ENEL — Società Per Azioni (Incorporated with Limited Liability in Italy) U.S

OFFERING CIRCULAR NOT FOR GENERAL CIRCULATION IN THE UNITED STATES

ENEL — Società per Azioni (incorporated with limited liability in Italy) U.S. $1,250,000,000 Capital Securities due 2073 Enel — Società per Azioni (the “Issuer” or “Enel”) will issue U.S. $1,250,000,000 Capital Securities due 2073 (the “Securities”) on September 24, 2013 (the “Issue Date”). The Securities will bear interest on their principal amount (a) from (and including) the Issue Date to (but excluding) the First Reset Date, at the rate of 8.750 percent per annum and (b) from (and including) the First Reset Date to (but excluding) the Maturity Date, for each Reset Period, the relevant 5-year Swap Rate plus (A) in respect of the Reset Periods commencing on the First Reset Date, September 24, 2028, September 24, 2033 and September 24, 2038, 6.130 percent per annum, and (B) in respect of any other Reset Period, 6.880 percent per annum (each, as defined in “Description of the Securities”). Interest on the Securities will be payable semi- annually in arrears on March 24 and September 24 each year, commencing on March 24, 2014 (each an “Interest Payment Date”). Payment of interest on the Securities may be deferred at the option of the Issuer in certain circumstances, as set out under “Description of the Securities — Interest Deferral”. The Securities will be issued in fully registered form and only in denominations of U.S. $200,000 and in integral multiples of U.S. $1,000 in excess thereof. Unless previously redeemed by the Issuer as provided below, the Issuer will redeem the Securities on September 24, 2073 at their principal amount, together with interest accrued to, but excluding, such date and any Arrears of Interest (as defined in “Description of the Securities”). The Issuer may redeem all of the Securities, but not some only, on any Reset Date, in each case at their principal amount together with any interest accrued up to, but excluding, the relevant Reset Date and any Arrears of Interest. The Issuer may also redeem all, but not some only, of the Securities at the applicable Early Redemption Price at any time upon the occurrence of a Withholding Tax Event, an Accounting Event, a Rating Methodology Event or a Tax Deductibility Event (each as defined in “Description of the Securities”). In the event that at least 90 percent of the aggregate principal amount of the Securities issued on the Issue Date has been purchased by or on behalf of the Issuer or a Subsidiary of the Issuer (as defined in “Description of the Securities”) and cancelled, the Issuer may redeem all, but not some only, of the outstanding Securities at the applicable Early Redemption Price. See “Description of the Securities — Purchases and Substantial Repurchase Event”). The Securities constitute direct, unsecured and subordinated obligations of the Issuer and rank and will at all times rank pari passu without any preference among themselves and with Parity Securities and senior only to Junior Securities. The Securities will not be guaranteed. An investment in the Securities involves certain risks. For a discussion of risks, see “Risk Factors,” beginning on page 20. This Offering Circular has been approved by the Central Bank of Ireland (the “Central Bank”), as competent authority under the Prospectus Directive 2003/71/EC, as amended (the “Prospectus Directive”). The Central Bank only approves this Offering Circular as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to Securities which are to be admitted to trading on the regulated market of the Irish Stock Exchange or other regulated markets for the purposes of Directive 2004/39/EC or which are to be offered to the public in any member state of the European Economic Area. Application has been made to the Irish Stock Exchange for the Securities to be admitted to the Official List and trading on its regulated market. The Managers (as defined herein) are offering the Securities to qualified institutional buyers (“QIBs”) in reliance on Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Securities will be issued pursuant to the terms of the indenture dated September 24, 2013 (the “Indenture”) among the Issuer and Citibank, N.A., London Branch, as Trustee (the “Trustee”). The Securities will be evidenced by Global Securities (the “Global Securities”) registered in the name of Monte Titoli S.p.A. (“Monte Titoli”), as operator of the Italian central securities clearing system for credit of the Securities evidenced thereby to accounts of Monte Titoli participants, and will be issued in dematerialized form in Monte Titoli. Initially, all of the Securities will be credited to a third-party securities account in Monte Titoli of Citibank, N.A., London Branch, as Receipt Issuer (the “Receipt Issuer”). The Receipt Issuer will issue and deliver Receipts (“Receipts”) representing the book-entry interests in the Global Securities it holds on deposit and evidenced by Global Receipts in registered form (the “Global Receipts”) to The Depository Trust Company (“DTC”) for credit to the accounts of DTC’s participants. Citibank, N.A., London Branch will hold the Global Receipts as custodian for DTC, and the Global Receipts will be registered in the name of Cede & Co., as DTC’s nominee, for the benefit of DTC’s participants. Transfers of beneficial interests in the Global Receipts will be shown on, and will be effected only through, records maintained in book-entry form by DTC or any other securities intermediary holding an interest directly or indirectly through DTC. After the initial placement of the Receipts, holders of Receipts who are QIBs will have the right, subject to the terms of the Deposit Agreement (as hereinafter defined) for the Receipts and the Tax Certification Procedures (as hereinafter defined), to request conversion of the Receipts into the corresponding Securities to be held in accounts by QIBs at participants at Monte Titoli that are “second level banks” (as defined in Italian Legislative Decree No. 239 dated April 1, 1996, as the same may be amended or supplemented from time to time, “Decree No. 239”), including Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, Luxembourg (“Clearstream”), or that employ the services of an Italian Tax Representative (as such term is defined in Decree No. 239) (both herein referred to as a “Second-level Bank”). Similarly, QIBs will be able, subject to the terms of the Deposit Agreement and the Tax Certification Procedures, to convert their Securities into the corresponding Receipts to be held in an account at DTC. See “Description of the Receipts and the Deposit Agreement.” Italian law requires financial institutions performing the duties of Second-level Banks to obtain from each eligible beneficial owner (as referred to in Decree No. 239) a certification of its eligibility to receive interest, premium and other income in respect of the Securities free from Italian substitute tax (imposta sostitutiva) upon the investor’s first purchase of a beneficial interest in the Securities (either at the time of the issuance of Securities or, if purchased thereafter, upon a purchase of Securities in the secondary market), and to make that certification available to the Italian tax authorities. There are no ongoing certification requirements for investors following the initial certification of eligibility, subject, in the case of Securities represented by Receipts, to compliance with the Acupay Italian tax compliance and relief procedures described in “Annex B — Acupay Italian Tax Compliance and Relief Procedures” (the “Tax Certification Procedures”) by them and their Financial Intermediaries (as defined below). Enel has arranged certain procedures with Acupay System LLC (“Acupay”) and Monte Titoli to facilitate the collection of certifications from beneficial owners of Receipts through the relevant securities brokers and dealers, banks, trust companies, and clearing corporations that clear through DTC or maintain a direct or indirect custodial relationship with a DTC Participant (as defined in “Description of the Securities”) (such direct or indirect participants in DTC, the “Financial Intermediaries”). In connection with such Tax Certification Procedures applicable to the Receipts, Monte Titoli will, as Italian Tax Representative, perform the functions of Second-level Bank in relation to all of the Securities represented by Receipts.

Italian substitute tax at the then-applicable rate (currently 20.0%) will be withheld from interest (including the accrual of original issue discount) and redemption premium (if any) arising in respect of the Securities received by any investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the Securities (including, in the case of investors holding Receipts, because of any failure of the Tax Certification Procedures or that fails, or whose Financial Intermediaries fail, to comply with the Tax Certification Procedures). Such withholding will be applied to income received by such investor from payments made by the Issuer, as well as to accrued interest received by such investor incidentally in connection with the transfer of beneficial interests in the Securities. The Issuer will not pay any additional amounts in respect of any such withholding. In addition, an investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the Securities or does not comply (either directly or through, or because of, any Financial Intermediary through which it holds the Securities) with the Tax Certification Procedures applicable to Receipts will be permitted to transfer its beneficial interest in the Receipts only upon compliance with certain tax procedures, including payment of Italian substitute tax for the relevant interest accrual period. See “Risk Factors — Risks related to the Securities,” “Important Italian Substitute Tax Requirements and Information in Respect of the Tax Certification Procedures,” “Book-Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures” and “Annex B — Acupay Italian Tax Compliance and Relief Procedures.” Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Mitsubishi UFJ Securities (USA), Inc., Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC (collectively, the “Joint Lead Managers”) and Banca IMI S.p.A., BBVA Securities Inc., Santander Investment Securities Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., ING Bank N.V., Mediobanca — Banca di Credito Finanziario S.p.A., Natixis, SG Americas Securities, LLC, The Royal Bank of Scotland plc, UBS Securities LLC and and UniCredit Bank AG (the “Co-Managers” and together with the Joint Lead Managers, the “Managers”) expect to deliver the Securities in the form of Receipts to purchasers in book-entry form only through the facilities of DTC on or about September 24, 2013. The Securities and the Receipts have not been and will not be registered under the Securities Act and are being offered and sold to QIBs in reliance on Rule 144A under the Securities Act. Prospective purchasers are hereby notified that the seller of the Securities, and the issuer of the Receipts, may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The Securities and the Receipts are subject to U.S. tax law requirements. The Securities and the Receipts are not transferable except in accordance with the restrictions described under “Plan of Distribution — Selling and transfer restrictions.” Joint Lead Managers

Barclays BofA Merrill Lynch Citigroup Credit Suisse Goldman, Sachs & Co. J.P. Morgan Mitsubishi UFJ Securities Mizuho Securities Morgan Stanley

Co-Managers Banca IMI BBVA BNP PARIBAS Credit Agricole CIB Deutsche Bank Securities HSBC ING Mediobanca Natixis Santander SOCIETE GENERALE The Royal Bank of Scotland UBS Investment Bank UniCredit Bank

The date of this Offering Circular is September 18, 2013.

IMPORTANT ITALIAN SUBSTITUTE TAX REQUIREMENTS AND INFORMATION IN RESPECT OF THE TAX CERTIFICATION PROCEDURES

Under Italian law, interest in respect of the Securities may be subject to substitute tax in Italy, currently at the rate of 20.0%, upon (i) payment of interest, premium and other income in respect of the Securities or (ii) transfer of the Securities. Interest in respect of the Securities will not be subject to such substitute tax if accruing to beneficial owners who are eligible non- Italian resident beneficial owners of the Securities with no permanent establishment in Italy to which the Securities are effectively connected, provided that all the requirements and procedures set forth in Decree No. 239 and in the relevant implementing rules (as amended) are complied with in due time in order to benefit from the exemption from substitute tax. For purposes of Decree No. 239, income subject to Italian substitute tax includes interest, premium and other income (including the difference, if any, between the redemption amount and the issue price) under the Securities. References in this Offering Circular to interest income or interest in connection with the description of amounts subject to Italian substitute tax shall include all such components of income, as applicable. For purposes of Decree No. 239, beneficial owners of the Securities include (i) ultimate beneficiaries of payments under the Securities and (ii) certain institutional investors (as further described below), such as insurance companies, investment companies, investment funds, open-ended investment companies and pension funds. Institutional investors, for purposes of Decree No. 239, are generally those entities that have as their principal activity of the making and managing of investments for their own account or on behalf of third parties, other than entities established to manage investments made by a limited number of investors or to enable investors resident in Italy or countries that do not allow for a satisfactory exchange of information with Italy to be benefit from the exemption to the payment of Italian substitute tax. All such investors (other than ultimate beneficiaries that hold through institutional investors considered as beneficial owners for purposes of Decree No. 239) must satisfy the requirements of Decree No. 239 and, in the case of investors investing in and holding Receipts, comply with certain formalities in order to benefit from the exemption to the application of Italian substitute tax. Beneficial holders of the Securities in respect of whom the requirements and procedures set forth in Decree No. 239 are not complied with will receive payments net of Italian substitute tax, currently at the rate of 20.0%. The Issuer will not pay additional amounts in respect of any such substitute tax (including possible penalties and interest related to the payment thereof) as set forth in “Description of the Securities — Payment of Additional Amounts.” See also “Certain Tax Considerations — Italian taxation — Non-Italian resident holders of the Securities.” The Issuer has agreed in the Deposit Agreement (as hereinafter defined) and the TCA Agreement, so long as any principal amount of the Receipts remain outstanding and insofar as it is reasonably practicable, to maintain, implement or arrange the implementation of procedures to facilitate the collection of information concerning the Receipts and the Beneficial Owners thereof so long as such collection is required to allow payment on the Securities to be free and clear of substitute tax to eligible investors. However, the Issuer cannot assure that it will be practicable to do so, or that such procedures will be effective. Enel, Acupay and Monte Titoli will enter into a tax compliance agency agreement dated on or about September 24, 2013 (the “TCA Agreement”). The TCA Agreement sets forth, among other things, certain procedures arranged by Acupay, Monte Titoli and the Issuer that will facilitate the collection and processing of information regarding the identity and residence of the Beneficial Owners (as defined under “Description of the Receipts and the Deposit Agreement”) of Receipts who hold their interests through Financial Intermediaries. The Tax Certification Procedures are set forth in Annex B to this Offering Circular. The Tax Certification Procedures will not be available for Definitive Registered Receipts (as defined herein).

No arrangements or procedures have been made by the Issuer with respect to any depositary or clearing system other than the Tax Certification Procedures arranged by Acupay, Monte Titoli and the Issuer mentioned above. In addition, at any time, DTC may discontinue providing its services as central depositary and clearing system with respect to the beneficial interests in the Receipts. Monte Titoli has confirmed that the Securities, but not the Receipts, are eligible for inclusion in its clearing and settlement system. Euroclear and Clearstream are participants in Monte Titoli and qualify as Second-level Banks. Investors who may eventually hold Securities through Euroclear and Clearstream and who satisfy the requirements of Decree No. 239 and comply with the tax certification requirements contemplated in Decree No. 239 are eligible to benefit from the exemption from the application of the Italian substitute tax. The Tax Certification Procedures provide that Beneficial Owners (as defined under “Description of the Receipts and the Deposit Agreement”) of Receipts (i) who are not eligible to receive payments of interest in respect of Receipts free of Italian substitute tax, (ii) who fail to submit the applicable self-certification forms, or (iii) for whom an applicable Financial Intermediary has failed to supply correct Beneficial Owner information in connection with the settlement of purchases or sales of Receipts with respect to any of the Beneficial Owners holding through such Financial Intermediary (including, in each case, because of failure of, or non-compliance with, the Tax Certification Procedures), will in each case be subject to a i mandatory exchange of such Receipts into Receipts of the same series paying interest net of Italian substitute tax (a “Mandatory Exchange”). Beneficial Owners of Receipts that are subject to the application of Italian substitute tax (N Receipts) will be permitted to transfer their beneficial interests in such Receipts only upon compliance with the applicable transfer and exchange procedures described in the Tax Certification Procedures, including, without limitation, payment of the Italian substitute tax on any interest, including any original issue discount, accrued but not yet paid until the settlement date of a prospective transfer. The Tax Certification Procedures also provide that payments of interest to or through any DTC Participant that fails to comply with the Mandatory Exchange contemplated in the Tax Certification Procedures would be paid net of Italian substitute tax in respect of such DTC Participant’s entire interest in Receipts on all future payments to such DTC Participant. Accordingly, all Beneficial Owners who held their interests in Receipts through such DTC Participant would, in that event, receive interest net of Italian substitute tax for so long as they continue to hold such interests through such DTC Participant. The TCA Agreement, including the Tax Certification Procedures annexed thereto, may be modified, amended or supplemented in accordance with its terms, without the need for the prior consent of Holders or Beneficial Owners of Receipts. Should a Beneficial Owner of Receipts otherwise entitled to an exemption suffer the application of substitute tax as a consequence of the Tax Certification Procedures no longer being in place or because of a failure by such Beneficial Owner or its Financial Intermediaries to comply with such procedures, such Beneficial Owner may request a refund of the substitute tax so applied directly from the Italian tax authorities within 48 months from the application of the tax. See “Annex B — Acupay Italian Tax Compliance and Relief Procedures — Article III. Procedure for Direct Refund from Italian Tax Authorities.” Beneficial Owners of Receipts should consult their tax advisors on the procedures required under Italian tax law to recoup the substitute tax in these circumstances. Such procedures may entail costs and any refund may be subject to extensive delays. None of the Issuer, the Managers, any of the Issuer’s agents, Monte Titoli, DTC or Acupay assumes any responsibility therefor. See “Risk Factors — Risks related to the Securities — Italian substitute tax will be deducted from any interest, premium and other income in respect of the Securities to any investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax (including, in the case of Receipts, because of any failure of, or non-compliance with, the Tax Certification Procedures). Such ineligibility may arise from failure to comply with the Tax Certification Procedures by any of the Financial Intermediaries through whom the investor holds its interest in the Securities.”

NOTICE TO INVESTORS

This Offering Circular comprises a prospectus for purposes of Article 5.3 of the Prospectus Directive and for purposes of the Irish implementing legislation. The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case), the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information. This Offering Circular contains third-party information that has been extracted from Terna S.p.A., an external source, as described in this Offering Circular. See “Risk Factors — Risks related to the energy industry and markets — The Group is vulnerable to any decrease in demand for electricity, including as a result of the continuation or deepening of the current global recession”. The Issuer confirms that such information has been accurately reproduced and, as far as it is aware and is able to ascertain from published information, no facts have been omitted which would render the reproduced information inaccurate or misleading. No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli as to the accuracy or completeness of the information contained in this Offering Circular or any other information provided by the Issuer in connection with the offering of the Securities (including the Receipts). To the fullest extent permitted by law, none of the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli accepts any responsibility for the contents of this Offering Circular or for any other statements made or purported to be made by any of the Managers or on their behalf in connection with the Issuer or issue and offering of any Securities (including the Receipts). Each of the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli accordingly disclaims all and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of this Offering Circular or any such statement. No person is or has been authorized by the Issuer to give any information or to make any representation not contained in or not consistent with this Offering Circular or any other information supplied in connection with the offering of the Securities (including the Receipts) and, if given or made, such information or representation must not be relied upon as having been authorized by the Issuer, any of the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli. Neither this Offering Circular nor any other information supplied in connection with the offering of the Securities (including the Receipts) (a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by the Issuer, any of the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli that any recipient of this Offering Circular or any other information supplied in connection with the offering of the Securities (including the Receipts) should purchase any Securities or Receipts. Each investor contemplating purchasing any Securities (including Receipts) should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Securities or Receipts shall in any circumstances imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the offering of the Securities or the Receipts is correct as of any time subsequent to the date indicated in the document containing the same. The Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay and Monte Titoli expressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Securities or the Receipts or to advise any investor in the Securities or Receipts of any information coming to their attention. Neither Securities nor the Receipts have been approved or disapproved by the U.S. Securities and Exchange Commission or any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of this Offering Circular. Any representation to the contrary is unlawful. This Offering Circular is being submitted in the United States to QIBs for informational use solely in connection with the consideration of the purchase of the Securities and Receipts being offered hereby. It is not for general circulation in the United States, and its use for any other purpose in the United States is not authorized. It may not be copied or reproduced in whole or in part nor may it be distributed or any of its contents disclosed to anyone other than the prospective investors to whom it is originally submitted. Within the United States, the Securities and the Receipts may be offered or sold only to QIBs in transactions exempt from registration under the Securities Act. Each purchaser of the Securities and Receipts is hereby notified that the offer and sale of any Securities and Receipts to it may be being made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A under the Securities Act.

iii

This Offering Circular does not constitute an offer to sell or the solicitation of an offer, or an invitation, to buy the Securities or the Receipts in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of this Offering Circular and the offer or sale of the Securities and the Receipts may be restricted by law in certain jurisdictions. None of the Issuer, the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli represents that this Offering Circular may be lawfully distributed, or that the Securities or the Receipts may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assumes any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer, the Managers, the Trustee, the Paying Agent, the Receipt Issuer, Acupay or Monte Titoli that would permit a public offering of the Securities or the Receipts or the distribution of this Offering Circular in any jurisdiction where action for that purpose is required. Accordingly, no Securities or Receipts may be offered or sold, directly or indirectly, and neither this Offering Circular nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Offering Circular or any Securities or Receipts may come must inform themselves about, and observe, any such restrictions on the distribution of this Offering Circular and the offering and sale of the Securities and the Receipts. In particular, there are restrictions on the distribution of this Offering Circular and the offer or sale of the Securities and the Receipts in the United States. See “Plan of Distribution.”

Notice to New Hampshire residents

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (CHAPTER 421-B) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER CHAPTER 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

IN CONNECTION WITH THE OFFERING OF THE SECURITIES, J.P. MORGAN SECURITIES LLC (OR PERSONS ACTING ON ITS BEHALF) (TOGETHER THE “STABILIZING MANAGERS”) MAY OVER-ALLOT SECURITIES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SECURITIES (INCLUDING RECEIPTS) AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZING MANAGERS (OR PERSONS ACTING ON THEIR BEHALF) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE SECURITIES (INCLUDING RECEIPTS) IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE ISSUER RECEIVED THE PROCEEDS OF THE SECURITIES, OR NO LATER THAN 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE SECURITIES, WHICHEVER IS THE EARLIER. ANY STABILIZING ACTION OR OVER-ALLOTMENT OF THE SECURITIES (INCLUDING RECEIPTS) MUST BE CONDUCTED BY THE STABILIZING MANAGERS (OR PERSONS ACTING ON THEIR BEHALF) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.

WHERE YOU CAN FIND MORE INFORMATION

To permit compliance with Rule 144A in connection with any resales or other transfers of Receipts or Securities that are “restricted securities” within the meaning of the Securities Act, the Issuer has undertaken in the Indenture and the Deposit Agreement (each as defined herein), to furnish, upon the request of a holder of such Receipts, Securities or any beneficial interest therein, to such holder or to a prospective purchaser designated by such holder, the information required to be delivered under Rule 144A(d)(4) under the Securities Act if, at the time of the request, the Issuer is neither a reporting company under Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder. See also “General information — Documents available.”

SERVICE OF PROCESS AND ENFORCEABILITY OF CIVIL LIABILITIES

Enel and many of its subsidiaries are joint stock companies (società per azioni or S.p.A.) incorporated under the laws of Italy. All of the officers and directors named herein reside outside the United States and all or a substantial portion of the assets of the Issuer and of such officers and directors are located outside the United States. As a result, it may not be possible for investors to effect service of process outside of the Issuer’s jurisdiction of incorporation upon the Issuer or such persons, or to enforce judgments against them obtained in courts outside of its jurisdiction of incorporation predicated upon its civil liabilities or such directors and officers under laws other than of its jurisdiction of incorporation law, including any judgment predicated upon United States federal securities laws. The Issuer acknowledges that there is doubt as to the enforceability in its jurisdiction of incorporation in original actions or in actions for enforcement of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States.

FORWARD-LOOKING STATEMENTS

This Offering Circular contains forward-looking statements, including (without limitation) statements containing the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar words. These statements are based on Enel’s current expectations and projections about future events and involve substantial uncertainties. All statements, other than statements of historical facts, contained herein regarding Enel’s strategy, goals, plans, future financial position, projected revenues and costs or prospects are forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties, some of which cannot be predicted or quantified. Future events or actual results could differ materially from those set forth in, contemplated by or underlying forward-looking statements. Enel does not undertake any obligation to publicly update or revise any forward-looking statements. Furthermore, this Offering Circular contains certain statements and estimates regarding the competitive position in certain markets of Enel and its subsidiaries (collectively, the “Group”), including with respect to the Group’s preeminence in particular markets. Such statements are based on the best information available to the Group’s management as of the date hereof. However, the Group faces competitive risks and its market positions may diverge from those expressed herein as a result of a variety of factors. Any failure of the Group to execute upon its plans or maintain its market positions could have a material adverse effect upon the Group, its business prospects, its financial condition and its results of operations. See “Presentation of Financial and Other Information — Market information.” Enel may not actually achieve or realize the plans, intentions or expectations disclosed in its forward-looking statements and prospective investors should not place undue reliance on them. There can be no assurance that actual results of the Issuer’s activities and operations will not differ materially from the expectations set forth in such forward-looking statements. Factors that could cause actual results to differ from such expectations include, but are not limited to, those described under “Risk Factors,” including the following:  The fact that Enel is burdened by significant indebtedness;  The fact that Enel is vulnerable to any decrease in demand for electricity resulting from the continuation or deepening of the current global recession; and  The fact that Enel is controlled by the Ministry of Economy and Finance of the Republic of Italy (the “MEF”), which enjoys special powers that other shareholders do not have, and which may have interests different from those of other shareholders. The above is not an exhaustive list of the factors that could cause actual results to differ materially from the expectations set forth in such forward-looking statements and should be read together with the other cautionary statements included in this Offering Circular, including those described under “Risk Factors,” beginning on page 20 of this Offering Circular.

vii

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

With the exception of certain non-IFRS financial measures discussed below, the Group’s financial information as of and for the years ended December 31, 2012, 2011 and 2010 has been derived from the Group’s audited consolidated financial statements as of and for the years ended December 31, 2012, 2011 and 2010 (the “2012 Audited Consolidated Financial Statements,” the “2011 Audited Consolidated Financial Statements” and the “2010 Audited Consolidated Financial Statements,” respectively). The 2012 Audited Consolidated Financial Statements, the 2011 Audited Consolidated Financial Statements and the 2010 Audited Consolidated Financial Statements (together, the “Audited Consolidated Financial Statements”) were approved by the board of directors of Enel on March 12, 2013, March 8, 2012 and March 15, 2011, respectively.

The Audited Consolidated Financial Statements were prepared in accordance with IFRS as issued by the International Accounting Standards Board and endorsed by the European Union and the Italian regulation implementing Article 9 of Legislative Decree No. 38/05. IFRS as endorsed by the European Union differs in certain important respects from generally accepted accounting principles in the United States. The 2012 Audited Consolidated Financial Statements and the 2011 Audited Consolidated Financial Statements have been audited by Reconta Ernst & Young S.p.A. (“Ernst & Young”), whose reports thereon, dated April 4, 2013 and April 6, 2012, respectively, are included in this Offering Circular. The 2010 Audited Consolidated Financial Statements have been audited by KPMG S.p.A., whose report thereon, dated April 6, 2011, is included in this Offering Circular. The Audited Consolidated Financial Statements and the accompanying notes thereto are included in this Offering Circular. Moreover, with the exception of certain non-IFRS financial measures discussed below, the Group’s financial information as of and for the six months ended June 30, 2013 and 2012 has been derived from the Group’s unaudited condensed interim consolidated financial statements as of and for the six months ended June 30, 2013 and 2012 (the “2013 Unaudited Condensed Interim Consolidated Financial Statements” and the “2012 Unaudited Condensed Interim Consolidated Financial Statements,” respectively). The 2013 Unaudited Condensed Interim Consolidated Financial Statements and the 2012 Unaudited Condensed Interim Consolidated Financial Statements (together, the “Unaudited Condensed Interim Consolidated Financial Statements”), were prepared in condensed form in conformity with the international accounting standard applicable to the preparation of interim financial statements (IAS 34) and, along with the accompanying notes thereto, are also included in this Offering Circular. The Unaudited Condensed Interim Consolidated Financial Statements do not contain all of the information required for the annual consolidated financial statements and should therefore be read together with the Audited Consolidated Financial Statements and the accompanying notes thereto. The 2013 Unaudited Condensed Interim Consolidated Financial Statements were approved by the board of directors of the Issuer on August 1, 2013 and have been reviewed by the Group’s independent auditors, Ernst & Young, whose report thereon, dated August 2, 2013, is included in this Offering Circular. The 2013 Unaudited Condensed Interim Consolidated Financial Statements are not necessarily indicative of the results of operations that may be expected for any other interim period in 2013 or for the full year. The 2012 Unaudited Condensed Interim Consolidated Financial Statements were approved by the board of directors of the Issuer on August 2, 2012. Capitalized terms used in the following discussion are defined under “— Certain defined terms” below. In making an investment decision, investors must rely upon their own examination of the financial statements and financial information included in the Offering Circular and should consult their professional advisors for an understanding of, among other things: (i) the differences between IFRS and other systems of generally accepted accounting principles, including U.S. GAAP, and how those differences might affect the financial information included in this Offering Circular; and (ii) the impact that future additions to, or amendments of, IFRS principles may have on the Group’s results of operations and/or financial condition, as well as on the comparability of prior periods. Comparability of financial information The financial information included in this Offering Circular is fully comparable, as the Group’s scope of consolidation was not affected by important changes during these periods, except for the Segment Reporting information, which was impacted by the new operating model adopted by the Group in 2012. As a result of the adoption of this new operating model, in addition to the effects of the elimination of transactions between segments, the “Other, eliminations and adjustments” segment includes the results of the Parent, the Services and Other Activities area, the Engineering and Research division, which in 2011 had been reported separately, as well as the activities of the Upstream Gas function, which had previously been included in the Generation and Energy Management division. Accordingly, the Group’s performance figures and financial position as of and for the year ended December 31, 2011 presented for comparative purposes in the 2012 Audited viii

Consolidated Financial Statements have been restated in accordance with these new arrangements. The Group’s financial information by business segment as of and for the year ended December 31, 2010 has not been restated and is presented in this Offering Circular as it was included for comparative purposes in the 2011 Audited Consolidated Financial Statements. For more information, see “— Restatements and changes in segment presentation — Changes in segment presentation.” The segmental results as of and for the six months ended June 30, 2013 are reported and discussed in accordance with IFRS 8. The generation and energy management results of the Generation, Energy Management and Sales Italy division are shown separately from the results pertaining to electricity sales in Italy, consistent with the practice in previous periods and with the structure of internal reporting to top management. In particular, the Group’s decision to combine the Generation and Energy Management division and the Sales Italy division into one division (Generation, Energy Management and Sales Italy) has not, pursuant to IFRS 8, required any change to the Group’s reporting segments.

Restatements and changes in segment presentation Restatements Restatement of comparative figures as of and for the year ended December 31, 2012 and the six months ended June 30, 2012 Following the application, from January 1, 2013 and with retrospective effect, of the new version of “IAS 19R — Employee Benefits,” the Group’s consolidated balance sheet as of December 31, 2012 and its income statement for the six months ended June 30, 2012 have been restated and reported solely for comparative purposes. The most significant change regards the recognition of all actuarial gains/losses in Other Comprehensive Income, with the elimination of the corridor approach, which allowed gains and losses to be amortized to the extent that they fall outside 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets, over a period not exceeding the average expected remaining future working life of employees, through the profit and loss account. The impact of the amendments mainly derives from the change in the accounting treatment of past service costs and actuarial gains and losses, whose recognition can no longer be deferred. During the second half of 2012, the Group adopted a new policy to account for white certificates (EECs), under which energy efficiency requirements are treated as a system charge aimed at achieving energy savings objectives in connection with which operators that are subject to these certification requirements incur the costs for the purchase and internal development of the certificates that will be delivered to the competent authorities for the purpose of compliance with the targets. The previous accounting policy was based on treating white certificates as assets used in the production process. Accordingly, the related costs were recognized through profit or loss at the time of their actual use for the purpose of compliance with regulatory requirements. In addition, white certificates deriving from multi-year projects were classified under intangible assets and amortized at the time of their use. The change in the accounting treatment of white certificates was applied retrospectively and led to the restatement of certain income statement items for the period ended June 30, 2012, which are included in the 2013 Unaudited Condensed Interim Consolidated Financial Statements for comparative purposes only. In the six months ended June 30, 2012, Enel acquired control of a number of companies in the Kafireas wind power pipeline in Greece, which had previously been accounted for using the equity method, and acquired 100% of Stipa Nayaa, a Mexican company operating in the wind generation sector. In the six months ended June 30, 2013, Enel completed the definitive allocation of the purchase prices of the Kafireas pipeline companies and of Stipa Nayaá, resulting in a restatement of the balance sheet as of December 31, 2012 to reflect the fair value adjustments of the assets acquired and liabilities assumed. Enel recognized certain intangible assets, determined the associated tax effects and allocated to non-controlling interests the portion of such assets attributable to them. See Note 3 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. Restatement of comparative figures as of and for the year ended December 31, 2011 The Group’s adoption during the second half of 2012 of the new accounting policy for white certificates led to the restatement of certain balance sheet and income statement items as of and for the year ended December 31, 2011, which are included in the 2012 Audited Consolidated Financial Statements for comparative purposes only. See Note 4 to the 2012 Audited Consolidated Financial Statements. Restatement of comparative figures as of December 31, 2010 As a result of the determination of the final fair value of the assets acquired as well as the liabilities and contingent liabilities assumed as of the acquisition date (June 1, 2010) in respect of the SE Hydropower S.r.l. (“SE Hydropower”) business combination, the 2010 Audited Consolidated Financial Statements were restated to reflect the resulting increase in: non-

ix current assets of €510 million comprising consolidated equity pertaining to Enel’s shareholders of €128 million; equity pertaining to non-controlling interests of €193 million; and deferred tax liabilities of €189 million. Since the price paid in the transaction was entirely allocated to the value of the concessions, which became operational as from January 1, 2011, Enel concluded that it was not necessary to restate its consolidated income statement for the year ended December 31, 2010 as it was not impacted by the business combination. For further details on this restatement, please see Note 5 to the 2011 Audited Consolidated Financial Statements. With regard to the change in the accounting policies in 2012 relating to white certificates, which is described above, the balance sheet and income statement items as of and for the year ended December 31, 2010 have not been restated and in that respect are presented in this Offering Circular as they were included in the 2011 Audited Consolidated Financial Statements. If such change in accounting policies would have been applied in 2010, the Group’s Net Result and the Equity pertaining to Enel’s shareholders would have been reduced by €105 million as of and for the year ended December 31, 2010, respectively. The restated financial information set forth in this Offering Circular is identified by adding “(restated)” or “(as restated)” next to each period in respect of which the applicable line item or items being presented herein was or were restated. Changes in segment presentation In February 2012, the Group adopted a new operating model. The new model is based on the following organizational arrangements:  Enel functions, which are responsible for directing and controlling the Group’s strategic activities;  global service functions, which are responsible for providing services to the Group, as well as maximizing synergies and economies of scale; and  business lines, represented by six divisions, as well as the Upstream Gas function (which pursues selective vertical integration to increase the competitiveness, security and flexibility of strategic sourcing to meet Enel’s gas

requirements) and the Carbon Strategy function (which operates in the global carbon dioxide (“CO2”) certificate markets. The results by business segment as of and for the six months ended June 30, 2013 and as of and for the year ended December 31, 2012 are reported and discussed on the basis of the organizational arrangements established under the new operating model and take into account the possibility of simplifying disclosures associated with the materiality thresholds established under IFRS 8. As a result, in addition to the effects of the elimination of transactions between segments, the “Other, eliminations and adjustments” segment reports data regarding the Parent, the “Services and Other Activities” segment, the Engineering and Research division (which in 2011 had been reported separately) and the activities of the Upstream Gas function (which had previously been included in the Generation and Energy Management division). The new model has not resulted in any changes in the Group’s cash generating units (“CGUs”). Accordingly, the performance figures for 2011 and the financial position at December 31, 2011, presented for comparative purposes in the 2012 Audited Consolidated Financial Statements, have been restated in accordance with these new arrangements.

The Group’s financial information by business segment as of and for the year ended December 31, 2010 has not been restated and is presented in this Offering Circular as it was included for comparative purposes in the 2011 Audited Consolidated Financial Statements. Non-IFRS financial measures This Offering Circular contains certain non-IFRS financial measures, including the Group’s “gross operating margin,” which is also referred to as the Group’s “EBITDA,” and the Group’s “net financial debt,” “net non-current assets,” “net current assets,” “net assets held for sale” and “net capital employed.” EBITDA is calculated as “operating income” plus “depreciation, amortization and impairment losses.” “Net financial debt” is the Group’s net financial debt determined by “long-term loans,” the current portion of such loans and “short-term loans” less “cash and cash equivalents,” “current financial assets” and “non-current financial assets” not previously considered in other balance sheet indicators. In this Offering Circular, “net financial debt (ESMA standard)” refers to net financial debt of the Group calculated in conformity with paragraph 127 of the CESR/05-054b Recommendations, implementing European Commission Regulation 809/2004, and in line with the instructions of July 26, 2007 of the National Commission for the Regulation of the Stock Markets (Commissione Nazionale per le Società e la Borsa) (“CONSOB”), net of financial receivables and long-term securities. “Net financial debt (Enel method)” refers to net financial debt (ESMA standard) less long-term financial receivables and securities. “Net non-current assets” is calculated as the difference between “Non-current assets” and “Non-current liabilities” with the exception of: (i) “Deferred tax assets;” (ii) “Financial receivables due from other entities;” “Financial receivables in respect x of the Spanish electricity system deficit;” “Other securities designated at fair value through profit or loss;” and other items reported under “Non-current financial assets;” (iii) “Long-term loans;” (iv) “Post-employment and other employee benefits;” (v) “Provisions for risks and charges;” and (vi) “Deferred tax liabilities.” “Net current assets” is calculated as the difference between “Current assets” and “Current liabilities” with the exception of: (i) “Receivables for factoring advances,” “Long-term financial receivables (short-term portion),” “Other securities,” and other items reported under “Current financial assets”: (ii) “Cash and cash equivalents,” (iii) “Short-term loans” and the “Current portion of long-term loans.” “Net assets held for sale” is calculated as the algebraic sum of “Assets held for sale” and “Liabilities held for sale.” “Net capital employed” is calculated as the algebraic sum of “Net non-current assets” and “Net current assets”, provisions not previously considered, “Deferred tax liabilities” and “Deferred tax assets”, as well as “Net assets held for sale.” Investors should not place undue reliance on these non-IFRS financial measures and should not consider any non-IFRS financial measure as: (i) an alternative to operating income or net income as determined in accordance with IFRS; (ii) an alternative to cash flow from operating, investing or financing activities (as determined in accordance with IFRS) as a measure of the Group’s ability to meet cash needs; or (iii) an alternative to any other measure of performance under IFRS. These measures are not indicative of the Group’s historical operating results; nor are they meant to be predictive of future results. These measures are, however, used by Enel’s management to monitor the underlying performance of the Group. Since companies generally do not calculate similarly entitled non-IFRS financial measures in an identical manner, Enel’s measures may not be consistent with similar measures used by other companies. For this reason also, investors should not place undue reliance on any non-IFRS financial measures.

Market information This Offering Circular contains statements related to, among other things, the following: (i) the size of the sectors and markets in which the Group operates; (ii) growth trends in the sectors and markets in which Enel operates; and (iii) Enel’s relative competitive position in the sectors and markets in which it operates and the position of its competitors in those same sectors and markets. Whether or not this is stated, where such information is presented, such information is based on third-party studies and surveys as well as Enel’s experience, market knowledge, accumulated data and investigation of market conditions. While Enel believes such information to be reliable and believes any estimates contained in such information to be reasonable, Enel cannot assure you that such information or any of the assumptions underlying such estimates are accurate or correct, and none of the internal surveys or information on which Enel has relied have been verified by any independent sources. Accordingly, undue reliance should not be placed on such information. In addition, information regarding the sectors and markets in which Enel operates is normally not available for certain periods and, accordingly, such information may not be current as of the date of this Offering Circular. Certain defined terms In this Offering Circular:  References to “Enel,” the “Issuer” or the “Parent” are to Enel S.p.A., unless the context requires otherwise.  References to “Endesa” are to Endesa S.A. together with its consolidated subsidiaries unless the context requires otherwise, in which case references to “Endesa” may be references to Endesa S.A. alone (as in references to Endesa’s “shares” or “share capital”).  References to “Euro” or “€” are to the currency of the member states of the European Union participating in the third stage of the Economic and Monetary Union.  References to “$,” “U.S. $” or “U.S. dollar” refer to United States dollars.  References to “IFRS” are to the International Financial Reporting Standards issued by the International Accounting Standards Board, including interpretations of the International Financial Reporting Interpretations Committee (IFRIC), previously referred to as the “Standing Interpretations Committee” (SIC), and, including also, International Accounting Standards (IAS) where the context requires, as endorsed by the European Commission for use in the European Union. IFRS as endorsed by the European Commission for use in the European Union differ in certain aspects from IFRS issued by the International Accounting Standards Board.  References to the “Italian Unified Financial Act” are to Legislative Decree No. 58 of February 24, 1998, “Testo unico delle disposizioni in materia di intermediazione finanziaria,” as amended.

Rounding Certain numerical figures set out in this Offering Circular, including financial data presented in millions or thousands and certain percentages, have been subject to rounding adjustments and, as a result, the totals of the data in columns or rows of tables in this Offering Circular may vary slightly from the actual arithmetic totals of such information.

xii

EXCHANGE RATES

The following tables set forth, for the periods indicated, the high, low, period average and period end exchange rates between the Euro and U.S. dollar, as published by Bloomberg, expressed in U.S. dollars per €1.00. The rates may differ from the actual rates used in the preparation of the consolidated financial statements and other financial information appearing in this Offering Circular. Enel makes no representation that the Euro or U.S. dollar amounts referred to in this Offering Circular have been, could have been or could, in the future, be converted to Euro or U.S. dollars, as the case may be, at any particular rate, or at all. On September 13, 2013, the exchange rate between Euro and U.S. dollars, as published by Bloomberg was $1.3294 per Euro.

Year U.S. dollars per €1.00

Period Period High Low Average(1) End

2012 ...... 1.3458 1.2061 1.2860 1.3192 2011 ...... 1.4830 1.2907 1.3926 1.2959 2010 ...... 1.4513 1.1923 1.3266 1.3387 2009 ...... 1.5134 1.2531 1.3949 1.4326 2008 ...... 1.5992 1.2454 1.4712 1.3973

Month September 2013 (through September 13) ...... 1.3311 1.3120 1.3229 1.3294 August 2013 ...... 1.3417 1.3207 1.3319 1.3222 July 2013 ...... 1.3302 1.2781 1.3095 1.3302 June 2013 ...... 1.3392 1.3010 1.3200 1.3010 May 2013 ...... 1.3060 1.2944 1.2978 1.2999 April 2013 ...... 1.3177 1.2820 1.3025 1.3168 March 2013 ...... 1.3107 1.2780 1.2957 1.2820

(1) The period average for the years 2008 to 2012 represents the average exchange rates on the last business day of each month during the relevant period, and with respect to monthly information, the average exchange rates on each business day for the relevant period.

xiii

TABLE OF CONTENTS

OVERVIEW ...... 1 RISK FACTORS ...... 20 USE OF PROCEEDS ...... 38 CAPITALIZATION ...... 39 SELECTED FINANCIAL DATA ...... 40 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 44 BUSINESS DESCRIPTION ...... 96 REGULATION ...... 132 MANAGEMENT ...... 156 PRINCIPAL SHAREHOLDERS ...... 166 RELATED-PARTY TRANSACTIONS ...... 167 DESCRIPTION OF THE SECURITIES ...... 168 BOOK-ENTRY, DELIVERY AND FORM ...... 185 DESCRIPTION OF THE RECEIPTS AND THE DEPOSIT AGREEMENT ...... 191 CERTAIN TAX CONSIDERATIONS ...... 199 CERTAIN ERISA CONSIDERATIONS ...... 209 PLAN OF DISTRIBUTION ...... 212 GENERAL INFORMATION ...... 216 LEGAL MATTERS ...... 218 ANNEX A: GLOSSARY OF TERMS AND DEFINITIONS ...... A-1 ANNEX B: ACUPAY ITALIAN TAX COMPLIANCE AND RELIEF PROCEDURES ...... B-1

xiv

OVERVIEW

This overview highlights selected information about Enel and the Securities contained elsewhere in this Offering Circular. This overview does not contain all the information prospective investors should consider before deciding to purchase Securities. This overview should be read in conjunction with, and is qualified in its entirety by, the more detailed information included in this Offering Circular, including the Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements and the accompanying notes thereto. Prospective investors should read carefully the entire Offering Circular to understand Enel’s businesses and the tax and other considerations which are important to a prospective investor’s decision to invest in the Securities, including the risks discussed in the section entitled “Risk Factors.” Overview of Enel According to Enel’s estimates, the Group is the leading electricity operator in both Italy and Spain and one of the leading global operators in the fields of generation, distribution and sales of electricity. Moreover, according to Enel’s estimates, it is the largest Italian power company and Europe’s second largest listed utility by installed capacity. Enel has a presence in 40 countries on four continents with nearly 98 GW of net installed capacity and sells electricity and gas to approximately 60.5 million customers as of December 31, 2012. The Group had operational generation plants (thermal, hydroelectric, geothermal, nuclear and other plants) with a total net maximum electrical capacity of 97.8 GW as of December 31, 2012 and 97.3 GW as of December 31, 2011 and December 31, 2010, respectively. For the six months ended June 30, 2013, net electricity production was 138.2 TWh and distribution of electricity was 198.8 TWh. For the year ended December 31, 2012, net electricity production amounted to 295.8 TWh and distribution of electricity amounted to 413.9 TWh. For the year ended December 31, 2011, net electricity production amounted to 293.9 TWh and distribution of electricity amounted to 419.5 TWh. For the year ended December 31, 2010, net electricity production amounted to 290.2 TWh and distribution of electricity amounted to 431.6 TWh. The following table sets forth the Group’s key operating data as of and for the six months ended June 30, 2013 and as of and for the years ended December 31, 2012, 2011 and 2010.

Six months ended Year ended December 31, June 30, 2013 2012 2011 2010

Italy Abroad Total Italy Abroad Total Italy Abroad Total Italy Abroad Total

Net electric ity product ion (TWh) . 36.0 102.2 138.2 74.5 221.3 295.8 79.0 214.9 293.9 81.6 208.6 290.2 Net maxim um electric al capacit y (GW) N/A N/A N/A 39.9 57.9 97.8 39.9 57.4 97.3 40.5 56.8 97.3 Electricity convey ed through the grid (TWh) . 113.3 85.5 198.8 238.2 175.7 413.9 246.4 173.1 419.5 247.0 184.6 431.6 Electricity sold (TWh)( 1) ...... 45.8 100.6 146.4 102.3 214.5 316.8 104.2 207.6 311.8 113.4 195.6 309.0 Number of end- users of the 28.1 27.8 55.9 28.0 28.1 56.1 28.9 27.9 56.8 31.5 27.7 59.2

Six months ended Year ended December 31, June 30, 2013 2012 2011 2010

Italy Abroad Total Italy Abroad Total Italy Abroad Total Italy Abroad Total

electric busines s (millio ns) ......

Note: (1) Excluding sales to resellers.

According to Enel’s estimates, the Group is one of the principal international operators in the development and management of energy production, with a net maximum electrical capacity of 97.8 GW as of December 31, 2012. The Group also imports and sells natural gas in Italy, Spain and elsewhere. The Group sold approximately 4.9 billion cubic meters of gas worldwide in the six months ended June 30, 2013, 8.7 billion cubic meters of gas worldwide in 2012, 8.5 billion cubic meters of gas worldwide in 2011 and 8.9 billion cubic meters of gas worldwide in 2010. In the six months ended June 30, 2013, the Group’s total revenues were €40,157 million, and the net income attributable to shareholders of Enel was €1,680 million. In 2012, the Group’s total revenues were €84,889 million and the net income attributable to shareholders of Enel was €865 million, including the effect of a write-down of goodwill of €2,575 million mainly related to Endesa’s activities in Iberia. In 2011, the Group’s total revenues were €79,514 million, and the net income attributable to shareholders of Enel was €4,113 million. In 2010, the Group’s total revenues were €73,377 million, and the net income attributable to shareholders of Enel was €4,390 million. As of June 30, 2013, the Group employed 73,537 employees, of which 36,246 were employed in Italy and 37,291 were employed abroad. The Issuer is incorporated under the laws of Italy as a joint stock company (società per azioni). Its registered office is at Viale Regina Margherita 137, in Rome, and its main telephone number is +3906 83051. The Issuer is registered with the Italian Companies’ Register of the Chamber of Commerce of Rome under registration No. 00811720580. Pursuant to Article 3 of the Issuer’s articles of association, the Issuer shall remain in existence until December 31, 2100; however the Issuer’s corporate duration may be further extended by a shareholder resolution. The Issuer is the parent company of the Group. Strategy The strategic priorities of the Group for the upcoming five years are set out in the Group’s 2013-2017 business plan (the “Business Plan”) and include:  protecting margins and cash flow generation in mature markets;  increasing investments in the growth markets of Eastern Europe and Latin America, as well as in renewables;  strengthening the financial structure and optimizing asset portfolio;  progress with respect to the reorganization of the Group, also including minorities buy-out; and  continued focus on financial stability.

Overview of the Terms of the Securities

This overview of the Terms of the Securities must be read in conjunction with and are qualified in their entirety by reference to “Description of the Securities” and “Description of the Receipts and the Deposit Agreement” appearing elsewhere in this Offering Circular. References to “Conditions” are references to Conditions under the caption “Description of the Securities.” Capitalized terms used but not otherwise defined herein have the meaning ascribed to them under the caption “Description of the Securities”. Issuer ...... Enel-Società per Azioni

Securities Offered ...... $1,250,000,000 Capital Securities due September 24, 2073, in the form of Receipts

Beneficial interests in the Securities will be sold only to QIBs in reliance on Rule 144A, initially in the form of Receipts only.

X Receipts will be issued by the Receipt Issuer and will represent beneficial ownership interests in X Securities. X Securities may be held by any Second-level Bank. Interest paid in respect of X Receipts is not subject to the withholding of Italian substitute tax (presently 20.0%).

N Receipts will be issued by the Receipt Issuer and will represent beneficial ownership interests in N Securities. N Securities may only be held in Monte Titoli by the Receipt Issuer. Interest paid in respect of N Receipts is subject to the withholding of Italian substitute tax (presently 20.0%).

Stated Maturity Date ...... September 24, 2073

Interest...... The Securities will bear interest on their principal amount (a) from and including the Issue Date to but excluding the First Reset Date, at the rate of 8.750 percent per annum; (b) from and including the First Reset Date to but excluding the Maturity Date for each Reset Period, at the relevant five-year Swap Rate plus (A) in respect of the Reset Periods commencing on the First Reset Date, September 24, 2028, September 24, 2033 and September 24, 2038, 6.130 percent per annum; and (B) in respect of any other Reset Period, 6.880 percent per annum.

Interest Payment Dates ...... Unless the Issuer elects not to pay interest in accordance with the provisions described under “Description of the Securities — Interest Deferral,” the Securities will bear interest from the date of original issuance, and such interest will be payable semi- annually in arrears on March 24 and September 24 in each year commencing on March 24, 2014 (each an “Interest Payment Date”).

Interest Deferral ...... The Issuer may, at its sole discretion, elect to defer in whole, but not in part, any payment of interest accrued on the Securities in respect of any Interest Period by giving notice to the Trustee and the Paying Agent at least five, but not more than 30, Business Days prior to the relevant Interest Payment Date. If the Issuer makes such an election, it shall have no obligation to make such payment and any failure to pay shall not constitute a default by the Issuer or any other breach of obligations under the Securities or for any other purpose.

Any interest not paid on an Interest Payment Date and deferred in accordance with the provisions described under “Description of the Securities — Interest Deferral” shall so long as the same remains outstanding constitute “Arrears of Interest.” Any Arrears of Interest will remain outstanding until paid in full by the Issuer, but Arrears of Interest shall not itself bear interest.

Optional Payment of Arrears of Interest ...... The Issuer may pay outstanding Arrears of Interest, in whole (but not in part) at any time, upon giving not less than ten and not more than 15 Business Days’ notice to the Holders in accordance with “Description of the Securities — Notices” (which notice shall be irrevocable and will oblige the Issuer to pay the relevant Arrears of Interest on the payment date specified in such notice) and to the Trustee and the Principal Paying Agent at least five, but not more than 30, Business Days prior to the relevant due date for payment.

Mandatory Payment of Arrears of Interest ...... All (but not some only) of any outstanding Arrears of Interest in respect of all Securities for the time being outstanding shall become due and payable in full and shall be paid by the Issuer on the first occurring Mandatory Settlement Date.

“Mandatory Settlement Date” means the earliest of:

i. the fifth Business Day following the date on which a Mandatory Arrears of Interest Settlement Event occurs;

ii. following any deferred interest payment, on the next scheduled Interest Payment Date on which the Issuer does not elect to defer all of the interest accrued in respect of the relevant Interest Period;

iii. the date on which the Securities are redeemed (in whole) or repaid in accordance with the terms of the Indenture; and

iv. the date on which an order is made or a resolution is passed for the commencement of any Insolvency Proceedings in respect of the Issuer, or the date on which the Issuer takes any corporate action for the purposes of opening, or initiates or consents to, Insolvency Proceedings in respect of itself.

A “Mandatory Arrears of Interest Settlement Event” shall have occurred if:

(a) a dividend (either interim or final) or any other distribution or payment was validly resolved on, declared, paid or made in respect of any Junior Securities, except where such dividend, distribution or payment was contractually required to be declared, paid or made under the terms of such Junior Securities;

(b) a dividend (either interim or final) or any other distribution or payment was validly resolved on, declared, paid or made in respect of any Parity Securities, except where such dividend, distribution or payment was contractually required to be declared, paid or made under the terms of such Parity Securities;

(c) the Issuer or any Subsidiary has repurchased, purchased, redeemed or otherwise acquired any Junior Securities, except where (x) such repurchase, purchase, redemption or acquisition was undertaken in connection with the satisfaction by the Issuer or any Subsidiary of its respective obligations under (i) any share buy-back program existing at the Issue Date or (ii) any stock option plan or free share allocation plan reserved for directors, officers and/or employees of the Issuer or any associated hedging transaction or (y) such repurchase, purchase, redemption or acquisition is 4

contractually required to be made under the terms of such Junior Securities; or

(d) the Issuer or any Subsidiary has repurchased, purchased, redeemed or otherwise acquired any Parity Securities, except where (x) such repurchase, purchase, redemption or acquisition was undertaken in connection with the satisfaction by the Issuer or any Subsidiary of its respective obligations under (i) any share buy-back program existing at the Issue Date or (ii) any stock option plan or free share allocation plan reserved for directors, officers and/or employees of the Issuer or any associated hedging transaction or (y) such repurchase, purchase, redemption or acquisition is contractually required to be made under the terms of such Parity Securities or (z) such repurchase, purchase, redemption or acquisition is effected as a public tender offer or public exchange offer at a purchase price per security which is below its par value.

If a Mandatory Settlement Date does not occur prior to the calendar day which is the fifth anniversary of the Interest Payment Date on which the relevant deferred interest payment was first deferred, it is the intention, though not an obligation, of the Issuer to pay all outstanding Arrears of Interest (in whole but not in part) on the next following Interest Payment Date.

Purchases ...... The Issuer or any Subsidiary may at any time purchase Securities in any manner and at any price. Such Securities may be held, reissued, resold or, at the option of the Issuer, surrendered to the Paying Agent for cancellation.

Further Issuances ...... The Issuer may, without the consent of the Holders, create and issue additional securities (the “Additional Securities”) ranking equally with the Securities in all respects (or in all respects save for the first payment of interest thereon), including having the same CUSIP and/or ISIN, so that such Additional Securities shall be consolidated and form a single series with the Securities under the Indenture. Any such Additional Securities will have the same terms as to status, redemption or otherwise as the Securities.

Unless the context otherwise requires, in this “Overview of the Terms of the Securities” and in “Description of the Securities,” references to the “Securities” include the Securities and any Additional Securities issued.

Status of the Securities ...... The Securities constitute direct, unsecured and subordinated obligations of the Issuer and rank and will at all times rank pari passu without any preference among themselves and with Parity Securities and senior only to Junior Securities. The Securities constitute obbligazioni pursuant to Articles 2410 et seq. of the Italian Civil Code. The obligations of the Issuer in respect of the Securities are subordinated as described in “Description of the Securities — Status and Subordination — Subordination.”

Use of Proceeds ...... The Issuer expects that the net proceeds from the issuance of the Securities will be used for general corporate purposes, including investments. See “Use of Proceeds.”

Optional Redemption ...... The Issuer may redeem all of the Securities (but not some only) on any Reset Date, in each case at their principal amount together with any accrued interest up to (but excluding) the relevant Reset Date and any outstanding Arrears of Interest, on giving not less than 30 and not more than 60 calendar days’ prior notice to the Holders in accordance with “Description of the Securities — Notices.”

The Issuer may also redeem all (but not some only) of the Securities at any time at the applicable Early Redemption Price (as defined herein) upon the occurrence of an Accounting Event, a Rating Methodology Event, a Tax Deductibility Event or a Withholding Tax Event.

In the event that at least 90 percent of the aggregate principal amount of Securities issued on the Issue Date has been purchased by or on behalf of the Issuer or a Subsidiary and has been cancelled (a “Substantial Repurchase Event”), the Issuer may redeem the Securities in whole but not in part at any time, at the applicable Early Redemption Price.

The “Early Redemption Price” in respect of the Securities will be determined on the fourth Business Day prior to the relevant Early Redemption Date as follows:

(i) in the case of a Withholding Tax Event at any time, 100 percent of the principal amount of the Securities then outstanding; or

(ii) in the case of an Accounting Event, a Rating Methodology Event, a Substantial Repurchase Event or a Tax Deductibility Event, either:

(a) 101 percent of the principal amount of the Securities then outstanding if the Early Redemption Date is on or prior to the First Reset Date; or

(b) 100 percent of the principal amount of the Securities then outstanding if the Early Redemption Date is after the First Reset Date,

and in each case together with any accrued interest up to, but excluding, the relevant Early Redemption Date and any outstanding Arrears of Interest. See “Description of the Securities — Redemption.”

Intention Regarding Redemption and The following paragraph shall not form part of “Description of Repurchase of the Securities ...... the Securities” or the terms and conditions of the Securities set forth in the Indenture.

The Issuer intends (without thereby assuming a legal obligation) that it will redeem or repurchase the Securities only to the extent that the part of the aggregate principal amount of the Securities to be redeemed or repurchased which was assigned “equity credit” (or such similar nomenclature used by S&P from time to time) at the time of the issuance of the 6

Securities does not exceed such part of the net proceeds received by the Issuer or any Subsidiary during the 360-day period prior to the date of such redemption or repurchase from the sale or issuance of securities by the Issuer or such Subsidiary to third-party purchasers (other than Group entities of the Issuer) which is assigned by S&P“equity credit” (or such similar nomenclature used by S&P from time to time), at the time of sale or issuance of such securities (but taking into account any changes in hybrid capital methodology or another relevant methodology or the interpretation thereof since the issuance of the Securities), unless: (i) the rating assigned by S&P to the Issuer is at least “BBB” (or such similar nomenclature then used by S&P) and the Issuer is of the view that such rating would not fall below this level as a result of such redemption or repurchase, or (ii) in the case of a repurchase, such repurchase is of less than (a) ten percent of the aggregate principal amount of the Securities originally issued in any period of 12 consecutive months or (b) 25 percent of the aggregate principal amount of the Securities originally issued in any period of ten consecutive years, or (iii) the Securities are redeemed pursuant to a Tax Deductibility Event or a Withholding Tax Event or an Accounting Event or a Rating Methodology Event which results from an amendment, clarification or change in the “equity credit” criteria by S&P, or (iv) the Securities are not assigned an “equity credit” by S&P (or such similar nomenclature then used by S&P) at the time of such redemption or repurchase, or (v) such redemption or repurchase occurs on or after the Reset Date falling on September 24, 2043.

Events of Default ...... If either:

(i) in respect of the Securities, default is made by the Issuer in the payment of any interest which is due and payable in respect of the Securities and the default continues for a period of 30 days or more; or

(ii) a judgment is given for the voluntary or judicial winding up, dissolution or liquidation of the Issuer or restructuring of the Issuer’s liabilities pursuant to any Insolvency Proceedings or under any applicable bankruptcy or insolvency law or if the Issuer is liquidated for any other reason (other than under certain circumstances),

the Issuer shall, without notice from the Trustee, be deemed to be in default under the Indenture and the Securities and in such case, (i) the Securities shall immediately become due and payable at their principal amount together with any accrued and unpaid interest up to but excluding the date on which the Securities become so due and payable and any outstanding Arrears of Interest and (ii) the Trustee at its sole discretion may (subject to its being indemnified and/or secured and/or prefunded to its satisfaction) institute steps in order to obtain a judgment against the Issuer for any amounts due in respect of the Securities, including the institution of Insolvency Proceedings against the Issuer or the filing of a proof of claim and participation in any Insolvency Proceedings or proceedings

for the liquidation, dissolution or winding-up of the Issuer.

If default is made by the Issuer in the payment of any principal which has become due and payable in respect of the Securities in accordance with the Indenture and the default continues for a period of ten days or more, the Trustee at its sole discretion may (subject to its being indemnified and/or secured and/or prefunded to its satisfaction), institute steps in order to obtain a judgment against the Issuer for any amounts due in respect of the Securities, including the institution of Insolvency Proceedings against the Issuer or the filing of a proof of claim and participation in any Insolvency Proceedings or proceedings for the liquidation, dissolution or winding-up of the Issuer.

Meetings of Holders ...... The Indenture contains provisions for convening meetings of the Holders to consider any matter affecting their interests. These provisions permit defined majorities to bind all Holders, whether or not they are present at the meeting. See “Description of the Securities — Meetings of Holders”.

Amendment, Supplement and Waiver ...... Subject to applicable Italian law, including the provisions described under “Description of the Securities — Meetings of Holders”, the Indenture and the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and, subject to certain exceptions, any existing Event of Default or compliance with any provisions thereof may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities).

However, subject to applicable Italian law, including the provisions described under “Description of the Securities — Meetings of Holders”, without the consent of Holders of at least 75 percent of the aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities), no amendment, supplement or waiver may, among other things: (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement, or waiver; (ii) reduce the stated rate, or extend the stated time for payment, of interest on any Security; (iii) reduce the principal, or extend the maturity date, of any Security; (iv) reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed, in each case as described in ‘‘Description of the Securities — Redemption”; (v) make any Security payable in a currency other than U.S. dollars; (vi) impair the right of any Holder to receive payment of, premium, if any, principal of or interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities; (vii) waive an Event of Default in the payment of principal of, or interest, Additional Amounts or premium, if any, on, the Securities; (viii) make any change in the provisions of the Securities or the Indenture relating to Additional Amounts that adversely affects the rights of any Holder of such Securities in any material respect or 8

amends the terms of such Securities in a way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation to withhold or deduct Taxes so described thereunder unless the Issuer agrees to pay Additional Amounts, if any, in respect thereof; or (ix) make any change in the amendment or waiver provisions of the Indenture which require each Holder’s consent.

Notwithstanding the foregoing, without the consent of any Holder, the Issuer and the Trustee may amend the Indenture and the Securities in the circumstances and subject to the conditions described in “Description of the Securities — Amendment and Waivers.”

Substitution ...... The Trustee may, without the consent of the Holders, agree with the Issuer to the substitution in place of the Issuer (or of any previous substitute as provided for in the Indenture) as the principal debtor under the Securities and the Indenture of another company, in the circumstances and subject to the conditions described in “Description of the Securities — Substitution of the Issuer.”

Transfer and Selling Restrictions ...... There are restrictions on the offer, sale and transfer of the Securities in the United States and such other restrictions as may be required in connection with the offering and sale of the Securities. See “Plan of Distribution.”

Taxation; Additional Amounts ...... All payments made by the Issuer under, or with respect to, the Securities will be made free and clear of and without withholding or deduction for, or on account of any present or future Taxes imposed, levied, collected or assessed by or on behalf of any Tax Jurisdiction unless such withholding or deduction of the Taxes is required by law. In such event, the Issuer will pay (subject as provided in “Description of the Securities — Payment of Additional Amounts”) such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received by each Holder and Beneficial Owner of the Securities, as the case may be, after such withholding or deduction will equal the amounts which would have been received in respect of such payments in the absence of such withholding or deduction.

Notwithstanding the above, no Additional Amounts will be payable in relation to any payment in respect of any Securities:

(a) presented for payment: (i) in any Tax Jurisdiction; or (ii) by or on behalf of a Holder who is liable for such Taxes in respect of such Security by reason of his having some connection with any Tax Jurisdiction other than the mere holding of such Security; or (iii) by or on behalf of a Holder who would be able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent in a member state of the European Union (“Member State”); or (iv) more than 30 days after the Relevant Date except to the extent that a Holder would have been entitled to an Additional Amount on presenting the same for payment on such thirtieth day; or (v) by or on behalf of a Holder if such withholding or deduction may be 9

avoided by such Holder producing a declaration or any other statement including, but not limited to, a declaration of residence or non-residence, but fails to do so; or

(b) for or on account of Italian substitute tax pursuant to Decree No. 239 or, for the avoidance of doubt, Italian Legislative Decree No. 461 of November 21, 1997, in each case as amended and/or supplemented as at the Issue Date and in all circumstances in which the procedures set forth in Decree No. 239 in order to benefit from a tax exemption have not been met or complied with or, in respect of interests in the Securities held through an X Global Receipt, in the event that a DTC Participant of a Beneficial Owner does not comply with the Tax Certification Procedures and Italian substitute tax is applied in respect of the payment of interest or principal in respect of the interests in the Securities held by all Beneficial Owners through such DTC Participant on an Interest Payment Date as provided in the Tax Certification Procedures; or

(c) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26th-27th November 2000; or

(d) where such withholding or deduction is required to be made pursuant to Law Decree 30 September 1983, No. 512 converted into law with amendments by Law 25 November 1983, No. 649; or

(e) where such withholding is required by application of Sections 1471 – 1474 of the U.S. Internal Revenue Code of 1986, as amended, including any administrative regulations or intergovernmental agreements relating thereto; or

(f) in the event of payment by the Issuer to a non-Italian resident Holder, to the extent that the Holder is resident in a country which does not allow for a satisfactory exchange of information with the Italian authorities.

Beneficial Owner Certification Requirements; Italian law requires participants in Monte Titoli, acting as Italian Substitute Tax ...... Second-level Banks, to obtain from each eligible Beneficial Owner (as referred to in Decree No. 239) a certification of its eligibility to receive interest or principal in respect of the Securities free from Italian substitute tax upon the Beneficial Owner’s first purchase of a beneficial interest in the Securities, (either at the time of the issuance of Securities or, if purchased thereafter, upon a purchase of Securities in the secondary market), and to make that certification available to the Italian tax authorities. There are no ongoing certification requirements for investors following the initial certification of eligibility, subject, in the case of Securities represented by Receipts, to 10 compliance with the Tax Certification Procedures by it and its Financial Intermediaries. Enel has arranged certain procedures with Acupay and Monte Titoli to facilitate the collection of certifications from Beneficial Owners of Receipts through the relevant Financial Intermediaries. In connection with such Tax Certification Procedures applicable to the Receipts, Monte Titoli will, as Italian Tax Representative (as such term is defined in Decree No. 239), perform the functions of Second- level Bank in relation to all of the Securities represented by Receipts.

Italian substitute tax at the then-applicable rate, currently 20.0%, will be withheld from any payment of interest and other amounts payable in respect of the Securities to any Beneficial Owner that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of Securities (including in the case of Receipts, because of any failure of the Tax Certification Procedures, or the Beneficial Owner or the applicable Financial Intermediaries to comply with the Tax Certification Procedures). The Issuer will not pay any additional amounts in respect of any such withholding. In addition, a Beneficial Owner that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the Receipts or does not comply (either directly or through, or because of, any Financial Intermediary through whom it holds the Receipts) with the Tax Certification Procedures will be permitted to transfer its beneficial interest in the Receipts only upon compliance with the applicable transfer and exchange procedures described in the Tax Certification Procedures, including, without limitation, payment of the Italian substitute tax on any interest, including any original issue discount, accrued but not yet paid until the settlement date of a prospective transfer. For more information on these certification requirements and Italian substitute tax under Italian tax laws and on this restriction on transfer by certain investors, see “Important Italian Substitute Tax Requirements and Information in Respect of the Tax Certification Procedures,” “Book-Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures” and “Certain Tax Considerations — Italian Taxation.”

In order to qualify as eligible to receive interest free from Italian substitute tax, among other things, Beneficial Owners must be resident, for tax purposes, in a country which allows for a satisfactory exchange of information with Italy (the “White List States”). Subject to certain limited exceptions, such as for Central Banks and supranational bodies established in accordance with international agreements in force in Italy (which are accorded exempt status irrespective of the nation in which they are situated), this residency requirement applies to all ultimate beneficial owners of Securities, including ultimate beneficiaries of interest payments under the Securities holding via sub-accounts to which interests in the Securities may be allocated upon purchase or thereafter. As of September 1, 2013, the White List nations include the following states:

Albania Macedonia Algeria Malta Argentina Mauritius Australia Mexico Austria Morocco Bangladesh Netherlands Belarus New Zealand Belgium Norway Brazil Pakistan Bulgaria Philippines Canada Poland China Portugal Côte d’Ivoire Romania Croatia Russian Federation Cyprus Singapore Czech Republic Slovak Republic Denmark Slovenia Ecuador South Africa Egypt South Korea Estonia Spain Finland Sri Lanka France Sweden Germany Tanzania Greece Thailand Hungary Trinidad and Tobago Iceland Tunisia India Turkey Indonesia Ukraine Ireland United Arab Emirates Israel United Kingdom Japan United States Kazakhstan Venezuela Kuwait Vietnam Latvia Yugoslavia(1) Lithuania Zambia Luxemburg ______

(1) (PLEASE NOTE: the Italian tax administration has not clarified whether the states derived from the former Yugoslavia are to be treated as being on the White List. Acupay will not treat such states as White Listed until this point is clarified to Acupay’s satisfaction.)

By investing in the Receipts, Beneficial Owners acknowledge and agree to become subject to the Tax Certification Procedures. The Tax Certification Procedures may be revised from time to time, among other reasons, to reflect a change in applicable Italian law, regulation, ruling or interpretation thereof or to comply with requests of supervisory authorities, including in the event that new regulations setting forth the procedural rules for complying with the provisions of Italian Decree No. 239, as amended, or equivalent law are promulgated (see “Certain Tax Considerations — Italian taxation”).

Should a Beneficial Owner of the Receipts otherwise entitled to an exemption suffer the application of substitute tax as a consequence of the Tax Certification Procedures no longer being in place or because of a failure by such Beneficial Owner or a Financial Intermediary through whom it holds the Receipts to comply with such procedures, such Beneficial Owner may request a refund of the substitute tax so applied directly from the Italian tax authorities within 48 months from the application of the tax. See “Annex B — Acupay Italian Tax Compliance and Relief Procedures — Article III. Procedure for Direct

Refund from Italian Tax Authorities.” Beneficial Owners of the Securities should consult their tax advisors on the procedures required under Italian tax law to recoup the substitute tax in these circumstances. None of the Issuer, the Managers, any of the Issuer’s agents, Monte Titoli, the Receipt Issuer, DTC or Acupay assumes any responsibility therefor.

Form and Denomination ...... The Securities will be issued in fully registered form and only in denominations of U.S. $200,000 and in integral multiples of U.S. $1,000 in excess thereof.

Clearance and Settlement ...... The Securities will be issued in dematerialized form in Monte Titoli and will be evidenced by one or more Global Securities registered in the name of Monte Titoli, as operator of the Italian central depositary and securities clearing system.

Initially, all of the book-entry interests in the Global Securities will be credited to the third-party securities account in Monte Titoli of Citibank, N.A., London Branch, as Receipt Issuer (the “Receipt Issuer”). The Receipt Issuer will initially hold all of the book-entry interests in the Global Securities and will issue and deliver Global Receipts evidencing the book-entry interests in the Global Securities to DTC, the U.S. central depositary and securities clearing system. The Global Receipts will be registered in the name of Cede & Co., as DTC’s nominee, for the benefit of DTC Participants. Transfers of beneficial interests in the Global Receipts will be shown on and will be effected only through, records maintained in book-entry form by DTC or any DTC Participant or Financial Intermediary holding an interest through DTC.

After the initial placement of the Receipts, holders of Receipts that are QIBs will have the right, subject to the terms of the Deposit Agreement for the Receipts and the Tax Certification Procedures, to request the conversion of the Receipts into the corresponding Securities to be held in accounts at Second- level Banks at Monte Titoli by QIBs. QIBs will, thereafter, be able, subject to the terms of the Deposit Agreement and the Tax Certification Procedures, to convert their Securities into corresponding Receipts to be held in an account at DTC.

Receipts will be issued to Beneficial Owners that are eligible to receive interest in respect of the Securities free of the Italian substitute tax and that are in compliance with the Tax Certification Procedures in the form of X Receipts, which are not subject to the withholding of the Italian substitute tax and represent interests in a corresponding amount of X Securities.

Receipts will be issued to Beneficial Owners that are not eligible to receive interest in respect of the Securities free of the Italian substitute tax in the form of N Receipts, which are subject to the withholding of the Italian substitute tax and represent interests in a corresponding amount of N Securities.

X Receipts are subject to mandatory exchange into N Receipts, upon the terms of the Deposit Agreement and the Tax Certification Procedures, in the event the Beneficial Owner thereof (i) is not eligible to receive payments of interest in 13 respect of the X Receipts free of Italian substitute tax, (ii) fails to submit the applicable self-certification forms, or (iii) whose Financial Intermediary fails to supply correct beneficial owner information in connection with the settlement of purchases or sales of such Receipts. See “Book-Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures” and “Description of the Receipts and the Deposit Agreement — Mandatory Exchange of X Receipts for N Receipts.”

Beneficial Owners of N Receipts will be able to transfer their interests in the N Receipts to a QIB in the form of N Receipts only upon delivery by the transferor of a valid N Receipt transfer request to Acupay and payment of the applicable Italian substitute tax to Monte Titoli, subject in each case to the terms the Deposit Agreement and the Tax Certification Procedures. See “Book-Entry, Delivery and Form — Transfer of interests in N Receipts to Non-Eligible Beneficial Owners” and “Description of the Receipts and the Deposit Agreement — Transfer of N Receipts to Non-Eligible Beneficial Owners in the form of N Receipts.”

Beneficial Owners of N Receipts will be able to transfer their interests in the N Receipts to a QIB in the form of X Receipts only upon delivery by (i) the transferor of a valid N Receipt transfer request to Acupay and payment of the applicable Italian substitute tax to Monte Titoli, and (ii) the transferee of a valid self-certification (to the effect that the transferee is eligible to receive interest free of Italian substitute tax), subject in each case to the terms of the Deposit Agreement and the Tax Certification Procedures. See “Book-Entry, Delivery and Form — Transfer of interests in N receipts to Non-Eligible Beneficial Owners” and “Description of the Receipts and the Deposit Agreement — Transfer of N Receipts to Eligible Beneficial Owners in the form of X Receipts.”

Beneficial Owners of X Receipts will be able to transfer their interests in the X Receipts to a QIB in the form of X Receipts only upon delivery by (i) the transferor of a transfer communication to Acupay, and (ii) the transferee of a valid self-certification (to the effect that the transferee is eligible to receive interest free of Italian substitute tax), subject in each case to the terms the Deposit Agreement and the Tax Certification Procedures. (See “Description of the Receipts and the Deposit Agreement — Transfer of X Receipts to Eligible Beneficial Owners in the form of X Receipts.”

Beneficial Owners of X Receipts will be able to transfer their interests in the X Receipts to a QIB in the form of N Receipts only upon delivery by the transferor of a transfer communication to Acupay, subject in each case to the terms the Deposit Agreement and the Tax Certification Procedures. See “Description of the Receipts and the Deposit Agreement — Exchange of X Receipts for N Receipts.”

It is expected that the Receipt Issuer will close the books to the exchange of Receipts into Securities, and vice versa, and the transfer of N Receipts into X Receipts, and vice versa, for the period between the interest payment record date and the related 14

interest payment date.

Definitive Registered Securities (as defined herein) or Definitive Registered Receipts (as defined herein) will be issued in exchange for interests in Global Securities or Global Receipts, respectively, only under the limited circumstances set out under “Book-Entry, Delivery and Form.” Neither Definitive Registered Securities nor Definitive Registered Receipts issued will be eligible for the tax relief services provided pursuant to the TCA Agreement.

For more information, see “Book-Entry, Delivery and Form.”

Governing Law ...... The Indenture in respect of the Securities, the Securities and any non-contractual obligations arising out of or in connection with the Indenture and the Securities are governed by, and shall be construed in accordance with, the laws of the State of New York, except for the provisions of the Indenture concerning status and subordination of the Securities, which shall each be governed by Italian law. The provisions of the Indenture concerning the meeting of Holders and the appointment of a joint representative of Holders (a rappresentante commune) in respect of the Securities are subject to compliance with Italian law.

The Deposit Agreement, the Receipts and the non-contractual obligations arising out of or in connection with the Deposit Agreement and the Receipts are governed by, and shall be construed in accordance with, the laws of the State of New York.

Trustee ...... Citibank, N.A., London Branch

Receipt Issuer ...... Citibank, N.A., London Branch

Listing ...... This Offering Circular has been approved by the Central Bank, as competent authority under the Prospectus Directive, as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange for the Securities to be admitted to the Official List and trading on its regulated market.

Security Codes ...... X Securities: ISIN: IT0004961808

N Securities: ISIN: IT0004961816

X Receipts: CUSIP: 29265W AA6 ISIN: US29265WAA62

N Receipts: CUSIP: 29265W AB4 ISIN: US29265WAB46

Risk Factors ...... Investing in the Securities and the Receipts involves substantial risks. In evaluating an investment in the Securities and the Receipts, you should carefully consider all of the information provided in this Offering Circular and, in particular, the specific factors set out under “Risk Factors” beginning on page 20.

Summary Financial Information

The following summary financial information should be read in conjunction with and is qualified in its entirety by reference to the Audited Consolidated Financial Statements and Unaudited Condensed Interim Consolidated Financial Statements and the accompanying notes thereto included in this Offering Circular. See also “Presentation of Financial and Other Information,” “Risk Factors” and “Capitalization.” With the exception of certain non-IFRS financial measures discussed in “Presentation of Financial and Other Information,” the Group’s financial information as of and for the years ended December 31, 2012, 2011 and 2010 and as of and for the six months ended June 30, 2013 and 2012, included in the following tables, has been derived from the Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements. Interim results for the six months ended June 30, 2013 are not necessarily indicative of the results of operations that may be expected for any other interim period in 2013 or for the full year. The following tables reflect certain restatements of the Issuer’s comparative figures as of and for the years ended December 31, 2012, 2011 and 2010 and as of and for the six months ended June 30, 2012. See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.” Income statement data The following table sets forth the Group’s summary consolidated income statement data for the years ended December 31, 2012, 2011 (as restated), 2011 and 2010, and for the six-month periods ended June 30, 2013, 2012 (as restated) and 2012. The summary consolidated income statement data for the years ended December 31, 2012, 2011 (restated), 2011 and 2010 does not reflect the application of the adoption of “IAS 19R – Employee Benefits.” Further, the summary consolidated income statement data for the years ended December 31, 2011 and 2010 does not reflect the application of the new accounting policy for white certificates (EECs). See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.”

Six months ended June 30, Year ended December 31,

2012 2011 2013 (restated)(1) 2012 2012 (restated)(2) 2011 2010

(€ million) Revenues ...... 40,157 40,692 40,692 84,889 79,514 79,514 73,377 Costs ...... 34,734 35,403 35,447 77,192 68,508 68,420 62,399 Net income/charges from commodity risk management ...... (255) 96 96 38 272 272 280 Operating income ...... 5,168 5,385 5,341 7,735 11,278 11,366 11,258 Financial income ...... 1,446 1,497 1,497 2,272 2,693 2,693 2,576 Financial expense ...... 2,713 2,998 2,998 5,275 5,717 5,717 5,774 Share of income/(expense) from equity investments accounted for using the equity method ...... 55 45 45 88 96 96 14 Income before taxes ...... 3,956 3,929 3,885 4,820 8,350 8,438 8,074 Income taxes ...... 1,473 1,515 1,493 2,745 3,027 3,080 2,401 Income from continuing operations 2,483 2,414 2,392 2,075 5,323 5,358 5,673 Net income for the year/period (shareholders of the Parent and minority interests) ...... 2,483 2,414 2,392 2,075 5,323 5,358 5,673 Attributable to the shareholders of the Parent ...... 1,680 1,835 1,821 865 4,113 4,148 4,390 Attributable to minority interests ...... 803 579 571 1,210 1,210 1,210 1,283 Earnings per share (Euro) ...... 0.18 0.20 0.19 0.09 0.44 0.44 0.47

______

(1) Restated to reflect the retrospective effect of the adoption of “IAS 19R – Employee Benefits.” See Note 3 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. (2) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

Balance sheet data The following table sets forth the Group’s summary consolidated balance sheet data as of December 31, 2012 (as restated), 2012, 2011 (as restated), 2011, 2010 (as restated) and 2010, and as of June 30, 2013. The summary consolidated balance sheet data as of December 31, 2012, 2011 (restated), 2011, 2010 (restated) and 2010 does not reflect the application of the adoption of “IAS 19R – Employee Benefits.” The impact of IAS 19R has been reflected in the summary consolidated balance sheet data as of June 30, 2013 and December 31, 2012 (restated). Further, the summary consolidated balance sheet data as of December 31, 2011, 2010 (restated) and 2010 does not reflect the application of the new accounting policy for white certificates (EECs). Finally, in 2013, Enel completed the definitive allocation of the purchase prices of a number of business combinations carried out in 2012, resulting in a restatement of the consolidated balance sheet as of December 31, 2012 (restated) to reflect the fair value adjustments of the assets acquired and liabilities assumed. See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.”

Year ended December 31, As of June 30, 2012 2011 2010 2013 (restated)(1) 2012 (restated)(2) 2011 (restated)(3) 2010

(€ million) Non-current assets ...... 131,809 133,555 133,117 133,924 133,839 130,787 130,277 Current assets ...... 37,314 38,222 38,222 35,586 35,585 36,157 36,157 Assets held for sale ...... 233 317 317 381 381 1,618 1,618

Total assets ...... 169,356 172,094 171,656 169,891 169,805 168,562 168,052

Equity attributable to the shareholders of the Parent ...... 35,192 35,775 36,771 38,650 38,790 37,989 37,861 Equity attributable to minority interests ...... 17,530 16,312 16,387 15,650 15,650 15,877 15,684

Total Shareholders’ Equity ...... 52,722 52,087 53,158 54,300 54,440 53,866 53,545

Non-current liabilities ...... 81,926 84,636 83,127 74,885 74,659 79,706 79,517 Current liabilities ...... 34,686 35,363 35,363 40,648 40,648 33,992 33,992 Liabilities held for sale ..... 22 8 8 58 58 998 998

Total Liabilities ...... 116,634 120,007 118,498 115,591 115,365 114,696 114,507

Total liabilities and shareholders’ equity ... 169,356 172,094 171,656 169,891 169,805 168,562 168,052

______(1) Restated to reflect the retrospective effect of the adoption of “IAS 19R – Employee Benefits” and the completion of the definitive allocation of the purchase prices of a number of business combinations carried out in 2012. See Note 3 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. (2) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements. (3) Restated to reflect the determination of the final fair value of assets and liabilities in respect of the SE Hydropower business combination. See Note 4 to the 2011 Audited Consolidated Financial Statements.

Statement of cash flow data The following table sets forth the Group’s summary consolidated cash-flow statement data for the years ended December 31, 2012, 2011 (as restated) and 2010, and for the six-month periods ended June 30, 2013 and 2012 (as restated). Such restatements did not affect data included in net financial debt calculations. The summary consolidated cash flow statement data for the years ended December 31, 2012, 2011 (restated) and 2010 does not reflect the application of the adoption of “IAS 19R – Employee Benefits.” Further, the summary consolidated cash flow statement data for the year ended December 31, 2010 does not reflect the application of the new accounting policy for white certificates (EECs).

Six months ended June 30, Year ended December 31,

2012 2011 2013 (restated)(1) 2012 (restated)(2) 2010

(€ million) Cash flow from operating activities ...... 610 2,665 10,415 11,713 11,725 Cash flow from (investing)/disinvesting activities ...... (2,393) (2,741) (6,588) (7,400) (4,910) Cash flow from financing activities ...... (2,277) 1,878 (995) (2,509) (5,976) Impact of exchange rate fluctuations on cash and cash equivalents ...... (129) 36 29 (74) 214

Increase/(Decrease) in cash and cash equivalents ...... (4,189) 1,838 2,861 1,730 1,053

Other financial information and indicators The following table sets forth certain non-IFRS information used by Enel’s management to monitor and evaluate the economic and financial performance of the Group. These indicators, gross operating margin (EBITDA) and net financial debt, are not recognized as accounting standards within the IFRS adopted by the European Union, and therefore must not be considered as alternatives to any measures of performance under IFRS. See “Presentation of Financial and Other Information — Non-IFRS financial measures.” Investors should not place undue reliance on these non-IFRS measures and should not consider either of these measures to be indicative of the Group’s historical operating results or financial condition; nor are they meant to be predictive of future results. Since companies generally do not calculate these measures in an identical manner, Enel’s measures may not be consistent with similar measures used by other companies. For this reason also, investors should not place undue reliance on non-IFRS financial measures.

Six months Year ended December 31, ended June 30, 2011 2013 2012 (restated) 2011 2010

(€ million) Gross operating margin (EBITDA) ...... 8,293 16,738 17,605 17,717 17,480 Net Financial Debt ...... 44,515 42,948 44,629 44,629 44,924

The following tables demonstrate the methodology used by the Group to determine its gross operating margin (EBITDA) and net financial debt. Gross operating margin

Six months ended June 30, Year ended December 31,

2012 2011 2013 (restated) 2012 2012 (restated) 2011 2010

(€ million) Operating income ...... 5,168 5,385 5,341 7,735 11,278 11,366 11,258 Plus: Depreciation, amortization and impairment losses ...... 3,125 2,930 2,941 9,003 6,327 6,351 6,222 Gross operating margin (EBITDA) ..... 8,293 8,315 8,282 16,738 17,605 17,717 17,480

Net financial debt

As of Year ended December 31, June 30, 2013 2012 2011 2010

(€ million)

Long-term debt: Long-term debt ...... 54,077 55,959 48,703 52,440 Long-term financial receivables and securities ...... (3,695) (3,576) (3,576) (2,567) Net long-term debt ...... 50,382 52,383 45,127 49,873

Short-term debt: Short-term debt ...... 4,930 3,970 4,799 8,209 Short-term portion of long term debt ...... 3,333 4,057 9,672 2,999 Short-term financial receivables and securities ...... (8,416) (7,571) (7,954) (10,993) Cash and cash equivalents ...... (5,714) (9,891) (7,015) (5,164) Net short-term financial debt ...... (5,867) (9,435) (498) (4,949)

NET FINANCIAL DEBT ...... 44,515 42,948 44,629 44,924

Financial debt of “Assets held for sale” ...... 13 (10) (1) 636

RISK FACTORS

The Issuer believes that the following factors may affect its ability to fulfill its obligations under the Securities. Most of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. In addition, factors that are material for the purpose of assessing the market risks associated with the Securities are also described below. The Issuer believes that the factors described below represent the principal risks inherent in investing in the Securities, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with any Securities may occur for other reasons which may not be considered significant risks by the Issuer based on information currently available to the Issuer and which it may not currently be able to anticipate. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular and reach their own views, based upon their own judgment and upon advice from such financial, legal and tax advisers as they have deemed necessary, prior to making any investment decision. Words and expressions defined in “Description of the Securities” below or elsewhere in this Offering Circular have the same meanings in this section. Risks related to the Group The Group is burdened by significant indebtedness, which it must generate sufficient cash flow to service As of December 31, 2012, the Group’s net financial debt was equal to €42,948 million (as compared to €44,629 million as of December 31, 2011 and €44,924 million as of December 31, 2010). The Group’s net financial debt calculation differs from the net financial debt standard used by the European Securities and Markets Authority (“ESMA”) in that Enel calculates net financial debt net of long-term financial receivables and securities, which were equal to €3,576 million as of December 31, 2012 and 2011 and €2,567 million as of December 31, 2010. As of December 31, 2012, the repayment schedules of the Group’s long-term debt provide for the repayment of €4,057 million in 2013 and €4,668 million in 2014. The Group’s short-term financial debt (including current maturities of long-term debt) amounted to €8,027 million as of December 31, 2012. Any failure by the Group to make any of its scheduled debt repayments, or to reschedule such debt on favorable terms, would have a material adverse effect on the Group, its business prospects, its financial condition and its results of operations.

The credit agreements and bond agreements that the Group has entered into contain restrictive covenants that limit its operations The contracts related to the long-term financial indebtedness of the Group contain covenants that must be complied with by the borrowers (Enel, Endesa and the other companies of the Group) and, in certain instances, by Enel, as guarantor. The failure to comply with any of them could constitute a default, which could have a material adverse effect upon the Group, its business prospects, its financial condition or its results of operations. In addition, covenants such as “negative- pledge” clauses, “material change” clauses and covenants requiring the maintenance of particular financial ratios or credit ratings, constrain the Group’s ability to acquire or dispose of assets or incur new debt. Under the “gearing/financial leverage” clause contained in, inter alia, (i) the €8 billion Rollover Facility Agreement entered into on April 16, 2009 (the “Rollover Facility Agreement”) and (ii) the €3.2 billion term loan facility agreement entered into on February 20, 2012 (the “Term Facility Agreement”), the Group’s Consolidated Total Net Borrowings (as defined in the above agreements) may not exceed 4.5 times the amount of the Group’s Consolidated EBITDA (as defined in the above agreements) for the preceding 12 months. Furthermore, pursuant to the Rollover Facility Agreement, the Group will be required to additionally maintain consolidated EBITDA equal to at least four times the amount of the net interest payable (as defined in the above agreements) by the Group at each measurement period. Such ratios are tested for compliance semi-annually.

A significant portion of the Group’s indebtedness is subject to floating interest rates, thus subjecting the Group to the risk of adverse interest rate fluctuations As of December 31, 2012, 17 percent of the Group’s net financial debt (Enel method) was subject to variable interest rates. The Group has in place risk management policies that provide for the use of derivative instruments to minimize the Group’s interest rate risk. However, even taking all such hedging instruments into account, as of December 31, 2012, three percent of the Group’s net financial debt (Enel method) remained fully exposed to interest rate fluctuations. Any significant increase in interest rates could therefore lead to a material increase in the Group’s debt service expenses, which would have a material adverse effect on the Group, its business prospects, its financial condition and its results of operations.

Enel’s ability to access credit and bond markets on acceptable terms is in part dependent on its credit ratings, which have come under scrutiny due to its level of debt Enel’s long-term debt is currently rated “BBB” (stable outlook) by Standard & Poor’s Credit Market Services Italy s.r.l. (“Standard & Poor’s”), “BBB+” (rating watch negative) by Fitch Ratings Ltd. (“Fitch”) and “Baa2” (negative outlook) by 20

Moody’s Investors Service Ltd. (“Moody’s”). The credit ratings included or referred to in this Offering Circular will be treated for the purposes of Regulation (EC) No 1060/2009 (as amended) on credit rating agencies (the “CRA Regulation”) as having been issued by Standard & Poor’s, Moody’s and Fitch upon registration pursuant to the CRA Regulation. Standard & Poor’s, Moody’s and Fitch are established in the European Union and registered under the CRA Regulation. Each of Moody’s, Standard & Poor’s and Fitch is included in the list of registered credit rating agencies published by the European Securities and Markets Authority on its website (http://www.esma.europa.eu/page/List-registered-and-certified-CRAs ) in accordance with the CRA Regulation. Each of these ratings is near the low-end of the respective rating agency’s scale of investment-grade ratings. Enel’s ability to access the capital markets and other forms of financing (or refinancing), and the costs connected with such activities, depend on the credit ratings assigned to the Issuer. Any worsening of credit ratings could limit Enel’s ability to access capital markets and other forms of financing (or refinancing), or increase the costs related thereto, with related adverse effects on the Issuer’s and the Group’s business prospects, financial condition and results of operations. Certain credit agreements including, inter alia, the Rollover Facility Agreement and the Term Facility Agreement, entered into by companies belonging to the Group, state that the overall pricing applicable to the loans thereunder may vary according to Enel’s credit rating by Standard & Poor’s or Moody’s. Any downgrade could thus affect the amount of interest payable by Enel. In addition, the possibility of access to the capital markets, to other forms of financing and the associated costs is also dependent, amongst other things, on the rating assigned to the Group. Therefore any reduction of such ratings could limit Enel’s access to the capital markets, and could increase the cost of borrowing and/or the refinancing of the existing debt. Any downgrade could therefore have adverse effects on the Issuer’s and the Group’s business prospects, financial condition and results of operations. Certain financial data included herein has been restated This Offering Circular includes financial, economic and asset information of the Group as of and for the six months ended June 30, 2013 and 2012 and as of and for the years ended December 31, 2012, 2011 and 2010. Certain information from the financial statements as of December 31, 2010, which were included in the 2011 Audited Consolidated Financial Statements, contain restatements relating to the SE Hydropower business combination by Enel Produzione, which was carried out on June 1, 2010. The effects of the consideration allocation, transferred at the fair value of the acquired assets, debts and potential debts, were retroactively represented as from June 1, 2010, with the consequence of a restatement of the comparative financial information as of December 31, 2010 presented in the 2011 Audited Consolidated Financial Statements. During 2012, the Group adopted a new method of accounting for white certificates (EECs). The new approach treats energy efficiency requirements as a system charge and aims to achieve energy saving objectives. The changes in the accounting treatment of white certificates have been retrospectively applied and necessitated the restatement of the balance sheet and income statement items in the 2011 Audited Consolidated Financial Statements, which were presented for comparative purposes only in the 2012 Audited Consolidated Financial Statements. In this regard, the balance sheet and income statement items in the consolidated financial statements as at and for the year ended December 31, 2010 have not been restated and are presented in this Offering Circular as they were included in 2011 Audited Consolidated Financial Statements. If such accounting policy change would have taken place in 2010, the Group’s Net result and the Equity pertaining to the shareholders would have been reduced by €105 million. Furthermore, following the application, from January 1, 2013 and with retrospective effect, of the new version of “IAS 19R — Employee Benefits,” the Group’s consolidated balance sheet as of December 31, 2012 and its income statement for the six months ended June 30, 2012 have been restated and reported solely for comparative purposes. Finally, in the six months ended June 30, 2013, Enel completed the definitive allocation of the purchase prices of the Kafireas pipeline companies and of Stipa Nayaá, resulting in a restatement of the balance sheet as of December 31, 2012 to reflect the fair value adjustments of the assets acquired and liabilities assumed. Enel recognized certain intangible assets, determined the associated tax effects and allocated to non-controlling interests the portion of such assets attributable to them. The most significant change in respect of the financial data contained in this Offering Circular is in respect to the recognition of all actuarial gains and losses in other comprehensive income, with the elimination of the corridor approach. The impact of the amendments mainly derives from the change in accounting treatment of historical service costs and actuarial gains and losses, as the recognition of such items can no longer be deferred. Potential investors should consult with their financial advisers to understand the effects of these restatements before investing in any Securities. See “Presentation of Financial and Other Information.”

Enel’s ability to successfully execute its 2013-2017 Business Plan is not assured On February 27, 2013, Enel’s board of directors presented the Group’s Business Plan, which contains the strategic guidelines and growth objectives of the Group for the relevant period, as well as some forecasts with regards to the Group’s expected results of operations. The Business Plan and the projections contained therein are based on a series of critical assumptions, including assumptions regarding the evolution of demand and prices for electricity, gas and fuels in the markets in which the Group operates, trends in relevant macroeconomic variables, and the evolution of the regulatory frameworks applicable to the Group. The strategic priorities set forth in the Business Plan include protecting margins and cash flow generation in mature markets, increasing investments in the growth markets of Eastern Europe and Latin America, as well as in renewables, strengthening the financial structure and optimizing asset portfolio, progress with respect to the reorganization of the Group, also including minorities buy-out, and continued focus on financial stability. In the event that one or more of the Business Plan’s underlying assumptions proves incorrect or events evolve differently than as contemplated in the Business Plan (including because of events affecting the Group that may not be foreseeable or quantifiable, in whole or in part, as of the date hereof) the anticipated events and results of operations indicated in the Business Plan (and in this Offering Circular) could differ from actual events and results of operations. The Business Plan and the forecasts set out therein should not be relied upon in any way by any investor in making an investment decision with respect to any Securities offered hereunder. Furthermore, this Offering Circular contains certain statements and estimates regarding the Group’s competitive position in certain markets, including with respect to its pre-eminence in particular markets. Such statements are based on the best information available to the Group’s management as of the date hereof. However, the Group faces competitive risks and its market positions may diverge from those expressed herein as a result of a variety of factors. Any failure by the Group to execute its Business Plan or maintain its market positions could have a material adverse effect upon the Group, its business prospects, its financial condition and its results of operations.

The Group has instituted a program to convert certain aging thermoelectric power plants into more modern and efficient generating facilities; however, there can be no assurance that these conversions will succeed As part of its strategic effort to reduce its generation costs in Italy, the Group has scheduled the conversion of some of its older thermoelectric generation plants into more modern combined-cycle plants and/or plants supplied by more economical fuels, such as coal. The failure of the Group to implement its plant-conversion program within the term and in the manner planned, including for reasons that do not depend on the Group or due to the duration of any authorization process, which may also be challenged by third parties, could result in a failure to achieve expected cost reductions and, more generally, have a material adverse effect on Enel’s business prospects, financial condition and results of operations.

The Group faces risks relating to political, social or economic instability in some of the countries where the Group operates. In addition the sovereign debt crisis in the Eurozone has escalated and could lead to instability of the Euro and the banking system The Group’s EBITDA from markets outside of Italy represented approximately 58% of the total for the year ended December 31, 2012. The Group’s activities outside of Italy (in particular Russia and certain Latin American countries) are subject to a range of country-specific business risks, including changes to government policies or regulations in the countries in which it operates, changes in the commercial climate, the imposition of monetary and other restrictions on the movement of capital for foreign corporations, economic crises, state expropriation of assets, the absence, loss or non-renewal of favorable treaties or similar agreements with foreign tax authorities and general political, social and economic instability. Such countries may also be characterized by inadequate creditors’ protection due to a lack of efficient bankruptcy procedures, investment restrictions and significant exchange rate volatility. Enel has adopted a specific tool to assess and monitor all systematic risks that are not diversifiable, such as country risk, and could have a material adverse effect on Enel’s business. In 2012 the Group witnessed the gradual stabilization of international markets, with the implementation of restrictive fiscal policies in Europe, and expansionary monetary policies implemented by the European Central Bank, notwithstanding the fact that such measures were not as aggressive as those implemented by the Federal Reserve or the Japanese Central Bank. In Europe, Italy and Spain particularly, austerity policies have had a negative impact on economic growth, while in the United States, despite the ongoing recovery, a certain level of uncertainty persists concerning the direction of upcoming fiscal measures in view of the compromise required of a Democratic administration and a Republican-controlled House of Representatives. In the Middle East and North Africa, the political situation is marked by a degree of permanent conflict, and is exacerbating hostile attitudes in those regions toward the Western World.

In emerging Asia, the leading economies (China and India) have been significantly affected by the slowdown in demand from the developed economies. But data about investments, industrial production and retail sales are improving. The Latin American economies have been impacted by the stagnation in the global economy, including those countries, such as Brazil, where expectations for growth were highest. By contrast, the emerging economies are showing the first signs of recovery. The major sources of concern for 2013 stem from the United States’ debt reduction policy (encouraged by the major rating agencies) and the ability of the European Union to deal with the sovereign debt crisis, which affected core countries like Italy, Spain and France. The stability of the Euro is threatened by the austerity measures and by the restricted access to credit in the banking system. In fact, some weaker countries could prefer to leave the Euro in order to avoid any rescue programs. Further, a slowdown of the Chinese economy may substantially affect the world demand for agricultural and mineral commodities, with consequences on the development of Latin America and sub-Saharan countries. Within the Group, there has been an increase in the number of countries classified as being of the highest risk, consequently there has been a gradual decline in those at the lowest risk. As a result, the weighted-average country risk of the Group rose slightly, due to the poor performances of the countries with the highest portion of the Group’s EBITDA.

Enel conducts its business in several different currencies and is exposed to exchange rate risks, particularly in relation to the rate of exchange between the Euro and the U.S. dollar The Group is exposed to exchange rate risks in relation to cash flows connected to the purchase and/ or sale of fuels and electricity on the international markets, cash flows related to investments or other financial income or expenses denominated in foreign currencies, such as dividends deriving from non- consolidated foreign subsidiaries, cash flows related to the purchase or sale of equity participations, and indebtedness in currencies different from those used in the countries where the Group has its principal operations (such debt being equal, as of December 31, 2012, to €17.2 billion). The principal foreign exchange exposure for the Group is that with respect to U.S. dollars — an exposure equal to €8.4 billion, as of December 31, 2012 (taking into account the long term gross debt). Enel can give no assurance that future significant variations in exchange rates (in particular of the Euro against the U.S. dollar, which has recently been subject to market volatility, and the currencies of the Latin American countries in which the Group is present) would not materially and adversely affect Enel’s and the Group’s financial condition and results of operations. Revenues and costs denominated in foreign currencies may be significantly affected by exchange rate fluctuations, which may have an impact on commercial margins (economic risk), and commercial and financing payables and receivables denominated in foreign currencies may be significantly affected by conversion rates used for profit and loss computation. Furthermore, since the Group’s consolidated financial statements are expressed in Euro, negative fluctuations, in exchange rates (in particular of the Euro against the U.S. dollar, which has recently been subject to market volatility, and the currencies of the Latin American countries in which the Group is present) could negatively affect the value of consolidated foreign subsidiaries’ assets, income and equity, with a concomitant adverse effect on the Group’s consolidated financial statements. The escalation of the sovereign debt of certain European countries could lead to instability of the Euro and the Eurozone Since the fourth quarter of 2007, disruption in the global credit markets has created increasingly difficult conditions in the financial markets. The global financial system has yet to overcome these disruptions and difficult conditions. Financial market conditions remain challenging and in certain respects, such as in relation to sovereign credit risk and fiscal deficits in European countries, have deteriorated in the recent years. In particular, in 2010, a financial crisis emerged in Europe, triggered by high budget deficits and rising direct and contingent sovereign debt in Greece, Ireland, Italy, Portugal and Spain, which created concerns about the ability of these European Union states to continue to service their sovereign debt obligations. Due to these concerns, the financial markets and the global financial system in general were impacted by significant turmoil and uncertainty resulting in wide and volatile credit spreads on the sovereign debt of many European Union countries, a fall in liquidity and a consequent increase in funding costs as well as increased instability in the bond and equity markets.

In response to the crisis, assistance packages were granted to Greece, Ireland and Portugal, as well as to Spanish banks, and European Union/International Monetary Fund stability facilities were created and plans were announced to increase the size of such resources. Measures were also announced to recapitalize certain European banks, encourage greater long term fiscal responsibility on the part of the individual Member States of the European Union and bolster market confidence in the Euro as well as the ability of Member States to service their sovereign debt. Despite these and other plans to implement various other measures designed to alleviate these concerns, uncertainty over the outcome of the European Union governments’ financial support programs and more general concern about sovereign finances intensified during 2012 and still persist. However, certain of such proposed steps are subject to final agreement and ratification by the relevant Member States and thus the implementation of such steps in their currently contemplated form remains uncertain. Even if such measures are implemented, there is no guarantee that they will ultimately and finally resolve uncertainties regarding the ability of

Eurozone states to continue to service their sovereign debt obligations. Further, even if such long-term structural adjustments are ultimately implemented, the future of the Euro in its current form, and with its current membership, remains uncertain. Italy has been particularly impacted by the challenging macro environment, and the recent downgrade in its sovereign debt by the major rating agencies (including Standard & Poor’s, Moody’s and Fitch) has translated into deteriorating financial market conditions. Ongoing concern about the debt crisis in Europe, as well as the possible exit from the Eurozone of one or more Member States and/or the replacement of the Euro by one or more successor currencies to which the foregoing could lead, could have a detrimental impact on the global economic recovery and the repayment of sovereign and non-sovereign debt in these countries, including Italy, as well as on the financial condition of European institutions (both financial and corporate). There can be no assurance that the market disruption in Europe will not worsen, nor can there be any assurance that current or future assistance packages will be available or, even if provided, will be sufficient to stabilize the affected countries and markets and secure the position of the Euro. The continuing difficulties and slowdown in the economy, the substantial bailouts of financial and other institutions by governments as well as measures designed to reignite economic growth have led to significant increases in the debt of several countries. As a consequence, various countries of the Eurozone (including Italy and Spain) have had their credit ratings downgraded in recent months by the main rating agencies due to the escalation of their sovereign debt levels, political uncertainty regarding reform prospects of the Eurozone and concern over the Eurozone’s increasingly weak macroeconomic prospects. Enel is exposed to credit risk In its commercial and financial activities, the Group is exposed to the risk that its counterparties might not be able to discharge all or part of their obligations, whether these involve payment for goods already delivered and services rendered or payment of the expected cash flows under financial derivatives contracts. In order to minimize such risks, the Group assesses in advance the creditworthiness of each counterparty with which it may establish its largest exposures on the basis of information supplied by independent providers and internal rating models. This process provides for the attribution of an exposure limit for each counterparty, the request for appropriate guarantees for exposures exceeding such limits and periodic monitoring of such exposure limits. For certain segments of its customer portfolio, the Group also enters into insurance contracts with leading credit insurance companies. Notwithstanding such risk management policies and insurance, default by one or more significant counterparties of the Group may adversely affect the Group’s results of operations and financial condition.

Enel is subject to a large variety of litigation and regulatory proceedings and cannot offer assurances regarding the outcomes of any particular proceedings In the ordinary course of its business, the Group is subject to numerous civil and administrative proceedings, as well as some criminal and arbitral proceedings. Enel has made provision in its consolidated financial statements for contingent liabilities related to particular proceedings in accordance with the advice of internal and external legal counsel. Such provisions amounted to €1,231 million as of June 30, 2013 and €1,142 million as of December 31, 2012. Notwithstanding the foregoing, the Group has not recorded provisions in respect of all of the proceedings to which it is subject. In particular, it has not recorded provisions in cases in which it is not possible to quantify any negative outcome and in cases in which it currently believes that negative outcomes are not likely. There can be no assurance, therefore, that the Group will not be ordered to pay an amount of damages with respect to a given matter for which it has not recorded an equivalent provision, or any provision at all. For further information, see “Business Description — Litigation.” Risks related to the energy industry and markets The Group is subject to different regulatory regimes in all the countries in which it operates. These regulatory regimes are complex and their changes could potentially affect the financial results of the Group The Group is subject to the laws of various countries and jurisdictions, including Italy, Spain and the European Union, as well as the regulations of particular regulatory agencies, including, in Italy, the Authority for Electricity and Gas (Autorità per l’Energia Elettrica e il Gas) (the “Authority”) and, in Spain, the newly formed Comisión Nacional de los Mercados y la Competencia (“CNMC”). Sectorial regulation affects many aspects of the Group’s business and, in many respects, determines the manner in which the Group conducts its business and sets the fees it charges or obtains for its products and services, including in respect of electricity generation (both traditional and from renewable resources). See the section entitled “Regulation” herein. In particular, in Spain the main law on the energy sector, Law No. 54/1997, as amended by Royal Decree-Law No. 6/2009 and Royal Decree-Law No. 6/2010, required that to the extent that the revenues of the electricity industry generated by the 24

Spanish regulated market were not sufficient to cover the costs of providing service to that market, certain industry operators must finance such difference (which is referred to as a “tariff deficit”) based on percentages for each operator that are set forth in such law. Since the law, costs have exceeded revenues and the nominated operators have therefore been required to finance the deficit. The amounts financed by each company are recognized as receivables. As of June 30, 2013, such receivables amounted to €4,279 million, to be recovered from end-users through tariffs at a future date, as contemplated by such law. According to such law, Endesa has been assigned responsibility for financing 44.16 percent of the tariff deficit. Royal Decree-Law 6/2009 of April 30, 2009, as amended by Royal Decree-Law 6/2010 of April 13, 2010, introduced some new measures aimed at relieving Spanish electricity companies from these deficit-financing obligations. This Royal Decree- Law provides for the establishment of a structured fund to which recovery rights for tariff deficits generated and not passed on to third parties can be transferred, and which will issue securities backed by a state guarantee. During 2011 and 2012, there were several issues of backed securities, for a total amount of €15.3 billion, of which €7.8 billion was paid to Endesa. There were no issues of backed securities in 2010. Additionally, the Royal Decree-Law provides for industry-wide caps on the amount of the tariff deficit of €3.5 billion in 2009, €3.0 billion in 2010, €2.0 billion in 2011 and €1.0 billion in 2012 requiring that tariffs be increased so that these caps are not exceeded. Maximum yearly amounts of deficit ex-ante have been revised by Royal Decree-Law 14/2010, published on December 24, 2010, which increased the 2011 and 2012 caps up to €3.0 billion and €1.5 billion, respectively, and in practice sets the cap for 2010 at €5.5 billion. Under the Royal Decree-Law 6/2009, as amended, beginning in 2013, tariffs are to be set so as to generate sufficient proceeds to cover the total cost of providing regulated services, thus avoiding the incurrence of further ex ante deficits. Royal Decree-Law 29/2012 has cancelled the 2012 tariff deficit limit, allowing the total amount to be fully securitized. This Royal Decree-Law has also eliminated the specific reference in Law No. 54/1997, as amended by Royal Decree-Law No. 6/2009 and Royal Decree-Law No. 6/2010, indicating that access rates will be sufficient with respect to the costs of regulated activities from 2013 onwards. Since 2012, several laws were approved with the aim to control the issue of the tariff deficit and other measures are expected to be adopted in 2013. However, there can be no assurance that the above measures introduced by the Spanish government will function or continue to function as intended and/or that they will not be amended or revoked, or that a Spanish electricity company such as Endesa will not incur additional costs related to such deficit, or be unable to recover the existing deficit. The amount of the tariff deficit generated in the Spanish market in 2012 exceeded the aforementioned limit of €1.5 billion by €4.1 billion, and the Group has the recognized right to collect it by transferring it to the structured fund.

On July 12, 2013, the Spanish government approved Royal Decree Law 9/2013, which introduces a series of measures for ensuring the financial stability of the Spanish electricity sector. Among the new measures contained in the legislation, which was published in the Boletin Oficial del Estado on July 13, 2013 and approved by the Spanish Parliament on July 17, 2013, are those for new legal and financial rules for power generation from renewable resources, a revision of the remuneration for peninsular and extra-peninsular generation, a change in the remuneration for electricity distribution and transmission, a modification of the capacity payment system and finally, the reintroduction of the “bono social,” a program that shifts to vertically integrated electricity operators part of the cost of providing reduced price energy to some indigent members of the population. The measures contained in Royal Decree Law 9/2013 will impact the profitability achievable by the Enel Group in Spain, in particular that of the Endesa-Iberia CGU. Moreover, the effects of these measures compound the effects of the measures already adopted in 2012, which contributed to the impairment loss of €2,392 million attributed to that CGU. A preliminary estimate of the Group indicates that, as an effect of the above measures, the annual gross cash flows generated by the Endesa-Iberian peninsula CGU may be reduced by up to €275 million in 2013 and up to €400 million in 2014. There is significant uncertainty related to the completion of the regulations implementing Royal Decree Law 9/2013 and the lack of guidance on certain elements of the regulations that will be implemented beginning in 2015. Enel believes that only after the implementing regulations have been approved will it be possible to obtain a more reliable estimate of the financial consequences of these recent regulatory changes. Enel will update its Business Plan to account for the net negative effect on future cash flows of the measures and to determine whether any further impairment losses have occurred with respect to the relevant CGU.

Future changes in the directives, laws and regulations issued by the European Union, the Italian Republic, Spain, the Authority, or governments or authorities in the other countries and/or markets in which the Group operates could materially and adversely affect Enel’s and the Group’s business prospects, financial condition and results of operations.

The Group is vulnerable to any decrease in demand for electricity, including as a result of the continuation or deepening of the current global recession The environment in which the Group currently operates is marked by the recent crisis that affected the world’s banking system and financial markets, and the consequent deterioration of macroeconomic conditions worldwide, including decreases 25 in consumption and industrial production. These conditions have imposed barriers to banks providing credit, created a low level of liquidity in the financial markets, and created high volatility in the equity and bond markets. Electricity and gas consumption are strongly affected by the level of economic activity in a country. In the fourth quarter of 2008, a reduction in electricity consumption occurred in Italy for the first time since 1981. According to Terna,1 the Italian transmission system operator (“Terna”), electricity consumption in Italy is far from indicative of a recovery, since it decreased by 3.9 percent in the six months ended June 30, 2013 in comparison to the same period in 2012 and decreased by 2.8 percent during 2012 in comparison to 2011. In Spain, the demand for electricity decreased by 3.8% during the six months ended June 30, 2013 compared to the same period in 2012. The recent crises in the banking system and financial markets, together with other factors, have resulted in economic recessions in many of the countries where the Group operates, such as Italy, Spain, Russia, other countries in the European Union and the United States. In the event that these economic recessions continue for a significant period of time, or worsen, energy consumption may decrease or continue to decrease in such markets, and this could result in a material adverse effect on the business prospects, results of operations and financial condition of Enel and the Group.

The Group faces risks relating to the process of energy market liberalization, which continues to unfold in many of the markets in which the Group operates. The Group may face new competition in the markets in which it operates, also due to the evolution of the energy sector The energy markets in which the Group operates are undergoing a process of gradual liberalization, which is being implemented through different approaches and on different timetables in the various countries in which the Group operates. As a result of the process of liberalization, new competitors may enter many of the Group’s markets in the future. The Group’s ability to develop its businesses and improve its financial results may be constrained by such new competition. The Group may moreover be unable to offset the financial effects of decreases in production and sales of electricity through efficiency improvements, or expansion into new business areas or markets. Moreover, since the energy market is in continuous evolution, the Group may also face risks related to the technological progress in the sector, such as (i) the entry in the market of new production processes and innovative products, aimed at replacing the traditional technologies; (ii) the relationship between the costs of technologies and their components; and (iii) a more stringent regulatory framework demanding that market operators adopt technologies necessary to comply with the applicable laws. Though the Group has sought to face the challenge of liberalization and market evolution by increasing its presence and client base in free (non-regulated) areas of the energy markets in which it competes and by focusing on technological progress and research of technology innovation of strategic importance, it may not be successful in doing so.

The Group faces significant costs associated with environmental regulation and may be exposed to significant environmental liabilities The Group’s businesses are subject to extensive environmental regulation on a national, European, and international scale.

Applicable environmental regulations address, among other things, CO2 emissions, water pollution, the disposal of substances deriving from energy production (including as a result of the decommissioning of nuclear plants), and atmospheric contaminants such as sulphur dioxide (“SO2”), nitrogen oxides (“NOx”) and particulate matter, among other things. The Group incurs significant costs to keep its plants and businesses in compliance with the requirements imposed by various environmental regulations. Such regulations require the Group to adopt preventative or remedial measures and influence the Group’s business decisions and strategy. Considering the current public focus on environmental matters, it is not possible to exclude the possibility that more rigorous environmental rules may be introduced at the Italian, Spanish or European level, or that more rigorous measures may be introduced in other countries where the Group operates, which could increase costs or cause the Group to face environmental liabilities. Such environmental liabilities could in themselves increase costs, including clean-up costs, for the Group. Enel is not able to foresee the nature or the potential effects of future regulations on its results of operations. Due to tariff regulations in Italy and other countries in which the Group operates, the Group is largely unable to offset increases in costs incurred for environmental protection with price increases of its own. As a result, new environmental regulation could have a material adverse effect on the Group’s business prospects, results of operations and financial condition.

Legislation and other regulation concerning CO2 emissions is one of the key factors affecting the Group’s operations, and is also one of the greatest challenges facing the Group in safeguarding the environment. With respect to the control of CO2 emissions, European Union legislation governing the CO2 emissions trading scheme imposes costs for the electricity industry, which could rise substantially in the future. In this context, the instability of the emission allowance market accentuates the difficulties of managing and monitoring the situation. The Group monitors the development and implementation on European Union and Italian legislation, diversifies its generation mix towards the use of low-carbon technologies and resources with a

1 Terna S.p.A. — Monthly report on the electric system, June 2013. 26 focus on renewables and nuclear power, develops strategies to acquire allowances at competitive prices and enhances the environmental performances of its generation plants, increasing their energy efficiency. However, these measures and strategies undertaken by the Group to mitigate risks associated with CO2 regulation and to reduce its CO2 emissions may be ineffective or insufficient, which could have a material adverse effect on the business prospects, results of operations and the financial condition of Enel and the Group. See “Regulation” for more information about CO2-related regulations. The Group relies on time-limited government concessions in order to conduct many of its business activities Group companies are concession-holders in Italy for the management of the Group’s electricity distribution networks and hydroelectric power stations. The Group’s hydroelectric power stations in Italy are managed under administrative concessions that are set to expire in 2029, with the exception of those in respect of the power stations located in the autonomous provinces of Trento and Bolzano. The concessions in the province of Trento will expire in 2020 and those in the province of Bolzano will expire in 2040. Endesa’s hydroelectric power stations in Spain also operate under administrative concessions, which are set to expire from 2019 up to 2067. Any of the Group’s concessions, including concessions not specifically described above, may not be renewed after they expire or may be renewed only on economic terms that are more burdensome for the Group. In either case, the Group could experience material and adverse effects upon its business prospects, results of operations and financial condition. The Group faces risks relating to interruptions in service at its facilities or plants The Group is continuously exposed to the risk of malfunctions and/or interruptions in service resulting from events outside of the Group’s control, including accidents, defects or failures in machinery or control systems. It is also subject to the risk of casualties or other similar extraordinary events. Any such events could result in economic losses, cost increases, or the necessity to revise the Group’s investment plans. Additionally, service interruptions, malfunctions or casualties or other significant events could result in the Group being exposed to litigation, which in itself could generate obligations to pay damages. Although the Group has insurance coverage, such coverage may prove insufficient to fully offset the cost of paying such damages. Therefore, the occurrence of one of more of the events described above, or other similar events, could have a material adverse effect on the business prospects, results of operations and financial condition of Enel and the Group. The Group faces risks related to the potential liabilities resulting from energy production through nuclear power plants The Group is in the business of nuclear power generation as a result of the Group’s interests in Endesa and Slovenské elektrárne. Although Enel believes that Endesa’s and Slovenské elektrárne’s nuclear power plants use technologies that are internationally recognized and that they are managed according to Western European standards, ownership and operation of nuclear power plants nonetheless exposes the Group to a series of inherent risks, including those relating to the manipulation, treatment, disposal and storage of radioactive substances and the potential adverse effects thereof on the environment and human health. Slovakia and Spain have ratified international treaties (i.e. Slovakia has ratified the 1963 Vienna Convention on Civil Liability for Nuclear Damage and Spain has ratified the 1960 Paris Convention on Third Party Liability in the Field of Nuclear Energy and the 1963 Brussels Supplementary Convention, as amended) providing for limitations on liabilities resulting from nuclear accidents, such that the Group could be exposed to liabilities within such limitations, towards other countries that have ratified the same international treaties. The Slovakian liability limit is up to €75 million per event. The Spanish liability limit is €700 million (with pending revision up to €1,200 million) for damages caused in countries that signed both the 1960 Paris Convention and the 1963 Brussels Convention, as amended; and €700 million for damages caused in countries that either signed only the 1960 Paris Convention, but not the 1963 Brussels Supplementary Convention, or do not have nuclear power plants in their own territories. Any nuclear accident or other harmful incident could have a material adverse effect on the business prospects, results of operations and financial condition of Enel and the Group. Potential risks also arise in relation to the decommissioning of nuclear power plants. The Slovakian government has established a fund to finance the present and future costs associated with the decommissioning of nuclear reactors. The deficit of this fund has not been officially quantified, and the Group could potentially face future costs relating to decommissioning work at Bohunice or Mochovce, in addition to the amounts that it is already required to contribute to the aforementioned fund pursuant to law (currently equal to €13,428.26 per installed MW, per year, plus 5.95 percent of the revenues derived from Slovenské elektrárne’s nuclear generation plants.

The Group is exposed to the risk of increases in the costs of fuel or other raw materials, or disruptions in their supply; it is also exposed to the risk of decreases in the prices obtained for its electricity In the ordinary course of business, the Group is exposed to the risk of increases in the costs of fuel or other raw materials, or disruptions in their supply. It is also exposed to the risk of decreases in the prices obtained for its electricity in the countries where it operates and, in particular, in mature markets. The Group has not eliminated its exposures to these risks, and significant variations in fuel, raw material or electricity prices, or any relevant interruption in supplies could have a material adverse effect on the business prospects, results of operations and financial condition of Enel and the Group. Moreover, the hedging strategies pursued by the Group may create new risks and exposures and we cannot offer assurance that they will function as intended. In addition, because hedging contracts for the price of electricity and/or fuels are available in the market only for limited durations, any hedging effect will not protect against prolonged price movements. The Group is exposed to a number of different tax uncertainties, which would have an impact on its tax results The Group is required to pay taxes in multiple jurisdictions. The Group determines the taxation it is required to pay based on its interpretation of the applicable tax laws and regulations in the jurisdictions in which it operates. The Group may be subject to unfavorable changes in the respective tax laws and regulations to which it is subject. The financial position of the Group and its ability to service the obligations under its indebtedness may be adversely affected by new laws or changes in the interpretation of existing laws. The Group faces risks relating to the variability of weather Electricity and natural gas consumption levels change significantly as a result of climatic changes. Changes in the weather can produce significant differences in energy demand and the Group’s sales mix. In addition, weather changes (for example, low wind or rain levels) affect the Group’s production from certain renewable resources. In particular, Enel’s electric power generation involves hydroelectric generation and, accordingly, Enel is dependent upon hydrological conditions prevailing from time to time in the geographic regions where the relevant hydroelectric generation facilities are located. If hydrological conditions result in droughts or other conditions that negatively affect Enel’s hydroelectric generation business, Enel’s results of operations could be materially adversely affected. Furthermore, adverse weather conditions can affect the regular delivery of energy due to network damage and the consequent service disruption. Significant changes of such nature could adversely affect the business prospects, results of operations and financial condition of Enel and the Group. Risks related to Enel’s ordinary shares Enel is controlled by the MEF, which has significant influence over Enel’s actions As of the date of this Offering Circular, Enel is controlled by the MEF, pursuant to Article 93 of the Italian Unified Financial Act, which holds a 31.24 percent direct stake in Enel’s ordinary shares. As long as the MEF remains Enel’s principal shareholder, it will exercise significant influence in matters requiring shareholder approval, including dividend distributions, capital increases and amendments to Enel’s articles of association. More importantly, the MEF’s vote, when exercised, will be decisive in appointing the majority of the directors of Enel, in accordance with the slate-based voting mechanism set forth in Article 14 of Enel’s articles of association. As a result, other shareholders’ ability to influence decisions on matters submitted to a vote of Enel’s shareholders may be limited. Risks related to the Securities and Receipts The Securities and Receipts may not be a suitable investment for all investors Each potential investor in the Securities and Receipts must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (a) have sufficient knowledge and experience to make a meaningful evaluation of the Securities and Receipts, the merits and risks of investing in the Securities and Receipts and the information included in this Offering Circular or any applicable supplement; (b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Securities and Receipts and the impact the Securities and Receipts will have on its overall investment portfolio; (c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Securities and Receipts, including where the currency for principal and interest payments is different from the potential investor’s currency; (d) understand thoroughly the terms of the Securities and Receipts and be familiar with the behavior of any relevant financial markets; and

(e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. The Securities and Receipts are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone investments. They purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in the Securities and Receipts unless it has the expertise (either alone or with a financial adviser) to evaluate how the Securities will perform under changing conditions, the resulting effects on the value of the Securities and Receipts and the impact this investment will have on the potential investor’s overall investment portfolio. The Issuer’s payment obligations in respect of the Securities are subordinated The Securities will be subordinated obligations of the Issuer and the Securities will rank pari passu with each other in a winding-up, insolvency, dissolution or liquidation of the Issuer. Upon the occurrence of a winding-up, insolvency, dissolution or liquidation of the Issuer, payments on the Securities will be subordinated in right of payment to the prior payment in full of all other liabilities of the Issuer, except for payments in respect of any Parity Securities or Junior Securities. The obligations of the Issuer under the Securities are intended to be senior only to its obligations to the holders of (i) any class of the Issuer’s share capital and (ii) any other securities issued by the Issuer or any securities issued by a company other than the Issuer which have the benefit of a guarantee or similar instrument from the Issuer, which securities of the Issuer, or guarantee or similar instrument granted by the Issuer, rank or are expressed to rank pari passu with any class of the Issuer’s share capital and/or junior to the Securities. Holders are advised that unsubordinated liabilities of the Issuer may also arise out of obligations that are not reflected in the financial statements of the Issuer, including, without limitation, the issuance of guarantees on an unsubordinated basis. Claims made under such guarantees will become unsubordinated liabilities of the Issuer which, in a winding-up, insolvency, dissolution or liquidation of the Issuer, will need to be paid in full before the obligations under the Securities may be satisfied.

Although subordinated debt securities may pay a higher rate of interest than comparable debt securities which are not subordinated, there is a real risk that an investor in subordinated securities such as the Securities will lose all or some of his investment should the Issuer become insolvent.

The Securities are long-dated securities; holders of the Securities may be required to bear the financial risks of an investment in the Securities for a long period The Securities will mature on September 24, 2073. The Issuer is under no obligation to redeem or repurchase the Securities prior to such date, although it may elect to do so in certain circumstances. Holders have no right to call for the redemption of the Securities and the Securities will only become due and payable in certain circumstances relating to payment default and a winding-up, dissolution, liquidation or restructuring of the Issuer (see “Description of the Securities — Redemption”). Holders should therefore be aware that they will bear the financial risks associated with an investment in long-term securities. Deferral of interest payments The Issuer may elect to defer in whole, but not in part, payment of interest in respect of the Securities in respect of any interest period by giving a Deferral Notice to Holders. If the Issuer makes such an election, the Issuer shall have no obligation to make such payment and any such non-payment of interest will not constitute a default by the Issuer for any purpose. Any interest in respect of the Securities the payment of which is deferred will, so long as the same remains outstanding, constitute Arrears of Interest. Arrears of Interest will be payable as outlined in “Description of the Securities — Interest Deferral.” No interest will accrue on any outstanding Arrears of Interest. Any deferral of interest payments will likely have an adverse effect on the market price of the Securities. In addition, as a result of the interest deferral provisions of the Securities, the market price of the Securities may be more volatile than the market prices of other debt securities on which original issue discount or interest accrues that are not subject to such deferrals and may be more sensitive generally to adverse changes in the financial condition of the Issuer. Early redemption risk The Issuer may redeem all (but not some only) of the Securities on any Reset Date at their principal amount together with accrued interest to, but excluding, the relevant Reset Date and any outstanding Arrears of Interest. The Issuer may also redeem all (but not some only) of the Securities at the applicable Early Redemption Price at any time following the occurrence of a Withholding Tax Event, a Tax Deductibility Event, a Rating Methodology Event or an Accounting Event, as outlined in “Description of the Securities — Redemption.” In addition, in the event that at least 90 percent of the aggregate amount of the Securities (including Securities in the form of Receipts) issued on the Issue Date has been purchased by or on behalf of the Issuer or a Subsidiary and cancelled, the Issuer may redeem all (but not some only) of 29 the outstanding Securities at the applicable Early Redemption Price. The applicable Early Redemption Price may be less than the then current market value of the relevant Securities. During any period when the Issuer may elect to redeem the Securities, the market value of the Securities generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem the Securities when its cost of borrowing for similar securities is lower than the interest rate on the Securities, or if it no longer requires the Securities as part of its capital structure. An investor may not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Securities being redeemed and may only be able to reinvest the redemption proceeds at a significantly lower rate. Potential investors should consider their reinvestment risk in light of other investments available at that time.

There is no limitation on the Issuer issuing senior or pari passu securities There is no restriction on the amount of securities or other liabilities which the Issuer may issue or incur and which rank senior to, or pari passu with, the Securities. The issue of any such securities or the incurrence of any such other liabilities may reduce the amount (if any) recoverable by Holders on an insolvency of the Issuer and/or may increase the likelihood of a deferral of interest payments under the Securities. Resettable fixed rate securities carry a market risk A holder of fixed rate securities is particularly exposed to the risk that the price of such securities falls as a result of changes in market interest rates. While the interest rate of the Securities is fixed until the First Reset Date (with a reset of the initial fixed rate on every Reset Date as set out in the Conditions of the Securities), market interest rates typically change on a daily basis. As the market interest rate changes, the price of the Securities also changes, but in the opposite direction. If the market interest rate increases, the price of the Securities would typically fall. If the market interest rate falls, the price of the Securities would typically increase. Holders should be aware that movements in these market interest rates can adversely affect the price of the Securities and can lead to losses for the Holders if they sell the Securities. Interest rate reset may result in a decline of yield A holder of securities with a fixed interest rate that will be reset during the term of the securities (as will be the case for the Securities on each Reset Date if not previously redeemed) is exposed to the risk of fluctuating interest rate levels and uncertain interest income. The Securities and Receipts are subject to provisions relating to modification, waivers and substitution of the Issuer The Indenture contains provisions for convening meetings of Holders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Holders including Holders that did not attend and vote at the relevant meeting and Holders that voted in a manner contrary to the majority. The Indenture also provides that the Trustee may, without the consent of Holders, agree to (i) any modification of, or to the waiver or authorization of any breach or proposed breach of, any of the provisions of the Securities, or (ii) the substitution of another company as principal debtor under the Securities in place of the Issuer, in the circumstances described in “Description of the Securities — Amendment, Supplement and Waiver.” Furthermore, in a meeting of Holders, certain matters could be approved by a resolution passed by one or more persons holding or representing not less than one-half of the nominal principal amount of the outstanding Securities, as set out in Article 2415 of the Italian Civil Code. This is in spite of the fact that the Indenture provides for some matters in respect of which an amendment, supplement or waiver may only be approved with the consent of Holders of at least 75% of the outstanding Securities. The imposition of a super-majority requirement is untested under Italian law and may be challenged by Holders, the Issuer or others, and if challenged, might not be upheld by an Italian court, with the consequences that the super-majority voting threshold would be reduced to thresholds provided for under the Italian Civil Code. Investors may be subject to tax consequences as a result of the EU Savings Directive Under EC Council Directive 2003/48/EC on the taxation of savings income (the “EU Savings Directive”), Member States are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State or to certain limited types of entities established in that other Member State. However, for a transitional period, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). The European Commission has proposed certain amendments to the Directive which may, if implemented, amend or broaden the scope of the requirements described above. If a payment were to be made or collected through a Member State which has 30 opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Security as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the Directive. Changes of law may affect the terms and conditions of the Securities The Indenture, the Securities and the Receipts and any non-contractual obligations arising out of or in connection with the Indenture and the Securities and the Receipts are governed by, and shall be construed in accordance with, the laws of the State of New York, except for the provisions of the Indenture concerning status and subordination of the Securities, which shall each be governed by Italian law. See “Description of the Securities — Status and Subordination.” The provisions of the Indenture concerning the meeting of Holders and the appointment of a joint representative of Holders (a rappresentante commune) in respect of the Securities are subject to compliance with Italian law. See “Description of the Securities — Meetings of Holders.” No assurance can be given as to the impact of any possible judicial decision or change to New York or Italian law or administrative practice after the date of this Offering Circular. There are limited Events of Default and remedies available to Holders Holders have limited rights to enforce payment or the performance of the Issuer’s obligations in respect of the Securities. The Securities will only become due and payable (i) if a default is made by the Issuer in the payment of any interest which is due and payable in respect of the Securities, which default continues for a period of 30 days or more, or (ii) if certain limited insolvency or liquidation events occur. If the Issuer fails to make payment of any principal when due, the rights of Holders are limited to requiring the Trustee to initiate proceedings to compel the performance of such obligation, as further described in “Description of the Securities — Enforcement.” In addition, in the event of a winding-up, insolvency, dissolution or liquidation of the Issuer, the claims of Holders will be subordinated as further described in “Description of the Securities — Status and Subordination.” Accordingly, the claims of holders of all obligations to which the Securities are subordinated will first have to be satisfied in any winding-up or analogous proceedings before the Holders may expect to obtain any recovery in respect of the Securities and prior thereto Holders will have only limited ability to influence the conduct of such winding-up or analogous proceedings.

Italian insolvency laws are applicable to the Issuer and may not be as favorable to holders of Securities and Receipts as those of other jurisdictions with which investors may be more familiar Under Italian law, the Issuer could become subject to any of the following insolvency proceedings: (a) bankruptcy (fallimento), which is governed by the provisions of Royal Decree No. 267 of March 16, 1942 (the “Bankruptcy Law”), as amended; (b) a composition with creditors (concordato preventivo), which is also governed by the provisions of the Bankruptcy Law, as recently amended by Law No. 134 of August 7, 2012 (“Law 134”);

(c) a procedure governed by Article 182 bis of the Bankruptcy Law, as recently amended by Law 134; (d) an extraordinary administration for large insolvent companies (amministrazione straordinaria delle grandi imprese insolventi), which is governed by Legislative Decree No. 270 of July 8, 1999, as amended (“Decree 270”) and by certain provisions of the Bankruptcy Law; and (e) an extraordinary administration for the industrial restructuring of large insolvent companies (amministrazione straordinaria per la ristrutturazione industriale delle grandi imprese insolventi), which is governed by Decree 270 as modified by Law Decree No. 347 of December 23, 2003, as amended (“Decree 347”), as well as certain provisions of the Bankruptcy Law. For businesses performing essential public services, such as the Issuer, this type of proceedings would also be subject to Law Decree 134 of August 28, 2008 (“Decree 134”). The proceedings indicated in paragraphs (a), (b), (c) and (d) would be initiated by petition to the competent court. The proceedings indicated in paragraph (e) would be initiated by petition of the debtor company to the Ministry of Economic Development or, in the case of an extraordinary administration to which Decree 134 would apply, may be commenced directly by decree of the Italian Prime Minister or the Minister of Economic Development. Below is a summary of certain relevant features of each type of proceedings: (a) Bankruptcy: Pursuant to the Bankruptcy Law, a debtor can be declared bankrupt (fallito) (either by its own initiative or upon the initiative of any of its creditors or of the public prosecutor) if it is insolvent (i.e. it is unable to regularly pay its debts as they fall due). As a consequence of the declaration of bankruptcy the debtor loses control over all its assets and over the management of its business which is taken over by a court-appointed receiver (curatore fallimentare). Once the bankruptcy proceeding is commenced, no enforcement and interim proceedings can be taken 31

or continued against the debtor over the assets included in the bankruptcy estate. Moreover, all action taken and proceedings already initiated by creditors are automatically stayed. Each creditor must lodge his claims with the court in charge; the judge delegated by the court (giudice delegato) will decide which claims are approved. Each creditor may appeal (opposizione) the decision of the judge in front of the court. The sale of the borrower’s assets is conducted in compliance with a liquidation program proposed by the receiver and approved by the creditors’ committee. The Bankruptcy Law provides for the formation of a creditors’ committee composed of three or five members, which consults with the receiver. These proceedings are ultimately aimed at the ratable distribution of the assets of the debtor company among creditors which have submitted a claim admitted by the delegated judge. The Holders would not have a right as a class to appoint a representative to a creditors’ committee. (b) Composition with creditors: A debtor that is insolvent or in “financial distress” (e.g., facing financial distress which does not yet amount to insolvency) may file for a composition with creditors by submitting a plan for the composition with its creditors which may provide, inter alia, for:  the restructuring of debts and the satisfaction of creditors in any manner even through assignments of debts, novations (accollo) or extraordinary transactions, including the issue of shares, quotas, bonds (also convertible into shares) or other financial instruments and securities;  the appointment of a third-party manager (including the creditors);  the division of the creditors into different classes; and/or  different treatments for creditors belonging to different classes.

The court determines whether the proposal for the composition is admissible, in which case the court, inter alia, delegates a judge to follow the procedure, appoints one or more judicial officers (commissari giudiziali) and calls a creditors meeting. In accordance with article 177 of the Bankruptcy Law, the composition with creditors is considered approved by the creditors if it is approved, at the creditors meeting or within a specified term thereafter, by the majority of the creditors entitled to vote (and, in case of different classes of creditors, by the majority of the creditors within each class). The court may also approve the composition with creditors in case of challenge by a dissenting creditor pertaining to one or more dissenting classes or, in case of a sole class, by dissenting creditors representing at least 20 percent of the credits admitted to the vote, if the court deems that the composition with creditors would satisfy the interests of the dissenting creditors for an amount not less than that which would have been achieved under other practicable solutions. The provisions of Article 161, 6th paragraph of the Bankruptcy Law, as amended by Law 134 now allow a debtor to file a petition for admission to the composition with creditors even before a composition plan has been filed with the court, with the debtor benefiting from the stay against enforcement over the debtor’s assets and being granted a maximum of up to 120 days (such term may be postponed for further 60 days in the presence of justified reasons) in order to produce a composition plan for court approval or, as an alternative, reaching a court approved private restructuring as addressed by Article 182bis of the Bankruptcy Law. The procedure of the composition with creditors will end with a decree which is to be issued by the competent court. If the court or the creditors reject the offer, to the extent the relevant conditions are met, the entrepreneur is declared bankrupt by the court. (c) Article 182bis: Article 182bis of the Bankruptcy Law deals with a private agreement between the debtor and creditors representing at least 60 percent of claims owed, but subject to court approval. Since external creditors remain extraneous to the restructuring plan, a report is required to be provided by an independent expert as to feasibility, particularly with relevance to the ability of the debtor to continue to satisfy non-participating creditors. Changes introduced by Law 134 allow the debtor a term of 120 days to make payment of amounts owed to non-participating creditors. Article 182bis also specifies that from the date of publication of the court approved plan, creditors are prohibited from initiating or pursuing interim and/or executory actions against the debtor or his assets for a period of 60 days. Moreover, as in the case of the composition with creditors, the debtor is now able to petition the court for a stay on rights of enforcement even prior to the final restructuring agreement being filed, provided that an affidavit is filed by the debtor attesting that negotiations are ongoing with creditors representing at least 60 percent of claims owed and a declaration by an independent expert attests to the feasibility of such plan. (d) Extraordinary administration: Decree 270 introduced a specific extraordinary administration proceeding, otherwise known as the “prodi-bis” (the “Prodi-bis procedure”), applicable to insolvencies of major companies (the “Extraordinary Administration”).

The aim of the Prodi-bis procedure is to ensure continuation of the business operated by the debtor by either enabling the same to regain the ability to meet its obligations in the ordinary course of business by the end of the procedure or by transferring the business (on a going concern basis) to third parties. To qualify for the Prodi-bis procedure, the company must have:  employed at least 200 employees in the year before the procedure was commenced; and  debts equal to at least two-thirds of the value of its assets as shown in its financial statements and two-thirds of income from sales and the provision of services during the last financial year.

Insolvent companies, belonging to the group of a company that qualifies for the Prodi-bis, may be submitted to the Prodi-bis, if certain conditions are met, also if they do not qualify per-se for the Prodi-bis. The Prodi-bis procedure is divided into two main phases:  following a petition, the court will determine whether the company meets the criteria for admission and, in particular whether the company is insolvent. If the company is insolvent, the court will issue a decision to that effect and appoint one or three judicial receiver(s) (commissiario giudiziale) to evaluate whether the business has serious prospects of recovery (either through a sale of assets or a reorganization of its business) and to report back to the court within 30 days. Following receipt of the report of the judicial receiver, the court has a further 30 days to decide whether to admit the company to the Extraordinary Administration procedure or place it into bankruptcy;  once the Extraordinary Administration procedure has been approved, the extraordinary commissioner(s) appointed by the Minister of Economic Development shall prepare a plan, to be approved by the Minister of Economic Development, for either: (i) a full asset liquidation by means of the sale of the company businesses as going concerns within one year or (ii) a reorganization of the business leading to the economic and financial recovery of the company or group within two years, in each case, unless extended by the Minister of Economic Development. The proceedings are administered by the extraordinary commissioner(s) who act under the supervision of the Minister of Economic Development. While unsecured creditors may appoint one or two members to the supervisory committee for the proceedings, the majority of the supervisory committee, and also the chair, will be appointed by the Minister of Economic Development. Once the Extraordinary Administration procedure has been approved, the principal effects are as follows:  the company continues to trade and debts incurred during the Extraordinary Administration for the continuation of the business of the company are treated as priority claims which rank ahead of the claims of creditors whose rights accrued prior to the commencement of the Extraordinary Administration procedure and may be paid as they fall due;  the Extraordinary Commissioner(s) is/are entitled to terminate pending contracts to which the company is a party. Furthermore in the context of the Prodi-bis a debt restructuring plan is approved exclusively by the Minister of Economic Development but is not subject to any vote by creditors. Decree 347 introduced a specific extraordinary set of rules for companies meeting certain size requirements. Decree 347 is complementary to the Prodi-bis and except as otherwise provided in Decree 347, the provisions of the Prodi- bis shall apply. Decree 347 only applies to insolvent companies which, on a consolidated basis, have at least 500 employees in the year before the procedure was commenced and at least €300 million of debt. Under Decree 347, the decision whether to open the procedure is taken by the Minister of Economic Development that, upon request of the debtor (who at the same time must file with the relevant court an application for the declaration of its insolvency), assesses whether the relevant requirements are met and if such requirements are met appoints the extraordinary commissioner(s). The extraordinary commissioner(s) immediately becomes responsible for the management of the company. The court decides on the insolvency of the company.

Within 180 days of his appointment (or 270 days if so agreed by the Minister of Economic Development) the extraordinary commissioner(s) must submit a plan for the rescue of the business by way of a asset liquidation or restructuring to the Minister of Economic Development for approval and at the same time must file with the competent court a report on the state of the business. A restructuring plan proposed in the context of proceedings subject to Decree 347 may include a composition plan, with the possibility to divide creditors into classes, with different treatment applicable to creditors belonging to 33

different classes and with proposals for a write-off of any obligations owed by the debtor and/or a conversion of debt securities (such as the Securities) into shares of the debtor company or any of its group companies. Decree 347 provides that a composition plan is approved by creditors according to the same majority voting rules as those which apply in the context of proceedings for composition with creditors, as described above. If the restructuring plan is not approved by the Minister of Economic Development, the extraordinary commissioner(s) may propose a plan for the disposal of the assets. If the asset disposal program is not approved, the company is to be placed into liquidation. Where Decree 134 applies to an extraordinary administration, its purpose is broadly to widen the powers of sale. For this purpose, the insolvency administrator is granted powers to identify and compose lines of business or partial lines of business, even if not pre-existing, which may be made subject to sale. As a result of the above, Holders should be aware that they will generally have limited ability to influence the outcome of any insolvency proceedings which may apply to the Issuer under Italian law, especially in light of the current capital structure of the Issuer. There is no active trading market for the Securities and the Receipts, and if a market does develop, it may be volatile Although application has been made to admit the Securities to trading on the Irish Stock Exchange, the Securities and the Receipts will have no established trading market when issued, and one may never develop. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Securities and the Receipts easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for securities that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been prepared to meet the investment requirements of limited categories of investors. These types of securities generally would have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may have a severely adverse effect on the market value of the Securities and the Receipts.

The U.S. federal income tax consequences of your investment in the Securities or Receipts are not entirely certain. You are urged to read the more detailed discussion of U.S. federal income tax treatment of the Securities and Receipts set forth under “Certain Tax Considerations — Material U.S. tax considerations — Treatment of the Securities” The U.S. federal income tax treatment of a financial instrument with terms similar to the features of the Securities and Receipts is not entirely certain. The Securities are in form indebtedness and are treated as indebtedness for Italian tax purposes, and provide for a repayment of their principal amount at maturity. Notwithstanding the attributes described in the preceding sentence, other factors such as (i) the maturity date of the Securities, (ii) the provisions relating to the potential deferral of interest payments on the Securities, and (iii) certain of the provisions relating to the creditor rights of holders under Italian law, suggest that the Securities are properly characterized as equity of the Issuer for U.S. federal income tax purposes, and the terms of the Securities and Receipts will require a U.S. Holder and the Issuer (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary) to treat the Securities and Receipts for U.S. federal income tax purposes in accordance with this characterization. However, it is possible that the U.S. Internal Revenue Service could seek to recharacterize the Securities and Receipts as indebtedness of the Issuer for U.S. federal income tax purposes and, consequently, cause Receipts to be treated as indebtedness for U.S. federal income tax purposes and therefore subject to the Treasury regulations governing contingent payment debt instruments, in which case you may be subject to adverse tax consequences, as discussed in “Certain Tax Considerations — Material U.S. tax considerations — Potential alternative characteristics of the Securities and Receipts.” You are urged to consult your own tax advisor concerning the significance and potential impact of the above considerations.

A holder of the Securities or Receipts may be required to recognize taxable income, even if no cash is actually paid on the Securities or Receipts The terms of the Securities and Receipts will require you and the Issuer (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary) to treat the Securities and Receipts as equity of the Issuer for U.S. federal income tax purposes. As a result, if the Issuer pays dividends on any class of stock (or other Junior Securities treated as equity for U.S. federal income tax purposes, as permitted under the terms and conditions of the Securities and Receipts under certain circumstances) and accrues but does not make interest payments in cash on the Securities, such accrual may constitute a “disproportionate distribution” by the Issuer for U.S. federal income tax purposes. In such a circumstance, you would be deemed to have received a taxable distribution equal to the amount of any interest payments on the Securities that are accrued but not paid in cash. Please see “Certain Tax Considerations — Material U.S. tax considerations — Section 305 rules.” You would generally be required to treat any such deemed distribution as a deemed dividend includible in taxable income for U.S. federal income tax purposes on the date of such accrual, regardless of when such interest payment is ultimately paid in cash. You are urged to consult your own tax advisor with respect to the particular tax consequences of this rule.

Enel will not pay additional amounts to holders of the Securities or Receipts in respect of taxes imposed under the U.S. withholding tax regime known as “FATCA.” Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (commonly known as “FATCA”), provides that various information reporting requirements must be satisfied with respect to certain non-U.S. recipients of payments of certain gross amounts of income, and failure to comply with such information reporting requirements may trigger a U.S. withholding tax of 30 percent on such payments. Enel believes that the payments it makes with respect to the Securities should not be within the present scope of such payments or otherwise subject to FATCA withholding; however, since the FATCA regulations are complex and uncertain in some respects, in particular with respect to the definition of so- called “pass-thru payments,” the application of FATCA to payments between financial intermediaries is not entirely certain. Investors are encouraged to consult their own tax advisers regarding the effect of FATCA in their individual circumstances. Enel will not pay Additional Amounts (as defined in the Description of the Securities) to holders of the Securities or Receipts in respect of taxes imposed under FATCA. Italian substitute tax will be deducted from any interest, premium and other income in respect of the Securities and the Receipts to any investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax (including, in the case of Receipts, because of any failure of, or non-compliance with, the Tax Certification Procedures). Such ineligibility may arise from failure to comply with the Tax Certification Procedures by any of the Financial Intermediaries through whom the investor holds its interest in the Receipts. In addition, an investor’s ability to benefit from these tax relief provisions may be impaired due to a failure to comply with the Tax Certification Procedures by a Financial Intermediary in the chain of custody between the investor and the holder of the Securities represented by the Receipts. Investors may not have knowledge of all Financial Intermediaries in such chain of custody and may have limited or no control over such Financial Intermediaries’ compliance with the Tax Certification Procedures beyond those assurances or indemnities provided pursuant to the terms of their custodial agreements with their provider of custodial services. The Tax Certification Procedures also provide that payments of interest to any DTC Participants that fail to comply with the Tax Certification Procedures, including the failure to effect a Mandatory Exchange in respect of an investor holding beneficial interests through such DTC Participant or to submit a signed self-certification form, will be paid net of Italian substitute tax in respect of such DTC Participant’s entire holding of Receipts on all future payments to such DTC Participant. Accordingly, all Beneficial Owners who hold their interests in the Receipts through such DTC Participant will receive interest net of Italian substitute tax for so long as they continue to hold such interests through such DTC Participant. Relief for Beneficial Owners who are otherwise eligible to receive payments of interest in respect of Receipts free of Italian substitute tax will thereafter need to be obtained directly from the Italian tax authorities following the direct refund procedure established by Italian law. Such procedures may entail costs and the refunds may be subject to extensive delays. See “Annex B — Acupay Italian Tax Compliance and Relief Procedures — Article III. Procedure for Direct Refund from Italian Tax Authorities.” In addition, the operation of the procedures referred to above depend on the Receipt Issuer, Acupay and Monte Titoli continuing to perform their respective roles under such procedures or, if any of them ceases to do so, on a successor entity being appointed in its place. Upon the occurrence of certain events described under “Book-Entry, Delivery and Form— Issuance of Definitive Registered Securities and Definitive Registered Receipts”, Beneficial Owners of the Securities and Receipts, instead of holding interests in the Global Securities or Global Receipts through DTC, will receive Definitive Registered Securities or Definitive Registered Receipts, respectively. In addition, holders may request to receive Receipts and Securities in definitive form upon the occurrence of an event of default (see “Book-Entry, Delivery and Form — Issuance of Definitive Registered Securities and Definitive Registered Receipts”). In such circumstances, beneficial holders of the Securities and Receipts otherwise entitled to an exemption may only secure the exemption by complying independently with the tax procedures provided under Italian tax legislation (see “Certain Tax Considerations — Italian taxation — Tax treatment of the Securities — Non-Italian resident holders of the Securities”). Should a beneficial holder suffer the application of substitute tax as a consequence of these procedures no longer being in place or because of a failure by such beneficial holder to comply with the procedures Enel has arranged, such beneficial holder may request a refund of the substitute tax so applied directly from the Italian tax authorities within 48 months from the application of the tax. Such procedures may entail costs and the refunds may be subject to extensive delays. See “Annex B — Acupay Italian Tax Compliance and Relief Procedures — Article III. Procedure for Direct Refund from Italian Tax Authorities.” Beneficial Owners of the Securities and the Receipts should in any event consult their tax advisors on the procedures required under Italian tax law to recoup the substitute tax in these circumstances. Investors should be aware that the Tax Certification Procedures may be revised from time to time (i) if necessary to reflect a change in applicable Italian Law, regulation, ruling or interpretation thereof or to comply with requests of any supervisory authorities; (ii) if necessary to reflect a change in applicable clearing systems rules or procedures or to add procedures for one or more new clearing systems; provided that the parties are provided with written communications from the applicable 35 clearing system or clearing systems to this effect (including, without limitation, written communications in the form of an e- mail or written posting); or (iii) in any other manner that is not materially adverse to Holders or Beneficial Owners (each, as defined in the Deposit Agreement) of Receipts. Any revision to the procedures agreed by the Issuer, Monte Titoli and Acupay will be binding on all Holders (as defined in the Deposit Agreement).

The Issuer has agreed in the Indenture, so long as any principal amount of the Securities remain outstanding, insofar as it is reasonably practicable, to maintain, implement or arrange the implementation of procedures to facilitate the collection of information concerning the Securities and the Beneficial Owners thereof so long as such collection is required to allow payment on the Global Securities free and clear of substitute tax to eligible investors. However, the Issuer cannot assure that it will be practicable to do so, or that such procedures will be effective. See “Important Italian Substitute Tax Requirements and Information in respect of the Tax Certification Procedures.”

Transfers of N Receipts are permitted only subject to the limitations described in the Tax Certification Procedures. X Receipts are subject to mandatory exchange into N Receipts if the investor who beneficially owns the X Receipts is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the X Receipts or does not comply with the Tax Certification Procedures (including because of any failure of, or non-compliance with, the Tax Certification Procedures by a Financial Intermediary) The Tax Certification Procedures provide that Beneficial Owners of X Receipts (as defined in “Description of the Receipts and the Deposit Agreement”) (i) who are not eligible to receive payments of interest in respect of the X Receipts free of Italian substitute tax, (ii) who fail to submit the applicable self-certification forms, or (iii) for whom an applicable Financial Intermediary has failed to supply correct beneficial owner information in connection with the settlement of purchases or sales of X Receipts with respect to any of the Beneficial Owners holding through such Financial Intermediary (including in each case because of any failure of, or non-compliance with, the Tax Certification Procedures), will in each case be subject to a Mandatory Exchange into beneficial interests in N Receipts (as defined in “Description of Receipts and the Deposit Agreement”), which are paid interest net of Italian substitute tax. Investors in N Receipts (that are subject to the application of Italian substitute tax) will be permitted to transfer their beneficial interests in the N Receipts only subject to the limitations described in the Tax Certification Procedures, including, without limitation, payment of the Italian substitute tax on any interest, including any original issue discount, accrued but not yet paid until the settlement date of a prospective transfer. Any interest paid in respect of such N Receipts will be subject to Italian substitute tax on the entire amount of the next interest payment, currently at a rate of 20.0%, regardless of how long an interest in the N Receipts has been held by the holder during such coupon period, and there can be no assurance that the relevant investor will be able to avail itself of any credit for Italian taxes relating to interest accrued before the purchase of the relevant Receipt. See “Book-Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures” and “Annex B — Acupay Italian Tax Compliance and Relief Procedures.” A holder of beneficial interests in N Receipts (paying interest net of Italian substitute tax) holding such interests as of the applicable interest payment record date will receive interest payments net of the full amount of Italian substitute tax accrued during an entire interest period, regardless of when the purchase was actually settled during such period. However, the Tax Certification Procedures contemplate mechanisms for the accrual and payment of credits by Monte Titoli with respect to the Italian substitute tax accrued during the portion of the interest period during which such holder did not hold such beneficial interest in the N Receipts. The Issuer is not responsible for such procedures and cannot assure that such procedures will ultimately prove to be effective. If such procedures are not effective for whatever reason, the holder of the beneficial interest in the Receipts would have to request a refund of Italian substitute tax directly from the Italian tax authorities within 48 months from the application of such tax.

The Global Securities will be held in book-entry only form through Monte Titoli and the Receipts will be held in book- entry only form through DTC. Therefore, you will have to rely on the respective procedures of these clearing systems as well as those of the Receipt Issuer for transfer, payment and to exercise any rights and remedies The Securities will be evidenced by Global Securities registered in the name of Monte Titoli, but will be issued in Monte Titoli in dematerialized form. Initially, all of the book-entry interests in the Global Securities will be credited to a third-party securities account in Monte Titoli of Citibank, N.A., London Branch, as Receipt Issuer. Beneficial interests in the Securities represented by Receipts will be evidenced by Global Receipts in registered form, which will be issued and delivered by the Receipt Issuer to DTC, the principal U.S. securities central depositary. Citibank, N.A., London Branch will hold the Global Receipts as custodian for DTC and the Global Receipts will be registered in the name of Cede & Co., DTC’s nominee, for the benefit of DTC’s participants. Book-entry interests in the Global Receipts will be shown on, and transfers thereof will be effected only through, records maintained by DTC or any other securities intermediary holding an interest directly or indirectly through DTC. The Securities and the Receipts will only be available in definitive form under certain limited circumstances. See “Book-Entry, Delivery and Form — Issuance of Definitive Registered Securities and Definitive 36

Registered Receipts.” The laws of some jurisdictions, including some states in the United States, may require that certain purchasers of securities take physical delivery of such securities in definitive form. The foregoing limitations may impair a holder’s ability to own, transfer or pledge its beneficial interests in the Securities and the Receipts. Enel will comply with its obligations under the Global Securities by making payments to the holders of Global Securities, as shown on the register maintained for that purpose by the Trustee. It is expected that the holder of the Global Securities will be Monte Titoli, which will hold the Global Securities represented by Receipts for and arrange for payment of amounts thereon to the holders of beneficial interests in the Receipts through the facilities of Citibank, N.A., London Branch to DTC for onward transmission to such beneficial owners through the participants of DTC. Neither Enel nor the Managers will have any responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Receipts. With respect to interests in its Securities represented by Global Receipts, the Issuer’s payment obligations under the Securities will be discharged upon receipt of payment by Monte Titoli. A holder of beneficial interests in Receipts must rely on the procedures of DTC and the Financial Intermediaries. Enel cannot assure holders that the procedures of these entities will be adequate to ensure that beneficial owners receive payments in a timely manner or at all. A holder of beneficial interests in the Receipts will not have a direct right to act upon solicitations Enel may announce with respect to the Securities. Instead, holders of beneficial interests in Receipts will be permitted to act only to the extent they receive appropriate assignment of authority to act from upstream intermediary parties including, the Receipt Issuer, DTC and, if applicable, the Financial Intermediaries and Monte Titoli. Similarly, if Enel defaults on its obligations under the Securities, holders of beneficial interests in the Receipts will be restricted from acting in accordance with the terms of the Deposit Agreement, DTC’s procedures and, if applicable, the procedures of the Financial Intermediaries as well as the procedures of Monte Titoli. Enel cannot assure holders of beneficial interests in Receipts that the procedures of the aforesaid custodial intermediaries will be adequate to allow them to exercise their rights or receive payment under the Securities in a timely manner, or at all.

USE OF PROCEEDS

Enel estimates that the net proceeds from the sale of the Securities will be approximately $1,227,912,500, after deducting underwriting discounts and commissions from the issuance and sale of the Securities. Enel expects that such net proceeds will be used for general corporate purposes, including investments. See “Capitalization.”

CAPITALIZATION

The following table sets forth the Group’s capitalization as of June 30, 2013 on (a) an actual basis; and (b) an adjusted basis to give effect to the issuance of the Securities and the expected use of proceeds therefrom. Prospective investors should read this table in conjunction with the sections entitled “Risk Factors,” “Use of Proceeds,” “Overview ― Summary Financial Information” and “Presentation of Financial and Other Information,” as well as the Audited Consolidated Financial Statements and Unaudited Condensed Interim Consolidated Financial Statements and accompanying notes thereto included in this Offering Circular.

As of As of June 30, 2013 June 30, 2013 (historical) (as adjusted)

(€ million) Cash and Cash Equivalents ...... 5,714 6,633

Financial Indebtedness: Short-Term Financial Indebtedness (including current portion of long term debt) 8,263 8,263 Long-Term Financial Indebtedness (excluding current portion of long term debt) 54,077 54,077 Securities offered hereby ...... — 919

Total Financial Indebtedness ...... 56,626 56,626

Shareholders’ Equity: Share capital ...... 9,403 9,403 Legal reserve ...... 1,881 1,881 Other reserves ...... 6,008 6,008 Retained earnings ...... 16,220 16,220 Net income ...... 1,680 1,680 Total equity attributable to shareholders of the Parent ...... 35,192 35,192 Equity attributable to minority interests...... 17,530 17,530

Total Shareholders’ Equity ...... 52,722 52,722

TOTAL CAPITALIZATION ...... 109,348 109,348

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with and is qualified in its entirety by reference to the Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements and accompanying notes thereto included in this Offering Circular. See also “Presentation of Financial and Other Information,” “Risk Factors” and “Capitalization.” With the exception of certain non-IFRS financial measures discussed in “Presentation of Financial and Other Information,” the Group’s financial information as of and for the years ended December 31, 2012, 2011 and 2010 and as of and for the six months ended June 30, 2013 and 2012, included in the following tables, has been derived from the Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements. Interim results for the six months ended June 30, 2013 are not necessarily indicative of the results of operations that may be expected for any other interim period in 2013 or for the full year. The following tables reflect certain restatements of the Issuer’s comparative figures as of and for the years ended December 31, 2012, 2011 and 2010 and as of and for the six months ended June 30, 2012. See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.” Income statement data The following table sets forth the Group’s summary consolidated income statement data for the years ended December 31, 2012, 2011 (as restated), 2011 and 2010, and for the six-month periods ended June 30, 2013, 2012 (as restated) and 2012. The summary consolidated income statement data for the years ended December 31, 2012, 2011 (restated), 2011 and 2010 does not reflect the application of the adoption of “IAS 19R – Employee Benefits.” Further, the summary consolidated income statement data for the years ended December 31, 2011 and 2010 does not reflect the application of the new accounting policy for white certificates (EECs). See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.”

Six months ended June 30, Year ended December 31,

2012 2011 2013 (restated)(1) 2012 2012 (restated)(2) 2011 2010

Operating income...... 5,168 5,385 5,341 7,735 11,278 11,366 11,258

Financial income ...... 1,446 1,497 1,497 2,272 2,693 2,693 2,576 Financial expense...... 2,713 2,998 2,998 5,275 5,717 5,717 5,774 Share of income/(expense) from equity investments accounted for using the equity method ...... 55 45 45 88 96 96 14

Income before taxes ...... 3,956 3,929 3,885 4,820 8,350 8,438 8,074

Income taxes ...... 1,473 1,515 1,493 2,745 3,027 3,080 2,401 Income from continuing operations ...... 2,483 2,414 2,392 2,075 5,323 5,358 5,673

Net income for the year/period (shareholders of the Parent and minority interests) ...... 2,483 2,414 2,392 2,075 5,323 5,358 5,673 Attributable to the shareholders of the Parent ...... 1,680 1,835 1,821 865 4,113 4,148 4,390 Attributable to minority interests ...... 803 579 571 1,210 1,210 1,210 1,283 Earnings per share (Euro) ...... 0.18 0.20 0.19 0.09 0.44 0.44 0.47

______(1) Restated to reflect the retrospective effect of the adoption of “IAS 19R – Employee Benefits.” See Note 2 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. (2) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

Year ended December 31, As of June 30, 2012 2011 2010 2013 (restated)(1) 2012 (restated)(2) 2011 (restated)(3) 2010

Total assets ...... 169,356 172,094 171,656 169,891 169,805 168,562 168,052

Total Shareholders’ Equity ...... 52,722 52,087 53,158 54,300 54,440 53,866 53,545

Total Liabilities ...... 116,634 120,007 118,498 115,591 115,365 114,696 114,507

Total liabilities and shareholders’ equity ...... 169,356 172,094 171,656 169,891 169,805 168,562 168,052

______(1) Restated to reflect the retrospective effect of the adoption of “IAS 19R – Employee Benefits” and the definitive allocation of the purchase prices of a number of business combinations carried out in 2012. See Note 3 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. (2) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements. (3) Restated to reflect the determination of the final fair value of assets and liabilities in respect of the SE Hydropower business combination. See Note 4 to the 2011 Audited Consolidated Financial Statements.

Six months ended June 30, Year ended December 31,

2011 2013 2012 (restated)(1) 2012 (restated)(2) 2010

Six months ended June 30, Year ended December 31,

2011 2013 2012 (restated)(1) 2012 (restated)(2) 2010

(€ million) Impact of exchange rate fluctuations on cash and cash equivalents ...... (129) 36 29 (74) 214 Increase/(Decrease) in cash and cash equivalents ...... (4,189) 1,838 2,861 1,730 1,053

Investors should not place undue reliance on these non-IFRS measures and should not consider either of these measures to be indicative of the Group’s historical operating results or financial condition; nor are they meant to be predictive of future results. Since companies generally do not calculate these measures in an identical manner, Enel’s measures may not be consistent with similar measures used by other companies. For this reason also, investors should not place undue reliance on non-IFRS financial measures.

Six months Year ended December 31, ended June 30, 2011 2013 2012 (restated) 2011 2010

(€ million) Gross operating margin (EBITDA) ...... 8,293 16,738 17,605 17,717 17,480 Net Financial Debt ...... 44,515 42,948 44,629 44,629 44,924 The following tables demonstrate the methodology used by the Group to determine its gross operating margin (EBITDA) and net financial debt. Gross operating margin

Six months ended June 30, Year ended December 31,

2012 2011 2013 (restated) 2012 2012 (restated) 2011 2010

(€ million) Operating income ...... 5,168 5,385 5,341 7,735 11,278 11,366 11,258 Plus: Depreciation, amortization and impairment losses ...... 3,125 2,930 2,941 9,003 6,327 6,351 6,222

Gross operating margin (EBITDA) ...... 8,293 8,315 8,282 16,738 17,605 17,717 17,480

Net financial debt

As of Year ended December 31, June 30, 2013 2012 2011 2010

(€ million)

Long-term debt: Long-term debt ...... 54,077 55,959 48,703 52,440 Long-term financial receivables and securities ...... (3,695) (3,576) (3,576) (2,567)

Net long-term debt ...... 50,382 52,383 45,127 49,873

Net short-term financial debt ...... (5,867) (9,435) (498) (4,949)

NET FINANCIAL DEBT ...... 44,515 42,948 44,629 44,924

Financial debt of “Assets held for sale” ...... 13 (10) (1) 636

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the Group’s results of operations and financial condition as of and for the years ended December 31, 2012, 2011 and 2010, and as of and for the six months ended June 30, 2013 and 2012. The financial data included in the below discussion has been derived from the Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements, with the exception of certain non-IFRS financial measures used by the Issuer’s management, including the Group’s gross operating margin (EBITDA), and the Group’s net financial debt, net non-current assets, net current assets, net assets held for sale and net capital employed. You should read this discussion in conjunction with the sections entitled “Presentation of Financial and Other Information,” “Selected Financial Data” and “Capitalization,” as well as the Unaudited Condensed Interim Consolidated Financial Statements and Audited Consolidated Financial Statements and accompanying notes thereto included in this Offering Circular.

This discussion includes forward-looking statements which, although based on assumptions that Enel considers reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those expressed or implied by the forward-looking statements. See “Forward-Looking Statements” and, for a discussion of risks and uncertainties facing the Group, also see “Risk Factors.” Overview According to Enel’s estimates, the Group is the leading electricity operator in both Italy and Spain and one of the leading global operators in the fields of generation, distribution and sales of electricity. Moreover, according to Enel’s estimates, it is the largest Italian power company and Europe’s second largest listed utility by installed capacity. Enel has a presence in 40 countries on four continents with nearly 98 GW of net installed capacity and sells electricity and gas to approximately 60.5 million customers as of December 31, 2012. The Group had operational generation plants (thermal, hydroelectric, geothermal, nuclear and other plants) with a total net maximum electrical capacity of 97.8 GW as of December 31, 2012 and 97.3 GW as of December 31, 2011 and December 31, 2010, respectively. For the six months ended June 30, 2013, net electricity production was 138.2 TWh and distribution of electricity was 198.8 TWh. For the year ended December 31, 2012, net electricity production amounted to 295.8 TWh and distribution of electricity amounted to 413.9 TWh. For the year ended December 31, 2011, net electricity production amounted to 293.9 TWh and distribution of electricity amounted to 419.5 TWh. For the year ended December 31, 2010, net electricity production amounted to 290.2 TWh and distribution of electricity amounted to 431.6 TWh.

The following table sets forth the Group’s key operating data as of and for the six months ended June 30, 2013 and as of and for the years ended December 31, 2012, 2011 and 2010.

Year ended December 31, Six months ended June 30, 2013 2012 2011 2010

Italy Abroad Total Italy Abroad Total Italy Abroad Total Italy Abroad Total

Net electric ity product ion (TWh) .. 36.0 102.2 138.2 74.5 221.3 295.8 79.0 214.9 293.9 81.6 208.6 290.2 Net maxim um electric al capacit y (GW) N/A N/A N/A 39.9 57.9 97.8 39.9 57.4 97.3 40.5 56.8 97.3 Electricity convey ed through the grid (TWh) .. 113.3 85.5 198.8 238.2 175.7 413.9 246.4 173.1 419.5 247.0 184.6 431.6 44

Year ended December 31, Six months ended June 30, 2013 2012 2011 2010

Italy Abroad Total Italy Abroad Total Italy Abroad Total Italy Abroad Total

Electricity sold (TWh)( 1) ...... 45.8 100.6 146.4 102.3 214.5 316.8 104.2 207.6 311.8 113.4 195.6 309.0 Number of end- users of the electric busines s (millio ns) ...... 28.1 27.8 55.9 28.0 28.1 56.1 28.9 27.9 56.8 31.5 27.7 59.2

Note: (1) Excluding sales to resellers. According to Enel’s estimates, the Group is one of the principal international operators in the development and management of energy production, with a net maximum electrical capacity of 97.8 GW as of December 31, 2012. The Group also imports and sells natural gas in Italy, Spain and elsewhere. The Group sold approximately 4.9 billion cubic meters of gas worldwide in the six months ended June 30, 2013, 8.7 billion cubic meters of gas worldwide in 2012, 8.5 billion cubic meters of gas worldwide in 2011 and 8.9 billion cubic meters of gas worldwide in 2010. In the six months ended June 30, 2013, the Group’s total revenues were €40,157 million, and the net income attributable to shareholders of Enel was €1,680 million. In 2012, the Group’s total revenues were €84,889 million and the net income attributable to shareholders of Enel was €865 million, including the effect of a write-down of goodwill of €2,575 million mainly related to Endesa’s activities in Iberia. In 2011, the Group’s total revenues were €79,514 million, and the net income attributable to shareholders of Enel was €4,113 million. In 2010, the Group’s total revenues were €73,377 million, and the net income attributable to shareholders of Enel was €4,390 million. As of June 30, 2013, the Group employed 73,537 employees, of which 36,246 were employed in Italy and 37,291 were employed abroad. As of December 31, 2012, the Group employed a total of 73,702 employees, of which 36,205 were employed in Italy and 37,497 were employed abroad. As of December 31, 2011, the Group employed a total of 75,360 employees, of which 36,842 were employed in Italy and 38,518 were employed abroad. As of December 31, 2010, the Group employed a total of 78,313 employees, of which 37,583 were employed in Italy and 40,930 were employed abroad. Presentation and comparability of financial statements There were certain restatements of the Issuer’s comparative figures as of and for the years ended December 31, 2012, 2011 and 2010 and as of and for the six months ended June 30, 2012. See “Presentation of Financial and Other Information — Restatements and changes in segment presentation.”

Key factors affecting the Group’s results of operations Among the primary factors affecting the Group’s results of operations in respect of the periods under consideration are the following:  Acquisitions and divestitures: Over the past three years, one of the factors affecting the Group’s results of operations has been its acquisition of interests in new consolidated subsidiaries. These acquisitions are discussed in detail under “— Acquisitions and divestitures.”  Leverage: The Group is highly leveraged. The Group’s net financial debt (Enel method) totaled €44,515 million as of June 30, 2013 and €42,948 million as of December 31, 2012. See “— Debt and liquidity.” The Group’s financial expense amounted to €2,713 million for the six months ended June 30, 2013, €5,275 million in the year ended December 31, 2012 and €5,717 million in the year ended December 31, 2011. See “Risk Factors — Risks related to the Group — The Group is burdened by significant indebtedness, which it must generate sufficient cash flow to service.”

 Regulation and competition: Nearly every aspect of the Group’s business is subject to regulation in some manner or another. Regulators determine the level of energy market competition permitted in their respective jurisdictions and, in certain markets, determine, or mandate the procedures for the determination of, the prices charged for the Group’s electricity and natural gas. Other laws and regulations influence the Group’s environmental protection costs

(including CO2 abatement costs), among other things. See “Regulation.”  The macroeconomic situation in Italy and Spain: The Group’s activities in Italy and Spain are impacted by the ongoing financial and economic crisis. The demand weakness, together with excess generation capacity in these two markets, have a negative impact both on the output and generation margins of the divisions operating in Italy and Spain. The reduction in margins primarily reflects lower prices received for the dispatching of power to more efficient conventional and renewable power plants, especially photovoltaic plants in Italy and wind farms in Spain, that pursuant to government incentives have priority over less efficient plants in receiving power. Acquisitions and divestitures Between 2010 and June 30, 2013, the Group’s financial results were impacted by a number of acquisitions and divestitures. The most important of which were mentioned below. 2013  Acquisition, on March 22, 2013, of 100% of Parque Eolico Talinay Oriente, a Chilean company operating in the wind generation sector.  Divestiture, on April 8, 2013, of 51% of the Buffalo Dunes Wind Project, a U.S. company operating in the wind generation sector.  Acquisition, on May 22, 2013, of an additional 26% interest in each of the Chisholm View Wind Project and the Prairie Rose Wind Farm, two U.S. companies operating in the wind generation sector, in each of which the Group previously held an interest of 49%.

See Note 2 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements. 2012  Acquisition, on June 28, 2012, of 100% of Stipa Nayaa, a Mexican company operating in the wind generation sector.  Disposal, on October 9, 2012, of the entire share capital of Endesa Ireland, a company operating in the generation of electricity.  Acquisition, on December 21, 2012, of 99.9% of Eólica Zopiloapan, a Mexican company operating in the wind generation sector. See Note 5 to the 2012 Audited Consolidated Financial Statements.

2011  Disposal, on February 24, 2011, of Compañía Americana de Multiservicios (“CAM”), which operates in Latin America in the general services sector.  Disposal, on March 1, 2011, of Synapsis IT Soluciones y Servicios (“Synapsis”), which operates in Latin America in the IT services sector.  Loss of control, as from April 1, 2011, of Hydro Dolomiti Enel S.r.l. (“Hydro Dolomiti Enel”) as a result of the change in Hydro Dolomiti Enel’s governance structure, as provided for in the agreements reached between the two shareholders in 2008. Accordingly, Hydro Dolomiti Enel is consolidated on a proportionate basis (with the stake held by the Group in Hydro Dolomiti Enel remaining unchanged at 49% both before and after the change in governance arrangements) rather than on a full line-by-line basis.  Acquisition of full control (from joint control) of the assets and liabilities retained by Enel Unión Fenosa Renovables (“EUFER”), an equally held joint venture between EGPE and Gas Natural Fenosa, following the break-up of the joint venture between Enel Green Power España (“EGPE”), a subsidiary of Enel Green Power (“EGP”), and its partner Gas Natural under the agreement finalized on May 30, 2011. As from the date of execution of the agreement, those assets are therefore consolidated on a full line-by-line basis.  Disposal, on June 28, 2011, to Contour Global LP of the entire capital of the Dutch companies Maritza East III Power Holding BV and Maritza O&M Holding Netherland BV. These companies respectively owned 73% of the Bulgarian company Enel Maritza East 3 AD and 73% of the Bulgarian company Enel Operations Bulgaria AD. 46

 Disposal, on November 30, 2011, of 51% of Deval and Vallenergie to Compagnia Valdostana delle Acque, a company owned by the Region of Valle d’Aosta, which already held the remaining 49% of the companies involved.  Acquisition, on December 1, 2011, of 50% of Sviluppo Nucleare Italia S.r.l. (“Sviluppo Nucleare Italia”), in which the Group already held a stake of 50%, which had given it joint control with Electricité de France; as from that date Sviluppo Nucleare Italia has been consolidated on a line-by-line basis. See Note 5 to the 2011 Audited Consolidated Financial Statements. 2010  Acquisition, on June 1, 2010, of control of SE Hydropower, which operates in the generation of electricity in the Province of Bolzano. Control was acquired with the transfer to SE Hydropower of certain generation assets of Enel Produzione. Despite holding only 40% of SE Hydropower, since the acquisition date the Group has consolidated it on a full line-by-line basis under specific shareholders’ agreements concerning the governance of SE Hydropower.  Disposal, on July 1, 2010, of 50.01% of Endesa Hellas, a Greek company operating in the renewables generation sector.  Disposal, on December 17, 2010, of 80% of Nubia 2000 (now Endesa Gas T&D), a company owning assets (acquired during the year by Endesa Gas) in the gas transport and distribution industry in Spain. The sale also includes a 35% stake in Gas Aragon, which had previously been acquired by Nubia 2000. See Note 4 to the 2010 Audited Consolidated Financial Statements. Critical accounting policies The Group’s results of operations, as presented below, are based on the application of IFRS. The application of these principles often requires management to make certain judgments, assumptions and estimates that may result in different financial presentations. The Issuer believes that certain accounting principles are critical in terms of understanding the Group’s financial statements. The Issuer believes that the Group’s accounting policies that are most subject to management’s judgments, assumptions and estimates are the following: Use of estimates and management judgment The preparation of financial statements in compliance with IFRS requires management to take decisions and make estimates and assumptions that may impact the value of revenues, costs, assets and liabilities and the related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable in the circumstances. They are formulated when the carrying amount of assets and liabilities is not easily determined from other sources. Furthermore, certain accounting principles require subjective and complex judgments used in the preparation of financial statements. Accordingly, a different financial presentation could result depending on the judgment, estimates or assumptions that are used. Such estimates and assumptions regard, but are not specifically limited to: depreciation, amortization, interest rates, discount rates, future commodity prices, investment returns, international economic policy, future costs associated with long-term contractual obligations and future compliance costs associated with environmental regulations. Revenue recognition Revenues from sales to customers are recognized on an accruals basis. Revenues from sales of electricity and gas to retail customers are recognized at the time the electricity or gas is supplied and include, in addition to amounts invoiced on the basis of periodic (and pertaining to the year) meter readings, an estimate of the value of electricity and gas distributed during the period but not yet invoiced, which is equal to the difference between the amount of electricity and gas delivered to the distribution network and that invoiced in the period, taking account of any network losses. Revenues between the date of the last meter reading and the end of the year are based on estimates of the daily consumption of individual customers calculated on the basis of their consumption record, adjusted to take account of weather conditions and other factors that may affect estimated consumption. Pensions and other post-employment benefits Some of the Group’s employees participate in pension plans offering benefits based on their wage history and years of service. Certain employees are also eligible for other post-employment benefit schemes. The expenses and liabilities of such plans are calculated on the basis of estimates carried out by consulting actuaries, who use a combination of statistical and actuarial elements in their calculations, including statistical data on past years and forecasts of future costs. Other components of the estimation that are considered include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of wage increases, the inflation rate and trends in the cost of medical care. 47

These estimates can differ significantly from actual developments due to changes in economic and market conditions, increases or decreases in withdrawal rates and the lifespan of participants, as well as changes in the effective cost of medical care. Such differences may have a substantial impact on the quantification of pension costs and other related expenses. Recoverability of non-current assets The carrying amount of non-current assets and assets held for sale is reviewed periodically and wherever circumstances or events suggest that more frequent review is necessary. Goodwill is reviewed at least annually. Such assessments of the recoverable amount of assets are carried out in accordance with the provisions of IAS 36.

In the case of assets held for sale, the assessment is not based on a determination of the value in use of the assets but rather on the amount deemed recoverable through disposal, taking into account the offers already received from parties interested in acquiring the assets. When the value of a group of non-current assets is considered to be impaired, it is written down to its recoverable value, as estimated on the basis of the use of the assets and their future disposal, in accordance with the Issuer’s most recent corporate plans. The estimates of such recoverable values are considered reasonable. Nevertheless, possible changes in the estimation factors on which the calculation of such values is performed could generate different recoverable values. The analysis of each group of non-current assets is unique and requires management to use estimates and assumptions considered prudent and reasonable in the specific circumstances. With regard to mineral assets, the recoverability of these assets involves the application of estimates on the measurement of natural gas reserves using engineering techniques. In order to define a reserve as being certain, thereby identifying the quantity of natural gas that can be extracted with reasonable certainty over time, it is necessary to verify the existence of certain geological and engineering characteristics. Nonetheless, this assessment is often subject to change in response to changing conditions. Depreciable value of certain elements of Italian hydroelectric plants following enactment of Law 134/2012 Law 134/2012 containing “urgent measures for growth,” published in the Gazzetta Ufficiale on August 11, 2012, introduced a sweeping overhaul of the rules governing Italian hydroelectric concessions. Among its various provisions, the law establishes that five years before the expiration of a major hydroelectric water diversion concession and in cases of lapse, relinquishment or revocation, where there is no predominant public interest in using the waters for another purpose that is incompatible with continuing to use such waters for hydroelectric purposes, the competent public entity shall organize a public call for tender for the award for consideration of the concession for a period ranging from 20 to a maximum of 30 years. In order to ensure operational continuity, the law also established procedures for the transfer from the departing concession holder to the new concession holder of ownership of the business unit necessary to operate the concession, including all legal relationships associated with the concession, against payment of a price to be determined pursuant to negotiations between the outgoing concession holder and the grantor agency, taking into due account the following elements:  for intake and governing works, penstocks and outflow channels, which under the consolidated law governing waters and electrical plants are to be relinquished free of charge (Article 25 of Royal Decree 1775/1933), the payment shall be determined on the basis of revalued cost less public capital grants (also revalued) received by the concession holder for the construction of such works, as reduced for ordinary wear and tear; and  for other property, plant and equipment, the payment shall be determined on the basis of market value, meaning replacement value, as reduced for ordinary wear and tear. The new regulations introduce major changes in the transfer of ownership of the business unit for the operation of hydroelectric concessions. However, the Issuer believes that there are also difficulties associated with the practical application of these principles due to the uncertainties that do not permit the formulation of a reliable estimate of the value that can be recovered at the end of existing concessions (residual value). The main uncertainties are the following:  the price for the transfer of the business unit must be negotiated with the grantor agency five years prior to the expiration of the concession on the basis of currently unavailable technical and financial parameters that will be announced in a decree of the Ministry for Economic Development on the basis of the advice of the Authority;  it is reasonable to expect that the process of quantifying that value will require assessments involving significant uncertainties, especially as regards the determination of the ordinary wear and tear of the assets under discussion and the positions that the parties involved could take; 48

 the law itself, which acknowledges the existence of objective uncertainties associated with the determination of the price, but establishes that in the event of disagreement between the concession holder and the grantor the issue shall be resolved through recourse to a panel of three independent and qualified third parties; and  at present, no historic data are available as the new rules have not yet been applied. In view of the above uncertainties, management has concluded that it cannot formulate a reasonable and reliable estimate of residual value. This change in legislation, whose application still requires the new concession holder to make a payment to the departing concession holder, prompted management to review the depreciation period for assets classified as to be relinquished free of charge prior to the enactment of Law 134/2012 (until last year, in view of the fact that they were to be relinquished free of charge, they were depreciated over the shorter of the term of the concession and the useful life of each asset). The length of such depreciation period no longer depends on the term of the concession but, if longer, on the economic and technical life of the individual asset. If further information should become available that would enable a reliable estimate of residual value, the carrying amounts of the assets involved will be modified on a prospective basis. Recoverability of deferred tax assets As of December 31, 2012, the financial statements report deferred tax assets in respect of tax losses to be reversed in subsequent years and income components whose deductibility is deferred in an amount whose recovery is considered by management to be highly probable. The recoverability of such assets is subject to the achievement of future profits sufficient to absorb such tax losses and to use the benefits of the other deferred tax assets. The assessment of recoverability takes account of the estimate of future taxable incomes and is based on prudent tax planning strategies. However, if the Issuer determines that it is unable to recover all or part of recognized tax assets in future years, the consequent adjustment would be taken to the income statement in the year in which this circumstance arises. Litigation The Group is involved in various legal disputes regarding the generation, transport and distribution of electricity. In view of the nature of these proceeding, it is not always objectively possible to predict the ultimate outcome of such disputes, which in some cases could be unfavorable to the Group.

Provisions are made to cover all significant liabilities to the extent it has been determined by legal advisors that an unfavorable outcome is probable and a reasonable estimate of the amount of the loss can be made. Provision for doubtful accounts The provision for doubtful accounts reflects estimates of losses on the Group’s receivables portfolio. Provisions have been made against expected losses calculated on the basis of historical experience with receivables with similar credit risk profiles, current and historical arrears, eliminations and collections, as well as the careful monitoring of the quality of the receivables portfolio and current and forecast conditions in the economy and the relevant markets.

The estimates and assumptions are reviewed periodically and the effects of any changes are taken to the income statement in the year they accrue. The Issuer believes that the Group’s reserves are adequate; however, different assumptions or changes in economic circumstances could result in changes to the allowance for doubtful accounts and therefore could affect earnings. Decommissioning and site restoration In calculating liabilities in respect of decommissioning and site restoration costs, especially for the decommissioning of nuclear power plants and the storage of waste fuel and other radioactive materials, the estimate of future costs is a critical process in view of the fact that such costs will be incurred over a very long period of time, estimated at up to 100 years. The obligation, based on financial and engineering assumptions, is calculated by discounting the expected future cash flows that the Issuer considers it will have to pay for the decommissioning operation. The discount rate used to determine the present value of the liability is the pre-tax risk-free rate and is based on the economic parameters of the country in which the plant is located. That liability is quantified by management on the basis of the technology existing at the measurement date and is reviewed each year, taking account of developments in decommissioning and site restoration technology, as well as the ongoing evolution of the legislative framework concerning the protection of health and the environment. Subsequently, the value of the obligation is adjusted to reflect the passage of time and any changes in estimates.

Other In addition to the items listed above, estimates were also used with regard to the valuation of financial instruments, share- based payment plans and the fair value measurement of assets acquired and liabilities assumed in business combinations. Management judgments Identification of CGUs In application of IAS 36 “Impairment of assets,” the goodwill recognized in the consolidated financial statements of the Group as a result of business combinations are allocated to individual or groups of CGUs that will benefit from the combination. A CGU is the smallest group of assets that generates largely independent cash inflows. In identifying such CGUs, management takes into account the specific nature of its assets and the business in which it is involved (geographical area, business area, regulatory framework, etc.), verifying that the cash flows of a given group of assets were closely interdependent and largely independent of those associated with other assets (or groups of assets). The assets of each CGU are also identified on the basis of the manner in which management manages and monitors those assets within the business model adopted. In particular, the CGUs identified in the Iberia and Latin America division are represented by groups of electricity/gas production, distribution and sales assets in the Iberian peninsula and certain countries in Latin America that are managed on a unified basis by the Group given the close interdependence of the related cash flows, also in view of the geographical, cultural and social similarities of the countries and markets in which they operate, as well as technical, regulatory operational performance aspects. The CGUs identified in the Generation and Energy Management division and the Sales division are represented by assets resulting from business combinations involving gas regasification operations in Italy and the Group’s Italian retail gas market or by uniform groups of assets operating in the sale or generation of electricity. The CGUs identified in the Renewable Energy division are represented (with a number of minor exceptions made in Italy and Spain to reflect the Group’s organizational model) by the group of assets exclusively associated with the generation of electricity from renewable energy resources located in geographical areas considered uniform on the basis of regulatory and contractual aspects and characterized by a high degree of interdependence of business processes and substantial integration in the same geographical area. The CGUs identified in the International division are represented by electricity generation and distribution/sales assets identified with business combinations and which constitute, by geographical area and business, individual units generating independent cash flows. The CGUs identified by management to which the goodwill recognized in these consolidated financial statements has been allocated are indicated in the section on intangible assets, to which the reader is invited to refer. The number and scope of the CGUs are updated systematically to reflect the impact of new business combinations and reorganizations carried out by the Group. Determination of the existence of control IAS 27 “Consolidated and separate financial statements” defines control as power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence of control does not depend solely on ownership of a majority shareholding or the contractual form used in the acquisition. Accordingly, management must use its judgment in determining whether specific situations give the Group the power to govern the financial and operating policies of the investee. For subsidiaries consolidated on a full line-by-line basis in these financial statements for which control does not derive from ownership of a majority of voting rights, management has analyzed any agreements with other investors in order to determine whether such agreements give the Group the power of governance indicated above, even though it holds a minority share of voting rights. In this assessment process, management also took account of potential voting rights (call options, warrants, etc.) in order to determine whether they would be currently exercisable as of the reporting date. Following such analysis, in 2012 the Group consolidated certain companies (Emgesa, Codensa and SE Hydropower) on a line-by-line basis even though it does not hold more than half of the voting rights. Application of IFRIC 12 “Service concession arrangements” to concessions IFRIC 12 “Service concession arrangements” establishes that, depending on the characteristics of the concession arrangements, the infrastructure used to deliver public services shall be recognized under intangible assets or under financial assets, depending, respectively, on whether the concession holder has the right to charge users of the services or it has the right to receive a specified amount from the grantor agency. More specifically, IFRIC 12 applies to public-to-private service concession arrangements if:  the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide these services, and at what price; and 50

 the grantor controls — through ownership or otherwise — any significant residual interest in the infrastructure at the end of the term of the arrangement. In assessing the applicability of these provisions for the Group, management carefully analyzed existing concessions. On the basis of that analysis, the provisions of IFRIC 12 are applicable to the infrastructure used for the concessions for the distribution of electricity of a number of companies in the Iberia and Latin America division that operate in Brazil. As of December 31, 2012, depending on the terms of the concessions, such asset are recognized in intangibles assets for an amount of €2,468 million, and in long-term financial asset for an amount of €594 million.

Results of operations The six months ended June 30, 2013 compared to the six months ended June 30, 2012 (restated) The following table sets forth the Group’s consolidated income statement data for the six months ended June 30, 2013 and 2012 (as restated).

Six months ended June 30,

2013 2012 (Restated) Change

% of % of Amount Revenues Amount Revenues Amount Percentage

(€ millions (€ millions (€ millions

) ) ) Revenues from the sale and transport of 33,789 84.1% 34,914 85.8% (1,125) -3.2% electricity and contributions from the Electricity Equalization Fund and similar bodies ...... Gas sold and transported to end-users ...... 2,608 6.5% 2,461 6.0% 147 6.0% Gains on the disposal of assets 21 0.1% 2 0.0% 19 950.0% Remeasurement at fair value after changes in 320.0% 21 0.1% 5 0.0% 16 control Other services, sales and revenues ...... 3,718 9.3% 3,310 8.1% 408 12.3%

Revenues...... 40,157 100.0% 40,692 100.0% (535) -1.3%

Electricity purchases ...... 14,123 35.2% 14,603 35.9% (480) -3.3% Consumption of fuel for electricity generation . 3,464 8.6% 4,392 10.8% (928) -21.1% Purchase of fuel for trading and natural gas for 2,892 7.2% 2,489 6.1% 403 16.2% resale to end-users ...... Materials ...... 509 1.3% 631 1.6% (122) -19.3% Personnel ...... 2,388 5.9% 2,317 5.7% 71 3.1% Services, leases and rentals ...... 7,397 18.4% 7,470 18.4% (73) -1.0% Other operating expenses ...... 1,495 3.7% 1,314 3.2% 181 13.8% Capitalized costs ...... (659) -1.6% (743) -1.8% 84 -11.3%

Costs ...... 31,609 78.7% 32,473 79.8% (864) -2.7%

Net income/(charges) from commodity risk (255) -0.6% 96 0.2% (351) -365.6% management ...... Gross operating margin (EBITDA)(1) ...... 8,293 20.7% 8,315 20.4% (22) -0.3%

Depreciation, amortization and impairment 3,125 7.8% 2,930 7.2% 195 6.7% losses ...... Operating income ...... 5,168 12.9% 5,385 13.2% (217) -4.0%

Financial income ...... 1,446 3.6% 1,497 3.7% (51) -3.4% Financial expense ...... 2,713 6.8% 2,998 7.4% (285) -9.5% (1,267) -3.2% (1,501) -3.7% 234 -15.6%

Financial income/(expense) ...... 1,473 3.7% 1,515 3.7% -42 -2.8%

Share of income/(expense) on equity investments accounted for using the equity 55 0.1% 45 0.1% 10 22.2% method ......

33333333333 Income before taxes ...... 3,956 9.9% 3,929 9.7% 27 0.7%

Income taxes ...... 2,483 6.2% 2,414 5.9% 69 2.9% Income from continuing operations ...... -- Net Income (Group and minority interests) .. 2,483 6.2% 2,414 5.9% 69 2.9%

Minority interests ...... 803 579 224 38.7% 51

Six months ended June 30,

2013 2012 (Restated) Change

% of % of Amount Revenues Amount Revenues Amount Percentage

(€ millions (€ millions (€ millions

) ) ) GROUP NET INCOME ...... 1,680 1,835 (155) -8.4%

(1) Non-IFRS financial measure. See “Presentation of Financial and Other Information.”

Revenues For the six months ended June 30, 2013, revenues from electricity sales and transport and contributions from the Electricity Equalization Fund and similar bodies amounted to €33,789 million, a decrease of €1,125 million, or 3.2%, compared with the same period of 2012. The decrease was mainly due to the following factors:  a decrease of €1,702 million in revenues from the sale of electricity to end users, primarily due to a decrease in revenues both on regulated markets (€847 million) and on free markets (€855 million), caused by decreased demand;  a decrease of €108 million in revenues from contributions from the Electricity Equalization Fund and similar bodies, primarily due to lower revenues from extra-peninsular generation in Spain caused by a decline in volumes generated and the entry into force of Royal Decree Law 20/2012; and  a decrease of €447 million in revenues from revenues from electricity trading, reflecting a decline in volumes handled. The decrease was partly offset by the increase of €891 million in revenues from the wholesale business, mainly due to higher revenues from sales on electricity exchanges and the increase of €241 million in revenues from the transport of electricity, attributable to greater revenues from the transport of electricity for other operators.

Revenues from gas sold and transported to end users for the six months ended June 30, 2013 amounted to €2,608 million, an increase of €147 million, or 6.0%, compared with the same period of 2012. The increase was mainly due to an increase in volumes sold and higher average sales prices as a result of developments in the international energy situation and the revision of a number of rate components. Gains on the disposal of assets for the six months ended June 30, 2013 amounted to €21 million, an increase of €19 million, , compared to €2 million for the six months ended June 30, 2012. The increase mainly reflected the gain on the disposal of 51% of the Buffalo Dunes Wind Project. Gains from remeasurement at fair value after changes in control for the six months ended June 30, 2013 amounted to €21 million, an increase of €16 million, compared with the same period of 2012. The gains largely reflected the remeasurement at fair value of the net assets pertaining to the Group (equal to 49% of the Buffalo Dunes Wind Project) following the loss of control of the Buffalo Dunes Wind Project, in accordance with the provisions of IFRS 3/Revised. In the six months ended June 30, 2012 those gains included €4 million in respect of the acquisition of an additional 10% of Sociedad Eólica de Los Lances, leading to full control, and €1 million from the adjustment to fair value of the net assets of Enel Stoccaggi, already held by the Group before the purchase of an additional 50%, after which the Group controlled the entire company.Revenues from other services, sales and revenues amounted to €3,718 million in the six months ended June 30, 2013, an increase of €408 million, or 12.3%, compared to €3,310 million for the six months ended June 30, 2012. The increase was primarily due to the increase of €373 million in revenues from the sale of fuels for trading, due primarily to the rise in the average sales price of natural gas. The increase was partly offset by the decrease of €205 million in revenues from connection fees, largely attributable to the decline in the number of connections made. The following table sets forth the Group’s revenues by business segment for the six months ended June 30, 2013 and 2012.

Six months ended June 30, Change

2013 2012 Amount Percentage

(€ millions) Sales ...... 8,712 9,408 (696) -7.4% Generation and Energy Management ... 12,152 11,304 848 7.5% Infrastructure and Networks ...... 3,784 3,784 - - Iberia and Latin America ...... 15,636 16,495 (859) -5.2% 52

Six months ended June 30, Change

2013 2012 Amount Percentage

(€ millions) International ...... 3,817 4,273 (456) -10.7% Renewable Energy ...... 1,502 1,332 170 12.8% Other, Eliminations and Adjustments .. (5,446) (5,904) 458 7.8%

Total ...... 40,157 40,692 (535) -1.3%

Sales Revenues for the six months ended June 30, 2013 amounted to €8,712 million, a decrease of €696 million, or 7.4%, compared with the same period of 2012, due to the a decrease of €638 million in revenues on the regulated electricity market and a decrease of €106 million in revenues on the free electricity market, due primarily to lower volumes sold (down 2.4 TWh). The decrease in revenues on the regulated electricity market was mainly due to the decrease in rate revenues covering generation costs and the decrease in quantities sold (a decline of 1.8 TWh), the effects of which were only partially offset by the increase in revenues recognized in respect of the sales service. A decrease in the provision of distributor services and in the related reimbursements for service interruptions, pursuant to Authority Resolution no. 333/07, caused a €61 million decrease in revenues. The overall decrease was partly offset by the increase of €42 million in revenues from sales to end users on the natural gas market, mainly due to the increase in average sales prices, which in addition to normal market developments reflects an increase in the rate component for retail sales (QVD). Generation and Energy Management Revenues for the six months ended June 30, 2013 amounted to €12,152 million, an increase of €848 million, or 7.5%, compared with the same period of 2012, mainly due to a €281 million increase in revenues from fuel trading and a €1,032 million increase in revenues from electricity sales, mainly due to higher revenues from sales on the Power Exchange (up €1,315 million, due primarily to larger volumes handled), only partially offset by lower revenues from electricity sales to other Group divisions (€351 million), especially the Sales division, which were considerably impacted by the broad decline in demand. The overall increase was partly offset by a decrease of €446 million in revenues from trading on international electricity markets (with a decrease of 3.1 TWh in volumes handled). Infrastructure and Networks Revenues for the six months ended June 30, 2013 amounted to €3,784 million, which was in line with the total registered in the same period of 2012. While there was an increase of €86 million in rate revenues, attributable to the updating of distribution rates following application of resolution of the Authority No. 122/13, an increase in the number of customers served and the recognition of positive prior-year items (€42 million) and a €32 million increase in grants and revenues from sales with respect to energy efficiency certificates (EECs), these were offset by a €103 million decrease in connection fees. Iberia and Latin America Revenues for the six months ended June 30, 2013 decreased by €859 million, or 5.2%, from €16,495 million to €15,636 million, due to the decrease in revenues of €750 million in Europe and €109 million in Latin America. The decrease of revenues in Europe was primarily due to a decline in demand for electricity, which had a negative effect on volumes generated and sold in the end market, a reduction in wholesale and end market prices and a decline in revenues from extra- peninsular generation. These factors were only partially offset by the impact of the introduction of Ministerial Order No. 221/2013, which established an increase in the remuneration for electricity distributors. The decrease in revenues in Latin America was mainly due to lower average sales prices for end users and the unfavorable developments in exchange rates between the local currencies and the Euro. These factors were only partially offset by the effect of the government grant in the amount of €301 million to Edesur, an Argentine energy distribution company controlled by Endesa, under the provisions of a cost monitoring mechanism approved by the Argentine energy regulator in May 2013. International Revenues for the six months ended June 30, 2013 amounted to €3,817 million, a decrease of €456 million, or 10.7%, compared with the same period of 2012. This net decrease was due to the decrease of €559 million in revenues in central Europe, mainly associated with the decrease of revenues in Slovakia (€408 million) primarily due to a decrease in average

53 sales prices and a decrease in revenues from the sale of electricity in France (€147 million) primarily due to a reduction in volumes sold.

This effect was partly offset by the increase of €31 million in revenues in Russia, mainly as a result of an increase in volumes of energy sold. Renewable Energy Revenues for the six months ended June 30, 2013 increased by €170 million, or 12.8%, from €1,332 million to €1,502 million. This performance reflects an increase of €77 million in revenues in North America, an increase of €63 million in revenues in the Iberian Peninsula and Latin America and an increase of €30 million in revenues in Italy and the rest of Europe. The increase in revenues in North America mainly reflected the increase in volumes produced. Excluding the gain realized on the sale of the 51% stake in Buffalo Dunes Wind Project (€20 million) and the recognition in the income statement, in accordance with applicable accounting principles, of the remeasurement at fair value of the assets and liabilities of this company pertaining to the remaining 49% interest held by the Group (€20 million), the increase in revenues in the United States would have been €37 million. The increase in revenues in the Iberian Peninsula and Latin America was mainly due to an €42 million increase in quantities produced in Europe. The increase in revenues in Italy and the rest of Europe was mainly due to an increase of €54 million in revenues in Italy, mainly relating to an increase in sales of green certificates in the amount of €58 million and to greater water availability for the period, which more than offset the decline in average sales prices, and an increase of €41 million in revenues in the rest of Europe, mainly in Romania as a result of the increase in wind power capacity. The increase was partly offset by the decrease of €60 million in revenues from sales of photovoltaic panels. Other Revenues for the six months ended June 30, 2013 amounted to €909 million, a decrease of €21 million, or 2.3%, compared with the same period of 2012, mainly due to a €27 million decrease in revenues from Information and Communications Technology (“ICT”) services and staff and support activities provided by Enel to other companies in the Group, which was offset by an increase in revenues from engineering activities primarily due to the construction of electricity generation equipment and support systems at the nuclear plant in Mochovce, Slovakia, and to activities related to the Porto Empedocle terminal for the regasification of liquefied natural gas. Eliminations and Adjustments Eliminations and Adjustments were mainly done to eliminate the intercompany differences. The following table sets forth the Group’s eliminations between divisions for the six months ended June 30, 2013 and 2012.

Six months ended June 30, Change

2013 2012 Amount Percentage

(€ millions) Sales ...... (77) (76) (1) 1.3% Generation and Energy Management ...... (2,731) (3,113) 382 -12.3% Infrastructure and Networks ...... (2,043) (2,131) 88 -4.1% Iberia and Latin America ...... (35) (61) 26 -42.6% International ...... (317) (331) 14 -4.2% Renewable Energy ...... (276) (246) (30) 12.2% Other ...... (876) (876) - -

Total ...... (6,355) (6,834) 479 7%

Operating costs excluding depreciation, amortization and impairment losses Costs for electricity purchases for the six months ended June 30, 2013 decreased by €480 million, or 3.3%, mainly due to a decrease in business through bilateral contracts (€652 million), and a decrease of other costs for electricity purchases in Italy and in other markets (€471 million), the effects of which were partially offset by an increase in purchases on the Power Exchange (€643 million). Costs for the consumption of fuel for electricity generation for the six months ended June 30, 2013 amounted to €3,464 million, a decrease of €928 million, or 21.1%, compared to the same period in 2012. The decline reflects both the 54 decrease in volumes of electricity from thermal generation and an improvement in the fuel mix, producing a decrease in the unit prices of raw materials. Costs for the purchase of fuel for trading and natural gas for sale to end users amounted to €2,892 million for the six months ended June 30, 2013, an increase of €403 million, or 16.2%, compared with the six months ended June 30, 2012. Costs for materials amounted to €509 million for the six months ended June 30, 2013, a decrease of €122 million compared with the same period of 2012, mainly due to a decrease in provisioning of EUAs and CERs. Personnel costs for the six months ended June 30, 2013 totaled €2,388 million, an increase of €71 million, or 3.1%, compared to the same period of 2012. Costs for services, leases and rentals for the six months ended June 30, 2013 amounted to €7,397 million, a decrease of €73 million compared to the six months ended June 30, 2012, primarily due to decreased operating costs of the electricity sectors of countries in which the Group operates. More specifically, the decrease reflects lower fees for transport capacity use rights in respect of the Energy Markets Operator (“EMO”), connected with the decline in sales through bilateral contracts and the rise in sales on the Power Exchange. Other operating expenses for the six months ended June 30, 2013 amounted to €1,495 million, an increase of €181 million, or 13.8%, compared with the same period of 2012, primarily due to a €99 million increase in the provision for risk and charges recognized in the six months ended June 30, 2013 for new disputes concerning certain acquisitions made in previous years and higher taxes and duties, mainly associated with greater taxes on emissions (€232 million) following the entry into force of Law 15/2012 in Spain. For the six months ended June 30, 2013, capitalized costs amounted to €659 million, reflecting developments in capital expenditures. Net income/(charges) from commodity risk management Net income/(charges) from commodity risk management showed net charges of €255 million for the six months ended June 30, 2013, compared with net income of €96 million for the six months ended June 30, 2012. More specifically, the result was due to net realized charges for the period in the amount of €228 million (€20 million of net income for the six months ended June 30, 2012) and net unrealized charges from the fair value measurement of derivatives positions open at the end of the period in the amount of €27 million (€74 million for the six months ended June 30, 2012).

Gross operating margin The following table sets forth the Group’s gross operating margin by business segment for the six months ended June 30, 2013 and 2012 (as restated). Gross operating margin is a non-IFRS financial measure. See “Presentation of Financial and Other Information” and “Selected Financial Data” for more information.

Six months ended June 30, Change

2012 2013 (Restated) Amount Percentage

(€ millions) Sales ...... 477 328 149 45.4% Generation and Energy Management ...... 667 694 (27) -3.9% Infrastructure and Networks ...... 1,966 1,975 (9) -0.5% Iberia and Latin America ...... 3,614 3,674 (60) -1.6% International ...... 565 758 (193) -25.5% Renewable Energy ...... 973 807 166 20.6% Other, Eliminations and Adjustments ...... 31 79 (48) -60.8%

Total ...... 8,293 8,315 (22) -0.3%

The gross operating margin in the six months ended June 30, 2013 totaled €8,293 million, a decrease of €22 million, or 0.3%, compared to the same period in 2012. The decrease was mainly due to the reduction in the margin on conventional energy generation in Italy and Spain, which was partially offset by the improvement in the margin on generation from renewables and sales to end users in the Italian market. Sales The gross operating margin for the six months ended June 30, 2013 amounted to €477 million, an increase of €149 million, or 45.4%, compared to the six months ended June 30, 2012. The increase was primarily due to a €105 million increase in the 55 margin on the free market for electricity and gas, due to an increase in unit margins, which more than offset the higher costs associated with the acquisition of new customers and a €44 million increase in the margin on the regulated electricity market, mainly associated with the improvement in the electricity margin, due to an increase in revenues for the sales service and the reduction in operating expenses, which more than offset the effect of a decline in the number of customers served. Generation and Energy Management The gross operating margin for the six months ended June 30, 2013 amounted to €667 million, a decrease of €27 million, or 3.9%, compared to €694 million registered for the six months ended June 30, 2012. The decrease was mainly due to a €42 million decline in the margin on natural gas sales and trading, a €36 million decline in volumes of electricity sold and higher costs deriving from environmental restrictions. The decrease was partially offset by the increase in unit margins associated with a more advantageous generation mix, characterized by greater utilization of hydroelectric plants, as well as the higher margin on dispatching services (€53 million), lower operating expenses and the net positive effect of the fair value measurement of instruments hedging commodity risk outstanding at June 30, 2013. Infrastructure and Networks The gross operating margin amounted to €1,966 million, a decrease of €9 million, or 0.5%, and was mainly due to an increase of €40 million in the margin on the transport of electricity, due mainly to the updating of distribution rates following application of resolution of the Authority No. 122/13, positive adjustments and estimate revisions and the €31 million margin earned on energy efficiency certificates. This effect was partly offset by a decrease of €103 million in the margin on connection fees and a decrease in operating expenses, reflecting lower personnel costs and lower net provisions for risks and charges as a result of the reversal of a portion of the provision for penalties related to service continuity, as well as the revision of the estimates made for 2012 concerning indemnities for medium- and low-voltage end users (€24 million). Iberia and Latin America The gross operating margin amounted to €3,614 million, a decrease of €60 million, or 1.6%, compared with the same period of 2012 due to a decrease of €301 million in the gross operating margin in Europe and an increase of €250 million in the gross operating margin in Latin America. The decrease in the gross operating margin in Europe was due to a decrease in grants for generation in the Spanish extra- peninsular electricity sector, reflecting lower volumes generated and the negative effects of the entry into force of Royal Decree Law 20/2012, as well as a decline in the margin on generation and sales of electricity to end users in Spain. The increase in the gross operating margin in Latin America was mainly due to higher distribution margins, particularly in Chile and Colombia, mainly due to higher sales prices and the effect of the government grant of €301 million to Edesur under the provisions of a cost monitoring mechanism approved by the Argentine energy regulator in May 2013. These factors were only partially offset by the negative impact of the appreciation of the Euro with respect to the local currencies, as well as an increase in personnel costs in Argentina and Chile. International The gross operating margin amounted to €565 million, a decrease of €193 million compared with the six months ended June 30, 2012. This change was mainly due to a decrease of €262 million in the gross operating margin in central Europe and a decrease of €6 million in the gross operating margin in Russia. The decrease in the gross operating margin in central Europe reflected the decline in the margin in Slovakia (€113 million), due to a decrease in the energy margin and to a change in the number of estimated contracts in the six months ended June 30, 2013 as compared to the same period in 2012. A number of insurance reimbursements in 2012 and to a decrease in the margin for Enel Investment Holding (€125 million), which due to an increase in provisions for risks and charges related to disputes regarding certain investments abroad, also contributed to the decrease. The decrease in the gross operating margin in Russia resulted from the decrease in the margin posted by RusEnergoSbyt (down €17 million) associated with entry into force of Decree No. 877/2012 in Russia, introducing a number of restrictions on electricity sales. This factor was only partially offset by the improvement in the margin posted by Enel OGK-5 (up €10 million), due largely to an increase in the margin on electricity as a result of higher prices on the “day-ahead market,” in which participants buy and sell, at the prices set by such day’s market, electricity for the following day. The overall decrease was partly offset by the increase of €75 million in the gross operating margin in south-eastern Europe as a result of the improvement in the margin posted in Romania. Renewable Energy The gross operating margin amounted to €973 million, an increase of €166 million, or 20.6%, over the same period of 2012, due to an increase of €86 million in the margin posted in Italy and the rest of Europe, mainly as a result of the increase in 56 volumes generated despite falling average sales prices, an increase of €7 million in the margin registered in the Iberian peninsula and Latin America, reflecting greater volumes produced and increasing average sales prices, and an increase of €73 million in the margin achieved in North America, mainly as a result of greater volumes produced.

Other The gross operating margin for the six months ended June 30, 2013 amounted to €31 million, a decrease of €48 million. More specifically, the contraction in the margin on certain services provided to other Group divisions was only partially offset by operational efficiencies achieved. Depreciation, amortization and impairment losses Depreciation, amortization and impairment losses amounted to €3,125 million for the six months ended June 30, 2013, an increase of €195 million or 6.7% from the €2,930 million posted for the six months ended June 30, 2012. The increase was mainly associated with an increase in net writedowns of trade receivables. Operating income The following table sets forth the Group’s operating income by business segment for the six months ended June 30, 2013 and 2012 (as restated).

Six months ended June 30, Change

2012 2013 (Restated) Amount Percentage

(€ millions) Sales ...... 190 126 64 50.8% Generation and Energy Management ...... 418 385 33 8.6% Infrastructure and Networks ...... 1,479 1,515 (36) -2.4% Iberia and Latin America ...... 2,176 2,175 1 - International ...... 262 596 (334) -56.0% Renewable Energy ...... 667 570 97 17.0% Other, Eliminations and Adjustments ...... (24) 18 (42) -

Total ...... 5,168 5,385 (217) -4.0%

Operating income amounted to €5,168 million for the six months ended June 30, 2013, a decrease of €217 million, or 4.0%, compared to the six months ended June 30, 2012, taking into account an increase of €195 million in depreciation, amortization and impairment losses. The following paragraphs provide an analysis of operating income by division or area. Sales Operating income for the six months ended June 30, 2013 totalled €190 million, an increase of €64 million compared to the six months ended June 30, 2012, which was primarily due to a €105 million increase in the margin on the free market for electricity and gas, as well as a €44 million increase in the margin on the regulated electricity market, which were partly offset by an increase of €81 million in impairment losses on trade receivables. Generation and Energy Management Operating income amounted to €418 million, an increase of €33 million, or 8.6% (with a decrease of €60 million in depreciation, amortization and impairment losses), compared to the €385 million registered in the same period of 2012. The decrease in depreciation was mainly due to the conclusion of the useful life of a number of generation plants and the revision in 2012 of the useful life of assets previously classified as to be relinquished free of charge following the enactment of Law 134 of 2012. Infrastructure and Networks Operating income, after depreciation, amortization and impairment losses of €487 million (€460 million for the six months ended June 30, 2012), amounted to €1,479 million, a decrease of €36 million, or 2.4%, compared with the same period of 2012. The increase in depreciation, amortization and impairment losses was due to greater depreciation of plants.

Iberia and Latin America Operating income for the six months ended June 30, 2013, after depreciation, amortization and impairment losses amounting to €1,438 million (€1,499 million for the six months ended June 30, 2012), totaled €2,176 million essentially in line with the same period of 2012. International Operating income for the six months ended June 30, 2013 totaled €262 million, a decrease of €334 million, or 56.0%, compared with the same period of 2012. The result reflects an increase of €141 million in depreciation, amortization and impairment losses. The impairment losses primarily relate to a writeback on a number of trade receivables in Romania (€90 million) and an increase in depreciation, amortization and trade receivable impairment losses in Russia. Renewable Energy Operating income amounted to €667 million, an increase of €97 million, taking into account an increase of €69 million in depreciation, amortization and impairment losses, which were mainly related to an increase in impairment recognized on the photovoltaic production facilities in Italy and on a number of geothermal power plants in Nicaragua. Other Operating income showed a loss of €24 million for the six months ended June 30, 2013, a decrease of €42 million compared with the same period of 2012, taking into account a decrease of €6 million in depreciation, amortization and impairment losses. Financial income/(expense) Net financial expense for the six months ended June 30, 2013 amounted to €1,267 million, compared to €1,501 million in the same period of 2012. The decrease of €234 million, or 15.6%, was mainly due to positive developments in interest rates, a period-on-period decrease in average debt and the €66 million writeback of the receivable due from the National Nuclear Fund of Slovakia. These factors were partially offset by the decrease in income from equity investments, which in the same period of 2012 included the recognition of the gain of €185 million on the disposal of Enel’s remaining 5.1% equity investment in Terna. Share of income/(expense) on equity investments accounted for using the equity method The share of income/(expense) from investments accounted for using the equity method for the six months ended June 30, 2013 showed net income of €55 million, an increase of €10 million or 22.2%. Income taxes Income taxes for the six months ended June 30, 2013 amounted to €1,473 million (€1,515 million for the six months ended June 30, 2012), equal to 37.2% of taxable income, compared to 38.6% for the six months ended June 30, 2012. The decrease in the effective tax rate reflected the positive impact of the adjustment of income taxes for previous years, which included the recognition of a €56 million adjustment of the receivable from the application for reimbursement of IRES/IRAP in accordance with Article 4, paragraph 12, of Decree Law 16 of March 2, 2012. These effects were partially offset by the impact of the permanent non-deductibility of certain accruals to provisions for risks and tax exemptions in the six months ended June 30, 2012 on the gain from the disposal of the interest in Terna. Group net income Group net income amounted to €1,680 million for the six months ended June 30, 2013, a decrease of €155 million, or 8.4%, as compared to the six months ended June 30, 2012. The effects of the reduction in operating income and the increase in the share of net income attributable to non-controlling interests were only partially offset by the decrease in net financial expense, which in the six months ended June 30, 2012 had benefited from the gain from the disposal of Enel’s remaining 5.1% interest in Terna.

2012 compared to 2011 (restated) The following table sets forth the Group’s consolidated income statement data for the years ended December 31, 2012 and 2011 (as restated). The consolidated income statement data for the years ended December 31, 2012 and 2011 (restated) does not reflect the application of the adoption of “IAS 19R – Employee Benefits.”

Year Ended December 31,

2012 2011 (restated)(2) Change

% of % of Amount Revenues Amount Revenues Amount Percentage

(€ millions) (€ millions) (€ millions) Revenues from the sale and transport of electricity and contributions from the Electricity Equalization Fund and similar bodies ...... 71,322 84.0% 68,308 85.9% 3,014 4.4% Gas sold and transported to end-users ...... 4,402 5.2% 3,624 4.6% 778 21.5% Gains on the disposal of assets ...... 6 0% 71 0.1% -65 0% Remeasurement at fair value after changes in control ...... 16 0% 358 0.5% -342 0% Other services, sales and revenues ...... 9,143 10.8% 7,153 9.0% 1,990 27.8%

Revenues ...... 84,889 100% 79,514 100% 5,375 6.8%

Electricity purchases ...... 30,080 35.4% 29,045 36.5% 1,035 3.6% Consumption of fuel for electricity generation...... 8,546 10.1% 7,879 9.9% 667 8.5% Purchase of fuel for trading and natural gas for resale to end-users ...... 4,840 5.7% 3,722 4.7% 1,118 30.0% Materials ...... 2,778 3.3% 2,400 3.0% 378 15.8% Personnel ...... 4,860 5.7% 4,296 5.4% 564 13.1% Services, leases and rentals ...... 15,624 18.4% 14,295 18.0% 1,329 9.3% Other operating expenses ...... 3,208 3.8% 2,255 2.8% 953 42.3% Capitalized costs ...... (1,747) –2.1% (1,711) –2.2% (36) 2.1%

Costs ...... 68,189 80.3% 62,181 78.2% 6,008 9.7%

Net income/(charges) from commodity risk management ...... 38 0% 272 0.3% -234 -86.0% Gross operating margin (EBITDA)(1) ...... 16,738 19.7% 17,605 22.1% (867) -4.9%

Depreciation, amortization and impairment losses ...... 9,003 10.6% 6,327 8.0% 2,676 42.3% Operating income ...... 7,735 9.1% 11,278 14.2% (3,543) -31.4%

Financial income ...... 2,272 2.7% 2,693 3.4% -421 -15.6% Financial expense ...... 5,275 6.2% 5,717 7.2% (442) -7.7%

Financial income/(expense) ...... (3,003) –3.5% (3,024) -3.8% 21 -0.7%

Share of income/(expense) on equity investments accounted for using the equity method ...... 88 0.1% 96 0.1% (8) -8.3%

Income before taxes ...... 4,820 5.7% 8,350 10.5% (3,530) -42.3%

Income taxes ...... 2,745 3.2% 3,027 3.8% -282 -9.3% Income from continuing operations ...... 2,075 2.4% 5,323 6.7% -3,248 -61.0% Net Income (Group and minority interests) 2,075 2.4% 5,323 6.7% (3,248) -61.0%

Minority interests ...... 1,210 1,210 — 0% GROUP NET INCOME ...... 865 4,113 (3,248) -79.0%

(1) Non-IFRS financial measure. See “Presentation of Financial and Other Information.” (2) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

Revenues Revenues from electricity sales and transport and contributions from the Electricity Equalization Fund and similar bodies in 2012 amounted to €71,322 million, an increase of €3,014 million, or 4.4%, from the previous year. The increase was primarily attributable to the following factors:  an increase of €1,203 million in revenues from the sale of electricity to end users, mainly as a result of higher revenues from free markets (€859 million) and regulated markets (€344 million). More specifically, there was an increase in volumes sold, as well as an increase in average sales prices in central and Eastern Europe and Latin America, the impact of which was partially offset by a decline in sales in the other countries in which the Group operates;  an increase of €1,994 million in revenues from the wholesale business, mainly attributable to a rise in volumes of electricity sold;  an increase of €538 million in revenues from the transport of electricity, due primarily to greater revenues from the transport of electricity to the Group’s end users (€719 million), partially offset by a decline in revenues from the transport of electricity for other operators (€181 million);  an increase of €223 million in revenues from contributions from the Electricity Equalization Fund and similar bodies, due primarily to extra-peninsular generation in Spain. In light of the fact that the price of energy produced in Spain is determined in a single Power Exchange, the Spanish authority recognizes a contribution to the generators in the islands that have a production cost that reflects the unfavorable geographic location in which they operate. This remuneration was set so as to cover the costs of the activity and provide a return on capital employed. In order to receive the comprehensive rate, generation companies receive a contribution corresponding to the difference between the two values, in addition to the market price for electricity sold. The increase was offset in part by a decrease of €943 million in revenues from revenues from electricity trading, reflecting a decline in volumes handled. Revenues from gas sold and transported to end users increased by €778 million, or 21.5%, compared to 2011. This trend was due primarily to an increase in volumes sold and a rise in average sales prices as a result of developments in the international energy markets and the revision of a number of rate components. Gains on the disposal of assets in 2012 amounted to €6 million and reflect the proceeds from a number of minor disposals. In 2011, the item mainly comprised the gains from the sale of EUFER (€44 million), the disposals of Deval and Vallenergie (€21 million), the Spanish company Explotaciones Eólicas de Aldehuelas (€18 million), CAM and Synapsis (€15 million) and the sales of Enel Maritza East 3, Enel Operations Bulgaria and their parent holding companies (€12 million). Another factor was the gain on the transfer of the assets of the business line that led to the acquisition of San Floriano Energy (€15 million). The positive impact of these gains was partly offset by the adjustment (totaling approximately €54 million recorded in 2011) of the price for the sale of the Spanish high-voltage grids and 80% of Nubia 2000 carried out in 2010. Gains from remeasurement at fair value after changes in control came to €16 million in 2012, of which €11 million regarded Trade Wind Energy, €4 million regarded Sociedad Eólica de Los Lances and €1 million regarded Enel Stoccaggi. In all three cases, the gain was generated by the remeasurement of the net assets already held by the Group prior to the purchase of equity leading to the acquisition of full control. In 2011, the gains reflected the adjustment of the value of Group assets and liabilities to reflect their fair value with regard to (i) the residual assets and liabilities held following the loss of control of Hydro Dolomiti Enel as a result in the change in the corporate governance structure (€237 million); and (ii) the assets and liabilities already owned prior to obtaining complete control of EUFER (€76 million), Sociedad Eólica de Andalucía (€23 million) and TP — Sociedade Térmica Portuguesa (€22 million).

Revenues from other services, sales and revenues amounted to €9,143 million in 2012 (€7,153 million in 2011), an increase of €1,990 million, or 27.8%, compared to the previous year. The increase was mainly attributable to the following developments:  an increase of €905 million in revenues from the sale of fuels for trading, including revenues for shipping services, due primarily to an increase in volumes handled in Italy;

 an increase of €390 million in revenues from the sale of other goods, mainly due to higher sales of CO2 emissions allowances, green certificates and photovoltaic modules;  recognition by the Authority (resolution No. 157/2012) of the right to be reimbursed for charges incurred by the Group as a result of the termination of the Electrical Worker Pension Fund (FPE) as from January 1, 2000, in the amount of €615 million; and  an increase of €63 million in grants from the Electricity Equalization Fund for white certificates. 60

The following table sets forth the Group’s revenues by business segment for 2012 and 2011 (as restated).

Year Ended December 31, Change

2011 2012 (Restated) Amount Percentage

(€ millions) Sales ...... 18,351 17,731 620 3.5% Generation and Energy Management ...... 25,237 23,144 2,093 9.0% Infrastructure and Networks ...... 8,117 7,460 657 8.8% Iberia and Latin America ...... 34,169 32,647 1,522 4.7% International ...... 8,703 7,715 988 12.8% Renewable Energy ...... 2,696 2,539 157 6.2% Other, Eliminations and Adjustments ...... (12,384) (11,722) (662) 5.6%

Total ...... 84,889 79,514 5,375 6.8%

Sales for 2012 amounted to €18,351 million, an increase of €620 million (or 3.5%) compared to 2011, primarily due to: an increase of €353 million in revenues from sales of natural gas to end users, an increase of €248 million in revenues on the free electricity market and an increase of €110 million in revenues on the regulated electricity market. The increase in revenues from sales of natural gas to end users was mainly due to a rise in average sales prices, which in addition to developments in the market for this commodity reflected the revision of the component for retail sales (QVD) and the positive impact of a number of prior-year items. The increase in revenues on the free electricity market was due primarily to higher volumes sold (up 1.1 TWh). The increase in revenues on the regulated electricity market was mainly associated with the increase in revenues in respect of the sales service, taking into account the increase in remuneration of the unpaid ratio introduced by the Authority resolution No. 583/2012, and equalization mechanisms. These effects were partially offset by the decrease in amounts sold (down 3.2 TWh) as well as the recognition of prior-year items in the two years under review, which had a negative impact of €102 million. Generation and Energy Management Revenues for 2012 amounted to €25,237 million, an increase of €2,093 million, or 9.0%, compared to 2011. Excluding the impact of the gain of €237 million recognized in 2011 from the fair value adjustment of the assets and liabilities of Hydro Dolomiti Enel corresponding to the Group’s remaining equity investment in Hydro Dolomiti Enel (following its loss of control as a result of the change in its corporate governance structure), revenues would have increased by €2,330 million. The increase (excluding such gain) was largely attributable to the following factors: (i) a €1,625 million increase in revenues from electricity sales, mainly due to the increase of €690 million in revenues from sales on the Power Exchange (and which attributable to greater volumes handled and higher average sales prices), the increase in revenues from sales to others on the Italian market (€841 million), and the increase of €178 million in revenues from electricity sales to other Group divisions, especially the Sales division; (ii) a €978 million increase in revenues from fuel trading, due primarily to sales of natural gas (€955 million), partially offset by lower revenues from trading on international energy markets (€379 million) as a result of a decline in volumes handled (down 8.8 TWh); (iii) a €308 million increase in revenues from the sale of CO2 emissions allowances and green certificates, as well as an increase of €58 million in revenues for the fee paid to plants classified as essential to the safety of the electricity sector; (iv) a €160 million decrease in revenues for grants to “new entrants” in the emissions trading system, which was attributable to the impact of the recognition in 2011 of certain prior-year items associated with the commercial operation of unit 4 of the Torrevaldaliga Nord plant. The increase was partly offset by a €28 million decline in revenues following the change in the method used to account for Hydro Dolomiti Enel as well as a decrease of €34 million in revenues from shipping services. Infrastructure and Networks Revenues in 2012 amounted to €8,117 million, an increase of €657 million, or 8.8%, compared to the previous year. The change was due primarily to the recognition of the reimbursement entitlement for charges and incurred following the elimination of the Electrical Worker Pension Fund (FPE), net of the rate component paid in 2011 for the same reason (€517 million), an increase of €185 million in rate revenues, an increase of €63 million in grants from the Electricity Equalization Fund for white certificates and an increase in revenues (€35 million) from the sale of digital meters and associated services to the Iberia and Latin America division. The rate revenue reflects, the increase of the revision of distribution and metering rates following the application of the Authority’s resolution No. 157/2012 and the effect of loss equalization (€122 million) following the application of Authority resolutions Nos. 196/2011 and 559/2012, which was partially offset by negative prior- year items (€60 million), other equalization mechanisms and the effect of the change in the scope of consolidation with the sale of Deval. 61

The increase was partly offset by the decrease of €86 million in connection fees and one of €60 million in service continuity bonuses. Iberia and Latin America Revenues for 2012 increased by €1,522 million, as compared to 2011, due to the increase in revenue both in Europe (€775 million) and in Latin America (€747 million). In particular, revenues in Europe increased by €775 million (from €22,592 million to €23,367 million). There were virtually no change in revenues from the sale and transport of electricity (the rise in revenues from the sale of electricity to end users was essentially offset by the reduction in revenues from electricity trading and in revenues from electricity distribution operations connected with the entry into force in the Spanish electricity sector of Royal Decree Law 13/2012 as from January 1, 2012). The change in total revenues was mainly due to €405 million an increase in revenues from the sale of gas to end users due to greater quantities sold and an increase in average sales prices, €192 million was due to an increase in grants for extra-peninsular generation, and €167 million was due to an increase in revenues from the sale of fuels for trading), due primarily to an increase in volumes handled and higher average sales prices. Revenues in Europe were also impacted by the transfer of the division’s ICT operations, whose results are now reported under “Other, eliminations and adjustments.” The increase of €747 million in revenues in Latin America (from €10,055 million to €10,802 million) was due primarily to greater volumes of electricity sold and developments in exchange rates between each national currency and the Euro. More specifically, the rise in revenues in Colombia, Peru and Brazil was only partially offset by the decline in revenues in Chile, which reflected the drought in the country and the decline in unit sales prices, as well as the effect of the recognition in 2011 of the capital gain from the disposal of CAM and Synapsis (€15 million). International Revenues in 2012 amounted to €8,703 million, an increase of €988 million, or 12.8%, compared to the €7,715 million in the previous year. The increase reflected: a €675 million increase in revenues in central Europe, a €396 million increase in revenues in Russia and partially offset by an €83 million decrease in revenues in Southeastern Europe; the increase in revenues in central Europe was largely due to the increase in posted in Slovakia (€538 million) due to the rise in electricity generated and sold, and in France (€119 million), due primarily to an increase in volumes sold; and the increase in revenues in Russia was, mainly due to greater volumes generated and sold. The decrease in revenues in south-eastern Europe, due primarily to the change in the scope of consolidation (€132 million) after the sale of the Bulgarian companies (Enel Maritza East 3, Enel Operations Bulgaria and their holding companies) in June 2011, which was offset in part by the increase in the revenues of the Romanian companies due to a rise in quantities sold and higher average sales prices. Renewable Energy Revenues increased by €157 million, or 6.2%, from €2,539 million in 2011 to €2,696 million in 2012. The change mainly reflected a €130 million increase in revenues in Italy and the rest of Europe and a €118 million increase in revenues in North America, which was partly offset by a €91 million decrease in revenues in the Iberian peninsula and Latin America. The increase in revenues in Italy and the rest of Europe was mainly due to an increase of €163 million in revenues due to an increase in output which was partially offset by a decrease of €33 million in the revenues of Enel.si as a result of a decline in sales of photovoltaic panels. The increase in revenues in North America was mainly due to an increase in volumes generated and the recognition of higher revenues from tax partnerships. These factors were only partially offset by the effect (€16 million) of the recognition in 2011 of an indemnity from the Canadian authorities in settlement of a dispute and the decrease in revenues in the Iberian peninsula and Latin America. Excluding the gain recognized in 2011, from the adjustment to fair value of the net assets of Sociedad Eólica de Andalucía and TP — Sociedade Térmica Portuguesa with respect to the portion held prior to the acquisition of an additional interest in these companies that led to full control (€45 million) and the remeasurement at fair value of the net assets already held in EUFER (€76 million), the recognition of the capital gain (€44 million) from the sale to Gas Natural of the assets of EUFER and the gain from the disposal of Explotaciones Eólicas de Aldehuelas (€18 million). This was partly offset by the increase of revenues by €92 million which was mainly devoted to greater volumes generated in the Latin American countries. Other Revenues decreased by €339 million, or 14.4%, going from €2,356 million in 2011 to €2,017 million in 2012. The reduction was mainly due to a €373 million decrease in revenues from the Issuer’s sale of electricity to the Single Buyer, associated with the expiry on December 31, 2011 of the long-term electricity import contract on the Swiss border with Alpiq; an €87 million decrease in revenues from engineering activities as a result of the completion of a number of major projects, including the coal conversion of the Torrevaldaliga Nord plant and the construction of the Marcinelle Energie plant; partly offset by a €21 million gain on the disposal of 51% of Deval and a €147 million increase in revenues for other services following the presentation of ICT services in Spain in the “Other, eliminations and adjustments” account, which had previously been reported under the Iberia and Latin America division. 62

Eliminations and Adjustments Eliminations and adjustments were mainly done to eliminate the intercompany differences. The following table sets forth the Group’s eliminations between divisions for 2012 and 2011 (as restated).

Year Ended December 31, Change

2011 2012 (Restated) Amount Percentage

(€ millions) Sales ...... (181) (163) (18) 11.0% Generation and Energy Management ...... (6,375) (6,014) (361) 6.0% Infrastructure and Networks ...... (4,299) (4,248) (51) 1.2% Iberia and Latin America ...... (461) (565) 104 -18.4% International ...... (688) (644) (44) 6.8% Renewable Energy ...... (481) (612) 131 -21.4% Other ...... (1,916) (1,992) 76 -3.8%

Total ...... (14,401) (14,239) (162) 1.1%

Operating costs excluding depreciation, amortization and impairment losses Excluding depreciation, amortization and impairment losses, which are discussed separately below, operating costs amounted to €68,189 million in 2012 (compared to €62,181 million in 2011), or 80.3% of total revenues (as compared to 78.2% in 2011). Costs for electricity purchases amounted to €30,080 million in 2012 (35.4% of total revenues), an increase of €1,035 million, or 3.6%, compared to €29,045 million recorded in 2011 (35.4% of total revenues). The change reflects the combined impact of an increase in costs for purchasing electricity on power exchanges and from over-the-counter counterparties (€828 million) and a rise in electricity purchases through bilateral contracts (€207 million). Costs for the consumption of fuel for electricity generation amounted to €8,546 million in 2012 (10.1% of total revenues), an increase of €667 million, or 8.5%, compared to €7,879 million recorded in 2011 (9.9% of total revenues). The rise reflects the increase in volumes of coal purchased by the generation companies (consistent with the generation mix used for thermal generation) and the increase in costs for gas consumption as a result of higher weighted average prices. Costs for the purchase of fuels for trading and natural gas for resale to end-users were €4,840 million in 2012 (5.7% of total revenues), an increase of €1.118 million, or 30%, over the €3,722 million recorded in 2011 (4.7% of total revenues). The increase was largely attributable to gas and developments in its average purchase price, which is correlated with the prices of petroleum products. Costs for materials were to €2,778 million in 2012 (3.3% of total revenues), an increase of €378 million, or 15.8%, compared to €2,400 million in 2011 (3.0% of total revenues). €378 million of the increase mainly related to the impact of higher costs for sourcing energy efficiency certificates (including European Union Allowance (EUAs) and Certified Emission Reductions (CERs)). Personnel costs totaled €4,860 million in 2012 (5.7% of total revenues), an increase of €564 million, or 13.1%, compared to the €4,296 million recorded in 2011 (5.4% of total revenues). This reflected the increase in estimates recognized in 2011 for costs in previous years in respect of the early retirement incentive plan that ended as of December 31, 2011.

Costs for services, leases and rentals totaled €15,624 million in 2012 (18.4% of total revenues), an increase of €1,329 million, or 9.3%, compared to the €14,295 million recorded in 2011 (18% of total revenues). The change was due primarily to the €1,117 million increase in electricity transport costs as a result of transport rate increases (mainly related to the Tarifa de Ultimo Recurso (“TUR”) in Spain) and to the €212 million increase in costs for other services, due in part to the increase in incidental fees related to electricity sales, including rights to use transport capacity. Other operating expenses totaled €3,208 million in 2012 (3.8% of total revenues), an increase of €953 million, or 42.3%, compared to €2,225 million recorded in 2011 (2.8% of total revenues). More specifically, the increase was mainly associated with a €333 million rise in costs for the purchase of green certificates and greater provisions for risks and charges of €421 million. During 2012, capitalized costs were €1,747 million in 2012 (€1,711 million in 2011), essentially unchanged from the previous year.

Net income/(charges) from commodity risk management Net income/(charges) from commodity risk management amounted to net income of €38 million in 2012, compared to net income of €272 million in the previous year. The result for 2012 reflects €219 million in net income realized in the period (€160 million in 2011) and net charges from the fair value measurement of derivatives positions open at the end of the period in the amount of €181 million (€112 million of net income 2011). Gross operating margin The following table sets forth the Group’s gross operating margin by business segment for 2012 and 2011 (as restated). Gross operating margin is a non-IFRS financial measure. See “Presentation of Financial and Other Information” and “Selected Financial Data” for more information.

Year Ended December 31, Change

2011 2012 (Restated) Amount Percentage

(€ millions) Sales ...... 689 561 128 22.8% Generation and Energy Management ...... 1,271 2,209 (938) -42.5% Infrastructure and Networks ...... 4,138 4,173 (35) -0.8% Iberia and Latin America ...... 7,212 7,251 (39) -0.5% International ...... 1,650 1,642 8 0.5% Renewable Energy ...... 1,681 1,585 96 6.1% Other, Eliminations and Adjustments ...... 97 184 (87) -47.3%

Total ...... 16,738 17,605 (867) -4.9%

The Group’s total gross operating margin in 2012 amounted to €16,738 million, a decrease of €867 million (or 4.9%) compared to the €17,605 recorded in 2011. The decrease was largely attributable to the decrease in the generation margin in Italy and to the change in the scope of consolidation following the disposals in the years under review (including the disposals of Enel Maritza East 3, Deval and Endesa Ireland). These effects were partially offset by the strong performance of the Sales, Renewable Energy and International divisions. The following is an analysis of gross operating margin by business segment. Sales Gross operating margin for 2012 amounted to €689 million, an increase of €128 million, or 22.8%, compared to €561 million in 2011. The increase was due to an increase of €74 million in the margin on the free market for electricity and gas and an increase of €54 million in the margin on the regulated electricity market. The increase in the margin on the free market for electricity and gas was due to the consolidation of our leadership position on the free market, with an expansion of more than 0.8 million in our high-value mass market customer base. The increase in the margin on the regulated electricity market was mainly attributable to the improvement in the electricity margin as a result of the increase in revenues recognized for the sales service, only partially offset by the impact of the decline in the number of customers served and increased operating expenses. Generation and Energy Management Gross operating margin for 2012 amounted to €1,271 million, a decrease of €938 million, or 42.5%, compared to the €2,209 million recorded in 2011. Excluding the gain from the adjustment to fair value of the assets and liabilities of Hydro Dolomiti Enel, the effect of the change in the method of consolidating Hydro Dolomiti Enel and the disposal of the assets constituting the San Floriano Energy business unit (equal to a total of €30 million), the gross operating margin decreased by €671 million. This was due to: (i) a decline in the generation margin (€233 million), primarily due to lower demand and poorer water conditions, only partially offset by the greater competitiveness and availability of coal-fired plants; (ii) the effect, noted in the comments on revenues, of the grants in 2011 to “new entrants” in the emissions trading system; (iii) a decrease of €45 million in the margin on natural gas sales and trading, even taking account of the positive effects of the renegotiation of a number of long-term fuel purchase contracts; and (iv) an increase in compliance costs in respect of green certificates, as well as increased operating expenses. These decreases were partly offset by an increase of €86 million in the margin on the ancillary services market.

Infrastructure and Networks Gross operating margin amounted to €4,138 million, a decrease of €35 million, or 0.8% compared to 4,173 million recorded in 2011. This decrease was due to the effect of the amendments to the reimbursement mechanism for the FPE charge noted above (€517 million); an increase of €200 million in the margin on the transport of electricity, and an increase in operating expenses, mainly due to personnel costs (including the revision of the estimated liability for early retirement incentives undertaken in 2011 in the amount of €155 million) and to net provisions for litigation. The margin on the transport of electricity increased due primarily to the positive effect of the updating of distribution and metering rates and the positive impact of loss equalization. These factors were only partially offset by the adverse impact of other equalization mechanisms and the recognition of net negative prior-year items (€72 million) in the two years under review in respect of adjustments and estimate revisions. The increase was partly offset by a decrease in margins on connection fees and service continuity bonuses totaling €139 million and the negative effect of the change in the scope of consolidation with the sale of Deval (€15 million). Iberia and Latin America Gross operating margin amounted to €7,212 million, a decrease of €39 million, or 0.5%, compared to 2011 due to a decrease of €46 million in gross operating margin in Latin America partially offset by an increase of €7 million in gross operating margin in Europe. The decrease in gross operating margin in Latin America was due primarily to a contraction in generation margins, which were impacted by the drought in Chile, and increased operating expenses. These factors were partially offset by the increase in distribution margins, the effect of the recognition in 2011 of the net worth tax (€109 million) in Colombia, and the positive impact of developments in exchange rates against the Euro. The increase in the gross operating margin in Europe was due primarily to the rise in the generation and sales margin, largely attributable to higher sales prices and the elimination provided for in Royal Decree Law 13/2012 of the mechanism for financing the social bonus in Spain, which had been borne by generation companies (with a benefit of €83 million), which was partly offset by the reduction in the distribution margin on the Spanish regulated market, which was adversely affected by the entry into force of the above decree and the change in the scope of business with the transfer of division’s ICT operations, which have a negative impact of €23 million. International Gross operating margin amounted to €1,650 million, which was in line with 2011 (€1,642 million). The performance was associated with a €35 million increase in the gross operating margin in Russia, a €31 million increase in the gross operating margin in central Europe and a €58 million decrease in the gross operating margin in south-eastern Europe. The increase in the gross operating margin in Russia was attributed to the improvement in the results posted by Enel OGK-5 (€43 million), resulting from the increase in output due in part to the completion of the new plants, despite lower average sales prices, was partially offset by a decrease in the margin posted by RusEnergoSbyt (€8 million). The increase in the gross operating margin in central Europe was mainly due to the increase in the generation margin achieved by Slovenské elektrárne as a result of higher average sales prices, lower operating expenses and a number of insurance payments (€18 million), partially offset by the decline in the margins on sales of CO2 emissions allowances. The decrease in gross operating margin in south-eastern Europe was a result of the exit of the Bulgarian companies from the scope of consolidation (€82 million) was only partially offset by the increase in the margin posted in Romania, where the stronger performance of the distribution companies was only partially offset by the deterioration in the results of the sales companies. Renewable Energy The gross operating margin amounted to €1,681 million, an increase of €96 million, or 6.1%, compared to 2011. The increase was due to an increase of €90 million in the margin achieved in North America (or €106 million excluding the indemnity discussed under revenues), mainly as a result of greater volumes produced; and an increase of €82 million in the margin posted in Italy and the rest of Europe, mainly as a result of the increase in volumes generated. Such increase was partly offset by a decrease of €76 million in the margin registered in the Iberian peninsula and Latin America, partly in reflection of the impact of the non-recurring income recognized in 2011 discussed under revenues. Other The gross operating margin amounted to €97 million, a decrease of €87 million. More specifically, the contraction in the margin on certain services provided to other Group divisions, as well as the impact of the recognition in 2011 of the gain from the sale of Deval, were only partially offset by positive contribution of the change in the scope of operations noted under revenues.

Depreciation, amortization and impairment losses Depreciation, amortization and impairment losses amounted to €9,003 million in 2012, an increase of €2,676 million (or 42.3%) from 2011. The increase was due to an increase in impairment losses on assets, net of any writebacks, in the amount of €2,281 million, an increase of €326 million in depreciation and amortization (due primarily to the entry into service of a number of new renewable energy generation plants), as well as an increase in net writedowns of trade receivables totaling €69 million. More specifically, in 2012 impairment losses on assets, net of any writebacks, totaled €2,819 million (€538 million in 2011) and were primarily related to the impairment of the goodwill allocated to the Endesa-Iberian peninsula CGU (€2,392 million), Enel OGK-5 (€112 million) and Endesa Ireland (€67 million), which was sold at the end of 2012, as well as the adjustment to estimated realizable value of the net assets of Marcinelle Energie (€145 million), taking into account the status of negotiations under way for their sale. In 2011, the item included the impairment recognized on the electricity distribution grid in Argentina (€153 million) and on the goodwill allocated to the Endesa Ireland, Enel Green Power Hellas and Marcinelle Energie CGUs (for a total of €201 million). The impairment losses of €2,392 million on the Endesa-Iberian Peninsula CGU was mainly due to the decrease in the expected cash flows from the assets belonging to the CGU, partly as a result of various measures adopted by the Spanish government in the energy field on different occasions throughout 2012, especially in the fourth quarter of 2012. In addition, the valuation of impairment test was further affected by the rise in country risk, which is factored into the discount rate used in quantifying value in use. Operating income The following table sets forth the Group’s operating income by business segment for 2012 and 2011 (as restated).

Year Ended December 31, Change

2011 2012 (Restated) Amount Percentage

(€ millions) Sales ...... 183 141 42 29.8% Generation and Energy Management ...... 685 1,617 (932) -57.6% Infrastructure and Networks ...... 3,144 3,259 (115) -3.5% Iberia and Latin America ...... 1,657 4,057 (2,400) -59.2% International ...... 978 1,062 (84) -7.9% Renewable Energy ...... 1,121 1,080 41 3.8% Other, Eliminations and Adjustments ...... (33) 62 (95) -153.2%

Total ...... 7,735 11,278 (3,543) -31.4%

The following is an analysis of operating income by business segment. Sales Operating income for 2012, after depreciation, amortization and impairment losses of €506 million (€420 million in 2011), amounted to €183 million, an increase of €42 million, or 29.8%, compared to 2011. This increase reflected an increase of €91 million in impairment losses on trade receivables. Generation and Energy Management Operating income amounted €685 million, a decrease of €932 million, or 57.6%, compared to the €1,617 million in 2011, reflecting an increase in depreciation and amortization of €31 million and a decline in impairment losses of €37 million (in part attributable to the writeback of the Mercure biomass plant in 2012). Infrastructure and Networks Operating income, after depreciation, amortization and impairment losses of €994 million (€914 million in 2011), amounted to €3,144 million, a decrease of €115 million, or 3.5%, compared to €3,259 million in 2011. The increase in depreciation, amortization and impairment losses is due primarily to the increase in impairment losses on trade receivables and higher depreciation for the plants.

Iberia and Latin America Operating income for 2012 amounted to €1,657 million, a decrease of €2,400 million, or 59.2%, compared to €4,057 million in 2011, due primarily to an increase of €2,361 million in depreciation, amortization and impairment losses (€5,555 million in 2012, compared to €3,194 million in 2011). Excluding the increase in depreciation for a number of generation plants, the increase in impairment losses, net of the writeback recognized on the value of certain assets in the Balearic Islands following a favorable ruling by the Spanish courts, is due primarily to the impairment loss of €2,392 million on the goodwill of the Endesa-Iberian Peninsula CGU and the impairment loss of €67 million recognized on the net assets held for sale of Endesa Ireland in order to align their value with the estimated sale value. More specifically, the writedown of the goodwill associated with the Endesa-Iberian peninsula CGU reflects the decrease in the expected cash flows from the assets belonging to the CGU, partly as a result of recent measures adopted by the Spanish government in the energy field, as well as the rise in the country risk factored into the discount rate used in quantifying value in use. In 2011, the item included the impairment recognized on the distribution grids in Argentina (€153 million) and the goodwill of Endesa Ireland (in the amount of €105 million). International Operating income for 2012 amounted to €978 million, a decrease of €84 million, or 7.9%, compared to €1,062 million in 2011, reflecting the impairment loss of €112 million recognized on goodwill allocated to the Enel OGK-5 CGU to reflect a decrease in estimated future earnings connected with the current regulatory uncertainty affecting the business operated by Enel. Renewable Energy Operating income totaled €1,121 million in 2012, an increase of €41 million, or 3.8%, compared to €1,080 million in 2011, reflecting an increase of €55 million in depreciation, amortization and impairment losses, due primarily to the net effect of the entry into service of a number of plants and the revised estimate of the useful life of wind plants, which was in line with industry practice. The impairment losses in 2011 included a €70 million adjustment to the goodwill allocated to the Enel Green Power Hellas CGU. Other Operating income showed a loss of €33 million for 2012, a deterioration of €95 million compared to 2011, taking account of an increase of €5 million in depreciation, amortization and impairment losses, mainly associated with the change in scope of operations in respect of ICT services in Spain. Financial income/(expense) Net financial expense in 2012 was €3,003 million in 2012, a decrease of €21 million compared to €3,024 million in 2011. More specifically, the effect of developments in interest and exchange rates (net of related hedging) was entirely offset by the recognition in early 2012 of the gain on the sale of the shareholding in Terna S.p.A. (€185 million) as well as the impact of the lower average net debt in 2012. Share of income/(expense) on equity investments accounted for using the equity method The share of income/(expense) from investments accounted for using the equity method showed net income of €88 million in 2012, a decrease of €8 million compared to 2011. Income taxes Income taxes for 2012 amounted to €2,745 million (€3,027 million in 2011), equal to 57.0% of taxable income, compared to 36.3% in 2011. More specifically, the effective tax rate for 2012 reflects the recognition of the impairment losses on goodwill noted earlier, for which there is no corresponding tax benefit, and the adjustment of the deferred taxes of the Chilean and Slovakian companies following an increase in the tax rates in those country as from January 1, 2013. These factors were partially offset by the recognition of the tax benefit recognized by the Italian companies of the reimbursement of corporate income tax (IRES) and the Robin Hood Tax established by Decree Law 16/2012 for the allowance of the deduction of the portion of regional income tax (IRAP) regarding personnel expenses. In 2011, the tax rate primarily reflected a favorable ruling related to a tax dispute in Spain. Group net income As a result of the foregoing factors, the Group’s net income (after deducting minority interests) decreased from €4,113 million in 2011 to €865 million in 2012.

2011 compared to 2010 The following table sets forth the Group’s consolidated income statement data for the years ended December 31, 2011 and 2010. For comparability purposes, the consolidated income statement data for the years ended December 31, 2011 and 2010 does not reflect the application of “IAS 19R — Employee Benefits” and also does not reflect the application of the new accounting policy for white certificates (EECs).

Year Ended December 31,

2011 2010 Change

% of % of Amount Revenues Amount Revenues Amount Percentage

(€ millions) (€ millions) (€ millions) Revenues from the sale and transport of electricity and contributions from the Electricity 85.9 Equalization Fund and similar bodies ...... 68,308 % 64,045 87.3% 4,263 6.7% Gas sold and transported to end-users ...... 4.6 3,624 % 3,574 4.9% 50 1.4% Gains on the disposal of assets ...... 0.1 71 % 127 0.2% (56) 0.0%

Remeasurement at fair value after 0.5 changes in control ...... 358 % — 0.0% 358 0.0% Other services, sales and revenues ...... 9.0 7,153 % 5,631 7.7% 1,522 27.0%

Revenues ...... 100 79,514 % 73,377 100% 6,137 8.4%

Electricity purchases ...... 36.5 29,045 % 24,714 33.7% 4,331 17.5% Consumption of fuel for electricity generation ...... 9.9 7,879 % 6,892 9.4% 987 14.3% Purchase of fuel for trading and natural gas for resale 4.7 to end-users ...... 3,722 % 2,655 3.6% 1,067 40.2% Materials ...... 3.0 2,400 % 2,321 3.2% 79 3.4% Personnel ...... 5.4 4,296 % 4,907 6.7% -611 -12.5% Services, leases and rentals ...... 18.0 14,295 % 13,503 18.4% 792 5.9% Other operating expenses ...... 2.7 2,143 % 2,950 4.0% -807 -27.4% Capitalized costs ...... (1,711 -2.2 ) % (1,765) -2.4% (54) 3.1%

Costs ...... 78.1 62,069 % 56,177 76.6% 5,892 10.5%

Net income/(charges) from commodity risk 0.3 management ...... 272 % 280 0.4% (8) -2.9% Gross operating margin (EBITDA)(1) ...... 22.3 17,717 % 17,480 23.8% 237 1.4%

Depreciation, amortization and impairment losses ...... 8.0 6,351 % 6,222 8.5% 129 2.1% Operating income ...... 14.3 11,366 % 11,258 15.3% 108 1.0%

Financial income ...... 3.4 2,693 % 2,576 3.5% 117 4.5% Financial expense ...... 7.2 5,717 % 5,774 7.9% (57) -1.0%

Financial income/(expense) ...... (3,024 -3.8 ) % (3,198) -4.4% 174 -5.4%

Share of income/(expense) on equity investments 0.1 accounted for using the equity method ...... 96 % 14 0.0% 82 585.7%

Income before taxes ...... 10.6 8,438 % 8,074 11.0% 364 4.5%

Income taxes ...... 3.9 3,080 % 2,401 3.3% 679 28.3% Income from continuing operations ...... 6.7 5,358 % 5,673 7.7% (315) -5.6% Net Income (Group and minority interests) ...... 5,358 6.7 5,673 7.7% (315) -5.6% 68

Year Ended December 31,

2011 2010 Change

% of % of Amount Revenues Amount Revenues Amount Percentage

(€ millions) (€ millions) (€ millions) %

Minority interests...... 1,210 1,283 (73) -5.7% GROUP NET INCOME ...... 4,148 4,390 (242) -5.5%

(1) Non-IFRS financial measure. See “Presentation of Financial and Other Information.”

Revenues Revenues from electricity sales and transport and contributions from the Electricity Equalization Fund and similar bodies in 2011 amounted to €68,308 million, an increase of €4,263 million, or 6.7%, from 2010. The growth can mainly be ascribed to the following factors:  an increase of €125 million in revenues from the sale of electricity to end users, mainly as a result of higher revenues from the free markets (€1,047 million), which more than offset the decrease in revenues from the regulated markets (€922 million). More specifically, there was an increase in volumes sold to end users in Latin America, Russia and France, associated with an increase in average prices in all those areas, which more than offset the decline in revenues in Italy;  an increase of €2,013 million in revenues from the wholesale business. Specifically, the improvement was mainly attributable to rising revenues from the sale of electricity on the Power Exchange and higher sales under bilateral contracts entered into by the generating companies in Italy;  an increase of €1,861 million in revenues from electricity trading; and  an increase of €676 million in revenues from contributions from the Electricity Equalization Fund and similar bodies, due primarily to the increase in contributions for extra-peninsular generation in Spain. These increases were partially offset by a decrease of €412 million in revenues from the transport of electricity, due primarily to lower revenues from the transport of electricity for other operators (€683 million), which more than offset higher revenues from the transport of electricity to the Group’s end users (€271 million). Revenues from gas sold and transported to end users increased by €50 million, or 1.4%, compared to 2010. The increase reflected higher average sales prices, which more than offset the impact of the decrease in volumes sold compared to the previous year owing to the decline in consumption as a result of developments in economic conditions in Italy. Gains on the disposal of assets in 2011 amounted to €71 million. They comprised the gains from the sale of a portion of the assets of EUFER to Gas Natural (€44 million), the disposals of Deval and Vallenergie (€21 million), the Spanish company Explotaciones Eólicas de Aldehuelas (€18 million), CAM and Synapsis (€15 million) and the sales of Enel Maritza East 3, Enel Operations Bulgaria and their parent holding companies (€12 million). Another factor was the transfer of the assets of the business line that led to the acquisition (through joint control) of San Floriano Energy (€15 million). The positive impact of these gains was partly offset by the adjustment (totaling approximately €54 million) of the price for the sale of the Spanish high-voltage grids and 80% of Nubia 2000, which held and managed the Group’s gas distribution business in Spain, the previous year and included in the same item, which amounted to €127 million in 2010. Gains from remeasurement at fair value after changes in control amounted to €358 million in 2011 (nil in 2010). The gain was generated by the adjustment of the value of Group assets and liabilities to their fair value, specifically: (i) after the loss of control of Hydro Dolomiti Enel as a result in the change in Hydro Dolomiti Enel’s corporate governance structure, the residual assets and liabilities pertaining to the Group (€237 million); (ii) with respect to those assets and liabilities already owned by Enel prior to obtaining complete control of EUFER (€76 million), Sociedad Eólica de Andalucía (€23 million) and Sociedade Térmica Portuguesa — TP (€22 million).

Revenues from “other services, sales and revenues” amounted €7,153 million in 2011 (€5,631 million in 2010), an increase of €1,522 million, or 27.0%, compared to 2010. The increase was mainly attributable to the following factors:  an increase of €546 million in revenues from fuel for trading, including shipping services, largely due to greater sales of gas as a result of the large rise in volumes handled;  an increase of €523 million in revenues from the sale of goods, attributable to increased sales of CO2 emissions allowances and green certificates;

 an increase of €173 million in revenues associated with the emissions trading system in respect of the grant awarded in 2011 (regarding 2010 and 2011) for the commercial operation of unit 4 of the Torrevaldaliga Nord power plant, which was recognized as a “new entrant” to the emissions trading system; and  an increase of €60 million in revenues for maintenance of the Spanish high-voltage grid sold in December 2010. The following table sets forth the Group’s revenues by business segment for 2011 and 2010.

Year Ended December 31, Change

2011 2010 Amount Percentage

(€ millions) Sales ...... 17,731 18,697 (966) -5.2% Generation and Energy Management ...... 23,146 17,540 5,606 32.0% Engineering and Innovation ...... 397 608 (211) -34.7% Infrastructure and Networks ...... 7,460 7,427 33 0.4% Iberia and Latin America ...... 32,647 31,263 1,384 4.4% International ...... 7,715 6,360 1,355 21.3% Renewable Energy ...... 2,539 2,179 360 16.5% Parent ...... 762 679 83 12.2% Services and Other Activities ...... 1,356 1,133 223 19.7% Eliminations and adjustments ...... (14,239) (12,509) (1,730) 13.8%

Total ...... 79,514 73,377 6,137 8.4%

Sales Revenues for 2011 amounted to €17,731 million, a decrease of €966 million, or 5.2%, compared to €18,697 million in 2010, due to a €286 million decrease in revenues from the free electricity market, mainly attributable to lower volumes sold (decrease of 5.0 TWh) and a €129 million decrease in revenues from the regulated electricity market The decrease in revenues on the regulated electricity market was mainly attributed to lower volumes sold on the enhanced protection market (down 4.2 TWh) and to the decline in revenues from the component covering sales costs. Another factor was the recognition of the negative impact of prior-year items relating to revised estimates (€185 million), mainly estimates of the remuneration recognized in 2010 by the Authority safeguard service operators to cover the default risk in collecting accrued receivables. The decrease in revenues from the natural gas market was largely due to lower volumes sold (a decrease of 922 million cubic meters), as well as the negative impact of prior-year items relating to revised estimates of sales made in previous years. Generation and Energy Management Revenues for 2011 amounted to €23,146 million, an increase of €5,606 million, or 32.0%, compared to €17,540 million in 2010. The increase was mainly attributed to a €2,561 million increase in revenues from trading on international electricity markets, a €389 million increase in revenues from fuel trading, a €916 million increase in revenues from electricity sales, a €1,180 million increase in revenues from CO2 emission rights (certified emission reductions) of which €354 million from the Iberia and Latin America division, a €167 million increase in revenues from the sale of green certificates to the Energy Services Operator, a €173 million increase in revenues attributable to the grant in 2011 (which regarded 2010 and 2011) for the commercial operation of unit 4 of the Torrevaldaliga Nord power plant, a €64 million increase in revenues from fees provided by the Authority’s resolutions on the operation of the Power Exchange, a €237 million increase in income due to the fair value adjustment of the assets and liabilities of Hydro Dolomiti Enel, and the recognition of a gain of €15 million on the acquisition of a stake in San Floriano Energy following the transfer of the associated business unit. These increases were partially offset by a decline of €122 million in revenues due to the change in the method for consolidating Hydro Dolomiti Enel. Engineering and Innovation Revenues in 2011 amounted to €397 million a decrease of €211 million, or 34.7%, compared to 2011. This decrease was due primarily to: a €167 million decrease in plant development and construction business with the Generation and Energy Management division, related mainly to the state of completion of works for the coal conversion of the Torrevaldaliga Nord plant; a €43 million decline in business with E.ON España as a result of the completion of activities at a number of thermal power plants in Spain; and a €24 million decline in plant development and construction business with the companies of the International division resulting from a decrease in activities in Belgium (€25 million) and in Greece (€23 million). The decrease was partially offset by an increase in Slovakia (€17 million) related to the upgrade of the Mochovce 3-4 nuclear plant and in Russia (€7 million) due to the opening of the Nevinnomysskaya plant.

Infrastructure and Networks Revenues in 2011 totaled €7,460 million, an increase of €33 million, or 0.4%, compared to 2010. The change was due primarily to: an increase of €220 million in revenues in respect of grid connection fees (including equalization mechanisms); an increase of €65 million in revenues from service continuity bonuses; an increase of €59 million in revenues and contributions in respect of white certificates; an increase of €43 million in revenues from the sale of digital meters to the Spanish distribution companies belonging to the Iberia and Latin America division; an increase of €21 million in sundry reimbursements; the recognition of income in connection with the settlement with F2i Reti Italia of a number of matters related to the sale of 80% of Enel Rete Gas in 2009 in the amount of €17 million; and positive items amounting to €335 million relating to adjustments and revised estimates for previous years and the equalization of grid losses. These increases were partially offset by lower revenues from the transport of electricity (€729 million), due primarily to the impact of the recognition in the previous year of the rate component to remunerate the early replacement of electromechanical meters (€691 million). Iberia and Latin America Revenues for 2011 amounted to €32,647 an increase of €1,384 million compared to 2010, mainly due to a €1,392 million increase in revenues in Europe. The increase in revenues in Europe was explained by increased revenues from electricity generation (of which €665 million in higher grants for extra-peninsular generation), partially offset by the decline in revenues from distribution operations as a result of the disposal of the power transmission networks in Spain and the transfer of EGPE to the Renewable Energy division. Revenues in Europe also reflected the transfer of the division’s ICT operations and Compostilla Re to the “Services and Other Activities” division. Revenues remained essentially unchanged in Latin America (decrease of €8 million), as the negative impact of exchange rate developments with respect to the Euro more than offset the increased quantities of electricity sold in all the Latin American countries (especially Chile), as well as the recognition of the gain (€15 million) on the sales of CAM and Synapsis.

International Revenues in 2011 amounted to €7,715 million, an increase of €1,355 million, or 21.3%, compared to €6,360 million in 2010. This increase was due to a €1,144 million increase in revenues in central Europe, a €302 million increase in revenues in Russia mainly due to the rise in unit sales prices for Enel OGK-5 and RusEnergoSbyt, partly offset by a €91 million decrease in revenues in south-eastern Europe. The increase in revenues in central Europe was mainly associated with the increase of revenues in Slovakia (€768 million) and France (€376 million), due primarily to an increase in volumes sold. This was accompanied by the entry into effect of the ARENH mechanism in France, which provides access to a greater capacity at regulated prices. The decrease in revenues in south-eastern Europe resulted from the change in the scope of consolidation after the sale of Enel Maritza East 3, Enel Operations Bulgaria and their holding companies in June 2011 as well as the decline in revenues of the Romanian sales companies due to the greater competition in the market. These effects were only partially offset by the gain on the aforementioned disposal in Bulgaria in the amount of €12 million. Renewable Energy Revenues increased by €360 million, or 16.5%, from €2,179 million to €2,539 million, due primarily to: a €307 million increase in revenues in the Iberian peninsula and Latin America, a €40 million increase in revenues in North America, and €13 million increase in revenues in Italy and the rest of Europe. The increase in revenues in the Iberian peninsula and Latin America was due mainly to: (i) the adjustment to fair value of the net assets of Sociedad Eólica de Andalucía (SEA) and TP — Sociedade Térmica Portuguesa (TP) with respect to the portion held prior to the acquisition of an additional stake in the Issuer that gave Enel full control (€45 million), as well as the remeasurement at fair value of the net assets already held in EUFER (€76 million); (ii) the recognition of a gain of €44 million on the sale of the assets of EUFER to Gas Natural and the gain of €18 million on the sale of Explotaciones Eólicas de Aldehuelas; (iii) the change in the scope of consolidation for Sociedad Eólica de Andalucía (SEA) and Sociedade Térmica Portuguesa (TP) observed above and the higher average sales prices. The increase in revenues in North America was mainly attributable to a number of insurance payments and the indemnity received from the Canadian authorities in settlement of a dispute, as well as higher volumes sold. The increase in revenues in Italy and the rest of Europe was due primarily to a €27 million increase in revenues from the rest of Europe, a decrease in revenues from generation in Italy, mainly attributable to lower hydroelectric generation, the expiry of the subsidized CIP 6 mechanism, the decline in average sales prices and a €78 million decrease in revenues for Enel.si, mainly associated with the reduction in sales of photovoltaic panels. The Parent Revenues in 2011 amounted to €762 million, an increase of €83 million over the previous year (up 12.2%). Such increase was due primarily to a €38 million increase in revenues for support and staff activities performed by the Parent, a €27 million

71 increase in revenues from the sale of electricity to the Single Buyer, due primarily to a rise in average sales prices while volumes sold were stable, and the effect of the recognition of the gain on the sale of 51% of Deval in 2011 (€21 million). Services and Other Activities Revenues in 2011 came to €1,356 million, up €223 million compared to 2010. The increase primarily reflected higher revenues for IT services following the transfer of ICT operations from the Iberia and Latin America division for €157 million, higher revenues for telephony services for Group companies, higher revenues for insurance services related to the effect of the change in the scope of consolidation associated with Compostilla Re. These increases were partially offset by a decrease in revenues for construction contracts, mainly relating to IT projects, mainly due to the reduction in the order backlog between the two periods.

Year Ended December 31, Change

2011 2010 Amount Percentage

(€ millions) Sales ...... (163) (198) 35 -17.7% Generation and Energy Management ...... (6,015) (5,367) (648) 12.1% Engineering and Innovation ...... (337) (502) 165 -32.9% Infrastructure and Networks ...... (4,248) (4,436) 188 -4.2% Iberia and Latin America ...... (565) (241) (324) 134.4% International ...... (644) (157) (487) 310.2% Renewable Energy ...... (612) (245) (367) 149.8% Parent ...... (361) (321) (40) 12.5% Services and Other Activities ...... (1,294) (1,031) (263) 25.5%

Total ...... (14,239) (12,498) (1,741) 13.9%

Operating costs excluding depreciation, amortization and impairment losses Excluding depreciation, amortization and impairment losses, which are discussed separately below, operating costs amounted to €62,069 million in 2011 (compared to €56,177 million in 2010), or 78.1% of total revenues (as compared to 76.6% in 2011). Costs for electricity purchases amounted to €29,045 million in 2011 (36.5% of total revenues), an increase of €4,331 million, or 17.5%, compared to the €24,714 million recorded in 2010 (17.5% of total revenues). This mainly reflects the impact of contracts for differences (€3,076 million), the increase in other costs for electricity purchases in Italy and other markets (€1,103 million) associated with the rise in demand and an increase in electricity purchases on the Power Exchange (€152 million). Costs for the consumption of fuel for electricity generation amounted to €7,879 million in 2012 (9.9% of total revenues), an increase of €987 million, or 14.3%, compared to the €6,892 million recorded in 2010 (9.4% of total revenues). The increase primarily reflects the greater quantities consumed by the generation companies as a result of the increase in conventional thermal generation in lieu of generation from other resources as well as the rise in average supply prices. Costs for the purchase of fuels for trading and natural gas for resale to end-users amounted to €3,722 million in 2011 (4.7% of total revenues), an increase of €1.067 million, or 40.2%, compared to the €2,655 million recorded in 2010 (3.6% of total revenues). The change primarily reflects higher costs linked to trading and the rise in the price of gas, which is linked to the trend in the prices of petroleum products. Costs for materials were €2,400 million in 2011 (3.0% of total revenues), an increase of €79 million, or 3.4%, compared to the €2,321 million recorded in 2010 (3.2% of total revenues). This development is mainly attributable to the increase in costs for provisioning European Union Allowance (EUAs) and Certified Emission Reductions (CERs). Personnel costs totaled €4,296 million in 2011 (5.4% of total revenues), a decrease of €611 million, or 12.5%, compared to the €4,907 million recorded in 2010 (6.7% of total revenues). Excluding the effects of the change in the scope of consolidation between the two years and the impact of the costs associated with the contract renewal, personnel costs declined by €541 million, or 11.2%, in 2011, while the average workforce contracted by 2.4%. The decrease in labor costs is

72 due primarily to the completion of the early retirement incentive program (which expired in December 2011), as well as the positive impact of the agreement reached during the year to eliminate electricity discounts for employees in service in Italy. Costs for services, leases and rentals totaled €14,295 million in 2011 (18.0% of total revenues), an increase of €792 million, or 5.9%, compared to the €13,503 million recorded in 2010 (18.4% of total revenues). This increase is due primarily to increased electricity transport costs (€265 million) as a result of higher system costs and costs for services associated with electricity systems in countries in which the Group operates (€398 million). Other operating expenses totaled €2,143 million in 2011 (2.7% of total revenues), a decrease of €807 million, or 27.4%, compared to the €2,950 million recorded in 2010 (4.0% of total revenues). The decrease was largely associated with a decline in provisions for risks and charges made during the year and the revision of estimates for provisions recognized in prior years. These effects were only partially offset by the recognition of the net-worth tax in Colombia following the tax reform introduced in that country with Law 1430/2010. During 2011, capitalized costs came to €1,711 million in 2011 (€1,765 million in 2010), essentially unchanged on the previous year. Net income/(charges) from commodity risk management Net income/(charges) from commodity risk management showed net income of €272 million in 2011 (compared to net income of €280 million in 2010). More specifically, the net income for 2011 includes net income realized in the period in the amount of €160 million (€342 million in 2010), and net income from the fair value measurement of derivatives positions open at the end of the period of €112 million (net charges of €62 million in 2010). Gross operating margin The following table sets forth the Group’s gross operating margin by business segment for 2011 and 2010. Gross operating margin is a non-IFRS financial measure. See “Presentation of Financial and Other Information” and “Selected Financial Data” for more information.

Year Ended December 31, Change

2011 2010 Amount Percentage

(€ millions) Sales ...... 561 483 78 16.1% Generation and Energy Management ...... 2,182 2,392 (210) -8.8% Engineering and Innovation ...... 12 14 (2) -14.3% Infrastructure and Networks ...... 4,285 3,813 472 12.4% Iberia and Latin America ...... 7,251 7,896 (645) -8.2% International ...... 1,642 1,520 122 8.0% Renewable Energy ...... 1,585 1,310 275 21.0% Parent ...... (38) (68) 30 -44.1% Services and Other Activities ...... 237 136 101 74.3% Eliminations and adjustments ...... — (16) 16 -100.0%

Total ...... 17,717 17,480 237 1.4%

The Group’s total gross operating margin in 2011 amounted to €17,717 million and an increase of €237 million, or 1.4%, from the €17,480 million recorded in 2010.

The following is an analysis of gross operating margin by business segment. Sales Gross operating margin for 2011 amounted to €561 million, an increase of €78 million compared to the €483 million recorded in 2010. The increase was due to a €166 million increase in the margin on the free market for electricity and gas partly offset by an €88 million decrease in the margin on the regulated electricity market. The increase in the margin on the free market for electricity and gas was due primarily to the increase of €239 million on the electricity market (mainly due to the greater profitability of the portfolio, which more than offset the decline in volumes sold (a decrease of 5.0 TWh)), only partially offset by the decrease of €70 million in the margin on the gas market (mainly due to the decline in volumes sold and the negative impact of prior-year items). The decrease in the margin on the regulated electricity market was due mainly to a decrease of €24 million in the electricity margin, primarily due to the decline in the average number of enhanced protection market customers following the opening of the market, the recognition of €152 million in negative prior-year items, due primarily to the adjustment of the revenues recognized by the Authority to cover the default risk in collecting accrued 73 receivables on the safeguard market, a decrease of €88 million in operating expenses, mainly due to a decline in early retirement incentives, the positive effects of the agreement reached during the year to eliminate electricity discounts for employees in service in Italy, a reduction in allocations to the provision for risk and charges and the impact of the recognition in 2010 of a prior-year expense in the amount of €12 million for the fine levied by the Authority with resolution No. 66/07. Generation and Energy Management Gross operating margin for 2011 amounted to €2,182 million, a decrease of €210 million, or 8.8%, compared to the €2,392 million recorded in 2010. Excluding the gain from the fair value adjustment of the assets and liabilities of Hydro Dolomiti Enel (€237 million) the gross operating margin would have decreased by €447 million. The decline was attributable to: (i) a €444 million reduction in the generation margin due primarily to the decrease in unit margins and poorer water availability, partially offset by the revenues mentioned above concerning the classification of unit 4 of the Torrevaldaliga Nord plant as a “new entrant” in the emissions trading system and an increase of €109 million in revenues for green certificates; (ii) an €84 million decrease in the margin on natural gas sales and trading due mainly to the contraction in sales prices on the business market (as a result of increased competitive pressures) and on the mass market (following resolution ARG/GAS No. 89/10); (iii) a €90 million decrease due to the effect of the change in the method of consolidating Hydro Dolomiti Enel; (iv) a decrease of €156 million in accruals to the provision for risks and charges, due primarily to the impact of the recognition in 2010 of provisions for risks associated with obligations under supply contracts; and (v) the recognition in the fourth quarter of 2011 of the gain on the transfer of the assets of the business unit that led to the acquisition (through joint control) of San Floriano Energy (€15 million). Engineering and Innovation Gross operating margin amounted to €12 million in 2011, a decrease of €2 million compared to 2010, due to the differences in the profitability of the business conducted during the periods under review. Infrastructure and Networks The gross operating margin amounted to €4,285 million in 2011. An increase of €472 million, or 12.4% compared to 2010. The increase was mainly due to (i) an increase of €220 million in grid connection fees (including equalization mechanisms), as noted in the discussion on revenues; (ii) an increase of €97 million in service continuity bonuses, also taking into account a reduction in penalties; (iii) a decrease of €34 million in the margin on the transport of electricity associated the negative effect of the updating of distribution and metering rates, as well as the change in the scope of consolidation following the sale of the Bolzano grid, only partially offset by an increase in volumes distributed; (iv) negative prior-years items in the amount of €319 million, which among other things reflects the recognition in 2010 of the rate component to remunerate the early replacement of electromechanical meters; and (v) a decline in operating expenses, mainly attributable to a decrease in personnel costs as a result of the decline in net charges for early retirement incentives (€258 million) and the positive effects of the agreement reached during the year for the elimination of electricity discounts for employees in service in Italy (€85 million). These factors were partially offset by a rise in unit labor costs (€25 million) and a €169 million reduction in accruals to provisions for risks and charges, relating largely to the reversal of amounts accrued in 2010 with respect to connections for producers for renewable energy plants built by December 31, 2010. Iberia and Latin America Gross operating margin amounted to €7,251 million, a decrease of €645 million, or 8.2%, compared to 2010. The decrease was related to a €493 million decrease in gross operating margin in Europe and a €152 million reduction in gross operating margin in Latin America. The decrease in gross operating margin in Europe was due primarily to the decline in the generation and sales margin (€449 million). Another factor was the negative impact (€384 million including the results of the disposals) of the change in the scope of consolidation attributable to the transfer of the power transmission grid, the natural gas distribution network in Spain, EGPE, ICT operations and Compostilla Re. These effects were only partially offset by a reduction in personnel costs, mainly due to lower charges for early retirement incentives and the contraction in the average workforce, as well as an improvement of €35 million in the margin associated with remuneration of the extra-peninsular system. The reduction in gross operating margin in Latin America also reflects to the recognition in 2011 of the net-worth tax (€109 million) in Colombia following the reform of tax law with the entry into force of Law 1430/2010, as well as exchange rate losses. These effects were only partially offset by higher margins on generation and distribution. International Gross operating margin amounted to €1,642 million, an increase of €122 million, or 8.0%, compared to 2010. The increase was due to a €94 million increase in gross operating margin in central Europe, due primarily to the change between the two periods in the estimated liability for nuclear decommissioning and a number of contractual obligations pertaining to Slovenské elektrárne (a total of €100 million); a €57 million increase in gross operating margin in Russia, related to the increase in the margin of RusEnergoSbyt (€43 million) and Enel OGK-5 (€14 million) as a result of the increase in the 74 average sales prices, and a decrease in the margin in south-eastern Europe as a result of the exit of the division’s Bulgarian companies from the scope of consolidation, which more than offset the gain on their sale (€12 million). Renewable Energy Gross operating margin amounted to €1,585 million, an increase of €275 million, or 21.0%, compared to 2010 attributable to a €237 million increase in the margin in the Iberian peninsula and in Latin America due to the remeasurement at fair value mentioned above and gains on sales, as noted in the discussion on revenues, in addition to higher generation margins achieved in Spain as a result of higher average sales prices; a €23 million increase in the margin in North America, mainly attributable to the factors noted under the discussion on revenues above; and a €15 million increase in the margin achieved in Italy and the rest of Europe, due mainly to higher sales volumes and average sales prices, as noted in the discussion on revenues, which more than offset the rise in costs for personnel and services, partly associated with the expansion in installed capacity.

Parent Gross operating margin in 2011 was a negative €38 million, an improvement of €30 million. This development was largely due to the recognition of the gain mentioned above, an improvement in operating efficiency, and to an increase in the margin on electricity (€1 million). Services and Other Activities Gross operating margin in 2011 amounted to €237 million, an increase of €101 million, or 74.3%, over the previous year, due primarily to the positive effect of margins on contracts, the revised estimate of liabilities for early employee retirement incentives (€23 million), the reversal of the liability recognized in previous years for electricity discounts for employees in service in Italy following the agreement reached in 2011 to eliminate the benefit and the higher margin on insurance services, relating to the change in the scope of consolidation mentioned above.

Depreciation, amortization and impairment losses Depreciation, amortization and impairment losses amounted to €6,351 million in 2011, an increase of €129 million (or 2.1%) compared to 2010. The increase is attributable to the net impact of higher depreciation, amortization and impairment losses in the amount of €327 million, partially offset by a decrease in net writedowns of trade receivables in the amount of €198 million. The increase in depreciation and amortization was due primarily to an increase in the installed renewables generation capacity. The increase in impairment losses was due to the increase in the impairment losses on the value of the electricity distribution grids in Argentina (€153 million) and on the goodwill allocated to the CGUs of Enel Green Power Hellas (€70 million) and Marcinelle Energie (€26 million). Operating income The following table sets forth the Group’s operating income by business segment for 2011 and 2010.

Year Ended December 31, Change

2011 2010 Amount Percentage

(€ millions) Sales ...... 141 58 83 143.1% Generation and Energy Management ...... 1,590 1,832 (242) -13.2% Engineering and Innovation ...... 9 10 (1) -10.0% Infrastructure and Networks ...... 3,347 2,911 436 15.0% Iberia and Latin America ...... 4,057 4,643 (586) -12.6% International ...... 1,062 903 159 17.6% Renewable Energy ...... 1,080 966 114 11.8% Parent ...... (52) (75) 23 -30.7% Services and Other Activities ...... 132 26 106 407.7% Eliminations and adjustments ...... — (16) 16 -100.0%

Total ...... 11,366 11,258 108 1.0%

The following is an analysis of operating income by business segment.

Sales Operating income for 2011, after depreciation, amortization and impairment losses in the amount of €420 million (depreciation, amortization and impairment losses were €425 million in 2010), amounted to €141 million, up €83 million compared to 2010. This is in line with the gross operating margin for this division.

Generation and Energy Management Operating income amounted to €1,590 million (€1,832 million in 2010) reflecting an increase of €32 million in depreciation, amortization and impairment losses, mainly attributable to the writedown of certain trade receivables in 2010, as well as higher depreciation and amortization in connection with the completion of the allocation of the purchase price for SE Hydropower. Engineering and Innovation Operating income for 2011 amounted to €9 million, a decrease of €1 million in line with the change in gross operating margin for this division. Infrastructure and Networks Operating income, after depreciation, amortization and impairment losses of €938 million (depreciation, amortization and impairment losses were €902 million in 2010), amounted to €3,347 million, an increase of €436 million, or 15.0%, compared to 2010 in line with the gross operating margin for this division. Iberia and Latin America Operating income in 2011, after depreciation, amortization and impairment losses of €3,194 million (depreciation, amortization and impairment losses were €3,253 million in 2010), amounted to €4,057 million, a decrease of €586 million compared to 2010. More specifically, the reduction in depreciation, amortization and impairment losses in 2011 included the impact of the revision of the useful lives of the plants of Compañía de Interconexión Energética (CIEN), a company providing interconnection services between Brazil and Argentina, as well as the effect of the change in the scope of consolidation (due primarily to the disposal of the Spanish high-voltage grid). This reduction was partially offset by the value adjustment of €153 million recognized in 2011 in respect of electricity distribution plant in Argentina. International Operating income in 2011 amounted to €1,062 million, an increase of €159 million compared to 2010, reflecting a decrease of €37 million in depreciation, amortization and impairment losses. Renewable Energy Operating income totaled €1,080 million, an increase of €114 million compared to 2010, despite an increase of €161 million in depreciation, amortization and impairment losses in 2010, due primarily to the change in the scope of consolidation. Parent Operating income showed a loss of €52 million improved by €23 million compared to 2010, which was in line with developments in the gross operating margin. Services and Other Activities Operating income in 2011 amounted to €132 million, increased by €106 million over 2010, which was in line with developments in the gross operating margin. Financial income/(expense) Net financial expense in 2011 amounted to €3,024 million, a decrease of €174 million compared to 2010 (€3,198 million). More specifically, the reduction was associated with a decline in average net financial debt, the negative adjustment of €104 million recognized in 2010 of interest for the deficit of the Spanish peninsular and extra-peninsular electricity sector and the recognition in 2011 of default interest of €63 million relating to a decision resolving a tax dispute in the Group’s favor in Spain. These positive factors were partly offset by greater financial expense recognized after the assignment of receivables.

Share of income/(expense) on equity investments accounted for using the equity method The share of income/(expense) from investments accounted for using the equity method showed net income of €96 million in 2011, an increase of €82 million compared to 2010. The result is due primarily to the positive performance of the associated companies in the Renewable Energy division. Income taxes Income taxes for 2011 amounted to €3,080 million (€2,401 million in 2010), equal to 36.5% of taxable income, compared to 29.7% in 2010. This reflects the adjustment of current and deferred tax following the change to the rules governing the “Robin Hood Tax,” which amounted to €225 million. Group net income Group net income was €4,148 million in 2011, compared to €4,390 million in 2010, a decrease of 5.5%. The decline was attributable to the rise in the tax liability for the year reflecting the adjustment of current and deferred taxation following the changes in the rules governing the “Robin Hood Tax” in Italy, which more than offset the improvement in the operating and financial performance of the Group. Cash flow The following is a discussion and analysis of the Group’s cash-flow data for the years ended December 31, 2012, 2011 and 2010 and for the six months ended June 30, 2013 and 2012, which has been derived from the Group’s Audited Consolidated Financial Statements and the Unaudited Condensed Interim Consolidated Financial Statements, respectively. For a description of the changes in our scope of consolidation and the restatements affecting the comparability of the periods below, see “— Presentation and comparability of financial statements” and “— Restatements” in this section. Six months ended June 30, 2013 compared to the six months ended June 30, 2012 (restated) The following table sets forth the Group’s cash flows for the six months ended June 30, 2013 and 2012 (restated).

Six months ended June 30,

2013 2012 (restated)(3)

(€ millions) Cash flow (used in)/from operating activities ...... 610 2,665 Cash flow (used in) investing/disinvesting activities ...... (2,393) (2,741) Cash flow from financing activities ...... (2,277) 1,878 Impact of exchange rate fluctuations on cash and cash equivalents ...... (129) 36

Increase/(Decrease) in cash and cash equivalents ...... (4,189) 1,838

Cash and Cash equivalents at the beginning of the period(1) ...... 9,933 7,072 Cash and Cash equivalents at the end of the period(2) ...... 5,744 8,910

(1) Of which cash and cash equivalents equal to €9,891 million at January 1, 2013 (€7,015 million at January 1, 2012), short-term securities equal to €42 million at January 1, 2013 (€52 million at January 1, 2012) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €0 million at January 1, 2013 (€5 million at January 1, 2012). (2) Of which cash and cash equivalents equal to €5,714 million at June 30, 2013 (€8,845 million at June 30, 2012), short-term securities equal to €28 million at June 30, 2013 (€55 million at June 30, 2012) and cash and cash equivalents pertaining to assets held for sale in the amount of €2 million at June 30, 2013 (€10 million at June 30, 2012). (3) Restated to reflect the retrospective effect of the adoption of “IAS 19R – Employee Benefits.” See Note 3 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements.

Cash flow (used in)/from operating activities Cash flows used in operating activities in the six months ended June 30, 2013 amounted to €610 million, a change of €2,055 million from the positive flows registered in the same period in 2012. More specifically, the greater uses of cash in connection with the change in net current assets in the two periods and the decline in gross operating margin were only partially offset by exchange rate changes and in the number of non-monetary components. Cash flow (used in) investing/disinvesting activities Cash flows used in investing/disinvesting activities in the six months ended June 30, 2013 absorbed funds in the amount of €2,393 million, while in the corresponding period of 2012 they had absorbed funds totaling €2,741 million. In particular, investments in property, plant and equipment and in intangible assets totaling €1,045 million decreased by €447 million compared with the corresponding period of the previous year. 77

Investments in entities or business units, net of cash and cash equivalents acquired, amounted to €152 million and mainly reflected the acquisition of 100% of Parque Eolico Talinay Oriente, a Chilean company, by the Renewable Energy division and the acquisition of an additional 26% interest in each of the Chisholm View Wind Project and the Prairie Rose Wind Farm, two U.S. companies operating in the wind generation sector, in which the Group previously held interests of 49%. Divestment of entities and business units, net of cash and cash equivalents sold, generated cash flows of €68 million and was entirely accounted for by the sale of 51% of the Buffalo Dunes Wind Project. Cash flows generated by other investing/disinvesting activities for the six months ended June 30, 2013, which totaled €50 million, are due primarily to the proceeds from the sale of the investment in Medgaz (€84 million) and other smaller disposals. These factors were partially offset by the cash outflow of €69 million, which is equal to the portion of the capital increase of Buffalo Dunes Wind Project subscribed by the Group in proportion to its remaining stake held in such company.

Cash flow (used in) / from financing activities Cash flows used in financing activities were €2,277 million for the six months ended June 30, 2013, while for the six months ended June 30, 2012, financing activities generated cash flows of €1,878 million. The change in cash flows related to financing activities was mainly due to a decrease in bond issues during the six months ended June 30, 2013, only partly offset by the impact of the capital increase at Enersis, a Chilean company controlled by Endesa through its wholly owned subsidiary Endesa Latinoamérica, by non-controlling shareholders. Therefore, for the six months ended June 30, 2013, cash flows from operating activities in the amount of €610 million only partly offset the cash used in financing activities in the amount of €2,277 million and the cash used in investing activities in the amount of €2,393 million. 2012 compared to 2011 (restated) The following table sets forth the Group’s cash flow for 2012 and 2011 (restated). The consolidated statements of cash flows data for the years ended December 31, 2012 and 2011 (restated) does not reflect the application of “IAS 19R – Employee

Benefits.”

Year Ended December 31,

2011 2012 (restated)(3)

(€ millions) Cash flow (used in)/from operating activities ...... 10,415 11,713 Cash flow (used in) investing/disinvesting activities ...... (6,588) (7,400) Cash flow from financing activities ...... (995) (2,509) Impact of exchange rate fluctuations on cash and cash equivalents ...... 29 (74)

Increase/(Decrease) in cash and cash equivalents ...... 2,861 1,730

Cash and Cash equivalents at the beginning of the year(1) ...... 7,072 5,342 Cash and Cash equivalents at the end of the year(2) ...... 9,933 7,072

(1) Of which cash and cash equivalents equal to €7,015 million at January 1, 2012 (€5,164 million at January 1, 2011), short-term securities equal to €52 million at January 1, 2012 (€95 million at January 1, 2011) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €5 million at January 1, 2012 (€83 million at January 1, 2011). (2) Of which cash and cash equivalents equal to €9,891 million as of December 31, 2012 (€7,015 million at December 31, 2011), short-term securities equal to €42 million as of December 31, 2012 (€52 million as of December 31, 2011) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €0 million as of December 31, 2012 (€5 million at December 31, 2011). (3) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

Cash flow (used in)/ from operating activities The Group’s cash flow from operating activities decreased by €1,298 million, from €11,713 million in 2011 to €10,415 million in 2012. More specifically, the increase in uses of cash in connection with the change in net current assets and the decrease in the gross operating margin were partly offset by the self-financing generated by the rise in net accruals to provisions and the change in the non-monetary components of income. Cash flows from operating activities in the amount of €10,415 million were used to cover the cash requirements of financing activities in the amount of €995 million and of investing activities in the amount of €6,588 million. Cash flow (used in) investing/disinvesting activities The Group’s net cash outflow from investing activities decreased from €7,400 million in 2011 to €6,588 million in 2012. Cash requirements in respect of investments in property, plant and equipment and in intangible assets, totaling 78

€7,149 million, declined by €440 million, while cash used in investments in entities or business units, net of cash and cash equivalents acquired, amounted to €182 million, increased by €29 million. Investments in entities or business units in 2012 were largely related to the acquisition of 100% of Stipa Nayaa (€120 million), a Mexican company operating in the wind generation sector, as well as other minor acquisitions and advances paid for future acquisitions. Investments in entities or business units in 2011, net of cash and cash equivalents acquired, included the acquisition of additional interests in Ampla Energia e Serviços (€85 million), a Brazilian company already controlled by the Group, and additional interests in Sociedad Eólica de Andalucía and Sociedade Térmica Portuguesa (€48 million) that led to the acquisition of full control of those companies. The disposal of entities or business units, net of cash and cash equivalents sold, generated cash flows of €388 million (an increase of €223 million compared to 2011), related to the disposals of the holding in Parque Eólico de Malpica, Wisco and Dicogexsa, which operates in the gas sector in Spain (for a total of €42 million), as well as the disposal of the entire share capital of Endesa Ireland (€346 million), which had already been classified under assets held for sale at the end of 2011. In 2011, this line item reported the cash flow generated by the disposals of CAM and Synapsis in Latin America, the disposal of Enel Maritza East 3, Enel Operations Bulgaria and the related holding companies, the disposal of 51% of Deval and Vallenergie, and the disposal of the Spanish company Explotaciones Eólicas de Aldehuelas. Cash flows generated by other investing/disinvesting activities in 2012 totaled €355 million, and are related to the proceeds from the sale of the investment in Terna S.p.A. (€281 million) and the Spanish companies Euskaltel and Gas de Extremadura Transportista (a total of €37 million), as well as other disinvestments during the period amounting to a total of €183 million. These factors were partially offset by the cash outflow associated with the purchase of minority stakes in the Chisholm View Wind Project and the Prairie Rose Wind Farm (for a total consideration of €108 million) and the acquisition of the gas customer list for the metropolitan Madrid area (€38 million). Cash flow (used in) financing activities The Group had a net cash outflow from financing activities of €995 million in 2012 compared to a cash outflow of €2,509 million in 2011. The variation of €1,514 million was principally the result of lower dividends paid in 2012 (€2,229 million compared to €3,517 million in 2011 restated).

2011 compared to 2010 The following table sets forth the Group’s cash flow for 2011 and 2010. For comparability purposes, the consolidated income statement data for the years ended December 31, 2011 and 2010 does not reflect the application of the adoption of “IAS 19R — Employee Benefits” and also does not reflect the application of the new accounting policy for white certificates (EECs).

Year Ended December 31,

2011 2010

(€ millions) Cash flow from operating activities ...... 11,713 11,725 Cash flow (used in) investing/disinvesting activities ...... (7,400) (4,910) Cash flow (used in) financing activities ...... (2,509) (5,976) Impact of exchange rate fluctuations on cash and cash equivalents ...... (74) 214 Increase/(Decrease) in cash and cash equivalents ...... 1,730 1,053 Cash and Cash equivalents at the beginning of the year ...... 5,342 4,289 Cash and Cash equivalents at the end of the year(1) ...... 7,072 5,342

(1) Of which cash and cash equivalents equal to €7,015 million as of December 31, 2011 (€5,164 million as of December 31, 2010), short-term securities equal to €52 million at December 31, 2011 (€95 million as of December 31, 2010) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €5 million as of December 31, 2011 (€83 million as of December 31, 2010). Cash flow from operating activities The Group’s cash flows from operating activities in 2011 amounted to €11,713 million and were virtually unchanged with respect to the previous year. More specifically, the decline in uses of cash in connection with the change in net current assets in the two periods, as well as the rise in the gross operating margin, were offset by the impact of the reduction in net accruals to provisions on net income for the period. Cash flows from operating activities in the amount of €11,713 million were used to cover the cash requirements of financing activities in the amount of €2,509 million and of investing activities in the amount of €7,400 million.

Cash flow (used in) investing/disinvesting activities The Group’s net cash outflow from investing activities absorbed funds in the amount of €7,400 million in 2011, while in 2010 they had absorbed cash totaling €4,910 million. In particular, in 2010, this item included total cash flows of €2,610 million from the receipt of the balance on the sale of 51% of the Russian company SeverEnergia, the sale of 50.01% of Endesa Hellas, the disposal of 80% of Nubia 2000, which held and managed the assets (acquired by Endesa Gas) in the gas transport and distribution industry in Spain, and the sale of the power transmission grids and investments in property, plant and equipment and in intangible assets, totaling €7,589 million in 2011, increased by €410 million as compared to 2010. Investments in entities or business units in 2011, net of cash and cash equivalents acquired, amounted to €153 million and are largely accounted for by the acquisition of additional interests in Ampla Energia e Serviços, Ampla Investimentos e Serviços and Electrica Cabo Blanco (companies already controlled by the Group) and additional interests in Sociedad Eólica de Andalucía and Sociedade Térmica Portuguesa that led to the acquisition of control of those companies. Investments in entities or business units of €282 million in 2010, also net of cash and cash equivalents acquired, reflected the acquisition of a number of companies operating in the generation of electricity from renewable resources in Italy, the acquisition of Enel Longanesi Development, which operates in the natural gas extraction sector in Italy, the acquisition of Padoma Wind Power, which is specialized in the development of wind plants in California, and a number of smaller acquisitions. The disposal of entities or business units, net of cash and cash equivalents sold, generated cash flows of €165 million in 2011, primarily accounted for by the disposals of CAM and Synapsis in Latin America, the disposal of Enel Maritza East 3, Enel Operations Bulgaria and the related holding companies, the disposal of 51% of Deval and Vallenergie, and the disposal of the Spanish company Explotaciones Eólicas de Aldehuelas.

Cash flows generated by other investing/disinvesting activities in 2011 totaled €177 million, primarily attributable to disinvestments in the period amounting to €196 million, which were only partly offset by the acquisition of additional interests in CESI. Cash flow (used in) financing activities The Group had a net cash outflow from financing activities of €2,509 million in 2011, as compared to a cash outflow of €5,976 million in 2010. Cash flows for the period under review primarily reflect the cash requirement generated by the payment of dividends in the amount of €3,517 million, partly offset by the change in net financial debt in the amount of €1,059 million. In 2010, the Group benefited from the positive effects of the sale (without ceding control) of 30.8% of EGP, offset by the change in net financial debt and dividend payments. Debt and liquidity The following table sets forth the Group’s net financial debt, calculated in accordance with the standards set forth by ESMA and in accordance with CONSOB’s instructions, as of June 30, 2013 and as of December 31, 2012, 2011 (restated) and 2010.

As of December 31, As of June 30, 2011 2013 2012 (restated)(3) 2010

(€ millions) Cash and cash equivalents on hand ...... 616 1,027 1,068 6 Bank and post office deposits ...... 5,098 8,864 5,947 5,158 Securities ...... 28 42 52 95

Liquidity ...... 5,742 9,933 7,067 5,259 Short-term financial receivables ...... 2,571 1,923 1,900 1,289 Factoring receivables ...... 232 288 370 319 Short-term portion of long-term financial receivables ...... 5,585 5,318 5,632 9,290

Current financial receivables ...... 8,388 7,529 7,902 10,898 Short-term bank debt(1) ...... (88) (283) (888) (281) Commercial paper ...... (4,404) (2,914) (3,204) (7,405) Short-term portion of long-term bank debt ...... (951) (714) (6,894) (949) Bonds and preference shares (short-term portion) ...... (2,084) (3,115) (2,473) (1,854) Other loans (short-term portion) ...... (298) (228) (305) (196) Other short-term financial payables ...... (438) (773) (707) (523)

Total short-term financial debt...... (8,263) (8,027) (14,471) (11,208)

Net short-term financial position ...... 5,867 9,435 498 4,949 80

As of December 31, As of June 30, 2011 2013 2012 (restated)(3) 2010

(€ millions) Debt to banks and financing entities ...... (12,780) (13,282) (9,918) (15,584) Bonds and preference shares ...... (39,992) (41,509) (37,641) (35,875) Other loans ...... (1,305) (1,168) (1,144) (981)

Long-term financial position ...... (54,077) (55,959) (48,703) (52,440)

Net Financial Debt (as per ESMA standard and CONSOB instructions)(2) ...... (48,210) (46,524) (48,205) (47,491)

(1) Includes short-term loans, the amount owing under short-term credit lines, and bank accounts payable. (2) The Group’s net financial debt (ESMA standard) is ascertained pursuant to paragraph 127 of the CESR/05-054b Recommendations, implementing European Commission Regulation 809/2004, and in accordance with the CONSOB instruction of July 26, 2007. (3) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

The net financial debt (ESMA standard) of the Group as of December 31, 2011 is the same under the restated 2011 financial statements and the original audited 2011 financial statements. The Group’s management also uses net financial debt (Enel method) to monitor its financial position, which it calculates as described below. See “Presentation of Financial and Other Information.”

As of As of December 31, June 30, 2013 2012 2011 2010

(€ millions) Net Financial Debt (ESMA standard) ...... 48,210 46,524 48,205 47,491 Less: Long-term financial receivables and securities ...... 3,695 3,576 3,576 2,567

Net Financial Debt (Enel method) ...... 44,515 42,948 44,629 44,924

The following table sets forth the Group’s (i) operating income and financial expenses, (ii) net financial debt (Enel method) and (iii) total shareholders’ equity as of and for the years ended December 31, 2012, 2011 (as restated), 2011 and 2010.

As of and for the Year Ended December 31,

2011 2012 (restated)(3) 2011 2010

(€ millions) Operating income ...... 7,735 11,278 11,366 11,258 Financial expense ...... 5,275 5,717 5,717 5,774

Operating income/Financial expense ...... 1.47 1.97 1.99 1.95

Net Financial Debt (Enel method) ...... 42,948 44,629 44,629 44,924 Total shareholders’ equity ...... 53,158 54,300 54,440 53,866(1) Net Financial Debt (Enel method)/Total shareholders’ equity ...... 0.8 0.82 0.82 0.83(2)

Net Financial Debt (Enel method) ...... 42,948 44,629 44,629 44,924 Gross operating margin (EBITDA) ...... 16,738 17,605 17,717 17,480

Net Financial Debt (Enel method)/Gross operating margin (EBITDA) ...... 2.57 2.54 2.52 2.57

(1) This figure is restated. See “Presentation of Financial and Other Information—Restatements”. (2) Total shareholders’ equity is a restated figure. (3) Restated to reflect the new accounting policy for white certificates (EECs). See Note 4 to the 2012 Audited Consolidated Financial Statements.

The Group’s average cost of debt financing amounted to 6.1% in 2012, 5.9% in 2011 and 5.5% in 2010. The following table provides details of the Group’s long-term bonds and preference shares as of June 30, 2013.

Maturing Balance

Bonds: Listed, fixed rate ...... 2013-2097 28,399 Listed, floating rate ...... 2013-2031 6,442 Unlisted, fixed rate ...... 2013-2039 5,746 Unlisted, floating rate ...... 2013-2032 1,489

Total ...... 42,076

Preference shares: Floating rate ...... -

Total ...... -

TOTAL ...... 42,076

The following table provides details of the Group’s long-term debt to banks and financing entities, long-term bonds, preference shares and other long-term loans as of December 31, 2012 and 2011.

As of December 31, As of December 31, 2012 2011

Maturing Balance Nominal Amount Balance

(€ millions)

Bonds: Listed, fixed rate ...... 2013-2097 29,882 30,176 25,042 Listed, floating rate ...... 2013-2031 6,507 6,558 6,521 Unlisted, fixed rate ...... 2013-2039 6,460 6,466 6,606 Unlisted, floating rate ...... 2013-2032 1,594 1,594 1,765

Total ...... 44,443 44,794 39,934

Bank loans: Fixed rate ...... 2013-2046 853 861 900 Floating rate ...... 2013-2035 11,814 11,876 10,514 Use of revolving credit lines ...... 2013-2017 1,329 1,329 5,398

Total ...... 13,996 14,066 16,812

Preference shares: Floating rate ...... 2013(1) 181 181 180

Total ...... 181 181 180

Non-bank loans: Fixed rate ...... 2013-2035 915 915 931 Floating rate ...... 2013-2030 481 481 518

Total ...... 1,396 1,396 1,449

TOTAL ...... 60,016 60,437 58,375

(1) The preference shares issued by Endesa Capital Finance LLC are perpetual. The option for early redemption at par (originally as from 2013) was exercised in March 2013.

The following table provides further details regarding the maturity profile of the Group’s long-term debt to banks and financing entities, long-term bonds and other long-term financial liabilities.

Maturing in:

Maturing 2013 2014 2015 2016 Beyond

(€ millions)

Bonds: Listed, fixed rate ...... 2013-2097 1,960 490 2,603 3,696 21,133 Listed, floating rate ...... 2013-2031 157 1,197 1,476 1,201 2,476 Unlisted, fixed rate ...... 2013-2039 758 1,033 — 116 4,553 Unlisted, floating rate ...... 2013-2032 59 61 63 64 1,347

Total ...... 2,934 2,781 4,142 5,077 29,509

Bank loans: Fixed rate ...... 2013-2046 50 52 58 75 618 Floating rate ...... 2013-2035 664 870 738 1,420 8,122 Use of revolving credit lines ...... 2013-2017 - 800 124 402 3

Total ...... 714 1,722 920 1,897 8,743

Preference shares: (1) Floating rate ...... 2013 181

Total ...... 181

Non-bank loans: Fixed rate ...... 2013-2035 99 93 85 102 536 Floating rate ...... 2013-2030 129 72 42 43 195

Total ...... 228 165 127 145 731

TOTAL ...... 4,057 4,668 5,189 7,119 38,983

(1) The preference shares issued by Endesa Capital Finance LLC are perpetual. The option for early redemption at par (originally as from 2013) was exercised in March 2013.

The following table provides details concerning the currencies of denomination and interest rates applicable to the Group’s long-term financial debt as of June 30, 2013 and December 31, 2012.

Current Current Average Effective Nominal Balance a Interest Interest Balance at June Amount at December Rate at June Rate at June 30, 2013 June 30, 2013 31, 2012 30, 2013 30, 2013

(€ millions) Euro ...... 41,135 41,449 42,777 3.66% 3.84% US dollar ...... 8,074 8,100 8,380 5.87% 6.12% Pound sterling ...... 3,907 3,955 4,102 5.80% 5.91% Colombian peso ...... 1,446 1,446 1,600 7.70% 7.70% Brazilian real ...... 765 767 839 11.20% 11.50% Swiss franc ...... 590 592 603 2.85% 2.91% Chilean peso/UF ...... 502 516 532 5.50% 7.60% Peruvian sol ...... 311 311 349 6.70% 6.70% Russian ruble ...... 257 257 347 8.14% 8.14% Japanese yen ...... 267 267 304 2.35% 2.38% Other currencies ...... 156 156 183 83

Current Current Average Effective Nominal Balance a Interest Interest Balance at June Amount at December Rate at June Rate at June 30, 2013 June 30, 2013 31, 2012 30, 2013 30, 2013

(€ millions)

Total non-euro currencies ...... 16,275 16,367 17,239

TOTAL ...... 57,410 57,816 60,016

As of December 31, 2012, no party outside the Group had any beneficial rights in respect of any of the Group’s property, plants or equipment to secure any of the Group’s debt. Further information regarding bonds and preference shares Bonds Listed below are the principal bond issuances undertaken by the Group in 2013 to date, 2012, 2011 and 2010.

 In December 2012, Emgesa issued bonds in Colombian pesos totaling €213 million.  In October 2012, Enel Finance International N.V. (“EFI”) issued a bond for institutional investors totaling €2,000 million structured into the following tranches: (i) €1,000 million fixed-rate 4.875% maturing on April 17, 2023; and (ii) 1,000 million fixed-rate 3.625% maturing on April 17, 2018.  In October 2012, EFI issued a bond in Swiss francs for institutional investors totaling €290 million maturing on December 17, 2018.  In September 2012, EFI issued a bond for institutional investors totaling €1,000 million, fixed-rate 4.875% maturing on March 11, 2020.  In June 2012, Ampla issued bonds in Brazilian reais totaling €155 million.  In February 2012, the Issuer issued a retail bond totaling €3,000 million structured into the following tranches: (i) €2,500 million fixed-rate 4.875% maturing on February 20, 2018; and (ii) €500 million floating-rate maturing on February 20, 2018.  On October 24, 2011, EFI issued a bond, under the global medium-term notes program, for institutional investors totaling €2,250 million, structured into the following two tranches: (i) €1,250 million fixed-rate 4.625% maturing June 24, 2015; and (ii) €1,000 million fixed-rate 5.750% maturing October 24, 2018.  On October 2011 and June 2011, Ampla and Coelce issued bonds in Brazilian totaling €311 million.  On July 12, 2011, EFI issued a bond, under the global medium-term notes program, for institutional investors totaling €1,750 million, structured into the following two tranches: (i) €1,000 million fixed-rate 4.125% maturing July 12, 2017; and (ii) €750 million fixed-rate 5% maturing July 12, 2021.  On June 29, 2011, Enel OGK-5 issued a bond denominated in rubles in the amount of €120 million.  In June 2011 and March 2011, EFI issued, under the global medium-term notes program, bonds in the form of private placements and public placements (for those denominated in Swiss francs), in five tranches: (i) €150 million fixed- rate 5.6% maturing in 2031; (ii) €50 million fixed-rate 5.65% maturing in 2030; (iii) 150 million Swiss francs fixed- rate 2% maturing in 2015; (iv) 100 million Swiss francs fixed-rate 3% maturing in 2020; and (v) 11,500 million yen fixed-rate 1% maturing in 2018.  In January 2011, Emgesa issued a bond in Colombian pesos for a total of €290 million.  On February 26, 2010, the Issuer issued a pan-European multi-tranche bond for retail investors totaling €3,000 million, with the following two tranches: (i) €2,000 million fixed-rate 3.5% bond maturing on February 26, 2016; and (ii) €1,000 million floating-rate bond maturing on February 26, 2016.

The foregoing list is not a list of all outstanding bonds. Rather, it is only a list of the Group’s principal bond issuances in the six months ended June 30, 2013 and in 2012, 2011 and 2010. The Group’s total bonds outstanding (including the long-and short-term portions) amounted to €42,076 million as of June 30, 2013 and €44,443 million as of December 31, 2012.

The Group has one global medium-term notes programs currently available for potential bond issuances. Enel, EFI and Enel Investment Holding B.V. (“EIH”) are the issuers under the program, under which a maximum of €35 billion of notes may be issued. This program was updated in May 2013. Preference shares The preference shares, amounting to €181 million as of December 31, 2012, were issued in 2003 by Endesa Capital Finance, and guaranteed by Endesa. The original issuance amount was €1,500 million. During 2011 Endesa preference shares in the nominal amount of €1,319 million were redeemed early. Dividends are linked to the three-month EURIBOR rate, to the extent it is between 4% and 7% in the first ten years, and linked to the three-month EURIBOR rate increased by 3.75% beginning from the eleventh year. Covenants related to long-term financing The agreements entered into in respect of the long-term financing of the Group include covenants to which the debtor companies (Enel, Endesa and other companies of the Group), and in some cases Enel, as guarantor, are subject. These covenants are in line with international market practice. The main covenants arising from the Group’s debt relate to the bonds issued within the context of Enel’s global medium-term note program, the loans granted by the European Investment Bank (“EIB”) and Cassa Depositi e Prestiti, the credit agreement 2009, the €10 billion revolving line of credit agreed in April 2010, the €9.44 billion forward start revolving credit facility and the Term Facility Agreement of €3.2 billion. To Enel’s knowledge, none of the covenants under the relevant agreements have been breached as of the date hereof. Global medium-term notes program covenants The notes issued under the global medium-term notes program are subject to the following covenants, among others:  “negative pledge” clauses, pursuant to which the relevant issuer may not create or maintain (unless required by law) mortgages, pledges or other encumbrances affecting all or any part of its assets, in order to guarantee any listed (or to- be-listed) bonds, unless such security interests are equally or ratably extended to the notes at issue;  “pari passu” clauses, pursuant to which the notes represent direct, unconditional, non-guaranteed obligations of the relevant issuer, without any preference and with the same seniority as other current or future bond issuances of the issuer;  event-of-default clauses, under which, if certain circumstances were to arise (e.g. insolvency, failure to pay principal or interest, liquidation of the relevant issuer, etc.), a default would occur and the notes would become due (pursuant to “cross default” clauses, in case of an event of default on any other financial debt (above certain thresholds) of the issuer or of a significant subsidiary of the Group, a default would also occur with respect to the notes at issue); and  early redemption clauses in case of relevant changes in taxation, pursuant to which the notes may be redeemed at par.

EIB loan covenants The loans granted to Enel subsidiaries by the EIB are subject to the following covenants, among others:  “negative pledge” clauses, pursuant to which the borrowers may not establish of provide to third parties guarantees or security interests additional to those that are already envisaged under each agreement, unless an equivalent guarantee or security interest is equally or ratably extended to the loan at issue;  clauses requiring the maintenance of the relevant guarantor’s credit rating (the guarantor may be Enel or a bank approved by the EIB) at or above a certain level (in case of a guarantee provided by Enel, the net assets of the Group must also not fall below a certain level);  “material change” clauses, pursuant to which, if specific events were to occur (mergers, de-mergers, sales or divestitures of lines of business, changes to the structure of the Issuer, etc.) the agreement would be amended accordingly (a failure to do so would constitute grounds to call the relevant loan for immediate early repayment);  clauses concerning the periodic provision of business information to the EIB;  clauses setting forth obligations to carry insurance and maintain properties and for the possession and use of operations, plants and machinery under the financing arrangements for the entire duration of the relevant loan; and  termination clauses, under which, if certain events were to occur (serious inaccuracies in the documents provided at the execution of the agreement, failures to pay, insolvency, etc.) the relevant loan would become immediately due.

The downgrade of the long-term rating of Enel from BBB+ to BBB with a stable outlook by Standard & Poor's Rating Service has not had a significant impact on either the cost of outstanding debt or of new borrowing, partly due to the low 85 volatility of spreads in the secondary market for bonds issued by Enel, whose prices already reflect the rating issued by Moody's (Baa2), with which the rating issued by Standard & Poor's (BBB) is now aligned.

With regard to compliance with the covenants in the loans granted by EIB, renegotiation of some of these covenants is ongoing and should not materially impact on the Group’s cost of debt.

Cassa Depositi e Prestiti loan covenants In 2009, Cassa Depositi e Prestiti granted a loan to Enel Distribuzione that was amended in 2009 and 2011 for an aggregate amount of up to €1 billion, followed by a further loan of up to €340 million in 2011. The main covenants governing the loans and the guarantees issued by the Issuer are as follows:  termination and acceleration clause, under which the occurrence of a specified event (such as failure to pay principal or interest installments, breach of contract obligations or occurrence of a substantive prejudicial event, etc.) entitles Cassa Depositi e Prestiti to terminate the loan;  clause forbidding Enel or its significant subsidiaries (defined in the contract and the guarantee as subsidiaries pursuant to Article 2359 of the Italian Civil Code or consolidated companies whose turnover or total gross assets are at least 10% of consolidated turnover or consolidated gross assets) from establishing additional liens, guarantees or other encumbrances except for those expressly permitted unless Cassa Depositi e Prestiti gives it prior consent;  clauses requiring Enel to report to Cassa Depositi e Prestiti both periodically and upon the occurrence of specified events (such as a change in Enel’s credit rating, or breach in an amount above a specified threshold in respect of any financial debt contracted by Enel, Enel Distribuzione or any of their significant subsidiaries). Violation of such obligation entitles Cassa Depositi e Prestiti to exercise an acceleration clause; and  clause under which, at the end of each measurement period (every six months), Enel’s consolidated net financial debt shall not exceed 4.5 times annual consolidated EBITDA.

2009 credit agreement, €10 billion revolving credit line, €3.2 billion Term Facility Agreement covenants, and €9.44 billion forward start revolving credit facility 2013 The main covenants for the credit agreement 2009, the €10 billion revolving credit line, the €3.2 billion Term Facility Agreement, and €9.44 billion forward start facility 2013 are substantially similar and can be summarized as follows:  “negative pledge” clauses under which the borrower (and its significant subsidiaries) may not establish or maintain (with the exception of permitted guarantees) mortgages, liens or other encumbrances on all or part of its assets to secure any present or future financial liability;  “pari passu” clauses, under which the payment undertakings constitute a direct, unconditional and unsecured obligation of the borrower and bear no preferential rights among them and have at least the same seniority as other present and future loans;  “change of control” clause, which is triggered in the event (i) control of Enel is acquired by one or more parties other than the Italian State or (ii) Enel or any of its subsidiaries transfer a substantial portion of the Group’s assets to parties outside the Group such that the financial reliability of the Group is significantly compromised. The occurrence of one of the two circumstances may give rise to (a) the renegotiation of the terms and conditions of the financing or (b) compulsory early repayment of the financing by the borrower;  specification of default events, whose occurrence (e.g. failure to make payment, breach of contract, false statements, insolvency or declaration of insolvency by the borrower or its significant subsidiaries, business closure, government intervention or nationalization, administrative proceeding with potential negative impact, illegal conduct, nationalization and government expropriation or compulsory acquisition of the borrower or one of its significant subsidiaries) constitutes a default. Unless remedied within a specified period of time, such default will trigger an obligation to make immediate repayment of the loan under an acceleration clause;  under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) of the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least equal to 10% of gross consolidated revenues or total consolidated assets) constitutes a default in respect of the liabilities in question, which become immediately repayable; and  periodic reporting requirements.

The €3.2 billion Term Facility Agreement (signed by EFI and guaranteed by Enel) also contains the a gearing clause, under which, at the end of each measurement period (every six months), the Group’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA. The credit agreement 2009 also provides for the following covenants, among others:  mandatory early repayment clauses, under which the occurrence of a specified event (e.g. the issue of instruments on the capital market, new bank loans, stock issues or asset disposals) obliges the borrower to repay the related funds in advance at specific declining percentages based on the extent to which the line of credit has been drawn;  a “subsidiary financial indebtedness” clause, under which the net aggregate amount of the financial debt of Enel’s subsidiaries (with the exception of the debt of “permitted subsidiaries”) must not exceed 20% of total gross consolidated assets of the Group;  a gearing clause, under which, at the end of each measurement period (every six months), the Group’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA; and  an interest cover clause, under which, at the end of each measurement period (every six months), the ratio of annual consolidated EBITDA to net consolidated interest expense shall not be less than 4.

Covenants in respect of Endesa’s financing Endesa’s most significant long-term financial liabilities also include covenants that are typical in international practice. The most significant covenants affecting Endesa are those governing the loans granted to Endesa by the EIB, those existing under the Endesa Capital global medium-term notes program and those on project finance loans granted to Enersis and Endesa Chile. The main covenants under the loans granted by the EIB are:  covenants requiring the maintenance of credit ratings; and  covenants barring transfers of assets of Endesa without the prior approval of the EIB (to the extent the assets or the relevant gross income therefrom represent at least 7% of the total consolidated assets, or 10% of the consolidated gross income, of Endesa). Covenants relating to the bonds issued by Endesa Capital within the context of its global medium-term notes program can be summarized as follows:  “cross-default” clauses, pursuant to which a default (above a certain threshold) by Endesa and/or Endesa Capital on any financial debt, listed or to be listed in the regulated markets, would cause an acceleration of the repayment of the debt;  “negative pledge” clauses, pursuant to which the issuer may not establish mortgages, pledges or other encumbrances over all or any part of its assets, to guarantee any debt, listed or to be listed on a regulated market (but only if at least 50% of the debt is originally issued outside Spain), unless the security is equally or ratably extended to the bonds at issue; and  “pari passu” clauses, pursuant to which notes and guarantees have the same seniority as all the other unsecured unsubordinated existing and future securities issued by Endesa Capital, or Endesa. Finally, the main loans granted to Endesa, International Endesa BV and Endesa Capital do not contain cross-default clauses regarding the debt of subsidiaries in Latin America. Undertakings in respect of project financing granted to subsidiaries regarding renewables and other subsidiaries in Latin America contain covenants commonly adopted in international business practice. The main commitments regard clauses pledging all the assets assigned to the projects in favor of the creditors. Certain debt of Enersis and Endesa Chile (both controlled indirectly by Endesa) is subject to cross-default clauses under which the occurrence of a default event (failure to make payment or breach of other obligations) in respect of any financial liability of a subsidiary of Enersis or Endesa Chile constitutes a default in respect of the liability in question, which becomes immediately repayable. Many of these agreements also contain cross-acceleration clauses that are triggered by specific circumstances, certain government actions, insolvency or judicial expropriation of assets. In addition to the foregoing, a number of loans provide for early repayment in the case of a change of control of Endesa or its subsidiaries.

Capital expenditure and investments The following table sets forth the Group’s (i) capital expenditures on tangible and intangible assets, by asset-type, and (ii) net equity investments (from the cash-flow statement line-item, “investments in entities (or business units) less cash and cash equivalents acquired”) for the six months ended June 30, 2013 and for the years ended December 31, 2012, 2011 and 2010.

Six months ended June 30, 2013 2012(1) 2011(2) 2010(3)

% of % of % of % of Amount Total Amount Total Amount Total Amount Total

(€ millions)

Power Plants: Thermal ...... 236 10.0% 952 13.5% 1,272 17.0% 1,818 25.6% Hydroelectric ...... 183 7.7% 656 9.3% 516 6.9% 381 5.4% Geothermal ...... 84 3.5% 214 3.0% 113 1.5% 174 2.5% Nuclear ...... 306 13.0% 802 11.3% 878 11.7% 661 9.3% Alternative energy sources ...... 431 18.3% 911 12.9% 1,194 16.0% 729 10.3% Other:

Electricity distribution networks 890 37.7% 2,782 39.3% 2,668 35.6% 2,520 35.5% Land, buildings and other assets and equipment ...... 30 1,3% 119 1.7% 204 2.7% 92 1.3% Subtotal ...... 2,160 91.5% 6,436 91.0% 6,845 92.1% 6,375 89.9% Investment property ...... 2 0.1% 12 0.2% 7 0.1% 7 0.1% Intangible assets ...... 197 8.4% 627 8.9% 632 8.4% 708 10.0%

Total ...... 2,359 100.0% 7,075 100.0% 7,484 100.0% 7,090 100.0%

Equity investments (net of cash and cash equivalents acquired) 152 N.A 182 N.A. 153 N.A. 282 N.A.

(1) The figures for 2012 do not include €74 million regarding units classified as “Held for sale.” (2) The figures for 2011 do not include €105 million regarding units classified as “Held for sale.” (3) The figures for 2010 do not include €97 million regarding units classified as “Held for sale.”

The following table sets forth the Group’s capital expenditures on tangible and intangible assets by business segment for the six months ended June 30, 2013 and the years ended December 31, 2012 and 2011. Amounts have been reclassified to reflect the current organizational structure of the Group.

Six months ended June 30, 2013 2012 2011

Percentage Percentage Percentage Capital of Total Capital of Total Capital of Total Expenditure Capex Expenditure Capex Expenditure Capex

(€ millions) Capital expenditures on tangible and intangible

assets: Sales ...... 24 1.0% 97 1.4% 90 1.2% Generation and Energy Management ...... 96 4.1% 403 5.7% 431 5.8% Infrastructure and Networks . 483 20.5% 1,497 21.2% 1,383 18.5% Iberia and Latin America(1) .... 803 34.0% 2,497 35.3% 2,491 33.3% International(2) ...... 376 15.9% 1,161 16.4% 1,450 19.4% Renewable Energy ...... 552 23.4% 1,257 17.8% 1,557 20.8% Other, eliminations and adjustments(3) ...... 25 1.1% 163 2.3% 82 1.1%

Total ...... 2,359 100.0% 7,075 100.0% 7,484 100.0%

(1) The figure for 2012 does not include €73 million regarding units classified as “Held for sale” (€43 million as of June 30, 2012, €101 million as of December 31, 2011). (2) The figure for 2011 does not include €4 million regarding units classified as “Held for sale.” (3) The figure for 2012 does not include €1 million regarding units classified as “Held for sale.” Capital expenditure on tangible and intangible assets Capital expenditures on power plants amounted to €3,535 million in 2012, €3,973 million in 2011 and €3,763 million in 2010. The main investments were made in respect of conventional thermal plants, nuclear power plants by the Latin America and International divisions and plants using alternative energy resources of the Renewable Energy division. In the three years under consideration, the principal investments were those relating the construction of the coal-fired Bocamina II plant and the El Quimbo hydroelectric plant in Colombia, generation plants in Russia and the nuclear segment in Slovakia, wind plants in Italy and Europe, Iberia and Latin America and North America solar thermal plants in Greece, photovoltaic plants in Italy, hydroelectric plants in Italy, Guatemala, Costa Rica and North America and geothermal plants in Italy and North America. The Group’s investments in electricity distribution networks amounted to €2,782 million in 2012, €2,668 million in 2011 and €2,520 million in 2010. These investments related principally to “client requests” (for medium-and low-voltage connections), “quality improvements” (with the aim of reducing both the duration and the number of service interruptions, as required by the Authority) and “technology innovation” to achieve higher operating efficiency.

Capital expenditure for the six months ended June 30, 2013 amounted to €2,359 million, a decrease of 14.6%. This change, common to nearly all the divisions, reflects the investment optimization policy adopted by the Group. Equity investments Equity investments, net of cash and cash equivalents acquired in acquisitions, amounted to €152 million in the six months ended June 30, 2013, €182 million in 2012, €153 million in 2011 and €282 million in 2010. The investments for the six months ended June 30, 2013, net of cash and cash equivalents acquired, were mainly due to the acquisition of 100% of the Chilean company Parque Eolico Talinay Oriente by the Renewable Energy division and to the acquisition of an additional 26% interest in each of the Chisholm View Wind Project and the Prairie Rose Wind Farm. The investments in 2012, net of cash and cash equivalents acquired, were mainly due to the acquisition of 100% of Stipa Nayaa (€120 million), a Mexican company operating in the wind generation sector, as well as other minor acquisitions and advances paid for future acquisitions. The investments in 2011, net of cash and cash equivalents acquired, included the acquisition of additional interests in Ampla Energia e Serviços (€85 million), a Brazilian company already controlled by the Group, and additional interests in Sociedad Eólica de Andalucía and Sociedade Térmica Portuguesa (€48 million) that led to the acquisition of full control of those companies. The investments in 2010, net of cash and cash equivalents acquired, reflected the acquisition of a number of companies operating in the generation of electricity from renewable resources in Italy, the acquisition of Enel Longanesi Development, which operates in the natural gas extraction sector in Italy, the acquisition of Padoma Wind Power, which is specialized in the development of wind plants in California, and a number of smaller acquisitions. Quantitative and qualitative disclosures about market risk Interest rate risk Interest rate risk management is aimed at balancing the structure of debt, reducing the amount of debt exposed to interest rate fluctuations and minimizing borrowing costs over time, limiting the volatility of results. In order to accomplish these goals, the Group uses a variety of derivative instruments, notably interest rate swaps and interest rate options, as is reported in the table below:

As of December 31,

2012 2011

(notional value, € millions) Interest rate swaps ...... 8,294 12,984 Interest rate options ...... 50 2,700

Total ...... 8,344 15,684

Interest rate swaps are used to reduce the amount of debt exposed to changes in interest rates and to reduce the volatility of borrowing costs. In an interest rate swap, Enel enters into an agreement with a counterparty to exchange at specified intervals floating-rate interest flows for fixed-rate interest flows (agreed between the parties), both of which are calculated on the basis of a notional principal amount. Interest rate options are used to reduce the impact of potential increases in interest rates on floating-rate debt. Such contracts are normally used when the fixed interest rate that can be obtained in an interest rate swap is considered too high with respect to Enel’s expectations for future interest rate developments. In addition, interest rate options are also considered appropriate in periods of uncertainty regarding future interest rate developments (in order to potentially benefit from any decreases in interest rates). In such cases, Enel normally uses zero-cost collars, which do not require the payment of a premium. Each such contract is agreed with a notional amount and an expiry date within the range of, or equal to, those of the underlying financial liability, so that any change in the fair value and/or expected future cash flows is offset by a corresponding change in the fair value and/or the expected future cash flows of the underlying position. The fair value of financial derivatives generally reflects the estimated amount that Enel would have to pay, or would receive, in order to terminate the contracts at the particular balance-sheet date. The following table reports the notional values and fair values of the Group’s derivative contracts relating to interest rates as of December 31, 2012 and 2011.

Fair Value – Fair Value – Notional Amount Fair Value Assets Liabilities

2012 2011 2012 2011 2012 2011 2012 2011

(€ millions)

Cash-flow hedge derivatives: Interest rate swaps ...... 6,433 10,007 (686) (613) 5 6 (691) (619) Interest rate options ...... — 1,000 — (8) — — — (8)

Fair-value hedge derivatives: Interest rate swaps ...... 83 83 17 14 17 14 — —

Trading derivatives: Interest rate swaps ...... 1,778 2,894 (110) (122) 4 6 (114) (128) Interest rate options ...... 50 1,700 (7) (13) — — (7) (13)

Total interest rate swaps ...... 8,294 12,984 (779) (721) 26 26 (805) (747)

Total interest rate options ...... 50 2,700 (7) (21) — — (7) (21)

Total interest rate derivatives ...... 8,344 15,684 (786) (742) 26 26 (812) (768)

The following table reports the Group’s expected cash flows from financial derivatives on interest rates, on the basis of their fair value as of December 31, 2012.

Expected Cash Flows Fair Value as of December 31, 2012 2013 2014 2015 2016 2017 Beyond

(€ millions)

Cash-flow hedges on interest rates Positive fair value ...... 5 — (5) — — — — Negative fair value ...... (691) (198) (177) (108) (63) (47) (185)

Fair-value hedges on interest rates Positive fair value ...... 17 3 3 3 3 1 5 Negative fair value ...... — — — — — — —

Trading derivatives on interest rates Positive fair value ...... 4 3 2 1 — — — Negative fair value ...... (121) (51) (20) (8) (7) (6) (52) The amount of floating-rate debt that is not hedged against interest rate risk is the main risk factor that could impact the income statement (raising borrowing costs) in the event of an increase in market interest rates.

As of June 30, 2013, 24% of net financial debt was floating rate (17% as of December 31, 2012 and 31% at December 31, 2011). Taking into account cash flow hedges of interest rates considered effective pursuant to the IFRS–EU, 10% of the debt 90 was exposed to interest rate risk at June 30, 2013 (3% as of December 31, 2012 and 9% as of December 31, 2011). Including interest rate derivatives treated as hedges for management purposes but ineligible for hedge accounting, the residual exposure would be 8% (1% as of December 31, 2012 and 4% as of December 31, 2011).

If interest rates had been 25 basis points higher at June 30, 2013, all other variables being equal, shareholders’ equity would have been €50 million higher (€79 million as December 31, 2012 and €68.3 million as of December 31, 2011) as a result of the increase in the fair value of CFH derivatives on interest rates. Conversely, if interest rates had been 25 basis points lower at that date, all other variables being equal, shareholders’ equity would have been €50 million lower (€79 million as of December 31, 2012 and €68.3 million as of December 31, 2011) as a result of the decrease in the fair value of CFH derivatives on interest rates.

An equivalent increase (decrease) in interest rates, all other variables being equal, would have a negative (positive) impact on the income statement in terms of higher (lower) annual interest expense on the portion of debt not hedged against interest rate risk of about €0.4 million (€1 million at December 31, 2012).

Exchange rate risk Exchange rate risk is mainly generated as a result of the following types of transactions:  the incurrence of debt by the Parent or a subsidiary that is denominated in a currency other than the functional currency of its respective home country;  the purchase or sale of fuel or electricity on international markets; and  investments in foreign currency, dividends from unconsolidated foreign affiliates and purchases or sales of equity investments. In order to reduce the exchange rate risk from these and other exposures, the Group uses foreign exchange forward and option contracts in order to hedge cash flows in currencies other than the functional currencies of the various Group entities. Enel also uses cross-currency interest rate swaps (normally with long terms) to stabilize cash flows on bonds paying interest in foreign currencies. The “buy” and “sell” amounts in such contracts are notional values. Foreign exchange options, which are traded on unregulated markets, give Enel the right or the obligation to acquire or sell specified amounts of foreign currency at a specified exchange rate at the end of a given period of time, normally not exceeding one year. The Group also seeks to balance inward and outward cash flows in respect of assets and liabilities denominated in foreign currency. As of December 31, 2012, Enel had outstanding forwards, options and cross-currency interest rate swaps (“CCIRSs”) with a total notional value of €21,923 million (as compared to €23,388 million as of December 31, 2011). The following table sets forth the Group’s CCIRSs as of December 31, 2012 and 2011.

As of December 31,

2012 2011

(notional value, € millions) Cross currency interest rate swaps (CCIRSs) hedging debt denominated in currencies other than the Euro ...... 13,892 14,442 Currency forwards hedging exchange rate risk on commodities ...... 6,250 7,273 Currency forwards hedging future cash flows in currencies other than Euro ...... 1,348 1,232 Currency swaps hedging commercial paper ...... 232 240 Currency forwards hedging credit lines ...... 201 201

Total ...... 21,923 23,388

More specifically, these included:  CCIRSs with a notional value of €13,892 million to hedge the exchange rate risk on foreign currency debt (as compared to a notional value of €14,442 million as of December 31, 2011);  currency forwards with a total notional amount of €7,598 million used to hedge the exchange rate risk associated with purchases of fuel, imported electricity and expected cash flows in currencies other than the Euro (€8,505 million as of December 31, 2011); currency swaps with a total notional amount of €232 million used to hedge the exchange rate risk associated with redemptions of commercial paper issued in currencies other than the Euro (€240 million as of December 31, 2011); and  currency forwards with a total notional amount of €201 million used to hedge the exchange rate risk associated with credit lines in currencies other than the Euro (€201 million as of December 31, 2011). 91

The above-described contracts are normally agreed with notional amounts and expiry dates equal to those of the underlying financial liabilities or the expected future cash flows, so that any change in the fair value and/or expected future cash flows of these contracts stemming from potential appreciation or depreciation of the domestic currency against other currencies is fully offset by a corresponding change in the fair value and/or the expected future cash flows of the underlying positions. The following table sets forth the notional values and fair values of the Group’s derivative contracts relating to exchange rates as of December 31, 2012 and 2011.

Fair Value – Fair Value – Notional Amount Fair Value Assets Liabilities

2012 2011 2012 2011 2012 2011 2012 2011

(€ millions)

Cash-flow hedge derivatives: Forwards ...... 3,458 3,751 (83) 297 4 304 (87) (7) CCIRSs ...... 13,631 13,985 (847) (347) 927 1,297 (1,774) (1,644)

Fair-value hedge derivatives: CCIRSs ...... 261 457 18 18 23 30 (5) (12)

Trading derivatives: Forwards ...... 4,573 5,195 35 18 74 153 (39) (135)

Total forwards ...... 8,031 8,946 (48) 315 78 457 (126) (142)

Total CCIRSs ...... 13,892 14,442 (829) (329) 950 1,327 (1,779) (1,656)

Total exchange rate derivatives ..... 21,923 23,388 (877) (14) 1,028 1,784 (1,905) (1,798)

The following table sets forth the Group’s expected cash flows from financial derivatives on exchange rates, on the basis of their fair value as of December 31, 2012.

Fair Value Expected Cash Flows as of Dec. 31, 2012 2013 2014 2015 2016 2017 Beyond

(€ millions)

Cash-flow hedges on exchange rates Positive fair value ...... 931 140 235 90 (32) 137 773 Negative fair value ...... (1,861) (183) (286) (360) (208) (67) (340)

Fair-value hedges on exchange rates Positive fair value ...... 23 11 5 12 (3) 2 (2) Negative fair value ...... (5) — 1 1 1 1 1

Trading derivatives on exchange rates Positive fair value ...... 74 71 3 — — — — Negative fair value ...... (39) (46) (1) — — — —

An analysis of the Group’s financial debt shows that as of June 30, 2013 28% of long-term gross debt (29% as of December 31, 2012 and 30% as of December 31, 2011) is denominated in currencies other than the Euro.

Taking account of exchange rate hedges and the portion of debt denominated in the functional currency of the country in which the Group company holding the debt position operates, the proportion of unhedged debt decreases to about 0.2% (1% as of December 31, 2012 and 4% as of December 31, 2011), a proportion would not have a significant impact on the income statement in the event of a change in market exchange rates. At June 30, 2013, assuming a 10% appreciation of the Euro against the U.S. Dollar, all other variables being equal, shareholders’ equity would have been €1,475 million lower (€1,689 million as of December 31, 2012 and €1,650 million as of December 31, 2011) as a result of the decrease in the fair value of CFH derivatives on exchange rates. Conversely, assuming a 10% depreciation of the Euro against the U.S. Dollar, all other variables being equal, shareholders’ equity would have been €1,803 million higher (€2,064 million as of December 31, 2012 and €2,028 million as of December 31, 2011) as a result of the increase in the fair value of CFH derivatives on exchange rates.

Commodity price risk Various types of derivatives are used to reduce exposures to fluctuations in energy commodity prices and as part of the Group’s proprietary trading activities. The Group’s exposures to changes in commodity prices are associated with the purchase of fuel for power plants and the purchase and sale of gas under indexed contracts as well as the purchase and sale of electricity at variable prices (indexed bilateral contracts and sales on the Power Exchange). The exposures on indexed contracts are quantified by breaking down the contracts that generate exposures into the underlying risk factors. As regards electricity sold on the Power Exchange, Enel uses two-way contracts for differences, under which differences are paid to the counterparty if the single national price exceeds the strike price (and are paid to Enel in the opposite case). The residual exposure in respect of sales on the Power Exchange not hedged through two-way contracts for differences is quantified and managed on the basis of an estimation of generation costs in Italy. The residual positions thus determined are aggregated on the basis of uniform risk factors that can be hedged in the market.

The following table sets forth the notional values and fair values of the Group’s derivative contracts relating to commodities as of December 31, 2012 and 2011.

Fair Value – Fair Value – Notional Amount Fair Value Assets Liabilities

2012 2011 2012 2011 2012 2011 2012 2011

(€ millions)

Cash-flow hedge derivatives: Derivatives on energy ...... 1,847 1,753 19 (54) 23 18 (4) (72) Derivatives on coal ...... 1,507 880 (141) (62) — — (141) (62) Derivatives on gas ...... 585 584 (5) (10) — 1 (5) (11)

Trading derivatives: Derivatives on energy ...... 13,371 18,956 66 40 84 81 (18) (41) Swaps on oil commodities ...... 3,380 8,488 (66) (27) 1,346 1,847 (1,412) (1,874) Futures/options on oil commodities .. 4,661 1,450 5 (7) 80 30 (75) (37) Derivatives on coal ...... 1,724 332 (3) (2) 84 20 (87) (22) Embedded derivatives ...... 126 268 (122) (267) — — (122) (267)

Total Commodity Derivatives 27,201 32,711 (247) (389) 1,617 1,997 (1,864) (2,386)

Cash-flow hedge derivatives refer to the physical positions in the underlying commodity and, therefore, any negative change in the cash flows of the derivative instrument corresponds to a positive change in the cash flows of the underlying physical commodity (and vice versa), so the impact on the income statement is equal to zero. The following table sets forth the impact that a hypothetical 10% increase or decrease in the price of underlying physical commodities would have had on the fair value of the related cash flow hedges as of December 31, 2012 (gross of taxes).

As of December 31, 2012

-10% Fair Value +10%

(€ millions) Fair value of derivatives on coal in cash flow hedges ...... (227) (141) 11 Fair value of derivatives on energy in cash flow hedges ...... 107 19 (70) Fair value of derivatives on gas in cash flow hedges ...... (35) (5) 26 The following table sets forth the impact that a hypothetical 10% increase or decrease in the price of underlying physical commodities would have had on the fair value of the related trading transactions as of December 31, 2012 (gross of taxes).

As of December 31, 2012

-10% Fair Value +10%

(€ millions) Fair value of derivatives on oil commodities in trading transactions...... (88) (61) (33) Fair value of derivatives on energy in trading transactions ...... 42 66 172 Fair value of derivatives on coal in trading transactions ...... (31) (3) (38) 93

Embedded derivatives relate to contracts for the purchase and sale of energy entered into by Slovenské elektrárne in Slovakia. The market value as of December 31, 2012 came to negative €122 million, of which €74 million related to an embedded derivative on the Slovak Koruna to U.S. dollar exchange rate and €48 million related to an embedded derivative on the price of gas.

The following table sets forth the fair value of the embedded Slovak Koruna to U.S. dollar derivative, as well as the impact that a hypothetical 10% increase or decrease in the underlying exchange rate would have had on the embedded derivative, as of December 31, 2012.

As of December 31, 2012

-10% Fair Value +10%

(€ millions) Fair value of embedded derivative depending on the Slovak Koruna to U.S. dollar exchange rate ...... (79) (74) (69) Fair value of embedded derivative depending on the price of gas ...... (48) (48) (48) The following table reports the Group’s expected cash flows from financial derivatives on commodities.

Fair Value Expected Cash Flows As of Dec. 31, 2012 2013 2014 2015 2016 2017 Beyond

(€ millions)

Cash-flow hedges on commodities Positive fair value ...... 23 15 2 2 2 2 — Negative fair value ...... (150) (134) (16) — — — —

Trading derivatives on commodities Positive fair value ...... 1,594 1,443 131 7 6 7 — Negative fair value ...... (1,714) (1,591) (111) (4) (4) (4) —

Credit risk As part of the sale and distribution of electricity and gas to eligible customers, the selection of counterparties is monitored through the assessment of the related credit risk and the request for suitable guarantees and/or security deposits to ensure adequate protection from counterparty default risk. Open positions in financial derivatives are entered into with leading Italian and international financial institutions, diversifying the exposure among different institutions and constantly monitoring their credit ratings. In addition, Enel entered into margin agreements with the leading financial institutions with which it operates that call for the exchange of cash collateral, which significantly mitigates the exposure to counterparty risk. As regards the credit risk associated with the solvency of counterparties in commodities transactions, the Group uses a centralized assessment system that enhances the monitoring and governance of the risk. To manage credit risk even more effectively, for a number of years the Group has carried out non-recourse assignments of receivables, in particular specific segments of the commercial portfolio. More specifically, in 2011 a five-year framework agreement was reached with two leading banks for the ongoing non-recourse assignment of invoiced receivables and receivables to be invoiced in respect of customers in the enhanced protection market in Italy. In 2012, partly in view of the macroeconomic environment, the use of assignments was extended both geographically and to invoiced receivables and receivables to be invoiced of companies operating in other segments of the electricity industry than retail sales (such as, for example, receivables from generation activities, sales of electricity as part of energy management operations, the sale of green certificates or electricity transport services). All of the above transactions are considered as non-recourse transactions for accounting purposes and therefore involved the full derecognition of the corresponding assigned assets from the balance sheet, as the risks and rewards associated with them have been transferred.

Liquidity risk Within the Group, Enel (directly and through its subsidiary EFI) manages the centralized Treasury function, ensuring access to the money and capital markets. Enel meets liquidity requirements primarily through cash flows generated by ordinary operations and drawing on a range of sources of financing. In addition, it manages any excess liquidity as appropriate.

Off-balance sheet arrangements The Group does not engage in the use of special purpose entities for off-balance sheet financing or any other purpose that may result in material assets or liabilities not being reflected in the Group’s consolidated financial statements. The Group does use certain off-balance sheet arrangements with unconsolidated third parties in the ordinary course of business, including indemnification agreements, financial guarantees, the sale of receivables and other arrangements under which the Group have or may have continuing obligations. See Note 26 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements and Note 2 to the 2012 Audited Consolidated Financial Statements. The commitments entered into by the Group and the guarantees given to third parties are shown below.

As of As of As of June 30, Dec. 31, Dec. 31, 2013 2012 Change 2011 Change

(€ millions)

Guarantees given: – sureties and other guarantees granted to third parties .... 6,112 5,586 543 4,766 820

Commitments to suppliers for: – electricity purchases ...... 45,994 50,634 (380) 54,708 (4,074) – fuel purchases ...... 56,923 62,576 (2,374) 69,008 (6,432) – various supplies ...... 2,239 2,120 44 3,153 (1,033) – tenders ...... 2,504 1,922 415 1,936 (14) – other ...... 2,180 2,315 (22) 2,458 (143)

Total ...... 109,840 119,567 (2,317) 131,263 (11,696)

TOTAL ...... 115,952 125,153 (1,774) 136,029 (10,876)

Commitments for electricity amounted to €45,994 million at June 30, 2013, of which €22,264 million refer to the period July 1, 2013-2017, €9,486 million to the period 2018 through 2022, €4,901 million to the period 2023 through 2027 and the remaining €9,343 million beyond 2027. Commitments for electricity amounted to €50,634 million at December 31, 2012, of which €22,486 million refer to the period 2013 through 2017, €9,915 million to the period 2018 through 2022, €6,896 million to the period 2023 through 2027 and the remaining €11,337 million beyond 2027.

Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set in foreign currencies). The total at June 30, 2013 was €56,923 million, of which €29,885 million refer to the period July 1, 2013 through 2017, €21,248 million to the period 2018 through 2022, €4,230 million to the period 2023-2027 and the remaining €1,560 million beyond 2027. The total at December 31, 2012 was €62,576 million, of which €34,976 million refer to the period 2013 through 2017, €21,136 million to the period 2018 through 2022, €4,685 million to the period 2023 through 2027 and the remaining €1,779 million beyond 2027.

BUSINESS DESCRIPTION

Overview The Issuer was incorporated under the laws of Italy as a joint stock company (società per azioni) on July 24, 1992. Its registered office is at Viale Regina Margherita 137, in Rome, and its main telephone number is +3906 83051. The Issuer is registered with the Italian Companies’ Register of the Chamber of Commerce of Rome under registration No. 00811720580. Pursuant to Article 3 of the Issuer’s articles of association, the Issuer shall remain in existence until December 31, 2100; however the Issuer’s corporate duration may be further extended by a shareholder resolution. The Issuer is the parent company of the Group. According to Enel’s estimates, the Group is the leading electricity operator in both Italy and Spain and one of the leading global operators in the fields of generation, distribution and sales of electricity. Moreover, according to Enel’s estimates, it is the largest Italian power company and Europe’s second largest listed utility by installed capacity. Enel has a presence in 40 countries on four continents with nearly 98 GW of net installed capacity and sells electricity and gas to approximately 60.5 million customers as of December 31, 2012. The Group had operational generation plants (thermal, hydroelectric, geothermal, nuclear and other plants) with a total net maximum electrical capacity of 97.8 GW as of December 31, 2012 and 97.3 GW as of December 31, 2011 and December 31, 2010, respectively. For the six months ended June 30, 2013, net electricity production was 138.2 TWh and distribution of electricity was 198.8 TWh. For the year ended December 31, 2012, net electricity production amounted to 295.8 TWh and distribution of electricity amounted to 413.9 TWh. For the year ended December 31, 2011, net electricity production amounted to 293.9 TWh and distribution of electricity amounted to 419.5 TWh. For the year ended December 31, 2010, net electricity production amounted to 290.2 TWh and distribution of electricity amounted to 431.6 TWh. The following table sets forth the Group’s key operating data as of and for the six months ended June 30, 2013 and as of and for the years ended December 31, 2012, 2011 and 2010.

Year ended December 31, Six months ended June 30, 2013 2012 2011 2010

Italy Abroad Total Italy Abroad Total Italy Abroad Total Italy Abroad Total

Net electricit y productio n (TWh) .. 36.0 102.2 138.2 74.5 221.3 295.8 79.0 214.9 293.9 81.6 208.6 290.2 Net maximu m electrical capacity (GW) ...... N/A N/A N/A 39.9 57.9 97.8 39.9 57.4 97.3 40.5 56.8 97.3 Electricity conveyed through the grid (TWh) ..... 113.3 85.5 198.8 238.2 175.7 413.9 246.4 173.1 419.5 247.0 184.6 431.6 Electricity sold (TWh)(1) .. 45.8 100.6 146.4 102.3 214.5 316.8 104.2 207.6 311.8 113.4 195.6 309.0 Number of end-users of the electric business (millions ) ...... 28.1 27.8 55.9 28.0 28.1 56.1 28.9 27.9 56.8 31.5 27.7 59.2

Note: (1) Excluding sales to resellers.

The Group also imports and sells natural gas in Italy, Spain and elsewhere. The Group sold approximately 4.9 billion cubic meters of gas worldwide in the six months ended June 30, 2013, 8.7 billion cubic meters of gas worldwide in 2012, 8.5 billion cubic meters of gas worldwide in 2011 and 8.9 billion cubic meters of gas worldwide in 2010. In the six months ended June 30, 2013, the Group’s total revenues were €40,157 million, and the net income attributable to shareholders of Enel was €1,680 million. In 2012, the Group’s total revenues were €84,889 million and the net income attributable to shareholders of Enel was €865 million, including the effect of a write-down of goodwill of €2,575 million mainly related to Endesa’s activities in Iberia. In 2011, the Group’s total revenues were €79,514 million, and the net income attributable to shareholders of Enel was €4,113 million. In 2010, the Group’s total revenues were €73,377 million, and the net income attributable to shareholders of Enel was €4,390 million. As of June 30, 2013, the Group employed 73,537 employees, of which 36,246 were employed in Italy and 37,291 were employed abroad. History and development of Enel Enel traces its origins to the creation in 1962 of the Italian governmental entity, the Ente Nazionale per l’Energia Elettrica, which was granted an exclusive concession to carry out the activities of generation, import, export, transportation, transformation, distribution and sale of electricity in Italy following the nationalization of the industry in that year. Controlled by the Italian government, the Ente Nazionale per l’Energia Elettrica implemented a process of development and diversification of energy sources through the creation of new nuclear, hydroelectric and renewable-energy power plants. Law No. 9 of January 1991 set the framework for the opening of the Italian electricity market to competition. As part of the this move towards liberalization, the Ente Nazionale per l’Energia Elettrica was, pursuant to Legislative Decree No. 333 of July 11, 1992 (as ratified into law pursuant to Law No. 359 of August 8, 1992), converted into a joint stock company. Pursuant to a resolution adopted at the extraordinary shareholders’ meeting held on August 7, 1992, the Issuer’s name was changed to Enel S.p.A. The aforementioned legislative decree granted Enel licenses to undertake all the activities previously carried out by the Ente Nazionale per l’Energia Elettrica. Initially, the sole shareholder of Enel was the MEF. Legislative Decree No. 79 of March 16, 1999 (Attuazione della direttiva 96/92/CE recante norme e comuni per il mercato interno dell’energia elettrica) (the “Bersani Decree”) established new rules for the electricity market, providing for further liberalization — in compliance with public policy — of the activities of generation, import, export, purchase and sale of electricity. Pursuant to the Bersani Decree, a single entity may engage in any or all of these activities, provided that utility companies are separated into distinct units for accounting and management purposes. With reference to Enel, the Bersani Decree required the separation, for accounting and management purposes, of the activities of production, transmission, distribution and sales to Non-Eligible clients, and the obligation to reduce Enel’s production capacity through the disposal of at least 15 GW by 2002. In particular, the Bersani Decree required the following significant changes to be made to the Group’s business:  the separation of significant businesses into separate subsidiaries (effective as of October 1999);  the transfer of management and control of the Italian national electricity transmission grid and electricity dispatching to the Electricity Services Operator, a company wholly owned by the MEF, and the subsequent sale of 94.88 percent of Enel’s formerly wholly owned subsidiary, Terna S.p.A., which owns the majority of Italy’s electricity transmission grid (as a result of this sale, Terna S.p.A. was deconsolidated on September 15, 2005); and  the sale of three electricity generation companies (accounting for approximately 15 GW of the Group’s generating capacity) and several municipal distribution companies.

In November 1999, the process for the privatization of Enel began with an initial public offering of approximately 32 percent of Enel’s share capital, as part of which Enel’s shares were listed on the MTA and on the New York Stock Exchange (in the form of American Depositary Shares). The initial public offering was followed by a number of private placements to institutional investors in Italy and abroad (in 2003) and public offerings to retail investors in Italy and to institutional investors in Italy and abroad. As a result of Japanese offerings (in 2004 and 2005), Enel’s shares were also registered at the Kanto Local Finance Bureau in Tokyo. In December 2007, Enel voluntarily de-listed from the New York Stock Exchange, and in March 2008 the process of deregistration of the Enel shares and American Depositary Receipts with the U.S. Securities and Exchange Commission was completed. Restructuring of the Group and business diversification Following the liberalization of the energy market and the consequent reductions to parts of Enel’s core business, the Group focused its strategy on the diversification of its business and expansion into new markets (including in the 97 telecommunications industry market in which Enel operated until 2006). Enel became an industrial holding company, and its divisions were transformed into utility companies focused on specific business sectors. Enel Produzione S.p.A. and Enel Distribuzione S.p.A. were established, along with other companies. Along with pursuing the separation for management purposes of the activities of production, transmission and distribution, new business areas were created, such as energy trading, construction of generation plants and supply of environmental services. Internationalization and focus on energy businesses — most significant transactions Following the process of business reorganization pursuant to the Bersani Decree described above, the Issuer changed course and initiated a new strategy, again focusing on its core energy businesses (electricity and gas). From 2002, the Group began to expand its electricity business abroad through several acquisitions and joint ventures in, inter alia, electricity generation and distribution operators and power producers specializing in renewable resources in Europe and in the Americas. A summary of Enel’s most significant acquisitions and joint ventures is described below:  In February 2005, Enel signed an agreement, effective in 2006, for the acquisition of a 66 percent stake in Slovenské elektrárne, the largest generating company in Slovakia.  In April 2005, Enel acquired a 51.003 percent stake in the Romanian companies F.D.F.E.E Electrica Banat S.A. (now Enel Distributie Banat S.A.) (“Enel Distributie Banat”), the company owning and managing the electric distribution network and providing electricity supplies in the Banat area (Timis, Arad, Hunedoara and Caras-Severin counties), and F.D.F.E.E Electrica Dobrogea S.A. (now Enel Distributie Dobrogea S.A.) (“Enel Distributie Dobrogea”), the company owning and managing the electricity distribution network and providing electricity supplies in the Dobrogea area (Constanta, Tulcea, Ialomita and Calarasi counties), from state owned company Electrica S.A. In accordance with a regulation on corporate unbundling of the supply and distribution activities, the above mentioned companies were demerged and the supply activity was transferred to the newly incorporated Enel Energie S.A.  In 2006, Enel finalized the acquisition of 49.5 percent of the Russian trading company RusEnergoSbyt.  In April 2007, Enel and its Spanish partner Acciona S.A. launched a joint tender offer for 100 percent of the share capital of Endesa, the leading electricity operator in Spain. After the conclusion and settlement of the successful tender offer in 2007, Enel held 67.05 percent of Endesa. As of the date of this Offering Circular, Enel’s stake in Endesa is 92.06 percent. For further details, see “— Iberia and Latin America division — Acquisition of Endesa” below.

 In 2008, following the tender offer launched by Enel through its subsidiary EIH, the latter acquired a 59.80 percent stake in the share capital of OGK-5, one of the Russian thermal generation companies. As a result of subsequent disposals, as well as small purchases of shares from company management, EIH’s stake in OGK-5 as of the date of this Offering Circular is equal to approximately 56.36 percent. In May 2008, EIH entered into a shareholders’ agreement with the European Bank for Reconstruction and Development which granted to the latter the right to designate one member of the board of directors of Enel OGK-5 and obliges EIH to retain a majority interest in the company for so long as the European Bank for Reconstruction and Development remains a shareholder. However, the agreement does not grant any put or call rights to the bank.  In April 2008, Enel purchased a 50 percent stake in F.D.F.E.E. Electrica Muntenia Sud S.A., the company owning and managing the electric distribution network in the Muntenia Sud area (Bucharest and Giurgiu and Ilfov counties), from Electrica. At the same time, the shareholders of Electrica Muntenia Sud S.A. approved a capital increase that was subscribed by Enel in the amount of €425 million. As a result of these transactions, Enel’s stake rose to 64.425 percent In accordance with a regulation on corporate unbundling of the supply and distribution activities Electrica Muntenia Sud S.A. was split into two separate companies, Enel Energie Muntenia S. A. and Enel Distributie Muntenia S.A.  In August 2008, EIH acquired a ten percent stake in Bayan for around €139 million in the initial public offering of the company on the Indonesian Stock Exchange. Bayan is one of the largest coal-producing groups in Indonesia in terms of output, with integrated mining, processing and logistics operations. Enel Trade S.p.A. (“Enel Trade”) also executed a ten-year supply agreement with Bayan providing for the latter to supply a specified amount of coal starting from December 2010, with the possibility of an extension for a further five years.  In October 2008, Enel Produzione and Società Elettrica Altoatesina S.p.A. (“SEL”), a company controlled by the autonomous province of Bolzano, signed a preliminary agreement for the development of the hydroelectric power sector in the province. Under this agreement, Enel Produzione and SEL formed a company for the joint operation of their respective concessions. Enel Produzione contributed to the joint venture company the business unit associated with its major hydroelectric dams in the autonomous province of Bolzano, while, on January 1, 2011, the parties

contributed the further concessions obtained by each independently. Following these contributions, the holdings of Enel Produzione and SEL in the new company remain at 40 percent and 60 percent, respectively.  In October 2008, Eni S.p.A., Enel and Gazprom further developed their existing partnership. More specifically, the parties signed agreements for the development of SeverEnergia and its subsidiaries, as well as an agreement committing Gazprom to take a stake in SeverEnergia, as envisaged in an earlier (2007) agreement. This commitment was executed on June 5, 2009, when Enel and Eni S.p.A. signed an agreement with Gazprom for the sale to the latter of a 51 percent stake in the share capital of SeverEnergia, the company holding the entire share capital of Arctic Gas, Urengoil and Neftegastechnologia, which in turn hold hydrocarbon exploration and production licenses covering oil and gas reserves estimated at five billion barrels of oil equivalent. The transaction was completed in September 2009, and therefore Enel’s indirect interest in SeverEnergia was reduced from 40 percent to 19.6 percent while Eni S.p.A.’s interest decreased from 60 percent to 29.4 percent SeverEnergia become the first Russian-Italian company actively operating in the Yamal Nenets autonomous region in Western Siberia. The region currently produces approximately 90 percent of Russian gas. The parties agreed to cooperate on the renewal and updating of licenses as well as on setting the details of the fields’ development plan. In November 2010, Gazprom sold its share to the Yamal Development consortium.  In January 2009, Endesa completed the acquisition of 100 percent of the share capital of KJWB Ltd (now Endesa Ireland), a subsidiary of Ireland’s state electricity company. The assets have a total capacity of 1,068 MW at four operational plants and account for about 12 percent of Ireland’s total installed capacity. On June 14, 2012, an agreement was reached in relation to the disposal of Endesa Generación and Endesa of their 99.98 percent 0.02 percent interests, respectively, in Endesa Ireland to Scottish and Southern Energy. Pursuant to such agreement, on October 9, 2012, Scottish and Southern Energy purchased the entire issued share capital of Endesa Ireland. The total acquisition price for the 100 percent stake in Endesa Ireland aggregated to €286 million, with an enterprise value for the entire share capital of Endesa Ireland, including the company’s net financial position at closing, of approximately €360 million. The transaction, which was completed following the issuance of all the necessary authorizations by the competent authorities, is part of the disposal plan announced by Enel to investors. The disposal had a positive impact on the consolidated net debt of the Group of around €360 million.  In February 2009, within the framework of the Italy-France Protocol of Understanding for Energy Cooperation, Enel and Electricité de France S.A. (“EdF”) signed a memorandum of understanding that establishes the foundations for the joint development of nuclear energy in Italy by the two companies. The goal is for the first Italian unit to enter commercial service no later than 2020. Following the approval on July 9, 2009 by the Italian Parliament of a law named “Disposizioni per lo sviluppo e l’internazionalizzazione delle imprese, nonchè in materia di energia” aimed at allowing the development of new nuclear power plants in Italy, in July 2009, Enel and EdF entered into a joint venture agreement for the development of feasibility studies for the construction of the EPR units. The agreement provides for the creation of the joint venture company, Sviluppo Nucleare Italia, which was duly incorporated on July 31, 2009, and sets the two parties’ commitments as well as the corporate governance rules. Enel and EdF each hold a 50 percent stake in the joint venture. Subsequently, the provisions allowing the development of new nuclear plants have been repealed through a “referendum” that took place in June 2011, following the Fukushima nuclear disaster. In light of the new scenario, Enel and EdF agreed to terminate all the agreements in place for the development of new nuclear plants in Italy and, as a consequence, on December 1, 2011, EdF sold its stake in Sviluppo Nucleare Italia to Enel Ingegneria e Innovazione S.p.A.  In September 2009, Enel Distribuzione S.p.A. sold 80 percent of the share capital of Enel Rete Gas to F2i reti Italia S.r.l., F2i and Finavias S.à.r.l. Enel Distribuzione has a call option over the 80 percent of the share capital of Enel Rete Gas, from 2014 (when the five-year lock up period that applies to both Enel Distribuzione and the bidders expires) until 2018, at a strike price that takes into account the fair market value of the stake. Enel continues to operate in the gas transport and distribution sector through its remaining 20 percent interest in Enel Rete Gas, to which it continues to provide a number of support services.  On March 15 and March 17, 2010, respectively, the board of directors of Endesa and Enel approved the integration of the operations of ECYR (the Endesa company that pursues renewable operations in the Iberian peninsula) and EGP in the renewable energy sector in Spain and Portugal. The aim of the agreement was to ensure the unified management, within EGP, of development on the Iberian peninsula of all of the activities of EGP and Endesa in the renewable energy field. This objective will be pursued through ECYR, which will be held by EGP (60 percent) and Endesa (40 percent).  In July 2010, EGP and EGPE signed an agreement with Gas Natural to divide the assets of EUFER. The purpose of such agreement was to enable each party to pursue its own strategy in the Iberian renewable energy sector most effectively. EUFER assets have been divided into two well-balanced groups (Lot A and Lot B): Lot A continues to be held by the Group, which owns all of EUFER, and Lot B was be transferred to Gas Natural Fenosa. Accordingly, the 99

assets and liabilities associated with Lot B were classified as “Assets held for sale” and “Liabilities held for sale” in the balance sheet at December 31, 2011, as they meet the requirements for such classification set out in IFRS 5.

 On October 13, 2010, EGP received authorization from CONSOB to publish the prospectus for the public offering and listing of the shares of EGP. The authorization followed the approval on October 11, 2010 by Borsa Italiana S.p.A. (“Borsa Italiana”), a member of the London Stock Exchange Group, of the admission of EGP shares for trading on the electronic stock market. On October 30, 2010, Enel, in consultation with the Joint Global Coordinators and the Joint Bookrunners for the offer, set the final offering price at €1.60 per share. Following the completion of the global offering, as from November 4, 2010, EGP shares have been traded on the MTA electronic market operated by Borsa Italiana and on regulated Spanish markets. As of the date of this Offering Circular, following the above global offering, Enel’s stake in EGP amounts to 69.2 percent of the share capital.  In November 2010, Generalima, a company indirectly controlled by Endesa, launched a tender offer for Empresa Eléctrica de Piura, a Peruvian electricity generation company, acquiring on December 2010 36.5 percent of that company. In addition, on January 4, 2011, Generalima bought 20 percent of Eléctrica de Cabo Blanco for approximately $11 million (a company which in turn owns 60 percent of Empresa Eléctrica de Piura). As a result of these transactions, Endesa holds 96.5 percent of Empresa Eléctrica de Piura.  In December 2010, Endesa, as part of its efforts to rationalize operations in the gas transport and distribution industry in Spain and after regulatory clearance, completed a transaction for the sale of an 80 percent stake in its subsidiary, NUBIA 2000 (a company owning, through other vehicles, gas distribution and transmission assets) to two infrastructure investment funds for approximately €1 billion. Endesa continues to have a presence in Spain’s gas transport and distribution sector through its remaining 20 percent interest in NUBIA 2000, to which it continues to provide a number of support services.  On June 28, 2011, the Dutch subsidiary Enel Investment Holding BV (EIH), pursuant to the agreement reached on March 14, 2011 with ContourGlobal LP (ContourGlobal), closed the transaction for the sale to ContourGlobal of the entire issued share capital of the Netherlands — registered companies Maritza East III Power Holding and Maritza O&M Holding Netherland. These companies respectively own 73 percent of the Bulgarian company Enel Maritza East 3, owner of a lignite-fuelled power plant with an installed capacity of 908 MW (Maritza), and 73 percent of the Bulgarian company Enel Operations Bulgaria, which is responsible for the operation and maintenance of the Maritza plant. The total price paid by ContourGlobal for the equity holdings aggregated to €230 million.  On February 2, 2012, Enel completed the disposal of 102,384,037 ordinary shares (equal to 5.1 percent of share capital) of Terna S.p.A. The amount sold represented the entire interest previously held by Enel in Terna S.p.A., whose shares are traded on the Mercato Telematico Azionario (MTA) operated by Borsa Italiana. The transaction, which was carried out through an accelerated bookbuilding with Italian and international institutional investors, was priced at €2.74 per share, resulting in a total price of €281 million. The transaction was completed on February 7, 2012.  On July 25, 2012, the board of directors of Enersis —which held a direct interest of 60.6 percent in the capital of Enersis — called an extraordinary shareholders’ meeting for September 13, 2012 to approve a capital increase, to be expressed in Chilean pesos, of up to the equivalent of $8,020 million (at the Chilean peso/U.S. dollar exchange rate on December 20, 2012), to be subscribed in cash and/or in kind. Specifically, with regard to the portion of the capital increase for which the Group would subscribe, the transaction calls for Endesa Latinoamérica to disclose its interests in a number of Latin American companies operating in the electricity sector (in Brazil, Colombia, Peru, Chile and Argentina, in most of which Enersis already holds a direct stake). On November 6, 2012, the board of directors of Enersis called a special shareholders’ meeting on December 20, 2012 to approve a capital increase in an amount, expressed in Chilean pesos, approximately equal to between $5,915 million and $6,555 million (at the Chilean peso/U.S. dollar exchange rate on December 20, 2012), to be subscribed in cash or through contributions in kind. More specifically, within the context of this transaction, the shareholders’ meeting approved with a majority of 86 percent of the share capital:  the capital increase proposed by Endesa, which provided for the issue of a maximum of 16,441,606,297 new Enersis shares at price of 173 Chilean pesos per share, corresponding to a total of approximately $5,995 million (at the Chilean pesos/US dollar exchange rate on December 20, 2012);  the transfer by Endesa to Enersis of the entire share capital of Conosur — a company in which Endesa Latinoamérica transferred its holdings in 13 Latin American companies — for a total of 9,967,630,058 Enersis shares, valuing the transferred assets at approximately $3,643 million (at the Chilean peso/U.S. dollar exchange rate on December 20, 2012). The remaining shareholders were able to subscribe a total of 6,473,976,239 Enersis shares in cash, corresponding to approximately $2,352 million (at the Chilean pesos/US dollar exchange rate on December 20, 2012); and 100

 a condition governing the entire capital increase, under which completion of the transaction was conditional upon the other shareholders making cash subscriptions sufficient to ensure that the majority shareholder’s stake would not exceed the shareholding ceiling, established by law and the Enersis bylaws, of 65 percent of voting share capital. As part of the transaction, Enel and Endesa also undertook, as announced at the shareholders’ meeting on December 20, 2012, to make Enersis the Group’s sole investment vehicle in Latin America for the generation, distribution and sale of electricity (with the exception of the assets currently held by EGP or any future assets the latter may develop in the renewable energy sector in that geographical area). On March 29, 2013, the capital increase of Enel’s Chilean subsidiary, Enersis S.A., was successfully completed. As a result of the full subscription of the Enersis capital increase and the completion of the transaction, the subsidiary Endesa will continue to hold (directly and through the wholly owned subsidiary Endesa Latinoamérica) around 60.6 percent of the share capital of Enersis.  On June 17, 2013 Enel Green Power and Enel Energia reached an agreement for the sale to Enel Energia of the entire share capital of Enel.si, a wholly-owned subsidiary of Enel Green Power operating in Italy that offers products and integrated solutions in the retail market for the installation of distributed renewable generation facilities and for energy savings and efficiency for end users, working through a network of franchisees, comprising over 700 specialized installers. In 2012, Enel.si posted revenues of €215 million and an EBITDA of €13 million. The consideration received by Enel Energia for the entire share capital of Enel.si was approximately €92 million.  On June 21, 2013, Enel and OAO Gazprom signed a non-binding letter of intent aimed at the sale to the Russian company of the entire share capital of Marcinelle Energie, which owns the 420 MW combined-cycle gas turbine power plant in Marcinelle, Belgium, for consideration of €227 million on a cash and debt free basis. The parties are negotiating the definitive share and purchase agreement. As per similar transactions, the consummation of the transaction will be subject to the approval of the competent corporate bodies of the parties involved as well as to the applicable approvals of the competition and other competent regulatory authorities.

Strategy The strategic priorities of the Group for the upcoming five years are set out in the Business Plan and include:  protecting margins and cash flow generation in mature markets;  increasing investments in the growth markets of Eastern Europe and Latin America, as well as in renewables;  strengthening the financial structure and optimizing asset portfolio;  progress with respect to the reorganization of the Group, also including minorities buy-out; and  continued focus on financial stability.

Business overview Principal activities The organizational structure of the Group As from February 2012, the Group adopted a new operating model, designed to enhance operational flexibility. The Group’s organizational structure comprises, in addition to the Parent, which, in its capacity as the Group’s holding company, is responsible for directing and controlling the entire Group’s strategic activities, six divisions: Generation, Energy Management and Sales Italy (formerly separated in “Sales” and “Generation and Energy Management”), Infrastructure and Networks, Iberia and Latin America, International, Renewable Energy and Engineering and Research. In addition, there are certain corporate functions (i) dedicated to specific businesses (the Upstream Gas function, which pursues selective vertical integration to increase the competitiveness, security and flexibility of strategic sourcing to meet Enel’s gas requirements, and the Carbon Strategy function, which operates in the world’s CO2 certificate markets) and (ii) dedicated to provide supporting activities (the “Services and Other Activities” segment, which is responsible for providing services to the Group, maximizing synergies and economies of scale), which are comprised under the “Other, eliminations and adjustments” segment described below. The following organizational chart lists the Group’s divisions, as well as the principal legal entities of which they are comprised as of June 30, 2013:

101

Generation, Energy Management and Sales Italy Infrastructure and Networks Iberia and Latin America • Enel Servizio Elettrico • Enel Distribuzione  Endesa • Enel Energia • Enel Sole • Enel Produzione • Enel M@p • Enel Trade • Enel Trade Romania • Enel Trade Croatia • Enel Trade Serbia • Nuove Energie • Hydro Dolomiti Enel • SE Hydropower • San Floriano Energy • Enel Stoccaggi • Enel Longanesi Development

International Renewable Energy Engineering and Research

•Slovenské elektrárne • Enel Green Power • Enel Ingegneria e Ricerca S.p.A. • Enel Distributie Muntenia • Enel.si • Sviluppo Nucleare Italia • Enel Distributie Banat • Enel Green Power España(1) • Enel Distributie Dobrogea • Enel Green Power Romania • Enel Energie Muntenia • Enel Green Power North America • Enel Energie • Enel Green Power Bulgaria • Enel Productie • Enel Green Power France • Enel Romania • Enel Green Power Hellas • Enel Servicii Comune • RusEnergoSbyt • Enel OGK-5 • Enel France • Enelco • Marcinelle Energie

Note: (1) Following the merger carried out in 2011 includes data for EUFER.

Enel results by operating segment The Enel results by operating segment and a description of the activities of each operating segment are reported in the following sections. The results by operating segment as of and for the six months ended June 30, 2013 are reported and discussed in accordance with IFRS 8. The generation and energy management results of the Generation, Energy Management and Sales Italy division are shown separately from the results pertaining to electricity sales in Italy, consistent with the practice in previous periods and with the structure of internal reporting to top management. In particular, the Group’s decision to combine the Generation, Energy Management division and the Sales Italy division into one division (Generation, Energy Management and Sales Italy) has not, pursuant to IFRS 8, required any change to the Group’s reporting segments. The results by operating segment as of and for the year ended December 31, 2012 are reported and discussed on the basis of the organizational arrangements established under the new operating model and take into account the possibility of simplifying disclosures associated with the materiality thresholds established under IFRS 8. As a result, in addition to the effects of the elimination of transactions between segments, the “Other, eliminations and adjustments” segment reports data regarding the Parent, the “Services and Other Activities” segment, the Engineering and Research division (which in 2011 had been reported separately) and the activities of the Upstream Gas function (which had previously been included in the Generation and Energy Management division). The new model has not resulted in any changes in the CGUs. Accordingly, the performance figures for 2011 and the financial position at December 31, 2011, presented for comparative purposes in the 2012 Audited Consolidated Financial Statements, have been restated in accordance with these new arrangements. The Group’s financial results by business segment as of and for the year ended December 31, 2012 and comparative data for as of and for the year ended December 31, 2011 are presented based on the new organizational structure implemented in February 2012. The financial results by business segment as of and for the year ended December 31, 2010 have not been restated and are presented in this Offering Circular as disclosed in the 2011 Audited Consolidated Financial Statements. Had the financial results by business segment as of and for the year ended December 31, 2010 been restated to reflect the new organizational structure, they would not have had a material impact on the 2010 Audited Consolidated Financial Statements. 102

For further details, see “Overview ― Summary Financial Information” as well as the Audited Consolidated Financial Statements and accompanying notes thereto included in this Offering Circular. Enel summary results by operating segment The following tales set forth the Group’s revenues, operating income, operating margin and capital expenditures, by operating segment (reflecting the organizational structure described above and as of the date of this Offering Circular and described above), as of and for the six months ended June 30, 2013 and for the years ended December 31, 2012, 2011 and 2010.

As of June 30, 2013(1)

Other, Iberia & eliminations Infra & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments TOTAL

(Millions of euro) Revenues from third parties ...... 8,635 9,421 1,741 15,601 3.500 1,226 33 40,157 Revenues from other segments ...... 77 2,731 2,043 35 317 276 (5,479) -

Total revenues ...... 8,712 12,152 3,784 15,636 3,817 1,502 (5,446) 40,157 Net income/(charges) from commodity risk management ...... (49) (44) - (178) (4) 20 - (255)

Gross operating margin (EBITDA) ...... 477 667 1,966 3,614 565 973 31 8,293 Depreciation, amortization and impairment losses ...... 287 249 487 1,438 303 306 55 3,125

Operating income ...... 190 418 1,479 2,176 262 667 (24) 5,168

Capital expenditure ...... 24 96 483 803 376 552 25 2,359

Note: (1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period.

As of December 31, 2012(1) — Audited

Other, Iberia & eliminations Infra & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments TOTAL

(Millions of euro) Revenues from third parties .. 18,170 18,862 3,818 33,708 8,015 2,215 101 84,889 Revenues from other segments ...... 181 6,375 4,299 461 688 481 (12,485) —

Total revenues ...... 18,351 25,237 8,117 34,169 8,703 2,696 (12,384) 84,889 Net income/(charges) from commodity risk management ...... 17 131 — (161) 57 (6) — 38

Gross operating margin (EBITDA) ...... 689 1,271 4,138 7,212 1,650 1,681 97 16,738 Depreciation, amortization and impairment losses ...... 506 586 994 5,555 672 560 130 9,003

Operating income ...... 183 685 3,144 1,657 978 1,121 (33) 7,735

Capital expenditure ...... 97 403 1,497 2,497(2) 1,161 1,257 163(3) 7,075

Notes: (1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Not including €73 million related to the companies classified as “held for sale.” (3) Not including €1 million related to the companies classified as “held for sale.”

103

As of December 31, 2011 (restated)(1) — Audited

Other, Iberia Eliminations Infra and & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments TOTAL

Revenues from third parties .. 17,568 17,130 3,212 32,082 7,071 1,927 524 79,514 Revenues from other segments ...... 163 6,014 4,248 565 644 612 (12,246) — Total revenues ...... 17,731 23,144 7,460 32,647 7,715 2,539 (11,722) 79,514

Net income/(charges) from commodity risk management ...... 44 232 — 28 (22) (10) — 272 Gross operating margin (EBITDA) ...... 561 2,209 4,173 7,251 1,642 1,585 184 17,605

Depreciation, amortization and impairment losses ...... 420 592 914 3,194 580 505 122 6,327 Operating income ...... 141 1,617 3,259 4,057 1,062 1,080 62 11,278

Capital expenditure ...... 90 431 1,383 2,491(2) 1,450(3) 1,557 82 7,484

Notes: (1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Does not include €101 million regarding units classified as “Held for sale.” (3) Does not include €4 million regarding units classified as “Held for sale.”

As of December 31, 2010(1) — Audited

Services lberia & and Eliminations Eng. & Infra & Latin Renewable Other and Sales GEM Innov. Networks America lnt’l Energy Parent Activities adjustments TOTAL

(Millions of euro) Revenues from third parties ...... 18,499 12,173 106 2,991 31,022 6,203 1,934 358 102 (11 73,377 Revenues from other segments .... 198 5,367 502 4,436 241 157 245 321 1,031 (12,498 — Total revenues 18,697 17,540 608 7,427 31,263 6,360 2,179 679 1,133 (12,509 73,377

Net income/(ch arges) from commodity risk manageme nt ...... (587 788 — — 28 (29) 89 (9 — — 280 Gross operating margin (EBITDA) . 483 2,392 14 3,813 7,896 1,520 1,310 (68 136 (16 17,480

Depreciation, amortizatio n and impairment losses ...... 425 560 4 902 3,253 617 344 7 110 — 6,222 Operating income ...... 58 1,832 10 2,911 4,643 903 966 (75 26 (16 11,258

Capital expenditur 1,210 e ...... 62 648 5 1,147 2,866( (3) 1,065( 7 80 — 7,090

Notes: (1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Does not include €76 million regarding units classified as “Held for sale.” 104

(3) Does not include €10 million regarding units classified as “Held for sale.” (4) Does not include €11 million regarding units classified as “Held for sale.”

Sales division The Sales division deals with the sale in Italy of products and services related to electricity and gas. In 2012, the Group was the leading provider of electricity on the free market in Italy, and held the second largest market share with respect to sales of natural gas. In particular, the Sales division is responsible for commercial activities carried out through the following subsidiaries:  Enel Servizio Elettrico S.p.A. (“Enel Servizio Elettrico”), for the sale of electricity on the Universal Service market.  Enel Energia S.p.A. (“Enel Energia”), for the sale of electricity and gas on the free market. Enel Energia is the combined entity resulting from the merger of the activities of Easygas, Iridea, Enel Gas and the company previously named Enel Energia. Results from the Sales division also include the figures for Vallenergie S.p.A. (“Vallenergie”), a company that serves enhanced protection market customers in the Valle d’Aosta region, until November 30, 2011 (date on which the Group disposed of its participation in Vallenergie). Key data of the Sales division The Sales division recorded revenues of €8,712 million in the six months ended June 30, 2013, of wich €8,635 million was from third parties (21.5 percent of the Group’s total revenues); €18,351 million in 2012, of which €18,170 million was from third parties (21.4 percent of the Group’s total revenues); €17,731 million in 2011, of which €17,568 million was from third parties (22.1 percent of the Group’s total revenues); and €18,697 million in 2010, of which €18,499 million was from third parties (25.2 percent of the Group’s total revenues). The Sales division’s gross operating margin (EBITDA) was €477 million in the six months ended June 30, 201, €689 million in 2012, €561 million in 2011 and €483 million in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €24 million in the six months ended June 30, 2013, €97 million in 2012, €90 million in 2011 and €62 million in 2010. Electricity sales Since July 1, 2007, in application of Legislative Decree No. 73/07, as subsequently ratified into law by Law No. 215 of August 3, 2007, the Italian energy market has been deregulated and all end-users can choose their supplier on the free market. Within the framework of deregulation, Legislative Decree No. 73/07 introduced certain alternative electricity supply services: (i) the Universal Service, with contractual conditions and rates established by the Authority, limited to residential customers and small business clients, which are supplied at a low voltage and which have not chosen their supplier on the free market or were left deprived of a supply service; and (ii) the Last-Resort Service, providing predetermined rates to certain medium- and large-sized clients. For further details, see “Regulation.”

The electricity sold by the Sales division in the six months ended June 30, 2013 amounted to 45,578 million kWh. The electricity sold in the six months ended June 30, 2013 on the free market amounted to 18,131 million kWh and the electricity sold on the regulated market amounted to 27,447 million kWh. The electricity sold by the Sales division in 2012 amounted to 101,617 million kWh, evidencing a decrease of 2,131 million kWh from the previous year. The electricity sold in 2012 on the free market amounted to 41,289 million kWh, an increase of 1,106 million kWh from the previous year, while the electricity sold on the regulated market had a decrease equal to 3,237 million kWh. The following table sets forth the Group’s electricity sales on the free market, the regulated market and in total for the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months Year ended December 31, ended June 30, 2013 2012 2011 2010

(Millions of kWh)

Free market Mass-market customers ...... 12,653 26,011 27,629 27,494 Business customers(1) ...... 4,552 13,258 10,555 13,210 Safeguard market customers ...... 926 2,020 1,999 4,505 105

Six months Year ended December 31, ended June 30, 2013 2012 2011 2010

(Millions of kWh) Total free market ...... 18,131 41,289 40,183 45,209

Regulated market (Universal Service and Last-Resort

Service markets) Enhanced protection market customers ...... 27,447 60,328 63,565 67,763

Total ...... 45,578 101,617 103,748 112,972

Note: (1) Supplies to large customers and energy-intensive users (annual consumption greater than 1 GWh). Number of electricity clients The ongoing process of liberalization in the electricity market, started in 2007, has affected the composition of clients served by the Sales division in Italy. Specifically, there has been a reduction in the number of clients on the Universal Service and Last-Resort Service markets, while the number of clients on the free market has increased, mainly due to the migration of mass-market clients (including residential customers and small business clients) to the free market after July 1, 2007 (the date on which all clients became Eligible Clients). The following table sets forth the number of clients the Group’s Sales division supplied in 2012, 2011 and 2010.

Year ended December 31,

2012 2011 2010

(Average number of customers)

Free market Mass-market customers ...... 4,045,330 3,785,461 3,054,793 Business customers(1) ...... 45,640 48,894 58,082 Safeguard market customers ...... 41,832 38,383 78,408 Total free market ...... 4,132,802 3,872,738 3,191,283

Regulated market (Universal Service and Last-Resort Service markets) Enhanced protection customers ...... 23,899,698 24,998,901 26,171,196

Total ...... 28,032,500 28,871,639 29,362,479

Note: (1) Supplies to large customers and energy-intensive users (annual consumption greater than 1 GWh).

Natural gas sales Gas sold by the Sales division in the six months ended June 30, 2013 amounted to 2,585 million cubic meters. Gas sold by the Sales division in 2012 amounted to 4,342 million cubic meters, evidencing a decrease of 239 million cubic meters from the previous year. This decrease reflected a fall in quantities sold in particular to business clients. As of December 31, 2012, the gas clients served by the Sales division numbered approximately 3.2 million, as compared to 3.2 million in 2011 and 2.9 million in 2010. The average number of customers of the Group’s Sales division amounted to 3,159 million in 2012, 3,151 million in 2011 and 2,902 million in 2010. The following table sets forth the volumes of gas sold by the Group’s Sales division in the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

106

Six months Year ended December 31, ended June 30, 2013 2012 2011 2010

(millions of m3)

Gas sales Mass-market customers(1) ...... 2,181 3,440 3,419 3,718 Business customers ...... 404 902 1,162 1,785

Total sales ...... 2,585 4,342 4,581 5,503

Note: (1) Includes residential customers and “microbusinesses” with annual electricity consumption of less than 50,000 kWh. Generation and Energy Management division This division operates in Italy and abroad (excluding Iberia and Latin America), in the field of electricity generation and energy products, aiming to produce electricity at competitive costs and with respect for the environment. The main activities of the Generation and Energy Management division are as follows:  the generation and sale of electricity deriving from: (i) thermal and schedulable hydroelectric power plants in Italy (through Enel Produzione, Hydro Dolomiti Enel, SE Hydropower, San Floriano Energy and Energy Hydro Piave) and in Belgium, with the Marcinelle thermal plant operated by Enel Trade through a tolling agreement; and (ii) trading on international and Italian markets, primarily through Enel Trade, Enel Trade Romania, Enel Trade Croatia and Enel Trade Serbia;  the supply and sale of energy products through Enel Trade, which also handles: (i) provisioning for all of the Group’s needs; and (ii) the sale of natural gas to distributors;  the development of natural gas regasification plants (through Nuove Energie) and storage facilities (Enel Stoccaggi). Following a reorganization of its corporate activities, Enel Trade currently operates in the following sectors: (i) energy management, (ii) up-stream gas and (iii) carbon strategy. Key data of the Generation and Energy Management division In the six months ended June 30, 2013, the Generation and Energy Management division recorded revenues of €12,152 million, of which €9,421 million was from third parties (23.4 percent of the Group’s total revenues). In 2012, the Generation and Energy Management division recorded revenues of €25,237 million, of which €18,862 million was from third parties (22.2 percent of the Group’s total revenues) as compared to €23,144 million in 2011, of which €17,130 million was from third parties (21.5 percent of the Group’s total revenues); and €17,540 million in 2010, of which €12,173 million was from third parties (16.6 percent of the Group’s total revenues). The division’s gross operating margin (EBITDA) was €667 million in the six months ended June 30, 2013, €1,271 million in 2012, €2,209 million in 2011 and €2,392 in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €96 million in the six months ended June 30, 2013, €403 million in 2012, €431 million in 2011 and €648 million in 2010.

Generation and sales of electricity The Group, through the operations of its Generation and Energy Management division, is the primary electricity producer in Italy. As of December 31, 2012, the Generation and Energy Management division operated 266 generating plants with an installed capacity of 36,896 MW that represented about 30 percent of the net maximum electrical capacity in Italy, according to data from Enel. The following table sets forth the quantity and installed capacity of the Generation and Energy Management division’s generating plants in Italy, by generation technology, as of December 31, 2012.

Installed No. of Plants Capacity

(MW) Coal power plants ...... 8 6,746 Combined-cycle gas/turbogas (peak load) power plants ...... 15 7,994 Oil/gas/diesel (minor production) power plants ...... 19 9,947 Biomass power plants ...... 1 35 107

Installed No. of Plants Capacity

(MW) Total thermal power plants(1) ...... 43 24,722

Hydroelectric power plants ...... 221 12,168 Other power plant(2) ...... 2 6

Total ...... 266 36,896

Notes: (1) Of which 1,640 MW unavailable due to long-term technical issues (1,574 MW at December 31, 2011 and 1,551 MW at December 31, 2010). (2) Of which 35 MW unavailable due to transformation activities (35 MW at December 31, 2011 and December 31, 2010). The following table sets forth the Generation and Energy Management division’s net electricity production in Italy, by generation technology, in the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months ended June 30, 2013 2012 2011 2010

(Millions of kWh) Thermal ...... 19,848 49,623 50,708 47,744 Hydroelectric ...... 9,894 14,348 16,480 21,633 Other resources ...... 4 9 9 5

Total net generation ...... 29,746 63,980 67,197 69,382

Net electricity production in the six months ended June 30, 2013 amounted to 29,746 million kWh. Net electricity production in 2012 amounted to 63,980 million kWh, as compared to 67,197 million kWh in 2011 and 69,382 million kWh in 2010. The decline from 2011 to 2012 reflects a decrease in hydro generation of 2,132 million kWh as a result of poorer water conditions in the period and a decrease in thermal generation of 1,085 million kWh. More specifically, a decrease of 2,268 million kWh in thermal generation in Italy, associated with the decline in electricity demand and changes in the generation mix as a result of the increase in the proportion of photovoltaic generation in the Italian market, was only partially offset by the increase of 1,183 million kWh in output registered in Belgium (due to the entry into service on April 1, 2012, of the combined-cycle plant of Marcinelle Energie, which is operated by the division under a tolling agreement). The decline from 2010 to 2011 reflects a decrease in hydro generation of 5,153 million kWh as a result of poorer water conditions in the period and a decrease of 1,462 kWh due to a change in the method of consolidating Hydro Dolomiti Enel, partially offset by a 2,964 million kWh increase in thermal production during the period.

The following table sets forth the Generation and Energy Management division’s gross thermal electricity production in the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months ended June 30, 2013 2012 2011 2010

(Million (Millions s (Millions (Millions

of kWh) (%) of kWh) (%) of kWh) (%) of kWh) (%) High-sulphur fuel oil (S›0.25%) ...... 181 0.8% 849 1.6 753 1.4 % 754 1.5 % Low-sulphur fuel oil (S‹0.25%) ...... 108 0.5% 455 0.9 311 0.6 % 877 1.7 % Total fuel oil ...... 289 1.3% 1,304 2.5 1,064 2.0 % 1,631 3.2 %

Natural gas ...... 4,680 21.9% 13,913 26.2 18,771 34.8 % 20,172 39.7 % Coal ...... 16,128 75.4% 37,379 70.3 33,578 62.2 % 28,592 56.2 % 108

Six months ended June 30, 2013 2012 2011 2010

(Million (Millions s (Millions (Millions

of kWh) (%) of kWh) (%) of kWh) (%) of kWh) (%) Other fuels ...... 294 1.4% 553 1.0 538 1.0 % 467 0.9 %

Total ...... 21.391 100.0% 53,149 100.0 53,951 100.0 % 50,862 100 %

In the framework of a transformation program aimed at increasing the efficiency and the competitiveness of the Group’s plants in the context of the liberalized Italian market, the Group has commenced the conversion of the fuel oil thermal plant at Porto Tolle into a clean-coal plant. The new Porto Tolle plant, lower in capacity but more efficient than the existing plant, is expected to be able to satisfy market price pressures while applying advanced technologies to improve environmental performance, including through an 80 percent reduction of pollutants compared to the existing plant.

On June 21, 2013, Enel and OAO Gazprom signed a non-binding letter of intent aimed at the sale to the Russian company of the entire share capital of Marcinelle Energie, which owns the 420 MW combined-cycle gas turbine power plant in the Marcinelle, Belgium, for consideration of €227 million on a cash and debt free basis. The parties are negotiating the definitive share and purchase agreement. As per similar transactions, the consummation of the transaction will be subject to the approval of the competent corporate bodies of the parties involved as well as to the applicable approvals of the competition and other competent regulatory authorities.

Trading on the international markets and in Italy Part of Enel Trade’s responsibility is to reduce the Group’s exposure to commodity risk by entering into derivatives transactions, within the limits of the Group’s policies. Enel Trade also carries out proprietary trading that consists of taking on energy commodity (oil products, gas, coal and electricity) exposures in the main European countries by means of financial derivative instruments and contracts for physical delivery exchanged on the regulated and over-the-counter markets, seeking to exploit arbitrage opportunities and speculating on price developments. The activity is carried out within a formal governance framework with strict risk limits set at the Group level, and compliance therewith is verified daily by an organizational unit independent from the groups carrying out trading operations. Specific controls in terms of quantitative risk limits (value at risk) are in place. Credit risk management for trading operations is based on strict evaluation, assignment and monitoring procedures in accordance with international best practices. The credit limit for each counterparty is set through the use of official ratings, when available, or otherwise by assigning to each counterparty an internal rating obtained via a thorough analysis of the counterparty’s financial statements and other information to which Enel Trade has access, including information from external information-providers. If necessary, further guarantees are required to support credit in the form of bank or insurance guarantees, or guarantees from the holding companies of the counterparties. Guarantors are also subject to rating and risk limits. Within the framework of the development of electricity trading activities on foreign markets Enel Trade will carry out procurement activities, as well as trading and cross-border operations, exploiting the opportunities derived from their geographical location and from the presence in the area of other companies of the Group. Procurement and sale of energy products Enel Trade also carries out fuel procurement to satisfy the needs of the Group’s generation plants and the market demand for gas sold by other Group companies, seeking to: (i) assure that the Group obtains fuel of the quality required for the functioning of its plants; and (ii) limit the cost of procurement and mitigate price volatility risks. With these guidelines, a policy of entering into medium- and long-term contracts (some including take-or-pay provisions) is pursued, diversifying where possible the sources of procurement. The costs of transporting purchased fuel are also stabilized through the use of long-term transportation contracts. With regard to coal, the principal countries that supply the Generation and Energy Management division are South Africa, Indonesia, Colombia, Russia, and USA, while, with regard to gas, Algeria and Nigeria are the principal sources of supply.

109

Development of natural gas storage products The Group carries out natural gas storage activities through Enel Stoccaggi, which is fully owned by its subsidiary Enel Trade. This gas storage enables the Group to compensate for daily or seasonal variations in consumption, and consistently ensure an adequate supply of natural gas. On May 23, 2011, Enel Stoccaggi was awarded a positive environmental impact evaluation from the Ministry for the Environment with respect to the project of converting the Romanengo field (Cremona) reservoir into a storage facility. The project is expected to lead to the creation of some 300 million cubic meters of available gas. Such environmental impact evaluation was challenged before the regional administrative Court (Tribunale Amministrativo Regionale) of Brescia. Following such enforcement, Enel Stoccaggi has engaged in certain consultation procedures with the interested stakeholders in order to find a solution to such issue. Infrastructure and Networks division The Infrastructure and Networks division is responsible for operating the Group’s electricity distribution networks in Italy. These activities are carried out by:  Enel Distribuzione, for the distribution of electricity;  Enel Sole S.r.l., for public and scenic lighting;  Enel M@p, for the supply of electronic meters and of the relevant telemanagement systems. Results from the division also include the figures for Deval (“Deval”), a company that distributes electricity in the Valle d’Aosta region, until November 30, 2011 (date on which the Group disposed of its participation in Deval). Key data of the Infrastructure and Networks division The Infrastructure and Networks division recorded revenues of €3,784 million in the six months ended June 30, 2013 (of which €1,741 million was from third parties, accouting for 4.3 percent of the Group’s total revenues), €8,117 million in 2012 (of which €3,818 million was from third parties, accouting for 4.5 percent of the Group’s total revenues), as compared to €7,460 million in 2011 (of which €3,212 million was from third parties, accouting for 4.0 percent of the Group’s total revenues), and €7,427 million in 2010. The division’s gross operating margin (EBITDA) was €1,966 million in the six months ended June 30, 2013, €4,138 million in 2012, €4,173 million in 2011 and €3,813 million in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €483 million in the six months ended June 30, 2013, €1,497 million in 2012, €1,383 million in 2011 and €1,147 million in 2010.

Electricity transport and distribution networks The division is the main distributor of electricity in Italy (with 113,267 million kWh of electricity transported in the six months ended June 30, 2013, 238,164 million kWh of electricity transported in 2012, 246,434 million kWh of electricity transported in 2011 and 246,997 million kWh of electricity transported in 2010) and owns the main distribution network (extending 1,124,966 kilometers as of December 31, 2012). The following table sets forth the length of the Infrastructure and Networks division’s low-, medium- and high-voltage lines, as well as the volume of electricity transported through the division’s network, as of and for the years ended December 31, 2012, 2011 and 2010.

Year ended December 31,

2011 2012 (restated) 2010

High-voltage lines at year-end (km) ...... — — 57

Medium-voltage lines at year-end (km) ...... 347,927 345,586 344,029 Low-voltage lines at year-end (km) ...... 777,039 767,341 765,024

Total electricity distribution network (km) ...... 1,124,966 1,112,927 1,109,110

Electricity transported on Enel’s distribution network (millions of kWh) 238,164 246,434 246,997

Gas transport and distribution networks Following the disposal of 80 percent of the share capital of Enel Rete Gas to F2i reti Italia S.r.l., F2i and Finavias S.à.r.l., Enel continues to operate in the gas transport and distribution sector though its remaining 20 percent interest in Enel Rete Gas, to which it will continue to provide a number of support services. For further details, see “Internationalization and Focus on Energy Businesses — Most significant transactions.”

110

Public and scenic lighting services The Group — through Enel Sole — provides public and scenic lighting in Italy and abroad, serving approximately 3,700 municipalities with approximately two million streetlights, and providing scenic lighting for more than 700 important buildings and monuments as of December 31, 2012. Iberia and Latin America division The Iberia and Latin America division, established in 2007 following the purchase of 67.05 percent of the share capital of Endesa and operative from January 1, 2008, focuses on developing Enel’s presence and coordinating its operations in the electricity and gas markets of Spain, Portugal, Latin America and Central America, including formulating growth strategies in the related regional markets. For consolidated reporting purposes, this division was allocated Enel’s proportional share of the net assets and results of operations of Endesa, which operates principally in Spain, Portugal, Latin America (in particular, in Chile, Colombia, Brazil, Argentina and Peru) and Central America, in the generation, distribution and sale of electricity and gas, until, as a consequence of the purchase of an additional 25.01 percent stake in Endesa on June 25, 2009, Endesa was fully consolidated in the Group’s results as from such date. The companies Enel Latin America, Inelec, Americas Generation Corporation and EUFER, previously under the Iberia and Latin America division, have been reassigned to the Renewable Energy division formed in September 2008, and data in respect of them is not included in the below data for any period.

Following the integration of Enel’s operations in the renewable energy sector in Spain and Portugal, the activities of Endesa Cogeneración y Renovables (ECYR, now EGPE) and its subsidiaries were transferred at the end of the first quarter of 2010 from the Iberia and Latin America division to the Renewable Energy division. In 2011, other minor changes in the scope of the Iberia and Latin America division were made, involving the Spanish ICT operations and the company Compostilla Re (operating in the reinsurance field), which were transferred to the “Services and Other Activities” segment as part of activities to improve the allocation of operating units within the Iberia and Latin America division. Key data of the Iberia and Latin America division The Iberian and Latin American division recorded revenues of €15,636 million in the six months ended June 30, 2013, of which €15,601 million was from third parties (38.9 percent of the Group’s total revenues); €34,169 million in 2012, of which €33,708 million was from third parties (39.7 percent of the Group’s total revenues); €32,647 million in 2011, of which €32,082 million was from third parties (40.3 percent of the Group’s total revenues); and €31,263 million in 2010, of which €31,022 million was from third parties (42.3 percent of the Group’s total revenues). The division’s gross operating margin (EBITDA) was €3,614 million in the six months ended June 30, 2013, €7,212 million in 2012, €7,251 million in 2011 and €7,896 million in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €803 million in the six months ended June 30, 2013, €2,497 million in 2012, €2,491 million in 2011 and €2,866 million in 2010. Acquisition of Endesa Endesa is the principal company operating in the Spanish electricity sector; it also operates in Portugal and in Latin America. In particular, Endesa carries out: (i) electricity generating activities in Spain, Chile, Argentina, Peru, Colombia, Brazil, Morocco and Portugal; (ii) electricity distribution activities in Spain, Chile, Argentina, Peru, Colombia and Brazil; and (iii) electricity sales activities in Spain, Argentina, Brazil, Chile, Colombia and Peru. On February 27, 2007, Enel, acting through its wholly owned subsidiary EEE, purchased 9.99 percent of Endesa’s share capital, for a total consideration of approximately €4.1 billion. Subsequently, after obtaining the required administrative authorizations, EEE requested physical settlement of certain swap agreements entered into in March 2007. As a result, EEE raised its holding to 264,401,597 shares, representing an increase from 9.99 percent to 24.97 percent of Endesa’s share capital. On March 26, 2007, Enel and Acciona – the latter having meanwhile raised its holding in Endesa to approximately 21 percent of that company’s share capital – entered into an agreement for the joint management of Endesa, and also agreed to make a joint tender offer for 100 percent of the company’s share capital (the “Tender Offer”). Enel granted Acciona a put option to sell Enel all, but not less than all, of the shares of Endesa directly or indirectly owned by Acciona at any time between the third and the tenth anniversaries of the agreement. On April 11, 2007, following the failure of E.On’s tender offer over the Endesa shares, Enel (acting through its subsidiary EEE) and Acciona presented their joint offer for 100 percent of the Endesa shares.

111

In accordance with the agreement entered into by Enel and Acciona, following completion of the Tender Offer, Enel owned 67.05 percent of Endesa’s share capital, while Acciona directly and indirectly held 25.01 percent. On February 20, 2009, Enel, EEE and Endesa signed a new agreement with Acciona and its subsidiary Finanzas Dos for the acquisition of the 25.01 percent of Endesa owned directly and indirectly by Acciona; such agreement provided for the early exercise by Acciona of the put option provided by the agreement of March 26, 2007 (the original first exercise date was March 1, 2010).

On June 25, 2009, Enel acquired the 25.01 percent of Endesa owned directly and indirectly by Acciona. The purchase price for the 25.01 percent of Endesa was set at €11.1 billion but was subsequently reduced to €9.627 billion to take account of dividends that were paid by Endesa to Acciona. As of the date of this Offering Circular, Enel’s stake in Endesa is 92.06 percent. Electricity production The net electricity production in the six months ended June 30, 2013 amounted to 61,712 million kWh.The net electricity production in 2012 amounted to 141,434 million kWh, as compared to 138,713 million kWh in 2011 and 130,484 million kWh in 2010. More specifically, in the six months ended June 30, 2013, net electricity generation in the Iberian peninsula fell by 7,657 million kWh, or 19.1%, mainly as a result of lower thermal (down 42.1%) and nuclear power generation (down 7.0%), partially offset by higher hydroelectric generation (up 104.4%) as a result of improved water conditions during the period. In Latin America, net electricity generation posted a decline of 1,032 million kWh, mainly as a result of lower hydroelectric generation in Chile, Brazil and Argentina caused primarily by poorer water conditions and, in Brazil, as a result of a number of restrictions placed by the regulatory authority on hydroelectric generation. The decline was partially offset by an increase in thermal output in Chile following the entry into service of the new Bocamina II plant. In 2012, net electricity production in the Iberian peninsula rose by 2,256 million kWh or 3.0 percent as a result of an increase in nuclear generation (up 7.1 percent), which in 2011 was affected by maintenance work, and in conventional thermal generation (up 3.0 percent). These increases were only partially offset by the decline in hydroelectric output due to poorer water conditions. Net electricity production in Europe in 2011 amounted to 7,878 million kWh, primarily due to the increase in thermal generation (up 45.5 percent), which more than offset the reduction in nuclear generation due to temporary shut- down of a number of plants (down 8.8 percent), and the decline in hydroelectric generation owing to poorer water availability in the period. In Latin America, net electricity production posted an increase of 351 million kWh. More specifically, increased hydroelectric generation in Colombia, Brazil and Argentina more than offset the decline Chile caused by the drought in that country. As regards conventional thermal generation, production in Chile was boosted by the new coal-fired Bocamina II plant, although those effects were more than offset by the decline in thermal generation in Argentina (owing to an increase in maintenance work), Peru and Chile (for combined cycled plants only). Net generation in Latin America rose by 351 million kWh in 2011, mainly as a result of higher thermal generation in Argentina, Chile and Peru, partially offset by lower hydroelectric generation (due to less favorable water availability in the period in all the Latin American countries in which the division operates, with the exception of Columbia and Peru). The following table sets forth the Iberia and Latin America division’s total net production for the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six Years ended December 31, months ended June 30, 2013 2012 2011 2010

(Millions of kWh) Thermal ...... 28,871 73,928 73,549 59,238 Nuclear ...... 12,776 26,967 25,177 27,619 Hydroelectric ...... 19,995 40,386 39,855 42,920 Wind ...... 70 153 132 647 Other resources ...... - — — 60

Total net production ...... 61,712 141,434 138,713 130,484

The net maximum electrical capacity as of December 31, 2012 decreased by 778 MW compared with the end of 2011, due primarily to the disposal of the thermal plants of Endesa Ireland (a decrease of 1,013 MW) in the fourth quarter of 2012. That 112 effect was partially offset by the increase in net efficient capacity in Chile following the entry into service of the Bocamina II coal-fired plant (producing a gain of 350 MW).

The net maximum electrical capacity at December 31, 2011 decreased by 165 MW. Such decrease is due primarily to the decline in thermal generation capacity in Europe (down 137 MW) as a result of the reduced capacity of the San Adrian gas plant which more than offset the entry into service of a number of thermal combined-cycle plants. The following table details the Iberia and Latin America division’s net maximum electrical capacity as of December 31, 2012, 2011 and 2010.

As of December 31,

2012 2011 2010

(MW) Thermal plants ...... 21,166 21,997 22,169 Nuclear plants ...... 3,535 3,526 3,514 Hydroelectric plants ...... 13,305 13,261 13,258 Wind plants ...... 78 78 77

— — 9

Total net maximum electrical capacity ...... 38,084 38,862 38,862

Electricity transport and distribution networks At December 31, 2012, the size of the electricity distribution network of the Iberia and Latin America division was 638,001 km, as compared to 623,929 km at December 31, 2011, and 612,601 km at December 31, 2010, with the change mainly concentrated in the Latin American countries. Energy transported in the six months ended June 30, 2013 amounted to 78,555 million kWh. Energy transported in 2012 amounted to 161,131 million kWh as compared to 158,882 million kWh in 2011 and 170,794 million kWh in 2010. The following table sets forth the length of the Iberia and Latin America division’s low-, medium- and high-voltage lines, as well as the volume of electricity transported through the division’s network, as of and for the years ended December 31, 2012, 2011 and 2010.

Years ended December 31,

2012 2011 2010

High-voltage lines at year-end (km) ...... 31,193 30,533 30,242 Medium-voltage lines at year-end (km) ...... 274,663 270,833 267,010 Low-voltage lines at year-end (km) ...... 332,145 322,563 315,349

Total electricity distribution network (km) ...... 638,001 623,929 612,601

Electricity transported on Enel’s distribution network (millions of kWh) ...... 161,131 158,882 170,794

Sales of electricity Electricity sales to end users in the six months ended June 30, 2013 totaled 77,583 million kWh. Electricity sales to end users in 2012 totaled 162,490 million kWh as compared to 161,171 million kWh in 2011 and 157,698 million kWh in 2010. The increase in sales in Latin America was partially offset by the decrease in volumes sold in the Iberian Peninsula. The following table sets forth the Iberia and Latin America division’s sales in the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months Years ended December 31, ended June 30, 2013 2012 2011 2010

(Millions of kWh) Sales on free market ...... 50,413 108,586 112,333 114,001 Sales on regulated market ...... 27,170 53,904 48,838 7,107

TOTAL ...... 77,583 162,490 161,171 157,698

– of which Iberian peninsula ...... 47,496 102,765 104,935 106,894 – of which Latin America ...... 30,087 59,725 56,236 50,804 113

The Iberia and Latin America division offers its medium- and large-sized business clients a wide variety of electricity contracts with fixed or variable prices, and similarly offers its residential and small business clients numerous different tariff plans. International division The mission of the International division is to support the Group’s strategies for international growth, as well as to manage and integrate the foreign businesses, with the exception of the Iberian and Latin American markets and the renewable energies generation activities, which are managed respectively by the Iberian and Latin American and the Renewable Energy divisions, as well as monitoring and developing business opportunities that should present themselves on the electricity and fuel markets. The operations of this division are currently divided into three geographical regions: (i) Central Europe, where the International division is active in electricity sales in France (Enel France), power generation in Slovakia (Slovenské elektrárne), and the development of thermal power plants and support activities in Belgium (Marcinelle Energie); (ii) South-eastern Europe, with the development of generation capacity (Enel Productie S.R.L.) and electricity distribution, sale and support activities in Romania (Enel Distributie Banat S.A., Enel Distributie Dobrogea S.A., Enel Energie, Enel Distributie Muntenia S.A., Enel Energie Muntenia S.A., Enel Romania S.R.L. and Enel Servicii Comune S.A.); and (iii) Russia, with electricity sales and trading (RusEnergoSbyt) and power generation and sales (Enel OGK-5). Key data of the International division The International division recorded revenues of €3,817 million in the six months ended June 30, 2013, of which €3,500 million was from third parties (8.7 percent of the Group’s total revenues); €8,703 million in 2012, of which €8,015 million was from third parties (9.4 percent of the Group’s total revenues); €7,715 million in 2011, of which €7,071 million was from third parties (8.9 percent of the Group’s total revenues); and €6,360 million in 2010, of which €6,203 million was from third parties (8.5 percent of the Group’s total revenues). The division’s gross operating margin (EBITDA) was €565 million in the six months ended June 30, 2013, €1,650 million in 2012, €1,642 million in 2011 and €1,520 million in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €376 million in the six months ended June 30, 2012 €1,161 million in 2012, €1,450 million in 2011 and €1,210 million in 2010.

The following is a description of the activities carried out by the division in the three geographical regions. Central Europe France The Group, through its fully-owned subsidiary Enel France, sells electricity on both the free market and to end-users. Sales to end users are made at both market prices and semi-regulated prices (levels influenced by the Accès Régulé à l’Electricité Nucléaire Historique (“ARENH”) mechanism, which regulates access to nuclear energy at discounted price). Following publication of the so-called “NOME” law, Enel France has the right to buy from EdF nuclear energy at the ARENH Price. On December 4, 2012, Enel France notified EdF of the exercise of its exit right relating to its participation in the EPR nuclear power plant project in Flamanville, Normandy (“Flamanville 3”) and in another five power plants to be built in France using the same EPR technology, thus terminating the strategic partnership agreement the two companies signed in November 2007. By exiting the Flamanville 3 project, Enel was reimbursed the prepaid expenses related to its 12.5 percent interest in the project for a total amount of approximately €613 million plus accrued interests. The transaction was effective from December 19, 2012. The termination of the agreement also determined the foreclosure of the “anticipated capacity” contracts, which were linked to the above mentioned participation in the EPRs to be constructed, for a total amount of 1,200 MW in 2012. The overall amount of the energy supplied by EdF to Enel as anticipated capacity will be gradually reduced to 800 MW and 320 MW during the first and second years, respectively, and will be phased out in the third year from the termination date. The commercial platform in France in relation to the energy supply will be further enhanced through recourse to alternative sources. The Group also owns five percent of the share capital of Powernext S.A., the French electricity exchange.

114

Slovakia Enel, through Enel Produzione, owns 66 percent of the electricity company Slovenské elektrárne, the largest generating company in Slovakia, which was acquired from the National Property Fund of the Slovak Republic (the “NPF”). The remaining 34 percent of the share capital remains held by the NPF, and shareholders’ rights in respect of such shares are exercised by Slovakia’s Ministry of Economy. SE’s electricity production for 2012 (net of pumping) was composed as follows: (i) 70.38 percent from nuclear plants; (ii) 18.86 percent from hydroelectric plants; and (iii) 10.76 percent from thermal and photovoltaic plants. In 2012, SE generated a total of 20.5 TWh of net electricity production (net of pumping), and purchased a further 7.2 TWh of energy. Total sales to final customers amounted to 4.2 TWh. As of December 31, 2012, SE had an installed hydroelectric, thermal, solar and nuclear capacity equal to 5,401 MW. SE’s nuclear generation is carried out at two facilities located in the municipalities of Bohunice and Mochovce, which together contain four active reactors, all of which are pressurized-water-technology reactors. Bohunice has a capacity of 1,000 MW and Mochovce of 940 MW (Mochovce), for a gross total capacity of 1,940 MW as of December 31, 2012. In November 2008, work for the completion of units 3 and 4 of the nuclear plant at Mochovce, with a capacity of 880 MW, commenced; these units are expected to enter production during 2014 and 2015, respectively. SE’s hydroelectric production consists of run-of-the-river hydropower plants and programmable hydroelectric plants (with both pondage and reservoir installations) for a total installed capacity of 1,653 MW.

SE’s thermal generation is carried out at two sites: (i) Novaky, which has installed capacity of 518 MW; and (ii) Vojany, with an installed capacity equal to 880 MW. Belgium The Group, through its fully owned subsidiary Marcinelle Energie, manages a 420 MW CCGT plant in the Wallonia region of Belgium. The plant came into operation on March 30, 2012. The plant is expected to generate around 2.5 TWh of electricity per year for the Belgian domestic market. Enel Trade is the Group vehicle in charge of commercializing such electricity through a 100 percent tolling agreement (fuel per electricity) with the Marcinelle Energie power plant. On June 21, 2013, Enel and OAO Gazprom signed a non-binding letter of intent aimed at the sale to the Russian company of the entire share capital of Marcinelle Energie for consideration of €227 million on a cash and debt free basis. The parties are negotiating the definitive share and purchase agreement. As per similar transactions, the consummation of the transaction will be subject to the approval of the competent corporate bodies of the parties involved as well as to the applicable approvals of the competition and other competent regulatory authorities.

Southeastern Europe Romania The Group sells electricity in Romania, through Enel Energie (in the Banat and Dobrogea regions) and Enel Energie Muntenia (in the Bucharest region), and is also involved in electricity distribution, through Enel Distributie Banat, Enel Distributie Dobrogea and Enel Distributie Muntenia, which, in 2012, together distributed approximately 14.6 TWh of electricity to approximately 2.7 million clients through a 90,394 kilometer network (as of December 31, 2012). As of December 31, 2012, the aggregate market share of Enel Distributie Banat, Enel Distributie Dobrogea and Enel Distributie Muntenia was approximately 29 percent (14.6 TWh out of a total of 52.4 TWh). Enel controls, through its Dutch wholly owned subsidiary Enel Investment Holding B.V., the above-mentioned companies with a 51.0 percent stake in the share capital of each of Enel Distributie Banat, Enel Distributie Dobrogea and Enel Energie, and with a 64.4 percent stake in the share capital of Enel Distributie Muntenia and Enel Energie Muntenia; these stakes were acquired following the privatization of three of the eight electricity distribution and supply companies in Romania. The Group owns an interest equal to 9.15 percent in the company Ergonuclear S.A., which aims to construct two CANDU nuclear reactors, each with 720 MW of capacity, at the Cernavoda plant. Russia The Group operates in Russia, through two principal subsidiaries or controlled companies, in two vertically integrated sectors: electricity generation and electricity sales.  Enel OGK-5: Enel OGK-5 is one of the main electricity generation companies in Russia. It is active in the markets of the Urals, the Caucasus and central Russia. The company was founded in 2004, within the framework of the reform of 115

the Russian energy sector, in order to establish a competitive market and to attract private investment to the sector. As of the date of this Offering Circular, Enel, through its subsidiary EIH, has a stake in OGK-5 of approximately 56.43 percent. Enel OGK-5 operates through four plants in three regions: (i) in the Urals, Reftinskaya GRES (3,800 MW gross capacity fuelled by coal) and Sredneuralskaya GRES (1,601 MW gross capacity fuelled by gas); (ii) in the northern Caucasus, Nevinnomysskaya GRES (1,675 MW gross capacity fuelled by gas); and (iii) in central Russia’s Tver region, Konakovskaya GRES (2,520 MW gross capacity fuelled by gas).  RusEnergoSbyt: The Group, through EIH, owns 49.5 percent of the share capital of Res Holdings, which in turn holds 100 percent of the share capital of RusEnergoSbyt, the largest independent electricity supplier and trader in Russia. The remaining part of the share capital of Res Holdings is held by EnergyBridge B.V., the lead company of the ESN Group, a Russian corporate group active in the energy sector. As of December 31, 2012, the company has a total of almost 80,000 clients and in 2012 it sold approximately 25.6 TWh of electricity (the number of clients and the amount of electricity sold refer to the 49.5 percent interest).

Electricity production The net generation by the International division in the six months ended June 30, 2013 amounted to 31,518 million kWh. The net generation in 2012 amounted to 65,231 million kWh as compared to 65,472 million kWh in 2011 and 68,476 million kWh in 2010. The reduction is mainly attributable to the decline in output resulting from the sale of Enel Maritza East 3 in June 2011. The following table sets forth the International division’s net electricity production in the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months Years ended December 31, ended June 30, 2013 2012 2011 2010

(Millions of kWh) Thermal ...... 21,416 46,687 47,316 49,743 Nuclear ...... 7,157 14,411 14,340 13,534 Hydroelectric ...... 2,917 4,105 3,791 5,179 Other resources ...... 28 28 25 20

Total net generation ...... 31,518 65,231 65,472 68,476

As of December 31, 2012 the installed net maximum electrical capacity of the International division was 14,858 MW as compared to 14,428 MW as of December 31, 2011 and 14,407 MW as of December 31, 2010. The following table sets forth the International division’s net maximum electrical capacity, by generation technology, as of December 31, 2012, 2011 and 2010.

As of December 31,

2012 2011 2010

(MW) Thermal plants ...... 10,706 10,272 10,256 Nuclear plants ...... 1,816 1,818 1,818 Hydroelectric plants ...... 2,329 2,329 2,329 Other resources ...... 7 9 4

Total net maximum electrical capacity ...... 14,858 14,428 14,407

Electricity transport and distribution networks As of December 31, 2012, the size of the electricity distribution network (located entirely in Romania) was 90,394 km as compared to 89,944 km as of December 31, 2011 and 89,240 km as of December 31, 2010, due primarily to new connections installed as part of investments in the grid. In the six months ended June 30, 2013, 6,950 million kWh of electricity were transported over the networks. In 2012, 14,606 million kWh of electricity were transported over the networks, compared to the 14,263 million kWh transported in 2011 and 13,827 million kWh transported in 2010. 116

The following table sets forth the length of the International division’s low-, medium- and high-voltage lines, as well as the volume of electricity transported through the division’s network, as of and for the years ended December 31, 2012, 2011 and 2010.

2012 2011 2010

High-voltage lines at year-end (km) ...... 6,586 6,584 6,583 Medium-voltage lines at year-end (km) ...... 34,956 34,665 34,439 Low-voltage lines at year-end (km) ...... 48,852 48,695 48,218

Total electricity distribution network (km) ...... 90,394 89,944 89,240

Electricity transported on Enel’s distribution network (millions of kWh) 14,606 14,263 13,827

Sales of electricity In 2012, the electricity sold by the International division amounted to 52,023 million kWh, as compared to 46,440 million kWh in 2011 and 37,873 million kWh in 2010, primarily due to:  an increase in sales in the Russian market as a result of the expansion of operations into new areas;  an increase in sales by Enel France, largely as a result of the entry into force on July 1, 2011, of the ARENH mechanism; and  an increase in sales in Slovakia and Romania. The following table sets forth the International division’s electricity sales in the six months ended June 30, 2013 and years ended December 31, 2012, 2011 and 2010.

Six Years ended December 31, months ended June 30, 2011 2013 2012 (restated) 2010

(Millions of kWh) Sales on free market ...... 17,808 41,109 36,030 23,454 Sales on regulated market ...... 5,167 10,914 10,410 14,419 TOTAL ...... 22,975 52,023 46,440 37,873

– of which Romania ...... 4,425 9,158 8,785 9,026 – of which France ...... 4,023 13,077 11,398 5,578 – of which Russia ...... 12,542 25,562 22,642 21,053 – of which Slovakia ...... 1,985 4,226 3,615 2,216

Renewable Energy division The Group is one of the main international operators in the generation of electricity from renewable resources. All the activities related to the Group generation of electricity from renewable resources in Italy and abroad are carried out by EGP, a Group company with a presence in Europe, North America and Latin America, and one of the global leaders in its industry, with a total installed capacity of around 8 GW and more than 711 plants in operation in 16 countries. The division produced 25.1 TWh of energy from water, sun, wind, geothermal and biomass in 2012.

The Renewable Energy division has the mission of developing and managing operations for the generation of electricity from renewable resources, ensuring their integration in line with the Group’s strategies. The geographical areas of operation of the Renewable Energy division are:  Italy, with power generation from non-schedulable hydroelectric plants, as well as geothermal, wind and solar plants (EGP and other minor companies), as well as plant design and franchising activities (Enel.si);  the rest of Europe, with power generation from non-schedulable hydroelectric plants, as well as geothermal, wind and solar plants in Greece (Enel Green Power Hellas), France (Enel Green Power France), Romania (Enel Green Power Romania) and Bulgaria (Enel Green Power Bulgaria);  Iberia and Latin America, with power generation from renewable resources in Spain and Portugal (EGPE, which merged with EUFER in 2011) and Latin America (Enel Green Power Latin America); and

117

 North America, with power generation from renewable resources (Enel Green Power North America). Key data of the Renewable Energy division The Renewable Energy division recorded revenues of €1,502 million in the six months ended June 30, 2013, of which €1,226 million was from third parties (3.1 percent of the Group’s total revenues); €2,696 million in 2012, of which €2,215 million was from third parties (2.6 percent of the Group’s total revenues); €2,539 million in 2011, of which €1,927 million was from third parties (2.4 percent of the Group’s total revenues); and €2,179 million in 2010, of which €1,934 was from third parties (2.6 percent of the Group’s total revenues). The division’s gross operating margin (EBITDA) was €973 million in the six months ended June 30, 2013, €1,681 million in 2012, €1,585 million in 2011 and €1,310 million in 2010. The division’s capital expenditures on tangible and intangible assets amounted to €552 million in the six months ended June 30, 2013,€1,257 million in 2012, €1,557 million in 2011 and €1,065 million in 2010. Electricity production Net electricity production totaled 15,244 million kWh in the six months ended June 30, 2013. Net electricity production totaled 25,114 million kWh in 2012, as compared to 22,480 million kWh in 2011 and 21,834 million kWh in 2010. Electricity generation in Italy totaled 7,116 million kWh in the six months ended June 30, 2013. Electricity generation in Italy totaled 11,639 million kWh in 2012, as compared to 11,791 million kWh in 2011 and 12,187 million kWh in 2010. The following table sets forth the Renewable Energy division’s net electricity production for the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010.

Six months ended June 30, 2012 2011 2010 2013

(Millions of kWh) Hydroelectric ...... 5,995 9,836 10,097 11,070 Geothermal ...... 2,736 5,492 5,568 5,277 Wind ...... 6,103 8,985 6,142 4,926 Other resources ...... 410 801 673 561 Total ...... 15,244 25,114 22,480 21,834

– of which Italy ...... 7,116 11,639 11,791 12,187 – of which Iberian peninsula ...... 2,558 4,341 3,712 2,881 – of which France ...... 170 364 245 149 – of which Greece ...... 306 476 349 303 – of which Romania and Bulgaria ...... 535 671 199 64 – of which United States and Canada ...... 2,657 3,899 2,921 2,647 – of which Panama, Mexico, Guatemala and Costa Rica ...... 1,390 2,801 2,299 2,624 – of which Brazil and Chile ...... 512 923 964 979

As of December 31, 2012, the total net maximum electrical capacity of the Renewable Energy division was 8,001 MW, as compared to 7,079 MW in 2011 and 6,102MW in 2010. The following table sets forth the Renewable Energy division’s total net maximum electrical capacity as of December 31, 2012, 2011 and 2010.

2012 2011 2010

(MW) Hydroelectric plants ...... 2,634 2,539 2,539 Geothermal plants ...... 769 769 775 Wind plants ...... 4,316 3,541 2,654 Other resources ...... 282 230 134 Total ...... 8,001 7,079 6,102

– of which Italy ...... 3,044 2,915 2,775 – of which Iberian peninsula ...... 1,864 1,817 1,518 – of which France ...... 166 166 103 118

2012 2011 2010

(MW) – of which Greece ...... 248 191 143 – of which Romania and Bulgaria ...... 540 311 106 – of which United States and Canada ...... 1,239 1,010 788 – of which Panama, Mexico, Guatemala and Costa Rica ...... 715 484 484 – of which Brazil and Chile ...... 185 185 185

The “Other, eliminations and adjustments” segment Overview The “Other, eliminations and adjustments” segment represents residual items that include:  The Parent, which aims to create synergies within the Group and to optimize the management of services in support of the core business activities. In particular, the Parent, in its capacity as an industrial holding company, defines strategic targets for the Group and coordinates the activities of subsidiaries. In addition, the Parent manages central treasury operations and insurance risk coverage, providing assistance and guidelines on organization, personnel management and labor relations, accounting, administrative, fiscal, legal and corporate matters.  The Services and Other Activities area, which provides real estate and facilities, as well as information technology, training, human resources management, general management, factoring and insurance-related services to the various companies of the Group.  The Engineering and Research division, which manages the engineering processes related to the development and construction of power plants (conventional and nuclear) ensuring achievement of quality facilities while meeting the temporal and financial objectives set for it. In addition, it is responsible for coordinating nuclear technology operations, providing independent monitoring of the Group’s nuclear activities with regard to safety issues. Finally, it also manages research activities identified in the process of managing innovation, with a focus on strategic research and technology scouting. In Belgium, Russia and Spain, the construction of combined-cycle plants in Marcinelle, Nevinnomiskaya and Algeciras, respectively, was completed underscoring the division’s commitment to international development in support of the Group and its strategy. In Belgium, the “provisional acceptance certificate” was issued on March 29, 2012. Moreover, in Russia, the Engineering and Research division is carrying on the construction of a new dry ashes removal and storage system in the coal-fired power plants in Reftinskaya, where the Engineering and Research division is also responsible for revamping and refurbishments of the existing unit five, aiming to reduce emissions and increase efficiency.

On the innovation front, a “Group technological innovation plan” was developed, which marks the start of a new approach to managing technological innovation projects, and is aimed at ensuring the maximum effectiveness of the research activities of the Group. At Fusina, testing has begun on an experimental plant that should enable Enel to test and develop the technology for the use of hydrogen as a fuel for turbogas installations.  The Upstream Gas Function, which pursues a selective vertical integration which may increase the competitiveness, security and the flexibility of the strategic procurement to cover the gas need of Enel, which were previously reported under the Generation and Energy Management division. Within the framework of an initiative intended to vertically integrate the supply chain, it was decided in 2008 that Enel would open an office in Algiers in order to strengthen its already developed commercial relations with Sonatrach, its Algerian supplier, and to develop new business activities in the upstream gas sector (exploration and production), as well as to research possible new initiatives in the midstream gas sector, in particular with regard to liquefied natural gas. SeverEnergia, which employs about 500 people in the offices of Moscow and Novy Urengoy, is the first Russian- Italian company actively operating in the Yamal Nenets region in Western Siberia. The region currently produces the majority of Russian gas. Production started in April 2012 from the Samburgskoye field, and the parties are working together to begin production at the fields of Yaro-Yakhinskoye and Urengoiskoye. as of December 31, 2012, Enel held a participation in ServerEnergia equal to 19.6 percent of its share capital. At the end of 2012, SeverEnergia invested in exploration, drilling and the development of gas treatment plants.

 The Carbon Strategy Function, which operates in the world’s CO2 certificate markets.

119

Key data of the “Other, eliminations and adjustments” segment The “Other, eliminations and adjustments” segment recorded revenues of €909 million in the six months ended June 30, 2013, of which €33 million was from third parties, €2,017 million in 2012, of which €101 million was from third parties and €2,356 million in 2011, of which €524 million was from third parties. The area’s gross operating margin (EBITDA) was €31 million in the six months ended June 30, 2013, €97 million in 2012 and €184 million in 2011. The “Other, eliminations and adjustment” segment’s capital expenditures on tangible and intangible assets amounted to €25 million in the six months ended June 30, 2013, €163 million in 2012 and €82 million in 2011. Principal markets and competition Enel is the principal electricity company in Italy and Spain, and, according to the Group’s estimates based on data published in the financial statements of the main market operators, the Issuer estimates that it is the second largest electricity company in Europe, based on total installed capacity. The Group’s net electricity production in 2012 amounted to 295.8 TWh, of which 74.5 TWh was produced in Italy and 221.3 TWh was produced abroad. In 2012, the Group conveyed through the grid 413.9 TWh of electricity, of which 238.2 TWh in Italy and 175.7 TWh abroad. In 2012, the Group sold 8.7 billion cubic meters of gas, of which 4.3 billion cubic meters were sold in Italy, where, according to the Group’s estimates, the Group is the second largest operator, and 4.4 billion cubic meters were sold abroad. The following subsections describe the competitive position of the Group in each of the main countries in which it operates and set forth certain summary information regarding the regulatory systems in those countries. For further details, see “Regulation” herein. The Italian electricity market According to Enel’s estimates, Enel is the principal electricity producer in Italy, with 39.9 GW of installed capacity as of December 31, 2012. The main competitors are Edison S.p.A. and Eni S.p.A.

According to Enel’s estimates, energy consumption in the Italian free market in 2012 reached approximately 224.2 TWh, with network losses (including 5.8 TWh of safeguard), compared to 228.8 TWh in 2011 and 221.2 TWh in 2010. In 2012, Enel sold electricity to 4,132,802 average clients on the free market, of which 4,045,330 were mass-market clients and 87,472 were large or medium-sized business clients. Of the total volume sold on the free market, 28 TWh of electricity was sold to mass-market clients (including 2.0 TWh of safeguard) and 13.3 TWh was sold to large or medium-sized business clients in 2012; 29.6 TWh of electricity was sold to mass-market clients and 10.6 TWh was sold to large or medium-sized business clients in 2011; and 32.0 TWh of electricity was sold to mass-market clients and 13.2 TWh was sold to large or medium-sized business clients in 2010. According to Enel’s estimates, 2012 energy consumption on the regulated market amounted to approximately 71.6 TWh net of network losses. In 2012, Enel sold 60.3 TWh to 23.9 million clients on the regulated market. Enel’s share of the regulated market in 2012 was 84.0 percent. The Italian natural gas market In 2012, Enel imported 8.4 billion cubic meters of gas. In the retail market, in 2012 Enel sold 3,440 million cubic meters of gas to mass-market clients and 902 million cubic meters of gas to large and medium-sized business clients. Based on data from the MED and other sources, Enel estimates that the Group’s market share for the sale of gas in 2012 was 9.0 percent, as compared to 9.0 percent in 2011 and 11.0 percent in 2010. Iberia and Latin America In 2012, in the Iberian and Latin American markets (without including the Renewables Energy division), the Group’s net production of energy amounted to 141.4 TWh, and energy sales amounted to 162.5 TWh. Iberian Peninsula The Group’s installed capacity on Spain and Portugal amounted to 23.25 GW as of December 31, 2012. In the year then ended, its production amounted to 78.3 TWh of energy and its sales amounted to 102.8 TWh. The main operators in the Iberian electricity industry are Endesa, Iberdrola, E.On, EDP, and Gas Natural SDG. Latin America As of December 31, 2012, the Group’s installed capacity in Latin America was equal to 16.0 GW. In 2012, production amounted to 64.0 TWh and sales to final customers amounted to 59.7 TWh. Latin America has traditionally been a strategic area for growth for Endesa. 120

This region has reacted relatively well to the current economic crisis, due to the success of economic policies implemented in recent years. With respect to the electricity market, there is a need to increase generation capacity. The expectations for the development of the markets in this region, in terms of medium- and long-term growth in electricity demand and sales are sufficient to justify continued investment in the region. The relevant regulatory frameworks are generally modern, transparent and stable. As of December 31, 2012, Endesa had a total installed capacity in Argentina of 4.5 GW (29 percent hydroelectric and 71 percent thermoelectric). It held a 15 percent share of the electricity generation market in 2012. In the distribution sector, Endesa controls Edesur (Buenos Aires), a company with 2.4 million clients that distributed 17.7 TWh of energy in 2012. As of December 31, 2012, Endesa had a total installed capacity in Brazil of 1.0 GW (67 percent hydroelectric and 33 percent thermoelectric). In 2012, it held a one percent share of the electricity generation market. In the distribution sector, Endesa controls Rio de Janeiro-based Ampla Investimentos (“Ampla”), which has 2.7 million clients and Coelce, which has 3.3 million clients. Total energy distributed was 20.7 TWh in 2012. As of December 31, 2012, Endesa had a total installed capacity in Chile of 6.0 GW (58 percent hydroelectric and 41 percent thermoelectric, and the remaining part renewable). In 2012 it held a 33 percent share of the electricity generation market. In the distribution sector, Endesa controls Chilectra (Santiago de Chile), a company that has 1.7 million clients and distributed 14.4 TWh of energy in 2012. As of December 31, 2012, Endesa had a total installed capacity in Colombia of 2.9 GW (85 percent hydroelectric and 15 percent thermoelectric). In 2012, it held a 20 percent share of the electricity generation market. In the distribution sector Endesa controls Codensa (Bogotá), a company that has 2.7 million clients and distributed 13.4 TWh of energy in 2012. As of December 31, 2012, Endesa had a total installed capacity in Peru of 1.8 GW (42 percent hydroelectric and 58 percent thermoelectric). In 2012, it held a 24 percent share in the electricity generation market. In the distribution sector, Endesa controls Edelnor (Lima), a company that has 1.2 million clients and distributed 6.9 TWh of electricity in 2012. Russia As of December 31, 2012, the Group’s installed capacity in Russia amounted to approximately 9.6 GW, while its net production amounted to 44.5 TWh of energy, sales to final clients (through Rusenergosbyt) amounted to 25.6 TWh (22,7 TWh of which were sold on the free market and 2,9 TWh of which were sold on the regulated market). Slovakia As of December 31, 2012, the Group had an installed capacity in Slovakia of approximately 5.4 GW (including the Gabčíkovo Power Plant), and it produced approximately 20.5 TWh of energy in 2012. According to Enel’s estimates, Enel’s share in the generation market, through SE, amounted to 78 percent in 2012, as compared to 76 percent in 2011 and 81 percent in 2010. SE is the main Slovakian producer of electricity. Other operators in the electricity generation market are PPC Power, U.S. E.ON Elektrárne, s.r.o., Slovintegra Levice; TEKO Kosice, TP Povazska Bystrica. The production of all above mentioned power plants combined represents eight percent of Slovak production. Romania In 2012, the Group sold 9.2 TWh of electricity in Romania, out of which 87 percent was sold on the regulated market. According to Enel’s estimates, the total market share held by the Group in terms of sales of electricity in Romania was approximately 20 percent in 2012. The main operators in the electricity market are Electrica and, among foreign operators, Enel, E.On and CEZ. Enel has three separate distribution companies (Enel Distributie Banat S.A., Enel Distributie Dobrogea S.A. and Enel Distributie Muntenia S.A.) and two supply companies (Enel Energie S.A. and Enel Energie Muntenia S.A.) in Romania. Its interests in the country also extend to generation from renewable resources, and the acquisition or construction of generation plants, in general. Renewable energy markets Within the renewable energy sector, which will continue to have an important role in Enel’s future, the growth of the Group will be executed through the technologies described herein. The renewable energies confirm their trend of growth in all the technologies and geographical areas and, as in developing countries, such growth is usually associated with economic growth and does not derive solely from compliance with environmental protection regulations.

121

The model of development of the renewable energies in Enel is based on a diversified approach from both a technological and geographical perspective which is possible because of the flexibility in the allocation of investments which are approved on the basis of the profitability only. In many countries where the Group operates or is developing its activities there have been new regulations in favor of new investments including the revision of the majorities of the so-called “feed-in” tariffs (currently the most common incentive instrument) and bidding procedures for new plants, for the development of new capacities. Properties, plants and equipment The Group owns and leases a large number of office buildings and warehouse spaces throughout Italy and in the foreign countries in which it operates. The Group owns substantially all of the plants, machinery and equipment used to carry out its productive activities. At December 31, 2012, no creditors or other third parties had any significant rights over or in respect of any of the property, plants or equipment of the Group. Litigation In the ordinary course of its business the Group is subject to various civil and administrative proceedings, as well as certain arbitral and criminal proceedings. Enel records provisions in its consolidated balance sheet to cover contingent litigation-related liabilities whenever Enel’s internal and external counsel advise it that an adverse outcome is likely in a given litigation and a reasonable estimate of the amount of the loss can be made. Such provisions amounted to €1,231 million as of June 30, 2013 and €1,142 million as of December 31, 2012. For a discussion of other significant provisions for contingent liabilities (unrelated to litigation), see Note 27 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements and Note 38 to the 2012 Audited Consolidated Financial Statements. Enel does not believe that any active or pending litigation is likely to have a material adverse effect on the financial condition or results of operations of the Group. However, see “Risk Factors — Risks related to the Group — Enel is subject to a large variety of litigation and regulatory proceedings and cannot offer assurances regarding the outcomes of any particular proceedings.” The following is a discussion of relevant proceedings to which the Group is subject. Criminal proceedings relating to air pollution caused by the Porto Tolle thermoelectric plant The Court of Adria, in a ruling issued March 31, 2006 concluding criminal proceedings begun in 2005, convicted former directors and employees of Enel for a number of incidents of air pollution caused by emissions from the Porto Tolle thermoelectric plant. The decision, which was provisionally enforceable, held the defendants and Enel (as a civilly liable party) jointly liable for the payment of damages for harm to multiple parties, both natural persons and local authorities. Damages for a number of mainly private parties were set at €367,000. The calculation of the amount of damages owed to certain public entities (the regions of Veneto and Emilia Romagna, the province of Rovigo and various municipalities) was postponed to a subsequent civil trial, although a “provisional award” of approximately €2.5 million was immediately due and paid. In the criminal proceedings, an appeal was lodged against the ruling of the Court of Adria and on March 12, 2009, the Court of Appeal of Venice partially reversed the lower court decision. It found that the former directors had not committed a crime and that there was no environmental damage and therefore ordered recovery of the provisional award already paid. The prosecutors and the civil claimants lodged an appeal against the ruling with the Supreme Court (Corte di Cassazione). In a ruling on January 11, 2011, the Supreme Court (Corte di Cassazione) granted the appeal, overturning the decision of the Venice Court of Appeal, and referred the case to the civil section of the Venice Court of Appeal to rule as regards to payment of damages and the division of such damages among the prosecuted. As regards amounts paid to a number of public entities, the Issuer has already made payment under a settlement agreement reached in 2008. With a suit lodged in July 2011, the Ministry for the Environment and a number of public entities asked the Venice Court of Appeal to order Enel and Enel Produzione to pay civil damages for harm caused by the emissions from the Porto Tolle power station. The amount of damages requested for economic and environmental losses is approximately €100 million, which Enel has fully rejected. The next hearing will be held on February 18, 2015. In August 2011, the Public Prosecutor’s Office of Rovigo asked that a number of former directors, officers and employees of Enel and Enel Produzione be submitted for trial on the charge of alleged willful omission to take precautionary actions in respect of the alleged emissions from the Porto Tolle plant. At the hearing of February 7, 2012, the pre-trial hearing judge of Rovigo, granting the request of the Public Prosecutor’s Office of Rovigo, ordered the trial of all the accused for the offence of willful omission of accident prevention measures. At the hearing of September 27, 2012, the Prosecutor also added the 122 alleged charge of willfully causing a disaster. Consequently, the case was sent before the Court of Rovigo. The Ministry of the Environment, the Ministry of Health and numerous other actors, mainly local authorities (including the regional government) of Emilia Romagna and Veneto, as well as park agencies in the area, have joined the case as injured parties asking for unspecified damages. At the hearing of June 6, 2013, the parties proceeded to request for proof and examination of the witnesses, and the judge defined the calendar for witness examination. The next hearing is scheduled for September 23, 2013.

Out-of-court disputes and litigation connected with the blackout of September 28, 2003 In the wake of the blackout that occurred on September 28, 2003, numerous claims were filed against Enel Distribuzione for automatic and other indemnities for losses. These claims gave rise to substantial litigation before justices of the peace, mainly in the regions of Calabria, Campania and Basilicata, with a total of some 120,000 proceedings. Awards made in respect of these claims could be recovered in part under existing insurance policies. Most of the initial rulings by the courts found in favor of the plaintiffs, while appellate courts have nearly all found in favor of Enel Distribuzione. The Court of Cassation has also consistently ruled in favor of Enel Distribuzione. Currently, there are approximately 30,000 pending cases number due to court decisions, abandonment of suits by the plaintiffs or joinder of proceedings. In addition, in view of the rulings in Enel’s favor by both the courts of appeal and the Court of Cassation, the flow of new claims has come to a halt. During 2012, a number of actions for recovery were initiated and settlements reached to obtain repayment of amounts paid by Enel in execution of the rulings of the courts of first instance. In May 2008, Enel served its insurance company, Cattolica, a summons to ascertain its right to reimbursement of amounts paid in settlement of unfavorable rulings. The case now also involves a number of reinsurance companies in the proceedings, which have challenged Enel’s claim. At the hearing before the Court of Rome on June 6, 2013 final pleadings were submitted, and the decision is pending. Litigation concerning bill payment procedures In its Ruling No. 2507/2010 of May 3, 2010, the Council of State granted the appeal of Ruling No. 321/08 of February 13, 2008 with which the Lombardy Regional Court had voided resolution No. 66/2007. With the latter, the Authority fined Enel Distribuzione €11.7 million for violation of the provisions of resolution No. 55/2000 concerning the transparency of invoices. Enel Distribuzione lodged an appeal with the Council of State asking for it to revoke the ruling but the appeal was denied on February 24, 2011. An appeal lodged on October 29, 2010 with the European Court of Human Rights in Strasbourg is still pending. The appeal seeks a judgment against the Italian State and damages equal to the amount paid as a fine. In Enel’s view, in its ruling the Council of State adopted an interpretation of the legal concept of legality that differs from that usually adopted in the case law of the European court.

Since the end of 2006, Enel has been sued by numerous customers, especially in Campania and Calabria (with the support of a number of consumer associations), alleging violations of a number of Authority resolutions (200/1999, 55/2000 and 66/2007) concerning the requirement to provide at least one free method for paying invoices and to publicize that method in invoices themselves. In the civil suits, the customers have requested restitution of amounts paid for postal expenses and, often, further damages. At June 30, 2013, pending cases numbered about 49,000, but the number of new suits is declining, especially following the judgment of the Court of Cassation in 2011 that the rule set out in Authority resolution No. 200/1999 did not have supplementary validity for existing supply contracts, thereby finding the action for non-performance of contract advanced by customers to be unfounded, because it was based on a non-existent clause. BEG litigation Following an arbitration proceeding initiated by BEG in Italy, Enelpower obtained a ruling in its favor in 2002, which was upheld by the Court of Cassation in 2010, which entirely rejected the complaint with regard to alleged breach by Enelpower of an agreement concerning the construction of a hydroelectric power station in Albania. Subsequently, BEG, acting through its subsidiary Albania BEG Ambient, filed suit against the Issuer and Enelpower in Albania concerning the matter, obtaining a ruling, upheld by the Albanian Supreme Court of Appeal, ordering Enelpower and Enel to pay tortious damages of approximately €25 million for 2004 as well as an unspecified amount of tortious damages for subsequent years. Following the ruling, Albania BEG Ambient demanded payment of more than €430 million, a request that Enelpower and Enel rejected, vigorously contesting its legitimacy and filing a request in Albania for revocation of the ruling for conflict with the ruling of the Italian Court of Cassation.

123

As the Albanian Court of Cassation upheld the ruling of the court of first instance, the Group then filed an appeal with the European Court of Human Rights for violation of the right to a fair trial and the rule of law, asking the Court to order the Republic of Albania to pay damages for financial and non-financial losses incurred by Enel and Enelpower. As of the date of this Offering Circular, that suit is pending. In addition, in 2012, Albania BEG Ambient filed suit against Enel and Enelpower with the Tribunal de Grande Instance in Paris in order to render the ruling of the Albanian court enforceable in France. Enel and Enelpower have challenged the suit. The next hearing is scheduled for October 30, 2013. Subsequently, again at the initiative of BEG Ambient, Enel France was served with two “Saisie Conservatoire de Créances” (orders for the precautionary attachment of receivables) to conserve any receivables of Enel in respect of Enel France. Furthermore, proceedings continue in the suit lodged by Enelpower and Enel with the Court of Rome asking the Court to ascertain the liability of BEG for having evaded compliance with the arbitration ruling issued in Italy in favor of Enelpower, through the legal action taken by Albania BEG Ambient in Albania. With this action, Enelpower and Enel are asking the Court to find BEG liable and order it to pay damages in the amount that one or the other could be required to pay to Albania BEG Ambient in the event of the enforcement of the sentence issued by the Albanian courts. The next hearing is scheduled for November 26, 2013.

Dispute with Electrica On July 5, 2013, the Romanian state-controlled company Electrica S.A. notified Enel S.p.A., Enel Investment Holding, Enel Distributie Muntenia and Enel Energie Muntenia of a request for arbitration, setting out a series of demands for damages for alleged breach of contractual obligations in connection with the disposal of a controlling interest in Electrica Muntenia Sud (which was subsequently split into Enel Distributie Muntenia and Enel Energie Muntenia). Such interest was acquired by Enel in 2008 in the privatization of Electrica Muntenia Sud and other companies operating in the Romanian electricity sector. Following Enel’s acquisition of the controlling interest, Electrica retained a non-controlling interest. According to Electrica, the contractual obligations allegedly breached by Enel relate primarily to the privatization agreement as well as Enel’s conduct as the controlling shareholder.

Electrica’s demands for damages are based on its application of penalties in the amount of approximately €715 million plus interest and additional unspecified damages. The arbitration proceeding will be held in Paris and will be governed by the rules of the International Chamber of Commerce. The proceeding is currently in the initial stages, and the arbitration panel has not yet been appointed.

Violations of Legislative Decree 231/2001 The following four cases for alleged violation of Legislative Decree 231/2001 concerning the administrative liability of legal persons are pending. Three involve Enel Produzione and one involves Enel Distribuzione, for omission of accident prevention measures:  for a fatal accident involving an employee of a subcontractor at the Enel Federico II plant at Brindisi in 2008, Enel Produzione has been charged with administrative liability for manslaughter. The next hearing is scheduled for October 7, 2013;  for an accident involving an employee of a subcontractor at the Enel Federico II plant at Brindisi in 2009, Enel Produzione has been charged with administrative liability for negligent personal injury. The next hearing is scheduled for December 20, 2013;  for a fatal accident involving an employee of a subcontractor at the Enel plant at Termini Imerese in 2008, Enel Produzione has been charged with administrative liability for manslaughter. The next hearing is scheduled for September 25, 2013; and  for a fatal accident involving an employee of a subcontractor in Palermo in 2008, Enel Distribuzione has been charged with administrative liability for manslaughter. The next hearing is scheduled for October 21, 2013. Spain  In March 2009, Josel SL sued Endesa Distribución Eléctrica SL (“Endesa DE”) to withdraw from the contract for the sale of several buildings due to changes in their zoning status, requesting the restitution of approximately €85 million plus interest. Endesa DE opposed the request for withdrawal. On May 9, 2011, the court granted the request to permit withdrawal from the contract and ordered Endesa DE to repay the amounts paid for the sale plus interest and costs. Endesa appealed against the ruling. Through a decision given on February 13, 2012, the “Audiencia Provincial” (the court of second instance for civil matters) granted the appeal lodged by Endesa DE against the decision rendered in 124

the first instance by the “Juzgado de Primera Instancia” and ordered Josel SL to pay all the judicial expenses. The latter judgment was appealed by Josel SL with the Tribunal Supremo on March 19, 2012. Brazil  Tax litigation: In 1998, Ampla financed the acquisition of Coelce with the issue of $350 million in fixed rate notes subscribed by its Panamanian subsidiary, which was established to raise funds abroad. Under the special rules then in force, subject to maintaining the bond until 2006, the interest paid by Ampla to its subsidiary was not subject to withholding tax in Brazil. However, the financial crisis of 1998 forced the Panamanian company to refinance itself with its Brazilian parent, which for that purpose obtained loans from local banks. The tax authorities considered this financing to be the equivalent of the early extinguishment of the bond, with the consequent loss of entitlement to the exemption from withholding tax. On November 6, 2012, the Camara Superior de Recursos Fiscales (the highest level of administrative courts) issued a ruling against Ampla for an amount of €303 million, which the company may now appeal before the ordinary courts (tribunal de justicia). To that end, Ampla must provide security — through a “fianza bancaria” and/or a “seguro garantia” — for the tax liability increased by 20 percent or 30 percent, depending on the type of security used. In 2002, the State of Rio de Janeiro changed the deadlines for payment of the Imposto sobre Circulação de Mercadorias e Serviços (“ICMS”) by withholding agents (to the 10th, 20th and 30th of each month). Due to liquidity issues, between September 2002 and February 2005, Ampla continued to pay the lCMS in compliance with the previous system (the 5th day of the subsequent month). Despite an informal agreement, the Brazilian tax authorities issued an assessment for late payment of the ICMS (multa de demora). Ampla appealed the measure, arguing that the penalties imposed were not due owing to the application of a number of amnesties granted between 2004 and 2006 (Ley Benedicta). Following entry of the amount requested in the Public Register of the State of Rio de Janeiro, Ampla was required to provide security in the amount of €108 million in order to continue to receive public grants.  Meridional: The Brazilian construction company Meridional S/A Servicos, Empreendimentos e Participacoes (“Meridional”) held a contract for civil works with the Brazilian company CELF (owned by the State of Rio de Janeiro), which withdrew from the contract. As a consequence of the transfer of assets from CELF to Ampla Energia e Serviços (“Ampla ES”), the Brazilian construction company complained that the transfer had infringed its creditor rights in respect of CELF (deriving from the contract for civil works) and, in 1998, filed suit against Ampla ES. The Brazilian court granted the complaint and Ampla ES and the State of Rio de Janeiro filed appeals against the decision, which were granted in December 2009. Following that decision, Meridional lodged a further appeal (mandado de segurança) in June 2011. That request was denied. Subsequently, Meridional lodged a new appeal with the Superior Tribunal de Justiça, arguing that there were a number of formal errors in the ruling denying the request for the mandado de segurança. This latter appeal was granted and the proceeding continues. The amount involved in the dispute is approximately €370 million.  CIEN: In 1998, the Brazilian company CIEN signed an agreement with Tractebel for the delivery of electricity from Argentina through its Argentina-Brazil interconnection line. As a result of Argentine regulatory changes introduced as a consequence of the economic crisis in 2002, CIEN was unable to make the electricity available to Tractebel. In October 2009, Tractebel sued CIEN, which submitted its defense. CIEN cited force majeure as a result of the Argentine crisis as the main argument in its defense. As part of the dispute, Tractebel has expressed its intention to acquire 30 percent of the transmission line involved. The case is continuing. The amount involved in the dispute is estimated at approximately €40 million, plus unspecified damages. For analogous reasons in May 2010 the company Furnas also filed suit against CIEN for failure to deliver electricity, requesting payment of approximately €180 million in addition to unspecified damages. In alleging non-performance by CIEN, Furnas is also seeking to acquire ownership (in this case 70 percent) of the interconnection line. CIEN’s defense is similar to the earlier case. The evidentiary stage of the trial has been completed and the ruling at first instance is pending.

Employees June 30, 2013, the Group employed a total of 73, 537 employees, of which 36,246 were employed in Italy and 37,291 were employed abroad. The following table sets forth the location and number of the Group’s employees as of June 30, 2013 and December 31, 2012, 2011 and 2010.

125

As of As of December 31, June 30, 2013 2012 2011 2010

Employees in Italy(1) ...... 36,246 36,205 36,842 37,383 Employees outside of Italy(1) ...... 37,291 37,497 38,518 40,930

Total employees ...... 73,537 73,702 75,360 78,313

Note: (1) Employees of foreign offices of Italian Group companies are included under “Employees outside of Italy.”

The amount of the liability entered in the Group’s 2012 Audited Consolidated Financial Statements for severance indemnities and other similar obligations related to employees was equal to €4,542 million. Research and innovation activities of the Group Innovation is a key factor in responding effectively to the challenges being faced in the energy industry and in anticipating trends in technology. For Enel, innovation means transforming knowledge into value for the company and for its stakeholders, and it means generating innovative, sustainable business solutions to assist the business day-to-day and create new opportunities for the future. Innovation is also an essential part of the culture of enterprise of the Group. As such, the promotion of a culture of innovation is a top priority at all levels of the organization. Employee involvement in the process of innovation is something that Enel actively encourages through structured initiatives that promote the contribution of new ideas and which range from contests and innovation task forces to programs that take advantage of crowdsourcing techniques. In 2012, in order to generate an influx of project proposals that Enel’s innovative system then translates into new solutions and opportunities, Endesa experimented with a program for gathering ideas from employees called EIDOS MARKET. This initiative, which resulted in the collection of over 1,400 innovation ideas from employees, will also be carried out in Italy in 2013 by way of a pilot project in the Sales area. The multinational scope and cultural diversity of the Group are important sources of innovation to be taken full advantage of, including through the sharing of knowledge and experience gained in the various countries in which the Group has a presence. Finally, the generation of innovation is encouraged through actions that are aimed at creating, developing and maintaining relationships of cooperation with the leading national and international research centers and at conducting specific initiatives to support initiative and entrepreneurship, such as the Enel Lab competition for Italian and Spanish start-ups with innovative energy projects, launched in 2012, with the aim of selecting startups to join an incubator program that supports such business with capital injections and a series of services to accelerate growth. Recent research and innovation activities Technological leadership model The Group aims to be a technology leader in the industry by developing innovative projects that generate value and promote the creation of sustainable competitive advantage. In 2012, due in part to the reorganization and the move of the Innovation unit to the holding company, Enel strengthened all research and development efforts in the markets in which it operates, with a particular focus on strategy, on the definition and management of the portfolio of innovative projects, and on the dissemination of a culture of innovation throughout the Group. Through the execution of 136 projects, the Group invested €127 million in research and innovation in 2012, up from approximately €97 million in 2011 and approximately €87 million in 2010. The main results of these efforts are described below by area of business. Traditional power generation Power plant efficiency and the reduction of emissions The Group expects that in the future, traditional energy sources such as coal and natural gas will continue to play a fundamental role in satisfying the growing global demand for electricity. Increasing plant efficiency is one of the keys to improving performance in terms of both production and the environment. The main project under way is ENCIO, which seeks to promote the development of clean-coal technologies through testing in 126 advanced ultra-supercritical technologies (using steam at 700°C), which would make it possible to achieve conversion efficiency levels of greater than 50 percent and to reduce both CO2 emissions and the consumption of fossil fuels. The Group is also pursuing sustainable development through the constant improvement of its environmental profile. For this reason, over the years the Group has developed skills in forecasting, monitoring and assessing the impact that its activities have on the environment, going beyond the monitoring obligations required by current legislation. Enel research is also the one of the points of reference for science and technology concerning all issues connected with the characterization, recovery and use of thermal power waste. Furthermore, through coordination efforts at the local level, Enel is promoting the concept of the “short chain,” i.e. managing waste locally, thereby making it possible to avoid emissions generated by waste transport, with a positive impact on the local community. At Endesa, there are also several projects under way to optimize power plants. One such project is the “Laguna de enfriamiento” in Chile, which will evaluate a more efficient cooling system for thermal power plants.

CO2 capture and storage The main activities in 2012 in the area of post-combustion capture concerned the enhancement of technological know-how 3 through the Brindisi pilot plant for the capture of CO2 (completed in 2010 to process 10,000 Nm /h of emissions and separate

2.5 tons/h of CO2), developing specific experience in the design and operation of CO2 capture plants and comparing sorbents and processes. This project is currently under way. In Spain, the Group completed the start-up of the 300 kW pilot plant for post-combustion capture using amines at the

Compostilla plant, and the initial results are promising. Within the area of CO2 capture and storage using oxygenated combustion at ordinary atmospheric pressure, tests on the pilot plant at Compostilla have been completed, and analysis of the results has begun.

Regarding CO2 storage, preliminary selection and characterization efforts into areas suitable as permanent geological CO2 storage sites continues. In 2012, four exploratory wells at the Duero site and one at the Andorra-Monegrillo site were completed. At the same item, a study was completed in Italy for an off-shore storage site in the Adriatic sea.

With regard to research into the biological capture of CO2 using algae, phase one testing has been completed, and phase two testing is under way regarding optimization of the CO2 fixation process at the Litoral Microalgae pilot plant in Andalusia. Advanced automation and diagnostics Research continues on the development of advanced applications of sensors, diagnostics and automation in order to increase the reliability, safety and efficiency of the Group’s power plants and to reduce accidents during the construction, maintenance and normal operations of such plants. In particular, in 2012, work began on configuration of the safety systems at the “Brindisi dome” pilot site, and the Group completed the IT security risk assessment at three production sites. In Spain, project “Telesivi” in under way. This project uses computer visioning, robotics, self-learning and data mining to monitor plant status at all times and to report any anomalies. Renewable generation technologies

Renewable energy is one of the Group’s key strategies to reduce CO2 emissions and, at the same time, to make its generation portfolio more competitive. To that end, Enel is active in all of the leading renewable generation technologies currently being used, and the Group is identifying technologies that can help to take advantage of resources that are currently not being used.

The main activities in 2012 concerned: solar thermal, photovoltaics, wind, geothermal, biomass, hydroelectric, marine energy and hybridization. Concentrated solar power The 5 MW Archimede concentrated solar power plant built in 2010 at the Priolo Gargallo (SR) site began operations. In 2012, a trial circuit to test low-melting-point salts (80-140°C) and innovative components was also conducted in order to verify the energy performance of the technology and the reliability of the key components and to optimize the procedures for operating and managing the plant. Project ARCHETYPE, being coordinated by EGP, a project that seeks to create a 30 MW solar thermal plant, has been admitted for FP7 European financing. This project will make it possible to use the Archimede technology on an industrial scale, integrating the concentrated solar power plant with a biomass and desalination plant. In the area of small-scale plants, experimental characterization of an innovative solar thermal plant was completed at the Group’s labs in Catania. The plant uses solar radiation to generate: (i) electricity using a stirling free-piston engine; and (ii) heat to be used to produce hot water.

127

Photovoltaics Work continues at Enel’s solar lab in Catania on the indoor and outdoor characterization of a number of commercial and pre- commercial photovoltaic technologies and the validation of systems to measure the performance, reliability and true potential for large-scale applications and under a variety of operating conditions. Within the scope of the joint EGP-Sharp-STMicroelectronics research program, analysis has begun on the possible development of innovative applications of technology aimed at integrating thin-film photovoltaic panels into buildings. Wind In the area of wind power, efforts continue to refine the short and medium-term (up to 72 hours) output forecasting models of wind farms, which use computational fluid dynamics (CFD) for new wind farms without any production history and statistics-based artificial neural networks (ANN) for those that do have historical data. With regard to mini-wind farms, work began during the year for the experimental operation of the two-blade wind turbine developed with the help of the architect Renzo Piano. The main innovations of this turbine lie in its reduced environmental impact and in the techniques it uses to take advantage of low wind speeds. Geothermal power Extensive effort was put into making it possible to take advantage of low-enthalpy geothermal sources. Using binary supercritical ORC (Organic Rankine Cycle) cycles with supercritical working fluid, the project, conducted in partnership with Massachusetts Institute of Technology, among others, involved the construction by EGP of a 500 kW prototype at the Enel’s experimental area at Livorno. Compared with existing subcritical systems that primarily employ paraffinic hydrocarbons, the plant offers interesting advantages in terms of performance, which require further study before being deployed on a wider scale. New processes for increasing efficiency and reducing operations and maintenance costs of the geothermal plants, such as working on new coatings for the piping of dry-process towers, have also been developed and tested.

Biomass In 2012, a study began aimed at assessing the how well geothermal and biomass systems can be integrated. In Brazil, project Capim Elefante is under way in order to optimize the life cycle of a fast-growing grassy plant with a high level of heat potential that could be particularly suited to use in biomass plants. This project will make it possible to use lands with low agricultural value that would otherwise remain unproductive. Hydroelectric In 2012, design solutions were developed to optimize energy output by hydroelectric plants using releases to regulate the minimum essential flow. In Chile, project Intogener is under way with the goal of implementing an innovative system of forecasting outflows based on satellite measurements taken in close to real time in order to improve the management of hydraulic energy in Chile. Marine energy With the goal of exploiting renewable energy sources that are currently being underutilized, such as marine energy, Enel has conducted an initial round of studies to select the areas of greatest interest from the point of view of natural resources in both Europe and Latin America (i.e. Chile). Enel has also completed the analysis of the technologies currently being developed and begun a technology partnership for developing and testing a wave-power system in Italy with a nominal output of about 100 kW. Hybridization In 2012, efforts focused on the integration of multiple technologies. At the Stillwater facilities in the United States, a 26 MW photovoltaic plant and a 33 MW geothermal plant have been running in side-by-side since last March. This project led to EGP winning the second edition of the GEA Honors Awards sponsored by the US Geothermal Energy Association in August 2012. At the same site, a project was launched that calls for the integration of geothermal and thermal solar power by constructing a demonstration plant with an incremental capacity of 2 MW, which pre-heats the geothermal fluid with the help of solar energy.

128

Distribution networks Smart grids Enel is a leading player, both within Italy and internationally, in numerous initiatives to develop innovations in energy distribution systems in order to increase grid efficiency. The most significant project currently under way concerns “Smart Grids,” which combine innovative digital solutions with traditional technologies in order to make power grid management more flexible through more effective exchange of information. One of the most immediate applications of smart grids is the integration of renewable energy plants with the grid, which will help to achieve the environmental targets set by the European Community. In Italy, the Isernia-Carpinone project has made significant progress, and testing currently under way concerns: the management of distributed generators connected to the medium-voltage grid; testing of a medium-voltage storage device; a recharging station optimized for electric vehicles; and an extended test field for the Enel smart info terminal (a device to provide users with consumption/generation figures through their own meters) to enable demand-response applications.

Work continues on the European Address project, aimed at finding innovative solutions to enable consumers to play an active role on the energy market. Currently, the project has reached its final stages, including field testing of the active-demand programs and the validation of the models that came out of the previous stages. Furthermore, with the goal of developing an action plan for implementing Active Demand in Europe, project Advanced began in December 2012. Enel Distribuzione is the project’s coordinator, and other leading European distribution system operators (DSOs) are involved. The project uses the results and data of other projects currently under way, such as Enel Info+ in Isernia, together with other active demand projects around Europe. Enel Distribuzione is also acting as technical director of the European project Grid4EU, which began in November 2011 and is to last for four years. The goal of this project is to conduct large-scale testing under real operating conditions of advanced smart grid solutions. Forlì-Cesena, in particular, is focused on the integration of medium-voltage renewables by creating an advanced-control system. In Spain and Latin America, various projects are also under way in order to develop smart grids, including Project ICONO to develop functions to monitor distributed power generation, grid automation, and means of improving quality, efficiency, reliability and operating safety. Work is also continuing in the ECCOFLOW project aimed at developing new superconducting fault current limiters (SFCL) that ensure greater safety, reliability, efficiency and quality of the grid and facilitate the integration of renewable energies. Energy storage systems The ability to store the electricity generated using renewable resources is proving to be one of the most significant challenges in managing power at the residential or industrial level. As storage systems become more efficient, it will be possible to store the electricity generated when costs are lower and there is an abundance of renewable energy and then use that energy at a later time when it is needed. In Italy, the main projects in this field concern: the installation of a lithium-ion (1 MVA – 500 kWh) storage system in a secondary LV/MV transformer station in order to test ancillary services on the distribution network within the scope of the Isernia project; the installation of a (1 MVA to 1 MWh) storage device in the secondary switching station in the Forlì-Cesena area within the scope of the European project Grid4EU for the regulation of both voltage and power flows in order to receive distributed power and increase the hosting capacity of the grid; the acquisition of a storage system coupled with diesel engines that will make it possible to test the optimization of power generation and distribution on the island of Ventotene and which will also make it possible to run the engines at a constant load, thereby resulting in significant benefits in terms of fuel consumption and emissions. In Spain, energy storage projects include the following: the Smartcity Málaga project (lithium-ion/iron/phosphate batteries) and the STORE project (lithium-ion battery on Gran Canaria, flywheel energy storage in La Gomera, and ultra-condensers in La Palma). A feasibility study is currently under way for the construction of a compressed air energy storage (CAES) plant. Finally, efforts are continuing on the characterization of the batteries and rapid recharging stations for electric vehicles at Enel’s testing facilities in Livorno. These activities have provided Enel with strategic know-how in storage systems, which will enable the Group to identify the optimal technologies and operating algorithms to meet the various needs of power generation and energy management. End users

In order to help increase energy efficiency and meet European medium and long-term targets (2030-2050) for reducing CO2, Enel is developing innovative technologies to be made available to customers in order to optimize and rationalize energy consumption, so that the end user can play an active role through the use of digital devices that increase the transparency of 129 consumption, encourage participation in the energy market, and promote a more rational use of energy, which will then bring benefits in terms of environmental sustainability for the entire system. Energy efficiency In 2012, the Enel Info+ project began. The project will feature testing of Enel smart info for the first time on a wide scale (with some 8,000 households). This device gives customers easy access to meter data regarding their energy consumption and generation, thereby promoting greater awareness of consumption habits and the adoption of more efficient behavior. Another important project in this regard is Energy@home, a collaboration between Electrolux, Indesit Company and Telecom Italia, which has developed a platform for smart devices to communicate indoors. With this platform, it is possible to develop services that will enable home energy consumption to be regulated by more carefully controlling the use and efficiency of household appliances, thereby avoiding peak load times and power overloads and focusing energy consumption in the times of the day in which it costs less. Continuing on the theme of energy efficiency, Enel Energia, together with Enel Research, has also launched the project ComeConsumo with a sample population of customers. This project calls for the installation of a system of visualizing consumption in real time and of viewing historical consumption data. In 2012, the consumption behavior of the sample population was monitored in order to study the potential of this tool. Various energy efficiency projects are also under way in Spain and South America. One such example is the European project EnergyTic, the goal of which is to develop a number of innovative solutions to help customers save on both water and electricity. This pilot project studies the data from 1,000 households in France and 700 in Spain. Regarding the energy efficiency of residential buildings, DomusLab, a project conducted in Pisa to test home automation systems and analyze technologies that will make it possible to create and manage the homes of the future, has recently come to a close. Enel is also involved in the European project ENCOURAGE, the goal of which is to develop technologies to optimize the energy efficiency of commercial buildings by focusing on the optimal control of the subsystems within the buildings, while also providing adequate means for interacting effectively with the outside world (i.e. with other buildings, local power generators, energy retailers and distributors). Distributed power generation In February 2012, the first prototype of the Triangle-based Omni-purpose Building (TOB) was installed at Enel’s research facilities in Pisa. This system is able to provide renewable energy to people living in remote areas that are not connected to the grid. The system, which is based on an Enel design backed by an international patent, integrates photovoltaic modules and storage systems and is able to provide power to local areas for places like classrooms and medical labs for pharmaceutical refrigeration and to charge mobile phones and computers connected to the Internet. Electric mobility infrastructure The Group is strongly committed to creating a network of smart infrastructure to recharge electric vehicles, so as to promote the use of these vehicles and facilitate more sustainable mobility. In 2012, the 43 kW alternating current fast recharge infrastructure joined the garage station infrastructure for the home and the pole station infrastructure for recharging in public. This fast-recharge station was successfully tested with the new Renault Zoe, the first car to use the onboard inverter used for the drivetrain to also charge the batteries, and was able to fully charge the car in less than 30 minutes.

At the end of 2012, there were a thousand recharging stations installed in Italy and roughly 200 in Spain, all controlled by the Electric Mobility Management (EMM) system, which makes it possible to monitor all of the stations and control all recharging processes in real time. In Italy, electric mobility agreements were signed with the Region of Emilia Romagna and Roma Capitale/Acea, to provide interoperable recharging infrastructure with various networks of distributors. A public Enel recharging network was recently created in Perugia through a pilot project being watched by the Authority intended to test and evaluate various models for providing recharging services. Enel is also participating in a number of projects of international scope, including: the Green eMotion project being financed by the European Community in order to establish a framework for electric mobility in Europe; the Internet of Energy project, which will make it possible to develop a recharging station that effectively integrates all that is needed to support communication with electric vehicles in compliance with the new ISO 15118 standard; the Mobincity project, which will help to develop advanced algorithms to handle the smart recharging needed to minimize impact on the grid; and the Unplugged project, which will make it possible to evaluate the development potential of inductive (i.e. wireless) recharging. 130

Some of the most significant projects in the field of sustainable mobility in Spain include: the demonstration project ZEM2All, being developed through an international agreement between the Spanish government and a consortium of Japanese firms, in order to support the introduction of 200 electric vehicles in Malaga over the course of four years, and to gather data for marketing and analysis on the use of these vehicles; the research project Circe being conducted in Zaragoza, in order create a “smart box” that will facilitate integration of fast-recharge stations with the EMM system. In Latin America (Brazil and Chile), where the Group is seeing growing interest in sustainable mobility, Enel is promoting the technologies that have already been successfully tested in Europe. Finally, in Colombia, the Group, through the company Codensa, is promoting a project for sustainable public transport. Smart cities The innovative technologies and skills developed by the Group have enabled us to promote the concept of “smart cities” in various parts of the world, uniting environmental protection, energy efficiency and economic sustainability in a single urban model. The first pilot projects currently under way in Italy are taking place in Genoa and Bari. There, Enel Distribuzione is supporting the city councils along the path of developing into smart cities through measures aimed at implementing smart grids as an enabling technology for new services, including electric mobility, and are actively involving the public through mechanisms that increase awareness of their consumption habits. In Bari and Cosenza, Enel, together with eight other partners, is implementing the project RES NOVAE, which is being co- financed by the Ministry for Education, Universities and Research. The project, the goal of which is to create a more livable, more sustainable urban environment, has been organized into various areas of action, including: power distribution using smart grids; functions for the optimized monitoring, control and management of the energy efficiency buildings; technology to enable the active involvement of the consumer in the energy market (i.e. “active demand”); the implementation of an urban command center that will provide government, the public and the other players involved with energy-related and other information regarding the metropolitan area, which can then be used to prepare a proper energy plan based on actual data.

At the European level, Enel is partnering with the city of Genoa on the FP7 TRANSFORM project, which requires the involvement of other European cities and industrial partners. The goal of the project is to establish an optimized methodology for city energy planning that can help the city government identify areas in which to take action in order to improve the city’s energy efficiency. The Group is also conducting innovative smart-city projects in Spain (Malaga and Barcelona), Brazil (Búzios) and Chile (Santiago). In 2012, the Group completed the installation of the systems needed for the European project Smartcity Malaga and began work on Smartcity Barcelona. In Brazil in November 2012, the first smart city in Latin America, Cidade Inteligente Búzios, was officially inaugurated. Technology, innovation and sustainability are the operative words at the heart of this project, through which the Group is transforming the city of Armação dos Búzios (Rio de Janeiro) into a model of sustainable energy management. As one of the project’s first milestones, 217 smart meters were installed in the homes of customers of Ampla in May 2012. These meters will give the residents of Búzios greater awareness regarding their consumption habits, which will help them to save on their electricity bills by consuming energy when it is less expensive. In addition, Lake Usina and the city’s main streets are now lit by 60 Archilede remote-control LEDs, and the city has two recharging stations for electric vehicles, which are being managed by Ampla using the innovative EMM system developed by Enel. Ampla is already using electric bicycles for “zero- emission” visits to their customers, and the water taxi service that connects the city to its beaches is also scheduled to become sustainable. The direct involvement of the residents who will be benefitting from these new technologies is one of the cornerstones of the Cidade Inteligente Búzios project. The community is also involved in initiatives aimed at building a better future, and Ampla customers who recycle their waste receive discounts and bonuses in their electrical bills. In 2012, Cidade Inteligente Búzios received a number of prestigious international awards in recognition of the value of the project in terms of environmental sustainability and social responsibility. In July 2012, KPMG International selected the project as one of the top ten worldwide in the category “Urban Energy Infrastructure,” and in September 2012 the international conference DistribuTECH Brasil 2012 recognized Búzios as “project of the year” in the category “Small Smart Cities” for the city’s ability to unite cutting-edge technology, consumer involvement and environmental protection. Also in Latin America, in Santiago (Chile), Chile’s first prototype smart city is being created in the industrial and commercial area Ciudad Empresarial Huechuraba. The Smartcity Santiago project seeks to demonstrate the applicability of the Group’s cutting-edge technology and the tangible benefits in terms of sustainability, energy efficiency and the reduction of CO2 emissions in a business context.

131

REGULATION

The European regulatory framework European Market Infrastructure Regulation on OTC derivatives, central counterparties and trade repositories On July 27, 2012, Regulation No. 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories was published. The regulation became effective on August 16, 2012. Concerning counterparties to OTC derivatives contracts, the main provisions of the regulation concern the requirement for centralized clearing of certain classes of derivatives, the application of risk mitigation techniques for derivatives that are not subject to centralized clearing obligations and reporting of all derivatives transactions. The new rules also subject non- financial institutions to the clearing requirement and the obligation to adopt certain risk mitigation techniques only for such positions that they and the other non-financial institutions of the same group take in OTC derivatives (only those not intended to hedge commercial risks) that exceed specified thresholds (so-called clearing thresholds). A number of the European Market Infrastructure Regulation requirements came into effect starting from March 15, 2013 (the date on which the above standards came into force). These include certain risk mitigation techniques for OTC derivatives that are not subject to centralized clearing obligations and a requirement for non-financial institutions to monitor their OTC derivatives positions to ensure that they do not exceed the clearing thresholds. Additional requirements will take effect in the coming months.

Regulation on the submission and publication of data in electricity markets On June 15, 2013, European Commission Regulation No. 543/2013 on the submission and publication of data in electricity markets was published. The regulation determines the minimum set of data on generation, transportation, consumption and balancing that must be made available by electricity market participants for subsequent central collection and publication. The European Network of Transmission System Operators for Electricity will be responsible for establishing a central information transparency platform, which will aggregate and publish the data received from transmission system operators and other data providers.

Energy Efficiency Directive Directive 2012/27/EC was published in the Official Journal of the European Union on November 14, 2012 and was entered into force on December 4, 2012. The main provisions of the new Directive, which replaces earlier directives on cogeneration (2004/8/EC) and energy services (2006/32/CE) include:  a binding European Union target defined in terms of primary/final consumption as of 2020 (1,474 million tons of oil equivalent for primary consumption and 1,078 million tons of oil equivalent for final consumption) and indicative national targets established by the Member States. In 2014, the European Commission will assess the progress achieved and, if necessary, impose binding targets at the Member State level in order to achieve the European Union target; and  an energy savings obligation for electricity and gas sales and distribution companies of 15% of annual energy sales in the period 2010 to 2012, which may be reduced at the Member State level by a maximum of 25% through flexibility measures, such as:  phasing in the obligation over a longer period of time (annual reductions of 1% in 2014-2015, 1.25% in 2015- 2016 and 1.5% in 2018-2020), producing lower overall savings than originally envisaged;

 exemption of energy sold to industrial consumers subject to the European Union Emissions Trading System (“EU ETS”) from the calculation;  counting energy savings already achieved that will continue to have an impact in 2020; or  allowing energy savings achieved in the energy transformation, transmission and distribution sectors.  achieving the target through alternative measures producing equivalent savings in final consumption at the discretion of the Member States; and  an obligation to renovate government buildings. Member States must implement the provision of the Directive at the national level by June 5, 2014.

132

Emissions trading Since 2005, the Group’s installations in Europe have been required to participate in the EU ETS, a market-based system for reducing greenhouse gas emissions. Operators are expected to reduce their emissions by 21% by 2020 (compared with 2005 levels). On January 1, 2013, the third phase of implementation, to take place between 2013 and 2020, began. This phase envisages a series of major changes introduced by Directive 2009/29/EC and subsequent regulations in order to improve the efficiency, transparency and effectiveness of the system. The main change regards the method for allocating emissions allowances. The free allocation of allowances will gradually be replaced by an auction system. The power generation sector will be required to purchase 100% of its allowances through auctions as from January 2020. During the final months of 2012, 120 million phase three allowances were sold through “early auctions.” The allowances pertaining to Italy, Spain and Slovakia represent 9.4%, 8.4% and 1.5%, respectively, of the total allowances available at the European level for all of phase three. The proceeds of the auctions are managed by the Member States, who must however use at least 50% of the revenues to finance projects involving low carbon technologies

(CO2 capture and storage, renewable resources, etc.). Another major innovation is the monetization of the allowances in the NER 300 reserve by the EIB, the proceeds of which will be used to finance pilot projects in the innovative renewable resources field and in CO2 capture and storage technologies. The allowances (300 million EUAs) will be sold on the OTC market, regulated exchanges and through auctions. The sale of the first 200 million allowances was completed in November 2012. The remaining 100 million will be monetized subsequently by the EIB. Since January 1, 2012, the aviation industry has been included in the EU ETS. Considering the volume of allowances that airlines will be required to purchase through auctions (15%), it is expected that the sector’s contribution to supporting demand for allowances on the market will be second only to the power generation industry. In response to a lawsuit filed by a number of U.S. airlines, in December 2011 the European Court of Justice found that the inclusion of non-EU airlines in the EU ETS was legal, as it is consistent with international law and the principle of state sovereignty. In 2012, a single European Union registry replaced the national registers in accounting for emissions allowances. Aircraft operators have been taking part in the new registry starting from January 2012 (in conjunction with the industry’s inclusion in the EU ETS), while the transition for other sectors subject to EU ETS took place in 2012. The transition to the new single European Union registry has been accompanied by a number of measures to enhance the security and transparency of the European emissions allowance market.

In response to the excess supply of allowances on the EU ETS market, the European Commission decided to postpone the sale of a portion of allowances to be auctioned to the end of the third phase in order to reduce short-term supply (the back- loading) option. The European Parliament and Council were asked to amend the EU ETS Directive to formally enable the Commission to take such a step. On April 16, 2013, the European Parliament, meeting in plenary session, rejected the proposed amendment that would have authorized back-loading, referring it to the Enviroment Committee. On July 3, 2013, the European Parliament approved the proposed amendment authorizing back-loading and asked the trilogue to begin negotiations for a shared text with the Council. Once the amendment of the EU ETS Directive is completed, the Commission may adopt the back-loading proposal through its committee procedures. Discussions are also under way to revise the structure of the EU ETS system. The inclusion of international flights under the EU ETS has been temporarily suspended pending the meeting of the International Civil Aviation Organization general assembly to discuss the possibility of a global solution for reducing emissions in the aviation sector.

Decisions concerning the Industrial Emissions Directive As part of the process of implementing the Industrial Emissions Directive (Directive 2010/75/EU), the European Commission has adopted two decisions. The first, issued on February 10, 2012, sets out the rules governing the preparation and implementation by the Member States of their national transition plans: plants covered by the plan may bring their emissions into compliance with the limits set by the Directive gradually over the period from January 1, 2016 to June 30, 2020. The second, issued on May 7, 2012, defines the start-up and shut-down periods for plants, which are necessary to assess compliance with emissions limits correctly. Seveso III On July 4, 2012, the European Parliament and the Council adopted the Seveso III Directive on the control of major-accident hazards involving dangerous substances with a view to aligning the list of substances covered by the Directive with the changes in the European classification system for dangerous substances, strengthening the provisions concerning public access to safety information and introducing more stringent rules for inspections of plants as from June 2015. The Italian regulatory framework The current structure of the Italian electricity market is the result of the liberalization process begun in 1992 with Directive 1992/96/EC, transposed into Italian law with Legislative Decree 79/1999. This decree provided for: the liberalization of 133 electricity generation and sale; reserving transmission and ancillary services to an independent network operator; the granting of concessions for distribution to Enel and other companies run by local governments; and the unbundling of network services from other activities. The introduction of Directives 2003/54/EC and 2009/72/EC (transposed with Law 125/2007 and Legislative Decree 93/2011, respectively) in Italy accelerated the liberalization process, particularly through the complete opening of the retail market and the confirmation of the full independence of the national transmission network operator (already provided for in the decree of the Prime Minister of May 11, 2004) by separating its ownership from that of other electricity operators. The process of liberalizing the natural gas market began with Directive 1998/30/EC, transposed in Italy through Legislative Decree 164/2000, calling for the liberalization of the import, production and sale of gas and the separation of network infrastructure management from other activities through the establishment of distinct companies. As regards the unbundling model provided for under Directive 2009/73/EC, which was implemented in Italy by Legislative Decree 93/2011, Law Decree 1/12 converted into Law 27/2012 established a transition to separation of ownership to be completed by September 2013. Sales division Electricity

Wholesale market With Resolution No. 231/2013,the Authority introduced, with effect as from April 1, 2014, a remuneration mechanism for the primary frequency regulation service performed by schedulable plants with a capacity of more than 10 MVA. The resolution sets out the criteria for remunerating the service, as well as the procedures for measuring and controlling the effective contribution of the plants.

Retail market As provided for by Directive 2003/54/EC, starting from July 1, 2007 all end users may freely choose their electricity supplier on the free market or participate in regulated markets. Law 125/2007 identified these regulated markets as the “enhanced protection” market (for residential customers and small businesses with low-voltage connections) and the “safeguard services” market (for large customers not eligible for enhanced protection services). Free-market operators are awarded contracts to provide safeguard services on a geographical basis through three-year auctions. Enel Energia was awarded contracts to provide safeguard services to five of the twelve areas subject to auction for the 2011-2013 period (Umbria and Marche, Sardinia, Campania, Basilicata and Calabria, Sicily). By contrast, enhanced protection service is provided by sellers connected with distributors (Enel Servizio Elettrico for customers connected to Enel Distribuzione’s network). The prices and related terms are set by the Authority and are updated quarterly based on criteria designed to ensure that the operators’ costs are covered. Operators set their own prices for free market services, with the Authority’s role limited to setting rules to protect both customers and operators. In this role, the Authority has adopted a number of measures aimed at containing operators’ credit risk, which has risen considerably in recent years due to the economic crisis and the lack of rules barring customers from switching suppliers to avoid paying their utility bills. On March 14, 2013, the Regional Administrative Court of Lombardy struck down the rules for the Indemnity System introduced by the Authority aimed at limiting the ability of customers to switch suppliers to avoid paying their utility bills. Following an appeal by the Authority, on July 9, 2013, the Council of State suspended the judgment of the Regional Administrative Court and set a hearing for February 4, 2014 to address the issue.

Gas Retail market Legislative Decree 164/2000 established that as from January 1, 2003, all customers may freely choose their natural gas supplier on the free market. However, pursuant to Legislative Decree 69/2013, which modifies Legislative Decree 164/2000, operators must also offer a safeguard service to residential customers with consumption levels below 200,000 cubic meters a year. If there is no company supplying this service, the supplier of last resort must provide service to safeguard customers. The supplier of last resort is chosen annually through voluntary tenders for geographically-based contracts. As to the regulated prices charged to safeguard service customers, in the second quarter of 2013, the Authority increased the relative weight of the spot index in the formula for determining the QE component (covering raw material costs) by reducing the component value for the average residential customer by about 2.7 eurocents/m3. This change was the main reason for the first drop in gas prices for end users in three years. 134

With Resolution 196/2013/R/gas, the Authority also approved reforms to the consumer safeguards, which will take effect on October 1, 2013. The primary reforms are:  100% spot indexation of the QE component, which is currently primarily linked to oil quotations;  increase in the QVD component (covering retail marketing costs) to account for commercial and arrearage costs; and  introduction of new components for all retailers to cover the costs of new supply strategies. Also with regard to the raw material cost component, on March 13, 2013, the Regional Administrative Court of Lombardy, in the course of an action brought by A2A, nullified (applicable to all operators) the resolutions by which the Authority changed the formula for determining (and thereby reducing) the QE component for the 2010/2011 and 2011/2012 gas years. Generation and energy management Electricity Generation and the wholesale market Electricity generation was completely liberalized in 1999 with Legislative Decree 79/1999 (Bersani Decree) and can be performed by anyone possessing a specific permit. The electricity generated can be sold wholesale on the organized spot market (IPEX), managed by the EMO, and through organized and over-the-counter platforms for trading forward contracts. The organized platforms include the Forward Electricity Market (FEM), managed by the EMO, in which forward electricity contracts with physical delivery are traded, and the Electricity Derivatives Market (IDEX), managed by Borsa Italiana, where special derivative instruments with electricity as the underlying asset are traded. Generators may also sell electricity to companies engaged in energy trading, to wholesalers that buy electricity for resale at retail, and to the Single Buyer, whose duty is to ensure the supply of energy to enhanced protection service customers. In addition, for the purpose of providing dispatching services, which is the efficient management of the flow of electricity on the grid to ensure that deliveries and withdrawals are balanced, electricity generated may be sold on a dedicated market, the Ancillary Services Market (ASM), where Terna procures the required resources from producers. The Authority and the Ministry for Economic Development are responsible for regulating the electricity market. More specifically, with regard to dispatching services, the Authority has adopted a number of measures regulating plants essential to the security of the electricity sector. These plants are deemed essential based on their geographical location, their technical features and their importance to the solution of certain critical grid issues by Terna. In exchange for being required to have electricity available and providing binding offers, these plants receive special remuneration determined by the Authority. Since the launch of the market in 2004, the regulations have provided for a form of administered compensation for generation capacity. In particular, plants that make their capacity available for certain periods of the year when demand is typically high receive a special fee. In August 2011, the Authority published a resolution that establishes the criteria for introducing a market mechanism for compensating generation capacity that replaces the current administered reimbursement. This mechanism involves holding auctions through which Terna will purchase from generators the capacity required to ensure that the electricity system is adequately supplied in the coming years. The initial auctions will be held in 2013, with producers agreeing to make their capacity available starting from 2017. In order to cope with emergencies in the gas system, such as the one that occurred between February 6, 2012 and February 16, 2012, Decree Law 83/2012, ratified with Law 134 of August 7, 2012, required the identification on an annual basis as from the 2012-2013 gas year of thermal generation plants that can contribute to the security of the system by using fuels other than gas. Such plants, which are different from those essential to the electricity sector, are entitled to reimbursement of the costs incurred in ensuring availability in the period from January 1 to March 31 of each gas year on the basis of the procedures established by the Authority. Gas Wholesale market The extraction, import (from European Union countries) and export of natural gas have been liberalized. According to the provisions of Legislative Decree 130/2010, operators cannot hold a market share that exceeds 40% of domestic consumption. This limit may be raised to 55% if the operator commits to creating four billion cubic meters in new storage capacity by 2015. Under this provision, the Ministry for Economic Development approved Eni S.p.A.’s proposed plan to create new storage in early 2011.

135

Beginning in April 2012, the Authority, following the start of daily auctions for the release of contracted but unused capacity on the TAG (the gas interconnector between Austria and Italy through the Tarvisio entry point), introduced mechanisms to encourage the transit of spot gas through the entry point. In October 2012, in compliance with Legislative Decree 93/2011 the EMO formulated a proposed design for the natural gas forward market. Once it begins operating, the forward market will complete the structure of the Italian wholesale gas market, supplementing the spot trading platform, which has been operational since 2010, and the balancing market launched in December 2011 in accordance with the rules established by the Authority.

Following the approval of the Parliamentary committee and the positive opinion of the Authority, on March 6, 2013, the ministerial decree approving the rules for the natural gas forward market was signed. The Ministry for Economic Development, with a decree of August 9, 2013, established September 2, 2013 as the starting date for the forward market.

On April 19, 2013, the Regional Administrative Court of Lombardy voided the measures concerning the setting of gas transport rates for 2010 and 2011. The Authority has appealed the ruling. Transport, storage and regasification Transport, storage and regasification of liquid natural gas are subject to regulation by the Authority, which sets the rates for engaging in these activities at the start of each regulatory period (lasting four years) and updates them annually over the same period using established mechanisms. Storage is carried out under a concession (for a maximum of 20 years) issued by the Ministry for Economic Development to applicants that satisfy the requirements of Legislative Decree 164/2000. Liquid natural gas activities are subject to the grant of a special ministerial permit. Infrastructure and Networks division Electricity Distribution and metering Enel Distribuzione provides distribution and metering within the Infrastructure and Networks division under a 30-year concession set to expire in 2030. The distribution rates are set by the Authority at the start of each regulatory period (lasting four years) in order to cover the total cost of providing distribution and metering services (including operating costs and depreciation) and provide an appropriate return on capital. The rate component covering operating costs is updated annually using a price-cap mechanism (based on the inflation rate and an annual rate of reduction of unit costs called the X-factor). The return-on-capital and depreciation components are revised each year to take account of new investments, depreciation and the revaluation of existing assets using the deflator for gross fixed capital formation. The fourth regulatory period (2012-2015), began on January 1, 2012. The Authority set a return-on-capital for distribution and metering activities for the period at 7.6% for investments made through the end of 2011 and 8.6% for investments made starting in 2012. Further increases of the weighted average cost of capital (between 1.5% and 2%) are also envisaged for certain categories of investments (for example, medium-voltage lines in historical town centers, connection in areas with a high density of renewables generation). The X-factor used in updating the operating costs component is 2.8% for distribution and 7.1% for metering. The return-on-capital for 2014 and 2015 will be updated based on the average value of Italian treasury bonds from November 2012 through October 2013. Electricity distribution is also subject to service quality rules, under which the Authority establishes the annual trend levels for the following service continuity indicators for customers connected to low-voltage service:  duration of long service interruptions; and  number of long and short interruptions. Each year distributors receive bonuses or penalties depending on whether their actual performance as determined using these efficiency indicators is better or worse than the established trend values. With Resolution no. 122/13, the Authority published the reference tariffs for distribution and sales activities for 2013 and updated the tariffs for 2012 to be used in determining, for each operator, the level of revenues to be recognized to cover grid infrastructure costs. The new reference tariffs are set in a manner that ensures the operator will be neutral with respect to unexpected changes in the volumes of power distributed.

136

Energy efficiency White certificates Consumer energy efficiency has been promoted in Italy through the EEC mechanism launched on January 1, 2005 in accordance with the provisions of the related decrees of July 20, 2004. Those decrees, which were subsequently amended and updated in 2007, set national energy savings targets for the period 2005-2012. The targets must be achieved each year by distribution companies. To demonstrate that they have achieved their targets and avoid penalties, distributors must deliver a number of certificates at least equal to a specified percentage of their requirement to the Authority by May 31 of each year. The Authority covers part of the costs incurred to achieve the target through a rate subsidy that in 2012 was equal to €86.98 per toe for each certificate delivered. Through its decree of December 28, 2012, the Ministry for Economic Development set new and rising energy savings targets for the 2013-2016 period. In addition, for the 2013-2014 period only the minimum percentage achievement obligation has been reduced from 60% to 50%. The Ministry established that the residual obligation can be covered over the subsequent two years (rather than in the following year, as provided for under the previous decrees). The decree also remodulated the criteria that the Authority must apply in determining the rate subsidy. Thermal Energy Account Through its decree of December 28, 2012, implementing Legislative Decree 28/2011, the Ministry for Economic Development introduced specific incentives to promote the production of thermal energy from renewable resources, as well as small scale energy efficiency initiatives. The incentives, for which both government entities and private parties are eligible, are paid by the ESO in equal annual installments for a maximum of five years. Eligible projects include improvements to the building envelope (government entities only) as well as the installation of heat pumps, thermal solar collectors and electric heat pump water heaters. Access to the incentives requires meeting certain minimum requirements, broken down by type of intervention. The decree also charges the Authority with specifying rates for the use of electric heat pumps with a view to encouraging energy efficiency and the reduction of polluting emissions. Iberia and Latin America division Spain General information The Spanish electricity system is mainly governed by Law 54/1997, which was amended by Law 17/2007 and Royal Decree Law 13/2012, among other laws, which transposed the provisions associated with the European Union’s “Third Energy Package.” The regulatory framework guidelines are as follows:  electricity generation is conducted under free market conditions;  transport, distribution and technical and financial operations are regulated activities;  final markets were entirely liberalized starting from July 1, 2009, but consumers that satisfy certain conditions may opt to be served by CURs (Comercializadores de Ultimo Recurso), which apply the TUR, the last-resort rate set by the government, taking into consideration the cost of electricity prices based on forward markets;

 connection fees are uniform across the country and are received by distributors who perform this service on behalf of the electricity system. Wholesale market Most sales of electricity by generation companies are conducted through the bidding system managed by the market operator, OMEL (Operador del Mercado Eléctrico), which was formed in December 1997, since it operates the wholesale market, MIBEL (Mercado Ibérico de Electricidad), that covers the entire Iberian peninsula (Spain and Portugal). Integration of the Spanish and Portuguese markets was completed in July 2007 with a market-splitting mechanism where the interconnection is operated jointly. The hourly rate corresponds to the marginal price from the intersection of the supply and demand curves. The volumes of energy sold through bilateral contracts are not used in calculating the price, although they must still be reported to OMEL. REE (Red Eléctrica de España) is the system operator and is responsible for the technical management and monitoring of the transmission network.

137

National coal subsidy (intervention in the operation of the wholesale market) In September 2010, the European Commission granted the Spanish government’s request to subsidize the use of domestic coal by power plants. In February 2011, a Ministerial Order was published establishing the main parameters for application of this mechanism, which should terminate on December 31, 2014. The total volume of electricity generated from this resource between 2011 and 2014 was not to exceed 23.4 TWh per year. Nevertheless, Royal Decree Law 13/2012 reduced, on an exceptional basis for 2012 only, the maximum volume of programmable generated with domestic coal by 10%. Capacity payment The capacity payment mechanism, whose remuneration adds to that for activities carried out in the wholesale market, is divided into three parts;  reimbursement for investments in plants in service from January 1998;  reimbursement for investments in improving the environment (installation of desulphurization technologies and other devices for reducing the environmental impact of coal plants); and  reimbursement for capacity availability. For 2012, as a consequence of the exceptional reduction introduced with Royal Decree Law 13/2012, the amount of investment compensated for the first category is equal to €23,400/MW; for the second, €7,875/MW; for the third and final category, €5, 150/MW per year for CCGT, coal and gas-fueled plants and reservoir-based hydroelectric plants and pumping plants that meet certain criteria on availability. The latter value is multiplied by availability coefficients based on the technology employed. The cost of the capacity payments is covered by a rate component set periodically by the government and imposed on all end users. Retail market; TUR and the social bonus All end users have formally been participants in the free market since July 1, 2009. However, consumers with a contractual committed capacity of 10 kW or less are entitled to be charged the rate of TUR, which is established and regulated by the government. Under the provisions of Royal Decree 485/2009, published in April 2009, the Ministry sets the TUR to be charged by suppliers of last resort. The Royal Decree also identifies the five companies, including Endesa, with sufficient resources to act as the supplier of last resort (the other four are Iberdrola, Unión Fenosa, Hidrocantábrico and E.ON). Royal Decree Law 6/2009 also introduced a social measure (the social bonus), available starting from July 1, 2009 to all customers who meet certain income conditions set out in the decree. The social bonus is equal to the difference between the TUR and the Tarifa Reducida. The social bonus is applied to customer bills by the sales companies and the related cost is borne by the generation companies based on a percentage set by the government. On February 7, 2012, the Tribunal Supremo ruled that the cost of the social bonus should not be borne by electricity companies. In applying the court’s decision, ministerial order IET/843/2012, issued on April 25, 2012, modified the settlement system and determined that the mechanism would be financed through the access rates. Regulated costs, access rates and tariff deficit Under the current regulatory system, the main “regulated costs” of the Spanish electricity system pertain to remuneration for transport and distribution networks, financial resources for the authorities that manage the system (regulator, market operator, etc.), extra costs arising from extra-peninsular generation, subsidies for the special regime (régimen especial, renewable resources, electricity generation from waste and cogeneration) and the energy savings and efficiency plan. In order to cover these costs, all customers pay an access rate set by the government annually (it may be adjusted quarterly to take account of changing market conditions). Royal Decree 1544/2011, published in November 2011, also requires producers to pay an access rate for energy delivered into the system of €0.5/MWh (in addition to paying for energy delivered, pumping plants pay equally for the 30% of electricity consumed). At present, access rate receipts do not cover actual regulated system costs. This situation creates a tariff deficit. Royal Decree Law 6/2009 set out a solution for reducing the annual deficit, with the goal of completely eliminating it by 2013, through the introduction of annual caps. In 2010, since the access rate levels approved continued to not reflect the actual cost of regulated activities, Royal Decree Law 14/2010 introduced a new deficit reduction path with the following limits: €5.5 billion for 2010, €3 billion for 2011 and €1.5 billion for 2012. On December 31, 2012, with Royal Decree Law 29/2012, the government eliminated the cap for 2012 (permitting the securitization of the entire deficit that will result) and the explicit reference to the “cost reflectivity” of rates as from January 1, 2013 (i.e., the adequacy of the access rates to cover “regulated costs”). The cumulative deficit at December 31, 2011 reached €29.8 billion, and it is estimated that it exceeded €35 billion at December 31, 2012. 138

The deficit is divided among five electric companies: Endesa, Iberdrola and Gas Natural Fenosa (responsible for 93% of the total), as well as Hidroeléctrica del Cantábrico and E.ON. Royal Decree Law 6/2009 established a new financing mechanism through which electric companies may sell their receivables to FADE (Fondo de Amortización del Déficit Eléctrico), the deficit amortization fund, which places them on the debt market. In January 2011, FADE was formed with the support of the government. The initial amount of the receivables transferred to FADE by the electricity companies was €16.7 billion. Although the initial agreement required that the amount transferred be securitized by July 2011, due to the sovereign debt crisis this stabilization was postponed to July 2012. On December 1, 2011 and February 19, 2012, Endesa notified FADE of its irrevocable commitment to assign its receivables in respect of the 2010, 2011 and 2012 deficits. A number of issues were carried out, of which a total of €2.7 billion for Endesa in 2012 and €1.8 billion in the six months eneded June 30, 2013.

The extra-peninsular electricity system Article 12 of Law 54/1997 subjects the supply of electricity to extra-peninsular regions (the Balearic and Canary Islands) to common regulation based on the specific characteristics of their geographical location. This special regulation was established by Royal Decree 1747/2003 and the Ministerial Order of March 30, 2006, which created the implementing mechanisms. The main feature of the extra-peninsular regulatory system is that electricity generation is subject to regulated prices, unlike on the Iberian peninsula. Other activities (distribution, transport and sale) are basically regulated in substantially the same way as they are on the Iberian peninsula. This remuneration was set so as to cover the costs of the activity and provide a return on capital employed. In order to receive the comprehensive rate, generation companies receive an indemnity corresponding to the difference between the two values, in addition to the market price for electricity sold. Indemnities accrued at December 31, 2008 and not yet received will be financed by the revenues of the electricity system, while they are scheduled to become an item in the Spanish budget starting from 2013. During the transitional period (2009- 2013), Royal Decree Law 6/2009 established a hybrid system under which extra-peninsular generation is financed by gradually increasing the portion covered by the general Spanish budget and decreasing that borne by the electricity system. Distribution Royal Decree 222/2008, published in February 2008, establishes the policies for remunerating distribution activities to ensure adequate service, offering incentives to improve service quality and reduce losses. Each year, the Ministry sets the remuneration to be paid based on a proposal of the Comisión Nacional de la Energía. The remuneration is adjusted annually by comparing the investments made with the Modelo de Red de Referencia, a technical reference tool that calculates the grid’s ideal development. Royal Decree Law 13/2012 reduced the remuneration of distribution for 2012 and called for a reformulation of the system, the definition and approval of which is still pending. Royal Decree Law 13/2012 On March 30, 2012, the Council of Ministers approved Royal Decree Law 13/2012, which in addition to transposing the European measures of the “Third Energy Package” also introduces measures to reduce the costs of the electricity and gas system and handle the tariff deficit. The decree established a set of measures to ensure compliance with the deficit cap established for 2012 (Royal Decree Law 6/2010 and No. 14/2010) and the adjustment of rates to reflect the costs of regulated activities as from January 1, 2013. Among the main changes for 2012, the decree set out reductions for the following regulatory items: the remuneration of electricity distribution; the capacity payment system; and the remuneration of extra- peninsular generation. It also reduced the maximum volume of schedulable electricity generated from domestic coal, and thus the corresponding extra cost for the system, by 10%. Finally, compensation for interruptible contracts was also lowered. Royal Decree Law 20/2012 On July 14, 2012, Royal Decree Law 20/2012 was published. With the decree, the government adopted a series of measures to ensure budget stability and promote competitiveness, as well as measures to reduce the costs of the electricity sector and resolve the tariff deficit issue. The main measures regarded: the revision of remuneration for generation in the extra- peninsular electricity sector (SEIE); a requirement to include any local taxes on electricity supply in access rates and the TUR; an increase of 65 basis points in the interest rate paid for financing the deficit generated in 2006; the abolition of the quarterly revision of access rates; the granting of powers to the Minister for Industry and Energy to introduce progressivity in the application of access rates and the TUR.

139

Law 15/2012 containing fiscal measures for the sustainability of the electricity sector On September 14, 2012, the Spanish government approved a bill aimed at ensuring the sustainability of the electricity sector and at addressing the problem of the tariff deficit. Parliament approved the measure in December and it was published in the Official Journal on December 28, 2012. The law contains fiscal measures designed to generate supplementary revenues and reduce the existing deficit, as well as measures to make the system economically and environmentally sustainable. The main provisions, which came into force on January 1, 2013, are the following:  as regards nuclear technology, the introduction of a tax on generation and on the storage of fuel and residual by- products of nuclear power generation, which increases the costs that generators will have to face at the time the plant is closed and decommissioning begins;  the introduction of a fee for using continental waters in hydroelectric generation equal to 22% of the revenues generated. The fee is reduced by 90% for plants with a capacity equal to or less than 50 MW and for pumping plants with a capacity of more than 50 MW;  the introduction of environmental taxes (“céntimo verde”) on the consumption of natural gas, coal, fuel oil and diesel fuel;  the introduction of a general tax on electricity generated under the ordinary and special regimes equal to 7% of total revenues;  the interruption of incentives for renewable energy generation using fossil fuels, with the exception of biomass;

 the allocation of the revenues from the CO2 auctions for phase three of the EU ETS, up to a maximum of €500 million, to financing the costs of the electricity system;  the appropriation of a portion of the Spanish budget equivalent to the estimated revenues generated by the fiscal measures established in the law to financing the costs of the electricity system. Measures concerning the tariff deficit — Royal Decree Law 29/2012 Royal Decree Law 29/2012 of December 28, 2012 concerning improvements to the management of and the social protection in the special system for domestic workers and other economic and social measures also adopts the following provisions concerning the electricity system:  the elimination of the deficit cap for 2012, which had previously been set at €1,500 million;  the repeal of the provision of Law 54/1997 requiring the cost reflectivity of access as from 2013;  the introduction of the possibility of suspending the incentive system for plants that do not comply with the established limits and the conditions set out in the executive design. Budget law for 2013 — Law 17/2012 As regards the regulation of the electrical sector, the budget law for 2013 excludes the financing of the costs of the extra- peninsular electricity systems (which in conformity with Decree Law 6/2009 will transition to a system for the settlement of regulated activities on market terms) and includes an account deriving from Law 15/2012 intended to finance the costs of the electricity system (revenues from tax measures and 90% of the proceeds of auctions of emissions allowances).

Urgent measures for the electrical sector — Royal Decree Law 2/2013 On February 1, 2013, in order to get the deficit to zero in 2013, the government adopted Royal Decree Law 2/2013 containing further measures for the electrical sector. The main provisions are the following:  the modification of the inflation adjustment index for electricity system costs, which will now be based on core inflation;  the elimination of the option of choosing between the regulated tariff and the feed-in-premium mechanism for plants under the special regime, whose remuneration will now be limited to the regulated tariff system. In any case, producers can choose to receive the market price (without any premium). In addition, the Council of Ministers has drafted a bill for the granting of a special loan of €2,200 million by the Ministry for the Economy to the Ministry for Industry and Energy to finance part of the cost of financing the special regime for 2013.

140

Bill on the security of supply and the promotion of competition in extra-peninsular electricity systems On March 15, 2013, the Council of Ministers approved the submission to Parliament of a bill containing a variety of measures for promoting security of supply and competition. The main features of the bill are: promotion of more efficient generation capacity: new plants may be admitted to the remuneration regime for the extra- peninsular electricity system (SEIE) for reasons of procurement efficiency and security, a status previously limited to cases where the demand coverage index was not satisfied;  promotion of the entry of new operators: operators that hold more than 40% of the installed capacity will not be able to benefit from the SEIE remuneration system or from incentives for new plants (with the exception of renewable power plants that have successfully passed through the competitive process, that hold the license or are recorded in the pre-assignment registry);  ownership of pumping stations and regasification plants: ownership of these assets shall pass to system operators in six months at market prices;  new remuneration mechanisms for new plants: the remuneration for generation will be established by the competent Ministry in order to reduce generation costs and to provide financial signals to impact plant location to reduce congestion;  modifying the calculation mechanism for fuel costs: the cost will be calculated on a competitive basis in accordance with the criteria of transparency, objectivity and non-discrimination;  oversight by the competent Ministry and the System Operator: the Direccion General de Politica energética y Minas (DGPE) may reduce the remuneration due to operators if it should find a substantial reduction in plant availability or in the plant quality index. The bill will be examined by Parliament before final approval.

Law establishing the Comisión Nacional de los Mercados y la Competencia (CNMC) Law 3/2013 reforms the architecture of the supervisory and regulatory bodies, centralizing functions with a new agency, the CNMC, which has the authority and power to oversee and regulate the electricity and natural gas sectors in Spain and incorporates the functions of a number of entities, including the Comisión Nacional de la Competencia and the Comisión Nacional de la Energía . The CNMC will have both general functions, such as safeguarding and fostering competition, and more specific duties in certain sectors and regulated markets. With regard to the energy industry, the CNMC will exercise supervisory and control functions over the electricity and natural gas segments, while other functions, such as settlement operations in the electricity sector, have been transferred to the Ministry of Energy. The CNMC shall become operational within four months of the entry into force of the law.

Royal Decree Law 9/2013 and Energy Reform On July 12, 2013, the Spanish government issued Royal Decree Law 9/2013, which was published in the Boletin Oficial del Estado on July 13, 2013 and approved by Parliament on July 17, 2013 and contains urgent measures to ensure the financial stability of the electricity system in Spain. The main changes introduced by Royal Decree Law 9/2013 consist of:  the modification of the remuneration regime for transport and distribution. For the latter, the remuneration regime for the six months ended June 30, 2013 has been finalized, and transitional arrangements have been introduced for the last six months of 2013 and for 2014 based on a methodology that provides for an implicit regulatory asset base and a rate of return equal to the average yield on 10-year Spanish government bonds registered during the three months preceding the entry into force of the decree, increased by 100 and 200 basis points, respectively, for the last six months of 2013 and for 2014;  the reduction of the remuneration of investment in capacity (capacity payments), which has been cut from €26,000/MW to €10,000/MW per year, with a doubling of the remaining period for receiving the benefit. In addition, the incentive has been eliminated for plants entering service after January 1, 2016;  financing the social bonus by the parent of company groups or companies which carry out energy generation, distribution and supply activities simultaneously, in proportion to the sum of the number of supply points connected to the distribution networks and customers supplied by supply companies. The CNMC will announce the allocation, in percentage terms, of the cost for financing the social bonus, which will be covered by access charges until such allocation is made;  the redefinition of the share of extra costs of operations in the Iberian extra-peninsular and peninsular systems, of which 50% will be financed from the state budget, compared with the 100% previously envisaged; 141

 the introduction of a new legal and financial regime for renewable energy resources, cogeneration and waste, with remuneration that will be determined by prices in the energy market, with additional compensation to cover the investment costs of an efficient enterprise that cannot be recovered through the market, which is granted if the return on the project does not exceed a level that is considered reasonable, which has been deemed to be the average yield in the ten years preceding the entry into force of the measure on 10-year Spanish government bonds, increased by 300 basis points; and  the guarantee limit has been extended to €4,000 million to cover issues associated with the 2012 deficit, quantified at €4,109 million for transfer purposes.

The implementation of the measures contained in the Royal Decree Law, which entered into force immediately upon the date of publication in the Boletin Oficial del Estado, requires the approval of a series of decrees and ministerial orders that will set out the implementation procedures. Under Spanish law, such regulatory measures must undergo a public consultation and be accompanied by specific reports of the competent authorities representing implementation of the law. The conclusion of the procedure, with the enactment of all the regulatory measures is expected by December 31, 2013.

The remainder of the measures announced are still being discussed and developed. These measures include:  a bill containing framework legislation to prevent the creation of new annual imbalances;  numerous decree laws amending and designing the regulation of transmission, distribution, renewables generation and cogeneration, distributed generation and net metering, interruptibility, capacity payments and the wholesale market; and  a ministerial order containing a special revision of access rates for 2013.

See “Risk Factors—Risks related to the energy industry and markets—The Group is subject to different regulatory regimes in all the countries in which it operates. These regulatory regimes are complex and their changes could potentially affect the financial results of the Group.”

Latin America The division operates in Latin America (Argentina, Brazil, Chile, Colombia and Peru) through Endesa. Each country has its own regulatory framework, the main features of which are described below for the various business activities. Generation Under the regulations established by the competent authorities (regulatory authorities and ministries) in the various countries, operators are free to make their own decisions concerning investment in generation. Only in Argentina, following the change in energy policy in recent years, there is a regulatory framework that envisages greater public control of investments. In Brazil, plans for new generation capacity are imposed by ministerial order, and this capacity is developed through auctions open to all. All of the countries have a centralized dispatching system with a system marginal price. Usually, the merit order is created based on variable production costs that are measured periodically, with the exception of Colombia, where the merit order is based on the bids of market operators. Currently, in Argentina and Peru regulatory measures are in place governing the formulation of the spot market price. In Argentina, the measure, adopted in 2002 following the economic and energy crisis that affected that country, is based on the assumption that there are no restrictions on the supply of gas in the country. Nevertheless, in view of the current financial challenges faced by the wholesale market, the government has announced its intention to modify the existing regulatory framework and, in 2013-2014, develop an electricity market based on a cost-plus model. By contrast, in Peru, intervention in the formulation of spot prices has been in place since 2008, when the existence of restrictions in the gas and electricity transport systems caused the authorities to adopt an emergency measure for defining an “ideal” marginal cost, assuming the absence of such restrictions on transport networks. Long-term auction mechanisms are widely used for wholesale energy and/or capacity sales. These systems guarantee continuity of supply and offer greater stability to generation companies, with the expectation that this encourages new investments. Long-term sales contracts are used in Chile, Brazil, Peru and Colombia. In Brazil, the price at which electricity is sold is based on the average long-term auction prices for new and existing energy. In Colombia, the price is set by auction between the operators, which usually enter into medium-term contracts (up to four years). Finally, a regulatory framework recently introduced in Chile and Peru allows distribution companies to sign long-term contracts to sell electricity on regulated 142 end-user markets. Auctions are gradually replacing the practice of regulators setting a nodal price for supplying electricity to regulated customers. Chile, Peru and Brazil have also approved legislation to encourage the use of unconventional renewable resources, which sets out the objectives for the contribution of renewable resources to the energy mix and governs their generation. The regulatory framework for unconventional renewables in Chile is currently being revised. Distribution and sale Distribution is performed mainly under concession arrangements, using long-term or open-ended contracts, with regulations governing prices and network access. Distribution rates are revised every four years (Chile, Peru and the region of Brazil served by Coelce) or five years (Colombia and the region of Brazil served by Ampla). As a result of the Ley de Emergencia Económica (the economic emergency law) introduced in 2002, no rate reviews have yet been conducted in Argentina, despite rules mandating such revisions every five years. In Chile, Brazil and Peru, distribution companies hold auctions to procure electricity for regulated market customers, while in Colombia sales companies negotiate prices directly with generation companies, passing through the average market price to end users. In general, the liberalization of the end-user market is at a fairly advanced stage, though not yet complete. Eligibility thresholds are set at 30 kW in Argentina (20% of volumes in 2010), 3 MW in Brazil (30% of volumes), 0.3 MW in Chile (40% of volumes), 0.1 MW in Colombia (35% of volumes in 2010) and 0.2 MW in Peru (44% of volumes). Free market customers can sign bilateral contracts with generation companies for electricity. The regulatory authorities set the rates for regulated market customers. Limits on concentration and vertical integration In principle, existing legislation permits companies to take part in a variety of activities in the electricity sector (generation, distribution, sales). Usually, greater restrictions are imposed on participation in transmission activities so as to ensure that all operators have adequate access to the network. There are special restrictions on generation and distribution companies holding stakes in transmission companies in Argentina, Chile and Colombia. Furthermore, in Colombia companies formed after 1994 may not adopt or maintain a vertically-integrated structure. As to concentration within the industry, Argentina, Brazil and Chile have not set any specific restrictions on vertical or horizontal integration, while in Peru business combinations require prior authorization above certain thresholds. In Colombia, no company may control more than 25% of the generation and sales markets, while in Brazil, as previously mentioned, there are no explicit restrictions on integration in the electricity sector, although administrative authorization is required for business combinations that would result in market share of over 40%, or that involve a company whose annual turnover exceeds BRL 400 million (approximately €177 million). Chile On August 30, 2012, the president of Chile signed the bill on the Carretera Eléctrica, subsequently presented in parliament on September 4, 2012. The proposed law establishes general standards for the development of the network in terms of the role of public entities and coordination with the private sector. Argentina On November 23, 2012, the national regulatory authority (“ENRE”) approved Resolution No. 347, which provides for an increase in final rates through the creation of a new rate component to finance investment in the distribution network. On March 22, 2013, Argentina’s Energy Secretary approved Resolution No. 95/2013, which establishes a new methodology for remunerating generation companies. The new model should allow operators to recover fixed costs and variable costs and to ensure a return on investment. The new regulatory framework also establishes that CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico), the wholesale electricity market operator, will manage the procurement of fuels and the forward market once the existing contracts expire. The new regulations are applicable starting from February 2013.

On May 7, 2013, Argentina’s Energy Secretary approved Resolution No. 250/2013, which determines the residual value of the cost monitoring mechanism (MMC) receivable (rate update scheduled for 2006 and only partially implemented) and allows it to be offset (until February 2013) against the corresponding debt in respect of the Rational Use of Electricity (PUREE) program, which is a mechanism of bonuses and penalties to encourage energy efficiency created with Resolution No. 745/2005, and other debts of Edesur in respect of the system. The resulting balance will be allocated to a specific fund created in November 2012 to finance investment in the distribution network. The Secretaría de Energía has retained the power to extend, either partially or entirely, the provisions of the resolution on the basis of information received from ENRE and from CAMMESA.

143

Brazil Presidential Decree 7.945/2013 was published on March 8, 2013, authorizing the transfer of government funds to distribution companies for payment of a portion of the extra costs incurred by distributors arising from the dispatching of power from thermal generation and from contractual exposure to the spot markets. The extra costs that are not immediately compensated by the government will be recovered through the electricity rate. In any case, the regulator, ANEEL, decided that distributors can recover these extra costs through rates when rate adjustments are made or through the transfer of new resources. International division Russia Wholesale market The process of reorganizing and privatizing the assets of RAO UES (the former state-controlled, vertically-integrated monopolist) was successfully completed, ending with the dissolution of RAO UES in July 2008. The generation assets, divided among around 20 generation companies, were acquired by domestic and foreign investors (in addition to Enel OGK- 5, the German company E.ON and the Finnish company Fortum also participated). RusHydro (the hydroelectric genco), Rosenergoatom (the company that manages nuclear power plants), InterRAO (the company engaged in trading and generating electricity in Russia and abroad) and the grid companies remained under state control. Wholesale electricity and capacity sales were fully regulated until 2007. Electricity is mainly sold through a day-ahead market. In 2011, the temporary capacity market was replaced with the long-term capacity market (on an annual basis for 2011 and 2012 and on a multi-year basis starting from 2013) with the goal of ensuring sufficient long-term capacity availability and stable revenues for generation companies. However, the government, in order to ensure stable capacity, has compiled a list of new plants ( “DPMs”) that are not included in the capacity market and that receive guaranteed remuneration (capacity payment) for ten years. In 2011, Enel OGK-5 placed two new gas combined-cycle plants in Nevinnomysskaya and Sredneuralskaya (410 MW each) into service that will take part in the DPM capacity payment system. In 2011, the government appointed a working group composed of industry experts and market players (including Enel OGK-5) to prepare a proposal for reforming the market. With regard to the wholesale market in particular, the proposed model envisages the transition from a centralized market to a system of bilateral contracts. An initial version of the reform is expected for 2013. The order of February 21, 2013, approved by the Market Council, introduced the use of financial guarantees in the wholesale market (day-ahead market and balancing market) conditional on monitoring conducted by a central authority (ZFR) to ensure the governance and timing of payments. Consequently, market operators that fail to meet the payment requirements for the March-May 2013 period will be required to provide a financial guarantee starting from July 1, 2013. Thereafter, monitoring will be performed on an ongoing basis. Retail market The market has been liberalized in several stages, with a gradual increase in the volumes of electricity and capacity available for sale on the free market. Since January 1, 2011, all volumes for non-residential customers are sold on the free market. In the retail market, the supply of power to residential customers is ensured by guarantee suppliers operating on a monopoly basis, while non-residential customers are free to choose their own suppliers. However, despite the approval of a number of measures designed to promote competition in the non-residential market, switching is still limited since the process involved is still too complex. On June 4, 2012, Decree No. 442 was published. The decree amends the pricing rules for the sales market and simplifies the procedures for changing suppliers by end users (switching). More specifically:  the procedures for calculating pricing and volumes for sourcing capacity on the wholesale and retail markets were aligned;  end users will pay the actual grid costs incurred by suppliers;  the remuneration of regulated suppliers (guarantee suppliers) may differ by the level of capacity available to individual customers;  new principles for the competitive award of guarantee supplier licenses were introduced;  regulator control of the financial condition of guarantee suppliers was enhanced; and  a number of measures hindering switching were eliminated to enhance market competition. Reform of the electricity market At the start of 2013, a proposed amendment to the plan for the electricity market was put forth envisioning a transition from a centralized capacity and energy market to a system based on bilateral contracts without separate remuneration for capacity, while maintaining existing DPM contracts. The first version of this reform was discussed by the government in March 2013, 144 with a second analysis expected sometime between the 1st and 2nd halves of 2013. If approved, the reform would take effect starting from 2015.

Grid expansion strategy approved On April 9, 2013, Decree 511 on the grid expansion strategy was published. Among its provisions, it envisages the following measures:  capping the components remunerating transmission and distribution grids so that they may not exceed 40% of the final rate;  elimination of overlapping subsidies by 2022;  introduction of possibility of diversifying the transmission rate applicable to major industrial customers on a regional basis;  privatization of a number of companies operating distribution grids, which will be assigned by auction;  beginning in 2014, introduction of the social bonus for vulnerable consumers, who will be defined in future decrees.

New law for the promotion of renewable energy resources On May 28, 2013, Decree 449 on the promotion of generation from renewable energy resources in the wholesale market was published. The regulatory framework establishes remuneration similar to the capacity payment system for DPMs. The remuneration is granted through an auction system on the basis of the minimum cost of capital declared, which is subject to a cap established by the government. The first auction will be held by September 30, 2013. The government also established the amount of capacity that can receive subsidies through 2020, broken down by technology: 1,520 MW for solar, 3,600 MW for wind and 751 MW for hydroelectric.

Slovakia Prompted by the mounting pressure of commodity prices on the price of electricity, on July 2, 2008, the Slovakian government published a law to safeguard electricity sales to residential customers and small- and medium-sized enterprises. Slovenské elektrárne expressed its disagreement with price regulation, arguing that prices should be freely negotiated on market terms. In December 2010, the regulator, URSO, decided to permit companies to freely set agreed prices with end users (residential and business), with a price ceiling linked to price developments on the German EEX market. In July 2011, URSO further liberalized sales by lifting the ceiling for electricity sales to small- and medium-sized enterprises, leaving the indexing to the German price index for sales to residential customers only. Nevertheless, in September 2012, the regulator reintroduced regulated electricity prices for small- and medium-sized enterprises (they were already in place for residential customers) that entered into force as from January 1, 2013. The cap on those prices is determined on the basis of a formula indexed to prices on the Prague Power Exchange. In September 2012, Slovakia transposed the Third Energy Package, selecting the ownership unbundling model for the national transmission grid operator and adopting a new definition of vulnerable customers (i.e., financially disadvantaged customers). Decree No. 184/2012 On June 28, 2012, the energy regulator URSO approved Decree No. 184/2012, which introduces measures on regulating prices in the Slovakian electricity sector and amends Decrees No. 225/2011 and No. 438/2011. One of the amendments establishes that as from 2013, the first year of the third phase of the European Emissions Trading Scheme (ETS), the Nováky generation plant (classified as a general economic interest facility) will be reimbursed for no more than 50% of costs incurred for the purchase of CO2 emissions allowances. Special Levy Act No. 235/2012 On July 26, 2012, the Slovakian parliament approved the Special Levy Act introducing a special tax whose proceeds are to be used to reduce the state budget deficit. The tax applies to all companies that derive more than 50% of their revenues from a series of regulated sectors, including the energy sector. The tax is set at a rate of 4.36% of net profit generated through 2013. Romania On July 1, 2007, Romania introduced European unbundling principles for electricity companies. As a result, separate companies were created for the management of the distribution grid and the sale of electricity, with separate administrative, 145 accounting and management arrangements. All customers are also free to choose their own suppliers on the free market, again starting from that date. Customers that do not elect to choose their own suppliers are guaranteed service continuity by an implicit supplier. This service will be provided by the same companies involved in the sale of electricity. In addition, in June 2012 the Romanian government:  transposed the Third Energy Package, selected the independent system operator (ISO) model for the national transmission grid operator, decided to gradually eliminate regulated prices for end users of gas and electricity and introduced new measures to protect consumers and ensure the security of supplies; and  approved a law reforming the rules governing the independence and powers of the energy regulator, ANRE. The measures increase the independence and oversight powers of the regulator in energy markets.

Distribution Electricity distribution rates are based on multi-year regulatory periods (the first period of three years (2005-2007), and subsequent periods of five years) to which a revenue cap mechanism is applied. Regulated distribution revenues are calculated based on:  remuneration of the regulatory asset base through the weighted average cost of capital;  recognition of operating and maintenance costs;  recognition of grid losses; and  regulated asset depreciation. For the second regulatory period (2008-2012), the authority applies an efficiency factor of not less than 1% to controllable operating costs. The rate for the regulated weighted average cost of capital is 10%, and the target grid loss rate is 9.5% for 2012. Also during the second regulatory period, a total ceiling of 12% on annual distribution rate increases was imposed (ceiling determined in real terms, net of inflation). The year 2013 will be treated as a stand-along year and rates will be held at 2012 levels, while the third regulatory period will start in 2014 and end in 2018. Sales to regulated-market customers The method for determining the price for regulated-market customers is based on the principle of completely covering the electricity purchase cost component in rates plus a margin of 2.5% on the cost of electricity. ANRE sets the energy portfolio for each supplier in terms of prices and volumes in order to arrive at a single, final tariff for the entire country. The liberalization of the retail electricity market is scheduled to be completed by December 2013 for large-scale consumers and between June 2013 and December 2017 for residential customers. France Enel sells electricity in France. The regulatory framework for the French market was considerably modified by the NOME Act (Nouvelle organization du marché de l’électricité), the main components of which are:  access to the ARENH mechanism for a 15-year transitional period, with volumes calculated annually on the basis of the volume of nuclear generation as a percentage of total consumption, with an annual ceiling of 100 TWh;  every six months alternative suppliers can adapt requests for ARENH to the forecasts for the volume and profile of their portfolios and the share of nuclear energy used to cover consumption;  responsibility for allocating ARENH volumes to alternative suppliers is assigned to the regulator, CRE;  the French transmission network operator, RTE, is responsible for overseeing ARENH energy trades and an independent body (Caisse des Dépôts et Consignations) is responsible for managing cash flows;  the ARENH price will be set with a ministerial decree, using the level of the TaRTAM (Tarif Réglementé Transitoire d’Ajustement du Marché — a rate set by the Ministry of Energy for those customers that had initially decided to switch to the free market). The ARENH mechanism replaced the TaRTAM as of December 31, 2010 as a benchmark. As of 2013, the ARENH price will be determined directly by CRE. The ARENH price was set at €40/MWh for 2010 and €42/MWh for 2012;

 the Ministry was required to establish, by the end of June 2012, the regulatory framework for developing the capacity market, a mechanism that must ensure plant availability during peak periods. It is not yet certain whether 146

interconnection capacity will be included, although it is possible that ways of incorporating it will be explored over the medium-term. Conditional approval of state aid for regulated rates On June 12, 2012, the European Commission approved the state aid contained in regulated rates for large and medium-sized consumers, subject to compliance with a series of conditions concerning the reform of the French electricity market, including an annual review of standard tariffs (yellow and green tariffs and their elimination by the end of 2015). The approval closed the proceeding opened by the European Commission on June 13, 2007. Limits on increases in gas and electricity rates On July 9, 2012, the Ministry for Ecology, Sustainable Development and Energy sent CRE a draft decree that would limit increases in gas and electricity rates to 2%, essentially the planned inflation rate. Despite the opposition of the regulator, the Ministry for Ecology, Sustainable Development and Energy approved the proposal and in July the associated decrees were published. The debate on the energy transition The debate on the energy transition announced by the French President in September 2012 was formally launched on November 20, 2012 by the Ministry for Ecology, Sustainable Development and Energy. In order to develop recommendations to be incorporated in the energy policy act, scheduled for completion by the end of June 2013, a special expert group was established, whose composition was suggested by the Ministry for Ecology, Sustainable Development and Energy. Independently of the debate, the President also announced a reduction of the share of nuclear power in the national generation mix from 75% to 50% by 2025 and the closure of the Fessenheim nuclear plant in 2016. Capacity market — Decree No. 2012-1405 On December 18, 2012, Decree No. 2012-1405 was published in the Official Journal. As provided for under the NOME Act, the decree introduces a capacity market. The mechanism requires sellers to provide a percentage margin over their expected supply peak. That obligation can be fulfilled by purchasing capacity certificates on the market. The certificates would be certified by RTE. The system is a hybrid centralized-decentralized scheme, as although it charges the system operator with defining adequacy obligations, the latter will also depend on sellers’ estimated shares of sales. The first year for delivery is scheduled to be 2016, to cover the winter of 2016-2017. A transitional auction will be organized by CRE to secure capacity for the winter of 2015-2016. Additional implementing rules are expected to be issued by November 1, 2013. Energy transition and progressive tariffs — Law 2013-312 In March 2013, the government approved a law aimed at introducing criteria for determining the progressive rates for residential water, electricity and heat consumption. The proposed progressive rate mechanisms based on a “bonus-malus” system applicable as from January 1, 2015. However, in reviewing the law, the Constitutional Court rejected the mechanism, finding that it violates the principle of equality. The Ecology and Energy Minister announced that the government does not plan to abandon progressive rates and that a new solution would be proposed in the energy transition planning bill expected in October 2013. On April 15, 2013, Law 2013-312 was published. It contains a variety of measures for preparing for the energy transition, including, among others, simplifying the authorization procedures for wind plants and certain measures for handling electricity demand.

Renewable Energy Italy In Italy, a variety of mechanisms, differing by resource and size of plant, are used to encourage electricity generation from renewable resources. The objectives and support instruments are established by Parliament in a manner consistent with European Union directives in this sector, while implementation is handled by the Energy Services Operator (ESO), which is responsible for managing incentives for renewables. Renewable resources other than solar power — green certificates and comprehensive tariffs The primary incentive mechanism used is green certificates (introduced with Legislative Decree 79/1999). Under this system, electricity producers and importers are required to deliver a share of renewable energy. This obligation can be satisfied by purchasing green certificates. The share for 2012 is equal to 7.55% of non-renewable production. The amount of the incentive depends upon the market value at which operators can purchase green certificates to meet their obligation. This market value is set within a range. The maximum value is equal to the price at which the ESO places the certificates it holds on the market 147

(calculated as provided for in Art. 2(148) of Law 244/2007), which came to €103/MWh in 2012. The minimum price is equal to the price at which the ESO withdraws green certificates exceeding the required share from the market. For the years in the period from 2011 to 2015, that price is set at 78% of the difference between an preset amount (€180/MWh) and the average sale price for electricity for the year. For 2012, the green certificate withdrawal price was €80.34/MWh. Since January 1, 2008, plants with a capacity of up to 1 MW (200 kW for wind plants) are eligible for a comprehensive tariff system (with a term of 15 years) as an alternative to the green certificate scheme. Legislative Decree 28/2011, transposing Directive 2009/28/EC, and the associated ministerial decree of July 6, 2012, substantially revised existing incentive mechanisms for plants that entered service as from January 1, 2013. More specifically, small plants (with a capacity of up to 5 MW, as well as hydroelectric plants up to 10 MW and geothermal plants up to 20 MW) will receive incentives through a comprehensive feed-in tariff mechanism, with rates (set in the decree) differentiated by type and size of the plant. Larger plants will qualify for comprehensive incentives established on the basis of auctions run by the ESO. The green certificates mechanism will be gradually eliminated through:  the progressive reduction of the mandatory share to zero by 2015;  the provision of incentives to plants already participating in the green certificate system through rates equivalent to the current withdrawal value of certificates (as from 2015). In order to ensure control of incentive costs, the decree of July 6, 2012 sets a ceiling of €5.8 billion on aggregate annual cost — including plants already receiving incentives through the green certificate system — of incentives for resources other than solar power. Solar power incentives — Energy Account Photovoltaic plants receive incentive through the so-called Energy Account, which consists of the payment of feed-in premiums over and above the price of the electricity for power delivered to the grid over 20 years. The ministerial decree of May 5, 2011 (the Fourth Energy Account) established a indicative target of 23 GW of installed capacity by 2016, non-binding ceilings on expenditure for each six-month period for the 2013-2016 period and the gradual reduction of tariffs depending on the date a plant entered service. With the ministerial decree of July 5, 2012, the incentive system for photovoltaics was overhauled in order to ensure the more orderly growth of the sector and realign tariffs with European averages. The new Energy Account (the fifth) was entered into force on August 27, 2012, 45 days after the threshold of €6 billion/year provided for in the decree of July 5 in photovoltaic incentives was reached. The Fifth Energy Account is based on a system of comprehensive feed-in tariffs that have been reduced by an average of 40% from the previous system. Eligibility is governed by mandatory entry in semiannual registers with indicative spending limits. Direct access to the incentive rates without registration is available for small plants, concentrating plants, those with innovative features and other residual categories. The decree also sets an annual ceiling on total incentives (including those already paid out under the previous Energy Accounts) of €6.7 billion. Imbalancing payments for non-schedulable plants With the increase in non-schedulable renewable resource plants, primarily photovoltaic and wind, the Authority eliminated the previous exemption from imbalancing payments as of January 1, 2013 to foster better programming and integration of such plants into the national electricity sector. In 2013, deductibles are envisaged to enable a gradual transition to the new rules.

Unbalancing fees On June 24, 2013, the Regional Administrative Court of Lombardy voided the part of Resolution No. 281/12 establishing that as of January 1, 2013, fees for unbalancing (the difference between actual power delivered to the grid and planned power deliveries defined on the basis of energy markets) would be charged to owners of plants powered with unschedulable resources.

The Authority announced that it would appeal the decision. Pending conclusion of the dispute, the previous rules have been reinstated. These rules establish exemptions from unbalancing fees for plants powered with unschedulable resources that do not participate in intra-day markets and submit zero-price offers on the day-ahead market.

148

Europe In 2009, the European Commission issued Directive 2009/28/EC on the promotion of the use of energy from renewable resources, setting mandatory national targets aimed at increasing the share of renewable energy in final consumption to 20% by 2020 in Europe. This directive and a subsequent European Commission communication of June 30, 2009 required each Member State to adopt a national renewable energy action plan, containing a description of its domestic policies on renewables, the major strategic actions to be taken, and an assessment of the contribution that each resource and sector can make to the achievement of the national targets. There are a variety of incentives used in Europe, the primary ones being feed-in tariff or premium systems, green certificates and auctions. There is no European-wide harmonized incentive system since the extent to which renewable energy has been developed varies by country. Bulgaria The Bulgarian incentive system primarily uses resource-based feed-in tariffs. On-shore wind plants, photovoltaic plants, hydroelectric plants of less than 10 MW and biomass plants of less than 5 MW are eligible for these incentives. The government made the following amendments to the law on renewable resources:  reduced the incentive period from 15 to 12 years for all resources, except for photovoltaic, for which the period was cut from 25 to 20 years;  the rates are calculated annually in June and are held constant during the entire incentive period (without indexing); and  eligibility for incentives takes effect as from the date the work is completed. In March 2013, acting on an appeal filed by numerous private operators, the Supreme Administrative Court of Bulgaria revoked the measure of September 2012 that introduced a new grid access fee applicable to all renewable energy generation plants. However, the regulator has appealed this decision to the Court of Appeals, thereby rendering the decision inapplicable until the judicial process has been completed. In June 2013, the Supreme Court of Bulgaria issued its initial decision, eliminating the grid access fee. Renewables operators, including Enel Green Power Bulgaria, have asked for reimbursement of amounts paid in respect of grid access.

France Generation from hydroelectric plants, on-shore and off-shore wind power, biomass, biogas, photovoltaic and geothermal power is promoted in France with the use of a feed-in tariff system differentiated by energy resource, employing long-term contracts (15 years for geothermal, on-shore wind and biomass; 20 years for off-shore wind, photovoltaic and hydroelectric) indexed to inflation. Unlike the other renewable resources, photovoltaic power is incentivized with a more complex mechanism, with the tariff rates being revised quarterly on the basis of a coefficient that measures the level of demand for new permits in the previous quarter. In order to ensure the achievement of the planned targets by resource (Programmation Pluriannuelle des Investissements) the French government has promoted the use of auctions for the development of off-shore wind plants and ground-based photovoltaic systems with a capacity of more than 100 kW. The French system also provides for other sorts of support established each year on the basis of budget availability, such as accelerated depreciation and tax deductions of up to 33% for investments in overseas departments. Greece The Greek incentive system uses a feed-in tariff differentiated by energy resource. Rates for all sources are indexed annually to the rates of the Public Power Corporation if they are regulated; otherwise they are adjusted by 50% of the change in the Greek consumer price index, with the exception of photovoltaic power, which is adjusted by 25% of the Greek consumer price index. The incentives are awarded through a 20-year contract for all resources, with the exception of roof-mounted photovoltaic systems with a capacity of less than 10 kW, which benefit from a 25-year contract. Resources that do not benefit from local or European investment support systems receive a rate premium of 15-20%, with the exception of solar power.

New measures for the renewable generation sector In April 2013, with the adoption of Law 4152/13, the Greek Parliament approved a number of measures applicable to the renewable generation sector. The new measures, which entered into force on May 9, 2013 following publication in the Official Journal, include:  an increase in the tax on the profits of photovoltaic plants introduced with Law 4093/12, which rises from 30% to 37% or 42%, depending on the date of entry into service;

149

 a change in conditions regarding authorization procedures for new plants and the calculation methods used to determine the tax;  a reduction of approximately 40% in feed-in tariffs applicable to new photovoltaic plants, compared with the last revision in August 2012; and  the suspension until the end of 2013 of the issue to photovoltaic plants of permits for connecting to the grid and power purchase agreements.

Romania The main form of incentive in Romania for all renewable energy resources is the green certificates system. The only exception regards hydroelectric plants with a capacity of more than 10 MW, which are not eligible for any incentive mechanism. Sellers are required to purchase a specified share of renewable energy each year through the purchase of green certificates on the basis of annual targets set by law for the share of gross electricity production from renewables (8.3% in 2010, rising to 20% in 2020). Owing to a shortage of certificates on the market, each year the Romanian authorities publish a mandatory share reduced to ensure balance between supply and demand. The value of certificates required varies on the basis of coefficients differentiated by resource. More specifically, these are two green certificates per megawatt hour (MWh) of generation from biomass, geothermal and wind until 2017 (1 certificate after 2017), six certificates per MWh of photovoltaic generation and three certificates per MWh of hydroelectric generation by new plants. The value is expressed in euro/certificate and is set by law within a specified range (cap and floor). In the case of non-compliance, sellers are subject to a penalty equal to double the maximum value of the certificate. Following the announcement by the Romanian government of its intention to amend the renewables support mechanism in an attempt to contain the costs for final consumers, in April 2013, the proposed temporary modification of the green certificates mechanism was submitted for consultation. An ordinance was then issued and the new regulation is now in force. Among the various measures, the ordinance establishes:  the deferral suspension for a limited period (from July 1, 2013 to March 31, 2017) of the issue of part of the green certificates due to renewables generators (one green certificate/MWh for wind and mini-hydro; two green certificates/MWh for photovoltaic). The retained green certificates will be gradually be released (from April 1, 2017 for photovoltaic and mini-hydro and from January 1, 2018 for wind) through December 2020;  the limitation or suspension of the right to obtain green certificates for new plants that have not yet received final certification;  the non-recognition of green certificates for electricity generated in excess of the volumes set out in the daily hourly production plan notified to the market by generators (positive unbalancing); and  a prohibition on entering into bilateral contracts for the sale of electricity and green certificates. All contracts must necessarily be entered into on the public trading platform (OPCOM).

The promulgation of the implementing decrees is pending. They will clarify the various implementation issues of the measures and have been entrusted to ANRE.

Spain The Spanish incentive system for renewables, which was updated with Royal Decree 661/2007, is mainly based on tariff mechanisms. As of September 28, 2008, with Royal Decree 1578/2008, photovoltaic systems are only eligible for the feed-in tariff mechanism, with tariff rates being updated during four annual windows (convocatoria) on the basis of the capacity registered in the previous reference period. Tariff systems are all-inclusive and are adjusted annually for inflation.

In 2009, the authorities established the criteria for the creation of a pre-register for access to the incentive mechanism for projects under the special regime. Such projects are eligible for the pre-register only if they hold permits guaranteeing entry into service by a specified deadline. In addition, Royal Decree 1614/2010, Royal Decree 1565/2010 and Royal Decree-Law 14/2010 introduced a number of regulatory changes for existing mechanisms. The main amendments involved a reduction in the premium for some operational wind plants and a limit on the number of hours eligible for the incentive. With Royal Decree 1/2012, the Spanish government temporarily suspended the incentive mechanisms for new renewable energy projects. The suspension did not affect projects already in the pre-register and those that had already submitted applications for the incentives. In other words, the suspension will not have retroactive effect.

150

Bulgaria Introduction of tax on grid connections In September 2012, a new grid access fee was introduced. It applies to all renewable resource generation plants and varies depending on the technology involved and the date of connection to the grid. It is intended to be a temporary measure, although the duration of the levy was not specified. Greece Revenue tax In November 2012, a new tax was levied on the revenues of existing renewable energy plants. The tax is equal to 10% for all renewable energy technologies with the exception of photovoltaic plants, for which it was set at 25%. The tax is temporary (July 2012 through July 2014) but may be extended for an additional year. Romania Law 134/2012 in support of renewable energy In July 2012, the Romanian parliament published Law 134/2012, amending and replacing the previous law in support of renewable energy (Law 220/08). The main changes are as follows:  the determination of the mandatory amount on a quarterly (rather than an annual) basis by sellers;  the reduction in the number of green certificates in the case of excessive remuneration of investments. This provision is subject to the approval of the enabling decrees, which are not expected to come into force before January 1, 2015 (with the exception of solar resources, which should come into force on January 1, 2014);  the indication of the component covering the costs of the green certificates as a separate item in invoices; and  a prohibition on the cumulation of green certificates and European investment funds. Rules for renewable energy generators in the electricity balancing market On August 30, 2012, ANRE approved Regulation No. 88/2012 concerning balancing rules for renewable energy generators who receive incentives. Under the regulation, plants powered by renewable resources are defined as dispatching units and, as such, are required to participate in the balancing market.

Latin America The development of renewable energy resources in Latin America is less diversified than in Europe. In particular, the territory has long had a large number of major hydroelectric plants. The main incentive approach involves long-term power purchase agreements (PPA), tax incentives and facilitated transport rates. Brazil The incentive system for renewable energy in Brazil was created in 2002 with the implementation of a feed-in mechanism (PROINFA), and was then harmonized with the sales system for conventional power using competitive auctions. The auctions are divided between new plants and existing plants and comprise:  Leilão Fontes Alternativas, in which all technologies compete; and  Leilão Energia de Reserva, in which a single technology competes. These auctions are normally organized to increase reserve capacity and/or promote the development of certain technologies (such as renewables). At present, the auctions are divided into A-1 (normally for existing plants), A-3 and A-5 auctions on the basis of the generator’s obligation to supply the energy awarded after one, three or five years. An auction typically had two phases: the descending-clock phase in which the auction organizer establishes the opening price for the auction and the generators submit decreasing bids; and the pay-as-bid phase in which the remaining generators further reduce the price until the supply of power covers all the demand up for auction. The winning bidders are granted long-term contracts whose term varies by resource: 15 years for thermal biomass plants, 20 years for wind plants and 30 years for hydroelectric plants. The Brazilian auction mechanism is used for all renewable resources, with the exception of hydroelectric plants with a capacity of more than 30 MW. Chile Chile has a system mandating achievement of specified renewable energy targets for those who withdraw power for sale to distributors or end users. The law sets a level of 5% of all power under contract after August 31, 2007. Between 2010 and 2014, the proportion of electricity from renewables will remain at 5%, before rising by 0.5 points a year to reach a share of 151

10% by 2024. The current mechanism establishes penalties for failure to achieve the mandatory share. The Chilean government is currently discussing the possibility of increasing the mandatory share from 10% in 2024 to 20% in 2020. The Comitè Asesor para el Desarrollo Energético, which was charged with analyzing the Chilean energy market, produced a report recommending a renewables target of 15% by 2024. The proposal to set the target at 20% by 2020 was recently approved by the Senate and is currently being examined by the Energy Committee of the Chamber of Deputies. All renewable energy resources are eligible for the purposes of meeting the requirement. For hydroelectric plants with a capacity of up to 40 MW, the system provides for a corrective factor which counts all of the first 20 MW and a declining proportion of the capacity between 20 and 40 MW. On March 8, 2013, Decreto Supremo No. 114 of the Energy Ministry was published in Chile’s official journal. The decree governs a number of aspects of Law 19.657 concerning geothermal power. The decree establishes a number of departures from the provisions of the previous Decree No. 32, with improvements in a number of aspects, including the granting of “exclusive rights” in obtaining a production concession once exploration activities have been completed, creating greater legal certainty and protection for investors. On June 18, 2013, the Chamber of Deputies approved the new renewable energy support law, which requires that a certain percentage of power under contract delivered to the grid come from renewable generation. More specifically, the law sets the target at 10% by 2024 for all energy sold through contracts signed between 2007 and 2013 and increases the target to 20% by 2025 for all energy sold through contracts signed after 2013. This law has been sent to the Chilean Senate to complete the parliamentary approval process, and if approved, it will be sent to the President of Chile for promulgation.

Peru The renewable energy incentive system is based on auctions differentiated by renewable resource. It was introduced in 2010. The auctions are defined in terms of electricity generated for wind, solar and biomass plants, and by capacity for hydroelectric facilities. Hydroelectric plants with a capacity of more than 20 MW are not eligible for the incentive system. The auctions start with a maximum price and close depending on the bid price (a pay-as-bid mechanism). The price can be adjusted on the basis of the U.S. consumer price index if the increase is more than 5%. Brazil On April 11, 2012, the Brazilian president signed Decree No. 579 (also referred hereinafter to as Medida Provisória No. 579/2012) establishing the terms and conditions for the renewal of concessions in the electricity sector set to expire before 2018 and reducing a number of rate components of a fiscal nature. With respect to the first issue, the measure, the provisions of which were confirmed with the subsequent ratification into law with Federal Law No. 12783/13, establishes that the amount due to the exiting concession holder as reimbursement of the residual value of the assets serving the concession at the time of the expiry of the concession shall be based on the replacement value of those assets. With regard to hydroelectric concessions, the decree permits holders of concessions for plants with output of more than 1 MW to apply for a renewal of the concession 60 months before its expiration. Holders of concessions expiring before 2018 decided in October 2012 whether to seek renewal. Central America Siepac — Regional Electricity Market On November 16, 2012, the Regional Electric Interconnection Commission for the Central American countries published Resolution CRIE — NPn. 19-2012 setting out transitional rules applicable to electricity transactions in the Regional Electricity Market among Panama, Costa Rica, Honduras, Nicaragua, El Salvador and Guatemala.

On March 27, 2013, the decision was made to postpone the launch of the mechanism governing the Regional Electricity Market. On June 1, 2013, the regional regulator (CRIE) announced the official launch of the Regional Electricity Market, with the termination of the transitional system in place since March 2013. The implementation of regional regulations marks the first step towards the consolidation of the rules governing cross-border trade in electricity among 6 countries in Central America (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama).

Mexico The renewables promotion law (“LAERFTE”) was published in 2008 to govern the regulatory framework for the transition of the country towards clean energy technologies. In 2009 and 2010, a series of implementing measures were published. In 2011, an amendment to the LAERFTE confirmed the goal of producing 35% of the country’s energy from renewable resources by 2024. Private-sector investors participate as independent power producers, who sell all their capacity to the

152

Comisión Federal de Energía using auction mechanisms, self-suppliers and small-scale generators (with an installed capacity of less than 30 MW, selling their capacity on the basis of rates regulated by the Comisión Federal de Energía). In December 2011, the Senate approved a major change that allows hydroelectric plants with a capacity of more than 30 MW that meet certain conditions concerning surface area and the size of reservoirs to qualify as renewable energy plants General law on climate change On June 6, 2012, the Decree introducing climate change measures to facilitate the transition to a “green economy” was published in the country’s Official Journal. The Decree introduces a number of specific measures (including the application of tax incentives for private investment in renewable energy and efficient co-generation) and sets targets for greenhouse gas emissions reductions (30% by 2020 and 50% by 2050), establishing a 35% target for the percentage of renewable energy in the Mexican energy mix to be achieved by 2024. Micro-generation auctions With Resolution No. 382/2012, the Ministry of Energy formalized the rules for auctions dedicated to renewable energy projects with an installed capacity of up to 30 MW. The first auctions will be held in 2013 and bids must fall within a price range to be announced by the authority at the time the auction is called. National Energy Strategy On April 9, 2013, the Mexican Congress approved the National Energy Strategy for 2013-2027, confirming the drive to boost renewables through the involvement of private-sector investors and the intention to reduce emissions of green-house gases (35% of generation from non-fossil sources by 2024). The document has been submitted to the government for formalization.

Amendment of the renewable energy law On June 7, 2013, the Mexican government published an amendment to LAERFTE that redefines the standards used for hydroelectric plants to qualify as renewable resource plants. Large hydro plants (>30 MW) may now qualify as such if the ratio of generation capacity to the area of the reservoir containment wall is greater than 10W/m2, thereby gaining access to renewable energy incentives, such as lower transport costs and tax relief.

Panama On June 12, 2013, in line with an energy policy directed at diversifying the energy mix, the Panamanian government ratified Law 605, which establishes tax incentives to support the development of solar power. The new incentives provide for an exemption from import tax, a tax credit (5% of capital expenditures) and accelerated depreciation.

United States The United States has a two-level renewables incentive system. The federal level envisages various types of support, including tax incentives for production and investment (the Production Tax Credit and the Investment Tax Credit), accelerated depreciation and federal subsidies. At the state level, the main incentive is a Renewable Portfolio Standard mechanism, i.e., a system of mandatory percentages of generation from renewables for utilities, with targets differing from state to state. Most states have adopted systems of tradable certificates but there is no corresponding platform active at the federal level. On January 2, 2013, President Obama signed the American Taxpayer Relief Act into law, which extends the production tax credit (PTC) for wind power by a year. In addition, the law amends the conditions for all technologies to qualify for the incentive: plants no longer have to be in operation but rather “the construction of which begins” by January 1, 2014. On May 13, 2013, the definition of “begin construction” was determined, providing that if physical construction activities begin on a project before January 1, 2014 and proceed on a continuous basis until the entry into service of the plant (the commercial operation date), such project is eligible to qualify for the production tax credit. Environmental regulations In addition to the foregoing, summarized below are certain environmental regulations to which the Group is subject in the context of its operational activities. Electromagnetic fields On February 22, 2001, the Italian parliament passed a framework law (No. 36) (the “2001 Law”) in order to reshape the legal framework concerning electromagnetic field exposure. The 2001 Law is intended to protect the general public and workers against alleged potential long-term health effects of exposure to electromagnetic fields generated by both low-frequency and high-frequency infrastructure. 153

On July 8, 2003, a Prime Ministerial Decree was enacted providing for measures to partially implement the 2001 Law, setting maximum exposure levels, precautionary levels and quality targets.

In addition, the Bersani Decree required the Electricity Services Operator to pay Enel Distribuzione and other owners of distribution/transmission lines consideration for the use of the lines, which adequately reflects the costs the owners incurred to comply with regulatory requirements. SO2, NOx and other emissions The principal European Union directive on atmospheric pollution affecting the electricity industry is the 2001/80/CE Large Combustion Plants Directive, which requires each Member State to establish and implement a program of progressive reduction of total SO2 emissions and total NOx emissions from generation plants licensed before July 1, 1987, and to establish emissions limits for SO2, NOx and particulate matter from individual generation plants licensed after July 1, 1987. In addition, Italy is bound by a European Union Directive issued in 2001 (Directive No. 2001/81/CE) mandating that Member States achieve specified reduction targets on SO2, NOx, volatile organic compounds (VOC) and NH3 emissions by 2010. To this end, Member States were required to establish and implement programs of emissions reduction in order to achieve the targets set in the Directive. Italy is also a member of the Helsinki Protocol and the Oslo Protocol, which require signatory countries to reduce SO2 emissions, and the Sofia Protocol, which requires signatories to reduce NOx emissions. The requirements under these protocols are reflected in Italian law. In Italy, Legislative Decree No. 152/2006 (“Environmental Code”), repeals many previous regulations on air emission and was recently modified by Legislative Decree No. 128/2010, which sets the emission limits and reduction programs for the industrial plants, in respect of each licensing year. In December 2007, the European Union Commission published a directive proposal on “industrial emission” (Integrated Pollution Prevention and Control) with the aim of unifying provisions contained in seven different directives, including the Large Combustion Plants Directive. The text of Directive No. 75/2010/EU was finally published in the European Union Official Journal on December 17, 2010. The Directive includes:  emission limits: Attachment V provides the emission limits for combustion plants referred to in article 30, paragraphs 2 and 3 (so, among others, for those “combustion plants which have been granted a permit before January 7, 2013, or the operators of which have submitted a complete application for a permit before that date, provided that such plants are put into operation no later than January 7, 2014” and combustion plants not covered by such definition);  updating of the authorization: within four years from the publication of decisions on Best Available Techniques (BAT) conclusions, the competent authority must evaluate the plants authorization conditions and, if necessary, update it consistently with the BAT emission limits; and  the possibility of derogation under certain circumstances (e.g. limited life time). Directive No. 75/2010/EU will be implemented by Member States by the beginning of 2013. In such regard, pursuant to the Community Draft Law for 2011 (which is under review), the task of implementing Directive No. 75/2010/EU will be delegated to the Italian government. In order to implement Directive No. 75/2010/EU, the European Commission adopted Decision No. 2012/119/UE, aimed at “laying down rules concerning guidance on the collection of data and on the drawing up of BAT reference documents and on their quality assurance referred to in Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions.”

PCBs and asbestos In May 1999, the Italian government adopted Legislative Decree No. 209/1999 concerning the recovery and disposal of transformers and other equipment containing polychlorinated biphenyls (“PCBs”). The timetable for PCBs, transformers and other equipment disposal has been amended by Article 18 of Law No. 62, dated April 18, 2005. Enel also delivers waste products containing asbestos to specialized companies authorized to treat and dispose of asbestos. Such waste products derive from the cleaning of Enel’s plants, which it conducts in accordance with its general maintenance and environmental programs.

154

Integrated prevention and reduction of air pollution The regulation concerning the integrated prevention and reduction of air pollution was originally provided for by Directive No. 96/61/EC and implemented in Italy by means of Legislative Decree No. 59/2005. This Directive provides that all the operators require a single authorization, replacing separate authorizations provided under previous regulations. The operators are also requested to adopt BAT in order to reduce air pollution and other emissions. The scope of Legislative Decree No. 59/2005 includes energy activities and, in particular, combustion installations with a rated thermal input exceeding 50 MW. In 2008, the Directive No. 96/61/EC was formally repealed and replaced by Directive No. 2008/1/EU. The provisions of Directive No. 2008/1/EU merged, with some amendments, into Directive No. 2010/75/EU (see paragraph “SO2, NOx and Other Emissions” above). Legislative Decree No. 59/2005 has been repealed by Legislative Decree No. 128/2010 and the relevant provisions have been integrated into other decrees and in particular in the Environmental Code. Water pollution prevention Enel is subject to environmental laws and regulations limiting heat and other characteristics of water discharges and wastewater from its plants. The most recent regulation concerning water pollution prevention is represented by the Environmental Code, which provides for civil, penal and administrative sanctions in case of violations of its provisions. Waste management The Environmental Code sets out the legal framework on waste management. Under the Environmental Code, companies producing waste are responsible and chargeable for waste storing, transportation, recycling and disposal. From August 2011, according to the rules set forth by Legislative Decree No. 121/2011, some crimes concerning waste disposal have been introduced within Legislative Decree No. 231/2001 on entities’ administrative responsibility. Site remediation The Environmental Code sets out the legal framework on contaminated sites and introduces real threshold concentration values for contamination (CSC). If these values are exceeded, it is mandatory to proceed with further investigations, performing a site characterization and a site-specific risk assessment. If the risk assessment reveals the absence of unacceptable risk, the site is declared “not contaminated”; however, in such cases, a monitoring program may be required. From August 2011, through the aforementioned Legislative Decree No. 121/2011, crimes connected to the execution of remediation activities have been inserted within Legislative Decree No. 231/2001 on entities administrative responsibility. Environmental registrations, certifications and authorizations Enel has joined the Eco-Management and Audit Scheme (“EMAS”), a European Union initiative to implement a voluntary environmental management and registration system, which seeks to improve the level of environmental efficiency and disclosure of European industrial companies. Rules concerning EMAS are contained in European Union Regulation No. 1836/1993/EEC. Originally applicable only to individual sites, in 2001 the European Union passed a new Regulation (No. 761/2001) that extended the scope of EMAS system to groups of sites and sites with no generation assets, such as distribution networks. That Regulation has been finally repealed and replaced by Regulation No. 1221/2009. Discontinued nuclear operations Since November 2000, Enel has not owned any nuclear power plants in Italy. Enel has not produced electricity from nuclear power plants in Italy since 1988. Following a national referendum in 1987 in which the Italian electorate expressed its opposition to the use of nuclear power, the Italian government ordered the interruption of power production from nuclear fuels and Enel ceased operations at its four nuclear plants in Italy, which had an aggregate net maximum electrical capacity of 1,500 MW. Pursuant to the Bersani Decree, Enel transferred its discontinued nuclear operations to So.g.i.n., then one of its wholly owned subsidiaries. The principal activity of So.g.i.n. is the decommissioning of the nuclear plants and of Enel’s share of the nuclear fuel in the NERSA plant in France, including disposal of nuclear fuel and nuclear waste. Under the Bersani Decree, Enel was required to transfer to the MEF all the shares of So.g.i.n. without compensation. The transfer was completed on November 3, 2000. Law No. 99/2009 appointed the Italian government to re-introduce the necessary regulatory framework for the production of nuclear energy within the Italian territory, as well as to adopt several measures for the promotion of the construction of nuclear power plants in Italy. However, on June 13, 2011, a referendum took place on some of the provisions of the aforementioned decrees. On the basis of the outcome of this referendum, the Italian electorate expressed again its opposition to the construction of new nuclear power plants in Italy.

155

MANAGEMENT

Corporate bodies and principal officers Board of directors As of the date of this Offering Circular, Enel’s board of directors is composed of nine members, appointed at Enel’s annual general meeting of shareholders held on April 29, 2011. The directors’ term will expire on the date of the general shareholders’ meeting called to approve the Enel’s financial statements as of and for the year ending December 31, 2013. The names of the members of the board of directors are set forth in the following table.

Name Position Place and Date of Birth

Paolo Andrea Colombo(1) ...... Chairman Milan, April 12, 1960 Fulvio Conti(1) ...... Chief Executive Officer Rome, October 28, 1947 Alessandro Banchi(2)(3) ...... Director Florence, April 19, 1946 Lorenzo Codogno(3) ...... Director Brescia, April 24, 1959 Mauro Miccio(2)(3) ...... Director Rome, July 5, 1955 Fernando Napolitano(2)(3) ...... Director Naples, September 15, 1964 Pedro Solbes Mira(2)(3) ...... Director Pinoso (Alicante), August 31, 1942 Angelo Taraborelli(2)(3) ...... Director Guardiagrele (Chieti), May 25, 1948 Gianfranco Tosi(2)(3) ...... Director Busto Arsizio, October 28, 1947

Note: (1) Executive director. (2) Independent director pursuant to the Self-Regulation Code. (3) Non-executive director. The business address of the members of Enel’s board of directors is Enel’s registered office. The management competence and experience of each director are briefly summarized below: Paolo Andrea Colombo A 1984 graduate with honors of the “Bocconi” University in Milan with a degree in business economics, where he was tenured professor from 1989 until 2010 of accounting and financial statements and where he is currently tenured senior contract professor. He is a founding partner of Colombo & Associati, an Italian independent consulting company which offers a broad range of services in corporate finance and business consultancy to Italian and international clients. He has been a member of the boards of directors of several significant industrial and financial companies, which include Eni S.p.A., Saipem, Telecom Italia Mobile, Pirelli Pneumatici, Publitalia ’80 (Mediaset Group), RCS Quotidiani, RCS Libri, RCS Broadcast e Fila Holding (RCS Mediagroup), Sias, Interbanca e Aurora (Unipol Group). Furthermore, he held the office of chairman of the board of statutory auditors of Saipem, Stream and Ansaldo STS, and of member of the board of statutory auditors of Winterthur and Credit Suisse Italy, Banca Intesa, Lottomatica, Montedison, Techint Finanziaria, HDPNet and Internazionale F.C. Currently, he is director of Mediaset and Versace, and chairman of the board of statutory auditors of GE Capital Interbanca and member of the board of statutory auditors of A. Moratti S.a.p.a. and of Humanitas Mirasole. He is also deputy chairman of the Italy-China Foundation, a member of the management board and council of Confindustria, a member of the management boards of Assonime and Assolombarda, member of the board of directors of ISPI, as well member of the board of relations between Italy and the United States. He has been Chairman of Enel’s board of directors since May 2011.

Fulvio Conti A graduate of the University of Rome “La Sapienza” with a degree in Economics, he joined the Mobil Group in 1969, where he held a number of executive positions in Italy and abroad and in 1989 and 1990 he was in charge of finance for Europe. In 1991, he was head of the accounting, finance and control department for Europe of the American company Campbell. After having been head of the accounting, finance, and control department of Montecatini (from 1991 to 1993), he subsequently held the office of head of finance of Montedison-Compart (between 1993 and 1996) and was responsible for the financial restructuring of the group. He served as general manager and chief financial officer of the Italian National Railways between 1996 and 1998, and he also held important positions in other companies of the Group (including Metropolis and Grandi Stazioni). He was deputy chairman of Eurofima in 1997, and he held the office of general manager and chief financial officer of Telecom Italia from 1998 until 1999, holding important positions in other companies of the Telecom Italia group (including Finsiel, TIM, Sirti, Italtel, Meie and STET International). From 1999 to June 2005 he was Enel’s chief financial officer. He has been chief executive officer and general manager of Enel since May 2005. He is currently also a director of AON Corporation, Barclays Plc and RCS Mediagroup. He is also deputy chairman of Endesa and deputy chairman of Confindustria, with responsibility for the studies department, as well as director of the Accademia Nazionale di Santa Cecilia 156 and of the Italian Technology Institute. He was also chairman of Eurelectric from June 2011 until June 2013. In 2007, he was awarded with the Doctor Honoris Causa degree in Electrical Engineering, from Genoa University; in May 2009 he was appointed “Cavaliere del Lavoro” of the Italian Republic and in December of the same year he became “Officier de la Légion d’Honneur” of the French Republic. Alessandro Banchi Graduate in Chemical Engineering at the University of Bologna in 1969, he started his professional career in the pharmacology industry in 1971. In 1973, he joined the Italian branch office of the chemical-pharmaceutical multinational Boehringer Ingelheim, holding different management positions both in Italy and abroad, and became Italy’s country manager from 1992 until 1999. In the Boehringer Ingelheim group, he held the office of managing director of Pharma Marketing and Sales (which operates worldwide) from 2000 until 2008, where he also held the office of chairman and CEO of its executive committee starting from 2004. In 2009 he left the Boehringer Ingelheim group to provide professional advice on pharmaceutical matters. Officer of the Republic of Italy, he held offices in Italian and foreign sector associations of chemical and pharmaceutical industry; in this regard, he was chairman of AESGP and ANIFA (respectively, European and Italian Association of pharmaceutical industries of counter products), member of the boards of directors of Federchimica and Farmindustria, as well as in the G10 at the European Commission in Brussels. He has been a member of Enel’s board of directors since May 2011. Currently, he is also the chairman of the supervisory board of Biotest A.G. Lorenzo Codogno After studying at the University of Padua, he completed his studies in the United States, where he earned a master’s degree in Finance (1986-87) at Syracuse University (New York). He was deputy manager of Credito Italiano (now Unicredit), where he worked in the research department. Subsequently, from 1995 to 2006, he worked for Bank of America, first in Milan and from 1998 in London, where he held the position of managing director, senior economist and the co-head of economic analysis in Europe. In 2006, he joined the MEF, where he is currently general director in the Treasury Department and head of the Economic and Financial Analysis and Planning Directorate. This directorate is in charge of macroeconomic forecasting, cyclical and structural analysis of the Italian and international economy, and analysis of monetary and financial issues. From January 2010 until December 2011, he was chairman of the European Union’s Economic Policy Committee (a body of which he was deputy chairman from January 2008 to December 2009 and head of the Italian delegation since 2006), and he was chairman of the Lisbon Methodology Working Group from November 2006 until January 2010. Since January 2013, he has been chairman of Working Party I of the OECD (of which he had been deputy chairman since October 2007 and head of the Italian delegation since 2006). He is also the Italian delegate to the OECD’s Economic Policy Committee. In addition, he is the author of numerous scientific publications and of articles in the specialized press. Before joining the MEF, he was economic commentator on the main international economic and financial networks. He was a director of MTS (a company that manages markets for bond trading, now part of the London Stock Exchange group) from 1999 to 2003 and is currently a member of the scientific committee of the “Fondazione Masi” (since April 2009) and a member of the board of directors of the “Fondazione universitaria economia Tor Vergata CEIS” (since November 2009). He has been a director of Enel since June 2008. Mauro Miccio Graduate with honors in Law at “La Sapienza” University of Rome in 1978, he started his professional career in the publishing Group Abete as managing director for the publishing sector (1981) and chief executive officer of the press agency ASCA. He has been director of Ente Cinema (currently Cinecittà Luce) from 1993 until 1996, and chairman of Cinecittà Multiplex, director of Rai from 1994 until 1996 and Acea from 2000 until 2002. Furthermore he held the office of managing director of A.S. Roma from 1997 until 2000 and chief executive officer of Rugby Roma from 1999 until 2000, of Agenzia per la Moda from 1998 until 2001 and Eur S.p.A. from 2003 until 2009. Former chairman of FERPI (Federazione Relazioni Pubbliche), ICI (Interassociazione della Comunicazione di Impresa), of the National Rugby League and of the organization committee of the “Baseball World Cup 2009,” he has been deputy chairman of the European Rugby League. He was several times member of the Superior Communication Council at the Ministry of Communication and consultant of AGCOM, with whom he collaborated for the definition of the frequency sharing plan for the digital terrestrial television. He held and holds significant offices inside the Confindustria system, he is managing director of Assoimmobiliare, is member of the executive Committee of the “S.O.S. — il Telefono Azzurro onlus” association and of the “Fondazione San Matteo” for the promotion of the social doctrine of the Catholic Church and the realization of humanitarian projects in the developing countries. Professor of matters related to the communication sector at the University of Catania (from 1999 until 2002) and “Roma Tre,” where he currently teaches communication sociology, he collaborates furthermore with other Communication Science university faculties and with various journalistic headlines as expert of communication and marketing and he is author of several publications related to this matter. Currently, he is a director of Sipra. He was a member of Enel’s board of directors from 2002 until 2005, and now has held the office again since May 2011.

157

Fernando Napolitano A graduate in economics and commerce (1987) of the University of Naples, he completed his studies in the United States, first earning a master’s degree in management at Brooklyn Polytechnic University and later attending the advanced management program at Harvard Business School. He began his career by working in the marketing division of Laben (Finmeccanica Group) and then that of Procter & Gamble Italia; in 1990 he joined the Italian office of Booz Allen Hamilton (now named Booz & Company Italia), a management and technology consulting firm, where he was appointed partner and vice-president in 1998. Within this office he was in charge of developing activities in the fields of telecommunications, media, and aerospace, while also gaining experience in Europe, the United States, Asia and the Middle East; in Booz & Company he was chief executive officer until June 2011, with assignments also of an international scope. Since May 2011, he has been founding member of Italian Business & Investment Initiative, “Why Italy Matters to the World,” with its registered office in New York, with the purpose of facilitating the meeting of Italian small- and medium-sized enterprises with U.S. investors. From November 2001 to April 2006 he served in the committee for surface digital television instituted by the Communications Ministry and from July 2002 to September 2006 he was director of the Italian Centre for Aerospace Research. He has been a director of Enel since May 2002 and held the same office at Data Service (currently B.E.E. Team) from May 2007 to October 2008. Pedro Solbes Mira A graduate in Law at the Complutense University of Madrid and Ph.D in Politics Sciences at the same university, he carried out advanced studies in European economy at the l’Université Libre de Bruxelles. He began his political career in 1968 as officer at the Ministry of Economics of Spain, holding prestigious offices at Spanish and European institutions. In particular, he held the office of Deputy Minister of International Affairs in Spain from 1986 until 1991 as responsible for the relations with the European Community, from 1991 until 1993 ha was Minister of Agriculture, Nutrition and Fishing, while from 1993 until 1996 and from 2004 until 2009 he was Minister of Economic and Financial Affairs. Within the European area he was Officer of Business and Monetary Affairs from 1999 until 2004. He was member of the Spanish Parliament in 1996 and 2007, and left the parliamentary office in 2009. Until November 2012 he was Head of the Supervisory Board of EFRAG (European Financial Reporting Advisory Group), and currently is member of the Conseil des Garants de Notre Europe Foundation, Head of the executive committee of FRIDE (Spanish private foundation for international relations and foreign communication) and Head of the Spanish section of the Hispanic-Chinese Forum. Before holding ministerial offices, he was member of the board of directors of a number of Spanish companies as representative of the public shareholder. Currently, he is director of Barclays Bank España. He has been a member of Enel’s board of directors since May 2011. Angelo Taraborelli A graduate with honors in Law at the University of Siena in 1971, he obtained a master degree in hydrocarbon business at the High School of Hydrocarbon “Enrico Mattei.” He began his professional activity at Eni S.p.A. in 1973, where he held various management offices, up to the role of Director of Planning and Control of Saipem. Then he held the office of the holding’s deputy Head of Strategic control and up-stream development and Gas (in 1996) and, subsequently (in 1998), the office of deputy head of Planning and Industrial Control. Subsequently he held the office of deputy chairman of Snamprogetti (from 2001 until 2002) and has been chief executive officer for AgipPetroli’s business (2002). From the beginning of 2003, after the incorporation of the aforementioned company in the holding, he was deputy general manager of the marketing area at the Refining & Marketing division. From 2004 until 2007 he was general manager of Eni S.p.A. with responsible for the Refining & Marketing division. Until September 2007, he was director of Galp (a Portuguese oil company), deputy chairman of Unione Petrolifera (association of the oil companies operating in Italy), director of Eni Foundation and chairman of Eni Trading & Shipping. From 2007 until 2009 he held the office of chief executive officer and general manager of Syndial, Eni S.p.A.’s company operating in chemicals and environmental intervention fields. In 2009 he left Eni S.p.A. in order to carry out consultancy in oil industry matters; then he was appointed as distinguished associate of Energy Market Consultants (consultancy firm in oil industry matters with registered office in London) in 2010. He has been a member of Enel’s board of directors since May 2011. Gianfranco Tosi A graduate in mechanical engineering (1971) of the Polytechnic Institute of Milan, since 1972 he has held a number of positions at the same institute, becoming professor of iron metallurgy in 1982 and from 1992 also giving the course on the technology of metal materials (together with the same position at the University of Lecco). Author of more than 60 publications, he has been extensively involved in scientific activities. Member of the boards of directors of several companies and consortia, he has also held positions in associations, including the vice-presidency of the Gruppo Giovani Federlombarda (with duties as regional delegate on the Comitato Centrale Giovani Imprenditori instituted within Confindustria) and the office of member of the executive committee of the Unione Imprenditori of the Province of Varese. From December 1993 to May 2002 he was mayor of the city of Busto Arsizio. President of the Center for Lombard Culture, established by the

158

Lombardy Region to defend and develop the local culture, he is also a member of the association of journalists. He has been a director of Enel since May 2002. Board of statutory auditors At the date hereof, Enel’s board of statutory auditors, appointed at the general shareholders’ meeting of April 30, 2013, is composed of three statutory members, whose names and positions are set forth in the following table, and three alternate auditors. The terms of the members of the board of statutory auditors will expire on the date of the general shareholders’ meeting called to approve the Enel’s financial statements as of and for the year ending December 31, 2015.

Name Position Place and Date of Birth

Sergio Duca ...... Chairman Milan, March 29, 1947 Lidia D’Alessio ...... Statutory Auditor Caserta, October 19, 1946 Gennaro Mariconda ...... Statutory Auditor Santa Lucia di Serino, May 21, 1942 The business address of the members of Enel’s board of statutory auditors is Enel’s registered office. The competence and experience of each statutory auditor is briefly summarized below. Sergio Duca Graduated with honors in Economics and Business from the “Bocconi” University in Milan. A certified chartered accountant and auditor, as well as auditor authorized by the U.K. Department of Trade and Industry, he acquired broad experience through the PricewaterhouseCoopers network as the external auditor of important Italian listed companies, including Fiat, Telecom Italia, and Sanpaolo IMI. He was the chairman of PricewaterhouseCoopers S.p.A. from 1997 until July 2007, when he resigned from his office and ceased to be a shareholder of that firm because he had reached the age limit provided for by the bylaws. After serving as, among other things, member of the Edison Foundation’s advisory board and the Bocconi University’s development committee, as well as chairman of the Bocconi Alumni Association’s board of auditors and a member of the board of auditors of the ANDAF (Italian association of chief financial officers), he was chairman of the board of statutory auditors of Tosetti Value SIM and an independent director of Sella Gestione SGR until April 2010. member of the Ned Community, an association of non-executive directors, he currently holds high offices on the boards of directors and the boards of statutory auditors of important Italian companies, associations, and foundations, serving as chairman of the board of statutory auditors of Exor and GTECH S.p.A, chairman of the board of directors of Orizzonte SGR and chairman of the board of auditors of the Silvio Tronchetti Provera Foundation,the Compagnia di San Paolo and the Institute for Study of International Politics, as well as a member of the board of auditors of the Intesa San Paolo Foundation Onlus and the supervisory body of Exor established pursuant to Legislative Decree No. 231/2001. He has been Chairman of Enel’s board of statutory auditors since April 2010. Lidia D’Alessio Graduated with honors in Economics and Business from the University of Naples, she continued her academic activity by teaching since 1988 at several universities (in Cagliari and at “La Sapienza” and “LUISS” in Rome). Since 1995 she is a tenured professor in Business Economics and teaches Planning and Control of Civil Service at “Roma Tre” University, Faculty of Economics. Since 1992 she teaches at several master courses and PhD schools in Italy. Subject taught include management control, corporate strategic control, public and private accounting systems, programming and budgeting, accounting systems and financial reporting for firms operating in the healthcare and social security public sectors, governance models for Italian and international public bodies. She is also an auditor and author of several works on the subject of accounting. Since 1992 she provides professional advice on the analysis, as well as the implementation of internal models of cost, analytical and general accounting; accounting systems; and financial reporting and business evaluation and internal control models. Member of various committees, commissions and working groups set up within the MEF concerning public entities accounting, she also served as chairman of INPS’ internal control unit (from 1997 until 2000), as chairman of the internal control unit of the general hospital Umberto I, in Rome (from 2000 until 2002) and as general manager of a healthcare public service unit in the Region of Calabria (from 2005 until 2007). From 2006 until 2011 she served as chairman of the board of auditors of the National Interuniversity Consortium for the Physical Sciences of Matter (CNISM) and since 2009 she is chairman of the board of auditors of the National Interuniversity Consortium for the Telecommunications (CNIT). Since 2013 she is Regular Statutory Auditor of Enel and member of the Auditors Central Commission. Gennaro Mariconda He has been a notary public since 1970 and a notary public in Rome since 1977. From 1995 to 2001 he was a member of the National Council of Notaries, of which he was president from 1998 to 2001. As part of his activity as a notary, he has taken part in a number of important reorganizations, transformations, and mergers of banks and other Italian companies, such as Banca di Roma, Medio Credito Centrale, Capitalia, IMI-San Paolo, Beni Stabili, and Autostrade. Since 1966 he has taught at a number of Italian universities and is a past professor of civil law at the University of Cassino’s School of Law. He has 159 served as a director of RCS Editori, Beni Stabili, as well as of the Istituto Regionale di Studi Giuridici Arturo Carlo Jemolo. He is currently auditor of Salini Costruttori S.p.A. and a member of the editorial board of the journals “Notariato” and “Rivista dell’esecuzione forzata.” A statutory auditor of Enel since 2007, he is the author of numerous technical legal studies — mainly on civil and commercial law — and he has also published articles, interviews, and essays in the most important Italian newspapers and magazines. Board committees and other corporate governance matters Establishment of the Control and Risk Committee, the Compensation Committee, the Related Parties Committee and the Nomination and Corporate Governance Committee In accordance with the provisions on corporate governance of the Self-Regulation Code (Codice di Autodisciplina) published by Borsa Italiana, Enel’s board of directors has resolved upon the establishment, pursuant to Articles 6.P.3 and 7.P.3 of such Code, of a compensation committee and a control and risk committee. In December 2006, the board of directors approved special organizational regulations (which have been amended and supplemented in December 2012) that govern the composition, tasks, and working procedures of the compensation committee and the control and risk committee. The compensation and control and risk committees consist of at least three non-executive directors, the majority of whom, including the chairman, are independent. Members are appointed by the board of directors, which appoints one of them as chairman, and (as noted above) establishes by a special resolution the tasks of each committee. In carrying out their duties, the committees in question are empowered to access the information and corporate departments necessary to perform their respective tasks and may avail themselves of outside consultants at the Issuer’s expense within the limits of the budget approved by the board of directors. The chairman of the board of statutory auditors, or another designated auditor, attends the meetings of each committee (the other regular statutory auditors may also attend). Upon invitation by the chairman of the relevant committee, meetings may also be attended by other members of the board of directors or representatives of the Issuer’s functions or third parties whose presence may support the performance of the committee’s duties. The meetings of the compensation committee are normally attended also by the head of the “Human Resources and Organization” function, and the meetings of the control and risk committee are also normally attended by the head of the “Audit” function. In addition, in accordance with the provisions of CONSOB Regulation No. 17221/2010 concerning transactions with related parties and with the procedure for transactions with related parties adopted by the board of directors in November 2010, the board of directors resolved upon the establishment of a related parties committee, whose composition, duties and functioning are established by a special organizational regulation, approved by the board of directors in November 2010. In May 2011, the board of directors established another internal committee with consultative and policy initiating functions regarding corporate governance matters, with the duty of supervising the procedures and the regulations adopted in this respect within Enel and to formulate amendment proposals in order to adjust the contents of such procedures to national and international best practices. In December 2012, on the occasion of the implementation of the recommendations introduced in the edition of the Self-Regulation Code published in December 2011, the board of directors also delegated to this committee the functions of nomination committee. Each committee provides for the appointment of a secretary, which may be a person not drawn from among its own members, to whom the duty to draft minutes of meetings is allocated. Below is set forth a brief description of the tasks and internal operation of the committees, as well as information concerning the current members of each committee. Control and Risk Committee The control and risk committee (which until December 2012 operated under the name “internal control committee” in accordance with the responsibilities assigned in line with the recommendations of the edition of the Self-Regulation Code published in March 2006) has the task of supporting, through an adequate review process, the assessments and decisions on the part of the board of directors regarding the internal control and risk management system and the approval of periodic financial reports. Specifically, the control and risk committee is entrusted with the following consultative and proposing tasks (as most recently defined by the board of directors, in December 2012), which were broadened to include new responsibilities in addition to those already assigned to it as internal control committee: (i) supporting the board of directors, by formulating specific opinions, in connection with the performance of its tasks delegated under the corporate governance code on internal control and risk management matters; (ii) assessing, together with the executive in charge of preparing the corporate accounting documents, after consulting with the auditing firm and the board of statutory auditors, the proper application of accounting 160 principles and their uniformity for purposes of preparing the periodic financial reports; (iii) expressing opinions on specific aspects regarding the identification of the Issuer’s and the Group’s main risks; (iv) reviewing periodic reports concerning assessments on the internal control and risk management system and the particularly important reports prepared by the “Audit” function; (v) monitoring the independence, adequacy, effectiveness and efficiency of the “Audit” function; (vi) performing the additional tasks assigned to the committee by the board of directors, with particular regard to (a) reviewing the contents of the sustainability report that are relevant for purposes of the internal control and risk management system, issuing in such regard a prior opinion to the board of directors called to approve such report, and (b) reviewing the main corporate rules and procedures related to the internal control and risk management system which are relevant for stakeholders, with particular reference to the Compliance Program prepared pursuant to Legislative Decree No. 231/2001, the Code of Ethics, the “Zero Tolerance for Corruption” Plan and the Human Rights Policies, submitting such documents to the board of directors for approval and assessing any subsequent amendments or supplements to the same; (vii) reporting to the board of directors at least once every six months on the work performed and on the adequacy of the internal control and risk management system. The committee may also ask the “Audit” function to perform checks on specific operating areas, giving simultaneous notice to the chairman of the board of statutory auditors, the chairman of the board of directors and the director in charge of the internal control and risk management system, except where the subject matter of the request specifically concerns such persons’ work. At the date hereof, such committee is composed of members Gianfranco Tosi (acting as chairman), Lorenzo Codogno (to whom the board of directors acknowledged the requisite of appropriate experience in accounting and finance), Mauro Miccio and Angelo Taraborrelli. Compensation Committee The compensation of the directors and of the executives with strategic responsibilities is established in an amount that is sufficient to attract, retain, and motivate people gifted with the professional qualities required for successfully managing the Issuer. A significant portion of the compensation of the executive directors and executives with strategic responsibilities is linked to achieving specific performance objectives, also including non-economic objectives, identified in advance and determined in line with the guidelines set forth in the remuneration policy. The compensation of non-executive directors is commensurate with the commitment required to each of them, taking into account their participation to the committees. In line with the recommendations of the Self-Regulation Code, this compensation is in no way linked to the economic results achieved by the Issuer and the Group and the non-executive directors are not beneficiaries of stock-based incentive plans. No directors may attend those meetings of the committee that are called to resolve upon the proposals regarding their remuneration, to be submitted to the board of directors, except in case of proposals concerning all the members of the committees established within the board of directors. Specifically, the compensation committee is entrusted with the following consultative and propositional tasks (as most recently determined by the board of directors in December 2012): (i) to present proposals to the board of directors for the compensation of the directors and the executives with strategic responsibilities, evaluating periodically the adequacy, the overall consistency and the concrete application of the adopted policy and on the basis of the information provided by the chief executive officer concerning the implementation of such policy with respect to the executives with strategic responsibilities; (ii) to submit to the board of directors proposals for the remuneration of the executive directors and the other directors who hold particular offices, as well as for the identification of performance objectives related to the variable component of such remuneration, monitoring the implementation of the resolutions adopted by the board and verifying, particularly, the actual achievement of performance objectives; and (iii) to examine in advance the annual report on remuneration to be made available to the public in view of the annual shareholders’ meeting called for the approval of the financial statements. As part of its duties, the compensation committee also plays a central role in elaborating and monitoring the performance of the incentive systems (including stock-based plans, if any), addressed to the management and conceived as instruments aimed at attracting and motivating resources with appropriate ability and experience and developing their sense of belonging and ensuring their constant, enduring effort to create value. At the date hereof, the compensation committee is composed of members Fernando Napolitano (acting as chairman), Alessandro Banchi and Pedro Solbes Mira.

161

Related Parties Committee The related parties committee is comprised of at least three independent directors, who are appointed by the board of directors, which appoints one of its members as chairman and also resolves upon the duties assigned to the committee itself, in accordance with the provisions of the specific procedure for the governance of related party transactions, adopted by the board of directors in November 2010. Based upon the above-mentioned procedure and its own organizational rules, the related parties committee essentially has the duty of formulating specific reasoned opinions on the interests of Enel — as well as those of Enel’s directly or indirectly controlled subsidiaries that may be involved from time to time, in the completion of transactions with related parties, expressing an assessment on the advantageousness and substantial fairness of the relevant conditions, after receiving timely and adequate information in advance. In connection with transactions of major importance (as defined in the aforementioned procedure), such committee may also request information and make comments to the chief executive officer and those persons in charge of the negotiations or the inquiry on matters related to the information received. Lastly, the committee decides upon those cases, submitted to its attention by the advisory board established pursuant to the same procedure, in which the identification of a related party is disputed. In the exercise of its duties, the Committee may avail itself, at the expense of Enel, of the assistance of one or more experts chosen by the committee from among persons of proven expertise and competence on the subject matters of the transactions on which the committee is asked to give its opinion, after having verified their independence and the absence of any conflicts of interests. At the date hereof, the committee is comprised of directors Alessandro Banchi (acting as chairman), Pedro Solbes Mira and Gianfranco Tosi. Nomination and Corporate Governance Committee The nomination and corporate governance committee (which until December 2012 operated under the name “corporate governance committee” in accordance with the responsibilities assigned to such committee) is composed of at least three directors, the majority of whom shall be independent. The members of the committee are appointed by the board of directors, which also appoints one of the members of the committee as the chairman, and establishes the duties of the same committee. According to the provisions contained in its organizational rules (as most recently amended by the board of directors in December 2012), the nomination and corporate governance committee, which has preliminary review, consultative and proposing functions, shall assist the board of directors on its assessments and decisions related to the size and composition of the board of directors, as well as the corporate governance of the Issuer and the Group. As part of these duties, the committee has the following specific tasks (which have been expanded to include additional tasks with respect to those assigned to it as corporate governance committee):  formulating opinion to the board of directors on the size and composition of the board of directors and expressing recommendations on the professional figures whose participation on the board of directors would be deemed advisable. In this regard, the committee oversees/handles the board review process, formulating to the board of directors proposals on granting mandates to companies with specialized experience in the sector, identifying the matters to be assessed and defining the modalities and timetable of the process;  expressing recommendations to the board of directors on the contents of the policy on the maximum number of mandates within boards of directors and control over other large companies which could be considered compatible with an effective performance of the mandate as director of the Issuer;

 expressing recommendations to the board of directors on problematic issues related to the application of the restriction on competition imposed upon the directors pursuant to Article 2390 of the Italian Civil Code, if the shareholders’ meeting, for organizational reasons, has authorized on a general and preliminary basis exemptions from such restriction;  proposing to the board of directors candidates for the role of director, taking into account possible reports received from the shareholders:  in the event of co-optation, if it is necessary to replace independent directors;  if, in the event of the renewal of the board of directors, it is envisaged that it will not be possible to attain from the lists submitted by the shareholders the required number of directors, such that the outgoing board may therefore express its own candidatures to be submitted to the shareholders’ meeting;  if, in the case of a renewal of the board of directors, the outgoing board decides to avail itself of the right provided under the bylaws to submit its own list;  monitoring the evolution of the legal framework, as well as national and international best practices, in relation to corporate governance, updating the board of directors in case of significant changes; 162

 verifying that the corporate governance system adopted by the Issuer and the Group is compliant with applicable laws, recommendations set forth under the corporate governance code and national and international best practices;  submitting to the board of directors proposals for the adjustment of the aforementioned corporate governance system, if it is deemed necessary or appropriate;  board of directors examining in advance the annual report on corporate governance to be included in the documentation of the annual financial statements;  assessing the adequacy of the commitment dedicated to matters of corporate social responsibility; examining the general structure of the sustainability report and the structure of its contents, as well as the completeness and transparency of the disclosure provided on matters of corporate social responsibility through such financial statement, issuing in such regard a prior opinion to the board of directors called upon to approve such document (it should be noted that such task has been assigned to the committee starting in the December 2012, while until such time, it had been assigned to the internal control committee); and  performing additional tasks assigned it by the board of directors. At the date hereof, such committee is composed of directors Paolo Andrea Colombo (acting as Chairman), Lorenzo Codogno, Mauro Miccio, Fernando Napolitano and Angelo Taraborrelli. Implementation of corporate governance rules The corporate governance structure in place at Enel and in the group of companies that it controls reflects the principles set forth in the Self-Regulation Code of listed companies promoted by Borsa Italiana as well as the recommendations made in this regard by CONSOB and more generally international best practice. In addition to forming the above-described committees, Enel has, among other things, identified an officer responsible for relationships with institutional investors and other shareholders and adopted internal rules for the discipline of transactions with related parties (as of December 19, 2006), the latter substituted in November 2010 and effective starting from January 2011. Adoption of a compliance program In July 2002, the board of directors approved a compliance program pursuant to the requirements of Legislative Decree No. 231 of June 8, 2001 which introduced into the Italian legal system a regime of administrative (but in fact criminal) liability with respect to companies for several kinds of crimes committed by the directors, executives, or employees in the interest of or for the benefit of the companies themselves. Such compliance program, which was regularly updated, is consistent with the guidelines on the subject established by industry associations and represents another step towards strictness, transparency, and a sense of responsibility in both internal relations and those with the external world. At the same time, the compliance program offers shareholders adequate assurance of efficient and fair management. Executive in charge of preparing the corporate accounting documents Pursuant to the provisions of Article 154-bis, paragraph 1, of the Italian Unified Financial Act, and the articles of association, in June 2006, the board of directors, after receiving the opinion of the board of statutory auditors, provided for the appointment of an “executive in charge of preparing the corporate accounting documents.” Such person, Luigi Ferraris, the head of the Issuer’s Accounting, Finance and Control department, fulfils (as ascertained by the board of directors in June 2007) the relevant professional requirements introduced into the articles of association in May 2007, in compliance with the Italian Unified Financial Act. The duty of such executive is to establish appropriate administrative and accounting procedures for the preparation of the financial statements of Enel and the Group’s consolidated financial statements, and all other financial documents. Principal officers The following table sets forth the Group’s principal officers (officers with strategic responsibilities) and their positions as of the date of this Offering Circular.

Name Position

Marco Arcelli ...... Head, Up-Stream Gas Department Andrea Brentan ...... Head, Iberia and Latin America Division Antonio Cardani...... Head, Global Business Services Department Francesco Buresti ...... Head, Global Procurement Department Francisco De Borja Acha Besga ...... Head, Legal and Corporate Affairs Department Massimo Cioffi ...... Head, Human Resources and Organization Department 163

Name Position

Gianluca Comin ...... Head, External Relations Department Francesca Di Carlo ...... Head, Audit Department Luigi Ferraris ...... Head, Administration, Finance and Control Department Livio Gallo ...... Head, Infrastructure and Networks Division Claudio Machetti ...... Head, Group Risk Management Department Giovanni Mancini ...... Head, Generation, Energy Management and Sales Italy Division Simone Mori ...... Head, Regulatory, Environment and Innovation Department and Head of Carbon Strategy Department Rafael López Rueda ...... Head, Information and Communication Technology Department Francesco Starace ...... Head, Renewable Energy Division Carlo Tamburi ...... Head, International Division Livio Vido ...... Head, Engineering and Research Division Conflicts of interest At the date hereof, neither any member of the board of directors or the board of statutory auditors nor any of the Group’s principal officers has any private interests in conflict with his duties arising from his or her office or position within the Group.

Directors’, statutory auditors’ and officers’ compensation and benefits The following table sets forth the compensation (in Euro) paid by the Group to members of the board of directors, members of the board of statutory auditors and principal officers in 2012.

Non-monetary Other Name Fees benefits Incentives compensation Total

Board of directors: Paolo Andrea Colombo ...... 750,000 600,000 37,000 1,387,000 Fulvio Conti ...... 1,423,357 68,634 2,525,036 4,017,027 Alessandro Banchi ...... 85,000 — — 57,000 142,000 Lorenzo Codogno ...... 85,000 — — 57,000 142,000 Mauro Miccio ...... 85,000 — — 62,000 147,000 Fernando Napolitano ...... 85,000 — — 62,000 147,000 Pedro Solbes Mira ...... 85,000 — — 47,000 132,000 Angelo Taraborelli ...... 85,000 — — 56,000 141,000 Gianfranco Tosi ...... 85,000 — — 66,000 151,000 Subtotal ...... 2,768,357 68,634 3,125,036 444,000 6,406,027

Board of statutory auditors: Sergio Duca ...... 85,000 — — — 85,000 Carlo Conte ...... 75,000 — — — 75,000 Gennaro Mariconda ...... 75,000 — — — 75,000 Subtotal ...... 235,000 — — — 235,000

Principal officers: ...... 8,629,192 1,443,659 8,948,124 — 19,020,975

Total ...... 11,632,549 1,512,293 12,073,160 444,000 25,662,002

Severance payments At the date hereof, employment contracts entered into with members of the corporate, management or supervisory bodies of Enel or its subsidiaries that provide for severance payments do not exist, except in respect of Fulvio Conti, the chief executive officer and general manager. Corporate agreements provide that Mr. Conti is to be paid, in the case of termination of the management employment relationship subsequent to termination of his directorship relationship due to a justified resignation or a termination without just cause, an indemnification equal to two years of annual fixed compensation for each of the chief executive officer and general manager relationships. The receipt of such indemnification is deemed to substitute for notice requirements and imply the general manager’s waiver of rights under the collective labor contract for corporate officers.

164

Current shareholdings of directors and officers The following table sets forth, for each member of the board of directors, each member of the board of statutory auditors and, on an aggregate basis, the Group’s principal officers, their current holdings in Enel or Group companies, as well as stock options or other rights.

Number of Number of options / Name Position shares held other rights Exercise period

Board of directors: Paolo Andrea Colombo ...... Chairman 59,452(1) — — Fulvio Conti ...... Chief Executive Officer 844,532(2) 1,587,326(7) December 31, 2014 Alessandro Banchi ...... Director — — — Lorenzo Codogno ...... Director — — — Mauro Miccio ...... Director — — — Fernando Napolitano ...... Director 110,540(3) — — Pedro Solbes Mira ...... Director — — — Angelo Taraborelli ...... Director 20,500(4) — — Gianfranco Tosi ...... Director — — —

Board of statutory auditors: Sergio Duca ...... Chairman of Board of Auditors — — — Lidia D’Alessio ...... Statutory Auditor — — — Gennaro Mariconda ...... Statutory Auditor 257,860(5) — — (6) (7) Principal officers: ...... 711,281 6,679,885 December 31, 2014

(1) Enel shares (of which 51,566 are held personally and 7,886 by the spouse). (2) Of which 683,132 are Enel shares (674,525 are held personally and 8,607 by spouse), 200 are Endesa shares and 161,200 are EGP shares (137,200 are held personally and 24,000 by the spouse). (3) Of which 76,540 are Enel shares and 34,000 are EGP shares (24,000 are held personally and 10,000 by the spouse). (4) Enel shares. (5) Enel shares (of which 248,284 are held personally and 9,576 by the spouse’s heirs). (6) Of which 355,781 are Enel shares, 500 are Endesa shares and 355,000 are EGP shares. (7) Taking into account current market trend, such options, although theoretically exercisable until December 31, 2014, are for the time being out of the money (since the strike price is set at €7.118). At the date hereof, the parties indicated in the table above have not agreed to any restrictions on the sale of the shares held by them.

165

PRINCIPAL SHAREHOLDERS

As of the date of this Offering Circular, the principal shareholder of Enel is the MEF, which owns 31.24 percent of Enel’s shares, and, based on available information, no other shareholders held more than two percent of the share capital of Enel. Pursuant to Italian law and as set forth in Enel’s bylaws, no person, other than an Italian governmental entity, may hold more than three percent of the share capital of Enel. As a result, as of the date of this Offering Circular Enel is subject to the de facto control of the MEF, which has sufficient votes to exercise a dominant influence at Enel’s ordinary shareholders’ meetings, pursuant to Article 93 of the Italian Unified Financial Act. Pursuant to Article 19, paragraph 6, of Decree Law No. 78/2009 (subsequently converted into Law No. 102/2009), the discipline concerning management and coordination of companies outlined in Article 2497 of the Italian Civil Code is not applicable to the MEF. Enel’s share capital amounts to €9,403,357,795, fully paid-in and divided into 9,403,357,795 issued and outstanding ordinary shares, listed on the mercato telematico azionario, a stock exchange regulated and managed by Borsa Italiana, with a nominal value of €1 each. The following table sets forth the MEF’s beneficial ownership of Enel or Group companies.

Name Share Ownership

Number Percent

The Ministry of Economy and Finance of the Republic of Italy ...... 2,937,972,731 31.24%

166

RELATED-PARTY TRANSACTIONS

The relationships between the Group and its related parties primarily consist of business transactions relating to the sale and purchase of products and the provision of services. They fall within the ordinary activities carried out by the Group. The Issuer believes that all of the transactions between the Group and its related parties take place at market prices. In December 2006, the board of directors adopted, pursuant to the Italian Civil Code and the Self-Regulation Code, an internal regulation that set forth the procedures for approving and carrying out transactions with related parties entered into by the Issuer or by its subsidiaries, in order to guarantee the transparency and the correctness, both substantive and procedural, of such transactions. In 2011, a procedure has been implemented within the Group aimed at governing the approval and conclusion of related party transactions carried out by Enel, either directly or through its subsidiaries, in order to ensure the transparency and fairness of such transactions from both a substantive and procedural/formal standpoint. Such procedure was approved by the board of directors in November 2010 in compliance with the provisions of Article 2391-bis of the Italian Civil Code and the implementing regulation enacted by CONSOB (issued in March 2010). Such procedure replaces the regulation for transactions with related parties approved by the board of directors in December 2006. For more details on the transactions with related parties, see Note 8 to the 2013 Unaudited Condensed Interim Consolidated Financial Statements and Note 36 to the 2012 Audited Consolidated Financial Statements.

167

DESCRIPTION OF THE SECURITIES

The U.S.$1,250,000,000 capital securities due 2073 (the “Securities”, which expression shall, unless the context otherwise requires, include any additional securities issued pursuant to the Indenture and as described below) will be issued pursuant to an indenture (the “Indenture”), dated as of September 24, 2013, between Enel S.p.A (the “Issuer”) and Citibank, N.A., London Branch, as trustee (the “Trustee”, which expression shall, where the context so requires, include its successor(s) as Trustee), paying agent (the “Paying Agent”, which term shall, where the context so requires, include any substitute or additional paying agents from time to time under the Indenture), Calculation Agent (as defined below), transfer agent and registrar. Holders of the Securities, whether or not represented by Receipts (as defined below) (the “Holders”), are deemed to have notice of, and are bound by, all provisions of the Indenture. By accepting delivery of Securities in the form of Receipts, the Holders acknowledge and agree to become subject to the procedures for Italian substitute tax as such procedures may be amended from time to time (the “Tax Certification Procedures”) set forth in the tax compliance agency agreement dated on or about September 24, 2013 as amended from time to time by the parties thereto, between Monte Titoli S.p.A. (“Monte Titoli”), Acupay System LLC (“Acupay”) and the Issuer and set forth in Exhibit D to the Indenture (the “TCA Agreement”). The following description is a summary of the material provisions of the Indenture and the Securities. It does not restate the Indenture and the Securities in their entirety, and the information set forth herein is subject to the detailed provisions of, and definitions in, the Indenture, copies of which are available for inspection during normal business hours at the registered office of the Trustee, being at the date of issue of the Securities at Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB United Kingdom. The Securities will not be registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) and may not be sold or otherwise transferred except pursuant to registration under the U.S. Securities Act or in accordance with Rule 144A thereunder (“Rule 144A”) or in a transaction that is otherwise exempt from the registration requirements under the U.S. Securities Act and will bear a legend to this effect. The Indenture is not required to be nor will it be qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and will not incorporate by reference any of the provisions of the Trust Indenture Act. For purposes of this “Description of the Securities”, references to the “Issuer” refer only to the Issuer (or its successor, as applicable) and not to any of its subsidiaries unless otherwise specified. The registered holder of a Security will be treated as the owner of it for all purposes. Only registered holders will have rights under the Indenture. General The Issuer will issue Securities in the aggregate principal amount of U.S.$1,250,000,000. The Securities will be issued in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. The Securities are direct, unsecured and subordinated obligations of the Issuer. See “— Status and Subordination” below. Upon issuance of the Securities in global form (each a “Global Security”), the book-entry interests in each Global Security will be represented by one or more receipts (the “Receipts”) issued by Citibank, N.A., London Branch as receipt issuer (the “Receipt Issuer”) registered in the name of Cede & Co. as nominee for The Depository Trust Company, or its successor (“DTC”), for the benefit of DTC’s Participants (as defined below), pursuant to the deposit agreement dated September 24, 2013 among the Issuer, the Receipt Issuer and all Holders and Beneficial Owners of the Receipts issued thereunder as amended from time to time (the “Deposit Agreement”) and representing the rights and beneficial interests in the Securities. Holding of beneficial interests in the Securities in the form of Receipts is limited to persons, called participants, that have an account with DTC (each a “DTC Participant”) or persons that may hold interests through DTC Participants. Beneficial Owners (as defined below) of interests in the Receipts shall be deemed to be parties to, and subject to the provisions of, the Deposit Agreement and shall be subject to the Tax Certification Procedures. In certain circumstances, the Securities may be redeemed at the Issuer’s option. The Securities are not subject to repayment at the option of the Holders. There is no sinking fund for the Securities. The Issuer may, without the consent of the Holders, create and issue additional securities (the “Additional Securities”) ranking equally with the Securities in all respects (or in all respects save for the first payment of interest thereon), including having the same CUSIP and/or ISIN number, so that such Additional Securities shall be consolidated and form a single series with the Securities under the Indenture. Any such Additional Securities will have the same terms as to status, redemption or otherwise as the Securities. Unless the context otherwise requires, in this “Description of the Securities” references to the “Securities” include the Securities and any Additional Securities that are issued.

168

Paying Agent The Issuer reserves the right, following consultation with the Trustee, at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents provided that: (i) there will at all times be a Paying Agent; (ii) so long as the Securities are listed on any stock exchange or admitted to trading by any relevant authority, there will at all times be a Paying Agent with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or other relevant authority; (iii) there will at all times be a Paying Agent in a Member State of the European Union that is not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive; and (iv) there will at all times be a Paying Agent in a jurisdiction within Europe, other than the jurisdiction in which the Issuer is incorporated. Notice of any termination or appointment of, and any changes in Paying Agents, will be given to the Holders promptly by the Issuer in accordance with the provisions under the Indenture described under “— Notices”. Book-entry; Delivery and Form Global Securities Each Global Security will evidence such of the outstanding Securities as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Securities from time to time reflected on the register maintained by the Registrar for such purposes and that the aggregate principal amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions and purchases and cancellations. The Securities shall be issued initially in dematerialized form in the Securities Depositary and will be evidenced by an X Global Security and an N Global Security, which shall be deposited with, and registered in the name of, the Securities Depositary (as defined below), or its nominee, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

“X Global Security(ies)” means the Global Security(ies) bearing the Global Security Legend and the Rule 144A Legend (each as defined in the Indenture), which will (i) evidence the Securities outstanding at the time, held by participants at the Securities Depositary that act as second-level banks (as such term is defined in Decree No. 239 (as defined below)) or employ the services of an Italian Tax Representative (as such term is defined in Decree No. 239) (both herein referred to as a “Second-level Bank”) and (ii) be registered in the name of the Securities Depositary, or its nominee, and delivered to, and held by, the Securities Depositary. “N Global Security(ies)” means the Global Security(ies) bearing the Global Security Legend, the Rule 144A Legend and the Tax Restricted Legend (as defined in the Indenture) and which will (i) evidence the Securities outstanding at such time, beneficially held by Non-Eligible Beneficial Owners of N Receipts, and (ii) be registered in the name of the Securities Depositary, or its nominee, and delivered to, and held by, the Securities Depositary. Interests in the N Global Securities shall be held at the Securities Depositary only by the Receipt Issuer for the benefit of Beneficial Owners of interests in N Receipts. “Securities Depositary” means Monte Titoli, unless Monte Titoli notifies the Issuer that it is unwilling or unable to continue to act as Securities Depositary and the Issuer appoints an alternate Italian custody institution to become the successor Securities Depositary pursuant to the applicable provisions of the Indenture, and thereafter “Securities Depositary” shall mean such successor Securities Depositary. “Beneficial Owner” means any person owning a beneficial interest in the Securities (other than the Securities Depositary and the Receipt Issuer), including, in the case of Securities held in the form of Receipts, DTC Participants, and their account holders, that hold beneficial interests in the Securities in the form of Receipts (for the avoidance of doubt, it being understood that for purposes of the Tax Certification Procedures, and other places herein where the term “Beneficial Owner” is used in connection with the determination of eligibility of a person for the receipt of interest and other income under the Securities free and clear of Italian substitute tax, the term “Beneficial Owner” shall refer to (i) ultimate beneficiaries of payments under the Securities and (ii) Institutional Investors). “Eligible Beneficial Owner” means a Beneficial Owner that is eligible to receive interest free of Italian substitute tax in respect of the Securities (and the Receipts). “Non-Eligible Beneficial Owner” means a Beneficial Owner that is not, or has ceased to be, eligible to receive interest free of Italian substitute tax in respect of the Securities (and the Receipts) or does not comply (directly or indirectly pursuant to

169 actions or omissions of Financial Intermediaries through which such Beneficial Owner holds its beneficial interest in the Securities in the form of Receipts) with the Tax Certification Procedures and has failed to correct such defect in compliance with the Tax Certification Procedures on a timely basis. “Financial Intermediary” means any and all (i) DTC Participants and (ii) securities brokers and dealers, banks, trust companies, clearing corporations or systems and similar entities that clear through or maintain a direct or indirect relationship with DTC Participants. “Institutional Investors” means those entities that under Italian Legislative Decree No. 239 of 1 April 1996 as amended and/or supplemented as at the Issue Date (“Decree No. 239”) and ensuing regulations are considered to have as their main activity the making and managing of investments for their own account or on behalf of third parties, other than entities established to manage investments made by a limited number of investors or to enable investors resident in Italy or countries that do not allow for a satisfactory exchange of information with Italy to benefit from the exemption to the payment of Italian substitute tax. “Registrar” means Citibank, N.A., London Branch.

Definitive Registered Securities Definitive Registered Securities that are issued upon transfer of a book-entry interest or a Definitive Registered Security, or in exchange for a book-entry interest or a Definitive Registered Security, shall be issued solely in the limited circumstances contemplated in, and in accordance with the terms of, the Indenture. See “Book-entry, Delivery and Form” in this Offering Circular. “Definitive Registered Security” means a definitive Security in registered form issued by the Issuer in exchange for interests in a Global Security. Global Receipts The Receipt Issuer will initially hold book-entry interests in the X Global Security and the N Global Security on behalf of the Beneficial Owners of the corresponding Receipts. The Global Securities will be registered in the name of the Securities Depositary and deposited therewith with the beneficial interests in each Global Security to be credited initially to the third- party securities account of the Receipt Issuer. The Receipt Issuer will issue, in accordance with the terms of the Deposit Agreement, an X Global Receipt and an N Global Receipt, registered in the name of Cede & Co., as nominee of DTC, and deposited with Citibank, N.A., London Branch as the custodian for DTC, each representing beneficial interests in the book- entry interests in the X Global Security and the N Global Security, respectively (together, the “Global Receipts”). DTC will record, by appropriate entries in its book-entry registration and transfer system, the respective amounts payable in respect of interests in the Global Receipts evidencing beneficial interests in the Securities that are subject to the Deposit Agreement. Transfers of Receipts will be effected through the book-entry facilities of DTC and through the DTC Participants. See “Book- Entry, Delivery and Form” of this Offering Circular. After the initial placement of Receipts, holders who are qualified institutional buyers as defined in Rule 144A (“QIBs”), will have the right, subject to the terms of the Deposit Agreement to request the conversion of the Receipts into corresponding book-entry interests in the X Global Security to be held in accounts at Securities Depositary participants who act as Second-level Banks on behalf of QIBs. Similarly, QIBs will be able, subject to the terms of the Deposit Agreement and the Tax Certification Procedures, to convert their X Securities into X Receipts (if such QIBs are Eligible Beneficial Owners) or N Receipts (if such QIBs are Non-Eligible Beneficial Owners), in each case into the corresponding Receipt to be held in an account at DTC. See “Book-entry, Delivery and Form” of this Offering Circular. “X Global Receipt(s)” means the Global Receipt(s) bearing the Rule 144A Legend and deposited with or on behalf of, and registered in the name of, DTC or its nominee that is maintained for the purpose of holding book-entry interests in X Receipts, which represent beneficial interests in the X Global Securities. “X Receipt(s)” means the Receipt(s) evidenced by an X Global Receipt or by a Definitive Registered Receipt bearing the Rule 144A Legend for so long as it is applicable. “N Global Receipt(s)” means the Global Receipt(s) bearing the Rule 144A Legend and the Tax Restricted Legend and deposited with or on behalf of, and registered in the name of, DTC or its nominee that is maintained for the purpose of holding book-entry interests in N Receipts, which represent beneficial interests in the N Global Securities. “N Receipt(s)” means the Receipt(s) evidenced by an N Global Receipt or by a Definitive Registered Receipt bearing a Tax Restricted Legend and the Rule 144A Legend for so long as it is applicable.

170

Definitive Registered Receipts Beneficial Owners of the Receipts will receive Definitive Registered Receipts in registered form issued by the Issuer in exchange for Global Receipts (a “Definitive Registered Receipt”) solely in the limited circumstances contemplated in, and in accordance with the terms of, the Deposit Agreement. See “Book-entry, Delivery and Form” in this Offering Circular.

Maturity Unless previously redeemed or repurchased and cancelled by the Issuer, the principal amount of the Securities will mature on September 24, 2073 (the “Maturity Date”) in an amount equal to the principal amount, with accrued interest to (but excluding) the Maturity Date and any outstanding Arrears of Interest (as defined below). Interest Rates and Interest Amount Unless previously redeemed or repurchased and cancelled as described herein and subject to the further provisions described in “— Interest Deferral” below, the Securities will bear interest on their principal amount as follows: (i) From and including September 24, 2013 (the “Issue Date”) to but excluding September 24, 2023 (the “First Reset Date”), the Securities will bear interest at a rate of 8.750% per annum, payable semi-annually in arrears on each Interest Payment Date (as defined below) commencing on March 24, 2014. (ii) From and including the First Reset Date to but excluding the Maturity Date, for each Reset Period (as defined below) the Securities will bear interest at a rate equal to the relevant 5 year Swap Rate (as defined below), plus: (a) in respect of the Reset Periods commencing on the First Reset Date, September 24, 2028, September 24, 2033 and September 24, 2038, 6.130% per annum; and (b) in respect of any other Reset Period, 6.880% per annum, all as determined by the calculation agent (the “Calculation Agent”) and payable semi-annually in arrears on each Interest Payment Date, commencing March 24, 2014. “5 year Swap Rate” means, in respect of a Reset Period, the semi-annual mid-swap rate as displayed on the Reset Screen Page on the relevant Reset Interest Determination Date. If the relevant 5 year Swap Rate does not appear on the Reset Screen Page on the relevant Reset Interest Determination Date, the Calculation Agent shall request each of the Reset Reference Banks to provide it with its 5 year Swap Rate Quotation and will determine the 5 year Swap Rate as the Reset Reference Bank Rate on the relevant Reset Interest Determination Date. If at least three quotations are provided by the Reset Reference Banks, the 5 year Swap Rate will be determined by the Calculation Agent on the basis of the arithmetic mean of the quotations provided, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest). If fewer than three quotations are provided by the Reset Reference Banks, the 5 year Swap Rate will be determined by the Calculation Agent by obtaining the semi-annual mid-swap rate as displayed on the Reset Screen Page on the last calendar day prior to such relevant Reset Interest Determination Date on which such quotation was displayed. “5 year Swap Rate Quotation” means, in relation to any Reset Period, the arithmetic mean of the bid and offered rates for the semi-annual fixed leg (calculated on a 30/360 day count basis) of a fixed-for-floating U.S. dollar interest rate swap which (i) has a term of 5 years commencing on the relevant Reset Date, (ii) is in an amount that is representative of a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market, and (iii) has a floating leg based on the 3-month LIBOR rate (calculated on an Actual/360 day count basis).

“Interest Period” means the period from and including the Issue Date to but excluding the first Interest Payment Date and each successive period from and including an Interest Payment Date to but excluding the next succeeding Interest Payment Date, ending on the Maturity Date. “Reset Date” means the First Reset Date and each date falling on the fifth anniversary thereafter. “Reset Interest Determination Date” means, in respect of any Reset Period, the day falling two Business Days prior to the beginning of the relevant Reset Period. “Reset Period” means each period from and including the First Reset Date to but excluding the next following Reset Date and thereafter from and including each Reset Date to but excluding the next following Reset Date. “Reset Reference Bank Rate” means the percentage rate determined by the Calculation Agent on the basis of the 5 year Swap Rate Quotations provided by the Reset Reference Banks to the Calculation Agent at approximately 11:00 a.m. (London time) on the relevant Reset Interest Determination Date.

171

“Reset Reference Banks” means five major banks in the interbank market selected by the Calculation Agent in agreement with the Issuer. “Reset Screen Page” means the Reuters screen “ISDAFIX3” as at 11:00 a.m. (London time). Unless the Issuer elects not to pay interest in accordance with the provisions described under “— Deferral”, interest on Securities will be payable semi-annually in arrears on March 24 and September 24 each year, commencing on March 24, 2014 (each, an “Interest Payment Date”) to Holders of record on the Regular Record Date (with respect to Securities not represented by Receipts) and on the Receipt record date set by the Receipt Issuer) immediately preceding the related Interest Payment Date.

If the due date for any payment in respect of any Security is not a Business Day (as defined below), the Holder thereof will not be entitled to payment of the amount due until the next succeeding Business Day, and will not be entitled to any further interest or other payment as a result of any such delay. Interest on the Securities will be calculated on the basis of a 360-day year of twelve 30-day months. The term “Business Day” means a day which is a day on which commercial banks are open for general business (including dealing in foreign exchange and foreign currency deposits) in London, Milan and New York City. Interest Deferral Interest which accrues during an Interest Period ending on but excluding an interest payment date will be due and payable on that Interest Payment Date unless the Issuer, by notice to (x) the Holders in accordance with “— Notices” below and (y) the Trustee and Paying Agent at least five, but not more than 30, Business Days prior to the relevant Interest Payment Date, elects in its sole discretion to defer payment in whole, but not in part, of the interest accrued on the Securities in respect of any Interest Period. If the Issuer makes such an election, it shall have no obligation to make such payment and any failure to pay shall not constitute a default by the Issuer or any other breach of obligations under the Securities or for any other purpose. Any interest not paid on an Interest Payment Date and deferred in accordance with this paragraph shall so long as the same remains outstanding constitute “Arrears of Interest” and shall be payable as described below, but Arrears of Interest shall not itself bear interest. Optional Payment of Arrears of Interest The Issuer may pay outstanding Arrears of Interest, in whole (but not in part) at any time, upon giving not less than 10 and not more than 15 Business Days’ notice to the Holders in accordance with “— Notices” below (which notice shall be irrevocable and will oblige the Issuer to pay the relevant Arrears of Interest on the payment date specified in such notice) and to the Trustee and the Paying Agent at least five, but not more than 30, Business Days prior to the relevant due date for payment. Mandatory Payment of Arrears of Interest All (but not some only) of any outstanding Arrears of Interest in respect of all Securities for the time being outstanding shall become due and payable in full and shall be paid by the Issuer on the first occurring Mandatory Settlement Date. Notice of the occurrence of any Mandatory Settlement Date shall be given to the Holders in accordance with “— Notices” below and to the Trustee and Paying Agent at least five, but not more than 30, Business Days prior to the relevant due date for payment. Upon the occurrence of a Mandatory Settlement Date, the Issuer will promptly deliver to the Trustee a certificate signed by a duly authorized representative of the Issuer confirming the occurrence thereof. This paragraph does not form a part of this “Description of the Securities” in this Offering Circular. If a Mandatory Settlement Date does not occur prior to the calendar day which is the fifth anniversary of the Interest Payment Date on which the relevant deferred interest payment was first deferred, it is the intention, though not an obligation, of the Issuer to pay all outstanding Arrears of Interest (in whole but not in part) on the next following Interest Payment Date. “Mandatory Settlement Date” means the earliest of: (i) the fifth Business Day following the date on which a Mandatory Arrears of Interest Settlement Event occurs; (ii) following any deferred interest payment, on the next scheduled Interest Payment Date on which the Issuer does not elect to defer all of the interest accrued in respect of the relevant Interest Period; (iii) the date on which the Securities are redeemed (in whole) or repaid in accordance with the terms of the Indenture; and (iv) the date on which an order is made or a resolution is passed for the commencement of any Insolvency Proceedings in respect of the Issuer, or the date on which the Issuer takes any corporate action for the purposes of opening, or initiates or consents to, Insolvency Proceedings in respect of itself. 172

A “Mandatory Arrears of Interest Settlement Event” shall have occurred if: (i) a dividend (either interim or final) or any other distribution or payment was validly resolved on, declared, paid or made in respect of any Junior Securities, except where such dividend, distribution or payment was contractually required to be declared, paid or made under the terms of such Junior Securities; or (ii) a dividend (either interim or final) or any other distribution or payment was validly resolved on, declared, paid or made in respect of any Parity Securities, except where such dividend, distribution or payment was contractually required to be declared, paid or made under the terms of such Parity Securities; or (iii) the Issuer or any Subsidiary has repurchased, purchased, redeemed or otherwise acquired any Junior Securities, except where (x) such repurchase, purchase, redemption or acquisition was undertaken in connection with the satisfaction by the Issuer or any Subsidiary of its respective obligations under (i) any share buy-back program existing at the Issue Date or (ii) any stock option plan or free share allocation plan reserved for directors, officers and/or employees of the Issuer or any associated hedging transaction or (y) such repurchase, purchase, redemption or acquisition is contractually required to be made under the terms of such Junior Securities; or (iv) the Issuer or any Subsidiary has repurchased, purchased, redeemed or otherwise acquired any Parity Securities, except where (w) such repurchase, purchase, redemption or acquisition was undertaken in connection with the satisfaction by the Issuer or any Subsidiary of its respective obligations under (i) any share buy-back program existing at the Issue Date or (ii) any stock option plan or free share allocation plan reserved for directors, officers and/or employees of the Issuer or any associated hedging transaction or (x) such repurchase, purchase, redemption or acquisition is contractually required to be made under the terms of such Parity Securities or (y) such repurchase, purchase, redemption or acquisition is effected as a public tender offer or public exchange offer at a purchase price per security which is below its par value. “Subsidiary” means any entity which is a subsidiary (società controllata) of the Issuer within the meaning of Article 2359 of the Italian Civil Code and Article 93 of Legislative Decree No. 58 of 24 February 1998, as amended. “Italian Civil Code” means the Italian civil code, enacted by Royal Decree No. 262 of 16 March 1942, as subsequently amended and supplemented. “Insolvency Proceedings” means any insolvency proceedings or proceedings equivalent or analogous thereto under the laws of any applicable jurisdiction, including, but not limited to, bankruptcy (fallimento), composition with creditors (concordato preventivo) (including pre-concordato pursuant to Article 11(6) of the Italian Bankruptcy Law, forced administrative liquidation (liquidazione coatta amministrativa), extraordinary administration (amministrazione straordinaria) and extraordinary administration of large companies in insolvency (amministrazione straordinaria delle grandi imprese in stato di insolvenza), debt restructuring agreements pursuant to Article 182-bis of the Italian Bankruptcy Law (including the procedure described under Article 182-bis(6) of the Italian Bankruptcy Law), the undertaking of any court approved restructuring with creditors or the making of any application (or filing of documents with a court) for the appointment of an administrator or other receiver (curatore), manager administrator (commissario straordinario o liquidatore) or other similar official under any applicable law. “Italian Bankruptcy Law” means Royal Decree No. 267 of 1942, as amended from time to time. “Junior Securities” means: (i) the ordinary shares (azioni ordinarie) of the Issuer; (ii) any other class of the Issuer’s share capital (including savings shares (azioni di risparmio) and preferred shares (azioni privilegiate)); and (iii) (a) any securities of the Issuer (including strumenti finanziari issued under Article 2346 of the Italian Civil Code); and (b) any securities issued by a company other than the Issuer which have the benefit of a guarantee or similar instrument from the Issuer, which securities (in the case of (iii)(a)) or guarantee or similar instrument (in the case of (iii)(b) rank or are expressed to rank pari passu with the claims described under (i) and (ii) above and/or junior to the Securities. “Parity Securities” means: (i) any securities or other instruments issued by the Issuer which rank, or are expressed to rank, pari passu with the Issuer’s obligations under the Securities and include the Issuer’s €1,250,000,000 Capital Securities due 2074 (ISIN: XS0954675129), and the Issuer’s £400,000,000 Capital Securities due 2075 (ISIN: XS0954674825); and

173

(ii) any securities or other instruments issued by a company other than the Issuer which have the benefit of a guarantee or similar instrument from the Issuer, which guarantee or similar instrument ranks or is expressed to rank pari passu with the Issuer’s obligations under the Securities. “Group” means the Issuer and its Subsidiaries from time to time.

Redemption As explained further below, the Issuer may redeem the Securities in the circumstances, in the manner and at the prices described below. Holders have no right to require the Issuer to redeem the Securities. Unless previously redeemed or purchased and cancelled as provided below, the Issuer will redeem the Securities on the Maturity Date at their principal amount together with any accrued interest up to (but excluding) the Maturity Date and any outstanding Arrears of Interest. The Securities will cease to bear interest from (and including) the calendar day on which they are due for redemption. If the Issuer fails to redeem the Securities when due, interest will continue to accrue as provided in the Indenture. Optional Redemption The Issuer may redeem all of the Securities (but not some only) on any Reset Date, in each case at their principal amount together with any accrued interest up to (but excluding) the relevant Reset Date and any outstanding Arrears of Interest, on giving not less than 30 and not more than 60 calendar days’ prior notice to the Holders in accordance with “— Notices” below (which notice shall be binding and irrevocable). Early Redemption upon the Occurrence of an Accounting Event If an Accounting Event (as defined below) occurs, then the Issuer may, subject to having given not less than 30 nor more than 60 calendar days’ notice to the Holders in accordance with “— Notices” below (which notice shall be binding and irrevocable), redeem the Securities in whole but not in part at any time at the applicable Early Redemption Price (as defined below). Prior to the giving of any such notice of redemption, the Issuer will deliver to the Trustee in a form and with content reasonably satisfactory to the Trustee (i) a certificate signed by a duly authorized representative of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to redeem the Securities in accordance with the terms of the Indenture have been satisfied and (ii) a copy of the opinion, letter or report of a recognized accountancy firm of international standing, appointed by the Issuer, as set forth in the definition of Accounting Event below, and the Trustee shall be entitled to accept the above certificate and opinion, letter or report as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event the same shall be conclusive and binding on the Holders. “Accounting Event” means that as a result of a change in the accounting practices or principles applicable to the Issuer, which currently are the international accounting standards (International Accounting Standards — IAS and International Financial Reporting Standards — IFRS) issued by the International Accounting Standards Board (IASB), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC), adopted by the European Union pursuant to Regulation (EC) 1606/2002 (“IFRS”), which becomes effective after the Issue Date, the obligations of the Issuer in respect of the Securities can no longer be recorded as a “financial liability” in accordance with accounting practices or principles applicable to the Issuer at the time of the next Financial Statements, and a recognized accountancy firm of international standing, acting upon instructions of the Issuer, has delivered an opinion, letter or report addressed to the Issuer to that effect, and the Issuer cannot avoid the foregoing by taking reasonable measures available to it. As used herein, the term “Early Redemption Price” will be the amount determined by the Calculation Agent on the fourth Business Day prior to the relevant Early Redemption Date as follows: (i) in the case of a Withholding Tax Event at any time, 100% of the principal amount of the Securities then outstanding; or

(ii) in the case of an Accounting Event, a Rating Methodology Event, a Substantial Repurchase Event or a Tax Deductibility Event, either: (a) 101% of the principal amount of the Securities then outstanding if the Early Redemption Date is on or prior to the First Reset Date; or (b) 100% of the principal amount of the Securities then outstanding if the Early Redemption Date is after the First Reset Date,

174 and in each case together with any accrued interest up to, but excluding, the relevant Early Redemption Date and any outstanding Arrears of Interest. “Early Redemption Date” means the date of redemption of securities pursuant to the provisions described under “— Redemption”. “Financial Statements” means either of: (i) audited annual consolidated financial statements of the Issuer; or (ii) unaudited condensed consolidated half-year financial statements of the Issuer which are subject to a formal “review” from an independent auditor, in each case prepared in accordance with IFRS or any successor accounting standards applicable to the Issuer. Early Redemption following a Rating Methodology Event If a Rating Methodology Event (as defined below) occurs, then the Issuer may, subject to having given not less than 30 nor more than 60 calendar days’ notice to the Holders in accordance with “— Notices” below (which notice shall be binding and irrevocable), redeem the Securities in whole but not in part at any time at the applicable Early Redemption Price. Prior to the giving of any such notice of redemption, the Issuer will deliver to the Trustee in a form and with content reasonably satisfactory to the Trustee (i) a certificate signed by a duly authorized representative of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to redeem the Securities in accordance with the terms of the Indenture have been satisfied; and (ii) a copy of the Rating Agency Confirmation relating to the applicable Rating Methodology Event unless the delivery of such Rating Agency Confirmation would constitute a breach of the terms on which such confirmation is delivered to the Issuer, and the Trustee shall be entitled to accept the above certificate and, if applicable, copy of the Rating Agency Confirmation as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event the same shall be conclusive and binding on the Holders. “Rating Agency” means any of Moody’s Investors Service Limited, S&P, Fitch and any other rating agency substituted for any of them by the Issuer with the prior written approval of the Trustee and, in each case, any of their respective successors to the rating business thereof. “Rating Agency Confirmation” means a written confirmation from a Rating Agency which has assigned ratings to the Issuer on a basis sponsored by the Issuer which is either received by the Issuer directly from the relevant Rating Agency or indirectly via publication by such Rating Agency. “Rating Methodology Event” shall be deemed to have occurred if the Issuer has received a Rating Agency Confirmation stating that, due to an amendment, clarification or change in the “equity credit” criteria of such Rating Agency, which amendment, clarification or change has occurred after the Issue Date, that the Securities are eligible for a level of equity credit that is lower than the level or equivalent level of equity credit assigned to the Securities by such Rating Agency on the Issue Date. “equity credit” shall include such other nomenclature as any Rating Agency may use from time to time to describe the degree to which an instrument exhibits the characteristics of an ordinary share.

“Fitch” means Fitch Ratings Limited. “S&P” means Standard & Poor’s Rating Services, a division of The McGraw Hill Companies, Inc. Reacquisition The Issuer or any Subsidiary may at any time purchase Securities in any manner and at any price. Such Securities may be held, reissued, resold or, at the option of the Issuer, surrendered to the Paying Agent for cancellation. Substantial Repurchase Event Redemption If a Substantial Repurchase Event (as defined below) occurs, then the Issuer may, subject to having given not less than 30 nor more than 60 calendar days’ notice to the Holders in accordance with “— Notices” below (which notice shall be irrevocable and binding), redeem the Securities in whole but not in part at any time, at the applicable Early Redemption Price. “Substantial Repurchase Event” shall be deemed to have occurred if, prior to the giving of the relevant notice of redemption, at least 90% of the aggregate principal amount of the Securities issued on the Issue Date has been purchased by or on behalf of the Issuer or a Subsidiary and has been cancelled.

175

Early Redemption following certain Tax Events Withholding Tax Event If, following the Issue Date, (A) as a result of a Tax Law Change, the Issuer has or will become obliged to pay Additional Amounts in respect of the Securities and such obligation cannot be avoided by the Issuer taking reasonable measures available to it or (B) a person into which the Issuer is merged or to whom it has conveyed, transferred or leased all or substantially all of its assets and who has been substituted in place of the Issuer as principal debtor under the Securities is required to pay Additional Amounts in respect of the Securities and such obligation cannot be avoided by such person taking reasonable measures available to it, unless the sole purpose of such a merger, conveyance, transfer or lease would be to permit the Issuer to redeem the Securities (each such event being a “Withholding Tax Event”), then the Issuer may, upon giving not less than 30 nor more than 60 calendar days’ prior notice to the Holders in accordance with “— Notices” below (which notice shall be binding and irrevocable), redeem in whole but not in part the Securities then outstanding, at any time at the applicable Early Redemption Price, provided that no such notice shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts, were a payment in respect of the Securities then due. Prior to the giving of any such notice of redemption, the Issuer will deliver to the Trustee in a form and with content reasonably satisfactory to the Trustee (i) a certificate signed by a duly authorized representative of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to redeem the Securities in accordance with the terms of the Indenture have been satisfied; and (ii) an opinion of independent legal or tax advisers, appointed by the Issuer, of recognized standing in the jurisdiction of incorporation of the Issuer to the effect that the Issuer has or will become obliged to pay Additional Amounts as a result of (in the case of paragraph (A) of the definition of Withholding Tax Event) a Tax Law Change or (in the case of paragraph (B) of the definition of Withholding Tax Event) the relevant merger, conveyance, transfer or lease, and the Trustee shall be entitled to accept the above certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event the same shall be conclusive and binding on the Holders. Tax Deductibility Event If, as a result of a Tax Law Change, payments of interest by the Issuer in respect of the Securities are no longer, or within 90 calendar days of the date of any opinion provided pursuant to section (ii) of the below paragraph will no longer be, deductible in whole or in part for Italian corporate income tax purposes, and the Issuer cannot avoid the foregoing by taking reasonable measures available to it (a “Tax Deductibility Event”) (for the avoidance of doubt, a Tax Deductibility Event shall not occur if payments of interest by the Issuer in respect of the Securities are not deductible in whole or in part for Italian corporate income tax purposes solely as a result of general tax deductibility limits set forth by Article 96 of Italian Presidential Decree No. 917 of 22 December 1986, as amended as at (and on the basis of the general tax deductibility limits calculated in the manner applicable as at) the Issue Date), then the Issuer may, upon giving not less than 30 nor more than 60 calendar days’ prior notice to the Holders in accordance with “— Notices” below (which notice shall be binding and irrevocable), redeem in whole but not in part the Securities then outstanding at any time at the applicable Early Redemption Price. Prior to giving of any such notice of redemption, the Issuer will deliver to the Trustee in a form and with content reasonably satisfactory to the Trustee (i) a certificate signed by a duly authorized representative of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to redeem the Securities in accordance with the terms of the Indenture have been satisfied; and (ii) an opinion of an independent legal or tax adviser, appointed by the Issuer, of recognized standing in the jurisdiction of incorporation of the Issuer to the effect that payments of interest by the Issuer in respect of the Securities are no longer, or within 90 calendar days of the date of that opinion will no longer be, deductible in whole or in part for Italian corporate income tax purposes as a result of a Tax Law Change, and the Trustee shall be entitled to accept the above certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event the same shall be conclusive and binding on the Holders. “Tax Jurisdiction” means the Republic of Italy and/or such other taxing jurisdiction to which the Issuer becomes subject or any political subdivision or any authority thereof or therein having power to tax. “Tax Law Change” means (i) any amendment to, clarification of, or change in, the laws or treaties (or any regulations thereunder) of a Tax Jurisdiction affecting taxation, (ii) any governmental action or (iii) any amendment to, clarification of, or change in the official position or the interpretation of such governmental action that differs from the previously generally accepted position, in each case, by any legislative body, court, governmental authority or regulatory body, which amendment, clarification, change or governmental action is effective, on or after the Issue Date.

176

The following does not form a part of the terms of the Securities: The Issuer intends (without thereby assuming a legal obligation) that it will redeem or repurchase the Securities only to the extent that the part of the aggregate principal amount of the Securities to be redeemed or repurchased which was assigned “equity credit” (or such similar nomenclature used by S&P from time to time) at the time of the issuance of the Securities does not exceed such part of the net proceeds received by the Issuer or any Subsidiary (as defined below) of the Issuer during the 360-day period prior to the date of such redemption or repurchase from the sale or issuance of securities by the Issuer or such Subsidiary to third party purchasers (other than Group entities of the Issuer) which is assigned by S&P “equity credit” (or such similar nomenclature used by S&P from time to time) at the time of sale or issuance of such securities (but taking into account any changes in hybrid capital methodology or another relevant methodology or the interpretation thereof since the issuance of the Securities), unless: (i) the rating assigned by S&P to the Issuer is at least “BBB” (or such similar nomenclature then used by S&P) and the Issuer is of the view that such rating would not fall below this level as a result of such redemption or repurchase, or

(ii) in the case of a repurchase, such repurchase is of less than (a) 10% of the aggregate principal amount of the Securities originally issued in any period of 12 consecutive months or (b) 25% of the aggregate principal amount of the Securities originally issued in any period of 10 consecutive years, or (iii) the Securities are redeemed pursuant to a Tax Deductibility Event or a Withholding Tax Event or an Accounting Event or a Rating Methodology Event which results from an amendment, clarification or change in the “equity credit” criteria by S&P; or (iv) the Securities are not assigned an “equity credit”by S&P (or such similar nomenclature then used by S&P) at the time of such redemption or repurchase, or (v) such redemption or repurchase occurs on or after the Reset Date falling on September 24, 2043. Events of Default The following will be Events of Default (each an “Event of Default”) with respect to the Securities: (i) default is made by the Issuer in the payment of any interest which is due and payable in respect of the Securities and the default continues for a period of 30 days or more; or (ii) a judgment is given for the voluntary or judicial winding up, dissolution or liquidation of the Issuer or restructuring of the Issuer’s liabilities pursuant to any Insolvency Proceedings or under any applicable bankruptcy or insolvency law or if the Issuer is liquidated for any other reason (otherwise than for the purpose of a solvent amalgamation, merger or reconstruction under which the assets and liabilities of the Issuer are assumed by the entity resulting from such amalgamation, merger or reconstruction and such entity assumes the obligations of the Issuer in respect of the Securities and an opinion of an independent legal adviser of recognized standing in Italy has been delivered to the Trustee confirming the same prior to the effective date of such amalgamation, merger or reconstruction). The Indenture provides that if an Event of Default occurs, the Issuer shall, without notice from the Trustee, be deemed to be in default under the Indenture and the Securities and in such case, (i) the Securities shall immediately become due and payable at their principal amount together with any accrued and unpaid interest up to but excluding the date on which the Securities become so due and payable and any outstanding Arrears of Interest and (ii) the Trustee at its sole discretion may (subject to its being indemnified and/or secured to its satisfaction) institute steps in order to obtain a judgment against the Issuer for any amounts due in respect of the Securities, including the institution of Insolvency Proceedings against the Issuer or the filing of a proof of claim and participation in any Insolvency Proceedings or proceedings for the liquidation, dissolution or winding-up of the Issuer. Enforcement Non-payment of principal If default is made by the Issuer in the payment of any principal which has become due and payable in respect of the Securities in accordance with the Indenture and the default continues for a period of 10 days or more, the Trustee at its sole discretion may (subject to its being indemnified and/or secured to its satisfaction), institute steps in order to obtain a judgment against the Issuer for any amounts due in respect of the Securities, including the institution of Insolvency Proceedings against the Issuer or the filing of a proof of claim and participation in any Insolvency Proceedings or proceedings for the liquidation, dissolution or winding-up of the Issuer.

177

Trustee The Trustee may at its sole discretion and without further notice, take such proceedings against the Issuer as it may think fit to enforce the provisions of the Indenture and the Securities, but in no event shall the Issuer, by virtue of the initiation of any such proceedings, be obliged to pay any sum or sums sooner than the same would otherwise have been payable by it. The Trustee shall not be bound to take any action described under “— Events of Default” or “— Enforcement”, or any other action or steps under or pursuant to the Indenture or the Securities unless (a) it has been so requested in writing by the holders of at least one-quarter in principal amount of the Securities then outstanding and (b) it has been indemnified and/or secured to its satisfaction. Holders No Holder shall be entitled to proceed directly against the Issuer or to institute any Insolvency Proceedings against the Issuer or to file a proof of claim and participate in any Insolvency Proceedings or institute proceedings for the liquidation, dissolution or winding-up of the Issuer unless the Trustee, having become bound so to proceed, fails so to do within a reasonable period and the failure shall be continuing, in which case the Holder shall have only such rights against the Issuer as those which the Trustee would have been entitled to exercise as described under “— Events of Default” and “— Enforcement”. Payments Subject as provided below, payments will be made by credit or transfer to an account in U.S. dollars maintained by the payee with, or, at the option of the payee, by a check in U.S. dollars drawn on, a bank in New York City. Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment or other laws and regulations to which the Issuer or its agents agree to be subject, but without prejudice to the provisions described under “— Payment of Additional Amounts”. For the avoidance of doubt, any and all payments of interest on the Securities held in the form of Receipts shall be subject to the terms of the Tax Certification Procedures as in effect from time to time. Payment procedures Payments of principal in respect of each Security (whether or not in global form) will be made by transfer to the Designated Account (as defined below) of the Holder (or the first named of joint holders) of the Security appearing in the register of Holders maintained by the registrar at the close of business on the third business day (being for this purpose a day on which banks are open for general business in the city where the specified office of the registrar is located) before the due date for any such payment. If (i) a Holder does not have a Designated Account or (ii) the principal amount of the Securities held by a Holder is less than U.S.$200,000, payment will instead be made by a check in U.S. dollars drawn on a Designated Bank (as defined below). For these purposes, “Designated Account” means the account maintained by a holder with a Designated Bank and identified as such in the register of Holders and “Designated Bank” means a bank in New York City.

Payments of interest shall be made, subject to the Tax Certification Procedures (if applicable), by check or electronic transfer drawn in the currency in which the payment is due on or, upon application by a Holder to the specified office of the Paying Agent not later than the 15th day before the due date for any such payment, by transfer to an account denominated in U.S. dollars maintained by the payee with a bank which is a member of the U.S. Federal Reserve System in the United States of America and, in the case of interest payable on redemption upon surrender (or, in the case of part payment only, endorsement) of the relevant Security. Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid, subject to the Tax Certification Procedures in the case of Securities held in the form of Receipts, to the person in whose name that Security is registered at the close of business on the Regular Record Date for such interest. Subject to the foregoing, each Security delivered upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. “Regular Record Date” means for the interest payable on any Interest Payment Date with respect to any Security, such date that is the fourth Business Day prior to the relevant Interest Payment Date relating to such Security. Payments on Global Securities For so long as any Securities are held in global form, the Issuer (either directly or through one of its Paying Agents) will make payments due on the Global Securities to Monte Titoli as registered holder of the Global Securities (or to its order). Monte Titoli will in turn distribute (or arrange the distribution of) such payments to its participants, including, in the case of Securities represented by Receipts, to the Receipt Issuer, for onward transmission to DTC, as registered holder of the Global Receipts, for so long as any Receipts are held in global form. DTC’s practice upon timely receipt of any payment of 178 principal, interest or other distribution in respect of the Receipts is to credit participants’ accounts in amounts proportionate to their respective beneficial interests in such Receipts as shown on the records of DTC. Payments by participants in Monte Titoli to owners of beneficial interests in any Securities held through participants in Monte Titoli will be governed by standing customer instructions and customary practices and be the responsibility of those participants in Monte Titoli. Payment to Monte Titoli is the responsibility of the Issuer. Payments by DTC Participants to owners of beneficial interests in Receipts held through DTC Participants will be governed by standing customer instructions and customary practices and will be the responsibility of those DTC Participants. Payment by Monte Titoli to the Receipt Issuer, on behalf of DTC, is the responsibility of Monte Titoli. Disbursement of such payments to DTC Participants is the responsibility of DTC. Disbursement of payments to Beneficial Owners of Securities is the responsibility of direct and indirect participants in Monte Titoli. None of the Issuer or any of the Paying Agents or transfer agent or registrar will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial interests in any Securities or for maintaining, supervising or reviewing any records relating to those beneficial interests. The Issuer has been advised by DTC that through DTC’s accounting and payment procedures DTC will, in accordance with its customary procedures, credit interest payments received by DTC on any Interest Payment Date based on holdings of DTC Participants of the beneficial interests in the Receipts on the close of business on the Receipt record date established by the Receipt Issuer in respect of the applicable interest payment for the Securities represented by the Receipts. The Receipt Issuer has undertaken in the Deposit Agreement to use commercially reasonable efforts to establish the interest record date for the Receipts to coincide with the interest record date for the corresponding Securities.

Discharge of Issuer payment obligations The Issuer’s payment obligations under the Securities, whether held in Receipt form or otherwise, will only be discharged upon delivery of all such payments relating to the Securities by the Issuer or its designated Paying Agent(s) to Monte Titoli (or to its order). Certain Duties of the Trustee In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorization, determination or substitution), the Trustee shall have regard to the general interests of the Holders as a class (but shall not have regard to any interests arising from circumstances particular to individual Holders whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Holders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof and the Trustee shall not be entitled to require, nor shall any Holder be entitled to claim, from the Issuer, the Trustee or any other person any indemnification or payment in respect of any tax consequences of any such exercise upon individual Holders except to the extent already provided for under “— Payment of Additional Amounts” and/or any undertaking or covenant given in addition to, or in substitution for, such provisions in the Indenture. Payment of Additional Amounts All payments made by the Issuer under, or with respect to, the Securities will be made free and clear of and without withholding or deduction for, or on account of, any present or future taxes or duties, assessments or governmental charges of whatever nature (collectively, “Taxes”) imposed, levied, collected or assessed by or on behalf any Tax Jurisdiction unless the withholding or deduction of such Taxes is required by law. If any deduction or withholding for, or on account of, any Taxes of any Tax Jurisdiction will at any time be required by law from any payments made with respect to the Securities, including payments of principal, redemption price, interest or premium, if any, the Issuer will pay (together with such payments) such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received in respect of such payments by each Holder and Beneficial Owner of the Securities, as the case may be, after such withholding or deduction (including any such deduction or withholding from such Additional Amounts) will equal the amounts which would have been received in respect of such payments in the absence of such withholding or deduction; provided, however, that no such Additional Amounts will be payable in relation to any payment in respect of any Securities: (i) presented for payment: (a) in any Tax Jurisdiction; or (b) by or on behalf of a Holder who is liable for such Taxes in respect of such Security by reason of his having some connection with any Tax Jurisdiction other than the mere holding of such Security; or (c) by or on behalf of a Holder who would be able to avoid such withholding or deduction by presenting the relevant Security to another Paying Agent in a Member State of the European Union; or 179

(d) more than 30 days after the Relevant Date except to the extent that a Holder would have been entitled to an Additional Amount on presenting the same for payment on such thirtieth day; or (e) by or on behalf of a Holder if such withholding or deduction may be avoided by such Holder producing a declaration or any other statement including, but not limited to, a declaration of residence or non-residence, but fails to do so; or

(ii) in respect of payments made by the Issuer with respect to any Security for or on account of Imposta Sostitutiva pursuant to Decree No. 239 or, for the avoidance of doubt, Italian Legislative Decree No. 461 of November 21, 1997, in each case as amended and/or supplemented as at the Issue Date and in all circumstances in which the procedures set forth in Decree No. 239 in order to benefit from a tax exemption have not been met or complied with or, in respect of interests in the Securities held through an X Global Receipt, in the event that a DTC Participant of a Beneficial Owner does not comply with the Tax Certification Procedures and Imposta Sostitutiva is applied in respect of the payment of interest or principal in respect of the interests in the Securities held by all Beneficial Owners through such DTC Participant on an Interest Payment Date as provided in the Tax Certification Procedures; or (iii) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26th-27th November 2000; or (iv) where such withholding or deduction is required to be made pursuant to Law Decree 30 September 1983, No. 512 converted into law with amendments by Law 25 November 1983, No. 649; or (v) where such withholding is required by application of Sections 1471 — 1474 of the U.S. Internal Revenue Code of 1986, as amended, including any administrative regulations or intergovernmental agreements relating thereto; or (vi) in the event of payment by the Issuer to a non-Italian resident Holder, to the extent that the Holder is resident in a country which does not allow for a satisfactory exchange of information with the Italian authorities. For purposes of the foregoing, the “Relevant Date” means, in respect of any payment, the date on which such payment first becomes due, but if the full amount of the monies payable has not been received by the Trustee or, as the case may be, the Paying Agent, on or prior to such due date, it means the first date on which, the full amount of such monies having been so received, notice to that effect has been duly given to the Holders. Any reference in the Indenture or the Securities to any amounts in respect of the Securities shall be deemed also to refer to any Additional Amounts which may be payable under the Indenture or the Securities. Status and Subordination Status The Securities constitute direct, unsecured and subordinated obligations of the Issuer and rank and will at all times rank pari passu without any preference among themselves and with Parity Securities and senior only to Junior Securities. The Securities constitute obbligazioni pursuant to Articles 2410 et seq. of the Italian Civil Code. Subordination The obligations of the Issuer to make payment in respect of principal and interest on the Securities, including its obligations in respect of any Arrears of Interest, will, in the event of the winding-up, insolvency, dissolution or liquidation of the Issuer, rank: (i) senior only to the Issuer’s payment obligations in respect of any Junior Securities; (ii) pari passu among themselves and with the Issuer’s payment obligations in respect of any Parity Securities; and (iii) junior to all other payment obligations of the Issuer, present and future, whether subordinated (including any claims pursuant to Article 2411, first paragraph, of the Italian Civil Code) or unsubordinated,

in each case except as otherwise required by mandatory provisions of applicable law. To the extent and in the manner permitted by applicable law, no Holder may exercise, claim or plead any right of set-off, counterclaim, compensation or retention in respect of any amount owed to it by the Issuer in respect of, or arising from, the Securities and each Holder will, by virtue of his holding of any Security, be deemed to have waived all such rights of set-off, counterclaim, compensation or retention. The Issuer may not set off any claims it may have against the Holders against any of its obligations under the Securities.

180

Meetings of Holders The Indenture contains provisions consistent with the laws, legislation, rules and regulations of the Republic of Italy (including without limitation Legislative Decree No. 58 of 24 February 1998, as amended) for convening meetings of the Holders to consider any matter affecting their interests, including any modifications of any provisions of the Indenture. According to the laws, legislation, rules and regulations of the Republic of Italy, such meetings will be validly held as a single call meeting or, if the Issuer’s by-laws provide for multiple calls, as a multiple call meeting, if (i) in the case of a single call meeting, there are one or more persons present, being or representing Holders holding at least one-fifth of the aggregate nominal amount of the Securities for the time being outstanding, or such higher quorum as may be provided for in the Issuer’s by-laws, or (ii) in the case of a multiple call meeting, (a) there are one or more persons present being or representing Holders holding not less than one-half of the aggregate nominal amount of the Securities for the time being outstanding; (b) in case of an adjourned meeting, there are one or more persons present being or representing Holders holding more than one-third of the aggregate nominal amount of the Securities for the time being outstanding; and (c) in the case of any further adjourned meeting, one or more persons present being or representing Holders holding at least one-fifth of the aggregate nominal amount of the Securities for the time being outstanding, provided that the Issuer’s by-laws may in each case (to the extent permitted under the applicable laws and regulations of the Republic of Italy) provide for a higher quorum. The majority to pass a resolution at any meeting (including, where applicable, an adjourned meeting) will be at least two-thirds of the aggregate nominal amount of the outstanding Securities represented at the meeting; provided however that (A) certain proposals, as set out in Article 2415 of the Italian Civil Code (including, for the avoidance of doubt, (a) any modification of the method of calculating the amount payable or modification of the date of maturity or redemption or any date for payment of interest or, where applicable, of the method of calculating the date of payment in respect of any principal or interest in respect of the Securities, or change of the subordination provisions of the Indenture, and (b) any alteration of the currency in which payments under the Securities are to be made or the denomination of the Securities), may only be sanctioned by a resolution passed at a meeting of the Holders by the higher of (i) one or more persons holding or representing not less than one-half of the nominal principal amount of the outstanding Securities, and (ii) one or more persons holding or representing not less than two-thirds of the Securities represented at the meeting and (B) the Issuer’s by-laws may in each case (to the extent permitted under applicable Italian law) provide for higher majorities. Resolutions passed at any meeting of the Holders shall be binding on all Holders, whether or not they are present at the meeting. In accordance with the Italian Civil Code, a rappresentante comune, being a joint representative of Holders, may be appointed in accordance with Article 2417 of the Italian Civil Code in order to represent the Holders’ interest hereunder and to give execution to the resolutions of the meeting of the Holders. Amendment, Supplement and Waiver Subject to applicable Italian law, including the provisions described under “— Meetings of Holders”, the Indenture and the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and, subject to certain exceptions, any existing Event of Default or compliance with any provisions thereof may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities). However, subject to applicable Italian law, including the provisions described under “— Meetings of Holders”, without the consent of Holders of at least 75% of the aggregate principal amount of the Securities then outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities), no amendment, supplement or waiver may, among other things: (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement, or waiver; (ii) reduce the stated rate, or extend the stated time for payment, of interest on any Security; (iii) reduce the principal, or extend the maturity date, of any Security; (iv) reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed, in each case as described above under “— Redemption”; (v) make any Security payable in a currency other than U.S. dollars; (vi) impair the right of any Holder to receive payment of, premium, if any, principal of or interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities; (vii) to waive an Event of Default in the payment of principal of, or interest, Additional Amounts or premium, if any, on, the Securities; (viii) make any change in the provisions of the Securities or the Indenture relating to Additional Amounts that adversely affects the rights of any Holder of such Securities in any material respect or amends the terms of such Securities in a 181

way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation to withhold or deduct Taxes so described thereunder unless the Issuer agrees to pay Additional Amounts, if any, in respect thereof; or (ix) make any change in the amendment or waiver provisions of the Indenture which require each Holder’s consent. Notwithstanding the foregoing, without the consent of any Holder, the Issuer and the Trustee may amend the Indenture and the Securities to: (i) cure any ambiguity, omission, defect or inconsistency; (ii) provide for the assumption by a successor corporation of the obligations of the Issuer under the Indenture and the Securities; (iii) provide for uncertificated Securities in addition to or in place of certificated Securities; (iv) add to the covenants of the Issuer for the benefit of the Holders or surrender any right or power conferred upon the Issuer; (v) conform the text of the Indenture to any provision of this “Description of the Securities”; (vi) make any change that does not adversely affect the rights of any Holder; (vii) evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee pursuant to the requirement thereof; (viii) create and issue Additional Securities ranking equally with the Securities in all respects (or in all respects save for the first payment of interest thereon), so that such Additional Securities shall be consolidated and form a single series with the Securities; or (ix) comply with applicable law or regulation.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment, supplement or waiver. It is sufficient if such consent approves the substance of the proposed amendment, supplement or waiver. A consent to any amendment, supplement or waiver under the Indenture by any Holder of Securities given in connection with a tender of such Holder’s Securities will not be rendered invalid by such tender. In determining whether the Holders of the requisite principal amount of Securities have given any request, demand, authorization, consent, vote or waiver in connection with the Indenture and the Securities, Securities owned by the Issuer or any Subsidiary of the Issuer shall be disregarded and deemed not to be outstanding for these purposes. The Issuer will publish a notice of any material amendment, supplement or waiver in accordance with the provisions of the Indenture described under “— Notices”. Any modifications, amendments or waivers to the Indenture or to the terms and conditions of the Securities will be conclusive and binding on all Holders of Securities, whether or not they have given such consent or were present at such meeting, and on all future holders of Securities, whether or not notation of such modifications, amendments or waivers is made upon the Securities. Any instrument given by or on behalf of any Holder of a Security in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent Holders of such Security. Substitution of the Issuer The Trustee may, without the consent of the Holders, agree with the Issuer to the substitution in place of the Issuer (or of any previous substitute as provided for in the Indenture) as the principal debtor under the Securities and the Indenture of another company, being any entity that will succeed to, or to which the Issuer (or those of any previous substitute under the terms of the Indenture) will transfer, all or substantially all of its assets and business (or any previous substitute under the terms of the Indenture) by operation of law, contract or otherwise, subject to (i) the Trustee being satisfied that such substitution does not result in the substituted issuer having an entitlement, as at the date on which such substitution becomes effective, to redeem the Securities in accordance with the provisions set forth under “— Redemption — Early Redemption upon the occurrence of an Accounting Event”, “— Redemption — Early Redemption following a Rating Methodology Event” and “— Redemption — Early Redemption following Certain Tax Events”, (ii) the Trustee being satisfied that the interests of the Holders will not otherwise be materially prejudiced by the substitution, and (iii) certain other conditions set out in the Indenture being satisfied. The Issuer has covenanted in the Indenture that, for so long as the Securities remain outstanding, it will not consolidate or merge with another company or firm or sell or lease all or substantially all of its assets to another company unless (i) if the Issuer merges out of existence or sells or leases all or substantially all of its assets, the other company assumes all the then- 182 existing obligations of the Issuer (including, without limitation, all obligations under the Securities and the Indenture), either by law or contractual arrangements and (ii) certain other conditions set out in the Indenture are complied with. As long as the Securities are admitted to trading on the regulated market of the Irish Stock Exchange and/or listed on the Official List of the Irish Stock Exchange, in the case of such a substitution, the Issuer will give notice of any substitution as contemplated herein to the Irish Stock Exchange and, as soon as reasonably practicable but in any event not later than 30 calendar days after the execution of such documents required by, and the compliance with such other requirements of, the Indenture in connection with the substitution, notice of such substitution will be given to the Holders by the Issuer in a form previously approved by the Trustee in accordance with “— Notices” herein, in which event the substitution shall be conclusive and binding on the Holders.

Approval, Listing and Admission to Trading Application has been made for the admission of the Securities to listing on the Official List of the Irish Stock Exchange and to trading on its regulated market. The Issuer has agreed to use its best endeavors to maintain any such listing and admission to trading of the Securities for so long as any of the Securities remain outstanding or, if it is unable to do so having used its best endeavors, use its best endeavors to obtain and maintain a quotation or listing of the Securities on such other stock exchange or exchanges or securities market or markets as the Issuer may (with the prior written approval of the Trustee) decide and shall also upon obtaining a quotation or listing of the Securities on such other stock exchange or exchanges or securities market or markets enter into a supplement to the Indenture to effect such consequential amendments to the Indenture as the Trustee may require or as shall be requisite to comply with the requirements of any such stock exchange or securities market. Tax Certification Procedures The Issuer agrees, so long as any principal amount of the Securities held in the form of Receipts remains outstanding, to, insofar as it is reasonably practicable, maintain, implement or arrange for the implementation of the Tax Certification Procedures, as such procedures may be amended, supplemented, modified or replaced from time to time in accordance with the terms of the TCA Agreement (the “Tax Certification Procedures”), that will facilitate the collection of information concerning the Securities held in the form of Receipts or the Beneficial Owners thereof so long as such collection is required under Italian law to allow payment of interest on the Global Securities represented by Receipts free and clear of Italian substitute tax. Notices Notices to Holders will be given by first-class mail postage prepaid to the last addresses of such Holders as they appear in the registration books of the registrar. Such notices will be deemed to have been given on the date of such mailing. So long as the Global Securities or Receipts are held in their entirety on behalf of a clearing system, or any of its participants, there may be substituted for the notice described above the delivery of the relevant notices to the clearing system, and its participants, for communication by them to the entitled accountholders. Any such notice delivered in this manner shall be deemed to have been given to the accountholders on the third day after the day on which the said notice was given to the clearing system, and its participants. If and for so long as the Securities are admitted to trading on the regulated market of the Irish Stock Exchange and/or listed on the official list of the Irish Stock Exchange, notices will also be published on the website of the Irish Stock Exchange: www.ise.ie or in another manner of publication in accordance with the Irish laws and regulations implementing Directive 2004/109/EC and, if so required, in accordance with the rules of such exchange. The Issuer shall also ensure that notices are duly published in a manner that complies with the rules and regulations of any stock exchange or the relevant authority on which the Securities are for the time being listed. Any such notice published in this manner will be deemed to have been given on the date of the first publication. If publication as provided above is not practicable, notice will be given in such other manner, and shall be deemed to have been given on such date, as the Trustee may approve. Prescription Claims against the Issuer for the payment of principal and interest in respect of the Securities shall become prescribed 10 years (in the case of principal) and five years (in the case of interest) from the due date for payment thereof.

Indemnification The Indenture contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking action unless indemnified to its satisfaction.

183

Governing Law The Securities and the Indenture are governed by, and construed in accordance with, the laws of the State of New York, except that the subordination provisions will be governed by Italian law. The provisions of the Indenture concerning the meeting of Holders and the appointment of the rappresentante comune in respect of the Securities are subject to compliance with Italian law. The Issuer will initially designate CT Corporation as its authorized agent for service of process in any legal suit, action or proceeding arising out of or relating to the performance of its obligations under the Indenture and the Securities brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for those purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding. The Issuer has, in the Indenture, waived any objection to such courts on the grounds that they are an inconvenient or inappropriate forum. The Trustee and the Holders may take any proceedings against the Issuer in any other court of competent jurisdiction and concurrent proceedings in any number of jurisdictions, to the extent permitted by law. General The Indenture sets out the terms under which the Trustee may retire or be removed and replaced. Such terms will include, among others, (1) that the Trustee may be removed at any time by the Holders of a majority in principal amount of the then outstanding Securities, or may resign at any time by giving written notice to the Issuer and (2) that if the Trustee at any time (a) has or acquires a conflict of interest that is not eliminated, or (b) becomes incapable of acting as Trustee or becomes insolvent or bankrupt, then the Issuer may remove the Trustee. If Monte Titoli, or a successor Securities Depositary, notifies the Issuer that it is unwilling or unable to continue to act as Securities Depositary, the Issuer agrees that it shall use reasonable efforts to appoint a successor Securities Depositary as soon as practicable and to provide notice to Acupay and the Holders of any such successor Securities Depositary, provided that the Issuer is at such time organized under the laws of the Republic of Italy and that the applicable laws and regulations relating to exemption from application of the Imposta Sostitutiva require maintenance of a Second-level Bank.

184

BOOK-ENTRY, DELIVERY AND FORM

The Global Securities will be issued to, and registered in the name of, Monte Titoli, as operator of the Italian centralized securities clearing system in registered form, in dematerialized form and without interest coupons. Beneficial interests in the Securities may be held through DTC only in the form of Receipts. Such beneficial interests in the Securities will only be sold to QIBs in reliance on Rule 144A and will be evidenced by one or more Global Receipts in registered form. Beneficial interests in the Global Receipts will represent an equivalent amount in the Global Securities. Upon issuance of the Global Securities to Monte Titoli by the Issuer in dematerialized form, Monte Titoli will be recorded as the holder of the Global Securities on the books of the Trustee. All of the book-entry interests in such Global Securities will initially be credited by Monte Titoli to the third-party securities account in Monte Titoli of Citibank, N.A. London Branch, as a direct participant therein. Citibank, N.A., London Branch, as Receipt Issuer, will issue one or more Global Receipts to evidence the Receipts to DTC, the United States central securities depositary, and will hold the Global Receipts, which will be registered in the name of Cede & Co., as DTC’s nominee, for the benefit of DTC’s participants. The Receipt Issuer will record Cede & Co., as nominee of DTC, on its books as the initial registered holder of the Global Receipts and will also record any subsequent registration and transfer of the Global Receipts. The Receipt Issuer may not register the transfer of the Global Receipts except as a whole by DTC or its nominee to DTC or another nominee of DTC or a successor of DTC or a nominee of that successor. Holdings of book-entry interests in the Global Receipts on the books of DTC is limited to persons, called participants, that have accounts with DTC or persons that may hold interests through Financial Intermediaries. Upon the issuance of the Global Receipts, DTC will credit on its book-entry registration and transfer system the applicable participants’ accounts with the respective principal or face amounts held by the participants. Dealers, underwriters or agents participating in the distribution of the Securities in the form of Receipts will designate the accounts to be credited. Ownership of the Receipts will be shown on, and the transfer of ownership interests in the Receipts will be effected only through, records maintained by DTC, with respect to interests in Receipts of participants, and on the records of participants in DTC, with respect to interests in Receipts of persons holding through participants in DTC. Each person owning a beneficial interest in the Securities evidenced by a Global Receipt must rely on the procedures of DTC and, if that person is not a participant, on the procedures of the DTC Participant through which the person owns its beneficial interest, to exercise any rights of a Beneficial Owner of the Securities. See “Risk Factors — The Global Securities will be held in book-entry only form through Monte Titoli and the Receipts will be held in book-entry only form through DTC. Therefore, you will have to rely on the respective procedures of these clearing systems as well as those of the Receipt Issuer for transfer, payment and to exercise any rights and remedies.” To facilitate subsequent transfers of Receipts, the Global Receipts will be registered in the name of DTC’s nominee, Cede & Co. DTC has no knowledge of the actual Beneficial Owners of the Receipts. DTC’s records reflect only the identity of the direct participants in DTC to whose accounts beneficial interests in the Receipts are credited, which may or may not be the Beneficial Owners. The participants in DTC will remain responsible for keeping account of their holdings on behalf of their customers.

The Issuer (either directly or through one of its agents) will make payments due on the Securities to Monte Titoli as registered holder of the Global Securities (or to its order), in immediately available funds. Monte Titoli will in turn distribute (or arrange the distribution of) such payments for Securities, with respect to Securities represented by Receipts, to the Receipt Issuer for onward transmission to DTC, as well as to the other holders of Securities held in Monte Titoli and not evidenced by Receipts. DTC’s practice upon timely receipt of any payment of principal, interest or other distribution in respect of the Securities represented by Receipts is to credit participants’ accounts in amounts proportionate to their respective beneficial interests in such Receipts as shown on the records of DTC as of the close of business on the applicable interest record date. Payments by DTC Participants to owners of beneficial interests in any Receipts held through DTC Participants will be governed by standing customer instructions and customary practices and be the responsibility of those DTC Participants. Payment to Monte Titoli is the responsibility of the Issuer. Disbursement by Monte Titoli to its participants, including to the Receipt Issuer, is the responsibility of Monte Titoli. Disbursement by the Receipt Issuer to DTC is the responsibility of the Receipt Issuer. Disbursement of such payments to direct participants in DTC is the responsibility of DTC. Disbursement of payments to beneficial owners of Receipts is the responsibility of DTC Participants. Neither the Issuer nor any of the Managers will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial interests in any Securities or for maintaining, supervising or reviewing any records relating to those beneficial interests.

185

The Issuer has been advised by DTC that through DTC’s accounting and payment procedures DTC will, in accordance with its customary procedures, credit interest payments received by DTC on any Interest Payment Date based on DTC Participant’s holdings of beneficial interests in the Receipts as of the interest record date established by the Receipt Issuer in respect of the applicable interest payment for the Securities represented by the Receipts. The Receipt Issuer has undertaken in the Deposit Agreement to use commercially reasonable efforts to establish the interest record date at the level for the Receipts to coincide with the interest record date for the corresponding Securities. Subject to compliance with the transfer restrictions applicable to the Receipts, including the imposition of a restriction recorded in the books and records of DTC against any transfer, pledge or use as collateral of the N Receipts (as defined herein) without compliance with the Tax Certification Procedures, transfers between participants in DTC will be reflected in accordance with DTC’s procedures. The Issuer expects that Monte Titoli will take any action permitted to be taken by a Beneficial Owner of a Receipt only at the direction of the Receipt Issuer which in turn is expected to take any action at the direction of one or more participants to whose account at DTC interests in any Securities evidenced by the applicable Receipts are credited and only in respect of such portion of the aggregate principal amount of the Securities as to which such participant or participants has or have given such direction. Although the Issuer expects that DTC will continue to perform the foregoing procedures in order to facilitate transfers of Receipts among participants of DTC, DTC is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Issuer, Monte Titoli, the Receipt Issuer, Acupay, their agents or the Managers will have any responsibility for the performance by DTC or its partcipants of their respective obligations under the rules and procedures governing their operations. DTC and Monte Titoli DTC has advised the Issuer as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions, such as transfers and pledges, among participants in deposited securities through electronic book-entry charges to accounts of its participants, thereby eliminating the need for physical movement of securities certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Certain of those participants (or other representatives), together with other entities, own DTC. The rules applicable to DTC and its participants are on file with the U.S. Securities and Exchange Commission. Monte Titoli is the central securities clearing system of Italy and is owned by Borsa Italiana. Almost all Italian banks and certain authorized financial intermediaries (società d’intermediazione mobiliare) have securities accounts with Monte Titoli and act as custodial intermediaries for investors. Monte Titoli operates pursuant to the Legislative Decree No. 58 of February 24, 1998 and the Rules of CONSOB. Monte Titoli is subject to inspection and supervision by CONSOB. Monte Titoli maintains direct electronic links with the MEF, in accord with the provisions of Legislative Decree 632 of 1996. The information in this section concerning DTC and Monte Titoli and their respective book-entry systems has been obtained from sources that the Issuer believes to be reliable, but neither the Issuer nor any of the Managers takes any responsibility for its accuracy or completeness. The Issuer assumes no responsibility for the performance by DTC or Monte Titoli or their respective participants of their respective obligations, including obligations that they have under the rules and procedures that govern their operations. Exchange of Receipts into Securities and Securities into Receipts As more fully described in “Description of the Receipts and the Deposit Agreement,” holders of X Receipts and N Receipts will have the right to convert their X and N Receipts into Securities to be held in the form of X Securities at a Second-level Bank at Monte Titoli, subject, in each case, to compliance with the terms of the Deposit Agreement and the Tax Certification Procedures. QIBs who hold X Securities will be able to convert such Securities into X Receipts (if they are Eligible Beneficial Owners) and N Receipts (if they are Non-Eligible Beneficial Owners (as defined in “Description of the Securities”)) to be held at DTC Participants, subject in each case to compliance with the terms of the Deposit Agreement and the Tax Certification Procedures. It is expected that the Receipt Issuer will close its books to exchanges of, and as a result investors will not be able to exchange, Receipts with Securities and Securities with Receipts for the period between any interest payment record date and the related interest payment date, in each case for the Receipts and the Securities.

186

Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures X Receipts (as defined herein) held by Non-Eligible Beneficial Owners (as defined in the Deposit Agreement) will be subject to a mandatory exchange of interests from the X Receipts to N Receipts. Interest, including, without limitation, any original issue discount, accrued but not yet paid until the settlement date of a prospective transfer, accrued or paid in respect of N Receipts will be subject to the payment of Italian substitute tax, currently at a rate of 20.0%. The substitute tax will be levied on interest paid and/or accruing during the period commencing on the settlement date of the acquisition of the X Receipts, and continuing until the Mandatory Exchange Date, as defined below. Promptly upon Acupay determining that a Beneficial Owner holding interests in X Receipts through a Financial Intermediary may be a Non-Eligible Beneficial Owner (as defined in the Deposit Agreement), Acupay will notify the Receipt Issuer to, and the Receipt Issuer will: (i) on the same day if Acupay’s notification is delivered prior to 9:00 a.m. New York City time, or (ii) no later than the next business day if Acupay’s notification is delivered after 9:00 a.m. New York City time, send (a) a “Warning Notice of Mandatory Exchange” as described in the Deposit Agreement, to the relevant DTC Participant, and (b) copies of such Warning Notice of Mandatory Exchange (as transmitted to the relevant DTC Participant) to Acupay, Monte Titoli, the Trustee, any Paying Agent and the Issuer. Acupay’s notification to the Receipt Issuer in advance of the giving of such notice will include a form of such Warning Notice of Mandatory Exchange which shall include (i) the DTC Participant’s name, (ii) the DTC Participant’s account number, (iii) the CUSIP number of the Receipts, (iv) the amount of X Receipts which are to be the subject of the warning and (v) an exhibit laying out the defect, identified by Acupay, which caused the giving of such notice. The Warning Notice of Mandatory Exchange shall reflect the information supplied by Acupay to the Receipt Issuer in the form of notice received by the Receipt Issuer from Acupay. Promptly upon written notice from Acupay, to be delivered via secure electronic transmission prior to 9:00 a.m. New York City time, on or before the third New York Business Day following the date of a Warning Notice of Mandatory Exchange (the “Mandatory Exchange Date”), that a Beneficial Owner is a Non-Eligible Beneficial Owner, the Receipt Issuer will, pursuant to the Deposit Agreement, deliver (a) to the relevant DTC Participant a “Mandatory Exchange Notice” as described in the Deposit Agreement, and (b) to Acupay, Monte Titoli, the Trustee, any Paying Agent and the Issuer, copies of such Mandatory Exchange Notice, as transmitted to such DTC Participant. Such Mandatory Exchange Notice shall direct the relevant DTC Participant to effect, by no later than 11:30 a.m. New York City time on the next New York Business Day or, if such day is one of the New York Business Days between an interest payment record date and the related interest payment date, then on the interest payment date (the “Mandatory Exchange Deadline”), a DTC transaction titled a Deposit/Withdrawal at Custodian (each such event, a “DWAC”) exchanging the principal amount of its X Receipts referenced in the Mandatory Exchange Notice for interests in N Receipts through the facilities of DTC. The Mandatory Exchange Notice shall include a tax statement computing the amount of substitute tax liability accrued by the Non-Eligible Beneficial Owner of such X Receipt from the date of acquisition until the Mandatory Exchange Deadline date, and entered in the books of Monte Titoli (such amount, the “Tax Liability Amount”, as further defined and explained in the Tax Certification Procedures). Acupay’s notification to the Receipt Issuer shall include a form of such Mandatory Exchange Notice, which shall include (i) the DTC Participant’s name, (ii) the DTC Participant’s account number, (iii) the CUSIP number of the Receipts, (iv) the amount of X Receipts which are to be the subject of the notice, and (v) an exhibit laying out the defect, identified by Acupay, which caused the giving of such notice and (vi) a payment request in connection with the tax statement. The Mandatory Exchange Notice shall reflect the information supplied by Acupay to the Receipt Issuer in the form of notice received by the Receipt Issuer from Acupay. In the event that the Tax Liability Amount is not transmitted in full to Monte Titoli by the DTC Participant or applicable Financial Intermediary by 9:00 a.m. New York City time on the 10th day of the calendar month immediately following the date of the payment request described in the preceding paragraph, following a claim for the recovery of such amount made by Monte Titoli, or at the option of Monte Titoli, by the Receipt Issuer following written instructions received from Monte Titoli, to DTC, such DTC Participant’s DTC account shall be debited in accordance with the published rules and procedures of DTC’s EDS/Tax Relief (as defined in the Tax Certification Procedures). Upon the completion of the required DWACs (such completion, a “Mandatory Exchange”), the Receipt Issuer shall (i) provide a confirmation of the Mandatory Exchange to Acupay, the Trustee, any Paying Agent, the Issuer and Monte Titoli, and (ii) prior to 12:00 p.m. New York City time on the date of such Mandatory Exchange, instruct Monte Titoli to cause the Receipt Issuer’s interest in the X Global Security to be reduced in an aggregate principal amount equal to the X Receipts held by the Non-Eligible Beneficial Owner and the Receipt Issuer’s interest in the N Global Security to be increased accordingly. Each mandatory exchange of X Receipts to N Receipts will be deemed to occur with the consent of the related Beneficial Owner and its Financial Intermediaries.

Promptly after the completion of the Mandatory Exchange, Acupay will provide to the DTC Participant holding the newly delivered N Receipts: (i) a tax statement itemizing the tax credit, if any, entered in the books of Monte Titoli on behalf of the Receipt Issuer (for the benefit of the relevant holder of such N Receipts) computed in accordance with Decree No. 239 (the

187

“Tax Credit”), and (ii) a related request for wire transfer instructions. The Receipt Issuer will hold such Tax Credit for the benefit of the applicable DTC Participant (for the ultimate benefit of the relevant Non-Eligible Beneficial Owner) to be employed upon a transfer of such Non-Eligible Beneficial Owner’s beneficial interests in N Receipts or next succeeding Interest Payment Date, (y) as an offsetting credit against the total amount of Italian substitute tax which may become payable upon a transfer of a Non-Eligible Beneficial Owner beneficial interests in N Receipts and/or (z) on the next succeeding Interest Payment Date, to be paid by wire transfer to the relevant DTC Participant, but only upon the prior payment by the Issuer of the related N Global Security coupon, and after the transmission by Monte Titoli to the Receipt Issuer of the appropriate amount of cash, net of all tax liabilities, interest, or penalties maintained in the records of Monte Titoli pursuant to the Tax Certification Procedures, with respect to the applicable Non-Eligible Beneficial Owner as of the close of business on the first calendar day prior to the Interest Payment Date, as reported by Acupay to the Receipt Issuer in the Final Determination Report (as defined in the Tax Certification Procedures). Upon its receipt of the net cash payment of such Tax Credit amount from Monte Titoli, the Receipt Issuer shall remit such amount by wire transfer to the applicable DTC Participant acting on behalf of the Non-Eligible Beneficial Owner(s), using the wire transfer instructions provided to it by Acupay in the Final Determination Report. If a DWAC request from a DTC Participant to reduce such DTC Participant’s position in the relevant principal amount of X Receipts has not been received by the Receipt Issuer through the facilities of DTC by the Mandatory Exchange Deadline, then the Receipt Issuer shall promptly send to such DTC Participant (with a copy to Acupay, the Trustee, Monte Titoli, any Paying Agent and the Issuer) a “Notice of Failure to Complete a Mandatory Exchange” as described in the Deposit Agreement. A DTC Participant that is the subject of a Notice of Failure to Complete a Mandatory Exchange and to which the Receipt Issuer has sent a Notice of Failure to Complete a Mandatory Exchange, and/or obtains favorable tax treatment through the Tax Certification Procedures and fails to submit the signed self-certification forms may be removed from the Tax Certification Procedures and prohibited from obtaining favorable tax treatment with respect to current and future interest payments on all X Receipts held through such DTC Participant. In such case, the DTC Participant would receive all future interest payments on its entire X Receipt position net of the applicable Italian substitute tax (currently 20.0%) and relief from the deduction of the Italian substitute tax would need to be obtained directly from the Italian tax authorities by following the standard refund procedure established by Italian tax law. Transfer of interests in N Receipts to Non-Eligible Beneficial Owners Beneficial interests in N Receipts are transferable by the Non-Eligible Beneficial Owners thereof to other Non-Eligible Beneficial Owners in the form of N Receipts at any time upon satisfaction of the following conditions: (x) delivery to Acupay, prior to 12:00 p.m. New York City time on the third New York Business Day prior to the requested transfer date (the “Transfer Date”) of a properly completed “N Receipt Transfer Request,” as described in the Deposit Agreement, (y) payment to Monte Titoli of the Italian substitute tax payable by the transferring Non-Eligible Beneficial Owner upon such transfer prior to 9:00 a.m. New York City time on the Transfer Date and (z) receipt by the Receipt Issuer, no later than 9:30 a.m. New York City time on the Transfer Date, of written instructions from Acupay, delivered in accordance with the terms and conditions of the Deposit Agreement. Upon receipt of an N Receipt Transfer Request, Acupay shall (i) determine the net amount of Italian substitute tax payable in cash by the transferor Non-Eligible Beneficial Owner as of the Transfer Date, after application of any available Tax Credits maintained on the books of Monte Titoli on behalf of the Receipt Issuer for the benefit of the transferor Non-Eligible Beneficial Owner, (ii) calculate the amount of the Tax Credit attributable to Italian substitute tax to be credited to the Receipt Issuer for the benefit of the transferee Non-Eligible Beneficial Owner as of the Transfer Date and to be employed only as described in the Tax Certification Procedures, and (iii) inform the Receipt Issuer, Monte Titoli, and (x) the transferor Non- Eligible Beneficial Owner (or any DTC Participant as specified in the N Receipt Transfer Request) of the amount of Italian substitute tax net of any Tax Credit (if any) payable in cash by the transferor Non-Eligible Beneficial Owner upon the transfer, and (y) the transferee Non-Eligible Beneficial Owner (or any DTC Participant as specified in the N Receipt Transfer Request) of the amount of the Tax Credit to be credited to or for the account of the applicable transferee Non-Eligible Beneficial Owner. No settlement of transfers of beneficial interests in N Receipts will be effectuated on any day other than the Transfer Date specified to Acupay in an N Receipt Transfer Request. Upon confirmation of the receipt by Monte Titoli of the Italian substitute tax payable as described above, (i) the Receipt Issuer and Acupay shall coordinate with the DTC Participant holding interests in the N Receipts on behalf of the transferor Non-Eligible Beneficial Owner, the execution of a series of DWACs which result in the transfer of interests in the applicable N Receipts to the DTC Participant identified as acting for the transferee Non-Eligible Beneficial Owner, and (ii) Acupay shall provide to Monte Titoli the information necessary to enable Monte Titoli to make the applicable Italian tax filings and reporting in respect of such transfer pursuant to Decree No. 239. Promptly after the completion of the transfer of the interests in the N Receipts, Acupay will provide to the DTC Participant holding the transferred interests in the N Receipts a confirmation of the Tax Credit, if any, entered in the books of Monte 188

Titoli for the benefit of the relevant transferee of such transferred interests in the N Receipts, and computed in accordance with Decree No. 239. The Receipt Issuer will hold such credit entitlement for the benefit of the applicable Non-Eligible Beneficial Owner to be employed as described above in the sixth paragraph under “Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures.’’ Special procedure for exchange of N Receipts into X Receipts N Receipts may be exchanged by the Non-Eligible Beneficial Owner thereof for delivery as X Receipts to an Eligible Beneficial Owner (as defined herein) on any New York Business Day (other than for the period between any interest payment record date and the related interest payment date) upon satisfaction of the following conditions: (x) delivery to Acupay, prior to 12:00 p.m. New York City time on the third New York Business Day prior to the Transfer Date by the transferor of a properly completed “N Receipt Transfer Request” as described in the Deposit Agreement, (y) payment, prior to 9:00 a.m. on the Transfer Date, to Monte Titoli of the Italian substitute tax net of any Tax Credit (if any) payable by the transferor Non- Eligible Beneficial Owner in connection with such exchange (upon the terms described below), and (z) receipt by the Receipt Issuer, no later than 9:30 a.m. New York City time on the Transfer Date, of written instructions from Acupay to the Receipt Issuer delivered in accordance with the terms and conditions of the Deposit Agreement. Acupay shall determine the amount of Italian substitute tax payable in cash as of the Transfer Date by the Non-Eligible Beneficial Owner requesting the exchange of N Receipts for X Receipts, after application of any available Tax Credits maintained on the books of Monte Titoli on the behalf of such Non-Eligible Beneficial Owner, and shall inform the Receipt Issuer, Monte Titoli, and the Non-Eligible Beneficial Owner requesting the N Receipt exchange (or its designated DTC Participant) of the net amount of the Italian substitute tax payable in cash by such Non-Eligible Beneficial Owner on or prior to the Transfer Date. Such instruction shall be delivered by Acupay prior to the Transfer Date. No settlement of an exchange of N Receipts for X Receipts will be effectuated if the actual settlement date for the exchange is different from the Transfer Date specified to Acupay in the N Receipt Transfer Request. Upon confirmation of receipt by Monte Titoli of the net amount of Italian substitute tax payable in respect of a requested exchange of N Receipts for X Receipts by a Non-Eligible Beneficial Owner to an Eligible Beneficial Owner: (i) the Receipt Issuer and Acupay shall coordinate with the Trustee and the DTC Participant holding the N Receipts on behalf of the requesting Non-Eligible Beneficial Owner and the DTC Participant identified as acting for the recipient Eligible Beneficial Owner, to undertake a series of DWACs and related operations resulting in a withdrawal of the N Receipts from the Non- Eligible Beneficial Owner’s DTC Participant account, a reduction in value of the applicable N Global Receipt, the mark- down of the N Global Security, a mark-up of the X Global Security, the credit of an interest in X Global Securities to the Receipt Issuer’s third-party securities account in Monte Titoli, and the issuance and deposit of the applicable interest in the X Receipts to the account of the Eligible Beneficial Owner’s DTC Participant and (ii) Acupay shall provide to Monte Titoli the information necessary to enable Monte Titoli to make the applicable Italian tax filings and reporting in respect of such operation pursuant to Decree No. 239. The applicable transferee Eligible Beneficial Owner shall be required to deliver or caused to be delivered to Acupay, prior to 8:00 p.m. New York City time on the Transfer Date, a properly completed and valid Self-Certification Form. In the event the applicable transferee fails to deliver to, or fails to have on file with, Acupay a properly completed and valid Self-Certification Form, the Receipt Issuer will coordinate a Mandatory Exchange of the Receipts with Acupay upon the terms described herein.

Issuance of Definitive Registered Securities and Definitive Registered Receipts Under the terms of the Indenture, Beneficial Owners of the Securities will receive Securities in registered form (“Definitive Registered Securities”) in exchange for the Global Securities only under the following circumstances: 1. in whole, but not in part, if Monte Titoli, or a successor securities depositary, becomes unable, or notifies the Issuer that it is unwilling or unable, to continue to act as Securities Depositary and a successor Security Depositary is not appointed by the Issuer within 370 days; 2. in whole, but not in part, if the Securities Depositary so requests following an Event of Default under the Conditions; 3. if any Beneficial Owner of any book-entry interest in a Global Security requests such exchange in writing delivered through the Securities Depositary following an Event of Default by the Issuer under the Conditions; or 4. in whole, but not in part, if the Issuer, at its option, notifies the Trustee in writing that it elects to exchange the Global Securities for Definitive Registered Securities, following its determination that (A) the procedures established to collect Beneficial Owner information for Italian substitute tax purposes are ineffective or (B) it has or will become subject to adverse tax consequences which would not be suffered were the Global Securities in definitive form. In such an event, the Issuer will instruct the Trustee to issue Definitive Registered Securities registered in the name or names and issued in any approved denominations, requested by or on behalf of the Securities Depositary (in accordance with its 189 customary procedures and based upon directions received from participants reflecting the beneficial ownership of book-entry interests in such Securities), and such Definitive Registered Securities will bear the restrictive legends referred to in “Plan of Distribution — Selling and transfer restrictions,” unless that legend is not required by the conditions governing the Securities or applicable law. Under the terms of the Deposit Agreement, Global Receipts will be exchanged by the Receipt Issuer for Definitive Registered Receipts only in the following circumstances: 1. in whole, but not in part, if DTC becomes unable, or notifies the Receipt Issuer that it is unwilling or unable, to continue to act as a clearing system for the Receipts and a successor clearing system for Receipts is not appointed by the Receipt Issuer within 370 days;

2. in whole, but not in part, if the Securities Depositary requests the exchange in whole, but not in part, of Global Securities for Definitive Registered Securities following an Event of Default under the Indenture; 3. with respect to the book-entry interest in a Global Receipt, if a Beneficial Owner of Receipts requests such exchange through the Receipt Issuer following an Event of Default under the Indenture; 4. in whole, but not in part, if the Issuer, at its option, notifies the Trustee and the Receipt Issuer in writing that it elects to exchange the Global Securities for Definitive Registered Securities, following its determination that (i) the procedures established to collect Beneficial Owner information for Italian substitute tax purposes are ineffective, or (ii) it has or will become subject to adverse tax consequences which would not be suffered were the Global Securities in definitive form; or 5. in whole, but not in part, if the Tax Certification Agent notifies the Issuer that it is unwilling or unable to continue to act as the Tax Certification Agent under the TCA Agreement and a successor Tax Certification Agent is not appointed by the Issuer within 370 days. In any such event the Receipt Issuer will issue Definitive Registered Receipts in exchange for the Global Receipts based on directions of DTC (directly or through its participants) and cancel the applicable amount of Global Receipts so exchanged for Definitive Registered Receipts. The Definitive Registered Receipts so issued will bear the applicable restrictive legends set forth on the Global Receipts cancelled other than any restrictive legends that pertain only to Receipts issued in global form and any legends no longer required under the terms of the Deposit Agreement and applicable law. Neither Definitive Registered Securities nor Definitive Registered Receipts will be eligible for settlement through DTC. The tax relief procedures arranged by the Issuer will not apply to Receipts in definitive form and, accordingly, holders of Securities or Receipts in definitive form will receive payments of interest and other income net of Italian substitute tax unless they independently comply with the procedures for an exemption from the application of Italian substitute tax contemplated by Italian law. Holders of Securities or Receipts in definitive form that would otherwise be eligible to receive payments free and clear of Italian substitute tax may request refunds from the Italian tax authorities within 48 months of the application of such tax. Such refund procedures may entail costs and be subject to extensive delays.

190

DESCRIPTION OF THE RECEIPTS AND THE DEPOSIT AGREEMENT

The following is a summary description of the material provisions of the Receipts and the Deposit Agreement pursuant to which the book-entry interests in Global Securities will be deposited with the Receipt Issuer and the Receipt Issuer will issue the Global Receipts that evidence Receipts that represent the beneficial interests in the Securities. The following summary does not purport to be complete and is subject, and qualified in its entirety by reference, to all of the provisions of the deposit agreement to be entered into between the Issuer, Citibank, N.A., London Branch, as receipt issuer (the “Receipt Issuer”) and all Holders and Beneficial Owners (as hereinafter defined) of Receipts issued thereunder (the “Deposit Agreement”). Upon request, a copy of the Deposit Agreement may be obtained from the Receipt Issuer. In this section, “Description of the Receipts and the Deposit Agreement,” the beneficial interests in the Securities issued by the Receipt Issuer are referred to as “Receipts.” Pursuant to the terms and conditions of the Deposit Agreement, Enel has appointed Citibank, N.A., London Branch, and it has agreed to act as the Receipt Issuer for the Global Receipts representing the Global Securities. The Receipt Issuer’s offices are located at Citigroup Centre, Canada Square, London E14 5LB, United Kingdom. The Securities will be issed in dematerialized form and will be evidenced by one or more Global Securities and registered in the name of Monte Titoli. Initially, all of the book-entry interests in the Securities will be credited to a third-party securities account in Monte Titoli of the Receipt Issuer, as a direct participant therein. The Receipt Issuer will issue Global Receipts to evidence the Receipts in registered form. The Global Receipts will be issued to DTC and will be registered in the name of Cede & Co., DTC’s nominee, which will be the sole registered holder of the Global Receipts that evidence the Receipts issued by the Receipt Issuer to represent beneficial interests in the Securities. Beneficial interests in the Receipts will be shown on, and transfers of beneficial interests in the Receipts will be effected only on, the records maintained in book-entry form by DTC and by the securities intermediaries that hold the beneficial interests, directly or indirectly, in DTC. The term “Holder” when used with respect to Receipts shall mean the person in whose name the Receipts are registered in the books of the Receipt Issuer maintained for such purpose. Unless Definitive Registered Receipts are issued, Cede & Co., the nominee of DTC, will be the only Holder of Receipts. The term “Beneficial Owner” when used with respect to Receipts shall mean the person who owns the beneficial ownership interests in the Receipts. Beneficial interests held by a Beneficial Owner of Receipts will represent an equivalent beneficial interests in the Global Securities registered in the name of Monte Titoli as operator of the Italian dematerialized securities system and the registered holder of the Global Securities. If you become a Holder or Beneficial Owner of Receipts, you will be a party to, and bound by the terms of, the Deposit Agreement. The Deposit Agreement specifies the Issuer’s rights and obligations as to the Receipts as well as those of the Receipt Issuer and the Holders and Beneficial Owners of Receipts. The Deposit Agreement is governed by New York law. The Receipt Issuer shall issue in respect of the Securities two series of Receipts: “X Receipts” meaning Receipts that are not subject to withholding of the Italian Substitute Tax. X Receipts are intended to be owned by Eligible Beneficial Owners (as defined herein) and are not subject to the Tax Restricted Legend. X Receipts represent beneficial ownership interests in a corresponding amount of X Securities, subject to the terms of the Deposit Agreement. “N Receipts” meaning Receipts that are subject to withholding of the Italian Substitute Tax. N Receipts are intended to be owned by Non-Eligible Beneficial Owners (as defined herein) and are subject to the Tax Restricted Legend. N Receipts represent beneficial ownership interests in a corresponding amount of N Securities, subject to the terms of the Deposit Agreement.

Interest accrued or paid in respect of N Receipts will be subject to the payment of Italian substitute tax, currently at a rate of 20.0%. The Italian substitute tax will be levied on interest paid and/or accruing during the period commencing on the settlement date of the acquisition of the N Receipt or the X Receipts by a Non-Eligible Beneficial Owner, and continuing until the sooner to occur of (i) the settlement date of the transfer of the N Receipts to X Receipts, or the conversion of the N Receipts to Securities (identified as to lot, in accordance with a principle of “last-in/first-out”) and (ii) the redemption of the N Receipts, net of any available tax credits. However, the Tax Certification Procedures contemplate mechanisms for the accrual and payment of credits by Monte Titoli with respect to the Italian substitute tax accrued during the portion of the interest period during which such holder did not hold such beneficial interest in the N Receipts. Any reference to “Eligible Beneficial Onwer” shall mean a Beneficial Owner of Receipts who is eligible to receive interest in respect of the Securities free of Italian Substitute Tax and is in compliance (directly or indirectly) with the Tax Certification Procedures.

191

Any reference to “Non-Eligible Beneficial Owner” shall mean a Beneficial Owner of Receipts who is not (or no longer) eligible to receive interest in respect of the Securities free of Italian Substitute Tax. Any reference to “Tax Restricted Legend” shall mean: ANY INTEREST PAYMENTS ON THIS SECURITY ARE SUBJECT TO ITALIAN SUBSTITUTE TAX, CURRENTLY AT 20%, UNLESS THE HOLDER COMPLIES WITH THE PROCEDURES FOR EXEMPTION FROM THE APPLICATION OF THE ITALIAN SUBSTITUTE TAX CONTEMPLATED BY ITALIAN LEGISLATIVE DECREE 239 OF 1996, AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME. Transfer restrictions The beneficial interests in the Securities in the form of Receipts will be sold pursuant to Rule 144A only and will be subject to the transfer restrictions described in the following legend, which will be set forth on the Global Receipt(s) that evidence the Receipts that in turn represent beneficial interests in the Securities: THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER AND EACH OF THE BENEFICIAL OWNERS OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (“RULE 144A”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS, (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR FOR WHICH IT HAS PURCHASED SECURITIES TO ONLY OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, (A) TO ENEL S.P.A. OR ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, PROVIDED THAT, IN THE CASE OF (D), FOR SO LONG AS THE SECURITY IS A “RESTRICTED SECURITY” (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) THE OFFER, SALE OR TRANSFER OF SUCH SECURITY SHALL BE MADE ONLY TO QUALIFIED INSTITUTIONAL BUYERS (WHETHER RESIDENT INSIDE OR OUTSIDE THE UNITED STATES) PURCHASING FOR THEIR OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS AND IN EACH OF THE FOREGOING CASES TO THE REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE LOCAL LAWS AND REGULATIONS AND FURTHER SUBJECT TO ENEL S.P.A.’S AND THE RECEIPT ISSUER’S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO PARAGRAPH (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. Each of the Global Securities issued to and registered in the name of Monte Titoli shall be subject to transfer restrictions similar to those described in the legends above, which shall be set forth on the respective Global Securities. In addition, an investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the Securities or does not comply (either directly or through, or because of, any Financial Intermediary through which it holds the Securities) with the Tax Certification Procedures will be permitted to transfer its interest in the Receipts only upon compliance with certain tax procedures. The transfer of Receipts, the conversion of Receipts into Securities and the conversion of the Securities into Receipts is subject to the limitations set forth in the securities legend above, the Tax Certification Procedures set forth in Annex B hereto and the Deposit Agreement. The following summarizes these limitations and the applicable provisions of the Deposit Agreement.

192

Conversion of X Receipts into X Securities X Receipts may be converted into the corresponding amount of X Securities upon (i) communicating the requested conversion to Acupay, delivery to the Receipt Issuer of the X Receipts for cancellation together with the applicable certifications that the transferee is a QIB and instructions for the delivery of the corresponding amount of X Securities to a participant at Monte Titoli acting as a Second-level Bank, in each case upon the terms of the Deposit Agreement and the Tax Certification Procedures. Upon receipt of delivery of the applicable X Receipts and an X Receipt Transfer Request (as defined in the Tax Certification Procedures) including the requisite certifications and instructions, the Receipt Issuer will cancel the X Receipts so received and arrange for the delivery of the corresponding amount of X Securities via Monte Titoli’s book-entry delivery systems to the designated transferee. It is expected that the Receipt Issuer will close its books to exchanges of X Receipts into X Securities, and as a result investors will be unable to exchange X Receipts into X Securities, for the period between any interest payment record date and the related interest payment date. Conversion of N Receipts into X Securities N Receipts may be converted into the corresponding amount of X Securities upon delivery to the Receipt Issuer (i) of the N Receipts for the cancellation together with (ii) the applicable certifications that the transferee is a QIB and instructions for the delivery of the corresponding amount of X Securities to a participant at Monte Titoli acting as a Second-level Bank. In addition, the surrendering holder will be required to (i) deliver to Acupay a valid N Receipt Transfer Request (as defined in the Tax Certification Procedures), and (ii) deliver to Monte Titoli the applicable Italian Substitute Tax (net of applicable tax credits), in each case in accordance with the Tax Certification Procedures.

Upon receipt of confirmation from Acupay that the applicable Tax Certification Procedures have been duly completed, and delivery to it of the applicable N Receipts and the requisite certifications and instructions, the Receipt Issuer will cancel the N Receipts so received and arrange for the delivery of the corresponding amount of X Securities via Monte Titoli’s book-entry delivery systems to the designated transferee. It is expected that the Receipt Issuer will close its books to exchanges of N Receipts into X Securities, and as a result investors will be unable to exchange N Receipts into X Securities, for the period between any interest payment record date and the related interest payment date. Conversion of X Securities into X Receipts or N Receipts X Securities may be converted into the corresponding Receipts upon delivery (i) to the Receipt Issuer, via the Acupay System of the applicable certification specifying, inter alia, that the beneficial owner to whom (or to whose order) the Receipts are to be issued and delivered is a QIB, and instructions for the delivery of the corresponding Receipts at DTC, and (ii) of the X Securities to the Receipt Issuer’s third-party securities account at Monte Titoli. Upon receipt of (i) of the due delivery of the X Securities to its third-party securities account at Monte Titoli, and (ii) an X Security Transfer Request (as defined in the Tax Certification Procedures) including the applicable securities law certifications and instructions for the delivery of the Receipts, the Receipt Issuer will, in coordination with Acupay, issue and deliver the requisite Receipts to the designated DTC Participant. If X Receipts are to be issued, the person to whom (or to whose order) the X Receipts are to be issued and delivered will be required to deliver a duly completed Self Certification Form to Acupay (or such form must be on file with Acupay) in accordance with the Tax Certification Procedures. To the extent that the applicable self-certification form confirms that the beneficial owner of the Receipts is an Eligible Beneficial Owner, the Receipts will be issued and delivered by the Receipt Issuer as X Receipts. In all other circumstances the Receipts will be issued and delivered as N Receipts. It is expected that the Receipt Issuer will close its books to the exchange of Securities into Receipts, and as a result, investors will be unable to exchange Securities into Receipts, for the period between any interest payment record date and the related interest payment date. Transfer of X Receipts to Eligible Beneficial Owners in the form of X Receipts X Receipts may be transferred to Eligible Beneficial Owners as X Receipts provided that (i) the transferor communicates the transfer of the X Receipts to Acupay, (ii) the transferee timely submits a duly completed Self-Certification Form to Acupay (or such form must be on file with Acupay) in accordance with the terms of the Tax Certification Procedures and (iii) the transferee is a QIB and the transfer complies with the limitations set forth in the Securities Legend above and the terms of the Deposit Agreement.

193

In the event of non-compliance with the Tax Certification Procedures, the Mandatory Exchange of X Receipts for N Receipts will be invoked. Transfer of X Receipts to Non-Eligible Beneficial Owners in the form of N Receipts To effectuate a transfer of beneficial interests in X Receipts to QIBs that are Non-Eligible Beneficial Owners in the form of N Receipts, the transferor must communicate the exchange to Acupay and the X Receipts must be surrendered to the Receipt Issuer for cancellation and issuance and delivery of the corresponding N Receipts to QIBs that are Non-Eligible Beneficial Owners, in each case subject to the terms of the Tax Certification Procedures, the Securities Legend and the terms of the Deposit Agreement.

It is expected that the Receipt Issuer will close it books to the transfer of X Receipts to Non-Eligible Beneficial Owners in the form of N Receipts, and as a result investors will be unable to effectuate such transfer, for the period between an interest payment record date and the related interest payment date. Mandatory exchange of X Receipts for N Receipts In the event of non-compliance with the Tax Certification Procedures, X Receipts held by Beneficial Owners (i) who are Non-Eligible Beneficial Owners, (ii) who fail to submit self-certification forms, (iii) for whom the applicable DTC Participant has failed to supply correct Beneficial Owner information regarding the Beneficial Owners’ positions or (iv) for whom the Tax Certification Procedures prove to be ineffective or incorrect, will be subject to a mandatory exchange of beneficial ownership interests from X Receipts to N Receipts. The terms of the Mandatory Exchange of X Receipts for N Receipts are more fully described in the Tax Certification Procedures. Transfer of N Receipts to Non-Eligible Beneficial Owners in the form of N Receipts N Receipts may be transferred to Non-Eligible Beneficial Owners as N Receipts provided that (i) the transferor delivers to Acupay a valid N Receipt Transfer Request in accordance with the Tax Certification Procedures, (ii) the transferor delivers to Monte Titoli the applicable Italian Substitute Tax (net of applicable tax credits) payable upon the transfer of the N Receipts in accordance with the Tax Certification Procedures and (iii) the transferee is a QIB and the transfer complies with the limitations set forth in the Securities Legend above and the terms of the Deposit Agreement. Upon receipt of confirmation from Acupay that the applicable Tax Certification Procedures have been completed and the applicable Italian Substitute Tax has been remitted to Monte Titoli, the Receipt issuer will, in coordination with Acupay, the transferor and the transferee, arrange for the transfer of the applicable N Receipts to the designated DTC Participant. Transfer of N Receipts to Eligible Beneficial Owners in the form of X Receipts To effectuate a transfer of beneficial interests in N Receipts to QIBs that are Eligible Beneficial Owners in the form of X Receipts, the transferor will be required to (i) deliver to Acupay in accordance with the Tax Certification Procedures a valid N Receipt Transfer Request (as defined in the Tax Certification Procedures), and (ii) deliver to Monte Titoli the applicable Italian Substitute Tax (net of applicable tax credits), in each case in accordance with the Tax Certification Procedures. In addition, the transferee will need to deliver to Acupay a confirmation of transfer and a valid Self-Certification Form (unless such form is on file with Acupay), in a accordance with the Tax Certification Procedures. Upon receipt of confirmation from Acupay that the applicable Tax Certification Procedures have been completed and the applicable Italian Substitute Tax has been remitted to Monte Titoli, the Receipt issuer will, in coordination with Acupay, the transferor and the transferee, arrange for the cancellation of the applicable N Receipt and the issuance and delivery of the corresponding X Receipts to the designated DTC Participant. It is expected that the Receipt Issuer will close its books to the transfer of N Receipts to Eligible Beneficial Owners in the form of X Receipts, and as a result investors will be unable to effectuate such transfers, for the period between an interest payment record date and the related interest payment date. Payments on beneficial interests in Receipts in respect of Security payments Monte Titoli shall, with respect to Securities represented by Receipts, distribute (or cause to be distributed) to the Receipt Issuer, for onward transmission to DTC, as the registered holder of the Global Receipts outstanding at such time, any amount received from the Issuer in respect of Global Securities for distribution to the applicable Beneficial Owners of Receipts. None of Monte Titoli, the Receipt Issuer or the Issuer shall have any responsibility or liability for any aspect of the payments made by DTC to the DTC Participants for the benefit of the beneficial owners of the Receipts.

194

Interest payments made in respect of the X Receipts (and the corresponding Securities) are not subject to withholding of the Italian Substitute Tax. Interest payments made in respect of the N Receipts (and the corresponding Securities) are subject to withholding of the Italian Substitute Tax. Interest payments received with respect to Securities represented by Receipts will be disbursed by the Receipt Issuer to Holders of Receipts as of the interest record date established by the Receipt Issuer in respect of the applicable interest payment for the Securities represented by the Receipts. The Receipt Issuer has undertaken in the Deposit Agreement to establish the interest record date for the Receipts to be the same date as, or as close to the same date as the interest record date for the corresponding Securities. Redemptions of beneficial interests in the Securities upon redemption of Securities In the event of any redemption, exchange or conversion by the Issuer of any Securities, the Receipt Issuer shall coordinate with DTC and the applicable DTC Participants for the corresponding redemption or reduction of outstanding Global Receipts and shall deliver the payment so received with respect to Securities held in the form of Receipts to the Receipt Issuer for transmission via DTC to the applicable Beneficial Owners of the affected Receipts. Payments made in respect of the X Receipts (and the corresponding Securities) are not subject to withholding of the Italian Substitute Tax. Payments made in respect of the N Receipts (and the corresponding Securities) are subject to withholding of the Italian Substitute Tax. Receipt owner actions in respect of beneficial interests in the Securities Whenever the Receipt Issuer shall receive notice of the solicitation of consents from, request for waivers from or other actions by, any holder of beneficial interests in the Securities, the Receipt Issuer shall distribute to DTC a notice containing the information received by the Receipt Issuer in respect of such solicitation or request and a statement explaining the manner in which DTC (or DTC’s proxies) may instruct the Receipt Issuer (through DTC’s assigns) to take action in respect of the solicitation or request. Upon receipt of valid and timely instructions from DTC (or DTC’s proxies), the Receipt Issuer shall endeavor, insofar as practicable and permitted under the terms of the Deposit Agreement, to take the actions so instructed. At the expense of the Issuer, the Receipt Issuer shall forward the materials relating to the solicitation or request to the Beneficial Owners of the Receipts. In addition, the Receipt Issuer may accept instructions from DTC Participants in respect of such solicitations or requests to the extent authorized by DTC. The Receipt Issuer shall not itself exercise any discretion in granting consents or waivers in respect of the Global Securities. Notices Monte Titoli shall send to the Receipt Issuer, for onward transmission to DTC and to the relevant DTC Participants and to any holder of definitive Receipts, as soon as practicable after receipt, any notices, reports or other communications received from the Issuer or the Trustee in respect of the Global Securities held by Monte Titoli. Provision of information by holders Pursuant to the Tax Certification Procedures, in order to receive payments free of Italian substitute tax, any Beneficial Owner of Receipts may be required from time to time to provide to the Receipt Issuer and Acupay such proof of citizenship or residence, taxpayer status, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation as the Receipt Issuer or Acupay, as an agent of the Issuer, may deem necessary or proper or as the Issuer may reasonably require by written request to the Receipt Issuer, so long as the foregoing requests from the Receipt Issuer, Acupay or the Issuer are reasonably consistent with the Tax Certification Procedures. Each Beneficial Owner of Receipts will be required to comply with requests from Acupay, as agent of the Issuer, pursuant to applicable law and with regard to certain Italian tax and regulatory matters. Exchange for Definitive Registered Receipts and transfers thereof Definitive Registered Receipts will be issued in exchange for interests in Global Receipts only under the limited circumstances set out under “Book-Entry, Delivery and Form — Issuance of definitive registered Securities and definitive registered Receips.” Any Definitive Registered Receipts issued will not be eligible for settlement through DTC. The Tax Certification Procedures will not be available for Definitive Registered Receipts. Holders of Receipts in definitive form will receive payments of interest and other income net of Italian substitute tax when they independently comply with the procedures for an exemption from the application of Italian substitute tax contemplated by Italian law. Duties, responsibilities and rights of the Receipt Issuer The Deposit Agreement limits the Receipt Issuer’s obligations to the Issuer and to the Beneficial Owners of Receipts. Please read the following:  The Receipt Issuer is obligated to perform only such duties as are specifically set forth in the Deposit Agreement. 195

 The Receipt Issuer shall be liable for its own negligent action, its own negligent failure to act, or its own acts or omissions that constitute default, negligence, willful misconduct or bad faith, subject to certain exceptions, and no implied covenants or obligations shall be read into the Deposit Agreement against the Receipt Issuer.  The Receipt Issuer is not liable for any error of judgment made or with respect to any action taken by it in good faith, subject to certain qualifications.  The Receipt Issuer is not required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the Deposit Agreement, or in the exercise of any of its rights and powers.  The Receipt Issuer may conclusively rely and shall be fully protected in acting or refraining from acting upon any paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.  The Receipt Issuer may consult with counsel (or, to the extent reasonably necessary in the circumstances, other experts) of its selection and the advice of such counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it thereunder in good faith and in reliance thereon in accordance with such advice of counsel.  The Receipt Issuer shall not be bound to make any investigation into the facts or matters stated in any paper or document, but the Receipt Issuer, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the Securities.  The Receipt Issuer shall be under no obligation to exercise any of the rights or powers vested in it by the Deposit Agreement at the request, order or direction of DTC, a DTC Participant, a Holder or a Beneficial Owner pursuant to the Deposit Agreement, unless DTC, such DTC Participant or such Beneficial Owner shall have offered to the Receipt Issuer reasonable security and/or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request, order or direction, provided that such request, order or direction shall not expose the Receipt Issuer to personal liability.

 Whenever in the administration of its duties under the Deposit Agreement the Receipt Issuer shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence, bad faith or failure to comply with its obligations thereunder on the part of the Receipt Issuer, be deemed to be conclusively proved and established by an officers’ certificate delivered by the Issuer to the Receipt Issuer.  The Receipt Issuer shall not be liable for any action taken or omitted by it in good faith reasonably believed by it to be authorized by the Issuer and in compliance with the Deposit Agreement.  The Receipt Issuer shall not be responsible for (i) taxes and other governmental charges or (ii) such registration fees as may be in effect for the registration from time to time of transfers of interest in the Receipts.  The Receipt Issuer shall incur no liability to DTC, any DTC Participant or any Holder, Beneficial Owner or any other person under the Deposit Agreement or in connection therewith if, by reason of any provision of any present or future law or regulation of any governmental or regulatory authority or securities exchange, or by reason of the terms of the Securities, or by any reason of any act of God or war or other circumstance beyond the control of the Receipt Issuer, the Receipt Issuer shall be prevented or forbidden from doing or performing any act or thing which the terms of the Deposit Agreement provide shall be done or performed.  The Receipt Issuer shall not incur any liability to DTC, any DTC Participant, any Holder, or any Beneficial Owner or any other Person under the Deposit Agreement or in connection therewith by reason of any non-performance or delay in the performance of any act or thing, which the terms of the Deposit Agreement provide shall or may be done or performed by reason of any exercise of or failure to exercise in good faith any discretion provided for in the Deposit Agreement. Compensation, reimbursement and indemnity of the Receipt Issuer The Issuer undertakes to pay to the Receipt Issuer from time to time such compensation as agreed between them in writing for all services rendered by it under the Deposit Agreement and to reimburse the Receipt Issuer upon its request for all reasonable and necessary expenses, disbursements and advances incurred or made by the Receipt Issuer in accordance with any provision of the Deposit Agreement. The Issuer undertakes to indemnify the Receipt Issuer under certain circumstances.

196

Resignation and removal of the Receipt Issuer The resignation or removal of the Receipt Issuer and the appointment of a successor Receipt Issuer pursuant to the Deposit Agreement shall become effective at the time of acceptance of appointment by the successor Receipt Issuer in accordance with the applicable requirements of the Deposit Agreement. The Receipt Issuer may resign by giving written notice thereof to the Issuer, no less than 190 days prior to the effective date of such resignation. The Receipt Issuer may be removed at any time (i) upon no less than 90 days’ notice by the Issuer, or (ii) immediately upon the occurrence of certain events relating to the Receipt Issuer’s eligibility and capability of acting. If the Receipt Issuer shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Receipt Issuer, for any cause, the Issuer shall promptly appoint a successor Receipt Issuer (other than the Issuer) and shall comply with the applicable requirements of the Deposit Agreement. If no successor Receipt Issuer shall have been so appointed by the Issuer nor the appointment accepted, the Receipt Issuer may, on behalf of itself and all others similarly situated, appoint a replacement Receipt Issuer reasonably acceptable to the Issuer.

The Issuer shall give, or shall cause such successor Receipt Issuer to give, notice of each resignation and each removal of a Receipt Issuer and each appointment of a successor Receipt Issuer to the Holders in accordance with the Deposit Agreement. Governing law and jurisdiction The Deposit Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of the State of New York. The Issuer irrevocably agrees that the Federal or State courts in the Borough of Manhattan, The City of New York are to have non-exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Deposit Agreement and that accordingly any suit, action or proceeding (“Proceedings”) arising out of or in connection with the Deposit Agreement shall be brought in such courts. The Issuer appoints CT Corporation at its registered office for the time being as its agent for service of process for Proceedings in such courts, and undertakes that, in the event of ceasing so to act, it will appoint another person as its agent for service of process for Proceedings in such courts. Nothing herein shall affect the right to serve proceedings in any other manner permitted by law. Amendments to the Deposit Agreement The Issuer and the Receipt Issuer may amend the Deposit Agreement without the consent of the Holders or the Beneficial Owners of the Receipts:  to cure any ambiguity, omission, defect or inconsistency;  to add to the covenants and agreements of the Receipt Issuer or the Issuer;  to add other series of Securities to the definition of “Series” and to make other amendments, supplements or additions to the Deposit Agreement to facilitate the issuance of Receipts with respect to such series, to establish the form and terms of the Receipts relating to such series, or to add to, change or eliminate any provisions of the Deposit Agreement in respect of such series;  to evidence or effectuate the assignment of the Receipt Issuer’s rights and duties to a qualified successor;  to comply with any requirements of the U.S. Securities Act of 1933, as amended, the U.S. Securities Exchange Act of 1934, as amended, the U.S. Investment Company Act of 1940, as amended or any other applicable law, rule or regulation;  if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure or facilitate compliance therewith or the Tax Certification Procedures, in accordance with such changed laws, rules or regulations;  to amend or supplement the Deposit Agreement in order to provide for alternative means of settlement if Monte Titoli is no longer the Securities Depositary and such change is not materially adverse to the Holders; or  to modify, alter, amend or supplement the Deposit Agreement in any other manner that do not materially prejudice the rights and interests of the Holders or Beneficial Owners. Satisfaction and discharge The Deposit Agreement will, at the request of the Issuer, cease to be of any effect if (i) the Issuer has paid all sums payable by it in respect of the Securities, and (ii) the Issuer has delivered to the Receipt Issuer the documentation contemplated by the

197

Deposit Agreement in support of the satisfaction of all conditions relating to the satisfaction and discharge of the Deposit Agreement.

198

CERTAIN TAX CONSIDERATIONS

The statements herein regarding taxation are based on the laws and/or interpretations in force as of the date of this Offering Circular. The Issuer will not update this summary to reflect changes and/or interpretations. The following summary does not purport to be a comprehensive description of all the tax considerations which may be relevant to a decision to subscribe for, purchase, own or dispose of Securities or Receipts and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities or commodities) may be subject to special rules. Prospective purchasers of Securities or Receipts are advised to consult their own tax advisers concerning the overall tax consequences of their ownership of Securities or Receipts. This summary is based upon the laws and/or practice in force as of the date of this Offering Circular. Tax laws and interpretations may be subject to frequent changes which could be made on a retroactive basis. The considerations contained in this Offering Circular in relation to tax issues are made in order to support the marketing of the financial instruments herein described and cannot be considered as a legal or tax advice. Investors should consult their own tax advisors in connection with the tax regime applicable to the purchase, the ownership and the sale of the Securities or Receipts. Material U.S. tax considerations

TO ENSURE COMPLIANCE WITH UNITED STATES INTERNAL REVENUE SERVICE (“IRS”) CIRCULAR 230, PROSPECTIVE HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF OR REFERENCE TO U.S. FEDERAL TAX ISSUES IN THIS OFFERING MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY PROSPECTIVE HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE U.S. INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS BEING USED BY THE ISSUER IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. This section describes the material U.S. federal income tax consequences of owning, holding and disposing of Securities (including Receipts). This discussion applies to you only if you acquire Securities (including Receipts) in this offering at the price at which Securities (including Receipts) are offered, and hold Securities (including Receipts) as capital assets for U.S. federal income tax purposes. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:  a dealer in securities,  a trader in securities that elects to use a mark-to-market method of accounting for securities holdings,  a tax-exempt organization,  a life insurance company,  a person liable for U.S. alternative minimum tax,  a thrift institution, regulated investment company, real estate investment trust or an entity treated as a conduit or financial intermediary for U.S. federal income tax purposes,  a person that actually or constructively owns 10% or more of the Issuer’s voting stock,

 a person that holds Securities or Receipts as part of a straddle, hedging or conversion transaction, or  a U.S. Holder (as defined below) whose functional currency is not the U.S. dollar. In addition, if a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of Securities or Receipts, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A beneficial owner of Securities or Receipts that is a partnership (including any entity treated as a partnership for U.S. federal income tax purposes), and partners in such partnership, should consult their own tax advisors regarding the tax consequences of owning, holding and disposing of Securities or Receipts. This section is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, final, temporary and proposed regulations promulgated thereunder, administrative rulings and court decisions in respect thereof, and the Convention Between the Government of the United States of America and the Government of the Italian Republic for the Avoidance of Double Taxation with Respect to Taxes on Income and the Prevention of Fraud or Fiscal Evasion, including the protocol thereto (the “Treaty”), in each case as in effect as of the date hereof and all of which are subject to change, possibly on a retroactive basis. As discussed below, the U.S. federal income tax treatment of a financial instrument like Securities and

199

Receipts under the Code and the Treaty is not certain, and potential holders should consult their own tax advisors as to the effect of such uncertainty on an investment in the Securities or Receipts in their particular circumstances. This section applies to U.S. Holders (as defined below). If you are not a U.S. Holder, it does not apply to you. You are a “U.S. Holder” if you are a beneficial owner of Securities or Receipts and you are:  a citizen or resident of the United States;  a corporation or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;  an estate whose income is subject to U.S. federal income tax regardless of its source; or  a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust or that has made a valid election under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. In general, if you hold Receipts you will be treated as the owner of the Securities underlying the Receipts for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange Receipts for Securities.

You should consult your own tax advisor regarding the United States federal, state and local and the Italian and other tax consequences of owning and disposing of the Securities or the Receipts in your particular circumstances. This discussion addresses only U.S. federal income taxation. For a discussion of Italian tax considerations, please see “— Italian taxation.” Treatment of the Securities The U.S. federal income tax treatment of a financial instrument with terms similar to the features of the Securities or Receipts is not entirely certain. The Securities are in form indebtedness and are treated as indebtedness for Italian tax purposes, and provide for a repayment of their principal amount at maturity. Notwithstanding the attributes described in the preceding sentence, other factors such as (i) the maturity date of the Securities, (ii) the provisions relating to the potential deferral of interest payments on the Securities and (iii) certain of the provisions relating to the creditor rights of holders under Italian law, suggest that the Securities and Receipts are properly characterized as equity of the Issuer for U.S. federal income tax purposes, and the terms of the Securities will require a U.S. Holder and the Issuer (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary) to treat the Securities and Receipts for U.S. federal income tax purposes in accordance with this characterization. Except as discussed under the heading “— Potential Alternative Characterizations of the Securities and Receipts” below, the discussion below assumes that the Securities and Receipts will be treated as equity of the Issuer. U.S. Holders should consult with their own tax advisers about the possibility of the recharacterization of the Securities and Receipts for U.S. federal income tax purposes in their individual circumstances. Interest payments on the Securities Under the U.S. federal income tax laws, and subject to the passive foreign investment company (“PFIC”) rules discussed below, if you are a U.S. Holder, the interest payments with respect to the Securities, notwithstanding being denominated as “interest,” will be treated as dividends to the extent of the Issuer’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Interest payments in excess of the Issuer’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be treated as a non-taxable return of capital to the extent of your basis in the Securities or Receipts and thereafter as capital gain. However, the Issuer does not currently maintain calculations of its earnings and profits for U.S. federal income tax purposes and is not expected to do so in the future. Generally, you will be required to report all interest payments you receive as dividend income for U.S. federal income tax purposes. Such dividend income will be includible in taxable income in the year in which such dividend income is received, actually or constructively, in accordance with your method of accounting for U.S. federal income tax purposes, subject to the application of the PFIC rules and the Section 305 rules, each discussed below. If you are a noncorporate U.S. Holder, interest payments you receive that are treated as dividends that constitute “qualified dividend income” will be taxable to you at a current maximum tax rate of 20% provided that you hold the Securities or Receipts for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, which in this case generally should be the relevant record date in respect of the applicable interest payment date (or, if the dividend is attributable to a period or periods aggregating over 366 days, provided that you hold the Securities or Receipts for more than 90 days during the 181-day period beginning 90 days before the ex-dividend date) and meet other holding period requirements, and provided that the Issuer is eligible for benefits under the Treaty. The Issuer is expected to satisfy continuously one or more of the Treaty benefit eligibility tests, and as a result it is expected that interest paid by the Issuer with respect to the Securities generally will be qualified dividend income.

200

With respect to any interest payments you receive on the Securities or Receipts (and regardless of the characterization of such payments for U.S. federal income tax purposes), you must include any Italian tax withheld from the interest payment in the gross amount of income realized by you as a result of such interest payment, even though you do not in fact receive it. Interest payments on the Securities or Receipts will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. Subject to certain limitations that will depend, in part, on a U.S. holder’s individual circumstances, any Italian tax withheld and paid over to Italy will be creditable or deductible against your U.S. federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 20% tax rate. To the extent a refund of the tax withheld is available to you under Italian law or pursuant to the terms of the Treaty, or the Italian tax withheld is otherwise recoverable or avoidable by you, the amount of tax withheld that is refundable or otherwise recoverable or avoidable will not be eligible for credit against your U.S. federal income tax liability, even if you do not actually seek such refund or take such other actions as are available to you to recover or to avoid such tax withheld. See “— Italian taxation — Tax treatment of the Securities — Non-Italian resident holders of the Securities” for the procedures required to avoid the application of Italian withholding tax, as well as to obtain a refund or otherwise recover any Italian tax withheld in your individual circumstances. The amount of any interest payments you receive on the Securities or Receipts will be income from sources outside the United States, and will, depending on your circumstances, be treated as derived from “passive” or “general” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you. A U.S. Holder may make an election to treat all foreign taxes paid as deductible expenses in computing taxable income, rather than as a credit against tax, subject to generally applicable limitations on deductions. Such an election, once made, generally applies to all foreign taxes paid for the taxable year that are subject to the election. The rules governing foreign tax credits are very complex and such credits are subject to substantial limitations. U.S. Holders are strongly encouraged to consult their own tax advisors to determine whether they are subject to any special rules that may limit their ability to make effective use of foreign tax credits in their particular circumstances, and whether or not the election to treat foreign taxes as deductible expenses would be appropriate based on their particular circumstances. Section 305 rules Pursuant to Section 305(b)(2) of the Code, a distribution (or a series of distributions of which such a distribution is one) of stock rights constitutes a “disproportionate distribution,” and is therefore taxable, if the distribution results in (a) the receipt of property by some stockholders (including holders of any securities, including Junior Securities, that are treated as equity for purposes of these rules, such as convertible debt), and (b) an increase in the proportionate interest of other stockholders in the assets or earnings and profits of the distributing corporation. For this purpose, the term “property” means money, securities and any other property, except that such term does not include stock in the corporation making the distribution or rights to acquire such stock. A “series of distributions” encompasses all distributions of stock made or deemed made by a corporation which have the result of receipt of cash or property by some stockholders and an increase in the proportionate interests of other stockholders. It is not necessary for a distribution of stock to be considered as one of a series of distributions that such distribution be pursuant to a plan to distribute cash and property to some stockholders and to increase the proportionate interests of the other stockholders, rather it is sufficient if there is a distribution (or a deemed distribution) having such effect. In addition, there is no requirement that both elements of Section 305(b)(2) of the Code occur in the form of a distribution or series of distributions as long as the result is that some stockholders receive cash and property and other stockholders’ proportionate interests increase. Under the applicable Treasury regulations, where the receipt of cash or property occurs more than 36 months following a distribution or series of distributions of stock, or where a distribution is made more than 36 months following the receipt of cash or property, such distribution or distributions will be presumed not to result in the receipt of cash or property by some stockholders and an increase in the proportionate interest of other stockholders, unless the receipt of cash or property by some stockholders and the distribution or series of distributions are made pursuant to a plan. Pursuant to the Indenture, as described under “Description of the Securities”, under certain limited circumstances, the Issuer would be permitted to make distributions on Junior Securities (which could include another class of securities of the Issuer treated as equity for U.S. federal income tax purposes) even though interest payments are not being made on the Securities. Accordingly, if the Issuer makes such distributions, and such distributions are properly treated as dividends, on any Junior Securities treated as equity for U.S. federal income tax purposes and accrues but does not make interest payments on the Securities, the amount of such accrued but unpaid interest payments may constitute a disproportionate distribution within the meaning of the rules described in the preceding paragraph, and would accordingly be treated as a deemed dividend includible in taxable income to a U.S. Holder for U.S. federal income tax purposes on the date of such accrual. The application of the Section 305 rules to the Securities or Receipts could result in taxable income being recognized by you in respect of an investment in the Securities or Receipts even though no cash is actually distributed on the Securities or Receipts to you. You 201 should consult your own tax advisor concerning the effect, if any, of the potential application of the Section 305 rules on your investment in the Securities or Receipts in your particular circumstances. Sale, exchange or redemption of the Securities Subject to the PFIC rules discussed below, if you are a U.S. Holder and you sell or otherwise dispose of the Securities or Receipts, you generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in the Securities or Receipts. Capital gain of a noncorporate U.S. Holder is generally taxed at a current maximum rate of 20% where such noncorporate U.S. Holder has a holding period greater than one year. Such gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. The deductibility of capital losses is subject to limitations. Passive Foreign Investment Company Considerations The Issuer does not believe that it should be treated as, and does not expect to become, a PFIC for U.S. federal income tax purposes, nor does the Issuer believe it was a PFIC in the preceding year. However, this conclusion is a factual determination that is required to be made annually and thus may be subject to change. The Issuer is not a U.S. registrant under applicable U.S. securities laws, and is not required to provide updated U.S. tax information to U.S. holders of Securities or Receipts on a periodic basis other than as specifically described below under “Backup Withholding and Information Reporting,” which does not generally require the Issuer to report whether or not it is a PFIC. U.S. Holders should consult with their own advisors as to the possibility of having to make their own determination of the Issuer’s status as a PFIC in future taxable in their individual circumstances. If the Issuer were to be treated as a PFIC, gain realized on the sale or other disposition of the Securities or Receipts would in general not be treated as capital gain. Additionally, if the Issuer were to defer interest payments on the Securities, subsequent interest payments made in cash might be treated as “excess distributions” to the extent that they exceed 125% of the average interest payments you received on the Securities or Receipts (and any other amounts treated as dividends of the Issuer paid in respect of other equity in the Issuer) in the three preceding taxable years (or, if shorter, during your holding period in the Securities or Receipts. Instead, the amount of any such gain or excess distributions would be treated as if you had realized such gain and such excess distributions ratably over your holding period for the Securities or the Receipts and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, the Securities or Receipts will be treated as stock in a PFIC at the time such gain is recognized or such excess distribution is received if the Issuer was a PFIC at any time during your holding period in the Securities or Receipts. Current law provides for certain elections that would be available that would result in alternative treatments of such gain and such excess distributions, including a “mark-to-market” election (the availability of which would depend on, among other factors, whether the Securities (including Receipts) are considered to be traded on an exchange) and a “qualified electing fund” election, which would depend on the Issuer making certain information about the ordinary income and net gain of the Issuer as determined for U.S. tax purposes, and which the Issuer does not currently plan to calculate or provide to holders of the Securities or Receipts. Interest payments that you receive on the Securities or Receipts will not be eligible for the special tax rates applicable to qualified dividend income if the Issuer is treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income. U.S. Holders should consult their individual advisors as to the possibility of holding stock in a PFIC, as well as to whether a mark-to-market election in respect of the Issuer’s stock would be available, in their individual circumstances. Potential alternative characterizations of the Securities and Receipts As discussed above, the U.S. federal income tax treatment of the Securities and Receipts is not certain, and therefore it is possible that the IRS or the courts could issue a published ruling which would suggest, or the IRS could rule specifically with respect to the Securities or Receipts, that the Securities and Receipts are properly treated as indebtedness of the Issuer for U.S. federal income tax purposes, rather than equity. If the Securities and Receipts were so treated, you generally would be required to include the interest payments on the Securities and the Receipts as ordinary interest income when actually or constructively received in accordance with your method of accounting, and the general discussion with respect to the treatment of any Italian tax withheld in respect of such interest payments would remain applicable. If the Securities and Receipts are recharacterized as indebtedness of the Issuer, it is very possible that the Securities and Receipts would also be treated under applicable Treasury regulations as a contingent payment debt instrument, in which case (i) you would be required to accrue interest on the Securities and Receipts currently, in accordance with a projected payment schedule that takes into account the various contingencies relating to the timing of payments under the Securities (including the Issuer’s option to defer interest payments), even if you are otherwise subject to the cash basis method of accounting for tax purposes, and such income inclusions would be subject to positive or negative adjustments at the time the Issuer actually makes cash interest payments on the Securities; and (ii) you would be required to treat any gain that you recognize upon the sale, 202 exchange, redemption or maturity of the Securities and Receipts as ordinary interest income that is not subject to taxation at preferential rates. Any interest income would generally be treated as derived from non-U.S. sources for foreign tax credit limitation purposes. In general, the treatment of the Securities as indebtedness that is subject to the contingent payment debt interest rules would likely result in a U.S. holder recognizing taxable income on the Securities and Receipts prior to the receipt of cash in respect of such taxable income. You should consult your own tax advisor as to the tax consequences to you if the Securities and Receipts are classified as debt for U.S. federal income tax purposes. In addition, for the purposes of determining the creditworthiness of the Issuer, the Securities are treated for ratings purposes as in part indebtedness and in part equity. Although in general such a bifurcated treatment likely would not be respected for U.S. federal income tax purposes in relation to a financial instrument that provides for a single series of periodic cash flows and a repayment of principal at maturity, U.S. holders should consult their own tax advisors as to the possible effect of the “hybrid” treatment of the Securities for ratings purposes on the U.S. federal income tax characterization and treatment of the Securities and Receipts. Medicare contribution tax on unearned income Certain net investment income earned by U.S. citizens and resident aliens and certain estates or trusts for taxable years beginning after December 31, 2012 is subject to an additional 3.8% tax. Net investment income includes, among other things, dividends on and capital gains from the sale, retirement or other taxable disposition of shares of stock, which includes financial instruments treated as equity for U.S. federal income tax purposes such as the Securities and Receipts, and also includes interest income in respect of indebtedness. You should consult your own tax advisor concerning the effect, if any, of this tax on holding the Securities and Receipts in your particular circumstances.

Backup withholding and information reporting If you are a noncorporate U.S. Holder, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to interest payments or other taxable distributions made to you within the United States and the payment of proceeds to you from the sale of the Securities and Receipts effected at a United States office of a broker. Additionally, backup withholding may apply to such payments if you are a noncorporate U.S. Holder that fails to provide an accurate taxpayer identification number, is notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns, or in certain circumstances, fails to comply with applicable certification requirements. Payment of the proceeds from the sale of the Securities and Receipts effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of the Securities and Receipts that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if: the proceeds are transferred to an account maintained by you in the United States; the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or the sale has some other specified connection with the United States as provided in U.S. Treasury regulations, in each case unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption. In addition, a sale of the Securities or Receipts effected at a foreign office of a broker will be subject to information reporting if the broker is:  a United States person;  a controlled foreign corporation for U.S. federal income tax purposes;  a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period; or  a foreign partnership, if at any time during its tax year one or more of its partners are “U.S. persons,” as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or such foreign partnership is engaged in the conduct of a United States trade or business, in each case unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person. Backup withholding is not an additional tax. You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by timely filing a refund claim with the United States Internal Revenue Service. This discussion of backup withholding and information reporting should be read in conjunction with the certification requirements applicable to U.S. persons who are eligible to receive interest payments on the Securities or Receipts without withholding for Italian tax, described under “— Italian taxation — Non-Italian resident holders of the Securities.” 203

Disclosure of information with respect to foreign financial assets Certain U.S. individuals who hold any interest in “specified foreign financial assets,” including the Securities and Receipts, during such holder’s taxable year must attach to their U.S. tax return for such year certain information with respect to each such asset if the aggregate value of all of such assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), unless such Securities or Receipts are held in an account maintained by a U.S. payer, such as a U.S. financial institution or the U.S. branch of a foreign bank or insurer. For this purpose, a “specified foreign financial asset” includes any depositary, custodial or other financial account maintained by a foreign financial institution, and certain assets that are not held in an account maintained by a financial institution, including any stock or security issued by a person other than a U.S. person. A taxpayer subject to these rules who fails to furnish the required information may be subject to a penalty of $10,000, and an additional penalty may apply if the failure continues for more than 90 days after the taxpayer is notified of such failure by the IRS, unless the taxpayer demonstrates a reasonable cause for such failure to comply. An accuracy-related penalty of 40% is imposed for an underpayment of tax that is attributable to an “undisclosed foreign financial asset understatement,” which for this purpose is the portion of the understatement of gross income for any taxable year that is attributable to any transaction involving an “undisclosed foreign financial asset,” including any asset that is subject to information reporting requirements under these rules, which would include the Securities or Receipts if the dollar threshold described above were satisfied. The applicable statute of limitations for assessment of U.S. federal income taxes is extended to six years if a taxpayer omits from gross income more than $5,000 and such omission is attributable to a foreign financial asset as to which reporting is required under the rules described in the preceding paragraph or would be so required if such rules were applied without regard to the dollar threshold or any other exceptions specified by the IRS. In addition, the statute of limitations will be suspended if a taxpayer fails to provide in a timely manner either information with respect to specified foreign financial assets required to be reported or the annual information reports required for holders of PFIC stock, including PFIC stock for which a QEF election is made. You should consult your own tax advisor concerning any obligation you may have to furnish information to the IRS as a result of holding the Securities or Receipts. Italian taxation Tax treatment of the Securities To the extent that the Securities qualify as obbligazioni or titoli similari alle obbligazioni, as defined herein, interest, premium and other proceeds (including the difference between the redemption amount and the issue price, hereinafter collectively referred to as “Interest”) deriving from the Securities, are subject to the tax regime provided for by Decree No. 239. Decree No. 239 applies to such notes which fall within the category of bonds (obbligazioni) or debentures similar to bonds (titoli similari alle obbligazioni) pursuant to Article 44 of Italian Presidential Decree No. 917 of 22 December 1986, as amended (“Decree 917”) provided that they are issued, inter alia, by Italian banks and Italian resident companies with shares listed on a regulated market of the European Union or of the European Economic Area. For this purpose, debentures similar to bonds are securities, other than shares and securities similar to shares, that incorporate an unconditional obligation to pay, at maturity, an amount not lower than that indicated thereon and that do not allow direct or indirect participation in the management of the issuer or of the business in relation to which they have been issued. Italian resident holders of the Securities Pursuant to Decree No. 239, payments of Interest relating to the Securities are subject to the imposta sostitutiva, levied at the rate of 20% if the holder of the Securities is: (i) an individual resident in the Republic of Italy for Italian tax purposes, holding the Securities otherwise than in connection with entrepreneurial activities, unless he has entrusted the management of their financial assets, including the Securities, to an Authorized Intermediary and has opted for the risparmio gestito regime (the “Asset Management Option”) according to Article 7 of Legislative Decree No. 461 of November 21, 1997 as amended (“Decree No. 461”); or

(ii) an Italian resident partnership (other than società in nome collettivo, società in accomandita semplice or similar partnerships), or a de facto partnership not carrying out commercial activities and professional associations; or (iii) an Italian resident public and private institution, other than companies, not carrying out commercial activities; or (iv) an Italian resident entity exempt from Italian corporate income tax. All the above categories are usually referred as “net recipients.” In the event that the Italian resident holders mentioned above hold the Securities in connection with an entrepreneurial activity (attività d’impresa), the imposta sostitutiva applies as a tax on account. Interest will be included in the relevant

204 beneficial owner’s Italian income tax return and will be subject to Italian ordinary income taxation and the imposta sostitutiva may be recovered as a deduction from Italian income tax due. Pursuant to Decree No. 239, the imposta sostitutiva is levied by banks, società di intermediazione mobiliare (“SIM”), fiduciary companies, società di gestione del risparmio (“SGR”) and other entities identified by the Ministry of Finance (each, an “Intermediary”). An Intermediary must: (a) be resident in Italy, or be a permanent establishment in Italy of a non-Italian resident financial intermediary; and (b) participate, in any way, in the collection of Interest or in the transfer of the Securities. Where the Securities are not deposited with an Intermediary, the imposta sostitutiva is applied and withheld by the relevant Italian financial intermediary (or permanent establishment in Italy of a non-Italian resident financial intermediary) paying the Interest to a holder of the Securities. Payments of Interest in respect of the Securities will not be subject to 20% imposta sostitutiva if made to beneficial owners who are: (i) Italian tax resident corporations or permanent establishments in Italy of non-Italian resident entities to which the Securities are effectively connected; (ii) Italian tax resident individuals holding the Securities otherwise than in connection with entrepreneurial activity who have entrusted the management of their financial assets, including the Securities, to an authorized financial intermediary and have opted for the Asset Management Option; Italian resident individuals holding the Securities otherwise than in connection with entrepreneurial activity who have opted for the Asset Management Option are subject to an annual substitutive tax of 20% (the “Asset Management Tax”) on the increase in value of the managed assets accrued at the end of each tax year (which increase would include interest and other proceeds accrued on the Securities). The Asset Management Tax is applied by authorized Intermediaries. Non-Italian resident holders of the Securities Where the holder of the Securities is a non-Italian resident without permanent establishment in Italy to which the Securities are effectively connected, an exemption from the imposta sostitutiva applies provided that the non-Italian resident beneficial owner is: (a) resident, for tax purposes, in a country which allows for a satisfactory exchange of information with Italy (the “White List States”) as listed (i) in the Italian Ministerial Decree dated September 4, 1996, as amended and supplemented from time to time, or (ii), as from the fiscal year in which the decree pursuant to article 168-bis of Decree 917 is effective, in the list of States allowing an adequate exchange of information with the Italian tax authorities as per the decree issued to implement article 168-bis, paragraph 1 of Decree 917 (for the five years starting on the date of publication of the Decree in the Official Gazette, States and territories that are not included in the current black-lists set forth by Ministerial Decrees of May 4, 1999, November 21, 2001 and January 23, 2002 nor in the current white list set forth by Ministerial Decree of September 4, 1996 are deemed to be included in the new white-list); or (b) an international body or entity set up in accordance with international agreements which have entered into force in Italy; or (c) a Central Bank or an entity which manages, inter alia, the official reserves of a foreign State; or (d) an “institutional investor” is established in a country which allows for a satisfactory exchange of information with Italy even if it does not possess the status of taxpayer in its country of residence. The imposta sostitutiva will be applicable at the rate of 20% (or at the reduced rate provided for by the applicable double tax treaty, if any) to Interest paid to holders of the Securities (or Receipts) who are resident, for Italian tax purposes, in countries other than the White List States. As of September 1, 2013, the White List nations include the following states:

Albania Egypt Macedonia South Korea Algeria Estonia Malta Spain Argentina Finland Mauritius Sri Lanka Australia France Mexico Sweden Austria Germany Morocco Tanzania Bangladesh Greece Netherlands Thailand Belarus Hungary New Zealand Trinidad and Tobago Belgium Iceland Norway Tunisia Brazil India Pakistan Turkey Bulgaria Indonesia Philippines Ukraine 205

Canada Ireland Poland United Arab Emirates China Israel Portugal United Kingdom Côte d’Ivoire Japan Romania United States Croatia Kazakhstan Russian Federation Venezuela Cyprus Kuwait Singapore Vietnam Czech Republic Latvia Slovak Republic Yugoslavia(1) Denmark Lithuania Slovenia Zambia

Ecuador Luxemburg South Africa (1) (PLEASE NOTE: the Italian tax administration has not clarified whether the states derived from the former Yugoslavia are to be treated as being on the White List.) In order to ensure gross payment, non-Italian tax resident holders of the Securities (or Receipts) must be the beneficial owners of the payments of Interest and must: (a) deposit, directly or indirectly, the Securities (or Receipts) with a resident bank or SIM or a permanent establishment in Italy of a non-Italian resident bank or SIM or with a non-Italian resident entity or company participating in a centralized securities management system which is in contact, via computer, with the MEF; and (b) file with the relevant depositary, prior to or concurrently with the deposit of the Securities (or the Receipts) and in no event later than an Interest payment made in connection with the holding or disposal of the Securities (or the Receipts), a certification by or on behalf of the relevant holder of the Securities (or the Receipts), which remains valid until withdrawn or revoked, in which the holder of the Securities (or the Receipts) declares to be eligible to benefit from the applicable exemption from imposta sostitutiva. This certification, which is not requested for international bodies or entities set up in accordance with international agreements which have entered into force in Italy nor in the case of foreign Central Banks or entities which manage, inter alia, the official reserves of a foreign State, must comply with the requirements set forth by Ministerial Decree of December 12, 2001.

As far as U.S. Holders are concerned, the Issuer has arranged for certain procedures to facilitate the collection and processing of these certifications with respect to Beneficial Owners of Receipts. See “Risk Factors — Risks related to the Securities,” “Important Italian Substitute Tax Requirements and Information in Respect of the Tax Certification Procedures,” “Book- Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures” and “Annex B — Acupay Italian Tax Compliance and Relief Procedures.” The imposta sostitutiva will be applicable at the rate of 20% to Interest paid to holders of the Securities and the Receipts not eligible for the exemption mentioned above. Investors eligible for a lower rate of taxation under a tax treaty, where applicable, may seek relief pursuant to the ordinary refund procedure. Capital gains tax Italian resident holders of the Securities Any gain obtained from the sale or redemption of the Securities would be treated as part of the taxable income (and, in certain circumstances, depending on the “status” of the holder of the Securities, also as part of the net value of the production for IRAP purposes) if realized by an Italian company, a similar commercial entity (including the Italian permanent establishment of foreign entities to which the Securities are connected) or Italian resident individuals engaged in an entrepreneurial activity to which the Securities are connected. Where an Italian resident holder of the Securities is (i) an individual not engaged in an entrepreneurial activity, (ii) a non- commercial partnership, or a non-commercial private or public institution to which the Securities are connected, any capital gain realized by such holder of the Securities from the sale or redemption of the Securities would be subject to an imposta sostitutiva, levied at the rate of 20%. Holders of the Securities may set off any losses with their gains. Capital losses realized before January 1, 2012 may be carried forward to be offset against subsequent capital gains of the same nature realized after January 1, 2012 for an overall amount of 62.5% of the relevant capital losses. In respect of the application of imposta sostitutiva, taxpayers may opt for one of the three regimes described below: (a) Under the tax declaration regime (regime della dichiarazione), which is the default regime for Italian resident individuals not engaged in an entrepreneurial activity to which the Securities are connected, the imposta sostitutiva on capital gains will be chargeable, on a cumulative basis, on all capital gains (net of any incurred capital loss) realized by the Italian resident individual holder of the Securities holding the Securities. In this instance, “capital gains” means any capital gain not connected with an entrepreneurial activity pursuant to all sales or redemptions of the Securities carried out during any given tax year. Italian resident individuals holding the Securities not in connection with an entrepreneurial activity must indicate the overall capital gains realized in any tax year, net of any relevant incurred 206

capital loss, in the annual tax return and pay the imposta sostitutiva on such gains together with any balance income tax due for such year. Capital losses in excess of capital gains may be carried forward against capital gains realized in any of the four succeeding tax years. (b) As an alternative to the tax declaration regime, Italian resident individual holders of the Securities holding the Securities not in connection with an entrepreneurial activity may elect to pay the imposta sostitutiva separately on capital gains realized on each sale or redemption of the Securities (the risparmio amministrato regime). Such separate taxation of capital gains is allowed subject to: (i) the Securities being deposited with Italian banks, SIMs or certain authorized financial intermediaries; and

(ii) an express election for the risparmio amministrato regime being timely made in writing by the relevant holder of the Securities. The depositary must account for the imposta sostitutiva in respect of capital gains realized on each sale or redemption of the Securities (as well as in respect of capital gains realized upon the revocation of its mandate), net of any incurred capital loss. The depositary must also pay the relevant amount to the Italian tax authorities on behalf of the taxpayer, deducting a corresponding amount from the proceeds to be credited to the holder of the Securities or using funds provided by the holder of the Securities for this purpose. Under the risparmio amministrato regime, where a sale or redemption of the Securities results in a capital loss, which may be deducted from capital gains subsequently realized, within the same securities management, in the same tax year or in the following tax years up to the fourth. Under the risparmio amministrato regime, the holder of the Securities is not required to declare the capital gains in the annual tax return. (c) Under the “risparmio gestito” regime, any capital gains realized by Italian resident individuals holding the Securities not in connection with an entrepreneurial activity who have entrusted the management of their financial assets (including the Securities) to an authorized intermediary, will be included in the computation of the annual increase in value of the managed assets accrued, even if not realized, at year end, subject to a 20.0% substitute tax, to be paid by the managing authorized intermediary. Any depreciation of the managed assets accrued at the year-end may be carried forward against increase in value of the managed assets accrued in any of the four succeeding tax years. The holder of the Securities is not required to declare the capital gains realized in the annual tax return. Non-Italian resident holders of the Securities Capital gains realized by non-Italian resident holders of the Securities, not having a permanent establishment in Italy to which the Securities are connected, from the sale or redemption of the Securities if issued by an Italian resident issuer not traded on regulated markets are not subject to the imposta sostitutiva, provided that the effective beneficiary is: (a) resident in a country which allows for a satisfactory exchange of information with Italy; (b) an international entity or body set up in accordance with international agreements which have entered into force in Italy; (c) a Central Bank or an entity which manages, inter alia, the official reserves of a foreign State; or (d) an “institutional investor,” whether or not subject to tax, which is established in a country which allows for a satisfactory exchange of information with Italy. If none of the conditions above is met, capital gains realized by non-Italian resident holders of the Securities from the sale or redemption of the Securities if issued by an Italian resident issuer and not traded on regulated markets are subject to the imposta sostitutiva at the current rate of 20%. However, holders of the Securities may benefit from a double taxation treaty with Italy providing that the capital gains realized upon the sale or redemption of Securities are to be taxed only in the resident tax country of the recipient. Capital gains realized by non-Italian resident holders of the Securities from the sale or redemption of Securities issued by a non-Italian resident issuer are not subject to Italian taxation, provided that the Securities are held outside Italy.

Inheritance and gift taxes Transfers of any valuable asset (including the Securities or other securities) as a result of death or donation are taxed as follows: (a) transfers in favor of spouses and direct descendants or direct ancestors are subject to an inheritance and gift tax applied at a rate of 4% on the value of the inheritance or gift exceeding €1,000,000;

207

(b) transfers in favor of relatives to the fourth degree or relatives-in-law to the third degree are subject to an inheritance and gift tax at a rate of 6% on the entire value of the inheritance or the gift. Transfers in favor of brothers/sisters are subject to the 6% inheritance and gift tax on the value of the inheritance or gift exceeding €100,000; and (c) any other transfer is subject to an inheritance and gift tax applied at a rate of 8% on the entire value of the inheritance or gift. Transfer tax Contracts relating to the transfer of securities are subject to a €168 registration tax as follows: (i) public deeds and notarized deeds are subject to mandatory registration; (ii) private deeds are subject to registration only in the case of voluntary registration. EU Savings Directive as implemented in Italy Under the EU Savings Directive, Member States are required to provide to tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State or to certain limited types of entities established in that other Member State. However, for a transitional period, Luxemburg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories including Switzerland have adopted similar measures. If a payment on the Securities were to be made or collected through a Member State which has opted for a withholding system and an amount of, or an amount in respect of, tax were to be withheld from that payment, neither the Issuer nor the Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Security as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the EU Savings Directive. On November 13, 2008, the European Commission published a proposal for amendments to the EU Savings Directive, which included a number of suggested changes. The European Parliament approved an amended version of the proposal on April 24, 2009. If any of those proposed changes are made in relation to the EU Savings Directive, they may amend or broaden the scope of the requirements described above. Investors who are in any doubt as to their position should consult their professional advisers. Italy has implemented the EU Savings Directive through Legislative Decree April 18, 2005, No. 84 (“Decree 84”). Under Decree 84, subject to a number of important conditions being met, in the case of interest paid to individuals which qualify as beneficial owners of the interest payment and are resident for tax purposes in another Member State or in an associated territory under the relevant international agreements, Italian qualified paying agents (e.g. banks, SIMs, fiduciary companies resident for tax purposes in Italy, permanent establishments in Italy of non-resident persons and any other economic operator resident for tax purposes in Italy paying interest for professional or commercial reasons) shall report details of the relevant payments and personal information on the individual beneficial owner to the Italian tax authorities. Such information is transmitted by the Italian tax authorities to the competent foreign tax authorities of the State of residence of the beneficial owner. In certain circumstances, the same reporting requirements must be complied with also in respect of interest paid to an entity established in another Member State, other than legal persons (with the exception of certain Finnish and Swedish entities), whose profits are taxed under general arrangements for business taxation and, in certain circumstances, Undertakings for Collective Investment in Transferable Securities recognized in accordance with Directive 85/611/EEC. Either payments of interest on the Securities or the realization of the accrued interest through the sale of the Securities would generally constitute “payments of interest” under Article 6 of the EU Savings Directive and, as far as Italy is concerned, Article 2 of Decree 84.

208

CERTAIN ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition of the Securities (including Receipts) that are purchased or held by employee benefit plans that are subject to Title I of Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws, rules or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such plans, accounts and arrangements (each, a “Plan”). The following summary regarding certain aspects of ERISA and the Code is based on the provisions of ERISA and the Code (and the related regulations and administrative interpretations), each as in existence on the date of this Offering Circular. This summary is general in nature and does not address every issue pertaining to ERISA and the Code that may be applicable to us, the Securities and Receipts or a particular investor. No assurance can be given that future legislation, court decisions, administrative regulations, rulings or administrative pronouncements will not significantly modify the requirements summarized herein. Any of these changes may be retroactive and may thereby apply to transactions entered into prior to the date of their enactment or release. Accordingly, each prospective investor should consult with its own counsel in order to understand potential applicability of Title I of ERISA, Section 4975 of the Code and/or any Similar Laws to an investment in the Securities (including Receipts) that affect or may affect the investor with respect to this investment. General fiduciary matters ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the management or administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan. Persons who may exercise such authority and control or are associated with investment decisions are advised to consult counsel with respect to their fiduciary status. In considering an investment in the Securities (including Receipts) of any portion of the assets of a Plan, regardless of whether the Plan is an ERISA Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws. A fiduciary of a Plan should consider the Plan’s particular circumstances and all of the facts and circumstances of the investment including, but not limited to, the matters discussed above under “Risk Factors,” in determining whether an investment in the Securities (including Receipts) satisfies these requirements. Prohibited transaction issues An investor who is considering acquiring the Securities (including Receipts) with the assets of an ERISA Plan must consider whether the acquisition and holding of the Securities (including Receipts) will constitute or result in a non-exempt prohibited transaction. Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code, unless an exemption is available. Examples of such non-exempt prohibited transactions include, but are not limited to, sales or exchanges of property, the lending of money, or extensions of credit between an ERISA Plan and a party in interest or disqualified person. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engages in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of the Securities (including Receipts) by an ERISA Plan with respect to which we or the acquiror are considered a party in interest or disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In the case of a Plan that involves individual retirement accounts or annuities described in Section 408 of the Code, the application of Section 4975 of the Code, in lieu of the application of the excise tax, may result in the account or annuity ceasing to be an individual retirement account or annuity and the deemed distribution of all assets of the account or annuity to the owner, notwithstanding that only a portion of the account or annuity is involved in a prohibited transaction. ERISA and the Code contain certain exemptions from the prohibited transactions described above and the U.S. Department of Labor has issued several exemptions, although certain exemptions do not provide relief from the prohibitions on self- dealing contained in Section 406(b) of ERISA and Sections 4975(c)(1)(E) and (F) of the Code. Statutory exemptions include 209

Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code pertaining to certain transactions with non-fiduciary service providers or certain of their affiliates. The U.S. Department of Labor has issued prohibited transaction class exemptions (“PTCEs”) that may apply to the acquisition and holding of the Securities (including Receipts). These class exemptions include, without limitation, PTCE 84-14, as amended, respecting transactions determined by independent qualified professional asset managers, PTCE 90-1, respecting insurance company pooled separate accounts, PTCE 91-38, respecting bank-maintained collective investment funds, PTCE 95-60, respecting life insurance company general accounts and PTCE 96-23, as amended, respecting transactions determined by in-house asset managers. There can be no assurance that any of these exemptions or any other exemption will be available with respect to the acquisition of the Securities (including Receipts), or that all of the conditions of any such exemptions will be satisfied. As a general rule, a governmental plan, as defined in Section 3(32) of ERISA (a “Governmental Plan”), a church plan, as defined in Section 3(33) of ERISA, that has not made an election under Section 410(d) of the Code (a “Church Plan”), and non-U.S. plans are not subject to the requirements of ERISA or Section 4975 of the Code. Accordingly, assets of such plans may be invested without regard to the fiduciary and prohibited transaction considerations described above. Although a Governmental Plan, a Church Plan or a non-U.S. plan is not subject to ERISA or Section 4975 of the Code, it may be subject to Similar Laws. A fiduciary of a Governmental Plan, a Church Plan or a non-U.S. plan should make its own determination as to the requirements, if any, under any Similar Law applicable to the acquisition of the Securities (including Receipts). Because of the foregoing, the Securities (including Receipts) should not be acquired or held by any person investing “plan assets” of any Plan, unless such acquisition and holding will not constitute a non-exempt prohibited transaction under ERISA and the Code or similar violation of any applicable Similar Laws. Plan asset considerations Section 3(42) of ERISA and the regulations promulgated thereunder by the DOL (the “Plan Asset Regulation”) describe what constitutes the assets of a Plan with respect to such Plan’s investment in an entity for purposes of certain provisions of ERISA, including the fiduciary responsibility provisions of Title I of ERISA, and the prohibited transaction provisions of ERISA and section 4975 of the Code. Under the Plan Asset Regulation, if a Plan invests in a security which is an “equity interest” of an entity that is neither a “publicly-offered security” nor an investment company registered under the Investment Company Act of 1940, the Plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless it is established that the entity is an “operating company” or that equity participation in the entity by Plan investors is not “significant.” Under the Plan Asset Regulation, an “operating company” is an entity that is primarily engaged, directly or through a majority owned subsidiary or subsidiaries, in the production or sale of a product or service other than the investment of capital. The Plan Asset Regulation also provides that equity participation in an entity (such as the Issuer) by Plan investors is “significant” on any date if, immediately after the most recent acquisition of any equity interest in the entity, 25% or more of the value of any class of equity interest in the entity is held by Plan investors, as determined pursuant to the Plan Asset Regulation. If the underlying assets of the Issuer are deemed to be assets constituting plan assets: (i) the assets of the Issuer could be subject to ERISA’s reporting and disclosure requirements; (ii) a fiduciary causing a Plan to make an investment in the equity of the Issuer could be deemed to have improperly delegated its responsibility to manage the assets of the Plan; (iii) various providers of fiduciary or other services to the Issuer, and any other parties with authority or control with respect to the Issuer, could be deemed to be Plan fiduciaries or otherwise a party in interest or disqualified person by virtue of their provision of such services; (iv) certain transactions that the Issuer has entered into or may enter into in the ordinary course of business might constitute non-exempt prohibited transactions under ERISA or Section 4975 of the Code, in which case they would have to be rescinded at a significant cost to the Issuer; (v) the managers might be deemed to be a fiduciary with respect to the assets of the Plan; and (vi) it is not clear that Section 404(b) of ERISA, which generally prohibits plan fiduciaries from maintaining the indicia of ownership of assets of plans subject to Title I of ERISA outside the jurisdiction of the district courts of the United States, would be satisfied in all instances. An “equity interest” is defined under the Plan Asset Regulation as an interest other than an instrument which is treated as indebtedness under the applicable local law and which has no substantial equity features. Although there is little guidance on how this definition applies, the Issuer believes that the Securities (including Receipts) may constitute equity interests in the Issuer for purposes of the Plan Asset Regulation. Representations By acceptance of a Security, or an interest therein (including, without limitations, the Receipts), each acquiror and subsequent transferee will be deemed to have represented and warranted that (1) either (i) it is not itself a Plan, is not acting on behalf of a Plan, and for so long as it holds the Securities (including Receipts) will not itself be a Plan or acting on behalf of a Plan, and no portion of the assets used by such investor to acquire and/or hold the Securities (including Receipts), or an interest therein, constitutes assets of a Plan, or (ii) the acquisition and holding of the Securities (including Receipts), or any 210 interest therein, by such acquiror or transferee, throughout the period that it holds such Securities (including Receipts), or any interest therein, and the disposition of such Securities (including Receipts), or an interest therein,, will not constitute or result in (a) a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, (b) a breach of fiduciary duty under ERISA, or (c) a similar violation under any applicable Similar Laws, and (2) it will notify us immediately if, at any time, it is no longer able to make the representations contained in clause (1) above. Any purported transfer of the Securities (including Receipts), or an interest therein, to a transferee that does not comply with the foregoing requirements without the written consent of the Issuer shall be null and void ab initio.

Each purchaser that is (i) a Plan or (ii) an entity whose underlying assets include the assets of a Plan, will be deemed to have further represented and warranted that the decision to invest “plan assets” (as defined in the Plan Asset Regulation) in the Securities (including Receipts) is consistent with the provisions of ERISA and/or the Code that require diversification of plan assets and impose other fiduciary responsibilities. This offer is not a representation by us or the placement agents that an acquisition of the Securities (including Receipts) meets all legal requirements applicable to investments by Plans, entities whose underlying assets include assets of a Plan, or that such an investment is appropriate for any particular Plan, or entities whose underlying assets include assets of a Plan. THE FOREGOING DISCUSSION IS GENERAL IN NATURE AND IS NOT INTENDED TO BE ALL-INCLUSIVE. DUE TO THE COMPLEXITY OF THESE RULES AND THE PENALTIES THAT MAY BE IMPOSED UPON PERSONS INVOLVED IN NON-EXEMPT PROHIBITED TRANSACTIONS, IT IS PARTICULARLY IMPORTANT THAT FIDUCIARIES OR OTHER PERSONS CONSIDERING ACQUIRING THE SECURITIES (INCLUDING RECEIPTS) ON BEHALF OF, OR WITH THE ASSETS OF ANY PLAN, INCLUDING ANY OLD SECURITIES OR RECEIPTS THAT CONSTITUTE THE ASSETS OF ANY PLAN, CONSULT WITH THEIR COUNSEL PRIOR TO ANY SUCH TRANSACTION REGARDING THE POTENTIAL APPLICABILITY OF ERISA, SECTION 4975 OF THE CODE AND ANY SIMILAR LAWS TO SUCH TRANSACTIONS AND WHETHER AN EXEMPTION WOULD BE APPLICABLE TO THE ACQUISITION AND HOLDING OF THE SECURITIES (INCLUDING RECEIPTS). PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN LEGAL, TAX, FINANCIAL AND OTHER ADVISORS PRIOR TO INVESTING IN THE SECURITIES (INCLUDING RECEIPTS) TO REVIEW THESE IMPLICATIONS IN LIGHT OF SUCH INVESTOR’S PARTICULAR CIRCUMSTANCES.

211

PLAN OF DISTRIBUTION

The Managers set forth in the table below have, pursuant to a Purchase Agreement dated September 17, 2013, severally agreed with the Issuer, subject to the satisfaction of certain conditions, to subscribe for the Securities at 99.183 percent of their principal amount. The respective percentage of the aggregate principal amount of Securities to be purchased by each Manager from the Issuer is set forth opposite its respective name below:

Principal Amount of Securities to be Joint Lead Manager Purchased

Barclays Capital Inc...... $ 54,348,000 Citigroup Global Markets Inc...... $ 54,348,000 Credit Suisse Securities (USA) LLC ...... $ 54,348,000 Goldman, Sachs & Co...... $ 54,348,000 J.P. Morgan Securities LLC ...... $ 54,348,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated ...... $ 54,348,000 Mitsubishi UFJ Securities (USA), Inc...... $ 54,348,000 Mizuho Securities USA Inc...... $ 54,348,000 Morgan Stanley & Co. LLC ...... $ 54,348,000 Co-Manager

Banca IMI S.p.A...... $ 54,348,000 BBVA Securities Inc...... $ 54,348,000 BNP Paribas Securities Corp...... $ 54,348,000 Credit Agricole Securities (USA) Inc...... $ 54,348,000 Deutsche Bank Securities Inc...... $ 54,348,000 HSBC Securities (USA) Inc...... $ 54,348,000 ING Bank N.V...... $ 54,348,000 Mediobanca — Banca di Credito Finanziario S.p.A...... $ 54,348,000 Natixis...... $ 54,348,000 Santander Investment Securities Inc...... $ 54,347,000 SG Americas Securities, LLC ...... $ 54,347,000 The Royal Bank of Scotland plc ...... $ 54,348,000 UBS Securities LLC ...... $ 54,347,000 UniCredit Bank AG...... $ 54,347,000

Total ...... $ 1,250,000,000

The Issuer has agreed to pay to the Managers a commission and to reimburse the Managers for certain of their expenses in connection with the issue of the Securities. The Purchase Agreement entitles the Managers to terminate it in certain circumstances prior to payment in respect of the Securities being made to the Issuer. The Issuer has agreed to indemnify the several Managers against certain liabilities in connection with the offer and sale of the Securities, including liabilities under the Securities Act, and may be required to contribute to payments the Managers may be required to make in respect thereof. The offering of the Securities by the Managers is subject to receipt and acceptance and subject to the Managers’ right to reject any order in whole or in part. Selling and transfer restrictions The Securities and beneficial interests therein (including, without limitation, the Receipts) have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an effective registration statement or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Securities and beneficial interests therein (including, without limitation, the Receipts) are being offered and sold only to QIBs in compliance with Rule 144A.

212

Each purchaser of the Securities offered hereunder (other than each of the Managers) or a beneficial interest therein (including, without limitation, the Receipts) will be deemed to have represented and agreed as follows (terms used in this section that are defined in Rule 144A are used herein as defined therein): (a) it is purchasing the Securities or a beneficial interest therein (including, without limitation, the Receipts) for its own account or an account with respect to which it exercises sole investment discretion, and it and any such account is a QIB, and is aware that the sale to it is being made in reliance on Rule 144A;

(b) it acknowledges that the Securities and beneficial interests therein (including, without limitation, the Receipts) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any jurisdiction and may not be offered or sold except as set forth below; (c) it understands and agrees that it will not offer, sell, resell or otherwise transfer any Securities or any beneficial interests therein (including, without limitation, the Receipts) except (i) to the Issuer and its subsidiaries; (ii) pursuant to a registration statement which has been declared effective under the Securities Act; (iii) for so long as the Securities (or Receipts, as applicable) are eligible for resale pursuant to Rule 144A, to a person it reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the transfer is being made in reliance on Rule 144A; or (iv) pursuant to any other available exemption from the registration requirements of the Securities Act, provided that, in the case of (iv) for so long as the Securities (or Receipts, as applicable) are “restricted securities” within the meaning of the Securities Act, the offer, sale or transfer of such Securities (or Receipts, as applicable) may be made only to QIBs (whether inside or outside the United States) that purchase for their own account or for the account of QIBs; (d) it agrees to, and each subsequent holder is required to, notify any purchaser of the Securities or beneficial interests therein (including, without limitation, the Receipts) from it of the resale restrictions referred to in clause (c) above, if then applicable; (e) either (i) it is not itself a Plan, not acting on behalf of a Plan, and for so long as it holds the Securities (including Receipts) will not itself be a Plan or acting on behalf of a Plan, and no portion of the assets used by such investor to acquire and/or hold the Securities (including Receipts), or an interest therein), constitutes assets of a Plan, or (ii) the acquisition and holding of the Securities (including Receipts), or an interest therein), by such acquiror or transferee, throughout the period that it holds such Securities (including Receipts), or any interest therein), and the disposition of such Securities (including Receipts), or an interest therein, will not constitute or result in (a) a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, (b) a breach of fiduciary duty under ERISA, or (c) a similar violation under any applicable Similar Laws; (f) it understands that the Global Securities and the Global Receipts will bear a legend to the following effect: THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER AND EACH OF THE BENEFICIAL OWNERS OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (“RULE 144A”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS, (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR FOR WHICH IT HAS PURCHASED SECURITIES TO ONLY OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, (A) TO ENEL S.P.A. OR ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, PROVIDED THAT, IN THE CASE OF (D), FOR SO LONG AS THE SECURITY IS A “RESTRICTED SECURITY” (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) THE OFFER, SALE OR TRANSFER OF SUCH SECURITY SHALL BE MADE ONLY TO QUALIFIED INSTITUTIONAL BUYERS (WHETHER RESIDENT INSIDE OR OUTSIDE THE UNITED STATES) PURCHASING FOR THEIR OWN 213

ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS AND IN EACH OF THE FOREGOING CASES TO THE REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE LOCAL LAWS AND REGULATIONS AND FURTHER SUBJECT TO ENEL S.P.A.’S AND THE RECEIPT ISSUER’S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO PARAGRAPH (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. (g) it acknowledges that prior to any proposed transfer of Securities (including, without limitation, Receipts) or beneficial interests therein (in each case other than pursuant to an effective registration statement), the holder of such Securities (including, without limitation, Receipts) or beneficial interests therein may be required to provide certifications and other documentation relating to the manner of such transfer and submit such certifications and other documentation as provided in the Securities, the Receipts, the Deposit Agreement or the Indenture; and (h) it acknowledges that the Issuer, the Managers, the Receipt Issuer and agents of the foregoing and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that if any of the acknowledgments, representations or agreements deemed to have been made by it by virtue of its purchase of Securities or any beneficial interests therein (including, without limitation, the Receipts) is no longer accurate, it shall promptly notify the Issuer, the Managers, the Receipt Issuer and agents of the foregoing. If it is acquiring any Securities or beneficial interests therein (including, without limitation, the Receipts) as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account. For further discussion on the consequences of failure to comply with certain tax certification requirements, see “Book-Entry, Delivery and Form — Mandatory exchange and transfer restrictions in the event of non-compliance with the Tax Certification Procedures.” In addition, an investor that is not, or ceases to be, eligible to receive interest free of Italian substitute tax in respect of the Receipts or does not comply (either directly or through, or because of, any Financial Intermediary through which it holds the Securities) with the Tax Certification Procedures will be permitted to transfer its interest in the Receipts only upon compliance with certain tax procedures. See “Book-Entry, Delivery and Form.” For further discussion of the requirements (including the presentation of transfer certificates) under the Global Securities, the Global Receipts, the Deposit Agreement and the Indenture to effect exchanges or transfer of interests in Global Receipts, see “Book-Entry, Delivery and Form.” No representation can be made as to the availability of the exemption provided by Rule 144A for resale of the Securities and beneficial interests therein (including, without limitation, the Receipts).

Conflicts

In connection with the offering, the Managers may purchase and sell the Securities in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the Managers of a greater number of Securities than they are required to purchase in the offering. Stabilizing transactions consist of certain sales or purchases made for the purpose of preventing or retarding a decline in the market price of the Securities while the offering is in progress. These activities by the Managers, as well as other purchases by the Managers for their own accounts, may stabilize, maintain or otherwise affect the market price of the Securities. As a result, the price of the Securities may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the Managers at any time. These transactions may be effected in the over-the-counter market or otherwise. The Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the Managers and their respective affiliates have provided, and may in the future provide, a variety of these services to the Issuer and to persons and entities with relationships with the Issuer, for which they received or will receive customary fees and expenses. In addition, in the ordinary course of their business activities, the Managers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments

214

(including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer’s affiliates. Certain of Managers or their affiliates that have a lending relationship with the Issuer, some of which may have granted significant financing to the Issuer and its subsidiary companies, routinely hedge their credit exposure to the Issuer consistent with their customary risk management policies. Typically, such Managers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Securities. Any such short positions could adversely affect future trading prices of Securities. The Managers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. For the purpose of this paragraph the term “affiliates” include also parent companies.

General Save as stated herein, no action has been taken in any jurisdiction that would permit an offer to the public of any of the Securities, or possession or distribution of this Offering Circular or any other offering material, in any country or jurisdiction where action for that purpose is required. Each Manager has agreed that it will, to the best of its knowledge, comply with all relevant laws, regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers Securities or Receipts or has in its possession or distributes this Offering Circular or any other offering material and neither the Issuer nor any of the Managers shall have responsibility therefor. The Issuer expects that delivery of the Securities be made against payment therefor on the Issue Date, which will be the fifth business day following the date of pricing of the Securities (such settlement cycle being referred to herein as ‘‘T+5”). Under Rule 15c6-1 of the U.S. Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Securities on the date of pricing or the two successive business days will be required, by virtue of the fact that the Securities initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the Securities who wish to make such trades should consult their own advisors.

215

GENERAL INFORMATION

Authorization The offering of the Securities has been duly authorized by resolution of the board of directors of Enel dated May 7, 2013. Manager responsible for financial reporting The manager of the Issuer responsible for financial reporting, Luigi Ferraris, declares, pursuant to paragraph 2 of Article 154- bis of the Consolidated Law on Financial Intermediation (Legislative Decree No. 58 of February 24, 1998), that the accounting information contained in this Offering Circular corresponds to the relevant documents, results, books and accounting records.

Listing of the Securities on the Irish Stock Exchange

This Offering Circular has been approved by the Central Bank, as competent authority under the Prospectus Directive, as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. The Central Bank only approves this Offering Circular as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to Securities which are to be admitted to trading on the regulated market of the Irish Stock Exchange or other regulated markets for the purposes of Directive 2004/39/EC or which are to be offered to the public in any member state of the European Economic Area. Application has been made to the Irish Stock Exchange for the Securities to be admitted to the Official List and trading on its regulated market.

Expenses related to admission to trading The total expenses in relation to the admission to trading of the Securities, the Issuer’s €1,250,000,000 Capital Securities due 2074 and the Issuer’s £400,000,000 Capital Securities due 2075 are estimated by the Issuer at €14,000. Clearing systems The X Securities will be held at Monte Titoli and may be held by any Second-level Bank. For the X Securities, the ISIN is IT0004961816. The N Securities will be held at Monte Titoli only by the Receipt Issuer. For the N Securities, the ISIN is IT0004961816. The Receipts are eligible for clearance through DTC. For the X Receipts, the CUSIP is 29265W AA6 and the ISIN is US29265WAA62. For the N Receipts, the CUSIP is 29265W AB4 and the ISIN is US29265WAB46. The address of Monte Titoli is Piazza degli Affari 6, 20123 Milan, Italy. The address of DTC is 55 Water Street, New York, NY 10041-0099. No significant or material adverse changes Except as set out in this Offering Circular, there has been no material adverse change in the financial position or prospects of the Issuer or the Group since December 31, 2012. There has been no significant change in the financial or trading position of the Issuer or the Group since June 30, 2013. Litigation Except as set out in this Offering Circular, none of the Issuer nor any of its subsidiaries is or has been involved in any governmental, legal or arbitration proceedings, including any such proceedings which are pending or threatened of which the Issuer or any of its subsidiaries is aware, in the 12 months preceding the date of this Offering Circular that in such period had or may in the future have a significant effect on the financial position or profitability of the Issuer or the Group.

Independent auditors The auditors of Enel are Reconta Ernst & Young S.p.A., whose registered office is at Via Po, 32, 00198, Rome, Italy. Reconta Ernst & Young S.p.A. is an accounting firm registered with CONSOB (the Italian Stockmarket regulator). Reconta Ernst & Young S.p.A. has audited Enel’s consolidated financial statements as of December 31, 2011 and 2012 and for the years then ended, in accordance with auditing standards recommended by CONSOB, as stated in their reports included in this Offering Circular. Ernst & Young’s current appointment will expire with the approval of Enel’s annual financial statements as of December 31, 2019 by the general meeting of shareholders. 216

The previous auditors of Enel were KPMG S.p.A., whose registered office is Via Ettore Petrolini 2, 00197 Roma, Italy, a member of KPMG International, a Swiss cooperative. KPMG S.p.A. is an accounting firm registered with CONSOB (the Italian Stockmarket regulator). The 2010 Audited Consolidated Financial Statements included in this Offering Circular, have been audited by KPMG S.p.A., as stated in their report included in this Offering Circular, which includes an explanatory paragraph stating that the consolidated financial statements present the prior year corresponding figures and the statement of financial position as at January 1, 2009 for comparative purposes, and that, as disclosed in the notes, the parent’s directors restated some of the corresponding figures included in the prior year consolidated financial statements and statement of financial position as at January 1, 2009 (summarized from the original). Certain items of the consolidated balance sheet of Enel as of December 31, 2010 have been restated in the 2011 Audited Consolidated Financial Statements for the effects of the completion of a purchase price allocation as described in Note 4 to the 2011 Audited Consolidated Financial Statements. In addition, certain items of the consolidated balance sheet of Enel as of December 31, 2010 have been restated as of January 1, 2011 in the 2011 Audited Consolidated Financial Statements to retrospectively apply the change in accounting for White Certificates as described in Note 4 to the 2012 Audited Consolidated Financial Statements. KPMG S.p.A. audited the 2010 Audited Consolidated Financial Statements before the effects of these retrospective adjustments, and Reconta Ernst & Young S.p.A. audited these retrospective adjustments. The 2010 Audited Consolidated Financial Statements have been included in this Offering Circular upon the reports of (1) KPMG S.p.A., solely with respect to the financial statements before the effects of these retrospective adjustments, and (2) Reconta Ernst & Young S.p.A., solely with respect to these retrospective adjustments. The auditors of Enel are independent accountants in respect to Enel. Documents available So long as Securities are outstanding, copies of the following documents will, when published, be available for inspection in hard copy, without charge, from the registered office of the Issuer and from the specified office of the Paying Agent for the time being in London: (i) the articles of association/by-laws (with an English translation thereof) of the Issuer; (ii) the Indenture, the Deposit Agreement, the forms of the Global Securities and the Securities in definitive form; (iii) the Unaudited Condensed Interim Consolidated Financial Statements and the Audited Consolidated Financial Statements; and

(iv) the most recently published unaudited interim financial statements and audited annual financial statements, if any, of the Issuer (with an English translation thereof), in each case, together with any audit or review reports prepared in connection therewith. The Issuer currently prepares unaudited consolidated interim accounts on a quarterly basis. Additionally, so long as Securities are outstanding, a copy of this Offering Circular will be available for collection, without charge, from the registered office of the Issuer and from the specified office of the Paying Agent for the time being in London. Post-issuance information The Issuer does not intend to provide any post-issuance information in relation to the Securities. Managers transacting with the Issuer Certain of the Managers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform services to the Issuer and its affiliates in the ordinary course of business. See “Plan of Distribution — Conflicts”. Yield The yield on the Securities from (and including) the Issue Date to (but excluding) the First Reset Date will be 8.875 percent per annum. The yield is calculated at the Issue Date on the basis of the issue price. It is not an indication of future yield. Foreign languages used in this Offering Circular The language of this Offering Circular is English. Certain legislative references and technical terms have been cited in their original language so that the correct technical meaning may be ascribed to them under applicable law. Any foreign language text that is included with or within this document has been included for convenience purposes only and does not form part of the Offering Circular.

217

LEGAL MATTERS

Proskauer Rose LLP has advised Enel on certain U.S. legal matters relating to the Securities. Chiomenti Studio Legale has advised Enel on certain Italian legal matters relating to the Securities. Gianni, Origoni, Grippo, Capelli & Partners has advised Enel on certain Italian tax law matters relating to the Securities. Linklaters LLP and Linklaters Studio Legale Associato have advised the Managers on certain U.S and Italian legal matters relating to the Securities. Clifford Chance has advised the Managers on certain Italian tax law matters relating to the Securities.

218

INDEX TO FINANCIAL STATEMENTS

Pages Consolidated financial statements as of and for the year ended December 31, 2012 IndependentAuditors’Report ...... F-3 ConsolidatedIncomeStatement ...... F-6 StatementofConsolidatedComprehensiveIncome ...... F-7 ConsolidatedBalanceSheet...... F-8 StatementofChangesinConsolidatedShareholders’Equity ...... F-10 ConsolidatedStatementofCashFlows ...... F-11 NotestotheFinancialStatements...... F-13 Consolidated financial statements as of and for the year ended December 31, 2011 IndependentAuditors’Report ...... F-123 ConsolidatedIncomeStatement ...... F-126 StatementofConsolidatedComprehensiveIncome ...... F-127 ConsolidatedBalanceSheet...... F-128 StatementofChangesinConsolidatedShareholders’Equity ...... F-130 ConsolidatedStatementofCashFlows ...... F-131 NotestotheFinancialStatements...... F-132 Consolidated financial statements as of and for the year ended December 31, 2010 IndependentAuditors’Report ...... F-244 ConsolidatedIncomeStatement ...... F-246 StatementofConsolidatedComprehensiveIncome ...... F-247 ConsolidatedBalanceSheet...... F-248 StatementofChangesinConsolidatedShareholders’Equity ...... F-250 ConsolidatedStatementofCashFlows ...... F-251 NotestotheFinancialStatements...... F-252 Unaudited consolidated financial statements as of and for the six months ended June 30, 2013 IndependentAuditors’Report ...... F-356 ConsolidatedIncomeStatement ...... F-359 StatementofConsolidatedComprehensiveIncome ...... F-360 ConsolidatedBalanceSheet...... F-361 StatementofChangesinConsolidatedShareholders’Equity ...... F-363 ConsolidatedStatementofCashFlows ...... F-364 NotestotheFinancialStatements...... F-365 Unaudited consolidated financial statements as of and for the six months ended June 30, 2012 IndependentAuditors’Report ...... F-406 ConsolidatedIncomeStatement ...... F-408 StatementofConsolidatedComprehensiveIncome ...... F-409 ConsolidatedBalanceSheet...... F-410 StatementofChangesinConsolidatedShareholders’Equity ...... F-412 ConsolidatedStatementofCashFlows ...... F-413 ExplanatoryNotes ...... F-414

F-1 CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2012

F-2 Enel S.p.A. Consolidated Financial Statements as of December 31, 2012

Independent auditors’ report pursuant to art. 14 and 16 of Legislative Decree n. 39 dated January 27, 2010 (Translation from the original Italian text)

F-3 Reconta Ernst & Young S.p.A. Via Po, 32 00198 Roma Tel. (+39) 06 324751 Fax (+39) 06 32475504 www.ey.com

Independent auditors’ report pursuant to art. 14 and 16 of Legislative Decree n. 39 dated January 27, 2010 (Translation from the original Italian text)

To the Shareholders of Enel S.p.A. 1. We have audited the consolidated financial statements of Enel S.p.A. and its subsidiaries, (“Enel Group”) as of December 31, 2012 and for the year then ended, comprising the income statement, the statement of comprehensive income, the balance sheet, the statement of changes in shareholders’ equity, the statement of cash flows and the related notes to the financial statements. The preparation or these financial statements in compliance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005 is the responsibility of Enel S.p.A.’s directors. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards recommended by CONSOB (the Italian Stock Exchange Regulatory Agency). In accordance with such standards, we planned and performed our audit to obtain the information necessary to determine whether the consolidated financial statements are materially misstated and if such financial statements, taken as a whole, may be relied upon. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, as well as assessing the appropriateness of the accounting principles applied and the reasonableness of the estimates made by directors. We believe that our audit provides a reasonable basis for our opinion. The consolidated financial statements of the prior year and the balance sheet as of January 1, 2011 are presented for comparative purposes. As described in the notes to the financial statements, the directors have restated certain comparative data related to the prior year and to the balance sheet as of January 1, 2011, which is derived from the consolidated financial statements as of December 31, 2010, with respect to the data previously presented and audited respectively by us and other auditors, on which related auditors’ reports were issues on April 6, 2012 and on April 6, 2011. We have examined the method used to restate the comparative financial data and the information presented in the notes to the financial statements in this respect, for the purpose of expressing our opinion on the consolidated financial statements as of December 31, 2012 and for the year then ended. 3. In our opinion, the consolidated financial statements of the Enel Group as of December 31, 2012 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005; accordingly, they present clearly and give a true and fair view of the financial position, the results of operations and the cash flows of the Enel Group for the year then ended.

F-4 4. The directors of Enel S.p.A. are responsible for the preparation of the report on operations(1) and the report on corporate governance and ownership structure(2) in accordance with the applicable laws and regulations. Our responsibility is to express an opinion on the consistency with the financial statements of the report on operations and of the information presented in compliance with art. 123-bis of Legislative Decree n. 58/1998, paragraph 1, letters c), d), f), l), m) and paragraph 2, letter b) in the report on corporate governance and ownership structure, as required by law. For this purpose, we have performed the procedures required under Auditing Standard 001 issued by the Italian Accounting Profession (CNDCEC) and recommended by CONSOB. In our opinion, the report on operations and the information presented in compliance with art. 123-bis of Legislative Decree n. 58/1998, paragraph 1, letters c), d), f), l), m) and paragraph 2), letter b) in the report on corporate governance and ownership structure, are consistent with the consolidated financial statements of the Enel Group as of December 31, 2012.

Rome, April 4, 2013

Reconta Ernst & Young S.p.A. Signed by: Massimo delli Paoli, Partner

This report has been translated into the English language solely for the convenience of international readers.

(1) The report on operations is not included in this Offering Circular. (2) The report on corporate governance and ownership structure is not included in this Offering Circular.

Reconta Ernst & Young S.p.A. Sede Legale: 00198 Roma - Via Po, 32 Capitale Sociale € 1,402,500,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la CC.I.A.A. di Roma Codice fiscale e numero di iscrizione 00434000584 P.I. 00891231003 Iscritta all’Albo Revisori Contabili al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/2/1998 Iscritta all’Albo Speciale delle società di revision Consob al progressivo n. 2 delibera n. 10831 del 16/7/1997

A member firm of Ernst & Young Global Limited

F-5 Consolidated Income Statement Notes 2012 2011 restated(1) of which of which with with related related parties parties Millions of euro Revenues Revenuesfromsalesandservices...... 8.a 82,699 7,217 77,573 7,455 Otherrevenuesandincome...... 8.b 2,190 46 1,941 208 [Subtotal] ...... 84,889 79,514 Costs Rawmaterialsandconsumables ...... 9.a 46,130 9,971 42,901 9,970 Services ...... 9.b 15,738 2,298 14,440 2,287 Personnel ...... 9.c 4,860 4,296 Depreciation, amortization and impairment losses ..... 9.d 9,003 6.327 Otheroperatingexpenses ...... 9.e 3,208 39 2,255 26 Capitalizedcosts...... 9.f (1,747) (1,711) [Subtotal] ...... 77,192 68,508 Net income/(charges) from commodity risk management ...... 10 38 82 272 77 Operating income ...... 7,735 11,278 Financialincome...... 11 2,272 13 2,693 29 Financialexpense...... 11 5.275 5,717 7 Share of income/(expense) from equity investments accounted for using the equity method ...... 12 88 96 Income before taxes ...... 4,820 8,350 Incometaxes ...... 13 2,745 3,027 Net income from continuing operations ...... 2,075 5,323 Net income from discontinued operations ...... —— Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 2,075 5,323 Attributable to shareholders of the Parent Company .... 865 4,113 Attributable to non-controlling interests ...... 1,210 1,210 Earnings per share (euro) attributable to the ordinary shareholders of the Parent Company ...... 14 0.09 0.44 Diluted earnings per share (euro) attributable to the ordinary shareholders of the Parent Company ...... 14 0.09 0.44 Earnings from continuing operations per share (euro) attributable to the ordinary shareholders of the Parent Company ...... 14 0.09 0.44 Diluted earnings from continuing operations per share (euro) attributable to the ordinary shareholders of the Parent Company ...... 14 0.09 0.44

(1) The income statement for 2011 has been restated to provide a better presentation of the impact recognized in the previous year of the change of the accounting policy used for white certificates. For more information, please see note 4 below.

F-6 Statement of Consolidated Comprehensive Income 2011 Notes 2012 restated(1) Millions of euro Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 2,075 5,323 Other comprehensive income: — Effective portion of change in the fair value of cash flow hedges ...... (760) (161) — Share of income recognized in equity by companies accounted for usingtheequitymethod...... (7) (9) —Changeinthefairvalueoffinancialinvestmentsavailableforsale.... (416) (61) — Exchange rate differences ...... 73 (731) Income/(Loss) recognized directly in equity ...... 28 (1,110) (962) Comprehensive income for the period ...... 965 4,361 Attributable to: —shareholdersoftheParentCompany ...... (374) 3,639 — non-controlling interests ...... 1,339 722

(1) The statement of consolidated comprehensive income for 2011 has been restated to provide a better presentation of the impact recognized in the previous year of the change of the accounting policy used for white certificates. For more information, please see note 4 below.

F-7 Consolidated Balance Sheet at Dec. 31, 2011 at Jan. 1, 2011 Notes at Dec. 31, 2012 restated(1) restated(1) of which of which of which with related with related with related parties parties parties Millions of euro ASSETS Non-current assets Property, plant and equipment...... 15 83,115 80,592 78,094 Investmentproperty ...... 197 245 299 Intangible assets ...... 16 35,970 39,049 39,535 Deferred tax assets ...... 17 6,305 6,116 6,069 Equity investments accounted for using the equity method...... 18 1,115 1,085 1,033 Non-current financial assets ...... 19 5,518 74 6,325 4,701 Other non-current assets ..... 20 897 55 512 1,078 [Total] ...... 133,117 133,924 130,809 Current assets Inventories ...... 21 3,338 3,148 2,803 Trade receivables ...... 22 11,719 893 11,570 1,473 12,505 1,065 Tax receivables ...... 23 1,631 1,251 1,587 Current financial assets ...... 24 9,381 39 10,466 1 11,922 69 Other current assets ...... 25 2,262 46 2,136 71 2,176 79 Cash and cash equivalents .... 26 9,891 7,015 5,164 [Total] ...... 38,222 35,586 36,157 Assets held for sale ...... 27 317 381 1,618 TOTAL ASSETS ...... 171,656 169,891 168,584

F-8 at Dec. 31, 2011 at Jan. 1, 2011 Notes at Dec. 31, 2012 restated(1) restated(1) of which of which of which with related with related with related parties parties parties Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 9,403 9,403 9,403 Other reserves ...... 9,109 10,348 10,791 Retained earnings (loss carried forward)(2) ...... 18,259 18,899 17,690 [Total] ...... 36,771 38,650 37,884 Non-controlling interests ... 16,387 15,650 15,877 Total shareholders’ equity ...... 28 53,158 54,300 53,761 Non-current liabilities Long-termloans ...... 26 55,959 48,703 52,440 Post-employment and other employee benefits ...... 29 3,063 3,000 3,069 Provisions for risks and charges ...... 30 8,648 8,057 9,153 Deferred tax liabilities ...... 17 11,753 11,505 11,336 Non-current financial liabilities ...... 31 2,553 2,307 2,591 Other non-current liabilities ...... 32 1,151 2 1,313 1,244 [Total] ...... 83,127 74,885 79,833 Current liabilities Short-term loans ...... 26 3,970 4,799 8,209 Current portion of long-term loans...... 26 4,057 9,672 2,999 Tradepayables...... 33 13,903 3,496 12,931 3,304 12,373 2,777 Incometaxpayable...... 364 671 687 Current financial liabilities . . . 34 3,138 1 3,668 2 1,672 Other current liabilities ...... 35 9,931 39 8,907 15 8,052 13 [Total] ...... 35,363 40,648 33,992 Liabilities held for sale ..... 27 8 58 998 Total liabilities ...... 118,498 115,591 114,823 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 171,656 169,891 168,584

(1) The consolidated balance sheet for 2011 has been restated to provide a better presentation of the impact recognized in the previous year of the change of the accounting policy used for white certificates. For more information, please see note 4 below. (2) Retained earnings (loss carried forward) at December 31, 2011 restated are reported net of the interim dividend (€940 million).

F-9 Statement of Changes in Consolidated Shareholders’ Equity

Share capital and reserves attributable to the shareholders of the Parent Company

Reserve Reserve from from Reserve translation disposal from Equity of financial of equity attributable statements Reserve equity Reserve investments to the in from interests from accounted shareholders Share currencies measurement without transactions in for using Other of the Total Share premium Legal Other other than of financial loss of non-controlling the equity retained Parent Non-controlling shareholders’ capital reserve reserve reserves euro instruments control interests method earnings Company interests equity at January 1, 2011 ...... 9,403 5,292 1,881 2,262 456 80 796 — 24 17,795 37,989 15,877 53,866 Effect of change in accounting policy for whitecertificates ...... — — — — — — — — — (105) (105) — (105) at January 1, 2011 restated ...... 9,403 5,292 1,881 2,262 456 80 796 — 24 17,690 37,884 15,877 53,761 Dividends and interim dividends ...... — — — — — — — — — (2,635) (2,635) (719) (3,354) Change in scope of consolidation...... — — — — — — — — — (269) (269) (237) (506) F-10 Disposal of equity interests without loss of control ...... — — — — — — (47) — — — (47) — (47) Transactions in non- controlling interests .... — — — — — — — 78 — — 78 7 85 Comprehensive income for theyear...... — — — — (336) (129) — — (9) 4,113 3,639 722 4,361 of which: – Income/(Loss) recognized directly in equity ...... — — — — (336) (129) ——(9) — (474) (488) (962) – Net income/(loss) for the year ...... 4,113 4,113 1,210 5,323 at December 31, 2011 restated ...... 9,403 5,292 1,881 2,262 120 (49) 749 78 15 18,899 38,650 15,650 54,300 Dividends and interim dividends ...... — — — — — — — — — (1,505) (1,505) (628) (2,133) Change in scope of consolidation...... — — — — — — — — — — —2626 Comprehensive income for theyear...... — — — — (28) (1,204) — — (7) 865 (374) 1,339 965 of which: – Income/(Loss) recognized directly in equity ...... — — — — (28) (1,204) ——(7) — (1,239) 129 (1,110) – Net income/(loss) for the year ...... — — — — —————865 865 1,210 2,075 at December 31, 2012 .... 9,403 5,292 1,881 2,262 92 (1,253) 749 78 8 18,259 36,771 16,387 53,158 Consolidated Statement of Cash Flows

Notes 2012 2011 restated(1) of which of which with with related related parties parties Millions of euro Income before taxes for the year ...... 4,820 8,350 Adjustments for: Amortization and impairment losses of intangible assets ...... 3,516 1,102 Depreciation and impairment losses of property, plant andequipment...... 4,899 4,730 Exchange rate adjustments of foreign currency assets and liabilities (including cash and cash equivalents)...... (66) 417 Accrualstoprovisions...... 1,540 486 Financial(income)/expense...... 2,404 2,219 (Gains)/Losses from disposals and other non-monetary items...... 514 (73) Cash flow from operating activities before changes in net current assets ...... 17,627 17,231 Increase/(Decrease) in provisions ...... (1,517) (1,749) (Increase)/Decrease in inventories ...... (190) (334) (Increase)/Decrease in trade receivables ...... (825) 580 335 (408) (Increase)/Decrease in financial and non-financial assets/liabilities ...... 1 (117) 560 80 Increase/(Decrease) in trade payables ...... 978 (192) 567 527 Interestincomeandotherfinancialincomecollected... 1,168 13 1,371 29 Interestexpenseandotherfinancialexpensepaid ..... (3,898) (3,897) (7) Incometaxespaid...... (2,929) (2,371) Cash flows from operating activities (a) ...... 10,415 11,713 Investmentsinproperty,plantandequipment...... (6,522) (6,957) Investments in intangible assets ...... (627) (632) Investments in entities (or business units) less cash and cash equivalents acquired ...... (182) (153) Disposals of entities (or business units) less cash and cash equivalents sold ...... 388 165 (Increase)/Decrease in other investing activities ...... 355 177 Cash flows from investing/disinvesting activities (b) ...... (6,588) (7,400) Financialdebt(newlong-termborrowing)...... 26 13,739 10,486 Financialdebt(repaymentsandothernetchanges) .... (12,505) (9,427) Collection (net of incidental expenses) of proceeds from disposal of equity interests without loss of control ...... — (51) Dividendsandinterimdividendspaid ...... (2,229) (3,517) Cash flows from financing activities (c) ...... (995) (2,509) Impact of exchange rate fluctuations on cash and cash equivalents (d) ...... 29 (74) Increase/(Decrease) in cash and cash equivalents (a+b+c+d) ...... 2,861 1,730 Cash and cash equivalents at the beginning of the year(2) ...... 7,072 5,342 Cash and cash equivalents at the end of the year(3) ..... 9,933 7,072

F-11 (1) The consolidated statement of cash flows for 2011 has been restated to provide a better presentation of the impact recognized in the previous year of the change of the accounting policy used for white certificates. For more information, please see note 4 below. (2) Of which cash and cash equivalents equal to €7,015 million at January 1, 2012 (€5,164 million at January 1, 2011), short- term securities equal to €52 million at January 1, 2012 (€95 million at January 1, 2011) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €5 million at January 1, 2012 (€83 million at January 1, 2011). (3) Of which cash and cash equivalents equal to €9,891 million at December 31, 2012 (€7,015 million at December 31, 2011), short-term securities equal to €42 million at December 31, 2012 (€52 million at December 31, 2011) and cash and cash equivalents pertaining to “Assets held for sale” in the amount of €0 million at December 31, 2012 (€5 million at December 31, 2011).

F-12 Notes to the financial statements 1. Form and content of the financial statements Enel SpA, which operates in the energy utility sector, has its registered office in Viale Regina Margherita 137, Rome, Italy. The consolidated financial statements for the period ended December 31, 2012 comprises the financial statements of the Company, its subsidiaries and joint ventures (“the Group”) and the Group’s holdings in associated companies. A list of the subsidiaries, associated companies and joint ventures included in the scope of consolidation is reported in the annex. These financial statements were approved for publication by the Board on March 12, 2013.

Compliance with IFRS/IAS The consolidated financial statements for the year ended December 31, 2012 have been prepared in accordance with international accounting standards (International Accounting Standards — IAS and International Financial Reporting Standards — IFRS) issued by the International Accounting Standards Board (IASB), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC), recognized in the European Union pursuant to Regulation (EC) no. 1606/2002 and in effect as of the close of the year. All of these standards and interpretations are hereinafter referred to as the “IFRS-EU”. The financial statements have also been prepared in conformity with measures issued in implementation of Article 9, paragraph 3, of Legislative Decree 38 of February 28, 2005.

Basis of presentation The consolidated financial statements consist of the consolidated income statement, the statement of consolidated comprehensive income, the consolidated balance sheet, the statement of changes in consolidated shareholders’ equity and the consolidated statement of cash flows and the related notes. The assets and liabilities reported in the consolidated balance sheet are classified on a “current/non- current basis”, with separate reporting of assets held for sale and liabilities associated with assets held for sale. Current assets, which include cash and cash equivalents, are assets that are intended to be realized, sold or consumed during the normal operating cycle of the Company or in the twelve months following the balance-sheet date; current liabilities are liabilities that are expected to be settled during the normal operating cycle of the Company or within the twelve months following the close of the financial year. The consolidated income statement is classified on the basis of the nature of costs, while the indirect method is used for the consolidated statement of cash flows. The consolidated financial statements are presented in euro, the functional currency of the Parent Company Enel SpA. All figures are shown in millions of euro unless stated otherwise. The financial statements are prepared on a going-concern basis using the cost method, with the exception of items that are measured at fair value under IFRS-EU, as specified in the measurement policies for the individual items. The consolidated income statement, the consolidated balance sheet and the consolidated statement of cash flows report transactions with related parties, the definition of which is given in the next section.

2. Accounting policies and measurement criteria Use of estimates and management judgment Preparing the consolidated financial statements under IFRS-EU requires management to take decisions and make estimates and assumptions that may impact the value of revenues, costs, assets

F-13 and liabilities and the related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable in the circumstances. They are formulated when the carrying amount of assets and liabilities is not easily determined from other sources. The actual results may therefore differ from these estimates. The estimates and assumptions are periodically revised and the effects of any changes are reflected through profit or loss if they only involve that period. If the revision involves both the current and future periods, the change is recognized in the period in which the revision is made and in the related future periods. In order to enhance understanding of the financial statements, the following sections examine the main items affected by the use of estimates and the cases that reflect management judgments to a significant degree, underscoring the main assumptions used by managers in measuring these items in compliance with the IFRS-EU. The critical element of such valuations is the use of assumptions and professional judgments concerning issues that are by their very nature uncertain. Changes in the conditions underlying the assumptions and judgments could have a substantial impact on future results.

Use of estimates Revenue recognition Revenues from sales to customers are recognized on an accruals basis. Revenues from sales of electricity and gas to retail customers are recognized at the time the electricity or gas is supplied and include, in addition to amounts invoiced on the basis of periodic (and pertaining to the year) meter readings, an estimate of the value of electricity and gas distributed during the period but not yet invoiced, which is equal to the difference between the amount of electricity and gas delivered to the distribution network and that invoiced in the period, taking account of any network losses. Revenues between the date of the last meter reading and the end of the year are based on estimates of the daily consumption of individual customers calculated on the basis of their consumption record, adjusted to take account of weather conditions and other factors that may affect estimated consumption.

Pensions and other post-employment benefits Some of the Group’s employees participate in pension plans offering benefits based on their wage history and years of service. Certain employees are also eligible for other post-employment benefit schemes. The expenses and liabilities of such plans are calculated on the basis of estimates carried out by consulting actuaries, who use a combination of statistical and actuarial elements in their calculations, including statistical data on past years and forecasts of future costs. Other components of the estimation that are considered include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of wage increases, the inflation rate and trends in the cost of medical care. These estimates can differ significantly from actual developments owing to changes in economic and market conditions, increases or decreases in withdrawal rates and the lifespan of participants, as well as changes in the effective cost of medical care. Such differences can have a substantial impact on the quantification of pension costs and other related expenses.

F-14 reviewed at least annually. Such assessments of the recoverable amount of assets are carried out in accordance with the provisions of IAS 36, as described in greater detail in note 16 below. In the case of assets held for sale, the assessment is not based on a determination of the value in use of the assets but rather on the amount deemed recoverable through disposal, taking due account of offers already received from parties interested in acquiring the assets. Where the value of a group of non-current assets is considered to be impaired, it is written down to its recoverable value, as estimated on the basis of the use of the assets and their future disposal, in accordance with the company’s most recent plans. The estimates of such recoverable values are considered reasonable. Nevertheless, possible changes in the estimation factors on which the calculation of such values is performed could generate different recoverable values. The analysis of each group of non-current assets is unique and requires management to use estimates and assumptions considered prudent and reasonable in the specific circumstances.

Depreciable value of certain elements of Italian hydroelectric plants following enactment of Law 134/2012 Law 134/2012 containing “urgent measures for growth”, published in the Gazzetta Ufficiale on August 11, 2012, introduced a sweeping overhaul of the rules governing Italian hydroelectric concessions. Among its various provisions, the law establishes that five years before the expiration of a major hydroelectric water diversion concession and in cases of lapse, relinquishment or revocation, where there is no predominant public interest in using the waters for another purpose that is incompatible with continuing use for hydroelectric purpose, the competent public entity shall organize a public call for tender for the award for consideration of the concession for a period ranging from 20 to a maximum of 30 years. In order to ensure operational continuity, the law also established procedures for the transfer from the departing concession holder to the new concession holder of ownership of the business unit necessary to operate the concession, including all legal relationships associated with the concession, against payment of a price to be determined in negotiations between the departing concession holder and the grantor agency, taking due account of the following elements: Š for intake and governing works, penstocks and outflow channels, which under the consolidated law governing waters and electrical plants are to be relinquished free of charge (Article 25 of Royal Decree 1775/1933), the payment shall be determined on the basis of revalued cost less public capital grants (also revalued) received by the concession holder for the construction of such works, as reduced for ordinary wear and tear; Š for other property, plant and equipment, the payment shall be determined on the basis of market value, meaning replacement value, as reduced for ordinary wear and tear. While acknowledging that the new regulations introduce major changes in the transfer of ownership of the business unit for the operation of hydroelectric concessions, the difficulties associated with the practical application of these principles are clear, given the uncertainties that do not permit the formulation of a reliable estimate of the value that can be recovered at the end of existing concessions (residual value). The main uncertainties are the following: Š the price for the transfer of the business unit must be negotiated with the grantor agency five years prior to the expiration of the concession, on the basis of currently unavailable technical and financial parameters that will be announced in a decree of the Ministry for Economic Development acting on an opinion of the Authority for Electricity and Gas;

F-15 Š it is reasonable to expect that the process of quantifying that value will require assessments involving significant uncertainties, especially as regards the determination of the ordinary wear and tear of the assets under discussion and the positions that the parties involved could take; Š the law itself, which acknowledges the existence of objective uncertainties associated with the determination of the price, establishes that in the event of disagreement between the concession holder and the grantor, the issue shall be resolved through recourse to a panel of three independent and qualified third parties; Š at present no historic data are available as the rules have not yet been applied. In view of the above uncertainties, management has concluded that it cannot formulate a reasonable and reliable estimate of residual value. This change in legislation, whose application still requires the new concession holder to make a payment to the departing concession holder, prompted management to review the depreciation period for assets classified as to be relinquished free of charge prior to the enactment of Law 134/2012 (until last year, in view of the fact that they were to be relinquished free of charge, they were depreciated over the shorter of the term of the concession and the useful life of each asset), no longer basing it on the term of the concession but, if longer, on the economic and technical life of the individual asset. If further information should become available that would enable a reliable estimate of residual value, the carrying amounts of the assets involved will be modified on a prospective basis.

Recovery of deferred tax assets At December 31, 2012, the financial statements report deferred tax assets in respect of tax losses to be reversed in subsequent years and income components whose deductibility is deferred in an amount whose recovery is considered by management to be highly probable. The recoverability of such assets is subject to the achievement of future profits sufficient to absorb such tax losses and to use the benefits of the other deferred tax assets. The assessment of recoverability takes account of the estimate of future taxable incomes and is based on prudent tax planning strategies. However, where the Company should become aware that it is unable to recover all or part of recognized tax assets in future years, the consequent adjustment would be taken to the income statement in the year in which this circumstance arises.

Litigation The Enel Group is involved in various legal disputes regarding the generation, transport and distribution of electricity. In view of the nature of such litigation, it is not always objectively possible to predict the outcome of such disputes, which in some cases could be unfavorable. Provisions have been recognized to cover all significant liabilities for cases in which legal counsel feels an adverse outcome is likely and a reasonable estimate of the amount of the loss can be made.

Provision for doubtful accounts The provision for doubtful accounts reflects estimates of losses on the Group’s receivables portfolio. Provisions have been made against expected losses calculated on the basis of historical experience with receivables with similar credit risk profiles, current and historical arrears, eliminations and collections, as well as the careful monitoring of the quality of the receivables portfolio and current and forecast conditions in the economy and the relevant markets. The estimates and assumptions are reviewed periodically and the effects of any changes are taken to the income statement in the year they accrue.

F-16 Decommissioning and site restoration In calculating liabilities in respect of decommissioning and site restoration costs, especially for the decommissioning of nuclear power plants and the storage of waste fuel and other radioactive materials, the estimation of future costs is a critical process in view of the fact that such costs will be incurred over a very long period of time, estimated at up to 100 years. The obligation, based on financial and engineering assumptions, is calculated by discounting the expected future cash flows that the Company considers it will have to pay for the decommissioning operation. The discount rate used to determine the present value of the liability is the pre-tax risk-free rate and is based on the economic parameters of the country in which the plant is located. That liability is quantified by management on the basis of the technology existing at the measurement date and is reviewed each year, taking account of developments in decommissioning and site restoration technology, as well as the ongoing evolution of the legislative framework concerning the protection of health and the environment. Subsequently, the value of the obligation is adjusted to reflect the passage of time and any changes in estimates.

Management judgments Identification of cash generating units (CGUs) In application of IAS 36 “Impairment of assets”, the goodwill recognized in the consolidated financial statements of the Group as a result of business combinations has been allocated to individual or groups of CGUs that will benefit from the combination. A CGU is the smallest group of assets that generates largely independent cash inflows. In identifying such CGUs, management took account of the specific nature of its assets and the business in which it is involved (geographical area, business area, regulatory framework, etc.), verifying that the cash flows of a given group of assets were closely interdependent and largely independent of those associated with other assets (or groups of assets). The assets of each CGU were also identified on the basis of the manner in which management manages and monitors those assets within the business model adopted. In particular, the CGUs identified in the Iberia and Latin America Division are represented by groups of electricity/gas production, distribution and sales assets in the Iberian peninsula and certain countries in Latin America that are managed on a unified basis by the Group given the close interdependence of the related cash flows, also in view of the geographical, cultural and social similarities of the countries and markets in which they operate, and technical, regulatory operational performance aspects. The CGUs identified in the Generation and Energy Management Division and the Sales Division are represented by assets resulting from business combinations involving gas regasification operations in Italy and the domestic retail gas market or by uniform groups of assets operating in the sale or generation of electricity. The CGUs identified in the Renewable Energy Division are represented (with a number of minor exceptions made in Italy and Spain to reflect the Group organizational model) by the group of assets exclusively associated with the generation of electricity from renewable energy resources located in geographical areas considered uniform on the

F-17 basis of regulatory and contractual aspects and characterized by a high degree of interdependence of business processes and substantial integration in the same geographical area. The CGUs identified in the International Division are represented by electricity generation and distribution/sales assets identified with business combinations and which constitute, by geographical area and business, individual units generating independent cash flows. The CGUs identified by management to which the goodwill recognized in these consolidated financial statements has been allocated are indicated in the section on intangible assets, to which the reader is invited to refer. The number and scope of the CGUs are updated systematically to reflect the impact of new business combinations and reorganizations carried out by the Group.

Determination of the existence of control IAS 27 “Consolidated and separate financial statements” defines control as power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence of control does not depend solely on ownership of a majority shareholding or the contractual form used in the acquisition. Accordingly management must use its judgment in determining whether specific situations give the Group the power to govern the financial and operating policies of the investee. For subsidiaries consolidated on a full line-by-line basis in these financial statements for which control does not derive from ownership of a majority of voting rights, management has analyzed any agreements with other investors in order to determine whether such agreements give the Group the power of governance indicated above, even though it holds a minority share of voting rights. In this assessment process, management also took account of potential voting rights (call options, warrants, etc.) in order to determine whether they would be currently exercisable as of the reporting date. Following such analysis, the Group consolidated certain companies (Emgesa, Codensa and SE Hydropower) on a line-by-line basis even though it does not hold more than half of the voting rights, as detailed in the attachment “Subsidiaries, associates and other significant equity investments of the Enel Group at December 31, 2012” to these financial statements.

Application of IFRIC 12 “Service concession arrangements” to concessions IFRIC 12 “Service concession arrangements” establishes that, depending on the characteristics of the concession arrangements, the infrastructure used to deliver public services shall be recognized under intangible assets or under financial assets, depending, respectively, on whether the concession holder has the right to charge users of the services or it has the right to receive a specified amount from the grantor agency. More specifically, IFRIC 12 applies to public-to-private service concession arrangements if: Š the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and Š the grantor controls — through ownership or otherwise — any significant residual interest in the infrastructure at the end of the term of the arrangement. In assessing the applicability of these provisions for the Group, management carefully analyzed existing concessions. On the basis of that analysis, the provisions of IFRIC 12 are applicable to the infrastructure used for the concessions for the distribution of electricity of a number of companies in the Iberia and Latin America Division that operate in Brazil.

F-18 Related parties Related parties are mainly parties that have the same controlling entity as Enel SpA, companies that directly or indirectly through one or more intermediaries control, are controlled or are subject to the joint control of Enel SpA and in which the latter has a holding that enables it to exercise a significant influence. Related parties also include the Fopen and Fondenel pension funds, and the standing members of the boards of auditors (and their close family members), and the key management personnel (and their close family members) of Enel SpA and the companies over which it exercises control. Key management personnel comprises management personnel who have the power and direct or indirect responsibility for the planning, management and control of the activities of the company. They include company directors.

Subsidiaries Subsidiaries comprise those entities for which the Group has the direct or indirect power to determine their financial and operating policies for the purposes of obtaining the benefits of their activities. In assessing the existence of a situation of control, account is also taken of potential voting rights that are effectively exercisable or convertible. The figures of the subsidiaries are consolidated on a full line-by-line basis as from the date control is acquired until such control ceases. The acquisition of an additional stake in subsidiaries and the sale of holdings that do not result in the loss of control are considered transactions between owners. As such, the accounting effects of these transactions are recognized directly in consolidated equity. Conversely, where a controlling interest is divested, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date are recognized through profit or loss.

Associated companies Associated companies comprise those entities in which the Group has a significant influence. Potential voting rights that are effectively exercisable or convertible are also taken into consideration in determining the existence of significant influence. These investments are initially recognized at cost, allocating any difference between the cost of the equity investment and the share in the net fair value of the assets, liabilities and identifiable contingent liabilities of the associated company in an analogous manner to the treatment of business combinations, and are subsequently measured using the equity method. The Group’s share of profit or loss is recognized in the consolidated financial statements from the date on which it acquires the significant influence over the entity until such influence ceases. Should the Group’s share of the loss for the period exceed the carrying amount of the equity investment, the latter is impaired and any excess recognized in a provision if the Group has a commitment to meet legal or constructive obligations of the associate or in any case to cover its losses. Where an interest is divested and as a result the Group no longer exercises a significant influence, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date is recognized through profit or loss.

F-19 Group’s share in the entity from the date on which joint control is acquired until such control ceases. The following table reports the contribution of the main joint ventures to the aggregates in the consolidated financial statements: At Dec. 31, 2012 Hydro Dolomiti Enel RusEnergoSbyt Nuclenor Atacama Tejo Millions of euro Percentageconsolidation...... 49.0% 49.5% 50.0% 50.0% 38.9% Non-current assets ...... 307 53 18 222 180 Current assets ...... 20 126 102 87 57 Non-current liabilities ...... 87 1 104 34 141 Current liabilities ...... 30 82 14 39 44 Revenues ...... 120 1,409 95 99 92 Costs ...... 85 1,279 147 62 80 Where an interest is divested and as a result the Group no longer exercises joint control, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date is recognized through profit or loss.

Consolidation procedures The financial statements of subsidiaries used to prepare the consolidated financial statements were prepared at December 31, 2012 in accordance with the accounting policies adopted by the Parent Company. All intercompany balances and transactions, including any unrealized profits or losses on transactions within the Group, are eliminated, net of the theoretical tax effect. Unrealized profits and losses with associates and joint ventures are eliminated for the part attributable to the Group. In both cases, unrealized losses are eliminated except when representative of impairment.

Translation of foreign currency items Transactions in currencies other than the functional currency are recognized in these financial statements at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in a foreign currency other than the functional currency are later adjusted using the balance sheet exchange rate. Non-monetary assets and liabilities in foreign currency stated at historic cost are translated using the exchange rate prevailing on the date of initial recognition of the transaction. Non-monetary assets and liabilities in foreign currency stated at fair value are translated using the exchange rate prevailing on the date that value was determined. Any exchange rate differences are recognized through the income statement.

Translation of financial statements denominated in a foreign currency For the purposes of the consolidated financial statements, all profits/losses, assets and liabilities are stated in euro, which is the presentation currency of the consolidated financial statements. In order to prepare the consolidated financial statements, the financial statements of consolidated companies in functional currencies other than the presentation currency of the consolidated financial statements are translated into euro by applying the relevant period-end exchange rate to the assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the period, which approximates the exchange rates prevailing at the date of the respective transactions, to the income statement items.

F-20 Any resulting exchange rate gains or losses are recognized as a separate component of equity in a special reserve. The gains and losses are recognized proportionately in the income statement on the disposal (partial or total) of the subsidiary.

Business combinations At first-time adoption of the IFRS-EU, the Group elected to not apply IFRS 3 (Business Combinations) retrospectively to acquisitions carried out prior to January 1, 2004. Accordingly, the goodwill in respect of acquisitions preceding the IFRS-EU transition date is carried at the value reported in the last consolidated financial statements prepared on the basis of the previous accounting standards (for the year ended December 31, 2003). Business combinations initiated before January 1, 2010 and completed within that financial year are recognized on the basis of IFRS 3 (2004). Such business combinations were recognized using the purchase method, where the purchase cost is equal to the fair value at the date of the exchange of the assets acquired and the liabilities incurred or assumed, plus costs directly attributable to the acquisition. This cost was allocated by recognizing the assets, liabilities and identifiable contingent liabilities of the acquired company at their fair values. Any positive difference between the cost of the acquisition and the fair value of the net assets acquired pertaining to the shareholders of the Parent Company was recognized as goodwill. Any negative difference was recognized in profit or loss. If the fair values of the assets, liabilities and contingent liabilities could only be calculated on a provisional basis, the business combination was recognized using such provisional values. The value of the non-controlling interests was determined in proportion to the interest held by minority shareholders in the net assets. In the case of business combinations achieved in stages, at the date of acquisition of control the net assets acquired previously were remeasured to fair value and any adjustments were recognized in equity. Any adjustments resulting from the completion of the measurement process were recognized within twelve months of the acquisition date. Business combinations carried out as from January 1, 2010 are recognized on the basis of IFRS 3 (2008), which is referred to as IFRS 3 (Revised) hereafter. More specifically, business combinations are recognized using the acquisition method, where the purchase cost (the consideration transferred) is equal to the fair value at the purchase date of the assets acquired and the liabilities incurred or assumed, as well as any equity instruments issued by the purchaser. Costs directly attributable to the acquisition are recognized through profit or loss. This cost is allocated by recognizing the assets, liabilities and identifiable contingent liabilities of the acquired company at their fair values as at the acquisition date. Any positive difference between the price paid, measured at fair value as at the acquisition date, plus the value of any non-controlling interests, and the net value of the identifiable assets and liabilities of the acquiree measured at fair value is recognized as goodwill. Any negative difference is recognized in profit or loss. The value of the non-controlling interests is determined either in proportion to the interest held by minority shareholders in the net identifiable assets of the acquiree or at their fair value as at the acquisition date. If the fair values of the assets, liabilities and contingent liabilities can only be calculated on a provisional basis, the business combination is recognized using such provisional values. Any adjustments resulting from the completion of the measurement process are recognized within twelve months of the date of acquisition, restating comparative figures. In the case of business combinations achieved in stages, at the date of acquisition of control the holdings acquired previously are remeasured to fair value and any positive or negative difference is recognized in profit or loss.

F-21 Property, plant and equipment Property, plant and equipment is recognized at historic cost, including directly attributable ancillary costs necessary for the asset to be ready for use. It is increased by the present value of the estimate of the costs of decommissioning and restoring the asset where there is a legal or constructive obligation to do so. The corresponding liability is recognized under provisions for risks and charges. The accounting treatment of changes in the estimate of these costs, the passage of time and the discount rate is discussed under “Provisions for risks and charges”. Borrowing costs associated with financing directly attributable to the purchase or construction of assets that require a substantial period of time to get ready for its intended use or sale (qualifying assets) are capitalized as part of the cost of the assets themselves. Borrowing costs associated with the purchase/construction of assets that do not meet such requirement are expensed in the period in which they are incurred. Certain assets that were revalued at the IFRS-EU transition date or in previous periods are recognized at their fair value, which is considered to be their deemed cost at the revaluation date. Where major components of property, plant and equipment have different useful lives, the components are recognized and depreciated separately. Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred to replace a part of the asset will flow to the Group and the cost of the item can be reliably determined. All other expenditure is recognized as an expense in the period in which it is incurred. The cost of replacing part or all of an asset is recognized as an increase in the value of the asset and is depreciated over its useful life; the net carrying amount of the replaced unit is eliminated through profit or loss, with the recognition of any capital gain or loss. Property, plant and equipment is reported net of accumulated depreciation and any impairment losses determined as set out below. Depreciation is calculated on a straight-line basis over the item’s estimated useful life, which is reviewed annually, and any changes are reflected on a prospective basis. Depreciation begins when the asset is ready for use. The estimated useful life of the main items of property, plant and equipment is as follows: Useful life Civilbuildings...... 10-61 years Hydroelectric power plants(1) ...... 35-65 years Thermal power plants(1) ...... 25-60 years Nuclearpowerplants ...... 15-40 years Geothermalpowerplants...... 10-30 years Alternativeenergypowerplants...... 11-40 years Transportlines...... 15-50 years Distributionplant ...... 14-40 years Meters ...... 6-18 years

F-22 Assets recognized under property, plant and equipment are derecognized either at the time of their disposal or when no future economic benefit is expected from their use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets.

Leased assets Property, plant and equipment acquired under finance leases, whereby all risks and rewards incident to ownership are substantially transferred, are initially recognized as assets at the lower of fair value and the present value of the minimum lease payments due, including the payment required to exercise any purchase option. The corresponding liability due to the lessor is recognized under financial liabilities. The assets are depreciated on the basis of their useful lives. If it is not reasonably certain that the Group will acquire the assets at the end of the lease, they are depreciated over the shorter of the lease term and the useful life of the assets. Leases where the lessor retains substantially all risks and rewards incident to ownership are classified as operating leases. Operating lease costs are taken to profit or loss on a systematic basis over the term of the lease. Although not formally designated as lease agreements, certain types of contract can be considered as such if performance of such contracts depends on the use of one or more specific assets and if in substance those contracts grant the right to use such assets. More information on Group lease agreements is provided in note 15 below.

Assets to be relinquished free of charge The Group’s plants include assets to be relinquished free of charge at the end of the concessions. These mainly regard major water diversion works and the public lands used for the operation of the thermal power plants. For plants in Italy, the concessions terminate in 2020 and 2040 (respectively, for plants located in the Autonomous Province of Trento and in the Autonomous Province of Bolzano) and 2029 (for all others). Within the regulatory framework in force until last year, if the concessions are not renewed, at those dates all intake and governing works, penstocks, outflow channels and other assets on public lands were to be relinquished free of charge to the State in good operating condition. Accordingly, depreciation on assets to be relinquished was calculated over the shorter of the term of the concession and the remaining useful life of the assets. In the wake of the legislative changes introduced with Law 134 of August 7, 2012, the assets previously classified as assets “to be relinquished free of charge” connected with the hydroelectric water diversion concessions are now considered in the same manner as other categories of “property, plant and equipment” and are therefore depreciated over the economic and technical life of the asset (where this exceeds the term of the concession), as discussed in the section above on the “Depreciable value of certain elements of Italian hydroelectric plants”, which you are invited to consult for more details. In accordance with Spanish laws 29/85 and 46/99, hydroelectric power stations in Spanish territory operate under administrative concessions at the end of which the plants will be returned to the government in good operating condition. The terms of the concessions extend up to 2067. A number of generation companies that operate in Argentina, Brazil and Mexico hold administrative concessions with similar conditions to those applied under the Spanish concession system. These concessions will expire in the period between 2013 and 2088. As regards the distribution of electricity, the Group is a concession holder in Italy for this service. The concession, granted by the Ministry for Economic Development, was issued free of charge and terminates on December 31, 2030. If the concession is not renewed upon expiry, the grantor is required to pay an indemnity. The amount of the indemnity will be determined by agreement of the

F-23 parties using appropriate valuation methods, based on both the balance-sheet value of the assets themselves and their profitability. In determining the indemnity, such profitability will be represented by the present value of future cash flows. The infrastructure serving the concessions is owned and available to the concession holder. It is recognized under “Property, plant and equipment” and is depreciated over the useful lives of the assets. Enel also operates under administrative concessions for the distribution of electricity in other countries (including Spain and Romania). These concessions give the right to build and operate distribution networks for an indefinite period of time.

Investment property Investment property consists of the Group’s real estate held to generate rental income or capital gains rather than for use in operations or the delivery of goods and services. Investment property is initially recognized at cost in the same manner as other property, plant and equipment. Subsequently, it is measured at cost net of depreciation, as calculated over a useful life of 40 years, and any impairment losses. Impairment losses are determined on the basis of the following criteria. The fair value of investment property is determined on the basis of the state of the individual assets, projecting the valuations for the previous year in relation to the performance of the real estate market and estimated developments in the value of the assets. The fair value of investment property recognized at December 31, 2012, as determined on the basis of appraisals by independent experts, is equal to €225 million. Investment property is derecognized either at the time of its disposal or when no future economic benefit is expected from its use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets.

Intangible assets Intangible assets are identifiable assets without physical substance controlled by the entity and capable of generating future economic benefits, as well as goodwill if acquired for consideration. They are measured at purchase or internal development cost, when it is probable that the use of such assets will generate future economic benefits and the related cost can be reliably determined. The cost includes any directly attributable incidental expenses necessary to make the assets ready for use. The assets, with a definite useful life, are reported net of accumulated amortization and any impairment losses, determined as set out below. Amortization is calculated on a straight-line basis over the item’s estimated useful life, which is checked at least annually; any changes in amortization policies are reflected on a prospective basis. Amortization commences when the asset is ready for use. Intangible assets with an indefinite useful life are not amortized systematically. Instead, they undergo impairment testing at least annually. Intangible assets are derecognized either at the time of their disposal or when no future economic benefit is expected from their use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets.

F-24 Goodwill deriving from the acquisition of subsidiaries, associated companies or joint ventures is allocated to each of the cash-generating units identified. After initial recognition, goodwill is not amortized but is tested for recoverability at least annually using the criteria described in note 16 below. Goodwill relating to equity investments in associates is included in their carrying amount.

Impairment losses Property, plant and equipment and intangible assets are reviewed at least once a year to determine whether there is evidence of impairment. If such evidence exists, the recoverable amount of any property, plant and equipment and intangible assets is estimated. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. The latter is represented by the present value of the estimated future cash flows generated by the asset in question. Value in use is determined by discounting estimated future cash flows using a pre- tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the asset. The recoverable amount of assets that do not generate independent cash flows is determined based on the cash-generating unit to which the asset belongs. If an asset’s carrying amount or that of the cash-generating unit to which it is allocated is higher than its recoverable amount, an impairment loss is recognized in the income statement. Impairment losses of cash generating units are first charged against the carrying amount of any goodwill attributed to it and then against the value of other assets, in proportion to their carrying amount. If the reasons for a previously recognized impairment loss no longer apply, the carrying amount of the asset is restored through profit or loss in an amount that shall not exceed the net carrying amount the asset would have had if the impairment loss had not been recognized and depreciation or amortization had been performed. The recoverable amount of goodwill and intangible assets with an indefinite useful life as well as that of intangible assets not yet available for use is tested for recoverability annually or more frequently if there is evidence suggesting that the assets may be impaired. The original value of goodwill is not restored even if in subsequent years the reasons for the impairment no longer apply. If certain specific identified assets owned by the Group are impacted by adverse economic or operating conditions that undermine their capacity to contribute to the generation of cash flows, they can be isolated from the rest of the assets of the CGU, undergo separate analysis of their recoverability and written down where necessary.

Inventories Inventories are measured at the lower of cost and net estimated realizable value except for inventories involved in trading activities, which are measured at fair value with recognition through profit or loss. Average weighted cost is used, which includes related ancillary charges. Net estimated realizable value is the estimated normal selling price net of estimated selling costs or, where applicable, replacement cost. The portion of inventories held to discharge sales that have already been made, the net realizable value is determined on the basis of the amount established in the contract of sale.

As regards CO2 emissions allowances, inventories are allocated between the trading portfolio and that used for compliance with greenhouse gas emission requirements. Within the latter, the allowances are allocated in sub-portfolios on the basis of the year of compliance to which they have been assigned. Materials and other consumables (including energy commodities) held for use in production are not written down if it is expected that the final product in which they will be incorporated will be sold at a price sufficient to enable recovery of the cost incurred.

F-25 Inventories also include purchases of nuclear fuel, whose use is determined on the basis of the energy produced.

Construction contracts Construction contracts are measured on the basis of the contractual amounts accrued with reasonable certainty in respect of the stage of completion of the works as determined using the cost-to-cost method. Advances paid by customers are deducted from the value of the construction contracts up to the extent of the accrued amounts; any excess is recognized under liabilities. Losses on individual contracts are recognized in their entirety in the period in which they become probable, regardless of the stage of completion of the contract.

Financial instruments Financial assets measured at fair value through profit or loss This category includes debt securities and equity investments in entities other than subsidiaries, associates and joint ventures held for trading and designated as at fair value through profit or loss at the time of initial recognition. Such assets are initially recognized at fair value. Subsequent to initial recognition, gains and losses from changes in their fair value are recognized in the income statement

Financial assets held to maturity This category comprises non-derivative financial instruments with fixed or determinable payments and that do not represent equity investments that are quoted on an active market for which the Group has the positive intention and ability to hold until maturity. They are initially recognized at fair value as measured at the trade date, including any transaction costs; subsequently, they are measured at amortized cost using the effective interest method, net of any impairment losses. Impairment losses are calculated as the difference between the carrying amount of the asset and the present value of expected future cash flows, discounted using the original effective interest rate. In the case of renegotiated financial assets, impairment losses are calculated using the original effective interest rate in effect prior to the amendment of the related terms and conditions.

Loans and receivables This category includes non-derivative financial and trade receivables, including debt securities, with fixed or determinable payments that are not quoted on an active market that the entity does not originally intend to sell. Such assets are initially recognized at fair value, adjusted for any transaction costs, and subsequently measured at amortized cost using the effective interest method, net of any impairment losses. Such impairment losses are calculated as the difference between the carrying amount of the asset and the present value of expected future cash flows, discounted using the original effective interest rate. In the case of renegotiated financial assets, impairment losses are calculated using the original effective interest rate in effect prior to the amendment of the related terms and conditions. Trade receivables falling due in line with generally accepted trade terms are not discounted.

Financial assets available for sale This category includes listed debt securities not classified as held to maturity, equity investments in other entities (unless classified as “designated as at fair value through profit or loss”) and financial assets that cannot be classified in other categories. These instruments are measured at fair value with changes recognized in shareholders’ equity.

F-26 At the time of sale, or when a financial asset available for sale becomes an investment in a subsidiary as a result of successive purchases, the cumulative gains and losses previously recognized in equity are reversed to the income statement. Where there is objective evidence that such assets have incurred an impairment loss, the cumulative loss previously recognized in equity is eliminated through reversal to the income statement. Such impairment losses, which cannot be reversed, are calculated as the difference between the carrying amount of the asset and its fair value, determined on the basis of the market price at the balance sheet date for financial assets listed on regulated markets or on the basis of the present value of expected future cash flows, discounted using the market interest rate for unlisted financial assets. When the fair value cannot be determined reliably, these assets are recognized at cost adjusted for any impairment losses.

Impairment of financial assets At each balance sheet date, financial assets are analyzed to determine whether their value is impaired. A financial asset is considered impaired when there is objective evidence of such impairment loss as the result of one or more events that occurred after the initial recognition of the asset that have had an impact on the reliably estimated future cash flows of the asset. Objective evidence of an impairment loss includes observable data about events such as, for example, significant financial difficulty of the obligor; default or delinquency in interest or principal payments; it becoming probable that the borrower will enter bankruptcy or other form of financial reorganization; or observable data indicating a measurable decrease in estimated future cash flows. Where an impairment loss is found, the latter is calculated as indicated above for each type of financial asset involved. When there is no realistic chance of recovering the financial asset, the corresponding value of the asset is written off through profit or loss.

Cash and cash equivalents This category reports assets that are available on demand or at very short term, , readily convertible into a known amount of cash and which are subject to insignificant risk of changes in value. In addition, for the purpose of the consolidated statement of cash flows, cash and cash equivalents do not include bank overdrafts at period-end.

Trade payables Trade payables are initially recognized at fair value and subsequently measured at amortized cost. Trade payables falling due in line with generally accepted trade terms are not discounted.

Financial liabilities Financial liabilities other than derivatives are recognized when the Company becomes a party to the contractual clauses representing the instrument and are initially measured at fair value adjusted for directly attributable transaction costs. Financial liabilities are subsequently measured at amortized cost using the effective interest rate method.

Derivative financial instruments Derivatives are recognized at fair value and are designated as hedging instruments when the relationship between the derivative and the hedged item is formally documented and the effectiveness of the hedge (assessed periodically) meets the thresholds envisaged under IAS 39.

F-27 When the derivatives are used to hedge the risk of changes in the fair value of hedged assets or liabilities, any changes in the fair value of the hedging instrument are taken to profit or loss. The adjustments in the fair values of the hedged assets or liabilities are also taken to profit or loss. When derivatives are used to hedge the risk of changes in the cash flows generated by the hedged items (cash flow hedges), changes in fair value are initially recognized in equity, in the amount qualifying as effective, and are recognized in profit or loss only when the change in the cash flows from the hedged items to be offset actually occurs. The ineffective portion of the fair value of the hedging instrument is taken to profit or loss. Changes in the fair value of trading derivatives and those that no longer qualify for hedge accounting under IAS 39 are recognized in profit or loss. Derivative financial instruments are recognized at the trade date. Financial and non-financial contracts (that are not already measured at fair value) are analyzed to identify any embedded derivatives, which are separated and measured at fair value. This analysis is conducted at the time the entity becomes party to the contract or when the contract is renegotiated in a manner that significantly changes the original associated cash flows. Fair value is determined using the official prices for instruments traded on regulated markets. For instruments not traded on regulated markets fair value is determined on the basis of the present value of expected cash flows using the market yield curve at the reporting date and translating amounts in currencies other than the euro at end-period exchange rates. The Group also analyzes all forward contracts for the purchase or sale of non-financial assets, with a specific focus on forward purchases and sales of electricity and energy commodities, in order to determine if they must be classified and treated in conformity with IAS 39 or if they have been entered into for physical delivery in line with the normal purchase/sale/[use] needs of the company (own use exemption). If such contracts have not been entered into in order to obtain or deliver electricity or energy commodities, they are measured at fair value.

Derecognition of financial assets and liabilities Financial assets are derecognized whenever one of the following conditions is met: Š the contractual right to receive the cash flows associated with the asset expires; Š the Company has transferred substantially all the risks and rewards associated with the asset, transferring its rights to receive the cash flows of the asset or assuming a contractual obligation to pay such cash flows to one or more beneficiaries under a contract that meets the requirements envisaged under IAS 39 (the “pass through test”); Š the Company has not transferred or retained substantially all the risks and rewards associated with the asset but has transferred control over the asset. Financial liabilities are derecognized when they are extinguished, i.e. when the contractual obligation has been discharged, cancelled or lapsed.

F-28 Š Level 2 includes financial assets/liabilities measured at fair value on the basis of inputs other than those included in Level 1 but that are observable either directly or indirectly on the market; Š Level 3 includes financial assets/liabilities whose fair value was calculated using inputs not based on observable market data.

Post-employment and other employee benefits Liabilities related to employee benefits paid upon or after ceasing employment in connection with defined benefit plans or other long-term benefits accrued during the employment period are determined separately for each plan, using actuarial assumptions to estimate the amount of the future benefits that employees have accrued at the balance sheet date (the projected unit credit method). The liability, which is carried net of any plan assets, is recognized on an accruals basis over the vesting period of the related rights. These appraisals are performed by independent actuaries. As regards liabilities in respect of defined-benefit plans, the cumulative actuarial gains and losses at the end of the previous year exceeding 10% of the greater of the present value of the defined benefit obligation and the fair value of the plan assets at that date are recognized in profit or loss over the expected average remaining working lives of the employees participating in the plan. Otherwise, they are not recognized. Where the Company has made a demonstrable commitment, with a formal plan without realistic possibility of withdrawal, to a termination before retirement eligibility has been reached, the benefits due to employees in respect of the termination are recognized as a cost and measured on the basis of the number of employees that are expected to accept the offer. In the event of a change being made to an existing defined-benefit plan or the introduction of a new plan, any past service cost is recognized immediately in profit or loss if the benefits of the change or introduction have already vested or amortized on a straight-line basis over the average period until the benefits become vested. In the case of changes to or the introduction of other long-term benefits, any past service cost is recognized immediately in profit or loss in its entirety.

Share-based payments Stock option plans The cost of services rendered by employees and remunerated through stock option plans is determined based on the fair value of the options granted to employees at the grant date. The calculation method to determine the fair value considers all characteristics of the option (option term, price and exercise conditions, etc.), as well as the Enel share price at the grant date, the volatility of the stock and the yield curve at the grant date consistent with the expected life of the plan. The pricing model used is the Cox-Rubinstein. This cost is recognized in the income statement, with a specific contra-item in shareholders’ equity, over the vesting period considering the best estimate possible of the number of options that will become exercisable.

F-29 This cost is recognized in the income statement, with recognition of a specific item in shareholders’ equity, over the vesting period, considering the best estimate possible of the number of RSU that will become exercisable.

Provisions for risks and charges Accruals to the provisions for risks and charges are recognized where there is a legal or constructive obligation as a result of a past event at period-end, the settlement of which is expected to result in an outflow of resources whose amount can be reliably estimated. Where the impact is significant, the accruals are determined by discounting expected future cash flows using a pre-tax discount rate that reflects the current market assessment of the time value of money and, if applicable, the risks specific to the liability. If the provision is discounted, the periodic adjustment of the present value for the time factor is recognized as a financial expense. Where the liability relates to decommissioning and/or site restoration in respect of property, plant and equipment, the initial recognition of the provision is made against the related asset and the expense is then recognized in profit or loss through the depreciation of the asset involved. Where the liability regards the treatment and storage of nuclear waste and other radioactive materials, the provision is recognized against the related operating costs. Changes in estimates of accruals to the provision are recognized in the income statement in the period in which the changes occur, with the exception of those in the costs of dismantling and/or restoration resulting from changes in the timetable and costs necessary to extinguish the obligation or from a change in the discount rate. These changes increase or decrease the value of the related assets and are taken to the income statement through depreciation. Where they increase the value of the assets, it is also determined whether the new carrying amount of the assets is fully recoverable. If this is not the case, a loss equal to the unrecoverable amount is recognized in the income statement. Decreases in estimates are recognized up to the carrying amount of the assets. Any excess is recognized immediately in the income statement. For more information on the estimation criteria adopted in determining provisions for dismantling and/or restoration of property, plant and equipment, especially those associated with nuclear power plants, please see the section on the use of estimates.

Grants Grants are recognized at fair value when it is reasonably certain that they will be received or that the conditions for receipt have been met as provided for by the governments, government agencies and similar local, national or international authorities. Grants received for specific expenditure or specific assets the value of which is recognized as an item of property, plant and equipment or an intangible asset are recognized as other liabilities and credited to the income statement over the period in which the related costs are recognized. Operating grants are recognized fully in profit or loss at the time they satisfy the requirements for recognition. Such grants include subsidies granted to the Group for the generation of power with plants that use renewable resources. These incentives, including green certificates, are recognized on the basis of amounts generated and are measured at fair value.

Revenues Revenues are recognized when it is probable that the future economic benefits will flow to the Company and these benefits can be measured reliably.

F-30 More specifically, the following criteria are used depending on the type of transaction: Š revenues from the sale of goods are recognized when the significant risks and rewards of ownership are transferred to the buyer and their amount can be reliably determined; Š revenues from the sale and transport of electricity and gas refer to the quantities provided during the period, even if these have not yet been invoiced, and are determined using estimates as well as periodic meter readings. Where applicable, this revenue is based on the rates and related restrictions established by law or the Authority for Electricity and Gas and analogous foreign authorities during the applicable period. In particular, the authorities that regulate the electricity and gas markets can use mechanisms to reduce the impact of the temporal mismatching between the setting of prices for energy for the regulated market as applied to distributors and the setting of prices by the latter for final consumers; Š revenues from the rendering of services are recognized in line with the stage of completion of the services. Where it is not possible to reliably determine the value of the revenues, they are recognized in the amount of the costs that it is considered will be recovered; Š revenues accrued in the period in respect of construction contracts are recognized on the basis of the payments agreed in relation to the stage of completion of the work, determined using the cost-to-cost method, under which costs, revenues and the related margins are recognized on the basis of the progress of the project. The stage of completion is determined as a ratio between costs incurred at the measurement date and the overall costs expected for the project. In additional to contractual payments, project revenues include any payments in respect of variations, price revisions and incentives, with the latter recognized where it is probable that they will actually be earned and can be reliably determined. Revenues are also adjusted for any penalties for delays attributable to the Company; Š revenues for fees for connection to the electricity distribution grid are recognized in full upon completion of connection activities if the service provided can be recognized separately from any electricity distribution services provided on an ongoing basis.

Financial income and expense Financial income and expense is recognized on an accruals basis in line with interest accrued on the net carrying amount of the related financial assets and liabilities using the effective interest rate method. They include the changes in the fair value of financial instruments recognized at fair value through profit or loss and changes in the fair value of derivatives connected with financial transactions.

Income taxes Current income taxes for the period, which are recognized under “income tax payable” net of payments on account, or under “income tax receivable” where there is a credit balance, are determined using an estimate of taxable income and in conformity with the applicable regulations. Deferred tax liabilities and assets are calculated on the temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding values recognized for tax purposes on the basis of tax rates in effect on the date the temporary difference will reverse, which is determined on the basis of tax rates that are in force or substantively in force at the balance sheet date. Deferred tax assets are recognized when recovery is probable, i.e. when an entity expects to have sufficient future taxable income to recover the asset. The recoverability of deferred tax assets is reviewed at each period-end.

F-31 Deferred tax assets and liabilities in respect of taxes levied by the same tax authority are offset if the Company has a legal right to offset current tax assets against current tax liabilities generated at the time they reverse. Current and deferred taxes are recognized in profit or loss, with the exception of those in respect of items directly credited or debited to equity, which are recognized directly in equity.

Dividends Dividends from equity investments are recognized when the shareholder’s right to receive them is established. Dividends and interim dividends payable to third parties are recognized as changes in equity at the date they are approved by the Shareholders’ Meeting and the Board of Directors, respectively.

Discontinued operations and non-current assets held for sale Non-current assets (or disposal groups) whose carrying amount will mainly be recovered through sale, rather than through ongoing use, are classified as held for sale and shown separately from the other balance sheet assets and liabilities. This only occurs when the sale is highly probable and the non-current assets (or disposal groups) are available in their current condition for immediate sale. Non-current assets (or disposal groups) classified as held for sale are first recognized in compliance with the appropriate IFRS/IAS applicable to the specific assets or liabilities and subsequently measured at the lower of the carrying amount and the fair value, net of costs to sell. Any subsequent impairment losses are recognized as a direct adjustment to the non-current assets (or disposal groups) classified as held for sale and expensed in the income statement. The corresponding values for the previous period are not reclassified. A discontinued operation is a component of an entity that has been divested or classified as held for sale and: Š represents a major line of business or geographical area of operations; Š is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or Š is a subsidiary acquired exclusively with a view to resale. Gains or losses on operating assets sold — whether disposed of or classified as held for sale — are shown separately in the income statement, net of the tax effects. The corresponding values for the previous period, where present, are reclassified and reported separately in the income statement, net of tax effects, for comparative purposes. Non-current assets that no longer meet the requirements for classification as held for sale or which cease to belong to a disposal group classified as held for sale are measured as the lower of: Š the book value before the asset (or disposal group) was classified as held for sale, adjusted for depreciation, amortization, writedowns or writebacks that would have been recognized if the asset (or disposal group) had not been classified as held for sale; and Š the recoverable value, which is equal to the greater of its fair value net of costs to sell and its value in use, as calculated at the date on which the decision not to sell was taken.

F-32 3. Recently issued accounting standards First-time adoption and applicable standards The Group has adopted the following amendment to international accounting standards that took effect as from January 1, 2012: Š “Amendments to IFRS 7 — Financial instruments: Disclosures”; the amendments introduced new disclosure requirements to assist users of financial statements to assess the exposure to risk in the transfer of financial assets and the impact of such risks on the Company’s financial position. The new version of the standard introduces specific disclosure requirements, to be reported in a single note, concerning transferred financial assets that have not been derecognized and transferred assets in which, as of the balance sheet date, the Company has a continuing involvement. The application of the amendments on a prospective basis did not have a significant impact.

Standards not yet applicable and not yet adopted In 2012, the European Commission endorsed the following accounting standards and interpretations, which will be applicable to the Group in future years: Š “Amendment to IAS 1 — Presentation of items of other comprehensive income”, issued in June 2011; the amendment calls for the separate presentation of items of other comprehensive income (OCI) that may be reclassified to profit or loss in the future (“recycling”) and those that will not be recycled. The amendment will take effect retrospectively for annual reporting periods beginning on or after January 1, 2013. The future application of the measures is not expected to have a significant impact. Š “IAS 19 — Employee benefits”, issued in June 2011; the standard supersedes the current IAS 19 governing the accounting treatment of employee benefits. The most significant change regards the requirement to recognize all actuarial gains/losses in OCI, with the elimination of the corridor approach. The amended standard also introduces more stringent rules for disclosures, with the disaggregation of the cost into three components; eliminates the expected return of plan assets; no longer permits the deferral of the recognition of past service cost; provides for enhanced disclosures; and introduces more detailed rules for the recognition of termination benefits. The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2013. The expected impact of the amendments will mainly derive from the change in the accounting treatment of past service cost and actuarial gains and losses, whose recognition can no longer be deferred, as noted above. For greater details, please see note 29, which contains the schedule of changes in actuarial liabilities in 2012 as well as reporting the amount of past service cost and unrecognized gains and losses at December 31, 2012. “IFRS 13 — Fair value measurement”, issued in May 2011; the standard represents a single IFRS framework to be used whenever another accounting standard requires or permits the use of fair value measurement. The standard sets out guidelines for measuring fair value and introduces specific disclosure requirements. The new standard will take effect prospectively for annual reporting periods beginning on or after January 1, 2013. The future application of the measures is not expected to have a significant impact. Š “Amendments to IFRS 7 — Offsetting financial assets and financial liabilities”, issued in December 2011, in parallel with the amendments to IAS 32, which are discussed below; the amendments establish more extensive disclosures for the offsetting of financial assets and liabilities, with a view to enabling users of financial statements to assess the actual and potential effects on the entity’s financial position of netting arrangements, including the set-off rights associated with recognized assets or liabilities.

F-33 The amendments will take effect retrospectively for annual reporting periods beginning on or after January 1, 2013. The future application of the measures is not expected to have a significant impact. Š “IFRIC 20 — Stripping costs in the production phase of a surface mine”, issued in October 2011; the interpretation sets out the accounting treatment to be applied to costs incurred for the removal of mine waste materials during the production phase, clarifying when they can be recognized as an asset. The interpretation will take effect for annual reporting periods beginning on or after January 1, 2013. The future application of the measures is not expected to have a significant impact. Š “IFRS 10 — Consolidated financial statements”, issued in May 2011; replaces SIC 12 — Consolidation — Special purpose entities and, for the part concerning consolidated financial statements, IAS 27 — Consolidated and separate financial statements, the title of which was changed to “Separate financial statements”. The standard introduces a new approach to determining whether an entity controls another (the essential condition for consolidating an investee), without modifying the consolidation procedures envisaged in the current IAS 27. This approach must be applied to all investees, including special purpose entities, which are called “structured entities” in the new standard. While current accounting standards give priority — where control does not derive from holding a majority of actual or potential voting rights — to an assessment of the risks/benefits associated with the holding in the investee, IFRS 10 focuses the determination on three elements to be considered in each assessment: (i) power over the investee; (ii) exposure to variable returns from the involvement in the investee; and (iii) the link between power and returns, i.e. the ability to use that decision- making power over the investee to affect the amount of returns. The accounting effects of a loss of control or a change in the ownership interest that does not result in a loss of control are unchanged with respect to the provisions of the current IAS 27. The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “IAS 27 — Separate financial statements”, issued in May 2011; together with the issue of IFRS 10 and IFRS 12, the current IAS 27 was amended, with changes to its title and its content. All provisions concerning the preparation of consolidated financial statements were eliminated, while the other provisions were not modified. Following the amendment, the standard therefore only specifies the recognition and measurement criteria and the disclosure requirements for separate financial statements concerning subsidiaries, joint ventures and associates. The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group does not expect the future application of the measures to have an impact. Š “IFRS 11 — Joint arrangements”, issued in May 2011; replaces IAS 31 — Interests in joint ventures and SIC 13 — Jointly controlled entities — non-monetary contributions by venturers. Unlike IAS 31, which assesses joint arrangements on the basis of the contractual form adopted, IFRS 11 assesses them on the basis of how the related rights and obligations are attributed to the parties. In particular, the new standard identifies two types of joint arrangement: joint operations, where the parties to the arrangement have pro-rata rights to the assets and pro-rata obligations for the liabilities relating to the arrangement; and joint ventures, where the parties have rights to a share of the net assets or results of the arrangement. In the consolidated financial statements, accounting for an interest in a joint operation involves the recognition of the assets/liabilities and revenues/expenses related to the arrangement on the basis of the associated rights/obligations, without taking account of the interest held. Accounting for an interest in a joint venture involves the recognition of an investment accounted for using the equity method (proportionate consolidation is no longer permitted).

F-34 The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “IAS 28 – Investments in associates and joint ventures”, issued in May 2011.; together with the issue of IFRS 11 and IFRS 12, the current IAS 28 was amended, with changes to its title and its content. In particular, the new standard, which also includes the provisions of SIC 13 — Jointly controlled entities — non-monetary contributions by venturers, describes the application of the equity method, which in consolidated financial statements is used to account for associates and joint ventures. The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “IFRS 12 — Disclosure of interests in other entities”, issued in May 2011; IFRS 12 brings together in a single standard the required disclosures concerning interests held in subsidiaries, joint operations and joint ventures, associates and structured entities. In particular, the standard supplements the disclosures called for in the current IAS 27, IAS 28 and IAS 31, which were amended appropriately, and introduces new disclosure requirements. The new standard will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IAS 32 — Offsetting financial assets and financial liabilities”, issued in December 2011; IAS 32 establishes that a financial asset and a financial liability should be offset and the net amount reported in the balance sheet when, and only when, an entity: a) has a legally enforceable right to set off the amounts; and b) intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. The amendments to IAS 32 clarify the conditions that must be met for these two requirements to be satisfied. As regards the first requirement, the amendments expand the illustration of cases in which an entity “currently has a legally enforceable right of set-off”, while as regards the second the amendments clarify that where the entity settles the financial asset and liability separately, for set-off to be allowed the associated credit and liquidity risk should be insignificant and, in this regard, specify the characteristics that gross settlement systems must have. The amendments will take effect retrospectively for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. In the years from 2009 to 2012, the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) also published new standards and interpretations that as of December 31, 2012, had not yet been endorsed by the European Commission. The rules that could have an impact on the consolidated financial statements of the Group are set out below: Š “IFRS 9 — Financial instruments”, issued in November 2009 and revised in October 2010; the standard is the first of three phases in the project to replace IAS 39. The standard establishes new criteria for the classification of financial assets and liabilities. Financial assets must be classified based on the business model of the entity and the characteristics of the associated cash flows. The new standard requires financial assets and liabilities to be measured initially at fair value plus any transaction costs directly attributable to their assumption or issue. Subsequently, they are measured at fair value or amortized cost, unless the fair value option is applied. As regards equity instruments not held for trading, an entity can make an irrevocable election to measure them at fair value through other comprehensive income. Any dividend

F-35 income shall be recognized through profit or loss. The new standard, which was amended in December 2011 with regard to the effective date, will take effect, subject to endorsement, for periods beginning on or after January 1, 2015. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 9 and IFRS 7 — Mandatory effective date and transition disclosure”, issued in December 2011. The amendment modifies IFRS 9 — Financial instruments, postponing the mandatory effective date from January 1, 2013 to January 1, 2015 and establishing new rules for the transition from IAS 39 to IFRS 9. It also modifies IFRS 7 — Financial instruments: Disclosures, introducing new comparative disclosures, which will be mandatory or optional depending on the date of transition to IFRS 9. The amendments establish that companies that adopt IFRS 9 for the first time always have the option of not restating prior periods. More specifically, companies that adopt IFRS 9 for reporting periods beginning before January 1, 2012 are not required to restate prior periods or provide the additional disclosures to those already provided for following the amendments made to IFRS 7 with the issue of IFRS 9; companies that adopted IFRS 9 for periods beginning from January 1, 2012 until December 31, 2012 could elect to either restate prior periods or provide the additional comparative disclosures in accordance with the amendments to IFRS 7; companies that adopt IFRS 9 for periods beginning from January 1, 2013 until January 1, 2015, are required to provide the additional comparative disclosures in accordance with the amendments to IFRS 7 regardless of whether they restate prior periods, which they may but are not required to do. The amendments will take effect, subject to endorsement, for periods beginning on or after January 1, 2015. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 10, IFRS 11 and IFRS 12 — Transition Guidance”, issued in 2012; the amendments are intended to clarify a number of issues concerning the first-time adoption of IFRS 10, IFRS 11 and IFRS 12. In particular, IFRS 10 was amended to clarify that the date of initial application of the standard shall mean “the beginning of the annual reporting period in which IFRS 10 is applied for the first time” (i.e. January 1, 2013). In addition, the amendments limited the comparative disclosures to be provided in the first year of application. IFRS 11 and IFRS 12 were amended analogously, limiting the effects, both in terms of restatement of financial data and of disclosures, of initial application of IFRS 11. The amendments will take effect retrospectively, subject to endorsement, for periods beginning on or after January 1, 2013. Nevertheless, the European Commission is considering the possibility of deferring initial application to January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 10, IFRS 12 and IAS 27 — Investment entities”, issued in October 2012; the amendments introduce an exception to the requirement under IFRS 10 to consolidate all subsidiaries if the parent qualifies as an “investment entity”. More specifically, investment entities, as defined in the amendments, shall not consolidate their subsidiaries unless the latter provide services associated with the investment activities of the parent. Non-consolidated subsidiaries shall be measured in conformity with IFRS 9 or IAS 39. The parent of an investment entity shall, however, consolidate all of its subsidiaries (including those held through the investment entity) unless it also qualifies as an investment entity. The amendments will take effect retrospectively, subject to endorsement, for periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures.

F-36 Š “Annual Improvements to IFRSs 2009-2011 Cycle”, issued in May 2012; the document contains formal modifications and clarifications of existing standards. The amendments will take effect retrospectively, subject to endorsement, for periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. More specifically, the following standards have been amended: Š IFRS 1 — First-time Adoption of International Financial Reporting Standards; the amendment clarifies that an entity that has stopped applying IFRS may, if it decides to resume applying those standards to its financial statements, choose either to reapply IFRS 1 or apply IAS 8 as if it had never stopped applying IFRS. IFRS 1 was also amended with regard to the capitalization of borrowing costs: a first-time adopter may choose between applying the provisions of IAS 23 as from the date of first- time adoption of IFRS/IAS or from a previous date, in accordance with paragraph 28 of IAS 23. The amendment also establishes that entities that adopt IFRS/IAS for the first time do not have to adjust borrowing costs capitalized using their previous GAAP and must only apply IAS 23 for borrowing costs incurred as from the date selected as indicated above. Š IAS 1 — Presentation of Financial Statements; the amendment clarifies how comparative information must be presented in the financial statements and specifies that an entity may voluntarily elect to provide additional comparative information. Š IAS 16 — Property, Plant and Equipment; the amendment clarifies that if spare parts and servicing equipment meet the requirements for classification as “property, plant and equipment” they shall be recognized and measured in accordance with IAS 16; otherwise they shall be classified as inventory. Š IAS 32 — Financial Instruments: Presentation; the amendment establishes that income taxes relating to distributions to equity holders and to transaction costs of equity transactions shall be accounted for in accordance with IAS 12. Š IAS 34 — Interim Financial Reporting; the amendment clarifies that interim financial reports indicate specify the total assets and liabilities for a particular reportable segment only if such amounts are regularly provided by the chief operating decision maker and if there has been a material change from the amount disclosed in the last annual financial statements presented.

4. Restatement of comparative figures at December 31, 2011 During the period under review, the Group adopted a new criterion for accounting for white certificates (energy efficiency certificates or EECs) that, in considering energy efficiency requirements as a system charge aimed at achieving energy savings objectives, for which operators covered by the obligation incur the costs for the purchase and internal development of the certificates that will be delivered to the competent authorities for the purpose of compliance with the targets, means recognizing the overall cost of compliance with energy efficiency requirements through profit or loss in the accounting period to which the compliance requirement pertains, ascertaining any charge in respect of certificates that are not available at the end of that period (the deficit). The costs incurred for the purchase and internal development of white certificates to be used to meet requirements in subsequent periods are recognized under “other assets”. The accounting policy previously adopted was based on considering white certificates as assets used in the production process. Accordingly, the related costs were recognized through profit or loss at the time of their actual use for the purpose of compliance with regulatory requirements. In addition, white certificates deriving from multi-year projects were classified under intangible assets and amortized at the time of their use.

F-37 The change in the accounting treatment of white certificates led to the restatement of the balance sheet and income statement items in the consolidated financial statements at December 31, 2011, which are presented for comparative purposes only in the consolidated financial statements at December 31, 2012. In particular, the retrospective application of the change involved recognition of the compliance obligation (net of related taxes) as well as appropriate reclassifications in the consolidated balance sheet between existing intangible assets and prepaid operating expenses. The following tables show the changes in the consolidated balance sheet and income statement. The impact on the statement of consolidated comprehensive income and the consolidated statement of cash flows is limited to a number of reclassifications among the various components, in line with the data reported in the balance sheet and income statement. 2011 New EEC policy 2011 restated Millions of euro Revenues Revenuesfromsalesandservices...... 77,573 — 77,573 Otherrevenuesandincome ...... 1,941 — 1,941 79,514 — 79,514 Costs Rawmaterialsandconsumables ...... 42,901 — 42,901 Services ...... 14,440 — 14,440 Personnel ...... 4,296 — 4,296 Depreciation, amortization and impairment losses ...... 6,351 (24) 6,327 Otheroperatingexpenses ...... 2,143 112 2,255 Capitalizedcosts...... (1,711) — (1,711) 68,420 88 68,508 Net income/(charges) from commodity risk management ...... 272 — 272 Operating income ...... 11,366 (88) 11,278 Financialincome ...... 2,693 — 2,693 Financialexpense...... 5,717 — 5,717 Share of income/(expense) from equity investments accounted for using the equity method ...... 96 — 96 Income before taxes ...... 8,438 (88) 8,350 Incometaxes ...... 3,080 (53) 3,027 Net income from continuing operations ...... 5,358 (35) 5,323 Net income from discontinued operations ...... ——— Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 5,358 (35) 5,323 Attributable to shareholders of the Parent Company ...... 4,148 (35) 4,113 Attributable to non-controlling interests ...... 1,210 — 1,210

F-38 at Dec. 31, New EEC at Jan. 1, 2011 at Dec. 31, New EEC at Dec. 31, 2011 2010 policy restated 2011 policy restated Millions of euro ASSETS Non-current assets Property, plant and equipment ...... 78,094 — 78,094 80,592 — 80,592 Investmentproperty ..... 299 — 299 245 — 245 Intangible assets ...... 39,581 (46) 39,535 39,075 (26) 39,049 Deferred tax assets ...... 6,017 52 6,069 6,011 105 6,116 Equity investments accounted for using the equitymethod...... 1,033 — 1,033 1,085 — 1,085 Non-current financial assets ...... 4,701 — 4,701 6,325 — 6,325 Other non-current assets ...... 1,062 16 1,078 506 6 512 130,787 22 130,809 133,839 85 133,924 Current assets Inventories ...... 2,803 — 2,803 3,148 — 3,148 Trade receivables ...... 12,505 — 12,505 11,570 — 11,570 Tax receivables ...... 1,587 — 1,587 1,251 — 1,251 Current financial assets . . 11,922 — 11,922 10,466 — 10,466 Other current assets ..... 2,176 — 2,176 2,135 1 2,136 Cash and cash equivalents ...... 5,164 — 5,164 7,015 — 7,015 36,157 — 36,157 35,585 1 35,586 Assets held for sale ..... 1,618 — 1,618 381 — 381 TOTAL ASSETS ...... 168,562 22 168,584 169,805 86 169,891

F-39 at Dec. 31, New EEC at Jan. 1, 2011 at Dec. 31, New EEC at Dec. 31, 2011 2010 policy restated 2011 policy restated Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 9,403 — 9,403 9,403 — 9,403 Other reserves ...... 10,791 — 10,791 10,348 — 10,348 Retained earnings (loss carried forward) ...... 17,795 (105) 17,690 19,039 (140) 18,899 37,989 (105) 37,884 38,790 (140) 38,650 Non-controlling interests ...... 15,877 — 15,877 15,650 — 15,650 TOTAL SHAREHOLDERS’ EQUITY ...... 53,866 (105) 53,761 54,440 (140) 54,300 Non-current liabilities Long-termloans...... 52,440 — 52,440 48,703 — 48,703 Post-employment and other employee benefits ...... 3,069 — 3,069 3,000 — 3,000 Provisions for risks and charges...... 9,026 127 9,153 7,831 226 8,057 Deferred tax liabilities . . . 11,336 — 11,336 11,505 — 11,505 Non-current financial liabilities ...... 2,591 — 2,591 2,307 — 2,307 Other non-current liabilities ...... 1,244 — 1,244 1,313 — 1,313 79,706 127 79,833 74,659 226 74,885 Current liabilities Short-term loans ...... 8,209 — 8,209 4,799 — 4,799 Current portion of long- termloans...... 2,999 — 2,999 9,672 — 9,672 Tradepayables...... 12,373 — 12,373 12,931 — 12,931 Incometaxpayable...... 687 — 687 671 — 671 Current financial liabilities ...... 1,672 — 1,672 3,668 — 3,668 Other current liabilities . . 8,052 — 8,052 8,907 — 8,907 33,992 — 33,992 40,648 — 40,648 Liabilities held for sale ...... 998 — 998 58 — 58 TOTAL LIABILITIES ...... 114,696 127 114,823 115,365 226 115,591 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 168,562 22 168,584 169,805 86 169,891

F-40 5. Main changes in the scope of consolidation In the two periods under review, the scope of consolidation changed as a result of the following main transactions:

2011 Š disposal, on February 24, 2011, of Compañía Americana de Multiservicios (CAM), which operates in Latin America in the general services sector; Š disposal, on March 1, 2011, of Synapsis IT Soluciones y Servicios (Synapsis), which operates in Latin America in the IT services sector; Š acquisition, on March 31, 2011, of an additional 16.67% of Sociedad Eólica de Andalucía — SEA, which enabled Enel Green Power España to increase its holding from 46.67% to 63.34%, thereby acquiring control as the majority shareholder and permitting full line-by-line consolidation; Š loss of control, as from April 1, 2011, of Hydro Dolomiti Enel as a result of the change in that company’s governance structure, as provided for in the agreements reached between the two shareholders in 2008. Accordingly, the company is consolidated on a proportionate basis (with the stake held by the Enel Group in the company remaining unchanged at 49% both before and after the change in governance arrangements) rather than on a full line-by-line basis; Š acquisition of full control (from joint control) of the assets and liabilities retained by Enel Unión Fenosa Renovables (EUFER) following the break-up of the joint venture between Enel Green Power España and its partner Gas Natural under the agreement finalized on May 30, 2011. As from the date of execution of the agreement, those assets are therefore consolidated on a full line-by-line basis; Š acquisition, on June 9, 2011, of an additional 50% of Sociedade Térmica Portuguesa, as a result of which the Group acquired full control of the company, whereas prior to the acquisition it had exercised joint control. As from that date the company is consolidated on a full line-by-line basis; Š disposal, on June 28, 2011, to Contour Global LP of the entire capital of the Dutch companies Maritza East III Power Holding BV and Maritza O&M Holding Netherland BV. These companies respectively owned 73% of the Bulgarian company Enel Maritza East 3 AD and 73% of the Bulgarian company Enel Operations Bulgaria AD; Š disposal, on November 30, 2011, of 51% of Deval and Vallenergie to Compagnia Valdostana delle Acque, a company owned by the Region of Valle d’Aosta, which already held the remaining 49% of the companies involved; Š acquisition, on December 1, 2011, of 33.33% of SF Energy, a company operating in the hydroelectric generation sector, with the transfer of in-kind and cash consideration by Enel Produzione. With the transfer, the Group acquired joint control of the company (with proportionate consolidation), together with another two partners participating in the investment; Š acquisition, on December 1, 2011, of 50% of Sviluppo Nucleare Italia, in which the Group already held a stake of 50%, which had given it joint control with Electricité de France; as from that date the company has been consolidated on a line-by-line basis.

2012 Š acquisition, on January 13, 2012, of an additional 49% of Rocky Ridge Wind Project, which was already a subsidiary (consolidated line-by-line) controlled through a 51% stake;

F-41 Š acquisition, on February 14, 2012, of the remaining 50% of Enel Stoccaggi, a company in which the Group already held a 50% interest. As from that date the company has been consolidated on a line-by-line basis (previously consolidated proportionately in view of the joint control exercised); Š acquisition, on June 27, 2012, of the remaining 50% of a number of companies in the Kafireas wind power pipeline in Greece, which had previously been included under “Elica 2” and accounted for using the equity method in view of its 30% stake; as from that date the companies have therefore been consolidated on a line-by-line basis; Š acquisition, on June 28, 2012, of 100% of Stipa Nayaa, a Mexican company operating in the wind generation sector; Š disposal, on August 2, 2012, of the entire capital of Water & Industrial Services Company (Wisco), which operates in the waste water treatment sector in Italy. Š disposal, on October 9, 2012, of the entire share capital of Endesa Ireland, a company operating in the generation of electricity; Š acquisition, on October 12, 2012, of the additional 58% of Trade Wind Energy, a company in which the Group had held a stake of 42%; as a result of the purchase, the company is no longer consolidated using the equity method but is consolidated on a line-by-line basis; Š acquisition, on December 21, 2012, of 99.9% of Eólica Zopiloapan, a Mexican company operating in the wind generation sector.

Business combinations in 2012 As regards the acquisitions referred to above that represent a business combination and in compliance with the provision of IFRS 3 (Revised), the following table reports the impact of the initial recognition of those transactions. In particular, for all the business combinations referred to below, the recognition of the difference, where positive, between the cost of the transaction and the fair value, at their respective acquisition dates, of the assets acquired and the liabilities and contingent liabilities assumed has been carried out on a provisional basis under “Goodwill” pending completion of the process of allocating the purchase price as provided for in the accounting standard cited above. For transactions involving a step acquisition of control, the remeasurement at fair value of the interest already held prior to the transaction had a total financial impact of €16 million (essentially in respect of Trade Wind Energy in the amount of €11 million). Kafireas Stipa Eólica Other minor pipeline Nayaa Zopiloapan operations(1) Total Millions of euro Property,plantandequipment...... — 113 105 4 222 Intangible assets ...... — — — 26 26 Cash and cash equivalents ...... 32 — — 17 49 Other current and non-current assets ...... — 18 15 10 43 Current and non-current liabilities ...... (31) (6) (8) (6) (51) Net assets acquired ...... 1 125 112 51 289 Goodwill ...... 57 14 14 17 102 Price of the transaction ...... 58 139 126 68 391 Cash flow impact 2012 ...... 10(2) 120(3) — 63 193

(1) Includes Trade Wind Energy, Enel Stoccaggi, Enel Green Power Sharp and Solar Energy, Sociedad Eólica de Los Lances and other minor companies in Greece.

F-42 (2) Net of price paid for acquisition of 30% of share capital in 2008 and advances paid in 2011 (for a total of €34 million) and the amount still to be paid (€14 million). (3) Net of advances paid in 2011 (€19 million).

6. Risk management Market risk As part of its operations, the Enel Group is exposed to a variety of market risks, notably the risk of changes in interest rates, exchange rates and commodity prices. The nature of the financial risks to which the Group in exposed is such that changes in interest rates cause changes in cash flows associated with interest payments on long-term floating-rate debt instruments, while changes in the exchange rate between the euro and the main foreign currencies have an impact on the value of the cash flows denominated in those currencies and the consolidation value of equity investments denominated in foreign currencies. In compliance with Group policies for managing financial risks, these exposures are generally hedged using over-the-counter derivatives (OTC). Enel also engages in proprietary trading in order to maintain a presence in the Group’s reference energy commodity markets. These operations consist in taking on exposures in energy commodities

F-43 The financial assets and liabilities associated with derivative instruments are classified as: Š cash flow hedge derivatives related to i) hedging the risk of changes in cash flows associated with long-term floating-rate borrowings; ii) hedging the exchange rate risk associated with long-term debt denominated in currencies other than the currency of account or the functional currency in which the company holding the financial liability operates; iii) the provisioning of fuels priced in currencies other than the currency of account or the functional currency in which the company that made the purchase operates; iv) contracts to hedge fluctuations in the prices in the sale of electricity (two-way contracts for differences and other energy derivatives); and v) hedging the risk of changes in the prices of coal and oil commodities; Š fair value hedge derivatives, related to hedging the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk; Š derivatives hedging net investments in foreign operations from the translation risk in respect of the consolidation of equity investments denominated in a foreign currency; Š trading derivatives associated with proprietary trading in commodities or hedging interest and exchange rate risk or commodity risk which it would be inappropriate to designate as cash flow hedges/fair value hedges or which do not meet the formal requirements of IAS 39.

Interest rate risk The twin objectives of reducing the amount of debt subject to changes in interest rates and of containing borrowing costs is pursued with the use of a variety of derivatives contracts, notably interest rate swaps, interest rate options and swaptions. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Interest rate swaps normally provide for the periodic exchange of floating-rate interest flows for fixed-rate interest flows, both of which are calculated on the basis of the notional principal amount. Interest rate options involve the exchange of interest differences calculated on a notional principal amount once certain thresholds (strike prices) are reached. These thresholds specify the effective maximum rate (cap) or the minimum rate (floor) on the debt as a result of the hedge. Hedging strategies can also make use of combinations of options (collars) that establish the minimum and maximum rates at the same time. In this case, the strike prices are normally set so that no premium is paid on the contract (zero cost collars). Such contracts are normally used when the fixed interest rate that can be obtained in an interest rate swap is considered too high with respect to Enel’s expectations for future interest rate developments. In addition, interest rate options are also considered appropriate in periods of uncertainty about future interest rate developments, in order to benefit from any decreases in interest rates. The following table reports the notional amount of interest rate derivatives at December 31, 2012 and December 31, 2011 broken down by type of contract: Notional amount 2012 2011 Millions of euro Interestrateswaps...... 8,294 12,984 Interestrateoptions...... 50 2,700 Total ...... 8,344 15,684

F-44 The following table reports the notional amount and fair value of interest rate derivatives at December 31, 2012 and December 31, 2011, broken down by designation (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 2012 2011 2012 2011

Millions of euro Cash flow hedge derivatives Interestrateswaps.... 6,433 10,007 (686) (613) 5 6 (691) (619) Interest rate options . . . — 1,000 — (8) — — — (8) Fair value hedge derivatives Interestrateswaps.... 83 83 17 14 17 14 — — Trading derivatives Interestrateswaps.... 1,778 2,894 (110) (122) 4 6 (114) (128) Interest rate options . . . 50 1,700 (7) (13) — — (7) (13) Total interest rate swaps ...... 8,294 12,984 (779) (721) 26 26 (805) (747) Total interest rate options ...... 50 2,700 (7) (21) — — (7) (21) TOTAL INTEREST RATE DERIVATIVES .... 8,344 15,684 (786) (742) 26 26 (812) (768)

The following table reports the cash flows expected in coming years from these financial derivatives:

Expected cash flows from interest rate derivatives Fair value Distribution of expected cash flows at Dec. 31, 2012 2013 2014 2015 2016 2017 Beyond Millions of euro CFH on interest rates Positive fair value ...... 5 — (5) — — — — Negativefairvalue...... (691) (198) (177) (108) (63) (47) (185) FVH on interest rates Positive fair value ...... 1733331 5 Negativefairvalue...... —————— — Trading derivatives on interest rates Positive fair value ...... 4321—— — Negativefairvalue...... (121) (51) (20) (8) (7) (6) (52) The amount of floating-rate debt that is not hedged against interest rate risk is the main risk factor that could impact the income statement (raising borrowing costs) in the event of an increase in market interest rates. At December 31, 2012, 17% of net long-term financial debt was floating rate (31% at December 31, 2011). Taking account of cash flow hedges of interest rates considered effective pursuant to the IFRS–EU, 3% of the debt was exposed to interest rate risk at December 31, 2012 (9% at December 31, 2011). Including interest rate derivatives treated as hedges for management purposes but ineligible for hedge accounting, the residual exposure would be 1% (4% at December 31, 2011).

F-45 If interest rates had been 25 basis points higher at December 31, 2012, all other variables being equal, shareholders’ equity would have been €79.4 million higher (€68.3 million at December 31, 2011) as a result of the increase in the fair value of CFH derivatives on interest rates. Conversely, if interest rates had been 25 basis point lower at that date, all other variables being equal, shareholders’ equity would have been €79.4 million lower (€68.3 million at December 31, 2011) as a result of the decrease in the fair value of CFH derivatives on interest rates. An equivalent increase (decrease) in interest rates, all other variables being equal, would have a negative (positive) impact on the income statement in terms of higher (lower) interest expense on the portion of debt not hedged against interest rate risk of about €1 million.

Exchange rate risk Exchange rate risk is mainly generated with the following transaction categories: Š debt denominated in currencies other than the currency of account or the functional currency entered into by the holding company or the individual subsidiaries; Š cash flows in respect of the purchase or sale of fuel or electricity on international markets; Š cash flows in respect of investments in foreign currency, dividends from unconsolidated foreign companies or the purchase or sale of equity investments. In order to minimize this risk, the Group normally uses a variety of over-the-counter (OTC) derivatives such as currency forwards, cross currency interest rate swaps and currency options. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Cross currency interest rate swaps are used to transform a long-term fixed- or floating-rate liability in foreign currency into an equivalent fixed- or floating-rate liability in euros. In addition to having notionals denominated in different currencies, these instruments differ from interest rate swaps in that they provide both for the periodic exchange of cash flows and the final exchange of principal. Currency forwards are contracts in which the counterparties agree to exchange principal amounts denominated in different currencies at a specified future date and exchange rate (the strike). Such contracts may call for the actual exchange of the two amounts (deliverable forwards) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity (non- deliverable forwards). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank. Currency options involve the purchase (or sale) of the right to exchange, at an agreed future date, two principal amounts denominated in different currencies on specified terms (the contractual exchange rate represents the option strike price); Such contracts may call for the actual exchange of the two amounts (deliverable) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity (non-deliverable). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank.

F-46 The following table reports the notional amount of transactions outstanding at December 31, 2012 and December 31, 2011, broken down by type of hedged item: Notional amount 2012 2011 Millions of euro Cross currency interest rate swaps (CCIRSs) hedging debt denominated in currenciesotherthantheeuro...... 13,892 14,442 Currency forwards hedging exchange rate risk on commodities ...... 6,250 7,273 Currency forwards hedging future cash flows in currencies other than euro ...... 1,348 1,232 Currencyswapshedgingcommercialpaper...... 232 240 Currencyforwardshedgingcreditlines ...... 201 201 Total ...... 21,923 23,388

More specifically, these include: Š CCIRSs with a notional amount of €13,892 million to hedge the exchange rate risk on debt denominated in currencies other than the euro (€14,442 million at December 31, 2011); Š currency forwards with a total notional amount of €7,598 million used to hedge the exchange rate risk associated with purchases of fuel, imported electricity and expected cash flows in currencies other than the euro (€8,505 million at December 31, 2011); Š currency swaps with a total notional amount of €232 million used to hedge the exchange rate risk associated with redemptions of commercial paper issued in currencies other than the euro (€240 million at December 31, 2011); Š currency forwards with a total notional amount of €201 million used to hedge the exchange rate risk associated with credit lines in currencies other than the euro (€201 million at December 31, 2011). The following table reports the notional amount and fair value of exchange rate derivatives at December 31, 2012 and December 31, 2011, broken down by designation (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 2012 2011 2012 2011

Millions of euro Cash flow hedge derivatives: –currencyforwards..... 3,458 3,751 (83) 297 4 304 (87) (7) –CCIRSs...... 13,631 13,985 (847) (347) 927 1,297 (1,774) (1,644) Fair value hedge derivatives: –CCIRSs...... 261 457 18 18 23 30 (5) (12) Trading derivatives: –currencyforwards..... 4,573 5,195 35 18 74 153 (39) (135) Total forwards ...... 8,031 8,946 (48) 315 78 457 (126) (142) Total CCIRS ...... 13,892 14,442 (829) (329) 950 1,327 (1,779) (1,656) TOTAL EXCHANGE RATE DERIVATIVES ...... 21,923 23,388 (877) (14) 1,028 1,784 (1,905) (1,798)

F-47 The following table reports the cash flows expected in coming years from these financial derivatives: Expected cash flows from exchange rate derivatives Fair value Distribution of expected cash flows at Dec. 31, 2012 2013 2014 2015 2016 2017 Beyond Millions of euro CFH on exchange rates Positive fair value ...... 931 140 235 90 (32) 137 773 Negativefairvalue ...... (1,861) (183) (286) (360) (208) (67) (340) FVH on exchange rates Positive fair value ...... 23 11 5 12 (3) 2 (2) Negativefairvalue ...... (5) —1111 1 Trading derivatives on exchange rates Positive fair value ...... 74 71 3——— — Negativefairvalue ...... (39) (46) (1) — — — — An analysis of the Group’s debt shows that 29% of medium- and long-term debt (30% at December 31, 2011) is denominated in currencies other than the euro. Taking account of exchange rate hedges and the portion of debt denominated in the currency of account or the functional currency of the Group company holding the debt position operates, the proportion of unhedged debt decreases to about 2% (4% at December 31, 2011), a proportion that is felt would not have a significant impact on the Group’s earnings in the event of a change in market exchange rates. At December 31, 2012, assuming a 10% appreciation of the euro against the foreign currencies involved, all other variables being equal, shareholders’ equity would have been €1,689 million lower (€1,650 million at December 31, 2011) as a result of the decrease in the fair value of CFH derivatives on exchange rates. Conversely, assuming a 10% depreciation of the euro against the foreign currencies involved, all other variables being equal, shareholders’ equity would have been €2,064 million higher (€2,028 million at December 31, 2011) as a result of the increase in the fair value of CFH derivatives on exchange rates.

F-48 As regards electricity sold by the Group, Enel uses fixed-price contracts in the form of bilateral physical contracts and financial contracts (e.g. contracts for differences, VPP contracts, etc.) in which differences are paid to the counterparty if the market electricity price exceeds the strike price and to Enel in the opposite case. The residual exposure in respect of the sale of energy on the spot market not hedged with such contracts is quantified and managed on the basis of an estimation of developments in generation costs. The residual positions thus determined are aggregated on the basis of uniform risk factors that can be hedged in the market. The following table reports the notional amount and fair value of derivative contracts relating to commodities at December 31, 2012 and December 31, 2011. Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 2012 2011 2012 2011

Millions of euro Cash flow hedge derivatives: – derivatives on energy...... 1,847 1,753 19 (54) 23 18 (4) (72) – derivatives on coal . . 1,507 880 (141) (62) — — (141) (62) – derivatives on gas . . . 585 584 (5) (10) — 1 (5) (11) Trading derivatives: – derivatives on energy...... 13,371 18,956 66 40 84 81 (18) (41) – swaps on oil commodities ...... 3,380 8,488 (66) (27) 1,346 1,847 (1,412) (1,874) – futures/options on oil commodities ...... 4,661 1,450 5 (7) 80 30 (75) (37) – derivatives on coal . . 1,724 332 (3) (2) 84 20 (87) (22) – embedded derivatives ...... 126 268 (122) (267) — — (122) (267) TOTAL COMMODITY DERIVATIVES .... 27,201 32,711 (247) (389) 1,617 1,997 (1,864) (2,386)

Cash flow hedge derivatives refer to the physical positions in the underlying and, therefore, any negative (positive) change in the fair value of the derivative instrument corresponds to a positive (negative) change in the fair value of the underlying physical commodity, so the impact on the income statement is equal to zero. The following table shows the fair value of the derivatives and the consequent impact on shareholders’ equity at December 31, 2012 (gross of taxes) that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2012 -10% Scenario +10% Millions of euro Fair value of cash flow hedge derivatives on energy ...... 107 19 (70) Fair value of cash flow hedge derivatives on coal ...... (227) (141) 11 Fair value of cash flow hedge derivatives on gas ...... (35) (5) 26

F-49 The following table shows the fair value of derivatives and the consequent impact on the income statement and shareholders’ equity at December 31, 2012 (gross of taxes), that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2012 -10% Scenario +10% Millions of euro Fairvalueoftradingderivativesonenergy ...... 42 66 172 Fair value of trading derivatives on oil commodities ...... (88) (61) (33) Fairvalueoftradingderivativesoncoal ...... (31) (3) (38) Embedded derivatives relate to contracts for the purchase and sale of energy entered into by Slovenské elektrárne in Slovakia. The market value at December 31, 2012 came to a negative €122 million, composed of: a. an embedded derivative on the EUR/USD exchange rate whose fair value at December 31, 2012 wasanegative€74 million; b. a derivative on the price of gas whose fair value at December 31, 2012 was a negative €48 million. The following tables show the fair value at December 31, 2012, as well as the value expected from a 10% increase or decrease in the underlying risk factors.

Fair value embedded derivative (a) EUR/USD exchange rate Millions of euro Decrease of 10% ...... (79) Scenario at Dec. 31, 2012 ...... (74) Increase of 10% ...... (69)

Fair value embedded derivative (b) Gas price Millions of euro Decrease of 10% ...... (48) Scenario at Dec. 31, 2012 ...... (48) Increase of 10% ...... (48)

F-50 The following table reports the cash flows expected in subsequent years from these financial derivatives on commodities. Fair value Distribution of expected cash flows at Dec. 31, 2012 2013 2014 2015 2016 2017 Beyond Millions of euro Cash flow hedge derivatives Positive fair value ...... 23 152222 — Negativefairvalue ...... (150) (134) (16) — — — — Trading derivatives Positive fair value ...... 1,594 1,443 131767 — Negativefairvalue ...... (1,714) (1,591) (111) (4) (4) (4) —

Credit risk As part of the sale and distribution of electricity and gas to eligible customers, the selection of counterparties is monitored through the assessment of the related credit risk and the request for suitable guarantees and/or security deposits to ensure adequate protection from counterparty default risk. Open positions in financial derivatives are entered into with leading Italian and international financial institutions, diversifying the exposure among different institutions and constantly monitoring their credit ratings. In addition, Enel entered into margin agreements with the leading financial institutions with which it operates that call for the exchange of cash collateral, which significantly mitigates the exposure to counterparty risk. As regards the credit risk associated with the solvency of counterparties in commodities transactions, the Group uses a centralized assessment system that enhances the monitoring and governance of the risk. To manage credit risk even more effectively, for a number of years the Group has carried out non- recourse assignments of receivables, in particular specific segments of the commercial portfolio. More specifically, in 2011 a five-year framework agreement was reached with two leading banks for the ongoing non-recourse assignment of invoiced receivables and receivables to be invoiced in respect of customers in the enhanced protection market in Italy. In 2012, partly in view of the macroeconomic environment, the use of assignments was extended both geographically and to invoiced receivables and receivables to be invoiced of companies operating in other segments of the electricity industry than retail sales (such as, for example, receivables from generation activities, sales of electricity as part of energy management operations, the sale of green certificates or electricity transport services). All of the above transactions are considered as non-recourse transactions for accounting purposes and therefore involved the full derecognition of the corresponding assigned assets from the balance sheet, as the risks and rewards associated with them have been transferred.

Liquidity risk Within the Group, Enel SpA (directly and through its subsidiary Enel Finance International NV) manages the centralized Treasury function, ensuring access to the money and capital markets. The Parent Company meets liquidity requirements primarily through cash flows generated by ordinary operations and drawing on a range of sources of financing. In addition, it manages any excess liquidity as appropriate.

F-51 Underscoring the Enel Group’s continued capacity to access the credit market despite the financial market crisis, in 2012 the Group carried out bond issues with retail investors totaling €3 billion and bond issues within the framework of the Global Medium-Term Notes program totaling €4 billion. At December 31, 2012, the Enel Group had a total of about €10 billion in cash or cash equivalents, of which €2 billion held by Endesa, as well as total committed credit lines of €16 billion, of which €3.2 billion held by Endesa. The limits on the committed credit lines amounted to €21.9 billion (€5.9 billion drawn), of which €3.6 billion held by Endesa (€0.4 billion drawn). In addition, the Group had uncommitted credit lines totaling €1.5 billion (€0.1 billion drawn), of which €1.2 billion held by Endesa (€3 million drawn). Finally, the Group has outstanding commercial paper programs with a maximum ceiling of about €9.3 billion (€2.9 billion drawn), of which €3.3 billion held by Endesa through its subsidiaries (€0.4 billion drawn).

6.1 Derivatives contracts classified under non-current financial assets — €953 million The following table shows the notional amount and fair value of derivative contracts classified under non-current financial assets. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 25 224 5 6 (1) –exchangerates...... 7,227 9,326 890 1,302 (412) – commodities ...... 34 30 7 10 (3) Total ...... 7,286 9,580 902 1,318 (416) Fair value hedge derivatives: –interestrates ...... 83 83 17 14 3 –exchangerates...... 254 262 23 30 (7) Total ...... 337 345 40 44 (4) Trading derivatives: –interestrates ...... 45 75 4 6 (2) –exchangerates...... 92 181 1 13 (12) – commodities ...... 40 64 6 6 — Total ...... 177 320 11 25 (14) TOTAL ...... 7,800 10,245 953 1,387 (434)

At December 31, 2012, the notional amount of the cash flow hedge derivative contracts classified as non-current financial assets came to €7,286 million, with the corresponding fair value of €902 million. The cash flow hedge derivatives are essentially related to transactions hedging the exchange rate risk on bond issues in currencies other than the euro using cross currency interest rate swaps. Developments in the euro exchange rate against the main currencies caused the notional amount and fair value of these derivatives to decline. For some derivatives positions, this change led to the reclassification to “non-current financial liabilities” of a notional amount of €1,274 million in respect of transactions that at December 31, 2011 had been classified under “non-current financial assets”.

F-52 Commodity derivatives include derivatives on energy with a fair value of €7 million classified as cash flow hedges. Trading derivatives essentially regard energy transactions entered into by Endesa (with a fair value of €2 million) and contracts for differences entered into by Enel Produzione (with a fair value of €5 million). The following table reports the fair value balances of derivatives with a positive fair value broken down by type of measurement inputs used. at Dec. 31, 2012 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates ...... 5 — 5 — –exchangerates ...... 890 — 890 — – commodities ...... 7 — 7 — Total ...... 902 — 902 — Fair value hedge derivatives: –interestrates ...... 17 — 17 — –exchangerates ...... 23 — 23 — Total ...... 40—40— Trading derivatives: –interestrates ...... 4 — 4 — –exchangerates ...... 1 — 1 — – commodities ...... 6 1 5 — Total ...... 11110— TOTAL ...... 953 1 952 —

6.2 Derivatives contracts classified under current financial assets — €1,718 million The following table reports the notional amount and fair value of the derivative contracts, grouped by type and designation. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 Change Millions of euro Cash flow hedge derivatives: –exchangerates...... 1,139 3,571 41 299 (258) – commodities ...... 1,693 835 16 9 7 Total ...... 2,832 4,406 57 308 (251) Trading derivatives: –exchangerates...... 2,298 2,604 73 140 (67) – commodities ...... 16,395 5,319 1,588 1,972 (384) Total ...... 18,693 7,923 1,661 2,112 (451) TOTAL ...... 21,525 12,329 1,718 2,420 (702)

F-53 Exchange rate derivatives, whether designated as trading transactions or cash flow hedges, essentially comprise transactions to hedge the exchange rate risk associated with the prices of energy commodities. The decrease in the notional amount and fair value of these derivatives is mainly associated with normal operations. Commodity derivatives regard derivatives on energy classified as cash flow hedges with a fair value of €16 million and trading derivatives with a fair value of €78 million, as well as hedge transactions related to fuels and other commodities classified as trading derivatives, with a fair value of €1,510 million. The following table reports the fair value balances of derivatives with a positive fair value broken down by measurement inputs used, as provided for under the amendments of IFRS 7. at Dec. 31, 2012 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –exchangerates ...... 41 41 — – commodities ...... 16 2 14 — Total ...... 57255— Trading derivatives: –exchangerates ...... 73 73 — – commodities ...... 1,588 303 1,285 — Total ...... 1,661 303 1,358 — TOTAL ...... 1,718 305 1,413 —

6.3 Derivatives contracts classified under non-current financial liabilities — €2,553 million The following table reports the notional amount and fair value of the cash flow hedge, fair value hedge and trading derivatives. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 6,405 6,316 691 600 91 –exchangerates...... 5,955 4,314 1,777 1,495 282 – commodities ...... 282 — 16 — 16 Total ...... 12,642 10,630 2,484 2,095 389 Fair value hedge derivatives: –exchangerates...... 7 11 5 6 (1) Total ...... 71156(1) Trading derivatives: –interestrates ...... 763 698 62 66 (4) –exchangerates...... 30 37 1 3 (2) – commodities ...... 46 166 1 137 (136) Total ...... 839 901 64 206 (142) TOTAL ...... 13,488 11,542 2,553 2,307 246

F-54 At December 31, 2012, the notional amount of derivatives classified under non-current financial liabilities came to €13,488 million, with a corresponding fair value of €2,553 million. Compared with December 31, 2011, these represent increases of €1,946 million and €246 million, respectively. The decline in the fair value of the cash flow hedge derivatives on interest rates is mainly due to the broad decline in the yield curve over the course of the year. New natural hedge transactions on interest rates amounted to about €1,000 million. They were entered into during the year to cover loans granted to the Renewable Energy Division and new private placements by Enel Finance International. Cash flow hedge derivatives on exchange rates essentially regard the hedging (using cross currency interest rate swaps) of bond issues in currencies other than the euro. The fair value reflects the change in the euro against the hedged currencies. The increase in the notional amount is mainly associated with the reclassification noted earlier as well as new CCIRSs in the amount of €398 million. Commodity derivatives classified as cash flow hedges regard hedges on coal and related shipping contracts with a fair value of €16 million. Trading derivatives on commodities include derivatives on energy entered into by Endesa with a fair value of €1 million. The following table reports the fair value of derivatives with a negative fair value on the basis of the measurement inputs used. at Dec. 31, 2012 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates ...... 691 — 691 — –exchangerates ...... 1,777 — 1,777 — – commodities ...... 16 2 14 Total ...... 2,484 2 2,482 — Fair value hedge derivatives: –exchangerates ...... 5 — 5 — Total ...... 5— 5— Trading derivatives: –interestrates ...... 62 62 — –exchangerates ...... 1 1 — – commodities ...... 1 — 1 — Total ...... 64—64— TOTAL ...... 2,553 2 2,551 —

F-55 6.4 Derivatives contracts classified under current financial liabilities — €2,028 million The following table shows the notional amount and fair value of the derivative contracts. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2012 2011 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 3 4,467 — 27 (27) –exchangerates...... 2,768 525 84 156 (72) – commodities ...... 1,930 2,352 134 145 (11) Total ...... 4,701 7,344 218 328 (110) Fair value hedge derivatives: –exchangerates...... — 184 — 6 (6) Total ...... — 184 — 6 (6) Trading derivatives: –interestrates ...... 1,020 3,821 59 75 (16) –exchangerates...... 2,153 2,373 38 132 (94) – commodities ...... 6,781 23,945 1,713 2,104 (391) Total ...... 9,954 30,139 1,810 2,311 (501) TOTAL ...... 14,655 37,667 2,028 2,645 (617)

The substantial decrease in the notional amount of cash flow hedge derivatives on interest rates is entirely attributable to the natural expiry of such transactions in 2012, in particular those hedging the debt entered into by Enel SpA and Enel Finance International in 2007 (a notional of €2,100 million) in respect of the syndicated credit line with an original value of €35 billion, as well as derivatives contracts entered into by Endesa in the amount of €2,350 million. The rise in the fair value of cash flow hedge and trading derivatives on exchange rates, mainly in respect of transactions on energy commodities carried out by Endesa, is essentially attributable to normal operations. Cash flow hedge derivatives on commodities regard energy derivatives with a fair value of €4 million and hedges of gas and coal in the amount of €130 million; trading derivatives include contracts on fuels and other commodities with a fair value of €1,574 million, trading operations in energy with a fair value of €17 million and embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €122 million.

F-56 The following table reports the fair value of derivatives with a negative fair value on the basis of the measurement inputs used, as provided for under the amendments to IFRS 7. at Dec. 31, 2012 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –exchangerates ...... 84 — 84 — – commodities ...... 134 4 130 — Total ...... 218 4 214 — Trading derivatives: –interestrates ...... 59 — 59 — –exchangerates ...... 38 — 38 — – commodities ...... 1,713 1,001 664 48 Total ...... 1,810 1,001 761 48 TOTAL ...... 2,028 1,005 975 48

The balance for Level 1 essentially regards positions in futures on CO2,onBrentlistedonthe Intercontinental Exchange (ICE) and on gas listed on the main natural gas spot markets (NBP, TTF, NCG, PEG, etc.). The balance for level 3 regards the embedded derivative (identified as embedded derivative b in note 6 to these consolidated financial statements) on the price of gas in an energy purchase contract entered into by Slovenské elektrárne in Slovakia. The contract was measured in two parts. In the first part, the market value of the electricity purchased was determined, while in the second part a Monte Carlo simulation is used to determine the value of the contract. The fair value of the contract is equal to the difference between the average values obtained from the simulation and the market value of the electricity acquired. The associated changes in value in 2012 are reported in the following table. Embedded derivatives of Slovenské elektrárne Millions of euro Opening balance at January 1, 2012 ...... 128 (Gains)/Losses in income statement ...... (80) Closing balance at December 31, 2012 ...... 48

The gains and losses recognized through profit or loss for the period include €81 million in respect of the decrease in the operating result and €1 million in respect of higher net financial expense.

7. Segment information The representation of divisional performance and financial position presented here is based on the approach used by management in monitoring Group performance for the two periods being compared. For more information on developments in performance and financial position during the year, please see the appropriate section of the report on operations.

F-57 Segment information for 2012 and 2011 Results for 2012(1) Other, Infra. & Iberia and Renewable eliminations Sales GEM Networks Latin America Int’l Energy and adjustments Total Millions of euro Revenues from third parties . . . 18,170 18,862 3,818 33,708 8,015 2,215 101 84,889 Revenues from other segments...... 181 6,375 4,299 461 688 481 (12,485) — Total revenues ..... 18,351 25,237 8,117 34,169 8,703 2,696 (12,384) 84,889 Totalcosts...... 17,679 24,097 3,979 26,796 7,110 1,009 (12,481) 68,189 Net income/ (charges) from commodity risk management . . . 17 131 — (161) 57 (6) — 38 Depreciation and amortization . . 87 626 925 2,892 453 487 126 5,596 Impairment losses/ Reversals ..... 419 (40) 69 2,663 219 73 4 3,407 Operating income ...... 183 685 3,144 1,657 978 1,121 (33) 7,735 Capital expenditure .. 97 403 1,497 2,497(2) 1,161 1,257 163(3) 7,075

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Does not include €73 million regarding units classified as “Held for sale”. (3) Does not include €1 million regarding units classified as “Held for sale”.

F-58 Results for 2011 restated(1)(2) Other, Infra. & Iberia and Renewable eliminations Sales GEM Networks Latin America Int’l Energy and adjustments Total Millions of euro Revenues from third parties . . . 17,568 17,130 3,212 32,082 7,071 1,927 524 79,514 Revenues from other segments...... 163 6,014 4,248 565 644 612 (12,246) — Total revenues ..... 17,731 23,144 7,460 32,647 7,715 2,539 (11,722) 79,514 Totalcosts...... 17,214 21,167 3,287 25,424 6,051 944 (11,906) 62,181 Net income/ (charges) from commodity risk management . . . 44 232 — 28 (22) (10) — 272 Depreciation and amortization . . 76 595 893 2,749 430 428 99 5,270 Impairment losses/ Reversals ..... 344 (3) 21 445 150 77 23 1,057 Operating income ...... 141 1,617 3,259 4,057 1,062 1,080 62 11,278 Capital expenditure .. 90 431 1,383 2,491(3) 1,450(4) 1,557 82 7,484

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) The figures have been restated to take account of the impact of the change, with retrospective effect, of the accounting policy used for white certificates. (3) Does not include €101 million regarding units classified as “Held for sale”. (4) Does not include €4 million regarding units classified as “Held for sale”.

F-59 Financial position by segment At December 31, 2012 Other, Infra. & Iberia and Renewable eliminations Sales GEM Networks Latin America Int’l Energy and adjustments Total Millions of euro Property, plant and equipment ..... 34 9,833 15,212 38,481 10,085 9,124 559 83,328 Intangible assets ...... 780 687 125 29,037 2,840 2,202 299 35,970 Trade receivables ..... 4,198 3,564 2,149 3,746 773 571 (3,282) 11,719 Other...... 263 2,180 757 2,661 463 294 80 6,698 Operating assets ...... 5,275 16,264 18,243 73,925 14,161(1) 12,191 (2,344) 137,715 Trade payables . . . 3,874 3,765 2,669 5,154 1,058 1,072 (3,688) 13,904 Sundry provisions ..... 216 1,150 1,929 4,766 2,919 149 582 11,711 Other...... 1,886 533 2,943 3,154 1,230 479 (88) 10,137 Operating liabilities ...... 5,976 5,448 7,541 13,074 5,207(2) 1,700 (3,194) 35,752

(1) Of which €218 million regarding units classified as “Held for sale”. (2) Of which €2 million regarding units classified as “Held for sale”.

At December 31, 2011 restated(1) Other, Infra. & Iberia and Renewable eliminations Sales GEM Networks Latin America Int’l Energy and adjustments Total Millions of euro Property, plant and equipment . . . 28 10,000 14,693 37,871 9,528 8,277 444 80,841 Intangible assets ...... 776 715 117 32,073 2,979 2,157 323 39,140 Trade receivables . . 4,072 3,871 1,783 3,959 598 528 (3,218) 11,593 Other ...... 333 1,936 867 2,221 375 242 69 6,043 Operating assets ...... 5,209 16,522 17,460 76,124(2) 13,480 11,204(4) (2,382)(5) 137,617 Trade payables ....4,030 3,560 2,101 4,688 1,024 1,035 (3,504) 12,934 Sundry provisions . . . 172 1,038 1,624 4,512 3,010 144 589 11,089 Other ...... 1,848 506 2,919 2,652 1,220 296 (111) 9,330 Operating liabilities ...6,050 5,104 6,644 11,852(3) 5,254 1,475 (3,026)(6) 33,353

(1) The figures have been restated to take account of the impact of the change, with retrospective effect, of the accounting policy used for white certificates.

F-60 (2) Of which €359 million regarding units classified as “Held for sale”. (3) Of which €32 million regarding units classified as “Held for sale”. (4) Of which €4 million regarding units classified as “Held for sale”. (5) Of which €3 million regarding units classified as “Held for sale”. (6) Of which €4 million regarding units classified as “Held for sale”. The following table reconciles segment assets and liabilities and the consolidated figures. at December 31, at December 31, 2012 2011 restated Millions of euro Total assets ...... 171,656 169,891 Equity investments accounted for using the equity method ...... 1,115 1,085 Non-current financial assets ...... 5,518 6,325 Current financial assets ...... 9,381 10,466 Cash and cash equivalents ...... 9,891 7,015 Deferred tax assets ...... 6,305 6,116 Tax receivables ...... 1,631 1,251 Financial and tax assets of “Assets held for sale” ...... 100 16 Segment assets ...... 137,715 137,617 Total liabilities ...... 118,498 115,591 Long-termloans ...... 55,959 48,703 Non-current financial liabilities ...... 2,553 2,307 Short-term loans ...... 3,970 4,799 Current portion of long-term loans ...... 4,057 9,672 Current financial liabilities ...... 3,138 3,668 Deferred tax liabilities ...... 11,753 11,505 Incometaxpayableandothertaxpayables...... 1,309 1,559 Financial and tax liabilities of “Liabilities held for sale” ...... 7 25 Segment liabilities ...... 35,752 33,353

F-61 Information on the Consolidated Income Statement

Revenues 8.a Revenues from sales and services — €82,699 million 2011 2012 restated Change Millions of euro Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies ...... 71,322 68,308 3,014 Revenuesfromthesaleandtransportofnaturalgastoendusers ...... 4,402 3,624 778 Revenuesfromfuelsales ...... 1,931 994 937 Connection fees for the electricity and gas networks ...... 1,413 1,422 (9) Revenues from the sale of green certificates ...... 579 359 220 Revenuesforcontractworkinprogress...... 21 53 (32) Othersalesandservices ...... 3,031 2,813 218 Total ...... 82,699 77,573 5,126

“Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies” amounted to €71,322 million (€68,308 million in 2011). Among other items, they include €35,151 million in revenues from the sale of electricity to end users (€33,948 million in 2011), €17,802 million in revenues from the sale of electricity to wholesale buyers (€15,808 million in 2011), €5,710 million in revenues from electricity trading activities (€6,653 million in 2011), and €10,636 million in revenues from the transport of electricity (€10,098 million in 2011). “Revenues from the sale and transport of natural gas to end users” came to €4,402 million in 2012 and include €2,473 million in revenues from the sale and transport of natural gas in Italy (€2,099 million in 2011) and €1,929 million in sales of natural gas abroad (€1,525 million in 2011). “Revenues from fuel sales” amounted to €1,931 million in 2012, which includes €1,460 million in sales of natural gas (€641 million in 2011), while the sale of other fuels amounted to €471 million (€353 million in 2011). The table below gives a breakdown of revenues from sales and services by geographical area: 2011 2012 restated Millions of euro Italy ...... 32,695 30,678 Europe–EU...... 35,034 33,552 Europe – non-EU ...... 3,390 2,846 Americas...... 11,006 10,338 Other ...... 574 159 Total ...... 82,699 77,573

F-62 8.b Other revenues and income — €2,190 million 2011 2012 restated Change Millions of euro Costcontributionsandotherfees ...... 99 81 18 Sundry reimbursements ...... 195 184 11 Gains on disposal of assets ...... 6 71 (65) Measurement at fair value after changes in control ...... 16 358 (342) Gains on sale of property, plant and equipment and intangible assets ..... 43 57 (14) Service continuity bonuses ...... 99 158 (59) Proceeds from reimbursement of charges for elimination of Electrical WorkerPensionFund ...... 615 — 615 Otherrevenues ...... 1,117 1,032 85 Total ...... 2,190 1,941 249

“Cost contributions and other fees” regard revenues on certain connections to the electricity and gas networks. “Sundry reimbursements” are accounted for by reimbursements from customers and suppliers in the amount of €136 million (€66 million in 2011) and insurance settlements totaling €59 million (€118 million in 2011). The gain from “measurement at fair value after changes in control” regarded the remeasurement of the net assets already held by the Group prior to the acquisition of an additional equity interest that resulting in obtaining full control of Trade Wind Energy (€11 million), Sociedad Eólica de Los Lances (€4 million) and Enel Stoccaggi (€1 million). Following the transaction that led to the acquisition of the entire share capital of TradeWind Energy, the clause of the agreement that the latter signed with Enel Green Power North America regarding the payment of a success fee as part of acquisition of the Caney River project by Enel Green Power North America was cancelled, with the recogntion of “other revenues” in the amount of €31 million. “Proceeds from reimbursement of charges for elimination of Electrical Worker Pension Fund” regards the authorization of the reimbursement by the Italian Authority for Electricity and Gas with its Resolution no. 157/2012. More specifically, the Resolution gives Enel Distribuzione the full and unconditional right to receive the amount set as reimbursement of the prior-year costs incurred for the elimination of the pension fund, establishing an installment plan (running until 2020) of equal payments, which although it represents the restitution of operating expenses is in fact of a financial nature comparable to a loan made to the system.

Costs 9.a Raw materials and consumables — €46,130 million 2011 2012 restated Change Millions of euro Electricity ...... 30,080 29,045 1,035 Fuelandgas...... 13,272 11,456 1,816 Materials ...... 2,778 2,400 378 Total ...... 46,130 42,901 3,229 – of which capitalized costs for materials ...... (988) (963) (25)

F-63 Purchases of “electricity” comprise those from the Single Buyer in the amount of €5,992 million (€6,096 million in 2011) and purchases from the Energy Markets Operator in the amount of €7,252 million (€6,950 million in 2011). The increase is primarily attributable to bilateral contracts and the rise in the purchase cost of electricity on power exchanges and from OTC counterparties. Purchases of “fuel and gas” include €6,630 million in natural gas purchases (€5,328 million in 2011) and €6,642 million in purchases of other fuels (€6,128 million in 2011).

9.b Services — €15,738 million 2011 2012 restated Change Millions of euro Electricity and gas wheeling ...... 9,819 8,701 1,118 Maintenanceandrepairs...... 1,377 1,369 8 Telephone and postal costs ...... 276 273 3 Communicationservices...... 130 160 (30) ITservices...... 254 242 12 Leases and rentals ...... 569 571 (2) Other...... 3,313 3,124 189 Total ...... 15,738 14,440 1,298

Costs for services came to €15,738 million in 2012, rising with respect to 2011 largely due to an increase in electricity wheeling as a result of the increase in transport rates. The increase in “other” services is mainly due to higher incidental costs associated with the sale of power, including transport capacity rights.

9.c Personnel — €4,860 million 2011 2012 restated Change Millions of euro Wagesandsalaries...... 3,511 3,335 176 Social security contributions ...... 896 870 26 Post-employment benefits ...... 119 120 (1) Othercosts...... 334 (29) 363 Total ...... 4,860 4,296 564 – of which capitalized ...... (759) (748) (11)

Personnel costs amounted to €4,860 million in 2012, an increase of €564 million. The workforce contracted by 1,658, due to the effect of the balance between hirings and terminations (a decrease of 1,527 employees) and the change in the scope of consolidation (a decrease of 131) connected with the disposals of Endesa Ireland and Wisco. In 2011, “other costs” reflected the completion of the early retirement incentive program as well as the positive impact of the agreement reached during the year to eliminate electricity discounts for employees in service in Italy, following which a gain from curtailment of €152 million was recognized.

F-64 For more information on employee benefit plans, please see note 29 below. The table below shows the average number of employees by category compared with the previous year, and the actual number of employees at December 31, 2012. Average number(1) Headcount(1) at Dec. 31, 2012 2011 Change 2012(2) Seniormanagers ...... 1,176 1,219 (43) 1,123 Middlemanagers...... 14,431 13,908 523 14,766 Office staff ...... 40,610 41,292 (682) 40,206 Workers...... 18,393 19,847 (1,454) 17,607 Total ...... 74,610 76,266 (1,656) 73,702

(1) For companies consolidated on a proportionate basis, the headcount corresponds to Enel percentage share of the total. (2) Of which 37 in units classified as “Assets held for sale”.

9.d Depreciation, amortization and impairment losses — €9,003 million 2011 2012 restated Change Millions of euro Depreciation ...... 4,708 4,434 274 Amortization...... 888 836 52 Impairment losses ...... 3,407 1,057 2,350 Total ...... 9,003 6,327 2,676

“Depreciation and amortization” rose by €326 million in 2012 (comprising property, plant and equipment and intangible assets), essentially due the entry into service of a number of generation plants, as well as the reduction of the useful life of the Garoña nuclear plant in Spain, which is set to halt operations in 2013. “Impairment losses” in 2012 mainly regard the impairment of the goodwill recognized on the Endesa-Iberian peninsula cash generating unit in the amount of €2,392 million, on Enel OGK-5 in the amount of €112 million and on Endesa Ireland in the amount of €67 million (after a writedown of €105 million in 2011), with the company being sold during the year. The item also reports writedowns of trade receivables amounting to €588 million (€519 million in 2011) and the recognition of the writedown of the value of the net assets of Marcinelle Energie in the amount of €145 million following adjustment of that value to estimated realizable value. In 2011, the item reporting the impairment recognized on the value of the electricity distribution grid in Argentina (€153 million) and that on the goodwill of Enel Green Power Hellas and Marcinelle Energie (an overall total of €96 million).

F-65 9.e Other operating expenses — €3,208 million 2011 2012 restated Change Millions of euro Provisionsforrisksandcharges ...... 468 47 421 Purchase of green certificates ...... 488 155 333 Purchase of white certificates ...... 324 266 58 Taxesandduties...... 1,225 1,146 79 Other...... 703 641 62 Total ...... 3,208 2,255 953

Other operating expenses totaled €3,208 million, up €953 million, mainly due to an increase of €333 million in costs for the purchase of green certificates and a rise of €398 million in provisions for risks and charges made during the year and the revision of estimates for provisions recognized in prior years.

9.f Capitalized costs — €(1,747) million Capitalized costs consist of €759 million in personnel costs and €988 million in materials costs (compared with €748 million and €963 million, respectively, in 2011).

Net income/(charges) from commodity risk management 10. Net income/(charges) from commodity risk management — €38 million Net income from commodity risk management reflects €219 million in net income realized on positions closed during the year and €181 million in unrealized net charges on open positions in derivatives at December 31, 2012. 2011 2012 restated Change Millions of euro Income Unrealizedonpositionsopenattheendoftheperiod ...... 1,368 1,969 (601) Realizedonpositionsclosedduringtheperiod ...... 220 1,426 (1,206) Total income ...... 1,588 3,395 (1,807) Charges Unrealizedonpositionsopenattheendoftheperiod ...... (1,549) (1,857) 308 Realizedonpositionsclosedduringtheperiod ...... (1) (1,266) 1,265 Total charges ...... (1,550) (3,123) 1,573 NET INCOME/(CHARGES) FROM COMMODITY RISK MANAGEMENT ...... 38 272 (234) – of which trading/non-IFRS-IAS hedge derivatives ...... 88 237 (149) – of which ineffective portion of CFH ...... (3) (2) (1)

F-66 11. Financial income/(expense) — €(3,003) million Financial income 2011 2012 restated Change Millions of euro Total interest and other income from financial assets (current and non-current): – interest income at effective rate on non-current securities and receivables ...... 49 65 (16) – financial income on non-current securities at fair value through profit or loss ...... 2 — 2 – interest income at effective rate on short-term financial investments .... 284 256 28 Total interest and other income from financial assets ...... 335 321 14 Foreign exchange gains ...... 640 729 (89) Income from derivative instruments: – income from cash flow hedge derivatives ...... 218 568 (350) – income from derivatives at fair value through profit or loss ...... 273 516 (243) –incomefromfairvaluehedgederivatives ...... 34 45 (11) Total income from derivative instruments ...... 525 1,129 (604) Income from equity investments ...... 218 44 174 Other income ...... 554 470 84 TOTAL FINANCIAL INCOME ...... 2,272 2,693 (421)

Financial income amounted to €2,272 million, a decrease of €421 million compared with the previous year. “Income from derivative instruments” came to €525 million, of which €380 million realized (€402 million in 2011) and €145 million unrealized (€727 million in 2011). The decrease for the year is mainly associated with developments in interest rates and exchange rates. “Income from equity investments” for 2012 includes the proceeds from the disposal of the stake in Terna (€185 million). “Other income” for 2012 include financial income in the total amount of €180 million recognized as an increase in the financial assets recognized in application of IFRIC 12 in Brazil following the entry into force of the Medida Provisória no. 579/2012, which — in establishing that the payment due to the departing concession holder in restitution of the residual value of the assets serving the concession must be based on the replacement value of those assets — made it necessary to review the estimate of financial assets, which had previously been prudently recognized at their residual purchase cost. In 2011, the item included default interest relating to a decision resolving a tax dispute in the Group’s favor in Spain (€63 million).

F-67 Financial expense 2011 2012 restated Change Millions of euro Interest expense and other charges on financial debt (current and non- current) –interestexpenseonbankloans...... 577 600 (23) – interest on bonds ...... 2,206 1,893 313 –interestexpenseonotherloans ...... 149 259 (110) – financial expense on securities at fair value through profit or loss ...... — 1 (1) –commissionsonunusedlinesofcredit...... 38 21 17 Total interest expense and other charges on financial debt ...... 2,970 2,774 196 Foreign exchange losses ...... 573 1,146 (573) Expense on derivative instruments: – expense on cash flow hedge derivatives ...... 491 450 41 – expense on derivatives at fair value through profit or loss ...... 269 542 (273) –expenseonfairvaluehedgederivatives...... 17 15 2 Total expense on derivative instruments ...... 777 1,007 (230) Accretion of post-employment and other employee benefits ...... 359 281 78 Accretion of other provisions ...... 259 247 12 Charges on equity investments ...... 12 3 9 Other charges ...... 325 259 66 TOTAL FINANCIAL EXPENSE ...... 5,275 5,717 (442)

Financial expense totaled €5,275 million, down €442 million compared with 2011. More specifically, the increase in “interest expense and other charges on financial debt”, as well as the debt refinancing strategy to optimize the financial structure and lengthen the average maturity of the debt of the Group was offset by the decline in “foreign exchange losses”, which are mainly attributable to the debt denominated in currencies other than the euro, which was hedged with corresponding cross currency interest rate swaps. “Expense on derivative instruments” came to €777 million, of which €534 million in realized charges (€623 million in 2011) and €243 million in unrealized charges (€384 million in 2011).

12. Share of income/(expense) from equity investments accounted for using the equity method — €88 million 2011 2012 restated Change Millions of euro Income from associates ...... 123 112 11 Expense on associates ...... 35 15 20 Total ...... 88 96 (8)

For more information on the composition of the balance, please see note 18. In addition, the main differences with respect to the previous year are represented by the improvement in the earnings of LaGeo (up €16 million) and Endesa Gas T&D (up €14 million), the impact of which was more than offset by decline in earnings of a number of small companies in the Renewable Energy Division.

F-68 13. Income taxes — €2,745 million 2011 2012 restated Change Millions of euro Currenttaxes...... 2,898 2,848 50 Adjustmentsforincometaxesrelatedtoprioryears...... (319) (55) (264) Deferred tax liabilities ...... 483 273 210 Deferred tax assets ...... (317) (39) (278) Total ...... 2,745 3,027 (282)

Income taxes for 2012 amounted to €2,745 million, equal to 57.0% of taxable income, compared with 36.3% in 2011. “Adjustments for income taxes related to prior years” for 2012 includes the effects of the recognition of the credit in respect of the reimbursement of IRES and the Robin Hood Tax for the non-deduction of IRAP for personnel expenses established by Decree Law 16/2012 in the total amount of €241 million. “Deferred tax liabilities” reflect an adjustment of about €272 million of the deferred taxes of the Chilean and Slovakian companies following the rise in tax rates in those two countries as from January 1, 2013, while “deferred tax assets” reflect, in addition to the same effect of the rise in tax rates (€138 million), a change connected with the recognition of an increase in provisions that cannot be recognized for tax purposes. The following table reconciles the theoretical tax rate with the effective tax rate. Please note that the estimated tax liability of Group companies outside of Italy is €1,021 million (€924 million in 2011). 2011 2012 restated Millions of euro Incomebeforetaxes...... 4,820 8,350 Theoreticaltaxes ...... 1,326 27.5% 2,296 27.5% Theoretical tax effect on impairment losses on goodwill ...... 707 14.7% 55 0.7% Permanent differences, effect of different foreign tax rates, and minor items...... 116 2.4% (168) -2.0% IRES surtax (Decree Law 112/2008) ...... 495 10.3% 506 6.1% Difference on estimated income taxes from prior years for Italian companies ...... (272) -5.6% (14) -0.2% IRAP...... 373 7.7% 352 4.2% Total ...... 2,745 57.0% 3,027 36.3%

F-69 14. Basic and diluted earnings per share Both metrics are calculated on the basis of the average number of ordinary shares in the period, equal to 9,403,357,795 shares, adjusted for the diluting effect of outstanding stock options (zero euro in both periods). 2011 2012 restated Change Net income from continuing operations pertaining to shareholders of the Parent Company (millions of euro) .... 865 4,113 (3,248) Net income from discontinued operations pertaining to shareholders of the Parent Company (millions of euro) .... — — — Net income pertaining to shareholders of the Parent Company (millions of euro) ...... 865 4,113 (3,248) Numberofordinaryshares ...... 9,403,357,795 9,403,357,795 — Dilutiveeffectofstockoptions ...... — — — Basicanddilutedearningspershare(euro)...... 0.09 0.44 (0.35) Basic and diluted earnings from continuing operations per share(euro) ...... 0.09 0.44 (0.35) Basic and diluted earnings from discontinued operations per share(euro) ...... — — — Please note that existing stock option plans for top management could dilute basic earnings per share in the future. For more information on those plans, please see the appropriate section of these notes. Between the balance sheet date and the date of publication of the financial statements, no events or transactions took place that changed the number of ordinary shares or potential ordinary shares in circulation at the end of the year.

F-70 Information on the Consolidated Balance Sheet

15. Property, plant and equipment — €83,115 million Changes in property, plant and equipment for 2011 and 2012 are shown below: Assets Industrial under and construction Plant and commercial Other Leased Leasehold and Land Buildings machinery equipment assets assets improvements advances Total

Millions of euro Cost...... 565 10,115 138,809 409 1,738 756 202 8,825 161,419 Accumulated depreciation ...... — 5,044 76,488 318 1,236 108 131 — 83,325 Balance at January 1, 2011 restated ...... 565 5,071 62,321 91 502 648 71 8,825 78,094 Capitalexpenditure...... 3 78 1,668 28 69 14 4 4,981 6,845 Assets entering service . . . 9 195 3,876 1 41 181 13 (4,316) — Exchange rate differences ...... (3) (18) (146) — (10) 9 — (55) (223) Change in scope of consolidation ...... (1) (2) 180 — 1 — (1) 130 307 Depreciation...... — (219) (3,981) (16) (119) (52) (21) — (4,408) Impairmentlosses...... (5) (36) (164) — 1 — — (41) (245) Otherchanges ...... 11 201 (332) (12) (118) 270 5 34 59 Remeasurement at fair value after changes in control...... 1 32 96 — — — — — 129 Reclassification from/to “Assets held for sale” . . . — — 36 — — — — (2) 34 Total changes ...... 15 231 1,233 1 (135) 422 — 731 2,498 Cost...... 580 10,564 142,608 417 1,468 1,232 223 9,556 166,648 Accumulated depreciation ...... — 5,262 79,054 325 1,101 162 152 — 86,056 Balance at December 31, 2011 restated ...... 580 5,302 63,554 92 367 1,070 71 9,556 80,592 Capitalexpenditure...... 6 58 1,633 20 68 13 5 4,633 6,436 Assets entering service . . . 10 222 4,828 1 23 3 40 (5,127) — Exchange rate differences ...... 8 29 363 — (3) 8 — 63 468 Change in scope of consolidation ...... 1 — 215 — — — — 6 222 Depreciation...... — (237) (4,261) (21) (105) (58) (18) — (4,700) Impairmentlosses...... (78) 32 (14) — — — — (13) (73) Otherchanges ...... 62 160 242 3 (30) 19 (1) 29 484 Remeasurement at fair value after changes in control...... — — — — — — — 4 4 Reclassification from/to “Assets held for sale” . . . — (4) (314) — — — — — (318) Total changes ...... 9 260 2,692 3 (47) (15) 26 (405) 2,523 Cost...... 589 11,101 149,109 433 1,463 1,275 261 9,151 173,382 Accumulated depreciation ...... — 5,539 82,863 338 1,143 220 164 — 90,267 Balance at December 31, 2012 ...... 589 5,562 66,246 95 320 1,055 97 9,151 83,115 “Plant and machinery” includes assets to be relinquished free of charge with a net carrying amount of €11,002 million (€12,513 million at December 31, 2011), €5,986 million of which related to power generation plants (€7,870 million at December 31, 2011) and €3,688 million to Endesa’s electricity distribution network (€3,749 million at December 31, 2011). The decrease for the year is largely attributable to regulatory changes introduced in Italy with Law 134/2012, under which certain plants of the Group classified at December 31, 2011 as assets to be relinquished free of

F-71 charge serving water diversion concessions for hydroelectric purposes (which expire on December 31, 2029) are now considered assets to be relinquished against consideration. “Leased assets” include certain assets which the Group is using in Spain, France, Greece, Italy, Latin America and Slovakia. More specifically, in Spain the assets relate to a 25-year “tolling” contract for which an analysis pursuant to IFRIC 4 identified an embedded finance lease, under which Endesa has access to the generation capacity of a combined cycle plant for which the toller, Elecgas, has undertaken to transform gas into electricity in exchange for a toll at a rate of 9.62%. The other lease agreements regard wind plants that the Group uses in France (with a term of 15 years), in Greece (with a term of 10 years) and in Italy (with a term of 18 years). In Latin America, the assets relate to leased power transmission lines and plant (Ralco-Charrúa), with a residual term of 11 years on the lease at a 6.5% rate, as well as a number of combined cycle plants in Peru (residual lease term of four years bearing a floating rate). The leased assets in Slovakia essentially relate to the sale and lease back agreements for the V1 nuclear power plant at Jaslovske Bohunice and the hydroelectric plant at Gabcikovo. The leasing arrangements were a necessary condition for the start of the privatization of the Slovakian electricity system. The lease for the V1 plant covers the entire remaining useful life of the asset and the period between the end of generation and the start of the decommissioning process, while the lease for the Gabcikovo plant has a 30-year term as from April 2006. The following table reports the minimum lease payments and the related present value. at Dec. 31, 2011 Minimum lease Present payments value Millions of euro 2012 ...... 90 67 2013-2016 ...... 263 161 After 2016 ...... 750 532 Total ...... 1,103 760

at Dec. 31, 2012 Minimum lease Present payments value Millions of euro 2013 ...... 70 70 2014-2017 ...... 300 198 After 2017 ...... 687 492 Total ...... 1,057 760

F-72 The table below summarizes capital expenditure in 2012 by category. These expenditures, totaling €6,436 million, fell by €409 million compared with 2011. 2012 2011 Millions of euro Power plants: –thermal ...... 952 1,272 – hydroelectric ...... 656 516 –geothermal ...... 214 113 –nuclear...... 802 878 –alternativeenergyresources...... 911 1,194 Total power plants ...... 3,535 3,973 Electricity distribution network ...... 2,782 2,668 Land, buildings and other assets and equipment ...... 119 204 TOTAL ...... 6,436 6,845

Capital expenditure on power plants totaled €3,535 million, a decrease of €438 million on the previous year. This mainly reflects lower investment in conventional thermal plants and nuclear power plants by the Latin America and International Divisions and lower investment in plants using alternative energy resources of the Renewable Energy Division. Capital expenditure for the electricity distribution network totaled €2,782 million, an increase of €114 million year on year. The “change in scope of consolidation” for the period mainly concerned the acquisitions of the Mexican companies Stipa Nayaa and Eólica Zopiloapan, which operate in the wind generation sector (€218 million). “Impairment losses” on property, plant and equipment amounted to €150 million, partially offset by writebacks in respect of the Mercure plant in Italy (€41 million) and of assets in the Balearic Islands (€36 million), recognized following a favorable ruling by the Spanish courts. “Other changes” include, among other items, the effect of the capitalization of interest on specific loans for capital expenditure in the amount of €91 million (€88 million in 2011). “Remeasurement at fair value after changes in control” (€4 million), is attributable to the application of IAS 27 (Revised) to Sociedad Eólica de Los Lances in the amount corresponding to the interest held prior to the acquisition of control. “Reclassification to ‘Assets held for sale’” essentially reports the property, plant and equipment of the Belgian company Marcinelle Energie, which in view of the decisions taken by management meets the requirements of IFRS 5 for classification as assets held for sale.

F-73 16. Intangible assets — €35,970 million Changes in intangible assets for 2011 and 2012 are shown below:

Industrial patents Concessions, Assets and licenses, under intellectual trademarks Service development Development property and similar concession and costs rights rights arrangements Other advances Goodwill Total

Millions of euro Cost...... 13 2,087 17,293 4,611 1,442 305 18,470 44,221 Accumulatedamortization ...... — 1,583 933 1,371 799 — — 4,686 Balance at January 1, 2011 restated ...... 13 504 16,360 3,240 643 305 18,470 39,535 Capitalexpenditure ...... 4 120 27 258 17 206 — 632 Assetsenteringservice ...... 2 187 1 301 30 (521) — — Exchangeratedifferences...... — (3) (377) (264) 4 (1) (21) (662) Change in scope of consolidation...... — (1) 306 — 41 12 30 388 Amortization ...... (2) (230) (320) (215) (92) — — (859) Impairmentlosses...... — — 1 — (15) (1) (96) (111) Otherchanges ...... 4 (1) 66 (374) (77) 317 (46) (111) Remeasurement at fair value after changesincontrol...... — — 229 — — — — 229 Reclassification from/to “Assets heldforsale”...... — — 3 — — — 5 8 Total changes ...... 8 72 (64) (294) (92) 12 (128) (486) Cost...... 30 2,185 17,558 4,412 1,487 317 18,342 44,331 Accumulatedamortization ...... 9 1,609 1,262 1,466 936 — — 5,282 Balance at December 31, 2011 restated ...... 21 576 16,296 2,946 551 317 18,342 39,049 Capitalexpenditure ...... 12 117 5 94 34 365 — 627 Assetsenteringservice ...... (1) 130 19 143 25 (316) — — Exchangeratedifferences...... 1 (2) 93 (300) (5) — 28 (185) Change in scope of consolidation...... 1 — 35 — — 19 113 168 Amortization ...... (4) (250) (289) (213) (128) (4) — (888) Impairmentlosses...... — — 2 — (1) — (2,517) (2,516) Otherchanges ...... (3) 2 11 (202) 5 (63) (3) (253) Remeasurement at fair value after changesincontrol...... — — 1 — — 11 — 12 Reclassification from/to “Assets heldforsale”...... — — (44) — — — — (44) Total changes ...... 6 (3) (167) (478) (70) 12 (2,379) (3,079) Cost...... 41 2,432 17,605 4,196 1,570 329 15,963 42,136 Accumulatedamortization ...... 14 1,859 1,476 1,728 1,089 — — 6,166 Balance at December 31, 2012 ... 27 573 16,129 2,468 481 329 15,963 35,970 The “change in scope of consolidation” for the period, net of the increase in “goodwill”, mainly concerned the value attributed to the customer list acquired (on February 29, 2012 by Endesa Energia) in respect of gas customers in the Madrid metropolitan area, the acquisition of an additional 58% of Trade Wind Energy, a company in which the Group already held an interest of 42% (€18 million), and a number of acquisitions in Italy and Greece by the Renewable Energy Division. “Remeasurement at fair value after changes in control” is attributable to the application of IAS 27 (Revised) to Trade Wind Energy (€11 million) and Enel Stoccaggi (€1 million) in the amount corresponding to the interest held prior to the acquisition of control.

F-74 “Industrial patents and intellectual property rights” relate mainly to costs incurred in purchasing software and open-ended software licenses. The most important applications relate to invoicing and customer management, the development of Internet portals and the management of company systems. Amortization is calculated on a straight-line basis over the asset’s residual useful life (on average between three and five years). “Concessions, licenses, trademarks and similar rights” include costs incurred by the gas companies and the foreign electricity distribution companies to acquire customers. Amortization is calculated on a straight-line basis over the average duration of the relationships with the customers acquired or the concessions. The item includes assets with an indefinite useful life in the amount of €10,622 million (€10,325 million at December 31, 2011). On the basis of the forecasts developed, cash flows for each of the electricity distribution concessions in Spain and various Latin American countries are sufficient to recover the value of the intangible assets. “Service concession arrangements”, recognized pursuant to IFRIC 12, regard certain infrastructure serving electricity distribution concessions in Brazil. “Other changes” regarding that item concern the reclassification (€174 million) carried out following legislative changes in Brazil with the entry into force of the Medida Provisória no. 579/2012, which led to the revision of the valuation of those assets with a concomitant increase in non-current financial assets. “Goodwill” amounted to €15,963 million, a decrease of €2,379 million over the previous year.

at Dec. 31, 2011 at Dec. 31, 2012

Net Change in Exchange Net Accumulated carrying scope of rate Impairment Other Accumulated carrying Cost impairment amount consolidation differences losses changes Cost impairment amount

Millions of euro Endesa ...... 14,259 — 14,259 — — (2,392) — 14,259 (2,392) 11,867 Enel OGK-5 ...... 1,214 — 1,214 — 43 (112) — 1,257 (112) 1,145 Enel Green Power Group(1) ...... 930 (72) 858 112 (9) (13) (6) 1,027 (85) 942 Slovenskéelektrárne.... 697 — 697 — — — — 697 — 697 EnelEnergia...... 579 — 579 — — — — 579 — 579 Enel Distributie Muntenia ...... 552 — 552 — (6) — 2 548 — 548 Enel Energie Muntenia ...... 114 — 114 — (1) — — 113 — 113 RusEnergoSbyt...... 43 — 43 — 1 — 1 45 — 45 Nuove Energie ...... 26 — 26 — — — — 26 — 26 EnelStoccaggi ...... 1 — — — 1 — 1 Marcinelle Energie(2) .... 26 (26) — — — — — 26 (26) — ArticRussia ...... 10 (10) — — — — — 10 (10) — Total ...... 18,450 (108) 18,342 113 28 (2,517) (3)18,588 (2,625) 15,963

(1) Includes Enel Green Power España, Enel Green Power Latin America, Enel Panama, Inelec, Enel Green Power North America, Enel Green Power Hellas, Enel Green Power France, Enel Green Power Romania, Enel Green Power Bulgaria, Enel Green Power Portoscuso and other minor companies. (2) Classified under “Assets held for sale” at December 31, 2012.

F-75 The “change in the scope of consolidation” mainly regards the acquisition of Stipa Nayaa, which operates in the wind generation sector (€14 million), the acquisition of the Mexican company Eólica Zopiloapan (€14 million), the acquisition of additional stakes in a number of Greek companies (including Kafireas pipeline) given the Enel Group full control and Enel Stoccaggi (€1 million). “Impairment losses” are recognized following impairment tests, as discussed below. “Other changes” essentially comprises the change in the valuation at period-end of the debt associated with the acquisition of minority stakes (including Enel Distributie Muntenia and Enel Energie Muntenia) under a number of put options granted to minority shareholders as part of the acquisitions of those companies in 2008. The criteria used to identify the cash generating units (CGUs) were essentially based (in line with management’s strategic and operational vision) on the specific characteristics of their business, on the operational rules and regulations of the markets in which Enel operates and on the corporate organization, including technical and management factors, as well as on the level of reporting monitored by management. The recoverable value of the goodwill recognized was estimated by calculating the value in use of the CGUs using discounted cash flow models, which involve estimating expected future cash flows and applying an appropriate discount rate, selected on the basis of market inputs such as risk-free rates, betas and market risk premiums. Cash flows were determined on the basis of the best information available at the time of the estimate and drawn: Š for the explicit period, from the 10-year business plan approved by the Board of Directors of the Parent Company containing forecasts for volumes, revenues, operating costs, capital expenditure, industrial and commercial organization and developments in the main macroeconomic variables (inflation, nominal interest rates and exchange rates) and commodity prices; Š for subsequent years, from assumptions concerning long-term developments in the main variables that determine cash flows, the average residual useful life of assets or the duration of the concessions. More specifically, the terminal value was calculated as a perpetuity or annuity with a nominal growth rate equal to the long-term rate of growth in electricity and/or inflation (depending on the country and business involved) and in any case no higher than the average long-term growth rate of the reference market. The value in use calculated as described above was found to be greater than the amount recognized on the balance sheet, with the exceptions discussed below. In order to verify the robustness of the value in use of the CGUs, sensitivity analyses were conducted for the main drivers of the values, in particular WACC and the long-term growth rate, the outcomes of which fully supported that value.

F-76 The table below reports the composition of the main goodwill values according to the company to which the CGU belongs, along with the discount rates applied and the time horizon over which the expected cash flows have been discounted.

at Dec. 31, Discount Explicit at Dec. 31, Discount Explicit 2012 rate period 2011 rate period Growth pre-tax of cash Terminal Growth pre-tax of cash Terminal Amount rate(1) WACC(2) flows value(3) Amount rate(1) WACC(2) flows value(3) Millions of euro Endesa-Iberian peninsula(4) ..... 8,607 1.9% 8.0% 10 years Perpetuity 10,999 2.1% 7.5% 10 years Perpetuity Endesa – Latin America ...... 3,260 3.8%(1.0%)(5) 9.5% 10 years Perpetuity 3,260 4.0%(1.2%)(5) 9.4% 10 years Perpetuity Enel OGK-5 ...... 1,145 1.2% 13.3% 10 years Perpetuity 1,214 1.2% 13.0% 10 years Perpetuity Slovenské elektrárne...... 697 1.0% 9.6% 10 years Perpetuity 697 1.2% 9.1% 10 years Perpetuity Enel Romania(6) . . . 661 2.4% 10.3% 10 years Perpetuity 666 2.8% 9.8% 10 years Perpetuity EnelEnergia ..... 579 0.4% 11.5% 10 years 10 years 579 0.8% 10.6% 10 years 10 years EGPEspaña...... 407 2.0% 8.4% 5 years 17 years 406 2.0% 8.3% 5 years 16 years EGP Latin America ...... 287 3.4% 9.9% 5 years 21 years 266 3.5% 9.2% 5 years 30 years EGP North America ...... 108 2.2% 7.7% 5 years 20 years 123 2.1% 7.8% 5 years 21 years EGPHellas ...... 73 2.0% 16.8% 10 years 20 years — 2.2% 15.8% 10 years 26 years RusEnergoSbyt . . . 45 — 16.5% 10 years — 43 1.2% 15.6% 12 years — Nuove Energie .... 26 0.4% 9.2% 10 years 18 years 26 0.8% 9.8% 10 years 19 years EGP Portoscuso and other minor entities ...... 25 2.0% 10.1% 10 years 15 years 20 2.0% 10.9% 10 years 16 years EGPFrance ...... 24 1.9% 7.8% 5 years 18 years 25 2.0% 7.9% 5 years 20 years EGPRomania .... 13 2.4% 11.5% 5 years 20 years 13 2.9% 11.1% 5 years 20 years EGPBulgaria..... 5 3.0% 9.3% 10 years 12 years 5 2.5% 9.2% 10 years 14 years Enel Stoccaggi . . . 1 0.4% 8.8% 10 years 31 years — — — — — Marcinelle Energie...... — — — — — — 1.4% 10.3% 25 years —

(1) Perpetual growth rate of cash flows after explicit period. (2) Pre-tax WACC calculated using the iterative method: the discount rate that ensures that the value in use calculated with pre-tax cash flows is equal to that calculated with post-tax cash flows discounted with the post-tax WACC. (3) The terminal value has been estimated on the basis of a perpetuity or an annuity with a rising yield for the years indicated in the column. (4) Goodwill includes the portion referring to Enel Green Power España. (5) Growth rate equal to 3.8% (4.0% at December 31, 2011) for the first 10 years after the explicit period, followed by a perpetuity at a growth rate of 1.0% (1.2% at December 31, 2011). (6) Includes all companies operating in Romania. At December 31, 2012, the impairment tests found the following impairment losses: Š €2,392 million on the Endesa-Iberian peninsula CGU, to reflect the decrease in the expected cash flows from the assets belonging to the CGU, partly as a result of various measures adopted by the Spanish government in the energy field on different occasions throughout 2012, especially in the 4th Quarter. For more details on these legislative measures, please see the section on legal and regulatory developments in the Iberia and Latin America Division in the report on operations. In addition, the valuation was further affected by the rise in country risk, which is factored into the discount rate used in quantifying value in use; Š €112 million on the Enel OGK-5 CGU, to reflect a decrease in estimated future earnings due to a contraction in the forecast medium-term rate of increase in prices and the current regulatory uncertainty engendered by the possible postponement of the full liberalization of the electricity generation business in Russia.

F-77 At December 31, 2011, the following impairment losses had been recognized: Š the writeoff of the goodwill allocated to the Enel Green Power Hellas CGU (€70 million) as a result of the increase in the country risk factored into the discount rate; Š the writeoff of the goodwill allocated to the Marcinelle Energie CGU (€26 million), which is responsible for operating the CCGT in Belgium. After impairment testing, management wrote down the goodwill on the basis of a possible decrease in the earnings outlook for the business.

17. Deferred tax assets and liabilities — €6,305 million and €11,753 million The following table details changes in deferred tax assets and liabilities by type of timing difference and calculated based on the tax rates established by applicable regulations. The table also reports the amount of deferred tax assets that, where allowed, can be offset against deferred tax liabilities.

Increase/ (Decrease) taken to Change in Exchange Reclassification at Dec. 31, income scope of Other rate from/to “Assets at Dec. 31, 2011 restated statement consolidation changes differences held for sale” 2012

Millions of euro Deferred tax assets: – differences in the value of intangible assets, property, plant and equipment...... 1,181 (18) (25) 659 7 — 1,804 – accruals to provisions for risks and charges and impairment losses with deferred deductibility ...... 2,471 180 — (333) (11) — 2,307 – tax loss carried forward ...... 75 9 1 42 — (11) 116 – measurement of financial instruments . . 659 (11) — (1) 3 — 650 –otheritems ...... 1,730 157 — (445) (14) — 1,428 Total ...... 6,116 317 (24) (78) (15) (11) 6,305 Deferred tax liabilities: – differences on non- current and financial assets...... 9,125 66 (24) (242) 14 (15) 8,924 – measurement of financial instruments . . 346 (4) — (122) — — 220 –otheritems ...... 2,034 421 1 177 (18) (6) 2,609 Total ...... 11,505 483 (23) (187) (4) (21) 11,753

Non-offsettable deferred tax assets ...... 2,311 Non-offsettable deferred tax liabilities ...... 5,199 Excess net deferred tax liabilities after any offsetting ...... 2,560 At December 31, 2012 “deferred tax assets” totaled €6,305 million (€6,116 million at December 31, 2011).

F-78 It should also be noted that no deferred tax assets were recorded in relation to prior tax losses in the amount of €1,193 million because, on the basis of current estimates of future taxable income, it is not certain that such assets will be recovered. More specifically, the losses include those attributable to the holding companies located in the Netherlands (€524 million). Similarly, in view of the possibility of controlling the increase in the shareholders’ equity of Endesa by Enel Energy Europe, no deferred taxes were recognized for the difference (equal to €1,506 million) between the carrying amount and the value for tax purposes of the equity investment. The difference is generated by the deduction in 2009 of the writedown of the investment following the distribution of a special dividend. “Deferred tax liabilities”, which totaled €11,753 million at December 31, 2012 (€11,505 million at December 31, 2011), essentially include the determination of the tax effects of the value adjustments to assets acquired as part of the final allocation of the cost of acquisitions made in the various years and the deferred taxation in respect of the differences between depreciation charged for tax purposes, including accelerated depreciation, and depreciation based on the estimated useful lives of assets. Please note that the adjustment of the deferred taxation of the Chilean and Slovakian companies following the increase in tax rates in the two countries as from January 1,2013, produced an increase (reflected in the income statement) in deferred tax assets and liabilities of €138 million and €272 million, respectively.

18. Equity investments accounted for using the equity method — €1,115 million Investments in associated companies accounted for using the equity method are as follows:

at Dec. 31, 2011 restated Change in at Dec. 31, 2012 scope of Income Other % holding consolidation effect changes % holding Millions of euro SeverEnergia ...... 289 19.6% — (8) 11 292 19.6% Elica2 ...... 168 30.0% (34) — — 134 30.0% EnelReteGas...... 131 19.9% — 2 (8) 125 14.8% LaGeo ...... 91 36.2% — 34 (22) 103 36.2% Chisholm View Wind Project ...... — — 90 — (30) 60 49.0% Prairie Rose Wind ...... — — 125 — (77) 48 49.0% CESI...... 29 41.9% — 6 — 35 42.7% Endesa Gas T&D (formerly Nubia 2000) ...... 29 20.0% — 11 (8) 32 20.0% Tecnatom...... 25 45.0% — 4 — 29 45.0% Elcogas ...... 2 45.3% — 8 (7) 3 45.3% Other ...... 321 (34) 31 (64) 254 Total ...... 1,085 147 88 (205) 1,115

The holdings in SeverEnergia and Enel Rete Gas are accounted for using the equity method in view of the governance mechanisms of those companies, which give Enel a significant influence over company operations. In some cases (including Enel Rete Gas, Chisholm View Wind Project and Endesa Gas T&D), the Group holds call options that under specified conditions and at specified times, would permit an increase in the interest held in the company. In particular, Enel Distribuzione has a call option for 80% of Enel Rete Gas that will vest, subject to certain conditions, as from 2014 (the year in which the 5-year lock-up period applicable to both Enel Distribuzione and F2i Reti Italia expires) until 2018.

F-79 “Change in scope of consolidation” includes the impact of the acquisition of 49% of Chisholm View Wind Project, a company operating in the wind generation sector in Oklahoma, and Prairie Rose Wind. These changes were partially offset by a number of Greek companies (including the Kafireas pipeline) and Trade Wind Energy, which had been accounted for using the equity method but following the acquisition of additional share capital are now consolidated on a full line-by-line basis. The main income statement and balance sheet data for the principal equity investments in associates are reported in the following table. at Dec. 31, 2012 Non-current Current Non-current Current Net income/ assets assets liabilities liabilities Revenues (loss) Millions of euro SeverEnergia...... 3,064 121 1,429 292 128 (40) EnelReteGas ...... 2,514 387 1,750 351 627 47 Elica2...... 9 2 — 1 — — LaGeo...... 243 170 18 49 197 94 ChisholmView...... 278 9 61 111 1 1 Prairie Rose ...... 225 6 47 82 1 1 CESI ...... 54 88 16 46 61 8 Endesa Gas T&D (formerly Nubia 2000) ...... 1,406 140 1,236 139 189 55 Tecnatom ...... 61 70 23 43 111 8 Elcogas...... 95 72 11 150 172 19 at Dec. 31, 2011 restated Non-current Current Non-current Current Net income/ assets assets liabilities liabilities Revenues (loss) Millions of euro SeverEnergia...... 2,483 113 360 784 — (13) EnelReteGas ...... 2,369 270 1,568 219 501 12 Elica2...... 12 5 — 2 — — LaGeo...... 258 66 6 22 118 51 ChisholmView...... — — — — — — Prairie Rose ...... — — — — — — CESI ...... 47 82 17 45 59 9 Endesa Gas T&D (formerly Nubia 2000) ...... 1,128 96 963 113 111 (16) Tecnatom ...... 57 61 33 29 102 5 Elcogas...... 120 103 7 214 148 5

F-80 19. Non-current financial assets — €5,518 million

at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Equityinvestmentsinothercompanies ...... 362 993 (631) Receivables and securities included in net financial debt (see note 26.3) ...... 3,576 3,576 — Derivative contracts (see note 6.1) ...... 953 1,387 (434) Service concession arrangements ...... 594 317 277 Prepaid non-current financial expense ...... 33 52 (19) Total ...... 5,518 6,325 (807)

“Equity investments in other companies” includes investments measured at fair value in the amount of €237 million, while the remainder of €125 million regarded investments whose fair value could not be readily determined and, in the absence of plans to sell the holdings, were therefore recognized at cost less impairment losses. In particular, the fair value of listed companies was determined with reference to the market price of their shares at the end of the period, whereas the fair value of unlisted companies was determined on the basis of what is felt to be a reliable valuation of their significant balance sheet items. The following table breaks down the item discussed above on the basis of the hierarchy of inputs used in determining fair value, as specified in the amendments to IFRS 7:

at Dec. 31, 2012 Fair value Level 1 Level 2 Level 3 Millions of euro Equityinvestmentsinothercompanies...... 237 228 3 6 The following table shows changes in equity investments measured using level 3 inputs:

Millions of euro Balance at January 1, 2012 ...... 7 Net income/(loss) in income statement ...... — Otherchanges ...... (1) Balance at December 31, 2012 ...... 6 More specifically, equity investments in other companies break down as follows:

at Dec. 31, at Dec. 31, 2011 2012 restated % holding % holding Change Millions of euro BayanResources...... 222 10.00% 511 10.00% (289) Terna ...... — — 266 5.12% (266) Echelon ...... 6 7.36% 11 7.36% (5) Other ...... 134 205 (71) Total ...... 362 993 (631)

F-81 The change with respect to 2011 is essentially attributable to a number of disposals, including the stake in Terna, which was sold in early 2012, and a number of minor equity investments in Spain (Euskaltel and Gas de Extremadura Transportista), as well as a reduction in the fair value of Bayan Resources. For more on “receivables and securities included in net financial debt”, please see note 26.3. For more on derivatives classified under non-current financial assets, please see note 6.1. “Service concession arrangements” regard amounts due from the grantor for the construction and/or improvement of infrastructure used to provide public services on a concession basis and recognized in application of IFRIC 12. The change for the year reflects the changes (already discussed in the comments on financial income and intangible assets) in Brazil following the entry into force of Medida Provisória no. 579/2012 in the amount of €354 million.

20. Other non-current assets — €897 million

at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 51 85 (34) Net assets of employee benefit programs ...... 99 97 2 Other receivables ...... 747 330 417 Total ...... 897 512 385

“Receivables due from Electricity Equalization Fund and similar bodies” at December 31, 2012, include only the receivable in respect of the Electricity Equalization Fund claimed by the Italian distribution companies. “Net assets of employee benefit programs” reports assets backing a number of employee benefit plans for Endesa employees, net of actuarial liabilities. The increase in “other receivables” includes €241 million in respect of the reimbursement of IRES and the Robin Hood Tax for the non-deduction of IRAP for personnel expenses established by Decree Law 16/2012 and €142 million in respect of the increase in advances paid to gas suppliers under take-or-pay clauses in long-term contracts, and by amounts advanced in relation to exploration activities in Algeria.

21. Inventories — €3,338 million

at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Raw materials, consumables and supplies: –fuel...... 2,271 2,024 247 –materials,equipmentandotherinventories...... 983 1,032 (49) Total ...... 3,254 3,056 198 Buildingsavailableforsale ...... 79 82 (3) Advances ...... 5 10 (5) TOTAL ...... 3,338 3,148 190

F-82 Raw materials, consumables and supplies consist of fuel inventories to cover the requirements of the generation companies and trading activities, as well as materials and equipment for plant operation, maintenance and construction. The increase for the year is mainly attributable to the rise in gas and € coal inventories. The item also includes CO2 emission allowances in the amount of 384 million at December 31, 2012 (€293 million at December 31, 2011). The buildings available for sale are related to remaining units from the Group’s real estate portfolio and are primarily civil buildings.

22. Trade receivables — €11,719 million

at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Customers: – sale and transport of electricity ...... 8,838 8,756 82 –distributionandsaleofnaturalgas...... 1,570 1,353 217 – other activities ...... 1,243 1,353 (110) Total ...... 11,651 11,462 189 Trade receivables due from associates ...... 29 61 (32) Receivables for contract work in progress ...... 39 47 (8) TOTAL ...... 11,719 11,570 149

Trade receivables from customers are recognized net of allowances for doubtful accounts, which totaled €1,421 million at the end of the year, as compared with an opening balance of €1,661 million. The table below shows the changes in these allowances.

Millions of euro Total at January 1, 2011 ...... 1,349 Accruals...... 519 Utilization ...... (449) Otherchanges ...... 242 Total at December 31, 2011 restated ...... 1,661 Accruals...... 588 Utilization ...... (802) Otherchanges ...... (26) Total at December 31, 2012 ...... 1,421

Trade receivables that had not been written down at December 31, 2012, break down by maturity as follows:

Millions of euro Notpastdue...... 7,735 Past due: –from0to6months...... 2,094 –from6to12months...... 489 –from12to24months...... 515 –morethan24months ...... 886 Total at December 31, 2012 ...... 11,719

F-83 23. Tax receivables — €1,631 million Tax receivables at December 31, 2012 amounted to €1,631 million and are essentially related to income tax credits in the amount of €528 million (€512 million at December 31, 2011), credits for indirect taxes in the amount of €593 million (€406 million at December 31, 2011) and receivables for other taxes and tax surcharges in the amount of €394 million (€225 million at December 31, 2011).

24. Current financial assets — €9,381 million at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Current financial assets included in net financial position (see note 26.4) ...... 7,571 7,954 (383) Derivative contracts (see note 6.2) ...... 1,718 2,420 (702) Other...... 92 92 — Total ...... 9,381 10,466 (1,085)

For more on “current financial assets included in net financial position”, please see note 26.4. For more information on “derivative contracts”, please see note 6.2.

25. Other current assets — €2,262 million at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 936 959 (23) Receivable due from employees ...... 40 41 (1) Receivables due from others ...... 1,092 985 107 Accruedoperatingincomeandprepaidexpenses...... 194 151 43 Total ...... 2,262 2,136 126

“Receivables due from Electricity Equalization Fund and similar bodies” include receivables in respect of the Italian system in the amount of €454 million (€833 million at December 31, 2011) and the Spanish system in the amount of €482 million (€126 million at December 31, 2011). Including the portion of receivables classified as long-term (€51 million), operating receivables due from the Electricity Equalization Fund and similar bodies at December 31, 2012, amounted to €987 million (€1,044 million at December 31, 2011), offset by payables of €3,371 million (€2,782 million at December 31, 2011).

F-84 26. Net financial position and long-term financial receivables and securities — €42,948 million The following table reports the net financial position and long-term financial receivables and securities on the basis of the items on the consolidated balance sheet. at Dec. 31, at Dec. 31, Notes 2012 2011 restated Change Millions of euro Long-termloans ...... 26.1 55,959 48,703 7,256 Short-term loans ...... 26.2 3,970 4,799 (829) Current portion of long-term loans ...... 26.1 4,057 9,672 (5,615) Non-current financial assets ...... 26.3 (3,576) (3,576) — Current financial assets ...... 26.4 (7,571) (7,954) 383 Cash and cash equivalents ...... 26.5 (9,891) (7,015) (2,876) Total ...... 42,948 44,629 (1,681)

Pursuant to the CONSOB instructions of July 28, 2006, the following table reports the net financial position at December 31, 2012, and December 31, 2011, reconciled with net financial debt as provided for in the presentation methods of the Enel Group. at Dec. 31, at Dec. 31, 2012 2011 restated Change Millions of euro Cash and cash equivalents on hand ...... 1,027 1,068 (41) Bank and post office deposits ...... 8,864 5,947 2,917 Securities ...... 42 52 (10) Liquidity ...... 9,933 7,067 2,866 Short-term financial receivables ...... 1,923 1,900 23 Factoring receivables ...... 288 370 (82) Short-term portion of long-term financial receivables ...... 5,318 5,632 (314) Current financial receivables ...... 7,529 7,902 (373) Short-term bank debt ...... (283) (888) 605 Commercialpaper...... (2,914) (3,204) 290 Short-term portion of long-term bank debt ...... (714) (6,894) 6,180 Bonds and preference shares (short-term portion) ...... (3,115) (2,473) (642) Other loans (short-term portion) ...... (228) (305) 77 Other short-term financial payables ...... (773) (707) (66) Total short-term financial debt ...... (8,027) (14,471) 6,444 Net short-term financial position ...... 9,435 498 8,937 Debt to banks and financing entities ...... (13,282) (9,918) (3,364) Bonds and preference shares ...... (41,509) (37,641) (3,868) Otherloans...... (1,168) (1,144) (24) Long-term financial position ...... (55,959) (48,703) (7,256) NET FINANCIAL POSITION as per CONSOB instructions ...... (46,524) (48,205) 1,681 Long-term financial receivables and securities ...... 3,576 3,576 — NET FINANCIAL DEBT ...... (42,948) (44,629) 1,681

There are no transactions with related parties for these items.

F-85 26.1 Long-term loans (including the portion falling due within 12 months) — €60,016 million The aggregate includes long-term liabilities in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within twelve months. The following table shows long-term debt and repayment schedules at December 31, 2012, grouped by loan and interest rate type.

at Dec. 31, Portion at Dec. 31, 2012 2011 falling Maturing in due at Nominal more than Maturing Balance value Balance Current 12 months 2014 2015 2016 2017 Beyond portion Millions of euro Bonds: –listed,fixedrate .....2013-2097 29,882 30,176 25,042 1,960 27,922 490 2,603 3,696 2,486 18,647 – listed, floating rate . . . 2013-2031 6,507 6,558 6,521 157 6,350 1,197 1,476 1,201 409 2,067 – unlisted, fixed rate . . . 2013-2039 6,460 6,466 6,606 758 5,702 1,033 — 116 1,133 3,420 – unlisted, floating rate ...... 2013-2032 1,594 1,594 1,765 59 1,535 61 63 64 65 1,282 Total ...... 44,443 44,794 39,934 2,934 41,509 2,781 4,142 5,077 4,093 25,416 Bank loans: –fixedrate ...... 2013-2046 853 861 900 50 803 52 58 75 81 537 –floatingrate...... 2013-2035 11,814 11,876 10,514 664 11,150 870 738 1,420 4,561 3,561 – use of revolving credit lines ...... 2013-2017 1,329 1,329 5,398 — 1,329 800 124 402 3 — Total ...... 13,996 14,066 16,812 714 13,282 1,722 920 1,897 4,645 4,098 Preference shares:(1) –floatingrate...... 2013 181 181 180 181 ————— — Total ...... 181 181 180 181 ————— — Non-bank loans: –fixedrate ...... 2013-2035 915 915 931 99 816 93 85 102 61 475 –floatingrate...... 2013-2030 481 481 518 129 352 72 42 43 63 132 Total ...... 1,396 1,396 1,449 228 1,168 165 127 145 124 607 TOTAL ...... 60,016 60,437 58,375 4,057 55,959 4,668 5,189 7,119 8,862 30,121

(1) The preference shares issued by Endesa Capital Finance LLC are perpetual, with an option for early redemption at par as from 2013. The balance for bonds is stated net of €633 million relating to the unlisted floating-rate “Special series of bonds reserved for employees 1994-2019”, which the Parent Company holds in portfolio, while Enel.Re holds bonds issued by Enel SpA totaling €30 million.

F-86 The table below reports long-term financial debt by currency and interest rate.

Long-term financial debt by currency and interest rate at Dec. 31, 2012 at Dec. 31, 2011 at Dec. 31, 2012 Current average Current effective Balance Nominal value Balance interest rate interest rate Millions of euro Euro ...... 42,777 43,104 40,608 3.70% 3.92% USdollar...... 8,380 8,402 8,795 5.85% 6.13% Pound sterling ...... 4,102 4,154 4,483 5.80% 5.91% Colombianpeso...... 1,600 1,600 1,299 8.80% 8.80% Brazilian real ...... 839 842 1,090 10.40% 10.70% Chileanpeso/UF ...... 532 547 712 7.00% 8.50% Peruviansol ...... 349 349 356 6.80% 6.80% Russianruble ...... 347 347 335 7.90% 8.13% Japaneseyen...... 304 304 314 2.35% 2.37% Othercurrencies...... 786 788 383 Total non-euro currencies ...... 17,239 17,333 17,767 TOTAL ...... 60,016 60,437 58,375

Long-term financial debt denominated in currencies other than the euro decreased by €528 million. The change is largely attributable to repayments of loans falling due denominated in pounds sterling, dollars and the Latin American currencies, partially offset by new borrowing in Swiss francs, Brazilian reais and Colombian pesos.

Change in the nominal value of long-term debt

at Dec. 31, 2011 at Dec. 31, 2012 Change in own New Exchange rate Nominal value Repayments bonds financing differences Nominal value Millions of euro Bonds ...... 40,188 (2,558) (114) 7,285 (7) 44,794 Bankloans .... 16,871 (9,039) — 6,247 (13) 14,066 Preference shares...... 181 — — — — 181 Otherloans.... 1,449 (223) — 207 (37) 1,396 Total financial debt ...... 58,689 (11,820) (114) 13,739 (57) 60,437

Compared with December 31, 2011, the nominal value of long-term debt at December 31, 2012, increased by €1,748 million, which is the net effect of €11,820 million in repayments, repurchases of €114 million of own bonds, €13,739 million in new loans, and €57 million in exchange rate losses. The main repayments in 2012 concerned bonds in the amount of €2,558 million, bank loans in the amount of €9,039 million and other loans totaling €223 million. More specifically, the main bonds maturing in 2012 included: Š €600 million in respect of a fixed-rate bond for retail investors issued by Enel SpA maturing March 2012;

F-87 Š €400 million in respect of a floating-rate bond for retail investors issued by Enel SpA maturing March 2012; Š €300 million in respect of a floating-rate bond issued by Endesa Capital maturing in July 2012; Š £400 million (consolidated at €477 million) in respect of a fixed-rate bond issued by International Endesa BV maturing in July 2012; Š $230 million (consolidated at €177 million) in respect of a fixed-rate bond issued by International Endesa BV maturing in September 2012; Š €150 million in respect of a floating-rate bond issued by International Endesa BV maturing in November 2012. The main repayments of bank loans in the years included the following: Š €1,933 million in respect of the tranche maturing in 2012 of the 2007 and 2009 Credit Facilities by Enel SpA and Enel Finance International NV; Š €2,000 million in respect of repayments of revolving credit lines by Enel SpA; Š €1,000 million in respect of repayments of revolving credit lines by Enel Finance International NV; Š €1,358 million in voluntary repayments of the tranche falling due in 2014 of the 2009 Credit Facility by Enel SpA and Enel Finance International NV; Š €887 million in respect of floating-rate bank loans of Endesa; Š €1,426 million in respect of revolving credit lines by Endesa. The main loan contracts finalized in 2012 include: Š in February, Enel SpA negotiated a bilateral revolving credit facility in the total amount of €950 million falling due in 2013. In September, the facility was cancelled and Enel SpA negotiated a new bilateral revolving credit facility in the total amount of €1,000 million, falling due in July 2014; Š in February, Endesa entered into long-term loan agreements in the total amount of €150 million; Š in April, Enel Finance International NV agreed: Š a term loan facility agreement with a pool of banks with a total value of €3,200 million falling due in 2017; Š bilateral term loans with a total value of €350 million falling due in 2017; Š in February, Enel SpA renegotiated a bilateral revolving credit facility with a total value of €500 million falling due in July 2014; Š during the year, Emgesa agreed long-term loans with local banks in the total amount of €130 million. The main financing operations carried out in 2012 include: Š in February, Enel SpA issued a retail bond totaling €3,000 million structured into the following tranches: Š €2,500 million fixed-rate 4.875% maturing on February 20, 2018; Š €500 million floating-rate maturing on February 20, 2018; Š in October, Enel Finance International issued a bond for institutional investors totaling €2,000 million structured into the following tranches: Š €1,000 million fixed-rate 4.875% maturing on April 17, 2023;

F-88 Š €1,000 million fixed-rate 3.625% maturing on April 17, 2018; Š in September, Enel Finance International issued a bond for institutional investors totaling €1,000 million, fixed-rate 4.875% maturing on March 11, 2020; Š in June, Ampla issued bonds in Brazilian reais totaling €155 million; Š in December, Emgesa issued bonds in Colombian pesos totaling €213 million; Š in October, Enel Finance International issued a bond in Swiss francs for institutional investors totaling €290 million maturing on December 17, 2018; Š Enel Finance International made private placements totaling €550 million; Š drawings by Enel Finance International on term loan facility agreements and long-term bilateral credit facilities (falling due in 2017) totaling €3,550 million; Š an increase in drawings by Slovenské elektrárne on committed revolving credit facilities in the amount of €250 million; Š the drawing by Enel Distribuzione on a facility granted by Cassa Depositi e Prestiti in the amount of €340 million falling due in 2028; Š the drawing by Enel Distribuzione and Enel Green Power on an European Investment Bank (EIB) loan in the total amount of €680 million; Š drawings by Enel Green Power International on a loan granted by the Danish Export Credit Agency in the amount of €205 million; Š the drawing by Endesa on bank loans in the total amount of €830 million.

F-89 The following table compares the carrying amount and the fair value of long-term debt, including the portion falling due within 12 months, broken down by category. For listed debt instruments, the fair value is given by official prices. For unlisted instruments the fair value is determined using appropriate valuation models for each category of financial instrument and market data at the closing date of the year, including the credit spreads of Enel SpA. at Dec. 31, 2012 at Dec. 31, 2011 Carrying amount Fair value Carrying amount Fair value Millions of euro Bonds: –fixedrate ...... 36,342 38,338 31,648 30,701 –floatingrate...... 8,101 7,891 8,286 7,874 Total ...... 44,443 46,229 39,934 38,575 Bank loans: –fixedrate ...... 853 932 900 851 –floatingrate...... 13,143 12,982 15,912 13,332 Total ...... 13,996 13,914 16,812 14,183 Preference shares: –floatingrate...... 181 181 180 181 Total ...... 181 181 180 181 Non-bank loans: –fixedrate ...... 915 959 931 957 –floatingrate...... 481 476 518 560 Total ...... 1,396 1,435 1,449 1,517 TOTAL ...... 60,016 61,759 58,375 54,456

F-90 The following tables show the changes in long-term loans for the period, distinguishing current amounts from amounts falling due at more than 12 months.

Long-term loans (excluding current portion) Carrying amount at Dec. 31, 2012 at Dec. 31, 2011 Change Millions of euro Bonds: –fixedrate ...... 33,624 30,300 3,324 –floatingrate...... 7,885 7,161 724 Total ...... 41,509 37,461 4,048 Bank loans: –fixedrate ...... 803 807 (4) –floatingrate...... 12,479 9,111 3,368 Total ...... 13,282 9,918 3,364 Preference shares: –floatingrate...... — 180 (180) Total ...... — 180 (180) Non-bank loans: –fixedrate ...... 816 753 63 –floatingrate...... 352 391 (39) Total ...... 1,168 1,144 24 TOTAL ...... 55,959 48,703 7,256

F-91 Current portion of long-term loans Carrying amount at Dec. 31, 2012 at Dec. 31, 2011 Change Millions of euro Bonds: –fixedrate ...... 2,718 1,348 1,370 –floatingrate...... 216 1,125 (909) Total ...... 2,934 2,473 461 Bank loans: –fixedrate ...... 50 93 (43) –floatingrate...... 664 6,801 (6,137) Total ...... 714 6,894 (6,180) Preference shares: –floatingrate...... 181 — 181 Total ...... 181 — 181 Non-bank loans: –fixedrate ...... 99 178 (79) –floatingrate...... 129 127 2 Total ...... 228 305 (77) TOTAL ...... 4,057 9,672 (5,615)

The Group’s main long-term financial debts are governed by covenants containing undertakings by the borrowers (Enel, Endesa and the other Group companies) and in some cases the Parent Company as guarantor that are commonly adopted in international business practice. The main covenants regard the bond issues carried out within the framework of the Global Medium-Term Notes program, loans granted by the EIB and Cassa Depositi e Prestiti, the Credit Agreement 2009 and the €10 billion revolving line of credit agreed in April 2010 and the Term Loan Facility Agreement of €3.2 billion. To date none of the covenants have been triggered. The commitments in respect of the bond issues in the Global Medium-Term Notes program can be summarized as follows: Š negative pledge clauses under which the issuer may not establish or maintain (except under statutory requirement) mortgages, liens or other encumbrances on all or part of its assets to secure any listed bond or bond for which listing is planned unless the same guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities constitute a direct, unconditional and unsecured obligation of the issuer and are issued without preferential rights among them and have at least the same seniority as other present and future bonds of the issuer itself; Š specification of default events, whose occurrence (e.g. insolvency, failure to pay principle or interest, initiation of liquidation proceedings, etc.) constitutes a default; under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) issued by the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least 10% of gross consolidated revenues or total consolidated assets) constitutes a default in respect of the liability in question, which becomes immediately repayable;

F-92 Š early redemption clauses in the event of new tax requirements, which permit early redemption at par of all outstanding bonds. The main covenants governing the loans granted to a number of Group companies by the EIB can be summarized as follows: Š negative pledge clauses, under which Enel undertakes not to establish or grant to third parties additional guarantees or privileges with respect to those already established in the individual contracts by the company or other subsidiaries of the Group, unless an equivalent guarantee is extended equally or pro rata to the loans in question; Š clauses that require the guarantor (whether Enel SpA or banks acceptable to the EIB) to maintain its rating above a specified grade; in the case of guarantees provided by Enel SpA, the Group’s equity may not fall below a specified level; Š material changes clauses, under which the occurrence of a specified event (mergers, spin-offs, disposal or transfer of business units, changes in company control structure, etc.) gives rise to the consequent adjustment of the contract, without which the loan shall become repayable immediately without payment of any commission; Š requirements to report periodically to the EIB; Š requirement for insurance coverage and maintenance of property, possession and use of the works, plant and machinery financed by the loan over the entire term of the agreement; Š contract termination clauses, under which the occurrence of a specified event (serious inaccuracies in documentation presented in support of the contract, failure to repay at maturity, suspension of payments, insolvency, special administration, disposal of assets to creditors, dissolution, liquidation, total or partial disposal of assets, declaration of bankruptcy or composition with creditors or receivership, substantial decrease in equity, etc.) triggers immediate repayment. In 2009 Cassa Depositi e Prestiti granted a loan to Enel Distribuzione that was amended in 2011. The main covenants governing the loan and the guarantee issued by the Parent Company can be summarized as follows: Š a termination and acceleration clause, under which the occurrence of a specified event (such as failure to pay principal or interest installments, breach of contract obligations or occurrence of a substantive prejudicial event, etc.) entitles Cassa Depositi e Prestiti to terminate the loan; Š a clause forbidding Enel or its significant subsidiaries (defined in the contract and the guarantee as subsidiaries pursuant to Article 2359 of the Italian Civil Code or consolidated companies whose turnover or total gross assets are at least 10% of consolidated turnover or consolidated gross assets) from establishing additional liens, guarantees or other encumbrances except for those expressly permitted unless Cassa Depositi e Prestiti gives it prior consent; Š clauses requiring Enel to report to Cassa Depositi e Prestiti both periodically and upon the occurrence of specified events (such as a change in Enel’s credit rating, or breach in an amount above a specified threshold in respect of any financial debt contracted by Enel, Enel Distribuzione or any of their significant subsidiaries). Violation of such obligation entitles Cassa Depositi e Prestiti to exercise an acceleration clause. Š a clause, under which, at the end of each measurement period (half yearly), Enel’s consolidated net financial debt shall not exceed 4.5 times annual consolidated EBITDA.

F-93 The main covenants for the Credit Agreement 2009, the €10 billion revolving line of credit and the €3.2 billion Term Loan Facility Agreement are substantially similar and can be summarized as follows: Š negative pledge clauses under which the borrower (and its significant subsidiaries) may not establish or maintain (with the exception of permitted guarantees) mortgages, liens or other encumbrances on all or part of its assets to secure any present or future financial liability; Š pari passu clauses, under which the payment undertakings constitute a direct, unconditional and unsecured obligation of the borrower and bear no preferential rights among them and have at least the same seniority as other present and future loans; Š change of control clause, which is triggered in the event (i) control of Enel is acquired by one or more parties other than the Italian State or (ii) Enel or any of its subsidiaries transfer a substantial portion of the Group’s assets to parties outside the Group such that the financial reliability of the Group is significantly compromised. The occurrence of one of the two circumstances may give rise to (a) the renegotiation of the terms and conditions of the financing or (b) compulsory early repayment of the financing by the borrower; Š specification of default events, whose occurrence (e.g. failure to make payment, breach of contract, false statements, insolvency or declaration of insolvency by the borrower or its significant subsidiaries, business closure, government intervention or nationalization, administrative proceeding with potential negative impact, illegal conduct, nationalization and government expropriation or compulsory acquisition of the borrower or one of its significant subsidiaries) constitutes a default. Unless remedied within a specified period of time, such default will trigger an obligation to make immediate repayment of the loan under an acceleration clause; Š under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) of the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least equal to a specified percentage (10% of gross consolidated revenues or total consolidated assets)) constitutes a default in respect of the liabilities in question, which become immediately repayable; Š periodic reporting requirements. The €3.2 billion Term Loan Facility Agreement (signed by Enel Finance International NV and guaranteed by Enel SpA) also contains the following covenant: Š a gearing clause, under which, at the end of each measurement period (half yearly), the Enel Group’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA. The Credit Agreement 2009 also provides for the following covenants: Š mandatory early repayment clauses, under which the occurrence of a specified event (e.g. the issue of instruments on the capital market, new bank loans, stock issues or asset disposals) obliges the borrower to repay the related funds in advance at specific declining percentages based on the extent to which the line of credit has been drawn; Š a “subsidiary financial indebtedness” clause, under which the net aggregate amount of the financial debt of Enel’s subsidiaries (with the exception of the debt of “permitted subsidiaries”) must not exceed 20% of total gross consolidated assets. As from 2012, the Credit Agreement 2009 will be subject to the following covenants: Š a gearing clause, under which, at the end of each measurement period (half yearly), the Enel Group’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA.

F-94 Š an interest cover clause, under which, at the end of each measurement period (half yearly), the ratio of annual consolidated EBITDA to net consolidated interest expense shall not be less than 4. The undertakings in respect of the bond issues carried out by Endesa Capital under the Global Medium-Term Notes program can be summarized as follows: Š cross-default clauses under which debt repayment would be accelerated in the case of failure to make payment (above specified amounts) on any financial liability of Endesa or Endesa Capital that is listed or could be listed on a regulated market; Š negative pledge clauses under which the issuer may not establish mortgages, liens or other encumbrances on all or part of its assets to secure any financial liability that is listed or could be listed on a regulated market, unless an equivalent guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities and guarantees have at least the same seniority as all other present and future unsecured and unsubordinated securities issued by Endesa Capital or Endesa. Finally, the loans granted to Endesa, International Endesa BV and Endesa Capital do not contain cross-default clauses regarding the debt of subsidiaries in Latin America. Undertakings in respect of project financing granted to subsidiaries regarding renewables and other subsidiaries in Latin America contain covenants commonly adopted in international business practice. The main commitments regard clauses pledging all the assets assigned to the projects in favor of the creditors. A residual portion of the debt of Enersis and Endesa Chile (both controlled indirectly by Endesa) is subject to cross-default clauses under which the occurrence of a default event (failure to make payment or breach of other obligations) in respect of any financial liability of a subsidiary of Enersis or Endesa Chile constitutes a default in respect of the liability in question, which becomes immediately repayable. In addition, many of these agreements also contain cross-acceleration clauses that are triggered by specific circumstances, certain government actions, insolvency or judicial expropriation of assets. In addition to the foregoing, a number of loans provide for early repayment in the case of a change of control over Endesa or the subsidiaries.

26.2 Short-term loans — €3,970 million At December 31, 2012 short-term loans amounted to €3,970 million, a decrease of €829 million compared with December 31, 2011. They break down as follows. at Dec. 31, 2012 at Dec. 31, 2011 restated Change Carrying Carrying Carrying amount Fair value amount Fair value amount Fair value Millions of euro Short-term amounts due to banks...... 283 283 888 888 (605) (605) Commercialpaper ...... 2,914 2,914 3,204 3,204 (290) (290) Cash collateral and other financing on derivatives . . . 691 691 650 650 41 41 Other short-term financial payables...... 82 82 57 57 25 25 Short-term financial debt .. 3,970 3,970 4,799 4,799 (829) (829)

F-95 Short-term amounts due to banks totaled €283 million. The payables represented by commercial paper relate to issues outstanding at the end of December 2012 in the context of the €6,000 million program launched in November 2005 by Enel Finance International and guaranteed by Enel SpA, which was renewed in April 2010, as well as the €3,309 million program of Endesa Internacional BV (now Endesa Latinoamérica) and Enersis. At December 31, 2012, the issues in respect of the above programs totaled €2,914 million, of which €2,555 million for Enel Finance International and €359 million for Endesa Latinoamérica.

26.3 Non-current financial assets included in debt — €3,576 million at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Securities held to maturity ...... 130 68 62 Financial investments in funds or portfolio management products at fair value through profit or loss ...... 12 10 2 Securities available for sale ...... 4 2 2 Other financial receivables ...... 3,430 3,496 (66) Total ...... 3,576 3,576 —

“Securities held to maturity” are bonds. The following table reports the breakdown of the first three items on the basis of the measurement inputs used in determining fair value, as provided for under the amendments to IFRS 7. at Dec. 31, 2012 Fair value Level 1 Level 2 Level 3 Millions of euro Securities held to maturity ...... 130 130 — — Financial investments in funds or portfolio management products at fair value through profit or loss ...... 12 12 — — Securities available for sale ...... 4 — — 4 More specifically, changes in Level 3 securities are shown in the following table. Millions of euro Balance at January 1, 2012 ...... — Profit/(loss) in income statement ...... — Subscriptions...... 4 Balance at December 31, 2012 ...... 4

The securities classified in Level 3 are promissory notes issued in 2012. At December 31, 2021, “other financial receivables” include, among other things: Š receivables in respect of the State Decommissioning Fund of Slovakia in the amount of €653 million (€568 million at December 31, 2011); Š receivables in respect of the Electricity Equalization Fund in the amount of €434 million for reimbursement of the extraordinary costs incurred for the early replacement of electromechanical meters with digital meters;

F-96 Š receivables in respect of the reimbursement established by the Italian Authority for Electricity and Gas with Resolution no. 157/2012 of costs incurred with the termination of the Electrical Worker Pension Fund in the amount of €504 million. For more details, please see note 8.b.; Š the receivable of the Argentine generation companies in respect of the wholesale electricity market deposited with the FONINVEMEM (Fondo Nacional de Inversión Mercado Eléctrico Mayorista) in the amount of €281 million (€202 million at December 31, 2011). The sum was for the construction of three combined cycle plants, two of which were completed in 2010, and will be reimbursed to the generation companies within 120 months of the entry into service of those plants. The loans earn interest at an annual rate of Libor +1%.

26.4 Current financial assets included in debt — €7,571 million at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Short-term portion of long-term financial receivables .... 5,011 5,632 (621) Receivables for factoring advances ...... 288 370 (82) Securities: – securities available for sale ...... 42 51 (9) – securities held to maturity ...... — 1 (1) Cashcollateral...... 1,402 1,076 326 Other financial receivables ...... 828 824 (4) Total ...... 7,571 7,954 (383)

“Short-term portion of long-term financial receivables” consists of the financial receivable in respect of the Spanish electricity system deficit in the amount of €4,839 million (€5,379 million at December 31, 2011). The change for the period essentially reflects new receivables accrued in 2012 and collections received (€3,059 million including the effects of reimbursements in respect of extra- peninsular generation, of which €2,674 million through the assignment of the receivables to the special securitization fund as established by the Spanish government). The following table provides a breakdown of “securities” on the basis of the measurement inputs used in determining fair value, as provided for under the amendments to IFRS 7. Fair value at Dec. 31, 2012 Level 1 Level 2 Level 3 Millions of euro Securities available for sale ...... 42 39 — 3 More specifically, the following table breaks down changes in Level 3 securities. Millions of euro Balance at January 1, 2012 ...... — Profit/(Loss) to income statement ...... — Subscriptions...... 3 Balance at Dec. 31, 2012 ...... 3

F-97 26.5 Cash and cash equivalents — €9,891 million Cash and cash equivalents, detailed in the table below, are not restricted by any encumbrances, apart from €194 million (€160 million at December 31, 2011) primarily in respect of deposits pledged to secure transactions. at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Bank and post office deposits ...... 8,864 5,947 2,917 Cash and cash equivalents on hand ...... 1,027 1,068 (41) Total ...... 9,891 7,015 2,876

27. Assets and liabilities held for sale — €317 million and €8 million Changes in assets held for sale during the year are reported in the following table: Reclassification from/to current Disposals and at Dec. 31, 2011 and non-current change in scope Other restated assets of consolidation changes at Dec. 31, 2012 Property, plant and equipment ...... 249 315 (249) (101) 214 Intangible assets ...... 1 44 (1) (44) — Goodwill ...... 91 — (24) (67) — Deferred tax assets ...... 1 11 (1) — 11 Non-current financial assets ...... 9 — 80 — 89 Cash and cash equivalents ...... 5 — (6) 1 — Inventories, trade receivables and other current assets ...... 25 4 (26) — 3 Total ...... 381 374 (227) (211) 317

“Assets held for sale” amounted to €317 million at December 31, 2012. They essentially include the assets of Marcinelle Energie and other assets of smaller companies. “Reclassification from/to current and non-current assets” regards Marcinelle Energie, for which negotiations for its disposal are currently under way. “Other changes” reports the impairment loss on the assets of Marcinelle Energie in the amount of €145 million and the goodwill of Endesa Ireland in the amount of €67 million. At December 31, 2011, the item reported certain assets held by Endesa Ireland (€360 million), as well as the assets of Wisco. The sale of those assets was completed in 2012. “Liabilities held for sale” amounted to €8 million at December 31, 2012. They comprised the liabilities of Marcinelle Energie and other certain liabilities of smaller companies. At December 31, 2011, the item reported certain liabilities of Endesa Ireland in the amount of €54 million.

F-98 Changes in liabilities held for sale during the year are as follows: Reclassification from current Disposals and at Dec. 31, 2011 and non-current change in scope restated liabilities of consolidation Other changes at Dec. 31, 2012 Millions of euro Long-termloans .... 1 — (1) — — Post-employment and other employee benefits ...... 1 — (1) — — Provisions for risks andcharges ...... 30 — (30) — — Deferred tax liabilities ...... 19 21 (18) (15) 7 Short-term loans .... 1 — (1) — — Trade payables and other current liabilities ...... 6 1 (6) — 1 Total ...... 58 22 (57) (15) 8

The decrease in all items of assets and liabilities held for sale compared with December 31, 2011, essentially reflects assets and liabilities classified as held for sale in 2011 and then disposed of in 2012.

28. Shareholders’ equity — €53,158 million 28.1 Equity attributable to the shareholders of the Parent Company — €36,771 million Share capital — €9,403 million At December 31, 2012 (as at December 31, 2011), the share capital of Enel SpA — considering that no options were exercised as part of stock option plans in 2012 — amounted to €9,403,357,795 fully subscribed and paid up, represented by 9,403,357,795 ordinary shares with a par value of €1.00 each. At the same date, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, no shareholders held more than 2% of the total share capital, apart from the Ministry for the Economy and Finance, which holds 31.24%, and BlackRock Inc., which holds a 3.33% stake, held as at November 8, 2012 for asset management purposes.

Other reserves — €9,109 million Share premium reserve — €5,292 million Legal reserve — €1,881 million The legal reserve is formed of the part of net income that, pursuant to Article 2430 of the Italian Civil Code, cannot be distributed as dividends.

Other reserves — €2,262 million These include €2,215 million related to the remaining portion of the value adjustments carried out when Enel was transformed from a public entity to a joint-stock company. Pursuant to Article 47 of the Uniform Tax Code (Testo Unico Imposte sul Reddito), this amount does not constitute taxable income when distributed.

F-99 Reserve from translation of financial statements in currencies other than euro — €92 million The decrease in this aggregate for the year is attributable to the appreciation of the functional currency against the foreign currencies used by subsidiaries.

Reserve from measurement of financial instruments — €(1,253) million This item includes net losses recognized directly in equity resulting from the measurement of cash flow hedging derivatives, as well as net unrealized losses arising in respect of the fair value measurement of financial assets.

Reserve from transactions in non-controlling interests — €78 million The reserve includes the gain on the acquisition from third parties of additional interests in companies already controlled in Latin America (Ampla Energia e Serviços, Ampla Investimentos e Serviços and Electrica Cabo Blanco).

Reserve from equity investments accounted for using the equity method — €8 million The reserve reports the share of comprehensive income to be recognized directly in income for companies accounted for using the equity method.

F-100 The table below shows the changes in gains and losses recognized directly in other comprehensive income, including non-controlling interests, with specific reporting of the related tax effects. at Dec. 31, 2011 restated Change at Dec. 31, 2012

Of which Gains/(Losses) Of which Of which shareholders of Of which recognized Released shareholders of Of which shareholders of Of which Parent non-controlling in equity to income Parent non-controlling Parent non-controlling Total Company interests for the year statement Taxes Total Company interests Total Company interests

Millions of euro Reserve from translation of financial statements in currencies other than euro...... 609 120 489 73 — — 73 (28) 101 682 92 590 Reserve from measurement of financial instruments...... (174) (49) (125) (1,282) (53) 159 (1,176) (1,204) 28 (1,350) (1,253) (97) Share of OCI of equity investments accounted for using the equity

F-101 method ...... 15 15 — (7) — — (7) (7) — 8 8 — Total gains/(losses) recognized in equity ... 450 86 364 (1,216) (53) 159 (1,110) (1,239) 129 (660) (1,153) 493 Capital management The Group’s objectives for managing capital comprise safeguarding the business as a going concern, creating value for stakeholders and supporting the development of the Group. In particular, the Group seeks to maintain an adequate capitalization that enables it to achieve a satisfactory return for shareholders and ensure access to external sources of financing, in part by maintaining an adequate rating. In this context, the Group manages its capital structure and adjusts that structure when changes in economic conditions so require. There were no substantive changes in objectives, policies or processes in 2012. To this end, the Group constantly monitors developments in the level of its debt in relation to equity. The situation at December 31, 2012 and 2011 is summarized in the following table. at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Non-current financial position ...... 55,959 48,703 7,256 Net current financial position ...... (9,435) (498) (8,937) Non-current financial receivables and long-term securities ...... (3,576) (3,576) — Net financial debt ...... 42,948 44,629 (1,681) Equity attributable to the shareholders of the Parent Company...... 36,771 38,650 (1,879) Non-controlling interests ...... 16,387 15,650 737 Shareholders’ equity ...... 53,158 54,300 (1,142) Debt/equity ratio ...... 0.81 0.82 (0.01)

28.2 Non-controlling interests — €16,387 million The following table reports the composition of non-controlling interests by division. at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro IberiaandLatinAmerica...... 11,747 11,528 219 International...... 2,273 1,958 315 RenewableEnergy...... 2,162 1,952 210 GenerationandEnergyManagement...... 205 212 (7) Total ...... 16,387 15,650 737

29. Post-employment and other employee benefits — €3,063 million The Group provides its employees with a variety of benefits, including termination benefits, additional months’ pay for having reached age limits or eligibility for old-age pension, loyalty bonuses for achievement of seniority milestones, supplemental retirement and healthcare plans, residential electricity discounts and similar benefits. More specifically: Š for Italy, the item “pension benefits” regards estimated accruals made to cover benefits due under the supplemental retirement schemes of retired executives and the benefits due to personnel under law or contract at the time the employment relationship is terminated. In addition, as from December 2012, the item also includes the supplementary post-employment benefits paid to employees of the Group’s wholly-owned Italian subsidiaries who, if they meet

F-102 certain requirements, terminate their employment relationship four years earlier than the pension age established under current labor law. For companies abroad it covers post- employment benefits; Š the item “electricity discount” comprises a number of benefits regarding residential electricity supply. Until last year the discount was granted to current and retired employees, but, following an agreement with the unions, has now been replaced by other forms of remuneration for current employees and therefore remains in effect only for retired employees; Š the item “health insurance” reports benefits for current or retired employees covering medical expenses; Š “other benefits” comprise liabilities in respect of defined-benefit plans not included in the previous items. The table below reports the change for the year in the defined-benefit obligation and the fair value of plan assets, as well as a reconciliation of the defined-benefit obligation, net of assets, with the carrying amount of the obligation recognized as at December 31, 2012 and December 31, 2011. 2012 2011

Pension Electricity Health Other Pension Electricity Health Other benefits discount insurance benefits Total benefits discount insurance benefits Total

Millions of euro Changes in defined-benefit obligation Defined benefit obligation at the beginningoftheyear...... 2,416 1,500 250 192 4,358 3,175 1,750 225 119 5,269 Currentservicecost...... 16 5 1 34 56 25 14 2 34 75 Interestcost...... 147 68 17 10 242 154 66 14 8 242 Benefitspaid ...... (178) (88) (16) (42) (324) (207) (83) (17) (35) (342) Pastservicecost ...... 970 — — 11 981 ————— Otherchanges ...... 26 3 13 — 42 (538) (162) — (7) (707) Curtailments/settlements ...... (2) — — (3) (5) 25 3 1 71 100 Actuarial(gains)/losses...... 324 194 (22) 42 538 (161) (88) 32 3 (214) Foreign exchange (gains)/losses . . (68) — (7) 1 (74) (57) — (7) (1) (65) Defined-benefit obligation at the end of the year ...... 3,651 1,682 236 245 5,814 2,416 1,500 250 192 4,358 Changes in plan assets Fair value at the beginning of the year ...... 1,094 — — — 1,094 1,575 — — — 1,575 Expectedreturnonplanassets.... 88 — — — 88 93 — — — 93 Actuarialgains/(losses)...... 156 — — — 156 (75) — — — (75) Contributions paid by company . . . 132 88 16 22 258 153 83 17 20 273 Curtailments/settlements ...... — — — — — (418) — — — (418) Otherchanges ...... (3) — — — (3) 21 — — — 21 Foreign exchange (gains)/losses . . (68) — — — (68) (48) — — — (48) Benefitspaid ...... (178) (88) (16) (22) (304) (207) (83) (17) (20) (327) Fair value at the end of the year ...... 1,221 — — — 1,221 1,094 — — — 1,094 Reconciliation with carrying amount ...... Netdefined-benefitobligation.... 2,430 1,682 236 245 4,593 1,322 1,500 250 192 3,264 Net unrecognized (gains)/losses . . 1,199 288 5 38 1,530 123 95 35 11 264 Carrying amount of defined- benefit obligation ...... 1,231 1,394 231 207 3,063 1,199 1,405 215 181 3,000 The change in respect of past service cost regards the establishment at the end of 2012, in Italy, of a new plan, the defined benefits of which also accrue for service before the establishment of the new plan. The plan is dependent on future service to be performed and provides for benefits for a maximum of 48 months as from termination of the employment relationship, which under the rules of

F-103 the plan is only permitted for personnel with a contribution history/age four years less than the normal pensionable age set under current labor legislation in Italy for employees who meet the requirements to participate in the plan. The employees of the foreign companies included in the framework agreement of October 25, 2000 in Spain participate in a specific defined-contribution pension plan and, in cases of disability or death of employees in service, a defined-benefit plan which is covered by appropriate insurance policies. In addition, the company has certain obligations to retired ex-workers, mainly concerning the supply of electricity. Outside Spain, defined-benefit pension plans are also in force, notably in Brazil. The obligation recognized at the end of the year is reported net of the fair value of the plan assets (where this is not greater than that of the related liabilities), which are attributable entirely to Endesa, in the amount of €1,221 million at December 31, 2012, and of the net unrecognized actuarial losses in the amount of €1,530 million at the same date. As regards plan assets, which at December 31, 2012 amounted to €1,320 million (of which €1,221 million adjusting the liability for pension benefits and €99 million recognized under non- current financial assets), 49% of the market value of such assets regards assets located in Spain (52% at December 31, 2011) and 51% regards assets in Brazil (48% at December 31, 2011). The assets break down as follows: 2012 2011 % composition Shares...... 19 22 Fixed-income securities ...... 72 70 Propertyandother ...... 9 8 Total ...... 100 100

At December 31, 2012, shares and fixed-income securities included shares or bonds issued by Endesa Group companies in the amount of €7 million (€17 million at December 31, 2011). The expected return on the assets was estimated on the basis of forecasts for their performance in the main equity and fixed-income markets and using a weighting for the various asset classes similar to that adopted the previous year. The real return for 2012 was equal to 8.84% in Spain and 18.89% in other countries (1.34% in Spain and 13.47% in other countries in 2011).

F-104 The following table reports the impact on the income statement of the actuarial estimate of employee benefit plans. 2012 2011

Pension Electricity Health Other Pension Electricity Health Other benefits discount insurance benefits Total benefits discount insurance benefits Total

Millions of euro Current service cost...... 16 5 1 34 56 25 14 2 34 75 Interestcost...... 147 68 17 10 242 154 66 14 8 242 Expected return on planassets...... (88) — — — (88) (93) — — — (93) Amortization of actuarial (gains)/ losses ...... 14 — 3 20 37 54 26 22 2 104 (Gains)/Losses for curtailment/ settlement of plans...... — — — (1) (1) (18) (152) — (5) (175) Pastservicecost..... 39 — — 3 42 ————— Otherchanges...... 4 — — — 4 4———4 Total ...... 132 73 21 66 292 126 (46) 38 39 157

Employee benefit expenses recognized in 2012 came to €292 million (€157 million in 2011), of which €154 million in respect of net accretion cost recognized under financial expense (€149 million in 2011) and €138 million in respect of service costs recognized under personnel costs. The main actuarial assumptions used to calculate the liabilities in respect of employee benefits and the plan assets, which are consistent with those used the previous year, are set out in the following table. 2012 2011

Iberian Latin Iberian Latin Italy peninsula America Other Italy peninsula America Other

Discount rate ...... 1.60%-3.20% 1.22%-3.74% 5.50%-9.80% 4.20%-7.00% 4.70% 2.74%-4.66% 5.50%-10.50% 5.25%-8.64% Rate of wage increases ...... 2.00%-4.00% 2.30% 0.00%-7.61% 3.00%-6.00% 2.00%-4.00% 2.30% 0.00%-6.59% 2.50%-7.00% Rate of increase in healthcarecosts.... 3.00% 3.50% 4.50%-11.57% — 3.00% 3.50% 3.00%-10.50% — Expected rate of return onplanassets...... — 3.74% 9.98% — — 3.94%-5.21% 11.10% — If, at December 31, 2012, the 12-month rate of change in healthcare costs had been 1 percentage point higher, all other variables being equal, the liability for healthcare benefits would have been €19 million higher, with an overall negative impact on the income statement in terms of service cost and interest cost of €1 million. Conversely, if, at December 31, 2012, the 12-month rate of change in healthcare costs had been 1 percentage point lower, all other variables being equal, the liability for healthcare benefits would have been €16 million lower, with a positive impact on the income statement in terms of service cost and interest cost of about €1 million. The amount of contributions that is expected to be paid into defined-benefit plans in the subsequent year is equal to €24 million.

F-105 30. Provisions for risks and charges — €8,648 million Taken to Utilization at Dec. 31, 2011 income and other restated statement changes at Dec. 31, 2012 of which short term

Millions of euro Provision for litigation, risks and other charges: –nucleardecommissioning...... 2,946 28 564 3,538 35 – non-nuclear plant retirement and site restoration...... 538 12 65 615 4 – litigation ...... 846 187 109 1,142 55

–CO2 emissionscharges ...... 3 47 — 50 48 –taxesandduties ...... 346 47 18 411 26 –other ...... 1,830 627 (871) 1,586 715 Total ...... 6,509 948 (115) 7,342 883 Provision for early-retirement incentives ...... 1,548 71 (313) 1.306 429 TOTAL ...... 8,057 1,019 (428) 8,648 1,312

Nuclear decommissioning provision The nuclear decommissioning provision includes the following: Š €2,511 million (€2,513 million at December 31, 2011) for the V1 and V2 plants at Jasklovske Bohunice and the EMO 1 and 2 plants at Mochovce, and also includes the provision for nuclear waste disposal in the amount of €114 million (€117 million at December 31, 2011), the provision for spent nuclear fuel disposal in the amount of €1,542 million (€1, 578 million at December 31, 2011), and the provision for nuclear plant retirement in the amount of €855 million (€818 million at December 31, 2011). The estimated timing of the outlays described above takes account of current knowledge of environmental regulations, the operating time used in estimating the costs, and the difficulties presented by the extremely long time span over which such costs could arise. The charges covered by the provisions are reported at their present value using discount rates of between 4.15% and 4.55%; Š €1,027 million (€433 million at December 31, 2011) for the costs that will be incurred at the time of decommissioning of nuclear plants by Enresa, a Spanish public enterprise responsible for such activities in accordance with Royal Decree 1349/03 and Law 24/2005. Quantification of the costs is based on the standard contract between Enresa and the electricity companies approved by the Ministry for the Economy in September 2001, which regulates the retirement and closing of nuclear power plants. The time horizon envisaged, three years, corresponds to the period from the termination of power generation to the transfer of plant management to Enresa (post-operational costs). The change in 2012, recognized as an increase in the assets as provided for under IFRIC 1, reflects regulatory changes in Spain following the introduction of Law 15/2012, which increases the burden on generators operating nuclear power plants.

F-106 Non-nuclear plant retirement and site restoration provision The provision for “non-nuclear plant retirement and site restoration” represents the present value of the estimated cost for the retirement and removal of non-nuclear plants where there is a legal or constructive obligation to do so.

Litigation provision The “litigation” provision covers contingent liabilities in respect of pending litigation and other disputes. It includes an estimate of the potential liability relating to disputes that arose during the period, as well as revised estimates of the potential costs associated with disputes initiated in prior periods. The estimates are based on the opinions of internal and external legal counsel.

Other provisions “Other” provisions cover various risks and charges, mainly in connection with regulatory disputes and disputes with local authorities regarding various duties and fees. In particular, as regard current and potential disputes concerning local property tax (whether the Imposta Comunale sugli Immobili (“ICI”) or the new Imposta Municipale Unica (“IMU”)) in Italy, the Group has taken due account of the criteria introduced with circular no. 6 of the Public Land Agency (which resolved interpretive issues concerning the valuation methods for movable assets considered relevant for property registry purposes, including certain assets typical to generation plants, such as turbines) in estimating the liability for such taxes, both for the purposes of quantifying the probable risk associated with pending litigation and generating a reasonable valuation of probable future charges on positions that have not yet been assessed by Land Agency offices and municipalities.

Provision for early-retirement incentives The “provision for early-retirement incentives” includes the estimated charges related to binding agreements for the voluntary termination of employment contracts in response to organizational needs. In addition to ordinary utilization, the change for the year reflects the termination of the early-retirement incentive program for the personnel of the Italian companies.

31. Non-current financial liabilities — €2,553 million The item reports the fair value of derivatives only. For more information, please see note 6.3.

32. Other non-current liabilities — €1,151 million at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Accruedoperatingexpensesanddeferredincome ...... 910 929 (19) Otheritems...... 241 384 (143) Total ...... 1,151 1,313 (162)

At December 31, 2012, this item essentially consisted of revenues for electricity and gas connections and grants received for specific assets.

33. Trade payables — €13,903 million The item, which amounts to €13,903 million, includes payables in respect of energy supplies, fuel, materials, equipment associated with tenders and other services.

F-107 Trade payables break down by maturity at December 31, 2012 as follows. Millions of euro By June 30, 2013 ...... 10,409 Between July 1 and December 31, 2013 ...... 2,899 In 2014 ...... 101 Beyond ...... 494 Total at December 31, 2012 ...... 13,903

34. Current financial liabilities — €3,138 million at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Deferred financial liabilities ...... 921 796 125 Derivative contracts (see note 6.4) ...... 2,028 2,645 (617) Otheritems...... 189 227 (38) Total ...... 3,138 3,668 (530)

For more on “derivative contracts”, please see note 6.4.

35. Other current liabilities — €9,931 million at Dec. 31, 2011 at Dec. 31, 2012 restated Change Millions of euro Payablesduetocustomers...... 1,637 1,599 38 Payables due to Electricity Equalization Fund and similar bodies ...... 3,371 2,782 589 Payablesduetoemployees ...... 519 484 35 Othertaxpayables...... 945 888 57 Payables due to social security institutions ...... 226 218 8 Payables for put options granted to minority shareholders ...... 814 820 (6) Payables for acquisition of equity investments ...... 81 — 81 Other ...... 2,338 2,116 222 Total ...... 9,931 8,907 1,024

“Payables due to customers” include €1,101 million (€1,049 million at December 31, 2011) in security deposits related to amounts received from customers as part of electricity and gas supply contracts. Following the finalization of the contract, deposits for electricity sales, the use of which is not restricted in any way, are classified as current liabilities given that the Company does not have an unconditional right to defer repayment beyond 12 months. “Payables due to Electricity Equalization Fund and similar bodies” mainly include payables arising from the application of equalization mechanisms to electricity purchases on the Italian market amounting to €1,862 million (€1,797 million at December 31, 2011) and on the Spanish market amounting to €1,491 million (€985 million at December 31, 2011). The item “Payables for put options granted to minority shareholders” at December 31, 2012 includes the liability to Enel Distributie Muntenia and Enel Energie Muntenia in the total amount of

F-108 €778 million (€776 million at December 31, 2011) and the payable in respect of the exercise of the put option, carried out in December 2012, for Marcinelle Energie in the amount of €36 million (€43 million at December 31, 2011). That liability was settled in January 2013. The liabilities in respect of Enel Distributie Muntenia and Enel Energie Muntenia, which are estimated at fair value on the basis of Level 3 inputs, are determined on the basis of the exercise conditions specified in the contracts. The payables for the acquisition of equity investments regard the acquisition in 2012 of a number of companies in Mexico in the amount of €81 million.

36. Related parties As an operator in the field of generation, distribution, transport and sale of electricity and the sale of natural gas, Enel carries out transactions with a number of companies directly or indirectly controlled by the Italian State, the Group’s controlling shareholder. The table below summarizes the main types of transactions carried out with such counterparties. Related party Relationship Nature of main transactions Single Buyer Fully controlled (indirectly) by the Purchase of electricity for the enhanced protection Ministry for the Economy and Finance market EMO — Energy Fully controlled (indirectly) by the Sale of electricity on the Power Exchange Markets Operator Ministry for the Economy and Finance Purchase of electricity on the Power Exchange for pumping and plant planning ESO — Energy Fully controlled (directly) by the Sale of subsidized electricity Services Operator Ministry for the Economy and Finance Payment of A3 component for renewable resource incentives Terna Indirectly controlled by the Sale of electricity on the Ancillary Services Ministry for the Economy and Finance Market Purchase of transport, dispatching and metering services Eni Group Directly controlled by the Ministry Sale of electricity transport services for the Economy and Finance Purchase of fuels for generation plants, storage services and natural gas distribution Finmeccanica Directly controlled by the Ministry Purchase of IT services and supply of goods Group for the Economy and Finance Italian Post Office Fully controlled (directly) by the Purchase of postal services Ministry for the Economy and Finance Finally, Enel also maintains relationships with the pension funds Fopen and Fondenel, Fondazione Enel and Enel Cuore, an Enel non-profit company devoted to providing social and healthcare assistance. All transactions with related parties were carried out on normal market terms and conditions, which in some cases are determined by the Authority for Electricity and Gas.

F-109 The following table summarizes transactions with related parties and with associated companies outstanding at December 31, 2012 and carried out during the period, respectively. Related parties Associated companies

Italian Total Post Enel balance- Single Buyer EMO Terna Eni ESO Office Other Total GNL Chile Rete Gas Elica 2 CESI Other Total Overall total sheet item % of total

Millions of euro Balance sheet Tradereceivables...... 4 487 227 51 29 — 66 864 —20——929 893 11,719 7.6% Current financial assets ...... — — — — — — — — 1———3839 39 9,381 0.4% Othercurrentassets.... 1 — 17 19 — — — 37 1—1—79462,262 2.0% Tradepayables ...... 992 533 525 188 874 83 29 3,224 41 95 — 15 121 272 3,496 13,903 25.1% Current financial liabilities ...... — — — — — — — — 1————113,138 — Other current liabilities ...... — — 21 8 — — — 29 ————1010 39 9,931 0.4% Non-current financial

F-110 assets ...... — — — — — — — — ————7474 74 5,533 1.3% Other non-current assets ...... — — — — — — — — ————5555 55 897 6.1% Other non-current liabilities ...... — — — — — — 2 2 ——————21,151 0.2% Incomestatement...... Revenues from sales . . . 14 4,856 1,083 596 515 — 60 7,124 38 41 — — 14 93 7,217 82,699 8.7% Other revenues and income ...... — — 45 — — — — 45 —1———1462,190 2.1% Raw materials and consumables ...... 5,992 3,290 124 229 1 — 8 9,644 324 1 — — 2 327 9,971 46,130 21.6% Services ...... — 146 1,611 57 1 132 40 1,987 — 299 — 6 6 311 2,298 15,738 14.6% Other operating expenses...... 2 17 14 1 1 — 3 38 ———1—1393,208 1.2% Net income from commodity risk management ...... (2) — 84 — — — — 82 ——————8238 — Financialincome ...... — — — — — — — — ————1313 13 2,272 0.6% In November 2010, the Board of Directors of Enel SpA approved a procedure governing the approval and execution of transactions with related parties carried out by Enel SpA directly or through subsidiaries. The procedure (available at http://www.enel.com/it-IT/group/governance/rules/related_parties/) sets out rules designed to ensure the transparency and procedural and substantive propriety of transactions with related parties. It was adopted in implementation of the provisions of Article 2391-bis of the Italian Civil Code and the implementing regulations issued by CONSOB. In 2012, no transactions were carried out for which it was necessary to make the disclosures required in the rules on transactions with related parties adopted with CONSOB Resolution no. 17221 of March 12, 2010, as amended with Resolution no. 17389 of June 23, 2010.

37. Contractual commitments and guarantees The commitments entered into by the Enel Group and the guarantees given to third parties are shown below. at Dec. 31, 2012 at Dec. 31, 2011 Change Millions of euro Guarantees given: – sureties and other guarantees granted to third parties . . 5,586 4,766 820 Commitments to suppliers for: – electricity purchases ...... 50,634 54,708 (4,074) – fuel purchases ...... 62,576 69,008 (6,432) –varioussupplies ...... 2,120 3,153 (1,033) –tenders ...... 1,922 1,936 (14) –other ...... 2,315 2,458 (143) Total ...... 119,567 131,263 (11,696) TOTAL ...... 125,153 136,029 (10,876)

Guarantees granted to third parties amounted to €5,586 million and include €469 million in commitments relating to the sale of real estate assets, in connection with the regulations that govern the termination of leases and the related payments, for a period of six years and six months renewable from July 2004. The value of such guarantees is reduced annually by a specified amount. The expected cash flow of the lease contracts, including forecast inflation, is as follows: Š 2013: €48 million; Š 2014: €49 million; Š 2015: €49 million; Š 2016: €50 million; Š 2017: €51 million. The expected cash flow of the operating lease contracts of Endesa is as follows: Š 2013: €52 million; Š 2014-2015: €81 million; Š 2016 and beyond: €249 million. Commitments for electricity amounted to €50,634 million at December 31, 2012, of which €22,486 million refer to the period 2013-2017, €9,915 million to the period 2018-2022, €6,896 million to the period 2023-2027 and the remaining €11,337 million beyond 2027.

F-111 Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set in foreign currencies). The total at December 31, 2012, was €62,576 million, of which €34,976 million refer to the period 2013-2017, €21,136 million to the period 2018-2022, €4,685 million to the period 2023-2027 and the remaining €1,779 million beyond 2027.

38. Contingent liabilities and assets Porto Tolle thermal plant — Air pollution — Criminal proceedings against Enel directors and employees — Damages for environmental harm The Court of Adria, in a ruling issued March 31, 2006, convicted former directors and employees of Enel for a number of incidents of air pollution caused by emissions from the Porto Tolle thermoelectric plant. The decision held the defendants and Enel (as a civilly liable party) jointly liable for the payment of damages for harm to multiple parties, both natural persons and local authorities. Damages for a number of mainly private parties were set at the amount of €367,000. The calculation of the amount of damages owed to certain public entities (the Regions of Veneto and Emilia Romagna, the Province of Rovigo and various municipalities) was postponed to a later civil trial, although a “provisional award” of about €2.5 million was immediately due. An appeal was lodged against the ruling of the Court of Adria and on March 12, 2009, the Court of Appeal of Venice partially reversed the lower court decision. It found that the former directors had not committed a crime and that there was no environmental damage and therefore ordered recovery of the provisional award already paid. The prosecutors and the civil claimants lodged an appeal against the ruling with the Court of Cassation. In a ruling on January 11, 2011, the Court of Cassation granted the appeal, overturning the decision of the Venice Court of Appeal, and referred the case to the civil section of the Venice Court of Appeal to rule as regards payment of damages and the division of such damages among the accused. As regards amounts paid to a number of public entities, Enel has already made payment under a settlement agreement reached in 2008. With a suit lodged in July 2011, the Ministry for the Environment and a number of public entities asked the Venice Court of Appeal to order Enel SpA and Enel Produzione to pay civil damages for harm caused by the emissions from the Porto Tolle power station. The amount of damages requested for economic and environmental losses is about €100 million, which Enel has contested. In August 2011, the Public Prosecutor’s Office of Rovigo asked that a number of former directors, officers and employees of Enel and Enel Produzione be remanded for trial on the charge of willful omission to take precautionary actions to prevent a disaster in respect of the alleged emissions from the Porto Tolle plant. At the hearing of February 7, 2012, the pre-trial hearing judge of Rovigo, granting the request of the Public Prosecutor’s Office of Rovigo, ordered the committal for trial of all of the accused for the offence of willful omission of accident prevention measures. At the hearing of September 27, 2012, the Prosecutor also added the charge of willfully causing a disaster. Consequently, the case was sent before the Court of Rovigo. The next hearing is scheduled for June 6, 2013.

Mass litigation The following mass litigation is currently pending.

F-112 Distribuzione. The Court of Cassation has also consistently ruled in favor of Enel Distribuzione. Currently, pending cases number about 37,000 due to Court decisions as well as abandonment of suits by the plaintiffs or joinder of proceedings. In addition, in view of the rulings in Enel’s favor by both the courts of appeal and the Court of Cassation, the flow of new claims has come to a halt. During 2012, a number of actions for recovery were initiated and settlements reached to obtain repayment of amounts paid by Enel in execution of the rulings in the courts of first instance. In May 2008, Enel served its insurance company (Cattolica) a summons to ascertain its right to reimbursement of amounts paid in settlement of unfavorable rulings. The case now also involves a number of reinsurance companies in the proceedings, which have challenged Enel’s claim. The suit will be heard before the Court of Rome at the hearing of June 6, 2013, for submission of final pleadings.

Litigation concerning free bill payment procedures In its ruling no. 2507/2010 of May 3, 2010, the Council of State granted the appeal of the Authority for Electricity and Gas (the Authority) against ruling no. 321/08 of February 13, 2008 with which the Lombardy Regional Court had voided Resolution no. 66/2007. With the latter, the Authority had fined Enel Distribuzione €11.7 million for violation of the provisions of Resolution no. 55/2000 concerning the transparency of invoices. Enel Distribuzione lodged an appeal with the Council of State asking for it to revoke the ruling but the appeal was denied on February 24, 2011. The appeal lodged on October 29, 2010, with the European Court of Human Rights in Strasbourg is still pending. The appeal seeks a judgment against the Italian State and damages equal to the amount paid with the fine. In Enel’s view, with the ruling the Council of State adopted an interpretation of the legal concept of legality that differs from that usually adopted in the case law of the European court. Since the end of 2006, Enel has been sued by numerous customers, especially in Campania and Calabria (with the support of a number of consumer associations), alleging violations of a number of Authority Resolutions (200/1999, 55/2000 and 66/2007) concerning the requirement to provide at least one free method for paying invoices and to publicize that method in invoices themselves. In the civil suits, the customers have requested restitution of amounts paid for postal expenses and, often, further damages. At December 31, 2012, pending cases numbered about 51,000, but the number of new suits is declining, especially following the judgment of the Court of Cassation in 2011 that the rule set out in Authority Resolution no. 200/1999 did not have supplementary validity for existing supply contracts, thereby finding the action for non-performance of contract advanced by customers to be unfounded, because it was based on a non-existent clause. No new suits were filed in the last Quarter of 2012.

BEG litigation Following an arbitration proceeding initiated by BEG in Italy, Enelpower obtained a ruling in its favor in 2002, which was upheld by the Court of Cassation in 2010, which entirely rejected the complaint with regard to alleged breach by Enelpower of an agreement concerning the construction of a hydroelectric power station in Albania. Subsequently, BEG, acting through its subsidiary Albania BEG Ambient, filed suit against Enelpower and Enel SpA in Albania concerning the matter, obtaining a ruling, upheld by the Albanian Supreme Court of Appeal, ordering Enelpower and Enel to pay tortious damages of about €25 million for 2004 as well as an unspecified amount of tortious damages for subsequent years. Following the ruling, Albania BEG Ambient demanded payment of more than €430 million, a request that Enelpower and Enel rejected, vigorously contesting its legitimacy and filing a request in Albania for revocation of the ruling for conflict with the ruling of the Italian Court of Cassation.

F-113 As the Albanian Court of Cassation upheld the ruling of the court of first instance, the Enel Group companies then filed an appeal with the European Court of Human Rights for violation of the right to a fair trial and the rule of law, asking the Court to order the Republic of Albania to pay damages for financial and non-financial losses incurred by Enel and Enelpower. That suit is pending. In addition, in 2012, Albania BEG Ambient filed suit against Enel and Enelpower with the Tribunal de Grande Instance in Paris in order to render the ruling of the Albanian court enforceable in France. Enel and Enelpower have challenged the suit. The next hearing is scheduled for June 19, 2013. Subsequently, again at the initiative of BEG Ambient, Enel France was served with two “Saise Conservatoire de Créances” (orders for the precautionary attachment of receivables) to conserve any receivables of Enel SpA in respect of Enel France. Furthermore, proceedings continue in the suit lodged by Enelpower and Enel SpA with the Court of Rome asking the Court to ascertain the liability of BEG for having evaded compliance with the arbitration ruling issued in Italy in favor of Enelpower, through the legal action taken by Albania BEG Ambient in Albania. With this action, Enelpower and Enel are asking the Court to find BEG liable and order it to pay damages in the amount that one or the other could be required to pay to Albania BEG Ambient in the event of the enforcement of the sentence issued by the Albanian courts. The next hearing is scheduled for April 23, 2013.

Josel litigation — Spain In March 2009, Josel SL sued Endesa Distribución Eléctrica SL to withdraw from the contract for the sale of several buildings due to changes in their zoning status, requesting the restitution of about €85 million plus interest. Endesa Distribución Eléctrica SL opposed the request for withdrawal. On May 9, 2011, the court granted the request to permit withdrawal from the contract and ordered Endesa to repay the amounts paid for the sale plus interest and costs. Endesa has appealed the ruling. On February 13, 2012, the Audiencia Provincial de Palma de Mallorca overturned the initial ruling. The latter judgment was appealed by Josel with the Tribunal Supremo on March 19, 2012.

Tax litigation in Brazil In 1998, Ampla Investimentos financed the acquisition of Coelce with the issue of bonds in the amount of $350 million (“Fixed Rate Notes” — FRN) subscribed by its Panamanian subsidiary,

F-114 which had been established to raise funds abroad. Under the special rules then in force, subject to maintaining the bond until 2006, the interest paid by Ampla to its subsidiary was not subject to withholding tax in Brazil. However, the financial crisis of 1998 forced the Panamanian company to refinance itself with its Brazilian parent, which for that purpose obtained loans from local banks. The tax authorities considered this financing to be the equivalent of the early extinguishment of the bond, with the consequent loss of entitlement to the exemption from withholding tax. On November 6, 2012, the Camara Superior de Recursos Fiscales (the highest level of administrative courts) issued a ruling against Ampla, which the company may now appeal before the ordinary courts (Tribunal Superior de justiça). To that end, Ampla must provide security — through a“fianza bancaria” and/or a “seguro garantia” — for the tax liability increased by 20% or 30% depending on the type of security used. In 2002, the State of Rio de Janeiro changed the deadlines for payment of the ICMS (Imposto sobre Circulação de Mercadorias e Serviços) by withholding agents (to the 10th, 20th and 30th of each month). Owing to liquidity problems, between September 2002 and February 2005, Ampla continued to pay the lCMS in compliance with the previous system (the 5th day of the subsequent month). Despite an informal agreement, the Brazilian tax authorities issued an assessment for late payment of the ICMS (“multa de demora”). Ampla appealed the measure, arguing that the penalties imposed were not due owing to the application of a number of amnesties granted between 2004 and 2006 (Ley Benedicta). Following entry of the amount requested in the Public Register of the State of Rio de Janeiro, Ampla was required to provide security in the amount of €108 million in order to continue to receive public grants.

Meridional litigation — Brazil The Brazilian construction company Meridional held a contract for civil works with the Brazilian company CELF (owned by the State of Rio de Janeiro), which withdrew from the contract. As a consequence of the transfer of assets from CELF to Ampla Energia e Serviços, the Brazilian construction company complained that the transfer had infringed its creditor rights in respect of CELF (deriving from the contract for civil works) and, in 1998, filed suit against Ampla. The Brazilian court granted the complaint and Ampla and the State of Rio de Janeiro filed appeals against the decision, which were granted in December 2009. Following that decision, Meridional lodged a further appeal (mandado de segurança) in June 2011. That request was denied. Subsequently Meridional lodged a new appeal with the Tribunal Superior de Justiça, arguing that there were a number of formal errors in the ruling denying the request for the mandado de segurança. This latter appeal was granted and the proceeding continues. The amount involved in the dispute is about €353 million.

CIEN litigation — Brazil In 1998 the Brazilian company CIEN signed an agreement with Tractebel for the delivery of electricity from Argentina through its Argentina-Brazil interconnection line. As a result of Argentine regulatory changes introduced as a consequence of the economic crisis in 2002, CIEN was unable to make the electricity available to Tractebel. In October 2009, Tractebel sued CIEN, which submitted its defense. CIEN cited force majeure as a result of the Argentine crisis as the main argument in its defense. As part of the dispute, Tractebel has expressed its intention to acquire 30% of the transmission line involved. The case is continuing. The amount involved in the dispute is estimated at about €50 million, plus unspecified damages. For analogous reasons in May 2010 the company Furnas also filed suit against CIEN for failure to deliver electricity, requesting payment of about €227 million in addition to unspecified damages.

F-115 In alleging non-performance by CIEN, Furnas is also seeking to acquire ownership (in this case 70%) of the interconnection line. CIEN’s defense is similar to the earlier case. The evidentiary stage of the trial has been completed and the ruling at first instance is pending.

39. Subsequent events LaGeo: Paris Court of Appeal upholds ruling of International Court of Arbitration On January 8, 2013, the Court of Appeal of Paris upheld the ruling of the International Court of Arbitration (International Chamber of Commerce) concerning the international arbitration proceeding brought by Enel Green Power against Inversiones Energéticas (INE), its partner in LaGeo, a joint venture for the development of geothermal energy in El Salvador. The judges rejected the appeal lodged by INE asking for the ruling in favor of Enel Green Power to be voided, confirming that the ruling had been issued at the end of a fair trial. The decision of the Court of Appeal reaffirms Enel Green Power’s right to allocate investments in LaGeo to share capital through the subscription of newly issued shares in the joint venture.

Forward starting revolving credit facility On February 11, 2013, Enel SpA signed in Amsterdam a 5-year revolving credit facility amounting to about €9.4 billion, which will replace the €10 billion revolving credit facility (currently not drawn) scheduled to expire in April 2015. The new revolving credit line is “forward starting”, meaning that it may be used starting from the expiry date of the €10 billion revolving credit facility noted above or, before that date, in concomitance with any early cancellation of the latter by Enel. The new forward starting revolving credit line, which may be used by Enel and/or its Dutch subsidiary Enel Finance International (with a Parent Company guarantee), is intended to give the Group’s treasury operations a highly flexible instrument to manage working capital. Accordingly, the credit facility is not part of Enel’s debt refinancing program. A large group of national and international banks participated in the transaction, including Mediobanca in the role of Documentation Agent. The cost of the new credit line will vary in relation to Enel SpA’s credit rating. At the current rating level, it is equal to a spread of 170 basis points over Euribor, with commitment fees of 40% of the applicable spread.

40. Stock incentive plans Between 2000 and 2008, Enel implemented stock incentive plans (stock option plans and restricted share units plans) each year in order to give the Enel Group — in line with international business practice and the leading Italian listed companies — a means for fostering management motivation and loyalty, strengthening a sense of corporate team spirit in our key personnel, and ensuring their enduring and constant effort to create value, thus creating a convergence of interests between shareholders and management. The remainder of this section describes the features of the stock incentive plans adopted by Enel and still in place in 2012.

F-116 2008 stock option plan The 2008 plan provides for the grant of personal, non-transferable inter vivos options to subscribe a corresponding number of newly issued ordinary Enel shares to senior managers selected by the Board of Directors. The main features of the 2008 plan are discussed below.

Beneficiaries The beneficiaries of the plan — who include the CEO of Enel is his capacity as General Manager — comprise the small number of managers who represent the first reporting line of top management. The head of the Infrastructure and Networks Division does not participate but has received other incentives linked to specific objectives regarding the Division’s business area. The exclusion was motivated by the obligation for Enel — connected with the full liberalization of the electricity sector as from July 1, 2007 — to implement administrative and accounting unbundling so as to separate the activities included in the Infrastructure and Networks Division from those of the Group’s other business areas. The beneficiaries have been divided into two brackets (the first includes only the CEO of Enel in his capacity as General Manager) and the basic number of options granted to each has been determined on the basis of their gross annual compensation and the strategic importance of their positions, as well as the price of Enel shares at the start of the period covered by the plan (January 2, 2008).

Exercise conditions The right to subscribe the shares was subordinate to the condition that the executives concerned remain employed within the Group, with a few exceptions (such as, for example, termination of employment because of retirement or permanent invalidity, exit from the Group of the company at which the executive is employed, and succession mortis causa) specifically governed by the Regulations. The vesting of the options is subject to achievement of two operational objectives, both calculated on a consolidated, three-year basis: (i) earnings per share (EPS, equal to Group net income divided by the number of Enel shares in circulation) for the 2008-2010 period, determined on the basis of the amounts specified in the budgets for those years and (ii) the return on average capital employed (ROACE, equal to the ratio between operating income and average net capital employed) for the 2008-2010 period, also determined on the basis of the amounts specified in the budgets for those years. Depending on the degree to which the objectives are achieved, the number of options that can actually be exercised by each beneficiary is determined on the basis of a performance scale established by the Enel Board of Directors and may vary up or down with respect to the basic option grant by a percentage amount of between 0% and 120%.

Exercise procedures Once achievement of the operational objectives has been verified, the options can be exercised as from the third year after the grant year and up to the sixth year as from the grant year. The options can be exercised at any time, with the exception of two blocking periods lasting about one month before the approval of the draft annual financial statements of Enel SpA and the half-year report by the Board of Directors.

Strike price The strike price was originally set at €8.075, equal to the reference price for Enel shares observed on the electronic stock exchange of Borsa Italiana on January 2, 2008. The strike price was modified by the Board of Directors on July 9, 2009 — which set it at €7.118 — in order to take account of the capital increase completed by Enel that month and the impact that it had on the market price of Enel shares.

F-117 Subscription of the shares is charged entirely to the beneficiaries, as the plan does not provide for any facilitated terms to be granted in this respect.

Shares serving the plan In June 2008, the Extraordinary Shareholders’ Meeting granted the Board of Directors a five-year authorization to carry out a paid capital increase in the maximum amount of €9,623,735.

Developments in the 2008 stock option plan The Board of Directors has determined that in the 2008-2010 period both EPS and ROACE exceeded the levels set out in the budgets for those years, thereby enabling the options to vest in an amount equal to 120% of those originally granted to the beneficiaries, in application of the performance scale established by the Enel Board of Directors. The following table reports developments in the 2008 stock option plan: Options Options lapsed Total options Number of Strike Verification of exercised at at Dec. 31, Options lapsed in Options outstanding at granted beneficiaries price plan conditions Dec. 31, 2011 2011 2012 Dec. 31, 2012 8,019,779(1) 16 Group Rights executives €8.075(2) vested None None None 9,623,735

(1) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) had been achieved, a total of 9,623,735 options have vested. (2) The strike price was changed to €7.118 as from July 9, 2009 in order to take account of the impact of the capital increase completed by Enel that month on the market price of Enel shares.

Payment of a bonus connected with the portion of the dividends attributable to asset disposals, to be made in conjunction with the exercise of stock options In March 2004, the Board of Directors voted to grant a special bonus, beginning in 2004, to the beneficiaries of the various stock option plans who exercise the options granted to them, establishing that the amount is to be determined each time by the Board itself when it adopts resolutions concerning the allocation of earnings and is based on the portion of the “disposal dividends” (as defined below) distributed after the granting of the options. The rationale underlying this initiative is that the portion of dividends attributable to extraordinary transactions regarding the disposal of property and/or financial assets (“disposal dividends”) should be considered a form of return to shareholders of part of the value of the Company, and as such capable of affecting the performance of the shares. The beneficiaries of the bonus are thus the beneficiaries of the stock option plans who — either because they choose to do so or because of the restrictions imposed by the exercise conditions or the vesting periods — exercise their options after the ex-dividend date of the “disposal dividends” and therefore could be penalized. The bonus is not paid, however, for the portion of other kinds of dividends, such as those generated by ordinary business activities or reimbursements associated with regulatory measures. Essentially, when beneficiaries of the stock option plans have exercised the options granted to them, as from 2004 they have been entitled to receive a sum equal to the “disposal dividends” distributed by Enel after the options have been granted but before they have been exercised. The bonus will be paid by the company of the Group that employs the beneficiary and is subject to ordinary taxation as income from employment. Under these rules, to date the Board of Directors has approved: (i) a bonus amounting to €0.08 per option exercised, with regard to the dividend (for 2003) of €0.36 per share payable as from June 24,

F-118 2004; (ii) a bonus amounting to €0.33 per option exercised, with regard to the interim dividend (for 2004) of the same amount per share payable as from November 25, 2004; (iii) a bonus amounting to €0.02 per option exercised, with regard to the balance of the dividend (for 2004) of €0.36 per share payable as from June 23, 2005; and (iv) a bonus amounting to €0.19 per option exercised, with regard to the interim dividend (for 2005) of the same amount per share payable as from November 24, 2005. It should be noted that the overall dilution of share capital as at December 31, 2012 attributable to the exercise of the stock options granted under the various plans amounts to 1.31% and that further developments in the plans could, in theory, increase the dilution up to a maximum of 1.41%. The following table summarizes developments over the course of 2010, 2011 and 2012 in the Enel stock option plans, detailing the main assumptions used in calculating their fair value.

Developments in stock option plans Number of options 2008 plan Options granted at December 31, 2010 ...... 8,019,779(1) Options exercised at December 31, 2010 ...... — Options lapsed at December 31, 2010 ...... — Options outstanding at December 31, 2010 ...... 8,019,779(1) Options lapsed in 2011 ...... — Options outstanding at December 31, 2011 ...... 9,623,735(2) Options lapsed in 2012 Options outstanding at December 31, 2012 ...... 9,623,735(2) Fairvalueatgrantdate(euro) ...... 0.17 Volatility ...... 21% Optionexpiry...... December 2014

(1) If the degree of achievement of the two operational objectives (EPS and ROACE) set for the 2008 plan should reach the highest level of the performance scale, a maximum of 9,623,735 options would vest. (2) Following the review conducted by the Enel SpA Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 9,623,735 options have vested (120% of the 8,019,779 options originally granted).

Restricted share units plan 2008 In June 2008 Enel’s Ordinary Shareholders’ Meeting approved an additional incentive mechanism, a restricted share units plan. The plan — which is also linked to the performance of Enel shares — differs from the stock option plans in that it does not involve the issue of new shares and therefore has no diluting effect on share capital. It grants the beneficiaries rights to receive the payment of a sum equal to the product of the number of units exercised and the average value of Enel shares in the month preceding the exercise of the units.

Beneficiaries The plan covers the management of the Enel Group (including the managers already participating in the 2008 stock option plan, which includes the Enel CEO in his capacity as General Manager), with the exception of the managers of the Infrastructure and Networks Division for the reasons discussed with the 2008 stock option plan. The beneficiaries have been divided into brackets and the basic number of units granted to each has been determined on the basis of the average gross annual compensation of the bracket, as well as the price of Enel shares at the start of the period covered by the plan (January 2, 2008).

F-119 Exercise conditions Exercise of the units — and the consequent receipt of the payment — is subordinate to the condition that the executives concerned remain employed within the Group, with a few exceptions (such as, for example, termination of employment because of retirement or permanent invalidity, exit of the company at which the beneficiary is employed from the Group or succession mortis causa) specifically governed by the Regulations. As regards other exercise conditions, the plan first establishes a suspensory operational objective (a “hurdle target”): (i) for the first 50% of the basic number of units granted, Group EBITDA for 2008-2009, calculated on the basis of the amounts specified in the budgets for those years; and (ii) for the remaining 50% of the basic number of units granted, Group EBITDA for 2008-2010, calculated on the basis of the amounts specified in the budgets for those years. If the hurdle target is achieved, the actual number of units that can be exercised by each beneficiary is determined on the basis of a performance objective represented by: Š for the first 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2009 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and that of a specific benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced with the FTSE Italia All Share index after an analogous substitution by Borsa Italiana in 2009 — and the Bloomberg World Electric Index (weight: 50%); and Š for the remaining 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2010 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and the benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced in 2009 with the FTSE Italia All Share index as indicated above — and the Bloomberg World Electric Index (weight: 50%). The number that can be exercised may vary up or down with respect to the basic unit grant by a percentage amount of between 0% and 120% as determined on the basis of a specific performance scale. If the hurdle target is not achieved in the first two-year period, the first tranche of 50% of the units granted may be recovered if the same hurdle target is achieved over the longer three-year period indicated above. It is also possible to extend the validity of the performance level registered in the 2008-2010 period to the 2008-2009 period, where performance was higher in the longer period, with the consequent recovery of units that did not actually vest in the first two-year period because of the lower performance level and on the condition that the first 50% of the basic unit grant has not yet been exercised.

Exercise procedures Once achievement of the hurdle target and the performance objectives has been verified, of the total number of units granted, 50% may be exercised as from the second year subsequent to the grant year and the remaining 50% as from the third year subsequent to the grant year, with the deadline for exercising all the units being the sixth year subsequent to the grant year. In any event, each year the units can only be exercised during four time windows of ten business days each (to be announced by Enel over the course of the plan) in the months of January, April, July and October.

F-120 meaning that according to the performance scale 100% of the units originally granted had vested. For the remaining 50% of the basic grant awarded, in 2008-2010 the hurdle target for Group EBITDA had been achieved and Enel shares significantly outperformed the benchmark index, meaning that according to the performance scale an amount equal to 120% of the units originally granted had vested. In view of the fact that the level of achievement of the performance targets over the 2008-2010 period was higher than that achieved in 2008-2009, it is therefore possible to recover the units that did not vest in 2008-2009 as a result of the lower level of achievement of the performance targets for beneficiaries who had not yet exercised the first 50% of the basic units granted before achievement of the targets for 2008-2010 had been ascertained. The following table reports developments in the 2008 restricted share units plan. Number of RSU 2008 plan RSU outstanding at December 31, 2010 ...... 1,527,706 of which vested at December 31, 2010 ...... 1,527,706 RSU lapsed in 2011 ...... 10,500 RSU exercised in 2011 ...... 1,159,460 RSU outstanding at December 31, 2011 ...... 357,746 of which vested at December 31, 2011 ...... 357,746 RSU lapsed in 2012 ...... — RSU exercised in 2012 ...... 103,432 RSU outstanding at December 31, 2012 ...... 254,314 of which vested at December 31, 2012 ...... 254,314 Fairvalueatthegrantdate(euro)...... 3.16 Fair value at December 31, 2012 (euro) ...... 3.653 Expiry of the restricted share units ...... December 2014

F-121 CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2011

F-122 Enel S.p.A. Consolidated Financial Statements as of December 31, 2011

Independent auditors’ report pursuant to art. 14 and 16 of Legislative Decree n. 39 dated January 27, 2010 (Translation from the original Italian text)

F-123 Reconta Ernst & Young S.p.A. Via Po, 32 00198 Roma Tel. (+39) 06 324751 Fax (+39) 06 32475504 www.ey.com

Independent auditors’ report pursuant to art. 14 and 16 of Legislative Decree n. 39 dated January 27, 2010 (Translation from the original Italian text)

To the Shareholders of Enel S.p.A. 1. We have audited the consolidated financial statements of Enel S.p.A. and its subsidiaries, (“Enel Group”) as of December 31, 2011 and for the year then ended, comprising the income statement, the statement of comprehensive income, the balance sheet, the statement of changes in shareholders’ equity, the statement of cash flows and the related notes to the financial statements. The preparation of these financial statements in compliance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005 is the responsibility of Enel S.p.A.’s directors. Our responsibility is to express an opinion on these financial statements based on our audit. 2. Our audit was performed in accordance with auditing standards recommended by CONSOB (the Italian Stock Exchange Regulatory Agency). In accordance with such standards, we planned and performed our audit to obtain the information necessary to determine whether the consolidated financial statements are materially misstated and if such financial statements, taken as a whole, may be relied upon. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, as well as assessing the appropriateness and correct application of the accounting principles and the reasonableness of the estimates made by directors. We believe that our audit provides a reasonable basis for our opinion. The consolidated financial statements of the prior year are presented for comparative purposes. As described in the notes to the financial statements, the directors have restated certain comparative data related to the prior year with respect to the data previously presented, on which other auditors issued their auditor’s report dated April 6, 2011. We have examined the method used to restate the comparative financial data and the information presented in the notes to the financial statements in this respect, for the purpose of expressing our opinion on the consolidated financial statements as of December 31, 2011. 3. In our opinion, the consolidated financial statements of the Enel Group as of December 31, 2011 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with art. 9 of Legislative Decree n. 38/2005; accordingly, they present clearly and give a true and fair view of the financial position, the results of operations and the cash flows of the Enel Group for the year then ended.

F-124 4. The directors of Enel S.p.A. are responsible for the preparation of the report on operations(1) and the report on corporate governance and ownership structure(2) in accordance with the applicable laws and regulations. Our responsibility is to express an opinion on the consistency with the financial statements of the report on operations and the information included therein in compliance with art. 123-bis of Legislative Decree n. 58/1998, paragraph 1, letters c), d), f), I), m) and paragraph 2, letter b) presented in the report on corporate governance and ownership structure, as required by the law. For this purpose, we have performed the procedures required under Auditing Standard 001 issued by the Italian Accounting Profession (CNDCEC) and recommended by CONSOB. In our opinion, the report on operations and the information reported therein in compliance with art. 123-bis of Legislative Decree n. 58/1998, paragraph 1, letters c), d), f), I), m) and paragraph 2), letter b) presented in the report on corporate governance and ownership structure, are consistent with the consolidated financial statements of the Enel Group as of December 31, 2011.

Rome, April 6 2012

Reconta Ernst & Young S.p.A. Signed by: Massimo delli Paoli, Partner

This report has been translated into the English language solely for the convenience of international readers.

(1) The report on operations is not included in this Offering Circular. (2) The report on corporate governance and ownership structure is not included in this Offering CIrcular.

Reconta Ernst & Young S.p.A. Sede Legale: 00198 Roma - Via Po, 32 Capitale Sociale € 1.402.500,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la CC.I.A.A. di Roma Codice fiscale e numero di iscrizione 00434000584 P.I. 00891231003 Iscritta all’Albo Revisori Contabili al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/2/1998 Iscritta all’Albo Speciale delle società di revisione Consob al progressivo n. 2 delibera n. 10831 del 16/7/1997

A member firm of Ernst & Young Global Limited

F-125 Consolidated Income Statement Notes 2011 2010 of which of which with related with related parties parties Millions of euro Revenues Revenuesfromsalesandservices ...... 8.a 77,573 7,455 71,943 7,740 Otherrevenuesandincome...... 8.b 1,941 208 1,434 5 [Subtotal] ...... 79,514 73,377 Costs Rawmaterialsandconsumables...... 9.a 42,901 9,970 36,457 10,985 Services...... 9.b 14,440 2,287 13,628 1,928 Personnel ...... 9.c 4,296 4,907 Depreciation, amortization and impairment losses ...... 9.d 6,351 6,222 8 Otheroperatingexpenses...... 9.e 2,143 26 2,950 3 Capitalizedcosts ...... 9.f (1,711) (1,765) [Subtotal] ...... 68,420 62,399 Net income/(charges) from commodity risk management ...... 10 272 77 280 8 Operating income ...... 11,366 11,258 Financialincome...... 11 2,693 29 2,576 21 Financialexpense ...... 11 5,717 7 5,774 Share of income/(expense) from equity investments accounted for using the equity method...... 12 96 14 Income before taxes ...... 8,438 8,074 Incometaxes...... 13 3,080 2,401 Net income from continuing operations ...... 5,358 5,673 Net income from discontinued operations ..... —— Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 5,358 5,673 Attributable to shareholders of the Parent Company...... 4,148 4,390 Attributable to non-controlling interests ...... 1,210 1,283 Earnings per share (euro) ...... 14 0.44 0.47 Diluted earnings per share (euro) ...... 14 0.44 0.47 Earnings from continuing operations per share ...... 14 0.44 0.47 Diluted earnings from continuing operations per share ...... 14 0.44 0.47

F-126 Statement of Consolidated Comprehensive Income

Notes 2011 2010 restated(1) Millions of euro Net income for the year ...... 5,358 5,673 Other comprehensive income: – Effective portion of change in the fair value of cash flow hedges . . . (161) 307 – Income recognized in equity by companies accounted for using the equitymethod...... (9) 16 – Change in the fair value of financial investments available for sale ...... (61) 384 – Exchange rate differences ...... (731) 2,323 Income/(Loss) recognized directly in equity ...... 28 (962) 3,030 Comprehensive income for the year ...... 4,396 8,703 Attributable to: –shareholdersoftheParentCompany ...... 3,674 6,145 – non controlling interests ...... 722 2,558

(1) The statement of consolidated comprehensive income was restated to provide a better presentation of the effects recognized the previous year associated with transactions in equity interests without loss of control. For more information, please see note 5 below.

F-127 Consolidated Balance Sheet at Dec. 31, 2010 Notes at Dec. 31, 2011 restated(1) of which of which with related with related parties parties Millions of euro ASSETS Non-current assets Property,plantandequipment ...... 15 80,592 78,094 Investmentproperty ...... 245 299 Intangible assets ...... 16 39,075 39,581 Deferred tax assets ...... 17 6,011 6,017 Equity investments accounted for using the equitymethod...... 18 1,085 1,033 Non-current financial assets ...... 19 6,325 4,701 Other non-current assets ...... 20 506 1,062 [Total] ...... 133,839 130,787 Current assets Inventories ...... 21 3,148 2,803 Trade receivables ...... 22 11,570 1,473 12,505 1,065 Tax receivables ...... 23 1,251 1,587 Current financial assets ...... 24 10,466 1 11,922 69 Other current assets ...... 25 2,135 71 2,176 79 Cash and cash equivalents ...... 26 7,015 5,164 [Total] ...... 35,585 36,157 Assets held for sale ...... 27 381 1,618 TOTAL ASSETS ...... 169,805 168,562

(1) The consolidated balance sheet has been restated in order to retrospectively incorporate the effects of the definitive allocation of the purchase price in the SE Hydropower business combination. For more information, please see note 5 below.

F-128 at Dec. 31, 2010 Notes at Dec. 31, 2011 restated(1) of which of which with related with related parties parties Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 9,403 9,403 Other reserves ...... 10,348 10,791 Retained earnings (loss carried forward) ...... 15,831 14,345 Net income for the period(2) ...... 3,208 3,450 [Total] ...... 38,790 37,989 Non-controlling interests ...... 15,650 15,877 Total shareholders’ equity ...... 28 54,440 53,866 Non-current liabilities Long-termloans...... 26 48,703 52,440 Post-employment and other employee benefits ...... 29 3,000 3,069 Provisionsforrisksandcharges...... 30 7,831 9,026 Deferred tax liabilities ...... 17 11,505 11,336 Non-current financial liabilities ...... 31 2,307 2,591 Other non-current liabilities ...... 32 1,313 1,244 [Total] ...... 74,659 79,706 Current liabilities Short-term loans ...... 26 4,799 8,209 Current portion of long-term loans ...... 26 9,672 2,999 Tradepayables...... 33 12,931 3,304 12,373 2,777 Incometaxpayable...... 671 687 Current financial liabilities ...... 34 3,668 2 1,672 Other current liabilities ...... 35 8,907 15 8,052 13 [Total] ...... 40,648 33,992 Liabilities held for sale ...... 27 58 998 Total liabilities ...... 115,365 114,696 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 169,805 168,562

F-129 Statement of Changes in Consolidated Shareholders’ Equity Share capital and reserves attributable to the shareholders of the Parent Company

Reserve Reserve from from Reserve translation disposal of Reserve from equity Equity of financial equity from investments attributable statements Reserve from interests transactions accounted Net to the Share Other in currencies measurement without in non- for using income shareholders Non- Total Share premium Legal Other retained other than of financial loss of controlling the equity for the of the Parent controlling shareholders’ capital reserve reserve reserves earnings euro instruments control interests method period Company interests equity at January 1, 2010 ...... 9,403 5,292 1,453 2,260 11,409 (621) (582) — — 8 4,646 33,268 12,665 45,933 Charge for stock options plans for the year...... — — — 2 — — — — — — — 2— 2 Dividends and interim dividends(1) . . . — — — — (1,410) — — — — — (940) (2,350) (798) (3,148) Allocation of net income from the previousyear...... — — 428 — 4,218 — — — — — (4,646) —— — Changeinscopeofconsolidation.... — — — — — — — — — — — — 1,259 1,259 Disposal of equity interests without lossofcontrol...... — — — — — — — 796 — — — 796 — 796 Effect of SE Hydropower PPA ...... — — — — 128 — — — — — 128 193 321 Comprehensive income for the year...... — — — — — 1,077 662 — — 16 4,390 6,145 2,558 8,703 of which:

F-130 – Income/(Loss) recognized directly in equity ...... — — — — — 1,077 662 — — 16 — 1,755 1,275 3,030 – Net income/(loss) for the year ..... — — — — — — — — — — 4,390 4,390 1,283 5,673 at December 31, 2010 restated ..... 9,403 5,292 1,881 2,262 14,345 456 80 796 — 24 3,450 37,989 15,877 53,866 Dividends and interim dividends(2) . . . — — — — (1,695) — — — — — (940) (2,635) (719) (3,354) Allocation of net income from the previousyear...... — — — — 3,450 — — — — — (3,450) —— — Changeinscopeofconsolidation.... — — — — (269) — — — — — — (269) (237) (506) Disposal of equity interests without lossofcontrol...... — — — — — — — (47) — — — (47) — (47) Transactions in non-controlling interests ...... — — — — — — — — 78 — — 78 7 85 Comprehensive income for the year...... — — — — — (336) (129) — — (9) 4,148 3,674 722 4,396 of which: – Income/(Loss) recognized directly in equity ...... — — — — — (336) (129) — — (9) — (474) (488) (962) – Net income/(loss) for the year ..... — — — — — — — — — — 4,148 4,148 1,210 5,358 at December 31, 2011 ...... 9,403 5,292 1,881 2,262 15,831 120 (49) 749 78 15 3,208 38,790 15,650 54,440

(1) Authorized by the Board of Directors on September 29, 2010, with the ex-dividend date set at November 22, 2010 and payment as from November 25, 2010. (2) Authorized by the Board of Directors on September 28, 2011, with the ex-dividend date set at November 21, 2010 and payment as from November 24, 2011. Consolidated Statement of Cash Flows Notes 2011 2010

of which of which with related with related parties parties

Millions of euro Net income for the year ...... 5,358 5,673 Adjustments for: Amortizationandimpairmentlossesofintangibleassets..... 1,102 999 Depreciation and impairment losses of property, plant and equipment...... 4,730 4,511 Exchange rate adjustments of foreign currency assets and liabilities (including cash and cash equivalents) ...... 417 509 Accrualstoprovisions...... 387 1,812 Financial(income)/expense ...... 2,219 2,319 Incometaxes ...... 3,080 2,401 (Gains)/Losses from disposals and other non-monetary items ...... (73) 476 Cash flow from operating activities before changes in net current assets ...... 17,220 18,700 Increase/(Decrease)inprovisions...... (1,749) (1,705) (Increase)/Decreaseininventories ...... (334) (331) (Increase)/Decrease in trade receivables ...... 335 (408) (286) 426 (Increase)/Decrease in financial and non-financial assets/ liabilities ...... 571 80 190 (131) Increase/(Decrease)intradepayables ...... 567 527 1,256 (64) Interestincomeandotherfinancialincomecollected...... 1,371 29 1,282 21 Interestexpenseandotherfinancialexpensepaid...... (3,897) (7) (4,106) Incometaxespaid...... (2,371) (3,275) Cash flows from operating activities (a) ...... 11,713 11,725 Investmentsinproperty,plantandequipment ...... (6,957) (6,468) Investmentsinintangibleassets ...... (632) (719) Investments in entities (or business units) less cash and cash equivalentsacquired...... (153) (282) Disposals of entities (or business units) less cash and cash equivalentssold...... 165 2,610 (Increase)/Decrease in other investing activities ...... 177 (51) Cash flows from investing/disinvesting activities (b) ...... (7,400) (4,910) Financial debt (new long-term borrowing) ...... 26 10,486 5,497 Financialdebt(repaymentsandothernetchanges)...... (9,427) (10,748) Collection (net of incidental expenses) of proceeds from sale of equity holdings without loss of control ...... (51) 2,422 Dividendsandinterimdividendspaid ...... (3,517) (3,147) Cash flows from financing activities (c) ...... (2,509) (5,976) Impact of exchange rate fluctuations on cash and cash equivalents (d) ...... (74) 214 Increase/(Decrease) in cash and cash equivalents (a+b+c+d) ...... 1,730 1,053 Cashandcashequivalentsatbeginningoftheyear ...... 5,342 4,289 Cash and cash equivalents at the end of the year(1) ...... 7,072 5,342

(1) Of which cash and cash equivalents equal to €7,015 million at December 31, 2011 (€5,164 million at December 31, 2010), short-term securities equal to €52 million at December 31, 2011 (€95 million at December 31, 2010) and cash and cash equivalents pertaining to assets held for sale in the amount of €5 million at December 31, 2011 (€83 million at December 31, 2010).

F-131 Notes to the financial statements

1. Form and content of the financial statements Enel SpA, which operates in the energy utility sector, has its registered office in Viale Regina Margherita 137, Rome, Italy. The consolidated financial statements for the period ended December 31, 2011 comprises the financial statements of the Company, its subsidiaries and joint ventures (“the Group”) and the Group’s holdings in associated companies. A list of the subsidiaries, associated companies and joint ventures included in the scope of consolidation is reported in the annex. These financial statements were approved for publication by the Board on March 7, 2012.

Compliance with IFRS/IAS The consolidated financial statements for the year ended December 31, 2011 have been prepared in accordance with international accounting standards (International Accounting Standards — IAS and International Financial Reporting Standards — IFRS) issued by the International Accounting Standards Board (IASB), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC), recognized in the European Community pursuant to Regulation (EC) no. 1606/2002 and in effect as of the close of the year. All of these standards and interpretations are hereinafter referred to as the “IFRS-EU”. The financial statements have also been prepared in conformity with measures issued in implementation of Article 9, paragraph 3, of Legislative Decree 38 of February 28, 2005.

Basis of presentation The consolidated financial statements consist of the consolidated income statement, the statement of consolidated comprehensive income, the consolidated balance sheet, the statement of changes in consolidated equity and the consolidated statement of cash flows and the related notes. The assets and liabilities reported in the consolidated balance sheet are classified on a “current/non- current basis”, with separate reporting of assets held for sale and liabilities associated with assets held for sale. Current assets, which include cash and cash equivalents, are assets that are intended to be realized, sold or consumed during the normal operating cycle of the company or in the twelve months following the balance-sheet date; current liabilities are liabilities that are expected to be settled during the normal operating cycle of the company or within the twelve months following the close of the financial year. The consolidated income statement is classified on the basis of the nature of costs, while the indirect method is used for the consolidated statement of cash flows. The consolidated financial statements are presented in euro, the functional currency of the Parent Company Enel SpA. All figures are shown in millions of euro unless stated otherwise. The financial statements are prepared on a going-concern basis using the cost method, with the exception of items that are measured at fair value under IFRS-EU, as specified in the measurement policies for the individual items. The consolidated income statement, the consolidated balance sheet and the consolidated statement of cash flows report transactions with related parties, the definition of which is given in the next section.

F-132 and liabilities and the related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable in the circumstances. They are formulated when the carrying amount of assets and liabilities is not easily determined from other sources. The actual results may therefore differ from these estimates. The estimates and assumptions are periodically revised and the effects of any changes are reflected in the consolidated income statement if they only involve that period. If the revision involves both the current and future periods, the change is recognized in the period in which the revision is made and in the related future periods. In order to enhance understanding of the financial statements, the following sections examine the main items affected by the use of estimates and the cases that reflect management judgments to a significant degree, underscoring the main assumptions used by managers in measuring these items in compliance with the IFRS-EU. The critical element of such valuations is the use of assumptions and professional judgments concerning issues that are by their very nature uncertain. Changes in the conditions underlying the assumptions and judgments could have a substantial impact on future results.

F-133 Such assessments of the recoverable amount of assets are carried out in accordance with the provisions of IAS 36, as described in greater detail in note 16 below. In the case of assets held for sale, the assessment is obviously not based on a determination of the value in use of the assets but rather on the amount deemed recoverable through disposal, taking due account of offers already received from parties interested in acquiring the assets. Where the value of a group of non-current assets is considered to be impaired, it is written down to its recoverable value, as estimated on the basis of the use of the assets and their future disposal, in accordance with the company’s most recent plans. The estimates of such recoverable values are considered reasonable. Nevertheless, possible changes in the estimation factors on which the calculation of such values is performed could generate different recoverable values. The analysis of each group of non-current assets is unique and requires management to use estimates and assumptions considered prudent and reasonable in the specific circumstances.

Recovery of deferred tax assets At December 31, 2011, the financial statements report deferred tax assets in respect of tax losses to be reversed in subsequent years and income components whose deductibility is deferred in an amount whose recovery is considered by management to be highly probable. The recoverability of such assets is subject to the achievement of future profits sufficient to absorb such tax losses and to use the benefits of the other deferred tax assets. The assessment of recoverability takes account of the estimate of future taxable incomes and is based on prudent tax planning strategies. However, where the Group should become aware that it is unable to recover all or part of such recognized tax assets in future years, the consequent adjustment would be taken to the income statement in the year in which this circumstance arises.

Decommissioning and site restoration In calculating liabilities in respect of decommissioning and site restoration costs, especially for the decommissioning of nuclear power plants and the storage of waste fuel and other radioactive materials, the estimation of future costs is a critical process in view of the fact that such costs will be incurred over a very long period of time, estimated at up to 100 years. The obligation, based on financial and engineering assumptions, is calculated by discounting the expected future cash flows that the Company considers it will have to pay for the decommissioning operation.

F-134 The discount rate used to determine the present value of the liability is the pre-tax risk-free rate and is based on the economic parameters of the country in which the plant is located. That liability is quantified by management on the basis of the technology existing at the measurement date and is reviewed each year, taking account of developments in decommissioning and site restoration technology, as well as the ongoing evolution of the legislative framework concerning the protection of health and the environment. Subsequently, the value of the obligation is adjusted to reflect the passage of time and any changes in estimates.

Management judgments Identification of cash generating units (CGUs) In application of IAS 36 “Impairment of assets”, the goodwill recognized in the consolidated financial statements of the Group as a result of business combinations has been allocated to individual or groups of CGUs that will benefit from the combination. A CGU is the smallest group of assets that generates largely independent cash inflows. In identifying such CGUs, management took account of the specific nature of its assets and the business in which it is involved (geographical area, business area, regulatory framework, etc.), verifying that the cash flows of a given group of assets were closely interdependent and largely independent of those associated with other assets (or groups of assets). The assets of each CGU were also identified on the basis of the manner in which management manages and monitors those assets within the business model adopted. In particular, the CGUs identified in the Iberia and Latin America Division are represented by groups of electricity/gas production, distribution and sales assets in the Iberian peninsula and certain countries in Latin America. In view of the geographical, cultural and social similarities of the countries and markets in which they operate, and technical, regulatory operational performance aspects, many of these assets represent a single object of evaluation with closely interdependent cash flows. The CGUs identified in the Generation and Energy Management Division and the Sales Division are represented by assets resulting from business combinations involving gas regasification operations in Italy and the domestic retail gas market. The CGUs identified in the Renewable Energy Division are represented (with a number of minor exceptions made in Italy and Spain to reflect the Group organizational model) by the group of assets exclusively associated with the generation of electricity from renewable energy resources located in geographical areas considered uniform on the basis of regulatory and contractual aspects and characterized by a high degree of interdependence of business processes and substantial integration in the same geographical area. The CGUs identified in the International Division are represented by electricity generation and distribution/sales assets identified with business combinations and which constitute, by geographical area and business, individual units generating independent cash flows. The CGUs identified by management to which the goodwill recognized in these consolidated financial statements has been allocated are indicated in the section on intangible assets, to which the reader is invited to refer. The number and scope of the CGUs are updated systematically to reflect the impact of new business combinations and reorganizations carried out by the Group.

F-135 Determination of the existence of control IAS 27 “Consolidated and separate financial statements” defines control as power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence of control does not depend solely on ownership of a majority shareholding or the contractual form used in the acquisition. Accordingly management must use its judgment in determining whether specific situations give the Group the power to govern the financial and operating policies of the investee. For subsidiaries consolidated on a full line-by-line basis in these financial statements for which control does not derive from ownership of a majority of voting rights, management has analyzed any agreements with other investors in order to determine whether such agreements give the Group the power of governance indicated above, even though it holds a minority share of voting rights. In this assessment process, management also took account of potential voting rights (call options, warrants, etc.) in order to determine whether they would be currently exercisable as of the reporting date. Following such analysis, the Group consolidated certain companies on a line-by-line basis even though it does not hold more than half of the voting rights, as indicated in the attachment “Subsidiaries, associates and other significant equity investments of the Enel Group at December 31, 2011”, to which the reader is invited to refer.

Application of IFRIC 12 “Service concession arrangements” to the concessions held by the Group IFRIC 12 “Service concession arrangements” establishes that, depending on the characteristics of the concession arrangements, the infrastructure used to deliver public services shall be recognized under intangible assets or under financial assets, depending, respectively, on whether the concession holder has the right to charge users of the services or it has the right to receive a specified amount from the grantor agency. In assessing the applicability of these provisions for the Group, management closely analyzed existing concessions. On the basis of that analysis, the provisions of IFRC 12 are applicable to the infrastructure used for the concessions for the distribution of electricity of a number of companies in the Iberia and Latin America Division that operate in Brazil.

Related parties Related parties are mainly parties that have the same controlling entity as Enel SpA, companies that directly or indirectly through one or more intermediaries control, are controlled or are subject to the joint control of Enel SpA and in which the latter has a holding that enables it to exercise a significant influence. Related parties also include the Fopen and Fondenel pension funds, and the boards of auditors, key management personnel — and their close relatives — of Enel SpA and the companies over which it exercises direct or indirect control. Key management personnel comprises management personnel who have the power and direct or indirect responsibility for the planning, management and control of the activities of the company. They include company directors.

Subsidiaries Subsidiaries comprise those entities for which the Group has the direct or indirect power to determine their financial and operating policies for the purposes of obtaining the benefits of their activities. In assessing the existence of a situation of control, account is also taken of potential voting rights that are effectively exercisable or convertible. The figures of the subsidiaries are consolidated on a full line-by- line basis as from the date control is acquired until such control ceases. The acquisition of an additional stake in subsidiaries and the sale of holdings that do not result in the loss of control are considered transactions between owners. As such, the accounting effects of these transactions are recognized directly in consolidated equity.

F-136 Conversely, where a controlling interest is divested, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date are recognized through profit or loss.

Joint ventures Interests in joint ventures — enterprises over whose economic activities the Group exercises joint control with other entities — are consolidated using the proportionate method. The Group recognizes its share of the assets, liabilities, revenues and expenses on a line-by-line basis in proportion to the Group’s share in the entity from the date on which joint control is acquired until such control ceases. The following table reports the contribution of the main joint ventures to the aggregates in the consolidated financial statements: At Dec. 31, 2011 Hydro Dolomiti Enel RusEnergoSbyt Nuclenor Atacama Tejo Millions of euro Percentageconsolidation...... 49% 49.5% 50.0% 50.0% 38.9% Non-current assets ...... 328 55 70 234 200 Current assets ...... 11 71 78 69 55 Non-current liabilities ...... 91 2 63 34 160 Current liabilities ...... 12 47 20 58 32 Revenues ...... 402 1,226 92 195 82 Costs ...... 88 1,088 81 157 70 Where an interest is divested and as a result the Group no longer exercises joint control, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date is recognized through profit or loss.

Consolidation procedures The financial statements of subsidiaries used to prepare the consolidated financial statements were prepared at December 31, 2011 in accordance with the accounting policies adopted by the Parent Company.

F-137 All intercompany balances and transactions, including any unrealized profits or losses on transactions within the Group, are eliminated, net of the theoretical tax effect. Unrealized profits and losses with associates and joint ventures are eliminated for the part attributable to the Group. In both cases, unrealized losses are eliminated except when representative of impairment.

Translation of financial statements denominated in a foreign currency For the purposes of the consolidated financial statements, all profits/losses, assets and liabilities are stated in euro, which is the functional currency of the Parent Company, Enel SpA. In order to prepare the consolidated financial statements, the financial statements of consolidated companies in functional currencies other than the currency of the Parent Company are translated into euro by applying the relevant period-end exchange rate to the assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the period, which approximates the exchange rates prevailing at the date of the respective transactions, to the income statement items. Any resulting exchange rate gains or losses are recognized as a separate component of equity in a special reserve. The gains and losses are recognized proportionately in the income statement on the disposal (partial or total) of the subsidiary.

F-138 adjustments were recognized in equity. Any adjustments resulting from the completion of the measurement process were recognized within twelve months of the acquisition date. Business combinations carried out as from January 1, 2010 are recognized on the basis of IFRS 3 (2008), which is referred to as IFRS 3 (Revised) hereafter. More specifically, business combinations are recognized using the acquisition method, where the purchase cost is equal to the fair value at the purchase date of the assets acquired and the liabilities incurred or assumed, as well as any equity instruments issued by the purchaser. Costs directly attributable to the acquisition are recognized through profit or loss. This cost is allocated by recognizing the assets, liabilities and identifiable contingent liabilities of the acquired company at their fair values as at the acquisition date. Any positive difference between the price paid, measured at fair value as at the acquisition date, plus the value of any non-controlling interests, and the net value of the identifiable assets and liabilities of the acquiree measured at fair value is recognized as goodwill. Any negative difference is recognized in profit or loss. The value of the non-controlling interests is determined either in proportion to the interest held by minority shareholders in the net identifiable assets of the acquiree or at their fair value as at the acquisition date. If the fair values of the assets, liabilities and contingent liabilities can only be calculated on a provisional basis, the business combination is recognized using such provisional values. Any adjustments resulting from the completion of the measurement process are recognized within twelve months of the date of acquisition, restating comparative figures. In the case of business combinations achieved in stages, at the date of acquisition of control the holdings acquired previously are remeasured to fair value and any positive or negative difference is recognized in profit or loss.

Property, plant and equipment Property, plant and equipment is recognized at historic cost, including directly attributable ancillary costs necessary for the asset to be ready for use. It is increased by the present value of the estimate of the costs of decommissioning and restoring the asset where there is a legal or constructive obligation to do so. The corresponding liability is recognized under provisions for risks and charges. The accounting treatment of changes in the estimate of these costs, the passage of time and the discount rate is discussed under “Provisions for risks and charges”. Borrowing costs associated with financing directly attributable to the purchase or construction of assets that require a substantial period of time to get ready for its intended use or sale (qualifying assets) are capitalized as part of the cost of the assets themselves. Borrowing costs associated with the purchase/construction of assets that do not meet such requirement are expensed in the period in which they are incurred. Certain assets that were revalued at the IFRS-EU transition date or in previous periods are recognized at their fair value, which is considered to be their deemed cost at the revaluation date. Where major components of property, plant and equipment have different useful lives, the components are recognized and depreciated separately. Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred to replace a part of the asset will flow to the Group and the cost of the item can be reliably determined. All other expenditure is recognized as an expense in the period in which it is incurred.

F-139 The cost of replacing part or all of an asset is recognized as an increase in the value of the asset and is depreciated over its useful life; the net carrying amount of the replaced unit is eliminated through profit or loss, with the recognition of any capital gain or loss. Property, plant and equipment is reported net of accumulated depreciation and any impairment losses determined as set out below. Depreciation is calculated on a straight-line basis over the item’s estimated useful life, which is reviewed annually, and any changes are reflected on a prospective basis. Depreciation begins when the asset is ready for use. The estimated useful life of the main items of property, plant and equipment is as follows: Useful life Civilbuildings...... 10-61 years Hydroelectric power plants(1) ...... 35-65 years Thermal power plants(1) ...... 25-60 years Nuclearpowerplants ...... 15-40 years Geothermalpowerplants...... 10-30 years Alternativeenergypowerplants...... 11-40 years Transportlines...... 15-50 years Distributionplant ...... 14-40 years Meters ...... 6-18 years

(1) Excluding assets to be relinquished free of charge, which are depreciated over the duration of the concession if shorter than useful life. Land, both unbuilt and on which civil and industrial buildings stand, is not depreciated as it has an undetermined useful life. Assets recognized under property, plant and equipment are derecognized either at the time of their disposal or when no future economic benefit is expected from their use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets.

Leased assets Property, plant and equipment acquired under finance leases, whereby all risks and rewards incident to ownership are substantially transferred to the Group, are initially recognized as assets at the lower of fair value and the present value of the minimum lease payments due, including the payment required to exercise any purchase option. The corresponding liability due to the lessor is recognized under financial liabilities. The assets are depreciated on the basis of their useful lives. If it is not reasonably certain that the Group will acquire the assets at the end of the lease, they are depreciated over the shorter of the lease term and the useful life of the assets. Leases where the lessor retains substantially all risks and rewards incident to ownership are classified as operating leases. Operating lease costs are taken to profit or loss on a systematic basis over the term of the lease.

F-140 charge to the State in good operating condition. The Group believes that the existing ordinary maintenance programs ensure that the assets will be in good operating condition at the termination date. Accordingly, depreciation on assets to be relinquished is calculated over the shorter of the term of the concession and the remaining useful life of the assets. In accordance with Spanish laws 29/85 and 46/99, hydroelectric power stations in Spanish territory operate under administrative concessions at the end of which the plants will be returned to the government in good operating condition. The concessions will expire in the period between 2011 and 2067. A number of companies that operate in Argentina, Brazil and Mexico hold administrative concessions with similar conditions to those applied under the Spanish concession system. These concessions will expire in the period between 2013 and 2088. Enel also operates under administrative concessions for the distribution of electricity in Spain. The concessions give Endesa the right to build and operate distribution networks for an indefinite period of time. The Group is a concession holder in Italy for the distribution of electricity. The concession, granted by the Ministry for Economic Development, was issued free of charge and terminates on December 31, 2030. If the concession is not renewed upon expiry, the grantor is required to pay an indemnity. The amount of the indemnity will be determined by agreement of the parties using appropriate valuation methods, based on both the balance-sheet value of the assets themselves and their profitability. In determining the indemnity, such profitability will be represented by the present value of future cash flows. The infrastructure serving the concessions is owned and available to the concession holder. It is recognized under “Property, plant and equipment” and is depreciated over their useful lives.

Investment property Investment property consists of the Group’s real estate held to generate rental income or capital gains rather than for use in operations or the delivery of goods and services. Investment property is initially recognized at cost in the same manner as other property, plant and equipment. Subsequently, it is measured at cost net of depreciation, as calculated over a useful life of 40 years, and any impairment losses. Impairment losses are determined on the basis of the following criteria. The fair value of investment property is determined on the basis of the state of the individual assets, projecting the valuations for the previous year in relation to the performance of the real estate market and estimated developments in the value of the assets. The fair value of investment property recognized at December 31, 2011, as determined on the basis of appraisals by independent experts, is equal to €317 million. Investment property is derecognized either at the time of its disposal or when no future economic benefit is expected from its use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets.

F-141 The cost includes any directly attributable incidental expenses necessary to make the assets ready for use. The assets, with a definite useful life, are reported net of accumulated amortization and any impairment losses, determined as set out below. Amortization is calculated on a straight-line basis over the item’s estimated useful life, which is checked at least annually; any changes in amortization policies are reflected on a prospective basis. Amortization commences when the asset is ready for use. Intangible assets with an indefinite useful life are not amortized systematically. Instead, they undergo impairment testing at least annually. Intangible assets are derecognized either at the time of their disposal or when no future economic benefit is expected from their use or disposal. Any gain or loss, recognized through profit or loss, is calculated as the difference between the net consideration received in the disposal, where present, and the net book value of the derecognized assets. Goodwill deriving from the acquisition of subsidiaries, associated companies or joint ventures is allocated to each of the cash-generating units identified. After initial recognition, goodwill is not amortized but is tested for recoverability at least annually using the criteria described in the notes. Goodwill relating to equity investments in associates is included in their carrying amount.

Impairment losses Property, plant and equipment, investment property and intangible assets are reviewed at least once a year to determine whether there is evidence of impairment. If such evidence exists, the recoverable amount of any property, plant and equipment and intangible assets is estimated. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. The latter is represented by the present value of the estimated future cash flows generated by the asset in question. Value in use is determined by discounting estimated future cash flows using a pre- tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the asset. The recoverable amount of assets that do not generate independent cash flows is determined based on the cash-generating unit to which the asset belongs. If an asset’s carrying amount or that of the cash-generating unit to which it is allocated is higher than its recoverable amount, an impairment loss is recognized in the income statement. Impairment losses of cash generating units are first charged against the carrying amount of any goodwill attributed to it and then against the value of other assets, in proportion to their carrying amount. If the reasons for a previously recognized impairment loss no longer apply, the carrying amount of the asset is restored through profit or loss in an amount that shall not exceed the net carrying amount the asset would have had if the impairment loss had not been recognized and depreciation or amortization had been performed. The recoverable amount of goodwill and intangible assets with an indefinite useful life as well as that of intangible assets not yet available for use is tested for recoverability annually or more frequently if there is evidence suggesting that the assets may be impaired. The original value of goodwill is not restored even if in subsequent years the reasons for the impairment no longer apply.

Inventories Inventories are measured at the lower of cost and net estimated realizable value except for inventories — essentially CO2 allowances — involved in trading activities, which are measured at fair value with recognition through profit or loss. Average weighted cost is used, which includes related ancillary charges. Net estimated realizable value is the estimated normal selling price net of estimated selling costs or, where applicable, replacement cost.

F-142 Inventories also include purchases of nuclear fuel, whose use is determined on the basis of the energy produced. Finally, property held for sale classified under inventories is measured at the lower of its specific cost and its market value.

Financial instruments Financial assets measured at fair value through profit or loss This category includes debt securities and equity investments in entities other than subsidiaries, associates and joint ventures held for trading and designated as at fair value through profit or loss at the time of initial recognition. Such assets are initially recognized at fair value. Subsequent to initial recognition of financial assets, gains and losses from changes in their fair value are recognized in the income statement.

F-143 assets that cannot be classified in other categories. These instruments are measured at fair value with changes recognized in shareholders’ equity. At the time of sale, or when a financial asset available for sale becomes an investment in a subsidiary as a result of successive purchases, the cumulative gains and losses previously recognized in equity are reversed to the income statement. Where there is objective evidence that such assets have incurred an impairment loss, the cumulative loss previously recognized in equity is eliminated through reversal to the income statement. Such impairment losses, which cannot be reversed, are calculated as the difference between the carrying amount of the asset and its fair value, determined on the basis of the market price at the balance sheet date for financial assets listed on regulated markets or on the basis of the present value of expected future cash flows, discounted using the market interest rate for unlisted financial assets. When the fair value cannot be determined reliably, these assets are recognized at cost adjusted for any impairment losses.

F-144 Derivative financial instruments Derivatives are recognized at fair value and are designated as hedging instruments when the relationship between the derivative and the hedged item is formally documented and the effectiveness of the hedge (assessed periodically) meets the thresholds envisaged under IAS 39. When the derivatives are used to hedge the risk of changes in the fair value of hedged assets or liabilities, any changes in the fair value of the hedging instrument are taken to profit or loss. The adjustments in the fair values of the hedged assets or liabilities are also taken to profit or loss. When derivatives are used to hedge the risk of changes in the cash flows generated by the hedged items (cash flow hedges), changes in fair value are initially recognized in equity, in the amount qualifying as effective, and are recognized in profit or loss only when the change in the cash flows from the hedged items to be offset actually occurs. The ineffective portion of the fair value of the hedging instrument is taken to profit or loss. Changes in the fair value of trading derivatives and those that no longer qualify for hedge accounting under IAS 39 are recognized in profit or loss. Derivative financial instruments are recognized at the trade date. Financial and non-financial contracts (that are not already measured at fair value) are analyzed to identify any embedded derivatives, which are separated and measured at fair value. This analysis is conducted at the time the entity becomes party to the contract or when the contract is renegotiated in a manner that significantly changes the original associated cash flows. Fair value is determined using the official prices for instruments traded on regulated markets. For instruments not traded on regulated markets fair value is determined on the basis of the present value of expected cash flows using the market yield curve at the reporting date and translating amounts in currencies other than the euro at end-year exchange rates. The Group also analyzes all forward contracts for the purchase or sale of non-financial assets, with a specific focus on forward purchases and sales of electricity and energy commodities, in order to determine if they must be classified and treated in conformity with IAS 39 or if they have been entered into for physical delivery in line with the normal purchase/sale/use needs of the company (own use exemption). If such contracts have not been entered into in order to obtain or deliver electricity or energy commodities, they are measured at fair value.

Fair value hierarchy pursuant to IFRS 7 Š Assets and liabilities measured at fair value are classified in a three-level hierarchy as described below, in consideration of the inputs used to determine such fair value.

F-145 Š In particular: Š Level 1 includes financial assets or liabilities measured at fair value on the basis of quoted prices in active markets for such instruments (unadjusted); Š Level 2 includes financial assets/liabilities measured at fair value on the basis of inputs other than those included in Level 1 but that are observable either directly or indirectly on the market; Š Level 3 includes financial assets/liabilities whose fair value was calculated using inputs not based on observable market data.

Post-employment and other employee benefits Liabilities related to employee benefits paid upon or after ceasing employment in connection with defined benefit plans or other long-term benefits accrued during the employment period are determined separately for each plan, using actuarial assumptions to estimate the amount of the future benefits that employees have accrued at the balance sheet date (the projected unit credit method). The liability, which is carried net of any plan assets, is recognized on an accruals basis over the vesting period of the related rights. These appraisals are performed by independent actuaries. As regards liabilities in respect of defined-benefit plans, the cumulative actuarial gains and losses at the end of the previous year exceeding 10% of the greater of the present value of the defined benefit obligation and the fair value of the plan assets at that date are recognized in profit or loss over the expected average remaining working lives of the employees participating in the plan. Otherwise, they are not recognized. Where there is a demonstrable commitment, with a formal plan without realistic possibility of withdrawal, to a termination before retirement eligibility has been reached, the benefits due to employees in respect of the termination are recognized as a cost and measured on the basis of the number of employees that are expected to accept the offer. In the event of a change being made to an existing defined-benefit plan or the introduction of a new plan, any past service cost is recognized immediately in profit or loss if the benefits of the change or introduction have already vested or amortized on a straight-line basis over the average period until the benefits become vested. In the case of changes to or the introduction of other long-term benefits, any past service cost is recognized immediately in profit or loss in its entirety.

F-146 The calculation method to determine the fair value considers all characteristics of the RSU (term, exercise conditions, etc.), as well as the price and volatility of Enel shares over the vesting period. The pricing model used is the Monte Carlo method. This cost is recognized in the income statement, with recognition of a specific liability, over the vesting period, adjusting the fair value periodically, considering the best estimate possible of the number of RSU that will become exercisable.

Provisions for risks and charges Accruals to the provisions for risks and charges are recognized where there is a legal or constructive obligation as a result of a past event at period-end, the settlement of which is expected to result in an outflow of resources whose amount can be reliably estimated. Where the impact is significant, the accruals are determined by discounting expected future cash flows using a pre-tax discount rate that reflects the current market assessment of the time value of money and, if applicable, the risks specific to the liability. If the provision is discounted, the periodic adjustment for the time factor is recognized as a financial expense. Where the liability relates to decommissioning and/or site restoration in respect of property, plant and equipment, the initial recognition of the provision is made against the related asset and the expense is then recognized in profit or loss through the depreciation of the asset involved. Where the liability regards the treatment and storage of nuclear waste and other radioactive materials, the provision is recognized against the related operating costs. Changes in estimates of accruals to the provision are recognized in the income statement in the period in which the changes occur, with the exception of those in the costs of dismantling, removal and remediation resulting from changes in the timetable and costs necessary to extinguish the obligation or a change in the discount rate. These changes increase or decrease the value of the related assets and are taken to the income statement through depreciation. Where they increase the value of the assets, it is also determined whether the new carrying amount of the assets is fully recoverable. If this is not the case, a loss equal to the unrecoverable amount is recognized in the income statement. Decreases in estimates are recognized up to the carrying amount of the assets. Any excess is recognized immediately in the income statement. For more information on the estimation criteria adopted in determining provisions for dismantling and/or restoration of property, plant and equipment, especially those associated with nuclear power plants, please see the section on the use of estimates.

F-147 Revenues Revenues are recognized when it is probable that the future economic benefits will flow to the Company and these benefits can be measured reliably. More specifically, the following criteria are used depending on the type of transaction: Š revenues from the sale of goods are recognized when the significant risks and rewards of ownership are transferred to the buyer and their amount can be reliably determined; Š revenues from the sale and transport of electricity and gas refer to the quantities provided during the period, even if these have not yet been invoiced, and are determined using estimates as well as the fixed meter reading figures. Where applicable, this revenue is based on the rates and related restrictions established by law or the Authority for Electricity and Gas and analogous foreign authorities during the applicable period. In particular, the authorities that regulate the electricity and gas markets can use mechanisms to reduce the impact of the temporal mismatching between the setting of prices for energy for the regulated market as applied to distributors and the setting of prices by the latter for final consumers; Š revenues from the rendering of services are recognized in line with the stage of completion of the services. Where it is not possible to reliably determine the value of the revenues, they are recognized in the amount of the costs that it is considered will be recovered; Š revenues accrued in the period in respect of construction contracts are recognized on the basis of the payments agreed in relation to the stage of completion of the work, determined using the cost-to-cost method, under which costs, revenues and the related margins are recognized on the basis of the progress of the project. The stage of completion is determined as a ratio between costs incurred at the measurement date and the overall costs expected for the project. In additional to contractual payments, project revenues include any payments in respect of variations, price revisions and incentives, with the latter recognized where it is probable that they will actually be earned and can be reliably determined. Revenues are also adjusted for any penalties for delays attributable to the Company; Š revenues for fees for connection to the electricity distribution grid are recognized in full upon completion of connection activities if the service provided can be recognized separately from any electricity distribution services provided on an ongoing basis.

Income taxes Current income taxes for the period are determined using an estimate of taxable income and in conformity with the applicable regulations. Deferred tax liabilities and assets are calculated on the temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding values recognized for tax purposes on the basis of tax rates in effect on the date the temporary difference will reverse, which is determined on the basis of tax rates that are in force or substantively in force at the balance sheet date. Deferred tax assets are recognized when recovery is probable, i.e. when an entity expects to have sufficient future taxable income to recover the asset. The recoverability of deferred tax assets is reviewed at each period-end.

F-148 Deferred tax assets and liabilities in respect of taxes levied by the same tax authority are offset if the Company has a legal right to offset current tax assets against current tax liabilities generated at the time they reverse. Current and deferred taxes are recognized in profit or loss, with the exception of those in respect of components directly credited or debited to equity, which are recognized directly in equity.

Discontinued operations and non-current assets held for sale Non-current assets (or disposal groups) whose carrying amount will mainly be recovered through sale, rather than through ongoing use, are classified as held for sale and shown separately from the other balance sheet assets and liabilities. This only occurs when the sale is highly probable and the non-current assets (or disposal groups) are available in their current condition for immediate sale. Non-current assets (or disposal groups) classified as held for sale are first recognized in compliance with the appropriate IFRS/IAS applicable to the specific assets and liabilities and subsequently measured at the lower of the carrying amount and the fair value, net of costs to sell. Any subsequent impairment losses are recognized as a direct adjustment to the non-current assets (or disposal groups) classified as held for sale and expensed in the income statement. The corresponding values for the previous period are not reclassified. A discontinued operation is a component of an entity that has been divested or classified as held for sale and: Š represents a major line of business or geographical area of operations; Š is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; Š or is a subsidiary acquired exclusively with a view to resale. Gains or losses on operating assets sold — whether disposed of or classified as held for sale — are shown separately in the income statement, net of the tax effects. The corresponding values for the previous period, where present, are reclassified and reported separately in the income statement, net of tax effects, for comparative purposes.

3. Recently issued accounting standards First-time adoption and applicable standards The Group has adopted the following international accounting standards and interpretations taking effect as from January 1, 2011: Š IAS 24 — Related party disclosures: the standard replaces the previous version of IAS 24. It allows companies that are subsidiaries or under the significant influence of a government agency to provide summary disclosure of transactions with the government agency and with other companies controlled or under the significant influence of the government agency. The new version of IAS 24 also amends the definition of related parties for the purposes of disclosure in the notes to the financial statements. Š The retrospective application of IAS 24 did not have an impact during the period.

F-149 Š Amendments to IFRIC 14 — Prepayments of a Minimum Funding Requirement: the changes clarify the accounting treatment under the so-called asset ceiling rules, in cases of prepayment of a minimum funding requirement (MFR). More specifically, the amended interpretation sets out new rules for measuring the economic benefits of reducing future MFR contributions. Š The retrospective application of the amendments did not have a significant impact during the period. Š IFRIC 19 — Extinguishing financial liabilities with equity instruments: the interpretation clarifies the accounting treatment that a debtor must apply in the case of liability being extinguished through the issue of equity instruments to the creditor. In particular, the equity instruments issued represent the consideration for extinguishing the liability and must be measured at fair value as of the date of extinguishment. Any difference between the carrying amount of the extinguished liabilities and the initial value of the equity instruments shall be recognized through profit or loss. Š The retrospective application of the interpretation did not have an impact during the period. Š Amendments to IAS 32 — Financial instruments — Presentation: the amendment specifies that rights, options or warrants that entitle the holder to purchase a specific number of equity instruments of the entity issuing such rights for a specified amount of any currency shall be classified as equity instruments if (and only if) they are offered pro rata to all existing holders of the same class of equity instruments (other than derivatives). Š The retrospective application of the amendments did not have a significant impact during the period. Š Improvements to International Financial Reporting Standards: the changes regard improvements to existing standards. The main developments applicable to the financial statements regard: Š IFRS 3 — Business combinations, as revised in 2008: specifies that non-controlling interests in an acquiree that are present ownership interests entitle their holders, in the event of the liquidation of the company, to a proportionate share of the entity’s net assets. They must be measured at fair value or as a proportionate share of the acquiree’s net identifiable assets. All other components classifiable as non-controlling interests but which do not have the above characteristics (for example, share options, preference shares, etc.) must be measured at fair value at the acquisition date unless other measurement criteria are provided for under international accounting standards. Š The prospective application of IFRS 3 as from the date of first-time adoption of IFRS 3 by the Group (2010 financial year) did not have an impact during the period. Š IFRS 7 — Financial instruments: Disclosures: specifies that for each class of financial instrument, disclosure of the Company’s maximum exposure to credit risk is mandatory only if the carrying amount of such instruments does not reflect that exposure. It also requires disclosures concerning the financial effect of collateral and other credit enhancements (e.g. a quantification of the extent to which the collateral and other credit enhancements mitigate credit risk). It also clarifies that the disclosures required for financial and non-financial assets obtained during the period by taking possession of collateral are mandatory only in the case such assets were still held at the end of the period. Finally, disclosure is no longer required on the carrying amount of financial assets that would have been past due or impaired if their terms had not been renegotiated and it is no longer necessary to quantify the fair value of the collateral and other credit enhancements of past-due financial assets that are not impaired. The retrospective application of these changes did not have a significant impact during the period.

F-150 Š IAS 1 — Presentation of financial statements: specifies that the analysis of each element of “other comprehensive income” (OCI) can be presented either in the statement of changes in equity or in the notes to the financial statements. Š The retrospective application of the amendment did not have an impact on these financial statements. Š IFRIC 13 — Customer loyalty programs: the amendment regards the determination of the fair value of award credits. It specifies that when the fair value is determined on the basis of the fair value of the awards for which the award credits can be redeemed, account must be taken of the amount of discounts or incentives to customers who did not obtain award credits in conjunction with a sale (customers who are not participating in the scheme). The previous version required that fair value to be reduced to take account of awards offered to that type of customer. The retrospective application of the amendment did not have a significant impact on these financial statements.

Standards not yet adopted and not yet applicable In 2011, the European Commission endorsed the following new accounting standards and interpretations, which will be applicable to the Group as from January 1, 2012: Š “Amendments to IFRS 7 — Financial instruments: Disclosures”, issued in October 2010; the amendments require additional disclosures to assist users of financial statements to assess the exposure to risk in the transfer of financial assets and the impact of such risks on the Company’s financial position. The amended standard introduces new disclosure requirements, to be reported in a single note, concerning transferred financial assets that have not been derecognized and transferred assets in which the company has a continuing involvement as of the balance sheet date. The Group is assessing the potential impact of the future application of the measures. In 2009, 2010 and 2011, the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) also published new standards and interpretations that as of December 31, 2011, had not yet been endorsed by the European Commission. The rules that could have an impact on the financial statements of the Group are set out below: Š “IFRS 9 — Financial instruments”, issued in November 2009 and revised in October 2010: the standard is the first of three phases in the project to replace IAS 39. The standard establishes new criteria for the classification of financial assets and liabilities. Financial assets must be classified based on the business model of the entity and the characteristics of the associated cash flows. The new standard requires financial assets and liabilities to be measured initially at fair value plus any transaction costs directly attributable to their assumption or issue. Subsequently, they are measured at fair value or amortized cost, unless the fair value option is applied. As regards equity instruments not held for trading, an entity can make an irrevocable election to measure them at fair value through other comprehensive income. Any dividend income shall be recognized through profit or loss. The new standard, which was amended in December 2011 with regard to the effective date, will take effect, subject to endorsement, for periods beginning on or after January 1, 2015. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 9 and IFRS 7 — Mandatory effective date and transition disclosure”, issued in December 2011. The amendment modifies IFRS 9 — Financial instruments, postponing the mandatory effective date from January 1, 2013 to January 1, 2015 and establishing new rules for the transition from IAS 39 to IFRS 9. It also modifies IFRS 7

F-151 Financial instruments: Disclosures, introducing new comparative disclosures, which will be mandatory or optional depending on the date of transition to IFRS 9. The amendments establish that companies that adopt IFRS 9 for the first time always have the option of not restating prior periods. More specifically, companies that adopt IFRS 9 for reporting periods beginning before January 1, 2012 are not required to restate prior periods or provide the additional disclosures to those already provided for following the amendments made to IFRS 7 with the issue of IFRS 9; companies that adopt IFRS 9 for periods beginning from January 1, 2012 until December 31, 2012 may elect to either restate prior periods or provide the additional comparative disclosures in accordance with the amendments to IFRS 7; companies that adopt IFRS 9 for periods beginning from January 1, 2013 until January 1, 2015, are required to provide the additional comparative disclosures in accordance with the amendments to IFRS 7 regardless of whether they restate prior periods, which they may but are not required to do. Š The amendments will take effect, subject to endorsement, for periods beginning on or after January 1, 2015. The Group is assessing the potential impact of the future application of the measures. Š “IFRS 10 — Consolidated financial statements”, issued in May 2011; replaces SIC 12 — Consolidation — Special purpose entities and, for the part concerning consolidated financial statements, IAS 27 — Consolidated and separate financial statements, the title of which was changed to “Separate financial statements”. The standard introduces a new approach to determining whether an entity controls another (the essential condition for consolidating an investee), without modifying the consolidation procedures envisaged in the current IAS 27. This approach must be applied to all investees, including special purpose entities, which are called “structured entities” in the new standard. While current accounting standards give priority — where control does not derive from holding a majority of actual or potential voting rights — to an assessment of the risks/benefits associated with the holding in the investee, IFRS 10 focuses the determination on three elements to be considered in each assessment: power over the investee; exposure to variable returns from the involvement in the investee; and the link between power and returns, i.e. the ability to use that decision-making power over the investee to affect the amount of returns. The accounting effects of a loss of control or a change in the ownership interest that does not result in a loss of control are unchanged with respect to the provisions of the current IAS 27. Following the new approach to assessing the existence of control, previously consolidated companies could exit the scope of consolidation, and vice-versa. Š The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “IFRS 11 — Joint arrangements”, issued in May 2011; replaces IAS 31 — Interests in joint ventures and SIC 13 — Jointly controlled entities — non-monetary contributions by venturers. Unlike IAS 31, which assesses joint arrangements on the basis of the contractual form adopted, IFRS 11 assesses on the basis of how the related rights and obligations are attributed to the parties. In particular, the new standard identifies two types of joint arrangement: joint operations, where the parties to the arrangement have pro-rata rights to the assets and pro-rata obligations for the liabilities relating to the arrangement; and joint ventures, where the parties have rights to the net assets or results of the arrangement. In the consolidated financial statements, accounting for an interest in a joint operation involves the recognition of the assets/liabilities and revenues/expenses related to the arrangement on the basis of the associated rights/obligations, without taking account of the interest held.

F-152 Accounting for an interest in a joint venture involves the recognition of an investment accounted for using the equity method (proportionate consolidation is no longer permitted). Š The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “IFRS 12 — Disclosure of interests in other entities”, issued in May 2011; IFRS 12 brings together in a single standard the required disclosures concerning interests held in subsidiaries, joint operations and joint ventures, associates and structured entities. In particular, the standard requires the disclosures called for in the current IAS 27, IAS 28 and IAS 31, which were amended appropriately, and introduces new disclosure requirements. Š The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “IFRS 13 — Fair value measurement”, issued in May 2011; the standard represents a single IFRS framework to be used whenever another accounting standard requires or permits the use of fair value measurement. The standard sets out guidelines for measuring fair value and, in addition, introduces specific disclosure requirements. Š The new standard will take effect prospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “IAS 27 — Separate financial statements”, issued in May 2011. Together with the issue of IFRS 10 and IFRS 12, the current IAS 27 was amended, with changes to its title and its content. All provisions concerning the preparation of consolidated financial statements were eliminated, while the other provisions were not modified. Following the amendment, the standard therefore only specifies the recognition and measurement criteria and the disclosure requirements for separate financial statements concerning subsidiaries, joint ventures and associates. The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group does not expect the future application of the measures to have an impact. Š “IAS 28 — Investments in associates and joint ventures”, issued in May 2011. Together with the issue of IFRS 11 and IFRS 12, the current IAS 28 was amended, with changes to its title and its content. In particular, the new standard, which also includes the provisions of SIC 13 — Jointly controlled entities — non-monetary contributions by venturers, describes the application of the equity method, which in consolidated financial statements is used to account for associates and joint ventures. The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “Amendment to IAS 1 — Presentation of items of other comprehensive income”, issued in June 2011. The amendment calls for the separate presentation of items of other comprehensive income (OCI) that may be reclassified to profit or loss in the future (“recycling”) and those that will not be recycled. The amendment will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group does not expect the future application of the measures to have a significant impact. Š “IAS 19 — Employee benefits”, issued in June 2011; the standard supersedes the current IAS 19 governing the accounting treatment of employee benefits. The most significant change regards the requirement to recognize all actuarial gains/losses in OCI, with the elimination of

F-153 the corridor approach. The amended standard also: introduces more stringent rules for disclosures, with the disaggregation of the cost into three components; eliminates the expected return of plan assets; no longer permits the deferral of the recognition of past service cost; provides for enhanced disclosures; and introduces more detailed rules for the recognition of termination benefits. The new standard will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “IFRIC 20 — Stripping costs in the production phase of a surface mine”, issued in October 2011; the interpretation sets out the accounting treatment to be applied to costs incurred for the removal of mine waste materials during the production phase, clarifying when they can be recognized as an asset. The interpretation will take effect, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. More specifically, the interpretation will apply to costs incurred as from the first year presented in the financial statements. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IAS 32 — Offsetting financial assets and financial liabilities”, issued in December 2011. IAS 32 — Financial instruments establishes that a financial asset and a financial liability should be offset and the net amount reported in the balance sheet when, and only when, an entity: Š a) has a legally enforceable right to set off the amounts; and Š b) intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Š The amendments to IAS 32 clarify the conditions that must be met for these two requirements to be satisfied. As regards the first requirement, the amendment expands the illustration of cases in which an entity “currently has a legally enforceable right of set-off”, while as regards the second the amendment clarifies that where the entity settles the financial asset and liability separately, for set-off to be allowed the associated credit and liquidity risk should be significant and, in this regard, specifies the characteristics that gross settlement systems must have. The amendments will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2014. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 7 — Offsetting financial assets and financial liabilities”, issued in December 2011, in parallel with the amendments to IAS 32; the amendments establish more extensive disclosures for the offsetting of financial assets and liabilities, with a view to enabling users of financial statements to assess the actual and potential effects on the entity’s financial position of netting arrangements, including the set-off rights associated with recognized assets or liabilities. The amendments will take effect retrospectively, subject to endorsement, for annual reporting periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures.

4. Main changes in the scope of consolidation In the two periods under review, the scope of consolidation changed as a result of the following main transactions:

2010 Š acquisition, on June 1, 2010, of control of SE Hydropower, which operates in the generation of electricity in the Province of Bolzano. Control was acquired with the transfer to the company

F-154 of certain generation assets of Enel Produzione. Despite holding only 40% of the company, since the acquisition date the Group has consolidated it on a full line-by-line basis under specific shareholders’ agreements concerning the governance of the company. Under those agreements, among other things, control will be retained by the Enel Group until the approval of the financial statements for the year ending December 31, 2013, the date from which a number of changes in the company’s governance arrangements are scheduled to take effect, giving rise to a transition from exclusive Enel control to joint control by the two shareholders. As a result of this change in the scope of consolidation during the year, 2010 reflected the performance of SE Hydropower operations for the final seven months of the year only. As regards the financial position, the Group elected the option envisaged under IFRS 3 to allocate the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed on a provisional basis. During the course of 2011, the Group completed the allocation of the transferred consideration. The effects of the definitive allocation have been retrospectively presented as from June 1, 2010, in accordance with IFRS 3; Š disposal, on July 1, 2010, of 50.01% of Endesa Hellas, a Greek company operating in the renewables generation sector; Š disposal, on December 17, 2010, of 80% of Nubia 2000 (now Endesa Gas T&D), a company owning assets (acquired during the year by Endesa Gas) in the gas transport and distribution industry in Spain. The sale also includes a 35% stake in Gas Aragon, which had previously been acquired by Nubia 2000.

F-155 Š disposal, on June 28, 2011, to Contour Global LP of the entire capital of the Dutch companies Maritza East III Power Holding BV and Maritza O&M Holding Netherland BV. These companies respectively own 73% of the Bulgarian company Enel Maritza East 3 AD and 73% of the Bulgarian company Enel Operations Bulgaria AD; Š disposal, on November 30, 2011, of 51% of Deval and Vallenergie to Compagnia Valdostana delle Acque, a company owned by the Region of Valle d’Aosta, which already held the remaining 49% of the companies involved; Š acquisition, on December 1, 2011, of 33.33% of San Floriano Energy, a company operating in the hydroelectric generation sector, with the transfer of in-kind and cash consideration by Enel Produzione. With the transfer, the Enel Group acquired joint control of the company, together with another two partners participating in the investment; Š acquisition, on December 1, 2011, of 50% of Sviluppo Nucleare Italia, in which the Group already held a stake of 50%, giving it joint control with Electricité de France; as from that date the company has been consolidated on a line-by-line basis. In the consolidated balance sheet at December 31, 2011, “Assets held for sale” and “Liabilities held for sale” include the assets and related liabilities of Endesa Ireland and other minor entities (including Wisco), as the state of negotiations for their sale to third parties qualifies them for application of IFRS 5. Accordingly, the decrease in these items compared with December 31, 2010, essentially reflects the above disposals carried out in 2011.

Redetermination of the fair value of the assets and liabilities of Hydro Dolomiti Enel following loss of control On May 12, 2008 Enel Produzione established Hydro Dolomiti Enel (HDE) in execution of the investment agreement concerning the “joint operation of the hydroelectric generation assets in the Autonomous Province of Trento” between Dolomiti Energia and Enel Produzione. With effect from July 15, 2008 Enel Produzione, in performance of that agreement and once certain conditions had been met, including the extension until December 31, 2020, of the duration of the major hydroelectric water diversion concessions, transferred electricity generation assets to the subsidiary HDE, consisting of the hydroelectric plants in the Autonomous Province of Trento and the associated major and small public water diversion concessions for hydroelectric purposes. On July 25, 2008, Enel Produzione transferred 51% of HDE to Dolomiti Energia, thereby performing the terms of the agreement, which in a related shareholders’ agreement established governance arrangements for the first three years of the company, i.e. until approval of the financial statements for 2010, that gave Enel control over the company, enabling Enel to consolidate its results on a full, line-by-line basis. As from April 1, 2011, following approval of the financial statements for 2010 and the election of the new board of directors, the governance arrangements were adjusted in line with the terms of the agreement. Accordingly, as from that date HDE is subject to the joint control of Enel Produzione and Dolomiti Energia and is consolidated by Enel on a proportionate basis up to the extent of its holding (49%). In application of the provisions of IAS 27 (Revised), this development represents the loss of control over the company, even without any actual change in the percentage interest held in the entity but only as a result of the entry into force of the new provisions of the contractual arrangements between the shareholders, with the consequent remeasurement to fair value of the related assets and liabilities to a degree amount corresponding to the holding remaining after the loss of control.

F-156 The following table summarizes the impact on the accounts of the fair value remeasurement of the assets and liabilities of HDE for the part corresponding to Enel’s holding after the loss of control (49%). Financial position at Remeasurement New value at April 1, 2011 at fair value April 1, 2011 Millions of euro Property,plantandequipment ...... 82 129 211 Intangible assets ...... 24 108 132 Deferred tax assets ...... 3 — 3 Non-current assets ...... 109 237 346 Current assets ...... 61 — 61 Total assets ...... 170 237 407 Post-employment and other employee benefits ...... 2 — 2 Provisionsforrisksandcharges...... 5 — 5 Deferred tax liabilities ...... — 87 87 Non-current liabilities ...... 78794 Current liabilities ...... 101 — 101 Equity pertaining to shareholders of the Parent Company...... 62 150 212 Non-controlling interests ...... — — — Total shareholders’ equity ...... 62 150 212 Total liabilities and shareholders’ equity .... 170 237 407

The impact of remeasurement at fair value, equal to €237 million, was recognized under “Other revenues and income” in the consolidated income statement. Taking account of the deferred tax effect, the initial recognition of the transaction had a total impact on the consolidated income statement and equity pertaining to the shareholders of the Parent Company of €150 million. The effects of the increase in depreciation and amortization, net of the associated tax impact, as a result of the adjustment of certain assets to their fair value, are not considered material.

Acquisition of full control (from joint control) of the assets of Enel Unión Fenosa Renovables (EUFER) On May 30, 2011, Enel Green Power SpA and its subsidiary Enel Green Power España SL (EGPE) finalized the agreement signed with Gas Natural SDG SA (Gas Natural) on July 30, 2010 for the break-up of Enel Unión Fenosa Renovables SA (EUFER), a joint venture between EGPE and Gas Natural, subject to a number of conditions set out in the accord. For the purposes of the split, EUFER assets were divided in two parts (“Lot 1” and “Lot 2”) considered equivalent in terms of value, EBITDA, installed capacity, risk and technology mix. The break-up of EUFER was finalized by means of the return by EGPE to Gas Natural of 50% of its capital, carried out through the demerger from EUFER of the net assets in Lot 2 and their transfer to Gas Natural. With this operation, EGPE acquired full control of EUFER and its remaining assets, namely Lot 1. Those assets had previously been consolidated on a proportionate basis. As at December 31, 2010, taking account of the contractual agreements with Gas Natural at that date and in compliance with IFRS 5, the Group had already classified, in view of the likelihood of the completion of the transaction, an amount corresponding to 50% of the carrying amount of the assets and liabilities comprising Lot 2 as “assets held for sale” and “liabilities held for sale”. The transfer, in 1st Half of 2011, to Gas Natural of the net assets of Lot 2, of which the Group held 50% under the previous proportionate consolidation of the company, involved the recognition of a gain of €44 million. In addition, as noted earlier, the transaction enabled Enel to acquire full control of the Spanish company, which as

F-157 from the effective date of the break-up was therefore consolidated on a full line-by-line basis rather than proportionately. As Enel acquired control of EUFER through successive transactions, the final operation, which resulted in the acquisition of control, was accounted for in accordance with IFRS 3 (Revised) for business combinations achieved in stages. In particular, the remeasurement at fair value of the assets and liabilities in respect of Lot 1 led to the recognition of a gain of €76 million, corresponding to the increase in the fair value of the 50% of the assets and liabilities already held by the Group compared with their previous carrying amount. The following table summarizes the effects of the business combination, which were recognized in 2011 on a definitive basis following completion of the price allocation process.

Calculation of goodwill Millions of euro Net assets acquired before allocation(1) ...... 15 Fair value adjustments: –property,plantandequipment ...... 101 – intangible assets ...... 63 – deferred tax liabilities ...... (39) Net assets acquired after allocation ...... 140 Cost of the transaction(2) ...... 140 Goodwill from acquisition ...... — Goodwill existing in respect of 50% of EUFER already held by the Group ...... 45 Goodwill ...... 45

(1) Net assets stated in proportion to Enel’s holding. (2) Equal to the fair value of the assets transferred to Gas Natural.

Final allocation of the purchase price to the assets acquired and liabilities assumed in respect of SE Hydropower On June 1, 2010, Enel Produzione SpA transferred to SE Hydropower Srl, a company wholly owned by Società Elettrica Altoatesina (SEL), its hydroelectric plants in the Autonomous Province of Bolzano and the associated major hydroelectric diversion concessions expiring on December 31, 2010. Prior to the transfer, SE Hydropower had been awarded renewals, as from January 1, 2011, for those concessions and a number of others all with a duration of 30 years. Through the transfer, carried out at book values, Enel Produzione acquired 40% of SE Hydropower and, on the basis of the governance arrangements established in the shareholders’ agreement, began to exercise control, enabling Enel to consolidate the results of the company on a full line-by-line basis. For the Enel Group the transaction represents a business combination carried out through the transfer to SE Hydropower of the assets noted above, over which Enel continues to exercise control, with the acquisition of an interest in the company, which holds the major diversion concessions for 2011-2040. The price of the business combination is therefore equal to 60% of the estimated fair value of the assets transferred by Enel Produzione, corresponding both to SEL’s stake in SE Hydropower following the transfer and the share of the fair value of the concessions acquired by the Group following the transaction. In compliance with the provisions of IFRS 3 (Revised), in the condensed interim consolidated financial statements at June 30, 2010, and the consolidated financial statements at December 31, 2010, the calculation of the fair value of the assets acquired and the liabilities and contingent liabilities assumed as at the acquisition date was carried out on a provisional basis as a number of valuation procedures had not yet been completed. The process of allocating the consideration to the

F-158 fair value of the assets acquired and the liabilities assumed was completed during the 1st Half of 2011 by the deadline established under IFRS 3 (Revised) and involved the allocation of the entire consideration transferred in the transaction to the value of the concessions acquired, net of the related deferred tax effects.

Effect of purchase price allocation Millions of euro Net assets acquired before allocation ...... — Fair value adjustments: – intangible assets (concessions renewed for the period 2011-2040) ...... 510 – deferred tax liabilities ...... (189) – non-controlling interests ...... (193) Net assets acquired after allocation ...... 128 Cost of the transaction(1) ...... 128 Goodwill ...... —

(1) Equal to 60% of the fair value of the assets transferred to SE Hydropower and net of the theoretical tax effect. In addition, the assets transferred by Enel Produzione were not adjusted in their measurement at fair value but continue to be recognized, even after the business combination, at their previous carrying amount since the Group retained control. The overall impact of the initial recognition of the transaction on equity pertaining to the shareholders of the Parent Company was equal to €128 million. The following table reports the final fair values of the assets acquired and the liabilities and contingent liabilities assumed as at the acquisition date.

Financial position of SE Hydropower Srl as at the acquisition date Final fair value New carrying amounts Carrying amounts at adjustments carried recognized at June 1, June 1, 2010 out in 2011 2010 Millions of euro Property, plant and equipment . . . 48 — 48 Intangible assets ...... — 510 510 Deferred tax assets ...... 1 — 1 Other current and non-current assets ...... 1 — 1 Total assets ...... 50 510 560 Equity pertaining to the shareholders of the Parent Company ...... 20 128 148 Non-controlling interests ...... 30 193 223 Deferred tax liabilities ...... — 189 189 Total shareholders’ equity and liabilities ...... 50 510 560

F-159 Final allocation of the purchase price to the assets acquired and liabilities assumed in respect of San Floriano Energy On November 1, 2011, Enel Produzione, pursuant to the agreement signed on October 26, 2011, with Dolomiti Energia SpA and SEL Srl, acquired 33.33% of San Floriano Energy with the transfer of the “San Floriano plant” business unit “, composed of the hydroelectric generation plant and a number of items of working capital of an operational nature, and cash consideration. Prior to the transfer, San Floriano Energy had been awarded the renewal, as from January 1, 2011, for a period of 30 years, of the major hydroelectric diversion concession. Taking account of the governance arrangements and its own interest, Enel exercise joint control over the company and therefore consolidates it on a proportionate basis to the extent of its percentage interest. The allocation of the purchase price to the fair value of the assets acquired and the liabilities and contingent liabilities assumed involved the allocation of the entire positive price differential to the value of the concession.

Effect of the acquisition and purchase price allocation Millions of euro Net assets acquired before allocation ...... 3 Fair value adjustments – intangible assets ...... 33 – deferred tax liabilities ...... 12 Net assets acquired after allocation ...... 24 Cost of the transaction(1) ...... 24 Goodwill ...... —

(1) Equal to the fair value of the assets transferred to San Floriano Energy, over which the Group lost control.

Final allocation of the purchase price to the assets acquired and liabilities assumed in respect of Sviluppo Nucleare Italia In 2009 Enel and EDF, with the entry into force of Law 99 of July 23, 2009 (the “Development Act”) founded Sviluppo Nucleare Italia (SNI), with each company holding 50%. Following the repeal in 2011 of the provisions of the Development Act and of the subsequent Legislative Decree 31/2010, on December 1, 2011, Enel and EDF agreed to terminate all existing agreements. On that date, Enel, acting through its subsidiary Enel Ingegneria e Innovazione, acquired the 50% interest held by EDF in Sviluppo Nucleare for €10 million, acquiring full control of the company. In the consolidated financial statements at December 31, 2011, following completion of the business combination achieved in stages, the transaction was accounted for pursuant to IFRS 3 (Revised), allocating the purchase price to the fair values of the assets acquired and the liabilities and contingent liabilities assumed with the acquisition. In completing the allocation process, as no differences were found between the carrying amount of the assets acquired and liabilities assumed, the related fair value and the price of the transaction, no goodwill was recognized. For the same reason, the Group did not recognize any gain or loss connected with the remeasurement at fair value of the assets and liabilities held in SNI prior to the acquisition of exclusive control.

F-160 Effect of purchase price allocation Millions of euro Net assets acquired before allocation ...... 10 Fairvalueadjustments...... — Net assets acquired after allocation ...... 10 Costofthetransaction ...... 10 Goodwill ...... —

Increase in the stake held in Ampla Energia e Serviços, Ampla Investimentos e Serviços and Electrica Cabo Blanco In October 2011 the Group acquired from EDP Energias de Portugal an additional 7.70% of Ampla Energia e Serviços (concession holder for electricity distribution services in the state of Rio de Janeiro) and 7.70% of Ampla Investimentos e Serviços (which in turn holds an interest in Companhia Energética do Ceará (Coelce), concession holder for the same services in the state of Ceará) for a total of €85 million. In addition, in January 2011, the Group also acquired an additional 20% of Electrica Cabo Blanco, in which it already held the remaining 80%, for €8 million. In compliance with the provisions of IFRS 3 (Revised) concerning transactions involving non-controlling interests, the difference between the price paid and the value of the assets acquired, previously attributed to non-controlling interests, were recognized in consolidated equity. The effects of the transactions were as follows:

Effect of acquisitions Millions of euro Net assets acquired ...... 171 Costofthetransactions...... 93 Reserve from transactions in non-controlling interests ...... 78

Acquisition of full control of Sociedad Eólica de Andalucía and TP-Sociedade Térmica Portuguesa On March 31, 2011, the Group acquired an additional 16.67% of Sociedad Eólica de Andalucía — SEA, raising the stake held by Enel Green Power España from 46.67% to 63.34% and giving it full control as the majority shareholder. Analogously, on June 9, 2011, Enel Green Power España acquired an additional 50% of Sociedade Térmica Portuguesa, thereby becoming the sole shareholder of the Portuguese company. The process of allocating the purchase price in the two business combinations was completed during 2011. As the transactions qualified as business combinations achieved in stages, this also involved the remeasurement at fair value of the net assets previously held. That remeasurement, which was recognized through profit or loss pursuant to IFRS 3 (Revised), amounted to a total of €45 million. The effects of the initial recognition of the acquisitions are set out in the following table.

Effects of acquisitions and purchase price allocation Millions of euro Net assets acquired before allocation ...... 18 Fair value adjustments: – intangible assets ...... 34 – deferred tax liabilities ...... 6 – non-controlling interests ...... 9 Net assets acquired after allocation ...... 37 Costofthetransaction ...... 48 Goodwill ...... 11

F-161 Other minor transactions by the Renewable Energy Division In 2011 the Renewable Energy Division paid €10 million to acquire 100% stakes in Tecnoservice (with an impact of €1 million on goodwill) and IRIS 2006 (with an impact of €3 million on goodwill). The Division also paid success fees in respect of a number of projects of Enel Green Power Hellas (€61 million) and Enel Green Power Romania (€38 million). Those amounts were all allocated to intangible assets during the year.

5. Restatement of comparative figures at December 31, 2010 As a result of the determination of the final fair value of the assets acquired and the liabilities and contingent liabilities assumed as at the acquisition date (June 1, 2010) in respect of the SE Hydropower business combination discussed above, the figures for the consolidated financial statements at December 31, 2010 have been restated, with a consequent increase in consolidated equity pertaining to the shareholders of the Parent Company of €128 million and in equity pertaining to non-controlling interests of €193 million. Since the price paid in the transaction was entirely allocated to the value of the concessions, which took effect as from January 1, 2011, it was not necessary to restate the published income statement as there was not impacted by the result for the previous year. Similarly, in application of IAS 1, it was felt unnecessary to restate the balance sheet at January 1, 2010, as it preceeded the moment of restrospective application of the effects of the business combination and therefore had no impact on the completion of the purchase price allocation process. Effect of SE at Dec. 31, 2010 at Dec. 31, 2010 Hydropower PPA restated Millions of euro ASSETS Non-current assets Property,plantandequipment...... 78,094 — 78,094 Investmentproperty...... 299 — 299 Intangible assets ...... 39,071 510 39,581 Deferred tax assets ...... 6,017 — 6,017 Equity investments accounted for using the equitymethod...... 1,033 — 1,033 Non-current financial assets ...... 4,701 — 4,701 Other non-current assets ...... 1,062 — 1,062 [Total] ...... 130,277 510 130,787 Current assets Inventories...... 2,803 — 2,803 Trade receivables ...... 12,505 — 12,505 Tax receivables ...... 1,587 — 1,587 Current financial assets ...... 11,922 — 11,922 Cash and cash equivalents ...... 5,164 — 5,164 Other current assets ...... 2,176 — 2,176 [Total] ...... 36,157 — 36,157 Assets held for sale ...... 1,618 — 1,618 TOTAL ASSETS ...... 168,052 510 168,562

F-162 Effect of SE at Dec. 31, 2010 at Dec. 31, 2010 Hydropower PPA restated Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital ...... 9,403 — 9,403 Other reserves ...... 10,791 — 10,791 Retained earnings (loss carried forward) ...... 14,217 128 14,345 Netincomefortheperiod...... 3,450 — 3,450 [Total] ...... 37,861 128 37,989 Non-controlling interests ...... 15,684 193 15,877 TOTAL SHAREHOLDERS’ EQUITY ...... 53,545 321 53,866 Non-current liabilities Long-termloans...... 52,440 — 52,440 Post-employment and other employee benefits ...... 3,069 — 3,069 Provisionsforrisksandcharges...... 9,026 — 9,026 Deferred tax liabilities ...... 11,147 189 11,336 Non-current financial liabilities ...... 2,591 — 2,591 Other non-current liabilities ...... 1,244 — 1,244 [Total] ...... 79,517 189 79,706 Current liabilities Short-term loans ...... 8,209 — 8,209 Current portion of long-term loans ...... 2,999 — 2,999 Tradepayables ...... 12,373 — 12,373 Incometaxpayable ...... 687 — 687 Current financial liabilities ...... 1,672 — 1,672 Other current liabilities ...... 8,052 — 8,052 [Total] ...... 33,992 — 33,992 Liabilities held for sale ...... 998 — 998 TOTAL LIABILITIES ...... 114,507 189 114,696 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 168,052 510 168,562

In addition, in order to present the effects recognized in the previous year associated with transactions in equity interests without loss of control, the comparative data were reclassified (in the amount of €796 million) from consolidated comprehensive income directly to equity reserves. The reclassification therefore did not have an impact on equity at December 31, 2010.

F-163 instruments, while changes in the exchange rate between the euro and the main foreign currencies have an impact on the value of the cash flows denominated in those currencies and the consolidation value of equity investments denominated in foreign currencies. In compliance with Group policies for managing financial risks, these exposures are generally hedged using over-the-counter derivatives (OTC). Enel also engages in proprietary trading in order to maintain a presence in the Group’s reference energy commodity markets. These operations consist in taking on exposures in energy commodities

(oil products, gas, coal, CO2 certificates and electricity in the main European countries) using financial derivatives and physical contracts traded on regulated and OTC markets, exploiting profit opportunities through transactions carried out on the basis of expected market developments. These operations are conducted within the framework of formal governance rules that establish strict risk limits. Compliance with the limits is verified daily by units that are independent of those undertaking the transactions. In 2011, the risk limits for Enel’s proprietary trading are set in terms of Value-at-Risk over a 1-day time horizon and a confidence level of 95%; the sum of the limits for 2011 is equal to about €34 million. The scale of transactions in derivatives outstanding at December 31, 2011, is reported below, with specification of the fair value and notional amount of each class of instrument as calculated at the year-end exchange rates provided by the European Central Bank where denominated in currencies other than the euro. Fair value is determined using the official prices for instruments traded on regulated markets. The fair value of instruments not listed on regulated markets is determined using valuation methods appropriate for each type of financial instrument and market data as of the close of the period (such as interest rates, exchange rates, volatility), discounting expected future cash flows on the basis of the market yield curve at the balance sheet date and translating amounts in currencies other than the euro using year-end exchange rates provided by the European Central Bank. Where possible, contracts relating to commodities are measured using market prices related to the same regulated and unregulated market instruments. The measurement criteria adopted for open derivatives positions at the end of the year were unchanged with respect to those used at the end of the previous year. The impact of such measurements on profit or loss and shareholders’ equity are therefore attributable solely to normal market developments. The notional amount of a derivative contract is the amount on the basis of which cash flows are exchanged. This amount can be expressed as a value or a quantity (for example tons, converted into euro by multiplying the notional amount by the agreed price). Amounts denominated in currencies other than the euro are converted into euro at the exchange rate prevailing at the balance-sheet date. The notional amounts of derivatives reported here do not necessarily represent amounts exchanged between the parties and therefore are not a measure of the Company’s credit risk exposure. The financial assets and liabilities associated with derivative instruments are classified as: Š cash flow hedge derivatives, related to hedging the risk of changes in cash flows associated with long-term floating-rate borrowings, hedging the exchange rate risk associated with long- term debt denominated in foreign currencies, the provisioning of fuels priced in foreign currencies, hedging revenues from the sale of electricity under a number of contracts entered into by Enel (two-way contracts for differences and other energy derivatives) and hedging the risk of changes in the prices of coal and oil commodities; Š fair value hedge derivatives, related to hedging the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk;

F-164 Š derivatives hedging net investments in foreign operations from the translation risk in respect of the consolidation of equity investments denominated in a foreign currency; Š trading derivatives associated with proprietary trading in commodities or hedging interest and exchange rate risk or commodity risk which it would be inappropriate to designate as cash flow hedges/fair value hedges or which do not meet the formal requirements of IAS 39.

Interest rate risk The twin objectives of reducing the amount of debt subject to changes in interest rates and of containing borrowing costs is pursued with the use of a variety of derivatives contracts, notably interest rate swaps, interest rate options and swaptions. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Interest rate swaps normally provide for the periodic exchange of floating-rate interest flows for fixed-rate interest flows, both of which are calculated on the basis of the notional principal amount. Interest rate options involve the exchange of interest differences calculated on a notional principal amount once certain thresholds (strike prices) are reached. These thresholds specify the effective maximum rate (cap) or the minimum rate (floor) on the debt as a result of the hedge. Hedging strategies can also make use of combinations of options (collars) that establish the minimum and maximum rates at the same time. In this case, the strike prices are normally set so that no premium is paid on the contract (zero cost collars). Such contracts are normally used when the fixed interest rate that can be obtained in an interest rate swap is considered too high with respect to Enel’s expectations for future interest rate developments. In addition, interest rate options are also considered appropriate in periods of uncertainty about future interest rate developments, in order to benefit from any decreases in interest rates. The following table reports the notional amount of interest rate derivatives at December 31, 2011 and December 31, 2010 broken down by type of contract: Notional amount 2011 2010 Millions of euro Interestrateswaps...... 12,984 12,628 Interestrateoptions...... 2,700 4,308 Total ...... 15,684 16,936

F-165 The following table reports the notional amount and fair value of interest rate derivatives at December 31, 2011 and December 31, 2010, broken down by designation (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec.31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2011 2010 2011 2010 2011 2010 2011 2010

Millions of euro Cash flow hedge derivatives: Interestrateswaps..... 10,007 9,432 (613) (497) 6 8 (619) (505) Interest rate options . . . 1,000 3,608 (8) (64) — — (8) (64) Fair value hedge derivatives: Interestrateswaps..... 83 98 14 9 14 9 — — Trading derivatives: Interestrateswaps..... 2,894 3,098 (122) (163) 6 8 (128) (171) Interest rate options . . . 1,700 700 (13) (19) — — (13) (19) Total interest rate swaps ...... 12,984 12,628 (721) (651) 26 25 (747) (676) Total interest rate options ...... 2,700 4,308 (21) (83) — — (21) (83) TOTAL INTEREST RATE DERIVATIVES .... 15,684 16,936 (742) (734) 26 25 (768) (759)

The following table reports the cash flows expected in coming years from these financial derivatives: Expected cash flows from interest rate derivatives Fair value Stratification of expected cash flows at Dec. 31, 2011 2012 2013 2014 2015 2016 Beyond Millions of euro CFH on interest rates Positive fair value ...... 6 (6) (8) 5 — — — Negativefairvalue...... (627) (201) (157) (120) (65) (31) (171) FVH on interest rates Positive fair value ...... 1422111 3 Negativefairvalue...... —————— — Trading derivatives on interest rates Positive fair value ...... 6321—— — Negativefairvalue...... (141) (71) (28) (16) (6) (5) (50) The amount of floating-rate debt that is not hedged against interest rate risk is the main risk factor that could impact the income statement (raising borrowing costs) in the event of an increase in market interest rates. At December 31, 2011, 31% of net long-term financial debt was floating rate (39% at December 31, 2010). Taking account of cash flow hedges of interest rates considered effective pursuant to the IFRS–EU, 9% of the debt was exposed to interest rate risk at December 31, 2011 (14% at December 31, 2010). Including interest rate derivatives treated as hedges for management purposes but ineligible for hedge accounting, the residual exposure would be 4% (7% at December 31, 2010).

F-166 If interest rates had been 25 basis points higher at December 31, 2011, all other variables being equal, shareholders’ equity would have been €68.3 million higher (€75 million at December 31, 2010) as a result of the increase in the fair value of CFH derivatives on interest rates. Conversely, if interest rates had been 25 basis point lower at that date, all other variables being equal, shareholders’ equity would have been €68.3 million lower (€75 million at December 31, 2010) as a result of the decrease in the fair value of CFH derivatives on interest rates. An equivalent increase (decrease) in interest rates, all other variables being equal, would have a negative (positive) impact on the income statement in terms of higher (lower) interest expense on the portion of debt not hedged against interest rate risk of about €4.75 million.

Exchange rate risk Exchange rate risk is mainly generated with the following transaction categories: Š debt denominated in currencies other than the functional currency of the respective countries entered into by the holding company or the individual subsidiaries; Š cash flows in respect of the purchase or sale of fuel or electricity on international markets; Š cash flows in respect of investments in foreign currency, dividends from unconsolidated foreign companies or the purchase or sale of equity investments. In order to minimize this risk, the Group normally uses a variety of over-the-counter (OTC) derivatives such as currency forwards, currency swaps, cross currency interest rate swaps and currency options. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Cross currency interest rate swaps are used to transform a long-term fixed- or floating-rate liability in foreign currency into an equivalent fixed- or floating-rate liability in euros. In addition to having notionals denominated in different currencies, these instruments differ from interest rate swaps in that they provide both for the periodic exchange of cash flows and the final exchange of principal. Currency forwards are contracts in which the counterparties agree to exchange principal amounts denominated in different currencies at a specified future date and exchange rate (the strike). Such contracts may call for the actual exchange of the two amounts (deliverable forwards) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity (non- deliverable forwards). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank. Currency swaps are combinations of spot purchases and sales (currency spot) and forward purchases and sales (currency forward) of flows denominated in different currencies and are generally used to hedge commercial paper issues. Currency options involve the purchase (or sale) of the right to exchange, at an agreed future date, two principal amounts denominated in different currencies on specified terms (the contractual exchange rate represents the option strike price); Such contracts may call for the actual exchange of the two amounts (deliverable) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity (non-deliverable). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank.

F-167 The following table reports the notional amount of transactions outstanding at December 31, 2011 and December 31, 2010, broken down by type of hedged item: Notional amount 2011 2010 Millions of euro Cross currency interest rate swaps (CCIRSs) hedging debt denominated in currenciesotherthantheeuro...... 14,442 13,934 Currency forwards hedging exchange rate risk on commodities ...... 7,273 7,055 Currency forwards hedging future cash flows in currencies other than euro ...... 1,232 393 Currencyswapshedgingcommercialpaper ...... 240 334 Currencyforwardshedgingcreditlines...... 201 161 Otherforwardcontracts ...... — 230 Total ...... 23,388 22,107

More specifically, these include: Š CCIRSs with a notional amount of €14,442 million to hedge the exchange rate risk on debt denominated in currencies other than the euro (€13,934 million at December 31, 2010); Š currency forwards with a total notional amount of €8,505 million used to hedge the exchange rate risk associated with purchases of fuel, imported electricity and expected cash flows in currencies other than the euro (€7,448 million at December 31, 2010); Š currency swaps with a total notional amount of €240 million used to hedge the exchange rate risk associated with redemptions of commercial paper issued in currencies other than the euro (€334 million at December 31, 2010); Š currency forwards with a total notional amount of €201 million used to hedge the exchange rate risk associated with credit lines in currencies other than the euro (€161 million at December 31, 2010). The following table reports the notional amount and fair value of exchange rate derivatives at December 31, 2011 and December 31, 2010, broken down by designation (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2011 2010 2011 2010 2011 2010 2011 2010

Millions of euro Cash flow hedge derivatives: – currency forwards . . . 3,751 3,014 297 (11) 304 34 (7) (45) –CCIRSs ...... 13,985 13,419 (347) (886) 1,297 671 (1,644) (1,557) Fair value hedge derivatives: –CCIRSs ...... 457 515 18 (6) 30 15 (12) (21) Trading derivatives: – currency forwards . . . 5,195 5,159 18 (73) 153 55 (135) (128) Total forwards ...... 8,946 8,173 315 (84) 457 89 (142) (173) Total CCIRS ...... 14,442 13,934 (329) (892) 1,327 686 (1,656) (1,578) TOTAL EXCHANGE RATE DERIVATIVES .... 23,388 22,107 (14) (976) 1,784 775 (1,798) (1,751)

F-168 The following table reports the cash flows expected in coming years from these financial derivatives:

Expected cash flows from exchange rate derivatives Fair value Stratification of expected cash flows at Dec. 31, 2011 2012 2013 2014 2015 2016 Beyond Millions of euro CFH on exchange rates Positive fair value ...... 1,601 369 174 223 86 (36) 1,295 Negativefairvalue...... (1,651) (251) (96) (228) (341) (175) (755) FVH on exchange rates Positive fair value ...... 30 8 7 (1) 13 (7) (4) Negativefairvalue...... (12) (9) 1111 1 Trading derivatives on exchange rates Positive fair value ...... 153 134 13 1 — — — Negativefairvalue...... (135) (130) (3) — — — — An analysis of the Group’s financial debt shows that 30% of medium- and long-term debt (30% at December 31, 2010) is denominated in currencies other than the euro. Taking account of exchange rate hedges and the portion of debt denominated in the functional currency of the country in which the Group company holding the debt position operates, the proportion of unhedged debt denominated in currencies other than the euro decreases to about 4% (2% at December 31, 2010), a proportion that is felt would not have a significant impact on the Group’s income statement in the event of a change in market exchange rates. At December 31, 2011, assuming a 10% appreciation of the euro against the dollar, all other variables being equal, shareholders’ equity would have been €1,650 million lower (€1,449 million at December 31, 2010) as a result of the decrease in the fair value of CFH derivatives on exchange rates. Conversely, assuming a 10% depreciation of the euro against the dollar, all other variables being equal, shareholders’ equity would have been €2,028 million higher (€1,780 million at December 31, 2010) as a result of the increase in the fair value of CFH derivatives on exchange rates.

Commodity risk The exposure to the risk of changes in commodity prices is associated with the purchase of fuel for power plants and the purchase and sale of gas under indexed contracts as well as the purchase and sale of electricity at variable prices (indexed bilateral contracts and sales on Power Exchange). The exposures on indexed contracts are quantified by breaking down the contracts that generate exposure into the underlying risk factors. Various types of derivatives are used to reduce the exposure to fluctuations in energy commodity prices and as part of proprietary trading activities (mainly forwards, swaps, commodity options, futures and contracts for differences). Enel manages the risks associated with transactions in commodities used for the Group’s core business and the general risks generated by proprietary trading separately. Each company/business unit is assigned specific risk limits for each industrial or proprietary trading portfolio. Enel assesses and monitors compliance with the assigned risk limits in terms of Profit-at-Risk for the monthly exposures generated by the energy commodity industrial portfolios and in terms of Value-at-Risk with regard to the daily exposures generated by proprietary trading activities. As regards electricity sold by the Group, Enel uses fixed-price contracts in the form of bilateral physical contracts and financial contracts (e.g. contracts for differences, VPP contracts, etc.) in

F-169 which differences are paid to the counterparty if the market electricity price exceeds the strike price and to Enel in the opposite case. The residual exposure in respect of the sale of energy on the spot market not hedged with such contracts is quantified and managed on the basis of an estimation of developments in generation costs. The residual positions thus determined are aggregated on the basis of uniform risk factors that can be hedged in the market. The following table reports the notional amount and fair value of derivative contracts relating to commodities at December 31, 2011 and December 31, 2010. Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2011 2010 2011 2010 2011 2010 2011 2010

Millions of euro Cash flow hedge derivatives: – energy derivatives . . . 1,753 1,862 (54) 43 18 65 (72) (22) – swaps on oil commodities ...... — 89 — 11 — 11 — — – derivatives on coal . . 880 830 (62) 173 — 175 (62) (2) – derivatives on gas . . . 584 524 (10) 48 1 48 (11) — Trading derivatives: – energy derivatives . . . 18,956 13,042 40 (55) 81 59 (41) (114) – swaps on oil commodities ...... 8,488 5,934 (27) 119 1,847 350 (1,874) (231) – futures/options on oil commodities ...... 1,450 229 (7) (5) 30 3 (37) (8) – derivatives on coal . . 332 896 (2) 31 20 147 (22) (116) – embedded derivatives ...... 268 432 (267) (356) — 8 (267) (364) TOTAL COMMODITY DERIVATIVES .... 32,711 23,838 (389) 9 1,997 866 (2,386) (857)

Cash flow hedge derivatives refer to the physical positions in the underlying and, therefore, any negative (positive) change in the fair value of the derivative instrument corresponds to a positive (negative) change in the fair value of the underlying physical commodity, so the impact on the income statement is equal to zero. The following table shows the fair value of the derivatives and the consequent impact on shareholders’ equity at December 31, 2011 (gross of taxes) that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2011 -10% Scenario +10% Millions of euro Fair value of derivatives on energy in cash flow hedges ...... 93 (54) (204) Fair value of derivatives on coal in cash flow hedges ...... (148) (62) 23 Fair value of derivatives on gas in cash flow hedges ...... (40) (10) 20

F-170 The following table shows the fair value of derivatives and the consequent impact on the income statement and shareholders’ equity at December 31, 2011 (gross of taxes), that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2011 -10% Scenario +10% Millions of euro Fairvalueofderivativesonenergyintradingtransactions ...... (28) 40 85 Fair value of derivatives on oil commodities in trading transactions ...... (123) (34) 64 Fairvalueofderivativesoncoalintradingtransactions...... 25 (2) (32) Embedded derivatives relate to contracts for the purchase and sale of energy entered into by Slovenské elektrárne in Slovakia. The market value at December 31, 2011 came to a negative €267 million, composed of: a. an embedded derivative on the EUR/USD exchange rate whose fair value at December 31, 2011 wasanegative€139 million; b. a derivative on the price of gas whose fair value at December 31, 2011 was a negative €128 million. The following tables show the fair value at December 31, 2011, as well as the value expected from a 10% increase or decrease in the underlying risk factors.

Fair value embedded derivative (a) EUR/USD exchange rate Millions of euro Decrease of 10% ...... (150) Scenario at Dec. 31, 2011 ...... (139) Increase of 10% ...... (129)

Fair value embedded derivative (b) Gas price Millions of euro Decrease of 10% ...... (113) Scenario at Dec. 31, 2011 ...... (128) Increase of 10% ...... (139) The following table reports the cash flows expected in subsequent years from these financial derivatives on commodities. Fair value Stratification of expected cash flows at Dec. 31, 2011 2012 2013 2014 2015 2016 Beyond Millions of euro Cash flow hedge derivatives Positive fair value ...... 19 92222 2 Negativefairvalue...... (145) (145) ———— — Trading derivatives Positive fair value ...... 1,978 1,803 169411 — Negativefairvalue...... (2,241) (1,934) (313) 1 2 1 2

F-171 Credit risk Enel manages credit risk by operating solely with counterparties considered solvent by the market, i.e. those with high credit standing, and does not have any significant concentration of credit risk. The credit risk in respect of the derivatives portfolio is considered negligible since transactions are conducted solely with leading Italian and international banks, diversifying the exposure among different institutions and constantly monitoring their credit ratings. In addition, during the year Enel entered into margin agreements with the leading financial institutions with which it operates that call for the exchange of cash collateral, which significantly mitigates the exposure to counterparty risk. As part of activities related to purchasing fuels for thermal generation and the sale and distribution of electricity, the distribution of gas and the sale of gas to eligible customers, Enel grants trade credit to external counterparties. The counterparties selected are carefully monitored through the assessment of the related credit risk and the pledge of suitable guarantees and/or security deposits to ensure adequate protection from default risk. In addition, for specific segments of the trade portfolio, a number of assignments of receivables were carried out. The main transactions regarded the trade receivables of the Sales Division. More specifically, in the last quarter of 2011, the Group entered into a framework agreement with two leading banks for the ongoing non-recourse assignment of invoiced receivables and receivables to be invoiced for customers in the enhanced protection market in Italy. The agreement, which has a term of five years and is structured into 3-month revolving periods, provides for a maximum assignment amount of an estimated €14.4 billion a year.

Liquidity risk Within the Group, Enel SpA (directly and through its subsidiary Enel Finance International NV) manages the centralized Treasury function (with the exception of the Endesa Group, where that function is performed by Endesa SA and its subsidiaries Endesa Internacional BV and Endesa Capital SA), ensuring access to the money and capital markets. The Parent Company meets liquidity requirements primarily through cash flows generated by ordinary operations and drawing on a range of sources of financing. In addition, it manages any excess liquidity as appropriate. The Enel Group’s access to the credit market despite the recent financial crisis was confirmed by the successful placement of bonds for institutional investors amounting to €1.75 billion in July 2011 and €2.25 billion in October 2011. At December 31, 2011, the Enel Group had a total of about €7 billion in cash or cash equivalents, of which €2.7 billion held by Endesa, as well as total committed credit lines of €15.9 billion, of which €5.4 billion held by Endesa. The limits on the committed credit lines amounted to €25.5 billion (€9.6 billion drawn), of which €7.2 billion held by Endesa (€1.8 billion drawn). In addition, the Group had uncommitted credit lines totaling €2.7 billion (€0.8 billion drawn), of which €1.6 billion held by Endesa (€20 million drawn). Finally, the Group has outstanding commercial paper programs with a maximum ceiling of about €9 billion (€3.2 billion drawn), of which €3 billion held by Endesa through its subsidiaries (€1.2 billion drawn).

F-172 6.1 Derivatives contracts classified under non-current financial assets — €1,387 million The following table shows the notional amount and fair value of derivative contracts classified under non-current financial assets. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2011 2010 2011 2010 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 224 1,716 6 7 (1) –exchangerates...... 9,326 6,698 1,302 671 631 – commodities ...... 30 397 10 46 (36) Total ...... 9,580 8,811 1,318 724 594 Fair value hedge derivatives: –interestrates ...... 83 83 14 9 5 –exchangerates...... 262 264 30 15 15 Total ...... 345 347 44 24 20 Trading derivatives: –interestrates ...... 75 75 6 8 (2) –exchangerates...... 181 109 13 5 8 – commodities ...... 64 259 6 60 (54) Total ...... 320 443 25 73 (48) TOTAL ...... 10,245 9,601 1,387 821 566

At December 31, 2011, the notional amount of the cash flow hedge derivative contracts classified as non-current financial assets came to €9,580 million, with the corresponding fair value of €1,318 million. The cash flow hedge derivatives are essentially related to transactions hedging the exchange rate risk on bond issues in currencies other than the euro using cross currency interest rate swaps and the additional private placements issued by Enel Finance International and OGK-5 during 2011. The rise in the notional amount, equal to €2,628 million, was essentially attributable to the reclassification of certain transactions that at December 31, 2010 had been reported under “Non-current financial liabilities” to “Non-current financial assets” fair value due to a change in the sign of their fair values. The rise in the fair value was mainly due to developments in the exchange rate of the euro against the pound sterling. Commodity derivatives include: Š derivatives on energy with a fair value of €10 million classified as cash flow hedges and €5 million classified as trading transactions; Š trading derivatives entered into by Endesa with a fair value of €1 million.

F-173 The following table reports the fair value balances of derivatives with a positive fair value broken down by type of measurement inputs used. at Dec. 31, 2011 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates...... 6 — 6 — –exchangerates...... 1,302 — 1,302 — – commodities ...... 10 — 10 — Total ...... 1,318 — 1,318 — Fair value hedge derivatives: –interestrates...... 14 — 14 — –exchangerates...... 30 — 30 — Total ...... 44—44— Trading derivatives: –interestrates...... 6 — 6 — –exchangerates...... 13 — 13 — – commodities ...... 6 — 6 — Total ...... 25—25— TOTAL ...... 1,387 — 1,387 —

6.2 Derivatives contracts classified under current financial assets — €2,420 million The following table reports the notional amount and fair value of the derivative contracts, grouped by type and designation. Notional amount Fair value at Dec. 31, 2011 at Dec. 31, 2010 at Dec. 31, 2011 at Dec. 31, 2010 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... — 375 — 1 (1) –exchangerates...... 3,571 957 299 33 266 – commodities ...... 835 2,127 9 253 (244) Total ...... 4,406 3,459 308 287 21 Fair value hedge derivatives: –interestrates ...... — 15 — — — Total ...... —15——— Trading derivatives: –exchangerates...... 2,604 2,157 140 50 90 – commodities ...... 5,319 17,185 1,972 508 1,464 Total ...... 7,923 19,342 2,112 558 1,554 TOTAL ...... 12,329 22,816 2,420 845 1,575

F-174 Exchange rate derivatives, whether designated as trading transactions or cash flow hedges, essentially comprise transactions to hedge the exchange rate risk associated with the prices of energy commodities. The rise in the notional amount and fair value of these derivatives is mainly associated with normal operations. Commodity derivatives regard: Š derivatives on energy, classified as cash flow hedges, with a fair value of €8 million; Š derivatives on gas, classified as cash flow hedges, with a fair value of €1 million; Š commodity derivatives related to fuels and other commodities classified as trading derivatives, with a fair value of €1,897 million; Š trading transactions on energy, with a fair value of €75 million. The following table reports the fair value balances of derivatives with a positive fair value broken down by measurement inputs used, as provided for under the amendments of IFRS 7. at Dec. 31, 2011 Level 1 Level 2 Level 3

Millions of euro Cash flow hedge derivatives: –exchangerates...... 299 — 299 — – commodities ...... 9 — 9 — Total ...... 308 — 308 — Trading derivatives: –exchangerates...... 140 — 140 — – commodities ...... 1,972 466 1,506 — Total ...... 2,112 466 1,646 — TOTAL ...... 2,420 466 1,954 —

The balance for Level 1 essentially regards positions in futures on CO2 andonBrentlistedonthe Intercontinental Exchange (ICE).

F-175 6.3 Derivatives contracts classified under non-current financial liabilities — €2,307 million The following table reports the notional amount and fair value of the cash flow hedge, fair value hedge and trading derivatives. Notional amount Fair value at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2011 2010 2011 2010 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 6,316 10,704 600 566 34 –exchangerates...... 4,314 6,806 1,495 1,557 (62) – commodities ...... — 171 — 5 (5) Total ...... 10,630 17,681 2,095 2,128 (33) Fair value hedge derivatives: –exchangerates...... 11 215 6 19 (13) Total ...... 11 215 6 19 (13) Trading derivatives: –interestrates ...... 698 3,439 66 157 (91) –exchangerates...... 37 88 3 4 (1) – commodities ...... 166 452 137 283 (146) Total ...... 901 3,979 206 444 (238) TOTAL ...... 11,542 21,875 2,307 2,591 (284)

At December 31, 2011, the notional amount of derivatives classified under non-current financial liabilities came to €11,542 million, with a corresponding fair value of €2,307 million. Compared with December 31, 2010, these represent decreases of €10,333 million and €284 million, respectively. The decrease in the notional amount mainly involved interest rate derivatives in cash flow hedges and trading transactions. It is mainly attributable to the reclassification to “Current financial liabilities” of the derivatives used to hedge the debt entered into by Enel SpA and Enel Finance International in 2007 in respect of the syndicated credit line with an original value of €35 billion, which matures in April 2012, and Endesa derivatives. That reclassification includes €1,000 million in notional amount transferred from “Non-current financial liabilities — cash flow hedge derivatives” to “Current financial liabilities — trading derivatives” regarding interest rate hedges of debt entered into by Enel SpA that was overhedged following the voluntary early repayment of the underlying (Credit Facility). Cash flow hedge derivatives on exchange rates essentially regard the hedging (using cross currency interest rate swaps) of bond issues in currencies other than the euro. The fair value reflects the change in the value of the euro against the hedged currencies. Commodity derivatives mainly related to: Š embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €136 million; Š derivatives held by Endesa with a fair value of €1 million classified as trading derivatives.

F-176 The following table reports the fair value of derivatives with a negative fair value on the basis of the measurement inputs used. at Dec. 31, 2011 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates...... 600 — 600 — –exchangerates...... 1,495 — 1,495 — Total ...... 2,095 — 2,095 — Fair value hedge derivatives: –exchangerates...... 6 — 6 — Total ...... 6— 6— Trading derivatives: –interestrates...... 66 — 66 — –exchangerates...... 3 — 3 — – commodities ...... 137 — 72 65 Total ...... 206 — 141 65 TOTAL ...... 2,307 — 2,242 65

The balance for level 3 regards the embedded derivative (identified as embedded derivative B in note 6 to these consolidated financial statements) on the price of gas in an energy purchase contract entered into by Slovenské elektrárne in Slovakia. The contract was measured in two parts. In the first part, the market value of the electricity purchased was determined, while in the second part a Monte Carlo simulation is used to determine the value of the contract. The fair value of the contract is equal to the difference between the average values obtained from the simulation and the market value of the electricity acquired. Changes in the latter — which include the portion classified under current liabilities (see note 6.4), equal to €63 million at December 31, 2011 — are reported in the following table. Embedded derivatives of Slovenské elektrárne Millions of euro Opening balance at January 1, 2011 ...... 158 (Gains)/Losses in income statement ...... (30) Closing balance at December 31, 2011 ...... 128

The gains and losses recognized through profit or loss for the period include €33 million in respect of the decrease in operating performance and €3 million in respect of higher net financial expense.

F-177 6.4 Derivatives contracts classified under current financial liabilities — €2,645 million The following table shows the notional amount and fair value of the derivative contracts. Notional amount Fair value at Dec. 31, 2011 at Dec. 31, 2010 at Dec. 31, 2011 at Dec. 31, 2010 Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 4,467 244 27 3 24 –exchangerates...... 525 1,972 156 45 111 – commodities ...... 2,352 609 145 19 126 Total ...... 7,344 2,825 328 67 261 Fair value hedge derivatives: –exchangerates...... 184 36 6 2 4 Total ...... 184 36 6 2 4 Trading derivatives: –interestrates ...... 3,821 284 75 33 42 –exchangerates...... 2,373 2,804 132 124 8 – commodities ...... 23,945 2,637 2,104 550 1,554 Total ...... 30,139 5,725 2,311 707 1,604 TOTAL ...... 37,667 8,586 2,645 776 1,869

The increase in the notional amount of interest rate derivatives essentially involved the reclassification from “Non-current financial liabilities” of the derivatives used to hedge the debt entered into by Enel SpA and Enel Finance International in 2007 in respect of the syndicated credit line with an original value of €35 billion, which matures in April 2012, and Endesa derivatives. Trading derivatives on exchange rates essentially include derivatives transactions used to hedge the exchange rate risk in respect of commodity prices. Even though the transactions were carried out for hedging purposes, they do not meet the requirements to qualify for hedge accounting. Commodity derivatives are mainly related to: Š cash flow hedge derivatives on fuels, with a fair value of €73 million; Š derivatives on energy, classified as cash flow hedges, with a fair value of €72 million; Š trading derivatives on fuels and other commodities, with a fair value of €1,932 million; Š trading transactions in energy, with a fair value of €41 million; Š embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €131 million.

F-178 The following table reports the fair value of derivatives with a negative fair value on the basis of the measurement inputs used, as provided for under the amendments to IFRS 7. at Dec. 31, 2011 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates...... 27 — 27 — –exchangerates...... 156 — 156 — – commodities ...... 145 4 141 — Total ...... 328 4 324 — Fair value hedge derivatives: –exchangerates...... 6 — 6 — Total ...... 6— 6— Trading derivatives: –interestrates...... 75 — 75 — –exchangerates...... 132 — 132 — – commodities ...... 2,104 533 1,508 63 Total ...... 2,311 533 1,715 63 TOTAL ...... 2,645 537 2,045 63

The balance for Level 1 essentially regards positions in futures on CO2 andonBrentlistedonthe Intercontinental Exchange (ICE).

F-179 Segment information for 2011 and 2010 Results for 2011(1)

Iberia and Services Eliminations Ing. & Infra. & Latin Renewable Parent and Other and Sales GEM Innov. Networks America Int’l Energy Company Activities adjustments Total

Millions of euro Revenues from third parties...... 17,568 17,131 60 3,212 32,082 7,071 1,927 401 62 — 79,514 Revenues from other segments ...... 163 6,015 337 4,248 565 644 612 361 1,294 (14,239) — Total revenues ..... 17,731 23,146 397 7,460 32,647 7,715 2,539 762 1,356 (14,239) 79,514 Totalcosts...... 17,214 21,196 385 3,175 25,424 6,051 944 800 1,119 (14,239) 62,069 Net income/ (charges) from commodity risk management ..... 44 232 — — 28 (22) (10) — — — 272 Depreciation and amortization ..... 76 595 3 917 2,749 430 428 11 85 — 5,294 Impairment losses/ reversals...... 344 (3) — 21 445 150 77 3 20 — 1,057 Operating income ...... 141 1,590 9 3,347 4,057 1,062 1,080 (52) 132 — 11,366 Operating assets ... 5,209 16,571 254 17,479 76,124(2) 13,480 11,204(6) 1,090 2,166(7) (5,941) 137,636 Operating liabilities ...... 6,050 5,111 249 6,418 11,852(3) 5,254 1,475 1,152 1,613(8) (6,047) 33,127 Equity investments accounted for using equity method ...... — 7 — 132 124 305 486 2 29 — 1,085 Capital expenditure ..... 90 432 4 1,383 2,491(4) 1,450(5) 1,557 13 64 — 7,484

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the year. (2) Of which €359 million regarding units classified as “Held for sale”. (3) Of which €32 million regarding units classified as “Held for sale”. (4) Does not include €101 million regarding units classified as “Held for sale”. (5) Does not include €4 million regarding units classified as “Held for sale”. (6) Of which €4 million regarding units classified as “Held for sale”. (7) Of which €3 million regarding units classified as “Held for sale”. (8) Of which €4 million regarding units classified as “Held for sale”.

F-180 Results for 2010 restated(1)(2)

Iberia and Services Elimination Ing. & Infra. & Latin Renewable Parent and Other and Sales GEM Innov. Networks America Int’l Energy Company Activities adjustments Total

Millions of euro Revenues from third parties ...... 18,499 12,173 106 2,991 31,022 6,203 1,934 358 102 (11) 73,377 Revenues from other segments ...... 198 5,367 502 4,436 241 157 245 321 1,031 (12,498) — Total revenues .... 18,697 17,540 608 7,427 31,263 6,360 2,179 679 1,133 (12,509) 73,377 Totalcosts...... 17,627 15,936 594 3,614 23,395 4,811 956 738 997 (12,491) 56,177 Net income/ (charges) from commodity risk management ..... (587) 788 — — 28 (29) 89 (9) — — 280 Depreciation and amortization ..... 74 570 4 891 2,807 481 340 7 98 — 5,272 Impairment losses/ reversals ...... 351 (10) — 11 446 136 4 — 12 — 950 Operating income ...... 58 1,832 10 2,911 4,643 903 966 (75) 26 (16) 11,258 Operating assets(2) ...... 6,162 15,444 316 17,680 77,764(3) 13,103(6) 9,654(9) 1,075 2,529 (5,732) 137,995 Operating liabilities(2) ...... 5,673 4,467 374 5,825 13,500(4) 5,184(7) 1,235(10) 1,166 1,543 (5,734) 33,233 Equity investments accounted for using equity method ...... — 6 — 150 142 315 422(11) — 15 — 1,050 Capital expenditure ..... 62 648 5 1,147 2,866(5) 1,210(8) 1,065(12) 7 80 — 7,090

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) At December 31, 2010 restated. The figures were restated as a result of the completion of the process of allocating the purchase price for the SE Hydropower business combination. (3) Of which €484 million regarding units classified as “Held for sale”. (4) Of which €145 million regarding units classified as “Held for sale”. (5) Does not include €76 million regarding units classified as “Held for sale”. (6) Of which €592 million regarding units classified as “Held for sale”. (7) Of which €26 million regarding units classified as “Held for sale”. (8) Does not include €10 million regarding units classified as “Held for sale”. (9) Of which €399 million regarding units classified as “Held for sale”. (10) Of which €14 million regarding units classified as “Held for sale”. (11) Of which €17 million regarding units classified as “Held for sale”. (12) Does not include €11 million regarding units classified as “Held for sale”.

F-181 The following table reconciles segment assets and liabilities and the consolidated figures. at Dec. 31, 2010 at Dec. 31, 2011 restated(1) Millions of euro Total assets ...... 169,805 168,562 Financial assets, cash and cash equivalents ...... 24,904 22,934 Tax assets ...... 7,265 7,633 Segment assets ...... 137,636 137,995 – of which: Sales ...... 5,209 6,162 GenerationandEnergyManagement ...... 16,571 15,444 Engineering and Innovation ...... 254 316 InfrastructureandNetworks...... 17,479 17,680 Iberia and Latin America(2) ...... 76,124 77,764 International(3) ...... 13,480 13,103 Renewable Energy(4) ...... 11,204 9,654 ParentCompany ...... 1,090 1,075 Services and Other Activities(5) ...... 2,166 2,529 Eliminations and adjustments ...... (5,941) (5,732) Total liabilities ...... 115,365 114,696 Loans and other financial liabilities ...... 69,153 68,683 Tax liabilities ...... 13,085 12,780 Segment liabilities ...... 33,127 33,233 – of which: Sales ...... 6,050 5,673 GenerationandEnergyManagement ...... 5,111 4,467 Engineering and Innovation ...... 249 374 InfrastructureandNetworks...... 6,418 5,825 Iberia and Latin America(6) ...... 11,852 13,500 International(7) ...... 5,254 5,184 Renewable Energy(8) ...... 1,475 1,235 ParentCompany ...... 1,152 1,166 Services and Other Activities(9) ...... 1,613 1,543 Eliminations and adjustments ...... (6,047) (5,734)

(1) The figures were restated as a result of the completion of the process of allocating the purchase price for the SE Hydropower business combination to the assets acquired and the liabilities assumed. (2) Of which €359 million regarding units classified as “Held for sale” at December 31, 2011 (€484 million at December 31, 2010). (3) Of which €592 million regarding units classified as “Held for sale” at December 31, 2010. (4) Of which €4 million regarding units classified as “Held for sale” at December 31, 2011 (€399 million at December 31, 2010). (5) Of which €3 million regarding units classified as “Held for sale” at December 31, 2011. (6) Of which €32 million regarding units classified as “Held for sale” at December 31, 2011 (€145 million at December 31, 2010). (7) Of which €26 million regarding units classified as “Held for sale” at December 31, 2010. (8) Of which €14 million regarding units classified as “Held for sale” at December 31, 2010. (9) Of which €4 million regarding units classified as “Held for sale” at December 31, 2011.

F-182 Information on the Consolidated Income Statement

Revenues 8.a Revenues from sales and services — €77,573 million 2011 2010 Change Millions of euro Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies ...... 68,308 64,045 4,263 Revenuesfromthesaleandtransportofnaturalgastoendusers...... 3,624 3,574 50 Revenuesfromfuelsales...... 994 449 545 Connection fees for the electricity and gas networks ...... 1,422 1,429 (7) Revenuesforcontractworkinprogress...... 53 170 (117) Othersalesandservices...... 3,172 2,276 896 Total ...... 77,573 71,943 5,630

“Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies” amounted to €68,308 million (€64,045 million in 2010). Among other items, they include €33,948 million in revenues from the sale of electricity to end users, (€33,823 million in 2010), €15,808 million in revenues from the sale of electricity to wholesale buyers (€13,795 million in 2010), €6,653 million in revenues from electricity trading activities (€4,792 million in 2010), and €10,098 million in revenues from the transport of electricity (€10,510 million in 2010). “Revenues from the sale and transport of natural gas to end users” came to €3,624 million in 2011 and include €2,099 million in revenues from the sale and transport of natural gas in Italy (€2,244 million in 2010) and sales of natural gas abroad amounting to €1,525 million (€1,330 million in 2010). “Revenues from fuel sales” came to €994 million in 2011, which includes €641 million in sales of natural gas (€179 million in 2010), while the sale of other fuels amounted to €353 million (€270 million in 2010). The table below gives a breakdown of revenues from sales and services by geographical area: 2011 2010 Millions of euro Italy...... 30,678 30,767 Europe–EU ...... 33,552 28,607 Europe – non-EU ...... 2,846 2,471 Americas ...... 10,338 9,907 Other...... 159 191 Total ...... 77,573 71,943

F-183 8.b Other revenues and income — €1,941 million 2011 2010 Change Millions of euro Costcontributionsandotherfees ...... 81 21 60 Sundry reimbursements ...... 184 107 77 Gains on disposal of assets ...... 71 127 (56) Measurement at fair value after changes in control ...... 358 — 358 Gains on sale of property, plant and equipment and intangible assets ...... 57 33 24 Service continuity bonuses ...... 158 100 58 Otherrevenues...... 1,032 1,046 (14) Total ...... 1,941 1,434 507

“Cost contributions and other fees” regard revenues on certain connections to the electricity and gas networks. “Sundry reimbursements” are mainly accounted for by €45 million paid by customers and €87 million in insurance reimbursements. “Gains on the disposal of assets” amounted to €71 million in 2011 and largely comprise the gain on the sale of part of the assets of Enel Unión Fenosa Renovables (€44 million), Deval and Vallenergie (€21 million), Explotaciones Eólicas de Aldehuelas (€18 million), CAM and Synapsis (€15 million), Enel Maritza East 3, Enel Operations Bulgaria and the related holding companies (€12 million), as well as the gain on the disposal of a business unit that led to the acquisition of an equity interest in San Floriano Energy (€15 million). These positive effects were partially offset by the revision (about €54 million) of the sale price for the Spanish high-voltage grids and of 80% of Nubia 2000. The gain from “measurement at fair value after changes in control” came to €358 million in 2011. The gain is the result of the adjustment to their fair value of the assets and liabilities pertaining to the Group (i) remaining after the loss of control of Hydro Dolomiti Enel as a result in the change in corporate governance arrangements (€237 million); (ii) already owned by Enel prior to acquiring complete control of Enel Unión Fenosa Renovables (€76 million), Sociedad Eólica de Andalucía (€23 million) and TP — Sociedade Térmica Portuguesa (€22 million).

Costs 9.a Raw materials and consumables — €42,901 million 2011 2010 Change Millions of euro Electricity ...... 29,045 24,714 4,331 Fuelandgas...... 11,456 9,422 2,034 Materials...... 2,400 2,321 79 Total ...... 42,901 36,457 6,444 – of which capitalized costs for materials ...... (963) (1,057) 94

Purchases of “electricity” comprise those from the Single Buyer in the amount of €6,096 million (€6,066 million in 2010) and purchases from the Energy Markets Operator in the amount of €6,950 million (€3,347 million in 2010). The increase is primarily attributable to bilateral contracts and the rise in the purchase cost of electricity on domestic and foreign markets. Purchases of “fuel and gas” include €5,328 million in natural gas purchases (€4,844 million in 2010) and €6,128 million in purchases of other fuels (€4,578 million in 2010).

F-184 9.b Services — €14,440 million 2011 2010 Change Millions of euro Electricity and gas wheeling ...... 8,701 8,436 265 Maintenanceandrepairs ...... 1,369 1,236 133 Telephone and postal costs ...... 273 314 (41) Communicationservices ...... 160 139 21 ITservices ...... 242 177 65 Leases and rentals ...... 571 599 (28) Other ...... 3,124 2,727 397 Total ...... 14,440 13,628 812

Service costs for 2011 came to €14,440 million and include the contribution of Endesa in the amount of €8,927 million (€8,207 million in 2010). The item rose compared with 2010 owing to greater electricity wheeling costs as a result of higher system charges and higher costs for services connected with the electrical systems of the countries in which the Group operates.

9.c Personnel — €4,296 million 2011 2010 Change Millions of euro Wagesandsalaries ...... 3,335 3,370 (35) Social security contributions ...... 870 839 31 Post-employment benefits ...... 120 116 4 Othercosts ...... (29) 582 (611) Total ...... 4,296 4,907 (611) – of which capitalized ...... (748) (708) (40)

Personnel costs amounted to €4,296 million in 2011, down €611 million compared with the previous year. The average workforce contracted by 4.6% compared with the previous year. The Group workforce decreased by 2,953 during the period, mainly due to the change in the scope of consolidation (a decline of 2,462) connected with the sales of CAM, Synapsis, Enel Operations Bulgaria, Enel Maritza East 3, Deval and Vallenergie, as well as the different method used for consolidating Hydro Dolomiti Enel. In addition to this factor, the decrease in “other costs” is connected with the completion of the early retirement incentive program as well as the positive impact of the agreement reached during the year to eliminate electricity discounts for employees in service in Italy, following which a gain from curtailment of €152 million was recognized. As a result of that agreement, the electricity discounts will continue to be applied only for employees no longer in service who already received such discounts at the time their employment relationship ended. For more information on employee benefit plans, please see note 29 below.

F-185 The table below shows the average number of employees by category compared with the previous year, and the actual number of employees at December 31, 2011. Average number(1) Headcount(1)

2011 2010 Change at Dec. 31, 2011(2) Seniormanagers...... 1,219 1,336 (117) 1,190 Middlemanagers ...... 13,908 14,110 (202) 14,098 Office staff ...... 41,292 42,669 (1,377) 41,085 Workers ...... 19,847 21,798 (1,951) 18,987 Total ...... 76,266 79,913 (3,647) 75,360

(1) For companies consolidated on a proportionate basis, the headcount corresponds to Enel percentage share of the total. (2) Of which 113 in units classified as “Assets held for sale”.

9.d Depreciation, amortization and impairment losses — €6,351 million 2011 2010 Change

Millions of euro Depreciation...... 4,434 4,407 27 Amortization ...... 860 865 (5) Impairment losses ...... 1,057 950 107 Total ...... 6,351 6,222 129

“Impairment losses” in 2011 mainly regard writedowns of trade receivables amounting to €519 million (€717 million in 2010). It also includes the adjustment of the goodwill of Endesa Ireland in the amount of €105 million (€115 million in 2010) on the basis of the status of negotiations as of the balance sheet date, as well as the impairment recognized on the value of the electricity distribution grid in Argentina (€153 million) and that on the goodwill of Enel Green Power Hellas (€70 million) and Marcinelle Energie (€26 million).

9.e Other operating expenses — €2,143 million 2011 2010 Change Millions of euro Provisionsforrisksandcharges ...... 70 393 (323) Purchase of green certificates ...... 155 223 (68) Taxesandduties ...... 1,146 1,057 89 Losses on disposal of assets ...... 7 3 4 Other ...... 765 1,274 (509) Total ...... 2,143 2,950 (807)

Other operating expenses totaled €2,143 million in 2011, down €807 million compared with the previous year. The decrease was largely associated with a decline in provisions for risks and charges made during the year and the revision of estimates for provisions recognized in prior years. These effects were only partially offset by the recognition of the net-worth tax in Colombia (€109 million) following the tax reform introduced in that country with Law 1430/2010.

F-186 9.f Capitalized costs — €(1,711) million Capitalized costs consist of €748 million in personnel costs and €963 million in materials costs (compared with €708 million and €1,057 million, respectively, in 2010).

Net income/(charges) from commodity risk management 10. Net income/(charges) from commodity risk management — €272 million Net income from commodity risk management reflects €160 million in net income realized on positions closed during the year and €112 million in unrealized net income on open positions in commodity derivatives at December 31, 2011. 2011 2010 Change Millions of euro Income Unrealized on contracts for differences ...... — 3 (3) Unrealizedonothercontracts ...... 1,969 588 1,381 Total unrealized income ...... 1,969 591 1,378 Realized on two-way contracts for differences ...... 42 15 27 Realizedonothercontracts ...... 1,384 1,038 346 Total realized income ...... 1,426 1,053 373 Total income ...... 3,395 1,644 1,751 Charges Unrealizedonothercontracts ...... (1,857) (653) (1,204) Total unrealized charges ...... (1,857) (653) (1,204) Realizedonothercontracts ...... (1,266) (711) (555) Total realized charges ...... (1,266) (711) (555) Total charges ...... (3,123) (1,364) (1,759) NET INCOME/(CHARGES) FROM COMMODITY RISK MANAGEMENT ...... 272 280 (8) – of which trading/non-IFRS-IAS hedge derivatives ...... 236 265 (29) – of which ineffective portion of CFH ...... (2) — (2)

F-187 11. Financial income/(expense) — €(3,024) million Financial income

2011 2010 Change Millions of euro Total interest and other income from financial assets (current and non- current): – interest income at effective rate on non-current securities and receivables ...... 65 35 30 – financial income on non-current securities at fair value through profit or loss...... — 2 (2) – interest income at effective rate on short-term financial investments ...... 256 223 33 Total interest and other income from financial assets ...... 321 260 61 Foreign exchange gains ...... 729 735 (6) Income from derivative instruments: – income from cash flow hedge derivatives ...... 568 726 (158) – income from derivatives at fair value through profit or loss ...... 516 332 184 –incomefromfairvaluehedgederivatives...... 45 76 (31) Total income from derivative instruments ...... 1,129 1,134 (5) Income from equity investments ...... 44 97 (53) Other income ...... 470 350 120 TOTAL FINANCIAL INCOME ...... 2,693 2,576 117

Financial income amounted to €2,693 million, up €117 million on the previous year. Financial income from derivatives came to €1,129 million, of which €402 million realized (€247 million in 2010) and €727 million unrealized (€887 million in 2010). The increase on the previous year is essentially attributable to the rise in default interest relating to a decision resolving a tax dispute in the Group’s favor in Spain (€63 million) and the effect of the discounting of benefits granted to employees in Spain and Latin America (€56 million).

F-188 Financial expense

2011 2010 Change Millions of euro Interest expense and other charges on financial debt (current and non- current) –interestexpenseonbankloans ...... 600 590 10 – interest on bonds ...... 1,893 1,860 33 –interestexpenseonotherloans...... 259 217 42 – financial expense on securities at fair value through profit or loss ...... 1 — 1 –commissionsonunusedlinesofcredit ...... 21 15 6 Total interest expense and other charges on financial debt ...... 2,774 2,682 92 Foreign exchange losses ...... 1,146 1,244 (98) Expense on derivative instruments: – expense on cash flow hedge derivatives ...... 450 514 (64) – expense on derivatives at fair value through profit or loss ...... 542 482 60 –expenseonfairvaluehedgederivatives...... 15 13 2 Total expense on derivative instruments ...... 1,007 1,009 (2) Accretion of post-employment and other employee benefits ...... 281 278 3 Accretion of other provisions ...... 247 252 (5) Charges on equity investments ...... 31 2 Other charges ...... 259 308 (49) TOTAL FINANCIAL EXPENSE ...... 5,717 5,774 (57)

Financial expense totaled €5,717 million, a decrease of €57 million on 2010. More specifically, the increase in “interest expense and other charges on financial debt” resulting from the general rise in interest rates, as well as the refinancing strategy to optimize the financial structure of the Group was offset by the decline in “foreign exchange losses”, which are mainly attributable to the debt denominated in currencies other than the euro, which was hedged with corresponding cross currency interest rate swaps. “Expense on derivative instruments” came to €1,007 million, of which €623 million in realized charges (€599 million in 2010) and €384 million in unrealized charges (€410 million in 2010).

12. Share of income/(expense) from equity investments accounted for using the equity method — €96 million

2011 2010 Change Millions of euro Income from associates ...... 111 62 49 Expense on associates ...... (15) (48) 33 Total ...... 96 14 82

For more information on the composition of the balance, please see note 18. In addition, the main differences with respect to the previous year are represented by income from Elcogas in the amount of €6 million (€28 million in expense in 2010) and by a general increase in income from investments in small companies in the Renewable Energy Division, totaling €56 million.

F-189 13. Income taxes — €3,080 million 2011 2010 Change Millions of euro Currenttaxes ...... 2,848 2,634 214 Adjustmentsforincometaxesrelatedtoprioryears...... (55) (106) 51 Deferred tax liabilities ...... 273 (194) 467 Deferred tax assets ...... 14 67 (53) Total ...... 3,080 2,401 679

Income taxes for 2011 came to €3,080 million, equal to 36.5% of taxable income, compared with 29.7% in 2010. The estimated tax liability of foreign companies is €924 million (€804 million in 2010). The following table reconciles the theoretical tax rate with the effective rate. Please note that the size of the tax liability for the year was significantly impacted by the effects of the IRES surtax imposed under Decree Law 112/2008 (the so-called “Robin Hood Tax”), which following recent amendments applicable as from 2011, is levied at a rate of 10.5% and, for the first time, also applies to distribution operations. 2011 2010 Millions of euro Incomebeforetaxes...... 8,438 8,074 Theoreticaltax ...... 2,320 27.5% 2,220 27.5% Permanent differences; effect of different foreign tax rates and minoritems ...... (95) -1.1% (302) -3.7% IRES surtax (Decree Law 112/2008) ...... 515 6.1% 158 2.0% Difference on estimated income taxes from prior years for Italian companies ...... (16) -0.2% (48) -0.6% IRAP...... 356 4.2% 373 4.5% Total ...... 3,080 36.5% 2,401 29.7%

F-190 14. Basic and diluted earnings per share Both metrics are calculated on the basis of the average number of ordinary shares in the period, equal to 9,403,357,795 shares, with diluted earnings per share adjusted for the diluting effect of outstanding stock options (zero in both periods). 2011 2010 Change Net income from continuing operations pertaining to shareholders of the Parent Company (millions of euro) .... 4,148 4,390 (242) Net income from discontinued operations pertaining to shareholders of the Parent Company (millions of euro) .... — — — Net income pertaining to shareholders of the Parent Company (millions of euro) ...... 4,148 4,390 (242) Numberofordinaryshares ...... 9,403,357,795 9,403,357,795 — Dilutiveeffectofstockoptions ...... — — — Basicanddilutedearningspershare(euro)...... 0.44 0.47 (0.03) Basic and diluted earnings from continuing operations per share(euro) ...... 0.44 0.47 (0.03) Basic and diluted earnings from discontinued operations per share(euro) ...... — — — Please note that existing stock option plans for top management could dilute basic earnings per share in the future. For more information on those plans, please see the appropriate section of these notes. Between the balance sheet date and the date of publication of the financial statements, no events or transactions took place that changed the number of ordinary shares or potential ordinary shares in circulation at the end of the year.

F-191 Information on the Consolidated Balance Sheet

15. Property, plant and equipment — €80,592 million Changes in property, plant and equipment for 2010 and 2011 are shown below:

Assets Industrial and under Plant and commercial Other Leasehold construction Land Buildings machinery equipment assets Leased assets improvements and advances Total

Millions of euro Cost...... 539 9,726 109,399 389 1,189 533 184 8,322 130,281 Accumulated depreciation...... — 4,338 48,155 302 637 162 100 — 53,694 Balance at January 1, 2010 ...... 539 5,388 61,244 87 552 371 84 8,322 76,587 Capitalexpenditure .... 16 72 1,619 17 75 284 2 4,290 6,375 Assets entering service ...... — 102 3,587 1 36 — 12 (3,738) — Exchange rate differences...... 21 57 1,385 — 63 23 — 188 1,737 Change in scope of consolidation...... 3 18 115 1 1 — — 40 178 Depreciation ...... — (245) (3,888) (16) (144) (23) (24) — (4,340) Impairmentlosses ..... (7) — (52) — — — — (45) (104) Otherchanges...... 12 (258) 179 1 (87) (7) (3) 91 (72) Reclassification from/to “Assets held for sale” ...... (19) (63) (1,868) — 6 — — (323) (2,267) Total changes ...... 26 (317) 1,077 4 (50) 277 (13) 503 1,507 Cost...... 565 10,115 138,809 409 1,738 756 202 8,825 161,419 Accumulated depreciation...... — 5,044 76,488 318 1,236 108 131 — 83,325 Balance at December 31, 2010 restated ...... 565 5,071 62,321 91 502 648 71 8,825 78,094 Capitalexpenditure .... 3 78 1,668 28 69 14 4 4,981 6,845 Assets entering service ...... 9 195 3,876 1 41 181 13 (4,316) — Exchange rate differences...... (3) (18) (146) — (10) 9 — (55) (223) Change in scope of consolidation...... (1) (2) 180 — 1 — (1) 130 307 Depreciation ...... — (219) (3,981) (16) (119) (52) (21) — (4,408) Impairmentlosses ..... (5) (36) (164) — 1 — — (41) (245) Otherchanges...... 11 201 (332) (12) (118) 270 5 34 59 Remeasurement at fair value after changes in control ...... 1 32 96 — — — — — 129 Reclassification from/to “Assets held for sale” ...... — — 36 — — — — (2) 34 Total changes ...... 15 231 1,233 1 (135) 422 — 731 2,498 Cost...... 580 10,564 142,608 417 1,468 1,232 223 9,556 166,648 Accumulated depreciation...... — 5,262 79,054 325 1,101 162 152 — 86,056 Balance at December 31, 2011 ...... 580 5,302 63,554 92 367 1,070 71 9,556 80,592

F-192 “Plant and machinery” includes assets to be relinquished with a net carrying amount of €12,513 million (€11,148 million at December 31, 2010), €7,870 million of which related to power generation plants (€7,925 million at December 31, 2010) and €3,749 million to Endesa’s electricity distribution network (€2,615 million at December 31, 2010). “Leased assets” include certain assets which the Group is using in Spain, France, Greece, Latin America and Slovakia. More specifically, in Spain the assets relate to a 25-year “tolling” contract for which an analysis pursuant to IFRIC 4 identified an embedded finance lease, under which Endesa has access to the generation capacity of a combined cycle plant for which the toller, Elecgas, has undertaken to transform gas into electricity in exchange for a toll at a rate of 9.62%. In France and Greece, they relate to wind plants under 10/15-year leases. In Latin America, the assets relate to leased power transmission lines and plant (Ralco-Charrúa), under a 20-year lease at a 6.5% rate, as well as a number of combined cycle plants in Peru (8/9-year lease bearing a floating rate). The leased assets in Slovakia essentially relate to the sale and lease back agreements for the V1 nuclear power plant at Jaslovske Bohunice and the hydroelectric plant at Gabcikovo. The leasing arrangements were a necessary condition for the start of the privatization of the Slovakian electricity system. The lease for the V1 plant covers the entire remaining useful life of the asset and the period between the end of generation and the start of the decommissioning process, while the lease for the Gabcikovo plant has a 30-year term as from April 2006. The following table reports the minimum lease payments and the related present value. at Dec. 31, 2010 Minimum lease payments Present value Millions of euro 2011 ...... 70 31 2012-2015 ...... 254 102 After 2015 ...... 813 432 Total ...... 1,137 565

at Dec. 31, 2011 Minimum lease payments Present value Millions of euro 2012 ...... 90 67 2013-2016 ...... 263 161 After 2016 ...... 750 532 Total ...... 1,103 760

F-193 The table below summarizes capital expenditure in 2011 by category. These expenditures, totaling €6,845 million, rose by €470 million compared with 2010. 2011 2010 Millions of euro Power plants: –thermal ...... 1,272 1,818 – hydroelectric ...... 516 381 –geothermal ...... 113 174 –nuclear...... 878 661 –alternativeenergyresources...... 1,194 729 Total power plants ...... 3,973 3,763 Electricity distribution network ...... 2,668 2,520 Land, buildings and other assets and equipment ...... 204 92 TOTAL ...... 6,845 6,375

Capital expenditure on power plants totaled €3,973 million, an increase of €210 million on the previous year. This mainly reflects increased investment in plants using alternative energy resources of the Renewable Energy Division, in nuclear power plants by the International Division and in hydroelectric plants of the Iberia and Latin America Division. These factors were partially offset by lower investment in conventional thermal plants. Capital expenditure for the electricity distribution network totaled €2,668 million, an increase of €148 million year on year. The “change in scope of consolidation” for the period mainly concerned the acquisitions of the Renewable Energy Division (€496 million, essentially regarding Enel Green Power España), partially offset by the partial disposal of Hydro Dolomiti Enel (following the change in the method of consolidation) and the disposal of Deval. “Other changes” include, among other items, interest on specific loans for capital expenditure in the amount of €88 million (€29 million in 2010). The item pertaining to remeasurement at fair value after changes in control (€129 million), is entirely attributable to the application of IAS 27 (Revised) to Hydro Dolomiti Enel in the amount corresponding to the residual interest following loss of control. “Reclassification from ‘Assets held for sale’” essentially reports the property, plant and equipment of Enel Green Power Bulgaria after the conditions for such classification under IFRS 5 ceased to apply.

F-194 16. Intangible assets — €39,075 million Changes in intangible assets for 2010 and 2011 are shown below:

Concessions, Industrial licenses, Assets patents trademarks Service under Development and intellectual and similar concession development costs property rights rights arrangements Other and advances Goodwill Total

Millions of euro Cost...... 50 1,138 15,771 2,849 1,339 421 19,045 40,613 Accumulated amortization . . . 15 704 432 — 742 — — 1,893 Balance at January 1, 2010 ...... 35 434 15,339 2,849 597 421 19,045 38,720 Capitalexpenditure ...... 2 119 10 350 49 178 — 708 Assetsenteringservice...... — 167 1 — 58 (226) — — Exchange rate differences . . . — 9 1,244 333 6 2 82 1,676 Change in scope of consolidation...... 4 — — — 1 — 41 46 Amortization...... — (239) (267) (241) (106) — — (853) Impairmentlosses ...... — — 1 — (7) (1) (13) (20) Effect of SE Hydropower PPA...... — — 510 — — — — 510 Otherchanges...... — 24 (53) (51) 44 (23) 193 134 Reclassification to “Assets heldforsale”...... (28) (10) (425) — 1 — (878) (1,340) Total changes ...... (22) 70 1,021 391 46 (70) (575) 861 Cost...... 13 2,087 17,293 4,611 1,442 351 18,470 44,267 Accumulated amortization . . . — 1,583 933 1,371 799 — — 4,686 Balance at December 31, 2010 restated ...... 13 504 16,360 3,240 643 351 18,470 39,581 Capitalexpenditure ...... 4 120 27 258 17 206 — 632 Assetsenteringservice...... 2 187 1 301 30 (521) — — Exchange rate differences . . . — (3) (377) (264) 4 (1) (21) (662) Change in scope of consolidation...... — (1) 306 — 41 12 30 388 Amortization...... (2) (230) (320) (215) (92) — — (859) Impairmentlosses ...... — — 1 — (15) (1) (96) (111) Otherchanges...... 4 (1) 66 (374) (77) 297 (46) (131) Remeasurement at fair value afterchangesincontrol.... — — 229 — — — — 229 Reclassification from/to “Assetsheldforsale” ..... — — 3 — — — 5 8 Total changes ...... 8 72 (64) (294) (92) (8) (128) (506) Cost...... 30 2,185 17,558 4,412 1,487 343 18,342 44,357 Accumulated amortization . . . 9 1,609 1,262 1,466 936 — — 5,282 Balance at December 31, 2011 ...... 21 576 16,296 2,946 551 343 18,342 39,075 The “change in scope of consolidation” for the period mainly concerned the acquisitions of the Renewable Energy Division as well as the recognition of the concession on San Floriano Energy as a result of the allocation of the price paid for 33% of the company. The item pertaining to remeasurement at fair value after changes in control is attributable to the application of IAS 27 (Revised) to Hydro Dolomiti Enel in the amount corresponding to the residual interest following loss of control and to Enel Unión Fenosa Renovables, Sociedad Eolica de Andalucia and TP Térmica Portuguesa in an amount corresponding to the interest held prior to acquiring control.

F-195 “Industrial patents and intellectual property rights” relate mainly to costs incurred in purchasing software and open-ended software licenses. The most important applications relate to invoicing and customer management, the development of Internet portals and the management of company systems. Amortization is calculated on a straight-line basis over the asset’s residual useful life (on average between three and five years). “Concessions, licenses, trademarks and similar rights” include costs incurred by the gas companies and the foreign electricity distribution companies to acquire customers. Amortization is calculated on a straight-line basis over the average duration of the relationships with the customers acquired or the concessions. The item includes assets with an indefinite useful life in the amount of €10,325 million (10,348 million at December 31, 2010). The forecast cash flows for each of the electricity distribution concessions in Spain and various Latin American countries are sufficient to recover the value of the intangible asset. “Service concession arrangements”, recognized pursuant to IFRIC 12, regard certain infrastructure serving electricity distribution concessions in Brazil. “Goodwill” amounted to €18,342 million, a decrease of €128 million over the previous year.

at Dec. 31, 2010 restated at Dec. 31, 2011 Reclassification Net Change in Exchange from Net Accumulated carrying scope of rate Impairment “Assets held Accumulated carrying Cost impairment amount consolidation differences losses for sale” Other changes Cost impairment amount

Millions of euro Endesa ...... 14,501 — 14,501 — — — (242) 14,259 — 14,259 Enel OGK-5...... 1,242 — 1,242 — (28) — — — 1,214 — 1,214 Enel Green Power Group(1) ...... 868 (2) 866 30 12 (70) 5 15 930 (72) 858 Slovenské elektrárne...... 697 — 697 — — — — — 697 — 697 EnelEnergia ...... 579 — 579 — — — — — 579 — 579 Enel Distributie Muntenia ...... 406 — 406 — (3) — — 149 552 — 552 Enel Energie Muntenia ...... 89 — 89 — (1) — — 26 114 — 114 RusEnergoSbyt.... 44 — 44 — (1) — — — 43 — 43 Nuove Energie .... 26 — 26 —— — — —26—26 Marcinelle Energie...... 20 — 20 — — (26) — 6 26 (26) — ArticRussia...... 10 (10) — — — — — — 10 (10) — WISCO(2) ...... 7 (7) — —— — — ———— Total ...... 18,489 (19) 18,470 30 (21) (96) 5 (46) 18,450 (108) 18,342

(1) Includes EGP España, Enel Latin America, Enel Panama, Inelec, EGP North America, EGP Hellas, EGP France, EGP Romania, EGP Bulgaria and EGP Portoscuso and other smaller companies. (2) Classified as “Assets held for sale” at December 31, 2011. The “change in scope of consolidation” for the period mainly concerned the acquisitions of the Renewable Energy Division in Spain, Italy and Romania. “Impairment losses” are recognized following impairment tests, as discussed below. The “reclassification from ‘Assets held for sale’” reports the goodwill of Enel Green Power Bulgaria after the conditions for such classification under IFRS 5 ceased to obtain. “Other changes” essentially comprises the change in the valuation at period-end of the debt associated with the acquisition of minority stakes (including Enel Distributie Muntenia and Enel Energie Muntenia) under a number of put options granted to minority shareholders as part of the

F-196 acquisitions of those companies. This factor was more than offset by the adjustment of the Endesa- Iberian peninsula cash generating unit (CGU) to take account of the more specific allocation of the purchase price paid at the time. The criteria used to identify the CGUs were essentially based (in line with management’s strategic and operational vision) on the specific characteristics of their business, on the operational rules and regulations of the markets in which Enel operates and on the corporate organization, including technical and management factors, as well as on the level of reporting monitored by management. The recoverable value of the goodwill recognized was estimated by calculating the value in use of the CGUs using discounted cash flow models, which involve estimating expected future cash flows and applying an appropriate discount rate, selected on the basis of market inputs such as risk-free rates, betas and market risk premiums. Cash flows were determined on the basis of the best information available at the time of the estimate and drawn: Š for the explicit period, from the 10-year business plan approved by the Board of Directors of the Parent Company containing forecasts for volumes, revenues, operating costs, capital expenditure, industrial and commercial organization and developments in the main macroeconomic variables (inflation, nominal interest rates and exchange rates) and commodity prices; Š for subsequent years, from assumptions concerning long-term developments in the main variables that determine cash flows, the average residual useful life of assets or the duration of the concessions. More specifically, the terminal value was calculated as a perpetuity or annuity with a nominal growth rate equal to the long-term rate of growth in electricity and/or inflation (depending on the country and business involved) and in any case no higher than the average long-term growth rate of the reference market. The value in use calculated as described above was found to be greater than the amount recognized on the balance sheet, with the exception of the Marcinelle Energie and EGP Hellas CGUs, which are discussed below.

F-197 In order to verify the robustness of the value in use of the CGUs, sensitivity analyses were conducted for the main drivers of the values, in particular WACC and the long-term growth rate, the outcomes of which fully supported that value. The table below reports the composition of the main goodwill values according to the company to which the CGU belongs, along with the discount rates applied and the time horizon over which the expected cash flows have been discounted.

Explicit at Dec. 31, 2011 Discount rate period pre-tax of cash Amount Growth rate(1) WACC(2) flows Terminal value(3) Millions of euro Endesa – Iberian peninsula(4) ...... 10,999 2.1% 7.5%10 years Perpetuity Endesa – Latin America . . . 3,260 4.0%(1.2%)(5) 9.4%10 years Perpetuity Enel OGK-5 ...... 1,214 1.2% 13.0%10 years Perpetuity Slovenskéelektrárne...... 697 1.2% 9.1%10 years Perpetuity Enel Romania(6) ...... 666 2.8% 9.8%10 years Perpetuity EnelEnergia...... 579 0.8% 10.6%10 years 10 years EGPEspaña ...... 406 2.0% 8.3% 5 years 16 years EGPNorthAmerica ...... 123 2.1% 7.8% 5 years 21 years EGPLatinAmerica...... 266 3.5% 9.2% 5 years 30 years RusEnergoSbyt...... 43 1.2% 15.6%12 years Nuove Energie ...... 26 0.8% 9.8%10 years 19 years EGPFrance...... 25 2.0% 7.9% 5 years 20 years EGP Portoscuso and other minorcompanies ...... 20 2.0% 10.9%10 years 16 years EGPRomania...... 13 2.9% 11.1% 5 years 20 years EGPBulgaria ...... 5 2.5% 9.2%10 years 14 years

At Dec. 31, 2011 Discount rate Explicit period Amount Growth rate(1) pre-tax WACC(2) of cash flows Terminal value(3) Millions of euro Enel Green Power Hellas ...... 70 2.2% 15.8% 10 years 26 years Marcinelle Energie ...... 26 1.4% 10.3% 25 years —

(1) Perpetual growth rate of cash flows after explicit period.

F-198 (2) Pre-tax WACC calculated using the iterative method: the discount rate that ensures that the value in use calculated with pre-tax cash flows is equal to that calculated with post-tax cash flows discounted with the post-tax WACC. (3) The terminal value has been estimated on the basis of an annuity with a rising yield for the years indicated in the column. The goodwill attributed to the Marcinelle CGU is that generated by the acquisition of the interest in Marcinelle Energie SA, which operates the CCGT plant in Belgium. During impairment testing of goodwill at December 31, 2011, management wrote down the goodwill attributed to the CGU in the amount of €26 million owing to a possible decline in the future profitability of the business. At December 31, 2011, the goodwill regarding the EGP Hellas CGU was also written off. The impairment, equal to €70 million, is attributable to the increase in the country risk factored into the discount rate.

17. Deferred tax assets and liabilities — €6,011 million and €11,505 million The following table details changes in deferred tax assets and liabilities by type of timing difference and calculated based on the tax rates established by applicable regulations. The table also reports the amount of deferred tax assets that, where allowed, can be offset against deferred tax liabilities.

Increase/ (Decrease) taken Change in Exchange Reclassification at Dec. 31, 2010 to income scope of Other rate from/to “Assets restated statement consolidation changes differences held for sale” at Dec. 31, 2011

Millions of euro Deferred tax assets: – differences in the value of intangible assets, property, plantandequipment ...... 1,154 (82) — 107 2 — 1,181 – accruals to provisions for risks and charges and impairment losses with deferred deductibility ..... 2,718 (187) — (158) (7) — 2,366 –taxlosscarriedforward.... 133 (15) 4 (44) (3) — 75 – measurement of financial instruments ...... 415 9 — 240 (5) — 659 –otheritems...... 1,597 261 — (114) (16) 2 1,730 Total ...... 6,017 (14) 4 31 (29) 2 6,011 Deferred tax liabilities: – differences on non-current andfinancialassets ...... 9,247 (33) — (56) (33) — 9,125 – income subject to deferred taxation ...... 29 (1) — — — — 28 – measurement of financial instruments ...... 216 37 — 93 — — 346 –otheritems...... 1,844 270 (10) (5) (97) 4 2,006 Total ...... 11,336 273 (10) 32 (130) 4 11,505

Non-offsettable deferred tax assets ...... 865 Non-offsettable deferred tax liabilities ...... 4,018 Excess net deferred tax liabilities after any offsetting ...... 2,341 As of December 31, 2011, “deferred tax assets” totaled €6,011 million, (€6,017 million at December 31, 2010). It should also be noted that no deferred tax assets were recorded in relation to prior tax losses in the amount of €1,138 million because, on the basis of current estimates of future taxable income, it is not certain that such assets will be recovered. More specifically, the losses are essentially attributable to the holding companies located in the Netherlands (€697 million).

F-199 “Deferred tax liabilities”, which totaled €11,505 million at December 31, 2011, (€11,336 million at December 31, 2010), essentially include the determination of the tax effects of the value adjustments to net assets acquired as part of the final allocation of the cost of acquisitions made in the various years and the deferred taxation in respect of the differences between depreciation charged for tax purposes, including accelerated depreciation, and depreciation based on the estimated useful lives of assets. The amendment of the rules governing the “Robin Hood Tax” (Art. 7 of Decree Law 138/2011 ratified with Law 148/2011), which extended the scope of the tax and increased the rate from 6.5% to 10.5% for the 2011-2013 tax period, produced a positive impact on net deferred tax assets recognized in profit or loss in 2011 in the amount of €163 million.

18. Equity investments accounted for using the equity method — €1,085 million Investments in associated companies accounted for using the equity method are as follows: at Dec. 31, 2010 restated at Dec. 31, 2011 Change in scope % holding of consolidation Income effect Other changes % holding Millions of euro SeverEnergia ...... 300 19.6% — (3) (8) 289 19.6% EnelReteGas ...... 149 19.9% — 7 (25) 131 19.9% Elica2 ...... 166 30.0% — — 2 168 30.0% LaGeo ...... 87 36.2% — 18 (14) 91 36.2% Endesa Gas T&D (formerly Nubia 2000) ...... 30 20.0% — (3) 2 29 20.0% Elcogas ...... — 45.2% — 6 (4) 2 45.3% Tecnatom ...... 22 45.0% — 3 — 25 45.0% CESI ...... 15 25.9% 9 5 — 29 41.9% Other ...... 264 (5) 63 (1) 321 Total ...... 1,033 4 96 (48) 1,085

The holdings in SeverEnergia and Enel Rete Gas are accounted for using the equity method in view of the governance mechanisms of those companies, which give Enel a significant influence over company operations. In addition, Enel Distribuzione has a call option for 80% of Enel Rete Gas that will vest, subject to certain conditions, as from 2014 (the year in which the 5-year lock-up period applicable to both Enel Distribuzione and F2i Reti Italia expires) until 2018.

F-200 The main income statement and balance sheet data for the principal equity investments in associates are reported in the following table. at Dec. 31, 2011 Non-current Non-current Current Net income/ assets Current assets liabilities liabilities Revenues (loss) Millions of euro SeverEnergia...... 2,483 113 360 784 — (13) EnelReteGas...... 2,369 270 1,568 219 501 12 Elica2 ...... 12 5 — 2 — — LaGeo...... 258 66 6 22 118 51 Endesa Gas T&D (formerly Nubia 2000) ...... 1,128 96 963 113 111 (16) Elcogas ...... 120 103 7 214 148 5 Tecnatom...... 57 61 33 29 102 5 CESI...... 47 82 17 45 59 9 at Dec. 31, 2010 Non-current Non-current Current Net income/ assets Current assets liabilities liabilities Revenues (loss) Millions of euro SeverEnergia...... 2,314 131 378 569 — 25 EnelReteGas...... 1,830 256 1,095 255 397 19 Elica2 ...... 10 3 — 2 — — LaGeo...... 249 65 5 21 96 34 Endesa Gas T&D (formerly Nubia 2000) ...... 919 122 372 459 5 4 Elcogas ...... 132 179 3 303 73 (47) Tecnatom...... 56 44 26 26 82 5 CESI...... 45 74 18 42 82 10

19. Non-current financial assets — €6,325 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Equityinvestmentsinothercompanies...... 993 1,036 (43) Receivables and securities included in net financial debt (see note 26.3) ...... 3,576 2,567 1,009 Derivativecontracts ...... 1,387 821 566 Service concession arrangements ...... 317 195 122 Prepaid non-current financial expense ...... 52 82 (30) TOTAL ...... 6,325 4,701 1,624

“Equity investments in other companies” includes investments measured at fair value in the amount of €817 million, while the remainder of €176 million regarded investments whose fair value could not be readily determined and, in the absence of plans to sell the holdings, were therefore recognized at cost less impairment losses. In particular, the fair value of listed companies was determined with reference to the market value of their shares at the end of the period, whereas the fair value of

F-201 unlisted companies was determined on the basis of what is felt to be a reliable valuation of their significant balance sheet items. The following table breaks down the item discussed above on the basis of the hierarchy of inputs used in determining fair value, as specified in the amendments to IFRS 7: at Dec. 31, 2011 Fair value Level 1 Level 2 Level 3 Millions of euro Equityinvestmentsinothercompanies ...... 817 791 19 7 The following table shows changes in equity investments measured using level 3 inputs: Millions of euro Balance at January 1, 2010 ...... 8 Netincome/lossinincomestatement...... — Otherchanges ...... (1) Balance at December 31, 2010 ...... 7

Equity investments in other companies break down as follows: at Dec. 31, 2010 at Dec. 31, 2011 restated Change % holding % holding Millions of euro BayanResources...... 511 10.00% 500 10.00% 11 Terna...... 266 5.12% 325 5.12% (59) Echelon...... 11 7.36% 23 7.36% (12) Other...... 205 188 — 17 Total ...... 993 1,036 (43)

For more on “receivables and securities included in net financial debt”, please see note 26.3. For more on derivatives classified under non-current assets, please see note 6.1. “Service concession arrangements” regard fees due from the grantor for the construction and/or improvement of infrastructure used to provide public services on a concession basis and recognized in application of IFRIC 12.

20. Other non-current assets — €506 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 85 142 (57) Net assets of employee benefit programs ...... 97 112 (15) Other receivables ...... 324 808 (484) TOTAL ...... 506 1,062 556

F-202 “Receivables due from Electricity Equalization Fund and similar bodies” include at December 31, 2011 only the receivable in respect of the Electricity Equalization Fund claimed by the Italian distribution companies. “Net assets of employee benefit programs” reports assets backing a number of employee benefit plans for Endesa employees, net of actuarial liabilities. In 2010, “other receivables” included receivables for the extraordinary costs incurred for the early replacement of electromechanical meters with digital meters. The receivables were reclassified to “non-current financial assets” in compliance with the provisions of Authority Resolution no. ARG/elt 199/11 of December 29, 2011, which establishes a new reimbursement mechanism for extraordinary costs (see note 26.3).

21. Inventories — €3,148 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Raw materials, consumables and supplies: –fuel ...... 2,024 1,847 177 –materials,equipmentandotherinventories ...... 1,032 844 188 Total ...... 3,056 2,691 365 Buildingsavailableforsale...... 82 87 (5) Advances...... 10 25 (15) TOTAL ...... 3,148 2,803 345

Raw materials, consumables and supplies consist of fuel inventories to cover the requirements of the generation companies and trading activities, as well as materials and equipment for plant operation, € maintenance and construction. They also include CO2 emissions allowances totaling 293 million at December 31, 2011 (€314 million at December 31, 2010). The buildings available for sale are related to remaining units from the Group’s real estate portfolio and are primarily civil buildings. The decrease is essentially related to sales made during the period.

22. Trade receivables — €11,570 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Customers: – sale and transport of electricity ...... 8,756 10,343 (1,587) –distributionandsaleofnaturalgas...... 1,353 1,788 (435) – other activities ...... 1,353 264 1,089 Total ...... 11,462 12,395 (933) Trade receivables due from associates ...... 61 45 16 Receivables for contract work in progress ...... 47 65 (18) TOTAL ...... 11,570 12,505 (935)

F-203 Trade receivables from customers are recognized net of allowances for doubtful accounts, which totaled €1,661 million at the end of the year, as compared with an opening balance of €1,349 million. The table below shows the changes in these allowances. Millions of euro Total at January 1, 2010 ...... 934 Accruals...... 717 Utilization ...... (214) Otherchanges ...... (88) Total at December 31, 2010 restated ...... 1,349 Accruals...... 519 Utilization ...... (449) Otherchanges ...... 242 Total at December 31, 2011 ...... 1,661

Trade receivables that had not been written down at December 31, 2011, break down by maturity as follows: Millions of euro Notpastdue...... 7,020 Past due: –from0to6months...... 2,618 –from6to12months...... 601 –from12to24months...... 559 –morethan24months ...... 772 Total at December 31, 2011 ...... 11,570

23. Tax receivables — €1,251 million Tax receivables at December 31, 2011, totaled €1,251 million and are essentially related to income tax credits in the amount of €512 million (€819 million at December 31, 2010), credits for indirect taxes in the amount of €406 million (€446 million at December 31, 2010), and receivables for other taxes and tax surcharges in the amount of €225 million (€211 million at December 31, 2010).

24. Current financial assets — €10,466 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Current financial assets included in net financial position (see note 26.4) ...... 7,954 10,993 (3,039) Derivativecontracts ...... 2,420 845 1,575 Other ...... 92 84 8 Total ...... 10,466 11,922 (1,456)

For more on “current financial assets included in net financial position”, please see note 26.4. For more information on “derivative contracts”, please see note 6.2.

F-204 25. Other current assets — €2,135 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 959 630 329 Receivable due from employees ...... 41 41 — Receivables due from others ...... 985 1,289 (304) Accruedoperatingincomeandprepaidexpenses ...... 150 216 (66) Total ...... 2,135 2,176 (41)

“Receivables due from Electricity Equalization Fund and similar bodies” include receivables in respect of the Italian system in the amount of €833 million (€479 million at December 31, 2010), and the Spanish system in the amount of €126 million (€151 million at December 31, 2010). Including the portion of receivables classified as long-term (€85 million), operating receivables due from the Electricity Equalization Fund and similar bodies at December 31, 2011, amounted to €1,044 million (€772 million at December 31, 2010), offset by payables of €2,782 million (€2,519 million at December 31, 2010). The increase in the item compared with the previous year is attributable to a rise in receivables associated with equalization mechanisms in respect of electricity purchases.

26. Net financial position and long-term financial receivables and securities — €44,629 million The following table reports the net financial position and long-term financial receivables and securities on the basis of the items on the consolidated balance sheet. at Dec. 31, 2010 Notes at Dec. 31, 2011 restated Change Millions of euro Long-termloans...... 26.1 48,703 52,440 (3,737) Short-term loans ...... 26.2 4,799 8,209 (3,410) Current portion of long-term loans ...... 26.2 9,672 2,999 6,673 Non-current financial assets ...... 26.3 (3,576) (2,567) (1,009) Current financial assets ...... 26.4 (7,954) (10,993) 3,039 Cash and cash equivalents ...... 26.5 (7,015) (5,164) (1,851) Total ...... 44,629 44,924 (295)

F-205 Pursuant to the CONSOB instructions of July 28, 2006, the following table reports the net financial position at December 31, 2011, and December 31, 2010, reconciled with net financial debt as provided for in the presentation methods of the Enel Group. at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Cashandcashequivalentsonhand...... 1,068 6 1,062 Bankandpostofficedeposits...... 5,947 5,158 789 Securities ...... 52 95 (43) Liquidity ...... 7,067 5,259 1,808 Short-term financial receivables ...... 1,900 1,289 611 Factoring receivables ...... 370 319 51 Short-term portion of long-term financial receivables ...... 5,632 9,290 (3,658) Current financial receivables ...... 7,902 10,898 (2,996) Short-termbankdebt...... (888) (281) (607) Commercialpaper...... (3,204) (7,405) 4,201 Short-term portion of long-term bank debt ...... (6,894) (949) (5,945) Bonds (short-term portion) ...... (2,473) (1,854) (619) Otherloans(short-termportion) ...... (305) (196) (109) Othershort-termfinancialpayables ...... (707) (523) (184) Total short-term financial debt ...... (14,471) (11,208) (3,263) Net short-term financial position ...... 498 4,949 (4,451) Debt to banks and financing entities ...... (9,918) (15,584) 5,666 Bonds ...... (37,461) (34,401) (3,060) Preferenceshares ...... (180) (1,474) 1,294 Otherloans...... (1,144) (981) (163) Long-term financial position ...... (48,703) (52,440) 3,737 NET FINANCIAL POSITION as per CONSOB communication ...... (48,205) (47,491) (714) Long-term financial receivables and securities ...... 3,576 2,567 1,009 NET FINANCIAL DEBT ...... (44,629) (44,924) 295

There are no transactions with related parties for these items.

F-206 26.1 Long-term loans (including the portion falling due within 12 months) — €58,375 million The aggregate includes long-term liabilities in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within twelve months. The following table shows long-term debt and repayment schedules at December 31, 2011, grouped by loan and interest rate type.

at Dec. 31, Portion at Dec. 31, 2011 2010 falling due Maturing in at more Nominal Current than Maturing Balance value Balance portion 12 months 2013 2014 2015 2016 Beyond

Millions of euro Bonds: –listed,fixedrate ...... 2012-2097 25,042 25,251 21,224 1,168 23,874 1,863 462 2,724 3,689 15,136 –listed,floatingrate...... 2012-2031 6,521 6,559 6,690 1,067 5,454 88 1,251 1,472 1,182 1,461 –unlisted,fixedrate ...... 2012-2039 6,606 6,613 6,426 180 6,426 772 1,051 — 120 4,483 –unlisted,floatingrate...... 2012-2032 1,765 1,765 1,915 58 1,707 59 61 63 64 1,460 Total ...... 39,934 40,188 36,255 2,473 37,461 2,782 2,825 4,259 5,055 22,540 Bank loans: –fixedrate ...... 2012-2046 900 911 735 93 807 45 39 42 62 619 –floatingrate...... 2012-2035 10,514 10,562 13,962 3,128 7,386 641 2,158 657 1,178 2,752 – use of revolving credit lines ...... 2012-2016 5,398 5,398 1,836 3,673 1,725 50 500 1,000 175 — Total ...... 16,812 16,871 16,533 6,894 9,918 736 2,697 1,699 1,415 3,371 Preference shares:(1) –floatingrate...... 2013 180 181 1,474 — 180 180——— — Total ...... 180 181 1,474 — 180 180——— — Non-bank loans: –fixedrate ...... 2012-2035 931 931 773 178 753 83 87 62 63 458 –floatingrate...... 2012-2029 518 518 404 127 391 85 64 41 41 160 Total ...... 1,449 1,449 1,177 305 1,144 168 151 103 104 618 TOTAL ...... 58,375 58,689 55,439 9,672 48,703 3,866 5,673 6,061 6,574 26,529

(2) The preference shares issued by Endesa Capital Finance LLC are perpetual, with an option for early redemption at par as from 2013. The balance for bonds is stated net of €520 million relating to the unlisted floating-rate “Special series of bonds reserved for employees 1994-2019”, which the Parent Company holds in portfolio, while Enel.Re holds bonds issued by Enel SpA totaling €30 million.

F-207 The table below reports long-term financial debt by currency and interest rate.

Long-term financial debt by currency and interest rate at Dec. 31, 2011 at Dec. 31, 2010 at Dec. 31, 2011 Current average Current effective Balance Nominal value Balance interest rate interest rate Millions of euro Euro ...... 40,608 40,824 38,699 3.50% 3.50% USdollar...... 8,795 8,822 8,444 5.86% 5.96% Pound sterling ...... 4,483 4,536 4,350 5.83% 5.87% Colombianpeso..... 1,299 1,299 1,156 8.70% 8.70% Brazilian real ...... 1,090 1,093 1,073 11.13% 11.13% Chileanpeso/UF .... 712 728 765 9.29% 12.73% Peruviansol ...... 356 356 366 6.47% 6.47% Russianruble ...... 335 335 220 7.50% 7.74% Japaneseyen...... 314 314 184 2.43% 2.46% Othercurrencies..... 383 382 182 Total non-euro currencies ...... 17,767 17,865 16,740 TOTAL ...... 58,375 58,689 55,439

Long-term financial debt denominated in currencies other than the euro increased by €1,027 million. The change is largely attributable to new borrowing in currencies other than the euro and the general weakening of the euro against the other main currencies. However, that change is essentially figurative as it was generated by debt denominated in currencies other than the euro (hedged by corresponding cross currency interest rate swaps) and the debt of Group companies whose functional currency is not the euro.

Change in the nominal value of long-term debt

at Dec. 31, 2010 at Dec. 31, 2011 Change in own Change in scope New Exchange rate Nominal value Repayments bonds of consolidation financing differences Nominal value

Millions of euro Bonds ...... 36,512 (1,808) (84) — 5,224 344 40,188 Bankloans...... 16,650 (4,763) — 200 4,795 (11) 16,871 Preferenceshares..... 1,500 (1,319) — — — — 181 Otherloans ...... 1,177 (202) — 19 467 (12) 1,449 Total financial debt ...... 55,839 (8,092) (84) 219 10,486 321 58,689

Compared with December 31, 2010, the nominal value of long-term debt at December 31, 2011, increased by €2,850 million, which is the net effect of €8,092 million in repayments, repurchases of €84 million of own bonds, €219 million arising from changes in the scope of consolidation, €10,486 million in new loans, and €321 million in exchange rate differences.

F-208 Repayments for the period concerned: Š bonds totaling €1,808 million, including: Š €750 million in respect of a fixed-rate bond issued by Enel SpA maturing in May 2011; Š €300 million in respect of a floating-rate bond issued by Endesa Capital maturing in November 2011; Š €195 million in respect of a fixed-rate bond issued by Slovenské elektrárne maturing in June 2011; Š €120 million in respect of a fixed-rate bond issued by Enel OGK-5 maturing in September 2011; Š €105 million in respect of a fixed-rate bond issued by Endesa Internacional BV maturing in February 2011. Š bank loans amounting to €4,763 million, of which: Š €3,000 million in voluntary repayments of the 2007 and 2009 Credit Facilities, of which €1,484 million in respect of the tranche falling due in 2012, €1,042 million in in respect of the tranche falling due in 2014 and €474 million in respect of the tranche falling due in 2016; Š €700 million in early voluntary repayments of floating-rate bank loans of Endesa following collections on the rate deficit; Š €426 million in respect of floating-rate bank loans of Endesa; Š €637 million in respect of other bank loans of Group companies falling due in 2011. Š preference shares issued by Endesa Capital Finance, repaid voluntarily thanks in part to collection of part of the receivables in respect of the Spanish rate deficit with a nominal value of €1,319 million; Š other loans totaling €202 million. The change in the scope of consolidation mainly includes the long-term bank loans of Enel Unión Fenosa Renovables with a nominal value of €221 million. The main financing operations carried out in 2011 include: Š in January 2011, a bond in Colombian pesos issued by Emgesa for a total of €290 million; Š in March and June 2011, the issue, under the Global Medium-Term Notes program, of bonds by Enel Finance International in the form of private placements and public placements (for those denominated in Swiss francs), with the following characteristics: Š €150 million fixed-rate 5.6% maturing in 2031; Š €50 million fixed-rate 5.65% maturing in 2030; Š 150 million Swiss francs fixed-rate 2% maturing in 2015; Š 100 million Swiss francs fixed-rate 3% maturing in 2020; Š 11,500 million yen fixed-rate 1% maturing in 2018. Š in June and October 2011, bonds in Brazilian reais by Ampla and Coelce totaling €311 million; Š on July 12, 2011, the issue, under the Global Medium-Term Notes program, of a bond by Enel Finance International for institutional investors totaling €1,750 million, structured into the following two tranches: Š €1,000 million fixed-rate 4.125% maturing July 12, 2017;

F-209 Š €750 million fixed-rate 5% maturing July 12, 2021. Š on October 24, 2011, the issue, under the Global Medium-Term Notes program, of a bond by Enel Finance International for institutional investors totaling €2,250 million, structured into the following two tranches: Š €1,250 million fixed-rate 4.625% maturing June 24, 2015; Š €1,000 million fixed-rate 5.750% maturing October 24, 2018. Š on October 26, 2011, the drawing by Enel Green Power International on a credit facility granted by the Danish government’s Export Credit Agency in the amount of €112 million; Š an increase in drawings by Enel SpA on bilateral credit facilities in the amount of €2,000 million; Š an increase in drawings by Slovenské elektrárne on committed revolving credit facilities in the amount of €440 million; Š the drawing by Enel Distribuzione on a facility granted by the European Investment Bank (EIB) in the amount of €350 million; Š the drawing by Enel Distribuzione on a facility granted by Cassa Depositi e Prestiti with EIB funds in the amount of €200 million; Š the drawing on finance leases obtained by the Renewable Energy Division totaling €138 million; Š an increase in drawings by Enel OGK-5 on revolving credit facilities in the amount of €120 million; Š the issue of a bond denominated in rubles by Enel OGK-5 in the amount of €120 million. In addition, the 5-year €10 billion syndicated credit facility was drawn by Enel Finance International in the amount of €1,000 million. Š The main financing contracts finalized in 2011 included: Š on June 30, 2011, Slovenské elektrárne obtained a bilateral credit line of €165 million, maturing in December 2017; Š during 2011, the renegotiation and signing of revolving credit lines totalling €3,242 million; Š on November 23, 2011, the Global Medium-Term Notes program was increased from €25 billion to €30 billion, with Enel SpA and Enel Finance International as issuers and Enel SpA as guarantor; Š on December 21, 2011, Enel Green Power, acting through “ENROP” (Eolicas de Portugal SA), agreed a project financing initiative with the EIB in the amount of €260 million to build wind farms.

F-210 The following table compares the carrying amount and the fair value of long-term debt, including the portion falling due within twelve months, broken down by category. For listed debt instruments, the fair value is given by official prices. For unlisted instruments the fair value is determined using appropriate valuation models for each category of financial instrument and market data at the closing date of the year, including the associated credit spreads. at Dec. 31, 2011 at Dec. 31, 2010 Carrying amount Fair value Carrying amount Fair value Millions of euro Bonds: –fixedrate ...... 31,648 30,701 27,650 29,291 –floatingrate...... 8,286 7,874 8,605 8,789 Total ...... 39,934 38,575 36,255 38,080 Bank loans: –fixedrate ...... 900 851 735 728 –floatingrate...... 15,912 13,332 15,798 15,968 Total ...... 16,812 14,183 16,533 16,696 Preference shares: –floatingrate...... 180 181 1,474 1,500 Total ...... 180 181 1,474 1,500 Non-bank loans: –fixedrate ...... 931 957 773 792 –floatingrate...... 518 560 404 405 Total ...... 1,449 1,517 1,177 1,197 TOTAL ...... 58,375 54,456 55,439 57,473

F-211 The following tables show the changes in long-term loans for the period, distinguishing current amounts from amounts falling due at more than twelve months.

Long-term loans (excluding current portion) Carrying amount at Dec. 31, 2011 at Dec. 31, 2010 Change Millions of euro Bonds: –fixedrate ...... 30,300 26,459 3,841 –floatingrate...... 7,161 7,942 (781) Total ...... 37,461 34,401 3,060 Bank loans: –fixedrate ...... 807 702 105 –floatingrate...... 9,111 14,882 (5,771) Total ...... 9,918 15,584 (5,666) Preference shares: –floatingrate...... 180 1,474 (1,294) Total ...... 180 1,474 (1,294) Non-bank loans: –fixedrate ...... 753 699 54 –floatingrate...... 391 282 109 Total ...... 1,144 981 163 TOTAL ...... 48,703 52,440 (3,737)

Current portion of long-term loans Carrying amount

at Dec. 31, 2011 at Dec. 31, 2010 Change Millions of euro Bonds: –fixedrate ...... 1,348 1,191 157 –floatingrate...... 1,125 663 462 Total ...... 2,473 1,854 619 Bank loans: –fixedrate ...... 93 33 60 –floatingrate...... 6,801 916 5,885 Total ...... 6,894 949 5,945 Non-bank loans: –fixedrate ...... 178 74 104 –floatingrate...... 127 122 5 Total ...... 305 196 109 TOTAL ...... 9,672 2,999 6,673

F-212 The Group’s main long-term financial debts are governed by covenants containing undertakings by the borrowers (Enel, Endesa and the other Group companies) and in some cases the Parent Company as guarantor that are commonly adopted in international business practice. The main covenants regard the bond issues carried out within the framework of the Global Medium-Term Notes program, loans granted by the EIB and Cassa Depositi e Prestiti, the Credit Agreement 2007, the Credit Agreement 2009 and the €10 billion revolving line of credit agreed in April 2010. To date none of the covenants have been triggered. The commitments in respect of the bond issues in the Global Medium-Term Notes program can be summarized as follows: Š negative pledge clauses under which the issuer may not establish or maintain (except under statutory requirement) mortgages, liens or other encumbrances on all or part of its assets to secure any listed bond or bond for which listing is planned unless the same guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities constitute a direct, unconditional and unsecured obligation of the issuer and are issued without preferential rights among them and have at least the same seniority as other present and future bonds of the issuer itself; Š specification of default events, whose occurrence (e.g. insolvency, failure to pay principle or interest, initiation of liquidation proceedings, etc.) constitutes a default; under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) issued by the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least 10% of gross consolidated revenues or total consolidated assets) constitutes a default in respect of the liability in question, which becomes immediately repayable; Š early redemption clauses in the event of new tax requirements, which permit early redemption at par of all outstanding bonds. The main covenants governing the loans granted to a number of Group companies by the EIB can be summarized as follows: Š negative pledge clauses, under which Enel undertakes not to establish or grant to third parties additional guarantees or privileges with respect to those already established in the individual contracts by the company or other subsidiaries of the Group, unless an equivalent guarantee is extended equally or pro rata to the loans in question; Š clauses that require the guarantor (whether Enel SpA or banks acceptable to the EIB) to maintain its rating above a specified grade; in the case of guarantees provided by Enel SpA, the Group’s equity may not fall below a specified level; Š material changes clauses, under which the occurrence of a specified event (mergers, spin-offs, disposal or transfer of business units, changes in company control structure, etc.) gives rise to the consequent adjustment of the contract, without which the loan shall become repayable immediately without payment of any commission; Š requirements to report periodically to the EIB; Š requirement for insurance coverage and maintenance of property, possession and use of the works, plant and machinery financed by the loan over the entire term of the agreement; Š contract termination clauses, under which the occurrence of a specified event (serious inaccuracies in documentation presented in support of the contract, failure to repay at maturity, suspension of payments, insolvency, special administration, disposal of assets to creditors, dissolution, liquidation, total or partial disposal of assets, declaration of bankruptcy or composition with creditors or receivership, substantial decrease in equity, etc.) triggers immediate repayment.

F-213 In 2009 Cassa Depositi e Prestiti granted a loan to Enel Distribuzione that was amended in 2011. The main covenants governing the loan and the guarantee issued by the Parent Company can be summarized as follows: Š a termination and acceleration clause, under which the occurrence of a specified event (such as failure to pay principal or interest installments, breach of contract obligations or occurrence of a substantive prejudicial event, etc.) entitles Cassa Depositi e Prestiti to terminate the loan; Š a clause forbidding Enel or its significant subsidiaries (defined in the contract and the guarantee as subsidiaries pursuant to Article 2359 of the Civil Code or consolidated companies whose turnover or total gross assets are at least 10% of consolidated turnover or consolidated gross assets) from establishing additional liens, guarantees or other encumbrances except for those expressly permitted unless Cassa Depositi e Prestiti gives it prior consent; Š clauses requiring Enel to report to Cassa Depositi e Prestiti both periodically and upon the occurrence of specified events (such as a change in Enel’s credit rating, or breach in an amount above a specified threshold in respect of any financial debt contracted by Enel, Enel Distribuzione or any of their significant subsidiaries). Violation of such obligation entitles Cassa Depositi e Prestiti to exercise an acceleration clause. Š a gearing clause, under which, at the end of each measurement period (half yearly), Enel’s consolidated net financial debt shall not exceed 4.5 times annual consolidated EBITDA. The main covenants for the Credit Agreement 2007, the Credit Agreement 2009 and the €10 billion revolving line of credit are substantially similar and can be summarized as follows: Š negative pledge clauses under which the borrower (and its significant subsidiaries) may not establish or maintain (with the exception of permitted guarantees) mortgages, liens or other encumbrances on all or part of its assets to secure any present or future financial liability; Š pari passu clauses, under which the payment undertakings constitute a direct, unconditional and unsecured obligation of the borrower and bear no preferential rights among them and have at least the same seniority as other present and future loans; Š change of control clause, which is triggered in the event (i) control of Enel is acquired by one or more parties other than the Italian state or (ii) Enel or any of its subsidiaries transfer a substantial portion of the Group’s assets to parties outside the Group such that the financial reliability of the Group is significantly compromised. The occurrence of one of the two circumstances may give rise to (a) the renegotiation of the terms and conditions of the financing or (b) compulsory early repayment of the financing by the borrower; Š specification of default events, whose occurrence (e.g. failure to make payment, breach of contract, false statements, insolvency or declaration of insolvency by the borrower or its significant subsidiaries, business closure, government intervention or nationalization, administrative proceeding with potential negative impact, illegal conduct, nationalization and government expropriation or compulsory acquisition of the borrower or one of its significant subsidiaries) constitutes a default. Unless remedied within a specified period of time, such default will trigger an obligation to make immediate repayment of the loan under an acceleration clause; Š under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) of the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least equal to a specified percentage (10% of gross consolidated revenues or total consolidated assets)) constitutes a default in respect of the liabilities in question, which become immediately repayable; Š periodic reporting requirements.

F-214 The Credit Agreement 2007 and the Credit Agreement 2009 also provide for the following covenants: Š mandatory early repayment clauses, under which the occurrence of a specified event (e.g. the issue of instruments on the capital market, new bank loans, stock issues or asset disposals) obliges the borrower to repay the related funds in advance at specific declining percentages based on the extent to which the line of credit has been drawn; Š a gearing clause, under which, at the end of each measurement period (half yearly), the Enel Group’s net financial debt shall not exceed 6 times annual consolidated EBITDA; Š a “subsidiary financial indebtedness” clause, under which the net aggregate amount of the financial debt of Enel’s subsidiaries (with the exception of the debt of “permitted subsidiaries”) must not exceed 20% of total gross consolidated assets. For the Credit Agreement 2009 only, as from 2012, at the end of each measurement period (half yearly), the gearing clause requires: (i) that the Enel Group’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA; (ii) the ratio of annual consolidated EBITDA to net consolidated interest expense shall not be less than 4. The undertakings in respect of the bond issues carried out by Endesa Capital under the Global Medium-Term Notes program can be summarized as follows: Š cross-default clauses under which debt repayment would be accelerated in the case of failure to make payment (above specified amounts) on any financial liability of Endesa or Endesa Capital that is listed or could be listed on a regulated market; Š negative pledge clauses under which the issuer may not establish mortgages, liens or other encumbrances on all or part of its assets to secure any financial liability that is listed or could be listed on a regulated market, unless an equivalent guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities and guarantees have at least the same seniority as all other present and future unsecured and unsubordinated securities issued by Endesa Capital or Endesa. Finally, the loans granted to Endesa, International Endesa BV and Endesa Capital do not contain cross-default clauses regarding the debt of subsidiaries in Latin America. Undertakings in respect of project financing granted to subsidiaries regarding renewables and other subsidiaries in Latin America contain covenants commonly adopted in international business practice. The main commitments regard clauses pledging all the assets assigned to the projects in favor of the creditors. A residual portion of the debt of Enersis and Endesa Chile (both controlled indirectly by Endesa) is subject to cross-default clauses under which the occurrence of a default event (failure to make payment or breach of other obligations) in respect of any financial liability of a subsidiary of Enersis or Endesa Chile constitutes a default in respect of the liability in question, which becomes immediately repayable. In addition, many of these agreements also contain cross-acceleration clauses that are triggered by specific circumstances, certain government actions, insolvency or judicial expropriation of assets. In addition to the foregoing, a number of loans provide for early repayment in the case of a change of control over Endesa or the subsidiaries.

F-215 26.2 Short-term loans — €4,799 million At December 31, 2011 short-term loans amounted to €4,799 million, a decrease of €3,410 million compared with December 31, 2010. They break down as follows. at Dec. 31, 2010 at Dec. 31, 2011 restated Change Carrying Carrying Carrying amount Fair value amount Fair value amount Fair value Millions of euro Short-term amounts due to banks...... 888 888 281 281 607 607 Commercialpaper ...... 3,204 3,204 7,405 7,405 (4,201) (4,201) Cash collateral and other financingonderivatives ..... 650 650 343 343 307 307 Other short-term financial payables ...... 57 57 180 180 (123) (123) Short-term financial debt ..... 4,799 4,799 8,209 8,209 (3,410) (3,410)

Short-term amounts due to banks totaled €888 million. The payables represented by commercial paper relate to issues outstanding at the end of December 2011 in the context of the €6,000 million program launched by Enel Finance International and guaranteed by Enel SpA, as well as the €3,309 million program of Endesa Internacional BV (now Endesa Latinoamérica) and Enersis and the €45 million Pagares program of Sociedade Térmica Portuguesa SA. At December 31, 2011, the issues in respect of the above programs totaled €3,204 million, of which €2,016 million for Enel Finance International and €1,188 million for Endesa Internacional BV (now Endesa Latinoamérica). The nominal value of the commercial paper is €3,211 million and is denominated in the following currencies: euros (€2,967 million); US dollars (the equivalent of €191 million); yen (the equivalent of €24 million) and Swiss francs (the equivalent of €29 million). The exchange rate risk in respect of commercial paper in currencies other than the euro is fully hedged by currency swaps.

26.3 Non-current financial assets included in debt — €3,576 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Securities held to maturity ...... 68 93 (25) Financial investments in funds or portfolio management products at fair value through profit or loss ...... 10 11 (1) Securities available for sale ...... 2 — 2 Other financial receivables ...... 3,496 2,463 1,033 Total ...... 3,576 2,567 1,009

“Securities held to maturity” are bonds.

F-216 The following table reports the breakdown of the above item on the basis of the measurement inputs used, as provided for under the amendments to IFRS 7. at Dec. 31, 2011 Fair value Level 1 Level 2 Level 3 Millions of euro Securities held to maturity ...... 68 68 — — Financial investments in funds or portfolio management products at fair value through profit or loss ...... 10 10 — — Securities available for sale ...... 2 2 — — At December 31, 2011, “other financial receivables” include, among other things: Š receivables in respect of the State Decommissioning Fund of Slovakia in the amount of €568 million (€507 million at December 31, 2010); Š receivables in respect of the Electricity Equalization Fund in the amount of €591 million for reimbursement of the extraordinary costs incurred for the early replacement of electromechanical meters with digital meters, which were reclassified to “Other non-current financial assets” following the issue of Authority Resolution no. ARG/elt 199/11 of December 29, 2011. The latter establishes a new procedure for reimbursing such extraordinary costs. The amount is no longer based on the ordinary equalization system but is instead paid annually by the Electricity Equalization Fund through reimbursements to Enel Distribuzione SpA in specified periodic amounts at specified dates over a period of 16 years. The new reimbursement mechanism also provides for the option of asking the Electricity Equalization Fund to pay the first four annual instalments as a definitive lump-sum advance .

26.4 Current financial assets included in debt — €7,954 million at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Short-term portion of long-term financial receivables .... 5,632 9,290 (3,658) Receivables for factoring advances ...... 370 319 51 Securities: – securities at fair value through profit or loss ...... — 8 (8) – securities available for sale ...... 51 56 (5) – securities held to maturity ...... 1 31 (30) Financial receivables and cash collateral ...... 1,076 718 358 Other ...... 824 571 253 Total ...... 7,954 10,993 (3,039)

“Short-term portion of long-term financial receivables” consists of the financial receivable in respect of the Spanish electricity system deficit in the amount of €5,379 million (€9,186 million at December 31, 2010). The change for the period essentially reflects new receivables accrued in 2011 and collections received (€6,091 million including the effects of reimbursements in respect of extra- peninsular generation), including the assignment of the receivables to the special securitization fund as established by the Spanish government.

F-217 The following table provides a breakdown of “securities” on the basis of the measurement inputs used, as provided for under the amendments to IFRS 7.

at Dec. 31, 2011 Fair value Level 1 Level 2 Level 3 Millions of euro Securities available for sale ...... 51 51 — — Securities held to maturity ...... 1 1 — —

26.5 Cash and cash equivalents — €7,015 million Cash and cash equivalents, detailed in the table below, are not restricted by any encumbrances, apart from €160 million (€171 million at December 31, 2010) primarily in respect of deposits pledged to secure transactions.

at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Bank and post office deposits ...... 5,947 5,158 789 Cash and cash equivalents on hand ...... 1,068 6 1,062 Total ...... 7,015 5,164 1,851

27. Assets and liabilities held for sale — €381 million and €58 million Changes in assets held for sale during the year are reported in the following table:

Reclassification from/to current and Disposals and at Dec. 31, 2010 non-current change in scope Other restated assets of consolidation changes at Dec. 31, 2011 Millions of euro Property, plant and equipment...... 1,017 (34) (793) 59 249 Intangible assets ..... 45 (3) (40) (1) 1 Goodwill ...... 258 (5) (57) (105) 91 Deferred tax assets . . . 15 — (13) (1) 1 Other non-current assets ...... 26 3 (3) (17) 9 Cash and cash equivalents ...... 83 5 (97) 14 5 Inventories, trade receivables and other current assets ...... 174 2 (158) 7 25 Total ...... 1,618 (32) (1,161) (44) 381

“Assets held for sale” amounted to €381 million at December 31, 2011. They essentially include the assets of Endesa Ireland and certain assets held by Endesa Generación, in the amount of €360 million. “Reclassification from/to current and non-current assets” mainly regards Enel Green

F-218 Power Bulgaria, which in 2011 ceased to meet the requirements set out in IFRS 5 for classification under this item. This factor was only partially offset by the inclusion of the asset of WISCO here. “Other changes” reports the impairment loss on the goodwill of Endesa Ireland in the amount of €105 million and investments made, mainly in Ireland. At December 31, 2010, the item reported certain assets of the Bulgarian companies (€722 million), certain assets held by Endesa in Ireland and Latin America (€521 million), as well as the assets of Enel Unión Fenosa Renovables (€355 million) Liabilities held for sale amounted to €58 million at December 31, 2011. They comprised the liabilities of Endesa Ireland and certain liabilities held by Endesa Generación in the amount of €54 million, and other liabilities of minor companies. At December 31, 2010, the item reported certain liabilities of Enel Unión Fenosa Renovables (€328 million) and certain liabilities held in Ireland and Latin America (€188 million). Changes in liabilities held for sale during the year are as follows:

Reclassification Disposals and from current and change in at Dec. 31, 2010 non-current scope of Other restated liabilities consolidation changes at Dec. 31, 2011 Millions of euro Long-termloans...... 400 — (399) — 1 Post-employment and other employee benefits ...... 4 — (3) — 1 Provisions for risks andcharges...... 62 — (16) (16) 30 Deferred tax liabilities ...... 30 — (11) — 19 Other non-current liabilities ...... 32 — (31) (1) — Short-term loans ...... 330 — (329) — 1 Trade payables and other current liabilities ...... 140 3 (112) (25) 6 Total ...... 998 3 (901) (42) 58

The decrease in all items of assets and liabilities held for sale compared with December 31, 2010, essentially reflects assets and liabilities classified as held for sale in 2010 and then disposed of in 2011.

28. Shareholders’ equity — €54,440 million 28.1 Equity attributable to the shareholders of the Parent Company — €38,790 million Share capital — €9,403 million At December 31, 2011 (as at December 31, 2010), the share capital of Enel SpA — considering no options were exercised as part of stock option plans in 2011 — amounted to €9,403,357,795 fully subscribed and paid up, represented by 9,403,357,795 ordinary shares with a par value of €1.00 each. At the same date, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, no shareholders held more than 2% of the total share capital,

F-219 apart from the Ministry for the Economy and Finance, which holds 31.24%, BlackRock Inc., which holds a 2.74% stake wholly owned by its subsidiaries, and Natixis SA (with 2.66%).

Other reserves — €10,348 million Share premium reserve — €5,292 million Legal reserve — €1,881 million The legal reserve is formed of the part of net income that, pursuant to Article 2430 of the Civil Code, cannot be distributed as dividends.

Reserve from translation of financial statements in currencies other than euro — €120 million The decrease in this aggregate for the year is attributable to the appreciation of the functional currency against the foreign currencies used by subsidiaries.

Reserve from measurement of financial instruments — €(49) million This item includes net losses recognized directly in equity resulting from the measurement of cash flow hedging derivatives, as well as net unrealized losses arising in respect of the fair value measurement of financial assets.

Reserve from disposal of equity interests without loss of control — €749 million This item reports the gain posted on the public offering of Enel Green Power shares, net of expenses associated with the disposal and the related taxation. The change in the year reflects the distribution of bonus shares to shareholders who held their investment in Enel Green Power for a year, as provided for in the public offering in 2010.

Reserve from equity investments accounted for using the equity method — €15 million The reserve reports the share of comprehensive income to be recognized directly in income for companies accounted for using the equity method.

F-220 The table below shows the changes in gains and losses recognized directly in equity, including non-controlling interests, with specific reporting of the related tax effects. at Dec. 31, 2010 restated Change at Dec. 31, 2011

Gains/ (Losses) Of which Of which recognized Of which Of which Of which Of which shareholders non- in equity Released shareholders non- shareholders non- of Parent controlling for the to income of Parent controlling of Parent controlling Total Company interests year statement Taxes Total Company interests Total Company interests

Millions of euro Reserve from translation of financial statements in currencies other thaneuro...... 1,340 456 884 (731) — — (731) (336) (395) 609 120 489 Reserve from measurement of financial instruments...... 48 80 (32) (351) 74 55 (222) (129) (93) (174) (49) (125) Share of OCI of equity investments accounted for using the equity method...... 24 24 — (9) — — (9) (9) — 15 15 — Total gains/ (losses) recognized in equity ...... 1,412 560 852 (1,091) 74 55 (962) (474) (488) 450 86 364

28.2 Non-controlling interests — €15,650 million The following table reports the composition of non-controlling interests by Division. 2011 2010 restated Change Millions of euro IberiaandLatinAmerica...... 11,528 11,959 (431) International...... 1,958 1,839 119 RenewableEnergy...... 1,952 1,754 198 GenerationandEnergyManagement...... 212 311 (99) Otherminor ...... — 14 (14) Total ...... 15,650 15,877 (227)

29. Post-employment and other employee benefits — €3,000 million The Group provides its employees with a variety of benefits, including termination benefits, additional months’ pay for having reached age limits or eligibility for old-age pension, loyalty bonuses for achievement of seniority milestones, supplemental retirement and healthcare plans, residential electricity discounts and similar benefits. More specifically: Š for Italy, the item “pension benefits” regards estimated accruals made to cover benefits due under the supplemental retirement schemes of retired executives, while for companies abroad it covers post-employment benefits; Š the item “electricity discount” comprises a number of benefits regarding residential electricity supply. Until last year the discount was granted to current and retired employees, but, following an agreement with the unions, has now been converted into other forms of remuneration for current employees and therefore remains in effect only for retired employees; Š the item “health insurance” reports benefits for current or retired employees covering medical expenses; Š “other benefits” comprise liabilities in respect of defined-benefit plans not included in the previous items.

F-221 The table below reports the change for the year in actuarial liabilities and the fair value of plan assets, as well as a reconciliation of the actuarial liabilities, net of assets, with the carrying amount of liabilities recognized as at December 31, 2011 and December 31, 2010. 2011 2010 Pension Electricity Health Other Pension Electricity Health Other benefits discount insurance benefits Total benefits discount insurance benefits Total

Millions of euro Changes in actuarial liability: Actuarial liability at the beginning of the year . . 3,175 1,750 225 119 5,269 2,938 1,789 182 110 5,019 Servicecost...... 25 14 2 34 75 31 17 2 12 62 Interestcost...... 154 66 14 8 242 160 70 11 7 248 Benefitspaid...... (207) (83) (17) (35) (342) (217) (89) (14) (14) (334) Curtailments / settlements ...... (538) (162) — (7) (707) ————— Otherchanges...... 25 3 1 71 100 (19) (8) — — (27) Actuarial (gains)/losses . . (161) (88) 32 3 (214) 193 (30) 36 2 201 Foreign exchange (gains)/ losses ...... (57) — (7) (1) (65) 93 1 8 2 104 Liabilities held for sale . . . — — — — — (4) — — — (4) Actuarial liability at the end of the year ...... 2,416 1,500 250 192 4,358 3,175 1,750 225 119 5,269 Changes in plan assets: Fair value at the beginning of the year . . 1,575 — — — 1,575 1,442 — — — 1,442 Expected return on plan assets ...... 93 — — — 93 104 — — — 104 Actuarial gains/(losses) . . (75) — — — (75) 4———4 Contributions paid by company ...... 153 83 17 20 273 155 89 14 13 271 Curtailments / settlements ...... (418) — — — (418) ————— Otherchanges...... 21 — — — 21 22 — — — 22 Foreign exchange (gains)/ losses ...... (48) — — — (48) 65 — — — 65 Benefitspaid...... (207) (83) (17) (20) (327) (217) (89) (14) (13) (333) Fair value at the end of the year ...... 1,094 — — — 1,094 1,575 — — — 1,575 Reconciliation with carrying amount: Net actuarial liability .... 1,322 1,500 250 192 3,264 1,600 1,750 225 119 3,694 Net unrecognized (gains)/ losses ...... 123 95 35 11 264 368 217 28 12 625 Carrying amount of liability ...... 1,199 1,405 215 181 3,000 1,232 1,533 197 107 3,069

The employees of the Endesa Group in Spain included in the framework agreement of October 25, 2000 participate in a specific defined-contribution pension plan and, in cases of disability or death of employees in service, a defined-benefit plan which is covered by appropriate insurance policies. In addition, the company has certain obligations to retired ex-workers, mainly concerning the supply of electricity. Outside Spain, defined-benefit pension plans are also in force, notably in Brazil. The liabilities recognized at the end of the year are reported net of the fair value of the plan assets (where this is not greater than that of the related liabilities), which are attributable entirely to Endesa, in the amount of €1,094 million at December 31, 2011, and of the net unrecognized actuarial losses in the amount of €264 million. As regards plan assets, which at December 31, 2011 amounted to €1,191 million (of which €1,094 million adjusting the liability for pension benefits and €97 million recognized under

F-222 non-current financial assets), 52% of the market value of such assets regards assets located in Spain (65% at December 31, 2010) and 48% regards assets in Brazil (35% at December 31, 2010). The assets break down as follows: % composition 2011 2010 Shares...... 22 25 Fixed-income securities ...... 70 69 Propertyandother ...... 8 6 Total ...... 100 100

At December 31, 2011, these assets included shares or bonds issued by Endesa Group companies in the amount of €17 million (€10 million at December 31, 2010). The expected return on the assets was estimated on the basis of forecasts for the main equity and fixed-income markets and using a weighting for the various asset classes similar to that adopted the previous year. The real return for 2011 was equal to 1.34% in Spain and 13.47% in other countries (0.4% in Spain and -1.9% in other countries in 2010). The following table reports the impact of employee benefits on the income statement. 2011 2010 Pension Electricity Health Other Pension Electricity Health Other benefits discount insurance benefits Total benefits discount insurance benefits Total

Millions of euro Servicecost ...... 25 14 2 34 75 31 17 2 12 62 Interestcost...... 154 66 14 8 242 160 70 11 7 248 Expected return on planassets ..... (93) — — — (93) (104) — — — (104) Amortization of actuarial (gains)/ losses...... 54 26 22 2 104 19 22 1 (4) 38 (Gains)/Losses for curtailment/ settlement of plans ...... (18) (152) — (5) (175) (11) (7) — — (18) Otherchanges .... 4 — — — 4 11 — — — 11 Total ...... 126 (46) 38 39 157 106 102 14 15 237

Employee benefit expenses recognized in 2011 came to €157 million (€237 million in 2010), of which €149 million in respect of net accretion cost recognized under financial expense (€144 million in 2010) and €8 million recognized under personnel costs. The main actuarial assumptions used to calculate the liabilities in respect of employee benefits and the plan assets are set out in the following table. 2011 2010 Iberian Latin Iberian Latin Italy peninsula America Other Italy peninsula America Other Discount rate ...... 4.70% 2.74%-4.66% 5.50%-10.50% 5.25%-8.64% 4.30% 2.49%-4.50% 5.50%-10.50% 4.50%-7.75% Rate of wage increases ...... 2.0%-4.0% 2.3% 0%-6.59% 2.50%-7.00% 2.0%-4.0% 2.3% 0%-6.35% 2.5%-7.50% Rate of increase in healthcarecosts..... 3.00% 3.5% 3.00%-10.50% — 3.00% 3.5% 3.00%-10.50% — Expected rate of return 2.87%- onplanassets...... — 3.94%-5.21% 11.1% — — 2.94% 12.1% —

F-223 If, at December 31, 2011, the twelve-month rate of change in healthcare costs had been 1 basis point higher, all other variables being equal, the liability for healthcare benefits would have been €14 million higher, with an overall negative impact on the income statement in terms of service cost and interest cost of €1 million. If, at December 31, 2011, the twelve-month rate of change in healthcare costs had been 1 basis point lower, all other variables being equal, the liability for healthcare benefits would have been €12 million lower, with a positive impact on the income statement in terms of service cost and interest cost of €1 million. The amount of contributions that is expected to be paid into defined-benefit plans in the subsequent year is equal to €33 million.

30. Provisions for risks and charges — €7,831 million Taken to Utilization at Dec. 31, 2010 income Change in scope of and other restated statement consolidation changes at Dec. 31, 2011 of which short term Millions of euro Provision for litigation, risks and other charges: – nuclear decommissioning . . . 3,020 34 — (108) 2,946 35 – non-nuclear plant retirement and site restoration...... 466 21 1 50 538 3 – litigation ...... 896 101 — (151) 846 61

–CO2 emissions charges ...... 12 (20) — 11 3 3 –taxesandduties .... 723 (116) (5) (256) 346 19 –other...... 1,689 (11) (6) (68) 1,604 584 Total ...... 6,806 9 (10) (522) 6,283 705 Provision for early- retirement incentives ...... 2,220 (146) (1) (525) 1,548 477 TOTAL ...... 9,026 (137) (11) (1,047) 7,831 1,182

Nuclear decommissioning provision The nuclear decommissioning provision includes the following: Š €2,513 million (€2,618 million at December 31, 2010) for the V1 and V2 plants at Jasklovske Bohunice and the EMO 1 and 2 plants at Mochovce, and also includes the provision for nuclear waste disposal in the amount of €117 million (€196 million at December 31, 2010), the provision for spent nuclear fuel disposal in the amount of €1,578 million (€1,571 million at December 31, 2010), and the provision for nuclear plant retirement in the amount of €818 million (€851 million at December 31, 2010). The estimated timing of the outlays described above takes account of current knowledge of environmental regulations, the operating time used in estimating the costs, and the difficulties presented by the extremely long time span over which such costs could arise. The charges covered by the provisions are reported at their present value using discount rates of between 4.15% and 4.55%;

F-224 Š €433 million (€402 million at December 31, 2010) for the costs that will be incurred at the time of decommissioning of nuclear plants by Enresa, a Spanish public enterprise responsible for such activities in accordance with Royal Decree 1349/03 and Law 24/2005. Quantification of the costs is based on the standard contract between Enresa and the electricity companies approved by the Ministry for the Economy in September 2001, which regulates the retirement and closing of nuclear power plants. The time horizon envisaged, three years, corresponds to the period from the termination of power generation to the transfer of plant management to Enresa (post-operational costs).

Non-nuclear plant retirement and site restoration provision The provision for “non-nuclear plant retirement and site restoration” represents the present value of the estimated cost for the retirement and removal of non-nuclear plants where there is a legal or constructive obligation to do so.

Other provisions “Other” provisions cover various risks and charges, mainly in connection with regulatory disputes and disputes with local authorities regarding various duties and fees.

31. Non-current financial liabilities — €2,307 million The item reports the fair value of derivatives only. For more information, please see note 6.3.

32. Other non-current liabilities — €1,313 million

at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Accruedoperatingexpensesanddeferredincome ...... 929 994 (65) Otheritems...... 384 250 134 Total ...... 1,313 1,244 69

At December 31, 2011, this item essentially consisted of revenues for electricity and gas connections and grants received for specific assets.

33. Trade payables — €12,931 million The item, which amounts to €12,931 million, includes payables in respect of energy supplies, fuel, materials, equipment associated with tenders and other services.

F-225 34. Current financial liabilities — €3,668 million

at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Deferred financial liabilities ...... 796 711 85 Derivativecontracts ...... 2,645 776 1,869 Otheritems...... 227 185 42 Total ...... 3,668 1,672 1,996

For more on “derivative contracts”, please see note 6.4.

35. Other current liabilities — €8,907 million

at Dec. 31, 2010 at Dec. 31, 2011 restated Change Millions of euro Payablesduetocustomers...... 1,599 1,500 99 Payables due to Electricity Equalization Fund and similar bodies ...... 2,782 2,519 263 Payablesduetoemployees ...... 484 512 (28) Othertaxpayables...... 888 717 171 Payables due to social security institutions ...... 218 207 11 Payables for put options granted to minority shareholders ...... 820 655 165 Other ...... 2,116 1,942 174 Total ...... 8,907 8,052 855

“Payables due to customers” include €1,049 million (€882 million at December 31, 2010) in security deposits related to amounts received from customers as part of electricity and gas supply contracts. Following the finalization of the contract, deposits for electricity sales, the use of which is not restricted in any way, are classified as current liabilities given that the company does not have an unconditional right to defer repayment beyond twelve months. “Payables due to Electricity Equalization Fund and similar bodies” include payables arising from the application of equalization mechanisms to electricity purchases on the Italian market amounting to €1,797 million (€1,507 million at December 31, 2010) and on the Spanish market amounting to €985 million (€1,012 million at December 31, 2010). The item “Payables for put options granted to minority shareholders” at December 31, 2011 mainly regards the liability to Enel Distributie Muntenia in the amount of €661 million (€512 million at December 31, 2010), Enel Energie Muntenia in the amount of €115 million (€89 million at December 31, 2010) and Marcinelle Energie in the amount of €43 million (€37 million at December 31, 2010). These liabilities, which are estimated at fair value on the basis of level 3 inputs, are determined on the basis of the exercise conditions specified in the contracts; the change for the year produced an increase of the same amount in the goodwill of the subsidiaries.

36. Related parties As an operator in the field of generation, transport, distribution and sale of electricity, Enel provides services to a number of companies controlled by the Italian State, Enel’s controlling shareholder. In the current regulatory framework, Enel concludes transactions with Terna — Rete Elettrica

F-226 Nazionale (Terna), the Single Buyer, the Energy Services Operator, and the Energy Markets Operator (each of which is controlled either directly or indirectly by the Ministry for the Economy and Finance). Fees for the transport of electricity payable to Terna and certain charges paid to the Energy Markets Operator are determined by the Authority for Electricity and Gas. Transactions relating to purchases and sales of electricity concluded with the Energy Markets Operator on the Power Exchange and with the Single Buyer are settled at market prices. In particular, companies of the Sales Division acquire electricity from the Single Buyer and settle the contracts for differences related to the allocation of CIP 6 energy with the Energy Services Operator, in addition to paying Terna fees for the use of the national transmission network. Companies that are a part of the Generation and Energy Management Division, in addition to paying fees for the use of the national transmission network to Terna, carry out electricity transactions with the Energy Markets Operator on the Power Exchange and sell electricity to the Single Buyer. The companies of the Renewable Energy Division that operate in Italy sells electricity to the Energy Markets Operator on the Power Exchange. Enel also acquires fuel for generation and gas for distribution and sale from Eni, a company controlled by the Ministry for the Economy and Finance. All transactions with related parties are concluded on normal market terms and conditions.

F-227 The following table summarizes transactions with related parties and with associated companies outstanding at December 31, 2011 and carried out during the period, respectively. Related parties Associated companies Total Italian Post Enel Rete Overall balance- Single Buyer EMO Terna Eni ESO Office Other Total SeverEnergia Gas Elica 2 CESI Other Total total sheet item % of total Millions of euro Balance sheet: Trade receivables . . . 75 836 362 9 73 — 57 1,412 1182—4061 1,473 11,570 12.7% Current financial assets...... — — 1 — — — — 1 ——————110,466 — Other current assets...... — 49 15 — 1 — — 65 ——1—56712,135 3.3% Tradepayables...... 1,139 600 466 141 651 101 69 3,167 — 73 — 29 35 137 3,304 12,931 25.6% Current financial liabilities ...... 1 — 1 — — — — 2 ——————23,668 0.1% Other current liabilities ...... 2 — 11 — — — 2 15 ——————158,907 0.2% Income statement: F-228 Revenues from sales...... 1,259 4,431 890 440 319 — 54 7,393 —452—1562 7,455 77,573 9.6% Other revenues and income...... — — 207 — — — 1 208 —— ——— 208 1,941 10.7% Raw materials and consumables...... 6,096 2,741 346 489 — — 100 9,772 — — — — 198 198 9,970 42,901 23.2% Services...... — 157 1,514 59 24 141 46 1,941 — 283 — 15 48 346 2,287 14,440 15.8% Other operating expenses ...... 2 — 5 — — — 14 21 —1—4—5262,143 1.2% Net income from commodity risk management...... (8) — 85 — — — — 77 ——————77 272 28.3% Financialincome.... — — 22 — — — — 22 5——27292,693 1.1% Financial expense . . . 1 — 2 — — 2 2 7 ——————75,717 0.1% In compliance with the Enel Group’s rules of corporate governance, transactions with related parties are carried out in accordance with criteria of procedural and substantive propriety. With a view to assuring substantive propriety — in order to ensure fairness in transactions with related parties, and to account for the special nature, value or other characteristics of a given transaction — the Board of Directors may ask independent experts to value the assets involved in the transaction and provide financial, legal or technical advice. In November 2010, the Board of Directors of Enel SpA approved a procedure governing the approval and execution of transactions with related parties undertaken by Enel SpA either directly or indirectly through its subsidiaries. The procedure (which can be found at http://www.enel.com/it-IT/ group/governance/principles/related_parts/) sets out rules designed to ensure the transparency and procedural and substantive propriety of transactions with related parties. It was adopted in implementation of the provisions of Article 2391-bis of the Italian Civil Code and the implementing rules established by CONSOB. It replaced, with effect from January 1, 2011, the rules governing transactions with related parties approved by the Board of Directors of Enel SpA on December 19, 2006 in implementation of the recommendations of the Corporate Governance Code for listed companies, the provisions of which were in effect until December 31, 2010.

37. Contractual commitments and guarantees The commitments entered into by the Enel Group and the guarantees given to third parties are shown below.

at Dec. 31, 2011 Millions of euro Guarantees given: – sureties and other guarantees granted to third parties ...... 4,766 Commitments to suppliers for: – electricity purchases ...... 54,708 – fuel purchases ...... 69,008 –varioussupplies ...... 3,153 –tenders ...... 1,936 –other ...... 2,458 Total 131,263 TOTAL ...... 136,029

Guarantees granted to third parties amounted to €4,766 million and include €500 million in commitments relating to the sale of real estate assets, in connection with the regulations that govern the termination of leases and the related payments, for a period of six years and six months from July 2004. The value of such guarantees is reduced annually by a specified amount. The expected cash flow of the lease contracts, including forecast inflation, is as follows: Š 2012: €53 million; Š 2013: €54 million; Š 2014: €54 million; Š 2015: €55 million; Š 2016: €55 million; The expected cash flow of the operating lease contracts of Endesa is as follows: Š 2012: €50 million;

F-229 Š 2013-2014: €60 million; Š 2015 and beyond: €211 million. Commitments for electricity amounted to €54,708 million at December 31, 2011, of which €21,604 million refer to the period 2012-2016, €11,692 million to the period 2017-2021, €7,321 million to the period 2022-2026 and the remaining €14,091 million beyond 2026. Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set in foreign currencies). The total at December 31, 2011, was €69,008 million, of which €38,100 million refer to the period 2012-2016, €23,653 million to the period 2017-2021, €5,758 million to the period 2022-2026 and the remaining €1,497 million beyond 2026. Various supply commitments include €274 million in respect of those under the cooperation agreement with EDF of November 30, 2007 for the construction of the Flamanville nuclear plant. The amount represents Enel’s share of 12.5% of the cost of construction of the plant, which is scheduled to begin operation in 2012.

38. Contingent liabilities and assets Environmental litigation Litigation regarding environmental issues primarily concerns the installation and operation of electrical plant of Enel Distribuzione. Enel Distribuzione is involved in various civil and administrative suits relating to requests, often using urgent procedures, for the precautionary transfer or modification of operations on power lines by some persons living near them on the basis of their alleged potential to cause harm, despite the fact that the company believes that they have been installed in compliance with current regulations. In a number of proceedings claims for damages for physical harm caused by electromagnetic fields have been lodged. The outcome of litigation on these issues is normally favorable to the company. In a decision in February 2008, the Court of Grosseto ruled that compliance with the statutory limits on exposure to electrical and magnetic fields ensure, as supported by the most authoritative studies in the field and evidence arising at the European level, ensures that health will not be jeopardized. There have been sporadic adverse precautionary rulings, which have all been appealed. At present there are no final adverse rulings, and no damages for physical harm have ever been granted, although a ruling in February 2008 (appealed) found that harm had been caused by the “stress” associated with living near power lines and the fear of possible health problems. The next hearing has been scheduled for July 9, 2014. There have also been a number of proceedings concerning electromagnetic fields generated by medium- and low-voltage transformer substations within buildings, in which the equipment, according to the company’s technical staff, has always been in compliance with induction limits set by current regulations. Recent rulings have confirmed that compliance with the applicable regulations is sufficient guarantee of protection from harm. In August 2008, the Court of Cassation (the supreme court of appeal) issued a ruling concerning a 380 kW power line (Forlì-Fano) no longer owned by Enel that, in conflict with current scientific knowledge in this area, accepted the existence of a causal relationship between the headaches suffered by a number of parties and exposure to electromagnetic fields. As discussed in previous reports, the situation concerning litigation has evolved thanks to the clarification of the legislative framework following the entry into force of the framework law on electromagnetic emissions (Law 36 of February 22, 2001) and the related implementing regulations for power lines (Prime Minister’s Order of July 8, 2003). The rules introduced with these measures have harmonized regulation of the field at the national level. Among other issues, we are still awaiting implementation of the program provided for by Law 36/2001 for the upgrading of power lines, with the possibility of recovering, in part or in full, costs incurred by the owners of power lines and substations through

F-230 electricity rates, in accordance with criteria to be set by the Authority for Electricity and Gas, pursuant to Law 481/1995, as they represent costs incurred in the public interest. At present, the Prime Minister has not issued the Order setting the criteria for the upgrading of power lines (Article 4, paragraph 4, of Law 36/2001), which is necessary for distribution companies to submit the associated plans to the regional governments (Article 9, paragraph 2, of Law 36/2001). An Order of the Director General for environmental protection of May 29, 2008, of the Ministry for the Environment approved the procedures for measuring and assessing magnetic induction, pursuant to Article 5, paragraph 2, of the Prime Minister’s Order of July 8, 2003, and another Order issued by the same Ministry on May 29, 2008 approved the calculation methods for determining the distance restrictions for power lines, pursuant to Article 4, paragraph 1(h), of Law 36/2001. A number of urban planning and environmental disputes regarding the construction and operation of certain power plants and distribution lines are also pending. Based on an analysis of individual cases, Enel believes the possibility of adverse rulings is remote. For a limited number of cases, an unfavorable outcome cannot be ruled out completely, however. The consequences of unfavorable judgments could, in addition to the possible payment of damages, also include the costs related to work required to modify electrical equipment and the temporary unavailability of the plant.

Porto Tolle thermal plant — Air pollution — Criminal proceedings against Enel directors and employees — Damages for environmental harm The Court of Adria, in a ruling issued March 31, 2006, convicted former directors and employees of Enel for a number of incidents of air pollution caused by emissions from the Porto Tolle thermoelectric plant. The decision held the defendants and Enel (as a civilly liable party) jointly liable for the payment of damages for harm to multiple parties, both natural persons and local authorities. Damages for a number of mainly private parties were set at the amount of €367,000. The calculation of the amount of damages owed to certain public entities (the Regions of Veneto and Emilia Romagna, the Province of Rovigo and various municipalities) was postponed to a later civil trial, although a “provisional award” of about €2.5 million was immediately due. An appeal was lodged against the ruling of the Court of Adria and on March 12, 2009, the Court of Appeal of Venice partially reversed the lower court decision. It found that the former directors had not committed a crime and that there was no environmental damage and therefore ordered recovery of the provisional award already paid. The prosecutors and the civil claimants lodged an appeal against the ruling with the Court of Cassation. In a ruling on January 11, 2011, the Court of Cassation granted the appeal, overturning the decision of the Venice Court of Appeal, and referred the case to the civil section of the Venice Court of Appeal to rule as regards payment of damages and the division of such damages among the accused. As regards amounts paid to a number of public entities, the Company has already made payment under a settlement agreement reached in 2008. With a suit lodged in July 2011, the Ministry for the Environment and a number of public entities asked the Venice Court of Appeal to order Enel SpA and Enel Produzione to pay civil damages for harm caused by the emissions from the Porto Tolle power station. The amount of damages requested for economic and environmental losses is about €100 million, which Enel has contested. In August 2011, the Public Prosecutor’s Office of Rovigo asked that a number of former directors, officers and employees of Enel and Enel Produzione be remanded for trial on the charge of willful omission to take precautionary actions to prevent a disaster in respect of the alleged emissions from the Porto Tolle plant. At a hearing on November 22, 2011, the case was adjourned further.

F-231 some 120,000 proceedings. Charges in respect of such indemnities could be recovered in part under existing insurance policies. About two thirds of the initial rulings by these judges found in favor of the plaintiffs, while appellate courts have nearly all found in favor of Enel Distribuzione, based upon both the lack of proof of the loss claimed and the recognition that the company was not involved in causing the event. The few adverse rulings against Enel Distribuzione have been appealed to the Court of Cassation, which has consistently ruled in favor of Enel, confirming the position established in orders 17282, 17283 and 17284 of July 23, 2009, which in finding for the appellant found no liability on the part of Enel Distribuzione. In May 2008, Enel served its insurance company (Cattolica) a summons to ascertain its right to reimbursement of amounts paid in settlement of unfavorable rulings. In court, Cattolica involved a number of reinsurance companies in the proceedings, including Enel.re. During testimony, Enel.re found the claim of Enel SpA to be well-founded, while other reinsurers, including Zurigo, challenged the claim. The case will continue before the Court of Rome in the hearing for submission of final pleadings on January 24, 2013. Many black-out rulings are still pending despite the position taken by the Court of Cassation, partly owing to the difficulties faced by the court clerks of a number of courts in publishing rulings that have already been made and partly to substantial work load of the individual offices, which has slowed judges’ decisions As of November 2011, pending cases concerning the blackout had fallen to about 50,000 due to Court decisions as well as abandonment of suits by the plaintiffs or joinder of proceedings, while the flow of new claims has essentially come to a halt in view of the rulings in Enel’s favor by both the courts of appeal and the Court of Cassation.

Finmek/Enel.Factor litigation On April 29, 2009 Enel.Factor was issued a summons to appear before the Court of Padua by Finmek SpA, a company under special administration. The dispute concerns a factoring relationship involving the assignment from Finmek to Enel.Factor of receivables in respect of a contract between Finmek and Enel Distribuzione SpA for the supply of remote-readable digital meters to Enel Distribuzione. The assignments began in 2001 and continued until April 2004, when Finmek SpA entered special administration. With the summons, Finmek asked the court to ascertain the unenforceability of assignments carried out between May 7, 2003 and March 23, 2004 and to revoke or declare inoperative the assignments carried out in that period. Finmek’s overall claim amounts to about $50 million. The next hearing has been scheduled for March 13, 2012, to examine the findings of the official technical expert.

F-232 Developments in the inquiries of the Milan Public Prosecutor’s Office and the State Audit Court into former senior managers In February 2003, the Milan Public Prosecutor’s Office initiated a criminal investigation of former directors and top managers of Enelpower and other individuals for alleged offences to the detriment of Enelpower, including payments made by contractors to receive certain contracts. In January 2008, the investigating magistrate allowed Enel SpA, Enelpower SpA and Enel Produzione SpA to join the case as injured parties. On April 27, 2009, the investigating magistrate announced a plea bargain for a number of the defendants, while the former managing directors of Enel Produzione and Enelpower and the executive of Enelpower were committed for trial before the Court of Milan. After the start of the trial in January 2010, on April 20, 2010 the judge ruled that the trial could not proceed against the former managers for the offences of corruption and embezzlement as the period of limitation had expired. The trial continued against the former managers for the offence of criminal conspiracy, but it too was concluded on September 20, 2011 with a ruling that the period of limitation had run out. Enelpower, Enel Produzione and Enel SpA are taking civil action to recover damages for the harm caused by the conspiracy conducted by the former managers. Following extinguishment of the grounds for seeking damages for pecuniary losses and as a result of the Court of Cassation’ s ruling no. 26806/09 of December 19, 2009 — which ruled that the State Audit Court lacked jurisdiction — Enel, Enelpower and Enel Produzione filed two civil suits with the courts of Monza and Udine seeking tortious damages for the losses caused by the actions of Enel former directors and senior managers being pursued through the State Audit Court and the criminal court. In addition, Enel Produzione and Enelpower have undertaken revocatory actions against the former directors and senior managers, voiding certain transfers of assets. On May 25, 2011, a settlement agreement was signed with the former managing director of Enel Produzione under which Enel is to receive damages, including in the interest of the Group companies involved, totaling €2 million and the waiver by the former managing director of the claim to receive payment of the value of the stock options that was pending before Labor Court in the amount of €4 million. As part of the agreement, the companies of the Enel Group have revoked – solely with respect to the Enel Produzione managing director – their status as injured parties in the criminal proceedings mentioned above and will abandon the revocatory and enforcement actions undertaken against said director. Finally, as regards Enelpower’s participation in the appeal of the ruling on money-laundering charges against the former managing director and senior manager of Enelpower, in a ruling published on November 8, 2011, the criminal law section of the Swiss Federal Supreme Court upheld the ruling of the Federal Criminal Court of Bellinzona ruling that since the injured parties were already seeking the same damages in Italy, they could not seek damages in Switzerland as well. Enelpower is taking steps to appeal that ruling. Again in Switzerland, Enelpower obtained a precautionary seizure order for amounts deposited on the Swiss current accounts of the defendants.

BEG litigation This litigation is being conducted on two fronts, one in Italy, the other in Albania. In Italy, with its ruling of October 20, 2010, the Court of Cassation upheld the decision of the Rome Court of Appeal of April 7, 2009, which rejected BEG’s appeal of the unfavorable arbitration ruling of December 6, 2002. The ruling of the Court of Cassation regarded the complaint filed by BEG SpA before the Rome Arbitration Chamber in November 2000 against Enelpower with regard to alleged breach of a collaboration agreement governed by Italian law concerning the construction of a hydroelectric power station in Albania. BEG asked for damages from Enelpower of about €120 million. The arbitration board ruled that Enelpower was not in breach. In Albania, with a ruling of March 7, 2011, the Albanian Court of Cassation denied the appeal lodged by Enelpower and Enel SpA against the ruling of the Albanian Court of Appeal, which on April 28, 2010 had upheld the decision of the Court of Tirana awarding Albania BEG Ambient (a subsidiary of BEG) tortious damages of about €25 million for 2004 as well as an unspecified amount

F-233 of tortious damages for subsequent years. In a letter of April 26, 2011, Albania BEG Ambient, referring to the above ruling of the Albanian court, requested payment of more than €430 million. Enelpower and Enel SpA replied to the request, on April 28 and 29 respectively, strongly challenging legitimacy of both the foundation of the claim and the amount and filed a request with the Albanian Court of Cassation for the Court of Tirana’s ruling in first instance to be revoked for conflict with the ruling of the Italian Court of Cassation. In a ruling dated June 17, 2011, and announced on July 7, the Albanian Court of Cassation upheld the ruling of the court of first instance. Enel and Enelpower then filed suit against the Republic of Albania with the European Court of Human Rights for violation of the right to a fair trial and the rule of law, asking the Court to order Albania to provide restitutio in integrum and pay damages for financial and non-financial losses incurred by Enel and Enelpower, including amounts that might have to be paid under the ruling of the Albanian Court of Cassation of March 7, 2011. In addition, proceedings continued in Italy in the suit lodged by Enelpower and Enel SpA against BEG SpA with the Court of Rome asking the Court to ascertain the liability of BEG for having evaded compliance with the arbitration ruling issued in Italy in favor of Enelpower on December 6, 2002, having its subsidiary Albam take legal action in Albania against Enelpower and Enel. With this action, Enelpower and Enel are asking the Court to find BEG liable and order it to pay damages to Enelpower (contractual and tortious) and to Enel (tortious) in the amount that one or the other could be required to pay to Albania BEG Ambient in the event of the enforcement of the sentence issued by the Albanian courts. The next hearing is scheduled for March 22, 2012.

Extension of municipal property tax (ICI) Article 1-quinquies of Decree Law 44 of March 31, 2005 containing urgent measures concerning local authorities (added during ratification with Law 88 of May 31, 2005) stated that Article 4 of Royal Decree Law 652 of April 13, 1939 (governing the land registry) shall be interpreted with regard to power plants alone in the sense that the buildings and permanent constructions consist of the land and those parts that are structurally attached to it, even temporarily, which may be joined by any means of connection with movable parts for the purpose of creating a single complex asset. The Regional Tax Commission of Emilia Romagna, in Ordinance no. 16/13/06 (filed on July 13, 2006), referred the case to the Constitutional Court on the issue of the constitutionality of Article 1- quinquies of the Decree Law, finding it relevant and not manifestly unfounded. On May 20, 2008, the Constitutional Court, in judgment no. 162/08, ruled that the issues raised by the RTC of Emilia Romagna had no foundation and, therefore, confirmed the legitimacy of the new interpretation, whose primary effects on the Group are as follows: Š the inclusion of the value of the “turbines” in the land registry valuation of the plants; Š the power for local Land Registry Offices to modify, without a time limit, the imputed property incomes proposed by Enel. The ruling also affirmed that “… the principle that the determination of imputed property income shall include all the elements constituting a plant … even if not physically connected to the land, holds for all of the buildings referred to in Article 10 of Royal Decree Law 652 of 1939” and not only power plants. We also note that to date no valuation criterion has been introduced for the movable assets considered relevant for the determination of land registry values either with regard to the valuation method or the effective identification of the object of the valuation, and the above ruling does not appear to provide any guidance on this issue. Accordingly, with regard to pending litigation, Enel Produzione and Enel Green Power will continue to pursue the case to request a substantial reduction of the values originally assigned by the Land

F-234 Registry Offices to these parts of the plant. They have, however, allocated an adequate amount to the “Provisions for risks and charges” to cover fully the potential charges that would result from an unfavorable outcome, including the information that has emerged from new assessments. At the same time, they do not feel that further provisions are necessary to take into account possible retroactive application of the rule on imputed rent proposals, which to date have not been the subject of comments by the Land Registry Offices and, in any event, primarily concern small plants.

Spain In March 2009, Josel SL sued Endesa Distribución Eléctrica SL to withdraw from the contract for the sale of several buildings due to changes in their zoning status, requesting the restitution of about €85 million plus interest. Endesa Distribución Eléctrica SL opposed the request for withdrawal. On May 9, 2011, the court granted the request to permit withdrawal from the contract and ordered Endesa to repay the amounts paid for the sale plus interest and costs. Endesa has appealed the ruling. On May 19, 2009, the town of Granadilla de Abona fined Endesa €72 million for the construction of the Centrale Generadora de Ciclo Combinato 2 power plant. On July 13, 2009, Endesa lodged an appeal with the administrative courts against the fine. On September 18, 2009, a precautionary suspension of payment of the fine was obtained. Hearing of the case began on September 1, 2010. In a ruling of September 12, 2011, Endesa’s appeal was granted.

Brazil In 2005, the Brazilian tax authorities notified Ampla of an assessment that was subsequently appealed. The tax authorities argued for the non-applicability of the tax exemption for interest received by subscribers of fixed-rate notes issued by Ampla in 1998. On December 6, 2007, Ampla was successful in the second level of the administrative appeals, but the Brazilian authorities appealed the ruling to the Superior Council for Tax Appeals. The amount involved in the dispute is about €325 million. In 2002 the State of Rio de Janeiro ruled that the ICMS (Impuesto a la Circulación de Mercaderías y Servicios) should be calculated and paid on the 10th, 20th and 30th of the same month in which the tax accrues. Nevertheless, Ampla continued to pay the tax in compliance with the previous system (up to the 5th day of the subsequent month). Despite an informal agreement with the State of Rio de Janeiro and two tax amnesties, in October 2004 Ampla was fined for late payment of the ICMS, which the company appealed. The ruling at first instance was in favor of the State of Rio de Janeiro and Ampla appealed but the appeal was denied on August 26, 2010. Ampla then filed a further appeal with the “Consejo Pleno de Contribuyentes” of the State of Rio de Janeiro, which is still pending. The amount involved in the dispute is about €68 million. The Brazilian construction company Meridional held a contract for civil works with the Brazilian company CELF (owned by the State of Rio de Janeiro), which withdrew from the contract. As a consequence of the transfer of assets from CELF to Ampla Energia e Serviços, the Brazilian construction company complained that the transfer had infringed its creditor rights in respect of CELF (deriving from the contract for civil works) and, in 1998, filed suit against Ampla. In March 2009, the Brazilian court granted the complaint and Ampla and the State of Rio de Janeiro appealed the decision. In December 2009 the appeals court granted the appeals. The Brazilian construction company appealed that decision to the Court of Cassation, which declined to grant the petition. The construction company then lodged a new appeal (“de Agravo Regimental”) with the Superior Tribunal de Justiça do Brasil, which was rejected at the end of August 2010 for lack of grounds. Following that decision, the company requested a “mandado de segurança”to obtain a ruling establishing the alleged right of the construction company to recover its claim. The request for the “mandado de segurança” was denied in June 2011. Meridional nevertheless lodged a new appeal with the Superior Tribunal de Justiça in Brasilia. The amount involved in the dispute is about €317 million.

F-235 In 1998 CIEN signed an agreement with Tractebel for the delivery of electricity from Argentina through its Argentina-Brazil interconnection line. As a result of Argentine regulatory changes introduced as a consequence of the economic crisis in 2002, CIEN was unable to make the electricity available to Tractebel. In October 2009, Tractebel sued CIEN, which submitted its defense. CIEN cited force majeure as a result of the Argentine crisis as the main argument in its defense. As part of the dispute, Tractebel has expressed its intention to acquire 30% of the transmission line involved. The case is continuing. For analogous reasons in June 2010 the company Furnas also filed suit against CIEN for failure to deliver electricity, requesting payment of about €235 million in addition to unspecified damages. CIEN’s defense is similar to the earlier case. The evidentiary stage of the trial has been completed and the ruling at first instance is pending.

39. Subsequent events Disposal of investment in Terna On February 2, 2012, Enel completed the disposal, launched late the previous afternoon, of 102,384,037 ordinary shares (equal to 5.1% of share capital) of Terna SpA. The proceeds of the sale totaled €281 million and will generate a consolidated capital gain of €178 million for Enel, net of incidental expenses. The amount sold represented the entire interest held by Enel in Terna, whose shares are traded on the Mercato Telematico Azionario (MTA) operated by Borsa Italiana SpA. The transaction, which was carried out through an accelerated bookbuilding with Italian and international institutional investors, was priced at €2.74 per share. The transaction was settled with the delivery of shares and payment of the price on February 7, 2012. Enel engaged Banca IMI, JP Morgan, Mediobanca and Unicredit as joint bookrunners to carry out the transaction.

Purchase of mineral interest in Algeria On February 3, 2012, following ratification by the Algerian authorities, the contract for the purchase of 18.375% of a mineral interest in respect of the Isarene exploration permit from the Irish company Petroceltic International took full effect, and Enel Trade paid Petroceltic an initial price of about $100 million.

Bond issue for Italian retail investors On February 13, 2012, Enel’s public offering of fixed and floating-rate bonds for retail investors was closed. During the offer period, Enel increased the nominal value of the offering from the initial amount of €1.5 billion to the maximum of €3 billion, while demand amounted to more than €5 billion. The total amount issued came to €2.5 billion for the fixed-rate bonds and €500 million for the floating-rate bonds. The fixed-rate bonds (maturing February 20, 2018) will pay a nominal annual gross interest rate equal to 4.875% and were issued at a price equal to 99.95% of their nominal value. Accrued interest will be paid to investors annually in arrears. The floating-rate bonds (maturing February 20, 2018) will pay interest to investors semi-annually in arrears. The nominal annual floating rate will be calculated as the sum of 6-month Euribor and a spread of 310 basis points. The floating-rate bonds were issued at a price equal to 100% of their nominal value.

Partnership between Enel Distribuzione and General Electric On February 27, 2012, General Electric, one of the largest and most diversified companies in the world, and Enel Distribuzione, the company that manages over 85% of Italy’s distribution network,

F-236 reached a strategic partnership agreement, lasting until December 31, 2014, to develop projects for energy efficiency and cutting CO2 emissions throughout Italy. The integrated approach to the projects, the synergies between the technical and financial expertise of the General Electric group, combined with Enel Distribuzione’s experience with the white certificate mechanism, will make it possible to carry out complex projects to customer specifications in an operationally effective manner. The two companies will soon begin carrying out the first large-scale projects to develop solutions that are technologically, operationally and financially innovative, taking advantage of the opportunities presented by recent regulatory changes designed to encourage energy efficiency in Italy and involving a variety of partners from throughout Italy specializing in certain technologies or target customers.

Enel rating revised by Standard & Poor’s On March 8, 2012, the rating agency Standard & Poor’s announced that it had lowered its long-term rating for Enel SpA to “BBB+” (from “A-”). The agency also announced that it had confirmed its short-term rating of “A-2” for Enel. Following the removal of the negative creditwatch, the outlook was rated as stable. The change in the Enel rating mainly reflects the deterioration in the macroeconomic situation in Italian and Spanish markets and the higher volatility of margins in the power generation sector. The downgrade was accompanied by an analogous revision of the stand-alone rating of the Company and follows Standard & Poor’s downgrade of its rating of the Italian sovereign debt. Finally, the agency noted that the measures the Company is taking to counter the impact of the economic crisis will help improve the financial risk profile of the Enel Group despite the weakness of the economic outlook that Standard & Poor’s has projected for the Italian and Spanish markets.

2008 stock option plan The 2008 plan provides for the grant of personal, non-transferable inter vivos options to subscribe a corresponding number of newly issued ordinary Enel shares to senior managers selected by the Board of Directors. The main features of the 2008 plan are discussed below.

F-237 The beneficiaries have been divided into two brackets (the first includes only the CEO of Enel in his capacity as General Manager) and the basic number of options granted to each has been determined on the basis of their gross annual compensation and the strategic importance of their positions, as well as the price of Enel shares at the start of the period covered by the plan (January 2, 2008).

F-238 The following table reports developments in the 2008 stock option plan: Options Options Options Verification exercised lapsed Options outstanding Number of Strike of plan at Dec. 31, at Dec. 31, lapsed at Dec. 31, Total options granted beneficiaries price conditions 2010 2010 in 2011 2011 8,019,779(1) ...... 16Group Rights executives €8.075(2) vested None None None 9,623,735

F-239 The following table summarizes developments over the course of 2009, 2010 and 2011 in the Enel stock option plans, detailing the main assumptions used in calculating their fair value.

Developments in stock option plans Number of options 2008 plan Options granted at December 31, 2009 ...... 8,019,779(1) Options exercised at December 31, 2009 ...... — Options lapsed at December 31, 2009 ...... — Options outstanding at December 31, 2009 ...... 8,019,779(1) Options lapsed in 2010 ...... — Options outstanding at December 31, 2010 ...... 8,019,779(1) Options lapsed in 2011 Options outstanding at December 31, 2011 ...... 9,623,735(2) Fairvalueatgrantdate(euro) ...... 0.17 Volatility ...... 21% Optionexpiry...... December 2014

(1) If the degree of achievement of the two operational objectives (EPS and ROACE) set for the 2008 plan should reach the highest level of the performance scale, a maximum of 9,623,735 options would vest. (2) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 9,623,735 options have vested (120% of the 8,019,779 options originally granted).

F-240 2008-2009, calculated on the basis of the amounts specified in the budgets for those years; and (ii) for the remaining 50% of the basic number of units granted, Group EBITDA for 2008-2010, calculated on the basis of the amounts specified in the budgets for those years. If the hurdle target is achieved, the actual number of units that can be exercised by each beneficiary is determined on the basis of a performance objective represented by: Š for the first 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2009 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and that of a specific benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced with the FTSE Italia All Share index after an analogous substitution by Borsa Italiana in 2009 — and the Bloomberg World Electric Index (weight: 50%); and Š for the remaining 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2010 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and the benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced in 2009 with the FTSE Italia All Share index as indicated above — and the Bloomberg World Electric Index (weight: 50%). The number that can be exercised may vary up or down with respect to the basic unit grant by a percentage amount of between 0% and 120% as determined on the basis of a specific performance scale. If the hurdle target is not achieved in the first two-year period, the first tranche of 50% of the units granted may be recovered if the same hurdle target is achieved over the longer three-year period indicated above. It is also possible to extend the validity of the performance level registered in the 2008-2010 period to the 2008-2009 period, where performance was higher in the longer period, with the consequent recovery of units that did not actually vest in the first two-year period because of the lower performance level and on the condition that the first 50% of the basic unit grant has not yet been exercised.

F-241 In view of the fact that the level of achievement of the performance targets over the 2008-2010 period was higher than that achieved in 2008-2009, it is therefore possible to recover the units that did not vest in 2008-2009 as a result of the lower level of achievement of the performance targets for beneficiaries who had not yet exercised the first 50% of the basic units granted before achievement of the targets for 2008-2010 had been ascertained. The following table reports developments in the 2008 restricted share units plan. Number of RSU 2008 plan RSU outstanding at December 31, 2009 (equal to 100% of the base number of unlapsed RSU) ...... 1,755,325 of which vested at December 31, 2009 ...... 887,662 RSU lapsed in 2010 ...... 9,648 RSU exercised in 2010 ...... 472,588 New RSU granted and vested under the “recovery clause” (applicable to first 50% of base number of RSU) ...... 77,950 New RSU granted and vested in respect of the remaining 50% ofthebasenumberofRSU...... 176,667 RSU outstanding at December 31, 2010 ...... 1,527,706 of which vested at December 31, 2010 ...... 1,527,706 RSU lapsed in 2011 ...... 10,500 RSU exercised in 2011 ...... 1,159,460 RSU outstanding at December 31, 2011 ...... 357,746 of which vested at December 31, 2011 ...... 357,746 Fairvalueatthegrantdate(euro)...... 3.16 Fair value at December 31, 2011 (euro) ...... 3.70 Expiry of the restricted share units ...... December 2014

F-242 CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2010

F-243 KPMG S.p.A. Telefono +39 06 809611 Revisione e organizzazione contabile Telefax +39 06 8077475 Via Ettore Petrolini, 2 e-mail [email protected] 00197 ROMA RM Report of the auditors

To the shareholders of Enel S.p.A. 1 We have audited the consolidated financial statements of the Enel Group as at and for the year ended 31 December 2010, comprising the income statement, statement of comprehensive income, balance sheet, statement of changes in shareholders’ equity, statement of cash flows and notes thereto. The parent’s directors are responsible for the preparation of these financial statements in accordance with the International Financial Reporting Standards endorsed by the European Union and the Italian regulations implementing article 9 of Legislative decree no. 38/05. Our responsibility is to express an opinion on these financial statements based on our audit. 2 We conducted our audit in accordance with the auditing standards recommended by Consob, the Italian Commission for Listed Companies and the Stock Exchange. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and are, as a whole, reliable. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by directors. We believe that our audit provides a reasonable basis for our opinion. The consolidated financial statements present the prior year corresponding figures and the statement of financial position as at 1 January 2009 for comparative purposes. As disclosed in the notes, the parent’s directors restated some of the corresponding figures included in the prior year consolidated financial statements and statement of financial position as at 1 January 2009, which derives from the consolidated financial statements at 31 December 2008, We audited the 2009 and 2008 consolidated financial statements and issued our reports thereon on 9 April 2010 and 10 April 2009, respectively. We have examined the methods used to restate the corresponding figures and related disclosures for the purposes of expressing an opinion on the consolidated financial statements at 31 December 2010.

Società per azioni Capitale sociale Ancona Aosta Bari Bergamo Euro 7.625 700,00 i.v. Bologna Bolzano Brescia Registro Imprese Milano e Cagliari Catania Como Firenze Codice Fiscale N. 00709600159 KPMG S.p.A. é una societa per azioni di diritto Genova Lecce Milano Napoli R.E.A. Milano N. 512867 italiano e fa parte del network KPMG di entita Novara Padova Palermo Parma Partita IVA 00709600159 indipendenti affiliate a KPMG International Perugia Pescara Roma Torino VAT number IT00709600159 Cooperative (“KPMG International”), entità di Tresviso Trieste Udine Varese Sede legale: Via Vittor Pisani, 25 diritto svizzero. Verona 20124 Milano MI ITAIA

F-244 Enel Group Report of the auditors 31 December 2010

3 In our opinion, the consolidated financial statements of the Enel Group as at and for the year ended 31 December 2010 comply with the International Financial Reporting Standards endorsed by the European Union and the Italian regulations implementing article 9 of Legislative decree no. 38/05. Therefore, they are clearly stated and give a true and fair view of the financial position of the Enel Group as at 31 December 2010, the results of its operations and its cash flows for the year then ended.

Rome, 6 April 2011

F-245 Consolidated Income Statement Notes 2010 2009 restated of which of which with related with related parties parties Millions of euro Revenues Revenuesfromsalesandservices ...... 8.a 71,943 7,740 62,498 8,481 Otherrevenues...... 8.b 1,434 5 1,864 374 [Subtotal] ...... 73,377 7,745 64,362 8,855 Costs Rawmaterialsandconsumables...... 9.a 36,457 10,985 32,638 13,757 Services...... 9.b 13,628 1,928 10,004 625 Personnel ...... 9.c 4,907 4,908 Depreciation, amortization and impairment losses ...... 9.d 6,222 8 5,339 Otheroperatingexpenses...... 9.e 2,950 3 2,298 263 Capitalizedcosts ...... 9.f (1,765) (1,593) [Subtotal] ...... 62,399 12,924 53,594 14,645 Net income/(charges) from commodity risk management ...... 10 280 8 264 (25) Operating income ...... 11,258 11,032 Financialincome...... 11 2,576 21 3,593 17 Financialexpense ...... 11 5,774 5,334 Share of income/(expense) from equity investments accounted for using the equity method...... 12 14 54 Income before taxes ...... 8,074 9,345 Incometaxes...... 13 2,401 2,597 Net income from continuing operations ...... 5,673 6,748 Net income from discontinued operations(1) ... 14 — (158) Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 5,673 6,590 Attributable to non-controlling interests ...... 1,283 1,004 Attributable to shareholders of the Parent Company...... 4,390 5,586 Earnings per share (euro) ...... 0.47 0.59 Diluted earnings per share (euro)(2) ...... 0.47 0.59 Earnings from continuing operations per share ...... 0.47 0.61 Diluted earnings from continuing operations per share(2) ...... 0.47 0.61 Earnings from discontinued operations per share ...... — (0.02) Diluted earnings from discontinued operations per share(2) ...... — (0.02)

(1) The result for discontinued operations for 2009 is entirely attributable to the Group. (2) Calculated on the basis of the average number of ordinary shares in the year, taking account of the dividend accrual date for the shares issued following the capital increase completed on July 9, 2009 (9,403,357,795 shares) adjusted for the diluting effect of outstanding stock options (zero in both years).

F-246 Statement of Consolidated Comprehensive Income

Notes 2010 2009 restated Millions of euro Net income for the period ...... 5,673 6,590 Other components of comprehensive income: – Effective portion of change in the fair value of cash flow hedges(1) . . . 307 (882) – Income recognized in equity by companies accounted for using the equitymethod ...... 16 8 – Change in the fair value of financial investments available for sale . . 384 198 – Exchange rate differences (2) ...... 2,323 1,288 – Net income from sale of equity holdings without loss of control ..... 796 — Income/(Loss) recognized directly in equity ...... 28 3,826 612 Comprehensive income for the period ...... 9,499 7,202 Attributable to: –shareholdersoftheParentCompany...... 6,941 5,376 – non-controlling interests ...... 2,558 1,826

(1) Of which charges of €6 million regarding units classified as “Held for sale” in 2010 (zero in 2009). (2) Of which exchange rate gains of €2 million regarding units classified as “Held for sale” in 2010 (zero in 2009).

F-247 Consolidated Balance Sheet

at Jan. 1, 2009 Notes at Dec. 31, 2010 at Dec. 31, 2009 restated restated

of which of which of which with related with related with related parties parties parties

Millions of euro ASSETS Non-current assets Property, plant and equipment...... 15 78,094 76,587 60,005 Investmentproperty...... 299 295 462 Intangibleassets...... 16 39,071 38,720 27,151 Deferredtaxassets...... 17 6,017 6,238 5,881 Equity investments accounted for using the equity method ...... 18 1,033 1,029 397 Non-current financial assets...... 19 4,701 9,024 4,355 Other non-current assets ..... 20 1,062 976 1,937 [Total] ...... 130,277 132,869 100,188 Current assets Inventories...... 21 2,803 2,500 2,182 Trade receivables ...... 22 12,505 1,065 13,010 1,491 12,378 2,045 Tax receivables ...... 23 1,587 1,534 1,239 Currentfinancialassets...... 24 11,922 69 4,186 3,255 Cash and cash equivalents . . . 25 5,164 4,170 5,106 Othercurrentassets ...... 26 2,176 79 3,490 19 3,478 [Total] ...... 36,157 28,890 27,638 Assets held for sale ...... 27 1,618 572 5,251 TOTAL ASSETS ...... 168,052 162,331 133,077

F-248 at Jan. 1, 2009 Notes at Dec. 31, 2010 at Dec. 31, 2009 restated restated

of which of which of which with related with related with related parties parties parties

Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company ...... 28 Sharecapital ...... 9,403 9,403 6,186 Otherreserves...... 10,791 7,810 3,329 Retained earnings (losses carriedforward) ...... 14,217 11,409 6,821 Net income for the period(1) ...... 3,450 4,646 4,056 [Total] ...... 37,861 33,268 20,392 Equity attributable to non- controlling interests ...... 15,684 12,665 5,897 Total shareholders’ equity ...... 53,545 45,933 26,289 Non-current liabilities Long-term loans ...... 29 52,440 55,850 51,045 Post-employment and other employeebenefits...... 30 3,069 3,110 2,910 Provisions for risks and charges ...... 31 9,026 8,846 6,922 Deferred tax liabilities ...... 17 11,147 11,107 6,880 Non-current financial liabilities ...... 32 2,591 2,964 3,113 Other non-current liabilities ...... 33 1,244 1,259 3,307 [Total] ...... 79,517 83,136 74,177 Current liabilities Short-termloans...... 34 8,209 7,542 5,467 Current portion of long-term loans ...... 29 2,999 2,909 3,110 Tradepayables ...... 35 12,373 2,777 11,174 2,841 10,600 3,765 Incometaxpayable...... 687 1,482 1,991 Current financial liabilities . . . 36 1,672 1,784 2,454 Other current liabilities ...... 37 8,052 13 8,147 15 7,198 8 [Total] ...... 33,992 33,038 30,820 Liabilities held for sale ..... 38 998 224 1,791 Total liabilities ...... 114,507 116,398 106,788 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 168,052 162,331 133,077

(1) Net income is reported net of the interim dividend (€940 million in both years).

F-249 Statement of Changes in Consolidated Shareholders’ Equity

Share capital and reserves attributable to the shareholders of the Parent Company

Reserve from Reserve Equity Translation sale of from equity attributable of financial Reserve equity investments to the statements in from holdings accounted Net shareholders Equity Share Other currencies measurement without for using income of the attributable to Total Share premium Legal Other retained other than of financial loss of the equity for the Parent non-controlling shareholders’ capital reserve reserve reserves earnings euro instruments control method period Company interests equity

at January 1, 2009 ...... 6,186 662 1,453 2,255 6,827 (1,247) 206 — — 4,056 20,398 5,897 26,295 Effect of application of new accounting standards...... — — — — (6) — — — — — (6) — (6) at January 1, 2009 restated ...... 6,186 662 1,453 2,255 6,821 (1,247) 206 — — 4,056 20,392 5,897 26,289 Charge for stock options plans for the period...... — — — 5 — — — — — — 5—5 Dividends and interim dividends(1) ...... — — — — (1,794) — — — — (940) (2,734) (443) (3,177) Allocation of net income from the previous year ...... — — — — 4,056 — — — — (4,056) ——— Capitalincreases...... 3,217 4,630 — — — — — — — — 7,847 3 7,850 F-250 Changeinscopeofconsolidation ...... — — — — — 70 (14) — — — 56 5,382 5,438 Effect of business combinations achieved in stages...... — — — — 2,326 — — — — 2,326 — 2,326 Comprehensiveincomefortheperiod ..... — — — — — 556 (774) — 8 5,586 5,376 1,826 7,202 of which: Income/(Loss) recognized directly in equity ...... — — — — — 556 (774) — 8 — (210) 822 612 Net income/(loss) for the period ...... — — — — — — — — — 5,586 5,586 1,004 6,590 at December 31, 2009 restated ...... 9,403 5,292 1,453 2,260 11,409 (621) (582) — 8 4,646 33,268 12,665 45,933 Charge for stock options plans for the period...... — — — 2 — — — — — — 2—2 Dividends and interim dividends (2) ...... — — — — (1,410) — — — — (940) (2,350) (798) (3,148) Allocation of net income from the previous year ...... — — 428 — 4,218 — — — — (4,646) ——— Changeinscopeofconsolidation ...... — — — — — — — — — — — 1,259 1,259 Comprehensiveincomefortheperiod ..... — — — — — 1,077 662 796 16 4,390 6,941 2,558 9,499 of which: – Income/(Loss) recognized directly in equity(3) ...... — — — — — 1,077 662 796 16 — 2,551 1,275 3,826 – Net income/(loss) for the period ...... — — — — — — — — — 4,390 4,390 1,283 5,673 at December 31, 2010 ...... 9,403 5,292 1,881 2,262 14,217 456 80 796 24 3,450 37,861 15,684 53,545

(1) Authorized by the Board of Directors on October 1, 2009, with ex dividend date of November 23, 2009 and payment as from November 26, 2009. (2) Authorized by the Board of Directors on September 29, 2010, with the ex dividend date set at November 22, 2010 and payment as from November 25, 2010. (3) Of which net charges of €4 million regarding units classified as “Held for sale” in 2010 (zero in 2009). Consolidated Statement of Cash Flows

Notes 2010 2009 restated

of which of which with related with related parties parties

Millions of euro Income for the period ...... 5,673 6,590 Adjustments for: Amortizationandimpairmentlossesofintangibleassets ...... 999 556 Depreciationandimpairmentlossesofproperty,plantandequipment...... 4,511 4,295 Exchangerategainsandlosses(includingcashandcashequivalents)...... 509 (18) Accrualstoprovisions...... 1,812 1,916 Financial(income)/expense...... 2,319 2,067 Incometaxes...... 2,401 2,571 (Gains)/Losses and other non-monetary items ...... 476 (529) Cash flow from operating activities before changes in net current assets ..... 18,700 17,448 Increase/(Decrease)inprovisions...... (1,705) (1,382) (Increase)/Decreaseininventories ...... (331) 66 (Increase)/Decreaseintradereceivables...... (286) 426 80 518 (Increase)/Decrease in financial and non-financial assets/liabilities ...... 190 (131) 441 (75) Increase/(Decrease)intradepayables ...... 1,256 (64) (1,099) (225) Interestincomeandotherfinancialincomecollected...... 1,282 21 1,050 16 Interestexpenseandotherfinancialexpensepaid...... (4,106) (3,926) Incometaxespaid...... (3,275) (3,752) Cash flows from operating activities (a) ...... 11,725 8,926 – of which discontinued operations ...... — (210) Investmentsinproperty,plantandequipment ...... (6,468) (6,591) Investmentsinintangibleassets ...... (719) (409) Investments in entities (or business units) less cash and cash equivalents acquired ...... (282) (9,548) Disposals of entities (or business units) less cash and cash equivalents sold . . 2,610 3,712 (Increase)/Decrease in other investing activities ...... (51) 160 Cash flows from investing/disinvesting activities (b) ...... (4,910) (12,676) – of which discontinued operations ...... — (60) Financial debt (new long-term borrowing) ...... 29 5,497 21,990 Financialdebt(repaymentsandotherchanges)...... (10,748) (24,180) Collection of proceeds from sale of equity holdings without loss of control . . . 2,422 — Dividendsandinterimdividendspaid ...... (3,147) (3,135) Increaseinsharecapitalandreservesduetotheexerciseofstockoptions.... 28 — 7,991 Capital increases paid by non-controlling interests ...... 28 — 3 Cash flows from financing activities (c) ...... (5,976) 2,669 – of which discontinued operations ...... — 273 Impact of exchange rate fluctuations on cash and cash equivalents (d) .... 214 159 Increase/(Decrease) in cash and cash equivalents (a+b+c+d) ...... 1,053 (922) – of which discontinued operations ...... —3 Cashandcashequivalentsatthebeginningoftheyear...... 4,289 5,211 – of which discontinued operations ...... —— Cash and cash equivalents at the end of the year(1)(2) ...... 5,342 4,289 – of which discontinued operations ...... ——

(1) Of which short-term securities equal to €95 million at December 31, 2010 (€97 million at December 31, 2009). (2) Of which cash and cash equivalents pertaining to assets held for sale in the amount of €83 million at December 31, 2010 (€22 million at December 31, 2009).

F-251 Notes to the financial statements

1. Form and content of the financial statements Enel SpA, which operates in the energy utility sector, has its registered office in Rome, Italy. The consolidated financial statements for the period ended December 31, 2010 comprises the financial statements of the Company, its subsidiaries and joint ventures (“the Group”) and the Group’s holdings in associated companies. A list of the subsidiaries, associated companies and joint ventures included in the scope of consolidation is reported in the annex. These financial statements were approved for publication by the Board on March 14, 2011.

Compliance with IFRS/IAS The consolidated financial statements for the year ended December 31, 2010 have been prepared in accordance with international accounting standards (International Accounting Standards – IAS and International Financial Reporting Standards — IFRS) issued by the International Accounting Standards Board (IASB), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC), recognized in the European Community pursuant to Regulation (EC) no. 1606/2002 and in effect as of the close of the year. All of these standards and interpretations are hereinafter referred to as the “IFRS-EU”. The financial statements have also been prepared in conformity with measures issued in implementation of Article 9, paragraph 3, of Legislative Decree 38 of February 28, 2005.

Basis of presentation The consolidated financial statements consist of the consolidated income statement, the statement of consolidated comprehensive income, the consolidated balance sheet, the statement of changes in consolidated equity and the consolidated statement of cash flows and the related notes. The assets and liabilities reported in the consolidated balance sheet are classified on a “current/non- current basis”, with separate reporting of assets and liabilities held for sale. Current assets, which include cash and cash equivalents, are assets that are intended to be realized, sold or consumed during the normal operating cycle of the company or in the twelve months following the balance- sheet date; current liabilities are liabilities that are expected to be settled during the normal operating cycle of the company or within the twelve months following the close of the financial year. The consolidated income statement is classified on the basis of the nature of costs, while the indirect method is used for the cash flow statement. The consolidated financial statements are presented in euro, the functional currency of the Parent Company Enel SpA. All figures are shown in millions of euro unless stated otherwise. The financial statements are prepared on a going-concern basis using the cost method, with the exception of items that are measured at fair value under IFRS-EU, as specified in the measurement policies for the individual items.

2. Accounting policies and measurement criteria Use of estimates Preparing the consolidated financial statements under IFRS-EU requires the use of estimates and assumptions that impact the carrying amount of assets and liabilities and the related information on the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and the related assumptions are based on previous experience and other factors considered reasonable in the circumstances. They are formulated when the carrying amount of assets and liabilities is not easily determined from other sources. The actual results may therefore differ from these estimates. The estimates and assumptions are periodically revised and the effects of any

F-252 changes are reflected in the consolidated income statement if they only involve that period. If the revision involves both the current and future periods, the change is recognized in the period in which the revision is made and in the related future periods. A number of accounting policies are felt to be especially important for understanding the financial statements. To this end, the following section examines the main items affected by the use of estimates, as well as the main assumptions used by management in measuring these items in compliance with the IFRS-EU. The critical element of such estimates is the use of assumptions and professional judgments concerning issues that are by their very nature uncertain. Changes in the conditions underlying the assumptions and judgments could have a substantial impact on future results.

Revenue recognition Revenues from sales to customers are recognized on an accruals basis. Revenues from sales of electricity and gas to retail customers are recognized at the time the electricity or gas is supplied and include, in addition to amounts invoiced on the basis of periodic (and pertaining to the year) meter readings, an estimate of the value of electricity and gas distributed during the period but not yet invoiced, equal to the difference between the amount of electricity and gas delivered to the distribution network and that invoiced in the period, taking account of any network losses. Revenues between the date of the meter reading and the end of the year are based on estimates of the daily consumption of individual customers calculated on the basis of their consumption record, adjusted to take account of weather conditions and other factors that may affect estimated consumption.

Pensions and other post-employment benefits Part of the Group’s employees participate in pension plans offering benefits based on their wage history and years of service. Certain employees are also eligible for other post-employment benefit schemes. The expenses and liabilities of such plans are calculated on the basis of estimates carried out by consulting actuaries, who use a combination of statistical and actuarial elements in their calculations, including statistical data on past years and forecasts of future costs. Other components of the estimation that are considered include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of wage increases, the inflation rate and trends in the cost of medical care. These estimates can differ significantly from actual developments owing to changes in economic and market conditions, increases or decreases in withdrawal rates and the lifespan of participants, as well as changes in the effective cost of medical care. Such differences can have a substantial impact on the quantification of pension costs and other related expenses.

Recoverability of non-current assets The carrying amount of non-current assets and assets held for sale is reviewed periodically and wherever circumstances or events suggest that more frequent review is necessary. Where the value of a group of non-current assets is considered to be impaired, it is written down to its recoverable value, as estimated on the basis of the use of the assets and their future disposal, in accordance with the company’s most recent plans.

F-253 The estimates of such recoverable values are considered reasonable. Nevertheless, possible changes in the estimation factors on which the calculation of such values is performed could generate different recoverable values. The analysis of each group of non-current assets is unique and requires management to use estimates and assumptions considered prudent and reasonable in the specific circumstances.

Recovery of deferred tax assets At December 31, 2010, the financial statements report deferred tax assets in respect of tax losses to be reversed in subsequent years and income components whose deductibility is deferred in an amount whose recovery is considered by management to be highly probable. The recoverability of such assets is subject to the achievement of future profits sufficient to absorb such tax losses and to use the benefits of the other deferred tax assets. The assessment of recoverability takes account of the estimate of future taxable incomes and is based on prudent tax planning strategies. However, where the Group should become aware that it would be unable to recover all or part of such recognized tax assets in future years, the consequent adjustment would be taken to the income statement in the year in which this circumstance arises.

Provision for doubtful accounts The provision for doubtful accounts reflects estimates of losses on the Group’s receivables portfolio. Provisions have been made against expected losses calculated on the basis of historical experience with receivables with similar credit risk profiles, current and historical arrears, eliminations and collections, as well as the careful monitoring of the quality of the receivables portfolio and current and forecast conditions in the economy and the relevant markets. Although the provision recognized is considered appropriate, the use of different assumptions or changes in economic conditions could lead to changes in the provision and therefore impact net income. The estimates and assumptions are reviewed periodically and the effects of any changes are taken to the income statement in the year they accrue.

F-254 That liability is quantified by management on the basis of the technology existing at the measurement date and is reviewed each year, taking account of developments in decommissioning and site restoration technology, as well as the ongoing evolution of the legislative framework concerning the protection of health and the environment. Subsequently, the value of the obligation is adjusted to reflect the passage of time and any changes in estimates.

Related parties Related parties are mainly parties that have the same parent company with Enel SpA, companies that directly or indirectly through one or more intermediaries control, are controlled or are subject to the joint control of Enel SpA and in which the latter has a holding that enables it to exercise a significant influence. Related parties also include the Fopen and Fondenel pension funds, the Board of Auditors of Enel SpA, the management with strategic responsibilities, and their close relatives, of Enel SpA and the companies over which it exercises direct, indirect or joint control and over which it exercises a significant influence. The management with strategic responsibilities are those persons who have the power and direct or indirect responsibility for the planning, management and control of the activities of the company. They include company directors.

Special purpose entities The Group consolidates a special purpose entity (SPE) when it exercises de facto control over such entity. Control is achieved if in substance the Group obtains the majority of the benefits produced by the SPE and supports the majority of the remaining risks or risks of ownership of the SPE, even if it does not own an equity interest in such entity.

F-255 These investments are initially recognized at cost and are subsequently measured using the equity method, allocating any difference between the cost of the equity investment and the share in the net fair value of the assets, liabilities and identifiable contingent liabilities of the associated company in an analogous manner to the treatment of business combinations. The Group’s share of profit or loss is recognized in the consolidated financial statements from the date on which it acquires the significant influence over the entity until such influence ceases. Should the Group’s share of the loss for the period exceed the carrying amount of the equity investment, the latter is impaired and any excess recognized in a provision if the Group has a commitment to meet legal or constructive obligations of the associate or in any case to cover its losses. Where an interest is divested and as a result the Group no longer exercises a significant influence, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date shall be recognized through profit or loss.

Joint ventures Interests in joint ventures — enterprises over whose economic activities the Group exercises joint control with other entities — are consolidated using the proportionate method. The Group recognizes its share of the assets, liabilities, revenues and expenses on a line-by-line basis in proportion to the Group’s share in the entity from the date on which joint control is acquired until such control ceases. The following table reports the contribution of the main joint ventures to the aggregates in the consolidated financial statements: at December 31, 2010 Enel Unión Fenosa Renovables RusEnergoSbyt Nuclenor Atacama Tejo Millions of euro Percentageconsolidation...... 50.0% 49.5% 50.0% 50.0% 38.9% Non-current assets ...... 437 59 81 298 214 Current assets ...... 57 47 61 120 58 Assets held for sale ...... 355 — — — — Non-current liabilities ...... 34 3 62 18 179 Current liabilities ...... 323 37 19 162 28 Liabilities held for sale ...... 328 — — — — Revenues...... 103 1,098 72 341 63 Costs ...... 70 1,009 81 284 53 Where an interest is divested and as a result the Group no longer exercises joint control, any capital gain (or loss) on the sale and the effects of the remeasurement to fair value of the residual interest as at the sale date shall be recognized through profit or loss.

Consolidation procedures The financial statements of subsidiaries used to prepare the consolidated financial statements were prepared at December 31, 2010 in accordance with the accounting policies adopted by the Parent Company. All intercompany balances and transactions, including any unrealized profits or losses on transactions within the Group, are eliminated, net of the theoretical tax effect. Unrealized profits and losses with associates and joint ventures are eliminated for the part attributable to the Group. In both cases, unrealized losses are eliminated except when representative of impairment.

F-256 Translation of foreign currency items Transactions in currencies other than the functional currency are recognized in these financial statements at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in a foreign currency other than the functional currency are later adjusted using the balance sheet exchange rate. Non-monetary assets and liabilities in foreign currency stated at historic cost are translated using the exchange rate prevailing on the date of initial recognition of the transaction. Non-monetary assets and liabilities in foreign currency stated at fair value are translated using the exchange rate prevailing on the date of that value was determined. Any exchange rate differences are recognized through the income statement.

Translation of financial statements denominated in a foreign currency For the purposes of the consolidated financial statements, all profits/losses, assets and liabilities are stated in euro, which is the functional currency of the Parent Company, Enel SpA. In order to prepare the consolidated financial statements, the financial statements of consolidated companies in functional currencies other than the currency of the Parent Company are translated into euro by applying the relevant period-end exchange rate to the assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the period, which approximates the exchange rates prevailing at the date of the respective transactions, to the income statement items. Any resulting exchange rate gains or losses are recognized as a separate component of equity in a special reserve. The gains and losses are recognized in the income statement on the disposal of the subsidiary.

F-257 Business combinations carried out as from January 1, 2010 are recognized on the basis of IFRS 3 (2008). More specifically, business combinations are recognized using the acquisition method, where the purchase cost is equal to the fair value at the date of the exchange of the assets acquired and the liabilities incurred or assumed, as well as any equity instruments issued by the purchaser. Costs directly attributable to the acquisition are recognized through profit or loss. This cost is allocated by recognizing the assets, liabilities and identifiable contingent liabilities of the acquired company at their fair values as at the acquisition date. Any positive difference between the price paid, measured at fair value as at the acquisition date, plus the value of any non-controlling interests, and the net value of the identifiable assets and liabilities of the acquiree measured at fair value is recognized as goodwill. Any negative difference is recognized in profit or loss. The value of the non-controlling interests is determined either in proportion to the interest held by minority shareholders in the net identifiable assets of the acquiree or at their fair value as at the acquisition date. If the fair values of the assets, liabilities and contingent liabilities can only be calculated on a provisional basis, the business combination is recognized using such provisional values. Any adjustments resulting from the completion of the measurement process are recognized within twelve months of the date of acquisition, restating comparative figures. In the case of business combinations achieved in stages, at the date of acquisition of control the holdings acquired previously are remeasured to fair value and any positive or negative difference is recognized in profit or loss.

Property, plant and equipment Property, plant and equipment is recognized at historic cost, including directly attributable ancillary costs necessary for the asset to be ready for use. It is increased by the present value of the estimate of the costs of decommissioning and removing the asset where there is a legal or constructive obligation to do so. The corresponding liability is recognized under provisions for risks and charges. The accounting treatment of changes in the estimate of these costs, the passage of time and the discount rate is discussed under “Provisions for risks and charges”. Borrowing costs associated with financing obtained for the purchase/construction of assets are recognized through profit or loss in the year in which they accrue, except where they are directly attributable to the purchase or construction of a qualifying asset. Certain assets that were revalued at transition date or in previous periods are recognized at their fair value, which is considered as their deemed cost at the revaluation date. Where major components of property, plant and equipment have different useful lives, the components are recognized and depreciated separately. Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred to replace a part of the asset will flow to the Group and the cost of the item can be reliably determined. All other expenditure is recognized as an expense in the period in which it is incurred. The cost of replacing part or all of an asset is recognized as an increase in the value of the asset and is depreciated over its useful life; the net carrying amount of the replaced unit is eliminated through profit or loss, with the recognition of any capital gain/loss. Property, plant and equipment is reported net of accumulated depreciation and any impairment losses determined as set out below. Depreciation is calculated on a straight-line basis over the item’s estimated useful life, which is reviewed annually, and any changes are reflected on a prospective basis. Depreciation begins when the asset is ready for use.

F-258 The estimated useful life of the main items of property, plant and equipment is as follows: Useful life Civilbuildings...... 40-65 years Hydroelectric power plants(1) ...... 20-50 years Thermal power plants(1) ...... 10-40 years Nuclearpowerplants ...... 40years Geothermalpowerplants...... 10-40 years Alternativeenergypowerplants...... 15-40 years Transportlines...... 20-40 years Transformationplant ...... 32-42 years Medium-andlow-voltagedistributionnetworks ...... 10-60 years Gasdistributionnetworksandmeters...... 25-50 years Industrial and commercial equipment ...... 4-25 years

Assets to be relinquished free of charge The Group’s plants include assets to be relinquished free of charge at the end of the concession. These mainly regard major water diversion works and the public lands used for the operation of the thermal power plants. For plants in Italy, the concessions terminate in 2029 (2020 for plants located in the Autonomous Province of Trento and 2040 in the Autonomous Province of Bolzano) and 2020. If the concessions are not renewed, at those dates all intake and governing works, penstocks, outflow channels and other assets on public lands will be relinquished free of charge to the State in good operating condition. The Group believes that the existing ordinary maintenance programs ensure that the assets will be in good operating condition at the termination date. Accordingly, depreciation on assets to be relinquished is calculated over the shorter of the term of the concession and the remaining useful life of the assets. In accordance with Spanish laws 29/85 and 46/99, hydroelectric power stations in Spanish territory operate under administrative concessions at the end of which the plants will be returned to the government in good operating condition. The concessions will expire in the period between 2011 and 2067. A number of companies that operate in Argentina, Brazil and Mexico hold administrative concessions with similar conditions to those applied under the Spanish concession system. These concessions will expire in the period between 2013 and 2088.

F-259 Enel also operates under administrative concessions for the distribution of electricity in Spain. The concessions give Endesa the right to build and operate distribution networks for an indefinite period of time. The Group is a concession holder in Italy for the distribution of electricity. The concession, granted by the Ministry for Economic Development, was issued free of charge and terminates on December 31, 2030. If the concession is not renewed upon expiry, the grantor is required to pay an indemnity. The amount of the indemnity will be determined by agreement of the parties using appropriate valuation methods, based on both the balance-sheet value of the assets themselves and their profitability. In determining the indemnity, such profitability will be represented by the present value of future cash flows. The infrastructure serving the concessions is owned and available to the concession holder. It is recognized under “Property, plant and equipment” and is depreciated over their useful lives.

Intangible assets Intangible assets are measured at purchase or internal development cost, when it is probable that the use of such assets will generate future economic benefits and the related cost can be reliably determined. The cost includes any directly attributable incidental expenses necessary to make the assets ready for use. The assets, with a definite useful life, are reported net of accumulated amortization and any impairment losses, determined as set out below. Amortization is calculated on a straight-line basis over the item’s estimated useful life, which is checked at least annually; any changes in amortization policies are reflected on a prospective basis. Amortization commences when the asset is ready for use. Intangible assets with an indefinite useful life are not amortized systematically. Instead, they undergo impairment testing at least annually. Goodwill deriving from the acquisition of subsidiaries, associated companies or joint ventures is allocated to each of the cash-generating units identified. After initial recognition, goodwill is not amortized but is tested for recoverability at least annually using the criteria described in the notes. Goodwill relating to equity investments in associates is included in their carrying amount.

Impairment losses Property, plant and equipment, property investment and intangible assets are reviewed at least once a year to determine whether there is evidence of impairment. If such evidence exists, the recoverable amount of any property, plant and equipment and intangible assets is estimated. The recoverable amount of goodwill and intangible assets with an indefinite useful life as well as that of intangible assets not yet available for use, is estimated annually.

F-260 The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. Value in use is determined by discounting estimated future cash flows using a pre-tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the asset. The recoverable amount of assets that do not generate independent cash flows is determined based on the cash-generating unit to which the asset belongs. An impairment loss is recognized in the income statement if an asset’s carrying amount or that of the cash-generating unit to which it is allocated is higher than its recoverable amount. Impairment losses of cash generating units are first charged against the carrying amount of any goodwill attributed to it and then against the value of other assets, in proportion to their carrying amount. Impairment losses are reversed if the impairment has been reduced or is no longer present or there has been a change in the assumptions used to determine the recoverable amount. The recoverable amount of goodwill and intangible assets with an indefinite useful life as well as that of intangible assets not yet available for use is tested for recoverability annually or more frequently if there is evidence suggesting that the assets may be impaired. The original value of goodwill is not restored even if in subsequent years the reasons for the impairment no longer obtain.

Inventories Inventories are measured at the lower of cost and net estimated realizable value except for those involved in trading activities, which are measured at fair value with recognition through profit or loss. Average weighted cost is used, which includes related ancillary charges. Net estimated realizable value is the estimated normal selling price net of estimated selling costs or, where applicable, replacement cost. Inventories also include purchases of nuclear fuel, whose use is determined on the basis of the energy produced.

Financial instruments Financial assets measured at fair value through profit or loss This category includes debt securities and equity investments in entities other than subsidiaries, associates and joint ventures held for trading and designated as at fair value through profit or loss at the time of initial recognition. Such assets are initially recognized at fair value. Gains and losses from changes in their fair value are recognized in the income statement

F-261 Impairment losses are calculated as the difference between the carrying amount of the asset and the present value of expected future cash flows, discounted using the original effective interest rate.

Loans and receivables This category includes non-derivative financial and trade receivables, including debt securities, with fixed or determinable payments that are not quoted on an active market that the entity does not originally intend to sell. Such assets are initially recognized at fair value, adjusted for any transaction costs, and subsequently measured at amortized cost using the effective interest method, net of any impairment losses. Such impairment losses are calculated as the difference between the carrying amount of the asset and the present value of expected future cash flows, discounted using the original effective interest rate Trade receivables falling due in line with generally accepted trade terms are not discounted.

Financial assets available for sale This category includes debt securities, equity investments in other entities (not classified as “designated as at fair value through profit or loss”) and financial assets that cannot be classified in other categories. These instruments are measured at fair value with changes recognized in shareholders’ equity. At the time of sale, the cumulative gains and losses previously recognized in equity are reversed to the income statement. Where there is objective evidence that such assets have incurred an impairment loss, the cumulative loss previously recognized in equity is eliminated through reversal to the income statement. Such impairment losses, which cannot be reversed, are calculated as the difference between the carrying amount of the asset and its fair value, determined on the basis of the market price at the balance sheet date for financial assets listed on regulated markets or on the basis of the present value of expected future cash flows, discounted using the market interest rate for unlisted financial assets. When the fair value cannot be determined reliably, these assets are recognized at cost adjusted for any impairment losses.

Cash and cash equivalents This category is used to record cash and cash equivalents that are available on demand or at very short term, clear successfully and do not incur collection costs. Cash and cash equivalents are recognized net of bank overdrafts at period-end in the consolidated statement of cash flows.

Financial liabilities Financial liabilities other than derivatives are recognized at the settlement date when the Company becomes a party to the contractual clauses representing the instrument and are initially measured at fair value, less directly attributable transaction costs. Financial liabilities are subsequently measured at amortized cost using the effective interest rate method.

F-262 The manner in which the result of measurement at fair value is recognized depends on the type of hedge accounting adopted. When the derivatives are used to hedge the risk of changes in the fair value of hedged assets or liabilities, any changes in the fair value of the hedging instrument are taken to profit or loss. The adjustments in the fair values of the hedged assets or liabilities are also taken to profit or loss. When derivatives are used to hedge the risk of changes in the cash flows generated by the hedged items (cash flow hedges), changes in fair value are initially recognized in equity, in the amount qualifying as effective, and subsequently released to profit or loss in line with the gains and losses on the hedged item. The ineffective portion of the fair value of the hedging instrument is taken to profit or loss. Changes in the fair value of trading derivatives and those that no longer qualify for hedge accounting under IAS 39 are recognized in profit or loss. Derivative financial instruments are recognized at the trade date. Financial and non-financial contracts (that are not already measured at fair value) are analyzed to identify any embedded derivatives, which must be separated and measured at fair value. This analysis is conducted at the time the entity becomes party to the contract or when the contract is renegotiated in a manner that significantly changes the original associated cash flows. Fair value is determined using the official prices for instruments traded on regulated markets. For instruments not traded on regulated markets fair value is determined on the basis of the present value of expected cash flows using the market yield curve at the reporting date and translating amounts in currencies other than the euro at end-year exchange rates. The Group also analyzes all forward contracts for the purchase or sale of non-financial assets, with a specific focus on forward purchases and sales of electricity and energy commodities, in order to determine if they must be classified and treated in conformity with IAS 39 or if they have been entered into for physical delivery in line with the normal purchase/sale/use needs of the company (own use exemption). If such contracts have not been entered into in order to deliver electricity or energy commodities, they are measured at fair value.

Derecognition of financial assets and liabilities Financial assets are derecognized when the rights to receive the cash flows associated with the instrument expire or the company has transferred substantially all the risks and rewards associated with ownership or control of the instrument. Financial liabilities are derecognized when they are extinguished or the company transfers all the risks and benefits associated with the instrument.

Fair value hierarchy pursuant to IFRS 7 Assets and liabilities measured at fair value are classified in a three-level hierarchy as described below, in consideration of the inputs used to determine such fair value. In particular: Š Level 1 includes financial assets or liabilities measured at fair value on the basis of quoted prices in active markets for such instruments (unadjusted); Š Level 2 includes financial assets/liabilities measured at fair value on the basis of inputs other than those included in Level 1 that are observable either directly or indirectly on the market; Š Level 3 includes financial assets/liabilities whose fair value was calculated using inputs not based on observable market data.

F-263 Post-employment and other employee benefits Liabilities related to employee benefits paid upon leaving or after ceasing employment in connection with defined benefit plans or other long-term benefits accrued during the employment period, which are recognized net of any plan assets, are determined separately for each plan, using actuarial assumptions to estimate the amount of the future benefits that employees have accrued at the balance sheet date. The liability is recognized on an accruals basis over the vesting period of the related rights. These appraisals are performed by independent actuaries. As regards liabilities in respect of defined-benefit plans, the cumulative actuarial gains and losses at the end of the previous year exceeding 10% of the greater of the present value of the defined benefit obligation and the fair value of the plan assets at that date are recognized in profit or loss over the expected average remaining working lives of the employees participating in the plan. Otherwise, they are not recognized. Where there is a demonstrable commitment, with a formal plan without realistic possibility of withdrawal, to a termination before retirement eligibility has been reached, the benefits due to employees in respect of the termination are recognized as a cost and measured on the basis of the number of employees that are expected to accept the offer.

Restricted share units incentive plans The cost of services rendered by employees and remunerated through restricted share units (RSU) incentive plans is determined at grant date based on the fair value of the RSU granted to employees, in relation to the vesting of the right to receive the benefit. The calculation method to determine the fair value considers all characteristics of the RSU (term, exercise conditions, etc.), as well as the price and volatility of Enel shares over the vesting period. The pricing model used is the Montecarlo. This cost is recognized in the income statement, with recognition of a specific liability, over the vesting period, adjusting the fair value periodically, considering the best estimate possible of the number of RSU that will become exercisable.

F-264 If the provision is discounted, the periodic adjustment for the time factor is recognized as a financial expense. Where the liability relates to decommissioning and/or site restoration in respect of property, plant and equipment, the provision offsets the related asset. The expense is recognized in profit or loss through the depreciation of the item of property, plant and equipment to which it relates. Where the liability regards the treatment and storage of nuclear waste and other radioactive materials, the provision is recognized against the related operating costs. Changes in estimates are recognized in the income statement in the period in which the changes occur, with the exception of those in the costs of dismantling, removal and remediation resulting from changes in the timetable and costs necessary to extinguish the obligation or a change in the discount rate. These changes increase or decrease the value of the related assets and are taken to the income statement through depreciation. Where they increase the value of the assets, it is also determined whether the new carrying amount of the assets may not be fully recoverable. If this is the case, the assets are tested for impairment, estimating the unrecoverable amount and recognizing any loss in respect of the impairment in the income statement. Where the changes in estimates decrease the value of the assets, the reduction is recognized up to the carrying amount of the assets. Any excess is recognized immediately in the income statement. For more information on the estimation criteria adopted in determining provisions for dismantling and/or restoration of property, plant and equipment, especially those associated with nuclear power plants, please see the section on the use of estimates.

Revenues Revenues are recognized using the following criteria depending on the type of transaction: Š revenues from the sale of goods are recognized when the significant risks and rewards of ownership are transferred to the buyer and their amount can be reliably determined; Š revenues from the sale and transport of electricity and gas refer to the quantities provided during the period, even if these have not yet been invoiced, and are determined using estimates as well as the fixed meter reading figures. Where applicable, this revenue is based on the rates and related restrictions established by law or the Authority for Electricity and Gas and analogous foreign authorities during the applicable period. In particular, the authorities that regulate the electricity and gas markets can use mechanisms to reduce the impact of the temporal mismatching between the setting of prices for energy for the regulated market as applied to distributors and the setting of prices by the latter for final consumers; Š revenues from the rendering of services are recognized in line with the stage of completion of the services. Where it is not possible to reliably determine the value of the revenues, they are recognized in the amount of the costs that it is considered will be recovered;

F-265 Š revenues accrued in the period in respect of construction contracts are recognized on the basis of the payments agreed in relation to the stage of completion of the work, determined using the cost-to-cost method, under which costs, revenues and the related margins are recognized on the basis of the progress of the project. The stage of completion is determined as a ratio between costs incurred at the measurement date and the overall costs expected for the project. In additional to contractual payments, project revenues include any payments in respect of variations, price revisions and incentives, with the latter recognized where it is probable that they will actually be earned and can be reliably determined. Revenues are also adjusted for any penalties for delays attributable to the entity; Š revenues for fees for connection to the electricity distribution grid are recognized in full upon completion of connection activities if the service provided can be recognized separately from any electricity distribution services provided on an ongoing basis.

F-266 A discontinued operation is a component of an entity that has been divested or classified as held for sale and: Š represents a major line of business or geographical area of operations; Š is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or Š is a subsidiary acquired exclusively with a view to resale. Gains or losses on operating assets sold — whether disposed of or classified as held for sale — are shown separately in the income statement, net of the tax effects. The corresponding values for the previous period, where present, are reclassified and reported separately in the income statement, net of tax effects, for comparative purposes.

3. Recently issued accounting standards First-time adoption and applicable standards The Group has adopted the following international accounting standards and interpretations taking effect as from January 1, 2010: Š “Amendments to IAS 27 — Consolidated and separate financial statements”. The new version of the standard establishes that disposals of equity interests in a subsidiary that do not result in a loss of control shall be recognized in equity in the consolidated financial statements. Similar treatment is required in the consolidated financial statements in the event of the acquisition of an additional stake in an existing subsidiary. Where a controlling interest is divested, any residual interest must be re-measured to fair value on that date, recognizing the effects through profit or loss. The application of the standard led to the recognition in equity of the gain (net of taxes and transaction costs) on the disposal of 30.83% of Enel Green Power in the amount of €796 million; Š “Amendments to IAS 39 — Financial instruments: recognition and measurement: eligible hedged items”. With this amendment to the current IAS 39 standard, the IASB has clarified the conditions under which certain financial/non-financial instruments may be designated as hedged items. The amendment specifies that an entity may also choose to hedge only one kind of change in the cash flow or in the fair value of the hedged item (i.e. that the price of a hedged commodity increases beyond a specified price), which would constitute a one-sided risk. The IASB also specifies that a purchased option designated as a hedge in a one-sided risk hedge relationship is perfectly effective only if the hedged risk refers exclusively to changes in the intrinsic value of the hedging instrument, not to changes in its time value as well. The retrospective application of the standard did not have an impact in the period under review. Š “Amendments to IFRS 2 — Share-based payment”. The amendments seek to: Š clarify the scope of application of the standard, incorporating the guidelines contained in IFRIC 8 “Scope of IFRS 2”; Š provide guidelines for classifying share-based payments in the consolidated financial statements and separate financial statements of the companies involved; Š specify the accounting treatment of equity-settled share-based payments involving different Group companies, incorporating and expanding on the guidelines contained in IFRIC 11 “IFRS 2 — Group and treasury share transactions”; Š specify the accounting treatment of cash-settled share-based payments involving different Group companies, a situation not addressed by IFRIC 11.

F-267 The retrospective application of the amendments — which replaced IFRIC 8 and IFRIC 11 — did not have an impact in the period under review. Š “Revised IFRS 3 — Business combinations”: the new version introduces important amendments to the acquisition method for the recognition of business combinations. The changes include: Š the obligation to recognize in profit or loss any changes in contingent consideration, as well as the transaction costs of the business combination; Š the possibility of opting for either the full goodwill or the partial goodwill approach in choosing the methodology for initial recognition of goodwill; Š the obligation to recognize, in the case of the acquisition of additional holdings after acquiring control, the positive difference between the purchase price and the corresponding share of equity as an adjustment of equity; Š the obligation to recognize in profit or loss the effects of the fair value measurement, at the date of acquisition of control, of the holdings acquired previously in business combinations achieved in stages. Š The application of the standard on a prospective basis did not have an impact in the period under review. Š “IFRIC 12 — Service concession arrangements”. The interpretation, applied retrospectively as from January 1, 2009, requires that, depending on the characteristics of the concession arrangements, the infrastructure used to deliver the public services shall be recognized under intangible assets or under financial assets, depending, respectively, on whether the concession holder has the right to charge users of the services or it has the right to receive a specified amount from the grantor agency. The new interpretation applies to both infrastructure that the concession holder builds or acquires from a third party for the purposes of the service arrangement and existing infrastructure to which the concession holder is given access by the grantor for the purposes of the service arrangement. More specifically, IFRIC 12 applies to service concession arrangements between public grantors and private operators if: Š the grantor controls or regulates what services the operator must provide using the assets, to whom, and at what price; and Š the grantor also controls, via ownership or other arrangement, any significant residual interest in the assets at the end of the term of the arrangement. On the basis of the analysis conducted with respect to the concession for the distribution of electricity operated in Italy, the conditions for application of IFRIC 12 do not apply, as the concession holder has full control, as defined in the interpretation, of the infrastructure serving the electricity distribution service. The provisions, however, are applicable to the infrastructure serving the electricity distribution concessions held by the Endesa Group companies operating in Brazil. The effects of the application of the interpretation are discussed in note 4 to the consolidated financial statements. Š “IFRIC 15 — Agreements for the construction of real estate”. This interpretation sets out the guidelines for recognizing revenues and costs arising from the contracts for the construction of real estate and clarifies when a contract falls within the scope of “IAS 11 — Construction contracts” and “IAS 18 — Revenue”. The interpretation also specifies the accounting treatment to be used in respect of revenues from the delivery of additional services relating to real estate under construction. The interpretation was not applicable to the Group. Š “IFRIC 16 — Hedges of a net investment in a foreign operation”. The interpretation applies to entities that intend to hedge the exchange rate risk associated with a net investment in a foreign operation.

F-268 Š The main aspects of the interpretation are: Š the hedge may only cover the exchange rate difference between the functional currency (not the presentation currency) of the foreign operation and the functional currency of the parent (a parent being a controlling entity at any level, whether intermediate or final); Š in the consolidated financial statements, the risk may be designated as hedged only once, even if more than one entity in the same group has hedged its exchange rate exposure to the same foreign operation; Š the hedging instrument may be held by any entity in the group (apart from that being hedged); Š in the event of the disposal of the foreign operation, the value of the translation reserve connected with the hedging instrument reclassified to profit or loss in the consolidated financial statements shall be equal to the value of the gain/loss on the effective portion of the hedging instrument. The interpretation was not applicable to the Group. Š “IFRIC 17 — Distributions of non-cash assets to owners”. The interpretation clarifies matters relating to the distribution of non-cash dividends to owners. In particular: Š dividends shall be recognized as soon as they are authorized; Š the company shall measure dividends at the fair vale of the net assets to be distributed; Š the company shall recognize the difference between the carrying amount of the dividend and its fair value through profit or loss. The application of the interpretation on a prospective basis did not have an impact in the period under review. Š “IFRIC 18 — Transfers of assets from customers”. The interpretation clarifies the recognition and measurement of items of property, plant and equipment, or cash to acquire or construct such assets, received from a customer to connect the customer to a network or to ensure access to an ongoing supply of services. In particular, the interpretation establishes that, where all the conditions provided for under the international accounting standards for the initial recognition of an asset are met, such assets shall be recognized at fair value. As regards the recognition of the corresponding revenues, where the agreement only establishes an obligation to connect the customer to the network, the related revenues shall be recognized at the time of connection; otherwise, where the agreement also provides for the supply of various services, the related revenues shall be recognized in relation to the supply of services, over the shorter of the duration of the service agreement and the useful life of the asset. The effects of the application of the interpretation are discussed in note 4 to the consolidated financial statements.

Standards not yet adopted and not yet applicable In 2010, the European Commission endorsed the following new accounting standards and interpretations, which will be applicable to the Group as from January 1, 2011: Š “Revised IAS 24 — Related party disclosures”, issued in November 2009: the revised standard allows companies that are controlled by or under the significant influence of a government agency to adopt special related-party disclosure rules allowing summary disclosure of transactions with the government agency and with other companies controlled or under the significant influence of the government agency. The new version of IAS 24 also amends the

F-269 definition of related parties for the purposes of disclosure in the notes to the financial statements. The new version of the standard will take effect retrospectively. The Group does not expect the future application of the new provisions to have a significant impact. Š “Amendments to IFRIC 14 — Prepayments of a Minimum Funding Requirement”, issued in November 2009: the changes clarify the circumstances in which a company that prepays a minimum funding requirement for an employee benefit plan can recognize such payments as an asset. The Group does not expect the future application of the new provisions to have an impact. Š “IFRIC 19 — Extinguishing financial liabilities with equity instruments”, issued in November 2009: the interpretation clarifies the accounting treatment that a debtor must apply in the case of liability being extinguished through the issue of equity instruments to the creditor. In particular, the equity instruments issued represent the consideration for extinguishing the liability and must be measured at fair value as of the date of extinguishment. Any difference between the carrying amount of the extinguished liabilities and the initial value of the equity instruments shall be recognized through profit or loss. The interpretation will apply retrospectively. The Group does not expect the future application of the new provisions to have an impact. The following amendments, while endorsed in 2009, were not yet applicable as of January 1, 2010: Š “Amendments to IAS 32 Financial instruments — Presentation”. The amendment specifies that rights, options or warrants that entitle the holder to purchase a specific number of equity instruments of the entity issuing such rights for a specified amount of any currency shall be classified as equity if (and only if) the entity offers the rights, options or warrants pro rata to all existing holders of its equity instruments (other than derivatives) in the same class for a fixed amount of currency. The changes shall be applied retrospectively as from periods beginning on or after January 31, 2010. The application of the amendments is not expected to have a significant impact for the Group. In 2009 and 2010, the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) also published new standards and interpretations that as of December 31, 2010, had not yet been endorsed by the European Commission. The standards are set out below: Š “IFRS 9 — Financial instruments”, issued in November 2009 and revised in October 2010: the standard is the first of three phases in the project to replace IAS 39. The standard establishes new criteria for the classification of financial assets and liabilities, based on the business model of the entity and the cash flow characteristics of the financial assets. The new standard requires financial assets and liabilities to be measured initially at fair value plus any transaction costs directly attributable to their assumption or issue. Subsequently, they are measured at fair value or amortized cost, unless the fair value option is applied. As regards equity instruments not held for trading, an entity can make an irrevocable election to measure them at fair value through other comprehensive income. Any dividend income shall be recognized through profit or loss. The new standard will take effect, subject to endorsement, for periods beginning on or after January 1, 2013. The Group is assessing the potential impact of the future application of the measures. Š “Amendments to IFRS 7 — Financial instruments: Disclosures”, issued in October 2010; the amendments require additional disclosures to assist users of financial statements to assess the exposure to risk in the transfer of financial assets and the impact of such risks on the company’s financial position. The new standard introduces new disclosure requirements, to be reported in a single note, concerning transferred financial assets that have not been

F-270 derecognized and transferred assets in which the company has a continuing involvement as of the balance sheet date. The amendments to IFRS 7 will apply prospectively, subject to endorsement, for periods beginning on or after January 1, 2012. The Group is assessing the potential impact of the future application of the measures. Š “Improvements to IFRS”, issued in May 2010: the changes regard improvements to existing standards. The main developments regard: Š IFRS 3 — Business combinations, as revised in 2008: specifies that non-controlling interests in an acquiree are present ownership interests that entitle their holders, in the event of the liquidation of the company, to a proportionate share of the entity’s net assets. These must be measured at fair value or as a proportionate share of the acquiree’s net identifiable assets. All other components classifiable as non-controlling interests but which do not have the above characteristics (for example, share options, preference shares, etc.), shall be measured at fair value at the acquisition date unless another measurement basis is required by another IFRS. These amendments will apply, subject to endorsement, for periods beginning on or after July 1, 2010. Š IFRS 7 — Financial instruments: Disclosures: clarifies the disclosures required in the case of renegotiated financial instruments as well as disclosure requirements for credit risk. These amendments will apply, subject to endorsement, for periods beginning on or after January 1, 2011. Š IAS 1 — Presentation of financial statements: specifies that the reconciliation of the carrying amount at the start and end of the period for each component of “other comprehensive income” shall be presented either in the statement of changes in equity or in the notes to the financial statements. In this regard, with the introduction of “Revised IAS 27 — Consolidated and separate financial statements”, the standard had been modified, calling for the reconciliation to be presented in the statement of changes in equity. The amendments introduced in May 2010 shall apply, subject to endorsement, for periods beginning on or after January 1, 2011. Š IAS 34 — Interim financial reporting: the standard has been amended to add disclosure requirements for interim financial reports concerning, in particular, financial assets and liabilities. For example, it now requires information on changes in the business or in economic conditions that have had an impact on the fair value of financial assets/ liabilities measured at fair value or using the amortized cost method. The amendments shall apply, subject to endorsement, for periods beginning on or after January 1, 2011.

4. Restatement of balance-sheet figures at January 1, 2009 and at December 31, 2009 and income- statement figures for 2009 The changes in the policies used to account for certain assets in respect of services carried out on a concession basis (IFRIC 12) and the transfer of assets from customers (IFRIC 18) gave rise to adjustments of the related balance-sheet and income-statement accounts, included in the consolidated financial statements at December 31, 2009 and presented for comparative purposes only in these consolidated financial statements at December 31, 2010. More specifically, the retrospective application of the interpretations set out in IFRIC 12 involved appropriate reclassifications in the consolidated balance sheet at December 31, 2009 and at January 1, 2009 (see December 31, 2008), while the prospective application as from July 1, 2009, of the provisions of IFRIC 18 led to the restatement of a number of accounts in the consolidated balance sheet and income statement at December 31, 2009. In addition, the balance-sheet and income-statement figures reported in the 2009 consolidated financial statements have been restated to take account of the effects of the definitive determination

F-271 in 2010 (within the time limit envisaged under the 2003 version of IFRS 3, which was applicable until January 1, 2010) of the fair value of the assets acquired and the liabilities and contingent liabilities assumed with the acquisition of the 25.01% of Endesa on June 25, 2009 (see note 6). The following table shows the changes in the consolidated balance sheet and income statement, reporting the differences in accordance with the reason for the modification.

Application of at Jan. 1, 2009 Application of at Dec. 31, 2009 at Dec. 31, 2008 IFRIC 12 restated at Dec. 31, 2009 Endesa PPA IFRIC 12 restated

Millions of euro ASSETS Non-current assets Property, plant and equipment ...... 61,524 (1,519) 60,005 79,100 661 (3,174) 76,587 Investment property...... 462 — 462 295 — — 295 Intangible assets . . . 25,779 1,372 27,151 34,403 1,468 2,849 38,720 Deferred tax assets ...... 5,881 — 5,881 6,238 — — 6,238 Equity investments accounted for using the equity method...... 397 — 397 1,029 — — 1,029 Non-current financial assets ...... 4,338 17 4,355 8,954 — 70 9,024 Other non-current assets ...... 1,937 — 1,937 976 — — 976 100,318 (130) 100,188 130,995 2,129 (255) 132,869 Current assets Inventories ...... 2,182 — 2,182 2,500 — — 2,500 Trade receivables ..... 12,378 — 12,378 13,010 — — 13,010 Tax receivables . . . 1,239 — 1,239 1,534 — — 1,534 Current financial assets ...... 3,255 — 3,255 4,186 — — 4,186 Cash and cash equivalents ..... 5,106 — 5,106 4,170 — — 4,170 Other current assets ...... 3,478 — 3,478 3,490 — — 3,490 27,638 — 27,638 28,890 — — 28,890 Assets held for sale ...... 5,251 — 5,251 572 — — 572 TOTAL ASSETS ...... 133,207 (130) 133,077 160,457 2,129 (255) 162,331

F-272 at Dec. 31, Application of at Jan. 1, 2009 at Dec. 31, Endesa Application of Application of at Dec. 31, 2009 2008 IFRIC 12 restated 2009 PPA IFRIC 12 IFRIC 18 restated

Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 6,186 — 6,186 9,403 — — — 9,403 Otherreserves...... 3,329 3,329 7,888 (78) — — 7,810 Retained earnings (losses carried forward)...... 6,827 (6) 6,821 10,759 659 (9) — 11,409 Net income for the period...... 4,056 — 4,056 4,455 (25) — 216 4,646 20,398 (6) 20,392 32,505 556 (9) 216 33,268 Equity attributable to non-controlling interests ...... 5,897 — 5,897 11,848 805 (8) 20 12,665 TOTAL SHAREHOLDERS’ EQUITY ...... 26,295 (6) 26,289 44,353 1,361 (17) 236 45,933 Non-current liabilities Long-term loans ...... 51,045 — 51,045 55,850 — — — 55,850 Post-employment and other employee benefits ...... 2,910 — 2,910 3,110 — — — 3,110 Provisions for risks and charges...... 6,922 — 6,922 8,846 — — — 8,846 Deferred tax liabilities ...... 6,880 — 6,880 10,245 768 3 91 11,107 Non-current financial liabilities ...... 3,113 — 3,113 2,964 — — — 2,964 Other non-current liabilities ...... 3,431 (124) 3,307 1,829 — (243) (327) 1,259 74,301 (124) 74,177 82,844 768 (240) (236) 83,136 Current liabilities Short-termloans...... 5,467 — 5,467 7,542 — — — 7,542 Current portion of long- termloans ...... 3,110 — 3,110 2,909 — — — 2,909 Tradepayables...... 10,600 — 10,600 11,174 — — — 11,174 Incometaxpayable .... 1,991 — 1,991 1,482 — — — 1,482 Current financial liabilities ...... 2,454 — 2,454 1,784 — — — 1,784 Other current liabilities ...... 7,198 — 7,198 8,145 — 2 — 8,147 30,820 — 30,820 33,036 — 2 — 33,038 Liabilities held for sale ...... 1,791 — 1,791 224 — — — 224 TOTAL LIABILITIES ...... 106,912 (124) 106,788 116,104 768 (238) (236) 116,398 LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 133,207 (130) 133,077 160,457 2,129 (255) — 162,331

F-273 Endesa Application of 2009 PPA IFRIC 18 2009 restated Millions of euro Revenues Revenuesfromsalesandservices ...... 62,171 — 327 62,498 Otherrevenues...... 1,864 — — 1,864 64,035 — 327 64,362 Costs Rawmaterialsandconsumables...... 32,638 — — 32,638 Services...... 10,004 — — 10,004 Personnel ...... 4,908 — — 4,908 Depreciation, amortization and impairment losses . . . 5,289 50 — 5,339 Otheroperatingexpenses...... 2,298 — — 2,298 Capitalizedcosts ...... (1,593) — — (1,593) 53,544 50 — 53,594 Net income/(charges) from commodity risk management ...... 264 — — 264 Operating income ...... 10,755 (50) 327 11,032 Financialincome ...... 3,593 — — 3,593 Financialexpense ...... 5,334 — — 5,334 Share of income/(expense) from equity investments accounted for using the equity method ...... 54 — — 54 Income before taxes ...... 9,068 (50) 327 9,345 Incometaxes...... 2,520 (14) 91 2,597 Net income from continuing operations ...... 6,548 (36) 236 6,748 Net income from discontinued operations ...... (158) — — (158) Net income for the period (shareholders of the Parent Company and non-controlling interests) ...... 6,390 (36) 236 6,590 Attributable to non-controlling interests ...... 995 (11) 20 1,004 Attributable to shareholders of the Parent Company...... 5,395 (25) 216 5,586 The impact on the statement of consolidated comprehensive income and the consolidated statement of cash flows involve solely a number of reclassifications among accounts, in line with changes reported in the balance sheet and income statement.

5. Risk management Market risk As part of its operations, the Enel Group is exposed to a variety of market risks, notably the risk of changes in interest rates, exchange rates and commodity prices. The nature of the financial risks to which the Group in exposed is such that changes in interest rates cause changes in cash flows associated with interest payments on long-term floating-rate debt instruments, while changes in the exchange rate between the euro and the main foreign currencies have an impact on the value of the cash flows denominated in those currencies and the consolidation value of equity investments denominated in foreign currencies. In compliance with Group policies for managing financial risks, these exposures are generally hedged using over-the-counter derivatives (OTC).

F-274 Enel also engages in proprietary trading in order to maintain a presence in the Group’s reference energy commodity markets. These operations consist in taking on exposures in energy commodities

(oil products, gas, coal, CO2 certificates and electricity in the main European countries) using financial derivatives and physical contracts traded on regulated and OTC markets, exploiting profit opportunities through arbitrage transactions carried out on the basis of expected market developments. These operations are conducted within the framework of formal governance rules that establish strict risk limits. Compliance with the limits is verified daily by units that are independent of those undertaking the transactions. In 2010, the risk limits for Enel’s proprietary trading are set in terms of Value-at-Risk over a 1-day time horizon and a confidence level of 95%; the sum of the limits is equal to about €22 million. The following section reports the scale of transactions in derivatives outstanding at December 31, 2010, specifying the fair value and notional amount of each class of instrument as calculated at the year-end exchange rates provided by the European Central Bank where denominated in currencies other than the euro. Fair value is determined using the official prices for instruments traded on regulated markets. The fair value of instruments not listed on regulated markets is determined using valuation methods appropriate for each type of financial instrument and market data as of the close of the period (such as interest rates, exchange rates, volatility), discounting expected future cash flows on the basis of the market yield curve at the balance sheet date and translating amounts in currencies other than the euro using year-end exchange rates provided by the European Central Bank. Where possible, contracts relating to commodities are measured using market prices related to the same instruments on both regulated and other markets. The measurement criteria adopted for open derivatives positions at the end of the year were unchanged with respect to those used at the end of the previous year. The impact of such measurements on profit or loss and shareholders’ equity are therefore attributable solely to normal market developments. The notional amount of a derivative contract is the amount on the basis of which cash flows are exchanged. This amount can be expressed as a value or a quantity (for example tons, converted into euro by multiplying the notional amount by the agreed price). Amounts denominated in currencies other than the euro are converted into euro at the exchange rate prevailing at the balance-sheet date. The notional amounts of derivatives reported here do not necessarily represent amounts exchanged between the parties and therefore are not a measure of the Company’s credit risk exposure. The financial assets and liabilities associated with derivative instruments are classified as: Š cash flow hedge derivatives, related to hedging the risk of changes in cash flows associated with long-term floating-rate borrowings, hedging the exchange rate risk associated with the provisioning of fuels priced in foreign currencies, hedging revenues from the sale of electricity under a number of contracts entered into by Enel (two-way contracts for differences and other energy derivatives) and hedging the risk of changes in the prices of coal and oil commodities; Š fair value hedge derivatives, related to hedging the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk; Š derivatives hedging net investments in foreign operations from the translation risk in respect of the consolidation of equity investments denominated in a foreign currency; Š trading derivatives associated with proprietary trading in commodities or hedging interest and exchange rate risk or commodity risk which it would be inappropriate to designate as cash flow hedges/fair value hedges or which do not meet the formal requirements of IAS 39.

F-275 Interest rate risk The twin objectives of reducing the amount of debt subject to changes in interest rates and of containing borrowing costs is pursued with the use of a variety of derivatives contracts, notably interest rate swaps, interest rate options and swaptions. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Interest rate swaps normally provide for the periodic exchange of floating-rate interest flows for fixed-rate interest flows, both of which are calculated on the basis of the notional principal amount. Interest rate options involve the exchange of interest differences calculated on a notional principal amount once certain thresholds (strike prices) are reached. These thresholds specify the effective maximum rate (cap) or the minimum rate (floor) on the debt as a result of the hedge. Hedging strategies can also make use of combinations of options (collars) that establish the minimum and maximum rates at the same time. In this case, the strike prices are normally set so that no premium is paid on the contract (zero cost collars). Such contracts are normally used when the fixed interest rate that can be obtained in an interest rate swap is considered too high with respect to Enel’s expectations for future interest rate developments. In addition, interest rate options are also considered appropriate in periods of uncertainty about future interest rate developments, in order to benefit from any decreases in interest rates. Swaptions involve the purchase of the right to enter into an interest rate swap at a future date on specified contractual terms and conditions (the fixed rate of the underlying interest rate swap represents the strike price of the option). These contracts are normally used before bond issues (pre-hedge transactions) where the company wants to fix its borrowing costs ahead of time. They expire or are exercised in conjunction with the actual bond issue. As with interest rate collars, zero-cost strategies can be implemented with swaptions, making it possible to fix the maximum and minimum interest rate ahead of time and to benefit from possible declines in interest rates. The following table reports the notional amount of interest rate derivatives at December 31, 2010 and December 31, 2009 broken down by type of contract: Notional amount 2010 2009 Millions of euro Interestrateswaps ...... 12,628 13,632 Interestrateoptions ...... 4,308 4,375 Total ...... 16,936 18,007

F-276 The following table reports the notional amount and fair value of interest rate derivatives at December 31, 2010 and December 31, 2009, broken down by designation (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2010 2009 2010 2009 2010 2009 2010 2009

Millions of euro Cash flow hedge derivatives: Interestrateswaps .... 9,432 9,951 (497) (502) 8 10 (505) (512) Interest rate options . . . 3,608 4,337 (64) (119) — 1 (64) (120) Fair value hedge derivatives: Interestrateswaps .... 98 598 9 — 9 8 — (8) Trading derivatives: Interestrateswaps .... 3,098 3,083 (163) (172) 8 9 (171) (181) Interest rate options . . . 700 38 (19) (1) — — (19) (1) Total interest rate swaps ...... 12,628 13,632 (651) (674) 25 27 (676) (701) Total interest rate options ...... 4,308 4,375 (83) (120) — 1 (83) (121) TOTAL INTEREST RATE DERIVATIVES .... 16,936 18,007 (734) (794) 25 28 (759) (822)

The following table reports the cash flows expected in coming years from the these financial derivatives:

Expected cash flows from interest rate derivatives Fair value Stratification of expected cash flows at Dec. 31, 2010 2011 2012 2013 2014 2015 Beyond Millions of euro CFH on interest rates Positive fair value ...... 8 (2) (2) — 5 1 4 Negativefairvalue...... (569) (267) (186) (99) (51) (21) (50) FVH on interest rates Positive fair value ...... 932211 4 Negativefairvalue...... —————— — Trading derivatives on interest rates Positive fair value ...... 833211 — Negativefairvalue...... (190) (102) (61) (19) (9) (3) (30) The amount of floating-rate debt that is not hedged against interest rate risk is the main risk factor that could impact the income statement (raising borrowing costs) in the event of an increase in market interest rates. At December 31, 2010, 39% of net long-term financial debt was floating rate (51% at December 31, 2009). Taking into account cash flow hedges of interest rates considered effective pursuant to the IFRS–EU, 14% of the debt was exposed to interest rate risk at December 31, 2010 (26% at December 31, 2009). Including interest rate derivatives treated as hedges for management purposes but ineligible for hedge accounting, the residual exposure would be 7% (20% at December 31, 2009).

F-277 If interest rates had been 1 basis point higher at December 31, 2010, all other variables being equal, shareholders’ equity would have been about €3 million higher (€5 million at December 31, 2009) as a result of the increase in the fair value of CFH derivatives on interest rates. Conversely, if interest rates had been 1 basis point lower at that date, all other variables being equal, shareholders’ equity would have been €3 million lower (€5 million at December 31, 2009) as a result of the decrease in the fair value of CFH derivatives on interest rates. An equivalent increase (decrease) in interest rates, all other variables being equal, would have a negative (positive) impact on the income statement in terms of higher (lower) interest expense on the portion of debt not hedged against interest rate risk of about €301 thousand (€1 million at December 31, 2009).

Exchange rate risk Exchange rate risk is mainly generated with the following transaction categories: Š debt denominated in currencies other than the functional currency of the respective countries entered into by the holding company or the individual subsidiaries; Š cash flows in respect of the purchase or sale of fuel or electricity on international markets; Š cash flows in respect of investments in foreign currency, dividends from unconsolidated foreign companies or the purchase or sale of equity investments. In order to minimize this risk, the Group normally uses a variety of over-the-counter (OTC) derivatives such as currency forwards, cross currency interest rate swaps and currency options. The term of such contracts does not exceed the maturity of the underlying financial liability, so that any change in the fair value and/or cash flows of such contracts is offset by a corresponding change in the fair value and/or cash flows of the underlying position. Cross currency interest rate swaps are used to transform a long-term fixed- or floating-rate liability in foreign currency into an equivalent fixed- or floating-rate liability in euros. In addition to having notionals denominated in different currencies, these instruments differ from interest rate swaps in that they provide both for the periodic exchange of cash flows and the final exchange of principal. Currency forwards are contracts in which the counterparties agree to exchange principal amounts denominated in different currencies at a specified future date and exchange rate (the strike). Such contracts may call for the actual exchange of the two amounts (deliverable forwards) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity (non- deliverable forwards). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank. Currency options involve the purchase (or sale) of the right to exchange, at an agreed future date, two principal amounts denominated in different currencies on specified terms (the contractual exchange rate represents the option strike price); Such contracts may call for the actual exchange of the two amounts (deliverable) or payment of the difference between the strike exchange rate and the prevailing exchange rate at maturity(non-deliverable). In the latter case, the strike rate and/or the spot rate may be determined as averages of the official fixings of the European Central Bank.

F-278 The following table reports the notional amount of transactions outstanding at December 31, 2010 and December 31, 2009, broken down by type of hedged item: Notional amount 2010 2009 Millions of euro Cross currency interest rate swaps (CCIRSs) hedging debt denominated in currenciesotherthantheeuro ...... 13,934 12,606 Currency forwards hedging exchange rate risk on commodities ...... 7,055 5,072 Currency forwards hedging future cash flows in currencies other than euro ...... 554 594 Currencyforwardshedgingcommercialpaper...... 334 162 Otherforwardcontracts...... 230 210 Options hedging exchange rate risk on commodities ...... — 102 Total ...... 22,107 18,746

More specifically, these include: Š CCIRSs with a notional amount of €13,934 million to hedge the exchange rate risk on debt denominated in currencies other than the euro (€12,606 million at December 31, 2009); Š currency forwards with a notional amount of €7,609 million used to hedge the exchange rate risk associated with purchases of fuel, imported electricity and expected cash flows in currencies other than the euro (€5,666 million at December 31, 2009); and Š currency forwards with a notional amount of €334 million used to hedge the exchange rate risk associated with redemptions of commercial paper issued in currencies other than the euro (€162 million at December 31, 2009). At the end of 2010, other outstanding positions included currency forwards with a notional amount of €230 million (€210 million at December 31, 2009) not directly connected to individual exposures to exchange rate risk.

F-279 The following table reports the notional amount and fair value of exchange rate derivatives at December 31, 2010 and December 31, 2009, divided by accounting treatment (IAS 39): Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2010 2009 2010 2009 2010 2009 2010 2009

Millions of euro Cash flow hedge derivatives: –currencyforwards ...... 3,014 3,229 (11) (1) 34 59 (45) (60) –CCIRSs...... 13,419 12,084 (886) (1,555) 671 207 (1,557) (1,762) Fair value hedge derivatives: –CCIRSs...... 515 522 (6) (50) 15 2 (21) (52) Derivatives hedging net investment in a foreign operation: –currencyforwards ...... — 319 — (9) — — — (9) Trading derivatives: –currencyforwards ...... 5,159 2,490 (73) 4 55 35 (128) (31) –options ...... — 102 — (3) — — — (3) Total forwards ...... 8,173 6,038 (84) (6) 89 94 (173) (100) Total options ...... — 102 — (3) — — — (3) Total CCIRSs ...... 13,934 12,606 (892) (1,605) 686 209 (1,578) (1,814) TOTAL EXCHANGE RATE DERIVATIVES ...... 22,107 18,746 (976) (1,614) 775 303 (1,751) (1,917)

The following table reports the cash flows expected in coming years from these financial derivatives:

Expected cash flows from exchange rate derivatives Fair value Stratification of expected cash flows at Dec. 31, 2010 2011 2012 2013 2014 2015 Beyond Millions of euro CFH on exchange rates Positive fair value ...... 705 112 82 89 176 41 583 Negativefairvalue...... (1,602) (136) (259) (70) (227) (311) (710) FVH on exchange rates Positive fair value ...... 15886(3)11 (13) Negativefairvalue...... (21) (2) (16) (2) (1) — — Trading derivatives on exchange rates Positive fair value ...... 55 49 4 2 — — — Negativefairvalue...... (128) (120) (10) (1) — — — An analysis of the Group’s financial debt shows that 30% of medium- and long-term debt (27% at December 31, 2009) is denominated in currencies other than the euro. Taking account of exchange rate hedges and the portion of debt denominated in the functional currency of the country in which the Group company holding the debt position operates, the proportion of unhedged debt denominated in currencies other than the euro decreases to about 2% (3% at December 31, 2009), a proportion that is felt would not have a significant impact on the income statement in the event of a change in market exchange rates.

F-280 At December 31, 2010, assuming a 10% appreciation of the euro against the dollar, all other variables being equal, shareholders’ equity would have been €1,449 million lower (€1,348 million at December 31, 2009) as a result of the decrease in the fair value of CFH derivatives on exchange rates. Conversely, assuming a 10% depreciation of the euro against the dollar, all other variables being equal, shareholders’ equity would have been about €1,780 million higher (€1,633 million at December 31, 2009) as a result of the increase in the fair value of CFH derivatives on exchange rates.

Commodity risk The exposure to the risk of changes in commodity prices is associated with the purchase of fuel for power plants and the purchase and sale of gas under indexed contracts as well as the purchase and sale of electricity at variable prices (indexed bilateral contracts and sales on Power Exchange). The exposures on indexed contracts are quantified by breaking down the contracts that generate exposure into the underlying risk factors. Various types of derivatives are used to reduce the exposure to fluctuations in energy commodity prices and as part of proprietary trading activities (mainly forwards, swaps, commodity options, futures and contracts for differences). Enel manages the risks associated with transactions in commodities used for the Group’s core business and the general risks generated by proprietary trading separately. Each company/business unit is assigned specific risk limits for each type of commodity in each industrial or proprietary trading portfolio. Enel assesses and monitors compliance with the assigned risk limits in terms of Profit-at-Risk for the monthly exposures generated by the energy commodity industrial portfolios and in terms of Value-at-Risk with regard to the daily exposures generated by proprietary trading activities. As regards electricity sold by the Group, Enel uses fixed-price contracts in the form of bilateral physical contracts and financial contracts (e.g. contracts for differences, VPP contracts, etc.) in which differences are paid to the counterparty if the market electricity price exceeds the strike price and to Enel in the opposite case. The residual exposure in respect of the sale of energy on the spot market not hedged with such contracts is quantified and managed on the basis of an estimation of developments in generation costs. The residual positions thus determined are aggregated on the basis of uniform risk factors that can be hedged in the market.

F-281 The following table reports the notional amounts and fair values of derivative contracts relating to commodities at December 31, 2010 and December 31, 2009. Notional amount Fair value Fair value assets Fair value liabilities

at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, at Dec. 31, 2010 2009 2010 2009 2010 2009 2010 2009

Millions of euro Cash flow hedge derivatives: – two-way contracts for differences...... 442 130 8 2 9 2 (1) — – swaps on oil commodities ...... 89 183 11 (5) 11 2 — (7) –derivativesoncoal...... 830 858 173 (83) 175 11 (2) (94) –otherderivativesonenergy .... 1,420 531 35 (5) 56 16 (21) (21) – derivatives on other commodities ...... 524 367 48 54 48 54 — — Trading derivatives: – two-way contracts for differences...... 1,532 1,562 38 30 38 30 — — – swaps on oil commodities ...... 5,489 1,919 98 17 312 104 (214) (87) –derivativesoncoal...... 896 1,260 31 (2) 147 85 (116) (87) – futures/options on oil commodities ...... 229 233 (5) 3 3 15 (8) (12) – swaps on gas transmission fees...... — 17 — (2) — — — (2) –otherderivativesonenergy .... 11,510 10,964 (93) 36 21 339 (114) (303) –embeddedderivatives ...... 432 578 (356) (441) 8 5 (364) (446) – derivatives on other commodities ...... 445 637 21 28 38 53 (17) (25) TOTAL COMMODITY DERIVATIVES ...... 23,838 19,239 9 (368) 866 716 (857) (1,084)

Cash flow hedge derivatives refer to the physical positions in the underlying and, therefore, any positive (negative) change in the fair value of the underlying physical commodity corresponds to a negative (positive) change in the fair value of the derivative instrument, so the impact on the income statement is equal to zero. The following table shows the fair value of the derivatives and the consequent impact on shareholders’ equity at December 31, 2010 (gross of taxes) that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2010 -10% Scenario +10% Millions of euro Fair value of two-way CFDs in cash flow hedges ...... 52 8 (35) Fair value of derivatives on oil commodities in cash flow hedges ...... 22 11 1 Fair value of derivatives on coal in cash flow hedges ...... 88 173 258 Fair value of derivatives on energy in cash flow hedges ...... 172 35 (104) Fair value of derivatives on gas in cash flow hedges ...... (10) 48 105

F-282 The following table shows the fair value of derivatives and the consequent impact on the income statement and shareholders’ equity at December 31, 2010 (gross of taxes), that would have resulted, all other conditions being equal, in the event of a 10% increase or decrease in the prices of the commodities underlying the valuation model considered in the scenario at that date. at Dec. 31, 2010 -10% Scenario +10% Millions of euro Fair value of two-way contracts for differences in trading transactions .... 123 38 (47) Fair value of derivatives on energy commodities in trading transactions (dependentonthepriceofoilcommodities) ...... 88 93 97 Fairvalueofderivativesoncoalintradingtransactions...... 46 31 14 Fairvalueofderivativesonenergyintradingtransactions ...... (296) (93) 97 Fair value of derivatives on other commodities in trading transactions ..... 13 21 28 Embedded derivatives relate to contracts for the purchase and sale of energy entered into by Slovenské elektrárne in Slovakia. The market value at December 31, 2010 came to a negative €356 million, of which: Š a positive €8 million in respect of an embedded derivative whose fair value depends on the US inflation rate, the price of aluminum on the London Metal Exchange and the euro/dollar (EUR/ USD) exchange rate; Š a negative €206 million in respect of an embedded derivative on the EUR/USD exchange rate; Š a negative €158 million in respect of a derivative on the price of gas. The following tables show the fair value at December 31, 2010, as well as the value expected from a 10% increase and a 10% decrease in the underlying risk factors.

Fair value embedded derivative (a) US inflation rate Spot price of aluminum EUR/USD exchange rate Millions of euro Decrease of 10% ...... 10 2 7 Scenario at Dec. 31, 2010 ...... 8 8 8 Increase of 10% ...... 7 18 9

Fair value embedded derivative (b) EUR/USD exchange rate Millions of euro Decrease of 10% ...... (221) Scenario at Dec. 31, 2010 ...... (206) Increase of 10% ...... (192)

Fair value embedded derivative (c) Gas price Millions of euro Decrease of 10% ...... (141) Scenario at Dec. 31, 2010 ...... (158) Increase of 10% ...... (173)

F-283 The following table reports the cash flows expected in coming years from these financial derivatives on commodities. Fair value Stratification of expected cash flows at Dec. 31, 2010 2011 2012 2013 2014 2015 Beyond Millions of euro Cash flow hedge derivatives: – Positive fair value ...... 299 253 36222 4 –Negativefairvalue...... (24) (19) (5) — — — — Trading derivatives: – Positive fair value ...... 567 502 53 11 1 — — –Negativefairvalue...... (833) (552) (151) (130)

Credit risk Enel manages credit risk by operating solely with counterparties considered solvent by the market, i.e. those with high credit standing, and does not have any significant concentration of credit risk. The credit risk in respect of the derivatives portfolio is considered negligible since transactions are conducted solely with leading Italian and international banks, diversifying the exposure among different institutions and constantly monitoring their credit ratings. In addition, during the year Enel entered into margin agreements with the leading financial institutions with which it operates that call for the exchange of cash collateral, which significantly mitigates the exposure to counterparty risk. As part of activities related to purchasing fuels for thermal generation and the sale and distribution of electricity, the distribution of gas and the sale of gas to eligible customers, Enel grants trade credit to external counterparties. The counterparties selected are carefully monitored through the assessment of the related credit risk and the pledge of suitable guarantees and/or security deposits to ensure adequate protection from default risk.

Liquidity risk Enel SpA (directly and through its subsidiary Enel Finance International NV) is responsible for the centralized Group Treasury function (with the exception of the Endesa Group, where that function is performed by Endesa SA and its subsidiaries International Endesa BV and Endesa Capital SA), meeting liquidity requirements primarily through cash flows generated by ordinary operations and drawing on a range of sources of financing. In addition, it manages any excess liquidity as appropriate. The Enel Group’s access to the credit market despite the recent financial crisis was confirmed by the successful placement during the period of bonds on the European retail market totaling €3 billion and the 5-year €10 billion revolving credit line obtained by Enel SpA and Enel Finance International NV that can be used to manage working capital (unconnected with the refinancing program for existing debt). At December 31, 2010, the Enel Group had a total of about €5.2 billion in cash or cash equivalents, of which €1.8 billion held by Endesa, as well as total committed credit lines of €20.2 billion, of which €6.7 billion held by Endesa. The committed credit lines amounted to €29.2 billion (€9 billion drawn), of which €8.6 billion held by Endesa (€1.8 billion drawn). In addition, the Group had uncommitted credit lines totaling €2.7 billion (€0.5 billion drawn), of which €1.6 billion held by Endesa (€0.4 billion drawn).

F-284 Finally, the Group has outstanding commercial paper programs with a maximum ceiling of €11 billion (€7.4 billion drawn), of which €5 billion held by Endesa through its subsidiaries (€2 billion drawn).

6. Main changes in the scope of consolidation In the two periods examined here, the scope of consolidation changed as a result of the following main transactions:

2009 Š acquisition, on January 9, 2009, of 100% of KJWB (now Endesa Ireland), which operates in Ireland in the electricity generation sector. As it is controlled by Endesa, the company was consolidated on a proportionate basis until June 25, 2009, and on a full line-by-line basis thereafter; Š disposal, on April 1, 2009, of the entire share capital of Enel Linee Alta Tensione (ELAT), the company to which Enel Distribuzione transferred, with effect from January 1, 2009, a business unit consisting of high-voltage power lines and the related legal relationships; Š acquisition, on June 25, 2009, by Enel, acting through its subsidiary Enel Energy Europe, of the 25.01% of Endesa held, directly and indirectly, by Acciona. Following the acquisition, Enel holds 92.06% of Endesa and exercises full control over the company. As a result, as from that date, Endesa is consolidated in the Enel Group on a full, line-by-line basis rather than proportionately, with separate reporting of the non-controlling interest of 7.94%. Š disposal, on September 23, 2009, of 51% of SeverEnergia, a Russian company 100% owned until that date by Artic Russia, in which Enel and Eni have stakes of 40% and 60%, respectively. Taking account of the existing governance mechanisms, which enable Enel to exercise a significant influence over the company through Artic Russia, as from that date SeverEnergia has been accounted for using the equity method rather than being consolidated on a proportionate basis; Š disposal, on September 30, 2009, by Enel Distribuzione of 80% of Enel Rete Gas. Following the transaction, Enel’s stake in Enel Rete Gas fell from 99.88% to 19.8%, with the consequent loss of control. Taking account of the existing governance mechanisms, which enable Enel to exercise a significant influence over the company, as from that date Enel Rete Gas has been accounted for using the equity method rather than being consolidated on a line-by-line basis.

2010 Š establishment of SE Hydropower, which operates in the generation of electricity in the Province of Bolzano, which as from June 1, 2010, the Group, despite holding only 40%, consolidates on a full line-by-line basis owing to specific shareholders’ agreements concerning the governance of the company. The fair value of the assets acquired and liabilities and contingent liabilities assumed with the operation have been recognized on a provisional basis pending their definitive determination pursuant to IFRS 3; Š disposal, on July 1, 2010, by Endesa of 50.01% of Endesa Hellas, a Greek company operating in the renewables generation sector; Š disposal, on December 17, 2010, of 80% of Nubia 2000, a company owning assets (acquired during the year by Endesa Gas) in the gas transport and distribution industry in Spain. The sale also includes a 35% stake in Gas Aragon, which had previously been acquired by Nubia 2000.

F-285 Final allocation of the purchase price of the assets acquired and liabilities assumed in respect of 25.01% of Endesa Following the acquisition on June 25, 2009 of the 25.01% of Endesa held directly and indirectly by Acciona, as from that date Enel holds 92.06% of that company, exercising full control. In accordance with IFRS 3, in the consolidated financial statements at December 31, 2009, the fair values of the assets acquired and the liabilities and contingent liabilities assumed at the acquisition date had been determined on a provisional basis, since as at the balance-sheet date a number of valuation processes for the last acquisition step had not yet been completed. The balance sheet included in the consolidated financial statements at December 31, 2009 reflected a number of adjustments made to the provisional allocation at the date of the last acquisition step, referring essentially to the adjustment of certain liabilities associated with certain components of Spain’s power transmission grid. The definitive fair value of the assets acquired and the liabilities and contingent liabilities assumed was determined in the 1st Half of 2010 (by the time limit established under IFRS 3 in the 2003 version applicable until January 1, 2010) and the positive difference between the purchase price and the fair value of the net assets acquired, equal to €3,424 million, was recognized under goodwill. The following table reports the definitive calculation of the goodwill related to the acquisition of 25.01% of Endesa:

Calculation of goodwill Millions of euro Net assets acquired before allocation(1) ...... 5,395 Fair value adjustments:(2) –property,plantandequipment ...... 262 – intangible assets ...... 587 – other assets ...... 31 – other non-current liabilities ...... 1,109 – net deferred tax liabilities ...... (593) – non-controlling interests ...... (526) Net assets acquired after allocation(1) ...... 6,265 Value of the transaction(3) ...... 9,689 Goodwill ...... 3,424

(1) Net assets stated in proportion to Enel’s 25.01% holding. (2) The adjustments have been determined with respect to a stake of 32.95%, which includes the portion attributable to non- controlling interests. (3) Including incidental expenses. The goodwill of €3,424 million, in compliance with IFRS 3, reflects the positive difference between the purchase price and the fair value of the net assets acquired and regards the future economic benefits that cannot be separately recognized under the accounting principle.

F-286 The following table reports the provisional and definitive fair values of the assets acquired and the liabilities and contingent liabilities assumed at the acquisition date of June 25, 2009, indicating the amount recognized following the provisional allocation at December 31, 2009 and the amount recognized in 2010 following the definitive allocation.

Endesa balance sheet at the acquisition date (25.01%) Adjustments for Adjustments for Carrying amount provisional fair value definitive fair value Restated carrying prior to measurement at measurement amount at June 25, 2009 Dec. 31, 2009 in 2010 June 25, 2009 Millions of euro Property, plant and equipment ...... 13,171 37 225 13,433 Intangible assets ...... 4,455 — 587 5,042 Inventories, trade receivables and other receivables ...... 1,702 — — 1,702 Cash and cash equivalents ...... 560 — — 560 Other current and non- current assets ...... 4,693 31 — 4,724 Total assets ...... 24,581 68 812 25,461 Shareholders’ equity attributable to shareholders of the Parent Company .... 5,395 624 246 6,265 Non-controlling interests...... 4,122 210 316 4,648 Financialdebt...... 6,686 — — 6,686 Tradepayables ...... 1,575 — — 1,575 Financial liabilities and other current and non- current liabilities .... 5,382 (766) 250 4,866 Employee benefits and riskprovisions ...... 1,421 — — 1,421 Total liabilities and shareholders’ equity ...... 24,581 68 812 25,461

The main adjustments, summarized above, to the fair values of the assets acquired and the liabilities and contingent liabilities assumed are attributable to the following factors: Š the adjustment of the value of certain items of property, plant and equipment and intangible assets as a result of the completion of the measurement of their fair value; Š the adjustment of the value of some liabilities connected with certain components of Spain’s power transmission grid; Š the determination, where applicable, of the tax effects of the above adjustments; Š the allocation, where applicable, of the above adjustments to non-controlling interests.

F-287 Compared with the provisional determination at December 31, 2009, the identification of the additional adjustments increased the value of the net assets acquired (excluding the share attributable to non-controlling interests) by €984 million and, in compliance with IFRS 3 for business combinations completed in stages, 67.05% of the adjustment was recognized in equity attributable to the shareholders of the Parent Company (€656 million). Taking account of the effect of the provisional allocation already made at December 31, 2009 in the amount of €1,670 million, the overall increase in Group equity attributable to the 67.05% of the identified adjustments amounted to €2,326 million.

Results for 2010(1)

Iberia and Services Elimination Ing. & Infra. & Latin Renevable Parent and Other and Sales GEM Innov. Networks America Int’ll Energy. Company Activieties adjustments Total

Millions of euro Revenues from third parties ...... 18,499 12,173 106 2,991 31,022 6,203 1,934 358 102 (11) 73,377 Revenues from other segments ...... 198 5,367 502 4,436 241 157 245 321 1,031 (12,498) — Total revenues ...... 18,697 17,540 608 7,427 31,263 6,360 2,179 679 1,133 (12,509) 73,377 Net income/(charges) from commodity risk management ...... (587) 788 — — 28 (29) 89 (9) — — 280 Operating income .... 58 1,832 10 2,911 4,643 903 966 (75) 26 (16) 11,258 Net financial income/ (expense) and income/(expense) from equity investments accounted for using the equity method . . . — — — — — — — — — — (3,184) Incometaxes...... — — — — — — — — — — 2,401 Net income from continuing operations ...... — — — — — — — — — — 5,673 Net income from discontinued operations ...... ——— — — — — — — — — Net income (Group and non-controlling interests) ...... — — — — — — — — — — 5,673 Operating assets ...... 6,162 14,934 316 17,680 77,764(2) 13,103(5) 9,654(8) 1,075 2,529 (5,732) 137,485 Operating liabilities .. 5,673 4,467 374 5,825 13,500(3) 5,184(6) 1,235(9) 1,166 1,543 (5,734) 33,233 Capital expenditure .. 62 648 5 1,147 2,866(4) 1,210(7) 1,065(10) 7 80 — 7,090

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the year. (2) Of which €484 million regarding units classified as “Held for sale”. (3) Of which €145 million regarding units classified as “Held for sale”. (4) Does not include €76 million regarding units classified as “Held for sale”. (5) Of which €592 million regarding units classified as “Held for sale”.

F-288 (6) Of which €26 million regarding units classified as “Held for sale”. (7) Does not include €10 million regarding units classified as “Held for sale”. (8) Of which €399 million regarding units classified as “Held for sale”. (9) Of which €14 million regarding units classified as “Held for sale”. (10) Does not include €11 million regarding units classified as “Held for sale”.

Results for 2009 restated(1)(2)

Iberia & Services Eliminations Eng. & Infra. & Latin Renewable Parent and Other and Sales GEM Innov. Networks America Int’l Energy Company Activities adjustments Total

Millions of euro Revenues from third parties...... 20,034 12,393 212 2,608 21,797 5,386 1,520 335 116 (39) 64,362 Revenues from other segments ...... 296 5,984 691 4,665 3 182 231 302 976 (13,330) — Total revenues ...... 20,330 18,377 903 7,273 21,800 5,568 1,751 637 1,092 (13,369) 64,362 Net income/(charges) from commodity risk management ...... (871) 811 — — 173 31 116 4 — — 264 Operating income ..... 10 2,482 14 3,137 3,659 808 938 (34) 23 (5) 11,032 Net financial income/ (expense) and income/(expense) from equity investments accounted for using the equity method . . . — — — — — — — — — — (1,687) Incometaxes...... — — — — — — — — — — 2,597 Net income from continuing operations ...... — — — — — — — — — — 6,748 Net income from discontinued operations ...... — — — — — — — — — — (158) Net income (Group and non-controlling interests) ...... — — — — — — — — — — 6,590 Operating assets ...... 6,598 15,054 342 17,272 80,799(5) 12,292 6,423 1,229 2,197 (6,142)136,064 Operating liabilities 5,471 4,218 363 5,651 13,034(5) 4,786 804 1,090 1,612 (4,981) 32,048 Capital expenditure ... 80 783 5 1,112(3) 2,962(6) 1,014 771 6 92 — 6,825

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the year. (2) The figures were restated as a result of the retrospective application of a number of accounting standards, as well as the completion of the process of allocating the cost of the purchase of 25.01% of Endesa to the assets acquired and liabilities assumed. (3) Does not include €63 million regarding units classified as “Held for sale”. (4) Of which €485 million regarding units classified as “Held for sale”. (5) Of which €102 million regarding units classified as “Held for sale”. (6) Does not include €134 million regarding units classified as “Held for sale”.

F-289 The following table reconciles segment assets and liabilities and the consolidated figures. at Dec. 31, 2009 at Dec. 31, 2010 restated(1) Millions of euro Total assets ...... 168,052 162,331 Financial assets, cash and cash equivalents ...... 22,934 18,480 Tax assets ...... 7,633 7,787 Segment assets ...... 137,485 136,064 – of which: Sales ...... 6,162 6,598 GenerationandEnergyManagement ...... 14,934 15,054 Engineering and Innovation ...... 316 342 InfrastructureandNetworks...... 17,680 17,272 Iberia and Latin America(2) ...... 77,764 80,799 International(3) ...... 13,103 12,292 Renewable Energy(4) ...... 9,654 6,423 ParentCompany ...... 1,075 1,229 Services and Other Activities ...... 2,529 2,197 Eliminations and adjustments ...... (5,732) (6,142) Total liabilities ...... 114,507 116,398 Loans and other financial liabilities ...... 68,683 71,141 Tax liabilities ...... 12,591 13,209 Segment liabilities ...... 33,233 32,048 - of which: ...... Sales ...... 5,673 5,471 GenerationandEnergyManagement ...... 4,467 4,218 Engineering and Innovation ...... 374 363 InfrastructureandNetworks...... 5,825 5,651 Iberia and Latin America(5) ...... 13,500 13,034 International(6) ...... 5,184 4,786 Renewable Energy(7) ...... 1,235 804 ParentCompany ...... 1,166 1,090 Services and Other Activities ...... 1,543 1,612 Eliminations and adjustments ...... (5,734) (4,981)

(1) The figures were restated as a result of the retrospective application of a number of accounting standards, as well as the completion of the process of allocating the cost of the purchase of 25.01% of Endesa to the assets acquired and liabilities assumed. (2) Of which €484 million regarding units classified as “Held for sale” at December 31, 2010 (€485 million at December 31, 2009). (3) Of which €592 million regarding units classified as “Held for sale” at December 31, 2010. (4) Of which €399 million regarding units classified as “Held for sale” at December 31, 2010. (5) Of which €145 million regarding units classified as “Held for sale” at December 31, 2010 (€102 million at December 31, 2009). (6) Of which €26 million regarding units classified as “Held for sale” at December 31, 2010. (7) Of which €14 million regarding units classified as “Held for sale” at December 31, 2010.

F-290 Information on the Consolidated Income Statement Revenues 8.a Revenues from sales and services — €71,943 million

2009 2010 restated 2010-2009 Millions of euro Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies ...... 64,045 56,285 7,760 Revenuesfromthesaleandtransportofnaturalgastoendusers ...... 3,574 2,996 578 Revenuesfromfuelsales ...... 449 301 148 Connection fees for the electricity and gas networks ...... 1,429 1,012 417 Revenuesforcontractworkinprogress ...... 170 420 (250) Othersalesandservices...... 2,276 1,484 792 Total ...... 71,943 62,498 9,445

“Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies” primarily include €9,588 million in revenues from the transport and sale of electricity on the domestic enhanced protection market (€10,458 million in 2009) and €757 million on the safeguard market (€743 million in 2009), €8,491 million in revenues from the sale of electricity on the Power Exchange and to other domestic resellers (€8,743 million in 2009), €7,521 million in revenues from the transport and sale of electricity on the domestic free market (€7,380 million in 2009), and €36,210 million in revenues from the sale and transport of electricity abroad (€28,869 million in 2009). In addition to the change in the method used to consolidate Endesa as from June 2009, revenues from the sale and transport of electricity abroad were affected by the effects (€2,180 million) of the application as from July 1, 2009, of the new rate rules for the Spanish electricity sales and distribution market with the introduction of the Tarifa de Ultimo Recurso (TUR). The changes involved the separate recognition in the income statement of the revenues and costs concerning, respectively, the sale and purchase of electricity, including transport costs, which had previously been offset. “Revenues from the sale and transport of natural gas to end users” came to €3,574 million in 2010 and include €2,244 million in revenues from the sale and transport of natural gas in Italy (€2,139 million in 2009) and sales of natural gas abroad amounting to €1,330 million (€857 million in 2009). “Revenues from fuel sales” came to €449 million in 2010, which includes €179 million in sales of natural gas (€73 million in 2009), while the sale of other fuels amounted to €270 million (€228 million in 2009). “Connection fees for the electricity and gas networks” reflect the impact of the application of IFRIC 18 in 2010 in the amount of €548 million (€327 million in 2009). “Revenues for contract work in progress” refer to engineering and construction work for third parties.

F-291 The table below gives a breakdown of revenues from sales and services by geographical area: 2009 2010 restated Millions of euro Italy ...... 30,767 30,770 Europe...... 27,586 21,548 Americas...... 9,907 8,374 Russia ...... 3,492 1,746 Other ...... 191 60 Total ...... 71,943 62,498

8.b Other revenues — €1,434 million 2009 2010 restated 2010-2009 Millions of euro ReimbursementofstrandedcostsforNigeriangas...... — 145 (145) Costcontributionsandotherfees...... 21 198 (177) Sundry reimbursements ...... 107 176 (69) Gains on disposal of assets ...... 127 363 (236) Gains on sale of property, plant and equipment and intangible assets . . . 33 49 (16) Service continuity bonuses ...... 100 106 (6) Otherrevenues ...... 1,046 827 219 Total ...... 1,434 1,864 (430)

“Reimbursement of stranded costs for Nigerian gas” in 2009 regards amounts received in respect of reimbursement of irrecoverable costs in respect Nigerian gas for generation plants. As from January 1, 2010, the right to reimbursement expired and so no revenues for this item have been recognized for 2010. “Cost contributions and other fees” regard revenues on certain connections to the electricity and gas networks. “Sundry reimbursements” include €42 million paid by customers (€152 million in 2009). “Gains on the disposal of assets” amounted to €127 million in 2010 and largely comprise the gain on the sale of the Spanish high-voltage grid (€55 million) and the gain on the sale of 80% of the gas distribution assets in Spain (€15 million). In 2009 gains on the disposal of assets came to €363 million, accounted for by the gain on the sale of Enel Linee Alta Tensione (ELAT) on April 1, 2009 (€295 million) and the gain on the sale of 51% of SeverEnergia on September 23, 2009 (€68 million).

F-292 Costs 9.a Raw materials and consumables — €36,457 million 2009 2010 restated 2010-2009 Millions of euro Electricity ...... 24,714 23,660 1,054 Fuelandgas ...... 9,422 7,570 1,852 Materials ...... 2,321 1,408 913 Total ...... 36,457 32,638 3,819 – of which capitalized costs for materials ...... (1,057) (926) (131)

Purchases of “electricity” comprise those from the Single Buyer in the amount of €6,066 million (€6,770 million in 2009), purchases from the Energy Markets Operator in the amount of €3,347 million (€4,456 million in 2009) and the effect (€743 million) of the application as from July 1, 2009 of the Tarifa de Ultimo Recurso (TUR), as discussed in the comments on revenues from electricity sales. Purchases of “fuel and gas” include €4,844 million in natural gas purchases (€3,907 million in 2009) and €4,578 million in purchases of other fuels (€3,663 million in 2009).

9.b Services — €13,628 million 2009 2010 restated 2010-2009 Millions of euro Electricity and gas wheeling ...... 8,436 5,407 3,029 Maintenanceandrepairs...... 1,236 1,154 82 Telephone and postal costs ...... 314 281 33 Communicationservices...... 139 143 (4) ITservices...... 177 171 6 Leases and rentals ...... 599 519 80 Other...... 2,727 2,329 398 Total ...... 13,628 10,004 3,624

Service costs for 2010 came to €13,628 million and include the Endesa contribution of €8,255 million (€5,175 million in 2009). The item was affected by the regulatory changes associated with the application as from July 1, 2009, of the Tarifa de Ultimo Recurso (TUR), in the amount of €1,437 million, and the change in the method of consolidation used for Endesa.

F-293 9.c Personnel — €4,907 million 2009 2010 restated 2010-2009 Millions of euro Wagesandsalaries...... 3,370 3,099 271 Social security contributions ...... 839 794 45 Post-employment benefits ...... 116 111 5 Othercosts...... 582 904 (322) Total ...... 4,907 4,908 (1) – of which capitalized ...... (708) (667) (41) Personnel costs were essentially unchanged in 2010 as the increase in compensation taking effect as from January 1, 2009 consequent upon the renewal of the collective bargaining agreement for the Italian electricity industry was offset by the decline in “other costs”, which included charges connected with early retirement incentives in the amount of €388 million (€713 million in 2009). In addition, costs in respect of termination benefits recognized in 2010 amounted to €206 million (€232 million in 2009). The table below shows the average number of employees by category compared with the previous year, and the actual number of employees at December 31, 2010. Average number(1) Headcount(1)

2010 2009 2010-2009 at Dec. 31, 2010(2) Seniormanagers ...... 1,336 1,309 27 1,256 Middlemanagers...... 14,110 8,171 5,939 14,255 Office staff ...... 42,669 45,884 (3,215) 42,166 Workers...... 21,798 22,739 (941) 20,636 Total ...... 79,913 78,103 1,810 78,313

(1) For companies consolidated on a proportionate basis, the headcount corresponds to Enel percentage share of the total. (2) Of which 2,324 in units classified as “Assets held for sale”.

9.d Depreciation, amortization and impairment losses — €6,222 million 2009 2010 restated 2010-2009 Millions of euro Depreciation ...... 4,407 4,054 353 Amortization...... 865 520 345 Impairment losses ...... 950 765 185 Total ...... 6,222 5,339 883

“Depreciation” totaled €4,407 million in 2010 and include the contribution of €2,216 million from Endesa (€1,886 million in 2009). “Impairment losses” in 2010 include €717 million in writedowns of trade receivables (€547 million in 2009), as well as adjustment of the goodwill of Endesa Ireland in the amount of €115 million on the basis of the status of negotiations as of the balance sheet date.

F-294 9.e Other operating expenses — €2,950 million 2009 2010 restated 2010-2009 Millions of euro Provisionsforrisksandcharges...... 393 268 125 Purchase of green certificates ...... 223 426 (203) Taxesandduties...... 1,057 657 400 Losses on disposal of assets ...... 3 2 1 Other...... 1,274 945 329 Total ...... 2,950 2,298 652

“Taxes and duties” in 2010 include system charges (€233 million) allocated under Royal Decree 14/2010 on Spanish renewable resource generation companies.

9.f Capitalized costs — €(1,765) million Capitalized costs consist of €708 million in personnel costs and €1,057 million in materials costs (compared with €667 million and €926 million, respectively, in 2009).

Net income/(charges) from commodity risk management 10. Net income/(charges) from commodity risk management — €280 million Net income from commodity risk management reflects €342 million in income realized on positions closed during the year, partially offset by €62 million in net unrealized charges on open positions in commodity derivatives at December 31, 2010, 2009 2010 restated 2010-2009 Millions of euro Income Unrealized on contracts for differences ...... 3 — 3 Unrealizedonothercontracts...... 588 67 521 Total unrealized income ...... 591 67 524 Realized on two-way contracts for differences ...... 15 — 15 Realizedonothercontracts ...... 1,038 651 387 Total realized income ...... 1,053 651 402 Total income ...... 1,644 718 926 Charges Unrealizedonothercontracts...... (653) (72) (581) Total unrealized income ...... (653) (72) (581) Realized on contracts for differences ...... — (41) 41 Realizedonothercontracts ...... (711) (341) (370) Total realized income ...... (711) (382) (329) Total charges ...... (1,364) (454) (910) NET INCOME/(CHARGES) FROM COMMODITY RISK MANAGEMENT ...... 280 264 16 – of which trading/non-IFRS-IAS hedge derivatives ...... 265 260 5 – of which ineffective portion of CFH ...... —— —

F-295 11. Financial income/(expense) — €(3,198) million Financial income 2009 2010- 2010 restated 2009 Millions of euro Total interest and other income from financial assets (current and non- current): – interest income at effective rate on non-current securities and receivables ...... 35 253 (218) – financial income on non-current securities at fair value through profit orloss ...... 2 3 (1) – interest income at effective rate on short-term financial investments . . . 223 88 135 Total interest and other income from financial assets ...... 260 344 (84) Foreign exchange gains ...... 735 971 (236) Income from derivative instruments: – income from cash flow hedge derivatives ...... 726 374 352 – income from derivatives at fair value through profit or loss ...... 332 1,169 (837) –incomefromfairvaluehedgederivatives...... 76 103 (27) Total income from derivative instruments ...... 1,134 1,646 (512) Income from equity investments ...... 97 199 (102) Other income ...... 350 433 (83) TOTAL FINANCIAL INCOME ...... 2,576 3,593 (1,017) Financial income amounted to €2,576 million, down €1,017 million on the previous year. Financial income from derivatives came to €1,134 million, of which €247 million realized (€240 million in 2009) and €887 million unrealized (€1,406 million in 2009). More specifically, unrealized income in 2009 included the positive effect of €970 million generated by the early exercise of the put option granted to Acciona in the contract of March 26, 2007. The option was exercised with the acquisition by Enel of the 25.01% of Endesa held, directly and indirectly, by Acciona.

F-296 Financial expense 2009 2010 restated 2010-2009 Millions of euro Interest and other charges on financial debt (current and non- current) –interestexpenseonbankloans...... 590 895 (305) – interest on bonds ...... 1,860 1,314 546 –interestexpenseonotherloans ...... 217 207 10 – financial expense on securities at fair value through profit or loss .... — — — –commissionsonunusedlinesofcredit...... 15 2 13 Total interest expense and other charges on financial debt ...... 2,682 2,418 264 Foreign exchange losses ...... 1,244 954 290 Expense on derivative instruments: – expense on cash flow hedge derivatives ...... 514 704 (190) – expense on derivatives at fair vale through profit or loss ...... 482 280 202 –expenseonfairvaluehedgederivatives ...... 13 55 (42) Total expense on derivative instruments ...... 1,009 1,039 (30) Accretion of post-employment and other employee benefits ...... 278 228 50 Accretion of other provisions ...... 252 370 (118) Charges on equity investments ...... 1 52 (51) Other charges ...... 308 273 35 TOTAL FINANCIAL EXPENSE ...... 5,774 5,334 440

Financial expense totaled €5,774 million, an increase of €440 million on 2009. In particular, “interest expense and other charges on financial debt” essentially reflects the full consolidation of Endesa’s debt, as well as the refinancing strategy undertaken in the last quarter of 2009 and continued in 2010 to lengthen the average residual maturity of the debt and replace the Credit Agreement. “Foreign exchange losses” amounted to €1,244 million (€954 million in 2009) and are mainly attributable to the debt denominated in currencies other than the euro, which was hedged with corresponding cross currency interest rate swaps. “Expense on derivative instruments” came to €1,009 million, of which €599 million in realized charges (€540 million in 2009) and €410 million in unrealized charges (€499 million in 2009).

12. Share of income/(expense) from equity investments accounted for using the equity method — €14 million 2009 2010 restated 2010-2009 Millions of euro Income from associates ...... 62 60 2 Expense on associates ...... (48) (6) (42) Total ...... 14 54 (40)

F-297 13. Income taxes — €2,401 million 2009 2010 restated 2010-2009 Millions of euro Currenttaxes...... 2,634 3,079 (445) Specific tax on gains from realignment ...... — 15 (15) Adjustmentsforincometaxesrelatedtoprioryears ...... (106) (293) 187 Deferred tax liabilities ...... (194) (391) 197 Deferred tax assets ...... 67 187 (120) Total ...... 2,401 2,597 (196)

Income taxes for 2010 came to €2,401 million, equal to 29.7% of taxable income, compared with 27.8% in 2009. The estimated tax liability of foreign companies is €804 million (€830 million in 2009). The following table reconciles the theoretical tax rate with the effective rate. 2009 2010 restated Millions of euro Income before taxes ...... 8,074 9,345 Theoreticaltax ...... 2,220 27.5% 2,571 27.5% Permanent differences; effect of different foreign tax rates and minor items...... (302) -3.7% (378) -4.0% Discharge of liability under Law 244/07 ...... — — (21) -0.2% IRES surtax (Decree Law 112/08) ...... 158 2.0% 204 2.2% Difference on estimated income taxes from prior years for Italian companies ...... (48) -0.6% (155) -1.7% Irap ...... 373 4.5% 376 4.0% Total ...... 2,401 29.7% 2,597 27.8%

14. Net income from discontinued operations — €0 million In 2009 the item reports the results, net of the related tax effect, attributable to Enel Rete Gas until the date of its deconsolidation, as have the effects of the disposal of the company on September 30, 2009. More specifically, in addition to the adjustment of the value of the assets (€136 million) carried out in the 1st Quarter of 2009 when the parties reached agreement on the value of the assets and liabilities involved in the sale, these results include the loss (€73 million) on the sale itself. 2010 2009 2010-2009 Millions of euro Enel Rete Gas: Revenues...... — 233 (233) Costs ...... — (186) 186 Operating income ...... — 47 (47) Netfinancialexpense...... — (20) 20 Incometaxes ...... — 24 (24) NetincomeofEnelReteGas ...... — 51 (51) Adjustment of the value of the equity investment and gain/(loss) on the disposal of Enel Rete Gas ...... — (209) 209 Net income from assets acquired for resale ...... —— — NET INCOME FROM DISCONTINUED OPERATIONS ...... — (158) 158

F-298 Information on the Consolidated Balance Sheet Assets Non-current assets 15. Property, plant and equipment — €78,094 million Changes in property, plant and equipment for 2009 and 2010 are shown below: Industrial Assets under and construction Plant and commercial Other Leased Leasehold and Land Buildings machinery equipment assets assets improvements advances Total Millions of euro Cost ...... 310 8,972 91,803 383 1,027 444 141 6,772 109,852 Accumulated depreciation ...... — 4,097 44,702 284 537 147 80 — 49,847 Balance at December 31, 2008 ... 310 4,875 47,101 99 490 297 61 6,772 60,005 Capitalexpenditure..... 3 56 1,390 12 82 29 6 4,649 6,227 Assets entering service...... 62 187 4,041 1 43 56 32 (4,422) — Exchange rate differences ...... 14 (49) 446 (1) 16 7 — 118 551 Change in scope of consolidation ...... 79 106 10,782 (2) 65 59 3 1,382 12,474 Depreciation...... — (241) (3,453) (18) (101) (15) (20) — (3,848) Impairmentlosses ...... — 3 (77) 1 (2) — — — (75) Otherchanges...... 74 460 809 — 76 (62) 2 (16) 1,343 Reclassification from/to “Assets held for sale”...... (3) (9) 205 (5) (117) — — (161) (90) Total changes ...... 229 513 14,143 (12) 62 74 23 1,550 16,582 Cost ...... 539 9,726 109,399 389 1,189 533 184 8,322 130,281 Accumulated depreciation ...... — 4,338 48,155 302 637 162 100 — 53,694 Balance at December 31, 2009 restated ...... 539 5,388 61,244 87 552 371 84 8,322 76,587 Capitalexpenditure..... 16 72 1,619 17 75 284 2 4,290 6,375 Assets entering service...... — 102 3,587 1 36 — 12 (3,738) — Exchange rate differences ...... 21 57 1,385 — 63 23 — 188 1,737 Change in scope of consolidation 3 18 115 1 1 — — 40 178 Depreciation...... — (245) (3,888) (16) (144) (23) (24) — (4,340) Impairmentlosses ...... (7) — (52) — — — — (45) (104) Otherchanges...... 12 (258) 179 1 (87) (7) (3) 91 (72) Reclassification from/to “Assets held for sale”...... (19) (63) (1,868) — 6 — — (323) (2,267) Total changes 26 (317) 1,077 4 (50) 277 (13) 503 1,507 Cost ...... 565 10,115 138,809 409 1,738 756 202 8,825 161,419 Accumulated depreciation ...... — 5,044 76,488 318 1,236 108 131 — 83,325 Balance at December 31, 2010 ... 565 5,071 62,321 91 502 648 71 8,825 78,094

F-299 “Plant and machinery” includes assets to be relinquished with a net carrying amount of €11,148 million (€10,212 million at December 31, 2009), €7,925 million of which related to power generation plants (€7,097 million at December 31, 2009) and €2,615 million to Endesa’s electricity distribution network (€2,558 million at December 31, 2009). The change for the period is attributable to the sale of certain high-voltage electricity distribution assets to Red Eléctrica de España (REE) under the transitional provisions of Spanish Law 17/07. That effect was more than offset by exchange rate differences and capital expenditure for the year. “Leased assets” include certain assets which the Group is using in Spain, France, Greece, Latin America and Slovakia. More specifically, in Spain the assets regard a 25-year tolling contract under which Endesa has access to the generation capacity of a combined cycle plant for which Elecgas has undertaken to transform gas into electricity in exchange for a “toll” at a rate of 9.62%. In France and Greece, they regard wind plants under 15/20-year leases. In Latin America, the assets regard leased power transmission lines and plant (Ralco-Charrúa), under a 20-year lease at a 6.5% rate, as well as a number of combined cycle plants (8-year lease bearing a floating rate). The leased assets in Slovakia essentially regard the sale and lease back agreements for the V1 nuclear power plant at Jaslovske Bohunice and the hydroelectric plant at Gabcikovo. The leasing arrangements were a necessary condition for the start of the privatization of the Slovakian electricity system. The lease for the V1 plant covers the entire remaining useful life of the asset and the period between the end of generation and the start of the decommissioning process, while the lease for the Gabcikovo plant has a 30-year term as from April 2006. The following table reports the minimum lease payments and the related present value. at Dec. 31, 2009 Minimum lease payments Present value Millions of euro 2010 ...... 31 22 2011-2014 ...... 120 93 After 2014 ...... 243 159 Total ...... 394 274

at Dec. 31, 2010 Minimum lease payments Present value Millions of euro 2011 ...... 70 31 2012-2015 ...... 254 102 After 2015 ...... 813 432 Total ...... 1,137 565

F-300 The table below summarizes capital expenditure in 2010 by category. These expenditures, totaling €6,375 million, rose by €148 million compared with 2009. 2010 2009 Millions of euro Power plants: –thermal ...... 1,818 2,005 – hydroelectric ...... 391 341 –geothermal ...... 148 151 –nuclear...... 661 379 –alternativeenergyresources...... 745 640 Total power plants ...... 3,763 3,516 Electricity distribution network ...... 2,520 2,237 Gasdistributionnetwork...... — 82 Land, buildings and other assets and equipment ...... 92 392 TOTAL ...... 6,375 6,227

Capital expenditure on power plants totaled €3,763 million, an increase of €247 million on the previous year. This mainly reflects increased investment in nuclear power plants by the International Division. Capital expenditure for the electricity distribution network totaled €2,520 million, an increase of €283 million year on year. Investment in the gas distribution network fell by €82 million following the sale of the distribution network in Spain. The “change in scope of consolidation” for 2010 mainly concerned acquisitions involving the Renewable Energy Division. The “reclassification from/to assets held for sale” in 2010 essentially includes: Š the assets in respect of the Spanish power transmission grid (€961 million), subsequently sold in December 2010; Š the Enel Maritza East 3 plant (€567 million); Š the natural gas transport assets in Spain (€341 million), subsequently sold in December 2010; Š the share of the property, plant and equipment of Enel Unión Fenosa Renovables (€245 million) that will be sold under the agreement with Gas Natural; Š the plants of Endesa Ireland (€127 million). In 2009, “other changes” included the effect of the allocation of the purchase price of 25.01% of Endesa, as discussed in note 6 of these consolidated financial statements.

F-301 16. Intangible assets — €39,071 million Changes in intangible assets for 2009 and 2010 are shown below: Industrial patents Concessions, Assets and licenses, under intellectual trademarks Service development Development property and similar concession and costs rights rights arrangements Other advances Goodwill Total Millions of euro Cost...... 45 850 8,314 1,372 1,606 298 16,039 28,524 Accumulated amortization...... 13 521 201 638 — — 1,373 Balance at January 1, 2009 restated ...... 32 329 8,113 1,372 968 298 16,039 27,151 Capitalexpenditure ..... 2 54 11 195 45 291 — 598 Assets entering service . . 1 94 1 52 (148) — — Exchange rate differences...... (1) 10 843 582 (58) 1 218 1,595 Change in scope of consolidation...... 3 69 4,381 806 69 43 3,476 8,847 Amortization ...... (2) (183) (231) (151) (104) — — (671) Impairmentlosses...... — — (10) (90) (1) (3) (104) Otherchanges ...... — 62 2,301 45 285 (63) (685) 1,945 Reclassification to “Assets held for sale” ...... — (1) (70) (570) — — (641) Total changes ...... 3 105 7,226 1,477 (371) 123 3,006 11,569 Cost...... 50 1,138 15,771 2,849 1,339 421 19,045 40,613 Accumulated amortization...... 15 704 432 — 742 — — 1,893 Balance at December 31, 2009 restated ...... 35 434 15,339 2,849 597 421 19,045 38,720 Capitalexpenditure ..... 2 119 10 350 49 178 — 708 Assets entering service . . — 167 1 — 58 (226) — — Exchange rate differences...... — 9 1,244 333 6 2 82 1,676 Change in scope of consolidation...... 4 — — — 1 — 41 46 Amortization ...... — (239) (267) (241) (106) — — (853) Impairmentlosses...... — — 1 — (7) (1) (13) (20) Otherchanges ...... — 24 (53) (51) 44 (23) 193 134 Reclassification to “Assets held for sale” ...... (28) (10) (425) — 1 — (878) (1,340) Total changes ...... (22) 70 511 391 46 (70) (575) 351 Cost...... 13 2,087 16,783 4,611 1,442 351 18,470 43,757 Accumulated amortization...... — 1,583 933 1,371 799 — — 4,686 Balance at December 31, 2010 ...... 13 504 15,850 3,240 643 351 18,470 39,071

In 2009, “other changes” included the effect of the allocation of the purchase price of 25.01% of Endesa, as discussed in note 6 of these consolidated financial statements.

F-302 In 2010, the item “reclassification to assets held for sale” essentially regards the value attributed to the concession for the distribution of high-voltage electricity in Spain, which was sold to Red Eléctrica de España. “Industrial patents and intellectual property rights” relate mainly to costs incurred in purchasing software and open-ended software licenses. The most important applications relate to invoicing and customer management, the development of Internet portals and the management of company systems. Amortization is calculated on a straight-line basis over the item’s residual useful life (on average between three and five years). “Concessions, licenses, trademarks and similar rights” include costs incurred by the gas companies and the foreign electricity distribution companies to build up their customer base. Amortization is calculated on a straight-line basis over the average duration of the relationships with the customers acquired or the concessions. The item includes assets with an indefinite useful life in the amount of €10,348 million. The forecast cash flows for each of the electricity distribution concessions in Spain and various Latin American countries are sufficient to recover the value of the intangible asset. “Goodwill” amounted to €18,470 million, a decrease of €575 million over the previous year.

Change in Reclassification at Dec. 31, 2009 scope of Exchange rate to “Assets held Other restated consolidation differences for sale” changes at Dec. 31, 2010 Millions of euro Endesa ...... 15,313 — — (817) 5 14,501 Enel OGK-5 ..... 1,178 — 67 — (3) 1,242 Enel Green Power Group(1) ...... 869 41 22 (46) (20) 866 Slovenské elektrárne...... 697 — — — — 697 EnelEnergia ..... 579 — — — — 579 Enel Distributie Muntenia ...... 228 — (1) — 179 406 Enel Energie Muntenia ...... 58 — — — 31 89 RusEnergoSbyt . . . 42 — 2 — — 44 Nuove Energie . . . 26 — — — — 26 Marcinelle Energie...... 20 — — — — 20 SeverEnergia/Eni Russia...... 18 — (8) — (10) — Enel Maritza East3 ...... 13 — — (13) — — Wisco ...... 2 — — — (2) — Enel Operations Bulgaria...... 2 — — (2) — — Total ...... 19,045 41 82 (878) 180 18,470

(1) Includes Enel Green Power España, Enel Latin America, Enel Panama, Inelec, Enel North America, Enel Unión Fenosa Renovables, Enel Green Power Hellas, Enel Green Power France, Enel Green Power Italia, Enel Green Power Romania and Enel Green Power Bulgaria.

F-303 The “change in the scope of consolidation” is essentially attributable to the recognition of provisional goodwill in respect of the acquisition of Padoma Wind Power. The “reclassification to assets held for sale” essentially regards the goodwill recognized in respect of natural gas distribution operations in Spain (€426 million, related to the disposal of Endesa Gas in December 2010), the assets held by Endesa in Ireland (€312 million) and the assets of Enel Unión Fenosa Renovables due to be divested under the agreements signed with Gas Natural (€46 million). “Other changes” essentially comprises the change in the valuation at period-end of the debt associated with the acquisition of minority stakes (including Enel Distributie Muntenia and Enel Energie Muntenia) under a number of put options granted to minority shareholders as part of the acquisitions of those companies. The recoverable value of the goodwill recognized was estimated by calculating the value in use of the asset using discounted cash flow models, which involve estimating expected future cash flows and applying an appropriate discount rate, selected on the basis of market inputs such as risk-free rates, betas and market risk premiums. More specifically, the cash flows were determined on the basis of the most recent forecasts and the assumptions underlying those forecasts, in line with the Group business plan. To discount certain flows, an explicit period consistent with the time horizon of the business plan was used and the overall length of the period is consistent with the average useful life of the assets or the duration of the concessions. The terminal value was calculated as a perpetuity or annuity with a nominal growth rate equal to the long-term rate of growth in electricity (depending on the country involved) or in any case no higher than the average long-term growth rate of the reference market. The value in use calculated as described above was found to be greater than the amount recognized on the balance sheet. In order to verify the robustness of the value in use of the assets, sensitivity analyses were conducted, which fully supported that value. With specific reference to the main goodwill amounts recognized, sensitivity analyses were conducted for changes in the discount rate (+100 basis points) and the growth rate (-100 basis points) used in determining terminal values. The criteria used to identify the cash generating units were essentially based (in line with management’s strategic and operational vision) on the specific characteristics of their business, on the operational rules and regulations of the markets in which Enel operates and on the corporate organization, including technical and management factors, as well as the level of reporting monitored by management

F-304 The table below reports the balance of main goodwill according to the company to which the cash generating unit belongs, along with the discount rates applied and the time horizon over which the expected cash flows have been discounted.

at Dec. 31, 2010 Explicit Discount rate period Terminal Amount Tax rate Growth rate(1) WACC(2) of cash flows value(3) Millions of euro Endesa – Iberian peninsula(4) ...... 11,241 29.9% 2.1% 5.8% 10 years Perpetuity Endesa – Latina America...... 3,260 29.3% 4.5% 7.6% 10 years Perpetuity Enel OGK-5 ...... 1,242 20% 1.4% 9.8% 10 years Perpetuity Slovenské elektrárne ...... 697 19% 2.0% 5.9% 10 years 20 EnelEnergia...... 579 36.9% 1.6% 5.1% 10 years 10 Enel Romania(5) ..... 495 16% 3.0% 8.3% 10 years Perpetuity Enel Green Power España(6) ...... 385 30% 2.0% 5.7% 5 years 17 Enel North America...... 120 35% 2.0% 5.8% 5 years 22 EnelPanama...... 100 30% 2.5% 7.6% 5 years Perpetuity Inelec...... 92 28% 2.5% 7.8% 5 years Perpetuity Enel Green Power Hellas ...... 70 25% 2.0% 6.0% 10 years Repowering(7) Enel Latin America...... 64 26.5% 2.5% 7.7% 5 years 34 RusEnergoSbyt ..... no terminal 44 20% value 9.1% 13 years — Nuove Energie ...... 26 31.4% 1.6% 5.6% 10 years 22 Enel Green Power France ...... 25 33.3% 2.0% 6.0% 5 years Repowering(7) Marcinelle Energie ...... 20 34% 1.4% 5.3% 10 years 16

(1) Perpetual growth rate of cash flows after explicit period. (2) WACC represents the weighted average capital cost. (3) The terminal value has been estimated on the basis of a perpetuity or an annuity with a rising yield for the years indicated in the column. (4) Goodwill includes the portion referring to Enel Green Power España. (5) Includes all companies operating in Romania. (6) Includes the goodwill of Enel Unión Fenosa Renovables. (7) Terminal value calculated as the perpetual yield of a cash flow that includes the annual investment in repowering of the plants at the end of the explicit period.

F-305 17. Deferred tax assets and liabilities — €6,017 million and €11,147 million The following table details changes in deferred tax assets and liabilities by type of temporary difference and calculated based on the tax rates established by applicable regulations. The table also reports the amount of deferred tax assets that, where allowed, can be offset against deferred tax liabilities.

Increase/ (Decrease) at Dec. 31, taken to Change Reclassification 2009 income in scope of Other Exchange rate to “Assets held at Dec. 31, restated statement consolidation changes differences for sale” 2010

Millions of euro Deferred tax assets: – differences in the value of intangible assets, property, plant and equipment ...... 1,218 (97) 4 17 12 — 1,154 – accruals to provisions for risks and charges and impairment losses with deferred deductibility ...... 2,697 (48) (3) 68 4 — 2,718 – tax losses carried forward...... 93 20 (1) 20 1 — 133 – measurement of financial instruments ...... 808 (174) (2) (226) 9 — 415 –otheritems...... 1,422 232 1 (124) 69 (3) 1,597 Total 6,238 (67) (1) (245) 95 (3) 6,017 Deferred tax liabilities: – differences on non- current and financial assets ...... 1,269 (77) — (266) 129 — 1,055 – income subject to deferredtaxation ..... 104 (75) — — — — 29 – allocation of excess coststoassets...... 8,288 (83) — (16) 16 (202) 8,003 – measurement of financial instruments ...... 561 (187) — (158) — — 216 –otheritems...... 885 228 2 488 264 (23) 1,844 Total ...... 11,107 (194) 2 48 409 (225) 11,147

Non-offsettable deferred tax assets ...... 824 Non-offsettable deferred tax liabilities ...... 4,786 Offsettable net deferred tax assets ...... 1,168 As of December 31, 2010, deferred tax assets totaled €6,017 million, a decrease of €221 million compared with December 31, 2009. It should also be noted that no deferred tax assets were recorded in relation to prior tax losses in the amount of €1,133 million because, on the basis of current estimates of future taxable income, it is not certain that such assets could be recovered. More specifically, the losses are essentially attributable to the holding companies located in the Netherlands (€608 million).

F-306 Deferred tax liabilities, which totaled €11,147 million at December 31, 2010, (€11,107 million at December 31, 2009), essentially include the determination of the tax effects of the value adjustments to net assets acquired as part of the final allocation of the cost of acquisitions made in the various years and the deferred taxation in respect of the differences between depreciation charged for tax purposes, including accelerated depreciation, and depreciation based on the estimated useful lives of assets.

18. Equity investments accounted for using the equity method — €1,033 million Equity investments in associated companies accounted for using the equity method are as follows: at Dec. 31, 2009 restated Change in Reclassification at Dec. 31, 2010 scope of Capital to assets held % holding consolidation increases Income effect for sale Other changes % holding Millions of euro SeverEnergia . 287 19.6% — — (5) — 18 300 19.6% Enel Rete Gas ...... 144 19.9% — — 23 — (18) 149 19.9% Elica2 ...... 133 30.0% — 41 — — (8) 166 30.0% LaGeo...... 85 36.2% — — 13 — (11) 87 36.2% Nubia 2000 . . — — 30 — — — — 30 20.0% Elcogas ..... 24 40.9% — — (28) — 4 — 45.2% Tecnatom.... 17 45.0% — — 2 — 3 22 45.0% CESI...... 13 25.9% — — 2 — — 15 25.9% Idrosicilia . . . 9 40.0% (9) — — — — — 1.0% Other ...... 317 — — 7 (20) (40) 264 Total ...... 1,029 21 41 14 (20) (52) 1,033

The “change in the scope of consolidation” regards the recognition of the holding of 20% in Nubia 2000 following the disposal of 80% of that company (which operates in the natural gas transport sector in the Iberian peninsula), as well as the disposal of 39% of Idrosicilia. The “reclassification to assets held for sale” regards the holding in Trade Wind, which was reclassified to that account as a result of management decisions concerning the possible sale of the investment. The holdings in SeverEnergia and Enel Rete Gas are accounted for using the equity method in view of the governance mechanisms of those companies, which give Enel a significant influence over company operations. The main income statement and balance sheet data for the principal equity investments in associates are reported in the following table. at Dec. 31, 2009 at Dec. 31, 2010 restated Net income/ Net income/ Assets Liabilities Revenues (loss) Assets Liabilities Revenues (loss) Millions of euro SeverEnergia...... 2,445 947 — 25 2,229 788 — 42 EnelReteGas...... 2,086 1,350 397 19 2,090 1,265 317 52 Elica2 ...... 13 2 — — 10 1 — — LaGeo...... 314 26 96 34 295 24 95 39 Nubia 2000 ...... 1,041 831 5 4 — — — — Elcogas ...... 311 306 73 (47) 370 312 142 9 Tecnatom...... 100 52 82 5 96 54 86 16 CESI...... 119 60 82 10 113 65 81 8

F-307 19. Non-current financial assets — €4,701 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Equityinvestmentsinothercompanies ...... 1,036 608 428 Other securities designated at fair value through profit orloss ...... 104 108 (4) Derivativecontracts ...... 821 277 544 Advances for acquisition of equity investments ...... — 11 (11) Service concession arrangements ...... 195 70 125 Prepaid non-current financial expense ...... 82 14 68 Other receivables: – financial receivables for the Spanish electrical systemdeficit...... — 6,288 (6,288) – other financial receivables ...... 2,463 1,648 815 Total other receivables ...... 2,463 7,936 (5,473) TOTAL ...... 4,701 9,024 (4,323)

“Equity investments in other companies” includes investments measured at fair value in the amount of €859 million, while the remainder of €177 million regarded investments whose fair value could not be readily determined and were therefore recognized at cost less impairment losses. In particular, the fair value of listed companies was determined with reference to the market value of their shares at the end of the period, whereas the fair value of unlisted companies was determined on the basis of what is felt to be a reliable valuation of their significant balance sheet items. At December 31, 2010, “Other securities designated at fair value through profit or loss” are essentially accounted for by investments in investment funds; at December 31, 2009, it included bonds, government securities and investment funds. The following table breaks down the two items discussed above on the basis of the hierarchy of inputs used in determining fair value, as specified in the amendments to IFRS 7: at Dec. 31, 2010 Fair value Level 1 Level 2 Level 3 Millions of euro Equityinvestmentsinothercompanies ...... 859 849 2 8 Other securities designated at fair value through profit orloss...... 104 104 — — The following table shows changes in equity investments measured using level 3 inputs: Millions of euro Balance at January 1, 2010 ...... 7 Netincome/lossinincomestatement...... 1 Balance at December 31, 2010 ...... 8

F-308 Equity investments in other companies break down as follows: at Dec. 31, 2010 at Dec. 31, 2009 restated Change % holding % holding Millions of euro BayanResources ...... 500 10.00% 138 10.00% 362 Terna...... 325 5.12% 306 5.12% 19 Echelon...... 23 7.36% 24 7.36% (1) TriAlphaEnergy ...... 8 4.96% 8 4.96% — Other...... 180 — 132 — 48 Total ...... 1,036 608 428

The following table shows the notional amounts and the fair value of derivative contracts classified under non-current financial assets. Notional amount Fair value at Dec. 31, 2010 at Dec. 31, 2009 at Dec. 31, 2010 at Dec. 31, 2009 2010-2009 Millions of euro Cash flow hedge derivatives: –interestrates ...... 1,716 2,123 7 10 (3) –exchangerates...... 6,698 2,566 671 219 452 – commodities ...... 397 230 46 19 27 Total ...... 8,811 4,919 724 248 476 Fair value hedge derivatives: –interestrates ...... 83 98 9 8 1 –exchangerates...... 264 22 15 2 13 Total ...... 347 120 24 10 14 Trading derivatives –interestrates ...... 75 75 8 9 (1) –exchangerates...... 109 103 5 4 1 – commodities ...... 259 71 60 6 54 Total ...... 443 249 73 19 54 TOTAL ...... 9,601 5,288 821 277 544

At December 31, 2010, the notional amount of the cash flow hedge derivative contracts classified as non-current financial assets came to €8,811 million, with the corresponding fair value of €724 million. The exchange rate cash flow hedge derivatives are essentially related to transactions hedging the £1.1 billion tranche of the bond issued as part of the Global Medium-Term Notes program on June 13, 2007, as well as the yen-denominated private placement issued by Enel Finance International (¥20 billion). The rise in the fair value was mainly due to the depreciation of the euro against the other main currencies. Commodity derivates include: Š derivatives on energy with a fair value of €12 million classified as cash flow hedges; Š derivatives on fuels with a fair value of €34 million classified as cash flow hedges; Š derivatives held by Endesa with a fair value of €50 million;

F-309 Š “two-way contracts for differences”, classified as trading derivatives, with a fair value of €5 million; Š embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €5 million. The following table reports the fair value balances of derivatives broken down by type of measurement inputs used. at Dec. 31, 2010 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives –interestrates...... 7 — 7 — –exchangerates...... 671 — 671 — – commodities ...... 46 46 Total ...... 724 — 724 — Fair value hedge derivatives –interestrates...... 9 — 9 — –exchangerates...... 15 — 15 — Total ...... 24—24— Trading derivatives –interestrates...... 8 — 8 — –exchangerates...... 5 — 5 — – commodities ...... 60 15 45 Total ...... 73 15 58 — TOTAL ...... 821 15 806 —

“Service concession arrangements” regard fees due from the grantor for the construction and/or improvement of infrastructure used to provide public services on a concession basis and recognized in application of IFRIC 12. “Financial receivables for the Spanish electrical system deficit” at December 31, 2009, refer to the long-term portion of the deficit financed by Endesa. The deficit is created in Spain’s regulated market when rate revenues are not sufficient to cover the costs of the system itself. The change in the period is due to the classification of the receivable under current financial assets as a result of the mechanism established by the Spanish government to allow companies to assign such receivables to a specially created securitization fund (“Fondo de Titulización”). At December 31, 2010, “Other financial receivables” include Slovenské elektrárne’s receivables (in the amount of €507 million) in respect of the State Decommissioning Fund following reclassification from “Other non-current assets” after a number of clarifications were issued concerning the use of the funds, the amount available and the financing of the existing deficit, and the possibilities and eligibility for using them.

F-310 The table below reports the carrying amount and the fair value of long-term financial receivables and securities (€11,857 million), including the portion due within twelve months (€9,290 million included under other short-term financial receivables). at Dec. 31, 2010 at Dec. 31, 2009 Carrying Fair Carrying Fair amount value amount value

Millions of euro Long-term financial receivables and securities ...... 11,857 11,857 8,811 8,811 Total ...... 11,857 11,857 8,811 8,811

20. Other non-current assets — €1,062 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 142 188 (46) Receivables due from State Decommissioning Fund . . . — 483 (483) Other long-term receivables: – net assets of employee benefit programs ...... 112 138 (26) – other receivables ...... 808 167 641 Total other long-term receivables ...... 920 305 615 TOTAL ...... 1,062 976 86

“Receivables due from Electricity Equalization Fund and similar bodies” at December 31, 2010 include only the receivable in respect of the Electricity Equalization Fund claimed by the Italian distribution companies. “Receivables due from the State Decommissioning Fund”, attributable entirely to the payments by Slovenské elektrárne as a nuclear generation operator to the Slovakian national nuclear decommissioning fund and equal to €483 million at December 31, 2009, were reclassified at December 31, 2010, under non-current financial assets, as discussed in note 19. “Other receivables” for 2010 include the receivable recognized by Enel Distribuzione concerning the recognition of remuneration in rates for the early replacement of electromechanical meters. “Net assets of employee benefit programs” reports assets backing a number of employee benefit plans for Endesa employees, net of actuarial liabilities.

F-311 Current assets 21. Inventories — €2,803 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Raw materials, consumables and supplies: –fuel ...... 1,847 1,705 142 –materials,equipmentandotherinventories ...... 844 702 142 Total ...... 2,691 2,407 284 Buildingsavailableforsale...... 87 88 (1) Advances...... 25 5 20 TOTAL ...... 2,803 2,500 303

Raw materials, consumables and supplies consist of fuel inventories to cover the requirements of the generation companies and trading activities, as well as materials and equipment for plant operation, maintenance and construction. The buildings available for sale are related to remaining units from the Group’s real estate portfolio and are primarily civil buildings. The decrease is essentially related to sales made during the period.

22. Trade receivables — €12,505 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Customers: – sale and transport of electricity ...... 10,343 11,020 (677) –distributionandsaleofnaturalgas ...... 1,788 1,284 504 – other activities ...... 264 630 (366) Total ...... 12,395 12,934 (539) Trade receivables due from associates ...... 45 44 1 Receivables for contract work in progress ...... 65 32 33 TOTAL ...... 12,505 13,010 (505)

Trade receivables from customers are recognized net of allowances for doubtful accounts, which totaled €1,349 million at the end of the year, as compared with an opening balance of €934 million. The table below shows the changes in these allowances. Millions of euro Total at January 1, 2009 ...... 726 Accruals...... 547 Utilization ...... (298) Otherchanges ...... (41) Total at December 31, 2009 restated ...... 934 Accruals...... 717 Utilization ...... (214) Otherchanges ...... (88) Total at December 31, 2010 ...... 1,349

F-312 23. Tax receivables — €1,587 million Tax receivables at December 31, 2010, totaled €1,587 million and are essentially related to income tax credits in the amount of €819 million (€523 million at December 31, 2009), credits for indirect taxes in the amount of €446 million (€450 million at December 31, 2009), and receivables for other taxes and tax surcharges in the amount of €211 million (€240 million at December 31, 2009).

24. Current financial assets — €11,922 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Short-term portion of long-term financial receivables ...... 9,290 767 8,523 Receivables for factoring advances ...... 319 304 15 Derivativecontracts ...... 845 770 75 Other securities ...... 95 97 (2) Financial receivables and cash collateral ...... 718 893 (175) Other ...... 655 1,355 (700) Total ...... 11,922 4,186 7,736

“Short-term portion of long-term financial receivables” essentially consists of the financial receivable in respect of the Spanish electricity system deficit in the amount of €9,186 million (€739 million at December 31, 2009) and reclassified to this item following the establishment of a mechanism to allow receivables to be collected (in addition to direct reimbursement) by assigning them to a special securitization fund (in the amount of €8,467 million) established by the Spanish government. The following table reports the notional amounts and the fair values of the derivative contracts, grouped by type and designation. Notional amount Fair value at Dec. 31, 2010 at Dec. 31, 2009 at Dec. 31, 2010 at Dec. 31, 2009 2010-2009 Millions of euro Cash flow hedge derivatives: –interestrates ...... 375 508 1 1 — –exchangerates...... 957 1,385 33 47 (14) – commodities ...... 2,127 649 253 66 187 Total ...... 3,459 2,542 287 114 173 Fair value hedge derivatives: –interestrates ...... 15 140 — — — Total ...... 15 140 — — — Trading derivatives: –exchangerates...... 2,157 1,284 50 31 19 – commodities ...... 17,185 13,713 508 625 (117) Total ...... 19,342 14,997 558 656 (98) TOTAL ...... 22,816 17,679 845 770 75

F-313 The amount of exchange rate derivatives classified as cash flow hedges is attributable mainly to exchange rate hedges connected with commodities prices. The rise in the notional amount and fair value of trading derivatives on exchange rates is mainly associated with normal operations. Commodity derivatives regard: Š derivatives held by Endesa with a fair value of €60 million classified as cash flow hedges; Š “two-way contracts for differences”, classified as cash flow hedges, with a fair value of €9 million; Š other derivatives on energy, classified as cash flow hedges, with a fair value of €11 million; Š derivatives on fuels (gas and coal), classified as cash flow hedges, with a fair value of €173 million; Š commodity derivatives related to fuels classified as trading derivatives, with a fair value of €455 million; Š “two-way contracts for differences”, with a fair value of €33 million; Š trading transactions on energy and other commodities, with a fair value of €17 million; Š embedded derivatives related to energy purchase and sale contracts in Slovakia, with a fair value of €3 million. The following table reports the fair value balances of derivatives broken down by measurement inputs used, as provided for under the amendments of IFRS 7. at Dec. 31, 2010 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives –interestrates...... 1 — 1 — –exchangerates...... 33 — 33 — – commodities ...... 253 15 238 Total ...... 287 15 272 — Trading derivatives –exchangerates...... 50 — 50 — – commodities ...... 508 101 407 Total ...... 558 101 457 — TOTAL ...... 845 116 729 —

“Other securities” consist entirely of securities measured at fair value and classified as Level 1. At December 31, 2009, the item “Other” included a number of financial receivables associated with the sale of SeverEnergia (€327 million) that were collected in 2010.

25. Cash and cash equivalents — €5,164 million Cash and cash equivalents, detailed in the table below, are not restricted by any encumbrances, apart from €171 million (€217 million at December 31, 2009) primarily in respect of deposits pledged to secure transactions. at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Bank and post office deposits ...... 5,158 4,164 994 Cash and cash equivalents on hand ...... 6 6 — Total ...... 5,164 4,170 994

F-314 26. Other current assets — €2,176 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Receivables due from Electricity Equalization Fund and similar bodies ...... 630 2,047 (1,417) Receivable due from employees ...... 41 44 (3) Receivables due from others ...... 1,289 1,281 8 Accruedoperatingincomeandprepaidexpenses...... 216 118 98 Total ...... 2,176 3,490 (1,314)

“Receivables due from Electricity Equalization Fund and similar bodies” include receivables in respect of the Italian system in the amount of €479 million, essentially from the application of equalization mechanisms to electricity purchases (€764 million at December 31, 2009), and the Spanish system in the amount of €151 million (€1,283 million at December 31, 2009). Including the portion of receivables classified as long-term (€142 million), operating receivables due from the Electricity Equalization Fund and similar bodies at December 31, 2010, amounted to €772 million (€2,235 million at December 31, 2009), offset by payables of €2,519 million (€3,058 million at December 31, 2009).

Assets held for sale 27. Assets held for sale — €1,618 million Changes in the item during the year are reported in the following table. Reclassification from Disposals and at Dec. 31, 2009 current and change in scope of Other at Dec. 31, restated non-current assets consolidation changes 2010 Millions of euro Property, plant and equipment...... 283 2,267 (1,674) 141 1,017 Intangible assets . . . 105 462 (515) (7) 45 Goodwill ...... — 878 (600) (20) 258 Deferred tax assets ...... 11 7 (9) 6 15 Other non-current assets ...... 53 24 — (51) 26 Inventories...... 22 26 (2) 2 48 Trade receivables . . 52 82 (18) (2) 114 Cash and cash equivalents...... 22 137 (9) (67) 83 Other current assets ...... 24 32 (48) 4 12 Total ...... 572 3,915 (2,875) (6) 1,618

Assets held for sale at December 31, 2010 amounted to €1,618 million and essentially regard the assets of the Bulgarian companies (€722 million), certain assets held by Endesa in Ireland and Latin America (€521 million), as well as the assets of Enel Unión Fenosa Renovables (€355 million), which will be divested under the agreement signed with Gas Natural on July 30, 2010. At December 31, 2009 the item reported assets owned by Endesa in Greece and Brazil and a holding of 1% in Red Eléctrica de España, as well as Endesa renewable energy assets in the residual amount of €3 million that had yet to be transferred to Acciona pending the conclusion of the authorization process.

F-315 Liabilities and shareholders’ equity Equity attributable to the shareholders of the Parent Company 28. Equity attributable to the shareholders of the Parent Company — €37,861 million Share capital — €9,403 million At December 31, 2010 (as at December 31, 2009), the share capital of Enel SpA — considering no options were exercised as part of stock option plans in 2010 — amounted to €9,403,357,795, represented by 9,403,357,795 ordinary shares with a par value of €1.00 each. At the same date, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, no shareholders held more than 2% of the total share capital, apart from the Ministry for the Economy and Finance, which holds 31.24%, Blackrock Inc, which holds a 2.74% stake wholly owned by its subsidiaries, and Natixis SA (with 2.07%). Compared with the previous year, the Ministry for the Economy and Finance received 17.36% of Enel SpA share capital from its subsidiary Cassa Depositi e Prestiti (thereby increasing its direct holding from 13.88% to 31.24%) as a result of the share exchange provided for under the Decree of the Minister for the Economy and Finance of November 30, 2010, published in the Gazzetta Ufficiale on December 16, 2010.

Other reserves — €10,791 million Share premium reserve — €5,292 million Legal reserve — €1,881 million The legal reserve is formed of the part of net income that, pursuant to Article 2430 of the Civil Code, cannot be distributed as dividends.

Reserve from translation of financial statements in currencies other than euro — €456 million The increase in this aggregate for the year is attributable to the net depreciation of the functional currency against the foreign currencies used by subsidiaries.

Reserve from measurement of financial instruments — €80 million This item includes net gains recognized directly in equity resulting from the measurement of cash flow hedging derivatives, as well as unrealized gains arising in respect of the fair value measurement of financial assets.

Reserve from disposal of holdings without loss of control — €796 million This item reports the gain posted on the public offering of Enel Green Power shares, net of expenses associated with the disposal (€95 million) and the related taxation (€43 million). The reserve will only be released to income if control of Enel Green Power is lost.

Reserve from equity investments accounted for using the equity method — €24 million The reserve reports the share of comprehensive income to be recognized directly in income for companies accounted for using the equity method.

F-316 The table below shows the changes in gains and losses recognized directly in equity, including non- controlling interests, with specific reporting of the related tax effects. Gains/(Losses) Released at Dec. 31, 2009 recognized in equity to income restated for the year statement Taxes at Dec. 31, 2010 Millions of euro Gains/(Losses) on change in the fair value of the effective portion of CFH derivatives on energy commodity prices and exchange rates (IAS39)...... 495 175 105 (115) 660 Gains/(Losses) on change in the fair value of the effective portion of CFH derivatives on interest and exchange rates(IAS39)...... (1,459) (85) 210 17 (1,317) OCI of companies accounted for using the equity method...... 8 16 — — 24 Reserve for fair value of financial investments availableforsale...... 321 380 6 (2) 705 Exchange rate differences ..... (983) 2,323 — — 1,340 Net income on disposal of holdings without loss of control ...... — 839 — (43) 796 Total gains/(losses) recognized in equity ...... (1,618) 3,648 321 (143) 2,208

F-317 Non-current liabilities 29. Long-term loans (including the portion falling due within 12 months) — €55,439 million The aggregate includes long-term payables in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within twelve months. The following table shows long-term debt and repayment schedules at December 31, 2010, grouped by loan and interest rate type.

Portion at Dec. 31, at Dec. 31, falling due 2010 2009 at more Maturing in Nominal Current than Maturing Balance value Balance portion 12 months 2012 2013 2014 2015 Beyond

Millions of euro Bonds: –listed,fixedrate.....2011-2097 21,224 21,420 19,308 1,156 20,068 1,151 1,929 354 1,224 15,410 – listed, floating rate . . . 2011-2029 6,690 6,740 5,645 607 6,083 1,034 134 1,184 1,425 2,306 – unlisted, fixed rate . . . 2011-2039 6,426 6,437 5,965 35 6,391 181 747 1,017 — 4,446 – unlisted, floating rate ...... 2011-2032 1,915 1,915 2,067 56 1,859 58 59 61 63 1,618 Total ...... 36,255 36,512 32,985 1,854 34,401 2,424 2,869 2,616 2,712 23,780 Bank loans: –fixedrate ...... 2011-2046 735 744 441 33 702 93 58 12 12 527 –floatingrate...... 2011-2035 13,962 14,070 19,841 871 13,091 4,736 751 3,111 619 3,874 – use of revolving creditlines ...... 2011-2016 1,836 1,836 2,788 45 1,791 1,451——— 340 Total ...... 16,533 16,650 23,070 949 15,584 6,280 809 3,123 631 4,741 Preference shares: –fixedrate ...... — — — — ————— — –floatingrate...... 2013(1) 1,474 1,500 1,463 — 1,474 — 1,474 — — — Total ...... 1,474 1,500 1,463 — 1,474 — 1,474 — — — Non-bank loans: –fixedrate ...... 2011-2029 773 773 627 74 699 83 51 49 40 476 –floatingrate...... 2011-2028 404 404 614 122 282 68 79 42 45 48 Total ...... 1,177 1,177 1,241 196 981 151 130 91 85 524 TOTAL ...... 55,439 55,839 58,759 2,999 52,440 8,855 5,282 5,830 3,428 29,045

(3) The preference shares issued by Endesa Capital Finance LLC are perpetual, with an option for early redemption at par as from 2013. The balance for bonds is stated net of €425 million relating to the unlisted floating-rate “Special series of bonds reserved for employees 1994-2019”, which the Parent Company holds in portfolio, while Enel.Re holds bonds issued by Enel SpA totaling €30 million.

F-318 The table below reports long-term financial debt by currency and interest rate.

Long-term financial debt by currency and interest rate at Dec. 31, 2010 at Dec. 31, 2009 at Dec. 31, 2010 Nominal Current average Current effective Balance value Balance interest rate interest rate Millions of euro Euro ...... 38,699 38,996 42,512 3.20% 3.38% USdollar...... 8,444 8,485 8,266 5.93% 6.30% Pound sterling ...... 4,350 4,403 4,210 5.83% 5.87% Japaneseyen...... 184 184 150 3.25% 3.28% Russianruble ...... 220 220 116 8.50% 9.88% Chileanpeso/UF ...... 765 771 649 7.35% 7.91% Brazilian real ...... 1,073 1,078 1,233 10.65% 10.96% Colombianpeso...... 1,156 1,156 1,099 7.80% 7.80% Peruviansol ...... 366 366 338 6.20% 6.20% Othercurrencies...... 182 180 186 Total non-euro currencies .... 16,740 16,843 16,247 TOTAL ...... 55,439 55,839 58,759

Long-term financial debt denominated in currencies other than the euro increased by €493 million. The change is largely attributable to the general weakening of the euro against the other main currencies. However, that change is essentially figurative as it was generated by debt denominated in currencies other than the euro (hedged by corresponding cross currency interest rate swaps) and the debt of Group companies whose functional currency is not the euro.

Change in the nominal value of long-term debt at Dec. 31, at Dec. 31, 2009 2010 Change in Reclassification Nominal Change in scope of New Exchange rate to liabilities Nominal value Repayments own bonds consolidation financing differences held for sale value

Millions of euro Bonds ...... 33,192 (942) (73) — 3,246 1,089 — 36,512 Bank loans . . . 23,279 (8,247) — (236) 2,150 119 (415) 16,650 Preference shares...... 1,500 — — — — — — 1,500 Other loans . . . 1,241 (348) — 121 101 62 — 1,177 Total financial debt ...... 59,212 (9,537) (73) (115) 5,497 1,270 (415) 55,839

Compared with December 31, 2009, the nominal value of long-term debt at December 31, 2010, decreased by €3,373 million, which is the net effect of €9,537 million in repayments and redemptions, €5,497 million in new financing, €115 million arising from changes in the scope of consolidation, €73 million due to changes in own bond holdings, €1,270 million in exchange rate losses and €415 million from the reclassification to liabilities held for sale. The main repayments and redemptions for the period concerned bonds in the amount of €942 million, the repayment of maturing bank loans in the amount of €8,247 million, as well as non- bank loans in the amount of €348 million.

F-319 More specifically, the main bonds maturing in 2010 included: Š €648 million related to bonds issued by the Endesa Group, which were repaid in 2010; Š €225 million related to bonds issued by Enel Investment Holding BV. Repayments of bank loans made during the year were the following: Š €3,000 million in voluntary repayments following the issue of bonds for retail investors by Enel SpA, of which: Š €1,484 million related to the tranche maturing in 2012; Š €1,042 million related to the tranche maturing in 2014; Š €474 million related to the tranche maturing in 2016; Š €2,000 million in respect of a syndicated credit line negotiated by Endesa in 2009 and maturing in 2011, which was repaid early; Š €500 million in respect of the 5-year €5 billion revolving credit facility obtained in November 2005 and extinguished early in April; Š €1,913 million in respect of the early repayment of the Endesa revolving credit line; Š €834 million related to other bank loans of Group companies maturing in 2010. The main financing contracts finalized in 2010 included: Š on March 26, 2010, OGK-5 signed a loan contract with the European Investment Bank for €250 million, falling due in 15 years; Š on April 19, 2010, Enel agreed a 5-year revolving credit facility for €10 billion to replace in part a €5 billion revolving credit facility that would have expired in November 2010. The new credit line can be used by Enel and by Enel Finance International SA (with Enel SpA guarantee) and gives the Group a highly flexible instrument for its treasury operations, to be used in managing working capital; Š on June 3, 2010, Enel Finance International renewed its commercial paper program, which is guaranteed by Enel SpA, increasing its amount from €4 billion to €6 billion; Š on December 9, 2010, Enel Green Power SpA signed a loan contract with the European Investment Bank for €440 million, falling due in 2030. Š in December 2010, Endesa obtained bilateral revolving credit lines totaling €1,075 million, falling due in 2016. In addition, the reclassification to liabilities held for sale mainly includes the long-term debt of Enel Maritza East 3 and Enel Unión Fenosa Renovables, for a total of €415 million. The main financing transactions in 2010 include: Š the issue on February 26, 2010, by Enel SpA of a pan-European multi-tranche bond for retail investors totaling €3,000 million, with the following characteristics: Š €2,000 million fixed-rate 3.5% bond maturing on February 26, 2016; Š €1,000 million floating-rate bond maturing on February 26, 2016. Š bonds issued locally by the Enersis Group totaling €125 million; Š an increase in drawings by Endesa on committed revolving credit facilities in the amount of €1,551 million;

F-320 Š the use by Enel Green Power of a subsidized loan by Simest to finance the Palo Viejo project in Guatemala in the amount of €44 million; Š the use by OGK-5 of bank loans issued by Community bodies in the amount of €64 million; Š the use by Enel Green Power of a loan from the European Investment Bank in the amount of €300 million. The following table compares the carrying amount and the fair value of long-term debt, including the portion falling due within twelve months, broken down by category. For listed debt instruments, the fair value is given by official prices. For unlisted instruments the fair value is determined using appropriate valuation models for each category of financial instrument and market data at the closing date of the year, including Enel Spa’s credit spreads. at Dec. 31, 2010 at Dec. 31, 2009 Carrying amount Fair value Carrying amount Fair value Millions of euro Bonds: –fixedrate ...... 27,650 29,291 25,273 26,712 –floatingrate...... 8,605 8,789 7,712 8,012 Total ...... 36,255 38,080 32,985 34,724 Bank loans: –fixedrate ...... 735 728 441 480 –floatingrate...... 15,798 15,968 22,629 23,395 Total ...... 16,533 16,696 23,070 23,875 Preference shares: –floatingrate...... 1,474 1,500 1,463 1,388 Total ...... 1,474 1,500 1,463 1,388 Non-bank loans: –fixedrate ...... 773 792 627 609 –floatingrate...... 404 405 614 640 Total ...... 1,177 1,197 1,241 1,249 TOTAL ...... 55,439 57,473 58,759 61,236

F-321 The following tables show the changes in long-term loans for the period, distinguishing current amounts from amounts falling due at more than twelve months.

Long-term loans (excluding current portion) Carrying amount at Dec. 31, 2010 at Dec. 31, 2009 2010-2009 Millions of euro Bonds: –fixedrate...... 26,459 24,689 1,770 –floatingrate...... 7,942 7,200 742 Total ...... 34,401 31,889 2,512 Bank loans: –fixedrate...... 702 375 327 –floatingrate...... 14,882 21,257 (6,375) Total ...... 15,584 21,632 (6,048) Preference shares: –fixedrate...... —` — — –floatingrate...... 1,474 1,463 11 Total ...... 1,474 1,463 11 Non-bank loans: –fixedrate...... 699 401 298 –floatingrate...... 282 465 (183) Total ...... 981 866 115 TOTAL ...... 52,440 55,850 (3,410)

Current portion of long-term loans Carrying amount at Dec. 31, 2010 at Dec. 31, 2009 2010-2009 Millions of euro Bonds: –fixedrate...... 1,191 584 607 –floatingrate...... 663 512 151 Total ...... 1,854 1,096 758 Bank loans: –fixedrate...... 33 66 (33) –floatingrate...... 916 1,372 (456) Total ...... 949 1,438 (489) Non-bank loans: –fixedrate...... 74 226 (152) –floatingrate...... 122 149 (27) Total ...... 196 375 (179) TOTAL ...... 2,999 2,909 90

F-322 At December 31, 2010, 39% (51% at December 31, 2009) of net financial debt paid floating interest rates. Taking account of cash flow hedges of interest rates considered effective pursuant to the IFRS–EU, 14% of the debt was exposed to interest rate risk at December 31, 2010 (26% at December 31, 2009). If account is also taken of interest rate derivatives used as hedges but which do not qualify for hedge accounting, the residual exposure of net financial debt to interest rate risk falls even lower, to 7% (20% at December 31, 2009). The Group’s main long-term financial debts are governed by covenants containing undertakings by the borrowers (Enel SpA, Endesa and the other Group companies) and in some cases Enel SpA as guarantor that are commonly adopted in international business practice. The main covenants governing Enel’s debt regard the bond issues carried out within the framework of the Global Medium-Term Notes program, loans granted by the European Investment Bank (EIB) and Cassa Depositi e Prestiti, the Credit Agreement 2007, the Credit Agreement 2009 and the €10 billion revolving line of credit agreed in April 2010. At the same time, the €5 billion revolving line of credit was extinguished. To date none of the covenants have been triggered. The commitments in respect of the bond issues in the Global Medium-Term Notes program can be summarized as follows: Š negative pledge clauses under which the issuer may not establish or maintain (except under statutory requirement) mortgages, liens or other encumbrances on all or part of its assets to secure any listed bond or bond for which listing is planned unless the same guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities constitute a direct, unconditional and unsecured obligation of the issuer and are issued without preferential rights among them and have at least the same seniority as other present and future bonds of the issuer; Š specification of default events, whose occurrence (e.g. insolvency, failure to pay principle or interest, initiation of liquidation proceedings, etc.) constitutes a default; under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) issued by the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least 10% of gross consolidated revenues or total consolidated assets) constitutes a default in respect of the liability in question, which becomes immediately repayable; Š early redemption clauses in the event of new tax requirements, which permit early redemption at par of all outstanding bonds. The main covenants governing the loans granted to a number of Enel Group companies by the EIB can be summarized as follows: Š negative pledge clauses, under which Enel undertakes not to establish or grant to third parties additional guarantees or privileges with respect to those already established in the individual contracts by the company or subsidiaries of the Enel Group, unless an equivalent guarantee is extended equally or pro rata to the loans in question; Š clauses that require the guarantor (whether Enel SpA or banks acceptable to the EIB) to maintain its rating above a specified grade; in the case of guarantees provided by Enel SpA, the Group’s equity may not fall below a specified level; Š material changes clauses, under which the occurrence of a specified event (mergers, spin-offs, disposal or transfer of business units, changes in company control structure, etc.) gives rise to the consequent adjustment of the contract, without which the loan shall become repayable immediately without payment of any commission; Š requirements to report periodically to the EIB;

F-323 Š requirement for insurance coverage and maintenance of property, possession and use of the works, plant and machinery financed by the loan over the entire term of the agreement; Š contract termination clauses, under which the occurrence of a specified event (serious inaccuracies in documentation presented in support of the contract, failure to repay at maturity, suspension of payments, insolvency, special administration, disposal of assets to creditors, dissolution, liquidation, total or partial disposal of assets, declaration of bankruptcy or composition with creditors or receivership, substantial decrease in equity, etc.) triggers immediate repayment. In 2009 Cassa Depositi e Prestiti SpA granted a loan to Enel Distribuzione SpA. The main covenants governing the loan and the guarantee issued by Enel SpA can be summarized as follows: Š a termination and acceleration clause, under which the occurrence of a specified event (such as failure to pay principal or interest installments, breach of contract obligations or occurrence of a substantive prejudicial event) entitles Cassa Depositi e Prestiti to terminate the loan; Š a clause forbidding Enel or its significant subsidiaries (defined in the contract and the guarantee as subsidiaries pursuant to Article 2359 of the Civil Code or consolidated companies whose turnover or total gross assets are at least 10% of consolidated turnover or consolidated gross assets) from establishing additional liens, guarantees or other encumbrances except for those expressly permitted unless Cassa Depositi e Prestiti gives it prior consent; Š clauses requiring Enel to report to Cassa Depositi e Prestiti both periodically and upon the occurrence of specified events (such as a change in Enel’s credit rating, or breach in an amount above a specified threshold in respect of any financial debt contracted by Enel, Enel Distribuzione or any of their significant subsidiaries, etc.). Violation of such obligation entitles Cassa Depositi e Prestiti to exercise an acceleration clause. Š a gearing clause, under which, at the end of each measurement period (half yearly), Enel’s consolidated net financial debt shall not exceed 6 times annual consolidated EBITDA. The contract establishes that as from January 1, 2013, Enel’s consolidated net financial debt shall not exceed 4.5 times annual consolidated EBITDA. During 2010, Enel SpA and Enel Finance International NV (formerly Enel Finance International SA) (the borrowers) and a pool of banks (the lenders) agreed a €10 billion revolving credit facility. The main covenants for the Credit Agreement 2007, the Credit Agreement 2009 and the €10 billion revolving line of credit are substantially similar and can be summarized as follows: Š negative pledge clauses under which the borrower (and its significant subsidiaries) may not establish or maintain (with the exception of permitted guarantees) mortgages, liens or other encumbrances on all or part of its assets to secure any present or future financial liability; Š pari passu clauses, under which the payment undertakings constitute a direct, unconditional and unsecured obligation of the borrower and bear no preferential rights among them and have at least the same seniority as other present and future loans; Š change of control clause (which is triggered in the event (i) control of Enel is acquired by one or more parties other than the Italian state or (ii) Enel or any of its subsidiaries transfer a substantial portion of the Group’s assets to parties outside the Group such that the financial reliability of the Group is significantly compromised. The occurrence of one of the two circumstances may give rise to (a) the renegotiation of the terms and conditions of the financing or (b) compulsory early repayment of the financing by the borrower; Š specification of default events, whose occurrence (e.g. failure to make payment, breach of contract, false statements, insolvency or declaration of insolvency by the borrower or its significant subsidiaries, business closure, government intervention or nationalization,

F-324 administrative proceeding with potential negative impact, illegal conduct, nationalization and government expropriation or compulsory acquisition of the borrower or one of its significant subsidiaries) constitutes a default. Unless remedied within a specified period of time, such default will trigger an obligation to make immediate repayment of the loan under an acceleration clause; Š under cross-default clauses, the occurrence of a default event in respect of any financial liability (above a threshold level) of the issuer or “significant” subsidiaries (i.e. consolidated companies whose gross revenues or total assets are at least equal to a specified percentage (10% of gross consolidated revenues or total consolidated assets)) constitutes a default in respect of the liability in question, which becomes immediately repayable; Š periodic reporting requirements. The Credit Agreement 2007 and the Credit Agreement 2009 also provide for the following covenants: Š mandatory early repayment clauses, under which the occurrence of a specified event (e.g. the issue of instruments on the capital market, new bank loans, stock issues or asset disposals) obliges the borrower to repay the related funds in advance at specific declining percentages based on the extent to which the line of credit has been drawn; Š a gearing clause, under which, at the end of each measurement period (half yearly), Enel’s consolidated net financial debt shall not exceed 6 times annual consolidated EBITDA; Š a “subsidiary financial indebtedness” clause, under which the net aggregate amount of the financial debt of Enel’s subsidiaries (with the exception of the debt of “permitted subsidiaries”) must not exceed 20% of total gross consolidated assets. For the Credit Agreement 2009 only, as from 2012, at the end of each measurement period (half yearly): (i) the gearing clause requires that Enel’s net financial debt shall not exceed 4.5 times annual consolidated EBITDA; and (ii) the ratio of annual consolidated EBITDA to net consolidated interest expense shall not be less than 4. The undertakings in respect of the bond issues carried out by Endesa Capital SA under the Global Medium-Term Notes can be summarized as follows: Š cross-default clauses under which debt repayment would be accelerated in the case of failure to make payment (above a specified amount) on any financial liability of Endesa SA or Endesa Capital SA that is listed or could be listed on a regulated market; Š negative pledge clauses under which the issuer may not establish mortgages, liens or other encumbrances on all or part of its assets to secure any financial liability that is listed or could be listed on a regulated market, unless an equivalent guarantee is extended equally or pro rata to the bonds in question; Š pari passu clauses, under which the securities and guarantees have at least the same seniority as all other present and future unsecured and unsubordinated securities issued by Endesa Capital or Endesa SA. Finally, the loans granted to Endesa, International Endesa BV and Endesa Capital do not contain cross-default clauses regarding the debt of subsidiaries in Latin America. Undertakings in respect of project financing granted to subsidiaries regarding renewables and other subsidiaries in Latin America contain covenants commonly adopted in international business practice. The main commitments regard clauses pledging all the assets assigned to the projects in favor of the creditors.

F-325 A residual portion of the debt of Enersis and Endesa Chile (both controlled indirectly by Endesa) is subject to cross-default clauses under which the occurrence of a default event (failure to make payment or breach of other obligations) in respect of any financial liability of a subsidiary of Enersis or Endesa Chile constitutes a default in respect of the liability in question, which becomes immediately repayable. In addition, many of these agreements also contain cross-acceleration clauses that are triggered by specific circumstances, certain government actions, insolvency or judicial expropriation of assets. In addition to the foregoing, the May 4, 2009 loan provides for a change of control clause that will be activated if Enel’s stake in Endesa should fall below 51% of Endesa’s share capital. Pursuant to the CONSOB instructions of July 28, 2006, the following table reports the net financial position at December 31, 2010, and December 31, 2009, reconciled with net financial debt. at Dec. 31, 2010 at Dec. 31, 2009 restated 2010-2009 Millions of euro Cash and cash equivalents on hand ...... 6 6 — Bank and post office deposits ...... 5,158 4,164 994 Securities ...... 95 97 (2) Liquidity ...... 5,259 4,267 992 Short-term financial receivables ...... 1,289 2,049 (760) Factoring receivables ...... 319 304 15 Short-term portion of long-term financial receivables ...... 9,290 767 8,523 Current financial receivables ...... 10,898 3,120 7,778 Short-term bank debt ...... (231) (927) 696 Commercialpaper ...... (7,405) (6,573) (832) Short-term portion of long-term bank debt .... (949) (1,438) 489 Drawingsonrevolvingcreditlines...... (50) (20) (30) Bonds (short-term portion) ...... (1,854) (1,096) (758) Other loans (short-term portion) ...... (196) (375) 179 Other short-term financial payables ...... (523) (22) (501) Total short-term financial debt ...... (11,208) (10,451) (757) Net short-term financial position ...... 4,949 (3,064) 8,013 Debt to banks and financing entities ...... (15,584) (21,632) 6,048 Bonds ...... (34,401) (31,889) (2,512) Preferenceshares ...... (1,474) (1,463) (11) Otherloans...... (981) (866) (115) Long-term financial position ...... (52,440) (55,850) 3,410 NET FINANCIAL POSITION as per CONSOB communication ...... (47,491) (58,914) 11,423 Long-term financial receivables and securities ...... 2,567 8,044 (5,477) NET FINANCIAL DEBT ...... (44,924) (50,870) 5,946

30. Post-employment and other employee benefits — €3,069 million The Group provides its employees with a variety of benefits, including termination benefits, additional months’ pay for having reached age limits or eligibility for old-age pension, loyalty bonuses for achievement of seniority milestones, supplementary pension and healthcare plans, residential electricity discounts and similar benefits.

F-326 For Italy, the item “Pension benefits” regards estimated accruals made to cover benefits due under the supplementary pension schemes of retired executives, while for companies abroad it covers post- employment benefits. “Other benefits” comprise liabilities in respect of defined-benefit plans not included in the previous item. The table below reports the change for the year in actuarial liabilities and the fair value of plan assets, as well as a reconciliation of the actuarial liabilities, net of assets, with the carrying amount of liabilities recognized as at December 31, 2010 and December 31, 2009. Pension benefits Other benefits 2010 2009 2010 2009 Millions of euro Changes in actuarial liability: Actuarial liability at the beginning of the year ...... 2,938 2,087 2,081 1,622 Servicecost ...... 31 22 31 20 Interestcost ...... 160 143 88 85 Benefits paid ...... (217) (216) (117) (110) Otherchanges ...... (19) (21) (8) 24 Changesinscopeofconsolidation ...... — 453 — 197 Actuarial (gains)/losses ...... 193 351 8 235 Foreign exchange (gains)/losses ...... 93 119 11 8 Liabilities held for sale ...... (4) — — — Actuarial liability at the end of the year ...... 3,175 2,938 2,094 2,081 Changes in plan assets: Fairvalueatthebeginningoftheyear...... 1,442 694 — — Changesinscopeofconsolidation ...... — 355 — — Expected return on plan assets ...... 104 69 — — Actuarial gains/(losses) ...... 4 254 — — Contributionspaidbycompany...... 155 103 — — Otherchanges ...... 22 4 — — Foreign exchange (gains)/losses ...... 65 97 — — Benefits paid ...... (217) (134) — — Fair value at the end of the year ...... 1,575 1,442 — — Reconciliation with carrying amount: Net actuarial liability ...... 1,600 1,496 2,094 2,081 Net unrecognized (gains)/losses ...... 368 208 257 259 Carrying amount of liability ...... 1,232 1,288 1,837 1,822 The change in the scope of consolidation for 2009 essentially regards the acquisition of an additional 25.01% of Endesa. The employees of the Endesa Group in Spain included in the framework agreement of October 25, 2000 participate in a specific defined-contribution pension plan and, in cases of disability or death of employees in service, a defined-benefit plan which is covered by appropriate insurance policies. In addition, the company has certain obligations to retired ex-workers, mainly concerning the supply of electricity. Outside Spain, defined-benefit pension plans are also in force, notably in Brazil. The liabilities recognized at the end of the year are reported net of the fair value of the plan assets (where this is not greater than that of the related liabilities), which are attributable entirely to Endesa in the amount of €1,575 million as at December 31, 2010, and of the net unrecognized actuarial losses in the amount of €625 million.

F-327 As regards plan assets, which at December 31, 2010 amounted to €1,687 million (of which €1,575 million adjusting the liability for pension benefits and €112 million recognized under non- current financial assets), 65% of the market value of such assets regards assets located in Spain (70% at December 31, 2009) and 35% regards assets in Brazil (30% at December 31, 2009). The assets break down as follows: % composition 2010 2009 Shares...... 25 27 Fixed-income securities ...... 69 68 Propertyandother ...... 6 5 Total ...... 100 100

At December 31, 2010, these assets included shares or bonds issued by Endesa Group companies in the amount of €10 million (€18 million at December 31, 2009). The expected return on the assets was estimated on the basis of forecasts for the main equity and fixed-income markets and using a weighting for the various asset classes similar to that adopted the previous year. The real return for 2010 was equal to 0.4% in Spain and -1.9% in other countries (12.4% in Spain and 18.3% in other countries in 2009). The following table reports the impact of employee benefits on the income statement. Pension benefits Other benefits 2010 2009 2010 2009 Millions of euro Servicecost...... 31 22 31 20 Interestcost...... 160 143 88 85 Expected return on plan assets ...... (104) (69) — — Amortization of actuarial (gains)/losses ...... 19 9 19 20 (Gains)/Losses for reduction or cancellation of plans ...... (11) — (7) (19) EffectofapplicationofIFRIC14...... 11 11 — — Total ...... 106 116 131 106

Employee benefit expenses recognized in 2010 came to €237 million (€222 million in 2009), of which €144 million in respect of accretion cost recognized under financial expense (€159 million in 2009) and €93 million recognized under personnel costs. The main actuarial assumptions used to calculate the liabilities in respect of employee benefits and the plan assets are set out in the following table. 2010 2009 Italy Abroad Italy Abroad Discount rate ...... 4.3% 3.37%-10.5% 4.3% 3.53%-13.94% Rate of wage increases ...... 2.0%-4.0% 2.3%-7.5% 2.5%-3.5% 3.0%-8.8% Rate of increase in healthcare costs ...... 3.0% 3.5%-10.5% 3.0% 3.0%-6.5% Expected return on plan assets ...... — 2.94%-12.09% — 3.87%-13.41% If, at December 31, 2010, the twelve-month rate of change in healthcare costs had been 1 basis point higher, all other variables being equal, the liability for healthcare benefits would have been €17 million higher, with an overall negative impact on the income statement in terms of service cost and interest cost of €1 million. If, at December 31, 2010, the twelve-month rate of change in

F-328 healthcare costs had been 1 basis point lower, all other variables being equal, the liability for healthcare benefits would have been €14 million lower, with a positive impact on the income statement in terms of service cost and interest cost of €1 million.

31. Provisions for risks and charges — €9,026 million

at Dec. 31, Taken to Utilization Reclassification 2009 income and other to liabilities restated Accruals statement changes held for sale at Dec. 31, 2010 of which short term Millions of euro Provision for litigation, risks and other charges: – nuclear decommissioning . . . 3,054 136 (120) (50) — 3,020 185 – non-nuclear plant retirement and site restoration ...... 529 17 — (50) (30) 466 5 – litigation ...... 781 175 (30) (30) — 896 104

–CO2 emissions charges ...... 42 — (5) (25) — 12 12 –taxesandduties..... 543 222 (96) 54 — 723 119 –other...... 1,514 424 — (176) (73) 1,689 523 Total ...... 6,463 974 (251) (277) (103) 6,806 948 Provision for early- retirement incentives...... 2,383 374 (6) (524) (7) 2,220 693 TOTAL ...... 8,846 1,348 (257) (801) (110) 9,026 1,641

Nuclear decommissioning provision The nuclear decommissioning provision includes the following: Š €2,618 million (€2,728 million at December 31, 2009) for the V1 and V2 plants at Jasklovske Bohunice and the EMO 1 and 2 plants at Mochovce, and also includes the provision for nuclear waste disposal in the amount of €196 million (€261 million at December 31, 2009), the provision for spent nuclear waste disposal in the amount of €1,571 million (€1,604 million at December 31, 2009), and the provision for nuclear plant disposal in the amount of €851 million (€863 million at December 31, 2009). The estimated timing of the outlays described above takes account of current knowledge of environmental regulations, the amount of time used to estimate the costs, and the difficulties presented by the extremely long time span over which such costs could arise. The charges covered by the provisions are reported at their present value using discount rates of between 4.15% and 4.55%; Š €402 million (€326 million at December 31, 2009) for the costs to be incurred at the time of disposal of nuclear plants by Enresa, a Spanish public enterprise responsible for such activities in accordance with Royal Decree 1349/03 and Law 24/05. Quantification of the costs is based on the standard contract between Enresa and the electricity companies approved by the Ministry for the Economy in September 2001, which regulates the retirement and closing of

F-329 nuclear power plants. The time horizon envisaged, three years, corresponds to the period from the termination of power generation to the transfer of plant management to Enresa (post- operational costs).

Non-nuclear plant retirement and restoration provision The provision for “non-nuclear plant retirement and site restoration” represents the present value of the estimated cost for the retirement and removal of non-nuclear plants where there is a legal or constructive obligation to do so.

Litigation provision The “litigation” provision covers contingent liabilities that could arise in respect of pending litigation and other disputes. It includes an estimate of the potential liability relating to disputes that arose during the period, as well as revised estimates of the potential costs associated with disputes initiated in prior periods. The estimates are based on the opinions of internal and external legal counsel.

Other provisions “Other” provisions refer to various risks and charges, mainly in connection with regulatory disputes and disputes with local authorities regarding various duties and fees.

F-330 32. Non-current financial liabilities — €2,591 million At December 31, 2010, this item includes €2,591 million (€2,964 million at December 31, 2009) in respect of the fair value measurement of cash flow and fair value hedge derivatives. The following table reports the notional amount and fair value of the cash flow hedge, fair value hedge and trading derivatives. Notional amount Fair value at Dec. 31, 2010 at Dec. 31, 2009 at Dec. 31, 2010 at Dec. 31, 2009 2010-2009 Millions of euro Cash flow hedge derivatives: –interestrates ..... 10,704 11,504 566 629 (63) –exchangerates.... 6,806 10,046 1,557 1,772 (215) – commodities ..... 171 41 5 2 3 Total ...... 17,681 21,591 2,128 2,403 (275) Fair value hedge derivatives: –exchangerates.... 215 500 19 52 (33) Total ...... 215 500 19 52 (33) Trading derivatives: –interestrates ..... 3,439 2,856 157 164 (7) –exchangerates.... 88 150 4 4 — – commodities ..... 452 442 283 341 (58) Total ...... 3,979 3,448 444 509 (65) TOTAL ...... 21,875 25,539 2,591 2,964 (373)

At December 31, 2010, the notional amount of cash flow hedge derivatives classified under non- current financial liabilities came to €17,681 million, with a corresponding fair value of €2,128 million. Cash flow hedge derivatives on interest rates in effect at December 31, 2010 were essentially composed of interest rate hedges on a number of long-term floating-rate loans. The decrease in the notional amount and the negative fair value of the cash flow hedge derivatives on interest rates was mainly due to the reclassification to the “trading” portfolio of part of the cash flow hedge derivatives used to hedge the interest-rate risk on the debt entered into by Enel SpA in 2007 in respect of the syndicated credit line with an original value of €35 billion, as the position was overhedged following the partial early repayment of the borrowing. Cash flow hedge derivatives on exchange rates essentially regard the hedging (using cross currency interest rate swaps) of bond issues denominated in pounds sterling and dollars. The fair value reflects the change in the value of the euro against the hedged currencies. Trading derivatives mainly regard transactions used for hedging purposes but not designated as cash flow hedges or fair value hedges or which did not satisfy the formal requirements for such treatment under IAS 39. Commodity derivatives mainly related to: Š derivatives held by Endesa with a fair value of €2 million classified as cash flow hedges and €37 million classified as trading derivatives;

F-331 Š hedges of changes in energy prices using bilateral physical contracts with a fair value of €3 million classified as cash flow hedges; Š embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €246 million. Š The following table reports the fair value of derivatives on the basis of the measurement inputs used. at Dec. 31, 2010 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives –interestrates...... 566 — 566 — –exchangerates...... 1,557 — 1,557 — – commodities ...... 5 5 Total ...... 2,128 — 2,128 — Fair value hedge derivatives –exchangerates...... 19 — 19 — Total ...... 19—19— Trading derivatives –interestrates...... 157 — 157 — –exchangerates...... 4 — 4 — – commodities ...... 283 3 173 107 Total ...... 444 3 334 107 TOTAL ...... 2,591 3 2,481 107

The balance for level 3 regards the embedded derivative (identified as embedded derivative C in note 5 to these consolidated financial statements) on the price of gas in an energy purchase contract entered into by Slovenské elektrárne in Slovakia. The contract was measured in two parts. In the first part, the market value of the electricity purchased was determined, while in the second part a Monte Carlo simulation is used to determine the value of the contract. The fair value of the contract is equal to the difference between the average values obtained from the simulation and the market value of the electricity acquired. Changes in the latter — which include the portion classified under current liabilities (see note 36), equal to €51 million at December 31, 2010 — are reported in the following table. Embedded derivative of Slovenské elektrárne Millions of euro Opening balance at January 1, 2010 ...... 168 (Gains)/losses in income statement ...... (10) Closing balance at December 31, 2010 ...... 158 The gains and losses recognized through profit or loss for the period include €13 million in respect of the decrease in operating performance and €3 million in respect of higher net financial expense.

F-332 33. Other non-current liabilities — €1,244 million at Dec. 31, 2010 at Dec. 31, 2009 restated 2010-2009 Millions of euro Deferred liabilities ...... 994 1,080 (86) Otheritems ...... 250 179 71 Total ...... 1,244 1,259 (15)

At December 31, 2010, this item essentially consisted of revenues for electricity and gas connections and grants received for specific assets.

Current liabilities 34. Short-term loans — €8,209 million At December 31, 2010, short-term loans totaled €8,209 million, an increase of €667 million over December 31, 2009, as detailed below: Carrying Fair Carrying Fair Carrying Fair amount value amount value amount value at Dec. 31, 2010 at Dec. 31, 2009 restated 2010-2009 Millions of euro Short-term amounts due to banks ..... 281 281 947 947 (666) (666) Commercialpaper...... 7,405 7,405 6,573 6,573 832 832 Cash collateral and other financing on derivatives ...... 343 343 — — 343 343 Other short-term financial payables . . . 180 180 22 22 158 158 Short-term financial debt ...... 8,209 8,209 7,542 7,542 667 667 The payables represented by commercial paper relate to issues outstanding at the end of December 2010 in the context of the €6,000 million program launched in November 2005 by Enel Finance International and guaranteed by Enel SpA (which was renewed in April 2010) as well as the €3,000 million program of Endesa Latinoamérica, the €2,000 million Pagarés program of Endesa Capital, and the €23 million Pagarés program of Térmica Portuguesa (taking account of proportionate consolidation). At December 31, 2010, issues under these programs amounted to €7,405 million, of which €5,322 million for Enel Finance International, €2,002 million for Endesa Latinoamérica, €34 million for Endesa Capital, €26 million for Enersis and €21 million for Térmica Portuguesa. The nominal value of the commercial paper is €7,420 million and is denominated in the following currencies: euros (€7,063 million); US dollars (the equivalent of €274 million); yen (the equivalent of €55 million) and Swiss francs (the equivalent of €28 million). The exchange rate risk in respect of currencies other than the euro is fully hedged by currency swaps.

35. Trade payables — €12,373 million The item, which amounts to €12,373 million, includes payables in respect of energy supplies, fuel, materials, equipment associated with tenders and other services.

F-333 36. Current financial liabilities — €1,672 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009

Millions of euro Deferred financial liabilities ...... 711 869 (158) Derivativecontracts...... 776 859 (83) Otheritems ...... 185 56 129 Total ...... 1,672 1,784 (112)

The following table shows the notional amount and fair value of the derivative contracts. Notional amount Fair value

at Dec. 31, 2010 at Dec. 31, 2009 at Dec. 31, 2010 at Dec. 31, 2009 2010-2009

Millions of euro Cash flow hedge derivatives: –interestrates ...... 244 153 3 3 — –exchangerates...... 1,972 1,316 45 50 (5) – commodities ...... 609 1,150 19 120 (101) Total ...... 2,825 2,619 67 173 (106) Fair value hedge derivatives: –interestrates ...... — 360 — 8 (8) –exchangerates...... 36 — 2 — 2 Total ...... 36 360 2 8 (6) Derivatives hedging net investment in a foreign operation: –exchangerates...... — 319 — 9 (9) Total ...... — 319 — 9 (9) Trading derivatives: –interestrates ...... 284 190 33 18 15 –exchangerates...... 2,804 1,055 124 30 94 – commodities ...... 2,637 2,944 550 621 (71) Total ...... 5,725 4,189 707 669 38 TOTAL ...... 8,586 7,487 776 859 (83)

Trading derivatives on exchange rates essentially include derivatives transactions used to hedge the exchange rate risk in respect of commodity prices. Even though the transactions were carried out for hedging purposes, they do not meet the requirements to qualify for hedge accounting. Commodity derivates are mainly related to: Š cash flow hedge derivatives on coal and energy, with a fair value of €19 million; Š commodity derivatives on fuels, with a fair value of €333 million; Š trading transactions on energy and other commodities, with a fair value of €99 million; Š embedded derivatives related to energy sale and purchase contracts in Slovakia, with a fair value of €118 million.

F-334 The following table reports the fair value of derivatives on the basis of the measurement inputs used, as provided for under the amendments to IFRS 7. at Dec. 31, 2010 Level 1 Level 2 Level 3 Millions of euro Cash flow hedge derivatives: –interestrates...... 3 — 3 — –exchangerates...... 45 — 45 — – commodities ...... 19 5 14 Total ...... 67562— Fair value hedge derivatives: –interestrates...... 2 — 2 — Total ...... 2— 2— Trading derivatives: –interestrates...... 33 — 33 — –exchangerates...... 124 — 124 — – commodities ...... 550 81 418 51 Total ...... 707 81 575 51 TOTAL ...... 776 86 639 51

37. Other current liabilities — €8,052 million at Dec. 31, 2009 at Dec. 31, 2010 restated 2010-2009 Millions of euro Payablesduetocustomers...... 1,500 1,484 16 Payables due to Electricity Equalization Fund and similar bodies ...... 2,519 3,058 (539) Payablesduetoemployees ...... 512 368 144 Othertaxpayables...... 717 589 128 Payables due to social security institutions ...... 207 190 17 Payables for put options granted to minority shareholders...... 655 437 218 Other ...... 1,942 2,021 (79) Total ...... 8,052 8,147 (95)

“Payables due to customers” include €882 million (€728 million at December 31, 2009) in security deposits related to amounts received from customers as part of electricity and gas supply contracts. Following the finalization of the contract, deposits for electricity sales, the use of which is not restricted in any way, are classified as current liabilities given that the company does not have an unconditional right to defer repayment beyond twelve months. “Payables due to Electricity Equalization Fund and similar bodies” include payables arising from the application of equalization mechanisms to electricity purchases on the Italian market amounting to €1,507 million (€1,738 million at December 31, 2009) and on the Spanish market amounting to €1,012 million (€1,320 million at December 31, 2009). The item “Payables for put options granted to minority shareholders” at December 31, 2010 essentially regards the liability to Enel Distributie Muntenia in the amount of €512 million (€332 million at December 31, 2009), Enel Energie Muntenia in the amount of €89 million

F-335 (€58 million at December 31, 2009) and Marcinelle Energie in the amount of €37 million (€16 million at December 31, 2009). These liabilities, which are estimated at fair value on the basis of level 3 inputs, are determined on the basis of the exercise conditions specified in the contracts; the change for the year produced a decrease of the same amount in the goodwill of the subsidiaries.

Liabilities held for sale 38. Liabilities held for sale — €998 million Changes in the item during the year are reported in the following table. Reclassification Disposals and from current change in at Dec. 31, 2009 and non-current scope of Other restated liabilities consolidation changes at Dec. 31, 2010 Millions of euro Long-termloans...... 50 415 (79) 14 400 Post-employment and other employee benefits ...... 2 4 (2) — 4 Provisions for risks and charges...... 9 110 (22) (35) 62 Deferred tax liabilities ...... 31 25 (51) 25 30 Other non-current liabilities ...... 8 18 — 6 32 Short-term loans ...... 40 414 (60) (64) 330 Tradepayables...... 76 132 (67) (72) 69 Other current liabilities ...... 8 41 (2) 24 71 Total ...... 224 1,159 (283) (102) 998

Liabilities held for sale at December 31, 2010, amounted to €998 million and include the liabilities of the Bulgarian companies in the amount of €482 million, the liabilities of Enel Unión Fenosa Renovables in the amount of €328 million, which will be divested under the agreement with Gas Natural of July 30, 2010, and certain liabilities held in Ireland and Latin America totaling €188 million. At December 31, 2009, the item includes certain liabilities of companies held in Greece and Brazil, which in the light of decisions taken by management meet the requirements under IFRS 5 for their classification among liabilities held for sale.

39. Related parties As an operator in the field of generation, transport, distribution and sale of electricity, Enel provides services to a number of companies controlled by the Italian State, Enel’s controlling shareholder. In the current regulatory framework, Enel concludes transactions with Terna — Rete Elettrica Nazionale (Terna), the Single Buyer, the Energy Services Operator, and the Energy Markets Operator (each of which is controlled either directly or indirectly by the Ministry for the Economy and Finance). Fees for the transport of electricity payable to Terna and certain charges paid to the Energy Markets Operator are determined by the Authority for Electricity and Gas.

F-336 Transactions relating to purchases and sales of electricity concluded with the Energy Markets Operator on the Power Exchange and with the Single Buyer are settled at market prices. In particular, companies of the Sales Division acquire electricity from the Single Buyer and settle the contracts for differences related to the allocation of CIP 6 energy with the Energy Services Operator, in addition to paying Terna fees for the use of the national transmission network. Companies that are a part of the Generation and Energy Management Division, in addition to paying fees for the use of the national transmission network to Terna, carry out electricity transactions with the Energy Markets Operator on the Power Exchange and sell electricity to the Single Buyer. The company of the Renewable Energy Division that operates in Italy sells electricity to the Energy Markets Operator on the Power Exchange. Enel also acquires fuel for generation and gas for distribution and sale from Eni, a company controlled by the Ministry for the Economy and Finance. All transactions with related parties are concluded on normal market terms and conditions. The following table summarizes the relationships: at Dec. 31, 2010 2010 Balance sheet Income statement

Receivables Payables Revenues Costs Millions of euro SingleBuyer...... 80 1,059 1,746 6,066 EnergyMarketsOperator...... 722 632 4,202 3,548 Terna ...... 199 422 1,291 1,986 Eni...... 7 41 229 661 EnergyServicesOperator...... 12 421 232 35 Italian Post Office ...... 2 39 — 160 Other...... 3 43 1 123 Total ...... 1,025 2,657 7,701 12,579

The following table shows transactions with associated companies outstanding at December 31, 2010 and carried out during the year, respectively. at Dec. 31, 2010 2010 Balance sheet Income statement Receivables Payables Revenues Costs Millions of euro EnelReteGas ...... 37 106 62 316 SeverEnergia ...... 69 — 4 — Elica2...... 2 1 — — CESI ...... 1 14 1 23 LaGeo ...... 7 — — — Othercompanies...... 72 12 4 4 Total ...... 188 133 71 343

In November 2010, the Board of Directors of Enel SpA approved a procedure governing the approval and execution of transactions with related parties undertaken by Enel SpA either directly or indirectly through its subsidiaries. The procedure (which can be found at http://www.enel.com/it-IT/ group/governance/principles/related_parts/) sets out rules designed to ensure the transparency and

F-337 procedural and substantive propriety of transactions with related parties. It was adopted in implementation of the provisions of Article 2391-bis of the Italian Civil Code and the implementing rules established by CONSOB. It replaces, with effect from January 1, 2011, the rules governing transactions with related parties approved by the Board of Directors of Enel SpA on December 19, 2006 in implementation of the recommendations of the Corporate Governance Code for listed companies, the provisions of which were in effect until December 31, 2010.

40. Contractual commitments and guarantees The commitments entered into by the Enel Group and the guarantees given to third parties are shown below. at Dec. 31, 2010 Millions of euro Guarantees given: – sureties and other guarantees granted to third parties ...... 5,032 Commitments to suppliers for: – electricity purchases ...... 50,125 – fuel purchases ...... 60,588 –varioussupplies ...... 5,908 –tenders ...... 1,530 –other ...... 2,239 Total ...... 122,390 TOTAL ...... 125,422

Guarantees granted to third parties amounted to €5,032 million and include €596 million in commitments relating to the sale of real estate assets, in connection with the regulations that govern the termination of leases and the related payments, for a period of six years and six months from July 2004. The value of such guarantees is reduced annually by a specified amount. The expected cash flow of the lease contracts, including forecast inflation, is as follows: Š 2011: €52 million; Š 2012: €53 million; Š 2013: €53 million; Š 2014: €54 million; Š 2015: €55 million. The expected cash flow of the operating lease contracts of Endesa is as follows: Š 2011: €40 million; Š 2012: €40 million; Š 2013: €23 million; Š 2014 and beyond: €173 million. Commitments for electricity amounted to €50,125 million at December 31, 2010, of which €16,274 million refers to the period 2011-2015, €8,534 million to the period 2016-2020, €7,775 million to the period 2021-2025 and the remaining €17,542 million beyond 2025. Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set

F-338 in foreign currencies). The total at December 31, 2010, was €60,588 million, of which €32,341 million refer to the period 2011-2015, €20,826 million to the period 2016-2020, €6,247 million to the period 2021-2025 and the remaining €1,174 million beyond 2025. Various supply commitments include €274 million in respect of those under the cooperation agreement with EDF of November 30, 2007 for the construction of the Flamanville nuclear plant. The amount represents Enel’s share of 12.5% of the cost of construction of the plant, which is scheduled to begin in 2012.

41. Contingent liabilities and assets Environmental litigation Litigation regarding environmental issues primarily concerns the installation and operation of power lines and equipment of Enel Distribuzione, which succeeded Enel SpA in the related relationships. Enel Distribuzione has been involved in a number of civil and administrative suits relating to requests, often using urgent procedures, for the precautionary transfer or modification of operations on power lines by persons living near them on the basis of their alleged potential to cause harm, despite the fact that the company believes that they have been installed in compliance with current regulations. In a number of proceedings claims for damages for harm caused by electromagnetic fields have been lodged. The outcome of litigation on these issues is normally favorable to the company. In this regard, in a decision in February 2008, the court ruled that compliance with the statutory limits on exposure to electrical and magnetic fields ensure, as supported by the most authoritative studies in the field and evidence arising at the European level, that health will not be jeopardized. There have been sporadic adverse precautionary rulings, which have all been appealed. At present there are no final adverse rulings, and no damages for physical harm have ever been granted, although a ruling in February 2008 (appealed) found that harm had been caused by the “stress” associated with living near power lines and the fear of possible health problems. The next hearing has been scheduled for July 9, 2014. There have also been a number of proceedings concerning electromagnetic fields generated by medium- and low-voltage transformer substations within buildings, in which the equipment, according to the company’s technical staff, has always been in compliance with induction limits set by current regulations. Recent rulings have confirmed that compliance with the applicable regulations is sufficient guarantee of protection from harm. In August 2008, the Court of Cassation (the supreme court of appeal) issued a ruling concerning a 380 kW power line (Forlì-Fano) no longer owned by Enel that, in conflict with current scientific knowledge in this area, accepted the existence of a causal relationship between the headaches suffered by a number of parties and exposure to electromagnetic fields. The situation concerning litigation has evolved thanks to the clarification of the legislative framework following the entry into force of the framework law on electromagnetic emissions (Law 36 of February 22, 2001) and the related implementing regulations for power lines (Prime Minister’s Order of July 8, 2003). The new regulations seek to harmonize regulation of the field at the national level. The new rules also introduce a ten-year program as from the entry into force of Law 36/2001 for the upgrading of power lines. They also envisage the possibility of recovering, in part or in full, costs incurred by the owners of power lines and substations through electricity rates, in accordance with criteria to be set by the Authority for Electricity and Gas, pursuant to Law 481/95, as they represent costs incurred in the public interest. At present, the Prime Minister has not issued the Order setting the criteria for the upgrading of power lines (Article 4, paragraph 4, of Law 36/2001), which is necessary for distribution companies to submit the associated plans to the regional governments (Article 9, paragraph 2, of Law 36/2001). An Order of the Director General for environmental protection of May 29, 2008, of the Ministry for the Environment approved the procedures for measuring and assessing magnetic induction, pursuant

F-339 to Article 5, paragraph 2, of the Prime Minister’s Order of July 8, 2003, and another Order issued by the same Ministry on May 29, 2008 approved the calculation methods for determining the distance restrictions for power lines, pursuant to Article 4, paragraph 1(h), of Law 36/2001. A number of urban planning and environmental disputes regarding the construction and operation of certain power plants and distribution lines are pending. Based on an analysis of individual cases, Enel believes the possibility of adverse rulings is remote. For a limited number of cases, an unfavorable outcome cannot be ruled out completely, however. The consequences of unfavorable judgments could, in addition to the possible payment of damages, also include the costs related to work required to modify electrical equipment and the temporary unavailability of the plant.

Developments in the inquiries of the Milan Public Prosecutor’s Office and the State Audit Court into former senior managers In February 2003, the Milan Public Prosecutor’s Office initiated a criminal investigation of former top managers of Enelpower and other individuals for alleged offences to the detriment of Enelpower and payments made by contractors to receive certain contracts. In January 2008, the investigating magistrate allowed Enel SpA, Enelpower SpA and Enel Produzione SpA to join the case as injured parties. On April 27, 2009, the investigating magistrate announced a plea bargain for a number of the defendants, while the former directors and the executive of Enelpower were committed for trial before the Court of Milan. After the start of the trial in January 2010, on April 20, 2010 the judge ruled that the trial could not proceed against the managers for the offences of corruption and embezzlement as the statute of limitations had run out. The trial is continuing against the managers for the offence of criminal conspiracy. Enel, Enelpower and Enel Produzione therefore remain involved in the proceeding as injured parties for that offence. Following extinguishment of the grounds for seeking damages for pecuniary losses as a result of the Court of Cassation’ s ruling no. 26806/09 of December 19, 2009 — restricted to substantiated pecuniary losses with State Audit Court ruling no. 532/08 — and the extinguishment of the charges of embezzlement and corruption due to the statute of limitations, two civil suits were filed with the courts of Monza and Udine seeking tortious damages for the losses caused by the actions of Enel former directors and senior managers being pursued through the State Audit Court and the criminal court. In addition, Enel Produzione and Enelpower have undertaken revocatory actions against the former directors and senior managers, voiding certain transfers of assets. Finally, following the enforcement proceedings undertaken against the former directors and managers, more than €450,000 have been recovered. Enelpower is participating as an injured party in the trial of the former directors and senior managers for money laundering in the Swiss courts. In a decision notified on July 2, 2010, the Federal Criminal Court of Bellinzona ruled that since the injured parties were already seeking the same damages in Italy, they could not seek damages in Switzerland as well. Enel has appealed that decision. Again in Switzerland, Enelpower obtained a precautionary seizure order for amounts deposited on the Swiss current accounts of the defendants in a total amount of about 32 million Swiss francs (about €23 million).

BEG litigation With its ruling of October 20, 2010, the Italian Court of Cassation upheld the decision of the Rome Court of Appeal of April 7, 2009, which rejected BEG’s appeal of the unfavorable arbitration ruling. The ruling of the Court of Cassation regarded the complaint filed by BEG SpA before the Rome Arbitration Chamber in November 2000 against Enelpower with regard to alleged breach of a collaboration agreement governed by Italian law concerning the construction of a hydroelectric power station in Albania. BEG asked for damages from Enelpower of about €120 million. The parties are still waiting for the scheduling of a hearing before the Albanian Court of Cassation concerning Enel’s appeal against the ruling of the Albanian Court of Appeal, which on April 28,

F-340 2010 had upheld the decision of the Court of Tirana awarding Albania BEG Ambient tortious damages of about €25 million for 2004 as well as an unspecified amount of other tortious damages for subsequent years. In addition, in a summons notified on September 28, 2010, Enelpower and Enel filed suit against BEG SpA with the Court of Rome asking the Court to ascertain the tortious liability of BEG and order the latter to pay damages to Enelpower (contractual and tortious) and to Enel (tortious) in the amount that one or the other could be required to pay to Albania BEG Ambient in the event of the enforcement of the sentence issued by the Albanian courts. The first hearing was held on January 18, 2011 and the judge has reserved judgment on the request advanced by Enel and Enelpower for time to reply to the allegations and objections of the counterparty.

Out-of-court disputes and litigation connected with the blackout of September 28, 2003 In the wake of the blackout that occurred on September 28, 2003, numerous claims were submitted for automatic and other indemnities for losses. These claims gave rise to substantial litigation before justices of the peace, mainly in the regions of Calabria, Campania and Basilicata, with a total of some 120,000 proceedings. Charges in respect of such indemnities could be recovered in part under existing insurance policies. About two thirds of the initial rulings by these judges found in favor of the plaintiffs, while appellate courts have nearly all found in favor of Enel Distribuzione, based upon both the lack of proof of the loss claimed and the recognition that the company was not involved in causing the event. The few adverse rulings against Enel Distribuzione have been appealed to the Court of Cassation, which has consistently ruled in favor of Enel, confirming the position established in orders 17282, 17283 and 17284 of July 23, 2009, which in finding for the appellant found no liability on the part of Enel Distribuzione. In May 2008, Enel served its insurance company a summons to ascertain its right to reimbursement of amounts paid in settlement of unfavorable rulings. As of November 30, 2010, pending cases concerning the blackout of 2003 had fallen to about 70,000 due to Court decisions and/or abandonment of suits by the plaintiffs, and the flow of new claims has come to a halt.

Finmek/Enel.Factor litigation On April 29, 2009 Enel.Factor was issued a summons by Finmek SpA, a company under special administration. The dispute concerns a factoring relationship involving the assignment from Finmek to Enel.Factor of receivables in respect of a contract between Finmek and Enel Distribuzione SpA for the supply of remote-readable digital meters to Enel Distribuzione. The assignments began in 2001 and continued until April 2004, when Finmek SpA entered special administration. With the summons, Finmek asked the court to ascertain the unenforceability of assignments carried out

F-341 between May 7, 2003 and March 23, 2004 and to revoke or declare inoperative the assignments carried out in that period. Finmek’s overall claim amounts to about $50 million. The next hearing before the Court of Padua has been scheduled for March 29, 2011.

Porto Tolle thermal plant — Air pollution — Criminal proceedings against Enel directors and employees — Damages for environmental harm The Court of Adria, in a ruling issued March 31, 2006 concluding criminal proceedings begun in 2005, convicted former directors and employees of Enel for a number of incidents of air pollution caused by emissions from the Porto Tolle thermoelectric plant. The decision, provisionally enforceable, held the defendants and Enel (as a civilly liable party) jointly liable for the payment of damages for harm to multiple parties, both natural persons and local authorities. Damages for a number of mainly private parties were set at the amount of €367,000. The calculation of the amount of damages owed to certain public entities (the Regions of Veneto and Emilia Romagna, the Province of Rovigo and various municipalities) was postponed to a later civil trial, although a “provisional award” of about €2.5 million was immediately due. An appeal was lodged against the ruling of the Court of Adria by the Company and its employees and former directors. On March 12, 2009, the Court of Appeal of Venice partially reversed the lower court decision. It found that the former directors had not committed a crime and that there was no environmental damage and therefore ordered recovery of the provisional award already paid. The employees were given token sentences and the damages awarded to private parties were halved. The prosecutors and the civil claimants lodged an appeal against the ruling with the Court of Cassation. In a ruling on January 12, 2011, the Court of Cassation overturned the decision of the Venice Court of Appeal as regards the recovery of the provisional award to the civil claimants, the regions, the municipalities and the Parco Delta del Po, as well as the offenses of the former managing directors and central managers, as the offences had been extinguished under the statute of limitations, and referred the case to the civil section of the Venice Court of Appeal as regards payment of damages and the division among the accused. The full sentence will likely be published within a few months. As regards amounts paid to a number of public entities, the Company has already made payment under a settlement agreement during 2008.

WISCO litigation On May 19, 2010, Enel.NewHydro and Trenitalia signed a settlement agreement to resolve the arbitration proceeding begun in 2007 by Enel.NewHydro Srl against Trenitalia SpA in relation to the investment in Water & Industrial Services Company W.I.S.C.O. SpA (hereinafter “WISCO”) and the corresponding agreement (entered into by Enel.Hydro SpA and succeeded by Enel.NewHydro Srl following a demerger) with Trenitalia SpA of December 23, 2003. Enel.NewHydro had asked the tribunal to find that the project to develop WISCO, envisaged in the agreement had not been implemented, with the consequent voidance of the contract and of the acquisition of 51% of WISCO from Trenitalia (for €15 million), as well as the voidance of the put option for the sale (to Enel.NewHydro) of Trenitalia’s remaining 49% stake in WISCO. Trenitalia had asked that the claim be rejected and the validity of the agreements binding on Enel.NewHydro, along with the exercise of the put option on May 22, 2007, by Trenitalia, at a price of €17.5 million, to be confirmed. Trenitalia has also requested damages for any substantiated losses. As a result of the settlement, Trenitalia sold Enel.NewHydro the remaining 49% of WISCO for €16,575,000 (net of a discount of €925,000 and waiver of accrued interest). At the same time, WISCO and Trenitalia signed an addendum to the water treatment services contract of April 6, 2004, providing for an expansion of the activities entrusted to WISCO by Trenitalia.

F-342 Extension of municipal property tax (ICI) Article 1-quinquies of Decree Law 44 of March 31, 2005 containing urgent measures concerning local authorities (added during ratification with Law 88 of May 31, 2005) stated that Article 4 of Royal Decree Law 652 of April 13, 1939 (governing the land registry) shall be interpreted with regard to power plants alone in the sense that the buildings and permanent constructions consist of the land and those parts that are structurally attached to it, even temporarily, which may be joined by any means of connection with movable parts for the purpose of creating a single complex asset. The Regional Tax Commission of Emilia Romagna, in Ordinance no. 16/13/06 (filed on July 13, 2006), referred the case to the Constitutional Court on the issue of the constitutionality of Article 1- quinquies of the Decree Law, finding it relevant and not manifestly unfounded. On May 20, 2008, the Constitutional Court, in judgment no. 162/08, ruled that the issues raised by the RTC of Emilia Romagna had no foundation and, therefore, confirmed the legitimacy of the new interpretation, whose primary effects on the Group are as follows: Š the inclusion of the value of the “turbines” in the land registry valuation of the plants; Š the power for local Land Registry Offices to modify, without a time limit, the imputed property incomes proposed by Enel. The ruling also affirmed that “… the principle that the determination of imputed property income shall include all the elements constituting a plant … even if not physically connected to the land, holds for all of the buildings referred to in Article 10 of Royal Decree Law 652 of 1939” and not only power plants. We also note that to date no valuation criterion has been introduced for the movable assets considered relevant for the determination of land registry values either with regard to the valuation method or the effective identification of the object of the valuation, and the above ruling does not appear to provide any guidance on this issue. Accordingly, with regard to pending litigation, Enel Produzione and Enel Green Power will continue to pursue the case to request a substantial reduction of the values originally assigned by the Land Registry Offices to these parts of the plant. They have, however, allocated an adequate amount to the “Provisions for risks and charges” to cover fully the potential charges that would result from an unfavorable outcome, including the information that has emerged from new assessments. At the same time, they do not feel that further provisions are necessary to take into account possible retroactive application of the rule on imputed rent proposals, which to date have not been the subject of comments by the Land Registry Offices and, in any event, primarily concern small plants.

Spain In March 2009, Josel SL sued Endesa Distribución Eléctrica SL to withdraw from the contract for the sale of several buildings due to changes in their zoning status, requesting the restitution of about €85 million plus interest. Endesa Distribución Eléctrica SL opposed the request for withdrawal. The final hearing was held on July 13, 2010 and a ruling is pending. On May 19, 2009, the town of Granadilla de Abona fined Endesa €72 million for the construction of the Centrale Generadora de Ciclo Combinato 2 power plant. On July 13, 2009, Endesa lodged an appeal with the administrative courts against the fine. On September 18, 2009, a precautionary suspension of payment of the fine was obtained. Hearing of the case began on September 1, 2010. As regard property tax issues, the Spanish tax authorities undertook a new appraisal of “Bienes Inmuebles de Características Especiales” (real estate with special features). The new appraisals took effect as from 2008 for ports, hydroelectric plants, conventional thermal plants and nuclear power plants and as from 2009 for wind farms and photovoltaic plants. The appraisals were appealed by the

F-343 corresponding companies of the Endesa Group. For 2008 and 2009, the liability deriving from the new land registry values amounts to €67 million, although the amount challenged by Endesa comes to €31 million.

Brazil In 2005, the Brazilian tax authorities notified Ampla of an assessment that was subsequently appealed. The tax authorities argued for the non-applicability of the tax exemption for interest received by subscribers of a fixed-rate note issued by Ampla in 1998. On December 6, 2007, Ampla was successful in the second level of the administrative appeals, but the Brazilian authorities appealed the ruling to the Superior Council for Tax Appeals. The amount involved in the dispute is about €335 million. In 2002 the State of Rio de Janeiro ruled that the ICMS (Impuesto a la Circulación de Mercaderías y Servicios) should be calculated and paid on the 10th, 20th and 30th of the same month in which the tax accrues. Nevertheless, Ampla continued to pay the tax in compliance with the previous system (up to the 5th day of the subsequent month). Despite an informal agreement with the State of Rio de Janeiro and two tax amnesties, in October 2004 Ampla was fined for late payment of the ICMS, which the company appealed. The ruling at first instance was in favor of the State of Rio de Janeiro and Ampla appealed but the appeal was denied on August 26, 2010. Ampla then filed a further appeal with the “Consejo Pleno de Contribuyentes” of the State of Rio de Janeiro, which is still pending. The amount involved in the dispute is about €76 million. A Brazilian construction company held a contract for civil works with the Brazilian company CELF (owned by the State of Rio de Janeiro), which withdrew from the contract. As a consequence of the transfer of assets from CELF to Ampla Energia e Serviços, the Brazilian construction company complained that the transfer had infringed its creditor rights in respect of CELF (deriving from the contract for civil works) and, in 1998, filed suit against Ampla. In March 2009, the Brazilian court granted the complaint and Ampla and the State of Rio de Janeiro appealed the decision. In December 2009 the appeals court granted the appeals. The Brazilian construction company appealed that decision to the Court of Cassation, which declined to grant the petition. The construction company then lodged a new appeal (“de Agravo Regimental”) with the Tribunal Superior de Justicia de Brasil, which was rejected at the end of August 2010 for lack of grounds. Following that decision, the company requested a “mandado de segurança”, the final judicial remedy to obtain a ruling establishing the alleged right of the construction company to recover its claim. The amount involved in the dispute is about €309 million. In 1998 CIEN signed an agreement with Tractebel for the delivery of electricity from Argentina through its Argentina-Brazil interconnection line. As a result of Argentine regulatory changes introduced as a consequence of the economic crisis in 2002, CIEN was unable to make the electricity available to Tractebel. In October 2009, Tractebel sued CIEN, which submitted its defense. CIEN cited force majeure as a result of the Argentine crisis as the main argument in its defense. As part of the dispute, Tractebel has expressed its intention to acquire 30% of the transmission line involved. The case is continuing. For analogous reasons in June 2010 the company Furnas also filed suit against CIEN for failure to deliver electricity, requesting payment of about €235 million in addition to unspecified damages. CIEN’s defense is similar to the earlier case. At the end of July CIEN submitted its defense against the claim and, subsequently, Furnas filed a brief in response. The judge has initiated examination of the case. In addition, on October 18, 2010, the judge asked the parties to indicate whether they would be interested in a “conciliation hearing”.

F-344 42. Subsequent events Agreement for development of geothermal energy in Turkey On January 24, 2011, Enel Green Power has reached an agreement with the Turkish group Uzun for the development of geothermal plants in Turkey. In particular, the agreement provides for the establishment of a research and exploration company, owned and managed by Enel Green Power, with Meteor, a company 70% owned by Uzun and 30% owned by the Turkish geothermal consultancy G-Energy. The new company will hold a package of 142 exploration licenses in the west of the country, where it will carry out surface and deep exploration activities with the aim of finding geothermal resources suitable for the generation of electricity and heat. The licenses were acquired by Meteor under a law which allows private parties to invest in research for geothermal resources with a view to exploiting them for electricity, heating and in agriculture. Enel Green Power will finance the initial surface exploration with a view to identifying the areas most suitable for the development of geothermal projects, resulting in what could be one of the most important centers of geothermal activity in Turkey. Meteor will participate in Enel Green Power’s investments in both surface and deep exploration on a pro-rata basis. Individual companies (with Enel Green Power again the majority shareholder) will then be formed to develop each geothermal project in the various areas involved.

Repayment of Credit Facility With effect from January 31, 2011, a voluntary early repayment was made on the Credit Facility Agreement held by Enel Finance International and Enel SpA, of which: Š €1,484 million related to the tranche maturing in 2012; Š €1,042 million related to the tranche maturing in 2014; Š €474 million related to the tranche maturing in 2016.

Sale of CAM and Synapsis On February 24, 2011, the disposal of the Peruvian company Grana y Montero of the Multi- American Company (CAM) was completed at a price of $20 million. On March 1, 2011, the disposal of Synapsis IT Solutions and Services (Synapsis) to Riverwood Capital was completed at a price of $52 million. Both companies are classified in these financial statements as assets and liabilities held for sale.

Bond issue for institutional investors On March 2, 2011, the Board of Directors of Enel SpA, as part of the strategy to extend the average maturity of the Group’s consolidated debt and to optimize the profile of its medium and long-term maturities, approved the issue by December 31, 2011, of one or more bonds, to be placed with institutional investors, up to a maximum amount of €1 billion. The bond issues may be carried out either directly by Enel SpA or by its Dutch subsidiary Enel Finance International NV (guaranteed by the Parent Company) in relation to opportunities offered by the latter for placing bonds on regulated foreign markets and/or in private placements with foreign institutional investors. The Board of Directors also empowered the CEO to allocate the bond issues between the two above- mentioned companies, as well as setting the amounts, currencies, timing and characteristics of the individual issues, and the power to apply for listing them on one or more regulated markets.

F-345 Acquisition of additional stakes in CESI SpA On March 11, 2011, Enel SpA acquired E.ON Produzione SpA’s entire holding in CESI SpA, equal to 3.9% (134,033 shares). On March 25, 2011, additional holdings in CESI were acquired from Edison, Edipower, Iren Energia and A2A, totaling 9.6% of share capital (328,432 shares). Following the transactions, Enel SpA holds 39.4% of CESI.

Agreement for disposal of Maritza On March 14, 2011, Enel reached an agreement with ContourGlobal for the sale of the entire share capital of the Netherlands-registered companies Maritza East III Power Holding BV and Maritza O&M Holding Netherland BV, which own, respectively, 73% of the share capital of the Bulgarian company Maritza East 3 AD, which in turn is the owner of a lignite-fired power station with an installed capacity of 908 MW (“Maritza”), and 73% of the share capital of the Bulgarian company Enel Operations Bulgaria AD, which is responsible for operating and maintaining the Maritza plant. ContourGlobal will pay Enel a total of €230 million for the companies. The transaction is expected to close by July 2011 and is subject to obtaining the necessary authorisations from the relevant authorities.

43. Stock incentive plans Between 2000 and 2008, Enel implemented stock incentive plans (stock option plans and restricted share units plans) each year in order to give the Enel Group — in line with international business practice and the leading Italian listed companies — a means for fostering management motivation and loyalty, strengthening a sense of corporate team spirit in our key personnel, and ensuring their enduring and constant effort to create value, thus creating a convergence of interests between shareholders and management. The remainder of this section describes the features of the stock incentive plans adopted by Enel and still in place in 2010.

F-346 Exercise conditions The right to subscribe the shares was subordinate to the condition that the executives concerned remain employed within the Group, with a few exceptions (such as, for example, termination of employment because of retirement or permanent invalidity, exit from the Group of the company at which the executive is employed, and succession) specifically governed by the Regulations. The vesting of the options is subject to achievement of two operational objectives, both calculated on a consolidated, three-year basis: (i) earnings per share (EPS, equal to Group net income divided by the number of Enel shares in circulation) for the 2008-2010 period, determined on the basis of the amounts specified in the budgets for those years and (ii) the return on average capital employed (ROACE, equal to the ratio between operating income and average net capital employed) for the 2008-2010 period, also determined on the basis of the amounts specified in the budgets for those years. Depending on the degree to which the objectives are achieved, the number of options that can actually be exercised by each beneficiary is determined on the basis of a performance scale established by the Enel Board of Directors and may vary up or down with respect to the basic option grant by a percentage amount of between 0% and 120%.

F-347 The following table reports developments in the 2008 stock option plan: Total options Number of Verification of plan Options lapsed Options lapsed granted beneficiaries Strike price conditions at Dec. 31, 2009 in 2010 8,019,779(1) 16 Group €8.075(2) Rights None None executives vested

Payment of a bonus connected with the portion of the dividends attributable to asset disposals, to be made in conjunction with the exercise of stock options In March 2004, the Board of Directors voted to grant a special bonus, beginning in 2004, to the beneficiaries of the various stock option plans who exercise the options granted to them, establishing that the amount is to be determined each time by the Board itself when it adopts resolutions concerning the allocation of earnings and is based on the portion of the “disposal dividends” (as defined below) distributed after the granting of the options. The rationale underlying this initiative is that the portion of dividends attributable to extraordinary transactions regarding the disposal of property and/or financial assets (“disposal dividends”) should be considered a form of return to shareholders of part of the value of the Company, and as such capable of affecting the performance of the shares. The beneficiaries of the bonus are thus the beneficiaries of the stock option plans who — either because they choose to do so or because of the restrictions imposed by the exercise conditions or the vesting periods — exercise their options after the ex dividend date of the “disposal dividends” and therefore could be penalized. The bonus is not paid, however, for the portion of other kinds of dividends, such as those generated by ordinary business activities or reimbursements associated with regulatory measures. Essentially, when beneficiaries of the stock option plans have exercised the options granted to them, as from 2004 they have been entitled to receive a sum equal to the “disposal dividends” distributed by Enel after the options have been granted but before they have been exercised. The bonus will be paid by the company of the Group that employs the beneficiary and is subject to ordinary taxation as income from employment. Under these rules, to date the Board of Directors has approved: (i) a bonus amounting to €0.08 per option exercised, with regard to the dividend (for 2003) of €0.36 per share payable as from June 24, 2004; (ii) a bonus amounting to €0.33 per option exercised, with regard to the interim dividend (for 2004) of the same amount per share payable as from November 25, 2004; (iii) a bonus amounting to €0.02 per option exercised, with regard to the balance of the dividend (for 2004) of €0.36 per share payable as from June 23, 2005; and (iv) a bonus amounting to €0.19 per option exercised, with regard to the interim dividend (for 2005) of the same amount per share payable as from November 24, 2005. It should be noted that the overall dilution of share capital as of December 31, 2010 attributable to the exercise of the stock options granted under the various plans amounts to 1.31% and that further developments in the plans could, in theory, increase the dilution up to a maximum of 1.41%.

F-348 The following table summarizes developments over the course of 2008, 2009 and 2010 in the Enel stock option plans, detailing the main assumptions used in calculating their fair value.

Developments in stock option plans 2008 Number of options 2004 plan 2007 plan plan Total Options granted at December 31, 2008 ...... 38,527,550 27,920,000 8,019,779(1) 74,467,329 Options exercised at December 31, 2008 ...... 26,437,815 — — 26,437,815 Options lapsed at December 31, 2008 ...... 2,112,800 760,166 — 2,872,966 Options outstanding at December 31, 2008 ...... 9,976,935 27,159,834 8,019,779(1) 45,156,548 Options lapsed in 2009 ...... 9,976,935 27,159,834 — 37,136,769 Options outstanding at December 31, 2009 ...... — — 8,019,779(1) 8,019,779 Options outstanding at December 31, 2010 ...... — — 8,019,779(2) 8,019,779 Fairvalueatgrantdate(euro)...... 0.18 0.29 0.17 — Volatility ...... 17% 13% 21% — Optionexpiry ...... Dec. 2009 Dec. 2013 Dec. 2014 —

(1) If the degree of achievement of the two operational objectives (EPS and ROACE) set for the 2008 plan should reach the highest level of the performance scale, a maximum of 9,623,735 options would vest. (2) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 9,623,735 options have vested (120% of the 8,019,779 options originally granted).

Stock options granted to the General Manager and managers with strategic responsibilities The following table reports the stock options of the General Manager (and Chief Executive Officer) of Enel SpA and Company managers with strategic responsibilities. The information regarding the latter is provided in aggregate form, pursuant to the provisions of Article 78 and annex 3C of CONSOB Resolution no. 11971/1999 (the “Issuers Regulation”). Each option in the table corresponds to the subscription of one share. Options Options Options granted in exercised lapsed in Options held at the start of 2010 2010(3) in 2010(3) 2010 Options held at the end of 2010 Average Average Number of exercise Average Number of Number of Number of Number of exercise Average Name Position options price (euro) expiry options options options options price (euro) expiry Fulvio General Manager of Enel Conti SpA...... 1,322,772(1) 7.118 2014———1,587,326(2) 7.118 2014 Managers with strategic responsibilities(3) .... 6,697,007(4) 7.118 2014———8,036,409(5) 7.118 2014

(1) If the degree of achievement of the two operational objectives (EPS and ROACE) set for the 2008 plan should reach the highest level of the performance scale, a maximum of 1,587,326 options would vest. (2) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 1,587,326 options have vested (120% of the 1,322,772 options originally granted). (3) In 2010, managers with strategic responsibilities included heads of Enel SpA Departments and Division heads, for a total of 17 management positions. (4) If the degree of achievement of the two operational objectives (EPS and ROACE) set for the 2008 plan should reach the highest level of the performance scale, a maximum of 8,036,409 options would vest. (5) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for 2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 8,036,409 options have vested (120% of the 6,697,007 options originally granted).

F-349 Restricted share units plan 2008 In June 2008 Enel’s Ordinary Shareholders’ Meeting approved an additional incentive mechanism, a restricted share units plan. The plan — which is also linked to the performance of Enel shares — differs from the stock option plans in that it does not involve the issue of new shares and therefore has no diluting effect on share capital. It grants the beneficiaries rights to receive the payment of a sum equal to the product of the number of units exercised and the average value of Enel shares in the month preceding the exercise of the units.

Exercise conditions Exercise of the units — and the consequent receipt of the payment — is subordinate to the condition that the executives concerned remain employed within the Group, with a few exceptions (such as, for example, termination of employment because of retirement or permanent invalidity, exit of the company at which the beneficiary is employed from the Group or inheritance) specifically governed by the Regulations. As regards other exercise conditions, the plan first establishes a suspensory operational objective (a “hurdle target”): (i) for the first 50% of the basic number of units granted, Group EBITDA for 2008- 2009, calculated on the basis of the amounts specified in the budgets for those years; and (ii) for the remaining 50% of the basic number of units granted, Group EBITDA for 2008-2010, calculated on the basis of the amounts specified in the budgets for those years. If the hurdle target is achieved, the actual number of units that can be exercised by each beneficiary is determined on the basis of a performance objective represented by: (i) for the first 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2009 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and that of a specific benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced with the FTSE Italia All Share index after an analogous substitution by Borsa Italiana in 2009 — and the Bloomberg World Electric Index (weight: 50%); and (ii) for the remaining 50% of the basic number of units granted, a comparison on a total shareholders’ return basis — for the period from January 1, 2008 to December 31, 2010 — between the performance of ordinary Enel shares on the electronic stock exchange of Borsa Italiana SpA and the benchmark index calculated as the average of the performance of the MIBtel index (weight: 50%) — replaced in 2009 with the FTSE Italia All Share index as indicated above — and the Bloomberg World Electric Index (weight: 50%). The number that can be exercised may vary up or down with respect to the basic unit grant by a percentage amount of between 0% and 120% as determined on the basis of a specific performance scale. If the hurdle target is not achieved in the first two-year period, the first tranche of 50% of the units granted may be recovered if the same hurdle target is achieved over the longer three-year period

F-350 indicated above. It is also possible to extend the validity of the performance level registered in the 2008-2010 period to the 2008-2009 period, where performance was higher in the longer period, with the consequent recovery of units that did not actually vest in the first two-year period because of the lower performance level and on the condition that the first 50% of the basic unit grant has not yet been exercised.

Developments in the 2008 restricted share units plan The review conducted by the Board of Directors to verify satisfaction of the exercise conditions found the following. For the first 50% of the basic units granted, in 2008-2009 the hurdle target for Group EBITDA had been achieved and Enel shares had slightly outperformed the benchmark index, meaning that according to the performance scale 100% of the units originally granted had vested. For the remaining 50% of the basic grant awarded, in 2008-2010 the hurdle target for Group EBITDA had been achieved and Enel shares significantly outperformed the benchmark index, meaning that according to the performance scale an amount equal to 120% of the units originally granted had vested. In view of the fact that the level of achievement of the performance targets over the 2008-2010 period was higher than that achieved in 2008-2009, it is therefore possible to recovery the units that did not vest in 2008-2009 as a result of the lower level of achievement of the performance targets for beneficiaries who had not yet exercised the first 50% of the basic units granted. The following table reports developments in the 2008 restricted share units plan. Number of RSU 2008 plan RSU outstanding at December 31, 2008 (equal to 100% of the base number of RSU) ...... 1,766,675 RSU lapsed in 2009 ...... 11,350 RSU outstanding at December 31, 2009 ...... 1,755,325 of which vested at December 31, 2009 ...... 887,662 RSU lapsed in 2010 ...... 9,648 RSU exercised in 2010 ...... 472,588 New RSU granted and vested under the “recovery clause” (applicable to first 50% of basenumberofRSU)...... 77,950 New RSU granted and vested in respect of the remaining 50% of the base number of RSU...... 176,667 RSU outstanding at December 31, 2010 ...... 1,527,706 of which vested at December 31, 2010 ...... 1,527,706 Fairvalueatthegrantdate(euro)...... 3.16 Fair value at December 31, 2010 (euro) ...... 4.47 Expiry of the restricted share units ...... December 2014

F-351 44. Compensation of directors, members of the Board of Auditors, the General Manager and managers with strategic responsibilities The compensation paid to directors, members of the Board of Auditors, the General Manager and managers with strategic responsibilities of Enel SpA is summarized in the following table. The table has been prepared with regard to the period for which the position was held on an accruals basis. The information regarding managers with strategic responsibilities is provided in aggregate form, pursuant to the provisions of Article 78 and annex 3C of CONSOB Resolution no. 11971/1999 (the “Issuers Regulation”). The directors of Enel SpA have waived all forms of compensation for positions held in subsidiaries. A description of the overall compensation of the members of the Board of Directors, the members of the Board committees, the Chairman and the Chief Executive Officer/General Manager is provided in the second section of the corporate governance report (under “Board of Directors — Pay”).

F-352 Compensation of directors, members of the Board of Auditors, the General Manager and managers with strategic responsibilities Period for which Bonuses and Other position was Remuneration Non-monetary other incentives compensation Last name Name Position held End of term (euro) benefits (euro) (euro) (euro) Total Directors and General Manager (euro) Gnudi ...... Piero Chairman 1/2010-12/2010 Approv. fin. stat. 2010 700,000.00 15,211.38(1) 980,000.00(2)(*) 1,695,211.38 Conti...... Fulvio CEO and GM 1/2010-12/2010 Approv. fin. stat. 2010 600,000.00 1,680,000.00(3)(*) 2,661,678.51(4)(*) 4,941,678.51 Ballio ...... Giulio Director 1/2010-12/2010 Approv. fin. stat. 2010 116,000.00(5) 116,000.00 Codogno ...... Lorenzo Director 1/2010-12/2010 Approv. fin. stat. 2010 118,000.00(6)(7) 118,000.00 Costi...... Renzo Director 1/2010-12/2010 Approv. fin. stat. 2010 118,250.00(8) 118,250.00 Fantozzi...... Augusto Director 1/2010-12/2010 Approv. fin. stat. 2010 121,000.00(9) 121,000.00 Luciano ...... Alessandro Director 1/2010-12/2010 Approv. fin. stat. 2010 118,000.00(10) 118,000.00 Napolitano ...... Fernando Director 1/2010-12/2010 Approv. fin. stat. 2010 115,500.00(11) 115,500.00 Tosi...... Gianfranco Director 1/2010-12/2010 Approv. fin. stat. 2010 123,250.00(12) 123,250.00 Total compensation of directors and GM ...... 2,130,000.00 15,211.38 2,660,000.00 2,661,678.51 7,466,889.89 Board of Auditors – term ended Fontana ...... Franco Chair. Board of Auditors 1/2010-4/2010 Approv. fin. stat. 2009 25,000.00 25,000.00 Board of Auditors – in service

F-353 Duca...... Sergio Chair. Board of Auditors 4/2010-12/2010 Approv. fin. stat. 2012 56,902.78 56,902.78 Conte ...... Carlo Standing Auditor 1/2010-12/2010 Approv. fin. stat. 2012 71,694.44(13) 71,694.44 Mariconda ...... Gennaro Standing Auditor 1/2010-12/2010 Approv. fin. stat. 2012 71,694.44 71,694.44 Total compensation of Board of Auditors ...... 225,291.66 — — — 225,291.66 Managers with strategic responsibilities(14) ...... 1/2010-12/2010 12,811,890.45 12,811,890.45 TOTAL ...... 2,355,291.66 15,211.38 2,660,000.00 15,473,568.96 20,504,072.00

(1) Insurance policy. (2) Of which (i) €420,000.00 in respect of the variable portion of compensation for 2009, approved and disbursed in 2010, and (ii) €560,000.00 in respect of the variable portion of compensation for 2010 approved and disbursed in 2011. (3) Of which (i) €780,000.00 in respect of the variable portion of compensation for 2009, approved and disbursed in 2010, and (ii) €900,000.00 in respect of the variable portion of compensation for 2010 approved and disbursed in 2011. (4) The amount breaks as follows: i) a fixed portion of compensation of €701,678.51 for the position of General Manager for 2010; ii) €910,000.00 in respect of the variable portion of compensation for the position of General Manager for 2009, approved and disbursed in 2010; (iii) €1,050,00.00 in respect of the variable portion of compensation for the position of General Manager for 2010, approved and disbursed in 2011. (5) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €31,000.00 as a member of the Compensation Committee, as approved by the Board of Directors on June 18, 2008. (6) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €33,000.00 as a member of the Internal Control Committee, as approved by the Board of Directors on June 18, 2008. (7) Compensation paid to the Ministry for the Economy and Finance in the amount of €115,000.00 pursuant to the Directive of the Presidency of the Council of Ministers – Department of Public Administration of March 1, 2000. (8) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €33,250.00 as a member of the Internal Control Committee, as approved by the Board of Directors on June 18, 2008. (9) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €36,000.00 as coordinator of the Compensation Committee, as approved by the Board of Directors on June 18, 2008. (10) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €33,000.00 as a member of the Internal Control Committee, as approved by the Board of Directors on June 18, 2008. (11) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €30,500.00 as a member of the Compensation Committee, as approved by the Board of Directors on June 18, 2008. (12) Of which (i) €85,000.00 as a member of the Board of Directors, as approved by the Shareholders’ Meeting of June 11, 2008 and (ii) €38,250.00 as coordinator of the Internal Control Committee, as approved by the Board of Directors on June 18, 2008. (13) Compensation paid entirely to the Ministry for the Economy and Finance pursuant to the Directive of the Presidency of the Council of Ministers – Department of Public Administration of March 1, 2000. (14) In 2010, managers with strategic responsibilities included heads of Enel SpA Departments and Division heads, for a total of 17 management positions. (*) As regards the variable component of the compensation of senior management (in particular the Chairman and the CEO/ General Manager, who are assigned the same objectives), the Group targets for 2010 comprise (i) quantitative targets, including achievement of the consolidated EBITDA set in the budget (weighting: 25%), reducing consolidated financial debt (20%), the satisfaction of customers who signed up plans offered by the subsidiary Enel Energia SpA (10%), the margin of the generation area (20%) and workplace safety (10%) as well as (ii) qualitative objectives concerning the effectiveness of the communication and information plan on Enel’s nuclear power skills and an overall assessment of the findings of the “climate” survey within the Group (overall weight: 15%).

F-354 CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2013

F-355 Enel S.p.A. Condensed interim consolidated financial statements as of June 30, 2013

Auditors’ review report on the condensed interim consolidated financial statements

F-356 Reconta Ernst & Young S.p.A. Tel: +39 06 324751 Via Po. 32 Fax: +39 06 32475504 00198 Roma ey.com

Auditors’ review report on the condensed interim consolidated financial statements (Translation from the original Italian text)

To the Shareholders of Enel S.p.A. 1. We have reviewed the condensed interim consolidated financial statements, comprising the balance sheet, the income statement, the statement of comprehensive income, the statement of changes in shareholders’ equity, the statement of cash flows and the related explanatory notes of Enel S.p.A. and its subsidiaries (“Enel Group”) as of June 30, 2013. Enel S.p.A.’s directors are responsible for the preparation of the condensed interim consolidated financial statements in conformity with the International Financial Reporting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to issue this review report based on our review. 2. We conducted our review in accordance with review standards recommended by Consob (the Italian Stock Exchange Regulatory Agency) in its Resolution No.10867 of July 31, 1997. Our review consisted mainly of obtaining information on the accounts included in the condensed interim consolidated financial statements and the consistency of the accounting principles applied, through discussions with management, and of applying analytical procedures to the financial data presented in these consolidated financial statements. Our review did not include the application of audit procedures such as tests of compliance and substantive procedures on assets and liabilities and was substantially less in scope than an audit conducted in accordance with generally accepted auditing standards. Accordingly, we do not express an audit opinion on the condensed interim consolidated financial statements as we expressed on the annual consolidated financial statements. With respect to the consolidated financial statements of the prior year and the condensed interim consolidated financial statements of the corresponding period of the prior year, presented for comparative purposes, reference should be made to our reports issued on April 4, 2013 and August 2, 2012, respectively. As described in the explanatory notes, directors have restated certain comparatives data related to the consolidated financial statements of the prior year and the condensed interim consolidated financial statements of the corresponding period of the prior year with respect to the data previously presented. We have examined the method used to restate the comparative financial data and the information presented in the explanatory notes in this respect for the purpose of issuing this report.

Reconta Ernst & Young S.p.A. Sede Legale: 00198 Roma - Via Po, 32 Capitale Sociale €1.402.500,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la CC.I.A.A. di Roma Codice fiscal e numero di iscrizione 00434000584 P.IVA 00891231003 Iscritta all’Albo Revisori Contabili al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/2/1998 Iscritta all’Albo Speciale delle società di revisione Consob al progressivo n. 2 delibera n. 10831 del 16/7/1997

A member firm of Ernst & Young Global Limited

F-357 3. Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements of Enel Group as of June 30, 2013 are not prepared, in all material respects, in conformity with the international Financial Reporting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union.

Rome, August 2, 2013

Reconta Ernst & Young S.p.A. Signed by: Massimo delli Paoli, Partner

This report has been translated into the English language solely for the convenience of international readers

F-358 Consolidated Income Statement

1st Half Notes 2013 2012 restated(1) of which of which with related with related parties parties Millions of euro Revenues 6 Revenuesfromsalesandservices ...... 39,184 4,719 40,003 3,390 Otherrevenuesandincome...... 973 41 689 26 [Subtotal] ...... 40,157 40,692 Costs 7 Rawmaterialsandconsumables...... 20,880 5,398 22,056 5,059 Services...... 7,505 1,232 7,529 1,164 Personnel ...... 2,388 2,317 Depreciation, amortization and impairment losses .... 3,125 2,930 Otheroperatingexpenses...... 1,495 35 1,314 27 Capitalizedcosts ...... (659) (743) [Subtotal] ...... 34,734 35,403 Net income/(charges) from commodity risk management ...... 8 (255) 30 96 35 Operating income ...... 5,168 5,385 Financialincome...... 9 1,446 17 1,497 5 Financialexpense ...... 9 2,713 3 2,998 Share of income/(expense) from equity investments accounted for using the equity method ...... 15 55 45 Income before taxes ...... 3,956 3,929 Incometaxes...... 10 1,473 1,515 Net income from continuing operations ...... 2,483 2,414 Net income from discontinued operations ...... —— Net income for the period (shareholders of the Parent Company and non-controlling interests) ...... 2,483 2,414 Attributable to shareholders of the Parent Company...... 1,680 1,835 Attributable to non-controlling interests ...... 803 579 Earnings per share (euro) attributable to ordinary shareholders of the Parent Company ...... 11 0.18 0.20 Diluted earnings per share (euro) attributable to ordinary shareholders of the Parent Company ..... 11 0.18 0.20 Earnings from continuing operations per share (euro) attributable to ordinary shareholders of the Parent Company ...... 11 0.18 0.20 Diluted earnings from continuing operations per share (euro) attributable to ordinary shareholders of the Parent Company ...... 11 0.18 0.20

(1) The consolidated income statement for the 1st Half of 2012 has been restated to provide a better representation of the effects recognized in the previous year of the introduction of IAS 19 Revised and the change in the accounting treatment of energy efficiency certificates. For more information, please see note 3 below.

F-359 Statement of Consolidated Comprehensive Income

1st Half 2012 2013 restated(1) Millions of euro Net income for the period ...... 2,483 2,414 Other comprehensive income recyclable to profit or loss ...... – Effective portion of change in the fair value of cash flow hedges ...... (301) (296) – Share of income recognized in equity by companies accounted for using the equitymethod ...... 1 (5) –Changeinthefairvalueoffinancialinvestmentsavailableforsale...... (77) (357) – Exchange rate differences ...... (1,371) 419 Income/(Loss) recognized directly in equity ...... (1,748) (239) Comprehensive income for the period ...... 735 2,175 Attributable to: –shareholdersoftheParentCompany...... 829 1,266 – non-controlling interests ...... (94) 909

(1) The statement of consolidated comprehensive income for the 1st Half of 2012 has been restated to provide a better representation of the effects recognized in the previous year of the introduction of IAS 19 Revised and the change in the accounting treatment of energy efficiency certificates. For more information, please see note 3 below.

F-360 Consolidated Balance Sheet

at December 31, 2012 Notes at June 30, 2013 restated(1) of which of which with related with related parties parties Millions of euro ASSETS Non-current assets Property,plantandequipment ...... 12 82,416 83,115 Investmentproperty ...... 193 197 Intangible assets ...... 13 35,014 35,994 Deferred tax assets ...... 14 6,744 6,816 Equity investments accounted for using the equitymethod...... 15 1,119 1,115 Non-current financial assets ...... 16 5,504 79 5,518 74 Other non-current assets ...... 819 57 800 55 [Total] ...... 131,809 133,555 Current assets Inventories ...... 3,395 3,338 Trade receivables ...... 17 12,382 1,774 11,719 893 Tax receivables ...... 2,239 1,631 Current financial assets ...... 18 11,017 23 9,381 39 Other current assets ...... 2,567 74 2,262 46 Cash and cash equivalents ...... 19 5,714 9,891 [Total] ...... 37,314 38,222 Assets held for sale ...... 20 233 317 TOTAL ASSETS ...... 169,356 172,094

(1) The consolidated balance sheet at December 31, 2012, has been restated to provide a better representation of the effects recognized in the previous year of the introduction of IAS 19 Revised and the completion of the purchase price allocation process for a number of business combinations carried out the previous year. For more information, please see note 3 below.

F-361 at December 31, 2012 Notes at June 30, 2013 restated(1) of which of which with related with related parties parties Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 9,403 9,403 Other reserves ...... 7,889 8,742 Retained earnings (loss carried forward) ...... 17,900 17,630 [Total] ...... 35,192 35,775 Non-controlling interests ...... 17,530 16,312 Total shareholders’ equity ...... 21 52,722 52,087 Non-current liabilities Long-termloans...... 19 54,077 55,959 Post-employment and other employee benefits ...... 4,541 4,542 Provisionsforrisksandcharges...... 22 8,088 8,648 Deferred tax liabilities ...... 14 11,426 11,783 Non-current financial liabilities ...... 23 2,496 2,553 Other non-current liabilities ...... 1,298 1,151 2 [Total] ...... 81,926 84,636 Current liabilities Short-term loans ...... 19 4,930 3,970 Current portion of long-term loans ...... 19 3,333 4,057 Tradepayables...... 11,146 3,425 13,903 3,496 Incometaxpayable...... 1,417 364 Current financial liabilities ...... 24 3,891 4 3,138 1 Other current liabilities ...... 9,969 10 9,931 39 [Total] ...... 34,686 35,363 Liabilities held for sale ...... 20 22 8 Total liabilities ...... 116,634 120,007 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 169,356 172,094

F-362 Statement of Changes in Consolidated Shareholders’ Equity

Share capital and reserves attributable to the shareholders of the Parent Company

Reserve from Reserve Reserve from Equity translation of from sale of equity attributable financial equity investments to the statements in Reserve from holdings Reserve from accounted Reserve Net shareholders Share currencies measurement without transactions in for using the for income of the Non- Total Share premium Legal Other other than of financial loss of non-controlling equity employee for the Parent controlling shareholders’ capital reserve reserve reserves the euro instruments control interests method benefits period Company interests equity

Millions of euro at January 1, 2012 ...... 9,403 5,292 1,881 2,262 120 (49) 749 78 15 — 19,039 38,790 15,650 54,440 Effect of application of IAS 19 Revised...... — — — — — — — — — (131) (7) (138) (61) (199) Effect of change in accounting policy forwhitecertificates ...... — — — — — — — — — — (140) (140) — (140) at January 1,2012 restated ...... 9,403 5,292 1,881 2,262 120 (49) 749 78 15 (131) 18,892 38,512 15,589 54,101 Dividendsandinterimdividends...... — — — — — — — — — — (1,505) (1,505) (497) (2,002) Changeinscopeofconsolidation ..... — — — — — — — — — — — — 49 49 Comprehensive income for the period ...... — — — — 104 (668) — — (5) — 1,835 1,266 909 2,175 F-363 of which: – Income/(Loss) recognized directly in equity ...... — — — — 104 (668) — — (5) — — (569) 330 (239) – Net income/(loss) for the period ..... — — — — — — — — — 1,835 1,835 579 2,414 at June 30, 2012 ...... 9,403 5,292 1,881 2,262 224 (717) 749 78 10 (131) 19,222 38,273 16,050 54,323 at January 1, 2013 ...... 9,403 5,292 1,881 2,262 92 (1,253) 749 78 8 — 18,259 36,771 16,387 53,158 Effect of application of IAS 19 Revised...... — — — — — — — — — (367) (629) (996) (84) (1,080) Effect of Renewable Energy Division PPA ...... — — — — — — — — — — — — 9 9 at January 1, 2013 restated ...... 9,403 5,292 1,881 2,262 92 (1,253) 749 78 8 (367) 17,630 35,775 16,312 52,087 Dividendsandinterimdividends...... — — — — — — — — — — (1,410) (1,410) (487) (1,897) Changeinscopeofconsolidation ..... — — — — — — — — — — — — 59 59 Sale of equity holdings without loss of control...... — — — — — — (16) 6 — 8 — (2) 1,740 1,738 Comprehensive income for the period ...... — — — — (513) (345) — — 7 — 1,680 829 (94) 735 of which: – Income/(Loss) recognized directly in equity ...... — — — — (513) (345) — — 7 — — (851) (897) (1,748) – Net income/(loss) for the period ..... — — — — — — — — — — 1,680 1,680 803 2,483 at June 30, 2013 ...... 9,403 5,292 1,881 2,262 (421) (1,598) 733 84 15 (359) 17,900 35,192 17,530 52,722 Consolidated Statement of Cash Flows

1st Half Notes 2013 2012 restated

of which of which with related with related parties parties

Millions of euro Net income before taxes ...... 3,956 3,929 Adjustments for: Amortizationandimpairmentlossesofintangibleassets...... 406 496 Depreciation and impairment losses of property, plant and equipment...... 2,339 2,255 Exchange rate adjustments of foreign currency assets and liabilities (including cash and cash equivalents) ...... (96) 346 Accrualstoprovisions ...... 748 394 Financial(income)/expense...... 1,030 1,272 (Gains)/Losses from disposals and other non-monetary items .... 375 (451) Cash flow from operating activities before changes in net current assets ...... 8,759 8,241 Increase/(Decrease)inprovisions ...... (1,157) (695) (Increase)/Decreaseininventories...... (59) (270) (Increase)/Decrease in trade receivables ...... (1,043) (881) (284) 412 (Increase)/Decrease in financial and non-financial assets/ liabilities ...... (484) (47) 61 34 Increase/(Decrease)intradepayables...... (2,759) (71) (1,498) (85) Interestincomeandotherfinancialincomecollected ...... 561 17 893 5 Interestexpenseandotherfinancialexpensepaid ...... (2,010) (3) (2,176) Incometaxespaid...... (1,197) (1,607) Cash flows from operating activities (a) ...... 610 2,665 Investmentsinproperty,plantandequipment...... (2,162) (2,534) Investmentsinintangibleassets...... (197) (272) Investments in entities (or business units) less cash and cash equivalentsacquired...... (152) (151) Disposals of entities (or business units) less cash and cash equivalentssold...... 68 2 (Increase)/Decrease in other investing activities ...... 50 214 Cash flows from investing/disinvesting activities (b) ...... (2,393) (2,741) Financial debt (new long-term borrowing) ...... 19 1,071 10,573 Financialdebt(repaymentsandothernetchanges) ...... (3,252) (6,693) Collection of proceeds from sale of equity holdings without loss ofcontrol ...... 1,795 — Incidental expenses related to sale of equity holdings without lossofcontrol ...... (45) — Dividendsandinterimdividendspaid...... (1,846) (2,002) Cash flows from financing activities (c) ...... (2,277) 1,878 Impact of exchange rate fluctuations on cash and cash equivalents (d) ...... (129) 36 Increase/(Decrease) in cash and cash equivalents (a+b+c+d) ...... (4,189) 1,838 Cash and cash equivalents at beginning of the period(1) ...... 9,933 7,072 Cash and cash equivalents at the end of the period(2) ...... 5,744 8,910

(1) Of which cash and cash equivalents equal to €9,891 million at January 1, 2013 (€7,015 million at January 1, 2012), short- term securities equal to €42 million at January 1, 2013 (€52 million at January 1, 2012) and cash and cash equivalents pertaining to assets held for sale: none at January 1, 2013 (€5 million at January 1, 2012). (2) Of which cash and cash equivalents equal to €5,714 million at June 30, 2013 (€8,845 million at June 30, 2012), short-term securities equal to €28 million at June 30, 2013 (€55 million at June 30, 2012) and cash and cash equivalents pertaining to assets held for sale in the amount of €2 million at June 30, 2013 (€10 million at June 30, 2012).

F-364 Explanatory notes

1. Accounting policies and measurement criteria Enel SpA, which operates in the energy utility sector, has its registered office in Viale Regina Margherita 137, Rome, Italy. The consolidated Half-Year Financial Report for the period ended June 30, 2013 comprises the financial statements of the Company, its subsidiaries and joint ventures (“the Group”) and the Group’s holdings in associated companies. A list of the subsidiaries, associated companies and joint ventures included in the scope of consolidation is reported in the annex. For a discussion of the main activities of the Group, please see the interim report on operations. This Half-Year Financial Report was approved for publication by the Board on August 1, 2013.

Compliance with IFRS/IAS The consolidated Half-Year Financial Report of the Group at and for the six months ended at June 30, 2013 has been prepared pursuant to Article 154-ter of Legislative Decree 58 of 24 February 1998 as amended by Legislative Decree 195 of 6 November 2007, as well as Article 81 of the Issuers Regulation as amended. The condensed interim consolidated financial statements for the six months ended at June 30, 2013 included in the consolidated Half-Year Financial Report have been prepared in compliance with the international accounting standards (IFRS/IAS) issued by the International Accounting Standards Board (IASB) adopted by the European Union pursuant to Regulation (EC) no. 1606/2002 and in effect as of the close of the period, as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) in effect at the same date. All of these standards and interpretations are hereinafter referred to as “IFRS-EU”. More specifically, the financial statements have been drafted in compliance with IAS 34 — Interim financial reporting and consist of the consolidated income statement, the statement of consolidated comprehensive income, the consolidated balance sheet, the statement of changes in consolidated sharholders’ equity, the consolidated statement of cash flows, and the related explanatory notes. The Enel Group has adopted the half-year as the reference interim period for the purposes of applying IAS 34 and the definition of interim financial report specified therein. In this regard, the condensed interim consolidated financial statements at June 30, 2013, were prepared in conformity with IAS 34 on an entirely exceptional basis in view of a planned bond issue, which in the event was not carried out. The accounting standards adopted, the recognition and measurement criteria and the consolidation criteria and methods used for the condensed interim consolidated financial statements at June 30, 2013 are the same as those adopted for the consolidated financial statements at December 31, 2012 (please see the related report for more information), with the exception of the differences discussed below. These condensed interim consolidated financial statements may therefore not include all the information required to be reported in the annual financial statements and must be read together with the financial statements for the period ended December 31, 2012. In addition to the accounting standards adopted in the preparation of the consolidated financial statements at December 31, 2012, the following amendments to international accounting standards that took effect as from January 1, 2013, are material to the Group: Š “Amendment to IAS 1 — Presentation of items of other comprehensive income”. The amendment calls for the separate presentation of items of other comprehensive income (OCI) that may be reclassified to profit or loss in the future (“recycling”) and those that will not be recycled.

F-365 The retrospective application of the measure did not have a significant impact on these condensed interim consolidated financial statements; Š “IAS 19 — Employee benefits”. The standard supersedes the IAS 19 applied in the preparation of the 2012 annual financial statements. The most significant change regards the requirement to recognize all actuarial gains/losses in OCI, with the elimination of the corridor approach. The amended standard also introduces more stringent rules for disclosures, with the disaggregation of the cost into three (service cost, net interest on the net defined benefit plan asset/liability and remeasurement of the net defined benefit asset/liability); replaces the expected return of plan assets with the calculation of net interest; no longer permits the deferral of the recognition of past service cost; provides for enhanced disclosures; and introduces more detailed rules for the recognition of termination benefits. The effects of the retrospective application of the standard in these condensed interim consolidated financial statements are discussed in the section “Restatement of the balance sheet and the income statement”; Š “IFRS 13 — Fair value measurement”. The standard represents a single IFRS framework to be used whenever another accounting standard requires or permits the use of fair value measurement. The standard sets out guidelines for measuring fair value and introduces specific disclosure requirements. The prospective application of the measure did not have a significant impact on these condensed interim consolidated financial statements; Š “Amendments to IFRS 7 — Offsetting financial assets and financial liabilities”. The amendments establish more extensive disclosures for the offsetting of financial assets and liabilities, with a view to enabling users of financial statements to assess the actual and potential effects on the entity’s financial position of netting arrangements, including the set-off rights associated with recognized assets or liabilities). As clarified by the IASB last April, the disclosures required by the amendments were not presented in these interim consolidated financial statements as they have been prepared in condensed form; Š “Amendments to IAS 12 — Deferred taxes: recovery of underlying assets”. The amendment introduces an exception in the recognition of deferred taxes on the basis of the manner in which the carrying amount of the underlying assets will be recovered. The exception regards systems that establish different tax rates depending on whether the entity plans to recover the assets through sale or through use in the productive cycle. The retrospective application of the measure did not have an impact on these condensed interim consolidated financial statements; Š “Annual Improvements to IFRSs 2009-2011 Cycle”. the document contains formal modifications and clarifications of existing standards whose retrospective application did not have an impact on these condensed interim consolidated financial statements. More specifically, the following standards have been amended: Š IAS 1 — Presentation of Financial Statements; the amendment clarifies how comparative information must be presented in the financial statements and specifies that an entity may voluntarily elect to provide additional comparative information. More specifically, it specifies that an entity shall present a third balance sheet as at the start of the previous period in addition to the minimum required comparative schedules if: Š it retrospectively applies an accounting standard, retrospectively restates or reclassifies items of its financial statements; and

F-366 Š the retrospective application or retrospective restatement or reclassification has a material impact on the balance sheet as at the start of the previous period. When an entity reclassifies comparative amounts, it must indicate (including at the start of the previous period) the nature of the reclassification, the amount of each reclassified item and the reasons for the reclassification; Š IAS 16 — Property, Plant and Equipment; the amendment clarifies that if spare parts and servicing equipment meet the requirements for classification as “property, plant and equipment” they shall be recognized and measured in accordance with IAS 16; otherwise they shall be classified as inventory; Š IAS 32 — Financial Instruments: Presentation; the amendment establishes that income taxes relating to distributions to equity holders and to transaction costs of equity transactions shall be accounted for in accordance with IAS 12; Š IAS 34 — Interim Financial Reporting; the amendment clarifies that interim financial reports indicate specify the total assets and liabilities for a particular reportable segment only if such amounts are regularly provided by the chief operating decision maker and if there has been a material change from the amount disclosed in the last annual financial statements presented; Š “IFRIC 20 — Stripping costs in the production phase of a surface mine”. The interpretation sets out the accounting treatment to be applied to costs incurred for the removal of mine waste materials during the production phase, clarifying when they can be recognized as an asset. The prospective application of the interpretation did not have an impact on these condensed interim consolidated financial statements.

Seasonality The turnover and performance of the Group are impacted, albeit slightly, by developments in weather conditions. More specifically, in warmer periods of the year, gas sales decline, while during periods in which factories are closed for holidays, electricity sales decline. In view of the small impact these variations have on performance, no additional disclosure (required under IAS 34.21) for developments in the twelve months ended June 30, 2013 is provided.

Use of estimates Preparing the condensed interim consolidated financial statements requires management to make estimates and assumptions that impact the value of revenues, costs, assets and liabilities and the disclosures concerning contingent assets and liabilities at the balance sheet date. Changes in the conditions underlying the assumptions and judgments could have a substantial impact on future results. For the purposes of the preparation of these condensed interim consolidated financial statements, in line with the consolidated financial statements at December 31, 2012, the use of estimates involved the same situations in which estimates were employed during the preparation of the annual consolidated financial statements. In addition, pursuant to the disclosure requirements under IFRS 13, there were no changes in the hierarchy used in measuring the fair value of financial instruments compared with the most recent annual consolidated financial statements, and the methods used in measuring Level 2 and Level 3 instruments are consistent with those used at December 31, 2012. For a more extensive discussion of the most significant assessment processes of the Group, please see the section “Use of estimates” in the consolidated financial statements at December 31, 2012.

F-367 2. Main changes in the scope of consolidation At June 30, 2013, the scope of consolidation had changed with respect to that at June 30, 2012, and December 31, 2012, as a result of the following main transactions.

2012 Š acquisition, on January 13, 2012, of an additional 49% of Rocky Ridge Wind Project, which was already a subsidiary (consolidated line-by-line) controlled through a 51% stake; Š acquisition, on February 14, 2012, of the remaining 50% of Enel Stoccaggi, a company in which the Group already held a 50% interest. As from that date the company has been consolidated on a line-by-line basis (previously consolidated proportionately in view of the joint control exercised); Š acquisition, on June 27, 2012, of the remaining 50% of a number of companies in the Kafireas wind power pipeline in Greece, which had previously been included under “Elica 2” and accounted for using the equity method in view of its 30% stake; as from that date the companies have therefore been consolidated on a line-by-line basis; Š acquisition, on June 28, 2012, of 100% of Stipa Nayaá, a Mexican company operating in the wind generation sector; Š disposal, on August 2, 2012, of the entire capital of Water & Industrial Services Company (Wisco), which operates in the waste water treatment sector in Italy. Š disposal, on October 9, 2012, of the entire share capital of Endesa Ireland, a company operating in the generation of electricity; Š acquisition, on October 12, 2012, of the additional 58% of Trade Wind Energy, a company in which the Group had held a stake of 42%; as a result of the purchase, the company is no longer consolidated using the equity method but is consolidated on a line-by-line basis; Š acquisition, on December 21, 2012, of 99.9% of Eólica Zopiloapan, a Mexican company operating in the wind generation sector.

2013 Š acquisition, on March 22, 2013, of 100% of Parque Eólico Talinay Oriente, a company operating in the wind generation sector in Chile; Š acquisition, on March 26, 2013, of 50% of PowerCrop, a company operating in the biomass generation sector; in view of the joint control exercised over the company together with another operator, the company is consolidated on a proportionate basis; Š disposal, on April 8, 2013, of 51% of Buffalo Dunes Wind Project, a company operating in the wind generation sector in the United States; Š acquisition, on May 22, 2013, of 26% of Chisholm View Wind Project and Prairie Rose Wind, both operating in wind generation in the United States, in which the Group previously held an interest of 49%. Following the acquisition, the two companies have been consolidated on a line-by-line basis rather than using equity method accounting.

Definitive allocation of the purchase price of a number of companies of the Renewable Energy Division Following the acquisition of control in June 2012 of a number of companies of the Greek Kafireas wind pipeline and 100% of Stipa Nayaá, a Mexican company operating in the wind generation sector, in the 1st Half of 2013, the Group completed the allocation of the purchase price to the assets acquired and the liabilities assumed. More specifically, in both cases the Group: Š recognized certain intangible assets as a result of the completion of the determination of their fair value;

F-368 Š determined the tax effects associated with the above recognition; Š allocated to non-controlling interests of the portion of those assets pertaining to them. The following table summarizes the accounting effects as of the acquisition dates.

Definitive allocation of the purchase prices of the Kafireas pipeline and of Stipa Nayaá Kafireas pipeline Stipa Nayaá Millions of euro Net assets acquired before allocation ...... 1 125 Adjustments for measurement at fair value: – intangible assets ...... 55 14 – deferred tax liabilities ...... (11) (4) – non-controlling interests ...... (9) — Net assets acquired after allocation ...... 36 135 Value of the transaction(1) ...... 58 139 Goodwill 22 4

(1) Including incidental expenses.

Business combinations and acquisitions of joint ventures in the 1st Half of 2013 The following table reports the effects of the main business combinations and acquisitions of joint ventures carried out in the 1st Half of 2013. As regards the business combination with Parque Eólico Talinay Oriente, the Group will calculated the fair value of the assets acquired and the liabilities assumed within 12 months of the acquisition date. Conversely, the business combinations with Chisholm View and Prairie Rose were carried out on a definitive basis immediately and incorporate the remeasurement at fair value of property, plant and equipment in the amounts of €4 million and €1 million, respectively.

F-369 Business combinations and acquisitions of joint ventures in the 1st Half of 2013 Acquisitions of Business combinations joint ventures Parque Eólico Chisholm Talinay View Wind Prairie Rose Oriente Project Wind PowerCrop Millions of euro Property,plantandequipment...... 106 276 223 10 Intangible assets ...... — — — 2 Other non-current assets ...... 21 — — — Cash and cash equivalents ...... — 8 9 — Current assets ...... 19 4 2 5 Non-current liabilities ...... — (124) (108) — Current liabilities ...... (20) (29) (24) (2) Non-controlling interests ...... — (34) (25) — Net assets acquired ...... 126 101 77 15 Goodwill ...... — — — 9 Price of the transaction(1) ...... 126 101 77 24 Cashflowimpact ...... 81(2) 35(3) 27(4) 4(5) Cash flow impact excluding cash and cash equivalentsacquired ...... 81 27 18 4

(1) Including incidental expenses. (2) Net of advances paid in 2012 (€27 million) and the amount still to be paid (€18 million). (3) Net of the value of the interest acquired in 2012, previously accounted for using the equity method (€66 million). (4) Net of the value of the interest acquired in 2012, previously accounted for using the equity method (€50 million). (5) Net of advances paid in 2012 (€8 million) and the amount still to be paid (€12 million).

Effects of Enersis capital increase On March 29, 2013, the capital increase of the Chilean company Enersis was completed in the overall amount of €4,559 million. The capital increase was subscribed by Endesa (60.6%) with the transfer of the equity investments included in Cono Sur Participaciones and by other shareholders (39.4%) in cash. More specifically, the equity investments held directly by Cono Sur Participaciones at the transaction date were: Š Ampla Energia e Serviços, with an interest of 7.70%; Š Ampla Investimentos e Serviços, with an interest of 7.71%; Š Codensa, with an interest of 26.66%; Š Compañía Eléctrica San Isidro, with an interest of 4.39%; Š Eléctrica Cabo Blanco, with an interest of 80.00%; Š Emgesa, with an interest of 21.60%; Š Empresa Distribuidora Sur, with an interest of 6.22%; Š Endesa Brasil, with an interest of 28.48%; Š Endesa Cemsa, with an interest of 55.00%;

F-370 Š Generalima, with an interest of 100.00%; Š Inversiones Distrilima, with an interest of 34.83%; Š Inversora Dock Sud, with an interest of 57.14%; Š Yacylec, with an interest of 22.22%. Since the capital increase was fully subscribed by existing shareholders, after the operation the shareholder base of Enersis was unchanged. For the Enel Group, the transaction qualifies as a disposal of a minority interest to the extent of the dilution produced with the transfer of the assets to Enersis. The following table summarizes the impact of the disposal on the accounts: Effects of the disposal of minority interests pertaining to the Endesa — Latin America CGU

Millions of euro Determination of the value of the interest divested in the Enersis capital increase: Net assets of Cono Sur Participaciones ...... 2,261 Non-controlling interests in those assets ...... (180) Goodwill pertaining to those assets ...... 357 Value of 92.06% of Cono Sur Participaciones ...... 2,438 Interest transferred in Enersis capital increase (39.4%) ...... 961 Determination of price for assets transferred: Capital increase subscribed in cash ...... 1,795 Share pertaining to Enel Group (55.8%) ...... 1,001 Cost of transaction pertaining to Enel Group(1) ...... 42 Price received for disposal ...... 959 Net result on transaction (recognized in reserve from sale of equity holdings without loss of control) ...... (2)

(1) Calculated on basis of total costs incurred of €77 million, net of tax effects and non-controlling interests.

3. Restatement of the balance sheet and the income statement The main impacts of the application, as from January 1, 2013 with retrospective effect, of the new version of “IAS 19 — Employee benefits” on the balance sheet and income statement figures reported for comparative purposes only in these condensed interim consolidated financial statements areasfollows: Š as the corridor approach may no longer be used, all actuarial gains and losses are recognized directly in equity. Accordingly, the amortization accruing in the 1st Half of 2012 in respect of the excess gains and losses outside the corridor as quantified at December 31, 2011, was eliminated from the income statement (€30 million). In addition, the actuarial gains and losses not recognized in application of the previous method were recognized in equity, with a consequent adjustment of the respective defined-benefit obligation and the net plan assets recognized in the balance sheet, net of the theoretical tax effects and amounts pertaining to non-controlling interests; Š as the recognition of past service cost in the income statement may no longer be deferred, the portion not recognized in the periods under review was recognized as an increase in the defined-benefit obligation. Once again, the theoretical tax effects and amounts pertaining to non-controlling interests were also calculated;

F-371 Š in application of the new standard, net interest income on plan assets is recognized in substitution of the expected return on those assets. The impact of that change is not material (about €3 million) and therefore the balances in the income statement for the 1st Half of 2012 were not restated. In addition, at the end of 2012, the Group adopted a new accounting policy for white certificates (energy efficiency certificates or EECs) that characterizes the regulatory requirements as a system cost aimed at achieving energy savings objectives, for which operators subject to the requirement incur costs for the purchase and internal development of the certificates, which are delivered to the competent authorities to meet compliance requirements. This approach involves recognizing the overall cost of compliance with energy efficiency requirements through profit or loss in the accounting period to which the compliance requirement pertains, ascertaining any charge in respect of certificates that are not available at the end of that period (the deficit). The accounting policy previously adopted was based on a characterization of the white certificates as assets used in the production process and, therefore, the related costs were recognized through profit or loss at the time of their actual use for the purpose of compliance with regulatory requirements. In addition, white certificates deriving from multi-year projects were classified under intangible assets and amortized at the time of their use. That amortization has been reclassified appropriately. Finally, as a result of the definitive allocation of the purchase prices of the Kafireas pipeline and of Stipa Nayaá, companies operating in the Renewable Energy Division, which was completed after December 31, 2012, the balance sheet accounts at that date have been restated to reflect the fair value adjustment already discussed in note 2 to the condensed interim consolidated financial statements.

F-372 The following tables show the changes in the consolidated balance sheet and income statement as a result of the above modifications, including the associated tax effects. The impact on the statement of consolidated comprehensive income and the consolidated statement of cash flows is limited to a number of reclassifications among the various components, in line with the figures reported in the balance sheet and income statement. 1st Half

IAS 19R New EEC 2012 2012 effect policy restated

Millions of euro Revenues Revenuesfromsalesandservices...... 40,003 — — 40,003 Otherrevenuesandincome...... 689 — — 689 40,692 — — 40,692 Costs Rawmaterialsandconsumables ...... 22,056 — — 22,056 Services ...... 7,529 — — 7,529 Personnel ...... 2,347 (30) — 2,317 Depreciation,amortizationandimpairmentlosses ...... 2,941 — (11) 2,930 Otheroperatingexpenses ...... 1,317 — (3) 1,314 Capitalizedcosts...... (743) — — (743) 35,447 (30) (14) 35,403 Net income/(charges) from commodity risk management ...... 96 — — 96 Operating income ...... 5,341 30 14 5,385 Financialincome...... 1,497 — — 1,497 Financialexpense...... 2,998 — — 2,998 Share of income/(expense) from equity investments accounted for usingtheequitymethod ...... 45 — — 45 Income before taxes ...... 3,885 30 14 3,929 Incometaxes ...... 1,493 10 12 1,515 Net income from continuing operations ...... 2,392 20 2 2,414 Net income from discontinued operations ...... —— —— Net income for the year (shareholders of the Parent Company and non-controlling interests) ...... 2,392 20 2 2,414 AttributabletoshareholdersoftheParentCompany...... 1,821 12 2 1,835 Attributable to non-controlling interests ...... 571 8 — 579

F-373 IAS 19R Renewable Energy at December 31, 2012 at December 31, 2012 effect Division PPA restated

Millions of euro Property,plantandequipment..... 83,115 — — 83,115 Investmentproperty...... 197 — — 197 Intangibleassets ...... 35,970 — 24 35,994 Deferredtaxassets...... 6,305 511 — 6,816 Equity investments accounted for usingtheequitymethod ...... 1,115 — — 1,115 Non-currentfinancialassets...... 5,518 — — 5,518 Other non-current assets ...... 897 (97) — 800 Total non-current assets ...... 133,117 414 24 133,555 Inventories...... 3,338 — — 3,338 Trade receivables ...... 11,719 — — 11,719 Tax receivables ...... 1,631 — — 1,631 Currentfinancialassets...... 9,381 — — 9,381 Othercurrentassets ...... 2,262 — — 2,262 Cashandcashequivalents ...... 9,891 — — 9,891 Total current assets ...... 38,222 — — 38,222 Assets held for sale ...... 317 — — 317 Total assets ...... 171,656 414 24 172,094 Sharecapital ...... 9,403 — — 9,403 Otherreserves ...... 9,109 (367) — 8,742 Retained earnings (loss carried forward) ...... 18,259 (629) — 17,630 Total equity attributable to the shareholders of the Parent Company ...... 36,771 (996) — 35,775 Non-controlling interests ...... 16,387 (84) 9 16,312 Total shareholders’ equity ...... 53,158 (1,080) 9 52,087 Long-term loans ...... 55,959 — — 55,959 Post-employment and other employeebenefits...... 3,063 1,479 — 4,542 Provisions for risks and charges . . . 8,648 — — 8,648 Deferred tax liabilities ...... 11,753 15 15 11,783 Non-current financial liabilities .... 2,553 — — 2,553 Other non-current liabilities ...... 1,151 — — 1,151 Total non-current liabilities ..... 83,127 1,494 15 84,636 Short-termloans ...... 3,970 — — 3,970 Current portion of long-term loans ...... 4,057 — — 4,057 Tradepayables ...... 13,903 — — 13,903 Incometaxpayable...... 364 — — 364 Current financial liabilities ...... 3,138 — — 3,138 Other current liabilities ...... 9,931 — — 9,931 Total current liabilities ...... 35,363 — — 35,363 Liabilities held for sale ...... 8— — 8 Total liabilities ...... 118,498 1,494 15 120,007 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY .. 171,656 414 24 172,094

F-374 4. Risk management For a more complete discussion of the hedging instruments used by the Group to manage the various risks associated with its business, please see the consolidated financial statements at December 31, 2012. The following sub-sections report the balances for derivatives instruments, grouped by the item of the consolidated balance sheet that contain them.

4.1 Derivatives contracts classified under non-current financial assets — €780 million The following table reports the fair value of derivatives contracts classified under non-current financial assets, broken down by type and designation. at December 31, at June 30, 2013 2012 restated Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 25 5 20 –exchangerates...... 699 890 (191) – commodities ...... 12 7 5 Total ...... 736 902 (166) Fair value hedge derivatives: –interestrates ...... 14 17 (3) –exchangerates...... 14 23 (9) Total ...... 28 40 (12) Trading derivatives: –interestrates ...... 3 4 (1) –exchangerates...... 1 1 — – commodities ...... 12 6 6 Total ...... 16 11 5 TOTAL ...... 780 953 (173)

The cash flow hedge derivatives are essentially related to transactions hedging the exchange rate risk on bond issues in currencies other than the euro using cross currency interest rate swaps. The decline in the fair value was mainly attributable to developments in the euro exchange rate with respect to the other main currencies in the 1st Half of 2013. The cash flow hedge derivatives on interest rates increased largely due to the new hedging of loans for Enel Finance International, Enel Green Power and Enel Distribuzione, which were designated as such during the 1st Half of 2013. Commodity derivatives regard energy derivatives with a fair value of €12 million classified as cash flow hedges. Trading derivatives regard energy transactions by Endesa with a fair value of €9 million and contract for differences entered into by Enel Produzione with a fair value of €3 million.

F-375 4.2 Derivatives contracts classified under current financial assets — € 2,514 million The following table reports the fair value of derivatives contracts classified under current financial assets, broken down by type and designation. at December 31, at June 30, 2013 2012 restated Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 31 — 31 –exchangerates...... 14 41 (27) – commodities ...... 37 16 21 Total ...... 82 57 25 Trading derivatives: –exchangerates...... 73 73 — – commodities ...... 2,359 1,588 771 Total ...... 2,432 1,661 771 TOTAL ...... 2,514 1,718 796

Exchange rate derivatives, whether designated as trading transactions or cash flow hedges, essentially comprise transactions to hedge the exchange rate risk associated with the prices of energy commodities. The changes in the fair value of these derivatives are associated with normal operations. The cash flow hedge derivatives on exchange rates were impacted by the ordinary expiry of a cross currency interest rate swap hedging a bond issue in dollars by Enel Finance International, which at December 2012 had a fair value of €37 million. Commodity derivatives comprise derivatives on energy classified as cash flow hedges with a fair value of €37 million and trading derivatives on energy with a fair value of €100 million, as well as hedges of fuels and other commodities with a fair value of €2,259 million classified as trading transactions as they do not meet the hedge requirements set out in the IAS/IFRS.

F-376 4.3 Derivatives contracts classified under non-current financial liabilities — €2,496 million The following table reports the fair value of the cash flow hedge, fair value hedge and trading derivatives. at December 31, at June 30, 2013 2012 restated Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 503 691 (188) –exchangerates...... 1,904 1,777 127 – commodities ...... 56 16 40 Total ...... 2,463 2,484 (21) Fair value hedge derivatives: ...... — –exchangerates...... 4 5 (1) Total ...... 4 5 (1) Trading derivatives: –interestrates ...... 26 62 (36) –exchangerates...... — 1 (1) – commodities ...... 3 1 2 Total ...... 29 64 (35) TOTAL ...... 2,496 2,553 (57)

The decline in the liability in respect of cash flow hedge derivatives on interest rates was mainly the result of the increase in the yield curve that occurred in the 1st Half of 2013. Cash flow hedge derivatives on exchange rates essentially regard transactions to hedge bonds denominated in currencies other than the euro through cross currency interest rate swaps. The change in the fair value compared with December 31, 2012, reflects changes in the exchange rate of the euro against the hedged currencies, which among other things prompted the reclassification of certain non-current financial assets to non-current financial liabilities in the amount of €116 million. The change in the fair value of trading derivatives on interest rates is essentially attributable to the reclassification of €30 million from non-current to current. Commodity derivatives classified as cash flow hedges regard the hedging of the price of coal and associated shipping costs with a fair value of €51 million and hedges of energy of €5 million.

F-377 4.4 Derivatives contracts classified under current financial liabilities — €2,940 million The following table reports the fair value of the derivatives contracts. at December 31, at June 30, 2013 2012 restated Change Millions of euro Cash flow hedge derivatives: –interestrates ...... 25 — 25 –exchangerates...... 205 84 121 – commodities ...... 277 134 143 Total ...... 507 218 289 Trading derivatives: –interestrates ...... 67 59 8 –exchangerates...... 29 38 (9) – commodities ...... 2,337 1,713 624 Total ...... 2,433 1,810 623 TOTAL ...... 2,940 2,028 912

The change in the fair value of cash flow hedge derivatives on interest rates and exchange rates is essentially due to the reclassification of the liability from non-current to current. Commodity cash flow hedge derivatives comprise contracts on energy classified with a fair value of €5 million and hedges of gas, coal and other commodities amounting to €272 million. Trading derivatives include contracts regarding fuels and other commodities with a fair value of €2,276 million and embedded derivatives related to an energy sale and purchase contract in Slovakia with a fair value of €61 million.

5. Segment information The representation of divisional performance presented here is based on the approach used by management in monitoring Group performance for the two periods under review. For more information on developments in performance and financial position during the period, please see the appropriate section of this Report.

F-378 Performance by segment 1st Half of 2013(1) Iberia and Other, Infra. & Latin Renewable eliminations Sales GEM Networks America Int’l Energy and adjustments Total Millions of euro Revenues from third parties ...... 8,635 9,421 1,741 15,601 3,500 1,226 33 40,157 Revenues from other segments ...... 77 2,731 2,043 35 317 276 (5,479) — Total revenues ...... 8,712 12,152 3,784 15,636 3,817 1,502 (5,446)40,157 Total costs ...... 8,186 11,441 1,818 11,844 3,248 549 (5,477)31,609 Net income/(charges) from commodity risk management ...... (49) (44) — (178) (4) 20 — (255) Depreciation and amortization ...... 45 249 484 1,350 247 247 55 2,677 Impairment losses/ Reversals ...... 242 — 3 88 56 59 — 448 Operating income ...... 190 418 1,479 2,176 262 667 (24) 5,168 Capital expenditure ..... 24 96 483 803 376 552 25 2,359

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period.

1st Half of 2012 restated (1)(2) Iberia and Other, Infra. & Latin Renewable eliminations Sales GEM Networks America Int’l Energy and adjustments Total Millions of euro Revenues from third parties ...... 9,332 8,191 1,653 16,434 3,942 1,086 54 40,692 Revenues from other segments ...... 76 3,113 2,131 61 331 246 (5,958) — Total revenues ...... 9,408 11,304 3,784 16,495 4,273 1,332 (5,904)40,692 Total costs ...... 9,100 10,683 1,809 12,777 3,569 518 (5,983)32,473 Net income/(charges) from commodity risk management ...... 20 73 — (44) 54 (7) — 96 Depreciation and amortization ...... 41 309 458 1,404 226 221 65 2,724 Impairment losses/ Reversals ...... 161 — 2 95 (64) 16 (4) 206 Operating income ...... 126 385 1,515 2,175 596 570 18 5,385 Capital expenditure ..... 20 138 666 875(3) 515(4) 457 91 2,762

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period.

F-379 (2) The figures have been restated to take account of the impact of the change, with retrospective effect, in the accounting treatment of employee benefits under the new version of IAS 19, and in the accounting policy used for white certificates. For further information please see note 3. (3) Does not include €43 million regarding units classified as “Held for sale”. (4) Does not include €1 million regarding units classified as “Held for sale”.

Financial position by segment At June 30, 2013 Iberia and Other, Infra. & Latin Renewable eliminations and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Property, plant and equipment...... 30 9,712 15,226 37,129 10,029 9,941 565 82,632 Intangible assets ..... 763 662 109 28,254 2,748 2,187 290 35,013 Trade receivables .... 4,546 2,883 2,256 3,738 494 670 (2,205) 12,382 Other ...... 229 2,262 1,188 2,089 660 249 (197) 6,480 Operating assets .... 5,568 15,519 18,779 71,210 13,931(1) 13,047(3) (1,547) 136,507 Tradepayables...... 3,246 3,001 2,486 3,547 673 653 (2,460) 11,146 Sundry provisions .... 291 1,410 2,531 4,314 3,125 193 765 12,629 Other ...... 2,071 604 2,770 3,193 1,187 409 (150) 10,084 Operating liabilities ...... 5,608 5,015 7,787 11,054 4,985(2) 1,255(4) (1,845) 33,859

(1) Of which 202 million regarding units classified as “Held for sale”. (2) Of which €1 million regarding units classified as “Held for sale”. (3) Of which €20 million regarding units classified as “Held for sale”. (4) Of which €2 million regarding units classified as “Held for sale”.

At December 31, 2012 restated (1) Iberia and Other, Infra. & Latin Renewable eliminations and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Property, plant and equipment...... 34 9,833 15,212 38,481 10,085 9,124 559 83,328 Intangible assets ..... 780 687 125 29,037 2,840 2,226 299 35,994 Trade receivables .... 4,198 3,564 2,149 3,746 773 571 (3,282) 11,719 Other ...... 261 2,164 722 2,524 463 231 (165) 6,200 Operating assets .... 5,273 16,248 18,208 73,788 14,161(2) 12,152 (2,589) 137,241 Tradepayables...... 3,874 3,765 2,669 5,154 1,058 1,072 (3,688) 13,904 Sundry provisions .... 306 1,363 2,585 5,023 2,972 192 749 13,190 Other ...... 1,886 533 2,943 3,154 1,230 479 (88) 10,137 Operating liabilities ...... 6,066 5,661 8,197 13,331 5,260(3) 1,743 (3,027) 37,231

(1) The figures have been restated to take account of the impact of the change, with retrospective effect, of the accounting policy used for employee benefits under the new version of IAS 19, as well as the completion of the allocation of the purchase price of the assets acquired and the liabilities assumed of the Kafireas pipeline and of Stipa Nayaá. For further information please see note 3.

F-380 (2) Of which €218 million regarding units classified as “Held for sale”. (3) Of which €2 million regarding units classified as “Held for sale”. The following table reconciles segment assets and liabilities and the consolidated figures. at Dec. 31, 2012 at June 30, 2013 restated Millions of euro Total assets ...... 169,356 172,094 Equity investments accounted for using the equity method ..... 1,119 1,115 Non-current financial assets ...... 5,504 5,518 Long-term tax receivables included in “Other non-current assets” ...... 501 401 Current financial assets ...... 11,017 9,381 Cash and cash equivalents ...... 5,714 9,891 Deferred tax assets ...... 6,744 6,816 Tax receivables ...... 2,239 1,631 Financial and tax assets of “Assets held for sale” ...... 11 100 Segment assets ...... 136,507 137,241

Total liabilities ...... 116,634 120,007 Long-termloans...... 54,077 55,959 Non-current financial liabilities ...... 2,496 2,553 Short-term loans ...... 4,930 3,970 Current portion of long-term loans ...... 3,333 4,057 Current financial liabilities ...... 3,891 3,138 Deferred tax liabilities ...... 11,426 11,783 Incometaxpayableandothertaxpayables ...... 2,603 1,309 Financial and tax liabilities of “Liabilities held for sale” ...... 19 7 Segment liabilities ...... 33,859 37,231

F-381 Information on the Consolidated Income Statement

Revenues 6. Revenues — €40,157 million 1st Half

2012 2013 restated Change Millions of euro Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies ...... 33,789 34,914 (1,125) Revenuesfromthesaleandtransportofnaturalgastoendusers ...... 2,608 2,461 147 Revenuesfromfuelsales ...... 1,323 940 383 Connection fees for the electricity and gas networks ...... 490 695 (205) Remeasurement at fair value after changes in control ...... 21 5 16 Gains on disposal of assets ...... 21 2 19 Other...... 1,905 1,675 230 Total ...... 40,157 40,692 (535)

“Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies” totaled €33,789 million (€34,914 million in the 1st Half of 2012). Among other items, they include €16,509 in revenues from the sale of electricity to end users (€18,211 million in the 1st Half of 2012), €9,391 million in revenues from the sale of electricity to wholesale buyers (€8,500 million in the 1st Half of 2012), €2,235 million in revenues from electricity trading activities (€2,682 in the 1st Half of 2012), and €4,797 million in revenues from the transport of electricity (€4,556 million in the 1st Half of 2012). “Revenues from the sale and transport of natural gas to end users” amounted to €2,608 million and include €1,232 million in revenues from the sale of natural gas in Italy (€1,192 million in the 1st Half of 2012), €280 million in revenues from the transport of natural gas in Italy (€255 million in the 1st Half of 2012), and sales of natural gas abroad amounting to €1,096 million (€1,014 million in the 1st Half of 2012). “Revenues from fuel sales” came to €1,323 million in the 1st Half of 2013, including sales of natural gas of €1,115 million (€738 million in the 1st Half of 2012) and sales of other fuels of €208 million (€202 million in the 1st Half of 2012). The increase is attributable to the rise in the average prices of natural gas. The gain from the “remeasurement at fair value after changes in control” came to €21 million in the 1st Half of 2013 and essentially regards the remeasurement at fair value of the net assets of Buffalo Dunes Wind Project (proportionate to the remaining stake of 49% held in that company) following disposal of 51% of the company, which led to the loss of control. The “gains on disposal of assets” in the 1st Half of 2013 amounted to €21 million (€2 million in the 1st Half of 2012) and regard the capital gain on the sale of 51% of Buffalo Dunes Wind Project. “Other” revenues amounted to €1,905 million in the 1st Half of 2013, an increase of €230 million compared with the same period of the previous year. Of the total, €301 million is attributable to the government grant to the Argentine company Edesur under the provisions of Resolución no. 250/13 regarding the Mecanismo Monitoreo de Costes.

F-382 Costs 7. Costs — €34,734 million 1st Half

2012 2013 restated Change Millions of euro – Electricity ...... 14,123 14,603 (480) –Fuelandgas...... 6,248 6,822 (574) –Materials...... 509 631 (122) Total costs of raw materials and consumables ...... 20,880 22,056 (1,176) – Electricity and gas wheeling ...... 4,753 4,727 26 – Leases and rentals ...... 311 293 18 –Otherservices ...... 2,441 2,509 (68) Total services ...... 7,505 7,529 (24) Personnel costs ...... 2,388 2,317 71 Depreciation, amortization and impairment losses ...... 3,125 2,930 195 Other operating expenses ...... 1,495 1,314 181 –Capitalizedmaterialscosts...... (305) (375) 70 – Capitalized personnel costs ...... (354) (368) 14 Total capitalized costs ...... (659) (743) 84 Total costs ...... 34,734 35,403 (669)

Purchases of “electricity” comprise those from the Single Buyer in the amount of €2,534 million (€3,049 million in the 1st Half of 2012) and purchases from the Energy Markets Operator (EMO) in the amount of €2,574 million (€1,639 million in the 1st Half of 2012). Purchases of “fuel and gas” include €3,368 million in natural gas purchases (€3,425 million in the 1st Half of 2012) and €2,880 million in purchases of other fuels (€3,397 million in the 1st Half of 2012). Costs for “materials” decreased by €122 million over the 1st Half of 2012 mainly as a result a decline in provisioning of EUAs and CERs. “Personnel costs” in the 1st Half of 2013 amounted to €2,388 million, up €71 million or 3.1%. Excluding the charge in respect of the transition-to-retirement plan introduced in Italy in 2012 and a number of non-recurring items, including the recognition of a number of costs in Argentina, personnel costs were essentially in line with their level in the 1st Half of 2012. The Enel Group’s workforce at June 30, 2013, numbered 73,537 employees (73,702 at December 31, 2012). The Group’s workforce decreased by 165 employees during the period, mainly accounted for by the balance between new hirings and terminations (a decline of 192 employees) and the change in the scope of consolidation following the acquisition of PowerCrop (27 employees) within the Italian operations of the Renewable Energy Division.

F-383 The following table shows depreciation, amortization and impairment losses for the periods under review: 1st Half 2012 2013 restated Change Millions of euro Depreciation ...... 2,276 2,279 (3) Amortization...... 401 445 (44) Impairment losses ...... 448 206 242 Total ...... 3,125 2,930 195

“Impairment losses” in the 1st Half of 2013 mainly regard writedowns of trade receivables amounting to €380 million (€179 million in the 1st Half of 2012). It also includes impairment losses with respect to assets held for sale of Marcinelle Energie (€16 million) recognized for the purpose of aligning the value of net assets held for sale with the estimated realizable value, as well as the impairment losses recognized in respect of a number of photovoltaic panel manufacturing facilities in Italy and geothermal plants in Nicaragua totaling €42 million.

Net income/(charges) from commodity risk management 8. Net income/(charges) from commodity risk management — €(255) million Net charges from commodity risk management reflects €228 million in net realized charges on positions closed during the period and €27 million in net unrealized charges on open positions in commodity derivatives at June 30, 2013. 1st Half 2013 2012 restated Change Millions of euro Income Unrealizedonpositionsopenattheendoftheperiod...... 1,491 1,575 (84) Realizedonpositionsclosedduringtheperiod...... 88 188 (100) Total income ...... 1,579 1,763 (184) Charges Unrealizedonpositionsopenattheendoftheperiod...... (1,518) (1,667) 149 Realizedonpositionsclosedduringtheperiod...... (316) — (316) Total charges ...... (1,834) (1,667) (167) NET INCOME/(CHARGES) FROM COMMODITY RISK MANAGEMENT ...... (255) 96 (351) – of which trading/non-IFRS-IAS hedge derivatives ...... (112) 106 (218) – of which ineffective portion of CFH ...... (1) — (1)

F-384 9. Financial income/(expense) — €(1,267) million 1st Half 2013 2012 restated Change Millions of euro Interest and other income from financial assets ...... 162 179 (17) Foreignexchangegains ...... 397 342 55 Incomefromderivativeinstruments ...... 555 594 (39) Incomefromequityinvestments...... 73 201 (128) Otherincome...... 259 181 78 Total financial income ...... 1,446 1,497 (51) Interestandotherchargesonfinancialdebt...... 1,413 1,487 (74) Foreign exchange losses ...... 301 689 (388) Expenseonderivativeinstruments...... 738 381 357 Accretion of post-employment and other employee benefits ...... 125 181 (56) Accretionofotherprovisions ...... 105 98 7 Chargesonequityinvestments ...... 2 1 1 Othercharges ...... 29 161 (132) Total financial expense ...... 2,713 2,998 (285) TOTAL FINANCIAL INCOME/(EXPENSE) ...... (1,267) (1,501) 234

Financial income came to €1,446 million, a decrease of €51 million compared with the same period of the previous year. This reduction is largely due to a decrease in income from equity investments, which in the 1st Half of 2013 include the gain on the disposal of Medgaz in the amount of €64 million, while in the corresponding period of 2012 it included the gain on the disposal of the shareholding in Terna in the amount of €185 million. The decrease was partially offset by an increase of €55 million in foreign exchange gains and an increase of €78 million in other income, essentially attributable to a rise in financial income (€43 million) attributed to the value of the financial assets recognized in application of IFRIC 12 in Brazil and to interest income (€43 million) paid to Edesur in Argentina in respect of the government grant it received. Financial expense totaled €2,713 million, a decrease of €285 million compared with the 1st Half of 2012. More specifically, the increase in in the expense on derivative instruments (€357 million) was more than offset by the decrease in interest and other charges on financial debt (€74 million), foreign exchange losses (€388 million) and other charges (essentially due to the writeback of the value of the receivable from the National Nuclear Fund in Slovakia in the amount of €66 million and other minor charges in respect of items covered by fair value hedges in the amount of €20 million).

10. Income taxes — €1,473 million 1st Half 2013 2012 restated Change

Millions of euro Currenttaxes ...... 1,705 1,574 131 Adjustmentsforincometaxesrelatedtoprioryears ...... (146) (43) (103) Deferred tax liabilities ...... (59) (20) (39) Deferred tax assets ...... (27) 4 (31) Total ...... 1,473 1,515 (42)

F-385 Income taxes for the 1st Half of 2013 amounted to €1,473 million, equal to 37.2% of taxable income, compared with 38.6% in the 1st Half of 2012. The change in the tax liability reflects the positive impact of the adjustment of income taxes for previous years, which include the adjustment (recognized in the amount of €56 million in the 1st Half of 2013 following the refinement of estimates of amounts to be reimbursed and interpretive clarifications of certain mechanisms) of the receivable from the application for reimbursement of IRES/IRAP in accordance with Article 4, paragraph 12, of Decree Law 16 of March 2, 2012. These effects were partially offset by the impact of the permanent non-deductibility of certain accruals to provisions for risks and the fact that in the 1st Half of 2012 the gain from the disposal of the interest in Terna was essentially tax exempt.

11. Basic and diluted earnings per share Both metrics are calculated on the basis of the average number of ordinary shares in the period, equal to 9,403,357,795 shares, with diluted earnings per share adjusted for the diluting effect of outstanding stock options (zero in both periods). 1st Half 2013 2012 restated Change Net income from continuing operations pertaining to shareholders of the Parent Company (millions of euro) .... 1,680 1,835 (155) Net income from discontinued operations pertaining to shareholders of the Parent Company (millions of euro) .... — — — Net income pertaining to shareholders of the Parent Company (millions of euro) ...... 1,680 1,835 (155) Numberofordinaryshares ...... 9,403,357,795 9,403,357,795 — Dilutiveeffectofstockoptions ...... — — — Basic and diluted earnings from continuing operations per share(euro) ...... 0.18 0.20 (0.02) Basic and diluted earnings from discontinued operations per share(euro) ...... — — — Basicanddilutedearningspershare(euro)...... 0.18 0.20 (0.02) Please note that existing stock option plans for top management could dilute basic earnings per share in the future. Between the balance sheet date and the date of publication of the financial statements, no events took place that changed the number of ordinary shares or potential ordinary shares in circulation at the end of the year.

F-386 Information on the Consolidated Balance Sheet

12. Property, plant and equipment — €82,416 million The breakdown of property, plant and equipment at June 30, 2013 is as follows: Millions of euro Total at January 1, 2013 restated ...... 83,115 Capitalexpenditure ...... 2,160 Exchange rate differences ...... (1,015) Changeinscopeofconsolidation...... 551 Depreciation ...... (2,268) Impairment losses and writebacks ...... (47) Disposalsandotherchanges ...... (80) Total at June 30, 2013 ...... 82,416

Capital expenditure in the 1st Half of 2013 amounted to €2,160 million, down €329 million compared with the 1st Half of 2012. The table below summarizes capital expenditure in the 1st Half of 2013 by category: 1st Half 2012 2013 restated Millions of euro Power plants: –thermal...... 236 330 – hydroelectric ...... 183 188 –geothermal...... 84 83 –nuclear ...... 306 361 –alternativeenergyresources ...... 431 324 Total power plants ...... 1,240 1,286 Electricity distribution network ...... 890 1,151 Land and buildings, other goods and equipment ...... 30 52 TOTAL(1) ...... 2,160 2,489

(1) The figure for the 1st Half of 2012 does not include €44 million in capital expenditure with regard to assets classified at “Held for sale”. Capital expenditure on power plants totaled €1,240 million, a decrease of €46 million over the same period of the previous year, largely attributable to lower investments in plants for generating power from conventional thermal and nuclear power in Italy and Eastern Europe. These factors were partially offset by greater capital expenditure in plants by the Renewable Energy Division. Investments in the electricity distribution network amounted to €890 million, down €261 million compared with the 1st Half of 2012. The “change in scope of consolidation” for the period mainly regarded the acquisition of the US companies Chisholm View Wind Project and Prairie Rose Wind (€499 million), the acquisition of 100% of Parque Eólico Talinay Oriente, a company operating in the wind generation sector in Chile (€106 million), and the acquisition of 50% of PowerCrop, a company operating in the biomass generation sector in Italy (€10 million). These factors were partially offset by the effect of the deconsolidation of Buffalo Dunes Wind Project in the amount of €64 million.

F-387 “Impairment losses” on property, plant and equipment (€47 million) mainly regard a number of photovoltaic panel manufacturing facilities in Italy and a number of geothermal generation plants in Nicaragua.

13. Intangible assets — €35,014 million The breakdown of intangible assets at June 30, 2013 was as follows:

Other intangible Total intangible assets Goodwill assets Millions of euro Total at January 1, 2013 restated ...... 20,076 15,918 35,994 Capitalexpenditure...... 197 — 197 Foreign exchange differences ...... (696) (74) (770) Changeinscopeofconsolidation ...... (26) 9 (17) Amortization ...... (399) — (399) Impairment losses and writebacks ...... (4) (1) (5) Otherchanges ...... 17 (3) 14 Balance at June 30, 2013 ...... 19,165 15,849 35,014

The change in intangible assets, with the exception of goodwill, is essentially attributable to foreign exchange losses in the period of €696 million and amortization of €399 million. These effects were partially offset by investments amounting to €197 million. The change in goodwill is essentially attributable to foreign exchange losses in the amount of €74 million and changes in the scope of consolidation totaling €9 million. The latter regards the acquisition of 50% in PowerCrop, a company operating in the biomass generation sector. Goodwill breaks down as follows:

at December 31, at June 30, 2013 2012 restated Change Millions of euro Endesa ...... 11,867 11,867 — Enel OGK-5 ...... 1,072 1,145 (73) Enel Green Power Group(1) ...... 905 897 8 Slovenskéelektrárne...... 697 697 — EnelEnergia ...... 579 579 — EnelDistributieMuntenia ...... 547 548 (1) EnelEnergieMuntenia...... 113 113 — RusEnergoSbyt...... 42 45 (3) Nuove Energie ...... 26 26 — EnelStoccaggi ...... 1 1 — Total ...... 15,849 15,918 (69)

(1) Includes Enel Green Power España, Enel Green Power Latin America, Enel Panama, Inelec, Enel Green Power North America, Enel Green Power Hellas, Enel Green Power France, Enel Green Power Romania, Enel Green Power Bulgaria and Enel Green Power Portoscuso and other minor companies. The CGUs to which goodwill has been allocated are tested for impairment annually. The test is conducted on the basis of the cash flows set out in the 2013-22 Business Plan prepared by

F-388 management, which are discounted using specific discount rates. The key assumptions used in determining the value in use of the individual CGUs and the sensitivity analyses are reported in the consolidated financial statements for 2012. The consolidated results for the 1st Half of 2013, and in particular those of the Endesa-Iberian peninsula CGU, fully confirmed the targets set in the Business Plan. The main assumptions applied in determining value in use remain sustainable, taking due account of the discussion in note 28 below.

14. Deferred tax assets and liabilities — €6,744 million and €11,426 million at December 31, at June 30, 2013 2012 restated Change Millions of euro Deferred tax assets ...... 6,744 6,816 (72) Deferred tax liabilities ...... 11,426 11,783 (357) Of which: Non-offsettable deferred tax assets ...... 2,520 2,311 209 Non-offsettable deferred tax liabilities ...... 3,993 5,214 (1,221) Excess net deferred tax liabilities after any offsetting . . . 3,209 2,064 1,145 In addition to the change in deferred tax liabilities due to foreign exchange differences, the rise in deferred tax assets and liabilities is also attributable to the effect recognized through the income statement of deferred taxation on differences between depreciation and amortization calculated for tax purposes and that calculated on the basis of the useful lives of the assets.

15. Equity investments accounted for using the equity method — €1,119 million Equity investments in associated companies accounted for using the equity method are as follows: at December 31, 2012 restated at June 30, 2013 Income Change in scope % holding Other changes % holding effect of consolidation Millions of euro SeverEnergia ..... 292 19.6% 4 — (18) 278 19.6% Elica2 ...... 134 30.0% — 1 — 135 30.0% Buffalo Dunes Wind Project . . . — — — 63 70 133 49.0% EnelReteGas..... 125 14.8% 6 — (18) 113 14.8% LaGeo ...... 103 36.2% 17 — (30) 90 36.2% CESI...... 35 42.7% 2 — — 37 42.7% Endesa Gas T&D...... 32 20.0% (3) — 1 30 20.0% Tecnatom ...... 29 45.0% — — — 29 45.0% Chisholm View Wind Project . . . 60 49.0% 6 (66) — — Prairie Rose Wind ...... 48 49.0% 2 (50) — — Other ...... 257 21 (3) (1) 274 Total ...... 1,115 55 (55) 4 1,119

F-389 The “change in scope of consolidation” item includes €63 million in respect of the sale of 51% of the Buffalo Dunes Wind Project, a company previously consolidated on a full line-by-line basis and now accounted for using the equity method. That change was partially offset by the acquisition of control of Chisholm View Wind Project and Prairie Rose Wind for a total amount of €116 million, which had been accounted for using the equity method but following the acquisition of an additional 26% stake in share capital are now consolidated on a full line-by-line basis. “Other changes” regarding Buffalo Dunes Wind Project concern that company’s capital increase following the loss of control after the disposal noted above.

16. Non-current financial assets — €5,504 million at December 31, at June 30, 2013 2012 restated Change Millions of euro Equityinvestmentsinothercompanies...... 303 362 (59) Receivables and securities included in net financial debt (see note 19.3) ...... 3,695 3,576 119 Derivatives contracts (see note 4.1) ...... 780 953 (173) Service concession arrangements ...... 609 594 15 Prepaid non-current financial expense ...... 117 33 84 Total ...... 5,504 5,518 (14)

“Equity investments in other companies” includes investments measured at fair value in the amount of €209 million, while the remainder of €94 million regarded investments whose fair value could not be readily determined and, in the absence of plans to sell the holdings, were therefore recognized at cost less impairment losses. The item also includes the investment in Bayan Resources in the amount of €193 million (€222 million at December 31, 2012).

17. Trade receivables — €12,382 million Trade receivables from customers are recognized net of provisions for doubtful accounts, which at the end of the period came to €1,566 million, compared with an opening balance of €1,421 million. The table below shows the changes in these provisions. Millions of euro Total at January 1, 2013 restated ...... 1,421 Accruals...... 380 Utilization ...... (214) Otherchanges ...... (21) Total at June 30, 2013 ...... 1,566

18. Current financial assets — €11,017 million at December 31, at June 30, 2013 2012 restated Change Millions of euro Current financial assets included in net financial position (see note 19.4) ...... 8,416 7,571 845 Derivatives contracts (see note 4.2) ...... 2,514 1,718 796 Other...... 87 92 (5) Total ...... 11,017 9,381 1,636

F-390 19. Net financial position and long-term financial receivables and securities — €44,515 million The following table reports the net financial position and long-term financial receivables and securities on the basis of the items on the consolidated balance sheet. at December 31, Notes at June 30, 2013 2012 restated Change Millions of euro Long-termloans ...... 19.1 54,077 55,959 (1,882) Short-term loans ...... 19.2 4,930 3,970 960 Current portion of long-term loans ...... 19.1 3,333 4,057 (724) Non-current financial assets ...... 19.3 (3,695) (3,576) (119) Current financial assets ...... 19.4 (8,416) (7,571) (845) Cash and cash equivalents ...... 19.5 (5,714) (9,891) 4,177 Total ...... 44,515 42,948 1,567

Pursuant to the CONSOB instructions of July 28, 2006, the following table reports the net financial position at June 30, 2013, and at December 31, 2012, reconciled with net financial debt as provided for in the presentation methods of the Enel Group. at December 31, at June 30, 2013 2012 restated Change Millions of euro Cash and cash equivalents on hand ...... 616 1,027 (411) Bank and post office deposits ...... 5,098 8,864 (3,766) Securities ...... 28 42 (14) Liquidity ...... 5,742 9,933 (4,191) Short-term financial receivables ...... 2,571 1,923 648 Factoring receivables ...... 232 288 (56) Short-term portion of long-term financial receivables . . . 5,585 5,318 267 Current financial receivables ...... 8,388 7,529 859 Bankdebt...... (88) (283) 195 Commercialpaper ...... (4,404) (2,914) (1,490) Short-term portion of long-term bank debt ...... (951) (714) (237) Bonds and preference shares (short-term portion) ...... (2,084) (3,115) 1,031 Other loans (short-term portion) ...... (298) (228) (70) Other short-term financial payables ...... (438) (773) 335 Total short-term financial debt ...... (8,263) (8,027) (236) Net short-term financial position ...... 5,867 9,435 (3,568) Debt to banks and financing entities ...... (12,780) (13,282) 502 Bonds and preference shares ...... (39,992) (41,509) 1,517 Otherloans ...... (1,305) (1,168) (137) Long-term financial position ...... (54,077) (55,959) 1,882 NET FINANCIAL POSITION as per CONSOB instructions ...... (48,210) (46,524) (1,686) Long-term financial receivables and securities ...... 3,695 3,576 119 NET FINANCIAL DEBT ...... (44,515) (42,948) (1,567)

F-391 19.1 Long-term loans (including the portion falling due within 12 months) — €57,410 million The aggregate includes long-term liabilities in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within 12 months. at December 31, at June 30, 2013 2012 restated Change Of which Of which falling current due at more Total portion than 12 months Millions of euro Bonds ...... 42,076 2,084 39,992 44,443 (2,367) Preferenceshares ...... — — — 181 (181) Bankloans ...... 13,731 951 12,780 13,996 (265) Otherloans...... 1,603 298 1,305 1,396 207 Total ...... 57,410 3,333 54,077 60,016 (2,606)

The following table shows long-term debt and repayment schedules at June 30, 2013, in respect of bonds and preference shares, grouped by loan and interest rate type. at December 31, 2012 at June 30, 2013 restated Portion falling Carrying Current due at more Carrying Maturing amount Fair value portion than 12 months amount Fair value Millions of euro Bonds: – listed, fixed rate ...... 2013-2097 28,399 29,871 776 27,623 29,882 31,341 – listed, floating rate ...... 2013-2031 6,442 6,601 1,248 5,194 6,507 6,552 – unlisted, fixed rate ...... 2014-2039 5,746 5,927 — 5,746 6,460 6,997 – unlisted, floating rate ...... 2013-2032 1,489 1,291 60 1,429 1,594 1,339 Total ...... 42,076 43,690 2,084 39,992 44,443 46,229 Preference shares: – floating rate ...... 2013(1) — — — — 181 181 Total ...... — — — — 181 181

1) The preference shares issued by Endesa Capital Finance LLC are perpetual. The option for early redemption at par (originally as from 2013) was exercised in March 2013. The balance for bonds is stated net of €711 million relating to the unlisted floating-rate “Special series of bonds reserved for employees 1994-2019”, which the Parent Company holds in portfolio, while Enel.Re holds bonds issued by Enel SpA totaling €30 million.

F-392 The table below reports long-term financial debt by currency and interest rate.

Long-term financial debt by currency and interest rate at December 31, at June 30, 2013 2012 restated at June 30, 2013 Nominal Current average Current effective Balance value Balance interest rate interest rate Millions of euro Euro ...... 41,135 41,449 42,777 3.66% 3.84% USdollar ...... 8,074 8,100 8,380 5.87% 6.12% Pound sterling ...... 3,907 3,955 4,102 5.80% 5.91% Colombianpeso...... 1,446 1,446 1,600 7.70% 7.70% Brazilian real ...... 765 767 839 11.20% 11.50% Swissfranc...... 590 592 603 2.85% 2.91% Chileanpeso/UF...... 502 516 532 5.50% 7.60% Peruviansol...... 311 311 349 6.70% 6.70% Russianruble...... 257 257 347 8.14% 8.14% Japaneseyen ...... 267 267 304 2.35% 2.38% Othercurrencies ...... 156 156 183 Total non-euro currencies ...... 16,275 16,367 17,239 TOTAL ...... 57,410 57,816 60,016

Change in the nominal value of long-term debt Change Change in Exchange at December 31, in own scope of New rate at June 30, 2012 restated Repayments bonds consolidation financing differences 2013 Millions of euro Bonds ...... 44,794 (2,415) (78) — 508 (394) 42,415 Preference shares ...... 181 (181) — — — — — Bankloans..... 14,066 (787) — — 544 (26) 13,797 Otherloans .... 1,396 (72) — 267 19 (6) 1,604 Total ...... 60,437 (3,455) (78) 267 1,071 (426) 57,816

Compared with December, 31 2012, the nominal value of long-term debt decreased by €2,621 million, which is the net effect of €3,455 million in repayments, €1,071 million in new financing, €78 million in changes in holdings of own bonds, €426 million in foreign exchange losses and €267 million due to the change in the scope of consolidation, mainly following the acquisition of a number of companies operating in renewables generation in the United States that had previously entered into tax partnership agreements. More specifically, the main repayments in the 1st Half of 2013 comprised: Š bonds and preference shares in the amount of €2,596 million, essentially composed of: Š $1,000 million in respect of a fixed-rate bond issued by Enel Finance International, maturing in January 2013; Š €700 million in respect of fixed-rate bonds issued by International Endesa, maturing in February 2013;

F-393 Š €181 million in respect of the early repayment of Endesa Capital Finance preference shares in March 2013; Š €750 million in respect of a fixed-rate bond, issued by Enel SpA, maturing in June 2013; Š €207 million in respect of bonds issued by Group companies, maturing in the 1st Half of 2013; Š bank loans of €787 million, of which: Š €283 million in respect of repayments of revolving credit lines by Endesa; Š €138 million in respect of floating rate bank loans by Endesa; Š €100 million in respect of repayments of revolving credit lines by Enel SpA; Š €266 million in respect of other bank loans of Group companies, maturing in the 1st Half of 2013; Š other loans in the amount of €72 million. The main financing contracts finalized in the 1st Half of 2013 include: Š on January 15, 2013, Enel SpA renegotiated a bilateral revolving credit facility in the total amount of €500 million, falling due in 2014; Š on February 8, 2013, Enel SpA and Enel Finance International agreed a forward starting revolving credit line of about €9.4 billion falling due in April 2018, which will replace the current €10 billion revolving credit line as from the expiry of the latter, which is scheduled for 2015 under the terms of the contract; Š on March 18, 2013, Enel Latin America entered into a 5-year loan agreement worth $100 million; The main financing operations carried out in the 1st Half of 2013 include: Š the private placement in February, March and April under the Global Medium-Term Notes program of bonds by Enel Finance International, with an Enel guarantee, in the total amount of €485 million, with the following characteristics: Š €100 million fixed rate 5%, maturing on February 18, 2023; Š €50 million floating rate, maturing on March 27, 2023; Š €50 million floating rate, maturing on April 4, 2025; Š €50 million fixed rate 4.875%, maturing on April 19, 2028; Š €180 million fixed rate 4.45%, maturing on April 23, 2025; Š €55 million fixed rate 4.75%, maturing on April 26, 2027; Š an increase in drawings by Slovenské elektrárne on committed revolving credit facilities in the amount of €130 million; Š drawings by Endesa on a EIB loan in the amount of €75 million; Š drawings by Enel Green Power International on floating-rate bank loans in the amount of €85 million; Š drawings by Enel Latin America on floating-rate bank loans in the amount of €78 million; Š drawings by Inelec on fixed-rate bank loans in the amount of €76 million. At June 30, 2013, 24% of net financial debt paid floating interest rates (17% at December, 31, 2012). Taking account of cash flow hedges for interest rate risk considered effective under the provisions of the IFRS-EU, exposure to interest rate risk at June 30, 2013, was 10% (3% at December 31, 2012). If

F-394 account is also taken of interest rate derivatives used as hedges but which do not qualify for hedge accounting, the residual exposure of net financial debt to interest rate risk falls to 8% (1% at December 31, 2012). The Group’s main long-term financial debts are governed by covenants containing undertakings by the borrowers (Enel, Endesa and the other Group companies) and in some cases Enel SpA as guarantor that are commonly adopted in international business practice. Readers are invited to refer to the 2012 consolidated financial statements for a detailed review of their nature. In addition, on February 8, 2013, Enel SpA and Enel Finance International agreed a credit facility with a pool of banks in the amount of €9.4 billion (“Forward Start Facility”), which provides for “negative pledge”, “pari passu”, “change of control” and “event of default” clauses. As of the date of these condensed interim consolidated financial statements, these parameters were compliant and there were no events of default or restrictions on the use of the loans.

19.2 Short-term loans — €4,930 million At June 30, 2013, short-term loans amounted to €4,930 million, an increase of €960 million compared with December 31, 2012. They break down as follows:

at December 31, at June 30, 2013 2012 restated Change Millions of euro Short-term amounts due to banks ...... 88 283 (195) Commercialpaper ...... 4,404 2,914 1,490 Cashcollateralandotherfinancingonderivatives...... 313 691 (378) Other short-term financial payables ...... 125 82 43 Total ...... 4,930 3,970 960

Commercial paper regards €3,641 million in issues outstanding at the end of December 2012 within the framework of the €6,000 million program launched in November 2005 by Enel Finance International and guaranteed by Enel SpA, which was renewed in April 2010, as well as €943 million under the program of Endesa Internacional (now Endesa Latinoamérica) and Enersis totaling €3,306 million. The nominal value of the commercial paper was €4,406 million, denominated in euros (€4,040 million), US dollars (equal to €239 million), Swiss francs (equal to €86 million) and British pounds (equal to €41 million). Issues not denominated in euros are fully hedged against exchange rate risk with currency swaps.

19.3 Non-current financial assets included in debt — €3,695 million at December 31, at June 30, 2013 2012 restated Change Millions of euro Other financial receivables ...... 3,532 3,430 102 Securities held to maturity ...... 150 130 20 Financial investments in funds or portfolio management products at fair value through profit or loss ...... 13 12 1 Securities available for sale ...... — 4 (4) Total ...... 3,695 3,576 119

The increase in “other financial receivables” is mainly accounted for by the writeback of €66 million in the receivables due from the Slovakian National Nuclear Fund.

F-395 “Securities held to maturity” are represented by bonds.

19.4 Current financial assets included in debt — €8,416 million at December 31, at June 30, 2013 2012 restated Change Millions of euro Short-term portion of long-term financial receivables . . . 5,585 5,318 267 Receivables for factoring advances ...... 232 288 (56) Securities: – securities available for sale ...... 28 42 (14) – securities held to maturity ...... — — Cashcollateral ...... 2,191 1,402 789 Other financial receivables ...... 380 521 (141) Total ...... 8,416 7,571 845

The “short-term portion of long-term financial receivables” mainly consists of the financial receivable in respect of the Spanish electricity system deficit in the amount of €4,279 million. (€4,839 million at December 31, 2012). The change for the period essentially reflects new receivables accrued in the 1st Half of 2013 and amounts collected (€2,362 million, including the effects of the reimbursements for extra-peninsular generation, of which €2,233 million from the assignment of the receivables to the securitization fund established by the Spanish government).

19.5 Cash and cash equivalents — €5,714 million Cash and cash equivalents are not restricted by any encumbrances, apart from €264 million (€194 million at December 31, 2012) essentially in respect of deposits pledged to secure transactions.

20. Assets and liabilities held for sale — €211 million The composition of assets and liabilities held for sale at June 30, 2013 and December 31, 2012 is reported in the following table. Assets held for sale Liabilities held for sale at December 31, at December 31, at June 30, 2013 2012 restated Change at June 30, 2013 2012 restated Change Millions of euro Marcinelle Energie...... 208 229 (21) 7 8 (1) Other ...... 25 88 (63) 15 — 15 Total ...... 233 317 (84) 22 8 14

The change for the period is essentially attributable to the disposal of the holding in Medgaz in the 1st Half of 2013. 21. Shareholders’ equity — €52,722 million 21.1 Equity attributable to the shareholders of the Parent Company — €35,192 million Share capital — €9,403 million As no options under share-based plans approved by the Company were exercised during the 1st Half of the year, the fully paid-up share capital of Enel SpA at June 30, 2013 (and at December 31, 2013) amounted to €9,403,357,795, represented by the same number of ordinary shares with a par value of €1.00 each.

F-396 At June 30, 2013, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, only the Ministry for the Economy and Finance held more than 2% of the total share capital, with an interest of 31.24%. The Shareholders’ Meeting of Enel SpA of April 30, 2013, approved a dividend for 2012 of €0.15 per share. The dividend was paid (gross of any withholding taxes) starting from June 27, 2013, with an ex-dividend date of June 24, 2013.

Other reserves — €7,165 million Share premium reserve — €5,292 million There were no changes in the reserve in the 1st Half of 2013.

Legal reserve — €1,881 million The legal reserve is formed of the part of net income that, pursuant to Article 2430 of the Italian Civil Code, cannot be distributed as dividends.

Reserve from translation of financial statements in currencies other than the euro — €(421) million The change in this aggregate for the period is attributable to the net depreciation of the functional currency against the foreign currencies used by subsidiaries.

Reserve from measurement of financial instruments — €(1,598) million This item includes net gains recognized directly in equity resulting from the measurement of cash flow hedge derivatives, as well as net unrealized gains arising in respect of the fair value measurement of financial assets.

Reserve from sale of equity holdings without loss of control — €733 million The change in the period regards the disposal of minority interests recognized as a result of the capital increase of Enersis.

Reserve from transactions in non-controlling interests — €84 million Reserve from equity investments accounted for using the equity method — €15 million The reserve reports the share of comprehensive income to be recognized directly in equity for companies accounted for using the equity method.

Reserve for employee benefits — €(359) million Following the application as from January 1, 2013, of IAS 19 Revised, all actuarial gains and losses, net of tax effects, are recognized in this reserve. During the period, there were no material changes in the actuarial assumptions used in preparing the 2012 financial statements, and accordingly no actuarial gains or losses were recognized in the statement of comprehensive income.

F-397 The table below shows the changes in gains and losses recognized directly in equity, including non-controlling interests.

at December 31, 2012 restated Change at June 30, 2013

Gains/ Of which (Losses) Of which Of which shareholders Of which recognized in Released shareholders Of which shareholders Of which of Parent non-controlling equity for the to income of Parent non-controlling Other of Parent non-controlling Total Company interests period statement Taxes Total Company interests changes Total Company interests

Millions of euro Reserve from translation of financial statements in currencies other thantheeuro...... 682 92 590 (1,371) — — (1,371) (513) (858) — (689) (421) (268) Reserve from measurement of financial instruments ...... (1,350) (1,253) (97) (659) 306 (25) (378) (345) (33) — (1,728) (1,598) (130) Share of OCI of associates accounted for using F-398 the equity method ...... 8 8 — 1 — — 1 7 (6) — 9 15 (6) Reserve for employee benefits...... (423) (367) (56) — — — — — — 8 (415) (359) (56) Total gains/ (losses) recognized in equity ...... (1,083) (1,520) 437 (2,029) 306 (25) (1,748) (851) (897) 8 (2,823) (2,363) (460) 21.2 Non-controlling interests — €17,530 million The following table reports the composition of non-controlling interests by division.

at December 31, at June 30, 2013 2012 restated Change Millions of euro IberiaandLatinAmerica ...... 12,745 11,690 1,055 International ...... 2,307 2,258 49 RenewableEnergy...... 2,275 2,159 116 GenerationandEnergyManagement...... 203 205 (2) Total ...... 17,530 16,312 1,218

22. Provisions for risks and charges — €8,088 million

Millions of euro At January 1, 2013 restated ...... 8,648 Accruals...... 572 Utilization ...... (719) Releases ...... (132) Accretioncharges...... 112 Foreign exchange differences ...... (29) Otherchanges ...... (364) at June 30, 2013 ...... 8,088

Provisions for risks and charges at June 30, 2013, also include the provisions for nuclear decommissioning with respect to the Spanish and Slovakian plants in the amount of €3,248 million (€3,538 million at December 31, 2012), for early-retirement incentives totaling €1,082 million (€1,306 million at December 31, 2012) and for litigation in the amount of €1,231 million (€1,142 million at December 31, 2012).

23. Non-current financial liabilities — €2,496 million The item reports the fair value of derivatives only. For more information, please see note 4.3.

24. Current financial liabilities — €3,891 million

at December 31, at June 30, 2013 2012 restated Change Millions of euro Deferred financial liabilities ...... 826 921 (95) Derivatives contracts (see note 4.4) ...... 2,940 2,028 912 Otheritems ...... 125 189 (64) Total ...... 3,891 3,138 753

25. Related parties As an operator in the field of generation, distribution, transport and sale of electricity and the sale of natural gas, the Group provides services to a number of companies directly or indirectly controlled by the Italian State, the Group’s controlling shareholder.

F-399 The following table summarizes transactions with such related parties. Related party Relationship Nature of main transactions Single Buyer Fully controlled (indirectly) by the Purchase of electricity for the enhanced Ministry for the Economy and Finance protection market EMO — Energy Markets Fully controlled (indirectly) by the Sale of electricity on the Power Operator Ministry for the Economy and Finance Exchange Purchase of electricity on the Power Exchange for pumping and plant planning ESO — Energy Services Fully controlled (directly) by the Sale of subsidized electricity Operator Ministry for the Economy and Finance Payment of A3 component for renewable resource incentives Terna Indirectly controlled by the Sale of electricity on the Ancillary Ministry for the Economy and Finance Services Market Purchase of transport, dispatching and metering services Eni Group Directly controlled by the Ministry Sale of electricity transport services for the Economy and Finance Purchase of fuels for generation plants, storage services and natural gas distribution Finmeccanica Group Directly controlled by the Ministry Purchase of IT services and supply of for the Economy and Finance goods Poste Italiane Group Fully controlled (directly) by the Purchase of postal services Ministry for the Economy and Finance Finally, Enel also maintains relationships with the pension funds Fopen and Fondenel, Fondazione Enel and Enel Cuore, an Enel non-profit company devoted to providing social and healthcare assistance. All transactions with related parties were carried out on normal market terms and conditions, which in some cases are determined by the Authority for Electricity and Gas.

F-400 The following table summarizes transactions with related parties and with associated companies outstanding at June 30, 2013 and carried out during the period.

Related parties Associated companies

Italian Total Post Enel balance- Single Buyer EMO Terna ESO Eni Office Other Total GNL Chile Rete Gas Elica 2 CESI Other Total Overall total sheet item % of total

Millions of euro Balance sheet Non-currentfinancialassets...... — — — — — — — — ————7979 79 5,504 1.4% Other non-current assets ...... — — — — — — — — ————5757 57 819 7.0% Trade receivables ...... 3 973 443 215 39 — 60 1,733 —19——2241 1,774 12,382 14.3% Currentfinancialassets...... — — — — — — — — 1———2223 23 11,017 0.2% Othercurrentassets ...... 3 — 17 1 17 — — 38 1—2—3336 74 2,567 2.9% Current financial liabilities ...... — — — — — — — — ————44 4 3,891 0.1% Tradepayables...... 791 820 414 1,053 130 88 32 3,328 33 42 3 19 97 3,425 11,146 30.7% Other current liabilities ...... — — — — — — — — ————1010 10 9,969 0.1% Income statement Revenuesfromsales...... — 3,383 651 208 390 — 23 4,655 44 18 — — 2 64 4,719 39,184 12.0% Otherrevenuesandincome...... — 32 1 1 — — 4 38 ————33 41 973 4.2% Rawmaterialsandconsumables...... 2,534 2,574 86 1 97 — 1 5,293 90 — — — 15 105 5,398 20,880 25.9%

F-401 Services...... — 2 884 — 61 63 14 1,024 28 172 2 6 208 1,232 7,505 16.4% Otheroperatingexpenses ...... 1 5 26 1 2 — — 35 —————— 35 1,495 2.3% Net income/(charges) from commodity risk management...... 11 — 19 — — — 30 —————— 30 (255) — Financialincome...... — — — — — — — — ————1717 17 1,446 1.2% Financialexpense ...... — — 2 — — — — 2 1————1 3 2,713 0.1% 26. Contractual commitments and guarantees The commitments entered into by the Group and the guarantees given to third parties are shown below. at December 31, at June 30, 2013 2012 Change Millions of euro Guarantees given: – sureties and other guarantees granted to third parties ...... 6,112 5,586 526 Commitments to suppliers for: – electricity purchases ...... 45,994 50,634 (4,640) – fuel purchases ...... 56,923 62,576 (5,653) –varioussupplies ...... 2,239 2,120 119 –tenders ...... 2,504 1,922 582 –other ...... 2,180 2,315 (135) Total ...... 109,840 119,567 (9,727) TOTAL ...... 115,952 125,153 (9,201)

Commitments for electricity amounted to €45,994 million at June 30, 2013, of which €22,264 million refer to the period July 1, 2013-2017, €9,486 million to the period 2018-2022, €4,901 million to the period 2023-2027 and the remaining €9,343 million beyond 2027. Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set in foreign currencies). The total at June 30, 2013 was €56,923 million, of which €29,885 million refer to the period July 1, 2013-2017, €21,248 million to the period 2018-2022, €4,230 million to the period 2023-2027 and the remaining €1,560 million beyond 2027.

27. Contingent liabilities and assets Compared with the consolidated financial statements at December 31, 2012 which the reader is invited to consult, the following main changes have occurred in contingent assets and liabilities.

Porto Tolle thermal plant — Air pollution — Criminal proceedings against Group directors and employees — Damages for environmental harm As regards the case before the Court of Rovigo, the Ministry of the Environment, the Ministry of Health and numerous other actors, mainly local authorities (including the regional governments) of Emilia-Romagna and Veneto, as well as park agencies in the area have joined the case as injured parties asking for unspecified damages. The next hearing is scheduled for September 23, 2013.

Dispute with Electrica On July 5, 2013, the Romanian state-controlled company Electrica SA notified Enel SpA, Enel Investment Holding, Enel Distributie Muntenia and Enel Energie Muntenia of a request for arbitration, setting out a series of demands for damages for alleged breach of contractual obligations contained in the agreements between the parties on the occasion of the disposal of a controlling interest in Electrica Muntenia Sud (which was subsequently split into Enel Distributie Muntenia and Enel Energie Muntenia). The interest was acquired by Enel in 2008 in the privatization of Electrica Muntenia Sud and other companies operating in the Romanian electrical industry. Following the operation, Electrica nevertheless retained a non-controlling interest. The demands for damages advanced by Electrica are based on its application of penalties in the amount of about €715 million plus interest and additional unspecified damages. As provided for in

F-402 the contractual documentation, the arbitration proceeding will be held in Paris and will be governed by the rules of the International Chamber of Commerce. The proceeding is currently in the initial stages and the arbitration board has not yet been appointed. In the meantime, Enel is preparing its defense.

28. Subsequent events Sale of Enel.si by Enel Green Power to Enel Energia Following an agreement signed on June 17, 2013, between Enel Green Power and Enel Energia, on July 1, 2013 the sale to the latter of the entire share capital of Enel.si took effect. Enel.si operates in Italy, offering products and integrated solutions in the retail market for the installation of distributed renewable generation systems and for energy savings and efficiency for end users, working through a network of franchises, composed of more than 700 specialized installers. The price paid by Enel Energia for the entire share capital of Enel.si amounted to €92 million and was set on the basis of the enterprise value as of December 31, 2012 (about €76 million) and the net financial position of the company at the same date, which was a positive €16 million. The sale of the business forms part of the medium/long-term strategy of the Renewable Energy Division, which is increasingly focused on expanding its business of developing, building and operating renewable generation plants. For the Sales — Italy sector, which has a leading position in the sale of electricity and gas to households and businesses in the free and regulated markets in Italy, the acquisition is part of its strategy of broadening its commercial product range to the energy efficiency sector, covering the entire spectrum of retail and business customers’ energy use needs.

Capital contribution agreement between Enel Green Power and EFS Buffalo Dunes with a syndicate headed by J.P. Morgan On July 9, 2013, Enel Green Power North America Development (EGPD), a US subsidiary of Enel Green Power, and EFS Buffalo Dunes, a GE Capital subsidiary, signed a capital contribution agreement with a syndicate led by J.P. Morgan. Under the agreement, the syndicate will provide about $260 million in financing for the Buffalo Dunes wind project in Kansas, which will have an installed capacity of 250 MW. The syndicate also includes Wells Fargo Wind Holdings, Metropolitan Life Insurance Company and State Street Bank and Trust Company. When the syndicate disburses the financing in the 4th Quarter of 2013 — subject to compliance with the specific requirements in the capital contribution agreement — the parties will enter into a tax equity agreement for the Buffalo Dunes wind plant. The project is supported by a long-term power purchase agreement. EFS Buffalo Dunes holds 51% of the wind project and EGPD holds the remaining 49%, as well as an option to acquire an additional 26% on specified dates in 2013 and 2014.

Standard & Poor’s revises long-term rating to “BBB” and confirms short-term rating at “A-2” On July 11, 2013, Standard & Poor’s announced that it had revised its long-term rating for Enel to “BBB” (from “BBB+”). The agency also maintained its short-term rating of “A-2” for the Company. The outlook is stable. The downgrade follows the similar action recently taken by Standard & Poor’s for Italy’s Italian sovereign debt rating, which reflected, among the other factors, the deterioration in macroeconomic conditions in the country. The stable outlook reflects the agency’s expectations that Enel will achieve and maintain performance and financial targets commensurate with its current rating as a result of its continued deleveraging efforts, the large contribution of regulated activities and of its good geographical and technological diversification outside Europe.

F-403 The downgrade will not have a significant impact on either the cost of outstanding debt or of new borrowing, partly due to the low volatility of spreads in the secondary market for bonds issued by Enel, whose prices already reflect the rating issued by Moody’s (Baa2), which is now in line with that of Standard & Poor’s (BBB). With regard to loans granted by the EIB, only some of them (in the total amount of about €2 billion) contain covenants requiring the beneficiary companies of the Group to renegotiate the agreements or, alternatively, provide specific bank guarantees. Accordingly, renegotiation of those agreements has begun, the outcome of which should not have a major impact on the cost of borrowing or result in the early repayment of the debt. With regard to other major loan agreements, none have early redemption clauses directly linked to the level of the rating.

Regulatory changes introduced in Spain with Royal Decree Law 9/2013 On July 12, 2013, the Spanish government approved Royal Decree Law 9/2013, which introduces a series of measures for ensuring the financial stability of the Spanish electrical system. Among the new measures contained in the legislation, which was published in the Boletin Oficial del Estado (BOE) on July 13, 2013 and approved by the Spanish Parliament on July 17, 2013, are those for new legal and financial rules for power generation from renewable resources, a revision of the remuneration for peninsular and extra-peninsular generation, a change in the remuneration for electricity distribution and transmission, a modification of the capacity payment system and, finally, the reintroduction of the bono social to be borne by integrated electricity operators. The measures contained in Royal Decree Law 9/2013 will inevitability have an impact on the profitability achievable by the Enel Group in Spain, in particular that of the Endesa-Iberian peninsula cash generating unit (CGU). Moreover, the effect of these measures are cumulative with those already adopted in 2012, which contributed to the impairment loss of €2,392 million attributable to the Group on the goodwill of that CGU. Only after the implementing regulations have been approved will it be possible to obtain a reliable estimate of the associated financial impact. In any event, these adverse impacts are occurring in an environment in which the performance of the CGU for the current year fully confirms and exceeds the forecasts contained in the most recent Business Plan approved by Enel’s Board of Directors. At present, a preliminary and provisional best estimate of the effect that the measures contained in the Royal Decree Law could have, without taking account of management actions that the Group will be forced to take to contain the adverse impact of these measures, is that the annual gross cash flows generated by the Endesa-Iberian peninsula CGU will be lowered by up to about €275 million in 2013 and about €400 million in 2014. Given the considerable uncertainties connected with both the completion of the approval of the implementing regulations for Royal Decree Law 9/2013 and the absence of guidance on a number of key elements of regulation as from 2015 (which makes it impossible to produce a reliable estimate of the measures) and taking account of the need to determine the mitigating effects of the actions to be taken by management that the Enel Group is already considering but that will only be finalized in the coming months, the conditions currently do not exist for determining the potential impact of the measures on the recoverability of the value of Endesa’s assets in Spain as recognised in the Group’s condensed interim consolidated financial statements. As soon as possible Enel will update its Business Plan to take account of the net effect of the negative impact on future cash flows of the measures and of the actions to be adopted by management in response. Only once that has been completed, will it be possible to update the impairment test of the CGU to determine whether any further impairment losses have occurred.

F-404 CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 2012

F-405 Enel S.p.A. Condensed interim consolidated financial statements as of June 30, 2012

Auditors’ review report on the condensed interim consolidated financial statements

F-406 Reconta Ernst & Young S.p.A. Via Po, 32 00198 Roma

Tel. (+39) 06 324751 Fax (+39) 06 32475504 www.ey.com

Auditors’ review report on the condensed interim consolidated financial statements (Translation from the original Italian text)

To the Shareholders of Enel S.p.A. 1. We have reviewed the condensed interim consolidated financial statements, comprising the balance sheet, the income statement, the statement of comprehensive income, the statement of changes in shareholders’ equity, the statement of cash flows and the related explanatory notes of Enel S.p.A. and its subsidiaries (“Enel Group”) as of June 30, 2012. Enel S.p.A.’s Directors are responsible for the preparation of the condensed interim consolidated financial statements in conformity with the International Financial Reporting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to issue this review report based on our review. 2. We conducted our review in accordance with review standards recommended by Consob (the Italian Stock Exchange Regulatory Agency) in its Resolution No. 10867 of July 31, 1997. Our review consisted mainly of obtaining information on the accounts included in the condensed interim consolidated financial statements and the consistency of the accounting principles applied, through discussions with management, and of applying analytical procedures to the financial data presented in these consolidated financial statements. Our review did not include the application of audit procedures such as tests of compliance and substantive procedures on assets and liabilities and was substantially less in scope than an audit conducted in accordance with generally accepted auditing standards. Accordingly, we do not express an audit opinion on the condensed interim consolidated financial statements as we expressed on the annual consolidated financial statements. With respect to the consolidated financial statements of the prior year and the condensed interim consolidated financial statements of the corresponding period of the prior year, presented for comparative purposes, reference should be made to our reports issued on April 6, 2012 and August 5, 2011, respectively. 3. Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements of Enel Group as of June 30, 2012 are not prepared, in all material respects, in conformity with the International Financial Reporting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union.

Rome, August 2, 2012

Reconta Ernst & Young S.p.A. Signed by: Massimo delli Paoli, Partner

This report has been translated into the English language solely for the convenience of international readers

F-407 Consolidated Income Statement 1st Half Notes 2012 2011 of which of which with related with related parties parties Millions of euro Revenues 5 Revenuesfromsalesandservices ...... 40,003 3,390 37,223 3,175 Otherrevenues...... 689 26 1,168 29 [Subtotal] ...... 40,692 38,391 3,204 Costs 6 Rawmaterialsandconsumables...... 22,056 5,059 19,795 4,686 Services...... 7,529 1,164 7,005 1,178 Personnel ...... 2,347 2,176 Depreciation, amortization and impairment losses ...... 2,941 2,857 Otheroperatingexpenses...... 1,317 27 1,330 Capitalizedcosts ...... (743) (726) [Subtotal] ...... 35,447 32,437 5,864 Net income/(charges) from commodity risk management ...... 7 96 35 118 Operating income ...... 5,341 6,072 Financialincome...... 8 1,497 5 1,765 13 Financialexpense ...... 8 2,998 3,175 3 Share of income/(expense) from equity investments accounted for using the equity method...... 14 45 63 Income before taxes ...... 3,885 4,725 Incometaxes...... 9 1,493 1,536 Net income from continuing operations ...... 2,392 3,189 Net income from discontinued operations ..... —— Net income for the period (shareholders of the Parent Company and non-controlling interests) ...... 2,392 3,189 Attributable to shareholders of the Parent Company...... 1,821 2,552 Attributable to non-controlling interests ...... 571 637 Earnings per share (euro) attributable to ordinary shareholders of the Parent Company ...... 10 0.19 0.27 Diluted earnings per share (euro) attributable to ordinary shareholders of the Parent Company ...... 10 0.19 0.27 Earnings from continuing operations per share (euro) attributable to ordinary shareholders of the Parent Company ...... 10 0.19 0.27 Diluted earnings from continuing operations per share (euro) attributable to ordinary shareholders of the Parent Company ...... 10 0.19 0.27

F-408 Statement of Consolidated Comprehensive Income

1st Half 2012 2011 Millions of euro Net income for the period (shareholders of the Parent Company and non- controlling interests) ...... 2,392 3,189 Other comprehensive income: – Effective portion of change in the fair value of cash flow hedges ...... (296) 139 – Share of income recognized in equity by companies accounted for using the equity method ...... (5) — –Changeinthefairvalueoffinancialinvestmentsavailableforsale ...... (357) 131 – Exchange rate differences ...... 419 (831) Income/(Loss) recognized directly in equity ...... (239) (561) Comprehensive income for the period ...... 2,153 2,628 Attributable to: –shareholdersoftheParentCompany...... 1,252 2,528 – non-controlling interests ...... 901 100

F-409 Consolidated Balance Sheet

Notes at June 30, 2012 at December 31, 2011 of which of which with related with related parties parties Millions of euro ASSETS Non-current assets Property,plantandequipment ...... 11 81,658 80,592 Investmentproperty ...... 246 245 Intangible assets ...... 12 38,822 39,075 Deferred tax assets ...... 13 6,074 6,011 Equity investments accounted for using the equitymethod...... 14 1,141 1,085 Non-current financial assets ...... 15 6,082 6,325 Other non-current assets ...... 548 506 [Total] ...... 134,571 133,839 Current assets Inventories ...... 3,421 3,148 Trade receivables ...... 16 11,689 1,061 11,570 1,473 Tax receivables ...... 2,023 1,251 Current financial assets ...... 17 10,499 10,466 1 Other current assets ...... 3,078 63 2,135 71 Cash and cash equivalents ...... 18 8,845 7,015 [Total] ...... 39,555 35,585 Assets held for sale ...... 19 363 381 TOTAL ASSETS ...... 174,489 169,805

F-410 Notes at June 30, 2012 at December 31, 2011 of which of which with related with related parties parties Millions of euro LIABILITIES AND SHAREHOLDERS’ EQUITY Equity attributable to the shareholders of the Parent Company Sharecapital...... 9,403 9,403 Other reserves ...... 9,779 10,348 Retained earnings (loss carried forward) ...... 17,534 15,831 Net income for the period(1) ...... 1,821 3,208 [Total] ...... 38,537 38,790 Non-controlling interests ...... 16,094 15,650 Total shareholders’ equity ...... 20 54,631 54,440 Non-current liabilities Long-termloans...... 18 56,665 48,703 Post-employment and other employee benefits ...... 3,034 3,000 Provisionsforrisksandcharges...... 21 7,583 7,831 Deferred tax liabilities ...... 13 11,538 11,505 Non-current financial liabilities ...... 22 2,432 8 2,307 Other non-current liabilities ...... 1,282 1,313 [Total] ...... 82,534 74,659 Current liabilities Short-term loans ...... 18 5,764 4,799 Current portion of long-term loans ...... 18 4,998 9,672 Tradepayables...... 11,413 3,219 12,931 3,304 Incometaxpayable...... 1,339 671 Current financial liabilities ...... 23 4,186 3,668 2 Other current liabilities ...... 9,551 32 8,907 15 [Total] ...... 37,251 40,648 Liabilities held for sale ...... 19 73 58 Total liabilities ...... 119,858 115,365 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 174,489 169,805

(1) Net income for 2011 is reported net of the interim dividend (€940 million).

F-411 Statement of Changes in Consolidated Shareholders’ Equity

Share capital and reserves attributable to the shareholders of the Parent Company

Reserve from Reserve from Reserve from disposal equity translation of of equity Reserve from investments Equity financial Reserve from interests transactions accounted for attributable to the Share Other statements in measurement of without in non- using the shareholders of Total Share premium Legal Other retained currencies other financial loss of controlling equity Net income for the Parent Non-controlling shareholders’ capital reserve reserve reserves earnings than euro instruments control interests method the period Company interests equity

at January 1, 2011 ...... 9,403 5,292 1,881 2,262 14,345 456 80 796 — 24 3,450 37,989 15,877 53,866 Dividends and interim dividends . . . — — — — (1,695) — — — — — — (1,695) (521) (2,216) Allocation of net income from the previousyear...... — — — — 3,450 — — — — — (3,450) ——— Change in scope of consolidation . . . — — — — — — — — — — — — (41) (41) Comprehensive income for the period...... — — — — — (307) 283 — — — 2,552 2,528 100 2,628 – Income/(Loss) recognized directly in equity ...... — — — — — (307) 283 — — — — (24) (537) (561) – Net income/(loss) for the period .. — — — — — — — — — — 2,552 2,552 637 3,189 at June 30, 2011 ...... 9,403 5,292 1,881 2,262 16,100 149 363 796 — 24 2,552 38,822 15,415 54,237

F-412 at January 1, 2012 ...... 9,403 5,292 1,881 2,262 15,831 120 (49) 749 78 15 3,208 38,790 15,650 54,440 Dividends and interim dividends . . . — — — — (1,505) — — — — — — (1,505) (497) (2,002) Allocation of net income from the previousyear...... — — — — 3,208 — — — — — (3,208) ——— Change in scope of consolidation . . . — — — — — — — — — — — —4040 Comprehensive income for the period...... — — — — — 104 (668) — — (5) 1,821 1,252 901 2,153 – Income/(Loss) recognized directly in equity ...... — — — — — 104 (668) — — (5) — (569) 330 (239) – Net income/(loss) for the period .. — — — — — — — — — — 1,821 1,821 571 2,392 at June 30, 2012 ...... 9,403 5,292 1,881 2,262 17,534 224 (717) 749 78 10 1,821 38,537 16,094 54,631 Consolidated Statement of Cash Flows

1st Half Notes 2012 2011

of which of which with related with related parties parties Millions of euro Net income before taxes ...... 3,885 4,725 Adjustments for: Amortizationandimpairmentlossesofintangibleassets ..... 507 463 Depreciation and impairment losses of property, plant and equipment ...... 2,255 2,248 Exchange rate adjustments of foreign currency assets and liabilities (including cash and cash equivalents) ...... 346 (710) Accrualstoprovisions ...... 394 398 Financial(income)/expense...... 1,272 1,074 (Gains)/Losses from disposals and other non-monetary items...... (451) 573 Cash flow from operating activities before changes in net current assets ...... 8,208 8,771 Increase/(Decrease)inprovisions ...... (695) (941) (Increase)/Decreaseininventories...... (270) (462) (Increase)/Decrease in trade receivables ...... (284) 412 (232) (65) (Increase)/Decrease in financial and non-financial assets/ liabilities ...... 94 34 (325) (75) Increase/(Decrease)intradepayables...... (1,498) (85) (1,043) (92) Interestincomeandotherfinancialincomecollected ...... 893 5 600 13 Interestexpenseandotherfinancialexpensepaid ...... (2,176) (1,877) 2 Incometaxespaid ...... (1,607) (1,103) Cash flows from operating activities (a) ...... 2,665 3,388 Investmentsinproperty,plantandequipment...... (2,534) (2,712) Investmentsinintangibleassets...... (272) (202) Investments in entities (or business units) less cash and cash equivalentsacquired...... (151) (52) Disposals of entities (or business units) less cash and cash equivalentssold...... 2 104 (Increase)/Decrease in other investing activities ...... 214 84 Cash flows from investing/disinvesting activities (b) ...... (2,741) (2,778) Financial debt (new long-term borrowing) ...... 18 10,573 3,601 Financialdebt(repaymentsandothernetchanges) ...... (6,693) (3,318) Charges related to sales of equity holdings without loss of control ...... — (34) Dividendsandinterimdividendspaid...... 20 (2,002) (2,388) Cash flows from financing activities (c) ...... 1,878 (2,139) Impact of exchange rate fluctuations on cash and cash equivalents (d) ...... 36 (65) Increase/(Decrease) in cash and cash equivalents (a+b+c+d) ...... 1,838 (1,594) Cash and cash equivalents at beginning of the period(1) ...... 7,072 5,342 Cash and cash equivalents at the end of the period(2) ...... 8,910 3,748

(1) Of which cash and cash equivalents equal to €7,015 million at January 1, 2012 (€5,164 at January 1, 2011), short-term securities equal to €52 million at January 1, 2012 (€95 million at January 1, 2011) and cash and cash equivalents pertaining to assets held for sale in the amount of €5 million at January 1, 2012 (€83 million at January 1, 2011). (2) Of which cash and cash equivalents equal to €8,845 million at June 30, 2012 (€3,708 million at June 30, 2011), short-term securities equal to €55 million at June 30, 2012 (€38 million at June 30, 2011) and cash and cash equivalents pertaining to assets held for sale in the amount of €10 million at June 30, 2012 (€2 million at June 30, 2011).

F-413 Explanatory notes

1. Accounting policies and measurement criteria Enel SpA, which operates in the energy utility sector, has its registered office in Viale Regina Margherita 137, Rome, Italy. The consolidated Half-year Financial Report for the period ended June 30, 2012 comprises the financial statements of the Company, its subsidiaries and joint ventures (“the Group”) and the Group’s holdings in associated companies. A list of the subsidiaries, associated companies and joint ventures included in the scope of consolidation is reported in the annex. For a discussion of the main activities of the Group, please see the report on operations. This Half-year Financial Report was approved for publication by the Board on August 2, 2012.

Compliance with IFRS/IAS The consolidated Half-year Financial Report of the Group at and for the six months ended at June 30, 2012 has been prepared pursuant to Article 154-ter of Legislative Decree 58 of 24 February 1998 as amended by Legislative Decree 195 of 6 November 2007, as well as Article 81 of the Issuers Regulation as amended. The condensed interim consolidated financial statements for the six months ended at June 30, 2012 included in the consolidated Half-year Financial Report have been prepared in compliance with the international accounting standards (IFRS/IAS) issued by the International Accounting Standards Board (IASB) adopted by the European Union pursuant to Regulation (EC) no. 1606/2002 and in effect as of the close of the period, as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) in effect at the same date. All of these standards and interpretations are hereinafter referred to as “IFRS-EU”. More specifically, the financial statements have been drafted in compliance with IAS 34 — Interim financial reporting and consist of the consolidated income statement, the statement of consolidated comprehensive income, the consolidated balance sheet, the statement of changes in consolidated equity, the consolidated statement of cash flows, and the related notes. The Enel Group has adopted the half-year as the reference interim period for the purposes of applying IAS 34 and the definition of interim financial report specified therein. The accounting standards adopted, the recognition and measurement criteria and the consolidation criteria and methods used for the condensed interim consolidated financial statements at June 30, 2012 are the same as those adopted for the consolidated financial statements at December 31, 2011 (please see the related report for more information), with the exception of the differences discussed below. These condensed interim consolidated financial statements may therefore not include all the information required to be reported in the annual financial statements and must be read together with the financial statements for the period ended December 31, 2011. As from January 1, 2012, the companies belonging to the Renewable Energy Division have changed the useful life of their wind plants from 20 to 25 years. The revision of the useful life of those plants was prompted by the findings of a technical study conducted by an external company with expertise in the technologies used in the renewable energy sector, which indicated that the period for which the plants could be used could reasonably be increased by at least five years. The study was based on a detailed technical analysis of more than 65% of the Division’s installed wind generation capacity in the various geographical areas (Europe and North America) in the specific geographical and meteorological conditions in which the plants operate. Obviously, the

F-414 results obtained were based on assumptions and other estimates applied to the technical data available to management. The positive impact on the item “Depreciation” for the 1st Half of the year from the revision of the estimates was equal to €21 million. In addition to the accounting standards adopted in the preparation of the financial statements at December 31, 2011, the following amendments to international accounting standards that took effect as from January 1, 2012, are material to the Group: Š “Amendments to IFRS 7 — Financial instruments: Disclosures”; the amendments require additional disclosures to assist users of financial statements to assess the exposure to risk in the transfer of financial assets and the impact of such risks on the Company’s financial position. The amended standard introduces new disclosure requirements, to be reported in a single note, concerning transferred financial assets that have not been derecognized and transferred assets in which the Company has a continuing involvement as of the balance sheet date. The application of the amendments did not have an impact during the period. The Group has decided not to elect early adoption, where permitted, of other international accounting standards, interpretations or amendments issued and endorsed but whose date of first-time adoption is after January 1, 2012.

2. Main changes in the scope of consolidation At June 30, 2012, the scope of consolidation had changed with respect to that at June 30, 2011 as a result of the following main transactions:

F-415 Š change from full control to joint control, as from April 1, 2011, of Hydro Dolomiti Enel as a result of the change in that company’s governance structure, as provided for in the agreements reached between the two shareholders in 2008. Accordingly, the company is consolidated on a proportionate basis (with the stake held by the Enel Group in the company remaining unchanged at 49% both before and after the change in governance arrangements) rather than on a full line-by-line basis; Š acquisition of full control (from joint control) of the assets and liabilities retained by Enel Unión Fenosa Renovables (EUFER) following the break-up of the joint venture between Enel Green Power España and its partner Gas Natural under the agreement finalized on May 30, 2011. As from the date of execution of the agreement, those assets are therefore consolidated on a full line-by-line basis. Subsequently, EUFER was merged into its parent company, Enel Green Power España; Š acquisition, on June 9, 2011, of an additional 50% of Sociedade Térmica Portuguesa, as a result of which the Group acquired exclusive control of the company, whereas prior to the acquisition it had exercised joint control; Š disposal, on June 28, 2011, to Contour Global LP of the entire capital of the Dutch companies Maritza East III Power Holding and Maritza O&M Holding Netherland. These companies respectively owned 73% of the Bulgarian company Enel Maritza East 3 and 73% of the Bulgarian company Enel Operations Bulgaria; Š disposal, on November 30, 2011, of 51% of Deval and Vallenergie to Compagnia Valdostana delle Acque, a company owned by the Region of Valle d’Aosta, which already held the remaining 49% of the companies involved; Š acquisition, on December 1, 2011, of 33.33% of SF Energy, a company operating in the hydroelectric generation sector, with the transfer of in-kind and cash consideration by Enel Produzione. With the transfer, the Group acquired joint control of the company, together with another two partners participating in the investment; Š acquisition, on December 1, 2011, of 50% of Sviluppo Nucleare Italia, in which the Group already held a stake of 50%, which had given it joint control with Electricité de France; as from that date the company has been consolidated on a line-by-line basis.

2012 Š acquisition, on January 13, 2012, of an additional 49% of Rocky Ridge Wind Project, which was already a subsidiary (consolidated line-by-line) controlled through a 51% stake; Š acquisition, on February 14, 2012, of the remaining 50% of Enel Stoccaggi, a company in which the Group already held a 50% interest. As from that date the company has been consolidated on a line-by-line basis (previously consolidated proportionately in view of the joint control exercised); Š acquisition, on June 27, 2012, of the remaining 50% of a number of companies in the Kafireas wind power pipeline in Greece, which had previously been included under “Elica 2” and accounted for using the equity method in view of its 30% stake; as from that date the companies have therefore been consolidated on a line-by-line basis; Š acquisition, on June 28, 2012, of 100% of Stipa Nayaa, a Mexican company operating in the wind generation sector. In the consolidated balance sheet at June 30, 2012, “Assets held for sale” and “Liabilities held for sale” include the assets and related liabilities of Endesa Ireland and other minor entities (including Wisco), as the state of negotiations for their sale to third parties qualifies them for application of IFRS 5. There have been no changes compared with the assets and liabilities reported here as at December 31, 2011.

F-416 Business combinations in the 1st Half of 2012 Kafireas pipeline Following achievement of the contractually specified technical milestones and under the terms of a contract amendment agreed with the Greek partner, the developer of initiatives associated with the Elica 2 project, on June 27, 2012, the Group acquired 50% of the shares of the nine companies involved in the Kafireas wind project. With the acquisition of that stake, which adds to the 30% held previously, the Group thereby acquired full control of those companies in what qualifies as a step acquisition pursuant to IFRS 3. Following those events, as from that date, those companies have therefore been consolidated on a line-by-line basis, rather than being accounted for as equity investments in associates, as they had been previously. The difference between the price of the equity investments (represented by the price paid for the 50% stake and the remeasurement at fair value of the 30% interest already held) and the assets acquired less the liabilities assumed was provisionally recognized under “Goodwill” pending completion of the purchase price allocation process within the time limits provided for in the applicable accounting standard. In addition, the remeasurement at fair value of the equity interest already held before the transaction, as provided for under IFRS 3, did not have a material financial impact. The following table reports the provisional values of the assets acquired and the liabilities and contingent liabilities assumed as at the acquisition date. Millions of euro Cash and cash equivalents ...... 32 Current liabilities ...... (31) Total net assets acquired ...... 1 Goodwill ...... 57 Price of the transaction ...... 58 Cash flow impact in the 1st Half of 2012 ...... 10(1)

(1) Net of price paid for acquisition of 30% of share capital in 2008 and advances paid in 2011 (for a total of €34 million) and the amount still to be paid (€14 million).

Stipa Nayaa On June 28, 2012, the Group reached an agreement to acquire the Bii Nee Stipa II wind farm in Mexico. The plant, developed and built by Gamesa, is composed of 37 wind turbines of 2 MW each, for a total installed capacity of 74 MW. The difference between the price of the equity investment and the assets acquired less the liabilities assumed was provisionally recognized under “Goodwill” pending completion of the purchase price allocation process within the time limits provided for in the applicable accounting standard. The following table reports the provisional values of the assets acquired and the liabilities and contingent liabilities assumed as at the acquisition date. Millions of euro Property,plantandequipment...... 113 Other current and non-current assets ...... 18 Current liabilities ...... (6) Total net assets acquired ...... 125 Goodwill ...... 14 Price of the transaction ...... 139 Cash flow impact in the 1st Half of 2012 ...... 120(1)

(1) Net of advances paid in 2011 (€19 million).

F-417 3. Risk management For a more complete discussion of the hedging instruments used by the Group to manage the various risks associated with its business, please see the consolidated financial statements at December 31, 2011. The following sub-sections report the balances for derivatives instruments, grouped by the item of the consolidated balance sheet that contain them.

3.1 Derivatives contracts classified under non-current financial assets — €1,519 million The following table reports the fair value of derivative contracts classified under non-current financial assets, broken down by type and designation. at June 30, at December 31, 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates...... 4 6 (2) –exchangerates ...... 1,427 1,302 125 – commodities ...... 11 10 1 Total ...... 1,442 1,318 124 Fair value hedge derivatives: –interestrates...... 15 14 1 –exchangerates ...... 40 30 10 Total ...... 55 44 11 Trading derivatives: –interestrates...... 6 6 — –exchangerates ...... 9 13 (4) – commodities ...... 7 6 1 Total ...... 22 25 (3) TOTAL ...... 1,519 1,387 132

F-418 3.2 Derivatives contracts classified under current financial assets — €2,912 million The following table reports the fair value of derivative contracts classified under current financial assets, broken down by type and designation. at June 30, at December 31, 2012 2011 Change Millions of euro Cash flow hedge derivatives: –exchangerates ...... 271 299 (28) – commodities ...... 21 9 12 Total ...... 292 308 (16) Trading derivatives: –exchangerates ...... 143 140 3 – commodities ...... 2,477 1,972 505 Total ...... 2,620 2,112 508 TOTAL ...... 2,912 2,420 492

3.3 Derivatives contracts classified under non-current financial liabilities — €2,432 million The following table reports the fair value of the cash flow hedge, fair value hedge and trading derivatives.

at June 30, at December 31, 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates...... 651 600 51 –exchangerates ...... 1,613 1,495 118 – commodities ...... 33 — 33 Total ...... 2,297 2,095 202 Fair value hedge derivatives: –exchangerates ...... 6 6 — Total ...... 66— Trading derivatives: –interestrates...... 62 66 (4) –exchangerates ...... 3 3 — – commodities ...... 64 137 (73) Total ...... 129 206 (77) TOTAL ...... 2,432 2,307 125

F-419 The decline in the fair value of cash flow hedge derivatives on interest rates was mainly the result of the decrease in the yield curve that occurred in the 1st Half of 2012. Cash flow hedge derivatives on exchange rates essentially regard transactions to hedge bonds denominated in currencies other than the euro through cross currency interest rate swaps. The fair value reflects changes in the exchange rate of the euro against the hedged currencies. Commodity derivatives classified as trading transactions include derivatives embedded in contracts for the purchase and sale of electricity in Slovakia, the non-current portion of the fair value of which is equal to €59 million.

3.4 Derivatives contracts classified under current financial liabilities — €3,146 million The following table reports the fair value of the derivative contracts. at June 30, at December 31, 2012 2011 Change Millions of euro Cash flow hedge derivatives: –interestrates...... 2 27 (25) –exchangerates ...... 132 156 (24) – commodities ...... 221 145 76 Total ...... 355 328 27 Fair value hedge derivatives: –exchangerates ...... 2 6 (4) Total ...... 2 6 (4) Trading derivatives: –interestrates...... 71 75 (4) –exchangerates ...... 122 132 (10) – commodities ...... 2,596 2,104 492 Total ...... 2,789 2,311 478 TOTAL ...... 3,146 2,645 501

The fair value of cash flow hedge derivatives on interest rates improved as a result of the joint impact of developments in the yield curve and the ordinary expiry during the 1st Half of 2012 of derivatives with a notional amount of about €2,100 million. The change in the fair value of cash flow hedge derivatives on exchange rates was mainly the consequence of developments in the exchange rate of the euro against the pound sterling. These derivatives mainly regard the hedging (using cross currency interest rate swaps) of bond issues denominated in currencies other than the functional currency carried out by Endesa. Commodity cash flow hedge derivatives comprise derivatives on energy classified as cash flow hedges with a fair value of €38 million and hedges of gas and coal amounting to €183 million. Trading derivatives include contracts regarding fuels and other commodities with a fair value of €2,446 million, trading derivatives on energy with a fair value of €36 million and embedded derivatives related to energy sale and purchase contracts in Slovakia with a fair value of €114 million.

4. Segment information The representation of divisional performance presented here is based on the approach used by management in monitoring Group performance for the two periods under review.

F-420 The presentation of the results is based on the new organizational arrangements and the scope for the simplification of disclosures associated with the materiality thresholds established under IFRS 8. In particular, the item “Other, eliminations and adjustments” includes not only the effects from the elimination of intersegment transactions, but also the figures for the Parent Company, Enel SpA, the Services and Other Activities area and the Engineering and Research Division, which in 2011 had been reported separately, as well as the Upstream Gas function previously reported under the Generation and Energy Management Division. The comparative performance data for the 1st Half of 2011 and the financial position at December 31, 2011 have all been restated appropriately.

Performance by segment 1st Half of 2012(1) Other, Iberia and eliminations Infra. & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Revenues from third parties ...... 9,332 8,191 1,653 16,434 3,942 1,086 54 40,692 Revenues from other segments...... 76 3,113 2,131 61 331 246 (5,958) — Total revenues ...... 9,408 11,304 3,784 16,495 4,273 1,332 (5,904) 40,692 Totalcosts ...... 9,100 10,683 1,811 12,807 3,570 518 (5,983) 32,506 Net income/(charges) from commodity risk management...... 20 73 — (44) 54 (7) — 96 Depreciation and amortization...... 41 309 469 1,404 226 221 65 2,735 Impairment losses/ Reversals ...... 161 — 2 95 (64) 16 (4) 206 Operating income .... 126 385 1,502 2,145 595 570 18 5,341 Capital expenditure ...... 20 138 666 875(2) 515 457 91(3) 2,762

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Does not include €43 million regarding units classified as “Held for sale”. (3) Does not include €1 million regarding units classified as “Held for sale”.

F-421 1st Half of 2011(1) Other, Iberia and eliminations Infra. & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Revenues from third parties ..... 8,179 7,499 1,513 15,739 3,564 1,106 251 38,391 Revenues from other segments . . 84 2,722 2,081 105 255 223 (5,470) — Total revenues .... 8,803 10,221 3,594 15,844 3,819 1,329 (5,219) 38,391 Totalcosts...... 8,485 9,101 1,569 12,225 3,011 456 (5,267) 29,580 Net income/ (charges) from commodity risk management..... 8 125 — (8) (10) 3 — 118 Depreciation and amortization .... 36 289 457 1,351 246 197 56 2,632 Impairment losses/ Reversals ...... 110 — 1 63 56 (5) — 225 Operating income ...... 180 956 1,567 2,197 496 684 (8) 6,072 Capital expenditure ..... 12 109 579(2) 933(3) 573 (4) 624 16 2,846

(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income and costs for the period. (2) Does not include €3 million regarding units classified as “Held for sale”. (3) Does not include €61 million regarding units classified as “Held for sale”. (4) Does not include €4 million regarding units classified as “Held for sale”.

Financial position by segment At June 30, 2012 Other, Iberia and eliminations Infra. & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Property, plant and equipment ...... 26 10,161 14,927 38,226 9,426 8,637 543 81,946 Intangible assets ..... 757 698 120 31,744 2,966 2,197 372 38,854 Trade receivables .... 4,252 2,713 2,053 3,916 422 608 (2,266) 11,698 Other...... 547 2,234 1,135 2,471 624 304 2 7,317 Operating assets .... 5,582 15,806 18,235 76,357(1) 13,438 11,746(3) (1,349)(4) 139,815 Tradepayables ...... 3,395 2,975 2,319 3,595 790 844 (2,482) 11,436 Sundry provisions .... 178 1,030 1,383 4,282 3,033 144 596 10,646 Other...... 1,890 472 3,058 3,728 1,212 325 (808) 9,877 Operating liabilities ...... 5,463 4,477 6,760 11,605(2) 5,035 1,313 (2,694)(5) 31,959

(1) Of which €339 million regarding units classified as “Held for sale”. (2) Of which €52 million regarding units classified as “Held for sale”.

F-422 (3) Of which €4 million regarding units classified as “Held for sale”. (4) Of which €10 million regarding units classified as “Held for sale”. (5) Of which €3 million regarding units classified as “Held for sale”.

At December 31, 2011 Other, Iberia and eliminations Infra. & Latin Renewable and Sales GEM Networks America Int’l Energy adjustments Total Millions of euro Property, plant and equipment ...... 28 10,000 14,693 37,871 9,528 8,277 444 80,841 Intangible assets ..... 776 715 143 32,073 2,979 2,157 323 39,166 Trade receivables .... 4,072 3,871 1,783 3,959 598 528 (3,218) 11,593 Other...... 333 1,936 860 2,221 375 242 69 6,036 Operating assets .... 5,209 16,522 17,479 76,124(1) 13,480 11,204(3) (2,382)(4) 137,636 Tradepayables ...... 4,030 3,560 2,101 4,688 1,024 1,035 (3,504) 12,934 Sundry provisions .... 172 1,038 1,398 4,512 3,010 144 589 10,863 Other...... 1,848 506 2,919 2,652 1,220 296 (111) 9,330 Operating liabilities ...... 6,050 5,104 6,418 11,852(2) 5,254 1,475 (3,026)(5) 33,127

(1) Of which €359 million regarding units classified as “Held for sale”. (2) Of which €32 million regarding units classified as “Held for sale”. (3) Of which €4 million regarding units classified as “Held for sale”. (4) Of which €3 million regarding units classified as “Held for sale”. (5) Of which €4 million regarding units classified as “Held for sale”.

The following table reconciles segment assets and liabilities and the consolidated figures. at June 30, at December 31, 2012 2011 Millions of euro Total assets ...... 174,489 169,805 Equity investments accounted for using the equity method ...... 1,141 1,085 Non-current financial assets ...... 6,082 6,325 Current financial assets ...... 10,499 10,466 Cash and cash equivalents ...... 8,845 7,015 Deferred tax assets ...... 6,074 6,011 Tax receivables ...... 2,023 1,251 Financial and tax assets of “Assets held for sale” ...... 10 16 Segment assets ...... 139,815 137,636 Total liabilities ...... 119,858 115,365 Long-termloans...... 56,665 48,703 Non-current financial liabilities ...... 2,432 2,307 Short-term loans ...... 5,764 4,799 Current portion of long-term loans ...... 4,998 9,672 Current financial liabilities ...... 4,186 3,668 Deferred tax liabilities ...... 11,538 11,505 Incometaxpayableandothertaxpayables ...... 2,298 1,560 Financial and tax liabilities of “Liabilities held for sale” ...... 18 25 Segment liabilities ...... 31,959 33,127

F-423 Information on the Consolidated Income Statement

Revenues 5. Revenues — €40,692 million 1st Half

2012 2011 Change Millions of euro Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies ...... 34,914 32,967 1,947 Revenuesfromthesaleandtransportofnaturalgastoendusers...... 2,461 1,948 513 Revenuesfromfuelsales...... 940 365 575 Connection fees for the electricity and gas networks ...... 695 679 16 Remeasurement at fair value after changes in control ...... 5 358 (353) Gains on disposal of assets ...... 2 57 (55) Other ...... 1,675 2,017 (342) Total ...... 40,692 38,391 2,301

“Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund and similar bodies” totaled €34,914 million (€32,967 million in the 1st Half of 2011). Among other items, they include €17,505 million in revenues from the sale of electricity to end users (€16,890 million in the 1st Half of 2011), €8,500 million in revenues from the sale of electricity to wholesale buyers (€7,255 million in the 1st Half of 2011), €2,682 million in revenues from electricity trading activities (€3,066 million in the 1st Half of 2011), and €5,262 million in revenues from the transport of electricity (€4,895 million in the 1st Half of 2011). “Revenues from the sale and transport of natural gas to end users” amounted to €2,461 million and include €1,192 million in revenues from the sale of natural gas in Italy (€952 million in the 1st Half of 2011), €255 million in revenues from the transport of natural gas in Italy (€244 million in the 1st Half of 2011), and sales of natural gas abroad amounting to €1,014 million (€752 million in the 1st Half of 2011). “Revenues from fuel sales” came to €940 million in the 1st Half of 2012, including sales of natural gas of €738 million (€241 million in the 1st Half of 2011) and sales of other fuels of €202 million (€124 million in the 1st Half of 2011). The increase is attributable to greater trading activities on national and international markets. The gain from the “remeasurement at fair value after changes in control” came to €5 million in the 1st Half of 2012 and regard a number of small acquisitions; in the 1st Half of 2011 the gain totaled €358 million and was the result of the adjustment to their fair value of the assets and liabilities pertaining to the Group (i) remaining after the loss of control of Hydro Dolomiti Enel as a result in the change in corporate governance arrangements (€237 million); (ii) already owned by Enel prior to acquiring complete control of Enel Unión Fenosa Renovables (€76 million), Sociedad Eólica de Andalucía (€23 million, occurring in the 1st Quarter of 2011) and TP — Sociedade Térmica Portuguesa (€22 million).

F-424 Costs 6. Costs — €35,447 million 1st Half

2012 2011 Change Millions of euro Electricity ...... 14,603 13,691 912 Fuelandgas...... 6,822 5,446 1,376 Materials...... 631 658 (27) Total costs of raw materials and consumables ...... 22,056 19,795 2,261 Electricity and gas wheeling ...... 4,727 4,340 387 Leases and rentals ...... 293 296 (3) Otherservices ...... 2,509 2,369 140 Total services ...... 7,529 7,005 524 Personnel costs ...... 2,347 2,176 171 Depreciation, amortization and impairment losses ...... 2,941 2,857 84 Other operating expenses ...... 1,317 1,330 (13) Capitalizedmaterialscosts ...... (375) (367) (8) Capitalized personnel costs ...... (368) (359) (9) Total capitalized costs ...... (743) (726) (17) Total costs ...... 35,447 32,437 3,010

Purchases of “electricity” comprise those from the Single Buyer in the amount of €3,049 million (€2,937 million in the 1st Half of 2011) and purchases from the Energy Markets Operator (EMO) in the amount of €1,639 million (€1,276 million in the 1st Half of 2011). Purchases of “fuel and gas” include €3,425 million in natural gas purchases (€2,601 million in the 1st Half of 2011) and €3,397 million in purchases of other fuels (€2,845 million in the 1st Half of 2011). “Electricity and gas wheeling” in the 1st Half of 2012 increased by €387 million over the same period of 2011, essentially as a result of the increase in rates. Personnel costs in the 1st Half of 2012 amounted to €2,347 million, up €171 million or 7.9%. The Enel Group’s workforce at June 30, 2012, numbered 75,010 employees (75,360 at December 31, 2011). The Group’s workforce decreased by 350 employees during the period, entirely accounted for by the balance between new hirings and terminations. The following table shows depreciation, amortization and impairment losses for the periods under review: 1st Half 2012 2011 Change Millions of euro Depreciation...... 2,279 2,188 91 Amortization ...... 456 444 12 Impairment losses ...... 206 225 (19) Total ...... 2,941 2,857 84

F-425 “Impairment losses” in the 1st Half of 2012 mainly regard writedowns of trade receivables amounting to €179 million (€146 million in the 1st Half of 2011). It also includes impairment losses with respect to the goodwill of Endesa Ireland (€67 million), recognized for the purpose of aligning the value of net assets held for sale with the estimated realizable value. However, the balance also benefits from the writeback in respect of land in the Balearic Islands, as discussed in greater detail in the comments on “property, plant and equipment”.

Net income/(charges) from commodity risk management 7. Net income/(charges) from commodity risk management — €96 million Net income from commodity risk management reflects €188 million in net realized income on positions closed during the period and €92 million in net unrealized charges on open positions in commodity derivatives at June 30, 2012. 1st Half 2012 2011 Change Millions of euro Income Unrealizedonpositionsopenattheendoftheperiod...... 1,575 977 598 Realizedonpositionsclosedduringtheperiod...... 188 105 83 Total income ...... 1,763 1,082 681 Charges ...... — Unrealizedonpositionsopenattheendoftheperiod...... (1,667) (964) (703) Total charges ...... (1,667) (964) (703) NET INCOME/(CHARGES) FROM COMMODITY RISK MANAGEMENT ...... 96 118 (22) – of which trading/non-IFRS-IAS hedge derivatives ...... 106 101 5 – of which ineffective portion of CFH ...... — — —

8. Financial income/(expense) — €(1,501) million 1st Half 2012 2011 Change Millions of euro Interest and other income from financial assets ...... 179 109 70 Foreignexchangegains...... 342 1,028 (686) Incomefromderivativeinstruments...... 594 271 323 Incomefromequityinvestments...... 201 19 182 Otherincome...... 181 338 (157) Total financial income ...... 1,497 1,765 (268) Interestandotherchargesonfinancialdebt...... 1,487 1,378 109 Foreign exchange losses ...... 689 318 371 Expenseonderivativeinstruments...... 381 1,145 (764) Accretion of post-employment and other employee benefits ...... 181 149 32 Accretionofotherprovisions ...... 98 81 17 Chargesonequityinvestments ...... 1 — 1 Othercharges ...... 161 104 57 Total financial expense ...... 2,998 3,175 (177) TOTAL FINANCIAL INCOME/(EXPENSE) ...... (1,501) (1,410) (91)

F-426 Financial income came to €1,497 million, a decrease of €268 million compared with the same period of the previous year. This reduction is largely due to a decrease of €686 million in foreign change gains, partially offset by the increase in income from derivative instruments (€323 million) and in income from equity investments (€182 million), which in the 1st Half of 2012 include the gain on the disposal of the shareholding of 5.1% in Terna in the amount of €185 million. These factors were accompanied by a decrease in other income (€157 million), essentially due to a decline of €34 million in income on hedged items in fair value hedges, the recognition of default interest following a favorable ruling for the Group in a tax dispute in Spain in the 1st Half of 2011 (€63 million), and a decrease of €22 million in income from the remeasurement of the net liability in respect of personnel (mainly the provision for early retirement incentives). Financial expense totaled €2,998 million, a decrease of €177 million compared with the 1st Half of 2011. More specifically, the increase in interest and other charges on financial debt (€109 million), foreign exchange losses (€371 million) and other charges (essentially accounted for by the assignment of trade receivables during the period) was more than offset by the decrease in the expense on derivative instruments (€764 million). In this regard, the net foreign exchange loss of €347 million in the 1st Half of 2012 is mainly attributable to financial debt denominated in currencies other than the euro, with a decrease of €1,057 million compared with the 1st Half of 2011. This change was largely offset by the effects of transactions hedged with cross currency interest rate swaps.

9. Income taxes — €1,493 million 1st Half 2012 2011 Change Millions of euro Currenttaxes ...... 1,574 1,447 127 Adjustmentsforincometaxesrelatedtoprioryears...... (43) 1 (44) Deferred tax liabilities ...... (20) 62 (82) Deferred tax assets ...... (18) 26 (44) Total ...... 1,493 1,536 (43)

Income taxes for the 1st Half of 2012 amounted to €1,493 million, equal to 38.4% of taxable income (32.5% in the 1st Half of 2011). The effective rate reflects the negative effect of the increase in the rate for the so-called Robin Hood Tax introduced in the 2nd Half of 2011 in Italy, equal to €178 million. Excluding that item, the effective tax rate for the 1st Half of 2012 would have been 33.8%.

F-427 10. Basic and diluted earnings per share Both metrics are calculated on the basis of the average number of ordinary shares in the period, equal to 9,403,357,795 shares, with diluted earnings per share adjusted for the diluting effect of outstanding stock options (zero in both periods). 1st Half 2012 2011 Change Net income from continuing operations pertaining to shareholders of the Parent Company (millions of euro) .... 1,821 2,552 (731) Net income from discontinued operations pertaining to shareholders of the Parent Company (millions of euro) .... — — — Net income pertaining to shareholders of the Parent Company (millions of euro) ...... 1,821 2,552 (731) Numberofordinaryshares ...... 9,403,357,795 9,403,357,795 — Dilutiveeffectofstockoptions ...... — — — Basic and diluted earnings from continuing operations per share(euro) ...... 0.19 0.27 (0.08) Basic and diluted earnings from discontinued operations per share(euro) ...... — — Basicanddilutedearningspershare(euro)...... 0.19 0.27 (0.08) Please note that existing stock option plans for top management could dilute basic earnings per share in the future. For more information on those plans, please see note 20.1. Between the balance sheet date and the date of publication of the financial statements, no events or transactions took place that changed the number of ordinary shares or potential ordinary shares in circulation at the end of the year.

F-428 Information on the Consolidated Balance Sheet

11. Property, plant and equipment — €81,658 million The breakdown of property, plant and equipment at June 30, 2012 is as follows: Millions of euro Total at January 1, 2012 ...... 80,592 Capitalexpenditure ...... 2,489 Exchange rate differences ...... 703 Changeinscopeofconsolidation...... 120 Depreciation ...... (2,275) Impairment losses and writebacks ...... 24 Disposalsandotherchanges ...... 5 Total at June 30, 2012 ...... 81,658

Capital expenditure made in the 1st Half of 2012 amounted to €2,489 million, down €155 million compared with the 1st Half of 2011. The table below summarizes capital expenditure in the 1st Half of 2012 by category: 1st Half

2012 2011 Millions of euro Power plants: –thermal ...... 330 378 – hydroelectric ...... 188 200 –geothermal ...... 83 38 –nuclear...... 361 378 –alternativeenergyresources...... 324 512 Total power plants ...... 1,286 1,506 Electricity distribution network ...... 1,151 1,085 Land and buildings, other goods and equipment ...... 52 53 TOTAL(1) ...... 2,489 2,644

(1) Does not include €44 million in capital expenditure made in the 1st Half of 2012 (€68 million in the 1st Half of 2011) with regard to assets classified at “Held for sale”. Capital expenditure on power plants totaled €1,286 million, a decrease of €220 million over the same period of the previous year. The decline is largely attributable to lower investments in plants for generating power from renewable resources by the Renewable Energy Division, as well as in thermal generation plants by the Iberia and Latin America Division. These factors were partially offset by greater capital expenditure on geothermal plants. Investments in the electricity distribution network amounted to €1,151 million, up €66 million compared with the 1st Half of 2011. The change in scope of consolidation for the period mainly regarded the acquisition of the Mexican company Stipa Nayaa, which operates in the wind generation sector (€113 million). Impairment losses on property, plant and equipment amounted to €13 million, more than offset by the writeback of €36 million recognized on the value of land in the Balearic Islands following a favorable ruling by the Spanish courts.

F-429 12. Intangible assets — €38,822 million The breakdown of intangible assets at June 30, 2012 was as follows: Other Total intangible intangible assets Goodwill assets Millions of euro Total at January 1, 2012 ...... 20,733 18,342 39,075 Capitalexpenditure ...... 272 — 272 Exchange rate differences ...... 78 15 93 Changeinscopeofconsolidation...... 31 85 116 Amortization...... (456) — (456) Impairment losses and writebacks ...... 13 — 13 Otherchanges ...... (292) 1 (291) Balance at June 30, 2012 ...... 20,379 18,443 38,822

The change in intangible assets, with the exception of goodwill, is essentially attributable to investments amounting to €272 million and foreign exchange gains in the period of €78 million. These effects were partially offset by amortization of €456 million. The change in scope of consolidation for “other intangible assets” mainly regards the value attributed to the customer list acquired (on February 29, 2012 by Endesa Energia) in respect of gas customers in the Madrid metropolitan area. Other changes include €190 million in respect of the reclassification to “service concession arrangements” (carried under “non-current financial assets”) carried out following the issue of Resolution no. 474 of February 7, 2012, which clarified a number of key issues concerning the operation of the electricity distribution service in Brazil. The change in goodwill is essentially attributable to foreign exchange gains in the amount of €15 million and changes in the scope of consolidation totaling €85 million. Of the latter, €57 million regard the acquisition of additional stakes in a number of Greek companies (the Kafireas pipeline), giving the Group full control, €14 million regard the acquisition of Stipa Nayaa (a company operating in the wind generation sector in Mexico) and €1 million regard Enel Stoccaggi.

F-430 Goodwill breaks down as follows: at June 30, at Dec. 31, 2012 2011 Change Millions of euro Endesa...... 14,259 14,259 — Enel OGK-5 ...... 1,226 1,214 12 Enel Green Power Group(1) ...... 953 858 95 Slovenskéelektrárne ...... 697 697 — EnelEnergia ...... 579 579 — EnelDistributieMuntenia...... 547 552 (5) EnelEnergieMuntenia ...... 112 114 (2) RusEnergoSbyt ...... 43 43 — Nuove Energie ...... 26 26 — EnelStoccaggi...... 1 — 1 Total ...... 18,443 18,342 101

(1) Includes Enel Green Power España, the cash generating unit comprising the companies acquired by the Renewable Energy Division in Latin America (formerly Enel Green Power Latin America), Enel Green Power North America, Enel Green Power Hellas, Enel Green Power France, Enel Green Power Romania, Enel Green Power Bulgaria, Enel Green Power Portoscuso and other minor companies. The CGUs to which goodwill has been allocated are tested for impairment annually. The test is conducted on the basis of the cash flows set out in the 2012-21 Business Plan prepared by management, which are discounted using specific discount rates. The key assumptions used in determining the value in use of the individual CGUs and the sensitivity analyses are reported in the consolidated annual report for 2011. At June 30, 2012, the main assumptions applied in determining value in use remain sustainable and the results of the 1st Half of 2012 appear to be broadly in line with the expectations set out in the Plan.

13. Deferred tax assets and liabilities — €6,074 million and €11,538 million The following table details changes in deferred tax assets and liabilities calculated based on the tax rates established by applicable regulations. The table also reports the amount of deferred tax assets that, where allowed, can be offset against deferred tax liabilities. at June 30, at December 31, 2012 2011 Change Millions of euro Deferred tax assets ...... 6,074 6,011 63 Deferred tax liabilities ...... 11,538 11,505 33 Of which: Non-offsettable deferred tax assets ...... 749 865 (116) Non-offsettable deferred tax liabilities ...... 3,989 4,018 (29) Excess net deferred tax liabilities after any offsetting ...... 2,224 2,341 (117) In addition the effect recognized through the income statement, the rise in deferred tax assets and liabilities is also attributable to the change in deferred taxation in respect of foreign exchange differences.

F-431 14. Equity investments accounted for using the equity method — €1,141 million Equity investments in associated companies accounted for using the equity method are as follows:

at December 31, 2011 at June 30, 2012 Income Change in scope % holding effect of consolidation Other changes % holding Millions of euro SeverEnergia ..... 289 19.6% (1) — 3 291 19.6% EnelReteGas..... 131 19.9% 2 — (7) 126 14.8% Elica2 ...... 168 30.0% — (34) — 134 30.0% Chisholm View Wind Project . . . — — — 103 3 106 49.0% LaGeo ...... 91 36.2% 18 — (15) 94 36.2% Endesa Gas T&D (formerly Nubia 2000) ...... 29 20.0% 11 — (5) 35 20.0% Tecnatom ...... 25 45.0% 2 — — 27 45.0% CESI...... 29 41.9% 3 — — 32 42.7% Other ...... 323 10 (5) (32) 296 Total ...... 1,085 45 64 (53) 1,141

The “change in scope of consolidation” item includes €103 million in respect of the acquisition of 49% of the Chisholm View Wind Project, a company operating in the wind generation sector in Oklahoma. That change was partially offset by a number of Greek companies (the Kafireas pipeline) included in the broader group of wind power initiatives called Elica 2, which had previously been accounted for using the equity method. Following the acquisition of additional equity stakes, they are now subsdiaries and are consolidated on a full line-by-line basis.

15. Non-current financial assets — €6,082 million

at June 30, at December 31, 2012 2011 Change Millions of euro Equityinvestmentsinothercompanies ...... 548 993 (445) Receivables and securities included in net financial debt (see note 18.3) ...... 3,501 3,576 (75) Derivative contracts (see note 3.1) ...... 1,519 1,387 132 Service concession arrangements ...... 470 317 153 Prepaid non-current financial expense ...... 44 52 (8) Total ...... 6,082 6,325 (243)

“Equity investments in other companies” includes investments measured at fair value in the amount of €345 million, while the remainder of €203 million regarded investments whose fair value could not be readily determined and, in the absence of plans to sell the holdings, were therefore recognized at cost less impairment losses. The reduction in the item is primarily attributable to the disposal of the holding in Terna (€266 million at December 31, 2011). The item also includes the investment in Bayan Resources in the amount of €328 million (€511 million at December 31, 2011), which is classified as an available-for-sale financial asset pursuant to IAS 39.

F-432 16. Trade receivables — €11,689 million Trade receivables from customers are recognized net of provisions for doubtful accounts, which at the end of the period came to €1,561 million, compared with an opening balance of €1,661 million. The table below shows the changes in these provisions. Millions of euro Total at January 1, 2012 ...... 1,661 Accruals...... 276 Utilization ...... (271) Writebacks ...... (97) Otherchanges ...... (8) Total at June 30, 2012 ...... 1,561

Writebacks essential regard trade receivables in respect of the Romanian railway company, which were paid during the 1st Half of 2012.

17. Current financial assets — €10,499 million at June 30, at December 31, 2012 2011 Change Millions of euro Current financial assets included in net financial position (see note 18.4) ...... 7,509 7,954 (445) Derivative contracts (see note 3.2) ...... 2,912 2,420 492 Other ...... 78 92 (14) Total ...... 10,499 10,466 33

18. Net financial position and long-term financial receivables and securities — €47,572 million The following table reports the net financial position and long-term financial receivables and securities on the basis of the items on the consolidated balance sheet. at June 30, at December 31, Notes 2012 2011 Change Millions of euro Long-termloans...... 18.1 56,665 48,703 7,962 Short-term loans ...... 18.2 5,764 4,799 965 Current portion of long-term loans ...... 18.1 4,998 9,672 (4,674) Non-current financial assets ...... 18.3 (3,501) (3,576) 75 Current financial assets ...... 18.4 (7,509) (7,954) 445 Cash and cash equivalents ...... 18.5 (8,845) (7,015) (1,830) Total ...... 47,572 44,629 2,943

F-433 Pursuant to the CONSOB instructions of July 28, 2006, the following table reports the net financial position at June 30, 2012, and December 31, 2011, reconciled with net financial debt as provided for in the presentation methods of the Enel Group. at June 30, 2012 at December 31, 2011 Change Millions of euro Cash and cash equivalents on hand ...... 658 1,068 (410) Bank and post office deposits ...... 8,187 5,947 2,240 Securities ...... 55 52 3 Liquidity ...... 8,900 7,067 1,833 Short-term financial receivables ...... 2,099 1,900 199 Factoring receivables ...... 301 370 (69) Short-term portion of long-term financial receivables ...... 5,054 5,632 (578) Current financial receivables ...... 7,454 7,902 (448) Bankdebt ...... (267) (888) 621 Commercialpaper...... (4,490) (3,204) (1,286) Short-term portion of long-term bank debt ...... (763) (6,894) 6,131 Bonds (short-term portion) ...... (3,844) (2,473) (1,371) Preference shares (short-term portion) ...... (180) — (180) Other loans (short-term portion) ...... (211) (305) 94 Other short-term financial payables ...... (1,007) (707) (300) Total short-term financial debt ...... (10,762) (14,471) 3,709 Net short-term financial position ...... 5,592 498 5,094 Debt to banks and financing entities ...... (16,591) (9,918) (6,673) Bonds ...... (38,819) (37,461) (1,358) Preferenceshares ...... — (180) 180 Otherloans...... (1,255) (1,144) (111) Long-term financial position ...... (56,665) (48,703) (7,962) NET FINANCIAL POSITION as per CONSOB communication ...... (51,073) (48,205) (2,868) Long-term financial receivables and securities .. 3,501 3,576 (75) NET FINANCIAL DEBT ...... (47,572) (44,629) (2,943)

18.1 Long-term loans (including the portion falling due within 12 months) — €61,663 million The aggregate includes long-term liabilities in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within twelve months. at December 31, at June 30, 2012 2011 Change Of which Of which falling current due at more Total portion than 12 months Millions of euro Bonds ...... 42,663 3,844 38,819 39,934 2,729 Preferenceshares ...... 180 180 — 180 — Bankloans ...... 17,354 763 16,591 16,812 542 Otherloans...... 1,466 211 1,255 1,449 17 Total ...... 61,663 4,998 56,665 58,375 3,288

F-434 The following table shows long-term debt and repayment schedules at June 30, 2012, in respect of bonds and preference shares, grouped by loan and interest rate type. at December 31, at June 30, 2012 2011 Portion falling due at more Carrying Current than Carrying Maturing amount Fair value portion 12 months amount Fair value Millions of euro Bonds: – listed, fixed rate ...... 2012-2097 27,174 26,332 2,174 25,000 25,042 24,797 – listed, floating rate ...... 2012-2031 6,865 6,680 635 6,230 6,521 6,436 – unlisted, fixed rate ...... 2012-2039 6,938 6,353 977 5,961 6,606 5,904 – unlisted, floating rate . . 2012-2032 1,686 1,274 58 1,628 1,765 1,438 Total ...... 42,663 40,639 3,844 38,819 39,934 38,575 Preference shares: – floating rate . . . 2013(1) 180 181 180 — 180 181 Total ...... 42,843 40,820 4,024 38,819 40,114 38,756

(1) The preference shares issued by Endesa Capital Finance LLC are perpetual, with an option for early redemption at par as from 2013. The balance for bonds is stated net of €571 million relating to the unlisted floating-rate “Special series of bonds reserved for employees 1994-2019”, which the Parent Company holds in portfolio, while Enel.Re holds bonds issued by Enel SpA totaling €30 million.

F-435 The table below reports long-term financial debt by currency and interest rate.

Long-term financial debt by currency and interest rate at Dec. 31, at June 30, 2012 2011 at June 30, 2012 Current Current average effective Nominal interest interest Balance value Balance rate rate Millions of euro Euro ...... 43,535 43,863 40,608 3.77% 3.94% USdollar ...... 9,008 9,032 8,795 5.82% 6.07% Pound sterling ...... 4,646 4,699 4,483 5.83% 5.86% Colombianpeso ...... 1,418 1,418 1,299 8.90% 8.90% Brazilian real ...... 1,093 1,096 1,090 10.50% 10.70% Chileanpeso/UF...... 568 583 712 8.08% 9.58% Peruviansol...... 364 364 356 6.70% 6.70% Russianruble ...... 338 338 335 7.80% 7.80% Japaneseyen...... 345 345 314 2.35% 2.37% Othercurrencies...... 348 349 383 Total non-euro currencies ...... 18,128 18,224 17,767 TOTAL ...... 61,663 62,087 58,375

Change in the nominal value of long-term debt Change Exchange at Dec. 31, in own New rate at June 30, 2011 Repayments bonds financing differences 2012 Millions of euro Bonds ...... 40,188 (1,282) (52) 3,591 549 42,994 Preferenceshares ...... 181 — — — — 181 Bankloans ...... 16,871 (6,259) — 6,814 20 17,446 Otherloans...... 1,449 (154) — 168 3 1,466 Total ...... 58,689 (7,695) (52) 10,573 572 62,087

Compared with December 31, 2011, the nominal value of long-term debt increased by €3,398 million, which is the net effect of €7,695 million in repayments, €10,573 million in new financing, €52 million in changes in holdings of own bonds and €572 million in exchange rate differences. The main repayments in the 1st Half of 2012 concerned: Š bonds amounting to €1,282 million, of which €1,000 million in respect of two retail bonds (one fixed rate, the other floating rate) issued by Enel SpA and maturing in March 2012; Š bank loans amounting to €6,259 million, of which: Š €2,000 million in respect of repayments of revolving credit lines by Enel SpA; Š €1,933 million in respect of the tranche maturing in 2012 of the 2007 and 2009 Credit Facilities by Enel SpA and Enel Finance International;

F-436 Š €1,000 million in respect of repayments of revolving credit lines by Enel Finance International; Š €706 million in respect of floating rate bank loans by Endesa; Š €385 million in respect of revolving credit lines by Endesa; Š other loans amounting to €154 million. Financing operations carried out in the 1st Half of 2012 regarded: Š bonds amounting to €3,591 million, of which: Š private placements by Enel Finance International amounting to €393 million; Š a retail bond maturing on February 20, 2018 issued by Enel SpA in the amount of €3,000 million in two tranches: one fixed rate 4.875% (€2,500 million) and one floating rate (€500 million); Š bonds issued by Ampla in Brazilian reais in a total amount equal to €155 million; Š bank loans of €6,814 million, including: Š drawings by Enel Finance International on term loan facility agreements and long-term bilateral credit facilities (falling due in 2017) totaling €3,550 million; Š an increase in drawings by Enel SpA on committed revolving credit facilities in the amount of €2,100 million (of which €2,000 million on the 5-year €10 billion revolving credit line obtained in April 2010 by Enel SpA and Enel Finance International); Š an increase in drawings by Slovenské elektrárne on committed revolving credit facilities in the amount of €200 million; Š the drawing by Enel Distribuzione on a facility granted by Cassa Depositi e Prestiti with EIB funds in the amount of €340 million falling due in 2028; Š the drawing by Endesa on bank loans in the total amount of €285 million; Š the drawing by Enel Green Power on a EIB loan in the amount of €140 million falling due in 2032; Š other loans amounting to €168 million. At June 30, 2012, 29% of net financial debt paid floating interest rates (31% at December 31, 2011). Taking account of cash flow hedges for interest rate risk considered effective under the provisions of the IFRS-EU, exposure to interest rate risk at June 30, 2012, was 19% (9% at December 31, 2011). If account is also taken of interest rate derivatives used as hedges but which do not qualify for hedge accounting, the residual exposure of net financial debt to interest rate risk falls to 17% (4% at December 31, 2011). The Group’s main long-term financial debts are governed by covenants containing undertakings by the borrowers (Enel, Endesa and the other Group companies) and in some cases Enel SpA as guarantor that are commonly adopted in international business practice. Readers are invited to refer to the 2011 consolidated financial statements for a detailed review of their nature. In addition, the term loan facility of €3,200 million obtained on February 20, 2012, by Enel Finance International (guaranteed by Enel SpA) provides for “negative pledge”, “pari passu”, “change of control” and “event of default” clauses, as well as the following covenant: Š a gearing/leverage clause, under which at the end of each measurement period (semiannual), the net financial debt of the Group shall not exceed 4.5 times annual consolidated EBITDA.

F-437 In addition, following the first use of the Credit Agreement 2009, the following covenants also took effect: Š a gearing clause, under which, at the end of each measurement period (semiannual), Enel’s consolidated net financial debt shall not exceed 4.5 times annual consolidated EBITDA; Š an interest cover clause, under which, at the end of each measurement period (semiannual), the ratio of annual consolidated EBITDA to net consolidated interest expense shall not be less than 4. As of the date of these condensed interim consolidated financial statements, these parameters were compliant and there were no events of default or restrictions on the use of the loans.

18.2 Short-term loans — €5,764 million

At June 30, 2012, short-term loans amounted to €5,764 million, an increase of €965 million compared with December 31, 2011. They break down as follows:

at June 30, 2012 at Dec. 31, 2011 Change Millions of euro Short-term amounts due to banks ...... 267 888 (621) Commercialpaper ...... 4,490 3,204 1,286 Cashcollateralandotherfinancingonderivatives...... 932 650 282 Other short-term financial payables ...... 75 57 18 Total ...... 5,764 4,799 965

The payables represented by commercial paper relate to issues outstanding at the end of June 2012 within the framework of the €6,000 million program launched in November 2005 by Enel Finance International and guaranteed by Enel SpA, which was renewed in April 2010, as well as the program of Endesa Latinoamérica in the amount of €3,318 million. At June 30, 2012, the issues under the above programs totaled €4,490 million, of which €3,477 million for Enel Finance International and €1,013 million for Endesa Latinoamérica. The nominal value of the commercial paper was €4,495 million, denominated in euros (€4,271 million) and US dollars (equal to €224 million, fully hedged against exchange rate risk by currency swaps).

18.3 Non-current financial assets included in debt — €3,501 million

at June 30, 2012 at Dec. 31, 2011 Change Millions of euro Other financial receivables ...... 3,371 3,496 (125) Securities held to maturity ...... 113 68 45 Financial investments in funds or portfolio management products at fair value through profit or loss ...... 11 10 1 Securities available for sale ...... 6 2 4 Total ...... 3,501 3,576 (75)

The decrease in “other financial receivables” is mainly connected with the receipt of the receivables for 2012-2015 (resolution no. 199/11) due from the Electricity Equalization Fund for reimbursement of the extraordinary costs incurred by distributors for the early replacement of electromechanical meters with digital meters. “Securities held to maturity” are bonds.

F-438 18.4 Current financial assets included in debt — €7,509 million at June 30, 2012 at Dec. 31, 2011 Change

Millions of euro Short-term portion of long-term financial receivables . . . 5,054 5,632 (578) Receivables for factoring advances ...... 301 370 (69) Securities: — – securities available for sale ...... 55 51 4 – securities held to maturity ...... — 1 (1) Financial receivables and cash collateral ...... 1,526 1,076 450 Other...... 573 824 (251) Total ...... 7,509 7,954 (445)

The “short-term portion of long-term financial receivables” consists of the financial receivable in respect of the Spanish electricity system deficit in the amount of €4,896 million (€5,379 million at December 31, 2011). The change for the period essentially reflects new receivables accrued in the 1st Half of 2012 and amounts collected (€1,886 million including the effects of reimbursements in respect of extra-peninsular generation, of which €1,705 million by way of the assignment of the receivables to the special securitization fund as established by the Spanish government).

18.5 Cash and cash equivalents — €8,845 million Cash and cash equivalents are not restricted by any encumbrances, apart from €228 million (€160 million at December 31, 2011) essentially in respect of deposits pledged to secure transactions.

19. Assets and liabilities held for sale — €363 million and €73 million The composition of assets and liabilities held for sale at June 30, 2012 and December 31, 2011 is reported in the following table. Assets held for sale Liabilities held for sale at June 30, 2012 at Dec. 31, 2011 Change at June 30, 2012 at Dec. 31, 2011 Change Millions of euro Endesa Ireland . . . 344 360 (16) 70 54 16 Other ...... 19 21 (2) 3 4 (1) Total ...... 363 381 (18) 73 58 15

20. Shareholders’ equity — €54,631 million 20.1 Equity attributable to the shareholders of the Parent Company — €38,537 million Share capital — €9,403 million As no options were exercised during the 1st Half of the year, share capital at June 30, 2012, is represented by 9,403,357,795 ordinary shares with a par value of €1.00 each (9,403,357,795 at December 31, 2011). During the 1st Half of 2012 no stock options were granted or lapsed under stock option plans. Following the checks performed by the Board of Directors at the time of the approval of the financial statements at December 31, 2011 to determine whether the operational targets (EPS and ROACE) for the 2008 stock option plan had been achieved, 9,623,735 options vested, equal to 120% of the base amount granted (8,019,779 options).

F-439 At June 30, 2012, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, no shareholders held more than 2% of the total share capital, apart from the Ministry for the Economy and Finance, which holds 31.24%, and Blackrock Inc., which holds a 2.74% stake wholly owned by its subsidiaries. The Shareholders’ Meeting of April 30, 2012, approved a dividend for 2011 of €0.26 per share and the distribution of €0.16 per share as the balance on the dividend given that an interim dividend of €0.10 per share had been paid in November 2011. The balance was paid (gross of any withholding taxes) starting from June 21, 2012, with an ex-dividend date of June 18, 2012.

Other reserves — €9,779 million Share premium reserve — €5,292 million There were no changes in the reserve in the 1st Half of 2012.

Legal reserve — €1,881 million Other reserves — €2,262 million Reserve from translation of financial statements in currencies other than euro — €224 million The change in this aggregate for the period is attributable to the net depreciation of the functional currency against the foreign currencies used by subsidiaries.

Reserve from measurement of financial instruments — €(717) million This item includes net gains recognized directly in equity resulting from the measurement of cash flow hedge derivatives, as well as net unrealized gains arising in respect of the fair value measurement of financial assets.

Reserve from disposal of equity interests without loss of control — €749 million There were no changes in the reserve in the 1st Half of 2012.

Reserve from transactions in non-controlling interests — €78 million There were no changes in the reserve in the 1st Half of 2012.

Reserve from equity investments accounted for using the equity method — €10 million The reserve reports the share of comprehensive income to be recognized directly in equity for companies accounted for using the equity method.

F-440 The table below shows the changes in gains and losses recognized directly in equity, including non- controlling interests.

at Dec. 31, 2011 Change at June 30, 2012

Gains/ (Losses) Of which recognized Of which Of which shareholders Of which in equity Released shareholders Of which shareholders Of which of Parent non-controlling for the to income of Parent non-controlling of Parent non-controlling Total Company interests period statement Taxes Total Company interests Total Company interests

Millions of euro Reserve from translation of financial statements in currencies other than euro...... 609 120 489 419 — — 419 104 315 1,028 224 804 Reserve from measurement of financial instruments ...... (174) (49) (125) (614) (128) 89 (653) (668) 15 (827) (717) (110) Share of OCI of associates accounted for using the equity method ...... 15 15 — (5) — — (5) (5) — 10 10 — Total gains/ (losses) recognized in equity ...... 450 86 364 (200) (128) 89 (239) (569) 330 211 (483) 694

20.2 Non-controlling interests — €16,094 million The following table reports the composition of non-controlling interests by division.

at June 30, 2012 at Dec. 31, 2011 Change Millions of euro IberiaandLatinAmerica ...... 11,671 11,528 143 International...... 2,093 1,958 135 RenewableEnergy ...... 2,126 1,952 174 GenerationandEnergyManagement ...... 204 212 (8) Total ...... 16,094 15,650 444

21. Provisions for risks and charges — €7,583 million Millions of euro at January 1, 2012 ...... 7,831 Accruals...... 206 Utilization ...... (445) Releases ...... (157) Accretion ...... 164 Exchange rate differences ...... (10) Otherchanges ...... (6) at June 30, 2012 ...... 7,583

Provisions for risks and charges at June 30, 2012, also include the provisions for nuclear decommissioning with respect to the Spanish and Slovakian plants in the amount of €3,088 million (€2,946 million at December 31, 2011), for early-retirement incentives totaling €1,398 million (€1,548 million at December 31, 2011) and for litigation in the amount of €1,011 million (€846 million at December 31, 2011).

F-441 22. Non-current financial liabilities — €2,432 million The item reports the fair value of derivatives only. For more information, please see note 3.3.

23. Current financial liabilities — €4,186 million at June 30, 2012 at Dec. 31, 2011 Change Millions of euro Deferred financial liabilities ...... 842 796 46 Derivative contracts (see note 3.4) ...... 3,146 2,645 501 Otheritems...... 198 227 (29) Total ...... 4,186 3,668 518

24. Related parties As an operator in the field of generation, distribution, transport and sale of electricity in Italy, the Group provides services to a number of companies controlled by the Italian State, Enel SpA’s controlling shareholder. In the current regulatory framework, the Enel Group concludes transactions with Terna — Rete Elettrica Nazionale (Terna), the Single Buyer, the Energy Services Operator, and the Energy Markets Operator (each of which is controlled either directly or indirectly by the Ministry for the Economy and Finance). In particular, companies of the Sales Division acquire electricity from the Single Buyer and pay Terna fees for the use of the national transmission network. Companies that are a part of the Generation and Energy Management Division, in addition to paying fees for the use of the national transmission network to Terna, carry out electricity transactions with the Energy Markets Operator on the Power Exchange and sell electricity to the Single Buyer. The companies of the Renewable Energy Division that operate in Italy sell electricity to the Energy Markets Operator on the Power Exchange. The Group also acquires fuel for generation and gas for distribution and sale from Eni, a company controlled by the Ministry for the Economy and Finance. All transactions with related parties are concluded on normal market terms and conditions. Fees for the transport of electricity payable to Terna and certain charges paid to the Energy Markets Operator are determined by the Authority for Electricity and Gas. Transactions relating to purchases and sales of electricity concluded with the Energy Markets Operator on the Power Exchange and with the Single Buyer are settled at market prices. Finally, within the framework of the Group’s rules of corporate governance, in November 2010, the Board of Directors of Enel SpA approved a procedure governing the approval and execution of transactions with related parties carried out by Enel SpA directly or through subsidiaries. The procedure (available at http://www.enel.com/it-IT/group/governance/principles/related_parts/) sets out rules designed to ensure the transparency and procedural and substantive propriety of transactions with related parties. It was adopted in implementation of the provisions of Article 2391- bis of the Italian Civil Code and the implementing regulations issued by CONSOB. In the 1st Half of 2012, no transactions were carried out for which it was necessary to make the disclosures required in the rules on transactions with related parties adopted with CONSOB Resolution no. 17221 of March 12, 2010, as amended with Resolution no. 17389 of June 23, 2010.

F-442 The following table summarizes transactions with related parties and with associated companies outstanding at June 30, 2012 and carried out during the period, respectively. Related parties Associated companies Italian Total Single Post Enel Overall balance-%of Buyer EMO Terna ESO Eni Office Other Total SeverEnergia Rete Gas Elica 2 CESI Other Total total sheet item total Millions of euro Balance sheet: Trade receivables ...... 4 557 339 86 2 — 53 1,041 2142—220 1,061 11,689 9.1 Othercurrentassets ...... — — 28 1 — — — 29 —51—2834 63 3,078 2.0 Tradepayables ...... 922 543 518 897178 61 29 3,148 —45—32371 3,219 11,413 28.2 Other current liabilities ...... 1 — 13 — 8 — — 22 ————1010 32 9,551 0.3 Non-current financial liabilities ...... — — — — 8 — — 8 —————— 8 2,432 0.3 Income statement: Revenuesfromsales ...... — 2,406 525 147 257 — 24 3,359 —252—431 3,390 40,003 8.5 Otherrevenues ...... 1 — 19 4 — — — 24 —1——12 26 689 3.8 Raw materials and

F-443 consumables...... 3,049 1,639 132 1 108 — 11 4,940 — — — 119 119 5,059 22,056 22.9 Services ...... — 77 796 — 40 57 17 987 — 168 — 9 — 177 1,164 7,529 15.5 Otheroperatingexpenses .... 1 7 8 — — — 10 26 ———1—1 27 1,317 2.1 Net income/(charges) from commodity risk management...... (3) — 38 — — — — 35 —————— 35 96 36.5 Financialincome...... — — — — — — — — —5———5 5 1,497 0.3 25. Contractual commitments and guarantees The commitments entered into by the Group and the guarantees given to third parties are shown below. at June 30, 2012 at December 31, 2011 Change Millions of euro Guarantees given: – sureties and other guarantees granted to third parties ...... 5,212 4,766 446 Commitments to suppliers for: – electricity purchases ...... 52,615 54,708 (2,093) – fuel purchases ...... 67,120 69,008 (1,888) –varioussupplies...... 3,175 3,153 22 –tenders...... 1,534 1,936 (402) –other...... 2,269 2,458 (189) Total ...... 126,713 131,263 (4,550) TOTAL ...... 131,925 136,029 (4,104)

Commitments for electricity amounted to €52,615 million at June 30, 2012, of which €21,879 million refer to the period July 1, 2012-2016, €10,799 million to the period 2017-2021, €7,047 million to the period 2022-2026 and the remaining €12,890 million beyond 2026. Commitments for the purchase of fuels are determined with reference to the contractual parameters and exchange rates applicable at the end of the period (given that fuel prices vary and are mainly set in foreign currencies). The total at June 30, 2012, was €67,120 million, of which €39,997 million refer to the period July 1, 2012-2016, €20,411 million to the period 2017-2021, €4,820 million to the period 2022-2026 and the remaining €1,892 million beyond 2026.

26. Contingent liabilities and assets Compared with the consolidated financial statements at December 31, 2011 which the reader is invited to consult, the following main changes have occurred in contingent assets and liabilities.

Porto Tolle thermal plant — Air pollution — Criminal proceedings against Group directors and employees — Damages for environmental harm With regard to the criminal proceedings against Group directors and employees for a number of cases of air pollution linked to the emissions of the Porto Tolle thermal plant, at the hearing of February 7, 2012, the pre-trial hearing judge of Rovigo, granting the request of the Public Prosecutor’s Office of Rovigo, ordered the committal for trial of all of the accused for the offence of willful omission of accident prevention measures. The next hearing is scheduled for September 27, 2012, before the Adria section of the Rovigo court.

BEG litigation As regards the BEG litigation concerning alleged breach of contract for the construction of a hydroelectric plant in Albania, on February 8, 2012, Albania Beg Ambient filed suit against Enel and Enelpower with the Tribunal de Grande Instance in Paris in order to render the ruling of the Tirana Court of March 24, 2009, enforceable in France. The hearing before the French court is scheduled for October 10, 2012.

F-444 Registration fees On March 27, 2012, the Revenue Agency served Enel Distribuzione with an assessment requesting payment of €38 million in additional registration fees, plus interest, that it considers due in respect of the disposal of Enel Linee Alta Tensione Srl. The assessment regards, in line with the established line of court decisions concerning abuse of right (requalification of transaction as a disposal of a business unit — subject to a proportionate registration fee), the transfer of the high-voltage business unit to Enel Linee Alta Tensione (as of January 1, 2009) and the subsequent sale of the equity investment to Terna (on April 1, 2009). Enel feels that the assessment can be effectively and favorably challenged, both in view of the obvious economic reasons for the form of the transaction and the significant procedural flaws. Accordingly, the assessment is being challenged before the competent Provincial Tax Commission.

Spain With regard to the suit filed by Josel SL in March 2009 against Endesa Distribución Eléctrica SL to withdraw from the contract for the sale of several buildings due to changes in their zoning status, Endesa appealed the ruling granting the request to permit withdrawal from the contract and ordering Endesa to repay the amounts paid for the sale plus interest and costs. On February 13, 2012, the Audiencia Provincial de Palma de Mallorca overturned the initial ruling. The latter judgment was appealed by Josel with the Tribunal Supremo.

27. Subsequent events Agreement with consumer associations for extraordinary grant to households affected by snow emergency On July 11, 2012, Enel and the consumer associations signed an agreement providing for an extraordinary grant for households that suffered hardship as a result of the exceptionally severe snow storm in February this year. As part of its corporate social responsibility commitment, Enel agreed with the consumer associations to make a special payment for the hardship caused by service interruptions of more than three and a half days, in addition to the measures provided for in the Authority for Electricity and Gas Resolution ARG/elt no. 198/11. The grant, which varies in relation to the duration of the interruption, amounts to €90 for each additional 24 hours subsequent to the three and a half day threshold. It supplements the indemnity of €300 already provided for in the Authority resolution, up to a maximum of €650.

Regulatory developments involving electricity distribution in Argentina The regulation of the electricity industry in Argentina is causing a mismatch between revenues and costs, both as regard electricity generation and electricity distribution, with an adverse impact on the financial stability of the electric companies in that country. Accordingly, at June 30, 2012, a number of Group companies in Argentina delayed compliance with requirement to settle a number of debts that had fallen due. In response, on July 12, 2012, the national electricity regulator in Argentina (ENRE) notified Edesur that it had appointed a commissioner for a period of 45 days (extendable) to inspect and verify all acts of ordinary administration in the distribution of electricity by Edesur. That appointment does not cause the Group to lose control over that company. On July 20, 2012, Edesur appealed the appointment.

Financing for Caney River wind farm On July 20, 2012, Enel Green Power North America was awarded a grant of about $99 million by the US Treasury Department for the construction of the Caney River wind farm in Kansas. The grant was awarded to the plant under Section 1603 of the American Recovery and Reinvestment Act of 2009, President Obama’s economic stimulus program.

F-445 Enel and the City of Bologna sign agreement for “Smart City” initiative On July 20, 2012, the mayor of Bologna and Enel signed a protocol of understanding for the European “Smart Cities” initiative, which will make Bologna an eco-sustainable city. The “Smart Cities”, supported by the European Union and involving cities that have signed the Covenant of Mayors, is part of the European Industrial Initiatives and is intended to create the conditions and technologies to build sustainable cities that combine environmental protection, energy efficiency and economic sustainability in a single urban model.

Corporate rationalization in Latin America On July 25, 2012, the Board of Directors of Enersis — a Chilean company controlled by Endesa through its wholly-owned subsidiary Endesa Latinoamérica, which holds a direct interest of 60.6% in the capital of Enersis — called an extraordinary shareholders’ meeting for September 13, 2012 to approve a capital increase of up to the equivalent of $8,020 million, to be subscribed in cash and/or in kind. Specifically, with regard to the portion of the capital increase that the Group would subscribe, the transaction calls for Endesa Latinoamérica to contribute its interests in a number of Latin American companies operating in the electricity sector (in Brazil, Colombia, Peru, Chile and Argentina, in most of which Enersis already holds a direct stake), which have been appraised by an independent expert.

Enel and the EIB: agreement for €380 million loan for investment in Enel Distribuzione networks On July 25, 2012, Enel Distribuzione signed an agreement with the European Investment Bank (“EIB”) for a €380 million loan to cover a portion of its investments relating to efficiency improvements in the Italian electricity network provided for in Enel Distribuzione’s 2012-2014 business plan. The investments financed by the loan are intended to upgrade the national distribution grid, with more than 37% of the spending allocated for works in the south of Italy. The initiatives will enable the connection of distributed renewable generation plants to the grid and improve service quality, with a reduction of the duration and number of interruptions per customer. The 20-year financing agreement (maturing in 2032) has a 5-year grace period (until 2018). The funds will be disbursed by the end of 2012 and the loan is secured by a parent company guarantee provided by Enel SpA.

F-446

ANNEX A: GLOSSARY OF TERMS AND DEFINITIONS

Biomass ...... Non-fossil biological matter, which can serve as a renewable resource of energy. The exact identity of the matter may depend on seasons, sunlight, climate, agricultural techniques, plant growth and the intensity of usage. Emissions Allowances and other negotiable emissions rights ...... Each negotiable emissions right entitles a company to emit one ton of CO2. The rights can be granted via the national allocation plans (Emissions Allowances). Combined-cycle gas turbine (CCGT) power plants...... Combined-cycle technology is technology used in electric energy production plants composed of one or more groups of turbo gas generators arranged such that the heat of their exhaust gases stokes a boiler that can eventually also be fuelled with supplementary combustible; the steam produced by the boiler is in turn used for the running of a steam turbine attached to a generator. Decommissioning ...... The process of decontamination and dismantling of facilities, and the restoration of a site aiming at reaching: (i) the complete demolition of a nuclear plant; (ii) the clearance of any restriction due to the presence of radioactive materials; and (iii) the restoration of the site for further usage. Distribution ...... Transportation and conversion of electric energy on distribution networks of high, medium and low voltage for delivery to end-users. Electricity Consumption ..... Electricity consumption for a given period is equal to the sum of electricity invoiced by utilities (Enel, municipal electric companies, other companies) and the amount consumed by self-generators. It is equal to electricity demand net of grid losses. Electricity Demand ...... The quantity of electricity to make available on the grid. It is equal to the sum of user consumption and grid losses. Energy Markets Operator (EMO) ...... The company established by the ESO to operate the financial side of the electricity market on a transparent and objective basis, with a view to fostering competition among generators and ensuring the availability of adequate reserve capacity. Energy Services Operator (ESO) ...... The Gestore dei Servizi Elettrici Società per Azioni, established pursuant to Article 3 of the Bersani Decree, and wholly owned by the MEF, that distributes incentives for the generation of electricity from renewable and certain equivalent resources. It also certifies plants and their output as renewable. Eligible Client ...... An Eligible Client, under Article 2 of the Bersani Decree, is a natural person or corporate body, which, in respect of electricity or gas, is entitled to contract supply agreements with any producer, distributor or wholesaler, both in Italy and abroad. As of January 1, 2003, all clients are Eligible Clients with respect to gas and, as of July 1, 2007, all clients are Eligible Clients with respect to electricity. Energy Efficiency Certificate (EEC) ...... A “titolo di efficienza energetica” which attests to energy efficiency savings. Energy Efficiency Certificates are traded on a market managed by the Electricity Market Operator. Each certificate represents savings of one ton of petroleum. European Pressurized Reactor (EPR) ...... A generation III+ nuclear fission reactor in which the core is cooled and the neutrons are moderated with ordinary water (sometimes called light water to distinguish it from heavy water). Generation ...... The production of electric energy, regardless of the generating process.

A-1

Gigawatt (GW) ...... A unit of electric power equal to one billion watts (1,000 MW).

Gigawatt-hour (GWh) ...... A unit of electrical energy equal to one million kWh.

Green certificate ...... A certificate issued provided for under Article 5 of the Ministerial Decree of November 11, 1999, that certifies the generation of electricity from renewable resources. Green certificates are issued by the ESO for the first fifteen years of operation of a plant and can be traded directly or on the market organized by the ESO. Demand is supported by the requirement for generation companies and importers to deliver a portion of their annual output in the form of power generated from renewable resources. Gross electricity production The total amount of electricity (including that generated subject to pumping) produced by all the generator units concerned (primary heat engine and one or more mechanically coupled electricity generator), as measured at the output terminals of the main generators. Kilowatt (kW) ...... A unit of electric power equal to 1,000 watts.

Kilowatt-hour (kWh) ...... A unit of measure that represents 1,000 watts of electricity supplied or demanded in an hour. Line (distribution network component) ...... The main element of an electric network made of wires for the transportation of electric energy. It can be aerial (normally with naked wires, but at times insulated) or underground (cable). It can be made of one or more “triads” of wires, i.e., one or more electrical lines transporting electric energy with three different wires or wiring harnesses, one for each phase. Megawatt (MW) ...... Unit of electric power equal to a million watts.

Megawatt-hour (MWh) ...... A standard unit of electricity or consumption indicating the number of units of one million watts supplied or required in one hour. Natural gas ...... Gas mainly composed of methane (from 88% to 98%), with the remainder accounted for by other hydrocarbons, such as ethane, propane, butane, etc. Net efficient capacity (in MW) ...... The maximum amount of electrical power that can be continuously produced over a sufficiently long given period of operation, assuming that all the parts of the plant are functioning, as measured at the input point of delivery to the grid; i.e., net of the power used by the plant itself and the power lost in the transformers required to raise the voltage to the grid level. Net electricity production ... Gross electricity production net of the electricity used by auxiliary generation services and losses in main transformers. Non-Eligible Client ...... A Non-Eligible Client, under Article 2 of the Bersani Decree, was a natural person or the corporate body entitled to contract supply agreements exclusively with the distributor operating in the territorial area where the client was located. All previously Non-Eligible Clients have now become Eligible Clients. Market operator ...... The market is run on an electronic platform and participants include producers, wholesalers, the Single Buyer and some end-users. Demand and supply establish a market price for electricity on the market. Power Exchange ...... The electricity market organized and operated by the ESO through an electronic platform. Participants include generation companies, wholesalers, the Single Buyer and certain end-users. The market equilibrium price is obtained through the matching of the electricity demand and electricity supply from the participants. Renewable resources (or Sun, wind, water and geothermic resources, tides, wave power, biomasses and organic waste. A-2 renewables) ......

Residential client (or Those who consume energy for home use, as defined by Article 2.2, letter A of the residential customer) ...... Integrated Transport Regulations (Testo Integrato del Trasporto) published by the Authority. Single Buyer ...... Acquirente Unico SpA, a company established by the ESO pursuant to Article 4, paragraph 1 of the Bersani Decree. It is charged with ensuring the availability of sufficient electricity to meet the demand of all customers in the “enhanced production” market by purchasing the necessary power and selling it to distributors on non-discriminatory terms that enable the application of a single national rate for customers. For this purpose, the Single Buyer can purchase electricity on the Power Exchange or through bilateral contracts. Station ...... An electricity transformation or switching facility.

Terawatt (TW) ...... Unit of measure equal to one billion kW.

Terawatt-hour (TWh) ...... One billion kWh.

Transmission ...... The transport and transformation of electricity from generation plants or imported power over the interconnected high- and very-high-voltage grid to end-users connected to that grid and to distributors. Universal Service and Last- Resort Service markets ...... As part of the energy market liberalization process, Decree No. 73 of June 18, 2007 mandated: 1. Electrical supply pursuant to contractual and economic conditions established by the Authority reserved for residential and small business clients receiving low-tension supply who are not free clients or have been left without a supplier (Universal Service). Clients must not be free market clients. Conditions are updated every three months by the Authority. 2. An electrical supply Last-Resort Service that guarantees the continuity of supply to medium- and large-sized clients (low-tension clients with at least 50 employees or annual turnover of at least €10 million) (the Last-Resort Service). The economic conditions for the service are the result of a tender process carried out every two years, during the period immediately preceding the biennial Last-Resort Service period. Prices are indexed to those on the Power Exchange and change each month in accordance therewith.

A-3

ANNEX B: ACUPAY ITALIAN TAX COMPLIANCE AND RELIEF PROCEDURES

Capitalized terms used in these Tax Certification Procedures but not defined herein shall have the meaning specified in the Deposit Agreement, the Trust Indenture or the Offering Circular.

ARTICLE I. TAX CERTIFICATION PROCEDURES

A. Eligible Beneficial Owner Certification and Maintenance of DTC Participant Submissions (1) On or prior to 8:00 p.m. New York City time, on the settlement date of (x) its first purchase (“First Purchase”) of interests in X Receipts (at the time of the first delivery of the ownership interests), or the purchase of interests in X Receipts on the secondary market if subsequently transferred after the first delivery of the interests (“Secondary Purchase”), each Beneficial Owner who may be eligible to receive interest on Securities and Receipts without deduction of Italian Substitute Tax (each an “Eligible Beneficial Owner”) (or any party properly authorized by such Eligible Beneficial Owner to make such representation on its behalf) must, in order to obtain exemption from the deduction of Italian Substitute Tax, and to avoid having its beneficial interests in X Receipts exchanged into beneficial interests in N Receipts and thereby becoming subject to transfer restrictions related to the N Receipts: (a) prepare a Self-Certification Form (substantially in the form of Exhibit II). The Self-Certification Form is valid until withdrawn or revoked. The Self-Certification Form must be prepared online through the facilities of Acupay (the “Acupay System”) (www.acupaysystem.com) and must contain an official Acupay bar code. Once prepared via the Acupay System, the Self-Certification Form should be printed, reviewed and (if accurate and correct) signed by the Eligible Beneficial Owner, or its authorized representative expressly on behalf of the Eligible Beneficial Owner. Instructions for the preparation of the Self-Certification Form are available on the Acupay System. Additional assistance is available free of charge from the Acupay team, which can be contacted via email or telephone at the contact details provided in Exhibit IV; and (b) transmit via fax or PDF email (to the email address or fax numbers indicated on the Acupay System) the completed and signed Self-Certification Form through the Acupay System to the Beneficial Owner’s financial intermediary or DTC Participant. Such entity shall confirm the information contained in the form and transmit the confirmed form to Acupay for receipt no later than 8:00 p.m. New York City time on the settlement date of the Eligible Beneficial Owner’s First Purchase or Secondary Purchase of the interests in X Receipts, as applicable. Electronic copies of all Self-Certification Forms will be retained by Acupay for a period of time that is not less than ten years following the last day of the calendar year in which the underlying Security remains unpaid and outstanding; and (c) send via post or courier to Acupay the original, signed Self-Certification Form that was faxed or emailed. The original paper, signed Self-Certification Form must be received by Acupay by no later than 5:00 p.m. London time on the 10th calendar day of the month following the settlement date of the Eligible Beneficial Owner’s First Purchase or Secondary Purchase of interests in X Receipts, as applicable (or if such day is not a London business day, the first London business day immediately preceding such day) at the following address: Acupay System LLC Certifications Attn: Elettra Volta 28 Throgmorton St — First Floor London EC2N 2AN United Kingdom

The Self-Certification Form will remain valid indefinitely for all Receipts and Securities that the Eligible Beneficial Owner has an interest in from time to time. However, Eligible Beneficial Owners are required to promptly update their certification should any material information which may impact their eligible status change, as explained below.

B-1

(2) Each DTC Participant through which an interest in the X Receipt is held must transmit, through the Acupay System, reports (or confirmations of reports submitted by Financial Intermediaries that are downstream correspondents of such DTC Participant) of all changes in holdings with respect to the interests in X Receipts held by or through such DTC Participants. Such reports must be transmitted via the Acupay System no later than 9:45 a.m. New York City time, on the first New York City Business Day following each related settlement date. Transmissions must be undertaken in accordance with Acupay’s instructions which are available online on the Acupay System. Beneficial Owner Information (as defined below) received by Acupay will be reconciled against the related Self- Certification Forms.

B. Special Procedure for DTC Participants or Financial Intermediaries that are Italian second level banks or employ an Italian Tax Representative (“Second-level Banks”) (1) DTC Participants or other Financial Intermediaries which are Second-level Banks can elect to be treated as such with respect to the interests in X Receipts or X Securities which they hold directly or indirectly in DTC or Monte Titoli accounts by providing to Monte Titoli via Acupay, on a one-time basis, a properly executed letter for financial institutions which are Second-level Banks (see “Application Form for Use by Financial Institutions which Request Recognition to Act as Second-Level Banks with Respect to the Securities” in Exhibit III herein). (2) Entities for which such forms are properly on file will be solely responsible for complying with all tax exemption applications and reporting requirements imposed by the relevant tax rules on Italian Second-level Banks with respect to all interests in X Receipts or X Securities held by or through such entities, including with respect to X Receipts as reported daily by (a) DTC to Acupay with respect to direct holdings by DTC Participants, or (b) the relevant DTC Participant, with respect to holdings by Financial Intermediaries that are downstream correspondents of such DTC Participants.

C. Special Procedure for Beneficial Owners Not Eligible for Exemption from Italian Substitute Tax — GENERAL (1) Interests in X Receipts held by Beneficial Owners (a) who are not Eligible Beneficial Owners, or (b) who fail to timely submit valid Self-Certification Forms, or (c) whose applicable DTC Participant or Financial Intermediary has failed to supply accurate and timely trade settlement information regarding a Beneficial Owner’s trade settlements (synchronized to DTC’s reporting of settlement activity), or (d) who are impacted by any failure of, or non- compliance with, these Tax Certification Procedures, (“Non-Eligible Beneficial Owners”) will be subject to a mandatory exchange of interests in X Receipts to interests in N Receipts. (2) Interest accrued or paid in respect of N Receipts will be subject to the payment of Italian Substitute Tax, currently at a rate of 20.0%. The substitute tax will be levied on interest paid and/or accruing during the period commencing on the settlement date of the acquisition of the interests in the related X Receipts, and continuing until the sooner to occur of (a) the settlement date of the transfer of the interests in the related N Receipts (identified as to lot, in accordance with a principle of “last-in/first-out”) and (b) the redemption of the underlying Securities, net of any available Tax Credits, as applicable, as per paragraph D.(4) below. (3) In addition, in the event that (a) the Italian tax authorities should issue (i) a demand for the payment of Italian Substitute Tax with respect to tax benefits improperly obtained by a Beneficial Owner during a prior payment period, or (ii) a penalty or interest associated with a failure by a DTC Participant, or any of its Beneficial Owners, to fully, accurately and timely comply with these tax certification procedures (the “Tax Certification Procedures”) (any such amounts described in clause (a)(i) or (a)(ii), a “Tax Liability Amount”), or (b) Monte Titoli or Acupay determine, in either of their sole discretion, that substitute tax, penalties and interest would be payable to spontaneously cure any such tax benefit improperly obtained (under the so called ravvedimento operoso), then a claim for the recovery of such amount (a “Tax Liability Amount Payment Request”), specifying (i) the amount and (ii) the date and time prior to which such amount must be received by Monte Titoli, shall be submitted to the DTC Participant by the Receipt Issuer following written instructions received from Monte Titoli. In case the DTC Participant fails to comply with such Tax Liability Amount Payment Request, Monte Titoli, or at the option of Monte Titoli, the Receipt Issuer upon its receipt of written instructions from Monte Titoli, shall submit to DTC a claim for immediate payment of such amount, with a request that such amount be debited by DTC from the relevant participant’s DTC account, in accordance with the published rules and procedures of DTC’s EDS/TaxRelief (as defined below). (4) Italian Substitute Tax, and any applicable penalties, interest or past due tax amounts will be transmitted by Monte Titoli to the Italian tax authorities as required by applicable law.

D. Special Procedure for Beneficial Owners Not Eligible for Exemption from Italian Substitute Tax — MANDATORY EXCHANGE TO INTERESTS IN N RECEIPTS B-2

(1) Promptly upon Acupay determining that a Beneficial Owner holding interests in X Receipts through a DTC Participant may be a Non-Eligible Beneficial Owner, Acupay will notify the Receipt Issuer, and the Receipt Issuer as applicable, will: (a) on the same day if Acupay’s notification is delivered prior to 9:00 a.m. New York City time, or (b) no later than the next Business Day if Acupay’s notification is delivered after 9:00 a.m. New York City time, send (i) a Warning Notice of Mandatory Exchange to the relevant DTC Participant, and (ii) copies of such Warning Notice of Mandatory Exchange (as transmitted to the relevant DTC Participant) to Acupay, Monte Titoli, the Trustee, any Paying Agent and the Issuer. Acupay’s notification in advance of the giving of such notice will include a form of such Warning Notice of Mandatory Exchange which shall include (a) the DTC Participant’s name, (b) the DTC Participant’s account number, (c) the CUSIP of the Receipts, (d) the amount of interests in X Receipts which are to be the subject of the warning and (e) an exhibit laying out the defect, identified by Acupay, which caused the giving of such notice. (2) Promptly upon written notice from Acupay, to be delivered via secure electronic transmission prior to 9:00 a.m. New York City time, on or before the third New York City Business Day following the date of a Warning Notice of Mandatory Exchange (the “Mandatory Exchange Date”), that a Beneficial Owner is a Non-Eligible Beneficial Owner, the Receipt Issuer will deliver (a) to the relevant DTC Participant a Mandatory Exchange Notice, and (b) to Acupay, Monte Titoli, the Trustee, any Paying Agent and the Issuer, copies of such Mandatory Exchange Notice, as transmitted to such DTC Participant. Such Mandatory Exchange Notice shall direct the relevant DTC Participant to effect, by no later than 11:30 a.m. New York City time on the next New York City Business Day or, if such day is one of the New York City Business Days between an interest payment record date and the related interest payment date, then on the interest payment date (the “Mandatory Exchange Deadline”), a DTC transaction titled a Deposit/Withdrawal at Custodian (each such event, a “DWAC”), exchanging the principal amount of its interests in X Receipts referenced in the Mandatory Exchange Notice for interests in N Receipts through the facilities of DTC. The Mandatory Exchange Notice shall include a tax statement computing the relevant Tax Liability Amount accrued by the Non-Eligible Beneficial Owner of such interests from the date of acquisition until the Mandatory Exchange Deadline, and entered in the books of Monte Titoli.

Acupay’s notification to the Receipt Issuer shall include a form of such Mandatory Exchange Notice, which shall include (a) the DTC Participant’s name, (b) the DTC Participant’s account number, (c) the CUSIP of the Receipts, (d) the amount of interests in X Receipts which are to be the subject of the notice, and (e) an exhibit laying out the defect, identified by Acupay, which caused the giving of such notice and (f) a payment request in connection with the tax statement. (3) Upon the completion of the required DWACs (such completion, a “Mandatory Exchange”), the Receipt Issuer shall provide a confirmation of the Mandatory Exchange to Acupay, the Trustee, any Paying Agent, the Issuer and Monte Titoli. (4) Promptly after the completion of the Mandatory Exchange, Acupay will provide to the DTC Participant holding the newly deposited interests in N Receipts: (a) a tax statement itemizing the tax credit, if any, entered in the books of Monte Titoli for the Receipt Issuer for the benefit of the relevant holder of such interests in N Receipts computed in accordance with Italian Legislative Decree 239 of 1996, as amended and supplemented (the “Tax Credit”), and (b) a related request for wire transfer instructions. Such Tax Credit shall be held for the benefit of the applicable DTC Participant (for the ultimate benefit of the relevant Non-Eligible Beneficial Owner) to be employed upon such transfer of a Non-Eligible Beneficial Owner’s beneficial interests in an N Receipt or upon next succeeding Interest Payment Date as follows: (a) as an offsetting credit against the total amount of Italian Substitute Tax which may become payable upon a transfer of a Non-Eligible Beneficial Owner’s beneficial interests in an N Receipt; and/or (b) on the next succeeding Interest Payment Date, to be paid by wire transfer to the relevant DTC Participant, but only upon the prior payment by the Issuer of the related Security coupon, and after the transmission by Monte Titoli to the Receipt Issuer of the appropriate amount of cash, net of all tax liabilities, interest, or penalties maintained in the records of Monte Titoli pursuant to C(3), above, with respect to the applicable Non-Eligible Beneficial Owner as of the close of business on the first calendar day prior to the Interest Payment Date, as reported by Acupay to the Receipt Issuer in the Final Determination Report (as defined below). Upon its receipt of the net cash payment of such Tax Credit amount from Monte Titoli, the Receipt Issuer shall remit such amount by wire transfer to the applicable DTC Participant acting on behalf of the Non-Eligible Beneficial Owner(s), using the wire transfer instructions provided to it by Acupay in the Final Determination Report.

B-3

(c) Each Mandatory Exchange of interests in X Receipts to interests in N Receipts will be deemed to occur with the consent of the related Beneficial Owner and its DTC Participant. (d) Interests in N Receipts may only be transferred upon the terms and in accordance with the procedures as described below and pursuant to the terms of the Deposit Agreement. (e) In accordance with paragraph H, if a DWAC request from a DTC Participant to reduce such DTC Participant’s position in the relevant principal amount of X Receipts has not been received by the Receipt Issuer through the facilities of DTC by the Mandatory Exchange Deadline, then the Receipt Issuer shall promptly send to such DTC Participant (with a copy to Acupay, the Trustee, any Paying Agent, Monte Titoli and the Issuer) a Notice of Failure to Complete a Mandatory Exchange.

E. Special Procedure for Transfers of Interests in N Receipts. (1) Interests in N Receipts are transferable by the Non-Eligible Beneficial Owners thereof on any New York Business Day upon satisfaction of the following conditions: (a) delivery to Acupay, prior to 12:00 p.m. New York City time on the third New York City Business Day prior to the requested transfer date (the “Transfer Date”) of a properly completed N Receipt Transfer Request. In the case of a transfer to interests in X Receipts for the benefit of an Eligible Beneficial Owner, a properly completed Self-Certification Form with respect to the transferee should be on file with the Acupay system or should be provided by the applicable DTC participant on behalf of the transferee Eligible Beneficial Owner; (b) payment to Monte Titoli of the Italian Substitute Tax payable by the transferor Non-Eligible Beneficial Owner upon such transfer prior to 9:00 a.m. New York City time on the Transfer Date (in accordance with the terms described below); (c) in the case of transfer to interests in the X Security, receipt by the Receipt Issuer via the facilities of Acupay, no later than close of business of the New York Business Day preceding the Transfer Date, of valid delivery instructions and any required confirmation of compliance with the relevant securities laws; (d) receipt by the Receipt Issuer, no later than 9:30 a.m. New York City time on the Transfer Date, of written instructions from Acupay; and (e) N Receipts shall not be transferable into X Securities or X Receipts during the period between an interest payment record date and the related interest payment date. In any such case, the Transfer Date shall be the applicable interest payment date. (2) Upon receipt of an N Receipt Transfer Request, Acupay shall: (a) determine the net amount of Italian Substitute Tax payable in cash by the transferor Non-Eligible Beneficial Owner as of the Transfer Date, after application of any available Tax Credits maintained on the books of Monte Titoli for the Receipt Issuer for the benefit of the transferor Non-Eligible Beneficial Owner, and inform the Receipt Issuer, Monte Titoli and the transferee of such amount; and (b) in case of a transfer to interests in Receipts for the benefit of a Non-Eligible Beneficial Owner, calculate the amount of the Tax Credit attributable to Italian Substitute Tax to be credited to the Receipt Issuer for the benefit of the transferee as of the Transfer Date and to be employed only as described in these Tax Certification Procedures, and inform the Receipt Issuer, Monte Titoli and the transferee of such amount. (3) No settlement of transfers of interests in N Receipts will be effectuated on any day other than the Transfer Date specified to Acupay in an N Receipt Transfer Request. (4) Upon confirmation of the receipt by Monte Titoli of the Italian Substitute Tax payable as described in paragraph E.(2)(a) above, Acupay and the Receipt Issuer shall coordinate with the DTC Participant holding the interests in N Receipts on behalf of the transferor Non-Eligible Beneficial Owner, the execution of a series of DWACs and related operations resulting in: (a) the reduction of the position in N Receipts of the DTC Participant acting on behalf of the transferor; (b) in the case of transfer to interests in N Receipts, the increase of the position in N Receipts of the DTC Participant acting on behalf of the transferee;

(c) in the case of transfer to interests in X Receipts, the mark-down of the N Global Receipt and of the N Security, the mark-up of the X Global Receipt and of the X Security, and the increase of the position in X Receipts of the DTC Participant acting on behalf of the transferee;

B-4

(d) in the case of transfer to interests in the X Security, the mark-down of the N Global Receipt and the N Security, the mark-up of the X Security and the delivery by the Receipt Issuer of the respective interests in the X Security in accord with the provided delivery instructions. (5) In the case of a transfer to interests in N Receipts, Acupay, promptly after the completion of the transfer, will provide to the DTC Participant holding the transferred interests in N Receipts a confirmation of the Tax Credit, if any, entered in the books of Monte Titoli for the Receipt Issuer for the benefit of the relevant transferee, and computed in accordance with Italian Legislative Decree 239 of 1996, as amended and supplemented. Such credit entitlement will be held by Monte Titoli for the Receipt Issuer for the benefit of the applicable Non-Eligible Beneficial Owner to be employed as described in paragraph D.(4). F. Special Procedure for Transfers of Interests in X Receipt to X Securities. (1) Interests in X Receipts can be transferred to interests in the X Security at any time (except for the period between the interest payment record date and the related interest payment date) upon the delivery no later than 5:00 p.m. on the New York Business Day before the applicable Transfer Date (i) to Acupay of an X Receipt Transfer Request that contains delivery instructions at the transferee’s clearing system and any required confirmation of compliance with the relevant securities laws. Prior to 10:00 a.m. New York City time on the applicable Transfer Date, the Receipt Depositary Participant shall deliver to the DTC account of the Receipt Issuer the X Receipts being transferred. (2) Promptly upon receipt of (i) confirmation from Acupay of receipt of the documentation contemplated above from the transferor, and (ii) the X Receipts in its DTC account, the Receipt Issuer will mark down the X Global Receipt, deliver the respective interests in the X Security in accordance with the provided delivery instructions and confirm to Acupay the completion of such transfer. G. Special Procedure for Transfers of Interests in the X Security to Interests in Receipts. (1) Interests in the X Security can be transferred to interests in Receipts at any time upon satisfaction of the following conditions: (a) the delivery, no later than 6:00 p.m. Milan time on the Business Day preceding the Transfer Date, to Acupay of an X Security Transfer Request including instructions that contain Receipt delivery instructions at DTC and any required confirmations of compliance with relevant securities laws; (b) the transfer of the X Securities to the Monte Titoli account of the Receipt Issuer by 12:00 p.m. Milan time on the Transfer Date; (c) in the case of transfer to an Eligible Beneficial Owner, the delivery to Acupay, prior to 8:00 p.m. New York time on the Transfer Date, of a properly completed Self-Certification Form with respect to the transferee; and (d) X Securities shall not be transferable into Receipts during the period between an interest payment record date and the related interest payment date. In any such case, the Transfer Date shall be the applicable interest payment date. (2) Promptly upon receipt of the interests in the X Security in its Monte Titoli account, any required securities law confirmations and a written confirmation from Acupay with respect to whether the transferee is an Eligible Beneficial Owner, the Receipt Issuer will: (a) in the case of transfer to an Eligible Beneficial Owner, mark up the X Global Receipt and deliver the respective interests in X Receipts in accord with the provided delivery instructions;

(b) in the case of transfer to a Non-Eligible Beneficial Owner, mark down the X Security, mark up the N Security, mark up the N Global Receipt and coordinate with Acupay and the DTC Participant acting on behalf of the transferee the execution of a DWAC resulting in increase of such DTC Participant’s position in N Receipts in accordance with the provided delivery instructions; and (c) confirm to Acupay the completion of such transfer. (3) In the case of transfer to a Non-Eligible Beneficial Owner, Acupay, promptly after the completion of the transfer, will provide to the DTC Participant holding the transferred interests in N Receipts a confirmation of the Tax Credit, if any, entered in the books of Monte Titoli for the Receipt Issuer for the benefit of the relevant transferee as of the settlement date of the transfer, and computed in accordance with Italian Legislative Decree 239 of 1996, as amended and supplemented. Such credit entitlement will be held by Monte Titoli for the Receipt Issuer for the benefit of the applicable Non-Eligible Beneficial Owner to be employed as described in paragraph D.(4). H. Non-Compliance Consequences for DTC Participants.

B-5

A DTC Participant that is the subject of a Mandatory Exchange Notice as provided herein, and which received from Monte Titoli or the Receipt Issuer, as applicable, a Notice of Failure to Complete a Mandatory Exchange, and/or obtains favorable tax treatment through these Tax Certification Procedures and fails to submit the original paper signed Self-Certification Forms as described above, may be removed from these Tax Certification Procedures and prohibited from obtaining favorable tax treatment with respect to current and future interest payments on all interests in X Receipts held through such DTC Participant. In such event, the DTC Participant would receive the interest payment on its entire position in interests in X Receipts (as held for its Beneficial Owners) net of the applicable Italian Substitute Tax (currently 20.0%) and relief would need to be obtained directly from the Italian tax authorities by following the direct refund procedure established by Italian tax law. See Article III for the description of such refund procedures. I. Income Processing for DTC Participants (1) At least 20 New York City Business Days prior to each Interest Payment Date, the Receipt Issuer will provide an issuer announcement to Acupay regarding the relevant interest payment and tax compliance procedures relating to the forthcoming payment on the Securities. Acupay, upon receipt of each such announcement shall promptly: (a) provide DTC with a copy of such announcement which will form the basis of a DTC important notice (an “Important Notice”) regarding the relevant interest payment and tax relief entitlement information for the underlying Securities and the Receipts, and (b) request DTC to distribute such Important Notice to its participants as a means of notifying them of the requirements described in these Tax Certification Procedures. (2) Beginning on the first New York City Business Day following each related Record Date and continuing until 8:00 p.m. New York City time on the New York City Business Day immediately preceding each Interest Payment Date, each DTC Participant must make an election (an “EDS/TaxRelief Election”) via the DTC TaxRelief Service (“EDS/TaxRelief”) representing the portion of X Receipts held in its DTC account for which: (a) Eligible Beneficial Owners have been properly self-certified and reported via the Acupay System, in accord with these Tax Certification Procedures, and/or (b) the procedures laid out in paragraph B herein have been properly followed.

(3) Each DTC Participant must ensure the continuing accuracy of the settlement and position reports and other information submitted via the Acupay System regarding Eligible Beneficial Owners, and position reports submitted for Financial Intermediaries that are downstream correspondents in relation to the procedures laid out in paragraph B (collectively, all such information is referenced herein as “Beneficial Owner Information”) including the reconciliation of such information with EDS/TaxRelief Elections, notwithstanding any position changes or settlements occurring within such DTC Participant’s position in the X Receipts through 8:00 p.m. New York City time on the New York Business Day immediately preceding each Interest Payment Date, by making any necessary adjustments through the Acupay System and EDS/TaxRelief. J. Acupay Verification Procedures. (1) In addition to its other duties and obligations set forth herein, Acupay will be responsible for the following tasks (collectively, the “Acupay Verification Procedures”): (a) collecting, maintaining and reconciling daily data with respect to the aggregate Security positions reflected as being outstanding as shown in the records of the securities registrar; (b) collecting, maintaining and reconciling daily data with respect to the aggregate Security positions held at, and settlements occurring through, Monte Titoli in aggregate; (c) collecting, maintaining and reconciling daily data with respect to the aggregate Security or Receipt positions held at the Receipt Issuer and DTC; (d) collecting, maintaining and reconciling daily data with respect to the aggregate Receipt positions, held by each relevant DTC Participant and identified Financial Intermediaries that are downstream correspondents of such DTC Participants, and Italian second level banks, in receipt form; (e) comparing and reconciling the Beneficial Owner Information and related Self-Certification Forms provided in respect of each DTC Participant’s X Receipt position with the EDS/TaxRelief Elections provided by that DTC Participant in order to determine whether any discrepancies exist between such information, the corresponding EDS/TaxRelief Elections and the DTC Participant’s position in the X Receipts held at DTC;

B-6

(f) collecting and collating all Self-Certification Forms and Application Forms for Use by Financial Institutions which are Registered with the Italian Tax Authorities as Second Level Banks and which Request Recognition to Act as Second Level Banks with Respect to the Securities; (g) reviewing the Beneficial Owner Information and the Self-Certification Forms using appropriate methodology in order to determine whether the requisite fields of information have been supplied and that such fields of information are responsive to the requirements of the Self-Certification Forms and these Tax Certification Procedures in order to receive interest payments without Italian Substitute Tax being assessed; (h) determining whether the relevant DTC Participant has failed to complete a Mandatory Exchange and has been the subject of a Notice of Failure to Complete a Mandatory Exchange; and (i) liaising with the DTC Participants in order to request that such DTC Participants: (i) complete any missing, or correct any erroneous, Beneficial Owner Information identified pursuant to the procedures set forth above, (ii) correct any erroneous EDS/TaxRelief Elections identified pursuant to the procedures set forth above,

(iii) revise any Self-Certification Forms identified pursuant to the procedures set forth above as containing incomplete or inaccurate information, and (iv) timely transmit to Monte Titoli Tax Liability Amounts in accordance with the Tax Liability Amount Payment Requests. (2) DTC Participants will be required to ensure that Beneficial Owner Information entered into the Acupay System and their EDS/TaxRelief Elections are updated to reflect any changes in holdings or in such DTC Participants’ positions in the X Receipts occurring until 8:00 p.m. New York City time, on the New York Business Day immediately preceding each Interest Payment Date. For this purpose, EDS/TaxRelief will remain accessible to DTC Participants until 8:00 p.m. New York City time, on the New York Business Day immediately preceding each Interest Payment Date. In addition, Acupay will accept new or amended Beneficial Owner Information and Self-Certification Forms before 9:45 a.m. New York time and DTC will accept requests for changes to EDS/TaxRelief Elections at the request of DTC Participants until 9:45 a.m. New York City time, on each Interest Payment Date. Beginning at 7:45 a.m. New York City time, on the Interest Payment Date, Acupay will through the Acupay Verification Procedures (as defined above) perform the final review of each DTC Participant’s Beneficial Owner Information, EDS/TaxRelief Elections and Self-Certification Forms. Based on these Acupay Verification Procedures, Acupay will (a) seek to notify any affected DTC Participant until 9:45 a.m. New York City time, on such Interest Payment Date of any inconsistent, insufficient or inaccurate information provided by such DTC Participant and (b) use its commercially reasonable efforts to obtain revised Beneficial Owner Information, Self-Certification Forms and/or EDS/TaxRelief Elections from any such DTC Participant as necessary to correct any inconsistent or inaccurate information. The (a) failure to correct any such inconsistent, insufficient or inaccurate information (including the failure to fax or send PDF copies of new or amended Self-Certification Forms) or if Acupay, despite its commercially reasonable efforts to do so, does not confirm receipt of such correction by 9:45 a.m. New York City time, on the Interest Payment Date; or (b) receipt by Acupay, from the Receipt Issuer, of a Notice of Failure to Complete Mandatory Exchange (with respect to the relevant DTC Participant) by 9:45 a.m. New York City time, on the Interest Payment Date, will result in the payments in respect of the entirety of such DTC Participant’s position (in the X Receipts) for all Beneficial Owners being made net of Italian Substitute Tax. Upon receipt of a report of EDS/TaxRelief Elections as of 9:45 a.m. New York City time, on the Interest Payment Date from DTC, Acupay will then notify DTC of the final determination of which portion of each DTC Participant’s position in the X Receipts should be paid gross of Italian Substitute Tax and which portion of such position should be paid net of such tax. Based on such Acupay determination, DTC will make adjustments to EDS/TaxRelief in order to reduce to zero the EDS/TaxRelief Elections received by DTC from DTC Participants as of 9:45 a.m. New York City time, on the relevant Interest Payment Date, where as a result of (a) any inconsistencies or inaccuracies between such DTC Participant’s Beneficial Owner Information, EDS/TaxRelief Election and DTC position, and/or (b) the receipt by Acupay from the Receipt Issuer of a Notice of Failure to Complete Mandatory Exchange (with respect to the relevant DTC Participant) by 9:45 a.m. New York City time, on the Interest Payment Date, the entirety of such DTC Participant’s position in the X Receipts for all Beneficial Owners holding their X Receipts through such DTC Participant (a “Non-Compliant DTC Participant”) will be paid net of Italian Substitute Taxes. (3) DTC will transmit a final “Report to Paying Agent” to Acupay by 10:30 a.m. New York City time, on each Interest Payment Date setting forth each DTC Participant’s position in the X Receipts as of 8:00 p.m. New York time on the New York Business Day immediately preceding each Interest Payment Date and the portion of each such DTC Participant’s position in such Receipts on which interest payments should be made net of Italian Substitute Tax and the B-7

portion on which interest payments should be made without Italian Substitute Tax being assessed, as applicable, based on the status of the EDS/TaxRelief Elections received by DTC for each DTC Participant as of 9:45 a.m. New York City time on the Interest Payment Date, and reflecting the adjustments, if any, to be made by DTC to EDS/TaxRelief described above. (4) Acupay shall promptly, but no later than 11:00 a.m. New York City time, on each Interest Payment Date, release (through a secure data upload/download facility to the Issuer, Monte Titoli, the Paying Agent and the Receipt Issuer): (a) PDF copies of the final Report to Paying Agent and (b) a PDF copy of a report prepared by Acupay laying out (i) the amounts (net and gross of Italian Substitute Tax) to be paid by, or on behalf of, Monte Titoli to each of its participants including the Receipt Issuer with respect to the Securities on such Interest Payment Date, and (ii) reports of all Tax Credits and Tax Liability Amounts maintained on the books of Monte Titoli on behalf of the Receipt Issuer for the benefit of the relevant holders of the interests in the Receipts (the “Final Determination Report”).

B-8

ARTICLE II. PAYMENT PROCEDURES

(1) On or prior to 9:00 a.m. New York City time on each Interest Payment Date, the Issuer (either directly or through a designated agent) will transmit to Citibank, N.A., London Branch as Paying Agent, an amount of funds sufficient to make interest payments on the total outstanding principal amount of the Securities, without Italian Substitute Tax being assessed. Promptly upon receipt, Citibank, N.A., London Branch shall transfer to Monte Titoli the gross interest amounts indicated on the Final Determination Report corresponding to the Receipt Issuer’s holdings of the Securities at its third-party intermediary account in Monte Titoli. (2) By 6:30 p.m. Milan time, on each Interest Payment Date, Citibank, N.A., London Branch as Paying Agent, subject only to its timely receipt of good funds in the amount identified in paragraph (1), will arrange for the transmission to the accounts designated by Monte Titoli participants (other than the Receipt Issuer) the interest amounts with respect to the interests in the X Securities held by such participants, as computed by Acupay and referenced in the Final Determination Report. Such payments will be made net or gross in accordance with the requirements of Italian Legislative Decree 239 of 1996, as amended and supplemented. (See “Certain Tax Considerations — Italian Taxation”). (3) By 11:30 a.m. New York City time, on each Interest Payment Date, Monte Titoli, subject only to its prior receipt of good funds in the amount identified in paragraph (1), will transmit to the Receipt Issuer the following amounts with respect to the Receipt Issuer’s holdings of the Securities at its third-party intermediary account in Monte Titoli, as computed by Acupay and referenced in the Final Determination Report: (a) the gross interest amount with respect to the X Receipts held by DTC for the account of the DTC Participants which have satisfied these Tax Certification Procedures, as identified in the Report to Paying Agent; (b) the net interest amount with respect to the X Receipts held by DTC for the account of DTC Participants which have not satisfied these Tax Certification Procedures, as identified in the Report to Paying Agent, after deduction of Italian Substitute Tax (currently 20.0%) on all of such X Receipts with respect to the entire interest period; (c) the net interest amount with respect to the N Receipts after deduction of Italian Substitute Tax (currently 20.0%) on all of such N Receipts with respect to the entire interest period; and (d) cash equal to the aggregate amount of Tax Credit held on the books of Monte Titoli for the Receipt Issuer for the benefit of the holders of N Receipts, as computed by Acupay and referenced in the Final Determination Report. (4) Upon receipt from Monte Titoli of the amounts set forth in paragraph (3), the Receipt Issuer shall promptly remit by wire transfer the following amounts: (a) to DTC by 1:00 p.m. New York City time on the Interest Payment Date, for the benefit of the relevant DTC Participants and for the further benefit of the relevant Beneficial Owners, the amounts (if any) described in paragraphs (3)(a), (b) and (c), and (b) directly to the relevant DTC Participants for value on the Interest Payment Date, using the wire instructions for such DTC Participants provided by Acupay in the Final Determination Report, for the benefit of the relevant Non-Eligible Beneficial Owners, the amounts (if any) described in paragraph (3)(d).

(5) Monte Titoli has authorized the Receipt Issuer to rely on the final Report to Paying Agent and the Final Determination Report in order to make the specified payments on each Interest Payment Date. Notwithstanding anything herein to the contrary, Monte Titoli may direct the Receipt Issuer to make interest payments on the Receipts in a manner different from that set forth in such reports if Monte Titoli (a) determines that there are any inconsistencies with the Self-Certification Forms provided via the Acupay System or any information set forth therein is, to Monte Titoli’s knowledge, inaccurate, and (b) provides notice of such determination in writing to Acupay and the Receipt Issuer prior to 11:30 a.m. New York City time, on the relevant Interest Payment Date along with a list of the affected DTC Participants showing the amounts to be paid to each such DTC Participant.

B-9

ARTICLE III. PROCEDURE FOR DIRECT REFUND FROM ITALIAN TAX AUTHORITIES

(1) Beneficial Owners entitled to exemption from Italian Substitute Tax who have not (through their actions, or the actions of a First Level Bank, financial intermediary or a participant of a clearing system) timely followed the Tax Certification Procedures as described in Article I hereof, or comparable tax compliance procedures operated by a second level bank pursuant to Italian Legislative Decree 239 of 1996, as amended and supplemented, and therefore have been subject to the imposition and collection of Italian Substitute Tax, may request a full refund of the amount that has been collected directly from the Italian tax authorities. (2) Beneficial Owners have up to the time period allowed pursuant to Italian law (currently, a maximum of 48 months as of the relevant Interest Payment Date) to claim the amount withheld and paid to the Italian treasury by filing with the competent Italian tax authorities (a) the relevant Italian tax form, (b) proof of ownership and related withholding of Italian Substitute Tax and (c) a Government Tax Residency Certificate (from the IRS in the case of U.S. tax resident Beneficial Owners). The Direct Refund procedures may be subject to extensive delays and may trigger costs. Beneficial Owners should consult their tax advisers on the procedures required under Italian tax law to recoup the substitute tax in these circumstances. (3) Investors with questions about obtaining a direct refund may contact the Acupay team at the contact details contained in Exhibit IV of this Appendix.

B-10

EXHIBIT I Italian “White List” Countries Identified by Acupay as of September 1, 2013

In order to qualify as eligible to receive interest free from Italian Substitute Tax, among other things, Beneficial Owners must be resident, for tax purposes, in, or be “institutional investors” established in, a country which the Italian government identifies as allowing for a satisfactory exchange of information with Italy (the “White List States”). Subject to certain limited exceptions, such as for Central Banks and supranational bodies established in accordance with international agreements in force in Italy, this residency requirement applies to all ultimate holders of Securities, including ultimate beneficiaries of interest payments under the Securities holding via sub-accounts to which interests in the Securities may be allocated upon purchase or thereafter. As of September 1, 2013, the White List nations include the following states:

White List States

Albania Estonia Mauritius Sweden Algeria Finland Mexico Tanzania Argentina France Morocco Thailand Australia Germany Netherlands Trinidad and Tobago Austria Greece New Zealand Tunisia Bangladesh Hungary Norway Turkey Belarus Iceland Pakistan Ukraine Belgium India Philippines United Arab Emirates Brazil Indonesia Poland United Kingdom Bulgaria Ireland Portugal United States Canada Israel Romania Venezuela China Japan Russian Federation Vietnam Côte d’Ivoire Kazakhstan Singapore Yugoslavia(1) Croatia Kuwait Slovak Republic Zambia Cyprus Latvia Slovenia Czech Republic Lithuania South Africa Denmark Luxembourg South Korea Ecuador Macedonia Spain Egypt Malta Sri Lanka

List is as of September 1, 2013

Please check the Acupay website for updates to this list. The White List is subject to continuing changes in accordance with official actions by the government of Italy. Acupay has made arrangements to monitor these changes and will publish its findings on its website. Acupay currently expects to update this website monthly on the first calendar day of each month, to report changes to the White List which have come to the attention of Acupay through and including the 21st calendar day of the preceding month. In the event that the list appearing on the Acupay website is different from the official list maintained by the government of Italy, the government list will naturally govern. Updated list available at www.acupay.com/Enel

B-11

EXHIBIT II Form of Self-Certification Form

LIST A

Investors Date of Birth4 / City of Birth5 / Full Address9 Investor Country of Identification Type of / Postal Country12 / Code1 Name2 Birth6 Number7 ID No.8 Code10 / City11C ountry Code13

LIST B

Investors Managing Investor Company3 Identification Type of Full Address9 / Postal Country12 / Acupay Codes Code1 Name2 (if relevant) Number7 ID No.8 Code10 / City11 Country Code13 (see below)

Authorized Representative Name14 Date of Birth15 City of Birth16 Country of Birth17 Identification Number18 Type of ID No.19 Full Address20 Postal Code21 City22 Country23 / Country Code24

Declarations: I hereby declare that: 1. the persons listed in LIST A and in LIST B are not tax-resident in Italy; 2. the persons listed in LIST A are resident in the country indicated in field 12 for tax purposes and are the beneficial owners of the tax-exempt income; 3. the persons listed in LIST B are institutional investors, not subject to tax, established in the country indicated in field 12;

B-12

4. the information in this document is communicated to Monte Titoli via Acupay System LLC (“Acupay”), based on the understanding that it is true and will be kept confidential, and will be used solely for the purpose of withholding tax certification and may be shared with the relevant tax authorities as may be required under applicable law or regulation; 5. Acupay will be notified of any change affecting the accuracy of this certification and its impact on tax exemption.

Additional Declarations: (the Codes indicated for investors listed in List B above have the following meanings) A. The person is an institutional investor, not subject to tax, and it is subject to regulatory supervision in its jurisdiction of establishment. B. The person is an institutional investor, not subject to tax nor subject to regulatory supervision in its jurisdiction of establishment, that has been set up solely for the purpose of managing investments of institutional investors subject to regulatory supervision in their jurisdiction of establishment and established in countries allowing an adequate exchange of information with Italy. C. The person is an institutional investor, not subject to tax nor subject to regulatory supervision in its jurisdiction of establishment, and that:

i. Has specific competence in making and managing of investments in financial instruments; ii. Has not been established to manage investments made by a limited number of investors; and iii. Has not been established and is not maintained to allow investors resident of Italy or of countries not allowing an adequate exchange of information with Italy to benefit from the exemption regime.

X1______[Name, Position] [Date], with effect from the date of first deposit of the Italian securities. 25

B-13

KYC Confirmation by Custodian Bank, Intermediary or 1st Level Bank

B-14

Name of First Level Bank26 Domicile (address)27 City28 Indicative SWIFT Code for consistent identification purposes only29 Country30 Postal Code31

We, ( Participant Number ) hereby certify the following to Monte Titoli and to the Italian Tax Authorities :  We serve as a legally authorized nominee of, and representative for and on the behalf of the Beneficial Owners listed below pursuant to properly executed client agreements (hereinafter “Agreements”). Pursuant to such Agreements we are mandated to hold such Beneficial Owners’ securities, collect and receive their income and other rights (including tax refunds), apply to the foreign tax authorities to obtain tax refunds and sign all necessary documents relating thereto, credit such income to their accounts and to report to the relevant statutory agencies the income received by such Beneficial Owners, in accord with all relevant laws, regulations and business practices so as to comply with such laws and to avert the imposition of government penalties or excessive withholding.  If we are operating in the U.S. our client records are maintained in accord with the U.S. Patriot Act including, in the case of non-natural person clients, we maintain copies of our clients’ formative documents which we will make available upon authorized request.  We hereby certify that the Beneficial Owners listed below hold or may hold Italian securities in custody with the second level bank, paying interest which the final beneficiary receives and that all the declarations contained in the present form, made by the final beneficiary / his legal representative are true, according to the best of our knowledge.  We assume the responsibility to provide the second level bank with all the information, concerning all movements of the above mentioned securities, as required to verify that the final beneficiaries listed below are the true owners of the securities.  We assume the responsibility to provide the second level bank with a confirmation via the Acupay System, representing a bankers’ affidavit, for every additional intermediary present between the first level bank and the final beneficiary, and with any information required to avoid withholding tax, and in order to make every communication available to the Italian Tax Authorities.  The present form will be sent via the Acupay System to Monte Titoli in accordance with the deadlines established in the Acupay Italian Tax Certification Procedures, and in no event later than 15 days of its receipt, together with a confirmation via the Acupay System representing the bankers affidavit and required information as mentioned above.  For the Beneficial Owners indicated below, Italian Self-Certification Forms are either on file via Acupay or are included with this document .  Notwithstanding the above, if one or more of the Beneficial Owners listed below are identified as being a “Central Bank / National Treasury” or “Supranational Organization”, (i) no Italian Self-Certification Form is to be produced listing such Beneficial Owner and (ii) we affirm that each such Beneficial Owner is exempt from the imposition of Italian substitute tax, as provided under Legislative Decree No. 239 of 1 April 1996, as amended from time to time, on account of either its legal status or the existence of a specific Italian law ratifying an international agreement recognizing such entity as exempt from Italian Substitute Tax.

Name Country Identification Number

X2______[Name, Position] [Date], with effect from the date of first deposit of the Italian securities. 32

B-15

B-16

EXHIBIT III

Application Form for Use by Financial Institutions For use by financial institutions which are Second-level Banks

To: Monte Titoli S.p.A. c/o Acupay System LLC 28 Throgmorton Street London EC2N 2AN United Kingdom

From: Name of financial entity: ______

Address of the Entity: ______

Registration number, Tax ID No. or Fiscal Code of the entity: ______

Dear Sir/Madam, We, the above captioned entity may hold from time to time, directly or indirectly, at one or more clearing systems, through accounts maintained directly at such clearing system(s), or indirectly via accounts maintained at designated custodial intermediaries (the “Account(s)”), debt securities subject to Italian Substitute Tax, as provided under Legislative Decree No. 239 of 1 April 1996, as amended from time to time (the “Notes” or “Receipts”). The Notes or Receipts may be beneficially owned by us, or by third parties. We represent, warrant and covenant that this entity is a Second-level Bank as contemplated by Article 1,1b) of Decree No. 632 of 4 December 1996 or is a foreign participant of Monte Titoli which employs the services of an Italian Tax Representative as contemplated by LD 239 of 1996 (collectively, such status is referenced herein as functioning as a “Second-level Bank”). We hereby undertake to function as a Second-level Bank and to carry out all duties of a Second-level Bank, as provided under Legislative Decree No. 239 of 1 April 1996 and under all other relevant legal and administrative provisions, with respect to Notes or Receipts held in the Account(s). These duties include, but are not necessarily limited to:  the application of the substitute tax;  the payment of the positive balances of the tax account (the “conto unico”) to the appropriate Italian authorities;  the collection and conservation of all relevant documents;  the reporting of all relevant data in respect of exempt beneficial owners to the Italian Tax Authorities (SOGEI);  the filing of tax returns in respect of the substitute tax. With respect to Receipts held via our financial institution, we hereby undertake to notify Monte Titoli (via the Acupay System) promptly (i.e. no later than 9:45 AM New York City time, on the first New York City Business Day following each related Settlement Date) of the following information regarding the Receipts and the Account(s) at which such Receipts are held: o If we are a clearing system holding Receipts via DTC, we will confirm to Monte Titoli via the Acupay System the aggregate daily amount of the Receipts held for all of our participants and the custody location where we hold such Receipts. o If we are a financial institution other than a clearing system: . If the Account(s) is/are maintained directly by us at a clearing system, we will identify the relevant

B-17

account number(s) at such clearing system. . If the Account(s) is/are maintained indirectly at a clearing system through the facilities of a sub- custodian, we will identify the name(s) of such sub-custodian and the relevant Account number(s) at such sub-custodians. In addition, we will also arrange for the prompt confirmation of such Account information by each relevant sub-custodian, through the facilities of Acupay. . We will also report via the Acupay System, or will instruct each relevant sub-custodian to report via the Acupay System, the amount of Receipts acquired or disposed of through such Account(s), in each case referencing the relevant Custody location, Account number(s), ISIN codes and trade settlement dates with respect to each such acquisition or disposal. We also hereby undertake to promptly notify Monte Titoli, via the Acupay System of any or all information that would render any statement contained herein untrue. We hereby accept full responsibility in case of any claims, additional taxes, penalties or other charges and interest thereon levied by the Italian tax authorities in connection with the Notes. We hereby irrevocably authorize Acupay and Monte Titoli to provide this document, or a copy thereof, to the appropriate Italian authorities. This document and all the representations and undertakings included therein, shall be effective as from the date communicated to Monte Titoli and Acupay. Yours faithfully,

X (sign here):

Name of Authorized Signatory:

Title of Authorized Signatory:

Date signed:

B-18

EXHIBIT IV Contact Details for the Acupay Team

Beneficial Owners, their custodians, or DTC Participants with questions about the Tax Certification Procedures, may contact Acupay at one of the following locations. Please mention the ISIN for the Securities and/or CUSIP for the Receipts when contacting Acupay. There is no cost for this assistance. By post, telephone or email:

In London In New York Acupay System LLC Acupay System LLC Attention: Elettra Volta Attention: Isabella Galvani 28 Throgmorton Street 30 Broad Street London EC2N 2AN New York, New York 10004 UNITED KINGDOM USA Tel. + 44 (0)-207-382-0340 Tel. +1 212-422-1222 [email protected] [email protected]

B-19

THE ISSUER

ENEL — Società per Azioni Viale Regina Margherita 137 00198 Rome Italy

JOINT LEAD MANAGERS

Barclays Capital Inc. Citigroup Global Markets Inc. Credit Suisse Securities (USA) LLC 745 Seventh Avenue 388 Greenwich Street 11 Madison Avenue New York, NY 10019 New York, NY 10013 New York, NY 10010 USA USA USA Goldman, Sachs & Co. J.P. Morgan Securities LLC Merrill Lynch, Pierce, Fenner & Smith 200 West Street 383 Madison Avenue Incorporated New York, NY, 10282 New York, NY 10179 One Bryant Park USA USA New York, NY 10036 USA Mitsubishi UFJ Securities (USA), Inc. Mizuho Securities USA Inc. Morgan Stanley & Co. LLC 1633 Broadway, 29th Floor 320 Park Avenue, 12th Floor 1585 Broadway, 29th Floor New York, NY 10019 New York, NY 10022 New York, NY 10036 USA USA USA

CO-MANAGERS

Banca IMI S.p.A. BBVA Securities Inc. BNP Paribas Securities Corp. Largo Mattioli 3 1345 Avenue of the Americas 787 Seventh Avenue 20121 Milan 44th Floor New York, NY 10019 Italy New York, NY 10105 USA USA

Credit Agricole Securities (USA) Inc. Deutsche Bank Securities Inc. HSBC Securities (USA) Inc. 1301 Avenue of the Americas 60 Wall Street 452 Fifth Avenue New York, NY 10019 New York, NY 10005 New York, NY 10018 USA USA USA

ING Bank N.V. Mediobanca — Banca di Credito Natixis Foppingadreef 7 Finanziario S.p.A. 30 avenue Pierre Mendès-France 1102 BD Amsterdam Piazzetta Enrico Cuccia 1 75013 Paris The Netherlands 20121 Milan France Italy

Santander Investment Securities Inc. SG Americas Securities, LLC The Royal Bank of Scotland plc 45 East 53rd Street 245 Park Avenue 135 Bishopsgate New York, NY 10022 New York, NY 10167 London, EC2M 3UR USA USA United Kingdom

UBS Securities LLC UniCredit Bank AG 677 Washington Boulevard Arabellastrasse 12 Stamford, Connecticut 06901 81925 Munich USA Germany

TRUSTEE RECEIPT ISSUER

Citibank, N.A., London Branch Citibank, N.A., London Branch Citigroup Centre Citigroup Centre Canada Square Canada Square London, E14 5LB London, E14 5LB United Kingdom United Kingdom

LEGAL ADVISERS

To ENEL – Società per Azioni as to United To ENEL – Società per Azioni as to Italian To ENEL – Società per Azioni as to Italian States law law tax law

Proskauer Rose LLP Chiomenti Studio Legale Gianni, Origoni, Grippo, Capelli & Eleven Times Square Via XXIV Maggio 43 Partners New York, NY, 10036 I-00187 Rome Via delle Quattro Fontane, 20 USA Italy 00184 Rome Italy

To the Managers as to United States law and Italian law To the Managers as to Italian tax law

Linklaters Studio Legal Associato Linklaters LLP Clifford Chance Via Broletto, 9 One Silk Street Piazzetta Maurilio Bossi 3 20121 Milan London, EC2Y 8HQ 20121 Milan Italy United Kingdom Italy

AUDITORS

Reconta Ernst & Young S.p.A. Via Po 32 00198 Rome Italy

PREVIOUS AUDITORS Auditors to the Issuer until the approval of the financial statements as of and for the year ended December 31, 2010

KPMG S.p.A. Via Ettore Petrolini 2 00197 Rome Italy

TAX COMPLIANCE AGENTS Monte Titoli S.p.A. Acupay System LLC

Piazza degli Affari 6 30 Broad Street, 46th Floor 28 Throgmorton Street 20123 Milan New York, NY 10004 London EC2N 2AN Italy USA United Kingdom

Printed by RR Donnelley, 545147