ENDESA Reports a 32.8% Increase in Net Income in the First Nine Months of 2005 to Euro 1,556 Million

ENDESA (NYSE:ELE)

   Results January - September 2005

   All the electricity related businesses of the Company have
generated excellent results

   --  The net income for the first nine months, which does not
        include proceeds from the sale of the stake in Auna, is an
        unprecedented result. The Euro 1,556 million achieved exceeds
        the best full-year results recorded by the Company.

   --  24.4% growth in net income in Spain and Portugal in a
        difficult environment.

   --  High growth in net income in the European (+102.1%) and Latin
        American business (+70.6%).

   --  Significant growth in total EBITDA (+15.9%) and EBIT (+19.4%).

   --  European and Latin American business have contributed 46% of
        total EBITDA, reflecting ENDESA's international footprint.

   --  Double-digit growth in all major P&L items.

   ENDESA's results confirm the feasibility and strength of the
commitments presented in the Strategic Plan ("ENDESA: stronger
business, greater value")

   --  2005 net income and EBITDA expected to exceed long-term growth
        estimates provided to the market.

   --  Year-end leverage ratio will also exceed ENDESA's target.

   --  Successful divestiture of Auna, with Euro 1,060 million in net
        capital gains, ensures meeting dividend targets.

   KEY FACTS AND FIGURES FOR JANUARY-SEPTEMBER 2005

   STRONG GROWTH IN NET INCOME IN ALL OF ENDESA'S BUSINESSES

   --  In the first nine months of 2005, the Spanish and Portuguese
        business posted an increase of 24.4% in net income to Euro
        1,051 million.

   --  Net income from the business in Europe rose 102.1% to Euro 283
        million.

   --  Net income from the business in Latin America was Euro 186
        million, an increase of 70.6% versus the first nine months in
        2004.

   DOUBLE DIGIT GROWTH IN ALL MAJOR P&L ITEMS

   --  The gross margin advanced 16.2% to Euro 6,498 million.

   --  Gross operating profit (EBITDA) rose by 15.9% to Euro 4,399
        million.

   --  Operating profit (EBIT) grew 19.4% to Euro 3,106 million.

   --  Cash flow from operations amounted to Euro 2,929 million,
        16.3% higher than in January-September 2004.

   RESULTS EXCEED STRATEGIC PLAN PRESENTED TO THE MARKET

   --  Growth in net income for 2005, even excluding the Auna
        divestiture, is expected to range from 15 to 35%.

   --  Growth achieved exceeds commitment of 12% net income growth
        presented in the Strategic Plan on the 3rd of October
        ("ENDESA: stronger business, greater value").

   --  Including the Auna divestiture, net income for 2005 will grow
        more than 100% vs. 2004.

   --  Growth in EBITDA for 2005 is expected to range from 20 to 27%
        and will thus exceed ENDESA's target, as outlined in the
        aforementioned Strategic Plan, which is between 10 and 11%.

   --  The increase in net income and capital gains derived from the
        Auna divestiture (Euro 1,060 million net of taxes) will
        provide ENDESA significant progress in meeting its target of
        distributing Euro 7 billion in dividends over the next 5
        years.

   CONTINUED IMPROVEMENT IN FINANCIAL LEVERAGE

   --  Financial leverage stood at 135.0% at the end of the third
        quarter, down from 149.6% at the beginning of the year.

   --  Leverage as of third quarter 2005 exceeds our target in the
        Strategic Plan presented to the market by 5 percent.

   --  The estimated debt for year-end is approximately Euro 18
        billion, clearly below the 18.698 billion figure at the
        beginning of the year.

   --  In the first nine months of the year all business lines have
        generated cash flows that exceeded their respective investment
        needs.

   ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL

   Solid performance despite a severe drought, high fuel costs and a
deficit in allocation of CO2 rights

   --  Net income from the electricity business in Spain and Portugal
        increased by 24.4% and accounted for 67.5% of ENDESA's total
        net income.

   --  EBITDA from this business grew by 6.3% and EBIT by 12.9%.

   --  Reduction in third quarter 2005 fixed costs (by 3% vs. 3Q 2004
        and 6.3% vs. 2Q 2005) in line with the targets set out in
        ENDESA's Efficiency Plan.

   --  The effects of the drought and the rise in fuel costs have not
        affected ENDESA as much as its peers due to a more balanced
        generation mix.

   --  In the first nine months of 2005, ENDESA has achieved fuel
        unit costs for mainland generation in ordinary regime of EUR
        16.2/MWh, 24.7% below the rest of the industry.

   Largest generator and top selling power company in Spain

   --  ENDESA continues to be the leading Spanish power company, with
        the largest share of the total generation market and total
        electricity sales.

   --  Met 93% of its Spanish demand from its own output, a balance
        that gives it a clear competitive advantage over its rivals
        owing to its lower exposure to fluctuations in rainfall and
        wholesale prices.

   --  ENDESA's mainland coal-fired plants achieved a 86.9% load
        factor in the first nine months of 2005, contributing
        significantly to the ensure supply in the Spanish electricity
        system.

   --  CO2 emission rights deficit in January-September 2005 amounted
        to Euro 131 million, or 5.9 million tonnes.

   Continued improvement in quality of supply

   --  ENDESA's SAIDI (system average interruption duration index),
        the indicator normally used to measure the continuity of
        supply, improved by 16% between January and September 2005 in
        the markets supplied by the Company.

   --  Noteworthy was the improvement in the SAIDI for its operations
        in Andalusia and Catalonia, with a decrease of SAIDI of 19%
        compared to 2004.

   Spain's utility with the highest investment levels

   --  ENDESA invested Euro 1,746 million in Spain and Portugal
        through September 2005, of which Euro 1,484 million (85.0%)
        was capex. ENDESA is the Spanish electricity company that
        undertakes the most investments.

   --  Euro 904 million of capex was used for upgrading electricity
        distribution facilities to increase quality and security of
        supply, in line with the expected new remuneration methodology
        for this activity, which accounts for the investment made by
        each company.

   --  The first 350 MW unit converted to imported coal at ENDESA's
        power plant in As Pontes (A Coruna) was connected to the grid
        in the third quarter. Regarding the construction of an 800 MW
        CCGT at the same facility - As Pontes - work is being done
        under the expected schedule. The 400 MW Cristobal Colon CCGT
        in Huelva is expected to start trial operations by year-end.

   --  ENDESA has acquired Portuguese renewable company FINERGE,
        which owns 60 MW in operation and different wind farms under
        construction.

   --  After this acquisition, ENDESA currently has new wind farms
        adding up to 305 MW under construction in the Iberian
        Mainland, of which 52 MW are scheduled to come on stream
        before the end of the year.

   Relevant competitor in natural gas industry, with a 12% market
share

   --  ENDESA sold a total of 16,080 GWh in the Spanish natural gas
        market during the first nine months of 2005, which along with
        a self consumption of 16,637 GWh for its generation, is
        equivalent to a total market share of 11.9%, thereby
        practically achieving the 2007 target of 12%, as outlined in
        the Strategic Plan.

   --  This figure validates ENDESA as a relevant competitor in the
        Spanish natural gas market.

   --  ENDESA has reached an agreement with EDP for the sale of its
        49% stake (held through Endesa Gas) in the Portuguese company
        NQF Gas, for Euro 56.5 million.

   This business line is expected to show strong growth EBITDA in
2005

   --  Estimated EBITDA for Spain & Portugal will range from Euro
        2,800 million to Euro 3,150 million by year-end 2005, implying
        a 13% to 27% increase vs. 2004.

   ELECTRICITY BUSINESS IN EUROPE

   Sharp increases in main income statement lines

   --  Net income from the electricity business in Europe increased
        by 102.1% and accounted for 18.2% of ENDESA's total net income
        in January-September 2005.

   --  EBITDA was Euro 702 million, up 68.8% on January-September
        2004, while EBIT rose by 62.0% to Euro 515 million.

   Debt reduced by Euro 643 million

   --  Net debt for ENDESA's electricity business in the rest of
        Europe stood at Euro 1,480 million as of 30 September 2005,
        compared to Euro 2,123 million at the beginning of the year -
        a reduction of Euro 643 million, or 30.3%.

   Strong growth in Endesa Italia's financial and operating figures.

   --  EBITDA from Endesa Italia was Euro 561 million, 35.8% higher
        than in the first nine months of 2004, while EBIT stood at
        Euro 456 million, a 40.7% increase.

   --  The Company's installed capacity has increased by 11% in the
        first nine months of this year, generation has increased by
        9.2% and sales by 18.2%.

   --  The Company has continued developing its thermal "repowering"
        program. Year to date, it has finalized Ostiglia's group 3
        conversion to CCGT and has initiated trial phase operations in
        Tavazzano's group 6, also converted into CCGT, and which is
        expected to be fully operational by the fourth quarter.

   --  ENDESA and the Italian group Merloni have signed an agreement
        under which the Company will acquire 51% of the Italian
        company MF Power, owner of three wind farms with a total
        capacity of 60 MW.

   Snet: Good results, progress in Industrial Plan and dividend
payment

   --  ENDESA has continued to unlock the value of its shareholding
        in Snet: in the third quarter of 2005 it sold its stake in
        power generator Sechilienne-Sidec for Euro 104 million and
        paid shareholders an interim dividend of Euro 21 million.

   --  The French generation company has contributed Euro 136 million
        of EBITDA and Euro 54 million of EBIT to the Company's
        European business.

   --  The Company has improved its efficiency ratio by 7% (measured
        by number of employees per installed MW).

   In the privatization process of the Polish electricity company
Dolna Odra, ENDESA was selected for exclusive negotiations

   --  ENDESA will be in exclusive negotiations over the coming weeks
        with the Polish government in regards to the privatisation of
        the 1,960 MW generation company Dolna Odra (Poland)

   This business line is expected to show strong growth in EBITDA in
2005

   --  Europe's EBITDA is estimated to be around Euro 850 million by
        year-end 2005, a 60% increase vs. 2004.

   ELECTRICITY BUSINESS IN LATIN AMERICA

   Leveraging economic recovery: net income up 70.6% and double digit
growth in EBITDA and EBIT

   --  ENDESA's Latin American operations recorded a 70.6% increase
        in net income in the first nine months of 2005, contributing
        12.0% to the Company's total net income.

   --  EBITDA grew 15.6% compared to January-September 2004 and EBIT
        by 14.8%.

   --  Both EBITDA and EBIT have grown in generation and
        transmission, as well as in distribution businesses.

   Growth in operating figures and significant operational
improvements

   --  ENDESA's companies in Latin America were able to leverage on
        the economic recovery and organic growth in these markets,
        raising output and sales by 5.4% and 5.5%, respectively.

   --  Generation margin stands at 20.6 US$/MWh, and Distribution VAD
        at 27.9 US$/MWh, increasing by 11% and 20% respectively,
        versus January-September 2004.

   Cash returns in line with ENDESA's Strategic Plan's targets

   --  Cash returns of ENDESA's Latin American business have totalled
        US$ 209.7 million during the first nine months of this year;
        of these US$ 53.2 million correspond to dividends and US$
        156.5 million to capital reductions.

   Good performance of Enersis and Endesa Chile in the financial
markets

   --  Enersis and Endesa Chile's share price has increased by 34%
        and 63% respectively in the New York Stock Exchange during the
        first nine months of the year, and they are still under review
        for a possible improvement in their credit rating.

   Regulatory progress

   --  Throughout the first nine months of 2005 there has been an
        improvement in the regulatory framework in the Latin American
        countries where the companies, in which ENDESA owns an
        interest, operate, contributing to the development of an
        environment more conducive to higher profitability and growth.

   Streamlining the organisational structure

   --  ENDESA set up Endesa Brasil, S.A. in the third quarter, which
        will act as the holding company for the Group's shareholdings
        in Brazil.

   --  Merger of Chilean companies, Chilectra and Edesur has been
        agreed within the framework of the project for the
        optimisation of organisational structure.

   Development of new capacity

   --  Endesa Chile has signed the EPC contract to build a 377 MW San
        Isidro II CCGT and has started construction of the 32 MW
        Palmucho hydro facilities.

   Business line expected to show strong growth in estimated EBITDA
as of year-end 2005

   --  Latin American's EBITDA is estimated to reach approximately
        Euro 1,750 million by year-end 2005, implying a 15% increase
        vs. 2004.

   TELECOMS

   Sale of the Auna and Smartcom stakes

   --  On November 8th, ENDESA and its partners in Auna completed the
        sale of 80% of the Telecom operator to France Telecom Spain,
        transaction that had been agreed in July 2005. With this sale,
        ENDESA has obtained net capital gains of Euro 1,060 million.

   --  In August, ENDESA also sold 100% of its Chilean mobile
        telephony subsidiary, Smartcom SA, to Mexican operator America
        Movil for US$ 505 million, obtaining a net gain of Euro 51
        million.

   CONSOLIDATED RESULTS

   High growth in net income: +32.8%

   ENDESA reported net income of Euro 1,556 million in the first nine
months of 2005, a rise of 32.8% compared to the same period in 2004.
-0-
*T
NET INCOME
----------------------------------------------------------------------
                                            % of total  % of total Net
                                 % Chg vs    Net Income     Income
(Euro Million)       Jan-Sep05    Jan-Sep04  Jan-Sep04     Jan-Sep05
----------------------------------------------------------------------
Spain and Portugal     1,051       24.4        72.1         67.5
----------------------------------------------------------------------
Rest of Europe           283      102.1        11.9         18.2
----------------------------------------------------------------------
Latin America            186       70.6         9.3         12.0
----------------------------------------------------------------------
Other businesses          36      (53.9)        6.7          2.3
----------------------------------------------------------------------
TOTAL                  1,556       32.8       100.0        100.0
----------------------------------------------------------------------
*T

   All the company's electricity businesses recorded strong growth in
net income, with increases of 24.4% for Spain and Portugal, 102.1% for
Europe and 70.6% for Latin America.
   The distribution of net income between the different electricity
businesses is balanced, confirming the economic logic behind the
company's geographical diversification strategy and current
international footprint.
   January-September 2005 results assume the recovery of the amounts
contributed to finance the tariff deficit in Spain, estimated at Euro
2,500 million, of which Euro 1,104 million corresponds to ENDESA.
   The Company has booked this amount following the same accounting
criteria as the other companies in the industry. Not considering the
deficit as revenue, ENDESA's net income would be Euro 838 million,
28.5% less than in January-September 2004.
   Companies financing the regulated activities tariff deficit are
entitled to a full recognition, as it is reflected in ENDESA's
accounts. However, for the purpose of reflecting sensitivities to
ENDESA's results to other deficit recognition assumptions, and without
meaning that it would imply any resignation of the right to the full
recover of the deficit, it is worth noting that even if legislation
establishes at Euro 36/MWh the remuneration to the hydro and nuclear
power production, with the consequent effect on purchases at the
"pool" done by the supply business, (hypothesis considered in ENDESA's
strategic plan "ENDESA: Stronger business, greater value" released on
3 October 2005), the Company's total net income would be Euro 1,377
million, up 18% vs. the same period last year.

   Strong growth in generation (+5.4%) and electricity sales (+13.8%)

   The rise in net income was driven by strong growth in generation
(+5.4%) and total electricity sales (+13.8%). This increase was
particularly strong in ENDESA's non-Spanish operations.
-0-
*T
ELECTRICITY PRODUCTION AND SALES
----------------------------------------------------------------------
                           Production                 Sales
----------------------------------------------------------------------
                                % chg. vs.               % chg. vs.
                       GWh      Jan-Sep04     GWh        Jan-Sep04
----------------------------------------------------------------------
Spain and Portugal    69,769       (3.6)     75,381          3.7
----------------------------------------------------------------------
Rest of Europe        24,410       43.4      34,314         64.6
----------------------------------------------------------------------
Latin America         42,870        5.4      41,033          5.5
----------------------------------------------------------------------
TOTAL                137,049        5.4     150,728         13.8
----------------------------------------------------------------------
*T

   The fall in generation in Spain and Portugal was due to the
temporary shutdown of some plants in the second and third quarters,
mainly as a result of inspection, maintenance and/or reconversion
work.
   In addition, strong growth in generation in Europe (+43.4%) was
largely due to a 9.2% increase in generation at Endesa Italia, which
reflects that its repowering programme is nearing completion, plus the
contribution from ENDESA's French subsidiary Snet, which in the period
January-September 2004 only contributed for that month as it was not
fully consolidated in ENDESA until 1st September 2004.
   Finally, in Latin America the growth in generation (+5.4%) was due
to a higher utilisation rate in order to meet rising demand, along
with contributions from the Ralco hydro plant in Chile and the newly
converted open cycle gas generator at Etevensa in Peru, both of which
came on stream towards the end of last year.

   Generation/sales balance

   ENDESA has generated 91% of all its electricity sales in the first
nine months of 2005. This balanced situation between production and
demand should considerably reduce risk in its electricity business.
This is a significant competitive advantage in the Spanish market,
where ENDESA generated 93% of the electricity it sold in the first
nine months of 2005.
   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 at present.

   Revenues growth outstrips costs

   Total sales amounted to Euro 12,643 million in the first nine
months of 2005 up 26.8% compared to the same period in 2004.
   One should note that the electricity business in Spain and
Portugal's sales include sales from Spain and Portugal to other EU
markets.
   The increase in sales was greater in economic than in operating
terms, as prices were raised to offset the increase in costs.
   Growth in revenues covered both fuel costs, which were up by 29.6%
during the first nine months of this year compared to the period
Jan-Sep 2004 and 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 (+16.2%), EBITDA (+15.9%) and EBIT (+19.4%).
-0-
*T
                      Gross margin       EBITDA            EBIT
----------------------------------------------------------------------
(Euro million)             % chg.          % chg.
                             vs.            vs.            % chg. vs.
                   Jan-Sep Jan-Sep Jan-Sep Jan-Sep Jan-Sep   Jan-Sep
                     05      04      05      04      05        04
----------------------------------------------------------------------
Spain and Portugal   3,659    6.6    2,380    6.3    1,634    12.9
----------------------------------------------------------------------
Rest of Europe         944   70.4      702   68.8      515    62.0
----------------------------------------------------------------------
Latin America        1,893   18.2    1,323   15.6      964    14.8
----------------------------------------------------------------------
Other businesses         2    N/A       (6)   N/A       (7)    N/A
----------------------------------------------------------------------
TOTAL                6,498   16.2    4,399   15.9    3,106    19.4
----------------------------------------------------------------------
*T

   Financial results: 12% improvement

   ENDESA reported negative financial results of Euro 748 million for
the first nine months of 2005, a 12.0% improvement on the same period
of 2004.
   Net financial expenses totalled Euro 814 million, 2.6% lower than
in the same period of 2004.
   The average cost of all of ENDESA's financial debt was 5.41% in
January-September 2005. Stripping out Enersis Group debt, it stood at
4.06%.

   Cash flow: growth of 16.3%

   ENDESA generated operating cash flow of Euro 2,929 million through
September 2005, a rise of 16.3% on January-September 2004.
   Cash flow rose sharply in all the Company's electricity
businesses.
-0-
*T
CASH FLOW
----------------------------------------------------------------------
(Euro million)                                         % Chg. vs Jan-
                                          Jan-Sep 05        Sep04
----------------------------------------------------------------------
Spain and Portugal                          1,669             13.5
----------------------------------------------------------------------
Rest of Europe                                502             34.2
----------------------------------------------------------------------
Latin America                                 766             15.2
----------------------------------------------------------------------
Other businesses                               (8)             N/A
----------------------------------------------------------------------
TOTAL                                       2,929             16.3
----------------------------------------------------------------------
*T

   Investment of Euro 2,420 million, 72.1% in Spain and Portugal

   Total investment by ENDESA amounted to Euro 2,420 million in the
first nine months of 2005.
   Of this amount, Euro 2,078 million was in capex and the remaining
Euro 342 million in financial investments.
   ENDESA is entitled to finance Euro 1,104 million of the tariff
deficit in revenues from regulated activities in Spain. As of 30
September 2005, ENDESA had paid out Euro 744 million to finance the
tariff deficit.

   Financial structure: fall in leverage

   As of 30 September 2005, ENDESA had a net debt of Euro 20,419
million, which is Euro 1,721 million higher than at the beginning of
the year.
   Of this rise, Euro 880 million was due to the euro's depreciation
vis-a-vis other currencies in which ENDESA's debt - and that of its
subsidiaries, mainly Enersis - is denominated. The remainder of the
increase is the consequence of the tariff deficit financing.

   The breakdown of debt by business line is as follows as of 30
September 2005:
-0-
*T
BREAKDOWN BY BUSINESS OF ENDESA'S NET DEBT
----------------------------------------------------------------------
                                             Euro million
----------------------------------------------------------------------
                                                        Change
                                                          in
                                      30-09-05 01-01-05  euros  % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                11,452    9,586 1,866   19.5
----------------------------------------------------------------------
Electricity business in Europe            1,480    2,123  (643) (30.3)
ENDESA Italia                               995    1,293  (298) (23.0)
Other                                       485      830  (345) (41.6)
----------------------------------------------------------------------
Electricity business in Latin America     6,237    5,350   887   16.6
Enersis group                             5,063    4,081   982   24.1
Other                                     1,174    1,269   (95)  (7.5)
----------------------------------------------------------------------
Other businesses                          1,250    1,639  (389) (23.7)
----------------------------------------------------------------------
TOTAL                                    20,419   18,698 1,721    9.2
----------------------------------------------------------------------
*T

   The average cost of Endesa's total debt is 5.41% for the first
nine months of 2005, and the average cost of Enersis Group's debt is
9.33%. Disregarding Enersis Group, Endesa's average cost of debt
stands at 4.06% in the period.

   The breakdown of the debt by currency and interest rate as of 30
September 2005, was as follows:
-0-
*T
STRUCTURE OF ENDESA'S NET DEBT
----------------------------------------------------------------------
                        ENDESA           
                      and direct         Group            Total
                      subsidiaries       Enersis       ENDESA group
----------------------------------------------------------------------
(Euro million)      Jan-Sep  % of   Jan-Sep  % of   Jan-Sep
                       05    total    05     total    05   % of total
----------------------------------------------------------------------
Euro                 14,918      97       3       0  14,921        73
----------------------------------------------------------------------
Dollar                  438       3   2,427      48   2,865        14
----------------------------------------------------------------------
Other currencies          0       0   2,633      52   2,633        13
----------------------------------------------------------------------
Total                15,356     100   5,063     100  20,419       100
----------------------------------------------------------------------
Fixed rate           10,162      66   4,201      83  14,363        70
----------------------------------------------------------------------
Hedged                1,808      12     322       6   2,130        11
----------------------------------------------------------------------
Variable              3,386      22     540      11   3,926        19
----------------------------------------------------------------------
TOTAL                15,356     100   5,063     100  20,419       100
----------------------------------------------------------------------
Avg. life (years)          5.3             5.7               5.4
----------------------------------------------------------------------
*T

   The average life of the ENDESA Group's debt was 5.4 years in the
first nine months of 2005.
   ENDESA enjoys a high degree of protection against interest-rate
risk, since 81% of all its debt is either fixed-rate or hedged.
   The cash and cash equivalents held by ENDESA in Spain and its
direct subsidiaries, excluding Enersis, totalled Euro 4,267 million at
the end of the third quarter of 2005. Out of this amount, Euro 2,228
million are undrawn, unconditional lines of credit and Euro 1,500
million correspondes to the syndicated loan transaction completed on
22 April 2005.
   These balances are sufficient to cover maturities due in the next
15 months for this group of companies.
   The cash and cash equivalents held by the Enersis group totalled
Euro 476 million, covering debt maturities for the next months.
   As of 30 September 2005, ENDESA's total equity were Euro 15,121
million, an increase of Euro 2,623 million since the start of the
year.
   This increase lowered ENDESA's financial leverage to 135.0% at 30
September 2005 from 149.6% at the start of the year.
   As a result of the takeover bid by Gas Natural 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, with all
three citing the negative impact of the operation on the Company's
financial situation should the bid go through.
   As a result, at 16 November 2005, ENDESA's debt had 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.

   Disposal of Auna

   On 29th July 2005, ENDESA and the remaining core shareholders of
Spanish telecommunications operator Auna reached an agreement with
Orange, a subsidiary of France Telecom, to sell the mobile telephony
business that this operator carried out through its subsidiary, Amena.
   The sale of a ENDESA's 27.7% stake in Auna was completed on 8
November 2005, after authorisation was obtained from the European
anti-trust bodies. ENDESA made a gross capital gain of Euro 1,206
million (Euro 1,060 million net of taxes) on the Euro 2,221 million
proceeds.
   ENDESA still holds a 5.01% stake in Auna, with a three-year hedge
covenant that guarantees a minimum price equivalent to 90% of the
price per share paid by France Telecom in the initial acquisition plus
an annual return of 4.5%.
   As a result, at 30 September 2005, the stake in Auna was not
anymore recorded through the equity method. According to certain
covenants in the agreement with France Telecom, Endesa did not have
significantly influence over Auna's management as of September 30,
2005.
   In the balance sheet as of 30 September 2005, Endesa recorded
27.7% of its stake in Auna as "assets held for sale" at its historical
cost of Euro 913 million. ENDESA has booked the remaining 5.01% of its
stake in Auna not included as part of the sale agreement as a
financial investment at the market value inherent in the sale to
France Telecom, recording gross hidden gains against reserves of Euro
211 million (Euro 185 million after tax).

   Asset disposal: Euro 917 million

   ENDESA has followed during the first nine months of the period its
strategy of divesting assets, resulting in disposals totalling Euro
917 million in the first nine months of 2005, and generating a gross
capital gain of Euro 207 million.
   The main disposal in the third quarter of 2005 was the sale of
100% of Smartcom to Mexican operator America Movil for US$ 505 million
(Euro 408 million), producing a gross capital loss of Euro 3 million
(after-tax gain of Euro 51 million).

   Creation of Bolonia Real Estate

   ENDESA has set up the Bolonia Real Estate Company to handle
various real estate assets such as old production plants, mines and
distribution facilities that are already or will soon be idle.
   It is worth mentioning that ENDESA's real estate assets portfolio
in Spain is comprised of 43 million square meters and that the Company
has identified 13 estates of 3 million square meters valued at Euro
750 million, once all urban administrative requirements are met.
   ENDESA recorded the assets managed under Bolonia Real Estate as
real estate investments at their historical cost of Euro 4 million.

   Progress with the Strategic Plan

   The solid earnings obtained by ENDESA in the first nine months of
2005 and the expectations for the 4th quarter indicate that the
Company is already obtaining a high degree of the terms presented in
the Strategic Plan, as per the document, "ENDESA: Stronger business,
greater value".
   Companies that have contributed to the tariff deficit have a right
to full recognition, as it is reflected in ENDESA's accounts. However,
for the purpose of reflecting the sensitivities of ENDESA's results to
other deficit recognition assumptions, and without meaning that it
would imply any resignation of the right to the full recover of the
deficit, we have analysed two different scenarios below. The first
scenario includes the assumption in the aforementioned document
"ENDESA: Stronger business, greater value" of establishing
remuneration for hydro and nuclear power at Euro 36/MWh with the
consequent effect on purchases at the "pool" done by the supply
business, while the second scenario considers tariff deficit recovery
without taking into account the effects of this assumption.

   --  According to these estimates, EBITDA would range from Euro
        5,400 million to Euro 5,750 million, which implies a 20-27%
        increase on 2004 results.

   --  This means obtaining 30-41% of the targeted increase in EBITDA
        in the 2004-2009 Strategic Plan in only a year.

   --  Additionally, net income excluding income from the divestiture
        of Auna, would range from Euro 1,450 to Euro 1,700 million,
        implying growth of 15%-35% vs. 2004.

   --  If capital gains from the divestiture of Auna are included,
        net income growth will be above 100%.

   --  Debt would be around Euro 18,000 million by year-end, below
        the Euro 18,698 million figure at the beginning of the period.

   --  Year-end financial leverage will be under 1.2, which is below
        the 1.4 maximum level targeted in the Strategic Plan.

   --  High growth in EBITDA is expected in all businesses: in Spain
        and Portugal EBITDA is expected to range from Euro 2,800
        million to Euro 3,150 million, implying 13%-27% growth; in
        Europe it is expected to reach around Euro 850 million,
        implying 60% growth; and in Latin America it is expected to
        reach around Euro 1,750 million, implying 15% growth.

   --  Net capital gains of Euro 1,060 million obtained from the sale
        of its telecom business, Auna, and the expected increase in
        net income, will clearly help ENDESA to accomplish its
        commitment to distribute Euro 7 billion in dividends in the
        next 5 years.

   RESULTS BY BUSINESS LINE

   ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL

   Key operating and regulatory facts for January-September 2005

   High operating efficiency

   ENDESA maintained its leading position in the Spanish electricity
market in the first nine months of 2005, with a 37.8% market share in
ordinary regime electricity generation, 42.7% in distribution, 36.7%
in sales to deregulated clients and 40.7% in total sales to end
customers.
   Output in Spain totalled 69,769 GWh, 3.6% lower than in
January-September 2004 given the low level of rainfall this year.
ENDESA was also hit by downtime at group 4 of its plant in Puentes
which was being converted into imported coal, and at Vandellos, from
last March until last August, for technical reasons.
   ENDESA has continued to improve its operating efficiency in line
with the efficiency plan implemented in June, the results of which
began feeding through in the third quarter. In the third quarter of
2005, ENDESA has been able to achieve a reduction of fixed costs of 3%
vs. 3Q 2004 and 6.3% vs. 2Q 2005. Specifically, other fixed costs have
been 14.2% lower than in 3Q 2004.

   Progress in New Capacity Plan

   The Company has made further progress with its 2005-2009 New
Capacity Plan.
   The first 350 MW unit converted to imported coal at its plant in
As Pontes (A Coruna) was connected to the grid in the third quarter.
Work is also underway on the construction of an 800 MW CCGT at the
same facility and on the 400 MW Cristobal Colon CCGT in Huelva, which
is expected to start trial operations by year-end.
   The Portuguese anti-trust authorities also gave the green light to
ENDESA's acquisition of the Portuguese renewable energies company
Finerge in the third quarter of 2005. Finerge has installed capacity
of 60 MW.
   ENDESA is also adding another 305 MW of wind farm capacity in the
Iberian Mainland. Out of which 52 MW will come on stream before the
end of the year.

   High growth rates in ENDESA's distribution markets

   ENDESA's total demand in the first nine months of 2005 was 83,731
GWh, 5.6% higher than in the same period of 2004, once again showing
its strong growth potential in the Spanish market.
   The number of customers served by ENDESA's distribution facilities
grew by 185,961 from the same period last year. Its number of
deregulated customers at the end of the third quarter was 962,573.

   Improvement in quality of supply

   The Quality Plan carried out over the last few years, which was
reinforced in the second half of 2004, has contributed to a
significant improvement in the Company's quality of supply during the
first nine months of 2005. This becomes especially relevant in a year
with such a high growth in demand.
   ENDESA's system average interruption duration index (SAIDI)
improved 16% compared to the first nine months of last year.
   The Company significantly improved the quality of supply in
Andalusia and Catalonia, where the SAIDI improved by 19%.
   ENDESA's retention rate for customers switching to the deregulated
market was 86.9%, higher than the average for other companies in this
industry, reflecting a high degree of loyalty towards the Company.

   Net income up 24.4%

   Net income from the electricity business in Spain and Portugal in
January-September 2005 totalled Euro 1,051 million, up 24.4% on the
same period in 2004. This figure represents 67.5% of ENDESA's total
net income.
   ENDESA divested Euro 120 million worth of Spanish non-core assets
in the first nine months of 2005, booking a gross capital gain of Euro
102 million.

   EBIT: Euro 1,634 million (+12.9%)

   This business posted EBIT of Euro 1,634 million in
January-September 2005, an increase of 12.9% on January-September
2004.
   Sales increased by 23.6% to Euro 6,175 million, largely due to a
rise in volumes and selling prices to end customers, and higher
wholesale prices.
   The increase in sales was sufficient to offset the sharp jump in
fuel costs driven largely higher prices and volumes, and the net cost
of the CO2 emission rights deficit.
   In addition, low rainfall, high fuel costs and the cost of meeting
the CO2 emission rights deficit meant that generation pool prices rose
in average 81.5%.
   Given the limited increase in the electricity tariff (just 1.7%)
the system's costs could not be covered, particularly generation
costs, given the pool price levels. As a result, the industry incurred
an estimated deficit of revenues from regulated activities of Euro
2,500 million, of which Euro 1,104 million corresponds to ENDESA.
   The Company has booked this amount as a recoverable asset
following the same criteria as the rest of the industry. Not
considering the deficit as revenue, net income from ENDESA's
electricity business in Spain and Portugal would have fallen by 60.5%.
   Companies financing the regulated activities tariff deficit are
entitled to a full recognition, as it is reflected in ENDESA's
accounts. However, for the purpose of reflecting sensitivities to
ENDESA's results to other deficit recognition assumptions, and without
meaning that it would imply any resignation of the right to the full
recover of the deficit, it is worth noting that even if legislation
establishes at Euro 36/MWh the remuneration to the hydro and nuclear
power production, with the consequent effect on purchases at the
"pool" done by the supply business, (hypothesis considered in ENDESA's
strategic plan "ENDESA: Stronger business, greater value" released on
3 October 2005), revenues in Spain & Portugal would have been Euro 275
million lower, leaving total net income from the electricity business
in Spain and Portugal at Euro 872 million, 3.2% higher than in
January-September 2004.
   On the other hand, the negative impact on results of low rainfall
and higher fuel costs is limited as the Company enjoys a more balanced
generation mix than its competitors and managed to keep rising costs
under control thanks to its fuel management policy.
   The breakdown of EBIT for ENDESA's electricity business in Spain
and Portugal is explained in the following pages.

   Revenues: 30.6% growth

   Revenues of this business totalled Euro 6,651 million in the nine
months of 2005, 30.6% higher than in the same period of 2004.
   Of this amount, sales accounted for Euro 6,175 million, up 23.6%
from January-September 2004.
-0-
*T
SALES IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                       Euro million
----------------------------------------------------------------------
                               Jan-Sep   Jan-Sep
                                 2005      2004     Change    % Chg
----------------------------------------------------------------------
Mainland generation under Ordinary Regime:
----------------------------------------------------------------------
       Supply to customers in
        deregulated market        1,098       925       173      18.7
----------------------------------------------------------------------
       Supply to regulated
        customers                 2,176     1,387       789      56.9
----------------------------------------------------------------------
Generation in renewables/CHP        151        88        63      71.6
----------------------------------------------------------------------
Regulated revenues from
 distribution                     1,197     1,166        31       2.7
----------------------------------------------------------------------
Non-mainland regulated
 generation                         975       784       191      24.4
----------------------------------------------------------------------
Coal CTC                             17        59       (42)    (71.2)
----------------------------------------------------------------------
Technology CTC                       --       142      (142)   (100.0)
----------------------------------------------------------------------
Supply to deregulated
 customers outside Spain            171       126        45      35.7
----------------------------------------------------------------------
Regulated revenues from gas
 distribution                        32        28         4      14.3
----------------------------------------------------------------------
Gas supply                          216       102       114     111.8
----------------------------------------------------------------------
Other                               142       189       (47)    (24.9)
----------------------------------------------------------------------
TOTAL                             6,175     4,996     1,179      23.6
----------------------------------------------------------------------
*T

   Mainland generation

   Electricity demand in the Spanish mainland system rose by 6.3% in
the first nine months of 2005. Ordinary regime generation increased by
3.0%, while renewables/CHP output was up by 14.4%.
   ENDESA's mainland electricity output in the ordinary regime
reached 57,806 GWh during the period, a 5.4% decrease vs. the first
nine months of 2004.
   The second and third quarters of the current year were
characterized by two unusual factors: the technical breakdown at the
Vandellos plant from March until August, and the downtime of the group
4 in As Pontes plant due to conversion into imported coal work that
concluded in August. All of As Pontes other groups are expected to be
converted by 2008.
   On the other hand, output related to Special Regime
(Renewables/CHP) was ,569 GWh, a 14.2% increase which is in line with
the evolution of the rest of the industry.

   Comparative advantage of ENDESA's generation mix

   Differences between the structure of ENDESA's ordinary regime
mainland output and that of the rest of the industry during the
analysed period reflect the strength of the Company's generation mix
and its greater stability to the recurring sudden changes in rainfall
rates in Spain.
   ENDESA's hydro output fell by 29.9% between January and September
2005 in comparison with the same period in 2004, while output for the
rest of the industry declined by 45.8%. Thermal production in the
industry rose by 39.8% versus an increase of just 6.1% by of ENDESA.

   Contribution of coal plants to covering demand

   The importance of ENDESA's coal-fired plants in meeting demand was
highlighted by the low levels of rainfall seen in the first nine
months of 2005.
   These plants have achieved an availability rate of 86.9%, meeting
the requirements of the system and demonstrating that, despite new
capacity based on CCGTs and wind farms already added to the grid, coal
power plants are still clearly essential in meeting the country's
electricity needs.
   More specifically, output from ENDESA's coal-fired plants has
covered 14.7% of demand in the Iberian Peninsula over the first nine
months of 2005.

   Increase in ENDESA's sales to the pool

   ENDESA's sales to the pool totalled Euro 3,776 million in the
first nine months of 2005, 76.8% higher than in the same period in
2004, due to an 81.3% rise in the average pool price, including the
capacity payment.
   This rise in the pool price was due to higher fuel prices and the
cost of meeting the CO2 emission rights deficit, together with the
effects of the drought, which led to a very limited use of
hydroelectric plants.
   In absolute terms, the average pool price for the first nine
months of 2005 including capacity payments, was Euro 59.33 per MWh vs.
Euro 32.73 per MWh in January-September 2004.
   ENDESA's supply and generation subsidiaries acquired energy from
the pool for a total of Euro 1,600 million, acquisitions that were
offset by the energy sold by the company to the pool. The markets and
time bands were the same in both cases, and the purchase price
therefore matched the selling price.
   Amounts derived from these sales are neutralised with purchases
made by the supply subsidiary and generator. The pool sales recorded
in the consolidated income statement for the first nine months of 2005
thus totalled Euro 2,176 million.

   Output of ENDESA's renewables/CHP sites

   Renewable/CHP subsidiaries fully consolidated by ENDESA produced
1,569 GWh in the first nine months of 2005. That figure represents a
14.2% increase in relation to the same period of 2004. ENDESA also has
holdings in other renewable/CHP companies, which generated 2,912 GWh
in the first nine months.
   Revenues from sales of renewable/CHP energy generated by
consolidated companies totalled Euro 151 million, 71.6% more than in
the same period in 2004, EBIT rose 209.5% to Euro 65 million.

   Supply to deregulated customers

   ENDESA had 962,573 deregulated clients as of 30 September 2005.
Out of which 913.918 are customers from the mainland liberalised
market, 47,368 from the non-mainland systems, and 2,007 are form other
European liberalised markets outside Spain.
   ENDESA's sales to these customers totalled 27,442 GWh in the first
nine months of 2005, 20.1% more than in the same period of 2004. Of
this amount, 24,383 GWh were in the Spanish deregulated market, up
21.0% on the same period of 2004, and 3,059 GWh in other deregulated
European markets, up 12.9%.
   Revenues from supply to deregulated customers in Spain totalled
Euro 1,178 million, a 23.9% increase on the first nine months in 2004.
   Out of the revenues from supply to deregulated customers in Spain,
Euro 1,098 million corresponded to the mainland liberalised market and
Euro 80 million to the non-mainland market.
   Finally, revenues from sales to deregulated European customers
outside Spain stood at Euro 171 million, an increase of 35.7% on
January-September 2004.

   Distribution

   ENDESA distributed 83,731 GWh of electricity in the Spanish market
in the first nine months of 2005, a 5.6% increase on the same period
of 2004.
   Revenues from regulated distribution increased to Euro 1,197
million, 2.7% more than in January-September 2004. This minor increase
does not reflect the investment effort, and also the operational and
maintenance work required to increase the security and quality of
supply.
   Consequently, in order to attain an objective shared by all
players in the electricity market, and in whose pursuit ENDESA is
playing a particularly significant role, (having invested Euro 904
million in the first nine months of 2005) new regulation governing
distribution should recognise substantial investment effort via
adequate remuneration.
   ENDESA supplied 47,939 GWh to customers in the regulated market.
However, in accordance with IFRS, its turnover on this business was
not booked as revenue, as the only revenue from distribution is the
remuneration already included in the tariff. The rest of the turnover
merely corresponds to costs incurred and passed on.

   Non-mainland generation

   ENDESA's output in non-mainland systems in the first nine months
of 2005 was 10,394 GWh, 5.2% more than in the same period of 2004.
Sales rose 24.4% to Euro 975 million.
   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 and the higher fuel costs.
   The Royal Decree lays down the general principles that must be
applied to determine the compensation regarding these circumstances.
Although the exact methodology for quantifying this compensation is
still being developed, a draft Ministerial Order has now been prepared
by the Ministry of Industry, and is currently being analysed by the
Comision Nacional de Energia (CNE).
   ENDESA's January-September 2005 accounts include revenues of Euro
110 million in addition to the compensation envisaged in the 2005
electricity tariff. This has been calculated, with conservative
criteria, by applying the methodology set out in the draft regulation
mentioned above.
   No additional sum was included for previous years over and above
the figure recorded as of year-end 2004. The Company awaits the
definitive regulatory outcome due to be released in the following
months.

   Technological CTCs and deficit on regulated revenues

   As already mentioned, in the first nine months of 2005 regulated
revenues were not sufficient to offset system costs, leaving an
estimated deficit of Euro 2,500 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 1,104 million).
   In the opinion of ENDESA's legal advisers, taking into account the
legal nature and background of this financing, as well as legal
precedent, the Company is entitled to the full recovery of the sums
contributed. The government should, however, establish a specific
procedure for the return of these sums, as it did in 2002.
   Other Spanish utilities also support our view. For this reason,
ENDESA's accounts as of 30 September 2005 include a financial asset of
Euro 1,104 million to reflect its right to recover the amounts
contributed in relation to the regulated revenues deficit.
   In the first nine months of 2004, ENDESA's technological CTC
revenues totalled Euro 142 million.

   Gas distribution and supply

   ENDESA sold 15,289 GWh of gas up to September 2005, through
companies who are consolidated in the Group; this amount represents a
56.1% increase on the same period in 2004.
   Of this amount, 13,355 GWh were sold in the deregulated market, an
increase of 69.3%, and 1,934 GWh in the regulated market, an increase
of 1.4%. In addition 791 GWh of total sales correspond to companies
that are not fully consolidated given their limited contribution to
the Group total.
   Consequently, total sales in the regulated market amounted to
2,725 GWh a 0.3% increase versus January-September 2004.
   The 16,080 GWh sold in both markets, together with the 16,637 GWh
of gas consumed by ENDESA's generation plants, amount to a total of
32,717 GWh, implying an 11.9% share of the Spanish natural gas market.
The target of 12% by 2007 envisaged in the Company's Strategic Plan
has therefore already been achieved.
   Revenues from gas sales in the deregulated market in the first
nine months of 2005 totalled Euro 216 million, an increase of 111.8%
on the same period in 2004.
   Revenues from regulated gas distribution rose 14.3% to Euro 32
million.

   Other operating revenues

   Other operating revenues in January-September 2005 totalled Euro
476 million, up Euro 381 million on January-September 2004.
   Included under this heading is Euro 346 million, corresponding to
a portion of the CO2 emission rights allocated to ENDESA within the
Spanish Emissions NAP for the first nine months of the year, which are
recorded as revenue.
   Revenues from emissions allocated to cover the Spanish mainland
are recorded at market price as of the beginning of 2005, while
revenues from emissions allocated to non-mainland are recorded at
average market price for the year.

   Operating expenses

   The breakdown of operating expenses in the Spanish and Portuguese
business for the first nine months of 2005 is as follows:
-0-
*T
OPERATING EXPENSE IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                       Euro million
----------------------------------------------------------------------
                                 Jan-      Jan-   Change in
                                Sep2005   Sep2004    Euros    % Chg
----------------------------------------------------------------------
Purchases and services            2,992     1,659     1,333      80.4
----------------------------------------------------------------------
 Power purchases                    649       290       359     123.8
----------------------------------------------------------------------
 Fuel consumption                 1,493     1,107       386      34.9
----------------------------------------------------------------------
 Power transmission expenses        176       132        44      33.3
----------------------------------------------------------------------
 Other supplies and services        674       130       544     418.5
----------------------------------------------------------------------
Personnel expenses                  673       605        68      11.2
----------------------------------------------------------------------
Other operating expenses            706       680        26       3.8
----------------------------------------------------------------------
Depreciation and amortization       746       792       (46)     (5.8)
----------------------------------------------------------------------
TOTAL                             5,117     3,736     1,381      37.0
----------------------------------------------------------------------
*T

   We would like to highlight that ENDESA's fuel unit cost for
mainland generation in ordinary regime for the first nine months of
2005 stood at EUR 16.2/MWh, 24.7% below the rest of the industry.

   Power purchases

   Power purchases in the period rose by 123.8% to Euro 649 million.

   The main component under this heading relates to gas purchases for
supplying deregulated customers, which rose 128.9% due to the 69.3%
increase in sales to this type of client and the increase in natural
gas prices.
   The rest corresponds to transactions made in the wholesale
generation market. The increase of these purchases is related with the
81.3% increase in the average pool price.

   Fuel consumption

   Fuel consumption amounted to Euro 1,493 million in the first nine
months of 2005, an increase of 34.9% vs. the same period in 2004.
   This increase is due to the rise in fuel-oil production (higher
unit costs than other technologies) and to the generalized increase in
the prices of raw materials in international markets. The impact of
the increase in prices has been counterbalanced by the company's
active fuel purchasing policy, which has enabled the company to beat
market prices.

   Other supplies and services

   Other supplies and services expenses totalled Euro 674 million in
the first nine months, up Euro 544 million vs. the same period last
year.
   This increase was due to the booking of Euro 477 million in
expenses from emission rights required to cover the CO2 emissions made
in the first nine months of the year, which totalled 39.2 million
tonnes, out of which 29.8 million tonnes correspond to the mainland
and 9.4 million tonnes for non-mainland emissions.

   Expenses for mainland emissions were valued as follows:

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

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

   --  The portion of these emissions for which ENDESA does not own
        rights was recorded at the market price of these rights as of
        30 September 2005, Euro 22.85 per tonne.

   As non-mainland territories were granted sufficient emission
rights, an expense was recorded for those made in the first nine
months of this year, calculated at the average price of these rights
during this period, which was the same amount as the revenue recorded
for freely assigned emission rights.
   The net effect of revenues and expenses booked in
January-September 2005 to cover CO2 emissions was Euro 131 million,
corresponding to an estimated rights deficit of 5.9 million tonnes.

   Personnel expenses

   As of 30 September 2005, the workforce in Spain and Portugal
totalled 12,730 employees, down 1.2% on 2004 year-end.
   Personnel expenses amounted to Euro 673 million in
January-September 2005, an increase of 11.2% vs. the same period in
2004. The increase was principally due to factors not related to
regular wages.
   From January to September 2005, an extra Euro 22 million was
recorded in provisions to cover future pension or early-retirement
commitments, primarily to offset the effects of higher real inflation
over the period than that envisaged in the actuarial studies used to
calculate this liability at the close of 2004. In 2004, this factor
was only recorded at year-end.
   Stripping out these provisions and other non-recurring expense
items, mainly related to variables that affect future pensions or
early-retirement commitments, personnel costs rose by 4.5%.

   Other fixed operating expenses

   Other fixed operating expenses totalled Euro 706 million in the
first nine months of 2005, an increase of 3.8% with respect to the
same period in 2004.
   The cost reduction plan began to bear fruit in the third quarter
of 2005 as evidenced by the 14.2% decline in other fixed costs for
this quarter vs. the same quarter last year.

   Net financial expenses: 10.3% improvement

   ENDESA reported a net financial loss for the first nine months of
2005 of Euro 359 million, of which, Euro 356 million corresponds to
net financial expenses. This includes Euro 45 million for the cost of
preferred shares, which are considered as debt in the 2005 accounts,
and are therefore recorded as financial expenses.
   As regulation IAS 32 was not applied last year, in 3Q04 these
preferred shares were booked as minority interests and not as
financial debt.
   On a like-for-like basis, net financial expenses decreased by Euro
86 million in January-September 2005, i.e. 19.5%.
   As of 30 September 2005, net debt in Spain and Portugal stood at
Euro 11,452 million, up from Euro 9,586 million at the beginning of
this year. This rise can be explained by the Euro 744 million paid
during the first nine months of the year to finance the tariff
deficit, and the major distribution investment made in the period as
part of ENDESA's Quality Excellence Plan.

   Equity-accounted income

   Equity-accounted income for ENDESA's electricity business in Spain
and Portugal totalled Euro 42 million. This heading includes, among
others, Euro 8 million in income from subsidiaries in Portugal and
Euro 11 million from renewables/CHP generation subsidiaries.
Equity-accounted income rose by 31.3% vs. the same period last year.

   Asset disposals: Euro 102 million in capital gains

   In the first nine months of 2005, ENDESA sold Euro 120 million
worth of non-strategic electricity assets from its business in Spain
and Portugal, posting gross capital gains of Euro 102 million. Among
these we highlight the sale of land in Palma de Mallorca where GESA's
headquarters were formerly located and the sale of the "Lepanto"
building in Barcelona, generating gross capital gains of Euro 89
million (Euro 75 million net of taxes).
   In addition, ENDESA agreed to sell EDP the 49% stake held by
Endesa Gas in Portuguese company, NQF Gas, for Euro 57 million. The
deal is only pending to the materialization of certain conditions of
the agreement. As a result, ENDESA ceased to account for the NQF stake
under the equity method instead booking the investment under "assets
held for sale". As of 30 September 2005, ENDESA's stake in NQF Gas had
a book value of Euro 21 million. The corresponding capital gain is not
reflected in the company's financial statements as of 30 September
2005.

   Cash flow: Euro 1,669 million

   Cash flow from operations from the Spanish and Portuguese
electricity business amounted to Euro 1,669 million in
January-September 2005, an increase of 13.5% vs. the same period in
2004.

   Investments: 70% increase in new generation capacity and 59.9%
increase in distribution quality improvement

   Total investment in Spain and Portugal reached Euro 1,746 million
in the first nine months of 2005, up 62.7% on the same period last
year.
-0-
*T
TOTAL INVESTMENT IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                    Euro million
----------------------------------------------------------------------
                              Jan-Sep2005 Jan-Sep 2004      % Chg
----------------------------------------------------------------------
Capex                             1,484       953            55.7
----------------------------------------------------------------------
Intangibles                          66        21           214.3
----------------------------------------------------------------------
Financial                           196        99            98.0
----------------------------------------------------------------------
Finerge                             151         -             N/A
----------------------------------------------------------------------
Total investments                 1,746     1,073            62.7
----------------------------------------------------------------------

CAPEX IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
                                     Euro million
----------------------------------------------------------------------
                              Jan-Sep2005  Jan-Sep 2004     % Chg
----------------------------------------------------------------------
Generation                          544       320            70.0
----------------------------------------------------------------------
 Ordinary regime                    491       224           119.2
----------------------------------------------------------------------
 Renewables/CHP                      53        96           (44.8)
----------------------------------------------------------------------
Distribution                        916       573            59.9
----------------------------------------------------------------------
Others                               24        60           (60.0)
----------------------------------------------------------------------
Total                             1,484       953            55.7
----------------------------------------------------------------------
*T

   85% of total investment was capex used in developing or improving
electricity generation and distribution facilities, in order to
maintain ENDESA's position of leadership in the Spanish market.
   The capex breakdown reflects the considerable effort made by the
Company over the last few years to improve its service quality, with
investment in distribution facilities accounting for 61.7% of the
total.
   Additionally, it is significant the capex done by ENDESA's to
increase its generation capacity; among which worth mentioning are:
(i) the conversion to imported coal of group 4 and construction of 800
MWs of CCGT in As Pontes, (ii) the construction of 400MW CCGT in the
Colon plant and (iii) the capacity increase of special regime
generation.
   The newly consolidated investment relates to the acquisition
during the third quarter of this year of Portuguese renewables
Company, Finerge, for Euro 151 million.
   Although not included in the figures above, the financing of the
tariff deficit is also booked as a financial investment; therefore, an
additional Euro 1,104 million was accrued under this heading up to 30
September 2005.

   Strong EBITDA growth for the year 2005

   According to current estimates, Spain & Portugal's EBITDA would
range from Euro 2,800 million to Euro 3,150 million by year-end 2005,
implying a 13% to 27% increase vs. 2004.

   ELECTRICITY BUSINESS IN EUROPE

   Excellent results and sound outlook for growth

   In the rest of Europe, ENDESA focused on its two main strategic
goals: consolidating its position in this market and seeking new
growth opportunities.
   With regards to Endesa Italia, it is worth mentioning the strong
growth achieved in main operating figures during the period: installed
capacity has increased by 11%, electricity output by 9.2% and sales by
18.2%.
   On the other hand, in 3Q05, ENDESA and the Italian group Merloni
signed an agreement pursuant to which ENDESA will acquire 51% of the
Italian company MF Power, owner of three Italian wind farms with a
total capacity of 60 MW.
   Moreover, the construction of two combined cycle groups, 400 MW
each, in Scandale (Calabria) advanced on schedule. This project was
acquired at the end of December 2004 by ENDESA and ASM Brescia with a
50% stake each. Likewise, further progress was made on the
construction of two of three wind farms for the company IDAS according
to the contract that awarded 100% to Endesa Italia at the end of the
same month. The two farms will have a total capacity of 56 MW and are
expected to be commissioned by mid 2006.
   In addition, the Company achieved several other relevant
milestones in the first six months of the year:

   --  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 holds an
        80% stake in Endesa Italia. The transaction implies a value
        for ENDESA Italia of Euro 2,989 million, 36.4% higher than the
        price ENDESA paid for its original stake in the Italian group
        in 2001.

   --  The repowering work to convert the Ostiglia plant's group 3 to
        a 400MW combined cycle generator was completed. Group 6 of the
        Tavazzano power plant in Italy, which was converted to
        combined cycle, began pilot testing. It is expected to come
        on-stream in the fourth quarter of this year.

   --  An agreement was signed with the Merloni group to supply
        electricity to the Italian retail market. The supply base for
        the power sold will be Endesa Italia's generation portfolio.
        The Merloni Group contributes with a portfolio of more than
        2,000 customers and sales volumes 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% of the project's company and
        an off-take agreement up to 2bcm of the plant's regasification
        capacity.

   --  Endesa Italia distributed a dividend of Euro 102 million in
        February.

   Initiatives undertaken at Snet (65% owned by ENDESA) during the
period fell under the auspices of the Industrial Plan presented at the
beginning of 2005, the purpose of which is to develop new capacity by
means of the future use of its current sites in order to achieve total
new capacity of 2,000 MW in combined cycle plants and 200 MW in
renewables/CHP.
   The following features of this plan, among others, were carried
out in Snet in the first six months of the year: the contract to sell
electricity to EDF was renegotiated, a coal supply contract was
signed, several agreements were reached with trade unions to ensure
that labour conditions would remain stable and targets for workforce
restructuring could be met, the merger of the three operating
companies (Setne, Setcm and Snet itself) was initiated, and
authorisation was obtained to commence construction of the Lehaucourt
wind farm, which will have a total capacity of 9.2MW.
   In addition on 29 July, already in the third quarter, the French
generator's Board of Directors paid out an interim dividend of Euro 21
million, of which Euro 14 million corresponded to Endesa Europa.
   On September 23rd, Snet completed the sale of its 23.62% stake in
power generator Sechilienne-Sidec to Ecofin Ltd. for Euro 104 million.
   In addition, during the third quarter of 2005 the valuation of
Snet's assets required to calculate goodwill yielding a figure of Euro
185 million.
   Finally, in line with its strategic objective of seeking new
sources of growth in Europe, ENDESA will participate on an exclusive
basis in the upcoming negotiations related to the privatisation of the
Dolna Odra in Poland, with installed capacity of 1,960 MW.

   Net income: up 102.1%

   Net income from the electricity business in Europe totalled Euro
283 million in the first nine months of 2005, an increase of 102.1%
when compared to the same period in the previous year.

   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)
----------------------------------------------------------------------
           Jan-Sep   Jan-Sep             Jan-Sep   Jan-Sep
             2005      2004     % Chg      2005      2004     % Chg
----------------------------------------------------------------------
Italy        17,329    15,872      9.12    23,153    19,589      18.2
----------------------------------------------------------------------
France        5,927     1,078     449.8    10,007     1,189     741.6
----------------------------------------------------------------------
Poland*       1,154        70   1,548.6     1,154        70   1,548.6
----------------------------------------------------------------------
Total        24,410    17,020      43.4    34,314    20,848      64.6
----------------------------------------------------------------------
(*) ENDESA is present in the generation business in Poland through the
 Bialystock co-generation plant, which is controlled by Snet.
----------------------------------------------------------------------
*T

   EBIT: up 62%

   EBITDA and EBIT for the ENDESA's European electricity business for
the first nine months of 2005, can be broken down as follows:
-0-
*T
EBITDA & EBIT IN EUROPE
----------------------------------------------------------------------
                         EBITDA                       EBIT
                     (Euro million)              (Euro million)
----------------------------------------------------------------------
               Jan-Sep   Jan-Sep          Jan-Sep  Jan-Sep
                  2005    2004     % Chg     2005     2004    % Chg
----------------------------------------------------------------------
Endesa Italia       561      413     35.8      456      324      40.7
----------------------------------------------------------------------
Snet                136       13    946.2       54        4   1,250.0
----------------------------------------------------------------------
Trading              20        -      N/A       20        -       N/A
----------------------------------------------------------------------
Holding &
 others             (15)     (10)   (50.0)     (15)     (10)    (50.0)
----------------------------------------------------------------------
Total               702      416     68.8      515      318      62.0
----------------------------------------------------------------------
*T

   Trading operations have added Euro 20 million to EBIT. These
operations can be executed without assuming any risks due to ENDESA's
generation assets in Italy and France.

   Positive performance of ENDESA Italia continues

   The following table shows main components of EBIT at Endesa Italia
during the first nine months of 2005.
-0-
*T
ENDESA ITALIA KEY DATA
----------------------------------------------------------------------
                                           Euro million
----------------------------------------------------------------------
                               Jan-Sep   Jan-Sep  Change in
                                 2005      2004      euros    % Chg
----------------------------------------------------------------------
Revenues                          1,661     1,248       413      33.1
----------------------------------------------------------------------
Energy purchases                    224       181        43      23.8
----------------------------------------------------------------------
Fuel consumption                    648       528       120      22.7
----------------------------------------------------------------------
Transmission expenses                 5        15       (10)    (66.7)
----------------------------------------------------------------------
Other supplies and services         101         -       101       N/A
----------------------------------------------------------------------
Gross margin                        683       524       159      30.3
----------------------------------------------------------------------
Capitalised expenses                  4         5        (1)    (20.0)
----------------------------------------------------------------------
Personnel expenses                   54        50         4       8.0
----------------------------------------------------------------------
Other expenses                       72        66         6       9.1
----------------------------------------------------------------------
EBITDA                              561       413       148      35.8
----------------------------------------------------------------------
Depreciation and amortization       105        89        16      18.0
----------------------------------------------------------------------
EBIT                                456       324       132      40.7
----------------------------------------------------------------------
*T

   Revenues reported by the Italian group grew 33.1% in the analysed
period due largely to the 18.2% increase in energy sold.
   The Company sold 23,153 GWh of electricity, compared to 19,589 GWh
in the same period last year, which represents an increase of 18.2%.
Out of the previous amount, 5,824 GWh were acquired from third parties
at a cost of Euro 224 million, representing 2,107 GWh more than in the
same period of 2004.
   Total electricity generation of the Company was 17,329 GWh in the
period January-September 2005, an increase of 1,457 GWh or 9.2%
relative to the same period in 2004. Market share in the Italian
market was 8.1% during the first nine months of 2005.
   Progress in ENDESA fulfilling Italia's programme for repowering
its thermal production plant has allowed it to increase production by
using a more efficient mix that replaces fuel-gas output with power
generated by CCGTs. This programme enables the Company to soften the
impact of the increase in fuel prices.
   Endesa Italia's fuel costs increased in the first nine months of
the year by just 22.7%, or Euro 120 million. This figure is far less
than the increase in revenues resulting from the higher electricity
prices triggered by the jump in fuel prices.
   The positive impact of the repowering programme is also clear when
we compare the breakdown by technology for the group in the first nine
months of 2004 with the same period of 2005: the weight of CCGT plant
in the production mix has increased from 27.5% to 48%, while the
weight of fuel-gas has declined from 34.6% to 16.1%.
   The line "other supplies and services" includes, among other
items, the estimated cost of CO2 emissions in the first nine months of
2005, which are not expected to be covered by the emission rights to
be distributed by the Italian government.
   On the other hand, on 23rd June 2005, a Decree was published in
Italy granting Endesa Italia the right to charge Euro 169 million in
stranded costs in 2005-2009.
   Euro 25 million of the total amount approved was booked as an
increase in revenues on the Profit and Loss account for the first nine
months of 2005 and the remaining Euro 144 million was deferred
according to the useful life of the related facilities.

   Debt reduced by Euro 643 million

   Net debt at ENDESA's electricity business in Europe stood at Euro
1,480 million at 30 September, 2005, compared to Euro 2,123 million at
the beginning of the year - a reduction of Euro 643 million, or 30.3%.
   Financial results reflected a cost of Euro 44 million in the first
nine months of 2005, Euro 1 million less than in January-September
2004.

   Cash flow: up 34.2%

   Cash flow generated from operations stood at Euro 502 million, a
rise of 34.2% compared to the same period in 2004.

   Investments: Euro 160 million

   Investment in the European electricity business was Euro 160
million in January-September 2005. Out of this amount, Euro 135
million was capex, with Euro 79 million of investment in Endesa Italia
and Euro 56 million in Snet.
   Financial investments for the period were Euro 21 million,
including the purchase of minority interests in Sodelif, Snet's
subsidiary, amounting to Euro 6 million.

   Divestments

   In the first nine months of 2005, ENDESA has made the following
divestments in its European business:

   --  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 the Moroccan water utility
        Lydec for Euro 26 million, generating a net capital gain of
        Euro 12 million.

   Strong EBITDA growth for the year 2005

   According to current estimates, EBITDA for the European business
will reach around Euro 850 million by year-end 2005, implying a 60%
increase vs. 2004.

   ELECTRICITY BUSINESS IN LATIN AMERICA

   Leveraging on the economic recovery of the region: strong growth
in output and sales

   The trends characterising regional performance during the first
half of 2005 extended into the third quarter: sustained economic
growth and currency stability.
   This propitious backdrop enabled high growth in demand for
electricity during the first nine months of 2005 vs. 2004 with average
sales growth of 5.5% in all areas in which ENDESA's subsidiaries
operate. This increase in demand boosted generation at ENDESA's
subsidiaries, which showed average growth of 5.4% compared to the same
period last year.
   Better economic conditions also led to widespread increases in
prices and business margins. As a consequence the EBIT rose by 5.0% in
generation and transmission, and 21.6% in distribution.

   Growth in volume sales in generation and distribution

   Generation and distribution figures for ENDESA's Latin American
subsidiaries were as follows:
-0-
*T
GENERATION AND DISTRIBUTION AT THE LATIN AMERICAN BUSINESS
----------------------------------------------------------------------
                    Generation (GWh)           Distribution (GWh)
----------------------------------------------------------------------
               Jan-Sep 2005     % chg     Jan-Sep 2005      % chg
----------------------------------------------------------------------
Chile             13,778        14.0          8,847         4.7
----------------------------------------------------------------------
Argentina         12,046         3.3         10,498         4.8
----------------------------------------------------------------------
Peru               5,061        23.2          3,356         6.5
----------------------------------------------------------------------
Colombia           8,855        (1.8)         7,469         4.2
----------------------------------------------------------------------
Brazil             3,130       (17.3)        10,863         7.3
----------------------------------------------------------------------
TOTAL             42,870         5.4         41,033         5.5
----------------------------------------------------------------------
*T

   Improved generation and distribution margins

   Growth in demand and tighter reserve margins caused the unit
margin of generation companies to increase by 11.4% in
January-September 2005 compared to the same period last year, to US$
20.6 per MWh produced.
   It is significant that this increase has been achieved in an
unfavourable environment due to the increase in liquid fuel prices and
the gas shortages in Chile and Argentina.
   The high degree pass through of the generation prices in the
tariff reviews undertaken this year coupled with the operating
efficiency of the companies, improved Distribution margins. Their VAD
increased by 20.3% to US$ 27.9 per MWh distributed.

   Development of regulatory framework

   In the third quarter of the current year, further improvements of
the regulatory framework on which ENDESA's subsidiaries develop their
activities have come into place. Main milestones are:

   --  In Argentina, agreement between Edesur and Uniren, that
        ratifies the 28% VAD increase as a Transition Tariff
        Framework, brings forward the validity of the Integral Tariff
        Revision (RTI) to 1 August 2006 and limits the distributor's
        contribution to the so called social tariff.

   --  In Peru, Edelnor tariff review, valid for the following four
        years, was successfully completed in the third quarter. A
        preliminary scheme, which maintains current VAD, was published
        on October 13th 2005.

   --  Argentinean and Brazilian Governments are redefining the
        conditions for the interconnection business between both
        countries, fact that should ease the reestablishment of the
        contracts for Line 1 of Cien.

   In addition, during the current quarter, it's worth noting the
subscription of the Definitive Agreement for Operation and Management
of Generation Projects on 17 October, that will allow installation of
two CCGT with total capacity of 1,600MW. This is the first step
towards the Argentinean wholesale market normalization.

   Net income: up 70.6%

   Net income from this business totalled Euro 186 million in the
first nine months of 2005, an increase of 70.6% from the same period
last year and contribution of 12% to ENDESA's total net income in the
same period.

   EBIT: Growth of 14.8%

   The table below shows 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
----------------------------------------------------------------------
               Jan-Sep  Jan-Sep           Jan-Sep  Jan-Sep
                  2005     2004    % Chg     2005     2004    % Chg
----------------------------------------------------------------------
Generation and
 transmission     736     681       8.1     548      522       5.0
----------------------------------------------------------------------
Distribution      613     509      20.4     444      365      21.6
----------------------------------------------------------------------
Others            (26)    (45)      N/A     (28)     (47)      N/A
----------------------------------------------------------------------
Total           1,323   1,145      15.6     964      840      14.8
----------------------------------------------------------------------
*T

   EBITDA and EBIT breakdown by country where ENDESA operates through
fully consolidated subsidiaries as follows:
-0-
*T
BREAKDOWN OF EBITDA AND EBIT IN LATAM BY BUSINESS LINE
----------------------------------------------------------------------
Generation and transmission
----------------------------------------------------------------------
Euro million             EBITDA                       EBIT
----------------------------------------------------------------------
               Jan-Sep   Jan-Sep          Jan-Sep  Jan-Sep
                  2005      2004    % Chg    2005     2004    % Chg
----------------------------------------------------------------------
Chile            250       188      33.0    171      127      34.6
----------------------------------------------------------------------
Colombia         171       160       6.9    135      129       4.7
----------------------------------------------------------------------
Brazil -
 Generation       97        73      32.9     83       63      31.7
----------------------------------------------------------------------
Brazil -
 Transmission     34        66     (48.5)    21       54     (61.1)
----------------------------------------------------------------------
Peru             114        96      18.8     87       69      26.1
----------------------------------------------------------------------
Argentina -
 Generation       70        87     (19.5)    53       69     (23.2)
----------------------------------------------------------------------
Argentina -
 Transmission      -        11    (100.0)    (2)      11    (118.2)
----------------------------------------------------------------------
TOTAL            736       681       8.1    548      522       5.0
----------------------------------------------------------------------

----------------------------------------------------------------------
Distribution
----------------------------------------------------------------------
Euro million             EBITDA                       EBIT
----------------------------------------------------------------------
               Jan-Sep  Jan-Sep           Jan-Sep  Jan-Sep
                  2005     2004    % Chg     2005     2004    % Chg
----------------------------------------------------------------------
Chile            139       130       6.9    121      115       5.2
----------------------------------------------------------------------
Colombia         177       146      21.2    119       96      24.0
----------------------------------------------------------------------
Brazil           202       123      64.2    152       84      81.0
----------------------------------------------------------------------
Peru              54        49      10.2     32       28      14.3
----------------------------------------------------------------------
Argentina         41        61     (32.8)    20       42     (52.4)
----------------------------------------------------------------------
TOTAL            613       509      20.4    444      365      21.6
----------------------------------------------------------------------
*T

   Generation and transmission

   Chile

   In the first nine months of 2005, generation was impacted by the
gas supply problems affecting the thermal plants, which required
substituting gas with more expensive liquid fuels.
   For ENDESA's subsidiaries this issue was more than offset by the
14% increase in energy generated from hydropower thanks to the Ralco
plant joining the grid in the third quarter of 2004. Therefore, EBIT
increased 34.6% in the first nine months of 2005 vs. the same period
last year to Euro171 million.

   Colombia

   Lower rainfall led to a 1.8% reduction of energy generated.
However, this fall was offset by the increase in the average sales
price and the favourable trend in the Colombian peso relative to the
Euro, driving EBITDA to Euro 171 million and EBIT to Euro 135 million,
increasing them by 6.9% and 4.7% respectively, versus the same period
last year.

   Brazil - Generation

   Total electricity generation fell 17.3%, due to problems of gas
supply that have affected Endesa Fortaleza. However, favourable
exchange rate movements together with higher prices and lower fuel
consumption underpinned a 32.9% rise in EBITDA and a 31.7% jump in
EBIT to Euro 97 million and Euro 83 million respectively.

   Brazil - Transmission

   The difficulties in finding available electricity in Argentina to
export to Brazil due to gas supply restrictions had a negative impact
on results at this interconnection, leading to an EBIT of Euro 21
million, Euro 33 million lower than in the same period last year.

   Peru

   Sales in the Peruvian generation business totalled Euro 218
million in the first nine months of 2005, 5.2% less than in the same
period a year earlier. Effect of lower prices caused by improved
rainfall was offset by a 23.2% increase in power generated.
   Improved rainfall also drove a Euro 62 million decrease in fuel
costs, contributing to a Euro 18 million rise both in EBITDA and EBIT
to Euro 114 million and a Euro 87 million respectively.

   Argentina

   Gas supply issues led to significant increases in fuel costs
(+42.5%) due to the need to generate power using liquid fuels. As a
result profitability fell even though generation sales volume
increased. As a result of this, EBITDA and EBIT fell by 19.5% and
23.2% to Euro 70 million and Euro 53 million respectively.

   Distribution

   Chile

   EBITDA and EBIT in the Chilean distribution business rose 6.9% and
5.2% respectively, in the first nine months of the year.
   These increases reflect the fact that growth in sales volume to
meet higher demand is offsetting the squeeze on margins caused by the
latest tariff revision.

   Colombia

   EBITDA for the Colombian distribution business rose by 21.2% and
EBIT by 24.0%. These increases were due to the 14.9% increase in sales
(to Euro 448 million), sufficient to cover higher power purchase costs
and the increase in fixed costs and favourable fluctuation in the euro
exchange rate versus the Colombian peso.

   Brazil

   Sales in the Brazilian distribution business stood at Euro 905
million in the first nine months of 2005, a 37.5% increase over 2004.
   This increase reflects margin expansion due enhanced generation
price pass-through, and, to a lesser extent, higher volumes of energy
sold.
   Sales growth easily outpaced cost increases, driving EBITDA to
Euro 202 million and EBIT to Euro 152 million, representing an
increase of 64.2% and 81.0%, respectively, on the same period last
year.

   Peru

   EBITDA at the Peruvian distribution business in January-September
2005 amounted to Euro 54 million, 10.2% more than in January-September
2004. EBIT grew Euro 4 million (+14.3%).
   Growth was driven by a 13.4% increase in sales on of first nine
months of 2004 to Euro 220 million compared to an 11.9% rise in power
purchases.

   Argentina

   EBITDA and EBIT in the Argentine distribution business fell by
Euro 20 million and Euro 22 million, respectively, compared to the
first nine months of 2004.
   This was largely because the January-September 2004 figures
included income of Euro 10 million corresponding to the compensation
received from Alsthom due to the Azopardo supply incident. Higher
costs, both power purchases and fixed costs, which were not offset by
a corresponding increase in revenues ahead of the upcoming tariff hike
- situation that might change in the future- accounted for the rest of
the fall in earnings.

   Financial strength: 23.7% improvement in financial results

   Financial results for the electricity business in Latin America
reflected a loss of Euro 290 million in the first nine months of 2005,
Euro 90 million less than recorded in the same period of 2004.
   Exchange rate differences were Euro 105 million higher, going from
losses of Euro 33 million in January-September 2004 to gains of Euro
72 million in January-September 2005.
   Intragroup transactions in foreign currency, normally in dollars
but, in accordance with paragraph 33 of IAS 21, not eliminated in
consolidation, contributed Euro 34 million of exchange gains. At its
22 and 23 June meeting, the IASB decided to modify this paragraph,
whereby translation differences are taken to reserves.
   Until the EU authorities endorses this change, the previous
version of IAS 21 remains in force in the IFRS adopted by the European
Union. Depending on whether this change is endorsed and when it takes
effect, if at all, the accounting of translation differences by ENDESA
for 2005 could change.
   The impact of these differences on ENDESA's net income as of 30
September 2005 was Euro 17 million.
   Net financial expenses totalled Euro 362 million, Euro 15 million
or 4.3% higher than in January-September 2004. This increase relates
to the performance of the Euro with respect to the Latin American
currencies and the dollar, which led to an increase in debt
denominated in these currencies.
   Net debt at ENDESA's Latin American business stood at Euro 6,237
million at 30 September 2005, an increase of Euro 887 million since
the existing at the beginning of the year. The increase in net debt is
due to the depreciation of the euro against the currencies in which
the group's Latin American subsidiaries hold their debt, representing
a total increase of Euro 873 million. Stripping out the impact of this
depreciation, and taking account both the Euro 113 million dividends
paid to the parent company, as well as the Euro 359 million capital
reduction and dividends paid to third parties, the debt would have
decreased Euro 458 million.

   Enersis and Endesa Chile performance in financial markets

   The strong business performance of ENDESA's Latin American
business was reflected in the share prices performance of both Enersis
and Endesa Chile - ENDESA's main subsidiaries - whose share prices
have risen by 34% and 63% respectively, in the New York Stock
Exchange, in the first nine months of 2005.
   Two major rating agencies improved the credit rating outlook of
both companies.

   Cash flow: up 15.2%

   Cash flow generated by the group's business in Latin America
totalled Euro 766 million in the first nine months of 2005, an
increase of 15.2% with respect to 2004.

   Investments: Euro 512 million

   Investments in the Latin American electricity business were Euro
512 million in the period January-September 2005. Of this sum, Euro
384 million was capex, broken down as follows:
-0-
*T
CAPEX IN LATIN AMERICA
----------------------------------------------------------------------
                                    Euro million
----------------------------------------------------------------------
                             Jan-Sep 2005  Jan-Sep 2004    % Chg
----------------------------------------------------------------------
Generation                        122         152          (19.7)
----------------------------------------------------------------------
Distribution and Transmission     243         177           37.3
----------------------------------------------------------------------
Others                             19           8          137.5
----------------------------------------------------------------------
Total                             384         337           13.9
----------------------------------------------------------------------
*T

   The decrease in generation capex was due mainly to the completion
of the construction of the Ralco hydroelectric plant, which, as
mentioned before, came on-stream in the second half of 2004.
   Financial investments for the period amounted to Euro 124 million,
which includes the acquisition of minority interests in Compania
Electrica San Isidro, an Endesa Chile subsidiary, for USD 21 million
(Euro 17 million).

   Optimisation of organisational structure

   In the third quarter of 2005 ENDESA set up Endesa Brasil, S.A. At
the end of October, this holding company's shareholders contributed
all the assets owned by ENDESA in Brazil.
   Also in the same month, an agreement was reached to merge
Chilectra and Edesur, both of which were owned by Enersis, with stakes
of 98.24% and 100%, respectively.
   Transaction will be executed through the acquisition of Chilectra
by Edesur and the operation forms part of the Group's strategy to
simplify its corporate structure.

   San Isidro II and Palmucho Plants Construction (Chile)

   Endesa Chile plans to build a combined cycle plant using LNG. This
facility, to be called San Isidro II, will have a total installed
capacity of 377 MW.
   In connection with this initiative, an EPC contract was signed by
the Company with Mitsubishi and the civil engineering plans are
currently being drawn up.
   The schedule envisages it coming on stream for open cycle plant
operation with diesel in 2007, with capacity of 210 MW, moving to
combined cycle diesel operation with capacity of 310MW in 2008 and to
commercial operations fuelled by LNG once this arrives in Chile,
currently scheduled for year 2009.
   Endesa Chile started the construction of Palmucho, a 32 MW hydro
power plant.

   Strong EBITDA growth for the year 2005

   According to current estimates, EBITDA for the business in Latin
America will reach around Euro 1,750 million by year-end 2005,
implying a 15% increase vs. 2004.

   ACCOUNTING CRITERIA

   ENDESA has prepared its consolidated financial statements for the
first nine months of 2005 in accordance with the valuation and
classification criteria required by International Financial Reporting
Standards (IFRS) endorsed by the European Union to date.
   Under IFRS I, the date for transition to IFRS is January 1st,
2004. Therefore, figures for the third quarter of 2004 and 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.
   In order to facilitate investors and analysts with information
regarding the effects of adopting IFRS, on 5 April 2005, the Company
filed a press release containing the most significant adjustments made
in transitioning from Spanish GAAP to IFRS and their implications.
This press release was lodged with the Spanish securities regulator,
the CNMV, under registered file no. 18131.
   The consolidated financial statements for 2005 and 2004 included
in the annual accounts for 2005 must be prepared under the IFRS
endorsed by the European Union as of 31 December 2005. Accordingly,
any change in the rules endorsed by the European Union or
interpretation of the same between now and the end of the year could
lead to modifications in the consolidated financial statements as of
30 September 2005, although, given year-end is near, further
significant changes to the accounts of ENDESA are not expected.

   STATISTICAL APPENDIX

   KEY FIGURES
-0-
*T
Electricity Generation (GWh)              9M 2005   9M 2004   % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                69,769    72,357     (3.6)
----------------------------------------------------------------------
Electricity business in Europe           24,410    17,020     43.4
----------------------------------------------------------------------
Electricity business in Latin America    42,870    40,664      5.4
----------------------------------------------------------------------
TOTAL                                   137,049   130,041      5.4
----------------------------------------------------------------------

Electricity Generation in Spain and
 Portugal (GWh)                          9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
Mainland                                 59,375    62,476     (5.0)
----------------------------------------------------------------------
Nuclear                                  16,835    19,525    (13.8)
----------------------------------------------------------------------
Coal                                     27,216    27,289     (0.3)
----------------------------------------------------------------------
Hydroelectric                             6,085     8,686    (29.9)
----------------------------------------------------------------------
Combined cycle - CCGT                     5,641     4,524     24.7
----------------------------------------------------------------------
Fuel oil                                  2,029     1,078     88.2
----------------------------------------------------------------------
Renewables/CHP                            1,569     1,374     14.2
----------------------------------------------------------------------
Non-mainland                             10,394     9,881      5.2
----------------------------------------------------------------------
TOTAL                                    69,769    72,357     (3.6)
----------------------------------------------------------------------


Electricity Generation in Europe (GWh)   9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
Coal                                     11,457     5,299    116.2
----------------------------------------------------------------------
Hydroelectric                             1,820     1,855     (1.9)
----------------------------------------------------------------------
Combined cycle - CCGT                     8,318     4,366     90.5
----------------------------------------------------------------------
Fuel oil                                  2,796     5,497    (49.1)
----------------------------------------------------------------------
Wind                                         19         3    533.3
----------------------------------------------------------------------
TOTAL                                    24,410    17,020     43.4
----------------------------------------------------------------------


Electricity Generation in Latin America
 (GWh)                                   9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
Chile                                    13,778    12,086     14.0
----------------------------------------------------------------------
Argentina                                12,046    11,666      3.3
----------------------------------------------------------------------
Peru                                      5,061     4,107     23.2
----------------------------------------------------------------------
Colombia                                  8,855     9,019     (1.8)
----------------------------------------------------------------------
Brazil                                    3,130     3,786    (17.3)
----------------------------------------------------------------------
TOTAL                                    42,870    40,664      5.4
----------------------------------------------------------------------


Electricity sales (GWh)                  9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                75,381    72,689      3.7
----------------------------------------------------------------------
Regulated market                         47,939    49,831     (3.8)
----------------------------------------------------------------------
Deregulated market                       27,442    22,858     20.1
----------------------------------------------------------------------
Electricity business in Europe           34,314    20,848     64.6
----------------------------------------------------------------------
Electricity business in Latin America    41,033    38,905      5.5
----------------------------------------------------------------------
Chile                                     8,847     8,449      4.7
----------------------------------------------------------------------
Argentina                                10,498    10,014      4.8
----------------------------------------------------------------------
Peru                                      3,356     3,150      6.5
----------------------------------------------------------------------
Colombia                                  7,469     7,165      4.2
----------------------------------------------------------------------
Brazil                                   10,863    10,127      7.3
----------------------------------------------------------------------
TOTAL                                   150,728   132,442     13.8
----------------------------------------------------------------------


Gas sales (GWh)                          9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
Regulated market                          1,934     1,907      1.4
----------------------------------------------------------------------
Deregulated market                       13,355     7,887     69.3
----------------------------------------------------------------------
TOTAL                                    15,289     9,794     56.1
----------------------------------------------------------------------


Workforce                               30-09-05  31-12-04    % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                12,730    12,889     (1.2)
----------------------------------------------------------------------
Electricity business in Europe            2,313     2,440     (5.2)
----------------------------------------------------------------------
Electricity business in Latin America    12,343    11,735      5.2
----------------------------------------------------------------------
Other businesses                             54        93    (41.9)
----------------------------------------------------------------------
TOTAL                                    27,440    27,157      1.0
----------------------------------------------------------------------

FINANCIAL DATA

Key figures                              9M 2005   9M 2004    % Chg
----------------------------------------------------------------------
EPS (euros)                                1.47      1.11     32.8
----------------------------------------------------------------------
Cash flow per share (euros)                2.77      2.40     15.4
----------------------------------------------------------------------
Book value per share (euros)               9.90      8.12**   21.8
----------------------------------------------------------------------


Net financial debt (Euro million)       30-09-05  01-01-05    % Chg
----------------------------------------------------------------------
Electricity business in Spain and
 Portugal                                11,452     9,586     19.5
----------------------------------------------------------------------
Electricity business in Europe            1,480     2,123    (30.3)
----------------------------------------------------------------------
     ENDESA Italia                          995     1,293    (23.0)
----------------------------------------------------------------------
     Other                                  485       830    (41.6)
----------------------------------------------------------------------
Electricity business in Latin America     6,237     5,350     16.6
----------------------------------------------------------------------
     Enersis                              5,063     4,081     24.1
----------------------------------------------------------------------
     Other                                1,174     1,269     (7.5)
----------------------------------------------------------------------
Other businesses                          1,250     1,639    (23.7)
----------------------------------------------------------------------
TOTAL                                    20,419    18,698      9.2
----------------------------------------------------------------------

----------------------------------------------------------------------
Gearing (%)                               135.0     149.6      N/A
----------------------------------------------------------------------
Net debt/operating cash flow (times)        3.5      3. 5*     N/A
----------------------------------------------------------------------
Interest coverage with operating cash
 flow (times)                               5.9       5.3*     N/A
----------------------------------------------------------------------


"Rating" (16-11-05)           Long term Short term      Outlook
----------------------------------------------------------------------
Standard & Poor's                 A         A-1         Revision (-)
----------------------------------------------------------------------
Moody's                          A3         P-2         Negative
----------------------------------------------------------------------
Fitch                             A          F1         Revision (-)
----------------------------------------------------------------------


Main fixed income issues                          Spread over IRS (bp)
----------------------------------------------------------------------
                                                   30-09-05  31-12-04
----------------------------------------------------------------------
3.7 Y EUR  700M 4.375% Mat. September 2009              5       17
----------------------------------------------------------------------
6.8 Y GBP 400M 6.125% Mat. September 2012              27       33
----------------------------------------------------------------------
7.4 Y EUR  700M 5.375% Mat. Feb 2013                   21       31
----------------------------------------------------------------------


Stock market data                   30-09-05       31-12-04   % Chg
----------------------------------------------------------------------
Market cap (Euro million)             23,578         18,306     28.80
----------------------------------------------------------------------
Number of shares outstanding   1,058,752,117  1,058,752,117        --
----------------------------------------------------------------------
Nominal share value (EUR)                1.2            1.2        --
----------------------------------------------------------------------


Stock market data                 9M 05          9M 04        % Chg
----------------------------------------------------------------------
Trading volumes (shares)
----------------------------------------------------------------------
     Madrid stock exchange     2,116,538,073  1,707,596,826     23.95
----------------------------------------------------------------------
     NYSE                         20,964,800     17,804,900     17.75
----------------------------------------------------------------------
Average daily trading volume
 (shares)
----------------------------------------------------------------------
     Madrid stock exchange        11,023,635      8,940,298     23.30
----------------------------------------------------------------------
     NYSE                            110,925         94,707     17.12
----------------------------------------------------------------------


Share price                    High 9M   Low 9M
                                 2005      2005    30-09-05  31-12-04
----------------------------------------------------------------------
Madrid stock exchange (euros)     22.30     16.63     22.27     17.29
----------------------------------------------------------------------
NYSE (USD)                        26.90     21.63     26.77     23.27
----------------------------------------------------------------------


Dividends (euro cents/share)             Payable against 2004 results
----------------------------------------------------------------------
Interim dividend (3-01-05)                          27.20
----------------------------------------------------------------------
Final dividend (01-07-05)                           46.62
----------------------------------------------------------------------
Total DPS                                           73.82
----------------------------------------------------------------------
Pay-out (%)                                          56.7
----------------------------------------------------------------------
Dividend yield (%)                                   3.31
----------------------------------------------------------------------

(*) As of September 30th, 2004.
(**) As of January 1st, 2005.

*T
   NOTE: THE RESULTS PRESENTATION IS AVAILABLE FOR DOWNLOAD FROM
ENDESA'S WEBSITE (WWW.ENDESA.ES).

   http://www.endesa.es

   Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the United States Private Securities Litigation Reform Act of 1995.
   The U.S. Private Securities Litigation Reform Act of 1995 provides
a safe harbor for forward-looking statements. 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, net income and dividend forecasts for the year
ending December 31, 2005 and 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.
For all of the forward-looking statements in this presentation, Endesa
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act
of 1995. 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. Neither Endesa nor any of its
affiliates intends to update these forward-looking statements.