Company Presentation August 2009 Who is Endesa Chile? Multinational - - PDF document

Company Presentation

August 2009

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Who is Endesa Chile?

Multinational private electricity generator, based in Chile, with leading market positions in most countries where it operates Large portfolio of generation assets distributed within South America Efficient investment portfolio adds value to Endesa Chile Excellent reputation and high level of technical standards Vast experience, with 65 years of history Committed with regulatory authorities, the environment and Corporate Governance best practices Part of an important worldwide electricity group (Enel, ENDESA, S.A., Enersis)

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Endesa Chile’s Main Pillars

Asset Base Conservative Policies

Know How

What supports our business? » Large and efficient portfolio of assets » Excellence in operations » High environmental standards » Commercial policy » Solid Balance Sheet » Strong Liquidity Position » Ability to develop projects » Vast experience » Demand and Regulation

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Important Presence in 5 countries

I nstalled Cap.: 5 ,2 8 4 MW Endesa Chile: 2,786 MW San Isidro I&II: 732 MW Pehuenche: 699 MW Pangue: 467 MW GasAtacama: 391 MW (50% 781 MW) Celta: 182 MW Endesa Eco: 27 MW Hydro Cap.: 6 5 % 3 9 % m arket share 2 7 pow er plants

Chile

I nstalled Cap.: 2 ,8 9 5 MW Hydro Cap.: 8 5 % 2 1 % m arket share 1 1 pow er plants

Em gesa Edegel

Cachoeira ( Gx) : 6 6 5 MW Fortaleza ( Gx) : 3 2 2 MW Am pla ( Dx) : 2 .5 m ill. clients Coelce ( Dx) : 2 .9 m ill. clients Cien ( Tx) : 2 ,1 0 0 MW

Endesa Brasil ( Affiliate) Argentina

I nstalled Cap.: 3 ,6 5 2 MW Costanera: 2,324 MW El Chocón: 1,328 MW Hydro Cap.: 3 6 % 1 4 % m arket share 5 pow er plants

Total Consolidated: 1 3 ,2 9 8 MW Num ber of pow er plants: 5 2 Hydro: 6 0 .0 % Therm al: 3 9 .8 % W ind: 0 .1 %

I nstalled Cap.: 1 ,4 6 7 MW Hydro Cap.: 5 1 % 2 8 % m arket share 9 pow er plants

As of June 2009

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» ISO 14001 standards: as of June 2009, 99.7% of installed capacity was certified. » OHSAS 18001 standards: as of June 2009, 100% of installed capacity was certified. Important prizes: » “Notable” category was awarded by the United Nations Global Compact to the latest Communication on Progress reported through the Sustainability Report. » “Silver Class” distinction in the corporate sustainability evaluation made by SAM and PricewaterhouseCoopers. » First place in Chile, and sixth place in Latin America in the “Best Corporate Governance Companies” ranking by LatinFinance magazine. » March 2009: Public‐utility company with the Best Corporate Governance, according to IR Global Rankings (MZ Consult, Brazil). » June 2009: For the fourth consecutive year, Endesa Chile is among the outstanding companies in Chile in the Corporate Social Responsibility ranking of Fundación PROhumana and the Production and Commerce Association, ranking tenth this year.

Aw ards and Certifications Awards and Certifications

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Conservative commercial policy

» Hydrology risk » Electricity demand growth » Portfolio of generation assets » Evolution of fuel prices » Exchange rate risk

Minimize margin variation

Chile Argentina Colombia Peru

Regulated Spot Unregulated

Physical sales as of June 2009

55% 14% 31% 84% 16% 50% 36% 14% 45% 7% 48%

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a) 2008 figures: under Chilean accounting rules b) 1H2009: under IFRS (International Financial Reporting Standards) c) Attributable to stockholders of the parent company (Endesa Chile)

1H08 (b) FY 2008 (a) Physical Sales (GWh) 28,850 55,735 1,200 2,492 Revenues Billion Ch$ Operating Income 344 893 Net Income (c)

1H2009 Income : lower costs, better production mix and sales in the spot market

202 443

Summary of consolidated results

Ebitda 1,146 437 30,004 1,261 546 331 645 1H09 (b) %Var. 1H09 vs 1H08 8% 5% 59% 64% 48% Operating Margin

29%

36% 43% ‐ 1H09 US$ million 2,371 1,028 623 43% ‐ 1,213

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EBITDA by Country

EBITDA by Country Generation Business Colombia 23% Argentina 6% Peru 10% Chile 61%

Jun‐08 Jun‐09 Jun‐09 Var.% Ch$ bn Ch$ bn US$ m YoY Chile 227 391 735 72% Argentina 35 35 66 1% Colombia 128 147 276 15% Peru 41 67 126 62% Total 431 640 1,203 48%

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Electricity demand grew 0.3% in 1H09 versus 1H08; ‐1.5% in the SIC and 5.8% in the SING. Positive hydrology conditions. Hydro generation grew by 12% in 1H09 versus 1H08. Better production mix. Lower generation costs due to declining commodity prices and better production mix in 1H09 versus 1H08. Average spot price in 1H09 was US$ 122/MWh in the SIC, down 54% YoY. Solid balance sheet and liquidity: consolidated cash and cash equivalents was US$ 784 million in June 2009.

• Gen. Mix as of June 2009
• Gen. Mix as of June 2009

Hydro Thermal

Chile: largest electricity generator H i g h l i g h t s

58% 42%

1H08 1H09

• Var. %

1H09 Ebitda Ch$ 227 bn Ch$ 391 bn 72% US$ 735 m Ebitda Margin 31% 53% 1H08 1H09

• Var. %

1H09

• Ph. Sales

10,068 GWh 10,515 GWh 4% ‐ 1H08 1H09

• Var. %

Av Price EOC US$ 157/MWh US$ 113/MWh ‐28%

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Argentina: leading privately‐owned electricity generator

Electricity demand decreased by 1.6% in 1H09 versus 1H08. Costanera increased physical sales by 9% in 1H09 versus 1H08, although its average prices decreased in the period due to lower production with liquid fuel. Better water levels in El Chocón, thus increasing the capability to dispatch energy. Foninvemem power plants operating in combined cycle during 2009. Recovery of account receivable accrued (Resolution SE 724/08).

• Gen. Mix as of June 2009
• Gen. Mix as of June 2009

Hydro Thermal

H i g h l i g h t s

23% 77%

1H08 1H09

• Var. %

1H09 Ebitda Ch$ 35 bn Ch$ 35 bn 1% US$ 66 m Ebitda Margin 21% 22% 1H08 1H09

• Var. %

1H09

• Ph. Sales

5,706 GWh 6,803 GWh 19% ‐ 1H08 1H09

• Var. %

1H09 Av Price Arg Subs Ar$ 171/MWh Ar$ 147/MWh ‐14% US$ 40/MWh

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Colombia: leading privately‐owned electricity generator

Stable, transparent and market‐oriented regulatory framework. Electricity demand grew by 0.6% in 1H09 versus 1H08. Better hydrology conditions allowed Emgesa to increase generation by 11%. Generation costs decreased by 10% in the 1H09 versus 1H08 due to lower commodity prices. Higher average sales price in 1H09 compared to 1H08. Average spot price grew 21% in Col$ reaching an equivalent to US$47 /MWh. El Quimbo project, a 400 MW hydroelectric power plant was awarded to Emgesa.

• Gen. Mix as of June 2009
• Gen. Mix as of June 2009

H i g h l i g h t s

Hydro Thermal

5% 95%

1H08 1H09

• Var. %

1H09 Ebitda Ch$ 128 bn Ch$ 147 bn 15% US$ 276 m Ebitda Margin 62% 62% 1H08 1H09

• Var. %

1H09

• Ph. Sales

7,891 GWh 8,391 GWh 6% ‐ 1H08 1H09

• Var. %

1H09 Av Price Emgesa Col$ 93/KWh Col$ 113/KWh 21% US$ 47/MWh

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Peru: largest privately‐owned electricity generator

Electricity demand grew by 0.5% in 1H09 compared to 1H08. Better hydrology conditions during 1H09 versus 1H08. Better production mix. Hydro generation increased by 6% and thermal generation increased by 2%. Average spot price at US$33/MWh in June 2009, down 26% in 1H09 versus 1H08. Expansion of Santa Rosa plant (189 MW) will operate in the 2H09 with natural gas.

• Gen. Mix as of June 2009
• Gen. Mix as of June 2009

H i g h l i g h t s

Hydro Thermal

41% 59%

1H08 1H09

• Var. %

1H09 Ebitda Ch$ 41 bn Ch$ 67 bn 62% US$ 126 m Ebitda Margin 46% 61% 1H08 1H09

• Var. %

1H09

• Ph. Sales

4,194 GWh 4,295 GWh 2% ‐ 1H08 1H09

• Var. %

Av Price Edegel US$ 38/MWh US$ 38/MWh 0%

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875 1,105 1,279 1,540 2,149 346 349 322 971 1,800 355 305 335 313 6.87 2.98 4.90 4.29 3.51 2.63 2.37 1.72 5.90 4.34 2.61 2.81 3.17 3.97 400 800 1,200 1,600 2,000 2,400 2003 2004 2005 2006 2007 2008 2009 MMUS$ 1 2 3 4 5 6 7 8 9 10 Ebitda Gastos Financieros Deuda/Ebitda Ebitda/GF

Solid Financial Ratios

Veces

EBITDA growth 20% over the past 5 years

Times As of June 2009 and in historical dollars

TTM

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Financial Consolidated Debt Evolution Financial Consolidated Debt by Currency

Consolidated figures in US$ million as of June 2009 and in historical dollars

Recognition of strong financial position

Investment grade by rating agencies

» S&P: BBB with Stable outlook » Fitch: BBB with Stable outlook » Moody’s: Baa3 with Stable outlook

55% 18% 27% US$ UF-Ch$ Local Currencies

5,950 4,920 4,702 4,426 4,087 4,124 3,859 3,904 4,076 4,343 4,130

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Jun-09

US$ m

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Figures as of June 2009

Colombia: US$ 922 m Peru: US$ 454 m Argentina US$ 299 m

Financial Debt by Country

Comfortable debt maturity profile

US$ m US$ m US$ m US$ m

Chile: US$ 2.454 m

60% 22% 11% 7% Chile Colombia Peru Argentina

5 360 215 17 415 215 1,228 200 400 600 800 1000 1200 1400 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 B a l a n c e

159 193 151 79 25 315 200 400 600 800 2009 2010 2011 2012 2013 2014 Balance

75 81 81 24 25 14 200 400 600 800 2009 2010 2011 2012 2013 2014 Balance 44 54 77 105 46 43 85 200 400 600 800 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 B a l a n c e

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21.3 13.9 11.4

5 10 15 20 25 2006 2007 2008

Source: Bloomberg

Dividend payout for our shareholders increased 87%

Ch$

50% 60% 40%

+22% +53% Dividend Policy and Payout

Attractive return to Shareholders

Share Price Evolution

40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 7/1/08 8/1/08 9/1/08 10/1/08 11/1/08 12/1/08 1/1/09 2/1/09 3/1/09 4/1/09 5/1/09 6/1/09

EOC IPSA Dow Jones

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Opportunities: Improvement in South America regulations contribute to meet long‐term electricity demand

Long Term Investment Opportunities … room to grow

» Peru: 7.3% » Chile: 5.3% » Argentina: 4.4% » Brazil: 3.1% » Colombia: 3.1%

1998: base 100%

Electricity Demand (CAGR) Electricity Demand (CAGR)

80.0 110.0 140.0 170.0 200.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Jun/09

Peru Chile Argentina Brazil Colombia

Percentage (%)

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Expected Electricity Demand Growth in Chile 2009‐2019 (SIC+SING)*

New Capacity Under Construction (MW) New Capacity Proposed by CNE (MW)

75.0 100.0 125.0 150.0 175.0 200.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SIC SING

Total: 3,926 MW Total: 5,386 MW

* Source: April 2009 Node Price Report of Chilean National Energy Commission (CNE)

To assure the supply of the future electricity demand, Chile needs to install 9,300 MW of new electricity generation capacity during the next 10 years.

Electricity Demand Growth

2009: base 100%

Coal 57% LNG 6% Hydro 8% Wind 4% Others 3% Diesel 22% Coal 29% Hydro 38% Wind 12% LNG 14% Others 7% Diesel 0%

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Investment Opportunities

Our Investment Plan World economic scenario Profile of electricity demand Energy generation uses the maximum renewable resources to promote its development and energy independence Growth and excellence of labor, environmental and productive standards Leadership in the region is based on the construction and evaluation of projects in Chile, Colombia and Peru

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Projects Under Construction

Bocamina II, Coal‐steam power plant, Chile

» Installed capacity: 370 MW » Estimated investment: US$ 750 million » State‐of‐the‐art technology for gas reductions » Near the city of Coronel » Estimated start‐up date: 2nd half of 2010

Wind Farm Canela II, Chile

» 40 wind generators » Installed capacity: 60 MW » Estimated investment: US$ 150 million » Estimated start‐up date: 4th quarter of 2009

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Liquefied Natural Gas Project, Chile

» LNG reliable source for electricity generation » Responsible from an environmental point of view » International prices of gas » Opening of Chilean market of LNG » British Gas supplies the LNG » 20% interest of Endesa Chile in re‐gasification terminal » In July started the testing of operations, as the first ship tank

• arrived. Start up is planned for the 3Q09 and definitively in

2010.

Quintero Thermal power plant, Chile

» Installed capacity: 250 MW on open cycle with diesel (dual) » Alongside LNG re‐gasification terminal » Estimated investment: US$ 140 million » Start‐up was in June 2009 (one turbine already operating)

Projects Under Construction

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Hydroelectric power plant Los Cóndores, Chile

» Run‐of‐the‐river power plant » Installed capacity: 148 MW » Uses water flows from el Maule Lake, in San Clemente, Talca » Estimated start‐up date: 4th quarter of 2013

Projects Under Study

Mini Hydroelectric power plant Piruquina, Chile

» Run‐of‐the‐river power plant » Installed capacity: 7.6 MW » Uses water flows from Carihueico River » Estimated start‐up date: 4th quarter of 2012

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Hydroelectric power plant Neltume, Chile

» Run‐of‐the‐river power plant » Installed capacity: 473 MW » Uses water flows between the Pirehueico and Neltume Lakes. » Estimated start‐up date: 4th quarter of 2014

Projects Under Study

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Hydroelectric Project Aysén, Chile – Under Study » Endesa Chile owns 51% of HidroAysén S.A. » Installed capacity: 2,750 MW » 5,910 flooded HA /2,750 MW » Avoids emission of 16,200,000 tons of CO2/year equivalent to 7 coal‐steam power plants » Uses of water: natural resource, national, renewable, safe and clean

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Location of the Project

Baker 1 Capacity: 6 6 0 MW

• Av. Gen: 4 ,4 2 0 GW h

Baker 2 Capacity: 3 6 0 MW

• Av. Gen: 2 ,5 4 0 GW h

Pascua 1 Capacity: 4 6 0 MW

• Av. Gen: 3 ,0 2 0 GW h

Pascua 2 .2 Capacity: 5 0 0 MW

• Av. Gen: 3 ,3 4 0 GW h

Pascua 2 .1 Capacity: 7 7 0 MW

• Av. Gen: 5 ,1 1 0 GW h
• Av. Annual Energy Production:

1 8 ,4 3 0 GW h Total I nstalled Capacity: 2 ,7 5 0 MW

Hydroelectric Project Aysén, Chile – Under Study

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Flooding Surface/Energy Generated

HidroAysén’s power plants in the Baker and Pascua rivers will be the most efficient in hydroelectric generation worldwide, as it will have the best equation between flooding surface and energy generation.

Hydroelectric Project Aysén, Chile – Under Study

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Inversiones necesarias

Projects Outside Chile

Santa Rosa, NG Combined Cycle, Peru

» Project under construction » Installed capacity: 189 MW » Expansion of existing Santa Rosa power plant » Estimated investment: US$ 90 millions » Natural gas from Camisea » Estimated start‐up date: 2nd half of 2009

El Quimbo, Hydroelectric Power Plant, Colombia

» Project under development, environmental license granted » Installed capacity: 400 MW » Estimated investment: US$ 780 millions » Estimated start‐up date: End of 2014

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Attractive margins in 1H09

Conclusions

Face upcoming challenges with high quality and efficient assets

Asset Base » Large and Efficient portfolio of assets » Excellence in operations » Strongly committed to sustainability Conservative Policies » Commercial policy » Solid financial position and healthy balance sheet » Liquidity Know‐how » Ability to develop our own projects » Know‐how and vast experience » Demand and regulation

Challenging year 2009, but we foresee many opportunities

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This presentation contains statements that constitute or may constitute statements about the future, as established in the United States Private Securities Litigation Reform Act of 1995. Such statements appear frequently in this presentation with statements referring to our intentions, beliefs and expectations, which include, but are not limited to, any statement with respect to: (1) our investment program, (2) trends that affect our financial condition or operating income, and (3) the effects of changes in the regulatory framework for the electricity industry in one or more of the countries in which we operate. As such statements are subject to risks and inaccuracies, the effective results may differ significantly with respect to those expressed or implied in such statements with a view to the future. Such statements should not be unduly relied upon as they only refer to the position on the date on which they were

• prepared. We assume no obligation to publicly report on changes that might be

applied to the statements with a view to the future.

Disclaimer

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Contact us at:

ir@endesa.cl

Endesa Chile’s Investor Relations Team

Irene Aguiló Investor Relations Executive (56‐2) 630 96 04 iaguilo@endesa.cl Jacqueline Michael Investor Relations Executive (56‐2) 630 95 85 jmc@endesa.cl Juan Pablo Reitze Head of Investor Relations (56‐2) 630 96 03 jprv@endesa.cl

• M. Teresa Fuentealba

Investor Relations Executive (56‐2) 630 95 06 mtfd@endesa.cl