ENDESA Posts a Net Income of Euro 3,182 Million in 2005, the Highest Figure Ever for the Company with an Increase of 154% Compar

ENDESA (NYSE:ELE)

   Results JANUARY-DECEMBER 2005

   On a pro forma basis without considering asset sales, 2005 net
income would have been Euro 1,841 million, an increase of 60% and
would still be the highest figure ever for the Company.

   All of ENDESA's businesses have achieved excellent results.

   --  Solid performance from the electricity business in Spain and
        Portugal, with a Euro 1,358 million net income, a 52.9% higher
        that 2004.

   --  Strong net income growth in Europe, totalling Euro 425 million
        (+151.5%) and Latin America with Euro 262 million (+106.3%).

   --  Total EBITDA for ENDESA rose to Euro 6,020 million and EBIT to
        4.244 million, with significant growth achieved: +33.2% and
        +49.1% respectively.

   --  Europe and Latin America represent 45.9% of total EBITDA,
        underscoring the company's importance as a multinational
        player.

   --  Total output was 185,264 GWh in 2005, a rise of 5.4%, and
        electricity sales reached 203,335 GWh, up 12.2% vs. 2004.

   With these results the targets presented in the Company's
Strategic Plan "ENDESA: Stronger business, greater value" can be
surpassed.

   --  Net income and EBITDA growth in 2005 was well above the
        committed targets.

   --  Financial leverage at year end 2005 (112%) was much better
        than the target set in the Strategic Plan (140%).

   --  Growth forecasts of main financial figures for 2006 confirm
        the objectives of the Strategic Plan can be clearly surpassed.

   --  The Company's Board of Directors has approved that it will
        propose to the General Shareholders' Meeting a total gross
        dividend against 2005 earnings of Euro 2.4 per share, with a
        final dividend of Euro 2.095 per share, payable on 3 July
        2006.

   Solid confirmation of ENDESA's higher value

   KEY FACTS AND FIGURES FOR THE PERIOD

   SHARP GROWTH IN NET INCOME IN ALL OF THE COMPANY'S BUSINESSES

   --  Electricity business in Spain and Portugal posted net income
        of Euro 1,358 million in 2005, an increase of 52.9%.

   --  Net income from the electricity business in Europe rose 151.5%
        to Euro 425 million.

   --  Net income from the electricity business in Latin America was
        Euro 262 million, up 106.3% compared to 2004.

   STRONG GROWTH IN KEY P&L ITEMS

   --  The gross margin advanced 23.8% to Euro 9,126 million.

   --  Gross operating profit (EBITDA) was Euro 6,020 million, a
        33.2% rise.

   --  Operating profit (EBIT) grew 49.1% to Euro 4,244 million.

   --  Cash flow from operations totalled Euro 4,209 million, 23.1%
        higher than in 2004.

   THESE RESULTS ARE WELL ABOVE THE TARGETS SET OUT IN THE 2004-2009
STRATEGIC PLAN PRESENTED TO THE MARKETS

   --  Full-year net income growth - 154% - exceeds the commitment
        made in the Strategic Plan presented to the markets on 3
        October 2005 in the document "ENDESA: stronger business,
        greater value", which set a target of 12% annual growth.

   --  Full-year EBITDA growth -33.2% - was greater than the
        commitment made in the Plan, which is between 10% and 11%
        annual growth.

   --  Financial leverage as of 31 December 2005 was 8 percentage
        points better than the forecast for the full year and 28
        percentage points better than the strategic target.

   --  Growth in net income and capital gains from the sale of Auna -
        Euro 1,341 million after tax - confirm the viability of the
        proposal to pay Euro 7,000 million in dividends to
        shareholders over five years.

   --  Therefore, results for 2005 are well above the targets set by
        the Strategic Plan, confirming that these targets can be
        clearly surpassed and thus ENDESA's higher value.

   IMPROVED FINANCIAL LEVERAGE

   --  Financial leverage stood at 112% at the end of 2005, down from
        151.2% at the beginning of the year.

   --  Net debt was Euro 18,281 million at the end of the year, below
        the figure of Euro 18,698 million at the beginning of 2005.

   ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL

   Solid performance in the context of a severe drought, high fuel
costs and insufficient allocation of CO2 emission rights

   --  Net income from the electricity business in Spain and Portugal
        increased by 52.9% and accounted for 42.7% of ENDESA's total
        net income.

   --  EBITDA grew by 32.1% and EBIT by 58.1%.

   --  Fixed costs fell by 4.4% in the fourth quarter of 2005 vs. 4Q
        2004, in line with the targets established in the Efficiency
        Improvement Plan.

   --  The effects of the drought and the rise in fuel costs have had
        less impact on ENDESA compared to its peers. The Company's
        better position is due to a more balanced generation mix than
        its competitors.

   Largest generator and top selling power company in Spain

   --  ENDESA has strengthened its leadership position in the Spanish
        electricity market in 2005. It remains the company with the
        largest market share in total generation and total electricity
        sales.

   --  The Company met 92.8% of its Spanish demand using its own
        output, a balance between generation and demand that gives it
        a clear competitive advantage over its competitors. This
        allows ENDESA to lower its exposure to risks arising from
        changes in rainfall patterns and fluctuations in wholesale
        prices.

   --  ENDESA's coal-fired plants achieved an availability rate of
        86.5% in 2005, playing an important role in securing
        electricity demand for the system.

   --  The CO2 emission rights deficit totalled Euro 185 million in
        2005, corresponding to a deficit of 8.5 million tonnes.

   Continued improvement in quality of supply

   --  Average interruption time improved by 25% at ENDESA in 2005
        (vs. 2004) in the distribution areas of mainland Spain
        supplied by the Company.

   --  In the islands, average interruption time improved by 9%
        without taking into account the exceptional effects of
        hurricane "Delta" which hit the Canary Islands at the end of
        November.

   Spain's utility with the largest investment levels

   --  ENDESA invested Euro 2,660 million in Spain and Portugal in
        2005, of which Euro 2,382 million, or 90%, was capex. This
        underscores ENDESA's status as Spain's utility with the
        largest investment levels.

   --  Euro 1,369 million of capex was spent in upgrading
        distribution facilities to increase quality and security of
        supply.

   --  The construction of the 400 MW Cristobal Colon CCGT plant in
        Huelva entered its final stage in the fourth quarter of 2005
        and construction of the 800 MW CCGT plant in As Pontes (La
        Coruna) also progressed according to schedule.

   --  Wind farms with a capacity of 149 MW came on stream in 2005
        and the Company currently has up to 462 MW under construction.

   A major competitor in the natural gas sector, with a total market
share of 12%

   --  ENDESA sold a total of 22,595 GWh in the Spanish natural gas
        market in 2005, which, together with the 22,222 GWh supplied
        to its own plants, represents a total market share of 12%.

   --  These figures underscore ENDESA's status as a major operator
        in the Spanish natural gas market, especially in specific
        regions, such as Catalonia, where it is the main competitor of
        the dominant operator

   ELECTRICITY BUSINESS IN EUROPE

   Sharp increases in main financial figures

   --  ENDESA strengthened its position in the European market
        outside of the Iberian system in 2005, consolidating its
        status as one of Europe's five largest electric utilities on
        the continent.

   --  In 2005 ENDESA's output in Europe outside the Iberian market
        stood at 33,749 GWh, larger than the total output of its
        third-largest competitors in Spain and equivalent to half the
        output of its second-largest competitor.

   --  Net income from the Company's European electricity business
        increased by 151.5% and accounted for 13.4% of ENDESA's total
        net income.

   --  EBITDA stood at Euro 887 million, up 65.8% vs. 2004, and EBIT
        at Euro 618 million, an increase of 67%.

   Debt reduced by Euro 837 million

   --  Net financial debt from ENDESA's electricity business in
        Europe stood at Euro 1,286 million at 31 December 2005,
        compared to Euro 2,123 million at the beginning of the year -
        a reduction of Euro 837 million, or 39.4%.

   Endesa Italia: sharp increases in main financial and operating
figures

   --  EBITDA from Endesa Italia was Euro 694 million, 36.1% higher
        than in 2004, while EBIT stood at Euro 542 million, a 41.9%
        increase.

   --  Electricity generation rose by 12% in 2005 and sales by 17.8%.

   --  Work continued on repowering Endesa Italia's thermal plants.
        In 2005, the conversion of Ostiglia's group 3 and Tavazzano's
        group 6 to a combined cycle was completed. Two turbogas groups
        at the Fiume Santo plant also came on stream.

   SNET: strong results, progress in the Industrial Plan and dividend
payment

   --  The French generator contributed Euro 179 million to the
        European business EBITDA and Euro 62 million to EBIT in 2005.

   --  Further progress was made on its Industrial Plan in 2005.
        Achievements included a 23% reduction of its fixed operating
        and maintenance costs, the merger with the Setne and Setcm as
        well as the sale of its 23.62% stake in Sechilienne-Sidec.

   --  SNET paid out dividends for the first time in 2005. The
        interim dividend was Euro 21.2 million.

   ENDESA wins tender for Dolna Odra in Poland

   --  ENDESA won the tender for Dolna Odra, owner of three plants
        with an installed capacity of 1,960 MW, within the framework
        of the privatisation of this company.

   --  The European Commission authorised the operation on 9 January
        2006; the transaction will be completed once the agreement
        with its workers has been finalised.

   ELECTRICITY BUSINESS IN LATIN AMERICA

   Leveraging on economic recovery: sharp increases in net income,
EBITDA and EBIT

   --  ENDESA's Latin American operations recorded a 106.3% increase
        in net income in 2005, contributing 8.2% to the Company's
        total net income.

   --  EBITDA grew 23.4% vs. 2004 and EBIT by 30.6%.

   --  Increases in EBITDA and EBIT were posted both in the
        generation and transmission business as well as the
        distribution business.

   Increase in operating magnitudes and significant operating
improvements

   --  ENDESA's Latin American companies were able to profit from the
        economic recovery and organic growth of the markets in which
        they operate, increasing output and sales by 5.1% and 5.6%,
        respectively.

   --  The generation margin stood at 21.1 $US/MWh, an increase of
        9.9% compared to 2004, and VAD for the distribution business
        stood at 30.3 $US/MWh, an increase of 28.9%.

   Cash returns in line with the targets established in the Strategic
Plan

   --  Cash returns for ENDESA's Latin America business totalled Euro
        533 million in 2005 in dividend payments and capital
        reductions to Group and minority shareholders.

   Enersis and Endesa Chile: strong performance on the financial
markets and improved credit ratings

   --  Enersis and Endesa Chile registered increases in their
        respective share prices of 18.7% and 55.1% on the Santiago de
        Chile Stock Exchange in 2005. On the New York Stock Exchange,
        Enersis registered a 29.1% increase in its share price while
        shares in Endesa Chile rose 67.9%.

   --  In January, Moody's Investors Service raised its credit rating
        for Enersis and Endesa Chile from Ba2 to Ba1 stable outlook
        and, in October, Moody's and Standard & Poor's improved the
        outlook again, from stable to positive.

   Regulatory advances and optimisation of organisational structure

   --  The regulatory frameworks of the Latin American countries in
        which ENDESA's subsidiaries operate continued to improve in
        2005, helping to create a better environment for these
        companies to demonstrate their profitability and growth
        potential.

   --  Within the framework of its restructuring initiative for this
        business, ENDESA Brasil, S.A. will act as the holding company
        for the Group's shareholdings in Brazil. It has also agreed to
        merge its Chilean subsidiaries Chilectra and Elesur and its
        Peruvian subsidiaries Edegel and Etevensa.

   New Capacity

   --  In 2005 Endesa continued the construction of the 377 MW San
        Isidro II CCGT and of the 32 MW Palmucho hydro facility.

   --  In Peru, work is continuing on the reconversion of Etevensa I
        into a CCGT and on the construction of the second Etevensa II
        CCGT.

   TELECOMS

   Sale of the Auna and Smartcom stakes

   --  ENDESA sold a 27.7% stake in telecoms operator Auna in 2005,
        achieving a Euro 1,115 million net capital gain. In December
        2005 ENDESA formalised the sale of its remaining stake in Auna
        - 5,01% -, which will represent a net capital gain of Euro 171
        million in the first quarter of 2006.

   --  In August ENDESA sold 100% of its Chilean mobile telephony
        subsidiary Smartcom SA for Euro 408 million, achieving a net
        gain of Euro 51 million.

   2005 DIVIDEND PROPOSAL

   --  The Company's Board of Directors has approved that it will
        propose to the General Shareholders' Meeting a gross dividend
        against 2005 earnings of Euro 2.4 per share - with a final
        dividend of Euro 2.095 per share payable on 3 July 2006 - or a
        total of Euro 2,541 million.

   --  This amount includes the interim dividend paid last 2 January,
        as well as the Euro 1,341 million net capital gains obtained
        during 2005 from the disposal of non-core assets.

   CONSOLIDATED RESULTS

   The highest net income figure in the history of the Company

   ENDESA reported a net income of Euro 3,182 million in 2005, the
highest in its history, a rise of 154% compared to 2004.
   Even stripping out the effects of the capital gains obtained in
2005 from the sale of -non-core assets, net income would have risen
significantly - 60% compared pro forma with 2004 - and would still
represent, at Euro 1,841 million, the highest ever for the Company.
-0-
*T
NET INCOME EVOLUTION
-----------------------------------------------------------------
                                                % of      % of 
                             Euro     % Chg    total NI  total NI
                           million   vs. 2004   2004      2005
-----------------------------------------------------------------
Spain and Portugal           1,358      52.9      70.9      42.7
-----------------------------------------------------------------
Rest of Europe                 425     151.5      13.5      13.4
-----------------------------------------------------------------
Latin America                  262     106.3      10.1       8.2
-----------------------------------------------------------------
Other businesses             1,137   1,547.8       5.5      35.7
-----------------------------------------------------------------
TOTAL                        3,182       154     100.0     100.0
-----------------------------------------------------------------
*T

   All of ENDESA's electricity businesses recorded strong net income
growth: with increases of 52.9% in Spain and Portugal, 151.5% for
Europe and 106.3% for Latin America.
   The distribution of net income between the different electricity
businesses is balanced, reinforcing the economic sense behind ENDESA's
geographical diversification strategy and the Company's multinational
character.

   Strong growth in generation (+5.4%) and electricity sales (+12.2%)

   ENDESA's industrial activity registered strong growth in 2005,
with a 5.4% increase in generation and 12.2% in total electricity
sales. These increases were particularly high in its European market
outside Spain and Portugal.
-0-
*T
GENERATION AND ELECTRICITY SALES
-----------------------------------------------------------------
                              Generation            Sales
-----------------------------------------------------------------
                            GWh    % chg vs     GWh    % chg vs
                                      2004                2004
-----------------------------------------------------------------
Spain and Portugal          93,625      (2.1)  100,868       4.3
-----------------------------------------------------------------
Rest of Europe              33,749      34.7    47,221      46.8
-----------------------------------------------------------------
Latin America               57,890       5.1    55,246       5.6
-----------------------------------------------------------------
TOTAL                      185,264       5.4   203,335      12.2
-----------------------------------------------------------------
*T

   The fall in generation in Spain and Portugal was due to the
extraordinary shutdown of some plants for part of the year, mainly as
a result of inspection, maintenance and/or reconversion work.
   Generation rose sharply in Europe (+34.7%) due to an increase in
generation at Endesa Italia now that its repowering programme is close
to completion, as well as the contribution from French subsidiary
SNET, which at the 2004 results only included activity for four months
as it was fully consolidated since 1 September 2004.
   In Latin America the growth in generation (+5.1%) reflects the
higher utilisation rate to meet rising demand, the contribution from
the Ralco hydro plant in Chile in its first full year in operation and
the newly converted open cycle gas generator at Etevensa in Peru.
These facilities came on stream in the final months of 2004.

   Generation/sales balance

   ENDESA met 91.1% of its total electricity sales in 2005 from its
own output. This balanced situation between production and demand
should considerably reduce risk of its electricity business. This is a
significant competitive advantage in the Spanish market, where the
Company met 92.8% of demand from its own output.
   Active management of the generation/sales balance reduces the
company's strategic exposure to fluctuations in wholesale prices,
particularly important at times of high prices, as is presently the
case.

   Revenue growth comfortably outstrips costs

   The Company's total sales in 2005 grew 29.6% vs. 2004 to Euro
17,508 million. Sales growth was greater by value than volume, as
prices were raised to offset the increase in costs.
   The growth in revenues covered both fuel costs and energy
purchases, which were up by 31.4% and 42.9% respectively, as well as
the cost of CO2 emission rights.

   Significant growth in Gross Margin, EBITDA and EBIT

   As revenues grew ahead of costs, the company reported significant
rises in Gross Margin (+23.8%), EBITDA (+33.2%) and EBIT (+49.1%).
-0-
*T
                   Gross margin         EBITDA             EBIT
----------------------------------------------------------------------
                    Euro % chg vs.  Euro   % chg vs.  Euro   % chg vs.
                  million   2004   million    2004   million    2004
----------------------------------------------------------------------
Spain and
 Portugal          5,202     19.5    3,266     32.1    2,264     58.1
----------------------------------------------------------------------
Rest of Europe     1,223     47.4      887     65.8      618     67.0
----------------------------------------------------------------------
Latin America      2,698     23.8    1,878     23.4    1,376     30.6
----------------------------------------------------------------------
Other businesses       3       NA      (11)      NA      (14)      NA
----------------------------------------------------------------------
TOTAL              9,126     23.8    6.020     33.2    4,244     49.1
----------------------------------------------------------------------
*T

   The Company's electricity businesses outside of Spain and Portugal
accounted for 45.8% of EBITDA and 46.8% of EBIT, underscoring its
importance as a multinational player.

   Financial results: Euro 1,252 million

   ENDESA reported negative financial results of Euro 1,252 million
for 2005, a 9.2% improvement over 2004.
   Net financial expenses totalled Euro 1,257 million, 15.6% more
than in 2004, affected by the increase of the financial costs related
to provisions, which reflect exclusively an accounting re-statement.
   In particular, the reduction in long-term interest rates between
31 December 2004 and the same day of 2005 result in a rate of 3.588%
for the calculation of pension obligations and restructuring costs vs.
the 4% used on 2004, implying a provision of Euro 111 million higher,
which translates into a higher financial expense for 2005.
   It should be noted that financial expenses for 2005 include Euro
60 million for the cost of preferred shares, which in 2004, as IAS 32
was not in force, were considered as minorities, which meant that
their cost was not registered as financial expenses.
   Once these effects have been deducted, the Group's financial cost
was Euro 1,146 million, 0.1% less than in 2004.

   Cash flow from operating activities: Growth of 23.1%

   Cash flow from operating activities was Euro 4,209 million in
2005, a 23.1% increase vs. 2004. All the Company's electricity
businesses have reported significant growth under this heading.
-0-
*T
CASH FLOW
----------------------------------------------------------------------
                                         Euro million   % chg / 2004
----------------------------------------------------------------------
Spain and Portugal                          2,669           34.9
----------------------------------------------------------------------
Rest of Europe                                586           14.7
----------------------------------------------------------------------
Latin America                               1,180           25.3
----------------------------------------------------------------------
Other businesses                             (226)            NA
----------------------------------------------------------------------
TOTAL                                       4,209           23.1
----------------------------------------------------------------------
*T

   Investments: Euro 3,640 million, 73.1% in Spain and Portugal

   ENDESA invested a total of Euro 3,640 million in 2005. Of this
figure, Euro 3,342 million was invested in tangible and intangible
assets and the remaining Euro 298 million in financial investments.
   Of the total investment, 73.1% was invested in the Spanish and
Portuguese business.
   ENDESA is also entitled to Euro 1,581 million to cover the deficit
in revenues from regulated activities in Spain.

   Financial structure: improved leverage

   ENDESA's net debt was Euro 18,281 million at 31 December 2005,
Euro 417 million lower than at the beginning of the year.
   This decrease took place despite the Euro 920 million increase due
to the euro's depreciation vis-a-vis other currencies in which
ENDESA's debt - and that of its subsidiaries, mainly Enersis Group -
is denominated. Flows generated during the year have therefore allowed
debt to be reduced by Euro 1,337 million.
   The breakdown of ENDESA'S debt by business line at 31 December
2005 was as follows:
-0-
*T
BREAKDOWN BY BUSINESS OF ENDESA'S NET DEBT
----------------------------------------------------------------------
                                       Euro million
----------------------------------------------------------------------
                               31-12-05  01-01-05     Change  % Chg
----------------------------------------------------------------------
Electricity business in Spain
 and Portugal                    11,461     9,586     1,875      19.6
----------------------------------------------------------------------
Electricity business in Europe    1,286     2,123      (837)    (39.4)
  Endesa Italia                     815     1,293      (478)    (37.0)
  Other                             471       830      (359)    (43.3)
----------------------------------------------------------------------
Electricity business in Latin
 America                          6,109     5,350       759      14.2
  Enersis Group                   5,207     4,081     1,126      27.6
  Other                             902     1,269      (367)    (28.9)
----------------------------------------------------------------------
Other businesses                   (575)    1,639    (2,214)   (135.1)
----------------------------------------------------------------------
TOTAL                            18,281    18,698      (417)     (2.2)
----------------------------------------------------------------------
*T

   The average cost of ENDESA's total debt was 5.46% in 2005, while
the cost of the debt corresponding to Enersis Group was 9.37%.
Stripping out the debt of the Enersis Group, the average cost of
ENDESA's debt was 4.05% in 2005.
   The breakdown of the debt by currency and interest rate at 31
December 2005 was as follows:
-0-
*T
STRUCTURE OF ENDESA'S NET DEBT
----------------------------------------------------------------------
                      ENDESA
                   and direct           Enesis            Total
                   subsidiaries         Group          ENDESA group
----------------------------------------------------------------------
                  Euro     % of     Euro     % of     Euro     % of
                 Million   total   Million   total   Million   total
----------------------------------------------------------------------
Euro              12,853     98.3        2       --   12,855     70.3
----------------------------------------------------------------------
Dollar               221      1.7    2,695     51.8    2,916     16.0
----------------------------------------------------------------------
Other currencies      --        -    2,510     48.2    2,510     13.7
----------------------------------------------------------------------
Total             13,074    100.0    5,207    100.0   18,281    100.0
----------------------------------------------------------------------
Fixed rate         9,793     74.9    4,499     86.4   14,292     78.2
----------------------------------------------------------------------
Hedged             1,811     13.9      148      2.8    1,959     10.7
----------------------------------------------------------------------
Variable           1,470     11.2      560     10.8    2,030     11.1
----------------------------------------------------------------------
TOTAL             13,074    100.0    5,207    100.0   18,281    100.0
----------------------------------------------------------------------
Avg. life
 (years)               5.3               5.5               5.4
----------------------------------------------------------------------
*T

   The average life of the ENDESA Group's debt was 5.4 years at the
end of 2005.
   ENDESA enjoys a high degree of protection against interest-rate
risk, since 89% of all its debt is either fixed-rate or hedged.
   At December 31 2005 ENDESA in Spain and its direct subsidiaries,
excluding Enersis, has liquidity of Euro 6,338 million, of which Euro
4,266 million corresponded to undrawn sums: Euro 2,766 million in
unconditional credit lines and Euro 1,500 million corresponding to the
syndicated loan transaction completed on 22 April 2005. These balances
are sufficient to cover maturities falling due in the next 39 months
for this group of companies. The Enersis group held cash and cash
equivalents totalling Euro 542 million and Euro 321 million in
undrawn, unconditional credit lines, covering debt maturities for the
next ten months.
   At 31 December 2005, ENDESA's shareholders' equity was Euro 16,327
million, an increase of Euro 3,960 million since the start of the
year. This increase lowered ENDESA's gearing to 112% at 31 December
2005, from 151.2% at the start of the year.
   As a result of Gas Natural's take over bid for ENDESA, the ratings
agencies Standard & Poor's and Fitch Ratings decided to place ENDESA's
credit rating under review for a possible downgrade, while Moody's
changed its rating outlook from stable to negative. These changes were
due to the negative impact the operation would have, were it to go
ahead, on the Company's financial position.
   As a result, at 18 January 2006, ENDESA's debt has long-term
credit ratings of A from Standard & Poor's and Fitch, under review for
possible downgrades, and A3 from Moody's, with a negative outlook.

   Disposals

   In line with what was laid out in the Strategic Plan presented to
the markets, ENDESA sold in 2005 several non-core assets (telecoms
assets, real estate assets, etc.) for a total of Euro 3,184 million,
achieving capital gains of Euro 1,341 million.

   Disposal of Auna

   ENDESA sold in 2005 27.7% of Spanish telecoms operator Auna for
Euro 2,221 million in 2005, generating an after-tax capital gain of
Euro 1,115 million.
   The 27.7% was sold to France Telecom via an agreement signed on 29
July 2005, which was formalised on 8 November 2005 once it had been
sanctioned by the European authorities.
   On 30 December 2005 the sale of the remaining 5.01% of Auna was
sold to Deutsche Bank for Euro 378 million. ENDESA retains the right
to receive 90% of the sale price above Euro 361 million (capitalised
annually at 4,5%) of the first transaction Deutsche Bank effects from
8 November 2008. The after-tax capital gain of Euro 171 will not be
booked until the first quarter of 2006, as the period to exercise the
pre-emptive rights of the remaining shareholders had not expired.

   Other disposals

   ENDESA's asset disposal strategy has remained unchanged in 2005,
generating gross capital gains of Euro 213 million in addition to the
gains from the sale of Auna.
   The main disposal in 2005 was the sale of 100% of Smartcom to the
Mexican operator America Movil for US$ 505 million (Euro 408 million),
generating an after-tax gain of Euro 51 million.
   It has also continued with the disposal of real estate assets,
obtaining Euro 122 million, with a gross capital gain of Euro 105
million.

   2005 DIVIDEND PROPOSAL

   The Company's Board of Directors has approved that it will propose
to the General Shareholders' Meeting a gross dividend against 2005
earnings of Euro 2.4 per share - with a final dividend of Euro 2.095
per share payable on 3 July 2006 - or a total of Euro 2,541 million.
   This amount includes the interim dividend paid last 2 January, as
well as the Euro 1.2666 per share derived from the Euro 1,341 million
net capital gains obtained during 2005 from the disposal of non-core
assets.
   This dividend represents a 79.9% pay-out over net income. After
taking out the above mentioned net capital gains, the pay-out ratio
would be 65.2%.
   The proposed dividend represents, net of the portion derived from
the net capital gains of asset disposals, an increase of 53.5%
compared to the dividend paid on 2004.

   ACHIEVING THE OBJECTIVES OF THE 2004-2009 STRATEGIC PLAN

   On 3 October 2005, in light of the significant progress made in
achieving its objectives, ENDESA updated its Strategic Plan in a
presentation to the markets entitled "ENDESA: stronger business,
greater value", in which it set forth its milestones for the 2004-2009
period.
   The Company's priority for this period is shareholder return
driven by strong organic growth in all its businesses. The management
team is, at the same time, more committed than ever to meeting its
targets.

   The Company's key financial targets for the Group include:

   --  Compounded annual net income growth in excess of 12%.

   --  Compounded annual EBITDA growth of between 10% and 11%.

   --  Financial leverage of less than 140%.

   We note that these targets were set assuming a conservative
regulatory scenario. Since the Strategic Plan was presented,
regulatory changes implemented or announced point to a more benign
regulatory environment than initially envisaged, which will allow the
Company to clearly surpass said targets.
   On the basis of meeting these targets, ENDESA is planning to
implement a dividend policy which prioritises shareholder remuneration
along the following lines:

   --  Growth in ordinary dividends in excess of 12%, i.e., in line
        with expectations for bottom line growth.

   --  Distribution of 100% of capital gains generated on disposals
        of non-core assets.

   The implementation of this dividend policy, which will be put
forward for approval at the next General Shareholders' Meeting, would
entail the distribution of dividends of Euro 7 billion to shareholders
over a five year period.
   In order to demonstrate its confidence in the credibility of these
targets, the Company's management team will propose at this General
Shareholders' Meeting that its variable compensation be 100%-linked to
the performance of ENDESA's share price, in addition to committing to
reinvesting 50% of this compensation in Company shares.
   The 2005 earnings results have surpassed by far the targets for
the key financial variables mentioned above:

   --  154% increase in net income, significantly above the minimum
        annual target set at 12%.

   --  EBITDA rose 33.2%, also beating the 10-11% target mentioned
        above.

   --  The financial leverage ratio at year-end stood at 112%, i.e.,
        28 points less than the level called for in the Strategic
        Plan.

   --  Euro 1,341 million of net capital gains obtained from the
        disposal of non-core assets

   This amount, together with the dividend from ordinary activities,
leads to a dividend payable of Euro 2,541 million, subject to the
approval of the General Shareholders' Meeting, and would represent
36.3% of the target set for the 2004-2009 period.
   In sum, these results and the performance shown by the Company's
businesses in 2005, despite the very challenging environment currently
being faced by the Spanish electricity market, underscore the
credibility of the Strategic Plan, particularly the proposed dividend
policy.
   On the other hand, the forecasts currently available on the
evolution of the main economic figures of the Company for 2006
indicate that these targets can be surpassed.

   RESULTS BY BUSINESS LINE

   ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL

   Key operating facts and regulatory developments of the year

   High operating efficiency

   Throughout 2005 ENDESA maintained its leading position in the
Spanish electricity market, with a 38.1% market share in electricity
generation in the ordinary regime, 43.1% in distribution, 37.4% in
sales to deregulated customers and 41.1% in total sales to final
customers.
   Output totalled 93,625 GWh, 2.1% less than in 2004, primarily due
to downtime at group 4 at the As Pontes facility which was being
converted to imported coal and also at the Vandellos nuclear plant
between March and August for technical reasons.
   ENDESA continued to improve its operating efficiency in 2005 in
line with the Improvement Efficiency Plan put in place last June, the
results of which are now being seen. In the fourth quarter of 2005
fixed costs fell 4.4% compared to the fourth quarter of 2004.
   Also in the fourth quarter of 2005, ENDESA launched a pioneering
initiative for purchasing CO2 emission rights. The target is to obtain
15 million tonnes by 2012 by means of projects developed under the
flexible mechanisms provided for in the Kyoto Protocol: Joint
Implementation and Clean Development Mechanisms --. Within this
initiative we highlight the agreement signed with the Chinese company,
Huaneneg Group, to acquire Emission Reduction Certificates generated
by three wind farms under its ownership.

   Progress in the New Capacity Plan

   ENDESA continued to make progress throughout 2005 on its New
Capacity Plan.
   The 400 MW Cristobal Colon combined cycle plant (Huelva) was in
the final stages of construction by year end. It is scheduled to come
on stream in the first months of 2006. In addition, construction
continued on the 800 MW combined cycle facility at the As Pontes plant
(La Coruna) and on converting group 3 of this plant to imported coal.
Furthermore, it is worth mentioning that the Besos 800MW new combined
cycle has been included in the Catalonian Energy Plan
   In addition, the Company added in 2005 a total capacity of 149 MW
of wind farms to its operations and acquired 100% of the Portuguese
company, Finerge Gestao de Proyectos Energeticos, S.A. (Finerge),
umbrella company for a holding which operates wind farms and
co-generation plants in Portugal, with total capacity of 107 MW and
projects underway to bring installed capacity up to 320 MW by 2007.

   High growth rates in ENDESA's distribution markets

   In 2005 ENDESA's total demand was 111,802 GWh. This figure
represents a growth of 5.3% compared to the previous year and confirms
the significant growth prospects of the Spanish market.
   The number of customers served by ENDESA in the regulated market
increased by 249,263 in 2005. ENDESA ended the year with 998,154
customers in the deregulated market.

   Improvement in quality of supply

   ENDESA significantly strengthened its Quality Plan, in place for
the last few years, in the second half of the year, contributing to
the substantial improvement in service quality of supply registered in
2005, particularly noteworthy if we consider that this was achieved
against a scenario of strong growth in demand.
   ENDESA's system average interruption duration index (SAIDI or
TIEPI) for 2005 was 25% better than in 2004 in the mainland markets
served by the Company.
   The same index for non-mainland markets, stripping out the effects
of Hurricane Delta which hit the Canary Islands at the end of
November, improved 9%.
   ENDESA's retention rate for customers switching to the deregulated
market was 87.6% in 2005, bettering all its competitors, reflecting a
high degree of loyalty towards the Company.

   Net income in the electricity business in Spain and Portugal: up
52.9%

   Net income was Euro 1,358 million in 2005, an increase of 52.9% on
2004, contributing 42.7% to the Company's overall bottom line.

   EBIT: Euro 2,264 million (+58.1%)

   EBIT generated by the electricity business in Spain and Portugal
amounted to Euro 2,264 million in 2005, up 58.1% compared to 2004.
   Revenues grew 31.8% to Euro 8,761 million, primarily due to the
increase in sales prices to final customers, particularly higher
wholesale prices.
   The increase in sales was sufficient to offset the sharp rise in
fuel costs driven by higher prices and volumes, and the net cost of
the CO2 emission rights deficit.
   Low rainfall, higher fuel costs and the cost of funding the CO2
emission rights deficit meant that average generation pool prices were
up 75.1%, a relatively high figure as mentioned earlier.
   The limited increase in the electricity tariff, just 1.7%, was
insufficient to meet the incremental system costs, particularly
generation costs, given the pool price levels. This resulted in a
sector-wide shortfall in revenues in the regulated market, a tariff
deficit, of an estimated Euro 3,580 million, Euro 1,581 million of
which is financed by ENDESA. The company has booked this amount as a
financial asset, since their recovery is guaranteed pursuant to Royal
Decree this amount 1556/2005, dated 23 December, which establishes the
electricity tariff for 2006.
   The impact of low rainfall and higher fuel costs was more limited
for ENDESA as the Company enjoys a more balanced generation mix than
its competitors and has managed to keep rising costs under control
thanks to its fuel management policy. In fact, fuel costs at the
Company's combined cycle operations are lower than the sector's
average.
   The table below shows the breakdown of EBIT for ENDESA's business
in Spain and Portugal.

   Revenues: up 38%

   Revenue at this business unit totalled Euro 9,274 million in 2005,
up 38% compared to 2004.
   Of this amount, revenues accounted for Euro 8,761 million, 31.8%
higher than in 2004.
-0-
*T
SPAIN AND PORTUGAL REVENUES
----------------------------------------------------------------------
                                       Euro million
----------------------------------------------------------------------
                                2005      2004      Change    % Chg
----------------------------------------------------------------------
Mainland generation under Ordinary Regime:
----------------------------------------------------------------------
       Sales to deregulated
        customers                 1,487     1,247       240      19.2
----------------------------------------------------------------------
       Supply to regulated
        customers                 3,012     1,891     1,121      59.3
----------------------------------------------------------------------
Special Regime                      240       121       119      98.3
----------------------------------------------------------------------
Regulated revenues from
 distribution                     1,602     1,564        38       2.4
----------------------------------------------------------------------
Non-mainland generation           1,548     1,004       544      54.2
----------------------------------------------------------------------
Coal CTC                             22        75       (53)    (70.7)
----------------------------------------------------------------------
Technology CTC                       --       118      (118)   (100.0)
----------------------------------------------------------------------
Supply to deregulated
 customers outside Spain            220       170        50      29.4
----------------------------------------------------------------------
Regulated revenues from gas
 distribution                        39        36         3       8.3
----------------------------------------------------------------------
Gas supply                          326       160       166     103.8
----------------------------------------------------------------------
Other                               265       262         3       1.1
----------------------------------------------------------------------
TOTAL                             8,761     6,648     2,113      31.8
----------------------------------------------------------------------
*T

   Mainland generation

   In 2005, demand for electricity in the Spanish mainland system as
a whole grew by 4.6%. Ordinary Regime generation increased 3%, whilst
Special Regime increased 10.4%.
   ENDESA's mainland electricity output totalled 77,691 GWh over the
same period, 3.8% lower than in 2004 as a consequence of two factors:
the Vandellos plant was down between March and August for technical
reasons, and group 4 at the As Pontes plant was offline due to its
conversion to imported coal, work which was completed at the beginning
of August. All groups at this plant will be reconverted by 2008.

   ENDESA's Renewable/CHP output rose 19.6% in 2005 compared to 2004
to 2,120 GWh, higher than the rest of the sector.

   Comparative advantage of ENDESA's generation mix

   A comparison of the performance of ENDESA's ordinary regime
mainland production structure and that of the rest of the sector in
2005 underscores the strength of the Company's generation mix and its
greater stability in the event of sudden changes in rainfall rates
common in Spain.
   ENDESA's hydro output fell by 27.5% in 2005 vs. 2004, compared to
a 42.3% decline for the rest of the sector, while industry-wide
thermal production rose by 32.2% vs. an increase of just 5.2% at
ENDESA.

   Contribution by the coal plants to meeting electricity demand

   The important role played by ENDESA's coal plants in meeting
Spanish electricity demand was highlighted again in 2005, a year
marked by low rainfall.
   The utilisation rate at these plants was 86.5% in response to
system requirements, proving that, in spite of the new combined cycle
and wind farm capacity coming online in recent years, coal plants are
still indispensable to meet the country's electricity requirements.
   Specifically, ENDESA's coal-fired plants covered 15% of mainland
demand in 2005.

   Growth in ENDESA's sales to the pool

   ENDESA's sales to the pool totalled Euro 4,940 million in 2005,
67.1% higher than in 2004 due to an 79.6% rise in the average pool
price, including the capacity payment.
   The increase in fuel costs, expenses associated with the CO2
emission rights deficit and lower utilisation rates at the
hydroelectric plants caused by the drought were the main factors
driving this increase.
   The average pool price in 2005, including capacity payments, was
Euro 60.6 per MWh vs. Euro 33.8 per MWh in 2004.
   ENDESA's supply and generation subsidiaries acquired energy from
the pool for a total of Euro 1,928 million. These purchases were
offset by the energy sold by the Company to the pool. The markets and
time bands were the same in both cases so that the purchase matched
the selling price.
   Sales to the pool are offset by purchases made by the supply and
generation subsidiary. The pool sales recorded in the consolidated
income statement for 2005 therefore totalled Euro 3,012 million.

   ENDESA Renewable/CHP generation

   Special Regime companies fully consolidated by ENDESA produced
2,120 GWh in 2005, primarily using renewable energies, which
represents an increase of 19.6%. Additionally, ENDESA has holdings in
other Special Regime companies which generated 3,850 GWh in 2005.
   Revenues from sales of Renewable/CHP energy generated by
consolidated companies totalled Euro 240 million, 98.3% more than in
2004, driving the generation business' EBIT to Euro 100 million, up
185.7% versus 2004.

   Supply to deregulated customers

   ENDESA had 998,154 deregulated customers at year end. Of these,
942,082 correspond to the mainland deregulated market, 53,686 are from
the non-mainland systems and 2,386 are from European deregulated
markets.
   ENDESA's sales to these customers totalled 36,773 GWh in 2005, up
18.7% on 2004. Of this amount, 32,537 GWh were sold on the Spanish
deregulated market, an increase of 18.7%, and 4,235 GWh on other
deregulated European markets, representing a growth of 18.8%.
   Revenues from supply to deregulated customers in Spain totalled
Euro 1,605 million, a 23.6% increase on 2004. Of this amount, Euro
1,487 million corresponded to the mainland deregulated market and Euro
118 million to the non-mainland market.
   Lastly, revenues from supply to deregulated European markets other
than Spain were Euro 220 million, a growth of 29.4%.

   Distribution

   ENDESA distributed 111,802 GWh of electricity in the Spanish
market in 2005, a 5.3% increase on the previous year.
   Revenues from regulated distribution activities totalled Euro
1,602 million, up 2.4% on 2004. This rise is not proportionate to the
investment effort made both in operations and maintenance required to
increase the security and quality of supply.
   Consequently, in order to attain this objective that is shared by
all the agents in the electricity market, and in which ENDESA is
playing a particularly significant role (having invested Euro 1,369
million in 2005) new regulations governing distribution must recognise
this effort via an adequate remuneration.
   ENDESA supplied 64,095 GWh to customers on the regulated Spanish
market in 2005. In accordance with IFRS, however, its turnover on this
business was not booked as revenue, as the distribution business' sole
income is the compensation provided for within the electricity tariff.
The rest of the turnover merely corresponds to costs incurred and
passed on.

   Non-mainland generation

   ENDESA's 2005 output in non-mainland systems was 13,814 GWh, 5%
more than in 2004. Sales rose to Euro 1,548 million, including
compensations for extra costs of these systems.
   Royal Decree 1747/2003 governing island and other non-mainland
electricity systems recognises that generation in these systems is
subject to higher costs than on the mainland, owing to the larger
reserve margin required, the extra cost of the specific technologies
used as well as higher fuel costs.
   The Royal Decree lays down the general principles that must be
applied to determine compensation for these specific circumstances.
The exact methodology for quantifying this compensation has still to
be developed, although a draft Ministerial Order has been prepared by
the Ministry for Industry and sent to the National Energy Commission
(CNE) which in turn issued a report on its findings.
   ENDESA's 2005 accounts include incremental revenue of Euro 212
million corresponding to the non-mainland systems' extra costs for
2001-2004. ENDESA has booked as an asset the amount approved by the
CNE in its report to the Ministry of Industry. This figure is less
than would have been obtained by applying the Ministerial Order draft
which was prepared by the Ministry of Industry.
   In addition, a revenue of Euro 177 million has been registered,
corresponding to the additional compensation received in the 2005
tariff to cover the extra-costs for this year. This amount has been
calculated following the same methodology used by the CNE in its
report which calculates the 2001-2004 compensations.

   Technological CTCs and deficit on regulated revenues

   As previously mentioned, regulated revenues in 2005 were not
sufficient to offset system costs, generating an estimated deficit of
Euro 3,580 million. According to the provisions of Royal Decree Law
5/2005 of 11 March, ENDESA must contribute 44.16% of the total amount
of this deficit (Euro 1,581 million).
   Royal Decree 1556/2005, dated 23 December, which establishes the
electricity tariff for 2006, sets forth that ENDESA has the right to
the total recovery of the financed amounts, without prejudice to the
specific repayment method which will be established by a further
governmental Royal Decree on 1 July 2006.
   For this reason, ENDESA's accounts at 31 December 2005 include a
financial asset of Euro 1,581 million to reflect its right to recover
its share of the regulated revenues deficit.
   ENDESA'S technological CTC revenues totalled Euro 118 million in
2005.

   Gas distribution and supply

   ENDESA sold 21,134 GWh of gas in 2005 through consolidated
companies, a 46.5% increase compared to the previous year. Of this
amount, 18,558 GWh were sold on the deregulated market, an increase of
58.2%, and 2,576 GWh on the regulated market, 4.5% less than in 2004.
   ENDESA's equity accounted gas investees sold 1,461 GWh of gas on
the regulated market. Therefore, total sales in the regulated market
were 4,037 GWh, down 1.5%. With regards to distribution, ENDESA
distributed a total 5,713 GWh in the regulated gas market, a growth of
18% compared to 2004.
   The 22,595 GWh sold in both the deregulated and regulated markets,
together with the 22,222 GWh supplied to ENDESA's own generation
plants, amount to a total of 44,817 GWh, implying a 12% market share.
   Revenues from gas sales in the deregulated market in 2005 totalled
Euro 326 million, representing growth of 103.8% compared to 2004.
   Revenues from regulated gas distribution totalled Euro 39 million,
up 8.3% compared to 2004.

   Other operating revenues

   Other operating revenues came to Euro 513 million, Euro 442
million more than in 2004.
   This line item includes Euro 337 million corresponding to the
portion of CO2 emission rights allocated to ENDESA within the scope of
the Spanish emissions National Allocation Plan made in 2005, which is
recorded as revenue.

   Operating expenses

   The breakdown of operating expenses in the Spanish and Portuguese
business in 2005 and a comparison with 2004 is provided below:
-0-
*T
OPERATING EXPENSE IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                       Euro million
----------------------------------------------------------------------
                                2005      2004      Change    % Chg
----------------------------------------------------------------------
Purchases and services            4.072     2,367     1,705      72.0
----------------------------------------------------------------------
 Power purchases                    875       434       441     101.6
----------------------------------------------------------------------
 Fuel consumption                 2,057     1,546       511      33.1
----------------------------------------------------------------------
 Power transmission expenses        273       189        84      44.4
----------------------------------------------------------------------
 Other supplies and services        867       198       669     337.9
----------------------------------------------------------------------
Personnel expenses                1,041       985        56      15.7
----------------------------------------------------------------------
Other operating expenses          1,034     1,028         6       0.6
----------------------------------------------------------------------
Depreciation and amortisation     1,002     1,040       (38)     (3.7)
----------------------------------------------------------------------
TOTAL                             7,149     5,420     1,729      31.9
----------------------------------------------------------------------
*T

   Power purchases

   Power purchases in the period rose 101.6% to Euro 875 million. The
main component of this line item relates to transactions on the
wholesale generation market. This increase in power purchases is
linked to the 79.6% rise in the average pool price.
   The balance relates to gas purchases to supply deregulated
customers, which rose as a result of the 18.7% increase in sales to
these customers and the rising price of gas.

   Fuel consumption

   Fuel consumption amounted to Euro 2,057 million in 2005, an
increase of 33.1% vs. 2004.
   This increase is due to higher fuel-oil generation in 2005 (higher
unit costs than other technologies) triggered by the drought and to a
generalised increase in raw material prices in international markets.
   These higher costs were offset by the Company's proactive fuel
purchasing management policy which resulted in below-market purchasing
prices.

   Other supplies and services

   Expenses under this line item totalled Euro 867 million in 2005,
up Euro 669 million compared to 2004.
   This variation reflects the booking expenses of Euro 522 million
in connection with rights acquired to cover the CO2 emissions made
throughout the year, which totalled 51.9 million tonnes, of which 40.4
million tonnes corresponded to the mainland and the remaining 11.5
million tonnes to non-mainland service areas.

   Expenses for mainland emissions were valued as follows:

   --  For the portion of emissions covered by freely allocated
        emission rights, at the same price at which the revenues are
        booked, i.e. the market price at the start of 2005.

   --  For the portion of emissions covered by rights acquired in the
        market, the expense is recorded at the price paid for these
        rights.

   --  The portion of emissions for which ENDESA does not own rights
        was recorded at the market price of these rights as of 31
        December 2005, Euro 21.88 per tonne.

   The net effect of revenues and expenses booked in 2005 to cover
CO2 emissions was Euro 185 million, corresponding to an estimated
rights deficit of 8.5 million tonnes.

   Personnel expenses

   As of 31 December 2005, the workforce in Spain and Portugal
totalled 12,709, down 1.4% compared to year-end 2004.
   Personnel expenses rose 5.7% to Euro 1,041 million in 2005
compared to 2004.
   These expenses include Euro 34 million corresponding to estimated
costs to be incurred in connection with layoffs contemplated in the
2006-2012 Mining Plan, expected to be one of the main driving forces
behind cost cutting in the coming years. Stripping out these
provisions, personnel costs remained practically unchanged.

   Other fixed operating expenses

   Other fixed operating costs rose 0.6% to Euro 1,034 million in
2005, a testament to the effects that the Improvement Efficiency Plan
is beginning to yield, since this line item was lower by 5.7%, or Euro
20 million, in the fourth quarter of 2005 compared to the same period
of 2004.

   Net financial expenses: Euro 609 million

   Financial expenses in 2005 totalled Euro 609 million, Euro 602
million of which related to net financial interest expense.
   This includes Euro 60 million for the cost of preferred shares,
which are classified as debt in the 2005 accounts, and therefore
their cost is recorded as interest expense.
   As IAS 32 was not applied last year, these preferred shares were
booked as minority interests and not as financial debt in 2004.
   Financial expenses in 2005 also include Euro 111 million
corresponding to the reduction from 4% to 3,588% of the restructuring
employees plan's discount rate.
   On a like-for-like basis, net financial expenses would have
decreased by Euro 70 million in 2005, i.e. 12.5%.
   As of 31 December 2005, net debt in the Spain and Portugal
business stood at Euro 11,461 million, up from Euro 9,586 million at
the start of the year. This rise can be explained by several factors,
amongst other, by the Euro 1,581 million paid to finance the tariff
deficit, as well as by the investment in distribution made in the year
as part of ENDESA's Quality Excellence Plan.

   Equity-accounted income

   Equity-accounted income in the electricity business in Spain and
Portugal totalled Euro 44 million.
   These earnings include, among others, the contribution by Nuclenor
(Euro 19 million), income from equity affiliates in Portugal (Euro 9
million) and from the Renewables/CHP generation subsidiaries (Euro 15
million).

   Asset disposals: Euro 96 million in capital gains

   In 2005, ENDESA generated gross capital gains of Euro 96 million
from disposals of non-core assets of its electricity business in Spain
and Portugal.
   Among these we highlight the sale of land in Palma de Mallorca
where GESA's headquarters was formerly located, and the sale of the
Lepanto building in Barcelona. These transactions generated gross and
net capital gains of Euro 89 million and Euro 75 million,
respectively.

   Cash flow from operating activities: Euro 2,669 million

   Cash flow from operating activities from the Spanish and
Portuguese electricity business totalled Euro 2,669 million in 2005,
an increase of 34.9% compared to 2004.

   Investments: 33.6% increase in new generation capacity and 28.9%
increase in distribution to improve quality of service

   Investments in Spain and Portugal reached Euro 2,660 million in
2005, up 31% compared to the same period last year.
-0-
*T
TOTAL INVESTMENTS IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                     Euro million
----------------------------------------------------------------------
                                  2005         2004         % Chg
----------------------------------------------------------------------
Capex                                2,382        1,828          30.3
----------------------------------------------------------------------
Intangibles                             66           77         (14.3)
----------------------------------------------------------------------
Financial                              212          125          69.6
----------------------------------------------------------------------
 Consolidated subsidiaries             151            -            NA
----------------------------------------------------------------------
Total investments                    2,660        2,030          31.0
----------------------------------------------------------------------

----------------------------------------------------------------------
CAPEX IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                     Euro million
----------------------------------------------------------------------
                                  2005         2004         % Chg
----------------------------------------------------------------------
Generation                             943          706          33.6
----------------------------------------------------------------------
 Ordinary regime                       799          526          51.9
----------------------------------------------------------------------
 Renewables/CHP                        144          180         (20.0)
----------------------------------------------------------------------
Distribution                         1,389        1,078          28.9
----------------------------------------------------------------------
Others                                  50           44          13.6
----------------------------------------------------------------------
Total                                2,382        1,828          30.3
----------------------------------------------------------------------
*T

   89.6% of total investment was spent on capex to develop or enhance
electricity generation and distribution facilities in order to
maintain ENDESA's leadership in the Spanish market, meeting increasing
demand while simultaneously improving quality of supply.
   The breakdown of capex reflects the considerable effort made by
the Company over the last few years to improve service quality, with
investment in distribution facilities accounting for 58.3% of the
total. We also highlight the significant increase in capital
expenditure to expand ENDESA's generation capacity. Here the
conversion of group 4 at the As Pontes plant, the construction of the
Cristobal Colon (400 MW) and the As Pontes (800 MW) combined cycle
facilities and capacity increases in renewables are particularly
noteworthy.
   The investment in consolidated subsidiaries relates to the
acquisition of Portuguese renewables company, Finerge, during the
third quarter for Euro 151 million.
   The financing of the regulated business tariff deficit -Euro 1,581
million - is also booked as a financial investment, although not
included in the figures above. As of 31 December 2005, Euro 1,011
million had been paid.

   ELECTRICITY BUSINESS IN EUROPE

   Excellent results and sound growth prospects

   In 2005 ENDESA confirmed its position as one of the top five power
players on the European continent, with a unique business platform
that has proved capable of generating strong profitability year after
year.
   ENDESA has currently 9,397MW of installed capacity in Europe
outside Spain and Portugal, generating 33,749 GWh in 2005 and selling
47,221 GWh. By way of comparison, this output is greater than the
total production of ENDESA's third-ranked competitor in Spain and
equates to roughly half the output of its number two rival.
   Over 2005, the company's European business focused on its two main
strategic targets: consolidating its position and seeking new growth
opportunities.
   Among its main subsidiaries, Endesa Italia achieved marked growth
in volumes: electricity generation grew by 12% and sales by 17.8%.
   The company was especially active in renewable energy, with the
aim of diversifying its output into emission-free technologies. In the
fourth quarter, it began building wind farms in Sicily with total
installed capacity of 56 MW, due to come on stream in summer 2006 and
signed a deal with Merloni to acquire 51% of MF Power, which owns
three wind farms in Italy for a total of 60 MW. Also, under the
framework agreement with Gamesa, it is due to take over the Iardino
wind farm in Naples (Italy) in January 2006, with installed capacity
of 14 MW.
   Also, construction continued on schedule for the two 400MW
combined cycle groups at the Scandale plant in Calabria. This project
was acquired at the end of December 2004 by ENDESA and ASM Brescia
(50/50).
   Finally, in accordance with Legge Finanziaria 2006, Endesa
Italia's fixed assets have been partially revalued following Italian
accounting principles. This revaluation is not taken into
consideration under International Financial Reporting Standards
(IFRS). The economic impact of this tax revaluation amounts to Euro
134 million which has been booked in ENDESA's results.
   These were just some of the significant milestones in 2005, which
also included the following:

   --  In February, the Company sold 5.33% of its holding in Endesa
        Italia to ASM Brescia, one of ENDESA's partners in Endesa
        Italia, for Euro 159 million, booking a net capital gain of
        Euro 24 million. Following this transaction, ENDESA's stake in
        Endesa Italia stands at 80%. The transaction implies a total
        value for Endesa Italia of Euro 2,989 million, 36.4% higher
        than the price ENDESA paid for its original stake in this
        group in 2001.

   --  Repowering work to convert group 3 of Ostiglia and group 6 of
        Tavazzano to combined cycle generators was completed.

   --  An agreement was signed with the Merloni group to supply
        electricity to the Italian retail market. The supply source
        for the power sold will be Endesa Italia's generation
        capacity. The Merloni group contributes with a portfolio of
        more than 2,000 customers and sales volume of over 2 TWh.

   --  The Company has signed a letter of intent to construct and
        operate the Livorno regasification plant (Tuscany), which will
        allow ENDESA to acquire up to 25.5% of the project and to use
        of up to 2bcm of the plant's regasification capacity.

   --  A Euro 102 million dividend was paid in February.

   With regards to SNET, in which ENDESA has a 65% controlling stake,
initiatives were taken during the year in the context of the
Industrial Plan presented to the markets the first months of 2005, the
purpose of which is to develop new capacity on current sites to
achieve total new capacity of 2,000MW in combined cycle plants and
200MW in renewables.
   In accordance with this plan, SNET renegotiated the contract to
sell electricity to EDF, signed a coal supply contract, and reached
several agreements with trade unions to ensure that labour relations
would remain stable and targets for workforce restructuring could be
met. It also obtained authorisation to begin construction of the
Lehaucourt wind farm, which will have a total capacity of between 8
and 10MW, and sold its 23.62% stake in power generator
Sechilienne-Sidec to Ecofin Ltd. for Euro 104 million.
   It also successfully completed the merger of its three operating
companies (Setne, Setcm and SNET itself), and SNET acquired an
additional 4.36% of the Polish cogeneration plant at Bialystock,
taking its total stake to 69.58% at year end.
   In 2005, the Board of Directors of SNET approved the distribution
of an interim dividend of Euro 21 million, of which Euro 14 million
corresponded to ENDESA Europe.
   Finally, the European Commission authorised the acquisition of
Dolna Odra (Poland) on 9 January 2006 and final negotiations for the
purchase by ENDESA are expected to be concluded in the coming weeks.

   Net income: up 151.5%

   Net income from the electricity business in Europe totalled Euro
425 million in 2005, an increase of 151.5% with respect to 2004. The
table below shows a breakdown of output and sales figures by country:
-0-
*T
BREAKDOWN OF ENDESA'S GENERATION AND SALES IN EUROPE
----------------------------------------------------------------------
                 Generation (GWh)             Sales (GWh)
----------------------------------------------------------------------
                  2005     2004     % Chg    2005     2004     % Chg
----------------------------------------------------------------------
Italy             23,362   20,865     12.0   30,911   26,246     17.8
----------------------------------------------------------------------
France (1)         8,689    3,591    142.0   14,612    5,329    174.2
----------------------------------------------------------------------
Poland(1)(2)       1,698      597    184.4    1,698      597    184.4
----------------------------------------------------------------------
Total             33,749   25,053     34.7   47,221   32,172     46.8
----------------------------------------------------------------------

(1) 2004 data corresponds to the last four months of the year, since
    ENDESA gained control of SNET
(2) ENDESA is present in the generation business in Poland through the
    Bialystock CHP, which is controlled by SNET.
*T

   EBIT: up 67%

   The table below shows EBITDA and EBIT for ENDESA's European
electricity business broken down by business line:
-0-
*T
EBITDA & EBIT IN EUROPE
----------------------------------------------------------------------
                   EBITDA (Euro million)       EBIT (Euro million)
----------------------------------------------------------------------
                  2005     2004     % Chg    2005     2004     % Chg
----------------------------------------------------------------------
Endesa Italia        694      510     36.1      542      382     41.9
----------------------------------------------------------------------
SNET (1)             179       43    316.3       62        6    933.3
----------------------------------------------------------------------
Trading               46        1       NA       46        1       NA
----------------------------------------------------------------------
Holding & others     (32)     (19)      NA      (32)     (19)      NA
----------------------------------------------------------------------
Total                887      535     65.8      618      370     67.0
----------------------------------------------------------------------

(1) 2004 data corresponds to the last four months of the year, since
    ENDESA gained control of SNET
*T

   Key points to note are the Euro 46 million EBIT from trading
operations. ENDESA can conduct these operations taking no risks thanks
to its generating base in Italy and France.

   Endesa Italia: excellent progress on all key financial measures

   The table below shows key magnitudes of Endesa Italia's EBIT:
-0-
*T
ENDESA ITALIA KEY DATA
----------------------------------------------------------------------
                                            Euro million
----------------------------------------------------------------------
                                   2005      2004   Change     % Chg
----------------------------------------------------------------------
Revenues                          2,242     1,680       562       33.5
----------------------------------------------------------------------
Gross margin                        853       717       136       19.0
----------------------------------------------------------------------
EBITDA                              694       510       184       36.1
----------------------------------------------------------------------
EBIT                                542       382       160       41.9
----------------------------------------------------------------------
*T

   Revenues reported by the Italian group grew 33.5% due largely to
the 17.8% rise in energy sold.
   Sales were 30,911GWh in 2005, compared to 26.246GWh the previous
year. Of this, 7,549GWh was acquired from third parties at a cost of
Euro 292 million, an increase of 2,168GWh compared to 2004.
   Endesa Italia generated 23,362GWh in 2005, a rise of 2,497 GWh or
12% compared to 2004. It had a 8.1% share of the Italian market.
   Progress in Endesa Italia's repowering programme has allowed it to
increase production by using a more efficient mix that replaces
fuel-oil output with power generated by CCGTs. The programme has also
boosted its capacity to limit the impact of higher fuel prices.
   Fuel costs for Endesa Italia rose by just Euro 241 million in
2005. This is far lower than the rise in revenues reflecting higher
electricity prices as a result of the increase in fuel prices.
   The benefits of the repowering programme were also apparent,
comparing the company's technology mix in 2005 vs. 2004: the weight of
CCGTs in the generation mix has increased from 30.4% to 50.4%, while
the weight of fuel-oil has declined from 31.1% to 16.2%.
   "Other supplies and services" include, among other items, the Euro
21 million estimated cost of CO2 emissions in 2005, which are not
expected to be covered by the emission rights to be allocated by the
Italian Government, which has sent a proposal to the European Union
and is pending approval.
   Also, on 23 June 2005, a Decree was published in Italy regulating
how Endesa Italia can recover the Euro 169 million of stranded costs
it is entitled to for the 2005-2009 period.
   Euro 33 million of the total amount recognised was booked as an
increase in income in the 2005 profit and loss account and the
remaining Euro 136 million was deferred depending on the useful life
of the plants affected.

   Debt reduced by Euro 837 million

   Net debt at ENDESA's electricity business in Europe stood at Euro
1,286 million at 31 December 2005, compared to Euro 2,123 million at
the beginning of the year - a reduction of Euro 837 million, or 39.4%.
   Financial results showed a cost of Euro 64 million in 2005, a Euro
2 million reduction vs. 2004.

   Income tax

   Income tax includes Euro 134 million corresponding to the tax
deduction associated to the partial asset revaluation in accordance
with Lege Finanziaria 2006.

   Cash flow from operations: up 14.7%

   Cash flow generated from operations in this business stood at Euro
586 million, a rise of 14.7% compared to 2004.

   Investments: Euro 308 million

   Investment in the European electricity business totalled Euro 308
million in 2005. Of this, Euro 283 million was capex of which Euro 209
million corresponded to Endesa Italia and Euro 74 million to SNET.
   Financial investments for the year were Euro 25 million including
the buyout of minority shareholders' stakes in SNET subsidiaries
Sodelif and Bialystock for Euro 6 and 4 million respectively. These
transactions represent the acquisition of 15.86% of Sodeli and 4.36%
of Bialystock.

   Divestments

   In 2005, ENDESA's European business completed the following
divestments:

   --  The sale of a 5.33% stake in Endesa Italia to ASM Brescia for
        Euro 159 million, generating a net capital gain of Euro 24
        million.

   --  The sale of SNET's 23.62% stake in the generator
        Sechilienne-Sidec for Euro 104 million, generating a gross
        capital gain of Euro 48 million (Euro 26 million after taxes
        and minorities).

   --  The sale of ENDESA's 18% stake in Moroccan water utility Lydec
        for Euro 26 million, generating a net capital gain of Euro 12
        million.

   ELECTRICITY BUSINESS IN LATIN AMERICA

   Leveraging on economic recovery: strong gains in output and sales

   In 2005, ENDESA's business in Latin America profited from the
economic recovery of the region. On the back of the most favourable
environment for several years, the business was able to demonstrate
its potential for profitability while continuing to strengthen balance
sheets and optimizing the organizational estructure, consolidating
ENDESA's position as Latin America's leading electricity multinational
with installed capacity of 14,095 MW, generating output of 57,890 GWh
and sales of 55,246 GWh to 11.2 million customers.
   Sustained economic growth and low inflation were the rule
throughout 2005. This created a good environment for strong growth in
electricity demand in markets served by ENDESA subsidiary companies,
with an average growth in electricity sales of 5.6% compared to 2004
across all markets where the group is active.
   This increase in demand boosted generation at ENDESA's
subsidiaries, which showed average growth of 5.1% compared to the same
period last year.
   The economic conditions also led to widespread increases in prices
and margins. As a result, EBIT rose by 10% in the generation and
transmission business and by 43.4% in distribution.

   Growth in volume sales in generation and distribution

   The table below shows generation and distribution figures for
ENDESA's Latin American subsidiaries:
-0-
*T
GENERATION AND DISTRIBUTION IN THE LATIN AMERICAN BUSINESS
----------------------------------------------------------------------
                           Generation (GWh)     Distribution (GWh)
----------------------------------------------------------------------
                           2005      % chg     2005         % chg
----------------------------------------------------------------------
Chile                       18,764      11.7    11,851      4.7
----------------------------------------------------------------------
Argentina                   16,154       1.7    14,018      5.2
----------------------------------------------------------------------
Peru                         6,895      21.9     4,530      6.6
----------------------------------------------------------------------
Colombia                    11,864      (0.1)   10,094      4.5
----------------------------------------------------------------------
Brazil                       4,213     (13.8)   14,753      7.1
----------------------------------------------------------------------
TOTAL                       57,890       5.1    55,246      5.6
----------------------------------------------------------------------
*T

   Improvement in generation and distribution margins

   Growth in demand and tighter reserve margins caused the unit
margin of generation companies to increase by 9.9% compared to 2004,
reaching US$ 21.1 per MWh produced, despite the rise in fuel prices
and gas restrictions affecting Chile and Argentina.
   In distribution, operating margins were considerably boosted by
improved pass-through of generation costs achieved through tariff
revisions in the course of the year coupled with operating efficiency.
VAD was US$30.3 per MWh, up by 28.9%.

   Regulatory developments

   In the fourth quarter of 2005, further improvements were made to
the regulatory frameworks under which ENDESA's Latin American
subsidiaries operate.
   In October 2005, ENDESA, alongside the remaining generators in
Argentina, signed a Definitive Agreement with the Secretary of Energy
to manage and operate projects to reconfigure the Wholesale
Electricity Market (MEM).
   This agreement comes after the Adhesion Agreement signed in
December 2004, under which the generators agreed to participate in
Foninvemem, a fiduciary fund set up to finance investment to increase
electricity supply to the MEM.
   In 9 December 2005, Brazil and Argentina signed an agreement for
the 2006-2008 period. Through this treaty, both countries agreed to
adapt their regulations to allow for contractual changes regarding
imports and exports.
   Also in December, the Argentine Senate voted in favour of the
agreement signed between Edesur and Uniren providing for the increase
in tariffs, although its application remains pending. Additional
agreements have been reached in 2005 for Chilectra, Ampla, Coelce and
Edelnor.

   Net income growth of 106.3%

   Net income from this business line was Euro 262 million in 2005,
up by 106.3% compared to 2004 and representing 8.2% of ENDESA's total
net income for the year.

   EBIT: Growth of 30.6%

   The table below sets out EBITDA and EBIT for ENDESA's Latin
American electricity business, broken down by activity:
-0-
*T
EBITDA & EBIT IN LATIN AMERICA
----------------------------------------------------------------------
                                     Euro million
----------------------------------------------------------------------
                          EBITDA                      EBIT
----------------------------------------------------------------------
                    2005     2004     % Chg    2005     2004    % Chg
----------------------------------------------------------------------
Generation and
 transmission      1,037      914     13.5      768      698     10.0
----------------------------------------------------------------------
Distribution         898      663     35.4      677      472     43.4
----------------------------------------------------------------------
Others               (57)     (55)      NA      (69)    (116)      NA
----------------------------------------------------------------------
Total              1,878    1,522     23.4    1,376    1,054     30.6
----------------------------------------------------------------------
*T

   The table below shows the breakdown for each business line by the
countries in which ENDESA operates through fully consolidated
subsidiaries:
-0-
*T
BREAKDOWN OF EBITDA AND EBIT IN LATAM BY BUSINESS LINE AND COUNTRY
----------------------------------------------------------------------
Generation and transmission
----------------------------------------------------------------------
Euro million              EBITDA                      EBIT
----------------------------------------------------------------------
                    2005     2004    % Chg     2005     2004    % Chg
----------------------------------------------------------------------
Chile                365      266     37.2      248      179     38.5
----------------------------------------------------------------------
Colombia             232      220      5.5      183      178      2.8
----------------------------------------------------------------------
Brazil -
 Generation          128       98     30.6      111       84     32.1
----------------------------------------------------------------------
Brazil -
 Transmission         55       68    (19.1)      38       54    (29.6)
----------------------------------------------------------------------
Peru                 154      127     21.3      114       90     26.7
----------------------------------------------------------------------
Argentina -
 Generation           93      123    (24.4)      66      101    (34.7)
----------------------------------------------------------------------
Argentina -
 Transmission         10       12    (16.7)       8       12    (33.3)
----------------------------------------------------------------------
TOTAL              1,037      914     13.5      768      698     10.1
----------------------------------------------------------------------

----------------------------------------------------------------------
Distribution
----------------------------------------------------------------------
Euro million              EBITDA                      EBIT
----------------------------------------------------------------------
                    2005     2004    % Chg     2005     2004    % Chg
----------------------------------------------------------------------
Chile                192      168     14.3      168      147     14.3
----------------------------------------------------------------------
Colombia             236      206     14.6      165      139     18.7
----------------------------------------------------------------------
Brazil               329      145    126.9      262       96    172.9
----------------------------------------------------------------------
Peru                  74       69      7.2       44       40     10.0
----------------------------------------------------------------------
Argentina             67       75    (10.7)      38       50    (24.0)
----------------------------------------------------------------------
TOTAL                898      663     35.4      677      472     43.4
----------------------------------------------------------------------
*T

   Generation and transmission

   Chile

   In 2005, Chilean generation was impacted by the gas supply
problems affecting thermal plants, which required substituting gas
with more expensive liquid fuels.
   For ENDESA's subsidiaries, however, this issue was more than
offset by the 11.7% increase in energy generated from hydro plants,
specially thanks to the start up of operations of the Ralco plant in
September 2004 and the increase of the node price, which was derived
from the change in the energy matrix caused by the gas supply crisis.
For these reasons, EBIT rose to Euro 248 million in 2005, up by 38.5%
compared to 2004.

   Colombia

   Although power output in 2005 was virtually unchanged compared to
2004, the positive evolution of the Colombian peso vs. the euro
allowed the Colombian subsidiary to report EBITDA of Euro 232 million
and EBIT of Euro 183 million, increases of 5.5% and 2.8% respectively.

   Brazil (Generation)

   Total electricity generation in Brazil fell by 13.8% reflecting
gas supply problems at Endesa Fortaleza. However, favourable exchange
rate movements, together with positive price trends and lower fuel
consumption, underpinned a 30.6% rise in EBITDA and a 32.1% jump in
EBIT to Euro 128 million and Euro 111 million, respectively.

   Brazil (Transmission)

   The difficulties of the unavailability of electricity in Argentina
to export to Brazil due to the above-mentioned gas supply restrictions
had a negative impact on results of the interconnection, leading to an
EBIT of Euro 38 million, Euro 16 million lower than in 2004.

   Peru

   Generation sales reached Euro 299 million in 2005, a 3.5% increase
compared to 2004. The impact of lower prices due to higher hydro
output was offset by the 21.9% rise in volumes generated.
   Higher hydro output drove a Euro 35 million reduction in the cost
of fuel, contributing to a Euro 27 million increase in EBITDA and Euro
24 million rise in EBIT, to Euro 154 million and Euro 114 million,
respectively.

   Argentina

   Gas supply problems pushed up fuel costs considerably (by 48.5%),
as generators were forced to fall back on more expensive liquid fuels.
As a result, although volume sales of electricity rose by 1.7%,
margins narrowed.
   This meant that EBITDA and EBIT fell by 24.4% and 34.7% to Euro 93
million and Euro 66 million, respectively.

   Distribution

   Chile

   EBITDA and EBIT from distribution were up by 14.3% compared to
2004.
   These increases reflect the fact that growth in sales volume to
meet higher demand offset the squeeze on margins caused by the latest
tariff revision.

   Colombia

   EBITDA of Colombian distribution rose by 14.6% and EBIT by 18.7%.
These rises were due to a 10.5% increase in sales to Euro 400 million
- enough to cover the higher costs of buying electricity - and a
stronger Colombian peso vs. the euro.

   Brazil

   Distribution sales in Brazil reached Euro 1,319 million in 2005, a
53.7% increase compared to 2004.
   The rise resulted from wider margins as a consequence of the
pass-through of generation prices to customers and, to a lesser
extent, higher sales volume.
   Also, higher income from electricity sales more than covered cost
increases, with EBITDA growing by 126.9% compared to 2004 levels to
Euro 329 million and EBIT by 172.9% to Euro 262 million.

   Peru

   Distribution sales in Peru reached Euro 74 million in 2005, a 7.2%
increase compared to 2004. EBIT rose in 2005 by Euro 4 million
reaching Euro 44 million (+10%).
   This was due to a Euro 36 million rise in sales vs. 2004 to Euro
298 million, compared to a rise in electricity costs of just Euro 22
million.

   Argentina

   EBITDA and EBIT of the Argentine distribution business were down
by Euro 8 million and Euro 12 million, respectively, on 2004.
   This was largely because the 2004 figures included income of Euro
10 million corresponding to the compensation received from Alstom due
to the Azopardo supply incident.
   The rest reflected greater energy purchases and fixed costs, which
were not offset by higher sales. This situation could change going
forward after the upcoming tariff review.

   Financial strength: 3% improvement in financial results

   Net financial expense from the business in Latin America in 2005
totalled Euro 524 million, Euro 16 million lower than in 2004.
   Exchange rate differences switched from losses of Euro 87 million
in 2004 to gains of Euro 16 million in 2005, a difference of Euro 103
million.
   Net interest expense totalled Euro 540 million, Euro 87 million or
19.2% higher than in 2004. The rise was due to the euro's trend vs.
Latin American currencies and the dollar, which drove up debt
denominated in these currencies in euro terms and hence increased
interest payments on foreign-denominated debt.
   Net debt at ENDESA's Latin American business stood at Euro 6,109
million at 31 December 2005, up by Euro 759 million since the start of
the year.
   This increase in net debt is fundamentally due to the depreciation
of the euro against the currencies in which Latam subsidiaries hold
their debt, which has risen by Euro 912 million as a result.
   Stripping out currency effects, debt of the Latin American
business would have fallen by Euro 153 million, after paying dividends
and capital reductions to Group and minority shareholders totalling
Euro 533 million.

   Enersis and Endesa Chile in the financial markets

   The strong operating performance by ENDESA's Latin American
business was mirrored by gains by Enersis and Endesa Chile stocks,
which rose by 18.7% and 55.1%, respectively on the Santiago de Chile
Exchange in 2005.
   On the New York Stock Exchange, Enersis gained 29.1% in 2005 and
Endesa Chile 67.9%.

   Cash flow: up 25.3%

   Cash flow generated by the group's business in Latin America
totalled Euro 1,180 million in 2005, an increase of 25.3% with respect
to 2004.

   Investments: Euro 670 million

   Investments in the Latin American business totalled Euro 670
million in 2005. Of this, Euro 600 million was capex. The breakdown is
as follows:
-0-
*T
CAPITAL EXPENDITURES IN LATIN AMERICA
----------------------------------------------------------------------
                                     Euro million
----------------------------------------------------------------------
                                      2005         2004     % Chg
----------------------------------------------------------------------
Generation                             166          168     (1.2)
----------------------------------------------------------------------
Distribution and Transmission          390          251     55.4
----------------------------------------------------------------------
Others                                  44           59    (25.4)
----------------------------------------------------------------------
Total                                  600          478     25.5
----------------------------------------------------------------------
*T

   In the fourth quarter of 2005, ENDESA sold its 40% holding in
Dominican Republic's CEPM for Euro 20 million, at a gross capital gain
of Euro 7 million (Euro 4 million after tax).

   Optimisation of the organisational structure

   In 2005, ENDESA created the subsidiary Endesa Brasil to bring
together all the Group's operating companies in Brazil, both
generation and distribution. ENDESA has a direct stake in Endesa
Brasil of 28.48%. The remaining 71.52% is owned by the Enersis Group
   Also, as part of the drive to simplify its corporate structure, in
2005 the Group began the process of merging Elesur with Chilectra
(Chile) and Edegel with Etevensa (Peru).

   Construction of San Isidro II and Palmucho plants (Chile)

   In 2005, Endesa Chile continued work on the combined-cycle
generation plant San Isidro II, with a final installed capacity of
377MW, as well as the Palmucho hydro-electric station with capacity of
32MW.
   Also in Peru work continues on Etevensa II, the second
combined-cycle at the Etevensa plant, and on the conversion of
Etevensa I to a combined-cycle. Both are expected to be completed in
2006.

   ACCOUNTING CRITERIA

   ENDESA has prepared its consolidated financial statements for 2005
and 2004 in accordance with the valuation and classification criteria
required by International Financial Reporting Standards (IFRS)
endorsed by the European Union prevailing on 31 December 2005.
   In accordance with IFRS I, the deadline for the transition to IFRS
is 1 January 2004. Accordingly, figures to 31 December 2004 have also
been drawn up under IFRS to facilitate comparisons. Therefore, they do
not correspond to those presented in ENDESA's 2004 consolidated
financial statements, which were prepared under Spanish GAAP.
   Under IFRS I, which regulates first-time adoption of IFRS,
companies do not need to apply IAS 32 and 39 on financial instruments
to figures from the 2004 financial statements presented for comparison
purposes. ENDESA has taken up this option and 2004 figures therefore
do not include the impact of IAS 32 and 39.
   Note, however, that all references to balance sheet items "at 1
January 2005" or "at the start of 2005" refer to the information at 31
December 2004 adjusted for first-time application of IAS 32 and 39.

   STATISTICAL APPENDIX

   KEY FIGURES
-0-
*T
Electricity Generation (GWh)              2005      2004      % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                  93,625    95,679      (2.1)
----------------------------------------------------------------------
Electricity business in Europe             33,749    25,053      34.7
----------------------------------------------------------------------
Electricity business in Latin America      57,890    55,106       5.1
----------------------------------------------------------------------
TOTAL                                     185,264   175,838       5.4
----------------------------------------------------------------------


Electricity Generation in Spain and
 Portugal (GWh)                           2005      2004      % Chg
----------------------------------------------------------------------
Mainland                                   79,811    82,529      (3.3)
----------------------------------------------------------------------
Nuclear                                    23,020    25,567     (10.0)
----------------------------------------------------------------------
Coal                                       37,018    37,203      (0.5)
----------------------------------------------------------------------
Hydroelectric                               7,479    10,310     (27.5)
----------------------------------------------------------------------
Combined cycle - CCGT                       7,757     6,039      28.4
----------------------------------------------------------------------
Fuel oil                                    2,417     1,637      47.6
----------------------------------------------------------------------
Renewables/CHP                              2,120     1,773      19.6
----------------------------------------------------------------------
Non-mainland                               13,814    13,150       5.0
----------------------------------------------------------------------
TOTAL                                      93,625    95,679      (2.1)
----------------------------------------------------------------------


Electricity Generation in Europe (GWh)    2005      2004      % Chg
----------------------------------------------------------------------
Coal                                       15,880     9,830      61.5
----------------------------------------------------------------------
Hydroelectric                               2,292     2,392      (4.2)
----------------------------------------------------------------------
Combined cycle - CCGT                      11,766     6,338      85.6
----------------------------------------------------------------------
Fuel oil                                    3,786     6,483     (41.6)
----------------------------------------------------------------------
Wind                                           25        10     150.0
----------------------------------------------------------------------
TOTAL                                      33,749    25,053      34.7
----------------------------------------------------------------------


Electricity Generation in Latin America
 (GWh)                                    2005      2004      % Chg
----------------------------------------------------------------------
Chile                                      18,764    16,797      11.7
----------------------------------------------------------------------
Argentina                                  16,154    15,884       1.7
----------------------------------------------------------------------
Peru                                        6,895     5,655      21.9
----------------------------------------------------------------------
Colombia                                   11,864    11,881      (0.1)
----------------------------------------------------------------------
Brazil                                      4,213     4,889     (13.8)
----------------------------------------------------------------------
TOTAL                                      57,890    55,106       5.1
----------------------------------------------------------------------


Electricity sales (GWh)                   2005      2004      % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                 100,868    96,731       4.3
----------------------------------------------------------------------
Regulated market                           64,095    65,762      (2.5)
----------------------------------------------------------------------
Deregulated market                         36,773    30,969      18.7
----------------------------------------------------------------------
Electricity business in Europe             47,221    32,172      46.8
----------------------------------------------------------------------
Electricity business in Latin America      55,246    52,314       5.6
----------------------------------------------------------------------
Chile                                      11,851    11,317       4.7
----------------------------------------------------------------------
Argentina                                  14,018    13,322       5.2
----------------------------------------------------------------------
Peru                                        4,530     4,250       6.6
Colombia                                   10,094     9,656       4.5
----------------------------------------------------------------------
Brazil                                     14,753    13,769       7.1
----------------------------------------------------------------------
TOTAL                                     203,335   181,217      12.2
----------------------------------------------------------------------


Gas sales (GWh)                           2005      2004      % Chg
----------------------------------------------------------------------
Regulated market                            2,576     2,697      (4.5)
----------------------------------------------------------------------
Deregulated market                         18,558    11,728      58.2
----------------------------------------------------------------------
TOTAL                                      21,134    14,424      46.5
----------------------------------------------------------------------


Workforce                                31-12-05  31-12-04   % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                  12,709    12,889      (1.4)
----------------------------------------------------------------------
Electricity business in Europe              2,153     2,436     (11.6)
----------------------------------------------------------------------
Electricity business in Latin America      12,317    11,735       5.0
----------------------------------------------------------------------
Other businesses                               25        93     (73.1)
----------------------------------------------------------------------
TOTAL                                      27,204    27,153       0.2
----------------------------------------------------------------------
*T

   FINANCIAL DATA
-0-
*T
Key figures                               2005      2004      % Chg
----------------------------------------------------------------------
Earnings per share - EPS (Euro)              3.01      1.19     152.5
----------------------------------------------------------------------
Cash flows per share - CFPS (Euro)           3.98      3.25      22.5
----------------------------------------------------------------------
Book value per share - BVPS (Euro)          10.95     8.11**     35.0
----------------------------------------------------------------------


Net financial debt (Euro million)        31-12-05  01-01-05   % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                  11,461     9,586      19.6
----------------------------------------------------------------------
Electricity business in Europe              1,286     2,123     (39.4)
----------------------------------------------------------------------
     Endesa Italia                            815     1,293     (37.0)
----------------------------------------------------------------------
     Other                                    471       830     (43.3)
----------------------------------------------------------------------
Electricity business in Latin America       6,109     5,350      14.2
----------------------------------------------------------------------
     Enersis                                5,207     4,081      27.6
----------------------------------------------------------------------
     Other                                    902     1,269     (28.9)
----------------------------------------------------------------------
Other businesses                             (575)    1,639    (135.1)
----------------------------------------------------------------------
TOTAL                                      18,281    18,698      (2.2)
----------------------------------------------------------------------

----------------------------------------------------------------------
Financial leverage (%)                      112.0     151.2        NA
----------------------------------------------------------------------
Net debt/EBITDA (times)                       3.0       4.1*       NA
----------------------------------------------------------------------
EBITDA interest coverage (times)              5.7       4.6*       NA
----------------------------------------------------------------------


"Rating" (18-01-06)           Long term Short term      Outlook
----------------------------------------------------------------------
Standard & Poor's                 A        A-1      Under review (-)
----------------------------------------------------------------------
Moody's                           A3       P-2         Negative
----------------------------------------------------------------------
Fitch                             A         F1      Under review (-)
----------------------------------------------------------------------


Main fixed income issues                          Spread over IRS (bp)
----------------------------------------------------------------------
                                                   31-12-05  31-12-04
----------------------------------------------------------------------
3.5 Y EUR700M 4.375% Mat. June 2009                    5        17
----------------------------------------------------------------------
6.5 Y GBP 400M 6.125% Mat. July 2012                  28        33
----------------------------------------------------------------------
7.1 Y EUR700M 5.375% Mat. Feb 2013                    18        31
----------------------------------------------------------------------


Stock market data                31-12-05       31-12-04      % Chg
----------------------------------------------------------------------
Market cap (Euro million)             23,525         18,306     28.51%
----------------------------------------------------------------------
Number of shares outstanding   1,058,752,117  1,058,752,117        --
----------------------------------------------------------------------
Nominal share value (Euro)               1.2            1.2        --
----------------------------------------------------------------------


Stock market data                  2005           2004        % Chg
----------------------------------------------------------------------
Trading volumes (shares)
----------------------------------------------------------------------
     Madrid stock exchange     2,602,871,497  2,227,994,547      16.8%
----------------------------------------------------------------------
     NYSE                         28,068,500     23,217,800      20.9%
----------------------------------------------------------------------
Average daily trading volume
 (shares)
----------------------------------------------------------------------
     Madrid stock exchange        10,167,467      8,876,472      14.5%
----------------------------------------------------------------------
     NYSE                            111,383         92,134      20.9%
----------------------------------------------------------------------


Share price                   High 2005  Low 2005  31-12-05  31-12-04
----------------------------------------------------------------------
Madrid stock exchange (Euro)      22.78     16.63     22.22     17.29
----------------------------------------------------------------------
NYSE (USD)                        27.01     21.63     26.01     23.27
----------------------------------------------------------------------


Dividends (Euro cents/share)             Payable against 2005 results
----------------------------------------------------------------------
Interim dividend (2 January 2006)                   30.50
----------------------------------------------------------------------
Final dividend***                                   209.5
----------------------------------------------------------------------
Total DPS                                          240.00
----------------------------------------------------------------------
Pay-out (%)                                          79.9
----------------------------------------------------------------------
Dividend yield (%)                                  10.80
----------------------------------------------------------------------

* As of 31 December 2004.

** As of 1 January 2005.

*** To be proposed to the General Shareholders' Meeting
*T

   NOTE: The results presentation is available for download from
endesa's website (www.endesa.es).

   For additional information please contact Alvaro Perez de Lema,
North America Investor Relations Office, telephone # [phone]

   http://www.endesa.es

   Information memo (forward looking statements)

   Investors are urged to read ENDESA's Solicitation/Recommendation
Statement on Schedule 14D-9 when it is filed with the U.S. Securities
and Exchange Commission (the "SEC"), as it will contain important
information. The Solicitation/Recommendation Statement and other
public filings made from time to time by ENDESA with the SEC are
available without charge from the SEC's website at www.sec.gov and at
ENDESA's principal executive offices in Madrid, Spain.
   This presentation contains certain "forward-looking statements"
regarding anticipated financial and operating results and statistics
and other future events. These statements are not guarantees of future
performance and are subject to material risks, uncertainties, changes
and other factors which may be beyond ENDESA's control or may be
difficult to predict.
   Forward looking statements include, but are not limited to,
information regarding: estimated future earnings; anticipated
increases in wind and CCGTs generation and market share; expected
increases in demand for gas and gas sourcing; management strategy and
goals; estimated cost reductions; tariffs and pricing structure;
estimated capital expenditures and other investments; expected asset
disposals; estimated increases in capacity and output and changes in
capacity mix; repowering of capacity and macroeconomic conditions. For
example, the EBITDA and dividends targets for 2004 to 2009 included in
this presentation are forward-looking statements and are based on
certain assumptions which may or may not prove correct. The principal
assumptions underlying these forecasts and targets relate to
regulatory environment, exchange rates, divestments, increases in
production and installed capacity in the various markets where ENDESA
operates, increases in demand in these markets, allocation of
production among different technologies increased costs associated
with higher activity levels not exceeding certain levels, the market
price of electricity not falling below certain levels, the cost of
CCGT and the availability and cost of gas, fuel, coal and emission
rights necessary to operate our business at desired levels.
   The following important factors, in addition to those discussed
elsewhere in this presentation, could cause actual financial and
operating results and statistics to differ materially from those
expressed in our forward-looking statements:
   Economic and Industry Conditions: materially adverse changes in
economic or industry conditions generally or in our markets; the
effect of existing regulations and regulatory changes; tariff
reductions; the impact of any fluctuations in interest rates; the
impact of fluctuations in exchange rates; natural disasters; the
impact of more stringent environmental regulations and the inherent
environmental risks relating to our business operations; the potential
liabilities relating to our nuclear facilities.
   Transaction or Commercial Factors: any delays in or failure to
obtain necessary regulatory, antitrust and other approvals for our
proposed acquisitions or asset disposals, or any conditions imposed in
connection with such approvals; our ability to integrate acquired
businesses successfully; the challenges inherent in diverting
management's focus and resources from other strategic opportunities
and from operational matters during the process of integrating
acquired businesses; the outcome of any negotiations with partners and
governments. Any delays in or failure to obtain necessary regulatory
approvals, including environmental to construct new facilities,
repowering or enhancement of existing facilities; shortages or changes
in the price of equipment, materials or labor; opposition of political
and ethnic groups; adverse changes in the political and regulatory
environment in the countries where we and our related companies
operate; adverse weather conditions, which may delay the completion of
power plants or substations, or natural disasters, accidents or other
unforeseen events; and the inability to obtain financing at rates that
are satisfactory to us.
   Political/Governmental Factors: political conditions in Latin
America; changes in Spanish, European and foreign laws, regulations
and taxes.
   Operating Factors: technical difficulties; changes in operating
conditions and costs; the ability to implement cost reduction plans;
the ability to maintain a stable supply of coal, fuel and gas and the
impact of fluctuations on fuel and gas prices; acquisitions or
restructurings; the ability to implement an international and
diversification strategy successfully.
   Competitive Factors: the actions of competitors; changes in
competition and pricing environments; the entry of new competitors in
our markets.
   Further information about the reasons why actual results and
developments may differ materially from the expectations disclosed or
implied by our forward-looking statements can be found under "Risk
Factors" in our annual report on Form 20-F for the year ended December
31, 2004.
   No assurance can be given that the forward-looking statements in
this document will be realized. Except as may be required by
applicable law, neither Endesa nor any of its affiliates intends to
update these forward-looking statements.