ENDESA's Net Income Rises to Euro 633 Million in the First Quarter of 2007

  
    
  
  
    
      ENDESA (NYSE:ELE):
    
    
      EBITDA GROWTH REFLECTS A POSITIVE PERFORMANCE OF ENDESA’S 
      BUSINESSES
    
    
      EBITDA stood at Euro 2,000 million in the first quarter of the year, an 
      increase of 15.3% on a like-for-like basis and 2.7% vs. last year’s 
      reported amount during 1Q06.
    
    
      BALANCED CONTRIBUTION FROM ALL BUSINESSES TO TOTAL INCOME
    
    
      The Spanish and Portuguese business posted net income of Euro 437 
      million, an increase of 22.8% measured on a like-for-like basis, that 
      is, excluding stranded costs recognition for non-mainland systems for 
      2001-2005 that was recorded in the first quarter of 2006. This business 
      accounted for 69% of ENDESA’s total net income.
    
    
      Net income from business in Europe decreased 15.3% to Euro 100 million, 
      as a result of special market conditions in the first quarter of the 
      year. This division accounted for 15.8% of ENDESA’s 
      total net income.
    
    
      In Latin America, net income rose 2.1% on a like-for-like basis from the 
      first quarter of 2006, to Euro 96 million euros. This accounted for 
      15.2% of ENDESA’s total net income.
    
    
      RESULTS AT THE COMPANY'S THREE BUSINESSES IN LINE WITH FORECASTS 
      PROVIDED TO THE MARKET
    
    
      KEY FACTS AND FIGURES FOR 1Q07
    
    
      POSITIVE PERFORMANCE OF NET INCOME ON A LIKE-FOR-LIKE BASIS
    
    
      
        ENDESA reports first-quarter 2007 net income of Euro 633 million.
      
      
        This is almost entirely recurrent, since it does not include one-off 
        or atypical items of any significant amount.
      
      
        Conversely, net income in first-quarter 2006 was affected by a number 
        of sizeable, one-off items, totalling Euro 484 million:
      
    
        -- Recognition of stranded costs for non-mainland generation for
       2001-2005, which amounted to Euro 212 million, and of interest,
       which amounted to Euro 31 million, with a combined impact of
       Euro 212 million on net income.

    -- Fiscal impact of the merger between Elesur and Chilectra, which
       was Euro 170 million, with an impact on net income after
       minority interests of Euro 101 million.

    -- Net capital gain from sale of 5.01% of Auna to Deutsche Bank,
       with a net impact on earnings of Euro 171 million.
    
      
        Like-for-like growth in net income in 1Q07 was 11.4% vs. 1Q06.
      
    
    
      POSITIVE RESULTS ACROSS ALL BUSINESSES
    
    
      
        Net income in Spain and Portugal rose 22.8% on a like-for-like basis, 
        to Euro 437 million, from the first quarter of 2006.
      
      
        Net income from business in Europe was Euro 100 million, a decrease of 
        15.3% from the first quarter of 2006, mainly as a result of the impact 
        of weather conditions on market performance in Italy and France.
      
      
        Net income from Latin American business climbed 2.1% on a 
        like-for-like basis, to Euro 96 million.
      
    
    
      GROWTH IN MAIN INCOME STATEMENT ITEMS ON A LIKE-FOR-LIKE BASIS 
      REFLECTS POSITIVE PERFORMANCE OF BUSINESSES
    
    
      
        Gross margin was Euro 2,820 million in the first quarter of 2007, 
        11.8% higher than the same period of 2006, on a like-for-like basis.
      
      
        EBITDA was Euro 2,000 million, an increase of 15.3% on a like-for-like 
        basis.
      
      
        EBIT was Euro 1,443 million, a 12.8% increase on a like-for-like basis.
      
      
        Cash flow from operations totalled Euro 1,312 million, 20.7% higher 
        than in 1Q06 on a like-for-like basis.
      
      
        ENDESA’s total electricity output was 47,295 
        GWh in 1Q07, 5.5% lower than in the same period a year earlier, as 
        sharp output increases in several Latin American countries were not 
        enough to offset declines in Spain and the rest of Europe.
      
      
        Total electricity sales rose 0.2% from first quarter of 2006, to 
        56,841 GWh.
      
    
    
      LEVERAGE RATIO IN LINE WITH STRATEGIC PLAN TARGET
    
    
      
        Leverage stood at 124.3% as of 31 March, 2007, compared with 124.5% on 
        31 December, 2006, in line with targets set down in the Company's 
        Strategic Plan, which calls for leverage not to exceed 140%.
      
    
    
      BUSINESS IN SPAIN AND PORTUGAL
    
    
      Positive performance of main income statement items
    
    
      
        Net income from business in Spain and Portugal was Euro 437 million, 
        accounting for 69% of ENDESA's total income.
      
      
        On a like-for-like basis, excluding the impact of recognition of 
        stranded costs for non-mainland generation for 2001-2005, booked in 
        1Q06, net income at this business rose 22.8%.
      
      
        EBITDA rose 24.5% from a year earlier to Euro 1,027 million, and EBIT 
        climbed by 21.9% to Euro 684 million both measured on a like-for-like 
        basis.
      
    
    
      Mainland generation mix reasserts its competitiveness
    
    
      
        ENDESA, among Spanish utilities, maintains the largest market share of 
        ordinary regime output (34.6% in 1Q07), liberalized market (55.6% in 
        1Q07) and total sales to final customers (42.8% in 1Q07).
      
      
        In the first quarter, the Company met 80.8% of its Spanish demand 
        using its own power stations. This balance between generation and 
        demand gives ENDESA a clear competitive advantage over its 
        competitors, thanks to its lower exposure to risks arising from 
        changes in rainfall patterns and fluctuations in wholesale prices.
      
      
        Nuclear and hydro powered energy comprised 45.9% of ENDESA's mainland 
        generation mix, compared with 43.4% for the rest of the sector.
      
      
        ENDESA’s mainland coal-fired plants achieved 
        a 73.3% load factor in the first quarter of 2007, making a significant 
        contribution to covering demand in the Spanish electricity system.
      
    
    
      ENDESA: top investor in electricity facilities in the Spanish 
      electricity sector
    
    
      
        ENDESA invested Euro 417 million in Spain and Portugal in 1Q07, of 
        which Euro 366 million, or 87.8%, was capex. This underscores ENDESA’s 
        status as the largest investor in electricity facilities among Spanish 
        power companies.
      
      
        Euro 229 million of capex was spent on upgrading distribution assets 
        to enhance quality and security of supply.
      
    
    
      Sharp growth in generation from cogeneration and renewable energies 
      +33.8%
    
    
      
        Renewable and CHP companies fully consolidated by ENDESA generated 823 
        GWh in the first quarter, an increase of 33.8% from the same period in 
        2006.
      
      
        The gross margin at these companies was Euro 65 million, an increase 
        of 4.8% from 1Q06.
      
    
    
      Larger contribution to results from the distribution activity
    
    
      
        EBITDA in the distribution business rose Euro 131 million or 55.7% 
        from the same period last year.
      
      
        This increase was mainly the result of the increase in remuneration 
        stipulated in the Royal Decree governing tariffs in 2007 and 
        operational improvements achieved in this activity, above all through 
        initiatives to reduce losses and lower fixed costs.
      
      
        Higher earnings in this activity have come alongside a 37% improvement 
        in the quality of supply over the last 12 months.
      
    
    
      Supply business optimization
    
    
      
        ENDESA in the first quarter sold 51% of its output in the deregulated 
        market, in which prices rose 20.7%, while the rest of the sector sold 
        only 16% of output in the deregulated market.
      
      
        This demonstrates that the Company's supply strategy gives, 
        comparatively to peers, greater coverage against fluctuations in 
        wholesale market prices.
      
    
    
      Fuel consumption and CO2 costs fall 12.5% and 
      85% respectively
    
    
      
        Fuel consumption at ENDESA's business in Spain and Portugal amounted 
        to Euro 492 million in the first quarter, a decrease of 12.5% from the 
        same period in 2006. This decrease was due to declining fuel 
        procurement costs, and, to a lesser extent, to lower output in the 
        period.
      
      
        As for CO2, emissions from mainland output were 10.5% lower. Cost was 
        also 85% lower, totalling Euro 6 million in 1Q07 vs. Euro 40 million 
        in 1Q06.
      
    
    
      ENDESA: A major player in natural gas
    
    
      
        ENDESA sold a total of 9,013 GWh in the Spanish natural gas market in 
        the first quarter of 2007, 26.2% more than in the same period a year 
        earlier.
      
      
        Liberalized market share stood at 13.1%.
      
      
        Natural gas business added Euro 64 million to the gross margin in the 
        first quarter of 2007, an increase of 128.6% from the same period a 
        year earlier.
      
    
    
      BUSINESS IN EUROPE
    
    
      Significant contribution to total net income from the business in Europe
    
    
      
        Net income from the electricity business in Europe was Euro 100 
        million in the first quarter, accounting for 15.8% of ENDESA's total 
        net income, and decreasing 15.3% from the same period a year earlier.
      
      
        Stripping out the effect from the cancellation of Delibera 254, made 
        during 1Q06, total net income would have decreased just by 3.8%.
      
      
        EBITDA at this business was Euro 310 million, 15.5% of total EBITDA at 
        ENDESA, and a decrease of 3.7% from a year earlier. Without the 
        Delibera 254 effect, EBITDA increased 4.7% vs. 1Q06.
      
    
    
      ENDESA enters the Greek market
    
    
      
        On 28 March Endesa Europe signed a strategic alliance with Greek 
        metallurgy and engineering company Mytilineos Holdings S.A. to operate 
        in the Greek market with an option to expand into other markets in 
        southeast Europe.
      
      
        The alliance will take the form of a joint venture, in which ENDESA 
        will hold a 50.01% stake.
      
      
        Mytilineos will contribute to this joint venture with all its energy 
        assets (thermal and renewable) as well as its current licenses and 
        Endesa will supply Euro 485 million and, depending on the success of 
        wind projects currently waiting for authorization, an additional fee 
        up to Euro 115 million.
      
      
        The new company will become the largest independent energy operator in 
        Greece and will have the largest order book of projects under 
        construction and in development in the country, as well as a 
        generation mix balanced between thermal and renewable capacity.
      
    
    
      Italy: Significant progress on new facilities
    
    
      
        In the framework of its strategy for growth in renewable energies, 
        Endesa Italia in February incorporated into its generation mix the 
        wind farms Piano di Corda and Serra Pelata, with 122 MW of total 
        capacity, completing an agreement with Gamesa signed three years ago 
        for the acquisition of wind assets in Italy.
      
      
        Construction continued as scheduled on the two 400MW CCGTs at the 
        Scandale plant (Calabria), in which ENDESA Europa owns 50%, as did 
        preliminary work on the offshore regasification terminal off Livorno, 
        which is scheduled to come on-stream on 2009.
      
      
        Endesa Italia paid shareholders a dividend of Euro 216 million in 
        1Q07, of which Euro 173 million corresponded to Endesa Europa.
      
      
        ENDESA's electricity output in Italy was 6,354 GWh in 1Q07, a drop of 
        16.6% from the same period a year earlier, as a result of weather 
        conditions in that market.
      
    
    
      France: Growth in Snet’s main income statement 
      items
    
    
      
        French ENDESA´s generator contributed Euro 
        60 million to European business EBITDA and Euro 34 million to EBIT in 
        1Q07, with growth of 7.1% and 17.2%, respectively.
      
      
        Its electricity output was 2,258 GWh, a decrease of 47.8% from the 
        first three months of 2006, mainly as a result of lower electricity 
        demand in France due to climate conditions and higher rainfall in the 
        country, which gave rise to lower usage of thermal plants.
      
      
        Total sales were 4,653 GWh, a decrease of just 22.9% due to higher 
        energy purchases.
      
      
        Snet paid shareholders dividends of Euro 33 million in 1Q07, of which 
        Euro 21 million corresponded to Endesa Europa.
      
    
    
      Debt at the business in Europe falls by Euro 65 million
    
    
      
        Net financial debt at ENDESA’s electricity 
        business in Europe stood at Euro 1,609 million at 31 March 2007, 
        compared with Euro 1,674 million at the end of 2006, a drop of Euro 65 
        million or 3.9%.
      
    
    
      BUSINESS IN LATIN AMERICA
    
    
      Growth in total EBITDA (+12.8%) and EBIT (+16.1%) confirm progress of 
      this business
    
    
      
        Net income at ENDESA’s Latin American 
        business totalled Euro 96 million in 1Q07, 2.1% more than a year 
        earlier, after discounting from 1Q06 the one-off tax impact arising 
        from the merger of Elesur and Chilectra, for a contribution of 15.2% 
        to ENDESA's total net income.
      
      
        EBITDA rose 12.8% to Euro 663 million from a year earlier, and EBIT 
        climbed 16.1% to Euro 535 million.
      
      
        Measured in local currencies, EBITDA rose 21.8% and EBIT climbed 
        25.6%, both vs. 1Q06.
      
      
        EBITDA and EBIT increased in both the generation and transmission 
        businesses (+4% and +4.4%, respectively) and in distribution (+26% and 
        32.9%, respectively). In just the generation business increases in 
        EBITDA and EBIT were 8.4% and 9.5% respectively.
      
    
    
      Growth in sales and significant operating improvements
    
    
      
        Total sales from ENDESA’s Latin American 
        companies increased by 6.3%, to 15,268 GWh in the first quarter, 
        driven by organic growth in their markets, and reflecting the ongoing 
        economic recovery in the markets in which they operate.
      
      
        Generation margin stood at USD 29.7/MWh, an increase of 14.9% compared 
        to 1Q06, and distribution margin stood at USD 39.2 /MWh, an increase 
        of 12.6%.
      
      
        Energy distribution losses were 11.1% in 1Q07, an improvement of 0.2 
        percentage points from the same period in 2006.
      
    
    
      Regulatory update: ratification of increase in Edesur’s 
      tariffs
    
    
      
        In the first quarter of 2007, the first distribution tariff increase 
        to be approved in Argentina since the 2001 economic crisis took 
        effect, after the corresponding resolution was published by the 
        electricity sector regulator (ENRE).
      
      
        Application of this increase, which is to be implemented retroactively 
        to November 2005, contributed to an increase of 144% in Edesur's 
        EBITDA, to Euro 61 million in the first quarter.
      
    
    
      Cash returns in line with Strategic Plan targets
    
    
      
        Cash returns from ENDESA’s Latin American 
        business to the parent company in the first three months of the year 
        totalled Euro 118 million.
      
      
        This, coupled with the USD561 million achieved in 2005 and 2006, means 
        that 42.4% of the target in the Strategic Plan to 2009 (USD 1,600 
        million) has now been achieved.
      
    
    
      New capacity development and investments
    
    
      
        In Chile, work continued on the construction of the 377 MW San Isidro 
        II CCGT, of which 246 MW came on stream last 30th 
        of April, and of the 32 MW Palmucho hydro plant.
      
      
        The financial investments during 1Q07 include acquisitions by Endesa 
        Chile in February and March of third-party stakes in Costanera (5.5%), 
        Hidroinvest (25%) and Hidroeléctrica El Chocón 
        (2.48%).
      
    
    
      PROPOSED DIVIDEND FOR 2006
    
    
      
        The Company’s Board of Directors has 
        decided that the total gross dividend for 2006 which it will propose 
        to shareholders at the General Shareholders Meeting will be Euro 1.64 
        per share, for a total of Euro 1,736 million.
      
      
        After payment of an interim dividend of Euro 0.50 per share on 2 
        January 2007, upon approval of this proposal, the final dividend will 
        climb to Euro 1.14 per share.
      
    
    
      CONSOLIDATED RESULTS
    
    
      ENDESA reports 1Q07 net income of Euro 633 million
    
    
      ENDESA posted net income of Euro 633 million in the first quarter of 
      2007.
    
    
      This amount is Euro 419 million less than the figure registered in the 
      same period of 2006. However, in order to give a comparison in 
      like-for-like terms, it is necessary to keep in mind that in 
      January-March 2006, three non-recurrent effects involving significant 
      amounts were included:
    
    
      
        Recognition of stranded costs for non-mainland generation for 
        2001-2005, which amounted to Euro 212 million, and of interest, which 
        amounted to Euro 31 million, with a combined impact of Euro 212 
        million on net income.
      
      
        Fiscal impact of the merger between Elesur and Chilectra, which was 
        Euro 170 million, with an impact on net income after minority 
        interests of Euro 101 million.
      
      
        Net capital gain from sale of 5.01% of Auna to Deutsche Bank, with a 
        net impact on earnings of Euro 171 million.
      
    
    
      Meanwhile, 1Q07 net income was almost entirely recurrent, since it did 
      not include one-off or atypical items of any significant amount.
    
    
      After discounting the three effects mentioned above from first quarter 
      2006 earnings, net income in 1Q07 rose 11.4%.
    
    
      References to a like-for-like comparison of earnings in this document 
      always refer to variations produced after deducting the three items 
      mentioned above from the first quarter of 2006.
    
    
      
        
          ENDESA FIRST QUARTER 2007 CONSOLIDATED RESULTS
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
          
            % Chg vs.
          
          
            1Q06
          
        
        
           
        
        
          % Chg vs. 1Q06

          
            l-f-l
          
        
        
           
        
        
          
            % Contrib. to
          
          
            earnings
          
        
      
      
        
          Spain and Portugal
        
        
           
        
        
          437 
        
        
           
        
        
          (23.1)
        
        
           
        
        
          22.8 
        
        
           
        
        
          69.0 
        
      
      
        
          Europe
        
        
           
        
        
          100 
        
        
           
        
        
          (15.3)
        
        
           
        
        
          (15.3)
        
        
           
        
        
          15.8 
        
      
      
        
          Latin America
        
        
           
        
        
          96 
        
        
           
        
        
          (50.8)
        
        
           
        
        
          2.1 
        
        
           
        
        
          15.2 
        
      
      
        
          TOTAL
        
        
           
        
        
          633 
        
        
           
        
        
          (39.8)
        
        
           
        
        
          11.4 
        
        
           
        
        
          100.0 
        
      
    
    
      The distribution of net income between the different electricity 
      businesses is balanced, reinforcing the Company’s 
      multinational character and its appropriately diversified risk profile.
    
    
      Decrease in output (-5.5%) due mainly to climatic factors
    
    
      Electricity generation fell 5.5% from the first quarter of 2006 due 
      mainly to the fact that output increases in several Latin American 
      countries were not sufficient to offset a decline caused by weather and 
      rainfall conditions in European markets.
    
    
      Electricity sales totalled 56,841 GWh, an increase of 0.2% from the same 
      period in 2006.
    
    
      
        
          GENERATION AND ELECTRICITY SALES
        
      
      
        
           
        
        
           
        
        
          Output
        
        
           
        
        
          Sales
        
      
      
        
           
        
        
           
        
        
          GWh
        
        
           
        
        
          % chg vs. 1Q06
        
        
           
        
        
          GWh
        
        
           
        
        
          % chg vs. 1Q06
        
      
      
        
          Spain and Portugal
        
        
           
        
        
          22,972 
        
        
           
        
        
          (2.1)
        
        
           
        
        
          28,419 
        
        
           
        
        
          4.8 
        
      
      
        
          Europe
        
        
           
        
        
          8,612 
        
        
           
        
        
          (27.9)
        
        
           
        
        
          13,154 
        
        
           
        
        
          (13.7)
        
      
      
        
          Latin America
        
        
           
        
        
          15,711 
        
        
           
        
        
          7.2 
        
        
           
        
        
          15,268 
        
        
           
        
        
          6.3 
        
      
      
        
          TOTAL
        
        
           
        
        
          47,295 
        
        
           
        
        
          (5.5)
        
        
           
        
        
          56,841 
        
        
           
        
        
          0.2 
        
      
    
    
      Output/sales balance
    
    
      In 1Q07 ENDESA covered 83.2% of its total electricity sales in all of 
      its markets with electricity generated by its own plants.
    
    
      This balanced situation between production and demand allows the Company 
      to considerably reduce risk of its electricity business, giving it 
      significant competitive advantage which is especially noteworthy in the 
      Spanish market. In Spain, the Company covered 80.8% of demand in the 
      period with its own output.
    
    
      Increase in gross margin (+11.8%) and EBITDA (+15.3%) on a like-for-like 
      basis
    
    
      Revenues were Euro 5,207 million in the first quarter, 4.6% lower on a 
      like-for-like basis from the same period in 2006. This decrease was due 
      to the lower output mentioned earlier, to lower prices in European 
      wholesale markets, and, above all, to a lower value for revenues 
      registered for greenhouse gas emission rights allocated, free of charge, 
      as a consequence of their price performance.
    
    
      Variable costs fell 18.7% thanks to lower costs for fuel and greenhouse 
      gas emission rights, declines derived in both cases mainly from 
      reductions in their respective prices.
    
    
      The performance of revenues and variable costs produced an increase of 
      11.8% in gross margin on a like-for-like basis, to Euro 2,820 million.
    
    
      EBITDA was Euro 2.000 million and EBIT was Euro 1,443 million, increases 
      of 15.3% and 12.8%, respectively, measured on a like-by-like basis.
    
    
      
        
           
        
        
           
        
        
          Gross profit
        
        
           
        
        
          EBITDA
        
        
           
        
        
          EBIT
        
      
      
        
           
        
        
           
        
        
          Euro

          
            million
          
        
        
           
        
        
          
            % chg vs.
          
          
            1Q06
          
          
            (l-f-l)
          
        
        
           
        
        
          
            Euro
          
          
            million
          
        
        
           
        
        
          
            % chg vs.
          
          
            1Q06
          
          
            (l-f-l)
          
        
        
           
        
        
          
            Euro
          
          
            million
          
        
        
           
        
        
          
            % chg vs.
          
          
            1Q06
          
          
            (l-f-l)
          
        
      
      
        
          Spain and Portugal
        
        
           
        
        
          1,515 
        
        
           
        
        
          15.2 
        
        
           
        
        
          1,027 
        
        
           
        
        
          24.5 
        
        
           
        
        
          684 
        
        
           
        
        
          21.9 
        
      
      
        
          Europe
        
        
           
        
        
          398 
        
        
           
        
        
          (2.2)
        
        
           
        
        
          
            310 
          
        
        
           
        
        
          (3.7)
        
        
           
        
        
          224 
        
        
           
        
        
          (12.8)
        
      
      
        
          Latin America
        
        
           
        
        
          907 
        
        
           
        
        
          13.4 
        
        
           
        
        
          663 
        
        
           
        
        
          12.8 
        
        
           
        
        
          535 
        
        
           
        
        
          16.1 
        
      
      
        
          TOTAL
        
        
           
        
        
          2,820 
        
        
           
        
        
          11.8 
        
        
           
        
        
          2,000 
        
        
           
        
        
          15.3 
        
        
           
        
        
          1,443 
        
        
           
        
        
          12.8 
        
      
    
    
      Net financial expenses: -10.3% in like-for-like terms
    
    
      ENDESA reported negative financial results of Euro 229 million for 1Q07, 
      a 7% increase over the same period in 2006.
    
    
      Net financial expenses stood at Euro 236 million, or Euro 4 million more 
      than the figure recorded in the first quarter of 2006. Measured on a 
      like-for-like basis, they dropped 10.3%.
    
    
      Net financial expenses for the first quarter of 2007 were reduced by 
      Euro 50 million as a consequence of the higher interest rate used to 
      calculate real value of contingencies related to workforce reduction 
      programmes, which were recorded as provisions - compared with the rate 
      used for this calculation at the end of 2006. The difference is due to a 
      rise in interest rates in the market.
    
    
      Cash flow from operating activities: Growth of 20.7% on a like-for-like 
      basis
    
    
      Cash flow from operations stood at Euro 1,312 million in the first 
      quarter, an increase of 1% from a year earlier. Measured on a 
      like-for-like basis the increase was 20.7%.
    
    
      
        
          CASH FLOW FROM OPERATING ACTIVITIES
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
          %chg vs. 1Q06 (l-f-l)
        
      
      
        
          Spain and Portugal
        
        
           
        
        
          667 
        
        
           
        
        
          29.3 
        
      
      
        
          Europe
        
        
           
        
        
          227 
        
        
           
        
        
          9.1 
        
      
      
        
          Latin America
        
        
           
        
        
          418 
        
        
           
        
        
          15.2 
        
      
      
        
          TOTAL
        
        
           
        
        
          1,312 
        
        
           
        
        
          20.7 
        
      
    
    
      Investments: Euro 761 million. 54.8% in Spain and Portugal
    
    
      ENDESA invested a total of Euro 761 million in the first quarter of 
      2007. Of this figure, Euro 567 million was invested in capex and 
      intangible assets and the remaining Euro 194 million in financial 
      investments.
    
    
      
        
          INVESTMENTS
        
      
      
        
        
        
          Euro million
        
      
      
        
          Capex and intangible assets
        
        
           
        
        
          Financial
        
        
           
        
        
          TOTAL
        
      
      
        
          Spain and Portugal
        
        
          379 
        
        
           
        
        
          38 
        
        
           
        
        
          417 
        
      
      
        
          Europe
        
        
          36 
        
        
           
        
        
          27 
        
        
           
        
        
          63 
        
      
      
        
          Latin America
        
        
          152 
        
        
           
        
        
          129 
        
        
           
        
        
          281 
        
      
      
        
          TOTAL
        
        
          567 
        
        
           
        
        
          194 
        
        
           
        
        
          761 
        
      
    
    
      Financial situation
    
    
      ENDESA’s net debt was Euro 20,556 million as 
      of March 31, 2007, 3.6% higher than at year-end 2006.
    
    
      
        
          BREAKDOWN BY BUSINESS LINE OF ENDESA’S 
          NET DEBT
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          31-12-06 
        
        
           
        
        
          Change
        
        
           
        
        
          % Chg
        
      
      
        
          Business in Spain and Portugal
        
        
           
        
        
          13,252 
        
        
           
        
        
          12,548 
        
        
           
        
        
          704 
        
        
           
        
        
          5.6 
        
      
      
        
          Business in Europe

          
            -Endesa Italia
          
          
            -Other
          
        
        
           
        
        
          1,609

          
            806
          
          
            803 
          
        
        
           
        
        
          1,674

          
            748
          
          
            926 
          
        
        
           
        
        
          (65)

          
            58
          
          
            (123) 
          
        
        
           
        
        
          (3.9)

          
            7.8
          
          
            (13.3) 
          
        
      
      
        
          Business in Latin America

          
            - Enersis Group
          
          
            -Other
          
        
        
           
        
        
          5,695

          
            4,864
          
          
            831 
          
        
        
           
        
        
          5,618

          
            4,749
          
          
            869 
          
        
        
           
        
        
          77

          
            115
          
          
            (38) 
          
        
        
           
        
        
          1.4

          
            2.4
          
          
            (4.4) 
          
        
      
      
        
          TOTAL
        
        
           
        
        
          20,556 
        
        
           
        
        
          19,840 
        
        
           
        
        
          716 
        
        
           
        
        
          3.6 
        
      
    
    
      When assessing ENDESA’s debt level, it must 
      be remembered that at 31 March, 2007. ENDESA had the recognised right to 
      collect Euro 2,813 million in connection with several regulatory 
      matters: Euro 1,354 million for financing the revenue shortfall from 
      regulated activities in Spain, Euro 1,449 million in compensation for 
      stranded costs in non-mainland generation also in Spain and Euro 10 
      million for stranded costs in Italy.
    
    
      Stripping out these regulatory items, ENDESA’s 
      net debt at the end of March 2007 was Euro 17,743 million.
    
    
      The average cost of ENDESA’s total debt was 
      5.63% in 1Q07, while the cost of the debt corresponding to the Enersis 
      Group was an average 9.25%. Stripping out Enersis Group debt, the 
      average cost of ENDESA’s debt was 4.36%.
    
    
      
        
          STRUCTURE OF ENDESA’S NET DEBT
        
      
      
        
           
        
        
           
        
        
          ENDESA

          
            and direct subsidiaries
          
        
        
           
        
        
          Group

          
            Enersis
          
        
        
           
        
        
          Total

          
            ENDESA Group
          
        
      
      
        
           
        
        
           
        
        
          
            Euro
          
          
            million
          
        
        
           
        
        
          % of total
        
        
           
        
        
          
            Euro
          
          
            million
          
        
        
           
        
        
          % of total
        
        
           
        
        
          
            Euro
          
          
            million
          
        
        
           
        
        
          % of total
        
      
      
        
          Euro
        
        
           
        
        
          15,620 
        
        
           
        
        
          100 
        
        
           
        
        
          - 
        
        
           
        
        
          - 
        
        
           
        
        
          15,620 
        
        
           
        
        
          76 
        
      
      
        
          Dollar
        
        
           
        
        
          72 
        
        
           
        
        
          - 
        
        
           
        
        
          2,195 
        
        
           
        
        
          45 
        
        
           
        
        
          2,267 
        
        
           
        
        
          11 
        
      
      
        
          Other currencies
        
        
           
        
        
          - 
        
        
           
        
        
          - 
        
        
           
        
        
          2,669 
        
        
           
        
        
          55 
        
        
           
        
        
          2,669 
        
        
           
        
        
          13 
        
      
      
        
          TOTAL
        
        
           
        
        
          15,692 
        
        
           
        
        
          100 
        
        
           
        
        
          4,864 
        
        
           
        
        
          100 
        
        
           
        
        
          20,556 
        
        
           
        
        
          100 
        
      
      
        
          Fixed rate
        
        
           
        
        
          7,397 
        
        
           
        
        
          47 
        
        
           
        
        
          3,688 
        
        
           
        
        
          76 
        
        
           
        
        
          11,085 
        
        
           
        
        
          54 
        
      
      
        
          Hedged
        
        
           
        
        
          1,722 
        
        
           
        
        
          11 
        
        
           
        
        
          244 
        
        
           
        
        
          5 
        
        
           
        
        
          1,966 
        
        
           
        
        
          10 
        
      
      
        
          Floating
        
        
           
        
        
          6,573 
        
        
           
        
        
          42 
        
        
           
        
        
          932 
        
        
           
        
        
          19 
        
        
           
        
        
          7,505 
        
        
           
        
        
          36 
        
      
      
        
          TOTAL
        
        
           
        
        
          15,692 
        
        
           
        
        
          100 
        
        
           
        
        
          4,864 
        
        
           
        
        
          100 
        
        
           
        
        
          20,556 
        
        
           
        
        
          100 
        
      
      
        
          Avg. life (years)
        
        
           
        
        
          5.0 
        
        
           
        
        
          5.3 
        
        
           
        
        
          5.1 
        
      
    
    
      The average life of the ENDESA Group’s debt 
      at March 31, 2007 was 5.1 years.
    
    
      ENDESA enjoys a high degree of protection against interest-rate risk, 
      since 64% of all its debt is either fixed-rate or hedged. If we include 
      net debt of regulatory assets to be recouped as part of electricity 
      regulation, the percentage of debt that is either fixed rate or hedged 
      climbs to 74% of the total.
    
    
      At 31 March 2007, ENDESA in Spain and its direct subsidiaries, excluding 
      the Enersis Group, had liquidity of Euro 6,245 million, of which Euro 
      5,897 million corresponded to undrawn sums on unconditional credit 
      lines. This liquidity is sufficient to cover maturities falling due in 
      the next 17 months for this group of companies.
    
    
      The Enersis Group held cash and cash equivalents totalling Euro 760 
      million and Euro 535 million in undrawn, unconditional credit lines, 
      covering debt maturities for the next 19 months.
    
    
      As of the date of release of first quarter earnings, ENDESA’s 
      long-term debt ratings are: Standard & Poor's: A. Moody’s: 
      A3, and Fitch: A+, all of them under review for a possible downgrade as 
      a result of the takeover bid for 100% of the Company.
    
    
      Total equity Euro 16,533 million
    
    
      ENDESA’s total equity was Euro 16,533 million 
      as of 31 March, 2007, Euro 597 million more than on 31 December, 2006.
    
    
      Of this total equity, Euro 11,828 million belonged to ENDESA S.A. 
      shareholders, and Euro 4,705 million to minority shareholders of Group 
      companies.
    
    
      Total equity corresponding to ENDESA S.A. shareholders increased by Euro 
      537 million from 31 December, 2006 as a result of net income in the 
      quarter of Euro 633 million, of revenues and expenses recognised in 
      equity, with a net positive effect of Euro 52 million, and of a decrease 
      caused by the distribution to shareholders of a bonus for attendance at 
      the Extraordinary General Shareholders Meeting which was planned for 20 
      March, 2007 and which totalled Euro 148 million.
    
    
      Financial leverage
    
    
      The positive performance of the Group's total equity allowed it to 
      offset an increase of Euro 716 million in net debt, and position ENDESA’s 
      leverage at 124.3% on 31 March, 2007, as compared to 124.5% on 31 
      December, 2006.
    
    
      Financial leverage is in line with targets set out in the Company's 
      Strategic Plan, which calls for leverage not to exceed 140%.
    
    
      Shareholder remuneration
    
    
      ENDESA’s Board of Directors agreed to propose 
      at the Company’s General Shareholders Meeting 
      a dividend payment of Euro 1.64 per share against 2006 earnings, for a 
      total of Euro 1,736 million.
    
    
      After payment on 2 January, 2007 of an interim dividend of Euro 0.50 per 
      share, upon approval of this proposal, the final dividend will climb to 
      Euro 1.14 per share.
    
    
      In addition, ENDESA distributed an attendance bonus of Euro 0.15 per 
      share in 1Q07, or additional compensation of Euro 148 million, for 
      attendance at the Extraordinary General Shareholders Meeting, scheduled 
      for 20 March, 2007.
    
    
      In the event that the Shareholders Meeting approves payment of the total 
      2006 dividend mentioned above, ENDESA will have distributed to 
      shareholders in 2005 and 2006 a combined total of Euro 4,425 million, or 
      44.7% of the Euro 9,900 million it has pledged to distribute in 
      dividends in the period 2005-2009.
    
    
      STRATEGIC PLAN
    
    
      Recurrent income obtained by ENDESA in the first three months was in 
      line with targets set out in its Strategic Plan.
    
    
      This Plan was announced to the markets in October 2005, and it is worth 
      recalling that, since its implementation, the Company has not only met, 
      but exceeded, the targets laid out for performance of its key economic 
      variables, as a consequence of the excellent performance among its 
      businesses and a favourable macroeconomic and industry context.
    
    
      This has led to successive Plan updates, which have extended the scope 
      of the targets established.
    
    
      Strategic objectives
    
    
      The last Plan update, reported to financial markets on 24 January, 
      foresees meeting the following targets in 2006-2009:
    
    
      
        Average compound annual EBITDA growth of 8%, to Euro 8,500 million in 
        2009.
      
      
        Average compound growth of 5% in profits, to Euro 3,075 million in 
        2009, bringing ordinary profit to about Euro 3,000 million.
      
      
        Payment to shareholders totalling Euro 9,900 million in dividends over 
        the period 2005-2009. Of this amount, Euro 7,600 million will be 
        comprised of dividends on ordinary income, and Euro 2,300 million will 
        stem from capital gains from the sale of non-strategic assets.
      
      
        Leverage below 140%.
      
    
    
      Results in line with targets
    
    
      Results posted in the first quarter were in line with meeting these 
      goals:
    
    
      
        EBITDA climbed 15.3% on a like-for-like basis compared with 1Q06.
      
      
        A like-for-like net income increase of 11.4%
      
      
        Financial leverage of 124.3%.
      
    
    
      Shareholder remuneration
    
    
      As for dividends, the Company's Board of Directors will propose at the 
      General Shareholders Meeting the payment of a dividend of Euro 1.64 per 
      share against 2006 results, for a total of Euro 1,736 million.
    
    
      Of the proposed dividend, Euro 1.27 per share will come from ordinary 
      activities, while Euro 0.37 per share will stem from capital gains from 
      sale of non-strategic assets.
    
    
      If this dividend proposal is approved at the General Shareholders 
      Meeting, the Company will have distributed to its shareholders a total 
      of Euro 4,425 million in the first two years of the 2005-2009 Strategic 
      Plan – including the attendance bonus of Euro 
      0.15 per share for the Extraordinary General Shareholders Meeting 
      initially scheduled for 20 March, 2007 - which translates into meeting 
      44.7% of the target established for the whole period: or 75% of the 
      target for capital gains from sale of non-strategic assets, and 35% of 
      the target for dividends from ordinary activities.
    
    
      RESULTS BY BUSINESS LINE 
    
    
      BUSINESS IN SPAIN AND PORTUGAL
    
    
      Net income Spain and Portugal: Euro 437 million
    
    
      Net income from business in Spain and Portugal was Euro 437 million in 
      the first quarter of 2007, an increase of 22.8% (like-for-like) compared 
      to the same period last year and contributing 69% to the Company’s 
      total bottom line.
    
    
      EBITDA rose 24.5% to Euro 1,027 million and EBIT by 21.9% to Euro 684 
      million (both on a like-for-like basis).
    
    
      Highlights
    
    
      In the first quarter of the year the Spanish electricity market 
      witnessed a 41.9% fall in wholesale market prices compared to the first 
      quarter of 2006, caused by a demand slowdown, a fall of CO2 
      prices from Euro 21.88/tn to Euro 1.26/tn, and growth of 55.8% and 13% 
      respectively in hydro generation and renewables/CHP, particularly wind 
      generation.
    
    
      However, this decline in prices had a limited impact on ENDESA’s 
      margins thanks to the Company’s focus on 
      supplying the deregulated market, which acts as natural protection 
      against the risk associated with generation activities and the fall in 
      variable costs, mostly CO2 costs, as we explain 
      above. ENDESA sold 51% of its output to end customers on the deregulated 
      market in the first quarter of the year, a segment where sales prices 
      increased by 20.7%. In contrast, the rest of the sector sold only 16% of 
      its output on the deregulated market. This demonstrates that the Company’s 
      supply strategy gives a comparatively greater coverage against 
      fluctuations in wholesale market prices.
    
    
      We would also note that the impact of Royal Decree 3/2006 on results was 
      lower than in the same period last year. This year, bilateral contracts 
      do not include the output required to cover supply demands, which in 
      1Q06 had a negative impact of Euro 43 million.
    
    
      With regard to the deduction of remuneration according to the value of 
      greenhouse gas emissions, ENDESA is applying the same criteria in 2007 
      as it did in 2006. The fall in CO2 prices means 
      a deduction of only Euro 8 million, compared to Euro 121 million in the 
      first quarter of 2006.
    
    
      Additionally, results reported for the gas business have shown a 
      significant improvement in 1Q07, contributing Euro 64 million to gross 
      margin this quarter vs. Euro 38 million in the same period last year. 
      ENDESA reported a liberalized gas market share of 13.1%.
    
    
      Lastly, revenues from distribution business increased by Euro 85 million 
      in the first quarter of the year. Recent regulatory changes were largely 
      responsible for this performance (Euro 53 million), and the updated 
      revenues for the period.
    
    
      The increase in distribution revenues, coupled with sharp reduction in 
      costs, have driven a 55.7% year-on-year or Euro 131 million increase in 
      EBITDA in 1Q07.
    
    
      Key operating highlights
    
    
      Still Spain’s leading electric utility
    
    
      ENDESA has maintained its leading position in the Spanish electricity 
      market in the first quarter this year.
    
    
      The Company boasts a 34.6% market share in ordinary regime electricity 
      generation, a 41.7% share in distribution. 55.6% in sales to deregulated 
      customers and 42.8% in total sales to final customers.
    
    
      Competitive advantages in generation relative to peers
    
    
      In Spain, ENDESA produced a total of 22,972 GWh in 1Q07, compared to 
      total demand of 28.419 GWh. This means it met 80.8% of its demand from 
      its own output.
    
    
      Nuclear and hydro powered energy represented 45.9% of the Company’s 
      mainland generation mix, compared to 43.4% for the rest of the sector. 
      Furthermore, the load factor at its thermal facilities was also higher 
      than at its competitors: 65.8% vs. 49.5%, respectively.
    
    
      The load factor at the Company’s coal plants 
      was a noteworthy 73.3%.
    
    
      Increase in customers
    
    
      The total demand supplied by ENDESA, measured through sales, was 28,419 
      GWh in 1Q07, an increase of 4.8% vs. the first quarter of 2006.
    
    
      The number of customers supplied by the Company in the distribution 
      business grew by 250,708 in the last twelve months, reaching 11,278,929 
      at 31 March 2007. Customers on the deregulated market numbered 1,115,072 
      at the close of the first quarter, i.e. up 7.4% on the same period last 
      year.
    
    
      Further improvements in quality of supply
    
    
      The Quality Plan implemented by ENDESA over the last few years has led 
      to a sharp improvement in service supply quality. This was once again 
      evident during 1Q07. Particularly noteworthy if we consider that this 
      has been achieved in a scenario that featured sharp increases on demand 
      peaks.
    
    
      ENDESA’s system average interruption duration 
      index (SAIDI or TIEPI) for 1Q07 was 22 minutes, 34% better than in 1Q06. 
      The 12 month period from 1 April 2006 to 30 March 2007 reflected an 
      improvement of 37% vs. the prior 12 month period.
    
    
      In terms of customer services, ENDESA's retention rate for customers 
      switching to the deregulated market is 109.4%, which implies that the 
      net balance between customers captured and customers lost is positive. 
      This rate is higher than its peers and reflects strong loyalty to the 
      Company.
    
    
      Increase in like-for-like sales
    
    
      Like-for-like sales from electricity business in Spain and Portugal grew 
      1.6% in 1Q07 to Euro 2,405 million, compared to 1Q06.
    
    
      The tariff deficit
    
    
      Despite the 4.3% increase in the electricity tariff in 2007, regulated 
      revenues were not sufficient to fully cover system costs. This led to an 
      estimated deficit in revenues from regulated activities in the sector of 
      Euro 280 million, of which Euro 124 million corresponds to ENDESA.
    
    
      Article 2 of Royal Decree 3/2006 states that regulated revenues should 
      decline with the inclusion of CO2 rights by applying the matched selling 
      price in the wholesale market. This decline amounts to Euro 8 million, 
      so the net tariff shortfall that must be financed stands at Euro 116 
      million.
    
    
      In accordance with Royal Decree 1634/2006, this deficit will be 
      recovered in 2007 by transferring collection rights to third parties via 
      auction.
    
    
      Additionally, the settlement amount corresponding to energy sales made 
      between operators belonging to the same business group as part of a 
      bilateral contract in 2006 has yet to be determined, along with the 
      discount corresponding to the incorporation of CO2 
      emission rights received free of charge in the setting of prices for the 
      wholesale market, pursuant to Royal Decree 3/2006.
    
    
      As the government has issued no statement to this respect, in the 
      recoverable amount deriving from the tariff deficit in 2006 booked in 
      the Company's accounts for 1Q07 the same estimates put forward in 
      ENDESA's consolidated financial statements for 2006 are maintained. As 
      stated then, any variations between the estimates put forward and 
      definitive figures shall be booked on the Company’s 
      P&L for the year in which they become known.
    
    
      The deficit to be recovered in 2006 has been updated solely with 
      information made available in the last provisional settlement made by 
      the CNE. This update has had no impact on net profit.
    
    
      Revenues: Euro 2,480 million
    
    
      ENDESA reported revenues of Euro 2,480 million from this activity in 
      Jan-Mar 2007, a drop of 6.6% compared to 1Q06 (like-for-like). Of this 
      amount, sales accounted for Euro 2,405 million, 1.6% higher than in 1Q06 
      (like-for-like).
    
    
      
        
          SPAIN AND PORTUGAL SALES
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06 (l-f-l)
        
        
           
        
        
          Chg (l-f-l)
        
        
           
        
        
          
            %
          
          
            Chg
          
        
      
      
        
          Mainland generation under Ordinary Regime
        
        
           
        
        
          990 
        
        
           
        
        
          1.151 
        
        
           
        
        
          (161)
        
        
           
        
        
          (14.0)
        
      
      
        
          Sales to deregulated customers
        
        
           
        
        
          544 
        
        
           
        
        
          422 
        
        
           
        
        
          122 
        
        
           
        
        
          28.9 
        
      
      
        
          Other sales in the OMEL
        
        
           
        
        
          446 
        
        
           
        
        
          729 
        
        
           
        
        
          (283)
        
        
           
        
        
          (38.8)
        
      
      
        
          Renewable/CHP generation
        
        
           
        
        
          69 
        
        
           
        
        
          83 
        
        
           
        
        
          (14)
        
        
           
        
        
          (16.9)
        
      
      
        
          Regulated revenues from distribution
        
        
           
        
        
          498 
        
        
           
        
        
          413 
        
        
           
        
        
          85 
        
        
           
        
        
          20.6 
        
      
      
        
          Non-mainland generation and supply*
        
        
           
        
        
          454 
        
        
           
        
        
          415 
        
        
           
        
        
          39 
        
        
           
        
        
          9.4 
        
      
      
        
          Supply to deregulated customers outside Spain
        
        
           
        
        
          88 
        
        
           
        
        
          76 
        
        
           
        
        
          12 
        
        
           
        
        
          15.8 
        
      
      
        
          Gas supply
        
        
           
        
        
          205 
        
        
           
        
        
          140 
        
        
           
        
        
          65 
        
        
           
        
        
          46.4 
        
      
      
        
          Regulated revenues from gas distribution
        
        
           
        
        
          21 
        
        
           
        
        
          12 
        
        
           
        
        
          9 
        
        
           
        
        
          75.0 
        
      
      
        
          Other sales and services rendered
        
        
           
        
        
          80 
        
        
           
        
        
          76 
        
        
           
        
        
          4 
        
        
           
        
        
          5.3 
        
      
      
        
          TOTAL
        
        
           
        
        
          2,405 
        
        
           
        
        
          2,366 
        
        
           
        
        
          39 
        
        
           
        
        
          1.6 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            * For purposes of comparison. 1Q06 figures do not include the 
            Euro 212 million for compensation for non-mainland systems in 
            2001-2005 booked in that quarter.
          
        
      
    
    
      Mainland generation
    
    
      Demand for electricity in the Spanish mainland system as a whole in 1Q07 
      grew by 2.2%. Ordinary regime generation fell 13% and renewable/CHP 
      generation was 3.7% higher.
    
    
      ENDESA’s mainland electricity output was 
      19,457 GWh. 2.8% lower than the same period last year.
    
    
      Of this amount, 18,634 GWh corresponded to power generated under 
      ordinary regime, a fall of 3.9% compared to 1Q06, in line with the 
      decline in this type of generation in Spain as a whole.
    
    
      ENDESA’s renewables/CHP output was 823 GWh. 
      This marked an increase of 33.8%, which was much higher than the rise 
      seen in this type of generation in the system as a whole.
    
    
      Average pool price rose to Euro 44.11/MWh in 1Q07, down 41.9% compared 
      to 1Q06.
    
    
      Although the fall in mainland output and lower pool prices were partly 
      offset by higher prices charged to deregulated customers, there was a 
      14% decrease in mainland electricity generation sales under the ordinary 
      regime vs. 1Q06. Additionally, lower prices were also offset by lower 
      variable costs.
    
    
      Lastly, we would point out that ENDESA’s coal 
      plants continued to play an important role in meeting Spanish 
      electricity demand in 1Q07. The utilization rate at these plants was 
      73.3% in response to grid requirements, proving that. in spite of the 
      CCGT and wind farm capacity additions, coal plants are still 
      indispensable to meet the country’s 
      electricity requirements. Specifically, ENDESA's coal-fired plants 
      covered 12.2% of mainland demand in the first quarter of the year.
    
    
      ENDESA renewable/CHP generation
    
    
      Renewable and CHP generation companies fully consolidated by ENDESA 
      produced 823 GWh of power in 1Q07. This indicates an increase of 33.8% 
      compared to the same period in 2006. ENDESA also has holdings in other 
      companies which additionally generated 233 GWh during the same period.
    
    
      Revenues from sales of renewable/CHP energy generated by consolidated 
      companies totalled Euro 69 million, 16.9% less than in the first quarter 
      of 2006.
    
    
      This decline is due to the cessation of renewable energy supply 
      activities carried out by ECyR during 1Q06 which entailed higher 
      electricity purchases and sales. Discounting this factor, sales figures 
      would remain stable as the negative impact of the lower sales price is 
      offset the increase in generation.
    
    
      Despite this fall in revenues, gross margin on ENDESA's renewables/CHP 
      generation business grew 4.8% to Euro 65 million.
    
    
      Supply to deregulated customers
    
    
      ENDESA had 1,115,072 customers on the deregulated market at the end of 
      1Q07: 1,044,900 in the Spanish mainland market, 66,300 in non-mainland 
      markets and 3,872 in deregulated markets other than Spain.
    
    
      ENDESA's sales to these customers as a whole rose to 9,634 GWh in the 
      first quarter of 2007, 0.3% more than in the same period last year. Of 
      this amount, 8,452 GWh was sold to the deregulated Spanish market, i.e. 
      largely in line with the figure of 8,476 GWh sold in the first quarter 
      of 2006, and 1,182 GWh to European deregulated markets, an increase of 
      4.6%.
    
    
      Sales to deregulated customers in Spain (excluding tolls paid to Endesa 
      Distribución), totalled Euro 574 million, a 
      27% increase on 1Q06. Of this amount, Euro 544 million corresponded to 
      mainland deregulated market and Euro 30 million to non-mainland market.
    
    
      Revenues from sales to deregulated European markets other than Spain 
      were Euro 88 million, up 15.8% compared to 1Q06.
    
    
      Worth highlighting is the 20.7% year-on-year increase in the average 
      selling price to final customers deriving from the Company’s 
      more stringent and selective commercial policy.
    
    
      Distribution
    
    
      ENDESA distributed 29,682 GWh of electricity in the Spanish market in 
      1Q07, 1% more than in the first three months of last year.
    
    
      Revenues from regulated distribution activities were Euro 498 million, a 
      20.6% increase on the figure seen in 1Q06, due mainly higher 
      remuneration for this activity set by the Royal Decree governing the 
      electricity tariff for 2007.
    
    
      ENDESA supplied 18,785 GWh to customers on the regulated Spanish market 
      in the period, 7.3% more than in the same period last year.
    
    
      Non-mainland generation
    
    
      ENDESA’s output in non-mainland systems was 
      3,515 GWh in the first quarter of 2007, 1.7% more than in the same 
      period of 2006.
    
    
      Like-for-like sales were 10.1% higher at Euro 424 million.
    
    
      Gas distribution and supply
    
    
      ENDESA sold a total of 9,013 GWh of natural gas in 1Q07, 26.2% more than 
      in the same period last year.
    
    
      Of this amount, 8,759 GWh were sold through fully consolidated 
      companies, representing a 30% increase vs. 1Q06.
    
    
      Also of this amount, 7,645 GWh were sold to customers on the deregulated 
      market, an increase of 35.9%, and 1,114 GWh to customers on the 
      regulated market in line with the figure seen in 1Q06.
    
    
      The 9,013 GWh sold in both the regulated and deregulated markets, 
      together with the 4,064 GWh consumed in ENDESA’s 
      own generation plants, amount to a total of 13,077 GWh, implying a 
      market share of 12.1%.
    
    
      In economic terms, the Company obtained revenues of Euro 205 million 
      from sales of gas on the deregulated market, an increase of 46.4% vs. 
      1Q06. This increase triggered growth of 192.9% on the gross margin from 
      gas supply, putting this figure at Euro 41 million.
    
    
      Revenues from regulated gas distribution totalled Euro 21 million, Euro 
      9 million more than the same period last year.
    
    
      Other operating revenues
    
    
      Other operating revenues in 1Q07 came to Euro 75 million, Euro 214 
      million less than in 1Q06.
    
    
      This item includes Euro 11 million corresponding to the 1Q07 portion of 
      CO2 emission rights allocated to ENDESA within 
      the scope of the Spanish National Allocation Plan for emissions (NAP).
    
    
      This figure is lower than the Euro 228 million recorded under revenues 
      in 1Q06, due mainly to the strong fall in the market price of these 
      rights. However, this drop in revenues was offset by the lower expense 
      recorded for use of these emission rights.
    
    
      Operating expenses
    
    
      The breakdown of operating expenses in Spanish and Portuguese business 
      in 1Q07 is provided below:
    
    
      
        
          OPERATING EXPENSE IN SPAIN AND PORTUGAL
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          Change
        
        
           
        
        
          % Chg
        
      
      
        
          Purchases and services
        
        
           
        
        
          965 
        
        
           
        
        
          1,340 
        
        
           
        
        
          (375)
        
        
           
        
        
          (28.0)
        
      
      
        
          Power purchases
        
        
           
        
        
          253 
        
        
           
        
        
          301 
        
        
           
        
        
          (48)
        
        
           
        
        
          (15.9)
        
      
      
        
          Fuel consumption
        
        
           
        
        
          492 
        
        
           
        
        
          562 
        
        
           
        
        
          (70)
        
        
           
        
        
          (12.5)
        
      
      
        
          Power transmission expenses
        
        
           
        
        
          138 
        
        
           
        
        
          95 
        
        
           
        
        
          43 
        
        
           
        
        
          45.3 
        
      
      
        
          Other supplies and services
        
        
           
        
        
          82 
        
        
           
        
        
          382 
        
        
           
        
        
          (300)
        
        
           
        
        
          (78.5)
        
      
      
        
          Personnel expenses
        
        
           
        
        
          276 
        
        
           
        
        
          250 
        
        
           
        
        
          26 
        
        
           
        
        
          10.4 
        
      
      
        
          Other operating expenses
        
        
           
        
        
          250 
        
        
           
        
        
          271 
        
        
           
        
        
          (21)
        
        
           
        
        
          (7.7)
        
      
      
        
          Depreciation and amortisation
        
        
           
        
        
          343 
        
        
           
        
        
          264 
        
        
           
        
        
          79 
        
        
           
        
        
          29.9 
        
      
      
        
          TOTAL
        
        
           
        
        
          1,834 
        
        
           
        
        
          2,125 
        
        
           
        
        
          (291)
        
        
           
        
        
          (13.7)
        
      
    
    
      Power purchases
    
    
      Power purchases during the period stood at Euro 253 million, a drop of 
      15.9% vs. 1Q06.
    
    
      This fall reflects the net impact of a decline in operations costs in 
      wholesale generation market as a result of lower average pool price, 
      partly offset by higher gas purchases for supply to the deregulated 
      market. These purchases increased despite the lower price of gas as a 
      result of the 35.9% rise in sales to these customers.
    
    
      Fuel consumption
    
    
      Fuel consumption reached Euro 492 million in 1Q07, down 12.5% vs. 1Q06. 
      This decrease was due to the fall in raw materials costs in the 
      international markets, and. to a lesser extent lower thermal output 
      during the period.
    
    
      Other supplies and services
    
    
      Expenses under this line item totalled Euro 82 million in 1Q07, Euro 300 
      million lower than in 1Q06.
    
    
      Of this amount, Euro 253 million corresponds to the lower value assigned 
      to the freely allocated emission rights in 2007 vs. 2006, as described 
      in section “Other operating revenues”, 
      the lower cost rights acquired from third parties and the 1.9 million 
      ton reduction in CO2 emissions made.
    
    
      Personnel and other fixed operating expenses
    
    
      At 31 March, 2007, ENDESA’s workforce in 
      Spain and Portugal stood at 12,706 employees, 5 fewer than at 31 March, 
      2006.
    
    
      Fixed costs stood at Euro 526 million in 1Q07 up 1% vs. the same period 
      last year.
    
    
      Net financial expenses: 33.9% lower (like-for-like)
    
    
      Financial expenses in 1Q07 stood at Euro 71 million. 35.5% lower than 
      the figure reported in 1Q06 (like-for-like).
    
    
      Of this amount, Euro 74 million corresponded to net interest expenses, 
      33.9% less than in the same period last year (like-for-like), and Euro 3 
      million to exchange-rate gains.
    
    
      When assessing financial results, the Euro 2,687 million financial 
      assets corresponding to the tariff deficit and non-mainland 
      compensation, both of which bear financial interest, must be considered.
    
    
      Net financial expenses in 1Q07 include revenue of Euro 50 million 
      corresponding to a higher interest rate applied to calculate the value, 
      at 31 March 2007, of obligations related to workforce reductions 
      programs existing at that date compared to the rate used to make this 
      calculation at year end 2006. The difference is due to higher market 
      interest rates.
    
    
      Net financial debt for the Spain and Portugal business at 31 March, 2007 
      stood at Euro 13,252 million vs. Euro 12,548 million at year-end 2006.
    
    
      Cash flow from operating activities: Euro 667 million
    
    
      Cash flow from operating activities from the Spanish and Portuguese 
      electricity business totalled Euro 667 million in 1Q07, an increase of 
      29.3% on the same period last year on a like-for-like basis.
    
    
      Investments: Euro 417 million
    
    
      Investments in Spain and Portugal totalled Euro 417 million in 1Q07, 
      5.4% lower than in 1Q06, 87.8% of this figure corresponded to tangible 
      investment; i.e. capex for the development or improvement of electricity 
      generation and distribution facilities.
    
    
      
        
          TOTAL INVESTMENT IN SPAIN AND PORTUGAL
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Capex
        
        
           
        
        
          366 
        
        
           
        
        
          401 
        
        
           
        
        
          (8.7)
        
      
      
        
          Intangible
        
        
           
        
        
          13 
        
        
           
        
        
          2 
        
        
           
        
        
          550.0 
        
      
      
        
          Financial
        
        
           
        
        
          38 
        
        
           
        
        
          38 
        
        
           
        
        
          - 
        
      
      
        
          Total investments
        
        
           
        
        
          417 
        
        
           
        
        
          441 
        
        
           
        
        
          (5.4)
        
      
      
        
          
             
          
        
      
      
        
          CAPEX IN SPAIN AND PORTUGAL
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Generation
        
        
           
        
        
          134 
        
        
          127 
        
        
           
        
        
          5.5 
        
      
      
        
          Ordinary regime
        
        
           
        
        
          100 
        
        
          110 
        
        
           
        
        
          (9.1)
        
      
      
        
          Renewables/CHP
        
        
           
        
        
          34 
        
        
          17 
        
        
           
        
        
          100.0 
        
      
      
        
          Distribution
        
        
           
        
        
          229 
        
        
          263 
        
        
           
        
        
          (12.9)
        
      
      
        
          Other
        
        
           
        
        
          3 
        
        
          11 
        
        
           
        
        
          (72.7)
        
      
      
        
          Total
        
        
           
        
        
          366 
        
        
          401 
        
        
           
        
        
          (8.7)
        
      
    
    
      The breakdown of capex reflects the substantial effort made by the 
      Company to improve service quality in Spain, with investment in 
      distribution facilities accounting for 62.6% of the total.
    
    
      We also highlight the significant increase in capital expenditure to 
      expand ENDESA’s generation capacity, most 
      notably on construction of the As Pontes (800 MW) combined cycle 
      facilities and capacity increases in special regime.
    
    
      BUSINESS IN EUROPE
    
    
      Net income: Euro 100 million
    
    
      Net income from electricity business in Europe totalled Euro 100 million 
      in the first quarter of 2007, a decrease of 15.3% from the same period 
      in the previous year.
    
    
      Stripping out the effect from the cancellation of Delibera 254 made 
      during 1Q06, total net income would have only decreased by 3.8%.
    
    
      Net income reduction was mainly due to the output fall in Italy (lower 
      electricity demand as a result of climatic conditions and larger imports 
      from France taking advantage of the price gap) and in France (lower 
      electricity demand and lower utilization rate at thermal plants due to 
      higher rainfall levels).
    
    
      Highlights
    
    
      ENDESA enters the Greek market
    
    
      On 28 March 2007 Endesa Europa signed a strategic alliance with Greek 
      metallurgy and engineering company Mytilineos Holdings S.A. to operate 
      in the Greek market with an option to expand into other markets in 
      southeast Europe.
    
    
      The agreement will create a joint venture in which ENDESA will hold a 
      stake of 50.01%.
    
    
      Mytilineos will contribute all its energy assets (thermal and renewable) 
      as well as its current licenses. These energy assets include a 511 MW 
      CHP plant to come on line next June, a CCGT that will be on stream on 
      2009 and renewable projects totalling 604 MW, of which 54 MW are 
      currently in operation. The contribution of these assets is expected to 
      get underway immediately and should be finalised over the next twelve 
      months.
    
    
      Endesa will also supply Euro 485 million and, depending on the success 
      of wind projects currently waiting for authorization, an additional fee 
      up to Euro 115 million.
    
    
      The new company, which will have the largest order book of construction 
      and development projects in Greece and a balanced generation mix of both 
      thermal and renewable capacity, will become the largest independent 
      energy operator in the country.
    
    
      New installations in Italy and France
    
    
      At ENDESA Europa, construction on the two 400MW groups for the Scandale 
      CCGT plant (Calabria) proceeded according to schedule during 1Q07.
    
    
      In the renewable energies area, Endesa Europa successfully completed its 
      agreement with Gamesa to acquire wind farms in Italy, allowing it to add 
      seven plants of this type to its generation assets in this country, with 
      total capacity of 240 MW, in a period just under three years.
    
    
      The two last companies to be included in this agreement, acquired in 
      February this year, own the construction and operation rights for the 
      Piano di Corda and Serra Pelata wind farms, with total installed 
      capacity of 122 MW.
    
    
      These farms, in addition to the Florinas, Trapani and Vizzini 
      installations, will give Endesa Europa a 15% share of installed wind 
      capacity in Italy, will ensure up to 77% of its "green certificates" in 
      the Italian market and will give it one of the biggest wind generation 
      operations in the country with installed capacity close to 400 MW in 
      operation in 2009.
    
    
      The activity of the French generation company, Snet, since last year 
      operating under the commercial name, Endesa France, during the first 
      quarter of 2007 form part of the group’s 
      business plan which envisages the development of new capacity to a total 
      of 2,000 MW of new combined cycle capacity and 200 MW in renewable plant.
    
    
      As part of this plan, the group's first wind farm (Lehaucourt 10 MW) 
      came on stream during the first quarter of the year, and construction of 
      the Les Vents de Cernon has started. This will have installed capacity 
      of 17.5 MW and is expected to start operating this year.
    
    
      Dividend payments at Endesa Italia and Snet
    
    
      In 1Q07 Endesa Italia paid shareholders Euro 216 million, of which Euro 
      173 million corresponded to Endesa Europa.
    
    
      Snet also paid a dividend of Euro 33 million to its shareholders, of 
      which Euro 21 million corresponded Endesa Europa.
    
    
      Lower output and sales due to weather conditions
    
    
      ENDESA’s total generation in Europe in the 
      first quarter of 2007 amounted to 8,612 GWh. a decrease of 27.9% on the 
      same period in 2006. Electricity sales were down 13.7% to 13,154 GWh.
    
    
      These losses were due mainly to weather conditions in France and Italy, 
      where temperatures were milder than in the first quarter of 2006, 
      leading to a moderation in demand evolution. Also, the price 
      differentials between France (where they have fallen sharply) and Italy 
      has led the latter to replace its own production with imports.
    
    
      
        
          BREAKDOWN OF ENDESA’S OUTPUT AND SALES 
          IN EUROPE
        
      
      
        
           
        
        
           
        
        
          Output (GWh)
        
        
           
        
        
           
        
        
           
        
        
          Sales (GWh)
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Italy
        
        
           
        
        
          6,354 
        
        
           
        
        
          7,619 
        
        
           
        
        
          (16.6)
        
        
           
        
        
          8,501 
        
        
           
        
        
          9,206 
        
        
           
        
        
          (7.7)
        
      
      
        
          France
        
        
           
        
        
          1,691 
        
        
           
        
        
          3,593 
        
        
           
        
        
          (52.9)
        
        
           
        
        
          4,086 
        
        
           
        
        
          5,301 
        
        
           
        
        
          (22.9)
        
      
      
        
          Poland*
        
        
           
        
        
          567 
        
        
           
        
        
          731 
        
        
           
        
        
          (22.4)
        
        
           
        
        
          567 
        
        
           
        
        
          731 
        
        
           
        
        
          (22.4)
        
      
      
        
          TOTAL
        
        
           
        
        
          8,612 
        
        
           
        
        
          11,943 
        
        
           
        
        
          (27.9)
        
        
           
        
        
          13,154 
        
        
           
        
        
          15,238 
        
        
           
        
        
          (13.7)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            (*) ENDESA is present in the generation business in Poland 
            through the Bialystock CHP. which is controlled by Snet.
          
        
      
    
    
      EBITDA: Euro 310 million
    
    
      ENDESA’s business activity in Europe reported 
      EBITDA of Euro 310 million in 1Q07, a drop of 3.7% vs. 1Q06 and EBIT of 
      Euro 224 million, down 12.8%.
    
    
      These decreases were due to the aforementioned drop in output and lower 
      prices on the wholesale market both in Italy and France.
    
    
      
        
          
            EBITDA & EBIT IN EUROPE
          
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          EBITDA

          
            (Euro million)
          
        
        
           
        
        
          EBIT

          
            (Euro million)
          
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Italy (*)
        
        
           
        
        
          247 
        
        
           
        
        
          260 
        
        
           
        
        
          (5.0)
        
        
           
        
        
          186 
        
        
           
        
        
          222 
        
        
           
        
        
          (16.2)
        
      
      
        
          Snet
        
        
           
        
        
          60 
        
        
           
        
        
          56 
        
        
           
        
        
          7.1 
        
        
           
        
        
          34 
        
        
           
        
        
          29 
        
        
           
        
        
          17.2 
        
      
      
        
          Trading
        
        
           
        
        
          15 
        
        
           
        
        
          15 
        
        
           
        
        
          - 
        
        
           
        
        
          15 
        
        
           
        
        
          15 
        
        
           
        
        
          - 
        
      
      
        
          Holding & others
        
        
           
        
        
          (12)
        
        
           
        
        
          (9)
        
        
           
        
        
          (33.3)
        
        
           
        
        
          (11)
        
        
           
        
        
          (9)
        
        
           
        
        
          (22.2)
        
      
      
        
          Total
        
        
           
        
        
          310 
        
        
           
        
        
          322 
        
        
           
        
        
          (3.7)
        
        
           
        
        
          224 
        
        
           
        
        
          257 
        
        
           
        
        
          (12.8)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            (*) Includes Endesa Italia. Teverola and Ferrara in 1Q07 (the 
            last two were acquired in September 2006).
          
        
      
    
    
      Italy maintains good performance
    
    
      Electricity demand in the Italian power system as a whole fell by nearly 
      2% in 1Q07 mainly due to unfavourable weather conditions.
    
    
      This, coupled with increase in imports in the north of the country due 
      to the price differential between Italy and France, meant that 
      utilization at ENDESA’s plants in Italy was 
      lower, leading to a 16.6% fall in power generation (which stood at 6,354 
      GWh). Furthermore, these two factors triggered a drop in electricity 
      prices on the wholesale market and a 12.1% decline in group sales in 
      Italy.
    
    
      The fall in revenues that this caused (-13.5%) was not fully offset by 
      the 23% reduction in fuel costs and the lower cost of CO2 
      emissions prompted by the sharp fall in the price of emission rights and 
      therefore the impact on both EBITDA (-5%) and EBIT (-16.2%) was negative.
    
    
      
        
          ENDESA ITALIA KEY DATA
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          Change
        
        
           
        
        
          % Chg
        
      
      
        
          Revenues
        
        
           
        
        
          700 
        
        
           
        
        
          809 
        
        
           
        
        
          (109)
        
        
           
        
        
          (13.5)
        
      
      
        
          Gross margin
        
        
           
        
        
          288 
        
        
           
        
        
          299 
        
        
           
        
        
          (11)
        
        
           
        
        
          (3.7)
        
      
      
        
          EBITDA
        
        
           
        
        
          247 
        
        
           
        
        
          260 
        
        
           
        
        
          (13)
        
        
           
        
        
          (5.0)
        
      
      
        
          EBIT
        
        
           
        
        
          186 
        
        
           
        
        
          222 
        
        
           
        
        
          (36)
        
        
           
        
        
          (16.2)
        
      
    
    
      We note that the EBITDA reported by ENDESA's businesses in Italy in 1Q06 
      included revenues of Euro 26 million from the cancellation of Delibera 
      254. Stripping out this effect, which did not relate to electricity 
      sales in 2006, EBITDA would have increased by 5.6%.
    
    
      Growing results at Snet
    
    
      Snet’s results marked a positive trend in 
      1Q07, despite a drop in electricity generation triggered by unfavourable 
      weather conditions as in Italy. This positive performance was 
      underpinned by a drop in fixed and variable costs.
    
    
      EBITDA in 1Q07 rose 7.1% to Euro 60 million and EBIT by 17.2% to Euro 34 
      million vs. 1Q06.
    
    
      
        
          SNET KEY DATA
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          Change
        
        
           
        
        
          % Chg
        
      
      
        
          Revenues
        
        
           
        
        
          273 
        
        
           
        
        
          333 
        
        
           
        
        
          (60)
        
        
           
        
        
          (18.0)
        
      
      
        
          Gross profit
        
        
           
        
        
          95 
        
        
           
        
        
          94 
        
        
           
        
        
          1 
        
        
           
        
        
          1.1 
        
      
      
        
          EBITDA
        
        
           
        
        
          60 
        
        
           
        
        
          56 
        
        
           
        
        
          4 
        
        
           
        
        
          7.1 
        
      
      
        
          EBIT
        
        
           
        
        
          34 
        
        
           
        
        
          29 
        
        
           
        
        
          5 
        
        
           
        
        
          17.2 
        
      
    
    
      The French generation company reported revenues of Euro 273 million in 
      1Q07, a drop of 18% vs. 1Q06. This decrease was due to a 47.8% drop in 
      electricity generation and lower wholesale market prices.
    
    
      Variable costs fell Euro 61 million, i.e. 25.5% due mainly to a decrease 
      in production, while fixed costs declined 7.9%.
    
    
      Lower fixed and variable costs allowed to largely offset the fall in 
      revenues, leading to a 7.1% increase in EBITDA and a 17.2% rise in EBIT, 
      to Euro 60 million and Euro 34 million respectively.
    
    
      European business debt: down Euro 65 million
    
    
      Net debt at ENDESA’s electricity business in 
      Europe stood at Euro 1.609 million at the close of 1Q07, a reduction of 
      Euro 65 million, or 3.9%, over the debt balance at the end of 1Q06.
    
    
      Net financial results amounted to an expense of Euro 19 million in 1Q07, 
      Euro 8 million higher than in 1Q06.
    
    
      Note that in 2H06, debt increased in the European business line due to 
      investments carried out during the period, leading to a higher financial 
      expense in 1Q07 vs. 1Q06.
    
    
      Cash flow from operating activities: Euro 227 million
    
    
      ENDESA’s business in Europe generated Euro 
      227 million of cash flow in 1Q07, an increase of 9.1% with respect to 
      1Q06.
    
    
      Investments: Euro 63 million
    
    
      Investment in this business area totalled Euro 63 million in 1Q07. Of 
      this amount, Euro 34 million was capex (Endesa Italy: Euro 23 million, 
      SNET: Euro 11 million).
    
    
      Financial investments during the period totalled Euro 27 million and 
      include the acquisition of the Serra Pelata (Euro 14 million) and Piano 
      di Corda (Euro 8 million) wind farms.
    
    
      BUSINESS IN LATIN AMERICA
    
    
      Net income of Euro 96 million
    
    
      In Latin America net income rose 2.1% on a like-for-like basis from the 
      first quarter of 2006 to Euro 96 million euros.
    
    
      Highlights
    
    
      Growth in volume sales in generation and distribution
    
    
      An improved economic environment in countries where ENDESA has 
      subsidiaries led to sharp increases in electricity demand in 1Q07 (all 
      above 3.6%). Particularly noteworthy were the increases in demand in 
      Peru (9.7%), Chile (7.3%) and Colombia (5.2%).
    
    
      Higher demand underpinned total electricity sales by distribution 
      subsidiaries of 15,268 GWh. up 6.3% vs. 1Q06, with particularly 
      significant increases in Argentina (+8.8%) and Colombia (+8.1%).
    
    
      Production rose 7.2% vs. 1Q06 to 15,711 GWh. The largest increases were 
      in Peru (+28.3%) following the coming on stream of the Ventanilla CCGT, 
      and in Chile (+18.8%) due to higher hydro output.
    
    
      
        
          OUTPUT AND SALES IN THE LATIN AMERICAN BUSINESS
        
      
      
        
           
        
        
           
        
        
          Output (GWh)
        
        
           
        
        
          Sales (GWh)
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          % Chg vs. 1Q06
        
        
           
        
        
          1Q07
        
        
           
        
        
          % Chg vs. 1Q06
        
      
      
        
          Chile
        
        
           
        
        
          5,192 
        
        
           
        
        
          18.8 
        
        
           
        
        
          3,157 
        
        
           
        
        
          5.1 
        
      
      
        
          Argentina
        
        
           
        
        
          4,674 
        
        
           
        
        
          2.1 
        
        
           
        
        
          3,985 
        
        
           
        
        
          8.8 
        
      
      
        
          Peru
        
        
           
        
        
          2,118 
        
        
           
        
        
          28.3 
        
        
           
        
        
          1,292 
        
        
           
        
        
          6.9 
        
      
      
        
          Colombia
        
        
           
        
        
          2,745 
        
        
           
        
        
          (7.8)
        
        
           
        
        
          2,750 
        
        
           
        
        
          8.1 
        
      
      
        
          Brazil
        
        
           
        
        
          982 
        
        
           
        
        
          (9.1)
        
        
           
        
        
          4,084 
        
        
           
        
        
          3.7 
        
      
      
        
          TOTAL
        
        
           
        
        
          15,711 
        
        
           
        
        
          7.2 
        
        
           
        
        
          15,268 
        
        
           
        
        
          6.3 
        
      
    
    
      Improvement in generation and distribution margins
    
    
      Growth in demand, tighter reserve margins and favourable generation mix 
      at ENDESA’s Latin American subsidiaries 
      caused the unit margin of generation companies to increase by 14.9% in 
      1Q07 vs. 1Q06 to USD 29.7 per MWh produced.
    
    
      Generation margins, measured in dollars, increased sharply, above all in 
      Chile (+20.4%) thanks to the increase in the wholesale price and a 
      greater contribution by hydro in the generation mix; and in Argentina 
      (+17.7%), due to favourable weather conditions and higher prices thanks 
      to the pass-through of higher fuel costs to the wholesale electricity 
      market (MEM). In Peru, production mix, with a larger thermal component, 
      and lower prices to the final customer caused a 14.7% reduction in the 
      average margin vs. 1Q06.
    
    
      In distribution, key operating figures were considerably boosted by 
      higher electricity sales and operating efficiency improvements at the 
      companies. The unit margin stood at USD 39.2/MWh distributed, an 
      increase of 12.6% vs. 1Q06.
    
    
      Reduction in distribution losses
    
    
      Energy distribution losses were 11.1% in 1Q07, an improvement of 0.2 
      percentage points vs. the same period in 2006. Worth highlighting is the 
      0.5 percentage point improvement in Brazil thanks to innovated solutions 
      against fraud.
    
    
      New capacity development
    
    
      In 1Q07 ENDESA Chile continued with construction of the San Isidro II 
      (Chile) CCGT plant, which will have an installed capacity of 377 MW. In 
      2Q07, and within the established time frame, the open cycle of this 
      plant came on stream with an output of 246 MW. This is 26 MW greater 
      than the projected output thanks to technical improvements achieved 
      whilst the project was under development.
    
    
      The company also continued work on construction of the 32 MW Palmucho 
      hydro plant in Chile.
    
    
      Work also continued on the Aysen project, which starts in 2008. This 
      project entails construction of four hydro plants with approximate total 
      installed capacity of 2,400 MW, the last of which is currently estimated 
      to come on stream towards the end of 2018, ENDESA Chile holds a 51% 
      stake in this project, with Colbun controlling the other 49%.
    
    
      Work also continued on the construction of the liquefied natural gas 
      plant (LNG) located in Quintero (Chile), in which ENDESA Chile will hold 
      a 20% stake. Its partners in the project are British Gas, Metrogas and 
      ENAP.
    
    
      Meanwhile, ENDESA Eco continued work on projects started in Chile in 
      1Q06: the Canela wind farm, the first stage of which will have an output 
      of 9 MW (of a total projected output of 18 MW), and the 9 MW Ojos de 
      Agua mini hydro station.
    
    
      Regulatory update
    
    
      In Argentina, Edesur began applying the first distribution tariff 
      increase since the economic crisis of 2001 following the publication of 
      the corresponding resolution by the electricity sector regulator (ENRE).
    
    
      The application of this increase, which is retroactive to November 2005, 
      will enable Edesur to regain sufficient levels of profitability and to 
      make the necessary investments to meet increasing demand in its market 
      while simultaneously enhancing service quality.
    
    
      In Brazil, the tariff readjustment approved by the electricity regulator 
      ANEEL for Ampla came into effect on 15 March. This readjustment will be 
      in force for one year and increases the VAD by 9.6%.
    
    
      In 2Q07 the node price report for the April-October half year was 
      published in Chile. The price increased by 6% vs. the previous half year 
      to USD73.3/MWh.
    
    
      EBITDA: +12.8%
    
    
      EBITDA in the Latin American business totalled Euro 663 million in 1Q07, 
      a 12.8% increase on 1Q06.
    
    
      EBIT rose 16.1% to Euro 535 million.
    
    
      
        
          
            EBITDA & EBIT IN LATIN AMERICA
          
        
      
      
        
          Euro million
        
        
           
        
        
          EBITDA
        
        
           
        
        
          EBIT
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Generation and transmission
        
        
           
        
        
          335 
        
        
           
        
        
          322 
        
        
           
        
        
          4.0 
        
        
           
        
        
          262 
        
        
           
        
        
          251 
        
        
           
        
        
          4.4 
        
      
      
        
          Distribution
        
        
           
        
        
          349 
        
        
           
        
        
          277 
        
        
           
        
        
          26.0 
        
        
           
        
        
          295 
        
        
           
        
        
          222 
        
        
           
        
        
          32.9 
        
      
      
        
          Other
        
        
           
        
        
          (21)
        
        
           
        
        
          (11)
        
        
           
        
        
          NA
        
        
           
        
        
          (22)
        
        
           
        
        
          (12)
        
        
           
        
        
          NA
        
      
      
        
          TOTAL
        
        
           
        
        
          663 
        
        
           
        
        
          588 
        
        
           
        
        
          12.8 
        
        
           
        
        
          535 
        
        
           
        
        
          461 
        
        
           
        
        
          16.1 
        
      
    
    
      Measured in local currencies, EBITDA rose 21.8% and EBIT climbed 25.6%, 
      both vs. 1Q06.
    
    
      The table below shows the breakdown of EBITDA and EBIT of ENDESA’s 
      fully consolidated subsidiaries by business line and country:
    
    
      
        
          BREAKDOWN OF EBITDA AND EBIT IN LATAM BY BUSINESS LINE AND COUNTRY
        
      
      
        
          Generation and transmission
        
      
      
        
          Euro million
        
        
           
        
        
          EBITDA
        
        
           
        
        
          EBIT
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Chile
        
        
           
        
        
          169 
        
        
           
        
        
          133 
        
        
           
        
        
          27.1 
        
        
           
        
        
          139 
        
        
           
        
        
          104 
        
        
           
        
        
          33.7 
        
      
      
        
          Colombia
        
        
           
        
        
          48 
        
        
           
        
        
          63 
        
        
           
        
        
          (23.8)
        
        
           
        
        
          37 
        
        
           
        
        
          51 
        
        
           
        
        
          (27.5)
        
      
      
        
          Brazil - Generation
        
        
           
        
        
          38 
        
        
           
        
        
          34 
        
        
           
        
        
          11.8 
        
        
           
        
        
          33 
        
        
           
        
        
          29 
        
        
           
        
        
          13.8 
        
      
      
        
          Peru
        
        
           
        
        
          42 
        
        
           
        
        
          45 
        
        
           
        
        
          (6.7)
        
        
           
        
        
          30 
        
        
           
        
        
          34 
        
        
           
        
        
          (11.8)
        
      
      
        
          Argentina - Generation
        
        
           
        
        
          38 
        
        
           
        
        
          34 
        
        
           
        
        
          11.8 
        
        
           
        
        
          27 
        
        
           
        
        
          25 
        
        
           
        
        
          8.0 
        
      
      
        
          TOTAL GENERATION
        
        
           
        
        
          335 
        
        
           
        
        
          309 
        
        
           
        
        
          8.4 
        
        
           
        
        
          266 
        
        
           
        
        
          243 
        
        
           
        
        
          9.5 
        
      
      
        
          Interconnection Brazil-Argentina
        
        
           
        
        
          - 
        
        
           
        
        
          13 
        
        
           
        
        
          NA
        
        
           
        
        
          (4)
        
        
           
        
        
          8 
        
        
           
        
        
          NA
        
      
      
        
          TOTAL GENERATION AND TRANSMISSION
        
        
           
        
        
          335 
        
        
           
        
        
          322 
        
        
           
        
        
          4.0 
        
        
           
        
        
          262 
        
        
           
        
        
          251 
        
        
           
        
        
          4.4 
        
      
      
        
          
             
          
        
      
      
        
          
            Distribution
          
        
      
      
        
          Euro million
        
        
           
        
        
          EBITDA
        
        
           
        
        
          EBIT
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Chile
        
        
           
        
        
          51 
        
        
           
        
        
          50 
        
        
           
        
        
          2.0 
        
        
           
        
        
          45 
        
        
           
        
        
          43 
        
        
           
        
        
          4.7 
        
      
      
        
          Colombia
        
        
           
        
        
          58 
        
        
           
        
        
          63 
        
        
           
        
        
          (7.9)
        
        
           
        
        
          41 
        
        
           
        
        
          48 
        
        
           
        
        
          (14.6)
        
      
      
        
          Brazil
        
        
           
        
        
          154 
        
        
           
        
        
          117 
        
        
           
        
        
          31.6 
        
        
           
        
        
          137 
        
        
           
        
        
          99 
        
        
           
        
        
          38.4 
        
      
      
        
          Peru
        
        
           
        
        
          25 
        
        
           
        
        
          22 
        
        
           
        
        
          13.6 
        
        
           
        
        
          17 
        
        
           
        
        
          14 
        
        
           
        
        
          21.4 
        
      
      
        
          Argentina
        
        
           
        
        
          61 
        
        
           
        
        
          25 
        
        
           
        
        
          144.0 
        
        
           
        
        
          55 
        
        
           
        
        
          18 
        
        
           
        
        
          205.6 
        
      
      
        
          TOTAL DISTRIBUTION
        
        
           
        
        
          349 
        
        
           
        
        
          277 
        
        
           
        
        
          26.0 
        
        
           
        
        
          295 
        
        
           
        
        
          222 
        
        
           
        
        
          32.9 
        
      
    
    
      Generation and transmission
    
    
      Chile
    
    
      Energy generated in 1Q07 rose 18.8% vs. the same period in 2006 to 5,192 
      GWh. This increase was due to higher rainfall that much-improved the 
      generation mix. Hydro production increased to 78.8% of total generation, 
      protecting the division’s results against the 
      rise in fuel prices (+120.8%).
    
    
      The increase in generation, primarily hydro, and higher wholesale prices 
      generated a 27.1% increase in EBITDA and a 33.7% increase in EBIT to 
      Euro 169 million and Euro 139 million respectively vs. 1Q06.
    
    
      Colombia
    
    
      Both, generation EBITDA and EBIT in Colombia, were affected by the 
      one-off impact of the tax on companies’ 
      assets at 31 December 2006, which totalled Euro 18 million. Stripping 
      out this one-off impact, EBITDA and EBIT would have grown by 4.8% and 
      7.8% respectively.
    
    
      This increase was due firstly to the higher capacity payments reported 
      by Emgesa following the application of the new Reliability Charge and 
      secondly to improved margin from the sale of electricity acquired on the 
      market to partially offset the reduction in generation. Both effects 
      offset the 7.8% decline in generation, caused primarily by the impact of 
      the meteorological phenomenon “El Niño” 
      on the output of the Betania power station.
    
    
      Brazil - Generation
    
    
      ENDESA’s subsidiaries in Brazil generated 
      total output of 982 GWh in 1Q07, 9.1% down on the same period in 2006, 
      mostly as a result of the gas supply problems which affected its 
      Fortaleza plant.
    
    
      Lower thermal generation was offset with larger purchases on the spot 
      market at lower prices to meet contractual electricity supply 
      obligations and with the business’s improved 
      generation mix resulting from the increase in its hydro output. 
      Consequently, EBITDA rose 11.8% to Euro 38 million while EBIT increased 
      by 13.8% to Euro 33 million.
    
    
      Peru
    
    
      ENDESA’s subsidiaries in Peru generated total 
      output in 1Q07 of 2,118 GWh. 28.3% more than in 1Q06.
    
    
      This growth was due to the Company’s higher 
      thermal and hydro output resulting from the incorporation of the gas 
      units of the 166 MW Ventanilla CCGT and the increased availability of 
      the Piura power station, which was off stream for two and a half months 
      last year.
    
    
      However, the increase in output failed to fully offset the fall in sale 
      prices; as a result revenues fell 5.3%. This fall, together with the 
      impact on the costs of increased thermal production, caused EBITDA to 
      fall 6.7% to Euro 42 million and EBIT by 11.8% to Euro 30 million.
    
    
      Argentina
    
    
      Gas supply problems continued to push up fuel costs (by 34.2%), as 
      generators were forced to generate electricity using fuel-oil. However, 
      increased sales (+19.1%) from higher prices and, to a lesser extent, 
      increased production had a positive impact on margins.
    
    
      EBITDA was Euro 38 million, up 11.8% on 1Q06, while EBIT stood at Euro 
      27 million, an 8% increase.
    
    
      Interconnection between Argentina and Brazil
    
    
      This interconnection’s EBITDA was the 
      equivalent of zero in 1Q07, i.e. Euro 13 million less than in 1Q06, 
      while EBIT was a negative Euro 4 million, Euro 12 million less than in 
      1Q06. This poor performance was due to the fact that the line is not 
      being used because of the difficulties exporting electricity from 
      Argentina to Brazil as a consequence of the gas supply problems.
    
    
      Cien, the line operator, is looking at the possibility of changing its 
      business model for the operation of the interconnection so that it 
      becomes reasonably profitable again.
    
    
      Distribution
    
    
      Chile
    
    
      Revenues rose 5.5% thanks to higher volume sales (5.1%) and the better 
      unit price deriving from changes in the tariff indexation.
    
    
      This top-line growth underpinned a 2% rise in EBITDA to Euro 51 million 
      and a 4.7% increase in EBIT to Euro 45 million.
    
    
      Colombia
    
    
      Both EBITDA and EBIT at the Colombian distribution business were 
      affected by the one-off impact of the above-mentioned tax on companies’ 
      assets at 31 December 2006, which totalled Euro 11 million. Stripping 
      out this impact, EBITDA and EBIT rose 9.5% and 8.3% respectively, 
      primarily as a result of revenues from accessory activities and higher 
      physical sales.
    
    
      Brazil
    
    
      Sales in the Brazilian distribution business stood at Euro 439 million 
      in 1Q07, a 4.3% increase over 1Q06. This increase primarily reflects the 
      higher volumes of energy sold (+3.7%) and the application of lower 
      surcharges on the tariff in relation to the same period in 2006.
    
    
      The increase in sales, coupled with a significant decline in energy 
      losses, led to respective increases in EBITDA and EBIT of 31.6% and 
      38.4% to Euro 154 million and Euro 137 million vs. 1Q06.
    
    
      Peru
    
    
      EBITDA from distribution in Peru came to Euro 25 million in 1Q07, a 
      13.6% increase on 1Q06, due to the 6.9% increase in energy sold. EBIT 
      rose +21.4% to Euro 17 million.
    
    
      Argentina
    
    
      Sales at the Argentine distribution business increased by 46% as a 
      result of booking Euro 40 million in 1Q07 from the tariff increase 
      approved retroactively to November 2005. This was applied following the 
      publication of the corresponding resolution by the electricity sector 
      regulator (ENRE).
    
    
      As a result, EBITDA increased by 144% to Euro 61 million and EBIT by 
      205.6% to Euro 55 million.
    
    
      Financial results: Euro 139 million
    
    
      Financial results for the business in Latin America reflected a loss of 
      Euro 139 million in the first quarter of 2007, Euro 15 million more than 
      in 1Q06.
    
    
      Net exchange-rate gains were Euro 11 million lower, down from Euro 16 
      million in 1Q06 to Euro 5 million in the first quarter of this year.
    
    
      Net financial expenses totalled Euro 144 million in 1Q07, Euro 4 million 
      or 2.9% higher than in 1Q06.
    
    
      Net debt at Latin American business stood at Euro 5,695 million at 31 
      March 2007 an increase of Euro 77 million since the start of the year.
    
    
      Cash flow from operating activities: +15.2%
    
    
      Cash flow generated by the group’s business 
      in Latin America totalled Euro 418 million in the first quarter of 2007, 
      an increase of 15.2% with respect to the same period in 2006.
    
    
      Cash returns: USD 118 million
    
    
      Cash returns from ENDESA’s Latin American 
      business to the parent company in 1Q07 totalled Euro 118 million.
    
    
      The amount achieved in 1Q07, added to the USD 561 million of returns in 
      2005 and 2006. means the company has achieved 42.4% of its current 
      strategic target of USD1.600 million.
    
    
      Investments: Euro 281 million
    
    
      Investment in Latin America in 1Q07 totalled Euro 281 million, of which 
      Euro 150 million corresponded to capex.
    
    
      The financial investments in the period include acquisitions by Endesa 
      Chile in February and March of third-party stakes in Costanera (5.5%), 
      Hidroinvest (25%) and Hidroeléctrica El Chocón 
      (2.48%).
    
    
      By business line, tangible investments (capex) break down as follows:
    
    
      
        
          CAPITAL EXPENDITURE IN LATIN AMERICA
        
      
      
        
           
        
        
           
        
        
          Euro million
        
        
           
        
        
           
        
      
      
        
           
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Generation
        
        
           
        
        
          55 
        
        
           
        
        
          80 
        
        
           
        
        
          (31.3)
        
      
      
        
          Distribution and Transmission
        
        
           
        
        
          79 
        
        
           
        
        
          104 
        
        
           
        
        
          (24.0)
        
      
      
        
          Other
        
        
           
        
        
          16 
        
        
           
        
        
          9 
        
        
           
        
        
          77.8 
        
      
      
        
          TOTAL
        
        
           
        
        
          150 
        
        
           
        
        
          193 
        
        
           
        
        
          (22.3)
        
      
    
    
      STATISTICAL APPENDIX
    
    
      KEY FIGURES
    
    
      
        
          Electricity Generation Output (GWh)
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Business in Spain and Portugal
        
        
           
        
        
          22,972 
        
        
           
        
        
          23,464 
        
        
           
        
        
          (2.1)
        
      
      
        
          Business in Europe
        
        
           
        
        
          8,612 
        
        
           
        
        
          11,943 
        
        
           
        
        
          (27.9)
        
      
      
        
          Business in Latin America
        
        
           
        
        
          15,711 
        
        
           
        
        
          14,656 
        
        
           
        
        
          7.2 
        
      
      
        
          TOTAL
        
        
           
        
        
          47,295 
        
        
           
        
        
          50,063 
        
        
           
        
        
          (5.5)
        
      
    
    
      
        
          
            Electricity Generation Output in
          
          
            Spain & Portugal (GWh)
          
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Mainland
        
        
           
        
        
          19,457 
        
        
           
        
        
          20,008 
        
        
           
        
        
          (2.8)
        
      
      
        
          Nuclear
        
        
           
        
        
          6,640 
        
        
           
        
        
          6,450 
        
        
           
        
        
          2.9 
        
      
      
        
          Coal
        
        
           
        
        
          8,247 
        
        
           
        
        
          8,717 
        
        
           
        
        
          (5.4)
        
      
      
        
          Hydro
        
        
           
        
        
          1,910 
        
        
           
        
        
          1,793 
        
        
           
        
        
          6.5 
        
      
      
        
          Combined cycle - CCGT
        
        
           
        
        
          1,739 
        
        
           
        
        
          2,030 
        
        
           
        
        
          (14.3)
        
      
      
        
          Fuel oil
        
        
           
        
        
          98 
        
        
           
        
        
          403 
        
        
           
        
        
          (75.7)
        
      
      
        
          Renewables/CHP
        
        
           
        
        
          823 
        
        
           
        
        
          615 
        
        
           
        
        
          33.8 
        
      
      
        
          Non-mainland
        
        
           
        
        
          3,515 
        
        
           
        
        
          3,456 
        
        
           
        
        
          1.7 
        
      
      
        
          TOTAL
        
        
           
        
        
          22,972 
        
        
           
        
        
          23,464 
        
        
           
        
        
          (2.1)
        
      
    
    
      
        
          Electricity Generation Output in Europe (GWh)
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Coal
        
        
           
        
        
          3,814 
        
        
           
        
        
          5,943 
        
        
           
        
        
          (35.8)
        
      
      
        
          Hydro
        
        
           
        
        
          422 
        
        
           
        
        
          839 
        
        
           
        
        
          (49.7)
        
      
      
        
          Combined cycle - CCGT
        
        
           
        
        
          3,461 
        
        
           
        
        
          3,292 
        
        
           
        
        
          5.1 
        
      
      
        
          Fuel oil
        
        
           
        
        
          871 
        
        
           
        
        
          1,860 
        
        
           
        
        
          (53.2)
        
      
      
        
          Wind
        
        
           
        
        
          44 
        
        
           
        
        
          9 
        
        
           
        
        
          388.9 
        
      
      
        
          TOTAL
        
        
           
        
        
          8,612 
        
        
           
        
        
          11,943 
        
        
           
        
        
          (27.9)
        
      
    
    
      
        
          Electricity Generation Output in Latin America (GWh)
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Chile
        
        
           
        
        
          5,192 
        
        
           
        
        
          4,369 
        
        
           
        
        
          18.8 
        
      
      
        
          Argentina
        
        
           
        
        
          4,674 
        
        
           
        
        
          4,580 
        
        
           
        
        
          2.1 
        
      
      
        
          Peru
        
        
           
        
        
          2,118 
        
        
           
        
        
          1,651 
        
        
           
        
        
          28.3 
        
      
      
        
          Colombia
        
        
           
        
        
          2,745 
        
        
           
        
        
          2,976 
        
        
           
        
        
          (7.8)
        
      
      
        
          Brazil
        
        
           
        
        
          982 
        
        
           
        
        
          1,080 
        
        
           
        
        
          (9.1)
        
      
      
        
          TOTAL
        
        
           
        
        
          15,711 
        
        
           
        
        
          14,656 
        
        
           
        
        
          7.2 
        
      
    
    
      
        
          Electricity sales (GWh)
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Business in Spain and Portugal
        
        
           
        
        
          28,419 
        
        
           
        
        
          27,108 
        
        
           
        
        
          4.8 
        
      
      
        
          Regulated market
        
        
           
        
        
          18,785 
        
        
           
        
        
          17,502 
        
        
           
        
        
          7.3 
        
      
      
        
          Deregulated market
        
        
           
        
        
          9,634 
        
        
           
        
        
          9,606 
        
        
           
        
        
          0.3 
        
      
      
        
          Business in Europe
        
        
           
        
        
          13,154 
        
        
           
        
        
          15,238 
        
        
           
        
        
          (13.7)
        
      
      
        
          Italy
        
        
           
        
        
          8,501 
        
        
           
        
        
          9,206 
        
        
           
        
        
          (7.7)
        
      
      
        
          France
        
        
           
        
        
          4,086 
        
        
           
        
        
          5,301 
        
        
           
        
        
          (22.9)
        
      
      
        
          Poland
        
        
           
        
        
          567 
        
        
           
        
        
          731 
        
        
           
        
        
          (22.4)
        
      
      
        
          Business in Latin America
        
        
           
        
        
          15,268 
        
        
           
        
        
          14,363 
        
        
           
        
        
          6.3 
        
      
      
        
          Chile
        
        
           
        
        
          3,157 
        
        
           
        
        
          3,005 
        
        
           
        
        
          5.1 
        
      
      
        
          Argentina
        
        
           
        
        
          3,985 
        
        
           
        
        
          3,664 
        
        
           
        
        
          8.8 
        
      
      
        
          Peru
        
        
           
        
        
          1,292 
        
        
           
        
        
          1,209 
        
        
           
        
        
          6.9 
        
      
      
        
          Colombia
        
        
           
        
        
          2,750 
        
        
           
        
        
          2,545 
        
        
           
        
        
          8.1 
        
      
      
        
          Brazil
        
        
           
        
        
          4,084 
        
        
           
        
        
          3,940 
        
        
           
        
        
          3.7 
        
      
      
        
          TOTAL
        
        
           
        
        
          56,841 
        
        
           
        
        
          56,709 
        
        
           
        
        
          0.2 
        
      
      
        
          Gas sales (GWh)
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Regulated market
        
        
           
        
        
          1,114 
        
        
           
        
        
          1,115 
        
        
           
        
        
          - 
        
      
      
        
          Deregulated market
        
        
           
        
        
          7,645 
        
        
           
        
        
          5,624 
        
        
           
        
        
          35.9 
        
      
      
        
          TOTAL
        
        
           
        
        
          8,759 
        
        
           
        
        
          6,739 
        
        
           
        
        
          30.0 
        
      
    
    
      
        
          Workforce
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          31-03-06 
        
        
           
        
        
          % Chg
        
      
      
        
          Business in Spain and Portugal
        
        
           
        
        
          12,706 
        
        
           
        
        
          12,711 
        
        
           
        
        
          - 
        
      
      
        
          Business in Europe
        
        
           
        
        
          2,132 
        
        
           
        
        
          2,112 
        
        
           
        
        
          0.9 
        
      
      
        
          Business in Latin America
        
        
           
        
        
          12,050 
        
        
           
        
        
          12,316 
        
        
           
        
        
          (2.2)
        
      
      
        
          TOTAL
        
        
           
        
        
          26,888 
        
        
           
        
        
          27,139 
        
        
           
        
        
          (0.9)
        
      
    
    
      FINANCIAL DATA
    
    
      
        
          Key figures
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          EPS (Euro)
        
        
           
        
        
          0.60 
        
        
           
        
        
          0.99 
        
        
           
        
        
          (39.8)
        
      
      
        
          CFPS (Euro)
        
        
           
        
        
          1.24 
        
        
           
        
        
          1.23 
        
        
           
        
        
          1.0 
        
      
      
        
          BVPS (Euro)
        
        
           
        
        
          11.17 
        
        
           
        
        
          9.67 
        
        
           
        
        
          15.5 
        
      
    
    
      
        
          Net financial debt (Euro million)
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          31-12-06 
        
        
           
        
        
          % Chg
        
      
      
        
          Business in Spain and Portugal
        
        
           
        
        
          13,252 
        
        
           
        
        
          12,548 
        
        
           
        
        
          5.6 
        
      
      
        
          Business in Europe
        
        
           
        
        
          1,609 
        
        
           
        
        
          1,674 
        
        
           
        
        
          (3.9)
        
      
      
        
          Endesa Italia
        
        
           
        
        
          806 
        
        
           
        
        
          748 
        
        
           
        
        
          7.8 
        
      
      
        
          Other
        
        
           
        
        
          803 
        
        
           
        
        
          926 
        
        
           
        
        
          (13.3)
        
      
      
        
          Business in Latin America
        
        
           
        
        
          5,695 
        
        
           
        
        
          5,618 
        
        
           
        
        
          1.4 
        
      
      
        
          Enersis
        
        
           
        
        
          4,864 
        
        
           
        
        
          4,749 
        
        
           
        
        
          2.4 
        
      
      
        
          Other
        
        
           
        
        
          831 
        
        
           
        
        
          869 
        
        
           
        
        
          (4.4)
        
      
      
        
          TOTAL
        
        
           
        
        
          20,556 
        
        
           
        
        
          19,840 
        
        
           
        
        
          3.6 
        
      
      
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
      
      
        
          Financial leverage (%)
        
        
           
        
        
          124.3 
        
        
           
        
        
          124.5 
        
        
           
        
        
          - 
        
      
      
        
          Net debt/Operating cash flow (times)
        
        
           
        
        
          2.6 
        
        
           
        
        
          2.8 
        
        
           
        
        
          - 
        
      
      
        
          Interest coverage by operating cash flow (times)
        
        
           
        
        
          7.8 
        
        
           
        
        
          7.4 
        
        
           
        
        
          - 
        
      
    
    
      
        
          Ratings (04.05.07)
        
        
           
        
        
          Long term
        
        
           
        
        
          Short term
        
        
           
        
        
          Outlook
        
      
      
        
          Standard & Poor’s
        
        
           
        
        
          A
        
        
           
        
        
          A-1
        
        
           
        
        
          Creditwatch (-)
        
      
      
        
          Moody’s
        
        
           
        
        
          A3
        
        
           
        
        
          P-2 
        
        
           
        
        
          Creditwatch (-)
        
      
    
    
      
        
          Main fixed-income issues
        
        
           
        
        
          Spread over IRS (bp)
        
      
      
        
           
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          
            31-12-06 
          
        
      
      
        
          2.2Y Euro 700M 4.375% Mat. June 2009
        
        
           
        
        
          (3)
        
        
           
        
        
          6 
        
      
      
        
          5.2 Y GBP 400M 6.125% Mat. June 2012
        
        
           
        
        
          19 
        
        
           
        
        
          25 
        
      
      
        
          5.9 Y Euro 700M 5.375% Mat. Feb 2013
        
        
           
        
        
          19 
        
        
           
        
        
          24 
        
      
    
    
      
        
          
            Stock market data
          
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          31-12-06 
        
        
           
        
        
          % Chg
        
      
      
        
          Market cap (Euro million)
        
        
           
        
        
          42,858 
        
        
           
        
        
          37,935 
        
        
           
        
        
          13.0 
        
      
      
        
          Number of shares outstanding
        
        
           
        
        
          1,058,752,117 
        
        
           
        
        
          1,058,752,117 
        
        
           
        
        
          -- 
        
      
      
        
          Nominal share value (Euro)
        
        
           
        
        
          1.2 
        
        
           
        
        
          1.2 
        
        
           
        
        
          -- 
        
      
    
    
      
        
          Stock market data
        
        
           
        
        
          1Q07
        
        
           
        
        
          1Q06
        
        
           
        
        
          % Chg
        
      
      
        
          Trading volumes (shares)
        
        
           
        
        
           
        
      
      
        
          Madrid stock exchange
        
        
           
        
        
          1,275,964,794 
        
        
           
        
        
          733,242,188 
        
        
           
        
        
          74.0 
        
      
      
        
          NYSE
        
        
           
        
        
          11,206,666 
        
        
           
        
        
          7,896,100 
        
        
           
        
        
          41.9 
        
      
      
        
          Average daily trading volume (shares)
        
        
           
        
        
           
        
      
      
        
          Madrid stock exchange
        
        
           
        
        
          20,253,409 
        
        
           
        
        
          11,456,909 
        
        
           
        
        
          76.8 
        
      
      
        
          NYSE
        
        
           
        
        
          186,778 
        
        
           
        
        
          127,357 
        
        
           
        
        
          46.7 
        
      
    
    
      
        
          Share price
        
        
           
        
        
          1Q07 high
        
        
           
        
        
          1Q07 low
        
        
           
        
        
          31-03-07 
        
        
           
        
        
          31-12-06 
        
      
      
        
          Madrid stock exchange (Euro)
        
        
           
        
        
          40.55 
        
        
           
        
        
          35.21 
        
        
           
        
        
          40.48 
        
        
           
        
        
          35.83 
        
      
      
        
          NYSE (USD)
        
        
           
        
        
          53.86 
        
        
           
        
        
          45.75 
        
        
           
        
        
          53.53 
        
        
           
        
        
          46.52 
        
      
    
    
      
        
          Dividends (Euro cents/share)
        
        
          Payable against 2006 results
        
      
      
        
          Interim dividend (02/01/07)
        
        
          50.00 
        
      
      
        
          Special dividend (*)
        
        
          114.00 
        
      
      
        
          Total DPS
        
        
          164.00 
        
      
      
        
          Pay-out (%)
        
        
          58.48 
        
      
      
        
          Dividend yield (%)
        
        
          4.58 
        
      
      
        
        
        
           
        
      
      
        
          
            (*) Pending approval at the General Shareholders' Meeting.
          
        
      
    
    
      IMPORTANT LEGAL DISCLAIMER
    
    
      This document was made available to shareholders of Endesa, S.A.. In 
      relation with the announced joint offer by ENEL SpA and Acciona, S.A., 
      Endesa shareholders are urged to read the report of Endesa’s 
      board of directors when it is filed by the Company with the Comisión 
      Nacional del Mercado de Valores (the "CNMV"), as well as Endesa's 
      Solicitation/Recommendation Statement on Schedule 14D-9 when it is filed 
      by the Company with the U.S. Securities and Exchange Commission (the 
      "SEC"), as it will contain important information. Such documents and 
      other public filings made from time to time by Endesa with the CNMV or 
      the SEC are available without charge from the Endesa’s 
      website at www.endesa.es, from the 
      CNMV’s website at www.cnmv.es 
      and from the SEC’s website at www.sec.gov 
      and at Endesa’s principal executive offices 
      in Madrid, Spain.
    
    
      This presentation contains certain “forward-looking” 
      statements regarding anticipated financial and operating results and 
      statistics and other future events. These statements are not guarantees 
      of future performance and they are subject to material risks, 
      uncertainties, changes and other factors that 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; estimated asset disposals; estimated 
      increases in capacity and output and changes in capacity mix; repowering 
      of capacity and macroeconomic conditions. For example, the EBITDA (gross 
      operating profit as per ENDESA’s consolidated 
      income statement) target for 2007-2009 included in this presentation are 
      forward-looking statements and are based on certain assumptions which 
      may or may not prove correct. The main assumptions on which these 
      expectations and targets are based are related to the regulatory 
      setting, exchange rates, divestments, increases in production and 
      installed capacity in markets where ENDESA operates, increases in demand 
      in these markets, assigning of production amongst different 
      technologies, increases in costs associated with higher activity that do 
      not exceed certain limits, electricity prices not below certain levels, 
      the cost of CCGT plants, and the availability and cost of the gas, coal, 
      fuel oil and emission rights necessary to run our business at the 
      desired levels.
    
    
      In these statements we avail ourselves of the protection provided by the 
      Private Securities Litigation Reform Act of 1995 of the United States of 
      America with respect to forward-looking statements.
    
    
      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: significant adverse changes in the 
      conditions of the industry, the general economy or our markets; the 
      effect of the prevailing regulations or changes in them; tariff 
      reductions; the impact of interest rate fluctuations; the impact of 
      exchange rate fluctuations; natural disasters; the impact of more 
      restrictive environmental regulations and the environmental risks 
      inherent to our activity; 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. Delays in or 
      impossibility of obtaining the pertinent permits and rezoning orders in 
      relation to real estate assets. Delays in or impossibility of obtaining 
      regulatory authorisation, including that related to the environment, for 
      the construction of new facilities, repowering or improvement of 
      existing facilities; shortage of or changes in the price of equipment, 
      material or labour; opposition of political or ethnic groups; adverse 
      changes of a political or regulatory nature in the countries where we or 
      our companies operate; adverse weather conditions, natural disasters, 
      accidents or other unforeseen events, and the impossibility of obtaining 
      financing at what we consider satisfactory interest rates.
    
    
      Political/governmental factors: political conditions in Latin America; 
      changes in Spanish, European and foreign laws, regulations and taxes.
    
    
      Operating factors: technical problems; changes in operating conditions 
      and costs; capacity to execute cost-reduction plans; capacity to 
      maintain a stable supply of coal, fuel and gas and the impact of the 
      price fluctuations of coal, fuel and gas; acquisitions or restructuring; 
      capacity to successfully execute a strategy of internationalisation and 
      diversification.
    
    
      Competitive factors: the actions of competitors; changes in competition 
      and pricing environments; the entry of new competitors in our markets.
    
    
      Further details on the factors that may cause actual results and other 
      developments to differ significantly from the expectations implied or 
      explicitly contained in the presentation are given in the Risk Factors 
      section of Form 20-F filed with the SEC and in the ENDESA Share 
      Registration Statement filed with the Comisión 
      Nacional del Mercado de Valores (the Spanish securities regulator or the “CNMV” 
      for its initials in Spanish).No assurance can be given that the 
      forward-looking statements in this document will be realised. Except as 
      may be required by applicable law, neither Endesa nor any of its 
      affiliates intends to update these forward-looking statements.