3rd Quarter Results

RESULTS

JANUARY-SEPTEMBER 2008

Madrid, 05 November 2008

CONTENTS

Consolidated results

Results by business line

Business in Spain and Portugal

Business in Latin America

Statistical appendix

CONSOLIDATED RESULTS

Net income: Euro 6,801 million

ENDESA reported net income of Euro 6,801 million in the first nine months of 2008, an increase of Euro 4,823 million compared to the same period of 2007. This figure includes income from discontinued operations (i.e. capital gains from the sale of the Company’s entire shareholding in Endesa Europe and Los Barrios and Tarragona thermal plants in Spain to E.ON and income generated by these assets during the period of the year in which they were owned by ENDESA.

Stripping out discontinued operations, income from continuing operations attributable to ENDESA shareholders was Euro 2,014 million, an increase of 20.5% over January-September 2007.

The table below shows a breakdown of income from continuing operations attributable to ENDESA shareholders by business unit.

NET INCOME FROM CONTINUING ACTIVITIES ATTRIBUTABLE TO ENDESA SHAREHOLDERS
		Euro million		% chg. vs. Jan-Sept 2007		% contribution to total net income from continuing operations
Spain and Portugal		1,675		22.4		83.2
Latin America		339		12.3		16.8
Rest		-		N/A		-
TOTAL		2,014		20.5		100

Generation and electricity sales

ENDESA generated 112,359 GWh of power in January-September 2008, excluding power produced by plants sold to E.ON, a drop of 0.2% from the same period in 2007.

Electricity sales, excluding power sold by companies and assets sold to E.ON, amounted to 130,779 GWh, a decline of 0.8%.

ELECTRICITY OUTPUT AND SALES IN 9M08
		Output				Sales
		GWh		% chg. vs. Jan-Sept 2007		GWh		% chg. vs. Jan-Sept 2007
Spain and Portugal		66,442		(0.6)		83,217		(2.3)
Latin America		45,223		0.3		46,868		2.0
Rest		694		2.5		694		2.5
TOTAL		112,359		(0.2)		130,779		(0.8)

Higher revenues (+31.5%) and EBIT (+20.9%), despite rising generation costs

Generation costs rose sharply in the first nine months of 2008, mainly due to an increase in fuel prices which in turn caused sale prices to rise in both the Spanish wholesale market and in Latin America. In Spain, the price increase was also affected by higher CO₂ emission rights costs.

As a result, ENDESA posted revenue growth of 31.5% in 9M08 vs. 9M07, while variable costs grew by 56%, producing a 10.3% increase in gross profit.

Fixed costs rose only 2.7% in January-September 2008, putting EBITDA at Euro 5,436 million, up 14% vs. 9M07.

EBIT rose to Euro 4,201 million (+20.9%), as a result of higher EBITDA and a 4.6% drop in the depreciation and amortisation charge. This decrease was due to a Euro 81 million provision included in the 9M07 charge, recognised to restate CO₂ emission rights acquired by the Group from third parties to cover its emissions deficit to fair value, and a Euro 50 million provision for the amortisation of renewable energy assets, which are not amortised this year as they are classified as held for sale.

		Revenues				EBITDA				EBIT
		Euro million		% chg. vs. 9M07		Euro million		% chg. vs. 9M07		Euro million		% chg. vs. 9M07
Spain and Portugal		10,214		35.3		3,268		10.5		2,466		19.0
Latin America		6,225		15.8		2,160		21.0		1,731		25.9
Rest		1,021		194.2		8		(70.4)		4		(85.2)
TOTAL		17,460		31.5		5,436		14.0		4,201		20.9

Net finance expense

ENDESA reported a net finance expense of Euro 752 million in 9M08, 12.1% more than in 9M07.

When comparing net finance expense year-on-year, it is important to remember that the increase in interest rates in 9M07 triggered a Euro 83 million gain in this heading due to a reduction in the present value of provisions recognised, mainly to cover commitments assumed as part of early retirement programs. In 9M08, this had an impact of just Euro 14 million. Stripping out the impact of these provisions, net finance expense would have only risen by 1.6% in January-September this year, despite the increase in interest rates.

Income from discontinued operations: Euro 4,872 million

ENDESA reported after-tax income from discontinued operations of Euro 4,872 million in 9M08.

Pursuant to the agreement signed on 2 April 2007 between Enel, S.p.A., Acciona, S.A. and E.ON AG, on 26 June 2008 ENDESA sold the German group its entire shareholding in Endesa Europa ─ excluding the trading business and assets located outside Italy, France, Poland and Turkey ─ and Los Barrios and Tarragona thermal plants in Spain.

The sale price for Endesa Europa was Euro 7,126 million, subject to possible adjustments for changes in the debt incurred by the companies sold occurring between 31 May 2008 and 25 June 2008. Furthermore, the buyer will assume the intra-group net debt balance outstanding at Endesa Europa vis-a-vis Endesa Financiación Filiales to the amount of Euro 1,159 million.

The agreed sale price for Los Barrios and Tarragona power stations was Euro 769 million.

ENDESA registered a gross capital gain for this transaction of Euro 4,552 million.

Cash flow from operating activities: Euro 3,976 million

Cash flow from operating activities amounted to Euro 3,976 million in the first nine months of 2008, a drop of 1.5% vs. 9M07.

This decrease was due entirely to a decline in cash flow generated by European subsidiaries sold to E.ON in June, as cash flow from activities in Spain and Portugal and Latin America increased.

CASH FLOW FROM OPERATING ACTIVITIES
		Euro million		% chg vs. 9M07
Spain and Portugal		2,333		8.8
Latin America		1,391		10.8
Rest		252		(60.5)
TOTAL		3,976		(1.5)

Investment: Euro 2,434 million, 68.6% in Spain and Portugal

ENDESA invested a total of Euro 2,434 million in 9M08 excluding investments in assets held for sale, of which Euro 2,262 million was capex and intangible investments. The remaining Euro 172 million corresponded to financial investments.

INVESTMENT(*)
		Euro million
		Capex and intangibles		Financial		TOTAL
Spain and Portugal		1,532		138		1,670
Latin America		664		34		698
Rest		66		-		66
TOTAL		2,262		172		2,434

(*) Excludes investment of Euro 348 million in the renewable energy assets to be contributed to a joint venture with Acciona.

Endesa was awarded 20% of ESB's generation assets which includes 1,068 MW (4 plants) plus 2 sites for Euro 450 million. The transaction will be completed in the next few months once certain requirements set by the bidding process are met..

Financial position

ENDESA had net debt of Euro 13,430 million at 30 September 2008, a reduction of Euro 7,402 million vs. 31 December 2007.

BREAKDOWN OF NET DEBT BY BUSINESS LINE
		Euro million
		30/09/08		31/12/07		Difference		% chg.
Spain and Portugal		7,797		14,015		(6,218)		(44.4)
Latin America		5,344		5,570		(226)		(4.1)
- Enersis Group		4,583		5,014		(431)		(8.6)
- Other		761		556		205		36.9
Rest		289		1,247		(958)		(76.8)
TOTAL		13,430		20,832		(7,402)		(35.5)

When assessing ENDESA’s debt level, it must be remembered that at 30 September 2008, ENDESA had the recognised right to collect Euro 4,331 million in connection with several regulatory matters: Euro 2,118 million for financing the revenue shortfall from regulated activities and Euro 2,213 million in compensation for stranded costs in non-mainland generation. These receivables increased by Euro 946 million in 9M08.

Stripping out these regulatory items, ENDESA’s net debt at the end of September 2008 was Euro 9,099 million.

The average cost of ENDESA’s total debt was 6.33% in 9M08, while the cost of debt corresponding to the ENERSIS Group was 10.01%. Excluding Enersis Group debt, the average cost of ENDESA’s debt was 4.90% in the period.

STRUCTURE OF ENDESA’S NET DEBT
		ENDESA and direct subsidiaries				Enersis Group				Total ENDESA Group
		Euro million		% of total		Euro million		% of total		Euro million		% of total
Euro		8,753		99		0		0		8,753		65
Dollar		75		1		2,064		45		2,139		16
Other currencies		19		0		2,519		55		2,538		19
TOTAL		8,847		100		4,583		100		13,430		100
Fixed rate		5,923		67		3,636		79		9,559		71
Hedged		1,550		17		183		4		1,733		13
Floating		1,374		16		764		17		2,138		16
TOTAL		8,847		100		4,583		100		13,430		100
Avg. life (years)		4.4				4.8				4.5

At 30 September 2008, ENDESA in Spain had liquidity of Euro 11,439 million, of which Euro 7,357 million corresponded to undrawn sums on unconditional credit lines. These balances are sufficient to cover the debt falling due over the next 43 months. However, at that date the Company’s shareholders had not decided on the dividend to be paid against 2008 results. Given the positive net result obtained in 9M08, the dividend to be paid against 2008 earnings could be sizeable, which would lead to a significant reduction in this liquidity.

Meanwhile, the Enersis Group held cash and cash equivalents totalling Euro 996 million and undrawn, unconditional credit lines of Euro 559 million, covering debt maturities for the next 14 months.

As of the date of release of 9M08 earnings, ENDESA’s long-term debt ratings are A- at Standard & Poor's, A3 at Moody’s and A at Fitch, all with a negative outlook.

Equity: Euro 21,452 million

ENDESA’s consolidated equity was Euro 21,452 million at 30 September 2008, Euro 4,322 million more than at year-end 2007.

Of this amount, Euro 17,351 million was owned by ENDESA S.A. shareholders, and the remaining Euro 4,101 million corresponded to minority shareholders of Group companies.

Equity owned by ENDESA S.A. shareholders has increased by Euro 5,362 million since 31 December 2007 due to the income earned in the first nine months of 2008 after deducting payment of final dividend of Euro 1,091 million against 2007 results as per resolution adopted at the General Shareholders Meeting held on 30 June 2008.

Meanwhile, equity corresponding to minority shareholders of other Group companies has declined by Euro 1,040 million, due to the joint effect of the increase in 9M08 income attributable to these shareholders and the lower balance corresponding to them in the equity of the companies sold to E.ON.

Financial leverage

At 30 September 2008, ENDESA had a leverage ratio of 62.6%, 59 percentage points below the ratio at year-end 2007, due mainly to the sale of assets to E.ON.

Accounting presentation criteria

As we have already mentioned, on 26 June 2008 ENDESA sold to E.ON the bulk of its assets in Europe located outside the Iberian mainland, in addition to Los Barrios and Tarragona power stations in Spain.

In accordance with the commitments acquired by Acciona and Enel as shareholders of ENDESA, in the next few months Acciona and ENDESA will contribute their renewable generation assets to a joint venture which will be at least 51%-owned by Acciona.

In accordance with IFRS 5, the renewable generation assets included in this agreement and those sold to E.ON are presented as follows:

• The consolidated balance sheet recognises the renewable energy assets to be contributed to the joint venture in which Acciona will have a stake of at least 51% (classified as assets held for sale) in a single heading called “Assets held for sale and discontinued operations”. The assets classified under this heading are not depreciated.

The liabilities associated with these assets are also grouped into a single heading called “Liabilities associated with assets held for sale and discontinued operations”.

The consolidated balance sheet at 31 December 2007 also recognises the assets and liabilities sold to E.ON under these headings.

• The consolidated income statement recognises the after-tax income generated by the assets sold to E.ON (classified as discontinued operations) until the date of the sale, in addition to the net capital gain generated in this operation, in a single heading called “After-tax income from discontinued operations”.

The consolidated income statement for 9M07 presented for comparative purposes has been modified relative to the one originally released to restate the after-tax income generated by these assets during 9M07 under the same heading.

Income generated by the renewable energy assets to be contributed to the joint venture with Acciona are not included in this heading of the income statement as they are not considered to be discontinued operations, but are each included under their pertinent heading according to their nature.

• In the cash flow statement each heading includes the cash flows from assets reclassified as held for sale or discontinued operations.

Additionally, in 2008 ENDESA decided to change the accounting criteria used to consolidate jointly controlled investments. These investments were consolidated under the equity method until 31 December 2007. From 1 January 2008 they have been accounted for using proportionate consolidation.

The 2007 Consolidated Financial Statements presented for comparative purposes have been modified in relation to the originally issued statements, in order to restate these interests using proportionate consolidation.

ANALYSIS BY BUSINESS

BUSINESS IN SPAIN AND PORTUGAL

Net income - Spain and Portugal: Euro 2,019 million

ENDESA reported net income of Euro 2,019 million in the first nine months of 2008, an increase of Euro 630 million compared to the first nine months of 2007. This figure includes income from discontinued operations, including both the income obtained from the sale of Los Barrios and Tarragona plants to E.ON, and after-tax income obtained from these plants until the date of their sale.

Stripping out the result of discontinued operations, net income from continuing activities attributable to ENDESA shareholders corresponding to the business in Spain and Portugal was Euro 1,675 million in 9M08, a rise of 22.4% vs. 9M07.

EBITDA rose 10.5% vs. 9M07 to Euro 3,268 million and EBIT advanced 19% to Euro 2,466 million.

Highlights

Generation costs rose across the board in the first nine months of the year, due to lower rainfall, higher fuel prices and the increased cost of CO₂ emission rights. The increase in generation costs triggered a 71.9% rise in average wholesale prices.

ENDESA sold 64.3% of its mainland output under ordinary regime to deregulated customers: 20.9% in regulatory stipulated auctions and the remainder on the wholesale market.

Nonetheless, the revenues booked by applying the corresponding tariffs were reduced by Euro 363 million according with Royal Decree Law 11/2007, which stipulates that the cost of CO₂ emission rights be netted from generation sale prices.

At the date of presentation of 9M08 Financial Statements, the enacting regulations for Royal Decree Law 11/2007 had yet to be passed. Accordingly, in calculating this deduction, ENDESA used the same formula enacted by the Spanish government to calculate the deduction applicable in 2006 and 2007 in accordance with Royal Decree Law 3/2006.

However, ENDESA has appealed the Ministerial Order approving the calculation method for the discount put forward in the Royal Decree 3/2006, showing its disagreement. In ENDESA’s view, the discount established in Royal Decree 11/2007 should be eliminated or at least particularly not applied to sales carried out via bilateral contracts aimed at deregulated customers as these sales do not generate a deficit for the electricity system.

[OBJECT OMITTED]

Despite the significant rise in generation costs, the electricity tariff increase approved was only 3.3% from 1 January 2008 and 5.6% from 1 July 2008. As a result, it is estimated that the 9M08 sector-wide tariff deficit amounted to Euro 2,521 million, Euro 1,827 million more than the 9M07 figure. ENDESA stands to finance Euro 1,113 million of this amount.

Lastly, electricity demand grew 2% in 9M08 vs. 9M07. This growth in demand was met with a 14.4% increase in energy generated from renewable sources, which accounted for 23.1% of the total, and a 1.4% increase in ordinary regime output.

Key operating highlights

Maintaining a position of leadership in the sector

ENDESA maintained its leading position in the Spanish electricity market in the first nine months of the year.

The Company holds a 32.1% market share in ordinary regime electricity generation, a 42.9% share in distribution, 44.1% in sales to deregulated customers and 42.6% in total sales to final customers.

Competitive advantages in the generation business as compared to the rest of the sector

Nuclear- and hydro-powered energy represented 50.9% of the Company’s mainland generation mix in January-September 2008, compared to 30.2% for the rest of the sector. Furthermore, the load factor at its thermal facilities was also higher than its competitors: 59% vs. 45.9%, respectively.

Further improvements in quality of supply

The Company made further improvements in quality of supply in the first nine months of the year, thereby continuing the positive trend seen over the past few years.

The system average interruption duration index (SAIDI) for 9M08 was 61 minutes, a 25% improvement vs. 9M07. The twelve-month period from 1 October 2007 to 30 September 2008 reflected an improvement of 19%.

These results have been achieved thanks to technical improvements made to ENDESA’s network, its topology and management systems, and also investments made over the past few years (Euro 789 million in 9M08).

Investment in renewable energies

Last January, ENDESA inaugurated the Alto Palencia I and II wind farms in the province of Castellón with a combined capacity of 74 MW. These wind farms, in addition to Mazorral, Cerro Rajola, Casillas I & II and Alto Palancia III wind farms (ENDESA holds stakes in all of them), form part of a 203 MW area known as “Zone 6” of the Valencia region’s wind energy plan, which entails an aggregate investment of more than Euro 200 million.

ENDESA is participating in this project with 498 MW of wind plant capacity divided between three areas. The Plan will be rolled out over the next two years and will require a total investment of more than Euro 500 million by the Company.

Construction and development of the wind farms is being carried out through Proyectos Eólicos Valencianos S.A. (in which ENDESA is a controlling shareholder).

Carbon credit purchases

Under the umbrella of its strategy to acquire carbon credits through participation in Clean Development Mechanism (CDM) projects carried out in developing countries, ENDESA has agreed to purchase 100% of the certified reductions in greenhouse gas emissions through to 2012 in three projects to be carried out at the Chinese company Jiangsu Shagang, which will involve cutting CO₂ emissions by over five million tonnes in this period.

The reductions obtained thanks to these projects are measured and verified by UN-accredited bodies and may be used to meet European companies’ Kyoto Protocol greenhouse gas reduction targets.

Meanwhile, in September 2008, ENDESA acquired AHL (Asin Holding Limited) in the US for Euro 14 million. AHL is a firm dedicated to finding clean development mechanism projects (CDMs) that yield carbon credits or CERs and trades them to companies affected by the Kyoto Protocol. ENDESA has integrated AHL to the newly created Endesa Carbono. ENDESA currently holds a 82.5% stake in Endesa Carbono while the other 17.5% is held by AHL prior partners. Endesa Carbono will be focused on the promotion and development of projects that contribute to the reduction of CO2 emissions.

Revenues: Euro 10,214 million

ENDESA reported revenues of Euro 10,214 million from the electricity business in Spain and Portugal in January-September 2008, an increase of 35.3% compared to 9M07. Of this amount, sales accounted for Euro 9,427 million, 29.4% higher than in 9M07.

SPAIN AND PORTUGAL SALES
		Euro million
		Jan-Sept 2008		Jan-Sept 2007		Difference		% chg.
Mainland generation under Ordinary Regime		3,759		2,938		821		27.9
Sales to deregulated customers		2,356		1,822		534		29.3
Sales in auctions		704		162		542		N/A
Sales in the OMEL		1,062		963		99		10.3
Deductions under RDL 11/2007 and 3/2006		(363)		(9)		(354)		N/A
Renewable/CHP generation		272		187		85		45.5
Regulated revenues from distribution		1,586		1,541		45		2.9
Non-mainland generation and supply		2,293		1,650		643		39.0
Supply to deregulated customers outside Spain		138		250		(112)		(44.8)
Gas supply		804		519		285		54.9
Regulated revenues from gas distribution		43		43		-		-
Other sales and services rendered		532		160		372		232.5
TOTAL		9,427		7,288		2,139		29.4

Mainland generation

ENDESA’s mainland electricity output totalled 54,139 GWh in the first nine months of 2008, 1.1% less than in 9M07. Of this amount, 51,576 GWh corresponded to ordinary regime generation output, 1.8% less than in 9M07. Meanwhile, ENDESA generated 2,563 GWh of energy from renewable sources, a year-on-year increase of 15.9%.

The average pool price was Euro 70.57/MWh during the period, up 62.4% vs. 9M07.

ENDESA sold 11,569 GWh of power in auctions held in the first nine months of the year. At these auctions, the average sale price was Euro 60.8/MWh.

These prices, in addition to the 12.9% increase in the price applied to deregulated market customers, triggered a 27.9% rise in mainland generation sales under the ordinary regime compared to the first nine months of 2007, even though the revenue figure includes a deduction of Euro 363 million as a result of the application of Royal Decree 11/2007, compared to a deduction of Euro 9 million in the first nine months of 2007 for the same concept.

Supply to deregulated customers

ENDESA had 1,273,264 customers on the deregulated market at 30 September 2008: 1,166,149 in the Spanish mainland market, 106,724 on non-mainland market and 391 in European deregulated markets other than Spain.

ENDESA sold a total of 34,666 GWh to these customers in January-September 2008, reflecting an increase of 13.7%. Of this amount, 32,751 GWh was sold to the Spanish deregulated market, an increase of 20.3%, and 1,915 GWh to other deregulated European markets, reflecting a decline of 41.3%.

Sales to deregulated customers in Spain (excluding tolls paid to Endesa Distribución) totalled Euro 2,548 million, a 31.5% increase on 9M07. Of this amount, Euro 2,356 million corresponded to the mainland deregulated market and Euro 192 million to the non-mainland system.

Revenues from supply to deregulated European markets other than Spain amounted to Euro 138 million.

The average sale price to end customers rose 12.9% between 9M07 and 9M08, as described above.

CHP/renewables generation

Renewable and CHP companies fully consolidated by ENDESA generated 2,563 GWh in 9M08, a year-on-year increase of 15.9%. ENDESA also has holdings in other companies which generated an additional 693 GWh during the same period.

Revenues from sales of renewable/CHP energy generated by consolidated companies totalled Euro 272 million, 45.5% more than in 9M07. EBITDA in this segment rose 61.9% to Euro 204 million.

Non-mainland generation

ENDESA’s output in non-mainland systems was 11,357 GWh in 9M08, a year-on-year growth of 2.1%.

Related sales rose 39% to Euro 2,293 million, as sales prices internalised higher generation costs.

Distribution

ENDESA distributed 89,849 GWh of electricity in the Spanish market to 30 September 2008, 1.9% more than in the first nine months of 2007.

Revenues from regulated distribution activities totalled Euro 1,586 million, up 2.9% on 9M07.

Gas distribution and supply

ENDESA’s group of investees sold a total of 29,537 GWh of natural gas in the Spanish market in 9M08, 24.4% more than in 9M07.

Of this amount, 29,138 GWh were sold through fully consolidated companies, representing an increase of 24.4% from 9M07. In turn, 27,628 GWh were sold to customers on the deregulated market, an increase of 26.4%, and 1,510 to customers on the regulated market, 4.6% less than in 9M07.

The 29,537 GWh sold in both, regulated and deregulated markets, together with the 21,596 GWh of gas consumed in ENDESA’s own generation plants, amount to a total of 51,133 GWh, implying a market share of 15.2%.

Revenues from gas sales in the deregulated market rose 54.9% to Euro 804 million in 9M08.

Other operating revenues

Other operating revenues in 9M08 totalled Euro 787 million, up Euro 524 million over 9M07.

This item includes Euro 452 million corresponding to the 9M08 portion of CO₂ emission rights allocated to ENDESA within the scope of the Spanish National Allocation Plan for emissions (NAP), which are recorded under revenues.

This figure is Euro 449 million higher than that recognised under revenues in 9M07, due mainly to the sharp increase in the market price of these rights. However, this jump in revenues was fully offset by the higher expense recognised for the use of the emission rights allocated under NAP.

Operating expense

The breakdown of the operating expense in the Spanish and Portuguese business in 9M08 is shown below:

OPERATING EXPENSE IN SPAIN AND PORTUGAL
		Euro million
		Jan-Sept 2008		Jan-Sept 2007		Difference		% chg.
Supplies and services		5,333		2,975		2,358		79.3
Power purchases		1,293		711		582		81.9
Fuel consumption		2,281		1,574		707		44.9
Power transmission expenses		442		368		74		20.1
Other supplies and services		1,317		322		995		309.0
Personnel expenses		902		895		7		0.8
Other operating expenses		841		856		(15)		(1.8)
Depreciation and amortisation charges		802		885		(83)		(9.4)
TOTAL		7,878		5,611		2267		40.4

Power purchases

Power purchases jumped 81.9% year-on-year to Euro 1,293 million in 9M08.

This growth reflects the impact of the increased cost of operating in the wholesale generation market as a result of the higher average pool price, as well as increased gas purchases for supply to the deregulated market, compounded by higher gas prices.

Fuel consumption

Despite lower thermal output during the period, fuel consumption was Euro 2,281 million in 9M08, an increase of 44.9%, as a result of higher cost of raw materials on the international markets.

Other supplies and services

Other supplies and services expense totalled Euro 1,317 million, Euro 995 million more than in 9M07.

Of this amount, Euro 580 million corresponds to the higher value assigned to freely allocated emission rights in 9M08 vs. 9M07 to cover the emission rights deficit, essentially as a result of higher market prices for these rights.

It should be noted that ENDESA has started to apply CERs relating to CDM projects to cover its emissions deficit. The rights are already in the Company’s accounts in the pertinent international organisms and have triggered a substantial reduction in emissions costs, in a context where the price of emission rights is rising.

Personnel and other fixed operating expenses

Fixed costs stood at Euro 1,743 million in 9M08, down 0.5% vs. the same period last year.

Personnel expenses rose 0.8% to Euro 902 million, with “Other fixed operating expenses” declining 1.8% to Euro 841 million.

Depreciation and amortisation charges

Depreciation and amortisation charges amounted to Euro 802 million, i.e. Euro 83 million less than in 9M07. This decrease was the result of the recognition in 9M07 of a Euro 81 million charge to restate the value of CO₂ emission rights acquired from third parties to fair value at 30 September 2007 and the fact that the renewable assets to be contributed to a joint venture in which Acciona will hold at least a 51% stake were not depreciated. In 2007, this sum was Euro 50 million.

Net finance expense: Euro 334 million

Net finance expenses in 9M08 amounted to Euro 334 million, 5% more than in 9M07.

This increase is mainly a reflection of the effect of interest-rate trends on the recognised carrying amount of provisions for contingencies, essentially provisions for early retirement program expenses, which are measured at present value.

The rise in interest rates in 9M07 resulted in a reduction in net interest expense in the amount of Euro 83 million, while the performance of interest rates in 9M08 triggered a charge of Euro 14 million. Excluding this effect, net finance expense fell 13.2% despite an increase in interest rates, as a consequence of a reduction in the debt of this business.

Net financial debt for the Spain and Portugal business at 30 September 2008 stood at Euro 7,797 million, down from Euro 14,015 million at year-end 2007. Of this amount, Euro 4,331 million was incurred to finance regulatory receivables: Euro 2,118 million to finance the revenue shortfall from regulated activities and Euro 2,213 million to fund the non-mainland generation deficit. These amounts are Euro 946 million higher than those recognised at year-end 2007.

Cash flow from operating activities: Euro 2,333 million

Cash flow from operating activities from Spanish and Portuguese electricity business totalled Euro 2,333 million through September 2008, an increase of 8.8% over the same period last year.

Investment: Euro 1,670 million

Investments in Spain and Portugal totalled Euro 1,670 million in 9M08, 5% higher than in 9M07. Of this figure, 85.3% corresponds to capex for development or improvement of electricity generation and distribution facilities. ENDESA also invested Euro 348 million in renewable energy assets in 9M08, which will be contributed to the joint venture with Acciona in which the latter will hold a stake of at least 51%.

TOTAL INVESTMENT IN SPAIN AND PORTUGAL
		Euro million
		Jan-Sept 2008	Jan-Sept 2007			% chg.
Capex		1,424	1,449			(1.7)
Intangible		108	51			111.8
Financial		138	91			51.7
Total investments		1,670	1,591			5.0
CAPEX IN SPAIN AND PORTUGAL
		Euro million
		Jan-Sept 2008			Jan-Sept 2007			% chg.
Generation		567			617			(8.1)
Distribution		824			810			1.7
Other		33			22			50.0
Total		1,424			1,449			(1.7)

(*) Excludes investment in the renewable energy assets to be contributed to a joint venture with Acciona.

The breakdown of capex reflects the substantial effort made by the Company to improve service quality in Spain and to increase generation capacity.

BUSINESS IN LATIN AMERICA

Net income in Latin America: Euro 339 million

In Latin America, 9M08 net income rose 12.3% year-on-year to Euro 339 million.

Highlights

In the first nine months of 2008, electricity demand in countries where ENDESA operates varied unevenly, growing 10.4% in Peru, 4% in Brazil, 2.7% in Argentina, 2.2% in Colombia and 0.1% in Chile.

In total, these companies reported electricity sales of 46,868 GWh, up 2% on the same period in 2007. By country, there were especially significant increases in Peru (+7.8%), Colombia (+4.0%) and Brazil (+3.3%). These increases offset the drop in sales in the Chilean market (-2.9%) caused by the unfavourable scenario for energy affecting this country in 9M08, which prompted the government to implement measures aimed at encouraging energy saving.

The generation business is still affected by natural gas supply problems in 2008, resulting in a sharp rise in the cost of thermal generation.

Accumulated output at ENDESA’s subsidiaries was 45,223 GWh, an increase of 0.3% vs. 9M07. Growth in output in Chile (+5.9%), Colombia (+9.4%) and Peru (+6.9%) offset the declines in Argentina (-14.6%) and Brazil (-6.0%)

OUTPUT AND SALES IN THE LATIN AMERICAN BUSINESS
		Output (GWh)				Sales (GWh)
		Jan-Sept 2008		% chg vs. Jan-Sept 2007		Jan-Sept 2008		% chg vs. Jan-Sept 2007
Chile		15,667		5.9		9,418		(2.9)
Argentina		10,676		(14.6)		12,148		1.5
Peru		6,581		6.9		4,168		7.8
Colombia		9,602		9.4		8,813		4.0
Brazil		2,697		(6.0)		12,321		3.3
TOTAL		45,223		0.3		46,868		2.0

Improvement in generation and distribution margins

Lower rainfall in part of the year and continuing gas supply problems triggered higher load factors at thermal power stations, specifically, an increased use of liquid fuels which in turn pushed generation costs higher.

Nonetheless, ENDESA’s favourable generation mix in Latin America and higher sales prices in most of the markets where its subsidiaries operate led to a 45.3% increase in the unit margin to US$40.1/MWh. Significant increases in US$ were made in most countries: Chile (+66.3%), Brazil (+48%), Argentina (+35.9%) and Colombia (+22.8%). In contrast, in Peru, the higher thermal output, the backlog in the Camisea pipeline and the drop in the average sales price, due to changes in the customer mix, led to an 11% drop in the average unit margin for generation.

The unit margin in the distribution business increased by 17% vs. 9M07 to US$46.7/MWh.

This increase is a consequence of the unit margin improvements made in all countries except in Argentina, where the retroactive application of the tariff hike was accounted in 2007.

Reduction in distribution losses

Energy distribution losses were 10.8% in 9M08, an improvement of 0.5 pp on the same period last year. We note the improvements made in Brazil and Colombia (1.3 pp and 0.8 pp respectively).

New capacity development

In 9M08, Endesa Chile made further progress on the construction of the San Isidro II (Chile) CCGT power plant, which will have a total installed capacity of 379 MW. In January, work corresponding to the second phase of the project was completed, adding 105 MW of new capacity and putting total installed capacity at 353 MW. The project is expected to be completed in 2009.

Work also continued on the Aysén project, which entails the construction of five hydro plants with total installed capacity of 2,750 MW, the last of which is currently estimated to come on stream in 2022. Endesa Chile and Colbún hold 51% and 49% stakes, respectively, in this project.

Construction work also began on two new power stations in Chile: the Bocamina II coal-fired plant, which will have an estimated installed capacity of 370 MW and is slated to be commissioned in 2010, and the 250 MW open cycle TG Quinero gas plant, expected to come on stream in 2009. The civil works tender for the construction of the 150 MW Cóndores hydro plant also got underway in 2008. This plant is expected to be commissioned in 2012.

Also in Chile, Endesa Eco carried out the first synchronisation of the Ojos de Agua, 9 MW, minihydro plant, which came on stream on 27 June, while work continued on the 60MW Canela II wind farm project, slated for 2009.

In Peru, a contract was awarded to expand Santa Rosa plant by constructing a 187 MW open cycle. This is expected to come on stream in 2010.

In Colombia, the upgrade of the second unit of the Termocartagena plant was completed, adding 61 MW to the plant’s current 142 MW capacity and ENDESA ensured itself, via auction, a viability charge of US$ 13,998/MWh for the 400 MW, Quimbo hydro plant project, expected to come onstream at the end of 2013.

Takeover bids for the Peruvian subsidiaries

With Enel and Acciona taking control of ENDESA in October 2007, the Company was required under Peruvian law to launch compulsory ex post facto takeover bids for the percentage of its three listed Peruvian subsidiaries that it does not control.

The transaction was carried out through Genaralima, a wholly-owned subsidiary of ENDESA, with offers made for 23.78% of Edegel, 24% of Edelnor and 24% of Empresa Eléctrica de Piura.

On 27 October take over of 23,78% of Edegel was completed at a price of 1.64 new soles per share. As the offer was wholly accepted Endesa will have to pay €229 million.

On 31 October take over of 24% of Emgesa was completed at a price of 2.46 new soles per share. As the offer was wholly accepted Endesa will have to pay €96 million.

A definitive price has yet to be set for the takeover bid for Empresa Eléctrica de Piura. However, 24% of this company would be worth €26 million based on the valuation issued on 19 September .

Regulatory update

Brazil

On 15 March, Ampla completed its tariff revision, implementing an average increase of 10.95% on the final price for customers, implying a 6.5% rise in DVA. This review also recognised additional energy purchase costs incurred in January and February 2008 in the amount of Euro 30 million. This amount is to be collected over the next 12 months and was recognised under revenues. The average purchase price to be recognised from mid-March was increased from RBL105/MWh to RBL158.9/MWh for energy not purchased under contract, mitigating the negative impact of high spot prices for the rest of the year.

Chile

In Chile, the Unconventional Renewable Energy Law came into effect on 1 April 2008. This legislation stipulates that 5% of total power must be generated from renewable sources between 2010 and 2014. This mandatory threshold will be increased by 0.5% per annum from 2015 to a maximum of 10% in 2024, after which it will stay at 10%.

Furthermore, the definitive “nudo” price report for May-October 2008 was published, setting the node price at US$ 118.28/MWh without surcharges.

The rationing decree was repealed with effect from 1 September 2008. This move is expected to at least partially mitigate the fall in demand in recent months.

On 1 August 2008, the “nudo” price in pesos was increased by 10% (+5.2 pesos/kWh to 57.62 pesos/kWh), an extraordinary indexation due to exchange-rate trends. In US$, the node price fell by 3% to US$ 114.72/MWh.

Furthermore, the definitive node price report was published in October. This applies from November, with a 220kW Alto Jahuel monomial price of US$ 119.31/MWh, which is 4.9% higher than the extraordinary tariff set in August.

Peru

On 2 May 2008, a Decree Law was passed setting the bases for efficient generation with renewable energy resources. This law establishes, among other things, that renewable resources shall represent 5% of the country’s total energy consumption in the next five years.

On 21 June, the regulator released its proposed ‘barra’ price for setting tariffs in Peru between May 2008 and April 2009 of US$ 38.93/Mwh, an increase of 3.6% over the prevailing average benchmark price.

In June 2008, a decree law was passed temporarily limiting marginal costs arising from the backlog in the Camisea pipeline. It is estimated that this backlog could be cleared in 2009.

Argentina

In August 2008, a new tariff structure was approved for Edesur effective from 1 July 2008. It marks the first increase for residential customers since 2002, when a tariff freeze was announced, and will only affect customers with a bi-monthly consumption of more than 650 KWh (24% of the total). Increases will range between 13 and 30% based on consumption. There will also be average tariff increases of 10% for industrial and business customers.

Colombia

The definitive WACC to be applied in the next tariff review was set in September. This will stand at 13.9% for distribution and 13% for transmission.

Also in September 2008, the resolution including the necessary methodology and values to estimate unit distribution costs under the review of Codensa’s tariffs was also adopted.

EBITDA: Euro 2,160 million

EBITDA in the Latin American business totalled Euro 2,160 million in 9M08, a 21% increase on 9M07. EBIT rose 25.9% to Euro 1,731 million.

EBITDA & EBIT IN LATIN AMERICA
		EBITDA (Euro million)						EBIT (Euro million)
		Jan-Sept 2008		Jan-Sept 2007		% chg.		Jan-Sept 2008		Jan-Sept 2007		% chg.
Generation and transmission		1,254		924		35.7		1,024		700		46.3
Distribution		942		924		1.9		751		744		0.9
Other		(36)		(63)		N/A		(44)		(69)		N/A
TOTAL		2,160		1,785		21.0		1,731		1,375		25.9

Although the above table shows only a slight improvement from 9M07, remember that 2007 income included Euro 40 million reported at the Argentine distribution business for the part corresponding to previous years of the tariff increase approved in 2007 applied retroactively from November 2005. Stripping this out, distribution EBITDA increased by 6.6%. This figure, along with the 35.7% increase in the EBITDA of the generation and transmission business, underlines the excellent performance of ENDESA’s Latin American business.

The earnings performance in the generation and distribution businesses reflect the risk mitigation and earnings stability created as a result of ENDESA’s portfolio of holdings in the region.

BREAKDOWN OF EBITDA AND EBIT IN LATAM BY BUSINESS LINE
Generation and transmission
				EBITDA (Euro million)												EBIT (Euro million)
				Jan-Sept 2008				Jan-Sept 2007				% chg.				Jan-Sept 2008				Jan-Sept 2007				% chg.
Chile				613				370				65.7				520				279				86.4
Colombia				240				191				25.7				202				155				30.3
Brazil				157				125				25.6				143				112				27.7
Peru				89				113				(21.2)				52				77				(32.5)
Argentina				95				89				6.7				61				55				10,9
TOTAL Generation				1,194				888				34.5				978				678				44.2
Brazil-Argentina interconnection				60				36				66,7				46				22				109.1
TOTAL Generation and Transmission				1,254				924				35.7				1,024				700				46.3
Distribution
		EBITDA (Euro million)												EBIT (Euro million)
		Jan-Sept 2008				Jan-Sept 2007				% chg.				Jan-Sept 2008				Jan-Sept 2007				% chg.
Chile		168				144				16.7				150				125				20.0
Colombia		255				218				17.0				202				164				23.2
Brazil		391				389				0.5				307				321				(4.4)
Peru		71				67				6.0				51				45				13.3
Argentina		57				106				(46.2)				41				89				(53.9)
TOTAL Distribution		942				924				1.9				751				744				0.9

Generation and transmission

Chile

Rising prices pushed up fuel costs by 75.4%. However, higher “nudo” and spot prices and the improved rainfall in recent months boosted EBITDA and EBIT by 65.7% and 86.4% year-on-year, to Euro 613 million and Euro 520 million, respectively.

Colombia

The Colombian generation business reported EBITDA of Euro 240 million and EBIT of Euro 202 million in 9M08, year-on-year increases of 25.7% and 30.3%, respectively, due mainly to the higher gross margin on electricity sales resulting from the 9.4% increase in power generated and higher sales prices in the system.

Brazil

ENDESA’s subsidiaries in Brazil generated a total of 2,697 GWh in 9M08, 6.0% less than in 9M07. This was due to lower rainfall in the first few months of the year and the fall in output at the Fortaleza plant as a result of gas supply problems.

However, high spot prices provided a very significant boost to ENDESA’s revenues from hydro generation in Brazil, driving EBITDA to Euro 157 million and EBIT to Euro 143 million in 9M08, year-on-year growth of 25.6% and 27.7%, respectively.

Peru

ENDESA’s subsidiaries in Peru generated total output in 9M08 of 6,581 GWh, 6.9% more than in 9M07.

However, the higher spot price and increased output did not fully offset the reduction in sales prices caused by the change in the customer mix, consistent with lower spot sales and higher sales to large deregulated customers at lower prices. This drove revenues down 4.2%. This fall in sales along, with the 38.8% increase in fuel costs, resulted in a 21.2% drop in EBITDA to Euro 89 million and a 32.5% decline in EBIT to Euro 52 million.

Argentina

The output of ENDESA’s Argentine subsidiaries stood at 10,676 GWh in 9M08, down 14.6% vs. 9M07, resulting in a 12.7% drop in sales.

This drop in sales, along with depreciation of the Argentine peso against the euro, caused a decline in the gross margin. However, this decline was offset by the collection of damages of Euro 11 million at Dock Sud from its insurance company following an accident at the plant. As a result, EBITDA rose 6.7% to Euro 95 million and EBIT by 10.9% to Euro 61 million.

Interconnection between Argentina and Brazil

In the second quarter of 2008, Cien and Camesa signed an agreement to export power from Brazil to Argentina. The exports were made between May and August at a rate of up to 1,500 MW/month, returning to Argentina the power imported between September and November at a rate of up to 2,000 MW/month.

As a result of this agreement, the interconnection registered a year-on-year increase of 66.7% in EBITDA to Euro 60 million in 9M08, while EBIT rose 109.1% to Euro 46 million.

Cien, the line operator, is making progress on the modification of its business model to operate this interconnection. The goal is to turn it into an asset subject to regulated remuneration to ensure positive returns and prevent revenues from being dependent on fluctuating line usage.

Distribution

Chile

Electricity sold in Chile fell 2.9% in 9M08. This drop was due mainly to the rationing decree that was in place between March and August to foster energy savings. The objective of this decree was to mitigate potential problems affecting energy production in the country.

However, sales rose 30.7%, driven by higher unit margins, pushing up EBITDA and EBIT by 16.7% and 20% to Euro 168 million and Euro 150 million, respectively.

Colombia

EBITDA and EBIT in the distribution business rose 17% and 23.2%, respectively, due mainly to higher sales volumes (+4%), and a more favourable indexation of tariffs to power purchase prices and revenues from ancillary services.

Brazil

The higher spot electricity price and increase in energy sales prompted a 19.9% increase in the cost of energy acquired. This higher cost was only partially passed on to the customer tariff, resulting in a 15.4% increase in sales. This led to a 0.5% rise in EBITDA to Euro 391 million vs. 9M07, and a 4.4% drop in EBIT, to Euro 307 million.

However, as explained above, the regulator recognised Euro 30 million in surplus power purchase costs incurred in January and February 2008, which will be recognised by Ampla via higher tariffs in the coming 12 months.

Peru

The unit margin in the distribution business remained virtually unchanged from 9M07, with the 7.8% increase in electricity sold resulting in a 6% jump in EBITDA to Euro 71 million. EBIT totalled Euro 51 million, a rise of 13.3%.

Argentina

EBITDA and EBIT fell by Euro 49 and Euro 48 million, respectively, vs. 9M07. These decreases reflect the recognition in 2007 of Euro 40 million of prior year revenues in connection with the retroactive application to November 2005 of the tariff hike finally enacted that quarter.

Stripping out this effect, 9M08 EBITDA and EBIT fell by 13.6% and 16.3%, respectively. These declines are due to the inflation-linked increase in fixed costs, which was not covered by the corresponding tariff increase.

Net finance expense: Euro 414 million

ENDESA’s Latin American business generated a net finance expense of Euro 414 million in 9M08, Euro 60 million more than in 9M07.

Net debt at ENDESA’s Latin American business stood at Euro 5,344 million at 30 September 2008, a reduction of Euro 226 million since year-end 2007.

Cash flow from operating activities: +10.8%

Cash flow generated by ENDESA’s business in Latin America totalled Euro 1,391 million in the first nine months of 2008, an increase of 10.8% on 9M07.

Cash returns: Euro 186 million

Cash returns to the parent company from ENDESA’s Latin American business in the first nine months of 2008 totalled Euro 186 million.

Investment: Euro 698 million

Investment in Latin America in 9M08 totalled Euro 698 million, of which Euro 659 million was capex.

CAPITAL EXPENDITURE IN LATIN AMERICA
		Euro million
		Jan-Sept 2008		Jan-Sept 2007		% chg.
Generation		178		171		4.1
Distribution and Transmission		414		295		40.3
Other		67		68		(1.5)
TOTAL		659		534		23.4

STATISTICAL APPENDIX

KEY FIGURES

Electricity Generation Output (GWh)		Jan-Sept 08		Jan-Sept 07		% chg.
Business in Spain and Portugal		66,442		66,825		(0.6)
Business in Latin America		45,223		45,100		0.3
Rest		694		677		2.5
TOTAL		112,359		112,602		(0.2)
Electricity Generation Output in Spain and Portugal (GWh)		Jan-Sept 08		Jan-Sept 07		% chg.
Mainland		54,139		54,733		(1.1)
Nuclear		20,318		18,605		9.2
Coal		17,296		23,279		(25.7)
Hydro		5,944		6,227		(4.5)
Combined cycle (CCGT)		7,680		4,132		85.9
Fuel oil		338		279		21.4
Renewables/CHP		2,563		2,211		15.9
Non-mainland		11,357		11,126		2.1
Portugal		946		966		(2.1)
TOTAL		66,442		66,825		(0.6)
Electricity Generation Output in Latin America (GWh)		Jan-Sept 08		Jan-Sept 07		% chg.
Chile		15,667		14,795		5.9
Argentina		10,676		12,501		(14.6)
Peru		6,581		6,156		6.9
Colombia		9,602		8,778		9.4
Brazil		2,697		2,870		(6.0)
TOTAL		45,223		45,100		0.3
Electricity sales (GWh)		Jan-Sept 08		Jan-Sept 07		% chg.
Business in Spain and Portugal		83,217		85,177		(2.3)
Regulated market		48,551		54,687		(11.2)
Deregulated market		34,666		30,490		13.7
Business in Latin America		46,868		45,943		2.0
Chile		9,418		9,695		(2.9)
Argentina		12,148		11,973		1.5
Peru		4,168		3,868		7.8
Colombia		8,813		8,474		4.0
Brazil		12,321		11,933		3.3
Rest		694		677		2.5
TOTAL		130,779		131,797		(0.8)
Gas sales (GWh)		Jan-Sept 08		Jan-Sept 07		% chg.
Regulated market		1,510		1,582		(4.6)
Deregulated market		27,628		21,849		26.4
TOTAL		29,138		23,431		24.4
Workforce		30/9/08		31/12/07		% chg.
Business in Spain and Portugal		13,561		12,746		6.4
Business in Latin America		12,824		12,188		5.2
Rest		95		2,161		(95.6)
TOTAL		26,480		27,095		(2.3)

FINANCIAL DATA

Key figures									Jan-Sept 08							Jan-Sept 07						% chg.
EPS (Euro)									6.42							1.87						243.8
CFPS (Euro)									3.76							3.78						(1.5)
BVPS (Euro)									16.39							11.24						44.7
Net financial debt (Euro million)									30/9/08							31/12/07						% chg.
Business in Spain and Portugal									7,797							14,015						(44.4)
Business in Latin America									5,344							5,570						(4.1)
Enersis									4,583							5,014						(8.6)
Rest									761							556						36.9
Rest									289							1,247						(76.8)
TOTAL									13,430							20,832						(35.5)
Financial leverage (%)									62.6							121.6						(48.5)
Ratings (05/11/08)				Long term								Short term						Outlook
Standard & Poor’s				A-								A -2						Negative
Moody’s				A3								P-2						Negative
ENDESA’s main fixed-income issues										Spread over IRS (bp)
										30/9/08							31/12/07
4.3Y GBP 400M 6.125% Mat. June 2012										75							54
4.9Y Euro 700M 5.375% Mat. Feb 2013										71							66
Stock market data				30/9/08								31/12/07										% chg.
Market cap (Euro million)				27,231								38,486										(29.2)
Number of shares outstanding				1,058,752,117								1,058,752,117										--
Nominal share value (Euro)				1.2								1.2										--
Stock market data				Jan-Sept 2008								Jan-Sept 2007										% chg.
Trading volumes (shares)
Madrid stock exchange				178,446,463								2,555,772,226										(93.0)
Average daily trading volume (shares)
Madrid stock exchange				929.409								13.451.433										(93.1)
Share price		High 9M08					Low 9M08							30/9/08						31/12/07
Madrid stock exchange (Euro)		37.20					25.67							25.72						36.35
Dividends (Euro cents/share)					Against 2007 earnings
Interim dividend (02/01/08)					50.0
Final dividend (08/07/08)					103.1
Total DPS					153.1
Pay-out (%)					60.6
Dividend yield (%)					4.2

Important legal disclaimer

This document contains certain "forward-looking" statements regarding anticipated financial and operating results and statistics and other future events. These statements are not guarantees of future performance and they are subject to material risks, uncertainties, changes and other factors that may be beyond ENDESA’s control or may be difficult to predict.

Forward-looking statements include, but are not limited to, information regarding: estimated future earnings; anticipated increases in wind and CCGTs generation and market share; expected increases in demand for gas and gas sourcing; management strategy and goals; estimated cost reductions; tariffs and pricing structure; estimated capital expenditures and other investments; estimated asset disposals; estimated increases in capacity and output and changes in capacity mix; repowering of capacity and macroeconomic conditions. The main assumptions on which these expectations and targets are based are related to the regulatory setting, exchange rates, divestments, increases in production and installed capacity in markets where ENDESA operates, increases in demand in these markets, assigning of production amongst different technologies, increases in costs associated with higher activity that do not exceed certain limits, electricity prices not below certain levels, the cost of CCGT plants, and the availability and cost of the gas, coal, fuel oil and emission rights necessary to run our business at the desired levels.

In these statements we avail ourselves of the protection provided by the Private Securities Litigation Reform Act of 1995 of the United States of America with respect to forward-looking statements.

The following important factors, in addition to those discussed elsewhere in this document, could cause actual financial and operating results and statistics to differ materially from those expressed in our forward-looking statements:

Economic and industry conditions: materially adverse changes in economic or industry conditions generally or in our markets; the effect of existing regulations and regulatory changes; tariff reductions; the impact of any fluctuations in interest rates; the impact of fluctuations in exchange rates; natural disasters; the impact of more stringent environmental regulations and the inherent environmental risks relating to our business operations; the potential liabilities relating to our nuclear facilities.

Transaction or commercial factors: any delays in or failure to obtain necessary regulatory, antitrust, internal and other approvals for our proposed acquisitions, investments or asset disposals, or any conditions imposed in connection with such approvals; our ability to integrate acquired businesses successfully; the challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters during the process of integrating acquired businesses; the outcome of any negotiations with partners and governments. Delays in or impossibility of obtaining the pertinent permits and rezoning orders in relation to real estate assets. Any delays in or failure to obtain necessary regulatory approvals, including environmental to construct new facilities, repowering or enhancement of existing facilities; shortages or changes in the price of equipment, materials or labour; opposition of political and ethnic groups; adverse changes in the political and regulatory environment in the countries where we and our related companies operate; adverse weather conditions, which may delay the completion of power plants or substations, or natural disasters, accidents or other unforeseen events; and the inability to obtain financing at rates that are satisfactory to us.

Political/governmental factors: political conditions in Latin America; changes in Spanish, European and foreign laws, regulations and taxes.

Operating factors: technical difficulties; changes in operating conditions and costs; the ability to implement cost reduction plans; the ability to maintain a stable supply of coal, fuel and gas and the impact of fluctuations on fuel and gas prices; acquisitions or restructurings; the ability to implement an international and diversification strategy successfully.

Competitive factors: the actions of competitors; changes in competition and pricing environments; the entry of new competitors in our markets.

Further details on the factors that may cause actual results and other developments to differ significantly from the expectations implied or explicitly contained in this document are given in the Risk Factors section of the current ENDESA Share Registration Statement filed with the Comisión Nacional del Mercado de Valores (the Spanish securities market watchdog or the “CNMV” for its initials in Spanish).

No assurance can be given that the forward-looking statements in this document will be realised. Except as may be required by applicable law, neither ENDESA nor any of its subsidiaries intends to update these forward-looking statements.