Presentation - E.On's Offer for Endesa "Equity Story"

E.ON’s offer for Endesa

February 21, 2006

1. Transaction overview

2. A leading power and gas company

3. Financial impact

4. Summary / Q&A

Supporting materials

The transaction represents a transforming step for E.ON

E.ON is making an all-cash offer for 100% of Endesa’s
shares for 27.50 € per share

A major step to increase the scale and geographic scope of
E.ON’s integrated energy business

Meeting all of E.ON’s announced financial criteria

Major attractions to all stakeholders

Offer

price

Main

conditions

Process &
timing

CNMV: Offer document

Endesa shareholders: Waiver of articles of incorporation restrictions, 50.01%
acceptance

Process of filing with CNMV underway

Closing expected by midyear 2006

As stated in Endesa’s 2005 financial statements; including 18.3 bn€ net debt; 4.7 bn€ minorities, and 3.0 bn€ provisions for pensions and labor restructuring

Endesa's undisturbed share price on Friday, September 2, 2005 was €18.56 (closing price)

E.ON envisages the full support of Endesa
management post transaction

Offer price 27.50 € per share, all cash, adjusted for any dividend
payments before closing

Equivalent to 29.1 billion € of equity and stated 26.1 billion € of net
debt, minorities, and provisions for pensions and labor restructuring¹

Premium of 48.2% to Endesa’s undisturbed share price²

Compelling scale

High quality assets

Integrated business model

Complementary geographic fit

Higher growth markets

Integrated business model

E.ON

Endesa

The world’s leading power and gas company

More than 50 million customers in more than 30 countries

More than 600 TWh power and 900 TWh gas sales

More than € 130 billion of enterprise value

The combination of E.ON and Endesa will create the
world's leading power and gas company

1. Transaction overview

2. A leading power and gas company

3. Financial impact

4. Summary / Q&A

Supporting materials

Transformation into a

Focused Energy Company

Integration
and Performance

Growth in the

Energy Business

2000-2003

2003-2005

since 2005

The transaction delivers on E.ON’s clearly articulated
growth strategy

Vision to create the world’s leading power and gas company

E.ON’s strategy to grow in the energy business

Market conditions and outlook are positive for a transaction

Compelling opportunity to acquire leading high-quality positions in
the Spanish, Italian, and Latin American markets in a single
transaction

Europe¹

327 TWh power generation

515 TWh power sales

931 TWh gas sales

41 million customers²

Diversified earnings³

Global scale

2005 figures

Majority controlled customers

Adjusted EBITDA for E.ON; EBITDA for Endesa

4 Generation mix (TWh) as of 2004

Sources: Endesa presentations and reports; E.ON

Endesa

E.ON

The
Americas¹

94 TWh
power
generation

93 TWh
power sales

13 million
customers

Central
Europe

Iberia

Nordic

European
Gas

Latin
America

Italy /

France

EBITDA

Coal

Nuclear

Gas/
Oil

Hydro

Other

TWh

Diversified generation⁴

The combination of E.ON and Endesa creates the
world’s leading power and gas company

Leading Pan-
European position
achieved in

“single shot”

Obtain first-class
positions of scale
in high growth
markets

Creates
world-scale energy
player

Growth regions of Spain, Italy, France, Poland,
Chile, Argentina, Brazil, Colombia, Peru

Complementary portfolio of regions, fuels, and
skills

Strong positions in all European markets

Excellent platform to benefit from future market
integration, enhanced trading, and gas position

Achieving global economies of scale

Broader scope to apply “best practice”

Improved absolute ability to fund capital
expenditures and absorb risk

New strategic dimensions for value creation

Rapidly changing

competitive landscape

250 - 300 GW of new generation
capacity needed in Europe

Major investments in transmission/
increased interconnection

Major investments in gas
infrastructure

Quality scale vital

Significant capital investment
needed in Europe during next 15 years

Energy market environment in Europe is changing

Privatizations (GdF, EdF)

Consolidation in progress
(Suez/Electrabel, EdF/Edison)

Deregulation in final phase

EU vision of a common market

Strong positions in European markets

Regional power markets

European gas market

European CO₂ market

Global LNG and coal
markets

European markets
emerging

EU Vision: One European market

Priority Axes identified by the EC TENS Program for power transmission strengthening

The combined Pan-European presence will provide new
value creation opportunities and is in line with EU vision

Attractive environment

5th largest power market
in Europe

6th largest gas market in
Europe

Strong fundamentals with
annual growth rates of
more than 5%

Positive impact from
regulatory changes

Convergence of
electricity and gas

Integration with Portugal
through Mibel

1 3.4 GW Nuclear, 5.4 GW Hydro, 12.6 GW Thermal, 1.0 GW CHP and renewables

Distribution and Supply

Gas supply

6 bcm supply
contracts

Shares in new
re-gasification
terminals with
10 bcm
capacity

12 million electricity customers

0.5 million gas customers

Market leader in the power
market

Opportunity to expand in the
deregulated gas market

Generation

22 GW of high
quality,
diversified
capacity¹

#1 in the
Spanish
market

Leading integrated position

LŸ

Gas

Lignite

Hydro

Coal

Nuclear

Regas

Endesa assets

Endesa is the leading energy company in the growing
Spanish market

1 80% JV (ASM Brescia owns 20%)

2 65% Joint Venture. Through SNET, Endesa also owns shares in small Polish and Turkish generation facilities

E.ON also acquires growth platforms in the contiguous
Italian, French, and Polish markets

E.ON

Italy

Endesa Italy ¹

6.6 GW generation
capacity

No. 3 position in the
Italian power
generation market

Access to future LNG
re-gasification capacity

E.ON Italy

0.75 million gas
customers

Building 0.8 GW CCGT
power plant

France

SNET ²

2.5 GW generation
capacity

No. 3 position in the
French market

E.ON

2 TWh gas sales

Poland

Endesa

Preliminary agreement
to acquire Dolna Odra

2.0 GW installed
capacity

Ownership of CHP plant
through SNET

Chile

4.5 GW

1.4 m cust.

Brazil

1.0 GW

4.6 m cust.

Colombia

2.7 GW

2.1 m cust.

Argentina

4.5 GW

2.2 m cust.

Peru

1.4 GW

0.9 m cust.

1 Enersis, listed in Santiago and New York, is the largest utility player in Latin America (Endesa owns 60% of Enersis)

Remark: Gross figures at year end 2005

Endesa’s strong position in Latin America represents a
new growth business

Developed & moderate
growing markets with E.ON
presence

1 CEE includes Czech Republic, Slovakia, Hungary, Poland, Romania, and Bulgaria

2 2000 to 2004

3 LatAm (Latin America) includes Chile, Argentina, Brazil, Columbia, and Peru

Source: BP Statistical Review 2005

AAA

BB+
to A

AAA

B- to A

AA-

AAA

Average
annual
growth rate
of power
generation
2001-04

S&P

country
rating

Complemented by faster
growing markets with Endesa
presence

AA+

In summary, E.ON gains access to significant new
growth potential

Enterprise value in billion €

Leading power and gas company

A global energy company

Enterprise value in billion €

Remark: Enterprise value as of February 17, 2006, including minorities at book value, pension and nuclear provisions

Source: Company data; Bloomberg; HSBC analysis

The combination of E.ON and Endesa creates the
leading power and gas group and a global energy
player

Endesa

Southern

Europe &

LatAm

6.0

18.2

Central

Europe

Nordic

(Adj.) EBITDA
in billion€

Revenues/

sales in bn€

Market

Units

Nordic

US-Midwest

Pan-

European

Gas

0.6

1.2

1.6

1.9

2.0

3.5

10.2

17.9

5.3

24.3

Managing

companies

E.ON Corporate Center

Employees

27,204

3,002

5,801

12,891

13,366

44,476

Adjusted EBITDA and sales for E.ON, EBITDA and revenues for Endesa; E.ON’s figures preliminary and unaudited; Endesa is reporting under IFRS

Source: Endesa presentations and financial reports; E.ON

2005 data¹

Endesa will be responsible for managing the new
Market Unit Southern Europe & Latin America

Performance

& Integration

Focused

investments

Active

portfolio

management

Financial

discipline

Strengthen the integrated power and gas business in existing
markets

Expanded platform for growing the business organically and through
focused investments

Continue to manage actively the portfolio

Constant review of portfolio with respect to strategic fit and value
creation

Strict financial discipline

Continued commitment to a strong balance sheet

Proven management philosophy will be applied to the
enlarged platform

Integration of the acquired business a priority

Continued drive for better performance across all markets

Standardized processes across businesses, maximizing efficiency

1. Transaction overview

2. A leading power and gas company

3. Financial impact

4. Summary / Q&A

Supporting materials

•

Earnings enhancing in the first
full year after acquisition

•

Returns exceeding cost of
capital three years after
acquisition in general

•

Not endanger overall group
performance targets

•

Short-term earnings and value
enhancing and long-term superior
growth prospects

•

Improved balance sheet structure
with lower cost of capital

•

Upside through synergies and cost
savings

Fulfillment of all of our criteria

Additional benefits

E.ON’s financial investment criteria

Offer for Endesa will meet all our financial criteria and
has additional benefits

Funding

Rating

Dividends

Commitment to maintain a single A flat (A/A2) credit rating

If necessary to maintain E.ON’s targeted rating, E.ON will issue
equity-like instruments and/or equity (not more than 10% of E.ON’s
share capital)

E.ON confirms its dividend policy

Proposed ordinary dividend of 2.75 €/share for 2005

Proposed special dividend of 4.25 €/share in 2006 relating to
Degussa sale

E.ON offers 27.50 € per share in cash for Endesa resulting in a maximum cash payment of 29.1 billion €¹

Financing of the offer

Guarantee and Term Loan Facility have been provided by HSBC,
Citigroup, JP Morgan, and Deutsche Bank

E.ON will settle the offer with drawdowns under the facility and
existing resources

1 Adjusted for any dividend payments before closing

1. Transaction overview

2. A leading power and gas company

3. Financial impact

4. Summary / Q&A

Supporting materials

“E.ON and Endesa create the world’s leading

power and gas company”

Supporting materials

in million € 2005

Sales 56,399

Adjusted EBITDA³ 10,272

Cashflow from operations 6,601

Electricity sales (in TWh) 404.3

Gas sales (in TWh) 924.4

Employees 79,947

in million € 2005

Revenues 18,229

EBITDA 6,020

Net cash provided by op. activ. 3,362

Electricity sales (in TWh) 203.3

Gas sales (in TWh) 21.1

Employees 27,204

Key figures for E.ON and Endesa 2005

Endesa key figures²

E.ON key figures ¹

Preliminary and unaudited

2005 results [IFRS]

E.ON prepares its consolidated financial statements on the basis of U.S. GAAP. When presented on a consolidated basis, Adjusted EBIT and Adjusted EBITDA are each considered to be non-GAAP financial measures. Adjusted EBIT has been derived from U.S. GAAP net income as follows: Income (loss) from continuing operations before income taxes and minority interests (2005: €7,208 million) has been adjusted to exclude certain non-operating items (2005: €902 million). These items include net book gains resulting from disposals, as well as restructuring expenses and other non-operating earnings of an exceptional nature. In addition, interest income is adjusted using economic criteria, and this figure (2005: -€1,027 million) is also subtracted from income (loss) from continuing operations before income taxes and minority interests. Adding income taxes (2005: -€2,276 million) and minority interests (-€553 million) yields income (loss) from continuing operations (2005: €4,379 million). Net income is then determined by adding to this figure income (loss) from discontinued operations (2005: €3,035 million, consisting primarily the book gains from the disposal of Viterra and Ruhrgas Industries) and certain very minor adjustments, with the result being net income in accordance with U.S. GAAP (2005: €7,407 million). For additional information on E.ON’s calculation of Adjusted EBIT, see E.ON’s Annual Report on Form 20-F for 2004. Adjusted EBIT is calculated by subtracting from adjusted EBITDA depreciation and amortization affecting adjusted EBIT (2005: an aggregate of €2,939 million)

Sources: Endesa 2005 financial statements; E.ON

This presentation does not constitute an invitation to sell or an offer to buy any securities or a solicitation of any vote or approval. Endesa investors and security holders are urged to read the tender offer prospectus from E.ON regarding the proposed tender offer for Endesa when it becomes available, because it will contain important information. The tender offer prospectus and certain complementary documentation will be filed in Spain with the Spanish Comisión Nacional del Mercado de Valores (the “CNMV”). Likewise, a tender offer statement, which will incorporate the prospectus by reference, will be filed in the United States with the U.S. Securities and Exchange Commission (the “SEC”). Investors and security holders may obtain a free copy of the tender offer prospectus (when it is available) and its complementary documentation in the central offices of E.ON, Endesa, the four Spanish Stock Exchanges, and Santander Investment Bolsa SV SA. The prospectus will also be available on the websites of the CNMV (www.cnmv.es) and E.ON (www.eon.com). Likewise, investors and security holders may obtain a free copy of the U.S. tender offer statement (when it is available) and other documents filed by E.ON with the SEC on the SEC’s web site at www.sec.gov. The tender offer statement and these other documents may also be obtained for free from E.ON, when they become available, by directing a request to E.ON AG, External Communications, phone +49-211-4579-453.

This presentation may contain forward-looking statements. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of E.ON and Endesa and the estimates given here. These factors include the inability to obtain necessary regulatory approvals or to obtain them on acceptable terms; the inability to integrate successfully Endesa within the E.ON Group or to realize synergies from such integration; costs related to the acquisition of Endesa; the economic environment of the industries in which E.ON and Endesa operate; and other risk factors discussed in E.ON’s public reports filed with the Frankfurt Stock Exchange and with the SEC (including E.ON’s Annual Report on Form 20-F) and in Endesa’s public reports filed with the CNMV and with the SEC (including Endesa’s Annual Report on Form 20-F). E.ON assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

E.ON prepares its consolidated financial statements in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). This presentation may contain references to certain financial measures (including forward looking measures) that are not calculated in
accordance with U.S. GAAP and are therefore considered "non-GAAP financial measures" within the meaning of the U.S. federal securities laws. E.ON presents a reconciliation of these non-GAAP financial measures to the most comparable U.S. GAAP measure or target, either in this presentation, in its Annual Report, or on its website at www.eon.com. Management believes that the non-GAAP financial measures used by E.ON, when considered in conjunction with (but not in lieu of) other measures that are computed in U.S. GAAP, enhance an understanding of E.ON's results of operations. A number of these non-GAAP financial measures are also commonly used by securities analysts, credit rating agencies, and investors to evaluate and compare the periodic and future operating performance and value of E.ON and other companies with which E.ON competes. These non-GAAP financial measures should not be considered in isolation as a measure of E.ON's profitability or liquidity, and should be considered in addition to, rather than as a substitute for, net income, cash flow provided by operating activities, and the
other income or cash flow data prepared in accordance with U.S. GAAP. The non-GAAP financial measures used by E.ON may differ from, and not be comparable to, similarly titled measures used by other companies.