UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F/A  

(Amendment No. 1)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

For the transition period from                  to  

Commission file number: 1-13240

EMPRESA NACIONAL DE ELECTRICIDAD S.A.

(Exact name of Registrant as specified in its charter)

EMPRESA NACIONAL DE ELECTRICIDAD S.A.

(Translation of Registrant’s name into English)

CHILE

(Jurisdiction of incorporation or organization)

Santa Rosa 76, Santiago, Chile

(Address of principal executive offices)

Fernando Gardeweg, phone: (56-22) 2353-4639, fax: (56-2) 2378-4789, fgr@endesa.cl, Santa Rosa 76, Piso 15, Santiago, Chile

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
American Depositary Shares Representing Common Stock Common Stock, no par value *	New York Stock Exchange New York Stock Exchange

*Listed, not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

US$ 200,000,000	8.625%	Notes due August 1, 2015
US$ 205,881,000	7.875%	Notes due February 1, 2027
US$ 70,780,000	7.325%	Notes due February 1, 2037
US$ 40,416,000	8.125%	Notes due February 1, 2097

(Title of Class)                

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Shares of Common Stock: 8,201,754,580

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

x Yes       ¨ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

¨ Yes      x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

x Yes      ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨ Yes       ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x                                         Accelerated filer ¨                                         Non-accelerated filer ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board x                                 Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

¨    Item 17      ¨ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes       x No

EXPLANATORY NOTE

This Amendment No. 1 to annual report on Form 20-F for the year ended December 31, 2013 (the “Form 20-F”) is filed solely for the purpose of incorporating the conformed signature page, which was inadvertently omitted from the Form 20-F filed by Empresa Nacional de Electricidad S.A. (the “Company”) on April 1, 2014.

Except for the signature page and the updated certifications of our Chief Executive Officer and Chief Financial Officer, this Amendment No. 1 to our Form 20-F does not modify or update other disclosures in, or exhibits to, the Form 20-F.

Endesa Chile’s Simplified Organizational Structure (1)

As of December 31, 2013

(1) Only principal operating subsidiaries are presented here. The percentage listed for each of our subsidiaries represents Endesa Chile’s economic interest in such subsidiary.

(2) Through Endesa Brasil, we carry out our participation in the Brazilian electricity business, which consolidates operations of two generation companies (Endesa Fortaleza and Cachoeira Dourada), one transmission company (CIEN), and two distribution companies (Ampla and Coelce). Endesa Brasil is a subsidiary of our parent company, Enersis.

2

TABLE OF CONTENTS

		Page
Glossary			4
Introduction			9
Technical Terms			10
Calculation of Economic Interest			10
Forward-Looking Statements			10
PART I			13
Item 1.	Identity of Directors, Senior Management and Advisers		13
Item 2.	Offer Statistics and Expected Timetable		13
Item 3.	Key Information		13
Item 4.	Information on the Company		26
Item 4A.	Unresolved Staff Comments		101
Item 5.	Operating and Financial Review and Prospects		101
Item 6.	Directors, Senior Management and Employees		126
Item 7.	Major Shareholders and Related Party Transactions		137
Item 8.	Financial Information		139
Item 9.	The Offer and Listing		140
Item 10.	Additional Information		143
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		159
Item 12.	Description of Securities Other Than Equity Securities		163
Item 13.	Defaults, Dividend Arrearages and Delinquencies		165
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		165
Item 15.	Controls and Procedures		165
Item 16.	Reserved		166
Item 16A.	Audit Committee Financial Expert		166
Item 16B.	Code of Ethics		166
Item 16C.	Principal Accountant Fees and Services		167
Item 16D.	Exemptions from the Listing Standards for Audit Committees		168
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		168
Item 16F.	Change in Registrant’s Certifying Accountant		168
Item 16G.	Corporate Governance		168
Item 16H.	Mine Safety Disclosure		168
PART III			169

3

GLOSSARY

AFP	Administradora de Fondos de Pensiones	A legal entity that manages a Chilean pension fund.
Ampla	Ampla Energia e Serviços S.A.	A publicly held Brazilian distribution company operating in Rio de Janeiro, owned by Endesa Brasil, a subsidiary of our parent company, Enersis.
ANEEL	Agência Nacional de Energia Elétrica	Brazilian governmental agency for electric energy.
Cachoeira Dourada	Centrais Elétricas Cachoeira Dourada S.A.	Brazilian generation company owned by Endesa Brasil, a subsidiary of our parent company, Enersis.
CAMMESA	Compañía Administradora del Mercado Mayorista Eléctrico S.A.	Argentine autonomous entity in charge of the operation of the Mercado Eléctrico Mayorista (Wholesale Electricity Market), or MEM. CAMMESA’s stockholders are generation, transmission and distribution companies, large users and the Secretariat of Energy.
CDEC	Centro de Despacho Económico de Carga	Autonomous entity in two Chilean electric systems in charge of coordinating the efficient operation and dispatch of generation units to satisfy demand.
Celta	Compañía Eléctrica Tarapacá S.A.	Chilean generation subsidiary of Endesa Chile that operates generation plants in the SING. Celta merged with Endesa Eco in November 2013. Endesa Eco merged with San Isidro in September 2013 and San Isidro merged with Pangue in May 2012.
Cemsa	Endesa Cemsa S.A	Energy trading company with operations in Argentina, and a subsidiary of our parent company, Enersis.
Chilectra	Chilectra S.A.	Chilean electricity distribution company operating in the Santiago metropolitan area and owned by our parent company, Enersis.
CIEN	Companhia de Interconexão Energética S.A.	Brazilian transmission company, wholly-owned by Endesa Brasil, a subsidiary of our parent company, Enersis.
CNE	Comisión Nacional de Energía	Chilean National Energy Commission, governmental entity with responsibilities under the Chilean regulatory framework.
Codensa	Codensa S.A. E.S.P.	Colombian distribution company controlled by our parent company, Enersis, which operates mainly in Bogotá.
Coelce	Companhia Energética do Ceará S.A.	A publicly held Brazilian distribution company operating in the state of Ceará. Coelce is controlled by Endesa Brasil, a subsidiary of our parent company, Enersis.

4

COES	Comité de Operación Económica del Sistema	Peruvian entity in charge of coordinating the efficient operation and dispatch of generation units to satisfy demand.
CREG	Comisión de Regulación de Energía y Gas	Colombian Commission for the Regulation of Energy and Gas.
CTM	Compañía de Transmisión del Mercosur S.A.	Argentine transmission company and a subsidiary of Endesa Brasil.
Edegel	Edegel S.A.A.	A publicly held Peruvian generation company and a subsidiary of Endesa Chile.
Edelnor	Empresa de Distribución Eléctrica de Lima Norte S.A.A.	A publicly held Peruvian distribution company with a concession area in the northern part of Lima and a subsidiary of our parent company, Enersis.
Edesur	Empresa Distribuidora Sur S.A.	Argentine distribution company with a concession area in the south of the Buenos Aires greater metropolitan area and a subsidiary of our parent company, Enersis.
El Chocón	Hidroeléctrica El Chocón S.A.	Argentine generation company and a subsidiary of Endesa Chile, with two hydroelectric plants, El Chocón and Arroyito, both located in the Limay River.
Emgesa	Emgesa S.A. E.S.P.	Colombian generation company controlled by Endesa Chile.
Endesa Brasil	Endesa Brasil, S.A.	Brazilian holding company and a subsidiary of our parent company, Enersis.
Endesa Chile	Empresa Nacional de Electricidad S.A.	Our company, a publicly held limited liability stock corporation incorporated under the laws of the Republic of Chile, with operations in Chile, Colombia, Peru and Argentina and an equity interest in Brazil. Registrant of this Report.
Endesa Costanera	Endesa Costanera S.A.	A publicly held Argentine generation company controlled by Endesa Chile.
Endesa Eco	Endesa Eco S.A.	A former Chilean subsidiary of Endesa Chile and owner of Central Eólica Canela S.A. and Ojos de Agua mini hydroelectric plant. Endesa Eco was merged with Celta in November 2013.
Endesa Fortaleza	Central Geradora Termelétrica Fortaleza S.A.	Brazilian generation company that operates a combined cycle plant, located in the state of Ceará. Endesa Fortaleza is wholly-owned by Endesa Brasil, a subsidiary of our parent company, Enersis.

5

Endesa Latinoamérica	Endesa Latinoamérica S.A.U.	A subsidiary of Endesa Spain and owner of 40.3% of our parent company, Enersis. Endesa Latinoamérica was formerly known as Endesa Internacional, S.A.U.
Endesa Spain	Endesa, S.A.	A Spanish electricity generation and distribution company with a 20.3% direct interest and 60.6% beneficial interest in our parent company, Enersis.
Enel	Enel S.p.A.	Italian power company, with a 92.1% controlling ownership of Endesa Spain.
Enersis	Enersis S.A.	Our Chilean parent company, with a 60.0% controlling stake in Endesa Chile.
ENRE	Ente Nacional Regulador de la Electricidad	Argentine national regulatory authority for the energy sector.
ESM	Extraordinary Shareholders’ Meeting	Extraordinary Shareholders’ Meeting.
Etevensa	Empresa de Generación Termoeléctrica Ventanilla S.A.	Peruvian generation company that merged with Edegel in 2006.
FONINVEMEM	Fondo para Inversiones Necesarias que permitan Incrementar la Oferta de Energía Eléctrica en el Mercado Eléctrico Mayorista	Argentine fund created to increase electricity supply in the MEM.
GasAtacama	GasAtacama S.A.	Company involved in gas transportation and electricity generation in northern Chile that is 50% owned by Endesa Chile and it is accounted under the equity method (IRFS 11).
Gener	AES Gener S.A.	Chilean generation company that competes with the Company in Chile, Argentina and Colombia.
GNL Quintero	GNL Quintero S.A.	Company created to develop, build, finance, own and operate a LNG regasification facility at Quintero Bay (Chile) in which LNG is unloaded, stored and regasified.
IDR	Issuer Default Rating	Reflects the relative vulnerability of an entity to default on its financial obligations.
IFRS	International Financial Reporting Standards	Accounting standards adopted by the Company on January 1, 2009.
LNG	Liquefied Natural Gas.	Liquefied natural gas.
MEM	Mercado Eléctrico Mayorista	Wholesale Electricity Market in Argentina, Colombia and Peru.
MME	Ministério de Minas e Energia	Brazilian Ministry of Mines and Energy.

6

NCRE	Non Conventional Renewable Energy	Energy sources which are continuously replenished by natural processes, such as wind, biomass, mini-hydro, geothermal, wave or tidal energy.
NIS	Sistema Interconectado Nacional	National interconnected electric system. There are such systems in Chile, Argentina, Brazil and Colombia.
ONS	Operador Nacional do Sistema Elétrico	Electric System National Operator. Brazilian non-profit private entity responsible for the planning and coordination of operations in interconnected systems.
Osinergmin	Organismo Supervisor de la Inversión en Energía y Minería	Energy and Mining Investment Supervisor Authority, the Peruvian regulatory electricity authority.
OSM	Ordinary Shareholders’ Meeting	Ordinary Shareholders’ Meeting.
Pangue	Empresa Eléctrica Pangue S.A.	A former Chilean subsidiary of Endesa Chile and owner of the Pangue power station. San Isidro merged with Pangue in May 2012 and Endesa Eco merged with San Isidro in September 2013. Celta merged with Endesa Eco in November 2013.
Pehuenche	Empresa Eléctrica Pehuenche S.A.	A publicly held Chilean electricity company, owner of three power stations in the Maule River basin and a subsidiary of Endesa Chile.
San Isidro	Compañía Eléctrica San Isidro S.A.	A former Chilean subsidiary of Endesa Chile and owner of a thermal power station. San Isidro merged with Pangue in May 2012 and Endesa Eco merged with San Isidro in September 2013. Celta merged with Endesa Eco in November 2013.
SEF	Superintendencia de Electricidad y Combustible	Chilean Superintendency of Electricity and Fuels, a governmental entity in charge of supervising the Chilean electricity industry.
SEIN	Sistema Eléctrico Interconectado Nacional	Peruvian interconnected electric system.
SIC	Sistema Interconectado Central	Chilean central interconnected electric system covering all of Chile except the north and the extreme south.
SING	Sistema Interconectado del Norte Grande	Electric interconnected system operating in northern Chile.
SVS	Superintendencia de Valores y Seguros	Chilean authority in charge of supervising public companies, securities and the insurance business.
UF	Unidad de Fomento	Chilean inflation-indexed, Chilean peso-denominated monetary unit.

7

UTA	Unidad Tributaria Anual	Chilean annual tax unit. One UTA equals 12 UTM.
UTM	Unidad Tributaria Mensual	Chilean inflation-indexed monthly tax unit used to define fines, among other purposes.
VAD	Valor Agregado de Distribución	Value added from distribution of electricity.
VNR	Valor Nuevo de Reemplazo	The net replacement value of electricity assets.
XM	Expertos de Mercado S.A. E.S.P.	Colombian company Interconexión Eléctrica S.A. (ISA)’s subsidiary that provides system management in real time services in electrical, financial and transportation sectors.

8

INTRODUCTION

As used in this Report on Form 20-F, first person personal pronouns such as “we,” “us” or “our” refer to Empresa Nacional de Electricidad S.A. (Endesa Chile or the Company) and our consolidated subsidiaries unless the context indicates otherwise. Unless otherwise noted, our interest in our principal subsidiaries and jointly-controlled entities and associates is expressed in terms of our economic interest as of December 31, 2013.

We are a Chilean company engaged directly and through our subsidiaries and jointly-controlled entities in the electricity generation business in Chile, Argentina, Colombia and Peru. We also have unconsolidated equity investments in companies engaged primarily in the electricity generation, transmission and distribution business in Brazil. As of the date of this Report, our direct controlling entity, Enersis S.A. (“Enersis”), owns a 60.0% stake in us. Endesa, S.A. (“Endesa Spain”), a Spanish electricity generation and distribution company, beneficially owns 60.6% of Enersis. Enel S.p.A. (“Enel”), an Italian generation and distribution company, owns 92.1% of Endesa Spain through Enel Energy Europe, S.L.U.

Financial Information

In this Report on Form 20-F, unless otherwise specified, references to “U.S. dollars,” “US$,” are to dollars of the United States of America; references to “pesos” or “Ch$” are to Chilean pesos, the legal currency of Chile; references to “Ar$” or “Argentine pesos” are to the legal currency of Argentina; references to “R$,” or “reais” are to Brazilian reais, the legal currency of Brazil; references to “soles” are to Peruvian Nuevo Sol, the legal currency of Peru; references to “CPs” or “Colombian pesos” are to the legal currency of Colombia; references to “€” or “Euros” are to the legal currency of the European Union; and references to “UF” are to Development Units (Unidades de Fomento).

The Unidad de Fomento is a Chilean inflation-indexed, peso-denominated monetary unit that is adjusted daily to reflect changes in the official Consumer Price Index (“CPI”) of the Chilean National Institute of Statistics (Instituto Nacional de Estadísticas). The UF is adjusted in monthly cycles. Each day in the period beginning on the tenth day of the current month through the ninth day of the succeeding month, the nominal peso value of the UF is indexed in order to reflect a proportionate amount of the change in the Chilean CPI during the prior calendar month. As of December 31, 2013, one UF was equivalent to Ch$ 23,309.56. The U.S. dollar equivalent of one UF was US$ 44.43 as of December 31, 2013, using the Observed Exchange Rate reported by the Central Bank of Chile (Banco Central de Chile) as of December 31, 2013 of Ch$ 524.61 per US$ 1.00. The U.S. dollar observed exchange rate (dólar observado) (the “Observed Exchange Rate”), which is reported by the Central Bank of Chile and published daily on its web page, is the weighted average exchange rate of the previous business day’s transactions in the Formal Exchange Market. Nevertheless, the Central Bank of Chile may intervene by buying or selling foreign currency on the Formal Exchange Market to attempt to maintain the Observed Exchange Rate within a desired range.

As of March 31, 2014, one UF was equivalent to Ch$ 23,606.97. The U.S. dollar equivalent of one UF was US$ 42.83 on March 31, 2014, using the Observed Exchange Rate reported by the Central Bank of Chile as of such date of Ch$ 551.18 per US$ 1.00.

Our consolidated financial statements and, unless otherwise indicated, other financial information concerning Endesa Chile included in this Report are presented in Chilean pesos. Since January 1, 2009, Endesa Chile has prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standard Board (“IASB”).

Our subsidiaries are consolidated and all their assets, liabilities, income, expenses and cash flows are included in the consolidated financial statements after making the adjustments and eliminations related to intra-group transactions.

Until December 31, 2012, jointly-controlled companies were consolidated using the proportionate consolidation method. Commencing January 1, 2013, we began recording these jointly controlled companies using the equity method, as required by IFRS 11, “Joint Arrangements”. This change affected our accounting for Centrales

9

Hidroeléctricas de Aysén S.A., Inversiones GasAtacama Holding Ltda. and their subsidiaries and Transmisora Eléctrica de Quillota Ltda. Our audited consolidated financial statements as of and for the years ended December 31, 2012 and 2011 were restated to give retrospective effect to the application of IFRS 11. These changes do not have any effect on equity or net income, in both cases, attributable to the shareholders of Endesa Chile. Our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 are presented in the form in which they were originally prepared in accordance with IFRS, as issued by the IASB, and do not reflect the application of IFRS 11.

Investments in associated companies over which the Company exercises significant influence are recorded in our consolidated financial statements using the equity method. For detailed information regarding subsidiaries, jointly-controlled entities and associated companies, see Appendices 1, 2 and 3 to the consolidated financial statements.

For the convenience of the reader, this Report contains translations of certain Chilean peso amounts into U.S. dollars at specified rates. Unless otherwise indicated, the U.S. dollar equivalent for information in Chilean pesos is based on the Observed Exchange Rate for December 31, 2013, as defined in “Item 3. Key Information—A. Selected Financial Data—Exchange Rates.” The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos. No representation is made that the Chilean peso or U.S. dollar amounts shown in this Report could have been or could be converted into U.S. dollars or Chilean pesos, as the case may be, at such rate or at any other rate. See “Item 3. Key Information—A. Selected Financial Data—Exchange Rates.”

Numbers in tables may not total exactly due to rounding.

Technical Terms

References to “TW” are to terawatts; references to “GW” and “GWh” are to gigawatts and gigawatt hours, respectively; references to “MW” and “MWh” are to megawatts and megawatt hours, respectively; references to “kW” and “kWh” are to kilowatts and kilowatt-hours, respectively; references to “kV” are to kilovolts, and references to “MVA” are to megavolt amperes. Unless otherwise indicated, statistics provided in this Report with respect to the installed capacity of electricity generation facilities are expressed in MW. One TW equals 1,000 GW, one GW equals 1,000 MW and one MW equals 1,000 kW.

Statistics relating to aggregate annual electricity production are expressed in GWh and based on a year of 8,760 hours, except for leap years (such as 2012), which are based on 8,784 hours. Statistics relating to installed capacity and production of the electricity industry do not include electricity of self-generators. Statistics relating to our production do not include electricity consumed by us by our own generation units.

Energy losses experienced by generation companies during transmission are calculated by subtracting the number of GWh of energy sold from the number of GWh of energy generated (excluding their own energy consumption and losses on the part of the power plant), within a given period. Losses are expressed as a percentage of total energy generated.

Calculation of Economic Interest

References are made in this Report to the “economic interest” of Endesa Chile in its related companies. In circumstances where we do not directly own an interest in a related company, our economic interest in such ultimate related company is calculated by multiplying the percentage of economic interest in a directly held related company by the percentage of economic interest of any entity in the ownership chain of such related company. For example, if we own 60% of a directly held subsidiary and that subsidiary owns 40% of an associate, our economic interest in such associate would be 60% times 40%, or 24%.

Forward-Looking Statements

This Report contains statements that are or may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements appear throughout this Report and include statements regarding our intent, belief or current expectations, including, but not limited to, any statements concerning:

— our capital investment program;

10

— trends affecting our financial condition or results from operations;

— our dividend policy;

— the future impact of competition and regulation;

— political and economic conditions in the countries in which we or our related companies operate or may operate in the future;

— any statements preceded by, followed by or that include the words “believes,” “expects,” “predicts,” “anticipates,” “intends,” “estimates,” “should,” “may” or similar expressions; and

— other statements contained or incorporated by reference in this Report regarding matters that are not historical facts.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to:

— changes in the regulatory framework of the electricity industry in one or more of the countries in which we operate;

— our ability to implement proposed capital expenditures, including our ability to arrange financing where required;

— the nature and extent of future competition in our principal markets;

— political, economic and demographic developments in the markets in South America where we conduct our business; and

— the factors discussed below under “Risk Factors.”

You should not place undue reliance on such statements, which speak only as of the date that they were made. Our independent public accountants have not examined or compiled the forward-looking statements and, accordingly, do not provide any assurance with respect to such statements. You should consider these cautionary statements together with any written or oral forward-looking statements that we may issue in the future. We do not undertake any obligation to release publicly any revisions to forward-looking statements contained in this Report to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

For all these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

RECENT DEVELOPMENTS

Bocamina II’s Shutdown

On December 17, 2013, the Court of Concepción, in southern Chile, ordered the temporary shutdown of our 350 MW coal-fired thermal power plant, Bocamina II. The court granted an injunction in favor of local fishermen who claim our facility is harmful to marine life and causes pollution. The financial impact of Bocamina II’s shutdown had no material effect on our 2013 results because its operation ceased near the end of the fiscal year. However, as of the date of this Report, the plant remains shut down while we appeal the case. On December 23, 2013, we submitted all required documents and studies to the Chilean Environmental Superintendence. Our operating margin is reduced between US$ 20 million and US$ 44 million each month the facility remains shut down.

11

HidroAysén Hydroelectric Project

In August 2008, HidroAysén submitted an Environmental Impact Assessment Study to the Chilean environmental authority for its approval. On May 9, 2011, we received a favorable environmental qualification resolution, though it contained certain conditions. In June 2011, opponents to the project filed 34 requests for review, and HidroAysén filed one, with the Council of Ministers, consisting of six cabinet members chaired by the Minister of the Environment, all requesting the review of certain conditions established in the resolution. By law, the authority has 60 business days to review the submission. In our cause, the authority took over two years and requested additional studies. On January 30, 2014, toward the end of former Chilean President Sebastián Piñera’s term, the Council of Ministers met to review the appeals. The majority of the issues were resolved, but the Council requested additional background information and new studies on certain points. In March 2014, Chilean President Michelle Bachelet took office and a new Council of Ministers was convened, which repealed the Council’s earlier decisions. The new Council stated it would review the matter once again and resolve all claims within the 60 business day timeframe established by law. We are awaiting the decision of the Council.

GasAtacama Acquisition

On March 31, 2014, the Board of Directors of Endesa Chile approved the acquisition from Southern Cross Latin American Private Equity Fund III, LP (“Southern Cross”) of all of its interest in Inversiones GasAtacama Holding Ltda. (“GasAtacama Holding”), which owns 50% of GasAtacama. Endesa Chile currently holds a 48.1% economic interest in GasAtacama, and Enersis beneficially owns the remaining 1.9%. An affiliate of Southern Cross will assign Endesa Chile a US$ 28,330,155 promissory note executed by an affiliate of GasAtacama Holding in favor of the Southern Cross affiliate. Endesa Chile will pay US$ 309 million for the shares and the assignment of the promissory note. The transaction is in settlement of an arbitral dispute between Southern Cross and Endesa Chile relating to the terms of a right of first refusal provision in a shareholders agreement entered into by the parties and relating to GasAtacama Holding. Completion of the transaction is subject to execution and delivery of definitive documentation by the parties on or before April 30, 2014.

Los Cóndores Hydroelectric Project

On March 27, 2014, the Endesa Chile Board of Directors authorized the 150 MW Los Cóndores hydroelectric project, with a total investment, including the transmission line, of a US$ 661.5 million. Los Cóndores is in Chile’s seventh region and will generate power from the Laguna El Maule reservoir. Commercial start-up is expected by the end of 2018.

12

PART I

Item 1.     Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.     Offer Statistics and Expected Timetable

Not applicable.

Item 3.     Key Information

A. Selected Financial Data.

The following summary of consolidated financial data should be read in conjunction with our audited consolidated financial statements included in this Report. The consolidated financial data as of and for the years ended December 31, 2010 and 2009 are derived from our audited consolidated financial statements not included in this Report. Our audited consolidated financial statements as of and for the years ended December 31, 2013, 2012, and 2011 were prepared in accordance with IFRS, as issued by the IASB.

Until December 31, 2012, jointly-controlled companies were consolidated using the proportionate consolidation method. Commencing January 1, 2013, we began recording these jointly controlled companies using the equity method, as required by IFRS 11, “Joint Arrangements”. This change affected our accounting for Centrales Hidroeléctricas de Aysén S.A., Inversiones GasAtacama Holding Ltda. and their subsidiaries and Transmisora Eléctrica de Quillota Ltda. Our audited consolidated financial statements as of and for the years ended December 31, 2012 and 2011 were restated to give retrospective effect to the application of IFRS 11. These changes do not have any effect on equity or net income, in both cases, attributable to the shareholders of Endesa Chile. Our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 are presented in the form in which they were originally prepared in accordance with IFRS, as issued by the IASB, and do not reflect the application of IFRS 11.

Amounts are expressed in millions except for ratios, operating data, shares and ADS (American Depositary Shares) data. For the convenience of the reader, all data presented in U.S. dollars in the following summary, as of and for the year ended December 31, 2013, is translated at the Observed Exchange Rate for that date of Ch$ 524.61 per US$ 1.00. No representation is made that the Chilean peso or U.S. dollar amounts shown in this Report could have been or could be converted into U.S. dollars or Chilean pesos, at such rate or at any other rate. For more information concerning historical exchange rates, see “— Exchange Rates” below.

13

The following tables set forth the selected consolidated financial data of Endesa Chile for the periods indicated and the operating data by country:

	As of and for the year ended December 31,
	2013 (1)		2013		2012 (2)		2011 (2)		2010		2009
	(US$ millions)						(Ch$ millions)
Consolidated income statement data
Revenues		3,865		2,027,432		2,320,385		2,284,265		2,435,382		2,418,919
Operating expense (3)		(2,372)		(1,244,593)		(1,707,969)		(1,517,575)		(1,544,658)		(1,401,988)
Operating income		1,493		782,839		612,416		766,690		890,724		1,016,931
Financial income (expense), net		(261)		(137,130)		(146,995)		(119,091)		(119,717)		(170,796)
Total gain (loss) on sale of non-current assets not held for sale		5		2,564		765		973		1,621		65
Other non-operating income		229		120,140		135,670		139,893		91,947		98,368
Net income before tax		1,465		768,413		601,856		788,465		864,575		944,568
Income tax		(391)		(204,907)		(182,833)		(207,330)		(179,964)		(172,468)
Net income		1,074		563,506		419,023		581,135		684,611		772,100
Net income attributable to shareholders of Endesa Chile		675		353,927		234,335		446,874		533,556		627,053
Net income attributable to non-controlling interests		399		209,579		184,688		134,261		151,055		145,047
Net income (loss) from continuing operations per share, basic and diluted (Ch$ / US$)		0.08		43.15		28.57		54.49		65.05		76.45
Net income (loss) from continuing operations per ADS (Ch$ / US$)		2.47		1,294.50		857.13		1,634.70		1,953.00		2,293.50
Net income (loss) per Share, basic and diluted (Ch$ / US$ per share)		0.08		43.15		28.57		54.49		65.05		76.45
Net income (loss) per ADS (Ch$ / US$ per ADS)		2.47		1,294.50		857.13		1,634.70		1,953.00		2,293.50
Cash dividends per share (Ch$ / US$ per share)		0.027		14.29		27.24		32.53		17.53		25.25
Cash dividends per ADS (Ch$ / US$ per ADS)		0.82		428.57		817.28		975.90		525.90		757.50
Number of shares of common stock (millions)		8,202		8,202		8,202		8,202		8,202		8,202
Number of ADS (millions)		—		12		14		13		11		13
Consolidated balance sheet data
Total assets		12,890		6,762,125		6,453,231		6,506,747		6,034,872		6,169,353
Non-current liabilities		3,690		1,935,919		1,952,720		2,159,729		1,969,055		2,233,249
Equity attributable to owners of parent		5,055		2,651,968		2,541,242		2,558,538		2,376,487		2,069,086
Equity attributable to non-controlling interests		1,784		935,846		893,251		882,460		728,340		885,916
Total equity		6,839		3,587,814		3,434,493		3,440,998		3,104,827		2,995,002
Capital stock (4)		2,931		1,537,723		1,537,723		1,537,723		1,537,723		1,537,723
Other consolidated financial data
Capital expenditures (CAPEX) (5)		557		292,017		257,483		263,608		258,790		316,002
Depreciation, amortization and impairment losses (6)		374		196,155		195,685		179,978		179,714		240,142

(1) Solely for the convenience of the reader, Chilean peso amounts have been translated into U.S. dollars at the exchange rate of Ch$ 524.61 per U.S. dollar, the Observed Exchange Rate for December 31, 2013.

(2) Restated as a result of the application of IFRS 11.

(3) Operating expense includes selling and administration expense.

(4) Includes share premium.

(5) CAPEX figures represent actual payments for each year.

(6) For further detail please refer to Notes 7C and 26 to the Consolidated Financial Statements.

14

	As of and for the year ended December 31,
	2013		2012		2011		2010		2009
Operating data by country
Endesa Chile
Installed capacity in Chile (MW) (1)		5,571		5,571		5,221		5,221		5,260
Installed capacity in Argentina (MW)		3,652		3,652		3,652		3,652		3,652
Installed capacity in Colombia (MW)		2,925		2,914		2,914		2,914		2,895
Installed capacity in Peru (MW)		1,540		1,657		1,668		1,668		1,667
Generation in Chile (GWh) (1) (2)		19,438		19,194		19,296		19,096		20,266
Generation in Argentina (GWh) (2)		10,840		11,207		10,713		10,862		11,877
Generation in Colombia (GWh) (2)		12,748		13,251		12,051		11,237		12,622
Generation in Peru (GWh) (2)		8,391		8,570		8,980		8,293		7,984

(1) Excludes the capacity and generation of GasAtacama, which was included in previous filings, because GasAtacama is now recorded under the equity method due to the application of IFRS 11.

(2) Beginning in 2013, we changed how we calculate our electricity generation. The impact of applying the new criteria on a cumulative basis for 2009 through 2012 is not material. We now report the energy effectively available for sales in all countries.

Exchange Rates

Fluctuations in the exchange rate between the Chilean peso and the U.S. dollar will affect the U.S. dollar equivalent of the peso price of our shares of common stock on the Santiago Stock Exchange (Bolsa de Comercio de Santiago), the Chilean Electronic Stock Exchange (Bolsa Electrónica de Chile) and the Valparaíso Stock Exchange (Bolsa de Corredores de Valparaíso). These exchange rate fluctuations will likely affect the price of our ADSs and the conversion of cash dividends relating to the common shares represented by ADSs from Chilean pesos to U.S. dollars. In addition, to the extent that significant financial liabilities of the Company are denominated in foreign currencies, exchange rate fluctuations may have a significant impact on earnings.

In Chile, there are two currency markets, the Formal Exchange Market (Mercado Cambiario Formal) and the Informal Exchange Market (Mercado Cambiario Informal). The Formal Exchange Market is comprised of banks and other entities authorized by the Central Bank of Chile. The Informal Exchange Market is comprised of entities that are not expressly authorized to operate in the Formal Exchange Market, such as certain foreign exchange houses and travel agencies, among others. The Central Bank of Chile has the authority to require that certain purchases and sales of foreign currencies be carried out on the Formal Exchange Market. Both the Formal and Informal Exchange Markets are driven by free market forces. Current regulations require that the Central Bank of Chile be informed of certain transactions and that they be effected through the Formal Exchange Market.

The U.S. dollar observed exchange rate (dólar observado) (the “Observed Exchange Rate”), which is reported by the Central Bank of Chile and published daily on its web page, is the weighted average exchange rate of the previous business day’s transactions in the Formal Exchange Market. Nevertheless, the Central Bank of Chile may intervene by buying or selling foreign currency on the Formal Exchange Market to attempt to maintain the Observed Exchange Rate within a desired range.

The Informal Exchange Market reflects transactions carried out at an informal exchange rate (the “Informal Exchange Rate”). There are no limits imposed on the extent to which the rate of exchange in the Informal Exchange Market can fluctuate above or below the Observed Exchange Rate. Foreign currency for payments and distributions with respect to the ADSs may be purchased either in the Formal or the Informal Exchange Market, but such payments and distributions must be remitted through the Formal Exchange Market.

The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos. As of December 31, 2013, the U.S. dollar exchange rate used by us was Ch$ 524.61 per US$ 1.00.

15

The following table sets forth the low, high, average and period-end Observed Exchange Rate for U.S. dollars for the periods set forth below, as reported by the Central Bank of Chile:

	Daily Observed Exchange Rate (Ch$ per US$) (1)
Year ended December 31,	Low (2)		High (2)		Average (3)		Period-end
2013		466.50		533.95		498.83		524.61
2012		469.65		519.69		486.31		479.96
2011		455.91		533.74		483.45		519.20
2010		468.01		549.17		510.38		468.01
2009		491.09		643.87		554.22		507.10
Month ended
March 2014		550.53		573.24		n.a.		551.18
February 2014		546.94		563.32		n.a.		559.38
January 2014		527.53		553.84		n.a.		553.84
December 2013		523.76		533.95		n.a.		524.61
November 2013		512.53		529.64		n.a.		529.64
October 2013		493.96		508.58		n.a.		507.64

Source: Central Bank of Chile.

(1) Nominal figures.

(2) Exchange rates are the actual low and high, on a day-by-day basis for each period.

(3) The average of the exchange rates on the last day of each month during the period.

As of March 31, 2014, the U.S. dollar exchange rate was Ch$ 551.18 per US$ 1.00.

Calculation of the appreciation or devaluation of the Chilean peso against the U.S. dollar in any given period is made by determining the percent change between the reciprocals of the Chilean peso equivalent of US$ 1.00 at the end of the preceding period and the end of the period for which the calculation is being made. For example, to calculate the appreciation of the year-end Chilean peso in 2013, one determines the percent change between the reciprocal of Ch$ 479.96 (the value of one U.S. dollar as of December 31, 2012) and the reciprocal of Ch$ 524.61 (the value of one U.S. dollar as of December 31, 2013). In this example, the percentage change between 0.002084 (the reciprocal of Ch$ 479.96) and 0.001906 (the reciprocal of Ch$ 524.61) is negative 8.5%, which represents the 2013 year-end devaluation of the Chilean peso against the 2012 year-end U.S. dollar. A positive percentage change means that the Chilean peso appreciated against the U.S. dollar, while a negative percentage change means that the Chilean peso devaluated against the U.S. dollar.

The following table sets forth the period-end rates for U.S. dollars for the years ended December 31, 2009 through December 31, 2013 and through the date indicated in the table below, based on information published by the Central Bank of Chile.

	Chilean Peso Equivalent of US$ 1
	Period End		Appreciation (Devaluation) (1)
Year ended December 31,	(in Ch$)		(in %)
2013		524.61		(8.5)
2012		479.96		8.2
2011		519.20		(9.9)
2010		468.01		8.4
2009		507.10		25.5

Source: Central Bank of Chile.

(1) Calculated based on the variation of period-end exchange rates.

16

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

D. Risk Factors.

A financial or other crisis in any region worldwide can have a significant impact on the countries in which we operate, and consequently, may adversely affect our operations, as well as our liquidity.

The five countries in which we operate are vulnerable to external shocks, including financial and political events, which could cause significant economic difficulties and affect their growth. If any of these economies experience lower than expected economic growth or a recession, it is likely that our customers will demand less electricity. Furthermore, some of our customers may experience difficulties paying their electric bills, possibly increasing our uncollectible accounts. Any of these situations could adversely affect our results of operations and financial condition.

Financial and political crisis in other parts of the world could also adversely affect our business. For example, the current crisis in Ukraine could result in higher fuel prices worldwide, which in turn could increase our cost of fuel for our thermal generation plants and adversely affect our results of operations and financial condition.

In addition, a financial crisis and its disruptive effects on the financial industry could adversely impact our ability to obtain new bank financings on the same historical terms and conditions. Our ability to tap the capital markets in the five countries in which we operate, as well as the international capital markets for other sources of liquidity, may also be diminished, or such financing may be available only at higher interest levels. Reduced liquidity could, in turn, adversely affect our capital expenditures, our long-term investments and acquisitions, our growth prospects and our dividend payout policy.

South American economic fluctuations are likely to affect our results from operations and financial condition, as well as the value of our securities.

All of our operations are located in five South American countries. Accordingly, our consolidated revenues may be affected by the performance of South American economies as a whole. If local, regional, or worldwide economic trends adversely affect the economy of any of the five countries in which we have investments or operations, our financial condition and results from operations could be adversely affected. Moreover, we have investments in volatile countries, such as Argentina. Insufficient cash flows for our subsidiaries located in Argentina have, in some cases, resulted in their inability to meet debt obligations and the need to seek waivers to comply with restrictive debt covenants.

The majority of our operating income is generated in Chile and Colombia, and as a result our financial condition and results of operations are particularly dependent on Chilean and Colombian economic performance. In 2013, Chilean GDP increased by 4.2% compared to a 5.6% increase in 2012. In 2014, Chilean GDP is forecast to grow by 3.75% to 4.75% according to the Central Bank of Chile. In 2013, Colombian GDP increased by 4.0%, as it did in 2012. In 2014, Colombian GDP is forecast to grow by 4.5% according to the Central Bank of Colombia. Future adverse developments in the Chilean and Colombian economies may impair our ability to execute our strategic plans, which could adversely affect our results of operations and financial condition.

In addition, South American financial and securities markets are, to varying degrees, influenced by economic and market conditions in other countries. Although economic conditions are different in each country, investor reaction to developments in one country may have a significant contagion effect on the securities of issuers in other countries, including Chile. Chilean financial and securities markets may be adversely affected by events in other countries, which could adversely affect the value of our securities.

17

Certain South American countries have been historically characterized by frequent and occasionally drastic economic interventionist measures by governmental authorities, including expropriations, which may adversely affect our business and financial results.

Governmental authorities have altered monetary, credit, tariff, tax and other policies to influence the course of the economies of Argentina, Brazil, Colombia and Peru. To a lesser extent, the Chilean government has also exercised in the past and continues to exercise a substantial influence over many aspects of the private sector, which may result in changes to economic or other policies. These governmental actions, intended to control inflation and affect other policies, have often involved wage, price and tariff rate controls, as well as other interventionist measures, such as expropriation or nationalization. For example, Argentina froze bank accounts and imposed capital restrictions in 2001, nationalized the private sector pension funds in 2008, used its Central Bank reserves to pay down indebtedness maturing in 2010 and expropriated Repsol’s 51% stake in YPF in 2012. In 2010, Colombia imposed an equity tax to finance reconstruction and repair efforts related to severe flooding, which resulted in an extraordinary tax expense accrual booked in January 2011 for taxes payable in 2011 through 2014.

Changes in the policies of these governmental and monetary authorities with respect to tariffs, exchange controls, regulations and taxation could reduce our profitability. Inflation, devaluation, social instability and other political, economic or diplomatic developments, including the response by governments in the region to these circumstances, could also reduce our profitability. Any of these scenarios could adversely affect our results of operations and financial condition.

Our electricity business is subject to risks arising from natural disasters, catastrophic accidents and acts of terrorism, which could adversely affect our operations, earnings and cash flow.

Our primary facilities include power plants, transmission and distribution assets, pipelines, LNG terminals and re-gasification plants, storage and chartered LNG tankers. Our facilities may be damaged by earthquakes, flooding, fires, other catastrophic disasters arising from natural or accidental human causes, as well as acts of terrorism. A catastrophic event could cause disruptions in our business, significant decreases in revenues due to lower demand or significant additional costs to us not covered by our business interruption insurance. There may be lags between a major accident or catastrophic event and the final reimbursement from our insurance policies, which typically carry a deductible and are subject to per event policy maximums.

As an example, on February 27, 2010, Chile experienced a major earthquake in the Bío-Bío region, with a magnitude of 8.8 on the Richter scale, followed by a very destructive tsunami. Our Bocamina and Bocamina II thermal generation units, which are located near the epicenter, sustained significant damage as a result of the earthquake.

A continuing financial crisis in Argentina or a deeper devaluation of the Argentine peso could have an adverse effect on our debt.

The Argentine peso is under increasing devaluation pressure against the U.S. dollar. The Argentine government is actively intervening in the currency market in response to capital flight from the country. Currently, Argentina is making incremental adjustments to the Argentine peso and imposing tight restrictions on buying and selling foreign currencies in the country. Media reports from the country describe a robust informal parallel market (referred to as the blue dollar market) in which the Argentine peso appears to have depreciated more steeply than the “official” rate. Because there is no liquidity in the derivatives market in Argentina, our debt is exposed to any further devaluation in the Argentine peso.

Argentina’s sovereign creditworthiness is deteriorating, based on market data and reports from credit ratings agencies. The insurance cost of sovereign bonds, as measured by credit default swaps, increased to 16.5% from 14.4% during the last twelve months, which indicates an increased probability of a distressed credit event. Argentina’s sovereign debt rating is subject to downgrade actions over the coming months as reflected by the negative outlook established by the major rating agencies. For instance, Standard & Poor’s downgraded the country’s sovereign credit rating to “CCC+” and maintained a negative outlook in September 2013. Further deterioration to Argentina’s economy could adversely affect our results of operations and financial condition.

18

We are subject to financing risks, such as those associated with funding our new projects and capital expenditures, and risks related to refinancing our maturing debt; we are also subject to debt covenant compliance, all of which could adversely affect our liquidity.

As of December 31, 2013, our debt totaled Ch$ 1,894 billion.

Our debt had the following maturity timetable:

— Ch$ 354 billion in 2014;

— Ch$ 254 billion from 2015 to 2016;

— Ch$ 163 billion from 2017 to 2018; and

— Ch$ 1,123 billion thereafter.

Set forth below is a breakdown by country for debt maturing in 2014:

— Ch$ 130 billion for Argentina;

— Ch$ 127 billion for Chile;

— Ch$ 66 billion for Colombia; and

— Ch$ 31 billion for Peru.

Some of our debt agreements are subject to (1) financial covenants, (2) affirmative and negative covenants, (3) events of default, (4) mandatory prepayments for contractual breaches and (5) certain change of control clauses for material mergers and divestments, among other provisions. A significant portion of our financial indebtedness is subject to cross default provisions, which have varying definitions, criteria, materiality thresholds and applicability with respect to subsidiaries that could give rise to such a cross default.

In the event that we or our subsidiaries breach any of these material contractual provisions, our creditors and bond holders may demand immediate repayment, and a significant portion of our indebtedness could become due and payable.

We may be unable to refinance our indebtedness or obtain such refinancing on terms acceptable to us. In the absence of such refinancing, we could be forced to dispose of assets in order to make the payments due on our indebtedness under circumstances that might not be favorable to obtaining the best price for such assets. Furthermore, we may be unable to sell our assets quickly enough, or at sufficiently high prices, to enable us to make such payments.

We may also be unable to raise the necessary funds required to finish our projects under development or under construction. Market conditions prevailing at the moment we require these funds or other unforeseen project costs can compromise our ability to finance these projects and expenditures.

As of the date of this Report, Argentina continues to be the country in which we operate with the highest refinancing risk. As of December 31, 2013, the third-party debt of our Argentine subsidiaries amounted to Ch$ 143 billion. As long as fundamental issues concerning the electricity sector remain unresolved, we will roll over our outstanding Argentine debt to the extent we are able to do so. If our creditors will not continue to roll over our debt when it becomes due and we are unable to refinance such obligations, we could default on such indebtedness.

Our Argentine subsidiary, Endesa Costanera, did not make any installment payments due in 2012 and 2013 under the terms of a 1996 supplier credit agreement with Mitsubishi Corporation (“MC”). As of December 31, 2013, Endesa Costanera has missed US$ 68.5 million in payments, including principal and interest. It has experienced difficulties in making timely payments under its agreement with MC on a recurring basis since the Argentine crisis began in 2002, but had received waivers from MC in the past expressing its willingness to renegotiate payments. Additionally, MC has liens over the Mitsubishi combined cycle power plant at Endesa Costanera.

19

As of the date of this Report, Endesa Costanera has not received any waivers for the past-due payments or any acceleration notices. We continue with active negotiations aimed at restructuring the debt. If MC were to declare an event of default and accelerate payment of the US$ 185 million principal and interest balance under the supplier credit agreement, all outstanding Endesa Costanera debt (Ch$ 117 billion) would be accelerated and Endesa Costanera would be required to enter into bankruptcy proceedings. For more information, see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources”.

Our inability to finance new projects or capital expenditures or to refinance our existing debt could adversely affect our results of operation and financial condition.

We may not be able to enter into suitable investments, alliances and acquisitions.

On an ongoing basis, we review acquisition prospects that would augment our market coverage or supplement our existing businesses, though there can be no assurance that we will be able to identify and consummate suitable acquisition transactions in the future. The acquisition and integration of independent companies or companies that we do not control is generally a complex, costly and time-consuming process and requires significant efforts and expenditures. If we consummate an acquisition, it could result in the incurrence of substantial debt and assumption of unknown liabilities, the potential loss of key employees from the acquired company, amortization expenses related to tangible assets and the diversion of our management’s attention from other business concerns. In addition, any delays or difficulties encountered in connection with acquisitions and the integration of multiple operations could have a material adverse effect on our business, financial condition or results of operations.

Since our generation business depends heavily on hydrological conditions, drought conditions may adversely affect our profitability.

Approximately 59% of our consolidated installed generation capacity in 2013 was hydroelectric. Accordingly, extreme hydrological conditions could adversely affect our business, results of operations and financial condition. In the last few years, regional hydrology has been affected by two climactic phenomena — El Niño and La Niña — that influence rainfall regularity and may lead to droughts. The effects of El Niño or La Niña can unevenly affect the hydrology of the countries where we operate.

During periods of drought, thermal plants, including our facilities that use natural gas, fuel oil or coal as fuel, are used more frequently. Operating costs of thermal plants can be considerably higher than those of hydroelectric plants. Our operating expenses increase during these periods, and, depending on our commercial obligations, we may have to buy electricity at spot prices in order to meet our contractual supply obligations. The cost of these electricity purchases may exceed the price at which we sell contracted electricity, thus producing losses from those contracts.

Governmental regulations may adversely affect our business.

We are subject to extensive regulation of the tariffs we charge our customers and other aspects of our business, and these regulations may adversely affect our profitability. For example, the Chilean government can impose electricity rationing during drought conditions or prolonged failures of power facilities. If, during rationing, we are unable to generate enough electricity to comply with our contractual obligations, we may be forced to buy electricity at the spot price, as even a severe drought does not release us from our contractual obligations as a force majeure event. The spot price may be significantly higher than our costs to generate the electricity and can be as high as the “cost of failure” set by the Chilean National Energy Commission (the “CNE”). This “cost of failure,” which is updated semiannually by the CNE, is a measurement of how much final users would pay for one extra MWh under rationing conditions. If we were unable to buy enough electricity at the spot price to comply with our contractual obligations, then we would have to compensate our regulated customers for the electricity we failed to provide at the rationed price. Rationing periods may occur in the future, and consequently our generation subsidiaries may be required to pay regulatory penalties if they fail to provide adequate service under their contractual obligations. Material rationing policies imposed by regulatory authorities in any of the countries in which we operate could adversely affect our business, results of operations and financial condition.

20

Electricity regulations issued by governmental authorities in the countries in which we operate may affect the ability of our generation companies (such as Endesa Costanera in Argentina) to collect revenues sufficient to offset their operating costs.

The inability of any company in our consolidated group to collect revenues sufficient to cover operating costs may affect the ability of the affected company to operate as a going concern and may otherwise have an adverse effect on our business, assets, financial results and operations.

In addition, changes in the regulatory framework are often submitted to the legislators and administrative authorities in the countries in which we operate and, if approved, could have a material adverse impact on our business. For instance, in 2005 there was a change in the water rights’ law in Chile that requires us to pay for unused water rights.

Regulatory authorities may impose fines on our subsidiaries, which could adversely affect our results of operations and financial condition.

Our electricity businesses may be subject to regulatory fines for any breach of current regulations, including energy supply failures, in the five countries in which we operate. In Chile, such fines may be imposed for a maximum of 10,000 Annual Tax Units (Unidades Tributarias Anuales) (“UTA”), or Ch$ 4.9 billion using the UTA and foreign exchange rate as of December 31, 2013. In Peru, fines may be imposed for a maximum of 1,400 Treasury Tax Units (Unidad Impositiva Tributaria) (“UIT”) or Ch$ 972 million using the rates as of December 31, 2013. In Colombia, fines may be imposed for a maximum of 2,000 Minimum Monthly Salaries (Salarios Mínimos Mensuales) or Ch$ 315 million. In Argentina, there is no maximum limit for the fines.

Our electricity generation subsidiaries, supervised by their local regulatory entities, may be subject to these fines in cases where, in the opinion of the regulatory entity, operational failures affecting the regular energy supply to the system are the fault of the company; for instance, when the agents are not coordinated with the system operator. In addition, our subsidiaries may be required to pay fines or to compensate customers if those subsidiaries are unable to deliver electricity, even if such failure is due to forces outside of the subsidiaries’ control.

For example, in September 2011, the Chilean Superintendency of Electricity and Fuels (Superintendencia de Electricidad y Combustibles) (“SEF”) imposed Ch$ 816 million in fines on Endesa Chile and Pehuenche due to a blackout that occurred in the Santiago metropolitan region in March 2010. For further information on fines, please refer to Note 34 to our Consolidated Financial Statements.

We depend in part on payments from our subsidiaries, jointly-controlled entities and associates to meet our payment obligations.

In order to pay our obligations, we rely partly on cash from dividends, loans, interest payments, capital reductions and other distributions from our subsidiaries and equity affiliates. The ability of our subsidiaries and equity affiliates to pay dividends, interest payments, loans, and other distributions to us is subject to legal constraints such as dividend restrictions, fiduciary duties, contractual limitations, and foreign exchange controls that may be imposed in any of the five countries where they operate.

Historically, we have been able to access the cash flows of our Chilean subsidiaries, but we have not been similarly able to access at all times the cash flows of our non-Chilean operating subsidiaries due to government regulations, strategic considerations, economic conditions and credit restrictions.

Our future results from operations outside Chile may continue to be subject to greater economic and political uncertainties than what we have experienced in Chile, thereby reducing the likelihood that we will be able to rely on cash flows from operations in those entities to repay our debt.

Dividend Limits and Other Legal Restrictions. Some of our non-Chilean subsidiaries are subject to legal reserve requirements and other restrictions on dividend payments. Other legal restrictions, such as foreign currency controls, may limit the ability of our non-Chilean subsidiaries and equity affiliates to pay dividends and make loan payments

21

or other distributions to us. In addition, the ability of any of our subsidiaries that are not wholly owned to distribute cash to us may be limited by the fiduciary duties of the directors of such subsidiaries to their minority shareholders. Furthermore, some of our subsidiaries may be forced by local authorities, in accordance with applicable regulation, to diminish or eliminate dividend payments. As a consequence of such restrictions, our subsidiaries could, under certain circumstances, be prevented from distributing cash to us.

Contractual Constraints. Distribution restrictions included in certain credit agreements of our subsidiaries Endesa Costanera and El Chocón may prevent dividends and other distributions to shareholders if they are not in compliance with certain financial ratios. Generally, our credit agreements prohibit any type of distribution if there is an ongoing default.

Operating Results of Our Subsidiaries. The ability of our subsidiaries and equity affiliates to pay dividends or make loan payments or other distributions to us is limited by their operating results. To the extent that the cash requirements of any of our subsidiaries exceed their available cash, the subsidiary will not be able to make cash available to us.

Any of the situations described above could adversely affect our results of operations and financial condition.

Foreign exchange risks may adversely affect our results and the U.S. dollar value of dividends payable to ADS holders.

The currencies of South American countries in which we and our subsidiaries operate have been subject to large devaluations and appreciations against the U.S. dollar and may be subject to significant fluctuations in the future. Historically, a significant portion of our consolidated indebtedness has been denominated in U.S. dollars. Although a substantial portion of our operating cash flows is linked to U.S. dollars, we generally have been and will continue to be materially exposed to currency fluctuations of our local currencies against the U.S. dollar because of time lags and other limitations to peg our tariffs to the U.S. dollar.

In countries where operating cash flows are denominated in the local currency, we seek to maintain debt in the same currency, but due to market conditions it may not be possible to do so. The most material example is in Argentina, where most of our debt is denominated in U.S. dollars while our revenues are mostly in Argentine pesos. Because of this exposure, the cash generated by our subsidiaries can decrease substantially when local currencies devalue against the U.S. dollar. Future volatility in the exchange rate of the currencies in which we receive revenues or incur expenditures may affect our financial condition and results from operations.

As of December 31, 2013, the amount of Endesa Chile’s total consolidated debt was Ch$ 1,894 billion (net of currency hedging instruments). Of this amount, Ch$ 637 billion, or 34%, was denominated in U.S. dollars and Ch$ 307 billion in Chilean pesos. As of December 31, 2013, our consolidated foreign currency-denominated indebtedness (other than U.S. dollars or Chilean pesos) included the equivalent of:

— Ch$ 894 billion in Colombian pesos;

— Ch$ 32 billion in Argentine pesos; and

— Ch$ 24 billion in Peruvian soles.

These amounts total Ch$ 950 billion in currencies other than U.S. dollars or Chilean pesos.

For the twelve-month period ended December 31, 2013, our operating cash flows were Ch$ 707 billion (before consolidation adjustments) of which:

— Ch$ 313 billion, or 44%, came from Chile;

— Ch$ 274 billion, or 39%, came from Colombia;

— Ch$ 96 billion, or 14%, came from Peru; and

— Ch$ 24 billion, or 3%, came from Argentina

22

We are involved in litigation proceedings.

We are currently involved in various litigation proceedings, which could result in unfavorable decisions or financial penalties against us, and we will continue to be subject to future litigation proceedings, which could cause material adverse consequences to our business.

For example, in December 2013, a court granted an injunction in favor of local fishermen ordering a temporary shutdown of our Bocamina II facility. While we are appealing the case, the plant remains shut down and our operating income is reduced between US$ 20 million and US$ 44 million each month the facility is shut down. Our financial condition or results from operations could be adversely affected if we are unsuccessful in defending this litigation or other lawsuits and proceedings against us.

The values of our generation subsidiaries’ long-term energy supply contracts are subject to fluctuations in the market prices of certain commodities and other factors.

We have economic exposure to fluctuations in the market prices of certain commodities as a result of the long-term energy sales contracts into which we have entered. We and our subsidiaries have material obligations as selling parties under long-term fixed-price electricity sales contracts. Prices in these contracts are indexed according to different commodities, the exchange rate, inflation, and the market price of electricity. Adverse changes to these indices would reduce the rates we charge under our long-term fixed-price electricity sales contracts, which could adversely affect our results of operations and financial condition.

Our controlling shareholders may have conflicts of interest relating to our business.

Enel owns 92.1% of Endesa Spain, which in turn beneficially owns 60.6% of Enersis’ share capital, and Enersis owns 60.0% of Endesa Chile’s outstanding capital stock. Our controlling shareholders have the power to determine the outcome of most material matters that require shareholders’ votes, such as the election of the majority of our board members and, subject to contractual and legal restrictions, the distribution of dividends. Our controlling shareholders also can exercise influence over our business strategy and operations. Their interests may in some cases differ from those of the other shareholders. Enel and Endesa Spain conduct their business operations in the field of renewable energies in South America through Enel Green Power S.p.A., in which we do not have an equity interest.

Environmental regulations in the countries in which we operate and other factors may cause delays, impede the development of new projects or increase the costs of operations and capital expenditures.

Our operating subsidiaries are subject to environmental regulations which, among other things, require us to perform environmental impact studies for future projects and obtain permits from both local and national regulators. The approval of these environmental impact studies may take longer than planned and may be withheld by governmental authorities. Local communities and ethnic and environmental activists, among others, may intervene in the approval process to delay or prevent a project’s development. They may also seek injunctive or other relief, which could negatively impact us if they are successful.

Environmental regulations for existing and future generation capacity may become stricter, requiring increased capital investments. For example, Decree 13 of the Chilean Ministry of the Environment promulgated in January 2011, and published in June 2011, defined stricter emission standards for thermoelectric plants that must be met between 2014 and 2016 and stricter standards for new facilities or additional capacity.

In 2009, we presented our 740 MW coal fueled Punta Alcalde project for environmental approval in Chile. In 2012, the regional environmental authority rejected the project. We appealed to the Council of Ministers. Even though the Council unanimously reversed the decision of the environmental authority, the Court of Appeals accepted four injunctions against us in early 2013. Ultimately, the Chilean Supreme Court ruled that the project could proceed in January 2014.

In addition to environmental matters, there are other factors that may adversely affect our ability to build new facilities or to complete projects currently under development on time, including delays in obtaining regulatory approvals, shortages or increases in the price of equipment, materials or labor, strikes, adverse weather conditions, natural disasters, civil unrest, accidents, or other unforeseen events.

23

Delays or modifications to any proposed project and laws or regulations may change or be interpreted in a manner that could adversely affect our operations or our plans for companies in which we hold investments, which could adversely affect our results of operations and financial condition.

Our business may be adversely affected by judicial decisions on environmental qualification resolutions for electricity projects in Chile.

The environmental qualification resolutions term for electricity generation or transmission projects in Chile has more than doubled, due primarily to judicial decisions against such projects, environmental opposition, social criticism and government delays. This can cast doubt on the ability of a project to obtain such approval, and increase the uncertainty for investing in electricity generation and transmission projects in Chile. The uncertainty is forcing companies to reassess their business strategies as the delay in the construction of electricity generation and transmission projects may result in a supply constraints over the next five or six years. If any plant within the system ceases operation unexpectedly, we could experience supply shortages in our system, which could lead to power cuts.

For example, in August 2008, the HidroAysén environmental impact assessment study was submitted for approval. In May 2011, a favorable environmental qualification resolution was reached. In June 2011, HidroAysén filed an appeal with the Council of Ministers requesting its review of certain conditions established by the environmental authority. On January 30, 2014, the Council of Ministers met to review the appeals and the majority of them were resolved. The Council of Ministers requested new background information and studies in order for the Council to perform a new evaluation and issue its decision regarding the project.

In March 2014, Chilean President Michelle Bachelet took office, and during this month a new Council of Ministers was convened, and it repealed the decisions taken in January 2014. The new Council stated it would study the issue again and resolve all claims within the 60 business day timeframe established by law.

Our power plant projects may encounter significant opposition from groups that may ultimately damage our reputation and could result in impairment of goodwill with stakeholders.

Our reputation is the foundation of our relationship with key stakeholders and other constituencies. If we are unable to effectively manage real or perceived issues, which could negatively impact sentiments toward us, our ability to operate could be impaired and our financial results could suffer.

The development of new power plants may face opposition from several stakeholders, such as ethnic groups, environmental groups, land owners, farmers, local communities and political parties, among others, all of which may impact the sponsoring company’s reputation and goodwill. For example, our HidroAysén project has encountered substantial opposition by environmental activists. Such groups are sometimes financed internationally and may receive global attention. Similarly, the El Quimbo hydroelectric project in Colombia faced constant social demands that have delayed construction and increased costs. Between August 16, 2013 and September 9, 2013, a national agricultural strike involving communities near the project blocked roads and occupied neighboring lands.

The operation of our current thermal power plants may also affect our goodwill with stakeholders, due to emissions such as particulate matter, sulfur dioxide and nitrogen oxides, which could adversely affect the environment.

Damage to our reputation may exert considerable pressure on regulators, creditors, and other stakeholders, and ultimately lead to projects and operations that may not be optimal, cause our share prices to drop and hinder our ability to attract or retain valuable employees, all of which could result in an impairment of goodwill with stakeholders.

24

Our business may experience adverse consequences if we are unable to reach satisfactory collective bargaining agreements with our unionized employees.

A large percentage of our employees are members of unions and have collective bargaining agreements that must be renewed on a regular basis. Our business, financial condition and results of operations could be adversely affected by a failure to reach agreement with any labor union representing such employees or by an agreement with a labor union that contains terms we view as unfavorable. The laws of many of the countries in which we operate provide legal mechanisms for judicial authorities to impose a collective agreement if the parties are unable to come to an agreement, which may increase our costs beyond what we have budgeted.

In addition, we employ many highly-specialized employees, and certain actions such as strikes, walk-outs or work stoppages by these employees could negatively impact our operating and financial performance, as well as our reputation.

Interruption or failure of our information technology and communications systems or external attacks to or invasions of these systems could have an adverse effect on our operations and results.

We depend on information technology, communication and processing systems (“IT Systems”) to operate our businesses, the failure of which could adversely affect our financial condition and results of operations.

IT Systems are all vital to our generation subsidiaries’ ability to monitor our power plants’ operations, maintain generation and network performance, adequately generate invoices to customers, achieve operating efficiencies and meet our service targets and standards. Temporary or long-lasting operational failures of any of these IT Systems could have a material adverse effect on our results of operations. Additionally, cyber attacks can have an adverse effect on the company’s image and its relationship with the community.

In the last few years, global cyber attacks on security systems, treasury operations, and IT Systems have intensified. We are exposed to cyber-terrorist attacks aimed at damaging our assets through computer networks, cyber spying involving strategic information that may be beneficial for third parties and cyber-theft of proprietary and confidential information, including information of our customers. During 2013, we suffered a cyber attack organized by a group known as “Operation Green Rights” to protest the construction of proposed hydroelectric power plants in the Chilean Patagonia as well as other cyber attacks related to the operation of thermal power plants in the north and south of Chile.

We rely on electricity transmission facilities that we do not own or control. If these facilities do not provide us with an adequate transmission service, we may not be able to deliver the power we sell to our final customers.

We depend on transmission facilities owned and operated by other unaffiliated power companies to deliver the electricity we sell. This dependence exposes us to several risks. If transmission is disrupted, or transmission capacity is inadequate, we may be unable to sell and deliver our electricity. If a region’s power transmission infrastructure is inadequate, our recovery of sales costs and profits may be insufficient. If restrictive transmission price regulation is imposed, transmission companies upon whom we rely may not have sufficient incentives to invest in expansion of their transmission infrastructure, which could adversely affect our operations and financial results. On February 27, 2010, due to the 8.8 magnitude earthquake on the Richter scale in Chile, Transelec, a transmission company unrelated to us, experienced damage to its high voltage transmission network that prevented us from delivering our electricity to final consumers.

On September 24, 2011, nearly 10 million people located in central Chile experienced a blackout (affecting more than half of all Chileans), due to the failure of Transelec’s 220 kV Ancoa substation. The failure led to the disruption of two 500 kV transmission lines in the SIC (the Chilean Central Interconnected System) and the subsequent failure of the remote recovery computer software used by CDEC to operate the grid. This blackout, which lasted two hours, exposed weaknesses in the transmission grid and its need for expansion and technological improvements to increase the reliability of the transmission grid.

25

Any such failure could interrupt our business, which could adversely affect our results of operations and financial condition.

The relative illiquidity and volatility of Chilean securities markets could adversely affect the price of our common stock and ADS.

Chilean securities markets are substantially smaller and less liquid than the major securities markets in the United States. In addition, Chilean securities markets may be affected materially by developments in other emerging markets. The low liquidity of the Chilean market may impair the ability of holders of ADS to sell shares of our common stock withdrawn from the ADS program into the Chilean market in the amount and at the price and time they wish to do so.

Lawsuits against us brought outside of the South American countries in which we operate, or complaints against us based on foreign legal concepts may be unsuccessful.

All of our assets are located outside of the United States. All except one of our directors and all of our officers reside outside of the United States and most of their assets are located outside the United States as well. If any investor were to bring a lawsuit against our directors, officers or experts in the United States, it may be difficult for them to effect service of legal process within the United States upon these persons or to enforce against them, in United States or Chilean courts, judgments obtained in United States courts based upon the civil liability provisions of the federal securities laws of the United States. In addition, there is doubt as to whether an action could be brought successfully in Chile on the basis of liability based solely upon the civil liability provisions of the United States federal securities laws.

Item 4.     Information on the Company

A. History and Development of the Company.

Incorporation and Contact Information of the Company

Empresa Nacional de Electricidad S.A. is a publicly held limited liability stock corporation organized under the laws of the Republic of Chile on December 1, 1943. Since 1943, the Company has been registered in Santiago with the SVS under Registration No. 0114. The Company is legally referred to by its full name as well as by the shorter “Endesa Chile.” In Chile, it is also known as “Endesa,” a term that is avoided in this Report because of potential ambiguity when referring to Endesa, S.A., a parent company in Spain.

The Company’s contact information in Chile is:

Street Address:	Santa Rosa 76, Santiago, Código Postal 8330099, Chile
Telephone:	(56-2) 2353-4639
Fax:	(56-2) 2378-4689
Web site:	www.endesa.cl

The Company’s authorized representative in the United States of America is Puglisi & Associates, whose contact information is:

Street Address:	850 Library Avenue, Suite 204, Newark, Delaware 19711
Telephone:	1 (302) 738-6680

We are an electricity utility company engaged, directly and through our subsidiaries and affiliates, in the generation and transmission of electricity businesses in Chile, Argentina, Brazil, Colombia and Peru. In May 1992, we began our international expansion program with the following developments:

— We acquired a stake in Endesa Costanera in 1992 and later, in August 1993, we acquired a controlling equity interest in El Chocón, both in Argentina. As of December 31, 2013, our equity interest in El Chocón is 65.4% and in Endesa Costanera 75.7%.

26

— We acquired Edegel in Peru in October 1995. In June 2006, Edegel and Etevensa merged, after which Endesa Chile’s equity interest in Edegel increased to 33.1%. In October 2009, we purchased an additional 29.4% of Edegel from Generalima, a Peruvian indirect subsidiary of Endesa Spain. With this transaction, we increased our economic interest in Edegel to 62.5%.

— We acquired Betania and Emgesa, both in Colombia, in December 1996 and in October 1997, respectively. In September 2007, these subsidiaries were merged into Betania, which then adopted the name of “Emgesa S.A. E.S.P.” As of December 2011, Endesa Chile’s equity interest in Emgesa was 26.9%. Due to a transfer of rights from Enersis, Endesa Chile controls and therefore consolidates Emgesa.

— We acquired Cachoeira Dourada in Brazil in September 1997, and in 1998 we and Endesa Spain invested in CIEN, which operates an international transmission line connecting Brazil and Argentina. Since October 2005, Cachoeira Dourada and CIEN have been subsidiaries of our affiliate, Endesa Brasil, which we account for based on the equity method.

Since June 2009, Enel S.p.A. has been the ultimate controller of Enersis by virtue of its 92.1% equity interest in Endesa Spain. Endesa Spain beneficially owns 60.6% of the share capital of Enersis, which in turn holds 60% of the share capital of Endesa Chile. Enel publicly trades on the Milan Stock Exchange, is headquartered in Italy and is primarily engaged in the energy sector, with a presence in 40 countries worldwide, and approximately 99 GW of net installed capacity. It provides service to more than 61 million customers through its electricity and gas businesses.

As of December 31, 2013, we had 13,688 MW of installed capacity, with 178 generation units in the four countries in which we operate, consolidated assets of Ch$ 6,762 billion and operating revenues of Ch$ 2,027 billion.

Capital Investments, Capital Expenditures and Divestitures

We coordinate our overall financing strategy, including the terms and conditions of loans or intercompany advances entered into by our subsidiaries, in order to optimize debt and liquidity management. Our operating subsidiaries generally independently plan capital expenditures financed by internally generated funds or with direct financing. One of our goals is to focus on investments that will provide long-term benefits, such as energy loss reduction projects. Additionally, by focusing on Endesa Chile as a group and seeking to provide services group-wide, we aim to reduce investments at the individual subsidiary level for items such as procurement, telecommunication and information systems. Although we have considered how these investments will be financed as part of the Company’s budget process, we have not committed to any particular financing structure. Our investments will depend on the prevailing market conditions at the time the cash flows are needed.

Our investment plan is flexible enough to adapt to changing circumstances by giving different priorities to each project in accordance with its profitability and strategic fit. Our current investment priorities include developing new, environmentally responsible hydroelectric and thermal projects in Chile and Colombia in order to guarantee adequate levels of reliable supply.

From 2014 through 2018, we expect to make capital expenditures of Ch $1,921 billion on a consolidated basis relating to investments currently in progress, maintenance of existing installed capacity and studies required to develop other potential generation projects. For further detail regarding these projects, please see “Item 4. Information on the Company — D. Property, Plant and Equipment — Projects Under Development.”

27

The table below sets forth the expected capital expenditures from 2014 through 2018 and the capital expenditures incurred by our subsidiaries in 2013, 2012 and 2011:

	Capital Expenditures
	2014-2018		2013 (1)		2012 (1)		2011 (1)
	(in millions of Ch$)
Chile		905,733		85,169		73,673		122,723
Abroad		1,015,116		206,848		183,810		140,885
Total		1,920,849		292,017		257,483		263,608

(1) CAPEX figures represent actual payments for each year, net of contributions, except for future projections.

Capital Expenditures 2013, 2012 and 2011

Our capital expenditures in the last three years were related principally to (i) the 350 MW Bocamina II project in Chile, (ii) the 400 MW El Quimbo project in Colombia and (iii) maintenance of existing installed capacity. Bocamina II began commercial operations in October 2012, with 350 MW of installed capacity. The El Quimbo project is still under construction. In addition, in November 2013, the first of Salaco project’s hydro plants began its operation in Colombia. The project will add 144 MW of capacity to the system when completed.

For additional information regarding Bocamina II, which currently is not operating due to an environmental restriction, please see “Introduction — Recent Developments.”

Investments Currently in Progress

Our material plans in progress include completion of the El Quimbo project, which is expected to be finished by July 2015 and will add 400 MW of capacity to our Colombian operations. El Quimbo is being constructed in response to increased demand in that market.

In general terms, projects in progress are expected to be financed with external and internal funds for each of the projects described.

B. Business Overview.

We are a publicly held limited liability stock corporation with consolidated operations in Chile, Argentina, Colombia, and Peru, and an equity interest in a Brazilian company. Our core business is electricity generation. Less than 1.0% of our 2013 revenues came from non-generation activities, and we do not break down our revenues by businesses in this Report or in our consolidated financial statements.

The table below presents our revenues by country:

	Year ended December 31,						Change    2013 vs. 2012
Revenues	2013		2012		2011
	(in millions of Ch$)						(in %)
Generation (Chile) (1)		962,879		1,107,117		1,137,770		(13.0)
Other businesses and intercompany transaction adjustments (Chile)		10,261		7,503		18,699		36.8
Argentina		131,443		344,178		390,136		(61.8)
Colombia		639,504		580,125		498,544		10.2
Peru		283,806		282,124		239,841		0.6
Consolidated adjustments to foreign subsidiaries		(461)		(662)		(725)		(30.4)
Total revenues		2,027,432		2,320,385		2,284,265		(12.6)

(1) Restated in accordance with IFRS 11

28

For further information related to operating revenue and total income by business segment, see “Item 5. Operating and Financial Review and Prospects — A. Operating Results” and Note 31 to our Consolidated Financial Statements.

The operating figures presented in this Report differs from previously reported figures, due to:

— application of IFRS 11, “Joint Arrangements” pursuant to which jointly controlled companies as of January 1, 2013 are now recorded using the equity method. Until December 31, 2012, they were consolidated using the proportionate consolidation method. With respect to our generation business, the application of IFRS 11 requires us to exclude GasAtacama figures from 2012 and 2011; and

— changes to what we define as “electricity generation”, which we now define as total generation output minus (i) the electricity consumed by the facilities themselves, (ii) consumption by external auxiliary facilities, (iii) losses in transmission and (iv) technical losses, which definition is uniformly applied to all countries. We have recalculated the operating data for 2009 through 2012, however we believe the differences in calculation methods are not material. Our consolidated installed capacity as of December 31, 2013 was 13,688 MW, of which 58.6% was hydroelectric capacity, 40.8% was thermal electric and 0.6% was wind power generation capacity. Total installed capacity is defined as the maximum power capacity (measured in MW generation units) under specific technical conditions and characteristics.

We own and operate 178 generation units in the four countries in which we consolidate results, comprised principally of 105 generation units in Chile with an aggregate installed capacity, as of December 31, 2013, of 5,571 MW. This excludes the three units with 390 MW of capacity at GasAtacama.

Additionally, as of December 31, 2013, we had an interest in 73 generation units outside of Chile with an aggregate installed capacity of 8,118 MW compared to 8,224 MW of aggregate installed capacity as of December 31, 2012. This decrease was due to the decomissioning of Edegel’s 121 MW Santa Rosa TG 7 unit and Emgesa’s 39 MW La Tinta and La Junca plants. This decrease was partially offset by a 50 MW increase in Emgesa’s Darío Valencia 2 unit and a 4.2 MW increase in Edegel’s Matucana unit.

We accounted for 30% of Chile’s total generation capacity as of December 31, 2013, measured by the installed capacity published by CDEC-SIC. Hydroelectric installed capacity represents 62.2% of Endesa Chile’s total installed capacity in Chile, thermoelectric installed capacity represents 36.4% and wind power represents 1.4%. The CDEC manages Chile’s electricity distribution. See “Item 4. Information on the Company — B. Business Overview — Electricity Industry and Regulatory Framework.” Hydroelectric installed capacity outside Chile represents 56.2% of Endesa Chile’s total installed capacity outside Chile. Based on 2013 data, the Company’s installed generation capacity in Argentina, Colombia and Peru represents approximately 12%, 20% and 20% of total capacity in each country, respectively.

For additional detail on capacity increase of these units see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

ENDESA CHILE’S CONSOLIDATED GENERATION BY TYPE (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Generation  (GWh)		%		Generation  (GWh)		%		Generation  (GWh)		%
Hydroelectric generation		28,465		55.4		30,732		58.8		30,213		59.2
Thermal generation (2)		22,808		44.4		21,336		40.9		20,695		40.5
Other generation (3)		145		0.3		153		0.3		132		0.3
Total generation		51,417		100.0		52.222		100.0		51,040		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

(2) Excludes GasAtacama, which was included in previous reports.

(3) Other generation refers to the Canela and Canela II wind farms.

29

Our consolidated electricity production reached 51,417 GWh in 2013, 1.5% lower than the 52,222 GWh produced in 2012, mainly due to a decrease in hydro generation in Chile and Colombia, to conditioned dispatch by CAMMESA in Argentina, and to lower thermal generation in Peru. We increased our generation in Chile from 19,194 GWh to 19,438 GWh, an increase of 1.3%. Our generation decreased by 3.8% in Colombia, 3.3% in Argentina and 2,1% in Peru. Hydroelectric generation in 2013 in the four countries in which we consolidate results from operations was 7.4% lower than in 2012 and thermal generation in 2013 was 6.9% higher than in 2012.

Our consolidated electricity energy sales for 2013 were 57,754 GWh, 1.5% lower than our consolidated electricity energy sales of 58,621 GWh in 2012 as result of less contracts in Chile, Peru and Colombia. We increased our sales in Argentina from 11,852 GWh to 12,354 GWh, an increase of 4.2%. In the other countries our sales decreased compared with 2012, mainly in Peru and Chile with decreases of 7.1% and 2.3% respectively, as set forth in the following table:

ENDESA CHILE ELECTRICITY DATA PER COUNTRY

	As of and for the year ended December 31,
	2013		2012		2011
Chile (1)
Number of generating units (2) (3)		105		105		104
Installed capacity (MW) (3) (4)		5,571		5,571		5,221
Electricity generation (GWh) (5)		19,438		19,194		19,296
Energy sales (GWh)		20,406		20,878		20,315
Argentina
Number of generating units (2)		20		20		20
Installed capacity (MW) (4)		3,652		3,652		3,652
Electricity generation (GWh) (5)		10,840		11,207		10,713
Energy sales (GWh)		12,354		11,852		11,381
Colombia
Number of generating units (2) (3)		29		30		30
Installed capacity (MW) (3) (4)		2,925		2,914		2,914
Electricity generation (GWh) (5)		12,748		13,251		12,051
Energy sales (GWh)		16,090		16,304		15,112
Peru
Number of generating units (2)		24		25		25
Installed capacity (MW) (3)(4)		1,540		1,657		1,668
Electricity generation (GWh) (5)		8,391		8,570		8,980
Energy sales (GWh)		8,903		9,587		9,450
Total (5)
Number of generating units (2)		178		180		179
Installed capacity (MW) (4)		13,688		13,794		13,455
Electricity generation (GWh) (5)		51,417		52.222		51,040
Energy sales (GWh)		57,754		58,621		56,257

(1) Excludes GasAtacama, which was included in previous reports.

(2) For details on generation facilities, see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

(3) The Bocamina II TV2 generation unit in Chile has been consolidated since April 2012, and the Darío Valencia hydro plant in Colombia has been consolidated since November 2013. Unit 2 of Matucana hydro plant in Peru increased its installed capacity in June 2013. In October 2013, Edegel’s 121 MW Santa Rosa TG 7 unit in Peru and Emgesa’s 39 MW La Tinta and La Junca plants in Colombia were retired.

(4) Total installed capacity is defined as the maximum MW capacity in generation units, under specific technical conditions and characteristics. In most cases, installed capacity is confirmed by tests performed by equipment suppliers. Data may differ from installed capacity declared to governmental authorities and customers in each country, according to criteria defined by such authorities and relevant contracts.

(5) Figures may differ from those previously reported, as the current figures are shown net of all losses.

We segment our sales to customers using two different categories. First, we distinguish between regulated and unregulated customers. Regulated customers are distribution companies that mainly serve residential customers.

30

Unregulated customers, on the other hand, may freely negotiate the price of electricity with generators or they may purchase electricity in the pool market at the spot price. The second criterion we use to segment our customer sales is by contracted sales and non-contracted sales. This method is useful because it provides a uniform way for us to compare our customers from country to country. The countries in which we operate have varying classifications for what constitutes a regulated customer. In contrast, contracted sales are defined uniformly throughout.

In the countries in which we operate, the potential for contracting electricity is generally related to electricity demand. Customers identified as small volume regulated customers, such as residential customers subject to government regulated electricity tariffs, must purchase electricity directly from a distribution company. These distribution companies, which purchase large amounts of electricity for small volume residential customers, generally enter into contractual agreements with generators at a regulated tariff price. Those identified as large volume industrial customers also enter into contractual agreements with energy suppliers. However, such large volume industrial customers are not subject to the regulated tariff price. Instead, these customers are allowed to negotiate the price of energy with generators based on the characteristics of the service required. Finally, the pool market, where energy is normally sold at the spot price, is not carried out through contracted pricing.

The following table contains information regarding Endesa Chile’s consolidated sales of electricity by type of customer for each of the periods indicated:

ENDESA CHILE CONSOLIDATED ELECTRICITY SALES BY CUSTOMER TYPE (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Sales		% of Sales  Volume		Sales		% of Sales  Volume		Sales		% of Sales   Volume
Regulated customers		27,786		48.1		28,863		49.2		26,377		46.9
Unregulated customers		12,392		21.5		14,070		24.0		13,441		23.9
Total contracted sales (2)		40,178		69.6		42,933		73.2		39,818		70.8
Electricity pool market sales		17,576		30.4		15,688		26.8		16,439		29.2
Total electricity sales		57,754		100.0		58,621		100.0		56,257		100.0

(1) Excludes GasAtacama, which was included in previous reports.

(2) Includes the sales to distribution companies not backed by contracts in Chile and Peru.

The specific energy consumption limit (measured in GWh) for regulated and unregulated customers is country specific. Moreover, regulatory frameworks often require that regulated distribution companies have contracts to support their commitments to small volume customers and also determine which customers can purchase energy in electricity pool markets.

In terms of expenses, the primary variable costs involved in the electricity generation business, in addition to the direct variable cost of generating hydroelectric or thermal electricity such as fuel costs, are energy purchases and transportation costs. During periods of relatively low rainfall conditions, the amount of our thermal generation increases. This not only involves increasing the total cost of fuel but also the cost of transporting that fuel to the thermal generation power plants. Under drought conditions, electricity that we have contractually agreed to provide may exceed the amount of electricity that we are able to generate, requiring us to purchase electricity in the pool market at spot prices in order to satisfy our contractual commitments. The cost of these purchases at spot prices may, under certain circumstances, exceed the price at which we sell electricity under contracts and result in a loss. We attempt to minimize the effect of poor hydrological conditions on our operations in any year primarily by limiting contractual sales requirements to an amount that does not exceed the estimated production in a “dry year.” In determining estimated production in a dry year, we take into account the available statistical information concerning rainfall and water flows, and the capacity of key reservoirs. In addition to limiting contracted sales, we may adopt other strategies such as installing temporary thermal capacity, negotiating lower consumption levels with unregulated customers, negotiating with other water users and including pass-through cost clauses in contracts with customers.

31

The following table contains information regarding our electricity generation and purchases:

CONSOLIDATED GENERATION AND PURCHASES (GWh) (1) (2)

	Year ended December 31,
	2013				2012				2011
	(GWh)		% of    Volume		(GWh)		% of    Volume		(GWh)		% of    Volume
Electricity generation		51,417		88.8		52.222		88.9		51,040		90.6
Electricity purchases		6,455		11.2		6,499		11.1		5,320		9.4
Total (3)		57,872		100.0		58.720		100.0		56,360		100.0

(1) Excludes GasAtacama, which was included in previous reports.

(2) Figures may differ from those previously reported, as the current figures are shown net of all losses.

(3) Total energy generation (GWh) plus purchases differs from GWh sales due to energy losses at the pumps for the Muña reservoir in Colombia.

We have a 48.1% beneficial interest in GasAtacama Chile S.A., through which we participate in the gas transportation and thermal generation business in northern Chile. Since March 2008, we have held a 51% beneficial interest in HidroAysén, through which we participate in a hydroelectric project in the Aysén Region. We also participate in the gas transportation business in Chile through our related company, Electrogas S.A. (“Electrogas”), in which we have a 42.5% beneficial interest. Electrogas owns a pipeline in the Valparaíso Region and supplies natural gas to the power plants of San Isidro and Nehuenco. The other shareholders of Electrogas are Colbún S.A. and ENAP.

Since September 2005, our participation in the Brazilian electricity business has been carried out through our equity investment in Endesa Brasil S.A., in which we have a beneficial ownership interest of 37.1%. Endesa Brasil consolidates operations of (i) two generation companies, Central Geradora Termeléctrica Endesa Fortaleza S.A. (“Endesa Fortaleza”) and Cachoeira Dourada, (ii) CIEN, which owns two transmission lines between Argentina and Brazil, (iii) CTM and TESA, subsidiaries of CIEN which own the Argentine side of the lines and (iv) two distribution companies, Ampla Energia e Serviços S.A., (“Ampla”), which is the second largest electricity distribution company in the State of Rio de Janeiro, and Companhia Energética do Ceará S.A. (“Coelce”), which is the sole electricity distributor in the State of Ceará.

Operations in Chile

We own and operate a total of 105 generation units in Chile directly and through our subsidiaries Pehuenche and Celta. Of these generation facilities, 38 are hydroelectric, with a total installed capacity of 3,465 MW. This represents 62.2% of our total installed capacity in Chile. There are 16 thermal units that operate with gas, coal or oil with a total installed capacity of 2,028 MW, representing 36.4% of our total installed capacity in Chile. There are 51 wind power units with 78 MW in the aggregate, representing 1.4% of our total installed capacity in Chile. All of our generation units are connected to the country’s central interconnected electricity systems, Central Interconnected System (Sistema Interconectado Central) (“SIC”), except for two Celta thermoelectric units which are connected to the Northern Interconnected System (Sistema Interconectado del Norte Grande) (“SING”) in the north.

For information on the installed generation capacity for each of the Company’s Chilean subsidiaries, see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

Our total electricity generation in Chile (including the SIC and the SING) accounted for 29.4% of total gross electricity production in Chile during 2013.

32

The following table sets forth the electricity generation for each of our Chilean generation subsidiaries:

ELECTRICITY GENERATION BY SUBSIDIARY IN CHILE (GWh) (1)

	Year ended December 31,
	2013		2012		2011
Endesa		11,967		11,723		11,076
Pehuenche		2,565		2,615		2,975
Pangue (2)		—		325		1,713
San Isidro (2)		2,546		3,529		2,460
Celta (2)		1,564		798		899
Endesa Eco (2)		796		204		173
Total		19,438		19,194		19,296

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

(2) The electricity generation difference from 2011 to 2012 was primarily due to the incorporation of Pangue’s electricity generation into San Isidro’s from May 1, 2012 following the merger of the two entities. The electricity generation difference from 2012 to 2013 was primarily due to the incorporation of San Isidro’s electricity generation into Endesa Eco from September 1, 2013 following the merger of the two entities, and the further consolidation into Endesa Eco following its merger with Celta on November 1, 2013.

The potential energy in Chilean reservoirs reached 2,870 GWh in 2013, an increase of 480 GWh, or 20%, compared to 2,391 GWh in 2012 and 3,844GWh in 2011.

Generation by type in Chile is shown in the following table:

ELECTRICITY GENERATION BY TYPE IN CHILE (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Generation		%		Generation		%		Generation		%
Hydroelectric generation		9,617		49.5		10,578		56.5		11,403		59.1
Thermal generation (2)		9,404		48.4		8,188		42.7		7,497		38.9
Wind generation – NCRE (3)		145		0.7		153		0.8		132		0.7
Mini-hydro generation – NCRE (4)		272		1.4		275		1.4		264		1.4
Total generation		19,438		100.0		19,194		100.0		19,296		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

(2) Excludes GasAtacama, which was included in previous reports.

(3) Refers to the generation of the Canela and Canela II wind farms.

(4) Refers to the generation of Palmucho and the Ojos de Agua mini-hydroelectric plants.

Our thermal electric generation facilities use natural gas, LNG, coal or oil as fuel. In order to satisfy our natural gas and transportation requirements, we enter into long-term gas contracts with suppliers who establish maximum supply amounts and prices and long-term gas transportation agreements with the pipeline companies. We currently use Gas Andes (which is not related to us) and Electrogas (which is not related to us) as our suppliers. Since March 2008, all of our natural gas units can operate using natural gas or diesel, and since December 2009, San Isidro, San Isidro 2 and Quintero can operate using LNG.

In July 2013, Endesa Chile and British Gas successfully ended a renegotiation of its LNG sale and purchase agreement. This renegotiation modified some conditions of the original contract, allowing Endesa Chile to secure its long term LNG supply at competitive prices, with significant flexibility and new capacity sufficient for its current power plants and future projects.

33

Endesa Chile also exercised a priority option to purchase capacity as part of an expansion at the Quintero LNG Terminal. This will allow us to increase our regasification capacity from 3.2 million cubic meters per day to 5.4 million cubic meters per day, starting late 2014. This expansion will allow our Quintero facility to bring additional thermal electricity generation online, expand our gas commercialization business and develop new power plants. Because Chile has experienced prolonged droughts, we believe LNG is becoming a strategic business for us and for Chile.

In 2013, we signed a new 1,600 kiloton coal supply agreement with Endesa Energía, which we believe is sufficient to supply Tarapacá and Bocamina with coal through until December 2014.

Under Chilean law, power generation companies must demonstrate that certain minimum amounts of their energy sales come from non-conventional renewable sources (“NCRE”) other than large traditional hydro plants. Currently our Canela wind farm, Ojos de Agua mini-hydroelectric plant and 40% of the installed capacity of our Palmucho mini-hydroelectric plant qualify as NCRE facilities. We fully complied with this obligation during 2013. The additional cost of generating electricity using NCRE facilities is being charged as a pass-through in our new contracts, which mitigates the impact to our operating income.

Electricity sales industry-wide in Chile, increased 3.5% during 2013, with sales in the SIC increasing by 3.3% and in the SING by 3.8%, as detailed in the following table:

ELECTRICITY SALES PER SYSTEM IN CHILE (GWh) (1)

	Year ended December 31,
	2013		2012		2011
Electricity sales in the SIC		47,831		46,282		43,805
Electricity sales in the SING		15,399		14,831		14,263
Total electricity sales		63,230		61,113		58,068

(1) Figures may differ from those previously reported as a result of their update in the CDEC-SIC and CDEC-SING yearly reports.

Our electricity sales in Chile reached 20,406 GWh in 2013 and 20,878 GWh in 2012, which represented a 32.3% and 34.2% market share, respectively. The percentage of the energy purchases to satisfy our contractual obligations to third parties has decreased from 7.8% in 2012 to 4.7% in 2013 as a result of the increase in our generation.

The following table sets forth our electricity generation and purchases in Chile:

ELECTRICITY GENERATION AND PURCHASES IN CHILE (GWh) (1)

	Year ended December 31,
	2013				2012 (2)				2011 (2)
	(GWh)		% of  Volume		(GWh)		% of  Volume		(GWh)		% of  Volume
Electricity generation (2)		19,438		95.3		19,194		91.9		19,296		95.0
Electricity purchases		968		4.7		1,684		8.1		1,019		5.0
Total		20,406		100.0		20,878		100.0		20,315		100.0

(1) Excludes GasAtacama, which was included in previous reports.

(2) Figures may differ from those previously reported, as the current figures are shown net of all losses.

34

We supply electricity to the major regulated electricity distribution companies, large unregulated industrial firms (primarily in the mining, pulp and steel sectors) and the pool market. Commercial relationships with our customers are usually governed by contracts. Supply contracts with distribution companies must be auctioned, are generally standardized and have an average term of ten years.

Supply contracts with unregulated customers (large industrial customers) are specific to the needs of each customer and the conditions are agreed between both parties, reflecting competitive market conditions.

In 2013, 2012 and 2011, Endesa Chile had 50, 49 and 47 customers, respectively. In 2013, our customers included 21 distribution companies in the SIC and 29 unregulated customers.

The following table sets forth information regarding our sales of electricity in Chile by type of customer:

ELECTRICITY SALES PER CUSTOMER SEGMENT IN CHILE (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Sales		% of Sales   Volume		Sales		% of Sales   Volume		Sales		% of Sales   Volume
Regulated customers		14,796		72.5		13,971		66.9		12,700		62.5
Unregulated customers		4,185		20.5		5,996		28.7		5,798		28.5
Total contract sales		18,981		93.0		19,967		95.6		18,498		91.1
Electricity pool market sales		1,425		7.0		911		4.4		1,817		8.9
Total electricity sales		20,406		100.0		20,878		100.0		20,315		100.0

(1) Excludes GasAtacama, which was included in previous reports.

Our most significant supply contracts with regulated customers are with Chilectra S.A. (Chilectra, a subsidiary of Enersis) and with Compañía General de Electricidad S.A. (“CGE”), which is not related to us. These are the two largest distribution companies in Chile in terms of sales.

The following table sets forth Endesa Chile’s public contracts with electricity distribution companies in the SIC for their regulated customers:

	Year ended December 31,
Company	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		2025		2026		2027
	(in GWh)
Chilectra		7,160		7,393		7,375		7,528		7,621		7,624		7,624		6,574		4,874		3,524		3,524		2,850		1,350		1,350
CGE		4,964		5,953		6,258		6,119		6,034		6,078		5,201		5,201		3,801		3,801		3,801		—		—		—
Chilquinta		1,331		1,637		1,639		1,701		1,742		1,755		1,755		1,755		1,755		1,755		1,095		350		350		—
Saesa		2,540		2,524		2,266		2,190		2,140		2,081		581		581		581		581		581		—		—		—
Total Endesa Chile		15,996		17,507		17,538		17,538		17,538		17,538		15,161		14,111		11,011		9,661		9,001		3,200		1,700		1,350

For 2013, 2012 and 2011, Endesa Chile and its Chilean subsidiaries held 46%, 46% and 45% respectively of the total publicly tendered supply regulated contracts with the distribution companies in the SIC for their regulated customers. The rest of the contracts are distributed among eight companies.

Our generation contracts with unregulated customers are generally on a long-term basis and typically range from five to fifteen years. Such contracts are usually automatically extended at the end of the applicable term, unless terminated by either party upon prior notice. Some of them include a price adjustment mechanism in the case of high marginal costs, which also reduces the hydrological risk.

Contracts with unregulated customers may also include specifications regarding power sources and equipment, which may be provided at special rates, as well as provisions for technical assistance to the customer. We have not experienced any supply interruptions under our contracts. If we experience a force majeure event, as contractually defined, we are allowed to reject purchases and we are not required to supply electricity to our unregulated customers. Disputes are typically subject to binding arbitration between the parties, subject to limited exceptions.

35

The following table sets forth our sales by volume to our five largest distribution and unregulated customers in Chile for each of the periods indicated:

MAIN CUSTOMERS IN CHILE (GWh) (1)

	Year ended December 31,
	2013				2012 (6)				2011 (6)
	Sales		% of Sales   Volume		Sales		% of Sales   Volume		Sales		% of Sales   Volume
Distribution companies:
Chilectra		5,296		27.9		5,008		24.0		4,679		22.4
CGE		4,208		22.2		4,152		19.9		3,887		18.6
Chilquinta		1,588		8.4		1,407		6.7		1,332		6.4
Saesa group (2)		2,076		10.9		1,312		6.3		1,066		5.1
Emel group (3)		1,056		5.6		968		4.6		1,018		4.9
Total sales to the largest distribution companies		14,224		74.9		12,848		61.5		11,981		57.4
Unregulated customers:
Cía. Minera Collahuasi		927		4.9		894		4.3		903		4.3
Grupo CAP-CMP (4)		960		5.1		1,027		4.9		1,076		5.2
Cía. Minera Carmen de Andacollo		479		2.5		443		2.1		423		2.1
CMPC (5)		271		1.4		584		2.8		683		3.3
Codelco (6)		129		0.7		538		2.6		557		2.7
Cía. Minera Los Pelambres (7)		—		—		1,165		5.6		1,155		5.5
Total sales to the largest unregulated customers		2,766		14.6		4,650		22.3		4,797		23.1

(1) Excludes GasAtacama, which was included in previous reports.

(2) The values of the Saesa Group include the consumption of the distributors Saesa and Empresa Eléctrica de la Frontera S.A.

(3) The data for the Emel Group includes the consumption of Empresa Eléctrica de Melipilla, Colchagua y Maule (“Emelectric”), Empresa Eléctrica de Talca (“Emetal”) and Empresa Eléctrica de Atacama (“Emelat”), customers of Endesa Chile. The Emel Group is a subsidiary of the CGE Group.

(4) Consumption of Grupo CAP and Compañía Minera del Pacífico S.A. (“CMP”) includes the contracts with CAP Huachipato, CMP Algarrobo, CMP Hierro Atacama, CMP Los Colorados, CMP Pellets and CMP Romeral.

(5) CMPC reduced its consumption from the Laja plant.

(6) The contract with Codelco ended in March 2013.

(7) The contract with Compañía Minera Los Pelambres ended in December 2012.

We compete in the SIC primarily with two generation companies, Gener and Colbún S.A. (“Colbún”). According to the CDEC-SIC in 2013, in the SIC, Gener and its subsidiaries had an installed capacity of 2,579 MW, of which 89.5% was thermoelectric, and Colbún had an installed capacity of 2,957 MW, of which 57.4% was thermoelectric. In addition to these two large competitors, there are a number of smaller entities with an aggregate installed capacity of 2,973 MW that generate electricity in the SIC.

Our primary competitors in the SING are E-CL (GDF Suez group) and Gener, which have 2,147 MW and 1,465 MW of installed capacity, respectively. Our direct participation in the SING includes our 182 MW Tarapacá thermal plant, owned by our subsidiary Celta.

36

Electricity generation companies compete largely on the basis of price, technical experience and reliability. In addition, because 64.3% of our installed capacity in the SIC comes from hydroelectric power plants, we have lower marginal production costs than companies generating electricity through thermal plants. Our thermal installed capacity benefits from access to gas from the Quintero LNG terminal. During periods of extended droughts, however, we may be forced to buy more expensive electricity from thermoelectric generators at spot prices in order to satisfy our contractual obligations.

Directly and through our subsidiaries, we are the principal generation operator in the SIC, with 38.3% of the total installed capacity and 40.5% of the electricity energy sales of this system in 2013.

In the SING, our subsidiary Celta accounted for 4.0% of the total installed capacity in 2013 and 6.6% of the electricity energy sales of this system in 2013.

Operations in Argentina

We participate in electricity generation in Argentina through our subsidiaries Endesa Costanera and El Chocón, with a total of twenty power units. El Chocón owns nine hydroelectric units, with total installed capacity of 1,328 MW and Endesa Costanera owns eleven thermal units, with a total installed capacity of 2,324 MW. Our hydro and thermal generation units in Argentina represented 11.6% of the Argentine National Interconnection System (Sistema Interconectado Nacional, the “Argentine NIS”) installed capacity in 2013.

Our Argentine subsidiaries have holdings in three additional companies, Termoelélectrica Manuel Belgrano S.A., Termoelélectrica San Martín S.A. and Central Vuelta de Obligado S.A. These companies were formed to undertake the construction of three new generation facilities for FONINVEMEM. The first two plants started operations using gas turbines in 2008, with 1,125 MW of aggregate capacity, and combined cycles as of March 2010, with an additional 572 MW. The total aggregate capacity of these units is 1,697 MW (848 MW for Manuel Belgrano and 849 MW for San Martín). We expect that the third plant will start open cycle operations in mid-2015 (with an installed capacity of 550 MW) and in combined cycle in the beginning of 2016 (with a total installed capacity of 800 MW).

Since 2002, government intervention and energy industry authority actions, including limiting the spot price of electricity by considering the variable cost of generating electricity with natural gas and without considering the hydrological conditions of rivers and reservoirs or the use of more expensive fuels, have led to the lack of investment in the electric power sector. (See “Item 4. Operation of the Company — B. Business Overview — Electricity Industry Regulatory Framework” for further detail). In addition, since 2002, the Argentine government has taken an active role in controlling the supply of fuel to the electricity generation sector. In March 2013, the government intervened in the fuel markets through Resolution 95/2013. CAMMESA (the electric market operator) is now responsible of the supply and commercial management of fuels for electric generation purposes.

As of December 31, 2013, Endesa Costanera’s installed capacity accounted for 7.4% of the total installed capacity in the Argentine NIS. Endesa Costanera’s second combined-cycle plant can operate with either natural gas or diesel. Our 1,138 MW steam turbine power plant also can operate with either natural gas or fuel oil.

El Chocón accounted for 4.2% of the installed capacity in the Argentine NIS as of December 31, 2013. El Chocón has a 30-year concession, ending in 2023, for two hydroelectric generation facilities with an aggregate of 1,328 MW of installed capacity. The larger of the two facilities for which El Chocón has a concession of 1,200 MW of installed capacity is the primary flood control installation on the Limay River. The facility’s large reservoir, Ezequiel Ramos Mejía, enables El Chocón to be one of the Argentine NIS major peak suppliers. Variations in El Chocón’s water discharge are moderated by El Chocón’s Arroyito facility, a downstream dam with 128 MW of installed capacity. In November 2008, we finished construction work on the Arroyito dam, and increased the elevation of the reservoir water level, that allows releasing water at an additional 1,150 m³/sec, for a total of 3,750 m³/sec. The additional energy, 69 GWh per year, was sold on the spot market until April 2009 and under the “Energy Plus” program thereafter. The Energy Plus program is the offer of new electricity capacity to supply the electricity demand growth, on top of the demand level for electricity in 2005. (For details on Energy Plus, see “Item 4. Information on the Company — B. Business Overview — Electricity Industry Regulatory Framework — Argentina”).

37

For information on the installed generation capacity for each of the Company’s Argentine subsidiaries, see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

Our total generation in Argentina reached 10,840 GWh in 2013. Our generation market share was approximately 8.4% of total electricity production in Argentina during 2013, according to CAMMESA.

Hydroelectric generation in Argentina accounted for nearly 21.4% of our total generation in 2013. This was due to the restrictions of the operation of our El Chocón facility that were imposed by CAMMESA and the dry conditions for the Limay River and for the Collón Curá River, which are the main tributaries of El Chocón. Due to the drought in 2013, the region received around 83% of its historic average rainfall.

Generation by type and subsidiary is shown in the following table:

ELECTRICITY GENERATION IN ARGENTINA (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Generation		%		Generation		%		Generation		%
Hydroelectric generation (El Chocón)		2,317		21.4		2,801		24.8		2,404		22.4
Thermal generation (Endesa Costanera		8,523		78.6		8,406		75.2		8,308		77.6
Total generation		10,840		100.0		11,207		100.0		10,713		100.0

(1) Figures may differ from those previously reported, as the current data are shown net of all losses.

The following table sets forth our electricity generation and purchases in Argentina:

ELECTRICITY GENERATION AND PURCHASES IN ARGENTINA (GWh)

	2013				2012(1)				2011(1)
	(GWh)		%		(GWh)		%		(GWh)		%
Electricity generation (1)		10,840		87.7		11,207		94.6		10,713		94.1
Electricity purchases		1,514		12.3		645		5.4		668		5.9
Total		12,354		100.0		11,852		100.0		11,381		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

The distribution of electricity sales in Argentina, in terms of customer segment and per subsidiary, is shown in the following tables:

ELECTRICITY SALES PER CUSTOMER SEGMENT IN ARGENTINA (GWh)

	Year ended December 31,
	2013				2012				2011
	Sales		% of Sales Volume		Sales		% of Sales Volume		Sales		% of Sales Volume
Contracted sales		1,737		14.1		2,155		18.2		2,145		18.8
Non-contracted sales		10,617		85.9		9,696		81.8		9,236		81.2
Total electricity sales		12,354		100.0		11,852		100.0		11,381		100.0

38

ELECTRICITY SALES PER SUBSIDIARY IN ARGENTINA (GWh)

	Year ended December 31,
	2013		2012		2011
Endesa Costanera		8,962		8,655		8,493
El Chocón		3,392		3,197		2,888
Total		12,354		11,852		11,381

In March 2013, the government intervened in the commercial market for energy, except with respect to the “Energy Plus” program through the Resolution 95/2013. CAMMESA (the electric market operator) is now responsible for the administration of contracts with end customers, except for contracts under the “Energy Plus” program. The resolution defined a transition period in which the electricity generating companies will continue managing the contracts until their expiration date.

At the end of 2013, Endesa Costanera was serving customers under 24 contracts. Endesa Costanera has no contracts with distribution companies.

The following table sets forth Endesa Costanera’s sales to its largest unregulated customers for each of the periods indicated:

ENDESA COSTANERA’S MAIN CUSTOMERS (GWh)

	Year ended December 31,
	2013				2012				2011
	Contracted   Sales		% of   Contracted   Sales		Contracted   Sales		% of   Contracted   Sales		Contracted   Sales		% of   Contracted   Sales
Cencosud (Cemsa) (1)		42		7.2		78		9.2		73		9.9
Transclor (Cemsa) (1)		41		7.0		67		8.0		61		8.3
Peugeot (Cemsa) (1)		24		4.1		42		5.0		31		4.2
Hipermercado Libertad		40		6.9		23		2.7		—		—
Rasic Hnos.		25		4.2		41		4.8		39		5.3
YPF (Cemsa) (1)		—		—		145		17.1		152		20.6
Solvay		—		—		—		—		23		3.1
Total sales to our largest unregulated customers		173		29.3		395		46.8		379		51.4

(1) These customers do not have contracts with Endesa Costanera, but are served through Cemsa, which is a related company.

Sales to the pool market amounted to 8,373 GWh in 2013.

In January 2013, El Chocón had contracts with 17 unregulated customers. Some of these contracts expired during the year and were not renewed. As a result, El Chocón had eight unregulated customers at the end of 2013. El Chocón has two contracts under the “Energy Plus” program; however, it has no contracts with distribution companies.

39

The following table sets forth sales by volume to El Chocón’s largest unregulated customers for each of the periods indicated:

EL CHOCÓN’S MAIN CUSTOMERS (GWh)

	Year ended December 31,
	2013				2012				2011
	Contracted   Sales		% of   Contracted   Sales		Contracted   Sales		% of   Contracted   Sales		Contracted   Sales		% of   Contracted   Sales
Minera Alumbrera		496		43.1		499		38.1		500		35.5
Air Liquide		152		13.2		161		12.3		161		11.4
Profertil (Cemsa) (1)		96		8.3		105		8.0		113		8.0
Praxair		55		4.8		98		7.5		91		6.4
Chevron		92		8.0		87		6.6		83		5.9
Acindar (Cemsa) (1)		82		7.1		81		6.2		80		5.7
Total sales to our largest unregulated customers		972		84.6		1,031		78.6		1,028		72.9

(1) Profertil and Acindar do not have contracts with El Chocón, but are served through Cemsa, which is a related company.

El Chocón does not have the right to terminate its operating agreement with Endesa Chile, unless Endesa Chile fails to perform its obligations under the agreement. Under the terms of the operating agreement, Endesa Chile is entitled to a fee payable in U.S. dollars based on El Chocón’s annual gross revenues, payable in monthly installments.

Electricity demand throughout the Argentine NIS increased 3.2% during 2013, according to CAMMESA. Total electricity demand was 125,167 GWh in 2013, 121,237 GWh in 2012 and 116,446 GWh in 2011. Our Argentine subsidiaries compete with all the major power plants connected to the Argentine NIS. According to the installed capacity reported by CAMMESA, in the monthly report for December 2013, our major competitors in Argentina are the state controlled company Enarsa (with an installed capacity of
2,155 MW), a nuclear unit “NASA” (with an installed capacity of 1,010 MW) and the hydroelectric units Yacyretá and Salto Grande (with an aggregate installed capacity of 3,690 MW). The main private competitors are: AES Group, Sociedad Argentina de Energía S.A. (“Sadesa”), and Pampa Energía. The AES Group has eight power plants connected to the Argentine NIS with a total installed capacity of 3,224 MW (37% of which is hydroelectric). Sadesa owns a total of approximately 3,858 MW of installed capacity, the most significant of which are Piedra del Águila (with an installed capacity of 1,400 MW) and Central Puerto (a thermal facility with
1,777 MW of installed capacity). Pampa Energía, with a total installed capacity of 2,184 MW, competes against us with six power plants, of which 630 MW is hydroelectric and 1,554 MW is thermal.

Operations in Colombia

Our generation operations in Colombia are carried out through Emgesa. We hold a 26.9% stake in Emgesa as of December 31, 2013, which we control and consolidate pursuant to a shareholder’s agreement with Enersis. Enersis owns an additional 21.6% of Emgesa. As of December 31, 2013, our Colombian subsidiary operated 29 generation units in Colombia, with a total installed capacity of 2,925 MW. Emgesa has 2,482 MW in hydroelectric plants and 444 MW in thermoelectric plants. Our hydroelectric and thermal generation plants in Colombia represent 20.0% of the country’s total electricity generation capacity as of December 2013, according to XM.

For information on the installed generation capacity for each of the Company’s Colombian subsidiaries, see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

Approximately 85% of our installed capacity in Colombia is hydroelectric. As a result, our electricity generation depends on the reservoir levels and rainfalls. Our generation market share in Colombia was 20.5% in 2013, 22.2% in 2012 and 20.6% in 2011, according to XM. In addition to hydrological conditions, the amount of

40

generation depends on our commercial strategy. Companies are free to offer their electricity at prices driven by market conditions and are dispatched by a centralized operating entity to generate according to the prices offered, as opposed to being dispatched according to the operating costs, as in other countries in which we operate.

During 2013, thermal generation represented 7.6% of total generation and hydroelectric generation represented the remaining 92.4% of our generation in Colombia. During 2013, hydrological conditions were below the historical average in Colombia, with rainfall around 91% of the historical average. For Emgesa, the flows in the Guavio River Basin were 84% of average and the flows in the Magdalena River (Betania) were 89% of average while the flows in the and Bogotá River (Cadena Nueva) were a more favorable 132% of average according to XM. The poor hydrological condition affected Emgesa’s generation which was lower by 6.8% compared to 2012.

Generation by type in Colombia is shown in the following table:

ELECTRICITY GENERATION IN COLOMBIA (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Generation		%		Generation		%		Generation		%
Hydroelectric generation		11,784		92.4		12,649		95.5		11,613		96.4
Thermal generation		964		7.6		602		4.5		438		3.6
Total generation		12,748		100.0		13,251		100.0		12,051		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

During 2013, Emgesa used 465 kilotons of coal for its coal-fired plants, which were obtained from over 20 local suppliers. The local coal price has remained below the export price as high transport costs make it difficult for domestic coal to compete in the export market. This trend is expected to continue in the Colombian coal market.

During 2013, Emgesa also entered into a fuel oil supply agreement with Esapetrol, which complemented the existing oil supply contracts with Petromil and Biomax. We believe this will ensure Emgesa has access to a reliable supply of fuel oil for the Cartagena power plant.

The following table sets forth our electricity generation and purchases in Colombia:

ELECTRICITY GENERATION AND PURCHASES IN COLOMBIA (GWh)

	Year ended December 31,
	2013				2012 (1)				2011 (1)
	GWh		%		GWh		%		GWh		%
Electricity generation (1)		12,748		78.6		13,251		80.8		12,051		79.2
Electricity purchases		3,461		21.4		3,153		19.2		3,163		20.8
Total (2)		16,209		100.0		16,404		100.0		15,215		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

(2) Electricity generation plus electricity purchases differ from electricity sales because of the pumps for the Muña reservoir.

The only interconnected electricity system in Colombia is the National Interconnected System (Sistema Interconectado Nacional, the “Colombian NIS”). Electricity demand in the Colombian NIS increased 2.6% during 2013. Total electricity consumption was: 60,890 GWh in 2013, 59,370 in 2012 and 57,150 GWh in 2011.

The generation in Colombia’s electricity market has been affected by an agreement with Ecuador to provide an interconnection between the electricity systems of Colombia and Ecuador. During 2013, Colombian electricity generator sold 662 GWh of electricity to Ecuadorian customers.

41

In addition, Colombia has interconnection links with Venezuela that operate under exceptional circumstances as needed by either of the two countries. In early April 2011, Colombia and Venezuela signed an agreement to supply energy to Venezuela as part of the normalization of commercial relations. The agreement also includes the import of gasoline and diesel from Venezuela. The total energy exported was 715 GWh in 2013.

The distribution of our electricity sales in Colombia by customer segment is shown in the following table:

ELECTRICITY SALES PER CUSTOMER SEGMENT IN COLOMBIA (GWh)

	Year ended December 31,
	2013				2012				2011
	Sales		% of Sales  Volume		Sales		% of Sales  Volume		Sales		% of Sales  Volume
Contracted sales		11,567		71.9		11,719		71.9		10,544		69.8
Non-contracted sales		4,523		28.1		4,585		28.1		4,568		30.2
Total electricity sales		16,090		100.0		16,304		100.0		15,112		100.0

During 2013, Emgesa served customers under an average of 798 contracts, serving 440 unregulated customers and 13 were for distribution and trading companies. Emgesa’s sales to our distribution company, Codensa, accounted for 36.7% of our total contracted sales in 2013. Electricity sales to the five largest unregulated customers represented 5.9% of total contracted sales.

The following table sets forth our sales by volume to our largest distribution customers in Colombia for the last three years:

MAIN DISTRIBUTION AND TRADING CUSTOMERS IN COLOMBIA (GWh)

	Year ended December 31,
	2013				2012				2011
	Contracted   Sales		% of   Contracted   Sales		Contracted   Sales		% of  Contracted  Sales		Contracted   Sales		% of  Contracted  Sales
Codensa (Enersis)		4,236		36.7		5,016		42.8		5,035		47.8
Electrificadora del Caribe (Electrocaribe)		2,262		19.6		371		3.2		360		3.4
Cía. Energética del Tolima (Enertolima)		498		4.3		—		—		—		—
Electrificadora de Boyacá (EBSA)		320		2.8		—		—		—		—
Empresas Públicas de Medellín (EPM)		249		2.1		806		6.9		760		7.2
Empresa de Energía de Cundinamarca (EEC) (Enersis)		241		2.1		235		2.0		266		2.5
Centrales Eléctricas del Norte de Santander (CENS)		125		1.1		573		4.9		152		1.4
Electrificadora de Santander		39		0.3		373		3.2		47		0.4
Electrificadora del Huila		80		0.7		—		—		416		3.9
Electrificadora del Meta (Meta)		—		—		—		—		82		0.8
Total sales to our largest distribution customers		8,050		69.7		7,375		62.9		7,118		67.4

Our most important competitors in Colombia include the following state-owned companies: Empresas Públicas de Medellín (with an installed capacity of 3,251 MW) and Isagen (with an installed capacity of 2,182 MW). We also compete with the following private sector companies in Colombia: Chivor (with an installed capacity of 1,000 MW), which is owned by Gener; Colinversiones (with an installed capacity of 1,982 MW), which includes Termoflores and Epsa; and Gecelca (with an installed capacity of 1,207 MW).

42

Operations in Peru

Through our subsidiary Edegel, we operate a total of 24 generation units in Peru, with a total installed capacity of 1,540 MW. As of December 2013. Edegel owns 18 hydroelectric units, with a total installed capacity of 750 MW. The company has six thermal units, which represent the remaining 790 MW of total installed capacity. During October 2013, the TG 7 unit of Santa Rosa in Peru was decommissioned. Our hydroelectric and thermal generation plants in Peru represent 19.7% of the country’s total electricity generation capacity according to the information reported in December 2013 by Osinergmin.

For information on the installed generation capacity for each of the Company’s power plants in Peru, see “Item 4. Information on the Company — D. Property, Plant and Equipment.”

Generation by type in Peru is shown in the following table:

ELECTRICITY GENERATION IN PERU (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	Generation		%		Generation		%		Generation		%
Hydroelectric generation		4,474		53.3		4,428		51.7		4,528		50.4
Thermal generation		3,917		46.7		4,141		48.3		4,452		49.6
Total generation		8,391		100.0		8,570		100.0		8,980		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

In 2013, we generated 21.9% of total electricity production in Peru according to COES.

Hydroelectric generation represented 53.3% of Edegel’s total production in 2013. For Edegel, all hydrological contributions were above their historical average in 2012: in the Rimac River Basin (Huinco, Matucana, Callahuanca, Moyopampa, Huampaní) hydrological contributions were 114%; in the Tulumayo River (Yanango) hydrological contributions were 112%; and in the Tarma River (Chimay) hydrological contributions were 118% according to COES, the operator of the Peruvian system.

The portion of electricity supplied by Edegel’s own generation was 94.2% of total electricity sales, requiring 5.8% of purchases to satisfy contractual obligations to customers.

Edegel has long-term gas supply, transportation and distribution contracts for its Ventanilla and Santa Rosa facilities. It has also signed firm transport capacity transfer agreements with other generators, which allows them to trade firm transport capacity to operate as indicated for the COES (the electric market operator) and optimize the use of the natural gas transport system.

43

The following table sets forth our electricity generation and purchases in Peru:

ELECTRICITY GENERATION AND PURCHASES IN PERU (GWh) (1)

	Year ended December 31,
	2013				2012				2011
	GWh		%		GWh		%		GWh		%
Electricity generation		8,391		94.2		8,570		89.4		8,980		95.0
Electricity purchases		512		5.8		1,018		10.6		469		5.0
Total (1)		8,903		100.0		9,587		100.0		9,450		100.0

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses.

The Peruvian National Interconnected Electric System (Sistema Eléctrico Interconectado Nacional, “SEIN”) is the only interconnected system in Peru. Electricity sales in the SEIN increased 5.9% during 2013 compared to 2012, reaching total annual sales of 35,632 GWh.

The distribution of Edegel’s electricity sales, in terms of customer segment, is shown in the following table:

ELECTRICITY SALES PER CUSTOMER SEGMENT IN PERU (GWh)

	Year ended December 31,
	2013				2012				2011
	Sales		% of Sales   Volume		Sales		% of Sales   Volume		Sales		% of Sales   Volume
Contracted sales (1)		7,892		88.6		9,092		94.8		8,632		91.3
Non-contracted sales		1,011		11.4		495		5.2		818		8.7
Total electricity sales		8,903		100.0		9,587		100.0		9,450		100.0

(1) Includes sales to distributors without contracts.

Edegel’s electricity sales in 2013 decreased 7.1% compared with 2012 mainly due the expiration of contracts, which is reflected in the lower contracted sales. During 2013, Edegel had nine regulated customers and 14 unregulated customers. Sales to unregulated customers represented 42.2% of Edegel’s total contracted sales in 2013.

During 2011, Luz del Sur carried out a long-term tender process for 2018-2027, with an energy requirement of approximately 2,500 GWh/year. An amount of 2,245 GWh was granted to Cerro del Águila, Celepsa, Egesur, Enersur and Fenix. The remaining unallocated amount of 255 GWh was declared void.

During 2012, Edelnor carried out a long-term tender process for 2016-2027, with an energy requirement of approximately 990 GWh/year. The contracts were granted to EEPSA (12.5%), Egejunin (1.8%), Edegel (42.3%), Fenix (24.9%) and Kallpa (18.5%).

In 2013, there were no long-term tenders in Peru.

44

The following table sets forth our sales by volume to our largest customers in Peru for each of the periods indicated:

MAIN CUSTOMERS IN PERU (GWh)

	Year ended December 31,
	2013				2012				2011
	Contracted   Sales		% of  Contracted  Sales		Contracted   Sales		% of  Contracted  Sales		Contracted   Sales		% of  Contracted  Sales
Distribution companies:
Edelnor (Regulated) (1) (2)		2,455		31.1		3,130		34.4		4,173		48.3
Luz del Sur (Regulated) (1)		1,250		15.8		1,917		21.1		1,539		17.8
ElectroSur (3)		367		4.7		362		4.0		–		–
Seal		237		3.0		–		–		99		1.1
Hidrandina (3)		92		1.2		573		6.3		–		–
Total sales to our largest distribution companies		4,401		55.8		5,981		65.8		5,811		67.2
Unregulated customers:
Refinería Cajamarquilla		1,341		17.0		1,332		14.6		1,320		15.3
Antamina		912		11.6		889		9.8		708		8.2
SN Power		349		4.4
Siderúrgica del Peru		322		4.1		309		3.4		288		3.3
Creditex		83		1.0		72		0.8		78		0.9
Total sales to our largest unregulated companies		3,006		38.1		2,601		28.6		2,394		27.7
Total sales to our largest customers		7,407		93.9		8,583		94.4		8,205		94.9

(1) The figures for Edelnor and Luz del Sur represent sales under bilateral contracts with Edegel only, and not withdrawals of these companies assigned to Edegel for non contract-related consumption. The energy sold to these distributors includes the amount granted to Edegel in the bids realized since 2006.

(2) Edelnor reduced its consumption in 2013 compared to 2012 due to the reduction in the dispatch of two contracts.

(3) Hidrandina and ElectroSur have been customers since 2012. Edegel entered into bilateral contracts with each customer at the bar price between January 2012 and December 2012 and between January 2012 and December 2013, respectively.

Our most important competitors in Peru are Enersur (GDF-Suez group, with an installed capacity of 1,264 MW); Electroperú (a state-owned competitor, with an installed capacity of 902 MW); Kallpa (Inkia Energy group, with an installed capacity of 861 MW); and Egenor (Duke Energy group, with an installed capacity of 622 MW).

45

ELECTRICITY INDUSTRY REGULATORY FRAMEWORK

The following chart shows a summary of the main characteristics of the electricity regulatory framework by business segment in the countries in which we operate.

		Argentina		Brazil	Chile	Peru	Colombia
	Unregulated Market		Regulated remuneration scheme Resolution 95/2013	Spot markets with costs audited by the regulator			Spot market with auctioned cost (Price- offered)
Gx	Regulated		Seasonal Price	Auction 20 years for Thermal / 30 years for Hydro	Node Price auction 15 years	Node Price auction 20 years	Auction 3/5 years
	Capacity		Contribution peak demand	—	Income based on contributions during peak demand		Firm energy contribution (energy auctions for at least 20 years)
Tx	Features			Public - Open Access - Regulated Tariff – Monopoly Regime for Transmission System Operators (“TSOs”)
	Law		Concession contract		Administrative Concession (indefinite)		Authorization Operation Zone
Dx	Expansion		95 years	30 years	Undefined
					4 years		5 years
	Tariff review		5 years	4/5 years
Cx	Unregulated Agents		> 0.03 MW	> 0.5 MW	> 0.5 MW	> 0.2 MW	> 0.1 MW
	Liberalized (%)		≈ 20%	≈25%	≈30%	≈45%	≈30%

      Gx: Generation                       Tx: Transmission             Dx: Distribution Cx: Trading            

Chile

Industry Overview

Industry Structure

The Chilean electricity industry is divided into three business segments: generation, transmission and distribution. These business segments are carried out by publicly-owned private sector companies. The state’s role is circumscribed to regulation, supervision and indicative investment planning through non-binding recommendations in the case of the generation and transmission businesses, with the exception of the main transmission system in which indicative planning is binding as well as part of the bidding processes for its construction.

46

The following chart shows the relationships among the various participants in the Chilean market:

The generation segment comprises a group of electricity companies that own generating plants, whose energy is transmitted and distributed to end customers. This segment is characterized by being a competitive market which operates under market-driven conditions. Generating plants sell their production to distribution companies, unregulated customers, other generation companies, and their surpluses on the spot market.

The transmission system comprises a combination of lines, substations and equipment for the transmission of electricity from the production points (generators) to the centers of consumption or distribution. Transmission in Chile is defined as lines or substations with a voltage or tension higher than 23 kV. The transmission system is open access, and transmission companies may impose rights of way over the available transmission capacity through the payment of tolls.

The distribution segment is defined for regulatory purposes as all electricity supplies to end customers at a voltage no higher than 23 kV. Distribution companies operate under a distribution public utility concession regime, with service obligations and regulated tariffs for supplying regulated customers.

Customers are classified according to their amount of demand, as follows: (i) unregulated customers with a connected capacity over 2,000 kW; (ii) regulated customers with connected capacity of no more than 500 kW; and (iii) customers that choose for either a regulated-tariff or an unregulated regime, for a minimum period of four years in each regime, available to customers whose connected capacity falls in the range of 500 kW to 2,000 kW.

The distribution companies supply regulated customers, a segment for which the price and supply conditions are the result of tender processes regulated by the CNE, and unregulated customers, with bilateral agreements between generators, whose conditions are freely negotiated and agreed.

In Chile, there are four separate interconnected electricity systems. The main systems that cover the most populated Chilean areas are the SIC, which services the central and south central part of the territory, where 92% of the Chilean population lives, and the SING, which operates in the northern part of the country, where most of the mining industry is located and where 6% of the Chilean population lives (figures based on the 2013 CDEC-SIC annual report). In addition to the SIC and the SING, there are two isolated systems in southern Chile that provide electricity to remote areas, where 2% of the population lives.

In 2013, the Chilean government sent a proposal to modify the Chilean Electricity Law (described below) to allow the state to promote the interconnection project between the SIC and the SING. In January 2014, the proposal was approved and signed into law by the Chilean President as Law 20,726. The interconnection is expected to be completed between 2018 and 2019.

47

The operation of electricity generation companies in each of the two major interconnected electricity systems is coordinated by their respective dispatch centers, known as a CDEC, an independent entity that coordinates generators, transmission companies and large customers. CDEC coordinates the operation of its system with an efficiency criterion in which the lowest cost producer available is usually required to satisfy demand at any moment in time. As a result, at any specific level of demand, the appropriate supply will be provided at the lowest possible production cost available in the system. The marginal cost used is the price at which generators trade energy on an hourly basis, involving both their injections into the system and their withdrawals or purchases for supplying their customers.

Principal Regulatory Authorities

The Chilean Ministry of Energy develops and coordinates plans, policies and standards for the proper operation of the sector, approves tariffs and node prices set by the CNE, and regulates the granting of concessions to electricity generation, transmission and distribution companies.

The CNE is the technical entity in charge of defining prices, technical standards and regulatory requirements. The SEF monitors the proper operation of electricity, gas and fuel sectors in compliance with the law in terms of safety, quality, and technical standards.

The Chilean Ministry of Environment is responsible for the development and application of regulatory and policy instruments that provide for the protection of natural resources, the promotion of environmental education and the control of pollution, among other matters. It is also responsible for administering the environmental impact assessment system at the national level, coordinating the preparation of environmental standards and establishing the programs for compliance with the standards.

Chilean antitrust authorities are responsible for preventing, investigating and correcting any threats to free market competition and any anti-competitive practices by potentially monopolistic companies. These authorities include:

— Free Market Competition Tribunal (“TDLC” in its Spanish acronym). This is a special and independent jurisdictional entity, subject to the directive, correctional and economic authority of the Chilean Supreme Court, which functions to prevent, correct and sanction threats to free market competition.

— National Economic Prosecutor (“FNE” in its Spanish acronym). This is the attorney general responsible for economic matters and for investigating and prosecuting all antitrust conduct before the FNE’s resolutory commission and other tribunals.

The panel of experts acts as a tribunal in electricity matters arising from disputes between participants in the electricity market and the regulatory authority in certain tariff processes. It issues enforceable resolutions and comprises experts in industry matters, five engineers or economists and two lawyers, all of whom are elected every six years by the TDLC.

There are also other entities related to the energy sector: the Chilean Nuclear Energy Committee in charge of research, development, use and control of nuclear energy, and the Chilean Energy Efficiency Agency, in charge of promoting energy efficiency.

The Electricity Law

General

Since its inception, the Chilean electricity industry has been developed by private sector companies. Nationalization was carried out during the period 1970-73. During the 1980s, the sector was reorganized through the Chilean Electricity Law, known as DFL 1, allowing participation of private capital in the electricity sector. By the end of the 1990s, foreign companies had a majority participation in the Chilean electricity system.

48

The goal of the Chilean Electricity Law is to provide incentives to maximize efficiency and to provide a simplified regulatory scheme and tariff-setting process that limits the discretionary role of the government by establishing objective criteria for setting prices. The goal is an economically efficient allocation of resources. The regulatory system is designed to provide a competitive rate of return on investment to stimulate private investment, while ensuring the availability of electricity to all who request it.

DFL 1 was published in 1982 and has had only two important changes since then. The first one took place in 2004 to encourage investments in transmission lines. The second one was in 2005 to create long-term contracts between generation and distribution companies as part of a bid process.

The present text of the law was restated in DFL No. 4 of 2006, which is supplemented with a series of regulations and standards.

Limits and Restrictions

The owners of the main transmission system must be constituted as limited liability stock corporations and cannot take part in the electricity generation or distribution businesses.

Individual participation in the Main Transmission System (“STT”) by companies operating in another electricity or unregulated customer segment cannot exceed, directly or indirectly, 8% of the total investment value of the STT. The aggregate participation of all such agents in the STT must never exceed 40% of the investment value.

According to the Chilean Electricity Law, there are no restrictions on market concentration for generation and distribution activities. However, Chilean antitrust authorities have imposed certain measures to increase the transparency within the different companies that form the Enersis group. The FNE’s resolution 667/2002 requires:

(i) board members of Enersis, Endesa Chile and Chilectra be elected from different and independent groups;

(ii) the external auditors of Enersis, Endesa Chile and Chilectra be different;

(iii) Enersis, Endesa Chile and Chilectra may not merge companies within the Enersis group which operate in electricity generation and distribution; instead, Enersis must continue to maintain both business segments separately through companies that are independent business units; and

(iv) Enersis, Endesa Chile and Chilectra must remain subject to the regulatory authority of the SVS and comply with the regulations applicable to publicly held stock corporations, even if they should lose such designation.

Additionally, in October 2012, Official Letter No. 1479 imposed additional restrictions on Endesa Chile stating that:

(i) the controlling shareholders should refrain from designating those persons who had been directors of Chilectra the prior term, as Endesa Chile directors; and

(ii) Endesa Chile’s management should refrain from designating employees in first and second level positions, that had held the same positions in Chilectra during the six months prior to their designation.

In addition, the Water Utility Services Law also sets restrictions on the overlapping of concessions in the same area, setting restrictions on the ownership of the property between sewage services concessions and utilities that are natural monopolies, such as electricity distribution, gas or home telephone networks.

49

Regulation of Generation Companies

Concessions

The law permits generation activity without a concession. However, companies may apply for a concession to facilitate access to third-party properties. Third-party property owners are entitled to compensation, which may be agreed to by the parties or, if there is no agreement, it may be determined by an administrative proceeding that may be appealed in the Chilean courts.

Dispatch and Pricing

In each transmission system, the pertinent CDEC coordinates the operations of generation companies, in order to minimize the operating costs in the electricity system and monitor the quality of service provided by the generation and transmission companies. Generation companies satisfy their contractual sales requirements with dispatched electricity, whether produced by them or purchased from other generation companies in the spot market.

Sales by Generation Companies to Unregulated Customers

Sales by generation companies may be made to final unregulated customers or to other generation companies under freely negotiated contracts. To balance their contractual obligations with their dispatch, generators have to trade deficit and surplus electricity at the spot market price, which is set hourly by each CDEC, based on the lowest cost of production of the next kWh to be dispatched.

Sales to Distribution Companies and Certain Regulated Customers

Prior to 2005, sales to distribution companies for resale to regulated customers were made through contracts at regulated prices set by the CNE (node prices) in effect at the relevant locations (or nodes) on the interconnected system through which such electricity was supplied. Under Law 20,018 Ley Corta II, enacted on May 19, 2005, all new contracts between generation and distribution companies to supply electricity to regulated customers must arise from international bids. The bids must have a maximum energy price offer based on the average price paid by the unregulated customers at the time that the bid takes place, which is calculated twice a year by the CNE. If a first bid is unsuccessful, the CNE may increase this maximum price by an additional 15%. The bids are awarded on a minimum price basis. The average prices associated with these bids are transferred directly to end customers, replacing the regulated node price regime. During the term of the contracts, the energy and capacity prices are indexed according to formulas set forth in the bid documentation and linked to fuel, investment and other costs of energy generation. Under the bid system, all distribution companies have separate electricity contracts for their regulated and unregulated customers.

Due to the bankruptcy of the generating company Campanario in September 2011, certain regulated customers in the central-southern region of the country no longer had electricity contracts. In response, the Chilean government published two resolutions: RM 2288 and RM 239. Pursuant to these resolutions, all generating companies must meet demand from their customers on a pro rata basis to their injections into the system until new contracts are awarded under new tendering processes. As of the date of this Report, only 47% of this energy has been awarded to generation companies until December 2014 (of which 38% was to Endesa Chile and 9% to Gener).

As in most of the countries of the region, the Chilean electricity markets are concentrated on a few big operators. In the generation market, ranked by electricity generation market share, the major participants are as follows: Endesa Chile 29 %, Gener 28%, Colbún 16.5% and GDF Suez 14%, according to CDEC-SIC and CDEC-SING. In the distribution market, ranked by physical sales market share, the major participants are as follows: Chilectra (an Enersis subsidiary) 40%, Compañía General de Electricidad 39% Saesa Frontel 9% and Chilquinta 9%, according to Empresas Eléctricas A.G.

50

Sales of Capacity to Other Generation Companies

Each CDEC determines a firm capacity for each power plant on an annual basis. Firm capacity is the highest capacity which a generator may supply to the system at certain peak hours, taking into consideration statistical information and accounting for time out of service for maintenance purposes and for extremely dry conditions in the case of hydroelectric plants.

A generation company may be required to purchase or sell capacity in the spot market, depending upon its contractual requirements in relation to the amount of electricity to be dispatched from such company and to its firm capacity.

Regulatory Charges

Chilean laws have not established any specific charge for the electric system. Nevertheless, if the tariff for residential customers increases by more than 5% in a six-month period, the government can establish a subsidy for low-income families. The last governmental subsidy was granted in 2009.

Promotion of Generation from Renewable Energy Sources

On April 1, 2008, Law 20,257 amended Law 19,940 of March 2004, known as the General Electric Services Law. The purpose of the amendment was to promote the use of NCRE. This law defines the different types of technologies that qualify as NCRE and establishes the obligation for generators, between 2010 and 2014, to supply at least 5% of the total energy contracted as of August 31, 2007, to be of a certain type, and to progressively increase this percentage by 0.5 percentage points annually up to a minimum of 10% as of 2024.

On October 22, 2013, Law 20,698 (known as the “20/25 Law”) supported renewable energy sources and modified the previously defined NCRE minimum requirements. This law establishes a mandatory share of renewable energy sources in 2025, calculated as a percentage of the total contracted energy of each generator. In particular, for those contracts signed between 2007 and 2013, the target is 10% in 2024, while for contracts beyond 2013, the target is 20% by 2025.

Incentives and Penalties

If a rationing decree is enacted in response to prolonged periods of electricity shortages, strict penalties may be imposed on generation companies that contravene the decree. A severe drought is not considered a force majeure event under our service agreements.

Generation companies may also be required to pay fines to the regulatory authorities, as well as to make compensatory payments to electricity customers affected by shortages of electricity. The fines are related to system blackouts due to an electricity generator’s operational problems, including failures related to the coordination duties of all system agents. If generation companies cannot satisfy their contractual commitments to deliver electricity during periods when a rationing decree is in effect and there is no energy available to purchase in the system, the generation company must compensate the customers at a rate known as the “failure cost” determined by the authority in each tariff setting. This failure cost, which is updated semiannually by the CNE, is a measurement of how many final customers would pay for one extra MWh under rationing conditions.

Regulation in Transmission

The main transmission system consists of 220 kV or higher voltage lines that are used by generators and customers. Every four years, a study is done to evaluate the existing system and to define the expansion plan. On December 31, 2010, the last study was delivered to the CNE. In November 2011, the CNE promulgated Decree 61, which defines the current value of the existing lines to be remunerated for the 2011 to 2014 period. The main transmission system is paid by generators and customers.

51

According to the modifications to the General Electricity Services Law, the transportation of electricity by main transmission systems and sub-transmission systems are defined as a public service. Therefore, the transmitter has a service obligation and is responsible for the maintenance and improvement of its facilities.

On October 14, 2013, the Electricity Concessions Law was approved, which law aims to streamline the processing of electrical concessions, including, among other things, compensation, taxation and notifications.

Regulation in Subtransmission

Subtransmission systems are defined as voltage lines exceeding 23 kV. There are seven subtransmission systems defined by decree. The subtransmission systems are paid mainly by customers according to the values fixed by decree of the Ministry of Energy. Generators and unregulated customers pay only for the lines they use in each system. In April 2013, Decree 14 was promulgated, which established a tariff schedule from 2011 through 2014.

Environmental Regulation

The Chilean Constitution grants citizens the right to live in a pollution-free environment. It further provides that certain other constitutional rights may be limited in order to protect the environment. Chile has numerous laws, regulations, decrees and municipal ordinances that address environmental considerations. Among them are regulations relating to waste disposal (including the discharge of liquid industrial wastes), the establishment of industries in areas in which they may affect public health, and the protection of water for human consumption.

Environmental Law 19,300 was enacted in 1994 and implemented by several rules, such as the Environmental Impact Assessment System Rule issued in 1997 and modified in 2001. This law requires companies to conduct an environmental impact study and a declaration of any future generation or transmission projects.

In January 2010, Law 19,300 was modified by Law 20,417, which introduced changes in the environmental assessment process and in the public institutions involved, principally creating the Chilean Ministry of Environment and the Superintendency of Environment. Consequently, environmental assessment processes are coordinated by this entity and the Environmental Assessment Service.

For more information about Chile’s NCRE regulations, see “— Promotion of Generation from Renewable Energy Sources”.

In June 2011, the Ministry of Environment published Decree 13, emission standards for thermoelectric plants applicable to generation units of at least 50 MW, in the Diario Oficial, a governmental publication. The object of this regulation is to control atmospheric emissions of particulate matter (MP), nitrogen oxides (NOx), sulfur dioxide (SO2) and mercury (Hg), in order to prevent and protect the health of the population and protect the environment. Existing emission sources will have to meet emission limits as established in the regulation for MP emissions within two and a half years from the date this decree was published (December 2013) and for SO2 and NOx emissions, within four years in highly polluted areas and within five years elsewhere.

In June 2012, Law 20,600 created the Environmental Courts, special jurisdictional courts subject to the control of the Chilean Supreme Court. Their primary function is to resolve environmental disputes within their jurisdiction and look into other matters that are submitted for their attention under the law. The law created three such courts, the first of which began operating in December 2012 and the other two of which began operating in June 2013.

On December 28, 2012, the Superintendency of Environment was formally created and began to exercise its powers of enforcement and sanctions pursuant to Chilean environmental regulations.

Water Rights

Companies in Chile must pay an annual fee for unused water rights. License fees already paid may be recovered through monthly tax credits commencing on the start-up date of the project associated with the water right. The maximum license fees that may be recovered are those paid during the eight years before the start-up date.

52

The Chilean constitution considers water as a national public good on which real utilization rights are defined; that is similar to holding the private property rights over water, as set forth in article 19, paragraph 24 “The rights of individuals over water, recognized or constituted in accordance with the law, grant their holders ownership over such rights.” Notwithstanding the foregoing, paragraph 24 also elaborates on the societal function of the private property so that water rights are subject to legal limitations.

Argentina

Industry Overview

Industry Structure

In the Argentine Wholesale Electricity Market (“Argentine MEM” in its Spanish acronym) there are four categories of local agents (generators, transmitters, distributors, and large customers) and external agents (traders of generation and traders of demand) who are allowed to buy and sell electricity as well as related products.

The following chart shows the relationships among the various participants in the Argentine MEM:

The generation sector was organized on a competitive basis until March 2013, with independent generating companies selling their output in the Argentine MEM spot market, through private contracts to purchasers in the Argentine MEM contract market or to CAMMESA, which is the entity in charge of the operation of the Argentine MEM, through special transactions like contracts under Resolutions SE 220/2007 and 724/2008.

On March 26, 2013 the Secretariat for Energy published Resolution 95/2013 that set out a regulated remuneration scheme for power generation activity beginning retroactively from February 2013. The main features of the Resolution are as follows:

— It applies to generators, co-generators and self-generators except for power plants entered into operation after 2005, nuclear generation, cross-border hydro generation.

— CAMMESA, the market operator, will be the single buyer/seller for the fuel needed for plant operations. This implies that market agents will not be allowed to trade commodities.

— Free bilateral trading is suspended: large customers will have to buy electricity directly from CAMMESA (no change of supply for residential customers, they will still be served by distribution companies).

— Generators are to receive a regulated remuneration, which should cover fixed and variable costs and include an additional remuneration.

53

The transmission sector operates under monopoly conditions and is comprised of several companies to whom the Argentine government grants concessions. One concessionaire operates and maintains the highest voltage facilities and eight concessionaires operate and maintain high and medium voltage facilities, to which generation plants, distribution systems and large customers are connected. The international interconnected transmission systems also require concessions granted by the Argentine Secretariat of Energy. Transmission companies are authorized to charge different tolls for their services.

Distribution is regarded as a public service operating under monopoly conditions and is comprised of companies that have been granted concessions by the Argentine government. Distribution companies have the obligation to make electricity available to end customers within a specific concession area, regardless of whether the customer has a contract with the distributor or directly with a generator. Accordingly, these companies have regulated tariffs and are subject to quality service specifications. Distribution companies may obtain electricity on the Argentine MEM’s spot market, at a price called “seasonal price,” which is defined by the Argentine Secretariat of Energy as the cap for the costs of electricity bought by distributors that can be passed through to regulated customers.

There are two electricity distribution areas subject to federal concessions. The concessionaires are Edesur (one of our subsidiaries) and Edenor (which is not a related company), both of which are located in the greater Buenos Aires area. The local distribution areas are subject to concessions granted by the provincial or municipal authorities. However, all distribution companies acting on the Argentine MEM must operate under its rules.

Regulated customers are supplied by distributors at regulated tariffs.

“Large Customers” are classified into three categories: major large customers, minor large customers and private large customers. Each of these categories of customers has different requirements with respect to purchases of their energy demand. For example, major large customers are required to purchase 50% of their demand through supply contracts and the remainder in the spot market, while minor large customers and private large customers are required to purchase all of their demand through supply contracts. Large customers participate in CAMMESA by appointing two acting and two alternate directors through the Argentine Association of Electric Power for Large Customers.

There is one interconnected system, the Argentine Interconnection System (“Argentine SADI”), and smaller systems that provide electricity to specific areas. According to the Argentine National Institute of Statistics and Census (“INDEC” in its Spanish acronym), 99.2% of the energy required by the country is supplied by the Argentine SADI interconnected system and only 0.8% is supplied by isolated systems.

Principal Regulatory Authorities

The Argentine Ministry of Federal Planning, Public Investment and Services, through the Argentine Secretariat of Energy, is primarily responsible for studying and analyzing the behavior of energy markets, preparing the strategic planning with respect to electricity, hydrocarbons and other fuels, promoting policies to increase competition and improve efficiency in the assignment of resources, leading actions for applying the sector policy, orienting new operators to the general interest, respecting the rational exploitation of the resources and the preservation of the environment.

The Electricity National Regulatory Agency (“ENRE” in its Spanish acronym) carries out the measures necessary for meeting national policy objectives with respect to the generation, transmission and distribution of electricity. Its principal objectives are to protect the rights of customers, promote competitiveness in production, encourage investments that assure long-term supply; promote free access, non-discrimination and the generalized use of the transmission and distribution services; regulate transmission and distribution services to ensure fair and reasonable tariffs, and encourage private investment in production, transmission, and distribution, ensuring the competitiveness of the markets where possible. ENRE directly controls the management of Edenor and Edesur as

54

distribution companies operating under a national concession. In the case of Edesur, on July 12, 2012, ENRE temporarily appointed an overseer for 45 business days, a term that was extended for successive periods of the same duration, in order to monitor and control all acts of management of the Company. ENRE resolution 243/13 increased the term from 45 to 90 business days and it may be extended further. The Vice President of ENRE was initially appointed to oversee Edesur. However, pursuant to ENRE Resolution 31/2014 passed January 30, 2014, the President of ENRE will oversee Edesur for 90 business days, which may be extended further.

The principal functions of the Administrative Company for the Wholesale Electricity Market (“CAMMESA”) are the coordination of dispatch operations, the establishment of wholesale prices and the administration of economic transactions made through the SIN. It is also responsible for executing the economic dispatch through economic considerations and rationality in the administration of energy resources, coordinating the centralized operation of the SIN to guarantee its security and quality, and managing the Argentine MEM, in order to ensure transparency through the participation of all the players involved and with respect to the respective regulations.

The principal functions of the Argentine Federal Electricity Council are the following: (i) managing specific funds for the electricity sector and (ii) advising the national executive authority and the provincial governments with respect to the electricity industry, the priorities in performing studies and works, concessions and authorizations, and prices and tariffs in the electricity sector. It also provides advice regarding modifications resulting from legislation referring to the electricity industry.

The Federal Environmental Council is an institutional branch of the federal government empowered to address environmental problems and solutions in Argentina. It has legal authority to coordinate the development of environmental policy among member states. The member states adopt regulations or rules that are issued by the Assembly, which are issued as resolutions.

The Ministry of Environment and Sustainable Development, a member of the Federal Environment Council, assists the Chief of Cabinet of Ministers in the implementation of environmental measures and articulates its insertion in the ministries and other areas of the national public administration. It seeks to foster rational exploitation and sovereignty over Argentina’s natural resources with consideration to fairness and social inclusion. The Secretariat is involved in environmental planning and preservation, planning and implementation of national environmental management in the implementation of sustainable development, rational use of non-renewable resources and the diagnosis of environmental issues in coordination with different areas of the government.

The Electricity Law

General

The Argentine electricity industry was originally developed by private companies. As a result of service problems, the government began to intervene in the sector in the 1950s and initiated a nationalization process. Law 15,336/60 was passed to organize the sector and establish the federal legal framework for the start of major transmission and generation projects. Many state companies were created within this framework in order to carry out various hydroelectric and nuclear projects.

As a result of the electricity shortage in 1989, the following laws were passed starting in 1990: Law 23,696 (“State Reform”), Law 23,697 (“Economic Emergency”) and Law 24,065 (“Electricity Framework”).

The objective of the new legislations was essentially to replace the vertically-integrated system based on a centrally-planned state monopoly with a competitive system based on the market and indicative planning.

Regulatory Developments: The Industry After the Public Emergency Law

Law 25,561, the Public Emergency Law, was enacted in 2002 to manage the economic crisis that began that year. It forced the renegotiation of public service contracts (such as electricity transmission and distribution concession contracts) and imposed the conversion of U.S. dollar denominated obligations into Argentine pesos at a pegged rate of Ar$ 1.00 per US$ 1.00. The mandatory conversion of transmission and distribution tariffs from

55

U.S. dollars to Argentine pesos at this pegged rate (compared to the market exchange rate at that time of approximately Ar$ 3.00 per US$ 1.00) and the regulatory measures that cap and reduce the spot and seasonal prices hindered the pass-through of generation variable costs in the tariffs to end customers.

The Public Emergency Law also empowered the Argentine government to implement additional monetary, financial and foreign exchange measures to overcome the economic crisis in the medium term. These measures have been periodically extended. Law 26,729, which was enacted in December 2011, extended the measures until December 31, 2013 and Law 26,896, enacted in October 2013 further extended the measures until December 31, 2015.

The Argentine Secretariat of Energy introduced several regulatory measures aimed at correcting the effects of the devaluation into the Argentine MEM’s costs and prices and to reduce the price paid by the end customers.

Resolution SE 240/2003 changed the method for calculating spot prices by decoupling such prices from the marginal cost of operation. Prior to this resolution, spot prices in the Argentine MEM were typically fixed by units operating with natural gas during the warm season (from September through April) and units operating with liquid fuel/diesel in the winter (May through August). Due to restrictions on natural gas supply, winter prices were higher and affected by the price of imported fuels priced in U.S. dollars. Resolution SE 240/2003 sought to avoid price indexation pegged to the U.S. dollar and, although generation dispatch is still based on actual fuels used, the calculation of the spot price under the resolution is defined as if all dispatched generation units did not have the existing restrictions on natural gas supply. In addition, water value is not considered if its opportunity cost is higher than the cost of generating with natural gas. The resolution also set a cap on the spot price at Ar$ 120/MWh, which was valid until the adoption of Resolution 95/2013. The real variable costs of thermal units burning liquid fuels were paid by CAMMESA through the Transitory Additional Dispatch Cost (Sobrecosto transitorio de despacho, or “STD”) plus a margin of Ar$ 2.5/MWh, according to the Resolutions SE 6,866/2009 and 6,169/2010, that came into effect in May 2010.

The government has avoided the increase in electricity tariffs to end customers and seasonal prices have been maintained substantially fixed in Argentine pesos. In contrast, gas producers have received price revisions by the authority and thereby were able to recover part of the value that they lost as a result of the 2002 devaluation.

Under this system, CAMMESA sells energy to distributors who pay seasonal prices and buys energy from generators at spot prices that recognize rising gas prices at a contractual price defined by the instructions of the Argentine Secretariat of Energy. To overcome this imbalance, the Argentine Secretariat of Energy — through Resolution SE 406/2003 — only allows payments to generators for amounts collected from the purchasers in the spot market. This resolution set a priority of payment for different services, such as capacity payment, fuel cost and energy sales margin, among others. As a result, CAMMESA accumulates debt with generators while the system gives a distorted price incentive to the market that encourages electricity consumption but discourages investments to satisfy the growth in electricity demand, including investments in transmission capacity. Additionally, electricity generators experience a reduction of estimated income from contract prices because of the reduction of the spot price.

The Argentine government has gradually reversed its decision to freeze distribution tariffs. During 2011, various resolutions authorizing the elimination of electricity and natural gas subsidies were issued. However, the subsidy elimination has been applied to only 5% of the demand. For further details, see “— Sales to Distribution Companies and Certain Regulated Customers” below.

In order to enhance the energy supply, the Argentine Secretariat of Energy created different schemes to sell “more reliable energy.” Resolution 1,281/2006 created the Energy Plus Service Program, which was designed to increase generation capacity in order to meet growth in electricity demand over the “Base Demand,” which was the demand for electricity in 2005.

Resolutions SE 220/2007 and 724/2008 gave thermal generators the opportunity to reduce some of the adverse effects of Resolution SE 406/2003 by entering into MEM Supply Commitment Contracts, (“CCAM” in its Spanish acronym). Under these resolutions, a thermal generator can perform maintenance or repowering investments to improve the availability of its units and add additional capacity to the system. After authorization, the thermal

56

generator can then sign a CCAM at prices that would permit the recovery of such capital expenditures. Additionally, energy sales through a CCAM receive payment priority compared with spot energy sales under Resolution 406/2003). Generators with a CCAM can supply energy to CAMMESA for up to 36 months, renewable only for an additional period of six months.

During 2009, Resolution SE 762/2009 created the National Hydroelectric Program to promote the construction of new hydro plants. The program enables authorized generators to enter into energy supply contracts with CAMMESA for up to 15 years at prices that would allow for the recoupment of their investment.

The Argentine government has adopted several other measures to encourage new investments, including the following: auctions to expand the capacity of natural gas transportation and electricity transmission; the implementation of certain projects for the construction of power plants; the creation of fiduciary funds to finance these expansions; and the awarding of contracts with renewable energy, called the “GENREN program.” For more details, refer to “— Environmental Regulation” below. In addition, Law 26,095/2006 created specific charges that must be paid by end customers, which are used to finance new electricity and gas infrastructure projects. The Argentine government has also enacted regulations to encourage the rational and efficient use of electricity.

Since the implementation of Law 24,065 (“Electricity Framework”), the generation sector has sold the electricity it generates on the wholesale spot market and the private contract market. However, a series of resolutions have been published in recent years that have permitted the Argentine government and generators to sign contracts for the incorporation of new generation and/or maintenance of existing plants to guarantee the availability of the units, all in accordance with Resolutions 146/02, 220/07, 724/08 and 200/09.

On August 24, 2012, the Argentine government informed electricity sector companies that it would reform the Argentine MEM and end the marginalist system of the 1990s. To implement these changes, a Strategic Planning and Coordination Commission of the National Hydrocarbons Investment Plan was created. The principal change in the generation sector is the evolution of the “liberalized marginalist” model into a “Cost Plus” model in accordance with the following “Declared Principles”: (i) any income shall be applied to each company based on the sum of its equity and debt, less redundant assets, (ii) a “Reasonable Profit” would be recognized, and (iii) efficient operating costs would be recognized.

With this new regulatory model, the Argentine government will have more information and control over (i) the profitability of companies, (ii) the quality of service, and (iii) the supply of fuels through CAMMESA, which will be the sole supplier of fuels (through imports and a contract with YPF S.A., an Argentine company engaged in the exploration, distribution and sale of petroleum and its derivatives).

As mentioned above, Resolution 95/2013 attempted to implement the majority of the reforms announced in 2012 by moving from a marginalist system to a regulated system, in which an electricity generation company’s income is driven by regulated streams of revenues. Based on the new regulation, generators’ remuneration is now made up of the following items, which vary depending on the method of generation:

— Fixed costs: capacity remuneration subject to the achievement of a target availability.

— Variable costs: variable remuneration for operation and maintenance costs only, given that electricity generators do not incur fuel cost, which is managed by CAMMESA.

— Additional remuneration: part is paid in cash to the electricity generators, and the remainder is accumulated in a fund that will be used to finance investments in new generation facilities.

FONINVEMEM

Resolution SE 712/2004 created FONINVEMEM, a fund whose purpose is to increase electricity capacity/generation within the Argentine MEM. Pursuant to Resolution SE 406/2003, the Argentine Secretariat of Energy decided to pay generators for the spot prices up to the amount available in a stabilization fund, after collecting the funds from the purchasers in the spot market at seasonal prices, which were lower than spot prices for the same period. FONINVEMEM would receive the differences between spot prices and payments to sellers, according to Resolution SE 406/ 2003 from January 1, 2004 to December 31, 2006. CAMMESA was appointed to manage FONINVEMEM.

57

Pursuant to Resolution SE 1,193/2005, all private generators in the Argentine MEM were called upon to participate in the construction, operation and maintenance of the electricity generation plants to be built with the funds from FONINVEMEM, consisting of two combined -cycle generation plants of approximately 825 MW each.

Due to the insufficient resources to construct the plants, Resolution SE 564/2007 required all of the Argentine MEM’s private sector generators to commit to FONINVEMEM by including the differences between spot prices and payments made pursuant to Resolution SE 406/2003 for an additional period ending December 31, 2007. These plants were completed in 2010 and are powered by natural gas or alternative fuels.

The Energy Plus Program

In September 2006, the Argentine Secretariat of Energy issued Resolution SE 1,281/2006 in an effort to respond to the continued increase in energy demand following Argentina’s economic recovery after the crisis. With this resolution the Argentine government started the Energy Plus Program. which principal objectives are to (i) create incentives to construct electricity generation plants and (ii) ensure that energy available in the market is used primarily to service residential customers and industrial and commercial customers with an energy demand is at or below 300 kW as well as those who do not have access to other viable energy alternatives.

The resolution also established the price large customers are required to pay for excess demand that are not covered by a contract under the Energy Plus Program, which is equal to the marginal cost of operations. This marginal cost is equal to the generation cost of the last generation unit dispatched to supply the incremental demand for electricity at any given time.

Agreement to Manage and Operate Projects

On November 25, 2010, the Argentine Secretariat of Energy signed an agreement with several generation companies, including Enersis’ subsidiaries, in order to: (i) increase thermoelectric unit availability, (ii) increase energy and capacity prices and (iii) develop new generation units through the contribution of outstanding debts of CAMMESA owed to the generation companies. This agreement seeks to accomplish the following: (i) continue the reform of the Argentine MEM; (ii) enable the incorporation of new generation to meet the increased demand for energy in the Argentine MEM (pursuant to this agreement, Endesa Chile’s subsidiaries, together with the SADESA Group and Duke, formed a company to develop the combined-cycle project with a capacity of approximately 800 MW at the Vuelta de Obligado thermal plant); (iii) determine a mechanism to pay the generators’ sales settlements with maturity dates to be determined (“LVFVDs” in the Spanish acronym), which represent generators’ claims for the period from January 1, 2008 to December 31, 2011; and (iv) determine the method for recognizing the total remuneration due to generators. On October 24, 2012, the contract for the turnkey supply and construction of the Vuelta de Obligado plant was entered into among General Electric Internacional Inc. and General Electric Internacional Inc., Argentina branch, and the Argentine Secretariat of Energy. The project also includes the expansion of the Río Coronda 500 kV transformer station which connects to the Argentine Interconnected System (“Argentine NIS”), the construction of four new fuel tanks, the construction of a gas pipeline to supply natural gas from the national network, and maintenance of the plant during the single and combined-cycle operation periods for a period of ten years.

Limits and Restrictions

To preserve competition in the electricity market, participants in the electricity sector are subject to vertical and horizontal restrictions, depending on the market segment in which they operate.

58

Vertical Integration Restrictions

The vertical integration restrictions apply to companies that intend to participate simultaneously in different sub-sectors of the electricity market. These vertical integration restrictions were imposed by Law 24,065, and apply differently to each sub-sector as described below:

Generators

— Neither a generation company nor any of its controlled or controlling companies can be an owner, majority shareholder or the controlling entity of a transmission company; and

— Since a distribution company cannot own generation units, a holder of generation units cannot own distribution concessions. However, the shareholders of the electricity generator may own an entity that holds distribution units, either by themselves or through any other entity created with the purpose of owning or controlling distribution units.

Transmitters

— Neither a transmission company nor any of its controlled or controlling companies can be an owner, majority shareholder or the controlling company of a generation company;

— Neither a transmission company nor any of its controlled or controlling companies can be an owner, majority shareholder or the controlling company of a distribution company; and

— Transmission companies cannot buy or sell electric energy.

Distributors

— Neither a distribution company nor any of its controlled or controlling companies can be an owner, majority shareholder or the controlling company of a transmission company; and

— A distribution company cannot own generation units. However, the shareholders of an electricity distributor may own generation units either by themselves or through any other entity created with the purpose of owning or controlling generation units.

Horizontal Integration Restrictions

In addition to the vertical integration restrictions described above, distribution and transmission companies are subject to the following horizontal integration restrictions:

Transmitters

— Two or more transmission companies can merge or be part of a same economic group only if they obtain an express approval from the ENRE. Such approval is also necessary when a transmission company intends to acquire shares of another transmission company. Pursuant to the concession agreements that govern the services rendered by private companies operating transmission lines between 132 kW and 140 kW, the service is rendered by the concessionaire on an exclusive basis in certain areas indicated in the concession agreement. Pursuant to the concession agreements that govern the services rendered by the private companies operating the high-tension transmission services of at least 220 kW, such companies must render the service on an exclusive basis and are entitled to render the service throughout the entire country, without territorial limitations.

Distributors

— Two or more distribution companies can merge or be part of a same economic group only if they obtain an express approval from the ENRE. Such approval is necessary when a distribution company intends to acquire shares of another transmission or distribution company; and

— Pursuant to the concession agreements that govern the services rendered by private companies operating distribution networks, the service is rendered by the concessionaire on an exclusive basis in certain areas indicated in the concession agreement.

59

Regulation of Generation Companies

Concessions

Hydroelectric generators with a normal generation capacity exceeding 500kW must obtain a concession to use public water sources. Concessions may be granted for a fixed or an indefinite term.

Such concession-holders have the right to: (i) take control of the private properties within the concession area (subject to general laws and local regulations) that are necessary to create reservoirs as well as underground or above ground supply-line and release channels, (ii) flood lands that are necessary to raise water levels, and (iii) request the authorities to make use of the powers conferred in article 10 of Law 15,336 in cases where it is absolutely necessary to appropriate the property of a third-party that was not part of the concession and the concession-holder has failed to reach an agreement with such third-party.

Dispatch and Pricing

CAMMESA controls the coordination of dispatch operations and the administration of the Argentine MEM’s economic transactions. All generators that are Argentine MEM agents must be connected to the Argentine NIS and are obliged to comply with the dispatch order to generate and deliver energy to the Argentine NIS.

The emergency regulations enacted after the Argentine crisis in 2001 had a significant impact on energy prices. Among the measures implemented pursuant to the emergency regulations were the specification of prices in the Argentine MEM and the requirement that all spot prices be calculated based on the price of natural gas, even in circumstances where alternative fuel such as diesel is purchased to meet demand due to the lack of supply of natural gas.

The introduction of the Resolution 95/2013, (see “Item 4. Information on the Company — B. Business Overview — Electricity Industry Regulatory Framework.— Argentina — Industry Overview” and — Regulatory Developments: the industry after the Public Emergency Law”), suppressed the market for energy transactions among generators, large customers and traders. This resolution defines a regulated remuneration scheme for each type of technology used in power generation.

Seasonal Prices

The emergency regulations also made significant changes to the seasonal prices charged to distributors in the Argentine MEM, including the implementation of a cap (which varies depending on the category of customer) on the cost of electricity charged by CAMMESA to distributors at a price significantly below the spot price charged by generators. These prices have not changed since November 2008.

Pursuant to Resolution SE 1,301/2011, which announced the elimination of subsidies, the Argentine MEM’s seasonal reference prices for non-subsidized electricity were published in November 2011. This resolution also provided for the (i) discontinuation of the practice of charging subsidized prices for non-residential customers based on their payment capacity and economic activity; (ii) creation of a Register of Exceptions including a list of customers exempt from the subsidy elimination, provided that they can certify their inability to bear the seasonal reference prices for non-subsidized electricity; and (iii) the identification of the National State Subsidy, requiring CAMMESA to explicitly identify the subsidies that it provides to each level of demand. Under the resolution, distributors are also required to notify residential customers that will be affected by the elimination of subsidies.

Stabilization Fund

The stabilization fund, managed by CAMMESA, was created to absorb the difference between purchases by distributors at seasonal prices and payments to generators for energy sales at the spot price. When the spot price is

60

lower than the seasonal price, the stabilization fund increases and when the spot price is higher than the seasonal price, the stabilization fund decreases. The outstanding balance of this fund at any given time reflects the accumulation of differences between the seasonal price and the hourly energy price in the spot market. The stabilization fund is required to maintain a minimum balance to cover payments to generators if prices in the spot market during the quarter exceed the seasonal price.

The stabilization fund has been adversely affected as a result of the modifications to the spot price and the seasonal price made by the emergency regulations, pursuant to which seasonal prices were set below spot prices resulting in large deficits in the stabilization fund. These deficits have been financed by the Argentine government through loans to CAMMESA and with FONINVEMEM funds, but these continue to be insufficient to cover the differences between the spot price and the seasonal price.

Sales to Distribution Companies and Regulated Customers

In order to stabilize the prices for distribution, the market uses the seasonal price as the energy price to be paid by distributors for their purchases of electricity traded in the spot market. This is a fixed price determined every six months by the Argentine Secretariat of Energy based on CAMMESA’s recommended seasonal price level for the next period according to its estimated spot price. CAMMESA estimates this price by evaluating its expected supply, demand and available capacity, as well as other factors. The seasonal price is maintained for at least 90 days. Since 2002, the Argentine Secretariat of Energy has been approving seasonal prices lower than those recommended by CAMMESA.

At the end of 2011, the Argentine government issued various resolutions in order to being a process of reducing subsidies to gas, electricity and water tariffs. These resolutions provide for, among other things, the (i) approval of the seasonal programming of regulated tariffs for the period from November 2011 to April 2012, (ii) establishment of a new non-subsidized seasonal price, which increased from Ar$ 243/MWh to Ar$ 320/MWh, (iii) listing of economic activities that are subject to the reduction in subsidies, (iv) creation of a register recording the exceptions to the reduction in subsidies, (v) establishment of the effective date for the new tariffs as of January 1, 2012, and (vi) provisions for voluntarily renouncing gas, electricity and water subsidies through an online system.

Specific Regulatory Charges for Electricity Companies

The authority to impose regulatory charges in Argentina is administratively divided among the federal, provincial and the municipal governments. Therefore, the tax charge varies according to where the customer lives.

Incentives and Penalties

The Energy Plus Service Program, part of the Energy Plus Program, is provided by generators that have (i) installed new generation capacity or (ii) connected previously unconnected existing generation capacity to the Argentine NIS. All “Large Customers” that had a higher demand than their Base Demand as of November 1, 2006 were required to enter into a contract with the Energy Plus Service Program to cover their excess demand. Large Customers that did not enter into such contracts are required to pay additional amounts for any consumption that exceeds the Base Demand. The prices under the contracts with Energy Plus Service Program must be approved by the relevant authorities. Unregulated customers that were unable to secure an Energy Plus Service contract are able to request CAMMESA to conduct an auction in order to satisfy their demand.

Regulation in Transmission

The transmission sector is regulated based on the principles established in Law 24,065 and the terms of the concession granted to Transener S.A. (not an affiliated company) under Decree 2,743/92. Due to technological reasons, the transmission sector is heavily affected by economies of scale that limit competition. As a result, the transmission sector operates under monopoly conditions and is subject to considerable regulation.

61

Natural Gas Market

Since the emergency economic measures of 2002, the lack of investment in natural gas production forced the system to burn increasing amounts of liquid fuels.

The Argentine government has adopted different measures to improve the natural gas supply. Since 2004, local gas producers and the Argentine government have entered into various agreements to guarantee gas supply. The last agreement was signed in July 2009 and resulted in a 30% increase in the natural gas price for power generators until December 2009. In addition, Argentina and Bolivia entered into a 20-year agreement in 2006 that guarantees Argentina’s right to receive up to 28 million cubic meters of natural gas on a daily basis.

The Electronic Gas Market (“MEG” in its Spanish acronym) was also recently created to increase the transparency of physical and commercial operations in the spot market.

Electricity Exports and Imports

In order to give priority to the internal market supply, the Argentine Secretariat of Energy adopted additional measures that restricted electricity and gas exports. Resolution SE 949/2004 established measures that allowed agents to export and import electricity under very restricted conditions. These measures prevented generators from satisfying their export commitments.

The Argentine Secretariat of Energy published Disposition 27/2004, together with related resolutions and decrees, which created a plan to ration natural gas exports and the use of transport capacity. These measures restricted gas delivery to Chile and Brazil. These restrictions are expected to continue as Resolution Enargas 1,410, which was issued in October 2010, reinforced such restrictions on gas distribution to certain customers. Specifically, the resolution mandated that the distribution of gas be made in the following order, from highest to lowest priority: (i) residential and commercial customers, (ii) the compressed natural gas market, (iii) large customers, (iv) thermal generator units, and (v) exports.

Environmental Regulation

Electricity facilities are subject to federal and local environmental laws and regulations, including Law 24,051, the “Hazardous Waste Law,” and its ancillary regulations.

Certain reporting and monitoring obligations and emission standards are imposed on the electricity sector. Failure to satisfy these requirements entitles the Argentine government to impose penalties such as suspension of operations which, in case of public services, could result in the cancellation of concessions.

Law 26,190, enacted in 2007, defined the use of nonconventional renewable energy for electricity production as a national interest and set as a target 8% market share for generation from renewable energies within a term of 10 years. During 2009, the government took actions to reach this objective by publishing Resolution 712/ 2009 and launching an international auction to promote the installation of up to 1,000 MW of renewable energy capacity. This resolution created a mechanism to sell renewable energy through fifteen-year contracts with CAMMESA under special price conditions through ENARSA. In June 2010, the “GENREN program” awarded a total of 895 MW, distributed in the following manner: 754 MW of wind power, 110 MW of bio-fuels, 11 MW of mini-hydro, and 20 MW of solar units. The prices awarded vary from US$ 150/MWh (for mini-hydro units) to US$ 598/MWh (for solar units). In 2011, the Argentine Secretariat of Energy issued Resolution 108/11 which allowed CAMMESA to sign contracts directly with generators of renewable energy on conditions similar to Resolution 712/ 2009.

62

Brazil

Industry Overview

Industry Structure

Brazil’s electricity industry is organized into one large interconnected electricity system, the Brazilian NIS, which comprises most of the regions of Brazil, and several other small isolated systems.

The following chart shows the relationships among the various participants in the Brazilian NIS:

Generation, transmission, distribution and trading are legally separated activities in Brazil.

The generation sector is organized on a competitive basis, with independent generators selling their output through private contracts with distributors, traders or unregulated customers. Differences are sold on the short-term market or spot market at the Settlement Price for the Differences (“PLD” in its Portuguese acronym) and there is also a special mechanism between generators that seeks to re-allocate hydrological risk by offsetting differences between generators’ assured energy and that which is actually produced, called the Electricity Reallocation Mechanism (“MRE” in its Portuguese acronym).

The Brazilian Constitution was amended in 1995 to authorize foreign investment in power generation. Before, all generation concessions were held either by Brazilian individuals or entities controlled by Brazilian individuals or the Brazilian government.

The transmission sector operates under monopoly conditions. Revenues from the transmission companies are fixed by the Brazilian government. This applies to all electricity companies with transmission operations in Brazil. The transmission revenue fee is fixed and, therefore, transmission revenues do not depend on the amount of electricity transmitted.

Distribution is a public service that works under monopoly conditions and is provided by companies who have also been granted concessions. Distributors in the Brazilian NIS are not permitted to: (i) develop activities related to the generation or transmission of electricity; (ii) sell electricity to unregulated customers, except for those in their concession area and under the same conditions and tariffs maintained with respect to captive customers in the Regulated Market; (iii) hold, directly or indirectly, any interest in any other company, corporation or partnership; or (iv) develop activities that are unrelated to their respective concessions, except for those permitted by law or in the relevant concession agreement. Similarly, generators are not allowed to hold equity interests in excess of 10.0% in distributors.

The selling of electricity is governed by Law 10,848/ 2004 and Decrees 5,163/2004 and 5,177/2004 of the Electricity Trading Chamber or Clearing House (“CCEE” in its Portuguese acronym), and ANEEL Resolution 109/2004, which introduced the Electricity Trading Convention. This is a convention in which the terms, rules and procedures of the trading in the CCEE are defined. Two possible situations were introduced by these regulations for the execution of energy sales agreements: (i) the regulated contracting environment, in which energy generation and distribution agents participate, and (ii) the free market contracting environment, in which energy generation, trading, importing and exporting agents, and unregulated customers, participate.

63

Commercial relations between the agents participating in the CCEE are governed mainly by energy sales agreements. All the agreements between the agents in the Brazilian NIS should be registered with the CCEE. The register includes the amounts of energy and the terms. The energy prices agreed are not registered with the CCEE, but instead are specified by the parties involved in the agreements.

The CCEE books the differences between energy produced or consumed and the contracted amount. The positive or negative differences are settled in the short-term market and priced at the PLD, determined weekly for each level of load and for each sub-market, based on the system’s marginal operating cost, within a minimum and maximum price range.

The unregulated market includes the sale of electricity between generation concessionaires, independent producers, self-producers, sellers of electricity, importers of electricity, unregulated, and special customers. It also includes contracts in place between generators and distributors until their expiration, at which point new contracts may be entered into under the terms of the new regulatory framework. According to the specifications set forth in Law Number 9,427/96, unregulated customers in Brazil are those who currently have: (i) a demand of at least 3,000 kW , generated using any method and purchase the energy supply directly with generators or traders, but not directly from distributors or (ii) a demand in the range of 500 to 3,000 kW generated using ERNC and purchase their energy supply directly with alternative generators or traders, with the option to purchase energy from distributors as well.

The Brazilian NIS is coordinated by the Brazilian Electricity System Operator (“ONS” in its Portuguese acronym) and is divided into four electric sub-systems: South-East/Center-West, South, North-East, and North. In addition to the Brazilian NIS, there are also the isolated systems that are not part of the Brazilian NIS. These isolated systems are generally located in the Northern and North-Eastern regions of Brazil, and rely solely on electricity generated from coal-fired and oil-fueled thermal plants. According to the ONS, more than 98% of the energy required by Brazil is supplied by the Brazilian NIS and only 1.7% is supplied by isolated systems.

Principal Regulatory Authorities

The Brazilian Ministry of Mines and Energy (“Brazilian MME”) regulates the electricity industry and its primary role is to establish the policies, guidelines and regulations for the sector.

The Brazilian National Energy Policy Council (“CNPE” in its Portuguese acronym) is in charge of developing the national electricity policy. Among its roles are to guide the President in the formulation of energy policies and guidelines, promote the stable and secure supply of the country’s energy resources, ensure the energy supply to the most distant places of the country, establish directives for specific programs (such as the use of natural gas, alcohol, biomass, coal and thermonuclear energy), and establish directives for the import and export of energy.

The Energy Research Company (“EPE” in its Portuguese acronym) is an entity under the Brazilian MME. Its purpose is to provide services in the area of studies and research to support the energy sector planning.

ANEEL, the Brazilian National Agency for Electric Energy, is the entity that implements the regulatory policies, and its main responsibilities include, among others: (i) supervision of the concessions for electricity sale, generation, transmission and distribution; (ii) enactment of regulations for the electricity sector; (iii) implementation and regulation of the exploitation of electricity resources, including the use of hydroelectricity; (iv) promotion of a bidding process for new concessions; (v) resolution of administrative disputes between electricity sector agents; and (vi) setting the criteria and methodology for determining distribution and transmission tariffs, as well as the approval of all the electricity tariffs, ensuring that customers pay a fair price for energy supplied and, at the same time, preserving the economic-financial balance of the distribution companies, so that they can provide the service to agreed quality and continuity.

The Energy Sector Monitoring Committee (“CMSE” in its Portuguese acronym) is an entity created under the scope of the Brazilian MME and is under the Brazilian MME’s direct coordination. CMSE was established to

64

evaluate the continuity and security of the energy supply across the country. CMSE has the mandate to: (i) follow the development of the energy generation, transmission, distribution, trading, import and export activities; (ii) assess the supply and customer service as well as the security of the system; (iii) identify difficulties and obstacles that affect the supply security and regularity; and (iv) recommend proposals for preventive actions that can help preserve the supply security and service.

CCEE is a non-profit company subject to authorization, inspection and regulation by ANEEL and its main purpose is to carry out the wholesale transactions and trading of electric power within the Brazilian NIS by registering the agreements resulting from market adjustments and whose agents are gathered into four categories: generation, distribution, trading and customers.

The ONS is comprised of generation, transmission and distribution companies, and independent customers, and is responsible for the coordination and control of the generation and transmission operations of the Brazilian NIS, subject to the ANEEL’s regulation and supervision.

The Brazilian Institute of Environment and Renewable Natural Resources (“IBAMA” in its Portuguese acronym) is an executive body of the National Environmental Policy, which takes the form of a federal autarchy. It is part of the Ministry of Environment, with responsibility for the implementation of the National Environmental Policy and the preservation and conservation of natural heritage, exercising control and supervision over the use of natural resources (water, flora, wildlife, soil, etc.).

IBAMA is also responsible for the environmental impact studies and the granting of environmental licenses for projects nationwide. The environmental license is a procedure by which the competent environmental agency at the federal, state or municipal levels, allows the location installation, expansion, and operation of businesses and activities that require natural resources. It also can consider the effective or potential pollution, in whatever form, and any cause of environmental degradation. This license seeks to ensure that preventive and control measures taken in the draft are compatible with sustainable development.

The Electricity Law

General

Before 1993, power tariffs were the same throughout Brazil. The dealers were entitled to a guaranteed return because the regulatory regime provided for the cost of service. Concession areas that obtained a higher return than the one guaranteed deposited the surplus in a fund from which the distributors with less than the guaranteed return withdrew the difference.

In 1993, the Brazilian electric sector was reformed through Law 8,631/93, which abolished the equalization of electricity tariffs system.

The Concessions Law 8,987 and the Power Sector Law 9,074, both enacted in 1995, intended to promote competition and attract private capital into the electricity sector. Since then, several assets owned by the Brazilian government and/or state governments have been privatized.

The Power Sector Law also introduced the concept of independent power producers (“IPPs”) in order to open the electricity sector to private sector investment. IPPs are single agents, or agents acting in a consortium, who receive a concession, permit or authorization from the Brazilian government to produce electricity for sale for their own account.

Law 9,648/98 created the wholesale energy market, composed by the generation and distribution companies. Under this new law, the purchase and sale of electricity are freely negotiated.

The spot price is used to value the purchase and sale of electric power in the short term market. According to the law, the CCEE is responsible for setting electricity prices in the spot market. These prices are calculated on a marginal costs basis, modeling future operation conditions and setting a merit order curve with variable costs for thermal units and opportunity cost for hydroelectric plants, resulting in one price for each subsystem set for the week subsequent to the determination.

65

Pursuant to Law 10,433/02, the wholesale energy market structure came to be closely regulated and monitored by ANEEL. ANEEL is also responsible for setting wholesale energy market governance rules including measures to stimulate permanent external investment.

During 2003 and 2004, the Brazilian government established the basis for a new model for the Brazilian electricity sector through Laws 10,847 and 10,848 of March 15, 2004, and Decree 5,163 of July 30, 2004. The principal objectives of these laws and decrees were to (i) guarantee the security of the electricity supply, (ii) promote the reasonability of tariffs, and (iii) improve social integration in the Brazilian electricity sector through programs designed to provide universal access to electricity.

The new model contemplates a series of measures to be followed by the agents, such as the obligation to contract all the demand of the distributors and unregulated customers. It also defines a new methodology for calculating the physical energy guarantee for sale of generation, contracting hydroelectric and thermal generating plants in proportions that ensure the best balance between guarantee and supply cost, plus the constant monitoring of the continuity and security of supply, seeking to detect occasional imbalances between supply and demand.

In terms of the tariffs’ reasonability, the model contemplates the purchase of electricity by distributors in a regulated environment through tenders in which the principle of lowest tariff is observed. As a result, the cost of acquiring electricity to be passed on to captive customers can be reduced. The new model creates conditions for the benefits of electricity made available to customers who do not yet have this service and for guaranteeing a subsidy for low income customers.

Limits and Restrictions

Regulatory Resolution 299/2008 repeals certain sections of ANEEL Resolution 278/2000, which established the limits and conditions for the participation of electricity distributors and traders. Specifically, the section of Resolution 278/2000 on limits to generation was repealed. Subsequently, Resolution 378/2009 establishes new procedures for analyzing mergers and violations of economic regulations in the electric power sector.

Regulation of Generation Companies

Concessions

The Concessions Law provides that, upon receiving a concession, IPPs, self-producers, suppliers and customers will have access to the distribution and transmission systems owned by other concessionaires, provided that they are reimbursed for their costs as determined by ANEEL.

Companies or consortia that intend to build or operate hydroelectric generation facilities with a capacity exceeding 30 MW or transmission networks in Brazil have to resort to a public tender process. Concessions granted to the holder give the right to generate, transmit or distribute electricity, as the case may be, in a given concession area for a certain period of time.

Concessions are limited to 35 years for new generation concessions and to 30 years for new transmission or distribution concessions. Existing concessions may be renewed at the Brazilian government’s discretion for a period equal to their initial term.

In September 2012, ANEEL’s Provisional Resolution 579 established the criteria for the renewal of generation, transmission and distribution concessions that expire between 2015 and 2017. It foresees the reduction of energy tariffs and indemnities for non-depreciated investments in hydroelectric plants and transmission installations. In addition, Provisional Resolution 577 defines procedures for the temporary provision of the electricity energy service in the case of cancellation of concessions due to management problems. It also reinforces the powers of ANEEL to intervene in the case of economic-financial imbalance in order to avoid affecting the service provided.

66

On January 23, 2013, the Brazilian Congress approved Law 12,783, which renewed electricity concessions according to Provisional Resolution 579. This law requires companies to reduce the average electricity tariff by 20.2% from February 2013, and to extend generation, transmission and distribution concessions for up to 30 years, for both hydroelectric and thermal plants, which expire between 2015 and 2017.

Dispatch and Pricing (Settlement Price for the Differences (“PLD”)

The PLD is used to value the purchase and the sale of electric power in the short term market. The price-setting process of the electric power traded in the short-term market is accomplished by using the data employed by the ONS to optimize the operation of the Brazilian NIS.

The mathematical models used to compute the PLD take into account the preponderance of hydro-electric plants within the Brazilian power generation grid. The purpose is to find an optimal equilibrium solution between the current benefit obtained from the use of the water and the future benefit resulting from its storage, measured in terms of the savings from the use of fuels for thermal plants.

The PLD is an amount computed on a weekly basis for each load level based on the Marginal Operational Cost, which in turn is limited by a maximum and minimum price in effect for each period and submarket. The intervals set for the duration of each level are determined by the ONS for each month and reported to the CCEE to be included into the accounting and settlement system.

The model used to compute the PLD seeks to achieve an optimal result for the period being studied and to define both the hydroelectric and thermal power generation for each submarket by taking into account the hydrological conditions, the demand for electric power, the prices of fuel, the cost of the deficit, the entry of new projects into operation and the availability of equipment used for generation and transmission. As result of this process, the Marginal Operational Costs can be obtained for each load level and submarket.

The calculation of the price is based on the “ex-ante” dispatch that is determined based on estimated information existing prior to the actual operation of the system, taking into account the declared availability amounts regarding both the generation and the consumption envisaged for each submarket. The complete process for calculating the PLD involves the use of the computational models NEWAVE and DECOMP. These models are used to calculate the Marginal Operational Cost for each submarket on a monthly and weekly basis.

Electricity Reallocation Mechanism

The Electricity Reallocation Mechanism (“MRE”) provides financial protection against hydrological risks for hydro-generators in order to mitigate the shared hydrological risks that affect generators and assure the optimal use of the hydroelectric resources of the interconnected power system.

The mechanism guarantees that despite of the centralized dispatch all the generators that participate in the MRE will have a participation in the overall hydro generation dispatched in the proportion of its assured energy. The value of the final allocated energy to a generator can be greater or less than its assured energy depending if the overall hydro generation is greater or less than the overall hydro assured energy, respectively. This mechanism permits each generator, before buying energy in the spot market to fulfill its contracts, to purchase cheaper energy at a price that covers the incremental costs of operation and maintenance of hydroelectric plants and the payment of financial use of water compensation. The tariff used for trading energy in the MRE, the Optimum Energy Tariff, was set as R$ 10.54 per MWh for 2014.

As the overall generation is more stable than the individual production, the MRE is a very efficient mechanism to reduce the volatility of the individual production and the hydrological risk. Therefore, the energy contracts are only financial instruments in the Brazilian system and generation is totally disassociated from the energy contracts.

67

Sales Between the Agents of the Market

The current model for the electric sector states that the trading of electric power is accomplished in two market environments: the Regulated Contracting Environment (“ACR” in its Portuguese acronym) and the Free-Market Contracting Environment (“ACL” in its Portuguese acronym).

Contracting in the ACR is formalized by means of regulated, bilateral agreements, called Electric Power Trading Agreements within the Regulated Environment (“CCEAR” in its Portuguese acronym) entered into between selling agents (sellers, generators, independent producers or self-producers) and purchasing agents (distributors) who participate in electric power purchase and sale auctions.

In the ACL environment, on the other hand, the negotiation among the generating agents, trading agents, free-market customers, importers and exporters of electric power is accomplished freely, whereby the agreements for the purchase and sale of electric power are entered into through bilateral agreements.

Generation agents, regardless of whether they are public generation concessionaires, IPPs, self-producers or trading agents, are allowed to sell electric power within the two environments. This allows the overall market to remain competitive. All agreements that have been entered into in the ACR or the ACL are registered in the CCEE and they serve as a basis for the accounting posting and the settlement of the differences in the short term market.

Sales by Generation Companies to Unregulated Customers

In the unregulated contracting environment, the conditions for purchasing energy are negotiable between suppliers and their customers. As for the regulated environment, where distribution companies operate, the purchase of energy must be conducted pursuant to a bidding process coordinated by ANEEL. In 2012, the Brazilian MME’s Decree 455 mandated the creation of a prices index and a requirement to register energy contracts ex-ante. According to the internal schedule of the CCEE, the new price index is expected to be published in June 2014. It is expected that this index will be subject to internal tests over a six month period before being officially published in the market.

Sales by Distribution Companies and Regulated Customers

Pursuant to market regulations, 100% of the energy demand from distributors must be satisfied through long-term contracts. Contracts must be renewed or newly entered into prior to the expiration of current contracts.

Tenders under the current regulatory environment are as follows: (i) A-5 tenders, corresponding to tenders for energy purchases from new generation sources to be supplied five years following the tender; (ii) A-3 tenders, for the acquisition of energy from new generation sources; (iii) A- 1 tenders, for the acquisition of energy from existing generation sources; and (iv) A- 0 tenders, energy adjustment tenders, for supplementing the energy load necessary for servicing customers in the distribution concession market, with a limit of 1% of such load. Reserve tenders are also carried out for increasing the security of the system.

Various energy tenders were held during 2011, including an A-3 tender and a reserve tender completed in August and an A-5 tender in December.

In the A-3 tender process for the supply of 2014, 2,744.6 MW of new capacity was assigned and is to be generated by 51 plants. Of the total contracted, 62% was from renewable sources (hydroelectric, wind and biomass) and the remaining 38% from fossil fuels (natural gas).

The tender for reserve energy in August 2011 assigned 1,218.1 MW. These were from wind farm, thermal and biomass projects, involving a total of 41 generating plants. The average price was R$ 99.61 per MWh.

For the new A-5 tender process carried out in December 2011, 42 projects were assigned with a capacity of 1,211.5 MW at an average price of R$ 102.18 per MWh.

68

For 2012, two tenders were planned. An A-3 tender for December 12, 2012 was cancelled due to the low demand of distributors. An A-5 tender for new energy was held on December 14, 2012. Of the 574.3 MW of total installed capacity up for tender, 303.5 MW was allocated. The weighted average price was fixed in R$ 91.25 per MWh. Of the total energy allocated, 294.2 MW was allocated to two hydroelectric plants (at an average price of R$ 93.46 per MWh) and 281.9 MW was allocated to ten wind farms (at an average price of R$ 87.94 per MWh) .

In 2013, six tenders took place: (i) an energy adjustments tender in which no energy was allocated and the maximum price was fixed at R$ 163 per MWh; (ii) an A-0 tender in which no energy was allocated and the maximum price was fixed at R$ 177.22 per MWh; (iii) an A-1 tender in which only 39% of the distributors requirements was allocated at average price of R$ 177.22 per MWh; (iv) an A-3 tender with 332.5 MWh allocated to 39 wind power plants at average price of R$ 124.43 per MWh; (v) an A-5.1 tender in which 690.8 MWh was allocated (46% hydroelectric plants and 54% of biomass thermal plants) at an average price of R$ 124.97 per MWh; and (vi) an A-5.2 tender in which 1,599.5 MWh (33% of hydroelectric plants, 5% of biomass thermal plants and 62% of wind power plants) was allocated at an average price of R$ 109.93 MWh.

For 2014, an A-3 tender has been scheduled for June 6, 2014. Three energy adjustment tenders, at least one A-1 tender and one A-5 are expected to be held as well.

Sales of Capacity to Other Generation Companies

Generators can sell their energy to other generators through direct negotiation at freely-agreed prices and conditions.

Incentives and Penalties

Another change imposed on the electricity sector is the separation of the bidding process for “existing power” and “new power” projects. The Brazilian government believes that a “new power project” needs more favorable contractual conditions such as long term power purchase agreements (15 years for thermal and 30 years for hydro) and certain price levels for each technology in order to promote investment for the required expansion. On the other hand, “existing power,” which includes depreciated power plants, can sell their energy at lower prices under contracts with shorter terms.

Law 10,438/02 created certain incentive programs for the use of alternative sources in the generation of electricity, known under the name of Proinfa. It assures the purchase of the electricity generated by Eletrobras for a period of 20 years and financial support from the Brazilian National Development Bank (“BNDES” in its Portuguese acronym) a state-owned development bank. Other programs include a discount of up to 50% on the distribution or transmission tariffs and a special exception for the customers with electricity demand in the range of 500 to 3,000 kW who decide to migrate to an unregulated environment, provided that such customers purchase electricity from generating companies using non-conventional sources of electricity.

Selling agents are responsible for paying the buying agent if they are unable to satisfy their delivery obligations. ANEEL regulations set forth the fines applicable to electricity agents based on the nature and the materiality of the violation (including warnings, fines, temporary suspension of the right to participate in bids for new concessions, licenses or authorizations and forfeiture). For each violation, fines may be imposed for up to 2% of the concessionaire’s revenues arising from the sale of electricity and services provided (net of taxes) in the 12-month period immediately preceding any assessment notice.

ANEEL may also impose restrictions on the terms and conditions of agreements between related parties and, under extreme circumstances, terminate such agreements.

Decree 5,163/2004 establishes that the selling agents must assure 100% physical coverage for their energy and power contracts. This coverage must be made up of physical guarantees from its own power plants or through the purchase of energy or power contracts from third parties.

69

Among other aspects, ANEEL’s Normative Resolution 109/2004 specifies that when these limits are not met, the generation companies and traders are subject to financial penalties. The determination of penalties is predicated on a 12-month period and the revenues obtained from the levying of the penalties are reverted to tariff modality within the ACR.

If the limits on contracting and physical coverage defined in the Trading Rules are not met, the relevant generation companies and traders are notified by the Superintendent of CCEE. Pursuant to the specific Trading Procedure, CCEE’s agents are allowed to file an appeal to be evaluated by CCEE’s Board of Directors who then decides whether to collect or to cancel the financial penalty.

Generation agents may sell power through contracts signed within the ACR or the ACL. Public Service Generators and IPPs must provide a physical coverage from their own power generation for 100% of their sales contracts. Self-producers generate energy for their own exclusive use and they may sell excess power through contracts with ANEEL’s authorization. In both cases, the verification of physical coverage is accomplished on a monthly basis, predicated on generation data and on sales contracts for the last 12 months. Generation agents must pay penalties if they fail to provide physical coverage.

Regulation in Transmission

Transmission lines in Brazil are usually very long, since most hydroelectric plants are usually located away from the large centers of power consumption. Today, the country’s system is almost entirely interconnected. Only the states of Amazonas, Roraima, Acre, Amapá, Rondônia and a part of Pará are still not connected to the interconnected power system. In these states, supply is carried out by small thermal plants or hydroelectric plants located close to their respective capital cities, but the Brazilian government is gradually connecting these areas.

The interconnected power system provides for the exchange of power among the different regions when any region faces problems such as a reduction in hydroelectric power generation due to a drop in its reservoir levels. As the rainy seasons are different in the south, southeast, north and northeast of Brazil, the higher voltage transmission lines (500 kV or 750 kV) make it possible for locations with insufficient power production to be supplied by generation centers located in a more favorable location.

Any electric power market agent that produces or consumes power is entitled to use the basic network. Free-market customers also have this right, provided that they comply with certain technical and legal requirements. This is called “free access” and is guaranteed by law and by ANEEL.

The operation and management of the basic network is the responsibility of ONS, which is also responsible for managing energy dispatched from plants in optimized conditions, involving use of the interconnected power system hydroelectric reservoirs and thermal plants’ fuel.

Environmental Regulation

The Brazilian Constitution gives the federal, state and local governments power to enact laws designed to protect the environment, and to issue regulations under such laws. While the Brazilian government is empowered to enact environmental regulations, the state governments are usually more stringent. Most of the environmental regulations in Brazil are at the state and local level rather than at the federal level.

Hydroelectric facilities are required to obtain concessions for water rights and environmental approvals. Thermal electricity generation, transmission and distribution companies are required to obtain environmental approvals from environmental regulatory authorities.

70

Colombia

Industry Overview

Industry Structure

The Wholesale Electricity Market in Colombia (“Colombian MEM” in its Spanish acronym) is based on a competitive market model and operates under open access principles. The Colombian government participates in this market through an institutional structure that is responsible for setting forth policies and regulations, as well as for exercising supervision and control powers in respect of market participants. The Colombian MEM relies for its effective operation on a central agency known as the Colombian Administrator of the Commercial Exchange System (“ASIC” in its Spanish acronym).

The Colombian National Interconnected Electric System (“Colombian NIS”) includes generation plants, the interconnection grid, regional transmission lines, distribution lines and end-customers.

There are two categories of agents, generators and traders, who are allowed to buy and sell electricity as well as related products in the Colombian MEM. All of the electricity supply offered by generation companies connected to the Colombian NIS and all of the electricity requirements of end-customers, whose demand is represented by trading companies, are traded on the Colombian MEM.

The following chart shows the relationships among the various participants in the Colombian MEM:

Generation activity consists of the production of electricity through hydroelectric, thermoelectric and all other generation plants connected to the Colombian NIS. The generation sector is organized on a competitive basis, with independent generators selling their output on the spot market or through private contracts with large customers, other generators and traders. Generation companies are required to participate in the Colombian MEM with all of their generation plants or units connected to the Colombian NIS with generating capacities equivalent to or exceeding 20 MW. Generation companies declare their energy availability and the price at which they are willing to sell it. This electricity is centrally dispatched by the National Dispatch Center (“CND” in its Spanish acronym).

Trading consists of intermediation between the market participants that provide electricity generation, transmission and distribution services and the customers of these services, whether or not that activity is carried out together with other electricity-sector activities.

71

Electricity transactions in the Colombian MEM are carried out under the three following modes:

1. Energy spot market: short term daily market

2. Bilateral contracts: long term market; and

3. “Firm Energy.”

“Firm Energy” refers to the maximum electric energy that a generation plant is able to deliver on a continual basis during a year, in extreme conditions of hydro inflows. The generator who acquires a Firm Energy Commitment (“OEF” in its Spanish acronym) will receive a fixed remuneration during the commitment period, which is explained in the “Incentives and Penalties” section below.

Transmission works under monopoly conditions and with a guaranteed annual fixed income that is determined by the new replacement value of the networks and equipment and by the resulting value of bidding processes awarding new projects for the expansion of the National Transmission System (“NTS”). This value is allocated among the traders of the NTS in proportion to their energy demand.

Distribution is defined as the operation of local networks below 220 kV. Any customer may have access to a distribution network for which it pays a connection charge.

There is one interconnected system, the Colombian NIS, and several isolated regional and smaller systems that provide electricity to specific areas. According to the World Energy Council 93.6% of the Colombian population in 2012 received electricity through the public network.

Principal Regulatory Authorities

The Colombian Ministry of Mines and Energy (“Colombian MME”) is responsible for the policy-making of the electricity sector, which aims for a better use of the mining and energy resources available in Colombia, and in turn contributes to the country’s social and economic development.

The Colombian Mining and Energy Planning Agency (“UPME” in its Spanish acronym) is in charge of planning the expansion of the generation and transmission networks.

The National Council for Economic and Social Policy (“CONPES” in its Spanish acronym) is the highest national planning authority and works as an advisory entity to the government in all aspects related to Colombia’s economic and social development. It coordinates and directs the entities responsible for economic and social direction, through the study and approval of documents on policy development.

The National Planning Department (“DNP” in its Spanish acronym) performs the functions of Executive Secretariat of the CONPES and is therefore the entity responsible for coordinating and presenting the documents for discussion at meetings.

The Energy and Gas Regulatory Commission (“CREG” in its Spanish acronym) implements the principles of the industry set out by the Colombian Electricity Act. This commission is constituted by five experts named by the Colombian President, the Colombian MME, the Colombian Ministry of Public Credit and the director of the DNP or their delegates. Such principles are: efficiency (the correct allocation and use of resources and the supply of electricity at minimum cost); quality (compliance with technical requirements); continuity (continuous electricity supply without unjustified interruptions); adaptability (the incorporation of modern technology and administrative systems to promote quality and efficiency); neutrality (impartial treatment of all electricity customers); solidarity (the provision of funds by high-income customers to subsidize the subsistence consumption of low-income customers); and fairness (an adequate and nondiscriminatory supply of electricity to all regions and sectors of the country).

CREG is empowered to issue regulations that govern technical and commercial operations and to set charges for regulated activities. CREG’s main functions are to establish conditions for gradual deregulation of the electricity sector toward an open and competitive market, approve charges for transmission and distribution networks and for regulated customers, establish the methodology for calculating maximum tariffs for supplying the regulated market, regulations for planning and coordination of operations of the Colombian NIS, technical requirements for quality, reliability and security of supply, and protection of customers’ rights.

72

The National Operation Council (“CNO” in its Spanish acronym) is responsible for establishing technical standards to facilitate the efficient integration and operation of the Colombian NIS. It is a consultative entity composed of the CND’s Director and generation, transmission and distribution company representatives.

The Commercialization Advisory Committee (“CAC”) is an advisory entity which assists CREG with the commercial aspects of the Colombian MEM.

The Superintendency of Industry and Commerce investigates, corrects and sanctions restrictive commercial competition practices, such as antitrust behavior. It also oversees mergers of companies operating in the same productive activities to prevent excessive concentration or monopoly of certain industries.

The Superintendency of Domestic Public Services (“SSPD” in its Spanish acronym) is responsible for overseeing all public utility services companies. The SSPD monitors the efficiency of all utility companies and the quality of services. The SSPD can also assume control over utility companies when the availability of utility services or the viability of such companies is at risk. Other duties include (i) enforcing regulations, imposing penalties and generally overseeing the financial and administrative performance of public utility companies, (ii) providing accounting norms and rules for public service companies, and (iii) in general, organizing information networks and databases pertaining to public utilities.

The Ministry of Environment and Sustainable Development is responsible for the management of the environment and renewable natural resources. It is also responsible for guiding and regulating environmental planning as well as developing policies and regulations. The Ministry of Environment and Sustainable Development’s goal is to recover, conserve, protect, and promote sustainable use of renewable natural resources, the environment of the nation, and to ensure sustainable development, without prejudice to the functions assigned to other sectors.

The Ministry of Environment and Sustainable Development, together with the Colombian President, aims to develop national environmental and renewable natural resource policies to ensure the right of Colombians to a healthy environment in which natural heritage and national sovereignty are protected.

The Electricity Law

General

In 1994, the Colombian Congress passed significant reforms affecting the public utilities industry. These reforms, contained in Law 142, known as the Public Utility Services Law (“LSPD” in its Spanish acronym), and Law 143, were the result of constitutional amendments made in 1991. These laws form the basic legal framework that currently governs the electricity sector in Colombia. The most significant reforms included the opening of the electricity industry to private sector participation, the functional segregation of the electricity sector into four distinct activities (generation, transmission, distribution and trading), the creation of an open and competitive wholesale electricity market, the regulation of transmission and distribution activities as regulated monopolies and the adoption of universal access principles applicable to transmission and distribution networks.

The Colombian Electricity Act regulates electricity generation, trading, transmission, and distribution (collectively, the “Activities”). Under the law, any company existing before 1994, domestic or foreign, may undertake any of the Activities. Companies established subsequent to such date can engage exclusively in only one of such Activities. Trading, however, can be combined with either generation or distribution.

73

Limits and Restrictions

The market share for generators and traders is limited. The limit for generators is 25% of the Colombian system’s Firm Energy. The principal market share metric used by CREG to regulate the generation market is the percentage of Firm Energy that a market participant holds.

Additionally, if an electricity generation company’s share of Colombia’s total Firm Energy ranges from 25% to 30% and the market’s Herfindahl Hirschman Index (“IHH” in its Spanish acronym), a measure of market concentration, is at least 1,800, such company becomes subject to monitoring by the SSPD. If an electricity generation company’s share of Colombia’s total Firm Energy exceeds 30%, such company may be required to sell its share exceeding the 25% threshold.

Similarly, a trader may not account for more than 25% of the trading activity in the Colombian NIS. Limitations for traders take into account international energy sales. Market share is calculated on a monthly basis according to the trader’s commercial demand and traders have up to six months to reduce their market share when the limit is exceeded.

Such limits are applied to economic groups, including companies that are controlled by, or under common control with, other companies. In addition, generators may not own more than a 25% interest in a distributor, and vice versa. However, this limitation only applies to individual companies and does not preclude cross-ownership by companies within the same corporate group.

A distribution company can have more than 25% of an integrated company’s equity if the market share of the latter company is less than 2% of the national generation business. A company created before the enactment of Law 143 is prohibited from merging with another company created after Law 143 came into effect.

A generator, distributor, trader or an integrated company (i.e., a firm combining generation, transmission and distribution activities) cannot own more than 15% of the equity in a transmission company if the latter represents more than 2% of the national transmission business in terms of revenues.

Regulation of Generation Companies

Concessions

The Colombian electricity sector was structurally reformed by Laws 142 and 143 of 1994. Under this new legal structure, economic activities related to the provision of the electricity service are governed by the constitutional principles of free market economic activity, free market private initiative, freedom to enter and leave, corporate freedom, free market competition and private property, with regulation and inspection, surveillance and control by the state.

According to Law 143 of 1994, these constitutional principles of freedom are the general rule in the electricity sector business, while the concession is the exception. Different economic, public, private or mixed agents may participate in the sector’s activities, which agents shall enjoy the freedom to develop their functions in a context of free market competition. In order to operate or start up projects, they must obtain from the competent authorities the necessary environmental, sanitation and water-right permits as well as other municipal permits and licenses. All economic agents may construct generation plants and their respective connection lines to the interconnection and transmission networks.

The Colombian government cannot legally participate in the execution and exploitation of generation projects. As a general rule, such projects are to be carried out by the private sector. The Colombian government is only authorized to enter into concession agreements on its own behalf relating to generation when there is no entity prepared to assume these activities on comparable conditions.

74

Dispatch and Pricing

The purchase and sale of electricity can take place between generators, distributors acting in their capacity as traders, traders (who do not generate or distribute electricity) and unregulated customers. There are no restrictions for new entrants into the market as long as the participants comply with the applicable laws and regulations.

The Colombian MEM facilitates the sale of excess energy that has not been committed under contracts. In the wholesale market, an hourly spot price for all dispatched units is established based on the offer price of the highest priced energy dispatched unit for that period. The CND receives price bids each day from all the generators participating in the Colombian MEM. These bids indicate prices and the hourly available capacity for the following day. Based on this information, the CND, guided by an “optimal dispatch” principle (which assumes an infinite transmission capacity through the network), ranks the dispatch optimized during the 24-hour period, taking into account initial operating conditions, and determining which generators will be dispatched the following day in order to satisfy expected demand. The price for all generators is set as the most expensive generator dispatched in each hourly period under the optimal dispatch. This price-ranking system is intended to ensure that national demand, increased by the total amount of energy exported to other countries, will be satisfied at the lowest cost combination of available generating units in the country.

Additionally, the CND plans for the dispatch, which takes into account the limitations of the network, as well as other conditions necessary to satisfy the energy demand expected for the following day in a safe, reliable and cost-efficient manner. The cost differences between the “planned dispatch” and the “optimal dispatch” are called “restriction costs.” The net value of such restriction costs is assigned proportionally to all the traders within the Colombian NIS, according to their energy demand, and these costs are passed through to the end customers. Some generators have initiated legal proceedings against the government arguing that recognized prices do not fully cover the costs associated with these restrictions on the grounds that current regulations do not take into account all the costs incurred under safely reliable generation. However, from CREG’s point of view, Resolution 036-2010 modified the remuneration of these restrictions for hydro plants by assigning the opportunity cost to the spot price.

In July 2012 and October 2013, CREG published Resolutions 076-2012 and 082-2013, respectively (“Statute for situations of scarcity in the MEM as part of the operative regulations”) that proposed a draft resolution for defining the rules of operation under critical supply conditions.

Sales by Generation Companies to Unregulated Customers

In the unregulated market, generation companies and unregulated customers sign contracts in which terms and prices are freely agreed. Typically, these agreements establish that the customer pays the energy that it consumes each month without a cap or a floor. The prices are fixed in Colombian pesos indexed monthly to the Colombian PPI. According to resolution CREG 131 of 1998, to be considered “unregulated,” customers are required to have an average monthly power demand for six months of at least 0.1 MW, or a minimum of 55 MWh in monthly average energy demand over the prior six months.

Sales by Distribution Companies to Regulated Customers

The regulated market is served by traders and by distributors acting as traders, who bill all service costs, according to prices regulated by CREG. The scheme allows distributors to pass through the average purchase price of all the market transactions that affect the regulated market into the customer’s tariff, thereby mitigating spot price volatility and providing an efficiency signal to the market. Additionally, CREG established a formula for the total cost of service, which transfers transmission, distribution, marketing costs, and physical losses costs to the regulated market.

Sales by Generation Companies to Traders for the Regulated Market

Traders in the regulated market are required to buy energy through procedures that ensure free market competition. For evaluating the bids, the buyer takes into account price factors as well as other technical conditions and commercial objectives to be defined before the contracting process. These agreements can be signed with

75

different terms, such as: “Pay amount contracted,” “Pay amount demanded with or without a limit,” “Pay the percentage actually consumed,” etc. Prices are denominated in Colombian pesos indexed monthly to the Colombian CPI.

Sales to Other Generation Companies

Generators can sell their energy to other generators through direct negotiation, at freely negotiated prices and conditions.

Regulatory Charges

Contribution by generation per Law 99 of 1993: Generation companies are obliged to pay monthly payments based on their generation to the regional autonomous corporations for environmental protection in areas where the plants are located and to the municipalities where the generation plants are situated. For more information, see “— Environmental Regulation” below.

Generation contribution to the Financial Support Fund for Energy for Unconnected Zones (“FAZNI” in its Spanish acronym): Law 633 of 2000 (tax reform) states that generators must make a contribution of 1 Colombian peso to the FAZNI for every kilowatt dispatched on the Wholesale Energy Exchange. Initially, this requirement was effective until December 31, 2007 but it was extended to 2014 by Law 2,099 of November 2006.

Incentives and Penalties

Generators connected to the Colombian NIS can also receive “reliability payments” which are a result of the OEF that they provide to the system. The OEF is a commitment on the part of generation companies backed by its physical resource capable of producing firm energy during scarcity periods. A generator that acquires an OEF will receive fixed compensation during the commitment period, whether or not the fulfillment of its obligation is required. To receive reliability payments, generators have to participate in firm energy bids by declaring and certifying such firm energy. Until November 2012, the transition period, the firm energy supply for reliability purposes was assigned proportionally to the declared firm energy of each generator. Beyond the transition period, the additional firm energy required by the system is allocated by bids.

During 2011, CREG published resolutions for the assignment of OEF for the periods from December 2014 to November 2015 and from December 2015 to November 2016. For the first of these periods, the OEF assigned this pro rata to the existing generators while, for the second, it carried out a second tender for the electricity sector on December 27, 2011.

During 2013, Resolution 062-2013 created incentives for thermal plants to back up their OEF with imported natural gas to guarantee their OEF for 10 years, beginning December 2015.The new resolution proposes the foundations of the remuneration for the group of thermal plants in order to develop the first regasification terminal in Colombia. The project will be constructed by an “Infrastructure Agent” that will be chosen through a tender process in 2014.

On March 10, 2014, CREG published Resolution 022/ 2014, which defined a transitory regulated revenue in order to motivate the agents to build the regasification terminal.

The tender for firm energy for the period from November 2015 to December 2016 was made on December 27, 2011. Seven companies participated with a total of eight projects of which five were assigned at a price of US$ 15.7/MWh. The new projects are Río Ambeima (hydro, 45 MW), Carlos Lleras Restrepo (hydro, 78 MW), San Miguel (hydro, 42 MW), Gecelca 32 (thermal, 250 MW) and Tasajero 2 (thermal, 160 MW). The new assignments were made for a period of twenty years as of December 1, 2015.

In addition, on January 26, 2012, the auction was concluded for projects with long construction periods (“GPPS” in its Spanish acronym) which assigned OEFs for a period of twenty years to three hydroelectric projects and one thermal project. Two of these were assigned to new plants: Termonorte which will have a capacity of 88

76

MW by 2017 and the Porvenir II hydroelectric power plant which will have a capacity of 352 MW by 2018. The other two involved increases in OEF for plants already under construction and had available firm energy following the GPPS process carried out in 2008 (Sogamoso and Pescadero-Ituango hydroelectric plants). The process ended with assignment prices below the maximum defined for the auction in December (US$ 15.7/MWh), and were in connection with Termonorte (US$ 14.9/MWh); Porvenir II (US$ 11.7/MWh); Sogamoso and Pescadero-Ituango (US$ 15.7/MWh).

CREG regulated the reconfiguration auction scheme, under the methodology of reliability charge that allowed agents to change the beginning of the OEF by renouncing the “reliability payments” and paying a premium. The market operator, XM, published the results of the auction sale reconfiguration of OEF and Termocol, Amoya and Gecelca were the participating companies.

During 2012 CREG also issued the statement regarding OEF allocation for the period from December 2016 to November 2017. CREG indicated that (i) a tender for OEF allocation was not necessary due to the conditions of the system and (ii) the assignment schedule will be published once there is greater certainty with regards the dates for execution of the Colombia-Panama interconnection agreement and the processes for importing natural gas. CREG Circular 045 states that this publication will be made after June 30, 2014.

Despite the statement, a tender was finalized in July 2012 for the reconfiguration of the OEF for the period from December 2012 to November 2013. The OEF was allocated to Termocol, which owns the Poliobras project (4.5 GWh per day) and to Amoyá, which owns the Isagen project (0.5 GWh per day). Such tenders are called when previously allocated OEFs exceed the projected demand for a certain period. The tender ended with a price margin of US$ 0.6 per MWh, which is over the reliability load price for the period from December 2012 to November 2013.

Electricity Exports and Imports

Decision CAN 536 of 2002, CAN 720 of 2009, and CAN 757 of 2011, signed by the countries that participate in the Andean Nations Community (“CAN” in its Spanish acronym), Colombia, Ecuador, Bolivia and Peru, established the general framework for the interconnection of electrical systems that created a coordinated economic dispatch for the countries involved in the interconnections. Under this framework, the interconnection system between Colombia and Ecuador was inaugurated in March 2003. The two countries adopted a transitional regime pursuant to CAN 757, while adopting common standards in order to make such international transactions viable.

In addition to the interconnection with Ecuador Colombia is also interconnected with Venezuela by three links, the most important being the Cuestecitas-Cuatricentenario line. During 2011 and 2012, there were some transfers of energy made from Colombia to Venezuela, due to shortages in Venezuela, over this line under an agreement between the presidents of both nations. The agreement covers estimated transactions of 30 GWh/month, with a demand of 70 MW in periods of low and medium load and of 140 MW in periods of high load. The contract was signed on February 1, 2013 for a term of eleven months and was formalized by a contract between Isagen (Colombia) and Corpoelec (Venezuela).

There is also an energy interconnection project with Venezuela being carried out by the Institute of Planning and Promotion of Energy Solutions for Non-Interconnected Zones (“IPSE” in its Spanish acronym) pursuant to an agreement between Colombia and Venezuela. Under the terms of this agreement, Colombia will sell electricity to Venezuela at a rate that is much cheaper than the costs to produce it. Venezuela is expected to pay for the electricity with fuel rather than cash. This interconnection project is estimated to cost US$ 8 billion and contemplates the construction of a 35.6 kilometer transmission line with a capacity of 34,500 volts in order to supply electricity to the region of San Fernando de Atabapo, Venezuela.

In the first half of 2012, CREG and the National Public Services Authority of Panama (“ASEP” in its Spanish acronym) issued resolutions that provided for enhancing the process for tendering of rights to construct the future interconnection line between Colombia and Panama.

The resolutions also supplement pre-existing resolutions by providing for provisions that allow Panamanian distribution companies to participate in future tenders in Colombia. The most important resolutions issued by

77

Colombia are (i) CREG-002-2012, which attempts to resolve the discrepancies between firm capacity in Panama and the OEF in Colombia; (ii) CREG-004-2012, which outlines the exchanges in conditions of rationing; and (iii) CREG 057-2012, which is an operative agreement between the operators of the systems of Colombia and Panama. Panama has also issued parallel resolutions that enable Colombian companies to participate in tenders in Panama as international interconnection agents.

Emgesa, Isagen, Celsia and its subsidiary EPSA participated in the tender process to obtain line capacity rights in Panama that took place on August 21, 2012. These companies were able to participate in the tender by forming subsidiaries in Panama and complying with all requirements under Panamanian law, including the provisions relating to guarantees.

In June 2012, Interconexión Eléctrica Colombia-Panamá (“ICP”), which is jointly owned by Interconexión Eléctrica de Colombia (“ISA”) and the state-owned Empresa de Transmisión Eléctrica de Panamá (“ETESA”), was entrusted with the construction of an interconnection project and was allowed to join the tender for capacity rights. ICP submitted the base amount that is necessary to participate in the tender and proceeded to obtain prequalifications in July and August 2012. However, the tender process was suspended indefinitely on August 19, 2012. This was primarily due to financial reasons as the Panamanian government, citing budget constraints, refused to provide a firm commitment to contribute capital.

ICP is expected to continue to seek financial support in order to ensure the viability of the project and reduce uncertainties for the participants. With the support from the Interamerican Development Bank, ICP has hired a consultant to carry out a study that will explore alternatives plans that would result in more competitive energy prices and greater business opportunities. The Colombian government is also in conversations with its Panamanian counterpart in order to restart the process.

In November 2012, the Declaration of Santiago was signed by Chile, Colombia, Ecuador, Peru and Bolivia. The main purpose of this declaration was to facilitate regional electricity transaction by harmonizing regulatory frameworks of the member countries.

Gas Market

Natural gas is important for the Colombian electricity sector, as natural gas is a key fuel for generation. The Colombian natural gas market operates under near monopolistic conditions and consists of a primary market, secondary market and short-term market. Supply contracts depend on a balance between supply and demand for the next five years, which is calculated by the regulatory authority every year. Transportation contracts are traded under bilateral negotiation schemes or through auctions.

This regulatory framework is the result of a former proposal that sought to reform the wholesale market for natural gas and ensure that it operates under the principles of transparency and liquidity. This new framework also outlines entities that are eligible to participate in each market, the types of permitted transactions, and the kind of contracts that may be entered into. It even seeks to create standardized force majeure provisions for such contracts in order to clarify the responsibilities of the parties. The new rules took effect in August 2013.

Additionally, in June 2013 the regulatory authorities published a new incentive framework so as to enable the possibility for the first regasification facility on the north coast of the country. The principal purpose of this facility will be to serve as a backup source of gas to certain thermal plants in Colombia. In the long term, this facility will be an alternative point of supply for the market.

Regulation in Transmission

Transmission companies which operate at no less than 220 kV constitute the National Transmission System (“NTS”). They are required to provide access to third parties on equal conditions and are authorized to collect a tariff for their services. The transmission tariff includes a connection charge that covers the cost of operating the facilities, and a usage charge, which applies only to traders.

78

CREG guarantees an annual fixed income to transmission companies. Income is determined by the new replacement value of the network and equipment and by the resulting value of bidding processes awarding new projects for the expansion of the NTS. This value is allocated among the traders of the NTS in proportion to their energy demand.

The expansion of the NTS is conducted according to model expansion plans designed by the Mining and Energy Planning Agency (“UPME”, in its Spanish acronym) and pursuant to bidding processes opened to existing and new transmission companies, which are handled by the Colombian MME in accordance with the guidelines set by CREG. The construction, operation and, maintenance of new projects is awarded to the company that offers the lowest present value of future cash flows needed for carrying out the project.

In 2012, CREG established the new quality of service regulation for the NTS. It defined incentives for failure to provide energy and required companies to compensate customers, by reducing their charges, for service interruptions in the NTS.

Trading Regulation

The retail market is divided into regulated and unregulated customers. Customers in the unregulated market may freely and directly enter into electricity supply contracts with a generator or a distributor, acting as traders, or from a pure trader. The unregulated customer, which for 2013 represented about 33% of the market, consists of customers with a peak demand in excess of 0.1 MW or a minimum monthly energy consumption of 55 MWh.

Trading involves reselling the electricity purchased in the wholesale market. It may be conducted by generators, distributors or independent agents, which comply with certain requirements. Parties freely agree upon trading prices for unregulated customers.

Trading on behalf of regulated customers is subject to the “regulated freedom regime” under which tariffs are set by each trader using a combination of general cost formulas given by CREG and individual trading costs approved by CREG for each trader. Since CREG approves limits on costs, traders in the regulated market may set lower tariffs for economic reasons. Tariffs include, among other things, energy procurement costs, transmission charges, distribution charges and a trading margin.

The trading tariff formula became effective on February 1, 2008. The main changes to this formula were the establishment of a fixed monthly charge and the introduction of reduction costs of non-technical energy losses in the trading charges. In addition, CREG allows traders in the regulated market to choose tariff options to manage tariff increments.

In May 2009, a company called Derivex was created so as to incorporate an energy derivatives market. In October 2010, Derivex began its operation with the first electricity forward derivative contract.

In December 2011, CREG issued the Retailing Code, which includes specific rules that improve retailers’ relations with other electricity market members. It established new regulations about energy measurement, non-technical losses, the retailers’ connection to the wholesale electricity market, and the retailers’ credit risks, among other considerations.

In October 2013, CREG published a new resolution that defines “technical equity” (technical equity corresponding to the minimum equity that allows agents to perform operations on the wholesale market, either as sellers or buyers) as a mechanism to rate the technical abilities of companies in order to protect the wholesale market from unstable companies. According to the new rule, any transaction in the spot market has to be lower than the technical equity of the companies involved in the transaction.

In order to improve wholesale price formation, CREG has been designing a new energy procurement scheme based on long term energy bids, known as Organized Market (“MOR” in its Spanish acronym). The final rules for this new system are not available, but CREG issued a new draft version of the mechanism by Resolution 117-2013, and the deadline for consultations has passed. It is expected that CREG will issue the final resolution on MOR in early 2014 and will call for the first auction in mid-2014.

79

Tariffs to Final Customers

The energy trader is responsible for charging the electricity costs to end customers and to transfer their payments to the industry’s agents. The tariffs applied to regulated customers are calculated pursuant to a formula established by CREG. This formula reflects the costs of the industry: generation, transmission, distribution (depending on the customer’s connection level), trading losses, constraints, administrative costs, and market operating costs.

In addition, the final costs of the service are affected by subsidies and/or contributions that are applied according to the socio-economic level of each customer. When subsidies exceed contributions, the Colombian government covers the difference. The subsidies mechanism is experiencing some modifications. Colombian MME’s Resolution 18 1479 (August 2012) modified the subsidy removal method for residential customers whose consumption exceeds the subsistence consumption, as established in article 2 of Resolution 18 1272 of 2011.Colombian MME’s Decree 011 2012 regulating the Social Energy Fund (“FOES” in its Spanish acronym) as provided in article 103 of Law 1450 of 2011 (published in 2012). The purpose of FOES is to cover up to CPs 46 per kWh of the value of electricity for subsistence consumption of residential customers belonging to income groups 1 and 2 of the least developed rural areas.

Another factor that affects the final tariff is the Distribution Area which established a single tariff for the distribution companies in adjacent geographic zones.

Environmental Regulation

The environmental framework in Colombia was established by Law 99/1993, which also established the Colombian Ministry of the Environment (now the Ministry of Environment and Sustainable Development) as the authority for determining environmental policies. The Colombian Ministry of Environment defines issues, executes policies and regulations that focus on the recovery, conservation, protection, organization, administration and use of renewable resources.

Any entity planning to develop projects or activities relating to generation, interconnection, transmission or distribution of electricity that may result in environmental deterioration must first obtain environmental permits and licenses and also establish environmental management plans.

According to Law 99, generation plants that have a total installed nominal capacity above 10 MW are required to contribute to the conservation of the environment. Hydroelectric power plants must pay 6% of their generation and thermoelectric plants must pay 4% of their generation in addition to a tariff that is annually determined. This payment is made monthly to the municipalities and environmental corporations where these facilities are located.

Law 1450 of 2011 issued the National Development Plan 2010-2014. The plan establishes that between 2010 and 2014, the government must develop strategies for environmental sustainability and for the prevention of environment risks. These include measures such as the national plan for adaptation to climate change, the environmental licensing process and environmental impact studies.

In 2011, Institutional Decree 3,570 established a new regulatory structure for the environment, creating the Colombian Ministry of Environment and Sustainable Development (previously, the functions of the Ministry of the Environment were established in conjunction with functions of the Ministry of Housing). The main objective of the Colombian Ministry of Environment and Sustainable Development is the formulation and management of environmental and renewable natural resource policies. In 2012, the Colombian Ministry of Environment and Sustainable Development published several resolutions. Resolution 1517 of 2012 established the procedures relating to the Environmental Compensation for Biodiversity Loss while Decree 1640 of 2012 set forth regulations for the planning and management of hydrographic basins. In addition, Resolution 1526 of 2012 established the procedural requirements for the subtraction of the forest areas protected by Law 2 of 1959.

80

In 2012, the Colombian Ministry of the Environment and Sustainable Development included the NAMA (Nationally Appropriate Mitigation Action) in the CDM (Clean Development Mechanism) & NAMA Portfolio.

NAMA and CDM are two mechanisms established by the United Nations in order to promote the developments of project which reduce emissions of greenhouse gases in certain countries (listed in Exhibit I of the Kyoto Protocol), for example, electric vehicles promoted by Endesa Spain and Enersis.

The Colombian Ministry of the Environment and Sustainable Development publishes progress reports annually for the portfolio projects of CDM and NAMA under development in Colombia. This gives interested parties a chance to buy CERs (Certified Emission Reduction) in connection with CDM projects and also provides financing opportunities in the case of NAMA projects.

In December 2012, the UPME published Resolution 0563, which establishes the procedure for the exclusion of sales tax for the programs or activities related to reduced energy consumption and energy efficiency.

In August 2013, the DNP issued CONPES Document 3762, a policy text that established guidelines for the identification and priorization of infrastructure projects that are of national and strategic interest in the energy, mining, oil, gas, and transportation sectors. It defines the relevant issues related with the formalities and procedures for acquiring land, prior consultation, community relations, environmental licensing and permits, and institutional coordination, all of which need to be resolved in order to assure the correct formulation and development of those projects.

In the last few years, the environmental regulation for the electricity sector has been focused on regulating power plant emissions, hydro policies (including water discharges and basin organizations), and environmental licensing and penalties.

Peru

Industry Overview

Industry Structure

In the Wholesale Electricity Market (“Peruvian MEM” in its Spanish acronym) there are four categories of local agents: generators, transmitters, distributors and large customers.

The following chart shows the relationships among the various participants in the interconnected system, (“SEIN” in its Spanish acronym)

The generation segment is composed of companies which own generation plants. This segment is noted for being a competitive market in which prices tend to reflect the marginal cost of production.

81

Electricity generators, as energy producers, have capacity and energy sale commitments with their contracted customers. Generators may sell this capacity and energy to both distributors and unregulated customers.

The energy received by a generator’s unregulated and regulated customers does not necessarily coincide with the energy produced by that supplier since the generation plants’ production is allocated by the Committee of Economic Operation of the System (“COES” in its Spanish acronym), the system operator, through a centralized dispatch. The transfer cost is minimized through a consideration of the variable production costs of each power plant, regardless of their contractual commitments (the only exception to this rule are the natural gas (NG) plants wich declare once a year the NG price for dispatch purpose). Therefore, there is a short-term market also managed by the COES, where an economic balance is made between the energy produced and the consumption required by the generators’ customers. The only exception to this rule are the natural gas plants which declare (once a year) the natural gas price for dispatch matters.

The generation plants’ production and the customers’ energy consumption at the nodal short-term marginal cost are valued, and the deficit generators pay for the energy purchased from surplus generators. The balance made in connection with energy sales is also carried out with respect to capacity, in which case the price of the capacity corresponds to a price regulated by the Supervising Entity on Investment in Energy and Mining (“Osinergmin” in its Spanish acronym), the Peruvian regulatory electricity authority.

In 2008, Osinergmin defined a new rule to calculate spot prices through December 2013 due to gas transport and electricity transmission problems. Decree 049/2008 established two models, one which represented a theoretical dispatch without considering any restrictions and another that considered real dispatch with restrictions. The spot price is obtained from the theoretical dispatch (known as “idealized marginal cost”), and the additional operating costs resulting from system restrictions are paid by demand to the affected generators through a mechanism established by the authority. The “idealized marginal cost” regime was finally extended until December 31, 2016.

The settlements made by the COES also include payments and/or collections for complementary services such as frequency and tension regulation. They also consider compensation for operating cost overruns, such as the operation at minimum load, random operational tests, etc.

Regulation DS 027-2011-EM of June 2011 established that as of January 2014, several participants may also participate as buyers in the short-term market, in addition to the generators. These other participants include distributors (in order to meet the demand of their unregulated customers), large customers with demand over 10 MW, and a group of unregulated customers whose aggregate demand exceeds 10 MW. This regulation is now suspensed until the wholesale market prices return to previous levels (anticipated to occur after 2017).

The transmission system is made up of transmission lines, substations and equipment for the transmission of electricity from the production points (generators) to the consumption centers or distribution points. Transmission in Peru is defined as all lines or substations with a tension higher than 60 kV. Some generation and distribution companies also operate sub-transmission systems at the transmission level.

Electricity distribution is an activity carried out in the concession areas granted to different distribution companies.

Customers with a capacity demand lower than 200 kW are considered regulated customers, and their energy supply is considered to be a public service. Customers whose capacity demand is within the range of 200-2,500 kW are free to choose whether to be considered regulated or unregulated customers. Once this type of customer chooses to be a regulated or unregulated customer, the customer has the obligation to remain in that category for at least three years. If the customer wants to change its category from regulated to unregulated customer, or vice versa, it shall provide at least one year advance notice.

There is only one interconnected system, the SEIN, and several isolated regional and smaller systems that provide electricity to specific areas. According to the National Institute of Statistics of Peru (“INEI” in its Spanish acronym as of December 2012, 91.2% of the population obtained electricity through the public network.

82

Principal Regulatory Authorities

The Peruvian Ministry of Energy and Mining (“MINEM” in its Spanish acronym) defines energy policies applicable nationwide, regulates environmental matters applicable to the energy sector and oversees the granting, supervision, maturity and termination of licenses, authorizations and concessions for generation, transmission, and distribution activities. On August 10, 2012, Regulation DS 030-2012-EM amended the articles of organization and defined the functions of MINEM and the Natural Gas Management Department.

The Agency for the Promotion of Private Investment (“PROINVERSIÓN” in its Spanish acronym) is a public entity responsible for attracting private investment in public utilities and infrastructure works. It also advises regarding the difficulties faced by investors in making their investments.

Osinergmin, the Energy and Mining Investment Supervisor, is an autonomous public regulatory entity that controls and enforces compliance with legal and technical regulations related to electrical and hydrocarbon activities, controls and enforces compliance with the obligations stated in the concession contracts, and is responsible for the preservation of the environment in connection with the development of these activities. Osinergmin’s Tariff Regulatory Bureau has the authority to publish the regulated tariffs. It also controls and supervises the bidding processes required by distribution companies to purchase energy from generators.

The COES coordinates the SEIN’s short, medium- and long-term operations at minimum cost, maintaining the security of the system and optimizing energy resources. It also plans for the SEIN’s transmission development and manages the short-term market.

The National Institute for Defense of Competition and Intellectual Property (“INDECOPI” in its Spanish acronym) is responsible for promoting competition, protecting customer rights and safeguarding all forms of intellectual property.

The General Electricity Authority (“DGE” in its Spanish acronym) is the regulatory technical entity responsible for evaluating the electricity sector, and proposes the necessary regulations for the development of the electricity generation, transmission and distribution activities.

The Peruvian Ministry of Environment (“MINAM” in its Spanish acronym) defines environmental policies applicable nationwide and is the head of the national environmental management system, which includes the National Environmental Impact Assessment System, the National Environmental Information System, the Protected Natural Areas System, as well as the management of natural resources in its area of competence, biodiversity and climate change, among others.

The Electricity Law

General

The general legal framework applicable to the Peruvian electricity industry includes: the Law of Electricity Concessions (Decree Law 25,844/1992) and its ancillary regulations, the Law to Secure the Efficient Development of Electricity Generation (Law 28,832/2006), the Technical Regulation on the Quality of the Electricity Supply (Supreme Decree 020/1997), the Electricity Import and Export Regulation (Supreme Decree 049/2005), the Antitrust Law for the Electricity Sector (Law 26,876/1997), and the law that regulates the activity of Osinergmin (Law 26,734/1996, together with Law 27,699/2002).

Some of the characteristics of the regulatory framework are (i) the separation of the three main activities: generation, transmission and distribution; (ii) freely-determined prices for the supply of energy in competitive market conditions; (iii) a system of regulated prices based on the principle of efficiency together with a bidding regime; and (iv) private operation of the interconnected electricity systems subject to the principles of efficiency and quality of service.

83

Law 29,852/2012 and Regulation 021-2012-EM created the Hydrocarbons Energy Security System and the Fund of Social Energy Inclusion (“FISE” in its Spanish acronym). These laws also created a system of social compensation and universal service for the most vulnerable sectors of the population which will be financed by surcharges on the electricity billing of unregulated customers (equivalent to the surcharge that exists today for regulated customers on the Electrical Social Compensation Fund (“FOSE” in its Spanish acronym)), transport surcharges for hydrocarbon-derivate liquids and natural gas multi-pipelines and surcharges on the use of the natural-gas pipeline.

Osinergmin and distribution companies will be the administrators of the FISE, which funds will be directed to (i) the massification of natural gas to vulnerable sectors, (ii) develop new energy sources like photovoltaic cells, solar panels, etc., and (iii) supply liquefied petroleum gas (“LPG”) to vulnerable sectors.

Law 29,969/2012 provides for the massification of natural gas. State electricity distributors are authorized to carry out natural-gas programs, including the distribution of natural gas in their concession area. They will also be able to associate with companies specializing in the development of gas-distribution projects. Within a maximum term of three years from the start of the gas distribution, MINEM will start the process of promoting private investment for the granting of the gas-distribution concession of gas by the pipeline network.

Law 29,970/2012 guarantees energy security and promotes the development of the petro-chemical complex in the south of the country. Under this law, the following agendas have been declared as a matter of national interest: (i) guaranteeing energy security, (ii) transporting ethane to the south of Peru; and (iii) constructing regional pipelines in the regions of Huancavelica, Junín, and Ayacucho and linking them with the existing gas pipelines.

Limits and Restrictions

Since the enactment of the Law of Electricity Concessions, vertical integration is restricted, and thus activities in the generation, transmission and distribution segments must be developed by different companies. The Antitrust Law for the Electricity Sector regulates the cases in which vertical and horizontal integration is admissible.

An authorization is compulsory for those electricity companies that hold more than 5% of another business segment, either before or as a result of a merger or integration. An authorization is also required for the horizontal integration of generation, transmission and distribution activities which result in a market share of 15% or higher of any business segment, either before or as a result of any operation.

Such authorizations are granted by the Institute for Defense of the Consumer and Intellectual Property, using the market share information provided by Osinergmin.

Regulation of Generation Companies

Concessions

Generation companies that own or operate a power plant with an installed capacity greater than 500 kW require a concession granted by the MINEM. A concession for electricity generation activity is an agreement between the generator and the MINEM, while an authorization is merely a unilateral permit granted by said public entity. Authorizations are granted by the MINEM for an unlimited period of time, although their termination is subject to the same considerations and requirements as the termination of concessions under the procedures set forth in the Law of Electricity Concessions, and its related regulations.

In order to receive a concession, the applicant must first request for a temporary concession of two years, and must subsequently apply for a definitive concession.

In order to receive an authorization, the applicant must file a petition before the MINEM. If the petition is admitted and no opposition is presented, the MINEM grants the authorization to develop generation activities for unlimited time, subject to compliance with applicable regulations.

84

Dispatch and Pricing

The coordination of electricity dispatch operations, the setting of spot prices and the control and management of economic transactions that take place in the SEIN are controlled by COES. Generators can sell energy directly to large customers and buy the deficit or transfer the surplus between contracted energy and actual production in the pool at the spot price. Resolution 080-2012-OS/CD ( 2012) established the criteria and methodology for deciding the real-time operation under exceptional conditions as declared by the MINEM.

Sales by Generation Companies to Unregulated Customers

Sales to unregulated customers are carried out at mutually agreed prices and conditions, which include tolls and compensation for the use of transmission systems and, if necessary, to distribution companies for the use of their network.

Sales to Distribution Companies and Certain Regulated Customers

Sales to distributors can be under bilateral contracts at a price no greater than the regulated price in the case of regulated customers, or at an agreed price in the case of unregulated customers. In addition to the bilateral method allowed under the Law of Electricity Concessions, Law 28,832 has also established the possibility that distributors may meet their unregulated or regulated customers’ demand under contracts signed following a capacity and energy supply tender process.

Sales of Capacity to Other Generation Companies

COES determines a firm capacity for each power plant on an annual basis. Firm capacity is the highest capacity that a generator may supply to the system at certain peak hours, taking into consideration statistical information and accounting for time out of service for maintenance purpose and for extremely dry conditions in the case of hydroelectric plants.

A generation company may be required to purchase or sell capacity in the spot market, depending upon its contractual requirements in relation to the amount of electricity to be dispatched from such company and to its firm capacity.

Regulatory Charges

In addition to taxes applicable to all industries (mainly an income tax and a value added tax), the electricity industry operators are subject to a special regulation contribution that compensates the costs incurred by the state in connection with the regulation, supervision and monitoring of the electricity industry. The applicable rate for this contribution is up to 1% of the annual billing of each company and the funds levied are distributed proportionally to the MINEM and Osinergmin.

Generators that also have hydroelectric plants pay a water royalty as a function of the hydroelectric energy produced and the regulated energy tariff at peak hours.

Tenders Promoted by the State

During 2009, MINEM carried out several studies which concluded that there will be lack of power generation capacity in the system, in the near future. MINEM recommended the construction of new power plants that would serve as backup in order to guarantee the flow of electricity to the system and avoid blackouts. As a result, PROINVERSIÓN carried out a public bid in August 2010, seeking to secure investments for three projects located in Talara, Trujillo and Ilo that will add another 800 MW to the system. The bid resulted in only two of the projects being awarded: Talara (200 MW, for EEPSA, now an Enersis subsidiary) and Ilo (400 MW, for Enersur, an unrelated company). These plants will receive regular payments for being permanently available to operate and provide energy to the SEIN whenever the COES calls on them and will also be reimbursed for the fuel costs incurred for generating electricity. The Trujillo generation facility was later substituted by the Eten generation facility, and awarded to Planta de Reserva Fría de Generación de Eten S.A. (200 MW) (the “Cold Reserve Project”).

85

An international tender was held in 2012 for the concession for the Cold Reserve Project for the Pucallpa (Ucayali) and Puerto Maldonado (Madre de Dios) plants, which were awarded to Consorcio Energía Perú S.A. The term for the construction of the plants will be 30 months from the signing of the contracts and the concession covers a period of 20 years plus the construction period. The Pucallpa thermal plant will require an investment of around US$ 31.5 million and will have a capacity between 35 and 40 MW, covering 80% of the energy demand. The Puerto Maldonado thermal plant will require an investment of around US$ 18.5 million, will have a capacity between 15 and 18 MW, covering 100% of the energy demand.

PROINVERSIÓN established February 28, 2013 as the date to submit offers for the international public tender that is intended to promote private investments for the Hydroelectric Plants project (CH Molloco—310 MW), which is located in the hills of the Arequipa region.

Services provided by generation, transmission, and distribution companies have to comply with technical standards stated in the Technical Regulations on the Quality of the Electric Supply. Failure to do so might result in the imposition of fines by Osinergmin.

Generators receive a capacity payment whose main component is the annuity of a peak-load plant. However, to be eligible to obtain this charge, plants have to be part of the reserve margin established annually by Osinergmin. The capacity ranking is constructed in base of firm power of every power plant connected to the system and their relative efficiency (ordered by variable costs). Only those plants that appear in the ranking as required to cover the peak demand plus the reserve margin obtain capacity payment. Every year, Osinergmin sets the power price that shall be assigned and paid to each generator pursuant to this concept.

Electricity Exports and Imports

A 220 kV transmission line has been implemented for the interconnection with Ecuador, with a limited capacity of 160 MW. However, the line has not operated continuously because of regulatory issues. During June and August 2011, Peru imported energy from Ecuador due to the lack of generation in northern Peru and transmission problems to that zone in the SEIN. In 2012, Peru imported 4.5 GWh of electricity from Ecuador due to the maintenance of the Talara Zorritos line (3.9 GWh in February 2012) and the TGN4 Malacas power plant (0.6 GWh in March 2012). All of the exports to Ecuador totaling 5.5 GWh occurred in August and September 2012 (1.9 GWh and 3.6 GWh, respectively.)

Internal regulations were also approved for the application of Decision 757 of the Andean Community of Nations (“CAN” in its Spanish acronym), which establishes that when bilateral electricity transactions are carried out with other countries of the CAN, the Economic Operation Committee of the SEIN should send to the MINEM and to Osinergmin weekly reports showing that priority has been given to supplying the domestic market (Supreme Decree 011-2012-EM).

In addition to the interconnection with Ecuador, the governments of Peru and Brazil in 2010 signed the “Agreement between the Republic of Peru and the Federal Republic of Brazil for the supply of electricity to Peru and export of surpluses to Brazil,” with the main purpose of exploiting Peruvian hydroelectric resources in the Amazon basin. In January 2012, Peru created a commission to handle the aspects contemplated in that agreement. The general framework establishes that the accumulated capacity of the generation plants that can be committed to export to Brazil is a maximum of 7,200 MW and dispatch will have the following order of priority: (i) the Peruvian regulated market, (ii) the Peruvian unregulated market, and lastly, (iii) the Brazilian market. As of the date of this Report, the process is on hold, and is expected to be approved by the Peruvian Congress that currently is under the study of the Commission of Andean, Amazonian and Afro-Peruvian Peoples, Environment and Ecology.

The governments of Peru and Chile have established a bilateral working group to discuss energy matters. The purpose of the working group is to identify and take advantage of the potential synergies between the two countries. The first few meetings of this group took place in 2011. At the request of the presidents of both nations, the working

86

group is expected to propose a framework for an agreement in connection with both countries’ electricity integration that would establish the general rules for energy exchanges between them. As of the date of this Report, both countries have conducted negotiations but a final agreement is still pending.

Regulation in Transmission

Transmission activities are divided in two categories: “principal,” which are for common use and allow the flow of energy through the national grid; and “secondary,” which are those lines that connect a power plant with the national grid that connects principal transmission with the distribution network or that connect directly to certain final customers. Law 28,832 also defined “guaranteed transmission systems” and “supplementary transmission systems,” applicable to projects commissioned after the enactment of that law. Guaranteed system lines are the result of a public bid and supplementary system lines are freely constructed and exploited as private projects. Principal and guaranteed system lines are accessible to all generators and allow electricity to be delivered to all customers. Transmission concessionaires receive an annual fixed income, as well as variable tariff revenues and connection tolls per kW. The secondary and complementary system lines are accessible to all generators but are used to serve only certain customers who are responsible for making payments related to their use of the system.

Environmental Regulation

The environmental legal framework applicable to energy related activities in Peru is set forth in the Environmental Law (Law 28,611/2005) and in the Regulation for Environmental Protection regarding Electricity Activities (Supreme Decree 029-94-EM). The MINEM dictates the specific environmental legal dispositions applicable to electricity activities, and Osinergmin is in charge of supervising certain aspects of their application and implementation. According to the Environmental Law, the Peruvian Ministry of Environment has the principal duties of (i) designing the general environmental policies to every productive activity; and (ii) establishing the main guidelines of the different government authorities for their specific environmental sector regulations. During 2010, most supervision functions regarding the application and implementation of the Environmental Law’s dispositions were transferred from Osinergmin to the Peruvian Ministry of the Environment.

Renewable Energy Resources (“RER”) for electricity generation are considered to be from biomass, wind, solar, geothermal and tidal sources, plus hydroelectric plants whose installed capacity does not exceed 20 MW.

In 2008, the authority issued regulations to promote the use of RER. The principal investment incentives established by these regulations are (i) an objective percentage of national electricity consumption, set every five years, to be covered by RER-based electricity generation, not including hydroelectric plants (for the first five-year period, this percentage is 5%); (ii) through tenders of energy to be covered by RER, the winning investor is guaranteed a firm price for the energy injected into the system during the supply contract period of up to 20 years; and (iii) priority in the dispatch of load and access to transmission and distribution networks.

The second RER tender was made in August 2011 for the 1,300 GWh/year, which must be generated from non-hydroelectric sources. Out of 21 initiatives proposed, 473 GWh were awarded to three projects.

In addition, other regulations establish tax incentives, including (i) accelerated depreciation of assets for income tax purposes, and (ii) the advanced recovery of the sales tax. In 2011, the permanent congressional commission approved Law 29,764 extending these tax benefits through 2020.

Law 29,968/2012 created the National Environmental Certification Service for Sustainable Investments (“SENACE” in its Spanish acronym), a specialized public organization with technical autonomy and a separate legal constitution, reporting to the Peruvian Ministry of the Environment. This organization is responsible for reviewing and approving detailed environmental impact studies of public, private or mixed capital investment projects, whether national or multi-regional, that involve activities, construction and other commercial and service activities whose characteristics, importance and/or location can result in significant environmental impacts, with the exception of those expressly excluded by Supreme Decree with the consenting vote of the Council of Ministers.

87

SENACE seeks to implement just one system of environmental administrative procedures to guarantee sustainable investments through the implementation of a sole window of environmental certification.

Raw Materials

For information regarding Enersis’ raw materials, please see “Item 11. Quantitative and Qualitative Disclosures About Market Risk — Commodity Price Risk.”

C. Organizational Structure.

Principal Subsidiaries and Affiliates

We are part of a group led by the Italian company, Enel. Enel owns 92.1% of Endesa Spain, which beneficially owns 60.6% of Enersis directly and through its Spanish subsidiary, Endesa Latinoamérica, and Enersis in turn owns 60% of Endesa Chile. Enel publicly trades on the Milan Stock Exchange, is headquartered in Italy and is primarily engaged in the energy sector, with a presence in 40 countries worldwide, and approximately 99 GW of net installed capacity. It provides service to more than 61 million customers through its electricity and gas businesses.

88

The following chart shows our most important operating subsidiaries and jointly-controlled companies as of December 31, 2013.

89

The companies listed in the following table were consolidated by us as of December 31, 2013. In the case of subsidiaries, our economic interest is calculated by multiplying our percentage economic interest in a directly held subsidiary by the percentage economic interest of any entity in the chain of ownership of such ultimate subsidiary.

Principal Companies and Country of Operations	% Economic  Ownership of Main  Subsidiary by Endesa Chile		Consolidated Assets  of Each Main Subsidiary on a Stand-alone Basis		Operating Income of  Each Main Subsidiary on a Stand-alone Basis
Electricity Generation	(in %)		(in billions of Ch$)
Celta (Chile) (1)		96.2		596.8		103.0
Pehuenche (Chile)		92.7		251.4		144.0
El Chocón (Argentina)		65.4		147.7		14.2
Endesa Costanera (Argentina)		75.7		142.8		21.1
Emgesa (Colombia) (2)		26.9		2,028.4		363.9
Edegel (Peru)		62.5		776.6		95.9
Other Non-Electricity Business
Túnel El Melón (Chile)		100		22.3		6.5

(1) Includes Endesa Eco and San Isidro, which were merged into Celta in 2013.

(2) We hold 31.3% of Emgesa’s voting shares and, due to a transfer of rights from Enersis, we have the right to appoint the majority of the Board members, and we effectively control Emgesa.

Celta (Chile)

Celta was formed in 1995 to build and operate two thermoelectric plants in the SING: a coal-fired plant with an installed capacity of 158 MW and a gas/fuel oil power plant with 24 MW of installed capacity. On November 1, 2013, Endesa Eco (including San Isidro and Pangue) was merged into Celta. This merger was completed under the organizational simplification announced by Endesa Chile on February 29, 2012.

Pehuenche (Chile)

Pehuenche, a generation company connected to the SIC, owns three hydroelectric facilities south of Santiago in the hydrological basin of the Maule River, with a total installed capacity of 699 MW. The 570 MW Pehuenche plant began operations in 1991, the 89 MW Curillinque plant began operations in 1993, and the 40 MW Loma Alta plant began operations in 1997. Endesa Chile holds 92.7% of Pehuenche.

El Chocón (Argentina)

El Chocón is an electricity generation company, incorporated in Argentina, located between the Neuquén and Río Negro provinces, in the Comahue Basin in southern Argentina. It has two hydroelectric power stations with an aggregate installed capacity of 1,328 MW. A 30-year concession, which expires in 2023, was granted by the Argentine government to our subsidiary, Hidroinvest S.A., which bought 59.0% of the shares in July 1993 during the privatization process. Endesa Chile operates El Chocón for a fee pursuant to an operating agreement with a term equal to the duration of the concession.

Endesa Costanera (Argentina)

Endesa Costanera is a publicly held electricity generation company in Argentina, with 2,324 MW of total installed capacity in Buenos Aires, including six steam turbines with an aggregate capacity of 1,138 MW which burn oil and gas, and two natural gas combined-cycle facilities with a total capacity of 1,186 MW. Endesa Costanera was acquired from the Argentine government after the privatization of Servicios Eléctricos del Gran Buenos Aires S.A.

Emgesa (Colombia)

Emgesa has a total installed generating capacity of 2,925 MW, 85% of which corresponds to hydroelectric power plants and 15% to thermoelectric power plants. Empresa de Energía de Bogotá S.A. has a direct 51.5% equity

90

interest in Emgesa. Endesa Chile’s beneficial ownership in Emgesa is 26.9%; however, it has 31.3% of the voting rights, and due to a transfer of rights from Enersis, Endesa Chile has the right to appoint the majority of the Board members and, therefore, controls Emgesa.

Edegel (Peru)

Edegel, an electricity generation company, was acquired by Endesa Chile in 1995. It currently owns seven hydroelectric plants and two thermal plants, with a combined installed capacity of 1,540 MW. In October 2009, Endesa Chile purchased an additional 29.4% stake in Edegel from Generalima, S.A.C., a subsidiary of Enersis. Consequently, Endesa Chile increased its beneficial ownership in Edegel from 33.1% to 62.5%.

Edegel holds an 80% share of Chinango S.A.C., and Peruana de Energía S.A.A. (an unaffiliated entity) owns the remaining 20% share.

Túnel El Melón (Chile)

Túnel El Melón is a 2.5 kilometer two-lane highway tunnel, located between the provinces of Petorca and Quillota, Valparaíso Region, Chile. The tunnel operations will take place until the termination of the concession’s contractual period in June 2016.

Selected Associates and Jointly-Controlled Companies

Electrogas (Chile)

Electrogas was incorporated in 1996. This company offers natural gas transportation services to the Valparaíso Region in Chile, especially to the San Isidro and Nehuenco combined-cycle plants at Quillota. Endesa Chile has a 42.5% beneficial interest in this company. The other shareholders are Colbún S.A. and Empresa Nacional del Petróleo S.A. (“ENAP”) (both unaffiliated entities).

Cemsa (Argentina)

Cemsa’s principal activities are electricity and fuel oil trading. Cemsa has executed several agreements with Argentine electricity power stations to support its supply contracts. The power stations that provide Cemsa’s electricity supply contracts are: Endesa Costanera S.A., Central Dock Sud S.A., Centrales Térmicas del Noroeste S.A., and El Chocón. Endesa Chile has an indirect ownership interest of 45% in Cemsa, and its other shareholder is Enersis.

Endesa Brasil (Brazil)

In 2005, Endesa Brasil was formed to manage all Brazilian generation, transmission and distribution assets that Endesa Latinoamérica, a subsidiary of Endesa Spain, held together with Enersis, Endesa Chile and Chilectra. Endesa Brasil consolidates operations of two generation companies (Cachoeira Dourada and Endesa Fortaleza, both operated by us), the transmission company CIEN, as well as two distribution companies (Ampla and Coelce). Endesa Fortaleza is a combined-cycle power plant of 322 MW fueled by natural gas, with a capacity to generate one-third of the electricity requirements of the State of Ceará, a state with a population of 8.2 million people. Cachoeira Dourada is a hydro run of the river plant using the flows from the Paranaiba River, with ten generating units totaling 665 MW of installed capacity, located in the State of Goias. CIEN is a Brazilian transmission and trading company wholly owned by Endesa Brasil, transmits electricity through two owned transmission lines between Argentina and Brazil covering a distance of 500 kilometers, with a total interconnection capacity of 2,100 MW. Ampla is the second largest electricity distribution company in the State of Rio de Janeiro, Brazil, in terms of the number of customers and annual energy sales. Ampla is engaged mainly in the distribution of electricity to 66 municipalities of the State of Rio de Janeiro and serves 2.8 million customers in a concession area of 32,615 square kilometers. Coelce is the sole electricity distributor in the State of Ceará, in northeastern Brazil, and serves over 3.2 million customers within a concession area of 148,825 square kilometers. Endesa Chile has a beneficial interest of 37.1% in Endesa Brasil and accounts for this unconsolidated investment under the equity method.

91

GNL Quintero (Chile)

GNL Quintero was incorporated in March 2007. Endesa Chile has a 20% ownership interest, and the remaining interest is owned by British Gas (20%), ENAP (20%), Metrogas (20%) and Enagas (20%). This company operates a LNG regasification facility located in Quintero Bay whereby LNG is unloaded, stored and regasified.

This project was built by Chicago Bridge & Iron and currently has a regasification capacity of 9.6 million m3 per day and two 160,000 m3 LNG containment tanks.

HidroAysén (Chile)

HidroAysén was incorporated in March 2007. Endesa Chile has a 51% ownership interest and Colbún S.A. the remaining 49%. The company was created to develop and exploit a hydroelectric project located in the Aysén Region, in the southern region of Chile.

GasAtacama (Chile)

Endesa Chile has a 50% beneficial interest in GasAtacama, located in the northern region of Chile. GasAtacama has a four-unit combined cycle power plant of 780 MW and a gas pipeline that allows for the import of gas from Argentina. Since 2007, Southern Cross Latin America Private Equity Fund III, L.P. owns the remaining 50% beneficial interest.

Transquillota (Chile)

Transquillota was incorporated in June 1997, as part of an agreement between San Isidro and Colbún, for the joint development of a 220 kV transmission line for dispatching the energy produced and connecting San Isidro (which is now merged with Celta, an Endesa Chile subsidiary) and Nehuenco (a subsidiary of Colbún) plants to the Central Interconnected Electric System (SIC). The 220 kV transmission line is 8 kilometers long. The property is equally divided among Endesa Chile and Nehuenco. Endesa Chile’s economic interest is 50%.

For additional information on all of Endesa Chile’s subsidiaries and jointly-controlled companies, please refer to Appendix 1 of our Consolidated Financial Statements.

D. Property, Plant and Equipment.

In Chile, Endesa Chile owns 27 generation power plants. Endesa Chile also consolidates revenues from other non wholly-owned generation companies in Argentina, Colombia and Peru, which involve an additional 25 generation power plants.

A substantial portion of Endesa Chile’s cash flow and net income is derived from the sale of electricity produced by its electricity generation facilities. Significant damage to one or more of Endesa Chile’s main electricity generation facilities or interruption in the production of electricity, whether as a result of an earthquake, flood, volcanic activity or any other such cause, could have a material adverse effect on their operations. Endesa Chile insures all of its electricity generation facilities against damage due to earthquakes, fires, floods, other acts of god (but not for prolonged droughts, which are a force majeure risk not covered by insurance companies) and from damage due to third-party actions, based on the appraised value of the facilities as determined from time to time by an independent appraiser. Based on geological, hydrological and engineering studies, management believes that the risk of an event with a material adverse effect is remote. Claims under Endesa Chile’s insurance policies are subject to customary deductibles and other conditions. Endesa Chile also maintains business interruption insurance providing for coverage for failure of any of our facilities for a period of up to 24 months, including the deductible period.

The insurance coverage taken for non-Chilean property is approved by each company’s management, taking into account the quality of the insurance companies and the needs, conditions and risk evaluations of each generating facility, and is based on general corporate guidelines.

All insurance policies are purchased from reputable international insurers. We continuously monitor and meet with the insurance companies in order to obtain what we believe is the most commercially reasonable insurance coverage.

92

The following table identifies the power plants that we own, at the end of each year, and their basic characteristics:

			Installed capacity
Country/Company	Power Plant Name	Power Plant Type (1)	2013		2012		2011
			(in MW)
Chile
Endesa Chile
	Rapel	Reservoir		377		377		377
	Cipreses	Reservoir		106		106		106
	El Toro	Reservoir		450		450		450
	Los Molles	Pass-through		18		18		18
	Sauzal	Pass-through		77		77		77
	Sauzalito	Pass-through		12		12		12
	Isla	Pass-through		70		70		70
	Antuco	Pass-through		320		320		320
	Abanico	Pass-through		136		136		136
	Ralco	Reservoir		690		690		690
	Palmucho	Pass-through		34		34		34
	Total hydroelectric			2,290		2,290		2,290
	Bocamina (2)	Steam Turbine/Coal		478		478		128
	Diego de Almagro	Gas Turbine/ Diesel Oil		24		24		24
	Huasco	Gas Turbine/IFO 180 Oil		64		64		64
	Taltal	Gas Turbine/Natural Gas+Diesel Oil		245		245		245
	San Isidro 2	Combined Cycle /Natural Gas+Diesel Oil		399		399		399
	Quintero	Gas Turbine/Natural Gas+Diesel Oil		257		257		257
	Total thermal			1,467		1,467		1,117
	Total			3,757		3,757		3,407
Pehuenche
	Pehuenche	Reservoir		570		570		570
	Curillinque	Pass-through		89		89		89
	Loma Alta	Pass-through		40		40		40
	Total			699		699		699
Pangue (3)	Pangue	Reservoir		—		—		467
San Isidro (3) (4)
	San Isidro	Combined Cycle /Natural Gas+Diesel Oil		—		379		379
	Pangue	Reservoir		—		467		—
	Total			—		846		379
Endesa Eco (4)
	Canela	Wind Farm		—		18		18
	Canela II	Wind Farm		—		60		60
	Ojos de Agua	Pass-through		—		9		9
	Total			—		87		87
Celta (4)
	Tarapacá	Steam Turbine/Coal		158		158		158
	Tarapacá	Gas Turbine/Diesel Oil		24		24		24
	San Isidro	Combined Cycle /Natural Gas+Diesel Oil		379		—		—
	Pangue	Reservoir		467		—		—
	Canela	Wind Farm		18		—		—
	Canela II	Wind Farm		60		—		—
	Ojos de Agua	Pass-through		9		—		—
	Total			1,115		182		182
Total capacity in Chile (5)				5,571		5,571		5,221

(1) “Reservoir” and “Pass-through” refer to hydroelectric plants that use the force of a dam or a river, respectively, to move the turbines which generate electricity. “Steam” refers to thermal power plants fueled with natural gas, coal, diesel or fuel oil to produce steam that moves the turbines. “Gas Turbine” (“GT”) or “Open Cycle” refers to thermal power that uses either diesel or natural gas to produce gas that moves the turbines. “Combined Cycle” refers to a thermal power plant fueled with natural gas, diesel oil, or fuel oil to generate gas that first moves a turbine and then recovers the gas that escapes from that process to generate steam to move a second turbine.

(2) On October 28, 2012, Bocamina II (350 MW) commenced commercial operation.

(3) Empresa Eléctrica Pangue S.A. was merged with San Isidro on May 2, 2012. San Isidro was the surviving company.

(4) San Isidro S.A. merged with Endesa Eco S.A. on September 1, 2013, and the latter remained the surviving company. Subsequently, Endesa Eco S.A. merged with Celta S.A. on November 1, 2013, and Celta S.A. remained as the surviving company.

(5) For comparative purposes we have subtracted 50% of the capacity of our jointly-controlled company, GasAtacama (390 MW for 2011 and 2012 figures) since we account for it under the equity method as of January 1, 2013 pursuant to IFRS 11.

93

			Installed Capacity
Country/Company	Power Plant Name	Power Plant Type	2013		2012		2011
			(in MW)
Argentina
Endesa Costanera	Endesa Costanera Steam Turbine	Steam Turbine/Natural Gas+Fuel Oil		1,138		1,138		1,138
	Endesa Costanera Combined Cycle II	Combined Cycle/Natural Gas+Diesel Oil		859		859		859
	Central Buenos Aires Combined Cycle I	Combined Cycle/Natural Gas		327		327		327
	Total			2,324		2,324		2,324
El Chocón	Chocón	Reservoir		1,200		1,200		1,200
	Arroyito	Pass-through		128		128		128
	Total			1,328		1,328		1,328
Total capacity in Argentina				3,652		3,652		3,652
Colombia
Emgesa	Guavio	Reservoir		1,213		1,213		1,213
	Paraíso	Reservoir		276		276		276
	La Guaca	Pass-through		325		325		325
	Termozipa	Steam Turbine/Coal		236		236		236
	Cartagena	Steam Turbine/ Natural Gas		208		208		208
	Minor plants (1)	Pass-through		77		116		116
	Betania	Reservoir		541		541		541
	Dario Valencia (2)	Pass-through		50		—		—
Total capacity in Colombia				2,926		2,914		2,914
Peru
Edegel	Huinco	Pass-through		247		247		247
	Matucana (3)	Pass-through		133		129		129
	Callahuanca	Pass-through		80		80		80
	Moyopampa	Pass-through		66		66		66
	Huampani	Pass-through		30		30		30
	Santa Rosa (4) (5)	Gas Turbine/Diesel Oil		305		426		429
	Ventanilla (4)	Combined Cycle/Natural Gas		485		485		493
	Total			1,346		1,463		1,474
Chinango	Yanango	Pass-through		43		43		43
	Chimay	Pass-through		151		151		151
	Total			194		194		194
Total capacity in Peru				1,540		1,657		1,668
Consolidated capacity				13,689		13,795		13,455

(1) Minor plants have an aggregate capacity of 77 MW. As of December 31, 2013 Emgesa owned and operated four minor plants: Charquito, El Limonar, Tequendama and San Antonio. In October 2013, the La Tinta (19.5 MW) and La Junca (19.5 MW) were decommissioned.

(2) In November 2013, the Dario Valencia (50 MW) power plant began commercial operations.

(3) In June 2013, the Matucana power plant increased its installed capacity by 4 MW.

(4) The installed capacity of this power plant in 2012 was the result of tests made by the COES.

(5) In October 2013, unit TG 07 (121 MW) of the Santa Rosa power plant was decommissioned.

94

As of December 31, 2013, Endesa Chile received the ISO 14,001 certification for 97.4% of its installed capacity in South America, which included 51 out of 52 generation facilities that produced 95.9% of the total annual generation in accordance with the ISO 14,001 standard.

Projects Under Construction

Colombia. El Quimbo Hydroelectric Project

El Quimbo hydroelectric project is located in the province of Huila, on the Magdalena River, upstream of the Betania power plant. Its installed capacity will be 400 MW through two generation units. The construction began in December 2010, and completion is expected by July 2015.

In 2008, as a result of the awarding process, Emgesa assumed a firm energy obligation for El Quimbo starting in December 2014 and increasing annually from 1.1 GWh/day during the first year up to 4.5 GWh/day from December 2017 to November 2034. In 2009, the Colombian Ministry of the Environment approved the environmental license and granted building permission.

The principal contracts, corresponding to the civil works and the manufacturing, supply and assembly of the equipment, were awarded to the Impregilo-OHL consortium and the Alstom - Schrader Camargo consortium.

The main advances in construction in 2013 were:

— In February 2013 we finished phase one of the dam fillings.

— In June 2013 we started activities associated with the “Construction of Substitutes for Roads and Bridges” contract.

— In October 2013 the beam tracks for assembling the first bridge crane were in place.

In accordance with the equipment contract, we received the first turbine parts for the first unit at the site on December 3, 2012. In April 2013, we received the predistributor of unit 1, and in August, we received the predistributor of unit 2.

This project is being financed primarily with external sources, through local and international bonds. The estimated total investment is Ch$ 699,179 million of which Ch$ 342,696 million was accrued as of December 31, 2013.

Colombia. Salaco Hydroelectric Project

The Salaco project consists of adding 145 MW of capacity to the current hydro cascade of the Bogotá River, through major maintenance and modernization of six generating units that have been out of service. The units to be refurbished are located in three generating stations: Salto II (increasing capacity from 19.4 MW to 35.0 MW), Laguneta (increasing capacity from 18.0 MW to 36.0 MW) and Dario Valencia (increasing capacity from 38.8 MW to 150.0 MW), all of which were previously being marginally dispatched as small hydro plants. The increase in capacity will generate an additional 482 GWh per year, approximately.

Renovation work began in February 2013 and is expected to be completed in 2015. On November 6, 2013, Dario Valencia’s HPP unit 2 (50.0 MW) resumed commercial operation.

This project is being financed with internally generated funds. The total estimated investment is Ch$ 22,925 million of which Ch$ 11,332 million was accrued as of December 31, 2013.

95

Projects Under Development

The total investment of each project described below was translated into Chilean pesos at the exchange rate of Ch$ 524.61 per U.S. dollar, the Observed Exchange Rate for December 31, 2013. Budgeted amounts include connecting lines that could eventually be owned by third parties and paid as tolls, unless otherwise indicated

We continuously analyze different growth opportunities in the countries in which we participate. Thus, the expected start-up for each project is continuously assessed and will be defined based on the commercial opportunities and our financing capacity to fund these projects. The most relevant projects in the pipeline are as follows:

Chile. Los Cóndores Hydroelectric Project

The Los Cóndores project will be located in the Maule region. It consists of a 150 MW run-of-river hydroelectric power plant, which will use water from the Maule Lake reservoir through a 12 kilometer penstock. The power plant will be connected to the SIC at the Ancoa substation (220 kV) through an 87 kilometer transmission line.

The feasibility study for the project has been completed. It considers the use of TBM technology (Tunnel Boring Machine), which is more efficient, has higher safety standards and a lower environmental impact for the construction of the tunnel connecting the project to the Maule Lake. The environmental permit for this generation power plant was obtained in 2011. Basic engineering was completed at the end of 2011.

The transmission line project received its environmental qualification resolution in May 2012. In May 2013, some administrative claims were solved and the transmission project obtained its final approval. In November 2013, Endesa Chile obtained a hydraulic work permit, authorizing the river course change for the construction of the plant.

Construction is expected to start in 2014, and completion is estimated for 2018. This project is being financed primarily with internally generated funds. The estimated total investment is Ch$ 394,960 million, of which Ch$ 18,972 million was accrued as of December 31, 2013.

Chile. Neltume Hydroelectric Project

The Neltume project is located in Los Ríos region, on the upper part of the Valdivia River basin. The Neltume project consists of a 490 MW installed capacity run-of-river hydro power plant, that will be connected to the SIC through a 42 kilometer 220 kV transmission line from Neltume to Pullinque.

The Neltume power generation project has been under the environmental assessment process since December 2010. During 2011, basic engineering studies began and supplementary studies for environmental process were carried out. During 2012, basic engineering studies were completed.

During 2013, we prepared and submitted supplemental information (Addenda Number 4) to the environmental authority, both for the plant and for the transmission line, in response to a fourth consolidated observations report (ICSARA Number 4) issued by the Environmental Evaluation Service (“SEA”). During the second half of 2013, the SEA initiated the indigenous consultation process to the communities in the area, so as to know their position about the project and comply with Convention Number 169, “Indigenous and Tribal Peoples Convention” of the International Labor Organization (“ILO”).

Construction is expected to start during 2016 and completion is expected for 2021. This project is being financed primarily with internally generated funds. The estimated total investment is Ch$ 456,905 million, of which Ch$ 23,590 million was accrued as of December 31, 2013.

96

Chile. HidroAysén Hydroelectric Project

The HidroAysén hydroelectric project consists of five hydroelectric power plants, with an aggregated installed capacity of 2,750 MW, two of which are in the Baker River (660 MW and 360 MW) and the other three are in the Pascua River (770 MW, 500 MW and 460 MW). The transmission project will be defined depending on the substation where the complex will be connected to the SIC.

On May 9, 2011, the environmental authority approved the Environmental Impact Assessment Study presented for the HidroAysén project, with some environmental observations. However, opponents to the project presented 34 claims and HidroAysén presented one claim, all requesting the review of certain requirements established by the environmental authority. In January 2014, during president Piñera’s government, the majority of these claims were resolved by the Council of Ministers, consisting of six public cabinet members and presided over by the Minister of the Environment. Although the Council should have taken 60 business days to resolve the matters, it took over two years, and it requested additional studies in order to resolve the pending claims.

In March 2014, President Michelle Bachelet took office, and during this month a new Council of Ministers was convened, and it repealed the decisions taken in January 2014. The new Council stated it would study the issue again and resolve all claims within the 60 business day timeframe established by law.

As of May 2011 (the last project budget review), the estimated investment for Endesa Chile’s 51% participation in HidroAysén had been in the range of US$ 2,700 to US$ 3,200 million. However, the Company is not able to estimate future capital expenditures or an expected start up date because the final Council of Ministers resolution is still pending. The project is expected to be financed through internally generated funds and, if needed, external financing. As of December 31, 2013 Ch$ 83,223 million has been accrued.

Chile. Punta Alcalde Power Plant

The project consists of the construction of two 370 MW coal-fired thermoelectric power plants located in the Atacama region, totaling 740 MW of installed capacity. The plant will be connected to the SIC at the Maitencillo substation (220 kV) through a 44 kilometer transmission line.

In 2009, we completed and submitted an Environmental Impact Study (EIA) of the generation project to the SEA, which initiated the required environmental assessment process. In 2012, the regional environmental authority rejected the project. We appealed to the Council of Ministers. Even though it unanimously reversed the decision of the environmental authority, the Court of Appeals accepted four injunctions against us in early 2013. Ultimately, the Supreme Court ruled in favor of the project in January 2014.

In June 2013, we completed and submitted an Environmental Impact Study (EIA) of the transmission line project to the SEA, which initiated the required environmental assessment process.

Construction is expected to start during 2016 and completion is expected for 2020. This project is being financed primarily with internally generated funds. The estimated total investment is Ch$ 837,318 million, of which Ch$ 14,491 million was accrued as of December 31, 2013.

Chile. Renaico Wind Farm

This project is located in the ninth region of Chile, in the town of Renaico. It consists of 44 wind generators of 2 MW each, with a bushing height of 95 meters and a total generation capacity of 255 GWh per year. The energy produced will be injected into the SIC by two transmission lines: (i) the main line, which will consist of a 27 kilometer, 220 kV simple-circuit line to Bureo substation and (ii) a secondary line, which will consist of a 66 kV line that will tap into Renaico-Angol transmission line.

97

During 2012, the project’s basic engineering was finished and tendering processes were initiated for the project’s main contracts. The environmental qualification resolutions for the wind farm and the main transmission line were also obtained. During 2013, the tendering process the supply of equipment, internal connections, transmission line, substation and the transforming equipment was carried out.

After completing the tendering process and making the investment decision, construction will be initiated and is expected to last 18 months. This project is being financed primarily with internally generated funds. The estimated total investment is Ch$ 118,118 million, of which Ch$ 3,007 million was accrued as of December 31, 2013.

Chile. Taltal Combined Cycle

The project consists of the construction of a steam turbine for converting the existing Taltal gas-fired open cycle plant to a combined cycle plant, by adding a turbine in the vapor phase, which would use the steam generated by the gas turbines’ heat emissions to produce energy. Currently, the existing Taltal power plant has two gas turbines of 123 MW each. The extra power to be added by the steam turbine would be approximately 120 MW and therefore, the Taltal power plant would achieve a total capacity of 366 MW and an efficiency increase.

In December 2013, an optimized Environmental Impact Statement was submitted for approval to the Environmental Evaluation Service. The main optimization relates to a change in the cooling system, which was originally designed as a wet system (using sea water) and is being modified to a dry cooling system. The energy produced will be supplied to the SIC through the existing 220 kV double circuit Diego de Almagro – Paposo transmission line.

Construction is expected to begin in 2015 and is expected to be completed in 2017. This project is being financed primarily with internally generated funds. The estimated total investment is Ch$ 131,250 million, of which Ch$ 1,486 million was accrued as of December 31, 2013.

Peru. Curibamba Hydroelectric Project

Curibamba consists of a 188 MW run-of-river power plant and a 134 kilometer transmission line that will connect it to the national interconnected system at Pachachaca substation (220 kV). This power plant will be located 385 kilometers northeast of Lima, upstream of Chimay hydroelectric power plant (province of Junín), and will use the waters of the Comas and Uchubamba rivers (86 m³ per second) through an 8.1 kilometer penstock.

During 2013, the EIA study for the first section of the transmission line (Curibamba – Oroya Nueva, 112 kilometers) was approved, while the EIA study for the second section (Oroya Nueva – Pachachaca, 22 kilometers) is currently in its final stage of assessment. In addition, archaeological permits were successfully obtained for the transmission line and the electrical connection study that was submitted in 2012 was granted COES approval. All documents required to obtain the electricity concession were submitted to the authority in December 2013.

The bidding process for the project’s main contracts (construction, equipment supply and electrical interconnection) is expected to take place during 2014, and construction is expected to begin during the first quarter of 2015, with completion scheduled for 2019. This project is being financed primarily with internally generated funds, with an estimated total investment of Ch$ 236,075 million, of which Ch$ 10,755 million has been accrued as of December 31, 2013.

Major Encumbrances

Endesa Costanera’s supplier debt with Mitsubishi Corporation corresponds to the remaining payments on equipment purchased from the Mitsubishi. The value of the assets pledged to secure this debt was Ch$ 24 billion as of December 31, 2013. Additionally, Endesa Costanera has granted liens in favor of Credit Suisse in guarantee of a loan, which were valued at Ch$ 11 billion as of December 31, 2013.

98

Climate Change

In recent years, Chile and the region has seen growing development related to non-conventional renewable energy and strategies to combat climate change. This has led both the public and private sectors to adopt strategies to comply with the new environmental requirements, as evidenced by legal obligations at the local level, commitments assumed by countries at the international level, and the demanding requirements of the international markets.

Non-conventional renewable energies (“NCRE”) provide energy with minimal environmental impact and without CO2 emissions. They are therefore considered as technological options that strengthen sustainable energy development as they supplement the production of traditional generators.

During 2013, Endesa Chile and its subsidiaries held working meetings with different public, academic, and private entities. This was done in order to learn and share experiences concerning the technical and regulatory developments in connection with NCRE, discuss climate change at both the local and international levels, analyze and establish strategic alliances, develop social and private projects, and strengthen our leadership position in Chile.

The Canela wind farm (18 MW, in operation since late 2007) and Canela II wind farm (60 MW, in operation since late 2009) and the Callahuanca hidroelectric power station (80.2 MW installed capacity, in operation since 1938) are the NCRE facilities owned by Enersis, which have contributed with clean and renewable energy to their respective national grids. Regarding the development of CO2 emission reduction mechanisms, during 2013, the projects in the Clean Development Mechanism (“CDM”) circuit were as follows:

Canela Wind Farm: On April 3, 2009, the United Nations Framework Convention on Climate Change (“UNFCCC”) approved the registration of the Canela project as a CDM project, which recognizes that this wind farm may verify and trade the greenhouse gas emissions that it will avoid during its useful life. During 2013, we continued the CDM verification procedure in order to meet the requirements of the UNFCCC. Since its registration under the UNFCCC as a CDM project, the installation has avoided approximately 127,171 tons of CO2 emissions, which can be traded in the carbon markets once they are verified.

On August 8, 2013, the Canela wind farm achieved registration under the Gold Standard (“GS”). This allows Enersis to apply for the GS verification process, which would provide GS Voluntary Emission Reductions (“VER”). This is one of the most recognized carbon standards in the market.

Canela II Wind Farm: On August 12, 2012, the UNFCCC approved the registration of the Canela II project as a CDM project, which recognizes that this wind farm may verify and trade the greenhouse gas emissions that it will avoid during its useful life. Since its registration under the UNFCCC as a CDM project, the Canela II wind farm has avoided approximately 121,485 tons of CO2 emissions, which can be traded in the carbon markets once they are verified.

Ventanilla Conversion from Single-cycle to Combined-cycle Power Generation Project: On June 20, 2011, the United Nations Framework Convention on Climate Change (“UNFCCC”) approved the registration of the project as a CDM, which recognizes that it may verify and trade the greenhouse gas emissions that it will be avoided during it useful life. During 2013, we continued the CDM verification procedure in order to meet the requirements of the UNFCCC.

On October 31, 2013 Ventanilla Conversion from Single-cycle to Combined-cycle Power Generation Project got the registration/verification under the VER + standard. A total amount of 2,496,494 tons of CO2 were avoided during the period of October 19, 2006 through June 19, 2011 and as a result, Edegel S.A.A. got a total amount of 2,496,494 pre CDM VERs (2).

The Rehabilitation of the Callahuanca hydroelectric power station project: On January 4, 2008, the United Nations Framework Convention on Climate Change (“UNFCCC”) approved the registration of the project as a CDM, which recognizes that it may verify and trade the greenhouse gas emissions that it will be avoided during it useful life. During 2013, we continued the CDM verification procedure in order to meet the requirements of the UNFCCC.

99

On July 7, 2008 the Rehabilitation of the Callahuanca hydroelectric power station project got the registration/verification under the VER + standard. A total amount of 19 951 tons of CO2 were avoided during the year 2007 and as a result, Edegel S.A.A. got a total amount of 19 951 pre CDMVERs (2).

Detail of CDM Projects Processed in 2013 by Endesa Chile

CDM project	Company/country	Position as of December 31, 2013	Emission  factor (tons CO2e/MWh)	Approximate     emissions avoided     (tons CO2e/year)
Canela Wind Farm	Central Eólica Canela S.A. (Chile)	Registered with the Executive Authority of the UNFCCC since April 2009. CDM procedure implemented.	0.5713	27,251 (CER not yet verified) (1)
Canela Wind Farm	Central Eólica Canela S.A. (Chile)	Registered with the Gold Standard (Voluntary Standard) since August 2013.	0.5713	27,251 (VER not yet verified) (2)
Canela II Wind Farm	Central Eólica Canela S.A. (Chile)	Registered with the Executive Authority of the UNFCCC since August 2012. CDM procedure implemented.	0.6541	37,000 (CER not yet verified) (1)
Ventanilla Conversion from Single-cycle to Combined-cycle Power Generation Project	EDEGEL S.A.A. (Peru)	Registered with the Executive Authority of the UNFCCC since 2011. CDM procedure implemented.	0.454	407,296
Ventanilla Conversion from Single-cycle to Combined-cycle Power Generation Project	EDEGEL S.A.A. (Peru)	Registered with the VER + Standard (Voluntary Standard) since October 2013.	0.454	407,296
Rehabilitation of the Callahuanca hydroelectric power station	EDEGEL S.A.A. (Peru)	Registered with the Executive Authority of the UNFCCC since 2008. CDM procedure implemented.	0.449	18,189
Rehabilitation of the Callahuanca hydroelectric power station	EDEGEL S.A.A. (Peru)	Registered with the VER + Standard (Voluntary Standard) since July 2008.	0.449	18,189

(1) CER: Certified Emission Reductions.

(2) VER: Voluntary Emission Reductions.

In compliance with our group climate change guidelines, Endesa Chile, together with Endesa Spain, has secured the certification of their carbon footprint for a second time. This means that the independent certification authority of the Spanish Association of Standards and Certification (Asociación Española de Normalización y Certificación) (“AENOR”) has acknowledged the validity of the methodology. Acknowledgement by AENOR includes verification of the group’s “Endesa carbon footprint 2009-2010-2011” and “Endesa carbon footprint 2012” reports, which describe the work carried out by the group to calculate its carbon footprint and the results obtained for those years.

A carbon footprint is the sum of all greenhouse gases (“GHGs”) produced by a company in the course of its business activity. Endesa Chile, together with Enersis and as part of Endesa Spain’s policies, is striving to reduce its emissions due to its commitment to combat climate change. The first step involves measuring our carbon footprint.

100

As part of the process of calculating our carbon footprint, we plan to obtain a GHG inventory including direct emissions, associated with activities controlled by Enersis. We also plan to obtain a GHG inventory of indirect emissions, which are not generated through sources controlled by us, but are consequences of our activities.

The tools used to calculate emissions include audits and checks at all of our facilities. This enables Endesa Chile to monitor its carbon footprint throughout the entire electricity supply chain. Calculating the carbon footprint also enables us to identify phases of our activities with the greatest potential to boost energy efficiency and reduce emissions.

Item 4A.  Unresolved Staff Comments

None.

Item 5.    Operating and Financial Review and Prospects

A. Operating Results.

General

The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto, included in Item 18 in this Report, and “Selected Financial Data,” included in Item 3 herein. Our audited consolidated financial statements as of December 31, 2013 and 2012 and for the three years ended December 31, 2013 have been prepared in accordance with IFRS, as issued by the IASB.

1. Discussion of Main Factors Affecting Operating Results and Financial Condition of the Company

We own and operate electricity generation companies in Chile, Argentina, Colombia and Peru. We also have equity investments in Endesa Brasil, which owns generation companies in Brazil that we operate, as well as companies in the transmission and distribution businesses. Our revenues, cash flow and equity income primarily come from the electricity generation business of Endesa Chile and of our subsidiaries and associates, which operate in these five countries. For the years ended December 31, 2013, 2012 and 2011, other operating revenues, related primarily to a tunnel concession, represented 0.5%, 0.3% and 0.8%, respectively, of consolidated total revenues for each year.

Factors such as (i) hydrological conditions, (ii) fuel prices, (iii) regulatory developments, (iv) exceptional actions adopted by governmental authorities and (v) changes to the economic conditions in countries in which we operate may materially affect our financial results. In addition, our results from operations and financial condition are affected by variations in the exchange rates between the Chilean peso and the currencies of the other four countries in which we operate. These exchange variations may materially impact in the consolidation of the results of our companies outside Chile. Lastly, we have certain critical accounting policies that affect our consolidated operating results.

Our diversification strategy aims to balance the impact of significant changes in one country with opposing changes in other countries, reducing the impact on our consolidated figures. The impact of these factors on us, for the years covered by this Report, is discussed below.

Until December 31, 2012, jointly-controlled companies were consolidated using the proportionate consolidation method. Commencing January 1, 2013, we began recording these jointly controlled companies using the equity method, as required by IFRS 11, “Joint Arrangements”. This change affected our accounting for Centrales Hidroeléctricas de Aysén S.A., Inversiones GasAtacama Holding Ltda. and their subsidiaries and Transmisora Eléctrica de Quillota Ltda. Our audited consolidated financial statements as of and for the years ended December 31, 2012 and 2011 were restated to give retrospective effect to the application of IFRS 11. These changes do not have any effect on equity or net income, in both cases, attributable to the shareholders of Endesa Chile. Our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 are presented in the form in which they were originally prepared in accordance with IFRS, as issued by the IASB, and do not reflect the application of IFRS 11. For detailed information, refer to Note 2.2 to our Consolidated Financial Statements and Annex VII.

101

a. Hydrological Conditions

A substantial part of our generation capacity depends on the hydrological conditions prevailing in the countries in which we operate, although only extreme hydrological conditions would generally materially affect the Company’s operating results and financial condition. In terms of installed capacity, as of December 31, 2013 (8,025 MW), 2012 (8,014 MW) and 2011 (8,010 MW), 58.6%, 58.0% and 58.0% of Endesa Chile’s consolidated installed capacity, respectively, was hydroelectric. (See “Item 4. Information on the Company — A. History and Development of the Company”).

Hydroelectric generation was 28,465 GWh in 2013, 30,732 GWh in 2012 and 30,555 GWh in 2011. Our 2013 generation was lower than in previous years due to increasingly challenging hydrological conditions in Chile, characterized by low rainfalls and a poor snowmelt. These drought conditions have prevailed since 2010. Because of this lack of water, hydroelectric generation in Chile had to be substituted with thermal generation and energy purchases on the spot market, both of which incur higher costs, in order to meet our obligations under contracts with both regulated and unregulated customers.

During 2013, our Bocamina II facilities were able to substitute most of the energy shortfall which improved margins compared to 2012. As a result of this situation, Chilean operating income increased by 58.5% to Ch$ 272 billion in 2013 from Ch$ 171 billion in 2012. Consolidated operating income increased by 27.8% to Ch$ 783 billion in 2013 and Ch$ 612 billion in 2012.

Our thermal generators burn natural gas, LNG, coal or diesel. We can offset the effect of poor hydrological conditions (reservoir levels, rain and snow) with thermal generation and electricity purchases. Our thermal installed capacity and the ability to purchase electricity from other generators allow us to increase thermal generation and/or purchase electricity from competitors to meet our commitments. In addition, given the industry structure and the percentage of hydroelectric generation capacity in the countries in which we operate, when hydrological conditions are poor, electricity prices generally increase. Under certain circumstances, poor hydrological conditions can potentially lead to higher revenues and sometimes, higher operating income.

Operating costs in connection with thermal generation and energy purchases are higher than the variable cost of hydroelectric generation in normal hydrological conditions. The cost of thermal generation does not depend on hydrology, but instead on global commodity prices for natural gas coal, LNG and diesel. However, the cost of electricity purchases in the spot market does depend on hydrology and commodity prices.

The impact of low hydrology on our operating results depends on the resulting effects on electricity prices in the market, the severity of the impact of hydrological conditions on our hydroelectric generation, our cost of thermal generation and the need for energy purchases. The effect of poor hydrological conditions on market prices may increase or decrease our operating margin, depending on the conditions of all relevant market factors. In recent years, the addition of additional thermal capacity has more than offset the lower hydrology, resulting in increased operating margins.

For additional information on the effects of hydrological conditions on our operating results, see “Item 3. Key Information — D. Risk Factors. Since our generation business depends heavily on hydrological conditions, drought conditions may adversely affect our profitability.”

b. Selective Regulatory Developments

The regulatory framework governing our business in the five countries in which we operate has a material effect on our results of operations. In particular, regulators set generation tariffs taking into consideration factors such as fuel costs, reservoir levels, exchange rates, future investments in installed capacity and demand growth, all of which are intended to allow our companies to earn a regulated level of return on investment and guarantee service quality and reliability. The earnings of our electricity subsidiaries are determined to a large degree by government regulators, mainly through the tariff setting process.

102

For additional information relating to the regulatory frameworks in the countries where we operate, see “Item 4. Information on the Company — B. Business Overview — Electricity Industry Regulatory Framework.”

In Argentina, on March 26, 2013, the Argentine Secretariat for Energy published Resolution 95/2013, which set forth a non-recurring regulated remuneration schedule for power generation activity beginning retroactively as of February 2013. For additional information relating to the regulatory frameworks in the countries where we operate, see “Item 4. Information on the Company — B. Business Overview — Electricity Industry Regulatory Framework —Argentina— Industry Overview— Industry Structure.”

c. Economic Conditions

Macroeconomic conditions, such as changes in employment levels, gross domestic product and inflation or deflation in the countries in which we operate may have a significant effect on our operating results. When a country experiences sustained economic growth, consumption of electricity by industrial and individual consumers increases. Other macroeconomic factors, such as the variation of a local currency against the U.S. dollar may impact our operating results, as well as our assets and liabilities, depending on the percentage denominated in U.S. dollars. For example, a devaluation of local currencies against the U.S. dollar increases the cost of capital expenditure plans. For additional information, see “Item 3. Key Information — D. Risk Factors — Foreign exchange risks may adversely affect our results and the U.S. dollar value of dividends payable to ADS holders.” and “— South American economic fluctuations are likely to affect our results from operations and financial condition, as well as the value of our securities.”

Economic Growth and Electricity Demand

Overall electricity demand increased during 2013, primarily due to favorable economic conditions in most of the countries in which we operate. The GDP and electricity demand growth rate for the years 2013, 2012 and 2011 are included in the following table:

	2013 (estimated)				2012				2011
	GDP     Growth		Electricity     Demand Growth		GDP Growth		Electricity     Demand Growth		GDP Growth		Electricity     Demand Growth
	(in %)
Chile (1)		4.4		3.5		5.6		5.2		5.8		6.0
Argentina		3.5		3.2		1.9		4.2		8.9		5.5
Brazil		2.5		2.5		0.9		4.5		2.7		3.4
Colombia		3.7		2.6		4.0		3.8		6.6		1.7
Peru		5.4		5.9		6.3		5.9		6.9		7.5

Sources: GDP growth data was obtained from the World Economic Outlook (October 2013) of the International Monetary Fund and corresponds to real growth for 2012 and 2011, and an estimate for 2013. Electricity demand growth data was obtained from sales reported by the CDEC to the CNE for Chile, from electricity demand reported by CAMMESA for Argentina, from total demand of the NIS reported by the XM for Colombia, from energy charges reported by the ONS for Brazil and from monthly reports of tariffs and the electricity market reported by the Osinergmin for Peru.

(1) Electricity demand growth includes growth in the SIC and the SING.

Local Currency Exchange Rate

Variations in the parity of the U.S. dollar and the local currency in each of the countries in which we have operations may have an impact on our operating results and overall financial position. The impact will depend on the level at which tariffs are pegged to the U.S. dollar, U.S. dollar-denominated assets and liabilities and also the translation of statements of comprehensive income of our foreign subsidiaries for consolidation purposes to the presentation currency, which is the Chilean peso.

103

As of December 31, 2013, Endesa Chile had total consolidated indebtedness of the equivalent of Ch$ 1,894 billion, of which 33.6% was denominated in U.S. dollars, 47.2% in Colombian pesos, 16.2% denominated in Chilean pesos, 1.7% in Argentine pesos, and 1.2% in soles.

The following table sets forth the closing and average local currencies per U.S. dollar exchange rates for the periods indicated.

	Local currency U.S. dollar exchange rates
	2013				2012				2011
	Average		Year End		Average		Year End		Average		Year End
Chile (Chilean pesos per U.S. dollar)		495.18		524.61		486.59		479.96		483.57		519.20
Argentina (Argentine pesos per U.S. dollar)		5.48		6.52		4.55		4.92		4.13		4.30
Brazil (reais per U.S. dollar)		2.16		2.34		1.95		2.04		1.67		1.88
Colombia (Colombian pesos per U.S. dollar)		1,870		1,927		1,798		1,768		1,847		1,943
Peru (soles per U.S. dollar)		2.70		2.80		2.64		2.55		2.75		2.70

Sources: Central banks of each country.

For the year ended December 31, 2013, our revenues were Ch$ 2.027.9 or US$ 4.1billion, of which 48.0% was generated by operations in Chile, 31.5% in Colombia, 14.0% in Peru and 6.5% in Argentina.

d. Critical Accounting Policies

Critical accounting policies are defined as those that reflect significant judgments and uncertainties, which would potentially result in materially different results under different assumptions and conditions. We believe that our critical accounting policies are limited to those described below with reference to the preparation of our financial statements under IFRS. For further detail of the accounting policies and the methods used in the preparation of the financial statements, see Notes 2 and 3 to our Consolidated Financial Statements.

Impairment of Long-Lived Assets

During the period, and principally at period end, we evaluate whether there is any indication that an asset has been impaired. Should any such indication exist, we estimate the recoverable amount of that asset to determine, where appropriate, the amount of impairment. In the case of identifiable assets that do not generate cash flows independently, we estimate the recoverability of the cash generating unit to which the asset belongs, which is understood to be the smallest identifiable group of assets that generates independent cash inflows.

Notwithstanding the preceding paragraph, in the case of cash generating units to which goodwill or intangible assets with an indefinite useful life have been allocated, a recoverability analysis is performed routinely at each period end.

The recoverable amount is the greater between the fair value less the cost needed to sell and the value in use, which is defined as the present value of the estimated future cash flows. In order to calculate the recoverable value of property, plant and equipment, goodwill and intangible assets, we use value in use criteria in nearly all cases.

To estimate the value in use, we prepare future pre-tax cash flow projections based on the most recent budgets available. These budgets incorporate management’s best estimates of cash generating units, revenues and costs using sector projections, past experience and future expectations.

104

In general, these projections cover the next ten years, estimating cash flows for subsequent years by applying reasonable growth rates, between 2.2% and 9.0%, which in no case are increasing nor exceed the average long term growth rates for the particular sector and country.

These cash flows are discounted at a given pre-tax rate in order to calculate their present value. This rate reflects the cost of capital of the business and the geographical area in which the business is conducted. The discount rate is calculated taking into account the current time value of money and the risk premiums generally used by market participants for the specific business activity and the country involved.

The pre tax nominal discount rates applied in 2013, 2012 and 2011 are as follows:

		Year ended December 31,
		2013				2012				2011
Country	Currency	Minimum		Maximum		Minimum		Maximum		Minimum		Maximum
Chile	Chilean peso		8.6%		16.3%		8.4%		14.6%		9.2%		10.1%
Argentina	Argentine peso		42.0%		44.4%		26.0%		29.0%		23.0%		26.0%
Brazil	Real		9.0%		18.8%		9.5%		18.0%		9.5%		11.6%
Colombia	Colombian peso		14.2%		14.2%		14.5%		14.5%		10.9%		10.9%
Peru	Nuevo sol		11.8%		12.3%		12.5%		12.5%		9.3%		9.3%

If the recoverable amount is less than the net carrying amount of the asset, the corresponding provision for impairment loss is recorded for the difference, and charged to “Reversal of impairment loss (impairment loss) recognized in profit or loss” in the consolidated statement of comprehensive income.

Impairment losses recognized for an asset in prior periods are reversed when its estimated recoverable amount changes, increasing the asset’s value with a credit to earnings, limited to the asset’s carrying amount if no adjustment had occurred. In the case of goodwill, adjustments that would have been made are not reversible.

Litigation and Contingencies

We are currently involved in certain legal and tax proceedings. As discussed in Note 20 to our Consolidated Financial Statements as of December 31, 2013, we have estimated the probable outflows for resources of resolving these claims to be Ch$ 9.8 billion. We have reached this estimate after consulting our legal and tax advisors who are carrying out our defense in these matters and an analysis of potential results, assuming a combination of litigation and settlement strategies.

Hedge Revenues Directly Linked to the U.S. Dollar

We have established a policy to hedge the portion of our revenues directly linked to the U.S. dollar by obtaining financing in this currency. Exchange differences related to this debt, as they are cash flow hedge transactions, are charged, net of taxes, to an equity reserve account and recorded as income during the period in which the hedged cash flows are realized. This term has been estimated at ten years.

This policy reflects a detailed analysis of our future U.S. dollar revenue streams. Such analysis may change in the future due to new electricity regulations limiting the amount of revenues tied to the U.S. dollar.

Pension and Post-Employment Benefits Liabilities

We have various defined benefits plans for our employees. These plans pay benefits to employees at retirement and use formulas based on years of service and the compensation of the participants. We also offer certain additional benefits for some retired employees in particular.

The liabilities shown for the pensions and post-employment benefits reflect our best estimate of the future cost of meeting our obligations under these plans. The accounting applied to these defined benefit plans involves actuarial calculations which contain key assumptions that include employee turnover, life expectancy and retirement

105

ages, discount rates, the future level of compensation and benefits, the claims rate under medical plans, and future medical costs. These assumptions change as economic and market conditions vary and any change in any of these assumptions could have a material effect on the reported results from operations.

The effect of an increase of one percentage point in the discount rate used to determine the present value of the post-employment defined benefits would decrease the liability by Ch$ 3.0 billion in 2013, Ch$ 3.1 billion in 2012 and Ch$ 2.5 billion in 2011 and the effect of a decrease of one percentage point in the rate used to determine the present value of the post-employment defined benefits would increase the liability by Ch$ 3.5 billion in 2013, Ch$ 3.6 billion in 2012 and Ch$ 2.9 billion in 2011.

Recent Accounting Pronouncements

Please see Note 2.2 to our Consolidated Financial Statements for additional information regarding recent accounting pronouncements.

Argentina

Our Argentine operations do not affect Endesa Chile’s consolidated liquidity. As a result of the Argentine economic crisis in the early 2000s and the significant governmental intervention in the electricity sector in 2002, we have not received dividends from our Argentine subsidiaries, Endesa Costanera and El Chocón, since 2000 and 2012 respectively. In 2011, we recorded a Ch$ 5.4 billion goodwill impairment charge for Endesa Costanera. Additional economic deterioration of Argentina, of our subsidiaries that operate in that country is not expected to have any material effect on our financial and operating results.

Our Argentine liquid assets were Ch$ 6.7 billion as of December 2013, which represents 2.1% of Endesa Chile’s total liquid assets. Of our total Argentine current assets, 92.9% is denominated in local currency and the remaining 7.1% is denominated in U.S. dollars. Our Argentine debt was Ch$ 142.6 billion as of December 2013, representing 7.5% of Endesa Chile’s total debt. Of the total Argentine debt, 22.8% is denominated in local currency, and the remaining 77.2% is denominated in U.S. dollars. The currency translation effect of converting the statements of comprehensive income from the Argentine peso to the Chilean peso led to a 15.4% decrease in 2013 compared to 2012. A default by any of our Argentine subsidiaries on their indebtedness would not affect Endesa Chile. For more information, see “Item 5. Operating and Financial Review and Prospects. — B. Liquidity & Capital Resources”.

The Argentine government has avoided increasing electricity tariffs to end customers, and seasonal prices have remained fixed in Argentine pesos. On the other hand, a generation company’s tariffs are also regulated based on defined fixed and variable remuneration. Due to rate controls, revenues of electric utility companies do not always cover their operating costs. Argentine authorities have created a new mechanism to improve the financial situation of these companies in recognition that their performance is directly related to the regulatory framework. For more detail, see “Item 4. Information on the Company — B. Business Overview — Electricity Industry Regulatory Framework — Argentina.”

106

2. Country by Country Comparative Analysis of Operating and Non-Operating Results for 2013 and 2012

Revenues from operations

The following table sets forth the revenues by country, as a percentage of total consolidated revenues for 2013 and 2012:

	Year ended December 31,
	2013		2012
	(as a % of total)
Chile (1)		47.5		47.7
Other businesses and intercompany transaction adjustments (Chile) (2)		0.5		0.3
Argentina		6.5		14.8
Colombia		31.5		25.0
Peru		14.0		12.2
Total consolidated revenues		100.0		100.0

(1) Restated in accordance with IFRS 11.

(2) We consider that our revenues from operations that are not related to the electricity business are immaterial and believe that they do not affect the analysis of our consolidated financial statements. These revenues come mainly from a tunnel concession.

The tables below set forth the country breakdown for Endesa Chile’s total revenues from operations, the volume of energy sales (expressed in GWh) and the volume of energy produced, in each case for 2013 and 2012:

	Year ended December 31,
Revenues	2013		2012		Change
	(in millions of Ch$)				(in %)
Generation (Chile) (1)		962,879		1,107,117		(13.0)
Other businesses and intercompany transaction adjustments (Chile)		10,261		7,503		36.8
Argentina		131,443		344,178		(61.8)
Colombia		639,504		580,125		10.2
Peru		283,806		282,124		0.6
Consolidated adjustment foreign subsidiaries		(461)		(662)		30.4
Total revenues		2,027,432		2,320,385		(12.6)

(1) Restated in accordance with IFRS 11.

	Year ended December 31,
Energy Sales	2013		2012		Change
	(GWh)				(in %)
Chile (1)		20,406		20,878		(2.3)
Argentina		12,354		11,852		4.2
Colombia		16,090		16,304		(1.3)
Peru		8,904		9,587		(7.1)
Total		57,754		58,621		(1.5)

(1) Restated in accordance with IFRS 11.

107

	Year ended December 31,
Generation (1)	2013		2012		Change
	(in GWh)				(in %)
Chile (2)		19,438		19,194		1.2
Argentina		10,840		11,207		(3.3)
Colombia		12,748		13,251		(3.8)
Peru		8,391		8,570		(2.1)
Total		51,417		52,222		(1.5)

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses and defined as generation minus power plants’ own consumption, external auxiliaries, transmission and technical losses.

(2) Restated in accordance with IFRS 11.

Lower revenues in Chile (generation and other businesses) of Ch$ 141.4 billion during 2013 were primarily due to a 11.5% reduction in average energy sales prices, mostly explained by fewer contracts indexed to the marginal cost, coupled with a 2.3% reduction of physical energy sales, mainly to unregulated customers. In addition, we recorded two non-recurring sources of gains in 2012. In March 2012, we had extraordinary income of Ch$ 29.2 billion due to an agreement reached between Endesa Chile and CMPC, a pulp and paper company. In December 2012, extraordinary additional income of Ch$ 55.1 billion was recorded due to the agreed compensation with an insurance company for loss of profits in connection with Bocamina as a result of earthquake damage on February 27, 2010.

Due to Argentine Resolution 95, there was a one-time adjustment of Ch$ 207 billion in Endesa Costanera as of December 31, 2013. This amount was related to fuel value and was deducted from both revenues and operating costs, with no impact on operating income. Revenues from operations in Argentina reached Ch$ 131.4 billion in 2013, also because of a 25.4% reduction in operating revenues in El Chocón, primarily related to the exchange rate conversion effect, a decline in average sales price and lower hydrology. Lower revenues in Argentina were partially offset by Ch$ 33.1 billion in revenues related to Endesa Costanera’s combined cycle availability contract executed with the Secretariat of Energy. The “currency translation effect” is the net effect obtained when translating the results from the local currency of each country to pesos. The currency translation effect of converting the statements of comprehensive income from the Argentine peso to the Chilean peso in Argentina led to a 15.4% decrease in 2013, when compared to 2012.

Total revenues from operations in Colombia increased by Ch$ 59.4 billion, or 10.2%, due to an 11.1 % increase in average sale electricity prices, offsetting a 1.3% decrease in physical sales. The effect of translating the statements of comprehensive income from Colombian pesos to Chilean pesos in both periods resulted in a 2.0% decline in Chilean peso terms in 2013 when compared to 2012.

Revenues from operations in Peru grew by 0.6% in 2013, primarily due to the compensation claim recognition from the TG 7 turbine damage at the Santa Rosa plant, for Ch$ 20.0 billion. The currency translation effect of converting the statements of comprehensive income from soles to the peso for both periods resulted in a 0.5% decrease in 2013, when compared to 2012.

108

Operating Expenses

The table below sets forth the country breakdown for operating expenses for 2013 and 2012:

	Year ended December 31,
Raw materials and consumables used (1)	2013		2012		Change
	(in millions of Ch$)				(in %)
Generation (Chile) (2)		494,892		753,998		(34.4)
Other businesses and intercompany transaction adjustments (Chile)		4		8		(44.1)
Argentina		36,479		282,316		(87.1)
Colombia		204,419		171,063		19.5
Peru		95,080		111,095		(14.4)
Total		830,874		1,318,480		(37.0)

(1) Excludes selling and administrative expenses.

(2) Restated in accordance with IFRS 11.

Operating expenses in the generation business in Chile decreased by 34.4% in 2013 as a result of Ch$ 173.7 billion of lower fuel costs and increased generation using coal. Additionally, energy purchases declined by Ch$ 94.9 billion due to reduced energy sales needs and a lower average price of purchased energy in the spot market and reduced transportation expenses of Ch$ 3.8 billion. These cost reductions were partially offset by higher other variable procurements and services of Ch$ 13.4 billion, higher personnel expenses of Ch$9.9 billion and higher other fixed costs of Ch$ 8.3 billion.

In Argentina, due to Resolution 95, there was a one-time adjustment of Ch$ 207 billion to Endesa Costanera in December 2013. This amount was related to fuel value and was deducted from both revenues and operating costs, with no impact on operating income. This Resolution ended the marginal remuneration system in the Argentine electricity generation market and defined instead remuneration by technology and size of the facilities, setting for each case a recognition of fixed costs (to be determined by availability) and variable costs plus an additional payment (these two concepts to be determined based on energy effectively generated). As a result, operating expenses in Argentina reached Ch$ 36.5 billion in 2013, which included a Ch$ 3.1 billion increase in energy purchases at Endesa Costanera due to higher physical energy purchases, offset by Ch$ 2.1 billion of lower other variable procurement and service costs and Ch$ 0.9 billion of lower energy purchases in El Chocón.

In Colombia, operating expenses increased by 19.5% in 2013 primarily due to a Ch$ 38.5 billion increase in energy purchases as a result of higher purchase prices in the spot market related to the worsening of hydrological conditions, coupled with higher physical energy purchases due to the lower hydroelectric generation.

In Peru, operating expenses decreased by 14.4% mostly due to a Ch$ 18.7 billion reduction in energy purchases associated with lower purchase prices in the spot market, and Ch$ 3.3 billion of lower fuel cost related to lower thermal generation due the reduced availability of Santa Rosa units.

109

Selling and Administrative Expenses

The table below sets forth the country breakdown of selling and administrative expenses for 2013 and 2012:

	Year ended December 31,
	2013		2012		Change
	(in millions of Ch$)				(in %)
Selling and administrative expenses
Generation (Chile) (1)		112,731		94,567		19.2
Other businesses and intercompany transaction adjustments (Chile)		1,210		(907)		n.a.
Argentina		39,166		36,696		6.7
Colombia		33,511		32,917		1.8
Peru		31,408		31,192		0.7
Consolidated adjustment foreign subsidiaries		(461)		(661)		30.4
Total selling and administrative expense		217,565		193,804		12.3

(1) Restated in accordance with IFRS 11.

Selling and administrative expenses, related to salaries, compensation, administrative expenses, office materials and supplies, increased by Ch$ 23.8 billion in 2013.

Approximately 52.4% of total selling and administrative expenses are concentrated in Chile, a 21.7% increase in 2013 over 2012, mainly due to higher payroll expenses, which increased by Ch$ 12 billion due to higher staff and to wages indexing to inflation.

In Colombia, selling and administrative expenses increased from Ch$ 32.9 billion in 2012 to Ch$ 33.5 billion in 2013, mainly as a result of Ch$ 2.3 billion of higher payroll expenses mainly due to more personnel, partly related to El Quimbo project. In Argentina, selling and administrative expenses rose by 6.7% when compared to 2012, primarily due to Ch$ 6.1 billion of higher payroll expenses due mostly due to union negotiations, wages indexing to inflation and increased staffing.

Operating Margin and Operating Income

The following is our operating margin by country for 2013 and 2012:

	Year ended December 31,
	2013		2012
Operating margin
Chile (1)		27.9%		15.4%
Argentina		26.6%		0.7%
Colombia		56.9%		58.2%
Peru		39.5%		35.8%
Total operating margin		38.6%		26.4%

(1) Restated in accordance with IFRS 11.

110

Our operating margin, or operating income as a percentage of revenues, increased to 38.6% in 2013 from 26.4% in 2012. This growth was primarily due to higher operating margins reported in Chile and Argentina, partially offset by a lower operating margin in Colombia. The Argentine margin improvement was affected by the additional Ch$ 33.0 billion in revenues received under the Endesa Costanera combined-cycle gas turbine availability contract. However, there is a distortion attributable to Resolution 95 which affected operating income and operating expense by the same amount. The Chilean margin improvement is explained mainly by the Ch$ 241.8 billion decrease in operating costs due primarily to lower fuel costs, despite revenues decreasing by Ch$ 141.5 billion. The lower margin in Colombia is due to the proportionally higher cost in relation to the revenue increase, due to lower hydroelectric generation. The Peruvian margin improvement is explained mainly for the Ch$ 29,6 billion cost operating reduction , due mostly to the lower price in the spot market and the reduced availability of Santa Rosa units.

The following table summarizes operating income by country for 2013 and 2012:

	Year ended December 31,
	2013		2012		Change
Operating income	(in millions of Ch$)				(in %)
Generation (Chile) (1)		265,258		165,459		60.3
Other businesses and intercompany transaction adjustments (Chile)		6,468		5,935		9.0
Argentina		34,928		2,473		1,312.6
Colombia		363,993		337,651		7.8
Peru		112,192		100,898		11.2
Total operating income		782,839		612,416		27.8

(1) Restated in accordance with IFRS 11.

Endesa Chile’s consolidated operating income was Ch$ 782.8 billion in 2013 and Ch$ 612.4 billion in 2012. This increase was primarily due to lower generation costs explained by lower fuel consumption costs in Argentina and Chile, lower energy purchases in Chile and Peru, coupled with lower transportation costs in Chile.

Non-operating Results

The following table sets forth certain information regarding our consolidated non-operating results for 2013 and 2012:

	Year ended December 31,
	2013		2012		Change
Financial results	(in millions of Ch$)				(in %)
Financial income		18,292		14,630		25.0
Financial costs		(142,667)		(148,469)		3.9
Income (loss) for indexed assets and liabilities		1,002		(1,066)		n.a.
Foreign currency exchange differences		(13,757)		(12,090)		(13.8)
Total		(137,130)		(146,995)		(6.7)
Other non-operating results
Share of the profit (loss) of associates accounted for using the equity method		119,347		135,013		(11.6)
Net income from other investments		793		657		20.7
Net income from sales of assets		2,564		765		235.2
Total		122,704		136,435		(10.1)
Total non-operating results		(14,426)		(10,560)		36.6

111

Our total financial results in 2013 amounted to Ch$ 137.1 billion, a decrease of 6.7% from 2012. This variation was primarily explained by the Ch$ 5.8 billion reduction in financial costs mainly in Peru due to debt amortizations which were not refinanced, Ch$ 3.7 billion of higher financial income mainly from Colombia related to its higher cash availability, and Ch$ 2.1 billion of higher gains for indexed assets and liabilities. These were partly offset by a Ch$ 1.7 loss due to exchange differences.

The share of the profit of associates accounted for under the equity method amounted to Ch$ 119.3 billion in 2013, 11.6% lower than 2012. This variation was mostly explained by Ch$ 13.1 billion of lower net income in Endesa Brasil, Ch$ 1.7 billion of lower net income in HidroAysén and Ch$ 1.3 billion of lower net income in GasAtacama S.A. As a result of all the foregoing, total non-operating results for 2013 amounted to an expense of Ch$ 14.4 billion.

Net Income

The following table sets forth our net income for 2013 and 2012:

	Year ended December 31,
	2013		2012		Change
	(in millions of Ch$)				(in %)
Net income before tax		768,413		601,856		27.7
Income tax		(204,907)		(182,833)		12.1
Net income		563,506		419,023		34.5
Net income attributable to: shareholders of Endesa Chile		353,927		234,335		51.0
Net income attributable to: non-controlling interest		209,579		184,688		13.5

Income tax expenses increased by 12.1%, equivalent to Ch$ 22,074 million, when compared to 2012. For more information see Note 30 to our Consolidated Financial Statements.

3. Country by Country Comparative Analysis of Operating and Non-Operating Results for 2012 and 2011

Revenues from Operations

The following table sets forth the revenues by country, as a percentage of total consolidated revenues for 2012 and 2011:

	Year ended December 31,
	2012		2011
	(as a % of total)
Chile (1)		47.7		49.8
Other businesses and intercompany transaction adjustments (Chile)(2)		0.3		0.8
Argentina		14.8		17.1
Colombia		25.0		21.8
Peru		12.2		10.5
Total consolidated revenues		100.0		100.0

(1) Restated in accordance with IFRS 11.

(2) We consider that our revenues from operations that were not related to its electricity business are immaterial and believe that they do not affect the analysis of our consolidated financial statements. These revenues come mainly from a tunnel concession.

112

The tables below set forth the country breakdown for Endesa Chile’s total revenues from operations, the volume of energy sales (expressed in GWh) and the volume of energy produced, in each case for 2012 and 2011:

	Year ended December 31,
Revenues	2012		2011		Change
	(in millions of Ch$)				(in %)
Generation (Chile) (1)		1,107,117		1,137,770		(2.7)
Other businesses and intercompany transaction adjustments (Chile)		7,503		18,698		(59.9)
Argentina		344,178		390,136		(11.8)
Colombia		580,125		498,544		16.4
Peru		282,124		239,841		17.6
Consolidated adjustments foreign subsidiaries		(662)		(724)		(8.7)
Total revenues		2,320,385		2,284,264		1.6

(1) Restated in accordance with IFRS 11.

	Year ended December 31,
Energy sales	2012		2011		Change
	(in GWh)				(in %)
Chile (1)		20,878		20,315		2.8
Argentina		11,852		11,381		4.1
Colombia		16,304		15,112		7.9
Peru		9,587		9,450		1.5
Total		58,621		56,258		4.2

(1) Restated in accordance with IFRS 11.

	Year ended December 31,
Generation (1)	2012		2011		Change
	(in GWh)				(in %)
Chile (2)		19,194		19,296		(0.5)
Argentina		11,207		10,713		4.6
Colombia		13,251		12,051		10.0
Peru		8,570		8,980		(4.6)
Total		52,222		51,040		2.3

(1) Figures may differ from those previously reported, as the current figures are shown net of all losses and it is defined as generation minus power plants’ own consumption, external auxiliaries, transmission and technical losses.

(2) Restated in accordance with IFRS 11.

Lower revenues in Chile (generation and other businesses) of Ch$ 41.8 billion during 2012 were primarily due to a 5.3% reduction in average energy sales prices as a result of lower indexation of contracts to the marginal cost in Chile, coupled with the absence of revenues from government Resolution 88, that forced generators of the CDEC-SIC system to supply energy to distribution companies without contracts, (Ch$ 68.3 billion in 2011). This was partially offset by the agreed compensation with the insurance company for loss of profits of Ch$ 55.1 billion as a result of the disaster of February 27, 2010.

Total revenues from operations in Colombia increased by Ch$ 81.6 billion due to a 7.9% rise in electricity sales due to a higher hydro generation and a 7.9% increase in the average energy sales price in pesos due to a higher energy wholesale market price recorded since August 2012. The “currency translation effect” is the net effect obtained when translating the results from the local currency of each country to pesos. The Colombian currency translation effect was positive, resulting in a 3.4% increase in Chilean pesos in 2012, when compared to 2011. For additional information of our principal distribution and trading customers in Colombia see “Item 4. Information on the Company — B. Business Overview.”

113

Revenues from operations in Peru grew by 17.6% in 2012 primarily explained by a 15.3% growth in the average energy sales price due to higher contract prices as a result of the fuel prices indexation and to a higher node price since May 2012. The currency translation effect of converting the statements of comprehensive income from soles to the peso for both periods produced a 5.0% increase in Chilean pesos in 2012, when compared to 2011. For additional information of our principal customers in Peru see “Item 4. Information on the Company — B. Business Overview.”

Total revenues from operations in Argentina decreased by 11.8% in 2012 as a result of a lower operating and labor costs recognition, and lower capacity payment in Endesa Costanera, explained by the non renewal of the one-year term agreement between the Ministry of Energy and the generation companies of the MEM system executed in November 2010. This was partially offset by a 1.8% increase in El Chocón revenues due to higher electricity sales in the spot market resulting from increased hydro generation in the period. The currency translation effect of converting the statements of comprehensive income from the Argentine peso to the Chilean peso in both companies led to a 8.6% decrease in 2012, when compared to 2011. For additional information of our principal customers in Argentina see “Item 4. Information on the Company — B. Business Overview.”

Operating Expenses

The table below sets forth the country breakdown for operating expenses for 2012 and 2011:

	Year ended December 31,
	2012		2011		Change
	(in millions of Ch$)				(in %)
Raw materials and consumables used (1)
Generation (Chile) (2)		753,998		601,672		25.3
Other businesses and intercompany transaction adjustments (Chile)		8		8		(4.1)
Argentina		282,316		315,717		(10.6)
Colombia		171,063		134,852		26.9
Peru		111,095		86,884		27.9
Total		1,318,480		1,139,133		15.7

(1) Excludes selling and administrative expenses.

(2) Restated in accordance with IFRS 11.

Operating expenses in the generation business in Chile increased by 25.3% in 2012 as a result of higher fuel costs of Ch$ 65.7 billion since 2012 was the third consecutive dry year. This was coupled with higher transportation costs of Ch$ 34.5 billion explained by increased toll costs related to the drought in the central-southern zone of the country. Additionally, energy purchase costs grew by Ch$ 62.8 billion due to higher energy purchase prices in the spot market.

Colombia’s operating expenses increased by 26.9% in 2012 primarily explained by higher energy purchase costs of Ch$ 19.7 billion due to higher energy purchase prices in the spot market, and increased fuel costs of Ch$ 12.3 billion primarily related to a higher back-up fuel supply requested by the authorities on the occasion of the Cumbre de Las Americas held in Cartagena in the first quarter of 2012.

Operating expenses in Peru rose by 27.9% primarily explained by higher energy purchase costs of Ch$ 14.7 billion in 2012 due to higher physical energy purchases in the spot market to supplement the plant maintenance activities, coupled with higher fuel costs of Ch$ 6.1 billion partly due to increased diesel generation as a result of dual gas units maintenance activities.

Operating expenses in Argentina declined by 10.6% in 2012 primarily as a result of lower fuel costs of Ch$ 27.8 billion in Endesa Costanera due to lower generation with gas oil and a Ch$ 3.1 billion decrease in transportation costs, coupled with lower energy purchase costs of Ch$ 1.6 billion in El Chocón due to the increased hydro generation in 2012.

114

Selling and Administrative Expenses

Selling and administrative expenses, related to salaries, compensation, administrative expenses, office materials and supplies, decreased by Ch$ 4.7 billion in 2012.

The table below sets forth the breakdown of selling and administrative expenses for 2012 and 2011:

	Year ended December 31,
	2012		2011		Change
	(in millions of Ch$)				(in %)
Selling and administrative expenses
Generation (Chile) (1)		94,567		76,362		23.8
Other businesses and intercompany transaction adjustments (Chile)		(907)		10,024		n.a
Argentina		36,696		28,188		(30.2)
Colombia		32,917		72,867		54.8
Peru		31,192		11,748		(165.5)
Consolidated adjustment foreign subsidiaries		(661)		(725)		8.7
Total selling and administrative expense		193,804		198,464		(2.3)

(1) Restated in accordance with IFRS 11.

Approximately 48.3% of total selling and administrative expenses are concentrated in Chile, between the generation business and other businesses, with a 8.4% increase in 2012 over 2011, mainly due to higher payroll expenses which increased by 10.3% primarily reflecting the engineering staff transfer.

In Colombia, selling and administrative expenses decreased from Ch$ 72.9 billion in 2011 to Ch$ 32.9 billion in 2012, mainly as a result of the one-time effect of the equity tax reform in that country in 2011, which required booking the entire amount of tax payable for the four year period from 2011 to 2014 for a total of Ch$ 43.5 billion on January 1, 2011. Also the reversal of a provision of profit sharing for workers in Peru created a one-time benefit on payroll expenses of Ch$ 14.6 million in June 2011.

Operating Margin and Operating Income

The following is our operating margin by country for 2012 and 2011:

	Year ended December 31,
	2012		2011
Operating margin
Chile(1)		15.4%		33.2%
Argentina		0.7%		7.7%
Colombia		58.2%		50.9%
Peru		35.8%		43.6%
Total operating margin		26.4%		33.6%

(1) Restated in accordance with IFRS 11.

Our operating margin, or operating income as a percentage of revenues, decreased to 26.4% in 2012 from 33.6% in 2011. This decrease is primarily due to lower operating margins reported in Chile, partially offset by a higher operating margin in Colombia.

As a consequence of the prolonged drought, Chilean operating margins decreased from 33.2% in 2011 to 15.4% in 2012, mainly due to the increase in operating expenses, which represented 52.0% of 2011 revenues and 67.6% of 2012 revenues. Operating expenses increased by 25.3% in 2012 compared to 2011 as a result of lower hydroelectric generation that forced the Company to utilize more thermal generation with more costly LNG and coal. This led to a 20.6% increase in fuel consumption costs to Ch$ 65.7 billion in 2012, and to the purchase of energy in the spot market, with higher purchase costs of Ch$ 62.8 billion, or 40.1%. These higher costs were partially offset by lower transportation costs and lower other operating expenses. To a lesser extent, the decline in operating margin is also due to an increase in depreciation and amortization expenses, which increased by Ch$ 4.2 billion, or 2.5%, associated primarily with the commissioning of our Bocamina II coal-fired plant in October 2012 and represented 7.6% of revenues in 2012 compared to 5.9% in 2011.

115

In Colombia, the operating margin increase was mainly due to the Ch$ 81.6 billion or 16.4% revenue increase slightly helped by the Ch$ 2.6 billion or 1.0% cost operating decrease. In Peru, the operating margin deterioration is due to that the Ch$ 45.9 billion or 33.9% operating cost increase that were partially offset for smaller improvement in the revenues of Ch$ 42.3 billion or 17.6%.

The following table summarizes operating income by country for 2012 and 2011:

	Year ended December 31,
	2012		2011		Change
	(in millions of Ch$)				(in %)
Operating income
Generation (Chile) (1)		165,459		377,522		(56.2)
Other businesses and intercompany transaction adjustments (Chile)		5,935		6,431		7.7
Argentina		2,473		30,154		(91.8)
Colombia		337,651		253,546		33.2
Peru		100,898		104,485		(3.4)
Consolidated adjustment foreign subsidiaries		—		(5,448)		n.a.
Total operating income		612,416		766,690		(20.1)

(1) Restated in accordance with IFRS 11.

Endesa Chile’s consolidated operating income was Ch$ 612.4 billion in 2012 and Ch$ 766.7 billion in 2011. This decrease was primarily due to lower revenues as a consequence of lower average energy sales prices in Chile and Argentina, higher fuel costs in Chile, Colombia and Peru and increased energy purchase costs in Colombia, Peru and Chile.

116

Non-operating Results

The following table sets forth certain information regarding our consolidated non-operating results for each of the periods indicated:

	Year ended December 31,
	2012		2011		Change
	(in millions of Ch$)				(in %)
Financial results:
Financial income		14,630		28,264		(48.2)
Financial costs		(148,469)		(135,258)		9.8
Income (loss) for indexed assets and liabilities		(1,066)		(5,447)		(80.4)
Foreign currency exchange differences		(12,090)		(6,650)		81.8
Total		(146,995)		(119,091)		(23.4)
Other non-operating results:
Share of the profit (loss) of associates accounted for using the equity method		135,013		138,856		(2.8)
Net income from other investments		657		1,037		(36.7)
Net income from sales of assets		765		973		(24.4)
Total		136,435		140,866		(3.1)
Total non-operating results		(10,560)		21,775		n.a

Our financial results in 2012 amounted to an expense of Ch$ 147.0 billion, a 23.4% increase over 2011. This variation is explained by higher interest expenses of Ch$ 13.2 billion, mostly due to a contingency update with SUNAT (Peruvian Tax Authority), an exchange difference loss increased by Ch$ 5.4 billion, lower financial income of Ch$ 13.6 billion, due to lower cash availability, partly offset by a gain for indexed assets and liabilities of Ch$ 4.4 billion.

The share of the profit of associates, accounted for under the equity method, amounted to Ch$ 135.0 billion in 2012, decreasing by 2.8% compared to 2011. This variation was mostly explained by Ch$ 7.9 billion of lower net income in Endesa Brasil, Ch$ 1.8 billion of increased net income in HidroAysén, Ch$ 1.1 billion of increased net income in GNL Quinteros, Ch$ 0.4 billion of increased net income in GNL Chile and Ch$ 0.4 billion of increased net income in GasAtacama.

As a result of all the foregoing, total non-operating results for 2012 amounted to an expense of Ch$ 10.6 billion.

Net Income

The following table sets forth our net income for the periods indicated:

	Year ended December 31,
	2012		2011		Change
	(in millions of Ch$)				(in %)
Net income before tax		601,856		788,465		(24.0)
Income tax		(182,833)		(207.330)		(11.8)
Net income		419,023		581,135		(27.9)
Net income attributable to: shareholders of Endesa Chile		234,335		446,874		(47.6)
Net income attributable to: non-controlling interest		184,688		134,261		(37.6)

Income taxes in 2012 decreased by 11.8%, the equivalent of Ch$ 24.5 billion, when compared to 2011.

117

B. Liquidity and Capital Resources.

The following discussion of cash sources and uses reflects the key drivers of cash flow for Endesa Chile.

We have a direct ownership in Pehuenche (92.7 %), and Celta (96.2%), which are our main Chilean consolidated subsidiaries. For the list of principal subsidiaries, please see Exhibit 8.1. We receive cash inflows from our own operating assets and from our subsidiaries, as well as from related companies in Chile and abroad. Foreign subsidiaries and associates’ cash flows may not be available to satisfy our own liquidity needs, mainly because they are not wholly-owned, and because there is a time lag before we have effective access to those funds through dividends or capital reductions. However, we believe that cash flow generated from our business operations, as well as cash balances, borrowings from commercial banks, and ample access to both Chilean and foreign capital markets will be sufficient to satisfy all our needs for working capital, debt service, dividends and routine capital expenditures.

We have economic interests of 62.5% in our Peruvian subsidiary, Edegel, 26.9% in our Colombian subsidiary, Emgesa (which we control pursuant to a shareholders’ agreement), 75.7% in our Argentine subsidiary, Endesa Costanera, and 65.4% in our Argentine subsidiary, El Chocón. We consolidate these subsidiaries since we control the majority of the voting rights.

Set forth below is the consolidated cash flow from an accounting perspective:

	Year ended December 31,
	2013		2012		2011
	(in billions of Ch$)
Net cash flows from (used in) operating activities		708		538		665
Net cash flows from (used in) investing activities		(186)		(258)		(193)
Net cash flows from (used in) financing activities		(430)		(434)		(400)
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes		92		(154)		(72)
Effect of exchange rate changes on cash and cash equivalents		(4)		—		15
Cash and cash equivalents at beginning of period		236		390		303
Cash and cash equivalents at end of period		324		236		390

For the year ended December 31, 2013, cash provided by operating activities was Ch$ 708 billion, an increase of Ch$ 170 billion, or 31.6% compared to 2012, primarily as a consequence of a decrease in payments to suppliers for goods and services of
Ch$ 258 billion, mainly in Chile and Argentina, a Ch$ 47 billion decrease in income taxes paid, and an increase in collections from premiums and services, annual payments, and other obligations from policies held of Ch$ 68 billion, all of which were partially offset by the decrease in collections from the sale of goods and services of Ch$ 198 billion, mainly in Chile and Argentina.

For the year ended December 31, 2012, cash provided by operating activities was Ch$ 538 billion, a decrease of Ch$ 127 billion, or 19.1% compared to 2011, primarily as a consequence of an increase in payments to suppliers for goods and services of
Ch$ 203 billion, mainly in Chile and Peru, a Ch$ 34 billion increase in payments to and on behalf of employees, mainly in Chile and Argentina, and an increase in other outflows of cash of Ch$ 66 billion, all of which were partially offset by the increase in collections from the sale of goods and services of Ch$ 131 billion and an increase in other collections from operating activities of Ch$ 52 billion.

For the year ended December 31, 2013, cash used by investment activities was Ch$ 186 billion, mostly explained by the acquisition of property, plant and equipment and the incorporation of intangible assets for a total amount of Ch$ 292 billion, mainly at Endesa Chile, Endesa Argentina and Emgesa. See “Item 4. Information of the Company — A. History and Development of the Company — Investment, Capital Expenditures and Divestitures.” The aforementioned cash outflow was partially offset by proceeds from dividends classified as investment cash flow of Ch$ 51 billion, other collections from the sale of equity or debt instruments belonging to other entities of Ch$ 24 billion and interest received of Ch$ 17 billion.

118

For the year ended December 31, 2012, cash used by investment activities was Ch$ 258 billion, mostly explained by the acquisition of property, plant and equipment and the incorporation of intangible assets for a total amount of Ch$ 257 billion, mainly at Endesa Chile, Endesa Argentina and Emgesa, and other investment disbursements of Ch$ 19 billion. See “Item 4. Information of the Company — A. History and Development of the Company — Investment, Capital Expenditures and Divestitures.” The aforementioned cash outflow was partially offset by proceeds from dividends classified as investment cash flow of Ch$ 11 billion and interest received of Ch$ 7 billion.

For the year ended on December 31, 2013, cash used by financing activities was Ch$ 430 billion. The main drivers of this change are described below.

The aggregate cash inflows were primarily due to:

— Emgesa issued bonds and for Ch$ 149 billion.

— Costanera obtained cash for Ch$ 10.8 billion through a capital increase.

— El Chocón obtained loans for Ch$ 15 billion.

The aggregate cash outflows were primarily due to:

— Ch$ 294 billion in dividend payments (including Ch$ 118 billion from Endesa Chile on a stand-alone basis, Ch$ 53 billion from Emgesa among others).

— Ch$ 136 billion of interest expense (including Ch$ 71 billion in Endesa Chile on a stand-alone basis, Ch$ 51 billion in Emgesa among others).

— Ch$ 253 billion on payments of loans, bonds and other and other financial instruments from Endesa Chile consolidated.

For the year ended on December 31, 2012, cash used by financing activities was Ch$ 434 billion. The main drivers of this change are described below.

The aggregate cash inflows were primarily due to:

— Emgesa obtained loans for Ch$ 83 billion.

— Emgesa issued bonds for Ch$ 136 billion

— Edegel obtained loans for Ch$ 5 billion.

The aggregate cash outflows were primarily due to:

— Ch$ 380.3 billion in dividend payments (including Ch$ 42.1 billion from Emgesa and Ch$ 221.8 billion from Endesa Chile on a stand-alone basis).

— Payments on loans, bonds, financial leasing and other instruments for Ch$ 361 billion (including Ch$ 105.2 billion in Emgesa and Ch$ 202 billion in Endesa Chile on a stand-alone basis).

— Ch$ 125 billion of interest expense (including Ch$ 39.3 billion in Emgesa and Ch$ 67.3 billion in Endesa Chile on a stand-alone basis).

For a description of liquidity risks resulting from the inability of our subsidiaries to transfer funds, please see “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Operations in Every Country in Which We Operate —We depend in part on payments from our subsidiaries and affiliates to meet our payment obligations.”

119

We coordinate the overall financing strategy of our majority-owned subsidiaries. Our operating subsidiaries independently develop capital expenditure plans. Generally, our policy is to have the foreign operating subsidiaries independently finance their capital expansion programs through internally generated funds or direct financings. In the case of Chilean subsidiaries, they are financed by us through intercompany loans. For information regarding our commitments for capital expenditures, see “Item 4. Information on the Company — A. History and Development of the Company — Investments, Capital Expenditures and Divestitures.”

We have accessed the international equity capital markets, with an SEC-registered ADS issuance on August 3, 1994. We have also issued bonds in the United States (“Yankee Bonds”). Since 1996, we and our subsidiary Pehuenche have issued a total of US$ 2,370 million in Yankee Bonds.

The following table lists the Yankee Bonds issued by us and Endesa Chile outstanding as of December 31, 2013. The weighted average annual coupon interest rate for such bonds is 8.1%, without giving effect to each bond’s duration, or put options.

							Aggregate Principal Amount
Issuer	Term		Maturity		Coupon		Issued		Outstanding
					(in %)		(in millions of US$)
Endesa Chile		12 years		August 2015		8.625		200		200
Endesa Chile (1)		30 years		February 2027		7.875		230		206
Endesa Chile (2)		40 years		February 2037		7.325		220		71
Endesa Chile (1)		100 years		February 2097		8.125		200		40
Total						8.109 (3)		850		517

(1) Endesa Chile repurchased some of these bonds in 2001.

(2) Holders of the Endesa Chile 7.325% Yankee Bonds due 2037 exercised a put option on February 1, 2009 for a total amount of US$ 149.2 million. The remaining US$ 70.8 million principal amount of the Yankee Bonds mature in February 2037.

(3) Weighted-average coupon.

The following table lists Emgesa’s bond issued in the United States. The bond is denominated in Colombian pesos. The annual interest rate for such bond is 8.75%.

Coupon (inflation- adjusted rate)

Aggregate Principal Amount

Issuer

Term

Maturity

Issued

Outstanding

(in billions of Colombian pesos)

(in billions of Colombian pesos)

(in billions of     Ch$)

Emgesa

10 years

January 2021

8.75%

737

737

201

(1) Calculated based on the observed exchange rate as of December 31, 2013, which was CPs$ 3.6717 per Ch$ 1.00.

We, as well as our subsidiaries in the five countries in which we operate, have access to the domestic capital markets where we have issued debt instruments including commercial paper and medium and long term bonds that are primarily sold to pension funds, life insurance companies and other institutional investors.

120

The following table lists UF-denominated Chilean bonds issued by us and Endesa Chile, outstanding as of December 31, 2013.

Issuer

Term

Maturity

Coupon (inflation-   adjusted rate)

Aggregate Principal Amount

Issued

Outstanding

(in millions of UF)

(in millions of UF)

(in   billions   of Ch$)

Endesa Chile Series H

25 years

October 2028

6.20%

4.0

3.2

74

Endesa Chile Series M

21 years

December 2029

4.75%

10.0

10.0

233

Total

14.0

13.2

307

For a full description of the local bonds issued by us and Endesa Chile, see “ — Unsecured liabilities detailed by currency and maturity” and “ — Secured liabilities breakdown by currency and maturity” in Note 18 to our Consolidated Financial Statements.

The following table lists local bonds issued by our foreign subsidiaries, outstanding as of December 31, 2013. We present aggregate information for each company. The maturity column for each company reflects the issuance with the longest maturity, and the coupon rate corresponds to the weighted average coupon of all issuances for each company.

Issuer	Maturity		Coupon (1)		Aggregate Principal    Amount Outstanding
					(in billions of Ch$)
Edegel		January 2028		6.69%		61
Emgesa		December 2027		6.76%		585
Total						646

(1) Many of the coupon rates are variable rates based on local indexes, such as inflation. The table reflects the coupon rate taking into account each local index as of December 31, 2013.

We frequently participate in the international commercial bank markets governed by the laws of the State of New York through syndicated senior unsecured loans. As of December 31, 2013, the amounts outstanding or available for these bank loans are listed below:

Borrower	Type		Maturity		Facility Amount		Amount Drawn
					(in millions of US$)		(in millions of US$)
Endesa Chile		Syndicated revolving loan		June 2014		200		—
Endesa Chile		Syndicated term loan		June 2014		200		200
Total						400		200

The Endesa Chile revolving credit facility due June 2014 do not contain a condition precedent requirement regarding the non-occurrence of a “Material Adverse Effect” (or MAE, as defined contractually) prior to a disbursement, allowing the Company full flexibility to draw on up to US$ 200 million in the aggregate from such committed revolving facilities under any circumstances, including situations involving a MAE.

121

Endesa Chile also borrow from banks in Chile under fully committed facilities in which a potential MAE would not be an impediment to this source of liquidity. In early 2013 entered into 3-year bilateral revolving loans for an aggregate of UF 4.8 million (equivalent to Ch$ 111 billion as of December 31, 2013) as shown below.

Borrower	Type	Maturity		Facility Amount		Amount Drawn
				(in millions of US$)		(in millions of US$)
Endesa Chile	Syndicated revolving loan		February 2016		106	—
Our subsidiaries also have access to fully committed credit lines in the local markets, as detailed above.
Borrower	Type	Maturity		Facility Amount		Amount Drawn
				(in millions of US$)		(in Ch$ billion)
Emgesa	Bilateral revolving loans		January 2015		187	—

As a result of the foregoing, we have access to fully committed undrawn revolving loans, both international and domestic, for up to approximately Ch$ 258 billion in the aggregate as of December 31, 2013.

Endesa Chile also borrows routinely from uncommitted Chilean bank facilities with approved lines of credit for approximately Ch$ 161 billion in the aggregate, which is not currently drawn upon. Unlike the committed lines described above, which is not subject to material adverse effect condition precedents prior to disbursements, these facilities are not guaranteed under all circumstances. Our foreign subsidiaries also have access to uncommitted local bank facilities, for a total amount of Ch$ 74 billion, none of which we currently draw upon.

Endesa Chile can also tap the Chilean commercial paper market under programs that have been registered with the Chilean SVS for a maximum of US$ 200 million for each borrower.

Finally, our foreign subsidiaries also have access to other types of financing, including governmental facilities, supplier credit and leasing, among others.

Except for the SEC-registered Yankee Bonds, which are not subject to financial covenants, our outstanding debt facilities include financial covenants. The types of financial covenants, and their respective limits, vary from one type of debt to another. As of December 31, 2013, the most restrictive financial covenant affecting us was the Adjusted Consolidated Leverage Ratio in connection with the syndicated term and revolving facility that matures in June 2014. Under such covenant, the maximum additional debt that could be incurred without a breach of the most restrictive covenant is Ch$ 2,775 billion. As of December 31, 2013 and as of the date of this Report, we are in compliance with the financial covenants contained in our debt instruments.

As is customary for certain credit and capital market debt facilities, a significant portion of our financial indebtedness is subject to cross default provisions. Each of the revolving credit facilities described above, as well as our Yankee Bonds, have cross default provisions with different definitions, criteria, materiality thresholds, and applicability as to the subsidiaries that could give rise to a cross default.

The cross default provision for our revolving credit facilities due in July 2014, governed by the laws of the State of New York, refers to defaults of the borrower, without reference to any subsidiary. Under such credit facilities, only matured defaults exceeding US$ 50 million qualify for a potential cross default when the principal exceeds US$ 50 million, or its equivalent in other currencies. In the case of a matured default above the materiality threshold, the revolving credit facility’s lenders would have the option to accelerate if the lenders representing more than 50% of the aggregate debt of a particular facility then outstanding choose to do so. None of our local facilities due in February 2016, has cross default provisions to debt other than the respective borrower’s own indebtedness.

The Yankee Bonds’ cross default provisions may be triggered only by debt of Endesa Chile or its Chilean subsidiaries. A matured default of either us or one of our Chilean subsidiaries could result in a cross default to our

122

Yankee Bonds if such matured default, on an individual basis, has a principal exceeding US$ 30 million, or its equivalent in other currencies. In the case of a matured default above the materiality threshold, Yankee bondholders would have the option to accelerate if either the trustee or bondholders representing no less than 25% of the aggregate debt of a particular series then outstanding choose to do so. A payment default or a bankruptcy/insolvency default outside of Chile has no contractual effect on our Yankee Bond indentures, no matter how material. Likewise, Endesa Chile’s local bonds have no subsidiary cross default provisions.

Our Argentine subsidiary, Endesa Costanera, did not make any installment payments due in 2012 and 2013 under the terms of a 1996 supplier credit agreement with Mitsubishi Corporation (“MC”). As of December 31, 2013, Endesa Costanera has missed US$ 68.5 million in payments, including principal and interest. It has experienced difficulties in making timely payments under its agreement with MC on a recurring basis since the Argentine crisis began in 2002, but had received waivers from MC in the past expressing its willingness to renegotiate payments. Additionally, MC has liens over the Mitsubishi combined cycle power plant at Endesa Costanera. Endesa Costanera carried out a capital increase in November 2013, that improved its working capital. Its weak financial situation is attributable to its inability to obtain tariff adjustments that reflect its actual generation costs.

As of the date of this Report, Endesa Costanera has not received any waivers for the past-due payments or any acceleration notices. We continue with active negotiations aimed at restructuring the debt. If MC were to declare an event of default and accelerate payment of the US$ 185 million principal and interest balance under the supplier credit agreement, Endesa Costanera would be required to enter into bankruptcy proceedings. As explained elsewhere in this section, payment defaults and bankruptcy proceedings of non Chilean subsidiaries have no financial effect on our debt obligations.

With the exception of our Argentine subsidiaries, our companies have access to existing credit lines sufficient to satisfy all of their present working capital needs. Access to the capital markets on the part of our Argentine subsidiaries has been very limited due to the difficult financial situation still prevailing in Argentina (particularly in the utilities sector), the poor capital markets environment due to the shortage of off-shore financing, the nationalization of the pension fund system and, in general, higher risk associated with lending to Argentine utilities as a consequence of the regulatory framework.

Payment of dividends and distributions by our subsidiaries and affiliates represent an important source of funds for us. The payment of dividends and distributions by certain subsidiaries and affiliates are subject to legal restrictions, such as legal reserve requirements, and capital and retained earnings criteria, and other contractual restrictions. We have been advised by legal counsel in the countries where our subsidiaries and affiliates operate that there currently are no additional legal restrictions on the payment to us of dividends or distributions to us in the jurisdictions where such subsidiaries or affiliates are incorporated. Certain credit facilities and investment agreements of our subsidiaries restrict the payment of dividends or distributions in certain special circumstances. For a description of liquidity risks resulting from our company status, please see “Item 3. Key Information — D. Risk factors —We depend in part on payments from our subsidiaries and affiliates to meet our payment obligations.”

Our estimated capital expenditures for the 2014-2018 period amount to Ch$ 1,921 billion, of which Ch$ 1,025 billion are considered non-discretionary investments. We include maintenance capital expenditures as non-discretionary. It is important for us to maintain the quality and operation standards required for our facilities, but we do have some flexibility regarding the timing for these investments. We consider the investment in expansion projects as also non-discretionary expenditure. We consider the remaining Ch$ 896 billion as discretionary capital expenditures. The latter includes expansion projects that are still under evaluation, in which case we would undertake them only if deemed profitable.

Other than in Argentina, we do not currently anticipate liquidity shortfalls affecting our ability to satisfy the material obligations described in this Report. We are currently renegotiating the terms of repayment with MC and expect to be able to refinance our indebtedness as it becomes due, fund our purchase obligations outlined previously with internally generated cash and fund capital expenditures with a mixture of internally generated cash and borrowings.

123

Transactions that most significantly affected our foreign subsidiaries’ liquidity in 2013 included:

— Endesa Costanera: capital increase for Ch$ 48 billion, of which 77% was subscribed by Endesa Chile, to support the capital structure of the company.

— Emgesa: local bond issuance for Ch$ 149 billion to finance El Quimbo investment needs.

— El Chocón: syndicated loan with local banks for Ch$ 15 billion to refinance short term debt.

Transactions that most significantly affected our foreign subsidiaries’ liquidity in 2012 included:

— Endesa Costanera: refinancing of 2012 indebtedness for approximately Ch$ 52 billion.

— El Chocón: obtained a working capital loan for Ch$ 4 billion, which enabled the company to increase the debt’s average life.

— Emgesa: syndicated loan with local banks for Ch$ 83 billion to refinance short-term debt and local bonds issuance for Ch$ 136 billion with 10 and 15 year maturity tranches.

— Edegel: Ch$ 5 billion in a five-year term loan to refinance short term maturities in 2012.

C. Research and Development, Patents and Licenses, etc.

None.

D. Trend Information.

We are a company with electricity generation assets, and with subsidiaries and unconsolidated equity investments engaged primarily in the generation of electricity in Chile, Brazil, Argentina, Colombia and Peru. Therefore, our businesses are subject to a wide range of conditions that may result in variability in our earnings and cash flows from year to year. In general, our net income is a result of our operating income from our generation business and other factors such as income from unconsolidated related companies, foreign currency exchange rate effects and tax expense.

Operating income varies in each of the four countries where we consolidate operations due to numerous factors, including hydrological conditions, the price of fuel used to generate thermal electricity, and the prevailing regulated and spot market prices for electricity. We expect our reasonably good operating performance to continue during the coming years, given the favorable macroeconomic perspective for all of the countries in which we operate, except for Argentina. Despite current uncertainties concerning the global economy, there are good expectations for this region’s growth during the next five years, including an expected 4.1% growth in gross domestic product, on average, based on World Economic Outlook (October 2013) of the International Monetary Fund (“IMF”) and a stable electricity demand growth.

On the other hand, development of new generation facilities in South America has always lagged behind demand growth. We anticipate that this tendency will continue for the foreseeable future. Also, due to growing environmental restrictions, transmission line saturation, obstacles for fuel transportation, and scarcity of places where to locate plants, these new projects involve higher development costs than in the past. We expect that average electricity prices will adjust to recognize these increased costs. This could increase the value of our assets, especially in the case of hydroelectric power plants, which have lower production costs, and thus have greater profitability in scenarios of increasing prices to end users. Furthermore, an important part of the new installed capacity under development in the four countries in which we operate corresponds to thermal power plants, with coal and natural gas as their principal fuels. Fewer hydroelectric projects are being developed. Thus, we expect this situation will also impact long term spot prices positively. Long-term contracts awarded in different bids to us, directly and through our subsidiaries, have already incorporated these expected price levels. Currently, we have 37% of our expected annual generation is sold under contracts with terms of at least ten years and an additional 39% under contracts with terms of at least five years.

124

However, spot prices are subject to great volatility, affecting our forecasted income. In order to address this risk, the Company has implemented commercial policies to control relevant variables and provide stability to the profit margins. Our commercial policy seeks to establish a global framework to conduct energy trading operations, setting responsibilities, guidelines and acceptable risk limits aligned with company objectives. Therefore, the Company defines contractual volumes that minimize the risk of supply in adverse hydrological conditions and includes risk mitigation clauses, where necessary, with some unregulated customers.

In order to mitigate the risk of increasing fuel costs, we have entered into supply contracts to cover part of the fuel needed to operate the thermal generation units, which operate with coal, natural gas, diesel, and fuel oil. In Chile, through an equity interest in GNL Quintero and GNL Chile, and a Long Term Gas Supply Agreement with GNL Chile, we are the only electricity company in Chile with direct access to the LNG terminal at Quintero Bay (the only facility of its kind in the SIC market). This enhances our position to manage fuel supply risks, especially when facing increasing fuel costs scenarios. This is becoming more important as there is an increasing trend to penalize fuel intensive technologies, such as coal and diesel, which have a larger environmental impact.

In July 2013, Endesa Chile and British Gas renegotiated the LNG Sale and Purchase Agreement, which had been in dispute since January 2013 due to a change in the reference price. This renegotiation has modified some conditions of the original contract, allowing us to secure our long term LNG supply at very competitive prices, with significant flexibilities and with an additional supply sufficient for our current power plants and future projects.

In addition, because of the drought in Chile and price volatility of coal and petroleum, we decided to hedge this risk with commodity instruments available in international markets. During 2013, we entered into swap arrangements for 107,000 barrels of Brent crude and 25,000 tons of coal. As of December 31, 2013, no swap arrangements were outstanding. We plan to continuously monitor operating conditions and, if necessary, entered into new swap arrangements.

Although having operations in the four countries in which we consolidate and our equity interest in Brazil, allows us to somewhat offset and counterbalance variations with respect to the main factors that can affect our operating results, we cannot claim that our -portfolio of assets is fully hedged. Furthermore, there can be no assurance that past performance will be indicative of future performance with respect to our business. Any significant change with respect to hydrological conditions, fuel or electricity prices, among other factors, could affect our operating income in the generation business. More broadly, any significant change with respect to economic and population growth, as well as changes in the regulatory regimes in the countries in which we operate, among other factors, could affect our operating income. Variability in our earnings and cash flows can also arise from non-operating factors as well, such as foreign currency exchange rates. For further information regarding our 2013 results compared with those recorded in previous periods, please see “— A. Operating Results - Endesa Chile’s Results of Operations for the Years ended December 31, 2013 and December 31, 2012” and “— A. Operating Results - Endesa Chile’s Results of Operations for the Years ended December 31, 2012 and December 31, 2011.” Investors should not look at our past performance as indicative of future performance.

We do not expect that our current debt agreements, which impose certain restrictions, would have a negative impact on our capital expenditure plan and we have many sources of proven liquidity in the international and domestic capital markets. As of December 31, 2013, we are able to incur up to Ch$ 2,775 billion in incremental debt, without entering into a breach of the debt covenants, beyond current levels of consolidated indebtedness. We believe that we will continue to have similar comfortable levels of leverage capacity for the foreseeable future (see “ Item 5. Operating and Financial Review and Prospects— B. Liquidity and Capital Resources”).

Finally, we expect that we will continue generating substantial operating cash, which can be used to finance a significant part of our capital expenditure plan. If needed, our shareholders can also decrease the dividend payout ratio, subject to certain minimum legal restrictions, in order to finance our investment plan and future growth.

E. Off-balance Sheet Arrangements.

Endesa Chile is not a party to any off-balance sheet arrangements.

125

F. Tabular Disclosure of Contractual Obligations.

The table below sets forth the Company’s cash payment obligations as of December 31, 2013:

Cash payment obligation	Total		2014		2015-2016		2017-2018		After 2018
	(in billions of Ch$)
Bank debt		282		138		39		50		55
Local bonds (1)		930		37		92		121		680
Yankee bonds		472		—		105		—		367
Other debt (2)		281		274		7		—		—
Interest expense (3)		1,037		122		204		178		533
Pension and post-retirement obligations (4)		36		6		5		4		21
Purchase obligations (5)		2,889		306		466		402		1,715
Financial leases		49		7		17		15		11
Total contractual obligations		5,976		890		935		770		3,382

(1) Net value, hedging instruments included substantially modify the principal amount of debt.

(2) All of our pension and post-retirement plans are unfunded. Cash flows estimated in the table are based on future undiscounted payments necessary to meet all of our pension and post-retirement obligations.

(3) Interest expenses are the interest payments for all outstanding financial obligations, calculated as principal multiplied by the interest rate, presented according to when the interest payment comes due.

(4) We have funded and unfunded pension and post-retirement benefit plans. Our funded plans have contractual annual commitments for contributions, which do not change based on funding status. Cash flow estimates in the table are based on such annual contractual commitments including certain estimable variable factors such as interest. Cash flow estimates in the table relating to our unfunded plans are based on future discounted payments necessary to meet all of our pension and post-retirement obligations.

(5) Of the total contractual obligations of Ch$ 2,889 billion, 41% corresponds to miscellaneous services, such as LNG regasification, fuel transport, and coal handling, 28% to tolls, 23% to energy purchases and the remaining 8% to fuel supply long term contracts.

G. Safe Harbor.

The information contained in the Items 5.E and 5.F contains statements that may constitute forward-looking statements. See “Forward-Looking Statements” in the “Introduction” of this Report, for safe harbor provisions.

Item 6.     Directors, Senior Management and Employees

A. Directors and Senior Management.

Our Board of Directors consists of nine members who are elected for a three-year term at an Ordinary Shareholders’ Meeting (“OSM”). If a vacancy occurs in the interim, the Board of Directors will elect a temporary director to fill the vacancy until the next OSM, at which time the entire Board of Directors will be elected. Our Executive Officers are appointed by the Board of Directors and hold office at the discretion of the Board.

126

Set forth below are the members of our Board of Directors as of December 31, 2013.

Name	Position	Current Position Held Since
Directors
Jorge Rosenblut R	Chairman	2009
Paolo Bondi	Vice Chairman	2009
Alfredo Arahuetes G	Director	2012
Jaime Bauzá B	Director	2010
Francesco Buresti	Director	2008
Enrique Cibié B	Director	2012
Vittorio Corbo L	Director	2010
Felipe Lamarca C	Director	2010
Manuel Morán C	Director	2012

Set forth below are brief biographical descriptions of our directors, of whom five reside in Chile, three reside in Spain and one resides in the United States.

Jorge Rosenblut R.

Chairman of the Board of Directors

Mr. Rosenblut has been Chairman of Endesa Chile since December 2009. During the previous 10 years he was Chairman of Chilectra. Mr. Rosenblut is an advisor for Ripley, a retail and financial services business. He is currently a board member of the Institute of Americas of La Jolla, California. He has been a representative of Sun Life Financial (Canada) and Director of AFP Cuprum, a Chilean pension fund. Between 1990 and 1996, he held positions in the government of Chile, including the Undersecretary of Telecommunications from 1994 to 1995, and the Undersecretary of the Presidency of Chile from 1995 to 1996. He is also involved in various educational organizations and business advisory committees, including the Dean’s Littauer Society, the Kennedy School of Government, Florida International University’s President’s Council of 100, the Steering Committee for TEDx Coconut Grove, the Advisory Board of the Center of International Studies at the Catholic University of Chile, and the Group of Fifty (G -50) with support from the Carnegie Endowment, based in Washington D.C. Mr. Rosenblut received the “Entrepreneur of the Year” award from the U.S.- Chile Chamber of Commerce in 2007 and again in 2013. He was named one of the “Top 100 Businessmen in Latin America” by the Latin Business Chronicle. Mr. Rosenblut has a degree in industrial engineering from the Universidad de Chile, with a masters in public administration from Harvard University’s Kennedy School of Government.

Paolo Bondi

Vice Chairman of the Board of Directors

Mr. Bondi was elected a Director and Vice Chairman in July 2009. Mr. Bondi was an executive of the Montedison group, an Italian industrial conglomerate, holding diverse positions in Italy, the U.S. and France. In 2002, he joined the Enel group as Head of Strategic and Financial Analysis and then as CFO of the International Division, becoming a member of the board of its principal subsidiaries. In October 2007, he was appointed as Endesa Spain’s Deputy Managing Director for Economics and Finance and then Vice Chairman of Chilectra. In March 2009, he became Managing Director for Economics and Finance and member of the Executive Committee at Endesa Spain. Mr. Bondi holds a degree in business administration from Università Commerciale Luigi Bocconi di Milano (Italy).

Alfredo Arahuetes G.

Director

Mr. Arahuetes was elected a Director in April 2012. He is currently a Professor of International Economics and Dean of the School of Economics and Business (ICADE) of the Pontificia Universidad de Comillas (Spain). He has been published widely in journals and books. He has participated in various organizations and agencies such as the Foundation for Latin American Studies holding the position of Secretary General, the Trilateral Commission as an

127

advisor, and in the Economic and Social Committee of the European Union as an expert advisor. He participated as a collaborator in Direct Investments of the Inter-American Development Bank (IDB). Mr. Arahuetes has a law degree from the Universidad de Deusto (Spain), and a Ph.D. in economics and business administration from the School of Economics and Business (ICADE) of the Pontificia Universidad de Comillas (Spain).

Jaime Bauzá B.

Director and Member of the Directors’ Committee

Mr. Bauzá was elected a Director in April 2010. Currently, he is also Director of other companies unrelated to Endesa Chile, such as Claro Chile and Grupo Costanera. Mr. Bauzá was also Director of the Company between 1999 and 2007. He joined Endesa Chile in 1990 after more than twenty years of work in the electricity sector. Mr. Bauzá served as Endesa Chile’s CEO from 1990 to May 1999.Mr. Bauzá was the CEO of Endesa Chile’s subsidiary, Empresa Eléctrica Pehuenche S.A., from 1987 to 1990, and Chairman of AES Gener S.A. (formerly Chilgener S.A.), an unrelated electricity generation company, from 1987 to 1989. Mr. Bauzá also served as AES Gener S.A.’s CEO from 1982 to 1987. He holds a degree in civil engineering from the Pontificia Universidad Católica de Chile.

Francesco Buresti

Director

Mr. Buresti was elected a Director in April 2008. Mr. Buresti was a consultant for Accenture in the industrial sector and a consultant for McKinsey in the industrial and utilities sectors. In 2005, Mr. Buresti joined Enel as Purchasing Director for Enel Distribution (Electronic Market).Mr. Buresti was appointed Chief Procurement Officer and member of the Executive Committee of Endesa Spain in October 2007 and Executive Vice President for Enel’s Global Procurement in May 2012. He is also a Board member of several Enel subsidiaries. Mr. Buresti holds a degree in electronics engineering from the Università degli Studi di Bologna (Italy).

Enrique Cibié B.

Director and Member of the Directors’ Committee

Mr. Cibié was elected a Director in April 2012. Currently, Mr. Cibié is a Board member of several companies unrelated to us, such as Masisa S.A. and Terramater. He has been a CEO for various companies such as Masisa S.A. from 2005 to 2009, Farmacias Ahumada S.A. from 2001 to 2004, and Coca Cola Embonor Inc. from 2000 to 2001. He holds a commercial engineer, public accountant and auditor degree from the Pontificia Universidad Católica de Chile, and in 1982 he earned his M.B.A. from Stanford University.

Vittorio Corbo L.

Director

Mr. Corbo was elected a Director in April 2010. Mr. Corbo is a Senior Research Associate at CEP, a leading Chilean public policy center. Currently, Mr. Corbo is also Chairman of the Board of Seguros de Vida SURA S.A, a Chilean insurance company, and a member of the Board of Directors of Banco Santander-Chile, Banco Santander-México, Banco Santander-España and Compañía Cervecerías Unidas S.A. Mr. Corbo is a member of the Advisory Council of the Chief Economist of the World Bank, a member of the Advisory Committee of Monetary and Foreign Exchange Policies of the Capital Markets Department of the International Monetary Fund and a member of the International Advisory Council at the Center for Social and Economic Research (Warsaw, Poland). Mr. Corbo was a senior executive of the World Bank in Washington, D.C. between 1984 and 1991 and he was Chairman of the Board of the Central Bank of Chile and Chairman of its committee between 2003 and 2007. He was chosen World Central Banker of the Year in 2006 by the publication Global Finance. He holds a commercial engineering degree from the Universidad de Chile and a Ph.D. in economics from the Massachusetts Institute of Technology.

128

Felipe Lamarca C.

Director and Chairman of the Directors’ Committee

Mr. Lamarca was elected a Director in April 2010. Currently, Mr. Lamarca is Director of several companies that belong to different industrial sectors such as Ripley, a retail store, Deutsche Bank Chile, and Fundación Un Techo para Chile, a non-profit organization. He has served as Director of the Servicio de Impuestos Internos, the Chilean tax authority. From 1986 to 2005, Mr. Lamarca was Chairman of COPEC, a Chilean forestry and fuel conglomerate. Between 1997 and 2001, Mr. Lamarca was Chairman of SOFOFA, Chile’s Manufacturers Association. Mr. Lamarca was the Superintendent of the SVS between 1982 and 1983. He holds a degree in commercial engineering from the Pontificia Universidad Católica de Chile and in 2001 he was awarded the “Distinguished Professional of the Year” by the Business and Economics School of that university.

Manuel Morán C.

Director

Mr. Morán was elected a Director in April 2012. Between 1990 and 1998, Mr. Morán served as executive officer and board member in several airline companies, such as Iberia, Aerolineas Argentinas and Austral Líneas Aéreas. He was also member of the Executive Committee of IATA. Currently, Mr. Morán is General Manager of Endesa Spain Generation and member of the Executive Committee at Endesa Spain and also Board member of several of Endesa Spain subsidiaries. He earned his aeronautic engineering degree from the E.T.S.I.A. of Universidad Politécnica de Madrid (Spain), and in 1989 he earned an M.B.A. from IESE Business School, Madrid (Spain).

Executive Officers

Set forth are our Executive Officers as of December 31, 2013, except for a few updates as of the date of this Report, as noted below.

Name	Position	Current Position  Held Since
Executive Officers
Joaquín Galindo V	Chief Executive Officer	2009
Ramiro Alfonsín B	Assistant Chief Executive Officer	2013
Paulo Jorge Domínguez D	Regional Manager of Electricity Production	2013
Sebastián Fernández C	Energy Planning Officer	2008
Fernando Gardeweg R	Chief Financial Officer	2012
Juan Fernando La Fuente V	Planning & Control Officer	2013
María Francisca Moya M	Communications Officer	2011
Federico Polemann	Human Resources Officer	2013
Fernando Prieto P	Engineering, Projects and Research & Development Officer	2013
Luis Ignacio Quiñones S	General Counsel	2013
José Venegas M	Trading & Marketing Officer	2001

Set forth below are brief biographical descriptions of our Executive Officers, all of whom reside in Chile:

Joaquín Galindo V. became CEO in November 2009. From 1983 to 1996, he held several positions in Sevillana de Electricidad, an Endesa Spain subsidiary, where he was Director of the Thermal Plants of Bahía de Algeciras. In 1998, he became Director of Systems Production of the Islands outside the Iberian Peninsula and Generation Planning for Endesa Spain Generation. Between 2001 and 2004, he was Director of Production and Engineering for Endesa Italia S.p.A. and Counselor of the Centro Sperimentale Elettrotecnico Italiano (CESI) S.p.A. From 2004 to 2006, he was Counselor-General Director of the Société Nationale d´Électricité et de Thermique S.A, in Paris and Counselor of the Thermal Production Society of Bialystok (Poland). Between 2006 and 2008, he served as Counselor-General Director of Endesa Italia S.p.A. He was also a member of the board of Endesa Europe between 2004 and 2008. Mr. Galindo holds a degree in electrical industrial engineering from Universidad de Sevilla (Spain), a degree in economics and business administration and an M.B.A. from the Universidad Comercial de Deusto (Spain).

129

Ramiro Alfonsín B. was appointed Assistant Chief Executive Officer in April 2013. He joined the Endesa Spain group in June 2000 working at Endesa Net Factory as Manager of Investments and Venture Capital and later as Planning and Control Manager. From 2004, he worked at Endesa Italy as Assistant of Planning and Investment and in Endesa Europe as Assistant Director of Investment and Corporate Relations. From 2007 to March 2013 he held the position of Regional Manager of Planning and Control of Enersis. Before joining the Endesa Spain group, he worked as a Senior Financial Advisor at Banco Urquijo KBL group, at Alcatel in the Management of Corporate Development and Institutional Relations, and as an Associate in Corporate Banking at ABN AMRO Bank N.V. Currently, Mr. Alfonsín is Director of several subsidiaries of Endesa Chile in Chile, Argentina, and Brazil. Mr. Alfonsín has a degree in business administration from the Pontificia Universidad Católica Argentina.

Paulo Jorge Domínguez D. was appointed Regional Manager of Electricity Production in November 2013. He has been working in the power sector for 23 years, with a decade of work in power plants, where he became Head of Maintenance after having held various roles including installation and commissioning. He joined the Enel group in 2000, where he served successively as Head of Maintenance (2000-2002), Head of Asset Management (2003-2006) and Head of Technical Services of Generation for Spain and Portugal (2007-2013). He was Joint Counselor of an Enel group company (2004-2005) and participated in several international projects for the acquisition and divestment of assets as well as integration. He has been member of several international organizations. Mr. Domínguez has several papers published in specialty journals; he co-authored two books and has three international awards. Mr. Domínguez holds a degree in mechanical engineering from the Instituto Superior Técnico (Lisboa) and has a graduate degree from the Harvard Business School (2012) as well as the degree of specialist in industrial maintenance from the Colegio de Ingenieros de Portugal.

Sebastián Fernández C. became Energy Planning Officer in January 2008. He joined Enersis in January 1997, beginning his professional career in Development. He has served in different positions in the group, such as Project Manager of Endesa Europe, Deputy Manager of Planning and Investments in Endesa Italy and Deputy Manager of Generation Projects in Endesa Chile. Mr. Fernández holds a commercial engineering degree from the Universidad de Los Andes (Chile), and attended the YMP program at Insead (France).

Fernando Gardeweg R. became Chief Financial Officer in September 2012. He joined the Enersis group in 1992. Mr. Gardeweg has served primarily in development and finance positions in the group. He was Enersis’ National Finance Director from June 2002 to August 2012. Mr. Gardeweg holds a degree in economics from the Universidad de Chile.

Juan Fernando La Fuente V. was appointed Planning and Control Manager in June 2013. In 1997 he worked in Chilectra in the commercial and Service Quality areas, and a year later he joined Endesa Chile, as International Planning Assistant Manager. He was later appointed to the position of Head of Energy Management, after which, between 2006 and 2008 he worked in Endesa Latin-America, in energy management and environmental regulation positions. In 2010, he took over as Enersis’ Investment Control Deputy Manager, with a main focus on new generation projects. Mr. La Fuente holds a degree in electrical civil engineering from the Universidad de Chile.

Francisca Moya M. became Communications Officer in September 2011. In May 2002, she began her career as a journalist in Enersis’ Communications Department. After two years she became Head of Internal Communications in Endesa Chile. From 2005 to 2009, she worked in Endesa Spain’s Internal Communications Area. In 2009, she was appointed to the position of Head of Strategic Planning in Communications in Endesa Chile. In May 2010, she became Communications Deputy Officer. Mrs. Moya holds a degree in journalism from Universidad de Santiago de Chile and a certificate in management and project evaluation from Universidad de Chile. Mrs. Moya left the Company on February 28, 2014.

Federico Polemann was appointed Human Resources Manager in July 2013. His professional career began with various roles in the Human Resources area at Citibank N.A., after which he joined the Enersis group in September 2003 as Senior Analyst of Human Resource Development at Endesa Costanera. Then he took the responsibility of Head of Development and Labor Relations in Argentine Generation and was Managing Director of Personnel for Argentina. Mr. Polemann holds a degree in business administration from the Universidad de Buenos Aires and a masters in strategic human resource planning from the Universidad de San Andrés (Argentina).

130

Fernando Prieto P. became Engineering, Projects and Research & Development Officer in March 2013. Mr. Prieto joined the Endesa group in 1999, where he worked in Project Development until 2005, mostly in generation projects. From 2006 until 2008, he served as Project Management Deputy Director in the Engineering and R&D Area. Since 2008, he has served as Project Management and Construction Officer at Endesa Spain. Mr. Prieto holds a degree in industrial engineering energy technologies from Universidad Politécnica de Madrid (Spain), and in 2009 he attended the general management program from IESE Business School, in Madrid (Spain).

Luis Ignacio Quiñones S. became General Counsel in November 2013. In 1989, he began his career as in-house lawyer for Chilectra until 1994. Between 1994 and 1996 he was in-house lawyer for Ingeniería y Construcción Sigdo Koppers S.A. Between 1996 and 2004 he worked as an in-house lawyer for Placer Dome Latin America and then as Legal Advisor for its affiliate company, Compañía Minera Zaldívar. Between 2004 and 2005 he was Head of the Legal area in Gasoducto del Pacífico S.A. Between 2005 and 2013, he was the General Counsel in Chile for Anglo American Chile Limitada. Mr. Quiñones studied law at Universidad Diego Portales (Chile) and holds the title of lawyer granted by the Supreme Court of Justice in Chile.

José Venegas M. has been the Trading & Marketing Officer since June 2001. Mr. Venegas joined the Company in 1992. He was Director of the CDEC-SIC Economic Load Dispatch Center in 1997 and the Commercial Officer from September 1997 to May 2000. He has also served as Planning and Energy Officer from June 2000 to May 2001. Mr. Venegas holds a degree in industrial civil engineering from the Pontificia Universidad Católica de Chile and an M.B.A. from Universidad Adolfo Ibáñez (Chile).

B. Compensation.

At the OSM held on April 15, 2013, our shareholders approved the current compensation policy for the Board of Directors. Each director receives fixed compensation of UF 101 per month and a fee of UF 66 for attending meetings of the Board. The Vice Chairman will receive fixed compensation of UF 151.5 per month and a fee of UF 99 for attending meetings of the Board. The Chairman will receive fixed compensation of UF 202 per month and a fee of UF 132 for attending meetings of the Board.

In 2013, the total compensation paid to each of our Directors, including fees for attending Directors’ Committee meetings, was as follows:

	Year ended December 31, 2013
Director	Fixed   Compensation		Ordinary       Session		Extraordinary       Session		Directors’       Committee		Total
	(in thousands of Ch$)
Jorge Rosenblut R		55,732		36,419		6,046		—		98,197
Paolo Bondi (1)		—		—		—		—		—
Francesco Buresti (1)		—		—		—		—		—
Manuel Morán C. (1)		—		—		—		—		—
Alfredo Arahuetes G.		27,866		18,210		3,023		—		49,099
Jaime Bauzá B.		27,866		18,210		3,023		15,451		64,549
Vittorio Corbo L.		27,866		18,210		3,023		—		49,099
Felipe Lamarca C.		27,866		18,210		3,023		15,451		64,549
Enrique Cibié B		27,866		18,210		3,023		15,451		64,549
Total		195,063		127,467		21,161		46,352		390,042

(1) Messrs. Bondi, Buresti and Morán waived compensation for their positions as Directors.

We do not disclose, to our shareholders or otherwise, information about an individual Executive Officer’s compensation. For the year ended December 31, 2013, the aggregate gross compensation paid or accrued, attributable to fiscal year 2013 (including performance-based bonuses) for our Executive Officers, was

131

Ch$ 2,072 million. Executive Officers are eligible for variable compensation under a bonus plan. Endesa Chile provides an annual bonus plan for its Executive Officers for meeting company-wide objectives and for their individual contribution to the Company’s results and objectives. The annual bonus plan provides for a range of bonus amounts according to seniority level. The bonuses paid to executives consist of a certain number of gross monthly salaries.

The amount accrued by the Company in 2013 to provide severance indemnity to its Executive Officers totaled Ch$ 514 million, of which Ch$ 81 million was accrued during 2013. There are no other amounts set aside or accrued to provide for pension, retirement, or similar benefits for our Executive Officers.

All of our Executive Officers have severance indemnity agreements with the Company in the event of voluntary resignation, termination by mutual agreement among the parties, or death. They do not have a right to severance indemnity if their relationship with the Company is terminated due to willful misconduct, prohibited negotiations, unjustified absences, abandonment of duties, among other causes, as defined in article 160 of the Chilean Labor Code. All of the Company’s employees are entitled to legal severance pay if terminated due to the needs of the Company, as defined in article 161 of the Chilean Labor Code.

C. Board Practices.

The Board of Directors as of December 31, 2013 was elected at the OSM of April 26, 2012. For information as to the years in which each director began his service on the board, please see “— A. Directors and Senior Management” above. The members of the Board of Directors do not have service contracts with Endesa Chile or any of its subsidiaries that provide benefits upon termination of service.

Corporate Governance

Endesa Chile is managed by its Board of Directors, which, in accordance with its bylaws, consists of nine directors who are elected at an OSM. Each director serves for a three-year term and the term of each of the nine directors expires on the same day. The directors can be reelected indefinitely. Staggered terms are not permitted under Chilean law. If a vacancy occurs on the board during the three-year term, the Board of Directors may appoint a temporary director to fill the vacancy. Any vacancy triggers an election for every seat on the Board of Directors at the next OSM.

Chilean corporate law provides that a company’s board of directors is responsible for the management, administration and representation of a company in all matters concerning its corporate purpose, subject to the provisions of the company’s bylaws and the stockholders’ resolutions. In addition to the bylaws, Endesa Chile’s Board of Directors has adopted regulations and policies that guide our corporate governance principles.

The Charter Governing Executives, approved by our Board in July 2003, and the Employee Code of Conduct, explain our principles and ethical values, establish the rules governing our contact with customers and suppliers, and establish the principles that should be followed by employees, including ethical conduct, professionalism and confidentiality. They also impose limitations on the activities that our executives and other employees may undertake outside the scope of their employment with us.

In order to ensure compliance with Securities Market Law 18,045 and SVS regulations, our Board of Directors at its meeting held on May 29, 2008, approved the “Manual for the Management of Information of Interest to the Market” (the “Manual”). This document addresses applicable standards regarding the information in connection with transactions of the Company’s securities or those of its affiliates by directors, management, principal executives, employees and other related parties, the existence of blackout periods for such transactions by directors, principal executives and other related parties, the existence of mechanisms for the continuous disclosure of information that is of interest to the market and mechanisms that provide protection for confidential information. The Manual was released to the market on May 29, 2008 and is posted on the Company’s website at www.endesa.cl. In February 2010, the Manual was modified in order to comply with the provisions of Law No. 20,382 (Corporate Governance Improvement Law).

132

The provisions of this Manual shall be applied to the members of our Board, as well as Endesa Chile’s executives and employees who have access to confidential information, and especially those who work in areas related to the securities markets.

In order to supplement the aforementioned corporate governance regulations, our Board, at its meeting held on June 24, 2010 approved a Code of Ethics and a Zero Tolerance Anti-Corruption Plan (“ZTAC Plan”). The Code of Ethics is structured on the basis of general principles such as impartiality, honesty, integrity and other values of similar importance, which are expected in the behavior criteria detailed in the document. The ZTAC Plan reinforces the principles included in the Code of Ethics, but with special emphasis on avoiding corruption in the form of bribes, preferential treatment, and other similar matters.

At its meeting of March 31, 2011, our Board approved the Penal Risk Prevention Model required by Law 20,393 of December 2, 2009, which imposes criminal responsibility on legal entities for the crimes of asset laundering, financing of terrorism and bribing of public officials. The law encourages companies to adopt this model, whose implementation involves compliance with duties of management and supervision. The adoption of this model therefore mitigates, and in some cases relieves, the effects of criminal responsibility even when a crime is committed. One of the elements of this model is the Penal Risk Prevention Officer, who was appointed by the Board at its meeting held on October 27, 2010. As of December 31, 2013 our Penal Risk Prevention Officer was Alain Rosolino, Internal Audit Officer of Enersis, our controlling company.

On October 27, 2010, our Board approved “GUIDELINES 231: Guidelines applicable to non-Italian subsidiaries in accordance with Legislative Decree 231 of June 8, 2001. Application to Endesa Spain and its Group.” Given that Endesa Chile’s ultimate parent company, Enel S.p.A., has to comply with Legislative Decree 231, which establishes management responsibility for Italian companies as a consequence of certain crimes committed in Italy or abroad, in the name of or for the benefit of such entities, including those crimes described in Chilean Law 20,393, this document, approved by the Board, sets a group of measures, with standards of behavior expected from all employees, advisers, auditors, officials, directors as well as consultants, contractors, commercial partners, agents and suppliers. Legislative Decree 231 includes various activities of a preventive nature that are coherent with and integral to the requirements and compliance with Chilean Law 20,393, which deals with the criminal responsibility of legal entities. All of the above is supplementary to the behavioral regulations included in the Code of Ethics and ZTAC Plan.

On November 29, 2012, the SVS issued General Regulation No. 341 which established regulations for the disclosure of information with respect to the standards of corporate governance adopted by publicly held limited liability corporations that must be complied with, and sets the procedures, mechanisms and policies that are indicated in the Appendix to the regulation. The objective of this regulation is to provide credible information to the investing public with respect to good corporate governance policies and practices adopted by publicly held limited liability corporations, which include Endesa Chile, and permit entities like stock exchanges to produce their own analyses to help the various market participants to know and evaluate the commitment of companies. The Appendix is divided into the following five sections with respect to which companies must report the corporate practices that have been adopted: (i) the functioning of the board,( ii) relations between the company, shareholders and the general public, (iii) the replacement and compensation of senior executives, (iv) the definition, implementation and supervision of the company’s internal control and risk management policies and procedures, and (v) other practices adopted by the company that do not refer to the above matters. Publicly held limited liability corporations should send the information with respect to corporate governance practices to the SVS, no later than March 31 of each year, using as parameters the contents of the Appendix to this regulation. Should the company not have adopted any of them, it must explain its reasons. The information should refer to December 31 of the calendar year prior to its dispatch. At the same time, such information shall also be made available to the public on the company’s web site and the information sent to the stock exchanges. The SVS directed that the first dispatch and publication of the information be made in June 2013 and refer to the period ended March 31, 2013, and Endesa made the dispatch in compliance with the SVS directions.

133

Compliance with the New York Stock Exchange (“NYSE”) Listing Standards on Corporate Governance

The following is a summary of the significant differences between our corporate governance practices and those applicable to U.S. domestic issuers under the corporate governance rules of the NYSE:

Independence and Functions of the Directors’ Committee (Audit Committee)

Under the NYSE corporate governance rules, all members of the audit committee must be independent. We have been subject to this requirement since July 31, 2005. On April 22, 2010, at an Extraordinary Shareholders’ Meeting (“ESM”), the Company’s bylaws were amended and the Audit Committee was merged with the Directors’ Committee. According to the Company’s bylaws, all of the members of this Committee must satisfy the requirements of independence, as stipulated by the NYSE. Also, Chilean law requires that the majority of the Directors’ Committee (at least two out of three members) be independent directors. According to Chilean law, a member would not be considered independent if, at any time, within the last 18 months he or she: (i) maintained any relationship of a relevant nature and amount with the company, with other companies of the same group, with its controlling shareholder or with the principal officers of any of them or has been a director, manager, administrator or officer of any of them; (ii) maintained a family relationship with any of the members described in (i) above; (iii) has been a director, manager, administrator or principal officer of a non-profit organization that has received contributions from (i) above; (iv) has been a partner or a shareholder that has controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator or principal officer of an entity that has provided consulting or legal services for a relevant consideration or external audit services to the persons listed in (i) above; and (v) has been a partner or a shareholder that has controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator or principal officer of the principal competitors, suppliers or customers. In case there are not sufficient independent directors on the Board to serve on the Directors’ Committee, Chilean law determines that the independent director nominates the rest of the members of the Directors’ Committee among the rest of the Board members that do not meet the Chilean law independence requirements. Chilean law also requires that all publicly held limited liability stock corporations that have a market capitalization of at least UF 1,500,000 (approximately Ch$ 35 billion as of December 31, 2013) and at least 12.5% of its voting shares are held by shareholders that individually control or own less than 10% of such shares, must have at least one independent director and a Directors’ Committee.

Under the NYSE corporate governance rules, the audit committee of a U.S. company must perform the functions detailed in, and otherwise comply with the requirements of NYSE Listed Company Manual Rules 303A.06 and 303A.07. Non-U.S. companies have been required to comply with Rule 303A.06 beginning July 31, 2005 but are not required to comply with Rule 303A.07. Since July 31, 2005, we have complied with the independence and the functional requirements of Rule 303A.06. As required by the Sarbanes-Oxley Act (“SOX”) and the NYSE corporate governance rules, on June 29, 2005, Endesa Chile’s Board of Directors created an Audit Committee, composed of three directors who were also members of the Board. As previously mentioned, this Audit Committee was merged into the Directors’ Committee in April 2010. As required by the Company’s bylaws, the members of Directors’ Committee, composed of three members of the Board, should comply with Chilean law, as well as with the criteria and requirements of independence prescribed by SOX, the SEC and the NYSE. As of December 31, 2013, our Directors’ Committee was composed of three independent directors, all of whom met the independence criteria of Chilean law, SOX, the SEC and the NYSE.

Our Directors’ Committee performs the following functions:

— review of Financial Statements and the Reports of the external auditors prior to their submission to shareholders’ approval;

— formulation of proposals to the Board of Directors, which will make its own proposals to shareholders’ meetings, for the selection of external auditors and private rating agencies;

— review of information related to transactions of the Company with related parties and report the opinion of the Directors’ Committee to the Board of Directors;

— examination of the compensation framework and plans for managers, executive officers and employees;

— preparation of an Annual Management Report, including its main recommendations to shareholders;

— information to the Board of Directors about the convenience of recruiting external auditors to provide non-auditing services, when such services are not prohibited by law, depending on whether such services might affect the external auditors’ independence;

— oversight of the work of external auditors;

134

— review and approval of the annual auditing plan by the external auditors;

— evaluation of the qualifications, independence and quality of the auditing services;

— elaboration of policies regarding employment of former members of the external auditing firm;

— review and discussion of problems or disagreements between management and external auditors regarding the auditing process;

— establishment of procedures for receiving and dealing with complaints regarding accounting, internal control and auditing matters;

— any other function mandated to the committee by the bylaws, the Board of Directors or the shareholders of the Company.

As of December 31, 2013, Messrs. Jaime Bauzá, Enrique Cibié and Felipe Lamarca (Chairman) were members of this Committee, all of whom satisfied the independence requirements of the NYSE.

Corporate Governance Guidelines

The NYSE’s corporate governance rules require U.S.-listed companies to adopt and disclose corporate governance guidelines. Although Chilean law does not provide for this practice (except for the Manual), the Company has adopted the codes of conduct described above, and at its ESM held in March 2006, approved the inclusion of articles in its bylaws that govern the creation, composition, attributions, functions and compensation of the Directors’ Committee and the Audit Committee.

In order to comply with the new requirements of Law No. 20,382, which amended the Chilean Companies Act, at the ESM held on April 22, 2010, the shareholders of the Company approved amendments to the Company’s bylaws, including amendments providing for the merger of the Directors’ and Audit Committees. The Directors’ Committee is currently composed of three members that comply with the SOX independence requirements and the NYSE corporate governance rules. The Directors’ Committee includes among its functions the duties previously performed by the Audit Committee.

D. Employees.

The following table provides the total number of personnel (both permanent and temporary employees) of the Company and its consolidated subsidiaries for the last three fiscal years:

Company	2013		2012		2011
Argentina
Endesa Costanera		481		452		421
El Chocón		48		49		52
Total personnel in Argentina		529		501		473
Chile
Endesa Chile		1,137		1,102		1,077
Pehuenche		3		3		3
Celta		1		1		1
Ingendesa (1)		—		1		3
Túnel El Melón		16		16		16
Total personnel in Chile (2)		1,157		1,123		1,100
Colombia
Emgesa		563		517		498
Total personnel in Colombia		563		517		498
Peru
Edegel		260		263		247
Total personnel in Peru		260		263		247
Total personnel of Endesa Chile and subsidiaries		2,509		2,404		2,318

(1) Includes employees of Ingendesa’s subsidiary in Brazil. During 2011, Ingendesa employees were transferred to Endesa Chile.

(2) Through December 31, 2012, our jointly controlled companies GasAtacama and HidroAysén were consolidated on a proportional basis, so for those companies we included personnel accordingly. Since January 1, 2013, jointly controlled companies have been consolidated under the equity method as a result of the application of IFRS 11. For comparative purposes we have subtracted the personnel of those companies from the 2011 and 2012 figures.

135

The following table provides the total number of temporary employees of the Company and its consolidated subsidiaries for the last three fiscal years:

Company	Average 2013		2013		2012		2011
Argentina
Endesa Costanera		9.1		20		—		55
El Chocón		0.8		3		—		3
Total temporary personnel in Argentina		9.9		23		—		58
Chile
Endesa Chile		111.2		96		75		74
Pehuenche		—		—		—		—
Pangue		—		—		—		—
San Isidro				—		—		—
Celta		—		—		—		—
Túnel El Melón		—		—		—		—
Total temporary personnel in Chile (2)		111.2		96		75		74
Colombia
Emgesa		84.7		87		76		57
Total temporary personnel in Colombia		84.7		87		76		57
Peru
Edegel		25.9		22		27		17
Total temporary personnel in Peru		25.9		22		27		17
Total temporary personnel of Endesa Chile and subsidiaries		231.7		228		178		206

Chile

All Chilean employees who are dismissed for reasons other than misconduct are entitled by law to a severance payment. According to Chilean law, permanent employees are entitled to a basic payment of one-month’s salary for each year (or a six-month portion thereof) worked, subject to a limit of a total payment of no more than 11 months’ pay for employees hired after August 14, 1981. Severance payments to employees hired prior to that date consist of one-month’s salary for each full year worked, not subject to any limitation on the total amount payable. Under Endesa Chile’s collective bargaining agreements, the Company is obligated to make severance payments to all covered employees in cases of voluntary resignation or death in specified amounts that increase according to seniority. Endesa Chile has four collective bargaining agreements in Chile, which will expire between 2015 and 2017.

Argentina

El Chocón has two collective bargaining agreements, one which expires in December 2016, and another which is still pending. Endesa Costanera has two collective bargaining agreements, which will expire in March 2014.

Colombia

Emgesa has two collective bargaining agreements with two different unions; which will be in force until October and December 2014, respectively.

Peru

Edegel has one collective bargaining agreement that expired in 2013 and is currently in the process of renegotiation.

Our management believes that is has a good relationship with its labor unions.

136

E. Share Ownership.

To the best of Management’s knowledge, none of Endesa Chile’s directors or officers own more than 0.1% of the shares of the Company. None of Endesa Chile’s directors or officers have any stock options. It is not possible to confirm whether any of our directors or officers has a beneficial, rather than direct, interest in the shares of Endesa Chile. To the best of our knowledge, any share ownership by all of the directors and officers of Endesa Chile, in the aggregate, amounts to significantly less than 10% of outstanding shares.

Item 7.     Major Shareholders and Related Party Transactions

A. Major Shareholders.

Endesa Chile has only one class of capital stock and Enersis, our controlling shareholder, has no different voting rights than Endesa Chile’s other shareholders. As of February 28, 2014 our 8,201,754,580 shares of common stock outstanding were held by 17,143 stockholders of record. There were four record holders in the United States of America, as of such date.

It is not practicable for us to determine the number of ADSs or common shares beneficially owned in the United States, as the depositary only has knowledge of the record holders, including the Depositary Trust Company and its nominees. As such, we are not able to ascertain the domicile of the final beneficial holders represented by the official ADS record holders in the United States of America. Likewise, we cannot readily determine the domicile of any of our foreign stockholders who hold our common stock, either directly or indirectly.

As of February 28, 2014 Enersis owned 60.0% of the shares of Endesa Chile. Chilean private pension funds, “Administradoras de Fondos de Pensiones,” or AFPs, owned 14.9% in the aggregate. Chilean stockbrokers, mutual funds, insurance companies, foreign equity funds, and other Chilean institutional investors collectively owned 14.9% of our equity. ADS holders owned 3.4% of the equity. The remaining 6.8% was held by 16,966 minority shareholders.

The following table sets forth information concerning ownership of our common stock as of February 28, 2014, with respect to each stockholder known to us to own more than 5% of the outstanding shares of common stock:

	Number of Shares     Owned		Percentage of      Shares Outstanding
Enersis		4,919,488,794		60.0%

Enersis is a company primarily engaged, through its subsidiaries and related companies, in the generation and distribution of electricity in Chile, Argentina, Colombia and Peru, and in the generation, transmission and distribution of electricity in Brazil. Enersis is controlled by Endesa Spain, one of the largest Spanish electricity companies, which beneficially owns 60.6% of Enersis’ outstanding capital stock.

Since June 25, 2009, Enel has been the ultimate controlling shareholder of Endesa Chile by virtue of its 92.1% shareholding in Endesa Spain. Enel publicly trades on the Milan Stock Exchange, is headquartered in Italy and is primarily engaged in the energy sector, with a presence in 40 countries worldwide, and approximately 99 GW of net installed capacity. It provides service to more than 61 million customers through its electricity and gas businesses.

B. Related Party Transactions.

Article 146 of Law 18,046 (the “Chilean Companies Act”) defines related-party transactions as all operations involving the company and any entity belonging to the corporate group, its parent companies, controlling companies, subsidiaries or related companies, board members, managers, administrators, senior officers or company liquidators, including their spouses, some of their relatives and all entities controlled by them, in addition to individuals who may appoint at least one member of the company’s board of directors or who control 10% or more of voting capital, or companies in which a board member, manager, administrator, senior officer or company

137

liquidator has been serving in the same position within the last 18 months. The law establishes that in the event that these persons fulfill the requirements established by Article 146, such persons must immediately inform the Board of Directors of their related-party nature, or such other group as the Board may appoint for that purpose. As required by law, “related-party transactions” must comply with corporate interests, as well as prices, terms and conditions prevailing in the market at the time of their approval. They must also meet all legal requirements, including acknowledgement and approval of the transaction by the board (excluding the affected directors), by the ESM (in some cases, with requisite majority approval) and by any applicable regulatory procedures.

The aforementioned law, which also applies to Endesa Chile’ affiliates, also provides for some exceptions, stating that in certain cases, Board approval would suffice for “related-party transactions”, pursuant to certain related-party transaction thresholds and when such transactions are conducted in compliance with the related-party policies defined by the company’s board. At its meetings held on December 17, 2009 and April 23, 2010, Endesa Chile’s Board of Directors approved a related-party policy (política de habitualidad) effective as of January 1, 2010. This policy was amended by Endesa Chile’s Board of Directors at the board meeting held on April 25, 2012. This policy is available on the company’s website.

If an operation is not in compliance with Article 146, this would not affect the operation’s validity, but the company or shareholders may demand compensation from the individual associated with the infringement as provided under law, and reparation for damages. We believe that we have complied with the requirements of Article 146 in all transactions with related parties.

Our largest electricity distribution customer is Chilectra, a subsidiary of Enersis. The terms of our contracts with Chilectra are regulated in accordance with the Chilean Electricity Law.

It is the Endesa Group’s policy that all cash inflows and outflows of Endesa Chile and Endesa Chile’s Chilean subsidiaries are managed through a centralized cash management policy in coordination with Enersis. It is a common practice in Chile to transfer surplus funds from one company to another affiliate that has a cash deficit. These operations are carried out through either short-term loans or through structured inter-company loans. These operations are carried out through either short-term or structured inter-company loans. Under Chilean laws and regulations, such transactions must be carried out on an arm’s length basis. Our centralized cash management is efficient for both financial and tax reasons. All of these operations are subject to the supervision of our Directors’ Committee. As of December 31, 2013, these operations were priced at TIP (a Chilean variable interest rate) + 0.05% per month.

In other countries in which we do business, these inter-company transactions are permitted, but they have adverse tax consequences. Accordingly, we do not manage the cash flows of our non-Chilean subsidiaries.

Endesa Chile has made structured loans to its related parties in Chile, primarily to finance projects. As of December 31, 2013, the outstanding net balance for such loans was US$ 28.2 million, at an interest rate of 3.5% per annum. The largest amounts outstanding during 2013 and 2012 were US$ 28,2 million and US$ 38,5 million, respectively.

During the two-year period ended December 31, 2013, Endesa Chile granted only one loan to a foreign subsidiary, Endesa Costanera, at a spread of 6.0% over LIBOR. This loan ended in November 2013, because it was contributed to Endesa Costanera in connection with its capital increase. The largest amount outstanding during 2013 and 2012 for such loan was US$ 7.1 million.

During 2013, Endesa Chile obtained two structured loans from Enersis, primarily to finance projects. As of December 31, 2013, the outstanding net balance for such loans was Ch$ 196 billion composed of a Ch$ 67 billion loan with a fixed interest rate of 6.36% of which Ch$ 31.5 billion was repaid in January 2014 and Ch$ 35.5 billion was repaid in March 2014, and a second loan for Ch$ 127 billion at fixed interest rate of 5.99%, also repaid in March 2014.

As of the date of this Report, the abovementioned transactions have not experienced material changes. For more information regarding transactions with related parties, refer to Note 8 to our Consolidated Financial Statements.

138

C. Interests of Experts and Counsel.

Not applicable.

Item 8.     Financial Information

A. Consolidated Statements and Other Financial Information.

See Item 18 for our Consolidated Financial Statements.

Legal Proceedings

We and our subsidiaries are parties to legal proceedings arising in the ordinary course of business. We believe it is unlikely that any loss associated with pending lawsuits will significantly affect the normal development of our business.

For detailed information as of December 31, 2013 on the status of the material pending lawsuits that have been filed against the Company or its subsidiaries, please refer to Note 32.3 to our Consolidated Financial Statements. In 2009, the Company adopted IFRS, and in relation to the legal proceedings reported in the Notes to the Consolidated Financial Statements, the Company decided to use the criteria of disclosing lawsuits above a minimum threshold of US$ 15 million of potential impact to Endesa Chile, and, in some cases, qualitative criteria according to the materiality of the impact in the conduct of our business. The lawsuit status includes a general description, the process status and the estimate of the amount involved in each lawsuit.

Dividend Policy

The Board generally establishes a definitive dividend payable each year, and attributable to the prior year, which cannot be less than the legal minimum of 30% of annual net income before negative goodwill amortization. As agreed at a meeting held on February 27, 2014, the Board of Directors will propose to the OSM that is expected to be held on April 22, 2014, the payment of a definitive dividend of Ch$ 17.698562 per share for fiscal year 2013, equal to a payout ratio of 50% (based on annual net income before negative goodwill amortization). The provisional dividend of Ch$ 3.87772 per share paid on January 31, 2014, will be deducted from the definitive dividend to be paid on May 15, 2014.

The Board of Directors also approved a dividend policy for fiscal year 2014 according to which a provisional dividend will be paid to stockholders equal to 15% of the net income accumulated through September 30, 2014. The Board of Directors will propose a definitive dividend payout equal to 50% of the annual net income for fiscal year 2014. Actual dividend payments will be subject to net profits obtained in each period, as well as to expectations of future profit levels and other conditions that may exist at the time of such dividend declaration. The fulfillment of the aforementioned dividend policy will depend on actual 2014 net income. The proposed dividend policy is subject to the Board of Director’s prerogative to change the amount and timing of the dividends under the circumstances at the time of the payment.

Currently, there are no restrictions on the ability of Endesa Chile or any of its subsidiaries to pay dividends, other than certain legal restriction of limiting the amount of dividends to net income and retained earnings and in the event of specific circumstances under the conditions of certain credit agreements, including that Endesa Costanera and El Chocón may not pay dividends unless they comply with certain financial covenants. In general terms, companies may not pay dividends in case of default on credit agreements. (See “Item 5. Operating and Financial Review and Prospects — B. Liquidity and capital resources” for further detail on Endesa Chile debt instruments).

Stockholders set dividend policies at each subsidiary and affiliate. There are currently no material currency controls which prohibit Endesa Chile from repatriating the dividend payments from its non-Chilean principal subsidiaries and affiliates.

139

The Company pays dividends to shareholders of record as of five business days before the payment date. Holders of ADS on the applicable record dates will be entitled to participate in all future dividends.

Dividends

The table below sets forth, for each of the years indicated, the per share amounts of dividends distributed by the Company in Chilean pesos and the amount of dividends distributed per ADS (one ADS = 30 shares of common stock) in U.S. dollars. See “Item 10. Additional Information — D. Exchange Controls.”

	Dividends distributed (1)
Year	Nominal Ch$     per Share		US$       per ADS (2)
2013		14.29		0.82
2012		27.24		1.70
2011		32.53		1.88
2010		17.53		1.12
2009		25.25		1.49

(1) This chart details dividends paid in any given year and not the dividends accrued in that year. These dividends may have been accrued during the prior year or the same year in which they were paid. These amounts do not reflect reduction for any applicable Chilean withholding tax.

(2) The U.S. dollar per ADS amount has been calculated by applying the exchange rate for December 31 of each year. One ADS = 30 shares of common stock.

For a discussion of Chilean withholding taxes and access to the formal currency market in Chile in connection with the payment of dividends and sales of ADSs and the underlying Common Stock, see “Item 10. Additional Information — E. Taxation” and “Item 10. Additional Information — D. Exchange Controls.”

B. Significant Changes

None.

Item 9.     The Offer and Listing

A. Offer and Listing Details.

Market Price Information

The shares of our common stock currently trade on Chilean, United States and Spanish exchanges.

140

The table below shows, for the periods indicated, high and low prices in Chilean pesos on the Santiago Stock Exchange and high and low closing prices of the ADSs in U.S. dollars as reported by the NYSE.

	Santiago Stock Exchange (1)				U.S. Stock Exchanges (2)
	Ch$ per share				US$ per ADS
	High		Low		High		Low
2014		800.00		698.09		44.43		37.63
March		796.70		738.50		43.59		38.73
February		779.00		700.10		42.75		37.63
January		800.00		698.09		44.43		37.77
2013		854.00		663.04		54.02		38.26
December		798.00		760.00		45.11		42.50
November		795.00		746.85		46.14		42.79
October		785.00		702.70		47.67		41.64
September		759.90		677.84		45.58		39.73
4th Quarter		798.00		702.70		47.67		41.64
3rd Quarter		775.60		663.04		45.58		38.26
2nd Quarter		854.00		685.00		54.02		40.11
1st Quarter		839.99		767.25		53.43		48.76
2012		899.00		710.00		55.96		44.05
4th Quarter		785.00		710.00		49.89		44.53
3rd Quarter		888.90		747.90		54.31		47.43
2nd Quarter		899.00		790.90		55.96		46.50
1st Quarter		884.90		740.00		54.91		44.05
2011		908.00		700.01		58.23		39.28
2010		948.00		774.00		58.42		42.47
2009		905.00		708.00		52.30		33.28

(1) Source: Santiago Stock Exchange.

(2) Source: NYSENET. Endesa Chile’s ADS composite figures include transactions in all U.S. stock exchanges. One ADS = 30 shares of common stock.

On the last trading day in 2013, the common stock closed at Ch$ 782.77 per share on the Santiago Stock Exchange and the ADS closed at US$ 44.58 on the NYSE.

On March 31, 2014, the common stock closed at Ch$ 792.63 per share on the Santiago Stock Exchange and the ADS closed at US$ 43.18 on the NYSE.

B. Plan of Distribution.

Not applicable.

C. Markets.

In Chile, the Company’s stock is traded on three stock exchanges: the Santiago Stock Exchange, the Electronic Stock Exchange and the Valparaíso Stock Exchange. The largest exchange in the country, the Santiago Stock Exchange, was established in 1893 as a private company. Its equity consists of 48 shares held by 44 stockholders as of the date of this Report. As of December 31, 2013, 227 companies had shares listed on the Santiago Stock Exchange. For the year ended 2013, the Santiago Stock Exchange accounted for 86.1% of Endesa Chile’s total equity traded in Chile and amounted to 1,246,414,650 shares. In addition, approximately 13.7% of Endesa Chile’s equity trading was conducted on the Electronic Stock Exchange, an electronic trading market that was created by banks and non-member brokerage houses, and 0.2% was traded on the Valparaíso Stock Exchange.

141

Equities, closed-end funds, fixed-income securities, short-term and money market securities, gold and U.S. dollars are traded on the Santiago Stock Exchange. The Santiago Stock Exchange also trades U.S. dollar futures and stock index futures. Securities are traded primarily through an open voice auction system; a firm offers system or the daily auction. Trading through the open voice system occurs on each business day from 9:30 a.m. to 4:00 p.m., during local standard time, and from 9:30 a.m. to 5:00 p.m. during daylight savings time, which differs from New York City time by up to two hours, depending on the season. The Santiago Stock Exchange has an electronic trading system called Telepregón, which operates continuously from 9:30 a.m. to 4:00 p.m. during local standard time, and from 9:00 a.m. to 5:00 p.m. during daylight savings time, on each business day. During local standard time, electronic auctions may be conducted four times a day, at 10:30 a.m., 11:30 a.m., 1:30 p.m., and 3:30 p.m. During daylight savings time there is an additional electronic auction at 4:30 p.m. More than 99% of the auctions and transactions take place electronically.

There are two share price indexes on the Santiago Stock Exchange: the General Shares Price Index, or IGPA, and the Selected Shares Price Index, or IPSA. The IGPA is calculated using the prices of shares that are traded at least 5% of the trading days of a year, with a total annual transactions exceeding UF 10,000 (Ch$ 231 million as of December 31, 2013) and a free float of at least 5%. The IPSA is calculated using the prices of the 40 shares with higher amounts traded, on a quarterly basis, with market capitalization above US$ 200 million. The shares included in the IPSA and IGPA are weighted according to the weighted value of the shares traded. Endesa Chile has been included in the IPSA since the beginning of its privatization process in 1987.

Shares of our common stock have traded in the United States in the form of ADSs on the New York Stock Exchange (“NYSE”) since 1994 under the ticker symbol “EOC”. Each ADS represents 30 shares of common stock, with the ADSs in turn evidenced by American Depositary Receipts (ADRs). The ADRs are outstanding under the Amended and Restated Deposit Agreement dated as of September 30, 2010, among us, Citibank, N.A. as Depositary, and the holders and beneficial owners from time to time of ADRs issued thereunder. Only persons in whose names ADRs are registered on the books of the Depositary are treated by the Depositary as owners of ADRs.

As of March 31, 2014, ADRs evidencing 9,401,747 ADSs (equivalent to 282,052,410 shares of common stock) were outstanding, representing 3.45% of the total number of outstanding shares. It is not practicable for the Company to determine the proportion of ADSs beneficially owned by U.S. final beneficial holders. Trading of our shares on the NYSE and other exchanges during 2013 amounted to approximately 770 million ADSs, which in turn was equivalent to US$ 1,189 million.

The NYSE is open for trading Monday through Friday from 9:30 am to 4:00 pm, with the exception of holidays declared by the NYSE in advance. On the trading floor, the NYSE trades in a continuous auction format, where traders can execute stock transactions on behalf of investors. Specialist brokers act as auctioneers in an open outcry auction market to bring buyers and sellers together and to manage the actual auction. Customers can also send orders for immediate electronic execution, or route orders to the floor for trade in the auction market. The NYSE works with U.S. regulators like the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) to coordinate risk management measures in the electronic trading environment through the implementation of mechanisms like circuit breakers and liquidity replenishment points.

Shares of Endesa Chile were first listed and began trading on the Bolsa de Valores Latinoamericanos de la Bolsa de Madrid (“Latibex”) as of December 2001, under the ticker symbol “XEOC”. Until April 2011, a trading unit represented 30 shares of common stock (the same unit conversion of 30:1 as an ADS), but since May 2011 the equivalence changed to a 1:1 ratio. Santander Investment S.A. acts as the liaison entity, and Banco Santander-Chile as the Depositary Bank in Chile. Trading of our shares on the Latibex during 2013 amounted to approximately 2.3 million units, which in turn was equivalent to € 2.51 million. The stock closed at € 1.02 on the last 2013 trading day.

142

The following table contains information regarding the amount of total traded shares of common stock and the corresponding percentage traded per market during 2013:

	Endesa Chile
	Number of common     shares		Percent
Market
Chile (1)		1,448,191,935		65.2%
United States (One ADS = 30 common shares) (2)		770,439,360		34.7%
Spain (3)		2,258,629		0.1%
Total		2,220,889,924		100.0%

(1) Includes Santiago Stock Exchange, Electronic Stock Exchange and Valparaíso Stock Exchange.

(2) Includes the New York Stock Exchange and over-the-counter trading.

(3) Latibex.

For further information see “Item 9. The Offer and Listing — A. Offer and Listing Details — Market Price Information.”

D. Selling Shareholders.

Not applicable

E. Dilution.

Not applicable.

F. Expense of the Issue.

Not applicable.

Item 10.    Additional Information

A. Share Capital.

Not applicable.

B. Memorandum and Articles of Association.

Description of Share Capital

Set forth below is certain information concerning our share capital and a brief summary of certain significant provisions of our bylaws and Chilean law.

General

Shareholders’ rights in Chilean companies are governed by the company’s bylaws, which serve the same purpose as the articles or certificate of incorporation and the bylaws of a company incorporated in the United States, and by Law 18,046 (the Chilean Companies Act). In addition, D.L. 3500, or the Pension Funds’ System Law, which permits the investment by Chilean pension funds in stock of qualified companies, indirectly affects corporate governance and prescribes certain rights of shareholders. In accordance with the Chilean Companies Act, legal actions by shareholders to enforce their rights as shareholders of the company must be brought in Chile in arbitration proceedings or, at the option of the plaintiff, before Chilean courts. Members of the board of directors, managers, officers and principal executives of the company, or shareholders that individually own shares with book value or stock value higher that UF 5,000 (Ch$ 116 million as of December 31, 2013) do not have the option to bring the procedure to the courts.

143

The Chilean securities markets are principally regulated by the Superintendency of Securities and Insurance, or SVS, under Law 18,045 (the Securities Market Law), and the Chilean Companies Act. These two laws provide for disclosure requirements, restrictions on insider trading and price manipulation, and protection of minority shareholders. The Securities Market Law sets forth requirements for public offerings, stock exchanges and brokers, and outlines disclosure requirements for companies that issue publicly offered securities. The Chilean Companies Act and the Securities Market Law, both as amended, provide rules regarding takeovers, tender offers, transactions with related parties, qualified majorities, share repurchases, directors’ committee, independent directors, stock options and derivative actions.

Public Register

Endesa Chile is a publicly held stock corporation incorporated under the laws of Chile. Endesa Chile was constituted by public deed issued on December 1, 1943 by the Santiago Notary Public Mr. Luciano Hiriart C. Its existence and bylaws were approved by Decree No. 97 of the Ministry of Finance on January 3, 1944. An excerpt of the bylaws was registered on page 61, and the Decree was registered on page 65 in the Commercial Registrar (Registro de Comercio del Conservador de Bienes Raíces y Comercio de Santiago), on January 17, 1944. Endesa Chile is registered with the SVS and its entry number is 0114. Endesa Chile is also registered with the United States Securities and Exchange Commission and its commission file number is 1-13240.

Reporting Requirements Regarding Acquisition or Sale of Shares

Under Article 12 of the Securities Market Law and General Rule 269 of the SVS, certain information regarding transactions in shares of a publicly held stock corporation or in contracts or securities whose price or results depend on or are conditioned in whole or in part on the price of such shares must be reported to the SVS and the Chilean stock exchanges. Since American Depositary Shares (ADS) are deemed to represent the shares of common stock underlying the American Depositary Receipts (ADRs), transactions in ADRs will be subject to these reporting requirements and those established in Circular 1375 of the SVS. Shareholders of publicly held stock corporations are required to report to the SVS and the Chilean stock exchanges:

— any direct or indirect acquisition or sale of shares made by a holder who owns directly or indirectly at least 10% of a publicly held stock corporation’s subscribed capital;

— any direct or indirect acquisition or sale of contracts or securities whose price or results depend on or are conditioned in whole or in part on the price of shares made by a holder who owns directly or indirectly at least 10% of a publicly held stock corporation’s subscribed capital;

— any direct or indirect acquisition or sale of shares made by a holder who, due to an acquisition of shares of such publicly held stock company, results in the holder acquiring directly or indirectly at least 10% of a publicly held stock company’s subscribed capital; and

— any direct or indirect acquisition or sale of shares in any amount, made by a director, receiver, principal executive, general manager or manager of a publicly held stock company.

In addition, majority shareholders of a publicly held stock corporation must inform the SVS and the Chilean stock exchanges if such transactions are entered into with the intention of acquiring control of the company or if they are making a passive financial investment instead.

Under Article 54 of the Securities Market Law and General Rule 104 enacted by the SVS, any person who directly or indirectly intends to take control of a publicly held stock corporation must disclose this intent to the market at least ten business days in advance of the proposed change of control and, in any event, as soon as the negotiations for the change of control have taken place or reserved information of the publicly held stock corporation has been provided.

144

Corporate Objectives and Purposes

Article 4 of our bylaws states that our corporate objectives and purposes are, among other things, to exploit the production, transportation, distribution and supply of electric power, as well as to provide engineering consultant services, directly or through other companies, in Chile and abroad.

Board of Directors

Our Board of Directors is comprised of nine members who are appointed by shareholders at the OSM of the Company and are elected for a period of three years, at the end of which they will be re-elected or replaced.

The nine directors elected at the OSM are the nine individual nominees who receive the highest majority of the votes. Each shareholder may vote his shares in favor of one nominee or may apportion his shares among any number of nominees.

The effect of these voting provisions is to ensure that a shareholder owning more than 10% of our shares is able to elect a member of the Board.

The compensation of the directors is set annually at the OSM. See “Item 6. Directors, Senior Management and Employees — B. Compensation.”

Agreements entered into by Endesa Chile with related parties can only be executed when such agreements serve the interest of the Company, and their price, terms and conditions are consistent with prevailing market conditions at the time of their approval and comply with all the requirements and procedures indicated in Article 147 of the Chilean Companies Act.

Certain Powers of the Board of Directors

Our bylaws provide that every agreement or contract that the Company enters into with its controlling shareholder, its directors or executives, or with their related parties, must be previously approved by two thirds of the Board of Directors and be included in the Board meetings and must comply with the provisions of the Chilean Companies Act.

Our bylaws do not contain provisions relating to:

— the directors’ power, in the absence of an independent quorum, to vote on compensation for themselves or any members of their body;

— borrowing powers exercisable by the directors and how such borrowing powers can be varied;

— retirement or non-retirement of directors under an age limit requirement; or

— number of shares, if any, required for directors’ qualification.

Certain Provisions Regarding Shareholder Rights

As of the date of the filing of this Report, Endesa Chile’s capital is comprised of only one class of shares, all of which are ordinary shares and have the same rights.

Our bylaws do not contain any provisions relating to:

— redemption provisions;

— sinking funds; or

— liability for capital calls by the Company.

145

Under Chilean law, the rights of holders of stock of the Company may only be changed by an amendment to the bylaws that complies with the requirements explained below under “Item 10. Additional Information — B. Memorandum and Articles of Association — Shareholders’ Meetings and Voting Rights.”

Capitalization

Under Chilean law, only the shareholders of a company acting at an ESM have the power to authorize a capital increase. When an investor subscribes for shares, these are officially issued and registered under his name, and the subscriber is treated as a shareholder for all purposes, except receipt of dividends and for return of capital in the event that the shares have been subscribed but not paid for. The subscriber becomes eligible to receive dividends only for the shares that he has actually paid for or, if he has paid for only a portion of such shares, the pro rata portion of the dividends declared with respect to such shares unless the company’s bylaws provide otherwise. If a subscriber does not fully pay for shares for which he has subscribed on or prior to the date agreed upon for payment, notwithstanding the actions intended by the company to collect payment, the company is entitled to auction the shares on the stock exchange where such shares are traded, for the account and risk of the debtor, the number of shares held by the debtor necessary for the company to pay the outstanding balances and disposal expenses. However, until such shares are sold at auction, the subscriber continues to hold all the rights of a shareholder, except the right to receive dividends and return of capital. The chief executive officer or the person replacing him will reduce in the shareholders’ register the number of shares in the name of the debtor shareholder to the number of shares that remain, deducting the shares sold by the company and settling the debt in the amount necessary to cover the result of such disposal after the corresponding expenses. When there are authorized and issued shares for which full payment has not been made within the period fixed by shareholders at the same ESM at which the subscription was authorized (which in no case may exceed three years from the date of such meeting), these shall be reduced in the non-subscribed amount until that date. With respect to the shares subscribed and not paid following the term mentioned above, the Board must proceed to collect payment, unless the shareholders’ meeting authorizes (by two thirds of the voting shares) a reduction of the company’s capital to the amount effectively collected, in which case the capital shall be reduced by force of law to the amount effectively paid. Once collection actions have been exhausted, the Board should propose to the shareholders’ meeting the approval by simple majority of the write-off of the outstanding balance and the reduction of capital to the amount effectively recovered.

As of December 31, 2013, the subscribed and fully paid capital of the Company totaled Ch$ 1,332 billion and consisted of 8,201,754,580 shares.

Preemptive Rights and Increases of Share Capital

The Chilean Companies Act requires Chilean companies to grant shareholders preemptive rights to purchase a sufficient number of shares to maintain their existing ownership percentage of such company whenever such company issues new shares.

Under Chilean law, preemptive rights are exercisable or freely transferable by shareholders during a 30-day period following the day the capital increase is made public. The options to subscribe for shares in capital increases of the company or of any other securities convertible into shares or that confer future rights over these shares, should be offered, at least once, to the shareholders pro rata to the shares held registered in their name at midnight on the fifth business day prior to the date of the start of the preemptive rights period. The preemptive rights offering and the start of the 30-day period for exercising them shall be communicated through the publication of a prominent notice, at least once, in the newspaper that should be used for notifications of shareholders’ meetings. During such 30-day period, and for an additional period of up to 30-days immediately following the initial 30-day period, publicly held stock corporations are not permitted to offer any unsubscribed shares to third parties on terms which are more favorable than those offered to their shareholders. At the end of the second 30-day period, a Chilean publicly held stock corporation is authorized to sell non-subscribed shares to third parties on any terms, provided they are sold on one of the Chilean stock exchanges.

Shareholders’ Meetings and Voting Rights

An OSM must be held within the first four months following the end of our fiscal year. The last OSM was held on April 15, 2013. An ESM may be called by the board of directors when deemed appropriate, or when requested by shareholders representing at least 10% of the issued shares with voting rights or by the SVS. To convene an OSM, or an ESM, notice must be given three times in a newspaper located in our corporate domicile. The newspaper designated by our shareholders is El Mercurio de Santiago. The first notice must be published not less than 15 days and no more than 20 days in advance of the scheduled meeting. Notice must also be mailed to each shareholder, to the SVS and to the Chilean stock exchanges.

146

The OSM shall be held on the day stated in the notice and should remain in session until having exhausted all the matters stated in the notice. However, once constituted, upon the proposal of the chairman or shareholders representing at least 10% of the shares with voting rights, the majority of the shareholders present may agree to suspend it and to continue it within the same day and place, no new constitution of the meeting nor qualification of powers being necessary, recorded in one set of minutes. Only those shareholders who were present or represented may attend the recommencement of the meeting with voting rights.

Under Chilean law, a quorum for a shareholders’ meeting is established by the presence, in person or by proxy, of shareholders representing at least a majority of the issued shares with voting rights of a company. If a quorum is not present at the first meeting, a reconvened meeting can take place at which the shareholders present are deemed to constitute a quorum regardless of the percentage of the shares represented. The second meeting must take place within 45 days following the scheduled date for the first meeting. Shareholders’ meetings adopt resolutions by the affirmative vote of a majority of those shares present or represented at the meeting. An ESM must be called to take the following actions:

— a transformation of the company into a form other than a publicly held stock corporation under the Chilean Companies Act, a merger or split-up of the company;

— an amendment to the term of duration or early dissolution of the company;

— a change in the corporation’s domicile;

— a decrease of corporate capital;

— an approval of capital contributions in kind and non-monetary assessments;

— a modification of the authority reserved to shareholders or limitations on the board of directors;

— a reduction in the number of members of the board of directors;

— a disposition of 50% or more of the assets of the corporation, whether it includes disposition of liabilities or not, as well as the approval or the amendment of the business plan which contemplates the disposition of assets in an amount greater that such percentage;

— the disposition of 50% or more of the assets of a subsidiary, as long as such subsidiary represents at least 20% of the assets of the corporation, as well as any disposition of its shares that results in the parent company losing its position as controller;

— the form of distributing corporate benefits;

— issue of guarantees for third-party liabilities which exceed 50% of the assets, except when the third party is a subsidiary of the company, in which case approval of the board of directors is deemed sufficient;

— the purchase of the corporation’s own shares;

— others established by the bylaws or the laws;

— certain remedies for the nullification of the corporate bylaws;

— inclusion in the bylaws of the right to purchase shares from minority shareholders, when the controlling shareholders reaches 95% of the company’s shares by means of a tender offer for all of the company’s shares, where at least 15% of the shares have been acquired from unrelated shareholders;

— approval or ratification of acts or contracts with related parties.

147

Regardless of the quorum present, the vote required for any of the actions above is at least two-thirds of the outstanding shares with voting rights.

Bylaw amendments for the creation of a new class of shares, or an amendment to or an elimination of those classes of shares that already exist, must be approved by at least two-thirds of the outstanding shares of the affected series.

Chilean law does not require a publicly held stock corporation to provide its shareholders the same level and type of information required by the securities laws regarding the solicitation of proxies. However, shareholders are entitled to examine the financial statements of a publicly held stock corporation within the 15-day period before its scheduled OSM. Under Chilean law, a notice of a shareholders meeting listing matters to be addressed at the meeting must be mailed at least 15 days prior to the date of such meeting, and, an indication of the way complete copies of the documents that support the matters submitted for voting can be obtained, which must also be made available to shareholders on the Company’s website. In the case of an OSM, the annual report of the Company’s, activities which includes audited financial statements, must also be made available to shareholders and published on the Company’s website at: www.endesa.cl.

The Chilean Companies Act provides that, upon the request by the Directors’ Committee or by shareholders representing at least 10% of the issued shares with voting rights, a Chilean company’s annual report must include, in addition to the materials provided by the board of directors to shareholders, such shareholders’ comments and proposals in relation to the company’s affairs. In accordance with article 136 of the Chilean Companies Regulation (“Reglamento de Sociedades Anónimas”), the shareholder(s) holding or representing 10% or more of the shares issued with voting rights, may:

— make comments and proposals relating to the progress of the corporate businesses in the corresponding year, no shareholder being able to make individually or jointly more than one presentation. These observations should be presented in writing to the company concisely, responsibly and respectfully, and the respective shareholder(s) should state their willingness for these to be included as an appendix to the annual report. The board shall include in an appendix to the annual report of the year a faithful summary of the pertinent comments and proposals the interested parties had made, provided they are presented during the year or within 30 days after its ending;

— make comments and proposals on matters that the board submits for the knowledge or voting of the shareholders. The board shall include a faithful summary of those comments and proposals in all information it sends to shareholders, provided the shareholders’ proposal is received at the offices of the company at least 10 days prior to the date of dispatch of the information by the company. The shareholders should present their comments and proposals to the company, expressing their willingness for these to be included in the appendix to the respective annual report or in information sent to shareholders, as the case may be. The observations referred to in this Article may be made separately by each shareholder holding 10% or more of the shares issued with voting rights or shareholders who together hold that percentage, who should act as one.

Similarly, the Chilean Companies Act provides that whenever the board of directors of a publicly held stock corporation convenes an OSM and solicits proxies for the meeting, or circulates information supporting its decisions or other similar material, it is obligated to include the pertinent comments and proposals that may have been made by the Directors’ Committee or by shareholders owning 10% or more of the shares with voting rights who request that such comments and proposals be so included.

Only shareholders registered as such with Endesa Chile as of 11:59 p.m. on the fifth business days prior to the date of a meeting are entitled to attend and vote their shares. A shareholder may appoint another individual, who does not need to be a shareholder, as his proxy to attend the meeting and vote on his behalf. Proxies for such representation shall be given for all the shares held by the owner. The proxy may contain specific instructions to approve, reject or abstain with respect to any of the matters submitted for voting at the meeting and which were included in the notice. Every shareholder entitled to attend and vote at a shareholders’ meeting shall have one vote for every share subscribed.

148

There are no limitations imposed by Chilean law or the company’s bylaws on the right of nonresidents or foreigners to hold or vote shares of common stock. However, the registered holder of the shares of common stock represented by ADSs, and evidenced by outstanding ADSs, is the custodian of the Depositary, currently Banco Santander-Chile, or any successor thereto. Accordingly, holders of ADSs are not entitled to receive notice of meetings of shareholders directly or to vote the underlying shares of common stock represented by ADS directly. The Deposit Agreement contains provisions pursuant to which the Depositary has agreed to solicit instructions from registered holders of ADSs as to the exercise of the voting rights pertaining to the shares of common stock represented by the ADSs. Subject to compliance with the requirements of the Deposit Agreement and receipt of such instructions, the Depositary has agreed to endeavor, insofar as practicable and permitted under Chilean law and the provisions of the bylaws, to vote or cause to be voted (or grant a discretionary proxy to the Chairman of the Board of Directors of the Company or to a person designated by the Chairman of the Board of Directors of the Company to vote) the shares of common stock represented by the ADSs in accordance with any such instruction. The Depositary shall not itself exercise any voting discretion over any shares of common stock underlying ADSs. If no voting instructions are received by the Depositary from a holder of ADSs with respect to the shares of common stock represented by the ADSs, on or before the date established by the Depositary for such purpose, the shares of common stock represented by the ADS, may be voted in the manner directed by the Chairman of the Board of the Company, or by a person designated by the Chairman of the Board of the Company, subject to limitations set forth in the Deposit Agreement.

Dividends and Liquidation Rights

According to the Chilean Companies Act, unless otherwise decided by unanimous vote of its issued shares eligible to vote, all companies must distribute a cash dividend in an amount equal to at least 30% of their consolidated net income, before amortization and negative goodwill for each year (calculated according to the local accounting rules applicable to the Company when preparing financial statements to be submitted to the SVS), unless and except to the extent the Company has carried forward losses. The law provides that the board of directors must agree to the dividend policy and inform such policy to the shareholders at the OSM.

Any dividend in excess of 30% of net income may be paid, at the election of the shareholder, in cash, in Endesa Chile’s shares or in shares of publicly held corporations held by Endesa Chile. Shareholders who do not expressly elect to receive a dividend other than in cash are legally presumed to have decided to receive the dividend in cash.

Dividends which are declared but not paid within the appropriate time period set forth in the Chilean Companies Act (as to minimum dividends, 30 days after declaration; as to additional dividends, the date set for payment at the time of declaration) are adjusted to reflect the change in the value of UF, from the date set for payment to the date such dividends are actually paid. Such dividends also accrue interest at the then-prevailing rate for UF-denominated deposits during such period. The right to receive a dividend lapses if it is not claimed within five years from the date such dividend is payable. Payments not collected in such period are transferred to the volunteer Fire Department.

In the event of a liquidation of Endesa Chile, the holders of shares would participate in the assets available in proportion to the number of paid-in shares held by them, after payment to all creditors.

Approval of Financial Statements

The Board of Directors is required to submit Endesa Chile’s consolidated financial statements to the shareholders annually for their approval. If the shareholders by a vote of a majority of shares present (in person or by proxy) at the shareholders’ meeting reject the financial statements, the Board of Directors must submit new financial statements no later than 60 days from the date of such meeting. If the shareholders reject the new financial statements, the entire Board of Directors is deemed removed from office and a new board is elected at the same meeting. Directors who individually approved such financial statements are disqualified for reelection for the following period. Our shareholders have never rejected the financial statements presented by the Board of Directors.

149

Change of Control

The Capital Markets Law establishes a comprehensive regulation related to tender offers. The law defines a tender offer as the offer to purchase shares of companies which publicly offer their shares or securities convertibles into shares and which offer is made to shareholders to purchase their shares under conditions which allow the bidder to reach a certain percentage of ownership of the company within a fixed period of time. These provisions apply to both voluntary and hostile tender offers.

Acquisition of Shares

There are no provisions in our bylaws that discriminate against any existing or prospective holder of shares as a result of such shareholder owning a substantial number of shares. However, no person may directly or indirectly own more than 65% of the outstanding shares of our stock. The foregoing restriction does not apply to the depositary as record owner of shares represented by ADRs, but it does apply to each beneficial ADS holder. Additionally, our bylaws prohibit any shareholder from exercising voting power with respect to more than 65% of the common stock owned by such shareholder or on behalf of others representing more than 65% of the outstanding issued shares with voting rights.

Right of Dissenting Shareholders to Tender Their Shares

The Chilean Companies Act provides that upon the adoption of any of the resolutions enumerated below at a meeting of shareholders, dissenting shareholders acquire the right to withdraw from the company and to compel the company to repurchase their shares, subject to the fulfillment of certain terms and conditions. In order to exercise such withdrawal rights, holders of ADRs must first withdraw the shares represented by their ADRs pursuant to the terms of the deposit agreement.

“Dissenting” shareholders are defined as those who at a shareholders’ meeting vote against a resolution that results in the withdrawal right, or who if absent from such meeting, state in writing their opposition to the respective resolution, within the 30 days following the shareholders’ meeting. Shareholders present or represented at the meeting and who abstain in exercising their voting rights, shall not be considered as dissenting. The right to withdraw should be exercised for all the shares that the dissenting shareholder had registered in their name on the date on which the right is determined to participate in the meeting at which the resolution is adopted that motivates the withdrawal and which remains on the date on which their intention to withdraw is communicated to the company. The price paid to a dissenting shareholder of a publicly held stock corporation whose shares are quoted and actively traded on one of the Chilean stock exchanges, is the greater of (i) the weighted average of the sales prices for the shares as reported on the Chilean stock exchanges on which the shares are quoted for the two-month period between the ninetieth and the thirtieth day before the shareholders’ meeting giving rise to the withdrawal right, and (ii) the market price resulting from the average price of transactions on such day. If, because of the volume, frequency, number and diversity of the buyers and sellers, the SVS determines that the shares are not actively traded on a stock exchange, the price paid to the dissenting shareholder shall be the book value. Book value for this purpose shall equal paid capital plus reserves and profits, less losses, divided by the total number of subscribed shares, whether entirely or partially paid. For the purpose of making this calculation, the last consolidated statements of financial position is used, as adjusted to reflect inflation up to the date of the shareholders’ meeting which gave rise to the withdrawal right.

Article 126 of the Chilean Companies Regulation establishes that in cases where the right to withdraw arises, the company shall be obliged to inform the shareholders of this situation, the value per share that will be paid to shareholders exercising their right to withdraw and the term for exercising it. Such information should be given to shareholders at the same meeting at which the resolutions are adopted giving rise to the right of withdrawal, prior to its voting. A special communication should be given to the shareholders with rights, within two days following the date on which the rights to withdraw are born. In the case of publicly held companies, such information shall be communicated by a prominent notice in a newspaper with a wide national circulation and on its web site, plus a written communication addressed to the shareholders with rights at the address they have registered with the company. The notice of the shareholders meeting that should pronounce on a matter that could originate withdrawal rights should mention this circumstance.

150

The resolutions that result in a shareholder’s right to withdraw include, among others, the following:

— the transformation of the company into an entity which is not a publicly held stock corporation governed by Chilean Companies Act;

— the merger of the company with another company;

— disposition of 50% or more of the assets of the corporation, whether it includes disposition of liabilities or not, as well as the approval or the amendment of the business plan which contemplates the disposition of assets in an amount greater than such percentage;

— the disposition of 50% or more of the assets of a subsidiary, as long as such subsidiary represents at least 20% of the assets of the corporation, as well as any disposition of its shares that results in the parent company losing its position of controller;

— issue of guarantees for third parties’ liabilities which exceed 50% of the assets (if the third party is a subsidiary of the company, the approval of the board of directors is sufficient);

— the creation of preferential rights for a class of shares or an amendment to the existing ones. In this case the right to withdraw only accrues to the dissenting shareholders of the class or classes of shares adversely affected;

— certain remedies for the nullification of the corporate bylaws; and

— such other causes as may be established by the law or by the company’s bylaws.

Investments by AFPs

The Pension Funds’ System Law permits AFPs to invest their funds in companies that are subject to Title XII and, subject to greater restrictions, in other companies. The determination of which stocks may be purchased by AFPs is made by the Risk Classification Committee. The Risk Classification Committee establishes investment guidelines and is empowered to approve or disapprove those companies that are eligible for AFP investments. Endesa Chile has been a Title XII Company since 1987 and is approved by the Risk Classification Committee.

Title XII companies are required to have bylaws that limit the ownership of any shareholder to a specified maximum percentage, bylaws that require that certain actions be taken only at a meeting of the shareholders and bylaws that give the shareholders the right to approve certain investment and financing policies.

Registrations and Transfers

Shares issued by Endesa Chile are registered with an administrative agent named DCV Registros S.A. This entity is responsible for Endesa Chile’s shareholders registry as well. In case of jointly owned shares, an attorney-in-fact must be appointed to represent the joint owners in dealing with Endesa Chile.

C. Material Contracts

None.

D. Exchange Controls

The Central Bank of Chile is responsible for, among other things, monetary policies and exchange controls in Chile. Currently applicable foreign exchange regulations are set forth in the Compendium of Foreign Exchange Regulations (the “Compendium”) approved by the Central Bank of Chile in 2002. Appropriate registration of a foreign investment in Chile permits the investor access to the Formal Exchange Market. Foreign investments can be registered with the Foreign Investment Committee under D.L. 600 of 1974 or can be registered with the Central Bank of Chile under the Central Bank Act, Law 18840 of October 1989.

151

a) Foreign Investments Contracts and Chapter XXVI

In connection with our initial public offering of ADS in 1994, we entered into a foreign investment contract (the “Foreign Investment Contract”) with the Central Bank of Chile and the Depositary, pursuant to Article 47 of the Central Bank Act and Chapter XXVI of the former Compendium of Foreign Exchange Regulations (“Chapter XXVI”), which governed the issuance of ADS by a Chilean company. Pursuant to the Foreign Investment Contract, the foreign exchange for payments and distributions with respect to the ADS could be purchased in either the Formal Exchange Market or the Informal Exchange Market, but such payments needed to be remitted through the Formal Exchange Market.

As of April 19, 2001, Chapter XXVI was eliminated and new investments in ADSs by non-residents of Chile are now governed instead by Chapter XIV of the Compendium. This change was made with the purpose of simplifying and facilitating the flow of capital to and from Chile. As a result of the elimination of Chapter XXVI, access to the Formal Exchange Market is no longer assured. However, because our Foreign Investment Contract was entered into pursuant to Chapter XXVI, the principles of Chapter XXVI still apply to its terms. Foreign investors who have purchased their shares under a Foreign Investment Contract pursuant to Chapter XXVI continue to have access to the Formal Exchange Market for the purpose of converting pesos to U.S. dollars and repatriating from Chile amounts received with respect to the deposited shares of common stock or shares of common stock withdrawn from deposit on surrender of ADRs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying shares of common stock and any rights with respect thereto). However, foreign investors who have not deposited the shares of common stock into our ADS facility will not have the benefits of our Foreign Investment Contract with the Central Bank of Chile but instead will be subject to the normal foreign investment rules.

The following is a summary of certain provisions which were contained in Chapter XXVI and the Foreign Investment Contract, and which therefore remain relevant. This summary does not purport to be complete and is qualified in its entirety by reference to Chapter XXVI and the Foreign Investment Contract.

Under Chapter XXVI and the Foreign Investment Contract, the Central Bank of Chile agreed to grant to the depositary, on behalf of ADR holders, and to any investor not residing or domiciled in Chile who withdraws common stock upon delivery of ADRs (such shares of common stock being referred to herein as Withdrawn Shares) access to the Formal Exchange Market to convert pesos into U.S. dollars (and to remit such U.S. dollars outside of Chile), including amounts received as:

— cash dividends;

— proceeds from the sale in Chile of Withdrawn Shares subject to receipt by the Central Bank of Chile of a certificate from the holder of the Withdrawn Shares (or from an institution authorized by the Central Bank of Chile) that such holder’s residence and domicile are outside Chile and a certificate from a Chilean stock exchange (or from a brokerage or securities firm established in Chile) that such Withdrawn Shares were sold on a Chilean stock exchange;

— proceeds from the sale in Chile of rights to subscribe for additional shares of Common Stock;

— proceeds from the liquidation, merger or consolidation of our Company; and

— other distributions, including, without limitation, those resulting from any recapitalization, as a result of holding shares of Common Stock represented by ADS or Withdrawn Shares.

Transferees of Withdrawn Shares were not entitled to any of the foregoing rights under Chapter XXVI. Investors receiving Withdrawn Shares in exchange for ADRs had the right to redeposit such shares in exchange for ADRs, provided that certain conditions relating to redeposit were satisfied.

Chapter XXVI provided that access to the Formal Exchange Market in connection with dividend payments was conditioned upon certification by us to the Central Bank of Chile that a dividend payment has been made and any applicable tax has been withheld. Chapter XXVI also provided that the access to the Formal Exchange Market in connection with the sale of Withdrawn Shares or distributions thereon was conditioned upon receipt by the Central Bank of Chile of certification by the Depositary (or the Custodian on its behalf) that such shares have been withdrawn in exchange for ADRs and receipt of a waiver of the benefit of the Foreign Investment Contract with respect thereto until such Withdrawn Shares were redeposited.

152

The Foreign Investment Contract provides that a person who brings foreign currency into Chile to purchase shares of common stock with the benefit of the Foreign Investment Contract must convert it into pesos on the same day and has five banking business days within which to invest in shares of common stock in order to receive the benefits of the Foreign Investment Contract. If such person decides within such period not to acquire shares of common stock, such person can access the Formal Exchange Market to reacquire U.S. dollars, provided that the applicable request is presented to the Central Bank of Chile within seven banking business days of the initial conversion into pesos. Shares acquired as described above may be deposited for ADRs and receive the benefits of the Foreign Investment Contract, subject to receipt by the Central Bank of Chile of a certificate from the Depositary (or the Custodian on its behalf) that such deposit has been effected, that the related ADRs have been issued and receipt of a declaration from the person making such deposit waiving the benefits of the Foreign Investment Contract with respect to the deposited shares of common stock.

Access to the Formal Exchange Market under any of the circumstances described above is not automatic. Such access requires approval of the Central Bank of Chile based on a request presented through a banking institution established in Chile. The Foreign Investment Contract provides that if the Central Bank of Chile has not acted on such request within seven banking days, the request will be deemed approved.

The Compendium and International Bond Issuances

Chilean issuers may offer bonds issued by the Central Bank of Chile internationally under Chapter XIV, as amended, of the Compendium.

E. Taxation.

Chilean Tax Considerations

The following discussion summarizes material Chilean income and withholding tax consequences to foreign holders arising from the ownership and disposition of shares and ADSs and, to the extent any are issued, rights and ADS rights. The summary that follows does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of shares or ADSs and rights or ADS rights, if any, and does not purport to deal with the tax consequences applicable to all categories of investors, some of which may be subject to special rules. Holders of shares and ADSs are advised to consult their own tax advisors concerning the Chilean and other tax consequences of the ownership of shares or ADSs.

The summary that follows is based on Chilean law, as in effect on the date hereof, and is subject to any changes in these or other laws occurring after such date, possibly with retroactive effect. Under Chilean law, provisions contained in statutes such as tax rates applicable to foreign investors, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may be amended only by another law. In addition, the Chilean tax authorities enact rulings and regulations of either general or specific application and interpret the provisions of the Chilean Income Tax Law. Chilean tax may not be assessed retroactively against taxpayers who act in good faith relying on such rulings, regulations and interpretations, but Chilean tax authorities may change their rulings, regulations and interpretations in the future. The discussion that follows is also based, in part, on representations of the depositary, and assumes that each obligation in the Deposit Agreement and any related agreements will be performed in accordance with its terms. As of this date, there is currently no applicable income tax treaty in effect between the United States and Chile. However, in 2010 the United States and Chile signed an income tax treaty that will enter into force once the treaty is ratified by both countries. There can be no assurance that the treaty will be ratified by either country. The following summary assumes that there is no applicable income tax treaty in effect between the United States and Chile.

153

As used in this Report, the term “foreign holder” means either:

— in the case of an individual holder, a person who is not a resident of Chile; for purposes of Chilean taxation, an individual is resident of Chile if he or she has resided in Chile for more than six months in one calendar year, or a total of more than six months in two consecutive fiscal years; or

— in the case of a legal entity holder, an entity that is not organized under the laws of Chile, unless the shares or ADSs are assigned to a branch, agent, representative or permanent establishment of such entity in Chile.

Taxation of Shares and ADSs

Taxation of Cash Dividends and Property Distributions

General Rule: Cash dividends paid with respect to the shares or ADSs held by a foreign holder will be subject to Chilean withholding tax, which is withheld and paid by the company. As described in the example below, the amount of the Chilean withholding tax is determined by applying a 35% rate to a “grossed-up” distribution amount (such amount equal to the sum of the actual distribution amount and the correlative Chilean corporate income tax paid by the issuer), and then subtracting as a credit such correlative Chilean corporate income tax paid by the issuer. For years 2004 through 2010, the Chilean corporate income tax rate was 17%; for 2011 and hereafter the rate is 20%. The example below illustrates the effective Chilean withholding tax burden on a cash dividend received by a foreign holder, assuming a Chilean withholding tax base rate of 35%, an effective Chilean corporate income tax rate of 20% and a distribution of 50% of the net income of the company distributable after payment of the Chilean corporate income tax:

Line	Concept and calculation assumptions	Amount
1	Company taxable income (based on Line 1 = 100)		100.0
2	Chilean corporate income tax : 20% x Line 1		20.0
3	Net distributable income: Line 1 — Line 2		80.0
4	Dividend distributed (50% of net distributable income): 50% of Line 3		40
5	Withholding tax: (35% of (the sum of Line 4 and 50% of Line 2))		(17.5)
6	Credit for 50% of Chilean corporate income tax : 50% x Line 2		10
7	Net withholding tax : Line 5 + Line 6		(7.5)
8	Net dividend received: Line 4 - Line 7		32.5
9	Effective dividend withholding rate : Line 7 / Line 4		18.75%

In general, the effective Chilean dividend withholding tax rate, after giving effect to the credit for the Chilean corporate income tax paid by the company, can be computed using the following formula:

Effective Dividend Withholding Tax Rate	=	(Withholding tax rate) - (Chilean corporate income tax rate)
		1 - (Chilean corporate income tax rate)

Using the prevailing rates, the Effective Dividend Withholding Rate is

35%-20%) / (100%-20%) = 18.75%

Dividends are generally assumed to have been paid out of the Company’s oldest retained profits for purposes of determining the level of Chilean corporate income tax that was paid by the Company. For information as to the retained earnings of the Company for tax purposes and the tax credit available on the distribution of such retained earnings, see Note 15 to our Consolidated Financial Statements included in this Report.

Under Chilean Income Tax Law, dividend distributions made in property are subject to the same Chilean tax rules as cash dividends. Stock dividends that represent free shares distributed to foreign shareholders as a consequence of a capitalization made on the same corporation are not subject to Chilean taxation.

154

Exceptions: Despite the aforementioned general rule, there are special circumstances under which a different tax treatment would apply depending on the source of the income or due to special circumstances existing at the date of the dividend distribution. The most common special cases are briefly described below:

1) Circumstances where there is no corporate income tax credit against the Chilean withholding tax: These cases are when: (i) the financial book profits paid as dividends (following the seniority rule indicated above) exceed the Company’s taxable income (such dividend distributions in excess of the company’s taxable income determined as of December 31 of the distribution’s year will be subject to the Chilean withholding tax rate of 35%, without the corporate income tax credit; in relation to the provisional withholding rule applicable on the date of the dividend payment, please see number 3 below); or (ii) the income was not subject to corporate income tax due to an exemption of the Chilean corporate income tax, in which case the foreign holder will be also subject to the Chilean withholding tax rate of 35% without the corporate income tax credit.

2) Circumstances where dividends have been imputed to income exempted from all the Chilean income taxes: In these cases, dividends distributed by the company to the foreign holder will not be subject to Chilean withholding tax. Income exempted from Chilean income tax is expressly listed in the Chilean Income Tax Law.

3) Circumstances where dividends are subject to a provisional withholding tax: In the event that on the date of the dividend distribution there are no earnings on which income tax has been paid and there are no tax-exempt earnings, a 35% Chilean withholding tax with a provisional 20% Chilean corporate income tax credit is applicable. This provisional 20% Chilean corporate income tax credit granted must be confirmed with the information of Company’s taxable income as of December 31 of the year in which the dividend was paid. The company can agree with the foreign holders to withhold a higher amount in order to avoid under withholding of the Chilean withholding tax.

4) Circumstances when it is possible to use in Chile certain credits against income taxes paid abroad, or “foreign tax credit”: This occurs when dividends distributed by the Chilean company have as their source income generated by companies domiciled in third countries. If that income was subject to withholding tax or corporate income tax in those third countries, such income will have a credit or “foreign tax credit” against corresponding Chilean taxes, which can be proportionally transferred to the shareholders of the Chilean company.

Taxation on Sale or Exchange of ADSs, Outside Chile

Gains obtained by a foreign holder from the sale or exchange of ADSs outside Chile will not be subject to Chilean taxation.

Taxation on Sale or Exchange of Shares

The Chilean Income Tax Law includes a tax exemption on capital gains arising from the sale of shares of listed companies traded in the stock markets. Although there are certain restrictions, in general terms, the amendment provides that in order to qualify for the capital gain exemption: (i) the shares must be of a publicly held stock corporation with a certain minimum level of trading on a stock exchange; (ii) the sale must be carried out in a Chilean stock exchange, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Law; (iii) the shares which are being sold must have been acquired on a Chilean stock exchange, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Law, or in an initial public offering (due to the creation of a company or to a capital increase), or due to the exchange of convertible bonds; and (iv) the shares must have been acquired after April 19, 2001.

If the shares do not qualify for the above exemption, capital gains on their sale or exchange of shares (as distinguished from sales or exchanges of ADSs representing such shares of common stock) could be subject to two alternative tax regimes: (a) general tax regime, with a 20% Chilean corporate income tax and a 35% Chilean withholding tax, the former being creditable against the latter; or (b) a 20% Chilean corporate income tax as sole tax regime, when all the following circumstances are met: (i) the sale is made between unrelated parties, (ii) the sale of shares is not a recurrent or habitual activity for the seller and (iii) at least one year has elapsed between the acquisition and the sale of the shares.

155

The date of acquisition of the ADSs is considered to be the date of acquisition of the shares for which the ADSs are exchanged.

Taxation of Rights and ADS Rights

For Chilean tax purposes and to the extent we have outstanding ADS rights, the receipt of rights or ADS rights by a foreign holder of shares or ADSs pursuant to a rights offering is a nontaxable event. In addition, there are no Chilean income tax consequences to foreign holders upon the exercise or the lapse of the rights or the ADS rights.

Any gain on the sale, exchange or transfer of any ADS rights by a foreign holder is not subject to taxes in Chile.

Any gain on the sale, exchange or transfer of the rights by a foreign holder is subject to a 35% Chilean withholding tax.

Other Chilean Taxes

There is no gift, inheritance or succession tax applicable to the ownership, transfer or disposition of ADSs by foreign holders, but such taxes will generally apply to the transfer at death or by gift of the shares by a foreign holder. There is no Chilean stamp, issue, registration or similar taxes or duties payable by holders of shares or ADSs.

Material U.S. Income Tax Considerations

This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof. These authorities are subject to change, possibly with retroactive effect. This discussion assumes that the depositary’s activities are clearly and appropriately defined so as to ensure that the tax treatment of ADSs will be identical to the tax treatment of the underlying shares.

The following are the material U.S. federal income tax consequences to U.S. Holders (as defined herein) of receiving, owning and disposing of ADS rights, rights, shares or ADSs, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular person’s decision to hold such securities and is based on the assumption stated above under “Chilean Tax Considerations” that there is no applicable income tax treaty in effect between the United States and Chile. The discussion applies only if the beneficial owner holds shares or ADSs as capital assets for U.S. federal income tax purposes and it does not describe all of the tax consequences that may be relevant in light of the beneficial owner’s particular circumstances. For instance, it does not describe all the tax consequences that may be relevant to:

— certain financial institutions;

— insurance companies;

— dealers and traders in securities who use a mark-to-market method of tax accounting;

— persons holding shares or ADSs as part of a “straddle”, integrated transaction or similar transaction;

— persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

— partnerships or other entities classified as partnerships for U.S. federal income tax purposes;

— persons liable for the alternative minimum tax;

— tax-exempt organizations;

— persons holding shares or ADSs that own or are deemed to own ten percent or more of our stock; or

156

— persons holding shares or ADSs in connection with a trade or business conducted outside of the United States.

If an entity classified as a partnership for U.S. federal income tax purposes holds shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership. Partnerships holding shares or ADSs and partners in such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of holding and disposing of the shares or ADSs.

You are a “U.S. Holder” for purposes of this discussion if you are a beneficial owner of our shares or ADSs and if you are, for U.S. federal income tax purposes:

— a citizen or individual resident of the United States; or

— a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; or

— an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

— a trust (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes or (ii) if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and (B) one or more U.S. persons have the authority to control all substantial decisions of the trust.

In general, if a beneficial owner owns ADSs, such owner will be treated as the owner of the shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if a beneficial owner exchanges ADSs for the underlying shares represented by those ADSs.

The U.S. Treasury has expressed concerns that parties to whom ADSs are released before shares are delivered to the depositary (pre-release) or intermediaries in the chain of ownership between beneficial owners and the issuer of the security underlying the ADSs may be taking actions that are inconsistent with the claiming of foreign tax credits for beneficial owners of depositary shares. Such actions would also be inconsistent with the claiming of the reduced tax rate, described below, applicable to dividends received by certain non-corporate beneficial owners. Accordingly, the analysis of the creditability of Chilean taxes, and the availability of the reduced tax rate for dividends received by certain non-corporate holders, each described below, could be affected by actions taken by such parties or intermediaries.

This discussion assumes, and the Company believes, that it is not, and will not become, a passive foreign investment company, as described below.

Beneficial owners should consult their tax advisors with respect to their particular tax consequences of owning or disposing of shares or ADSs, including the applicability and effect of state, local, non-U.S. and other tax laws and the possibility of changes in tax laws.

Taxation of Distributions

Distributions paid on shares or ADSs other than certain pro rata distributions of shares of common stock will be treated as dividends taxable as ordinary income to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported as dividends.

If a beneficial owner is a U.S. Holder, subject to applicable limitations and the discussion above regarding concerns expressed by the U.S. Treasury, dividends paid by qualified foreign corporations to the beneficial owner that is not a corporation are taxable at a maximum rate of 20%. A foreign company is treated as a qualified foreign corporation with respect to dividends paid on stock that is readily tradable on an established securities market in the United States, such as the New York Stock Exchange where our ADSs are traded. Beneficial owners should consult their tax advisors to determine whether the favorable rate will apply to dividends they receive and whether they are subject to any special rules that limit their ability to be taxed at this favorable rate.

157

The amount of a dividend will include the net amount withheld by us in respect of Chilean withholding taxes on the distribution. The amount of the dividend will be treated as foreign-source dividend income to a beneficial owner and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations under the Code. Dividends will be included in a beneficial owner’s income on the date of the beneficial owner’s, or in the case of ADSs, the Depositary’s, receipt of the dividend. The amount of any dividend paid in Chilean pesos will be a U.S. dollar amount calculated by reference to the exchange rate for converting Chilean pesos into U.S. dollars in effect on the date of such receipt regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a beneficial owner generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. A beneficial owner may have foreign currency gain or loss if the dividend is converted into U.S. dollars on a date after the date of receipt.

Subject to applicable limitations that may vary depending upon a beneficial owner’s circumstances and subject to the discussion above regarding concerns expressed by the U.S. Treasury, the net amount of Chilean withholding tax (after reduction for the credit for Chilean corporate income tax, as discussed above under “Item 10. Additional Information — E. Taxation — Chilean Tax Considerations — Taxation of Shares and ADSs — Taxation of Cash Dividends and Property Distributions”) withheld from dividends on shares or ADSs will be creditable against a beneficial owner’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and, therefore, a beneficial owner should consult the beneficial owner’s tax advisor regarding the availability of foreign tax credits in the beneficial owner’s particular circumstances. Instead of claiming a credit, a beneficial owner may, at the beneficial owner’s election, deduct such Chilean taxes in computing the beneficial owner’s taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States.

Sale or Other Disposition of Shares or ADSs

If a beneficial owner is a U.S. Holder, for U.S. federal income tax purposes, the gain or loss a beneficial owner realizes on the sale or other disposition of shares or ADSs will be a capital gain or loss, and will be a long-term capital gain or loss if the beneficial holder has held the shares or ADSs for more than one year. The amount of a beneficial owner’s gain or loss will equal the difference between the beneficial owner’s tax basis in the shares or ADSs disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Such gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. In addition, certain limitations exist on the deductibility of capital losses by both corporate and individual taxpayers.

In certain circumstances, Chilean taxes may be imposed upon the sale of shares. See “Item 10. Additional Information — E. Taxation — Chilean Tax Considerations — Taxation of Shares and ADSs”. If a Chilean tax is imposed on the sale or disposition of shares, and a beneficial owner that is a U.S. Holder does not receive significant foreign source income from other sources, such beneficial owner may not be able to credit such Chilean tax against the beneficial owner’s U.S. federal income tax liability.

Passive Foreign Investment Company Rules

We believe that we were not a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes for our 2013 taxable year and do not expect to be or become one for our 2014 taxable year or for the foreseeable future. However, because PFIC status depends upon the composition of a company’s income and assets and the market value of its assets from time to time, and because it is unclear whether certain types of our income constitute passive income for PFIC purposes, there can be no assurance that we will not be considered a PFIC for any taxable year. If we were a PFIC for 2013 or for any prior or future taxable year during which a beneficial owner held shares or ADSs, certain adverse consequences could apply to the beneficial owner, including the imposition of higher amounts of tax than would otherwise apply, and additional filing requirements. Beneficial owners should consult their tax advisors regarding the consequences to them if we were a PFIC, as well as the availability and advisability of making any election that might mitigate the adverse consequences of PFIC status.

158

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding unless (i) the beneficial owner is an exempt recipient or (ii) in the case of backup withholding, the beneficial owner provides a correct taxpayer identification number and certifies that the beneficial owner is not subject to backup withholding.

The amount of any backup withholding from a payment to a beneficial owner will be allowed as a credit against the beneficial owner’s U.S. federal income tax liability and may entitle the beneficial owner to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

Medicare Contribution Tax

Legislation enacted in 2010 generally imposes a tax of 3.8% on the “net investment income” of certain individuals, trusts and estates. Among other items, net investment income generally includes gross income from dividends and net gain attributable to the disposition of certain property, like the shares or ADSs, less certain deductions. A beneficial owner should consult such beneficial owner’s own tax advisor regarding the possible application of this legislation in the beneficial owner’s particular circumstances.

Beneficial owners should consult their tax advisors with respect to the particular consequences to them of receiving, owning or disposing of shares or ADSs.

F. Dividends and Paying Agents.

Not applicable.

G. Statement by Experts.

Not applicable.

H. Documents on Display.

We are subject to the information requirements of the Exchange Act, except that as a foreign issuer, we are not subject to the proxy rules (other than general anti-fraud rules) or the short-swing profit disclosure rules of the Exchange Act. In accordance with these statutory requirements, we file or furnish reports and other information with the SEC. Reports and other information filed or furnished by us with the SEC may be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 100 F Street, N.E., Washington, D.C. 20549. Copies of such material may also be inspected at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005, on which our ADSs are listed. In addition, the SEC maintains a website that contains information filed electronically with the SEC, which can be accessed over the Internet at http://www.sec.gov.

I. Subsidiary information.

Not applicable.

Item 11.   Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to risks arising from changes in commodity prices, interest rates and foreign exchange rates. These risks are monitored and managed by the Company in coordination with Enersis, our parent company. The Company’s Board of Directors approves risk management policies at all levels.

Commodity Price Risk

We are exposed to market risks arising from the price volatility of electricity, natural gas, diesel oil, and coal. Natural gas is used in some of our power plants in South America. We seek to ensure our supply of this fuel by securing long-term contracts with our suppliers for terms that are expected to match the lifetime of our generation assets. These contracts generally have provisions that allow us to purchase gas at market prices prevailing at the time the purchase occurs. As of December 31, 2013, 2012 and 2011 and, we did not hold any contracts classified as either derivative financial instruments, financial instruments, or derivative commodity instruments related to natural gas.

159

In the countries where we operate using coal and diesel oil, the dispatch mechanism allows the thermal power plants to cover their operational costs. However, under certain circumstances, fuel price fluctuations might affect marginal costs. We transfer commodity prices variations to the sale contract prices according to indexing formulas but only to the degree that this is possible in our different markets. Because of the drought in Chile and price volatility of coal and petroleum, the Company decided to hedge this risk with commodity instruments available in international markets. During 2013, we entered into contracts classified as derivative commodity instruments related to coal (25,000 tons) and to petroleum (107,000 barrels), both deals for the period between January and December 2013. As of December 31, 2013 and 2012 we did not hold any contracts classified as either derivative financial instruments, financial instruments, or derivative commodity instruments related either to coal or to diesel oil.

Additionally, through adequate commercial risk mitigation policies and a hydro-thermal power plant mix, we seek to naturally protect our operating income from electricity price volatility. As of December 31, 2013, we did not hold electricity price-sensitive instruments.

The Company is continually analyzing ways to hedge commodity price risk, like adjusting commodity indexed price formulas for new PPAs according to our exposition and/or analyzing ways to mitigate risk through hydrological insurance in dry years.

Interest Rate and Foreign Currency Risk

The recorded values of our debt as of December 31, 2013, are detailed below, according to maturity. Total values do not include the effect of derivatives.

	Expected maturity date
As of December 31,	2014		2015		2016		2017		2018		Thereafter		Total		Fair    Value(1)
	(in millions of Ch$)
Fixed Rate		194,115		—		—		—		—		—		194,115		194,115
Ch$ /UF
Weighted average interest rate		6.2%		—		—		—		—		—		6.2%		—
US$		83,080		110,386		11,846		1,442		6,782		192,049		405,585		507,935
Weighted average interest rate		7.3%		8.9%		6.2%		6.5%		6.3%		7.9%		8.0%		—
Other currencies (2)		51,568		—		—		—		—		209,979		261,548		355,705
Weighted average interest rate		11.7%		—		—		—		—		10.0%		10.3%		—
Total fixed rate		328,764		110,386		11,846		1,442		6,782		402,028		861,248		1,057,755
Weighted average interest rate		7.4%		8.9%		6.2%		6.5%		6.3%		9.0%		8.3%		—
Variable rate
Ch$ /UF		7,541		7,756		6,420		4,848		4,848		282,698		314,113		390,101
Weighted average interest rate		10.1%		10.2%		9.5%		8.3%		8.3%		7.0%		7.2%		—
US$		125,620		17,281		20,913		26,060		13,173		—		203,047		202,777
Weighted average interest rate		2.5%		3.3%		2.9%		2.7%		3.9%		—		2.7%		—
Other currencies (2)		18,892		74,847		10,067		57,357		70,481		428,403		660,047		739,563
Weighted average interest rate		11.6%		8.4%		16.9%		6.4%		7.6%		6.4%		7.1%		—
Total variable rate		152,054		99,884		37,400		88,266		88,502		711,101		1,177,206		1,332,441
Weighted average interest rate		4.0%		7.6%		7.8%		5.5%		7.1%		6.6%		6.4%		—
		480,817		210,270		49,246		89,708		95,284		1,113,130		2,038,454		2,390,196

(1) As of December 31, 2013, fair value was calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

(2) “Other currencies” include the Euro, Brazilian real, Colombian peso, Argentine peso and Peruvian nuevo sol.

160

The recorded values of our debt as of December 31, 2012, are detailed below, according to maturity. Total values do not include the effect of derivatives.

	Expected Maturity Date
As of December 31,	2014		2015		2016		2017		2018		Thereafter		Total		Fair      Value(1)
	(in millions of Ch$)
Fixed Rate		0.27		—		—		—		—		—		0.27		—
Ch$ /UF
Weighted average interest rate		6.7%		—		—		—		—		—		6.7%		—
US$		267,941		6,543		100,991		10,838		1,319		181,908		569,540		721,377
Weighted average interest rate		8.2%		8.3%		8.8%		6.5%		6.3%		7.7%		8.1%		—
Other currencies (2)		36,475		39,232		—		—		—		2.9,394		285,101		289,627
Weighted average interest rate		13.1%		8.4%		—		—		—		10.0%		10.2%		—
Total fixed rate		3.4,417		45,774		100,991		10,838		1,319		391,302		854,641		1,011,005
Weighted average interest rate		8.8%		8.4%		8.8%		6.5%		6.3%		8.9%		8.8%		—
Variable rate
Ch$ /UF		117,474		7,389		7,600		6,291		4,751		281,763		425,268		335,265
Weighted average interest rate		7.6%		9.4%		9.4%		9.2%		8.8%		7.5%		7.7%		—
US$		20,581		110,440		15,810		19,133		23,842		12,052		201,859		201,859
Weighted average interest rate		64%		2.3%		3.6%		3.3%		3.1%		4.4%		3.1%		—
Other currencies (2)		14,368		24,425		80,849		11,038		57,182		327,443		515,305		569,770
Weighted average interest rate		20.0%		12.2%		8.3%		9.2%		8.1%		7.9%		8.6%		—
Total variable rate		152,423		142,254		104,259		36,462		85,775		621,259		1,142,432		1,106,893
Weighted average interest rate		9.5%		6.6%		7.8%		6.9%		7.0%		7.7%		6.9%		—
		456,839		188,029		205,250		47,300		87,095		1,0212,560		1,997,073		2,117,898

(1) As of December 31, 2012, fair value was calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

(2) “Other currencies” include the Euro, Brazilian real, Colombian peso, Argentine peso and Peruvian nuevo sol.

Interest Rate Risk

At December 31, 2013 and 2012, 29% and 26%, respectively, of our outstanding net debt obligations were subject to floating interest rates.

We manage interest rate risk by maintaining a mixture of both variable and fixed rate debt, according to the policy approved by the Board of Directors. Additionally, we manage interest rate risk through the use of interest rate derivatives. The above percentages include the effect of interest rate derivatives (swaps or collars) that hedge part of our debt.

As of December 31, 2013, the recorded values for financial accounting purposes and the corresponding fair values of the instruments that hedge our interest rate risk exposure were as follows:

	Expected Maturity Date
As of December 31,	2014		2015		2016		2017		2018		Thereafter		Total		Fair  Value(2)
	(in millions of Ch$)
Variable to fixed rates		104,922		—		—		28,300		—		—		133,222		2,101
Fixed to variable rates		—		—		—		—		—		—		—		—
Total		104,922		—		—		28,300		—		—		133,222		2,101

(1) Calculated based on the Observed Exchange Rate for December 31, 2013, which was Ch$ 524.61 for US$ 1.00.

(2) Fair value was calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

161

By comparison, as of December 31, 2012, the recorded values for financial accounting purposes and the corresponding fair values of the instruments that hedge for our interest rate risk exposure were as follows:

	Expected Maturity Date
As of December 31,	2013		2014		2015		2016		2017		Thereafter		Total		Fair   Value(2)
	(in millions of Ch$) (1)
Variable to fixed rates		1,728		95,992		—		—		—		29,462		127,181		4,670
Fixed to variable rates		—		—		—		—		—		—		—		—
Total		1,728		95,992		—		—		—		29,462		127,181		4,670

(1) Calculated based on the Observed Exchange Rate for December 31, 2012, which was Ch$ 479.96 per US$ 1.00.

(2) Fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

Foreign Currency Risk

We are exposed to foreign currency risk arising from debt denominated in U.S. dollars, Chilean pesos, and in other currencies. Some of our subsidiaries have a natural hedge between their revenues and the currency of their debt. For example, in the case of our subsidiaries in Colombia, their revenues as well as their debts are linked to the Colombian peso. In other cases, we do not have this natural hedge and therefore we try to manage this exposure with currency derivatives, such as U.S. dollar/UF exchange and U.S. dollar/local currency derivatives. However, this is not always possible because of market conditions. For example, that is the case of Endesa Costanera in Argentina, with revenues linked to the Argentine peso and a substantial part of its debt denominated in U.S. dollars, with no reasonable possibility of hedging this debt. Our corporate currency risk policy has been in effect since 2004. This policy takes the level of operating income of each country that is indexed to the U.S. dollar and seeks to hedge income with liabilities denominated in the same currency.

As of December 31, 2013, the recorded values for financial accounting purposes and the corresponding fair value of the instruments that hedge our foreign exchange risk are as follows:

	Expected Maturity Date
As of December 31,	2014		2015		2016		2017		2018		Thereafter		Total		Fair   Value(2)
	(in millions of Ch$) (1)
UF to US$		207,560		—		—		—		—		—		207,560		20,865
US$ to Ch$/UF		—		—		—		—		—		—		—		—
Ch$ to US$		25,619		—		—		—		—		—		25,619		362
US$ to other currencies (3)		—		—		—		—		—		—		—		—
Other currencies to US$ (4)		4,605		—		—		—		—		—		4,605		121
Total		237,784		—		—		—		—		—		237,784		21,348

(1) Calculated based on the Observed Exchange Rate for December 31, 2013, which was Ch$ 524.61 per US$ 1.00.

(2) Fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

(3) Other currencies include Brazilian reais.

(4) Include a Peruvian soles-US$ hedge of Edegel (Chinango).

162

By comparison, as of December 31, 2012 the recorded values for financial accounting purposes and the corresponding fair values of the instruments that hedge for our interest rate risk was as follows:

	Expected Maturity Date
As of December 31,	2013		2014		2015		2016		2017		Thereafter		Total		Fair   Value(2)
	(in millions of Ch$) (1)
UF to US$		—		189,894		—		—		—		—		189,894		28,634
US$ to Ch$/UF		—		—		—		—		—		—		—		—
US$ to other currencies(3)		—		—		—		—		—		—		—		—
Other currencies to US$ (4)		—		4,213		—		—		—		—		4,213		578
Total		—		194,107		—		—		—		—		194,107		29,212

(1) Calculated based on the Observed Exchange Rate for December 31, 2012, which was Ch$ 479.96 per US$ 1.00.

(2) Fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved.

(3) Currencies include Brazilian Reais.

(4) Include a Peruvian soles-US$ hedge of Edegel (Chinango).

(d). Safe Harbor

The information in this “Item 11. Quantitative and Qualitative Disclosures About Market Risk,” contains information that may constitute forward-looking statements. See “Forward-Looking Statements” in the Introduction of this Report for safe harbor provisions.

Item 12.   Description of Securities Other Than Equity Securities

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

Depositary Fees and Charges

The Company’s ADS program is administered by Citibank, N.A., as depositary. Under the terms of the deposit agreement, an ADS holder may have to pay the following service fees to the depositary:

Service Fees	Fees
(1) Issuance of ADS upon deposit of shares	Up to US$ 5.00 per 100 ADS (or fraction thereof) issued
(2) Delivery of deposited securities against surrender of ADS	Up to US$ 5.00 per 100 ADS (or fraction thereof) surrendered
(3) Distribution of cash dividends or other cash distributions (i.e., sale of rights and other entitlements)	Up to US$ 5.00 per 100 ADS (or fraction thereof) held
(4) Distribution of ADS pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADS	Up to US$ 5.00 per 100 ADS (or fraction thereof) held
(5) Distribution of securities other than ADS or rights to purchase additional ADS (i.e., spin—off of shares)	Up to US$ 5.00 per 100 ADS (or fraction thereof) held
(6) Depositary services	Up to US$ 5.00 per 100 ADS (or fraction thereof) held on the applicable record date(s) established by the Depositary

163

Depositary Payments for Fiscal Year 2013

The depositary has agreed to reimburse certain expenses incurred by the Company in connection with the Company’s ADS program. In 2013, the depositary reimbursed expenses related to investor relations’ activities for a total amount of US$ 251,724 (after applicable US taxes).

164

PART II

Item 13.   Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.   Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

E. Use of Proceeds.

Not applicable.

Item 15.   Controls and Procedures

(a) Disclosure Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rules 13 (a) -15 (e) and 15 (d) -15 (e) under the Exchange Act) for the year ended December 31, 2013.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error, and the circumvention or overriding of the controls and procedures. Accordingly, the Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Based upon the Company’s evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is gathered and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

As required by Section 404 of the Sarbanes-Oxley Act of 2002, Endesa Chile’s management is responsible for establishing and maintaining “adequate internal control over financial reporting” (as defined in Rule 13 (a)-15 (f) under the Exchange Act). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with IFRS, as issued by the IASB.

Because of its inherent limitations, internal control over financial reporting may not necessarily prevent or detect some misstatements. It can only provide reasonable assurance regarding financial statement preparation and presentation. Also, projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with the policies or procedures may deteriorate over time.

Management assessed the effectiveness of its internal control over financial reporting for the year ended December 31, 2013. The assessment was based on criteria established in “Internal Control — Integrated Framework

165

(1992)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the assessment, Endesa Chile’s management has concluded that as of December 31, 2013, the Company’s internal control over financial reporting was effective.

(c) Attestation Report

KPMG Auditores Consultores Ltda., the independent registered public accounting firm that has audited our consolidated financial statements and has also issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2013. This attestation report appears on page F-3.

(d) Changes in internal control

There were no changes in the Company’s internal control over financial reporting that occurred during 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 16.    Reserved

Item 16A. Audit Committee Financial Expert

As of December 31, 2013, the Directors’ Committee’s (which performs the functions of the Audit Committee) financial expert was Mr. Enrique Cibié, as determined by the Board of Directors. Mr. Cibié is an independent member of the Directors’ Committee, pursuant to the requirement of both Chilean law and NYSE corporate governance rules.

Item 16B. Code of Ethics

The standards of ethical conduct at Endesa Chile are governed by means of five corporate rulings or policies: the Charter Governing Executives, the Employee Code of Conduct, the Code of Ethics, the Zero Tolerance Anti-Corruption Plan (the “ZTAC Plan”) and the Manual for the Management of Information of Interest to the Market (the “Manual”).

The Charter Governing Executives was adopted by the Board of Directors in July 2003 and is applicable to all executives contractually related to Endesa Chile or its controlled subsidiaries in which it is the majority shareholder, both in Chile and abroad, including the Chief Executive Officer, the Chief Financial Officer and other senior officers of the Company. The objective of this set of rules is to establish standards for the governance of our management’s actions, the behavior of management with respect to the principles governing their actions and the limitations and incompatibilities involved, all within Endesa Chile’s vision, mission and values. Likewise, the Employee Code of Conduct explains our principles and ethical values, establishes the rules governing our contact with customers and suppliers, and establishes the principles that should be followed by employees, including ethical conduct, professionalism and confidentiality. Both documents also impose limitations on the activities that our executives and other employees may undertake outside the scope of their employment with us.

The Manual, adopted by Endesa Chile’s Board of Directors in May 2008 and amended in February 2010, addresses the following issues: applicable standards and blackout periods in connection with the transactions of the Company’s securities or those of its affiliates by directors, management, principal executives, employees and other related parties; mechanisms for the continuous release of information that is of interest to the market; and mechanisms that provide protection for confidential information.

In addition to the above mentioned corporate governance rules, the Board of the Company approved the Code of Ethics and the ZTAC Plan in its meeting held on June 24, 2010. The Code of Ethics is based on general principles such as impartiality, honesty, integrity and other values of similar importance, which are translated into detailed behavioral criteria. The ZTAC Plan reinforces the principles included in the Code of Ethics, but with a special emphasis in avoiding corruption in the form of bribery, preferential treatment, and other similar acts.

166

A copy of these documents is available upon request, free of charge, by writing or calling us at:

Empresa Nacional de Electricidad S.A.

Attention: Investor Relations Department

Santa Rosa 76, Piso 15

Santiago, Chile

(562) 2630-9847

During fiscal year 2013, there have been no amendments to any provisions of the abovementioned documents. No waivers from any provisions of the Charter Governing Executives, the Code of Ethics, the ZTAC Plan or the Manual, were expressly or implicitly granted to the Chief Executive Officer, the Chief Financial Officer or any other senior financial officer of the Company in fiscal year 2013.

Item 16C. Principal Accountant Fees and Services

The following table provides information on the aggregate fees billed by our principal accountants, KPMG Auditores Consultores Ltda., as well as the other member firms of KPMG and their respective affiliates, by type of service rendered for the periods indicated.

Services Rendered	2013		2012
	(in millions of Ch $)
Audit fees (1)		593.51		603.36
Audit-related fees		—		—
Tax fees		—		7.06
All other fees		—		—
Total		593.51		610.42

(1) Audit fees decreased in 2013, mainly due to a smaller scope of reviews than in 2012, as a result of the mergers of some of our subsidiaries.

The amounts included in the table above and the related footnotes have been classified in accordance with SEC guidance.

All of the fees disclosed under audit related fees and all other fees were pre-approved by the Directors’ Committee.

Directors’ Committee Pre-Approval Policies and Procedures

Our external auditors are appointed by our shareholders at the OSM. Similarly, the shareholders of our subsidiaries, which are located in countries where applicable law and regulation so establishes, appoint such subsidiaries’ external auditors.

The Directors’ Committee (which performs the functions of the Audit Committee), acting through the CFO, manages appointment proposals, reviews engagement letters, negotiates fees, ensures quality control in respect of the services provided, reviews and controls independence issues, and other related matters.

The Directors’ Committee has a pre-approval policy regarding the contracting of Endesa Chile’s external auditor, or any affiliate of the external auditor, for professional services. The professional services covered by such policy include audit and non-audit services provided to Endesa Chile.

Fees payable in connection with recurring audit services are pre-approved as part of our annual budget. Fees payable in connection with non-recurring audit services, once they have been analyzed by the CFO, are submitted to the Directors’ Committee for approval or rejection.

167

The pre-approval policy established by the Directors’ Committee for non-audit services and audit-related fees is as follows:

— The business unit that has requested the service and the audit firm expected to perform the service must request that the CFO review the nature of the service to be provided.

— The CFO then analyzes the request and requires the selected audit firm to issue a certificate signed by the partner responsible for the audit of our consolidated financial statements confirming such audit firm’s independence.

— Finally, the proposal is submitted to the Directors’ Committee for approval or denial.

The Directors’ Committee has designed, approved and implemented the necessary procedures to fulfill the new requirements described in SEC release number 34-53677, File No. PCAOB-2006-01 (Audit Committee Pre-Approval of Certain Tax Services).

Item 16D. Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Neither Endesa Chile nor any affiliated purchaser acquired any shares of Endesa Chile during 2013.

Item 16F. Change in Registrant’s Certifying Accountant

During the years ended December 31, 2013 and 2012 and through the date of this Report, the principal independent accountant engaged to audit our financial statements, KPMG Auditores Consultores Ltda., has not resigned, or indicated that it has declined to stand for re-election after the completion of its current audit, or been dismissed.

Item 16G. Corporate Governance

For a summary of the significant differences between our corporate governance practices and those applicable to domestic issuers under the corporate governance rules of the NYSE, please see “Item  6. Directors, Senior Management and Employees — C. Board Practices.”

Item 16H. Mine Safety Disclosure

Not applicable.

168

PART III

Item 17.      Financial Statements

None.

Item 18.      Financial Statements

Endesa Chile and Subsidiaries

Index to the Audited Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms:

Reports of Independent Registered Public Accounting Firms:
Report of KPMG Auditores Consultores Ltda. — Empresa Nacional de Electricidad S.A. 2013 and 2012	F-1
Report of KPMG Auditores Consultores Ltda. — Empresa Nacional de Electricidad S.A. — Internal Control over Financial Reporting 2013	F-3
Report of Ernst & Young Audit S.A.S — Emgesa S.A. E.S.P. 2013 and 2012	F-5
Report of Ernst & Young Audit Ltda. — Emgesa S.A. E.S.P. 2012 and 2011	F-6
Report of Pistrelli, Henry Martin y Asociados S.R.L., member Firm of Ernst & Young Global — Endesa Argentina S.A. 2013 and 2012	F-7
Report of Pistrelli, Henry Martin y Asociados S.R.L., member Firm of Ernst & Young Global — Endesa Argentina S.A. 2012 and 2011	F-8
Report of Ernst & Young Auditores Independentes S.S. — Endesa Brasil S.A. 2013 and 2012	F-9
Report of Ernst & Young Terco Auditores Independentes S.S. — Endesa Brasil S.A. 2012 and 2011	F-10
Consolidated Financial Statements:
Consolidated Statements of Financial Position at December 31, 2013, December 31, 2012 and January 1, 2012	F-11
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011	F-13
Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011	F-15
Consolidated Statements of Direct Cash Flows for the years ended December 31, 2013, 2012 and 2011	F-16
Notes to the Consolidated Financial Statements	F-17
Consolidated Financial Statements Endesa Brasil S.A.	G-1

169

Item 19.      Exhibits

Exhibit	Description
1.1	Bylaws (Estatutos) of Empresa Nacional de Electricidad S.A., as amended.(*)
8.1	List of Subsidiaries as of December 31, 2013.(**)
12.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.(**)
12.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.(**)
12.3	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
12.4	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
13.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.(**)
13.2	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

(*) Incorporated by reference to Endesa Chile’s Form 20-F for the year ended December 31, 2009.

(**) Previously filed.

We will furnish to the Securities and Exchange Commission, upon request, copies of any unfiled instruments that define the rights of stakeholders of Endesa Chile.

170

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this amendment to the annual report on its behalf.

EMPRESA NACIONAL DE ELECTRICIDAD S.A.
By:	/s/ Fernando Gardeweg R.
Name:	Fernando Gardeweg R.
Title:	Chief Financial Officer

Date:    April 2, 2014

171

Endesa Chile and Subsidiaries

Audited Consolidated Financial Statements as of December 31, 2013, December 31, 2012 and January 1, 2012 and for each of the three years in the period ended December 31, 2013 together with the Report of Independent Registered Public Accounting Firms

Table of Contents

Index to the Audited Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms:
Report of KPMG Auditores Consultores Ltda. — Empresa Nacional de Electricidad S.A. 2013 and 2012	F-1
Report of KPMG Auditores Consultores Ltda. — Empresa Nacional de Electricidad S.A. — Internal Control over Financial Reporting 2013	F-3
Report of Ernst & Young Audit S.A.S — Emgesa S.A. E.S.P. 2013 and 2012	F-5
Report of Ernst & Young Audit Ltda. — Emgesa S.A. E.S.P. 2012 and 2011	F-6
Report of Pistrelli, Henry Martin y Asociados S.R.L., member Firm of Ernst & Young Global — Endesa Argentina S.A. 2013 and 2012	F-7
Report of Pistrelli, Henry Martin y Asociados S.R.L., member Firm of Ernst & Young Global — Endesa Argentina S.A. 2012 and 2011	F-8
Report of Ernst & Young Auditores Independentes S.S. — Endesa Brasil S.A. 2013 and 2012	F-9
Report of Ernst & Young Terco Auditores Independentes S.S.  — Endesa Brasil S.A. 2012 and 2011	F-10
Consolidated Financial Statements:
Consolidated Statements of Financial Position at December 31, 2013, December  31, 2012 and January 1, 2012	F-11
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011	F-13
Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011	F-15
Consolidated Statements of Direct Cash Flows for the years ended December 31, 2013, 2012 and 2011	F-16
Notes to the Consolidated Financial Statements	F-17
Consolidated Financial Statements Endesa Brasil S.A.	G-1

Ch$	Chilean pesos
US$	U. S. dollars
UF	The UF is a Chilean inflation-indexed, peso-denominated monetary unit that is set daily in advance based on the previous month’s inflation rate.
ThCh$	Thousand of Chilean pesos
ThUS$	Thousand of U.S. dollars

 KPMG Auditores Consultores Ltda.  Av. Isidora Goyenechea 3520, Piso 2  Las Condes, Santiago, Chile                     Teléfono +56 (2) 2798 1000                     Fax +56 (2) 2798 1001                     www.kpmg.cl

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Empresa Nacional de Electricidad S.A. (Endesa–Chile):

We have audited the accompanying consolidated statements of financial position of Endesa-Chile and subsidiaries (the Company) as of December 31, 2013, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of certain subsidiaries, which statements reflect total assets constituting 36.12 percent, 33.54 percent and 31.22 percent, of the Company’s consolidated total asset position as of December 31, 2013, 2012 and January 1, 2012, respectively, and total revenues constituting 36.26 percent, 38.27 percent and 39.3 percent of the Company’s consolidated revenues for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, we did not audit the financial statements of Endesa Brasil S.A. The Company’s investment in Endesa Brasil S.A. at December 31, 2013, 2012 and January 1, 2012 was ThCh$ 543,713,349, ThCh$ 574,168,681 and ThCh$ 569,012,759 as of December 31, 2013,2012 and January 1, 2012, respectively, and its equity earning was ThCh$94,402,624, ThCh$107,503,620 and ThCh$115,355,267 for the years ended December 31, 2013, 2012 and 2011, respectively. Those consolidated financial statements prepared in accordance with the local statutory accounting basis were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for those entities on such basis of accounting, is based solely on the reports of the other auditors. Accordingly, we have audited the conversion adjustments to the financial statements of these subsidiaries and nonsubsidiary investees prepared in accordance with the local statutory accounting basis to conform them to the Company’s accounting basis referred to below.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Endesa-Chile and subsidiaries as of December 31, 2013, 2012 and January 1, 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

^© 2014 KPMG Auditores Consultores Ltda, a Chilean limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

As indicated in Note 2.2 a) to the consolidated financial statements, starting from January 1, 2013 and due to the application of International Financial Reporting Standards (IFRS) 11 “Joint Arrangements,” the Company changed its valuation method of investments which business are jointly controlled. As required by this standard, the consolidated statements of financial position as of December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2012 and 2011, and their related notes to the financial statements, were retrospectively restated.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Endesa-Chile’s internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 27, 2014, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG

KPMG Auditores Consultores Ltda.

Santiago, Chile

March 27, 2014

^© 2014 KPMG Auditores Consultores Ltda, a Chilean limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG Auditores Consultores Ltda. Av. Isidora Goyenechea 3520, Piso 2 Las Condes, Santiago, Chile                     Teléfono +56 (2) 2798 1000                     Fax +56 (2) 2798 1001                     www.kpmg.cl

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Empresa Nacional de Electricidad S.A. (Endesa–Chile):

We have audited Endesa-Chile’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Endesa-Chile’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Endesa-Chile’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

^© 2014 KPMG Auditores Consultores Ltda, a Chilean limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

In our opinion, Endesa-Chile maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of Endesa-Chile and subsidiaries as of December 31, 2013 and 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of years in the three-year period ended December 31, 2013, and our report dated March 27, 2014 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG

KPMG Auditores Consultores Ltda.

Santiago, Chile

March 27, 2014

^© 2014 KPMG Auditores Consultores Ltda, a Chilean limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Emgesa S.A. E.S.P

We have audited the accompanying consolidated balance sheet of Emgesa S.A. E.S.P. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Emgesa S.A. E.S.P. and subsidiaries at December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting policies generally accepted in Colombia.

/S/ ERNST & YOUNG Audit S.A.S.

Ernst & Young

Bogotá, Colombia

February 17, 2014

F-5

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Emgesa S.A. E.S.P

We have audited the accompanying consolidated balance sheet of Emgesa S.A. E.S.P. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of income, shareholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Emgesa S.A. E.S.P. and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting policies generally accepted in Colombia.

/S/ ERNST & YOUNG Audit Ltda.

Ernst & Young

Bogotá, Colombia

February 11, 2013

F-6

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Endesa Argentina S.A.:

We have audited the accompanying consolidated balance sheet of Endesa Argentina S.A. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Endesa Argentina S.A. and subsidiaries at December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the Buenos Aires City, Argentine Republic.

February 28, 2014

Buenos Aires, Argentina

/S/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

Member of Ernst & Young Global                                    

F-7

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Endesa Argentina S.A.:

We have audited the accompanying consolidated balance sheet of Endesa Argentina S.A. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of income, shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Endesa Argentina S.A. and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the Buenos Aires City, Argentine Republic.

February 28, 2013

Buenos Aires, Argentina

/S/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

Member of Ernst & Young Global                                    

F-8

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Endesa Brasil S.A.

We have audited the accompanying consolidated statements of financial position of Endesa Brasil S.A. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Endesa Brasil S.A. and subsidiaries at December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

ERNST & YOUNG

Auditores Independentes S.S.

/s/ Márcio F. Ostwald

Márcio F. Ostwald

Partner

Rio de Janeiro, RJ - Brazil

March 25, 2014

F-9

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Endesa Brasil S.A.

Niterói – RJ, Brazil

We have audited the accompanying consolidated financial statements of Endesa Brasil S.A. and subsidiaries (the “Company”), which comprise the consolidated statements of financial position as of December 31, 2012 and 2011, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with International Financial Reporting Standards; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Endesa Brasil S.A. and subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with International Financial Reporting Standards.

ERNST & YOUNG TERCO

Auditores Independentes S.S.

/s/ Márcio F. Ostwald

Márcio F. Ostwald

Partner

Rio de Janeiro, RJ - Brazil

March 19, 2013

F-10

ENDESA CHILE AND SUBSIDIARIES

Consolidated Statements of Financial Position, Classified

At December 31, 2013, December 31, 2012, and January 1, 2012

(In Thousands of Chilean pesos)

ASSETS		31-12-2013		12/31/2012 (*)		1/12012 (*)
	Note			Restated		Restated
		ThCh$		ThCh$		ThCh$
CURRENT ASSETS
Cash and cash equivalents	5		323,807,379		235,677,733		389,768,271
Other current financial assets	6		24,136,478		25,119,785		914,209
Other current non-financial assets			37,265,346		17,342,247		14,307,830
Trade and other current receivables	7		247,762,922		217,682,591		278,790,141
Accounts receivable from related companies	8		131,909,802		75,488,611		103,848,707
Inventories	9		46,155,045		59,362,620		49,276,026
Current tax assets	10		154,394,684		150,680,329		82,053,456
TOTAL CURRENT ASSETS			965,431,656		781,353,916		918,958,640
NON-CURRENT ASSETS
Other non-current financial assets	6		4,060,289		33,304,990		13,492,454
Other non-current non-financial assets			54,998		1,931,475		1,175,332
Non-current receivables	7		131,597,410		146,964,151		151,608,768
Investments accounted for using the equity method	11		760,681,333		755,133,157		732,426,214
Intangible assets other than goodwill	12		56,048,545		55,752,625		45,528,291
Goodwill	13		100,096,198		101,747,086		106,385,017
Property, plant and equipment	14		4,692,288,945		4,515,242,392		4,451,020,122
Deferred tax assets	15		51,865,462		61,801,271		86,152,590
TOTAL NON-CURRENT ASSETS			5.796.693.180		5,671,877,147		5,587,788,788
TOTAL ASSETS			6,762,124,836		6,453,231,063		6,506,747,428

(*) See Note 2.2 a)

F-11

ENDESA CHILE AND SUBSIDIARIES

Consolidated Statements of Financial Position, Classified

At December 31, 2013, December 31, 2012, and January 1, 2012

(In Thousands of Chilean pesos)

LIABILITIES AND EQUITY		31-12-2013		12/31/2012 (*)		1/12012 (*)
	Note			Restated		Restated
		ThCh$		ThCh$		ThCh$
CURRENT LIABILITIES
Other current financial liabilities	16		353.733.521		406.455.036		294.300.017
Trade and other current payables	19		414.751.007		320.459.388		341.751.089
Accounts payable to related companies	8		312.914.164		215.916.921		137.455.787
Other current provisions	20		44.684.665		38.424.832		36.347.930
Current tax liabilities	10		104.559.351		78.374.028		90.465.240
Other current non-financial liabilities			7.748.727		6.387.423		5.700.771
TOTAL CURRENT LIABILITIES			1.238.391.435		1.066.017.628		906.020.834
NON-CURRENT LIABILITIES
Other non-current financial liabilities	16		1.540.762.609		1.525.651.818		1.728.093.903
Other long-term provisions	20		21.006.807		19.593.979		12.301.639
Deferred tax liabilities	15		305.689.520		320.277.100		321.510.926
Non-current provisions for employee benefits	21		40.868.802		39.672.411		36.041.426
Other non-current non-financial liabilities			27.591.673		47.524.798		61.780.693
NON-CURRENT LIABILITIES			1.935.919.411		1.952.720.106		2.159.728.587
TOTAL LIABILITIES			3.174.310.846		3.018.737.734		3.065.749.421
EQUITY
Issued capital	22		1.331.714.085		1.331.714.085		1.331.714.085
Retained earnings			1.908.211.855		1.709.375.632		1.636.787.540
Share premium	22		206.008.557		206.008.557		206.008.557
Other reserves	22		(793.966.650)		(705.855.875)		(615.972.185)
Equity attributable to shareholders of Endesa			2.651.967.847		2.541.242.399		2.558.537.997
Non-controlling interests			935.846.143		893.250.930		882.460.010
TOTAL EQUITY			3.587.813.990		3.434.493.329		3.440.998.007
TOTAL LIABILITIES AND EQUITY			6.762.124.836		6.453.231.063		6.506.747.428

(*) See Note 2.2 a)

F-12

ENDESA CHILE AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income, by type

for the years ended December 31, 2013, 2012, and 2011

(In Thousands of Chilean pesos)

STATEMENTS OF COMPREHENSIVE INCOME Profit (Loss)	Note	2013		2012 (*)		2011 (*)
				Restated		Restated
		ThCh$		ThCh$		ThCh$
Sales	23		1,965,903,869		2,255,145,360		2,267,839,378
Other operating income	23		61,528,111		65,239,964		16,425,409
Revenues			2,027,431,980		2,320,385,324		2,284,264,787
Raw materials and consumables used	24		(830,873,572)		(1,318,479,928)		(1,139,133,019)
Contribution Margin			1,196,558,408		1,001,905,396		1,145,131,768
Other work performed by the entity and capitalized			18,981,922		12,763,186		10,597,856
Employee benefits expenses	25		(123,449,758)		(102,456,232)		(75,915,220)
Depreciation and amortization expense	26		(189,695,339)		(184,567,997)		(170,505,351)
Impairment loss recognized in the period’s profit or loss	26		(6,458,953)		(11,117,362)		(9,472,766)
Other expenses	27		(113,097,401)		(104,111,190)		(133,146,638)
Operating Income			782,838,879		612,415,801		766,689,649
Other gains	28		3,357,139		1,422,458		2,010,780
Financial income	29		18,292,343		14,629,962		28,264,192
Financial costs	29		(142,666,776)		(148,468,667)		(135,257,667)
Share of profit of associates accounted for using the equity method	11		119,347,183		135,012,994		138,855,650
Foreign currency exchange differences	29		(13,756,657)		(12,090,438)		(6,649,911)
Profit (loss) from indexed assets and liabilities	29		1,001,573		(1,066,291)		(5,447,396)
Income before tax			768,413,684		601,855,819		788,465,297
Income tax	30		(204,907,447)		(182,832,956)		(207,329,896)
Net income from continuing operations			563,506,237		419,022,863		581,135,401
Net income from discontinued operations			-		-		-
NET INCOME			563,506,237		419,022,863		581,135,401
Net income attributable to
Shareholders of Endesa			353,926,779		234,335,264		446,874,043
Non-controlling interests	22.6		209,579,458		184,687,599		134,261,358
NET INCOME			563,506,237		419,022,863		581,135,401
Basic earnings per share
Basic earnings per share from continuing operations	Ch$ / share		43.15		28.57		54.49
Basic earnings per share	Ch$ / share		43.15		28.57		54.49
Diluted earnings per share
Diluted earnings per share from continuing operations	Ch$ / share		43.15		28.57		54.49
Diluted earnings per share	Ch$ / share		43.15		28.57		54.49

(*) See Note 2.2 a)

F-13

ENDESA CHILE AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income, by type

for the years ended December 31, 2013, 2012, and 2011

(In Thousands of Chilean pesos)

STATEMENTS OF COMPREHENSIVE INCOME	Note	2013         ThCh$		2012 (*) Restated ThCh$		2011 (*) Restated ThCh$
Net Income			563,506,237		419,022,863		581,135,401
Components of other comprehensive income that will not be reclassified subsequently to profit or loss, before taxes
Actuarial gains (losses) on defined benefit plans	21		(3,618,423)		(4,355,056)		(3,275,638)
Other comprehensive income that will not be reclassified subsequently to profit or loss			(3,618,423)		(4,355,056)		(3,275,638)
Components of other comprehensive income that will be reclassified subsequently to profit or loss, before taxes
Foreign currency translation gains (losses)			(18,023,501)		(126,559,182)		148,560,224
Gains (losses) of available-for-sale financial assets			109		581		(55,554)
Gains (losses) from cash flow hedge			(70,970,740)		63,458,260		(73,226,736)
Adjustments from reclassification of cash flow hedges, transferred to profit or loss			(9,985,207)		(11,553,610)		(9,763,590)
Share of other comprehensive income from associates and joint ventures accounted for using the equity method			10,923,982		158,675		(22,722,630)
Other comprehensive income that will be reclassified subsequently to profit or loss			(88,055,357)		(74,495,276)		42,791,714
Other components of other comprehensive income, before taxes			(91,673,780)		(78,850,332)		39,516,076
Income tax related to components of other comprehensive income that will not be reclassified subsequently to profit or loss
Income tax related to defined benefit plans			990,340		801,138		537,200
Income tax related to components of other comprehensive income that will not be reclassified subsequently to profit or loss			990,340		801,138		537,200
Income tax related to components of other comprehensive income that will be reclassified subsequently to profit or loss
Income tax related to cash flow hedge			14,235,483		(19,893,304)		17,363,818
Income tax related to available-for-sale financial assets			(22)		(235)		9,444
Income tax related to components of other comprehensive income that will be reclassified subsequently to profit or loss			14,235,461		(19,893,539)		17,373,262
Total Other Comprehensive Income			(76,447,979)		(97,942,733)		57,426,538
TOTAL COMPREHENSIVE INCOME			487,058,258		321,080,130		638,561,939
Comprehensive income attributable to
Shareholders of Endesa			279,020,022		143,125,464		425,287,567
Non-controlling interests			208,038,236		177,954,666		213,274,372
TOTAL COMPREHENSIVE INCOME			487,058,258		321,080,130		638,561,939

(*) See Note 2.2 a)

F-14

ENDESA CHILE AND SUBSIDIARIES

Statements of Changes in Equity

For the years ended December 31, 2013, December 31, 2012, and December 31, 2011

(In Thousands of Chilean pesos)

Statements of Changes in Equity					Changes in Other Reserves
	Issued Capital		Share Premium		Reserve for Exchange  Differences in  Translation		Reserve for  Cash Flow  Hedges		Reserves  for Gains and Losses  for Defined  Benefit  Plans		Reserves for  Gains and  Losses on  Remeasuring  Available-  for-Sale  Financial  Assets		Other  Miscellaneous  Reserves		Other  reserves		Retained  earnings		Equity  Attributable  to  Shareholders  of Endesa		Non-  Controlling  Interests		Total Equity
Equity at beginning of period 1/1/2013		1,331,714,085		206,008,557		(25,411,914)		47,991,711		-		3,629		(728,439,301)		(705,855,875)		1,709,375,632		2,541,242,399		893,250,930		3,434,493,329
Changes in equity
Comprehensive income
Net income																		353,926,779		353,926,779		209.579.458		563.506.237
Other comprehensive income						(20,197,677)		(63,587,701)		(2,045,448)		87		10,923,982		(74,906,757)				(74,906,757)		(1.541.222)		(76.447.979)
Comprehensive income																				279,020,022		208.038.236		487.058.258
Dividends																		(153,045,108)		(153,045,108)				(153.045.108)
Increase (decrease) through transfers and other changes		-		-		-		-		2,045,448		-		(15,249,466)		(13,204,018)		(2,045,448)		(15,249,466)		(165,443,023)		(180.692.489)
Total changes in equity		-		-		(20,197,677)		(63,587,701)		-		87		(4,325,484)		(88,110,775)		198,836,223		110,725,448		42,595,213		153.320.661
Equity at end of period 12/31/2013		1,331,714,085		206,008,557		(45,609,591)		(15,595,990)		-		3,716		(732,764,785)		(793,966,650)		1,908,211,855		2,651,967,847		935,846,143		3,587,813,990
Statements of Changes in Equity					Changes in Other Reserves
	Issued Capital		Share Premium		Reserve for Exchange  Differences in  Translation		Reserve for  Cash Flow  Hedge		Reserves for Gains  and Losses for Defined  Benefit  Plans		Reserves for  Gains and  Losses on  Remeasuring  Available-  for-Sale  Financial  Assets		Other  Miscellaneous  Reserves		Other  Reserves		Retaomed  Earmomgs		Equity  Attributable  to  Shareholders  of Endesa		Non/controlling  Interests		Total Equity
Equity at beginning of period 1/1/2012		1,331,714,085		206,008,557		93,661,622		17,610,043		-		3,283		(727,247,133)		(615,972,185)		1,636,787,540		2,558,537,997		882,460,010		3,440,998,007
Changes in equity
Comprehensive income
Net income																		234,335,264		234,335,264		184.687.599		419.022.863
Other comprehensive income						(119,073,536)		30,381,668		(2,071,797)		346		(446,481)		(91,209,800)				(91,209,800)		(6.732.933)		(97.942.733)
Comprehensive income																				143,125,464		177.954.666		321.080.130
Dividends																		(159,675,375)		(159,675,375)				(159.675.375)
Increase (decrease) through transfers and other changes		-		-		-		-		2,071,797		-		(745,687)		1,326,110		(2,071,797)		(745,687)		(167,163,746)		(167.909.433)
Total changes in equity		-		-		(119,073,536)		30,381,668		-		346		(1,192,168)		(89,883,690)		72,588,092		(17,295,598)		10,790,920		(6.504.678)
Equity at end of period 12/31/2012 (*) Restated		1,331,714,085		206,008,557		(25,411,914)		47,991,711		-		3,629		(728,439,301)		(705,855,875)		1,709,375,632		2,541,242,399		893,250,930		3,434,493,329
Statements of Changes in Equity					Changes in Other Reserves
	Issued capital		Share Premium		Reserve for Exchange  Differences in  Translation		Reserve for  Cash Flow  Hedge		Reserves  for Gains  and Losses  for Defined  Benefit  Plans		Reserves for  Gains and  Losses on  Remeasuring  Available-  for-Sale  Financial  Assets		Other  Miscellaneous  Reserves		Other  Reserves		Retaomed  Earmomgs		Equity  Attributable  to  Shareholders  of Endesa		Non/controlling  Interests		Total Equity
Equity at beginning of period 1/1/2011		1,331,714,085		206,008,557		19,847,960		104,200,016		-		49,393		(727,647,609)		(603,550,240)		1,442,314,476		2,376,486,878		728,340,314		3,104,827,192
Changes in equity
Comprehensive income
Net income																		446,874,043		446,874,043		134.261.358		581.135.401
Other comprehensive income						73,813,662		(86,589,973)		(8,764,055)		(46,110)		-		(21,586,476)				(21,586,476)		79.013.014		57.426.538
Comprehensive income																-				425,287,567		213.274.372		638.561.939
Dividends																-		(240,773,372)		(240,773,372)				(240.773.372)
Increase (decrease) through transfers and other changes		-		-		-		-		8,764,055		-		400,476		9,164,531		(11,627,607)		(2,463,076)		(59,154,676)		(61.617.752)
Total changes in equity		-		-		73,813,662		(86,589,973)		-		(46,110)		400,476		(12,421,945)		194,473,064		182,051,119		154,119,696		336.170.815
Equity at end of period 12/31/2011 (*) Restated		1,331,714,085		206,008,557		93,661,622		17,610,043		-		3,283		(727,247,133)		(615,972,185)		1,636,787,540		2,558,537,997		882,460,010		3,440,998,007

F-15

ENDESA CHILE AND SUBSIDIARIES

Consolidated Statement of Direct Cash Flows

For the years ended December 31, 2013, 2012, and 2011

(In Thousands of Chilean pesos)

		2013		2012 (*)		2011 (*)
Statements of Direct Cash Flow	Note			Restated		Restated
		ThCh$		ThCh$		ThCh$
Cash flow from (used in) operating activities
Types of collections from operating activities
Collections from the sale of goods and services			2,301,874,412		2,499,606,379	2,368,738,929
Collections from premiums and services, annual payments, and other benefits from policies held			74,183,266		5,903,050	16,628,221
Other collections from operating activities			33,887,194		54,355,078	2,378,295
Types of payments
Payments to suppliers for goods and services			(1,265,530,791)		(1,523,776,643)	(1,321,067,912)
Payments to and on behalf of employees			(117,293,888)		(101,337,905)	(67,270,485)
Payments on premiums and services, annual payments, and other obligations from policies held			(5,574,523)		(6,428,460)	(5,064,371)
Other payments for operating activities			(33,439,518)		(39,729,787)	(25,946,895)
Income taxes paid			(166,026,029)		(213,016,120)	(231,950,211)
Other outflows of cash			(114,311,073)		(137,591,721)	(71,911,854)
Net cash flows from operating activities			707,769,050		537,983,871	664,533,717
Cash flows from (used in) investment activities
Cash flows used to obtain control of subsidiaries or other business			(5,084,700)		(7,140,000)	(4,058,192)
Other collections from the sale of equity or debt instruments belonging to other entities			24,340,564		-	-
Other payments to acquire equity or debt instruments from other entities			-		(25,017,177)	-
Loans to related companies			(29,112,042)		(2,000)	(36,828,162)
Proceeds from the sale of property, plant, and equipment			5,462,527		755,445	4,808,823
Purchases of property, plant, and equipment			(292,016,898)		(257,474,634)	(259,673,138)
Purchases of intangible assets			-		(8,535)	(3,935,477)
Payments from future, forward, option, and swap contracts			(753,082)		(2,691,688)	(3,474,792)
Collections from future, forward, option, and swap contracts			14,308,008		2,013,452	4,108,554
Collections from related entities			29,162,747		2,600,730	-
Dividends received			51,167,601		10,898,590	100,121,048
Interest received			17,176,674		7,053,828	6,138,870
Other inflows (outflows) of cash			(397,620)		10,693,352	41,114
Net cash flows used in investment activities			(185,746,221)		(258,318,637)	(192,751,352)
Cash flows from (used in) financing activities
Proceeds from share issuance			11,468,280		-	-
Total proceeds from loans			173,402,389		233,456,449	219,433,669
Proceeds from long-term loans			164,871,359		229,377,002	219,433,669
Proceeds from short-term loans			8,531,030		4,079,447	-
Loans from related companies			692,658,296		210,996,548	53,289,193
Payments on borrowings			(253,224,175)		(253,055,606)	(139,777,444)
Payments on financial lease liabilities			(5,071,087)		(7,522,468)	(8,811,381)
Payments on loans to related companies			(608,822,618)		(100,716,674)	(34,110,125)
Dividends paid			(293,937,897)		(380,332,864)	(368,222,978)
Interest paid			(136,456,892)		(124,326,459)	(107,274,772)
Other outflows of cash			(9,603,719)		(12,497,098)	(14,786,723)
Net cash flows used in financing activities			(429,587,423)		(433,998,172)	(400,260,561)
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes			92,435,406		(154,332,938)	71,521,804
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents			(4,305,760)		242,400	14,486,741
Net increase (decrease) in cash and cash equivalents			88,129,646		(154,090,538)	86,008,545
Cash and cash equivalents at beginning of period	5		235,677,733		389,768,271	303,759,726
Cash and cash equivalents at end of period	5		323,807,379		235,677,733	389,768,271

     (*) See Note 2.2 a)

F-16

ENDESA CHILE AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page
1.       THE GROUP’S ACTIVITIES AND FINANCIAL STATEMENTS	F-21
2.       BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS	F-22
2.1.    Accounting principles	F-22
2.2.    New accounting pronouncements	F-22
2.3.    Responsibility for the information given and estimates made	F-26
2.4.    Subsidiaries	F-27
2.4.1.   Changes in the scope of consolidation	F-27
2.4.2.   Consolidated companies with an ownership interest of less than 50%	F-27
2.4.3.   Unconsolidated companies with an ownership interest of more than 50%	F-27
2.5.    Associated companies and joint arrangements	F-27
2.6.    Basis of consolidation and business combinations	F-28
3.       ACCOUNTING CRITERIA APPLIED	F-30
a)      Property, plant, and equipment	F-30
b)      Goodwill	F-32
c)      Intangible assets other than goodwill	F-32
c.1)    Concessions	F-32
c.2)     Research and development expenses	F-33
c.3)    Other intangible assets	F-33
d)      Asset impairment	F-34
d.1)     Non-financial assets (except inventory and deferred tax assets)	F-34
d.2)    Financial assets	F-35
e)      Leases	F-35
f)      Financial instruments	F-35
f.1)     Financial assets other than derivatives	F-36
f.2)    Cash and cash equivalents	F-36
f.3)     Financial liabilities other than derivatives	F-36
f.4)     Derivative financial instruments and hedge accounting	F-37
f.5)     Fair value measurement and classification of financial instruments	F-38
f.6)     Derecognition of financial assets and liabilities	F-38
g)      Investments accounted for using the equity method	F-39
h)      Inventories	F-39
i)       Treasury shares	F-39
j)       Provisions	F-39
j.1)   Provisions for post-employment benefits and similar obligations	F-39
k)      Conversion of balances in foreign currency	F-40
l)       Current / non-current classification	F-40
m)     Income tax	F-40
n)      Revenue and expense recognition	F-41
o)      Earnings per share	F-41
p)      Dividends	F-42
q)      Cash flow statement	F-42
4.       SECTOR REGULATIONS AND ELECTRICITY SYSTEM OPERATIONS	F-43
a)    Chile	F-43
b)    The rest of Latin America	F-44
5.      CASH AND CASH EQUIVALENTS	F-48

F-17

6.      OTHER FINANCIAL ASSETS	F-48
7.       TRADE AND OTHER RECEIVABLES	F-49
8.       BALANCES AND TRANSACTIONS WITH RELATED PARTIES	F-51
8.1    Balances and transactions with related companies	F-51
8.2    Board of Directors and key management personnel	F-54
8.3    Compensation for Endesa Chile executives	F-56
8.4    Compensation plans linked to share price	F-56
9.      INVENTORIES	F-57
10.    CURRENT TAX RECEIVABLES AND PAYABLES	F-57
11.     INVESTMENTS ACCOUNTED FOR WITH THE EQUITY METHOD	F-58
11.1. Investments accounted for with the equity method	F-58
11.2. Additional financial information on investments in associated companies	F-59
11.3. Additional information on investments in joint ventures	F-60
12.     INTANGIBLE ASSETS OTHER THAN GOODWILL	F-61
13.    GOODWILL	F-63
14.    PROPERTY, PLANT, AND EQUIPMENT	F-64
a)   Property, plant, and equipment	F-64
b)   The detail of, and changes, in property, plant, and equipment	F-64
c)   Main investments	F-65
d)   Finance leases	F-65
e)   Operating leases	F-65
f)    Other information	F-66
15.    DEFERRED TAX	F-67
16.    OTHER FINANCIAL LIABILITIES	F-69
1.    Detail of short- and long-term interest-bearing borrowings	F-69
2.    Bank loans by currency and contractual maturity	F-69
3.    Detail of Unsecured Liabilities by currency and maturity	F-72
4.    Detail of Secured Liabilities by currency and maturity	F-72
5.    Hedged debt	F-75
6.    Other information	F-75
17.    RISK MANAGEMENT POLICY	F-76
17.1. Interest rate risk	F-76
17.2. Exchange rate risk	F-77
17.3. Commodities risk	F-77
17.4. Liquidity risk	F-77
17.5. Credit risk	F-78
17.6. Risk measurement	F-78

F-18

18.    FINANCIAL INSTRUMENTS	F-80
18.1. Financial instruments, classified by type and category	F-80
a)   Detail of financial assets	F-80
b)   Detail of financial liabilities	F-81
18.2. Derivative instruments	F-82
a) Assets and liabilities for hedge derivative instruments	F-82
b) Financial derivative instrument assets and liabilities at fair value with changes in net income	F-82
c) Other information on derivatives	F-83
18.3. Fair value hierarchies	F-84
a)   Hierarchies of financial instruments	F-84
b)    Reconciliation between opening and closing balances for financial instruments at Level 3	F-85
19.    TRADE AND OTHER PAYABLES	F-85
20.    OTHER PROVISIONS	F-86
20.1 Provisions	F-86
a)  Detail of provisions	F-86
b)  Changes in provisions during the 2013 and 2012 fiscal years	F-86
21.    EMPLOYMENT BENEFIT OBLIGATIONS	F-87
21.1.  General information	F-87
21.2.  Details, changes, and presentation in financial instruments	F-88
21.3.  Other disclosures	F-89
22.    TOTAL EQUITY	F-90
22.1. Equity attributable to the shareholders of Endesa Chile	F-90
22.1.1. Subscribed and paid capital and number of shares	F-90
22.1.2. Dividends	F-90
22.2. Foreign currency translation reserves	F-91
22.3. Capital management	F-91
22.4. Restrictions on subsidiaries’ transferring funds to the parent	F-91
22.5. Other reserves	F-92
22.6. Non-controlling interests	F-93
23.    REVENUES	F-94
24.    RAW MATERIALS AND CONSUMABLES USED	F-94
25.    EMPLOYEE BENEFITS EXPENSE	F-95
26.     DEPRECIATION, AMORTIZATION, AND IMPAIRMENT LOSSES	F-95
27.    OTHER EXPENSES	F-96
28.    OTHER GAINS (LOSSES)	F-96
29.    FINANCIAL RESULTS	F-97
30.    INCOME TAX	F-98
31.    INFORMATION BY SEGMENT	F-99
31.1. Segmentation criteria	F-99
31.2. Distribution by country	F-100

F-19

32.     THIRD PARTY GUARANTEES, OTHER CONTINGENT ASSETS AND LIABILITIES, AND OTHER COMMITMENTS.	F-102
32.1. Direct guarantees	F-102
32.2. Indirect guarantees	F-102
32.3. Lawsuits and Arbitrations Proceedings	F-103
a)      Pending lawsuits of Endesa Chile and Subsidiaries	F-103
b)      Pending lawsuits in associates and joint ventures	F-107
32.4. Financial restrictions	F-111
32.5. Other information	F-113
33.    PERSONNEL FIGURES	F-114
34.    SANCTIONS	F-115
35.    SUBSEQUENT EVENTS	F-121
36.    ENVIRONMENT	F-122
37.     FINANCIAL INFORMATION ON SUBSIDIARIES	F-123

APPENDIX 1	ENDESA CHILE GROUP COMPANIES	F-125
APPENDIX 2	CHANGES IN SCOPE OF CONSOLIDATION	F-127
APPENDIX 3	ASSOCIATED COMPANIES AND JOINT VENTURES	F-128
APPENDIX 4	ADDITIONAL INFORMATION ON FINANCIAL DEBT	F-129
	a) Bank borrowings	F-129
	b) Secured and unsecured liabilities	F-131
	c) Finance lease obligations	F-132
	d) Other liabilities	F-132
APPENDIX 5	DETAILS OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY	F-133
APPENDIX 6	ADDITIONAL INFORMATION OFICIO CIRCULAR NO. 715 OF FEBRUARY 3, 2012	F-135
APPENDIX 6.1	COMPLEMENTARY INFORMATION ON TRADE RECEIVABLES	F-138
APPENDIX 7	FINANCIAL STATEMENTS, RESTATED	F-141
	a) Consolidated statements of financial position	F-141
	b) Consolidated statement of comprehensive income	F-143
	c) Consolidated statement of cash flow	F-144

F-20

ENDESA S.A. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

(In thousands of Chilean pesos)

1.    THE GROUP´S ACTIVITIES AND FINANCIAL STATEMENTS

Empresa Nacional de Electricidad S.A. (hereinafter the Parent Company or the Company) and its subsidiaries comprise the Endesa Chile Group (hereinafter Endesa Chile or the Group).

Endesa Chile is a publicly traded corporation with registered address and head office located at Avenida Santa Rosa, No. 76, in Santiago, Chile. The Company is registered in the securities register of the Superintendency of Securities and Insurance of Chile (Superintendencia de Valores y Seguros or SVS) under number 114. In addition, the Company is registered with the Securities and Exchange Commission of the United States of America (hereinafter U.S. SEC) and with Spain’s Comisión Nacional del Mercado de Valores. The Company’s shares have been listed on the New York Stock Exchange since 1994 and on the Latibex since 2001

Endesa Chile is a subsidiary of Enersis S.A., a company which, in turn, is a subsidiary of Endesa S.A., a Spanish entity controlled by Enel, S.p.A. (hereinafter Enel).

The Company was initially created by a public deed dated December 1, 1943. The Treasury Department’s Supreme Decree No. 97 of January 3, 1944 authorized the creation of the company and approved its by-laws. For tax purposes, the Company operates under Chilean tax identification number 91,081,000-6.

As of December 31, 2013, the Group had 2,509 employees. During 2013, the Group averaged a total of 2,497 employees. See Note 33 for additional information regarding employee distribution by category and geographic location.

The Company’s corporate purpose consists of generating, transporting, producing, and distributing electrical energy. Its corporate purpose also includes investing in financial assets, developing projects, carrying out activities in the energy industry and in other fields in which electrical energy is essential, and participating in public civil or hydraulic infrastructure concessions in which it may participate directly or through subsidiaries or associate companies in Chile or abroad.

The Company’s 2012 consolidated financial statements were approved by the Board of Directors at a meeting held on January 30, 2013. The consolidated financial statements were then submitted to the consideration of a General Shareholders Meeting held on April 15, 2013, which gave its final approval of the consolidated financial statements.

These consolidated financial statements are shown in thousands of Chilean pesos (unless expressly stated otherwise), as the Chilean peso is the functional currency with which Endesa Chile operates. Foreign operations are reported in accordance with the accounting policies stated in Notes 2.6 and 3.k.

F-21

2.    BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

2.1  Accounting principles

The December 31, 2013 consolidated financial statements of Endesa Chile and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Boards (hereinafter IASB), and approved by its Board of Directors at its meeting held on February 7, 2014.

These consolidated financial statements faithfully reflect the financial position of Endesa Chile as of December 31, 2013, December 31, 2012, and January 1, 2012, as well as the results of operations, the changes in equity, and the cash flows for the years ended December 31, 2013, 2012, and 2011.

These consolidated financial statements voluntarily present the figures for the 2011 fiscal year from the consolidated comprehensive income statement, the consolidated cash flow statement, the statement of changes in consolidated equity, and their notes.

These consolidated financial statements have been prepared using cost method accounting applied to the business in operation principle except, in accordance with IFRS, those assets and liabilities that are reported at a fair value and those non-current assets and groups that are available for sale, which are recorded at the book value or the fair value minus sales costs, whichever is lower (see Note 3).

These consolidated financial statements have been prepared from accounting records maintained by the Company and its subsidiaries. Each entity prepares its financial statements according to the accounting principles and standards in force in each country, so the necessary adjustments and reclassifications have been made in the consolidation process in order to present the consolidated financial statements in accordance with IFRS and the interpretations of the IFRS Interpretation Committee (hereinafter “IFRIC”).

2.2  New accounting pronouncements

a)    Accounting pronouncements effective from January 1, 2013:

Standards, Interpretations, and Amendments	Mandatory Application for:
Amendment to IAS 1: Presentation of financial statements Modifies aspects of the presentation of components of “Other Comprehensive Income.” It requires that these components be grouped under those that will and those that will not subsequently be reclassified as profits and losses.	Annual periods beginning on or after July 1, 2012.
IFRS 10: Consolidated Financial Statements Establishes clarifications and new parameters for defining control and for the principles of preparing consolidated financial statements. It applies to all entities (including special purpose or structured entities).	Annual periods beginning on or after January 1, 2013.

F-22

IFRS 11: Joint Arrangements Redefines the concept of joint arrangement in order to align it with IFRS 10. It requires that the entities that are party to a joint arrangement determine what type of arrangement is involved (joint operation or joint venture) by assessing their rights and obligations. The standard eliminates the possibility of proportional consolidation for joint ventures.	Annual periods beginning on or after January 1, 2013.
IFRS 12: Disclosures of Interests in Other Companies Requires certain disclosures that allow for assessing the nature of stakes in other entities and the risks associated with these stakes, as well as the effects of these stakes on the entity’s financial situation, financial performance, and cash flows.	Annual periods beginning on or after January 1, 2013.
IFRS 13: Fair Value Measurement Establishes, in a single standard, a framework for measuring the fair value of assets and liabilities, and incorporates new concepts and clarifications for such measurement. It also requires information to be disclosed by the entities on the measurements of the fair value of their assets and liabilities.	Annual periods beginning on or after January 1, 2013.
New IAS 27: Separate Financial Statements The issuance of IFRS 10 eliminated all matters regarding consolidated financial statements from IAS 27, restricting its scope to separate financial statements only.	Annual periods beginning on or after January 1, 2013.
New IAS 28: Investments in Associates and Joint Ventures Amended by the issuance of IFRS 10 and IFRS 11 for the purpose of making the definitions and other clarifications contained in these new IFRS uniform.	Annual periods beginning on or after January 1, 2013.
Amendment to IFRS 7: Financial Instruments - Disclosures Clarifies the requirements of disclosures relating to offsetting of financial assets and financial liabilities.	Annual periods beginning on or after January 1, 2013.
Amendment to IAS 19: Employee Benefits Modifies the recognition and disclosure for changes in obligations for defined benefit plans and the assets involved in the plan, eliminating the corridor method and accelerating recognition of past service costs.	Annual periods beginning on or after January 1, 2013.
Improvements to the IFRS Corresponds to a number of necessary but non-urgent improvements that amend the following standards: IFRS 1, IAS 1, IAS 16, IAS 32, and IAS 34.	Annual periods beginning on or after January 1, 2013.
Transition Guide (Amendments to IFRS 10, 11, and 12) The amendments clarify IFRS 10 transition guidance. These amendments also simplify the transition for IFRS 10, IFRS 11, and IFRS 12, limiting the requirements to the provision of adjusted comparative information for the immediately preceding period only. In addition, the amendments eliminate the requirement to present comparative information for disclosures related to unconsolidated structured entities for periods prior to the first application of IFRS 12.	Annual periods beginning on or after January 1, 2013.

The Group applied of these new pronouncements retrospectively, except for IFRS 13, Fair Value Measurement, which was applied prospectively.

F-23

NIIF 11 “Joint Arrangements”

As of 2013, with the application of IFRS 11, Joint Arrangements, companies controlled jointly by the Group that were consolidated proportionally up to the financial statements presented as of December 31, 2012, must now be recorded using the equity method (see Notes 2.5 and 3.g), as required by the new standard for joint arrangements that qualify as Joint Ventures.

The companies involved are the following:

- Centrales Hidroeléctricas de Aysén S.A. and subsidiaries.

- Inversiones Gas Atacama Holding Ltda. and subsidiaries.

- Transmisora Eléctrica de Quillota Ltda.

Since the application of IFRS 11, Joint Arrangements, is retrospective, these consolidated financial statements include restatements made to the statements of financial position as of December 31 and January 1, 2012; to the comprehensive income, changes in net equity, and cash flow statements for the years ended December 31, 2012 and 2011; and the explanatory notes; all previously issued and approved by the Endesa Chile management bodies. These changes do not affect the determination of equity or profit attributable to the shareholders of Endesa. The application of this standard has not affected basic earnings per share, nor has it given rise to a stock dilution.

The following is a summary of the net effect of the restatement on the each of the respective financial statement line items:

	Change
Consolidated Statements of Financial Position	12-31-2012 ThCh$		01-01-2012   ThCh$
Current assets		(53,631,975)		(41,096,680)
Non-current assets		18,173,114		(14,169,008)
TOTAL ASSETS		(35,458,861)		(55,265,688)
Current liabilities		(19,480,600)		(31,208,445)
Non-current liabilities		(15,828,145)		(23,915,677)
Equity attributable to shareholders of Endesa		-		-
Non-controlling interests		(150,116)		(141,566)
TOTAL LIABILITY AND EQUITY		(35,458,861)		(55,265,688)
Consolidated Statements of Comprehensive Income		12-31-2012 ThCh$		12-31-2011 ThCh$
Revenues		(49,001,050)		(120,225,418)
Raw materials and consumables used		10,222,847		78,127,058
CONTRIBUTION MARGIN		(38,778,203)		(42,098,360)
Depreciation and amortization expenses		5,954,973		5,941,749
Operating income		(19,793,404)		(21,280,961)
Net income before tax		(2,657,183)		(3,253,918)
Net income attributable to shareholders of Endesa		-		-
Net income attributable to non-controlling interests		(19,916)		(19,309)
NET INCOME		(19,916)		(19,309)
Consolidated Statements of Cash Flow	12-31-2012 ThCh$		12-31-2011 ThCh$
Net cash flow from (used in) operating activities		(16,273,758)		(20,572,417)
Net cash flow from (used in) investment activities		(150,868)		1,640,816
Net cash flow from (used in) financing activities		4,520,385		16,927,789
Effect of exchange rate changes on cash and cash equivalents		2,301,312		(68)
Cash and cash equivalents at beginning of period		(31,514,013)		(29,510,133)
Cash and cash equivalents at end of period		(41,116,942)		(31,514,013)

For more details, see Appendix 7, Restated Financial Statements.

The rest of the standards and amendments adopted, which went into effect on January 1, 2013, have not had a significant effect on the consolidated financial statements of Endesa Chile and its subsidiaries.

F-24

b)  Accounting pronouncements effective from January 1, 2014 and subsequent periods:

As of the issuance date of these consolidated financial statements, the following accounting pronouncements had been issued by the International Accounting Standards Boards (IASB), but they were not yet mandatory:

  Standards, Interpretations, and Amendments     Mandatory Application for:  

Amendment to IAS 32: Financial Instruments: Presentation Clarifies the requirements for offsetting financial assets and financial liabilities in order to eliminate inconsistencies in applying the current IAS 32 criteria for offsetting.	Annual periods beginning on or after January 1, 2014.
Amendments to IFRS 10, 12, and IAS 27: Investment Entities Under IFRS 10, reporting entities are required to consolidate all of the companies over which they have control. The amendment establishes an exception to these requirements, allowing Investment Entities to measure their investments at fair value with changes in income as provided for under IFRS 9 instead of consolidating them.	Annual periods beginning on or after January 1, 2014.
IFRS 9: Financial Instruments: Classification and Measurement This is the first stage of the IASB project to replace IAS 39, “Financial Instruments: Recognition and Measurement.” It modifies the classification and measurement of financial assets and includes the treatment and classification of financial liabilities.	No date set. Early application of concluded stages is permitted.
IFRIC 21: Levies This interpretation of IAS 37, “Provisions, Contingent Assets, and Contingent Liabilities,” provides guidance on when an entity must recognize a liability for a levy imposed by a government other than income tax in its financial statements.	Annual periods beginning on or after January 1, 2014.
Amendment to IAS 36: Impairment of Assets The amendment clarifies the extent of disclosures regarding the recoverable value of impaired assets, limiting the information requirements to the recoverable amount, based on the fair value less costs of disposal.	Annual periods beginning on or after January 1, 2014.
Amendment to IAS 39: Financial Instruments: Recognition and Measurement This amendment incorporates into the Standard the criteria that must be met in order not to discontinue hedge accounting if a hedging derivative is novated.	Annual periods beginning on or after January 1, 2014.
Amendment to IFRS 9: Financial Instruments: Classification and Measurement This is the second stage of the IASB project to replace IAS 39, Financial Instruments: Recognition and Measurement. This amendment adds a special chapter on hedge accounting that establishes a new model aimed at reflecting better alignment between accounting and risk management. Improvements have also been made to the disclosures required. This amendment also eliminates the mandatory application date for IFRS 9 since the third and final stage of the project, which covers impairment of financial assets, has still not been completed.	No date set. Early application of concluded stages is permitted.

F-25

Amendment to IAS 19: Employee Benefits The purpose of this modification to the scope of IAS 19 is to simplify the accounting for contributions not affected by the employee’s years of service, such as employee contributions calculated on the basis of a fixed percentage of a salary.	Annual periods beginning on or after July 1, 2014.
Improvements to the IFRS (2010-2012 and 2011-2013 Cycles) This is a set of improvements that are necessary but not urgent. They make changes to the following standards: IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, IAS 38, and IAS 40.	Annual periods beginning on or after July 1, 2014.

The Group is assessing the impact of applying IFRS 9 from the date it goes into effect. In Management’s opinion, the application of other standards, interpretations, and amendments pending application will not have a significant effect on the consolidated financial statements of Endesa Chile.

2.3  Responsibility for the information given and the estimates made

The Company’s Board of Directors is responsible for the information contained in these consolidated financial statements and expressly states that all IFRS principles and standards, as issued by the IASB, have been fully implemented.

In preparing the consolidated financial statements, certain estimates made by the Company’s Management have been used to quantify some of the assets, liabilities, income, expenses, and commitments recorded in the statements.

These estimates basically refer to:

- The valuation of assets and goodwill to determine the existence of impairment losses (see Note 3.d).

- The assumptions used to calculate the actuarial liabilities and obligations to employees, such as discount rates, mortality tables, salary raises, etc. (see Notes 3.j.1 and 21).

- The useful life of property, plant, and equipment, and intangible assets (see Notes 3.a and 3.c).

- The assumptions used to calculate the fair value of financial instruments (see Notes 3.f.5 and 18).

- Energy supplied to customers whose meter readings are pending.

- Certain assumptions inherent in the electricity system affecting transactions with other companies, such as production, customer billings, energy consumption, etc. that allow for estimating electricity system settlements that must occur on the corresponding final settlement dates, but that are pending as of the date of issuance of the consolidated financial statements and could affect the balances of assets, liabilities, income, and expenses recorded in the statements.

- The probability that uncertain or contingent liabilities will be incurred and their related amounts (see Note 3.j).

- Future disbursements for the closure of facilities and restoration of land (see Note 3.a).

- The tax results of the various subsidiaries of the Endesa Chile that will be reported to the respective tax authorities in the future, and that have served as the basis for recording different balances related to income taxes in these consolidated financial statements (see Note 3.m).

F-26

Although these estimates have been based on the best information available on the issuance date of these consolidated financial statements, future events may occur that would require a change (increase or decrease) to these estimates in subsequent periods. This change would be made prospectively, recognizing the effects of such an estimation change in the corresponding future consolidated financial statements.

2.4  Subsidiaries

Subsidiaries are defined as entities in which Endesa Chile controls, directly or indirectly, the majority of the substantive voting rights or, should that not be the case, entities where it has rights granting it the present power to direct the entities’ relevant activities, including, for these purposes, its potential voting rights or those of third parties that are exercisable or convertible at the end of each fiscal year.

Endesa Chile is exposed to, or entitled to, these companies’ variable results and is able to influence the amount of such results.

Appendix 1 of these consolidated financial statements, entitled Endesa Chile Group Companies, describes the relationship of Endesa Chile with each of its subsidiaries.

2.4.1 Changes in the scope of consolidation

During the 2013 and 2012 fiscal years, there were no significant changes in Endesa Chile’s scope of consolidation. Other than the retrospective adoption of IAS 11 described in note 2.2 a).

Appendix 2 to these consolidated financial statements, entitled Changes in the Endesa Chile Group’s Scope of Consolidation, lists the companies included within the scope of the Group’s consolidation, together with information on the Group’s respective ownership interest percentages.

2.4.2 Consolidated companies with an ownership interest of less than 50%

Although the Endesa Chile Group holds a 26.87% interest in Empresa Generadora de Energía Eléctrica S.A. (“Emgesa”), it is considered to be a subsidiary since Endesa Chile exercises control over the entity, through contracts or agreements with shareholders, or as a consequence of its structure, composition, and shareholder classes. The Groups holds 56.43% of the voting shares in Emgesa.

2.4.3 Unconsolidated companies with an ownership interest of more than 50%

Although the Endesa Chile Group holds more than a 50% interest in Centrales Hidroeléctricas de Aysén, S.A. (“Aysén”), it is considered a joint venture since the Group, through contracts and agreements with shareholders, exercises joint control of the company.

2.5  Associated companies and joint arrangements

Associated companies are those in which Endesa Chile, either directly or indirectly, exercises significant influence.

Significant influence is having the power to influence the financial and operational policy decisions of the associated company without having either sole or joint control of the company. In general, significant influence is assumed to be those cases in which the Group has an ownership interest over 20% (see Note 3.g).

Joint arrangements are defined as those entities in which the Group exercises control given an agreement with other shareholders and jointly with them, in other words, when decisions on the entities’ relevant activities require the unanimous consent of the parties sharing control. Joint arrangements are classified as:

- Joint venture: an agreement under which the parties exercising joint control have rights to the entity’s net assets.

F-27

- Joint operation: an agreement under which the parties exercising joint control have rights to the assets and obligations with respect to the liabilities involved in the arrangement. At this time, Endesa Chile does not have any joint arrangements that qualify as joint operations.

Appendix 3 to these consolidated financial statements, entitled “Associated Companies and Joint Ventures,” describes the relationship of Endesa Chile with each of these companies.

2.6 Basis of consolidation and business combinations

The subsidiaries are consolidated and all their assets, liabilities, income, expenses, and cash flows are included in the consolidated financial statements once the adjustments and eliminations from intra-Group transactions have been made.

The comprehensive income of subsidiaries is included in the consolidated comprehensive income statement from the date that the parent company obtains control of the subsidiary until the date on which it loses control of the subsidiary.

The operations of the parent company and its subsidiaries have been consolidated under the following basic principles:

1. At the date the parent takes control, the subsidiary’s assets acquired and its liabilities assumed are recorded at fair value, except for certain assets and liabilities that are recorded using valuation principles established in other IFRS standards. If, in the parent company’s stake, there is a positive difference between the fair value of the consideration transferred (the acquisition cost) and the fair value of the assets and liabilities of the subsidiary, including contingent liabilities, this difference is recorded as goodwill. If the difference is negative, the resulting profit is recorded as a credit to income after reevaluating whether all of the assets acquired and the liabilities assumed have been correctly identified and following a review of the procedures used to measure these amounts.

For business combinations carried out in stages, the fair value of the stake previously held in the acquired company’s equity is measured on the date of acquisition and any profit or loss is recognized in the results for that fiscal year or in other comprehensive income, as applicable.

2. Non-controlling interests in equity and in the comprehensive income of the consolidated subsidiaries are presented, respectively, under the line items “Total Equity: Non-controlling interests” in the consolidated statement of financial position and “Net Income attributable to non-controlling interests” and “Comprehensive income attributable to non-controlling interests” in the consolidated statement of comprehensive income.

3. The financial statements of foreign companies with functional currencies other than the Chilean peso are translated as follows:

a. For assets and liabilities, the prevailing exchange rate on the closing date of the financial statements is used.

b. For items in the comprehensive income statement, the average exchange rate for the fiscal year is used (unless this average is not a reasonable approximation of the cumulative effect of the exchange rates in effect on the dates of the transactions, in which case the exchange rate in effect on the date of each transaction is used).

c. Equity remains at the historical exchange rate from the date of acquisition or contribution, and retained earnings at the average exchange rate at the date of generation.

d. Exchange differences arising in the conversion of financial statements are recognized in the item “Exchange differences on translation” within the consolidated statement of comprehensive income: Other comprehensive income (see Note 22.2).

F-28

4. Translation adjustments that existed at Endesa Chile’s transition date to IFRS, on January 1, 2004, were transferred to reserves, using the exemption for that purpose in IFRS 1 “First time Adoption of IFRS” (see Note 22.5l).

5. Balances and transactions between consolidated companies were completely eliminated in the consolidation process.

6. Changes in interests in subsidiaries that do not result in taking or losing control are recorded as equity transactions, and the book value of the controlling and non-controlling interests is adjusted to reflect the change in relative interest in the subsidiary. Any difference that may exist, between the value for which a non-controlling interest is adjusted and the fair value of a compensation paid or received, is recognized directly in Equity attributable to the shareholders of Endesa Chile.

7. Business combinations under common control are recorded using, as a reference, the ‘pooling interest’ method. Under this method, the assets and liabilities involved in the transaction remain reflected at the same book value at which they were recorded in the ultimate controlling company, although subsequent accounting adjustments may need to be made to align the accounting policies of the companies involved.

Any difference between the assets and liabilities contributed to the consolidation and the compensation given is recorded directly in Net equity as a debit or credit to Other reserves. The Group does not apply retrospective accounting records of business combinations under common control.

F-29

3. ACCOUNTING CRITERIA APPLIED

The main accounting policies used in preparing the accompanying consolidated financial statements were the following:

a) Property, plant, and equipment

Property, plant, and equipment are valued at acquisition cost, net of accumulated depreciation and any impairment losses they may have experienced. In addition to the price paid to acquire each item, the cost also includes, where applicable, the following concepts:

- Financing expenses accrued during the construction period that are directly attributable to the acquisition, construction, or production of qualified assets, which require a substantial period of time before being ready for use such as, for example, electricity generation facilities. The Group defines “substantial period” as one that exceeds 12 months. The interest rate used is that of the specific financing or, if none exists, the mean financing rate of the company carrying out the investment. The mean financing rate depends principally on the geographic area and ranges between 7.22% and 7.5%. The amount capitalized for this concept amounted to ThCh$24,518,935, ThCh$23,915,042, and ThCh$29,922,494 during the years ended December 31, 2013, 2012, and 2011, respectively (see Note 29).

- Employee expenses directly related to construction in progress. The amounts capitalized under this concept for the periods ended December 31, 2013, 2012, and 2011, respectively, were ThCh$18,981,922, ThCh$12,763,186, and ThCh$10,597,856.

- Future disbursements that Endesa Chile will have to make to close their facilities are incorporated into the value of the asset at present value, recording in the accounting the corresponding provision for dismantling or restoration. Endesa Chile reviews its estimate of these future disbursements on a yearly basis, increasing or decreasing the value of the asset based on the results of this estimate (see Note 20).

- Items acquired before the Endesa Chile’s date of transition to IFRS, on January 1, 2004, include in the purchasing cost, where appropriate, asset reappraisals permitted in the various countries to adjust the value of the Property, plant, and equipment for inflation as of that date (see Note 22.5l).

Items for construction work in progress are transferred to operating assets once the testing period has been completed and they are available for use, at which time depreciation begins.

Expansion, modernization, or improvement costs that represent an increase in productivity, capacity or efficiency, or a longer useful life are capitalized as increasing the cost basis for the corresponding assets.

The replacement or overhaul of entire components that increase the asset’s useful life, or its economic capacity, are recorded as an increase in value for the respective assets, derecognizing the replaced or overhauled components.

Expenses for periodic maintenance, conservation, and repair are recorded directly in income as an expense for the year in which they are incurred.

The Company, based on the outcome of impairment testing explained in Note 3.d, considers that the book value of assets does not exceed their net recoverable value.

Property, plant, and equipment, net of its residual value, is depreciated by distributing the cost of the different items that comprise it on a straight-line basis over its estimated useful life, which is the period during which the companies expect to use the assets. Useful life estimates and residual values are periodically reviewed and, if appropriate, adjusted prospectively.

F-30

The following are the main categories of Property, plant, and equipment with their respective estimated useful lives:

Categories of Property, plant, and equipment	Years of estimated useful life
Buildings	22 – 100
Plant and equipment	3 – 65
IT equipment	3 – 15
Fixtures and fittings	5 – 21
Motor vehicles	5 – 10
Other	2 – 33

Additionally, the following provides greater detail on the useful lives of plant and equipment items:

	Years of estimated useful life
Generating facilities:
Hydroelectric plants
Civil engineering works	35-65
Electromechanical equipment	10-40
Coal-fired /fuel-oil power plants	25-40
Combined cycle plants	10-25
Renewable energy power plants	35
Transmission and distribution facilities:
High-voltage network	10-60
Low- and medium-voltage network	10-60
Measuring and remote control equipment	3-50
Other facilities	4-25

Land is not depreciated since it has an indefinite useful life.

Regarding the administrative concessions held by the Group’s electric companies, the following lists the periods remaining until expiration for the concession that does not have an indefinite term:

Company	Country	Concession     term	Period remaining to     expiration
Hidroeléctrica El Chocón S.A. (Generation)	Argentina	30 years	10 years

Endesa Chile’s management evaluated the specific contract terms of the aforementioned concession and concluded that, there are no determining factors indicating that the grantor, a government entity, controls the infrastructure and, at the same time, can continuously set the price to be charged for services. These requirements are essential for applying IFRIC 12 “Service Concession Agreements,” an interpretation that establishes how to record and value certain types of concessions (see Note 3.c.1 for concession agreements within the scope of IFRIC 12).

Concession contracts not covered under IFRIC 12 are recognized according to general criteria. To the extent that the Group recognizes assets as Property, plant, and equipment, they are amortized over their economic life or the concession term, whichever is shorter. Any required investment, improvement, or replacement made by the Group is calculated as an impairment to Property, plant, and equipment as a future contractual cash outflow that is necessary to obtain future cash inflow.

F-31

Gains or losses that arise from the sale or disposal of items of Property, plant, and equipment are recognized as Other gains (losses) in the comprehensive income statement and are calculated by deducting the net book value of the asset and any sales expenses from the amount received in the sale.

b) Goodwill

Goodwill generated on consolidated acquired business represents the difference between the acquisition cost and the Group’s share of the fair value of assets and liabilities, including identifiable contingent liabilities and the non-controlling stake in a subsidiary at the acquisition date.

Assets acquired and liabilities assumed are temporarily valued as of the date the company takes control and are reviewed within no more than a year after the acquisition date. Until the fair value of assets and liabilities is ultimately determined, the difference between the acquisition price and the book value of the acquired company is temporarily recorded as goodwill.

If goodwill is finally determined as existing in the financial statements the year following the acquisition, the prior year’s accounts, which are presented for comparison purposes, are modified to include the value of the assets acquired and liabilities assumed and of the definitive goodwill from the acquisition date.

Goodwill generated from acquiring companies with functional currencies other than the Chilean peso is valued in the functional currency of the acquired company and converted to Chilean pesos using the exchange rate in effect as of the date of the statement of financial position.

Goodwill generated before the date of transition to IFRS, on January 1, 2004, is maintained at its net value recorded as of that date, while goodwill originated afterwards is valued at acquisition cost (see Notes 13 and 22.5.l).

Goodwill is not amortized; instead, at each period end the Company estimates whether any impairment has reduced its recoverable value to an amount less than the net recorded cost and, if so, it immediately adjusts for impairment (see Note 3.d).

c) Intangible assets other than goodwill

Intangible assets are initially recognized at their acquisition cost or production cost, and are subsequently valued at their cost, net of their accumulated amortization and of the impairment losses they may have experienced.

Intangible assets are amortized on a straight line basis during their useful life, starting from the time that they are in usable condition, except for those with an indefinite useful life, which are not amortized. As of December 31, 2013, December 31, 2012, and January 1, 2012, there were no significant amounts in intangible assets with an indefinite useful life.

The criteria for recognizing these assets’ impairment losses and, if applicable, recovery of impairment losses recorded in previous fiscal years are explained in letter d) of this Note.

c.1) Concessions

Public-to-private service concession agreements are recorded according to IFRIC 12, “Service Concession Agreements.” This accounting interpretation applies if:

a) The grantor controls or regulates which services the operator should provide with the infrastructure, to whom it must provide them, and at what price; and

b) The grantor controls – through ownership, beneficial entitlement, or otherwise – any significant residual interest in the infrastructure at the end of the term of the agreement.

F-32

If both of the above conditions are met simultaneously, an intangible asset is recognized to the extent that the operator receives the right to charge users of the public service, provided that these charges are conditional on the degree to which the service is used.

These intangible assets are initially recognized at cost, which is understood as the fair value of the service provided plus other direct costs directly attributable to the operation. They are then amortized over the term of the concession.

The Group operates administrative concession in which its counterpart is a government entity; the El Melón Tunnel concession is the only one that has determining factors leading to the conclusion that the requirements explained above have been met simultaneously.

In the concession for the El Melón Tunnel, the Chilean Ministry of Public Works (the MOP, its Spanish acronym) and our subsidiary Sociedad Concesionaria Túnel El Melón S.A. signed a concession agreement establishing the services to be provided by the operator and the prices of these services. The right to the concession expires in June of 2016, at which time the MOP recovers the right to exploit the El Melón Tunnel assets without having to fulfill any specific condition.

The Group has applied the intangibles method established in IFRIC 12. Since the agreement signed with the MOP does not provide for guaranteed revenues regardless of the circumstances, no financial assets have been recognized in connection with Túnel El Melón concession.

The following Endesa Chile subsidiary has recognized an intangible asset from its service concession agreements:

Concession Holder	Country	Term	Period     Expiration
Soc. Concesionaria Túnel el Melón S.A. (Highway infrastructure)	Chile	23 years	2.5 years

c.2) Research and development expenses

Endesa Chile follows the policy of recording the costs incurred in a project’s development phase as intangible assets in the statement of financial position as long as the project’s technical viability and economic returns are reasonably assured.

Expenditures on research activities are recognized as an expense in the period in which they are incurred. These expenses amounted to ThCh$1,996,818, ThCh$2,298,344, and ThCh$2,104,631, at December 31, 2013, 2012, and 2011, respectively.

c.3) Other intangible assets

These intangible assets correspond primarily to computer software, easements and water rights. They are initially recognized at acquisition or production cost and are subsequently measured at cost less accumulated amortization and impairment losses, if any.

Computer software programs are amortized, on average, over five years. Certain easements and water rights have indefinite useful lives and are therefore not amortized, while others have useful lives ranging from 40 to 60 years, depending on their characteristics, and they are amortized over that term.

F-33

d) Asset impairment

d.1) Non-financial assets (except inventory and deferred tax assets)

During the year, and principally at year-end, the Company evaluates whether there is any indication that an asset has been impaired. Should any such indication exist, the company estimates the recoverable amount of that asset to determine the amount of impairment in each case. In the case of identifiable assets that do not generate cash flows independently, the company estimates the recoverability of the Cash Generating Unit (CGU) to which the asset belongs, which is understood to be the smallest identifiable group of assets that generates independent cash inflows.

Notwithstanding the preceding paragraph, in the case of Cash Generating Units to which goodwill or intangible assets with an indefinite useful life have been allocated, a recoverability analysis is performed routinely at each period end.

The recoverable amount is the greater amount between the fair value less the cost needed to sell and the value in use, which is defined as the present value of the estimated future cash flows. In order to calculate the recoverable value of Property, plant, and equipment, as well as of goodwill, and intangible assets, the Group uses value in use criteria in practically all cases.

To estimate the value in use, the Group prepares future cash flow projections, before tax, based on the most recent budgets available. These budgets incorporate management’s best estimates of Cash Generating Units’ revenue and costs using sector projections, past experience, and future expectations.

In general, these projections cover the next ten years, estimating cash flows for subsequent years by applying reasonable growth rates which, in no case, are increasing nor exceed the average long-term growth rates for the particular sector and country. At the end of 2013, 2012, and 2011, projections were extrapolated from the following rates:

		2013	2012	2011
Country	Currency	g Rate	g Rate	g Rate
Chile	Chilean peso	2.2% - 4.1%	2.3% - 4.1%	4.2%
Argentina	Argentine peso	8.6%	8.6%	7.0%
Brazil	Brazilian real	5.1% - 6.1%	5.1% - 6.1%	5.0% - 6.0%
Peru	Peruvian nuevo sol	3.6%	3.7%	3.2%
Colombia	Colombian peso	4.3%	4.3%	4.4%

These flows are discounted to calculate their current value at a before-tax rate that covers the cost of capital for the business activity and the geographic area in which it is being carried out. The current cost of money and the risk premiums generally used among analysts for the business activity and the geographic zone are taken into account to calculate this value.

The following are the before-tax discount rates applied in 2013, 2012, and 2011, expressed in nominal terms:

		2013		2012		2011
Country	Currency	Minimum	Maximum	Minimum	Maximum	Minimum	Maximum
Chile	Chilean peso	8.6%	16.3%	8.4%	14.6%	9.2%	10.1%
Argentina	Argentine peso	42.0%	44.4%	26.0%	29.0%	23.0%	26.0%
Brazil	Brazilian real	9.0%	18.8%	9.5%	18.0%	9.5%	11.6%
Peru	Peruvian nuevo sol	11.8%	12.3%	12.5%		9.3%
Colombia	Colombian peso	14.2%		14.5%		10.9%

F-34

If the recoverable amount of the CGU is less than the net carrying amount of the asset, the corresponding provision for impairment loss is recorded for the difference, and charged to “Reversal of impairment loss (impairment loss) recognized in profit or loss” in the consolidated statement of comprehensive income. The provision is first allocated to the CGU’s goodwill value, if any, and then to the other assets comprising it, prorated according to the carrying value of each one, limited to its fair value less sales costs, or its value in use; a negative value may not be obtained.

Impairment losses recognized for an asset in prior periods are reversed when its estimated recoverable amount changes, increasing the asset’s value with a credit to earnings, limited to the asset’s carrying amount if no adjustment had occurred. In the case of goodwill, adjustments that would have been made are not reversible.

d.2) Financial assets

The following procedure is used to determine the need to adjust financial assets for impairment:

- In the case of commercial assets, provisions are made for the balances for which there is objective evidence that Endesa Chile will not be able to recover all of the amounts provided for in the original terms and conditions of the contracts. In general, the Group’s policy is to record impairment through an allowance account based on the age of past-due balances, except in those cases where a specific collectability analysis is recommended, such as in the case of receivables from publically-owned companies (see Note 7).

- In the case of receivables of a financial nature, impairment is determined on case-by-case basis. As of the date of issuance of these consolidated financial statements, the Company had no significant past-due non-commercial financial assets (see Notes 6 and 18).

e) Leases

Leases that substantially transfer all of the risks and benefits inherent to the property are classified as finance leases. All others are classified as operating leases.

Finance leases in which the Endesa Chile acts as a lessee are recognized when the agreement begins. At that time, the Group records an asset based on the nature of the lease and a liability for the same amount, equal to the fair value of the leased asset or the present value of the minimum lease payments, if the latter is lower. Subsequently, the minimum lease payments are divided between finance expense and principal reduction. The finance expense is recorded in the income statement and distributed over the lease term, so as to obtain a constant interest rate for each period over the balance of the debt pending amortization. The asset depreciates on the same terms as other similar depreciable assets, as long as there is reasonable certainty that the lessee will acquire ownership of the asset at the end of the lease. If no such certainty exists, the asset depreciates over the shorter term between the useful life of the asset and the term of the lease.

Operating lease payments are expensed on a straight-line basis over the term of the lease unless another type of systematic basis of distribution is deemed more representative.

f) Financial instruments

Financial instruments are contracts that give rise to both a financial asset in one company and a financial liability or equity instrument in another company.

F-35

f.1)  Financial assets other than derivatives

Endesa Chile classifies its financial assets other than derivatives, whether permanent or temporary, except for investments accounted for using the equity method (see Note 11) and those held for sale, into four categories:

- Trade and other accounts receivable and Accounts receivable from related companies: These are recorded at amortized cost, which is the initial fair value less principal repayments made, plus accrued and uncharged interest, calculated using the effective interest method.

The effective interest method is used to calculate the amortized cost of a financial asset or liability (or group of financial assets or financial liabilities) and is charged to finance income or cost over the relevant period. The effective interest rate is the discount rate that exactly matches the estimated cash flows to be received or paid over the expected life of the financial instrument (or, when appropriate, over a shorter period) to the net carrying amount of the financial asset or financial liability.

- Held-to-maturity investments: Investments that Endesa Chile intends to hold and is capable of holding until their maturity is accounted for at amortized cost as defined in the preceding paragraph.

- Financial assets at fair value with changes in net income: This includes the trading portfolio and those financial assets that have been designated as such upon initial recognition and that are managed and evaluated using fair value criteria. They are valued in the consolidated statement of financial position at fair value, with changes in value recorded directly in income when they occur.

- Available-for-sale financial assets: These are financial assets specifically designated as available for sale or that do not fit within any of the three preceding categories. They are almost all financial investments in equity instruments (see Note 6).

These investments are recorded in the consolidated statement of financial position at fair value when it can be reliably determined. For interests in unlisted companies or companies with very little liquidity, normally the fair value cannot be reliably determined. When this occurs, those interests are valued at acquisition cost or a lesser amount if evidence of impairment exists.

Changes in fair value, net of tax, are recorded in the consolidated statement of comprehensive income: Other comprehensive results, until the investments are disposed of, at which time the amount accumulated in this account for that investment is fully charged to the period’s profit or loss.

Should the fair value be less than the acquisition cost, and if there is objective evidence that the asset has been more than temporarily impaired, the difference is recorded directly in the period’s losses.

Purchases and sales of financial assets are accounted for using their trade date.

f.2)  Cash and cash equivalents

This account within the statement of consolidated financial position includes cash and bank balances, time deposits, and other highly liquid investments (with a maturity of 90 days or less from the time of investment) that are readily convertible to cash and are subject to insignificant risk of changes in value.

f.3)  Financial liabilities other than derivatives

Financial liabilities are generally recorded based on cash received, net of any costs incurred in the transaction. In subsequent periods, these obligations are valued at their amortized cost, using the effective interest rate method (see Note 3.f.1).

In the particular case that a liability is the underlying item of a fair value hedge derivative, as an exception, such liability will be valued at its fair value for the portion of the hedged risk.

F-36

In order to calculate the fair value of debt, both in the cases when it is recorded in the statement of financial position and for fair value disclosure purposes as seen in Note 16, debt has been divided into fixed interest rate debt (hereinafter “fixed-rate debt”) and variable interest rate debt (hereinafter “floating-rate debt”). Fixed-rate debt is that on which fixed-interest coupons established at the beginning of the transaction are paid explicitly or implicitly over its term. Floating-rate debt is that issued at a variable interest rate, i.e., each coupon is established at the beginning of each period based on the reference interest rate. All debt has been valued by discounting expected future cash flows with a market-interest rate curve based on the payment’s currency.

f.4)  Derivative financial instruments and hedge accounting

Derivatives held by Endesa Chile are primarily transactions entered into to hedge interest and/or exchange rate risk, intended to eliminate or significantly reduce these risks in the underlying transactions being hedged.

Derivatives are recorded at fair value as of the date of the statement of financial position as follows: if their fair value is positive, they are recorded within “Other financial assets”; and if their fair value is negative, they are recorded within “Other financial liabilities.” For derivatives on commodities, the positive value is recorded in “Trade and other current receivables,” and negative values are recorded in “Trade and other current liabilities.”

Changes in fair value are recorded directly in income except when the derivative has been designated for accounting purposes as a hedge instrument and all of the conditions established under IFRS for applying hedge accounting are met, including that the hedge be highly effective. In this case, changes are recorded as follows:

- Fair value hedges: The underlying portion for which the risk is being hedged is valued at its fair value, as is the hedge instrument, and any changes in the value of both are recorded in the comprehensive income statement by netting the effects in the same comprehensive income statement account.

- Cash flow hedges: Changes in the fair value of the effective portion of derivatives are recorded in an equity reserve known as “Reserve for cash flow hedges.” The cumulative loss or gain in this account is transferred to the comprehensive income statement to the extent that the underlying item impacts the comprehensive income statement because of the hedged risk, netting the effect in the same comprehensive income statement account. Gains or losses from the ineffective portion of the hedge are recorded directly in the comprehensive income statement.

A hedge is considered highly effective when changes in the fair value or in the cash flows of the underlying item directly attributable to the hedged risk are offset by changes in the fair value or the cash flows of the hedging instrument, with effectiveness ranging from 80% to 125%.

The Company does not apply hedge accounting to its investments abroad.

As a general rule, long-term commodity purchase or sale agreements are recorded in the consolidated statement of financial position at their fair value as of period end, recording any differences in value directly in income, except when all of the following conditions are met:

- The sole purpose of the agreement is for the Group’s own use.

- Endesa Chile’s future projections justify the existence of these agreements for its own use.

- Past experience with agreements shows that they have been utilized for the Group’s own use, except in certain isolated cases when they had to be used for exceptional reasons or reasons associated with logistical issues beyond the control and projection of Endesa Chile.

- The agreement does not stipulate settlement by differences and the parties have not made it a practice to settle similar contracts by differences in the past.

F-37

The long-term commodity purchase or sale agreements maintained by Endesa Chile, which are mainly for electricity, fuel, and other supplies, meet the conditions described above. Thus, the purpose of fuel purchase agreements is to use them to generate electricity, the electricity purchase contracts are used to make sales to end-customers, and the electricity sale contracts are used to sell the company’s own product.

The Company also evaluates the existence of derivatives embedded in contracts or financial instruments to determine if their characteristics and risk are closely related to the principal contract, provided that when taken together they are not being accounted for at fair value. If they are not closely related, they are recorded separately and changes in value are accounted for directly in the comprehensive income statement.

f.5)  Fair value measurement and classification of financial instruments

The fair value of the various derivative financial instruments is calculated as follows:

- For derivatives traded on an active market, by its quoted price as of year-end.

- Endesa Chile values derivatives not traded on active markets by using the discounted cash flow method and generally accepted options valuation models, based on current and future market conditions as of year-end.

Based on the hierarchy of the inputs used these procedures, the Group classifies financial instruments at the following levels:

Level 1:	Quoted price (unadjusted) in active markets for identical assets or liabilities;
Level 2:	Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The methods and hypotheses used to determine the fair values at level 2 by type of financial assets or financial liabilities take into consideration estimated future cash flows discounted with the zero coupon interest rate curves for each currency. All of these valuations are carried out using external tools, such as Bloomberg; and
Level 3:	Inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

f.6)  Derecognition of financial assets and liabilities

Financial assets are derecognized when:

- The contractual rights to receive cash flows related to the financial asset expire or have been transferred or, if the contractual rights are retained, the Group has assumed a contractual obligation to pay these cash flows to one or more receivers.

- The Company has substantially transferred the risks and rewards of ownership of the financial asset, or, if it has neither transferred nor retained substantially all the risks and rewards, when it does not retain control over the asset.

Transactions in which the Group retains substantially all the inherent risks and rewards of ownership of the transferred asset, it continues recognizing the transferred asset in its entirety and recognizes a financial liability for the consideration received. Transactions costs are recognized in profit and loss by using the effective interest method (see Note 3.f.1).

Financial liabilities are derecognized when they are extinguished, that is, when the obligation arising from the liability has been paid or cancelled, or has expired.

F-38

g) Investments accounted for using the equity method

The Group’s interests in joint ventures and associates are recorded using the equity method.

Under the equity method, an investment in an associate or joint venture is initially recorded at cost. As of the acquisition date, the investment is recorded in the statement of financial position based on the share of its equity that Endesa Chile’s stake represents in its capital, adjusted for, if appropriate, the effect of transactions with subsidiaries plus any goodwill generated in acquiring the company. If the resulting amount is negative, zero is recorded for that investment in the statement of financial position, unless Endesa Chile has a present obligation (either legal or implicit) to support the company’s negative equity situation, in which case a provision is recorded.

Dividends received from these companies are deducted from the value of the investment, and any profit or loss obtained from them to which Endesa Chile is entitled based on its stake is recorded under “Share of profit (loss) of associates accounted for using equity method.”

Goodwill from the associate or joint venture is included in the book value of the investment. It is not amortized, nor is it subject to individual impairment testing.

Appendix No. 3, “Associated Companies and Joint Ventures,” included in these consolidated financial statements, provides information about the relationship of Endesa Chile with each of these entities.

h) Inventories

Inventories are valued at their weighted average acquisition price or the net realizable value, whichever is lower.

i) Treasury shares

Treasury shares are deducted from equity in the consolidated statement of financial position and valued at acquisition cost.

The gains and losses from the disposal of treasury shares are recorded directly in “Equity – Retained earnings”, without affecting the profit or loss for the fiscal year. As of December 31, 2013, there are no treasury shares, and no transactions with treasury shares were made during the 2013, 2012, or 2011 fiscal years.

j) Provisions

Obligations existing as of the date of the consolidated financial statements resulting from past events which may negatively impact Endesa Chile’s equity, and whose amount and timing of payment are uncertain, are recorded as provisions in the consolidated statement of financial position at the present value of the most likely amount that it is believed that Endesa Chile will have to disburse to settle the obligation.

Provisions are quantified using the best information available as of the date of issuance of the consolidated financial statements regarding the consequences of the event causing the provision and are re-estimated at each subsequent accounting close.

j.1)  Provisions for post-employment benefits and similar obligations

Endesa Chile and some of its subsidiaries have pension and similar obligations to their employees. Such obligations, which combine defined benefits and defined contributions, are basically formalized through pension plans, except for certain non-monetary benefits, mainly electricity supply commitments, which, due to their nature, have not been externalized and are covered by the related in-house provisions.

F-39

For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period. Past service costs relating to changes in benefits are recognized immediately.

The defined benefit plan obligations in the statement of financial position represent the present value of the accrued obligations, adjusted, once the fair value of the different plans’ assets has been deducted, if applicable.

Actuarial gains and losses arising in the measurement of both the plan liabilities and the plan assets are recognized in Other Comprehensive Income and then reclassified under “Equity - Retained earnings.”

Contributions to defined contribution benefit plans are recognized as an expense in the consolidated statement of comprehensive income when the employees have rendered their services.

k) Conversion of balances in foreign currency

Transactions carried out by each company in a currency other than its functional currency are recorded using the exchange rates in effect as of the date of each transaction. During the year, any differences that arise between the exchange rate recorded in accounting and the rate prevailing as of the date of collection or payment are recorded as “Foreign currency exchange differences” in the consolidated statements of comprehensive income.

Likewise, at the end of each fiscal year, balances receivable or payable in a currency other than each company’s functional currency are converted using the period-end exchange rate. Any valuation differences are recorded as “Foreign currency exchange differences” in the consolidated statements of comprehensive income.

Endesa Chile has established a policy to hedge the portion of revenue that is directly linked to variations in the US dollar by obtaining financing in this currency. Exchange differences related to this debt, as they are cash flow hedge transactions, are charged, net of taxes, to a reserve account in equity and recorded in income during the period in which the hedged cash flows are realized. This term has been estimated at ten years.

l) Current/non-current classification

In these consolidated statements of financial position, assets and liabilities expected to be recovered or settled within twelve months are presented as current items, except for post-employment and other similar obligations, and those assets and liabilities expected to be recovered or settled in more than twelve months are presented as non-current items.

Should the Company have any obligations that mature in less than twelve months but can be refinanced over the long term at the Company’s discretion, through unconditionally available credit agreements with long-term maturities, such obligations could be classified as long-term liabilities.

m) Income tax

Income tax expense for the fiscal year is determined as the sum of current taxes from Endesa Chile’s different subsidiaries and results from applying the tax rate to the taxable base for the year, after allowable deductions have been made, plus any changes in deferred tax assets and liabilities and tax credits, both for tax losses and deductions. Differences between the book value and tax basis of assets and liabilities generate deferred tax asset and liability balances, which are calculated using tax rates expected to be in effect when the assets and liabilities are realized or settled. Considered for this purpose are rates that have been approved by the end of the period reported on, or whose approval process is practically complete.

Current taxes and changes in deferred tax assets and liabilities not arising from business combinations are recorded in income or in equity in the statement of financial position, based on where the gains or losses originating them were recorded.

F-40

Deferred tax assets and tax credits are recognized only when it is likely that future tax gains will be sufficient to recover deductions for temporary differences and make use of tax credits.

Deferred tax liabilities are recognized for all temporary differences, except those derived from the initial recognition of goodwill and those that arose from valuing investments in subsidiaries, associates and joint ventures in which Endesa Chile can control their reversal and where it is likely that they will not be reversed in the foreseeable future.

Any deductions that can be applied to current tax liabilities are credited to earnings within the line item “Income tax expenses”, except when doubts exist about their tax realization, in which case they are not recognized until they are effectively realized, or when they correspond to specific tax incentives, in which case they are recorded as grants.

At each accounting period close, the Company reviews the deferred taxes it has recorded, both assets and liabilities, in order to ensure they remain current and otherwise make any necessary corrections based on the results of this analysis.

n) Revenue and expense recognition

Revenues and expenses are recognized on an accrual basis.

Revenue is recognized when the gross inflow of economic benefits arising in the course of the Endesa Chile’s ordinary activities in the period occurs, provided that this inflow of economic benefits results in an increase in total equity that is not related to contributions from equity participants and that these benefits can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable that gives rise to the revenue.

Revenue associated with the rendering of services is only recognized if it can be estimated reliably, based on the stage of completion of the service rendered at the date of the statement of financial position.

Endesa Chile excludes from the revenue figure gross inflows of economic benefits it receives when it acts as an agent or commission agent on behalf of third parties, and only recognizes as revenue economic benefits received for its own account.

When goods or services are exchanged or swapped for goods or services of a similar nature and value, the exchange is not regarded as a revenue-generating transaction.

Endesa Chile records the net amount of non-financial asset purchase or sale contracts settled for the net amount of cash or through some other financial instruments. Contracts entered into and maintained for the purpose of receiving or delivering these non-financial assets are recognized on the basis of the contractual terms of the purchase, sale, or usage requirements expected by the entity.

Interest income (expense) is recognized at the effective interest rate applicable to the outstanding principal over the repayment period.

The Company’s primary line of business is in the electricity generation segment, and a minor percentage of its revenues comes from other activities related to this main line of business.

o) Earnings per share

Basic earnings per share are calculated by dividing net income attributable to shareholders of the Parent Company (the numerator) by the weighted average number of ordinary shares in circulation during the period (the denominator), excluding the average number of shares of the Parent Company held by any subsidiary company, if any.

F-41

During the 2013, 2012, and 2011 fiscal years, the Group did not engage in any transaction of any kind with potential dilutive effects leading to diluted earnings per share that could differ from basic earnings per share.

p) Dividends

Article 79 of the Chilean Companies Act establishes that, unless unanimously agreed otherwise by the shareholders of all issued shares, listed corporations must distribute a cash dividend to shareholders on a yearly basis, prorated by the shares owned or the proportion established in the company’s by-laws if there are preferred shares, of at least 30% of net income for each period, except when accumulated losses from prior years must be absorbed.

As it is practically impossible to achieve a unanimous agreement given Endesa Chile’s highly fragmented share capital, as of the end of each year the amount of the dividend obligation to its shareholders is determined, net of interim dividends approved during the fiscal year, and then accounted for in “Trade and other current payables” and “Accounts payable to related companies,” as appropriate, and charged to Equity.

Interim and final dividends are deducted from Equity as soon as they are approved by the competent body, which in the first case is normally the Company’s Board of Directors and in the second case is the Ordinary Shareholders’ Meeting.

q) Cash flow statement

The cash flow statement reflects changes in cash that took place during the period, determined with the direct method. It uses the following expressions and corresponding meanings:

- Cash flow: inflows and outflows of cash or cash equivalents, which are defined as highly liquid investments maturing in less than three months with a low risk of changes in value.

- Operating activities: the principal revenue-producing activities of the Group and other activities that cannot be considered investing or financing activities.

- Investment activities: the acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents.

- Financing activities: activities that result in changes in the size and composition of the total equity and borrowings of the Group.

F-42

4. SECTOR REGULATIONS AND ELECTRICITY SYSTEM OPERATIONS

a) Chile

In Chile, the electricity sector is regulated by the General Law of Electrical Services (Chilean Electricity Law), also known as DFL No. 1 of 1982, of the Ministry of Mining—whose compiled and coordinated text was established in DFL No. 4 issued in 2006 by the Ministry of Economy (the Electricity Law)—as well as by an associated Regulation (D.S. No. 327 issued in 1998). Three government bodies are primarily responsible for enforcing this law: the National Energy Commission (CNE), which has the authority to propose regulated tariffs (node prices) and to draw up indicative plans for the construction of new generating units; the Superintendency of Electricity and Fuels (SEF), which supervises and oversees compliance with the laws, regulations, and technical standards that govern the generation, transmission, and distribution of electricity, as well as liquid fuels, and gas; and, finally, the recently created Ministry of Energy, which is responsible for proposing and guiding public policies on energy matters. It also oversees the SEF, the CNE, and the Chilean Commission for Nuclear Energy (ChCNE), thus strengthening coordination and allowing for an integrated view of the energy sector. The Ministry of Energy also includes the Agency for Energy Efficiency and the Center for Renewable Energy. The Chilean Electricity Law has also established a Panel of Experts whose main task is to resolve potential discrepancies among the players in the electricity market, including electricity companies, system operators, regulators, etc.

From a physical view point, the Chilean electrical sector is divided into four electrical grids: the Sistema Interconectado Central (SIC), the Sistema Interconectado del Norte Grande (SING), and two separate medium-size grids located in southern Chile, one in Aysén and the other in Magallanes. The SIC, the main electrical grid, runs 2,400 km longitudinally and connects the country from Taltal in the north to Quellon, on the island of Chiloe in the south. The SING covers the northern part of the country, from Arica down to Coloso, covering a length of some 700 km.

The electricity industry is organized into three business segments: generation, transmission, and distribution, all operating in an interconnected and coordinated manner, and whose main purpose is to supply electrical energy to the market at minimum cost while maintaining the quality and safety service standards required by the electrical regulations. As essential services, the power transmission and distribution businesses are natural monopolies; these segments are regulated as such by the electricity law, which requires free access to networks and regulates rates.

Under the Chilean Electricity Law, companies engaged in generation and transmission on an interconnected electrical grid must coordinate their operations through a centralizing operating agent, the Centro de Despacho Económico de Carga (CDEC), in order to operate the system at minimum cost while maintaining reliable service. For this reason, the CDEC plans and operates the system, including the calculation of the so-called “marginal cost,” which is the price assigned to CDEC-organized energy transfers occurring among power generating companies.

Therefore, a company’s decision to generate electricity is subject to the CDEC’s operation plan. On the other hand, each company is free to decide whether to sell its energy to regulated or unregulated customers. Any surplus or deficit between a company’s sales to its customers and its energy supply is sold to, or purchased from, other generators at the spot market price.

A power generating company may have the following types of customers:

(i) Distribution companies that supply power to regulated customers: This distribution is to residential and commercial consumers and small and medium-size businesses with a connected capacity equal to or less than 500 kW located in the concession area of a distribution company. Customers that consume from 500 kW to 2000 kW may choose to be regulated or unregulated clients. Until 2009, the transfer prices between generators and distribution companies for supplying power to regulated customers were capped at a maximum value called the node price, which is regulated by the Ministry of Energy. Node prices are set every six months, in April and October, based on a report prepared by the CNE that takes into account projections of expected marginal costs in the system over the next 48 months for the SIC and 24 months for the SING. Beginning in 2010, and as the node price contracts begin to expire, the transfer prices between generators and distributors is being replaced by the results of regulated bidding processes, with a price cap set by the authority every six months.

F-43

(ii) Unregulated customers: Those customers, mainly industrial and mining companies, with a connected capacity of over 2,000 kW. These consumers can freely negotiate prices for electrical supply with generators and/or distributors. Customers with capacity between 500 and 2,000 kW, as indicated in the preceding paragraph, have the option to contract energy at prices agreed upon with their suppliers or be subject to regulated prices, with a minimum stay of at least four years under each pricing system.

(iii) Spot market: This represents energy and capacity transactions among generating companies that result from the CDEC’s coordination to keep the system running as economically as possible, where the surpluses (deficits) between a generator’s energy supply and the energy it needs to comply with business commitments are transferred through sales (purchases) to (from) other generators in the CDEC. In the case of energy, transfers are valued at the marginal cost, while node prices for capacity are set every semester by the regulators.

In Chile, the capacity that must be paid to each generator depends on an annual calculation performed by the CDEC to determine the firm capacity of each power plant, which is not the same as the dispatched capacity.

Beginning in 2010 with the enactment of Law 20,018, distribution companies must have enough supply permanently available to cover their entire demand projected for a period of three years; to do so, they must carry out long-term public bidding processes.

Regarding renewable energy, in April of 2008 Law 20,257 was enacted, which encourages the use of Non-Conventional Renewable Energies (NCRE). The principal aspect of this law is that at least 5% of generation companies’ energy sold to its customers must come from renewable sources between years 2010 and 2014. This requirement progressively increases by 0.5% from year 2015 until 2024, when a 10% renewable energy requirement will be reached. This law was recently amended by Law 20,698, published in the Official Gazette (Diario Oficial) on October 22, 2013 and dubbed the “20/25 law,” as it establishes that by 2025, 20% of power supplied will be generated by NCRE. It does not change plan from the previous law for supplying power under agreements in effect in July 2013.

On December 31, 2012, the Regulations containing the provisions governing complementary services were published in the Official Gazette. These services are understood to be the technical resources in generation, transmission and distribution, and customer facilities that are not subject to price regulations and that each electrical system must have for the coordination of its operations as stipulated in Article 137 of the General Law on Electrical Services.

On August 7, 2013, the Superintendency of Electricity and Fuels (SEF), in ORD No. 7230, invoking its powers of interpretation and supervision, decreed that distribution companies’ consumption in excess of the supply they have contracted with generating companies that have agreed to supply their power through tenders, must be covered with the surplus power that other distributors have contracted through tenders with other generating companies. For this purpose, distribution companies with surpluses may transfer their excess power to distribution companies with deficits with no need to obtain the consent of the respective generator.

Law 20,701, the Electricity Concession Law, whose purpose is to streamline the process for obtaining power concessions, was published in the Official Gazette on October 14, 2013. This new law simplifies the process for obtaining temporary concessions, shortens processing times, identifies possible observations and opposition to projects, modifies the notification process, establishes summary judicial proceedings, makes it possible to divide concession applications, modifies the procedure for real estate appraisals, and resolves conflicts between different types of concessions.

On January 8, 2014, the Senate, unanimously on its third vote, passed the bill amending the General Electricity Services Law in order to permit interconnection of the central grid (the SIC) with the northern grid (the SING).

b) The rest of Latin America

Brazil, Colombia, and Peru

Legislation in Brazil, Colombia, and Peru allows participation of private capital in the electricity sector, upholds free competition between companies in electricity generation, and defines criteria to avoid certain levels of economic concentration and/or market practices that may cause a decline in free competition.

F-44

In regards to the main characteristics of the electricity generation business, it can be said that in general, these are open markets in which private players are free to make their own investment decisions, within government guidelines. The exception is Brazil, a country which, based on the contractual needs of the distribution companies, the Ministry of Energy actively participates in the expansion of the electricity system by, on the one hand, establishing capacity quotas by type of technology and, on the other, promoting separate bids for thermal, hydraulic, or renewable energies or participating directly by organizing public bids for specific projects. In addition, operations in these countries are centrally coordinated, with an independent operator coordinating load dispatch. Except for Colombia, where dispatch is based on prices offered by the players, in the other countries load dispatched is centralized, based on variable production costs in order to ensure the fulfillment of the demand at a minimum cost for the system. From that dispatch, the marginal cost, which defines the price for spot transactions, is determined. In Brazil, the price at which spot market transactions are settled is called the Difference Settlement Price (PLD, its Portuguese acronym), which takes into account the risk aversion curve of the players. As for Peru, its spot price fixing system does do not necessarily reflect system costs since it defines an idealized marginal cost which does not take into account the current restrictions of the gas and electricity transport system, and at the same time defines a ceiling price for the market. This was established in an emergency regulation in 2008 (Emergency Decree 049 of 2008) and is expected to remain in effect until 2015.

In Colombia, Brazil, and Peru, generation players are able to sell energy through contracts in the regulated or unregulated markets, and to trade their surplus/deficit on the spot market. The unregulated market is focused on the segment of large users, although the limits that define this status vary in each market: Brazil: 3,000 kW or 500 kW for renewable fuels; Colombia: 100 kW or 55 MWh per month; and Peru: at least 200 kW.

The principal differences among the markets involve how energy sales are regulated among generators and distributors and how regulated prices are established for the determination of the tariffs charged to end users:

— In Brazil, there are two markets for contracting energy. In the unregulated market, suppliers and their clients directly negotiate energy purchase conditions. In the regulated market, where distribution companies operate, energy purchases must go through a tender process coordinated by ANEEL, the National Electricity Agency. In this way, the regulated purchase price used in the determination of tariffs to end users is based on average prices of open bids, and there are separate bidding processes for existing and new energy. Bidding processes for new energy contemplate long-term generation contracts in which new generation projects must cover the growth of demand foreseen by distributors. The open bids for existing energy consider shorter contractual terms and seek to cover the distributors’ contractual needs arising from the expiry of prior contracts. Each bidding process is coordinated centrally. Authorities set maximum prices and, as a result, contracts are signed where all distributors participating in the process buy pro rata from each offering generator.

— In order to reduce the final price of electricity tariffs and to re-launch economic activity in Brazil, on September 11, 2012, the government approved Temporary Measure (Medida Provisoria) 579, which establishes the conditions for renewing the electricity industry’s concessions that expire between 2015 and 2017 and reduces the tax burden on electricity tariffs, which will now be covered with government funds. Law 12,783 converting the Temporary Measure and Development Decree 7891 was published in January of 2013. In compliance with the Law and the Decree, on January 25, 2013 the ANEEL approved an extraordinary tariff revision that reduced electricity rates by an average of 20% for regulated clients, due in part to lower energy costs as a result of renewed generation and transmission concessions and in part to a reduction in tariff charges.

— In Colombia, distributors are free to decide their supply, being able to define the conditions of public bidding processes where they acquire energy for the regulated market, and they are able to buy energy on the spot market. Prices paid by end users reflect an average of the purchase price. Since 2004, the CREG (the Colombian Energy and Gas Regulation Commission) has working on a proposal called the Regulated Organized Market or MOR, its acronym in Spanish, to modify the energy contracting system in the Colombian market. Under the proposal, the existing contracting system will be modified into an electronic contract system. This mechanism will replace the current bidding processes by energy auctions with standardized commercial conditions, where contractual demand will be treated as a single aggregate demand.

— In Peru, as in Chile, distributors are obligated to enter into contracts for their energy supply, and the legislation was amended so that public bids would be based on distributor requirements. Currently, there are only a few contracts between generators and distributors that are in force at “bar price” (the equivalent of the node price in Chile), which is set on the basis of centralized calculations. However, since 2007 contracts are based on public bids. Authorities approve the terms and conditions for the bidding and set the maximum price for each bid.

F-45

All of these countries have some regulations in force promoting the use of renewable energy. However, unlike Chile, they have not established a mandatory quota for incorporating this type of technology. In Brazil, the ANEEL holds auctions by technology type, taking into consideration the expansion plan set by the planning agency in order to reach the goal set for the level of alternative renewable energy capacity. Peru has a 5% maximum goal for the use of NCRE in the country’s energy system, and the regulatory authority, the Energy and Mining Investment Supervisory Agency (OSINERGIM), holds discriminatory auctions to meet this goal. Colombia currently has an indicative goal of 3.5% for the National Energy System in 2015 and 6.5% in 2020, but the plan is currently under review.

Argentina

Argentina has shown signs of intervention in the electricity market since the crisis of 2002. Under the previous regulations, generators sold to distributors at prices obtained from centralized calculations of the average spot market price. The distributers’ purchase price was the average price forecast for the next six months, called the Seasonal Price (Precio Estacional). Any differences between the Seasonal Price (the purchase price) and the actual spot price (the selling price) was charged to the Seasonal Fund (Fondo Estacional) managed by the Electricity Wholesale Market Administration Company (CAMMESA).

However, after the 2002 crisis, the authorities changed the price-setting criteria, bringing the marginal pricing system to an end. First, marginal prices were set as if there were no restrictions on natural gas. In effect, despite the fact that generation is dispatched on the basis of the fuels actually used, Resolution SE 240/2003 establishes that the marginal price is to be calculated taking into consideration all of the generation units as if there were no restrictions in effect on natural gas supplies. In addition, the expense of water is not included in the calculations if its opportunity cost is higher than the cost of generating power with natural gas. Second, it established a spot price ceiling of Ar$120/MWh. However, CAMMESA pays the actual variable costs of the liquid fuel-fired thermal plants through the Temporary Dispatch Cost Overruns program.

In addition, as the dollarized economy was devalued and went back to the peso, payment for capacity fell from US$10 to Ar$10 per MWh. Capacity payments have subsequently risen slightly, to 12 pesos.

Additionally, the freezing of prices paid by distributors caused a gap between actual generation costs and the payments made based on demand through the distributors. This resulted in various types of special agreements aimed at recovering costs, in accordance with regulations in force.

It was in this context that the government announced in 2012 its plan to modify the current regulatory framework and to develop in 2013 and 2014 a payment system based on an average cost scheme.

Resolution 95/13 was published in the Official Bulletin (Boletín Oficial) on March 26, 2013, significantly changing the system for generators’ remunerations and other aspects of how the Wholesale Electricity Market, or MEM, operates. This new system applies to previous generation, provided that past and future claims against Resolution SE 406/03 and the Generation Agreement of 2008-2011 are withdrawn.

On May 30 and 31, 2013, the Group’s generating companies (Endesa Costanera and Hidroeléctrica El Chocón) accepted the terms of Resolution SE 95/2013.

This resolution marked the end of marginal pricing as a payment system in the Argentine power generation market and established, instead, payment by type of technology and size of plant. For each case, it recognizes fixed costs (determined on the basis of fulfillment of availability) and variable costs, plus an additional remuneration (the two parts are determined on the basis of the energy generated). Part of the additional remuneration will be placed in a trust for future investments.

F-46

In principle, commercial management and fuel dispatch will be in the hands of CAMMESA; Terminal Market agreements cannot be extended or renewed, and large users, once their respective contracts are up, must purchase their supply from CAMMESA. However, the Secretary of Energy, in Note SE 1807/13, gives generators the opportunity to express their intention to continue handling collections for their entire contract portfolio, thus ensuring a certain amount of cash flow and a continuing relationship with the customer.

It is also important to mention that Endesa Costanera has availability contracts signed in 2012 that are still in effect, as well as combined cycle contracts (until 2015) and steam generation contracts (until 2019) that will enable the company to implement plan for investing in the Costanera plant generation units in order to optimize the reliability and availability of that plant. The contracts also include payment of the commitments under the Long-Term Service Agreement (LTSA) for the plant’s combined cycles.

Limits on integration and concentration

In general, all of the countries have legislation in effect that defends free competition and, together with specific regulations that apply to the electricity market, defines criteria to avoid certain levels of economic concentration and/or abusive market practices.

In principle, the regulators allow the participation of companies in different activities (e.g. generation, distribution, and commercialization) as long as there is an adequate separation of each activity, for both accounting and company purposes. Nevertheless, most of the restrictions imposed involve the transmission sector mainly due to its nature and to the need to guarantee adequate access to all agents. In Argentina and Colombia there are specific restrictions if generation or distribution companies want to become majority shareholders in transmission companies.

Regarding concentration in a specific sector, in Argentina, there are no specific limits that affect the vertical or horizontal integration of a company. In Chile, while there are regulations on free competition, there are no specific quantitative limits on vertical or horizontal integration. However, the General Law on Electrical Services provides that companies that operate on or have ownership in the Trunk Transmission Systems cannot engage in, either directly or indirectly, activities that are in any way involved in the business of power generation or distribution. In Peru, integrations are subject to authorization if such integration is 5% vertical and 15% horizontal. In Colombia, no company may have a direct or indirect market share of over 25% in electricity sale activities. In addition, Colombian companies created after 1994 can only engage in activities that complement generation/sales and distribution/sales. Finally, in Brazil, with the changes taking place in the power industry under Law 10,848/2004 and Decree 5,163/2004, the ANEEL gradually perfected regulations, eliminating concentration limits as no longer compatible with the prevailing regulatory environment.

With regard to consolidations and mergers between agents of the same segment, current regulation requires authorization from the local regulator.

F-47

5. CASH AND CASH EQUIVALENTS

a) The detail of cash and cash equivalents as of December 31, 2013, December 31, 2012, and January 1, 2012, is as follows:

Cash and Cash Equivalents			Balance at
	12-31-2013         ThCh$		12-31-2012         ThCh$		01-01-2012         ThCh$
Cash balances		170,449		143,980		567,410
Bank balances		92,937,397		192,200,604		160,278,488
Time deposits		201,986,590		41,286,491		42,979,532
Other fixed-income instruments		28,712,943		2,046,658		185,942,841
Total		323,807,379		235,677,733		389,768,271

Time deposits have a maturity of three months or less from their date of acquisition and accrue the market interest for this type of investments. Other fixed-income investments are mainly comprised of operations with maturities of 90 days or less from the date of investment. The company has no restrictions on significant amounts of available cash.

b) The detail of cash and cash equivalents by currency is as follows:

Currency	12-31-2013		12-31-2012		01-01-2012
	ThCh$		ThCh$		ThCh$
Chilean peso		54,192,317		6,284,098		176,040,401
Argentine peso		6,248,527		5,902,409		18,496,001
Colombian peso		227,767,858		187,767,447		136,254,802
Peruvian nuevo sol		20,637,363		31,593,851		29,927,607
U.S. Dollar		14,961,314		4,129,928		29,049,460
Total		323,807,379		235,677,733		389,768,271

6. OTHER FINANCIAL ASSETS

The detail of other financial assets as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	Current						Non-current
Other Financial Assets	12-31-2013		12-31-2012		01-01-2012		12-31-2013		12-31-2012		01-01-2012
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Available-for-sale financial investments - quoted equity securities		-		-		-		6,468		6,358		61,676
Available-for-sale financial investments - unquoted equity securities or with limited liquidity		-		-		-		4,037,314		3,995,919		3,883,731
Hedging derivatives (*)		21,128,524		51,876		723,067		16,507		29,200,554		9,385,907
Non-hedging derivatives (*)		2,063,414		-		47,504		-		-		-
Financial assets at fair value with change in profit or loss (*)				25,067,909		-		-		-		-
Financial assets held to maturity (*)		944,540		-		-		-		-		-
Other		-		-		143,638		-		102,159		161,140
Total		24,136,478		25,119,785		914,209		4,060,289		33,304,990		13,492,454

( *) See Note 18.2.a.

(**) See Note 18.2.b.

F-48

7. TRADE AND OTHER RECEIVABLES

a) The detail of trade and other receivables as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

Trade and Other Receivables, Gross	Balance at
	12-31-2013				12-31-2012				01-01-2012
	Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$
Trade and other receivables, gross		251,755,148		131,597,410		222,270,043		146,964,151		285,265,470		151,608,768
Trade receivables, gross		229,143,110		125,349,056		139,929,739		140,323,852		250,759,639		148,367,033
Other receivables, gross		22,612,038		6,248,354		82,340,304		6,640,299		34,505,831		3,241,735
Trade and Other Receivables, Net	Balance at
	12-31-2013				12-31-2012				01-01-2012
	Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$
Trade and other receivables, net		247,762,922		131,597,410		217,682,591		146,964,151		278,790,141		151,608,768
Trade receivables, net (*)		226,448,136		125,349,056		136,604,395		140,323,852		245,610,400		148,367,033
Other receivables, net (**)		21,314,786		6,248,354		81,078,196		6,640,299		33,179,741		3,241,735

(*) As of December 31, 2013 and 2012, includes ThCh$1,468,908 and ThCh$12,307,382, respectively, from agreements corresponding to reconciliation, termination of arbitration, and settling of prices between Endesa Chile and Compañía de Papeles y Cartones (CMPC).

(**) As of December 31, 2013, December 31, 2012, and January 1, 2012, includes ThCh$0, ThCh$74,873,533, and ThCh$24,261,059, respectively, in Accounts receivable from insurance (Bocamina I and II plants).

The balances in this account do not generally accrue interest.

The Group does not have clients to which it has sales representing 10% or more of its operating income in the fiscal years ended December 31, 2013 and 2012.

Refer to Note 8.1 for detailed information on amounts, terms, and conditions associated with accounts receivable from related companies

b) As of December 31, 2013, December 31, 2012, and January 1, 2012, the balance of unimpaired past due trade receivables is as follows:

Trade Receivables Past Due but Not Impaired	Balance at
	12-31-2013      ThCh$		12-31-2012      ThCh$		01-01-2012      ThCh$
Less than three months		978,179		851,999		1,419,316
Between three and six months		21,242,045		587,652		302
Between six and twelve months		670,204		1,394,740		350,334
Total		22,890,429		2,834,391		1,769,952

F-49

c) The reconciliation of changes in the allowance for impairment of trade receivables is as follows:

Trade Receivables Past Due and Impaired	Current and         Non-current         ThCh$
Balance at January 1, 2012		6,475,329
Increases (decreases) for the year		(1,460,736)
Amounts written off		(271,908)
Foreign currency translation differences		(30,262)
Other		(124,971)
Balance at December 31, 2012		4,587,452
Increases (decreases) for the year (*)		(140,365)
Amounts written off		(411,830)
Foreign currency translation differences		(43,031)
Balance at December 31, 2013		3,992,226

(*)See Note 26 for Depreciation, amortization, and impairment losses.

Write-offs for bad debt

Past-due debt is written off once all collection measures and legal proceedings have been exhausted and the debtors’ insolvency has been demonstrated. In our power generation business, this process normally takes at least one year of procedures for the few cases that arise in each country.

d) Additional information:

- Additional statistical information required under Official Bulletin 715 of the SVS, Chile, of February 3, 2012, XBRL Taxonomy: see Appendix 6.

- Complementary information on trade receivables, see Appendix 6.1.

F-50

8. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

Related party transactions are performed at current market conditions.

Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not itemized in this note.

As of the date of these financial statements, no guarantees have been given or received nor has any allowance for bad or doubtful accounts been recorded with respect to receivable balances for related company transactions.

8.1  Balances and transactions with related companies

The balances of accounts receivable and payable between the Company and its non-consolidated related companies are as follows:

a) Receivables from related companies

							Current						Non-current
Taxpayer ID     No. (RUT)	Company	Description of Transaction	Term of Transaction	Relationship	Currency	Country	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Foreign	Comercializadora de Energía del Mercosur S.A.	Energy sales	Less than 90 days	Associate	Ar$	Argentina		1,202,518		3,259,940		2,135,015		-		-		-
Foreign	Comercializadora de Energía del Mercosur S.A.	Other services	Less than 90 days	Associate	Ar$	Argentina		-		5,788,317		483,179		-		-		-
96,800,570-7	Chilectra S.A.	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		21,575,728		15,575,922		12,737,733		-		-		-
96,800,570-7	Chilectra S.A.	Toll	Less than 90 days	Common immediate parent	CH$	Chile		-		-		1,805,810		-		-		-
96,800,570-7	Chilectra S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		1,578,572		855,814		975,867		-		-		-
Foreign	Companhía Interconexao Energética S.A.	Toll	Less than 90 days	Common immediate parent	Ar$	Brazil		7,467,073		7,903,684		8,412,834		-		-		-
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Energy sales	Less than 90 days	Common immediate parent	CP	Colombia		12,572,443		14,882,711		34,796,603		-		-		-
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Other services	Less than 90 days	Common immediate parent	CP	Colombia		20,674		84,496		-		-		-		-
Foreign	Empresa de Energía de Piura S.A.	Other services	Less than 90 days	Common immediate parent	Sol	Peru		139,579		-		208,118		-		-		-
Foreign	Empresa de Energía de Piura S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		15,899		-		-		-		-		-
Foreign	Empresa de Distribución Eléctrica de Lima Norte S.A.A.	Energy sales	Less than 90 days	Common immediate parent	Sol	Peru		7,085,960		9,221,914		10,301,087		-		-		-
Foreign	Empresa de Distribución Eléctrica de Lima Norte S.A.A.	Other services	Less than 90 days	Common immediate parent	Sol	Peru		10,191		-		-		-		-		-
Foreign	Empresa Distribuidora Sur S.A.	Mercantile current account	Less than 90 days	Common immediate parent	Ar$	Argentina		29,718		9,428		3,500		-		-		-
96,783,910-8	Empresa Eléctrica de Colina Ltda.	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		8,318		2,768		12,375		-		-		-
Foreign	Empresa de Energía de Cundinamarca S.A.	Energy sales	Less than 90 days	Common immediate parent	CP	Colombia		934,281		243,906		307,638		-		-		-
94,271,000-3	Enersis S.A.	Other services	Less than 90 days	Parent	CH$	Chile		575,075		999,042		365,090		-		-		-
94,271,000-3	Enersis S.A.	Mercantile current account	Less than 90 days	Parent	CH$	Chile		20,913		-		-
Foreign	Generalima S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Peru		50,298		23,890		311,013		-		-		-
76,418,940-K	GNL Chile S.A.	Other services	Less than 90 days	Associate	US$	Chile		1,717,013		546,833		591,541		-		-		-
76,418,940-K	GNL Chile S.A.	Advance natural gas purchases	Less than 90 days	Associate	US$	Chile		11,382,879		-		-
76,418,940-K	GNL Chile S.A.	Loans	Less than 90 days	Associate	US$	Chile		445,022		379,802		379,862		-		-		-
76,788,080-4	GNL Quinteros S.A.	Energy sales	Less than 90 days	Associate	CH$	Chile		366,882		771,985		8,926,072		-		-		-
76,107,186-6	ICT Servicios Informáticos Ltda.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		11,918		56,689		18,979		-		-		-
79,913,810-7	Inmobiliaria Manso de Velasco S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		1,602		1,667		651		-		-		-
96,800,460-3	Luz Andes Ltda.	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		1,953		546		3		-		-		-
96,806,130-5	Electrogas S.A.	Dividends	Less than 90 days	Associate	CH$	Chile		1,375,492		-		-		-		-		-
96,524,140-K	Empresa Eléctrica Panguipulli S.A.	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		66,541		22,457		12		-		-		-
96,880,800-1	Empresa Eléctrica Puyehue S.A.	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		11,636		95,399		7		-		-		-
Foreign	Distrilec Inversora S.A.	Dividends	Less than 90 days	Associate	US$	Argentina		6,960		8,443		10,492		-		-		-
Foreign	Endesa Brasil S.A.	Dividends	Less than 90 days	Associate	CH$	Brazil		42,603,758		-		-		-		-		-
Foreign	Endesa Brasil S.A.	Dividends	Less than 90 days	Associate	Sol	Brazil		4,918,900		-		-		-		-		-
Foreign	PH Chucas Costa Rica	Other services	Less than 90 days	Common immediate parent	CH$	Costa Rica		147,234		42,019		317,563		-		-		-
Foreign	Endesa Generación S.A.	Commodity derivatives (*)	Less than 90 days	Common immediate parent	CH$	Spain		129,780		784,741		-		-		-		-
Foreign	Central Dock Sud	Other services	Less than 90 days	Common immediate parent	CH$	Spain		-		17,256		-		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Loans	Less than 90 days	Joint venture	US$	Chile		14,839,233		13,336,206		20,201,586		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Energy sales	Less than 90 days	Joint venture	US$	Chile		-		98,150		98,118		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Other services	Less than 90 days	Joint venture	CH$	Chile		544,015		213		-		-		-		-
76,652,400-1	Centrales Hidroeléctricas De Aysén S.A.	Other services	Less than 90 days	Joint venture	CH$	Chile		-		292,518		270,458		-		-		-
77,017,930-0	Transmisora Eléctrica de Quillota Ltda.	Other services	Less than 90 days	Joint venture	CH$	Chile		-		181,855		177,501		-		-		-
Foreign	Endesa Energía S.A.	Natural gas sales	Less than 90 days	Associate	CH$	Chile		51,722		-		-		-		-		-
76,126,507-5	Parque Eolico Talinay Oriente SA	Energy sales	Less than 90 days	Common immediate parent	CH$	Chile		22		-		-		-		-		-
	Total							131,909,802		75,488,611		103,848,707		-		-		-

(*) See Note 18.3.a.

F-51

b) Accounts payable to related companies

							Current						Non-current
Taxpayer ID     No. (RUT)	Company	Description of Transaction	Term of Transaction	Relationship	Currency	Country	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Foreign	Carboex S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Spain		-		-		5,586,847		-		-		-
Foreign	Comercializadora de Energía del Mercosur S.A.	Fuel purchases	Less than 90 days	Associate	Ar$	Argentina		1,739,120		7,202,746		19,615,744		-		-		-
Foreign	Comercializadora de Energía del Mercosur S.A.	Other services	Less than 90 days	Associate	Ar$	Argentina		2,319		752		-		-		-		-
96,800,570-7	Chilectra S.A.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		35,609		208,612		1,510,401		-		-		-
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Energy purchases	Less than 90 days	Common immediate parent	CP	Colombia		2,231,822		1,881,909		-		-		-		-
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Mercantile current account	Less than 90 days	Common immediate parent	CP	Colombia		-		-		4,155,760		-		-		-
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Other services	Less than 90 days	Common immediate parent	CP	Colombia		44,023		58,905		-		-		-		-
Foreign	Compañía de Transmisión del Mercosur S.A.	Toll	Less than 90 days	Common immediate parent	Ar$	Argentina		7,467,073		7,903,684		8,412,834		-		-		-
Foreign	Empresa de Energía de Piura S.A.	Other services	Less than 90 days	Common immediate parent	Sol	Peru		165,479		-		-		-		-		-
Foreign	Empresa de Distribución Eléctrica de Lima Norte S.A.A.	Other services	Less than 90 days	Common immediate parent	Sol	Peru		15,799		19,405		13,875		-		-		-
Foreign	Empresa Distribuidora Sur S.A.	Mercantile current account	Less than 90 days	Common immediate parent	Ar$	Argentina		85,350		74,533		60,111		-		-		-
96,806,130-5	Electrogas S.A.	Other services	Less than 90 days	Associate	CH$	Chile		200,821		54,607		538,373		-		-		-
Foreign	Empresa de Energía de Cundinamarca S.A.	Toll	Less than 90 days	Common immediate parent	CP	Colombia		108,829		95,007		124,779		-		-		-
Foreign	Inversiones Sudamerica Ltda.	Dividends	More than 90 days	Common immediate parent	CH$	Spain		-		-		-		-		-		-
Foreign	Inversiones Sudamerica Ltda.	Dividends	Less than 90 days	Common immediate parent	CP	Spain		-		-		-		-		-		-
Foreign	Endesa Latinoamérica S.A.	Dividends	More than 90 days	Common immediate parent	CH$	Colombia		-		725,029		957,059		-		-		-
Foreign	Endesa Latinoamérica S.A.	Dividends	Less than 90 days	Common immediate parent	CP	Colombia		-		9,726,465		4,457,125		-		-		-
94,271,000-3	Enersis S.A.	Other services	Less than 90 days	Parent	CH$	Chile		1,373,162		819,438		480,824		-		-		-
94,271,000-3	Enersis S.A.	Dividends	Less than 90 days	Parent	CH$	Chile		63,685,881		42,166,288		80,410,515		-		-		-
94,271,000-3	Enersis S.A.	Dividends	Less than 90 days	Parent	CP	Chile		11,513,845		-		-
94,271,000-3	Enersis S.A.	Mercantile current account	Less than 90 days	Parent	CH$	Chile		553		111,270,569		2,800		-		-		-
94,271,000-3	Enersis S.A.	Loans	Less than 90 days	Parent	CH$	Chile		196,671,232		-		-		-		-		-
76,418,940-K	GNL Chile S.A.	Natural gas purchases	Less than 90 days	Associate	CH$	Chile		13,864,085		25,884,955		8,517,317		-		-		-
76,107,186-6	ICT Servicios Informáticos Ltda.	Other services	Less than 90 days	Common immediate parent	CH$	Chile		283,695		310,228		270,262		-		-		-
76,107,186-6	ICT Servicios Informáticos Ltda.	Mercantile current account	Less than 90 days	Common immediate parent	CH$	Chile		-		-		8,234		-		-		-
96,524,140-K	Empresa Eléctrica Panguipulli S.A.	Energy purchases	Less than 90 days	Common immediate parent	CH$	Chile		684,882		216,029		182,599		-		-		-
96,880,800-1	Empresa Eléctrica Puyehue S.A.	Energy purchases	Less than 90 days	Common immediate parent	CH$	Chile		2,865		15,896		41,017		-		-		-
Foreign	Endesa Generación S.A.	Fuel purchases	Less than 90 days	Common immediate parent	CH$	Spain		4,947,081		4,556,927		-		-		-		-
Foreign	Endesa Generación S.A.	Commodity derivatives (*)	Less than 90 days	Common immediate parent	CH$	Spain		-		32,200		-		-		-		-
Foreign	Central Termica Manuel Belgrano	Mercantile current account	Less than 90 days	Associate	Ar$	Argentina		-		-		846		-		-		-
Foreign	Enel Energy Europe S.L.	Other services	Less than 90 days	Common immediate parent	CP	Spain		-		34,487		39,167		-		-		-
Foreign	Enel Energy Europe S.L.	Other services	Less than 90 days	Common immediate parent	Ar$	Spain		66,996		45,107		-		-		-		-
Foreign	Enel Energy Europe S.L.	Other services	Less than 90 days	Common immediate parent	Sol	Spain		45,523		48,086		-		-		-		-
Foreign	Enel Energy Europe S.L.	Other services	Less than 90 days	Common immediate parent	CH$	Spain		73		166,923		-		-		-		-
Foreign	Enel Produzione	Other services	Less than 90 days	Common immediate parent	CH$	Italia		80,928		80,928		-		-		-		-
Foreign	Enel Ingegneria e Innovazione	Other services	Less than 90 days	Common immediate parent	US$	Italia		2,036,678		-		-		-		-		-
Foreign	Central Dock Sud	Other services	Less than 90 days	Common immediate parent	CH$	Spain		-		407		-		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Natural gas purchases	Less than 90 days	Joint venture	US$	Chile		4,846,992		1,629,774		1,866,685		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Energy purchases	Less than 90 days	Joint venture	US$	Chile		-		371,650		-		-		-		-
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Other services	Less than 90 days	Joint venture	US$	Chile		-		90,625		-		-		-		-
77,017,930-0	Transmisora Eléctrica de Quillota Ltda.	Toll	Less than 90 days	Joint venture	CH$	Chile		-		66,037		-		-		-		-
77,017,930-0	Transmisora Eléctrica de Quillota Ltda.	Other services	Less than 90 days	Joint venture	CH$	Chile		219,863		158,713		202,613		-		-		-
76,126,507-5	Parque Eolico Talinay Oriente SA	Energy purchases	Less than 90 days	Common immediate parent	CH$	Chile		400,587		-		-		-		-		-
Foreign	Endesa Brasil S.A.	Other services	Less than 90 days	Associate	CH$	Brazil		92,999		-		-		-		-		-
	Total							312,914,164		215,916,921		137,455,787		-		-		-

(*) See Note 18.3.a.

F-52

c) Significant transactions and effects on income/expenses

Transactions with related companies that are not consolidated and their effects on profit or loss are as follows:

					Balance at
Taxpayer ID    No. (RUT)	Company	Relationship	Description of Transaction	Country	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
96,800,570-7	Chilectra S.A.	Common immediate parent	Energy sales	Chile		182,946,267		177,486,847		185,387,242
		Common immediate parent	Energy purchases	Chile		-		-		(1,190,687)
		Common immediate parent	Services rendered	Chile		1,558,697		2,564,327		857,384
		Common immediate parent	Services received	Chile		(7,596)		(10,796)		(1,586)
		Common immediate parent	Electricity tolls	Chile		(2,433,950)		(711,218)		(1,836,817)
Foreign	Cia A. Multiser. Perú Ltda.	Common immediate parent	Services received	Peru		-		-		(10,349)
96,783,910-8	Empresa Eléctrica de Colina Ltda.	Common immediate parent	Energy sales	Chile		-		9,124		200,712
		Common immediate parent	Electricity tolls	Chile		9,267		14,055		17,295
		Parent	Services rendered	Chile		15		42		7,963
94,271,000-3	Enersis S.A.	Parent	Services rendered	Chile		-		-		1,103,543
		Parent	Loans	Chile		(17,722,188)		(8,893,011)		(1,631,521)
		Parent	Services received	Chile		(1,093,820)		(1,205,502)		(2,108,577)
96,543,670-1	Cia A. Multiser. Ltda.	Common immediate parent	Services rendered	Chile		-		-		3,659
		Common immediate parent	Services received	Chile		-		-		(187,913)
Foreign	Cia A. Multiser Colombia Ltda.	Common immediate parent	Services received	Colombia		-		-		(76,127)
		Common immediate parent	Services rendered	Colombia		-		-		2,500
96,529,420-1	Synapsis Soluciones y Servicios IT Ltda.	Common immediate parent	Services rendered	Chile		-		-		27,780
		Common immediate parent	Services received	Chile		-		-		(126,593)
Foreign	Synapsis Perú Ltda.	Common immediate parent	Services received	Peru		-		-		(29,294)
Foreign	Synapsis Colombia Ltda.	Common immediate parent	Services received	Colombia		-		-		(11,199)
Foreign	Empresa Distribuidora Sur S.A.	Common immediate parent	Services rendered	Argentina		(35,012)		-		-
		Common immediate parent	Energy sales	Argentina		20,319		24,023		26,337
96,800,460-3	Luz Andes Ltda.	Common immediate parent	Energy sales	Chile		-		732		19,917
		Common immediate parent	Electricity tolls	Chile		1,696		1,486		2,548
		Common immediate parent	Services rendered	Chile		-		-		1,294
Foreign	Compañía Distribuidora y Comercializadora de Energía S.A.	Common immediate parent	Energy sales	Colombia		155,432,080		177,490,874		177,111,431
		Common immediate parent	Energy purchases	Colombia		(25,482)		(341,378)		-
		Common immediate parent	Services rendered	Colombia		102,046		128,511		216,572
		Common immediate parent	Services received	Colombia		(156,355)		(285,771)		(544,956)
		Common immediate parent	Loans	Colombia		-		(658,607)		(568,669)
		Common immediate parent	Electricity tolls	Colombia		(24,036,652)		(23,676,437)		(22,164,546)
Foreign	Comercializadora de Energía del Mercosur S.A.	Associate	Electricity tolls	Argentina		-		(5,850)		-
		Associate	Services received	Argentina		(586,483)		(517,069)		-
Foreign	Empresa de Distribución Eléctrica de Lima Norte S.A.A.	Common immediate parent	Energy sales	Peru		82,950,522		98,807,132		113,677,669
		Common immediate parent	Electricity tolls	Peru		(122,031)		(137,978)		(179,444)
		Common immediate parent	Services received	Peru		-		-		(57,535)
		Common immediate parent	Services rendered	Peru		141,190		100,105		9,648
Foreign	Endesa Latinoamericana S.A.	Common immediate parent	Services received	Spain		-		-		(2,891)
Foreign	Endesa Brasil S.A.	Associate	Services rendered	Brazil		-		-		427,898
		Associate	Loans	Brazil		-		-		(3,866,183)
Foreign	Endesa Generación	Common immediate parent	Fuel consumption	Spain		(47,540,061)		(41,522,504)		-
Foreign	Endesa Trading.	Common immediate parent	Fuel consumption	Spain		-		(705,859)		-
Foreign	Empresa de Energía de Piura S.A.	Common immediate parent	Energy sales	Peru		856,559		267,642		97,878
		Common immediate parent	Energy purchases	Peru		(141,984)		(2,374,756)		(2,404,335)
		Common immediate parent	Services rendered	Peru		(726,425)		-		-
		Common immediate parent	Services received	Peru		137,866		128,134		206,808
Foreign	Generalima S.A.	Common immediate parent	Services rendered	Peru		1,826,218		23,890		598,179
Foreign	Empresa de Energía de Cundinamarca S.A.	Common immediate parent	Electricity tolls	Colombia		(883,691)		(505,024)		(409,477)
		Common immediate parent	Energy sales	Colombia		9,145,949		8,171,445		8,534,042
76,788,080-4	GNL Quinteros S.A.	Associate	Energy sales	Chile		2,808,698		638,187		5,839,244
		Associate	Services rendered	Chile		835,543		661,296		600
		Associate	Electricity tolls	Chile		-		-		984,760
Foreign	Compañía de Transmisión del Mercosur S.A.	Common immediate parent	Electricity tolls	Argentina		(1,036,437)		(1,225,319)		-
96,806,130-5	Electrogas S.A.	Associate	Natural gas tolls	Chile		(2,734,877)		(2,175,039)		(2,677,343)
		Associate	Fuel consumption	Chile		(428,555)		(697,653)		(237,593)
96,806,130-5	Electrogas S.A.	Associate	Loans	Chile		-		-		10,783
76,418,940-K	GNL Chile S.A.	Associate	Natural gas consumption	Chile		(60,095,868)		(168,238,842)		(132,888,115)
		Associate	Loans	Chile		40,124		21,995		111,779
		Associate	Natural gas transportation	Chile		(34,796,720)		(34,209,731)		(28,679,684)
		Associate	Services rendered	Chile		769,402		220,493		-
96,976,600-0	Gestión Social S.A. (*)	Related to Director	Other services rendered	Chile		-		(49,133)		(71,711)
78,488,290-k	Tironi y Asociados S.A. (*)	Related to Director	Other services rendered	Chile		-		(2,475)		(33,703)
76,107,186-6	ICT Servicios informáticos Ltda.	Common immediate parent	Services received	Chile		(1,090,847)		(1,072,506)		(1,061,463)
		Common immediate parent	Services rendered	Chile		14,936		80,799		97,993
79,913,810-7	Inmobiliaria Manso de Velasco S.A.	Common immediate parent	Services rendered	Chile		2,939		3,403		8,504
		Common immediate parent	Services received	Chile		-		-		(12,831)
96,524,140-K	Empresa Eléctrica Panguipulli S.A.	Common immediate parent	Energy sales	Chile		356,056		98,441		128,210
		Common immediate parent	Energy purchases	Chile		(6,119,652)		(1,987,512)		(3,811,001)
		Common immediate parent	Services rendered	Chile		-		-		1,599
96,880,800-1	Empresa Eléctrica Puyehue S.A.	Common immediate parent	Energy sales	Chile		225,833		133,270		26,659
		Common immediate parent	Energy purchases	Chile		(65,184)		(757,930)		3,085
		Common immediate parent	Services rendered	Chile		-		-		(25,269)
		Common immediate parent	Electricity tolls	Chile		(44,504)		(29,745)		(1,935,166)
Foreign	Companhía Interconexao Energética S.A.	Common immediate parent	Electricity tolls	Brazil		1,036,437		1,225,319		-
		Common immediate parent	Loans	Brazil		-		-		(76,201)
Foreign	Carboex S.A.	Common immediate parent	Fuel consumption	Spain		-		(5,042,960)		(39,042,866)
		Common immediate parent	Services received	Spain		-		-		(265,334)
Foreign	Enel Green Power Mexico	Common immediate parent	Services rendered	Mexico		-		-		19,216
Foreign	Enel Energy Europe	Common immediate parent	Services received	Spain		(396,540)		(297,784)		-
Foreign	Central Térmica Manuel Belgrano S.A.	Associate	Loans	Argentina		-		-		287,347
Foreign	Central Térmica San Martin S.A.	Associate	Loans	Argentina		-		-		211,530
76,652,400-1	Centrales Hidroeléctricas De Aysén S.A.	Associate	Loans	Chile		46,444		-		73,518
		Associate	Services rendered	Chile		10,281		-		1,346,719
77,017,930-0	Transmisora Eléctrica de Quillota Ltda.	Associate	Electricity tolls	Chile		(1,243,417)		(1,219,958)		(1,292,602)
		Associate	Other financial income	Chile		-		-		46,163
		Associate	Other fixed operating expenses	Chile		-		-		199,133
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	Associate	Energy purchases	Chile		(9,295,172)		(6,589,964)		-
		Associate	Natural gas transportation	Chile		(20,937,075)		(20,131,152)		(19,332,811)
		Associate	Loans	Chile		489,864		765,504		2,577,375
		Associate	Energy sales	Chile		95,845		64,914		4,216,934
		Associate	Services received	Chile		(219,671)		(417,892)		(255,407)
Foreign	PH Chucas Costa Rica	Common immediate parent	Services rendered	Costa Rica		236,173		481,177		419,356
Foreign	CENTRAL DOCK SUD	Common immediate parent	Services rendered	Argentina		3,091		-		-
Foreign	Endesa Energía S.A.	Common immediate parent	Natural gas sales	Spain		21,397,171		-		-
		Common immediate parent	Services rendered	Spain		51,722		-		-
76,126,507-5	Parque Eolico Talinay Oriente SA	Common immediate parent	Energy purchases	Chile		(1,148,051)		-		-
Foreign	Enel Ingegneria e Innovazione	Common immediate parent	Services received	Chile		(573,929)		-		-
			Total			227,811,021		143,915,812		236,041,007

(* ) Company related to former Enersis Director Eugenio Tironi Barrios.

F-53

Transfers of short-term funds between related companies are treated as current accounts changes, with variable interest rates based on market conditions used for the monthly balance. The resulting amounts receivable or payable are usually at 30 days term, with automatic rollover for the same periods and amortization in line with cash flows.

8.2  Board of Directors and key management personnel

Endesa Chile is managed by Board of Directors which consists of nine members. Each director serves for a three-year term after which they can be reelected

The Board of Directors was elected at the Ordinary Shareholders Meeting held on April 26, 2012. The Chairman, Vice Chairman, and Secretary were designated at the Board meeting also held on April 26, 2012. The new Secretary was designated at the Board meeting held on October 29, 2013.

a) Accounts receivable and payable and other transactions

• Accounts receivable and payable

There are no outstanding amounts receivable or payable between the Company and the members of the Board of Directors and key management personnel

• Other transactions

No other transactions have taken place between the Company and the members of the Board of Directors and key management personnel.

b) Compensation for Directors

In accordance with Article 33 of Law No. 18,046 governing stock corporations, the compensation of Directors is established each year at the Ordinary Shareholders Meeting of Endesa Chile. The same methodology has been used since 2001 to determine the compensation described below.

The remuneration breaks down as follows:

a.         101.00 UF as a fixed monthly fee, and

b.         66.00 UF per diem for each Board meeting attended.

Both fees are 100% higher for the Chariman and 50% higher for the Vice Chairman.

If any Director of Endesa Chile is a member of more than one Board in any Chilean or foreign subsidiaries and/or associates, or holds the position of director or advisor in other Chilean or foreign companies or legal entities in which Endesa Chile has a direct or indirect ownership interest, that Director can be compensated for his/her participation in only one of those Boards or Management Committees.

The Executive Officers of Endesa Chile and/or any of its Chilean or foreign subsidiaries or associates will not receive any compensation or per diem if they hold the position of director in any of the Chilean or foreign subsidiaries or associates of Endesa Chile.

Directors’ Committee

Each Directors’ Committee member receives 56.00 UF for each meeting attended, up to a maximum of 12 remunerated meetings per year.

F-54

The enactment of Law 20,382 on improved Corporate Governance resulted in the merger of the Directors’ Committee and the Audit Committee.

The following tables show details of the compensation paid to the members of the Board of Directors as of December 31, 2013, 2012, and 2011:

Name	Position	12-31-2013
		Period in Position	Endesa Board ThCh$		Board of Subsidiaries ThCh$		Directors’ Committee ThCh$
Jorge Rosenblut Ratinoff	Chairman	1/1/13 to 12/31/13		98,197		-		-
Paolo Bondi (1)	Vice Chairman	1/1/13 to 12/31/13		-		-		-
Francesco Buresti (1)	Director	1/1/13 to 12/31/13		-		-		-
Vittorio Corbo	Director	1/1/13 to 12/31/13		49,099		-		-
Jaime Bauza Bauza	Director	1/1/13 to 12/31/13		49,099		-		15,451
Felipe Lamarca Claro	Director	1/1/13 to 12/31/13		49,099		-		15,451
Alfredo Arahuetes Garcia (3)	Director	1/1/13 to 12/31/13		49,099		-		-
Enrique Cibié Bluth (3)	Director	1/1/13 to 12/31/13		49,099		-		15,451
Manuel Morán Casero (1) ; (3)	Director	1/1/13 to 12/31/13		-		-		-
TOTAL				343,691		-		46,352
Name	Position	12-31-2012
		Period in Position	Endesa Board ThCh$		Board of Subsidiaries ThCh$		Directors’ Committee ThCh$
Jorge Rosenblut Ratinoff	Chairman	1/1/12 to 12/12/31		99,635		-		-
Paolo Bondi (1)	Vice Chairman	1/1/12 to 12/12/31		-		-		-
Jaime Estévez Valencia (2)	Director	1/1/12 to 12/12/31		15,027		-		5,039
Francesco Buresti (1)	Director	1/1/12 to 12/12/31		-		-		-
José María Calvo-Sotelo Ibañez-Martín (2)	Director	1/1/12 to 4/26/12		15,027		-		-
Vittorio Corbo	Director	1/1/12 to 12/12/31		49,817		-		-
Jaime Bauza Bauza	Director	1/1/12 to 12/12/31		49,818		-		15,201
Felipe Lamarca Claro	Director	1/1/11 to 12/31/11		49,818		-		15,201
Alfredo Arahuetes Garcia (3)	Director	04/26/12 to 12/12/31		35,171		-		-
Enrique Cibié Bluth (3)	Director	04/26/12 to 12/12/31		35,171		-		10,162
Manuel Morán Casero (1) ; (3)	Director	04/26/12 to 12/12/31		-		-		-
TOTAL				349,484		-		45,603
Name	Position	12-31-2011
		Period in Position	Endesa Board ThCh$		Board of Subsidiaries ThCh$		Directors’ Committee ThCh$
Jorge Rosenblut Ratinoff	Chairman	1/1/11 to 12/31/11		77,843		-		-
Paolo Bondi (1)	Vice Chairman	1/1/11 to 12/31/11		-		-		-
Jaime Estévez Valencia	Director	1/1/11 to 12/31/11		38,921		-		18,916
Francesco Buresti (1)	Director	1/1/11 to 12/31/11		-		-		-
José María Calvo-Sotelo Ibañez-Martín	Director	1/1/11 to 12/31/11		38,921		-		-
Luis de Guindos Jurado	Director	1/1/11 to 12/31/11		38,921		-		-
Vittorio Corbo	Director	1/1/11 to 12/31/11		38,921		-		-
Jaime Bauza Bauza	Director	1/1/11 to 12/31/11		38,921		-		18,916
Felipe Lamarca Claro	Director	1/1/11 to 12/31/11		38,921		-		18,916
TOTAL				311,369		-		56,748

(1) Paolo Bondi, Francesco Buresti, and Manuel Morán waived the fees and allowances due them as Endesa Chile Directors.

(2) Jaime Estévez Valencia and José Maria Calvo-Sotelo served as Directors until the Ordinary Shareholders’ Meeting held on April 26, 2012.

(3) Alfredo Arahuetes, Enrique Cibié, and Manuel Morán were designated Endesa Chile Directors at the Ordinary Shareholders’ Meeting held on April 26, 2012.

c) Guarantees established by the Company in favor of the Directors

No guarantees have been given to the Directors.

F-55

8.3  Compensation for Endesa Chile executives

a) Remuneration received by key management personnel

Taxpayer ID No. (RUT)	Company Executives
	Name	Position
23,295,610-0	Joaquín Galindo Vélez	Chief Executive Officer
22,357,225-1	Ramiro Alfonsin Balza	Deputy Chief Executive Officer
24,430,233-5	Paulo Jorge Domingues Dos Santos (6)	Regional Electricity Production Officer
24,240,132-8	Fernando Prieto Plaza (2)	Regional Engineering, Projects, and R&D and Innovation Officer
7,893,919-2	José Venegas Maluenda	Regional Energy Management and Sales Officer
7,044,467-4	Fernando Gardeweg Ried (1)	Chief Finance Officer
12,403,710-7	Juan La Fuente Vila (3)	Planning and Control Officer
24,332,937-K	Federico Polemann (4)	Human Resources Officer
12,690,736-2	María Francisca Moya Moreno	Communications Officer
10,673,365-1	Sebastián Fernández Cox	Energy Projects and Planning Officer
7,776,718-5	Luis Ignacio Quiñones Sotomayor (5)	General Counsel

(1) Mr. Fernando Gardeweg Ried took over as Chief Finance Officer on September 1, 2012, replacing Mr. Eduardo Escaffi Johnson, who resigned on August 27, 2012.

(2) Mr. Fernando Prieto Plaza took over as Regional Engineering, Projects, and R&D and Innovation Officer on March 1, 2013, replacing Mr. Juan Benabarre Benaiges, who resigned on January 31, 2013.

(3) Mr. Juan La Fuente Vila took over as Planning and Control Officer on June 1, 2013, replacing Mr. Luis Larumbe Aragón.

(4) Mr. Federico Polemann took over as Human Resources Officer on July 24, 2013, replacing Ms. Luz María Torm Silva.

(5) Mr. Luis Ignacio Quiñones took over as General Counsel on November 1, 2013, replacing Mr. Carlos Martin.

(6) Mr. Paulo Jorge Domingues Dos Santos took over as Regional Electrical Production Officer on November 1, 2013, replacing Mr. Claudio Iglesis Guillard.

The accrued remuneration of key management personnel is the following:

	Balance at
	12-31-2013		12-31-2012		12-31-2011
	ThCh$		ThCh$		ThCh$
Cash compensation		2,072,023		1,989,781		2,000,299
Short-term benefits for employees		629,114		882,323		995,734
Other long-term benefits		1,000,792		627,678		215,192
TOTAL		3,701,929		3,499,782		3,211,225

Incentive plans for main officers and managers

Endesa Chile has implemented an annual bonus plan for its executives based on meeting company-wide objectives and on the level of their individual contribution in achieving the overall goals of the Company. The plan provides for a range of bonus amounts according to seniority level. The bonuses paid to the executives consist of a certain number of monthly gross remunerations.

b) Guarantees established by the Company in favor of Endesa Chile executives

No guarantees have been given to Endesa Chile executives.

8.4  Compensation plans linked to share price

There are no Board compensation plans linked to the share price.

F-56

9.   INVENTORIES

The detail of inventories as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

Classes of Inventories	Balance at
	12-31-13		12-31-12		01-01-12
	ThCh$		ThCh$		ThCh$
Supplies for production		27,632,087		41,909,089		31,215,141
Supplies for projects and spare parts		18,522,958		17,453,531		18,060,885
Total		46,155,045		59,362,620		49,276,026

There are no inventories pledged as security for liabilities.

For the period ended December 31, 2013, the figure for raw materials and consumables recognized as expenses were ThCh$307,849,013 (ThCh$732,310,177 and ThCh$676,035,672 as of December 31, 2012 and January 1, 2012, respectively). See Note 24.

As of December 31, 2013, December 31, 2012, and January 1, 2012, no inventories have been written down.

10.  CURRENT TAX RECEIVABLES AND PAYABLES

The detail of current tax receivables as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	Balance at
	12-31-2013             ThCh$		12-31-2012             ThCh$		01-01-2012             ThCh$
Monthly provisional tax payments		50,221,458		39,095,650		62,900,289
VAT tax credit		59,412,638		67,101,005		17,153,939
Tax credit for absorbed profits		13,940,841		41,528,840		-
Tax credit for training expenses		218,000		180,000		2,040
Tax credits from dividends received abroad		28,896,906		-		-
Other		1,704,841		2,774,834		1,997,188
Total		154,394,684		150,680,329		82,053,456

The detail of current tax payables as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	Balance at
	12-31-2013             ThCh$		12-31-2012             ThCh$		01-01-2012             ThCh$
Income tax		76,264,733		51,717,091		51,997,329
VAT tax charge		8,485,903		8,492,677		11,846,140
Net worth tax		12,791,531		12,748,320		14,593,219
Other		7,017,184		5,415,940		12,028,552
Total		104,559,351		78,374,028		90,465,240

F-57

11.  INVESTMENTS ACCOUNTED FOR WITH THE EQUITY METHOD

11.1  Investments accounted for with the equity method

a) The following tables present the changes in investments in associated companies and joint ventures accounted for with the equity method at December 31, 2013 and 2012:

Changes in Investments in Associates	Relationship	Country	Currency	Ownership Interest		Balance at 1/1/2013		Additions		Share of Profit (Loss)		Dividends Declared		Foreign Currency Translation		Other Increase (Decrease)		Balance at 12/31/2013		Negative Equity Provision		Balance at 12/31/2013
						ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Electrogas S.A.	Associate	Chile	U.S. dollar		42.5000%		9,030,441		-		4,186,294		(5,080,897)		769,156		777,330		9,682,324		-	9,682,324
Endesa Brasil S.A.	Associate	Brazil	Brazilian real		38.6367%		574,168,681		-		94,402,624		(101,388,548)		(21,447,127)		(2,022,281)		543,713,349		-	543,713,349
GNL Quinteros S.A. (1)	Associate	Chile	U.S. dollar		20.0000%		-		-		4,914,871		(3,088,495)		36,052		7,922,262		9,784,690		(4,987,182)	4,797,508
GNL Chile S.A.	Associate	Chile	U.S. dollar		33.3300%		376,835		-		137,691		-		45,089		-		559,615		-	559,615
Endesa Cemsa S.A.	Associate	Argentina	Argentine peso		45.0000%		2,743,725		-		144,312		-		(487,934)		-		2,400,103		-	2,400,103
Distrilec Inversora S.A. (1) y (2)	Associate	Argentina	Argentine peso		0.8875%		-		-		490,902		-		7,572		(7,363)		491,111		(349,405)	141,706
Centrales Hidroeléctricas de Aysén S.A.	Joint venture	Chile	Chilean peso		51.0000%		66,894,760		5,084,698		(2,294,594)		-		-		-		69,684,864		-	69,684,864
Transmisora Eléctrica de Quillota Ltda.	Joint venture	Chile	Chilean peso		50.0000%		5,710,960		-		362,937		-		-		-		6,073,897		-	6,073,897
Inversiones Gas Atacama Holding Ltda.	Joint venture	Chile	U.S. dollar		50.0000%		96,207,755		-		17,002,146		-		10,418,066		-		123,627,967		-	123,627,967
					TOTAL		755,133,157		5,084,698		119,347,183		(109,557,940)		(10,659,126)		6,669,948		766,017,920		(5,336,587)	760,681,333
Changes in Investments in Associates	Relationship	Country	Currency	Ownership Interest		Balance at 1/1/2012		Additions		Share of Profit (Loss)		Dividends Declared		Foreign Currency Translation		Other Increase (Decrease)		Balance at 12/31/2012		Negative Equity Provision		Balance at 12/31/2012
						ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Electrogas S.A.	Associate	Chile	U.S. dollar		42.5000%		9,733,400		-		4,283,023		(4,186,063)		(761,847)		(38,072)		9,030,441		-	9,030,441
Endesa Brasil S.A.	Associate	Brazil	Brazilian real		40.4529%		569,012,759		-		107,503,620		(4,249,443)		(97,520,065)		(578,190)		574,168,681		-	574,168,681
GNL Quinteros S.A. (1)	Associate	Chile	U.S. dollar		20.0000%		-		-		5,198,419		(2,738,825)		644,605		782,465		3,886,664		(3,886,664)	-
GNL Chile S.A.	Associate	Chile	U.S. dollar		33.3300%		-		-		388,865		-		(5,373)		(6,657)		376,835		-	376,835
Endesa Cemsa S.A.	Associate	Argentina	Argentine peso		45.0000%		3,428,480		-		(24,718)		-		(660,005)		(32)		2,743,725		-	2,743,725
Distrilec Inversora S.A. (2)	Associate	Argentina	Argentine peso		0.8875%		24,209		-		(404,308)		-		31,531		(839)		(349,407)		349,407	-
Centrales Hidroeléctricas de Aysén S.A.	Joint venture	Chile	Chilean peso		51.0000%		60,050,165		7,140,000		(581,423)		-		-		286,018		66,894,760		-	66,894,760
Transmisora Eléctrica de Quillota Ltda.	Joint venture	Chile	Chilean peso		50.0000%		5,366,245		-		344,715		-		-		-		5,710,960		-	5,710,960
Inversiones Gas Atacama Holding Ltda.	Joint venture	Chile	U.S. dollar		50.0000%		84,810,956		-		18,304,801		-		(6,908,002)		-		96,207,755		-	96,207,755
					TOTAL		732,426,214		7,140,000		135,012,994		(11,174,331)		(105,179,156)		444,693		758,670,414		(3,537,257)	755,133,157

(1) Balances of negative equity reserves are presented in Other non-current financial liabilities.

(2) Significant influence is exercised through the Enersis (Endesa Chile’s parent) 51.5% ownership of Distrilec.

F-58

b) As of December 31, 2013, December 31, 2012, and January 1, 2012, no changes in ownership interest in our investment associates had occurred.

11.2 Additional financial information on investments in associated companies

The following tables show financial information as of December 31, 2013, December 31, 2012, and January 1, 2012 from the Financial Statements of the investments in associates where the Group has significant influence:

	December 31, 2013
Investments with Significant Influence	% Ownership Interest		Current Assets ThCh$		Non-current Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Revenues ThCh$		Expenses ThCh$		Profit (Loss) ThCh$
Endesa Cemsa S.A.		45.00%		31,020,655		838,347		26,525,440		-		2,162,235		(1,841,541)		320,694
Endesa Brasil S.A.		38.64%		828,001,927		2,190,312,917		507,172,891		806,219,181		1,871,470,844		(1,548,922,343)		322,548,501
Distrilec Inversora S.A.		0.89%		812,462		16,019,631		864,657		-		55,329,841		(14,799)		55,315,042
GNL Quintero S.A.		20.00%		88,131,062		566,951,431		34,063,764		597,031,096		100,431,648		(75,857,214)		24,574,434
Electrogas S.A.		42.50%		4,624,089		39,891,362		9,624,463		12,109,047		17,591,544		(7,741,439)		9,850,104
GNL Chile S.A.		33.33%		82,737,334		79,263		78,005,985		3,131,599		538,715,428		(538,302,314)		413,114
	December 31, 2012
Investments with Significant Influence	% Ownership   Interest		Current Assets     ThCh$		Non-current Assets     ThCh$		Current Liabilities     ThCh$		Non-current     Liabilities ThCh$		Revenues     ThCh$		Expenses     ThCh$		Profit (Loss)     ThCh$
Endesa Cemsa S.A.		45.00%		46,897,389		873,409		41,673,631		-		3,255,026		(3,309,953)		(54,929)
Endesa Brasil S.A.		40.45%		760,292,147		2,272,323,291		444,024,393		861,339,706		2,132,750,328		(1,754,354,455)		378,395,873
Distrilec Inversora S.A.		0.89%		965,234		-		1,013,028		39,323,517		-		(45,557,576)		(45,557,576)
GNL Quintero S.A.		20.00%		72,284,363		541,694,388		27,968,039		610,947,052		101,634,665		(75,642,607)		25,992,058
Electrogas S.A.		42.50%		2,488,996		38,787,769		7,935,168		12,093,501		18,509,416		(8,431,715)		10,077,701
GNL Chile S.A.		33.33%		82,659,263		117,782		78,867,051		2,779,376		863,830,524		(862,663,812)		1,166,712
	January 1, 2012
Investments with Significant Influence	% Ownership Interest		Current Assets ThCh$		Non-current Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Revenues ThCh$		Expenses ThCh$		Profit (Loss) ThCh$
Endesa Cemsa S.A.		45.00%		49,705,466		820,787		42,907,410		-		3,423,785		(2,868,957)		554,828
Endesa Brasil S.A.		40.45%		711,159,450		2,554,157,698		649,588,123		929,712,165		1,973,427,447		(1,585,844,382)		387,583,065
Distrilec Inversora S.A.		0.89%		1,198,471		2,767,981		1,238,424		-		-		(88,727,910)		(88,727,910)
GNL Quintero S.A.		20.00%		112,362,755		600,607,534		76,192,955		681,146,225		95,676,650		(75,397,751)		20,278,899
Electrogas S.A.		42.50%		2,688,608		44,772,738		9,510,888		15,048,487		17,218,630		(7,430,408)		9,788,222
GNL Chile S.A.		33.33%		89,649,829		420,708		87,166,091		2,924,702		850,177,561		(848,810,789)		1,366,772

None of our associates have published price quotations.

Appendix 3 to these consolidated financial statements provides information on the main activities of our associated companies and the ownership interest the Group holds in them.

- Additional information

i) Companhia de Interconexão Energética – CIEN

Companhia de Interconexão Energética (“CIEN”), a subsidiary of our associated company Endesa Brasil, was initially in the business of selling electricity in Argentina and Brazil. However, because of the reduction in the availability of power generation and physical guarantee of energy and its associated capacity, the Company has focused 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 Company and the Brazilian Government have jointly drawn up a new business plan model changing its selling activity to an electricity transmission activity with payment of a fixed compensation. This new plan involves integrating its transmission lines with the Brazilian transmission grid operated by the Brazilian government.

In previous periods, the Argentine and Uruguayan Governments formalized toll payments with the Company to transport 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. In addition, on June 4, 2010 the Company signed a new transmission contract for a six-month period for a total of US$155 million (app. ThCh$ 81,314,550) to cover the energy transmission required by the Argentine government.

F-59

Finally, on April 5, 2011, the Diario Oficial (The Official Gazette) published Portarías Ministeriales (Ministerial Decrees) 210/2011 and 211/2011 that equipped Companhia de Interconexao Energética, S.A. (CIEN) with a regulated interconnection line involving payment of a regulated toll. The Receita Anual Permitida (RAP), or income permitted annually, corresponded to 248 million Brazilian reals, to be adjusted according to the Broad National Consumer Price Index (IPCA) every year in June and with the rate to be reviewed every four years. The Line 1 concession lasts until June 2020 and the Line 2 concession until July 2022, with compensation provisions for non-amortized investments. This successfully concludes the change in CIEN’s business model that we had previously reported.

ii) Ampla and Coelce

On September 11, 2012, the Brazilian government issued Temporary Law 579, which became permanent on January 13, 2013 and directly affects companies holding electric power generation, transmission, and distribution concessions, including Ampla and Coelce (subsidiaries of our associated company Endesa Brasil). Among its provisions, this legislation establishes that the government, as concession grantor, will use the Valor Nuevo de Reemplazo (VNR, New Replacement Value) to make the corresponding indemnity payments to the concessionaires for those assets that have not been amortized at the end of the concession period.

As a result of this new development, our associate’s subsidiaries have changed how they value and classify the amounts they expect to recover in compensation when the concession period ends. The previous approach was based on the historic cost of the investments, and the rights to compensation were recorded as an account receivable. Now, however, they are valued on the basis of the VNR, and the compensation rights are classified as financial assets available for sale. Therefore, at the end of the last fiscal year, a new estimate was made of the amounts Ampla and Coelce expect to receive at the end of the concession period, and ThCh$112,274,835 was recorded as an increase to assets and financial income (ThCh$14,182,820 for Endesa Chile, recorded as participation in the earnings of associates accounted for using the equity method).

-       Restrictions on funds transfers from associated companies

Endesa Brasil must comply with certain financial ratios or covenants, which require a minimum level of equity, that restrict the transferring of assets to its owners. The Company’s ownership interest in Endesa Brasil’s restricted net assets as of December 31, 2013 totaled ThCh$108,669,927.

11.3  Additional information on investments in joint ventures

The following tables present information from the financial statements of the main companies with which Endesa Chile has joint ventures as of December 31, 2013, December 31, 2012, and January 1, 2012:

	December 31, 2013
	% Ownership   Interest	Current Assets ThCh$		Non-current Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Revenues ThCh$		Expenses ThCh$		Profit (Loss) ThCh$
Centrales Hidroeléctricas de Aysén S.A.	51.00%		9,596,488		131,270,190		4,049,634		180,059		-		(4,499,204)	(4,499,204)
Transmisora Eléctrica de Quillota Ltda.	50.00%		3,950,498		10,237,702		670,215		1,370,193		2,394,408		(1,668,535)	725,873
Inversiones Gas Atacama Holding Ltda.	50.00%		176,292,080		295,704,711		63,483,879		44,840,436		176,517,866		(142,513,575)	34,004,291
	December 31, 2012
	% Ownership   Interest	Current Assets ThCh$		Non-current Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Revenues ThCh$		Expenses ThCh$		Profit (Loss) ThCh$
Centrales Hidroeléctricas de Aysén S.A.	51.00%		10,081,574		127,061,491		5,728,373		248,465		-		(1,140,074)	(1,140,074)
Transmisora Eléctrica de Quillota Ltda.	50.00%		3,273,653		9,921,635		503,949		1,269,420		2,265,866		(1,576,437)	689,429
Inversiones Gas Atacama Holding Ltda.	50.00%		109,901,311		280,273,935		48,808,533		42,927,589		119,376,455		(82,726,987)	36,649,468
	January 1, 2012
	% Ownership   Interest	Current Assets ThCh$		Non-current Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Revenues ThCh$		Expenses ThCh$		Profit (Loss) ThCh$
Centrales Hidroeléctricas de Aysén S.A.	51.00%		10,250,367		115,878,802		7,348,428		1,035,256		-		(4,664,851)	(4,664,851)
Transmisora Eléctrica de Quillota Ltda.	50.00%		1,463,786		10,533,846		298,164		966,978		2,310,668		(1,632,824)	677,844
Inversiones Gas Atacama Holding Ltda.	50.00%		93,103,848		314,752,350		77,452,973		45,808,413		260,889,567		(225,125,891)	35,763,676

F-60

- Additional information

i) Gas Atacama:

Among the assets of Gas Atacama, a company in which Endesa Chile holds a 50% interest, is a combined cycle power generation plant in the north of Chile. Since it has been impossible to import natural gas from neighboring countries, Gas Atacama has been forced to generate electricity using other fuels, whose cost increased sharply in the last few months of 2007 due to higher oil prices. Consequently, the Company filed lawsuits in order to get early termination of the agreement it has with the distributing company Emel. On January 25, 2008, the arbitration ruling denied early termination of the agreement. This situation significantly decreased the recoverable value of that plant, and a loss provision for impairment for US$110 million was recognized as of December 31, 2007.

12.  INTANGIBLE ASSETS OTHER THAN GOODWILL

Intangible assets as of December 31, 2013, December 31, 2012, and January 1, 2012 are detailed as follows:

Intangible Assets, Net	12-31-2013             ThCh$		12-31-2012             ThCh$		01-01-2012             ThCh$
Identifiable Intangible Assets, Net		56,048,545		55,752,625	45,528,291
Development costs		7,365,667		6,254,623	5,376,265
Easements and water rights		28,962,374		29,572,872	19,925,736
Concessions (1)		7,247,556		9,728,025	12,152,979
Patents, registered trademarks, and other rights		1,824,734		1,482,187	221,420
Computer software		7,876,555		5,943,571	4,772,198
Other identifiable intangible assets		2,771,659		2,771,347	3,079,693
Intangible Assets, Gross	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Identifiable Intangible Assets, Gross		111,708,387		107,765,140	91,977,523
Development costs		7,427,040		6,299,973	5,659,810
Easements and water rights		34,833,865		34,759,360	24,700,484
Concessions (1)		40,203,523		40,142,065	40,156,864
Patents, registered trademarks, and other rights		2,578,733		1,798,218	486,497
Computer software		18,596,553		16,329,438	14,889,444
Other identifiable intangible assets		8,068,673		8,436,086	6,084,424
Accumulated Amortization and Impairment	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Accumulated Amortization and Impairment		(55,659,842)		(52,012,515)	(46,449,232)
Development costs		(61,373)		(45,350)	(283,545)
Easements and water rights		(5,871,491)		(5,186,488)	(4,774,748)
Concessions (1)		(32,955,967)		(30,414,040)	(28,003,885)
Patents, registered trademarks, and other rights		(753,999)		(316,031)	(265,077)
Computer software		(10,719,998)		(10,385,867)	(10,117,246)
Other identifiable intangible assets		(5,297,014)		(5,664,739)	(3,004,731)

F-61

(1)  The detail of net concessions is the following:

Concession Holder	Country	Term of   Concession	Period to   Expiration	12-31-2013   ThCh$		12-31-2012   ThCh$		01-01-2012   ThCh$
Soc. Concesionaria Túnel El Melón S.A. (Infraestructura Vial) (*)	Chile	23 years	2.5 years		7,247,556		9,728,025		12,152,979

(*) See Note 3.c.1.

The reconciliation of the carrying amounts of intangible assets during the 2013 and 2012 fiscal years is as follows:

Changes in Intangible Assets	Development Costs		Easements and Water Rights		Concessions		Patents, Registered Trademarks, and Other Rights		Computer Software		Other Identifiable Intangible Assets, Net		Intangible Assets, Net
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Opening balance at January 1, 2013		6,254,623		29,572,872		9,728,025		1,482,187		5,943,571		2,771,347		55,752,625
Changes in identifiable intangible assets
Additions		1,365,305		(1,547)		-		335,933		2,583,972		-		4,283,663
Disposals		(173,662)		-		-		-		(609)		-		(174,271)
Amortization (*)		(15,449)		(651,701)		(2,540,627)		(425,669)		(317,199)		(9,364)		(3,960,009)
Increase (decrease) from foreign exchange difference		51,063		42,387		1,927		14,118		3,033		10,039		122,567
Other increases (decreases)		(116,213)		363		58,231		418,165		(336,213)		(363)		23,970
Total changes in identifiable intangible assets		1,111,044		(610,498)		(2,480,469)		342,547		1,932,984		312		295,920
Closing balance in intangible assets at 12/31/2013		7,365,667		28,962,374		7,247,556		1,824,734		7,876,555		2,771,659		56,048,545
(*) See Note 26, Depreciation and Amortization.
Changes in Intangible Assets	Development Costs		Easements and Water Rights		Concessions		Patents, Registered Trademarks, and Other Rights		Computer Software		Other Identifiable Intangible Assets, Net		Intangible Assets, Net
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Opening balance at 1/1/2012		5,376,265		19,925,736		12,152,979		221,420		4,772,198		3,079,693		45,528,291
Changes in identifiable intangible assets
Additions		3,117,101		727,244		-		458,044		10,522,845		25,162		14,850,396
Disposals		(1,081,543)		-		-		-		(2,322)		-		(1,083,865)
Amortization (*)		(39,527)		(378,740)		(2,426,638)		(47,358)		(306,896)		(438,025)		(3,637,184)
Increase (decrease) from foreign exchange difference		72,086		329,180		1,683		5,811		403		40,279		449,442
Other increases (decreases)		(1,189,759)		8,969,452		1		844,270		(9,042,657)		64,238		(354,455)
Total changes in identifiable intangible assets		878,358		9,647,136		(2,424,954)		1,260,767		1,171,373		(308,346)		10,224,334
Closing balance in intangible assets at 12/31/2012		6,254,623		29,572,872		9,728,025		1,482,187		5,943,571		2,771,347		55,752,625

(*) See Note 26, Depreciation and Amortization.

According to the Group management’s estimates and projections, the expected future cash flows attributable to intangible assets allow recovery of the carrying amount of these assets recorded as of December 31, 2013 (see Note 3.d).

As of December 31, 2013, December 31, 2012, and January 1, 2012, the Company does not have significant intangible assets with an indefinite useful life.

F-62

13.  GOODWILL

The following table shows goodwill by the Cash-Generating Unit or group of Cash-Generating Units to which it belongs and changes as of December 31, 2013, December 31, 2012, and January 1, 2012:

Company	Opening Balance     1/1/2013		Mergers		Foreign Currency     Translation		Closing Balance     12/31/2013
	ThCh$		ThCh$		ThCh$		ThCh$
Hidroeléctrica El Chocón S.A.		10,345,927		-		(1,780,725)		8,565,202
Compañía Eléctrica San Isidro S.A. (**)		4,656,105		(4,656,105)		-		-
Cía. Eléctrica Tarapacá S.A. (**)		-		4,656,105		-		4,656,105
Edegel S.A.A.		81,550,712		-		110,423		81,661,135
Emgesa S.A.E.S.P.		5,194,342		-		19,414		5,213,756
Total		101,747,086		-		(1,650,888)		100,096,198
Company	Opening Balance 1/1/2012		Mergers		Foreign Currency Translation		Closing Balance 12/31/2012
	ThCh$		ThCh$		ThCh$		ThCh$
Empresa Eléctrica Pangue S.A. (*)		3,139,337		(3,139,337)		-		-
Hidroeléctrica El Chocón S.A.		12,822,659		-		(2,476,732)		10,345,927
Compañía Eléctrica San Isidro S.A. (*)		1,516,768		3,139,337		-		4,656,105
Edegel S.A.A.		83,779,596		-		(2,228,884)		81,550,712
Emgesa S.A.E.S.P.		5,126,657		-		67,685		5,194,342
Total		106,385,017		-		(4,637,931)		101,747,086

(*) Empresa Eléctrica Pangue S.A. was merged with Compañía Eléctrica San Isidro S.A. on May 1, 2012; it is the latter company that legally continues to exist.

(**) Compañía Eléctrica San Isidro S.A. was merged with Endesa Eco S.A. on September 1, 2013; it is the latter company that legally continues to exist. Endesa Eco S.A. was merged with Compañía Eléctrica Tarapacá S.A. on November 1, 2013; it is the latter company that legally continues to exist.

The origin of the goodwill is detailed below:

1. Empresa Eléctrica Pangue S.A.

On July 12, 2002, Endesa Chile acquired 2.51% of the shares of Empresa Eléctrica Pangue S.A. through a put option held by the minority shareholder Internacional Finance Corporation (IFC).

2. Hidroeléctrica el Chocón S.A.

On August 31, 1993, Endesa Chile acquired 59% of Hidroeléctrica El Chocón in an international public bidding process held by the Argentine government.

3. Compañía Eléctrica San Isidro S.A.

On August 11, 2005, Endesa Chile bought the shares of the company Inversiones Lo Venecia Ltda., whose only asset was a 25% interest in the company San Isidro S.A.

4. Edegel S.A.A.

On October 9, 2009, in a transaction on the Lima Stock Exchange in Peru, Endesa Chile acquired an additional 29.3974% interest in Edegel S.A.

5. Emgesa S.A.E.S.P.

On October 23, 1997, Endesa Chile, together with Endesa España., bought 48.5% of Generadora de Electricidad Emgesa de Santa Fé de Bogotá in Colombia. The purchase was made in an international public bidding process held by the Colombian government.

According to the Endesa Chile management’s estimates and projections, the expected future cash flows projections attributable to the Cash-Generating Units or groups of Cash-Generating Units, to which the acquired goodwill has been allocated, allow recovery of its carrying value as of December 31, 2013 and December 31, 2012 (see Note 3.b).

F-63

14.  PROPERTY, PLANT, AND EQUIPMENT

a) Property, plant, and equipment as of December 31, 2013, December 31, 2012, and January 1, 2012:

Classes of Property, Plant, and Equipment, Net	12-31-2013             ThCh$		12-31-2012             ThCh$		01-01-2012             ThCh$
Property, Plant, and Equipment, Net		4,692,288,945		4,515,242,392		4,451,020,122
Construction in progress		870,787,402		577,918,459		804,735,394
Land		56,927,135		57,740,580		51,596,797
Buildings		20,737,186		20,349,421		21,207,831
Plant and equipment		3,706,325,553		3,820,223,098		3,538,116,315
Fixtures and fittings		15,585,705		16,230,612		11,540,105
Other		21,925,964		22,780,222		23,823,680
Classes of Property, Plant, and Equipment, Gross	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Property, Plant, and Equipment, Gross		8,102,848,577		7,851,878,297		7,708,750,074
Construction in progress		870,787,402		577,918,459		804,735,394
Land		56,927,135		57,740,580		51,596,797
Buildings		36,365,813		35,374,273		34,553,797
Plant and equipment		7,054,711,195		7,101,159,979		6,738,150,311
Fixtures and fittings		55,297,001		50,924,975		50,232,946
Other		28,760,031		28,760,031		29,480,829
Classes of Accumulated Depreciation and Impairment in Property, Plant, and Equipment	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Total accumulated depreciation and impairment in property, plant, and equipment		(3,410,559,632)		(3,336,635,905)		(3,257,729,952)
Buildings		(15,628,627)		(15,024,852)		(13,345,966)
Plant and equipment		(3,348,385,642)		(3,280,936,881)		(3,200,033,996)
Fixtures and fittings		(39,711,296)		(34,694,363)		(38,692,841)
Other		(6,834,067)		(5,979,809)		(5,657,149)

b) The detail of, and changes in, property, plant, and equipment during the 2013 and the 2012 fiscal years are as follows:

Changes in 2013		Construction in   Progress ThCh$		Land ThCh$		Buildings, Net ThCh$		Plant and Equipment, Net ThCh$		Fixtures and Fittings, Net ThCh$		Other Property, Plant, and Equipment, Net ThCh$		Property, Plant, and Equipment, Net ThCh$
Opening Balance at January 1, 2013			577,918,459		57,740,580		20,349,421		3,820,223,098		16,230,612		22,780,222	4,515,242,392
	Additions		386,015,474		-		22,103		1,058,912		575,244		-	387,671,733
	Disposals		(547,205)		(751,843)		-		(3,765,956)		(16,072)		-	(5,081,076)
	Depreciation Expense		-		-		(1,276,214)		(180,762,512)		(2,842,346)		(854,258)	(185,735,330)
	Impairment losses recognized in profit or loss (*)		-		-		-		(6,599,318)		-		-	(6,599,318)
	Foreign currency translation differences		1,013,731		57,138		65,224		(14,132,562)		(153,197)		-	(13,149,666)
	Other increases (decreases)		(93,613,057)		(118,740)		1,576,652		90,303,891		1,791,464		-	(59,790)
	Total changes		292,868,943		(813,445)		387,765		(113,897,545)		(644,907)		(854,258)	177,046,553
Closing balance at December 31, 2013			870,787,402		56,927,135		20,737,186		3,706,325,553		15,585,705		21,925,964	4,692,288,945
Changes in 2012		Construction in   Progress ThCh$		Land ThCh$		Buildings, Net ThCh$		Plant and Equipment, Net ThCh$		Fixtures and Fittings, Net ThCh$		Other Property, Plant, and Equipment, Net ThCh$		Property, Plant, and Equipment, Net ThCh$
Opening Balance at January 1, 2012			804,735,394		51,596,797		21,207,831		3,538,116,315		11,540,105		23,823,680	4,451,020,122
	Additions		267,598,180		-		-		16,170,937		1,108,956		-	284,878,073
	Disposals		(7,976)		(213,187)		-		(115,797)		(90,100)		-	(427,060)
	Depreciation expense		-		-		(1,124,692)		(176,676,009)		(2,275,853)		(854,259)	(180,930,813)
	Impairment losses recognized in profit or loss (*)		-		-		-		(12,578,098)		-		-	(12,578,098)
	Foreign currency translation differences		(1,201,357)		66,619		93,634		(30,884,746)		(125,817)		-	(32,051,667)
	Other increases (decreases)		(493,205,782)		6,290,351		172,648		486,190,496		6,073,321		(189,199)	5,331,835
	Total changes		(226,816,935)		6,143,783		(858,410)		282,106,783		4,690,507		(1,043,458)	64,222,270
Closing balance at December 31, 2012			577,918,459		57,740,580		20,349,421		3,820,223,098		16,230,612		22,780,222	4,515,242,392

(*) See Note 26, Depreciation and Amortization.

F-64

Major additions to property, plant and equipment are investments in operating plants and new projects by ThCh$353,533,733 in 2013 (ThCh$ 281,703,466 in 2012). Highlights the progress in the construction of the Central Hydraulics El Quimbo in Colombia (400 MW), involving additions in 2013 by ThCh$ 150,262,546 (ThCh$ 174,261,499 in 2012).

c) Main investments

Material investments in the electricity generation business include developments in the program to create new capacity.

In Colombia, the Central Hidráulica El Quimbo, a hydroelectric dam with 400W of installed capacity and an average annual generation of some 2,216 GWh, is currently under construction.

d) Finance leases

As of December 31, 2013, December 31, 2012, and January 1, 2012, property, plant, and equipment includes ThCh$57,721,214, ThCh$118,407,864, and ThCh$130,228,889, respectively, in leased assets classified as finance leases.

The present value of future lease payments derived from these finance leases is as follows:

	12-31-2013						12-31-2012						01-01-2012
	Gross ThCh$		Interest ThCh$		Present Value ThCh$		Gross ThCh$		Interest ThCh$		Present Value ThCh$		Gross ThCh$		Interest ThCh$		Present Value ThCh$
Less than one year		8,070,754		1,542,836		6,527,918		7,446,617		1,578,558		5,868,059		11,212,425		2,033,642	9,178,783
From one to five years		35,600,427		3,914,413		31,686,013		37,900,651		3,880,045		34,020,606		35,645,470		5,821,408	29,824,062
More than five years		12,129,432		1,198,490		10,930,942		13,016,926		2,211,594		10,805,332		27,619,488		2,457,926	25,161,562
Total		55,800,613		6,655,739		49,144,873		58,364,194		7,670,197		50,693,997		74,477,383		10,312,976	64,164,407

Leasing assets primarily relate to:

1. Endesa Chile S.A.: a lease agreement for Electric Transmission Lines and Installations (Ralco-Charrúa 2X220 KV) entered into between Endesa Chile and Abengoa Chile S.A. The lease agreement has a 20-year maturity and bears interest at an annual rate of 6.5%.

2. Edegel S.A.: lease agreements to finance the project of converting the Ventanilla thermoelectric plant to a combined cycle plant. The agreements were signed between Edegel S.A.A. and the financial institutions BBVA - Banco Continental, Banco de Crédito del Perú, Citibank del Peru, and Banco Internacional del Peru - Interbank. These agreements have an average term of 8 years and bear interest at an annual rate of Libor + 1.75%, Libor + 2.5%, and Libor + 2.5% as of December 31, 2013, December 31, 2012, and January 1, 2012, respectively.

The company also has an agreement with Scotiabank, which financed the construction of a new open cycle plant at the Santa Rosa Plant. This agreement has a term of 9 years and bears interest an annual rate of Libor + 1.75%.

e) Operating leases

As of December 31, 2013, December 31, 2012, and January 1, 2012, the total future lease payments under those contracts are as follows:

	12-31-2013             ThCh$		12-31-2012              ThCh$		01-01-2012              ThCh$
Less than one year		1,881,393		1,842,470		273,826
From one to five years		7,863,950		7,747,262		1,084,081
More than five years		9,381,984		9,193,709		16,307,666
Total		19,127,327		18,783,441		17,665,573

F-65

f) Other information

1. As of December 31, 2013, December 31, 2012, and January 1, 2012, Endesa Chile had contractual commitments for the acquisition of property, plant, and equipment amounting to ThCh$2,947,284, ThCh$11,775,412, and ThCh$104,286,787, respectively.

2. As of December 31, 2013, December 31, 2012, and January 1, 2012, the Group had property, plant, and equipment pledged as security for liabilities in the amount of ThCh$35,100,296, ThCh$57,129,918, and ThCh$154,141,593, respectively (see Note 32).

3. The Company and its national and foreign subsidiaries have insurance policies for all risks, earthquake, machinery breakdown and damages for business interruption with a US$500 million limit. The premiums associated with these policies are presented proportionally for each company under the line item “Other non-financial current assets”.

4. The situation of certain assets has changed, primarily works and infrastructure for facilities built to support power generation in the SIC grid in 1998, due primarily to the installation in the SIC of new thermoelectric plants, the arrival of LNG, and new projects that will be starting up soon. This has resulted in a new supply configuration for the coming years, in which it is expected that these facilities will not need to be used. Therefore, in the 2009 fiscal year, the Company recorded an impairment provision of ThCh$43,999,600 for these assets, which continues in effect.

5. As a result of the February 27, 2010 earthquake in Chile, some of our Company’s plant and equipment were partially or totally impaired. The impact on our total assets, however, is minor as the only facilities that suffered some damage in infrastructure were the Bocamina I and Bocamina II plants.

Due to these impairments, ThCh$369,643 in assets were written down in the 2010 fiscal year. Additionally, the Company had to incur expenditures related to repair and capital improvements totaling ThCh$9,733,426, primarily at the Bocamina I plant. All of the disbursements incurred were covered by insurance.

Endesa Chile has the necessary insurance coverage for these types of exceptional claims, covering material damage as well as business interruption.

6. On October 16, 2012, Endesa Chile began the collection process on all of the bank performance bonds guaranteeing compliance with the works and correct, timely execution of these works as specified in the agreement “Bocamina Thermal Plant Expansion Project”, contract ACP-003.06. This is a turnkey project for a 350 MW coal-fired thermal generation plant (“the contract”) signed on July 25, 2007 between Empresa Nacional de Electricidad S.A. (“the owner”) and the consortium consisting of (i) the Chilean company Ingeniería y Construcción Tecnimont Chile y Compañía Limitada; (ii) the Italian company Tecnimont SpA; (iii) the Brazilian company Tecnimont do Brasil Construcao e Administracao de Projetos Ltda; (iv) the Slovakian company Slovenske Energeticke Strojarne a.s. (“SES”); and (v) the Chilean company Ingeniería y Construcción SES Chile Limitada; (all referred to collectively as “the Contractor” or “the Consortium”).

These performance bonds total US$74,795,164.44 and UF796,594.29 (approximately US$38,200,000). The amount actually collected on the bonds as of December 31, 2012 was US$93,996,585.73 (app. ThCh$ 49,311,549), with a pending balance still to be collected of US$18,940,294.84 (app. ThCh$ 9,936,268).

Collection made on these bank performance bonds reduced the cost overruns incurred by the company due to breach of contract; they were capitalized into the Project.

Together collecting on the bonds, Endesa Chile has reserved all of the rights conferred upon it under the Contract and applicable national legislation to demand complete, timely compliance with the obligations agreed to by the Contractor.

On October 17, 2012, Endesa Chile filed an arbitration request with the International Chamber of Arbitration of Paris in order to enforce the rights conferred upon it under the Contract.

F-66

7. At the end of the 2012 fiscal year, our subsidiary Compañía Eléctrica Tarapacá S.A. recorded an impairment loss for ThCh$12,578,098 to adjust the book value of its Properties, plants, and equipment to their recoverable value (see Note 3.d).

15.  DEFERRED TAXES

a)  The origin and changes in deferred tax assets and liabilities at December 31, 2013, December 31, 2012, and January 1, 2012 are as follows:

Deferred Tax Assets		Deferred Tax Assets Relating to												Deferred Tax Assets
		Depreciation		Provisions		Post- Employment Benefit Obligations		Revaluation of Financial Instruments		Tax Losses		Other
Opening Balance at January 1, 2013			47,982,561		3,868,511		471,979		-		8,368,959		1,109,261	61,801,271
	Increase (decrease) in profit or loss		(1,213,098)		597,078		(515,971)		-		(9,824,726)		(1,398,992)	(12,355,709)
	Increase (decrease) in comprehensive income		(418,615)		-		708,258				-		-	289,643
	Foreign currency translation		128,591		12,459		(954)		559		-		(96,200)	44,455
	Other increase (decrease)		(2,140,957)		(448,487)		(296,335)		(559)		2,906,228		2,065,912	2,085,802
Closing balance at December 31, 2013			44,338,482		4,029,561		366,977		-		1,450,461		1,679,981	51,865,462
Deferred Tax Assets		Deferred Tax Assets Relating to												Deferred Tax Assets
		Depreciation		Provisions		Post- Employment Benefit Obligations		Revaluation of Financial Instruments		Tax Losses		Other
Opening Balance at January 1, 2012			57,236,950		14,131,103		761,989		-		-		14,022,548	86,152,590
	Increase (decrease) in profit or loss		557,565		(2,696,788)		(512,482)		-		557,746		6,427,649	4,333,690
	Increase (decrease) in comprehensive income		-		-		39,792		(65,408)		-		158,459	132,843
	Foreign currency translation		1,484,899		(162,132)		(26,059)		(64,360)		-		(749,689)	482,659
	Other increase (decrease)		(11,296,853)		(7,403,672)		208,739		129,768		7,811,213		(18,749,706)	(29,300,511)
Closing balance at December 31, 2012			47,982,561		3,868,511		471,979		-		8,368,959		1,109,261	61,801,271

Deferred Tax Liabilities		Deferred Tax Liabilities Relating to										Deferred Tax  Liabilities
		Depreciation		Provisions		Post- Employment Benefit    Obligations		Revaluation of  Financial Instruments		Other
Opening Balance at January 1, 2013			304,780,129		-		-		5,380,041		10,116,930	320,277,100
	Increase (decrease) in profit or loss		(16,864,406)		20,099		(10,491)		937,186		963,333	(14,954,279)
	Increase (decrease) in comprehensive income		-		-		2,359		(2,213,576)		(61,684)	(2,272,901)
	Foreign currency translation		(455,085)		498		-		575		(1,817,043)	(2,271,055)
	Other increase (decrease)		3,195,588		(375)		8,132		(97)		1,707,407	4,910,655
Closing balance at December 31, 2013			290,656,226		20,222		-		4,104,129		10,908,943	305,689,520
Deferred Tax Liabilities		Deferred Tax Liabilities Relating to										Deferred Tax  Liabilities
		Depreciation		Provisions		Post- Employment Benefit    Obligations		Revaluation of  Financial Instruments		Other
Opening Balance at January 1, 2012			304,886,153		-		-		880,379		15,744,394	321,510,926
	Increase (decrease) in profit or loss		30,876,871		-		10,917		1,352,762		(792,125)	31,448,425
	Increase (decrease) in comprehensive income		-		-		-		3,146,856		234	3,147,090
	Foreign currency translation		(4,525,633)		-		-		2,760		(1,903,678)	(6,426,551)
	Other increase (decrease)		(26,457,262)		-		(10,917)		(2,716)		(2,931,895)	(29,402,790)
Closing balance at December 31, 2012			304,780,129		-		-		5,380,041		10,116,930	320,277,100

Recovery of deferred tax assets will depend on whether sufficient tax profits are obtained in the future. The Company believes that the future profit projections for its numerous subsidiaries will allow these assets to be recovered.

b)  As of December 31, 2013, December 31, 2012, and January 1, 2012, the Group has not recognized deferred tax assets related to tax losses totaling ThCh$20,174,721, ThCh$25,935,861, and ThCh$5,466,208, respectively (see Note 3.m).

F-67

Endesa Chile has not recognized deferred tax liabilities for taxable temporary differences associated with investment in subsidiaries and joint ventures, as it is able to control the timing of the reversal of the temporary differences and considers that it is probable that such temporary differences will not reverse in the foreseeable future. The aggregate amount of taxable temporary differences associated with investments in subsidiaries and joint ventures for which deferred tax liabilities have not been recognized totaled ThCh$410,670,845 as of December 31, 2013 (ThCh$517,045,248 and ThCh$210,035,161 at December 31, 2012 and January 1, 2012, respectively).

The Group companies are potentially subject to income tax audits by the tax authorities of each country in which the Group operates. Such tax audits are limited to a number of annual tax periods and once these have expired audits of these periods can no longer be performed. Tax audits by nature are often complex and can require several years to complete. The following table presents a summary of tax periods potentially subject to examination:

Country	Period
Chile	2008-2013
Argentina	2008-2013
Brazil	2008-2013
Colombia	2011-2013
Peru	2009-2013

Given the range of possible interpretations of tax standards, the results of any future inspections carried out by tax authorities for the years subject to audit can give rise to tax liabilities that cannot currently be quantified objectively. Nevertheless, Endesa Chile Management estimates that the liabilities, if any, that may arise from such audits, would not significantly impact the companies’ future results.

The effects of deferred tax on the components of Other comprehensive income are as follows:

Effects of Deferred Tax on the Components of Other Comprehensive Income	December 31, 2013						December 31, 2012						December 31, 2011
	Amount Before   Tax ThCh$		Income Tax   Expense (Benefit) ThCh$		Amount After   Tax ThCh$		Amount Before   Tax ThCh$		Income Tax   Expense (Benefit) ThCh$		Amount After   Tax ThCh$		Amount   Before Tax   ThCh$		Income Tax   Expense (Benefit) ThCh$		Amount After       Tax   ThCh$
Available-for-sale financial assets		109		(22)		87		581		(235)		346		(55,554)		9,444	(46,110)
Cash flow hedge		(80,955,947)		14,235,483		(66,720,464)		51,904,650		(19,893,304)		32,011,346		(82,990,326)		17,363,818	(65,626,508)
Foreign currency translation		(18,023,501)		-		(18,023,501)		(126,559,183)		-		(126,559,183)		148,560,224		-	148,560,224
Adjustments from associated companies and joint ventures		10,923,982		-		10,923,982		158,675		-		158,675		(22,722,630)		-	(22,722,630)
Actuarial income on defined-benefit pension plans		(3,618,423)		990,340		(2,628,083)		(4,355,055)		801,138		(3,553,917)		(3,275,638)		537,200	(2,738,438)
Income tax related to components of other income and expenses debited or credited to Equity		(91,673,780)		15,225,801		(76,447,979)		(78,850,332)		(19,092,401)		(97,942,733)		39,516,076		17,910,462	57,426,538

F-68

16.  OTHER FINANCIAL LIABILITIES

The balance of other financial liabilities as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

Other Financial Liabilities	December 31, 2013				December 31, 2012				January 1, 2012
	Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$
Interest-bearing loans		349,285,334		1,535,382,432		403,037,101		1,513,616,717		290,808,945		1,712,294,737
Hedging derivatives (*)		1,590,779		900,927		975,089		5,007,665		184,042		6,555,571
Non-hedging derivatives (**)		164,983		-		-		-		-		-
Other financial liabilities		2,692,425		4,479,250		2,442,846		7,027,436		3,307,030		9,243,595
Total		353,733,521		1,540,762,609		406,455,036		1,525,651,818		294,300,017		1,728,093,903

 (*) See Note 18.2a.

(**) See Note 18.2b.

Interest-bearing borrowings

 1. The detail of short- and long-term interest-bearing borrowings as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

Classes of Loans that Accrue Interest	December 31, 2013				December 31, 2012				January 1, 2012
	Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$
Bank loans		139,167,439		144,138,738		44,905,191		244,038,846		145,464,457		194,087,333
Unsecured obligations		96,158,257		1,346,203,508		255,588,166		1,214,433,002		83,118,154		1,403,000,187
Secured obligations		4,828,233		-		4,880,687		4,689,387		10,660,476		9,635,108
Finance leases		6,527,918		42,616,954		5,868,059		44,825,938		9,178,783		54,985,624
Other loans		102,603,487		2,423,232		91,794,998		5,629,544		42,387,075		50,586,485
Total		349,285,334		1,535,382,432		403,037,101		1,513,616,717		290,808,945		1,712,294,737

 2. Bank loans by currency and contractual maturity as of December 31, 2013, December 31, 2012, and January 1, 2012 are as follows:

       -    Summary of bank loans by currency and contractual maturity

The fair value of current and non-current bank borrowings as of December 31, 2013 totaled ThCh$257,150,881 (ThCh$284,110,737 and ThCh$332,248,376 as of December 31, 2012 and January 1, 2012, respectively).

Country	Currency	Amortization	Effective   Interest   Rate		Nominal   Interest Rate		Secured/   Unsecured	Current						Non-current
								Maturity				Total current  at 12/31/2013		Maturity						Total Non- current at 12/31/2013 ThCh$
								One to three   months ThCh$		Three to twelve   months ThCh$				One to three years ThCh$		Three to five     years ThCh$		More than   five years ThCh$
Chile	US$	Semi-annually		2.33%		1.77%	Unsecured		403,872		106,087,194		106,491,066		858,299		-		-	858,299
Chile	CH$	Semi-annually		6.00%		6.00%	Unsecured		-		176		176		-		-		-	-
Peru	US$	Quarterly		2.81%		2.78%	Unsecured		2,676,462		2,785,037		5,461,499		22,038,803		27,745,371		-	49,784,174
Argentina	US$	Semi-annually		9.59%		9.31%	Unsecured		6,425,910		4,853,256		11,279,166		1,617,752		-		-	1,617,752
Argentina	Ar$	Semi-annually		31.73%		28.22%	Unsecured		13,579,212		2,168,081		15,747,293		8,913,225		-		-	8,913,225
Colombia	CP	Semi-annually		6.95%		6.84%	Unsecured		-		188,239		188,239		-		-		82,965,288	82,965,288
							Total		23,085,456		116,081,983		139,167,439		33,428,079		27,745,371		82,965,288	144,138,738
Country	Currency	Amortization	Effective Interest Rate		Nominal Interest Rate		Secured/ Unsecured	Current						Non-current
								Maturity				Total current at 12/31/2012 ThCh$		Maturity						Total Non- current at 12/31/2012 ThCh$
								One to three months ThCh$		Three to twelve months ThCh$				One to three years ThCh$		Three to five years ThCh$		More than five years ThCh$
Chile	US$	Semi-annually				1.76%	Unsecured		354,739		1,191,983		1,546,722		97,967,390		-		-	97,967,390
Chile	CH$	Semi-annually				6.00%	Unsecured		277		-		277		-		-		-	-
Peru	US$	Quarterly				3.49%	Unsecured		1,806,758		444,835		2,251,593		10,632,998		25,699,999		12,010,552	48,343,549
Argentina	US$	Semi-annually				8.91%	Unsecured		7,214,852		4,421,192		11,636,044		7,368,666		-		-	7,368,666
Argentina	Ar$	Semi-annually				21.63%	Unsecured		18,788,048		8,972,376		27,760,424		7,702,892		-		-	7,702,892
Colombia	CP	Semi-annually				9.20%	Unsecured		1,710,131		-		1,710,131		-		82,656,349		-	82,656,349
							Total		29,874,805		15,030,386		44,905,191		123,671,946		108,356,348		12,010,552	244,038,846

F-69

							Current						Non-current
							Maturity						Maturity
Country	Currency	Amortization	Effective        Interest  Rate	Nominal     Interest     Rate		Secured/ Unsecured	One to three months ThCh$		Three to twelve   months ThCh$		Total current at    1/1/2012 ThCh$		One to three  years ThCh$		Three to five     years ThCh$		More than five   years ThCh$		Total Non-           current at         1/1/2012         ThCh$
Chile	US$	Semi-annually			2.83%	Unsecured		84,500		1,607,710		1,692,210		106,555,130		849,449		-		107,404,579
Peru	US$	Quarterly			3.44%	Unsecured		2,354,628		8,838,878		11,193,506		4,296,544		19,212,039		26,158,087		49,666,670
Peru	Sol	Quarterly			3.85%	Unsecured		3,068		1,541,618		1,544,686		-		-		-		-
Argentina	US$	Semi-annually			5.10%	Unsecured		494,597		6,393,975		6,888,572		17,983,101		1,598,484		-		19,581,585
Argentina	Ar$	Semi-annually			17.66%	Unsecured		28,051,669		9,299,019		37,350,688		15,020,415		2,414,084		-		17,434,499
Colombia	CP	Semi-annually			6.48%	Unsecured		-		86,794,795		86,794,795		-		-		-		-
						Total		30,988,462		114,475,995		145,464,457		143,855,190		24,074,056		26,158,087		194,087,333

F-70

-     Identification of Bank Borrowings by Company

Taxpayer ID   No. (RUT)	Company	Country	ID No. Financial Institution	Financial Institution	Country	Currency	Effective Interest Rate	Nominal Interest Rate	Amortization	12-2013
										Current						Non-current
										Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		Five to ten years		More than ten years
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol	3.85%	3.80%	At maturity		-		-		-		-		-		-	-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Scotiabank	Peru	US$	4.02%	3.96%	Quarterly		228,354		488,235		716,589		1,301,959		13,833,314		-	-
Foreign	Chinango S.A.C.	Peru	Foreign	Bank Of Nova Scotia	Peru	US$	3.05%	3.01%	Quarterly		348,176		984,344		1,332,520		2,624,917		1,312,456		-	-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Scotiabank	Peru	US$	0.76%	0.78%	At maturity		2,099,932				2,099,932						-	-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	3.42%	3.38%	Quarterly		-		1,312,458		1,312,458		18,111,927		12,599,601		-	-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$	3.45%	3.41%	Quarterly		-		-		-		-		-		-	-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	2.99%	2.96%	At maturity		-		-		-		-		-		-	-
Foreign	Edegel S.A.A	Peru	Foreign	Banco de Crédito	Peru	US$	1.65%	1.65%	At maturity		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	AV VILLAS	Colombia	CP	8.44%	8.27%	At maturity		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Banco Davivienda	Colombia	CP	8.15%	7.91%	Yearly		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Banco Santander	Colombia	CP	8.15%	7.91%	Yearly		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Bancolombia	Colombia	CP	8.44%	8.27%	At maturity		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Bancolombia	Colombia	CP	8.44%	8.27%	At maturity		-		-		-		-		-		-	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	BBVA Colombia	Colombia	CP	6.89%	6.78%	At maturity		-		138,223		138,223		-		-		61,203,901	-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Banco Corpbanca	Colombia	CP	7.01%	6.90%	At maturity		-		50,016		50,016		-		-		21,761,387	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	B.N.P. Paribas	USA	US$	6.32%	5.98%	Semi-annually		-		883,679		883,679		858,299		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile	Chile	US$	1.69%	1.01%	At maturity		-		17,296,605		17,296,605		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile (Credit Line)	Chile	Ch$	6.00%	6.00%	At maturity		-		176		176		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Export Development Corpotation Loan	USA	US$	1.57%	1.40%	Semi-annually		380,556		375,606		756,162		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of Tokyo-Mitsubishi, Ltd.	USA	US$	1.68%	1.00%	At maturity		-		17,296,605		17,296,605		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Scotiabank & Trust Cayman Ltd	Cayman Islands	US$	1.68%	1.00%	At maturity		23,316		26,206,977		26,230,293		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Bank of America	USA	US$	1.66%	1.03%	At maturity		-		-		-		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Mercantil Commercebank	USA	US$	1.68%	1.00%	At maturity		-		10,482,791		10,482,791		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,030,000-7	Banco del Estado de Chile	Chile	US$	1.69%	1.01%	At maturity		-		33,544,931		33,544,931		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Banco Bilbao Vizcaya Argentaria S.A.NY	USA	US$	1.72%	1.12%	At maturity		-		-		-		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Banco Español de Crédito S.A. N.Y.B.	USA	US$	1.72%	1.12%	At maturity		-		-		-		-		-		-	-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	Caja Madrid, Caja Madrid Miami Agency	USA	US$	1.83%	1.83%	At maturity		-		-		-		-		-		-	-
Foreign	Endesa Argentina S.A.	Argentina	Foreign	Citibank	Argentina	Ar$	21.50%	21.50%	At maturity		798,209		-		798,209		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Ciudad	Argentina	Ar$	25.59%	23.00%	At maturity		99,258		-		99,258		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Galicia	Argentina	Ar$	32.54%	28.50%	At maturity		2,530,765		-		2,530,765		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Itau	Argentina	Ar$	35.15%	30.50%	At maturity		1,075,305		-		1,075,305		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Macro	Argentina	Ar$	14.00%	16.00%	At maturity		-		-		-		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Nación Argentina	Argentina	Ar$	20.57%	18.85%	At maturity		531,359		-		531,359		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Provincia de Buenos Aires	Argentina	Ar$	20.20%	18.09%	At maturity		-		-		-		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Santander Río	Argentina	Ar$	34.49%	30.00%	At maturity		658,713		-		658,713		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Standard Bank	Argentina	Ar$	30.61%	27.00%	At maturity		1,154,665		-		1,154,665		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Supervielle	Argentina	Ar$	31.89%	28.00%	At maturity		1,031,807		-		1,031,807		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Citibank	Argentina	Ar$	39.84%	34.00%	At maturity		3,450,479		-		3,450,479		-		-		-	-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Credit Suisse International	Argentina	US$	13.67%	13.25%	Quarterly		3,155,920		-		3,155,920		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Ciudad -Syndicated II	Argentina	Ar$	26.62%	23.84%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated II	Argentina	Ar$	26.62%	23.84%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated III	Argentina	Ar$	26.44%	23.69%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario	Argentina	Ar$	26.68%	23.89%	At maturity		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated II	Argentina	Ar$	26.96%	24.11%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau	Argentina	US$	8.24%	7.99%	Quarterly		817,499		1,213,314		2,030,813		404,438		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau - Syndicated II	Argentina	Ar$	26.62%	23.84%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau - Syndicated III	Argentina	Ar$	26.44%	23.69%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Macro	Argentina	Ar$	30.42%	27.75%	Semi-annually		1,651,420		-		1,651,420		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated III	Argentina	Ar$	26.44%	23.69%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander Río	Argentina	Ar$	25.59%	23.00%	At maturity		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander -Syndicated II	Argentina	Ar$	26.62%	23.84%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Deutsche Bank	Argentina	US$	8.24%	7.99%	Quarterly		1,634,992		2,426,628		4,061,620		808,876		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank	Argentina	US$	8.24%	7.99%	Quarterly		817,499		1,213,314		2,030,813		404,438		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank - Syndicated III	Argentina	Ar$	26.44%	23.69%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank -Syndicated II	Argentina	Ar$	26.62%	23.84%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank	Argentina	Ar$	25.59%	23.00%	At maturity		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau	Argentina	Ar$	33.70%	29.25%	At maturity		161,254		-		161,254		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Macro I	Argentina	Ar$	21.94%	20.00%	At maturity		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated I	Argentina	Ar$	25.42%	23.31%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau- Syndicated I	Argentina	Ar$	25.42%	23.31%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated I	Argentina	Ar$	25.42%	23.31%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank - Syndicated I	Argentina	Ar$	25.42%	23.31%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated I	Argentina	Ar$	25.42%	23.31%	Semi-annually		-		-		-		-		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated IV	Argentina	Ar$	33.84%	30.22%	Semi-annually		100,275		498,659		598,934		2,050,042		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau- Syndicated IV	Argentina	Ar$	33.84%	30.22%	Semi-annually		91,555		455,297		546,852		1,871,777		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated IV	Argentina	Ar$	33.84%	30.22%	Semi-annually		87,195		433,616		520,811		1,782,645		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated IV	Argentina	Ar$	33.84%	30.22%	Semi-annually		30,519		151,766		182,285		623,926		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Ciudad -Syndicated IV	Argentina	Ar$	33.84%	30.22%	Semi-annually		13,080		65,042		78,122		267,397		-		-	-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Industrial and Commercial Bank of China Argentina	Argentina	Ar$	33.84%	30.22%	Quarterly		113,354		563,701		677,055		2,317,438		-		-	-
				Total ThCh$											139,167,439

12-2013		12-2012														01-2012
Non-current		Current						Non-current								Current						Non-current
Total Non- current		Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		Five to ten years		Total Non- current		Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		Total Non-current
	-		-		-		-		-		-		-		-		3,068		1,541,618		1,544,686		-		-		-		-
	15,135,273		62,786		444,835		507,621		1,186,227		1,186,227		12,010,552		14,383,006		71,315		-		71,315		1,127,370		1,288,422		13,689,484		16,105,276
	3,937,373		18,702		-		18,702		2,391,588		2,391,588		-		4,783,176		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-		31,691,033
	30,711,528		-		-		-		7,055,183		22,122,184				29,177,367		-		-		1,870,716		1,298,813		17,923,617		12,468,603		-
	-		1,725,270		-		1,725,270		-		-		-		-		-		1,870,716		1,750,050		-		-		-		-
	-		-		-		-		-		-		-		-		392,849		1,357,201		7,501,425		-		-		-		1,870,361
	-		-		-		-		-		-		-		-		1,890,464		5,610,961		-		1,870,361		-		-		-
	-		162,350		-		162,350				7,846,933				7,846,933				-		8,977,569								-
	-		-		-		-		-		-		-		-		-		8,977,569		26,730,428		-		-		-		-
	-		-		-		-		-		-		-		-		-		26,730,428		21,177,566		-		-		-		-
	-		383,776		-		383,776		-		18,549,169				18,549,169		-		21,177,566		6,430,876		-		-		-		-
	-		126,712		-		126,712		-		6,124,429				6,124,429		-		6,430,876		23,478,356		-		-		-		-
	61,203,901		1,037,293		-		1,037,293		-		50,135,818				50,135,818		-		23,478,356		899,681		-		-		-		2,548,345
	21,761,387		-		-		-		-		-		-		-		-		-		-		-		-		-		17,055,976
	858,299		-		820,076		820,076		1,570,498		-		-		1,570,498		50,233		849,448		-		1,698,896		849,449		-		-
	-		-		-		-		15,792,106		-		-		15,792,106		-		-		758,262		17,055,976		-		-		1,486,682
	-		277		-		277				-		-		-						-		-		-		-		17,055,976
	-		354,739		343,643		698,382		687,160		-		-		687,160		-		758,262		-		1,486,682		-		-		-
	-		-		-		-		15,792,106		-		-		15,792,106		-		-		-		17,055,976		-		-		-
	-		-		28,264		28,264		23,927,433		-		-		23,927,433		-		-		-		-		-		-		-
	-		-		-		-		11,963,716		-		-		11,963,716		-		-		-		-		-		-		-
	-		-		-		-		9,570,973		-		-		9,570,973		-		-		34,267		-		-		-		30,494,018
	-		-		-		-		18,663,398		-		-		18,663,398		-		-		-		-		-		-		12,921,194
	-		-		-		-		-		-		-		-		34,267		-		-		30,494,018		-		-		25,842,388
	-		-		-		-		-		-		-		-		-		-		-		12,921,194		-		-		-
	-		-		-		-		-		-		-		-		-		-		978,500		25,842,388		-		-		-
	-		-		-		-		-		-		-		-		-		-		5,167,489								-
	-		395,963		-		395,963		-		-		-		-		978,500		-		3,529,419		-		-		-		-
	-		3,395,077		-		3,395,077		-		-		-		-		5,167,489		-		368,142		-		-		-		-
	-		1,341,282		-		1,341,282		-		-		-		-		3,529,419		-		3,555,128		-		-		-		-
	-		-				-		-		-		-		-		368,142		-		368,366		-		-		-		-
	-		659,346		1,881,095		2,540,441		402,562		-		-		402,562		3,555,128		-		1,898,686		-		-		-		-
	-		209,414		-		209,414		-		-		-		-		368,366		-		2,509,954		-		-		-		-
	-		878,233				878,233		-		-		-		-		1,898,686		-		2,566,218		-		-		-		-
	-		1,390,448		-		1,390,448		-		-		-		-		2,509,954		-		6,393,434		-		-		-		-
	-		1,239,740		-		1,239,740		-		-		-		-		2,566,218		-		44,820		-		-		-		5,195,104
	-		4,347,020		-		4,347,020		-		-		-		-		6,393,434		-		371,720		-		-		-		487,596
	-		5,696,590		-		5,696,590		-		-		-		-		44,820		-		-		5,195,104		-		-		-
	-		159,475		261,271		420,746		132,576		-		-		132,576		53,063		318,657		565,544		487,596		-		-		3,627,133
	-		199,084		326,151		525,235		165,510		-		-		165,510		-		-		-		-		-		-		-
	-		555,645		486,949		1,042,594		1,460,847		-		-		1,460,847		167,311		398,233		464,548		3,023,612		603,521		-		609,361
	-		339,482		324,633		664,115		-		-		-		-						-		-		-		-		-
	-		199,084		326,151		525,235		165,510		-		-		165,510		66,315		398,233		580,745		609,361		-		-		761,701
	404,438		379,564		1,105,298		1,484,862		1,842,165		-		-		1,842,165		-		-		100,996		-		-		-		3,017,724
	-		248,855		407,689		656,544		206,887		-		-		206,887		82,953		497,792		-		761,701		-		-		-
	-		555,645		486,949		1,042,594		1,460,847		-		-		1,460,847		100,996		-		100,996		2,414,203		603,521		-		3,017,724
	-		29,777		1,947,796		1,977,573		-		-		-		-		-				-		-		-		-		-
	-		555,645		486,949		1,042,594		1,460,847		-		-		1,460,847		100,996		-		929,505		2,414,203		603,521		-		1,219,258
	-		98,269		-		98,269		-		-		-		-		-				3,237,740		-		-		-		7,193,241
	-		398,343		652,590		1,050,933		331,165		-		-		331,165		132,688		796,817		3,237,647		1,219,258		-		-		7,193,241
	808,876		759,134		2,210,596		2,969,730		3,684,336		-		-		3,684,336		40,734		3,197,006		-		6,393,999		799,242		-		-
	404,438		379,564		1,105,298		1,484,862		1,842,165		-		-		1,842,165		40,677		3,196,970		1,378,911		6,393,999		799,242		-		4,694,002
	-		555,645		486,949		1,042,594		1,460,847		-		-		1,460,847		-		-		-		-		-		-		-
	-		547,656		897,204		1,444,860		455,294		-		-		455,294		283,419		1,095,492		-		4,090,481		603,521		-		-
	-		195,452		-		195,452		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		293,468		-		293,468		-		-		-		-		-		-		1,030,882		-		-		-		-
	-		-		-		-		-		-		-		-		16,968		1,013,914		1,570,870		-		-		-		-
	-		-		-		-		-		-		-		-		25,858		1,545,012		1,570,871		-		-		-		-
	-		-		-		-		-		-		-		-		25,859		1,545,012		1,227,237		-		-		-		-
	-		-		-		-		-		-		-		-		20,196		1,207,041		490,893		-		-		-		-
	-		-		-		-		-		-		-		-		8,077		482,816		-		-		-		-		-
	2,050,042		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	1,871,777		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	1,782,645		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	623,926		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	267,397		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	2,317,438		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	144,138,738						44,905,191								244,038,846						145,464,457								194,087,333

Appendix No.4, letter a), presents details of estimated future cash flows (undiscounted) that the Group will have to disburse to settle the bank loans detailed above.

F-71

3. The detail of Unsecured Liabilities by currency and maturity as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

   -    Summary of unsecured liabilities by currency and maturity

								Current										Non-current
								Maturity						Maturity
Country	Currency	Amortization	Effective     Interest     Rate		Nominal     Interest       Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total Current     at 12/31/2013     ThCh$		One to three     years     ThCh$		Three to five     years     ThCh$		More than five     years     ThCh$		More than ten     years     ThCh$		Total Non-     current at     12/31/2013     ThCh$
Chile	US$	Semi-annually		8.11%		7.99%	Unsecured		9,165,715		-		9,165,715		104,458,309		-		-		159,088,295		263,546,604
Chile	Ch$	Quarterly		6.00%		5.48%	Unsecured		-		6,273,391		6,273,391		9,696,776		9,696,776		130,194,490		144,396,823		293,984,865
Peru	US$	Semi-annually		7.01%		6.89%	Unsecured		862,593		5,164,073		6,026,666		13,835,937		5,249,833		9,536,848		5,249,834		33,872,452
Peru	Sol	Quarterly		6.59%		6.48%	Unsecured		5,655,132		3,763,999		9,419,131		-		-		9,391,474		-		9,391,474
Colombia	CP	Semi-annually		7.32%		7.19%	Unsecured		39,022,019		26,251,335		65,273,354		68,210,526		105,561,815		403,534,976		168,100,796		745,408,113
							Total		54,705,459		41,452,798		96,158,257		196,201,548		120,508,424		552,657,788		476,835,748		1,346,203,508
								Current						Non-current
								Maturity						Maturity
Country	Currency	Amortization	Effective     Interest     Rate		Nominal     Interest     Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total current     at 12/31/2012     ThCh$		One to three     years     ThCh$		Three to five     years ThCh$		More than five     years     ThCh$		More than ten     years     ThCh$		Total Non-     current at     12/31/2012     ThCh$
Chile	US$	Semi-annually				8.06%	Unsecured		15,065,057		191,984,000		207,049,057		94,914,421		-		-		144,892,812		239,807,233
Chile	Ch$	Quarterly				5.48%	Unsecured		-		6,178,710		6,178,710		9,501,752		9,501,752		106,811,653		166,629,904		292,445,061
Peru	US$	Semi-annually				6.89%	Unsecured		785,915		55,795		841,710		7,688,954		9,566,350		13,472,288		4,783,175		35,510,767
Peru	Sol	Quarterly				6.50%	Unsecured		5,114,847		9,434,412		14,549,259		9,059,897		-		9,378,776		-		18,438,673
Colombia	CP	Semi-annually				8.25%	Unsecured		26,969,430		-		26,969,430		105,165,633		46,070,752		326,451,927		150,542,956		628,231,268
							Total		47,935,249		207,652,917		255,588,166		226,330,657		65,138,854		456,114,644		466,848,847		1,214,433,002
								Current						Non-current
								Maturity						Maturity
Country	Currency	Amortization	Effective     Interest     Rate		Nominal     Interest     Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total current     at 1/1/2012     ThCh$		One to three     years     ThCh$		Three to five     years     ThCh$		More than five     years     ThCh$		More than ten     years     ThCh$		Total Non-     current at     1/1/2012     ThCh$
Chile	US$	Semi-annually				8.36%	Unsecured		16,296,727		-		16,296,727		206,726,825		102,843,263		-		157,356,125		466,926,213
Chile	Ch$	Quarterly				5.17%	Unsecured		31,548,592		6,789,214		38,337,806		9,274,316		9,274,316		83,987,692		275,252,070		377,788,394
Peru	US$	Semi-annually				6.98%	Unsecured		853,625		60,597		914,222		5,049,784		13,692,084		14,632,944		5,195,251		38,570,063
Peru	Sol	Quarterly				6.60%	Unsecured		437,080		57,158		494,238		23,760,221		-		4,817,555		4,817,555		33,395,331
Colombia	CP	Semi-annually				9.11%	Unsecured		-		27,075,161		27,075,161		-		37,890,242		212,561,450		235,868,494		486,320,186
							Total		49,136,024		33,982,130		83,118,154		244,811,146		163,699,905		315,999,641		678,489,495		1,403,000,187

4. The detail of Secured Liabilities by currency and maturity as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

   -    Summary of secured liabilities by currency and maturity

										Current						Non-current
										Maturity						Maturity
Country	Currency		Amortization		Effective     Interest     Rate		Nominal     Interest     Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total Current at     12/31/2013     ThCh$		One to three years     ThCh$		Three to five years     ThCh$		More than five  years     ThCh$		Total Non-     current at     12/31/2013     ThCh$
Peru		Sol		Semi-annually		6.25%		6.16%	Secured		4,828,233		-		4,828,233		-		-		-		-
									Total		4,828,233		-		4,828,233		-		-		-		-

								Current						Non-current
								Maturity						Maturity
Country	Currency		Amortization		Nominal     Interest     Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total current at     12/31/2012     ThCh$		One to three years     ThCh$		Three to five     years     ThCh$		More than five years     ThCh$		Total Non- current at     12/31/2012     ThCh$
Peru		Sol		Semi-annually		6.35%	Secured		132,316		4,748,371		4,880,687		4,689,387		-		-		4,689,387
							Total		132,316		4,748,371		4,880,687		4,689,387		-		-		4,689,387
								Current						Non-current
								Maturity						Maturity
Country	Currency		Amortization		Nominal     Interest     Rate		Secured/ Unsecured	One to three     months     ThCh$		Three to twelve     months     ThCh$		Total current at     1/1/2012     ThCh$		One to three years     ThCh$		Three to five     years     ThCh$		More than five years     ThCh$		Total Non- current at     1/1/2012     ThCh$
Peru		US$		Semi-annually		6.15%	Secured		-		10,463,994		10,463,994		-		-		-		-
Peru		Sol		Semi-annually		6.26%	Secured		135,886		60,596		196,482		9,635,108		-		-		9,635,108
							Total		135,886		10,524,590		10,660,476		9,635,108		-		-		9,635,108

The fair value of current and non-current secured and unsecured liabilities with the public as of December 31, 2013 totaled ThCh$1,784,141,097 (ThCh$1,665,722,865 and ThCh$1,884,977,657 as of December 31. 2012 and January 1, 2012, respectively.

F-72

- Secured and Unsecured Liabilities by Company

Taxpayer ID No. (RUT)	Company	Country	ID No. Financial Institution	Financial Institution	Country	Currency	Effective Interest Rate		Nominal Interest Rate		Secured/     Unsecured	12-2013
												Current						Non-current
												Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		Five to ten years		More than ten years		Total Non- current
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	US$		6.15%		6.06%	Secured		-		-		-		-		-		-		-		-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol		6.57%		6.47%	Secured		-		-		-		-		-		-		-		-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol		6.25%		6.16%	Secured		4,828,233		-		4,828,233		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$		6.57%		6.47%	Unsecured		143,386		-		143,386		-		5,249,833		-		-		5,249,833
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.41%		6.31%	Unsecured		-		7,410		7,410		-		-		4,695,737		-		4,695,737
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.38%		6.28%	Unsecured		145,018				145,018		-		-		4,695,737		-		4,695,737
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.86%		6.75%	Unsecured		84,523		3,756,589		3,841,112		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.61%		6.50%	Unsecured		-		-		-		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.54%		6.44%	Unsecured		-		-		-		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.74%		6.63%	Unsecured		-		-		-		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol		6.70%		6.59%	Unsecured		5,425,591		-		5,425,591		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$		6.44%		6.34%	Unsecured		143,391		-		143,391		-		-		-		5,249,834		5,249,834
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$		9.20%		9.00%	Unsecured		-		5,164,073		5,164,073		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$		7.93%		7.78%	Unsecured		148,259		-		148,259		-		-		4,287,014		-		4,287,014
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$		7.25%		7.13%	Unsecured		105,649		-		105,649		3,336,269		-		-		-		3,336,269
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$		6.74%		6.63%	Unsecured		159,409		-		159,409		5,249,834		-		-		-		5,249,834
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$		6.09%		6.00%	Unsecured		86,622		-		86,622		5,249,834						-		5,249,834
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$		5.87%		5.78%	Unsecured		75,877		-		75,877						5,249,834		-		5,249,834
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A-10 bonds	Colombia	CP		6.89%		6.72%	Unsecured		410,041		-		410,041		57,333,471		-		-		-		57,333,471
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A102 bonds	Colombia	CP		6.89%		6.72%	Unsecured		78,103		-		78,103		10,877,055		-		-		-		10,877,055
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B-103 bonds	Colombia	CP		7.00%		7.00%	Unsecured		2,793,820		-		2,793,820		-		46,227,482		-		-		46,227,482
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A5 bonds	Colombia	CP		5.54%		5.43%	Unsecured		13,546,078		-		13,546,078		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B10 bonds	Colombia	CP		7.64%		7.43%	Unsecured		452,160		-		452,160		-		-		43,524,534		-		43,524,534
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B15 bonds	Colombia	CP		7.96%		7.73%	Unsecured		163,078		-		163,078		-		-		-		15,091,913		15,091,913
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	E5-09 bonds	Colombia	CP		9.27%		9.27%	Unsecured		-		26,251,335		26,251,335		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B09-09 bonds	Colombia	CP		7.76%		7.55%	Unsecured		1,116,939		-		1,116,939		-		59,334,333		-		-		59,334,333
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B12 bonds	Colombia	CP		7.97%		7.74%	Unsecured		470,239		-		470,239		-		-		24,359,164		-		24,359,164
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Foreign bonds	Colombia	CP		10.17%		10.17%	Unsecured		2,327,070		-		2,327,070		-		-		24,481,561		-		24,481,561
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo bonds	Colombia	CP		10.17%		10.17%	Unsecured		16,722,841		-		16,722,841		-		-		174,754,259		-		174,754,259
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B10 bonds	Colombia	CP		5.34%		5.24%	Unsecured		222,497		-		222,497		-		-		81,524,318		-		81,524,318
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B15 bonds	Colombia	CP		5.46%		5.36%	Unsecured		151,650		-		151,650		-		-		-		54,347,606		54,347,606
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B12-13 bonds	Colombia	CP		6.85%		6.68%	Unsecured		379,429		-		379,429		-		-		-		98,661,277		98,661,277
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B6-13 bonds	Colombia	CP		6.08%		5.95%	Unsecured		142,037		-		142,037		-		-		41,454,410		-		41,454,410
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B6-13 bonds	Colombia	CP		6.08%		5.95%	Unsecured		46,037		-		46,037		-		-		13,436,730		-		13,436,730
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 317 Series H	Chile	U.F.		7.17%		6.20%	Unsecured		-		5,792,134		5,792,134		9,696,776		9,696,776		24,241,945		20,890,288		64,525,785
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 522 Series M	Chile	U.F.		4.82%		4.75%	Unsecured		-		481,257		481,257		-		-		105,952,545		123,506,535		229,459,080
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - 144 - A	USA	US$		8.50%		8.35%	Unsecured		-		-		-				-		-		-		-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - 144 - A	USA	US$		8.83%		8.63%	Unsecured		3,770,634		-		3,770,634		104,458,309		-		-		-		104,458,309
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First Issue S-1	USA	US$		7.96%		7.88%	Unsecured		3,543,987		-		3,543,987		-		-		-		106,741,471		106,741,471
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First Issue S-2	USA	US$		7.40%		7.33%	Unsecured		1,133,296		-		1,133,296		-		-		-		36,596,392		36,596,392
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First Issue S-3	USA	US$		8.26%		8.13%	Unsecured		717,798		-		717,798		-		-		-		15,750,432		15,750,432
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 264 Series F	Chile	U.F.		6.44%		6.44%	Unsecured		-		-		-		-		-		-		-		-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 318 Series K	Chile	U.F.		3.86%		3.86%	Unsecured		-		-		-		-		-		-		-		-
				Total	ThCh$												100,986,490										1,346,203,508

12-2012																01-2012
Current						Non-current										Current						Non-current
Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		Five to ten years		More than ten years		Total Non- current		Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		Five to ten years		More than ten years		Total Non- current
	-		-		-		-		-		-		-		-		-		10,463,994		10,463,994		-		-		-		-		-
	-		4,748,371		4,748,371		-		-		-		-		-		-		60,596		60,596		4,817,554		-		-		-		4,817,554
	132,316		-		132,316		4,689,387						-		4,689,387		135,886		-		135,886		4,817,554		-		-		-		4,817,554
	130,640		-		130,640		-		-		4,783,175		-		4,783,175		141,895		-		141,895		-		-		5,195,251		-		5,195,251
	-		7,400		7,400		-		-		4,689,388		-		4,689,388		-		7,603		7,603		-		-		-		4,817,555		4,817,555
	144,821		-		144,821		-		-		4,689,388		-		4,689,388		148,780		-		148,780		-		-		4,817,555		-		4,817,555
	84,409		-		84,409		3,751,510		-		-		-		3,751,510		86,706		-		86,706		3,854,084		-		-		-		3,854,084
	4,775,750		-		4,775,750		-		-		-		-		-		-		33,597		33,597		4,817,555		-		-		-		4,817,555
	-		4,722,091		4,722,091		-		-		-		-		-		-		15,958		15,958		4,817,555		-		-		-		4,817,555
	-		4,704,921		4,704,921		-		-		-		-		-		88,723		-		88,723		4,817,555		-		-		-		4,817,555
	109,867		-		109,867		5,308,387		-		-		-		5,308,387		112,871		-		112,871		5,453,472		-		-		-		5,453,472
	130,645		-		130,645		-		-		-		-		-		141,900		-		141,900		-		-		-		5,195,251		5,195,251
	-		55,795		55,795		4,649,246		-		-		4,783,175		9,432,421		-		60,597		60,597		5,049,784		-		-		-		5,049,784
	135,080		-		135,080		-		-		3,905,938		-		3,905,938		146,718		-		146,718		-		4,242,442		-		-		4,242,442
	96,257		-		96,257		3,039,708		-		-		-		3,039,708		104,550		-		104,550		-		3,301,582		-		-		3,301,582
	145,239		-		145,239		-		4,783,175		-		-		4,783,175		157,752		-		157,752		5,195,251		-		-		-		5,195,251
	78,922		-		78,922		-		4,783,175		-		-		4,783,175		85,722		-		85,722		5,195,251		-		-		-		5,195,251
	69,132		-		69,132		-		-		4,783,175		-		4,783,175		75,088		-		75,088		-		5,195,251		-		-		5,195,251
	469,671		-		469,671		56,910,929		-		-		-		56,910,929		-		534,079		534,079		-		-		56,169,355		-		56,169,355
	89,461		-		89,461		9,864,217		-		-		-		9,864,217		-		101,729		101,729		-		-		9,747,283		-		9,747,283
	183,657		-		183,657		-		-		-		15,040,745		15,040,745		-		3,654,924		3,654,924		-		-		45,470,431		-		45,470,431
	3,205,705		-		3,205,705		-		46,070,752		-		-		46,070,752		-		116,036		116,036		-		13,223,871		-		-		13,223,871
	511,529		-		511,529		-		-		43,376,968		-		43,376,968		-		575,302		575,302		-		-		42,811,747		-		42,811,747
	1,261,346		-		1,261,346		-		-		59,133,165		-		59,133,165		-		205,704		205,704		-		-		-		14,844,758		14,844,758
	529,504		-		529,504		-		-		24,276,576		-		24,276,576		-		1,146,419		1,146,419		-		24,666,371		-		-		24,666,371
	134,607		-		134,607		13,398,459		-		-		-		13,398,459		-		1,416,305		1,416,305		-		-		58,362,634		-		58,362,634
	1,161,554		-		1,161,554		24,992,028		-		-		-		24,992,028		-		592,993		592,993		-		-		-		23,960,242		23,960,242
	2,318,404		-		2,318,404		-		-		24,390,398		-		24,390,398		-		2,288,195		2,288,195		-		-		-		24,072,581		24,072,581
	16,660,570		-		16,660,570		-		-		175,274,820		-		175,274,820		-		16,443,475		16,443,475		-		-		-		172,990,913		172,990,913
	264,062		-		264,062		-		-		-		81,301,327		81,301,327		-		-		-		-		-		-		-		-
	179,360		-		179,360		-		-		-		54,200,884		54,200,884		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		5,731,907		5,731,907		9,501,752		9,501,752		23,754,380		25,021,345		67,779,229		-		5,653,703		5,653,703		9,274,316		9,274,316		23,185,792		28,612,795		70,347,219
	-		446,803		446,803		-		-		83,057,273		141,608,559		224,665,832		-		436,109		436,109		-		-		60,801,900		157,707,946		218,509,846
	6,679,443		191,984,000		198,663,443		-		-		-		-		-		7,225,533		-		7,225,533		206,726,825		-		-		-		206,726,825
	3,449,713		-		3,449,713		94,914,421		-		-		-		94,914,421		3,731,750		-		3,731,750		-		102,843,263		-		-		102,843,263
	3,242,355		-		3,242,355		-		-		-		97,491,553		97,491,553		3,507,440		-		3,507,440		-		-		-		105,516,202		105,516,202
	1,036,841		-		1,036,841		-		-		-		33,456,554		33,456,554		1,121,609		-		1,121,609		-		-		-		36,254,989		36,254,989
	656,705		-		656,705		-		-		-		13,944,705		13,944,705		710,395		-		710,395		-		-		-		15,584,934		15,584,934
	-		-		-		-		-		-		-		-		31,548,592		-		31,548,592		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		699,402		699,402		-		-		-		88,931,329		88,931,329
					260,468,853										1,219,122,389						93,778,630										1,412,635,295

Appendix No. 4, letter b) presents details of estimated future cash flows (undiscounted) that the Group will have to disburse to settle the secured and unsecured obligations detailed above.

- Detail of Finance Lease Obligations

Taxpayer ID No.	Company	Country	ID No. Financial Institution	Financial Institution	Country	Currency	Nominal Interest Rate		12-2013
									Current						Non-current
									Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		More than ten years		Total Non- current
91,081,000-6	Empresa Nacional de Electricidad S.A	Chile	87,509,100-K	Abengoa Chile	Chile	US$		6.50%		-		1,193,881		1,193,881		2,625,612		2,978,035		10,930,941		-		16,534,588
Foreign	Edegel S.A.A.	Peru	Foreign	Banco Scotiabank	Peru	US$		2.00%		1,347,864		3,986,173		5,334,037		14,566,758		11,515,608		-		-		26,082,366
				Total	ThCh$									6,527,918										42,616,954

12-2012																01-2012
Current						Non-current										Current						Non-current
Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		More than ten years		Total Non- current		Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		More than ten years		Total Non- current
	-		1,025,604		1,025,604		2,255,535		2,558,284		8,000,515		3,405,252		16,219,586		1,041,741		-		1,041,741		2,291,023		2,598,536		8,126,396		5,639,145		18,655,100
	1,231,661		3,610,794		4,842,455		11,478,411		17,127,941		-		-		28,606,352		1,918,477		6,218,565		8,137,042		10,519,276		14,415,305		11,395,943		-		36,330,524
					5,868,059										44,825,938						9,178,783										54,985,624

Appendix No. 4 letter c) presents details of estimated future cash flows (undiscounted) that the Group will have to disburse to settle the finance lease obligations detailed above.

F-73

   -    Other Obligations

Taxpayer ID No. (RUT)	Company	Country	ID No. Financial Institution	Financial Institution	Country	Currency	Nominal     Interest   Rate	12-2013
								Current						Non-current
								Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		Total Non- current
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Mitsubishi (secured debt)	Argentina	US$	7.42%		73,993,677		-		73,993,677		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Mitsubishi (unsecured debt)	Argentina	US$	7.42%		22,907,475		-		22,907,475		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Other	Argentina	Ar$	17.29%		3,249,165		2,171,469		5,420,634		1,447,643		-		-		1,447,643
96,827,970-K	Endesa Eco S.A.	Chile	96,601,250-1	Inversiones Centinela S.A.	Chile	US$	6.10%		-		-		-		-		-		-		-
Foreign	Hidroinvest S.A.	Argentina	Foreign	Other	Argentina	US$	2.67%		-		281,066		281,066		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Other	Argentina	Ar$	19.79%		-		-		-		-		975,589		-		975,589
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Scotiabank	Peru	US$	0.78%		635		-		635		-		-		-		-
96,589,170-6	Empresa Eléctrica Pangue	Chile	N/A	Other	Chile	Ch$	N/A		-		-		-		-		-		-		-
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	N/A	Other	Chile	Ch$	N/A		-		-				-		-		-
				Total                         ThCh$									102,603,487								2,423,232

				12-2012										01-2012
Current						Non-current								Current						Non-current
Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		Total Non- current		Less than 90 days		More than 90 days		Total Current		One to three years		Three to five years		More than five years		Total Non- current
	70,025,348		-		70,025,348		-		-		-		-		7,749,998		14,969,290		22,719,288		12,851,153		37,735,332		-		50,586,485
	14,355,259		-		14,355,259		-		-		-		-		-		13,925,511		13,925,511		-		-		-		-
	1,791,317		3,600,814		5,392,131		5,629,544		-		-		5,629,544		679,866		1,133,110		1,812,976		-		-		-		-
	2,022,260		-		2,022,260		-		-		-		-		3,929,271		-		3,929,271		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		-		-		-		-		-		-		-
	-		-		-		-		-		-		-		2		-		2		-		-		-		-
	-		-												27		-		27		-		-		-		-
					91,794,998								5,629,544						42,387,075								50,586,485

Appendix No. 4 letter d) presents details of estimated future cash flows (undiscounted) that the Group will have to disburse to settle these Other Obligations.

F-74

5.     Hedged debt

Of the U.S. dollar denominated debt held by Endesa Chile, as of December 31, 2013, ThCh$754,177,869 is related to future cash flow hedges for the Group’s U.S. dollar-linked operating income (see Note 3.k). As of December 31, 2012 and January 1, 2012, these amounts were ThCh$663,941,868 and ThCh$739,686,386 respectively.

The following table details changes in “Reserve for cash flow hedges” as of December 31, 2013, December 31, 2012, and January 1, 2012 due to exchange differences of this debt:

HEDGING RESERVE	12-31-2013               ThCh$		12-31-2012               ThCh$		01-01-2012             ThCh$
Balance in hedging reserves (hedging income) at beginning of year		57,592,447		42,149,742		101,149,888
Foreign currency exchange differences recorded in net equity		(41,334,780)		30,348,917		(47,549,956)
Recognition of foreign currency exchange differences in profit (loss)		(13,763,582)		(14,713,619)		(12,505,769)
Foreign currency translation differences		(128,301)		(192,593)		1,055,579
Balance in hedging reserves (hedging income) at year end		2,365,784		57,592,447		42,149,742

6.     Other information

As of December 31, 2013, the Endesa Chile has long-term lines of credit available for use amounting to ThCh$153,458,192 (ThCh$193,708,000 and ThCh$199,892,000 as of December 31, 2012 and January 1, 2012, respectively).

F-75

17. RISK MANAGEMENT POLICY

The Group’s companies are exposed to certain risks that are managed by systems that identify, measure, limit concentration of, and monitor these risks.

The main principles in the Group’s risk management policy include the following:

- Compliance with good corporate governance standards.

- Strict compliance with all the Group’s internal policies.

- Each business and corporate area determines:

I.   The markets in which it can operate based on its knowledge and ability to ensure effective risk management.

II.   Criteria regarding counterparts.

III.   Authorized operators.

- Business and corporate areas establish their risk tolerance in a manner consistent with the defined strategy for each market in which they operate.

- All of the operations of the businesses and corporate areas are conducted within the limits approved for each case.

- Businesses, corporate areas, lines of business and companies design the risk management controls necessary to ensure that transactions in the markets are conducted in accordance with the Endesa Chile policies, standards, and procedures.

17.1. Interest rate risk

Changes in interest rates affect the fair value of assets and liabilities bearing fixed interest rates, as well as the expected future cash flows of assets and liabilities subject to floating interest rates.

The objective of managing interest rate risk exposure is to achieve a balance in the debt structure to minimize the cost of debt with reduced volatility in profit or loss.

In compliance with the current interest rate hedging policy, the proportion of fixed debt and/or hedged debt over the net total debt was 71% as of December 31, 2013.

Depending on the Group’s estimates and on the objectives of the debt structure, hedging transactions are performed by entering into derivatives contracts that mitigate interest rate risk. Derivative instruments currently used to comply with the risk management policy are interest rate swaps to set floating rate at fixed rate.

The financial debt structure of the Endesa Chile Group detailed by fixed and/or hedged and floating interest rate, net of hedging derivative instruments, is as follows:

Net position:

	12-31-2013	12-31-2012	01-01-2012
	%	%	%
Fixed interest rate	71%	74%	81%
Floating interest rate	29%	26%	19%
Total	100%	100%	100%

F-76

17.2. Exchange rate risk

Exchange rate risks involve basically the following transactions:

- Debt taken on by the Group’s companies that is denominated in a currency other than that in which its cash flows are indexed.

- Payments to be made for the acquisition of project-related materials in a currency other than that in which its cash flows are indexed.

- Income in Group companies directly linked to changes in the dollar.

- Cash flows from foreign subsidiaries to Chilean parent companies which are exposed to exchange rate fluctuations.

In order to mitigate foreign currency risk, the Endesa Chile Group’s foreign currency risk management policy is based on cash flows and includes maintaining a balance between U.S. dollar flows and the levels of assets and liabilities denominated in this currency. The objective is to minimize the exposure to variability in cash flows that are attributable to foreign exchange risk.

The hedging instruments currently being used to comply with the policy are currency swaps and forward exchange contracts. In addition, the policy seeks to refinance debt in the functional currency of each of the Group’s companies.

17.3. Commodities risk

The Endesa Chile Group has a risk exposure to price changes in certain commodities, basically due to:

- Purchases of fuel used to generate electricity.

- Energy purchase/sale transactions that take place in local markets.

In order to reduce the risk in situations of extreme drought, the Company has designed a commercial policy that defines the levels of sales commitments in line with the capacity of its generating power plants in a dry year. It also includes risk mitigation terms in certain contracts with unregulated customers.

Considering the operating conditions faced by the power generation market in Chile, with drought and highly volatile commodity prices on international markets, the Company is constantly verifying the advisability of using hedging to lessen the impacts that these price swings have on its results. As of December 31, 2013, the Group has no derivative operations in effect for commodities. As of December 31, 2012, the Group had swap operations for 462,000 barrels of Brent crude oil for January 2013, and 365,000 tons of coal for February through June of 2013. (As of January 1, 2012, there were no hedging instruments in effect.)

Depending on operating conditions, which are constantly being updated, these hedges may be modified or may cover other commodities (see Note 18.3.a).

17.4. Liquidity risk

The Group maintains a liquidity risk management policy that consists of entering into long-term committed banking facilities and temporary financial investments for amounts that cover the projected needs over a period of time that is determined based on the situation and expectations for debt and capital markets.

The projected needs mentioned above include maturities of financial debt, net of financial derivatives. For further details regarding the features and conditions of financial obligations and financial derivatives, see Notes 16 and 18, and Appendix No. 4, respectively.

F-77

As of December 31, 2013, the Endesa Chile Group has cash and cash equivalent totaling ThCh$323,807,379 and unconditionally available lines of long-term credit totaling ThCh$153,458,192. As of December 31, 2012, the Endesa Chile Group had ThCh$235,677,733 in cash and cash equivalents and ThCh$193,708,000 in unconditionally available lines of long-term credit (ThCh$389,768,271 and ThCh$199,892,000 respectively, as of January  1, 2012).

17.5. Credit risk

The Endesa Chile Group closely monitors its credit risk.

Trade receivables:

The credit risk for receivables from the Group’s commercial activity has historically been very low, due to the short term period of collections from customers, resulting in non-significant cumulative receivables amounts.

In some countries, regulations allow the suspension of energy service to customers with outstanding payments, and most contracts have termination clauses for payment default. The Company monitors its credit risk on an ongoing basis and measures its maximum exposure to payment default risk, which, as stated above, is very low.

Financial assets:

Cash surpluses are invested in the highest-rated local and foreign financial entities (with risk rating equivalent to investment grade) with thresholds established for each entity.

Banks that have received investment grade ratings from the three major international rating agencies (Moody’s, S&P, and Fitch) are selected for making investments.

Investments may be backed with treasury bonds from the countries in which the company operates and/or with commercial papers issued by the highest rated banks; the latter are preferred, as they offer higher returns (always in line with current investment policies).

Derivative instruments are entered into with entities with solid creditworthiness; all derivative transactions are performed with entities with investment grade ratings.

17.6. Risk measurement:

The Endesa Chile Group measures the Value at Risk (VaR) of its debt positions and financial derivatives in order to monitor the risk assumed by the Company, thereby reducing volatility in the income statement.

The portfolio of positions included in calculating the current Value at Risk consists of the following:

- Financial debt.

- Hedge derivatives for debt, dividends, and projects.

The VaR determined represents the potential loss in value of the portfolio of positions described above in one day with a 95% confidence level. To determine the VaR, we take into account the volatility of the risk variables affecting the value of the portfolio of positions including:

- U.S. dollar Libor interest rate.

- The different currencies with which our companies operate and the customary local indices used in the banking industry.

- The exchange rates of the various currencies used in the calculation.

F-78

The calculation of VaR is based on generating possible future scenarios (at one day) of market values (both spot and term) for the risk variables, using Bootstrapping simulations. The number of scenarios generated ensures compliance with the simulation convergence criteria. The table of volatilities and correlations between the various risk variables calculated based on the historical values of the logarithmic price returns has been applied to simulate the future price scenario.

Once the price scenarios have been obtained, the fair value of the portfolio is calculated using such scenarios, thereby obtaining a distribution of possible values at one day. The one-day 95%-confidence VaR number is calculated as the 5% percentile of the potential increases in the fair value of the portfolio in one day.

The various debt positions and financial derivatives included in the calculation have been valued consistently using the financial capital calculation methodology reported to Management.

Taking into account the assumptions described above, the VaR of the previously discussed positions, broken down by type of position, is shown in the following table:

Financial Positions	Balance at
	12-31-2013       ThCh$		12-31-2012       ThCh$
Interest rate		8,035,082		7,882,191
Exchange rate		2,205,128		1,517,921
Correlation		(3,291,060)		(2,552,715)
Total		6,949,150		6,847,397

The VaR positions have varied during the 2013 and 2012 fiscal years depending on the start/maturity of operations throughout each year.

F-79

18.  FINANCIAL INSTRUMENTS

18.1 Financial instruments, classified by type and category

a) The detail of financial assets, classified by type and category, as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	December 31, 2013
	Financial assets held for trading ThCh$		Financial assets at fair value with change in profit or loss ThCh$		Held-to-maturity investments ThCh$		Loans and receivables ThCh$		Available-for-sale financial assets ThCh$		Financial derivatives for hedging ThCh$
Equity instruments		-		-		-		-		-		-
Derivative instruments		2,063,414		-		-		-		-		21,128,524
Other financial assets		-		-		944,540		379,672,724		-		-
Total Current		2,063,414		-		944,540		379,672,724		-		21,128,524
Equity instruments		-		-		-		-		4,043,782		-
Derivative instruments		-		-		-		-		-		16,507
Other financial assets		-		-		-		131,597,410		-		-
Total Non-current		-		-		-		131,597,410		4,043,782		16,507
Total		2,063,414		-		944,540		511,270,134		4,043,782		21,145,031
	December 31, 2012
	Financial assets held for trading ThCh$		Financial assets at fair value with change in profit or loss ThCh$		Held-to-maturity investments ThCh$		Loans and receivables ThCh$		Available-for-sale financial assets ThCh$		Financial derivatives for hedging ThCh$
Equity instruments		-		-		-		-		-		-
Derivative instruments		-		-		-		-		-		51,876
Other financial assets		-		25,067,909		-		293,171,202		-		-
Total Current		-		25,067,909		-		293,171,202		-		51,876
Equity instruments		-		-		-		-		4,002,277		-
Derivative instruments		-		-		-		-		-		29,200,554
Other financial assets		-		-		-		147,066,310		-		-
Total Non-current		-		-		-		147,066,310		4,002,277		29,200,554
Total		-		25,067,909		-		440,237,512		4,002,277		29,252,430
	January 1, 2012
	Financial assets held for trading ThCh$		Financial assets at fair value with change in profit or loss ThCh$		Held-to-maturity investments ThCh$		Loans and receivables ThCh$		Available-for-sale financial assets ThCh$		Financial derivatives for hedging ThCh$
Equity instruments		-		-		-		-		-		-
Derivative instruments		47,504		-		-		-		-		723,067
Other financial assets		-		-		-		382,782,486		-		-
Total Current		47,504		-		-		382,782,486		-		723,067
Equity instruments		-		-		-		-		3,945,407		-
Derivative instruments		-		-		-		-		-		9,385,907
Other financial assets		-		-		-		151,769,908		-		-
Total Non-current		-		-		-		151,769,908		3,945,407		9,385,907
Total		47,504		-		-		534,552,394		3,945,407		10,108,974

F-80

b) The detail of financial liabilities, classified by type and category, as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	December 31, 2013
	Financial liabilities held   for trading   ThCh$	Financial liabilities at fair   value with change in profit   or loss   ThCh$	Loans and payables   ThCh$	Financial derivatives for hedging ThCh$
Interest-bearing loans	-	-	351,977,759	-
Derivative instruments	164,983	-	-	1,590,779
Other financial liabilities	-	-	727,665,171	-
Total Current	164,983	-	1,079,642,930	1,590,779
Interest-bearing loans	-	-	1,539,861,682	-
Derivative instruments	-	-	-	900,927
Total Non-current	-	-	1,539,861,682	900,927
Total	164,983	-	2,619,504,612	2,491,706
	December 31, 2012
	Financial liabilities held   for trading   ThCh$	Financial liabilities at fair   value with change in profit   or loss   ThCh$	Loans and payables      ThCh$	Financial derivatives    for hedging   ThCh$
Interest-bearing loans	-	2,022,260	403,457,687	-
Derivative instruments	-	-	-	975,089
Other financial liabilities	-	-	536,376,308	-
Total Current	-	2,022,260	939,833,996	975,089
Interest-bearing loans	-	-	1,520,644,153	-
Derivative instruments	-	-	-	5,007,665
Total Non-current	-	-	1,520,644,153	5,007,665
Total	-	2,022,260	2,460,478,149	5,982,754
	January 1, 2012
	Financial liabilities held   for trading   ThCh$	Financial liabilities at fair   value with change in profit   or loss   ThCh$	Loans and payables     ThCh$	Financial derivatives   for hedging   ThCh$
Interest-bearing loans	-	3,929,271	286,879,674	-
Derivative instruments	807,105	-	-	184,042
Other financial liabilities	-	-	481,706,801	-
Total Current	807,105	3,929,271	768,586,475	184,042
Interest-bearing loans	-	-	1,712,294,737	-
Derivative instruments	-	-	-	6,555,571
Other financial liabilities	-	-	9,243,595	-
Total Non-current	-	-	1,721,538,332	6,555,571
Total	807,105	3,929,271	2,490,124,807	6,739,613

F-81

18.2 Derivative instruments

The risk management policy of the Endesa Group uses primarily interest rate and foreign exchange rate derivatives to hedge its exposure to interest rate and foreign currency risks.

The Company classifies its hedges as follows:

- Cash flow hedges: Those that hedge the cash flows of the underlying hedged item.

- Fair value hedges: Those that hedge the fair value of the underlying hedged item.

- Non-hedge derivatives: Financial derivatives that do not meet the requirements established by IFRS to be designated as hedge instruments are recorded at fair value with changes in net income (assets held for trading).

a) Assets and liabilities for hedge derivative instruments

As of December 31, 2013, December 31, 2012, and January 1, 2012, financial derivative transactions qualifying as hedge instruments resulted in recognition of the following assets and liabilities in the statement of financial position:

	December 31, 2013								December 31, 2012								January 1, 2012
	Asset				Liability				Asset				Liability				Asset				Liability
	Current ThCh$		Non- current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-current ThCh$		Current ThCh$		Non-   current   ThCh$
Interest rate hedge:		-		6,692		1,215,744		892,361		-		-		78,464		4,586,456		-		-		91,829	6,454,964
Cash flow hedge		-		6,692		1,215,744		892,361		-		-		78,464		4,586,456		-		-		91,829	6,454,964
Exchange rate hedge:		21,128,524		9,815		375,035		8,566		51,876		29,200,554		896,625		421,209		723,067		9,385,907		92,213	100,607
Cash flow hedge		21,128,524		9,815		375,035		8,566		51,876		29,200,554		896,625		421,209		723,067		9,385,907		92,213	100,607
Total		21,128,524		16,507		1,590,779		900,927		51,876		29,200,554		975,089		5,007,665		723,067		9,385,907		184,042	6,555,571

- General information on hedge derivative instruments

Hedge derivative instruments and their corresponding hedged instruments are shown in the following table:

Detail of Hedge Instruments	Description of Hedge   Instrument	Description of Hedged Instrument	Fair Value of     Hedged      Instruments		Fair Value of    Hedged    Instruments		Fair Value of    Hedged    Instruments		Type of Risks  Hedged
			12-31-2013     ThCh$		12-31-2012    ThCh$		01-01-2012    ThCh$
SWAP	Interest rate	Bank borrowings		(2,108,105)		(4,664,920)		(6,546,793)	Cash flow
SWAP	Exchange rate	Unsecured obligations (bonds)		20,761,430		27,934,596		9,916,154	Cash flow

For the years ended December 31, 2013, 2012, and 2011, the Group has not recognized significant gains or losses for ineffective cash flow hedges.

b) Financial derivative instrument assets and liabilities at fair value with changes in net income

As of December 31, 2013, December 31, 2012, and January 1, 2012, financial derivative transactions recorded at fair value with changes in net income, resulted in the recognition of the following assets and liabilities in the statement of financial position:

December 31, 2013

December 31, 2012

January 1, 2012

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Current      ThCh$

Current     ThCh$

Non-current     ThCh$

Non-current     ThCh$

Current     ThCh$

Current     ThCh$

Non-current     ThCh$

Non-current     ThCh$

Current     ThCh$

Current     ThCh$

Non-current     ThCh$

Non-   current   ThCh$

Non-hedging derivative instruments

2,063,414

164,983

-

-

-

-

-

-

47,504

807,105

-

-

F-82

c) Other information on derivatives

The following tables present the fair value of hedging and non-hedging derivatives entered into by the Group as well as the remaining contractual maturities as of December 31, 2013, December 31, 2012, and January 1, 2012:

	December 31, 2013
		Notional value
Financial Derivatives	Fair value           ThCh$	Less than one   year   ThCh$		1-2 years   ThCh$	2-3 years   ThCh$		3-4 years   ThCh$	4-5 years   ThCh$	More than 5    years    ThCh$		Total ThCh$
Interest rate hedge:	(2,101,413)		110,136,027	6,659,398		6,659,398	9,766,945	-		-	133,221,768
Cash flow hedge	(2,101,413)		110,136,027	6,659,398		6,659,398	9,766,945	-		-	133,221,768
Exchange rate hedge:	20,754,738		229,800,552	1,041,243		-	-	-		-	230,841,795
Cash flow hedge	20,754,738		229,800,552	1,041,243		-	-	-		-	230,841,795
Derivatives not designated for hedge accounting	1,898,431		128,427,671	-		-	-	-		-	128,427,671
Total	20,551,756		468,364,250	7,700,641		6,659,398	9,766,945	-		-	492,491,234
Financial Derivatives	December 31, 2012
		Notional value
	Fair value           ThCh$	Less than one   year   ThCh$		1-2 years   ThCh$	2-3 years   ThCh$		3-4 years   ThCh$	4-5 years   ThCh$	More than 5    years    ThCh$		Total ThCh$
Interest rate hedge:	(4,664,920)		5,298,212	100,762,256		6,092,611	6,092,611	8,935,672		-	127,181,363
Cash flow hedge	(4,664,920)		5,298,212	100,762,256		6,092,611	6,092,611	8,935,672		-	127,181,363
Exchange rate hedge:	27,934,596		9,407,392	198,183,568		65,598	-	-		-	207,656,557
Cash flow hedge	27,934,596		9,407,392	198,183,568		65,598	-	-		-	207,656,557
Total	23,269,676		14,705,604	298,945,824		6,158,209	6,092,611	8,935,672		-	334,837,920
Financial Derivatives	January 1, 2012
		Notional value
	Fair value	Less than one   year		1-2 years	2-3 years		3-4 years	4-5 years	More than 5    years		Total
	ThCh$	ThCh$		ThCh$	ThCh$		ThCh$	ThCh$	ThCh$		ThCh$
Interest rate hedge:	(6,546,793)		9,479,132	5,731,377		107,702,257	5,292,723	5,292,723		8,368,224	141,866,438
Cash flow hedge	(6,546,793)		9,479,132	5,731,377		107,702,257	5,292,723	5,292,723		8,368,224	141,866,438
Exchange rate hedge:	9,916,154		-	-		209,977,060	-	-		-	209,977,060
Cash flow hedge	9,916,154		-	-		209,977,060	-	-		-	209,977,060
Derivatives not designated for hedge accounting	(759,601)		17,569,294	-		-	-	-		-	17,569,294
Total	2,609,760		27,048,426	5,731,377		317,679,317	5,292,723	5,292,723		8,368,224	369,412,792

The hedging and non-hedging derivatives contractual maturities do not represent the Group’s total risk exposure, as the amounts presented in the above tables have been drawn up based on undiscounted contractual cash inflows and outflows for their settlement.

F-83

18.3 Fair value hierarchies

a) Financial instruments recognized at fair value in the consolidated statement of financial position are classified based on the hierarchies described in Note 3.f.5.

The following table presents financial assets and liabilities measured at fair value as of December 31, 2013, December 31, 2012, and January 1, 2012:

Financial Instruments Measured at Fair Value		Fair Value Measured at End of Reporting Period  Using:
	12-31-2013   ThCh$	Level 1 ThCh$	Level 2    ThCh$	Level 3 ThCh$
Financial Assets
Financial derivatives designated as cash flow hedge	21,145,031	-	21,145,031	-
Financial derivatives not designated for hedge accounting	2,063,414	-	2,063,414	-
Commodity derivatives designated as cash flow hedge	129,780	-	129,780	-
Financial assets at fair value with change in profit or loss	-	-	-	-
Available-for-sale financial assets, non-current	6,468	6,468	-	-
Total	23,344,693	6,468	23,338,225	-
Financial Liabilities
Financial derivatives designated as cash flow hedge	2,491,706	-	2,491,706	-
Financial derivatives not designated for hedge accounting	164,983	-	164,983	-
Other short-term financial liabilities	-	-	-	-
Total	2,656,689	-	2,656,689	-

Financial Instruments Measured at Fair Value		Fair Value Measured at End of Reporting Period  Using:
	12-31-2012   ThCh$	Level 1 ThCh$	Level 2    ThCh$	Level 3 ThCh$
Financial Assets
Financial derivatives designated as cash flow hedge	29,252,430	-	29,252,430	-
Commodity derivatives designated as cash flow hedge	784,741	-	784,741	-
Financial assets at fair value with change in profit or loss	25,067,909	25,067,909	-	-
Available-for-sale financial assets, non-current	6,358	6,358	-	-
Total	55,111,438	25,074,267	30,037,171	-
Financial Liabilities
Financial derivatives designated as cash flow hedge	5,982,754	-	5,982,754	-
Commodity derivatives designated as cash flow hedge	32,200	-	32,200	-
Other short-term financial liabilities	2,022,260	-	-	2,022,260
Total	8,037,214	-	6,014,954	2,022,260
Financial Instruments Measured at Fair Value		Fair Value Measured at End of Reporting Period  Using:
	01-01-2012     ThCh$	Level 1 ThCh$	Level 2    ThCh$	Level 3 ThCh$
Financial Assets
Financial derivatives designated as cash flow hedge	10,108,974	-	10,108,974	-
Financial derivatives not designated for hedge accounting	47,504	-	47,504	-
Commodity derivatives designated as cash flow hedge	3,338	-	3,338	-
Financial assets at fair value with change in profit or loss	61,676	61,676	-	-
Total	10,221,492	61,676	10,159,816	-
Financial Liabilities
Financial derivatives designated as cash flow hedge	6,739,613	-	6,739,613	-
Financial derivatives not designated for hedge accounting	807,105	-	807,105	-
Other short-term financial liabilities	3,929,271	-	-	3,929,271
Total	11,475,989	-	7,546,718	3,929,271

F-84

b) The following is the reconciliation between opening and closing balances for financial instruments whose fair value is classified at level 3:

Non-current Interest-bearing borrowings	ThCh$
Balance at January 1, 2012		3,929,271
Total profit recognized in financial profit or loss		(1,907,011)
Balance at December 31, 2012		2,022,260
Total profit recognized in financial profit or loss		(2,022,260)
Balance at December 31, 2013		-

The fair value of Level 3 has been calculated by applying a traditional discounted cash flow method. These projected cash flows include assumptions from within the company that are primarily based on estimates for prices and levels of energy production and firm capacity, as well as the costs of operating and maintaining some of our plants.

None of the possible reasonable scenarios foreseeable in the assumptions mentioned in the above paragraph would result in a significant change in the fair value of the financial instruments included at this level.

19. TRADE AND OTHER PAYABLES

The detail of trade and other payables as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	Current						Non-current
Trade and Other Payables	12-31-2013     ThCh$		12-31-2012     ThCh$		01-01-2012     ThCh$		12-31-2013     ThCh$		12-31-2012     ThCh$		01-01-2012   ThCh$
Trade payables		97,750,747		116,926,554		105,485,376		-		-		-
Other payables		317,000,260		203,532,834		236,265,713		-		-		-
Total		414,751,007		320,459,388		341,751,089		-		-		-

The detail of trade accounts and other payables as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

	Current						Non-current
Trade and Other Payables	12-31-2013     ThCh$		12-31-2012     ThCh$		01-01-2012     ThCh$		12-31-2013     ThCh$		12-31-2012     ThCh$		01-01-2012   ThCh$
Energy suppliers		74,733,982		80,843,934		71,605,183		-		-		-
Fuel and gas suppliers		23,016,765		36,082,620		33,880,193		-		-		-
Payables for goods and services		188,337,203		115,291,665		154,619,693		-		-		-
Dividends payable to non-controlling interests		73,127,481		54,969,011		39,053,184		-		-		-
Mitsubishi contract (LTSA)		24,837,227		16,988,406		11,514,861		-		-		-
Other payables		30,698,349		16,283,752		31,077,975		-		-		-
Total		414,751,007		320,459,388		341,751,089		-		-		-

  See Note 17.4 for the description of the liquidity risk management policy.

F-85

20.  OTHER PROVISIONS

20.1 Provisions

a) The detail of provisions as of December 31, 2013, December 31, 2012, and January 1, 2012 is as follows:

Provisions	Current						Non-current
	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
Provision for legal proceedings		9,025,839		5,260,129		11,249,455		738,840		316,755	316,576
Decommissioning, restoration and rehabilitation costs (*)		-		-		-		20,267,967		19,176,517	11,677,786
Provision for suppliers and services		1,798,849		1,103,908		1,897,986		-		-	-
Provision for employee benefits		15,637,256		11,696,458		8,830,366		-		100,707	65,221
Other		18,222,721		20,364,337		14,370,123		-		-	242,056
Total		44,684,665		38,424,832		36,347,930		21,006,807		19,593,979	12,301,639

(*) See Note 3a.

b) Changes in provisions as of December 31, 2013, December 31, 2012, and January 1, 2012 are as follows:

Changes in Provisions	Legal Proceedings		Decommissioning, Restoration and Rehabilitation Costs		Other Provisions		Total
	ThCh$		ThCh$		ThCh$		ThCh$
Opening balance at January 1, 2013		5,576,884		19,176,517		33,265,410	58,018,811
Increase (decrease) in existing provisions		5,455,657		-		9,297,563	14,753,220
Provision used		(168,092)		-		(7,000,661)	(7,168,753)
Adjustment for inflation		-		1,085,205		54,712	1,139,917
Foreign currency translation		(425,371)		6,245		99,135	(319,991)
Other increase (decrease)		(674,399)		-		(57,333)	(731,732)
Total Changes in Provisions		4,187,795		1,091,450		2,393,416	7,672,661
Closing Balance al December 31, 2013		9,764,679		20,267,967		35,658,826	65,691,472
Changes in Provisions	Legal Proceedings		Decommissioning, Resoration and Rehabilitation costs		Other Provisions		Total
	ThCh$		ThCh$		ThCh$		ThCh$
Opening balance at January 1, 2012		11,566,031		11,677,786		25,405,752	48,649,569
Changes in provisions
Additional provisions		-		6,885,645		-	6,885,645
Increase (decrease) in existing provisions		3,524,703		-		4,383,278	7,907,981
Provision used		(10,754,424)		-		(10,376,890)	(21,131,314)
Adjustment for inflation		8,479,603		422,542		54,949	8,957,094
Foreign currency translation		(517,535)		190,544		(359,475)	(686,466)
Other increase (decrease)		(6,721,494)		-		14,157,796	7,436,302
Total Changes in Provisions		(5,989,147)		7,498,731		7,859,658	9,369,242
Closing Balance al December 31, 2012		5,576,884		19,176,517		33,265,410	58,018,811

F-86

21.  EMPLOYEE BENEFIT OBLIGATIONS

21.1 General information

Endesa Chile and certain of its subsidiaries in Chile, Colombia, and Argentina provide various post-employment benefits for all or some of its active or retired employees. These benefits are calculated and recorded in the financial statements according to the criteria described in Note 3.j.1, and include primarily the following:

- Defined benefit plans

Complementary pension: The beneficiary is entitled to receive a monthly amount that supplements the pension obtained from the respective social security system.

Employee severance indemnities: The beneficiary receives a certain number of contractual salaries upon retirement. Such benefit is subject to a vesting minimum service requirement period, which depending on the company, varies within a range from 5 to 15 years.

Electricity: The beneficiary receives a monthly bonus to cover a portion of his/her billed residential electricity consumption.

Health benefit: The beneficiary receives health coverage in addition to that to which s/he is entitled under his/her social security regime.

- Other benefits:

Five-year benefits: A benefit certain employees receive after 5 years; begins to accrue from the second year onwards.

Unemployment: A benefit paid regardless of whether the employee is fired or leaves voluntarily. This benefit accrues on a daily basis and is paid at the time of contract termination (although the law allows for partial withdrawals for housing and education).

Seniority bonuses in Peru: There is an agreement to give workers (“subject to the collective agreement”) an extraordinary bonus for years of service upon completion of the equivalent of five years of actual work. This benefit is given according to the following scale:

After 5, 10, and 15 years	–	1 basic monthly salary
After 20 years	–	1  1⁄2 basic monthly salaries
After 25, 30, 35, and 40 years	–	2  1⁄2 basic monthly salaries

- Defined contribution benefits:

The Group makes contributions to a retirement benefit plan where the beneficiary receives additional pension supplements upon his/her retirement, disability, or death.

F-87

21.2 Details, changes, and presentation in financial statements

a) The post-employment obligations associated with the defined benefits plan as of December 31, 2013, December 31, 2012, and January 1, 2012 are detailed as follows:

	12-31-2013     ThCh$		12-31-2012      ThCh$		01-01-2012 ThCh$
Post-employment obligations		40,868,802		39,672,411		36,041,426
Total		40,868,802		39,672,411		36,041,426
Non-current portion		40,868,802		39,672,411		36,041,426

 b) The balance and changes in post-employment defined benefit obligations during the 2013 and 2012 fiscal years are as follows:

Net Actuarial Liabilities	ThCh$
Opening Balance at January 1, 2012	36,041,426
Service cost during the period	1,158,442
Net interest cost	2,675,565
Actuarial (gains) losses from changes in financial assumptions	1,442,421
Actuarial (gains) losses from changes in seniority adjustments	2,912,635
Foreign currency translation differences	(224,096)
Contributions paid during the period	(4,334,212)
Personnel transfer	230
Balance at December 31, 2012	39,672,411
Service cost during the period	1,252,990
Net interest cost	2,546,022
Actuarial (gains) losses from changes in financial assumptions	995,219
Actuarial (gains) losses from changes in seniority adjustments	2,623,204
Foreign currency translation differences	(502,403)
Contributions paid during the period	(5,471,428)
Personnel transfer	(247,213)
Balance at December 31, 2013	40,868,802

As of December 31, 2013, of the total amount of post-employment benefit obligations, 37.77% is from defined benefit plans in Chilean companies (36.70% at December 31, 2012); 52.65% is from defined benefit plans provided by our subsidiary Emgesa in Colombia (55.60% at December 31, 2012), 8.02% is from defined benefit plans in the EASA Group in Argentina (6.06% at December 31, 2012), and 1.56% from defined benefit plans granted by Edegel in Peru (1.70% at December 31, 2012).

Group companies make no contributions to funds for financing the payment of these benefits (unfunded).

F-88

c) The following amounts were recognized in the consolidated statement of comprehensive income as of December 31, 2013, 2012, and 2011:

Expense Recognized in Profit or Loss	12-31-2013   ThCh$		12-31-2012     ThCh$		12-31-2011      ThCh$
Current service cost for defined benefits plan		1,252,990		1,158,442		2,195,700
Interest cost for defined benefits plan		2,546,022		2,675,565		2,544,632
Expenses recognized in Profit or Loss		3,799,012		3,834,007		4,740,332
Net actuarial (gains) losses		3,618,423		4,355,056		3,275,638
Total expense recognized in Comprehensive Income		7,417,435		8,189,063		8,015,970

21.3 Other disclosures

Actuarial assumptions:

As of December 31, 2013 and 2012 the following assumptions were used in the actuarial calculation of defined benefits:

	Chile		Colombia		Argentina		Peru
	31-12-2013	31-12-2012	31-12-2013	31-12-2012	31-12-2013	31-12-2012	31-12-2013	31-12-2012
Discount rates used	5.4%	6.0%	7.25%	8.00%	5.50%	5.50%	6.80%	5.55%
Expected rate of salary increases	3.0%	3.0%	4.00%	3.5% - 4.0% -  4.5%	0.00%	0.00%	3.00%	3.00%
Mortality tables	RV 2004	RV 2004	Tabla Colombiana   de Mortalidad Rentistas RV08	Tabla Colombiana de   Mortalidad Rentistas RV08	RV 2004	RV 2004	RV 2004	RV 2004

Sensitivity:

As of December 31, 2013, the sensitivity of the value of the actuarial liability for post-employment benefits to variations of 100 basis points in the discount rate assumes a decrease of ThCh$2,961,820 (ThCh$3,052,186 and ThCh$2,478,385 as of December 31, 2012 and December 31, 2011) if the rate rises and an increase of ThCh$3,508,902 (ThCh$3,608,126 and ThCh$2,918,346 as of December 31, 2012 and December 31, 2011) if the rate falls.

Defined contributions:

The total expense recognized in the consolidated statement of comprehensive income within line item “Employee expenses” represents contributions payables to the defined contribution plans by the Group. For the year ended December 31, 2013, the amounts recognized in Edegel as expenses were ThCh$425,242 (ThCh$369,442 and ThCh$325,015 for the years ended December 31, 2012 and 2011, respectively).

Future disbursements:

The estimates available indicate that ThCh$6,829,614 will be disbursed for defined benefit plans in the coming year.

F-89

Length of commitments:

The Endesa Group’s obligations have a weighted average length of 14.7 years, and the flow for benefits for the next 5 years and more is expected to be as follows:

Years	ThCh$
1	6,829,614
2	5,189,672
3	5,446,147
4	4,988,618
5	5,005,763
More than 5	31,192,615

22.  TOTAL EQUITY

22.1 Equity attributable to the shareholders of Endesa Chile

22.1.1    Subscribed and paid capital and number of shares

Endesa Chile’s share capital as of December 31, 2013 and 2012 is ThCh$1,331,714,085, divided into 8,201,754,580 fully subscribed and paid no par value shares listed at the Bolsa de Comercio de Santiago de Chile, Bolsa Electrónica de Chile, Bolsa de Valores de Valparaíso, New York Stock Exchange (NYSE), and Bolsa de Valores Latinoamericanos de la Bolsa de Madrid (LATIBEX), There has been no change in the number of shares during the years 2013 and 2012.

Capital contributions made in 1986 and 1994 resulted in share premiums amounting to ThCh$206,008,557.

22.1.2    Dividends

Endesa Chile’s Ordinary Shareholders’ Meeting held on April 26, 2012 approved a dividend policy of distributing 50% of 2012 net income in final dividends; the Board expects to comply with this policy during 2012. Furthermore, it intends to distribute an interim dividend, to be charged against 2012 net income, of up to 15% of net income as of September 30, 2012, as shown in the financial statements at that date. This interim dividend will be paid in January 2013.

In accordance with the above, the Ordinary Shareholders’ Meeting held on April 15, 2013 agreed to distribute a final dividend of Ch$14.28567 per share, for a total distribution of Ch$117,167,652,127, minus the interim dividend of Ch$3.04265 per share paid in January 2013. As a result, the amount left to be distributed to the Company’s shareholders was Ch$11.24302 per share, which was paid on May 9, 2013.

Endesa Chile’s Ordinary Shareholders’ Meeting held on April 25, 2013 approved a dividend policy of distributing 50% of 2013 net income in final dividends; the Board expects to comply with this policy during 2013. Furthermore, it intends to distribute an interim dividend, to be charged against 2013 net income, of up to 15% of net income as of September 30, 2013, as shown in the financial statements at that date. This interim dividend will be paid in January 2014.

The final dividend will be determined by the Ordinary Shareholders’ Meeting to be held in the first four months of 2014.

Fulfillment of the aforementioned dividend plan is subject to the actual net income earned by the Company during the current year, and to the results of the Company’s periodic income projections or to the existence of certain conditions, as applicable.

F-90

The following table details the dividends paid by the Company in recent years:

Dividend No.	Type of Dividend	Payment Date	Pesos per Share	Charged to
49	Interim	26-01-2011	6.42895	2010
50	Final	11-05-2011	26.09798	2010
51	Interim	19-01-2012	5.08439	2011
52	Final	17-05-2012	22.15820	2011
53	Interim	24-01-2013	3.04265	2012
54	Final	09-05-2013	11.24302	2012
55	Interim	31-01-2014	3.87772	2013

22.2 Foreign currency translation reserves

The following table details currency translation adjustments attributable to the shareholders of Enersis, in the consolidated statement of financial position as of December 31, 2013, 2012, and 2011:

Reserves for Accumulated Currency Translation Differences	December 31, 2013       ThCh$		December 31, 2012       ThCh$		December 31, 2011       ThCh$
Emgesa S.A.		90,504,354		88,701,327		85,262,487
Generandes Perú S.A.		53,817,903		53,286,339		62,331,378
Gasatacama S.A.		(5,246,916)		(16,793,138)		(9,080,092)
Hidroinvest S.A.		(5,804,721)		(5,773,653)		(5,648,808)
Endesa Argentina S.A.		(4,438,374)		(7,694,500)		(10,784,833)
Hidroelectrica El Chocón S.A.		(41,365,588)		(29,075,486)		(14,204,278)
Endesa Brasil S.A.		(133,472,462)		(107,694,718)		(13,722,525)
Others		396,213		(368,085)		(491,707)
TOTAL		(45,609,591)		(25,411,914)		93,661,622

22.3 Capital management

The Company’s objective is to maintain an adequate level of capitalization in order to be able to secure its access to the financial markets, so as to fulfill its medium- and long-term goals while maximizing the return to its shareholders and maintaining a sound financial position.

22.4 Restrictions on subsidiaries’ transferring funds to the parent

Certain of the Group’s subsidiaries must comply with financial ratio covenants which require them to have a minimum level of equity or other requirements that restrict the transfer of assets to the parent company. The Group’s restricted net assets as of December 31, 2013 from its subsidiaries Edegel and Chocón are ThCh$115,763,295 and ThCh$47,610,895, respectively.

F-91

22.5 Other reserves

Other reserves within Equity attributable to shareholders of Endesa Chile as of December 31, 2013, 2012, and 2011 are as follows:

	Balance at         January 1, 2013		2013 Changes		Balance at     December 31, 2013
	ThCh$		ThCh$		ThCh$
Exchange differences on translation		(25,411,914)		(20,197,677)		(45,609,591)
Cash flow hedges		47,991,711		(63,587,701)		(15,595,990)
Remeasurement of available-for-sale financial assets		3,629		87		3,716
Other miscellaneous reserves		(728,439,301)		(4,325,484)		(732,764,785)
TOTAL		(705,855,875)		(88,110,775)		(793,966,650)
	Balance at      January 1, 2012		2012 Changes		Balance at     December 31, 2012
	ThCh$		ThCh$		ThCh$
Exchange differences on translation		93,661,622		(119,073,536)		(25,411,914)
Cash flow hedges		17,610,043		30,381,668		47,991,711
Remeasurement of available-for-sale financial assets		3,283		346		3,629
Other miscellaneous reserves		(727,247,133)		(1,192,168)		(728,439,301)
TOTAL		(615,972,185)		(89,883,690)		(705,855,875)
	Balance at      January 1, 2011		2011 Changes		Balance at     December 31, 2011
	ThCh$		ThCh$		ThCh$
Exchange differences on translation		19,847,960		73,813,662		93,661,622
Cash flow hedges		104,200,016		(86,589,973)		17,610,043
Remeasurement of available-for-sale financial assets		49,393		(46,110)		3,283
Other miscellaneous reserves		(727,647,609)		400,476		(727,247,133)
TOTAL		(603,550,240)		(12,421,945)		(615,972,185)

— Reserves for foreign currency translation differences: These arise primarily from exchange differences relating to:

- Translation of the financial statements of our foreign operations from their functional currencies to our presentation currency (i.e. Chilean peso) (see Note 2.6.3); and

- Translation of goodwill arising from the acquisition of foreign operations with a functional currency other than the Chilean peso (see Note 3.b).

— Cash flow hedging reserves: These represent the cumulative portion of gains and losses on hedging instruments deemed effective in cash flow hedges (Note 3.f.4).

— Remeasurement of available-for-sale financial assets: These represent variations in fair value, net of their fiscal effect on the available-for-sale investments (see Note 3.f.1).

— Other reserves:

Other miscellaneous reserves include the following:

I. In accordance with (Official Bulletin) No. 456 from the Superintendencia de Valores y Seguros de Chile (SVS), included in this line item is the monetary correction corresponding to the accumulated paid-up capital from the date of our transition to IFRS, June 1, 2004, to December 31, 2008.

Please note that, while the Company adopted the IFRS as its statutory accounting standards on January 1, 2009, the date of transition to that international standard used was the same as that used by its parent company, Endesa S.A., January 1, 2004. This results from applying the exemption for that purpose in IFRS 1, “First Time Adoption”.

F-92

II. Foreign currency translation differences existing at the time of transition to IFRS (IFRS 1 exemption, First Time Adoption).

III. The effects of business combinations under common control, arising primarily from the creation of the holding company Endesa Brasil in 2005 and the merger of our Colombian subsidiaries Emgesa and Betania in 2007.

22.6 Non-controlling interests

i) The detail of non-controlling interests is as follows:

		Non-controlling Interests (% financial interest)
		Equity						Profit (Loss)
Companies	%	12-31-2013		12-31-2012		01-01-2012		12-31-2013		12-31-2012		12-31-2011
		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Emgesa S.A. E.S.P.	73.13%		686,990,638		666,924,919		644,233,119		168,793,015		147,151,839		93,951,292
Edegel S.A.A	37.54%		168,000,603		164,892,775		163,308,251		27,455,393		19,690,327		26,465,515
Chinango S.A.C.	50.03%		32,047,387		32,238,489		29,152,676		5,086,656		6,057,516		4,088,804
Endesa Costanera S.A.	30.24%		(6,824,508)		(18,741,352)		(6,904,392)		(7,540,189)		(14,333,116)		(6,831,166)
Hidroelectrica El Chocon S.A.	34.63%		28,037,024		29,800,992		33,124,809		3,811,588		4,986,375		4,210,400
Empresa Eléctrica Pehuenche S.A.	7.35%		12,756,939		12,351,472		12,852,583		8,415,147		18,934,978		8,550,930
Compañía Eléctrica Tarapacá S.A.   (1)	3.79%		14,685,635		-		-		767,739		-		-
Endesa Eco S.A.    (1)	-		-		-		-		496,749		-		-
Compañía Eléctrica San Isidro S.A.    (1)	-		-		5,630,530		-		2,344,323		1,676,998		-
Empresa Eléctrica Pangue S.A.    (1)	-		-		-		6,529,630		-		583,424		3,926,670
Others	-		152,425		153,105		163,334		(50,963)		(60,742)		(101,087)
TOTAL			935,846,143		893,250,930		882,460,010		209,579,458		184,687,599		134,261,358

(1) On May 1, 2012, Empresa Eléctrica Pangue S.A. was merged with Compañía Eléctrica San Isidro S.A. On September 1, 2013, Compañía Eléctrica San Isidro S.A. was merged with Endesa Eco S.A., and on November 1, 2013, Endesa Eco was merged with Compañía Eléctrica Tarapacá S.A. It is the latter company that legally continues to exist.

F-93

23.  REVENUES

The detail of revenues presented in the Consolidated Statement of Comprehensive Income as of December 31, 2013, 2012, and 2011 is as follows:

	Balance at
Revenues	12-31-2013       ThCh$		12-31-2012       ThCh$		12-31-2011       ThCh$
Energy sales (1)		1,845,461,249		2,188,395,130		2,225,063,605
Other sales		25,273,582		30,346		35,104
Natural gas sales		25,261,022		-		-
Sales of products and services		12,560		30,346		35,104
Other services rendered		95,169,038		66,719,884		42,740,669
Tolls and transmission		69,856,378		42,372,881		14,607,416
Metering equipment leases		75,660		91,510		83,827
Engineering services		5,054,266		3,800,188		11,896,382
Other services		20,182,734		20,455,305		16,153,044
Total operating revenue		1,965,903,869		2,255,145,360		2,267,839,378
	Balance at
Other Operating Income	12-31-2013		12-31-2012		12-31-2011
	ThCh$		ThCh$		ThCh$
Other revenues (2)		61,528,111		65,239,964		16,425,409
Total other income		61,528,111		65,239,964		16,425,409

(1) Includes ThCh$29,217,154 at December 31, 2012 from agreements corresponding to reconciliation, termination of arbitration, and settling of energy sale prices between Endesa Chile and Compañía de Papeles y Cartones (CMPC).

(2) At December 31, 2013, includes ThCh$33,846,438 (ThCh$0 at December 31, 2012) from new availability agreements in effect starting in December 2012 between our subsidiary Central Costanera S.A. and CAMMESA. In addition, in 2012 the Company recognized ThCh$2,239,336 (ThCh$7,273,992 in 2011) relating to claims under insurance policies covering the Bocamina I power plant business interruption and lost earnings with respect to the Bocamina II plant due to the plant not being operative, amounting to ThCh$ 52,817,785, both activated as a result of the February 27, 2010 earthquake that damaged these plants (see Note 14.f.5).

24.  RAW MATERIALS AND CONSUMABLES USED

The detail of raw materials and consumables used presented in profit or loss for the periods ended December 31, 2013, 2012, and 2011 is as follows:

	Balance at
Raw Materials and Consumables Used	12-31-2013		12-31-2012		12-31-2011
	ThCh$		ThCh$		ThCh$
Energy purchases		(237,676,926)		(310,584,865)		(213,593,880)
Fuel consumption		(307,849,013)		(732,310,177)		(676,035,672)
Transportation costs		(233,607,121)		(235,207,189)		(197,755,417)
Other raw materials and consumables		(51,740,512)		(40,377,697)		(51,748,050)
Total		(830,873,572)		(1,318,479,928)		(1,139,133,019)

F-94

25.  EMPLOYEE BENEFITS EXPENSE

Employee expenses recognized in profit or loss as of December 31, 2013, 2012, and 2011 are as follows:

Employee Benefits Expense	Balance at
	12-31-2013 ThCh$		12-31-2012   ThCh$		12-31-2011   ThCh$
Wages and salaries		(102,926,806)		(85,279,732)		(67,996,496)
Post-employment benefit obligations expense		(1,678,232)		(1,504,362)		(2,523,715)
Social security and other contributions		(18,619,863)		(15,453,692)		(5,246,235)
Other employee expenses		(224,857)		(218,446)		(148,774)
Total		(123,449,758)		(102,456,232)		(75,915,220)

26.  DEPRECIATION, AMORTIZATION, AND IMPAIRMENT LOSSES

The detail of depreciation, amortization, and impairment losses recognized in profit or loss as of December 31, 2013, 2012, and 2011 is as follows:

	Balance at
	12-31-2013 ThCh$		12-31-2012   ThCh$		12-31-2011   ThCh$
Depreciation		(185,735,330)		(180,930,813)		(167,026,299)
Amortization		(3,960,009)		(3,637,184)		(3,479,052)
Subtotal		(189,695,339)		(184,567,997)		(170,505,351)
Reversal (losses) from impairment (*)		(6,458,953)		(11,117,362)		(9,472,766)
Total		(196,154,292)		(195,685,359)		(179,978,117)
(*) Impairment Losses	Balance at
	12-31-2013 ThCh$		12-31-2012   ThCh$		12-31-2011   ThCh$
Reversal (loss) from impairment of financial assets (see Note 7)		140,365		1,460,736		(4,024,394)
(Loss) from impairment of goodwill (see Note 13)		-		-		(5,448,372)
(Loss) from impairment of fixed assets (see Note 14.b)		(6,599,318)		(12,578,098)		-
Total		(6,458,953)		(11,117,362)		(9,472,766)

F-95

27.  OTHER EXPENSES

Other miscellaneous operating expenses as of December 31, 2013, 2012, and 2011 are as follows:

	Balance at
Other Expenses	12-31-2013		12-31-2012		12-31-2011
	ThCh$		ThCh$		ThCh$
Professional, outsourced, and other services		(28,816,401)		(31,290,097)		(27,745,919)
Other supplies and services		(17,239,304)		(15,298,444)		(16,583,784)
Insurance premiums		(19,417,837)		(16,311,933)		(14,481,652)
Taxes and charges		(16,490,799)		(16,320,126)		(54,252,983)
Repairs and maintenance		(13,504,679)		(12,020,436)		(9,169,020)
Marketing, public relations, and advertising		(602,805)		(718,600)		(1,547,944)
Leases and rental costs		(2,581,257)		(2,519,810)		(2,630,599)
Environmental expenses		(2,414,784)		(3,213,669)		(2,652,610)
Other supplies		(3,883,844)		(3,285,377)		(1,971,253)
Travel expenses		(2,168,389)		(2,492,354)		(1,861,617)
Indemnities and fines		(5,977,302)		(640,344)		(249,257)
Total		(113,097,401)		(104,111,190)		(133,146,638)

28.  OTHER GAINS (LOSSES)

Other gains (losses) as of December 31, 2013, 2012, and 2011 are as follows:

Other Gains (Losses)	Balance at
	12-31-2013  ThCh$		12-31-2012  ThCh$		12-31-2011 ThCh$
Sale of Charrua transmission lines		2,532,438		-		-
Other assets		824,701		1,422,458		2,010,780
Total		3,357,139		1,422,458		2,010,780

F-96

29.  FINANCIAL RESULTS

Financial income and costs as of December 31, 2013, 2012, and 2011 are as follows:

Financial Income	Balance at
	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
Income from cash and cash equivalents		12,174,247		11,981,690		22,658,596
Other financial income		6,118,096		2,648,272		5,605,596
Total		18,292,343		14,629,962		28,264,192
Financial Costs	Balance at
	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
Financial Costs		(142,666,776)		(148,468,667)		(135,257,667)
Bank loans		(18,750,691)		(22,568,037)		(25,828,606)
Secured and unsecured obligations		(103,384,143)		(105,411,446)		(109,225,126)
Valuation of financial derivatives		(4,854,066)		(4,877,219)		(5,941,616)
Post-employment benefit obligations		(2,546,022)		(2,660,042)		(2,544,632)
Capitalized borrowing costs		24,518,935		23,915,042		29,922,494
Other financial costs		(37,650,789)		(36,866,965)		(21,640,181)
Gain (loss) from indexed assets and liabilities (*)		1,001,573		(1,066,291)		(5,447,396)
Foreign currency exchange differences (**)		(13,756,657)		(12,090,438)		(6,649,911)
Positive		39,657,325		15,770,201		15,446,837
Negative		(53,413,982)		(27,860,639)		(22,096,748)
Total Financial Costs		(155,421,860)		(161,625,396)		(147,354,974)
Total Financial Results		(137,129,517)		(146,995,434)		(119,090,782)

The effects on financial results from exchange differences and the application of indexed assets and liabilities originated from the following:

Results from Indexed Assets and Liabilities (*)	Balance at
	12-31-2013     ThCh$		12-31-2012     ThCh$		12-31-2011     ThCh$
Other financial assets (derivative instruments)		4,758,858		5,550,723		8,655,896
Other non-financial assets		9,064		-		-
Trade and other accounts receivable		33,883		7,754		39,420
Current tax assets and liabilities		2,640,499		2,383,296		2,100,153
Other financial liabilities (financial debt and derivative instruments)		(6,428,167)		(8,931,305)		(15,980,262)
Other provisions		(12,564)		(74,945)		(281,472)
Other current non-financial liabilities		-		(1,814)		18,869
Total		1,001,573		(1,066,291)		(5,447,396)
Exchange Differences (**)	Balance at
	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
Cash and cash equivalents		2,429,118		(1,401,939)		2,647,753
Other financial assets (derivative instruments)		27,279,969		6,276,291		2,333,430
Other non-financial assets		37,636		53,373		818,472
Trade and other accounts receivable		(3,518,849)		(420,094)		4,561,537
Current tax assets and liabilities		(3,678)		27		(519)
Other financial liabilities (financial debt and derivative instruments)		(34,837,976)		(14,401,345)		(10,086,072)
Trade and other accounts payable		(2,105,672)		(779,903)		(5,584,114)
Other non-financial liabilities		(3,037,205)		(1,416,848)		(1,340,398)
Total		(13,756,657)		(12,090,438)		(6,649,911)

F-97

30.  INCOME TAX

The following table reconciles income taxes resulting from applying the general current tax rate to “Net income before taxes” and the income tax expense recorded in the accompanying Consolidated Statement of Comprehensive Income at December 31, 2013, 2012, and 2011:

Income Tax	Balance at
	12-31-2013		12-31-2012		12-31-2011
	ThCh$		ThCh$		ThCh$
Current tax expense		(224,469,325)		(210,787,060)	(213,263,163)
Tax benefit from tax assets not previously recognized (credits and/or benefits on current tax)		30,595,472		39,920,277	20,511,576
Adjustments to current tax from the previous period		(549,020)		(1,181,146)	(301,392)
Other current tax expense		(641,266)		(409,335)	(290,463)
Current tax expense, net		(195,064,139)		(172,457,264)	(193,343,442)
Deferred tax income (expense) from origination and reversal of temporary differences		(9,853,759)		5,410,705	(13,986,454)
Deferred tax (income) or expense from tax rate changes or new taxes (*)		10,451		(15,786,397)	-
Deferred tax income (expense), net		(9,843,308)		(10,375,692)	(13,986,454)
Income tax income (expense)		(204,907,447)		(182,832,956)	(207,329,896)

The principal temporary differences are detailed in Note 15.a.

Reconciliation of Tax Expense		31-12-2013 ThCh$			31-12-2012 ThCh$			31-12-2011 ThCh$
INCOME BEFORE TAX			768,413,684			601,855,819		788,465,297
Tax expense using statutory rate	(20.00%)		(153,682,737)	(20.00%)		(120,371,164)	(20.00%)	(157,693,059)
Tax effect of rates in other jurisdictions	(7.61%)		(58,441,486)	(7.44%)		(44,774,217)	(5.03%)	(39,681,126)
Tax effect of non-taxable revenues	8.59%		66,004,129	6.56%		39,485,711	3.74%	29,473,765
Tax effect of non-tax-deductible expenses	(6.31%)		(48,467,799)	(10.06%)		(60,560,721)	(3.77%)	(29,715,812)
Tax effect from change in tax rate   (*) (**)	-		10,451	(2.62%)		(15,786,397)	-	-
Tax effect of over-provided tax in previous periods	(0.07%)		(549,020)	(0.20%)		(1,181,146)	(0.04%)	(301,392)
Current tax effects arising from investments	(1.27%)		(9,780,985)	3.38%		20,354,978	(1.19%)	(9,412,272)
Total adjustments to the tax rate and tax expense using statutory rate	(6.66%)		(51,224,710)	(10.38%)		(62,461,792)	(6.30%)	(49,636,837)
Total income tax expense using effective rate	(26.66%)		(204,907,447)	(30.38%)		(182,832,956)	(26.30%)	(207,329,896)

(*)  On July 29, 2010, Law No. 20,455 was passed in Chile, “Modifying different laws to obtain funds to finance the reconstruction of the country.” This law, which was published in the Diario Oficial (Official Gazette) on July 31, 2010, included a temporary First Category tax increase for the 2011 and 2012 business years (to 20% and 18.5%, respectively), with a return to the 17% tax rate for 2013.

Then, on September 27, 2012, Law No. 20,630, which modifies Chilean tax law to finance education reform, was published in the Diario Oficial (Official Gazette). Among other changes, this law increased the First Category tax rate from 18.5% to 20% starting in the 2012 business year.

(**)  Law No. 1607/12 on tax reform was passed in Colombia on December 26, 2012, lowering the income tax rate to 25% (except for foreign companies, whose rate remains at 33%). It also creates a new 8% tax (9% from 2013 to 2015) whose tax base is the same as that used to calculate income tax, but without the inclusion of tax benefits or special deductions.

F-98

31.  INFORMATION BY SEGMENT

31.1  Segmentation criteria

Endesa Chile’s activities are organized primarily around its core business, electric energy generation.

In addition, segment information has been organized by the geographical areas in which the Group operates:

—  Chile

—  Argentina

—  Peru

—  Colombia

Given that Endesa Chile’s corporate organization basically matches its business organization and, therefore, the segments organization, the following segment information is based on the financial information of the companies forming each segment.

F-99

The following tables present the segment information as of December 31, 2013, December 31, 2012, and January 1, 2012.

31.2 Distribution by country

Country	Chile						Argentina						Colombia						Peru						Eliminations						Total
ASSETS	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-201 2 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
CURRENT ASSETS		512,434,448		384,608,631		530,346,053		46,128,070		42,454,666		90,696,940		321,118,496		285,719,119		239,044,005		104,859,261		80,363,360		75,650,050		(19,108,619)		(11,791,860)		(16,778,408)		965,431,656		781,353,916		918,958,640
Cash and cash equivalents		56,819,763		6,284,099		199,085,264		6,729,682		6,336,505		21,658,298		227,781,003		187,772,861		136,260,140		32,476,931		35,284,268		32,764,569		-		-		-		323,807,379		235,677,733		389,768,271
Other current financial assets		23,956,079		-		47,504		-		-		143,638		59,042		25,067,909		674,506		121,357		51,876		48,561		-		-		-		24,136,478		25,119,785		914,209
Other current non-financial assets		2,132,598		5,367,448		2,695,682		2,760,874		217,513		1,189,419		7,825,842		7,515,740		7,964,428		24,546,032		4,241,546		2,458,301		-		-		-		37,265,346		17,342,247		14,307,830
Trade and other current receivables		145,727,616		143,129,548		161,715,297		24,856,149		19,901,491		54,090,162		54,561,960		35,378,529		45,507,596		22,584,515		18,439,139		16,985,155		32,682		833,884		491,931		247,762,922		217,682,591		278,790,141
Accounts receivable from related companies		116,669,764		52,491,021		64,471,072		8,699,310		11,190,308		11,034,528		13,527,398		15,211,112		35,104,241		12,154,631		9,221,914		10,509,205		(19,141,301)		(12,625,744)		(17,270,339)		131,909,802		75,488,611		103,848,707
Inventories		14,662,964		30,054,548		22,853,273		2,907,560		3,158,460		1,783,282		15,841,374		13,257,329		11,993,970		12,743,147		12,892,283		12,645,501		-		-		-		46,155,045		59,362,620		49,276,026
Current tax assets		152,465,664		147,281,967		79,477,961		174,495		1,650,389		797,613		1,521,877		1,515,639		1,539,124		232,648		232,334		238,758		-		-		-		154,394,684		150,680,329		82,053,456
NON-CURRENT ASSETS		4,020,157,839		3,820,876,662		3,875,998,850		252,145,379		274,123,433		309,917,555		1,712,544,281		1,563,308,503		1,393,219,292		773,833,383		786,613,842		812,558,136		(961,987,702)		(773,045,293)		(803,905,045)		5,796,693,180		5,671,877,147		5,587,788,788
Other non-current financial assets		2,759,880		31,436,192		11,908,939		33,548		108,154		161,140		1,260,169		1,236,511		1,205,585		6,692		524,133		216,790		-		-		-		4,060,289		33,304,990		13,492,454
Other non-current non-financial assets		41,505		41,505		76,321		12,151		1,252,852		1,099,011		-		635,776		-		-		-		-		1,342		1,342		-		54,998		1,931,475		1,175,332
Non-current receivables		-		-		162,797		128,087,762		143,949,453		148,204,236		3,509,648		3,014,698		3,241,735		-		-		-		-		-		-		131,597,410		146,964,151		151,608,768
Non-current accounts receivable from related companies		-		5,712,830		6,179,892		-		-		-		-		-		-		-		-		-		-		(5,712,830)		(6,179,892)		-		-		-
Investments accounted for using the equity method		1,739,823,985		1,523,339,947		1,564,106,793		3,246,688		3,766,317		4,695,872		-		-		-		49,498,978		51,856,848		49,887,780		(1,031,888,318)		(823,829,955)		(886,264,231)		760,681,333		755,133,157		732,426,214
Intangible assets other than goodwill		21,502,573		22,095,522		22,788,439		-		-		-		24,751,366		23,938,624		22,281,991		9,794,606		9,718,479		457,861		-		-		-		56,048,545		55,752,625		45,528,291
Goodwill		-		-		-		1,574,810		1,902,217		2,357,592		5,213,756		5,194,342		5,126,657		8,287,322		8,703,399		10,361,690		85,020,310		85,947,128		88,539,078		100,096,198		101,747,086		106,385,017
Property, plant, and equipment		2,249,977,196		2,209,655,771		2,245,565,003		117,875,481		121,684,051		152,419,707		1,618,190,483		1,469,930,901		1,302,924,129		706,245,785		713,971,669		750,111,283		-		-		-		4,692,288,945		4,515,242,392		4,451,020,122
Investment property		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Deferred tax assets		6,052,700		28,594,895		25,210,666		1,314,939		1,460,389		979,997		59,618,859		59,357,651		58,439,195		-		1,839,314		1,522,732		(15,121,036)		(29,450,978)		-		51,865,462		61,801,271		86,152,590
TOTAL ASSETS		4,532,592,287		4,205,485,293		4,406,344,903		298,273,449		316,578,099		400,614,495		2,033,662,777		1,849,027,622		1,632,263,297		878,692,644		866,977,202		888,208,186		(981,096,321)		(784,837,153)		(820,683,453)		6,762,124,836		6,453,231,063		6,506,747,428
Country	Chile						Argentina						Colombia						Peru						Eliminations						Total
LIABILITIES AND EQUITY	12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		01-01-2012 ThCh$
CURRENT LIABILITIES		660,163,628		598,505,091		351,025,320		183,233,754		211,961,695		181,542,104		229,570,429		179,614,548		220,413,976		110,158,339		80,997,179		77,444,300		55,265,285		(5,060,885)		75,595,134		1,238,391,435		1,066,017,628		906,020,834
Other current financial liabilities		127,262,132		220,356,753		64,466,046		129,629,312		129,148,163		82,987,086		65,753,442		29,534,134		113,869,956		31,088,635		27,415,986		32,976,929		-		-		-		353,733,521		406,455,036		294,300,017
Trade and other current payables		218,291,076		149,991,909		199,156,447		32,015,166		44,981,230		47,669,549		71,066,493		71,999,845		50,897,328		63,613,836		41,946,210		23,834,560		29,764,436		11,540,194		20,193,205		414,751,007		320,459,388		341,751,089
Accounts payable to related companies		244,708,240		180,556,424		26,362,834		13,530,857		27,129,873		41,348,639		28,331,191		23,917,636		14,328,510		843,027		914,067		13,875		25,500,849		(16,601,079)		55,401,929		312,914,164		215,916,921		137,455,787
Other current provisions		27,762,617		23,580,577		29,595,434		1,301,192		1,564,413		3,901,399		12,139,002		9,808,093		10,860		3,481,854		3,471,749		2,840,237		-		-		-		44,684,665		38,424,832		36,347,930
Current tax liabilities		41,604,289		23,477,747		29,897,084		5,259,200		7,755,869		5,040,483		50,014,588		42,623,796		40,779,406		7,681,274		4,516,616		14,748,267		-		-		-		104,559,351		78,374,028		90,465,240
Current provisions for employee benefits		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Other current non-financial liabilities		535,274		541,681		1,547,475		1,498,027		1,382,147		594,948		2,265,713		1,731,044		527,916		3,449,713		2,732,551		3,030,432		-		-		-		7,748,727		6,387,423		5,700,771
NON-CURRENT LIABILITIES		775,944,560		880,599,510		1,180,833,098		54,121,669		62,998,738		130,697,313		864,631,943		757,392,281		530,859,723		256,342,275		282,137,010		317,338,453		(15,121,036)		(30,407,433)		-		1,935,919,411		1,952,720,106		2,159,728,587
Other non-current financial liabilities		579,403,606		656,681,229		984,831,601		12,954,207		20,701,104		87,602,569		828,381,968		711,308,825		486,420,793		120,022,828		136,960,660		169,238,940		-		-		-		1,540,762,609		1,525,651,818		1,728,093,903
Non-current accounts payable to related companies		-		-		-		-		4,479,929		-		-		-		-		-		-		-		-		(4,479,929)		-		-		-		-
Other long-term provisions		17,426,844		16,545,029		10,317,033		-		-		-		738,840		316,755		316,576		2,841,123		2,732,195		1,668,030		-		-		-		21,006,807		19,593,979		12,301,639
Deferred tax liabilities		159,958,130		185,347,510		161,913,523		14,019,574		10,607,958		13,165,920		13,991,943		12,001,108		-		132,840,909		141,771,503		146,431,483		(15,121,036)		(29,450,979)		-		305,689,520		320,277,100		321,510,926
Non-current provisions for employee benefits		15,435,886		14,560,716		11,871,005		3,276,309		2,382,287		2,216,852		21,519,192		22,056,756		21,953,569		637,415		672,652		-		-		-		-		40,868,802		39,672,411		36,041,426
Other non-current non-financial liabilities		3,720,094		7,465,026		11,899,936		23,871,579		24,827,460		27,711,972		-		11,708,837		22,168,785		-		-		-		-		3,523,475		-		27,591,673		47,524,798		61,780,693
EQUITY		3,096,484,099		2,726,380,692		2,874,486,485		60,918,026		41,617,666		88,375,078		939,460,405		912,020,793		880,989,598		512,192,030		503,843,013		493,425,433		(1,021,240,570)		(749,368,835)		(896,278,587)		3,587,813,990		3,434,493,329		3,440,998,007
Equity attributable to shareholders of Endesa Chile		3,096,484,099		2,726,380,692		2,874,486,485		60,918,026		41,617,666		88,375,078		939,460,405		912,020,793		880,989,598		512,192,030		503,843,013		493,425,433		(1,021,240,570)		(749,368,835)		(896,278,587)		2,651,967,847		2,541,242,399		2,558,537,997
Issued capital		1,882,832,128		1,800,828,112		1,929,388,051		56,349,375		54,192,633		84,324,737		165,215,801		164,600,583		142,906,410		186,325,266		186,073,314		164,297,758		(959,008,485)		(873,980,557)		(989,202,871)		1,331,714,085		1,331,714,085		1,331,714,085
Retained earnings		1,445,149,625		1,085,463,341		1,068,812,525		(15,857,261)		(11,005,738)		(6,550,908)		543,834,488		524,280,383		128,464,532		103,895,288		75,744,989		70,760,796		(168,810,285)		34,892,657		375,300,595		1,908,211,855		1,709,375,632		1,636,787,540
Share premium		206,008,557		206,008,557		206,008,557		-		-		-		-		-		-		-		-		-		-		-		-		206,008,557		206,008,557		206,008,557
Other reserves		(437,506,211)		(365,919,318)		(329,722,648)		20,425,912		(1,569,229)		10,601,249		230,410,116		223,139,827		609,618,656		221,971,476		242,024,710		258,366,879		106,578,200		89,719,065		(282,376,311)		(793,966,650)		(705,855,875)		(615,972,185)
Non-controlling interests																																935,846,143		893,250,930		882,460,010
TOTAL LIABILITIES AND EQUITY		4,532,592,287		4,205,485,293		4,406,344,903		298,273,449		316,578,099		400,614,495		2,033,662,777		1,849,027,622		1,632,263,297		878,692,644		866,977,202		888,208,186		(981,096,321)		(784,837,153)		(820,683,453)		6,762,124,836		6,453,231,063		6,506,747,428

F-100

The following table presents the segment information for the 2013, 2012, and 2011 fiscal years.

Country	Chile						Argentina						Colombia						Peru						Eliminations						Total
STATEMENT OF COMPREHENSIVE INCOME	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$		12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
REVENUES		973,139,394		1,114,619,933		1,156,468,987		131,443,285		344,177,955		390,135,504		639,503,536		580,125,143		498,543,761		283,806,401		282,124,274		239,841,441		(460,636)		(661,981)		(724,906)		2,027,431,980		2,320,385,324		2,284,264,787
Sales		971,373,808		1,054,379,612		1,143,089,045		97,596,846		341,123,404		389,963,331		634,847,624		579,490,649		496,479,981		262,546,227		280,813,676		239,031,927		(460,636)		(661,981)		(724,906)		1,965,903,869		2,255,145,360		2,267,839,378
Energy sales		860,581,278		995,304,341		1,105,983,558		95,315,523		341,123,404		389,963,331		634,181,459		578,673,437		495,453,014		255,382,989		273,293,947		233,663,702		-		-		-		1,845,461,249		2,188,395,129		2,225,063,605
Other sales		25,273,582		30,347		35,104		-		-		-		-		-		-		-		-		-		-		-		-		25,273,582		30,347		35,104
Other services rendered		85,518,948		59,044,924		37,070,383		2,281,323		-		-		666,165		817,212		1,026,967		7,163,238		7,519,729		5,368,225		(460,636)		(661,981)		(724,906)		95,169,038		66,719,884		42,740,669
Other operating income		1,765,586		60,240,321		13,379,942		33,846,439		3,054,551		172,173		4,655,912		634,494		2,063,780		21,260,174		1,310,598		809,514		-		-		-		61,528,111		65,239,964		16,425,409
SUPPLIES AND SERVICES		(494,895,933)		(754,005,495)		(601,679,840)		(36,478,648)		(282,316,017)		(315,717,397)		(204,419,042)		(171,063,486)		(134,851,692)		(95,079,949)		(111,094,930)		(86,884,090)		-		-		-		(830,873,572)		(1,318,479,928)		(1,139,133,019)
Energy purchases		(124,419,095)		(219,329,603)		(156,532,305)		(15,687,976)		(13,485,770)		(13,740,208)		(87,695,910)		(49,214,202)		(29,508,762)		(9,873,945)		(28,555,290)		(13,812,605)		-		-				(237,676,926)		(310,584,865)		(213,593,880)
Fuel consumption		(211,612,174)		(385,360,528)		(319,628,442)		(9,173,816)		(255,215,278)		(283,048,981)		(34,870,502)		(36,215,949)		(23,946,682)		(52,192,521)		(55,518,422)		(49,411,567)		-		-				(307,849,013)		(732,310,177)		(676,035,672)
Transportation expenses		(149,447,929)		(153,277,779)		(118,743,579)		(4,541,378)		(4,899,429)		(8,165,583)		(59,719,073)		(57,311,261)		(54,452,560)		(19,898,741)		(19,718,720)		(16,393,695)		-		-				(233,607,121)		(235,207,189)		(197,755,417)
Other miscellaneous supplies and services		(9,416,735)		3,962,415		(6,775,514)		(7,075,478)		(8,715,540)		(10,762,625)		(22,133,557)		(28,322,074)		(26,943,688)		(13,114,742)		(7,302,498)		(7,266,223)		-		-				(51,740,512)		(40,377,697)		(51,748,050)
CONTRIBUTION MARGIN		478,243,461		360,614,438		554,789,147		94,964,637		61,861,938		74,418,107		435,084,494		409,061,657		363,692,069		188,726,452		171,029,344		152,957,351		(460,636)		(661,981)		(724,906)		1,196,558,408		1,001,905,396		1,145,131,768
Infrastructure work		10,625,755		8,472,680		8,391,363		2,994,025		-		-		5,001,430		4,133,486		2,187,900		360,712		157,020		18,593		-		-		-		18,981,922		12,763,186		10,597,856
Employee expenses		(63,696,383)		(51,668,845)		(46,837,103)		(28,253,598)		(22,122,227)		(18,726,175)		(18,284,458)		(15,935,879)		(13,009,393)		(13,215,319)		(12,729,281)		2,657,451		-		-		-		(123,449,758)		(102,456,232)		(75,915,220)
Other fixed operating expenses		(60,870,533)		(50,464,597)		(47,939,112)		(13,905,970)		(14,573,635)		(9,461,693)		(20,227,858)		(21,114,679)		(62,046,375)		(18,553,676)		(18,620,260)		(14,424,364)		460,636		661,981		724,906		(113,097,401)		(104,111,190)		(133,146,638)
GROSS OPERATING RESULT		364,302,300		266,953,676		468,404,295		55,799,094		25,166,076		46,230,239		401,573,608		376,144,585		290,824,201		157,318,169		139,836,823		141,209,031		-		-		-		978,993,171		808,101,160		946,667,766
Depreciation and amortization		(92,641,004)		(84,531,488)		(80,330,233)		(20,870,696)		(22,693,512)		(16,076,458)		(37,656,687)		(38,448,802)		(37,374,270)		(38,526,952)		(38,894,195)		(36,724,390)		-		-		-		(189,695,339)		(184,567,997)		(170,505,351)
Impairment reversals (impairment losses)		64,138		(11,027,857)		(4,119,978)		-		-		-		76,227		(44,846)		95,584		(6,599,318)		(44,659)		-		-		-		(5,448,372)		(6,458,953)		(11,117,362)		(9,472,766)
OPERATING INCOME		271,725,434		171,394,331		383,954,084		34,928,398		2,472,564		30,153,781		363,993,148		337,650,937		253,545,515		112,191,899		100,897,969		104,484,641		-		-		(5,448,372)		782,838,879		612,415,801		766,689,649
FINANCIAL RESULT		(62,908,296)		(63,481,231)		(45,458,360)		(36,683,640)		(27,319,008)		(18,331,475)		(26,968,562)		(38,994,215)		(44,419,835)		(8,116,368)		(16,900,095)		(10,606,999)		(2,452,651)		(300,885)		(274,113)		(137,129,517)		(146,995,434)		(119,090,782)
Financial income		3,544,993		5,440,056		14,398,117		2,824,892		2,981,596		6,772,658		11,243,116		5,192,631		6,432,904		909,512		1,235,495		863,365		(230,170)		(219,816)		(202,852)		18,292,343		14,629,962		28,264,192
Financial expenses		(77,522,891)		(66,781,258)		(55,150,074)		(18,723,405)		(19,897,247)		(18,893,327)		(38,653,807)		(43,919,634)		(50,611,555)		(7,996,843)		(18,090,344)		(10,805,563)		230,170		219,816		202,852		(142,666,776)		(148,468,667)		(135,257,667)
Gain (loss) from indexed assets and liabilities		1,001,573		(1,066,291)		(5,447,396)		-		-		-		-		-		-		-		-		-		-		-		-		1,001,573		(1,066,291)		(5,447,396)
Foreign currency exchange differences		10,068,029		(1,073,738)		740,993		(20,785,127)		(10,403,357)		(6,210,806)		442,129		(267,212)		(241,184)		(1,029,037)		(45,246)		(664,801)		(2,452,651)		(300,885)		(274,113)		(13,756,657)		(12,090,438)		(6,649,911)
Positive		26,215,267		7,585,430		14,069,358		15,593,040		8,137,994		4,840,354		740,030		407,595		389,810		618		3,196		19,821		(2,891,630)		(364,014)		(397,714)		39,657,325		15,770,201		18,921,629
Negative		(16,147,238)		(8,659,168)		(13,328,365)		(36,378,167)		(18,541,351)		(11,051,160)		(297,901)		(674,807)		(630,994)		(1,029,655)		(48,442)		(684,622)		438,979		63,129		123,601		(53,413,982)		(27,860,639)		(25,571,540)
Share of profit (loss) from associates accounted for using the equity method		109,165,914		123,917,501		126,673,587		144,312		(24,718)		249,673		-		-		-		10,036,957		11,120,211		11,932,390		-		-				119,347,183		135,012,994		138,855,650
Negative consolidation difference		-		-		-		-		-		-		-		-		-		-		-		-		-		-				-		-		-
Gain (loss) from other investments		67,385		78,184		539,283		725,672		579,029		498,877		-		-		-		-		-		-		-		-				793,057		657,213		1,038,160
Gain (loss) from the sale of property, plant, and equipment		2,446,539		13,828		475,662		-		2,032		-		310,238		187,055		70,187		(192,695)		562,330		426,771		-		-				2,564,082		765,245		972,620
NET INCOME BEFORE TAX		320,496,976		231,922,613		466,184,256		(885,258)		(24,290,101)		12,570,856		337,334,824		298,843,777		209,195,867		113,919,793		95,680,415		106,236,803		(2,452,651)		(300,885)		(5,722,485)		768,413,684		601,855,819		788,465,297
Income tax		(58,646,152)		(46,417,608)		(76,527,928)		(8,988,962)		(7,526,935)		(22,295,809)		(106,510,265)		(97,613,166)		(80,757,113)		(30,762,068)		(31,275,247)		(27,749,046)		-		-				(204,907,447)		(182,832,956)		(207,329,896)
NET INCOME AFTER TAX FROM CONTINUING OPERATIONS		261,850,824		185,505,005		389,656,328		(9,874,220)		(31,817,036)		(9,724,953)		230,824,559		201,230,611		128,438,754		83,157,725		64,405,168		78,487,757		(2,452,651)		(300,885)		(5,722,485)		563,506,237		419,022,863		581,135,401
Net income from discontinued operations		-		-				-		-				-		-				-		-						-						-		-
NET INCOME		261,850,824		185,505,005		389,656,328		(9,874,220)		(31,817,036)		(9,724,953)		230,824,559		201,230,611		128,438,754		83,157,725		64,405,168		78,487,757		(2,452,651)		(300,885)		(5,722,485)		563,506,237		419,022,863		581,135,401
NET INCOME ATTRIBUTABLE TO		261,850,824		185,505,005		389,656,328		(9,874,220)		(31,817,036)		(9,724,953)		230,824,559		201,230,611		128,438,754		83,157,725		64,405,168		78,487,757		(2,452,651)		(300,885)		(5,722,485)		563,506,237		419,022,863		581,135,401
Shareholders of Endesa Chile																																353,926,779		234,335,264		446,874,043
Non-controlling interests																																209,579,458		184,687,599		134,261,358

F-101

32.   THIRD PARTY GUARANTEES, OTHER CONTINGENT ASSETS AND LIABILITIES, AND OTHER COMMITMENTS

32.1 Direct guarantees

Creditor of Guarantee	Debtor			Assets Committed				Balance Pending at							Guarantees Released
	Name	Relationship	Type of Guarantee	Type	Currency	Accounting Value		Currency	12-31-2013		12-31-2012		01-01-2012		2013		Assets		2014		Assets		2015		Assets
Mitsubishi	Endesa Costanera	Creditor	Pledge	Combined cycle	ThCh$		24,374,559	ThCh$		73,830,430		67,546,660		73,262,031		-		-		-		-		-		-
Credit Suisse First Boston	Endesa Costanera	Creditor	Pledge	Combined cycle	ThCh$		10,725,737	ThCh$		3,147,660		4,799,600		5,192,000		-		-		-		-		-		-
Banco de la Nación Argentina	Endesa Costanera	Creditor	Pledge on collection and others	Collection CAMMESA accounts	ThCh$		521,832	ThCh$		521,832		2,902,660		-		-		-		-		-		-		-
Citibank N.A.	Endesa Chile	Creditor	Pledge	Current acct. deposit	ThCh$		1,049,220	ThCh$		796,448		-		-		-		-		-		-		-		-
Various creditors	Edegel	Creditor	Pledge	Real estate and equipment	ThCh$		-	ThCh$		-		-		7,127,904		-		-		-		-		-		-
Scotiabank	Chinango	Creditor	Pledge	Collections	ThCh$		-	ThCh$		-		-		16,095,200		-		-		-		-		-		-
Banco Santander (security agent)	G.N.L. Quintero	Associate	Pledge	Shares	ThCh$		4,789,060	ThCh$		102,302,517		97,034,059		109,265,974		-		-		-		-		-		-

As of December 31, 2013, December 31, 2012, and January 1, 2012, the amount of the Group’s property, plant, and equipment pledged as collateral for liabilities amounted to ThCh$35,100,296, ThCh$ 57,129,918, and ThCh$154,141,593, respectively.

As of December 31, 2013, Endesa Chile had future energy purchase commitments totaling ThCh$657,570,340 (there were none at December 31, 2012).

32.2 Indirect guarantees

	Debtor		Assets Committed			Balance Pending at							Guarantees Released
Creditor of Guarantee	Name	Relationship	Type of    Guarantee	Currency	Accounting Value	Currency	12-31-2013		12-31-2012		01-01-2012		2013		Assets		2014		Assets		2015		2016
Bonds and bank loans	Chinango	Subsidiary	Guarantee	ThCh$	9,061,826	ThCh$		4,692,397		15,245,788		21,533,733		-		-		-		-		-		-

F-102

32.3 Lawsuits and Arbitrations Proceedings.

As of the date of these consolidated financial statements, the most relevant litigation involving the Group companies are as follows:

a) Pending lawsuits of Endesa Chile and Subsidiaries

1. In 2005, three lawsuits were filed against Endesa Chile, the Government of Chile and the Chilean General Water Affairs Bureau (the “DGA”), currently being treated as a single proceeding, requesting that DGA Resolution 134, which established non-consumptive water rights in favor of Endesa Chile to build the Neltume hydroelectric station project be declared null as a matter of public policy, with compensation for damages. Alternatively, damages were sought for the detriment allegedly sustained by the plaintiffs due to the loss of their status as riparian owners along Pirehueico Lake, as well as due to the devaluation of their properties. The defendants have rejected these allegations, contending that the resolution complies with all legal requirements, and that the exercise of this right does not cause any detriment to the plaintiffs, among other arguments. The sums involved in these suits are undetermined. This case was joined with two other cases: the first one is captioned “Arrieta v. the State and Others” in the 9th Civil Court, docket 15279-2005 and the second is captioned “Jordán v. the State and Others”, in the 10th Civil Court, docket 1608-2005. With regard to these cases, an injunction has been ordered against entering into any acts and contracts concerning Endesa Chile’s water rights related to the Neltume project. In terms of the status of this proceeding, the regular evidence period has ended and the parties have been summoned to hear the judgment. The resolution that summons the parties to hear the judgment is currently challenged by the State Defense Council, which seeks to leave without effect and in turn resolve the incident of accumulation of proceedings, which is pending to date.

2. During 2010, three lawsuits for damages were filed against Endesa Chile by plaintiffs alleging that they were affected by the flooding of the Bio-Bio River in Region VIII. The plaintiffs sued Endesa Chile for losses caused by its deficient operation of the Ralco hydroelectric station during the flood. These three cases were joined, and a first instance ruling has been issued which denies the claim filed in all its parts. The ruling was appealed and such appeal has not yet been reviewed by the court. The plaintiffs are required to produce legal evidence proving the causal link between the operation of the Ralco hydroelectric station during the floods and the damages that the plaintiffs claim they sustained as a result of deficient facility operation. Regarding the status of the proceedings, on March 27, 2012, there was a first instance judgment filed, which rejects the claim filed in all its parts. The plaintiff filed an appeal on March 12, 2013, where the Court of Appeals ordered proceedings to supplement the judgment, since there were exceptions and defenses that were not resolved in the first instance judgment. On May 2, 2013, the first instance Court of Law filed a supplementary judgment, referring to the exceptions and defenses that were not resolved in the first initial judgment. To date the proceeding is once again in the Court of Appeals of Concepción to be heard and in order to rule on the appeals filed.

The amount involved in the three lawsuits currently pending against Endesa Chile is Ch$ 14,610 million. It is worth noting that the total risk of these proceedings is covered by an insurance policy.

3. In July and September of 2010, Ingeniería y Construcción Madrid S.A. and Transportes Silva y Silva Limitada, respectively, filed separate lawsuits against Endesa Chile and the Chilean General Water Affairs Bureau (the “DGA”), seeking to declare the annulment of DGA’s administrative resolution 134 that granted Endesa Chile’s water rights for the Neltume hydroelectric station. Similarly, Ingeniería y Construcción Madrid S.A. and Transportes Silva y Silva Limitada, respectively, each filed suits against DGA’s administrative resolution 732 that authorized the relocation of the collection point of such rights null as a matter of public policy. Ultimately, the plaintiffs attempted to demand payment for their water rights located in the area of influence of the hydraulic works for the future Neltume station. Endesa Chile has rejected these claims, contending that the plaintiffs are engaging in wrongful prosecution to prevent the construction of the station in order to obtain monetary compensation. As to the status of the two lawsuits, it is worth noting that in the complaint filed by Ingeniería y Construcción Madrid S.A. (Case No. 7036-2010), the discovery period has expired, and the parties have been summoned to hear judgment. Regarding the other lawsuit (Case No. 6705-2010), requesting the annulment of DGA resolution 732, on March 12, 2012 a ruling was issued that declared the proceeding as abandoned. Afterwards, on June 27, 2012, Ingeniería y Construcción Madrid, filed a similar claim before another Court of Law (Role C-15156-2012), proceeding in which the discussion period and the regular evidence period have ended. To date, the testimony obstruction alleged by Endesa Chile is still pending resolution, in order to obtain an extraordinary evidence stage, that allows rendering evidence of the witnesses that are still pending.

F-103

On the other hand, in the legal suit filed by Transportes Silva y Silva Ltda, (Case No. 16025-2012), which contests DGA resolution 134, the proceeding was declared as abandoned. In another suit filed (Case No. 17916-2010), a similar request was made for the action to be declared as abandoned, however this request was denied. The plaintiff has filed an appeal against such sentence, which was accepted on May 10, 2013, declaring the proceeding as abandoned. The resolution is firm and executed. The amount of this proceeding is indeterminate.

4. On May 24, 2011, Endesa Chile was served with a lawsuit filed by 19 riparian owners along the Pirihueico Lake, seeking to declare null DGA Resolution 732, which authorized the relocation of water catchment rights for the Neltume station, from the Pirihueico Lake 900 meters downstream along Fui River. The plaintiffs seek to have this annulment annotated at the margin of the notarized instrument that memorialized DGA Resolution 732, which approved the transfer of the catchment. The plaintiffs also seek to have the recordation of said instrument struck from the waters registry, if entered, and to require the Chilean Government, the DGA and Endesa Chile to pay damages to the plaintiffs as a result of the challenged DGA resolution, seeking to reserve their right to indicate the type and amount of damages in subsequent legal proceeding. The claim is for an undetermined amount since the plaintiffs have requested that damages be determined in another suit, once the DGA’s administrative resolution is declared null and void. To date, the discussion period has ended and the evidence writ has been issued, which when received by the parties was the object of a replacement appeal filed by the plaintiff and an annulment petition filed by Endesa Chile, which were both rejected. The proceeding was suspended by mutual agreement until March 9, 2013, after which the proceeding began again. On August 20, 2013 the conciliation hearing that was pending happened, without arriving to a conciliation. To date, the regular evidence period has expired. The expert examination process is still pending.

5. On October 24, 2012, Endesa Chile filed suit against Minera Lumina Copper Chile (hereinafter MLCC) before an arbitration court of law so that it can declare electric power and energy purchase - sale contract entered into by and between Endesa Chile and MLCC, on June 22, 2010 terminated, grounded on the fact that complying with the supplying and selling electric power and energy to MLCC had become highly onerous for Endesa Chile breaking the economic balance of economic services for both parties. In subsidy, the arbitration court of law is requested to review and/or adjust MLCC’s supply service, in subsidy of the latter, to declare the MLCC’s obligation to pay for Endesa Chile’s energy and electric power supply at the cost that the latter bears for serving the contract. Finally, it is requested that the court order the defendant to pay for all of Endesa Chile’s detriment on executing the contract. The arbitration proceeding is seen before the Arbitrating Judge Arturo Yrarrázabal. Regarding the proceeding status, on August 13, 2013, the case enters into the evidence period. The parties by mutual agreement decided to suspend the proceeding from August 23 to September 27, 2013, both dates inclusive. The evidence term expired on November 29, 2013, pending performing the expert review that the arbitrator judge decreed.

6. The arbitration proceeding will be heard by the International Chamber of Commerce (ICC), hereinafter the Chamber, under the framework of the Bocamina Thermal Power Plant Extension Project Contract for the turnkey supply of a coal thermal generation plant, located in Coronel, Eighth Region of Chile, signed in July 2007 between Endesa Chile and the Consortium formed by Ingeniería y Construcción Tecnimont Chile Compañía Limitada, Tecnimont SpA, Tecnimont do Brasil Construcao e Administracao de Projetos Ltda., Slovenske Energeticke Strojarne a.s. (SES) and Ingeniería y Construcción SES Chile Limitada.

As a result of material breaches of the Consortium, for not finishing the works according to the terms and conditions agreed and within the time period stipulated in the Contract and its supplementary documents, on October 16, 2012 Endesa Chile went on, strictly complying with the conditions authorized in the Contract for such purpose, to collect the performance bonds, and in particular, those issued by Banco Santander Chile for US$ 93,992,554 (approximately Ch$ 49,309 million) and the one from Credit Agricole for US$ 18,940,294.84 (approximately Ch$ 9,936 million). To date Endesa Chile has only been able to collect the performance bonds issued by Banco Santander Chile.

Upon collection of the aforementioned performance bonds, Endesa Chile filed before the Chamber (Role 19015/CA) a request for arbitration to obtain the forced compliance of the Contract plus compensation for damages, and, as a subsidiary request, termination of the Contract with compensation for damages. In both cases, Endesa Chile reserved the right to file litigation regarding the amount and sum of the damages at a later stage. Endesa Chile based its claim on the serious non-compliance of the Consortium, among which are the following: Material breach of the contractual

F-104

date of the end of the works, the lack of payment to subcontractors and suppliers, which has forced Endesa Chile to take on part of their commitments, all of the above in order to avoid a situation of total stoppage of the works; material breach of the schedule of intermediate control stages agreed to; breach of the “Open Book” delivery time period of the works; as well as a lack of compliance with safety and environmental standards agreed to and the administrative standards proscribed for managing the Contract, among other material breaches by the Consortium.

In turn, SES filed legal actions before the Chamber (Role 1924/CA) requesting that the collection of the performance bonds that Endesa Chile carried out be declared illegal.

On January 4, 2013, Endesa Chile notified the Consortium of the anticipatory termination of the Contract due to material breach of its obligations, all of the above according to the norms prescribed in the Contract.

In terms of the status of the proceedings, in January 2013, the members of the Consortium SES- TECNIMONT, separately, have contested the request for arbitration filed by Endesa Chile and along with that, have filed a suit against Endesa Chile for US$ 1,294 million (approximately Ch$ 678,845 million), in Tecnimont’s case, and for US$ 15 million (approximately Ch$ 7,869 million), in SES’s case. On March 26, 2013, Endesa Chile answered the counterclaims filed against the company, requesting their rejection since they are inadmissible and inappropriate.

The proceeding filed by SES (Role 1924/CA) was consolidated with the arbitration proceeding described herein above. On June 21, 2013, upon request of the arbitration court, the bases of the procedural proposals or simultaneous procedure were filed in a clear and precise manner as well as their respective proposed schedules. On July 2, 2013, the procedural order that established the procedural rules whereby the proceeding will be conducted was approved. Dated December 2, 2013 the parties exchanged legal suit briefs. In turn, Endesa Chile requested in its Suit Brief that the arbitrational court declare the contractual non-compliance of the defendants, attributable to serious fraud or negligence by them or, subsidiary, to culpa grave, and that the contract term be recognized due to the cause of the “Contractor’s Non-Compliance”. Grounded on the above, it requests that the presentation of collecting the bond performance bonds given by Endesa Chile is according to the law and requests sentencing the defendants to fines and detriment, amounting in total to US$ 373,269,376 (approximately Ch$ 195,821 million). After filing their claim briefs, the parties will be able to file their contest records. Taking into consideration the extension requested by Tecnimont the term to object the documents is pending to date.

7. On August 22, 2013, the companies Endesa Chile, Pehuenche and San Isidro filed before the Court of Appeals of Santiago an electrical illegality claim against the Chilean Superintendency of Electricity and Fuels(SEF), due to the decree of legal writ ORD No. 7230, dated August 7, 2013, which, relying on its interpretative and supervisory faculties, decreed that the consumption surpluses over the contracted supply that the distributing companies incur, in regards to the generators that are forced by means of a bid to carry out supply, must be covered with the surpluses in the bids of the other generating companies in reference to its distributors, for whose effect the distributors with surpluses can assign their surpluses to the distributors which have deficits, irrespective of the will of the respective generator, which is contrary to the Law and exceeds SEF’s faculties and authorities, resulting in an illegal resolution.

In terms of the status of this proceeding, in the three illegality claims it was requested that an injunction be declared, which was denied in the San Isidro and Pehuenche suits and instead was granted in the Endesa Chile suit. With the aforementioned, the aggravated effects are suspended of the challenged SEF order. Finally, it was resolved in an effort to achieve the objective, that the effects of the injunction are communicated to all the companies. To date, it has been heard and is in agreement for sentencing.

8. In August 2013 the Superintendence of the Environment filed charges against Endesa Chile, due to a serious of violations to Exempt Resolution No. 206, dated August 2, 2007 and its supplementary and clarifying resolutions that environmentally qualify the “Bocamina Thermal Power Plant Extension Project (“Proyecto Ampliación Central Térmica Bocamina”). These violations are related to the cooling system discharge channel, not having operational the Bocamina I Desulphurizer, the non-forwarding of information, surpassing the CO limit for Bocamina I imposed for Bocamina II during January 2013, failures in the perimeter acoustic closing of Bocamina I, emitting noise, and not having technological barriers that impede massive entrance of Bio-mass in the power plant intake. Endesa Chile submitted a compliance program that was rejected. On November 27, 2013, the Superintendence of the Environment reformulated the charges filed adding two new ones to those already filed. Endesa Chile has presented its defense in December 2013, which partially recognizes some of these violations (in order to reduce the fine 25%, in case they are recognized) and contesting the rest. Endesa is waiting to hear the decision of the Superintendence of the Environment.

F-105

On the other hand, in December 2013, fishermen’s and algae collectors’ trade unions and related activities of Coronel, among others, filed two protection recourses against Endesa Chile before the Court of Appeals of Concepcion. The first is grounded on the fact that Endesa Chile would be operating Unit II of the Bocamina Thermal Power Plant, without having, in the opinion of the parties filing the claim, the environmental qualification for its operation, and second, that it would not have the Desulphurizing Plant operational for the operation of Unit I of the Bocamina Power Plant, according to what is demanded by the Environmental Qualification Resolution. The parties filing the claim attached a copy of the penalizing procedure pursued before the Superintendence of the Environment. The plaintiffs obtained in the first of these recourses a cautionary measure (temporary injunction against further process), which orders stopping the operation of the Generating Unit II of the Bocamina Power Plant. Endesa Chile, in turn, requested releasing this temporary injunction against further process, petition that was rejected by the Court. Similarly, it filed its response to both recourses, contributing background information for their rejection. Both recourses to date are accumulated pending their processing and pending there being heard by the Court of Appeals of Concepción and, therefore, Unit II continues to be detained.

9. In January and February, 2013, the Municipality of Huasco, and others, filed 4 protection recourses, against Agreement No. 17/2012, of the Honorable Ministers Committee that is referred to in Article No. 20 of Law 19,300, of the Terms and Conditions of the Environment, which based on a claim filed by Endesa Chile, against the Service Resolution of the Environmental Assessment that rejects the environmental authorization of the Punta Alcalde Thermal Project, accepts the claim ordering the project’s favorable environmental qualification. Such agreement was published on January 17, 2013, and in the opinion of the claimants violates the constitutional guarantee of living in an environment free from pollution. The four protection recourses correspond to Roles 59-2013, 7947-2013, 8413-2013 and 8795-2013, in terms of which their joint view was ordered one after the other. Once their view has been done, dated August 1, 2013 a resolution was sentenced that accepts the protection recourses and orders the Ministers’ Committee to hold a new hearing, in order to ground according to law, which is why the functioning of the Central Pta. Alcalde (Alcalde Power Plant) is authorized. Against such resolution, both the Government of Chile as well as Endesa Chile filed an appeal recourse, which to date is still pending sentencing before the Supreme Court. The amount of these prudential procedures is undetermined.

10. In 2001, a lawsuit was filed against the Colombian generation subsidiary Emgesa S.A. E.S.P., Empresa de Energía de Bogotá S.A. E.S.P. (“EEB”) and Corporación Autónoma Regional, by the inhabitants of Sibaté, Department of Cundinamarca. The lawsuit seeks to make the defendants jointly and severally liable for the damages arising from the pollution of the El Muñá reservoir, as a result of Emgesa’s pumping of polluted waters from the Bogotá River. Emgesa has challenged these allegations, establishing that it is not liable for these damages, arguing, among other things, that it receives already polluted waters, among other arguments. The initial demand of the plaintiffs was for approximately 3 trillion Colombian pesos, which is equal to approximately Ch$ 816,798 million. Emgesa petitioned for the joinder of numerous public and private entities that dump into the waters of the Bogotá River or that in any way or another have responsibility for the environmental management of this river’s basin, with respect to which petition the Third Section of the State Council resolved to have some of these companies joined as defendants. In January 2013 answers that were filed by several of the defendants against the complaint and in June 2013 the petition for annulment of what was done in the proceeding was resolved to be denied as out-of-order. Currently the prior exceptions resolution and call to the conciliation hearing are still pending in the proceedings.

11. The fiscal authority in Peru SUNAT questioned a EDEGEL in 2001, through Taxes and Fine Resolutions, on the way of depreciating assets valuation. SUNAT did not take into account the depreciation deduction corresponding to a greater part of the superior value allocated to assets in the voluntary re-evaluation performed in 1996, as an expense in the calculation of the company’s income tax. The amount of the appraisal rejected by SUNAT is related with financial interests paid by the company during the energy plants construction phase. The position of the taxing administration is that Edegel has not shown the following in a concluding manner: ( i ) that it is necessary to obtain financing for building power plants that were later re-evaluated or ( ii ) that such financing has effectively been incurred upon. The company’s position is that SUNAT cannot demand such evidence in order to question the company re-evaluation performed, and that it corresponds to when such re-evaluation has been performed and not the historical value of goods. In this case, the valuation method considers that power plants of such magnitude are built with financing. If SUNAT did not agree with the valuation, it should have opposed its own appraisal, which it did not do. In February 2012, the Fiscal Court of Law (TF, as per its acronym in Spanish) sentenced in the case of the of the 1999 Income Tax accounting period, in favor of the company regarding two of its power plants and against the company in regards to four of them, based on the argument that only in the case of the first two, it was verified that there was financing. Thus

F-106

the TF ordered SUNAT to calculate debt again according to the established criteria. In June 2012, Edegel paid the debt calculated by SUNAT (11 mm €); the amount will be recovered if there are favorable sentences in the following litigations Edegel has filed: (i) Administrative Contentious Claim to the Judicial Power against TF’s sentence, filed in May 2012 (it would correspond to a total return) ii) Partial appeal against the calculation that SUNAT has performed in order to comply with TF’s sentence, based on the fact that the recalculation that SUNAT has performed is incorrect, filed in July 2012 (it would correspond to a partial return). In reference to the Administrative Contentious Claim: In August 2013, the Judicial Power notified Edegel on the correction of procedure errors (Procedural Remediation Resolution). In this Resolution, the Judicial Power denied some of Edegel’s petitions regarding the grounds of its legal inadmissibility. Edegel filed an appeal to annul this Resolution, for being inappropriate (there is a lack of adequate motivation) and because it was issued out of time. In conclusion, the proceedings status is the following: For the 1999 accounting period, the annulment recourse that Edegel filed is pending resolution by the TF. For the 2000-2001 accounting periods, the company will file new evidence found in order to reduce the “part that would be lost” from 6 mm € to 1.3 mm €. The TF can declare that the evidence is inadmissible since it is out of time. The sum of these claims amounts to S/. 116,388,902 (approx. M$ 21,845,718).

12. A Class Action has been filed by the people of the Municipality of Garzón, based on the fact that due to the construction of the hydroelectric project El Quimbo, their income from handicraft or entrepreneurial activities have been decreased by an average of 30%, which decrease was not considered when the project’s social-economic impact report was drafted. Currently, the number of plaintiffs amounts to 1,900 persons. Emgesa rejects these allegations based on: its allegation that the social-economic impact report complied with all the methodological criteria, including giving all interested parties the opportunity to comment on the report; the fact that the plaintiffs are not residents and for this type of people, compensation are only allowed for those whose income are mainly derived from their activity in the El Quimbo project’s direct area of influence; and that compensation must not be beyond the “first link” of the production chain and must be based on the status of the income indicators of each affected person. In terms of the proceeding status, the conciliation hearing has been held, ending in failure. Afterwards, a resolution was sentenced decreeing the evidences requested by the parties, against which reconsideration recourses were filed, currently pending. It is equally worth mentioning that on August 24, 2013 a document was signed by the Colombian State, Emgesa and the population of the area for the creation of a Governance Structure, a forum for dialogue and coordination that has the purpose of dealing in an efficient manner with the social and environmental conflicts generated in the development of the El Quimbo hydroelectric project and preventing any others that could arise. The amount involved in this proceeding is estimated to be approximately 93 thousand million Colombian pesos (approximately Ch$ 25,321 million).

b) Pending lawsuits in associates and joint ventures

Endesa Brasil and Subsidiaries:

1. In Brazil, Basilus S/A Serviços, Empreendimentos e Participações (successor of Meridional S/A Serviços, Empreendimentos e Participações starting 2008) is the title holder of the rights it acquired from the construction companies Mistral and CIVEL, which had a civil works contract with Centrais Elétricas Fluminense S.A. (CELF). This contract was terminated before CELF’s privatization process. Since CELF’s assets were transferred to Ampla during the privatization process, Basilus (previously Meridional) sued Ampla in 1998, contending that the referred to assets had been transferred in detriment of its rights. Ampla only acquired assets from CELF, but is not its successor-in-interest since CELF, a state-owned company, still exits and maintains its legal capacity. The plaintiff demanded payment of pending invoices and contractual penalties for termination of the civil works contract. In March 2009, the court decided in favor of Meridional, and Ampla and the State of Rio de Janeiro filed the corresponding appeals. On December 15, 2009, the State Court accepted the appeal and overturned the lower court’s decision obtained by the plaintiff, in Ampla’s favor. Basilus filed an appeal against the resolution, which was denied. In July 2010, the plaintiff filed a new Appeal under Specific Court Regulations (“Agravo Regimental”) with the Superior Court of Justice of Brazil, which the court also denied in late August 2010, ruling it was groundless. In order to overturn such decision, Meridional filed a Petition for Writ of Mandamus (Mandado de Seguranca), which was also denied. In June 2011, Meridional filed an Appeal to Petition Clarification of the Decision (Embargos de Declaração) in order to clarify an omission by the Superior Court of Justice in the decision on the Petition of Writ of Mandamus, which was not accepted by the court. Against this decision, Meridional filed a Regular Appeal (Recurso Ordinario) before the Superior Court of Justice (in Brasilia). On March 28, 2012 the Reporting Justice decided the Regular Appeal in favor of Meridional.

F-107

Ampla and the State of Rio de Janeiro filed an Appeal under Specific Court Regulations against the Reporting Justice’s decision, which was accepted by the First Court Room of the Superior Court of Justice on August 28, 2012, determining that the Regular Appeal of the Petition of Writ of Mandamus must be submitted to the full Court and not only by one single Justice. The plaintiff (Meridional) challenged the decision. The sentence of August 28, 2012 was published on December 10, 2012, once the Amendment of Judgment (Embargos Declaração) had been filed by Ampla and the State of Rio de Janeiro to remedy the existing error in its publication, in order to avoid future divergence. The plaintiff filed its response to the embargoes and on May 27, 2013 the Embargos de Declaração filed by Ampla and the State of Rio de Janeiro were accepted and the error corrected. Consequently, the proceeding is in its second legal instance with a sentence favorable to Ampla and there are pending proceedings before the Superior Court of Law. The amount involved in this trial is estimated to be approximately R$ 1,052 million (approximately Ch$ 235,589 million).

2. In 1996, 45 workers filed a suit requesting reinstatement to their employment positions with Enersis’s Brazilian distribution company, Ampla. Ampla obtained a favorable ruling in 2003. The Higher Labor Court of Law acknowledged that the early retirement terminated the work contracts. Later based on some rulings that recognized that inclusion in voluntary advanced retirement programs do not terminate the associated work contract, the workers filed a “rescissory suit” before the Higher Labor Court of Law grounded on the aforementioned rulings. The plaintiffs dismissed from Ampla are attempting to be reinstated by the company and that the stability guarantee based on the regulatory resolution of the old Energy Secretary of the State of Rio de Janeiro be applied. Ampla’s defense, in the course of this proceeding, is attempting to uphold the unconstitutionality of the legislative resolution and the consequent non-existence of the stability right, regardless of whether the voluntary early retirement cancels the work contract or not. In terms of the proceedings Ampla alleged that the right of the plaintiffs to file a rescissory suit had expired, which allegation was accepted and the resolution that had caused the reinstatement of the plaintiffs in Ampla was revoked.

Against the aforementioned allegations, the plaintiffs filed an extraordinary appeal before the Supreme Federal Court, which was rejected. Such rejection was appealed by the plaintiffs in August 2013 and the decision of these appeals is currently pending. The amount involved in this proceeding is estimated to be R$ 125 million (approximately Ch$ 27,993 million).

3. Companhia Brasileira de Antibióticos (“Cibran”) filed suit against Enersis’s Brazilian distribution subsidiary, Ampla, for damages for the loss of products and raw materials, machinery breakdown, among other things, which allegedly occurred as a result of poor service provided by Ampla between 1987 and May 1994. Cibran is also seeking payment of punitive damages. This litigation is in the trial stage and has been joined with various other claims filed by Cibran against Ampla, including five other actions for smaller amounts based on power outages allegedly caused by Ampla, in the period from 1987 to 1994, 1994 to 1999 and part of 2002. These proceedings are in the first instance. The judge decided to conduct a single expert assessment for these various claims, which was in part adverse to Ampla. Ampla challenged such assessment, and requested a new expert assessment. On September 5, 2013 the judge rejected the prior petition, against which Ampla filed Appeals to Petition Clarification of the Decision, which are pending review by the court. The amount involved for all these cases is estimated to be approximately R$ 150 million (approximately Ch$ 33,591 million).

4. In December 2001, the article of the Brazilian Federal Constitution used by Ampla to claim an exemption from the COFINS (Contribuicao para o Financiamento da Seguridade Social, a tax levied on revenues) tax was amended. Ampla only started to pay the COFINS tax beginning in April 2002 because it believed that the changes in law are effective 90 days after they are published. However, the Federal Revenue (Receita Federal) argued that this constitutional norm applies only to amendments at the level of statutes, but not to those made to the Federal Constitution itself, which would apply immediately. In November 2007, the appeal was decided at the administrative appeals level (Consejo de Contribuyentes, Taxpayers Council), against Ampla. In October 2008, Ampla filed a special appeal that was denied. On December 30, 2013, Ampla was notified on the decision that Ampla’s argument that the COFINS payment was undue in the December 2001 to March 2002 period was not accepted since there is a provision in the Constitution that legislation changes are effective 90 days after they are published. Ampla will continue to recur before the courts of law, which is why it will have to previously guarantee the taxing debt (depending on the formula adopted, the guarantee will increase to 30%, totaling €45.5 thousand). The sum amounts to R$114 million (approximately Ch$ 25,529 million).

F-108

5. After the definite sentence in favor of Enersis was decreed in 2010 regarding COFINS immunity, in which the Public Treasury tried to revoke through a “rescission action” a firm and executed sentence in August 1996 in favor of Ampla protecting it from paying COFINS (until 2001 when the constitution was amended to expressly levy electric power operations with this tax), Ampla has resumed a proceeding filed in 1996 that had been suspended while the first litigation was processed, requesting refund of COFINS’ payments from April 1992 to June 1996, based on the firm sentence in its favor regarding that immunity is applicable to prior accounting periods and therefore that they have the right to get refund of what was paid in an undue manner. In June 2013, there was a first sentence in Ampla’s favor declaring the right to receive refund of the amounts COFINS paid for all the accounting periods requested. The Public Treasury filed an appeal against the sentence before the Court of Río de Janeiro. The sum Ampla requests refund amounts to R$ 157 million (approximately Ch$ 35,159 million).

6. In order to fund its investment in Coelce in 1998, Ampla issued long-term debt abroad through securities called Fixed Rate Notes (FRNs) which were governed by a special tax regime whereby interest payments received by non-resident holders were exempt from taxation in Brazil, so long as the debt was issued with a minimum maturity of 8 years. In 2005 the Brazilian Taxing Administration notified Ampla through a tax resolution that it had declared the non-applicability of the special tax regime based on its understanding that it had implicitly caused advanced amortization payments before the required maturity, because Ampla had received financing in Brazil which it allocated to the FRN holders. In Ampla’s opinion, they are two independent legally valid transactions. The non-applicability of the regime assumes that Ampla would have failed to comply with its obligation to retain the tax and deposit it in respect of interest payments made to non-resident holders. The tax resolution was appealed and in 2007 the Consejo de Contribuyentes (Taxpayers Council) annulled it. However, the Brazilian Taxing Administration contested this decision before the Superior Chamber of Fiscal Resources (Cámara Superior de Recursos Fiscales), the final administrative tribunal, and on November 6, 2012 it issued a judgment against Ampla. The decision was notified to Ampla on December 21 and on December 28, 2012; Ampla filed an Appeal to Petition Clarification of the Decision before the Chamber in order to clarify a final resolution regarding contradictory points of the judgment and that the relevant defense arguments that were omitted be incorporated. On October 15, 2013 Ampla was summoned to hear the decision that rejected the clarification recourse (“Embargo de Declaración”) filed on December 28, 2012. With the above, Ampla filed a cautionary legal action in order to assure obtaining certification of fiscal regularity allowing Ampla to continue receiving public funds, which is why the taxing debt had to be previously guaranteed (guarantee insurance, where the guarantee is increased 30%, totaling €338 million).

The judge rejected Ampla’s provisional decision request to accept the guarantee insurance. Ampla will file recourse before the Court of Law of Río de Janeiro to try to change the decision. It is important to state that the final negative resolution of the Superior Court will imply opening a criminal proceeding against certain Ampla employees and administrators (since the Council ratified the existence of simulation). The sum amounts to R$847 million (approximately Ch$ 189,680 million).

7. In 2002, the State of Rio de Janeiro issued a decree establishing that the ICMS (an equivalent of the Chilean Value Added Tax) should be paid on the 10th, 20th and 30th days of the same month of the accrual. Ampla continued paying ICMS in accordance with the previous system (on the 5th day of the month following its accrual) and did not adopt this system between September 2002 and February 2005 due to cash flow problems. Additionally, Ampla filed a legal suit to dispute the constitutionality of the demand of the anticipatory tax payments. Ampla was not successful in this legal suit in any of the proceeding phases, now pending sentence of the recourse filed before STF (Brasilia Court of Law, which judges constitutional issues). Ampla, starting from March 2005, has paid the ICMS according to the new system. In September 2005 the State of Rio de Janeiro issued a resolution against Ampla to collect the fine and interest on late payments set in the aforementioned Decree of 2002. Ampla appealed the resolution before the Administrative Courts of Law, based on the tax Amnesty Laws of the State of Río de Janeiro published in 2004 and 2005 (forgiving interest and penalties if the taxpayer paid the pending taxes). Ampla alleges that if the aforementioned tax amnesties for Ampla do not turn out to be applicable, the law would mistreat taxpayers that are delayed only a few days in the payment of taxes (Ampla’s case) in a worse manner in comparison to those who, formally, later relied on the various tax amnesties to regulate their tax situation through paying taxes that were not paid in the past.

The “En Banc Council” (a special body within the Taxpayers Council, representing the last administrative instance) on May 9, 2012 issued judgment against Ampla. The sentence was notified on August 29, 2012. Ampla requested the State Public Treasury (Hacienda Pública Estadual) to review the decision through a special review procedure based on

F-109

the equity principle, before the Governor of the Estado de Río de Janeiro. The recourse has still not been solved, which is why the taxing debt should be suspended. However, the Estado de Rio de Janeiro has registered the debt in the public registry as if it is demandable, which has forced contributing a guarantee of €101 million (R$293 ) on November 12, 2012, in order to suspend the legal action and continue receiving public funds. On June 4, 2013, a sentence in second instance accepted the recourse filed by the Public Treasury of the State of Río de Janeiro against the guarantee Ampla filed. In September 2013, Ampla filed a letter of guarantee to substitute the “guarantee insurance” rejected by the court of law. However, Ampla reiterated to the attorney of the State, the petition for review is still pending a decision. The amount involved in this proceeding is R$ 232 million (approximately Ch$ 51,954 million).

8. In October 2009, Tractebel Energía S.A. sued CIEN claiming an alleged breach of the “Purchase & Sale Agreement for 300 MW of Firm Capacity with related energy originating from Argentina” entered into in 1999 by and between CIEN and Centrais Geradoras do Sul do Brasil S.A (Gerasul — presently Tractebel Energía). Tractebel asked the court to order that CIEN pay a rescission penalty of R$ 117,666,976 (approximately Ch$ 26,350 million) plus other fines due to the non-availability of “firm capacity and related energy,” and asked the court to determine those other fines in its ruling. The breach allegedly occurred due to a failure by CIEN to assure the availability of capacity contractually agreed with Tractebel over the 20-year period, which allegedly took place beginning in March 2005. In May 2010, Tractebel notified CIEN via a written statement, but not judicially, that it intended to exercise its step-in rights in Line I (30%). The proceeding is currently at the trial stage. CIEN petitioned to join this proceeding with the lawsuit filed by CIEN against Tractebel in 2001, in which the collection of values relative to the rate of exchange and taxing issues is under dispute, which petition for joinder was rejected by the court of law. In May 2013, CIEN requested the suspension of the proceeding for 180 days in order to avoid divergent decisions, which petition was transferred to Tractebel to file its briefs regarding the matter.

9. In 2010 Furnas Centrais Eletricas S.A. filed a suit against CIEN, based on CIEN’s alleged breach of Firm Capacity Purchase Agreement for the purchase of 700 MW of firm capacity with related energy originating from Argentina, which was signed in 1998 with a term of 20 years starting from June 2000. In its claim, Furnas requests that CIEN be ordered to pay R$ 520,800,659 (approximately Ch$ 116,630 million), as a rescission penalty according to what is provided for in the agreement, as adjusted according to the terms of such agreement, plus interest from the date of filing of the claim until actual payment, as well as other penalties based on the lack of availability of the “firm power and associated energy” (contracted capacity), and other damages to be determined upon the final decision. The proceeding is in its first instance, and the passing of the first trial judgment is pending. In respect of the foreign language documents presented by CIEN, the trial judge of first instance determined that those documents would be excluded from the lawsuit, which decision was affirmed by the 12th Civil Section of the State Court. CIEN has filed a Regular Appeal (Recurso Especial) against this decision, which will be decided by the Superior Court of Justice. In addition, CIEN received a communication from Furnas, not at the judicial seat, indicating that in case of termination due to CIEN’s non-compliance, it has the right to acquire 70% of Line I.

10. At the end of 2002 Endesa Fortaleza filed a legal action against the Federal Union, in order to get recognition that imported goods for the turbo-generating units corresponded to the item “Other Power Generating Units” to thus get access to 0% rate for the Import Tax (II) and the Tax on Industrialized Products (IPI, Impuesto de Productos Industrializados, as per its acronym in Spanish). Endesa Fortaleza got an incidental sentence in its favor in the main legal action that allows importing goods at customs with a 0% rate, but prior to a judicial support of the sum of taxes. Endesa Fortaleza has obtained favorable sentences in the administrative legal instance and in the Superior Court of Law of Justice (Brasilia) (in the main legal suit). In 2002 Endesa Fortaleza filed a judicial action (incidental) that treats the type of import tax applicable to the power generating unit (from 0% to 14%). In this legal action CGTF was also successful in the first and second instances. The Public Treasury has filed a new recourse. The parties are waiting for the recourse sentencing. The judicial deposit must be kept as guarantee of the proceedings until its final sentencing. The sum amounts to R$81 million (Ch$ 18,139 million).

11. In February 2007, the Brazilian Tax Authorities drew up a minute to Endesa Fortaleza for PIS/COFINS for the accounting periods of December 2003 and from February 2004 to November 2004, referring to the alleged differences produced between the amounts declared in the annual declaration (where the PIS/COFINS amounts were reported under the new non-accrued regime) and the amounts declared in the monthly declaration (where the amounts due were reported under the old accrual system). The company filed an appeal before the Taxpayers’ Council and is currently awaiting decision. The sum is of approximately R$68 million (Ch$ 15,228 million).

F-110

The Endesa Chile management considers that the provisions registered in the Consolidated Financial Statements, attached hereto, adequately cover the risks resulting from litigation and other operations described in this Note, which is why it does not consider that there are additional liabilities than those specified herein.

Given the characteristics of the risks covered by these provisions, it is impossible to determine a reasonable schedule of payment dates, in case there are any.

32.4  Financial restrictions

Various of the company’s loan agreements, and those of some of its subsidiaries, include the obligation to comply with certain financial covenants, which is normal in contracts of this nature. There are also affirmative and negative covenants requiring the monitoring of these commitments. In addition, there are restrictions in the agreements’ events-of-default clauses.

1. Cross Default

Some of the financial debt contracts of Endesa Chile contain cross default clauses. The syndicated loan of Endesa Chile under New York law signed in 2008 and which expires in 2014, with an amount disbursed of US$200 million at the present time, makes no reference to its subsidiaries, so a cross default can only arise with respect to another own debt. In order to accelerate payment of the debt of this loan due to cross default with respect to another debt, the amount overdue of a debt must exceed US$50 million, or the equivalent in other currencies, and other additional conditions should be met including the expiry of grace periods (if any) and formal notification of the intention to accelerate the debt by creditors representing over 50% of the amount due under the agreement. In addition, in February 2013 Endesa Chile signed credit line agreements under Chilean law that stipulate that cross default is triggered only upon default by the Debtor itself, that is, Endesa Chile, on amounts of over US$50 million or its equivalent in other currencies. Amounts drawn against these credit lines have not yet been disbursed, and they mature in February 2016.

Regarding the bond issues of Endesa Chile registered with the United States Securities and Exchange Commission (the SEC), commonly called “Yankee Bonds”, a cross default can be triggered by another of Endesa Chile’s debt amount or by that of any of its Chilean subsidiaries, for any amount overdue provided that the principal of the debt giving rise to the cross default exceeds US$30 million or its equivalent in other currencies. Debt acceleration due to cross default does not occur automatically but has to be demanded by the holders of at least 25% of the bonds of a certain series of Yankee Bonds. In addition, events of bankruptcy or insolvency of foreign subsidiaries have no contractual effects on Endesa Chile’s Yankee Bonds, which mature in February 2097.

The domestic bonds of Endesa Chile state that cross default can be triggered only by the default of the issuer in cases where the amount overdue exceeds US$ 50 million or its equivalent in other currencies. Debt acceleration requires the agreement of at least 50% of the holders of the bonds of a certain series at a bond-holders’ meeting

2. Financial Covenants

Financial covenants are contractual commitments with respect to minimum or maximum financial ratios that the company is obliged to meet at certain periods of time (quarterly, annually, etc.). Most of the Endesa Chile Group’s financial covenants limit the level of indebtedness and evaluate the ability to generate cash flows in order to service the companies’ debts. Various companies are also required to certify these covenants periodically. The types of covenants and their respective limits vary according to the type of debt.

F-111

The Endesa Chile bonds issued in Chile include the following financial covenants whose definitions and calculation formulas are established in the respective indentures:

Series H

- Consolidated Debt Ratio: The consolidated debt ratio, which is Financial debt to Capitalization, must be no more than 0.64. Financial debt is the sum of Interest-bearing loans, current; Interest-bearing loans, non-current; Other financial liabilities, current; Other financial liabilities, non-current; and Other obligations guaranteed by the issuer or its subsidiaries; while Capitalization is the sum of Financial liabilities, Equity attributable to the shareholders of Endesa Chile, and Non-controlling interests. As of December 31, 2013, the ratio was 0.36.

- Equity: A minimum Equity of Ch$760,468 million must be maintained; this limit is adjusted at the end of each year as established in the indenture. Equity corresponds to Equity attributable to the shareholders of Endesa. As of December 31, 2013, the equity of Endesa Chile was Ch$2,651,968 million.

- Financial Expense Coverage: A financial expense coverage ratio of at least 1.85 must be maintained. Financial expense coverage is the quotient between i) the Gross margin plus Financial income and Dividends received from associated companies, and ii) Financial expenses; both items refer to the period of four consecutive quarters ending on the quarter being reported. In the period ended December 31, 2013, this ratio was 7.35.

- Net Asset Position with Related Companies: A Net asset position must be maintained with related companies of no more than a hundred million dollars. The Net asset position with related companies is the difference between i) the sum of Accounts receivable from related entities, current, Accounts receivable from related entities, non-current, less transactions in the ordinary course of business at less than 180 days term, short-term transactions of associates of Endesa Chile in which Enersis S.A. has no participation, and long-term transactions of associates of Endesa Chile in which Enersis S.A. has no participation, and ii) the sum of Accounts payable to related entities, current, Accounts payable to related entities, non-current, less transactions in the ordinary course of business at less than 180 days term, short-term transactions of associates of Endesa Chile in which Enersis S.A. has no participation, and long-term transactions of associates of Endesa Chile in which Enersis S.A. has no participation. As of December 31, 2013, using the exchange rate prevailing on that date, the Net asset position with related companies was a negative US$444.0 million, indicating that Enersis S.A. is a net creditor of Endesa Chile rather than a net debtor.

Series M

- The consolidated debt ratio, which is Financial debt to Capitalization, must be no more than 0.64. Financial debt is the sum of Interest-bearing loans, current; Interest-bearing loans, non-current; Other financial liabilities, current; and Other financial liabilities, non-current; while Capitalization is the sum of Financial liabilities and Equity. As of December 31, 2013, the debt ratio was 0.35.

- Equity: Same as for Series H.

- Financial Expense Coverage Ratio: Same as for Series H.

The rest of Endesa Chile’s debt and the undisbursed credit lines include other covenants such as leverage and debt coverage ratios (Debt Ratio/EBITDA ratio), while the Yankee Bonds are not subject to financial covenants.

In the case of Endesa Chile, the most restrictive financial covenant as of December 31, 2013 was the debt ratio requirement in the syndicated loan under New York law, which expires in June 2014.

In Peru, the debt of Edegel includes the following covenants: debt ratio, leverage ratio, and debt to equity and debt coverage (Debt Ratio/EBITDA) ratios. As of December 31, 2013, the most restrictive financial covenant for Edegel was the level of indebtedness corresponding to the second program of locally issued bonds, expiring in January 2014.

In Argentina, Endesa Costanera has just one covenant, the maximum debt, corresponding to a loan from Credit Suisse First Boston International which matures in May 2014. The debt of El Chocón includes covenants related to maximum debt, net consolidated equity, interest coverage, debt coverage (Debt Ratio/EBITDA) and a leverage ratio. In the case of El Chocón, as of December 31, 2013, the most restrictive financial covenant was the Debt/EBITDA ratio, corresponding to the syndicated loan which matures in September 2016.

F-112

In Colombia, the debt of Emgesa is not subject to compliance with financial covenants, a situation that also applies to the debt of the rest of the Group’s companies not mentioned in this Note.

Lastly, in most of the contracts, debt acceleration for non-compliance with these covenants does not occur automatically but is subject to certain conditions, such as a cure period.

As of December 31, 2013, December 31, 2012, and January 1, 2012, neither Endesa Chile nor any of its subsidiaries were in default under their financial obligations summarized here or other financial obligations whose defaults might trigger the acceleration of their financial commitments, with the exception of our Argentine subsidiary Endesa Costanera at December 31, 2013, December 31, 2012, and January 1, 2012.

To date, Endesa Costanera has not made the last four payments on a supplier loan with Mitsubishi Corporation, which has a grace period of 180 days for each installment. The past-due payments fell due on March 30, 2012, September 30, 2012, March 31, 2013, and September 30, 2013 for a total of US$68 million, including principal and interest. Under the terms of the agreement, should Mitsubishi Corporation wish to accelerate the debt from this loan for a principal amount of US$141 million, it would have to give formal notification ten days prior to such acceleration. To date, Endesa Costanera has not received such notification from Mitsubishi Corporation. If Mitsubishi Corporation were to issue an official acceleration announcement, a total repayment of US$174 million from the loan would be enforceable under cross default and bankruptcy clauses, including the debt with Mitsubishi Corporation. It is important to note that negotiations on the terms of this loan have been ongoing throughout this time.

As of December 31, 2013, El Chocón would have been in breach of its covenant on the EBITDA/Financial expenses ratio for its US$19 million loan with Standard Bank/Deutsche/Itaú if it had not obtained a waiver in November 2013 allowing it to reduce the limit of the covenant from 3.5 to 2.5 for September and December 2013. A waiver was also signed on December 16, 2013 postponing the US$3 million payment due Standard Bank/Deutsche/Itaú on December 15, 2013 to January 14, 2014. At that time, another waiver was obtained postponing the obligation until February 15, 2014 when the terms of the loan are expected to be renegotiated.

None of this represents a risk of cross default or of another breach for Endesa Chile.

32.5  Other information

Resolution 95/13 from the Argentine Energy Secretariat was published on March 26, 2013 making significant changes to the remunerations system for generating companies and other aspects of operations in the wholesale electricity market. Nevertheless, our Argentine subsidiary Endesa Costanera insisted on the need to consider in the short term adjustments in the values of tariffs. These tariffs reflect 2011 costs and need to be adjusted for 2013, and a methodology for updates that will allow for cost variations needs to be defined. Our Company shows a deficit in working capital until a response to these requests has been obtained, leading to problems in its short-term financial equilibrium. Endesa Costanera expects to correct the present situation depending on a favorable resolution of requests made to the Argentine government.

F-113

33.  PERSONNEL FIGURES

Endesa Chile personnel, including that of subsidiaries and jointly-controlled companies in the five Latin American countries where the Group is present, is distributed as follows as of December 31, 2013, December 31, 2012, and January 1, 2012:

Country	12-31-2013								Average for  the Year
	Managers and  Main Executives		Professionals and   Technicians		Workers and  Others		Total
Chile		38		1,033		86		1,157	1,171
Argentina		5		505		19		529	513
Brazil		-		-		-		-	-
Peru		7		237		16		260	262
Colombia		6		543		14		563	551
Total		56		2,318		135		2,509	2,497
Country	12-31-2012								Average for  the Year
	Managers and  Main Executives		Professionals and   Technicians		Workers and  Others		Total
Chile		31		1,010		81		1,122	1,122
Argentina		5		479		17		501	497
Brazil		-		1		-		1	2
Peru		9		238		16		263	257
Colombia		6		496		15		517	510
Total		51		2,224		129		2,404	2,388
Country	01-01-2012								Average for  the Year
	Managers and  Main Executives		Professionals and   Technicians		Workers and  Others		Total
Chile		31		971		95		1,097	1,109
Argentina		6		449		18		473	438
Brazil		-		2		1		3	4
Peru		7		223		17		247	245
Colombia		6		477		15		498	472
Total		50		2,122		146		2,318	2,268

F-114

34. SANCTIONS

The following companies belonging to the Group have received sanctions from the administrative authorities:

a)    Endesa Chile and subsidiaries

Endesa Chile

- During the 2011 fiscal year, the Company was fined 1,380 UTA (Annual Tax Units), equivalent to ThCh$675,184 by the Superintendency of Electricity and Fuels (SEF) for the blackout that occurred on March 14, 2010. Endesa Chile filed an appeal against the measure with the Santiago Court of Appeals, which rejected the appeal on January 18, 2013 and upheld the fine. Endesa Chile then filed an appeal against this ruling with the Supreme Court who, on November 20, 2013, rejected the second appeal and once again upheld the fine, but reduced its amount to 1,246 UTA, equivalent to ThCh$609,623.

Closed.

- In the 2012 fiscal year, the Company was issued a fine, plus interest, totaling ThCh$13,151 by the Chilean Tax Service (SII) for the excessive use of tax credits for the 2010 tax year. The amount was paid on March 28, 2013.

Closed.

- During the 2012 fiscal year, the Company was fined 1,200 UTA (Annual Tax Units), the equivalent of ThCh$587,117 by the Electricity and Fuels Superintendency (SEF) for the blackout that occurred on September 24, 2011. Endesa Chile filed a request for reconsideration with the SEF, which was denied in Exempt Resolution 703 of March 25, 2013, which also upheld the fine. The Company later filed an appeal challenging the ruling with the Santiago Court of Appeals, which has not yet viewed the appeal.

- In January 2013, Endesa Chile was notified of SEF Exempt Resolution 2496 fining the Company 10 UTA for violating Article 123 of Decree Law (DFL) 4/20,018 of 2006 due to its failure to report to the SEF the commissioning of its electricity facilities by the deadline provided for in that law. To clear the charges, Endesa Chile paid the fine in full.

Closed.

- In the first quarter of 2013, Endesa Chile was notified of three resolutions issued by the Health SEREMI (Regional Ministerial Office) of the Maule Region, Resolutions 1057, 085, and 970, which ruled on health summary proceedings RIT Nos. 355/2011, 354/2011, and 256/2011, respectively, imposing a 20 UTM fine for each of the proceedings. The fines were imposed for the following violations: Resolution 1057 penalizes a health violation of Decree 594 of 1999, Regulations on Basic Health and Environmental Conditions in the Workplace, specifically, at the Cipreses Plant facilities; this fine has been paid in full. Resolution 085 penalizes a violation of Executive Decree 90/2011, which requires a statement of the emissions made in 2009 and 2010 by a 20.8-kW-capacity Siemens-Schukertwerke A6 power generator located at the Bocatoma Maule Isla facility. This resolution is currently being challenged. Resolution 970 penalizes a violation of Executive Decree 90/2011, which requires a statement of the emissions made in 2009 and 2010 by a 34 kW Conex generator located at the Bocatoma Maule Isla facility. This resolution is currently being challenged. Total 60 UTM, equivalent to ThCh$2,446.

- Endesa received notification in September 2013 of ORD No. 603 issued by the Superintendency of the Environment (SMA) initiating sanction proceedings and filing charges against Endesa as Holder of the Expansion Project for Unit Two of the Bocamina Plant for a number of violations against environmental regulations and the RCA environmental regulation instrument. The sanction proceedings are the result of inspections conducted by SMA personnel on February 13 and 14 and on March 19, 26, and 27, 2013, at the Bocamina thermoelectric facilities. The inspections found a number of violations of Exempt Resolution 206 of August 2, 2007 (RCA 206/2007), which was clarified by Exempt Resolutions 229 of August 21, 2007 (RCA 229/2007) and 285 of October 8, 2007 (RCA 285/2007) giving environmental approval to this expansion project. The infractions consist primarily of (i) not having a discharge channel for the cooling system that extends 30 meters into the ocean from the edge of the beach; (ii) not having the Bocamina I Desulfurization unit in operation; (iii) not submitting the information requested by the Superintendency’s official on past records of on-line emissions reports (CEM reports) since the startup of operations until the present time; (iv) exceeding the CO limit for Bocamina I set in the RCA for Bocamina II in January 2013; (v) the defects and gaps between panels in the Bocamina I permiter acoustic enclosure; (vi) noise emissions that exceed regulatory limits; and (vii) not having technological barriers that prevent biomass from pouring into the plant’s intake.

F-115

- Endesa, within the time frame allotted, submitted a compliance schedule that was rejected. On November 27, 2013, the SMA reformulated the charges filed, adding two new charges (failure to comply with RCA 206/2007, considered a grave violation, and failure to comply with the information requirement issued in Ord. UIPS 603, which files charges, also considered a grave violation).

Resolution of this sanction process is pending at this time.

Pehuenche S.A.

- On October 6, 2011, the Securities and Insurance Superintendency (SVS) issued Exempt Resolution 545 fining the Pehuenche Directors that were involved in approving the Energy and Capacity agreement signed between the company and its parent Empresa Nacional de Electricidad S.A. (Endesa) on November 19, 2007.

- The following fines were applied:

i) The Directors who were not members of the Directors’ Committee were fined for not having verified, according to the SVS resolution, that the Energy and Capacity sales agreement signed between Empresa Eléctrica Pehuenche S.A. and its parent Endesa on November 19, 2007 was signed under fair conditions normally prevailing on the market, and for having approved the Minutes of the Board Meeting stating that the Directors’ Committee Report had been read, when actually only the Minutes of that meeting had been read. Each Director received a fine of 300 UF (approximately ThCh$6,993).

ii) Directors who were members of the company’s Directors’ Committee at the time the aforementioned agreement was signed were fined for not having prepared, according to the SVS resolution, the Report required under the regulation. Each Director received a fine of 400 UF (approximately ThCh$9,324).

The Directors have filed an appeal with the competent civil court after depositing 25% of the total amount of the fine with the General Treasury of the Republic. Therefore, the allegations and the fines are being studied by the ordinary courts of law, which have been informed of the Directors’ appeal and request for absolution in a summary proceeding.

- On August 22, 2012, Endesa, as the first party, and Inversiones Tricahue and other minority shareholders as the second party, entered into a transactional agreement by which the minority shareholders withdrew all of their arbitrational, administrative, and criminal actions filed against Endesa and Pehuenche and their Directors on November 19, 2007. In return, Endesa agreed to rescind the November 19, 2007 capacity and energy agreement and to execute a new one under the same conditions, but with a price at marginal cost. The new agreement would be in effect from the date of its signing until December 31, 2021. Both parties also agreed to vote at the Pehuenche Extraordinary Shareholders’ Meeting to approve the rescinding of the former and the execution of the new agreement. Endesa agreed to pay Pehuenche the resulting price difference between the November 19, 2007 agreement price, which was in effect from January 1, 2008 to July 31, 2012, and the price difference between that paid from August 1, 2012, until the signing date of the new energy and capacity agreement, in accordance with the calculation methods and conditions set forth in the new agreement. On October 4, 2012, the Pehuenche Extraordinary Shareholders’ Meeting unanimously voted to rescind the former and execute a new agreement. On October 19, the Pehuenche Board of Directors voted to pay an interim dividend for the amount of the price differences it would receive from Endesa, which would take place on November 5, 2012. Nevertheless, the Directors had to pay the fine imposed by the SVS. The respective insurance policy covered these fines, and the sanctions were declared and paid into the Treasury.

- During the 2011 fiscal year, the Company was fined 602 UTA (Annual Tax Units), or approximately ThCh$294,537 by the Electricity and Fuels Superintendency (SEF) for the blackout that occurred on March 14, 2010. Pehuenche filed an appeal against the measure with the Santiago Court of Appeals, which rejected the appeal on January 18, 2013 and upheld the fine. Pehuenche filed an appeal against this ruling with the Supreme Court, which, on November 20, 2013, rejected the appeal and upheld the fine but reducing the amount to 421 UTA, equivalent to ThCh$205,890.

Closed.

F-116

- On October 2, 2013, the Securities and Insurance Superintendency (SVS) fined Empresa Eléctrica Pehuenche S.A. and its CEO UF 150 (approximately ThCh$3,496) for alleged violations of Article 54 of Law 18,046 “over the right of all shareholders to examine the annual report, balance sheet, inventory, minutes, ledgers, and external auditors’ reports during the 15 days prior to a company’s ordinary shareholders’ meeting.”

The company and its CEO filed an appeal with the courts against the resolution imposing the fine; a ruling on the appeal is pending.

Hidroeléctrica El Chocón S.A.

- For the year ended December 31, 2012, Hidroeléctrica El Chocón (HECSA) was fined Th$3,069 Argentine pesos (approximately ThCh$246,899) by the Jurisdictional Authority of the Limay, Neuquén, and Negro River Basins (Autoridad Jurisdiccional de las Cuencas de los Ríos Limay, Neuquén Negro, AIC) for failure to comply with certain obligations contained in the Concession Agreement. The company has filed the respective appeal, so the ruling is not yet final.

- The above agency also imposed a fine of Th$43 Argentine pesos (approximately ThCh$3,459) on HECSA for violation of a duty to report.

- Finally, the Energy Regulatory Body (ENRE) imposed a fine of Th$20 Argentine pesos (approximately ThCh$1,609) on the company. HECSA has filed an appeal.

Endesa Costanera S.A.

- During the 2012 fiscal year and until June 30, 2013, the company was issued two fines for a total amount of Th$47,949 Argentine pesos (approximately ThCh$3,857,464) by the General Customs Authority (Dirección General de Aduanas). Possible liability on the part of Mitsubishi is being assessed, in which case that amount could be claimed from this supplier. The ENRE also imposed two fines totaling Th$51 Argentine pesos (approximately ThCh$4,103). The company has filed a protest.

Edegel S.A.A.

- In April 2011, Edegel S.A.A. was fined by the SUNAT (the Peruvian Tax Administration) for issues with the determination of its 2006 income tax. The amount of the fines, restated at December 31, 2013, was S/. 9,502,978 (approximately ThCh$1,783,670). The company has filed an appeal, which is pending resolution by the Tax Court.

- In February 2012, the SUNAT ordered Edegel S.A.A. to pay S/. 38,433,190.24 (ThCh$7,213,752) for omitted taxes plus interest and penalties in connection with an audit of its 1999 income tax that began in January of 2006. Edegel S.A.A. paid the penalty imposed by the SUNAT and filed an administrative claim disputing the assessment; a decision on the claim is pending.

- In August 2012, Edegel S.A.A. received a fine for a total of S/. 18,250 (5 Tax Units, UIT, or approximately ThCh$3,425) from the Agency for the Supervision of Investment in Energy and Mining (OSINERGMIN) for the following violations: (i) CCIT violations: incorrectly calculating indicators and the compensation amount for voltage quality in the first half of 2011; (ii) not having met the deadline for submitting information on product quality for the same fiscal year; and (iii) having submitted empty RDI and RIN extension files.

- In April 2013, Edegel S.A.A. received the following fines by the OSINERGMIN (the Supervisory Agency for Investments in Energy and Mines: (i) S/. 7,604.57 (approximately ThCh$1,427) for failure to perform maintenance in a timely fashion on its thermal generation units for the last quarter of 2008; (ii) S/. 200,941.48 (approximately ThCh$37,716) for failure to perform maintenance in a timely fashion on its hydraulic generation units for the last quarter of 2008; (iii) S/. 40,700 (approximately ThCh$7,639) (11 Tax Units, UIT) for failure to submit technical justification in a timely fashion for the second quarter of 2008; and (iv) S/. 106,073.17 (approximately ThCh$19,909) for failure to have its generation unit available after having been notified that it was required by the SEIN for the fourth quarter of 2008. Edegel S.A.A. has not protested fines (i) and (iv), and it will pay them to take advantage of early payment benefits. It has, however, appealed sanctions (ii) and (iii), and a ruling by OSINERGMIN is pending.

F-117

- In May 2013, Edegel S.A.A. was fined by the SUNAT for issues with the determination of its 2007 tax payments. The amount of the fine, restated at December 31, 2013, was S/. 8,751,959 (approximately ThCh$1,642,707). An appeal filed with the Tax Court is pending.

- In June 2013, Edegel S.A.A. was notified by Electroperú S.A. of a penalty applied under contract no. 132991, “Additional Generation Capacity Service through Conversion of Equipment to the Dual Generation System.” The penalty, amounting to S/. 481,104.53 (ThCh$90,301), was applied for breach of the conditions for executing the service offered under that contract.

- In July 2013, Edegel S.A.A. was fined S/. 453.86 (approximately ThCh$85) by the Supervisory Agency for Investments in Energy and Mines (OSINERGMIN) for failure to perform maintenance on its hydraulic generation units in a timely fashion as required under number 6, “Procedure for Overseeing Availability and the Operating Conditions of SEIN Generating Units.” As the company paid the fine prior to the 15-day deadline, the fine was reduced to S/. 340.40 (approximately ThCh$64).

- In July 2013, Edegel S.A.A. was fined S/. 4,070 (approximately ThCh$764) by the Supervisory Agency for Investments in Energy and Mines (OSINERGMIN) for failure to submit the pertinent technical justification in a timely fashion as required under number 6 of the “Procedures for Overseeing Availability and the Operating Conditions of SEIN Generating Units.” As the company paid the fine prior to the 15-day deadline, the fine was reduced to S/. 3,052.50 (approximately ThCh$573).

- In November 2013, Edegel S.A.A. was fined S/. 37,000 (approximately ThCh$6,945 or 10 Tax Units – UIT) by the Callahuanca District Municipality (MDC) in Municipal Resolution 060-2013. The MDC imposed the sanction for failure to submit the technical inspection report on multidisciplinary civil defense safety as required under Law 29664 and its regulations.

- In November 2013, Edegel S.A.A. was fined by the SUNAT for issues with the determination of its 2008 tax payments. The amount of the fine, restated at December 31, 2013, was S/. 1,573,170 (approximately ThCh$295,278). The appeal filed is pending resolution by the SUNAT.

- In December 2013, Scotiabank Perú S.A.A., which whom Edegel S.A.A. has signed a lease agreement for the Santa Rosa Project, was fined by the SUNAT for duties allegedly unpaid in an import operation. The amount of the fine, restated at December 31, 2013, was S/. 12,701,508 (approximately ThCh$2,384). Scotiabank Perú S.A.A. will file the respective appeal in January 2014.

Chinango S.A.C.

- In October 2010, Chinango was fined by the District Municipality of San Ramón regarding the Alcabala tax imposed on the transfer of certain assets in the Simple Reorganization that took place between Edegel S.A.A. and Chinango S.A.C. and which went into effect on May 31, 2009. The amount of the fine, restated at December 31, 2013, was S/. 1,643,868 (approximately ThCh$308,547). The appeal filed is pending resolution.

- In May 2012, Chinango S.A.C. received a fine totaling S/. 40,150 (approximately ThCh$7,536 or 11 Tax Units, UIT) from the Supervisory Agency for Investments in Energy and Mining (OSINERGMIN) for the following violations: (i) failure to meet the deadline for submitting information on product quality in NTCSE source files; and (ii) having submitted RIN and CI1 files with errors (incorrect information) in accordance with the Electricity Concessions Law. The fine was paid.

- In August 2012, Chinango S.A.C. received a fine totaling S/. 18,250 (approximately ThCh$3,425 or five Tax Units, UIT) from the Supervisory Agency for Investments in Energy and Mining (OSINERGMIN) for the following violations: (i) CCIT indicator violations; (ii) failure to submit information in a timely fashion; and (iii) having submitted two empty RIN and RD files. The fine was paid.

- In August 2012, Chinango S.A.C. received a fine totaling S/. 29,200 (approximately ThCh$5,481 or eight Tax Units, UIT) from the Appeals and Sanctions Court of the Agency for the Supervision of Investment in Energy and Mining (OSINERGMIN) when it ruled as groundless the appeal filed by Chinango S.A.C. against Executive Management

F-118

Resolution No. 014801 penalizing the failure to comply with the “Procedure for Overseeing the Technical Quality Standard for Electricity Services and its Base Methodology” (NTCSE) in the first half of 2010 and confirmed the Resolution in all of its details. The fine was paid.

- In January 2013, Chinango S.A.C. received a fine totaling S/. 367,915 (approximately ThCh$69,056) from the SUNAT for issues with the determination of its 2010 income tax. The company challenged the measure despite paying a reduced fine in February 2013. The appeal filed is pending resolution by the Tax Court.

- In June 2013, Chinango S.A.C. was notified through Coactive Execution Resolution 0398-2012 of a fine of S/. 3,800 (approximately ThCh$713) imposed by the Supervisory Agency for Investments in Energy and Mines (OSINERGMIN) for the following infractions: (i) failure to comply with the CCII indicator in the first half of 2010 as required under paragraph A of number 5.2.2 of the “Procedure for Overseeing the Technical Quality Standard for Electrical Services and its Base Methodology”; (ii) failure to comply with the CPCI indicator in the first half of 2010 as required under paragraph C) of number 5.2.2 of the “Procedure for Overseeing the Technical Quality Standard for Electrical Services and its Base Methodology”; and (iii) submitting empty service interruption reports (RIN and RDI files) for the first half of 2010 despite the interruptions affecting its customers, as required under Article 31 of the Electricity Concession Law.

- In September 2013, Chinango S.A.C. was notified through Managerial Electrical Oversight Resolution No. 19693 issued by the Supervisory Agency for Investments in Energy and Mining (OSINERGMIN) of a fine of S/. 1,850 (approximately ThCh$347 or 0.50 Tax Units – UIT) for: (i) failure to submit voltage quality information in a timely fashion in the first half of 2012. As the fine was paid within fifteen (15) days of notification, it was reduced by 25%.

Emgesa

- In Resolution 110 of August 2012, the Colombian Institute of Anthropology and History—ICANH—imposed a fine of approximately US$55,000 (approximately ThCh$28,854) on the company for not complying with standards and established procedures in cases of archaeological findings, as occurred between April 3 and April 6, 2011 in the area of the El Quimbo Hydroelectric Project. Emgesa filed an appeal against the resolution, but ICANH confirmed the fine in Resolution 149 of October 22, 2012.

b)    Associated companies and joint ventures

Transquillota

- During the 2012 fiscal year, the company Transquillota, in which Endesa Chile and Colbún each hold a 50% stake, was audited by the Chilean tax service (SII) under an expense verification program, as the SII considers that certain entries such as depreciation of fixed assets were not properly handled. An administrative reconsideration for the Supervisory Review (RAF) was submitted explaining the differences. The SII accepted the company’s explanations and reduced the interest and fines payable to ThCh$19,208, which the company paid on March 27, 2013. Endesa paid only 50% of the amount, or Thch$9,604.

Closed.

Endesa Brasil and subsidiaries

Ampla Energía S.A.

- For the period ended December 31, 2012, the company received one fine for Th$2,863 Brazilian reals (approximately ThCh$641,150) from the National Electrical Energy Agency (Agencia Nacional de Energía Eléctrica, ANEEL) for power consumption metering. In 2011, it received three fines totaling Th$7,079 Brazilian reals (approximately ThCh$1,585,296) for violation of telemarketing and energy sale tariff indicators. For the period ended December 31, 2012, Ampla was also fined Th$7,478 Brazilian reals (approximately ThCh$1,674,649) by the Federal Revenue Office (Secretaria de Receita Federal) for failure to meet tax obligations. The company has filed the respective appeals.

F-119

-    The company received seven fines in 2013 totaling $29,810,687 Brazilian reals (approximately ThCh$6,675,979) from the National Electrical Energy Agency (ANEEL) due to problems with technical quality, erroneous evidence presented in inspections, and for other reasons. The company appealed, and four fines are still awaiting final rulings. The other fines were either revoked or paid, for a total of $143,601 Brazilian reals. Only two fines were received in 2012 totaling $3,557,786 Brazilian reals (approximately ThCh$796,743), for which we have paid $2,112,600 Brazilian reals.

- In 2013, the company received 19 fines totaling $120,204 Brazilian reals* (approximately ThCh$26,919) from the environmental agencies (IBAMA, Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis, ICM-Bio - Instituto Chico Mendes de Conservação da Biodiversidade, INEA – Instituto Estadual de Ambiente and others) for unauthorized removal of vegetation, the death of animals through contact with our energy network, and construction in prohibited areas or without permission. The company filed appeals against almost all of the fines assessed, but no ruling has yet been given. Ampla paid three fines for $66,310 Brazilian reals. (* Clarification: The amount of some of the fines has not yet been determined; the amounts will be set after Ampla submits certain data.) The company had received 14 fines in 2012 for a total of $76,426 Brazilian reals (approximately ThCh$17,115).

- In 2013, the company received four fines totaling $24,234 Brazilian reals (approximately ThCh$5,427) from the Consumer Defense and Protection Agency (PROCON/RJ) due to problems in reimbursing improper charges and other irregularities. The company has filed appeals against all of the fines, and rulings are pending. Ampla had received three fines in 2012 for a total of $20,840 Brazilian reals (approximately ThCh$4,667); rulings on the appeals filed against these sanctions are also pending.

- The company received one fine in 2013 from the employee defense agencies (SRTE) due to problems with formalities. The company filed an appeal, and the ruling is pending. The labor agencies have not specified the amount of the fine, which it does only after analyzing the appeal. Ampla had received five fines in 2012, for which rulings are also pending after appeals filed by the company.

Coelce

- The Company received three fines in 2011 totaling Th$1,397 Brazilian reals (approximately ThCh$312,849) from the National Electrical Energy Agency (ANEEL) for the same reasons it was fined in 2012.

- For the period ended December 31, 2012, the company received two fines totaling Th$689 Brazilian reals (approximately ThCh$154,297) from the National Electrical Energy Agency (ANEEL) for failure to comply with technical regulations.

- In 2013, the company received 32 fines totaling $34,877,282 Brazilian reals (approximately ThCh$7,810,540) from the National Electrical Energy Agency (ANEEL) or its local representative (ARCE) for accidents with third parties (there were seven), problems with technical quality, erroneous evidence submitted in inspections, irregularities with the Coelce Plus project, and other reasons. The company has filed appeals, and final decisions are pending on 26 sanctions. The other fines were either revoked or paid, for a total of $395,125 Brazilian reals. Coelce had received 24 fines totaling $53,810,352 in 2012 (approximately ThCh$12,050,478), for which we have paid $707,423 Brazilian reals; we are awaiting the final decision on 16 of the sanctions.

- The company was not fined by the environmental agencies in 2012 and 2013 (IBAMA, the Brazilian Institute for the Environment and Renewable Resources, and ICMBio, the Chico Mendes Institute for Conservation of Biodiversity).

- Coelce received four fines in 2013 totaling $21,837 Brazilian reals (approximately ThCh$4,890) from the Consumer Defense and Protection Agency (PROCON/CE) for alleged violations of consumer rights. The company filed appeals against the fines, and one has yet to be resolved. The other appeals were rejected, and Coelce paid $15,901 Brazilian reals in fines. Two fines for a total of $12,953 Brazilian reals were received in 2012, which we have paid.

- The company received two fines in 2013 from the employee defense agencies (SRTE) due to problems with formalities. The appeal filed by the company was unsuccessful, and we paid the amount of $9,694 reals. The company was not fined by these agencies in 2012.

F-120

Cien

- The company received one fine in 2013 for $32,136 Brazilian reals (approximately ThCh$7,197) from the National Electrical Energy Agency (ANEEL) for a formality (a failure to submit documentation). The company appealed, and the decision is pending. The company was not fined by this agency in 2012.

- In 2012 and 2013, Cien was not fined for other matters (environmental, consumer, or labor).

The company and its Board of Directors have not been subject to other sanctions from the SVS or from other administrative authorities.

35.  SUBSEQUENT EVENTS

Endesa Chile

- On January 29, 2014, as stipulated in Articles 9 and 10, Paragraph 2 of Law 18,045 and the provisions of General Regulation 30 of the Securities and Insurance Superintendency, the company reported as an essential fact that the Environmental Superintendency, in Exempt Resolution 39 of January 28, 2014, ordered Empresa Nacional de Electricidad S.A., among other provisional measures indicated in that resolution, to shut down, totally and temporarily, the Bocamina Thermoelectric Plant Unit One project for 15 consecutive days. This provisional measure could be renewed or lifted before the completion of the 15 days should new information so warrant, as authorized by the Third Environmental Court on that date and as stipulated in Letter c) of Article 48 of the Organic Law of the Environmental Superintendency.

The financial effects of the shutdown of the Bocamina I Thermal Plant will depend on how long the measure is in effect. The extent of the effects is currently being assessed by the company.

- On January 31, 2014, the company reported the following essential fact:

Regarding the essential fact reported on December 17, 2013, in which, in addition to reporting the shutdown of the Bocamina II Thermal Plant due to the reasons stated in the report, we announced that the financial effects of the shutdown would be assessed by the company, we hereby report as an essential fact that the effects of the beginning of the shutdown period, from December 17, 2013 to January 30, 2014, are assessed as a total loss of US$31 million in the company’s contribution margin.

In addition, the company will continue to evaluate and report on the financial effects of the shutdown of the Bocamina II Thermal Plant throughout its duration.

- On February 6, 2014, the company reported the following essential event:

Regarding the essential event of January 29, 2014, the Environmental Superintendency, in Exempt Resolution 59 of February 6, 2014, has lifted the provisional measures ordered in Exempt Resolution 39 of January 28, 2014, including both the total temporary shutdown of the Bocamina Thermoelectric Plant Unit One project and the other corrective, safety, and control measures decreed, as stipulated in Letter c) of Article 48 of the Organic Law of the Environmental Superintendency.

The company will proceed to implement the provisional measures ordered by the authorities and will restart operations at Unit One of the Bocamina Thermoelectric Plant as soon as possible, in coordination with the CDEC.

No other subsequent events of significance have occurred between January 1, 2014 and the date these financial statements were issued.

F-121

36.  ENVIRONMENT

Environmental expenses as of December 31, 2013, 2012, and 2011 are as follows:

				Balance at
Company Incurring   the Cost	Project	12-31-2013 ThCh$		12-31-2012 ThCh$		12-31-2011 ThCh$
Endesa Chile S.A.	Studies, monitoring, laboratory analysis, removal and final disposal of solid waste at hydroelectric power stations (HPS) and thermoelectric power stations.		1,996,818		2,298,344	2,104,631
Edegel S.A.	Environmental monitoring, waste management, mitigation, research and development, protection from radiation, vibration reduction, and restoration		417,966		915,325	547,979
Total			2,414,784		3,213,669	2,652,610

F-122

37. FINANCIAL INFORMATION ON SUBSIDIARIES, SUMMARIZED

As of December 31, 2013 and 2012, the summarized financial information of our principal subsidiaries under IFRS is as follows:

SUMMARY OF THE ENDESA GROUP CONSOLIDATION, BY SUBSIDIARY
	December 31, 2013
	Current     Assets ThCh$		Non-current     Assets ThCh$		Total Assets     ThCh$		Current     Liabilities     ThCh$		Non-current     Liabilities ThCh$		Total Liabilities     ThCh$		Revenues     ThCh$		Costs     ThCh$		Profit (Loss)     ThCh$
Endesa Eco S.A.		-		-		-		-		-		-		48,938,968		(24,522,864)		24,416,104
Empresa Eléctrica Pehuenche S.A.		33,988,505		217,379,509		251,368,014		(35,867,416)		(41,936,800)		(77,804,216)		192,839,780		(78,347,987)		114,491,793
Compañía Eléctrica San Isidro S.A.		-		-		-		-		-		-		211,140,517		(157,918,033)		53,222,484
Compañía Eléctrica Tarapacá S.A.		74,282,837		428,366,270		502,649,107		(173,508,052)		(25,716,898)		(199,224,950)		74,083,557		(66,581,674)		7,501,883
Soc. Concesionaria Túnel El Melón S.A.		12,248,481		10,007,003		22,255,484		(3,182,462)		(4,599,826)		(7,782,288)		10,301,994		(4,155,242)		6,146,752
Endesa Argentina S.A.		1,796,454		47,229,472		49,025,926		(811,271)		-		(811,271)		2,541,610		-		2,541,610
Endesa Costanera S.A.		30,153,983		112,614,109		142,768,092		(162,244,700)		(9,452,339)		(171,697,039)		94,887,720		(118,255,734)		(23,368,014)
Hidroinvest S.A.		528,995		16,812,785		17,341,780		(369,837)		-		(369,837)		20,354		-		20,354
Hidroeléctrica El Chocón S.A.		14,903,801		132,833,440		147,737,241		(21,069,801)		(45,717,551)		(66,787,352)		36,686,734		(25,681,727)		11,005,007
Southern Cone Power Argentina S.A.		7,901		846,585		854,486		(1,209)		-		(1,209)		-		(14,112)		(14,112)
Emgesa S.A. E.S.P.		321,051,970		1,707,315,179		2,028,367,149		(229,533,581)		(864,631,943)		(1,094,165,524)		639,770,439		(408,981,567)		230,788,872
Generandes Perú S.A.		214,375		202,971,423		203,185,798		(10,853)		-		(10,853)		33,470,743		-		33,470,743
Edegel S.A.A.		97,736,569		678,847,872		776,584,441		(98,497,242)		(220,222,435)		(318,719,677)		256,345,889		(175,933,003)		80,412,886
Chinango S.A.C.		7,048,693		104,913,829		111,962,522		(11,790,622)		(36,119,840)		(47,910,462)		27,707,823		(17,541,290)		10,166,533

F-123

SUMMARY OF THE ENDESA GROUP CONSOLIDATION, BY SUBSIDIARY
	December 31, 2012
	Current Assets ThCh$		Non-current Assets ThCh$		Total Assets ThCh$		Current Liabilities ThCh$		Non-current Liabilities ThCh$		Total Liabilities ThCh$		Revenues ThCh$		Costs ThCh$		Profit (Loss) ThCh$
Endesa Eco S.A.		96,858,959		69,458,787		166,317,746		(146,333,479)		(2,483,081)		(148,816,560)		8,847,825		(15,201,240)		(6,353,415)
Empresa Eléctrica Pehuenche S.A.		53,256,062		226,690,237		279,946,299		(67,804,287)		(44,094,780)		(111,899,067)		374,992,088		(117,294,279)		257,697,809
Compañía Eléctrica San Isidro S.A.		51,106,086		201,289,793		252,395,879		(106,039,552)		(21,730,290)		(127,769,842)		279,024,743		(223,910,404)		55,114,339
Empresa Eléctrica Pangue S.A.		-		-		-		-		-		-		21,743,845		(10,100,977)		11,642,868
Compañía Eléctrica Tarapacá S.A.		18,675,677		72,323,119		90,998,796		(10,274,500)		(4,390,710)		(14,665,210)		38,465,781		(53,695,291)		(15,229,510)
Endesa Inversiones Generales S.A.		-		-		-		-		-		-		2,255,987		(1,415,630)		840,357
Empresa de Ingeniería Ingendesa S.A.		-		-		-		-		-		-		390,336		(719,190)		(328,854)
Inversiones Endesa Norte S.A.		-		-		-		-		-		-		755,617		(543,185)		212,432
Soc. Concesionaria Túnel El Melón S.A.		5,671,843		14,638,326		20,310,169		(2,924,404)		(9,068,755)		(11,993,159)		9,553,607		(1,237,412)		8,316,195
Endesa Argentina S.A.		13,909,791		30,612,330		44,522,121		(456,855)		(4,479,929)		(4,936,784)		3,123,830		-		3,123,830
Endesa Costanera S.A.		26,248,574		116,505,733		142,754,307		(195,463,171)		(10,460,347)		(205,923,518)		295,139,838		(343,984,979)		(48,845,141)
Hidroinvest S.A.		527,463		20,308,201		20,835,664		(357,128)		-		(357,128)		2,689,410		-		2,689,410
Hidroeléctrica El Chocón S.A.		15,500,507		148,052,530		163,553,037		(29,439,486)		(48,058,461)		(77,497,947)		49,195,031		(34,796,083)		14,398,948
Southern Cone Power Argentina S.A.		24,347		1,022,593		1,046,940		(1,071)		-		(1,071)		-		(8,556)		(8,556)
Emgesa S.A. E.S.P.		285,737,507		1,558,061,492		1,843,798,999		(179,589,763)		(757,392,282)		(936,982,045)		580,343,060		(379,082,030)		201,261,030
Generandes Perú S.A.		190,469		202,696,962		202,887,431		(8,235)		-		(8,235)		18,720,477		-		18,720,477
Edegel S.A.A.		73,195,465		686,321,901		759,517,366		(71,852,384)		(241,375,405)		(313,227,789)		250,100,131		(204,017,304)		46,082,827
Chinango S.A.C.		6,997,326		107,354,750		114,352,076		(9,156,459)		(40,761,605)		(49,918,064)		30,172,752		(18,065,793)		12,106,959

F-124

APPENDIX 1 ENDESA CHILE GROUP COMPANIES

This appendix is part of Note 2.4, “Subsidiaries.”

It presents the Group’s ownership interest in each company.

Taxpayer ID No. (RUT)	Company ( in alphabetical order)	Currency	Ownership Interest at 12/31/2013			Ownership Interest at 12/31/2012			Relationship	Country	Activity
			Direct	Indirect	Total	Direct	Indirect	Total
76,003,204-2	Central Eólica Canela S.A.	Chilean peso	0.00%	75.00%	75.00%	0.00%	75.00%	75.00%	Subsidiary	Chile	Promotion and development of renewable energy projects
Foreign	Chinango S.A.C.	Peruvian nuevo sol	0.00%	80.00%	80.00%	0.00%	80.00%	80.00%	Subsidiary	Peru	Electric energy generation, sales, and distribution
96,783,220-0	Compañía Eléctrica San Isidro S.A. (1) (3)	Chilean peso	0.00%	0.00%	0.00%	95.61%	0.00%	95.61%	Subsidiary	Chile	Complete electric energy cycle
96,770,940-9	Compañía Eléctrica Tarapacá S.A. (4)	Chilean peso	96.21%	0.00%	96.21%	99.94%	0.06%	100.00%	Subsidiary	Chile	Complete electric energy cycle
Foreign	Distrilec Inversora S.A.	Argentine peso	0.89%	0.00%	0.89%	0.89%	0.00%	0.89%	Subsidiary	Argentina	Portfolio company
Foreign	Edegel S.A.A	Peruvian nuevo sol	29.40%	54.20%	83.60%	29.40%	54.20%	83.60%	Subsidiary	Peru	Electric energy generation, sales, and distribution
Foreign	Emgesa S.A. E.S.P.	Colombian peso	26.87%	0.00%	26.87%	26.87%	0.00%	26.87%	Subsidiary	Colombia	Electric energy generation
Foreign	Emgesa Panama S.A.	U.S. dollar	0.00%	26.87%	26.87%	0.00%	26.87%	26.87%	Subsidiary	Colombia	Purchase/sale of electric energy
96,504,980-0	Empresa Eléctrica Pehuenche S.A.	Chilean peso	92.65%	0.00%	92.65%	92.65%	0.00%	92.65%	Subsidiary	Chile	Complete electric energy cycle
Foreign	Endesa Argentina S.A.	Argentine peso	99.66%	0.34%	100.00%	99.66%	0.34%	100.00%	Subsidiary	Argentina	Portfolio company
Foreign	Endesa Costanera S.A.	Argentine peso	24.85%	50.82%	75.67%	12.33%	57.43%	69.76%	Subsidiary	Argentina	Electric energy generation and sales
96,827,970-K	Endesa Eco S.A. (2) (3) (4)	Chilean peso	0.00%	0.00%	0.00%	99.99%	0.01%	100.00%	Subsidiary	Chile	Renewable energy projects
Foreign	Generandes Perú S.A.	Peruvian nuevo sol	61.00%	0.00%	61.00%	61.00%	0.00%	61.00%	Subsidiary	Peru	Portfolio company

F-125

Rut	Company	Currency	Ownership Interest at     12/31/2013			Ownership Interest at 12/31/2012			Relationship	Country	Activity
	( in alphabetical order)		Direct	Indirect	Total	Direct	Indirect	Total
Foreign	Hidroeléctrica El Chocón S.A.	Argentine     peso	2.48%	65.19%	67.67%	2.48%	65.19%	67.67%	Subsidiary	Argentina	Electric energy production and sales
Foreign	Hidroinvest S.A.	Argentine     peso	41.94%	54.15%	96.09%	41.94%	54.15%	96.09%	Subsidiary	Argentina	Portfolio company
Foreign	Ingendesa do Brasil Ltda.	Brazilian     real	1.00%	99.00%	100.00%	1.00%	99.00%	100.00%	Subsidiary	Brazil	Project engineering consulting
96,887,060-2	Inversiones Endesa Norte S.A. (2)	Chilean     peso	0.00%	0.00%	0.00%	99.99%	0.01%	100.00%	Subsidiary	Chile	Investment in energy projects in northern Chile
96,671,360-7	Sociedad Concesionaria Túnel El Melón S.A.	Chilean     peso	99.99%	0.01%	100.00%	99.99%	0.01%	100.00%	Subsidiary	Chile	Execution, construction, and operation of the El Melón tunnel
Foreign	Sociedad Portuaria Central Cartagena S.A.	Colombian     peso	0.00%	94.95%	94.95%	0.00%	94.95%	94.95%	Subsidiary	Colombia	Port administration
Foreign	Southern Cone Power Argentina S.A.	Argentine     peso	98.00%	2.00%	100.00%	98.00%	2.00%	100.00%	Subsidiary	Argentina	Portfolio company
Foreign	Termoeléctrica José de San Martín S.A.	Argentine     peso	0.00%	20.86%	20.86%	0.00%	20.86%	20.86%	Subsidiary	Argentina	Construction and operation of combined cycle plant
Foreign	Termoeléctrica Manuel Belgrano S.A.	Argentine     peso	0.00%	20.86%	20.86%	0.00%	20.86%	20.86%	Subsidiary	Argentina	Electric energy production, transportation, and distribution

(1) On May 1, 2012, Empresa Eléctrica Pangue S.A. was merged with Compañía Eléctrica San Isidro S.A.; the latter is the company which legally continues to exist.

(2) On May 1, 2012, Empresa de Ingeniería Ingendesa S.A. and Endesa Inversiones Generales S.A. were merged with Inversiones Endesa Norte S.A., and on July 1, 2012, Endesa Norte S.A. was merged with Endesa Eco S.A.; the latter is the company which legally continues to exist.

(3) On September 1, 2013, Compañía Eléctrica San Isidro S.A. was merged with Endesa Eco S.A.; the latter is the company which legally continues to exist.

(4) On November 1, 2013, Endesa Eco S.A. was merged with Compañía Eléctrica de Tarapacá; the latter is the company which legally continues to exist.

F-126

APPENDIX 2 CHANGES IN THE SCOPE OF CONSOLIDATION

This appendix is part of Note 2.4.1 “Changes in the scope of consolidation.”

Incorporation into the scope of consolidation during the 2013 and 2012 fiscal years:

Taxpayer     ID No.     (RUT)	Company	Currency	Ownership Interest at 12/31/2013			Ownership Interest at 12/31/2012			Relationship	Country	Activity
	( in alphabetical order)		Direct	Indirect	Total	Direct	Indirect	Total
Foreign	Emgesa Panama S.A.	U.S. dollar	0.00%	26.87%	26.87%	0.00%	26.87%	26.87%	Subsidiary	Panama	Purchase/sale of electric energy

F-127

APPENDIX 3 ASSOCIATED COMPANIES AND JOINT VENTURES

This appendix is part of Note 3.g, “Investments accounted for using the equity method.”

Taxpayer ID     No. (RUT)	Company     ( in alphabetical order)	Currency	Ownership Interest at  12/31/2013			Ownership Interest at  12/31/2012			Ownership Interest at  1/1/2012			Relationship	Country	Activity
			Direct	Indirect	Total	Direct	Indirect	Total	Direct	Indirect	Total
Foreign	Distrilec Inversora S.A.	Argentine     peso	0.89%	0.00%	0.89%	0.89%	0.00%	0.89%	0.89%	0.00%	0.89%	Associate	Argentina	Portfolio company
96,806,130-5	Electrogas S.A	U.S. dollar	42.50%	0.00%	42.50%	42.50%	0.00%	42.50%	42.50%	0.00%	42.50%	Associate	Chile	Portfolio company
Foreign	Endesa Brasil S.A.	Brazilian     real	34.64%	4.00%	38.64%	36.27%	4.18%	40.45%	36.27%	4.18%	40.45%	Associate	Brazil	Portfolio company
Foreign	Endesa Cemsa S.A.	Argentine     peso	0.00%	45.00%	45.00%	0.00%	45.00%	45.00%	0.00%	45.00%	45.00%	Associate	Argentina	Wholesale purchase and sale of electric energy
76,418,940-K	GNL Chile.S.A.	U.S. dollar	33.33%	0.00%	33.33%	33.33%	0.00%	33.33%	33.33%	0.00%	33.33%	Associate	Chile	Promotion of liquefied natural gas supply project
76,788,080-4	GNL Quintero S.A.	U.S. dollar	20.00%	0.00%	20.00%	20.00%	0.00%	20.00%	20.00%	0.00%	20.00%	Associate	Chile	Development, design, and supply of liquid natural gas regasifying terminal
76,652,400-1	Centrales Hidroeléctricas De Aysén S.A.	Chilean     peso	51.00%	0.00%	51.00%	51.00%	0.00%	51.00%	51.00%	0.00%	51.00%	Joint venture	Chile	Development and operation of a hydroelectric project
76,014,570-K	Inversiones Gas Atacama Holding Ltda.	U.S. dollar	0.00%	50.00%	50.00%	0.00%	50.00%	50.00%	0.00%	50.00%	50.00%	Joint venture	Chile	Natural gas transportation
77,017,930-0	Transmisora Eléctrica de Quillota Ltda.	Chilean     peso	0.00%	50.00%	50.00%	0.00%	50.00%	50.00%	0.00%	50.00%	50.00%	Joint venture	Chile	Electric energy transportation and distribution

F-128

APPENDIX 4 ADDITIONAL INFORMATION ON FINANCIAL DEBT

This appendix is part of Note 16, “Other financial liabilities.”

The following tables present the contractual undiscounted cash flows by type of financial debt:

a) Bank borrowings

- Summary of bank borrowing by currency and maturity:

Country	Currency	Effective Interest Rate			Nominal Interest Rate			Secured/   Unsecured	Current						Non-current										Current						Non-current										Current						Non-current
									Maturity						Maturity																Maturity																Maturity
									One to three months ThCh$		Three to twelve months ThCh$		Total current at 12/31/2013 ThCh$		One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$		Total Non-   current at   12/31/2013   ThCh$		One to three months ThCh$		Three to twelve months ThCh$		Total current at 12/31/2012 ThCh$		One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$		Total Non-   current at   12/31/2012   ThCh$		One to three months ThCh$		Three to twelve months ThCh$		Total current at 1/1/2012 ThCh$		One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$		Total Non- current at 1/1/2012 ThCh$
Chile	US$		2.33	%		1.77	%	Unsecured		842,850		106,843,174		107,686,024		892,825		-		-		-		892,825		818,386		2,531,449		3,349,835		98,982,459		-		-		-		98,982,459		906,389		3,359,497		4,265,886		109,631,899		876,746		-		-	110,508,645
Chile	Ch$		6.00	%		6.00	%	Unsecured		7		-		7		-		-		-		-		-		272		-		272		-		-		-		-		-		-		-		-		-		-		-		-	-
Peru	US$		2.81	%		2.78	%	Unsecured		3,055,656		4,146,020		7,201,676		25,010,727		28,623,011				-		53,633,738		2,214,895		1,865,048		4,079,943		14,173,501		27,830,814		12,109,598		-		54,113,913		2,810,297		10,519,166		13,329,463		7,864,024		25,087,748		26,158,087		-	59,109,859
Peru	Sol							Unsecured		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		14,857		1,585,500		1,600,357		-		-		-		-	-
Argentina	US$		9.59	%		9.31	%	Unsecured		3,542,419		8,408,627		11,951,046		1,641,372		-		-		-		1,641,372		6,645,902		5,093,612		11,739,514		7,836,715		-		-		-		7,836,715		2,662,019		9,436,481		12,098,500		17,142,594		1,612,063		-		-	18,754,657
Argentina	Ar$		31.73	%		28.22	%	Unsecured		14,276,066		4,487,398		18,763,464		11,751,169		-		-		-		11,751,169		19,209,089		10,912,241		30,121,330		8,750,625		-		-		-		8,750,625		27,019,763		15,322,805		42,342,568		18,975,861		2,458,440		-		-	21,434,301
Colombia	CP		6.95	%		6.84	%	Unsecured		1,431,306		4,293,917		5,725,223		16,996,306		31,725,477		65,954,840		-		114,676,623		1,900,127		5,700,379		7,600,506		25,790,155		33,339,101		60,191,993		-		119,321,249		1,338,154		82,134,906		83,473,060		-		-		-		-	-
								Total		23,148,304		128,179,136		151,327,440		56,292,399		60,348,488		65,954,840		-		182,595,727		30,788,671		26,102,729		56,891,400		155,533,455		61,169,915		72,301,591		-		289,004,961		34,751,479		122,358,355		157,109,834		153,614,378		30,034,997		26,158,087		-	209,807,462

F-129

- Identification of bank borrowings by company

Taxpayer ID No.   (RUT)	Company	Country	Taxpayer ID No.   Financial Institution	Financial Institution	Country	Currency	Effective   Interest Rate	Nominal   Interest Rate	12-2013														12-2012														01-2012
									Current						Non-current								Current						Non-current								Current						Non-current
									Less than   90 days		More than   90 days		Total Current		One to three   years		Three to   five years		More than   five years		Total Non-   current		Less than   90 days		More than   90 days		Total Current		One to three   years		Three to five   years		More than   five years		Total Non-   current		Less than   90 days		More than   90 days		Total Current		One to three   years		Three to five   years		More than   five years		Total Non-   current
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol	3.85%	3.80%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		14,597		1,585,500		1,600,097		-		-		-		-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Scotiabank	Peru	US$	4.02%	3.96%		316,892		941,120		1,258,012		2,439,568		14,463,816		-		16,903,384		161,573		923,528		1,085,101		2,391,649		2,288,243		12,109,598		16,789,490		166,062		558,407		724,469		2,423,556		17,774,668				20,198,224
Foreign	Chinango S.A.C.	Peru	Foreign	Bank of Nova Scotia	Peru	US$	3.05%	3.01%		366,751		1,085,588		1,452,339		2,787,364		1,335,025		-		4,122,389		37,359		112,077		149,436		2,621,204		2,471,768		-		5,092,972		-		-		-		-		-		-		-
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Scotiabank	Peru	US$	0.76%	0.78%		2,103,523		-		2,103,523		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Edegel	Peru	Foreign	Banco de Crédito	Peru	US$	1.65%	1.65%		-		-		-		-		-		-		-		1,739,482		-		1,739,482		-		-		-		-		1,949,762		5,760,203		7,709,965		1,880,534		-		-		1,880,534
Foreign	Edegel	Peru	Foreign	Banco Continental	Peru	US$	3.42%	3.38%		268,490		2,119,312		2,387,802		19,783,795		12,824,170		-		32,607,965		-		-		-		-		-		-		-		405,477		1,378,129		1,783,606		-		-		-		-
Foreign	Edegel	Peru	Foreign	Banco Continental	Peru	US$	3.46%	3.41%		-		-		-		-		-		-		-		276,481		829,443		1,105,924		9,160,648		23,070,803				32,231,451		280,841		944,367		1,225,208		3,559,934		7,313,080		26,158,087		37,031,101
Foreign	Edegel	Peru	Foreign	Banco Scotiabank	Peru	US$	3.45%	3.41%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		8,155		1,878,060		1,886,215		-		-		-		-
Foreign	Edegel	Peru	Foreign	Banco Continental	Peru	US$	3.00%	3.00%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		260		-		260		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	Bancolombia	Colombia	CP	8.44%	8.27%		-		-		-		-		-		-		-		428,684		1,286,051		1,714,735		5,805,307		7,495,253		13,520,587		26,821,147		326,504		20,008,140		20,334,644		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	Bancolombia	Colombia	CP	8.44%	8.27%		-		-		-		-		-		-		-		131,424		394,271		525,695		1,838,073		2,414,481		4,407,478		8,660,032		99,148		6,208,686		6,307,834		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	BBVA Colombia	Colombia	CP	6.89%	6.78%		1,051,003		3,153,008		4,204,011		12,499,230		23,371,517		48,619,434		84,490,181		1,158,673		3,476,018		4,634,691		15,690,942		20,258,627		36,544,265		72,493,834		361,976		22,181,880		22,543,856		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	AV VILLAS	Colombia	CP	8.44%	8.27%		-		-		-		-		-		-		-		181,346		544,039		725,385		2,455,833		3,170,740		5,719,663		11,346,236		-		-		-		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	Banco Santander	Colombia	CP	8.15%	7.91%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		412,115		25,254,372		25,666,487		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	Banco Davivienda	Colombia	CP	8.15%	7.91%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		138,411		8,481,828		8,620,239		-		-		-		-
Foreign	Emgesa	Colombia	Foreign	Banco Corpbanca	Colombia	CP	7.01%	6.90%		380,303		1,140,909		1,521,212		4,497,076		8,353,960		17,335,406		30,186,442		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Supervielle	Argentina	Ar$	31.89%	28.00%		1,028,903		-		1,028,903		-		-		-		-		1,483,661		-		1,483,661		-		-		-		-		123,454		-		123,454		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Santander Río	Argentina	Ar$	34.49%	30.00%		656,552		-		656,552		-		-		-		-		879,133		-		879,133		-		-		-		-		10,746,076		1,949,571		12,695,647		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Nación Argentina	Argentina	Ar$	20.57%	18.85%		533,563		-		533,563		-		-		-		-		946,327		1,855,665		2,801,992		411,921		-		-		411,921		1,382,931		1,533,096		2,916,027		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Citibank	Argentina	Ar$	39.84%	34.00%		3,391,799		-		3,391,799		-		-		-		-		4,349,740		-		4,349,740		-		-		-		-		1,844,142		-		1,844,142		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Ciudad	Argentina	Ar$	25.59%	23.00%		98,467		-		98,467		-		-		-		-		395,870		-		395,870		-		-		-		-		4,670,705		-		4,670,705		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Standard Bank	Argentina	Ar$	30.61%	27.00%		1,150,992		-		1,150,992		-		-		-		-		1,388,486		-		1,388,486		-		-		-		-		832,611		-		832,611		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Itau	Argentina	Ar$	35.15%	30.50%		1,071,559		-		1,071,559		-		-		-		-		2,459,388		-		2,459,388		-		-		-		-		3,503,302		-		3,503,302		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Galicia	Argentina	Ar$	32.54%	28.50%		2,514,705		-		2,514,705		-		-		-		-		2,031,944		-		2,031,944		-		-		-		-		1,105,942		-		1,105,942		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Banco Provincia de Buenos Aires	Argentina	Ar$	20.20%	18.09%		-		-		-		-		-		-		-		96,871		122,911		219,782		-		-		-		-		-		-		-		-		-		-		-
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Credit Suisse International	Argentina	US$	13.67%	13.25%		113,672		3,229,006		3,342,678		-		-		-		-		4,883,837		-		4,883,837		-		-		-		-		166,419		3,156,573		3,322,992		2,652,744		-		-		2,652,744
Foreign	Endesa Argentina S.A.	Argentina	Foreign	Citibank	Argentina	Ar$	21.50%	21.50%		809,763		-		809,763		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
91,081,000-6	Endesa S.A. (Chile)	Chile	Foreign	B.N.P. Paribas	USA	US$	1.72%	1.12%		28,293		921,118		949,411		892,825		-		-		892,825		31,301		859,843		891,144		1,657,085		-		-		1,657,085		53,521		1,002,756		1,056,277		1,915,379		876,746		-		2,792,125
91,081,000-6	Endesa S.A. (Chile)	Chile	Foreign	Export Development Corporation Loan	USA	US$	1.57%	1.40%		378,291		378,290		756,581		-		-		-		-		347,952		354,206		702,158		689,651		-		-		689,651		379,501		764,980		1,144,481		1,132,904		-		-		1,132,904
91,081,000-6	Endesa S.A. (Chile)	Chile	Foreign	Banco Bilbao Vizcaya Argentaria S.A.NY	USA	US$	1.72%	1.12%		436,266		105,543,766		105,980,032		-		-		-		-		439,133		1,317,400		1,756,533		96,635,723		-		-		96,635,723		473,367		1,591,761		2,065,128		106,583,616		-		-		106,583,616
91,081,000-6	Endesa S.A. (Chile)	Chile	97,004,000-5	Banco Santander Chile (credit line)	Chile	Ch$	6.00%	6.00%		7		-		7		-		-		-		-		272		-		272		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Deutsche Bank	Argentina	US$	8.24%	7.99%		1,712,808		2,587,169		4,299,977		820,490		-		-		820,490		881,121		2,547,013		3,428,134		3,918,502		-		-		3,918,502		518,208		1,530,246		2,048,454		3,576,867		402,643		-		3,979,510
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank	Argentina	US$	8.24%	7.99%		857,292		1,295,083		2,152,375		410,356		-		-		410,356		440,417		1,273,172		1,713,589		1,959,017		-		-		1,959,017		1,611,491		4,749,662		6,361,153		10,912,983		1,209,420		-		12,122,403
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau	Argentina	US$	8.24%	7.99%		858,647		1,297,369		2,156,016		410,526		-		-		410,526		440,527		1,273,427		1,713,954		1,959,196		-		-		1,959,196		1,791,907		-		1,791,907		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau	Argentina	Ar$	33.70%	29.25%		163,618		-		163,618		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank - Syndicated I	Argentina	Ar$	25.42%	23.31%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		64,001		1,336,177		1,400,178		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated I	Argentina	Ar$	25.42%	23.31%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		80,629		1,707,695		1,788,324		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated I	Argentina	Ar$	26.68%	23.89%		-		-		-		-		-		-		-		354,694		340,398		695,092		-		-		-		-		55,506		1,125,918		1,181,424		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated I	Argentina	Ar$	25.42%	23.31%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		26,301		535,888		562,189		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau - Syndicated II	Argentina	Ar$	26.62%	23.84%		-		-		-		-		-		-		-		239,076		488,681		727,757		230,121		-		-		230,121		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank - Syndicated II	Argentina	Ar$	26.62%	23.84%		-		-		-		-		-		-		-		527,542		1,078,428		1,605,970		507,222		-		-		507,222		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated II	Argentina	Ar$	26.62%	23.84%		-		-		-		-		-		-		-		383,587		784,144		1,167,731		368,840		-		-		368,840		329,514		1,108,036		1,437,550		6,245,072		1,229,220		-		7,474,292
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated II	Argentina	Ar$	26.96%	24.11%		-		-		-		-		-		-		-		190,602		389,550		580,152		183,696		-		-		183,696		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated II	Argentina	Ar$	26.62%	23.84%		-		-		-		-		-		-		-		190,906		390,193		581,099		183,881		-		-		183,881		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Ciudad - Syndicated II	Argentina	Ar$	26.62%	23.84%		-		-		-		-		-		-		-		152,374		311,411		463,785		146,892		-		-		146,892		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated III	Argentina	Ar$	26.44%	23.69%		-		-		-		-		-		-		-		614,638		779,040		1,393,678		1,679,513		-		-		1,679,513		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau - Syndicated III	Argentina	Ar$	26.44%	23.69%		-		-		-		-		-		-		-		614,638		779,040		1,393,678		1,679,513		-		-		1,679,513		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank - Syndicated III	Argentina	Ar$	26.44%	23.69%		-		-		-		-		-		-		-		614,638		779,040		1,393,678		1,679,513		-		-		1,679,513		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated III	Argentina	Ar$	26.44%	23.69%		-		-		-		-		-		-		-		614,638		779,040		1,393,678		1,679,513		-		-		1,679,513		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Macro	Argentina	Ar$	30.42%	27.75%		1,511,204		-		1,511,204		-		-		-		-		87,619		2,034,700		2,122,319		-		-		-		-		233,981		2,275,667		2,509,648		2,994,506				-		2,994,506
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Macro I	Argentina	Ar$	23.14%	21.00%		-		-		-		-		-		-		-		295,652		-		295,652		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Standard Bank	Argentina	Ar$	25.59%	23.00%		-		-		-		-		-		-		-		198,116		-		198,116		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander Río	Argentina	Ar$	25.59%	23.00%		-		-		-		-		-		-		-		98,949		-		98,949		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Citibank	Argentina	Ar$	19.84%	BPC + 5,10%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		112,503		1,115,167		1,227,670		1,471,923		-		-		1,471,923
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	BBVA	Argentina	Ar$	19.84%	BPC + 5,10%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		152,645		1,527,554		1,680,199		2,019,288		-		-		2,019,288
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Industrial de Azul	Argentina	Ar$	19.84%	BPC + 5,10%		-		-		-		-		-		-		-		-		-		-		-		-		-		-		329,514		1,108,036		1,437,550		6,245,072		1,229,220				7,474,292
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Santander - Syndicated IV	Argentina	Ar$	33.84%	30.22%		316,184		1,054,829		1,371,013		2,761,603		-		-		2,761,603		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Itau - Syndicated IV	Argentina	Ar$	33.84%	30.22%		282,011		940,860		1,222,871		2,463,429		-		-		2,463,429		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Galicia - Syndicated IV	Argentina	Ar$	33.84%	30.22%		270,612		902,848		1,173,460		2,364,010		-		-		2,364,010		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Hipotecario - Syndicated IV	Argentina	Ar$	33.84%	30.22%		89,772		299,691		389,463		785,764		-		-		785,764		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Banco Ciudad - Syndicated IV	Argentina	Ar$	33.84%	30.22%		36,008		120,377		156,385		316,594		-		-		316,594		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Industrial and Commercial Bank of China Argentina	Argentina	Ar$	33.84%	30.22%		350,354		1,168,793		1,519,147		3,059,769		-		-		3,059,769		-		-		-		-		-		-		-		-		-		-		-		-		-		-
				Total ThCh$										151,327,440								182,595,727						56,891,400								289,004,961						157,109,834								209,807,462

F-130

b) Secured and unsecured liabilities

- Summary of secured and unsecured liabilities by currency and maturity

Country	Currency		Effective Interest Rate		Nominal Interest Rate		Secured/ Unsecured		Current						Non-current										Current						Non-current										Current						Non-current
									Maturity				Total current at 12/31/2013 ThCh$		Maturity								Total Non- current at 12/31/2013 ThCh$						Total current at 12/31/2012 ThCh$		Maturity								Total Non- current at 12/31/2012 ThCh$						Total current at 1/1/2012 ThCh$		Maturity								Total Non- current at 1/1/2012 ThCh$
									One to three months ThCh$		Three to twelve months ThCh$				One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$				One to three months ThCh$		Three to twelve months ThCh$				One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$				One to three months ThCh$		Three to twelve months ThCh$				One to three years ThCh$		Three to five years ThCh$		Five to ten years ThCh$		More than ten years ThCh$
Chile		US$		8.11%		7.99%		Unsecured		5,738,678		17,216,036		22,954,714		138,418,071		27,011,140		67,527,851		331,997,188		564,954,250		9,265,672		213,808,862		223,074,534		134,030,171		24,101,459		60,253,647		336,736,535		555,121,812		10,386,391		34,925,663		45,312,054		265,042,005		188,302,949		67,498,650		357,717,439		878,561,043
Chile		U.F.		6.00%		5.48%		Unsecured		5,444,098		21,021,997		26,466,095		51,727,943		50,122,280		208,402,305		186,171,543		496,424,071		5,802,114		21,972,628		27,774,742		54,304,006		52,643,369		196,716,496		222,067,338		525,731,209		40,166,229		34,130,394		74,296,623		78,626,456		236,315,457		241,310,283		275,252,070		831,504,266
Peru		US$		7.01%		6.89%		Unsecured		649,265		7,018,782		7,668,047		17,490,149		7,500,859		11,710,646		6,578,353		43,280,007		628,048		1,884,143		2,512,191		12,047,614		12,454,106		16,204,773		6,381,057		47,087,550		853,625		2,238,831		3,092,456		15,656,525		27,138,567		18,001,433		6,539,229		67,335,754
Peru		Sol		6.42%		6.32%		Unsecured		10,345,168		4,310,315		14,655,483		1,183,988		1,183,988		10,612,183		—		12,980,159		5,368,613		15,496,309		20,864,922		15,221,745		1,179,069		11,183,287		—		27,584,101		692,196		2,327,605		3,019,801		36,264,691		8,357,628		5,728,426		—		50,350,745
Colombia		CP		7.32%		7.19%		Unsecured		28,242,856		68,060,813		96,303,669		172,336,521		201,975,233		528,141,019		192,489,114		1,094,941,887		13,359,451		40,078,353		53,437,804		203,640,941		133,021,092		534,557,527		87,955,925		959,175,485		11,471,491		38,574,471		50,045,962		128,594,829		116,220,452		353,392,075		236,385,644		834,593,000
								Total		50,420,065		117,627,943		168,048,008		381,156,672		287,793,500		826,394,004		717,236,198		2,212,580,374		34,423,898		293,240,295		327,664,193		419,244,477		223,399,095		818,915,730		653,140,855		2,114,700,157		63,569,932		112,196,964		175,766,896		524,184,506		576,335,053		685,930,867		875,894,382		2,662,344,808

- Secured and unsecured liabilities by company

Taxpayer ID No.   (RUT)	Company	Country	Taxpayer ID No. Financial Institution	Financial Institution	Country	Currency	Effective   Interest Rate	Nominal   Interest Rate	Secured/   Unsecured	12-2013																12-2012																01-2012
										Current						Non-current										Current						Non-current										Current						Non-current
										Less than 90   days		More than 90   days		Total Current		One to three   years		Three to five   years		More than five   years		More than ten   years		Total Non-current		Less than   90 days		More than 90     days		Total Current		One to three   years		Three to five   years		More than five   years		More than ten   years		Total Non-current		Less than 90   days		More than 90   days		Total Current		One to three   years		Three to five   years		More than five   years		More than ten   years		Total Non-current
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First issue S-1	USA	US$	7.96%	7.88%	Unsecured		2,217,451		6,652,353		8,869,804		17,739,609		17,739,609		44,349,022		136,285,900		216,114,140		1,975,290		5,925,870		7,901,160		15,802,321		15,802,321		39,505,801		132,153,136		203,263,579		703,310		2,364,976		3,068,286		5,672,852		16,469,819		14,104,843		70,869,328		107,116,842
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First issue S-2	USA	US$	7.40%	7.33%	Unsecured		708,960		2,126,881		2,835,841		5,671,683		5,671,683		14,179,208		54,236,226		79,758,800		630,588		1,891,764		2,522,352		5,044,703		5,044,703		12,611,757		65,754,271		88,455,434		2,204,773		7,413,852		9,618,625		17,783,553		51,630,453		44,216,601		133,463,176		247,093,783
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - First issue S-3	USA	US$	8.26%	8.13%	Unsecured		449,981		1,349,943		1,799,924		3,599,848		3,599,848		8,999,621		141,475,062		157,674,379		406,804		1,220,413		1,627,217		3,254,435		3,254,435		8,136,089		138,829,128		153,474,087		2,384,734		8,018,994		10,403,728		19,235,104		109,486,718		-		-		128,721,822
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - 144 - A	USA	US$	8.50%	8.35%	Unsecured		-		-		-		-		-		-		-		-		4,127,302		198,393,750		202,521,052		-		-		-		-		-		4,635,971		15,589,088		20,225,059		218,659,499		-		-		-		218,659,499
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	Foreign	The Bank of New York Mellon - 144 - A	USA	US$	8.83%	8.63%	Unsecured		2,362,286		7,086,859		9,449,145		111,406,931								111,406,931		2,125,688		6,377,065		8,502,753		109,928,712		-		-		-		109,928,712		457,603		1,538,753		1,996,356		3,690,997		10,715,959		9,177,206		153,384,935		176,969,097
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 317 Series-H	Chile	U.F.	7.17%	6.20%	Unsecured		1,528,468		9,275,107		10,803,575		20,402,902		18,797,239		39,968,321		31,038,325		110,206,787		1,684,588		9,620,049		11,304,637		21,363,797		19,703,160		41,992,615		37,768,596		120,828,168		2,124,125		11,532,964		13,657,089		24,422,163		58,670,925		41,070,877		25,027,022		149,190,987
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 522 Series-M	Chile	U.F.	4.82%	4.75%	Unsecured		3,915,630		11,746,890		15,662,520		31,325,041		31,325,041		168,433,984		155,133,218		386,217,284		4,117,526		12,352,579		16,470,105		32,940,209		32,940,209		154,723,881		184,298,742		404,903,041		4,973,783		16,725,028		21,698,811		40,118,205		136,748,818		165,216,094		140,001,737		482,084,854
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 318 Series-K	Chile	U.F.	3.86%	3.86%	Unsecured		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		1,746,368		5,872,402		7,618,770		14,086,088		40,895,714		35,023,312		110,223,311		200,228,425
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	97,004,000-5	Banco Santander Chile - 264 Series-F	Chile	U.F.	6.44%	6.44%	Unsecured		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		31,321,953				31,321,953		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A-10 Bonds	Colombia	CP	6.89%	6.72%	Unsecured		939,183		2,817,550		3,756,733		57,903,035		-		-		-		57,903,035		1,102,280		3,306,839		4,409,119		62,006,104		-		-		-		62,006,104		1,150,327		3,868,134		5,018,461		9,278,465		-		-		56,536,718		65,815,183
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A102 Bonds	Colombia	CP	6.89%	6.72%	Unsecured		178,890		536,671		715,561		11,029,149		-		-		-		11,029,149		209,956		629,869		839,825		11,810,678		-		-		-		11,810,678		216,825		729,104		945,929		1,748,896		10,768,120		-		-		12,517,016
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B-103 Bonds	Colombia	CP	7.00%	7.00%	Unsecured		734,499		2,203,498		2,937,997		5,875,994		46,856,691		-		-		52,732,685		894,296		2,682,888		3,577,184		7,154,367		50,204,631		-		-		57,358,998		1,129,556		3,798,288		4,927,844		9,110,927		-		-		62,840,794		71,951,721
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	A5 Bonds	Colombia	CP	5.54%	5.43%	Unsecured		13,616,326		-		13,616,326		-		-		-		-		-		223,748		671,245		894,993		13,536,136		-		-		-		13,536,136		179,093		602,226		781,319		14,001,389		-		-		-		14,001,389
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B10 Bonds	Colombia	CP	7.64%	7.43%	Unsecured		824,131		2,472,393		3,296,524		6,593,049		6,593,049		44,205,339				57,391,437		946,998		2,840,995		3,787,993		7,575,987		7,575,987		47,759,102				62,911,076		989,794		3,328,320		4,318,114		7,983,617		-		65,971,663		-		73,955,280
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B15 Bonds	Colombia	CP	7.96%	7.73%	Unsecured		297,055		891,166		1,188,221		2,376,444		2,376,444		5,941,109		15,335,507		26,029,504		339,573		1,018,719		1,358,292		2,716,583		2,716,583		6,791,458		16,612,523		28,837,147		354,285		1,191,331		1,545,616		2,857,637		8,296,492		21,943,442				33,097,571
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	E5-09 Bonds	Colombia	CP	9.27%	9.27%	Unsecured		582,915		25,929,967		26,512,882		-		-		-		-		-		577,113		1,731,338		2,308,451		26,317,195		-		-		-		26,317,195		569,828		1,916,126		2,485,954		28,105,888		-		-		-		28,105,888
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B09-09 Bonds	Colombia	CP	7.76%	7.55%	Unsecured		1,153,945		3,461,835		4,615,780		9,231,559		66,821,758		-		-		76,053,317		1,325,639		3,976,917		5,302,556		10,605,111		10,605,111		62,175,621		-		83,385,843		1,328,332		4,466,698		5,795,030		10,714,236		84,115,563		-		-		94,829,799
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B12 Bonds	Colombia	CP	7.97%	7.74%	Unsecured		485,500		1,456,499		1,941,999		3,883,998		3,883,998		29,449,526		-		37,217,522		555,900		1,667,701		2,223,601		4,447,203		4,447,203		32,223,666		-		41,118,072		556,858		1,872,513		2,429,371		4,491,583		13,040,277		28,416,894		-		45,948,754
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Foreign bonds	Colombia	CP	10.17%	10.17%	Unsecured		4,486,961		13,460,883		17,947,844		35,895,687		35,895,687		213,793,324		-		285,584,698		618,169		1,854,506		2,472,675		4,945,349		4,945,349		31,993,565		-		41,884,263		610,366		2,052,440		2,662,806		4,923,173		-		28,958,422		14,293,300		48,174,895
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo bonds	Colombia	CP	10.17%	10.17%	Unsecured		624,384		1,873,151		2,497,535		4,995,071		4,995,071		29,750,447		-		39,740,589		4,442,297		13,326,891		17,769,188		35,538,377		35,538,377		229,912,869		-		300,989,623		4,386,227		14,749,291		19,135,518		35,379,018		-		208,101,654		102,714,832		346,195,504
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B10 bonds	Colombia	CP	5.34%	5.24%	Unsecured		1,100,769		3,302,308		4,403,077		8,806,155		8,806,155		99,436,473		-		117,048,783		1,264,032		3,792,096		5,056,128		10,112,255		10,112,255		106,512,256		-		126,736,766		-		-		-		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B15 bonds	Colombia	CP	5.46%	5.36%	Unsecured		753,246		2,259,737		3,012,983		6,025,966		6,025,966		15,064,915		66,601,374		93,718,221		859,450		2,578,349		3,437,799		6,875,596		6,875,596		17,188,990		71,343,402		102,283,584		-		-		-		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B12-13 bonds	Colombia	CP	6.85%	6.68%	Unsecured		1,648,116		4,944,349		6,592,465		13,184,931		13,184,931		32,962,327		110,552,233		169,884,422		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	Quimbo B6-13 bonds	Colombia	CP	6.08%	5.95%	Unsecured		616,960		1,850,879		2,467,839		4,935,677		4,935,677		43,453,010		-		53,324,364		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Emgesa S.A. E.S.P.	Colombia	Foreign	B6-13 bonds	Colombia	CP	6.08%	5.95%	Unsecured		199,976		599,927		799,903		1,599,806		1,599,806		14,084,549		-		17,284,161		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	6.57%	6.47%	Unsecured		82,595		247,784		330,379		660,757		5,613,285		-		-		6,274,042		79,897		239,692		319,589		639,178		639,178		4,814,505		-		6,092,861		97,652		235,722		333,374		616,363		1,789,469		5,500,435		-		7,906,267
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.41%	6.31%	Unsecured		74,183		222,548		296,731		593,463		593,463		5,739,253		-		6,926,179		73,875		221,624		295,499		590,997		590,997		6,023,737		-		7,205,731		160,276				160,276		-		-		10,819,378		-		10,819,378
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.38%	6.28%	Unsecured		73,816		221,447		295,263		590,525		590,525		4,872,930		-		6,053,980		73,509		220,527		294,036		588,072		588,072		5,159,550		-		6,335,694		79,552		267,504		347,056		4,950,085		-		-		-		4,950,085
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.86%	6.75%	Unsecured		63,459		3,866,320		3,929,779		-		-		-		-		-		63,196		189,587		252,783		3,923,716		-		-		-		3,923,716		78,051		262,457		340,508		4,868,653		-		-		-		4,868,653
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.61%	6.50%	Unsecured		-		-		-		-		-		-		-		-		4,770,062		-		4,770,062		-		-		-		-		-		77,676		261,195		338,871		5,051,067		-		-		-		5,051,067
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.54%	6.44%	Unsecured		-		-		-		-		-		-		-		-		75,338		4,744,218		4,819,556		-		-		-		-		-		73,923		248,577		322,500		5,114,463		-		-		-		5,114,463
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.74%	6.63%	Unsecured		-		-		-		-		-		-		-		-		77,532		4,771,525		4,849,057		-		-		-		-		-		89,628		301,387		391,015		5,873,636		-		-		-		5,873,636
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	Sol	6.70%	6.59%	Unsecured		5,408,901		-		5,408,901		-		-		-		-		-		87,352		262,056		349,408		5,400,952		-		-		-		5,400,952		77,300		259,934		337,234		4,919,966		-		-		-		4,919,966
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	6.44%	6.34%	Unsecured		80,999		242,996		323,995		647,989		647,989		1,619,973		6,578,353		9,494,304		78,353		235,060		313,413		626,827		626,827		1,567,066		6,381,057		9,201,777		83,851		281,959		365,810		2,639,913		-		1,681,620		6,539,229		10,860,762
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	9.20%	9.00%	Unsecured		111,697		5,406,082		5,517,779		-		-		-		-		-		108,049		324,147		432,196		5,049,991		-		-		-		5,049,991		115,630		388,820		504,450		5,903,654		-		-		-		5,903,654
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	7.93%	7.78%	Unsecured		81,132		243,395		324,527		649,053		649,053		4,318,583		-		5,616,689		78,482		235,446		313,928		627,856		627,856		4,249,866		-		5,505,578		83,988		282,422		366,410		677,444		6,208,170		-		-		6,885,614
Foreign	Edegel S.A.A	Peru	Foreign	Banco Continental	Peru	US$	7.25%	7.13%	Unsecured		57,826		173,478		231,304		3,359,066		-		-		-		3,359,066		55,926		167,777		223,703		3,285,038		-		-		-		3,285,038		59,850		201,252		261,102		3,783,487		-		-		-		3,783,487
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$	6.74%	6.63%	Unsecured		84,590		253,769		338,359		5,791,110		-		-		-		5,791,110		81,827		245,481		327,308		654,617		4,978,803		-		-		5,633,420		87,568		294,460		382,028		706,319		6,190,863		-		-		6,897,182
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$	6.09%	6.00%	Unsecured		76,610		229,829		306,439		5,791,642		-		-		-		5,791,642		74,108		222,323		296,431		592,861		5,010,196		-		-		5,603,057		79,307		266,681		345,988		639,685		6,096,813		-		-		6,736,498
Foreign	Edegel S.A.A	Peru	Foreign	Banco Scotiabank	Peru	US$	5.87%	5.78%	Unsecured		73,816		221,449		295,265		590,532		590,532		5,772,090		-		6,953,154		71,406		214,217		285,623		571,246		571,246		5,573,336		-		6,715,828		85,503		287,515		373,018		689,660		6,853,252		-		-		7,542,912
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	US$	6.15%	6.06%	Secured		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		75,800		254,886		330,686		611,394		1,775,041		5,728,426		-		8,114,861
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol	6.57%	6.47%	Secured		-		-		-		-		-		-		-		-		75,703		4,870,634		4,946,337		-		-		-		-		-		75,424		253,624		329,048		608,367		6,582,587		-		-		7,190,954
Foreign	Chinango S.A.C.	Peru	Foreign	Banco Continental	Peru	Sol	6.25%	6.16%	Secured		4,724,809		-		4,724,809		-		-		-		-		-		72,046		216,138		288,184		4,718,008		-		-		-		4,718,008		64,842		218,041		282,883		4,267,060		-		-		-		4,267,060
				Total	ThCh$										168,048,008										2,212,580,374						327,664,193										2,114,700,157						175,766,896										2,662,344,808

F-131

c) Finance lease obligations

- Finance lease obligations by company

Taxpayer ID No.   (RUT)	Company	Country	Taxpayer ID No.   Financial Institution	Financial Institution	Country	Currency	Effective   Interest Rate	12-2013																12-2012																01-2012
								Current						Non-current										Current						Non-current										Current						Non-current
								Less than   90 days		More than   90 days		Total   Current		One to three   years		Three to five   years		More than   five years		More   than ten years		Total Non-   current		Less than   90 days		More than   90 days		Total     Current		One to three   years		Three to five   years		More than     five years		More than   ten years		Total Non-     current		Less than   90 days		More than   90 days		Total Current		One to three   years		Three to five   years		More than   five years		More than   ten years		Total Non-     current
91,081,000-6	Empresa Nacional de Electricidad S.A.	Chile	87,509,100-K	Leasing Abengoa Chile	Chile	US$	6.50%		581,073		1,742,183		2,323,256		4,637,718		4,624,689		13,024,032		-		22,286,439		517,486		1,552,682		2,070,168		4,142,238		4,145,057		10,377,586		3,477,319		22,142,200		567,586		1,900,568		2,468,154		4,556,135		6,273,409		10,867,880		5,946,866		27,644,290
Foreign	Edegel S.A.A.	Peru	0-E	Scotiabank	Peru	US$	2.00%		1,486,952		4,421,036		5,907,988		15,369,699		11,585,284		-		-		26,954,983		1,406,430		4,177,025		5,583,455		12,608,401		17,546,542		-		-		30,154,943		2,137,134		6,953,795		9,090,929		11,858,222		14,046,200		13,246,071		-		39,150,493
				Total ThCh$									8,231,244										49,241,422						7,653,623										52,297,143						11,559,083										66,794,783

d) Other liabilities

- Other liabilities by company

Taxpayer ID     No. (RUT)	Company	Country	Taxpayer ID No.   Financial Institution	Financial Institution	Country	Currency	Effective   Interest Rate	12-2013												12-2012												01-2012
								Current						Non-current						Current						Non-current						Current						Non-current
								Less than 90   days		More than   90 days		Total Current		One to   three years		Three   to five years		Total Non-   current		Less than 90   days		More than   90 days		Total Current		One to   three years		Three   to five   years		Total Non-   current		Less than   90 days		More than   90 days		Total Current		One to three years		Three to five   years		Total Non-   current
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Mitsubishi (secured debt)	Argentina	US$	7.42%		70,430,612		-		70,430,612		-		-		-		56,264,078		-		56,264,078		-		-		-		14,958,554		10,030,787		24,989,341		32,747,272		24,243,194		56,990,466
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Mitsubishi (unsecured debt)	Argentina	US$	7.42%		1,092,665		-		1,092,665		-		-		-		11,534,186		-		11,534,186		-		-		-		2,296,618		67,527		2,364,145		161,976		1,139,597		1,301,573
Foreign	Endesa Costanera S.A.	Argentina	Foreign	Other	Argentina	Ar$	17.29%		605,116		3,546,685		4,151,801		2,802,590		-		2,802,590		799,346		5,846,518		6,645,864		6,019,282		-		6,019,282		547,198		884,765		1,431,963		-		-		-
Foreign	Hidroinvest S.A.	Argentina	Foreign	Other	Argentina	US$	2.67%		-		138,707		138,707		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
Foreign	Hidroeléctrica El Chocón S.A.	Argentina	Foreign	Other	Argentina	Ar$	19.79%		48,246		144,738		192,984		1,127,937		-		1,127,937		-		-		-		-		-		-		-		-		-		-		-		-
96,827,970-K	Endesa Eco S.A.	Chile	96,601,250-1	Inversiones Centinela S.A.	Chile	US$	6.10%		2,025,842		-		2,025,842		-		-		-		2,017,319		-		2,017,319		-		-		-		-		3,930,734		3,930,734		-		-		-
				Total ThCh$									78,032,611						3,930,527						76,461,447						6,019,282						32,716,183						58,292,039

F-132

APPENDIX 5 DETAILS OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY

This appendix forms an integral part of the Endesa Chile financial statements.

The detail of assets denominated in foreign currencies is the following:

ASSETS	Foreign Currency	Functional  Currency	12-31-2013   ThCh$	12-31-2012   ThCh$	01-01-2012   ThCh$
CURRENT ASSETS
Cash and cash equivalents			14,961,313	4,129,928	6,054,467
	U.S. dollar	Colombian peso	13,145	5,413	5,634
	U.S. dollar	Chilean peso	2,627,445	-	-
	U.S. dollar	Peruvian nuevo sol	11,839,569	3,690,418	2,886,536
	U.S. dollar	Argentine peso	481,154	434,097	3,162,297
Accounts receivable from related companies			28,384,147	14,361,204	20,299,704
	U.S. dollar	Chilean peso	28,384,147	14,361,204	20,299,704
TOTAL CURRENT ASSETS			43,345,460	18,491,132	26,354,171
NON-CURRENT ASSETS
Investments accounted for using the equity method			684,153,175	682,114,350	666,985,595
	U.S. dollar	Chilean peso	133,869,906	105,238,196	94,544,356
	Argentine peso	Chilean peso	2,400,103	2,743,725	3,428,480
	Brazilian real	Peruvian nuevo sol	57,778,968	60,504,917	60,249,470
	Brazilian real	Chilean peso	490,104,198	513,627,512	508,763,289
Goodwill			88,651,527	89,481,949	86,830,663
	Peruvian nuevo sol	Chilean peso	81,661,135	81,038,239	76,365,596
	Argentine peso	Chilean peso	6,990,392	8,443,710	10,465,067
TOTAL NON-CURRENT ASSETS			772,804,702	771,596,299	753,816,258
TOTAL ASSETS			816,150,162	790,087,431	780,170,429

F-133

The detail of liabilities denominated in foreign currencies is the following:

			12-31-2013																12-31-2012																01-01-2012
			Current Liabilities						Non-current Liabilities										Current Liabilities						Non-current Liabilities										Current Liabilities						Non-current Liabilities
			90 days or   less		91 days to   one year		Total		More than 1   year upto 3 years		More than   3 years up to 5 years		More than   5 years upto 10 years		More than   10 years		Total		90 days or   less		91 days to   one year		Total		More than 1   year up to 3 years		More than   3 years up to 5 years		More than   5 years		More than   10 years		Total		90 days or   less		91 days to   one year		Total		More than 1   year up to 3 years		More than 3   years up to 5 years		More than 5   years		More than   10 years		Total
	Foreign Currency	Functional     Currency	ThCh$		ThCh$		Current		ThCh$		ThCh$		ThCh$		ThCh$		Non-current		ThCh$		ThCh$		Current		ThCh$		ThCh$		ThCh$		ThCh$		Non-current		ThCh$		ThCh$		Current		ThCh$		ThCh$		ThCh$		ThCh$		Non-current
LIABILITIES
Other financial liabilities	U.S. dollar		88,212,425		149,941,202		238,153,627		203,460,561		79,344,983		92,262,529		338,575,541		713,643,614		91,312,402		231,044,304		322,356,706		283,821,099		86,077,978		98,945,604		346,594,911		815,439,592		33,973,247		86,968,415		120,941,662		464,660,652		288,720,473		135,772,121		370,203,534		1,259,356,780
	U.S. dollar	Chilean peso		7,162,601		125,801,393		132,963,994		143,948,614		31,635,829		80,551,883		331,997,188		588,133,514		12,618,863		217,892,993		230,511,856		237,154,868		28,246,516		70,631,233		340,213,854		676,246,471		11,860,366		44,116,462		55,976,828		379,230,039		195,453,104		78,366,530		363,664,305	1,016,713,978
	U.S. dollar	Peruvian nuevo sol		3,088,350		15,585,838		18,674,188		57,870,575		47,709,154		11,710,646		6,578,353		123,868,728		4,249,373		7,926,216		12,175,589		38,829,516		57,831,462		28,314,371		6,381,057		131,356,406		5,801,056		19,711,792		25,512,848		35,378,771		66,272,515		57,405,591		6,539,229	165,596,106
	U.S. dollar	Argentine peso		77,961,474		8,553,971		86,515,445		1,641,372		-		-		-		1,641,372		74,444,166		5,225,095		79,669,261		7,836,715		-		-		-		7,836,715		16,311,825		23,140,161		39,451,986		50,051,842		26,994,854		-		-	77,046,696
TOTAL LIABILITIES				88,212,425		149,941,202		238,153,627		203,460,561		79,344,983		92,262,529		338,575,541		713,643,614		91,312,402		231,044,304		322,356,706		283,821,099		86,077,978		98,945,604		346,594,911		815,439,592		33,973,247		86,968,415		120,941,662		464,660,652		288,720,473		135,772,121		370,203,534	1,259,356,780

F-134

APPENDIX 6 ADDITIONAL INFORMATION OFICIO CIRCULAR (OFFICIAL BULLETIN) No. 715 OF FEBRUARY 3, 2012

This appendix forms an integral part of the Endesa Chile financial statements.

a) Portfolio stratification

- Trade and other accounts receivable by time in arrears:

Trade and Other Accounts Receivable	Balance at
	12-31-2013
	Up-to-date   portfolio ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120     days in     arrears ThCh$		121-150 days   in arrears ThCh$		151-180 days in     arrears      ThCh$		181-210 days in     arrears     ThCh$		211-250 days in     arrears     ThCh$		More than   251 days in   arrears ThCh$		Total     Current     ThCh$		Total Non-   current   ThCh$
Trade receivables, gross		203,773,215		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213		229,143,110		125,349,056
Impairment provision		(215,507)		-		-		-		-		(55,494)		-		-		-		(2,423,973)		(2,694,974)		-
Other accounts receivable, gross		22,612,038		-		-		-		-		-		-		-		-		-		22,612,038		6,248,354
Impairment provision		(1,297,252)		-		-		-		-		-		-		-		-		-		(1,297,252)		-
Total		224,872,494		751,245		157,913		69,022		70,393		21,170,602		1,050		118		845		669,240		247,762,922		131,597,410
Trade and Other Accounts Receivable	Balance at
	12-31-2012
	Up-to-date portfolio ThCh$		1-30 days in arrears ThCh$		31-60 days in arrears ThCh$		61-90 days in arrears ThCh$		91-120 days in arrears ThCh$		121-150 days in arrears ThCh$		151-180 days in arrears ThCh$		181-210 days in arrears ThCh$		211-250 days in arrears ThCh$		More than 251 days in arrears ThCh$		Total Current ThCh$		Total Non- current ThCh$
Trade receivables, gross		134,030,314		742,503		47,700		61,797		308,432		274,643		4,577		-		311		4,459,462		139,929,739		140,323,852
Impairment provision		(260,311)		-		-		-		-		-		-		-		-		(3,065,033)		(3,325,344)		-
Other accounts receivable, gross		82,340,304		-		-		-		-		-		-		-		-		-		82,340,304		6,640,299
Impairment provision		(1,262,108)		-		-		-		-		-		-		-		-		-		(1,262,108)		-
Total		214,848,199		742,503		47,700		61,797		308,432		274,643		4,577		-		311		1,394,429		217,682,591		146,964,151
Trade and Other Accounts Receivable	Balance at
	01-01-2012
	Up-to-date portfolio ThCh$		1-30 days in arrears ThCh$		31-60 days in arrears ThCh$		61-90 days in arrears ThCh$		91-120 days in arrears ThCh$		121-150 days in arrears ThCh$		151-180 days in arrears ThCh$		181-210 days in arrears ThCh$		211-250 days in arrears ThCh$		More than 251 days in arrears ThCh$		Total Current ThCh$		Total Non- current ThCh$
Trade receivables, gross		241,535,134		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250		250,759,639		148,367,033
Impairment provision		(983,105)		-		-		(4,110,640)		(55,494)		-		-		-		-		-		(5,149,239)		-
Other accounts receivable, gross		34,463,899		-		-		39,056		2,791		-		-		-		-		85		34,505,831		3,241,735
Impairment provision		(1,326,090)		-		-		-		-		-		-		-		-		-		(1,326,090)		-
Total		273,689,838		1,794,517		84,972		2,565,654		440,302		138,523		-		-		-		76,335		278,790,141		151,608,768

F-135

- By type of portfolio:

Time in Arrears	Balance at										Balance at										Balance at
	12-31-2013										12-31-2012										01-01-2012
	Non-renegotiated portfolio				Renegotiated portfolio		Total gross portfolio				Non-renegotiated portfolio				Renegotiated portfolio		Total gross portfolio				Non-renegotiated portfolio				Renegotiated portfolio		Total gross portfolio
	Number of clients		Gross amount ThCh$		Number   of clients	Gross   amount   ThCh$	Number  of clients		Gross  amount  ThCh$		Number of clients		Gross amount ThCh$		Number    of clients	Gross   amount   ThCh$	Number of clients		Gross amount ThCh$		Number of clients		Gross amount ThCh$		Number   of clients	Gross   amount   ThCh$	Number of clients		Gross amount ThCh$
Up-to-date		310		203,773,215	-	-		310		203,773,215		307		134,030,314	-	-		307		134,030,314		93		241,535,134	-	-		93	241,535,134
1 to 30 days		50		751,245	-	-		50		751,245		37		742,503	-	-		37		742,503		10		1,794,517	-	-		10	1,794,517
31 to 60 days		16		157,913	-	-		16		157,913		15		47,700	-	-		15		47,700		16		84,972	-	-		16	84,972
61 to 90 days		14		69,022	-	-		14		69,022		18		61,797	-	-		18		61,797		1		6,637,238	-	-		1	6,637,238
91 to 120 days		9		70,393	-	-		9		70,393		16		308,432	-	-		16		308,432		12		493,005	-	-		12	493,005
121 to 150 days		12		21,226,096	-	-		12		21,226,096		17		274,643	-	-		17		274,643		-		138,523	-	-		-	138,523
151 to 180 days		4		1,050	-	-		4		1,050		16		4,577	-	-		16		4,577		-		-	-	-		-	-
181 to 210 days		5		118	-	-		5		118		1		-	-	-		1		-		-		-	-	-		-	-
211 to 250 days		4		845	-	-		4		845		4		311	-	-		4		311		-		-	-	-		-	-
More than 251 days		52		3,093,213	-	-		52		3,093,213		37		4,459,462	-	-		37		4,459,462		5		76,250	-	-		5	76,250
Total		476		229,143,110	-	-		476		229,143,110		468		139,929,739	-	-		468		139,929,739		137		250,759,639	-	-		137	250,759,639

b) Portfolio in default and in legal collection process.

Portfolio in Default and in Legal Collection Process	Balance at		Balance at			Balance at
	12-31-2013		12-31-2012			01-01-2012
	Number of       clients	Amount               ThCh$	Number of     clients	Amount         ThCh$		Number of     clients	Amount       ThCh$
Notes receivable in legal collection process (*)	5	223,563	6		298,950	-	-
Total	5	223,563	6		298,950	-	-

        (*) Legal collections are included in the portfolio in arrears.

F-136

c) Provisions and write-offs

Provisions and Write-offs	Balance at
	12-31-2013            ThCh$		12-31-2012           ThCh$		12-31-2011           ThCh$
Provision for non-renegotiated portfolio		(140,365)		(1,460,736)		4,024,394
Write-offs during the period		(411,830)		(271,908)		(74,259)
Total		(552,195)		(1,732,644)		3,950,135

d) Number and amount of operations

Number and Amount of Operations	Balance at
	12-31-2013				12-31-2012				12-31-2011
	Total detail by    type of    operation Last    Quarter		Total detail by    type of operation    Annual    Accumulation		Total detail by    type of    operation Last    Quarter		Total detail by    type of operation    Annual    Accumulation		Total detail    by type of    operation    Last Quarter		Total detail by    type of operation    Annual    Accumulation
	ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Impairment provision and recoveries
Number of operations		24		124		10		26		12		12
Amount of operations, in ThCh$		(159,544)		(140,365)		(815,265)		(1,460,736)		4,236,635		4,024,394

F-137

APPENDIX 6.1 COMPLEMENTARY INFORMATION ON TRADE RECEIVABLES:

This appendix forms an integral part of the Endesa Chile financial statements.

a) Portfolio stratification

- Trade receivables by time in arrears:

Trade Receivables	Balance at
	12-31-2013
	Up to date ThCh$		1-30 days in arrears ThCh$		31-60 days in arrears ThCh$		61-90 days in arrears ThCh$		91-120 days in arrears ThCh$		121-150 days in arrears ThCh$		151-180 days in arrears ThCh$		181-210 days in arrears ThCh$		211-250 days in arrears ThCh$		More than 251 days in arrears ThCh$		Total Current ThCh$		Total Non-   current   ThCh$
Generation and transmission receivables		203,773,215		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213		229,143,110		125,349,056
-Large clients		178,104,188		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213		203,474,083		-
-Institutional clients		22,542,434		-		-		-		-		-		-		-		-		-		22,542,434		125,349,056
-Others		3,126,593		-		-		-		-		-		-		-		-		-		3,126,593		-
Impairment provision		(215,507)		-		-		-		-		(55,494)		-		-		-		(2,423,973)		(2,694,974)		-
Non-invoiced services		146,445,453		-		-		-		-		-		-		-		-		-		146,445,453		1,510,879
Invoiced services		57,327,762		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213		82,697,657		123,838,177
Total Trade Receivables, Gross		203,773,215		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213		229,143,110		125,349,056
Total Impairment Provision		(215,507)		-		-		-		-		(55,494)		-		-		-		(2,423,973)		(2,694,974)		-
Total Trade Receivables, Net		203,557,708		751,245		157,913		69,022		70,393		21,170,602		1,050		118		845		669,240		226,448,136		125,349,056

F-138

Trade Receivables	Balance at
	12-31-2012
	Up to date   ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120 days   in arrears ThCh$		121-150     days in arrears ThCh$		151-180     days in arrears ThCh$		181-210     days in arrears ThCh$		211-250     days in arrears ThCh$		More than   251 days in   arrears ThCh$		Total     Current     ThCh$		Total Non- current ThCh$
Generation and transmission receivables		134,030,314		742,503		47,700		61,797		308,432		274,643		4,577		-		311		4,459,462		139,929,739	140,323,852
-Large clients		108,571,367		129,281		635		6,290		82,886		272,789		2		-		311		4,457,801		113,521,362
-Institutional clients		18,748,525		-		-		-		-		-		-		-		-		-		18,748,525	140,323,852
-Others		6,710,422		613,222		47,065		55,507		225,546		1,854		4,575		-		-		1,661		7,659,852	-
Impairment provision		(260,311)		-		-		-		-		-		-		-		-		(3,065,033)		(3,325,344)	-
Non-invoiced services		65,705,343		-		-		-		-		-		-		-		-		-		65,705,343	-
Invoiced services		68,324,972		742,502		47,700		61,797		308,432		274,643		4,577		-		311		4,459,461		74,224,395	140,323,852
Total Trade Receivables, Gross		134,030,314		742,503		47,700		61,797		308,432		274,643		4,577		-		311		4,459,462		139,929,739	140,323,852
Total Impairment Provision		(260,311)		-		-		-		-		-		-		-		-		(3,065,033)		(3,325,344)	-
Total Trade Receivables, Net		133,770,003		742,503		47,700		61,797		308,432		274,643		4,577		-		311		1,394,429		136,604,395	140,323,852
Trade Receivables	Balance at
	01-01-2012
	Up to date   ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120 days   in arrears ThCh$		121-150     days in arrears ThCh$		151-180     days in arrears ThCh$		181-210     days in arrears ThCh$		211-250     days in arrears ThCh$		More than   251 days in   arrears ThCh$		Total     Current     ThCh$		Total Non- current ThCh$
Generation and transmission receivables		241,535,134		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250		250,759,639	148,367,033
-Large clients		185,245,453		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250		194,469,958
-Institutional clients		56,289,681		-		-		-		-		-		-		-		-		-		56,289,681	148,367,033
Impairment provision		(983,105)		-		-		(4,110,640)		(55,494)		-		-		-		-		-		(5,149,239)	-
Non-invoiced services		154,040,301		-		-		-		-		-		-		-		-		-		154,040,301	-
Invoiced services		87,494,833		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250		96,719,338	148,367,033
Total Trade Receivables, Gross		241,535,134		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250		250,759,639	148,367,033
Total Impairment Provision		(983,105)		-		-		(4,110,640)		(55,494)		-		-		-		-		-		(5,149,239)	-
Total Trade Receivables, Net		240,552,029		1,794,517		84,972		2,526,598		437,511		138,523		-		-		-		76,250		245,610,400	148,367,033

F-139

- By type of portfolio:

Trade Receivables	Balance at
	12-31-2013
	Up to date   ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120 days   in arrears ThCh$		121-150 days   in arrears ThCh$		151-180 days   in arrears ThCh$		181-210 days   in arrears ThCh$		211-250 days   in arrears ThCh$		More than     251 days in     arrears ThCh$		Total gross   portfolio   ThCh$
GENERATION AND         TRANSMISSION
Non-renegotiated portfolio		203,773,215		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213	229,143,110
-Large clients		178,104,188		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213	203,474,083
-Institutional clients		22,542,434		-		-		-		-		-		-		-		-		-	22,542,434
-Others		3,126,593		-		-		-		-		-		-		-		-		-	3,126,593
Total gross portfolio		203,773,215		751,245		157,913		69,022		70,393		21,226,096		1,050		118		845		3,093,213	229,143,110
Trade Receivables	Balance at
	12-31-2012
	Up to date   ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120 days   in arrears ThCh$		121-150 days   in arrears ThCh$		151-180 days   in arrears ThCh$		181-210 days   in arrears ThCh$		211-250 days   in arrears ThCh$		More than     251 days in     arrears ThCh$		Total gross   portfolio    ThCh$
GENERATION AND         TRANSMISSION
Non-renegotiated portfolio		134,030,314		742,503		47,700		61,797		308,432		274,643		4,577		-		311		4,459,462	139,929,739
-Large clients		108,571,367		129,281		635		6,290		82,886		272,789		2		-		311		4,457,801	113,521,362
-Institutional clients		18,748,525		-		-		-		-		-		-		-		-		-	18,748,525
-Others		6,710,422		613,222		47,065		55,507		225,546		1,854		4,575		-		-		1,661	7,659,852
Total gross portfolio		134,030,314		742,503		47,700		61,797		308,432		274,643		4,577		-		311		4,459,462	139,929,739
Trade Receivables	Balance at
	01-01-2012
	Up to date   ThCh$		1-30 days in   arrears ThCh$		31-60 days   in arrears ThCh$		61-90 days in   arrears ThCh$		91-120 days   in arrears ThCh$		121-150 days   in arrears ThCh$		151-180 days   in arrears ThCh$		181-210 days   in arrears ThCh$		211-250 days   in arrears ThCh$		More than     251 days in     arrears ThCh$		Total gross   portfolio    ThCh$
GENERATION AND         TRANSMISSION
Non-renegotiated portfolio		241,535,134		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250	250,759,639
-Large clients		192,140,087		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250	201,364,592
-Institutional clients		49,395,047		-		-		-		-		-		-		-		-		-	49,395,047
Total gross portfolio		241,535,134		1,794,517		84,972		6,637,238		493,005		138,523		-		-		-		76,250	250,759,639

F-140

APPENDIX 7 FINANCIAL STATEMENTS, RESTATED

This appendix forms an integral part of the Endesa Chile financial statements.

a) Consolidated statements of financial position

Assets	12/31/2012 (Restated) ThCh$		12/31/2012 (Issued) ThCh$		Variation at 12/31/2012 ThCh$		1/1/2012 (Restated) ThCh$		1/1/2012 (Issued) ThCh$		Variation at 1/1/2012 ThCh$
CURRENT ASSETS
Cash and cash equivalents		235,677,733		276,794,675		(41,116,942)		389,768,271		421,282,284	(31,514,013)
Other current financial assets		25,119,785		25,119,785		-		914,209		914,209	-
Other current non-financial assets		17,342,247		20,066,719		(2,724,472)		14,307,830		17,191,861	(2,884,031)
Trade and other current receivables		217,682,591		230,397,862		(12,715,271)		278,790,141		296,146,589	(17,356,448)
Accounts receivable from related companies		75,488,611		61,579,669		13,908,942		103,848,707		83,101,044	20,747,663
Inventories		59,362,620		65,658,433		(6,295,813)		49,276,026		55,904,264	(6,628,238)
Current tax assets		150,680,329		155,368,748		(4,688,419)		82,053,456		85,515,069	(3,461,613)
TOTAL CURRENT ASSETS		781,353,916		834,985,891		(53,631,975)		918,958,640		960,055,320	(41,096,680)
NON-CURRENT ASSETS
Other non-current financial assets		33,304,990		33,402,902		(97,912)		13,492,454		13,598,670	(106,216)
Other non-current non-financial assets		1,931,475		1,965,247		(33,772)		1,175,332		1,463,429	(288,097)
Non-current receivables		146,964,151		146,964,151		-		151,608,768		151,608,768	-
Investments accounted for using the equity method		755,133,157		586,319,682		168,813,475		732,426,214		582,198,848	150,227,366
Intangible assets other than goodwill		55,752,625		55,918,748		(166,123)		45,528,291		45,679,853	(151,562)
Goodwill		101,747,086		101,760,013		(12,927)		106,385,017		106,399,041	(14,024)
Property, plant, and equipment		4,515,242,392		4,659,460,624		(144,218,232)		4,451,020,122		4,603,902,502	(152,882,380)
Deferred tax assets		61,801,271		67,912,666		(6,111,395)		86,152,590		97,106,685	(10,954,095)
TOTAL NON-CURRENT ASSETS		5,671,877,147		5,653,704,033		18,173,114		5,587,788,788		5,601,957,796	(14,169,008)
TOTAL ASSETS		6,453,231,063		6,488,689,924		(35,458,861)		6,506,747,428		6,562,013,116	(55,265,688)

F-141

LIABILITIES AND EQUITY		12/31/2012 (Restated) ThCh$		12/31/2012 (Issued) ThCh$		Variation at 12/31/2012 ThCh$		1/1/2012 (Restated) ThCh$		1/1/2012 (Issued) ThCh$		Variation at 1/1/2012 ThCh$
CURRENT LIABILITIES
Other current financial liabilities			406,455,036		413,106,828		(6,651,792)		294,300,017		305,557,690	(11,257,673)
Trade and other current payables			320,459,388		330,839,969		(10,380,581)		341,751,089		357,781,381	(16,030,292)
Accounts payable to related companies			215,916,921		213,600,122		2,316,799		137,455,787		135,386,489	2,069,298
Other current provisions			38,424,832		39,824,825		(1,399,993)		36,347,930		36,861,198	(513,268)
Current tax liabilities			78,374,028		79,764,107		(1,390,079)		90,465,240		92,175,628	(1,710,388)
Other current non-financial liabilities			6,387,423		8,362,377		(1,974,954)		5,700,771		9,466,893	(3,766,122)
TOTAL CURRENT LIABILITIES			1,066,017,628		1,085,498,228		(19,480,600)		906,020,834		937,229,279	(31,208,445)
NON-CURRENT LIABILITIES
Other non-current financial liabilities			1,525,651,818		1,525,651,818		-		1,728,093,903		1,728,093,903	-
Other long-term provisions			19,593,979		19,593,979		-		12,301,639		12,301,639	-
Deferred tax liabilities			320,277,100		331,894,233		(11,617,133)		321,510,926		338,888,981	(17,378,055)
Non-current provisions for employee benefits			39,672,411		39,799,128		(126,717)		36,041,426		36,569,407	(527,981)
Other non-current non-financial liabilities			47,524,798		51,609,093		(4,084,295)		61,780,693		67,790,334	(6,009,641)
NON-CURRENT LIABILITIES			1,952,720,106		1,968,548,251		(15,828,145)		2,159,728,587		2,183,644,264	(23,915,677)
TOTAL LIABILITIES			3,018,737,734		3,054,046,479		(35,308,745)		3,065,749,421		3,120,873,543	(55,124,122)
EQUITY
Issued capital			1,331,714,085		1,331,714,085		-		1,331,714,085		1,331,714,085	-
Retained earnings			1,709,375,632		1,709,375,632		-		1,636,787,540		1,636,787,540	-
Share premium			206,008,557		206,008,557		-		206,008,557		206,008,557	-
Other reserves			(705,855,875)		(705,855,875)		-		(615,972,185)		(615,972,185)	-
Equity attributable to shareholders of Endesa Chile			2,541,242,399		2,541,242,399		-		2,558,537,997		2,558,537,997	-
Non-controlling interests			893,250,930		893,401,046		(150,116)		882,460,010		882,601,576	(141,566)
	TOTAL EQUITY		3,434,493,329		3,434,643,445		(150,116)		3,440,998,007		3,441,139,573	(141,566)
TOTAL LIABILITIES AND EQUITY			6,453,231,063		6,488,689,924		(35,458,861)		6,506,747,428		6,562,013,116	(55,265,688)

F-142

b) Consolidated statement of comprehensive income

STATEMENT OF COMPREHENSIVE INCOME Profit (Loss)	2012 (Restated) ThCh$		2012 (Issued) ThCh$		2012 Variation ThCh$		2011 (Restated) ThCh$		2011 (Issued) ThCh$		2011 Variation ThCh$
Sales		2,255,145,360		2,301,821,443		(46,676,083)		2,267,839,378		2,387,451,263	(119,611,885)
Other operating income		65,239,964		67,564,931		(2,324,967)		16,425,409		17,038,942	(613,533)
Revenues		2,320,385,324		2,369,386,374		(49,001,050)		2,284,264,787		2,404,490,205	(120,225,418)
Raw materials and consumables used		(1,318,479,928)		(1,328,702,775)		10,222,847		(1,139,133,019)		(1,217,260,077)	78,127,058
Contribution Margin		1,001,905,396		1,040,683,599		(38,778,203)		1,145,131,768		1,187,230,128	(42,098,360)
Other work performed by the entity and capitalized		12,763,186		12,763,186		-		10,597,856		10,597,856	-
Employee benefits expenses		(102,456,232)		(106,975,269)		4,519,037		(75,915,220)		(80,389,456)	4,474,236
Depreciation and amortization expense		(184,567,997)		(190,522,970)		5,954,973		(170,505,351)		(176,447,100)	5,941,749
Reversal of impairment loss (impairment loss) recognized in the period’s profit or loss		(11,117,362)		(11,117,362)		-		(9,472,766)		(9,472,766)	-
Other expenses		(104,111,191)		(112,621,980)		8,510,789		(133,146,638)		(143,548,052)	10,401,414
Operating Income		612,415,800		632,209,204		(19,793,404)		766,689,649		787,970,610	(21,280,961)
Other gains (losses)		1,422,458		1,392,470		29,988		2,010,780		2,010,780	-
Financial income		14,629,962		14,922,301		(292,339)		28,264,192		28,039,261	224,931
Financial costs		(148,468,667)		(149,224,963)		756,296		(135,257,667)		(137,535,382)	2,277,715
Share of profit (loss) of associates accounted for using the equity method		135,012,994		116,944,901		18,068,093		138,855,650		123,033,273	15,822,377
Foreign currency exchange differences		(12,090,438)		(10,739,861)		(1,350,577)		(6,649,911)		(6,466,655)	(183,256)
Profit (loss) from indexed assets and liabilities		(1,066,291)		(991,050)		(75,241)		(5,447,396)		(5,332,672)	(114,724)
Net income before tax		601,855,818		604,513,002		(2,657,184)		788,465,297		791,719,215	(3,253,918)
Income tax		(182,832,956)		(185,470,223)		2,637,267		(207,329,896)		(210,564,505)	3,234,609
Net income from continuing operations		419,022,862		419,042,779		(19,917)		581,135,401		581,154,710	(19,309)
Net income from discontinued operations		-		-		-		-		-	-
NET INCOME		419,022,862		419,042,779		(19,917)		581,135,401		581,154,710	(19,309)
Net income attributable to
Shareholders of Endesa Chile		234,335,264		234,335,264		-		446,874,043		446,874,043	-
Non-controlling interests		184,687,599		184,707,515		(19,916)		134,261,358		134,280,667	(19,309)
NET INCOME		419,022,863		419,042,779		(19,916)		581,135,401		581,154,710	(19,309)
Basic earnings per share
Basic earnings per share from continuing operations		28.57		28.57		28.57		54.49		54.49	54.49
Basic earnings per share		28.57		28.57		28.57		54.49		54.49	54.49
Diluted earnings per share
Diluted earnings per share from continuing operations		28.57		28.57		28.57		54.49		54.49	54.49
Diluted earnings per share		28.57		28.57		28.57		54.49		54.49	54.49

F-143

c) Consolidated statement of cash flow

Statement of Direct Cash Flow	2012 (Restated) ThCh$		2012 (Issued) ThCh$		2012 Variation ThCh$		2011 (Restated) ThCh$		2011 (Issued) ThCh$		2011 Variation ThCh$
Cash flow from (used in) operating activities
Types of collections from operating activities
Collections from the sale of goods and services		2,499,606,379		2,557,471,193		(57,864,814)		2,368,738,929		2,504,061,586		(135,322,657)
Collections from premiums and services, annual payments, and other benefits from policies held		5,903,050		5,903,050		-		16,628,221		16,628,221		-
Other collections from operating activities		54,355,078		56,299,609		(1,944,531)		2,378,295		7,361,320		(4,983,025)
Types of payments
Payments to suppliers for goods and services		(1,523,776,643)		(1,553,989,987)		30,213,344		(1,321,067,912)		(1,434,235,803)		113,167,891
Payments to and on behalf of employees		(101,337,905)		(106,519,088)		5,181,183		(67,270,485)		(72,061,666)		4,791,181
Payments on premiums and services, annual payments, and other obligations from policies held		(6,428,460)		(7,660,814)		1,232,354		(5,064,371)		(5,126,423)		62,052
Other payments for operating activities		(39,729,787)		(40,479,993)		750,206		(25,946,895)		(27,518,236)		1,571,341
Income taxes reimbursed (paid)		(213,016,120)		(213,483,352)		467,232		(231,950,211)		(232,151,601)		201,390
Other inflows (outflows) of cash		(137,591,721)		(143,282,989)		5,691,268		(71,911,854)		(71,851,264)		(60,590)
Net cash flows from (used in) operating activities		537,983,871		554,257,629		(16,273,758)		664,533,717		685,106,134		(20,572,417)
Cash flows from (used in) investment activities
Cash flows used to obtain control of subsidiaries or other business		(7,140,000)		-		(7,140,000)		(4,058,192)				(4,058,192)
Other payments to acquire equity or debt instruments from other entities		(25,017,177)		(25,017,177)		-		-				-
Loans to related companies		(2,000)		(2,000)		-		(36,828,162)		(35,527,662)		(1,300,500)
Proceeds from the sale of property, plant, and equipment		755,445		755,445		-		4,808,823		4,808,823		-
Purchases of property, plant, and equipment		(257,474,634)		(261,759,378)		4,284,744		(259,673,138)		(266,667,712)		6,994,574
Purchases of intangible assets		(8,535)		(112,193)		103,658		(3,935,477)		(3,940,411)		4,934
Payments from future, forward, option, and swap contracts		(2,691,688)		(2,691,688)		-		(3,474,792)		(3,474,792)		-
Collections from future, forward, option, and swap contracts		2,013,452		2,013,452		-		4,108,554		4,108,554		-
Collections from related entities		2,600,730		-		2,600,730		-				-
Dividends received		10,898,590		10,898,590		-		100,121,048		100,121,048		-
Interest received		7,053,828		7,053,828		-		6,138,870		6,138,870		-
Other inflows (outflows) of cash		10,693,352		10,693,352		-		41,114		41,114		-
Net cash flows from (used in) investment activities		(258,318,637)		(258,167,769)		(150,868)		(192,751,352)		(194,392,168)		1,640,816
Cash flows from (used in) financing activities
Total proceeds from loans		233,456,449		233,456,449		-		219,433,669		219,433,669		-
Proceeds from long-term loans		229,377,002		229,377,002		-		219,433,669		219,433,669		-
Proceeds from short-term loans		4,079,447		4,079,447		-		-		-		-
Loans from related companies		210,996,548		210,996,548		-		53,289,193		44,160,543		9,128,650
Payments on borrowings		(253,055,606)		(255,656,336)		2,600,730		(139,777,444)		(149,315,986)		9,538,542
Payments on finance lease liabilities		(7,522,468)		(7,522,468)		-		(8,811,381)		(8,811,381)		-
Payments on loans to related companies		(100,716,674)		(100,716,674)		-		(34,110,125)		(34,110,125)		-
Dividends paid		(380,332,864)		(380,332,864)		-		(368,222,978)		(368,222,978)		-
Interest paid		(124,326,459)		(125,167,043)		840,584		(107,274,772)		(109,669,012)		2,394,240
Other inflows (outflows) of cash		(12,497,098)		(13,576,169)		1,079,071		(14,786,723)		(10,653,080)		(4,133,643)
Net cash flows from (used in) financing activities		(433,998,172)		(438,518,557)		4,520,385		(400,260,561)		(417,188,350)		16,927,789
Net increase (decrease) in cash and cash equivalents before effect of exchange rate changes		(154,332,938)		(142,428,697)		(11,904,241)		71,521,804		73,525,616		(2,003,812)
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents		242,400		(2,058,912)		2,301,312		14,486,741		14,486,809		(68)
Net increase (decrease) in cash and cash equivalents		(154,090,538)		(144,487,609)		(9,602,929)		86,008,545		88,012,425		(2,003,880)
Cash and cash equivalents at beginning of period		389,768,271		421,282,284		(31,514,013)		303,759,726		333,269,859		(29,510,133)
Cash and cash equivalents at end of period		235,677,733		276,794,675		(41,116,942)		389,768,271		421,282,284		(31,514,013)

F-144

Pursuant to Rule 3-09 and Rule 1-02(w) of Regulation S-X, Endesa Chile is required to present separately the financial statements of Endesa Brasil S.A. and subsidiaries as of December 31, 2013 and 2012, prepared in accordance with International Financial Reporting Standards.

Contents

Audited financial statements

Consolidated statements of financial position	G-1
Consolidated income statements	G-3
Consolidated statements of other comprehensive income	G-4
Consolidated statements of changes in equity	G-5
Consolidated statements of cash flows	G-6
Notes to the consolidated financial statements	G-7

Endesa Brasil S.A.

Consolidated statements of financial position

At December 31, 2013 and 2012

(In thousands of Reais)

	Notes	12/31/2013		12/31/2012
Assets
Current assets
Cash and cash equivalents	5		1,096,850		814,805
Marketable securities	6		735,678		615,150
Accounts receivable
Consumers, concessionaires and permittees, net	7		1,032,458		1,195,904
Low income consumers	8		67,929		65,043
CDE Subventions - Tariff discount	9		20,385		-
CDE Subventions resources - Decree No. 7,945/2013	4		13,429		-
Taxes recoverable	10		322,072		175,322
Tax credit from merger	14		8,793		9,609
Guarantees and judicial deposits	11		52,939		49,656
Free energy			2,775		2,796
Derivative financial instruments – gain on swap			322		-
Other receivables	15		339,240		259,374
Total current assets			3,692,870		3,187,659
Non-current assets
Accounts receivable
Consumers, concessionaires and permittees, net	7		147,079		170,983
Taxes recoverable	10		157,762		163,107
Escrow deposits	12		332,256		300,475
Guarantees and deposits	11		64,054		65,497
Deferred taxes	13		387,531		716,032
Tax credit from merger	14		64,656		73,449
Derivative financial instruments – gain on swap			19,719
Indemnification assets (concession)	16		2,014,096		1,638,619
Other receivables	15		2,124		1,863
Investments			6,578		100
Property, plant and equipment	17		1,990,252		2,006,697
Intangible assets	18		4,606,872		4,599,221
Total non-current assets			9,792,979		9,736,043
Total assets			13,485,849		12,923,702

See accompanying notes.

G-1

	Notes	12/31/2013			12/31/2012
Liabilities and equity
Current liabilities
Trade accounts payable	19		847,571			796,962
Loans and financing	20		261,651			319,687
Debentures	21		25,737			143,282
Payroll			85,517			67,621
Taxes payable	23		251,293			215,647
Regulatory charges	24		21,518			76,717
Dividends payable			859,410			375,873
Public lighting contribution collected			25,874			23,820
Post-employment benefit obligations	31		12,824			12,098
Installment tax program	26		14,478			40,792
Provision - “Luz para Todos” program			27,367			12,452
Free energy			29,869			27,490
Research, development and energy efficiency programs	25		95,238			101,310
Other obligations			49,486			44,194
Total current liabilities			2,607,833			2,257,945
Non-current liabilities
Trade accounts payable	19		146,336			126,753
Loans and financing	20		1,113,456			677,333
Debentures	21		1,188,484			1,310,051
Installment tax program	26		19,130			29,893
Deferred taxes	13		73,077			398,912
Post-employment benefit obligations	31		477,845			551,794
Research, development and energy efficiency programs	25		75,386			32,291
Free energy			4,572			4,217
Provision for tax, civil and labor risks	28		568,199			537,095
Other obligations			73,571			52,172
Total non-current liabilities			3,740,056			3,720,511
Equity	29
Attributed to controlling shareholder
Capital			1,056,049			916,879
Treasury shares			(111,025	)		(111,025)
Capital reserve			2,504,370			2,504,370
Income reserve			894,086			780,426
Other comprehensive income			8,170			(1,684)
Equity valuation adjustments			205,398			243,074
Proposal for payment of additional dividends			616,152			741,665
			5,173,200			5,073,705
Attributed to non-controlling shareholders
Attributed to other entities in the Enersis S.A. Group			1,289,440			1,041,964
Attributed to other non-controlling shareholders			675,320			829,577
			1,964,760			1,871,541
Total equity			7,137,960			6,945,246
Total liabilities and equity			13,485,849			12,923,702

See accompanying notes.

G-2

Endesa Brasil S.A.

Consolidated income statements

For the years ended 31 December 2013, 2012 and 2011

(In thousands of Reais)

	Notes	12/31/2013		12/31/2012		12/31/2011
Net revenue	33		7,635,755		7,485,085		6,579,272
Cost of services	34		(5,420,350)		(5,073,454)		(4,357,864)
Gross profit			2,215,405		2,411,631		2,221,408
Operating expenses
Selling expenses	34		(128,789)		(124,766)		(54,096)
General and administrative expenses	34		(374,110)		(372,151)		(369,471)
Amortization and reversal of goodwill from merger	34		(24,720)		(27,013)		(29,518)
Other operating expenses	34		(65,822)		(13,570)		(13,515)
Total operating expenses			(593,441)		(537,500)		(466,600)
Operating income			1,621,964		1,874,131		1,754,808
Financial income (expenses)
Financial income	35		611,593		767,779		451,739
Financial expenses	35		(549,586)		(607,380)		(575,348)
Foreign exchange variation, net	35		(17,760)		(1,075)		(18,904)
Income before taxes			1,666,211		2,035,605		1,612,295
Current income and social contribution taxes	32		(496,337)		(383,909)		(412,424)
Deferred income and social contribution taxes	13 and 32		32,856		(204,196)		(62,679)
Tax incentives	32		50,911		23,136		66,329
Net income for the year			1,253,641		1,470,636		1,203,521
Attributable to controlling shareholder			910,247		1,003,817		871,135
Attributed to other entities in the Enersis S.A. Group			275,232		248,899		117,743
Other non-controlling shareholders			68,162		217,920		214,643

See accompanying notes.

G-3

Endesa Brasil S.A.

Consolidated statements of other comprehensive income

For the years ended 31 December 2013, 2012 and 2011

(In thousands of Reais)

	12/31/2013		12/31/2012		12/31/2011
Net income for the year		1,253,641		1,470,636		1,203,521
Other comprehensive income
Other comprehensive income to be reclassified to income statements In subsequent periods:
Loss on derivative financial instruments		23,635		(2,435)		(2,176)
Deferred tax on loss on derivative financial instruments		(8,085)		828		740
Cumulative translation adjustment		1,824		80		118
Net other comprehensive income to be reclassified to income statements in subsequent periods:		17,374		(1,527)		(1,318)
Other comprehensive income not to be reclassified to income statements In subsequent periods:
Actuarial loss in subsidiary’s pension fund		75,734		(11,476)		(205,740)
Deferred tax on actuarial loss in pension fund		(25,750)		3,902		69,952
Net other comprehensive income not to be reclassified to income statements in subsequent periods:		49,984		(7,574)		(135,788)
Net other comprehensive income, net of tax		67,358		(9,101)		(137,106)
Comprehensive income for the year, net of tax		1,320,999		1,461,535		1,066,415
Attributable to controlling shareholder		941,863		999,299		805,900
Attributable to other entities in the Enersis S.A. Group		314,471		262,542		65,187
Attributable to other non-controlling shareholders		64,665		199,694		195,328

See accompanying notes.

G-4

Endesa Brasil S.A.

Consolidated statements of changes in equity

For the years ended 31 December 2013, 2012 and 2011

(In thousands of Reais)

							Capital Reserve		Income reserves
	Capital		Shares redeemable in the future		Treasury shares		Remuneration of goodwill in the issue of shares		Legal reserve		Other reserves		Statutory reserve for working capital		Other comprehensive income		Equity valuation adjustment		Retained earnings		Additional dividend distribution proposal		Shareholders Endesa Brasil		Other shareholders Enersis S.A. Group		Non- controlling shareholders		Total
Balances at December 31, 2010		916,879		(111,025)		-		2,504,370		91,818		-		-		90		333,491		-		507,183		4,242,806		799,330		705,466		5,747,602
Write-off of repurchasable shares				111,025		(111,025)		-		-		-		-		-		-		-		-		-		-		-		-
Depreciation of PP&E (deemed cost)		-		-		-		-		-		-		-		-		(34,713)		34,713		-		-		-		-		-
Approval of proposed dividends		-		-		-		-		-		-		-		-		-		-		(507,183)		(507,183)		(10,475)		(101,153)		(618,811)
Net income for the year		-		-		-		-		-		-		-		-		-		871,135		-		871,135		117,743		214,643		1,203,521
Loss on subsidiary’s investment		-		-		-		-		-		-		-		-		-		(1,676)		-		(1,676)		-		-		(1,676)
Actuarial gain (loss) on subsidiary’s pension fund		-		-		-		-		-		-		-		(63,917)		-		-		; -		(63,917)		(52,556)		(19,315)		(135,788)
Transfer to retained earnings		-		-		-		-		-		-		-		63,917		-		(63,917)		-		-		-		-		-
Reversal of dividends prescribed in subsidiaries		-		-		-		-		-		-		-		-		-		162		-		162		49		129		340
Loss on derivative financial instrument		-				-		-		-		-		-		(1,436)		-		-		-		(1,436)		-		-		(1,436)
Legal reserve		-		-		-		-		42,021		-		-		-		-		(42,021)		-		-		-		-		-
Management’s proposal for net income allocation
Interim dividends		-		-		-		-		-		-		-		-		-		(163,258)		-		(163,258)		(300)		(536)		(164,094)
Mandatory dividends		-		-		-		-		-		-		-		-		-		(36,341)		-		(36,341)		(15,151)		(40,730)		(92,222)
Statutory reserve for working capital		-		-		-		-		-		-		598,797		-		-		(598,797)		-		-		-		-		-
Cumulative translation adjustment		-		-		-		-		-		-		-		118		-		-		-		118		-		-		118
Balances at December 31, 2011		916,879		-		(111,025)		2,504,370		133,839		-		598,797		(1,228)		298,778		-		-		4,340,410		838,640		758,504		5,937,554
Depreciation of PP&E (deemed cost)		-		-		-		-		-		-		-		-		(55,704)		55,704		-		-		-		-		-
Approval of proposed dividends		-		-		-		-		-		-		-		-		-		-		-		-		(251)		(75,986)		(76,237)
Net income for the year		-		-		-		-		-		-		-		-		-		1,003,817		-		1,003,817		248,899		217,920		1,470,636
Actuarial gain (loss) on subsidiary’s pension fund		-		-		-		-		-		-		-		(4,062)		-		-		-		(4,062)		14,366		(17,878)		(7,574)
Transfer to retained earnings		-		-		-		-		-		-		-		4,062		-		(4,062)		-		-		-		-		-
Loss on derivative financial instrument		-		-		-		-		-		-		-		(536)		-		-		-		(536)		(723)		(348)		(1,607)
Effect of subsidiary’s change		-		-		-		-		-		(1,124)		-		-		-		-		-		(1,124)		(1,089)		-		(2,213)
Management’s proposal for net income allocation
Interim dividends		-		-		-		-		-		-		-		-		-		-		-		-		(403)		(772)		(1,175)
Mandatory dividends		-		-		-		-		-		-		-		-		-		(264,880)				(264,880)		(57,475)		(51,863)		(374,218)
Additional proposed																				(741,665)		741,665		-		-		-		-
Statutory reserve for working capital		-		-		-		-		-		-		48,914		-		-		(48,914)		-		-		-		-		-
Cumulative translation adjustment		-		-		-		-		-		-		-		80		-		-		-		80		-		-		80
Balances at December 31, 2012		916,879		-		(111,025)		2,504,370		133,839		(1,124)		647,711		(1,684)		243,074		-		741,665		5,073,705		1,041,964		829,577		6,945,246
Capital increase (merger)		139,170		-		-		-		-		-		-		-		-		-		-		139,170		(139,170)		-		-
Capital reduction of subsidiary		-		-		-		-		-		-		-		-		-		-		-		-		(315)		(563)		(878)
Depreciation of PP&E (deemed cost)		-		-		-		-		-		-		-		-		(37,676)		37,676		-		-		-		-		-
Approval of proposed dividends		-		-		-		-		-		-		-		-		-		-		(741,665)		(741,665)		(216)		(48,648)		(790,529)
Net income for the year		-		-		-		-		-		-		-		-		-		910,247		-		910,247		275,232		68,162		1,253,641
Actuarial gain (loss) on subsidiary’s pension fund		-		-		-		-		-		-		-		21,762		-		-		-		21,762		33,745		(5,523)		49,984
Transfer to retained earnings		-		-		-		-		-		-		-		(21,762)		-		21,762		-		-		-		-		-
Gain on derivative financial instrument		-		-		-		-		-		-		-		8,030		-		-		-		8,030		5,494		2,026		15,550
Effect of merger		-		-		-		-		-		(2,892)		-		-		-		-		-		(2,892)		-		-		(2,892)
Transfer of participations		-		-		-		-		-		-		-		-		-		-		-		-		158,068		(158,068)		-
Management’s proposal for net income allocation
Interim dividends		-		-		-		-		-		-		-		-		-		-		-		-		(336)		(600)		(936)
Mandatory dividends		-		-		-		-		-		-		-		-		-		(236,981)				(236,981)		(85,026)		(11,043)		(333,050)
Additional proposed																				(616,152)		616,152		-		-		-		-
Statutory reserve for working capital		-		-		-		-		-		-		116,552		-		-		(116,552)		-		-		-		-		-
Cumulative translation adjustment		-		-		-		-		-		-		-		1,824		-		-		-		1,824		-		-		1,824
Balances at December 31, 2013		1,056,049		-		(111,025)		2,504,370		133,839		(4,016)		764,263		8,170		205,398		-		616,152		5,173,200		1,289,440		675,320		7,137,960

See accompanying notes

G-5

Endesa Brasil S.A.

Consolidated statements of cash flows

For the years ended 31 December 2013, 2012 and 2011

(In thousands of Reais)

	12/31/2013		12/31/2012		12/31/2011
Operating activities
Income before taxes for the year		1,666,211		2,035,605		1,612,295
Adjustments to reconcile income before tax to cash from operating activities:
Allowance for doubtful accounts		98,419		98,970		141,419
Depreciation and amortization		517,941		455,917		450,286
Amortization and reversal of goodwill from merger		24,720		27,013		29,518
Impairment		10,919		-		-
Provisions (reversal) of tax, civil and labor risks		113,167		107,433		(9,142)
Tax credit from merger		9,609		10,501		11,474
Monetary restatements and interest		243,687		300,947		344,400
Indemnification assets revenues		(205,165)		(487,517)		(23,728)
Net book value of written off intangible assets and property, plant and equipment		119,704		13,667		13,457
Research, development and energy efficiency programs		75,890		71,888		24,194
Post-employment benefit obligations		50,214		52,754		13,564
Provision for inventory losses		7,750		(166)		485
Financial instruments through profit and loss		(6,704)		(2,384)		(4,243)
Other revenues		-		-		2,796
		2,726,362		2,684,628		2,606,775
(Increase) decrease in operating assets
Consumers, concessionaires and permittees		91,098		(131,517)		(136,360)
Low income consumers		(2,886)		(16,335)		13,457
CDE Subventions - Tariff discount		(20,385)		-		-
CDE Subventions resources - Decree No. 7,945/2013		(13,429)		-		-
Guarantees and judicial deposits		(1,840)		31,786		(22,430)
Escrow deposits		(290)		(2,733)		(11,721)
Other		(84,311)		(85,738)		25,118
Increase (decrease) in operating liabilities:
Trade accounts payable		74,429		187,447		(46,795)
Payroll		17,896		13,553		(1,477)
Regulatory charges		(55,199)		4,972		10,308
Research, development and energy efficiency programs		(38,867)		(31,741)		(93,813)
Post-employment benefit obligations		(42,380)		(53,681)		(38,542)
Payment of tax, civil and labor claims		(82,063)		(206,415)		(120,795)
Other liabilities		46,394		41,770		(10,257)
Taxes payable / recoverable, net		(551,185)		(424,457)		(297,582)
Net cash flows from operating activities		2,063,344		2,011,539		1,875,886
Investing activities
Marketable securities		(120,528)		5,934		82,198
Result of merger		(2,892)		-		-
Investments		(2,324)		-		(100)
Investments in intangible assets and property, plant and equipment		(843,125)		(641,700)		(686,771)
Net cash flows used in investing activities		(968,869)		(635,766)		(604,673)
Financing activities
Debentures funding		-		400,000		700,000
Payment of debentures		(296,251)		(360,779)		(275,500)
Loans and financing		717,557		124,956		427,421
Payment of loans and financing		(351,978)		(625,710)		(688,706)
Payment of interest on loans and financing		(78,934)		(125,117)		(101,657)
Payment of interest on debentures		(109,106)		(120,822)		(169,440)
Payment of intercompany loans		-		(4,342)		(28,347)
Payment of debt agreement with Faelce		(6,934)		(14,262)		(13,841)
Dividends payment		(640,955)		(168,139)		(918,607)
Capital reduction		(901)		-		-
Installment tax program payment		(46,752)		(47,741)		(37,250)
IFC payments		-		-		(184,065)
Net cash flows used in financing activities		(814,254)		(941,956)		(1,289,992)
Cumulative translation adjustment		1,824		80		118
Increase (decrease) in net cash and cash equivalents		282,045		433,897		(18,661)
Cash and cash equivalents at the beginning of year		814,805		380,908		399,569
Cash and cash equivalents at the end of year		1,096,850		814,805		380,908
Increase (decrease) in net cash and cash equivalents		282,045		433,897		(18,661)

See accompanying notes.

G-6

Endesa Brasil S.A.

Notes to the consolidated financial statements

December 31, 2013 and 2012

(In thousands of Reais, unless otherwise stated)

1. CORPORATE INFORMATION

Operations

The business purpose of Endesa Brasil S.A. (“Endesa Brasil” or “Company”), with registered office located at Praça Leoni Ramos, No.01, Niterói, Rio de Janeiro, Brazil, is to hold interests in other entities that directly or indirectly operate or come to operate in any electric energy industry segment or as a provider of electric energy transmission, distribution, generation or trade services and related activities.

Endesa Brasil S.A. is a subsidiary of Enersis S.A., a Chilean company controlled by Endesa S.A. which is a Spanish company controlled by Enel S.p.A. (“Enel”).

The Company holds interest in the following operational subsidiaries by segment, which together with the Company, form Endesa Brasil Group (“Endesa Group” or “Group”):

a) Electric energy distribution

Ampla Energia e Serviços S.A.

Ampla Energia e Serviços S.A. (“Ampla Energia”), is a publicly-held company, registered at BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros, with registered office located at Praça Leoni Ramos, No.01, municipality of Niterói, State of Rio de Janeiro, electric energy utility concessionaire, designed to explore the distribution and marketing of electricity systems and participate in research related to the energy sector, such activities being regulated by the National Electric Energy Agency - ANEEL, which is under the Ministry of Mines and Energy.

Ampla Energia’s concession area includes 66 cities, 65 of which are in the State of Rio de Janeiro and one in the State of Minas Gerais. The concession of public distribution of electricity was arranged by the Concession Contract No. 005/1996 of December 9, 1996 from ANEEL, with maturity in December 2026.

Endesa Brasil holds direct interest of 46.89% of Ampla Energia’s capital.

G-7

1. CORPORATE INFORMATION--Continued

Operations--Continued

a) Electric energy distribution--Continued

Companhia Energética do Ceará - COELCE

Companhia Energética do Ceará - COELCE (“COELCE”), is a publicly-held company, registered at BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros, at Rua Padre Valdevino, No.150, Fortaleza, Ceará, electric energy utility concessionaire, designed to research, study, plan and explore the distribution of electricity, such activities being regulated by the National Electric Energy Agency - ANEEL, which is under the Ministry of Mines and Energy.

COELCE’s concession area covers the whole State of Ceará. The concession of public distribution of electricity was arranged by the Concession Contract No. 001/1998 of May 13, 1998 from ANEEL, with maturity in May 2028.

Endesa Brasil holds direct interest of 58.87% of COELCE’s capital.

b) Electric energy generation

Centrais Elétricas Cachoeira Dourada S.A. - CDSA

Centrais Elétricas Cachoeira Dourada S.A. - CDSA (“CDSA”), is a privately-held company with registered office located at Rodovia GO 206, KM0, Cachoeira Dourada, Goiás, primarily engaged in conducting studies and projections, and in building, installing and operating electric generation power plants, as well as performing commercial acts deriving from such activities, which are regulated by the National Agency of Electric Energy - ANEEL under the Ministry of Mines and Energy.

On September 5, 1997, a public auction was carried out for acquisition of representative shareholding in the CDSA capital by private entities. This transaction was recognized by the granting authorities by means of the Concession Agreement No. 011/97, of September 12, 1997, which establishes that the concession term is of 30 years, expiring in September 2027. The subsidiary’s fixed assets consist substantially of the power plant assets mentioned above, located in Rio Paranaíba, with installed capacity of 658 MW, subdivided into 10 generating units.

Endesa Brasil holds direct interest of 99.61% of CDSA’s capital.

G-8

1. CORPORATE INFORMATION--Continued

Operations--Continued

b) Electric energy generation--Continued

Central Geradora Termelétrica Fortaleza S.A. - CGTF

Central Geradora Termelétrica Fortaleza S.A. - CGTF (“CGTF”), is a privately-held company, with registered office located at Rodovia CE422, Km 01, Complexo Industrial e Portuária do Pecém, Caucaia, Ceará, organized on August 20, 2001 and authorized by the National Agency of Electric Energy -ANEEL to operate as an independent energy producer, by means of ANEEL Resolution No. 433, of October 19, 2001, formed by a combined cycle of two gas turbines and a vapor turbine, pursuant to ANEEL Decision No. 73/2002. Start-up of operations occurred on December 27, 2003.

As defined in the articles of incorporation, CGTF is engaged in the study, project, construction and exploration of energy production, transmission, distribution and sale systems that may be granted, permitted or authorized by any law, in addition to exercising other related activities and providing services of any nature referring to mentioned activities.

Central Geradora Termelétrica Fortaleza S.A. - CGTF--Continued

CGTF is part of the Federal Government’s Thermoelectric Priority Program (PPT) to expand the supply of electric energy throughout Brazil, and CGTF contracted on August 31, 2001 the sale of 2,690 GWh/year (equivalent to an average 307 MW) to the subsidiary COELCE, also belonging to Endesa Group, over 20 years, as from the beginning of the energy supply in January 2004, at the price established by ANEEL, subject to annual adjustment based on a basket of indicators that includes IGPM, US dollar and contracted natural gas variations.

CGTF is a wholly-owned subsidiary of Endesa Brasil.

Eólica Fazenda Nova - Geração e Comercialização de Energia Ltda.

Eólica Fazenda Nova - Geração e Comercialização de Energia Ltda. (“Fazenda Nova”) is a limited liability entity, headquartered at Rua Felipe Camarão, No.507, sala 201, Cidade Alta - Natal/Rio grande do Norte, engaged in the generation, transmission, distribution and sale of electric energy and related activities.

On September 30, 2009, Endesa Brasil completed the acquisition of a 99.95% equity stake in Eólica Fazenda Nova for R$ 3,942. This investee is in a pre- operational stage and was incorporated to take part in wind power auctions.

G-9

1. CORPORATE INFORMATION--Continued

Operations--Continued

c) Electric energy transmission

CIEN - Companhia de Interconexão Energética

CIEN - Companhia de Interconexão Energética (“CIEN”), is a privately-held company with registered office located at Praça Leoni Ramos, No.01, Niterói, Rio de Janeiro, primarily engaged in production, processing, distribution and sale of electricity, including related import and export activities, implementing the services required to achieve this business purpose. In this regard, CIEN will work on the study, planning and construction of facilities related to electricity production, transmission, conversion and distribution systems. CIEN may foster the implementation of associated projects, carry out activities related, incidental or supplementary to such services and work it may provide, and may also hold interest in other companies.

On April 4, 2011, by means of Administrative Rulings Nos. 210 and 211, Garabi I and Garabi II lines, respectively, started being treated as equivalent to transmission concessions. Such equivalence treatment subjects both transmission lines of the subsidiary to the methodology whereby revenue is recognized through annual ratification of the Allowed Annual Revenue – RAP by ANEEL.

The commercial and technical equivalence of that subsidiary to an electric power transmission concession, comprising the two lines, has a finite 9-year term to Garabi I, effective through June 20, 2020, and an 11-year term for Garabi II, effective through July 31, 2022.

Endesa Brasil holds direct interest of 100.00% in CIEN.

d) Holding companies

Ampla Investimentos e Serviços S.A. (“Ampla Investimentos”) and Investluz S.A. (“Investluz”)

The Holding Companies Ampla Investimentos and Investluz are mainly engaged to participate in other companies, either as shareholder or member (“holding companies”). On November 21, 2013, were merged into Endesa Brasil, as mentioned below in greater detail.

e) Service rendering

En-Brasil Comércio e Serviços S.A.

En-Brasil Comércio e Serviços S.A. (“Prátil”) is a privately-held company, headquartered at Praça Leoni Ramos, No.01, municipality of Niterói, State of Rio de Janeiro, established on August 18, 2009, for the purpose of holding interest in the capital of other companies and/or entities, associations, consortiums and other forms of associations in Brazil and abroad, in addition to rendering of general services, directly or indirectly related to its activities, to the electric energy industry and other economy and general consumption sectors.

Endesa Brasil owns a 99.99% direct interest in Prátil.

G-10

1. CORPORATE INFORMATION--Continued

Operations--Continued

Corporate restructuring

In 2013, the Group went through a corporate restructuring process, in order to optimize the operations and expand the operating structure, as follows:

Merger of Investluz into Endesa Brasil

On November 21, 2013, as decided by the Extraordinary Shareholder’s Meeting, the merger of Investluz into its controlling entity Endesa Brasil was approved under the Protocol and Terms of the Merger. As a result of this merger, Investluz was extinct and Endesa Brasil became its successor.

Investluz’s equity was valuated as of March 31, 2013, considering the book value in R$ 1,164,939, according to the Appraisal Report for Merger Purposes issued by a specialist independent appraisal. This merger was registered based on the book values, considering that it was carried out between entities under common control. Net assets are as follows:

Assets:
Cash and cash equivalents	14,671
Marketable securities	7,177
Dividends receivable	14,653
Taxes recoverable	54,665
Judicial deposits	803
Investments in subsidiary COELCE	919,177
Intangible assets	241,440
Total merged assets	1,252,586
Taxes, fees and contributions payable	5,483
Dividends payable	49,396
Taxes payable	6,024
Provision for tax, civil and labor risk	26,744
Total merged liabilities	87,647
Net assets	1,164,939

The amount invested in COELCE (subsidiary) was eliminated on the merger process.

G-11

1. CORPORATE INFORMATION--Continued

Operations--Continued

Corporate restructuring -- Continued

Merger of Ampla Investimentos into Endesa Brasil

On November 21, 2013, as decided by the Extraordinary Shareholder’s Meeting, the merger of Ampla Investimentos into its controlling entity Endesa Brasil was approved under the Protocol and Terms of the Merger. As a result of this merger, Ampla Investimentos was extinct and Endesa Brasil became its successor.

Ampla Investimentos’s equity was valuated as of March 31, 2013, considering the book value in R$ 262,862, according to the Appraisal Report for Merger Purposes issued by a specialist independent appraisal. This merger was registered based on the book values, considering that it was carried out between entities under common control. Net assets are as follows:

Assets:
Cash and cash equivalents	1,924
Marketable securities	2,600
Dividends receivable	17,995
Taxes recoverable	665
Investments in subsidiary Investluz	424,387
Total merged assets	447,571
Payables to related parties	170,145
Dividends payable	13,687
Other accounts payable	877
Total merged liabilities	184,709
Net assets	262,862

The amount invested in Investluz (subsidiary) was eliminated on the merger process.

G-12

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1. Statement of compliance

The consolidated financial statements were prepared considering different assessment bases used in accounting estimates. The accounting estimates involved in the preparation of the financial statements were based on objective and subjective factors, considering management’s judgment to determine the appropriate amounts to be recorded in the financial statements. Significant items subject to such estimates and assumptions include the valuation of financial assets at fair value and present value, analysis of credit risks to determine the allowance for doubtful accounts, as well as analysis of other risks to determine other provisions, including the provision for contingencies.

Settlement of transactions involving these estimates may result in amounts significantly different from those recorded in the financial statements due to the probabilistic treatment inherent in the estimation process. The Group reviews its estimates and assumptions at least annually.

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The authorization for completion of preparation of these financial statements was granted at a board of officers’ meeting held on March 25, 2014.

G-13

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.2. Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries at December 31, 2013 and include Endesa Brasil’s operations, and those of its direct and indirect subsidiaries, with ownership interest at the balance sheet date being summarized as follows:

Subsidiary	Shareholding   interest (%)		Direct		Indirect
Central Geradora Termelétrica Fortaleza S.A. - CGTF		100.00		100.00		-
Centrais Elétricas Cachoeira Dourada S.A. - CDSA		99.61		99.61		-
Ampla Energia e Serviços S.A. (iii)		46.89		46.89		-
CIEN - Companhia de Interconexão Energética		100.00		100.00		-
Compañia de Transmisión del Mercosur S.A. – CTM (“CTM”) (ii)		99.99		-		99.99
Transportadora de Energia S.A. – TESA (“TESA”) (ii)		100.00		-		100.00
Companhia Energética do Ceará - COELCE		58.87		58.87		-
EN-Brasil Comércio e Serviço S.A. – Prátil		99.99		99.99		-
Eólica Fazenda Nova Geração e Comercialização de Energia Ltda		99.95		99.95		-
Trento Renda Fixa Crédito Privado Fundo de Investimento em Cotas de Fundos de Investimento (“Trento”) (i)		100.00		18.91		81.09
Bradesco Fundo de Investimento em Cotas de Fundos de Investimento RF Crédito Privado Compostela (“Compostela”) (i)		100.00		1.25		98.75
Fundo de Investimento Vicenza Renda Fixa - Crédito Privado (“Vicenza”) (i)		100.00		100.00		-

(i) Exclusive investment funds Trento, Compostela and Vicenza are managed, respectively, by Banco Itaucard S.A., Banco Bradesco S.A. and Votorantim Asset Management Distribuidora de Títulos e Valores Mobiliários Ltda.

(ii) Indirect subsidiaries located abroad.

(iii) Eventhough the interest on Ampla Energia is below 50.1%, Endesa Brasil has the control of this entity, considering it has the power to govern the financial and operating policies of them so as to obtain benefits from their activities.

The reporting period in the financial statements of consolidated subsidiaries is the same as that of the Company, and accounting policies have been consistently applied by the consolidated companies. The main consolidation procedures include:

(a) Derecognizes the assets and liabilities balances among consolidated companies;

(b) Derecognizes the share held in the capital, reserves and retained earnings of consolidated companies;

(c) Derecognizes income and expense balances and unrealized income arising from intercompany transactions; and

(d) Segregation of non-controlling interests in the consolidated financial statements.

G-14

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.3. Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for certain balances that have been measured at fair value when required by applicable regulations.

2.4. Foreign currency translation

The Group’s consolidated financial statements are presented in Brazilian Reais (R$), which is also the parent company’s functional currency. For each entity the Group determines the functional currency, and for those entities whose functional currency differs from the Brazilian Real, the financial statements were translated into Brazilian Real at the closing date.

In the preparation of the financial statements, foreign currency transactions, i.e., in any currency other than the functional currency, are recorded based on the exchange rate in force on the date of each transaction. At the end of each reporting period, the monetary items in foreign currency are retranslated at the rates in force at the end of the year. Gains and losses arising from the updates of these assets and liabilities noted between the exchange rate in force on the transaction date and the financial statements date are recognized as financial income or expense, in the income statements.

The financial statements of the indirect subsidiaries CTM and TESA were originally prepared in Argentinean pesos (ARS$ - functional currency). Assets and liabilities were translated into Brazilian Reais, at the exchange rate at December 31, 2013 – ARS 1.00 - R$ 0.3592, disclosed by the Central Bank of Brazil (December 31, 2012 – ARS 1.00 - 0.4156), whereas profit or loss accounts were translated at the average monthly rate.

Assets and liabilities of the foreign indirect subsidiaries are translated into Brazilian Reais at the exchange rate in force at the balance sheet date, and the corresponding income statements are translated at the average exchange rate for the month of the transaction date. Exchange rate differences arising from the referred to translation are recorded separately in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in income statements.

2.5. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Endesa Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and, excluding discounts, rebates and taxes or charges on sales.

2.5.1. Distribution revenue

Electric energy distribution services are measured by reference to electric energy amounts delivered within a given period. This measurement takes place based on the electricity meter reading schedule defined by subsidiaries COELCE and Ampla Energia. Electric energy distribution services are billed considering this reading schedule, and service revenue is recorded as bills are issued. In order to adjust readings to the related accounting periods, the services rendered between the reading date and the end of each month are recorded on an estimated basis.

G-15

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.5. Revenue recognition--Continued

2.5.2. Transmission revenue

Transmission revenue is recognized based on a specific document (Ratifying Resolution) issued annually by the National Electric Energy Agency (ANEEL) for a 1-year period from July 1 to June 30 each year. Monthly revenue is recognized by reference to amounts reported by the National System Operator (ONS) and refers to revenue from the transmission system availability.

2.5.3. Unbilled revenue

This corresponds to revenue from electric energy supplied to customers but not billed, and to revenue from the use of the distribution network but not yet billed. Unbilled revenue is estimated for the period between the last monthly reading and the last day of the month.

2.5.4. Construction revenue

IFRIC 12 – Service Concession Arrangements (“IFRIC 12”) requires electric energy concessionaires to record and measure service revenue in accordance with IAS 11 - Construction Contracts (“IAS 11”) (construction or improvement services) and IAS 18 - Revenue (“IAS 18”) (operation - electric energy supply services), even if subject to one single concession arrangement.

The Endesa Group accounts for revenue and costs relating to construction work or improvements to infrastructure facilities used for rendering electric energy distribution services. The construction margin adopted is defined as zero, considering that: (i) the core activity of the subsidiaries is the distribution of electric energy; (ii) all construction revenue refers to construction of infrastructure facilities in order to attain their business purpose, namely distribution of electric energy; and (iii) Endesa Group outsources the construction of infrastructure facilities to unrelated parties. Each month, all additions to intangible assets in progress are transferred to the statement of income as construction costs, after deduction of amounts received in the form of special obligations.

2.5.5. Interest income

Interest income is recognized on a time-proportion basis using the effective interest rate on the principal amount outstanding. The effective interest rate is the rate that exactly discounts the estimated future cash payment on receipts over the expected life of the financial instrument to the original net carrying amount of the financial asset.

G-16

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.6. Financial instruments - Initial recognition and subsequent measurement

2.6.1. Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 - Financial Instruments: Recognition and Measurement - are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. Endesa Group determines the classification of its financial assets at initial recognition, as they become part of the instrument’s contractual provisions.

Financial assets are recognized initially at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs directly attributable to the acquisition of that financial asset.

Endesa Group’s financial assets include cash and cash equivalents, marketables securities, accounts receivable from customers, concessionaires and licensees, accounts receivable from resellers, public utility concession (indemnification assets), collaterals, and derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as described below:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated in the initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by Endesa Group that do not qualify for hedge accounting, as set forth by IAS 39. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with the related gains or losses recognized in the income statement.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Endesa Group has the positive intention and ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The amortization of the effective interest rate is included in the income statement as financial income.

G-17

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.6. Financial instruments - Initial recognition and subsequent measurement--Continued

2.6.1. Financial assets--Continued

Subsequent measurement--Continued

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and incurred fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance income in the income statement. The losses arising from impairment are recognized in the income statement as financial cost.

Interest income is recognized at the effective interest rate, except for short-term receivables when the recognition of interest is immaterial.

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets not classified as:

(a) Loans and receivables;

(b) Held-to-maturity investments; or

(c) Financial assets at fair value through profit or loss.

After initial measurement, available-for-sale financial assets are measured at fair value, with unrealized gains or losses recognized as other comprehensive income until the investment is derecognized, except for impairment losses, interest calculated using the effective interest rate method and exchange gains or losses on monetary assets, which are recognized in the profit or loss of the period.

When the investment is derecognized or determined to be impaired, cumulative gains or losses previously recognized in other comprehensive income must be recognized in the income statement.

Derecognition (write-off) of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

„ The rights to receive cash flows from the asset have expired;

„ Endesa Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass- through’ arrangement; and either; and (i) the Group has transferred substantially all the risks and rewards of the asset, or (ii) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

G-18

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.6. Financial instruments - Initial recognition and subsequent measurement--Continued

2.6.1. Financial assets--Continued

Subsequent measurement--Continued

Derecognition (write-off) of financial assets--Continued

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset.

In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

2.6.1.1. Cash and cash equivalents and marketable securities

Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investing or any other purposes. The Group considers cash equivalents to be short- term investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Thus, an investment normally qualifies as a cash equivalent if it has a short-term maturity, e.g. three months or less, from the date of acquisition, while an investment with maturities greater than three months are usually classified as marketable securities.

2.6.1.2. Accounts receivable from consumers, concessionaires and permittees

This covers accounts receivable from (i) energy supply and use of network, billed and not billed, the latter of which is estimated, (ii) services rendered, late-payment increases, among others; (iii) sale of energy to concessionaires, permittees and free consumers; (iv) energy traded through the Electric Energy Commercialization Chamber - CCEE; and (v) availability of the electric energy transmission network, until the balance sheet closing date, recorded on an accrual basis. These are considered financial assets classified as loans and receivables.

2.6.1.3. Allowance for doubtful accounts

The allowance for doubtful accounts is established, substantially, considering receivables from residential consumers in default for more than 90 days, commercial consumers in default for more than 180 days, and industrial, rural, public sector, public lighting and public services in default for more than 360 days, based on a detailed analysis in connection with significant defaulters. This is recognized in an amount considered sufficient by the Group’s management to cover probable losses on credits recorded by the Group’s subsidiaries.

G-19

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.6. Financial instruments - Initial recognition and subsequent measurement--Continued

Subsequent measurement--Continued

2.6.2. Impairment of financial assets

The Group assesses, at each reporting date, whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event’”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

2.6.3. Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

Financial liabilities are initially recognized at fair value and in the case of loans and borrowings, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, bank overdrafts, loans and borrowings, debentures and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

Financial assets at fair value through income statement

Financial assets at fair value through income statement include financial assets held for trading and financial assets designated upon initial recognition at fair value through income statement. The Group does not present any financial liability at fair value through income statement.

Held for trading

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that do not qualify for hedge accounting as defined by IAS 39, unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the income statement.

G-20

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.6. Financial instruments - Initial recognition and subsequent measurement--Continued

2.6.3. Financial liabilities--Continued

Subsequent measurement--Continued

Loans, borrowings and debentures

After initial recognition, interest bearing loans and borrowings and debentures are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the liabilities are derecognized as well as through the effective interest rate method during the amortization process.

Derecognition (write-off) of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the income statement.

2.6.4. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to set off the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

2.6.5. Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

G-21

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.7. Derivative financial instruments

Endesa Group has derivative financial instruments represented by swap contracts, aiming at partially protecting its exposure to the CDI rate arising from debentures issued by Ampla Energia and COELCE, and to exchange rate variation on CGTF’s loans and financing pegged to the US dollar. Derivative financial instruments are classified as cash flow hedge and are recognized at fair value. Gains or losses on the effective portion of these swaps are recognized directly in equity, under other comprehensive income. Note 22 include more detailed information on the derivative financial instruments entered into by the Company’s subsidiaries.

Endesa Group does not have derivative contracts for commercial and speculative purposes.

2.8. Indemnification assets (Concession)

The Distribution Concession Agreement No. 05/96 – ANEEL, of December 9, 1996, celebrated between the Federal Government (Granting Authority) and Ampla Energia e Serviços S.A. (Concessionaire), and the Distribution Concession Agreement No. 01/98 – ANEEL, of May 13, 1998 and further amendments, celebrated between the Federal Government (Granting Authority) and COELCE (Concessionaire), regulate the operation of the public services of electricity distribution by the Company’s subsidiaries, considering that:

a) The agreements determine which services the operator has to provide and for whom (consumers);

b) These agreements determine the standard performance for the provision of public services, in relation to maintenance and improvement of customer service quality, and the operator has the obligation to, upon the end of the concession, return the infrastructure under the same conditions as received when these agreements were executed. To comply with these obligations, constant investments over the concession term are made. Therefore, the concession assets can be sometimes replaced until the end of the concession;

c) At the end of the concession, the assets linked to the infrastructure must be reversed to the granting authority upon payment of the indemnification; and

d) The price is regulated through a fee mechanism established in the concession agreements based on parametric formulas (Portion A and B), the fee review modalities are also defined, and they must be sufficient enough to cover the costs, the amortization of investments and remuneration of invested capital.

Based on the characteristics defined in the electricity distribution concession agreement of the Company’s subsidiaries, the Management understands that the conditions for application of IFRIC 12 – Service Concession Agreements, which provides instructions on accounting for concession of public services to private operators, in order to reflect the electricity distribution business, including:

1. Estimate portion of investments made and not amortized or depreciated until the end of the concession term determined based on the New Replacement Value (“VNR”) classified as financial asset as it is an unconditional right to receive cash or other financial asset directly from the granting authority; and

2. Remaining portion of financial asset (net book value) determined in accordance with VNR classified as intangible asset once its recovery is conditioned to the use of the public service, i.e. the consumption of electricity.

G-22

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.8. Indemnification assets (Concession)--Continued

The infrastructure received or built for distribution activities, which was originally represented by the fixed and intangible assets of the Company’s subsidiaries, is recovered through two cash flows, as follows: (i) a portion through consumption of electricity by consumers (issue of monthly bill according to measurement of electricity consumed/sold) during the concession term; and (ii) a portion through indemnification of reversible assets at the end of the concession, to be received directly by the granting authority or whomever thereby appointed.

This indemnification is based on portions of the investments linked to reversible assets, still not amortized or depreciated, which had been made in order to ensure that the granted services are continuous.

Pursuant to Law No. 12783/2013 (“Law No. 12783/13”), of January 11, 2013, the calculation of investments linked to reversible assets not yet amortized or depreciated for indemnification purposes must use the new replacement value method, according to the criteria defined by the granting authority. This method was adopted for the first time in financial statements for year ended December 31, 2012, not affecting prior-year results.

The Company’s subsidiaries recognize financial assets from concession agreements when there is an unconditional contractual right to receive cash or other equivalent financial asset from the granting authority referring to construction or improvement services provided. These financial assets are measured at fair value upon initial recognition; after initial recognition these financial assets are measured at their VNR.

This financial asset, represented by the indemnification value of the Company’s subsidiaries, is classified as “available for sale”.

2.9. Property, plant and equipment

Endesa Group property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciates them accordingly. All other repair and maintenance costs are recognized in profit or loss as incurred. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.

The net book value and useful lives of assets and depreciation methods are reviewed at the end of each year, and adjusted prospectively, if applicable.

G-23

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.10. Intangible assets

Concession right-of-use

This includes the right to use the infrastructure built or acquired by the operator, or provided by the granting authority to be used as part of the electric energy service concession arrangement (right to charge consumers for the utility service provided thereby), in accordance with IAS 38 - Intangible Assets (“IAS 38”) and IFRIC 12.

Intangible assets are amortized on a non-straight-line basis and limited to the remaining concession term of the Company’s subsidiaries or useful life of the related asset, whichever is lowers. These are valued at acquisition cost, less accumulated amortization and impairment losses, where applicable.

Concession right from acquisition

The fiscal benefit originated by the concession right from acquisition recorded in the balance sheet of Endesa Brasil S.A. economically grounded on expected statements of operations over the concession exploration period of subsidiary COELCE, and stems from the acquisition of the concession right granted by the Government.

The fiscal benefit is amortized based on the concession arrangement, monthly proportional to its profitability projected through December 31, 2027.

2.11. Impairment of non-financial assets

The Endesa Group’s management annually reviews net book value of its assets so as to assess events or changes in economic, operating or technological circumstances which may indicate deterioration or impairment. When such evidence is identified and net book value exceeds recoverable amount, a provision for impairment is set up by adjusting net book value to recoverable value.

Recoverable amount of an asset item or of a cash-generating unit (CGU) is defined as the higher of value in use and fair value less cost to sell.

In estimating value in use of an asset item or CGU, estimated future cash flows are discounted to present value at a pre-tax discount rate reflecting the weighted average capital cost for the industry in which the asset or CGU operates.

G-24

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.12. Tax incentive

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset.

When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset by equal annual instalments.

The subsidiaries COELCE and CGTF have tax incentives (ADENE benefit), such as a 75% decrease in income tax and non-refundable additions, calculated on the operation profit, referring to distribution activities until 2016 (based year). The amounts corresponding to decrease in income tax are recorded as reduction of the corresponding tax expenses in income statement for the year and then transferred to equity in account “Tax Incentive Reserve”.

2.13. Provisions

General

Provisions are recognized when the Group has present (legal or not formalized) obligations as result of a past event, and it is likely that economic benefits are required to settle said obligations, and they can be reliably estimated. When the Group expects that the amount of one provision will be reimbursed, whether totally or partially, due to, for instance, an insurance contract, this reimbursement is separately recognized as an asset, but only when this reimbursement is virtually certain.

Expenses related to any provisions are presented in income statement, net of any reimbursements.

Provisions for tax, civil and labor risks

The Group is part to various legal and administrative proceedings. Provisions are set up for all contingencies referring to legal proceedings, the settlement of which is likely to require an outflow of funds, and that can be reliably estimated. Assessment of the likelihood of loss includes the evaluation of evidence available, hierarchy of laws and jurisdiction, the latest court decisions and their relevance in the legal realm, as well as evaluation of the Group’s legal counsel. Provisions are reviewed and adjusted to consider changes in circumstances such as applicable limitation period, conclusion of tax inspections or additional exposures found based in new legal issues or court decisions.

G-25

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.14. Taxation

2.14.1. Income and social contribution taxes - Current

Current tax assets and liabilities of the previous years are measure at the expected recoverable value or amount payable to tax authorities. The tax rates and laws used to calculate the respective amount are those in effect or substantially in effect at balance sheet date.

Current income and social contribution taxes relating to items recognized directly in equity are recognized under equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

2.14.2. Deferred taxes

Deferred taxes are generated by temporary differences at the end of the reporting period between tax bases of assets and liabilities and their book value. Deferred tax liabilities are recognized for all temporary tax differences, except:

— When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, and

— In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

— When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

— In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

G-26

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.14. Taxation--Continued

2.14.2. Deferred taxes--Continued

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.14.3. Sales taxation

Income, expenses and assets are recognized net of taxes on sales, except when:

— When the sales tax incurred on the purchase of goods or services is not recoverable from the tax authorities, in which case the sales tax is recognized as part of the acquisition cost of the asset or expense item, as the case may be;

— When the amounts receivable or payable are presented together with the amount of tax on sales; and

— When the net amount of sales tax recoverable or payable is included as a component of the amounts receivable or payable in the balance sheets.

2.15. Regulatory charges

Since Ampla Energia, CDSA, CIEN, CGTF and COELCE, subsidiaries of Endesa Brasil, operate in regulated segments, they are charged amounts as payment of regulatory charges, as follows:

2.15.1. Global Reversion Reserve (RGR)

This refers to provision of amounts to be paid to Centrais Elétricas Brasileiras S.A. - Eletrobras, calculated based on 2.5% on Property Plant Equipment, limited to 3% of gross operating revenue from electric energy. The amounts are regulated on an annual basis, by means of decisions handed down by ANEEL’s Financial Supervisory Authority (SFF). Since January 1º, 2013, the Law No.12,783/13 extinguish the collection of the RGR for distribution companies.

G-27

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.15.   Regulatory charges--Continued

2.15.2. Fuel Consumption Account (CCC)

The portion of the tariff revenue paid by distribution companies in the interconnected system, for two purposes: payment of expenses with fuel used in thermal plants that are powered to cover hydrologic uncertainties; and subsidy of part of expenses with fuel in isolated systems to enable that electric tariffs in such locations have levels similar to those adopted in interconnected systems. Since January 1º, 2013, the Law No.12,783/13 extinguish the collection of the CCC for energy companies.

2.15.3. Energy Development Account (CDE)

The objective is to foster the energy development in the Brazilian States and competitiveness of the energy produced from alternative sources, in areas covered by interconnected systems, enabling the universal use of the electric energy services. The amounts payable are also defined by ANEEL. Since January 1º, 2013, the Law No.12,783/13 reduced in 75% the collection of the CDE.

2.15.4. Energy Efficiency Programs (PEE) - Research and Development (P&D) - National Scientific and Technological Development Fund (FNDCT) and Energy Efficiency Company (EPE).

These refer to reinvestment programs required by ANEEL for electric energy distribution companies, whereby 1% of net regulatory operating revenue (Regulatory ROL) must be annually allocated to such funds.

2.15.5. Public Electric Energy Service Inspection Fee (TFSEE)

The inspection fees charged on distribution of electric energy are differentiated and proportional to the services offered, calculated annually by ANEEL, considering the economic value added by the concession operator.

2.15.6. System Service Charges (ESS)

This represents the cost incurred to maintain the reliability and stability of the National Interconnected System to meet energy consumption demand in Brazil. This cost is calculated by CCEE on a monthly basis, and paid by agents of the consumption category to generating agents.

2.15.7. Financial compensation for use of water resources (CFURH)

This corresponds to a percentage that concessionaires and companies authorized to produce energy for hydroelectric generation pay for the use of water resources, calculated by the value of energy produced.

G-28

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.16. Other current and non-current assets and liabilities

These are stated at realization values (assets) and at known or determinable amounts increased, where applicable, by the corresponding charges and monetary restatements incurred (liabilities).

2.17. Profit sharing

The Endesa Group recognizes a liability and a profit sharing expense from a formula that considers attainment of operating goals and specific objectives, established and approved at the beginning of each year. This amount is paid at the end of March following the year-end.

2.18. Payment of dividends

The dividend recognition policy is in line with IAS 37 - Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”), which determine that proposed dividends be paid and be grounded on statutory obligations, recorded as current liabilities.

The Group’s articles of incorporation establish that at least 25% of annual net income (except for the subsidiary CGTF - 2%) be paid for purposes of dividends, after allocation of the legal reserve.

As such, at the closing of the year and after the proper legal allocations have been made, the Group records the provision corresponding to the minimum mandatory dividends not yet paid in the year, whereas proposed dividends exceeding the minimum mandatory dividends are stated as “Proposal for payment of additional dividends” in equity.

G-29

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.19. Retirement and other post-employment benefits

The Endesa Group sponsors defined benefit pension plans to certain employees, in addition to post-employment health care and gratification in retirement, which require that contributions be made to funds administered separately from the subsidiaries’ own funds.

Obligations relating post-employment benefits are accrued for based on actuarial calculation prepared annually by an independent actuary, using the projected unit credit method, net of collateral plan assets, where applicable, and corresponding costs are recognized over the employees. The projected unit credit method considers each service period as being a taxable event of an additional benefit unit, accumulated for calculation of the total obligation. Other actuarial assumptions are also used, such as biological and economic hypotheses, historical data on expenses incurred and employee contributions.

Actuarial gains and losses generated by adjustments and changes in actuarial assumptions of pension and other retirement benefit plans are posted to other comprehensive income, based on actuarial calculations prepared by the independent actuary, as detailed in Note 31.

Retrospective application of IAS 19 (Revised) – Employee benefits

This standard is applicable for annual periods beginning on or after 1 January 2013, with retrospective application, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

The main impacts caused by the application of this standard are (i) elimination of the corridor method (not applicable to Company’s subsidiaries), (ii) computation of the estimate return of assets using the same discount rate used to calculate the actuarial obligation and (iii) allocation of interest on the limiting effect for recognition of asset from benefit defined in plans with surplus which are not subject to recognition in accordance with local rules (which had no material retrospective impact).

In accordance with paragraph 22 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, when a change in the accounting practices is retrospectively applied, the Group has to adjust the opening balance of each equity component affected for the oldest period presented and the other comparative amounts disclosed for each prior period presented, as if the new accounting practice had been applied.

Provided that the adoption of IAS 19 R had no material impact on financial statements for year ended December 31, 2013, Endesa Group is not presenting the corresponding retrospective effects.

G-30

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.20. Statement of cash flows

The statements of cash flows were prepared and are presented in accordance with IAS 7 – Statement of Cash Flows (“IAS 7”).

2.21. New pronouncements/amendment applied for the first time in 2013

Certain standards and interpretations were reviewed and their adoption is mandatory for years beginning on January 1, 2013. Given the nature of changes made and the Company’s and its subsidiary’s operations, the adoption of these standards and interpretations, mentioned below, did not have any significant impact on consolidated financial statements of Endesa Group.

— New IAS 27 - Separate Financial Statements. The issuance of IFRS 10 eliminated all matters regarding consolidated financial statements from IAS 27, restricting its scope to separate financial statements only.

— New IAS 28 - Investments in Associates and Joint Ventures. Amended by the issuance of IFRS 10 and IFRS 11 for the purpose of making the definitions and other clarifications contained in these new IFRS uniform.

— IFRS 10 - Consolidated Financial Statements, IAS 27 - Separate Financial Statements. IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 required management to exercise significant judgment to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27.

— IFRS 11 - Joint Arrangements. IFRS 11 replaces IAS 31 - Interests in Joint Ventures and SIC-13 - Jointly-controlled Entities - Non-monetary Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method.

— IFRS 12 - Disclosure of Interests in Other Entities. The purpose of this pronouncement is providing guidance on disclosure of information referring to equity held in other entities. Therefore, the users of the financial statements can evaluate the risks inherent in this interest and the effects of the equity and financial position, financial performance and respective cash flows.

— IFRS 13 - Fair Value Measurement. IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted.

— IAS 19 (Revised) - Employee benefits. The purpose of this pronouncement is guiding the accounting and disclosure of benefits granted to employees. Therefore, the pronouncement requires the recognition of the following by the Group: (a) a liability when the employee provided service in exchange of benefits payable in the future; and (b) an expense when the entity uses economic benefits from services received from the employee in exchange of benefits to this employee. For further details, see Note 2.19.

G-31

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.21. New pronouncements/amendment applied for the first time in 2013--Continued

— Amendment to IFRS 7 - Financial Instruments: Disclosures. Clarifies the requirements of disclosures relating to offsetting of financial assets and financial liabilities.

— Improvements to the IFRS - Corresponds to a number of necessary but non-urgent improvements that amend the following standards: IFRS 1, IAS 1, IAS 16, IAS 32, and IAS 34.

— Transition Guide (Amendments to IFRS 10, 11, and 12) - The amendments clarify IFRS 10 transition guidance. These amendments also simplify the transition for IFRS 10, IFRS 11, and IFRS 12, limiting the requirements to the provision of adjusted comparative information for the immediately preceding period only. In addition, the amendments eliminate the requirement to present comparative information for disclosures related to unconsolidated structured entities for periods prior to the first application of IFRS 12.

2.22. New pronouncements/amendment not yet in effect on December 31, 2013

The International Accounting Standard Board (IASB) issued and reviewed the following key standards which were still not in effect at the Group’s financial statements date:

— IFRS 9 - Financial Instruments: Classification and Measurement. IFRS 9 introduces new requirements for classification, measurement and write-off of financial assets and liabilities (in force for years beginning on or after January 1, 2015). Endesa Group will assess the impact that IFRS 9 will have on its financial statements when the standard is complete.

— IFRIC 21 - Levies. This provides guidance on when the Group has to recognize liabilities for a levy (i.e. Regulatory charges) when the triggering event occurs (effective for years beginning on or after January 1, 2015). Based on the preliminary analyses performed, IFRIC 21 is not expecting to have any material impact on the Group’s financial statements.

— Amendment to IFRS 9 - Financial Instruments: Classification and Measurement. This is the second stage of the IASB project to replace IAS 39 - Financial Instruments: Recognition and Measurement. This amendment adds a special chapter on hedge accounting that establishes a new model aimed at reflecting better alignment between accounting and risk management. Improvements have also been made to the disclosures required. This amendment also eliminates the mandatory application date for IFRS 9 since the third and final stage of the project, which covers impairment of financial assets, has still not been completed. Endesa Group will assess the impact that IFRS 9 will have on its financial statements when the standard is complete.

— Amendments to IFRS 10, 12, and IAS 27- Investment Entities. Under IFRS 10, reporting entities are required to consolidate all of the companies over which they have control. The amendment establishes an exception to these requirements, allowing Investment Entities to measure their investments at fair value with changes in income as provided for under IFRS 9 instead of consolidating them. Endesa Group does not expect that this amendment will have significant impacts on its financial statements.

— Amendment to IAS 19 - Employee Benefits. The purpose of this modification to the scope of IAS 19 is to simplify the accounting for contributions not affected by the employee’s years of service, such as employee contributions calculated on the basis of a fixed percentage of a salary. Endesa Group does not expect that this amendment will have significant impacts on its financial statements.

G-32

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued

2.22. New pronouncements/amendment not yet in effect on December 31, 2013--Continued

— Amendment to IAS 32 - Offsetting of financial assets and liabilities. The amendments clarifies the meaning of “currently having a legal right to offset recognized amounts” and the criteria making the non-simultaneous settlement mechanisms of offsetting chambers qualify for offsetting (effective for years beginning on or after January 1, 2015). Endesa Group does not expect that this amendment will have significant impacts on its financial statements.

— Amendment to IAS 36 - Impairment of Assets. The amendment clarifies the extent of disclosures regarding the recoverable value of impaired assets, limiting the information requirements to the recoverable amount, based on the fair value less costs of disposal. Endesa Group does not expect that this amendment will have significant impacts on its financial statements.

— Amendment to IAS 39 - Renewal of Derivatives and Continuation of Hedge Accounting - The changes relief the discontinuation of hedge accounting when the renewal of a derivative designed with hedge meets certain criteria (effective for years beginning on or after January 1, 2015). Endesa Group does not expect that this amendment will have significant impacts on its financial statements.

— Improvements to the IFRS (2010-2012 and 2011-2013 Cycles) - This is a set of improvements that are necessary but not urgent. They make changes to the following standards: IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, IAS 38, and IAS 40.

There are no other standards and interpretations issued and not yet adopted that, in management’s opinion, could significantly impact statements of operations or equity disclosed by the Group.

G-33

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

Judgments

The preparation of the Group’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities, as of the financial statements date.

Estimates and assumptions

Significant assumptions regarding the sources of uncertainty of future estimates and other significant estimate-related sources of uncertainty as of the consolidated statement of financial position date, involving significant risk of future adjustments in the book value of assets and liabilities for the following financial year are discussed below.

Impairment of financial assets

Impairment occurs when the book value of an asset or cash-generating unit exceeds its recoverable amount, which is the higher of the fair value less sale costs and the value in use. The calculation of fair value less costs of sales is based on the information available of sales transactions of similar assets or market prices less additional costs to sell the asset. The calculation of the value in use considers the discounted cash flow model. Cash flows derive from a budget prepared for the following five years and do not include reorganization activities not yet engaged by the Group or significant future investments that will improve the base of assets of the cash generating unit subject to testing. The recoverable amount is sensitive to the discount rate used in the discounted cash flow method, to receipts of expected future cash and to the growth rate adopted for extrapolation purposes.

Provisions for tax, civil and labor risks

The Group recognizes provision for tax, civil and labor contingencies. Assessment of the likelihood of loss includes an evaluation of available evidence, hierarchy of laws, available case laws, most recent court rulings and their relevance in the legal system, as well as the legal counsel’s opinion. The provisions are reviewed and adjusted to take into consideration changes in circumstances, such as applicable statute of limitations, conclusions of tax audits or additional exposures identified based on new matters or court rulings.

Allowance for doubtful accounts

An allowance for doubtful accounts is set up in an amount considered sufficient by Management to cover any losses on realization of receivables, considering historical losses and an individual assessment of accounts receivable subject to realization risks.

The allowance is set up based, substantially, on receivables from residential consumers overdue for more than 90 days, commercial consumers overdue for more than 180 days, industrial, rural, government entities, public lighting and utilities overdue for more than 360 days, also considering in-depth analyses for customers with significant debts.

G-34

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS--Continued

Estimates and assumptions--Continued

Taxes

There are uncertainties regarding the interpretation of complex tax regulation as well as the amount and period of future taxable profit. Given the long-term nature and complexity of existing contractual arrangements, differences between actual results and assumptions adopted, or future changes to such assumptions could require future adjustments to the previously recorded tax income and expenses. The Group sets up provisions based on applicable estimates for possible consequences of audits by tax authorities of the jurisdictions in which it operates. The provision amounts are based on various factors, such as experience from prior tax audits and divergent interpretations of tax regulations by the taxable entity and the tax authority in charge. Such divergent interpretations could arise from a wide range of issues, depending on the conditions prevailing in the domicile of the Company and its subsidiaries.

Deferred tax asset is recognized to the extent that it is probable that taxable profit will be available to enable use of the referred to tax losses.

Management is required to make significant judgment to determine the deferred income tax amount to be recognized, based on the probable term and level of future taxable profit, together with future tax planning strategies.

Post-employment benefits

The cost of pension plans with defined benefit and other retirement benefits, and the present value of pension obligations are determined using actuarial valuation methods. The actuarial valuation involves use of assumptions about discount rates, future salary increases, mortality rates and future increases in retirement and pension benefits.

The defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each financial statement date. For more details on the assumptions used, see Note 31.

Unbilled revenue

The calculation of unbilled revenue is based on the number of days not billed in the month, the estimated amount of energy delivered during those days and the estimated average price per customer class for that month. Differences between actual and estimated unbilled revenue are usually immaterial.

G-35

4.  ANEEL DECREE NO. 7,945/13 (CDE SUBVENTIONS RESOURCES)

In function of the unfavorable hydroelectric conditions at the end of 2012 and beginning of 2013, including the low levels of hydroelectric plants’ reservoirs – the lowest since 2001 -, thermoelectric plants are working at maximum capacity. Therefore, the cost of electricity from distributors had a significant increase in 2012 and beginning of 2013.

Due to this scenario and considering that the distribution concessionaires are not responsible for managing these issues, the Brazilian government issues the Decree No. 7,945/13, determining the transfer of funds from CDE (Energy Development Account) in order to neutralize a portion of the cash issues and performance faced by distributors in this period

The funds covered by this transfer from CDE totalized R$ 541,350 in the year ended December 31, 2013, and are related to (i) System Service Charges (ESS) (decision apart from adjudging merits for energy safety purposes), amounting to R$ 176,432; (ii) hydrological risk (Mechanism for Energy Relocation – MRE of quotas), amounting to R$ 20,939; (iii) involuntary exposure (Exposure to Differences Settlement Price - PLD) limited to the amount not covered by the allocation of quotas, amounting to R$ 199,171; and (iv) CVA ESS and Energy (full or partial value of system service charge and energy purchased for resale), amounting to R$ 144,808. Of these total funds, R$ 527,921 were received until December 31, 2013. According to IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance, this amount was recognized as offsetting of incurred costs, and accounted for under “CDE Funds – Decree No. 7,945/2013” in current assets, matching against “Energy purchased for resale”.

Of the total amount receivable of R$ 13,429 at December 31, 2013, the amount of R$ 5,637 corresponds to supplementary differences from April to November 2013, disclosed in Technical Note No. 537 of December 30, 2013, and the amount of R$ 7,792 refers to provision for December, determined by Management based on its best estimate, information and rules disclosed for computation of funds covered by CDE transfer, which were still not approved by ANEEL.

G-36

5. CASH AND CASH EQUIVALENTS

	12/31/2013		12/31/2012
Cash and checking accounts		16,976		124,035
Short-term investments		1,079,874		690,770
Total cash and cash equivalents		1,096.850		814,805

The excess cash of the Company and its subsidiaries is invested on a conservative basis in low-risk financial assets, and the main financial instruments are represented by CDBs (Bank Deposit Certificates) and purchase and sales commitments. They are highly liquid investments, immediately convertible into available funds, in accordance with the cash needs of the Company and its subsidiaries. Short-term investments of the Company and its subsidiaries earn interest compatible with the CDI variations.

At December 31, 2013 and 2012, financial instruments classified as short-term investment are as follows:

	12/31/2013		12/31/2012
Direct investments
Bank Deposit Certificate – CDB		92,252		131,874
Purchase and sales commitments		56,723		83,602
Total direct investments		148,975		215,476
Exclusive funds
Bank Deposit Certificate – CDB		432,843		299,367
Purchase and sales commitments		498,056		175,927
Total exclusive funds		930,899		475,294
Total short-term investments		1,079,874		690,770

Short-term investments may be redeemed at any time, with possibility of immediate conversion into a known cash amount with an insignificant risk of change in value. Given the nature and characteristics of short-term investments, they are recognized at fair value against profit and loss.

6. MARKETABLE SECURITIES

At December 31, 2013 and 2012, financial instruments classified as marketable securities are as follows:

	12/31/2013		12/31/2012
Investment funds		22,827		24,894
Total investment funds		22,827		24,894
Exclusive funds
Public securities		550,490		379,654
Investment fund quotas		134,178		165,829
Other		26,436		43,557
Total exclusive investment funds		711,104		589,040
Argentine Republic Bonds		1,747		1,216
Total marketable securities		735,678		615,150

Through the exclusive funds, the Company and its subsidiaries invest their excess cash in post-fixed and pre-fixed government bonds, in addition to other traditional fixed-income securities with low credit risk and high liquidity

G-37

7. CONSUMERS, CONCESSIONAIRES AND PERMITTEES, NET

a) Analysis of accounts receivable and statement of the allowance for doubtful accounts balance

			Overdue until		Overdue for more than		Total
	Maturing		90 days		90 days		12/31/2013			12/31/2012
Current
Consumer class:
Residential		185,641		123,702		42,068		351,411			387,492
Industrial		43,473		10,711		21,935		76,119			80,250
Commercial		75,402		31,291		31,443		138,136			140,675
Rural		26,903		9,250		9,389		45,542			43,315
Government		59,980		24,259		19,465		103,704			121,590
Public lighting		4,001		809		92		4,902			-
Public service		11,792		1,098		138		13,028			14,159
Resale		5,461		-		-		5,461			4,966
Subtotal		412,653		201,120		124,530		738,303			792,447
Unbilled revenue (d)		271,853		-		-		271,853			308,424
Free consumers		48,656		252		5,070		53,978			43,930
Electric Energy Trade Chamber - CCEE		22,114		20,355		4,136		46,605			88,028
Installment payment of debts (c)		15,764		-		-		15,764			17,059
Energy auction -CCEAR		9,790		-		2,048		11,838			14,871
Emergency charges		-		-		2,487		2,487			2,473
Companhia Energética de Goiás - CELG		174		-		-		174			136
Receivables from clients questioned in court (b)		-		-		64,948		64,948			63,303
Furnas Centrais Elétricas S.A. (e)		1,443		-		2,685		4,128			2,505
Tractebel Energia S.A. (e)		872		-		-		872			2,025
Other		19,456		559		810		20,825			60,287
Subtotal		802,775		222,286		206,714		1,231,775			1,395,488
Allowance for doubtful accounts (a)		-		-		-		(199,317	)		(199,584)
Total current assets		802,775		222,286		206,714		1,032,458			1,195,904
Non-current assets
Furnas Centrais Elétricas S.A. (e)		-		-		125,612		125,612			126,955
Tractebel Energia S.A. (e)		-		-		70,772		70,772			69,429
Sale within Electric Energy Trade Chamber -CCEE		-		-		15,289		15,289			15,289
Installment payment of debts (c)		80,762		-		-		80,762			86,100
Contas a receber com partes relacionadas (f)		-		-		119,826		119,826			120,475
Subtotal		80,762		-		331,499		412,261			418,248
Allowance for doubtful accounts (a)		-		-		-		(265,182	)		(247,265)
Total non-current assets		80,762		-		331,499		147,079			170,983

G-38

7. CONSUMERS, CONCESSIONAIRES AND PERMITTEES, NET--Continued

a) Analysis of accounts receivable and statement of the allowance for doubtful accounts balance--Continued

Changes in allowance for doubtful accounts are as follows:

Balance at December 31, 2011	(447,184)
(Additions)	(104,137)
Write-offs	104,472
Balance at December 31, 2012	(446,849)
(Additions)	(96,252)
Write-offs	78,602
Balance at December 31, 2013	(464,499)
Current	(199,317)
Non-current	(265,182)

An allowance for doubtful accounts was set up based on criteria established by regulatory legislation and analysis of specific risks of losing the overdue amounts, legal matters and application of a percentage on installment payment of debts. The amount is considered sufficient by the subsidiaries’ management to cover any losses on realization of the receivables.

b) Receivables from clients questioned in court

The amount of R$ 64,948 at December 31, 2013 (R$ 63,303 in 2012) related to receivables from clients questioned in court. This amount includes R$ 27,590 at December 31, 2013 (R$ 26,774 in 2012) regarding receivables from various consumers who question the legality and claim refund of amounts arising from electric energy rate increases that took place during effectiveness of the “Cruzado” Economic Plan.

These consumers were granted the right to offset the claimed credits against electricity bills, by means of lawsuits, but the merits of the case are not considered unappealable. The Group records an allowance for doubtful accounts of R$ 53,858 at December 31, 2013 (R$ 52,812 in 2012), deemed sufficient to cover any losses in connection with such lawsuits.

G-39

7. CONSUMERS, CONCESSIONAIRES AND PERMITTEES, NET--Continued

c) Installment payment of debts

Installment payment of debts corresponds to agreements signed between the Group and their clients referring to renegotiation of electricity bills in arrears. These amounts are included in electricity bills, increased by fine and 1% interest per month, calculated on a pro rata daily basis and monetarily restated based on the General Market Price Index (IGPM) variation. After the amount payable in installments is restated, the first installment, if applicable, is deducted, and the interest agreed in the negotiation is applied, not exceeding 1.8% per month.

d) Unbilled revenue

The Unbilled revenue corresponds to the income from electricity supply, delivered but not billed to consumer, computed on an estimated basis, referring to the monthly measurement period and until the last day of the month. At December 31, 2013 the Group has recorded in Accounts receivable a total balance of unbilled revenue of R$ 271,853 (R$ 308,424 in 2012).

e) Furnas Centrais Elétricas S.A. (“Furnas”) and Tractebel Energia S.A. (“Tractebel”)

At December 31, 2013, the subsidiary CIEN records accounts receivable from Furnas and Tractebel, respectively in the amounts of R$ 129,740 and R$ 71,644 (R$ 129,460 and R$ 71,454, respectively, in 2012) corresponding to the billing of firm capacity and associated energy charges, which were not paid in previous years. Based on the best estimate of receiving the amounts involved, the Group records an allowance for doubtful accounts in the total amount of R$ 196,384 at December 31, 2013 and 2012. The remaining accounts receivable balance from Furnas and Tractebel recorded in the current asset in the total amount of R$ 5,000 at December 31, 2013 (R$4,530 in 2012), refers to billing arising from Subsidiary’s new activity, when treated as a transmission company.

f) Accounts receivable from related parties

Terms and conditions involving related parties are presented in Note 27.

G-40

8. LOW INCOME CONSUMERS

Law No. 10,438, of April 26, 2002, established guidelines for classification into the low income residential category of the consumer unit with monthly consumption lower than 80kWh. Decree No. 4336, of August 15, 2002 broadened these classification rules for consumer units with monthly consumption between 80 and 220 KWh, also according to provisions established by Law No. 10,438/02.

With the enactment of Law No. 12,212/2010, regulated by ANEEL Rulings No. 407/2010 and No. 414/2010, the new criteria for receipt of the Social Electric Energy Tariff by low income consumers were established. According to the new regulations, there are no other classification criteria by consumption, and the low income subsidy may only be granted to consumers registered with Federal Government Social Programs, including Indian and quilombola (African slave descendant) communities, which are entitled to 100% discount for the first 50 kWh used, or consumers who receive the Continued Provision Benefit (BPC).

Based on ANEEL Rulings No. 407/2010 and No. 414/2010, Centrais Elétricas Brasileiras S.A. - Eletrobras will transfer to distribution companies the subsidy amount on a monthly basis, to adjust the discounts granted to low income consumers classified under the criteria of the former Rulings No. 246/2002 and 485/2004, arising from the Energy Development Account (CDE).

Considering the criteria set out by the mentioned rulings and the schedule for registration of clients entitled to the benefit, the consolidated balance receivable at December 31, 2013 totals R$ 67,929 (R$ 65,043 in 2012).

This subsidy is calculated on a monthly basis by the distribution company and submitted to ANEEL for approval and validation through Decision, after which the transfer occurs.

9. CDE SUBVENTIONS – TARIFF DISCOUNT

Amount to be transferred by Centrais Elétricas Brasileiras - Eletrobras referring to refund of discounts on fees applicable to public electricity distribution services to end users as provided for in article 13, item VII of Law No. 10,438, of April 26, 2002, whose wording was defined by the Provisional Executive Order No. 605 of January 23, 2013, according to article 3 of Decree No. 7,891 of January 23, 2013. These funds are from CDE and approved by ANEEL in the process for distributors’ annual adjustment. The balance receivable at December 31, 2013 is R$ 20,385 (nil in 2012).

G-41

10. TAXES RECOVERABLE

	12/31/2013		12/31/2012
Income and social contribution tax recoverable (a)		80,780		90,645
Value-Added Tax – ICMS (“ICMS”) (b)		172,600		171,196
Social Integration Program - PIS (“PIS”) and social investment program - COFINS (“COFINS”) ( c )		216,490		65,789
Other taxes		9,964		10,799
		479,834		338,429
Current		322,072		175,322
Non-current		157,762		163,107

a) The income tax recoverable balance refers to withholding income tax (IRRF) on short-term investments, government agency retentions (Law No. 9,430/96) and prepaid income tax balance referring to calendar years 2006 to 2012.

The social contribution tax recoverable balance refers to prepaid social contribution tax on net income referring to calendar years 2006 and 2012, in addition to government agency retentions, pursuant to Law No. 9,430/96.

b) This refers to credits arising from capital expenditures (according to concept established by tax legislation), which are subject to monthly offset against ICMS collected from customers at the rate of 1/48ths.

c) The amounts classified under PIS and COFINS recoverable from subsidiary Ampla Energia in the total amount of R$ 162,835 (R$ 31,845 in 2012) refer to PIS and COFINS computed on the previous sixth-month billings, supported by a court decision in rem judicatam, whereby Decree-Laws Nos. 2.445/88 and 2,449/88 were declared unconstitutional and the right to refund corresponding to the difference between the amounts paid grounded on said Decrees and those due in accordance with Supplementary Law No. 7/70 was recognized. Additionally, Ampla Energia has PIS and COFINS withholdings from government agencies. PIS and COFINS amounts recoverable refer to subsidiary CIEN, totaling R$ 26,444 at December 31, 2013 (R$ 25,511 in 2012), and they are related particularly to PIS and COFINS overpayments made in previous years in relation to the amounts effectively due in the ordinary course of its operations. As a consequence, CIEN filed a claim for offsetting taxes overpaid and currently awaits approval thereof by the Brazilian IRS in order to set these amounts off.

The other amounts of PIS and COFINS recoverable refer to the subsidiaries COELCE, CGTF, CDSA and Prátil, respectively of R$ 2,390, R$ 6,379, R$ 17,965 and R$ 477.

G-42

11. GUARANTEES DEPOSITS

		12/31/2013				12/31/2012
Institution	Type of investment	Current		Non-    current		Current		Non-    current
Bradesco	Investment fund		-		-		-		8,027
Itaú-Unibanco	Investment fund		52,619		-		49,336		-
Bradesco	CDB		-		436		-		104
Itaú	CDB		-		602		-		575
Banco do Brasil	CDB		-		9,729		-		9,004
BNB	CDB		-		20,302		-		18,804
Banco do Brasil	US Treasury Security		-		4,582		-		4,442
Banco Itaú BBA	Time Deposit		-		28,383		-		24,521
Caixa Econômica Federal	Guarantee		320		-		320		-
Other			-		20		-		20
Total			52,939		64,054		49,656		65,497

At December 31, 2013 the balances of guarantees and judicial deposits recorded in subsidiaries Ampla Energia and COELCE, of R$ 27,628 and R$ 60,730 (R$ 36,049 and R$ 54,583, respectively, in 2012) are basically related to the investment of amounts linked to electric energy purchase agreements, contractual retentions from service providers and financing agreement collateral.

Additionally, subsidiary CGTF, as set forth by the financing agreement entered into with IFC (see Note 20), undertakes to maintain part of its cash for amortization of the debt in half-yearly periods. This investment is linked to a time deposit transaction in Banco Itaú BBA, pegged to the US dollar, which amounts to R$ 28,383 at December 31, 2013 (R$ 24,521 in 2012).

12. ESCROW DEPOSITS

	12/31/2013		12/31/2012
Labor		164,169		132,901
Civil		53,551		51,614
Tax		114,536		115,960
Total		332,256		300,475

See note 28 for further discussion of related provisions.

G-43

13. DEFERRED TAXES

Endesa Group records deferred tax credits and assets and liabilities on temporary differences, as follows:

	Ampla Energia				CDSA				CGTF				CIEN (Consolidated)				COELCE				Consolidated
	12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012
Assets
Provision for tax, civil and labor risks		140,122		132,694		-		-		615		569		7,392		7,170		31,120		28,602		179,249		169,035
Allowance for doubtful accounts		59,830		62,394		-		-		-		-		66,771		66,771		37,388		31,862		163,989		161,027
Provision for inventory obsolescence		385		61		-		-		-		-		-		-		2,803		230		3,188		291
Derecognition of regulatory asset		46,620		29,468		-		-		-		-		-		-		-		-		46,620		29,468
Post-employment benefit obligations		125,497		158,455		-		-		-		-		-		-		45,393		38,188		170,890		196,643
Provision for ARCE fine		-		-		-		-		-		-		-		-		24,452		17,333		24,452		17,333
Interest on construction in progress		-		-		9,633		9,633		-		-		-		-		-		-		9,633		9,633
Reversal of exchange variation on property, plant and equipment		-		-		-		-		-		-		58,337		65,317		-		-		58,337		65,317
Swap operations		-		-		-		-		4,228		5,406		-		-		-		-		4,228		5,406
Unrealized exchange variation		-		-		-		-		3,812		1,005		-		-		-		-		3,812		1,005
Provision for third-party service		-		-		-		-		1,247		612		-		-		-		-		1,247		612
Other		8,417		6,165		-		-		858		909		59,303		52,882		4,613		306		73,191		60,262
Total		380,871		389,237		9,633		9,633		10,760		8,501		191,803		192,140		145,769		116,521		738,836		716,032
Liabilities
Special (CME) and supplementary (CMC) monetary restatement		-		-		-		-		-		-		-		-		(2,359)		(2,598)		(2,359)		(2,598)
Derecognition of regulatory liability		-		(9,452)		-		-		-		-		-		(1,908)		(46,980)		(118,092)		(46,980)		(129,452)
Indemnification assets (concession)		(181,387)		(109,659)		-		-		-		-		-		-		(74,590)		(64,160)		(255,977)		(173,819)
Unrealised foreign exchange variation		-		-		-		-		-		-		(24,915)		(9,948)		-		-		(24,915)		(9,948)
Deferred tax liability- swap		(7,734)		-		-		-		(562)		(385)		-		-		(3,145)		-		(11,441)		(385)
Deemed cost		-		-		(82,710)		(82,710)		-		-		-		-		-		-		(82,710)		(82,710)
Total		(189,121)		(119,111)		(82,710)		(82,710)		(562)		(385)		(24,915)		(11,856)		(127,074)		(184,850)		(424,382)		(398,912)
	Ampla Energia				CDSA				CGTF				CIEN (Consolidated)				COELCE				Consolidated
Deferred taxes	12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012
Deferred assets		191,750		270,126		-		-		10,198		8,116		166,888		180,284		18,695		-		387,531		458,526
Deferred liabilities		-		-		(73,077)		(73,077)		-		-		-		-		-		(68,329)		(73,077)		(141.406)

G-44

13. DEFERRED TAXES--Continued

Changes in the deferred tax balances are shown below:

	Assets		Liabilities
Balances at December 31, 2011		686,151		169,238
Addition - profit or loss for the year - IR/CSLL		79,535		245,500
(Reduction) - profit or loss for the year		(54,057)		(15,826)
Additions - comprehensive income		4,729		-
Effects of changes in foreign exchange rates		(326)		-
Balances at December 31, 2012		716,032		398,912
Addition - profit or loss for the year - IR/CSLL		442,461		161,179
(Reduction) - profit or loss for the year		(395,191)		(146,765)
Additions - comprehensive income		(22,779)		11,056
Effects of changes in foreign exchange rates		(1,687)		-
Balances at December 31, 2013		738,836		424,382

Technical feasibility studies indicate the recovery of deferred income and social contribution tax assets in accordance to the parameters defined by the standard IAS 12 – Income Taxes (“IAS 12”), which correspond to Management’s best estimate regarding the recovery of such assets. Management’s expectancy of recovery of the deferred tax assets is shown below:

	Amount to be realized
Year of realization	12/31/2013		12/31/2012
2013		-		93,489
2014		73,890		95,264
2015		90,581		69,801
2016		56,637		95,106
2017		57,066		79,255
2018 to 2020		171,274		130,788
2021 to 2023		289,388		152,329
Total		738,836		716,032

G-45

13. DEFERRED TAXES--Continued

Since the income and social contribution taxable base originates not only from income that could be generated but also from the existence of non-taxable revenue, non- deductible expenses, tax incentives and other variables, there is no direct correlation between net income and the income and social contribution tax income or expenses. As such, expected use of tax credits should not be the only indication of the Endesa Group’s future income.

As from 2001, with establishment of the Tax Recovery Program (REFIS), the subsidiary CDSA now determines income and social contribution taxes whereby taxable profit is computed as a percentage of gross revenue.

The deferred tax assets in the subsidiary CDSA in the amount of R$ 9,633 are recorded on remuneration of third party capital applied in construction in progress, which was deferred pursuant to Administrative Rule DNAEE No. 250/85, transferred from CELG upon the split-off that gave origin to the subsidiary CDSA.

The deferred income tax balance was maintained in assets based on future positive income projections prepared by CDSA management, which could, as from the end of the REFIS, estimated for 2015, be deducted from the taxable profit calculation in future years, by amounts sufficient to ensure realization of such assets.

The deferred tax liabilities in the subsidiary CDSA was recorded on the value of the effect of the deemed cost of fixed assets in CDSA, in the amount of R$ 82,710. The liabilities balance will be settled as from 2015, when the taxable profit of the subsidiary CDSA will be calculated based on accounting records with the end of the REFIS program.

14. TAX CREDIT FROM MERGER

Tax credit arises from the merger operation conducted by COELCE with its parent company Distriluz Energia Elétrica S.A. (at that time), approved at the Special General Meeting of September 27, 1999, grounded on future income during the concession period, and is realized over the period between the merger and December 31, 2027, on a monthly basis, proportionally to projected profitability, as per ANEEL Resolution No. 269, of September 15, 1999.

The accumulated balance will be amortized as follows:

Year	Amortization factor	Year	Amortization factor	Year	Amortization factor
2014	0,03333	2019	0,02140	2024	0,01374
2015	0,03051	2020	0,01958	2025	0,01257
2016	0,02792	2021	0,01792	2026	0,01151
2017	0,02555	2022	0,01640	2027	0,01053
2018	0,02338	2023	0,01501	-	-

On April 26, 2004, ANEEL’s Financial Supervisory Authority issued an Inspection Monitoring Report stating that the capital reserve set up upon merger of Distriluz would not have assets with economic basis as a contra entry and, as such, pursuant to CVM Instruction No. 349/01 (CVM is Securities and Exchange Commission of Brazil), determined that only the portion corresponding to the tax credit resulting from goodwill amortization should be recorded in equity of COELCE, as it understood that only this portion has economic basis.

G-46

14. TAX CREDIT FROM MERGER--Continued

Given the conclusion of the understanding with ANEEL, at the Special General Meeting of April 28, 2005, the subsidiary COELCE approved the Board’s proposal of observing the regulatory agency’s recommendations, replacing the share split and redemption mechanism, after the risk of tax and corporate questioning and non- compliance with financial covenants with Financial Institutions have been ruled out, and after approval of the proper accounting adjustments by ANEEL, issued by means of Official Letter No. 584/05, of April 14, 2005. These adjustments were also in compliance with the provisions set out in CVM Instruction No. 319/99, as amended by CVM Instruction No. 349/01.

Accordingly, the share split and redemption operations of subsidiary COELCE to remunerate shareholders for decrease in profit caused by goodwill amortization from merger of Distriluz, suspended in 2003, were replaced by provisions of CVM Rule No. 319/99, amended by CVM Rule No. 349/01, which provides for set up of provision on goodwill to be amortized matching against goodwill reserve (capital reserve), in amount which is not a tax benefit for subsidiary COELCE. To recalculate the impact on income of each year, the provision will be reversed to the same extent of amortization of the portion of goodwill for the respective year.

As a result of the aforementioned adjustments, in April 2005, a provision on unamortized goodwill was set up against capital reserve, in an amount that does not represent a tax credit for the subsidiary COELCE.

Tax credit from the incorporated goodwill	12/31/2013		12/31/2012
Goodwill on acquisition		775,960		775,960
Goodwill amortization		(559,198)		(530,938)
Provision on goodwill		(429,365)		(429,365)
Reversal of provision on goodwill		286,052		267,401
Tax credit		73,449		83,058
Current		8,793		9,609
Non-current		64,656		73,449
Capital reserve	12/31/2013		12/31/2012
Merged Goodwill		775,960		775,960
(-) Share split and redemption		(125,407)		(125,407)
Provision on goodwill		(429,365)		(429,365)
Balance		221,188		221,188

With the new procedure adopted on April 30, 2005, the goodwill reserve recorded in the COELCE’s equity was decreased by R$ 429,365, with the effect of R$ 242,976.

G-47

15. OTHER RECEIVABLES

	12/31/2013		12/31/2012
Disposal of assets and rights		1,509		1,656
Health care plan to retirees		6,422		5,990
Collection covenants		35,433		32,267
Consumers – services rendered		69,923		61,379
Expenses to be reimbursed – consumers		3,496		3,403
Expenses to be reimbursed – public lighting		2,795		2,796
Union		5,658		5,658
Services to third parties		4,475		5,220
Services in progress		145,829		100,902
Bounced checks		845		768
Supplier credits		5,844		6,039
Advances to employees		6,798		6,399
Advances to suppliers		6,428		12,182
Resale of material		-		3,787
New business expenses		10,492		4,814
Inventories		3,627		2,714
Prepaid expenses		15,246		7,054
Other		37,395		24,972
Provision for losses on realization of other credits		(20,851)		(26,763)
Total		341,364		261,237
Current		339,240		259,374
Non-current		2,124		1,863

Changes in the allowance for doubtful accounts are as follows:

Balance at December 31, 2011	(31,930)
Reversal	5,167
Balance at December 31, 2012	(26,763)
Addition	(2,167)
Write off	8,079
Balance at December 31, 2013	(20,851)

G-48

16. INDEMNIFICATION ASSETS (CONCESSION)

Refers to a portion of investments made and not amortized by the subsidiaries Ampla Energia and COELCE until the end of the, respective concessions, classified as financial asset since this is an unconditional right to receive cash or other financial asset directly from the granting authority pursuant to IFRIC 12 - Service Concession Arrangements and SIC 19 - Service Concession Arrangements: Disclosures.

The indemnification will be made based on the portion of the investments linked to reversible assets, still not amortized or depreciated, which had been made in order to ensure that the granted services are continuous and current.

The change in balances related to indemnification assets (concession) is as follows:

Balance at December 31, 2011	765,516
Transfers of intangible assets	385,586
Financial income – indemnification assets	487,517
Balance at December 31, 2012	1,638,619
Transfers of intangible assets	170,312
Financial income – indemnification assets	205,165
Balance at December 31, 2013	2,014,096

The Distribution’s concession of the subsidiaries Ampla Energia and COELCE is not onerous. Accordingly, there are no fixed financial liabilities and payments to be made to the granting authority.

New Replacement Value – Law No. 12,783/13

On January 11, 2013, Law No. 12,783 (“Law No. 12,783/13”) was enacted and made the Provision Executive Order (MP) No. 579, of September 11, 2012 (“MP No. 579/12”) definitive. This MP provides for the postponing and bidding processes for concession of generation, transmission and distribution of electricity, decrease in sectorial charges, low fees and other matters.

New Replacement Value – Law No. 12,783/13

In accordance with this legal provision, the calculation of the value of investments linked to reversible assets, still not amortized or depreciated, for indemnification purposes, must use the VNR, pursuant to the criteria defined in a regulation of the granting authority.

G-49

17. PROPERTY, PLANT AND EQUIPMENT

		12/31/2013						12/31/2012
	Annual depreciation      rates	Historical          cost		Accumulated     depreciation		Net value		Net value
In use
Transmission	24.69%
Land			1,076		-		1,076		1,076
Buildings			84,651		(47,435)		37,216		40,351
Machinery and equipment			1,204,945		(632,439)		572,506		628,560
Vehicles			1,927		(1,390)		537		679
Furniture and fixtures			557		(196)		361		384
Distribution	4.70%
Machinery and equipment			48,628		(33,775)		14,853		14,149
Furniture and fixtures			22,901		(13,993)		8,908		7,290
Other goods			10,640		(8,038)		2,602		2,783
Generation	24.67%
Land			2,194		-		2,194		2,194
Reservoirs			241,472		(153,426)		88,046		92,947
Buildings			113,620		(81,745)		31,875		34,437
Machinery and equipment			2,837,911		(1,886,427)		951,484		1,005,806
Vehicles			1,358		(1,139)		219		270
Furniture and fixtures			11,764		(10,466)		1,298		2,010
Commercialization	10.00%
Machinery and equipment			8,184		(5,988)		2,196		5,621
Furniture and fixtures			7,760		(3,490)		4,270		4,360
Administration	10.70%
Land			374		-		374		374
Buildings			4,128		(1,556)		2,572		2,752
Machinery and equipment			65,455		(50,971)		14,484		8,129
Vehicles			1,935		(1,593)		342		589
Furniture and fixtures			28,185		(24,575)		3,610		4,565
Total PPE in use			4,699,665		(2,958,642)		1,741,023		1,859,326
In progress
Generation			132,872		-		132,872		72,428
Transmission			65,794		-		65,794		35,640
Distribution			9,880		-		9,880		10,532
Commercialization			5,484		-		5,484		5,638
Administration			35,199		-		35,199		23,133
Total PPE in progress			249,229		-		249,229		147,371
Total property, plant and equipment			4,948,894		(2,958,642)		1,990,252		2,006,697

G-50

17. PROPERTY, PLANT AND EQUIPMENT--Continued

Changes in property, plant and equipment in the year are as follows:

	In use						In progress		Total
	Cost		Accumulated       depreciation		Net balance		Cost
Balances at December 31, 2011		4,672,991		(2,639,528)		2,033,463		106,022		2,139,485
Transfers		7,693		-		7,693		(7,693)		-
Additions		44		-		44		49,042		49,086
Write-offs		(10,417)		1,736		(8,681)		-		(8,681)
Depreciation		-		(171,544)		(171,544)		-		(171,544)
Effects of changes in foreign exchange rates		(3,359)		1,710		(1,649)		-		(1,649)
Balances at December 31, 2012		4,666,952		(2,807,626)		1,859,326		147,371		2,006,697
Transfers		40,805		-		40,805		(40,805)		-
Additions		1,356		-		1,356		143,071		144,427
Write-offs		(167)		73		(94)		(408)		(502)
Depreciation		-		(156,274)		(156,274)		-		(156,274)
Effects of changes in foreign exchange rates		(9,281)		5,185		(4,096)		-		(4,096)
Balances at December 31, 2013		4,699,665		(2,958,642)		1,741,023		249,229		1,990,252

Property, plant and equipment of Endesa Group are comprised by the balances in subsidiaries CGTF, CDSA and CIEN, in accordance with the characteristics of each one of them.

CGTF

The period over which the subsidiary CGTF is authorized to explore the activities described in its articles of incorporation is thirty years, as mentioned in article 5 of ANEEL Resolution nº 433, of October 19, 2001, as from the date thereof. Under this same article, this period may be extended at ANEEL’s discretion and by request of the authorized entity. CGTF’s property and equipment items are not considered reversible assets and, as such, they are not returned to the Federal Government at the end of the concession period.

These items are stated at acquisition or construction cost, less accumulated depreciation, calculated on a straight-line basis, at the rates defined by ANEEL.

G-51

17. PROPERTY, PLANT AND EQUIPMENT--Continued

CGTF--Continued

The main annual depreciation rates by macro activity, pursuant to ANEEL Resolution ANEEL nº 474/2012 are as follows:

	Annual     depreciation rate              (%)
Generation
Boiler	4.00%
Chimney	4.00%
Thermal cycle equipment	4.55%
Equipment support structure	3.13%
Generator	3.33%
Panel and control desk	3.57%
Unit substation	3.57%
Power transformer	2.86%
Auxiliary transformer	3.33%
Turbo-generator	4.00%
Administration
General equipment	6.25%
General computer equipment	16.67%
Vehicles	14.29%

CDSA

CDSA’s property, plant and equipment items are stated at deemed cost, less accumulated depreciation, calculated on a straight-line basis, at the rates defined by ANEEL.

The Endesa Group’s management understands that as the subsidiary CDSA is a public service concession operator, at the end of the concession period, non-depreciated assets will be indemnified for the minimum amount at the net book value, by the concession provider, should it not be renewed. Pursuant to articles 63 and 64 of Decree No. 41,019, of February 26, 1957, assets and facilities used for electric energy production, transmission and distribution, including sale, are tied to these services, and may not be disassembled, sold or assigned without prior express authorization from the regulating authorities.

Pursuant to sub-clauses two and three of clause eleven of the Concession Agreement No.11/1997, entered into between CDSA and ANEEL on September 12, 1997, upon termination of the final term of the Concession Agreement, assets and facilities related to independent production of electric energy used in hydroelectric plants, will be included as Federal Government’s assets, with indemnity of investments made and not yet amortized, provided that they are authorized and calculated by means of ANEEL audit.

G-52

17. PROPERTY, PLANT AND EQUIPMENT--Continued

CDSA--Continued

The main annual depreciation rates by macro activity, pursuant to ANEEL Resolution nº 474/2012 are shown below:

	Annual     depreciation rate              (%)
Generation
Thermal cycle equipment	4.55%
Equipment support structure	3.13%
Generator	3.33%
Panel and control desk	3.57%
Reservoir, dam and pipeline	2.00%
Unit substation	3.57%
Power transformer	2.86%
Auxiliary transformer	3.33%
Turbo-generator	4.00%
Administration
General equipment	6.25%
General computer equipment	16.67%
Vehicles	14.29%

G-53

17. PROPERTY, PLANT AND EQUIPMENT--Continued

CIEN

Property and equipment items are stated at acquisition or construction cost, less accumulated depreciation, calculated at the rates defined by ANEEL.

According to the Ordinances No. 210 and No. 211, issued by ANEEL on April, 2011, upon termination of the final term of the Agreement, assets and facilities related to independent production of electric energy used in hydroelectric plants, will be included as Federal Government’s assets, with indemnity of investments made and not yet amortized, provided they are authorized and calculated by means of ANEEL audit.

The main annual depreciation rates by macro activity, pursuant to ANEEL Resolution nº 474/2012 are shown below:

	Annual   depreciation rate            (%)
Transmission
Capacitor bank	5.00%
Barring	2.50%
Switch	3.33%
Conductor	2.70%
Circuit breaker	3.03%
Frequency changer	6.67%
Structure (Pole, tower)	2.70%
Panel, Control desk and Cubicle	3.57%
Reactor (Resistor)	2.78%
Power transformer	2.86%
Auxiliary transformer	3.33%
Administration
General equipment	6.25%
Vehicles	14.29%

G-54

18. INTANGIBLE ASSETS

Intangible assets are broken down by nature as follows:

		12/31/2013								12/31/2012
	Useful life     Years	Cost		Accumulated      amortization		Special obligations		Net value		Net value
In operation	6%
Concession right-of-use			7,742,272		(3,422,977)		(835,958)		3,483,337		3,506,760
Software			228,587		(166,731)		-		61,856		25,171
(-) Impairment			(21,930)		11,011		-		(10,919)
Concession right from acquisition			435,755		(212,855)		-		222,900		247,620
Goodwill			2,104		-		-		2,104		2,104
Trademarks and patents			401		(264)		-		137		203
In progress
Concession right-of-use			1,046,756		-		(269,834)		776,922		758,678
Software			66,183		-		-		66,183		49,434
Other			4,352		-		-		4,352		9,251
Total			9,504,480		(3,791,816)		(1,105,792)		4,606,872		4,599,221

Intangible assets in progress refer substantially to expansion works in the electricity distribution system.

Changes in intangible assets are shown below:

	In operation								In progress
	Cost		Accumulated amortization		Special obligations		Net value		Cost		Special obligations		Net value		Total
Balances at December 31, 2011		8,205,690		(3,184,943)		(898,822)		4,121,925		746,149		(159,480)		586,669		4,708,594
Additions		10,173		(1,495)		-		8,678		674,756		(90,820)		583,936		592,614
Write-offs		(19,318)		14,332		-		(4,986)		-		-		-		(4,986)
Amortization		-		(354,910)		43,524		(311,386)		-		-		-		(311,386)
Transfers		368,066		-		(14,824)		353,242		(368,066)		14,824		(353,242)		-
Effects of changes in foreign exchange rates		(201)		172		-		(29)		-		-		-		(29)
Transfers to indemnification assets		(385,586)		-		-		(385,586)		-		-		-		(385,586)
Balances at December 31, 2012		8,178,824		(3,526,844)		(870,122)		3,781,858		1,052,839		(235,476)		817,363		4,599,221
Additions		-		-		-		-		738,016		(39,318)		698,698		698,698
Write-offs		(267,395)		149,042		-		(118,353)		(849)		-		(849)		(119,202)
Amortization		-		(425,511)		39,124		(386,387)		-		-		-		(386,387)
Reclassification		-		-		-		-		(4,154)		-		(4,154)		(4,154)
Transfers		668,561		-		(4,960)		663,601		(668,561)		4,960		(663,601)		-
Transfers to indemnification assets		(170,312)		-		-		(170,312)		-		-		-		(170,312)
Effects of changes in foreign exchange rates		(559)		486		-		(73)		-		-		-		(73)
(-) Impairment		(21,930)		11,011		-		(10,919)		-		-		-		(10,919)
Balances at December 31, 2013		8,387,189		(3,791,816)		(835,958)		3,759,415		1,117,291		(269,834)		847,457		4,606,872

G-55

18. INTANGIBLE ASSETS--Continued

ANEEL is responsible for establishing the estimated economic useful life of each distribution-related infrastructure asset, in order to determine the tariff and calculate the indemnity of reversible assets upon termination of the concession period. This estimate is periodically reviewed and accepted by the market as a reasonable/adequate estimate for accounting and regulatory purposes, representing the best estimate of useful life of assets.

Endesa Group’s management understands that amortization of intangible assets must observe the estimated useful life of each asset comprising the set of tangible assets of the distribution infrastructure. As such, these assets must undergo individual amortization, with observance of the useful life of each item, limited to the end of the concession period. As a result of use of this amortization criterion, total intangible assets will always be amortized on a non-linear basis.

Special obligations linked to the concession of public electric energy services

Obligations linked to the concession of public electric energy services represent amounts from the Federal Government, States, municipalities and consumers, as well as donations not conditional upon any return in favor of the donor and subsidies intended for investments in the distribution activity. According to Circular Letter No. 1,314/2007-SFF/ANEEL, of June 27, 2007, which determines that this registration begins only after the Company’s second tariff review, the amortization started to be recorded in April 2009, considering that this review occurred in March 2009.

The obligations linked to concessions, undergoes amortization as from the second tariff review cycle, at the same amortization rates as infrastructure assets of each distribution company, and the average rates of 4.43% p.a. and 3.98% p.a. are adopted for subsidiaries Ampla Energia and COELCE, respectively.

At the end of the concession period, the net replacement value of obligations linked to the concession of public electric energy services will be deducted from the indemnification asset and removed from assets, in order to evidence the recording of assets belonging to the Federal Government that were under the concession operator’s management during the concession period.

Endesa Group evaluated the impairment of intangible assets using IAS 36 - Impairment of assets (“IAS 36”).

ANEEL Regulatory Decision No. 367/09

In August 2013, COELCE implemented ANEEL Regulatory Decision No. 367/09 (“Decision No. 367/09”), of June 2, 2009, whose main objective is determining certain items of the fixed assets in order to reflect ANEEL requirements.

As a consequence of the Regulatory Decision, subsidiary COELCE, during year ended December 31, 2013, recorded the amount of R$ 33,918 referring to losses for deactivation of goods from physical inventory counting performed according to Decision No. 367/09, setting up a provision for impairment losses amounting to R$ 10,919, corresponding to certain fixed asset items for which no new replacement value was assigned, and therefore they were not considered in the remuneration base calculation.

Decision No. 367/09 was not implemented by subsidiary Ampla Energia for year ended December 31, 2013 as required by Circular Letter No. 43/2013-SFF/ANEEL. Management expects that this decision is effectively implemented in the quarter ending March 31, 2014. Based on its best evaluation, Management understands that the non-implementation of Decision No. 367/09 represents a well remote risk for any delinquency notice from ANEEL, considering the provisions of ANEEL Regulatory Decision No. 63 of May 12, 2004.

G-56

19. TRADE ACCOUNTS PAYABLE

	12/31/2013		12/31/2012
Energy supply and transportation
Electric Energy Sale Chamber – CCEE		120,053		41.703
Companhia de Gás do Ceará – CEGÁS		24,172		20,239
Geração e Transmissão S.A – CEMIG		6,243		5,042
Centrais Elétricas do Norte do Brasil S.A- ELETRONORTE		7,987		9,127
Cia Hidroelétrica do São Francisco – Chesf		-		23,114
Companhia Energética de São Paulo – CESP		12,766		15.633
Agreement of Energy Sale in Regulated Environment (CEAR)		93,412		134.167
Distribution System Use Agreement (LIGHT)		8,460		17.442
Potency physic guarantee quotas		14,573		-
Decree nº 7.945/13 – CDE Subventions resources (a)		26,424		-
Eletrobras Termonuclear S/A – Eletronuclear		10,218		-
Eletronuclear – account payable		39,458		-
Charge for network use		20,314		52.316
Enertrade Comercializadora de Energia S.A.		4,100		39,756
Furnas Centrais Elétricas S/A		17,135		35,969
Generators – Free energy		5,602		5,177
Itaipu (Eletrobras)		60,727		52,105
Surplus and Deficit Offsetting Mechanism (MCSD)		6,748		19,300
Petrobras		17,456		16,099
Related parties (b)		136,578		127.882
Other		39,853		47.082
Materials and services		321,628		261,562
Total		993,907		923.715
Current		847,571		796.962
Non-current		146,336		126.753

(a) The amount of R$26,424 corresponds to recoverable costs through the CDE funds, related to (i) ESS; (ii) hydrological risk; and (iii) limited involuntary exposure to the amount not covered by the allocation of quotas, and refers to adjustments of period from April to August and November to December 2013. The recovery of these amounts is provided in Decree No. 7,945/13 as commented in Note 4 (ANEEL Decree No. 7,945/13).

(b) Terms and conditions involving related parties are presented in Note 27.

G-57

20. LOANS AND FINANCING

Loans and financing in local and foreign currencies are as follows:

	Debt charges				Principal
	Current				Current				Non-current
	12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012
Foreign currency:
Federal Government - Capitalization bonus (a)		3		7		163		284		-		142
Federal Government - Discount bonus (a)		8		8		-		-		2,673		2,332
Federal Government - Participant bonus (a)		49		44		-		-		3,831		3,342
IFC - A (b)		185		182		12,570		10,208		43,589		48,989
IFC - B (b)		(29)		-		19,745		16,075		21,157		35,680
IFC - C (b)		82		67		-		-		16,399		14,305
Total foreign currency:		298		308		32,478		26,567		87,649		104,790
Local currency:
Eletrobras (c)		13		15		11,177		13,338		68,315		74,858
Federal Government – Law No. 8,727 (Caixa Econômica Federal) (d)		1		3		76		287		-		76
Federal Government – Law No. 8,727 (Eletrobras) (d)		25		114		3,092		11,008		-		2,931
Banco do Brasil (BB Fat Fomentar)		2		10		936		5,343		-		891
Banco do Nordeste - Proinfa (e)		412		455		61,315		33,667		90,259		151,574
BNDES Finem 2007 (Syndicate loan) (f)		171		337		49,106		49,106		-		49,106
BNDES FINAME 2012-2013 (g)		46		-		2,061		-		35,031		-
BNDES FINEM 2012-2013 A (g)		244		-		6,480		-		71,278		-
BNDES FINEM 2012-2013 B (g)		273		-		6,480		-		71,278		-
BNDES PEC (h)		-		9		-		2,328		-		-
BNDES (Finame) (j)		3		7		1,884		2,214		-		1,884
BNDES (Capex 2011) (k)		265		280		10,139		10,210		65,904		75,942
BNDES (Capex 2011) (k)		278		341		19,305		19,324		67,568		86,846
BNDES (Capex 2011) (k)		311		379		19,305		19,324		67,568		86,846
BNDES (Capex 2012-2013) (l)		91		-		4,149		-		69,836		-
BNDES (Capex 2012-2013) (l)		440		-		11,706		-		128,768		-
BNDES (Capex 2012-2013) (l)		495		-		11,706		-		128,768		-
Eletrobras (m)		3		3		2,940		2,940		13,865		16,804
Eletrobras (n)		2		2		2,650		536		9,917		10,169
Bradesco S.A. 4th, 5th and 6th agreements (o)		-		795		-		20,000		-		-
Banco do Brasil S.A (p)		-		612		-		100,000		-		-
Banco do Brasil S.A (p)		1,142		-		-		-		100,000		-
Banco do Brasil S.A (p)		251		-		-		-		30,000		-
Total local currency		4,468		3,362		224,507		289,625		1,018,355		557,927
Transaction costs		-		-		(193)		(285)		-		(193)
Total local currency, net of transaction costs		4,468		3,362		224,314		289,340		1,018,355		557,734
Total with no effect of swap transactions		4,766		3,670		256,792		315,907		1,106,004		662,524
Swap transaction gain/losses		93		110		-		-		7,452		14,809
Total loans and financing		4,859		3,780		256,792		315,907		1,113,456		677,333

G-58

20. LOANS AND FINANCING--Continued

Banks	Start date	Maturity	Type of     amortization	Guarantees	Financial charges
Federal Government - Capitalization bonus (a)	8/15/1997	4/10/2014	Semiannual	Receivables and secured account	USD + 8.2% p.a.
Federal Government - Discount bonus (a)	8/15/1997	4/11/2024	At the end	Receivables and secured account	USD + Libor + 1.0125% p.a.
Federal Government - Participant bonus (a)	8/15/1997	4/11/2024	At the end	Receivables and secured account	USD + 6,2% p.a.
IFC – A (b)	2/22/2005	12/15/2017	Semiannual	Secured account and fixed assets	USD + 7.89% p.a.
IFC – B (b)	2/22/2005	12/15/2015	Semiannual	Secured account and Fixed assets	USD + Libor + 2,25% p.a.
IFC – C (b)	4/11/2006	12/15/2019	Semiannual	Secured account and Fixed assets	USD + 11.96% p.a.
Eletrobras (c)	3/3/2000	9/30/2023	Monthly	Receivables and promissory note	6.95% p.a.
Federal Government – Law 8,727 (Caixa Econômica Federal) (d)	6/30/1994	3/1/2014	Monthly	Receivables	TR + 10,028% p.a.
Federal Government – Law 8,727 (Eletrobras) (d)	6/30/1994	3/1/2014	Monthly	Receivables	IGPM + 10,028% p.a.
Banco do Brasil (BB Fat Fomentar)	1/23/2007	2/18/2014	Monthly	Guarantee	TJLP + 4.5% p.a.
Banco do Nordeste – FNE (e)	12/29/2004	3/15/2019	Monthly	Guarantee and secured account	10% p.a.
BNDES Finem 2007 (Syndicate loan) (f)	4/28/2008	12/15/2014	Monthly	Receivables and secured account	TJLP + 3.7% p.a.
BNDES FINAME 2012-2013 (g)	8/28/2013	06/15/2023	Monthly	Receivables and secured account	3.00% p.a
BNDES FINEM 2012-2013 A (g)	8/28/2013	06/15/2020	Monthly	Receivables and secured account	TJLP + 2.8% p.a.
BNDES FINEM 2012-2013 B (g)	8/28/2013	06/15/2020	Monthly	Receivables and secured account	TJLP + 3.8% p.a.
Working Capital Santander (i)	09/30/2013	06/27/2014	Monthly	Receivables	CDI + 1.8% p.a.
BNDES (Finame) (j)	10/15/2010	10/15/2014	Monthly	Guarantee	4.5%
BNDES (Capex 2011) (k)	8/15/2011	06/15/2021	Monthly	Receivables	-
BNDES (Capex 2011) (k)	8/15/2011	06/15/2018	Monthly	Receivables	TJLP + 2.96% p.a.
BNDES (Capex 2011) (k)	8/15/2011	06/15/2018	Monthly	Receivables	TJLP + 3.96% p.a.
BNDES (Capex 2012-2013) (l)	8/16/2013	05/15/2023	Monthly	Receivables	3.0%
BNDES (Capex 2012-2013) (l)	8/16/2013	06/15/2020	Monthly	Receivables	TJLP + 2.80%
BNDES (Capex 2012-2013) (l)	8/16/2013	06/15/2020	Monthly	Receivables	TJLP + 3.80%
Eletrobras (m)	11/23/2006	06/30/2021	Monthly	Receivables and promissory note	6.0%
Eletrobras (n)	09/20/2011	09/30/2018	Monthly	Receivables and promissory note	7.0%
Bradesco S.A. 4th, 5th and 6th agreements (o)	02/01/2008	01/07/2013	Semiannual	-	CDI + 1.05%
Banco do Brasil S.A. (p)	11/19/2013	11/14/2019	Annual	-	107% CDI
Banco do Brasil S.A. (p)	11/29/2013	11/25/2019	Annual	-	107% CDI
Conta Garantida Santander (o)	05/19/2011	05/16/2014	Variable	-	CDI + 1.80%
Conta Garantida Banco Itaú S.A (o)	12/21/2011	12/23/2014	Monthly	-	-
Conta Garantida Banco Bradesco (o)	11/09/2013	07/04/2014	Monthly	-	CDI + 2.30%

(a) Federal Government (Financial agent: Banco do Brasil) - mid and long-term debt (DMLPs) - Acknowledgment of debt to the Federal Government on August 15, 1997. The agreement is divided into 7 (seven) sub loans (three of which have already been settled), bearing interest based on the foreign exchange variation (US dollars).

(b) IFC - International Finance Corporation: The subsidiary CGTF has only one long-term financing agreement, entered into in 2006 in the amount of US$130,000 thousand. This project finance agreement is divided into 3 tranches (IFC-A, IFC-B and IFC-C, maturing in December 2017, 2015 and 2019, respectively).

(c) Eletrobras - Loan raised for financial coverage of direct costs of construction of the rural electrification program, which is part of the universal access and use of electric energy program “Luz Para Todos”, of the Ministry of Mines and Energy (MME), with funds from RGR and CDE.

G-59

20. LOANS AND FINANCING--Continued

(d) Federal Government - Law No. 8,727: Credit assignment made by Eletrobras and the Caixa Econômica Federal (Federal Savings and Loans Bank) to the Federal Government.

(e) Banco do Nordeste do Brasil - Program to Foster Alternative Electric Energy Sources (Proinfra): The subsidiary COELCE entered into an agreement with Banco do Nordeste do Brasil to finance fixed assets investments, with funds from the Constitutional Fund to Finance the Northeastern Region (FNE)/Proinfa.

(f) BNDES FINEM: Financing for the 2007/2009 investment plan of COELCE on April 28, 2008, in the amount of R$ 330,000, raised through loan syndication led by Unibanco, with onlending from the Brazilian Development Bank (BNDES).

(g) BNDES FINAME/FINEM: Financing for investment plan 2013 of the Group contracted on June 28, 2013, amounting to R$ 217,185, through union approved by Itaú with transfer of funds from BNDES. Until December 31, 2013, BNDES had transferred 89% of the total amount, i.e. R$ 192,698.

(h) BNDES PEC: Loan taken out considering the need for working capital of subsidiary COELCE. This contract was settled in January 2013.

(i) Loans taken out due to the need for working capital of subsidiary COELCE..

(j) BNDES Finame – Financing taken out by subsidiary Ampla Energia from SAFRA with transfer of funds from BNDES for acquisition of national equipment..

(k) BNDES Capex 2011: Financing amounting to R$ 331,397 for investment plan 2010/2011 of subsidiary Ampla Energia, contract with union approved by Itaú, with funds transferred from BNDES. The Group took out 79% of the contracted amount.

(l) BNDES Capex: 2012/2013: Financing amounting to R$ 450,171, for 2012/2013 investment plan of subsidiary Ampla Energia, contracted with union and approved by Itaú, with funds transferred from BNDES. Until September 30, 2013, subsidiary Ampla Energia had used 79% of the amount taken out.

(m) Eletrobras: Loan raised for financial coverage of direct costs of construction of the rural electrification program, which is part of the universal access and use of electric energy program “Luz Para Todos”, of the Ministry of Mines and Energy (MME), with funds from RGR and CDE.

(n) Eletrobras: Loan raised for financial coverage of costs of construction of the distribution and sub transmission network of the mountainous region of Rio de Janeiro, which were impacted by the heavy rains in the first quarter of 2011. Funds for this transaction originated from RGR.

(o) Loans raised for purposes of working capital of subsidiary Ampla Energia.

(p) Bank Credit Notes - Bank of Brazil: Loan maturing in November 2019, in the form of Agrarian Credit for the financial support of the controlled Ampla Energia use in amortization of previous debts.

G-60

20. LOANS AND FINANCING--Continued

As mentioned in Note 11, at December 31, 2013, the subsidiary CGTF held investments in the amount of R$ 28,383 (R$ 24,521 in 2012) linked to the short-term portion of the IFC agreement. The subsidiary CGTF has also fixed assets pledged as guarantee and holds a letter of guarantee in the amount of R$ 488,358 and R$ 36,000, respectively.

In connection with the loans taken out with the Brazilian Development Bank (BNDES) and working capital operations, subsidiaries COELCE and Ampla Energia undertook to comply with the following obligations during effectiveness of the agreements, which were adequately complied with at December 31, 2013:

Banco	Financial obligations	Rate
BNDES/FINEM	Net financial debt/EBITDA (maximum)	3.50
BNDES/FINEM	Net financial debt / Net financial debt + Equity (maximum)	0.60
BNDES	Net financial debt / EBITDA (maximum)	3.50
BNDES	Net financial debt / (Equity + Net financial equity) (maximum)	0.60
Capital de giro	Net financial debt / EBITDA (maximum)	3.50
Capital de giro	EBITDA / Net financial expenses (minimum)	2.00

EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.

The amortization curve of the principal amounts of long-term loans and financing, without the effects of swap transactions engaged and funding costs, is as follows:

Year	12/31/2013		12/31/2012
2014		-		209,219
2015		206,578		116,167
2016		189,481		101,202
2017		233,081		101,279
2018		196,661		66,689
After 2018		280,203		68,161
Total		1,106,004		662,717

As determined in the financing agreement, subsidiary CGTF should keep swap contracts in order to protect part of the debt from exchange effects and interest rate, and to protect against the risk of changes in foreign exchange rates on loans and financing indexed to the US dollar. The swap contracts are presented in Note 22.

G-61

20. LOANS AND FINANCING--Continued

Variation of currencies/index of debt accumulated in the year until the position at December 31, 2013 and 2012 is as follows:

Currency / Index	12/31/2013		12/31/2012
Dólar norte-americano		14.64%		8.94%
INPC		5.56%		6.20%
IPCA		5.91%		5.84%
IGP-M		5.51%		7.82%
TJLP		5.00%		5.75%
CDI		8.06%		8.40%
TR		0.19%		0.29%
Libor		0.43%		0.69%

The changes in loans and financing without the effects of funding costs are as follows:

	Local currency				Foreign currency
	Current		Non-current		Current		Non-current		Total
At December 31, 2011		587,996		725,126		50,365		137,622		1,501,109
Additions		-		124,956		-		-		124,956
Provisions for charges		98,984		-		9,139		-		108,123
Interest accrued paid		(106,056)		-		(19,061)		-		(125,117)
Monetary and exchange variation		-		1,714		2,781		12,659		17,154
Transfers		293,869		(293,869)		28,446		(28,446)		-
Swap transaction gain/losses		-		-		(781)		(2,236)		(3,017)
Amortization		(581,806)		-		(43,904)		-		(625,710)
At December 31, 2012		292,987		557,927		26,985		119,599		997,498
Additions		-		717,557		-		-		717,557
Provisions for charges		71,489		-		8,167		-		79,656
Interest accued paid		(70,384)		-		(8,550)		-		(78,934)
Monetary and exchange variation		-		636		4,951		13,288		18,875
Transfers		257,765		(257,765)		30,429		(30,429)		-
Swap transaction gain/losses		-		-		(17)		(7,357)		(7,374)
Amortization		(322,882)		-		(29,096)		-		(351,978)
At December 31, 2013		228,975		1,018,355		32,869		95,101		1,375,300

G-62

21. DEBENTURES

		12/31/2013						12/31/2012
		Principal						Principal
Description	Companies	Charges		Current		Non-current		Charges		Current		Non-current
1st Serie 3rd Issue	COELCE		2,219		-		104,000		1,679		-		104.000
1st Serie 6th Issue	Ampla Energia		490		-		117,000		328		-		117.000
1st Serie 7th Issue	Ampla Energia		411		-		100,000		274		-		100.000
2nd Serie 2nd Issue	COELCE		-		-		-		4,175		62.214		62.214
2nd Serie 3rd Issue	COELCE		4,698		-		334,764		4,353		-		316.280
2nd Serie 5th Issue	Ampla Energia		-		-		-		459		53.519		107.038
2nd Serie 6th Issue	Ampla Energia		8,972		-		209,480		8,290		-		197.913
2nd Serie 7th Issue	Ampla Energia		10,683		-		327,093		9,872		-		309.031
(-) Cost to be amortized			-		(1,736)		(3,853)		-		(2.191)		(6.183)
Total with no effect of swap operations			27.473		(1.736)		1,188,484		29,430		113,542		1,307,293
Swap transaction gain/losses			-		(322)		(19,719)		-		310		2,758
Total debentures			27.473		(2.058)		1,168,765		29,430		113,852		1,310,051

Change in debentures:

	Current		Non-current		Total
At December 31, 2011		388,529		973,221		1,361,750
Funds raised		-		400,000		400,000
Provisions for charges		118,635		-		118,635
Interest accrued paid		(120,822)		-		(120,822)
Transfer of terms		117,245		(117,245)		-
Monetary variation		-		52,702		52,702
Repayment of principal		(360,779)		-		(360,779)
Transfer - transaction cost		(2,191)		2,191		-
Allocation of transaction cost		2,356		304		2,660
Transaction cost		-		(3,880)		(2,880)
Swap transaction gain/losses		309		2,758		3,067
At December 31, 2012		143,282		1,310,051		1,453,333
Provisions for charges		107,148		-		107,148
Interest accrued paid		(109,106)		-		(109,106)
Transfer of terms		180,520		(180,520)		-
Monetary variation		-		59,380		59,380
Repayment of principal		(296,251)		-		(296,251)
Transfer - transaction cost		(2,010)		2,010		-
Allocation of transaction cost		2,465		320		2,785
Swap transaction gain/losses		(633)		(22,476)		(23,109)
At December 31, 2013		25,415		1,168,765		1,194,180

G-63

21. DEBENTURES--Continued

Characteristics of debenture issues:

COELCE

Characteristics	3rd Issue –1st Serie	3nd Issue –2nd Serie
Convertibility	Simple debentures non-convertible into shares	Simple debentures non-convertible into shares
Type	Unprivileged	Unprivileged
Type and form	Registered book-entry debentures, with no issue of certificates	Registered book-entry debentures, with no issue of certificates
Number of securities	10,400 simple debentures	29,600 simple debentures
Par value	R$ 10	R$ 10
Issue date	October 15, 2011	October 15, 2011
Initial maturity	October 15, 2015	October 15, 2016
Maturity	October 15, 2016	October 15, 2018
Monetary restatement	No restatement	IPCA
Rescheduling	No rescheduling	No rescheduling
Remuneration	CDI+0.97%pa	6.85%pa
Interest payment	Semiannual	Annual
Repayment	Two annual installments	Three annual installments
Repayment date	2015 and 2016	2016, 2017 and 2018

3^rd Issue

The third issue of debentures took place on October 15, 2011, with 40,000 (forty thousand) simple, registered, book-entry unsecured debentures, not convertible into shares, in two series, with unit value of R$ 10 as of issue date, in the total amount of R$ 400,000, placed through a public offering. The first series was issued with 10,400 (ten thousand and four hundred) debentures, without restatement, earning CDI plus 0.97% p.a., payable semi-annually and amortized in two (02) annual installments on October 15, 2015 and 2016. The second series was issued with 29,600 (twenty-nine thousand and six hundred) debentures, with restatement by the IPCA, earning 6.85% p.a., payable annually and amortized in three (03) annual installments on October 15, 2016, 2017 and 2018.

G-64

21. DEBENTURES--Continued

Characteristics of debenture issues--Continued

Ampla Energia

Characteristics	2nd Serie -5th Issue
Convertibility	Simple debentures non-convertible into shares
Type	Unprivileged
Type and form	Registered book-entry debentures, with no issue of certificates
Number of securities	13.467 simple debentures
Par value	R$ 10
Issue date	December 15, 2009
Initial maturity	December 15, 2013
Maturity	December 15, 2015
Monetary restatement	IPCA
Rescheduling	No rescheduling
Remuneration	IPCA + 8.30% p.a.
Interest payment	Annual
Repayment	Three annual installments
Repayment date	2013, 2014 and 2015
Characteristics	1st Serie -6th Issue	2nd Serie -6th Issue
Convertibility	Simple debentures non-convertible into shares	Simple debentures non-convertible into shares
Type	Unprivileged	Unprivileged
Type and form	Registered book-entry debentures, with no issue of certificates	Registered book-entry debentures, with no issue of certificates
Number of securities	11,700 simple debentures	18,300 simple debentures
Par value	R$ 10	R$ 10
Issue date	June 15, 2011	June 15, 2011
Initial maturity	June 15, 2015	June 15, 2016
Maturity	June 15, 2016	June 15, 2018
Monetary restatement	No restatement	IPCA
Rescheduling	No rescheduling	No rescheduling
Remuneration	CDI + 1.20% p.a.	IPCA + 7.90% p.a.
Interest payment	Semiannual	Annual
Repayment	Two annual installments	Three annual installments
Repayment date	2015 and 2016	2016, 2017 and 2018

G-65

21. DEBENTURES--Continued

Characteristics of debenture issues--Continued

Ampla Energia--Continued

Characteristics	1st Serie - 7th Issue	2nd Serie - 7th Issue
Convertibility	Simple debentures non-convertible into shares	Simple debentures non-convertible into shares
Type	Unprivileged	Unprivileged
Type and form	Registered book-entry debentures, with no issue of certificates	Registered book-entry debentures, with      no issue of certificates
Number of securities	10,000 simple debentures	30,000 simple debentures
Par value	R$ 10	R$ 10
Issue date	June 15, 2012	June 15, 2012
Initial maturity	June 15, 2016	June 15, 2017
Maturity	June 15, 2017	June 15, 2019
Monetary restatement	No restatement	IPCA
Rescheduling	No rescheduling	No rescheduling
Remuneration	CDI + 1.02% p.a.	IPCA + 6.00% p.a.
Interest payment	Semiannual	Annual
Repayment	Two annual installments	Three annual installments
Repayment date	2016 and 2017	2017, 2018 and 2019

5^th Issue

The Extraordinary General Meeting held on October 21, 2009 approved the 5^th issue of debentures, which aims to payment and/or amortization of debt falling due of subsidiary Ampla Energia. Debentures are simple, non-privileged, not convertible into shares, nominative and registered, in two series, with total amount of R$ 250.00. The second series was early redeemed on September 25, 2013, thus completing this issuance.

6^th Issue

The Extraordinary General Meeting held on May 12, 2011 approved the 6^th issue of debentures, which aims to payment and/or amortization of debt falling due of Ampla Energia.

G-66

21. DEBENTURES--Continued

Characteristics of debenture issues:--Continued

Ampla Energia--Continued

7^th Issue

The Extraordinary General Meeting held on April 27, 2012 approved the 7^th issue of debentures, which aims to payment and/or amortization of debt falling due. The operation has swap for 100% of the tranche in CDI.

In accordance with the indenture of debentures, the subsidiaries COELCE and Ampla Energia are subject to maintaining certain financial ratios, calculated quarterly, based on its financial statements. At December 31, 2013, the subsidiaries Ampla Energia and COELCE are complying with these ratios in the evaluation of its Management.

Issue	Financial obligations	Rate
3nd issue - COELCE	Net financial debt / EBITDA (maximum)		2.50
3rd issue - COELCE	EBITDA/ Net financial debt (minimum)		2.75
5th issue -Ampla Energia	Net financial debt / EBITDA (maximum)		2.70
5th issue -Ampla Energia	EBITDA / Net financial expenses (minimum)		2.50
6th issue -Ampla Energia	Net financial debt / EBITDA (maximum)		2.70
6th issue -Ampla Energia	EBITDA / Net financial expenses (minimum)		2.50
7th issue -Ampla Energia	Net financial debt / EBITDA (maximum)		2.70
7th issue -Ampla Energia	EBITDA / Net financial expenses (minimum)		2.50

Amortization curve of long-term debentures:

	2015		2016		2017		2018		After 2018		Total
1th Serie - 3 th Issue - COELCE		52,000		52,000		-		-		-		104,000
2th Serie - 3 th Issue - COELCE		-		111,578		111,578		111,608		-		334,764
1th Serie - 6 th Issue - Ampla Energia		58,500		58,500		-		-		-		117,000
2th Serie - 6 th Issue - Ampla Energia		-		69,827		69,827		69,826		-		209,480
1th Serie - 7 th Issue - Ampla Energia		-		50,000		50,000		-		-		100,000
2nd Serie - 7th Issue - Ampla Energia		-		-		109,030		109,030		109,033		327,093
(-) Transaction costs		(1,418)		(1,190)		(858)		(387)		-		(3,853)
Total to be amortised		109,082		340,715		339,577		290,077		109,033		1,188,484

G-67

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS

General considerations

The Endesa Group has policies to mitigate financial risks and adopt operating and financial strategies to ensure liquidity, security and profitability of its assets. For this purpose, it maintains managerial systems for controlling and monitoring its financial transactions and corresponding amounts, in order to monitor the risks and rates charged by the market.

Risk factors

a) Foreign exchange rate risk

This risk arises from the possibility of the Endesa Group to incur losses due to fluctuations in foreign exchange rates, which increase financial expenses and liability balances of loans and financing in foreign currency taken out in the market.

The following table presents the carrying amount of foreign currency liabilities that are not hedged by currency swap instruments:

	Liabilities
	12/31/2013		12/31/2012
US dollars		90,067		92,983

We set out below a sensitivity analysis chart related to the impacts on net income of the Endesa Group if the variation of the exchange rate in 2013 were equal to that expected for 2014, according to projections based on the dollar forward curve of the BM&F (Brazilian Mercantile & Futures Exchange):

		Effects
12/31/2013	Increase	On income     statement	On equity
US dollars	9.27%	(8,351)	(8,351)

G-68

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Risk factors--Continued

b) Interest rate risk

This risk arises from the possibility of the Endesa Group to incur losses due to fluctuations in interest rates or other debt indices, such as inflation rates, which would increase the financial expenses related to loans and financing taken out in the market. In order to minimize this risk, the Group prioritizes loans taken out at fixed rates (BNB and Eletrobras) and linked to other indices less volatile to financial market fluctuations, such as the Long-Term Interest Rate - TJLP (BNDES).

In order to avoid risks with changes in market indexes, the loans indexed to floating rate had its rates fixed through swap contracts, to hedge against the risk of rate fluctuation. The adjustment to the debit and credit of this operation is recorded in the income statement.

The table below shows the sensitivity analysis related to the impact on the Group’s net income if variations in interest rates and inflation rates for 2013 were equal to those expected for 2014, according to projections based on the forward curve of the BM&F:

		Effects
12/31/2013	Increase/reduction	On income     statement		On equity
Financial liabilities
CDI	(0.80%)		(1,386)		(1,386)
Libor (6 months)	0.17%		(1)		(1)
IPCA	0.36%		469		469
IGPM	0.73%		9		9
Total			(909)		(909)

c) Credit risk

The risk arises from the possibility of its subsidiaries to incur losses due to the difficulty in collecting amounts billed to its customers. This risk is assessed as low by the subsidiaries due to the diversification in the number of customers and the collection policy and cutting of electricity supply to customers in default. The allowance for doubtful accounts is established in an amount deemed sufficient by management of the Endesa Group to cover possible risks of realization of accounts receivable.

d) Lack of energy

The risk is related to an exceeding increase in demand, which may lead to losses due to increase in costs and decrease in revenue with the adoption of a new rationing program, as occurred in 2001. However, considering simulations performed, the National Operator of the Electricity System (ONS) does not expect a rationing program for the next few years

G-69

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Risk factors--Continued

e) Accelerated debt maturity risk

Some subsidiaries have loans and financing agreements and debentures with covenants that, in general, require the maintenance of economic and financial ratios at certain levels (financial covenants). Failure to comply with these covenants may result in acceleration of debt maturity. These restrictions are adequately monitored and do not restrict the subsidiaries’ capacity to carry out their normal business. Currently, the Endesa Group’s debt ratio is at levels below the limit established by the financial covenants.

f) Capital risk management

The Endesa Group manages its capital to ensure continuity of its normal activities, while maximizing the return to all parties interested or involved in its operations by optimizing the debt and equity balances.

The capital structure of the Endesa Group is formed by net indebtedness (loans detailed in Notes 20 and 21, deducting cash and cash equivalents and temporary cash investments detailed in Notes 5 and 6), as well as by equity of the Group.

	12/31/2013		12/31/2012
Debt		2,569,287		2,450,353
Cash and cash equivalents + Marketable securities		(1,832,528)		(1,429,955)
Net debt (a)		736,759		1,020,398
Equity (b)		7,137,960		6,945,246
Net indebtedness ratio (a/[a+b])		9%		13%

(a) Net debt is represented by total outstanding loans, financing and debentures, including portions of current and noncurrent liabilities, net of balances of cash and cash equivalents and marketable securities. See more details in Notes 5, 6, 20 and 21.

(b) Equity includes all capital and reserves of the Group.

Subsidiary COELCE, over the year ended December 31, 2013, engaged in interest future agreements. These were solely used for management of fixed revenue funds, in order to hedge cash securities, carry out interest rate positioning transactions and change indexes of cash securities. Strategies in future market are considered for all portfolio assets, i.e. individual results aim at contributing to the global result of fixed income portion, determined in the investment policy

G-70

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Risk factors--Continued

g) Liquidity risk

The Endesa Group’s liquidity is managed through the monitoring of forecast and actual cash flows in order to meet possible cash needs in the short-term. So as to ensure the capacity of paying its obligations in a conservative manner, the management of temporary cash investments has focused on very short-term instruments, primarily with daily maturities in order to provide maximum liquidity.

The tables below present information on future maturities of loans, financing, debentures and related party operations in foreign currency of the Endesa Group that are being considered in the projected cash flows (including interest and principal):

	Less than one month		From one to three months		From three months to one year		From one to five years		Over five years		Total
December 31, 2013
Fixed interest loans and financing		8,873		20,451		111,342		364,722		138,188		643,576
Variable interest loans and financing		10,363		29,021		161,126		690,579		196,642		1,087,731
Debentures		-		-		96,284		1,356,495		117,689		1,570,468
Loans and financings with related parties in local currency		-		-		-		-		-		-
		19,236		49,472		368,752		2,411,796		452,519		3,301,775
December 31, 2012
Fixed interest loans and financing		6,307		14,476		86,085		362,775		124,016		593,659
Variable interest loans and financing		34,092		21,715		220,885		280,990		27,704		585,386
Debentures		-		-		225,525		1,270,146		418,153		1,913,824
Loans and financings with related parties in foreign currency		-		-		362,090		-		-		362,090
		40,399		36,191		894,585		1,913,911		569,873		3,454,959

The tables below present the amounts forecast for the next maturity of hedging instruments:

	Less than one month	From one to three months	From three months to one year		From one to five years		Over five years	Total
December 31, 2013
Currency swap				4,172		3,599			7,771
Interest rate swap				(2,365)		(5,015)			(7,380)
				1,807		(1,416)			391
December 31, 2012
Currency swap				5,085		8,647			13,732
Interest rate swap				8,206		14,364			22,570
				13,291		23,011			36,302

In order to avoid any emergency cash need, the Group uses overdraft facilities that it has taken out as a short-term cash source. We set out below the table on the final position of the 2012 and 2013 fiscal years regarding the use of this facility:

Secured account	12/31/2013	12/31/2012
Agreed	350,000	325,000

G-71

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Valuation of financial instruments

In order to determine the fair value of loans and financing, the Endesa Group’s management used discounted future cash flows at rates deemed as fair to carry out new operations in the market. Regarding the fair value of debentures the quotations traded on the secondary market were adopted.

Hierarchical fair value

There are three levels for the classification of fair value relating to financial instruments and hierarchical level is considered to define priority for unadjusted quoted prices in an active market for financial assets or liabilities. The classification of hierarchical levels may be presented as outlined below:

„ Level 1 - Data from an active market (unadjusted quoted price) allowing daily access including on the date of fair value measurement.

„ Level 2 - Data different from that from the active market (unadjusted quoted price) included in Level 1, extracted from the pricing model based on observable market data.

„ Level 3 - Data from a pricing model based on unobservable market data.

			12/31/2013						12/31/2012
	Category	Level	Book value			Fair value			Book value		Fair value
Assets
Cash and cash equivalents	Fair value through P&L	2		1,096,850			1,096,850			814,805		814,805
Marketable securities	Fair value through P&L	2		735,678			735,678			615,150		615,150
Guarantees and restricted deposits	Loans and receivables	2		116,993			116,993			115,153		115,153
Trade accounts receivable	Loans and receivables	2		1,179,537			1,263,657			1,246,412		1,246,412
Indemnification assets (Concession)	Available for sale	3		2,014,096			2,014,096			1,638,619		1,638,619
Liabilities
Loans and financing in local currency	Loans and receivables	2		1,247,137			1,233,193			850,436		849,629
Debentures in local currency	Loans and receivables	2		1,214,221			1,214,221			1,450,265		1,405,416
Loans and financing in foreign currency	Loans and receivables	2		120,425			135,132			131,665		149,805
Derivative financial instruments	Loans and receivables	2		(12.496	)		(12.496	)		17,987		17,987
Trade accounts payable	Loans and receivables	2		993,907			1,166,391			795,833		795,833

The change in the balance of the financial asset classified as Level 3 observed in the years ended December 31, 2013 and 2012 is shown in Note 16.

G-72

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Valuation of financial instruments--Continued

Hierarchical fair value--Continued

The estimated market value of swap transactions was prepared based on the discounted present value of future cash flows (DPV) model, discounted at market rates presented by the BM&F as of December 31, 2013.

At December 31, 2013 and 2012, the Group had swap operations, as shown below:

COELCE

				Reference values
Counterparty	Agreement date	Maturity date	Position	12/31/2013			12/31/2012
HSBC Bank Brasil S.A.	11/8/2012	10/17/2016	CDI + 0.97% p.a 9.43%p		(6,548	)		637

		Fair value				Accumulated effect up to 12/31/2013				Accumulated effect up to 12/31/2012
Counterparty	Description	12/31/2013		12/31/2012		Receivables/     Received		Payables/     Paid		Receivables/     Received		Payables/ Paid
HSBC Bank Brasil S.A.	(+) Assets		103,870		108,167		-		-		-		-
	(-) Liabilities		97,322		108,804		-		-		-		-
	(=) Adjustment		6,548		(637)		6,548		-		-		(637	)

Ampla Energia

				Reference values
				Local currency
Counterparty	Agreement date	Maturity date	Position	12/31/2013			12/21/2012
HSBC Bank Brasil S.A.	09/03/2012	6/16/2017	CDI + 1.02% p.a. 10.05% p.a.		(7,224	)		1,891
HSBC Bank Brasil S.A.	11/18/2012	06/16/2016	CDI + 1.20% p.a. 9.59% p.a.		(6,125	)		540

						Accumulated effect up to 12/31/2013				Accumulated effect up to 12/31/2012
		Fair value				Receivables/		Payables/		Receivables/		Payables
Counterparty	Description	12/31/2013		12/31/2012		Received		Paid		Received		Paid
	Swap agreements:
HSBC Bank Brasil S.A.	(+) Assets		98,994		103,991		-		-		-		-
	(-) Liabilities		91,770		105,882		-		-		-		-
	(=) Adjustment		7,224		(1,891)		7,224		-		-		(1,891)
HSBC Bank Brasil S.A.	(+) Assets		115,201		121,243		-		-		-		-
	(-) Liabilities		109,076		121,784		-		-		-		-
	(=) Adjustment		6,125		(541)		6,125		-		-		(541)

G-73

22. FINANCIAL INSTRUMENTS AND OPERATING RISKS--Continued

Hierarchical fair value--Continued

CGTF

Reference values

Foreign currency

Local currency

Counterparty

Agreement date

Maturity date

Position

12/31/2013

12/31/2012

12/31/2013

12/21/2012

Banco Santander Brasil S.A.

06/15/2006

12/15/2015

Libor 5.4% (a/360) a.a

5,961

8,647

13,965

17,670

Banco Citibank

03/20/2007

12/15/2015

Libor + 2.25% IGPM + 9.77%.

6,807

9,874

15,946

20,177

12,768

18,521

29,911

37,847

						Accumulated effect up to 12/31/2013				Accumulated effect up to 12/31/2012
		Fair value				Receivables/		Payables/		Receivables/		Payables/
Counterparty	Description	12/31/2013		12/31/2012		Received		Paid		Received		Paid
	Swap agreements:
Banco Santander Brasil S.A.	(+) Assets		14,036		17,835		-		-		-		-
	(-) Liabilities		14,909		19,378		-		-		-		-
	(=) Adjustment		(873)		(1,543)		-		(873)		-		(1,543)
Banco Citibank	(+) Assets		16,322		20,846		-		-		-		-
	(-) Liabilities		22,994		34,222		-		-		-		-
	(=) Adjustment		(6,672)		(13,376)		-		(6,672)		-		(13,376)
			(7,545)		(14,919)		-		(7,545)		-		(14,919)

23. TAXES PAYABLE

	12/31/2013		12/31/2012
Value-Added Tax - ICMS		72,540		80,383
Income tax and social contribution		112,558		57,639
Services Tax - ISS		3,268		3,178
Social Integration Program - PIS		8,260		10,264
Social investment program - COFINS		36,146		44,826
PIS/COFINS/IRRF/CSRF (Withheld at source		1,852		2,045
Social contributions		6,160		6,280
Other taxes and contributions		10,509		11,032
Total		251,293		215,647

G-74

24. REGULATORY CHARGES

	12/31/2013		12/31/2012
Fuel consumption bill (CCC)		-		10,389
Energy development account (CDE)		2,945		14,338
Global reversion reserve (RGR) and others		11,475		38,596
Reserve energy charges (EER)		-		1,999
Financial offset for use of water resources (CFURH)		2,507		3,836
Ex-isolated charges		57		3,028
Inspection fee		2,067		2,066
Emergency charges		2,467		2,465
Total		21,518		76,717

The balance of the global reversal reserve refers to the provision of the amounts to be paid to Centrais Elétricas Brasileiras S.A. - Eletrobras, calculated based on 2.5% of property, plant and equipment, limited to 3% of gross revenues from electric energy operations. These amounts are regulated on an annual basis through orders issued by the Economic and Financial Inspection Department (SFF) of ANEEL.

25. RESEARCH, DEVELOPMENT AND ENERGY EFFICIENCY PROGRAMS

	12/31/2013					12/31/2012
	Current			Non-current		Current		Non-current
Electricity Efficiency Program (PEE)		36,058			48,342		42,475		18,321
Research & Development Program (P&D)		58,756			27,044		57,976		13,970
Brazilian National Fund for Scientific and Technological Development (FNDCT)		559			-		820		-
Energy Research Company (EPE)		(55	)		-		-		-
Ministry of Mines and Energy (MME)		(80	)		-		39		-
Total		95,238			75,386		101,310		32,291

Under Law No. 9,991 of July 24, 2000, concessionaires and permittees of public electric energy distribution services must allocate each year, one percent (1%) of their net operating revenue to Research, Development and Energy Efficiency Program, distributed according to the percentages determined by ANEEL.

ANEEL Decision No. 504, of August 14, 2012, and No. 556, of July 2, 2013, approves the Manual of the Research and Development Program and the Procedures of the Energetic Efficiency Program (PROPEE), which determine the guidelines and rules for preparation of R&D and Property Plant and Equipment projects, respectively. The main changes of this new manual and procedure are: Approval of PROPEE, containing the procedures for preparation, forwarding, initial and final evaluation and completion of the respective projects; the possibility of submission of projects at any time of the year, making the process continuous; the submission, through the Management System, of final, measurement and monitoring, and financial accounting audit reports; the emphasis on the financial evaluation of projects, thus increasing the responsibility of the concessionaire on using of the investment.

The subsidiaries COELCE, Ampla Energia, CGTF and CDSA account for expenditures relating to the Research, Development and Energy Efficiency Program on the accrual basis, also amounts are restated by Selic rate through to effective realization.

G-75

26. INSTALLMENT TAX PROGRAM

			REFIS IV		REFIS		REFIS				Auto				REFIS
	PAES		Federal		ICMS		INSS		REFERJ		IRPJ/CSLL		ICMS		IR		Total
Balances at December 31, 2011		15,148		21,180		6,304		12,657		2,279		8,422		30,191		15,480		111,661
(-) Payments		(4,507)		(3,649)		(4,712)		(6,676)		(664)		(4,157)		(16,086)		(7,290)		(47,741)
(+) Update		1,183		1,265		1,002		264		102		598		1,980		371		6,765
Balances at December 31, 2012		11,824		18,796		2,594		6,245		1,717		4,863		16,085		8,561		70,685
Current		4,730		1,588		2,594		6,245		711		3,504		16,085		5,335		40,792
Non-current		7,094		17,208		-		-		1,006		1,359		-		3,226		29,893
			REFIS IV		REFIS		REFIS				Auto				REFIS
	PAES		Federal		ICMS		INSS		REFERJ		IRPJ/CSLL		ICMS		IR		Total
Balances at December 31, 2011		11,824		18,796		2,594		6,245		1,717		4,863		16,085		8,561		70,685
(+) Additions		-		-		4,237		-		-		-		-		-		4,237
(-) Payments		(4,786)		(2,799)		(3,441)		(6,890)		(752)		(4,750)		(17,014)		(6,320)		(46,752)
(+) Update		756		1,802		424		1,134		163		101		929		129		5,438
Balances at December 31, 2012		7,794		17,799		3,814		489		1,128		214		-		2,370		33,608
Current		5,196		1,643		3,814		489		752		214		-		2,370		14,478
Non-current		2,598		16,156		-		-		376		-		-		-		19,130

G-76

27. RELATED PARTIES

The Endesa Group carry out operations with related parties that belong to the same economic group, and the balances, nature and total of transactions and effects on the consolidated financial statements are as follows:

				12/31/2013													12/31/2012
Companies	Ref,	Type of transaction		Non-current   assets		Current liabilities			Non-current liabilities			Revenues (expenses			Intangible   assets l		Non-current   assets		Current liabilities			Non-current liabilities			Revenues (expenses			Intangible   assets l
Enersis S,A,	(a)		Other		-		-			-			-			-		235		2			99			-			-
Fundação COELCE de	(b,1) e		Pension plan							84,506			(7,406	)		606							64,849			(5,684	)		574
Seguridade Social – FAELCE	(b,2)		Acknowledgment of debt		-		12,824			-			-			-		-		12,098			6,049						-
Fundação Brasiletros	(b,3)		Pension plan		-		-			393,339			(46,715	)		-		-		-			480,896			(50,069	)		-
CEMSA - Comercializadora del Mercosulr S,A,	(c)		Energy transportation		86,541		-			87,737			24,675			-		86,539		-			87,757			9,824			-
Endesa Costanera S,A,	(c)		Energy transportation		33,285		-			33,267			9,072			-		33,701		-			33,720			3,336			-
Enel Energy Europe	(e)		Services rendered		-		3,382			-			(3,208	)		-		-		-			-			-			-
Enel Ingegneria e Innovazione	(f)		Services rendered		-		1,789			-			(1,789	)		-		-		-			-			-			-
Enel Green Power Desenvolvimento Ltda			Services rendered		-		1,597			-			-			-		-		-			-			-			-
ICT - Serviciós Informáticos Ltda,	(d)		Services rendered		-		8,806			-			(2,494	)		-		-		6,304			-			(3,414	)		-
					119,826		28,398			598,849			(27,865	)		606		120,475		18,404			673,370			(46,007	)		574
(-) Pension plan					-		(12,824	)		(477,845	)		-			-		-		(12,098	)		(551,794	)		-			-
Total related parties					119,826		15,574			121,004			(27,865	)		606		120,475		6,306			121,576			(46,007	)		574

G-77

27. RELATED PARTIES--Continued

The main conditions related to transactions between related parties are described below:

a) Enersis Agência

Subsidiary Ampla Energia has no accounts payable to Enersis at December 31, 2013 (R$ 99 in 2012).

b) Private pension obligations

b.1) Debt Agreement - FAELCE

Subsidiary COELCE sponsors the pension fund administered by Fundação COELCE de Seguridade Social - FAELCE.

On June 30, 1999, the subsidiary COELCE entered into a contract for consolidation of debts in the amount of R$ 46,600, corresponding to the debt balances of the commitment records entered into on December 31, 1992, in May 23, 1996 and January 31, 1997.

On June 30, 2007, a third amendment was entered into with the updated debt amount of R$ 62,200, according to Resolution CGPC No. 17/96 of the Ministry of Social Security, with a deadline for total payment of 14 successive semiannual installments, starting on December 31, 2007 and ending on June 30, 2014. Until December 31, 2012, subsidiary COELCE paid nine installments, with a remaining debt balance of R$ 12,824 (R$ 18,147 until December 31, 2012).

As guarantee for the operation, subsidiary COELCE assigned to FAELCE the credit rights that is has or comes to have, represented by the collection of electricity bills. FAELCE may withdraw from the bank account of subsidiary COELCE until the amount of debt installments due and unpaid after 45 days of verification of COELCE’s default, at its discretion.

b.2) Private Pension - FAELCE

Subsidiary COELCE, as the sponsor of FAELCE, performs monthly transfers for the financial maintenance of FAELCE and makes contributions to the actuarial reserve for private pension plans of employees of subsidiary COELCE, classified as for “Defined Benefits” and “Defined Contribution”.

The total expenditure in 2013 was R$ 8,012 (R$ 6,258 in 2012), comprising R$ 7,406 (R$ 5,684 in 2012) as operating expense of subsidiary COELCE and R$ 606 (R$ 574 in 2012) capitalized to intangible assets.

The balance as of December 31, 2013 was R$ 84,506 (R$ 64,849 in 2012), which represents the amount of contribution of subsidiary COELCE (sponsor) to pension plans, see Note 31.

G-78

27. RELATED PARTIES--Continued

b) Private pension obligations--Continued

b.3) Fundação Ampla de Seguridade Social - BRASILETROS

Subsidiary Ampla Energia, as the sponsor of Fundação Ampla de Seguridade Social - BRASILETROS, performs monthly transfers for the maintenance of that entity and financial contributions to the actuarial reserve of the private pension plans of employees of the subsidiary classified as PCA (Supplementary Private Pension Plan) and PACV (Private Pension Plan with Variable Contribution).

As a guarantee for the operation, subsidiary Ampla Energia offers the credit rights that it has or comes to have, represented by the collection of electricity bills, until the amount of debt due, also collection of amounts from the payment of credit rights will be made through authorized banking network, transferring funds to the bank account indicated by Brasiletros. The total expenditure for the year ended December 31, 2013 was R$ 46,715 (R$ 50,069 in 2012).

c) CEMSA - Comercializadora del Mercosur S.A. and Endesa Costanera S.A.

The accounts payable with CEMSA and Costanera in the amounts of R$ 121,005 as at December 31, 2013 (R$ 121,477 in 2012) are due to the purchase of electricity for resale in the Brazilian market held in previous years. The balances are financially updated on a monthly basis, incurring also the currency fluctuations, as the contract was settled on US dollars.

d) ICT – Serviciós Informáticos Ltda.

The Company has a contract with ICT referring to professional advisory services and IT management.

This agreement totaled R$ 2,494 as services cost the year twelve-month period ended December 31, 2013 (R$ 3,414 at December 31, 2012), and the corresponding liability of R$ 8,806 at December 31, 2013 (R$ 6,304 at December 31, 2012).

e) Enel Energy

The Company has a contract with Enel Energy referring to software licensing, implementation and maintenance services.

This contract totaled R$ 28 in service cost for the twelve-month period ended December 31, 2013, corresponding to a liability of R$ 41 at December 31, 2013.

Endesa Group totaled R$ 3,208 in service cost for the twelve-month period ended December 31, 2013, corresponding to a liability of R$ 3.382 at December 31, 2013.

f) Enel Ingegneria e Innovazione

The Company has a contract with Enel Ingegneria e Innovazzione, referring to the performance of technological innovation, and R&D projects.

This contract totaled R$ 1,789 service cost for the twelve-month period ended December 31, 2013, corresponding to a liability of R$ 1,789 at December 31, 2013.

G-79

27. RELATED PARTIES--Continued

Management Compensation

The Group’s compensation paid to the key personnel for the year ended December 31, 2013 totaled R$ 10,397 (R$ 12,217 in 2012), which are short-term benefits. Management compensation paid by the Company and its subsidiaries in 2013 aggregated are R$ 34,411 (R$ 31,745 in 2012).

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS

Management believes that all provisions set up are sufficient to cover any losses from the proceedings pending trial. Based on the opinion of legal counsel, a provision was set up for all legal proceedings of which the chances of loss were estimated as probable for the Group.

Provisions for probable contingent liabilities

Below is a statement showing the changes in provisions for contingencies for the years ended December 31, 2013 and 2012:

Description	12/31/2011		Additions/     reversals		Monetary     restatement		Payment		Transfers		12/31/2012
Labor (a)		173,664		4,759		12,423		(9,893)		-		180,953
Civil (b)		382,374		32,868		45,695		(74,536)		(101,851)		284,550
Tax (c)		77,039		1,771		9,917		(20,135)		-		68,592
Environmental (d)		3,000		-		-		-		-		3,000
Total		636,077		39,398		68,035		(104,564)		(101,851)		537,095

Description	12/31/2012		Additions		Monetary       restatement		Payment		12/31/2013
Labor (a)		180,953		4,545		12,624		(12,513)		185,609
Civil (b)		284,550		45,119		48,827		(68,144)		310,352
Tax (c)		68,592		(1,562)		3,614		(1,406)		69,238
Environmental (d)		3,000		-		-		-		3,000
Total		537,095		48,102		65,065		(82,063)		568,199

a) Labor risks

They refer to various labor suits claiming, among others, indemnification for pain and suffering, reinstatement to work, overtime pay, risk exposure additional, severance pay and salary pay differences. In addition, there are suits relating to employees of subcontractors who claim employment relationship with the subsidiaries and equalization with rights of employees of such subsidiaries.

G-80

28. Provision for tax, civil and labor risks--Continued

Provisions for probable contingent liabilities--Continued

b) Civil risks

These encompass civil lawsuits, including consumer-related matters, in which the subsidiaries are defendants, and a significant portion of the provision is linked to proceedings claiming indemnification for accidents with electricity, compensation for tariff adjustment allegedly illegal and less complex proceedings pending trial by small claims courts.

The remaining provision balance is divided into lawsuits claiming indemnification for damages due to voltage fluctuation in electricity supply, disruption of supply, improper collection of amounts and others in connection with consumer-related matters.

Subsidiary COELCE is a defendant in lawsuits questioning amounts paid by consumers resulting from the increase in electricity tariffs based on DNAEE Administrative Ruling No. 38 and 45 of January 27 and March 4, 1986, respectively during the term of the Cruzado Plan. The provision for losses on these proceedings is included in the balance of the allowance for doubtful accounts.

Over the 2012 fiscal year, the pending lawsuit in which subsidiary Ampla Energia was a party to against Enertrade was settled on a final and unappealable basis, which resulted in the full reversal of the provisions recognized, thus impacting the Company’s consolidated result by R$ 101,851.

c) Tax risks

Subsidiary Investluz

PIS/Cofins Violation Notices

On December 21, 2006, the Brazilian IRS issued two violation notices for the collection of PIS and COFINS on interest on equity and other financial income, earned in the 2001-2005 period. At the first administrative level, the violation notices were held partially valid (not valid only in respect to financial interest earned while Law No. 9,718/98 was in force).

Subsidiary Investluz filed an appeal and awaits a decision at the second administrative level. Given the facts and the administrative case law, Investluz recognized a provision for the portion of the violation notices considered as involving probable loss (PIS and COFINS on interest on equity received after the effective date of Laws No. 10,637/2002 and No. 10,833/2003, respectively). The amount of the provision recognized as at December 31, 2013 corresponds to R$ 18,409 for COFINS and R$ 8,204 for PIS.

The remaining portion of the violation notices considered as involving possible loss corresponds to R$ 18,479 for COFINS and R$ 2,614 for PIS (financial income earned during the period of effect of Law No. 9,718/98 and after the effective date of Decree 5,164/2004).

G-81

28. Provision for tax, civil and labor risks--Continued

Provisions for probable contingent liabilities--Continued

c) Tax risks--Continued

Subsidiary COELCE

Subsidiary COELCE concluded the payment of a COFINS installment payment to the IRS in 2000; however the installment payment was originally in 80 installments and the subsidiary made overpayment of six installments. Considering this overpayment, subsidiary COELCE offset this alleged credit against COFINS liabilities. Analysis of the case evidenced that there was a correction of the amount originally stated in the application for tax offset, thus the total amount paid by COELCE (in the 86 installments) corresponded to the rectified debt. Accordingly, IRS understood that the offset made did not apply. The administrative proceeding is still pending trial, in which subsidiary COELCE is basically alleging lack of knowledge of rectification of the declared amount and statute barring of the excess amount resulting from the rectification. However, in view of the facts, subsidiary COELCE considered that it should change the chances of loss to probable and recognize a provision. At December 31, 2013 the amount involved is R$ 2,562.

Subsidiary Ampla Energia

ICMS - Underpayment

The State of Rio de Janeiro filed a tax foreclosure proceeding to collect tax debit due to alleged tax underpayment for the period from February 1999 to September/2000, in the updated amount at December 31, 2013 of R$ 10,154 (R$ 9,241 in 2012). Ampla Energia filed a defense (motion to stay execution) and awaits lower trial court’s judgment.

Subsidiary Ampla Energia--Continued

ICMS – Credit arising from acquisition of fixed assets

The subsidiary was issued a violation notice levied by the Government to collect debts related to the period from December 1996 to November 1998 and November 1998 to March 1999, on the grounds that the assets acquired as fixed assets were not related to the subsidiary’s end activity. After diligence carried out in 2012, Management decided to recognize a provision equal to 40% and 20% of the tax notice, that is, in the updated amount of R$ 5,744 (total notice amount of R$ 14,361) and of R$ 371 (total notice amount of R$ 1,857) at December 31, 2013. See additional information related to this claim on section of provision for possible contingent liabilities.

Subsidiary CDSA

Offset of CSLL and IRPJ debits

In 2005, CDSA offset CSLL and IRPJ debits due to annual adjustment for 2000. According to the IRS, the credit right is not sufficient to pay the due amount, since CDSA has failed to accurately calculate interest on the payment made in 2001 and to include interest and fines in the offset carried out in 2005.

In its defense, CDSA alleged that its credit is sufficient. However, in view of formal errors in the offset procedure, CDSA opted for recognizing a provision in the updated amount of R$ 2,660.

G-82

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Provisions for probable contingent liabilities--Continued

c) Tax risks--Continued

Subsidiary CDSA--Continued

Offset of CSLL and IRPJ debits--Continued

CDSA filed an objection at first administrative level, which was denied on November 30, 2011. After this decision, it filed a Voluntary Appeal, which, on October 4, 2012 was held against CDSA. On April 30, 2013, CDSA presented amendment of judgment, which was declined. On November 22, 2013, the reports were forwarded to Brazil’s IRS Regional Office in Goiânia for review.

d) Environmental Contingencies

The provision made in the amount of R$ 3,000 refers to the environmental lawsuit filed in 2001 by the Goiás State Office of the Public Prosecutor against CDSA, pending trial in the judicial district of Cachoeira Dourada, for alleged damages caused by the installation of the dam where the hydroelectric Power plant of Cachoeira Dourada was built.

Lower trial court’s judgment was rendered in favor of CDSA, which was reversed by the Appellate Court, determining conduction of an expert inspection to determine any possible damages. CDSA filed a special appeal against the judgment.

Legal advisors, conservatively, recommended recognizing a provision, in view of the case nature and taking into account professional experience in similar cases involving environmental damage with resolution negotiated with the Office of the Public Prosecutor.

Contingencies involving possible loss

There are proceedings against the Endesa Group of tax, civil and labor nature, for which a provision has not been recognized, since they involve risk of loss classified by management and its legal counsel as possible, which total approximately R$ 8,603,000 at December 31, 2013 (R$ 7,440,000 in 2012).

a) Labor risks

The main labor cases are related to overtime payment, job reinstatement, secondary and joint liability, salary differences, severance pay, indemnification for pain and suffering and material damage, accidents at work, etc.

G-83

28. Provision for tax, civil and labor risks--Continued

b) Civil risks

The legal position of subsidiaries includes civil lawsuits mostly claiming from defendant indemnification for pain and suffering and material damages.

Subsidiary CIEN

Tractebel Energia S.A. (“Tractebel”)

Tractebel filed an ordinary action claiming alleged noncompliance, by CIEN, of the “Sale Agreement of 300MW of Firm Power and Associated Energy from Argentina” executed on October 20, 1999, by and between CIEN and Centrais Geradoras do Sul do Brasil S.A. (Gerasul), and Tractebel is its successor. According to this action, Tractebel requests that CIEN be condemned to pay the termination fine in the estimated amount of R$ 117,667, in addition to penalties alleged applicable for non-availability of “firm power and associated energy”, which amounts would be calculated at the stage of liquidation of the award and cannot be currently estimated. Also according to this action, Tractebel ignored the widely acknowledged current crisis in Argentina, which started in 2005, and its effects on said agreement and the ongoing statements made by the applicable Brazilian authorities who released CIEN, and its clients, including Tractebel itself, from any regulatory penalties, since they have recognized that the crisis in Argentina was a factor alien to CIEN’s willingness and beyond its control. CIEN has challenged the action and alleged “force majeure” event preventing the performance of contractual obligations. After successive statements made by the parties, the lawsuit was forwarded to be reviewed by the judge. We wait the start of the stage of production of evidence.

Furnas – Centrais Elétricas S.A. (“Furnas”)

Furnas filed an ordinary action claiming alleged noncompliance by CIEN of the “Agreement for Firm Power with Associated Energy”, executed on May 5, 1998, to acquire 700 MW from Argentina. According to the action, Furnas requests that CIEN be condemned to pay the termination fine in the estimated amount of R$ 520,801 and refunds and penalties which amounts would be calculated in the stage of liquidation of the award and these cannot be currently determined. Also, according to the action, Furnas ignored the widely acknowledged current crisis in Argentina, which started in 2005, and its effects on said agreement and the ongoing statements made by the applicable Brazilian authorities who released CIEN, and its clients, including Furnas itself, from any regulatory penalties, since they have recognized that the crisis in Argentina was a factor alien to CIEN’s willingness and beyond its control. CIEN has challenged the action and alleged “force majeure” event preventing the performance of contractual obligations. After successive statements made by the parties and production of relevant evidence, we await trial.

G-84

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE

ICMS - Agreement 035/91

Subsidiary COELCE entered into Agreement No. 035/91 with the Ceará State Finance Office, which formalized the existence of special ICMS payment regime, which would be effected based on the amount received (revenue received) in ten day intervals. This Agreement ruled until March 31, 1998, being revoked by Declaratory Statute No. 02/98.

Nevertheless, the Ceará State Treasury Office issued four violation notices for 1995, 1996, 1997 and 1998 (period during which the mentioned agreement was in force) to collect unpaid ICMS debits, in the updated amount of R$ 18,555. Subsidiary COELCE filed an appeal (motion for clarification) to the Tax Appeals Council, against the judgment that partially held the violation notices valid, determining the payment of due ICMS at the nominal values, excluding any penalties and interest in arrears. On July 9, 2012 the appeal was denied, but it was ordered that the records be taken for the procedural remedy of applying the payments made up to that moment and for subsidiary COELCE to be notified to pay any existing residual amount.

ICMS - Master records of exempt, immune and non-taxable consumers

The Ceará State Finance Office issued a violation notice on December 29, 2004, in the updated amount of R$ 12,634, in order to claim ICMS debits from errors in master records of consumers who are tax exempt and tax immune (commercial, industrial, street lighting and public service classes) for the period April to August 1999. Subsidiary COELCE challenged the notice and awaits first administrative level decision.

On February 16, 2007, a violation notice was issued related to the same subject matter, in the updated amount of R$ 4,371, for 2002, which is pending first administrative level decision.

ICMS - Credit from acquisition of fixed assets

The Ceará State Finance Office issued a violation notice to collect ICMS debits for 2003 and 2004, in the updated amount of R$ 4,196 for overtaking of ICMS credits arising from the acquisition of fixed assets. Subsidiary COELCE challenged the notice, but a first administrative level ruling was handed down considering the notice valid on November 5, 2008. Subsidiary filed an appeal and awaits an administrative decision at second level.

Additionally, in 2011 and 2012 subsidiary COELCE received a violation notices for the 2006 and 2007 fiscal years, respectively, in the updated amount of R$ 21,100. On July 19, 2011 COELCE filed its defense for the 2006 fiscal year and awaits a decision at first administrative level. The subsidiary will file a defense for the 2007 fiscal year on January 24, 2013 and awaits judgment.

G-85

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE--Continued

ICMS - Transfer of credits

On August 1, 2005, the State Finance Office filed a tax foreclosure proceeding to collect ICMS debits relating to credit transfer operations occurred in 1999 and 2000 in the updated amount of R$ 1,719. On March 9, 2007 judgment was rendered in favor of the subsidiary. The State Finance Office filed an appeal, which is pending trial.

On May 6, 2005, subsidiary COELCE filed an action for annulment of ICMS debits relating to the operation of credit transfer occurred in 2001, totaling the amount of R$ 2,044. It awaits a lower trial court’s judgment.

ICMS - Cancellation of invoices

On November 29, 2006, subsidiary COELCE was issued a violation notice in the updated amount of R$ 24,838, due to the cancellation of previously issued invoices with errors without proof that the operations were previously taxed. The notice was upheld at the 1st administrative level, thus it filed an appeal, which is pending trial.

On February 16, 2007, subsidiary COELCE was issued a violation notice in the updated amount of R$ 29,608 related to the same subject matter as to 2002. The notice was upheld at the first administrative level, thus the subsidiary filed an appeal, which is pending trial.

On February 18, 2013, subsidiary COELCE was issued a violation notice in the updated amount of R$ 18,889 related to the same subject matter as to 2008. The notice was upheld at the first administrative level, thus the subsidiary filed an appeal, which is pending trial.

On February 18, 2013, the subsidiary COELCE received another tax notice in the updated amount of R$ 18,989 for the year 2008. The subsidiary COELCE will present defense.

G-86

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE--Continued

ISS - Municipality of Fortaleza

On August 8, 2007, subsidiary COELCE filed an action for annulment of ISS debits on: (i) provision of accessory services essential for power supply, (ii) chattel lease services and (iii) lack of withholding of ISS at source, for the period from July 1998 to January 2000, totaling R$ 5,061. The subsidiary awaits lower trial court’s judgment.

Although the subsidiary has filed an annulment action, on October 10, 2007 the municipality of Fortaleza filed two tax foreclosure proceedings for the collection of the referred to tax debits, for which subsidiary COELCE filed a defense (motion to dismiss the execution) and awaits lower trial court’s judgment.

On July 19, 2007, subsidiary COELCE was issued a violation notice in the updated amount of R$ 1,453, related to the same subject matter. It filed an objection and, following the unfavorable judgment, a voluntary appeal. It awaits the appellate court’s judgment.

The municipality of Fortaleza filed three tax foreclosure proceedings, which total R$ 26,281 to collect ISS debits on the provision of accessory services indispensable for energy supply. Subsidiary COELCE awaits appellate court decision in the two cases. In 2012 a judgment was rendered to one of the tax foreclosures, denying the appeal filed by the Tax Authority and, accordingly, the latter filed a Special Appeal to the Superior Court of Justice, which awaits trial.

ISS - Municipality of Fortaleza--Continued

On July 19, 2007, subsidiary COELCE was issued a violation notice in the updated amount of R$ 3,104, related to services provided in other municipalities, which tax was paid in the respective location it was provided. Subsidiary COELCE filed an objection and, following an unfavorable judgment, a voluntary appeal. An expert evidence was produced and awaits the second administrative level decision

On May 7, 2010, subsidiary COELCE was issued a violation notice in the updated amount of R$ 1,127 related to 2007. It filed an administrative defense and awaits a first administrative level decision.

Subsidiary COELCE was issued four violation notices on September 26, 2012 in the updated amount of R$ 9,871 related to 2008. It filed an administrative defense and awaits the first administrative level decision.

ISS - Municipality of Iguatu

The municipality of Iguatu filed a tax foreclosure proceeding, in the updated amount of R$ 2,852, for ISS debits for the period 2004 to 2008, charged due to existence of differences between the tax returns filed by subsidiary COELCE. COELCE filed a motion to stay execution, which awaits trial.

G-87

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE--Continued

ICMS - Credit reversal - low income consumers

The municipality of Fortaleza issued a violation notice on October 2, 2009, in the updated amount of R$ 24,345, to collect ICMS in 2005 due to insufficient reversal of ICMS credits for non-taxable sales to consumers classified as “low income”. Subsidiary COELCE filed a defense. An unfavorable administrative decision was rendered and on October 7, 2010 subsidiary COELCE filed an appeal. On June 27, 2011 a second administrative level decision was rendered which upheld the first level decision, which considered the violation notice valid. Subsidiary COELCE filed a Special Appeal. On July 11, 2012, subsidiary COELCE was handed down an unfavorable decision, denying the provision of special appeal because COELCE presented an injunction for anticipation of the guarantee in order to obtain a Certificate Attesting to Regular Payment of Tax Debts. The injunction was granted on August 28, 2012. On September 13, 2012, the state of Ceará requested for amendment of judgment. Subsidiary COELCE presented an answer to this and awaits decision.

Additionally, on June 17, 2011, subsidiary COELCE was issued a violation notice in relation to 2006, in the updated amount of R$ 20,020. On July 19, 2011, it filed a defense, which judgment was unfavorable to COELCE. On May 25, 2012, COELCE presented a voluntary appeal, which was denied. Subsidiary COELCE was summoned about the decision and, consequently, presented a provisional measure for anticipation of guarantee in order to obtain Certificate Attesting to Regular Payment of Tax Debts, which awaits decision.

On December 21, 2012, subsidiary COELCE was issued a violation notice related to the same subject matter, for the 2007 fiscal year, in the updated amount of R$ 22,259. It will file a defense at the first administrative level on January 24, 2013 and awaits trial.

On December 18, 2012, subsidiary COELCE was issued a violation notice related to the same subject matter, for the 2008 fiscal year, in the updated amount of R$ 12,92The subsidiary COELCE presented a defense in first instance on January 24, 2013 and is awaiting decision.

PIS/IRPJ - Violation Notices

These are two violation notices for the collection of PIS and IRPJ for the first, second and third quarters of 1998 due to lack of payment detected by the internal audit of the Brazilian Finance Office, in reviewing tax returns filed. Subsidiary COELCE filed a defense, which was rendered partially valid. On October 16, 2008, subsidiary COELCE filed an appeal. On June 28, 2012, it was notified of the judgment related to the collection of PIS that held the appeal valid and settled the collection. The subsidiary awaits the trial of the appeal related to the violation notice for IRPJ. The updated amount involved is R$ 1,925.

G-88

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE--Continued

CSLL/IRPJ - Tax foreclosure proceeding

On January 19, 2009, the Federal Government filed a tax foreclosure proceeding to collect CSLL and IRPJ debits. On April 15, 2009, COELCE filed a motion to stay execution. On June 2, 2011, a ruling was handed down partially upholding it, and declaring terminated the proceedings for two Certificates of Overdue Tax Liability (CDA), with no resolution on the merits, but keeping the collection of one CDA. The Federal Government filed an appeal, as well as the subsidiary (motion for clarification) which were not accepted, and an appeal was filed on November 14, 2012. On February 27, 2013, a favorable decision was handed down to COELCE, determining that the Federal Government must issue a Certificate Attesting to Regular Payment of Tax Debts, and suspend the debt record in CADIN.

Subsequently, the Federal Government shall present a position on the appeal presented by COELCE. The second level decision was favorable for the appeal of the Federal Government, however exclusively to annul the sentence and determine the return of the order to the first level, where it should await final judgment. The restated amount is R$ 18,481.

ICMS in certain operations

On June 17, 2011 COELCE was issued a violation notice claiming ICMS debits from operations in the “COELCE Plus” modality without issue of fiscal documentation in 2006. The subsidiary filed its defense on July 19, 2011and on July 10, 2012 it was notified of the judgment that held the violation notice valid. On August 16, 2012 the subsidiary filed an appeal and awaits the second administrative level decision. The updated amount is R$ 1,720.

On May 30, 2012, the subsidiary COELCE was issued a violation notice related to the same subject matter for the 2007 fiscal year. The subsidiary filed its defense on June 29, 2012 and awaits first administrative level’s decision. The updated amount is R$ 5,738.

On August 1, 2012, subsidiary COELCE was issued a violation notice related to the same subject matter, in connection with the operation carried out in April 2007. The defense was filed on August 31, 2012 and the subsidiary awaits first administrative level’s decision. The updated amount is R$ 384.

Additionally, on October 1, 2012, subsidiary COELCE was issued a violation notice for the 2008 fiscal year, in the updated amount of R$ 4,672. The defense was filed and awaits first administrative level’s decision.

G-89

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary COELCE--Continued

ICMS - Energy acquired for own consumption

On June 17, 2011, subsidiary COELCE was issued notice of violation claiming ICMS debits related to electricity consumed by COELCE in 2006. The subsidiary filed its defense on July 19, 2011 and awaits a first administrative level decision. On October 10, 2011, a decision was rendered upholding the notice of violation. The judgment was held valid at the second administrative level and the subsidiary waits to be notified to proceed with its defense. The updated amount is R$ 1,443.

On August 1, 2012, the subsidiary COELCE was issued a violation notice related to the same subject matter, related to 2007 fiscal year. On August 31, 2012, the subsidiary filed its defense and awaits first administrative level’s decision. Unfavorable lower court decision. Subsidiary COELCE will file an appeal. The updated amount is R$ 2,362.

On December 18, 2013, subsidiary COELCE received a tax delinquency notice for year 2008. Subsidiary COELCE will present defense. The updated amount is R$ 2,651.

ICMS - Difference between recorded carrying amounts and the related amounts per the tax returns

On June 17, 2011, subsidiary COELCE was issued notice of violation claiming ICMS debits relating to alleged differences between the recorded carrying amounts and the related amounts reported in the tax returns. The subsidiary filed its defense on July 19, 2011, but the violation notice was held invalid at first administrative level. The subsidiary filed a Voluntary Appeal and awaits a decision at the 2nd administrative level. The updated amount is R$ 1,926. On December 18, 2013, COELCE received a tax delinquency notice referring to year 2008. COELCE will present defense. The restated amount is R$ 5,133.

COFINS - Action for annulment

On September 17, 2009, the subsidiary filed an Action for annulment to suspend the payment of credit collected by the Tax Authority as COFINS, since it understands that such credits are settled due to offset, and the right to collect it would be barred by preemption. At a lower trial court’s judgment, the suspensive effect was granted. The updated amount is R$ 1,026.

In addition to the aforementioned lawsuits, subsidiary COELCE is also a party to other minor lawsuits, which involve CSLL, PIS, COFINS, ICMS, IPTU and ISS, in the total amount of R$ 7,019.

Income tax (IR) – Differences between income tax returns

COELCE was served notice for formal errors on completion of income tax returns. After an unfavorable lower court decision, COELCE filed appeal and awaits judgment. The rested value at December 31, 2013 is R$ 5,782.

G-90

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary Ampla Energia

Withholding income tax - Fixed Rate Notes (FRN) issue

On July 1, 2005, the Brazilian IRS issued a notice of violation against Ampla Energia for considering that subsidiary Ampla Energia was not entitled to the tax benefit of reducing to zero the rate of withholding income tax- IRRF levied on interest and other earnings remitted abroad, as a result of Fixed Rate Notes (FRN) issued by the subsidiary in 1998. A second administrative level decision in favor of subsidiary Ampla was rendered not upholding the notice of violation. In January 2010, Ampla Energia was notified of the decision and the Special Appeal filed by IRS, which is pending trial. On December 21, 2012, subsidiary Ampla Energia was notified of the decision by the Higher Board of Tax Appeals that held the violation notice valid. On December 28, 2012 were presented an appeal. The appeals filed by Ampla Energia were not accepted. Consequently, Ampla Energia presented an injunction for anticipation of guarantee to obtain a Certificate Attesting to Regular Payment of Tax Debts, and will continue this issue by means of a lawsuit.

The updated amount involved on the process as of December 31, 2013 is R$846,944 (R$819,886 in 2012).

COFINS - Notice of violation - period after tax immunity

The Brazilian IRS issued a notice of violation to collect COFINS debits resulting from alleged underpayments in the period from December 2001 to June 2002. Subsidiary Ampla Energia filed an objection against the notice, which was granted at the first administrative level. The subsidiary filed a voluntary appeal, which was ruled in November 2007 to be partially valid: valid for purposes of repealing COFINS levy on financial income but not valid in relation to the non-taxation of income from sales of energy in the period from the end of December to March 2002, corresponding to a 90-day period for application of the rule that changes social contribution, as set forth in the Federal Constitution. Both the IRS and the subsidiary filed appeals to the Higher Board of Tax Appeals.

COFINS - Notice of violation - period after tax immunity--Continued

On August 24, 2009, the subsidiary filed an interlocutory appeal to the President of the Higher Board of Tax Appeals for admission of the special appeal filed. The interlocutory appeal was dismissed and, on May 5, 2010, the subsidiary was notified accordingly. The Special Claim presented by the Federal Government was found groundless, and the second level decision was maintains, refraining from COFINS levied on financial income (R$ 70 thousand). Consequently, the decision against Ampla Energia about the non-taxation of income from electricity sale at the end of the period from December 2001 to March 2002 was maintained. Ampla Energia will continue this issue by means of a lawsuit.

The amount involved, updated at December 31, 2013, is R$ 113,591 (R$ 179,434 in 2012)

G-91

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary Ampla Energia--Continued

ICMS - Deadline for Payment

On September 26, 2005, the subsidiary was issued a violation notice by the Rio de Janeiro Finance Office, due to voluntary payment, outside the legal term prescribed by Decree No. 31,632/02, of ICMS and additional ICMS destined to the State Fund to Combat Poverty without the payment of legal increases. At the first administrative level decision the violation notice was upheld by the Board of Tax Review. Subsidiary Ampla filed an appeal. On August 26, 2010, it was issued a notification stating that the Board of Tax Appeals decided against Ampla. On September 1, 2010, Ampla filed an appeal to the full Board of Tax Appeals, which was denied on May 9, 2012. On August 30, 2012, Ampla learned about the decision of the Board and filed an appeal to the Tax Authority Office, which awaits trial. Notwithstanding the appeal filed to the Tax Authority Office, the violation notices were registered as overdue tax liabilities on November 1, 2012. Subsequently, Ampla Energia presented an appeal. The state of Rio de Janeiro filed an appeal challenging the guarantee presented, and it was upheld. Ampla appealed. In view of the unfavorable decision which did not accept the guarantee insurance, the subsidiary replaced the guarantee by a bank guarantee.

The amount involved, updated at December 31, 2013, is R$ 232,348 (R$ 210,400 in 2012).

ICMS - Credit arising from acquisition of fixed assets

Subsidiary Ampla has four tax delinquency notices to charge debts for periods from December 1996 to November 1998, November 1998 to March 1999, July 1997 to October 1998, and January 2007 to December 2011, as it states that there is no evidence of ICMS credits from acquisition of fixed assets and/or because the fixed asset items acquired were not related to the core business of Ampla Energia. In relation to the first tax delinquency notice, Ampla obtained a partially favorable second-level decision. On April 5, 2013, Ampla filed an appeal to the Plenary Board. As for the second tax delinquency notice, the subsidiary obtained a favorable second-level decision, and filed an appeal to the Plenary Board by the Public Treasury, which awaits decision. The third tax delinquency notice is awaiting enrollment with the Rio de Janeiro state enforceable debt to continue with the discussion within the legal sphere. As for the fourth tax delinquency notice, the Subsidiary file an objection in September 2012, and awaits judgment; a decision of February 2013, turned the judgment into duty of care to reassessment of the amounts referring to the tax delinquency notice excluding the credits unduly disallowed. The Subsidiary awaits the judgment after the duty of care.

The restated amounts of the four tax delinquency notices at December 31, 2013 are, respectively, R$ 8,617 (tax delinquency notice total amount R$ 14,361), R$ 1,485 (tax delinquency notice total amount R$ 1,857), R$ 24,695 and R$ 50,138 (R$ 6,946, R$ 1,776, R$ 22,124 and R$ 47,390, respectively in 2012). As for the first two tax delinquency notices, Management, based on the legal opinion of its legal counsel, decided to set up a provision at the restated amount, as of December 31, 2013, of, respectively, R$ 5,744 and R$ 371, equivalent to 40% and 20% as it understands that likelihood of loss of these percentages is probable, according to the information of probable risks. The remaining portion (equivalent to 60% and 80%, respectively) was assessed as possible.

G-92

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary Ampla Energia--Continued

ICMS - Credit arising from acquisition of fixed assets--Continued

Additionally, subsidiary Ampla Energia filed an action for annulment of ICMS debit arising from the notice of violation for the period from November 1998 to march 1999, issued under the allegation that the subsidiary had not evidenced the amounts of ICMS credits arising from the acquisition of fixed assets, in the updated amount at December 31, 2013 of R$ 17,498 (R$ 15,931 in 2012). On August 22, 2011, a lower trial court’s judgment was rendered and dismissed the claim made by Ampla. It awaits trial of the Motions for clarification filed.

ICMS - Offset of credits without supporting documentation

The Rio de Janeiro State Finance Office issued a notice of violation under the allegation that the subsidiary unduly recorded ICMS credits (in 1998) without supporting documentation. Subsidiary Ampla Energia awaits a second administrative level decision. The amount involved, updated at December 31, 2013, is R$ 17,387 (R$ 16,236 in 2012).

ICMS - Shipment of goods for repair

The subsidiary filed two actions for annulment of ICMS debits in the updated amount, at December 31, 2013, of R$ 12,939 and R$ 14,024 (R$ 11,774 and R$ 12,785 in 2012), upon shipments of goods for repair without ICMS levy, with no evidence of return to the establishment of origin within the statutory period of 180 days, from February 1998 to August 2000. Related to both process, Ampla Energia awaits judgment of the appeal after an unfavorable decision.

ICMS – Comparisons between managerial reports and fiscal books

Subsidiary Ampla Energia filed an Action for annulment to render invalid the violation notice to collect alleged ICMS debits in the period from December 2000 to October 2001, arising from differences observed after the comparison between managerial reports and fiscal books. After an accounting inspection is carried out, it awaits a lower trial court’s judgment. The amount involved in this lawsuit, updated at December 31, 2013, is R$ 5,034 (R$4,592 in 2012).

ICMS – Cancellation for prior months

Subsidiary Ampla Energia was issued a violation notice in August 2012 to collect alleged ICMS debits arising from differences observed between the ICMS Shipment Book and Agreement 30. These differences result from an error made while completing the Shipment Book related to invoices cancelled within the month it was incurred and prior months. Subsidiary Ampla Energia filed an objection in September 2012, alleging that such error has not given rise to underpayment of taxes, and awaits trial. The amount involved in this lawsuit, updated at December 31, 2013, is R$ 26,059 (R$ 23.931 in 2012).

G-93

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary Ampla Energia--Continued

ICMS and ICMS-FECP – Exempt and not-taxable

Subsidiary Ampla Energia was issued a violation notice in August 2012 to collect alleged ICMS debits arising from non-taxation of customers that should not have, according to inspection, be classified as exempt or non-taxable. Most invoices that allegedly were not ICMS levied have already been taxed in the prior months, since they were reinvoiced from prior months. Ampla Energia filed an objection in September 2012. A duty of care was conducted in March 2013 and April 2013, and Ampla Energia presented an answer to this duty of care. In June 2013, the lower court decided for the annulment of this tax delinquency notice. An appeal is being judged. The amount involved, updated at December 31, 2013, is R$ 6,105 (R$ 5,771 in 2012).

Charge for land use

There are eight proceedings against subsidiary Ampla Energia to collect charge for land use for permanence of fixed installations in public ways and public sites filed by the Municipalities of Niterói, Itaboraí, Rio Bonito and Rio das Ostras, for the period 2002 to 2009, which aggregate the updated amount at December 31, 2013 of R$ 28,015 (R$ 74,043 in 2012). In the proceeding for 2002, the subsidiary awaits a first administrative level decision on the notice of violation. With regard to the proceedings for 2003 to 2009, subsidiary Ampla Energia is discussing the charges in the judicial level, by way of a Writ of Mandamus and six tax foreclosure proceedings.

In the tax enforcement proposed by the city of Niterói for year 2009 after first- and second-level favorable decisions to Ampla Energia, the city of Niterói filed an appeal to the higher courts, which awaits judgment.

Service Tax - ISS

On May 30, 2003, the municipality of Cabo Frio issued a notice of violation against subsidiary Ampla Energia attempting to collect a tax debit in the updated amount at December 31, 2013 of R$ 9,854 (R$ 9,522 in 2012), for the period January 1997 to May 2002. Subsidiary Ampla Energia filed an opposition against the violation notice, which has been pending trial since May 2003.

On September 2, 2009, the municipality of Niterói filed a tax foreclosure proceeding against subsidiary Ampla Energia attempting to collect a tax debit in the updated amount at December 31, 2013 of R$ 1,616 (R$ 1,524 in, 2012), for the period January 1999 to July 2003. In March 2010, subsidiary Ampla Energia filed its defense (motion to stay the tax foreclosure) and awaits lower trial court’s judgment.

G-94

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary Ampla Energia--Continued

Public site occupation charge

On June 1, 2009, subsidiary Ampla Energia filed a Writ of Mandamus against the municipality of Niterói, seeking to suspend collection of the public site occupation charge and the requirement of prior municipal license for it to perform services and maintenance, repair and intervention works in the electricity distribution network in public ways and places in the municipality. The updated amount at December 31, 2013 is R$ 6,250 (R$ 6,250 in 2012). In May 2010, subsidiary Ampla Energia filed an appeal against the judgment rendered that only partially favored it. The case is pending appellate court’s trial.

In August 2012, the preliminary appeal filed by the city of Niterói was accepted for annulment of the decision due to the lack of summoning to object the appeal requesting clarification of decision challenged by Ampla. Decision published in January 2013. On January 24, 2013, an appeal requesting for clarification of decision was filed and awaits judgment. There are other proceedings against subsidiary Ampla Energia, in addition to those described above, involving IR, PIS, COFINS, ICMS, IPTU and ISS totaling R$ 6,213 at December 31, 2013 (R$ 4,820 in 2012).

Subsidiary CDSA

Social contribution tax on net profit - offset of CSLL tax loss balance

The Brazilian IRS assessed the subsidiary CDSA in relation to offset of CSLL tax loss balance for 1998 and 1999. The subsidiary CDSA received a portion of the CSLL tax loss balance at the time of its incorporation through the partial spin-off of CELG, in proportion to the assets transferred in that spin-off, when it obtained the right to offset the tax losses against CSLL liabilities of subsequent years (1998 and 1999).

Subsidiary CDSA filed a declaratory action with request for deposit of the full amount of the debit to discuss the matter in court. On September 11, 2004, a decision was rendered dismissing the application. An appeal was filed and, on April 24, 2012, it was denied. Subsidiary CDSA filed an appeal requesting for clarification of decision, which was also denied on June 11, 2013. On October 29, 2013, CDSA filed a special appeal, which awaits judgment.

The updated amount of the case is R$ 16,609 (R$ 16,094 in December, 2012).

There are other minor proceedings against the subsidiary CDSA, in addition to those aforementioned, involving tax matters aggregating R$ 734 at December 31, 2013.

G-95

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary CGTF

II and IPI - Eletrogêneo Group

Subsidiary CGTF filed two lawsuits (declaratory and incidental) in February 2002 and January 2003, to ensure its right to classify as “Eletrogêneo Group” imported machinery and equipment for the construction of the Thermoelectric Power Plant, which is composed of gas and steam turbo-generating units, subject to II and IPI levy at a zero % rate.

Subsidiary CGTF obtained a preliminary injunction, by way of providing guarantee to the court through judicial deposit, booked, which corresponds to the amount of R$ 80,704 (R$ 78,049 in 2012). In the main action, a lower trial court’s judgment favorable to CGTF was rendered on September 29, 2008. Consequently, the Brazilian Finance Office filed an appeal and in May 2010 there was publication of a ruling dismissing it. Said decision became definitive in July 2010, making the judgment in favor of CGTF final and unappealable.

In the incidental action, subsidiary CGTF was notified, in September 2004, of the lower trial court judgment which upheld the application of CGTF. In light of this decision, the Federal Government filed an appeal and in September 2009 the appellate court’s judgment was rendered confirming the lower trial court’s judgment in favor of subsidiary CGTF. In November 2009, the Brazilian Finance Office appealed (motions for clarification) and in January 2010 there was publication of decision that dismissed such appeal. The Finance Office filed a special appeal, which was dismissed by the decision published on June 22, 2011. The Finance Office filed an appeal against such decision (interlocutory appeal). On December 13, 2012 the judgment published held the appeal filed by the Tax Authority invalid. On December 20, 2012 the Brazilian Tax Authority filed an interlocutory appeal against this judgment, which awaits trial.

PIS and COFINS

Subsidiary CGTF was assessed by the Brazilian IRS for differences between the amounts of PIS and COFINS declared and those carried in the periods November 2003 and February to November 2004. Subsidiary CGTF appealed (motions for clarification) against the decision of the Board of Tax Appeals, which is currently pending trial. The updated amount of the tax assessment is R$67,926 (R$ 64,983 in 2012).

G-96

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary CIEN

PIS/COFINS

The Brazilian Finance Office has filed two tax foreclosure proceedings for the collection of PIS and COFINS debits, subject matter of tax offset processes performed by subsidiary CIEN, in the updated amounts of R$ 1,008 and R$ 3,932.

In relation to the first tax foreclosure proceeding, the subsidiary CIEN filed its defense (motion to stay execution). The Brazilian Finance Office canceled one of the debits collected, reason why the contingency amount was reduced. On October 3, 2011, a ruling was rendered dismissing the motions to stay execution filed by subsidiary CIEN. On October 18, 2011, subsidiary CIEN filed an appeal, which is pending appellate court’s trial.

In relation to the second tax foreclosure proceeding, the subsidiary CIEN filed its defense (motion to stay execution). The lower trial court’s judgment, published on December 14, 2012, recognized the nullity of some of the Certificates of Overdue Tax Liability (CDAs) involved in the tax foreclosure proceedings, which reduced the amount from R$ 5,941 to R$ 3,790. CIEN will file an appeal to the appellate court in relation to the remaining CDAs.

IRPJ/CSLL

The Brazilian IRS issued a notice of violation on December 29, 2008 to collect IRPJ and CSLL debits relating to tax underpayments in 2003, totaling R$ 26,188, adjusted by Selic rate. Subsidiary CIEN joined the installment payment program to pay the partial amount of the tax notice and filed an opposition against the portion relating to the collection of fine in December 2003, amounting to R$ 6,040. With respect to the contested portion, on March 31, 2011, subsidiary CIEN was notified of the first administrative level decision which dismissed the appeal filed. On May 2, 2011, CIEN filed a voluntary appeal, which is pending second administrative level decision. The updated contested amount is R$ 8,527.

ICMS - Rate differential

In January 2008, the State of Rio Grande do Sul filed a tax foreclosure proceeding in the amount of R$ 15,734, to collect the rate differential levied, in February, March and April 2001, on goods imported by the head office of subsidiary CIEN, located in Rio de Janeiro, and transferred by it to the branch located in the State of Rio Grande do Sul, for the manufacture and assembly of the power converter station in the municipality of Garruchos. In June 2010 a first level decision was rendered against subsidiary CIEN, dismissing the motion to stay execution. Subsidiary CIEN filed an appeal, which in December 2010 was upheld. On January 17, 2011, the Finance Office filed an appeal (motions for clarification) that was dismissed. On April 15, 2011, the Finance Office filed a special appeal. On August 30, 2011, a decision was rendered which dismissed the special appeal. The Finance Office filed a new appeal (interlocutory appeal), which is pending trial.

G-97

28. PROVISION FOR TAX, CIVIL AND LABOR RISKS--Continued

Contingencies involving possible loss--Continued

c) Tax risks--Continued

Subsidiary CIEN--Continued

ICMS - Rate differential--Continued

CIEN filed a Writ of Mandamus aimed at recognizing CIEN’s right to non-payment of the difference of ICMS rates levied on the acquisition of equipment intended to CIEN’s fixed assets. The updated amount involved, R$ 1,456, related to this lawsuit is deposited in court.

In view of CIEN’s adherence to the “Ajustar” (adjusting) program (refinancing and payment in installments of debts to the Government), the discussion is currently restricted to the release of the judicial deposit made related to 2001 and 2002.

On June 6, 2011, CIEN filed a request for release of the judicial deposit, which awaits trial.

ICMS – Interstate energy sale

In March 2011 subsidiary CIEN was issued a violation notice assessed by the Tax Authority Office of the State of Ceará to collect ICMS levied on interstate energy sales to industrial consumers. The subsidiary filed a defense at the administrative level and the unenforceability of CIEN liabilities was acknowledged, and the tax delinquency notice was annulled. Therefore, there is no other contingency to be reported on this case.

G-98

29. EQUITY

a) Capital

At December 31, 2013, fully subscribed and paid-in capital is represented by 178,692,925 voting common shares with no par value (170,877,378 in 2012)

At December 31, 2013 and 2012, the Company’s equity holding breaks down as follows:

	12/31/2013				12/31/2012
	Number of   common shares		% equity   participation		Number of   common shares		% equity   participation
Empresa Nacional de Electricidad S.A.		60,299,607		33.75		60,299,607		35.29
Cono Sur Participaciones S.A.		-		-		47,354,669		27.71
Enersis S.A.		87,200,363		48.80		36,677,243		21.47
Chilectra S.A.		9,275,291		5.19		7,742,714		4.53
Chilectra Inversud S.A.		10,342,306		5.79		7,227,787		4.23
Edegel S.A.		6,957,053		3.89		6,957,053		4.07
Grupo Endesa		174,074,620		97.42		166,259,073		97.30
Treasury shares		4,618,298		2.58		4,618,298		2.70
Board of directors’ members		7		-		7		-
Other		4,618,305		2.58		4,618,305		2.70
Total		178,692,925		100.00		170,877,378		100.00

Capital increase

The capital increase of R$ 139,170, correspondent to 7,815,547 common shares issued by the Company in 2013 is the result of the merger of Ampla Investimentos, as mentioned in the Note 1, when the remaining common shares held by other non-controlling interest were acquired by the Company.

Before the merger, Ampla Investimentos had as shareholders’ Chilectra Inversud S.A., Chilectra S.A. and Enersis S.A. with a total percentage of 52.94% and 47.06% belonged to the Company.

At the transaction date, the Ampla Investimento’s equity was R$ 262,862. The Company settled the transaction issuing a total of 7,815,547 corresponding to R$ 139,170, which were converted into the increased participation of Chilectra Inversud S.A., Chilectra S.A. and Enersis S.A.

G-99

29. EQUITY--Continued

b) Legal reserve

The Company’s Articles of Incorporation sets forth that 5% of the annual net income will be used to set up legal reserve, which shall not exceed 20% of the Company’s capital.

From 2012 on, the Company no longer recognizes a legal reserve, in compliance with the provisions of Article 193, paragraph 1, of Law No. 6,404/76, since the sum-up of its capital reserve and legal reserve exceeded 30% of capital.

c) Statutory reserve for working capital

As provided for by the Company’s Articles of Incorporation, the remaining income for the year, after dividend distribution, will be allocated to a statutory reserve for working capital, except for an adverse resolution at the General Shareholders’ Meeting, as proposed by the Board of Directors. The total of the statutory reserve working capital amount should not exceed the amount of the subscribed capital.

As shown in the Note below, at December 31, 2013 the Company allocated the amount of R$ 116,552 (R$ 48,914 in 2012) to recognize the statutory reserve for working capital.

d) Dividends

In accordance with the Company’s Articles of Incorporation, the mandatory minimum dividend is 25% on adjusted net income, as set forth by Article 202 of Law No. 6,404/76.

	12/31/2013
Net income for the year		910,247
(+) Depreciation of PP&E (deemed cost)		37,676
Adjusted profit		947,923
Mandatory minimum dividends		236,981
Additional proposed dividends		616,152
		94,790
Actuarial gain on subsidiaries’ pension fund		21,762
Income reserve – statutory reserve for working capital		116,552

The General Shareholders Meeting held on April 3, 2013 approved payment of dividends amounting to R$ 1,006,545, referring to net income for the year ended December 31, 2012. Of the total paid at that date, R$ 481,997 was paid on December 30, 2013, with the remaining amount of R$ 524,541 at December 31, 2013, fully settled on January 2, 2014.

G-100

29. EQUITY--Continued

e) Capital reserve

In 2005, shareholders increased the Company’s capital through investments in its current subsidiaries. This capital increase was divided into paid-up capital and capital reserve - Goodwill at the amount exceeding the value attributed to capital.

f) Other comprehensive income

f.1) Other comprehensive income - actuarial gains and losses

Pursuant to the standard IAS 19 - Employee Benefits (“IAS 19”), actuarial gains and losses are generated by adjustments and changes in actuarial assumptions of pension and retirement benefit plans and actuarial commitments referring to the health plan must be recognized under other comprehensive income. At December 31, 2013, the Company recognized the net balance of actuarial losses, under other comprehensive income, in the amount of R$ 49,984 (R$ 7,574 in 2012).

f.2) Other comprehensive income - cumulative translation adjustment

Pursuant to IAS 21, which determines that the effects of exchange variation on foreign investments be recognized under other comprehensive income, at December 31, 2013 the Company recognized the amount of R$ 1,824 (R$ 80 in 2012) from the conversion of financial statements of foreign subsidiaries, Compañia de Transmisión Del Mercosul S.A. - CTM and Transportadora de Energia S.A. – TESA.

f.3) Other comprehensive income – gains and losses from cash flow hedge

Pursuant to IAS 39, which determines that the effective portion of gains or losses from derivative financial instruments classified as cash flow hedge be directly recognized in equity under other comprehensive income (OCI), at December 31, 2013 the Company recognized the net amount of R$ 15,550 (R$ 1,607 in 2012) in other comprehensive income. There were no reclassifications to the income statements in 2013, 2012 and 2011.

G-101

30. COMMITMENTS

The Group’s main long-term-contract-related commitments are as follows:

COELCE

	Effective up to		2014		2015		2016		2017		After 2017		Total
Endesa Fortaleza-CGTF		2023		554,093		576,256		599,307		623,279		4,286,826		6,639,761
Proinfa		2025		55,425		57,642		59,948		62,346		597,447		832,808
Energy Works		2013		-		-		-		-		-		-
Eólica - Wobben		2018		6,041		4,079		1,108		1,155		603		12,986
1°LEE - Produto 2005		2012		-		-		-		-		-		-
1°LEE - Produto 2006		2013		155,217		161,426		168,343		174,598		771,621		1,431,205
1°LEE - Produto 2007		2014		44,096		45,860		47,825		49,602		279,559		466,942
2°LEE - Produto 2008		2015		36,111		37,555		39,164		40,620		280,331		433,781
4°LEE - Produto 2009		2016		17,787		18,498		19,291		20,008		164,483		240,067
1°LEN - Produto 2008		2037		35,541		36,821		38,196		39,440		300,056		450,054
1°LEN - Produto 2009		2038		42,449		43,955		45,596		47,081		374,358		553,439
1°LEN - Produto 2010		2039		126,460		131,143		136,041		140,470		2,821,445		3,355,559
2°LEN - Produto 2009		2038		64,250		66,470		68,952		71,197		1,582,214		1,853,083
3°LEN - Produto 2011		2040		97,211		100,568		104,324		107,720		2,325,214		2,735,037
5°LEE - Produto 2007		2014		918		950		985		1,017		5,296		9,166
4°LEN - Produto 2010		2024		14,536		15,039		15,601		16,109		122,299		183,584
5°LEN - Produto 2012		2041		130,092		134,550		139,575		144,119		2,718,189		3,266,525
Leilão Santo Antônio -Produto 2012		2041		30,193		47,093		50,884		52,775		2,146,592		2,327,537
Leilão Jirau - Produto 2013		2042		9,634		14,024		17,377		18,023		781,122		840,180
6°LEN - Produto 2011		2025		5,226		5,435		5,668		5,879		56,372		78,580
7°LEN - Produto 2013		2042		24,574		25,557		28,616		29,680		433,620		542,047
Leilão Belo Monte		2044		-		3,116		54,092		150,078		7,661,690		7,868,976
10° Leilão de Energia Nova		2045		-		18,766		19,570		20,297		994,620		1,053,253
11° Len - Produto 2015		2044		-		35,864		37,400		38,790		1,900,866		2,012,920
12º LEN Produto 2014		2043		93,391		108,068		112,699		116,887		3,028,080		3,459,125
Angra 1 e 2				54,220		56,389		58,805		60,990		198,191		428,595
Cota				70,426		73,243		76,383		79,220		257,429		556,701
Total				1,667,891		1,818,367		1,945,750		2,111,380		34,088,523		41,631,911

EE - Leilão de Energia Existente.

LEN - Leilão de Energia Nova

G-102

30. COMMITMENTS--Continued

Ampla Energia

	Effective up to		2014		2015		2016		2017		After 2017		Total
Angra		2032		57,966		60,918		63,391		65,952		1,382,262		1,630,489
Bilateral		2022		50,980		53,839		56,488		58,920		337,918		558,145
CCGF		2032		98,740		103,769		108,322		112,344		2,356,634		2,779,809
ITAIPU		2023		254,608		261,858		258,504		254,134		1,561,853		2,590,957
Proinfa		2030		63,979		67,237		69,967		72,794		1,265,720		1,539,697
CCEAR 2006		2013		-		-		-		-		-		-
CCEAR 2007		2014		42,676		-		-		-		-		42,676
CCEAR 2008 - Energia Existente		2015		50,810		53,324		-		-		-		104,134
CCEAR 2008 - Energia Nova		2037		2,168		2,274		2,377		2,465		77,079		86,363
CCEAR 2008 - Energia Nova		2022		19,163		20,100		20,999		21,791		123,089		205,142
CCEAR 2009 - Energia Existente		2016		47,196		49,603		51,875		-		-		148,674
CCEAR 2009 - Energia Nova		2038		27,226		28,561		29,854		30,968		1,039,858		1,156,467
CCEAR 2009 - Energia Nova (A-3)		2023		38,240		40,110		41,903		43,484		300,875		464,612
CCEAR 2010 - Energia Nova		2039		48,473		50,849		53,152		55,135		1,984,189		2,191,798
CCEAR 2010 - Energia Nova		2024		59,417		62,322		65,108		67,565		557,086		811,498
CCEAR 2011 - Energia Nova		2040		25,666		26,924		28,143		29,193		1,124,026		1,233,952
CCEAR 2011 - Energia Nova		2025		30,783		32,288		33,731		35,004		336,794		468,600
CCEAR 2012 - Energia Nova		2041		61,291		60,437		46,465		48,199		1,981,579		2,197,971
CCEAR 2012 - Energia Nova		2026		87,133		91,393		95,478		99,081		1,095,256		1,468,341
CCEAR 2013 - Energia Nova		2042		29,919		27,025		18,612		19,308		846,228		941,092
CCEAR 2013 - Energia Nova		2027		137,050		143,750		150,173		155,843		1,955,049		2,541,865
CCEAR 2016 - Energia Nova (A-5)		2045		-		-		2,739		2,841		149,645		155,225
CCEAR 2016 - Energia Nova (A-5)		2035		-		-		18,263		18,952		509,687		546,902
CCEAR 2017 - Energia Nova (A-5)		2036		-		-		-		9,321		270,641		279,962
				1,233,484		1,236,581		1,215,544		1,203,294		19,255,468		24,144,371

The amounts related to contracts for purchase of electricity represent the total amount contract by the current price at the end of 2013, approved by ANEEL.

The subsidiary CDSA maintains commitments of electricity supply entered into with free customers and distributors through Contracts of Purchase and Sale of Electricity under Regulated Environment (CCAR).

	2014		2015		2016		2017		After 2017		Total
Supplies energy		459,660		473,515		481,581		503,441		3,464,323		5,382,520

CGTF maintains commitments of electricity supply entered into with the related party COELCE, with which they have an exclusive long-term electricity supply contract.

	2014		2015		2016		2017		After 2017		Total
Supplies energy		543,302		566,756		588,142		610,307		4,222,251		6,530,758

G-103

31. POST-EMPLOYMENT BENEFITS

Subsidiary Ampla Energia

The subsidiary Ampla Energia sponsors a pension fund managed by Ampla Social Security Foundation (BRASILETROS), a non-profit closely-held entity of private Law for supplementary private pension plan. This Foundation manages two benefit plans: one is a defined benefit plan (Supplementary Retirement Plan - PCA), the main purpose of which is supplementing the benefits to which it is entitled, such as social security insured parties and the subsidiary’s employees; and a defined contribution plan (Variable Contribution Retirement Plan - PACV), the main purpose of which is granting benefits from accumulated reserves on behalf of the participants.

The retirement and pension benefit plans are actuarially evaluated in order to measure the sponsor’s commitments with benefit plans offered to its employees and former employees. The balance recorded at December 31, 2013, in the amount of R$ 393,339 (R$ 480,896 in 2012), corresponds to the total liabilities of the sponsor in relation to the plan of benefits.

The plans managed by subsidiary have the following key characteristics:

a) Supplementary Retirement Plan - PCA (Defined Benefit)

Sponsor

Contributes with 5.56% of the payroll, out of which 1.59% is destined to cover benefits and 3.97% to administrative expenses.

Active participants

The contribution corresponds to cumulative percentages in accordance with salary range, and based on the social security maximum limit, ranging from 1.75% to 10% of the salary.

Assisted participants

This contribution is set on an annual basis, based on the funding plan, which currently corresponds to the same cumulative percentages effective to the active participants.

At December 31, 2001, the subsidiary Ampla Energia recorded actuarial deficit amounting to R$ 118,221, presented in the Supplementary Retirement Plan (PCA), in accordance with CVM Rule No. 371 of December 13, 2000. This deficit was supported by the contracted executed on January 1, 2002 with BRASILETROS, setting forth that the this deficit would be amortized within 20 years with a grace period of 2 and a half years at a 6% interest rate per annum, plus INPV variations.

G-104

31. POST-EMPLOYMENT BENEFITS--Continued

Subsidiary Ampla Energia--Continued

b) Variable Contribution Retirement Plan - PACV (Defined Contribution)

Sponsor

It contributes with 4.16% of the active participants’ payroll, of which 0.19% is destined to cover benefits and 3.97% to administrative expenses.

Active participants

PACV active participants shall make the contribution described in the Plan Rules, given that the average percentage calculated based on the PACV active population at the evaluation base date is equivalent to 5.08% of the PACV active participants’ payroll.

c) Retiree’s health care plan (PAMA)

Ampla Energia is obliged to grant health care benefits only to former employees who were dismissed up to December 31, 1997 and who evidenced their absence through the public pension system. These benefits are optional and covered by Ampla Energia and the users on a pre-paid basis.

The plan is managed by Unimed Leste Fluminense by way of agreements with a periodic contribution adjustment clause in view of the group’s loss ratio. The costing is calculated per capita according to a table broken down into 10 age ranges, in accordance with the criteria allowed by ANS.

The plan may be divided into 3 different groups, which share the same policy:

- Assets – the plan is granted to employees and dependants. The cost collected from employees is determined by Ampla Energia according to the table broken down into three age ranges, collected by family group or family members. Since the contribution is made by employees, it generates life benefits after 10 years of contribution, pursuant to Law No. 9,656.

- Retirees Law No. 9,656 – the group that exercised the right to remain in the plan, provided that they make contributions at their own expenses, pursuant to Law No. 9,656. The cost is directly collected by Unimed, the plan’s manager, and contributions per capita are structured by age range.

- Retirees PDI – the group of retirees and dependants who enjoy the benefit to remain in the plan, and the costing are determined according to the same rules applied to that of employees, that is, contribution tables with three age ranges, collected by family group or family member in the plan.

d) Benefit of payment of FGTS fine upon retirement

Subsidiary Ampla Energia has a Retirement Program ensuring the payment of at least 40% of the FGTS balance plus the employee’s 30-day resignation notice, observing the employment agreement, solely to those who are resigning for retirement.

Only employees who achieved at least 70% of the length of service at Ampla Energia will be entitled to this benefit.

G-105

31. POST-EMPLOYMENT BENEFITS--Continued

Subsidiary COELCE

Subsidiary COELCE sponsors a pension fund managed by COELCE Social Security Foundation (FAELCE), a non-profit closely-held entity of private law for supplementary private pension plan. This Foundation manages two benefit plans: one is a defined benefit plan (BD Plan), the main purpose of which is supplementing the benefits to which it is entitled, such as social security insured parties and COELCE employees; and a defined contribution plan (CD Plan), the main purpose of which is granting benefits from accumulated reserves on behalf of the participants.

The plans managed by subsidiary COELCE have the following key characteristics:

a) Defined Contribution Plan (CD)

The subsidiary makes monthly contributions for CD Plan in the same amount as the participants’ contributions. The contribution amount varies according to the remunerations, given that its calculation is based on the rates of 2.5%, 4.0% and 9.0% applied on a “cascade” basis. Additionally, the plan offers risk benefits, such as disability and death, paid by Faelce under the cost-sharing regime. To meet IAS 19 (Revised), this portion is considered a defined benefit.

b) Defined Benefit Plan (BD)

The BD plan is under the capitalization financial regime for retirement, pension and aid benefits.

The benefit plan is covered by contributions from participants and the sponsor. COELCE makes monthly contributions to BD Plan at a 4.45% payroll rate of all its employees and participant managing officers to cover the ordinary cost and at a 2.84% rate on the ratio (not below the unit) between the number of FAELCE employees and participant managing officers at July 31, 1997, and the number of participant employees on the reporting month of amortizing supplementary contribution, being this supplementary contribution in effect for 22 years and 6 months as from July 1997. In addition to this percentage, the sponsor is responsible for paying the administrative expenses of said entity’s social security activities.

Plan benefits include:

„ Supplement to disability retirement;

„ Supplement to retirement for contribution time;

„ Supplement to retirement by age;

„ Supplement to special retirement;

„ Supplement to reclusion support;

„ Supplement to pension for death;

„ Supplement to annual bonus.

The mathematical calculation referring to supplementary retirement and pension benefits of BD plan adopts the projected unit credit.

G-106

31. POST-EMPLOYMENT BENEFITS--Continued

Subsidiary COELCE--Continued

c) Defined Benefit Plan (BD)—Continued

On June 30, 1999, a debt contract was executed, thus consolidating all debts from retentions and delays on transfer of obligations and financial charges by the subsidiary. On June 30, 2007, a third amendment was executed, according to CGPC Resolution No. 17/96 of the Ministry of Social Security, under the following conditions:

„ Deadline for full payment: 14 half-yearly successive installments starting at December 31, 2007 and ending at June 30, 2014. Up to December 31, 2013, the subsidiary paid 13 amortization payments, leaving an outstanding balance of R$ 12,824 (R$ 18,147 in 2012).

„ Interest is paid on a monthly and successive basis, restated at INPC rate.

„ The principal amount is amortized on a half-yearly basis, calculated based on the debt balance of each month, following the restatement at INPC rate.

c) Health Care Plan

The health care plan, managed by Unimed Fortaleza, is rule by way of agreements with a periodic contribution adjustment clause in view of the group’s loss ratio. The costing is calculated per capita according to a table broken down into 10 age ranges, in accordance with the criteria allowed by ANS.

The plan may be divided into 3 different groups which share the same policy:

- Assets – the plan is granted to employees and dependants. The cost collected by the plan’s manager is partially covered by COELCE, subject to the contribution proportion determined based on the related salary range. Since the contribution is made by employees, it generates life benefits after 10 years of contribution, pursuant to Law No. 9,656.

- Retirees Law No. 9,656 – the group that exercised the right to remain in the plan, provided that they make contributions at their own expenses, pursuant to Law No. 9,656. The cost is directly collected by Unimed, the plan’s manager, according to the plan rules.

- Special retirees – a closed group of retirees and dependants, partially borne by COELCE (60%), as a result of negotiations ratified by way of a collective agreement.

d) Benefit of payment of FGTS fine upon retirement

Pursuant to the collective agreement in force, for retirement cases in any categories, in the event of termination of the employee agreement, the employee will be entitled to receive the fine equal to 40% of the FGTS balance for termination purposes, as set forth in the Act of Temporary Constitutional Provisions (ADCT).

The subsidiaries opted for recognizing actuarial gains and losses immediately in the year they incurred in other comprehensive income.

G-107

31. POST-EMPLOYMENT BENEFITS--Continued

Reconciliation of opening and ending balances of the present value of the obligation

	Ampla Energia					COELCE					Consolida
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Present value of actuarial obligations at the beginning of the year		(1,169,274	)		(1,064,274)		(964,017	)		(716,283)		(2,133,291	)		(1,780,557)
Cost of current services		(1,515	)		(85)		(7,848	)		(5,718)		(9,363	)		(5,803)
Cost of interest		(110,392	)		(107,623)		(91,449	)		(72,631)		(201,841	)		(180,254)
Participants’ contribution		(27	)		(29)		-			-		(27	)		(29)
Benefits paid		80,561			76,773		63,320			49,709		143,881			126,482
Actuarial gain/(loss)		267,162			(74,037)		182,132			(219,094)		449,294			(293,131)
Total present value of actuarial obligation		(933,485	)		(1,169,275)		(817,862	)		(964,017)		(1,751,347	)		(2,133,292)
Reconciliation of opening and ending balances of the fair value of plan assets
	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Fair value of plan assets at the beginning of the year		688,378			539,810		1,006,903			740,786		1,695,281			1,280,596
Participants’ contribution		27			29		4,956			4,522		4,983			4,551
Sponsors’ contribution		40,963			34,013		21,715			21,634		62,678			55,647
Benefits paid in the year		(15,369	)		(22,251)		33,673			26,372		18,304			4,121
Actuarial return		(173,853	)		136,778		(156,376	)		213,590		(330,229	)		350,368
Fair value of plan assets at the end of the year		540,146			688,379		910,871			1,006,904		1,451,017			1,695,283
Reconciliation of present value of the obligation and the plan assets value, with assets and liabilities recorded in the balance sheet
	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Present value of actuarial obligations		(933,485	)		(1,169,275)		(817,862	)		(964,017)		(1,751,347	)		(2,133,292)
Fair value of assets		540,146			688,379		910,871			1,006,904		1,451,017			1,695,283
Present value of obligations exceeding Fair value of assets		(393,339	)		(480,896)		93,009			42,887		(300,330	)		(438,009)
Effect of limit for asset recognition					-		(177,515	)		(107,736)		(177,515	)		(107,736)
Net actuarial assets/(liabilities) (*)		(393,339	)		(480,896)		(84,506	)		(64,849)		(477,845	)		(545,745)
Debt raised					-		(12,824	)		(18,147)		(12,824	)		(18,147)
Net actuarial assets/(liabilities) calculated		(393,339	)		(480,896)		(97,330	)		(82,996)		(490,669	)		(563,892)

(*)The amount for the Ampla Energia comprises the balance of the contracted debt

Expenses recorded in income statements

	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
current service cost		1,542			114		7,848			5,718		9,390			5,832
Participants’ contribution		(27	)		(29)		(4,956	)		(4,522)		(4,983	)		(4,551)
Service cost		1,515			85		2,892			1,196		4,407			1,281
Net interest on the net defined benefit liability/(asset)		48,817			49,984		11,965			(7,798)		60,782			42,186
Total expenses/ (revenues)		50,332			50,069		14,857			(6,602)		65,189			43,467

G-108

31. Post-employment benefits--Continued

Percentage that each main category of plan assets represents in relation to the total fair value of plan assets

	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Debt securities		356,306			496,613		690,238			770,068		1,046,544			1,266,681
Equity securities		119,613			108,321		118,159			117,769		237,772			226,090
Real estate		47,025			53,367		63,586			73,455		110,611			126,822
Others		17,202			30,078		38,888			45,612		56,090			75,689
Fair value of plan assets		540,146			688,379		910,871			1,006,904		1,451,017			1,695,282
Total amounts recorded in other comprehensive income
	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Actuarial gain/ (loss)		(267,162	)		74,037		(182,132	)		219,094		(449,294	)		293,131
Actuarial gain/(loss)		173,853			(136,779)		156,376			(213,590)		330,229			(350,369)
Change in recognized restrictions of assets		-			(5,261)		59,222			80,333		59,222			75,072
Change in adjustment for debt recognition		-			-		(5,323	)		(16,926)		(5,323	)		(16,926)
Effect of adoption - IAS 19 (R1)		(3,617	)		3,617		(6,951	)		6,951		(10,568	)		10,568
Total other comprehensive income in the year		(96,926	)		(64,386)		21,192			75,862		(75,734	)		11,476
Actual return on plan assets
	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Expected return on plan assets		65,192			54,522		96,993			76,081		162,185			130,603
Actuarial gain (loss) on plan assets		(173,853	)		136,778		(156,376	)		213,590		(330,229	)		350,368
Actual return on plan assets		(108,661	)		191,300		(59,383	)		289,671		(168,044	)		480,971
Actuarial amounts for current and prior years
	Ampla Energia					COELCE					Consolidated
	12/31/2013			12/31/2012		12/31/2013			12/31/2012		12/31/2013			12/31/2012
Defined benefit obligation		(933,485	)		(1,169,275)		(817,862	)		(964,017)		(1,751,347	)		(2,133,292)
Plan assets		540,146			688,379		910,871			1,006,904		1,451,017			1,695,283
Surplus (deficit)		(393,339	)		(480,896)		93,009			42,887		(300,330	)		(438,009)
Adjustments of experiences on plan liabilities		267,162			(74,037)		182,132			(219,094)		449,294			(293,131)
Adjustments of experiences on plan assets		(173,853	)		136,778		(156,376	)		213,590		(330,229	)		350,368

G-109

31. Post-employment benefits--Continued

Reconciliation of opening and closing balances of defined benefit asset ceiling effect

	Ampla Energia				COELCE				Consolidated
	12/31/2013		12/31/2012		12/31/2013		12/31/2012		12/31/2013		12/31/2012
Unrecognized asset at the start of the year		-		4,761		107,735		24,798		107,735		29,559
Interest on unrecognized asset recognized in P&L		-		500		10,558		2,604		10,558		3,104
Other changes in unrecognized asset due to the asset ceiling		-		(5,261)		59,222		80,333		59,222		75,072
Unrecognized asset at end of year		-		-		177,515		107,735		177,515		107,735

The Group recognized expenses with the defined contributions plan in the amount of R$ 6,301 in 2013 (R$ 3,187 in 2012 and R$ 2,593 in 2011).

Main assumptions adopted

The main assumptions adopted by the independent actuary for calculation were as follows, by its nominal amount:

Ampla Energia

COELCE

Main actuarial assumptions

PCA

PACV

PAMA

FGTS

BD

CD

Plano de saúde

FGTS

Discount rate

12.35%

12.39%

12.44%

11.95%

9.80%

9.80%

9.80%

9.80%

Salary growth rate

7.61%

7.61%

N/A

7.61%

7.61%

7.61%

N/A

7.61%

Expected inflation rate

5.50%

5.50%

5.50%

5.50%

5.50%

5.50%

5.50%

5.50%

Adjustment of benefits granted

5.50%

5.50%

N/A

N/A

5.50%

5.50%

N/A

N/A

Overall mortality table

AT-2000

AT-2000

AT-2000

AT-2000

AT-2000

AT-2000

AT-2000

AT-2000

Disability table

Light-Média

Light-Média

N/A

N/A

Light-Média

Light-Média

Light-Média

Light-Média

Disability mortality table

AT-49(+6)

AT-49(+6)

AT-49(+6)

N/A

AT-49(+6)

AT-49(+6)

AT-49(+6)

N/A

In order to carry out the actuarial evaluation for year 2013, the assumption that medical costs will increase (medical inflation) by 8.66% p.a. (3.00% p.a. in actual terms) was adopted. In the previous year, this assumption had a decreasing characteristic, varying from 11.57% p.a. (5.75% p.a. in actual terms) in the first projection year, reaching 6.51% p.a. (0.95% p.a. in actual terms) for 2023 onwards.

For cost projection, COELCE adopted the assumption of growth of costs according to age, of 3.00% p.a. (3.00% p.a. in 2012)It also adopted the assumption of actual growth of contributions to the health care plan by 1.50% p.a. (3.00% p.a. in 2012).

All participants will have to opt for remaining in the plan upon retirement.

COELCE adopted the assumption of zero return for the FGTS accumulated balances.

G-110

32. INCOME TAX AND SOCIAL CONTRIBUTION

The reconciliation of provision for income and social contribution taxes, calculated at tax rate, with the amounts in the income statements, is as follows:

Description	12/31/2013		12/31/2012		12/31/2011
Income before income taxes		1,666,211		2,035,605		1,612,295
Nominal rate (34%)*		566,512		692,106		548,180
Permanent additions
Profit sharing (Management)		5,260		2,573		2,032
Management’s bonus		280		-		348
Goodwill amortization of investment using equity method		2,101		-		-
CTM and TESA rates		13,748		9,186		56
Donations		1,266		783		310
Indirect benefits		-		30		124
Nondeductible fines		1,682		7,041		734
Monetary restatement on provisions for tax, civil and labor risks		-		953		72
Depreciation in accordance with Law 8,200		381		196		205
No deductible depreciation expense		11,532		-		-
Losses		1,745		8,715		9,107
Losses on accounts receivable - reversal of provision for bad debt		-		4,738		19,043
Nondeductible Donations		675		838		13
Other additions		4,986		-		29,252
		43,656		35,053		61,296
Permanent exclusions
Tax notice 104/2009 - COELCE Plus		-		-		(2,329)
Amortization of goodwill and reversal of provision		5,368		(3,570)		(7,573)
Net effect of subsidiaries taxed by presumed profit (Income tax)		(94,446)		(104,835)		(78,582)
Actuarial surplus		-		-		(8,897)
		(89,078)		(108,405)		(97,381)
Permanent deductions
Operation profit		(100,091)		(65,147)		(108,166)
PAT tax benefit		(2,463)		(1,778)		(1,955)
Cultural tax incentive		(3,989)		-		-
Sportive tax incentive		(569)		-		-
Additional IRPJ		(336)		-		(96)
Prior periods adjustments		(218)		(312)		-
		(107,666)		(67,237)		(110,217)
Other
Provision for tax, civil and labor risks – ICMS		-		-		(4,961)
Adjustment on provision for tax, civil and labor risks – IRPJ and CSLL		-		-		5,559
Differences in foreign subsidiaries		(5,405)		(4,204)		(1,227)
Other		4,550		18,324		7,525
		(855)		14,120		6,896
Current income and social contribution taxes		496,337		383,909		412,424
Deferred income and social contribution taxes		(32,856)		204,196		62,679
Tax incentives		(50,911)		(23,136)		(66,329)
Effective rate		412,570		564,969		408,774

* Income tax was calculated at a 15% rate, plus 10% surtax and social contribution tax of 9%.

Income and social contribution calculation bases of subsidiary CDSA were determined upon application of 8% and 12% rates, respectively, on gross income (“presumed profits method”), according to the determination rules under taxable profit as a percentage of gross sales, adopted by this subsidiary CDSA, according to liberality provided by Law No. 9,964 of April 10, 2000, for those taxpayers entering into the Tax Recovery Program (REFIS).

G-111

33. NET REVENUE

Electricity supply breakdown by class of consumers is as follows:

	Number of consumers						MWh						R$
	(Unaudited)						(Unaudited)
	12/31/2013		12/31/2012		12/31/2011		12/31/2013		12/31/2012		12/31/2011		12/31/2013		12/31/2012		12/31/2011
Invoiced supply-
Residential		3,533,559		3,392,641		3,362,496		6,815,980		6,397,620		5,699,826		3,396,112		3,535,034		3,045,198
Residential - low income		1,235,736		1,211,463		1,122,859		1,421,776		1,286,522		1,487,933		327,980		329,415		387,228
Industrial		10,687		10,639		10,682		2,170,713		2,253,541		2,651,145		751,589		872,263		915,505
Commercial, services and others		321,887		316,011		311,052		4,034,480		3,912,323		3,605,389		1,789,662		1,953,408		1,788,224
Rural		513,003		487,940		457,745		1,449,190		1,353,037		1,057,623		282,092		295,526		246,023
Government		46,331		45,162		43,697		1,095,538		1,023,873		914,469		464,434		488,161		448,813
Public lighting		3,503		3,395		3,283		808,202		780,139		732,899		221,574		239,000		218,820
Public services		10,751		10,350		9,980		770,263		742,515		707,883		196,863		211,933		204,940
Revenues from over demand and reactive excess		-		-		-		-		-		-		(18,722)		(19,444)		(12,934)
		5,675,457		5,477,601		5,321,794		18,566,142		17,749,570		16,857,167		7,411,584		7,905,296		7,241,817
Unbilled supply		-		-		-		-		-		-		(36,572)		59,042		(24,802)
Consumers, concessionaires and authorized parties														7,375,012		7,964,338		7,217,015
Electricity supply		-		-		-		-		-		-		695,619		878,232		484,308
Low-income		-		-		-		-		-		-		252,997		328,903		266,106
Short-term electricity		-		-		-		-		-		-		1,891		100,624		13,125
Revenue from use of electricity grid – free consumers - resale		68		43		37		-		-		-		82,040		118,557		131,970
Revenue from over demand and reactive excess - Free customers		-		-		-		-		-		-		(89)		(2)		(289)
CDE Subventions - Tariff discount		-		-		-		-		-		-		217,730		-		-
Availability of the electricity network		13		13		14		432,427		418,978		404,663		182,657		252,127		235,997
RAP		-		-		-		-		-		-		270,485		264,404		178,927
Availability of the transmission network to related parties		-		-		-		-		-		-		15,794		18,260		20.641
Revenue from construction		-		-		-		-		-		-		698,047		572,735		619,135
Other revenue		-		-		-		-		-		-		206,795		170,488		158,532
Gross operating revenue														9,998,978		10,668,666		9,325,467
(-) Revenue deductions
State VAT (ICMS		-		-		-		-		-		-		(1,827,592)		(2,136,963)		(1,855,960)
Contribution Tax on Gross Revenue for Social Integration Program (PIS)		-		-		-		-		-		-		(84,168)		(97,093)		(63,276)
Contribution Tax on Gross Revenue for Social Security Financing (COFINS)		-		-		-		-		-		-		(327,781)		(440,955)		(295,519)
Service tax (ISS)		-		-		-		-		-		-		(3,996)		(2,979)		(3,141)
Quota for Global Reversion Reserve (RGR)		-		-		-		-		-		-		1,973		(125,956)		(116,268)
CCC/CDE Subventions		-		-		-		-		-		-		(39,480)		(270,988)		(333,426)
P&D and energy effectiveness		-		-		-		-		-		-		(74,281)		(69,511)		(42,607)
Ex-Isolated charges		-		-		-		-		-		-		(188)		(9,636)		(8,249)
Other taxes and contributions on revenue		-		-		-		-		-		-		(7,710)		(29,500)		(27,749)
Total revenue deductions		-		-		-		-		-		-		(2,363,223)		(3,183,581)		(2,746,195)
Total		5,675,538		5,477,657		5,321,845		18,998,569		18,168,548		17,261,830		7,635,755		7,485,085		6,579,272

G-112

34. OPERATING COSTS AND EXPENSES

Operating expenses breakdown according to their nature is as follows:

	12/31/2013										12/31/2012		12/31/2011
	Cost of       services		Selling   expenses		General and  administrative  expenses		Others		Total		Total		Total
Personnel (including private pension plan)		(241,409)		(3,585)		(134,544)		-		(379,538)		(366,776)		(321,577)
Material		(21,668)		(5,854)		(3,832)		-		(31,354)		(29,942)		(26,803)
Raw material and inputs for electricity production		(233,648)		-		-		-		(233,648)		(127,420)		(120,512)
Third-party services		(394,878)		(20,543)		(130,342)		-		(545,763)		(525,003)		(490,810)
Electricity purchased for resale		(2,837,970)		-		-		-		(2,837,970)		(2,599,878)		(2,065,756)
Transmission system charges		(321,758)		-		-		-		(321,758)		(610,898)		(383,374)
System service charges		(25,858)		-		-		-		(25,858)		(53,328)		(57,411)
Asset retirement costs		(82,393)		-		(11,694)		-		(94,087)		(75,482)		(8,774)
Impairment		-		-		-		(10,919)		(10,919)		-		-
Write-off – Decision No 367		-		-		-		(33,918)		(33,918)		-		-
Provision for inventory losses		-		-		-		(7,570)		(7,570)		-		-
Depreciation and amortization		(505,055)		-		(12,886)		-		(517,941)		(455,916)		(452,841)
Financial offsetting or use of water resources		(11,336)		-		-		-		(11,336)		(18,305)		(15,959)
Accrual for doubtful accounts		-		(98,419)		-		-		(98,419)		(98,970)		(128,528)
ANEEL inspection fee		(10,115)		-		-		(4,770)		(14,885)		(15,602)		(28,162)
Construction cost		(698,047)		-		-		-		(698,047)		(572,735)		(13,460)
Provision for contingencies		-		-		(48,102)		-		(48,102)		62,453		(619,135)
Amortization and reversal of incorporation goodwill		-		-		-		(24,720)		(24,720)		(27,013)		(29,518)
Other operating costs/expenses		(36,215)		(388)		(32,710)		(8,645)		(77,958)		(96,139)		(62,024)
		(5,420,350)		(128,789)		(374,110)		(90,542)		(6,013,791)		(5,610,954)		(4,824,464)

G-113

34. OPERATING COSTS AND EXPENSES--Continued

The breakdown of the electricity purchased for resale is as follows:

Description	12/31/2013		12/31/2012		12/31/2011
Centrais Elétricas S.A. - Furnas		(106,011)		(148,120)		(144,050)
Itaipu Binacional		(261,628)		(234,519)		(207,432)
Enertrade Comercializadora de Energia S.A.		(71,627)		(39,706)		(42,276)
EDP Energias do Brasil S.A.		(2,789)		-		-
Tradenergy Emp. Com. Energia		(2,330)		-		-
Energest		(5,052)		-		-
Eletronuclear – account payable		(46,445)		-		-
Eletrobrás termonuclear S.A. - Eletronuclear		(109,178)		-		-
Companhia Hidroelétrica do São Francisco - CHESF		(53,269)		(98,926)		(81,665)
Petróleo Brasileiro S.A. - Petrobras		(61,451)		(70,937)		-
Companhia Energética de São Paulo - CESP		(264,863)		(64,131)		(66,510)
Centrais Elétricas do Norte do Brasil S.A. - ELETRONORTE		(40,736)		(46,601)		(46,564)
Copel Geração S.A. - COPEL		(30,485)		(45,562)		(40,251)
CEMIG - Geração e Transmissão S.A.		(51,020)		(43,586)		(41,643)
Electric Energy Sale Chamber – CCEE		(249,085)		(160,232)		(23,851)
CCEARs - Electricity Commercialization Arrangements on Regulated Environment		(684,892)		(693,277)		(661,390)
Program to Foster Alternative Electric Energy Sources -PROINFA		(114,614)		(95,580)		(75,887)
QUATIARA		(3,478)		-		-
SAFIRA		(5,888)		-		-
Tractebel Energia S.A. (*)		(17,051)		(34,517)		(33,426)
Contracts as per availability		(362,526)		(282,660)		(153,455)
Potency physic guarantee quotas		(171,152)		-		-
(-) Recuperation energy buying expense		83,341		-		-
Hydrology Risk		(20,939)		-		-
(-) Recuperation hydrology risk expense		20,939		-		-
Involuntary exposition		(296,109)		-		-
(-) Recuperation involuntary exposition expense		199,171		-		-
MCSD - Leftovers and Deficits Offsetting Mechanism		(75,246)		(215,697)		(201,682)
Other		(33,557)		(325,827)		(245.494)
		(2,837,970)		(2,599,878)		(2,065,576)

(*)   Availability of the generator of electricity is contracted when necessary.

G-114

35. FINANCIAL INCOME (EXPENSES)

Description	12/31/2013		12/31/2012		12/31/2011
Financial income
Income from financial ,investments		151,565		120,075		121,429
Interest income from debentures		-		-		4,168
Penalties and arrears surcharges		89,915		96,447		84,901
Financial income - Indemnifiable assets		205,165		487,517		23,728
Restatement of legal deposits		31,491		4,585		2,583
Pension fund charges		-		7,798		13,166
Credit updated for PIS and COFINS		100,671		-		-
Monetary restatement - CELG		2,891		11,530		117,655
Other finance income		29,895		39,827		84,109
Total financial income		611,593		767,779		451,739
Financial expenses
Monetary variation		(16,043)		(16,459)		(48,339)
Debt charges		(79,656)		(108,123)		(165,955)
Restatement of taxes and penalties		(8,216)		(9,044)		(19,570)
Monetary restatement on provisions for tax, civil and labor risks		(65,065)		(68,035)		(62,177)
Pension plan charges		(50,214)		(49,984)		(25,383)
Interest expenses on debentures		(107,148)		(118,635)		(104,408)
Monetary variation on debentures		(59,380)		(52,702)		(13,691)
DIC / FIC indemnifications		(33,875)		(23,112)		(28,169)
Swap losses		(3,936)		(5,656)		-
Energy Effectiveness Correction and R&D Program		(1,609)		(2,377)		(3,400)
IOF and IOC		(6,076)		(3,505)		(1,011)
Fines		(42,859)		(65,157)		-
Financial restatement		-		(24,197)		(8,649)
Updated Eletronuclear - account payable		(8,495)		-		-
Updated IAS 19 (Revised)		(10,568)		-		-
Other financial expenses		(56,446)		(60,394)		(94,596)
Total financial expenses		(549,586)		(607,380)		(575,348)
Exchange variation – assets		105,620		76,621		121,380
Exchange variation - liabilities		(123,380)		(75,546)		(140,284)
Total exchange variation		(17,760)		1,075		(18,904)
Total		44,247		161,474		(142,513)

36. PROFIT SHARING

The Company and its subsidiaries implemented a profit sharing program based on operating and financial goals previously defined, given that these goals come from the Group’s strategic planning up to each professional’s respective area, in addition to a behavioral assessment of each employee. In 2013, profit sharing amounted to R$ 3,811 (R$ 3,619 in 2012). The Group’s profit sharing amount summed up to the profit sharing amount of its subsidiaries totaled R$ 34,419 in 2013 (R$ 31,228 in 2012).

G-115

37. INSURANCE COVERAGE

The Company’s subsidiaries main assets in service are covered by an operating risk policy of Endesa Group, with amount in risk for material damages totaling R$ 5,131,246 , with a limit coverage for loss of profit of R$ 7,530,355 and a general indemnification limit, per loss, of R$112,925 for distribution companies, and R$ 1,129,250 for other companies. The Group also takes out civil liability insurance included in Endesa Corporate insurance program amounting to R$ 451,700 per loss or annual aggregate for the first risk, and amounting to R$ 1,129,250 per loss or annual aggregate for the second risk, specifically for CDSA. Both programs are valid for the period from November 01, 2013 to October 31, 2014.

At December 31, 2013, Endesa Brasil’s subsidiaries had the following insurance coverage:

Operating risk

Subsidiaries	Effective date	Insured amount	Maximum guarantee per loss
Ampla Energia	1/11/2013 to 10/31/2014	1,013,914	112,925
CDSA	1/11/2013 to 10/31/2014	1,447,652	1,129,250
CIEN	1/11/2013 to 10/31/2014	1,226,380	1,129,250
CGTF	1/11/2013 to 10/31/2014	691,730	1,129,250
COELCE	1/11/2013 to 10/31/2014	751,570	112,925
Civil liability
Subsidiaries	Effective date	Insured amount	Maximum guaranteeper loss
Ampla Energia	1/11/2013 to 10/31/2014	n/a	451,700
CDSA	1/11/2013 to 10/31/2014	n/a	451,700
CIEN	1/11/2013 to 10/31/2014	n/a	451,700
CGTF	1/11/2013 to 10/31/2014	n/a	451,700
COELCE	1/11/2013 to 10/31/2014	n/a	451,700

38. OTHER INFORMATION

Provisional Executive Order No. 627/2013

On September 17, 2013, Brazilian IRS Revenue Procedure (IN) No. 1,397 was disclosed and, on November 12, 2013, the Provisional Executive Order No. 627 (“MP 627”) was enacted, thus revoking the Transition Tax Regime (RTT) as from 2015, with the introduction of the new tax regime; (ii) amends Decree-Law No. 1,598/77 for computation of the corporate income tax, and legislation on social contribution tax (CSLL). The new tax regime provided for in MP 627 enters in force as from 2014, if so elected by the entity. Among the provisions of MP 627, we point out those approaching profit sharing and payment of dividends, interest on equity calculation basis and the equity pickup calculation during RTT term.

The Group prepared an analysis of the possible effects of MP 627 and IN 1397, and concluded that they have no significant effect on its operations and financial statements for year ended December 31, 2013, based on our best interpretation of the current wording of MP 627. The possible conversion of MP 627 into Law may lead to a different conclusion. The Group awaits definition of amendments to MP 627 to elect or not early adoption for year 2014.

G-116

39. SUBSEQUENT EVENTS

On January 14, 2014, subsidiary COELCE disclosed a material fact with the Brazilian Securities and Exchange Commission (CVM), informing that, at that date, its indirect controlling shareholders, Enersis S.A., a publicly-held company with head office in Santiago, Chile, at Calle Santa Rosa, No. 76, registered with Chile’s under the no. 175 (“Offeror”), in a Board of Directors’ meeting, held at said date, approved, together with Banco Itaú BBA S.A., as the intermediary entity (“Intermediary Entity”), the Voluntary Initial Public Offering for Acquisition of Shares (“OPA”) under the terms of CVM Rule No. 361 of March 5, 2002, as amended (“CVM Rule No. 361/02”).

Offeror, as informed to subsidiary COELCE, is inclined to acquire, during the OPA, up to all Common Shares (“Common Shares”), A-Class Preferred Shares (“A-Class Preferred Shares”), and B-Class Preferred Shares (“B-Class Preferred Shares”) issued by COELCE and traded in the market (together: Common shares, A-Class Preferred Shares and B-Class Preferred Shares, “OPA Shares”), corresponding, at the date of this material fact, to: (i) 3,086,975 (three million, eighty-six thousand, nine hundred and seventy-five) common shares, representing approximately 6.422% of the total common shares whose issuance is controlled by subsidiary COELCE and 3.965% of total equity capital of subsidiary COELCE; (ii) 26,454,018 (twenty-six million, four hundred and fifty-four thousand, and eighteen) A-Class preferred shares, representing approximately 93.634% of total A-Class preferred shares whose issuance is controlled by COELCE and 33.978% of total capital of subsidiary COELCE; and (iii) 1,534,662 (one million, five hundred and thirty-four thousand, six hundred and sixty-two) B-Class preferred shares, representing 100% of the total B-Class preferred shares whose issuance is controlled by COELCE and 1.971% of total equity capital of subsidiary COELCE.

The price requested by Offeror to holders of OPA shares is R$ 49.00 (forty-nine Brazilian reais) per OPA share, cash-only, in Brazilian currency (“Acquisition Price”). The acquisition price represents, according to the information provided by the Offeror, a premium of 20.1% on the weighted average price of A-Class preferred shares traded with BM&FBOVESPA at the end of 30 trade sessions until January 13, 2014.

The Voluntary OPA Auction took place on February 17, 2014, beginning at 16h00 (GMT-3).

According to the results, its indirect controlling shareholders, Enersis S.A. was able to add the 15.13% of COELCE’s equity, which now holds indirectly a 74% of the shares.

According to Brazilian regulations, the offer will be extended within 90 days only for holders of common shares, due to this series reached the two-thirds of the shares. This, as the regulations in the country stipulates that if an OPA achieved more than two-thirds of the shares, the OPA will be automatically extended by 90 days, whereas if achieved just one-third, but under two-thirds will be purchased pro-rata equivalent to one-third titles. Under this figure, it must purchase all the titles offered.

However, the series of common shares represent only 3.965% of the total capital of COELCE, which Enersis S.A. already has 3.81%. Therefore, under this new process, the indirect controlling shareholders, Enersis S.A., can increase its participation only in 0.15%.

The process is expected to be completed in 90 days, from February 17, 2014, pursuant to the terms of the notice and standards were purchased CVM.

G-117