase) in other assets
Changes in liabilities which affect operating cash flows:
Increase (decrease) in accounts payable associated with operating results
Increase (decrease) in interest payable
Increase (decrease) in income tax payable
Increase (decrease) in other accounts payable associated with operating
results
Net (increase) in value added tax and other similar taxes payable
Net cash flows provided by operating activities
570,883,101
205,141,910
(624,947,115)
1,649,119
91,341
(652,727,068)
7,233,061
63,598,254
(47,501)
10,945,606
(61,868,900)
6,178,973
(228,166,486)
1,575,335
91,341
(317,020,474)
10,660
63,504,580
(43,324)
6,895,058
21,291,132
(5,512,124)
1,041,330
266,017,692
181,486,847
(6,420,961)
(33,600,712)
27,206,542
(2,736,571)
12,994,359
(2,735,302)
(6,769,333)
3,124,478
(5,038,988)
1,094,607
195,493,692
162,040,376
Proceeds from the issuance of debt
Proceeds from the issuance of debt obtained from related companies
Other sources of financing (Note 23)
Distribution of capital in subsidiary
Dividends paid
Payment of loans
Payment of bond issuance costs
Payment of loans obtained from related companies
Other disbursements for financing
34,081,000
1,599,712
1,783,600
(87,332,493)
(66,715,680)
(108,122,594)
(1,626,176)
(119,974,014)
(24,759,292)
21,684,768
44,975,163
(111,847,890)
(91,115,365)
(1,675,031)
-
Net cash used in financing activities
(371,065,937)
(137,978,355)
229
230
enersis08
ANNUAL REPORT
ENERSIS S.A.
ENERSIS S.A.
NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS
2008
2007
ThCh$
ThCh$
Other receipts from investments (Note 23)
Payments received from notes receivable from related companies
Payments received from other loans to related companies
Long-term investments in related companies
Other loans to related companies
Additions to property, plant and equipment
Other investment disbursements (Note 23)
31,849,336
196,458,862
5,242,995
(11,201)
(268,993)
-
3,159,947
73,434,627
(284,048)
(24,298,228)
(614,594)
(24,359,230)
Net cash used in investing activities
233,270,999
27,038,474
POSITIVE (NEGATIVE) NET CASH FLOW FOR THE
PERIOD
57,698,754
51,100,495
EFFECT OF PRICE-LEVEL RESTATEMENT ON CASH AND
CASH EQUIVALENTS
(6,734,597)
(957,545)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
50,964,157
50,142,950
CASH AND CASH EQUIVALENTS AT BEGINNING OF
THE YEAR
65,561,063
15,418,113
116,525,220
65,561,063
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31,
2008)
As of and for the years ended December 31, 2008 and 2007
NOTE 1.
REGISTRATION IN THE SECURITIES REGISTER
Enersis S.A. (the “Company”) is registered in the Securities Register under No.0175 and is regulated by the Chilean
Superintendency of Securities and Insurance (the “SVS”). The Company issued publicly registered American Depositary
Receipts in 1993 and 1996. Enersis S.A. is a reporting company under the United States Securities and Exchange Act of
1934.
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Years covered - These financial statements reflect the Company’s financial position, the results of its operations, and
its cash flows for the years ended December 31, 2008 and 2007.
b. Basis of preparation – The financial statements of the Company have been prepared in accordance with generally
accepted accounting principles in Chile and the regulations established by the SVS (collectively “Chilean GAAP”),
except for investments in subsidiaries, which are shown as a single line item of the balance sheet under the equity
method and, therefore, have not been consolidated line by line. This treatment does not affect the net income of the year
or shareholders’equity.
These financial statements have only been prepared for stand-alone analysis of the Company and tshould be read in
conjunction with the consolidated financial statements required by generally accepted accounting principles in Chile.
On May 28, 2008, the Board of Directors of Enersis S.A., agreed to terminate Enersis S.A.’s agency established in the
Grand Cayman Islands, which was ended on December 31, 2008.
These financial statements include results of the agency established in 1996 by Enersis S.A. in the Cayman Islands
which was deresgistred on December 31, 2008..
c. Comparative financial statements - For comparative purposes, the 2006 and 2007 consolidated financial statements
and the amounts disclosed in the related Notes have been restated in terms of the purchasing power of Chilean pesos as
of December 31, 2008.
This updating does not change the prior years’ statements or information in any way except to update the amounts to
constant Chilean pesos of similar purchasing power.
d. Constant currency restatement - The cumulative inflation rate in Chile as measured by the Chilean Consumer Price
Index (“CPI”) for the three-year period ended December 31, 2008 was approximately 18.4%. Chilean GAAP requires
that the financial statements be restated to reflect the full effects of gain or loss in the purchasing power of the Chilean
peso in the financial position and results of operations of reporting entities.
The financial statements of the Company have been price-level restated in order to reflect the effects of the changes in
the purchasing power of the Chilean currency during each year. All non-monetary assets and liabilities, equity and
income statement accounts have been restated to reflect the changes in the CPI from the date they were acquired or
incurred to year-end. The effects of such restatements are shown in Note 21.
e. Assets and liabilities in foreign currencies - Assets and liabilities denominated in foreign currencies have been stated
at the observed exchange rates reported by the Central Bank of Chile as of each December 31, as follows:
:
that the financial statements be restated to reflect the full effects of gain or loss in the purchasing power of the Chilean
peso in the financial position and results of operations of reporting entities.
The financial statements of the Company have been price-level restated in order to reflect the effects of the changes in
the purchasing power of the Chilean currency during each year. All non-monetary assets and liabilities, equity and
income statement accounts have been restated to reflect the changes in the CPI from the date they were acquired or
incurred to year-end. The effects of such restatements are shown in Note 21.
e. Assets and liabilities in foreign currencies - Assets and liabilities denominated in foreign currencies have been stated
at the observed exchange rates reported by the Central Bank of Chile as of each December 31, as follows:
:
December 31,
2008
2007
Ch$
Ch$
United States dollar
Euro
Unidad de Fomento (UF= Inflation index-linked unit of account)
636.45
496.89
898.81
730.94
21,452.57 19,622.66
f. Time Deposits- Time deposits are presented at original placement plus accrued interest and UF indexation
adjustments, as applicable at each year end.
g. Property, Plant and Equipment – Property, plant and equipment are valued at net replacement cost as determined
by the former Superintendence of Electric and Gas Services (SEG) adjusted for price-level restatement in accordance
with D.F.L. No.4 of 1959. The latest valuation under the D.F.L. 4 was in 1980.
Investments in foreign affiliates are recorded in accordance with Technical Bulletin No.64 of the Chilean Association of
Accountants. Under Technical Bulletin No.64 of the Chilean Association of Accountants, investments in foreign
subsidiaries are price-level restated, the effects of which are reflected in income, while the effects of the foreign
ANNUAL REPORT
exchange gains or losses between the Chilean peso and the US dollar on the foreign investment measured in US dollars,
are reflected in equity in the account “Cumulative Translation Adjustment”.
amount of the investment. In the case the fair value is less than the carrying value and such decline in value is
considered to be other than temporary, a write down is recorded. As indicated in Note 9a, during the year ended
December 31, 2007 the Company recorded an impairment of its investment in Inversiones Gas Atacama Holding
Limitada amounting to ThCh$53,241,631 as a result of an other-than-temporary impairment of the investment. The
impairment charge includes a write down of the investment to its recoverable value and an impairment of goodwill
which was recorded over the investment.
k. Investments in other companies - Investments in other companies are presented at acquisition cost adjusted for
price-level restatement as they do not trade in an organized market and because the Company does not exercise
significant influence. The Company´s investment corresponds to the Company´s 1.41% participation in Empresa de
Energía de Bogotá.
In 1986, an increase based upon a technical appraisal of property, plant and equipment was recorded in the manner
authorized by the SVS in Circulars No.’s 550 and 566 dated October 15 and December 16, 1985, respectively, and
Communication No.4790, dated December 11, 1985.
l. Goodwill and negative goodwill - Goodwill and negative goodwill are determined according to Circular No.1697 of
the SVS (which revoked Circular N°368 on December 30, 2003). The effect in results by Amortization is determined
using the straight-line method, considering the nature and characteristic of each investment, foreseeable life of the
business and investment return, not to exceed 20 years.
Under Technical Bulletin Bulletin No. 33, the Company is required to evaluate the recoverability of its property, plant
and equipment when certain indicators of impairment exist. The Company has not identified any impairment to property,
plant and equipment as a result of applying Technical Bulletin No. 33.
The Company evaluates the recoverability of its goodwill and negative goodwill value arising from investments abroad
as stipulated in Technical Bulletin No.72 of the Chilean Association of Accountants. The Company has not identified
any impairment as a result of that evaluation.
h. Depreciation – Depreciation expense is calculated on the revalued balances using the straight-line method over the
estimated useful lives of the assets. Depreciation expense was ThCh$1,649,119 and ThCh$1,575,335 in 2008 and 2007,
respectively.
m. Reverse repurchase agreements - Reverse repurchase agreements are stated at cost plus interest and indexation
accrued at year-end, in conformity with the related contracts.
i. Intangibles, other than goodwill - Intangible assets are recorded at acquisition cost and are subsequently price-level
restated. Such assets are amortized over their estimated useful lives, not to exceed twenty years in accordance with
Technical Bulletin N°55 of the Chilean Institute of Accountants. Intangibles correspond mainly to easements and rights
of way.
j. Investments in related companies - The Company classifies an investment as an investment in a related company
when it has the ability to exercise significant influence over the operations of such company. Investments in related
companies are included in “Other assets” using the equity method. This accounting method recognizes the Company’s
proportionate share in the net income or loss of each investee on an accrual basis in income.
Investments in foreign affiliates are recorded in accordance with Technical Bulletin No.64 of the Chilean Association of
Accountants. Under Technical Bulletin No.64 of the Chilean Association of Accountants, investments in foreign
subsidiaries are price-level restated, the effects of which are reflected in income, while the effects of the foreign
exchange gains or losses between the Chilean peso and the US dollar on the foreign investment measured in US dollars,
are reflected in equity in the account “Cumulative Translation Adjustment”.
amount of the investment. In the case the fair value is less than the carrying value and such decline in value is
considered to be other than temporary, a write down is recorded. As indicated in Note 9a, during the year ended
December 31, 2007 the Company recorded an impairment of its investment in Inversiones Gas Atacama Holding
Limitada amounting to ThCh$53,241,631 as a result of an other-than-temporary impairment of the investment. The
impairment charge includes a write down of the investment to its recoverable value and an impairment of goodwill
which was recorded over the investment.
n. Bonds - Bonds payable are recorded at the face value of the bonds. The difference between the face value and the
placement value, equal to the premium or discount, is deferred and amortized over the term of the bonds.
o. Income tax and deferred income taxes - The Company records deferred income taxes in accordance with Technical
Bulletin No.60 of the Chilean Association of Accountants, and with Circular No.1466 issued on January 27, 2000 by the
SVS, using the liability method, recording deferred income taxes for effects of temporary differences between the book
and tax bases of assets and liabilities. Deferred income taxes are calculated using tax rates estimated to be in effect at the
time of reversal of the temporary differences that gave rise to them.
p. Severance indemnities - The Company is obligated to pay its employees severance indemnities under collective
bargaining agreements. Such indemnity is stated at the present value of the benefit under the vested cost method,
discounted at 6.5% assuming an average employment span which varies based upon years of service with the Company.
q. Accrued vacation expense - In accordance with Technical Bulletin No.47 issued by the Chilean Association of
Accountants, employee vacation expense is recorded on an accrual basis.
r. Pension and post-retirement benefits - Pension and post-retirement benefits are recorded based on actuarially
determined projected benefit obligations in accordance with the respective collective bargaining contracts of employees,
using an annual discount rate of 6.5%.
231
Accounts
232
Other receivables
Accounts
enersis08
s. Revenue recognition – The Company recognizes revenues for amounts received from substations rental and electrical
distribution lines in accordance with contracts in place with Chilectra S.A. These amounts are presented in current assets
as amounts due from related companies and the corresponding cost is included in cost of sales as depreciation of the
equipment and electrical installations in question.
t. Financial derivative contracts – As of December 31, 2008, and 2007 the Company has forward contracts, currency
swaps, and interest rate swaps and collars with several financial institutions. Such contracts are mainly utilized by the
Company to hedge against foreign currency and interest risk exposures, which are recorded according to Technical
Bulletin No.57 of the Chilean Association of Accountants. If the derivative foreign exchange contract qualifies for hedge
accounting, it is recorded at estimated fair value, with the corresponding gain or loss deferred as an offsetting asset or
liability until settlement, at which time it is recognized in earnings as "Other non-operating income and expense".
u. Computer software – Computer software has been acquired by the Company as computing packages and is
presented as part of other fixed assets. Computer software is amortized over 4 years.
v. Research and development costs – During the years ended December 31, 2008 and 2007 there have been no
research and development expenses incurred which require footnote disclosure as required by Circular N°1.819 of SVS
dated November 14, 2006.
w. Statement of cash flows - Investments considered as cash equivalents, as indicated in point 6.2 of Technical Bulletin
No.50 issued by the Chilean Association of Accountants, include cash, time deposits and repurchase agreements
classified as other current assets.
For classification purposes, cash flows from operations include collections and payments to related companies for
services and dividens paid.
x. Reclassifications – No reclassifications have been made in the December 31, 2007 financial statements.
CHANGES IN ACCOUNTING PRINCIPLES
There were no changes in accounting principles during the year ended December 31, 2008 that would affect the
comparison with the prior year financial statements.
NOTE 4.
SHORT AND LONG-TERM ACCOUNTS, NOTES AND OTHER RECEIVABLES
Current and long-term accounts, notes and other receivables and their related allowances for doubtful accounts as of
respective December 31, are as follows:
As of December 31,
91 days to 1 year
Total Current
2008
2007
2008
2007
Under 90 days
2008
2007
Account
ThCh$
ThCh$
ThCh$
ThCh$
ThCh$
2008
ThCh$
Long term
ThCh$
2007
ThCh$
Account receivable
Accounts
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes receivables
Accounts
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other receivables
Accounts
421,517
292,622
1,036,348
1,504,584
1,457,865
1,797,206
-
-
-
-
-
-
-
-
-
-
1,457,865
1,797,206
-
-
Total
NOTE 5.
-
-
-
-
-
-
-
292,622
1,036,348
1,504,584
1,457,865
1,797,206
-
-
-
-
-
-
-
-
-
-
1,457,865
1,797,206
-
-
Total
ANNUAL REPORT
NOTE 3.
421,517
BALANCE AND TRANSACTIONS WITH RELATED COMPANIES
NOTE 5.
BALANCE AND TRANSACTIONS WITH RELATED COMPANIES
a. Notes and accounts receivable due from related companies:
As of December 31,
Short-term
Long-term
2008
2007
2008
2007
ThCh$
ThCh$
ThCh$
ThCh$
Rut
Company
96.800.570-7
96.529.420-1
79.913.810-7
96.543.670-7
Foreign
96.764.840-k
Foreign
Foreign
Foreign
91.081.000-6
96.588.800-4
96.671.360-7
96.588.800-4
96.770.940-9
96.671.360-7
Foreign
96.770.940-9
Foreign
Foreign
96.773.290-7
Foreign
96.783.220-0
96.773.290-7
Foreign
96.783.220-0
Foreign
Foreign
76.313.310-9
Foreign
76.313.310-9
Total
Total
Chilectra S.A.
Synapsis, Soluciones y Servicios IT Ltda.
Inmobiliaria Manso de Velasco Ltda
Cía. Americana de Multiservicios Ltda.
Chilectra S.A. (Agencia en Islas Caymán)
Construcciones y Proyectos Los Maitenes S.A.
Edesur S.A.
Luz de Rio Ltda. (*)
Endesa
S.A.S.A.
(Chile)
Ingendesa
(Chile)
Túnel el Melón
S.A.
Ingendesa
S.A. (Chile)
Compañía
Eléctrica
Túnel
el Melón
S.A. Tarapacá S.A. (Celta)
Endesa S.A.
(España)
Compañía
Eléctrica
Tarapacá S.A. (Celta)
EndesaS.A.
Latinoamérica
Endesa
(España) S.A.
Aguas
Poniente
S.A.
EndesaSantiago
Latinoamérica
S.A.
Compañía
Eléctrica
San Isidro
Aguas
Santiago
Poniente
S.A. S.A.
Endesa Brasil
S.A. San
(*) Isidro S.A.
Compañía
Eléctrica
Endesa Brasil
S.L. S.A. (*)
Endesa
Endesa Eco
S.L. S.A.
Endesa Eco S.A.
4,838,760
98,981
82,126
298,886
1,006
1,109,522
8,441
245,673
5,159
1,873
5,159
18,909
1,873
13,611
18,909
219,494
13,611
219,494344
3,267,379
344
3,853
3,267,379
3,85310,214,017
10,214,017
8,816,176
67,331
85,441
402,659
1,463,791
1,096
151,674,399
9,192
41,603,864
232,912
9,626
600
9,626
31,558
600
297,106
31,558
231,385
297,106
28,859
231,385
375
28,859
375-15,488
15,488
204,971,858
204,971,858
320,464,689
----------320,464,689
320,464,689
86,271,420
270,589,181
----------356,860,601
356,860,601
(*) On December 2, 2008 the credit maintained with Luz de Rio Ltda. was capitalized. On December 17, 2008 the
(*)
On December
credit
maintained
withwas
Luzapproved.
de Rio Ltda.
capitalized.
On balance
December
2008
merger
of Luz del 2,
Rio2008
Ltda.theand
Endesa
Brasil S.A.
As a was
result,
the remaining
due17,
from
Luzthe
de
merger
of Luz
del Rio Ltda. and
Endesa
Brasil to,
S.A.and
was
As a result,
remaining
from Luz 31,
de
Rio Ltda.
of USD$5,133,756
was
transferred
hasapproved.
been included
as duethefrom,
Endesabalance
Brasil due
at December
Rio
Ltda.
USD$5,133,756
was transferred to, and has been included as due from, Endesa Brasil at December 31,
2008.
Seeofnote
9 for further information.
2008. See note 9 for further information.
b.
b.
Rut
Rut
Company
Company
96.800.570-7
96.529.420-1
96.800.570-7
79.913.810-7
96.529.420-1
96.543.670-7
79.913.810-7
Foreign
96.543.670-7
91.081.000-6
Foreign
Foreign
91.081.000-6
96.526.450-7
Foreign
96.526.450-7
Total
Total
Chilectra S.A.
Synapsis,S.A.
Soluciones y Servicios IT Ltda.
Chilectra
Inmobiliaria
Manso deVelasco
Synapsis,
Soluciones
y ServiciosS.A.
IT Ltda.
Cía. Americana
de Multiservicios
Inmobiliaria
Manso
deVelasco S.A.Ltda.
Ampla
Energía de Multiservicios
Serviços S.A. Ltda.
Cía.
Americana
EndesaEnergía
S.A. (Chile)
Ampla
de Serviços S.A.
Edesur S.A.
S.A. (Chile)
Endesa
EndesaS.A.
Inversiones Generales S.A.
Edesur
As of December 31,
Short-termAs of December 31,
Long-term
Long-term2007
2008 Short-term2007
2008
ThCh$
ThCh$
ThCh$
ThCh$
2008
2007
2008
2007
ThCh$
ThCh$
ThCh$
ThCh$
338,311
397,489
2,810,889
1,166,450
338,311
397,489
-4,260,095
27,623,122
2,810,889
1,166,450
-5,583,670
10,557,410
4,260,095
27,623,122
-136,834,161
5,583,67010,557,410
-79,00485,685
136,834,161
-12,422
13,528
79,004
85,685
-258,289
2,455
12,422
13,528
-258,289
2,455
13,342,680
176,680,300
13,342,680
176,680,300
-
c. Significant related company transactions and their effects in income (expense) for each year ended
c.December
Significant
company transactions and their effects in income (expense) for each year ended
31 arerelated
as follows:
December 31 are as follows:
--------
96.543.670-7
Foreign
91.081.000-6
Foreign
96.526.450-7
Ampla Energía de Serviços S.A.
Endesa S.A. (Chile)
Edesur S.A.
Total
5,583,670
79,004
12,422
258,289
10,557,410
136,834,161
85,685
13,528
2,455
-
-
13,342,680
176,680,300
-
-
Rut
c. Significant related company transactions and their effects in income (expense) for each year ended
December 31 are as follows:
2008
Nature of
transaction
Income
(Expense)
ThCh$
2007
96,800,570-7
Affiliate
Inmobiliaria Manso de
Velasco Ltda.
Loans
Property rental
Services
2,166,654
5,447,414
4,099,423
1,545,080
5,447,414
4,099,423
94,075,860
5,456,592
4,096,670
4,720,309
5,456,592
4,096,670
79.913.810-7
Affiliate
Loans
Property rental
Services
(4,142,986)
(364,579)
248,396
(3,700,245)
(364,579)
248,396
(27,365,675)
(499,909)
234,592
(1.220.966)
(499,909)
234,592
96.543.670-7
Affiliate
Synapsis, Soluciones y
Servicios IT Ltda.
Loans
Services
Property maintenance
Materials
(5,323,646)
375,000
-
(916,266)
375,000
-
(10,343,723)
428,401
(64,984)
(188)
(266,776)
428,401
(65,082)
(188)
96.529.420-1
Affiliate
Empresa Distribuidora Sur
Ltda.
Endesa S.A. (Chile)
Loans
Services
(2,571,495)
(416,570)
(151,275)
(416,570)
(1,091,533)
(447,757)
209,481
(447,757)
Foreign
91.081.000-6
Affiliate
Affiliate
Services
Loans
Services
16,513
1,016,490
98,667
1,016,490
87,369
10,182
904,929
87,369
1,104,541
904,929
96.773.290-7
96,588,800-4
Parent company
Parent company
Advices
Services
25,974
4,229
25,974
4,229
87,641
293
87,641
293
96.526.450-7
Parent company
Property rental
(1,247,232)
(1,247,232)
(1,173,749)
(1,173,749)
Foreign
Foreign
Agency of
affiliate
Parent company
Loans
Loans
320,464,689
31,308,138
16,659,950
2,334,440
270,589,181
25,405,266
18,354,774
2,683,333
Loans
(12,648,233)
604,495
(10,818,358)
(1,341,585)
Loans
-
37,444
-
-
Transfers of short-term funds between related companies are treated as current cash transactions, with associated
variable interest rates based on market conditions. The resulting accounts receivable and accounts payable are essentially
on 30 day terms, with automatic rollover for the same year and settlement in line with cash flows.
In relation to the long-term receivables, terms and forms of payment are as follows:
Account receivable
2010
333,910,411.39
US$
Chilectra S.A.
Account receivable
2010
169,608,622.45
US$
Company
Type
due date
Capital
currency
Interest
rate
96.800.570-7
Chilectra S.A.
Account receivable
2010
333,910,411.39
US$
7.01%
96.800.570-7
Chilectra S.A.
Account receivable
2010
169,608,622.45
US$
3.95%
INCOME TAX AND DEFERRED INCOME TAXES
General information:
a.
7.01%
3.95%
ANNUAL REPORT
233
Income taxes (recoverable) payable as of each year-end are as follows:
As of December 31,
2008
2007
ThCh$
ThCh$
Credits for absorbed profits
Value added tax
Recoverable tax credits
17,166,343
135,924
31,907
13,185,335
113,721
3,267
Total
17,334,174
13,302,323
b.
Tax loss carryforwards - As of December 31, 2008 and 2007, the Company had tax loss carryforwards of
ThCh$51,560,179 and ThCh$314,047,329, respectively.
c.
In accordance with BT No.60 and 69 of the Chilean Institute of Accountants, and Circular N°1,466 of the SVS, the
Company has recorded deferred income taxes as of December 31, 2008 and 2007 as follows:
Asset
Liability
Short-term Long-term Short-term Long-term
ThCh$
ThCh$
ThCh$
ThCh$
Income taxes (recoverable) payable as of each year-end are as follows:
As of December 31,
Asset
Liability
Short-term Long-term Short-term Long-term
ThCh$
ThCh$
ThCh$
ThCh$
Vacation accrual
Fixed assets depreciation
Accrued expenses
Bond discount
Deferred charges
Tax losses
Other events
Complementary account-net
152,638
1,034,769
6,953,317
187,656
-
538,333
137,380
-
135
159,669
-
799,852
172,321
844,696
80,161
677
(120,129)
144,880
695,363
20,102,312
172,191
-
25,528,497
152,402
-
147
162,608
8,731
-
1,365,792
150,873
1,009,258
138,959
737
(133,478)
Total
8,328,380
675,713
159,804
1,777,578
21,114,666
25,680,899
171,486
2,532,141
Current tax (net)
Long-term tax (net)
d.
As of December 31,
2008
ThCh$
2007
ThCh$
8,168,576 20,943,180
(1,101,865) 23,148,758
Income tax benefit (expense) for the years ended December 31, 2008 and 2007 is as follows:
Item
NOTE 6.
rate
INCOME TAX AND DEFERRED INCOME TAXES
Assets (liabilities)
Rut
Chilectra S.A.
Description
Affiliate
Agency of
affiliate
currency
96.800.570-7
a.
Chilectra S.A.
Foreign
Capital
Income
(Expense)
ThCh$
Relationship
Foreign
due date
General information:
RUT
Throught agencies:
Chilectra S.A. (agency in
Cayman Islands)
Luz de Rio Ltda.
Ampla Energía de Serviços
S.A.
Endesa S.A. (agency in
Cayman Islands)
Amount
ThCh$
Type
96.800.570-7
NOTE 6.
Company
Aguas Santiago Poniente
S.A.
Ingendesa S.A.
Endesa Inversiones
Generales S.A.
Amount
ThCh$
As of December 31,
Company
Deferred tax
Tax expenses art. 21
Adjustment for tax expense- prior year
Tax-loss benefits
Amortization of complementary accounts of deferred
assets and liabilities
As of December 31,
2008
2007
ThCh$
ThCh$
(33,419,314)
(164,239)
521,356
14,878,873
(5,468,219)
(341,858)
1,454,216
11,139,316
(2,439)
(3,230)
234
2008
ThCh$
enersis
Current
tax 08
(net)
ANNUAL tax
REPORT
Long-term
(net)
d.
Guarantee deposits (see note 25a)
Reverse repurchase agreements (*)
Others
As of December 31,
Assets (liabilities)
2007
ThCh$
8,168,576 20,943,180
(1,101,865) 23,148,758
Total
(*) Details of reverse repurchase agreements are as follows:
Income tax benefit (expense) for the years ended December 31, 2008 and 2007 is as follows:
Deferred tax
Tax expenses art. 21
Adjustment for tax expense- prior year
Tax-loss benefits
Amortization of complementary accounts of deferred
assets and liabilities
Valuation allowance
Total (loss) income tax expense
NOTE 7.
(33,419,314)
(164,239)
521,356
14,878,873
(5,468,219)
(341,858)
1,454,216
11,139,316
(2,439)
(1,161,230)
(3,230)
(1,314,260)
(19,346,993)
5,465,965
Total
(*) Details of reverse repurchase agreements are as follows:
Code
Start
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
16-12-2008
18-12-2008
18-12-2008
29-12-2008
29-12-2008
30-12-2008
30-12-2008
30-12-2008
End
05-01-2009
05-01-2009
05-01-2009
13-01-2009
13-01-2009
19-01-2009
19-01-2009
19-01-2009
Banco Itau
Banco Estado
Banco Estado
Banco Estado
Banco Estado
BBVA
BBVA
BBVA
803,957
796
980,610
60,485,821
11,119
51,358
867
985,303
27,542,662
50,890,682
70,714
62,282,303
79,541,586
Currency
Document
UF
UF
UF
UF
UF
UF
UF
UF
BOND
P.D.B.C
CERO
P.D.B.C
CERO
BOND
CERO
P.D.B.C.
Interest
rate
%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
Total
Code
VRC
VRC
VRC
VRC
VRC
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
End
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
Chile
Crédito
Estado
Santander
CorpBanca
CRV
CRV
CRV
CRV
CRV
CRV
CRV
CRV
16-12-2008
18-12-2008
18-12-2008
29-12-2008
29-12-2008
30-12-2008
30-12-2008
30-12-2008
Currency
UF
UF
UF
UF
UF
Document
L.H.
L.H.
L.H.
L.H.
L.H.
Interest
rate
%
0.46%
0.46%
0.46%
0.46%
0.46%
Current
amount
ThCh$
5,725,122
20,273,362
1,473
13,594,131
4,269
2,514,498
2,950
18,295,753
Nominal
ThCh$
5,748,023
20,340,264
1,442
13,631,514
4,281
2,523,717
2,961
18,362,837
Fair value
ThCh$
5,742,297
20,321,680
1,440
13,599,116
4,271
2,514,959
2,951
18,299,107
60,411,522
60,615,039
60,485,821
Current
Amount
ThCh$
10,562,062
8,294,380
2,881,312
42,246
18,954
Date
End
05-01-2009
05-01-2009
05-01-2009
13-01-2009
13-01-2009
19-01-2009
19-01-2009
19-01-2009
Banco Itau
Banco Estado
Banco Estado
Banco Estado
Banco Estado
BBVA
BBVA
BBVA
Currency
Document
UF
UF
UF
UF
UF
UF
UF
UF
BOND
P.D.B.C
CERO
P.D.B.C
CERO
BOND
CERO
P.D.B.C.
Nominal
ThCh$
10,576,355
8,305,605
2,885,212
42,302
18,980
Date
Start
Interest
rate
%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
0.70%
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
27-12-2007
28-12-2007
28-12-2007
28-12-2007
28-12-2007
28-12-2007
28-12-2007
End
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
03-01-2008
02-01-2008
02-01-2008
07-01-2008
07-01-2008
07-01-2008
07-01-2008
Currency
Chile
Crédito
Estado
Santander
CorpBanca
Central
BBVA Banco BHIF
Central
Chile
Santander
Chile
Crédito
CorpBanca
Central
Central
Chile
Estado
Crédito
Santander
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
UF
Total
2007:
Date
Start
Start
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
VRC
2008:
79,541,586
Current
amount
ThCh$
5,725,122
20,273,362
1,473
13,594,131
4,269
2,514,498
2,950
18,295,753
Nominal
ThCh$
5,748,023
20,340,264
1,442
13,631,514
4,281
2,523,717
2,961
18,362,837
Fair value
ThCh$
5,742,297
20,321,680
1,440
13,599,116
4,271
2,514,959
2,951
18,299,107
60,411,522
60,615,039
60,485,821
2007:
As of December 31,
2008
2007
ThCh$
ThCh$
Fair value of derivative contracts
Deferred expenses
Post-retirement benefits
Bond discount (see note 15d)
Guarantee deposits (see note 25a)
Reverse repurchase agreements (*)
Others
62,282,303
Total
OTHER CURRENT ASSETS
Date
Code
Code
Other current assents are as follows:
27,542,662
50,890,682
70,714
2008:
As of December 31,
2008
2007
ThCh$
ThCh$
Item
60,485,821
11,119
Fair value
ThCh$
10,570,230
8,300,795
2,883,540
42,278
18,969
Document
L.H.
L.H.
L.H.
L.H.
L.H.
CERO
D.P.F
CERO
D.P.R.
D.P.F
D.P.F
D.P.F
D.P.F
CERO
BOND
L.H.
L.H.
L.H.
L.H.
Interest
rate
%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
0.46%
Current
Amount
ThCh$
10,562,062
8,294,380
2,881,312
42,246
18,954
2,656
11,086,190
34,247
1,171,751
2,154,144
1,104,255
2,200,805
957,797
1,876
5,443,124
3,812,466
3,154
884,552
197,181
Nominal
ThCh$
10,576,355
8,305,605
2,885,212
42,302
18,980
2,659
11,101,451
34,293
1,173,335
2,157,060
1,105,749
2,203,783
959,093
1,877
5,448,475
3,819,836
3,159
886,262
197,561
Fair value
ThCh$
10,570,230
8,300,795
2,883,540
42,278
18,969
2,658
11,094,911
34,273
1,172,657
2,155,811
1,105,108
2,202,507
958,538
1,877
5,446,335
3,814,677
3,156
885,066
197,296
50,853,152
50,923,047
50,890,682
ANNUAL REPORT
NOTE 8.
Property, plant and equipment balance by major functional categories as follows:
Property, plant and equipment, gross
Buildings and infrastructure
Distribution and transmission lines and public lighting
Sub-total
Other fixed assets
Other assets
Sub-total
Technical appraisal
Total technical appraisal
Total property plant and equipment
Depreciation
Accumulated depreciation at beginning of year:
Other assets
As of December 31,
2008
2007
ThCh$
ThCh$
26,378,458
26,378,458
26,378,649
26,378,649
3,644,065
3,603,558
717,885
717,885
938,326
938,326
41,903
41,903
41,957
41,957
30,782,311
30,962,490
As of December 31,
2008
2007
ThCh$
ThCh$
(14,940,308)
(1,959,972)
(1,511,239)
(14,538,293)
(1,563,830)
(1,206,718)
(18,411,519)
(17,308,841)
Accumulated depreciation at beginning of year technical appraisal
(35,761)
(34,467)
Total accumulated depreciation at beginning of year technical appraisal
(35,761)
(34,467)
Depreciation for the year (cost of sales)
Depreciation for the year (selling and administrative expenses)
(1,622,785)
(26,334)
(1,543,230)
(32,105)
Depreciation expense for the year
(1,649,119)
(1,575,335)
(20,096,399)
(18,918,643)
10,685,912
12,043,847
Accumulated depreciation at beginning of year
Total accumulated depreciation at end of year
Total property, plant and equipment, net
235
236
enersis08
ANNUAL REPORT
NOTE 9.
INVESTMENTS IN RELATED COMPANIES
Investments in related companies of December 31, 2008 and 2007 are as follows:
RUT
Related Companies
91.081.000-6
Empresa Nacional de Electricidad
S.A.(1)
Chilectra S.A.
Synapsis, Soluciones y Servicios IT
Ltda.
Empresa Distribuidora Sur S.A.
Synapsis de Argentina Ltda.
Endesa Brasil S.A. (3)
Ampla Investimentos e Serviços S.A.
Codensa S.A.
Synapsis Colombia S.A.
Compañia Peruana de Electricidad S.A.
Endesa Market Place,S.S.(2)
Luz de Rio Ltda. (2)
Origen
country
Investment
Control
Currency
Number of shares
Percentage owned
2008
2007
%
79.913.810-7
96.800.570-7
96.543.670-7
96.529.420-1
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Chile
Peso
Chile
Chile
Chile
Chile
Peso
Peso
Peso
Peso
Argentina
Argentina
Argentina
Brasil
Brasil
Brasil
Colombia
Colombia
Perú
Perú
España
Brasil
Dollar
Dollar
Dollar
Dollar
Dollar
Dollar
Dollar
Dollar
Dollar
Dollar
Euros
Peso
%
Shareholders' equity of investee
2008
2007
ThCh$
ThCh$
Net income of investees
2008
2007
ThCh$
ThCh$
Equity in income
2008
2007
ThCh$
Proportional equity value
2008
2007
ThCh$
ThCh$
ThCh$
4.919.488.794
29.462.253
1.140.130.668
33.821.693
59.58%
100.00%
99.08%
99.99%
59.58%
100.00%
99.08%
99.99%
2,364,523,994
34,298,285
1,067,663,788
71,889,234
2,051,922,811
46,172,765
826,566,900
74,422,448
442,591,967
4,671,624
257,768,073
(4,888,632)
209,566,365
7,644,568
133,200,954
9,102,270
265,470,784
4,671,622
255,391,082
(7,233,061)
125,699,860
7,644,565
131,972,651
6,084,797
1,418,263,516
34,298,273
1,057,818,397
71,882,837
1,230,762,416
46,107,409
818,944,768
74,415,826
10.569.721
143.996.758
135.321.264
23.307
536.591.907.867
34.163.243
1.641.547.700
16.466.029
238
151.372.124
98.539
-
99.99%
16.02%
27.19%
5.00%
13.68%
20.55%
13.68%
12.47%
0.10%
30.14%
0.10%
0.00%
0.00%
99.99%
16.02%
27.19%
0.12%
13.68%
20.55%
13.68%
12.47%
0.10%
30.14%
0.10%
0.00%
0.00%
22,201,546
587,618,664
331,108,611
7,269,151
730,441,961
1,405,498,495
72,489,581
608,343,310
5,494,767
95,923,696
24,000,334
-
15,100,046
488,261,141
275,122,329
5,067,526
484,504,679
1,032,532,073
41,969,137
484,987,337
4,035,521
73,033,922
18,270,740
-
6,883,531
13,332,549
7,513,468
2,018,438
174,161,380
287,355,211
28,558,721
170,196,116
2,191,772
27,803,541
6,936,775
-
1,751,940
22,327,770
12,583,990
(213,198)
6,778,980
118,756,285
2,818,702
73,846,383
1,623,863
6,933,457
1,635,628
-
6,621,529
2,136,519
2,043,222
100,924
23,824,910
58,954,788
3,906,773
21,215,803
2,188
8,379,987
6,937
-
1,604,809
3,577,988
3,422,106
(10,660)
927,350
24,402,432
385,592
9,205,324
1,620
2,089,744
1,636
-
22,199,326
94,164,915
90,042,109
363,466
99,922,923
310,057,123
9,916,422
75,833,058
5,484
28,911,402
24,000
-
15,098,536
78,243,037
74,817,126
253,382
66,279,220
212,168,080
5,741,290
60,456,115
4,028
22,012,424
18,271
-
645,494,007
317,009,814
3,313,703,251
Accrued income
652,727,068
317,020,474
Accrued loss
(7,233,061)
(10,660)
Total
2,705,321,928
(1) Empresa Nacional de Electricidad S.A. includes in its net income of investees an investment impairment accrual for its investee Inversiones Gas Atacama Holding Ltda. for ThCh$ 48,890,387 (historical
Chilean pesos) (see Note 2j).
(2) Investees with negative equity (Note 6 a and b)
(3) During the Luz de Rio Ltda. shareholders´ meeting held on December 2, 2008, it was decided to increase the Company´s capital stock from R$755,000 to R$352,021,603, resulting a net increase of
R$351,266,603 and 351,266,602 additional shares with nominal value of R$1 per share. Enersis Agencia subscribed a total of 151,999,696 shares, equivalent to 46.27% investment. The capital stock
subscription of Enersis Agencia was achieved through the capitalization of loans totaling US$64,002,567.
On December 17, 2008 the general shareholders´ meetings of both Endesa Brasil S.A. and Luz de Rio Ltda. were held whereby the merger of Luz de Rio Ltda. and Endesa Brasil S.A. was approved. As a
result of the merger, Enersis Agencia became owner of 2,513,583 shares of Endesa Brasil S.A., representing an additional 1.512% of participation, results in a total ownership share of 13.2170%.
Unrealized Income
2008
2007
ThCh$
ThCh$
(26,771,001)
(1,790,613)
(24,426,137)
(1,529,277)
-
-
(28,561,614)
1,418,
34,
1,057,
45,
20,
94,
90,
99,
310,
9,
75,
28,
(25,955,414)
ANNUAL REPORT
NOTE 10.
a.
NOTE 12.
In accordance with current standards, the excess of purchase price of the proportional equity in the net assets
acquired (goodwill) in the purchase of shares as of December 31, 2008 and 2007 has been recognized, as follows:
Taxpayer No.
91.081.000-6
96.800.570-7
Foreign
Foreign
b.
GOODWILL AND NEGATIVE GOODWILL
Company
2008
Amortization
ThCh$
Chilectra S.A.
Codensa S.A.
Total
Short-term debt due to banks and financial institutions:
Currency
Goodwill
ThCh$
Goodwill
ThCh$
(55,018,631)
(7,954,269)
(1,329)
(624,025)
524,968,527
88,307,361
7,971
5,512,223
(55,018,632)
(7,954,269)
(1,129)
(530,550)
579,987,159
96,261,631
7,907
5,217,070
(63,598,254)
618,796,082
(63,504,580)
681,473,767
As of December 31,
Rut
Company
96.529.420-1
Synapsis, Solucciones y Servicios IT
Ltda.
Inversiones Distrilima S.A
19,615
27,886
(63,749)
(374,135)
19,615
23,709
(83,365)
(341,800)
Total
47,501
(437,884)
43,324
(425,165)
Foreign
Amortization
ThCh$
Goodwill
ThCh$
Amortization
ThCh$
2007
$ Non readjusted
ThChs$
Rut
2008
ThCh$
97.004.000-5
97.018.000-1
76.645.030-k
97.030.000-7
97.006.000-6
97.008.000-7
Banco de Chile
Scotiabank Sud America
Banco itaú Chile
Banco Estado
Banco de crédito e inversiones
Citibank N.A.
10,003,230
6,713,751
10,337,900
2,075,833
5,005,868
31
-
10,003,230
6,713,751
10,337,900
2,075,833
5,005,868
31
-
Total
34,136,613
-
34,136,613
-
Amount due
33,500,000
-
12.16%
0.00%
Following current standards, recognition has been given to the excess of the equity in the net assets purchased over
the purchase price (negative goodwill) in the purchase of shares as of December 31, 2008 and 2007 as follows:
2008
DUE TO BANKS AND FINANCIAL INSTITUTIONS SHORT TERM
Balance at December 31
2007
Amortization
ThCh$
Weigh average annual interest
rate
2007
ThCh$
2008
ThCh$
2007
ThCh$
As of December 31,
2008
2007
%
%
Goodwill
ThCh$
Percentage of debt in foreign currency:
Percentage of debt in local currency:
Total
NOTE 11.
237
0.00%
100%
0.00%
0.00%
100.00%
0.00%
OTHER ASSETS
Other assets as of each year end are as follows:
As of December 31,
2008
2007
ThCh$
ThCh$
Bond discount (see note 15d)
Unrealized losses from derivative contracts
Total
3,980
4,927,416
4,931,396
4,335
5,908,026
58,665,200
64,577,561
NOTE 12. CURRENT PORTION OF LONG TERM DEBT DUE TO BANKS AND FINANCIAL INSTITUTIONS
Current portion of long-term debt due to banks and financial institutions:
US$
Rut
Foreign
Argentaria S.A.
Citibank N.A. acting through
its International Banking
Facility
Caja de ahorros y Monte de
Piedad de Madrid, Caja
Madrid
Banco Santander Central
Hispano
Deutsche Bank AG. New
York Branch
ABN Amro Bank
Bank of Tokio- Mitsubishi
Sao Paulo- USA
Caja de Ahorros de Galicia
Banca Monte Paschi
Banco HSBC London
Dresdner Bank
Instituto de Crédito Oficial
The Bank of Nova
Scotiabank
Banco Itaú chile
Citibank N.A.
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
97.036.000-k
76.645.030-k
97.008.000-7
2008
ThCh$
Currency
$ Readjusted
Other
$ Non readjusted
2007
ThCh$
2008
ThCh$
2007
ThCh$
2008
ThCh$
2007
ThCh$
2008
ThCh$
12,645,342
120,963
-
-
-
-
-
12,645,342
120,962
-
-
-
-
12,645,342
120,962
-
-
-
-
73,884
-
-
-
3,189,816
3,987,270
9,569,449
9,569,449
2,734,128
1,367,064
7,974,540
2,734,128
3,987,270
30,513
38,141
91,538
91,538
26,153
13,077
76,282
26,153
38,141
-
-
2,734,128
7,723,913
2,187,303
-
26,153
20,923
-
-
-
ThChs$
2007
ThCh$
2008
ThCh$
2007
ThCh$
-
12,645,342
120,963
-
-
12,645,342
120,962
-
-
-
12,645,342
120,962
-
-
-
-
73,884
-
-
-
-
3,189,816
3,987,270
9,569,449
9,569,449
2,734,128
1,367,064
7,974,540
2,734,128
3,987,270
30,513
38,141
91,538
91,538
26,153
13,007
76,282
26,153
38,141
-
-
-
35
2,734,128
7,723,913
2,187,303
-
26,153
20,923
35
Total
238
100%
0.00%
100.00%
0.00%
enersis08
ANNUAL REPORT
NOTE 12. CURRENT PORTION OF LONG TERM DEBT DUE TO BANKS AND FINANCIAL INSTITUTIONS
Current portion of long-term debt due to banks and financial institutions:
US$
Rut
Foreign
Argentaria S.A.
Facility
Caja de ahorros y Monte de
Piedad de Madrid, Caja
Madrid
Hispano
York Branch
ABN Amro Bank
Bank of Tokio- Mitsubishi
Sao Paulo- USA
Banca Monte Paschi
Banco HSBC London
Dresdner Bank
Instituto de Crédito Oficial
The Bank of Nova
Scotiabank
Banco Itaú chile
Citibank N.A.
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
97.036.000-k
76.645.030-k
97.008.000-7
Total
Due amount
Weigh average annual
interest rate
2008
ThCh$
$ Non readjusted
2007
ThCh$
2008
ThCh$
2007
ThCh$
2008
ThCh$
2007
ThCh$
12,645,342
120,963
-
-
-
-
-
12,645,342
120,962
-
-
-
-
12,645,342
120,962
-
-
-
-
73,884
-
-
-
3,189,816
3,987,270
9,569,449
9,569,449
2,734,128
1,367,064
7,974,540
2,734,128
3,987,270
30,513
38,141
91,538
91,538
26,153
13,077
76,282
26,153
38,141
-
-
2,734,128
7,723,913
2,187,303
-
26,153
20,923
-
-
95,694,484
915,383
95,467,499
2.59%
2008
ThCh$
ThChs$
2008
ThCh$
2007
ThCh$
-
12,645,342
120,963
-
-
12,645,342
120,962
-
-
-
12,645,342
120,962
-
-
-
-
73,884
-
-
-
-
3,189,816
3,987,270
9,569,449
9,569,449
2,734,128
1,367,064
7,974,540
2,734,128
3,987,270
30,513
38,141
91,538
91,538
26,153
13,007
76,282
26,153
38,141
-
-
-
-
35
2,734,128
7,723,913
2,187,303
-
26,153
20,923
35
-
-
-
-
-
35
95,694,484
915,418
-
-
-
-
-
-
-
-
-
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2007
ThCh$
As of December 31,
2008
2007
ThCh$
ThCh$
Fair value - derivative contracts (see note 24)
Other
Total
NOTE 14.
Total
99.99%
0.01%
99.99%
0.01%
100.00%
100.00%
1,876,276
76,281
1,952,557
2,258,594
83,000
2,341,594
LONG-TERM PORTION OF DEBT DUE TO BANKS AND FINANCIAL INSTITUTIONS
Long-Term Portion of Debt Due to Banks and Financial Institutions:
Years to maturity
Total
Long-term
portion-2008
ThCh$
Average
Anual
interest
rate
%
Total
Long-term
portion2007
ThCh$
-
-
-
25,026,487
-
-
-
-
25,026,485
-
-
-
-
25,026,485
-
-
-
-
-
15,286,448
-
-
-
-
-
-
6,312,987
15,782,468
5,411,132
US$
US$
US$
US$
-
-
-
-
-
-
7,891,234
7,891,234
18,938,962
18,938,962
2,705,566
US$
-
-
-
-
-
-
5,411,133
The Bank of Nova Scotiabank
Banco Itaú chile
US$
US$
-
-
-
-
-
-
5,411,133
4,328,908
-
-
-
-
-
Rut
Foreign
Argentaria S.A.
Facility
Piedad de madrid, Caja
Madrid
Hispano S.A.
York Branch
Banco HSBC London
Dresdner Bank
Foreign
Foreign
As of December 31,
2008
2007
%
%
OTHER CURRENT LIABILITIES
Other current liabilities are as follows:
Currency
$ Readjusted
Other
NOTE 13.
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
76.645.030-k
Instituto de Credito Oficial
ABN Amro Bank
Bank of Tokio-Mitsubishi
Sau Paulo USA
Banca Monte Paschi
After 1 year
but within
2 years
ThCh$
After 2 years
but within
3 years
ThCh$
US$
-
-
-
US$
-
-
US$
-
-
US$
-
US$
US$
US$
US$
Curre
ncy
Total
After 3 year
but within
5 years
ThCh$
After 5 year
but within
10 years
ThCh$
189,389,624
As of December 31,
2008
2007
%
%
100.00%
0.00%
100.00%
0.00%
Total
100.00%
100.00%
In November 2004 the Company obtained a syndicated loan amounting to US$350 million through overdraft (revolving)
credit facilities, with a maturity in November 2009, US$200 million were prepaid in September 2008 and the amount
outstanding is US$150 million. The spread depends on the corporate rate provided by S&P. At December 31, 2008 the
As of December 31,
2008
2007
%
%
100.00%
0.00%
100.00%
0.00%
Total
100.00%
100.00%
B2
ANNUAL REPORT
The revolving credits of Enersis may be prepaid and withdrawn during the life of the credit.
These transactions were consummated with no guarantees, endorsements or restrictions of investments or indebtness.
BONDS PAYABLE
Yankee Bonds
Yankee Bonds
Yankee Bonds II
Bond N° 269
Bond N° 269
Face value
outstanding
Currency
Interest
rate
%
Maturity
date
2
3
1
B-1
B-2
249,734,000
858,000
350,000,000
5,080
1,734,285
US$
US$
US$
U.F.
U.F.
7.40%
6.60%
7.38%
5.50%
5.75%
01/12/2016
01/12/2026
01
01/12/2014
15/06/2009
15/06/2022
Periodicity
Interest
Amortization
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
To the expiration
To the expiration
To the expiration
Semi annual
Semi annual
Total short-term portion
2008
ThCh$
Series
Face value
outstanding
Currency
Interest
rate
%
Maturity
date
2
3
1
B-1
B-2
249,734,000
858,000
350,000,000
1,734,285
US$
US$
US$
U.F.
U.F.
7.40%
6.60%
7.38%
5.50%
5.75%
01/12/2016
01/12/2026
01
01/12/2014
15/06/2009
15/06/2022
Yankee Bonds
Yankee Bonds
Yankee Bonds II
Bond N° 269
Bond N° 269
Periodicity
Interest
Amortization
Semi annual
Semi annual
Semi annual
Semi annual
Semi annual
To the expiration
To the expiration
To the expiration
Semi annual
Semi annual
Total short-term portion
969,422
3,003
7,529,668
109,226
1,985,960
833,328
2,554
6,401,764
209,293
1,879,653
10,597,279
9,326,592
Foreign
Foreign
Foreign
Chile
Chile
2008
ThCh$
2007
ThCh$
158,943,205
546,074
222,757,500
35,306,809
135,134,365
464,276
189,389,624
108,556
37,060,075
417,553,588
362,156,896
Foreign
Foreign
Foreign
Chile
Chile
a. Domestic bonds
On September 11, 2001, the Superintendence of Securities and Insurance registered the issue of adjustable bearer bonds
of Enersis S.A. date June 14, 2001 in the Securities Register under No. 269. This placement was made in two series, as
follows:
B1
B1
B2
B2
Total amount
In UF
1,000,000
3,000,000
1,000,000
1,500,000
On November 21, 1996, the Company, acting through its agency in the Cayman Islands, issued and placed Yankee
Bonds for US$800 million in the US market. This placement was made in three series, as follows:
Series
Total amount
in US$
Years to
maturity
Stated annual
interest rate
1
2
3
300,000,000
350,000,000
150,000,000
10
20
30
6.90%
7.40%
6.60%
No. of bonds
per series
1,000
300
1,000
150
During November, 2006 US$300 million from series 1 of the Yankee Bonds were paid off. This operation resulted in the
liquidation of the US$100 million associated with this bond.
During November, 2001, Enersis Internacional a 100% subsidiary of Enersis made a Tender Offer for total or partial
cash purchase of the series 2 Yankee Bonds, with a face value of ThUS$350,000 maturing at 20 years in 2016, issued by
the agency of the parent Enersis S.A.
As a result of this offer, which expired on November 21, 2001, series 2 bonds for ThUS$95,536, with a face value of
ThUS$100,266, were repurchased.
Bonds payable consist of the following:
Series
b. International bonds (Yankee Bonds)
During the second quarter of 2004, UF/US$swap contracts were entered into for US$100,000,000 associated with the
series the tranche 1 bond and US$250,000,000 associated with series 2.
2007
ThCh$
Details of the long-term portion of bonds payable is as follows:
Instrument
239
Interest is payable on a semi-annual basis and principal is due upon maturity. The Series 3 bond holders have a preredemption option in year seven, which was exercised by nearly all holders in November 2003 for US$149,142,000.
Details of the short-term portion of bonds payable is as follows:
Series
10,000
The scheduled maturity of the Series B-2 bonds is 21 years, principalUNCONSOLIDATED
payments beginning
after 5 years,
interest and
FINANCIAL
STATEMENTS
On December 7, 2006 Enersis S.A. signed a new revolving loan for US$200 million maturing on December 7, 2009 with
a spread above Libor + 0,250%. At December 31, 2008, no withdrawals have been made.
Instrument
150
In November 2004 the Company obtained a syndicated loan amounting to US$350 million through overdraft (revolving)
credit facilities, with a maturity in November 2009, US$200 million were prepaid in September 2008 and the amount
outstanding is US$150 million. The spread depends on the corporate rate provided by S&P. At December 31, 2008 the
risk rating is BBB and the current spread is 0.375%.
NOTE 15.
1,500,000
Face value
In UF
1,000
10,000
1,000
10,000
The scheduled maturity of the Series B-2 bonds is 21 years, principal payments beginning after 5 years, interest and
b. International bonds (Yankee Bonds)
On November 21, 1996, the Company, acting through its agency in the Cayman Islands, issued and placed Yankee
As a result of the liquidation of Enersis Internacional S.A. on September 21, 2006, Enersis S.A. was allocated its assets
and liabilities, which included such bonds among its assets.
Given the above, at December 31, 2008 the bonds are presented net of the repurchase.
ThCh$
Negative equity of investment (*)
Profit sharing and other employee benefits
Payables accrued
Total
enersis08
240
ANNUAL REPORT
c. International bonds (Yankee Bonds II)
b.
On November 24, 2003, the Company, through its Cayman Islands Agency, issued and placed Yankee Bonds on the
American market for US$350 million. This placement was made in a single series, whose features are as follows:
Detail of long-term accruals is as follows:
Series
Total amount
in U.F
Years to
Maturity
Stated annual
interest rate
1
350,000,000
10
7.375%
During the second half of 2004, debts have been re-denominated through US$/UF swap contracts for the total of this
issue.
Long- term accruals
Legal, labor and tax contingencies
Total
Deduction of the bond placements of Enersis has been deferred in the same period as the respective issues. The longterm deferred value at December 31, 2008 is ThCh$4,927,416 and ThCh$5,908,026 at December 31, 2007 and it is
presented in Other Long Term Assets (Note 11). The balance for deductions in short term bond placements classified
under Other current assets is ThCh$980,610 (ThCh$985,303 in 2007) (Note 7).
During the years 2008 and 2007, there were no write-offs of assets.
NOTE 17.
SEVERANCE INDEMNITIES
As of December 31,
2008
2007
ThCh$
ThCh$
Short- term accruals
Accrued expenses included in current liabilities are as follows:
As of December 31,
2008
2007
ThCh$
ThCh$
b.
239,674
3,055,831
3,843,958
7,139,463
261,005
3,018,832
2,209,361
5,489,198
Long- term accruals
Opening balance as of January 1
Increase in accrual
Payments during the period
2,558,896
626,244
(186,500)
2,476,856
508,299
(198,517)
Total
2,998,640
2,786,638
NOTE 18.
OTHER LONG-TERM LIABILITIES
Detail of long-term liabilities is as follows:
Detail of long-term accruals is as follows:
As of December 31,
2008
2007
ThCh$
ThCh$
Legal, labor and tax contingencies
Total
14,208,764
2,998,640
808,110
18,015,514
15,864,809
14,208,764
2,786,638
896,479
33,756,690
(*) Balance relates to negative equity in Endesa Market Place, S.S. and Luz de Rio Ltda. as of December 31, 2007.
During the years 2008 and 2007, there were no write-offs of assets.
15,864,809
14,208,764
2,786,638
896,479
33,756,690
Long-term accruals include employee severance indemnities, calculated in accordance with the policy described in Note
2p. An analysis of the changes in the accruals in each year is as follows:
ACCRUED EXPENSES
Profit sharing and other employee benefits
Payables accrued
Total
14,208,764
2,998,640
808,110
18,015,514
(*) Balance relates to negative equity in Endesa Market Place, S.S. and Luz de Rio Ltda. as of December 31, 2007.
d. Deduction of the bond placements
a.
261,005
3,018,832
2,209,361
5,489,198
As of December 31,
2008
2007
ThCh$
ThCh$
Interest is paid semi-annually and amortization of capital is a single payment at the end of the term.
NOTE 16.
239,674
3,055,831
3,843,958
7,139,463
ThCh$
As of December 31,
2008
2007
ThCh$
ThCh$
Fair value of derivative instruments (See Note 24)
MTM Adjustments
Other
Total
90,134,711
4,031,623
13,295,110
107,461,444
208,180,877
14,478,372
222,659,249
ANNUAL REPORT
NOTE 19.
a.
SHAREHOLDERS’ EQUITY
Consolidated statements of changes in shareholders’ equity:
Variations
Paid-in Capital
ThCh$
Additional
paid-in capital
ThCh$
Other Reserves
ThCh$
Retained
Earnings
ThCh$
Deficit of
subsidiaries in
Development Stage
ThCh$
Interim
Dividends
ThCh$
Net income (loss)
for the period
ThCh$
Total
Shareholders’
Equity
ThCh$
As of January 1, 2007
Capital increase
Transfer of prior year income to retained
earnings
Changes in equity of affiliates
Dividend paid N°75
Reserve Technical Bulletin N°72
Cumulative translation adjustment
Price-level restatement
Provisional dividend N°76
2,415,284,412
-
172,124,213
-
(238,342,305)
-
271,279,769
-
(181,751)
-
(36,242,795)
-
285,960,366
-
2,869,881,909
-
178,731,046
-
12,737,192
-
(7,702,898)
(56,695,443)
(115,113,442)
(17,637,331)
-
249,535,820
(159,675,172)
27,842,117
-
181,751
-
36,242,795
(190,784)
(17,343,973)
(285,960,366)
188,376,410
-
(7,702,898)
(159,675,172)
(56,695,443)
(115,113,442)
201,482,240
188,376,410
(17,343,973)
Balance at December 31, 2007
2,594,015,458
184,861,405
(435,491,419)
388,982,534
-
(17,534,757)
188,376,410
2,903,209,631
230,867,376
16,452,665
(38,758,736)
34,619,446
-
(1,560,593)
16,765,500
258,385,658
2,824,882,834
201,314,070
(474,250,155)
423,601,980
-
(19,095,350)
205,141,910
3,161,595,289
As of January 1, 2007
Increase of capital
Transfer of prior year income to retained
earnings
Changes in equity of affiliates
Dividend paid N°77
Reserve Technical Bulletin N°72
Provisional dividend N°78
2,594,015,458
-
184,861,405
-
(435,491,419)
-
388,982,534
-
-
(17,534,757)
188,376,410
-
2,903,209,631
-
230,867,376
-
16,452,665
-
11,489,022
13,374
123,179,289
(38,758,736)
-
170,841,653
(111,424,065)
41,913,244
-
-
17,534,757
(351,822)
(50,260,267)
(188,376,410)
570,883,101
-
11,489,022
(111,424,065)
13,374
123,179,289
250,122,727
570,883,101
(50,260,267)
Balance at December 31, 2008
2,824,882,834
201,314,070
(339,568,470)
490,313,366
-
(50,612,089)
570,883,101
3,697,212,812
As of December 31, 2007 (price-level
restated)
(b)
Dividends
There are no dividend restrictions.
During the years 2008 and 2007 dividends were paid as follows:
(c)
Dividend
Number
Payment
Date
Historical
value (Ch$)
Type of
dividend
75
76
77
78
May 2007
December 2007
April 2008
December 2008
4.890
0.530
3.410
1.540
Final 2006
Interim 2007
Final 2007
Interim 2008
Number of shares
241
242
75
76
77
enersis08
78
ANNUAL REPORT
(c)
May 2007
December 2007
April 2008
December 2008
4.890
0.530
3.410
1.540
Final 2006
Interim 2007
Final 2007
Interim 2008
Number of shares
The detail of the reserve for accumulated conversion differences is as follows:
No. of subscribed
Shares
No. of paid-in
Shares
32,651,166,465
(d)
32,651,166,465
Subscribed and paid in capital is as follows:
32,651,465
As of December 31,
2008
2007
Paid-in Capital
Paid-in capital
ThCh$
ThCh$
Single
(e)
Number of
Voting Shares
2,824,882,834
2,824,882,834
Other information
Other reserves at December 31, 2008 are composed of the following:
Initial balance
at January 1,
2008
ThCh$
Reserve for
the period
ThCh$
Final balance at
December 31,
2008
ThCh$
Reserve for entities using remeasurement method
Reserve for accumulated conversion differences
Reserve for Technical Bulletin No. 72 (1)
(46,232,634)
(372,746,516)
(55,271,005)
11,489,022
123,179,289
13,374
(34,743,612)
(249,567,227)
(55,257,631)
Total
(474,250,155)
134,681,685
(339,568,470)
(1) Decrease in other reserves in 2007 due to the merger of the Colombian subsidiaries Emgesa S.A. and Betania S.A.
Reserve
for assets
ThCh$
Reserve for
liabilities
ThCh$
Edesur S.A.
Cía. Peruana de Electricidad S.A.
Ampla Investimentos e Serviços S.A.
Endesa Brasil S.A.
Codensa S.A.
Investluz S.A.
Central Geradora Termelétrica Fortaleza S.A.
Synapsis Colombia S.A.
Endesa Market Place, S.S.
Endesa Argentina S.A.
Ingendesa Do Brasil Ltda.
Edegel S.A.
Emgesa S.A.
Gasatacama S.A.
Electrogas S.A.
Inversiones Electrogas S.A.
Hidroeléctrica El Chocón S.A.
Hidroinvest S.A.
Southern Cone Power Arg. S.A.
Endesa Chile Internacional
Synapsis Argentina Ltda.
Total
Detail of changes in the reserve for accumulated conversion differences is as follows:
Initial
balance at
January 1, 2008
ThCh$
As of December 31,
2008
ThCh$
Final
Reserve for
balance at
the period December 31, 2008
ThCh$
ThCh$
(372,746,516)
256,845,744 (133,666,455) 123,179,289
(249,567,227)
Total
(372,746,516)
256,845,744 (133,666,455) 123,179,289
(249,567,227)
NOTE 20.
a.
(249,567,227)
OTHER NON-OPERATING INCOME AND EXPENSES
Other income:
The detail of other non-operating income is as follows:
Project administration, maintenance and construction
Accrued negative equity
Dividend from investees
Other
Total
b.
(36,684,028)
(27,841,345)
(13,680,347)
(1,851,539)
(54,610,387)
3,393,439
(39,151,307)
(48,327,318)
(7,322,057)
(7,515,458)
(1,079,915)
465,417
(3,399,675)
(231,169)
(627,988)
63,325
4,900,812
(12,224,449)
16
(146)
(69,512)
(41,945)
(118,198)
73,300
(3,659,196)
(27,557)
Other expenses:
2008
2007
ThCh$
ThCh$
6,938,109
1,201,904
8,140,013
6,726,706
5,512,124
835,470
517,621
13,591,921
Project administration, maintenance and construction
Accrued negative equity
Dividend from investees
Other
Total
b.
6,938,109
1,201,904
8,140,013
Current and long-term liabilities
Income accounts
6,726,706
5,512,124
835,470
517,621
13,591,921
Net charge-liabilities and shareholders’ equity accounts
NOTE 22.
2008
2007
ThCh$
ThCh$
Foreign taxes
Stamp tax
Negative equity, Luz de Rio (*)
Other
Total
5,637,104
5,137,591
959,579
11,734,274
Currency
Cash
Time deposits
Other current assets
Other account receivable
Forward contracts
Amounts due from related
companies
425,788
530,383
956,171
Non-current assets
Amounts due from related
companies
Investment in other companies
PRICE-LEVEL RESTATEMENT
2008
2007
ThCh$
ThCh$
Index
Property, plant and equipment
Accounts receivable from subsidiaries short-term
2008
ThCh$
I.P.C.
I.P.C.
I.P.C
U.F
I.P.C
I.P.C.
I.P.C.
I.P.C.
I.P.C.
Accounts receivable from subsidiaries long-term
Investment in related companies
Investment in other companies
Goodwill and negative goodwill
Current and long-term assets
Cost and expense accounts
Net credits - assets
(240,943)
194,237
(259,114)
-
US$
34,874,916
(27,039,895)
US$
US$
47,888,389
4,189,301
(40,377,737)
(901,053)
Long-term liabilities
Due to banks and
financial institutions
Amount payable to related
companies
Bonds payable
99,543,779
(68,624,505)
Total gain (loss)
2007
ThCh$
NOTE 23.
Accounts payable related companies, long-term
Due to bank and financial institutions long term
Bonds payable long-term
Non-monetary liabilities
Current and long-term liabilities
Income accounts
Net charge-liabilities and shareholders’ equity accounts
Net credits (charge) to income
1,062,010
15,695,211
22,172,578
3,070,225
169,787,414
40,721,662
55,659,619
27,101,786
1,062,297
985,133
14,187,124
21,179,535
7,275,705
144,259,833
35,478,702
51,353,690
26,579,435
923,584
336,332,802
302,222,741
(a) Other receipts from financing:
(250,122,727)
(11,181,883)
(13,561,412)
(26,560,107)
(1,296,573)
(43,899,949)
(516)
(655,241)
(219,414,159)
(3,397,177)
(9,914,489)
(14,861,596)
(25,767,307)
(1,472,899)
(33,712,313)
(577,859)
(347,278,408)
(309,117,799)
(10,945,606)
(6,895,058)
(736,105)
4,484,441
7,059,237
(240,943)
194,237
(259,114)
Liabilities
Current liabilities
Bonds payable
companies
Other current liabilities
Currency
US$
-
-
US$
US$
US$
(23,121,903)
(17,948)
11,515,641
-
US$
(14,478,589)
28,438,050
US$
US$
(56,439)
7,331,397
48,285
(37,674,879)
47,333,373
61,868,900
(21,291,132)
2008
2007
ThCh$
ThCh$
1,783,600
-
Total
1,783,600
-
2008
2007
ThCh$
ThCh$
Distrilima S.A. Capital decrease
Deposit as guarantee
31,849,336
3,159,947
-
Total
31,849,336
3,159,947
(c) Other investment disbursements:
2008
2007
ThCh$
ThCh$
2008
2007
ThCh$
ThCh$
Bonds payable
companies
Other current liabilities
Miscellaneous payable
Margin call premiums
EXCHANGE DIFERENCES
US$
US$
US$
US$
243
2008
2007
ThCh$
ThCh$
CASH FLOW STATEMENT
(b) Other receipts from investments:
I.P.C.
U.F.
I.P.C.
I.P.C.
I.P.C.
I.P.C.
I.P.C.
U.F.
I.P.C.
I.P.C.
Currency
Exchange difference - net
Liabilities and Shareholders’ equity
Shareholders equity
Accounts payable related companies, short-term
Liabilities
Current liabilities
(736,105)
4,484,441
7,059,237
1,783,600
Total gain (loss)
Assets
Cash
Time deposits
Other current assets
Other account receivable
(309,117,799)
US$
US$
US$
US$
US$
The (charge) credit to income for price-level restatement (as described in note 2d) is as follows:
Currency
(347,278,408)
EXCHANGE DIFERENCES
Assets
Current assets
(*) At December 17, 2008 the merger ofLuz de Rio Ltda. and Endesa Brasil S.A. was approved. (See note 9.3)
Assets
Current assets
(577,859)
Other non-operating expenses are as follows:
NOTE 22.
(516)
(655,241)
REPORT
(10,945,606) ANNUAL
(6,895,058)
Net credits (charge) to income
Other expenses:
NOTE 21.
I.P.C.
I.P.C.
2008
2007
ThCh$
ThCh$
US$
-
-
US$
US$
(23,121,903)
-
11,515,641
-
Deutsche Bank Margin Call payment
-
24,359,230
Total
-
24,359,230
244
enersis08
ANNUAL REPORT
NOTE 24.
FINANCIAL DERIVATIVES
As of December 31, 2008 the Company held the following financial derivative contracts with financial institutions with the objective of decreasing exposure to
interest rate and foreign currency risk, as follows. These have been valued using the criteria specified in note 2t:
Type of
derivative
Type
contract
S
S
OE
CCTE
CCTE
CCTE
NOTE 25.
a.
Nominal
Amount
US$
350,000,000
250,000,000
50,000,000
Date of
Maturity
Item
Purchase /sale
position
Hedged item
Amount
ThCh$
I-2014
IV-2016
IV-2009
Exchange rate
Exchange rate
Interest rate
P
P
P
Bonds payable
Bonds payable
Bank obligations
222,757,500
159,112,500
31,822,500
Accounts
Amount
Hedged
item
ThCh$
222,757,500
159,112,500
31,822,500
Assets/Liabilities
Acount
Amount
ThCh$
Other liabilities
Other liabilities
Other liabilities
Realized
ThCh$
(48,324,342)
(42,826,426)
(860,219)
(92,010,987)
Income
Unrealized
ThCh$
(2,462,327)
(1,797,350)
(25,799)
(4.285.476)
(909,553)
(106,503)
(56,263)
(1.072.319)
COMMITMENTS AND CONTINGENCIES
Collateral held by third parties:
Guarantee
Deutsche Bank
Subsidiary
Enersis S.A.
Type
guarantee
Deposit
Commited assets
Book value
Type
of collateral
ThCh$
Deposit
account
Balance payable of related
debt as of December 31,
2008
2007
-
11
27,542,662
2009
Assets
-
Release of guarantees
2010
Assets
-
2011
Assets
-
ANNUAL REPORT
b.
Litigation and other legal actions
Enersis S.A.
Plaintiff
Defendant
Court
Case/Identification
:
:
:
:
Enersis S.A., Chilectra S.A., Empresa Nacional de Electricidad S.A.
The Republic of Argentina
CIADI Arbitration Panel
(CIADI Case ARB/03/21)
Summary of proceedings: Compensation for losses caused to the Plaintiff’s investment in the Republic of Argentina is
requested in connection with the participation of the power distribution concessionaire Edesur S.A. on the grounds of
violation of the Investment Protection and Promotion Agreement entered into by the Republics of Chile and Argentina,
and the Argentinean Government behavior through the passing of Public Emergency Law 25,561, dated January 6, 2002.
The said behavior has also seriously affected the economic and financial balance of the Concession Contract between
Edesur S.A. and the Argentinean National State. The said Law authorized a re-negotiation process of the Concession
Contracts with the purpose of re-composing the economic-financial equation affected by the conversion to pesos, at
US$1 = $1, of tariff values calculated in American dollars, and the prohibition to apply biased tariff updating. In
practice, this process has not been promoted by the Government, and no measures to prevent losses for the Plaintiff have
been formalized. Edesur S.A. has been deprived of receiving the tariffs indicated in the regulations and in the said
Concession Contract, therefore being harmful to the investment the Plaintiff companies have made.
Process status: On October 18, 2004, a copy of the lack of jurisdiction petition filed by the Republic of Argentina was
received. On December 17, 2004 the said petition was answered and confirmation of the International Center for the
Settlement of Disputes regarding Investments between States and Nationals of Other States (CIADI) jurisdiction was
requested. On April 6, 2005, the allegations of the parties regarding this jurisdiction issue took place. The court decided
to accept the re-petition and re-response of the parties, setting a brief term for them. And the parties met the term. On
June 15, 2005, Edesur S.A. entered with the Unit for Renegotiation and Analysis of Public Services Contracts
(UNIREN) into an Understanding Letter within the framework of the process for renegotiating Edesur S.A.’s
Concession Contract, envisaged in Law No.25,561 and supplementary regulation. As a result of the Understanding
Letter, on August 29, 2005, the Minutes of Agreement for the Adequacy of the Concession Contract for the Public
Service of Distribution and Marketing of Electric Energy were entered into.
At the request of the Argentine Government, the Minutes of Agreement were executed again, on the same terms and
conditions, on February 15, 2006, to include the new female Minister of Economy and Production. The Minutes
envisage a Transitional Rate Regimen, retroactively effective beginning on November 1, 2005; require approval of the
authorities for paying dividends during the life of the transitional regime; and include other aspects associated with
investments, quality of service, penalties applied to Edesur, and unpaid penalties. Also, it establishes a Full Rate
Revision, by which a new rate regime is to be set, which was scheduled to become effective on November 1, 2006, and
for the next 5 years, under the supervision of the Ente Nacional Regulador de la Electricidad (ENRE), in accordance
with law 24,065. In addition, the Understanding Letter imposes the obligation of initially suspending, and subsequently
dropping, all actions filed against the Argentinean State by Edesur S.A. and its shareholders. Such requirement would
cause Enersis S.A. to suspend the international arbitration started on April 25, 2003 with the CIADI. After publication in
the Official Gazette of the Republic of Argentina of the resolution approving the rates arising from the Full Rates
Revision, Enersis S.A. and its subsidiaries Chilectra S.A., Empresa Nacional de Electricidad S.A. and Elesur S.A.
(currently, Chilectra S.A.) would drop the abovementioned international arbitration started with the CIADI.
On September 16, 2005 the Republic of Argentina made a filing requesting the suspension of the proceedings. It was
answered on September 22, 2005 by the plaintiffs, who opposed the suspension. On September 30, 2005 the court
rejected the Argentinean request, for lack for consent. On October 7, 2005, Argentina made a new filing on the same
issue, which the court communicated to us on October 11, 2005, and we answered the filing on October 18, 2005. On
March 28, 2006, the court ordered the suspension of the proceedings for a term of 12 months, after which it will call on
the parties to report on the status of the negotiation conducted in accordance with the Minutes of Agreement for the
Adequacy of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy.
Subsequently, the court will decide whether or not the proceedings should continue.
12
The Minutes of Agreement for the Adequacy of the Concession Contract for the Public Service of Distribution and
Marketing of Electric Energy, after being approved by the Congress of the Argentine Nation, were ratified by the
Executive National Argentine Power through decree 1959 of 2006, published on the Official Gazette on January 8, 2007,
and now their regulation by the ENRE is pending. ENRE Resolution 50/2007, of January 30, 2007, published in the
Official Gazette on February 5, 2007, proceeded to comply with certain stipulations of the Minutes of Agreement for the
Adequacy of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy,
approving the amounts of the new Edesur Rate Table that reflects the increases in cost provided for in the Transition
Rate Regimen, and issuing certain rules governing predictions contained in the Minutes of Agreement for the Adequacy
of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy.
In particular, with regard to its most important effects, the ENRE adopted the following decisions among others:
1. Approval of the new Rate Table reflecting the Transition Rate Regimen: ENRE approved the amounts of
Edesur's Rate Table leading to the Transition Rate Regimen provided for in the Minutes of Agreement for the
Adequacy of the Concession Contract for the Public Service of Distribution and Marketing of Electric Energy
and, therefore implements the increase of 23% above typical distribution costs (which does not affect T1R1 and
T1R2 rates), above connection costs and above service restoration costs incurred by Edesur, as well as also the
additional average increase of 5% above the above typical distribution costs earmarked for executing a works
plan.
2. Date of application of the new Rate Table reflecting the Transition Rate Regimen: ENRE Resolution 50/2007
decreed application of the above new Rate Table starting from the invoicing of the consumption recorded after
zero hours of February 1, 2007.
3. Cost Monitoring Mechanism: ENRE Resolution No. 50/2007 stipulated application of a positive variation of
9.962% of the Cost Monitoring Mechanism Indices to the service costs, with such application being made
starting from May 1, 2006 (on which date the first six-month period after November 1, 2005 for review of the
prices provided for in the MMC ended). For invoicing the amounts of such variation, the Resolution also
stipulated that it should be broken down and charged in 55 installments.
The plaintiffs petitioned the court to extend the stay of the proceedings for a further 12 month period. In this regard, on
March 9, the Court issued Resolution SE No. 433/2007 whereby the Minister of Energy extended the Contractual
Transition Period, provided for in the Heads of Agreement, to the date on which the rate table resulting from the Full
Rate Annulment comes into force, which is February 1, 2008. The Resolution also indicated that the stay of actions
provided for in the Heads of Agreement was extended through to the time when the above rate table comes into force,
when actions could be taken again always provided that Edesur S.A. had fulfilled certain obligations.
On August 1, 2007, the Court decided to maintain the stay through January 8, 2008, at the request of the parties. As the
Court required the parties to inform in regard to the situation related to the process of negotiation in accordance with the
Agreement Document, on January 19, 2008 the parties described the delay in the implementation of the Rate Review
and requested the arbitrators to extend the current interruption for a 9 month period, notwithstanding that if there are
doubts in regard to the approval of the Rate Review, they can urge to begin the process again before the end of the
extension period. The Republic of Argentina did not have objections to the request. The decision of the Court informed
on March 28, 2008 was to extend the interruption until November 19, 2008. On that date the Court would request the
parties to inform about the situation of the process of negotiation in accordance with the Agreement Document and then
it would decide in regard to the need to continue or not with the arbitration proceeding.
After the expiration of the interruption of the proceeding that had been authorized until November 19, 2008, a
communication from ICSID was received on November 20, 2008. Such communication stated a period until December
1, 2008 to inform about the status of the negotiations between the parties in order to solve on the interruption of the
arbitration proceeding. On December 1, 2008 the plaintiffs informed the Court about the status of the actions that gave
rise to the interruption of the arbitration proceeding and requested the extension of the interruption until June 30, 2009 in
order to cover the period for the effective date of the Rate Review of Edesur; notwithstanding that, if the plaintiffs have
doubts about the approval of the Rate Review as agreed, the plaintiffs reserved the right to request to start the
proceeding again without the need for awaiting for the end of the period of extension of the interruption that the Court
may agree. On December 3, 2008 the Republic of Argentina informed the Court that it is not opposed to continue the
245
246
enersis08
ANNUAL REPORT
interruption of the proceeding. We are waiting for the Court’s confirmation and communication of the interruption
requested.
Amount US$574.7 million plus interest.
Plaintiff
:
Defendant
:
Court
Case/Identification
:
:
Omaira Cely Vargas and Rosa Elvira Viracachá Tunarosa, through lawyer Martha Teresa
Briceño de Valencia
Cámara de Comercio de Bogotá, Mr. Alvaro Pérez (liquidator of Luz de Bogotá), Endesa
Internacional S.A., Enersis S.A., Agencia Islas Cayman, Chilectra S.A., Agencia Islas
Caymán y Enersis Internacional (shareholders of Luz de Bogotá)
Third Civil Court of Bogota Circuit
Case file No. 2006-0315
Summary of proceedings: On July 15, 2004, Mr. Alvaro Pérez Uz (linked to the Endesa, S.A:Group), liquidator of Luz
de Bogotá S.A., registered minutes No. 26 of July 9, 2004, containing the final winding up count, in the Bogotá
Chamber of Commerce. Payment for such registration was Col$48,000. The remainder that was distributed to the
partners amounted to Col$1,764,208,721,394, which is the sum, according to the plaintiffs, making up the base to which
0.7% to be paid to the Department of Cundinamarca, should be applied, according to Ordinance 24 of 1997 and articles
226, 229 and 230 of Law 223 of 1995. The Chamber initially rejected the registration so that the liquidator should
include the distribution of the surplus as a document with no value. Based on articles 89, 218 and 431 of the Commercial
Code, the liquidator stated that the liquidation minutes did not need to state the amounts of the surplus. The Chamber
accepted the argument and registered the minutes. According to the plaintiffs, the Department of Cundinamarca lost
Col$12,349,461,050 as a result. Consequently, the plaintiff petitions for the Chamber to be ordered to pay that amount,
plus penalty interest, plus a penalty of 160% for inaccurate declaration, plus 15% for the tax not paid as an incentive in
affairs involving administrative morality. Mrs. Martha Teresa Briceño de Valencia bought the litigation rights of Mrs.
Omayra Cely and Rosa Elvira Viracachá Tunarosa, who filed the original lawsuit.
Process status: The judicial decree dated May 6, 2008 resolved some evidence and rejected other evidence. For this
reason, the representative of Endesa filed a favorable appeal. Through judicial decree dated June 11, 2008 the Court
ordered the submission of evidence for October 15, 2008 and the submission of private documents that it had rejected
initially. On August 21, 2008 it was decided to withdraw the testimony of Dr. John Bayron Arango, who had stated that
his possible contribution was not significant from a judicial point of view. On August 25, 2008 the Court accepted that
withdrawal. On October 15, 2008 the testimonies of Lucy Cruz de Quiñones, Rodrigo Hernández Estrada and Álvaro
Cala Carrizosa took place. On October 22, 2008 the Court accepted the transfer of litigious rights to be activated on
behalf of Martha Teresa Briceño de Valencia to Rosa Elvira Viracacha Tunarosa and Helder Navarro Carriazo. The
proceeding is pending in regard to the end of the period allowed for producing evidence and transfer for pleadings of
conclusion. At the same time on December 13, 2007 the Tax Authority of Cundinamarca issued a Tax Assessment to the
Chamber of Commerce of Bogotá for Col$44 billion, including a sanction for inaccuracy. The Chamber filed an appeal
for reconsideration on February 13, 2008. The District of Cundinamarca has one year to rule on the appeal. We do not
exclude the possibility that this may result in a dispute relating to an action under administrative law, in which Endesa
Internacional, Enersis Agencia and Chilectra Agencia may be involved as defendants.
Amount: US$30 million
Plaintiff
Defendant
Court
Case/Identification
:
:
:
:
Internal Revenue Service
Enersis S.A.
Tax Court
10.825-07RR
Summary of proceedings: On April 28, 2007, Enersis S.A. was notified of Summons No. 21 of 2007 by the Internal
Revenue Service, whereby this Agency requests that the Income Tax returns filed for business years 2003 and 2004
should be clarified, amended or confirmed. The above Summons refers to several operations performed in those years.
On June 28, 2007, the Summons was answered.
Process Status: On July 31, 2007, the Internal Revenue Service notified Enersis S.A. of Resolution 151, whereby it
accepted Enersis S.A.’s answer to several points in the summons while maintaining its position with regard to others.
The Internal Revenue Service was requested to submit the points of disagreement to an Administrative Reconsideration
with the alternative of an appeal. On December 6, 2007, Enersis S.A. was notified that the resolution held the appeal to
have been filed and a report had been requested from the tax inspector. On April 4, and again on September 15, 2008 the
request for a Report to the Regulatory Agency made was made again. T

annual repor t annual report

Transcripción

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